CONTACT: Ray B. Rogers (NYSE -- BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS RECORD 1997 EARNINGS;
BOARD AUTHORIZES ADDITIONAL REPURCHASE OF
1,000,000 SHARES BEYOND 1,000,000 ALREADY REPURCHASED
January 26, 1998 -- Minneapolis, MN -- BMC Industries, Inc. today reported
record total year 1997 net earnings of $35,721,000 or $1.25 diluted earnings per
share, an increase from $35,101,000 or $1.24 diluted earnings per share in 1996.
Total year revenues increased 11% from $280,487,000 in 1996 to $312,538,000 in
1997.
BMC reported fourth quarter 1997 net earnings of $6,974,000 or $0.24 diluted
earnings per share, compared to earnings of $11,919,000 or $0.42 diluted
earnings per share in the year-earlier period. Fourth quarter revenues
increased slightly from $75,854,000 in the fourth quarter of 1996 to $76,068,000
in the fourth quarter of 1997.
Paul B. Burke, BMC's chairman and chief executive officer, stated "I am very
pleased to report BMC's fifth straight year of record total year results. BMC
achieved these results while undertaking its most aggressive expansion in the
history of the Company, with each of the Company's operations making significant
investments for long-term growth. We made significant progress on all three new
mask production lines during 1997. As we have consistently stated, 1997 was a
transitional year and we expect our investments to result in significant
improvement in our earnings performance in 1998 and beyond."
Mr. Burke also stated, "We expect to feel the continued effect of start-up and
expansion-related issues and expenses into the second quarter of 1998. First
quarter earnings are expected to be below the prior-year period and second
quarter earnings are anticipated to be flat as compared to the prior-year
quarter. However, we expect third and fourth quarter earnings to be
significantly higher, with total-year earnings at least 15% higher than total-
year 1997."
Fourth quarter sales for the Company's Precision Imaged Products operation
(including both the Mask Operations and Buckbee-Mears St. Paul) were flat
compared to the fourth quarter of 1996. As previously announced, the
profitability of the Mask Operations
decreased from the year earlier quarter due to a number of independent factors,
including lower jumbo (30" and larger), large (25" to 29") and Invar TV mask
sales and expansion related expenses. For the total year, sales of Invar TV
masks were flat compared to total year 1996 sales, while large mask sales
increased 16% over total year 1996 sales. Jumbo mask sales were lower than
total year 1996 sales, which is a difficult comparison following a 49% increase
over 1995. The strength of the U.S. dollar versus the German mark had less
than a $400,000 impact on earnings but reduced sales, as compared with the
prior year quarter, by approximately $2.7 million. For the total year, sales
were reduced almost $11 million due to the strengthening of the U.S. dollar
versus the German mark. Buckbee-Mears St. Paul posted record fourth quarter
and total year 1997 earnings as a result of product mix and manufacturing
improvements. BMSP also generated its first sales of lead frames for
semiconductor packages in the fourth quarter.
Fourth quarter Precision Imaged Products sales included approximately $9 million
of high resolution computer monitor mask sales compared to approximately $4
million in the year-earlier period. Total year 1997 high resolution computer
monitor mask sales exceeded $20 million. The computer monitor mask line in
Germany produced almost all of the monitor mask sales in the fourth quarter and
for the total year. Part qualification on the new monitor mask line at the
Cortland, New York facility is continuing in the first quarter. The Company
expects the Cortland line to add a small amount of sales in the first quarter
with sales approaching normal production levels beginning in the second quarter
of 1998.
BMC's Optical Products operation also produced record fourth quarter sales.
Fourth quarter sales increased approximately 7% over the prior year quarter,
while profits lagged fourth quarter 1996 earnings due to a number of factors,
including new lens product development, new polycarbonate product promotions and
duplicate facility costs associated with polycarbonate manufacturing. The new
polycarbonate manufacturing, centralized distribution and research and
development facility was completed in the third quarter of 1997, but a full
transfer of operations will not be completed until the second quarter of 1998 to
ensure minimal disruption of polycarbonate manufacturing. Sales growth was
driven by a 34% increase in high-end products (polycarbonate, progressive, high
index and polarizing sun lenses) over the prior year quarter. Revenues from
high-end products increased 26% for total year 1997 over the prior year.
BMC also announced the repurchase of 1,000,000 shares of its common stock as
authorized by the Board of Directors on April 7, 1997. The Company purchased
the shares in the open market between January 6, 1998 and January 13, 1998 at an
average price of approximately $16.59 per share. On January 23, 1998, the Board
of Directors authorized the Company to repurchase up to an additional 1,000,000
shares of the Company's outstanding common stock. These shares will be
purchased in open market or negotiated transactions, with the timing and terms
of the purchases to be determined by BMC management based on market conditions.
Statements made in this press release which are not historical, including
statements regarding future performance, are forward looking statements and as
such are subject to a number of risks, including a reduction in demand for
televisions and computer monitors, inability to penetrate the lead frame
market, problems associated with shut-down of the old
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polycarbonate facility and the transfer of operations to the new facility,
higher levels of operating expenses and lower production yields associated with
production start-up, foreign currency fluctuations, the effect of economic
instability in Asia and changes in the prices of raw materials. These and other
risks and uncertainties are detailed in the Company's Form 10-K for the year
ended December 31, 1996.
BMC is one of the world's largest manufacturers of aperture masks for color
television picture tubes and computer monitors. The Company is also a leading
producer of polycarbonate, glass and plastic eyewear lenses. The common stock
of the Company is traded on the New York Stock Exchange under the symbol "BMC".
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31 December 31
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1997 1996 1997 1996
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Revenues $76,068 $75,854 $312,538 $280,487
Cost of products sold 63,112 54,215 244,468 213,007
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Gross margin 12,956 21,639 68,070 67,480
Selling 3,080 2,577 11,696 10,028
Administrative 682 1,280 4,316 5,005
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Income from Operations 9,194 17,782 52,058 52,447
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Other Income and (Expense)
Interest expense (591) (104) (1,298) (540)
Interest income 90 50 233 260
Other income (expense) (91) 116 209 236
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Earnings before Income Taxes 8,602 17,844 51,202 52,403
Income Taxes 1,628 5,925 15,481 17,302
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Net Earnings $ 6,974 $11,919 $ 35,721 $ 35,101
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Net Earnings Per Share:
Basic $ 0.25 $ 0.44 $ 1.30 $ 1.29
Diluted 0.24 0.42 1.25 1.24
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Number of Shares Included in Per Share Computations:
Basic 27,776 27,331 27,583 27,268
Diluted 28,545 28,416 28,530 28,363
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except per share amounts)
DECEMBER 31 December 31
ASSETS 1997 1996
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Current Assets
Cash and cash equivalents $ 2,383 $ 2,544
Trade accounts receivable, net of allowances 29,824 24,979
Inventories 70,111 50,451
Deferred income taxes 5,881 5,372
Other current assets 13,595 8,354
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Total Current Assets 121,794 91,700
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Property, Plant and Equipment 283,070 220,489
Less Accumulated Depreciation 100,688 96,644
-------- --------
Property, Plant and Equipment, Net 182,382 123,845
-------- --------
Deferred Income Taxes 1,429 5,797
Other Assets, Net 13,802 11,627
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Total Assets $319,407 $232,969
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities
Short-term borrowings $ 1,139 $ 1,355
Accounts payable 25,623 19,434
Income taxes payable 2,830 7,657
Accrued expenses and other current liabilities 17,288 21,900
Total Current Liabilities 46,880 50,346
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Long-Term Debt 73,426 16,634
Other Liabilities 17,718 19,421
Deferred Income Taxes 2,631 2,460
Stockholders' Equity
Common stock 62,263 56,551
Retained earnings 118,693 84,629
Cumulative translation adjustment (1,217) 3,974
Other (987) (1,046)
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Total Stockholders' Equity 178,752 144,108
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Total Liabilities and Stockholders' Equity $319,407 $232,969
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