Bell Announces New Senior Management Team
3 February 1999
Bell Announces New Senior Management Team and Plans for Cash Distribution; Company Also Adopts Two-Year Shareholder Rights Plan
EL SEGUNDO, Calif.--Feb. 3, 1999--Bell Industries Inc. Wednesday announced the promotion of its executive vice president, Tracy A. Edwards, 42, to president and chief executive officer, succeeding Gordon Graham, 64, who is retiring from active management and was elected co-chairman of the board. Edwards also was elected a director of the company.
Bell also promoted Chris Ferry, 40, to corporate senior vice president, with overall responsibility for Bell's systems integration group, and Russell A. Doll, 37, to vice president and chief financial officer. Chuck Troy, 54, will continue in his role as corporate vice president, overseeing the company's recreational and manufacturing businesses.
The management changes follow the completion of the previously announced sale of Bell's Electronics Distribution Group to Arrow Electronics Inc. for approximately $185 million in cash, subject to adjustment.
From the proceeds of the sale of the Electronics Distribution Group and planned sales of certain real estate, the company expects to make a cash distribution to shareholders of around $7.00 per share, in about 90 days. A portion of the proceeds will also be used to pay off indebtedness, taxes and related closing costs. Bell has approximately 9.5 million shares outstanding.
"The closing of the transaction with Arrow represents a major step in the transition of Bell," Edwards stated. "As we are proceeding ahead of schedule with our efforts to sell certain properties, we are able to plan an earlier distribution of those proceeds than first announced. Our strategy is to reposition Bell as a virtually new company with a solid offering in the technology services sector.
"At the same time, we are actively exploring a number of strategic alternatives aimed toward maximizing returns to shareholders, as we significantly downsize Bell's corporate structure. While much remains to be accomplished, we have a strong team of motivated and creative people who are committed to and can deliver on these goals," he said.
Bell's principal business is its systems integration group, a multi-regional provider of integrated computer technology solutions for large and medium-sized organizations. The group's services include network design and engineering, software licensing support, microcomputer systems analysis, help desk support, product configuration and deployment, and asset management.
"Our systems integration business is a well-established, recognized leader in the geographic markets it serves," Edwards said. "The group has a solid growth record which reflects the innovation and drive of the team under Chris Ferry's leadership. We are committed to meeting and exceeding the expectations of our clients in addressing their technology needs.
"With the sale of the electronics distribution business, Bell is now in excellent position to focus resources on continuing to provide outstanding services and pursue the many opportunities we believe exist in the technology integration industry."
Bell also operates a recreational products business which distributes after-market parts and accessories for the recreational vehicle, motorcycle, snowmobile and marine markets. In addition, Bell's operations include two manufacturing divisions, providing specialized products for the computer and electronics industry. These businesses, along with Bell's systems integration business, recorded sales of approximately $212 million in 1998.
In view of this period of repositioning and pursuing strategic alternatives for Bell, the company also announced the adoption of a two-year shareholder rights plan to assist the board of directors in assuring that all Bell shareholders receive fair and equal treatment and to guard against partial tender offers, open market accumulations, and other potentially abusive tactics.
The rights become exercisable, in most circumstances, upon the accumulation by a person or group of 18% or more of the company's shares. Shareholders will receive a right for each common share owned. The rights plan is not intended to, and will not, prevent a takeover of the company at a full and fair price.
However, the rights may cause substantial dilution to a person or group acquiring 18% or more of the common stock unless the rights are first redeemed by the board of directors. Nevertheless, the rights should not interfere with a transaction that is in the best interests of the company and its shareholders.
The issuance of the rights has no dilutive effect, will not affect reported earnings per share, is not taxable to Bell or its shareholders, and will not change the way in which Bell shares are traded. A letter to shareholders describing the rights plan in more detail will be mailed later this month. The plan terminates on May 31, 2001.
Prior to joining Bell in 1991 as vice president and chief financial officer, Edwards was with Price Waterhouse, where he was a senior manager in the firm's Los Angeles and London offices. Ferry, with a sales and operations background, has led the systems integration group as group vice president for several years.
Doll joined Bell in April 1998 as vice president-finance. He previously was vice president and chief financial officer of Predelivery Service Corp., a former subsidiary of Ford Motor Co., and was also a senior manager with Price Waterhouse, serving in the Los Angeles and Leeds, England offices.
Certain matters discussed in this news release contain forward-looking information that involves risks and uncertainties that could cause actual results to differ materially from current trends. These include, but are not limited to, the company's ability to pursue business opportunities and sell certain real estate assets, its success in achieving viable strategic alternatives, execution of options with respect to cash proceeds, and other factors.