Brush Wellman Reports Strong Sales and Lower Earnings for the Third Quarter 1999.

CLEVELAND--(BUSINESS WIRE)--Oct. 27, 1999--

Brush Wellman Inc. (NYSE:BW) today reported an 18% increase in third quarter sales to $113.8 million, and a net loss of $0.6 million.

Earnings were a loss of $0.03 per share. This compares to sales of $96.2 million and net income of $0.6 million in the third quarter of 1998, excluding a special charge, after tax, of $0.5 million. Diluted earnings for the third quarter of 1998 were $0.03 per share excluding the special charge.

Third quarter operating earnings were negatively affected by a longer than expected annual maintenance shutdown of the Alloy operations in the month of July, a slower start up after the shutdown and costs associated with additional resources to resolve equipment reliability issues in the recently completed strip expansion. These production issues increased costs and limited output in the quarter affecting the Company's ability to meet market demand.

Overall third quarter earnings were positively affected by a reduction in the year-to-date tax rate due to the lower earnings, tax credits and a reduction in pension expense.

For the first nine months of 1999, the Company achieved record sales of $335.6 million, a 7% increase over sales of $313.4 million during the first nine months of last year. Net income during the first nine months was $5.2 million, or $0.32 per share diluted, versus $9.3 million and earnings per share of $0.55 cents in 1998 (excluding a pre-tax charge taken in the second and third quarters of 1998 totaling $22.5 million).

Segment Analysis:

Metal Systems Group

-------------------

The Metal Systems Group consists of Alloy Products, Technical Materials, Inc. (TMI) and Beryllium Products.

Metal Systems Group sales grew 10% to $75.1 million from $68.1 million in the third quarter of 1998. Year-to-date sales of $228.6 million were flat as compared to 1998. Operating profit/(loss) for the quarter was ($0.7) million as compared to $3.9 million in 1998. For the first nine months, operating profit decreased to $12.7 million from $25.8 in 1998.

Alloy Products' sales increased, both domestically and overseas, in the third quarter of the year due to continued strong demand for strip products in the telecommunications, automotive electronics and computer markets. The strength in strip products was partially offset by weakness in bulk product sales, due to softness in the oil and gas and aerospace markets. Sales were down slightly for the first nine months as compared to 1998.

Throughout the first nine months, Alloy Products' earnings were negatively affected by strip product capacity constraints, higher startup costs in the new strip mill and development costs related to the new spinodal materials at the Brush Engineered Bronze facility in Lorain, Ohio. The demand for strip products continued to outpace the ramp up of the new strip mill, especially during the third quarter. Additional external and internal resources were committed to the new strip mill to accelerate the ramp up.

TMI sales and profits for the third quarter and first nine months of 1999 increased significantly over the same period last year due to strong demand from automotive electronics and telecommunication product applications. TMI is also beginning to experience increased demand for its precious metal plated products.

Beryllium Products' sales decreased in the third quarter and first nine months of 1999 compared to the same periods last year. The reduction in sales is due to delays in U.S. and European defense procurement including, defense programs in optics, satellite and defense electronic applications. Profits were flat in the third quarter but down year to date as compared to 1998.

Microelectronics Group

----------------------

The Microelectronics Group includes Williams Advanced Materials Inc. (WAM) and Electronic Products.

Microelectronics Group sales grew 38% to $36.3 million compared with $26.2 million in the third quarter of 1998. Year-to-date sales grew 26% to $100.9 million from $80.1 million in 1998. Operating profit was $2.9 million for the third quarter and $7.8 million year to date versus $1.5 million and $1.3 million respectively for 1998.

WAM continues to display double-digit sales and earnings growth in 1999. This growth has been fueled by strong demand for vapor deposition targets from the optical media and decorative and performance film markets. Exceptional growth also continues for low-cost frame lids for telecommunications applications. These low-cost lid sales have nearly doubled versus 1998. In addition, the successful introduction of specialty alloys, including high-purity nickel alloys, has also contributed to WAM's sales growth.

Sales and earnings for Electronic Products (formerly Ceramics) were up for the third quarter and nine months of 1999 compared to the same period last year due to strong demand for wireless telecommunications applications and yield and productivity improvements.

Chairman's Comments

-------------------

Commenting on the results, Gordon Harnett, Chairman, President and CEO, stated, "I am pleased to report record sales for the first nine months of 1999. We have continued to experience strong demand for our products from automotive electronics, telecommunications, computers, and optical and performance film product applications.

"We remain committed to bringing the new strip mill up and increasing our output as soon as possible to meet our customer demand for strip products. The additional external and internal resources we have focused on the new strip mill have begun to increase equipment reliability and have added capacity. We have made progress in our ability to ship strip product directly from our Elmore, Ohio facility, which also increases our overall capacity.

"Looking forward, we expect the strong sales demand to continue through the fourth quarter and into the year 2000. We will continue to commit the appropriate resources to achieve the increased capacity and cost efficiencies needed to be competitive and to meet future demand. It is anticipated that earnings for the fourth quarter of 1999 will be similar to the third quarter of this year. We look forward to continued progress with the new strip mill and an improved earnings outlook for 2000."

Forward Looking Statements

--------------------------

Any forward-looking statements in this announcement are based on current expectations. The Company's performance may differ from that contemplated by the forward-looking statements as a result of a variety of factors including the global and domestic economy, manufacturing yields and operating performances at the Company's various facilities, changes in product mix, the timely and successful completion of pending capital expansions, tax rates and exchange rates.

Brush Wellman, with headquarters in Cleveland, Ohio, is a manufacturer of engineered materials. The Company and its subsidiaries supply worldwide markets with Beryllium Products, Alloy Products, Electronic Products, Precious Metal Products and Engineered Material Systems. -0-

Consolidated Statements of Income
(Unaudited)

                      Third Quarter Ended       Nine Months Ended
(Dollars in thousands -------------------      --------------------
except share and       Oct. 1,    Oct. 2,      Oct. 1,       Oct. 2
per share amounts)      1999       1998         1999          1998
----------------------------------------------------------------------

Net sales         $    113,794 $     96,240 $    335,628 $    313,414
  Cost of sales         94,981       76,824      267,557      248,454
                  ------------ ------------ ------------ ------------
Gross Margin            18,813       19,416       68,071       64,960
  Selling,
   administrative
   and general
   expenses             17,298       15,422       52,919       48,203
  Research and
   development
   expenses              2,191        2,185        6,207        6,357
  Other-net                259        1,318          287       19,979
                  ------------ ------------ ------------ ------------
Operating Profit          (935)         491        8,658       (9,579)
  Interest expense         913          352        2,697          760
                  ------------ ------------ ------------ ------------
Income before
 income taxes           (1,848)         139        5,961      (10,339)

  Income taxes          (1,296)          41          793       (3,515)
                  ------------ ------------ ------------ ------------

Net Income        $       (552)$         98 $      5,168 $     (6,824)
                  ------------ ------------ ------------ ------------
                  ------------ ------------ ------------ ------------

Per Share of Common
 Stock: Basic     $      (0.03)$       0.01 $       0.32 $      (0.42)

Weighted average
 number of
 common shares
 outstanding        16,200,229   16,197,162   16,197,158   16,295,836


Per Share of Common
 Stock: Diluted   $      (0.03)$       0.01 $       0.32 $      (0.42)

Weighted average
 number of
 common shares
 outstanding        16,200,229   16,272,126   16,261,878   16,295,836


Cash dividends per
 common share     $       0.12 $       0.12 $       0.36 $       0.36




Consolidated Balance Sheets

                                               Oct. 1,      Dec. 31,
(Dollars in thousands)                           1999         1998
----------------------------------------------------------------------
Assets
Current Assets
   Cash and cash equivalents                   $  5,060     $  1,938
   Accounts receivable                           80,017       62,181
   Inventories                                  110,373      103,108
   Prepaid expenses                               6,212        7,210
   Deferred income taxes                         23,632       20,087
                                               --------     --------
        Total Current Assets                    225,294      194,524

Other Assets                                     43,296       44,697

Property, Plant and Equipment                   416,335      421,467
   Less allowances for depreciation,
     depletion and impairment                   260,892      256,998
                                               --------     --------
                                                155,443      164,469

                                               --------     --------
                                               $424,033     $403,690
                                               --------     --------
                                               --------     --------

Liabilities and Shareholders' Equity
Current Liabilities
   Short-term debt                             $ 33,216     $ 45,587
   Accounts payable                              31,293       15,156
   Other liabilities and accrued
     items                                       29,455       26,482
   Dividends payable                              1,959        1,966
   Income taxes                                   6,203        4,341
                                               --------     --------
        Total Current Liabilities               102,126       93,532

Other Long-Term Liabilities                       9,466       10,507
Retirement and Post-Employment Benefits          39,954       39,448
Long-Term Debt                                   42,305       32,105

Deferred Income Taxes                             9,025        6,287

Shareholders' Equity                            221,157      221,811
                                               --------     --------
                                               $424,033     $403,690
                                               --------     --------
                                               --------     --------




Consolidated Statements of Cash Flows
                                        Third Quarter Ended
                                         Oct. 1,     Oct. 2,
(Dollars in thousands)                    1999        1998
----------------------------------------------------------------------

Net Income                              $  5,168    ($ 6,824)
Adjustments to Reconcile
 Net Income to Net Cash
 Provided From Operating
 Activities:
  Depreciation, depletion
   and amortization                       16,645      17,334
  Amortization of mine development         4,408       2,792
  Impairment of fixed assets
   and related intangibles                  --        14,273
  Decrease (Increase) in
   accounts receivable                   (17,448)       (594)
  Decrease (Increase) in inventory        (7,454)     (7,842)
  Decrease (Increase) in prepaid
   and other current assets               (2,665)     (1,735)
  Increase (Decrease) in accounts
   payable and accrued expenses           19,459      (1,727)
  Increase (Decrease) in interest
   and taxes payable                       2,251      (1,538)
  Increase (Decrease) in deferred
   income tax                              2,738      (3,155)
  Increase (Decrease) in other
   long-term liabilities                    (541)       (718)
  Other - net                              1,027         458
                                        --------    --------
              Net Cash Provided From
               Operating Activities       23,588      10,724


Cash Flows from Investing Activities:
  Payments for purchase of property,
   plant and equipment                   (11,556)    (29,267)
  Payments for mine development             (261)       (294)
  Proceeds from (Payments for)
   other investments                         141     (12,003)
                                        --------    --------
              Net Cash Provided From
               (Used in) Investing
               Activities                (11,676)    (41,564)

Cash Flows from Financing Activities:
  Proceeds from issuance of
   short-term debt                           158      38,254
  Repayment of short-term debt           (13,429)       (528)
  Proceeds from issuance of
   long-term debt                         17,200        --
  Repayment of long-term debt             (7,000)       (800)
  Issuance of Common Stock under
   stock option plans                        171       3,433
  Purchase of Common Stock for treasury     --        (5,390)
  Payments of dividends                   (5,854)     (7,837)
                                        --------    --------
              Net Cash Provided From
              (Used in) Financing
              Activities                  (8,754)     27,132
Effects of Exchange Rate Changes             (36)        (48)
                                        --------    --------
              Net Change in Cash and
               Cash Equivalents            3,122      (3,756)
              Cash and Cash Equivalents
               at Beginning of Period      1,938       7,170
                                        --------    --------
              Cash and Cash Equivalents
               at End of Period            5,060       3,414
                                        --------    --------
                                        --------    --------



                          Brush Wellman Inc.

                          Digest of Earnings

                            October 1, 1999


                                   1999             1998
                              --------------    -------------

Third Quarter

   Net Sales                    $113,794,000      $96,240,000


   Net Income                      ($552,000)         $98,000


   Share Earnings  - Basic            ($0.03)           $0.01

   Average Shares - Basic         16,200,229       16,197,162

   Share Earnings  - Diluted          ($0.03)           $0.01

   Average Shares - Diluted       16,200,229       16,272,126


Year - to - Date

   Net Sales                    $335,628,000     $313,414,000


   Net Income                     $5,168,000      ($6,824,000)


   Share Earnings  - Basic             $0.32           ($0.42)

   Average Shares - Basic         16,197,158       16,295,836

   Share Earnings  - Diluted           $0.32           ($0.42)

   Average Shares - Diluted       16,261,878       16,295,836