Bell Microproducts Reports First Quarter Financial Results

Apr 18, 2001, 01:00 ET from Bell Microproducts Inc.

    SAN JOSE, Calif., April 18 /PRNewswire/ -- Bell Microproducts Inc.
 (Nasdaq:   BELM) today announced its financial results for the first quarter
 ended March 31, 2001.
     Revenues for the first quarter were $535.5 million, up 46% from
 $366.3 million in the first quarter of 2000, and down 2% from $544.4 million
 in the fourth quarter of 2000.  Net income in the first quarter of 2001 was
 $126,000, compared with net income of $3.2 million in the first quarter of
 2000 and net income of $5.2 million in the fourth quarter of 2000.  First
 quarter 2001 diluted earnings per share were $0.01 on 17.4 million shares,
 compared with diluted earnings per share of $0.21 on 15.0 million shares in
 the first quarter of 2000 and diluted earnings per share of $0.30 on
 17.7 million shares in the fourth quarter of 2000.  Book value was $8.13 per
 primary share at the end of the quarter.
     "I am disappointed to report that our track record of improving sales and
 earnings over seven consecutive quarters, which culminated in a record fourth
 quarter of 2000, was interrupted during the first quarter of 2001," said Don
 Bell, Bell Microproducts' president and chief executive officer.  "First
 quarter 2001 financial results were impacted by the well-publicized slump in
 the technology markets," added Bell.
 
     Operating Trends
     "In our fourth quarter 2000 earnings press release in early February, we
 discussed the softening demand in the market for electronic components in
 North America," said Bell.  "The market has continued to weaken as demand for
 our North American customers has decreased, resulting in our customers being
 over-inventoried in some commodity products," added Bell.  "Latin American and
 European sales have not been impacted at this time and were up sequentially in
 the quarter," further said Bell.
     While first quarter sales were down only 2% from the fourth quarter of
 2000, profits were more heavily impacted.  This was due to a decline in gross
 profit margin, higher SG&A expenses, and higher interest charges.
     Gross profit margin was 8.5% in the first quarter of 2001, up from 8.0% in
 the first quarter of 2000 but down from 9.7% in the fourth quarter of 2000.
 This was primarily due to lower sales in the higher margin industrial OEM
 market in the U.S., and lower margins in the Americas for computer components
 such as disk drives.
     Expenses were essentially flat with the fourth quarter of 2000, but were
 up significantly from a year ago as a result of the acquisitions in 2000 of
 Ideal and Rorke, and the investment in strategic programs.  Expenses in the
 first quarter 2001 include the cost of opening sales offices in four European
 countries, as well as increased staffing at our new Corporate Technology
 Center located in Montgomery, Alabama.  "The new locations in Europe form the
 basis for a significantly increased revenue and profit opportunity," said
 Bell.  Commenting on the new Corporate Technology Center, Mr. Bell added,
 "Longer-term, we expect the Center to yield economies of scale that should
 result in productivity and cost benefits."  With the slowdown in sales during
 the quarter, selling, general & administrative expenses as a percentage of
 sales were 7.4% in the quarter, compared to 5.8% in the first quarter of 2000,
 and 7.3% in the fourth quarter of 2000.  As the scope of the downturn in the
 North American technology markets became apparent during the quarter, the
 Company took several cost containment measures in order to bring costs more in
 line with the reduced revenue levels.
     Interest expenses were higher compared to the fourth quarter of 2000 as a
 result of higher inventory levels earlier in the quarter.  Inventories have
 since been reduced significantly, from $247 million at December 31, 2000 to
 $217 million at March 31, 2001, which if maintained, should lead to lower
 interest expenses in the second quarter.  Inventory turns increased from
 8.0 in the fourth quarter of 2000 to 9.0 in the first quarter of 2001, and
 days sales outstanding increased slightly from 49 days to 50 days.  "We are
 pleased that we were able to reduce inventories during a time of excess
 inventories throughout our industry," said Bell.
 
     Business Outlook
     "We are optimistic with regard to our strategic initiatives, and we
 believe that our strengthened management team, our expanding line card, our
 increased geographic coverage, and our thrust in storage systems and solutions
 will serve us well in the future," commented Bell.  "At this time, it is
 difficult to make predictions for the balance of 2001.  Our customers are
 experiencing soft demand for their products, and most have excess inventories
 that are currently being worked off.  As we take actions to contain costs, and
 as our strategic initiatives begin yielding results, we expect to offset some
 the market pressures on our revenues and gross margins," added Bell.
     "We believe the secular strong growth in digital content should fuel
 renewed strong demand for storage and semiconductor.  We also believe that we
 will continue to outperform industry growth rates, although, obviously, no
 assurances can be given in this regard," concluded Bell.
 
     Conference Call on the Web.
     At 11:00 a.m. EDT Wednesday, April 18, 2001, a live Internet broadcast of
 the Company's fourth quarter earnings conference call will be available via
 the Company's web site at www.bellmicro.com or through this direct link
 http://www.bellmicro.com/Investor/information/Conference_Calls.htm.
 
     About Bell Microproducts
     Bell Microproducts is an international, value-added provider of a wide
 range of high-technology products, solutions, and services to the industrial
 and commercial markets.  The company's offering includes semiconductors,
 computer platforms, peripherals, and storage products of various types
 including desktop, high-end computer and storage subsystems, fibre channel
 connectivity products, RAID, NAS and SAN storage systems and back-up products.
 Bell Microproducts is an industry-recognized specialist in storage products
 and is one of the world's largest storage-centric value-added distributors.
     The company's products are available at any level of integration, from
 components to subsystem assemblies and fully-integrated, tested and certified
 system solutions.  The company adds value with a broad range of services
 including testing, software loading, kitting, mass storage system integration,
 and computer system integration.  Trained and certified technical personnel
 complete each of these processes at Bell Microproducts' ISO 9002 facilities.
 Bell Microproducts markets and distributes more than 150 brand name product
 lines, as well as its own BellStor storage and Trademark(R) computer brands,
 to original equipment manufacturers (OEMs), contract electronic manufacturing
 services (EMS) customers, value-added resellers (VARs) and system integrators
 in the Americas and Europe.  More information can be found in the company's
 SEC filings, or by visiting the Bell Microproducts Web site at
 www.bellmicro.com.
 
     Safe Harbor Statement.
     This release may contain forward-looking statements within the meaning of
 the Private Securities Litigation Reform Act of 1995.  Such forward-looking
 statements, which reflect the Company's current views of future events and
 financial performance, involve known and unknown risks and uncertainties which
 could cause actual results or facts to differ materially from such statements
 for a variety of reasons including, but not limited to:  the ability to
 successfully integrate the operations of recent acquisitions, industry
 conditions, changes in product supply, pricing, and customer demand,
 competition, other vagaries in the computer and electronic components markets,
 changes in relationships with key suppliers, foreign currency fluctuations and
 the other risks described from time to time in the Company's reports to the
 Securities and Exchange Commission (including the company's Annual Report on
 Form 10-K).  Investors should take such risks into account when making
 investment decisions.  Shareholders and other readers are cautioned not to
 place undue reliance on these forward-looking statements, which speak only as
 of the date on which they are made.  The company undertakes no obligation to
 update publicly or revise any forward-looking statements.
 
 
                            BELL MICROPRODUCTS INC.
                                 Balance Sheets
                                 (in thousands)
                                  (unaudited)
 
                                                  March 31, 2001Dec. 31, 2000
     ASSETS
       Current assets:
         Cash                                         $5,043          $7,465
         Accounts receivable, net                    299,654         295,572
         Inventories                                 216,756         246,671
         Prepaid expenses and other current assets    11,709          11,906
             Total current assets                    533,162         561,614
 
       Property and equipment, net                    44,641          44,436
       Goodwill and other intangibles                 45,946          46,439
       Other assets                                    8,583           8,718
             Total assets                           $632,332       $ 661,207
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
       Current Liabilities:
         Accounts payable                           $211,708       $ 231,132
         Borrowings under the line of credit          52,713          52,633
         Short-term note payable
          and current portion of
          long-term notes payable                     89,046          90,500
         Other accrued liabilities                    44,299          50,539
 
             Total current liabilities               397,766         424,804
 
       Borrowings under the line of credit               320             249
       Long-term notes payable                        99,798         101,640
       Other long-term liabilities                     5,635           4,982
 
             Total liabilities                       503,519         531,675
 
 
       Shareholders' equity:
         Common Stock                                 75,661          75,154
         Retained earnings                            54,598          54,472
         Cumulative translation adjustment            (1,446)            (94)
         Total shareholders' equity                  128,813         129,532
 
             Total liabilities
              and shareholders' equity              $632,332       $ 661,207
 
 
                            BELL MICROPRODUCTS INC.
                              Statements of Income
                     (in thousands, except per share data)
                                  (unaudited)
 
                                                  Three months ended March 31,
                                                       2001            2000
 
     Net sales                                      $535,523        $366,270
     Cost of sales                                   490,101         337,012
     Gross profit                                     45,422          29,258
 
     Selling, general and administrative expenses     39,626          21,355
     Income from operations                            5,796           7,903
     Interest expense                                 (5,579)         (2,369)
     Income before income taxes                          217           5,534
     Provision for income taxes                           91           2,324
     Net income                                         $126          $3,210
 
     Earnings per share
       Basic                                           $0.01           $0.23
       Diluted                                         $0.01           $0.21
 
     Shares used in per share calculation
       Basic                                          15,842          13,964
       Diluted                                        17,417          14,981
 
 

SOURCE Bell Microproducts Inc.
    SAN JOSE, Calif., April 18 /PRNewswire/ -- Bell Microproducts Inc.
 (Nasdaq:   BELM) today announced its financial results for the first quarter
 ended March 31, 2001.
     Revenues for the first quarter were $535.5 million, up 46% from
 $366.3 million in the first quarter of 2000, and down 2% from $544.4 million
 in the fourth quarter of 2000.  Net income in the first quarter of 2001 was
 $126,000, compared with net income of $3.2 million in the first quarter of
 2000 and net income of $5.2 million in the fourth quarter of 2000.  First
 quarter 2001 diluted earnings per share were $0.01 on 17.4 million shares,
 compared with diluted earnings per share of $0.21 on 15.0 million shares in
 the first quarter of 2000 and diluted earnings per share of $0.30 on
 17.7 million shares in the fourth quarter of 2000.  Book value was $8.13 per
 primary share at the end of the quarter.
     "I am disappointed to report that our track record of improving sales and
 earnings over seven consecutive quarters, which culminated in a record fourth
 quarter of 2000, was interrupted during the first quarter of 2001," said Don
 Bell, Bell Microproducts' president and chief executive officer.  "First
 quarter 2001 financial results were impacted by the well-publicized slump in
 the technology markets," added Bell.
 
     Operating Trends
     "In our fourth quarter 2000 earnings press release in early February, we
 discussed the softening demand in the market for electronic components in
 North America," said Bell.  "The market has continued to weaken as demand for
 our North American customers has decreased, resulting in our customers being
 over-inventoried in some commodity products," added Bell.  "Latin American and
 European sales have not been impacted at this time and were up sequentially in
 the quarter," further said Bell.
     While first quarter sales were down only 2% from the fourth quarter of
 2000, profits were more heavily impacted.  This was due to a decline in gross
 profit margin, higher SG&A expenses, and higher interest charges.
     Gross profit margin was 8.5% in the first quarter of 2001, up from 8.0% in
 the first quarter of 2000 but down from 9.7% in the fourth quarter of 2000.
 This was primarily due to lower sales in the higher margin industrial OEM
 market in the U.S., and lower margins in the Americas for computer components
 such as disk drives.
     Expenses were essentially flat with the fourth quarter of 2000, but were
 up significantly from a year ago as a result of the acquisitions in 2000 of
 Ideal and Rorke, and the investment in strategic programs.  Expenses in the
 first quarter 2001 include the cost of opening sales offices in four European
 countries, as well as increased staffing at our new Corporate Technology
 Center located in Montgomery, Alabama.  "The new locations in Europe form the
 basis for a significantly increased revenue and profit opportunity," said
 Bell.  Commenting on the new Corporate Technology Center, Mr. Bell added,
 "Longer-term, we expect the Center to yield economies of scale that should
 result in productivity and cost benefits."  With the slowdown in sales during
 the quarter, selling, general & administrative expenses as a percentage of
 sales were 7.4% in the quarter, compared to 5.8% in the first quarter of 2000,
 and 7.3% in the fourth quarter of 2000.  As the scope of the downturn in the
 North American technology markets became apparent during the quarter, the
 Company took several cost containment measures in order to bring costs more in
 line with the reduced revenue levels.
     Interest expenses were higher compared to the fourth quarter of 2000 as a
 result of higher inventory levels earlier in the quarter.  Inventories have
 since been reduced significantly, from $247 million at December 31, 2000 to
 $217 million at March 31, 2001, which if maintained, should lead to lower
 interest expenses in the second quarter.  Inventory turns increased from
 8.0 in the fourth quarter of 2000 to 9.0 in the first quarter of 2001, and
 days sales outstanding increased slightly from 49 days to 50 days.  "We are
 pleased that we were able to reduce inventories during a time of excess
 inventories throughout our industry," said Bell.
 
     Business Outlook
     "We are optimistic with regard to our strategic initiatives, and we
 believe that our strengthened management team, our expanding line card, our
 increased geographic coverage, and our thrust in storage systems and solutions
 will serve us well in the future," commented Bell.  "At this time, it is
 difficult to make predictions for the balance of 2001.  Our customers are
 experiencing soft demand for their products, and most have excess inventories
 that are currently being worked off.  As we take actions to contain costs, and
 as our strategic initiatives begin yielding results, we expect to offset some
 the market pressures on our revenues and gross margins," added Bell.
     "We believe the secular strong growth in digital content should fuel
 renewed strong demand for storage and semiconductor.  We also believe that we
 will continue to outperform industry growth rates, although, obviously, no
 assurances can be given in this regard," concluded Bell.
 
     Conference Call on the Web.
     At 11:00 a.m. EDT Wednesday, April 18, 2001, a live Internet broadcast of
 the Company's fourth quarter earnings conference call will be available via
 the Company's web site at www.bellmicro.com or through this direct link
 http://www.bellmicro.com/Investor/information/Conference_Calls.htm.
 
     About Bell Microproducts
     Bell Microproducts is an international, value-added provider of a wide
 range of high-technology products, solutions, and services to the industrial
 and commercial markets.  The company's offering includes semiconductors,
 computer platforms, peripherals, and storage products of various types
 including desktop, high-end computer and storage subsystems, fibre channel
 connectivity products, RAID, NAS and SAN storage systems and back-up products.
 Bell Microproducts is an industry-recognized specialist in storage products
 and is one of the world's largest storage-centric value-added distributors.
     The company's products are available at any level of integration, from
 components to subsystem assemblies and fully-integrated, tested and certified
 system solutions.  The company adds value with a broad range of services
 including testing, software loading, kitting, mass storage system integration,
 and computer system integration.  Trained and certified technical personnel
 complete each of these processes at Bell Microproducts' ISO 9002 facilities.
 Bell Microproducts markets and distributes more than 150 brand name product
 lines, as well as its own BellStor storage and Trademark(R) computer brands,
 to original equipment manufacturers (OEMs), contract electronic manufacturing
 services (EMS) customers, value-added resellers (VARs) and system integrators
 in the Americas and Europe.  More information can be found in the company's
 SEC filings, or by visiting the Bell Microproducts Web site at
 www.bellmicro.com.
 
     Safe Harbor Statement.
     This release may contain forward-looking statements within the meaning of
 the Private Securities Litigation Reform Act of 1995.  Such forward-looking
 statements, which reflect the Company's current views of future events and
 financial performance, involve known and unknown risks and uncertainties which
 could cause actual results or facts to differ materially from such statements
 for a variety of reasons including, but not limited to:  the ability to
 successfully integrate the operations of recent acquisitions, industry
 conditions, changes in product supply, pricing, and customer demand,
 competition, other vagaries in the computer and electronic components markets,
 changes in relationships with key suppliers, foreign currency fluctuations and
 the other risks described from time to time in the Company's reports to the
 Securities and Exchange Commission (including the company's Annual Report on
 Form 10-K).  Investors should take such risks into account when making
 investment decisions.  Shareholders and other readers are cautioned not to
 place undue reliance on these forward-looking statements, which speak only as
 of the date on which they are made.  The company undertakes no obligation to
 update publicly or revise any forward-looking statements.
 
 
                            BELL MICROPRODUCTS INC.
                                 Balance Sheets
                                 (in thousands)
                                  (unaudited)
 
                                                  March 31, 2001Dec. 31, 2000
     ASSETS
       Current assets:
         Cash                                         $5,043          $7,465
         Accounts receivable, net                    299,654         295,572
         Inventories                                 216,756         246,671
         Prepaid expenses and other current assets    11,709          11,906
             Total current assets                    533,162         561,614
 
       Property and equipment, net                    44,641          44,436
       Goodwill and other intangibles                 45,946          46,439
       Other assets                                    8,583           8,718
             Total assets                           $632,332       $ 661,207
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
       Current Liabilities:
         Accounts payable                           $211,708       $ 231,132
         Borrowings under the line of credit          52,713          52,633
         Short-term note payable
          and current portion of
          long-term notes payable                     89,046          90,500
         Other accrued liabilities                    44,299          50,539
 
             Total current liabilities               397,766         424,804
 
       Borrowings under the line of credit               320             249
       Long-term notes payable                        99,798         101,640
       Other long-term liabilities                     5,635           4,982
 
             Total liabilities                       503,519         531,675
 
 
       Shareholders' equity:
         Common Stock                                 75,661          75,154
         Retained earnings                            54,598          54,472
         Cumulative translation adjustment            (1,446)            (94)
         Total shareholders' equity                  128,813         129,532
 
             Total liabilities
              and shareholders' equity              $632,332       $ 661,207
 
 
                            BELL MICROPRODUCTS INC.
                              Statements of Income
                     (in thousands, except per share data)
                                  (unaudited)
 
                                                  Three months ended March 31,
                                                       2001            2000
 
     Net sales                                      $535,523        $366,270
     Cost of sales                                   490,101         337,012
     Gross profit                                     45,422          29,258
 
     Selling, general and administrative expenses     39,626          21,355
     Income from operations                            5,796           7,903
     Interest expense                                 (5,579)         (2,369)
     Income before income taxes                          217           5,534
     Provision for income taxes                           91           2,324
     Net income                                         $126          $3,210
 
     Earnings per share
       Basic                                           $0.01           $0.23
       Diluted                                         $0.01           $0.21
 
     Shares used in per share calculation
       Basic                                          15,842          13,964
       Diluted                                        17,417          14,981
 
 SOURCE  Bell Microproducts Inc.