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Brown & Sharpe Manufacturing Company Announces Second Quarter 1999 Results

28 July 1999

Brown & Sharpe Manufacturing Company Announces Second Quarter 1999 Results

    NORTH KINGSTOWN, R.I.--July 27, 1999--Brown & Sharpe Manufacturing Company today announced a net loss for the quarter ended June 30, 1999 of $8.6 million ($.63 per share) on sales of $81.7 million. The results include a previously announced restructuring charge, net of taxes, of $9.2 million ($.68 per share) relating to cost reduction initiatives being implemented in its Measuring Systems business. These results compare to a net income of $2.4 million ($.18 per share) on sales of $85.9 million for the same period in 1998.
    Frank T. Curtin, Brown & Sharpe's Chairman, President, and Chief Executive Officer, said, "Hardware sales declined by 16% compared to the same period last year. Our aftermarket business, however, continues to experience strong growth and is 35% ahead of last year, driven by retrofit activity.
    "We remain cautious on the outlook for the second half of the year because of the continued softening in our Precision Measuring Instruments and smaller Coordinate Measuring Machine businesses. We are continuing to invest in new product development programs while accelerating our cost reduction efforts. The restructuring announced this quarter continues our program of focusing our factories and eliminating overlapping costs and product lines. We are in discussion with our lenders regarding amendments to the covenants in our loan agreements."

    This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of assumptions, risks, and uncertainties that could cause actual results of the Company to differ materially from those matters expressed in or implied by such forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are in some cases beyond the control of the Company and may cause the actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance, or achievements expressed or implied by such forward-looking statements. Additional information regarding this risk factor and uncertainties is detailed from time to time in the Company's SEC filings.

                  BROWN SHARPE MANUFACTURING COMPANY
                      STATEMENT OF INCOME (LOSS)
             (Dollars in Thousands Except Per Share Data)

                               For the Quarter     For the Six Months
                                Ended June 30,        Ended June 30,
                              1999       1998       1999          1998
                                     Restated                Restated
Net sales                $  81,652  $  85,898  $ 164,066    $ 169,354
Cost of sales               56,940     58,068    118,183      113,664
Research and
 development                 2,253      2,907      4,775        5,653
Selling, general
 and administrative
 expense                    22,601     20,930     44,151       42,219
Restructuring charges        6,440          0     17,202            0
Operating (loss) profit     (6,582)     3,993    (20,245)       7,818
Interest expense             1,625      1,458      3,036        2,926
Other income
 (expense), net                (76)       580         34          542
(Loss) income before
 income taxes               (8,283)     3,115    (23,247)       5,434
Income tax provision           271        723        354        1,260
Net (loss) income        ($  8,554) $   2,392  ($ 23,601)   $   4,174
 Net (loss) income
  per common share:

    Basic                ($   0.63) $    0.18  ($   1.75)   $    0.31
    Diluted              ($   0.63) $    0.18  ($   1.75)   $    0.31