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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(c) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): January 7, 1997
BELL INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
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California 1-11471 95-2039211
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<S> <C> <C>
(State of incorporation) (Commission File Number) (IRS Identification No.)
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<S> <C> <C>
11812 San Vicente Blvd., Suite 300 Los Angeles, CA 90049
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (310) 826-2355.
N/A
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
On November 26, 1996, Bell Industries, Inc., a California corporation
("Bell" or the "Registrant"), ME Acquisition, Inc., a New York corporation and
wholly-owned subsidiary of the Registrant (the "Purchaser"), and Milgray
Electronics, Inc., a New York corporation ("Milgray"), executed an Agreement
and Plan of Merger (the "Merger Agreement"), which provided for the merger of
the Purchaser with and into Milgray and the conversion of all of the
outstanding shares (the "Shares") of common stock of Milgray, into the right to
receive cash in the amount of $14.77 per Share.
On December 4, 1996 Registrant commenced a tender offer for the
outstanding shares of Milgray common stock. The tender offer expired on January
7, 1997 at which time Purchaser had acquired 6,582,250 Shares, representing
approximately 97.1% of the outstanding Shares. Pursuant to the terms of the
Merger Agreement, on January 15, 1997, the Purchaser was merged with and into
Milgray. The aggregate purchase price paid for the Shares in the Tender Offer
and the Merger was approximately $100 million.
In order (i) to finance the purchase of the Shares pursuant to the
Tender Offer and the Merger and to pay certain related fees and expenses
related to the Tender Offer and the Merger, (ii) to refinance certain existing
debt of the Registrant and, after consummation of the Merger, Milgray, and
(iii) for working capital and general corporate purposes of the Registrant and
its subsidiaries, the Registrant obtained a $250 million credit facility from
Union Bank of California, N.A. pursuant to a credit agreement (the "Credit
Agreement") dated as of January 7, 1997. The Credit Agreement provides for
credit facilities relating to the Tender Offer consisting of a tender loan of
up to $175 million, which was repaid on the effective date of the Merger, a $50
million term loan facility and a $200 million revolving credit facility which
will be available from time to time on and after the effective date of the
Merger.
The foregoing description of the Merger Agreement and Credit Agreement
is qualified in its entirety by reference to the underlying agreements, copies
of which are attached as Exhibits 2.1 and 10.1 to the Form 8-K filed on January
22, 1997.
This Form 8-K/A is an Amendment to the Form 8-K filed on January 22,
1997 for the purpose of including the pro forma combined financial information
of Bell and Milgray.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro forma financial information.
Attached on Exhibit (99.4) is unaudited pro forma financial
information for the Registrant and Milgray Electronics, Inc.
(c) Exhibit
(99.4) Unaudited pro forma financial information for the Registrant
and Milgray Electronics, Inc.
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 hereunto duly authorized.
BELL INDUSTRIES, INC.
Dated: March 24, 1997 By: /s/ TRACY A. EDWARDS
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Tracy A. Edwards
Vice President and
Chief Financial Officer
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Exhibit (99.4)
Page 1 of 3
BELL INDUSTRIES, INC.
Pro Forma Financial Information
(Unaudited)
The following unaudited pro forma financial information includes the effects of
the acquisition of Milgray Electronics, Inc. (Milgray) in a transaction to be
accounted for under the purchase method of accounting. Under the terms of the
acquisition, shareholders of Milgray received cash of $14.77 per share of
common stock for an aggregate purchase price of approximately $100 million.
Concurrent with the acquisition, Bell entered into a five-year $250 million
secured revolving credit facility with a syndicate of banks to finance the
purchase of Milgray, retire all existing debt of both companies and provide for
on-going working capital requirements.
Pro forma financial information has been prepared based on the historical
financial statements of Bell and Milgray. Bell has a December 31 year end while
Milgray had a September 30 fiscal year end before the acquisition. The Pro Forma
Combined Balance Sheet of Bell at December 31, 1996 reflects the acquisition of
Milgray on that date based upon the agreed purchase price. The Pro Forma
Combined Statement of Income combines the historical statement of income of Bell
for the year ended December 31, 1996 with the historical statement of income of
Milgray for the twelve months ended December 31, 1996. Milgray's financial
statements for the twelve month period were derived from Milgray's financial
statements for the nine months ended September 30, 1996 and its financial
statements for the three months ended December 31, 1996. These unaudited pro
forma financial statements should be read in conjunction with the historical
financial statements and the notes thereto.
The Pro Forma Combined Statement of Income presented herein may not be
indicative of the operating results that would have been achieved had the
acquisition of Milgray taken effect at the beginning of the periods presented,
and should not be construed as representative of future results of operations.
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Exhibit (99.4)
Page 2 of 3
BELL INDUSTRIES, INC.
Pro Forma Combined Balance Sheet
December 31, 1996
(In thousands)
(Unaudited)
The following unaudited Pro Forma Combined Balance Sheet has been prepared
to reflect the acquisition of Milgray Electronics, Inc. by Bell as of
December 31, 1996.
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Pro Forma Pro Forma
Bell Milgray Adjustments Combined
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ASSETS
Current assets:
Accounts receivable, net $ 83,155 $ 39,149 $ (1,000) (a) $121,304
Inventories 104,049 59,017 (6,842) (a) 156,224
Other current assets 17,917 3,671 5,782 (a) 27,370
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Total current assets 205,121 101,837 (2,060) 304,898
Properties, net 22,049 3,748 122 (a) 25,919
Goodwill and other assets 14,140 924 66,278 (b) 81,342
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$241,310 $106,509 $ 64,340 $412,159
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 43,839 $ 26,455 $ $ 70,294
Accrued liabilities 20,350 4,294 6,212 (a) 30,856
Current portion of
long-term liabilities 8,076 1,607 (c) 9,683
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Total current liabilities 72,265 30,749 7,819 110,833
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Long-term liabilities:
Long-term debt 24,571 28,432 102,954 (c) 155,957
Other long-term liabilities 6,013 327 568 (a) 6,908
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Total long-term liabilities 30,584 28,759 103,522 162,865
-------- -------- -------- --------
Shareholders' equity 138,461 47,001 (47,001) (d) 138,461
-------- -------- -------- --------
$241,310 $106,509 $ 64,340 $412,159
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Pro forma adjustments include:
(a) Estimated valuation adjustments resulting from the preliminary
allocation of purchase price, including provisions for facility
closures and employee separation costs.
(b) Excess of acquisition costs over the fair value of assets acquired of
approximately $63.6 million and deferred financing costs of $2.7
million.
(c) Borrowings under secured revolving credit facility to finance the
acquisition of Milgray.
(d) Elimination of Milgray's shareholders' equity.
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Exhibit (99.4)
Page 3 of 3
BELL INDUSTRIES, INC.
Pro Forma Combined Statement of Income
Year Ended December 31, 1996
(In thousands, except per share data)
(Unaudited)
The following unaudited Pro Forma Combined Statement of Income gives effect to
the acquisition of Milgray by Bell by combining the operating results of
Milgray for the twelve months ended December 31, 1996 with Bell's operating
results for the year ended December 31, 1996. The Pro Forma Combined Statement
of Income excludes the effect of integration charges associated with the
acquisition which the Company expects to record in the first quarter of 1997.
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Pro Forma Pro Forma
Bell Milgray Adjustments Combined
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Net sales $623,193 $272,121 $ $ 895,314
Costs and expenses:
Cost of products sold 485,634 211,862 697,496
Selling, general and
administrative expenses 106,425 45,232 3,103 (a) 154,760
Interest expense 3,673 2,512 6,310 (b) 12,495
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Income before income taxes 27,461 12,515 (9,413) 30,563
Income tax provision 11,534 4,930 (2,986)(c) 13,478
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Net income $ 15,927 $ 7,585 $ (6,427) $ 17,085
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Net income per share $ 2.10 $ 2.25
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Weighted average common
shares outstanding 7,591 7,591
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Pro forma adjustments include:
(a) Amortization of goodwill (over 25 years) and deferred financing costs
(over five years) arising on the acquisition.
(b) Adjustment of interest expense to reflect effects of assumed
borrowings for the period under the new credit facility.
(c) Adjustment to the tax provision related to adjustments (a) and (b).
