INDIANAPOLIS, Aug. 14, 2008 (PRIME NEWSWIRE) -- Bell Industries, Inc. (Pink Sheets:BIUI) today reported financial results for its second quarter and six months ended June 30, 2008.
Revenues from continuing operations for the 2008 second quarter were $26.2 million, down 19.5% from $32.5 million a year ago, with $4.3 million of the decrease in revenues related to the company's Technology Solutions Group and $2.0 million of the decrease related to its Recreational Products Group. The company incurred a loss from continuing operations of $1.4 million, or $0.17 per share, for the 2008 second quarter. This reflects a significant improvement over the prior-year second quarter loss from continuing operations of $4.2 million, or $0.49 per share. Bell incurred a net loss in the 2008 second quarter of $4.8 million, or $0.56 per share, including a loss from discontinued operations of $3.4 million, equal to $0.39 per share. This compares with a net loss of $4.8 million, or $0.56 per share, including a loss from discontinued operations of $617,000, or $0.07 per share, for the 2007 second 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 June 2008, Bell completed the sale of the balance of its SkyTel division to Velocita Wireless LLC for a total consideration of $7.5 million, comprised of $3.0 million in cash at closing, a $3.0 million secured note which was paid in July and a $1.5 million unsecured note payable in June 2009. The consideration is subject to adjustment based upon the closing net current assets as defined by the agreement. 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 three and six month periods ended June 30, 2008 and 2007.
For the first half of 2008, revenues from continuing operations were $49.2 million, down 20.6% from $62.1 million a year ago, with $10.0 million of the decrease in revenues related to the company's Technology Solutions Group and $2.9 million related to its Recreational Products Group. The company incurred a loss from continuing operations of $2.1 million, or $0.24 per share, for the year-to-date period. This reflects a significant improvement over the prior-year first six months loss from continuing operations of $6.1 million, or $0.71 per share. Bell incurred a net loss for the 2008 first half of $4.0 million, or $0.46 per share, including a loss from discontinued operations of $1.9 million, equal to $0.22 per share. This compares with a net loss of $6.3 million, or $0.74 per share, including a loss from discontinued operations of $283,000, equal to $0.03 per share.
The Technology Solutions Group posted revenues of $14.2 million for the 2008 second quarter, compared with $18.5 million in the 2007 second 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 second quarter amounted to $34,000, increasing by approximately $2.8 million over the prior-year second quarter. This increase is attributed to the closure of the unprofitable Springfield call center, which included a $2.3 million bad debt expense related to its Springfield call center customer, SunRocket, ceasing operations, improved operational efficiencies on several service engagements and significant reductions in overhead costs.
Bell's Recreational Products Group reported revenues of $11.9 million for the 2008 second quarter, compared with $14.0 million in the 2007 second quarter. The company attributed the decrease in revenues primarily to lower sales in the marine and recreational vehicle product lines, which is attributed to a decline in general economic conditions, including significantly higher gas prices, as well as unfavorable weather conditions in the upper Midwestern United States compared with the 2007 second quarter. Although revenues were down year-over-year, operating income for the 2008 second quarter increased by $96,000 over the prior-year period to $688,000, principally reflecting a 260 basis point improvement in gross profit margins and reductions in headcount, freight and facility costs.
"With the SkyTel divestiture now completed, our focus is entirely on our two remaining businesses," said Kevin J. Thimjon, president and chief financial officer of Bell Industries. "We are pleased that both of our operating units posted improved results versus the 2007 second quarter, generating operating income for the quarter for each division, as we continue to reduce our corporate costs."
Bell's corporate costs for the 2008 second quarter totaled $775,000, down more than $1.2 million from $2.0 million in the 2007 second quarter. The 2008 second quarter results benefited from a $200,000 reduction in the settlement amount for a litigation matter. The balance of the decrease is attributed to reductions in headcount and related travel and benefits, the closure of the company's former corporate headquarters in Los Angeles and lower marketing and telecommunications expenses.
About Bell Industries, Inc.
Bell Industries is comprised of two operating units, Bell's Technology Solutions Group and its Recreational Products Group. The company's Technology Solutions Group offers a comprehensive portfolio of customizable and scalable technology solutions ranging from information technology asset lifecycle management 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 Six months ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Net revenues:
Products $ 19,569 $ 23,708 $ 35,299 $ 43,064
Services 6,585 8,799 13,943 18,989
-------- -------- -------- --------
Total net revenues 26,154 32,507 49,242 62,053
-------- -------- -------- --------
Costs and expenses:
Cost of products sold 15,513 19,261 28,273 35,589
Cost of services provided 4,747 5,892 9,686 13,149
Selling, general and
administrative expense 5,947 11,557 11,861 21,312
Interest expense, net 307 -- 446 --
Loss on extinguishment
of debt 1,053 -- 1,053 --
Gain on sale of assets -- -- -- (1,976)
-------- -------- -------- --------
Total costs and expenses 27,567 36,710 51,319 68,074
-------- -------- -------- --------
Loss from continuing
operations before
provision for income taxes (1,413) (4,203) (2,077) (6,021)
Provision for income taxes 17 8 33 31
-------- -------- -------- --------
Loss from continuing
operations (1,430) (4,211) (2,110) (6,052)
Discontinued operations:
Loss from discontinued
operations, net of tax (2,881) (617) (1,362) (283)
Loss on sale of
discontinued operations,
net of tax (500) -- (500) --
-------- -------- -------- --------
Loss from discontinued
operations, net of tax (3,381) (617) (1,862) (283)
-------- -------- -------- --------
Net loss $ (4,811) $ (4,828) $ (3,972) $ (6,335)
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Share and per share data
Basic and Diluted:
Loss from continuing
operations $ (0.17) $ (0.49) $ (0.24) $ (0.71)
Loss from discontinued
operations (0.39) (0.07) (0.22) (0.03)
-------- -------- -------- --------
Net loss $ (0.56) $ (0.56) $ (0.46) $ (0.74)
======== ======== ======== ========
Weighted average
common shares
outstanding 8,650 8,629 8,650 8,615
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OPERATING RESULTS BY BUSINESS SEGMENT
Net revenues:
Technology Solutions Group
Products $ 7,641 $ 9,743 $ 13,480 $ 18,989
Services 6,585 8,799 13,943 18,427
-------- -------- -------- --------
Total Technology
Solutions Group 14,226 18,542 27,423 37,416
Recreational Products Group 11,928 13,965 21,819 24,637
-------- -------- -------- --------
Total net revenues $ 26,154 $ 32,507 $ 49,242 $ 62,053
======== ======== ======== ========
Operating income (loss):
Technology Solutions Group $ 34 $ (2,793) $ 458 $ (3,845)
Recreational Products Group 688 592 876 214
Corporate costs (775) (2,002) (1,912) (4,366)
-------- -------- -------- --------
Total operating loss (53) (4,203) (578) (7,997)
Gain on sale of assets -- -- -- (1,976)
Loss on extinguishment
of debt 1,053 -- 1,053 --
Interest expense, net 307 -- 446 --
-------- -------- -------- --------
Loss from continuing
operations before
income taxes $ (1,413) $ (4,203) $ (2,077) $ (6,021)
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Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
June 30, December 31,
2008 2007
-------- --------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 1,389 $ 409
Accounts receivable, net 13,238 12,304
Inventories, net 8,541 10,323
Notes receivable 4,500 --
Prepaid expenses and
other current assets 5,814 1,982
Assets held for sale -- 27,814
-------- --------
Total current assets 33,482 52,832
Fixed assets, net 2,079 1,956
Assets held for sale -- 5,000
Other assets 614 2,231
-------- --------
Total assets $ 36,175 $ 62,019
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Floor plan payables $ 428 $ 1,064
Revolving credit facility 2,022 4,775
Accounts payable 8,912 10,438
Accrued payroll 2,307 1,639
Liabilities associated
with assets held for sale -- 19,084
Other accrued liabilities 6,664 5,849
-------- --------
Total current liabilities 20,333 42,849
Convertible note 10,601 8,969
Other long-term liabilities 4,002 5,418
-------- --------
Total liabilities 34,936 57,236
Shareholders' equity 1,239 4,783
-------- --------
Total liabilities and
shareholders' equity $ 36,175 $ 62,019
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