BMC Industries Announces Actions in Response To Ongoing Aperture Mask Market Uncertainty.

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--June 27, 2003

Company to Realign Aperture Mask Production in Cortland, NY;

William Blair & Co. Hired to Evaluate Strategic Alternatives;

NYSE advises of Non-Compliance with Continued Listing Standards

BMC Industries, Inc. (NYSE:BMM) today announced that it is responding to the intensely competitive market conditions in its aperture mask business by taking immediate action to contract the operations of its Buckbee-Mears group into its existing Cortland, NY facility.

"We are taking decisive action to restructure our operations in order to compete head-to-head in our markets," said Douglas C. Hepper, chairman and chief executive officer of BMC. "BMC's board has acted to protect the company's financial position in response to projections of significant negative cash flow from the German mask operations. In taking these actions, we remain committed to meeting the needs of our customers and are putting into place a new organization within Europe to service customers of both the Mask and Optical Products businesses. This was a necessary but difficult decision, and we will work hard to make the transition as seamless as possible for our customers."

BMC also plans to conduct a structured shutdown of its facility in Tatabanya, Hungary, which currently performs inspection and other services for the Buckbee-Mears group and the company's Optical Products group.

In support of BMC's decision to house its Buckbee-Mears operations in Cortland, BMC will receive an economic incentive package from a combination of federal, New York State and local sources. This package was developed through the joint efforts of New York Governor George Pataki, U.S. Senator Charles Schumer and U.S. Congressman Sherwood Boehlert, New York State Senator James Seward, New York State Assemblywoman Barbara Lifton, the Cortland County Industrial Agency, the Cortland County Business Development Corporation, Niagara Mohawk and the City of Cortland.

The realignment of business operations will affect the Optical Products group in Europe due to BMC's current holding company structure in Europe. The Optical Products group expects this realignment to have minimal impact on its ability to service lens customers. The group's US-based operations will not be affected by the realignment.

Approximately 375 salaried and hourly employees of the Buckbee-Mears group in Europe will be impacted by the actions announced today. BMC is working closely with its advisors and appropriate governmental authorities in Germany and Hungary to operate strictly in compliance with its obligations to employees and others during this process. The company expects to take an estimated pre-tax restructuring charge in the range of $22 million to $27 million in the second quarter of 2003.

The company continues to expect a loss from consolidated operations for the fiscal year ending December 31, 2003. Dramatic changes in the market dynamics of the global mask market, in particular a shifting of production to Asia from the company's home markets in the U.S. and Europe, have intensified competition. This weakness in the mask market, together with general market softness in the lens industry, will likely affect the company's ability to achieve compliance with certain covenants under its credit facility. BMC is in discussions with its banks in order to obtain a waiver or other relief from any resulting default.

BMC also announced today that its board of directors has retained William Blair & Company, LLC, to assist the board in the evaluation of all available strategic alternatives, including new financing alternatives, potential asset sales, and opportunities for raising additional capital.

Additionally, BMC announced that it has been advised by the New York Stock Exchange ("NYSE") that the company has fallen below the NYSE's continued listing criteria relating to minimum share price. The NYSE requires that the company's stock trade at an average minimum share price of $1.00 over a 30-day-trading period. The company is in discussions with the NYSE to obtain a period of time of up to six months to bring its average share price back above $1.00.

About BMC Industries

BMC Industries, founded in 1907, comprises two business segments: Buckbee-Mears and Optical Products. The Buckbee-Mears group offers a range of services and manufacturing capabilities to meet the most demanding precision metal manufacturing needs. The group is a leading producer of a variety of precision photo-etched and electroformed components that require fine features and tight tolerances. The group is also the only North American manufacturer of aperture masks, a key component in color television picture tubes.

The Optical Products group, operating under the Vision-Ease Lens trade name, is a leading designer, manufacturer and distributor of polycarbonate, glass and plastic eyewear lenses. Vision-Ease is a technology and a market share leader in the polycarbonate lens segment of the market. Polycarbonate lenses are thinner and lighter than lenses made of other materials, while providing inherent ultraviolet (UV) filtering and impact resistant characteristics.

BMC Industries, Inc. is listed on the New York Stock Exchange under the ticker symbol "BMM." For more information about BMC Industries, Inc., visit the Company's Web site at www.bmcind.com.

Safe Harbor for Forward-Looking Statements

This news release contains various "Forward-Looking Statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are intended to be covered by the safe harbors created thereby. Statements made in this news release that are not statements of historical facts, including statements regarding future performance, and our ability to obtain relief if we breach covenants under our credit agreement, are Forward-Looking Statements. Forward-Looking Statements may be identified by the use of words such as "anticipates", "estimates", "expects", "forecasts", "projects", "intends", "plans", "predicts", and similar expressions. Forward-Looking Statements are subject to a number of risks and uncertainties that could cause, and in certain instances have caused, actual results or outcomes to differ materially from those projected, including, among others, our ability to achieve compliance with covenants under our credit agreement and to obtain waivers from our lenders in the event of default; ability to manage working capital and align costs with market conditions; ability to achieve higher yields at Vision-Ease; ability to reduce inventories while maintaining consistently high customer service levels and product fill rates; ability to increase sales of products at both Vision-Ease and Buckbee-Mears, in particular our ability to replace lost NAFTA and European aperture mask sales with sales in Asia and other areas of the world; further aperture mask price declines; slowdown in growth of, or price reductions in, high-end optical lens products; fluctuations in currency exchange rates; rising raw material costs; ability to execute the restructuring of our European operations; ability to develop new products need to grow within our markets; ongoing economic uncertainty and the affect of a continuing conflict in the Middle East or other conflict on the company's operations; the ability to generate sufficient cash flow to meet debt service obligations and availability of borrowing capacity to the company going forward; the ability to meet future financial covenants related to, and the ability to negotiate financing arrangements in addition to, or in replacement of, our existing credit facilities. These and other risks and uncertainties are discussed in further detail in BMC's Annual Report and Form 10-K for the year ended December 31, 2002 and other documents filed with the Securities and Exchange Commission.