EXHIBIT 99.2
CONTACT: Jeffrey J. Hattara (NYSE-BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS RESULTS FOR THE YEAR AND QUARTER ENDED
DECEMBER 31, 1999
February 1, 2000 - Minneapolis, MN - Today, BMC Industries, Inc. reported an
overall increase in annual revenues and net income. For the year ended December
31, 1999, BMC revenues increased $18.7 million to $353.9 million, compared with
$335.1 million in 1998. Net income for the year was $7.8 million, or $0.28 per
diluted share, compared with a loss of $30.6 million, or ($1.13) per diluted
share in 1998.
For the quarter ended December 31, 1999, BMC revenues increased $6.0 million to
$87.5 million, as compared to $81.5 million in fourth quarter 1998. Total fourth
quarter 1999 income from operations was $2.5 million versus $10.9 million in
fourth quarter 1998. BMC reported breakeven performance, or $0.00 per diluted
share, for fourth quarter 1999, compared to net income of $4.7 million, or $0.17
per diluted share, for the fourth quarter of 1998.
Paul B. Burke, BMC's Chairman and Chief Executive Officer, stated: "Our
Precision Imaged Products group continued its solid progress in the fourth
quarter, with a 13% increase in revenues from fourth quarter 1998. PIP finished
the year on a positive note with increased revenues and earnings resulting from
strong manufacturing performance at both mask facilities. In addition, BMC
continued to reduce its debt while furthering its investment in strategic
initiatives intended to optimize operating performance and growth."
Mr. Burke continued: "The costs associated with implementing several initiatives
aimed at renewing Vision-Ease's growth in sales and earnings negatively affected
Vision-Ease's fourth quarter performance. These initiatives included
polycarbonate marketing and manufacturing process improvements, restructuring
the organization and the acceleration of the movement of production to low cost
locations. We expect a favorable impact from these initiatives in 2000."
-more-
For the full year, BMC's Optical Products ("Vision-Ease") sales grew $12.9
million, or 11%, from $123.1 million in 1998 to $136.0 million in 1999.
Operating earnings for 1999 were $5.7 million, as compared to $10.2 million in
1998.
BMC's Optical Products group generated sales of $29.2 million in the fourth
quarter of 1999, down 3%, or $0.8 million, from the prior year quarter.
Continued softness in the retail optical market, product transition issues and
highly competitive promotional practices favoring two-for-one low-end lens
products affected fourth quarter earnings. Sales of high-end products
(polycarbonate, progressive and polarizing sun lenses) increased 2% in fourth
quarter 1999 from the prior year quarter and accounted for 54% of total fourth
quarter 1999 Optical Products revenues, compared to 52% in fourth quarter 1998.
Consistent with management expectations, revenue from glass lenses was flat and
revenue from plastic lenses declined quarter-over-quarter.
Several factors contributed to the unfavorable change in Optical Products
earnings during the quarter. These factors included lower sales during the
quarter, increased unit product costs primarily due to reduced production
volumes, additional inventory write-offs, absorption of abnormally high
year-to-date production cost from inventory sold, and product discontinuances
and phase-outs related to product line integration.
During the quarter, Vision-Ease stepped up its European expansion efforts by
establishing a processing laboratory in Germany intended to serve our growing
European retail customer base. In addition, the progressive lens, Outlook-TM-,
made positive inroads into the higher margin progressive lens market. Major
customer acceptance of Outlook-TM- translated into a 24% increase in sales from
third quarter 1999. Both of these growth initiatives are expected to have a
significant impact on sales and earnings in 2000 and beyond.
Fourth quarter revenues from the Precision Imaged Products group ("PIP", which
includes both the Mask Operations and Buckbee-Mears St. Paul "BMSP") increased
13% to $58.3 million in 1999, as compared to $51.5 million in 1998.
Sales of computer monitor masks increased 38% in fourth quarter 1999 as compared
to fourth quarter 1998. Incremental revenue from the Cortland monitor mask line
(restarted in first quarter 1999) and a continued migration to larger-sized
monitor masks contributed to this increase. Sales of jumbo entertainment masks
in fourth quarter 1999 increased 35% as compared to the prior year quarter. PIP
experienced a slight decrease in sales of other entertainment masks,
particularly sales of AK steel masks and lower revenues from its BMSP operation.
For the full year, PIP sales grew from $212.1 million in 1998 to $217.9 million
in 1999, a 3.0% increase. Operating earnings for the year increased
substantially from a loss of $40.8 million in 1998 to earnings of $23.9 million
in 1999. Improved product mix and strong performances by both mask manufacturing
facilities caused PIP's operating earnings to increase over the prior year
quarter.
-more-
During the fourth quarter, BMC favorably settled a claim against Barth
Industries for approximately $1 million. The benefit of this gain is included as
other income on the consolidated income statement. The Company's higher fourth
quarter tax rate is attributable to an increased percentage of earnings from the
Company's foreign operations, which are taxed at a higher rate than domestically
generated earnings.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that are intended to be covered by the safe harbors created
thereby. Statements made in this press release which are not strictly
historical, including statements regarding future performance, are
forward-looking statements and as such are subject to a number of risks and
uncertainties, including, among others, ability to implement the Optical
Products group's initiatives in strategic polycarbonate marketing and
manufacturing adjustments; ability to grow European sales through the operation
of processing laboratories; lower demand for televisions, computer monitors and
ophthalmic lenses; further mask and ophthalmic lens price declines and
imbalances of supply and demand; customer product qualifications; liability and
other claims asserted against the Company; continued slowdown at BMSP; ability
to partner with new BMSP customers or transition development relationships into
full scale production; new product development, introduction and acceptance,
including the roll out of the polycarbonate wafer lamination system; cost
reduction and reorganization efforts; continued higher manufacturing costs;
adjustments to inventory valuations; negative foreign currency fluctuations,
including adverse fluctuations affecting cross-currency swaps; ability to
recruit and retain key personnel; the impact of Y2K information systems issues;
the effect of the economic uncertainty in Asia; and a potential economic
slowdown in other parts of the world. Certain of these and other risks and
uncertainties are discussed in further detail in BMC's Annual Report and Form
10-K for the year ended December 31, 1998 and other documents filed with the
Securities and Exchange Commission.
BMC Industries, Inc. is a leading producer of polycarbonate, glass and plastic
eyewear lenses. BMC is also one of the world's largest manufacturers of aperture
masks for color picture tubes used in televisions and computer monitors. BMC's
common stock is traded on the New York Stock Exchange under the symbol BMC. For
more information about BMC Industries, Inc., visit the companies website:
www.bmcind.com.
-more-
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31 December 31
---------------------------------------------------------------------
1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
Revenues $ 87,549 $ 81,529 $ 353,854 $ 335,138
Cost of products sold 79,577 65,818 305,592 297,995
- -------------------------------------------------------------------------------------------------------------------------------
Gross Margin 7,972 15,711 48,262 37,143
Selling 4,498 3,748 18,650 15,496
Administrative 990 1,107 4,702 5,179
Impairment of long-lived assets - - - 42,800
Acquired research and development - - - 9,500
- -------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from Operations 2,484 10,856 24,910 (35,832)
- -------------------------------------------------------------------------------------------------------------------------------
Other Income and (Expense)
Interest expense (3,238) (3,887) (13,376) (13,537)
Interest income 122 64 277 163
Other income (expense) 1,466 1,454 1,036 522
- -------------------------------------------------------------------------------------------------------------------------------
Earnings (Loss) Before Income Taxes 834 8,487 12,847 (48,684)
Income Taxes 782 3,810 5,023 (18,049)
- -------------------------------------------------------------------------------------------------------------------------------
Net Earnings (Loss) $ 52 $ 4,677 $ 7,824 $ (30,635)
===============================================================================================================================
Net Earnings (Loss) Per Share:
Basic 0.00 0.17 0.29 (1.13)
Diluted $ 0.00 $ 0.17 $ 0.28 $ (1.13)
===============================================================================================================================
Number of Shares Included in Per Share Computation:
Basic 27,370 27,169 27,299 27,014
Diluted 27,668 27,405 27,710 27,014
===============================================================================================================================
-more-
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
- ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 31 DECEMBER 31
1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 1,146 $ 1,028
Trade accounts receivable, net 42,025 39,163
Inventories 82,312 82,853
Deferred income taxes 11,588 14,603
Other current assets 12,580 14,347
- ---------------------------------------------------------------------------------------------------------------------------
Total Current Assets 149,651 151,994
- ---------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment 278,807 276,630
Less accumulated depreciation 127,569 114,036
- ---------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 151,238 162,594
- ---------------------------------------------------------------------------------------------------------------------------
Deferred income taxes 9,221 5,431
Intangibles and other assets, net 73,443 79,446
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 383,553 $ 399,465
===========================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------------------------------------
Short-term borrowings $ 2,303 $ 1,929
Accounts payable 30,342 28,315
Income taxes payable 8,093 3,375
Accrued expenses and other current liabilities 19,197 23,404
- ---------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 59,935 57,023
- ---------------------------------------------------------------------------------------------------------------------------
Long-term debt 165,959 187,266
Other liabilities 18,522 18,372
Deferred income taxes 2,715 3,547
Stockholders' equity
Common stock 49,077 47,714
Retained earnings 92,620 86,436
Accumulated other comprehensive income (3,495) 1,113
Other (1,780) (2,006)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 136,422 133,257
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 383,553 $ 399,465
===========================================================================================================================
-more-
BMC INDUSTRIES, INC.
SEGMENT INFORMATION
(Unaudited)
(in thousands)
Three Months Ended December 31
---------------------------------------------------------------------------------------------------------
Precision Imaged Products Optical Products Consolidated
---------------------------------------------------------------------------------------------------------
1999 1998 1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues $ 58,337 $ 51,522 $ 29,212 $ 30,007 $ 87,549 $ 81,529
Cost of products sold 49,892 44,111 29,685 21,707 79,577 65,818
- ------------------------------------------------------------------------------------------------------------------------------------
Gross margin 8,445 7,411 (473) 8,300 7,972 15,711
Gross margin % 14.5% 14.4% (1.6)% 27.7% 9.1% 19.3%
Selling 1,176 829 3,322 2,919 4,498 3,748
Unallocated corporate
administration - - - - 990 1,107
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
operations $ 7,269 $ 6,582 $ (3,795) $ 5,381 $ 2,484 $ 10,856
====================================================================================================================================
Operating income % 12.5% 12.8% (13.0)% 17.9% 2.8% 13.3%
Capital spending $ 4,099 $ 3,225
Depreciation and
amortization $ 6,334 $ 5,249
EBITDA $ 10,284 $ 17,559*
EBITDA % 11.7% 21.5%
*Includes $2.5 million of non-operating items.
-30-