Exhibit 99.1
CONTACT:
Bell Industries, Inc.
Kevin Thimjon, President and CFO
317-704-6000
BELL INDUSTRIES REPORTS FINANCIAL RESULTS
FOR 2008 FIRST QUARTER
INDIANAPOLIS— May 15, 2008 — Bell Industries, Inc. (BIUI.PK) today reported financial results for its first quarter ended March 31, 2008.
Revenues from continuing operations for the 2008 first quarter were $23.1 million down 21.9% from $29.5 million a year ago, with $5.7 million of the decrease in revenues related to the company’s Technology Solutions Group. The company incurred a loss from continuing operations of $680,000, or $0.06 per diluted share, for the 2008 first quarter. This reflects a significant improvement over the prior-year first quarter loss from continuing operations of the $1.8 million, or $0.22 per diluted share, which included a $2.0 million gain from the sale of a building. Bell achieved net income in the first quarter of 2008 of $839,000, or $0.09 per diluted share, including income from discontinued operations of $1.5 million, equal to $0.15 per diluted share. This compares with a net loss of $1.5 million, or $0.18 per diluted share, including income from discontinued operations of $334,000, or $0.04 per diluted share, for the 2007 first quarter.
The company announced in February 2008 that it completed the sale of SkyTel’s automated vehicle location business to SkyGuard LLC for $7.0 million. In March 2008, Bell entered into a definitive agreement to sell the balance of its SkyTel division to Velocita Wireless LLC for a total consideration of $8.0 million, comprised of $3.0 million in cash at closing and deferred payments totaling $5.0 million to be paid over a period of two years. As a result of these transactions, the SkyTel division has been reflected as a discontinued operation in the company’s results of operations for the first quarters of 2008 and 2007 and is reflected on the balance sheet at March 31, 2008 as assets held for sale.
The Technology Solutions Group posted revenues of $13.2 million for the 2008 first quarter, compared with $18.9 million in the 2007 first quarter. This decline is related to several factors, including the termination of an unprofitable large-scale customer relationship management engagement in conjunction with the closing of Bell’s Springfield, Missouri call center, the decision to cease acting as an authorized reseller for a certain hardware product line, the timing of completion of certain projects and a focus on improving gross profits. Operating income for the 2008 first quarter amounted to $424,000, increasing by approximately $1.5 million over the prior-year first quarter due to several factors, including the closure of the unprofitable Springfield call
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Bell Industries, Inc.
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center, improved operational efficiencies on several service engagements and significant reductions in overhead costs.
Bell’s Recreational Products Group reported revenues of $9.9 million for the 2008 first quarter, compared with $10.7 million in the 2007 first quarter. The company attributed the decrease in revenues primarily to lower sales in the marine and recreational vehicle product lines, partially offset by an increase in revenues from its snowmobile product line. Although revenues were down year-over-year, operating income for the 2008 first quarter increased by $566,000 over the prior-year first quarter to $188,000, principally reflecting a 230 basis point improvement in gross profit margins and reductions in headcount, freight and facility costs.
“We continue to make progress improving the operational efficiencies of each of our businesses,” said Kevin J. Thimjon, president and chief financial officer of Bell Industries. “We are particularly pleased with the significantly reduced corporate cost structure of our business, which was decreased by nearly 52 percent over the prior-year period, as a result of reductions in headcount and related travel and benefits, the closure of our former corporate headquarters in Los Angeles and lower marketing and telecommunications expenses.”
Bell’s corporate costs for the 2008 first quarter totaled $1.1 million, down almost $1.3 million from $2.4 million in the 2007 first quarter”
About Bell Industries, Inc.
After the completion of the recently announced sale of its SkyTel division, Bell Industries will be comprised of two operating units, Bell’s Technology Solutions business and its Recreational Products Group. The company’s Technology Solutions business offers a comprehensive portfolio of customizable and scalable technology solutions ranging from managed technology services to reverse logistics and mobile/wireless solutions. The Recreational Products Group is a wholesale distributor of aftermarket parts and accessories for the recreational vehicles and other leisure-related vehicle markets, including marine, snowmobile, cycle and ATV.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements, including, but not limited to the encouragement by the cost reductions achieved in the businesses, are based upon current expectations and speak only as of the date hereof. Actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including uncertainties as to the nature of the company’s industry, including changing customer demand, the impact of competitive products and pricing, dependence on existing management and general economic conditions. Bell Industries’ Annual Report onForm 10-K, recent and forthcoming Quarterly Reports onForm 10-Q, recent Current Reports on Form 8-K, and other SEC filings discuss some of the important risk factors that may affect the business, results of operations and financial condition. The company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
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Bell Industries, Inc.
Consolidated Operating Results
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | |
| | | Three months ended | |
| | | March 31, | |
| | | 2008 | | | 2007 | |
| Net revenues: | | | | | | | | |
| Products | | $ | 15,730 | | | $ | 19,355 | |
| Services | | | 7,358 | | | | 10,190 | |
| | | | | | | |
| Total net revenues | | | 23,088 | | | | 29,545 | |
| | | | | | | |
| | | | | | | | | |
| Costs and expenses: | | | | | | | | |
| Cost of products sold | | | 12,760 | | | | 16,327 | |
| Cost of services provided | | | 4,939 | | | | 7,257 | |
| Selling, general and administrative expense | | | 5,914 | | | | 9,755 | |
| Interest expense, net | | | 139 | | | | — | |
| Gain on sale of assets | | | — | | | | (1,976 | ) |
| | | | | | | |
| Total costs and expenses | | | 23,752 | | | | 31,363 | |
| | | | | | | |
| Loss from continuing operations before provision for income taxes | | | (664 | ) | | | (1,818 | ) |
| Provision for income taxes | | | 16 | | | | 23 | |
| | | | | | | |
| Loss from continuing operations | | | (680 | ) | | | (1,841 | ) |
| Income from discontinued operations, net of tax | | | 1,519 | | | | 334 | |
| | | | | | | |
| Net income (loss) | | $ | 839 | | | $ | (1,507 | ) |
| | | | | | | |
| | | | | | | | | |
Share and per share data | | | | | | | | |
| Basic: | | | | | | | | |
| Loss from continuing operations | | $ | (0.08 | ) | | $ | (0.22 | ) |
| Income from discontinued operations | | | 0.18 | | | | 0.04 | |
| | | | | | | |
| Net income (loss) | | $ | 0.10 | | | $ | (0.18 | ) |
| | | | | | | |
| Weighted average common shares outstanding | | | 8,650 | | | | 8,600 | |
| | | | | | | |
| | | | | | | | | |
| Diluted: | | | | | | | | |
| Loss from continuing operations | | $ | (0.06 | ) | | $ | (0.22 | ) |
| Income from discontinued operations | | | 0.15 | | | | 0.04 | |
| | | | | | | |
| Net income (loss) | | $ | 0.09 | | | $ | (0.18 | ) |
| | �� | | | | | |
| Weighted average common shares outstanding | | | 11,467 | | | | 8,600 | |
| | | | | | | |
| | | | | | | | | |
OPERATING RESULTS BY BUSINESS SEGMENT | | | | | | | | |
| Net revenues: | | | | | | | | |
| Technology Solutions Group | | | | | | | | |
| Products | | $ | 5,839 | | | $ | 8,683 | |
| Services | | | 7,358 | | | | 10,190 | |
| | | | | | | |
| Total Technology Solutions Group | | | 13,197 | | | | 18,873 | |
| Recreational Products Group | | | 9,891 | | | | 10,672 | |
| | | | | | | |
| Total net revenues | | $ | 23,088 | | | $ | 29,545 | |
| | | | | | | |
| | | | | | | | | |
| Operating income (loss): | | | | | | | | |
| Technology Solutions Group | | $ | 424 | | | $ | (1,052 | ) |
| Recreational Products Group | | | 188 | | | | (378 | ) |
| Corporate costs | | | (1,137 | ) | | | (2,364 | ) |
| | | | | | | |
| Total operating loss | | | (525 | ) | | | (3,794 | ) |
| Gain (loss) on sale of assets | | | — | | | | (1,976 | ) |
| Interest expense, net | | | 139 | | | | — | |
| | | | | | | |
| Loss from continuing operations before income taxes | | $ | (664 | ) | | $ | (1,818 | ) |
| | | | | | | |
Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
| | | | | | | | | |
| | | March 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
| | | (unaudited) | | | | | |
ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 1,001 | | | $ | 409 | |
| Accounts receivable, net | | | 14,712 | | | | 12,304 | |
| Inventories, net | | | 9,741 | | | | 10,323 | |
| Prepaid expenses and other current assets | | | 1,743 | | | | 1,982 | |
| Assets held for sale | | | 21,831 | | | | 27,814 | |
| | | | | | | |
| Total current assets | | | 49,028 | | | | 52,832 | |
| | | | | | | | | |
| Fixed assets, net | | | 2,215 | | | | 1,956 | |
| Assets held for sale | | | 5,000 | | | | 5,000 | |
| Other assets | | | 1,681 | | | | 2,231 | |
| | | | | | | |
| Total assets | | $ | 57,924 | | | $ | 62,019 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Floor plan payables | | $ | 781 | | | $ | 1,064 | |
| Revolving credit facility | | | 3,404 | | | | 4,775 | |
| Accounts payable | | | 9,085 | | | | 10,438 | |
| Accrued payroll | | | 2,149 | | | | 1,639 | |
| Liabilities associated with assets held for sale | | | 17,225 | | | | 19,084 | |
| Other accrued liabilities | | | 4,934 | | | | 5,849 | |
| | | | | | | |
| Total current liabilities | | | 37,578 | | | | 42,849 | |
| | | | | | | | | |
| Convertible note | | | 9,209 | | | | 8,969 | |
| Other long-term liabilities | | | 5,461 | | | | 5,418 | |
| | | | | | | |
| Total liabilities | | | 52,248 | | | | 57,236 | |
| Shareholders’ equity | | | 5,676 | | | | 4,783 | |
| | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 57,924 | | | $ | 62,019 | |
| | | | | | | |
