CMC Industries, Inc. Announces First Quarter Fiscal 1999 Results.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 11, 1998--CMC Industries, Inc. (Nasdaq:CMCI) today announced its operating results for the first quarter of fiscal 1999 ended October 31, 1998.

For the first quarter of fiscal 1999, the Company's net sales were $73,739,000, as compared to net sales of $90,626,000 for the same period of the prior year. Net income for the first quarter of 1999 was a loss of $1,981,000, or $0.26 per share, as compared to a net gain of $1,290,000, or $0.18 per share, for the first quarter of fiscal 1998. The Company attributed the decline in results to lower than expected shipments to a computer peripheral customer and higher than expected start-up costs for certain new customer relationships.

"We are clearly disappointed with the financial results for our first quarter of fiscal year 1999," commented Matthew G. Landa, President and Chief Executive Officer of CMC. "Specifically, the quarter was adversely affected by two factors: CMC maintained a larger than optimal cost structure during the first quarter in expectation of higher customer shipments, and the Company incurred greater than expected costs associated with multiple new product launches. In response, the Company has taken substantial actions to bring costs more in line with ongoing and expected future production levels."

"Despite these issues the quarter was highlighted by a sequential revenue increase of 15%, the addition of three new communications customers and significant improvements in asset management, increasing inventory turns to 12.0 and lowering accounts receivable days to 46, a record for the Company."

"Looking ahead, we believe that the combination of our cost reduction efforts and improved business mix will lead to improved performance in the near term future," he concluded.

Headquartered in Santa Clara, Calif., CMC Industries is a leading provider of electronics manufacturing services to original equipment manufacturers in the telecommunications, computer and electronics industries. The Company has operations in Corinth, Miss.; Santa Clara, Calif.; Hermosillo, Mexico; Huntsville, Ala. and Taipei, Taiwan. For further information, visit CMC's home page at http//www.cmcmfg.com.

The matters set forth in this news release may contain forward looking statements. Actual results may differ materially from those described herein and are dependent on certain risks and uncertainties including, but not limited to, the timing and magnitude of orders from customers with projects currently in development as well as continued orders and growth in orders from customers already in volume production, the ability of the Company to accurately forecast the timing and magnitude of future customer orders and appropriately adjust its expenditures in respect thereof, changes in customer mix and volume, competition, component availability, inventory obsolescence, business conditions in the general economy as well as the industries in which the Company and the Company's customers compete and other risk factors such as those detailed in the Company's filings with the Securities and Exchange Commission. -0-

                         CMC Industries, Inc.
              Condensed Consolidated Statements of Income
                 (In thousands, except per share data)

                              UNAUDITED

                                          Three Months Ended
                                              October 31,
                                        1998              1997

Net sales                            $ 73,739          $ 90,626
Cost of sales                          73,124            85,068

Gross profit                              615             5,558

Selling, general
 and administrative expenses            3,370             3,099

Operating income (loss)                (2,755)            2,459

Interest expense, net                     415               395

Income (loss)
 before income taxes                   (3,170)            2,064

Provision (benefit)
 for income taxes                      (1,189)              774

Net income (loss)                    $ (1,981)         $  1,290

Net income (loss)
 per common share                    $  (0.26)         $   0.18

Weighted average
 shares outstanding                     7,567             7,355


                         CMC Industries, Inc.
                 Condensed Consolidated Balance Sheets
                            (In thousands)

                               UNAUDITED

                                       October 31,       July 31,
                                          1998             1998
ASSETS

Current assets
 Cash and cash equivalents              $  4,700         $  5,281
 Accounts and
  notes receivable, net                   38,023           36,960
 Inventories                              28,348           20,275
 Other current assets                      1,382            2,000

 Total current assets                     72,453           64,516

Plant and equipment, net                  19,637           18,790
Other assets                              11,196           11,299
                                        --------         --------
                                        $103,286         $ 94,605

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
 Short-term debt                        $ 17,419         $ 20,257
 Accounts payable
  and other current liabilities           41,497           28,666

 Total current liabilities                58,916           48,923

Long-term debt and
 other noncurrent liabilities              4,077            3,737

 Total liabilities                        62,993           52,660

Stockholders' equity                      40,293           41,945
                                        --------         --------
                                        $103,286         $ 94,605