Bell Industries Reports Third Quarter Operating Results
EL SEGUNDO, Calif.--Oct. 25, 2001--Bell Industries, Inc. (AMEX:BI) today reported financial results for the three months ended September 30, 2001.Net sales for the 2001 third quarter totaled $46.2 million, compared with $72.7 million for the same period in 2000. The company recorded net income of $146,000, or $.02 per diluted share, for the current quarter, versus $509,000, or $.06 per diluted share, a year ago.
"While Bell achieved profitability for the quarter, our operating results reflect the extremely challenging business environment, particularly as related to IT and consumer spending," said Tracy A. Edwards, chairman, president and chief executive officer. "Our outlook on Bell's performance in the near term is guarded in view of the overall economic conditions; however, considering our continuing strategic implementations, we believe Bell will be better positioned in the long run as the economy recovers."
The company's largest business unit, Bell Tech.logix (BTL), recorded sales of $32.0 million for the three months ended September 30, 2001, with operating income of $279,000. A year earlier, BTL had sales of $55.3 million and operating income of $451,000. During the prior year's third quarter, revenues included sales for major hardware projects at two large clients for which no such similar sales occurred in the current year's third quarter. Also contributing to the decline in sales was the continuing industry-wide slow down in IT spending and the ongoing transition to an agency model for certain product transactions, whereby revenues represent fees earned on product sales transacted directly with BTL clients by manufacturers.
"During the quarter, we opened a dedicated technology support center in our Atlantic region to serve an enterprise client and signed several new technology integration and project management engagements in the Midwest. We will continue to aggressively implement our business strategy of transitioning to a stronger IT services orientation from the traditional product-based focus. In addition, we will maintain prudent cost controls and invest where necessary to move the company forward," said Edwards.
Bell's Recreational Products Group posted sales of $12.5 million for the current quarter compared with $13.0 million last year. While sales were slightly down as a result of reduced consumer spending, operating income increased to $276,000 from $255,000 a year ago.
Sales for the company's Electronics Manufacturing Group were $1.7 million, compared with $4.4 million a year ago. Operating income was $433,000 in the 2001 third quarter, compared with a record third quarter of $1.1 million last year. Results continued to be impacted by the current environment of sharply reduced demand for electronic components, particularly those used by the telecommunications industry.
Bell's balance sheet remains strong. At September 30, 2001, the company had net working capital of $21.2 million, cash of $10.5 million and no bank debt. Shareholders' equity totaled $30.3 million, or $3.41 per share.
Bell's primary business, Bell Tech.logix, is a multi-regional provider of integrated computer technology solutions for middle market organizations. Bell also distributes after-market parts and accessories to the recreational vehicle market and manufactures specialized products for the computer and electronics industry.
Certain matters discussed in this news release are forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from current trends. These include, but are not limited to, success in executing the strategic plan and related growth in service revenues, cash and working capital trends, the ability to attract experienced professionals and other factors described in the company's public filings from time to time.
Bell Industries, Inc.
Consolidated Operating Results
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
--------- --------- --------- ---------
Net sales $46,212 $72,718 $151,599 $188,709
--------- --------- --------- ---------
Cost of sales 37,806 62,985 126,140 161,040
Selling and
administrative expenses 8,272 8,995 25,014 25,381
Interest, net (108) (104) (380) (168)
Special items, net (1)(2) 1,495 (437)
--------- --------- --------- ---------
45,970 71,876 152,269 185,816
--------- --------- --------- ---------
Income (loss) before
income taxes 242 842 (670) 2,893
Income tax expense
(benefit) 96 333 (265) 1,144
--------- --------- --------- ---------
Net income (loss) $146 $509 $(405) $1,749
========= ========= ========= =========
Share and per share data
Net income (loss)
Basic $.02 $.06 $(.05) $.19
========= ========= ========= =========
Diluted $.02 $.06 $(.05) $.19
========= ========= ========= =========
Weighted average common stock
Basic 8,867 8,835 8,847 9,075
========= ========= ========= =========
Diluted 8,867 8,836 8,847 9,109
========= ========= ========= =========
----------------------------------------------------------------------
OPERATING RESULTS BY BUSINESS SEGMENT
Net sales
Systems Integration $31,994 $55,320 $108,018 $139,250
Recreational Products 12,498 13,018 37,650 39,994
Electronics Manufacturing 1,720 4,380 5,931 9,465
--------- --------- --------- ---------
$46,212 $72,718 $151,599 $188,709
========= ========= ========= =========
Operating income (loss)
Systems Integration (1) $279 $451 $(473) $(797)
Recreational Products 276 255 1,220 1,528
Electronics Manufacturing 433 1,097 1,367 2,361
Special items, net (2) (650) 2,242
Corporate costs (854) (1,065) (2,514) (2,609)
--------- --------- --------- ---------
134 738 (1,050) 2,725
Interest, net 108 104 380 168
Income tax benefit (expense) (96) (333) 265 (1,144)
--------- --------- --------- ---------
Net income (loss) $146 $509 $(405) $1,749
========= ========= ========= =========
(1) Systems Integration operating results for the nine-month
periods ended September 30, 2001 and 2000 include pre-tax charges of
$845,000 and $1,805,000 for staff separation and facilities
consolidation costs related to the company's strategy implementation
and realignment efforts.
(2) Corporate related special item for the nine-month period ended
September 30, 2001 represents settlement costs associated with an
executive change-in-control contract. Corporate related special items
for the nine-month period ended September 30, 2000 include a pre-tax
charge of $600,000 for a corporate identity program offset by a
pre-tax gain of $2,842,000 from the disposition of a real estate
asset.
Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
(Unaudited)
Sept. 30, Dec. 31,
2001 2000
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $10,457 $14,433
Accounts receivable, net 21,619 31,701
Inventories 11,870 15,065
Prepaid expenses and other 4,389 4,012
-------- --------
Total current assets 48,335 65,211
-------- --------
Fixed assets, net 6,846 4,238
Goodwill 2,146 1,540
Other assets 3,041 3,437
-------- --------
$60,368 $74,426
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $13,289 $24,492
Accrued payroll and liabilities 13,799 16,041
-------- --------
Total current liabilities 27,088 40,533
-------- --------
Long-term liabilities 2,974 3,411
Shareholders' equity 30,306 30,482
-------- --------
$60,368 $74,426
======== ========