<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,
1996.
/ / 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 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 27,317,239 shares of common stock as of
November 8, 1996. There is no other class of stock outstanding.
Page 1 of 17
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 1996 1995
- -----------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 5,270 $ 15,874
Trade accounts receivable, net of allowances 22,837 23,003
Inventories 48,643 34,772
Deferred income taxes 4,571 3,753
Other current assets 8,816 5,964
- -----------------------------------------------------------------------------------
Total Current Assets 90,137 83,366
- -----------------------------------------------------------------------------------
Property, Plant and Equipment 200,313 171,711
Less Accumulated Depreciation 95,316 90,302
-------- --------
Property, Plant and Equipment, Net 104,997 81,409
-------- --------
Deferred Income Taxes 5,879 5,362
Other Assets, Net 11,489 12,195
- -----------------------------------------------------------------------------------
Total Assets $ 212,502 $ 182,332
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- -----------------------------------------------------------------------------------
Current Liabilities
Short-term borrowings $ 3,139
Accounts payable 20,172 $ 20,408
Income taxes payable 8,892 9,308
Accrued expenses and other current liabilities 23,072 20,920
- -----------------------------------------------------------------------------------
Total Current Liabilities 55,275 50,636
- -----------------------------------------------------------------------------------
Long-Term Debt 3,967 26
Other Liabilities 19,551 21,628
Deferred Income Taxes 1,498 1,576
Stockholders' Equity
Common stock 55,613 52,974
Retained earnings 73,121 50,962
Cumulative translation adjustment 4,306 5,749
Other (829) (1,219)
- -----------------------------------------------------------------------------------
Total Stockholders' Equity 132,211 108,466
- -----------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 212,502 $ 182,332
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</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
-------------------------------------------------
1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Net sales of primary products $ 68,158 $ 58,189 $ 203,780 $ 179,968
Equipment and technology sales -- 1,014 853 10,216
- -----------------------------------------------------------------------------------------------------------
Total Revenues 68,158 59,203 204,633 190,184
- -----------------------------------------------------------------------------------------------------------
Operating Costs and Expenses
Cost of sales of primary products 53,840 47,677 158,422 146,787
Cost of equipment and technology sales -- 466 370 6,134
Selling 2,334 2,078 7,451 6,558
Administrative 1,210 1,653 3,725 4,237
- -----------------------------------------------------------------------------------------------------------
Total Operating Costs and Expenses 57,384 51,874 169,968 163,716
- -----------------------------------------------------------------------------------------------------------
Income from Operations 10,774 7,329 34,665 26,468
- -----------------------------------------------------------------------------------------------------------
Other Income and (Expense)
Interest expense (246) (103) (436) (208)
Interest income 60 206 210 604
Other income (expense) 89 7 120 (152)
- -----------------------------------------------------------------------------------------------------------
Earnings before Income Taxes 10,677 7,439 34,559 26,712
Income Tax Provision 3,520 2,891 11,377 9,993
- -----------------------------------------------------------------------------------------------------------
Net Earnings $ 7,157 $ 4,548 $ 23,182 $ 16,719
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Net Earnings Per Share $ 0.25 $ 0.16 $ 0.82 $ 0.59
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Number of Shares Included in Per Share Computation 28,390 28,369 28,346 28,210
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Dividends Declared Per Share $ 0.0125 $ 0.01 $ 0.0375 $ 0.03
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</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
--------------------------
1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Net Cash Provided by Operating Activities
Net earnings $ 23,182 $ 16,719
Depreciation and amortization 7,661 6,665
Changes in operating assets and liabilities (17,622) 4,227
- -----------------------------------------------------------------------------------------
Total 13,221 27,611
- -----------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Investing Activities
Additions to property, plant and equipment (32,908) (23,291)
Other -- 22
- -----------------------------------------------------------------------------------------
Total (32,908) (23,269)
- -----------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities
Short-term borrowings 3,139 --
Long-term borrowings 3,941 (15)
Common stock issued 2,639 776
Cash dividends paid (1,020) (805)
Other 462 127
- -----------------------------------------------------------------------------------------
Total 9,161 83
- -----------------------------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash Equivalents (78) 149
- -----------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents (10,604) 4,574
Cash and Cash Equivalents at Beginning of Period 15,874 14,327
- -----------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 5,270 $ 18,901
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
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,
1996, and the results of operations and the cash flows for the periods
ended September 30, 1996 and 1995. Such adjustments are of a normal
recurring nature. Certain items in the financial statements for the
periods ended September 30, 1995 have been reclassified to conform to the
presentation for the periods ended September 30, 1996. The results of
operations for the three-month and nine-month periods ended September 30,
1996 are not necessarily indicative of the results to be expected for the
full year. The balance sheet as of December 31, 1995 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, 1995.
2. Inventories
September 30, 1996 December 31, 1995
------------------ -----------------
Raw materials $ 14,497 $ 12,556
Work in process 10,734 5,772
Finished goods 23,412 16,444
------- -------
Total Inventories $ 48,643 $ 34,772
------- -------
------- -------
3. Credit Facilities
During the second quarter of 1996, the Company signed a new credit
agreement (the Agreement) with three domestic banks for unsecured
borrowings totaling $150,000. This Agreement consists of a $70,000 four-
year revolving credit facility for general corporate purposes and an
$80,000 one-year acquisition credit facility. Borrowings under the
Agreement bear interest at the Eurodollar Rate plus 0.30% to 0.70%. The
rate spread is dependent upon the Company's ratio of debt to total
capitalization. In addition, the Company pays a facility fee on unborrowed
funds at rates ranging from 0.08% to 0.175%, depending on the Company's
debt to total capitalization ratio. Under terms of the Agreement, the
Company must meet certain affirmative covenants, including maintaining a
specified total capitalization ratio, interest coverage ratio, cash flow
leverage ratio and tangible net worth. The Company was in compliance with
all covenants and no borrowings were outstanding under the Agreement at
September 30, 1996.
The Company had long-term and short-term borrowings of $7,106 at September
30, 1996. These borrowings are under the credit facilities maintained by
the Company's German subsidiary and are more completely described in the
Company's Annual Report on Form 10-K as of December 31, 1995.
Page 5
<PAGE>
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, 1996,
the contract was approximately 90% complete. At September 30, 1996, no
material change had been made in the estimate of costs to complete the
contract.
5. Earnings Per Share
Primary earnings per share is computed using the weighted average number of
common and common stock equivalent shares outstanding during the periods.
Common stock equivalents include dilutive stock options using the treasury
stock method. Fully diluted earnings per share did not differ
significantly from primary earnings per share in all periods presented.
6. Legal Matters
In April 1996, the Company was named as a potentially responsible party
(PRP) at a site in Zionsville, Indiana. This is the third site at this
location for which the Company has been named a PRP. The Company entered
into a de minimis settlement agreement for the prior two sites and also
believes that it will be a de minimis party at this site. As of August 30,
1996, the Company entered into a de minimis settlement with the U.S.
Environmental Protection Agency in settlement of its liability as a PRP at
the Conservation Chemical Company of Illinois, Inc. site in Gary, Indiana.
In July 1996, the Company also joined the PRP group for the Port Crane, New
York site at which the Company has been named a PRP, but for which it is
seeking a de minimis settlement. The PRP group has entered into a Consent
Order for a removal action at the site to prevent any further
contamination. The Company does not believe the eventual outcome at these
sites will have a material adverse effect on the financial condition of the
Company.
There are no other material changes in the status of the Barth Industries
legal proceeding or any other legal proceeding or environmental matter
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
Page 6
<PAGE>
BMC INDUSTRIES, INC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Third quarter revenues from primary products (excluding equipment and technology
sales) increased $10.0 million or 17% from the third quarter of 1995. Primary
product revenues of the Precision Imaged Products group for the third quarter
increased 16% due primarily to sales of invar, jumbo (30" and larger) and large
(25" to 29") aperture masks, which have higher gross margin percentages than
steel or smaller mask sizes, increasing 23%, 32% and 20%, respectively, over
third quarter 1995 sales. BMC's new high-resolution computer monitor mask line
at the Company's manufacturing facility in Germany substantially increased
volumes and continued to move up the yield curve during the third quarter. The
Company believes that the new high-resolution line will contribute significant
sales in the fourth quarter. Net sales of the Optical Products group increased
20% due to higher sales in all product lines. Sales of high end products
(polycarbonate, progressive, high index and polarizing sunglass lenses)
increased 15% over the same quarter in the prior year. Optical Products
international sales were up 60% over the comparable prior year quarter.
Cost of sales of primary products were 79% of net sales for the third quarter of
1996, compared to 82% in the same period of 1995. The improvement occurred in
both groups and was due primarily to improved sales mix of higher-margin
products and improved yields and manufacturing efficiencies. The Optical
Products group also benefited from the acquisition of plastic lenses from a
lower cost, off-shore manufacturer.
Administrative expenses decreased $0.4 million during the third quarter of 1996
compared to 1995 primarily due to reduced expense related to compensation plans
that are tied to the Company's stock price.
Interest expense, net of interest income, increased $0.3 million due primarily
to reduced cash and increased debt balances which resulted from the Company's
increased capital spending for expansion of the Cortland aperture mask facility.
The provision for income taxes was 33% of pre-tax income in the third quarter of
1996 compared to 39% for the same period in 1995. Foreign earnings, which incur
taxes at rates higher than in the U.S., represented a lower proportion of
earnings in the third quarter of 1996 compared to the same period in 1995.
Also, a reduction in the valuation allowance for deferred tax assets reduced the
1996 rate.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Total revenues from primary products (excluding equipment and technology sales)
for the first nine months of 1996 increased $23.8 million or 13% over the first
nine months of 1995. Primary product revenues of the Precision Imaged
Products group for the first nine months of 1996 increased 13% due
Page 7
<PAGE>
primarily to continued improvement in sales mix toward higher-margin jumbo
masks (30" and larger) and invar color television aperture masks. For the
first nine months of 1996, sales of invar, jumbo and large masks increased
22%, 51% and 14%, respectively, over the comparable 1995 period. Net sales
of the Optical Products group increased 14% due to higher sales in all
product lines. In particular, sales of high end products (polycarbonate,
progressive, high index and polarizing sunglass lenses) increased 15% over
the prior year. Optical Products international sales were up 46% over the
comparable prior year nine month period.
Cost of sales of primary products were 78% of net sales for the first nine
months of 1996, compared to 82% in the same period of 1995. The improvement
occurred throughout the Company and was due primarily to improved sales mix of
higher-margin products and improved yields and manufacturing efficiencies.
Administrative expenses decreased $0.5 million during the first nine months of
1996 compared to 1995 primarily due to reduced expense related to compensation
plans that are tied to the Company's stock price.
Interest expense, net of interest income, increased $0.6 million due primarily
to reduced cash and increased debt balances which resulted from the Company's
increased capital spending for expansion of the Cortland aperture mask facility.
The provision for income taxes was 33% of pre-tax income in the first nine
months of 1996 compared to 37% for the same period in 1995. Foreign earnings,
which incur taxes at higher rates than in the U.S., represented a lower
proportion of earnings in the first nine months of 1996 compared to the same
period in 1995. Also, a reduction in the valuation allowance for deferred tax
assets reduced the 1996 rate.
FINANCIAL POSITION AND LIQUIDITY
Cash and cash equivalent balances decreased $10.6 million and borrowings
increased $7.1 million during the first nine months of 1996, due primarily to
$32.9 million of capital expenditures relating primarily to the expansion of the
Company's aperture mask manufacturing facilities and increased inventory levels,
offset partially by cash generated from earnings. The increased inventory
levels were due primarily to building inventories related to the new computer
monitor high-resolution mask line and increasing inventories in the Optical
Products group to support new product introductions. Working capital was $34.9
million at September 30, 1996 compared to $32.7 million at December 31, 1995.
The current ratio was 1.63 at September 30, 1996, compared to 1.65 at December
31, 1995. The ratio of total liabilities to equity declined to 0.61 at
September 30, 1996 compared to 0.68 at December 31, 1995.
During the second quarter of 1996, the Company signed a $150 million unsecured
credit facility consisting of a $70 million revolving credit facility for
general corporate purposes and an $80 million acquisition credit facility. The
Company expects a significant increase in its capital spending in 1996 due to
approximately $45 million of capital spending relating to the two-line expansion
of the Company's aperture mask manufacturing facility at Cortland, New York.
The revolving credit facility will provide the funds needed for capital spending
related to the Cortland expansion and the Company's new polycarbonate facility
under construction in Ramsey, Minnesota. The acquisition credit facility will
Page 8
<PAGE>
provide immediately available funds in the event the Company encounters a
strategic acquisition opportunity. As of September 30, 1996, the Company had
commitments of approximately $22.4 million related to capital projects, a
majority of which was related to the Cortland expansion.
ENVIRONMENTAL
In April 1996, the Company was named as a potentially responsible party (PRP) at
a site in Zionsville, Indiana. This is the third site at this location for
which the Company has been named a PRP. The Company entered into a de minimis
settlement agreement for the prior two sites and also believes that it will be a
de minimis party at this site. As of August 30, 1996, the Company entered into
a de minimis settlement with the U.S. Environmental Protection Agency in
settlement of its liability as a PRP at the Conservation Chemical Company of
Illinois, Inc. site in Gary, Indiana. In July 1996, the Company also joined the
PRP group for the Port Crane, New York site at which the Company has been named
a PRP, but for which it is seeking a de minimis settlement. The PRP group has
entered into a Consent Order for a removal action at the site to prevent any
further contamination. The Company does not believe the eventual outcome at
these sites will have a material adverse effect on the financial condition of
the Company.
There are no other material changes in the status of the legal proceedings and
environmental matters described in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.
Page 9
<PAGE>
Part II: OTHER INFORMATION
ITEM 1. With regard to legal proceedings and certain environmental matters,
see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on page 9 and Note 6 of the "Notes to
Condensed Consolidated Financial Statements" on page 6.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS PAGE
27. Financial Data Schedule (filed only in electronic format)
99.1 News Release, dated October 17, 1996, announcing the
third quarter 1996 operating results....................... 11
99.2 News Release, dated September 6, 1996, announcing
quarterly dividend......................................... 15
99.3 News Release, dated August 14, 1996, announcing approval
of the new Polycarbonate facility. ........................ 16
(b) REPORTS ON FORM 8-K.
The Company did not file any reports on Form 8-K during the quarter
ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and 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.
/s/ Jeffrey L. Wright
------------------------------------
Jeffrey L. Wright
Corporate Controller
(Principal Accounting Officer)
Dated: November 12, 1996
Page 10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,820
<SECURITIES> 450
<RECEIVABLES> 25,942
<ALLOWANCES> 3,105
<INVENTORY> 48,643
<CURRENT-ASSETS> 90,137
<PP&E> 200,313
<DEPRECIATION> 95,316
<TOTAL-ASSETS> 212,502
<CURRENT-LIABILITIES> 55,275
<BONDS> 0
0
0
<COMMON> 55,613
<OTHER-SE> 76,598
<TOTAL-LIABILITY-AND-EQUITY> 212,502
<SALES> 203,973
<TOTAL-REVENUES> 204,633
<CGS> 158,792
<TOTAL-COSTS> 169,968
<OTHER-EXPENSES> (120)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 436
<INCOME-PRETAX> 34,559
<INCOME-TAX> 11,377
<INCOME-CONTINUING> 23,182
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,182
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0.82
</TABLE>
<PAGE>
CONTACT: Michael P. Hawks (NYSE -- BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC REPORTS RECORD THIRD QUARTER EARNINGS
October 17, 1996 -- Minneapolis, MN -- BMC Industries, Inc. today reported third
quarter net earnings of $7,157,000 or $.25 per share, up 57% from earnings of
$4,548,000 or $.16 per share in the year-earlier period. Third quarter revenues
for primary products (excluding equipment and technology sales) increased 17%
over the prior year quarter.
Net earnings for the first nine months of 1996 totaled $23,182,000 or $.82 per
share. This represented an improvement of $6,463,000 or 39% over the
$16,719,000 or $.59 per share recorded for the first nine months of the prior
year. Revenues from primary products for the first nine months of 1996 were 13%
higher than the same period in the prior year.
Paul B. Burke, BMC's chairman and chief executive officer stated "The third
quarter represents another quarterly earnings record for BMC and is the twenty-
second 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. Very importantly, this was a team effort with all three
divisions contributing to this significant achievement."
The Company's Precision Imaged Products operation (including both the Mask
Operation and Buckbee-Mears St. Paul) posted record third quarter results.
Excluding sales of long-term equipment and technology contracts, third quarter
Precision Imaged Products sales increased 16% over the third quarter of 1995.
More importantly, the profitability of Precision Imaged Products, excluding
equipment and technology contracts, increased 50% when compared to the prior
year quarter. This record performance resulted from a continued sales mix shift
to higher margin products and solid operating gains. Third quarter revenues
from invar, jumbo (30" and larger) and large (25" to 29") aperture masks
increased 23%, 32% and 20%, respectively. Significant manufacturing
improvements were realized at both Mask manufacturing facilities. BMC's new
high-resolution computer monitor mask line at the Company's manufacturing
facility in Germany (BME) substantially increased volumes and continued to move
up the yield curve in the third quarter. Due to the very demanding nature of
high-resolution computer monitor masks, final quality assurance checks permitted
only nominal shipments in the third quarter. The
Page 11
<PAGE>
Company has now commenced, subsequent to the end of the third quarter,
production volume shipments under firm purchase orders which will result in
significant shipments and sales in the fourth quarter. Buckbee-Mears St. Paul
also realized product mix and manufacturing improvements that contributed
significantly toward its 46% increase in third quarter profits over the prior
year.
BMC's Optical Products operation posted record third quarter results as well.
Third quarter sales increased 20% over the year-earlier period, while
profitability increased 29%. Sales growth occurred in each product line and
international sales growth was particularly strong. Sales of high end
products (polycarbonate, progressive, high index and polarizing sunglass
lenses) increased 15% over the same quarter in the prior year. In addition,
the Company continued to realize benefits from its Far East sourcing program
for plastic lenses.
BMC is one of the world's largest manufacturers of aperture masks for color
television tubes 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 12
<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
---------------------------------------------
1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Net sales of primary products $ 68,158 $ 58,189 $ 203,780 $ 179,968
Equipment and technology sales -- 1,014 853 10,216
- ----------------------------------------------------------------------------------------------------
Total Revenues 68,158 59,203 204,633 190,184
- ----------------------------------------------------------------------------------------------------
Operating Costs and Expenses
Cost of sales of primary products 53,840 47,677 158,422 146,787
Cost of equipment and technology sales -- 466 370 6,134
Selling 2,334 2,078 7,451 6,558
Administrative 1,210 1,653 3,725 4,237
- ----------------------------------------------------------------------------------------------------
Total Operating Costs and Expenses 57,384 51,874 169,968 163,716
- ----------------------------------------------------------------------------------------------------
Income from Operations 10,774 7,329 34,665 26,468
- ----------------------------------------------------------------------------------------------------
Other Income and (Expense)
Interest expense (246) (103) (436) (208)
Interest income 60 206 210 604
Other income (expense) 89 7 120 (152)
- ----------------------------------------------------------------------------------------------------
Earnings before Income Taxes 10,677 7,439 34,559 26,712
Income Taxes 3,520 2,891 11,377 9,993
- ----------------------------------------------------------------------------------------------------
Net Earnings $ 7,157 $ 4,548 $ 23,182 $ 16,719
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Earnings Per Share $ 0.25 $ 0.16 $ 0.82 $ 0.59
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Number of Shares Included in Per Share Computation 28,390 28,369 28,346 28,210
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
Page 13
<PAGE>
BMC INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
September 30 December 31
AS SETS 1996 1995
- --------------------------------------------------------------------------------------
<C> <C> <C>
Current Assets
Cash and cash equivalents $ 5,270 $ 15,874
Trade accounts and notes receivable, net of allowances 22,837 23,003
Inventories 48,643 34,772
Deferred income taxes 4,571 3,753
Other current assets 8,816 5,964
- ----------------------------------------------------------------------------------------
Total Current Assets 90,137 83,366
- ----------------------------------------------------------------------------------------
Property, Plant and Equipment 200,313 171,711
Less Accumulated Depreciation 95,316 90,302
-------- --------
Property, Plant and Equipment, Net 104,997 81,409
-------- --------
Deferred Income Taxes 5,879 5,362
Other Assets, Net 11,489 12,195
- ----------------------------------------------------------------------------------------
Total Assets $ 212,502 $ 182,332
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ----------------------------------------------------------------------------------------
Current Liabilities
Short-term borrowings $ 3,139
Accounts payable 20,172 $ 20,408
Income taxes payable 8,892 9,308
Accrued expenses and other current liabilities 23,072 20,920
- ----------------------------------------------------------------------------------------
Total Current Liabilities 55,275 50,636
- ----------------------------------------------------------------------------------------
Long-Term Debt 3,967 26
Other Liabilities 19,551 21,628
Deferred Income Taxes 1,498 1,576
Stockholders' Equity
Common stock 55,613 52,974
Retained earnings 73,121 50,962
Cumulative translation adjustment 4,306 5,749
Other (829) (1,219)
- ----------------------------------------------------------------------------------------
Total Stockholders' Equity 132,211 108,466
- ----------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 212,502 $ 182,332
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
Page 14
<PAGE>
Contact: Michael P. Hawks (NYSE-BMC)
(612)851-6030 FOR IMMEDIATE RELEASE
BMC ANNOUNCES QUARTERLY DIVIDEND
September 6, 1996--Minneapolis, Minnesota--BMC Industries, Inc. today
announced that its Board of Directors has approved a continuation of its
quarterly cash dividend of $.0125 cents per share.
Shareholders of record as of September 18, 1996 will receive a dividend of
$.0125 for each share owned on that date, to be paid on October 2, 1996.
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 15
<PAGE>
Contact: Michael P. Hawks (NYSE -- BMC)
(612) 851-6030 FOR IMMEDIATE RELEASE
BMC ANNOUNCES APPROVAL OF NEW POLYCARBONATE FACILITY
August 14, 1996 -- Minneapolis, Minnesota -- BMC Industries, Inc. today
announced approval by its Board of Directors of plans to construct a new 150,000
square foot facility in Ramsey, Minnesota (a Minneapolis suburb) by its Vision-
Ease Lens subsidiary. BMC anticipates that the new facility will require a
total investment of approximately $10 million, which will be financed through
the use of internally generated cash and bank debt.
This new, state-of-the-art facility will provide Vision-Ease with improved space
for the manufacture of polycarbonate eyewear lenses, centralized distribution
and increased research and development activities. Construction on the new
facility will begin later this year and will be completed during the third
quarter of 1997.
Paul B. Burke, BMC's Chairman and Chief Executive Officer, stated "We are
excited about the opportunities offered to Vision-Ease by a new manufacturing,
distribution and research and development facility. This facility will provide
Vision-Ease with the additional space and layout requirements needed to
implement its advanced polycarbonate manufacturing process. We believe that
this advanced manufacturing process will increase yields and improve
efficiencies. With these improvements, Vision-Ease will enhance its position as
a low-cost producer of high quality polycarbonate eyewear lenses, further
distancing themselves from their competition. We are making this investment
because we believe polycarbonate lenses will continue to be a high growth
segment of the ophthalmic lens market.
"In addition, the achievement of many of our goals for Vision-Ease will require
significant increases in research and development activities. The world class
space provided in this new facility will give Vision-Ease the physical resources
necessary to pursue further improvements and discoveries in manufacturing
processes, new products and new materials, including anti-reflective coated
lenses. We look at this as a significant investment in Vision-Ease's long-term
success."
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BMC Industries, Inc. is one of the world's largest manufacturers of aperture
masks for color television tubes 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".
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