<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 2, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-7006
BRUSH WELLMAN INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C>
OHIO 34-0119320
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>
<TABLE>
<S> <C>
17876 ST. CLAIR AVENUE, CLEVELAND, 44110
OHIO
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
</TABLE>
216-486-4200
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of May 7, 1999 there were 16,322,086 shares of Common Stock, par value
$1 per share, outstanding.
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<PAGE> 2
PART I FINANCIAL INFORMATION
BRUSH WELLMAN INC. AND SUBSIDIARIES
ITEM 1. FINANCIAL STATEMENTS
The consolidated financial statements of Brush Wellman Inc. and its
subsidiaries for the quarter ended April 2, 1999 are as follows:
Consolidated Statements of Income -- Three months ended April 2, 1999
and April 3, 1998
Consolidated Balance Sheets -- April 2, 1999 and December 31, 1998
Consolidated Statements of Cash Flows -- Three months ended April 2,
1999 and April 3, 1998
1
<PAGE> 3
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
-------------------------
APRIL 2, APRIL 3,
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS) 1999 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net sales................................................... $ 113,168 $ 114,182
Cost of sales............................................. 89,069 86,153
----------- -----------
Gross Margin................................................ 24,099 28,029
Selling, administrative and general expenses.............. 17,501 16,334
Research and development expenses......................... 1,819 2,205
Other-net................................................. 448 696
----------- -----------
Operating Profit............................................ 4,331 8,794
Interest expense.......................................... 937 236
----------- -----------
Income before income taxes.................................. 3,394 8,558
Income taxes.............................................. 908 2,396
----------- -----------
Net Income.................................................. $ 2,486 $ 6,162
=========== ===========
Per Share of Common Stock: Basic............................ $ 0.15 $ 0.38
Weighted average number of common shares outstanding........ 16,193,359 16,317,518
Per Share of Common Stock: Diluted.......................... $ 0.15 $ 0.37
Weighted average number of common shares outstanding........ 16,232,112 16,715,622
Cash dividends per common share............................. $ 0.12 $ 0.12
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 4
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
APR. 2, DEC. 31,
(DOLLARS IN THOUSANDS) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents................................. $ 99 $ 1,938
Accounts receivable....................................... 77,598 62,181
Inventories............................................... 104,539 103,108
Prepaid expenses.......................................... 7,979 7,210
Deferred income taxes..................................... 20,600 20,087
-------- --------
Total Current Assets.............................. 210,815 194,524
Other Assets................................................ 42,994 44,697
Property, Plant and Equipment............................... 407,467 421,467
Less allowances for depreciation, depletion and
impairment............................................. 247,869 256,998
-------- --------
159,598 164,469
-------- --------
$413,407 $403,690
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt........................................... $ 30,694 $ 45,587
Accounts payable.......................................... 21,758 15,156
Other liabilities and accrued items....................... 31,243 26,482
Dividends payable......................................... 1,959 1,966
Income taxes.............................................. 7,013 4,341
-------- --------
Total Current Liabilities......................... 92,667 93,532
Other Long-Term Liabilities................................. 9,933 10,507
Retirement and Post-Employment Benefits..................... 39,468 39,448
Long-Term Debt.............................................. 42,105 32,105
Deferred Income Taxes....................................... 7,334 6,287
Shareholders' Equity........................................ 221,900 221,811
-------- --------
$413,407 $403,690
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------
APRIL 2, APRIL 3,
(DOLLARS IN THOUSANDS) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
NET INCOME.................................................. $ 2,486 $ 6,162
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED
FROM OPERATING ACTIVITIES:
Depreciation, depletion and amortization.................. 5,648 5,598
Amortization of mine development.......................... 1,715 541
Decrease (Increase) in accounts receivable................ (16,225) (8,234)
Decrease (Increase) in inventory.......................... (2,287) (157)
Decrease (Increase) in prepaid and other current assets... (1,450) 396
Increase (Decrease) in accounts payable and accrued
expenses............................................... 10,872 (5,424)
Increase (Decrease) in interest and taxes payable......... 3,261 2,855
Increase (Decrease) in deferred income tax................ 1,047 48
Increase (Decrease) in other long-term liabilities........ (439) (822)
Other -- net.............................................. 1,405 381
-------- --------
NET CASH PROVIDED FROM OPERATING ACTIVITIES............ 6,033 1,344
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property, plant and equipment.... (2,074) (11,627)
Payments for mine development............................. (69) (198)
Proceeds from (Payments for) other investments............ (118) 128
-------- --------
NET CASH USED IN INVESTING ACTIVITIES.................. (2,261) (11,697)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of short-term debt................. 590 6,240
Repayment of short-term debt.............................. (14,186) --
Proceeds from issuance of long-term debt.................. 12,000 --
Repayment of long-term debt............................... (2,000) --
Issuance of Common Stock under stock option plans......... 76 2,721
Purchase of Common Stock for treasury..................... -- (816)
Payments of dividends..................................... (1,966) (3,930)
-------- --------
NET CASH PROVIDED FROM (USED IN) FINANCING
ACTIVITIES............................................ (5,486) 4,215
Effects of Exchange Rate Changes............................ (125) (43)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS................ (1,839) (6,181)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD....... 1,938 7,170
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................ $ 99 $ 989
======== ========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A -- ACCOUNTING POLICIES
In management's opinion, the accompanying consolidated financial statements
contain all adjustments necessary to present fairly the financial position as of
April 2, 1999 and December 31, 1998 and the results of operations for the three
months ended April 2, 1999 and April 3, 1998.
NOTE B -- INVENTORIES
<TABLE>
<CAPTION>
APRIL 2, DEC. 31,
(DOLLARS IN THOUSANDS) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Principally average cost:
Raw materials and supplies................................ $ 22,081 $ 18,708
In process................................................ 64,750 60,919
Finished.................................................. 37,134 42,021
-------- --------
123,965 121,648
Excess of average cost over LIFO inventory value............ 19,426 18,540
-------- --------
$104,539 $103,108
======== ========
</TABLE>
NOTE C -- COMPREHENSIVE INCOME
During the first quarter 1999 and 1998, comprehensive income amounted to
$1,884,500 and $5,762,069. The difference between net income and comprehensive
income is the cumulative translation adjustment for the periods presented.
NOTE D -- SEGMENT REPORTING
Selected financial data by business segment as prescribed by SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information", for the
first quarter 1999 and first quarter 1998 are as follows:
<TABLE>
<CAPTION>
METAL MICRO- ALL
SYSTEMS ELECTRONICS OTHER TOTAL
(Dollars in thousands) ------- ----------- ------ --------
<S> <C> <C> <C> <C>
FIRST QUARTER 1999
Revenues from external customers................... $78,623 $32,655 $1,890 $113,168
Intersegment revenues.............................. 139 412 -- 551
Segment profit (loss) before interest and taxes.... 7,081 1,750 (4,500) 4,331
FIRST QUARTER 1998
Revenues from external customers................... 85,072 27,450 1,660 114,182
Intersegment revenues.............................. 52 391 -- 443
Segment profit (loss) before interest and taxes.... 13,614 (390) (4,430) 8,794
</TABLE>
5
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
FORWARD-LOOKING INFORMATION
Portions of the narrative set forth in this document that are not
historical in nature are forward-looking statements. The Company's actual future
performance may differ from that contemplated by the forward-looking statements
as a result of a variety of factors. These factors include, in addition to those
mentioned elsewhere herein, the condition of the markets which the Company
serves (especially as impacted by events in particular markets, including
telecommunications, automotive and electronics, or in particular geographic
regions, such as Asia), the success of the Company's strategic plans, the timely
and successful completion of pending capital expansions and Year 2000
remediation projects, tax rates, exchange rates and the conclusion of pending
litigation matters in accordance with the Company's expectation that there will
be no materially adverse effects.
RESULTS OF OPERATIONS
Sales in the first quarter 1999 were $113.2 million compared to a record
high of $114.2 million in the first quarter 1998. Net income of $2.5 million was
down 60% from last year, however, as a result of mix shifts and higher overhead
expenses.
The Metal Systems Group manufactures and sells alloy strip and bulk
products, engineered material systems and beryllium products. Major markets
served by this group include telecommunications, computer, automotive,
aerospace, defense, oil and gas, plastic molds and appliance. In general, these
products provide superior performance and are premium priced. Sales by the Metal
Systems Group totaled $78.6 million in the first quarter 1999 compared to $85.1
million in the first quarter 1998. Softness in the oil and gas and aerospace
markets contributed to this decline as did the economic conditions in Japan, as
the business slowdown there did not effect Metal System's sales until the second
quarter 1998.
Sales of alloy strip products, primarily copper beryllium, remain capacity
constrained. Progress continued toward completion of the $117 million Alloy
Expansion Program at the Elmore, Ohio facility. The project was designed to
increase capacity and enhance production effectiveness. The new cast shop is
running in tandem with the old cast shop to provide adequate casting capacity
for alloy products. The new strip mill is scheduled to come on line in the
second half of the year and is designed to provide the additional rolling and
finishing capacity needed to satisfy the current demand for strip products. The
strip mill equipment currently is undergoing the final phase of implementation,
testing and qualification. Discreet pieces of the new equipment currently are
being used for production purposes on a limited scale. Additional costs in the
form of higher manning and outside services and lower yields associated with the
start-up of the new Elmore strip mill thus far in 1999 are essentially equal to
the start-up costs incurred by the new cast shop in the first quarter 1998.
Engineered material system sales were unchanged on a quarter to quarter
comparison. The majority of these sales are clad metal and plated products.
Sales of beryllium products were lower in the first quarter 1999 than the first
quarter 1998.
The Microelectronic Group manufactures and sells precious and non-precious
metal physical vapor deposition (PVD) targets, beryllium ceramics, direct bond
copper (DBC), copper tungsten and thick film circuits. The major markets for
these products include telecommunications, automotive, optical media, aerospace
and medical. Sales by the Microelectronic Group were $32.7 million in the first
quarter 1999, a 19% improvement over first quarter 1998 sales of $27.5 million.
Sales of targets and other products through Williams Advanced Materials (WAM), a
wholly owned subsidiary of the Company, accounted for the majority of the
increase. Pure Tech, a manufacturer of non-precious metal targets acquired by
WAM at the end of the second quarter 1998, also contributed to the higher sales.
WAM has undertaken a capital investment program to expand and relocate a portion
of its manufacturing operations in order to broaden its product lines, including
specialty alloys, to meet the increasing customer demand.
Sales of beryllium ceramics declined, as anticipated. Sales of DBC and
copper tungsten products remain small but on pace with the prior year.
Investment in growing the revenues and profitability of these products is
designed to offset the lower growth expectations from traditional beryllium
ceramic products. Thick film circuits,
6
<PAGE> 8
which are manufactured at the Company's Oceanside, California facility, were a
minor portion of the Microelectronic Group's sales and were down slightly from
the prior year. The growth in these sales is somewhat dependent upon the
start-up of government funded programs.
International sales were 31% of total sales in the first quarter 1999 and
33% of first quarter 1998 sales. Both Metal Systems and Microelectronic sell
products overseas and those sales are included in the totals shown in the
preceding paragraphs. International sales consist of direct exports and sales
from two European and two Asian distribution centers and one Asian precious
metal finishing plant. Exports are usually priced in dollars while sales by the
service centers typically are priced in the local currency. The Company
maintains an active foreign currency hedge program to minimize its exposures.
International markets served are the same as domestic.
First quarter 1999 gross margin was $24.1 million, or 21% of sales, a
decline from a margin of $28.0 million and 25% of 1998 first quarter sales.
These margin changes are attributable to several key factors. First, there was
an adverse shift in the sales mix. In general, Metal System sales generate
higher variable margins than do Microelectronic sales and Metal System sales
were lower in 1999 while Microelectronic sales were higher than in 1998. Second,
fixed overhead costs, specifically depreciation and rent associated with the
relatively high level of capital investments in recent years, are higher in 1999
than 1998. Offsetting a portion of these negative effects is cost savings and
margin improvements on various ceramic and DBC products within the
Microelectronic Group. Yields on DBC products in particular have improved
through various manufacturing process enhancements over the last several
quarters.
Average selling prices were firm and the decline in Metal System sales and
the increase in Microelectronic sales were caused mainly by a change in volumes.
The cost of copper, which is generally a pass-through to domestic customers of
Metal System products, is lower in 1999 than 1998 but it had a minimal impact on
sales and profits.
Selling, administration and general expenses were $17.5 million, or 15% of
sales, in the first quarter 1999 compared to $16.3 million, or 14% of sales, in
the first quarter 1998. Major causes for the increased expense level include
amortization of the recently installed enterprise-wide software system and the
expenses from the Pure Tech operation.
Research and development expenses (R&D) were $1.8 million in the current
quarter, a decrease of $0.4 million from the first quarter last year. The lower
costs resulted from a combination of a more focused and narrow scope on a new
product development project, reimbursement of expenses under an agreement with a
customer and several manning changes. R&D efforts early in 1998 were
instrumental in developing the current yield improvements on DBC products.
Other-net expense was $0.4 million in the first quarter 1999 versus $0.7
million in 1998. Exchange gains were higher in 1999 than 1998 while other
non-operating expense items were lower. Offsetting a portion of these benefits
was a higher precious metal consignment fee.
Operating profit was $4.3 million in the first quarter 1999 and $8.8
million in the first quarter 1998. As a result of the margin decline from lower
volumes and the increase in overhead expenses, Metal Systems profitability
declined to $7.1 million in the first quarter 1999 from $13.6 million in the
comparable period last year. The Microelectronic Group profits improved to $1.8
million after posting a net loss of $0.4 million in the first quarter last year.
This increase in profitability resulted from the margin earned on higher sales
and the yield and manufacturing cost improvements referenced above. The
operating loss from all other revenues and costs not part of either business
segment, including the corporate office, was $4.5 million in the first quarter
1999, a change of less than 2% from the first quarter 1998.
First quarter 1999 interest expense was $0.9 million compared to first
quarter 1998 expense of $0.2 million. Approximately half of this increase was a
result of lower interest capitalized in association with long-term capital
projects. The balance of the increase was due principally to higher debt levels
in 1999 than in 1998 as the effect of the rate difference between the two
periods was minimal.
Income taxes were provided for at a rate of 26.8% of pre-tax earnings in
the first quarter 1999 and 28.0% in the first quarter 1998. Lower earnings and
the effect of tax credits are responsible for the slight change in rates.
7
<PAGE> 9
First quarter net income was $2.5 million in 1999 and $6.2 million in 1998.
Diluted earnings per share were $0.15 in 1999 and $0.37 in 1998.
The Company is subject to litigation involving claims relating to product
liability and other claims relating to alleged beryllium disease exposure (see
"Legal Proceedings"). Management believes that the Company has substantial
defenses and intends to vigorously contest such suits. However, the Company's
results of operations could be materially affected by unfavorable results in one
or more of these cases. Based on information known to the Company and assuming
collectibility of insurance on covered claims, management believes the outcome
of the Company's pending litigation should not have a material adverse effect
upon the consolidated financial position, results of operations or cash flow of
the Company.
FINANCIAL POSITION
Cash flow from operations was $6.0 million in the first quarter 1999.
Accounts receivable increased by 25% during the quarter in large part due to the
higher sales in the current quarter as compared to the fourth quarter 1998. The
collection period increased as well. Inventories climbed slightly to $104.5
million at the end of the period, but given the higher sales volumes, inventory
turns actually improved from the prior quarter's level. Total inventory pounds
within the Alloy manufacturing pipeline remain essentially unchanged from the
year-end 1998 level. However, significant progress was made on remelting scrap
inventories into usable feed stock materials available for further processing
into salable product.
Capital expenditures for property, plant and equipment and for mine
development were $2.1 million in the current quarter. This spending level is
much lower than the average quarterly spending over the last three years. The
construction and implementation phase of various large capital projects either
has been completed or is winding down. Only relatively minor amounts remain to
be paid on the Alloy Expansion Program at the Elmore, Ohio facility. This
project was partially financed by two operating leases totaling approximately
$79.7 million. Payments under the facility lease began in December 1997 while
the rent expense for the equipment lease began in 1999.
The initial implementation phase of a new enterprise-wide software system
was completed in the first quarter 1999. The majority of the Company's domestic
locations are now on the same sales, inventory, purchasing and accounting
system. Information reporting improvements and other operating enhancements are
on-going.
One of the benefits of installing this new information system is mitigating
the need to make numerous legacy systems Year 2000 compliant. The Company also
has or will replace or upgrade various systems at several of its domestic and
international subsidiaries. The Company is actively addressing the Year 2000
compliance issue for both information technology and non-information technology
equipment (i.e., manufacturing and other support equipment). The Company
estimates that the related expense for this activity will be approximately $0.6
million in 1999. Outside consultants have been contracted to help identify and
remediate any exposures. The Company is assessing the required remediation of
any Year 2000 issues with its non-information technology equipment, although
some equipment is known to be or has been made Year 2000 compliant. If required
modifications and conversions are not made on a timely basis, the Year 2000
issue could have a material adverse effect on the Company's operations. The
Company can provide no assurance that Year 2000 compliance plans will be
successfully completed by suppliers and customers on a timely basis, nor has the
Company been able to assess the potential impact of noncompliance by any
customer or supplier. While the Company is attempting to resolve its Year 2000
issues to the best of its understanding, given the complexity of the issue and
the potential costs, the Company cannot provide absolute assurance that this
issue will not have any impact on the Company's future cash flows or results of
operations. The Company anticipates developing contingency plans as warranted.
Total balance sheet debt was $72.8 million at the end of the first quarter
1999, a decline of $4.9 million from year-end 1998. In January 1999, the Company
amended certain provisions of its revolving credit agreement and master lease
agreement including a covenant that limits the amount of outstanding debt to a
multiple of earnings before interest, taxes, depreciation and amortization
(funded debt to EBITDA ratio).
8
<PAGE> 10
Dividends were paid at $0.12 per outstanding share of Common Stock and
totaled $2.0 million. There were no stock repurchases during the first quarter
1999.
Cash balances declined $1.8 million from the year end 1998 levels. The cash
flow from operations of $6.0 million was used for capital expenditures, a debt
reduction and a dividend payment.
Funds being generated from operations, plus the available borrowing
capacity, are believed to be adequate to support operating requirements, capital
expenditures, remediation projects and dividends. Excess cash, if any, is
invested in money market or other high quality investments.
Cash flow from operations was $1.3 million in the first quarter 1998.
Accounts receivable increased from the prior year end while inventories were
relatively flat. Capital expenditures were $11.6 million in the first quarter
1998. Short-term debt increased $5.8 million during the first quarter 1998.
Purchases of Common Stock for Treasury were $0.8 million while dividends paid
were $3.9 million, which represented the normal dividend for the fourth quarter
1997 and the first quarter 1998.
9
<PAGE> 11
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
(a) Environmental Proceedings.
RECENT DEVELOPMENTS RELATING TO PENDING CLAIMS SINCE THE END OF FOURTH
QUARTER 1998. There have been no material developments in the matters previously
reported in the Company's annual report on Form 10-K for the year ended December
31, 1998 (the "1998 10-K").
(b) Beryllium Exposure Claims.
RECENT DEVELOPMENTS RELATING TO PENDING CLAIMS SINCE THE END OF FOURTH
QUARTER 1998. As previously reported, including in the 1998 10-K, the Company is
currently a defendant in eight product liability cases in which the plaintiffs
allege injury resulting from exposure to beryllium and beryllium-containing
materials, other than as employees of the Company, and are claiming recovery
based on various legal theories. Since December 31, 1998, there have been no
material developments in seven of the eight matters. In FACCIO ET AL. V. BRUSH
WELLMAN INC. (USDC, ARIZ.), numerous discovery motions, some of which sought
sanctions against the Company, had previously been filed. Some, but not all, of
these discovery motions have been decided since December 31, 1998; no sanctions
were imposed by the court as to those motions.
As previously reported, including in the 1998 10-K, nine Company employees
and their spouses have filed law suits against the Company and certain of its
employees in the Superior Court of Pima County, Arizona (the "Arizona Employee
Litigation"). The plaintiffs in the Arizona Employee Litigation claim that,
during their employment with the Company, they contracted chronic beryllium
disease ("CBD") as a result of exposure to beryllium and beryllium-containing
products. As previously reported, including in the 1998 10-K, both the Company
and the plaintiffs petitioned the Arizona Supreme Court to review various
rulings of the appellate court relating to the trial court's disposition of
certain summary judgment motions. On February 25, 1999, the Arizona Supreme
Court denied the Company's petition for review and granted the plaintiffs'
cross-petition. The Company filed a motion to reconsider the denial of its
petition for review, which the Supreme Court denied on April 2, 1999. The
Supreme Court heard oral argument on plaintiffs' cross-petition on April 16,
1999.
As previously reported, including in the Company's 1998 10-K, on July 5,
1996, Rudy Gamez, an employee of the Company, also filed a suit in the Superior
Court of Pima County, Arizona (the "Gamez Litigation") based upon similar claims
and seeking similar relief as the plaintiffs in the Arizona Employee Litigation.
At December 31, 1998 there were several pending motions for summary judgment in
the Gamez Litigation. Oral argument on these motions took place on January 25,
1999. On March 26, 1999, the Court granted the Company's summary judgment motion
on the plaintiffs' breach of contract and bad faith claims and denied the
Company's summary judgment motion based on newly discovered evidence. On April
9, 1999, the Court denied the Company's summary judgment motion on the
plaintiffs' willful misconduct claims. On April 22, 1999 the Company filed a
motion to reconsider the denial of this summary judgment motion.
CLAIMS INITIATED SINCE THE END OF FOURTH QUARTER 1998. The Company is a
defendant in a case filed in the Court of Common Pleas for Cuyahoga County, Ohio
in March, 1999, by an employee and his spouse: DAVID NORGARD ET AL. V. BRUSH
WELLMAN INC. The same complaint was previously filed in October, 1997, and was
voluntarily dismissed by the plaintiffs in June, 1998. The complaint alleges
that Norgard, while an employee of the Company, contracted CBD from exposure to
beryllium and beryllium-containing materials, and that his wife has lost
consortium. Plaintiffs seek recovery for alleged intentional tort by the
Company. The Company has filed a motion to dismiss the claims based on the
statute of limitations. The Company's motion remains pending.
As previously reported in the 1998 10-K, a complaint and amended complaint
were filed in the United States District Court for the Eastern District of
Tennessee by Jerry Lynn Hall and his wife in February, 1999, against the Company
and thirteen other defendants. There have been no material developments in this
matter since the 1998 10-K.
10
<PAGE> 12
(c) Asbestos Exposure Claims.
RECENT DEVELOPMENTS RELATING TO PENDING CLAIMS SINCE THE END OF FOURTH
QUARTER 1998. There have been no material developments in the matters previously
reported in the 1998 10-K.
(d) Other Miscellaneous Pending Claims.
RECENT DEVELOPMENTS RELATING TO PENDING CLAIMS SINCE THE END OF FOURTH
QUARTER 1998. There have been no material developments in the matters previously
reported in the 1998 10-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C>
Statement re computation of per share earnings (filed as
(11) Exhibit 11 to Part I of this report).
Financial Data Schedule.
(27)
</TABLE>
(b) Reports on Form 8-K
There have been no reports on Form 8-K during the quarter ended April 2, 1999.
11
<PAGE> 13
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
BRUSH WELLMAN INC.
Dated: May 14, 1999
/s/ John D. Grampa
--------------------------------------
John D. Grampa
Vice President, Finance
12
<PAGE> 1
EXHIBIT 11
BRUSH WELLMAN INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
--------------------------
APR. 2, APR. 3,
1999 1998
----------- -----------
<S> <C> <C>
Basic:
Average shares outstanding................................ 16,193,359 16,317,518
=========== ===========
Net income................................................ $ 2,486,000 $ 6,162,000
Per share amount.......................................... $ 0.15 $ 0.38
=========== ===========
Diluted:
Average shares outstanding................................ 16,193,359 16,317,518
Dilutive stock options based on the treasury stock method
using average market price............................. 38,753 398,104
----------- -----------
Totals............................................ 16,232,112 16,715,622
=========== ===========
Net income................................................ $ 2,486,000 $ 6,162,000
Per share amount.......................................... $ 0.15 $ 0.37
=========== ===========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> APR-02-1999
<CASH> 99
<SECURITIES> 0
<RECEIVABLES> 77,598
<ALLOWANCES> 2,260
<INVENTORY> 104,539
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0
0
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</TABLE>
