Bell Industries Reports 2003 Fourth Quarter, Full Year Results.Business Editors EL SEGUNDO El Segundo (ĕl sēgŭn`dō), industrial city (1990 pop. 15,223), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1917. Its products include navigation and computer systems, aircraft parts, office machines, telephone apparatus, and , Calif.--(BUSINESS WIRE)--Feb. 20, 2004 Bell Industries, Inc. (AMEX AMEX See: American Stock Exchange :BI) today reported higher net revenues and a reduction in its loss before income taxes for the fourth quarter ended December December: see month. 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 Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of $2.1 million, equal to $1.3 million after tax, or $0.14 per share, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 Tracy, city (1990 pop. 33,558), San Joaquin co., central Calif., in the San Joaquin valley; inc. 1910. It is a railroad junction in a cattle and dairying region. A. Edwards, chairman, president and chief executive officer of Bell Industries. Sales at Bell's Tech.logix Group (BTL BTL Between the Lines BTL Battle BTL Bottle BTL Buy To Let BTL Below The Line (advertising) BTL Biomass-to-Liquids BTL Bubba the Love Sponge BTL Between the Lions (PBS children's TV show) ), the company's largest operating unit operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , 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 operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. 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 Start-up The earliest stage of a new business venture. 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 (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. engagement in early 2004. Nevertheless, we remain encouraged by signs of a stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. 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 Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" , 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 RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a 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 Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. 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 The name given to the method provided under federal tax law that allows a taxpayer to apply net operating losses incurred during one year to the recomputation of Income Tax owed to the government for three preceding taxable years. opportunities, the company has recorded a valuation allowance against net deferred tax asset balances. Edwards said that 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 Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. no longer required, resulted in a 2003 fourth quarter 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. Bell continues to maintain a strong balance sheet with no bank debt. At year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2003, Bell had net working capital of $17.8 million and cash of $12.2 million. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. 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 Most new technologies follow a similar technology lifecycle describing the technological maturity of a product. This is not similar to a product life cycle, but applies to an entire technology, or a generation of a technology. services, including planning, product sourcing, migration, support, and disposal services. Recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other 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 telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. equipment. Certain matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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.
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)
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)
Weighted average common stock 8,367 8,404 8,367 8,743
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)
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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