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Previous: PILGRIM AMERICA MASTERS SERIES INC, 24F-2NT, 1998-09-28 |
Next: EQUITABLE REAL ESTATE HYPERION MORTGAGE OPPORTUNITY FUND INC, NSAR-B, 1998-09-28 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 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): September 14, 1998
BELL INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
California 1-11471 95-2039211
- ------------------------ ------------------------ ------------------------
(State of incorporation) (Commission File Number) (IRS Identification No.)
2201 E. El Segundo Boulevard El Segundo, CA 90245
- ------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 563-2355.
----------------
N/A
- --------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On July 16, 1998, Bell Industries, Inc., a California corporation
("Bell" or the "Registrant") agreed to sell its Graphics Imaging Group
("Graphics") to PrimeSource Corporation, a New Jersey based distributor and
systems integrator serving the printing, publishing and graphic arts industries.
On September 14, 1998, the sale of Graphics was completed. The net purchase
price is approximately $40 million, subject to post closing adjustments.
Approximately $22 million was received in cash, with the balance of the purchase
price payable over 90 days. The proceeds from the sale will be used to reduce
bank borrowings.
The sale of Graphics was structured as a sale of substantially all the
assets of the Graphics operations. The purchase price was determined based on
negotiations between the parties.
<PAGE> 3
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro forma financial information.
Attached on Exhibit (99.1) is unaudited pro forma financial information
for the Registrant.
(c) Exhibits
(2.1) Asset Purchase Agreement dated August 28, 1998 between Bell
Industries, Inc. and PrimeSource Corporation. (The exhibits and
schedules to such agreement, as described therein, have been
omitted in accordance with Item 601(b)(2) of Regulation S-K. A
copy of such exhibits and schedules shall be furnished
supplementally to the Securities and Exchange Commission upon
request).
(99.1) Unaudited pro forma financial information for the Registrant.
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: By: /s/ TRACY A. EDWARDS
-------------------------------
Tracy A. Edwards
Executive Vice President
and Chief Financial Officer
<PAGE> 1
Exhibit (99.1)
Page 1 of 8
BELL INDUSTRIES, INC.
Pro Forma Financial Information
(Unaudited)
The following unaudited pro forma financial information reflects the sale of
substantially all of the assets of Graphics as of the beginning of each of the
periods presented for statement of income purposes and as of June 30, 1998 for
balance sheet purposes. The pro forma information assumes net cash proceeds of
$40 million from the sale. In accordance with the terms of the sale, the
purchase price, less an estimate of the net book value of certain receivables,
is payable in cash on the closing date. The balance is payable within 90 days of
the closing date. The net cash proceeds will be used to reduce outstanding
borrowings as required under Bell's credit facility. The unaudited pro forma
financial information should be read in conjunction with the historical
consolidated financial statements, including the notes thereto, as included in
the Bell Industries, Inc., Annual Report on Form 10-K for the year ended
December 31, 1997.
The pro forma information is presented for illustration purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred if the sale of Graphics had been consummated in accordance with
the assumptions described, nor is it indicative of future operating results or
financial position of Bell.
<PAGE> 2
Exhibit (99.1)
Page 2 of 8
BELL INDUSTRIES, INC.
Pro Forma Combined Balance Sheet
June 30, 1998
(In thousands)
(Unaudited)
The following unaudited Pro Forma Balance Sheet has been prepared to reflect the
sale of Graphics by Bell assuming the sale had been completed on June 30, 1998.
<TABLE>
<CAPTION>
Pro Forma
Historical Graphics(a) Adjustments Pro Forma
-------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,629 $ 10,629
Accounts receivable 115,072 $ (21,870) 93,202
Receivable from
sale of Graphics $ 18,000 (b) 18,000
Inventories 157,111 (19,747) 137,364
Prepaid expenses and other 9,015 (100) 8,915
-------------- ------------ --------------
Total current assets 291,827 (41,717) 268,110
-------------- ------------ --------------
Properties, net 44,374 (4,102) 40,272
Goodwill 71,248 (2,960) 68,288
Other assets 8,542 (153) 8,389
-------------- ------------ --------------
$ 415,991 $ (48,932) $ 385,059
============== ============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 71,302 $ (10,454) $ 60,848
Accrued liabilities and payroll 24,073 (l,595) 1,325 (b) 23,803
Current portion of long-term
liabilities 8,750 8,750
-------------- ------------ --------------
Total current liabilities 104,125 (12,049) 93,401
-------------- ------------ --------------
Long-term debt 147,418 (22,000)(b) 125,418
Deferred compensation and other 7,937 7,937
Shareholders' equity:
Common stock 101,217 101,217
Investment in Graphics (36,883) 36,883 (c)
Reinvested earnings 55,294 1,792 (b) 57,086
-------------- ------------- --------------
Total shareholders' equity 156,511 (36,883) 158,303
Commitments and contingencies
-------------- ------------- --------------
$ 415,991 $ (48,932) $ 385,059
============== ============= =============
</TABLE>
See accompanying Notes to Pro Forma Financial Statements.
<PAGE> 3
Exhibit (99.1)
Page 3 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Six Months Ended June 30, 1998
(In thousands, except per share data)
(Unaudited)
The following unaudited presentation reflects pro forma results of Bell assuming
the sale of Graphics had been completed on January 1, 1998. The presentation
reflects pro forma results from continuing operations and does not reflect the
anticipated gain on the sale of Graphics.
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 423,751 $ (71,474) $ 352,277
-------------- ------------- --------------
Costs and expenses:
Cost of products sold 338,058 (59,842) 278,216
Selling and administrative 65,491 (8,487) 57,004
Depreciation and amortization 5,345 (491) 4,854
Interest expense 6,675 $ (1,225)(d) 5,450
-------------- ------------- --------------
415,569 (68,820) 345,524
-------------- ------------- --------------
Income from continuing operations
before income taxes 8,182 (2,654) 6,753
Income tax provision 3,830 (1,242) 573 (e) 3,161
-------------- ------------- --------------
Income from continuing operations $ 4,352 $ (1,412) $ 3,592
============== ============= ==============
Share and per share data:
Income from continuing operations:
Basic $ 0.47 $ 0.38
============== ==============
Diluted $ 0.46 $ 0.38
============== ==============
Weighted average shares outstanding:
Basic 9,357 9,357
============== ==============
Diluted 9,460 9,460
============== ==============
</TABLE>
See accompanying Notes to Pro Forma Financial Statements.
<PAGE> 4
Exhibit (99.1)
Page 4 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Six Months Ended June 30, 1997
(In thousands, except per share data)
(Unaudited)
The following unaudited presentation reflects pro forma results of Bell assuming
the sale of Graphics had been completed on January 1, 1997. The presentation
reflects pro forma results from continuing operations and does not reflect the
anticipated gain on the sale of Graphics.
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 452,282 $ (78,494) $ 373,788
-------------- ------------- --------------
Costs and expenses:
Cost of products sold 355,607 (65,819) 289,788
Selling and administrative 73,747 (10,031) 63,716
Depreciation and amortization 5,160 (400) 4,760
Interest expense 5,589 $ (1,280) (d) 4,309
Integration charge 4,100 4,100
-------------- ------------- --------------
444,203 (76,250) 366,673
-------------- ------------- --------------
Income from continuing operations
before income taxes 8,079 (2,244) 7,115
Income tax provision 3,781 (1,050) 599 (e) 3,330
-------------- ------------- --------------
Income from continuing operations $ 4,298 $ (1,194) $ 3,785
============== ============= ==============
Share and per share data:
Income from continuing operations:
Basic $ 0.47 $ 0.42
============== ==============
Diluted $ 0.46 $ 0.40
============== ==============
Weighted average shares outstanding:
Basic 9,091 9,091
============== ==============
Diluted 9,355 9,355
============== ==============
</TABLE>
See accompanying Notes to Pro Forma Financial Statements.
<PAGE> 5
Exhibit (99.1)
Page 5 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Year Ended December 31, 1997
(In thousands, except per share data)
(Unaudited)
The following unaudited presentation reflects pro forma results of Bell assuming
the sale of Graphics had been completed on January 1, 1997. This presentation
reflects pro forma results from continuing operations and does not reflect the
anticipated gain on the sale of Graphics.
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 890,737 $ (156,288) $ 734,449
-------------- ------------- --------------
Costs and expenses:
Cost of products sold 703,068 (131,724) 571,344
Selling and administrative 142,494 (19,336) 123,158
Depreciation and amortization 10,000 (804) 9,196
Interest expense 12,309 $ (2,560) (d) 9,749
Integration charge 4,100 4,100
-------------- ------------- --------------
871,971 (151,864) 717,547
-------------- ------------- --------------
Income from continuing operations
before income taxes 18,766 (4,424) 16,902
Income tax provision 8,685 (2,047) 1,185 (e) 7,823
-------------- ------------- --------------
Income from continuing operations $ 10,081 $ (2,377) $ 9,079
============== ============= ==============
Share and per share data:
Income from continuing operations:
Basic $ 1.10 $ 0.99
============== ===============
Diluted $ 1.07 $ 0.96
============== ===============
Weighted average shares outstanding:
Basic 9,157 9,157
============== ===============
Diluted 9,430 9,430
============== ===============
</TABLE>
See accompanying Notes to Pro Forma Financial Statements.
<PAGE> 6
Exhibit (99.1)
Page 6 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Year Ended December 31, 1996
(In thousands, except per share data)
(Unaudited)
The following unaudited presentation reflects pro forma results of Bell assuming
the sale of Graphics had been completed on January 1, 1996. This presentation
reflects pro forma results from continuing operations and does not reflect the
anticipated gain on the sale of Graphics.
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 623,193 $ (117,131) $ 506,062
-------------- ------------- --------------
Costs and expenses:
Cost of products sold 485,634 (97,758) 387,876
Selling and administrative 100,197 (15,273) 84,924
Depreciation and amortization 6,228 (492) 5,736
Interest expense 3,673 $ (3,281) (d) 392
-------------- ------------- --------------
595,732 (113,523) 478,928
-------------- ------------- --------------
Income from continuing operations
before income taxes 27,461 (3,608) 27,134
Income tax provision 11,534 (1,515) 1,378 (e) 11,397
-------------- ------------- --------------
Income from continuing operations $ 15,927 $ (2,093) $ 15,737
============== ============= ==============
Share and per share data:
Income from continuing operations:
Basic $ 1.80 $ 1.78
============== ==============
Diluted $ 1.75 $ 1.73
============== ==============
Weighted average shares outstanding:
Basic 8,852 8,852
============== ==============
Diluted 9,109 9,109
============== ==============
</TABLE>
See accompanying Notes to Pro Forma Financial Statements.
<PAGE> 7
Exhibit (99.1)
Page 7 of 8
BELL INDUSTRIES, INC.
Pro Forma Statement of Income
Year Ended December 31, 1995
(In thousands, except per share data)
(Unaudited)
The following unaudited presentation reflects pro forma results of Bell assuming
the sale of Graphics had been completed on January 1, 1995. This presentation
reflects pro forma results from continuing operations and does not reflect the
anticipated gain on the sale of Graphics.
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Historical Graphics(a) Adjustments Results
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 564,325 $ (73,359) $ 490,966
-------------- ------------- --------------
Costs and expenses:
Cost of products sold 436,568 (61,400) 375,168
Selling and administrative 92,643 (9,980) 82,663
Depreciation and amortization 5,940 (185) 5,755
Interest expense 3,612 $ (3,590) (d) 22
Lease commitment provision 2,800 2,800
Gain on sale of division (3,050) (3,050)
-------------- ------------- --------------
538,513 (71,565) 463,358
-------------- ------------- --------------
Income from continuing operations
before income taxes 25,812 (1,794) 27,608
Income tax provision 10,841 (753) 1,508 (e) 11,596
-------------- ------------- --------------
Income from continuing operations $ 14,971 $ (1,041) $ 16,012
============== ============= ==============
Share and per share data:
Income from continuing operations:
Basic $ 1.74 $ 1.86
============== ==============
Diluted $ 1.67 $ 1.79
============== ==============
Weighted average shares outstanding:
Basic 8,626 8,626
============== ==============
Diluted 8,940 8,940
============== ==============
</TABLE>
See accompanying Notes to Pro Forma Financial Statements.
<PAGE> 8
Exhibit (99.1)
Page 8 of 8
BELL INDUSTRIES, INC.
NOTES TO PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
(a) Represents the elimination of the historical accounts of Graphics for
each of the periods presented.
(b) Represents the receipt of $22 million of estimated net cash proceeds at
June 30, 1998 and an $18 million receivable to be received over a 90 day
period after closing. Additionally, reflects a gain on the sale of
Graphics, net of estimated selling costs and taxes. The final purchase
price is subject to post closing adjustments.
(c) Eliminates the investment in Graphics.
(d) Represents the reduction in consolidated interest expense at Bell's
average cost of borrowing for the period assuming the estimated net cash
proceeds are utilized, as required, to reduce outstanding borrowings.
The remaining $18 million of proceeds to be received subsequent to
closing are assumed to be received ratably over the 90 day period.
(e) Adjusts income tax expense for the effect of the pro forma adjustments
based on the effective tax rate for the period presented.
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