1
Exhibit (99.1)
Page 1 of 8
BELL INDUSTRIES, INC.
Pro Forma Financial Information
(Unaudited)
The following unaudited pro forma financial information reflects the sale of
substantially all of the assets of Graphics as of the beginning of the earliest
period presented for statement of income purposes and as of June 30, 1998 for
balance sheet purposes. The pro forma information assumes net cash proceeds of
$40 million from the sale. In accordance with the terms of the sale, the
purchase price, less an estimate of the net book value of certain receivables,
is payable in cash on the closing date. The balance is payable within 90 days of
the closing date. The net cash proceeds will be used to reduce outstanding
borrowings as required under Bell's credit facility. For statement of income
purposes, it is assumed the net proceeds have been used to reduce outstanding
borrowing as of January 1, 1997. Earlier periods reflect the elimination of
Graphics to the continuing operations of Bell. The unaudited pro forma financial
information should be read in conjunction with the historical consolidated
financial statements, including the notes thereto, as included in the Bell
Industries, Inc., Annual Report on Form 10-K for the year ended December 31,
1997.
The pro forma information is presented for illustration purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred if the sale of Graphics had been consummated in accordance with
the assumptions described, nor is it indicative of future operating results or
financial position of Bell.
2
Exhibit (99.1)
Page 2 of 8
BELL INDUSTRIES, INC.
Pro Forma Combined Balance Sheet
June 30, 1998
(In thousands)
(Unaudited)
Pro Forma
Historical Graphics(a) Adjustments Pro Forma
---------- ----------- ----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 10,629 $ 10,629
Accounts receivable 115,072 $(21,870) 93,202
Receivable from sale of Graphics $ 18,000 (b) 18,000
Inventories 157,111 (19,747) 137,364
Prepaid expenses and other 9,015 (100) 8,915
-------- -------- --------
Total current assets 291,827 (41,717) 268,110
-------- -------- --------
Properties, net 44,374 (4,102) 40,272
Goodwill 71,248 (2,960) 68,288
Other assets 8,542 (153) 8,389
-------- -------- --------
$415,991 $(48,932) $385,059
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 71,302 $(10,454) $ 60,848
Accrued liabilities and payroll 24,073 (l,595) 1,325 (b) 23,803
Current portion of long-term
liabilities 8,750 8,750
-------- -------- --------
Total current liabilities 104,125 (12,049) 93,401
-------- -------- --------
Long-term debt 147,418 (22,000)(b) 125,418
Deferred compensation and other 7,937 7,937
Shareholders' equity:
Common stock 101,217 101,217
Investment in Graphics (36,883) 36,883 (c)
Reinvested earnings 55,294 1,792 (b) 57,086
-------- --------- --------
Total shareholders' equity 156,511 (36,883) 158,303
Commitments and contingencies
-------- -------- --------
$415,991 $(48,932) $385,059
======== ========= ========
See accompanying Notes to Pro Forma Financial Statements.
3
Exhibit (99.1)
Page 3 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Six Months Ended June 30, 1998
(In thousands, except per share data)
(Unaudited)
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
---------- ----------- ----------- -------
Net sales $423,751 $(71,474) $352,277
-------- -------- --------
Costs and expenses:
Cost of products sold 338,058 (59,842) 278,216
Selling and administrative 65,491 (8,487) 57,004
Depreciation and amortization 5,345 (491) 4,854
Interest expense 6,675 $(1,442)(d) 5,233
-------- -------- --------
415,569 (68,820) 345,307
-------- -------- --------
Income from continuing operations
before income taxes 8,182 (2,654) 6,970
Income tax provision 3,830 (1,242) 675 (e) 3,263
-------- -------- --------
Income from continuing operations: $ 4,352 $ (1,412) $ 3,707
======== ======== ========
Share and per share data:
Income from continuing operations:
Basic $ 0.47 $ 0.40
======== ========
Diluted $ 0.46 $ 0.39
======== ========
Weighted average shares outstanding:
Basic 9,357 9,357
======== ========
Diluted 9,460 9,460
======== ========
See accompanying Notes to Pro Forma Financial Statements.
4
Exhibit (99.1)
Page 4 of 8
BELL INDUSTRIES, INC.
---------------------
Pro Forma Statement of Income
Six Months Ended June 30, 1997
(In thousands, except per share data)
(Unaudited)
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
---------- ----------- ----------- -------
Net sales $452,282 $(78,494) $373,788
-------- -------- --------
Costs and expenses:
Cost of products sold 355,607 (65,819) 289,788
Selling and administrative 73,747 (10,031) 63,716
Depreciation and amortization 5,160 (400) 4,760
Interest expense 5,589 $ (1,280)(d) 4,309
Integration charge 4,100 4,100
-------- -------- --------
444,203 (76,250) 366,673
-------- -------- --------
Income from continuing operations
before income taxes 8,079 (2,244) 7,115
Income tax provision 3,781 (1,050) 599 (e) 3,330
-------- -------- --------
Income from continuing operations $ 4,298 $ (1,194) $ 3,785
======== ======== ========
Share and per share data:
Income from continuing operations:
Basic $ 0.47 $ 0.42
======= ========
Diluted $ 0.46 $ 0.40
======= ========
Weighted average shares outstanding:
Basic 9,091 9,091
======= ========
Diluted 9,355 9,355
======= ========
See accompanying Notes to Pro Forma Financial Statements.
5
Exhibit (99.1)
Page 5 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Year Ended December 31, 1997
(In thousands, except per share data)
(Unaudited)
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
---------- ----------- ----------- -------
Net sales $890,737 $(156,288) $734,449
-------- --------- --------
Costs and expenses:
Cost of products sold 703,068 (131,724) 571,344
Selling and administrative 142,494 (19,336) 123,158
Depreciation and amortization 10,000 (804) 9,196
Interest expense 12,309 $(2,560)(d) 9,749
Integration charge 4,100 4,100
-------- --------- --------
871,971 (151,864) 717,547
-------- --------- --------
Income from continuing operations
before income taxes 18,766 (4,424) 16,902
Income tax provision 8,685 (2,047) 1,185 (e) 7,823
-------- --------- --------
Income from continuing operations $ 10,081 $ (2,377) $ 9,079
======== ========= ========
Share and per share data:
Income from continuing operations:
Basic $ 1.10 $ 0.99
======== ========
Diluted $ 1.07 $ 0.96
======== ========
Weighted average shares outstanding:
Basic 9,157 9,157
======== ========
Diluted 9,430 9,430
======== ========
See accompanying Notes to Pro Forma Financial Statements.
6
Exhibit (99.1)
Page 6 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Year Ended December 31, 1996
(In thousands, except per share data)
(Unaudited)
Pro Forma
Historical Graphics(a) Results
---------- ----------- -------
Net sales $623,193 $(117,131) $506,062
-------- --------- --------
Costs and expenses:
Cost of products sold 485,634 (97,758) 387,876
Selling and administrative 100,197 (15,273) 84,924
Depreciation and amortization 6,228 (492) 5,736
Interest expense 3,673 3,673
-------- --------- --------
595,732 (113,523) 482,209
-------- --------- --------
Income from continuing operations
before income taxes 27,461 (3,608) 23,853
Income tax provision 11,534 (1,515) 10,019
-------- --------- --------
Income from continuing operations $ 15,927 $ (2,093) $ 13,834
======== ========= ========
Share and per share data:
Income from continuing operations:
Basic $ 1.80 $ 1.56
======== ========
Diluted $ 1.75 $ 1.52
======== ========
Weighted average shares outstanding:
Basic 8,852 8,852
======== ========
Diluted 9,109 9,109
======== ========
See accompanying Notes to Pro Forma Financial Statements.
7
Exhibit (99.1)
Page 7 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Year Ended December 31, 1995
(In thousands, except per share data)
(Unaudited)
Pro Forma
Historical Graphics(a) Results
---------- ----------- -------
Net sales $564,325 $(73,359) $490,966
-------- -------- --------
Costs and expenses:
Cost of products sold 436,568 (61,400) 375,168
Selling and administrative 92,643 (9,780) 82,863
Depreciation and amortization 5,940 (185) 5,755
Interest expense 3,612 3,615
Lease commitment provision 2,800 2,800
Gain on sale of division (3,050) (3,050)
-------- -------- --------
538,513 (71,365) 467,148
-------- -------- --------
Income from continuing operations
before income taxes 25,812 (1,994) 23,818
Income tax provision 10,841 (837) 10,004
-------- -------- --------
Income from continuing operations $ 14,971 $ (1,157) $ 13,814
======== ======== ========
Share and per share data:
Income from continuing operations:
Basic $ 1.74 $ 1.60
======== ========
Diluted $ 1.67 $ 1.55
======== ========
Weighted average shares outstanding:
Basic 8,626 8,626
======== ========
Diluted 8,940 8,940
======== ========
See accompanying Notes to Pro Forma Financial Statements.
8
Exhibit (99.1)
Page 8 of 8
BELL INDUSTRIES, INC.
NOTES TO PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
(a) Represents the elimination of the historical accounts of Graphics for
each of the periods presented.
(b) Represents the receipt of $22 million of estimated net cash proceeds at
June 30, 1998 and an $18 million receivable to be received over a 90 day
period after closing. Additionally, reflects a gain on the sale of
Graphics, net of estimated selling costs and taxes. The final purchase
price is subject to post closing adjustments.
(c) Eliminates the investment in Graphics.
(d) Represents the reduction in consolidated interest expense at Bell's
average cost of borrowing for the period assuming the estimated net cash
proceeds are utilized, as required, to reduce outstanding borrowings.
The remaining $18 million of proceeds are assumed to be received ratably
over a 90 day period.
(e) Adjusts income tax expense for the effect of the pro forma adjustments
based on the effective tax rate for the period presented.