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Previous: TIE COMMUNICATIONS INC, DEFA14A, 1995-05-02 |
Next: ENERGY SERVICE COMPANY INC, 10-Q, 1995-05-02 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarter ended March 31, 1995
Commission file number 1-7899
BELL INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 95-2039211
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11812 San Vicente Blvd., Los Angeles, California 90049-5069
- ------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 826-2355
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of the Registrant's class of common
stock, as of April 24, 1995: 6,502,196 shares.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Bell Industries, Inc.
Consolidated Statement of Income
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31
-------------------------
1995 1994
-------- --------
<S> <C> <C>
Net sales $126,945 $113,507
-------- --------
Costs and expenses
Cost of products sold 97,983 88,064
Selling, general and
administrative expenses 23,634 20,721
Interest expense 908 1,099
-------- -------
122,525 109,884
-------- -------
Income before income taxes 4,420 3,623
Income tax provision 1,860 1,540
-------- -------
Net income $ 2,560 $ 2,083
======== =======
Share and per share data:
- ------------------------
Net income $ 0.38 $ 0.32
======== =======
Weighted average common
shares outstanding 6,726 6,598
======== =======
</TABLE>
<PAGE> 3
-2-
Bell Industries, Inc.
Consolidated Balance Sheet
(Dollars in thousands)
<TABLE>
<CAPTION>
Mar. 31 Dec. 31 Mar. 31
1995 1994 1994
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,661 $ 3,631 $ 4,171
Accounts receivable, less
allowance for doubtful accounts
of $1,179, $ 1,041 and $1,085 71,393 68,914 60,086
Inventories 90,325 95,910 88,047
Prepaid expenses and other 4,222 5,324 7,630
-------- -------- --------
Total current assets 168,601 173,779 159,934
-------- -------- --------
Properties, at cost:
Land 443 443 443
Buildings and improvements 8,497 8,857 8,973
Equipment 30,014 31,362 31,572
-------- -------- --------
38,954 40,662 40,988
Less accumulated depreciation (24,362) (25,722) (24,088)
-------- -------- --------
Total properties 14,592 14,940 16,900
Other assets 11,637 11,648 11,572
-------- -------- --------
$194,830 $200,367 $188,406
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 33,308 $ 34,705 $ 32,301
Accrued payroll and liabilities 12,648 12,123 10,076
Current portion of long-term
liabilities 6,686 9,662 8,593
Income taxes payable 3,034 1,171 1,532
-------- -------- --------
Total current liabilities 55,676 57,661 52,502
-------- -------- --------
Long-term liabilities:
Notes payable 27,714 33,857 36,857
Obligations under capital leases 2,068 2,463 3,611
Deferred compensation and other 5,024 4,616 3,450
-------- -------- --------
Total long-term liabilities 34,806 40,936 43,918
-------- -------- --------
Shareholders' equity:
Preferred stock - $1 par value -
Authorized - 1,000,000 shares
Outstanding - None
Common stock - $.25 par value -
Authorized - 10,000,000 shares
Outstanding - 6,499,467,
6,497,557 and 6,144,791 1,625 1,624 1,536
Other paid-in capital 54,097 54,080 47,154
Reinvested earnings 48,626 46,066 43,296
-------- -------- --------
Total shareholders' equity 104,348 101,770 91,986
Commitments and contingencies
-------- -------- --------
$194,830 $200,367 $188,406
======== ======== ========
</TABLE>
<PAGE> 4
-3-
Bell Industries, Inc.
Consolidated Statement of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
----------------------------
1995 1994
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 124,190 $ 106,873
Cash paid to suppliers and employees (113,690) (102,506)
Interest paid (1,762) (2,166)
Income taxes paid (109) (84)
--------- ---------
Net cash provided by
operating activities 8,629 2,117
--------- ---------
Cash flows from investing activities:
Purchase of business (5,864)
Additions to properties and other (336) 200
--------- ---------
Net cash used in
investing activities (336) (5,664)
--------- ---------
Cash flows from financing activities:
Bank borrowings (payments), net (5,000) 5,000
Payments on notes payable (4,143) (3,000)
Other (120) (428)
--------- ---------
Net cash provided by (used in)
financing activities (9,263) 1,572
--------- ---------
Net decrease in cash and cash equivalents (970) (1,975)
Cash and cash equivalents at beginning
of period 3,631 6,146
--------- ---------
Cash and cash equivalents at end of
period $ 2,661 $ 4,171
========= =========
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 2,560 $ 2,083
Depreciation and amortization 1,271 1,271
Amortization of intangibles 142 150
Provision for losses on accounts
receivable 273 171
Changes in assets and liabilities
Accounts receivable (2,755) (6,634)
Inventories 5,585 (2,956)
Accounts payable (1,397) 6,870
Income taxes payable 1,751 1,456
Other 1,199 (294)
---------- ---------
$ 8,629 $ 2,117
========== =========
</TABLE>
<PAGE> 5
-4-
Bell Industries, Inc.
Notes to Consolidated Financial Statements
Accounting Principles
The financial information included herein has been prepared in conformity with
the accounting principles reflected in the financial statements included in the
Transition Report on Form 10-K filed with the Securities and Exchange
Commission for the transition period from July 1, 1994 to December 31, 1994.
In the opinion of management, all adjustments, consisting of normal recurring
adjustments considered necessary for a fair presentation, have been included.
The operating results for the interim periods presented are not necessarily
indicative of results for the full year.
Per Share Data
Operating results data per share is based upon the weighted average number of
common and common equivalent shares outstanding. Common equivalent shares
represent the net number which would be issued assuming the exercise of
dilutive stock options and stock warrants, reduced by the number of shares
which could be repurchased from the proceeds of such exercises.
<PAGE> 6
-5-
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition
Results of operations by business segment for the three months ended March 31,
1995 and 1994 were as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended
March 31
--------------------------------
1995 1994
-------- --------
<S> <C> <C>
Net sales
Electronics $102,484 $ 91,854
Graphic Arts 15,595 13,840
Recreational 8,866 7,813
-------- --------
$126,945 $113,507
======== ========
Operating income
Electronics $ 6,674 $ 5,909
Graphic Arts 412 366
Recreational Products 494 468
-------- --------
Operating income 7,580 6,473
Corporate costs (2,252) (2,021)
Interest expense (908) (1,099)
Income tax provision (1,860) (1,540)
-------- --------
Net income $ 2,560 $ 2,083
======== ========
</TABLE>
<PAGE> 7
-6-
For the quarter ended March 31, 1995, the Company's net sales increased 12% to
$126.9 million and operating income increased 22% to $4.4 million over the
comparable quarter in the prior year. The Company recorded net income of $2.6
million, or $.38 per share, compared to $2.1 million, or $.32 per share, in the
prior year quarter.
Sales of the Electronics Group increased 12% to $102.5 million and operating
income increased 13% to $6.7 million. The improved performance was attributed
to substantially stronger shipments of the Group's core electronic components,
partially offset by reduced sales of memory and microprocessor products. The
availability of these products, which are provided primarily by one supplier,
cannot be predicted due to capacity and allocation issues at that supplier.
In addition, the group recorded increased sales of microcomputer systems and
services.
Graphic Arts Group sales increased 13% to $15.6 million and operating income
increased 13% to $0.4 million. The favorable results reflected a stronger
California market for graphics supplies and higher sales of electronic imaging
equipment. Recreational Products Group sales increased 13% to $8.9 million
while operating income remained relatively unchanged. The decline in operating
margins was primarily attributed to a shift in product mix. Mild winter weather
in the upper Midwest affected sales of higher margin snowmobile supplies and
other winter-related products.
Cost of products sold as a percentage of sales decreased to 77.2% from 77.6% as
a result of product mix changes, primarily decreased sales of lower margin
memory products, while selling, general and administrative expenses increased
slightly to 18.6% of sales from 18.3%. Corporate costs increased over the prior
year quarter primarily as a result of deferred compensation expenses. The
decrease in interest expense was attributed to reductions in long-term debt.
The Company's income tax rate was approximately 42% for both periods presented.
<PAGE> 8
-7-
The Company's financial position continued to be strong at March 31, 1995 as
set forth in the table below (dollars in thousands, except per share amounts):
<TABLE>
<CAPTION>
March 31
-----------------------------
1995 1994
-------- --------
<S> <C> <C>
Cash and cash equivalents $ 2,661 $ 4,171
Working capital $112,925 $107,432
Current ratio 3.0:1 3.0:1
Ratio of long-term liabilities
to total capitalization 25% 32%
Shareholders' equity per share $ 16.05 $ 14.26
Days' sales in receivables 52 49
Days' sales in inventories 84 91
</TABLE>
Cash provided by operating activities totaled $8.6 million compared to cash
provided by operating activities of $2.1 million in the prior year quarter. The
change in operating cash flows was attributed to reductions in net current
assets, primarily inventories, and increased profits during the current
quarter. Cash used in investing activities in the prior year included the
purchase of a business. Cash used in financing activities included repayments
on notes payable, bank borrowings and capital lease obligations.
The Company believes that sufficient cash resources exist to support short-term
requirements, including debt and lease payments, and longer term objectives,
either through available cash, bank borrowings, or cash generated from
operations.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
None
(b) Reports on Form 8-K:
None
<PAGE> 9
-8-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
BELL INDUSTRIES, INC.
By:
DATE: April 27, 1995 Theodore Williams
-------------------------------------------
Theodore Williams,
Chairman and
Chief Executive Officer
DATE: April 27, 1995 Bruce M. Jaffe
-------------------------------------------
Bruce M. Jaffe,
President and
Chief Operating Officer
DATE: April 27, 1995 Tracy A. Edwards
-------------------------------------------
Tracy A. Edwards,
Vice President and
Chief Financial Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 2661
<SECURITIES> 0
<RECEIVABLES> 72,572
<ALLOWANCES> 1,179
<INVENTORY> 90,325
<CURRENT-ASSETS> 168,601
<PP&E> 38,954
<DEPRECIATION> 24,362
<TOTAL-ASSETS> 194,830
<CURRENT-LIABILITIES> 55,676
<BONDS> 34,806
<COMMON> 1625
0
0
<OTHER-SE> 102,723
<TOTAL-LIABILITY-AND-EQUITY> 194,830
<SALES> 126,945
<TOTAL-REVENUES> 126,945
<CGS> 97,983
<TOTAL-COSTS> 97,983
<OTHER-EXPENSES> 23,634
<LOSS-PROVISION> 273
<INTEREST-EXPENSE> 908
<INCOME-PRETAX> 4420
<INCOME-TAX> 1860
<INCOME-CONTINUING> 2560
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2560
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
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