FORM 10-Q ~~SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549~~

~~__X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE~~ SECURITIES ~~EXCHANGE~~AND ~~ACT OF 1934. For the Quarterly Period ended June 30, 2003.~~EXCHANGE COMMISSION

~~_____~~Washington, ~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~D. ~~For the transition Period from ___________ to ___________~~C. 20549

~~Commission~~ X QUARTERLY ~~File~~REPORT ~~No.~~PURSUANT ~~1-8467~~TO ~~BMC~~SECTION ~~INDUSTRIES,~~13 ~~INC.~~OR 15(~~Exact~~d) ~~Name~~OF ofTHE SECURITIES ~~Registrant~~EXCHANGE asACT ~~Specified~~OF in1934. For the ~~its~~Quarterly ~~Charter)~~Period ended September 30, 2003.

Minnesota	41-0169210
(State of Incorporation)	(IRS Employer Identification No.)

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition Period from to .

~~One~~Commission ~~Meridian~~File ~~Crossings,~~No. Suite 850, Minneapolis, Minnesota 55423 (Address of Principal Executive Offices) (Zip Code) (952) 851-6000 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.-8467

__X__ Yes _____ No

BMC INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)

Minnesota	41-0169210
(State of Incorporation)	(IRS Employer Identification No.)

One Meridian Crossings, Suite 850, Minneapolis, Minnesota 55423
(Address of Principal Executive Offices) (Zip Code)


(952) 851-6000
(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.

X Yes

_______ No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

~~_____~~ Yes ~~__X__~~X No

BMC Industries, Inc. had 27,~~071~~052,~~685~~785 outstanding shares of common stock, which is the only class of common stock of the registrant, as of November ~~August 15~~13, 2003. ~~Exhibit Index Begins at Page 24 Page 1~~

Exhibit Index Begins at Page 27

PART I: FINANCIAL INFORMATION

Item 1: Financial Statements

BMC INDUSTRIES, INC. ~~CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)~~

ASSETS	June 30 2003			December 31 2002
Current assets		(Unaudited)
Cash and cash equivalents	$	5,607		$	1,635
Trade accounts receivable, net		27,906			27,660
Inventories		45,021			59,736
Deferred income taxes		—			9,492
Assets held for sale		4,410			7,080
Other current assets		3,518			6,350
Total current assets		86,462			111,953
Property, plant and equipment		162,055			272,051
Less accumulated depreciation		110,776			157,797
Property, plant and equipment, net		51,279			114,254
Deferred income taxes		—			3,083
Intangible assets, net		11,408			12,141
Other assets		2,145			5,928
Total assets	$	151,294		$	247,359
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Short-term borrowings	$	554		$	747
Current portion of long term debt		130,110			14,010
Accounts payable		14,067			25,113
Deferred income taxes		—			88
Accrued expenses and other current liabilities		24,865			20,775
Total current liabilities		169,596			60,733
Long-term debt		24			97,529
Other liabilities		14,687			28,463
Deferred income taxes		1,386			1,155
Stockholders’ equity (deficit)
Common stock		47,018			46,949
Retained (deficit) earnings		(74,612	)		19,957
Accumulated other comprehensive loss		(6,736	)		(7,358	)
Other		(69	)		(69	)
Total stockholders’ equity (deficit)		(34,399	)		59,479
Total liabilities and stockholders’ equity (deficit)	$	151,294		$	247,359

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


		September 30			December 31
ASSETS			2003			2002
Current assets			(Unaudited)
Cash and cash equivalents	$		5,026		$	1,635
Trade accounts receivable, net			25,152			27,660
Inventories			39,030			59,736
Deferred income taxes			-			9,492
Assets held for sale			4,625			7,080
Other current assets			3,795			6,350
Total current assets			77,628			111,953

Property, plant and equipment			163,265			272,051
Less accumulated depreciation			113,595			157,797
Property, plant and equipment, net			49,670			114,254
Deferred income taxes			-			3,083
Intangible assets, net			10,531			12,141
Other assets			1,790			5,928
Total assets	$		139,619		$	247,359
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Short-term borrowings	$		603		$	747
Current portion of long term debt			130,110			14,010
Accounts payable			12,694			25,113
Deferred income taxes			-			88
Accrued expenses and other current liabilities			23,717			20,775
Total current liabilities			167,124			60,733

Long-term debt			22			97,529
Other liabilities			15,819			28,463
Deferred income taxes			1,390			1,155

Stockholders' equity (deficit)
Common stock			47,408			46,949
Retained (deficit) earnings			(86,764	)		19,957
Accumulated other comprehensive loss			(5,311	)		(7,358	)
Other			(69	)		(69	)
Total stockholders' equity (deficit)			(44,736	)		59,479

Total liabilities and stockholders' equity (deficit)	$		139,619		$	247,359

See accompanying Notes to Condensed Consolidated Financial Statements.

~~Page~~BMC 2 INDUSTRIES, INC.

~~BMC INDUSTRIES, INC.~~ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ~~(Unaudited) (in thousands, except per share amounts)~~

	Three Months Ended June 30						Six Months Ended June 30
		2003			2002			2003			2002
Revenues	$	42,819		$	49,246		$	85,039		$	98,879
Cost of products sold		50,987			45,983			85,683			93,463
Gross margin		(8,168	)		3,263			(644	)		5,416
Selling expense		3,220			3,094			6,190			6,440
Administration expense		1,825			1,897			3,193			3,252
Impairment of long-lived assets		46,868			—			46,868			—
Restructuring charges		—			—			—			2,800
Income (loss) from operations		(60,081	)		(1,728	)		(56,895	)		(7,076	)
Other income and (expense)
Interest expense		(2,723	)		(2,567	)		(5,574	)		(5,199	)
Interest income		—			58			4			105
Other income (expense)		1,034			(413	)		779			3,596
Loss from continuing operations before income
taxes and accounting change		(61,770	)		(4,650	)		(61,686	)		(8,574	)
Income tax expense (benefit)		9,410			(809	)		9,994			(45	)
Loss from continuing operations before accounting
change		(71,180	)		(3,841	)		(71,680	)		(8,529	)
Cumulative effect of change in accounting
principle		—			—			—			52,704
Loss from continuing operations		(71,180	)		(3,841	)		(71,680	)		(61,233	)
Loss (gain) from discontinued operations		24,115			(1,539	)		22,889			(4,046	)
Net loss	$	(95,295	)	$	(2,302	)	$	(94,569	)	$	(57,187	)
Basic and diluted loss per share:
Loss from continuing operations before
accounting change	$	(2.64	)	$	(0.14	)	$	(2.66	)	$	(0.32	)
Cumulative effect of change in accounting
principle		—			—			—			(1.96	)
Loss from continuing operations		(2.64	)		(0.14	)		(2.66	)		(2.28	)
Discontinued operations		(0.89	)		0.05			(0.84	)		0.15
Net loss	$	(3.53	)	$	(0.09	)	$	(3.50	)	$	(2.13	)
Number of shares included in per share computation:
Basic and diluted		26,982			26,920			26,982			26,916
Dividends declared per share	$	0.0000		$	0.0025		$	0.0000		$	0.0050

(Unaudited)

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30						September 30
		2003			2002			2003			2002
Revenues	$	40,784		$	42,500		$	124,578		$	140,642
Cost of products sold		42,519			38,097			125,043			130,315
Gross margin		(1,735	)		4,403			(465	)		10,327
Selling expense		2,792			2,741			8,375			8,919
Administration expense		5,834			1,484			9,027			4,736
Impairment of long-lived assets		-			-			45,036			-
Restructuring charges		-			-			-			2,800
Loss from operations		(10,361	)		178			(62,903	)		(6,128	)
Other income and (expense)
Interest expense		(2,585	)		(2,427	)		(8,159	)		(7,626	)
Interest income		2			67			6			172
Other income (expense)		529			(113	)		604			2,846
Loss from continuing operations before income taxes and accounting change		(12,415	)		(2,295	)		(70,452	)		(10,736	)
Income tax expense		(70	)		(922	)		(10,064	)		(877	)
Loss from continuing operations before accounting change		(12,485	)		(3,217	)		(80,516	)		(11,613	)
Cumulative effect of change in accounting principle		-			-			-			(52,704	)
Loss from continuing operations		(12,485	)		(3,217	)		(80,516	)		(64,317	)
Gain (loss) from discontinued operations		333			(968	)		(26,205	)		2,945
Net loss	$	(12,152	)	$	(4,185	)	$	(106,721	)	$	(61,372	)

Basic and diluted loss per share:
Loss from continuing operations before accounting change	$	(0.46	)	$	(0.12	)	$	(2.99	)	$	(0.43	)
Cumulative effect of change in accounting principle		-			-			-			(1.96	)
Loss from continuing operations		(0.46	)		(0.12	)		(2.99	)		(2.39	)
Discontinued operations		0.01			(0.04	)		(0.97	)		0.11
Net loss	$	(0.45	)	$	(0.16	)	$	(3.96	)	$	(2.28	)

Number of shares included in per share computation:
Basic and diluted		26,982			26,951			26,982			26,928

Dividends declared per share	$	-		$	-		$	-		$	0.005

See accompanying Notes to Condensed Consolidated Financial Statements.

~~Page~~ BMC 3INDUSTRIES, INC.

~~BMC INDUSTRIES, INC.~~ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ~~(Unaudited) (in thousands)~~

	Six Months Ended June 30
		2003			2002
Net Cash Provided by (Used in) Operating Activities
Net loss	$	(94,569	)	$	(57,187	)
Discontinued operations		20,636			—
Depreciation and amortization		10,413			10,760
Impairment of long-lived assets		46,868			—
Gain on sale of assets		—			(3,429	)
Deferred income taxes		11,313			2,565
Accounting change – goodwill write-down		—			52,704
Changes in operating assets and liabilities		(4,258	)		23,848
Total		(9,597	)		29,261
Net Cash Used in Investing Activities
Additions to property, plant and equipment		(4,807	)		(3,130	)
Proceeds from sale of assets		—			6,034
Total		(4,807	)		2,904
Net Cash Provided by (Used in) Financing Activities
Decrease in short-term borrowings		(321	)		(52	)
Increase (decrease) in long-term debt		18,595			(31,064	)
Cash dividends paid		—			(136	)
Other		—			105
Total		18,274			(31,147	)
Effect of exchange rate changes on cash and cash equivalents		102			65
Net increase in cash and cash equivalents		3,972			1,083
Cash and cash equivalents at beginning of period		1,635			1,941
Cash and cash equivalents at end of period	$	5,607		$	3,024

(Unaudited)

(in thousands)

	Nine Months Ended
	September 30
		2003			2002
Net Cash Provided by (Used in) Operating Activities
Net loss	$	(106,721	)	$	(61,372	)
Discontinued operations		20,556			-
Depreciation and amortization		13,529			15,846
Impairment of long-lived assets		45,036			-
Gain on sale of assets		(334	)		(3,429	)
Deferred income taxes		11,313			5,549
Accounting change - goodwill write-down		-			52,704
Stock-based compensation and other expenses		459			140
Changes in operating assets and liabilities		7,266			17,931
Total		(8,896	)		27,369

Net Cash Provided by (Used in) Investing Activities
Additions to property, plant and equipment		(6,485	)		(4,957	)
Proceeds from sale of assets		361			6,034
Total		(6,124	)		1,077

Net Cash Provided by (Used in) Financing Activities
Decrease in short-term borrowings		(144	)		(204	)
Increase (decrease) in long-term debt		18,441			(28,710	)
Cash dividends paid		-			(203	)
Total		18,297			(29,117	)

Effect of exchange rate changes on cash and cash equivalents		114			69

Net increase (decrease) in cash and cash equivalents		3,391			(602	)
Cash and cash equivalents at beginning of period		1,635			1,941

Cash and cash equivalents at end of period	$	5,026		$	1,339

See accompanying Notes to Condensed Consolidated Financial Statements.

~~Page~~BMC 4INDUSTRIES, INC.

~~BMC INDUSTRIES, INC.~~ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Unaudited) (in thousands, except per share amounts)~~

(Unaudited)

(in thousands, except per share amounts)

1. Financial Statements

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of ~~June~~September 30, 2003, and the consolidated results of operations and the cash flows for the ~~six~~nine-month periods ended ~~June~~September 30, 2003 and 2002. Certain items in the financial statements for the periods ended ~~June~~September 30, 2002 have been reclassified to conform to the presentation for the periods ended ~~June~~September 30, 2003. The results of operations for the three and ~~six~~nine-month periods ended ~~June~~September 30, 2003 are not necessarily indicative of the results to be expected for the full year. The balance sheet as of December 31, 2002 is derived from the audited balance sheet as of that date. For further information, refer to the financial statements and footnotes thereto included in the Company’'s Annual Report on Form 10-K for the year ended December 31, 2002.

2. Stock-Based Compensation

In December 2002, the FASB issued Statement of Financial Accounting Standard (SFAS) No. 148, Accounting for Stock-Based Compensation – - Transition and Disclosure –- an Amendment of FASB Statement No. 123. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and amends certain disclosure requirements of SFAS No. 123. The Company will continue to follow Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its employee stock options and non-vested stock awards.

For purposes of pro forma disclosures, the estimated fair value of the options using the Black-Scholes option pricing model is amortized to expense over the options’' vesting period. The Company’'s pro forma net loss ~~earnings~~ and ~~earnings~~loss per share were as follows:

				Three Months Ended June 30						Six Months Ended June 30
	Three Months Ended						Nine Months Ended
				2003			2002			2003			2002
	September 30						September 30
	Net loss – as reported			$	(95,295	)	$	(2,302	)	$	(94,569	)	$	(57,187	)
		2003			2002			2003			2002
	Less stock-based employee compensation expense
Net loss - as reported	$	(12,152	)	$	(4,185	)	$	(106,721	)	$	(61,372	)
	applying fair value method				(341	)		(396	)		(711	)		(771	)
Less stock-based employee compensation expense applying fair value method		(338	)		(261	)		(1,102	)		(1,032	)
	Net loss – pro forma			$	(95,636	)	$	(2,698	)	$	(95,280	)	$	(57,958	)
Net loss - pro forma	$	(12,490	)	$	(4,446	)	$	(107,823	)	$	(62,404	)
	Basic and diluted loss per share – as reported			$	(3.53	)	$	(0.09	)	$	(3.50	)	$	(2.13	)
Basic and diluted loss per share - as reported	$	(0.45	)	$	(0.16	)	$	(3.96	)	$	(2.28	)
	Basic and diluted loss per share – pro forma				(3.54	)		(0.10	)		(3.53	)		(2.15	)
Basic and diluted loss per share - pro forma		(0.46	)		(0.16	)		(4.00	)		(2.32	)

~~Page~~During 5the third quarter of 2003, the Company agreed to compensate a third party consulting firm for a portion of its services performed on behalf of the Company by issuing to them 1,272 stock options. The Company recognized $413 of administrative expenses related to the stock options based on the fair value of the services rendered as provided by the third party consultant. The stock options have an exercise price of $0.01 per share, have a five-year life and expire on September 30, 2008.

3. Discontinued Operations and Restructuring Activities

In ~~recent~~response ~~periods~~to deteriorating market conditions, the Company has engaged in a number of restructuring activities toand ~~respond to deteriorating market conditions, to change its business focus or reduce costs. In several instances the Company has~~ evaluated related assets for impairment ~~in connection with the restructuring~~.

2003 Restructuring and Asset Impairment

Discontinued German Operations. In June 2003, in response to a downturn in the Company’'s mask business, including temporary plant shutdowns by certain of the Company’'s customers in its markets in the United States and Europe, the Company decided to cease all financial and management support of its fully-owned German subsidiary, Buckbee-Mears Deutschland Holding GmbH and Co. KG ("BMDH"), and consolidate all mask operations into its remaining facility in Cortland, New York. Other subsidiaries wholly-owned by BMDH are Buckbee-Mears ~~Deutschland~~Europe ~~Holding~~ GmbH ("BME") and Vision Ease Deutschland GmbH. ("VED"). The Managing Directors of BMDH, BME and VED filed for insolvency with the German courts which action relinquished the Company’'s control over BMDH as of June 27, 2003. Consequently, the Company wrote off its investment in BMDH, eliminating the assets and liabilities of BMDH consisting principally of $5,951 of accounts receivable, $11,930 of inventories, $17,959 of property, plant and equipment, $3,863 of short term debt, $14,152 of pension liability, and $7,026 of accounts payable and other accrued expenses, from the Company’'s consolidated balance sheet asin of June 30, 2003. The Company recorded a loss on disposal of discontinued operations in the statement of operations in second quarter 2003 in accordance with Statement of Financial Accounting Standards No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets. In addition, the Company classified BMDH operating results for the ~~three and six~~nine-months ended ~~June~~September 30, 2003 as earnings (loss) from discontinued operations in the consolidated statement of operations. Prior year comparative data was reclassified as discontinued operations. ~~The (losses) gains pertaining to discontinued operations as reflected in the statement of operations for the three and six-month periods ended June 30, 2003 and 2002 are summarized below.~~

	Three Months Ended June 30					Six Months Ended June 30
	2003			2002		2003			2002
Income (loss) of discontinued operations	$	(3,479	)	$	1,539	$	(2,253	)	$	4,046
Loss on abandonment of discontinued operations		(20,636	)		—		(20,636	)		—
Total gain (loss) on discontinued operations	$	(24,115	)	$	1,539	$	(22,889	)	$	4,046
Revenues of discontinued operations	$	8,747		$	17,918	$	22,381		$	36,911

In connection with the insolvency of it's German operations, the Company wrote-off the receivables owed to it by the German subsidiaries; however, inter-company payables amounting to $6,012 have been recorded as liabilities and included in accrued expenses and other current liabilities in the accompanying balance sheet as of September 30, 2003. In prior periods, the inter-company receivables and payables would have been eliminated in the consolidation process. The Company recorded the inter-company payable in recognition of claims by the administrator of BMDH's insolvency proceedings. Although the Company disputes the validity of these claims, the claimed amount will be recorded as a liability until the matter is fully resolved.

InDiscontinued French Lab Operations. In connection with the Company’'s ~~decision~~restructuring toprocess, ~~discontinue~~a ~~its~~review ~~German~~was ~~operations,~~performed during ~~receivables~~the ~~owed~~third toquarter 2003 of the Company's ~~from~~French ~~its~~lab ~~German~~ subsidiary. As ~~were~~a ~~included~~result inof this review, the ~~write-off~~Company decided ofto ~~its~~discontinue ~~investment,~~operating ~~however~~this subsidiary. Consequently, the ~~intercompany~~Company ~~payables~~wrote ~~amounting~~off toits $7investment in Vision-Ease France (VEF),~~649~~ ~~which~~eliminating ~~would~~the ~~previously~~assets ~~been~~and ~~eliminated~~liabilities inof ~~the~~VEF ~~consolidation~~consisting principally ~~process~~of ~~have~~accounts ~~been~~receivable ~~recorded~~and asinventories ~~liabilities~~value at approximately $500 and accounts ~~included~~payable inand other accrued expenses ~~and~~value ~~other~~at ~~current~~approximately ~~liabilities~~$580, infrom the Company's ~~accompanying~~consolidated balance sheet asin September 30, 2003. The Company recorded a gain on disposal of discontinued ~~June~~operations in the statement of operations in third quarter 2003 in accordance with SFAS 144. In addition, the Company classified VEF operating results for the three and nine-months ended September 30, 2003 as earnings (loss) from discontinued operations in the consolidated statement of operations. Prior year comparative data was reclassified as discontinued operations.

~~Page~~In 6October 2003, the French subsidiary filed for insolvency with a local court. On November 5, 2003, the local court opened insolvency proceedings and appointed an administrator to oversee the operations of the business. The judge ordered the administrator to continue the operations of the laboratory while pursuing a sale of the business for a period of up to four months. As of November 5, 2003, the Company has ceased all funding of this business but will work with the administrator to assist in continuing service to customers, including supplying lenses on cash-in-advance terms.

~~Hungary~~Total Discontinued Operations. AsThe ~~part~~(losses) gains ofpertaining ~~the~~to ~~realignment~~discontinued ofGerman ~~mask~~and ~~business~~French operations, ~~into one facility~~ as ~~announced~~reflected in ~~June 2003,~~ the ~~Company~~statement ~~has initiated a shutdown~~ of ~~its~~operations ~~facility in Tatabanya, Hungary, which currently performs product inspection and other services~~ for the ~~Buckbee-Mears~~three ~~group~~ and ~~for~~nine-month ~~the~~periods ~~Company’s~~ended September ~~Optical Products group. Total costs of $2~~30,~~136~~ ~~were recorded in second quarter~~ 2003, ~~consisting of severance of $329~~ and ~~write-down of the carrying value of property~~2002, ~~plant~~are ~~and~~summarized ~~equipment to its appraised value of $1,807 and recorded as cost of products sold and impairment of long-lived assets, respectively, in the statement of operations~~below. ~~The entire $329 of severance, which impacts 74 people, remains as a liability as of June 30, 2003.~~

Optical Laboratory. In connection with the Company’s comprehensive restructuring process, a discounted cash flow projection was prepared to determine if the Company’s long-lived assets pertaining to its French optical laboratory were impaired. As a result, the Company recognized a write-off of $1,832, which is included in the impairment of long-lived assets expense in the accompanying statement of operations.

	Three Months Ended					Nine Months Ended
	September 30					September 30
		2003		2002			2003			2002
Income (loss) of discontinued operations	$	253	$	(968	)	$	(5,649	)	$	2,945
Gain (loss) on abandonment of discontinued operations		80		-			(20,556	)		-
Total gain (loss) on discontinued operations	$	333	$	(968	)	$	(26,205	)	$	2,945

Revenues of discontinued operations	$	698	$	14,890		$	24,324		$	52,538

~~Cortland,~~Hungary ~~New York~~Operations. As ~~The~~part ~~Company~~of ~~recorded~~the arealignment ~~charge~~ of ~~$40,637~~mask ~~during~~business ~~the~~operations ~~quarter~~into ~~ended~~one ~~June 30~~facility, ~~2003~~as announced ~~for~~in ~~the~~June ~~write-down~~2003, ofthe ~~certain~~Company ~~Buckbee-Mears~~has ~~fixed~~initiated ~~assets.~~a ~~This~~shutdown ~~charge~~of isits ~~included~~facility in Tatabanya, ~~impairment~~Hungary, ofwhich ~~long-lived~~performed ~~assets~~product ininspection ~~the~~and ~~consolidated~~other services ~~statement~~for ~~of operations. With~~ the ~~intense~~Buckbee-Mears ~~competitive~~group ~~market~~and ~~conditions~~for in the ~~aperture~~Company's ~~mask~~Optical ~~business~~Products group. Total ~~and~~costs ~~the~~of ~~accelerated~~$2,136 ~~movement~~were recorded toin ~~Asian~~second ~~based~~quarter ~~operations~~2003, byconsisting ~~certain~~ of ~~the~~severance ~~Company’s~~of ~~customers~~$329, ~~management~~which impacted ~~determined~~74 itpeople ~~was~~and ~~necessary~~a towrite-down ~~assess~~of ~~the~~$1,807 ~~assets~~to ~~held~~the atcarrying ~~its~~value ~~Cortland~~of property, ~~New~~plant and ~~York~~equipment ~~operations~~and ~~for~~recorded ~~impairment~~ as ~~required~~cost byof ~~SFAS~~products sold ~~No.144.~~and Asimpairment ~~such,~~of ~~the~~long-lived ~~Company’s~~assets, ~~expected~~respectively, ~~future~~in ~~cash~~the ~~flows~~statement ~~were~~of operations. An ~~reviewed~~additional ~~and~~$250 ~~based~~of severance ~~on that review it~~ was ~~determined~~recorded ~~that~~in anthe ~~impairment~~quarter ~~write-off~~ended ~~was~~September ~~necessary. In addition~~30, ~~the~~2003. Approximately ~~remaining~~$150 ~~useful lives~~ of ~~the~~severance ~~assets~~remains ~~were~~unpaid ~~also reassessed~~ and ~~depreciation~~is ~~expense~~included ~~will~~in accrued beexpenses ~~adjusted~~in ~~accordingly~~the ~~beginning~~accompanying ~~third~~balance ~~quarter 2003~~sheet. Currently, ~~The~~all ~~expected~~assets ~~impact~~ of ~~the~~this ~~impairment~~operation ~~charge~~with ~~taken~~a incurrent ~~the~~book ~~second quarter~~ value of ~~2003~~$791 ~~coupled~~are ~~with~~being ~~the~~marketed ~~change~~for insale. Any ~~estimated~~proceeds ~~useful~~on ~~lives~~sales of ~~the fixed~~ assets will be ~~to decrease depreciation expense by approximately $900 per quarter. The Company~~ used afirst ~~discounted~~to ~~cash~~pay ~~flow~~down ~~projection in determining~~ the remaining ~~amount~~debt ofincurred by the ~~asset~~Hungarian ~~impairment~~subsidiary.

~~Azusa~~ Cortland, ~~California~~New York. InThe ~~the~~Company ~~second~~recorded ~~quarter~~a charge of ~~2003~~$40,637 during ~~the~~second ~~Company~~quarter ~~reclassified~~ended ~~its~~June ~~Azusa~~30, ~~California~~2003 ~~property~~for tothe ~~assets~~write-down ~~held~~of ~~for~~certain Buckbee-Mears ~~sale~~fixed assets. This charge ~~The~~is ~~Optical~~included ~~Products~~in ~~facility~~impairment ~~located~~of onlong-lived assets in the ~~property~~consolidated statement ~~was~~of ~~closed~~operations. inWith ~~2002~~the ~~and~~intense ~~listed~~competitive ~~for~~market ~~sale.~~conditions ~~However,~~in the aperture ~~Company~~mask ~~had~~business ~~not~~and ~~reclassified~~ the ~~property~~accelerated inmovement ~~previous~~to ~~periods~~Asian ~~because~~based operations by certain of the Company's ~~previously~~customers, ~~did~~management ~~not~~determined ~~expect~~it was necessary to beassess ~~able~~the toassets ~~dispose~~held ofat ~~the~~its ~~property~~Cortland, ~~within~~New ~~one~~York ~~year~~operations ~~and~~for ~~had~~impairment as ~~not~~required ~~yet~~by ~~received~~SFAS ~~any~~No.144. As ~~offers~~such, the ~~for~~Company's ~~the~~expected ~~property.~~future ~~During~~cash ~~the~~flows ~~quarter~~were ~~ended~~reviewed ~~June~~and ~~30,~~based ~~2003,~~on ~~the~~that ~~asset~~review it was ~~written~~determined ~~down~~that toan ~~its~~impairment ~~fair~~write-off ~~value,~~was innecessary. In ~~accordance~~addition, ~~with~~the ~~SFAS~~remaining ~~144,~~useful ~~based~~lives onof the ~~market~~assets ~~valuations~~were ~~received~~also reassessed and ~~offers~~depreciation toexpense ~~buy~~was ~~the~~adjusted accordingly ~~property~~beginning ~~during~~third ~~the~~ quarter 2003. The Aimpact ~~write-down~~ of ~~$2,592~~the ~~is included in~~ impairment ofcharge ~~long-lived~~taken ~~assets~~ in the ~~consolidated~~second ~~statement~~quarter of ~~operations~~2003 coupled towith ~~recognize~~ the ~~facility’s~~change ~~fair~~in ~~value~~estimated atuseful ~~$4,410,~~lives ~~which~~of isthe ~~shown~~fixed as assets ~~held~~was ~~for~~to decrease ~~sale~~depreciation inexpense ~~the~~by ~~consolidated~~approximately ~~balance~~$900 ~~sheet.~~per quarter. The Company ~~has~~used ~~suspended~~a ~~depreciation~~discounted oncash ~~this~~flow projection ~~asset~~ in ~~accordance~~determining ~~with~~the ~~SFAS~~amount ~~144~~of the asset impairment.

~~Total~~The Impairment. Total impairment of long-lived assets included in the statement of operations for the three and six months ended June 30, 2003 of $46,868 includes $42,444 related to the Buckbee-Mears segment and $4,424 related to the Optical Products segment. Subsequent to the end of the second quarter, the Company ~~has~~ initiated several cost ~~savings~~saving measures, during ~~which will include personnel reductions~~2003. As ~~Related~~a toresult, ~~these reductions~~ the ~~Company~~Cortland facility ~~expects~~incurred ~~to incur~~ severance ~~cost.~~charges ~~These~~of ~~costs~~$335 ~~are~~during ~~estimated~~third atquarter ~~approximately~~2003 ~~$550~~ and ~~will~~a total beof ~~paid,~~$590 ~~principally,~~in ~~between~~severance ~~August~~for ~~and~~the ~~November~~nine-months ofended September 30, 2003.

~~Page~~In 7October 2003 the Company entered into an agreement with a third party to sell assets, including inventory and equipment, from its idle Hybrid non-mask line in Cortland for approximately $1,007. The equipment was written off in the previous quarter as part of the SFAS 144 adjustment. A net gain of approximately $750 will be recorded in fourth quarter 2003 which will be reflected as an offset to the impairment charge.

The Company continues to assess its mask operation's future prospects. At the conclusion of this assessment, asset values will be reviewed. The Company expects that additional impairment charges may be recognized at that time.

Azusa, California. In the second quarter of 2003, the Company reclassified its Azusa, California property to assets held for sale. The Optical Products facilities located on the property were closed in 2002 and listed for sale. However, the Company had not reclassified the property in previous periods because the Company had not yet received any offers for the property and did not expect to be able to dispose of the property within one year. During the quarter ended June 30, 2003, the asset was written down to its fair value, in accordance with SFAS 144, based on market valuations and offers to buy the property during the quarter. A write-down of $2,592 is included in impairment of long-lived assets in the consolidated statement of operations to recognize the facility's fair value at $4,410, which is shown as assets held for sale in the consolidated balance sheet. The Company has suspended depreciation on these assets in accordance with SFAS 144. In October of 2003, the Company sold one of the two buildings on the Azusa property (the property at 1300 Optical Drive) for net proceeds of $1,674. No gain or loss will be recognized on the sale as the property was written down to net realizable value in the previous quarter. The net proceeds were used to service domestic debt obligations.

Total Impairment. Total impairment of long-lived assets included in the statement of operations for the nine months ended September 30, 2003 of $45,036 includes $42,444 related to the Buckbee-Mears segment and $2,592 related to the Optical Products segment. During the third quarter, the Company initiated several cost savings measures that included personnel reductions. Additional severance costs of $595 were recorded in the quarter ended September 30, 2003, most of which related to the Buckbee-Mears segment. At September 30, 2003, total severance costs of $809 are included in accrued expenses in the accompanying balance sheet.

2002 Restructuring

In February 2002, the Company announced its plans to close the Optical Products group facility in Azusa, consolidate the operations into the Company’'s existing plants in Ramsey, Minnesota and Jakarta, Indonesia and sell the Azusa Plant facilities. The total restructuring costs recorded were $2,800, and $2,745 was utilized during 2002. The Company utilized the remaining $55 — liability - all related to severance —- in the first six months of 2003.

2001 Restructuring

In fourth quarter 2001, the Company announced restructuring initiatives in both of its business segments. These restructuring initiatives resulted in the recording of total pre-tax restructuring and restructuring related charges of $12,165. The charges included $6,218 classified as restructuring, with $1,180 utilized in 2001, and $2,828 utilized in 2002 and an additional $5,947 of inventory and other asset write-downs classified as cost of sales in the 2001 statement of operations. Through September ~~June~~ 30, 2003, the Company has utilized ~~$1,690~~all of the $2,210 restructuring reserve remaining at December 31, 2002, all of which is attributable to the Buckbee-Mears business segment. The remaining restructuring liability consists primarily of costs associated with the closing of the St. Paul facility. The Company anticipates that substantially all of the remaining restructuring reserve will be utilized by the first quarter 2004.

The activity relating to the 2001 restructuring reserve during the first ~~six~~nine months of 2003 was as follows:

		Severance and Related Costs		~~Severance and Related Costs~~	Contractual Obligations and Other		~~Contractual Obligations and Other~~	Total		~~Total~~
Restructuring reserve, December 31, 2002	~~Restructuring reserve, December 31, 2002~~$	723		$	~~723~~1,487		$	12,~~487~~210		$	~~2,210~~
Utilized in 2003	~~Utilized in 2003~~	(723	)		(~~723~~1,487	)		(~~967~~2,210	)		~~(1,690~~	)
	Restructuring reserve, June 30, 2003			$	—		$	520		$	520
Restructuring reserve, September 30, 2003	$	-		$	-		$	-

4. Advisory Service ~~Goodwill and Other Intangible Assets~~Fees

As a part of the Company's ongoing review of its financial condition, the board of directors elected to establish an ad hoc special committee of the board to oversee the examination, evaluation, assessment and implementation of the alternatives available to solve the Company's financial challenges. With this end in mind, the board of directors approved the recruitment of several outside legal and financial advisors to provide the Company and the board with a full evaluation of the range of options available to ensure the continued operation of the Company. The areas authorized for exploration included: 1) bank compliance requirements under terms of the Company's current credit agreement, 2) retention of a financial consultant, as required by the bank waiver dated July 2, 2003, to perform a thorough examination of financial restructuring options, bank group negotiations, identify operating efficiencies and opportunities for cost reductions, and 3) the retention of outside legal counsel for review and consultation regarding the complicated legal and compliance issues related to the Company's restructuring efforts.

Total advisory fees incurred for the three and nine-months ended September 30, 2003 were $3,591 (including the $413 recognized related to stock options issued - see note 2) and $4,231, respectively. Of these total fees for the quarter ended September 30, 2003, $680 were for legal expenses, $391 were for consulting fees required under terms of the credit agreement and $2,520 were for financial advisory services as outlined above. The Company anticipates that additional fees will be incurred in fourth quarter for the development and evaluation of a restructuring plan and continued negotiation of an acceptable financing arrangement with the Company's bank group, including the possible continuance of waivers already obtained.

5. Goodwill and Other Intangible Assets

In July 2001, the FASB issued Statement of Financial Accounting Standard (SFAS) No. 142, Goodwill and Other Intangible Assets, which eliminated the systematic amortization of goodwill. The Company adopted SFAS No. 142, effective January 1, 2002 and ceased amortization of its goodwill balances. However, intangible assets with finite lives continue to be amortized over their estimated useful lives.

SFAS No. 142 also required the Company to complete an impairment review of its goodwill assets. During the first quarter 2002, the Company completed its transitional impairment test using a discounted cash flow model as provided by SFAS No. 142 and determined that the goodwill in its Optical Products segment was impaired. The Company recorded as a cumulative effect of change in accounting principle a write-off of its goodwill balance in the amount of $52,704 on which the Company recognized no tax benefit. The remaining intangible assets recorded on the accompanying condensed consolidated balance sheet at ~~June~~September 30, 2003 include patent costs and other intangible assets with finite lives.

~~Page 8~~ 6. Debt

5Total consolidated debt at September 30, 2003 was $130,735, compared to $130,688 at June 30, 2003 and $112,286 at December 31, 2002. The ~~Debt~~Company's total debt under its domestic credit agreement at September 30, 2003 was $130,100. The remaining $635 relates primarily to debt relates to the Company's Hungarian subsidiary.

~~Total~~Virtually ~~consolidated~~all of the Company's debt atis ~~June~~pursuant 30to its domestic credit agreement (the "Agreement"), ~~2003~~which ~~was~~provides for total term loans of up to $~~130~~110,~~688,~~000 ~~compared~~and additional revolving credit subject to borrowing base requirements up to $~~113~~35,~~244~~000. atAs ~~March~~of 31September 30, 2003, the Company had $101,500 of term loans and $~~112~~28,~~286~~600 of revolving loans outstanding. The Agreement requires the Company to make term loan amortization payment of $3,500 at ~~December~~the 31end of each calendar quarter beginning in 2003; however, ~~2002~~the requirement to make payments in the second and third quarters of 2003 was deferred. During the waiver period described below, the Company cannot borrow additional funds. The Company’s ~~total~~also has letters of credit totaling $3,200 outstanding under the Agreement. Total debt outstanding under ~~its~~the ~~domestic~~Agreement of $130,100 ~~credit~~did ~~agreement~~not atchange ~~June~~during the quarter ended September 30, 2003. The average ~~was~~daily outstanding balances under the Agreement were $130,100. ~~The~~in ~~remaining~~the quarter ended September 30, 2003, $~~578~~126,800 ~~relates~~in ~~primarily~~the toquarter ~~debt~~ended ~~associated~~June ~~with~~30, 2003, $125,200 in the ~~Company’s~~quarter ~~Hungarian~~ended March ~~inspection~~31, ~~facility~~2003 and $122,300 in the quarter ended December 31, 2002.

~~Virtually~~As ~~all~~ of September 30, 2003, the Company’s ~~debt~~did isnot ~~pursuant~~comply with tothe ~~its~~following ~~domestic~~covenants ~~credit~~and ~~agreement~~requirements: (1) the ~~“Agreement”)~~Company ~~which~~failed ~~provides~~to ~~for~~make $3,500 ~~total~~in ~~term~~scheduled ~~loans~~principal ofpayments updue toon ~~$110,000~~September 30 and ~~additional~~on ~~revolving~~June ~~credit~~30, 2003. ~~subject~~(2) toThe ~~borrowing~~Company ~~base~~did ~~requirements~~not upsatisfy a total debt to ~~$35~~trailing 12-month EBITDA ratio,~~000~~ which was not to exceed 3.25 Astimes ofat ~~June~~September 30, 2003. The ratio could not be calculated, because the Company's ~~had~~trailing ~~under~~12 ~~its~~month ~~Agreement~~EBITDA was negative $~~101~~46,~~500~~304, ofcompared ~~term~~to ~~loans~~total debt, ~~and~~as ~~$28,600~~defined ofin ~~revolving~~the ~~loans~~Agreement, ~~outstanding~~of $131,513.(3) The Company isdid ~~required~~not satisfy ~~under~~a ~~the~~total ~~Agreement~~trailing 12-month EBITDA to ~~make~~interest ~~term~~expense ~~loan~~ratio, ~~amortization~~which ~~payment~~was to ofexceed ~~$3,500~~2.50 times at ~~the~~September ~~end~~30, of2003. The ~~each~~ratio ~~quarter;~~could ~~however,~~not be calculated because the ~~requirement~~Company's totrailing ~~make~~12 month ~~payments~~EBITDA onwas ~~June~~negative 30$46,304. ~~2003~~(4) ~~was~~The ~~deferred~~Company asdid ~~described~~not ~~below.~~satisfy ~~Currently,~~a ~~the~~covenant that ~~Company~~required ~~does~~its ~~not~~consolidated ~~have~~net ~~additional~~worth ~~borrowing~~to ~~capabilities~~exceed ~~under~~a minimum amount as defined in the Agreement. On ~~during~~that date, the Company's ~~period~~consolidated ofnet aworth, ~~waiver~~as ~~from~~defined ~~covenant~~in ~~violations~~the ~~described~~Agreement, was $74,533, below the minimum covenant level of $169,588. (5) The Company's ~~also~~preliminary ~~has~~borrowing base $3calculations for August 31,~~200~~ of2003, ~~letters~~and September 30, 2003, showed overadvances of ~~credit~~$3,023 ~~outstanding~~and ~~under~~$1,976, ~~the~~respectively. The Agreement. ~~Total~~provides that ~~debt~~the ~~outstanding~~Company ~~under~~will ~~the~~make ~~Agreement~~revolving ~~was~~loan aspayments ~~high~~upon asany ~~$130,100~~overadvance ~~during~~to correct ~~the~~any ~~quarter~~deficiencies. In ~~ended~~addition ~~June~~to 30these failures to comply with covenants, on July 1, 2003, the ~~with~~Company anfailed ~~average~~to ~~daily~~make ~~outstanding~~a ~~balance~~payment of $~~126~~1,~~800~~024 ~~during~~in ~~the~~fees ~~quarter.~~due Byon ~~comparison~~that date. However, if the ~~average~~Company ~~daily~~defaults ~~outstanding~~under ~~balances~~any other covenants under the Agreement ~~were $125~~,~~200 in~~ the ~~quarter~~lenders ~~ended~~can ~~March~~terminate ~~31,~~the ~~2003~~waiver and ~~$122,300~~immediately indeclare ~~the~~a ~~quarter~~default ~~ended~~under ~~December 31, 2002~~the Agreement.

AsOn ofJuly ~~June 30~~2, 2003, the Company ~~failed~~received toa ~~comply~~short-term waiver ~~with~~of ~~the~~these ~~following~~ covenants ~~and~~from ~~requirements:~~its ~~(1)~~bank ~~The Company failed to make $3~~lenders,~~500~~ inand ~~scheduled principal payments due~~ on ~~June~~July 3016, 2003~~. (2) The Company did not satisfy a total debt to trailing 12-month EBITDA ratio~~, ~~which~~the waiver was ~~not~~extended tothrough ~~exceed~~September ~~3.50 times at June 30~~15, 2003. On ~~that~~July date, the Company failed to meet this covenant. The ratio could not be calculated, because the Company’s trailing 12 month EBITDA was negative $32,367, compared to total debt, as defined in the agreement, of $131,564 (3) The Company did not satisfy a total trailing 12-month EBITDA to interest expense ratio, which was to exceed 2.25 times at June 30, 2003~~. On that date~~, the ~~ratio was negative 2.95 times. (4) The~~ Company also ~~did~~received ~~not satisfy~~ a ~~covenant~~temporary ~~that~~deferral ~~required~~agreement ~~its~~relating ~~consolidated net worth~~ to ~~exceed~~ a ~~minimum~~total ~~amount as defined in the Agreement. On that date, the Company’s consolidated net worth as defined in the Agreement was $84,698 below the minimum covenant level~~ of approximately $~~169,588.~~687 Inin ~~addition~~scheduled tointerest ~~these~~payments ~~failures to comply with covenants,~~ on ~~July~~floating 1,rate ~~2003,~~notes under the ~~Company~~agreement ~~also~~due ~~failed to make a payment of $1,024~~ in ~~fees~~late ~~due on that date. On~~ July ~~2, 2003, the Company received short-term waivers of these covenants from its bank lenders,~~ and onearly ~~July~~August ~~16,~~ 2003~~, the waiver was extended through September 15, 2003~~. ~~However,~~The ifdeferral ~~the Company defaults under any other non-financial covenants under the Agreement~~agreement, subject ~~the banks will continue~~ to becertain ~~able~~conditions, todeferred ~~declare~~these ainterest ~~default~~payments ~~under~~until ~~the~~August 28, ~~Agreement~~2003.

~~Pursuant to the July 16th waiver, the banks determined that no additional borrowings would be extended to the Company under the Agreement during the waiver period.~~ On ~~July~~August 3029, 2003, the Company ~~also~~ received aan additional temporary deferral ~~agreement relating to a total~~ of ~~approximately $687 in scheduled~~ interest payments onthat ~~floating~~also ~~rate~~extended ~~notes~~to September ~~under~~15, ~~the~~2003 ~~agreement~~to ~~due~~coincide inwith ~~late~~termination ~~July~~of ~~and~~the ~~early August 2003~~waiver. The ~~deferral~~ agreement, ~~subject~~deferred ~~to certain conditions, defers these~~ interest ~~payments until August 28~~totaling $1, ~~2003~~100. This ~~The~~was ~~Company~~in isaddition ~~continuing discussions with its banks regarding a further extension~~ to ~~defer~~$687 of interest payments tothat ~~September~~were ~~15,~~deferred ~~2003 and to establish terms for a longer agreement. If the Company cannot obtain further relief from the covenants and other requirements in the Agreement, it will likely be in default~~ under the ~~Agreement~~earlier astemporary ofdeferral agreement ~~either~~dated ~~August~~July 2830, 2003 ~~or September 15, 2003~~. The Company continues to assess alternative financing arrangements to its current Agreement; however, the Company is unlikely to be able to negotiate such alternative arrangements before the waiver expires.

~~Page~~On 9September 16, 2003, the Company received an additional 60-day waiver of these same covenants under its Agreement. The waiver extended the time period for BMC to make certain scheduled principal and fee payments, and further defers all interest payment obligations until November 14, 2003, the termination date of the waiver extension. The agreement defers interest totaling approximately $3.2 million, a combination of interest payments deferred to date and further interest payments expected to com due through November 14, 2003. The earlier agreement, subject to certain conditions, had deferred interest payments until September 15, 2003. Subsequent to the granting of this waiver, the Company has sold certain assets and used the net sales proceeds to reduce the total deferred interest due on November 14, 2003 to approximately $817.

6Pursuant to the July 16th waiver and all subsequent waivers, the banks and the Company have agreed that no additional borrowings would be extended to the Company. ~~Inventories~~

	June 30, 2003		December 31, 2002
Raw materials	$	7,285	$	13,030
Work in process		3,506		6,156
Finished goods		34,230		40,550
Total	$	45,021	$	59,736

The Company continues to work with its lenders and advisors to secure a longer-term alternative to BMC's existing financing arrangement or another agreement for the restructuring of outstanding debt, including relief from these covenants and deferral of payments due to the banks. If BMC is unable to achieve additional waivers or other relief from covenants, payment obligations and other requirements under the credit agreement, the Company likely will be in default as of November 14, 2003. It is unlikely that BMC will be able to negotiate such alternative arrangements before the most recent waiver expires on November 14, 2003. The failure to maintain compliance with all covenants under the credit agreement would result in a default, which would give lenders the ability to accelerate all outstanding debt. In such event, BMC would need to refinance or restructure the Company's debt and, if unsuccessful in these efforts, to consider all other options, including seeking protection under the bankruptcy laws.

7. Inventories

	September 30, 2003			December 31, 2002

Raw materials		$	5,357		$	13,030
Work in process			3,205			6,156
Finished goods			30,468			40,550
Total		$	39,030		$	59,736

Raw materials inventory is recorded at actual cost and all other inventories are recorded at average cost.

Inventory balances from discontinued operations totaled $78,~~765~~418 at December 31, 2002 and are included in the balance in the table above.

During the second quarter ended June 30, 2003, the Company in conjunction with the restructuring activities as discussed in note 3, conducted a review of its product offerings and decided to discontinue selling ~~specific~~product ~~inventories~~offerings and reduce the selling price of others ~~to reduce quantities on hand in their Optical Products segment~~. As a result, the Company wrote-off or ~~took~~recorded a lower of cost or market charge totaling $4,551 during second quarter 2003. In the statement of operations, the charge is included in costs of products sold. In third quarter 2003, the Company recorded an additional inventory reserve of $825 for slow-moving glass raw material inventory in Jakarta, Indonesia. The total amount of write-offs and lower of cost or market charges was $5,376 for the nine-month period ended September 30, 2003.

Similarly, Buckbee-Mears recognized a charge of $2,214 for certain raw materials inventories specific to discontinued products. The expense was included in costs of products sold in the statement of operations for the quarter ended June 30, 2003. Additional write-offs of raw materials and finished goods inventories of $230 were recorded in the quarter ended September 30, 2003.

78. Comprehensive ~~Income~~ Loss

The components of comprehensive ~~income (~~loss), net of related tax, for the three and ~~six~~nine-month periods ended ~~June~~September 30, 2003 and 2002 are as follows:

				Three Months Ended June 30						Six Months Ended June 30
	Three Months Ended						Nine Months Ended
					2003			2002			2003			2002
	September 30						September 30
	Net loss			$	(95,295	)	$	(2,302	)	$	(94,569	)	$	(57,187	)
		2003			2002			2003			2002
	Foreign currency translation adjustments				571			2,775			841			2,164
Net loss	$	(12,152	)	$	(4,185	)	$	(106,721	)	$	(61,372	)
	Change in minimum pension liability				(1,373	)		—			(1,373	)		—
Foreign currency translation adjustments		1,425			263			2,266			2,427
	Gain (loss) on derivative instruments				391			(28	)		1,154			707
Change in minimum pension liability		-			-			(1,373	)		-
	Comprehensive income (loss)			$	(95,706	)	$	445		$	(93,947	)	$	(54,316	)
Gain on derivative instruments		-			368			1,154			1,075
Comprehensive loss	$	(10,727	)	$	(3,554	)	$	(104,674	)	$	(57,870	)

Foreign currency translation adjustment for 2003 is due to the change in cumulative translation adjustment resulting from the strengthening of the Euro against the U.S. dollar during the ~~six~~ nine-month period ended ~~June~~September 30, 2003, as well as cumulative translation adjustments associated with the discontinued operations.

~~Page~~9. Valuation Reserve 10for Deferred Tax Assets

8During 2003, as a result of the Company's restructuring activities - in particular the actions it took related to its German subsidiary, the Company reassessed its ability to utilize the NOL carry forwards and other deferred tax assets for which it had not previously provided a tax valuation reserve. With ~~Valuation~~the German ~~Reserve~~operation insolvent, as discussed in note 3, the Company determined that certain tax strategies are no longer available. The Company has provided a valuation reserve for ~~Deferred~~the ~~Tax~~remaining tax ~~Assets~~assets. For the nine months ended September 30, 2003 the charge to tax expense for additional valuation reserves was $9,940. The charges to tax expense of $70 for the quarter ended September 30, 2003 related to taxes associated with the Company's subsidiaries in several locations outside of the United States.

~~During~~10. Legal ~~the~~Matters quarter ended June 30, 2003, as a result of the Company’s restructuring activities — in particular the actions it took related to its German subsidiary, the Company reassessed its ability to utilize the NOL carry forwards and ~~other~~Contingent deferred tax assets for which it had not previously provided a tax valuation reserve. With the German operation insolvent, as discussed in note 3, the Company determined that certain tax strategies are no longer available. The Company has provided a valuation reserve for the remaining tax assets as of June 30, 2003. For the six months ended June 30, 2003 the charge to tax expense for additional valuation reserves is $9,940.Liabilities

9. Legal Matters and Contingent Liabilities

No significant legal proceedings or environmental matters arose during the quarter and there were no material changes in the status of the legal proceedings or environmental matters described in our Annual Report on Form 10-K for the year ended December 31, 2002.

Reserves are established for estimated loss contingencies when it is determined that a loss is probable and the amount of the loss can be reasonably estimated. Reserves for contingent liabilities are based upon management’'s assumptions and estimates, with input and review by legal counsel or other independent parties regarding the probable outcome of the matter. If circumstances change, different facts or information become known or the actual outcome differs from the assumptions, the estimate reserves are revised accordingly and the change is recorded in income in the period in which the change occurs.

1011. Segment Information

The Company has two operating segments that manufacture and sell a variety of products: Buckbee-Mears and Optical Products (operating under the Vision-Ease Lens trade name.) Buckbee-Mears, ~~manufactures high-volume precision products for the entertainment and optical industries. Mask Operations~~ produces aperture masks, which are critical components of color television picture tubes. Optical Products designs, manufactures and distributes polycarbonate, and glass ~~and~~eyeglass lenses and sources and distributes hard-resin plastic eyeglass lenses.

~~Page~~ The 11following is a summary of certain financial information relating to the two segments for the three-month period ended September 30, 2003:

The following is a summary of certain financial information relating to the two segments for the three-month period ended June 30, 2003:

	Three Months Ended September 30
	Buckbee-Mears						Optical Products						Consolidated
		2003			2002			2003			2002			2003			2002

Revenues	$	16,005		$	17,387		$	24,779		$	25,113		$	40,784		$	42,500
Cost of products sold		17,892			15,615			24,627			22,482			42,519			38,097
Gross margin		(1,887	)		1,772			152			2,631			(1,735	)		4,403
Gross margin %		(11.8	)%		10.2	%		0.6	%		10.5	%		(4.3	)%		10.4	%
Selling expense		598			559			2,194			2,182			2,792			2,741
Impairment of long-lived assets		-			-			-			-			-			-

Corporate administration		-			-			-			-			5,834			1,484
Income (loss) from continuing operations	$	(2,485	)	$	1,213		$	(2,042	)	$	449			(10,361	)		178
Continuing operations income (loss) %		(15.5	)%		7.0	%		(8.2	)%		1.8	%		(25.4	)%		0.4	%

Interest and other
expense, net														(2,054	)		(2,473	)

Loss from continuing operations before
income taxes													$	(12,415	)	$	(2,295	)

Total Assets		34,742			115,032			98,175			111,378			139,619			241,232

	Three Months Ended June 30
	Buckbee-Mears						Optical Products						Consolidated
		2003			2002			2003			2002			2003			2002
Revenues	$	16,431		$	19,535		$	26,388		$	29,711		$	42,819		$	49,246
Cost of products sold		20,469			18,199			30,518			27,784			50,987			45,983
Gross margin		(4,038	)		1,336			(4,130	)		1,927			(8,168	)		3,263
Gross margin %		(24.6	)%		6.8	%		(15.7	)%		6.5	%		(19.1	)%		6.6	%
Selling expense		871			778			2,349			2,316			3,220			3,094
Impairment of long-
lived assets		42,444			—			4,424			—			46,868			—
Corporate administration		—			—			—			—			1,825			1,897
Income (loss) from
operations	$	(47,353	)	$	558		$	(10,903	)	$	(389	)		(60,081	)		(1,728	)
Operating income
(loss) %		(288.2	)%		2.9	%		(41.3	)%		(1.3	)%		(140.3	)%		(3.5	)%
Interest and other
expense, net														(1,689	)		(2,922	)
Loss before
income taxes													$	(61,770	)	$	(4,650	)
Total Assets		42,492			120,583			102,353			111,990			151,294			249,791

The following is a summary of certain financial information relating to the two segments for the nine-month period ended September 30, 2003:

Page 12

	Nine Months Ended September 30
	Buckbee-Mears						Optical Products						Consolidated
		2003			2002			2003			2002			2003			2002

Revenues	$	45,753		$	53,551		$	78,825		$	87,091		$	124,578		$	140,642
Cost of products sold		50,630			51,214			74,413			79,101			125,043			130,315
Gross margin		(4,877	)		2,337			4,412			7,990			(465	)		10,327
Gross margin %		(10.7	)%		4.4	%		5.6	%		9.2	%		(0.4	)%		7.3	%
Selling expense Impairment of long-		2,197			2,197			6,178			6,722			8,375			8,919
lived assets		42,444			-			2,592			-			45,036			-
Restructuring charges		-			-			-			2,800			-			2,800
Corporate
administration		-			-			-			-			9,027			4,736
Income (loss) from continuing operations	$	(49,518	)	$	140		$	(4,358	)	$	(1,532	)		(62,903	)		(6,128	)
Continuing operations income (loss) %		(108.2	)%		0.3	%		(5.5	)%		(1.8	)%		(50.5	)%		(4.4	)%

Interest and other
expense, net														(7,549	)		(4,608	)

Loss from continuing operations before
income taxes													$	(70,452	)	$	(10,736	)

~~The~~Item ~~following~~2: Management's Discussion isand aAnalysis ~~summary~~ of ~~certain~~Financial ~~financial~~Condition ~~information~~and ~~relating~~Results toof ~~the two segments for the six-month period ended June 30, 2003:~~Operations

	Six Months Ended June 30
	Buckbee-Mears						Optical Products						Consolidated
		2003			2002			2003			2002			2003			2002
Revenues	$	29,748		$	36,164		$	55,291		$	62,715		$	85,039		$	98,879
Cost of products sold		32,738			35,599			52,945			57,864			85,683			93,463
Gross margin		(2,990	)		565			2,346			4,851			(644	)		5,416
Gross margin %		(10.1	)%		1.6	%		4.2	%		7.7	%		(0.8	)%		5.5	%
Selling expense		1,599			1,638			4,591			4,802			6,190			6,440
Impairment of long-
lived assets		42,443			—			4,424			—			46,868			—
Restructuring charges		—			—			—			2,800			—			2,800
Corporate
administration		—			—			—			—			3,193			3,252
Income (loss) from
operations	$	(47,032	)	$	(1,073	)	$	(6,669	)	$	(2,751	)		(56,895	)		(7,076	)
Operating income
(loss) %		(158.1	)%		(3.0	)%		(12.1	)%		(4.4	)%		(66.9	)%		(7.2	)%
Interest and other
expense, net														(4,791	)		(1,498	)
Income (loss) before
income taxes													$	(61,686	)	$	(8,574	)

Comparison of three months ended September 30, 2003 and 2002

~~Page~~Total 13revenues from continuing operations were $40.8 million for the third quarter ended September 30, 2003 compared to $42.5 million in third quarter 2003. The revenue decline of $1.7 million is a 4% reduction from third quarter 2002.

~~Item~~Revenues of 2:the ~~Management’~~Buckbee-Mears group (BMG) for the third quarter decreased $1.4 million, or 8%, from $17.4 million in 2002 to $16.0 million in 2003. The movement of tube production away from BMG's ~~Discussion~~home markets, North America and ~~Analysis~~Europe, to Asian manufacturers continued to adversely affect sales mix, price and volume. With worldwide mask capacity continuing to exceed demand, mask prices declined. Although entertainment mask sales were slightly higher than the same quarter last year, there was a dramatic shift in BMG sales toward higher-cost, lower-margin invar products. Lower-margin sales of ~~Financial~~smaller ~~Condition~~masks into Asia accounted for much of the shift. Unit sales of entertainment masks were 2.5% lower than the same quarter last year. Sales of monitor masks, a product line that was previously discontinued, were $0.9 million in the third quarter of 2002 and ~~Results~~accounted for the majority of the decrease in mask sales ~~Operations~~quarter over quarter. Sales of non-mask products decreased by $0.7 million compared to the same quarter last year.

~~BMC~~ Third ~~INDUSTRIES~~quarter revenues for the Optical Products group (OPG) totaled $24.8 million compared to $25.1 million in the prior-year quarter. Lost market share in the highly price sensitive commodity polycarbonate sector was a key factor to reduced sales in the earlier period. Sales management has implemented promotional programs and price changes supported by lower manufacturing costs in Jakarta in an effort to regain lost sales which has positively impacted the third quarter 2003. As a result, ~~INC~~polycarbonate lens sales increased $1.~~MANAGEMENT’S~~6 million compared to the year-ago period. Plastic lens sales, which are generally sold ~~DISCUSSION~~at ~~AND~~lower ~~ANALYSIS~~margins, OFdeclined ~~FINANCIAL~~$0.9 ~~CONDITION~~million ~~AND~~versus ~~RESULTS~~the OFthird quarter 2002. Supply constraints in plastic continued in ~~OPERATIONS~~the third quarter of 2003 hampering sales. Glass lens sales declined $0.8 million compared to last year's third quarter. Although this product line remains profitable, glass as a percentage of the overall lens market has been declining as the market moves to other lens substrates.

~~Comparison~~Cost of ~~three~~products sold on a ~~months~~consolidated ~~ended~~basis ~~June~~was ~~30,~~104% of revenues for the third quarter of 2003, resulting ~~and~~in a negative gross margin. By comparison, cost of products sold was 90% of revenues in the third quarter of 2002 , with a gross margin of 10%.

~~Total~~Buckbee-Mears' cost of products sold was 111% of revenues ~~from~~in ~~continuing operations~~the ~~were~~2003 ~~$42~~period, compared to 90% in the 2002 period.8 ~~million~~Cost ~~for~~of products sold in the ~~second~~2003 quarter ~~ending~~has ~~June~~increased significantly ~~30,~~due ~~2003~~to ~~compared~~factors relating to the restructuring of the Company's ~~$49~~mask operations.2 Low ~~million~~production involumes during ~~second~~the quarter, ~~2003~~including unplanned line shutdowns, resulted in $1.1 million of unabsorbed cost expensed in the period. The ~~revenue~~Company ~~decline~~also recorded severance costs of $60.46 million isduring the aquarter. Price ~~13%~~erosion also ~~reduction~~contributed ~~from~~to ~~second~~the ~~quarter~~increase ~~2002.~~in cost as a percent of revenue.

~~Revenues~~The ofOptical ~~the~~Products ~~Buckbee-Mears~~ group's ~~(BMG)~~cost ~~for~~of ~~the~~products ~~second~~sold ~~quarter~~was ~~decreased $3.1 million, or 16~~99%, ~~from~~of ~~$19.5~~revenues ~~million~~ in ~~2002~~the ~~to $16.4 million in~~ 2003. ~~The~~period, ~~continued~~compared ~~movement~~to ~~of tube production away from BMG’s home~~90% ~~markets,~~in ~~North~~the ~~America~~2002 period and ~~Europe,~~116% toin ~~Asian~~second ~~manufactures~~quarter ~~adversely~~2003. Margins ~~affected~~were ~~sales,~~impacted inby ~~terms~~higher ofproduction ~~mix,~~costs ~~price~~in ~~and~~our ~~volume.~~Ramsey ~~With~~manufacturing ~~worldwide~~plant ~~mask~~in ~~capacity~~previous ~~continuing to exceed demand,~~periods ~~Mask~~that ~~prices~~were ~~remain~~reflected ~~under~~in ~~pressure.~~costs ~~Total~~of ~~mask~~products ~~sales~~sold ~~were~~during ~~down for~~ the quarter. Also, ~~compared~~additional toinventory and other ~~the~~valuation ~~prior~~reserves ~~year’s~~were ~~quarter~~increased by approximately $21.84 million, ~~while~~during ~~non-mask sales declined by $0.3 million.~~the ~~Sales~~quarter ofas ~~monitor~~the ~~mask,~~Company acontinues ~~product~~its ~~line~~restructuring ~~that~~efforts ~~was~~and ~~previously~~cash ~~discontinued, were $1.5~~flow ~~million~~initiatives. During in the second and third quarter of2003, ~~2002.~~operations ~~The~~management ~~balance~~transferred ofpolycarbonate ~~the decline was the result~~ production of ~~a decrease~~an ofadditional ~~$4.4~~15% ~~million~~and in10%, ~~sales~~respectively, to ~~North~~our ~~American customers~~Jakarta, ~~which was partially offset~~Indonesia byplant. As a ~~$3.1~~result, ~~million~~reduced ~~increase~~production costs inwill ~~sales~~improve tomargins ~~Asia.~~as ~~Price~~Jakarta ~~declines~~production ofis 3%sold tofrom ~~5% also negatively impacted sales in the quarter~~inventory.

~~Second~~Selling ~~quarter~~expenses ~~revenues~~were ~~for the Optical Products group (OPG) totaled~~ $262.48 million ~~compared~~or ~~to $29.~~7% ~~million~~of ~~in the~~revenues ~~prior-year~~and ~~quarter, a decline of~~ $32.37 million ~~(11%).~~or ~~Polycarbonate lens sales declined $1.~~6% ~~million~~for ~~compared~~each toof the ~~year-ago~~third ~~period.~~quarters ~~Lost~~of ~~market~~2003 ~~share in the highly price sensitive commodity polycarbonate sector was a key factor to reduced sales. Sales management has implemented programs~~ and ~~price changes supported by lower manufacturing costs in Jakarta in an effort to regain lost sales. Plastic lens sales~~2002, ~~which are lower~~ ~~margin products, declined $0~~respectively.4 Selling ~~million~~expenses ~~versus the second quarter 2002. Supply constraints~~remained inflat ~~plastic continued in the second~~ quarter ofover ~~2003 hampering sales. Glass lens sales declined $1.2 million compared to last year’s second~~ quarter. ~~Although profitable, glass as a percentage of the overall lens market has been declining at an annualized rate of 10% to 15% as the market moves to other substrates.~~

~~Cost~~Administrative ofexpenses ~~products~~were ~~sold~~$5.8 onmillion afor third ~~consolidated~~quarter ~~basis~~2003 ~~was~~compared ~~119%~~to of$1.5 ~~revenues~~million for the ~~second~~same ~~quarter~~period ofin ~~2003,~~2002. The ~~resulting~~increase in ~~a negative~~expenses ~~gross~~is ~~margin.~~due Byprincipally to ~~comparison,~~advisory ~~cost~~service fees of ~~products~~$3.6 ~~sold~~million ~~was~~incurred ~~93%~~in ofconnection ~~revenues~~with inbank compliance issues and the ~~second~~ ~~quarter~~Company's offinancial ~~2002,~~condition. See ~~with~~note a4 ~~gross~~to ~~margin~~the ofconsolidated ~~7%.~~financial statements for additional discussion regarding these fees.

~~Buckbee-Mears’~~Interest ~~cost~~expense ~~of products sold was 125% of revenues~~ in the ~~2003~~third ~~period,~~quarter ~~compared to 93% in the 2002 period. Cost~~ of ~~products~~ ~~sold in the~~ 2003 quarter has increased significantly from factors relating to the restructuring of the Company’s mask operations during the quarter, including insolvency of its European operations. In response to the restructuring and the changes in the Company’s markets and product mix, a complete asset review was ~~performed,~~ ~~including inventory~~$2.6 ~~This~~million ~~review resulted~~ in ~~charges,~~third ~~primarily~~quarter ~~for~~2003 ~~inventory~~compared ~~adjustments, of~~to $32.14 million. Ancompared ~~additional charge of $0.3 million was also taken~~ to ~~account for severance relating to~~ the ~~closure of the Hungry operation. Excluding these charges, cost~~ ofsame ~~products sold in the 2003~~ period ~~would~~last ~~have been $17~~year.~~9 million, or 109% of revenues. Furthermore, lower production volumes during the quarter, including unplanned line shutdowns, resulted in $0.9 million of unabsorbed cost expensed in the period.~~

~~Page~~Other 14income of $0.5 million in the third quarter of 2003 reflects foreign exchange gains and minority interest from the Company's Jakarta operation. Other expense of $0.1 million in the third quarter of 2002 was primarily minority interest from the Company's Jakarta operation. Foreign exchange gains and losses result from foreign exchange adjustments on certain transfers of funds for operating expenses and from purchases of supplies denominated in Japanese yen or European Union euro.

The ~~Optical~~provision ~~Products~~for ~~group’s cost~~income oftaxes ~~products~~for ~~sold~~third ~~was 116% of revenues in the~~ quarter 2003 ~~period,~~included ~~compared~~tax toexpense ~~94%~~associated inwith the ~~2002 period. As part of the overall restructuring to better manage cash and inventory, the~~ Company's ~~discontinued~~subsidiaries ~~some~~in ~~7,000 individual product items deemed not to be critical to our~~various ~~customers,~~locations ~~representing~~outside ~~approximately 20%~~ of the ~~group’s~~United ~~products~~States. In in the ~~second~~ third quarter of ~~2003. As a result~~2002, ~~particular raw materials, finished goods and tooling were written down to net realizable value and other valuation reserves were adjusted in~~ the ~~quarter,~~Company ~~with~~recorded aincome ~~related~~tax ~~impact~~expense ~~to cost~~ of ~~products sold of~~ $60.69 million~~. Excluding the impact of this writedown~~, ~~cost~~which ~~of products sold for the group~~ was ~~$24~~a ~~million~~function inof the ~~2003~~domestic ~~period, or 91% of revenues. Margins were impacted by higher production costs in our Ramsey manufacturing plant in previous periods~~ and ~~were reflected~~foreign inearnings ~~costs of products sold during the quarter. In addition, sales~~ mix ~~was~~for ~~affected by a decrease in higher margin polarized product sales to one major retail chain who reported~~ that ~~the slow economy was diminishing their ability to sell polarized prescription sunwear as a second pair of eyewear~~period. During the second quarter, operations management transferred production of an additional 15% of polycarbonate products to our Jakarta, Indonesia plant. As a result, reduced production costs are expected to improve margins as Jakarta production is sold from inventory.

~~Selling~~Comparison ~~expenses were $3.2 million or 8%~~ of ~~revenues~~nine ~~and~~months ~~$3.1~~ended ~~million~~September or30, ~~6% of revenues for the second quarter of~~ 2003 and 2002~~, respectively. Selling expenses remained flat over this period.~~

~~Interest~~Total ~~expense~~revenues infrom ~~the~~continuing ~~second~~operations for the ~~quarter~~first nine months of 2003 ~~was~~decreased by $216.70 million, ~~relatively~~or ~~equal~~11%, tofrom the ~~same~~first nine ~~period~~months ~~last~~of ~~year~~2002.

~~Other~~Revenues ~~income~~ of ~~$1.0~~the ~~million,~~Buckbee-Mears ingroup (BMG) for the ~~second~~nine-month ~~quarter~~period ofdecreased ~~2003,~~$7.8 ~~reflects~~million ~~the~~or ~~gain~~15% onfrom the ~~sale~~prior year period. Sales of ~~real~~computer ~~estate~~monitor inmasks decreased ~~connection~~$2.9 ~~with the~~million ~~shutdown~~year ofover year due to the ~~St.~~Company's ~~Paul~~exit ~~mask~~from ~~operations~~the computer ~~and~~monitor ~~foreign~~mask ~~exchange~~business ~~gains~~during 2002. Price ~~Other~~decreases ~~income (expense)~~accounted infor the ~~second~~majority ~~quarter~~ of ~~2002~~the ~~was~~$1.9 ~~primarily~~million adrop ~~foreign~~in entertainment ~~exchange~~mask ~~loss~~sales. The ofmarket shift toward Asian tube manufacturers netted a $0.4 2 million. ~~This~~sales ~~loss~~increase ~~was~~with sales ~~from~~to ~~foreign~~Asia ~~exchange~~increasing ~~adjustments~~$3.2 onmillion ~~receivables~~offset ofby Ua $3.S.0 ~~dollar denominated~~million decrease in sales in ~~Europe~~North ~~and~~America. The ~~foreign~~remaining decrease ~~exchange~~of ~~losses~~$3.0 onmillion ~~certain~~is ~~transfers~~attributable ofto ~~funds~~the ~~for~~non-mask operation, which has ~~operating~~been ~~expenses~~discontinued.

~~The~~Revenues ~~provision~~ for ~~income~~the ~~taxes~~Optical ~~was (15%)~~Products ~~and~~group ~~17%~~in the first nine months of ~~pre-tax~~2003 ~~income~~totaled $78.8 million compared to $87.1 million in the prior-year, ~~second~~a ~~quarter~~decline of ~~2003~~$8.3 ~~and~~million ~~2002,~~(10%). Polycarbonate ~~respectively~~lens sales declined $0.5 In million from the ~~second~~year-ago period. Lost ~~quarter~~market ofshare ~~2003,~~in the ~~Company~~highly price ~~provided~~sensitive ancommodity ~~additional~~polycarbonate $9sector was a key factor to reduced sales.9 ~~million~~Sales ~~for~~management ~~the~~has enacted ~~remaining~~programs ~~tax~~and ~~assets~~price changes based on lower manufacturing costs in Jakarta in an effort to regain share which is evidenced by the ~~balance~~increase ~~sheet.~~in ~~Given~~polycarbonate sales ~~its~~for the current ~~financial~~quarter ~~condition,~~as ~~material uncertainty~~discussed ~~regarding~~earlier. Still ~~future~~affecting ~~prospects~~2003 sales efforts, ~~and~~was the ~~insolvency~~Company's ~~actions~~inability ~~pertaining~~ to fully meet customer demands in the ~~German~~first ~~subsidiary~~half of 2002, ~~the~~which resulted in customers sourcing their product needs elsewhere. The Company ~~determined~~is ~~that~~making significant itimprovements ~~could~~in nocustomer ~~longer~~service ~~reasonably~~and ~~expect~~is tore-establishing ~~recognize~~relationships ~~the~~with ~~tax~~former ~~benefits~~customers and building new customer relationships. Lower-margin Inplastic lens ~~future~~sales ~~periods,~~declined $2.7 million versus the ~~Company~~first ~~will~~nine ~~evaluate~~month ~~business~~of 2002. Glass lens sales declined $3.7 million ~~conditions~~compared ~~and~~to ~~adjust~~last ~~the~~year's ~~valuation~~first ~~reserve~~nine ~~accordingly~~months. ~~The~~Although ~~2002~~glass ~~tax~~product ~~rate~~is ~~was~~still profitable, glass sales as a ~~function~~percentage of the overall lens market has been declining at a year over year rate of 10% to 15% as the ~~Company’s~~market ~~domestic~~moves ~~and~~to ~~foreign~~other lens ~~earnings~~substrates. Supply ~~mix~~constraints in plastic continue to hamper sales.

~~Since~~Cost ~~the end~~ of ~~June,~~products ~~BMG~~sold ~~has~~on ~~initiated~~a consolidated ~~further~~basis ~~cost~~was ~~savings~~100% ~~including an additional workforce reduction~~ of 89revenues ~~salaried and~~for ~~hourly~~the ~~employees~~nine inmonths ~~its Cortland plant. The group expects to decrease payroll and other expenses by an estimated~~ended ~~$4.6~~September ~~million~~30, ~~annually as a result~~2003. ~~Cash~~ ~~severance~~By ~~payments are expected to total approximately $0.3 million~~comparison, ~~which will be included in~~ cost of products sold inwas ~~the~~93% ~~third quarter~~ of ~~2003. Vision-Ease~~revenues ~~and the company’s corporate office (which were integrated last year) are also taking additional steps to restructure~~ in ~~light of current market conditions and~~ ~~recent~~the ~~performance. This~~2002 ~~group is reducing headcount further~~period, ~~eliminating 31 positions at the division level and corporate office--~~with ana ~~estimated~~gross ~~annual~~margin ~~savings~~ of $27%.~~6 million. These savings are expected to be reduced by $0.2 million in cash severance payments, which will be included in cost of products sold in the third quarter of 2003.~~

~~Comparison~~Buckbee-Mears' cost of products ~~six~~sold ~~months~~was 111% of revenues in the 2003 period, compared to 96% in the 2002 period. The restructuring of the Company's mask operation in the second quarter of 2003 significantly affected cost of products sold for the nine-month period ended ~~June~~September 30, 2003. The decrease in margins reflects the change in product mix and ~~2002~~ the movement of sales to Asian tube manufacturers. Continued pressure on mask prices and margins is expected because of the overcapacity in mask production in the market.

~~Total~~The ~~consolidated~~Optical ~~revenue~~Products ~~for the~~group's ~~six~~cost ~~months~~of products sold was 94% of ~~2003~~revenues ~~decreased~~in bythe ~~$13.8~~2003 ~~million~~period, orcompared 14to 91%, in ~~from~~ the ~~first~~same ~~six~~2002 ~~months~~period. ofAs ~~2002. Revenues~~part of the ~~Buckbee-Mears~~overall ~~group~~restructuring ~~(BMG)~~initiated ~~for~~in second quarter 2003, the ~~six-month~~Company ~~period~~discontinued ~~decreased~~some ~~18%~~7,000 ~~from~~individual ~~the~~product ~~prior~~items, ~~year~~representing ~~period.~~approximately ~~Non-Mask~~20% ~~revenue~~of ~~fell~~the $1group's products.6 As ~~million~~a result, ~~primarily~~related ~~due~~raw tomaterials, ~~the~~finished goods ~~sale~~and oftooling ~~the sheet-etching~~were ~~product~~written ~~line~~down into ~~2002.~~net ~~Sales~~realizable ofvalue. Together ~~computer~~with ~~monitor~~other ~~masks~~valuation ~~decreased~~reserves adjustments ~~$1.9~~during ~~million~~ the year, ~~over~~the ~~year~~total ~~due~~impact to ~~the~~cost ~~Company’s~~of ~~exit~~products ~~from~~sold ~~the~~of reserve ~~computer~~changes ~~monitor~~was ~~mask~~$6.4 ~~business~~million. ~~Price~~In ~~pressures~~the ~~and~~first nine amonths ~~market~~of ~~shift~~2002, ~~toward~~margins ~~Asian tube manufacturers~~ were ~~the~~negatively ~~cause~~impacted ofby a $2.98 million restructuring ~~drop~~charge inrelated ~~television~~to ~~mask~~the ~~sales.~~closure ~~This~~of ~~drop was~~ the ~~net~~Azusa ~~result~~plant ofand ~~an $8.6~~the ~~million~~associated ~~decrease~~cost inof ~~sales~~relocating inthose ~~North~~operations ~~America~~to Ramsey, ~~partially~~Minnesota ~~offset~~and Jakarta, byIndonesia afacilities. After ~~sales~~the ~~increase~~transfer of ~~$5.7 million~~production capacity to ~~Asia.~~Jakarta in ~~The~~the ~~remainder~~fourth quarter of ~~the~~2002 ~~decline~~and ~~occurred~~the insecond ~~the~~quarter ~~non-mask~~of ~~operation~~2003, ~~which~~this facility ~~has~~represents ~~since~~approximately ~~been~~40% ~~discontinued~~of Vision-Ease's total polycarbonate production.

~~Revenues~~Selling ~~for~~expenses ~~the~~were ~~Optical~~$8.4 ~~Products group~~million, inor ~~the~~7%, ~~first six months~~ of revenues ~~2003~~and ~~totaled~~ $558.39 million, ~~compared~~or to6%, ~~$62.9~~of ~~million~~revenues in for the ~~prior-year~~first ~~quarter,~~nine amonths ~~decline~~ of ~~$7.6~~2003 and ~~million~~2002, ~~(12%)~~respectively. Year ~~Polycarbonate~~over ~~lens sales~~year ~~declined~~selling ~~$2.6~~expenses ~~million~~have ~~compared~~declined toslightly from the ~~year-ago~~first ~~period.~~nine ~~Lost~~months ~~market~~of ~~share~~2002 because inof ~~the~~prior ~~highly price~~restructuring ~~sensitive~~ actions and cost control efforts.

~~Page~~Administrative 15expenses were $9.0 million for the year to date period in 2003 compared to $4.7 million for the same period in 2002. The increase in expenses is due to advisory service fees incurred in connection with bank compliance issues and the Company's financial condition. See note 4 for additional discussion regarding these fees.

~~commodity~~Interest ~~polycarbonate~~expense ~~sector was a key factor to reduced sales. Sales management has enacted programs and price changes based on lower manufacturing costs~~ in ~~Jakarta in an effort to regain share. Sales also did not benefit as expected in~~ the ~~second~~first ~~quarter~~nine months of 2003 ~~due to a product launch~~ ~~postponement. Still affecting 2003 sales efforts,~~ was ~~the~~$8.2 ~~Company’s~~million ~~inability~~compared to ~~fully~~ ~~meet~~$7.6 ~~customer~~million ~~demands~~ in the first ~~half~~nine ofmonths of 2002,. Higher ~~which~~average ~~resulted~~debt ~~in customers~~levels ~~fulfilling~~relative ~~their~~to ~~product~~2002 ~~needs~~resulted ~~elsewhere. The Company is making significant improvements~~ in ~~customer~~a ~~service~~larger ~~and~~interest isburden ~~re-establishing~~during ~~relationships with former customers and building new customer relationships. Lower-margin, plastic lens sales declined $1.8 million versus~~ the first ~~six month of 2002. Glass lens sales declined $2.9 million~~nine ~~compared to last year’s first six~~ months. ~~Although profitable, glass as a percentage~~ of ~~the overall lens market has been declining at a year over year rate of 10% to 15% as the market moves to other substrates~~2003. ~~Supply constraints in plastic continue to hamper sales.~~

~~Cost~~Other ofincome ~~products~~totaling ~~sold~~$0.6 onmillion ~~a consolidated~~for ~~basis~~the ~~was~~first nine ~~101%~~months of ~~revenues~~2003 ~~for~~is ~~the~~primarily ~~six~~from ~~months~~foreign ~~ended~~exchange ~~June~~gains ~~30,~~on ~~2003,~~European receivables ~~resulting~~and inintercompany afunds ~~negative~~transfers ~~gross~~and ~~margin~~on the sale of assets. ByOther ~~comparison,~~income ~~cost~~for the first nine months of ~~products~~2002 ~~sold~~included ~~was~~a ~~95%~~$3.5 ~~of revenues~~million ingain related to the ~~2002~~sale of ~~period,~~the ~~with~~Optical aProducts ~~gross~~segment's ~~margin~~Optifacts ofsoftware ~~5%.~~unit, partially offset by foreign exchange losses.

~~Buckbee-Mears’~~The ~~cost~~provision offor ~~products sold~~income ~~was~~taxes ~~110%~~ of ~~revenues~~$10.1 inmillion for the ~~2003~~nine-month period, ~~compared~~ended toSeptember ~~98%~~30, in2003 ~~the~~included ~~2002~~a ~~period~~$9.9 ~~The~~million increase ~~restructuring~~in of the ~~Company’s~~tax ~~mask~~valuation ~~operation~~reserve infor the ~~second~~remaining ~~quarter~~tax ofassets ~~2003,~~on asthe Company's ~~described~~balance ~~above~~sheet. inThe ~~the~~remaining ~~discussion~~tax ofexpense ~~the~~is ~~three~~associated ~~month~~with ~~period,~~the ~~significantly affected cost~~Company's ofsubsidiaries ~~products sold~~ in ~~the~~various ~~first~~locations ~~half~~outside of ~~2003~~the United States. ~~Excluding~~Given ~~these~~its current ~~charges~~financial condition, ~~cost~~material ofuncertainty ~~products~~regarding ~~sold~~future prospects, inand the ~~first~~insolvency ~~six~~actions ~~months~~pertaining ofto ~~2003~~the ~~would~~German ~~have~~subsidiary, ~~been~~the ~~$30.2~~Company determined ~~million,~~that orit ~~102%~~could ofnot ~~revenues.~~longer ~~The increase~~reasonably ~~reflects~~expect ~~the~~to ~~change~~recognize inthe ~~product~~tax benefits. In ~~mix~~future ~~and~~periods, the Company ~~movement~~will ofevaluate ~~sales~~business toconditions ~~Asian~~and ~~tube~~adjust the valuation reserve ~~manufactures~~accordingly. The ~~With~~2002 antax ~~overcapacity~~rate inwas ~~mask~~a function ~~production,~~of ~~continued~~the ~~pressure~~Company's ondomestic ~~mask~~and ~~margins is~~foreign ~~expected.~~earnings mix.

The Optical Products group’s cost of products sold was 96% of revenues in the 2003 period, compared to 92% in the same 2002 period. As part of the overall restructuring, the Company discontinued some 7,000 individual product items, representing approximately 20% of the group’s products in the second quarter 2003. As a result, particular raw materials, finished goods and tooling were written down to net realizable value and other valuation reserves were adjusted in the quarter, with a related impact to cost of products sold of $6.6 million. Excluding the impact of this write-down, cost of products sold for the group was $46.3 million in the 2003 period, or 84% of revenues. In the first six months of 2002, margins were negatively impacted by a $2.8 million restructuring charge related to the closure of the Azusa plant and the associated relocation cost of those operations to Ramsey, Minnesota and Jakarta, Indonesia facilities. After the transfer of production capacity to Jakarta in the fourth quarter of 2002 and the second quarter of 2003, this facility represents approximately 45% of Vision-Ease’s total polycarbonate production.

Selling expenses were $6.2 million, or 7%, of revenues and $6.4 million, or 7%, of revenues for the first six months of 2003 and 2002, respectively. Year over year selling expenses have remained relatively flat as compared to the first six months of 2003.

Interest expense in the first six months of 2003 was $5.6 million compared to $5.2 million in the first six months of 2002. Higher average debt levels relative to the first six months of 2002 resulted in a larger interest burden during the first six months of 2003.

Other income totaling $0.8 million for the first six months of 2003 is primarily from foreign exchange and the sale of assets. Other income for the first six months of 2002 included a $3.5 million gain related to the sale of the Optical Products segment’s Optifacts software unit, partially offset by foreign exchange losses on European receivables and intercompany funds transfers.

Page 16

The provision for income taxes was (16%) and 0.5% of pre-tax income for the first six months of 2003 and 2002, respectively. In the second quarter of 2003, the Company provided an additional $9.9 million for the remaining tax assets on the balance sheet. Given its current financial condition, material uncertainty regarding future prospects, and the insolvency actions pertaining to the German subsidiary, the Company determined that it could not longer reasonably expect to recognize the tax benefits. In future periods, the Company will evaluate business conditions and adjust the valuation reserve accordingly. The 2002 tax rate was a function of the Company’s domestic and foreign earnings mix.

MARKET RISK

In addition to the market risks disclosed in our Annual Report on Form 10-K for the year ended December 31, 2002, the Buckbee-Mears mask business faces an accelerated decline in its home markets as ~~production~~ production moves to Asia. Additionally, it is possible that our former German operations could emerge from ~~is solvency~~ insolvency and compete directly against the Buckbee-Mears group in the Mask market.

FOREIGN CURRENCY

A portion of the Company’'s operations consists of manufacturing and sales activities in foreign jurisdictions. The Company manufactures its products in the United States, ~~Germany, Hungary~~ and Indonesia and purchases raw materials and products for resale from Asian, asand ~~well as~~ other foreign suppliers., which can be denominated in the Japanese yen or the European Union euro. The Company sells its products in the United States and ~~into~~in various foreign markets. The Company’'s sales are typically denominated in either the U.S. dollar or the ~~European Union~~ euro. Buckbee-Mears also has an indirect exposure to the Japanese yen and the Korean won because its most significant competitors are Japanese and Korean. As a result, the Company’'s financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. In addition, sales of products overseas are affected by the value of the U.S. dollar relative to other currencies. Long-term strengthening of the U.S. dollar may have an adverse effect on these sales and competitive conditions in the Company’'s markets and may limit the Company’'s ability to increase product pricing in times of adverse currency movements.

To manage the volatility relating to these exposures, the Company utilizes from time to time various derivative instruments, including foreign currency forward-exchange contracts. As of ~~June~~September 30, 2003, the Company had no forward foreign currency contracts in place.

FINANCIAL POSITION AND LIQUIDITY

Total consolidated debt at ~~June~~September 30, 2003 ~~was~~and at June 30, 2003 was $130.7 million, compared to $112.3 million at December 31, ~~2003, an increase of $18.4~~ ~~million~~2002. The Company’'s total debt under its domestic credit agreement at ~~June~~September 30, 2003 was $130.1 million. The remaining $0.6 million relates primarily to debt associated with the Company’'s Hungarian ~~inspection facility~~subsidiary.

~~Working~~BMC's ~~capital~~cash ~~which~~and ~~includes~~cash ~~$130.7~~equivalents ~~million~~balance ofat ~~current~~September ~~debt~~30, 2003, was ~~a negative~~ $835.10 million~~. Working capital at June 30~~, ~~2003 excluding~~down ~~current~~slightly ~~debt~~from ~~was~~ $~~47.~~5 .6 million at June 30, 2003, ~~compared~~and toup from $~~44.~~1.6 million at December 31, 2002. At ~~The~~present, ~~current~~the Company ~~ratio~~is ~~was~~unable ~~0.5~~to ~~and~~borrow further ~~1.8~~funds atunder ~~June~~its ~~30,~~bank ~~2003~~credit ~~and~~facility. To ~~December~~operate ~~31, 2002,~~within ~~respectively.~~this ~~The~~limitation, ~~ratio~~the ofCompany ~~debt~~is attempting to ~~capitalization~~reduce its ~~was141%~~operating atcosts ~~June~~as ~~30,~~well ~~2003~~as ~~and~~working ~~65% at~~with ~~December~~its ~~31,~~vendors ~~2002.~~and customers to conserve cash.

~~Virtually~~Working ~~all~~capital, ofwhich ~~the~~includes ~~Company’s~~$130.7 million of current debt, iswas ~~pursuant~~a tonegative ~~its~~$89.5 ~~domestic~~million. Working ~~credit~~capital ~~agreement~~at ~~(the~~September ~~“Agreement”)~~30, ~~providing for~~2003, ~~total~~excluding ~~term~~current ~~loans~~debt, ofwas $~~110~~41.02 million compared to $53.8 million at December 31, 2002. The current ratio was 0.5 and ~~additional~~1.8 ~~revolving~~at September ~~credit~~30, ~~subject~~2003 toand ~~a borrowing~~December ~~base~~31, ~~requirements~~2002, respectively. The Asratio of ~~June~~debt to capitalization was 152% at September 30, 2003, ~~the~~and ~~Company~~65% ~~had~~at ~~under~~December ~~its~~31, ~~Agreement $101~~2002.5

~~Page~~The 17Company's current financial condition and liquidity position may jeopardized customer and vendor confidence and could affect future sales and the supply of materials and services.

~~million~~Virtually all of ~~term~~the Company's debt is pursuant to its domestic credit agreement (the "Agreement"), which provides for total term loans ~~and~~of up to $28110.6 0 million ofand additional revolving ~~loans~~credit ~~outstanding,~~subject ~~for~~to borrowing ~~total~~base ~~debt~~requirements ~~outstanding~~up ofto $~~130~~35.10 million. ~~The~~As of September 30, 2003, the Company ishad ~~required~~$101.5 million of term loans and $28.6 million of revolving loans outstanding under ~~the~~its Agreement. The Agreement requires the Company to make term loan amortization ~~payments~~payment of $3.5 million at the end of each calendar quarter beginning in 2003; however, the requirement to make payments onin ~~June 30,~~the ~~2003~~second ~~was~~and ~~deferred~~third asquarters ~~described~~of ~~below.~~2003 ~~The~~was ~~Company~~deferred. During ~~does~~the ~~not~~waiver ~~have~~period ~~additional~~describe ~~borrowing available~~below, ~~during~~ the ~~period~~Company ofcannot borrow ~~the~~additional ~~waiver from covenant violations described below~~funds. The Company also has $3.2 million of letters of credit outstanding under the Agreement. Total debt outstanding under the Agreement ~~was as high as~~ of $130.1 million did not change during the quarter ended ~~June~~September 30, 2003,. The ~~with an~~ average daily outstanding ~~balance of $126.8 million during~~ ~~the~~balances ~~quarter.~~under ~~By comparison,~~ the ~~average~~Agreement ~~daily outstanding balances~~ were $~~125~~130.21 million in the quarter ended ~~March 31~~September 30, 2003, ~~and~~ $~~122~~126.~~3million~~8 million in the quarter ended ~~December~~June 3130, ~~2002.~~ ~~The Company has historically had uneven intra-quarter cash flows~~2003, $125.2 ~~with~~million ~~a significant amount of customer receipts received~~ in the ~~latter~~quarter ~~part~~ended ~~of each month. In an~~March ~~effort to meet financial covenants~~31, ~~which~~2003 ~~are~~and ~~typically~~$122.3 ~~measured~~million ~~at quarter-ends, the Company has taken action~~ in the ~~past to minimize its outstanding debt at each~~ quarter ~~end.~~ Asended aDecember ~~result~~31, ~~the Company’s intra-quarter debt balances have fluctuated significantly from those debt balances reported at quarter end~~2002.

AsThe ~~of June 30, 2003, the~~ Company ~~failed~~ tohas ~~comply~~historically ~~with~~had ~~the~~material ~~following covenants and requirements: (1) The Company failed to~~variances ~~make $3,500~~ in ~~scheduled~~its ~~principal~~intra-quarter ~~payments~~cash ~~due on June 30~~flows, ~~2003.~~with ~~(2) The Company did not satisfy~~ a ~~total~~significant ~~debt~~amount toof ~~trailing~~customer ~~12-month EBITDA ratio, which was not to exceed 3.50 times~~receipts atreceived ~~June~~in ~~30, 2003. On that date,~~ the ~~Company~~latter ~~failed~~part toof ~~meet~~each ~~this covenant~~month. ~~The ratio could~~ ~~not be calculated~~Also, ~~because the Company’s trailing 12 month EBITDA was negative $32,367, compared to total debt, as defined~~ in ~~the~~an ~~agreement,~~effort ~~of $131,564 (3) The Company did not satisfy a total trailing 12-month EBITDA~~ to ~~interest~~meet ~~expense~~financial ~~ratio~~covenants, which ~~was~~ toare ~~exceed~~measured ~~2.25 times~~ at ~~June 30, 2003. On that date, the ratio was negative 2.95times.~~ ~~(4) The Company did not satisfy a covenant that required its consolidated net worth to exceed a minimum amount as defined in the Agreement. On that date~~quarter-ends, the Company~~’s consolidated~~ ~~net~~has ~~worth~~taken asaction ~~defined~~ in the ~~Agreement~~past ~~was $84,698 below the minimum covenant level of $169,588. In addition~~ to ~~these~~minimize ~~failures to comply with covenants, on July 1,~~its ~~2003,~~outstanding ~~the~~debt ~~Company~~at ~~also~~each ~~failed~~quarter ~~to make a payment of $1,024 in fees due on that date~~end. On ~~July~~As 2,a ~~2003~~result, the Company's ~~received short~~intra-~~term~~quarter ~~waivers~~debt ~~of these covenants from its bank lenders,~~ and oncash ~~July~~balances ~~16, 2003, the waiver was extended through September 15, 2003.~~have ~~However,~~varied ifsignificantly ~~the~~from ~~Company~~those ~~defaults~~debt ~~under any other covenants under the Agreement, the lenders can terminate the waiver~~ and ~~immediately~~cash ~~declare~~balances areported ~~default~~at ~~under~~quarter ~~the Agreement~~end.

~~Pursuant~~As toof ~~the~~September ~~waivers~~30, 2003, the ~~banks determined~~Company ~~that~~did nonot ~~additional~~comply with ~~borrowings~~the ~~would~~following becovenants ~~extended~~and torequirements: (1) the Company ~~under~~failed ~~the~~to make ~~Agreement~~$3.5 ~~during~~million ~~the~~in ~~waiver~~scheduled ~~period.~~principal Onpayments ~~July~~due on September 30 and on June 30, 2003,. ~~the~~(2) The Company ~~also~~did ~~received~~not satisfy a ~~temporary~~ ~~deferral~~total ~~agreement~~debt ~~relating~~ to atrailing ~~total~~12-month ofEBITDA ~~approximately~~ratio, ~~$687~~which ~~thousand~~was ~~in scheduled~~not ~~interest~~to ~~payments~~exceed on3.25 ~~floating~~times ~~rate~~at ~~notes~~September in30, ~~late~~2003. The ~~July~~ratio ~~and~~could ~~early~~not ~~August~~be ~~2003.~~calculated, ~~The~~because ~~deferral~~the ~~agreement,~~Company's ~~subject~~trailing to12 ~~certain~~month ~~conditions,~~EBITDA ~~defers~~was ~~these~~negative ~~interest~~$46.3 ~~payments~~million, ~~until~~compared to ~~August~~total 28debt, ~~2003.~~as ~~The~~defined ~~Company~~in isthe ~~continuing~~Agreement, ~~discussions~~of ~~with~~$131.5 ~~its~~million.(3) ~~banks~~The Company ~~regarding~~did not satisfy a ~~further extension~~total oftrailing ~~the~~12-month ~~deferral~~EBITDA ofto interest ~~payments~~expense ratio, which was to exceed 2.50 times at September 1530, 2003. The ~~and~~ratio ancould ~~overall~~not be calculated because ~~restructuring~~the ofCompany's ~~our~~trailing ~~financing~~12 month EBITDA was negative $46.3 Ifmillion. (4) ~~the~~The Company ~~cannot~~did ~~obtain~~not ~~further~~satisfy ~~relief~~a ~~from the~~covenant ~~covenants~~that ~~and~~required ~~other~~its ~~requirements~~consolidated innet ~~the~~worth ~~Agreement,~~to itexceed ~~will~~a ~~likely~~minimum ~~default~~amount ~~under~~as ~~the~~defined ~~Agreement~~in asthe ofAgreement. On ~~either~~that ~~August 28~~date, ~~2003~~the Company's orconsolidated ~~September~~net ~~15,~~worth ~~2003.~~as Itdefined isin ~~unlikely~~the ~~that~~Agreement ~~BMC~~was ~~will~~$74.6 million, bebelow ~~able~~the tominimum ~~negotiate~~covenant ~~alternative~~level ~~financing~~of ~~arrangements~~$169.6 ~~before~~million. (5) ~~the~~The ~~waiver~~Company's preliminary isborrowing ~~set~~base tocalculations ~~expire on~~for ~~September~~August 1531, 2003., ~~The~~and ~~failure~~September to30, 2003, ~~obtain~~showed ~~such~~overadvances ~~financing~~of $3,023 orand to$1,976, ~~maintain compliance~~respectively. The ~~with~~Agreement ~~all~~provides ~~convenants~~that ~~under~~ the ~~Agreement,~~Company ~~would~~will ~~result~~make inrevolving aloan ~~default~~payments ~~under~~upon ~~the Agreement,~~any ~~which,~~overadvance into ~~turn~~correct ~~would~~any ~~give~~deficiencies. ~~our~~In ~~lenders~~addition ~~the~~to ~~ability~~these failures to ~~accelerate~~comply ~~outstanding~~with ~~debt.~~covenants, Inon ~~such~~July ~~event~~1, ~~BMC~~2003, ~~would~~the ~~need~~Company failed to ~~refinance~~make ora ~~restructure~~payment ~~its~~of ~~debt~~$1.0 ~~and,~~million ifin ~~unsuccessful~~fees indue ~~these~~on ~~efforts~~that date. However, toif ~~consider~~the ~~all~~Company defaults under any other ~~options~~covenants under the Agreement, ~~including~~the lenders can terminate the waiver and immediately declare a ~~restructuring~~default under the ~~bankruptcy laws~~Agreement.

~~Page~~On 18July 2, 2003, the Company received a short-term waiver of these covenants from its bank lenders, and on July 16, 2003, the waiver was extended through September 15, 2003. On July 30, 2003, the Company also received a temporary deferral agreement relating to a total of approximately $0.7 million in scheduled interest payments on floating rate notes under the agreement due in late July and early August 2003. The deferral agreement, subject to certain conditions, deferred these interest payments until August 28, 2003.

InOn ~~addition~~August to29, ~~maintaining compliance with covenants~~2003, ~~BMC~~the ~~must~~Company ~~continue~~received toan additional ~~meet~~temporary ~~its~~deferral ~~ongoing~~of ~~operational~~interest ~~funding~~payments ~~requirements. Our~~that ~~cost~~also ofextended ~~borrowing~~to September ~~and~~15, ~~access~~2003 to ~~capital~~coincide ~~has~~with ~~deteriorated~~termination ~~significantly~~of asthe ~~a consequence,~~waiver. The ~~BMC~~agreement ~~has~~deferred ~~retained~~interest ~~financial~~totaling $1.1 ~~advisors~~million. This towas ~~help~~in ~~work~~addition ~~through these liquidity~~to ~~issues~~$0.7 ~~and~~million ~~avoid~~of ~~further~~interest ~~defaults~~payments ~~under~~that ~~the~~were ~~Agreement.~~deferred ~~BMC’s~~under ~~initial priority in~~ the earlier ~~short-term~~temporary isdeferral toagreement ~~avoid~~dated ~~the~~July ~~acceleration~~30, ~~of our debt~~2003.

InOn ~~the~~September ~~short~~16, ~~term~~2003, the Company received an additional ~~intends~~60-day towaiver ~~maximize~~of these same covenants under its ~~cash~~Agreement. The ~~resources~~waiver byextended ~~selling~~the ~~non-essential~~time ~~property~~period ~~and~~for ~~equipment~~BMC ~~which~~to ~~may,~~make ~~depending~~certain onscheduled ~~proceeds~~principal ~~received,~~and ~~result~~fee inpayments, ~~additional~~and ~~charges~~further todefers ~~income. Cash~~all ~~will~~expected interest ~~also~~payment beobligations ~~maximized~~until byNovember ~~reducing~~14, ~~raw~~2003, ~~materials~~the ~~costs,~~termination bydate ~~deferring~~of the ~~capital~~waiver ~~equipment~~extension. The agreement ~~expenditures,~~defers byinterest ~~deferring~~totaling ~~other~~approximately ~~non-essential~~$3.2 ~~costs~~million, bya ~~offering~~combination ~~favorable~~of ~~payment terms~~interest topayments ~~customers~~deferred to ~~encourage~~date ~~prompt~~and ~~payment,~~further ~~and~~interest bypayments ~~reducing~~coming ~~production~~due ~~levels.~~through November 14, 2003. The earlier ~~Company~~agreement, ~~believes~~subject ~~these~~to ~~approaches~~certain ~~will~~conditions, ~~enable~~had ~~the~~deferred ~~Company~~interest topayments ~~meet~~until September ~~its~~15, ~~short-term~~2003. Subsequent ~~working~~to the ~~capital~~granting ~~needs.~~of ~~However~~this waiver, the ~~lack~~Company ofhas ~~revolver~~sold ~~availability~~certain ~~may~~assets ~~adversely~~and ~~affect~~used the net ~~Company’s~~proceeds ~~ability~~ to ~~respond~~reduce tothe ~~unexpected~~total ~~cash~~deferred ~~needs~~interest ~~and~~due ~~may~~on ~~cause~~November ~~the~~14, ~~Company~~2003 to ~~exhaust~~approximately ~~its current cash balance~~$0.8 million.

~~The~~In ~~Company~~addition ~~continues~~ to ~~work~~maintaining ~~with~~compliance ~~its lenders and advisors to secure a longer-term alternative to BMC’s existing~~with ~~financing or other agreement for the restructuring of outstanding debt, including relief from certain~~ covenants, ~~extended~~ ~~payment terms and additional borrowing capacity. If~~ BMC ismust ~~unable~~continue to ~~achieve~~ ~~additional~~meet ~~waivers~~its orongoing ~~other relief~~operational ~~from covenants, payment obligations and other~~ funding requirements. The ~~under the Agreement, the~~ Company's ~~likely~~cost ~~will be in~~of ~~default~~borrowing ~~under~~and ~~the~~access ~~Agreement~~to ascapital ofhas ~~either~~deteriorated ~~August 28, 2003 or September 15, 2003~~significantly. ~~Given~~ As ~~the~~a ~~current market environment~~consequence, ~~it is unlikely that~~ BMC ~~will~~has beretained ~~able to negotiate such alternative arrangements before the most recent~~financial ~~waiver~~advisors ~~expires on September 15, 2003. The failure~~ to ~~maintain~~help ~~compliance with all covenants under the Agreement would result~~ in finding a ~~default~~solution ~~under the Agreement, which would give our lenders the ability~~ to ~~accelerate~~these ~~all~~liquidity ~~outstanding~~issues ~~debt. In such event, BMC would need to refinance or restructure the Company’s debt~~ and, ~~if unsuccessful in these efforts,~~avoid tofurther ~~consider~~defaults ~~all other options, including seeking protection~~ under the ~~bankruptcy laws~~Agreement.

In ~~addition to~~ the ~~covenant~~short ~~requirements~~term, ~~BMC~~the ~~must~~Company intends ~~continue~~ to ~~meet~~maximize ~~ongoing~~its ~~operational~~cash ~~funding~~resources ~~requirements. As~~by ~~a result~~selling ofnon-essential ~~BMC’s~~property ~~recent~~and equipment, ~~downturn~~which ~~in performance~~may, ~~however,~~depending ~~the~~on ~~cost~~proceeds ofreceived, ~~borrowing~~result ~~and~~in ~~access~~additional charges to ~~capital~~income. Cash ~~available~~will toalso usbe ~~has~~maximized ~~deteriorated. As~~by areducing ~~consequence~~raw materials costs, ~~BMC~~by ~~retained~~deferring ~~William~~capital ~~Blair~~equipment expenditures, &by ~~Company~~deferring ~~(“Blair”)~~other tonon-essential ~~assist~~costs, ~~BMC~~by inoffering ~~exploring~~favorable ~~strategic~~payment ~~alternatives. Early~~terms into ~~third~~customers ~~quarter~~to ~~2003~~encourage prompt payment, ~~Blair~~and ~~completed~~by ~~its~~reducing production ~~presentation~~levels. The ofCompany believes ~~alternatives~~these toapproaches will enable the Company~~, which~~ ~~concluded~~to ~~the~~meet ~~firm’s~~its ~~work~~short-term working ~~for~~capital ~~BMC~~needs. ~~The~~ ~~Company~~However, ~~then announced~~ the ~~retention~~lack of arevolver ~~financial~~availability ~~advisor~~may ~~to assist~~adversely ~~BMC~~affect ~~and~~the ~~its~~Company's ~~lenders~~ability into ~~developing~~respond ato ~~comprehensive~~unexpected ~~restructuring~~cash ~~plan~~needs ~~for~~and may cause the Company’s ~~operations~~to ~~and~~exhaust ~~capital structure~~its current cash balance.

ENVIRONMENTAL

BMC’'s operations are subject to federal, state, local and foreign environmental laws and regulations. Under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (CERCLA or Superfund), BMC has been designated as a potentially responsible party (PRP) by the United States Environmental Protection Agency with respect to certain waste sites at which we may have had direct or indirect involvement. Similar designations have been made by some state environmental agencies under applicable state environmental laws. Such designations are made regardless of the extent of our involvement. Such designations have been made by the filing of a complaint, the issuance of an administrative directive or order, or the issuance of a notice or demand letter. These actions are in various ~~stages~~ stages of administrative or judicial proceedings. They include demands for recovery of past governmental costs and/or for future investigative or remedial actions. In some cases, the dollar amount of site costs or our portion of site costs is not specified. In most cases, however, BMC has been designated a de minimis party and claims have been asserted against a number of other entities for the same recovery or other relief as was asserted against BMC. We are currently involved in seven environmental investigations and/or remedial actions in which final settlement has not been reached.

~~Page~~To 19the extent possible, and with the amount of information available at this time, we have evaluated our responsibility for costs and related liability with respect to environmental investigations and/or remedial actions and recorded reserves for such liability in accordance with generally accepted accounting principles. The reserves represent management's best estimate, after reviewing expected costs with independent consultants, attorneys and other third parties assisting with environmental matters, of the expected costs. Management does not believe there are reasonably possible material losses in excess of the reserves. Therefore, it is BMC's opinion that our liability with respect to these matters should not have a material adverse effect on our financial position or the results of operations. In arriving at this conclusion, we have considered, among other things, the payments that have been made in the past; the factors, such as volume and relative toxicity, ordinarily applied to allocated defense and remedial costs; the probable costs to be paid by the other potentially responsible parties; total projected remedial costs, to the extent known; existing technology; and currently enacted laws and regulations. A portion of the costs and related liability for these matters has been or will be covered by insurance or third parties.

To the extent possible, and with the amount of information available at this time, we have evaluated our responsibility for costs and related liability with respect to environmental investigations and/or remedial actions and recorded reserves for such liability in accordance with generally accepted accounting principles. The reserves represent management’s best estimate, after reviewing expected costs with independent consultants, attorneys and other third parties assisting with environmental matters, of the expected costs. Management does not believe there are reasonably possible material losses in excess of the reserves. Therefore, it is BMC’s opinion that our liability with respect to these matters should not have a material adverse effect on our financial position or the results of operations. In arriving at this conclusion, we have considered, among other things, the payments that have been made in the past; the factors, such as volume and relative toxicity, ordinarily applied to allocated defense and remedial costs; the probable costs to be paid by the other potentially responsible parties; total projected remedial costs, to the extent known; existing technology; and currently enacted laws and regulations. A portion of the costs and related liability for these matters has been or will be covered by insurance or third parties.

CAUTIONARY STATEMENTS

Certain statements included in this Management’'s Discussion and Analysis of Financial Condition and Results of Operations ~~and~~ and elsewhere in this Form 10-Q by the Company or its representatives, as well as ~~other~~ other communications, including reports to shareholders, news releases and presentations to lenders or investors, contain forward-looking statements made in good faith by the Company pursuant to the “"Safe Harbor”" provisions of the Private Securities Litigation Reform Act of 1995. These statements relate to non-historical information and include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements. We caution the reader not to place undue reliance on any such forward-looking statements, which reflect our opinion as of the date of this report. These statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from those presently anticipated or projected and include, among others, ~~uncertain~~the Company's ability to ~~comply~~ ~~with~~obtain ~~debt~~a ~~covenants when the~~ waiver ofor ~~defaults~~other ~~under~~relief ~~the~~from ~~Company’s credit~~our ~~agreement~~lenders ~~expires~~beyond inNovember ~~September~~14, 2003; ~~liquidity~~ability ~~concerns~~to negotiate financing arrangements or other solutions in ~~light~~replacement of ~~constraints~~our onexisting credit facility; the ability to ~~borrow~~generate ~~further~~sufficient ~~funds;~~cash ~~anticipated~~flow ~~further~~to ~~losses~~meet inobligations ~~light~~during any future waiver periods and future availability of ~~market~~borrowing ~~conditions~~capacity to the Company; the ability to meet future financial covenants under the credit agreement or other financing documents; ability to maintain credit terms with vendors; ability to manage working capital and align costs with market conditions; ~~further~~ability to achieve higher yields at Vision-Ease Lens; ability to reduce inventories while maintaining consistently high customer service levels and product fill rates; ability to increase sales of products at both Vision-Ease Lens and Buckbee-Mears, in particular our ability to replace lost NAFTA and European aperture mask sales with sales in Asia and other areas of the world; further aperture mask price declines; slowdown in growth of, or price reductions in, high-end optical lens products; fluctuations in currency exchange rates; rising raw material costs; ability to ~~improve~~successfully complete the restructuring of our ~~operating~~European ~~and~~operations; ~~manufacturing~~availability ~~efficiencies~~of ~~through~~acceptable ~~consolidation~~terms with our trade creditors; ability to develop new products to grow within our markets; and the effect of ongoing ~~facilities.~~economic uncertainty on the Company's operations. These and other risks and uncertainties are more particularly described in “"Item 1 — - Business”" of the Company’'s Form 10-K for the year ended December 31, 2002, which in some cases have affected and in the future could adversely affect the Company’'s actual results and could cause the Company’'s actual financial performance to differ materially from that expressed in any forward-looking statement. These factors should not, however, be considered an exhaustive list. The Company does not undertake ~~the~~ the responsibility to update any forward-looking statement that may be made from time to time by or on behalf of the Company.

Page 20

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

See “"Management’'s Discussion and Analysis of Financial Condition and Results of Operations”" on page 1720.

Item 4. Controls and Procedures.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “"Exchange Act”"), BMC management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

As required by Rule 13a-15(d), BMC management, including the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the ~~company’~~Company's internal control over financial reporting. Based on that evaluation, no such change occurred during the quarter covered by this report.

Part II: OTHER INFORMATION

Item 1. Legal Proceedings

With regard to legal proceedings and certain environmental matters, see “"Management’'s Discussion and Analysis of Financial Condition and Results of Operations”" which begins on page 1416 and Note 910 of the “ "Notes to Condensed Consolidated Financial Statements~~” on page 11~~".

Item 3. Defaults Upon Senior Securities

As of ~~June~~September 30, 2003, the Company ~~failed~~did tonot comply with the following covenants and requirements: (1) ~~The~~the Company failed to make $3~~,500~~.5 million in scheduled principal payments due on ~~June~~September 30 and on June 30, 2003. (2) The Company did not satisfy a total debt to trailing 12-month EBITDA ratio, which was not to exceed 3.5025 times at ~~June~~September 30, 2003. ~~On that date, the Company failed to meet this covenant.~~ The ratio could not be calculated, because the Company’'s trailing 12 month EBITDA was negative $3246.3 million,~~367,~~ compared to total debt, as defined in the ~~agreement~~Agreement, of $131~~,564~~.5 million. (3) The Company did not satisfy a total trailing 12-month EBITDA to interest expense ratio, which was to exceed 2.2550 times at ~~June~~September 30, 2003. The Onratio ~~that~~could ~~date,~~not be calculated because the ~~ratio~~Company's trailing 12 month EBITDA was negative 2$46.953 ~~times~~million. (4) The Company did not satisfy a covenant that required its consolidated net worth to exceed a minimum amount as defined in the Agreement. On that date, the Company’'s consolidated net worth as defined in the Agreement was $~~84,698~~74.6 million, below the minimum covenant level of $~~169~~157.6 million. (5) The Company's preliminary borrowing base calculations for August 31,~~588~~ 2003, and September 30, 2003, showed overadvances of $3,023 and $1,976, respectively. The Agreement provides that the Company will make revolving loan payments upon any overadvance to correct any deficiencies. In addition to these failures to comply with covenants, on July 1, 2003, the Company ~~also~~ failed to make a payment of $1~~,024~~.0 million in fees due on that date. However, Onif ~~July~~the 2,Company ~~2003~~defaults under any other covenants under the Agreement, the ~~Company~~lenders ~~received~~can ~~short-term~~terminate ~~waivers~~the ofwaiver ~~these~~and ~~covenants~~immediately declare a default under the Agreement.

~~Page~~On 21July 2, 2003, the Company received a short-term waiver of these covenants from its bank lenders, and on July 16, 2003, the waiver was extended through September 15, 2003. On July 30, 2003, the Company also received a temporary deferral agreement relating to a total of approximately $0.7 million in scheduled interest payments on floating rate notes under the agreement due in late July and early August 2003. The deferral agreement, subject to certain conditions, deferred these interest payments until August 28, 2003.

~~from~~On ~~its~~August ~~bank~~29, ~~lenders~~2003, ~~and~~the onCompany ~~July~~received ~~16,~~an additional ~~2003,~~temporary ~~the~~deferral ~~waiver~~of ~~was~~interest ~~extended~~payments ~~through~~that also extended to September 15, 2003. ~~However,~~to ifcoincide ~~the~~with ~~Company~~termination ~~defaults~~of ~~under~~the ~~any~~waiver. The ~~other~~agreement ~~non-financial~~deferred ~~covenants~~interest ~~under~~totaling $1.1 ~~the~~million. This ~~Agreement,~~was ~~the~~in ~~banks~~addition ~~will continue~~ to $0.7 bemillion ~~able~~of tointerest ~~declare~~payments athat ~~default~~were deferred under the ~~Agreement~~earlier temporary deferral agreement dated July 30, 2003.

~~Pursuant~~ On toSeptember 16, 2003, the Company ~~July~~received ~~16th~~an ~~waiver,~~additional ~~the~~60-day ~~banks~~waiver ~~determined~~of ~~that~~these nosame ~~additional~~covenants ~~borrowings~~under ~~would~~its Agreement. The bewaiver extended the time period for BMC to ~~the~~make ~~Company~~certain ~~under~~scheduled ~~the~~principal ~~Agreement~~and ~~during~~fee ~~the~~payments, ~~waiver~~and ~~period.~~further defers Onall ~~July~~interest 30payment obligations until November 14, 2003, the termination ~~Company~~date ~~also~~of ~~received~~the awaiver ~~temporary~~extension. The ~~deferral~~ agreement ~~relating~~defers tointerest atotaling ~~total of~~ approximately $~~687~~3.2 inmillion, ~~scheduled~~a combination of interest payments ondeferred ~~floating~~to ~~rate~~date ~~notes~~and ~~under~~further ~~the~~interest ~~agreement~~payments expected ~~due~~to income ~~late~~due ~~July~~through ~~and~~November ~~early~~14, ~~August~~ 2003. The ~~deferral~~earlier agreement, subject to certain conditions, ~~defers~~had ~~these~~ deferred interest payments until ~~August~~September 2815, 2003. Subsequent ~~The Company is continuing discussions with its banks regarding a further extension~~ to ~~defer interest payments to September 15, 2003 and~~ the ~~overall~~granting ~~restructuring~~ of ~~the~~this ~~Agreement.~~waiver, If the Company ~~cannot~~has ~~obtain~~sold ~~further~~certain assets ~~relief from the covenants~~ and ~~other~~used ~~requirements in~~ the ~~Agreement,~~net itproceeds ~~will~~to ~~likely~~reduce ~~be in default under~~ the ~~Agreement~~total asdeferred ofinterest ~~either~~due ~~August~~on November 2814, 2003 orto ~~September~~approximately ~~15, 2003~~$0.8 The Company continues to assess alternative financing arrangements to its current Agreement; however, the Company is unlikely to be able to negotiate such alternative arrangements before the waiver expiresmillion.

~~Item~~Pursuant 4.to ~~Submission~~the ofJuly ~~Matters~~16th waiver toand aall ~~Vote~~subsequent ofwaivers, ~~Securities~~the ~~Holders~~banks and the Company have agreed that no additional borrowings would be extended to the Company.

(The Company continues to work with its lenders and advisors to secure a) ~~Our~~longer-term ~~Annual~~alternative ~~Meeting~~to BMC's existing financing arrangement or another agreement for the restructuring of ~~Stockholders~~outstanding ~~was~~debt, including ~~held~~relief from these covenants and deferral of payments due to the banks. If BMC is unable to achieve additional waivers or other relief from covenants, payment obligations and other requirements under the credit agreement, the Company likely will be in default as of November 14, 2003. It is unlikely that BMC will be able to negotiate such alternative arrangements before the most recent waiver expires on ~~May~~November 1314, 2003. The failure to maintain compliance with all covenants under the credit agreement would result in a default, which would give lenders the ability to accelerate all outstanding debt. In such event, BMC would need to refinance or restructure the Company's debt and, if unsuccessful in these efforts, to consider all other options, including seeking protection under the bankruptcy laws.

(b) The nominees for election to BMC’s Board of Directors were John W. Castro, Morris Goodwin, Jr., Douglas C. Hepper and Alan R. Longstreet. All director nominees were elected. The following directors did not stand for election at the annual meeting because their terms of office continued after the meeting: Dr. H. Ted Davis, Harry A. Hammerly and Robert D. Endacott.

(c) One matter was submitted to a vote of stockholders at the annual meeting: Election of Directors. The votes cast with respect to such matter were as follows:

Nominee	Votes For	Votes Withheld or Against
John W. Castro	23,768,712	2,400,890
Morris Goodwin, Jr	23,782,361	2,387,241
Douglas C. Hepper	24,157,601	2,012,001
Alan R. Longstreet	24,158,201	2,011,401

Item 5. Other Matters

On August 18, 2003, wethe Company received notice from the New York Stock Exchange (“NYSE”) that the common stock of BMC, listed under the ticker symbol BMM, ~~will~~would be suspended prior to the market opening on August 21, 2003 or an earlier date in the event of a material adverse development. Trading ~~The~~on the NYSE was suspended on August 19, 2003 and the NYSE commenced proceedings with the Securities and Exchange Commission to delist the securities. Immediately following the suspension of trading on the NYSE, the common stock of BMC began trading in the "pink sheets" under the ticker symbol BMMI. Shortly thereafter, the common stock also began ~~indicated~~trading on the Over-The-Counter Bulletin Board (OTCBB). The OTCBB is a regulated quotation service that itdisplays ~~would~~real-time ~~thereafter~~quotes, last-sale prices and volume information in over-the counter equity securities. Investors should be aware that trading in BMC's common stock through market makers and quotation on the OTCBB and the "pink sheets" may involve risk, such as slower execution of trades than might be experienced on the NYSE.

Page 22

commence proceedings with the Securities and Exchange Commission to delist these securities. This action follows the NYSE’s previously announced notification to BMC in July 2003 that the company was not in compliance with the NYSE’s continued listing requirements and that BMC’s common stock could be subject to delisting.

The Company is working with the NYSE to facilitate a smooth transition to the OTC (over-the-counter) Bulletin Board (“OTCBB”) and do not expect the change in trading venue to impact our current operations or financial performance. We expect that BMC’s common stock will be quoted on the OTCBB beginning on August 21, 2003 under a new ticker symbol. The OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in OTC equity securities. Investors should be aware that trading in BMC’s common stock through market makers and quotation on the OTCBB and the “pink sheets” may involve risk, such as trades not being executed as quickly as when the common stock was listed on the NYSE.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

(a)	Exhibits

	10.52	Fourth Declaration of Amendment to the BMC Industries, Inc. Savings and Profit Sharing Plan - 2001 Revision, dated August 29, 2003.

	31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

	31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

	32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

10.51 Temporary Deferral Agreement, dated as of July 30, 2003, among BMC Industries, Inc., Deutsche Bank Trust Company Americas, as Administrative Agent and Bank One, NA, as Documentation Agent and Various Lending Institutions.

31.1 Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2 Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

(b)	Reports on Form 8-K.

The Company filed a Form 8-K on ~~May~~august 1319, 2003, ~~relating~~reporting to BMC’s ~~press~~Industries, ~~release~~Inc. inissued ~~which~~a wepress ~~lowered~~release announcing ~~our~~second ~~outlook~~quarter ~~for~~ 2003 ~~and~~financial ~~disclosed~~results ~~our~~and ~~expectation~~providing ofearnings guidance ~~a loss~~ for the ~~fiscal~~second ~~year~~quarter ~~ending~~of ~~December 31,~~ 2003.

The Company filed a Form 8-K, on ~~dated~~August ~~July 2~~28, 2003, reporting BMC’ ~~attainment~~Industries, ofInc. ~~temporary~~entered ~~relief~~into ~~from~~a ~~default under our credit facility pursuant to an Agreement and~~ Temporary Deferral ~~Waiver~~Agreement, dated as of ~~July~~August 228, 2003, with Deutsche Bank Trust Company Americas, as administrative agent for the lenders and a lender, Bank One, NA, as documentation agent and a Lender; and several banks and other financial institutions.

The Company filed a Form 8-K, ~~dated~~on ~~July~~November 1513, 2003, reporting BMC’s ~~attainment~~Industries, ofInc. ~~temporary~~issued ~~relief~~a ~~from~~press ~~default~~release announcing ~~under~~third ~~our~~quarter ~~credit~~2003 ~~facility~~financial ~~pursuant~~results ~~to an Agreement~~ and ~~Temporary~~providing ~~Waiver,~~earnings ~~dated~~guidance for ~~July~~the ~~15,~~third ~~2003,~~quarter ~~with~~of ~~Deutsche Bank Trust Company Americas,~~2003.

~~Page~~The 23Company filed a Form 8-K/A on November 13, 2003 reporting BMC Industries, Inc. issued an amended press release to correct inadvertent errors contained in the reconciliation statement information on the press release issued earlier that day.

as administrative agent for the lenders and a lender, Bank One, NA, as documentation agent and a Lender; and several banks and other financial institutions.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BMC INDUSTRIES, INC.

	BMC INDUSTRIES, INC.

	/s/ Curtis E. Petersen
	Curtis E. Petersen

	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)


	/s/ Richard G. Faber
	Richard G. Faber

	Corporate Controller
Dated: November 14, 2003	(Principal Accounting Officer)

/s/ Curtis E. Petersen Curtis E. Petersen Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ Richard G. Faber Richard G. Faber Corporate Controller (Principal Accounting Officer)

Dated: August 19, 2003

Page 24

Filing Compare · BMC INDUSTRIES INC/MN/