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Brown & Sharpe Announces Second Quarter Earnings

2 August 2000

Brown & Sharpe Announces Second Quarter Earnings

    NORTH KINGSTOWN, R.I. - Brown & Sharpe Manufacturing Company today announced a net loss for the second quarter of 2000 of $15.3 million ($1.11 per share) on sales of $70.6 million. This compared to a net loss, including a restructuring charge of $9.5 million, of $8.6 million ($.63 per share) on sales of $81.7 million for the same period in 1999. The 2000 net loss includes nonrecurring charges amounting to $11.8 million relating to asset write-offs for its Electronics Division, which will be disposed of later in 2000, as well as fees related to the Company's refinancing efforts.

    Sales in the second quarter of 2000 decreased $9.1 million and $1.8 million for the Measuring Systems ("MS") and Precision Measuring Instruments ("PMI") Divisions, respectively, compared with the same quarter in 1999. $3.7 million of the decrease in sales is due to the effect of foreign currency translation. MS sales in 2000, after adjusting for the effect of foreign currency, are 11% lower than 1999 due to lower sales in the Aftermarket Services Business that was offset slightly by increased machine sales. A significant portion of the lower PMI sales was due to the effect of foreign currency translation.

    Kenneth N. Kermes, Brown & Sharpe's President and Chief Executive Officer said, "We are encouraged by the response to the Board of Directors' decision to pursue all strategic alternatives to enhance shareholder value. We are moving aggressively with the assistance of Chase Securities Inc. to identify a high-priority path to the resolution of our capital structure issues."

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

                                  For the               For the 
                               Quarter Ended       Six Months Ended 
                                  June 30,              June 30
                              2000       1999       2000       1999

Net sales                 $  70,632  $  81,652  $ 143,105  $ 164,066
Cost of sales                48,702     56,940     98,023    118,183
Research and development      3,096      2,528      5,940      5,290
Selling, general and
 administrative expense      19,602     22,601     38,711     44,151
Provision for
 Impaired Assets              7,635       --        7,635       --
Refinancing Fees              3,265       --        3,265       --
Restructuring charges             0      6,440       (472)    17,202
Operating loss              (11,668)    (6,857)    (9,997)   (20,760)
Interest expense              2,263      1,625      4,414      3,036
Other income
 (expense), net                 370        199        739        549
Loss before income taxes    (13,561)    (8,283)   (13,672)   (23,247)
Income tax provision          1,734        271      1,695        354

Net loss                  ($ 15,295) ($  8,554) ($ 15,367) ($ 23,601)

Net loss per common share:
      Basic               ($   1.11) ($   0.63) ($   1.13) ($   1.75)
      Diluted             ($   1.11) ($   0.63) ($   1.13) ($   1.75)