INDIANAPOLIS — Bell Industries, Inc. today reported financial results for its third quarter and nine months ended Sept. 30, 2009.
Revenues from continuing operations for the 2009 third quarter were $34.9 million, up 3.3 percent from $33.8 million a year ago, with a $1.9 million increase in revenues related to the company’s Bell Techlogix’s business partially offset by a $0.8 million decrease in revenues related to its recreational products group.
The company had income from continuing operations of $732,000, or $1.69 per basic share for the 2009 third quarter. This reflects a significant improvement over the prior-year third quarter loss from continuing operations of $169,000, or $0.39 per basic share. In the third quarter of 2008, the company also had income from discontinued operations of $0.2 million, or $0.46 per basic share, resulting in net income for the prior year third quarter of $31,000, or $0.07 per basic share.
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. On June 13, 2008, the company completed the sale of the remainder of the SkyTel business to Velocita Wireless, LLC (“Velocita”) for total consideration of $7.5 million. Subsequent to the closing, Velocita agreed to pay the company additional consideration in the form of a working capital adjustment in the amount of $1.5 million. 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 nine month periods ended Sept. 30, 2009 and 2008.
For the first nine months of 2009, revenues from continuing operations were $80.7 million, down 2.7 percent from $83.0 million a year ago, with a $4.2 million decrease in revenues related to the company’s recreational products group partially offset by a $1.9 million increase in revenues related to the company’s Bell Techlogix business. The company incurred a loss from continuing operations of $0.9 million, or $2.14 per share, for the year-to-date period.
This reflects an improvement over the loss from continuing operations of $2.3 million, or $5.26 per share, for the first nine months of 2008. In the first nine months of 2008, the company also had a loss from discontinued operations of $1.7 million, or $3.84 per share, resulting in a net loss for the first nine months of 2008 of $3.9 million, or $9.10 per share.
The Bell Techlogix business posted revenues of $24.7 million for the 2009 third quarter, compared with $22.8 million in the 2008 third quarter. This increase was due primarily to software sales into the K-12 and higher education markets and an increase in services revenue primarily related to a large project during the quarter and a contract termination fee. Operating income for the 2009 third quarter amounted to $1.3 million, increasing by approximately $0.9 million over the prior-year third quarter.
This increase was attributed to an increase of gross profit, primarily related to higher software revenues at a higher gross margin than the third quarter of 2008, a contract termination fee, and a decrease in selling, general and administrative (“SG&A”) expenses due primarily to the consolidation of certain overhead and support functions.
The company’s recreational products group reported revenues of $10.2 million for the 2009 third quarter, compared with $11.0 million in the 2008 third quarter. The company attributed the decrease in revenues primarily to lower sales in the marine and power sports (snowmobile, motorcycle and ATV) product lines resulting from a continued decline in consumer spending at dealers partially offset by a 4.4 percent increase in revenues in the recreational vehicle product line.
The operating income of $615,000 for the third quarter of 2009 represented a $274,000 increase from the operating income of $341,000 for the third quarter of 2008. Although revenues were down year-over year, there was a 52 basis point improvement in gross profit margins and SG&A expenses decreased from $2.7 million for the 2008 third quarter to $2.3 million for the 2009 third quarter due to reductions in headcount, freight and facility costs.
“We are pleased that for the second consecutive quarter both of our operating units generated operating income for the quarter on improved results versus the 2008 comparable quarter, and the fact that our consolidated results for the quarter generated net income,” said Kevin J. Thimjon, president and chief financial officer of Bell Industries. “We continue to look for opportunities to make investments in our business to drive profitable growth while we closely manage our costs.”
Bell’s corporate costs for the 2009 third quarter totaled $865,000, a decrease of $211,000 from the $1.1 million in costs for the 2008 third quarter. The decrease in costs was primarily related to reductions in headcount and the related benefits and travel costs and reductions in insurance and telecommunications costs.
About Bell Industries, Inc.
Bell Industries is comprised of two operating units, Bell Techlogix and the recreational products group. Bell Techlogix is a provider of integrated technology product and service solutions for organizations throughout the United States. 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.
SOURCE: Bell Industries press release