<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934. For the Quarterly Period
ended September 30, 1995.
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934. For the Transition Period
from N/A to __________.
------
Commission File No. 1-8467
BMC INDUSTRIES, INC.
--------------------
(Exact Name of Registrant as Specified in its Charter)
MINNESOTA 41-0169210
--------- ----------
(State of Incorporation) (IRS Employer Identification No.)
Two Appletree Square, Minneapolis, Minnesota 55425
--------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(612) 851-6000
--------------
(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 at least the past 90 days.
X Yes _____ No
-----
BMC Industries, Inc. has outstanding 26,944,444 shares of common stock as of
November 13, 1995 (shares are stated on a post-split basis, which split
shares were distributed on November 13, 1995). There is no other class of
stock outstanding.
Page 1 of 18.
Exhibit Index Begins at Page 10.
<PAGE>
PART I : FINANCIAL INFORMATION
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
Item 1: Financial Statements
<TABLE>
<CAPTION>
September 30 December 31
------------ -----------
ASSETS 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 18,901 $ 14,327
Trade accounts and notes
receivable, net of allowances 25,998 24,564
Inventories - Note 3 32,289 28,792
Deferred income taxes 3,980 5,914
Other current assets 5,368 5,221
- ------------------------------------------------------------------------------
Total Current Assets 86,536 78,818
- ------------------------------------------------------------------------------
Property, Plant and Equipment 156,867 130,622
Less Accumulated Depreciation 89,424 80,764
-------- --------
Property, Plant and Equipment - Net 67,443 49,858
-------- --------
Deferred Income Taxes 3,428 3,297
Other Assets - Net 7,945 6,713
- ------------------------------------------------------------------------------
Total Assets $165,361 $138,686
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------
Current Liabilities
Accounts payable $ 13,905 $ 12,090
Income taxes payable 7,925 5,514
Accrued expenses and other liabilties 23,652 22,445
- ------------------------------------------------------------------------------
Total Current Liabilities 45,482 40,049
- ------------------------------------------------------------------------------
Other Liabilities 18,917 15,835
Deferred Income Taxes 866 1,014
Stockholders' Equity
Common stock 52,038 51,156
Other (1,242) (1,263)
Retained earnings 43,472 27,559
Cumulative translation adjustment 5,828 4,336
- ------------------------------------------------------------------------------
Total Stockholders' Equity 100,096 81,788
- ------------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $165,361 $138,686
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
Page 2
<PAGE>
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ -------------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Revenues
Net sales of primary products $58,189 $53,488 $179,968 $159,434
Equipment and technology sales 1,014 491 10,216 4,256
- -----------------------------------------------------------------------------------------------------------------------
Total revenues 59,203 53,979 190,184 163,690
- -----------------------------------------------------------------------------------------------------------------------
Cost of sales of primary products 47,677 45,593 146,787 133,155
Cost of equipment and technology sales 466 201 6,134 3,145
Selling 2,078 2,038 6,558 6,140
Administrative 1,653 994 4,237 3,049
- -----------------------------------------------------------------------------------------------------------------------
Total operating costs and expenses 51,874 48,826 163,716 145,489
- -----------------------------------------------------------------------------------------------------------------------
Income from Operations 7,329 5,153 26,468 18,201
- -----------------------------------------------------------------------------------------------------------------------
Other Income and (Expense)
Interest expense (103) (1,240) (208) (3,052)
Interest income 206 168 604 379
Other income (expense) 7 (36) (152) (19)
- -----------------------------------------------------------------------------------------------------------------------
Earnings from Continuing Operations before Income Taxes 7,439 4,045 26,712 15,509
Income Tax Provision 2,891 1,759 9,993 5,844
- -----------------------------------------------------------------------------------------------------------------------
Earnings from Continuing Operations 4,548 2,286 16,719 9,665
Provision for Loss Related to Discontinued
Operation (less applicable income tax
benefit of $461) - (Note 2) -- -- -- (839)
- -----------------------------------------------------------------------------------------------------------------------
Net Earnings $ 4,548 $ 2,286 $ 16,719 $ 8,826
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Earnings Per Share from Continuing Operations $ 0.16 $ 0.08 $ 0.59 $ 0.36
Loss Per Share Related to Discontinued Operation -- -- -- (.03)
- -----------------------------------------------------------------------------------------------------------------------
Net Earnings Per Share $ 0.16 $ 0.08 $ 0.59 $ 0.33
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Number of Shares Included in Per Share Computation 28,369 27,721 28,210 27,137
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dividends Declared Per Share $ 0.01 $ 0.01 $ 0.03 $ 0.01
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
Page 3
<PAGE>
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
------------------------
1995 1994
<S> <C> <C>
- ------------------------------------------------------------------------------
Net Cash Provided by Operating Activities
Net earnings $ 16,719 $ 8,826
Depreciation and amortization 6,665 6,660
Changes in operating assets and liabilities 4,227 9,201
- ------------------------------------------------------------------------------
Total 27,611 24,687
- ------------------------------------------------------------------------------
Net Cash Provided by (Used in) Investing Activities
Additions to property, plant and equipment (23,291) (6,709)
Other 22 6
- ------------------------------------------------------------------------------
Total (23,269) (6,703)
- ------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities
Decrease in short-term borrowings -- (23)
Repayment of long-term debt(1) (15) (22,534)
Common stock issued(1) 776 2,104
Cash dividends paid (805) --
Employee loans for exercise of stock options 127 (68)
- ------------------------------------------------------------------------------
Total 83 (20,521)
- ------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash
and Cash Equivalents 149 240
- ------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 4,574 (2,297)
Cash and Cash Equivalents at Beginning of Period 14,327 10,927
- ------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 18,901 $ 8,630
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
(1) IN 1994, IN ADDITION TO THE LONG-TERM DEBT REPAYMENT AND
COMMON STOCK ISSUANCE SHOWN, $4,911 OF LONG-TERM DEBT WAS FORGIVEN
AS CONSIDERATION FOR THE EXERCISE OF WARRANTS.
See accompanying Notes to Condensed Consolidated Financial Statements.
Page 4
<PAGE>
BMC INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except per share amounts)
1. Financial Statements
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position of the Company as of September 30,
1995, and the results of operations and the cash flows for the periods
ended September 30, 1995 and 1994. Such adjustments are of a normal
recurring nature. Certain items in the financial statements for the
periods ended September 30, 1994 have been reclassified to conform to
the presentation for the periods ended September 30, 1995. The results
of operations for the three-month and nine-month periods ended September
30, 1995 are not necessarily indicative of the results to be expected
for the full year. The balance sheet at December 31, 1994 is derived
from the audited balance sheet as of that date. For further
information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year ended
December 31, 1994.
2. Provision for Loss Related to Discontinued Operation
In the first quarter of 1994, the Company made a provision for estimated
losses of $1,300, less applicable income tax effect of $461, related to
a discontinued operation. This provision was prompted by claims and
expenses growing out of environmental contamination and other claims
related to the discontinued operation. The environmental contamination
occurred before 1980 at an operation acquired by the Company in 1983 and
disposed of in 1986.
3. Inventories September 30, 1995 December 31, 1994
------------------ -----------------
Raw materials $12,771 $ 9,748
Work in process 5,277 5,501
Finished goods 14,241 13,543
------- -------
Total Inventories $32,289 $28,792
------- -------
------- -------
4. Long-term Contract
Work is continuing on a long-term contract for the construction of
aperture mask production equipment for a customer in China. At
September 30, 1995, the contract was approximately 85% complete.
Pursuant to a periodic review of the contract, estimates of total costs
to complete the contract were reduced during the second quarter,
resulting in profit recognition for the cumulative project-to-date
effect of such reduction in total contract costs.
Page 5
<PAGE>
5. Earnings Per Share
Earnings per share is computed using the weighted average number of
common stock and common stock equivalent shares outstanding during the
period. Common stock equivalents include dilutive stock options and
warrants using the treasury stock method. All remaining outstanding
warrants were exercised during the third quarter of 1994. Fully diluted
earnings per share did not differ significantly from primary earnings
per share in both years.
6. Stock Split
On October 18, 1995, the Company declared a 2-for-1 stock split, payable
in the form of a 100% stock dividend. Holders of record on October 30,
1995 of the Company's common stock will receive one additional share of
stock for each share held, to be distributed on November 13, 1995. As a
result, the number of outstanding shares and earnings per share for
prior periods presented have been restated to reflect the split.
7. Pending Matters
As noted in the Company's Form 10-K for the period ended December 31,
1994, in January 1995, a U.S. District Court jury in Miami, Florida
awarded the Company a verdict totaling $5.1 million against Barth
Industries (Barth) of Cleveland, Ohio and its parent, Nesco Holdings,
Inc. (Nesco). The verdict relates to an agreement under which Barth and
Nesco were to help automate the plastic lens production plant in Ft.
Lauderdale. In September 1995, Barth and Nesco filed an appeal of the
jury verdict, as expected. The Company has not recorded any income
relating to this verdict as a final judgment has not yet been rendered.
Page 6
<PAGE>
BMC INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Total revenues for the third quarter of 1995 increased by $5.2 million or
9.7% from the third quarter of 1994. Net sales of primary products increased
$4.7 million or 8.8% from the third quarter of 1994. Net sales of the
Precision Imaged Products group, excluding equipment and technology sales,
increased by 12.8% due primarily to continued improvement in sales mix toward
higher-margin large-sized and invar color television aperture masks. Net
sales of the Optical Products group increased by 1.4%. An increase in unit
sales of polycarbonate eyewear lenses was largely offset by a decline in unit
sales of glass and plastic eyewear lenses.
Cost of sales of primary products was 81.9% of net sales for the third
quarter of 1995, compared to 85.2% in the same period of 1994. The
improvement occurred in both groups and was due primarily to an improved
sales mix of higher-margin products and improved manufacturing efficiencies.
Administrative expense for the third quarter of 1995 increased by $0.7
million in comparison to the prior year's third quarter. This increase was
due primarily to increased costs associated with compensation plans which are
tied to the Company's stock price which has increased during the period and
also due to the staffing of new positions.
Interest expense for the third quarter of 1995 declined by $1.1 million in
comparison to the prior year's third quarter. The Company had long-term
debt in the third quarter of 1994 which was paid off in that period and no
long-term debt in the third quarter of 1995.
The provision for income taxes was 38.9% of pre-tax income in the third
quarter of 1995 compared to 43.5% for the same period in 1994. The higher
rate in 1994 was due to higher taxes incurred by its German subsidiary in
that period.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Total revenues for the first nine months of 1995 increased $26.5 million
or 16.2% over the first nine months of 1994. Net sales of primary products
increased $20.5 million or 12.9%. Net sales of the Precision Imaged Products
group increased by 19.1% due primarily to an improvement in sales mix related
to increased sales of larger-sized and invar color television aperture masks
and increased revenue recognition under a long-term equipment construction
contract. Net sales of the Optical Products group increased 1.8%, due
primarily to an increase in unit sales of polycarbonate eyewear lenses,
offset by a decline in unit sales of glass and plastic eyewear lenses.
Page 7
<PAGE>
Cost of sales of primary products was 81.6% of net sales in the first nine
months of 1995, compared to 83.5% in the same period of 1994. The
improvement occurred throughout the Company and was due primarily to the
improved sales mix and enhanced manufacturing efficiencies.
Administrative expense for the first nine months of 1995 increased by
$1.2 million in comparison to the same period of 1994 due primarily to
increased costs associated with compensation plans which are tied to the
Company's stock price which increased during the period and also due to the
staffing of new positions.
Interest expense declined by $2.8 million in the first nine months of 1995
compared to the same period in 1994. The Company had long-term debt in 1994
which was paid off in the third quarter of that year and no long-term debt
during the first nine months of 1995.
The provision for income taxes was 37.4% of pre-tax income in the first nine
months of 1995 compared to 37.7% for the same period in 1994. The Company
anticipates that its effective tax rate for the total year of 1995 will be in
the approximate range of 37% to 39%.
ENVIRONMENTAL
The Company was previously named as a defendant in connection with real
property located in Irvine, California previously occupied by a discontinued
operation of the Company. The Company recently settled this litigation with
the other parties and all claims have been dismissed with prejudice.
Remediation of the site has begun in accordance with a remediation system
approved by the applicable regulatory state agency. The settlement amount
and the cost of the remediation system to date are both within the amounts
previously reserved by the Company for this matter.
Other than as noted above, there are no material changes in the status of
the legal proceedings and environmental matters as described in the Company's
Form 10-K for the fiscal year ended December 31, 1994.
FINANCIAL POSITION AND LIQUIDITY
Cash and cash equivalent balances increased by $4.6 million during the
first nine months of 1995, due primarily to operating earnings and changes in
operating assets and liabilities. These increases were partially offset by
capital expenditures of $23.3 million, principally due to construction of an
additional aperture mask production line at the Company's facility in
Germany, the construction of horizontal coating equipment at the Company's
facility in New York and the commencement of an expansion of the Company's
aperture mask manufacturing facility in New York. The Company announced in
the first and second quarters of 1995 its plans to further increase its mask
manufacturing capacity with the construction of two additional production
lines and related facilities. The Company selected its existing Cortland,
New York facility as the site for these lines and facilities in the third
quarter. During the third quarter of 1995, the Company began the engineering
phase of the expansion and has spent $1.4 million to date on the expansion.
Total cost of the Cortland expansion is estimated to be between $80 and $85
million. Completion of the first of these lines is expected in the first
quarter of 1997. The second line is expected to be operating in the second
quarter of 1997.
Page 8
<PAGE>
Working capital was $41.1 million at September 30, 1995, compared to
$38.8 million at December 31, 1994. The current ratio was 1.90 at
September 30, 1995, compared to 1.97 at December 31, 1994. The ratio of
total liabilities to equity declined to .65 at September 30, 1995 compared to
.70 at December 31, 1994. The Company had no debt at both September 30, 1995
and December 31, 1994.
The Company had $43.6 million available for borrowing under domestic and
foreign bank lines at September 30, 1995. Discussion with banks are underway
to increase credit lines by amounts sufficient to fund the capital projects
described above. As of September 30, 1995, the Company had commitments of
$8.1 million for capital purchases. Additional commitments relating to the
previously mentioned expansion at the New York facility will be entered into
as the project progresses.
Management believes that sufficient cash can be generated through
operations and borrowings to finance the above capital projects and the
Company's other short and long-term cash needs.
Page 9
<PAGE>
PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
With regard to legal proceedings and certain environmental
matters, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 7-9
and Note 7 of the "Notes to Condensed Consolidated Financial
Statements" on Page 6.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits Page
-------- ----
3.1 Amendment to the Second Restated Articles of
Incorporation, dated as of October 30, 1995 . . . . . . 11
27. Financial Data Schedule (Filed only in
electronic format)
28.1 News Release, dated November 2, 1995, announcing
the addition of Harry A. Hammerly to the Board of
Directors . . . . . . . . . . . . . . . . . . . . . . . 13
28.2 News Release, dated October 19, 1995, announcing
third quarter 1995 operating results, declaration of
a 2-for-1 stock split and an increase in the
authorized quarterly dividend . . . . . . . . . . . . . 14
28.3 News Release, dated September 8, 1995, announcing
quarterly dividend. . . . . . . . . . . . . . . . . . . 18
(b) REPORTS ON FORM 8-K.
The Company did not file any reports on Form 8-K during the
quarter ended September 30, 1995.
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.
BMC INDUSTRIES, INC.
---------------------------------------
Michael P. Hawks
Vice President of Finance &
Administration, CFO
Dated: November 13, 1995
Page 10
<PAGE>
MINNESOTA SECRETARY OF STATE
AMENDMENT OF ARTICLES OF INCORPORATION
BEFORE COMPLETING THIS FORM, PLEASE READ INSTRUCTIONS BELOW.
CORPORATE NAME: (List the name of the company prior to any desired name change)
BMC Industries, Inc.
- -------------------------------------------------------------------------------
This amendment is effective on the day it is filed with the Secretary of
State, unless you indicate another date, no later than 30 days after filing
with the Secretary of State.
The following amendment(s) of articles regulating the above corporation
were adopted: (Insert full text of newly amended article(s) indicating which
article(s) is (are) being amended or added.) If the full text of the
amendment will not fit in the space provided, attach additional numbered
pages. (Total number of pages including this form 2.)
ARTICLE V
The attached Exhibit A amends the first paragraph of Article V of the
Company's Second Restated Articles of Incorporation in its entirety.
This amendment has been approved pursuant to MINNESOTA STATUTES CHAPTER
302A OR 317A. I certify that I am authorized to execute this amendment and I
further certify that I understand that by signing this amendment, I am
subject to the penalties of perjury as set forth in section 609.48 as if I
had signed this amendment under oath.
/s/ Michael P. Hawks
--------------------------------------
(Signature of Authorized Person)
- ------------------------------------------------------------------------------
INSTRUCTIONS
1. Type or print with black ink.
2. A Filing Fee of: $35.00, made payable to the
Secretary of State.
3. Return completed forms to:
SECRETARY OF STATE
180 STATE OFFICE BUILDING
100 CONSTITUTION AVE.
ST. PAUL, MN 55155-1299
- ------------------------------------------------------------------------------
FOR OFFICE USE ONLY
- ------------------------------------------------------------------------------
Page 11
<PAGE>
EXHIBIT A
The first paragraph of Article V of the Company's Second Restated
Articles of Incorporation is amended in its entirety to provide as
follows:
The aggregate number of shares that this Corporation has authority to
issue is ninety-nine million five hundred thousand (99,500,000) shares
which shall consist of five hundred thousand (500,000) undesignated
shares and ninety-nine million (99,000,000) shares of voting common
stock. Only the authorization of the Board of Directors is necessary
for this Corporation to issue shares and other securities and rights to
purchase shares and other securities. All 99,000,000 shares of voting
common stock shall have equal rights and preferences. The Board of
Directors is authorized to establish, from the undesignated shares, one
or more classes and series of shares, to designate each such class and
series, and to fix the rights and preferences of each such class and
series. All stockholders are denied preemptive rights, unless the Board
of Directors shall grant preemptive rights to the holders of some or all
of the undesignated shares with respect to some or all of the
undesignated shares. This Corporation may issue shares of voting common
stock to the holders of shares of any class or series of the
undesignated shares and it may issue shares of any class or series of
the undesignated shares to the holders of shares of voting common stock.
Page 12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,113
<SECURITIES> 15,788
<RECEIVABLES> 28,332
<ALLOWANCES> 2,334
<INVENTORY> 32,289
<CURRENT-ASSETS> 86,536
<PP&E> 156,867
<DEPRECIATION> 89,424
<TOTAL-ASSETS> 165,361
<CURRENT-LIABILITIES> 45,482
<BONDS> 0
<COMMON> 51,058
0
0
<OTHER-SE> 49,038
<TOTAL-LIABILITY-AND-EQUITY> 165,361
<SALES> 189,877
<TOTAL-REVENUES> 190,184
<CGS> 152,921
<TOTAL-COSTS> 163,716
<OTHER-EXPENSES> 152
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (396)
<INCOME-PRETAX> 26,712
<INCOME-TAX> 9,993
<INCOME-CONTINUING> 16,719
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,719
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59
</TABLE>
<PAGE>
CONTACT: Michael P. Hawks (NYSE-BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC INDUSTRIES ADDS HARRY HAMMERLY TO ITS BOARD
November 2, 1995 -- Minneapolis, MN -- BMC Industries, Inc. today announced
the addition of Harry A. Hammerly to BMC's Board of Directors, effective
November 8, 1995. Mr. Hammerly has had a distinguished career with Minnesota
Mining and Manufacturing (3M) extending over 40 years, the last five years of
which he served on the Company's Board of Directors. Mr. Hammerly's most
recent position with 3M, from which he retired in July of this year, was
Executive Vice President, International Operations. Mr. Hammerly served in a
number of other senior staff and operating positions at 3M, including Vice
President, Finance. Mr. Hammerly continues to serve not only on 3M's Board of
Directors but also on the Boards of Apogee Enterprises, Inc., Cincinnati
Milacron, Inc. and The Geon Company.
Paul B. Burke, BMC's Chairman, President and Chief Executive Officer, stated
"We are delighted that Harry Hammerly has agreed to serve on BMC's Board of
Directors. Harry brings to the BMC Board a vast array of experience in
international operations, finance and new business development. He also
brings an insider's perspective on 3M's well respected approach to the
business process. As BMC continues on the path of growth and expansion, we
will benefit greatly from Harry's talents and experience."
BMC is one of the world's largest manufacturers of aperture masks for color
picture tubes used in televisions 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".
Page 13
<PAGE>
CONTACT: Michael P. Hawks (NYSE BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS RECORD THIRD QUARTER RESULTS;
DECLARES A 2-FOR-1 STOCKSPLIT; AND ANNOUNCES
AN INCREASE IN THE AUTHORIZED QUARTERLY DIVIDEND
October 19, 1995 -- Minneapolis, MN -- BMC Industries, Inc. today reported
third quarter 1995 net earnings of $4,548,000 or $.32 per share, up 99% from
net earnings of $2,286,000 or $.16 per share in the year-earlier period.
Third quarter total revenues were $59,203,000 an increase of 10% from
$53,979,000 a year ago.
Earnings from continuing operations for the first nine months of 1995
totaled $16,719,000 or $1.19 per share. This represented an improvement of
$7,054,000 or 73% over the $9,665,000 or $.71 per share recorded for the
first nine months of the prior year. Year-to-date total revenues were
$190,184,000, up 16% from the prior year.
Third quarter results showed the continuing benefits from operating
improvements in each of the Company's businesses, and from a continuing shift
in sales mix to high-margin products. In the third quarter, sales of invar,
jumbo (30" and larger) and large (25" to 29") aperture masks increased 46%,
25% and 15%, respectively, over third quarter 1994 sales. On a year-to-date
basis, these sales were up 77%, 41% and 26%, respectively. Precision Imaged
Products also benefited from Buckbee-Mears St. Paul's record third quarter
results. Third quarter sales of etched parts increased 88% over the prior
year while year-to-date sales of etched parts were up 67%. The focus of
BMC's Optical Products operation has been polycarbonate lenses, sales of
which were up 43% in the third quarter and 52% year-to-date.
Capital spending during the nine months ended September 30, 1995 increased
three-fold to $23.3 million from the $7.3 million spent during the comparable
period last year. Approximately $13 million of this spending related to the
Company's 60% capacity expansion at its two aperture mask manufacturing
facilities in New York and Germany. Despite the increased capital spending,
cash balances increased to $18.9 million at the end of the third quarter from
$14.3 million at the end of 1994, and BMC's balance sheet at September 30
remained debt-free.
- more -
Page 14
<PAGE>
Paul B. Burke, BMC's chairman and chief executive officer stated that "The
Company's strengthening cash position in a period during which it is devoting
more funds to capital projects than at any time in its history is indicative
of the strength of its core manufacturing operations. The Company's on-going
shift in its sales mix toward high-margin aperture mask and eyewear lens
products resulted in its eighteenth consecutive quarter of increased net
earnings over the year-earlier period, excluding income from the sale of
equipment and technology and other non-recurring items. The third quarter
also benefited from higher equipment and technology earnings and lower
interest expense."
Burke added that "The Precision Imaged Products expansion efforts are in
full swing. We are looking forward to the fourth quarter start-up of the new
high-resolution aperture mask line at our German plant. During the third
quarter, work began on the two new aperture mask lines and related facility
at our Cortland, New York plant. We expect these two lines to be in
production in the first half of 1997, as scheduled."
BMC also announced today that its Board of Directors has approved a
two-for-one stock split of its outstanding common shares. Shareholders of
record as of October 30, 1995 will receive an additional share for each share
owned on that date, to be distributed on November 13, 1995.
Mr. Burke stated that "The continuing growth in BMC's earnings and the
strengthening of its balance sheet has led to increased interest in BMC's
shares on the part of the investment community and a stronger share price.
This split is designed to increase the liquidity of the Company's stock so
that more shares are available for trading."
The Board of Directors also approved a 25% increase in the Company's
quarterly dividend from $.01 per share (post-split) to $.0125 per share,
effective with the next quarterly dividend.
Mr. Burke stated that "The Board's decision to increase the quarterly
dividend is directly attributable to the strong earnings growth which
continues to be exhibited by the Company's businesses."
BMC is one of the world's largest manufacturers of aperture masks for
color picture tubes used in televisions 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".
- more -
Page 15
<PAGE>
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION> Three Months Ended Nine Months Ended
September 30 September 30
--------------------- ---------------------
1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Net sales of primary products $58,189 $53,488 $179,968 $159,434
Equipment and technology sales 1,014 491 10,216 4,256
- ------------------------------------------------------------------------------------------------------------------------
Total Revenues 59,203 53,979 190,184 163,690
- ------------------------------------------------------------------------------------------------------------------------
Operating Costs and Expenses
Cost of sales of primary products 47,677 45,593 146,787 133,155
Cost of equipment and technology sales 466 201 6,134 3,145
Selling 2,078 2,038 6,558 6,140
Administrative 1,653 994 4,237 3,049
- ------------------------------------------------------------------------------------------------------------------------
Total Operating Costs and Expenses 51,874 48,826 163,716 145,489
- ------------------------------------------------------------------------------------------------------------------------
Income from Operations 7,329 5,153 26,468 18,201
- ------------------------------------------------------------------------------------------------------------------------
Other Income and (Expense)
Interest expense (103) (1,240) (208) (3,052)
Interest income 206 168 604 379
Other income (expense) 7 (36) (152) (19)
- ------------------------------------------------------------------------------------------------------------------------
Earnings from Continuing Operations before Income Taxes 7,439 4,045 26,712 15,509
Income Taxes 2,891 1,759 9,993 5,844
- ------------------------------------------------------------------------------------------------------------------------
Earnings from Continuing Operations 4,548 2,286 16,719 9,665
Provision for Loss Related to Discontinued Operation (less
applicable income tax benefit of $461) -- (Note) -- -- -- (839)
- ------------------------------------------------------------------------------------------------------------------------
Net Earnings $ 4,548 $ 2,286 $ 16,719 $ 8,826
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Earnings Per Share from Continuing Operations $ 0.32 $ 0.16 $ 1.19 $ 0.71
Loss Per Share Related to Discontinued Operation -- -- -- (0.06)
- ------------------------------------------------------------------------------------------------------------------------
Net Earnings Per Share $ 0.32 $ 0.16 $ 1.19 $ 0.65
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Number of Shares Included in Per Share Computation 14,185 13,861 14,105 13,569
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: In the first quarter of 1994, the Company made a provision for
estimated losses of $1,300, less applicable income tax effect of $461,
related to a discontinued operation. This provision was prompted by
claims and expenses growing out of environmental contamination and
other claims related to the discontinued operation. The environmental
contamination occurred before 1980 at an operation acquired by BMC in
1983 and disposed of in 1986.
Page 16
<PAGE>
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
September 30 December 31
------------ -----------
ASSETS 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 18,901 $ 14,327
Trade accounts and notes receivable, net of allowances 25,998 24,564
Inventories 32,289 28,792
Deferred income taxes 3,980 5,914
Other current assets 5,368 5,221
- -----------------------------------------------------------------------------------------------------------------------
Total Current Assets 86,536 78,818
- -----------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment 156,867 130,622
Less Accumulated Depreciation 89,424 80,764
-------- --------
Property, Plant and Equipment - Net 67,443 49,858
-------- --------
Deferred Income Taxes 3,428 3,297
Other Assets - Net 7,954 6,713
- -----------------------------------------------------------------------------------------------------------------------
Total Assets $165,361 $138,686
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- -----------------------------------------------------------------------------------------------------------------------
Current Liabilities
Accounts payable $ 13,905 $ 12,090
Income taxes payable 7,925 5,514
Accrued expenses and other liabilities 23,652 22,445
- -----------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 45,482 40,049
- -----------------------------------------------------------------------------------------------------------------------
Other Liabilities 18,917 15,835
Deferred Income Taxes 866 1,014
Stockholders' Equity
Common stock 52,038 51,156
Other (1,242) (1,263)
Retained earnings 43,472 27,559
Cumulative translation adjustment 5,828 4,336
- -----------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 100,096 81,788
- -----------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $165,361 $138,686
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 17
<PAGE>
Contact: Michael P. Hawks (NYSE-BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC ANNOUNCES QUARTERLY DIVIDEND
September 8, 1995--Minneapolis, Minnesota--BMC Industries, Inc. today
announced that its Board of Directors has approved a continuation of its
quarterly cash dividend of two cents per share.
Shareholders of record as of September 20, 1995 will receive a dividend of
two cents for each share owned on that date, to be paid on October 4, 1995.
BMC Industries, Inc. is one of the world's largest manufacturers of
aperture masks for color picture tubes used in televisions and computer
monitors. The Company is also a leading producer of polycarbonate, glass and
plastic eyewear lenses. BMC's common stock is traded on the New York Stock
Exchange under the symbol BMC.
Page 18
