EXHIBIT 99.1
CONTACT:
Bell Industries, Inc.
Tracy A. Edwards
310-563-2355
PondelWilkinson MS&L
Roger S. Pondel/Angie H. Yang
323-866-6060
FOR IMMEDIATE RELEASE
BELL INDUSTRIES REPORTS 2003 FOURTH QUARTER, FULL YEAR RESULTS
El Segundo, California – February 20, 2004 –Bell Industries, Inc. (AMEX:BI) today reported higher net revenues and a reduction in its loss before income taxes for the fourth quarter ended December 31, 2003.
Net revenues for the quarter rose 15 percent to $30.9 million from $26.9 million in the prior-year period. The company reduced its loss before income taxes to $1.4 million from $1.9 million in the 2002 fourth quarter. After providing for income tax effects, which include a 2003 valuation allowance for deferred tax benefits, net loss for the 2003 fourth quarter totaled $2.6 million, or $0.31 per share, compared with a net loss of $1.1 million, or $0.13 per share, a year earlier.
For 2003, net revenues improved to $141.9 million from $140.8 million last year. Bell’s loss before income taxes decreased to $2.6 million from $3.4 million in 2002. After including income tax effects, Bell incurred a net loss in 2003 of $3.8 million, or $0.45 per share, compared with a net loss of $3.3 million, or $0.38 per share, a year ago. The 2002 results include a goodwill write-off of $2.1 million, equal to $1.3 million after tax, or $0.14 per share, relating to the adoption of a new accounting standard.
“Results for the fourth quarter reflected improvement in each of Bell’s business units, a sign of progress as we continued to advance our businesses in a difficult economic environment,” said Tracy A. Edwards, chairman, president and chief executive officer of Bell Industries.
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Bell Industries, Inc.
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Sales at Bell’s Tech.logix Group (BTL), the company’s largest operating unit, increased 21 percent to $21.4 million in the 2003 fourth quarter from $17.7 million in the prior-year period. Services revenues grew 45 percent over last year’s fourth quarter and represented 40 percent of BTL’s total revenues. This compares with 33 percent a year ago and 35 percent in the third quarter of 2003. BTL reduced its operating loss for the 2003 fourth quarter to $866,000 from $951,000 a year earlier.
“BTL continued to show progress with growth in services revenues,” Edwards said. “However, operating results continue to be challenged due to the start-up and implementation costs of new engagements and a continued investment in expanded business development efforts. As previously announced, we expect BTL’s services revenues to be adversely impacted due to the ending of an outsourcing engagement in early 2004. Nevertheless, we remain encouraged by signs of a stabilizing technology market and anticipate generally more positive corporate spending activity.
“With new management leading BTL and a continued focus on developing new business opportunities and expanding market penetration, our primary objective is returning BTL to profitability,” Edwards said.
Sales at Bell’s Recreational Products Group totaled $8.0 million for the three months ended December 31, 2003, compared with $7.9 million in last year’s fourth quarter. The unit’s operating loss for the seasonally slower fourth quarter was $108,000, down from $382,000 in 2002 which included distribution center relocation costs.
Bell’s electronic components operation, J.W. Miller, posted a 14 percent increase in sales for the 2003 fourth quarter to $1.5 million from $1.3 million a year earlier. Operating income advanced to $204,000 from $81,000 last year as a result of increased sales and gross margin contribution.
After consideration of relevant factors, including recent operating results and the prior utilization of all previously available tax benefit carry-back opportunities, the company has recorded a valuation allowance against net deferred tax asset balances. Edwards said the assessment of the valuation allowance against deferred tax assets and the recognition of future deferred tax benefits will be reconsidered as Bell returns to overall profitability. The establishment of the valuation allowance, net of reversals of tax accruals no longer required, resulted in an income tax provision of $1.2 million for the three months and year ended December 31, 2003. Before accounting changes, during the three months and year ended December 31, 2002, Bell recognized income tax benefits of $736,000 and $1.3 million, respectively, all of which were realized through carry-back opportunities.
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Bell Industries, Inc.
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Bell continues to maintain a strong balance sheet with no bank debt. At year-end 2003, Bell had net working capital of $17.8 million and cash of $12.2 million. Shareholders’ equity totaled $21.6 million, or $2.58 per share, at December 31, 2003.
Bell’s primary business, the Tech.logix Group, provides information technology lifecycle services, including planning, product sourcing, migration, support, and disposal services. Recurring support services include help desk, depot, and on-site expertise for desktop and mobile devices, business software applications, and network infrastructures. Bell also distributes after-market parts and accessories to the recreational vehicle market. In addition, Bell manufactures and distributes a variety of standard and custom magnetic components used in electronic applications for computer, medical and telecommunication equipment.
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, the prospects for a stabilizing technology market and increased corporate spending, returning BTL to profitability, decreased margins due to price competition, delays and costs associated with new client engagements, the effectiveness of business development efforts, realizing business opportunities as the economy improves, the company’s ability to achieve overall profitability, the future realization of tax benefits, and other factors described in the company’s public filings from time to time.
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Bell Industries, Inc.
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Bell Industries, Inc.
Consolidated Operating Results
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | Year ended |
| | | December 31 | | December 31 |
| | | 2003
| | 2002
| | 2003
| | 2002
|
| Net revenues | | | | | | | | | | | | | | | | |
| Products | | $ | 22,365 | | | $ | 21,025 | | | $ | 106,956 | | | $ | 118,448 | |
| Services | | | 8,510 | | | | 5,865 | | | | 34,949 | | | | 22,349 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 30,875 | | | | 26,890 | | | | 141,905 | | | | 140,797 | |
| | | |
| | | |
| | | |
| | | |
| |
| Costs and expenses | | | | | | | | | | | | | | | | |
| Cost of products sold | | | 18,175 | | | | 17,187 | | | | 87,181 | | | | 98,076 | |
| Cost of services provided | | | 7,221 | | | | 4,560 | | | | 28,449 | | | | 17,065 | |
| Selling and administrative | | | 6,896 | | | | 7,040 | | | | 29,019 | | | | 29,216 | |
| Interest, net | | | (41 | ) | | | (36 | ) | | | (166 | ) | | | (200 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 32,251 | | | | 28,751 | | | | 144,483 | | | | 144,157 | |
| | | |
| | | |
| | | |
| | | |
| |
| Loss before income taxes and cumulative effect of accounting change | | | (1,376 | ) | | | (1,861 | ) | | | (2,578 | ) | | | (3,360 | ) |
| Income tax expense (benefit) | | | 1,209 | | | | (736 | ) | | | 1,209 | | | | (1,327 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Loss before cumulative effect of accounting change | | | (2,585 | ) | | | (1,125 | ) | | | (3,787 | ) | | | (2,033 | ) |
| Cumulative effect of accounting change, net of income tax benefit of $836 | | | — | | | | — | | | | — | | | | (1,280 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Net loss | | $ | (2,585 | ) | | $ | (1,125 | ) | | $ | (3,787 | ) | | $ | (3,313 | ) |
| | | |
| | | |
| | | |
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| |
Basic and diluted share data | | | | | | | | | | | | | | | | |
| Loss before cumulative effect of accounting change per share | | $ | (.31 | ) | | $ | (.13 | ) | | $ | (.45 | ) | | $ | (.24 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Net loss per share | | $ | (.31 | ) | | $ | (.13 | ) | | $ | (.45 | ) | | $ | (.38 | ) |
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| | | |
| | | |
| | | |
| |
| Weighted average common stock | | | 8,367 | | | | 8,404 | | | | 8,367 | | | | 8,743 | |
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| |
OPERATING RESULTS BY BUSINESS SEGMENT | | | | | | | | | | | | | | | | |
| Net revenues | | | | | | | | | | | | | | | | |
| Technology Solutions | | | | | | | | | | | | | | | | |
| Products | | $ | 12,895 | | | $ | 11,861 | | | $ | 55,826 | | | $ | 68,219 | |
| Services | | | 8,510 | | | | 5,865 | | | | 34,949 | | | | 22,349 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | 21,405 | | | | 17,726 | | | | 90,775 | | | | 90,568 | |
| Recreational Products | | | 7,969 | | | | 7,850 | | | | 44,804 | | | | 44,639 | |
| Electronic Components | | | 1,501 | | | | 1,314 | | | | 6,326 | | | | 5,590 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | $ | 30,875 | | | $ | 26,890 | | | $ | 141,905 | | | $ | 140,797 | |
| | | |
| | | |
| | | |
| | | |
| |
| Operating income (loss) | | | | | | | | | | | | | | | | |
| Technology Solutions | | $ | (866 | ) | | $ | (951 | ) | | $ | (2,135 | ) | | $ | (2,204 | ) |
| Recreational Products | | | (108 | ) | | | (382 | ) | | | 1,321 | | | | 819 | |
| Electronic Components | | | 204 | | | | 81 | | | | 939 | | | | 489 | |
| Corporate costs | | | (647 | ) | | | (645 | ) | | | (2,869 | ) | | | (2,664 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| | | | (1,417 | ) | | | (1,897 | ) | | | (2,744 | ) | | | (3,560 | ) |
| Interest, net | | | 41 | | | | 36 | | | | 166 | | | | 200 | |
| Income tax benefit (expense) | | | (1,209 | ) | | | 736 | | | | (1,209 | ) | | | 1,327 | |
| Cumulative effect of accounting change, net | | | — | | | | — | | | | — | | | | (1,280 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Net loss | | $ | (2,585 | ) | | $ | (1,125 | ) | | $ | (3,787 | ) | | $ | (3,313 | ) |
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| |
Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
(Unaudited)
| | | | | | | | | |
December 31
| | 2003
| | 2002
|
ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 12,203 | | | $ | 10,079 | |
| Accounts receivable, net | | | 16,164 | | | | 13,078 | |
| Income tax receivable | | | | | | | 2,400 | |
| Inventories | | | 11,286 | | | | 12,349 | |
| Prepaid expenses and other | | | 689 | | | | 3,051 | |
| | | |
| | | |
| |
| Total current assets | | | 40,342 | | | | 40,957 | |
| | | |
| | | |
| |
| Fixed assets, net | | | 4,206 | | | | 5,436 | |
| Other assets | | | 2,085 | | | | 2,997 | |
| | | |
| | | |
| |
| | | $ | 46,633 | | | $ | 49,390 | |
| | | |
| | | |
| |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 12,882 | | | $ | 10,687 | |
| Accrued payroll and liabilities | | | 9,634 | | | | 10,661 | |
| | | |
| | | |
| |
| Total current liabilities | | | 22,516 | | | | 21,348 | |
| | | |
| | | |
| |
| Long-term liabilities | | | 2,520 | | | | 2,496 | |
| Shareholders’ equity | | | 21,597 | | | | 25,546 | |
| | | |
| | | |
| |
| | | $ | 46,633 | | | $ | 49,390 | |
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