Bell & Howell Announces Fourth Quarter 1997 Results

Feb 18, 1998


    SKOKIE, Ill., Feb. 18 /PRNewswire/ -- Bell & Howell Company (NYSE: BHW)
announced that its diluted earnings per share from continuing operations for
the fourth quarter 1997 were $.42, excluding the impact of extraordinary items
and a special charge.  Diluted earnings per share for the full year were
$1.15 per share on that same basis.
    In its high volume mail processing business, the Company recorded a
special charge of $4.0 million (after-tax) to restructure its operations and
to record an inventory provision relating to prior generation product lines.
James P. Roemer, Bell & Howell Chairman, President and CEO said, "As we have
said in the past, we are committed to improving our processes and reducing our
cost structure in this business.  These moves will result in annualized
savings of more than $6 million and will leave us well positioned for solid
earnings growth in the coming year."
    In addition, the Company announced that it has decided to sell its postal
contracting business and its financial results are accordingly reported as a
discontinued operation.  Revenues from this business represented about 3% of
Bell & Howell's total revenue in 1997.  Roemer added, "Our postal contracting
business did not fit well with Bell & Howell's strategy of providing software
and services to select vertical market niches where we can achieve true market
leadership."
    Revenues from continuing operations of $245.6 million for the fourth
quarter of 1997 were virtually even with prior year.  For all of 1997,
revenues of $857.0 represented a 4% increase versus prior year driven by solid
growth in the transportation and vehicle market, the education and library
market, and the high volume mail processing business.
    Operating cash flow, excluding the special charge, was $35.3 million in
the fourth quarter 1997, down 21% from prior year.  On the same basis,
operating cash flow in 1997 was $128.8 million, virtually equal to prior year.
Fourth quarter results were impacted by lower than expected sales in the high
volume mail processing and scanner businesses combined with increased expenses
primarily related to new product introductions.
    Roemer concluded, "In spite of the progress made in each of our
businesses, this was a tough quarter for our Company.  We have always taken
great pride in the predictability of our business and our ability to achieve
our financial objectives.  I am confident that we have taken the necessary
steps to put these issues firmly behind us, including realigning our cost
structure at our high volume mail processing business and the planned
divestiture of our postal contracting business.  We finished the year on a
strong note, particularly when you look at the incoming order rate within our
high volume mail processing business, and I look forward to a much improved
and more predictable year in 1998."
    To participate in a review of the fourth quarter results with Bell &
Howell's management team, call 847-294-1034, passcode BHW, at 3:30 p.m. (CT)
on Wednesday, February 18, 1998.  For your convenience, this call will be
taped and archived until March 4th.  You may listen to the tape by calling
402-220-3824.
    Bell & Howell Company, headquartered in Skokie, Illinois, is a leading
worldwide provider of solutions for information access and distribution.
Additional information about Bell & Howell is available on the Internet at:
http://www.bellhowell.com.

                            BELL & HOWELL COMPANY
                          SALES AND EARNINGS SUMMARY

                 (Dollars in Millions, Except Per Share Data)

                                 Fourth Quarter             Total Year
                            1997       1996   Incr    1997      1996    Incr
                                             (Decr)                    (Decr)
    Net Sales              $245.6    $246.3    --    $857.0    $827.4    4%
    Operating Income         22.6*     33.3   (32%)    78.6*     85.8   (8%)
    Operating Cash Flow**    35.3*     44.4   (21%)   128.8*    129.1    --
    Net Interest Expense      6.5      11.6   (44%)    40.6      43.0    (6%)
    Income Tax Expense        6.1*      8.1   (25%)    15.2*     17.9   (15%)
    Earnings from Continuing
      Operations***         $10.0*    $13.6   (26%)   $22.8*    $24.9    (8%)

    Earnings per Common
      Share from Continuing
      Operations -
      Diluted***            $O.42*    $0.73   (42%)   $1.15*    $1.34    (14%)

    *   Excludes Mail Processing special charge of $6.6 million $(4.0 million
        after-tax) in the fourth quarter of 1997.
    **  Operating cash flow is defined as operating income plus depreciation
        and amortization.
   ***  Excludes earnings (loss) from discontinued operations of the postal
        contracting business and extraordinary losses resulting from debt
        retirement of:

                                             1997                1996
                                               Per Share           Per Share
                                          $      Diluted      $     Diluted
    Fourth Quarter
      Earnings (loss) from
        Discontinued Operations        ($22.7)    ($0.97)    $2.1    $0.11
      Extraordinary Losses              (18.2)     (0.77)      --       --

    Full-Year
      Earnings (loss) from
        Discontinued Operations         (22.4)     (1.13)     0.8     0.04
    Extraordinary Losses                (28.9)     (1.45)    (2.6)   (0.14)


                            BELL & HOWELL COMPANY
                SALES, OPERATING INCOME AND CASH FLOW SUMMARY
                            CONTINUING OPERATIONS
                            (Dollars in Millions)

                                 Fourth Quarter              Total Year
    Net Sales              1997     1996     Incr     1997      1996    Incr
                                            (Decr)                     (Decr)
    Information Access:
      Transportation
        & Vehicle          $37.3    $35.0     7%     $122.4    $109.9    11%
      Education & Library   47.9     49.6    (3%)     183.7     172.6     7%
    Imaging Solutions and
      Components            46.4     53.8   (14%)     173.4     188.0    (8%)
    Information Access     131.6    138.4    (5%)     479.5     470.5     2%

    Mail Processing        114.0    107.9     6%      377.5     356.9     6%

    Net Sales             $245.6   $246.3    --      $857.0    $827.4     4%

    Operating Income

    Information Access     $18.7    $23.6   (21%)     $63.0     $62.9    --
    Mail Processing          7.8*    13.2   (41%)      30.0*     36.4   (17%)
    Corporate               (3.9)    (3.5)   11%      (14.4)    (13.5)    6%

    Operating Income       $22.6    $33.3   (32%)     $78.6     $85.8    (8%)

    Operating Cash Flow**

    Information Access     $29.2    $32.9   (11%)    $105.5     $99.0     7%
    Mail Processing          9.9*    14.9   (34%)      37.2*     43.0   (13%)
    Corporate               (3.8)    (3.4)   13%      (13.9)    (12.9)    8%

    Operating Cash Flow    $35.3    $44.4   (21%)    $128.8    $129.1    --

    Other Financial Data

    Capital Expenditures   $11.7    $11.9    (2%)     $36.4     $38.9    (6%)

    Net Debt              $488.5   $542.8   (10%)        --        --    --

    *   Excludes Mail Processing special charge of $6.6 million in the fourth
        quarter of 1997.
    **  Operating cash flow is defined as operating income plus depreciation
        and amortization.

SOURCE  Bell & Howell Company




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CONTACT: Nils A. Johansson, Executive Vice President, Chief
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