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Non-Tech : BMC Industries
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To: margaret tasset who wrote ()6/12/1998 6:11:00 PM
From: jackhach  Read Replies (1) of 359
 
The optical is where the money seems to be.

TV masks are lousy, although supply is very slowly working itself down. The money is in the larger, hi-end lines -- but, biz there has been flat worldwide. TV is far too competitive.

Large computer monitors (17"+) are coming down in price. Retailers are selling better-end 17"+ for under $400.00. Although supply here is truly slowing up -- much faster then TV parts despite slower PC sales. The idling of plants by BMC was necessary and smart. BMC had tripled its sales of PC monitors in 1997. They got too aggressive in manufacturing and now have built up a large supply needing to be worked down (some, I'm told won't sell at all.)

The good news is that BMC has reduced costs, has made some unpopular but sober moves.

They did pay too much (at first glance) for Orca, however, strong rumors have been surfacing that there is more to that deal then meets the eye (no pun intended.) Monsanto got a good price, but I'm certain BMC bought more then a plant. There was an extra $15 to $20 million paid for something??? Not sure what... That is money BMC could have surely needed.

The lens division represented 42% of revenues while only contributing 30% of sales ($93.5 million in sales / $14.9 million in revenue.) Margins are about 16% -- not bad considering the posture of BMC overall. Whereas margins on imaging was under 10% and certainly falling.

It is apparent that BMC is moving away from TV despite comments to the differ in the annual report. The company must find higher-margin niche(s) very quickly.

-JH
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