EXHIBIT 99.1
Contact: Jeffrey J. Hattara (NYSE-BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS FIRST QUARTER 1999 EARNINGS
April 27, 1999 -- Minneapolis, Minnesota - BMC Industries, Inc. reported net
income of $3.2 million, or $.12 per diluted share, for the quarter ended March
31, 1999. This compares to net earnings of $3.8 million, or $0.14 per diluted
share, in the first quarter of 1998. Total first quarter revenues increased 6%
from $80.1 million in 1998 to $84.6 million in 1999.
Paul B. Burke, BMC's Chairman and Chief Executive Officer, stated, "We are
pleased with BMC's first quarter results which were achieved despite the impact
of additional costs associated with restarting our monitor mask line in
Cortland, New York. During the first quarter, we increased revenues by 6% and
improved income from operations by 14% over the prior year quarter. We believe
this quarter's performance reflects the benefits from the integration of the
Orcolite acquisition and the solid progress we have made in returning the mask
business to profitability. We are also pleased with further progress on our cash
generation and debt reduction efforts while continuing our investments in
ongoing strategic initiatives. With the Cortland monitor mask line back in
production, new initiatives beginning to show progress and debt levels
continuing to drop, we anticipate both further revenue and earnings growth over
the balance of 1999 and into 2000."
BMC's Optical Products group generated sales of $34.6 million in the first
quarter of 1999, up 40%, or $9.8 million, over the prior year quarter due mainly
to growth in sales of high-end products (polycarbonate, progressive and
polarizing sun lenses) resulting from the acquisition of Orcolite in May 1998.
Sales of high-end products increased 98% in first quarter 1999 over first
quarter 1998 and accounted for 54% of total Optical Products group revenue in
first quarter 1999 compared to 38% in first quarter 1998. First quarter 1999
Optical Products group revenues were up 2.4% compared to the pro forma combined
Vision-Ease/Orcolite 1998 revenues for the same period. This growth in revenue
was dampened by year-on-year declines in glass and plastic lens sales as growth
in the ophthalmic lens market continues to shift towards polycarbonate. In the
first quarter of 1999, Optical Products group sales of high-end products
(including polycarbonate) increased 9% over the pro forma combined
Vision-Ease/Orcolite 1998 revenues for the same period. Driven by high-end
product sales growth, the Optical Products group's operating earnings increased
34% during the first quarter of 1999 over the prior year quarter. Vision-Ease
achieved this improvement in earnings despite the impact of additional
amortization expense related to the Orcolite acquisition and increased sales and
marketing expenses of approximately $1 million over the prior year quarter.
Vision-Ease devoted considerable resources (including the sales and marketing
investment noted above) to the expansion of market acceptance of its key
high-end products, including the new Outlook(TM) progressive lens. The
Outlook(TM) lens has been specificalLy designed for the polycarbonate material
and to accommodate a broad range of frame types, including today's popular small
frame sizes. Vision-Ease engaged in qualifying and testing procedures with a
number of large potential retail users of this product and is encouraged by the
wide acceptance of this lens and the prospects for future sales. In addition,
considerable promotional expenditures were made in support of sales of the
SunRx(R) polarized prescription polycarbonate lens in advance of the peak sun
lens season. Finally, considerable effort and expense was devoted to the
further testing and enhancement of Vision-Ease's proprietary lens lamination
system which makes it possible for dispensers to provide premium anti-reflective
coated multi-focal polycarbonate lenses to consumers on a same-day basis. Based
upon test results to date, Vision-Ease is on schedule for the roll-out of this
system in the second half of the year. Taken as a whole, Vision-Ease's branded
proprietary, high-end products are expected to be the engine for Vision-Ease
sales growth in the second quarter and beyond.
First quarter revenues from the Precision Imaged Products group ("PIP", which
includes both the Mask Operations and Buckbee-Mears St. Paul) decreased 10% from
$55.3 million in first quarter 1998 to $50.0 million in first quarter 1999,
primarily due to the previously anticipated temporary slowdown at BMSP and a
decline in sales of AK steel entertainment masks attributable to both volume and
price reductions. Despite these recent declines, sales of AK steel entertainment
masks continue to account for more than 50% of total mask revenues.
Increased sales of invar entertainment masks and monitor masks largely offset
the decline in sales of AK steel entertainment masks. Sales of invar
entertainment masks in first quarter 1999 increased 20% over first quarter 1998
and sales of monitor masks increased 29% over the comparable quarter last year.
Because only a limited amount of monitor masks sold in first quarter 1999 were
produced at our Cortland facility, we expect significant incremental sales of
monitor masks as the restarted Cortland monitor mask line reaches full
production. The monitor mask line in Cortland was restarted near the end of
January 1999 in response to increased demand for monitor masks from a broadened
customer base. The line start-up had a significant negative impact on first
quarter results. However, the line experienced substantial yield improvement by
the end of the quarter and BMC is optimistic regarding the line's future
earnings potential.
As previously anticipated, BMSP experienced a reduction in sales and
profitability in the first quarter of 1999 compared to prior year first quarter
results due to what we believe are temporary disruptions in the ordering
patterns of certain major customers. BMSP currently expects these economic
conditions to improve as 1999 progresses. Moreover, multiple new product sales
initiatives are underway and some are now beginning to reach realization. The
slow start, however, is expected to also slightly impact the second quarter of
1999 compared to second quarter 1998, with stronger performance expected during
the second half of 1999.
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 which 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, lower demand for televisions and
computer monitors; further mask price declines and imbalances of supply and
demand; successful customer part qualifications; liability and other claims
asserted against BMC; continued slowdown at BMSP; successful new product
development, introduction and acceptance; successful cost reduction and
reorganization efforts; higher operating expenses and lower yields associated
with any additional production shutdowns or start-ups; negative foreign currency
fluctuations, including adverse fluctuations affecting cross-currency swaps;
inability to partner with new BMSP customers; 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 such as South America. These and
other risks and uncertainties are detailed in BMC's Annual Report and Form 10-K
for the year ended December 31, 1998.
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.
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended
March 31
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1999 1998
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Revenues $ 84,645 $ 80,084
Cost of Products Sold 71,078 68,455
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Gross Margin 13,567 11,629
Selling 4,365 3,289
Administrative 1,233 1,330
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Income from Operations 7,969 7,010
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Other Income and (Expense)
Interest expense (3,463) (1,383)
Interest income 5 32
Other income (expense) 390 (144)
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Earnings before Income Taxes 4,901 5,515
Income Taxes 1,710 1,706
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Net Earnings $ 3,191 $ 3,809
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Net Earnings Per Share:
Basic $ 0.12 $ 0.14
Diluted 0.12 0.14
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Number of Shares Included in Per Share Computation:
Basic 27,201 26,994
Diluted 27,405 27,644
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
MARCH 31 December 31
1999 1998
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Assets
Cash and cash equivalents $ 1,976 $ 1,028
Trade accounts receivable, net 43,015 39,163
Inventories 83,684 82,853
Deferred income taxes 14,617 14,603
Other current assets 15,203 14,347
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Total Current Assets 158,495 151,994
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Property, plant and equipment 273,491 276,630
Less accumulated depreciation 115,511 114,036
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Property, plant and equipment, net 157,980 162,594
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Deferred income taxes 4,712 5,431
Intangibles and other assets, net 79,832 79,446
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TOTAL ASSETS $ 401,019 $ 399,465
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Liabilities and Stockholders' Equity
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Short-term borrowings $ 1,861 $ 1,929
Accounts payable 31,521 28,315
Income taxes payable 4,541 3,375
Accrued expenses and other current liabilities 27,115 23,404
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Total Current Liabilities 65,038 57,023
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Long-term debt 179,816 187,266
Other liabilities 17,892 18,372
Deferred income taxes 4,604 3,547
Stockholders' equity
Common stock 47,756 47,714
Retained earnings 89,219 86,436
Accumulated other comprehensive income (1,317) 1,113
Other (1,989) (2,006 )
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TOTAL STOCKHOLDERS' EQUITY 133,669 133,257
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 401,019 $ 399,465
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BMC INDUSTRIES, INC.
SEGMENT INFORMATION
(Unaudited)
(in thousands)
Three Months Ended March 31
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Precision Imaged Products Optical Products Consolidated
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1999 1998 1999 1998 1999 1998
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Revenues $ 49,999 $ 55,272 $ 34,646 $ 24,812 $ 84,645 $ 80,084
Cost of Products Sold 45,089 50,065 25,989 18,390 71,078 68,455
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Gross Margin 4,910 5,207 8,657 6,422 13,567 11,629
Gross Margin % 9.8% 9.4% 25.0% 25.9% 16.0% 14.5%
Selling 1,357 1,133 3,008 2,156 4,365 3,289
Unallocated Corporate
Administration - - - - 1,233 1,330
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Income from Operations $ 3,553 $ 4,074 $ 5,649 $ 4,266 $ 7,969 $ 7,010
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Operating Income % 7.1% 7.4% 16.3% 17.2% 9.4% 8.8%
Capital Spending $ 2,504 $ 3,958
Depreciation and
Amortization $ 5,647 $ 5,002
EBITDA $ 14,006 $ 11,868
EBITDA % 16.5% 14.8%
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