EXHIBIT 99.1
CONTACT: Jeffrey J. Hattara (NYSE - BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS SECOND QUARTER 1999 EARNINGS
July 20, 1999 - Minneapolis, MN - BMC Industries, Inc. reported net earnings
of $5.0 million, or $0.18 per diluted share, for the quarter ended June 30,
1999. This compares to a net loss of $37.2 million, or $1.38 per diluted
share (net earnings of $2.6 million, or $0.09 per diluted share, excluding
one-time and special charges), in the second quarter of 1998. Total second
quarter revenues increased 10% from $84.9 million in 1998 to $93.3 million in
1999.
Paul B. Burke, BMC's Chairman and Chief Executive Officer stated "We are
pleased with the overall performance of the Company in the second quarter.
This quarter's results reflect strong incremental growth in sales of computer
monitor masks attributable to the Cortland monitor mask line that was
restarted earlier in the year, as well as the ongoing benefits from the
integration of the Orcolite acquisition into Vision-Ease. During the second
quarter, we increased revenues by 10% and improved operating income by 52%
over the prior year quarter. We also continued progress on cash generation
for debt reduction and strategic investments. We believe that our improving
operating performance and strengthening balance sheet will drive further
growth in both revenue and earnings."
BMC's Optical Products group generated sales of $37.5 million in the second
quarter of 1999, up 18%, or $5.8 million, over the prior year quarter due
predominantly to growth in sales of high-end products (polycarbonate,
progressive and polarizing sun lenses) and largely driven by the acquisition
of Orcolite in May 1998. Sales of high-end products increased 38% in second
quarter 1999 over second quarter 1998 and accounted for 57% of total Optical
Products group revenues in second quarter 1999 compared to 48% in second
quarter 1998. Second quarter 1999 Optical Products group revenues were up 2%
compared to the pro forma combined Vision-Ease/Orcolite 1998 revenues for the
same period due to a decline in glass and plastic lens sales resulting from
the continued shift in the ophthalmic lens market towards polycarbonate and a
soft domestic retail segment affected by consolidation. However, sales of
high-end products in second quarter 1999 increased 11% over the pro forma
combined Vision-Ease/Orcolite revenues for the same period in 1998. Driven by
this high-end product sales growth, the Optical Products group's ongoing
operating earnings increased 8% during the second quarter of 1999 over the
prior year quarter. Vision-Ease achieved this improvement in earnings despite
the impact of additional amortization expense and substantially increased
sales and marketing expenses in the quarter, including considerable
incremental promotional expenditures on the new
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proprietary Outlook-TM- progressive lens, as well as additional sales support
for our proprietary polarized product line to prepare for the peak sun lens
season. Vision-Ease is beginning to see the benefit of these investments
through new product growth, including a greater than 50% increase in sales of
sun lens products during second quarter 1999 over the same period in 1998,
and the addition of the Outlook(TM) lens to the product offering of several
major retailers.
Testing continued during the quarter at several retail locations for
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. Vision-Ease remains on
schedule for the roll out of this system in the second half of this year. The
Company has received strong interest in this system from both domestic and
international customers.
Second quarter revenues from the Precision Imaged Products group ("PIP",
which includes both the Mask Operations and Buckbee-Mears St. Paul) increased
5% from $53.3 million in second quarter 1998 to $55.9 million in second
quarter 1999. This revenue increase was driven by increased sales of computer
monitor masks and jumbo invar entertainment masks, offset by lower sales of
standard AK steel and other-than-jumbo invar entertainment masks and by lower
sales at BMSP. Sales of computer monitor masks in the second quarter of 1999
nearly doubled, increasing 97% compared to second quarter 1998, due to both
incremental revenue from the Cortland monitor mask line that was restarted in
the first quarter of 1999 and increased sales of larger-sized monitor masks.
Sales of standard AK steel and other-than-jumbo invar entertainment masks in
second quarter 1999 declined 19%, collectively, compared to the prior year
quarter. These declines were partially offset by a 53% increase in sales of
jumbo invar entertainment masks. In addition, performance of the Cortland
monitor mask line showed progressive improvement over the course of the
quarter.
BMSP's second quarter 1999 revenues and operating income were down compared
to second quarter 1998, but showed improvement over first quarter 1999, as
the previously announced disruption in the ordering patterns of certain major
customers improved. During the second quarter, BMSP continued to devote
substantial efforts and resources to increasing new business, diversifying
its customer base and reducing costs.
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, including the roll out of the lens
lamination system; 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
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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 Six Months Ended
June 30 June 30
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1999 1998 1999 1998
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Revenues $ 93,339 $ 84,941 $ 177,984 $ 165,025
Cost of products sold 75,866 82,080 146,944 150,535
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Gross Margin 17,473 2,861 31,040 14,490
Selling 4,999 3,914 9,364 7,203
Administrative 1,486 1,529 2,719 2,859
Impairment of long-lived assets - 42,800 - 42,800
Acquired research and development - 9,500 - 9,500
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Income from Operations 10,988 (54,882) 18,957 (47,872)
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Other Income and (Expense)
Interest expense (3,410) (4,318) (6,873) (5,701)
Interest income 81 45 86 77
Other income (expense) 69 (389) 459 (533)
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Earnings Before Income Taxes 7,728 (59,544) 12,629 (54,029)
Income Taxes 2,721 (22,392) 4,431 (20,686)
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Net Earnings $ 5,007 $ (37,152) $ 8,198 $ (33,343)
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Net Earnings Per Share:
Basic $ 0.18 $ (1.38) $ 0.30 $ (1.24)
Diluted 0.18 (1.38) 0.30 (1.24)
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Number of Shares Included in Per Share Computation:
Basic 27,275 26,905 27,238 26,949
Diluted 27,769 26,905 27,587 26,949
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BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
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JUNE 30 December 31
1999 1998
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ASSETS
Cash and cash equivalents $ 947 $ 1,028
Trade accounts receivable, net 52,871 39,163
Inventories 86,137 82,853
Deferred income taxes 14,644 14,603
Other current assets 12,214 14,347
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Total Current Assets 166,813 151,994
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Property, plant and equipment 273,173 276,630
Less accumulated depreciation 118,830 114,036
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Property, plant and equipment, net 154,343 162,594
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Deferred income taxes 3,775 5,431
Intangibles and other assets, net 79,794 79,446
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TOTAL ASSETS $ 404,725 $ 399,465
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Short-term borrowings $ 1,362 $ 1,929
Accounts payable 37,002 28,315
Income taxes payable 2,078 3,375
Accrued expenses and other current liabilities 27,050 23,404
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Total Current Liabilities 67,492 57,023
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Long-term debt 173,603 187,266
Other liabilities 17,965 18,372
Deferred income taxes 7,873 3,547
Stockholders' equity
Common stock 48,667 47,714
Retained earnings 93,816 86,436
Accumulated other comprehensive income (2,886) 1,113
Other (1,805) (2,006)
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TOTAL STOCKHOLDERS' EQUITY 137,792 133,257
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 404,725 $ 399,465
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BMC INDUSTRIES, INC.
SEGMENT INFORMATION
(Unaudited)
(in thousands)
Three Months Ended June 30
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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 $ 55,851 $ 53,296 $ 37,488 $ 31,645 $ 93,339 $ 84,941
Cost of products sold 47,250 58,255 28,616 23,825 75,866 82,080
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Gross margin 8,601 (4,959) 8,872 7,820 17,473 2,861
Gross margin % 15.4% (9.3)% 23.7% 24.7% 18.7% 3.4%
Selling 1,591 1,133 3,408 2,781 4,999 3,914
Impairment of long-lived
assets - 42,800 - - - 42,800
Acquired research and
development - - - 9,500 - 9,500
Unallocated corporate
administration - - 1,486 1,529
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Income from operations $ 7,010 $ (48,892) $ 5,464 $ (4,461) $ 10,988 $ (54,882)
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Operating income % 12.6% (91.7)% 14.6% (14.1)% 11.8% (64.6)%
Capital spending $ 2,747 $ 7,574
Depreciation and
amortization $ 5,730 $ 5,365
EBITDA $ 16,787 $ (49,906)
EBITDA % 18.0% (58.8)%
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