Bush Industries Reports Fourth Quarter/Year End Results; Earnings up 59%, Including Gain From Asset Sale.

Business Editors

JAMESTOWN, N.Y.--(BUSINESS WIRE)--Feb. 20, 2001

Bush Industries, Inc. (NYSE:BSH), the eighth largest U.S. furniture manufacturer and a leader in surface technologies, today reported results for the fourth quarter and fiscal year ended Dec. 30, 2000.

Fourth quarter earnings rose approximately 59 percent to $9,096,000, or 65 cents per diluted share, including a gain from the sale of the assets of its subsidiary, TASC (The Assembly & Service Co.) to N.P.S. (National Products Services, Inc.). This compares to earnings in the same period last year of $5,736,000, or 40 cents per diluted share. The after-tax gain on the sale was approximately $2,258,000 ($3,618,000 pre-tax) or 16 cents per diluted share. Net sales were $118,033,000, compared with $123,429,000 for the same quarter a year ago, a decrease of 4.4 percent.

For the full year 2000, earnings, including the after-tax gain on the sale of its subsidiary, were $22,777,000, or $1.60 per diluted share. This compares with earnings in the same period a year ago of $5,762,000, or 40 cents per diluted share, which included an after-tax restructuring charge of approximately $6,533,000 ($9,672,000 pre-tax) or 45 cents per diluted share. Sales for 2000 rose to $451,197,000, from 1999 sales of $441,706,000, an increase of approximately 2.1 percent.

"In the fourth quarter, the diversified business model that we have been developing for several years began to come to fruition," said Paul Bush, chairman and president. "Our North American furniture operations, as well as our Rohr-Bush subsidiary in Europe, both produce RTA (ready-to-assemble) products for home office and home entertainment, and installation-ready commercial office products. Our global surface technology segment specializes in bringing fashion to many different product categories, such as personal use electronics, sporting goods and automotive interiors, through decorated surfaces. Another advantage of our diversification - the ability to leverage our marketing strengths, R & D investment, product design, and our operational infrastructure across all business units - resulted in improved profitability in the fourth quarter.

"While sales declined in the fourth quarter in the North American RTA furniture markets due to general softening of the economy and resulting reduction in inventory by our retail customers, we achieved sales growth in all other categories," Bush continued. "The increase in sales in our other categories positively impacted net earnings, thereby offsetting the lower sales and operating levels in our North American furniture operations.

"During the fourth quarter, the company concluded two transactions," Bush went on. "We acquired the remaining 49% interest in Rohr-Bush GmbH & Co. In addition, we completed the merger of operations and sale of assets of our subsidiary, TASC (The Assembly & Service Co.) with N.P.S. (National Products Services, Inc.) in an all-stock transaction. The Rohr-Bush transaction cements our commitment to building a solid presence in Europe, and to supporting our North American customers on a global basis. The TASC transaction will create a best-in-class store merchandising and on-site assembly service for our North American customers."

During the quarter, Bush reduced its bank debt by approximately $6.0 million. The debt reduction is attributable to overall improvement in operations and a planned decrease in inventories. The inventory reduction attained in the fourth quarter is expected to continue throughout the first half of 2001.

"On a year-over-year basis, our planned production levels necessary to support the inventory reductions will decrease approximately 35 percent thereby impacting our net earnings by approximately 30 cents in the first half of 2001," Paul Bush said. "The capital investment made in furniture in 2000 and planned for 2001 will significantly increase both our capacity and technical capability, as well as being integral to our diversification strategy into commercial office and higher-end home furnishings. These capital investments assure customer service with lower inventory levels and support future growth with minimum investment. In 2001, capital investments in the surface technology segment are being planned to double our capacity and technical capability on a worldwide basis. We will continue to invest in this segment as necessary to support the anticipated high growth for 2001 and future years. Total capital expenditures planned for 2001 are in the range of $20 to $25 million, which is approximately our level of depreciation.

"Looking at sales and earnings for 2001, we expect similar sales trends as the fourth quarter with approximately 60 percent growth in technology, 30 percent growth in furniture for Europe and North America in commercial office," Bush continued. "Offsetting the growth in these product categories will be approximately a 15 percent decline in shipments of our North American ready-to-assemble furniture products. The projected decline, we believe, will be a continuation of the unsettled economic climate and inventory reductions by our customers. Based on this outlook, we anticipate that total consolidated net sales for 2001 will rise approximately 3 percent from 2000. Likewise, earnings for 2001 are expected to be in the same range as 2000 (exclusive of the TASC gain), with the surface technology and the furniture segments each contributing approximately 50 percent. We believe that the decline in sales for 2001 in the RTA furniture category for North America, coupled with the reduction in operating levels, will impact furniture segment earnings more heavily during the first half of the year. However, overall we expect consolidated earnings in the first half to be the same on a year-over-year basis. For the second half, earnings in the fourth quarter and third quarter are anticipated to be approximately 60 percent and 40 percent of second-half earnings respectively, with the overall second half total earnings expected to be equal to 2000 (exclusive of the TASC gain). Our consolidated gross margins, S. G. & A expense and interest expense are expected to be in the same range as 2000. Our tax rate for 2001 is estimated to be approximately 2 percentage points higher due to a different mix of state tax rates. As we approach the latter part of the year, sales and production levels for North American RTA furniture are anticipated to return to more normal levels."

BUSH INDUSTRIES, INC. AND SUBSIDIARIES
Financial Highlights

      The following data sets forth certain consolidated statement of
earnings information for the three months and the full year periods as
indicated:

                      For the Three Months             For the Year
                             Ended                        Ended
                     12/30/00     01/01/00         12/30/00  01/01/00
                     (In thousands, except shares and per share data)

Net Sales            $118,033     $123,429         $451,197   $441,706
Cost and Expenses:
Cost of Sales          78,556       85,536          307,686    309,794
General, Selling and
 Administrative        25,180       25,639           97,930    100,954
Restructuring Cost        -0-          -0-              -0-      9,672
Interest Expense        3,184        2,621           11,890      9,430
                      106,920      113,796          417,506    429,850

Gain on Sale of TASC    3,618          -0-            3,618        -0-

Earnings Before
 Income Taxes          14,731        9,633           37,309     11,856

Income Taxes            5,635        3,897           14,532      6,094

Net Earnings            9,096        5,736           22,777      5,762

Earnings Per Share
Basic                    $.67         $.41            $1.66       $.42
Diluted                  $.65         $.40            $1.60       $.40

Weighted Average
 Shares Outstanding
Basic              13,624,605   13,879,606      13,680,629  13,878,060
Diluted            13,991,536   14,491,387      14,209,311  14,412,660

Other Sales and Earnings
 Information (In Thousands):

                      For the Three Months             For the Year
                             Ended                        Ended
                     12/30/00     01/01/00         12/30/00  01/01/00

Net Sales:
Furniture            $105,800     $120,034         $419,740   $426,442
Surface Technologies   12,233        3,395           31,457     15,264
Consolidated Net
 Sales                118,033      123,429          451,197    441,706

Earnings Before
 Income Taxes:
Furniture Without
 Restructuring          6,708       10,123           24,655     20,591
Furniture Restructuring   -0-          -0-              -0-    (9,672)
Surface Technologies    4,405         (490)           9,036        937
  Gain on Sale of TASC  3,618          -0-            3,618        -0-

Consolidated Earnings
 Before Income Taxes   14,731        9,633           37,309     11,856

Certain Consolidated Balance
 Sheet Data (In Thousands):

                                               12/30/00      01/01/00

Cash and Cash Equivalents                        $1,225       $2,704
Trade Receivables                                38,110       34,585
Inventories                                      74,838       55,681
Total Current Assets                            123,563      104,326
Property, Plant & Equipment (Net)               213,619      198,300
Total Assets                                    366,551      329,581

Current Liabilities                              67,327       63,870
Long-Term Debt                                  140,376      124,765
Total Liabilities                               224,841      205,002

Stockholders' Equity                            141,710      124,579

Total Liabilities and Stockholders' Equity      366,551      329,581

      Estimated Supplemental Information on Future Operations (in
thousands) Estimated Net Sales Levels by Segment or Product Category
(estimates):

Segment or Product                                    Total  Reference
Category           Qtr. #1  Qtr. #2  Qtr. #3  Qtr. #4  2001  2000 yr.

Installation-Ready
 Commercial Office     21         21       24       28    94     73
Home Office-Home
 Entertainment-N.A.
 RTA                   56         52       64       73   245    289
Rohr-Bush - Europe     16         19       14       25    74     58
Total Furniture
 Sales (Segment)       93         92      102      126   413    420
Bush Surface
 Technologies
 (Segment)             12         12       11       15    50     31
Total Consolidated Net
 Sales (Estimates)    105        104      113      141   463    451
                   (13.9%)      (.8%)    +5.6%  +19.5%  +2.7%

Comments on sales projections:

-- Installation-ready commercial office product in North America is a major
opportunity for Bush. Significant product introductions are being planned
across all our distribution channels for 2001.

-- Step-up RTA home gallery programs in North America are viewed as a long-term
sales growth category because of the continuing formation of home offices
despite recent declines of PC sales.

-- Step-up RTA home office and entertainment in Europe is considered an
excellent growth category supported by anticipated double-digit growth in PC
and TV sales.

-- Decorative surfaces, especially on personal-use electronics, is a high
growth opportunity for Bush Surface Technologies because of the increase in
demand for fashion in products such as: cellphones, PDAs and laptop computers.
In addition to the OEM sales requirements, decorative products will be sold
through the retail channel using the Bush 180(TM) brand name.

Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Forward-looking statements include statements regarding the intent, belief, projected or current expectations of the Company or its Officers (including statements preceded by, followed by or including forward-looking terminology such as "may," "will," "should," "believe," "expect," "anticipate," "estimate," "continue" or similar expressions or comparable terminology), with respect to various matters. The Company cannot guarantee future results, levels of activity, performance or achievements. Factors that could cause or contribute to such differences include, but are not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices, and other factors discussed in the Company's filings with the Securities and Exchange Commission (the "SEC"). Copies of the Company's SEC filings are available from the SEC or may be obtained upon request from the Company. The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.