UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 10, 1997
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BELL SPORTS CORP.
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(Exact name of registrant as specified in its charter)
Delaware 0-19873 36-3671789
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(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) file number) identification no.)
15170 N. Hayden Rd. Suite 1, Scottsdale, Arizona 85260
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(Address of principal executive offices) (Zip Code)
(602) 951-0033
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(Registrant's telephone number, including area code)
N/A
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Former name, former address and former fiscal year, if changed
since last report.
<PAGE>
ITEM 5. Other Events
On April 1, 1997 BSC issued a Press Release which is attached hereto Exhibit 20
and incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
NUMBER DESCRIPTION PAGE
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20 Press Release dated April 1, 1997 4
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: April 10, 1997
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BELL SPORTS CORP.
/s/ Linda K. Bounds Senior Vice President, Chief Financial
- ----------------------------- Officer, Secretary and Treasurer
Linda K. Bounds --------------------------------------
(Principal financial officer)
/s/ John A. Williams Vice President and Corporate Controller
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John A. Williams (Principal accounting officer)
BELL SPORTS CORP.
NEWS RELEASE
RELEASE DATE: April 1, 1997 -- For Immediate Release
CONTACT: Sondra Lehman, Investor Relations (602) 951-0033 ext. 235
BELL SPORTS CORP. ANNOUNCES
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SALE OF THE SERVICE CYCLE/MONGOOSE
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BUSINESS AND CONSOLIDATION PLAN
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SCOTTSDALE, AZ -- Bell Sports Corp. (Nasdaq: BSPT and BSPTG) announced today
that the Company has entered into an Asset Purchase Agreement to sell its
Service Cycle/Mongoose inventory, trademarks and certain other assets to
Brunswick Corporation (NYSE: BC). The exact purchase price will be determined at
the transaction closing based primarily upon the net book value of inventory
purchased. The Company currently values the transaction, which includes the sale
of certain stock options described below, at approximately $22 million.
Additionally, Bell will retain and collect the accounts receivable for the
Service Cycle/Mongoose business, which are currently estimated to be
approximately $21 million. The Company expects the transaction to close in early
May, subject to customary closing conditions and the expiration of the
applicable waiting period under the Hart-Scott-Rodino Act.
The Service Cycle/Mongoose business, with approximately $60 million in annual
revenues, offers bicycles sold under the Mongoose brand name and bicycle
accessories under the Advent brand name. Service Cycle also distributes several
brands of non-proprietary bicycle parts and accessories.
In a related transaction, the Company sold Brunswick Corp. a three year option
to purchase 600,000 shares of Bell's common stock at an exercise price of $7.50
per share. The option reflects potential for future marketing alliances between
the two companies.
The Company expects to use cash generated from the transaction to reduce
borrowings under its line of credit and for other general corporate purposes,
which may include the repurchase of Bell's common shares from time to time.
The Company also announced plans to reorganize North American distribution and
manufacturing operations to better utilize facilities and to further reduce
overhead and selling, general and administrative expenses by significantly
downsizing the Scottsdale, Arizona corporate office by consolidating certain
Scottsdale functions with the San Jose, California office.
As part of the reorganization plan, the Company is implementing certain key
organizational changes, including the appointment of Ms. Mary J. George to
President and Chief Operating Officer of the Company. Ms. George was formerly
President - North America Operations. In addition, Mr. Howard A. Kosick,
formerly Executive Vice President, Chief Financial Officer, Secretary and
Treasurer will assume the duties of U.S. Group President, and Ms. Linda K.
Bounds, formerly Vice President and Corporate Controller, will assume the Chief
Financial Officer, Secretary and Treasurer duties.
The Company expects the consolidation process and operational streamlining to
enhance annual pre-tax results by $4 million to $5 million, and to be largely
completed in the first half of calendar 1998. The one-time costs associated with
these changes and the disposition of the Service Cycle/Mongoose business will be
recorded in the Company's fiscal third quarter, and are estimated to be in the
range of $25 million to $30 million, which includes a substantial write-off of
goodwill.
Terry G. Lee, Chairman and C.E.O. stated, "Divesting the Service Cycle/Mongoose
business enables Bell to consolidate its distribution centers, improve its cash
position by approximately $43 million and focus on its core competencies in the
bicycle helmet and bicycle accessory categories. The facility consolidations and
operating changes reflect our ongoing commitment to reduce costs and improve
profitability. The Company has now experienced four quarters of improved
operating results before one-time charges and this year's third fiscal quarter
will continue this trend. The strategic initiatives we began in 1996 are
continuing to show positive results. These additional changes are being
implemented to build a stronger foundation and a more focused Company to
facilitate future earnings growth."
Certain matters discussed in this press release are forward-looking statements
that involve risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. These include but are
not limited to risks indicated in filings from time-to-time with the Securities
and Exchange Commission.
Headquartered in Scottsdale, Arizona, Bell Sports is a leading manufacturer and
marketer of bicycle helmets, bicycle accessories and auto racing helmets. Bell
Sports markets its products under the brand names: Bell, Giro, Rhode Gear,
VistaLite, Blackburn, BSI, Bike Star, SportRack, Copper Canyon and Cycle
Products.
