EXHIBIT 99.1
Contact: Jeffrey J. Hattara (NYSE-BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS THIRD QUARTER 1998 RESULTS
October 22, 1998 -- Minneapolis, Minnesota - BMC Industries, Inc. reported a net
loss of $2.0 million, or $.07 per diluted share, for the third quarter of 1998.
This compares to net earnings of $0.31 per diluted share in the third quarter of
1997. Total third quarter revenues increased 12% from $79.1 million in 1997 to
$88.6 million in 1998.
Paul B. Burke, BMC's Chairman and Chief Executive Officer, stated, "Our focus in
the third quarter was to continue the assimilation of the Orcolite acquisition,
reduce costs and inventory at Mask Operations and generate solid cash flow. We
successfully decreased our inventory balance by $11.0 million and reduced our
debt balance $9.6 million in the third quarter. We expect further inventory and
debt reductions in the fourth quarter as we continue our focus on cash flow and
balance sheet management."
BMC's Optical Products operation generated sales of $36.6 million in the third
quarter compared to $24.3 million in the prior year quarter, an increase of 51%.
On a proforma basis, revenues increased 9% over the combined Vision-Ease and
Orcolite 1997 third quarter revenues. Sales of high-end products
(polycarbonate, high-index, progressive and polarizing sun lenses) grew 114%
over the prior year quarter. On a proforma basis, high-end sales grew 23%.
High-end sales accounted for 60% of total Optical Products' revenue in the third
quarter compared to 42% in the year earlier period. Sales of glass and
commodity plastic lenses were somewhat slower than anticipated. Operating
earnings increased 13% over the prior year quarter, even as the Optical Products
division continued to invest heavily in the sales and marketing area, incurred
expenses related to the integration of Orcolite and recognized amortization
expense related to the Orcolite goodwill.
Vision-Ease continued work on key strategic development initiatives during the
third quarter. They will be launching a new polycarbonate progressive lens in
the fourth quarter to meet significant demand in the marketplace for
high-quality polycarbonate progressive lenses. The Company expects to see the
sales impact from these lenses later in the fourth quarter and into 1999. They
also continued development of their polycarbonate lens lamination system. The
system will be tested at various retail lens dispensing locations in the fourth
quarter. The Company expects full rollout of the system in 1999.
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Third quarter revenues from the Precision Imaged Products division (PIP,
including both the Mask Operations and Buckbee-Mears St. Paul) decreased 5% from
$54.8 million in 1997 to $52.0 million in 1998. Computer monitor mask sales
were up 19% over the prior year period, moving from $6.2 million last year to
$7.4 million in the current quarter. Total television mask unit sales increased
13%. Television mask revenues, however, decreased 9% due primarily to lower
invar mask sales and overall price declines. Sales of jumbo (30" and larger)
and large (25" to 29") masks made of AK steel were up 18% and 9%, respectively.
Sales of invar television masks were down 39% compared to the prior year
quarter. As stated in previous earnings releases, the Company expects the soft
market for invar television masks to continue through the end of the year.
The PIP division incurred an operating loss of $2.6 million in the third quarter
primarily due to the extended shutdown of three manufacturing lines at the
Cortland facility and continued pricing pressure in the mask business. The
Company estimates the extended shutdown of these lines negatively impacted
profits by approximately $4.0 million, however, this shutdown was instrumental
in allowing Mask Operations to reduce their inventory by approximately $10.0
million. One of the three manufacturing lines that was temporarily shutdown has
now resumed operation. Restarting the remaining two lines (one television and
one computer monitor) is contingent upon success in growing market share and
improved market conditions in the future.
Buckbee-Mears St. Paul (BMSP) is continuing on course for another record year in
1998 for both revenues and earnings. BMSP is working on numerous product
development initiatives with a variety of customers that could substantially
increase revenues and profits in future years.
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 integration of the Orcolite
acquisition, lower demand for televisions and computer monitors, further mask
price declines, inability to penetrate the lead frame market, foreign currency
fluctuations, successful customer part qualifications and the continued effect
of the economic slowdown in Asia. These and other risks and uncertainties are
detailed in the Company's Form 10-K for the year ended December 31, 1997 and
Form 10-Q to be filed for the quarter ended September 30, 1998.
BMC Industries, Inc. is a leading producer of polycarbonate, glass and plastic
eyewear lenses. The Company 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.
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
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1998 1997 1998 1997
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Revenues $ 88,584 $ 79,086 $ 253,609 $ 236,470
Cost of Products Sold 81,642 61,813 232,177 181,356
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Gross Margin 6,942 17,273 21,432 55,114
Selling 4,545 3,042 11,748 8,616
Administrative 1,213 1,006 4,072 3,634
Impairment of long-lived assets - - 42,800 -
Acquired research and development - - 11,000 -
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Income from Operations 1,184 13,225 (48,188) 42,864
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Other Income and (Expense)
Interest expense (3,949) (403) (9,650) (707)
Interest income 22 45 99 143
Other income (expense) (399) 71 (932) 300
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Earnings before Income Taxes (3,142) 12,938 (58,671) 42,600
Income Taxes (1,173) 4,063 (22,429) 13,853
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Net Earnings $ (1,969) $ 8,875 $ (36,242) $ 28,747
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Net Earnings Per Share:
Basic $ (0.07) $ 0.32 $ (1.34) $ 1.04
Diluted (0.07) 0.31 (1.34) 1.01
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Number of Shares Included in Per Share Computation:
Basic 26,989 27,681 26,963 27,518
Diluted 26,989 28,619 26,963 28,524
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
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September 30 June 30 December 31
1998 1998 1997
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Assets
Cash and cash equivalents $ 2,742 $ 2,969 $ 2,383
Trade accounts receivable, net 42,496 45,077 29,824
Inventories 84,856 95,881 70,111
Deferred income taxes 11,315 8,724 5,881
Other current assets 8,815 9,775 13,595
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Total Current Assets 150,224 162,426 121,794
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Property, plant and equipment 280,028 271,775 283,070
Less accumulated depreciation 114,292 110,381 100,688
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Property, plant and equipment, net 165,736 161,394 182,382
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Deferred income taxes 17,085 19,099 1,429
Other assets, net 76,765 77,114 13,802
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TOTAL ASSETS $ 409,810 $ 420,033 $ 319,407
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Liabilities and Stockholders' Equity
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Short-term borrowings $ 822 $ 979 $ 1,139
Accounts payable 25,566 24,458 25,623
Income taxes payable 226 415 2,830
Accrued expenses and other current liabilities 24,332 25,955 17,288
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Total Current Liabilities 50,946 51,807 46,880
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Long-term debt 209,713 219,164 73,426
Other liabilities 18,559 17,570 17,718
Deferred income taxes 2,738 3,757 2,631
Stockholders' equity
Common stock 47,662 46,543 62,263
Retained earnings 81,237 83,613 118,693
Cumulative translation adjustment 1,047 (1,350) (1,217)
Other (2,092) (1,071) (987)
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TOTAL STOCKHOLDERS' EQUITY 127,854 127,735 178,752
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 409,810 $ 420,033 $ 319,407
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