INDIANAPOLIS, May 15, 2008 (PRIME NEWSWIRE) -- Bell Industries, Inc. (Pink Sheets:BIUI) 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 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 on Form 10-K, recent and forthcoming Quarterly Reports on Form 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.
Bell Industries, Inc.
Consolidated Operating Results
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31,
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2008 2007
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Net revenues:
Products $15,730 $19,355
Services 7,358 10,190
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Total net revenues 23,088 29,545
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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)
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Total costs and expenses 23,752 31,363
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Loss from continuing operations before provision
for income taxes (664) (1,818)
Provision for income taxes 16 23
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Loss from continuing operations (680) (1,841)
Income from discontinued operations, net of tax 1,519 334
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Net income (loss) $ 839 $(1,507)
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Share and per share data
Basic:
Loss from continuing operations $ (0.08) $ (0.22)
Income from discontinued operations 0.18 0.04
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Net income (loss) $ 0.10 $ (0.18)
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Weighted average common shares outstanding 8,650 8,600
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Diluted:
Loss from continuing operations $ (0.06) $ (0.22)
Income from discontinued operations 0.15 0.04
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Net income (loss) $ 0.09 $ (0.18)
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Weighted average common shares outstanding 11,467 8,600
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OPERATING RESULTS BY BUSINESS SEGMENT
Net revenues:
Technology Solutions Group
Products $ 5,839 $ 8,683
Services 7,358 10,190
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Total Technology Solutions Group 13,197 18,873
Recreational Products Group 9,891 10,672
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Total net revenues $23,088 $29,545
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Operating income (loss):
Technology Solutions Group $ 424 $(1,052)
Recreational Products Group 188 (378)
Corporate costs (1,137) (2,364)
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Total operating loss (525) (3,794)
Gain (loss) on sale of assets -- (1,976)
Interest expense, net 139 --
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Loss from continuing operations before income
taxes $ (664) $(1,818)
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Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
March 31, Dec. 31,
2008 2007
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ASSETS (unaudited)
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
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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
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Total assets $57,924 $62,019
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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
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Total current liabilities 37,578 42,849
Convertible note 9,209 8,969
Other long-term liabilities 5,461 5,418
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Total liabilities 52,248 57,236
Shareholders' equity 5,676 4,783
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Total liabilities and shareholders' equity $57,924 $62,019
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