Bell Microproducts Announces Financial Results for the First and Second Quarters of 2009 and Files All Past Due SEC Reports
SAN JOSE, Calif., Sep 15, 2009 (GlobeNewswire via COMTEX) -- By Staff
Company: Bell Microproducts, Inc. (BELM)
Bell Microproducts Inc. (Pink Sheets:BELM), one of the world's largest value-added distributors of storage and computing technology, today announced its financial results for the three months ended March 31, 2009 and the three and six months ended June 30, 2009, and that it has filed its Forms 10-Q for the periods then ended with the Securities and Exchange Commission (SEC) in accordance with its previously announced schedule. As further detailed below, the Company will host a conference call for analysts and investors at 8:00 a.m. Pacific Time Wednesday, September 16, 2009, to discuss the Company's financial results for the first half of 2009. To listen to the conference call via telephone, dial 888-561-1721 (U.S. toll-free) or 480-629-9868 (International) and ask for the Bell Microproducts Conference Call.
The Company's delay in filing its Quarterly Reports on Form 10-Q for the first and second quarters of 2009 was due to the restatement of its consolidated financial statements for 2005, 2004 and prior years, which were filed with the SEC in December 2008, and the work required in 2009 to prepare its consolidated financial statements for subsequent periods.
Key first and second quarter 2009 financial highlights:
* Net sales stabilized in 2009; down 7% sequentially in the
first quarter and 2% sequentially in the second quarter;
* Year-to-date net sales through June 30, 2009 were down 26%
from 2008 and year-to-date selling, general and administrative
expenses through June 30, 2009 were down 26% from 2008, both
due in part to strengthening of the US dollar vs. certain
foreign currencies;
* Net losses of $3.0 million in Q2 2009 and $4.0 million in
Q1 2009 were recorded primarily due to high professional
fees and debt discount amortization recorded upon the
adoption of FSP APB 14-1;
* Non-GAAP net income of $0.5 million and $3.4 million were
recorded in Q2 2009 and Q1 2009, respectively; and
* The Company generated cash from operations of $85 million
and reduced total debt by 18% to $315 million in the first
half of 2009.
Net sales for the three months ended June 30, 2009, were $704 million, a decrease of 2% from the prior quarter and 25% from the second quarter of 2008. Year-to-date net sales through June 2009 were $1.4 billion, down 26% from the comparable period of the prior year. The Company generated a net loss for the three months ended June 30, 2009 of $3.0 million, or $0.10 per share, compared to a net loss of $4.0 million, or $0.13 per share, in the three months ended March 31, 2009, and a net loss of $8.8 million, or $0.27 per share, in the second quarter of 2008. The year-to-date net loss was $7.1 million, or $0.22 per share, in the first six months of 2009 as compared to $20.7 million, or $0.64 per share, in the comparable period of 2008.
On a non-GAAP basis, the Company generated net income of $0.5 million, or $0.01 per diluted share, for the three months ended June 30, 2009, as compared to non-GAAP net income of $3.4 million, or $0.11 per diluted share, for the three months ended March 31, 2009, and non-GAAP net income of $3.6 million, or $0.11 per diluted share, for the three months ended June 30, 2008. Year-to-date non-GAAP net income through June 2009 was $3.9 million, or $0.12 per diluted share, as compared to non-GAAP net income of $5.1 million, or $0.16 per diluted share, for the comparable period of 2008. Non-GAAP results reflect the exclusion of the following non-cash and other charges from the Company's reported GAAP results:
* Professional fees for audit, legal, tax and outside
accounting advisor services considered to be in excess of
estimated spending due to the impact of internal control
weaknesses and external accounting and regulatory
investigations;
* Settlements of certain trade credits received from customers
(recorded as an increase in net sales) and vendors (recorded
as a reduction of cost of goods sold), primarily identified
during the restatement process;
* Amounts recorded under agreements with the former shareholders
of ProSys Information Systems ("ProSys"), under which the
Company has granted those shareholders rights to put certain
shares to the Company and rights to receive cash from the
Company upon open market sales under certain conditions;
* Non-cash charges in connection with the amortization of
certain intangible assets, stock options and restricted
stock units granted under stock-based compensation plans
and the amortization of the debt discount recorded upon the
retrospective adoption of Financial Accounting Standards
Board ("FASB") Staff Position ("FSP") No. APB 14-1,
Accounting for Convertible Debt Instruments That May Be
Settled in Cash Upon Conversion (Including Partial Cash
Settlement);
* Restructuring costs incurred in connection with workforce
reductions, the consolidation of excess facilities and the
impairment of leasehold improvements and other equipment
associated with abandoned facilities; and
* The income tax effects of non-GAAP items and the elimination
of the impact of valuation allowances.
"We are pleased to announce that we are now current in filing all of our SEC reports," said W. Donald Bell, President and CEO. "I would like to thank the Bell Micro team members in all areas of the Company for their dedication and tireless efforts which led to the completion of this process. We also appreciate the support of all of our Bell Micro customers, shareholders and suppliers throughout this process. The Company can now move forward with a renewed management focus on serving our customers and executing our business plans."
Balance Sheet
The Company's key balance sheet metrics as of June 30, 2009, as compared to December 31, 2008, are as follows:
* Total debt declined 18% to $315 million, while cash increased
17% to $27 million;
* Working capital (defined as current assets less current
liabilities) increased 10% to $129 million, and the cash
conversion cycle declined from 46 days to 41 days;
* Accounts receivable declined 7% to $405 million and days
sales outstanding increased from 52 days to 53 days; and
* Inventory declined 6% to $217 million, and days of inventory
on hand increased from 31 days to 32 days.
A conference call is scheduled for Wednesday, September 16, 2009, at 8:00 a.m. Pacific Time. To listen to the conference call via telephone, dial 888-561-1721 (U.S. toll-free) or 480-629-9868 (International) and ask for the Bell Microproducts Conference Call. Participants should dial in at least 10 minutes prior to the start of the call. The Company will also broadcast the conference call via a webcast over the internet. To listen to the webcast, please visit the investors section of the Bell Micro website at www.bellmicro.com.
About Bell Microproducts Inc.
Bell Microproducts (Pink Sheets:BELM) is an international, value-added distributor of a wide range of high-tech products, solutions and services, including storage systems, servers, software, computer components, and peripherals, as well as maintenance and professional services. An industry-recognized specialist in storage products, the Company is one of the world's largest storage-centric value-added distributors.
Bell Microproducts is uniquely qualified with deep technical and application expertise to service a broad range of information technology needs. From design to deployment, its products are available at any level of integration, from components to subsystem assemblies and fully-integrated, tested and certified system solutions. More information can be found in the Company's SEC filings, or by visiting the Bell Microproducts website at http://www.bellmicro.com.
The Bell Microproducts Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5738
Safe Harbor Statement
Some of the statements included in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and our industry in general. Statements that include the words "expect," "intend," "plan," "believe," "anticipate," "estimate" and similar statements of a future or forward-looking nature identify forward-looking statements.
Forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the following: our ability to comply with the financial covenants in our credit agreements; our ability to achieve cost reductions and other benefits in connection with our strategic initiatives; the circumstances resulting in the restatement of our historical financial statements and the material weaknesses in our internal control over financial reporting and in our disclosure controls and procedures; our ability to remain current in our SEC filings; our ability to regain a listing on a national securities exchange; loss or adverse effect on our supplier relationships; our ability to accurately forecast customer demand and order sufficient product quantities; competition in the markets in which we operate; the products we sell may not satisfy shifting customer demand; our reliance on third parties to manufacture the products we sell; our reliance on credit provided by our manufacturers to finance our inventory purchases; risks related to our substantial indebtedness, including the inability to obtain additional financing for our operations on terms acceptable to us or at all; limitations on our operating and strategic flexibility under the terms of our debt agreements; our ability to attract and retain qualified personnel; risks associated with doing business abroad, including foreign currency risks; our inability to identify, acquire and integrate acquired businesses; the outcome of any pending or future litigation or regulatory proceedings, including the pending French tax proceeding, the current shareholder lawsuit and any claims or litigation related to the restatement of our consolidated financial statements; the effects of a prolonged economic downturn; and our ability to reduce professional fees for audit, legal, tax and outside accounting advisor services.
For a more detailed discussion of how these and other risks and uncertainties could cause our actual results to differ materially from those indicated in our forward-looking statements, see our reports filed with SEC (available at www.sec.gov), including our Annual Report on Form 10-K for the year ended December 31, 2008.
This news release was distributed by GlobeNewswire, www.globenewswire.com.
BELL MICROPRODUCTS INC.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
Jun. 30, Dec. 31,
2009 2008(1)
----------- -----------
ASSETS
Current assets:
Cash $ 26,731 $ 22,775
Accounts receivable, net 404,858 435,569
Inventories 217,506 230,652
Prepaid expenses and other current
assets 26,736 19,191
----------- -----------
Total current assets 675,831 708,187
Property and equipment, net 17,882 19,042
Goodwill and other intangibles 28,369 28,526
Other long-term assets 21,615 26,371
----------- -----------
Total assets $ 743,697 $ 782,126
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and cash overdraft $ 297,009 $ 274,745
Borrowings under lines of credit and
current portion of long-term debt 154,917 221,691
Other accrued liabilities 94,847 94,658
----------- -----------
Total current liabilities 546,773 591,094
Long-term debt, net of current portion 160,163 161,063
Other long-term liabilities 22,605 24,269
----------- -----------
Total liabilities 729,541 776,426
Shareholders' equity 14,156 5,700
----------- -----------
Total liabilities and shareholders'
equity $ 743,697 $ 782,126
=========== ===========
(1) Adjusted for the retrospective adoption of Financial Accounting
Standards Board ("FASB") Staff Position ("FSP") No APB 14-1,
Accounting for Convertible Debt Instruments That May Be Settled in
Cash Upon Conversion (Including Partial Cash Settlement).
BELL MICROPRODUCTS INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
------------------------------ ------------------------
Jun. 30, Mar. 31, Jun. 30, Jun. 30, Jun. 30,
2009 2009(1) 2008(1) 2009 2008(1)
-------- -------- -------- ---------- ----------
Net
sales $703,728 $715,316 $936,601 $1,419,044 $1,929,963
Cost of
sales 629,664 643,464 849,826 1,273,128 1,755,779
-------- -------- -------- ---------- ----------
Gross
profit 74,064 71,852 86,775 145,916 174,184
Selling,
general
and
administra-
tive
expense 55,306 57,331 73,160 112,637 152,293
Professional
fees 10,452 8,574 12,237 19,026 22,490
Restructuring
costs 911 1,188 72 2,099 2,281
-------- -------- -------- ---------- ----------
Total
operating
expenses 66,669 67,093 85,469 133,762 177,064
-------- -------- -------- ---------- ----------
Operating
income
(loss) 7,395 4,759 1,306 12,154 (2,880)
Interest
and other
expense,
net 8,352 6,128 8,759 14,480 16,230
-------- -------- -------- ---------- ----------
Loss
before
income
taxes (957) (1,369) (7,453) (2,326) (19,110)
Provision
for
income
taxes 2,091 2,674 1,375 4,765 1,621
-------- -------- -------- ---------- ----------
Net loss $ (3,048) $ (4,043) $ (8,828) $ (7,091) $ (20,731)
======== ======== ======== ========== ==========
Loss per share:
Basic $ (0.10) $ (0.13) $ (0.27) $ (0.22) $ (0.64)
Diluted $ (0.10) $ (0.13) $ (0.27) $ (0.22) $ (0.64)
Shares used in
per share
calculation:
Basic 31,847 31,790 32,434 31,819 32,374
Diluted 31,847 31,790 32,434 31,819 32,374
(1) Adjusted for the retrospective adoption of Financial Accounting
Standards Board ("FASB") Staff Position ("FSP") No. APB 14-1,
Accounting for Convertible Debt Instruments That May Be Settled
in Cash Upon Conversion (Including Partial Cash Settlement).
BELL MICROPRODUCTS INC.
Supplemental Reconciliation of GAAP to Non-GAAP Results
(In thousands, except per share data) (UNAUDITED)
ABOUT NON-GAAP FINANCIAL MEASURES
In addition to the Company's condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, the Company is providing in this release supplemental non-GAAP net income (loss) and non-GAAP net income (loss) per share as compared to the corresponding financial measures prepared in accordance with GAAP.
The presentation of supplemental non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. In addition, these measures may be materially different from non-GAAP financial measures used by other companies.
The Company is providing these non-GAAP financial measures because it believes that such measures provide important supplemental information to management and investors about its core operating results, primarily because the non-GAAP measures exclude certain charges and credits that management believes that investors benefit by being provided with operating information that excludes these charges and credits. Company management uses these non-GAAP financial measures, in addition to the corresponding GAAP financial measures, in evaluating the Company's operating performance, in planning and forecasting future periods, in making decisions regarding business operations and the allocation of resources, and in comparing the Company's performance against its historical performance. The Company excludes the following items from its non-GAAP financial measures:
Professional fees. These amounts include certain costs of auditors, investigators, lawyers and other outside advisors utilized in connection with: 1) independent accounting investigations, 2) the restatement of certain previously-filed financial statements, and 3) the preparation of the delinquent financial statements necessary to regain SEC reporting compliance. Management has excluded such costs incurred in excess of $2.2 million for each three-month period presented, as it believes $2.2 million represents approximately one quarter of the Company's estimated annual spending for such professional fees on matters other than those listed above. The actual professional fees incurred in future periods may be significantly different than this estimate, and such costs will likely fluctuate significantly from quarter-to-quarter and year-to-year.
Trade settlements. These credits were recorded upon the settlement of certain trade receivable credits (recorded as an increase in net sales) and trade payable credits (recorded as a reduction of cost of goods sold) received in prior periods.
Contingent put option. These charges and credits represent amounts recorded under agreements with the former shareholders of ProSys, under which the Company has granted those shareholders rights to put certain shares to the Company and rights to receive cash from the Company upon open market sales under certain conditions.
Intangible amortization. These charges reflect the non-cash amortization of certain intangible assets.
Stock-based compensation. These non-cash charges reflect amounts recorded pertaining to stock options and restricted stock units granted under stock-based compensation plans.
Restructuring costs. At various times in the past, we have implemented restructuring plans to improve operating performance. Restructuring costs consist of estimated expenses associated with workforce reductions, the consolidation of excess facilities and the impairment of leasehold improvements and other equipment associated with abandoned facilities. While we believe it is important to understand these charges, we do not believe that these charges are indicative of our future operating results.
Amortization of debt discount. These charges represent the non-cash amortization recorded upon the retrospective adoption of Financial Accounting Standards Board ("FASB") Staff Position ("FSP") No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement).
Income tax impacts of non-GAAP items and elimination of the impact of valuation allowances. The Company adjusts its provision for income taxes to reflect the tax effects of excluding the non-GAAP items noted above. In addition, the Company excludes amounts related to the establishment or reversal of income tax valuation allowances as such amounts are not included in the Company's internal reporting, budgeting or planning processes.
All supplemental non-GAAP financial measures are unaudited, and should be read in conjunction with the comparable information presented in accordance with GAAP.
In thousands, except per share amounts
Three Months Ended Six Months Ended
-------------------------------- --------------------
Jun 30, Mar 31, Jun 30, Jun 30, Jun 30,
2009 2009 2008 2009 2008
------- ------- ------- ------- --------
Net income
(loss):
GAAP net
loss $(3,048) $(4,043) $(8,828) $(7,091) $(20,731)
Adjustments:
Profes-
sional
fees(1) 8,252 6,374 10,037 14,626 18,090
Trade
settle-
ments (10,508) (4,216) -- (14,724) (3,248)
Contingent
put
option (690) 132 (400) (558) 3,187
Intangible
amortiza-
tion 773 784 885 1,557 1,800
Stock
-based
compen-
sation 704 561 843 1,265 1,510
Restruc-
turing
costs 911 1,188 72 2,099 2,281
Amortiza-
tion
of
debt
discount 2,275 2,188 1,973 4,463 3,830
Income
tax
impacts
of
non-GAAP
items
and
elimination
of the
impact
of
valuation
allow-
ances(2) 1,795 474 (948) 2,268 (1,632)
------- ------- ------- ------- --------
Total
adjustments
to GAAP
net
loss 3,512 7,485 12,462 10,996 25,818
------- ------- ------- ------- --------
Non-GAAP
net
income $ 464 $ 3,442 $ 3,634 $ 3,905 $ 5,087
======= ======= ======= ======= ========
Shares used
in
computing
non-GAAP
net income:
Basic 31,847 31,790 32,434 31,819 32,374
======= ======= ======= ======= ========
Diluted 32,595 32,201 32,497 32,398 32,504
======= ======= ======= ======= ========
Basic net
income
(loss) per
share:
GAAP $ (0.10) $ (0.13) $ (0.27) $ (0.22) $ (0.64)
Adjust-
ments 0.11 0.24 0.38 0.34 0.80
------- ------- ------- ------- --------
Non-GAAP $ 0.01 $ 0.11 $ 0.11 $ 0.12 $ 0.16
======= ======= ======= ======= ========
Diluted
net
income
(loss)
per
share:
GAAP $ (0.10) $ (0.13) $ (0.27) $ (0.22) $ (0.64)
Adjust-
ments 0.11 0.24 0.38 0.34 0.80
------- ------- ------- ------- --------
Non-GAAP $ 0.01 $ 0.11 $ 0.11 $ 0.12 $ 0.16
======= ======= ======= ======= ========
(1) Excluded from non-GAAP net income is professional fees for
auditors, investigators, lawyers and other outside advisors
incurred in excess of $2.2 million for each three-month period
presented, as management believes $2.2 million represents
approximately one quarter of the Company's expected annual
spending on such professional fees. The actual professional
fees incurred may be significantly different than this estimate,
and such costs will likely fluctuate significantly from quarter-
to-quarter and year-to-year.
(2) Amount represents the income tax effect of other adjustments
to GAAP net loss and the changes in valuation allowances
recorded against deferred tax assets.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Bell Microproducts Inc.
CONTACT: Bell Microproducts Inc. Amy Feng, Investor Relations Representative (213) 630-6550 ir@bellmicro.com
Copyright (C) 2009 GlobeNewswire. All rights reserved
News Provided by COMTEX
Company: Bell Microproducts, Inc. (BELM)
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