Bell Industries Reports Improvement in Operating Results for 2002 Second Quarter; -- Company Maintains Strong Balance Sheet, with No Debt --.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)--Aug. 6, 2002 Bell Industries, Inc. (AMEX AMEX See: American Stock Exchange :BI) today reported financial results for the three and six months ended June June: see month. 30, 2002. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the 2002 second quarter totaled $41.3 million, compared with $52.4 million in the corresponding 2001 period. Bell recorded net income of $438,000, or $0.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, contrasted with a net loss of $659,000, or $0.07 per share, including special pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges of $1.5 million, a year ago. Excluding the special pre-tax charges, income totaled $245,000, or $0.03 per diluted share, in the 2001 second quarter. Bell said its 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 , the 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) ), experienced reduced sales for the quarter as business enterprises continued to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. information technology expenditures. Sales at BTL also reflected a shift to a direct purchase model for the securing and delivery of computer hardware directly from manufacturers. For the current second quarter, BTL posted net sales of $25.7 million, compared with $36.4 million in the prior year. 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. for BTL improved for the quarter, totaling $247,000, versus an 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. of $853,000, which included a pre-tax charge of $845,000. "Although the economic environment remains extremely challenged and the shift to the direct purchase model continues to impact results, we are beginning to see a growing number of opportunities for BTL as we adapt to changes in product demand and focus on building our services business," said Tracy A. Edwards, chairman, president and chief executive officer of Bell Industries. "With our emphasis on providing technology solutions that build value in our clients' IT capabilities, we believe BTL will be well positioned when the economy improves. Our confidence is further strengthened by initiatives to develop strategic alliances where we see additional opportunities and client assignments." Bell's Recreational Products Group (RPG (Report Program Generator) One of the first program generators designed for business reports, introduced in 1964 by IBM. In 1970, RPG II added enhancements that made it a mainstay programming language for business applications on IBM's System/3x midrange computers. ) posted sales of $14.1 million in the three months ended June 30, 2002, compared with $14.2 million a year earlier. Operating income rose slightly to $850,000 from $802,000 in the corresponding quarter a year ago, primarily reflecting efforts to reduce operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Sales for J.W. Miller, the company's electronics manufacturing This article presents a typical manufacturing process of an electronic assembly. Component manufacturing Components such as resistors, capacitors and integrated circuits are generally made by specialized contractors. business that serves the computer and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. sectors, continued to be impacted by weak demand, and declined to $1.5 million from $1.8 million in the 2001 second quarter. Operating income decreased to $160,000 from $375,000 last year, as a result of lower sales and additions to inventory reserves in view of the difficult market conditions. For the first half of 2002, net sales for Bell Industries totaled $73.5 million, versus $105.4 million for the comparable 2001 period. The company incurred a net loss of $1.8 million, or $0.20 per share, for the 2002 six months, which included a 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, of goodwill following the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." The effect of this accounting change is reflected in operating results as of January 1, 2002. For the corresponding prior-year period, Bell sustained a net loss of $551,000, or $0.06 per share, including special charges. Subsequent to the close of the second quarter, the company repurchased 200,000 shares of Bell's common stock under its board-authorized stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. "We will continue to review such opportunities in evaluating capital allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as for Bell," Edwards said. "The purchase underscores our positive view of the company's long term prospects." At June 30, 2002, the company had net working capital of $21.9 million, cash of $9.2 million and no bank debt. 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 $27.9 million, or $3.14 per share. 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. management services including strategic sourcing, technology integration, and product support, principally to middle market companies. Bell also distributes after-market parts and accessories to the recreational vehicle market and manufactures specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. products for the computer and electronics industry. 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, success in developing new alliances, realizing business opportunities as the economy improves 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 Six months ended
June 30 June 30
2002 2001 2002 2001
Net sales $ 41,349 $ 52,401 $ 73,466 $105,387
Cost of sales 33,504 43,449 59,861 88,334
Selling and administrative 7,157 8,655 14,509 16,742
Interest, net (37) (108) (93) (272)
Special items, net (1) (2) 1,495 1,495
40,624 53,491 74,277 106,299
Income (loss) before income
taxes and cumulative effect
of accounting change 725 (1,090) (811) (912)
Income tax expense (benefit) 287 (431) (319) (361)
Income (loss) before cumulative
effect of accounting change 438 (659) (492) (551)
Cumulative effect of
accounting change, net of
income tax benefit of $836 (1,280)
Net income (loss) $ 438 $ (659) $ (1,772) $ (551)
Share and per share data
Basic and diluted:
Income (loss) before
cumulative effect
of accounting change $ .05 $ (.07) $ (.06) $ (.06)
Net income (loss) $ .05 $ (.07) $ (.20) $ (.06)
Weighted average common stock:
Basic 8,900 8,852 8,895 8,838
Diluted 8,900 8,852 8,895 8,838
OPERATING RESULTS BY BUSINESS SEGMENT
Net sales
Systems Integration $ 25,725 $ 36,396 $ 46,831 $ 76,024
Recreational Products 14,125 14,227 23,909 25,152
Electronics Manufacturing 1,499 1,778 2,726 4,211
$ 41,349 $ 52,401 $ 73,466 $105,387
Operating income (loss)
Systems Integration (1) $ 247 $ (853) $ (772) $ (752)
Recreational Products 850 802 925 944
Electronics Manufacturing 160 375 236 934
Special items, net (2) (650) (650)
Corporate costs (569) (872) (1,293) (1,660)
688 (1,198) (904) (1,184)
Interest, net 37 108 93 272
Income tax benefit (expense) (287) 431 319 361
Cumulative effect of
accounting change, net (1,280)
Net income (loss) $ 438 $ (659) $ (1,772) $ (551)
(1) Systems Integration operating results for the three and six month
periods ended June 30, 2001 include a pre-tax charge of $845,000
for staff separation and facilities consolidation costs related
to the company's strategy implementation and realignment efforts.
(2) Corporate related special item for the three and six month periods
ended June 30, 2001 represents settlement costs associated with an
executive change-in-control contract.
Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
(Unaudited)
June 30, December 31,
2002 2001
Assets
Current assets:
Cash and cash equivalents $ 9,239 $ 10,418
Accounts receivable, net 21,505 17,827
Inventories 12,163 13,608
Prepaid expenses and other 4,306 3,879
Total current assets 47,213 45,732
Fixed assets, net 5,366 6,319
Goodwill 2,116
Other assets 3,281 2,739
$ 55,860 $ 56,906
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $ 14,702 $ 11,833
Accrued payroll and
liabilities 10,619 12,585
Total current liabilities 25,321 24,418
Long-term liabilities 2,605 2,810
Shareholders' equity 27,934 29,678
$ 55,860 $ 56,906
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