SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q/A

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

Commission file number 1-11471

Bell Industries, Inc.

(Exact name of Registrant as specified in its charter)

California	95-2039211
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1960 E. Grand Avenue, Suite 560, El Segundo, California	90245
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 563-2355

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES R NO £

     Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

YES £ NO R

     Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES £ NO R

     As of the close of business on November 8, 2005, there were 8,460,224 outstanding shares of the Registrant’s Common Stock.

BELL INDUSTRIES, INC.

INDEX

	Page
Part I — FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Condensed Statement of Operations for the three and nine months ended September 30, 2005 and 2004 (unaudited)		1
Consolidated Condensed Balance Sheet as of September 30, 2005 (unaudited, as restated) and December 31, 2004 (as restated)		2
Consolidated Condensed Statement of Cash Flows for the nine months ended September 30, 2005 and 2004 (unaudited, as restated)		3
Notes to Unaudited Consolidated Condensed Financial Statements		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		7
Item 3. Quantitative and Qualitative Disclosures About Market Risk		13
Item 4. Controls and Procedures		13
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		14
Item 3. Defaults Upon Senior Securities		14
Item 4. Submission of Matters to a Vote of Security Holders		14
Item 5. Other Information		14
Item 6. Exhibits		14
SIGNATURES		14
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

BELL INDUSTRIES, INC.

EXPLANATORY NOTE

This Amendment No. 1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 initially filed with the Securities and Exchange Commission on November 14, 2005 is being filed to reflect restatement of the Company’s Consolidated Condensed Balance Sheet at September 30, 2005 and December 31, 2004 and the Consolidated Condensed Statement of Cash Flows for the nine months ended September 30, 2005 and 2004 to correct an error in the classification on the balance sheet and in the cash flow statement of the effects of the Company’s floor plan arrangements. As more fully described in the Notes to the Consolidated Condensed Financial Statements, amounts that were previously reported in the Consolidated Condensed Statement of Cash flows as operating activities have been restated to financing activities. Additionally, floor plan payables are being presented as a separate line item in the Consolidated Condensed Balance Sheet instead of the previous presentation within accounts payable.

Generally, no attempt has been made in this Form 10-Q/A to modify or update other disclosures presented in the original report on Form 10-Q except as required to reflect the effects of the restatement. This Form 10-Q/A generally does not reflect events occurring after the filing of the original Form 10-Q or modify or update those disclosures affected by subsequent events. Information not affected by the restatement is unchanged and reflects the disclosures made at the time of the original filing of the Form 10-Q. Accordingly, this Form 10-Q/A should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the original Form 10-Q, including any amendments to those filings. The following items have been amended as a result of the restatement:

• Part I, Item 1, Financial Information;

• Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations has been revised to reflect the restatement;

• Part I, Item 4, Controls and Procedures; and

• Part II, Item 6, Exhibits.

Our Chief Executive Officer and Chief Financial Officer have also reissued certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

BELL INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(Unaudited, in thousands, except per share data)

	Three months ended						Nine months ended
	September 30						September 30
	2005			2004			2005			2004
Net revenues
Products	$	31,424		$	32,300		$	82,804		$	94,645
Services		7,772			7,190			22,438			23,091
		39,196			39,490			105,242			117,736
Costs and expenses
Cost of products sold		25,436			26,445			65,684			77,833
Cost of services provided		6,185			5,687			18,032			18,419
Selling and administrative		6,905			6,980			20,628			21,002
Interest, net		(93	)		(39	)		(181	)		(107	)
Special items		325			700			325			700
		38,758			39,773			104,488			117,847
Income (loss) before income taxes		438			(283	)		754			(111	)
Income tax expense		15			31			60			75
Net income (loss)	$	423		$	(314	)	$	694		$	(186	)
Share and Per Share Data:
Basic
Net income (loss)	$	.05		$	(.04	)	$	.08		$	(.02	)
Weighted average common shares		8,460			8,378			8,458			8,375
Diluted
Net income (loss)	$	.05		$	(.04	)	$	.08		$	(.02	)
Weighted average common shares		8,479			8,378			8,502			8,375

See Accompanying Notes to Consolidated Condensed Financial Statements.

1

BELL INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited, dollars in thousands)

	September 30			December 31
	2005			2004
	Unaudited (As Restated)			(As Restated)
ASSETS
Current assets
Cash and cash equivalents	$	11,955		$	10,801
Accounts receivable, less allowance for doubtful accounts of $801 and $727		15,680			11,455
Inventories		10,181			14,364
Prepaid expenses and other		2,235			1,813
Total current assets		40,051			38,433
Fixed assets, net		3,137			3,139
Other assets		3,374			3,617
	$	46,562		$	45,189
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Floor plan payables	$	84		$	2,172
Accounts payable		11,279			8,998
Accrued liabilities and payroll		8,827			8,178
Total current liabilities		20,190			19,348
Deferred compensation, environmental matters and other		4,807			5,025
Commitments and contingencies
Shareholders’ equity:
Preferred stock
Authorized — 1,000,000 shares, outstanding — none
Common stock
Authorized — 35,000,000 shares, outstanding — 8,460,224 and 8,437,724 shares		32,600			32,545
Accumulated deficit		(11,035	)		(11,729	)
Total shareholders’ equity		21,565			20,816
	$	46,562		$	45,189

See Accompanying Notes to Consolidated Condensed Financial Statements.

2

BELL INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Unaudited, in thousands)

	Nine months ended
	September 30
	2005			2004
	(As Restated)			(As Restated)
Cash flows from operating activities:
Net income (loss)	$	694		$	(186	)
Depreciation and amortization		980			1,308
Provision for losses on accounts receivable		151			115
Changes in assets and liabilities		1,773			(507	)
Net cash provided by (used in) operating activities		3,598			(730	)
Cash flows from investing activities:
Purchases of fixed assets and other		(411	)		(362	)
Cash flows from financing activities:
Net payments of floor plan payables		(2,088	)		(1,504	)
Employee stock plans		55			27
Net cash used in financing activities		(2,033	)		(1,477	)
Net increase (decrease) in cash and cash equivalents		1,154			(1,109	)
Cash and cash equivalents at beginning of period		10,801			12,203
Cash and cash equivalents at end of period	$	11,955		$	11,094
Changes in assets and liabilities:
Accounts receivable	$	(4,299	)	$	1,559
Inventories		4,183			731
Accounts payable		2,281			(1,805	)
Accrued liabilities and other		(392	)		(992	)
Net change	$	1,773		$	(507	)

See Accompanying Notes to Consolidated Condensed Financial Statements.

3

BELL INDUSTRIES, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Accounting Principles

The accompanying consolidated condensed financial statements for the three and nine month periods ended September 30, 2005 and 2004 have been prepared in accordance with generally accepted accounting principles (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements have not been audited by an independent registered public accounting firm, but include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the consolidated financial condition, results of operations and cash flows for such periods. However, these results are not necessarily indicative of results for any other interim period or for the full year. The accompanying consolidated condensed balance sheet as of December 31, 2004 has been derived from audited financial statements, but does not include all disclosures required by GAAP.

Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to guidelines of the Securities and Exchange Commission (the “SEC”). Management believes that the disclosure included in the accompanying interim financial statements and footnotes are adequate to make the information not misleading, but the disclosure contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Restatement

The Company has restated certain amounts in the Consolidated Condensed Balance Sheet at September 30, 2005 and December 31, 2004 and the Consolidated Condensed Statement of Cash Flows for the nine months ended September 30, 2005 and 2004 to correct an error in the classification of the Company’s floor plan arrangements with third party finance companies. Previously, the Company reported borrowings and repayments of floor plan financings with third party finance companies in the Consolidated Condensed Statement of Cash Flows as operating activities. The Consolidated Condensed Statement of Cash Flows has been restated to include these amounts in cash flows from financing activities. For the nine months ended September 30, 2005, this change had the effect of increasing net cash provided by operating activities and increasing net cash used in financing activities. For the nine months ended September 30, 2004, this change had the effect of increasing net cash provided by operating activities and increasing net cash used in financing activities. Additionally, floor plan payables are being presented as a separate line item in the Consolidated Condensed Balance Sheet instead of the previous presentation within accounts payable.

A summary of the effects of the restatement follows:

	Nine months ended
	September 30
Consolidated Condensed Statement of Cash Flows	2005			2004
Net cash provided by (used in) operating activities as previously reported	$	1,510		$	(774	)
Restatement of floor plan payables		2,088			1,504
Restated net cash provided by operating activities	$	3,598		$	730
Net cash provided by financing activities as previously reported	$	55		$	27
Restatement of floor plan payables		(2,088	)		(1,504	)
Restated net cash used in financing activities	$	(2,033	)	$	(1,477	)
Consolidated Condensed Balance Sheet	September 30 2005			December 31 2004
Floor plan payables previously reported	$	—		$	—
Restatement of floor plan payables		84			2,172
Restated floor plan payables	$	84		$	2,172
Accounts payable previously reported	$	11,363		$	11,170
Restatement of floor plan payables		(84	)		(2,172	)
Restated accounts payable	$	11,279		$	8,998

Special Items

During the quarter ended September 30, 2005, the Company recorded a special pre-tax charge totaling $325,000 in connection with a severance agreement for a former executive. Substantially all costs related to this charge were paid in October 2005. During the quarter ended September 30, 2004, the Company recorded a special pre-tax charge totaling $700,000 in connection with an employment agreement for another former executive. Substantially all costs related to this charge were paid in October 2004.

Shipping and Handling Costs

Shipping and handling costs, consisting primarily of freight paid to carriers, Company-owned delivery vehicle expenses and payroll related costs incurred in connection with storing, moving, preparing, and delivering products totaled approximately $1.0 million and $2.8 million during the three and nine month periods ended September 30, 2005 and $1.1 million and $3.0 million during the three and nine month periods ended September 30, 2004. These costs are included within selling and administrative expenses in the Consolidated Condensed Statement of Operations.

Floor Plan Arrangements

The Company finances certain inventory purchases in its Technology Solutions business unit through floor plan arrangements with two finance companies. At September 30, 2005 and December 31, 2004, the Company had outstanding floor plan obligations of approximately $84,000 and $2.2 million, respectively.

4

Accrued Liabilities

The Company accrues for liabilities associated with disposed businesses, including amounts related to legal, environmental and contractual matters. Accrued liabilities include approximately $3.5 million and $4.3 million of amounts attributable to disposed businesses at September 30, 2005 and December 31, 2004, respectively.

Stock-Based Compensation

The Company, from time to time, grants stock options for a fixed number of shares to certain employees and directors with an exercise price equal to or greater than the fair value of the shares at the date of grant. The Company accounts for stock option grants in accordance with Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees” and related interpretations, and, accordingly, recognizes no compensation expense for the stock option grants as the exercise price of all options granted is equal to or greater than the fair market value of the Company’s common stock at the date of grant. The following table illustrates the effect on net income and net income per share, for each of the three and nine month periods ended September 30, 2005 and 2004, if the Company had applied the fair value method as prescribed by Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” (dollars in thousands):

	Three months ended						Nine months ended
	September 30						September 30
	2005			2004			2005			2004
Net income (loss), as reported	$	423		$	(314	)	$	694		$	(186	)
Compensation expense as determined under SFAS No. 123		(34	)		(45	)		(66	)		(112	)
Pro forma net income (loss)	$	389		$	(359	)	$	628		$	(298	)
Net income (loss) per share
Basic and diluted — as reported	$	.05		$	(.04	)	$	.08		$	(.02	)
Basic and diluted — pro forma	$	.05		$	(.04	)	$	.07		$	(.04	)

Per Share Data

Basic earnings per share data are based upon the weighted average number of common shares outstanding. Diluted earnings per share data are based upon the weighted average number of common shares outstanding plus the number of common shares potentially issuable for dilutive securities such as stock options and warrants. The weighted average number of common shares outstanding for each of the three and nine month periods ended September 30, 2005 and 2004 is set forth in the following table (in thousands):

	Three months ended					Nine months ended
	September 30					September 30
	2005		2004			2005		2004
Basic weighted average shares outstanding		8,460		8,378			8,458		8,375
Potentially dilutive stock options		19		82			44		90
Anti-dilutive stock options due to net loss in period				(82	)				(90	)
Diluted weighted average shares outstanding		8,479		8,378			8,502		8,375

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment.” SFAS No. 123 (revised 2004) revises SFAS No. 123 and APB No. 25 and related interpretations. SFAS No. 123 (revised 2004) requires compensation cost relating to all share-based payments to employees to be recognized in the financial statements based on their fair values in the first interim or annual reporting period beginning after June 15, 2005 either on a retroactive or a prospective basis. The pro forma disclosures previously permitted under SFAS No. 123 will no longer be an alternative to financial statement recognition. In April 2005, the SEC adopted a rule that delayed the effective date of SFAS No. 123 (revised 2004) to the first annual reporting period beginning after June 15, 2005. The Company is currently estimating the potential impact of the adoption of SFAS No. 123 (revised 2004) and has not yet selected the method of adoption.

Environmental Matters

Reserves for environmental matters primarily relate to the cost of monitoring and remediation efforts, which commenced in 1998, at a former leased facility site of the Company’s electronics circuit board manufacturing business (“ESD”). ESD was closed in the early 1990s. At September 30, 2005 and December 31, 2004, ESD estimated future remediation and related costs totaled approximately $2.8 million and $3.3 million, respectively. At September 30, 2005, approximately $800,000 (estimated current portion) is included in accrued liabilities and $2.0 million (estimated non-current portion) is included in deferred compensation, environmental matters and other in the Consolidated Condensed Balance Sheet. At September 30, 2005 and December 31, 2004, the estimated future amounts to be recovered from insurance totaled $2.3 million and $2.6 million, respectively. At September 30, 2005, approximately $1.2 million (estimated current portion) is included in prepaid expenses and other and $1.1 million (estimated non-current portion) is included in other assets in the Consolidated Condensed Balance Sheet.

5

Litigation

Williams Electronic Games litigation: In May 1997, Williams Electronics Games, Inc. (“Williams”) filed a complaint in the United States District Court for the Northern District of Illinois (“US District Court”) against a former Williams employee and several other defendants alleging common law fraud and several other infractions related to Williams’ purchase of electronic components at purportedly inflated prices from various electronics distributors under purported kickback arrangements during the period from 1991 to 1996. In May 1998, Williams filed an amended complaint adding several new defendants, including Milgray Electronics, Inc., a publicly traded New York corporation (“Milgray”), which was acquired by the Company in a stock purchase completed in January 1997. The complaint sought an accounting and restitution representing alleged damages as a result of the infractions. The Company has not been named in any complaint and was not a party to the alleged infractions. The Company, as the successor company to Milgray, has vigorously defended the case on several grounds and continues to assert that Milgray did not defraud Williams, and that Williams suffered no damages as electronic components were purchased by Williams at prevailing market prices.

The case proceeded to trial, which commenced and ended in March 2002, with a jury verdict resulting in Milgray having no liability to Williams. In July 2002, Williams appealed the jury verdict and, in April 2004, the United States Court of Appeals for the 7th Circuit (“US Appellate Court”) rendered its decision. The US Appellate Court concluded that jury instructions issued by the US District Court were in error and the case was ordered for retrial of Williams’ fraud and restitution claims. The case was remanded to the US District Court and a new judge was assigned. In September 2005, the US District Court entered its order declining to exercise supplemental jurisdiction over Williams’ claims and dismissing Williams’ case without prejudice. The US District Court noted in its order that Williams could pursue its claims in Illinois State Courts. In October 2005, Williams filed a Notice of Appeal to the US Appellate Court from the judgment of dismissal entered by the US District Court. Williams’ claim for compensatory damages is approximately $8.7 million, not including an additional claim of $4.8 million for pre-judgment interest. While the Company cannot predict the outcome of this litigation, a final judgment favorable to Williams could have a material adverse effect on the Company’s results of operations, cash flows or financial position. Management intends to continue a vigorous defense.

Other litigation: The Company is involved in other litigation, which is incidental to its current and discontinued businesses. The resolution of the other litigation is not expected to have a material adverse effect on the Company’s results of operations, cash flows or financial position.

Business Segment Information

The Company has three reportable business segments: Technology Solutions, a provider of integrated technology solutions: Recreational Products, a distributor of replacement parts and accessories for recreational and other leisure-time vehicles; and Electronic Components, a specialty manufacturer and seller of standard and custom magnetic products.

The following summarizes financial information for the Company’s reportable segments (in thousands):

	Three months ended						Nine months ended
	September 30						September 30
	2005			2004			2005			2004
Net revenues
Technology Solutions
Products	$	17,182		$	18,629		$	39,305		$	50,530
Services		7,772			7,190			22,438			23,091
		24,954			25,819			61,743			73,621
Recreational Products		12,122			11,878			37,433			38,049
Electronic Components		2,120			1,793			6,066			6,066
	$	39,196		$	39,490		$	105,242		$	117,736
Operating income (loss)
Technology Solutions	$	418		$	177		$	(42	)	$	(311	)
Recreational Products		478			432			1,530			1,540
Electronic Components		468			335			1,403			1,237
Corporate costs		(694	)		(566	)		(1,993	)		(1,984	)
Special items		(325	)		(700	)		(325	)		(700	)
		345			(322	)		573			(218	)
Interest, net		93			39			181			107
Income tax expense		(15	)		(31	)		(60	)		(75	)
Net income (loss)	$	423		$	(314	)	$	694		$	(186	)

6

Termination of a Material Definitive Agreement

During July 2005, the Company’s largest client, Philip Morris USA, a subsidiary of the Altria Group, Inc., indicated its intention to terminate certain outsourcing and product sales provided by the Company to a new vendor on or before the contract termination date of April 2006. During September 2005, written notification was received that terminates the enterprise service desk services portion of the engagement, effective April 1, 2006. We are awaiting final details of the transition, including the timing of the transition of the other contractual portions of the engagement. For the nine months ended September 30, 2005, the portion of the engagement covered by this contractual relationship generated approximately $5.9 million in services revenue and $3.5 million in product revenues. For the nine months ended September 30, 2004, services revenues from this portion of the engagement totaled approximately $6.2 million and product revenues amounted to approximately $9.2 million, of which approximately $6.4 million was related to a large product deployment engagement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by, the consolidated condensed financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, within the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, and within other filings with the SEC. This discussion and analysis includes “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward looking statements contained in this Quarterly Report may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” and “estimated,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements that we make in this Quarterly Report are set forth below, are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and are set forth in other reports or documents that we file from time to time with the SEC. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

The accompanying discussion gives effect to the restatements of the 2005 and 2004 Quarterly Consolidated Condensed Financial Statements as disclosed under the heading titled “Restatement” in the Notes to Consolidated Condensed Financial Statements.

Critical Accounting Policies

In the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, the critical accounting policies were identified which affect the more significant estimates and assumptions used in preparing the consolidated financial statements. These policies have not changed from those previously disclosed.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004), “Share-Based Payment.” SFAS No. 123 (revised 2004) revises SFAS No. 123 and APB No. 25 and related interpretations. SFAS No. 123 (revised 2004) requires compensation cost relating to all share-based payments to employees to be recognized in the financial statements based on their fair values in the first interim or annual reporting period beginning after June 15, 2005 either on a retroactive or a prospective basis. The pro forma disclosures previously permitted under SFAS No. 123 will no longer be an alternative to financial statement recognition. In April 2005, the SEC adopted a rule that delayed the effective date of SFAS No. 123 (revised 2004) to the first annual reporting period beginning after June 15, 2005. The Company is currently estimating the potential impact of the adoption of SFAS No. 123 (revised 2004) and has not yet selected the method of adoption.

Results of Operations

The Note to Consolidated Condensed Financial Statements under the heading titled “Business Segment Information” includes a tabular summary of results of operations by business segment for the three and nine month periods ended September 30, 2005 and 2004.

Net revenues

Net revenues for the three months ended September 30, 2005 decreased slightly to $39.2 million from $39.5 million in 2004. For the nine months ended September 30, 2005, net revenues decreased 10.6% to $105.2 million from $117.7 million in 2004. Net revenues are further discussed in “Technology Solutions,” “Recreational Products,” and “Electronic Components,” below.

7

Operating income (loss)

Operating income for the three months ended September 30, 2005 totaled $345,000, including a special pre-tax charge totaling $325,000. This compared to an operating loss in 2004 of $322,000, including a special pre-tax charge totaling $700,000. For the nine months ended September 30, 2005, operating income totaled $573,000, including the $325,000 charge. This compared to an operating loss of $218,000 in 2004, including the $700,000 charge. Operating results are further discussed in “Technology Solutions,” “Recreational Products,” and “Electronic Components,” below.

Corporate costs

Corporate costs for the three months ended September 30, 2005 increased 22.6% to $694,000 from $566,000 in 2004. For each of the nine months ended September 30, 2005 and 2004, corporate costs totaled approximately $2.0 million. The increase in corporate costs for the three months ended September 30, 2005 is primarily attributable to amounts collected during the three months ended September 30, 2004 on a fully reserved note receivable related to a previously sold business.

Special items

During the quarter ended September 30, 2005, the Company recorded a special pre-tax charge totaling $325,000 in connection with a severance agreement with a former executive. During the quarter ended September 30, 2004, the Company recorded a special pre-tax charge totaling $700,000 in connection with an employment agreement for another former executive.

Interest, net

Net interest income for the three months ended September 30, 2005 increased to $93,000 from $39,000 in 2004. For the nine months ended September 30, 2005, net interest income increased to $181,000 from $107,000 in 2004. The increase in net interest income is primarily attributable to higher average cash balances and higher interest rates during the three months ended September 30, 2005 as compared to the corresponding period in 2004.

Technology Solutions

Technology Solutions revenues for the three months ended September 30, 2005 decreased 3.4% to $25.0 million from $25.8 million in 2004. For the nine months ended September 30, 2005, Technology Solutions revenues decreased $11.9 million to $61.7 million from $73.6 million in 2004. Product revenues for three months ended September 30, 2005 decreased 7.8% to $17.2 million from $18.6 million in 2004. For the nine months ended September 30, 2005, product revenues decreased 22.2% to $39.3 million from $50.5 million in 2004. The decrease in product revenues is primarily attributable to a large product deployment engagement for a major account during the second and third quarters of 2004 that was not repeated this year and the continued market pressure due to direct sales models, intense price competition and extended technology purchasing cycles. Gross margin percentage increased on product sales for both the three and nine month periods ended September 30, 2005 as compared to the corresponding periods in 2004 due to stronger margins from education accounts and the lower overall margin percentage on the large product deployment engagement during 2004. Services revenues for the three months ended September 30, 2005 increased 8.1% to $7.8 million from $7.2 million in 2004. For the nine months ended September 30, 2005, services revenues decreased 2.8% to $22.4 million from $23.1 million in 2004. The increase in services revenues during the three months ended September 30, 2005 is attributable to an increase of approximately $1.3 million in reverse logistics and depot repair business from new and existing engagements offset by approximately $300,000 related to the ending of a help desk engagement in the current year first quarter and other net decreases in services revenues totaling approximately $400,000. The decrease in services revenues for the nine months ended September 30, 2005 is attributable to the ending of the help desk engagement and the ending of an outsourcing engagement in 2004. Decreases in services revenues from these engagement totaling approximately $2.1 million was offset by approximately $1.4 million in net increases in services revenues from new and expanded engagements. Operating income for the three months ended September 30, 2005 increased 136.2% to $418,000 from $177,000 in 2004. For the nine months ended September 30, 2005, operating loss decreased to $42,000 from $311,000 in 2004. The improvement in operating results is primarily attributable to cost containment efforts and related reductions in administrative expenses and the revenue increase in reverse logistics and depot repair business.

During July 2005, the Company’s largest client, Philip Morris USA, a subsidiary of the Altria Group, Inc., indicated its intention to terminate certain outsourcing and product sales provided by the Company to a new vendor on or before the contract termination date of April 2006. During September 2005, written notification was received that terminates the enterprise service desk services portion of the engagement, effective April 1, 2006. We are awaiting final details of the transition, including the timing of the transition of the other contractual portions of the engagement. For the nine months ended September 30, 2005, the portion of the engagement covered by this contractual relationship generated approximately $5.9 million in services revenue and $3.5 million in product revenues. For the nine months ended September 30, 2004, services revenues from this portion of the engagement totaled approximately $6.2 million and product revenues amounted to approximately $9.2 million, of which approximately $6.4 million was related to the large product deployment engagement mentioned above.

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Recreational Products

Recreational Products revenues for the three months ended September 30, 2005 increased slightly to $12.1 million from $11.9 million in 2004, while operating income increased to $478,000 from $432,000. For the nine months ended September 30, 2005, Recreational Products revenues decreased slightly to $37.4 million from $38.0 million, and operating income was $1.5 million in both periods. Slight increases in sales of marine, snow, cycle and ATV products during the nine months ended September 30, 2005 were offset by a decrease in sales of recreational vehicle products.

Electronic Components

Electronic Components revenues for the three months ended September 30, 2005 increased 18.2% to $2.1 million from $1.8 million in 2004, and operating income increased 39.7% to $468,000 from $335,000. Electronic Components revenues totaled $6.1 million for both the nine months ended September 30, 2005 and 2004, and operating income increased 13.4% to $1.4 million in 2005 from $1.2 million in 2004. An increase in stocking package sales to certain large customers contributed to the overall increase in sales during the three months ended September 30, 2005 as compared to the prior year.

Cost of products sold

As a percentage of product revenues, cost of products sold for the three months ended September 30, 2005 decreased to 80.9% from 81.9% in 2004. For the nine months ended September 30, 2005, this percentage decreased to 79.3% from 82.2%. These decreases are primarily attributable to the stronger margins from the Technology Solutions education account base during 2005 coupled with the non-recurrence of lower margins achieved on the large product deployment engagement during 2004.

Cost of services provided

As a percentage of services revenues, cost of services provided for the three months ended September 30, 2004 increased to 79.6% from 79.1% in 2004 at the Technology Solutions business unit. For the nine months ended September 30, 2005, this percentage increased to 80.4% from 79.8% in 2004. These increases are primarily attributable to slightly lower margins on increased revenues from reverse logistics and depot repair business during the three months ended September 30, 2005 as compared to the prior year and the $1.1 million decrease in services revenues during the first quarter of 2005 which resulted in relatively higher payroll related service delivery costs.

Selling and administrative expenses

As a percentage of revenues, selling and administrative expenses for the three months ended September 30, 2005 decreased slightly to 17.6% from 17.7% in 2004. For the nine months ended September 30, 2005, this percentage increased to 19.6% from 17.8%. The increase for the nine months ended September 30, 2005 is primarily attributable to the overall decrease in revenues at the Technology Solutions business unit and the existence of certain fixed expenses. While total selling and administrative expenses decreased nearly $400,000 during the nine months ended September 30, 2005, these expenses as a percentage of sales increased because of the overall decrease in sales during the period.

Income tax

Income tax expense totaled $15,000 and $31,000 for the three months ended September 30, 2005 and 2004, respectively. For the nine months ended September 30, 2005 and 2004, income tax expense totaled $60,000 and $75,000, respectively. These amounts primarily relate to state taxes. As of September 30, 2005, the Company continues to record a full valuation allowance against net deferred tax asset balances.

Net income (loss)

Net income for the three months ended September 30, 2005 totaled $423,000, including the $325,000 pre-tax special charge described above, compared to a net loss in the corresponding prior year period of $314,000, including the $700,000 pre-tax special charge described above. For the nine months ended September 30, 2005, net income totaled $694,000, including the $325,000 pre-tax special charge, compared to a net loss of $186,000 in the corresponding prior year period, including the $700,000 pre-tax special charge. These changes in net income (loss) resulted from the factors described above.

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Changes in Financial Condition

Liquidity and Capital Resources

Selected financial data are set forth in the following tables (dollars in thousands, except per share amounts):

	September 30			December 31
	2005			2004
Cash and cash equivalents	$	11,955		$	10,801
Working capital	$	19,861		$	19,085
Current ratio		2.0:1			2.0:1
Long-term liabilities to total capitalization		18.2	%		19.4	%
Shareholders’ equity per share	$	2.55		$	2.47
	Three months ended September 30
	2005			2004
Days’ sales in receivables		41			43
Days’ sales in inventories		29			29

The Company has restated certain amounts in the Consolidated Condensed Balance Sheet at September 30, 2005 and December 31, 2004 and the Consolidated Condensed Statement of Cash Flows for the nine months ended September 30, 2005 and 2004 to correct an error in the classification of the Company’s floor plan arrangements with third party finance companies. Previously, the Company reported borrowings and repayments of floor plan financings with third party finance companies in the Consolidated Condensed Statement of Cash Flows as operating activities. The Consolidated Condensed Statement of Cash Flows has been restated to include these amounts in cash flows from financing activities. For the nine months ended September 30, 2005, this change had the effect of increasing net cash provided by operating activities and increasing net cash used in financing activities. For the nine months ended September 30, 2004, this change had the effect of increasing net cash provided by operating activities and increasing net cash used in financing activities. Additionally, floor plan payables are being presented as a separate line item in the Consolidated Condensed Balance Sheet instead of the previous presentation within accounts payable.

Net cash provided by operating activities was $3.6 million for the nine months ended September 30, 2005, compared to $730,000 in 2004. The cash provided by operating activities during 2005 reflects a decrease in inventories and an increase in accounts payable offset by an increase in accounts receivable. The decrease in inventory is primarily attributable to reduced inventory levels at the Recreational Products business unit. The increase in accounts payable relates to increased purchasing to support higher sales levels during September 2005 as compared to December 2004 and to utilizing open payment terms offered by distributor suppliers for inventory purchases in 2005 at the Technology Solutions business unit and less financing through the use of floor plan arrangements. The increase in accounts receivable is primarily attributable to the higher sales during September 2005 as compared to December 2004 and the timing of receivable collections. The net cash provided by operating activities in 2004 reflects decreases in accounts receivable and inventory partially offset by a decrease in accounts payable. The changes in accounts payable and accounts receivable relate primarily to timing of payments and receipts.

Net cash used in investing activities totaled $411,000 for the nine months ended September 30, 2005 compared to $362,000 in 2004. Purchases of technology related products and other fixed assets totaled $411,000 and $528,000 for the nine months ended September 30, 2005 and 2004, respectively. Proceeds on a note receivable from a business sold in 1999 totaled $166,000 during the nine months ended September 30, 2004.

Net cash used in financing activities totaled $2.0 million and $1.5 million for the nine months ended September 30, 2005 and 2004, respectively. The cash used in financing activities in 2005 represents net payments of $2.1 million on floor plan arrangements partially offset by the proceeds from the exercise of employee stock options. The cash used in financing activities in 2004 represents net payments of $1.5 million on floor plan arrangements partially offset by the proceeds from the exercise of employee stock options.

The Company believes that it has sufficient cash resources for the foreseeable future to support requirements for its operations and commitments through available cash and cash generated by operations.

Off-Balance Sheet Arrangements

The Company does not have any material off-balance sheet arrangements.

Contractual Obligations and Commercial Commitments

There have been no material changes to the Company’s contractual obligations and commercial commitments as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

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Factors That May Affect Future Results of Operations

In addition to other information contained in this report, we are subject to the following risks, which could materially adversely affect our business, financial condition and/or results of operations in the future.

We face certain significant risks related to the currently pending Williams litigation and from other potential litigation that could materially adversely affect our financial condition and results of operations.

We have been engaged in ongoing litigation in connection with our 1997 purchase of Milgray, which was named as a defendant by the plaintiff, Williams, in an action alleging common law fraud and other infractions related to Williams’ purchase of electronic components at allegedly inflated prices from 1991 to 1996. Although the outcome of this litigation cannot be predicted, an adverse verdict could have a materially adverse effect on us. The defense of this lawsuit has required a significant amount of our management’s time and attention and, even if we prevail in defending this lawsuit, we will incur additional legal and related expenses. The disruptive effect and expense of this litigation could adversely affect our business, financial condition and/or results of operations. We also may become subject to other litigation in the future.

Our previously owned businesses subject us to potential environmental liabilities, which could adversely affect our results of operations.

We are subject to various federal, state and local environmental statutes, ordinances and regulations relating to disposal of certain toxic, volatile or otherwise hazardous substances and wastes used or generated in connection with previously owned businesses. Such laws may impose liability without regard to whether we knew of, or caused, the release of such hazardous substances. Although we establish reserves for specifically identified potential environmental liabilities, which reserves we believe to be adequate, there may be potential undisclosed environmental liabilities or liability in excess of the amounts reserved. Compliance with these environmental laws could require us to incur substantial expenses.

We rely on a limited number of hardware and software vendors to supply us with products in our technology solutions business and the loss of our ability to rely upon any of those vendors, or to obtain their products in the future would adversely affect our results of operations.

Our technology solutions business is heavily dependent on our relationships with leading hardware and software vendors and on our status as an authorized service provider. Although we are currently authorized to service the products of many industry-leading hardware and software vendors, we may not be able to maintain our relationships, or attract new relationships, with the computer hardware and software vendors that may be necessary for our technology solutions business. Since we rely upon our vendor relationships as a marketing tool, any change in these relationships could adversely affect our results of operations while we seek to establish alternative relationships with other vendors. In general, our authorization agreements with vendors include termination provisions, some of which are immediate, and we cannot predict whether vendors will continue to authorize us as an approved service provider. In addition, we cannot predict whether those vendors will authorize us as an approved service provider for new products, which they may introduce. Any impairment of these vendor relationships, or the loss of authorization as an approved service provider, could adversely affect our ability to provide the products and services which our technology solutions business requires and harm our competitive position. In addition, significant product supply shortages have resulted from time to time because manufacturers have been unable to produce sufficient quantities of certain products to meet demand. We expect to experience difficulty from time to time in obtaining an adequate supply of products from our major vendors, which may result in delays in completing sales.

We may not be able to compete effectively with other companies in our business segments, which will cause our net sales and market share to decline and adversely affect our business, financial condition and results of operations.

Our businesses are highly competitive and we face strong competition from competitors that are substantially larger and have considerably greater financial, technical and marketing resources than us. We believe that our prices and delivery terms are competitive; however, our competitors may offer more aggressive pricing than we do. We have experienced and expect to continue to experience intense competitive pricing pressures in our businesses, which could require us to reduce prices, with a corresponding adverse impact on our operating results. Additionally, as competition in the technology industry has intensified, certain of our key technology suppliers have heightened their direct marketing initiatives. These initiatives have resulted in some of our clients electing to purchase technology products directly from the manufacturer, rather than through us. While we expect these initiatives to continue, there could be a material adverse impact on our business if the shift of clients to purchase directly from manufacturers occurs more quickly than anticipated.

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Our technology solutions and electronic components businesses are dependent on a limited number of major customers and clients and the loss of any of these major customers and clients would materially and adversely affect our business, financial condition and results of operations.

Sales of our products and services in our technology solutions and electronic components businesses have been and will continue to be concentrated in a small number of clients and customers. Three of our clients accounted for approximately 39% of our total revenues for 2004 in our technology solutions business, with one client, Philip Morris USA, accounting for approximately 14% of our total consolidated net revenues for the year. Similarly, five customers accounted for approximately 64% of our total sales of electronic components in 2004. In the event that any of these major customers or clients should cease to purchase products or services from us, or purchase significantly fewer products and services in the future, we could experience materially adverse effects on our business, financial condition and results of operations.

During July 2005, Philip Morris USA indicated its intention to transition certain outsourcing and product sales provided by the Company to a new vendor on or before the contract termination date of April 2006. During September 2005, written notification was received that terminates the enterprise service desk services portion of the engagement, effective April 1, 2006. We are awaiting final details of the transition, including the timing of the transition of the other contractual portions of the engagement. We plan to aggressively realign our cost structure in response to this development.

Our recreational products business is seasonal and is subject to fluctuations, based upon various economic and climatic conditions that could harm us.

Sales of our recreational products are affected directly by the usage levels and purchases of recreational vehicles, snowmobiles, motorcycles and ATVs, and marine products. The purchase and, in particular, the usage of these types of vehicles, are affected by weather conditions. As a result, sales of our recreational products business are highly susceptible to unpredictable events, and ordinarily decline in the winter months resulting in losses during these periods of the year. Additionally, unusual weather conditions in a particular season, such as unusually cold weather in the spring or summer months, can cause period-to-period fluctuations in our sales of recreational products. The usage and purchases of recreational vehicles, snowmobiles, motorcycles and ATVs, and marine products are also affected by consumers’ level of discretionary income and their confidence about economic conditions and changes in interest rates and in the availability and cost of gasoline. As a result, sales of our recreational products can fluctuate based upon unpredictable circumstances that are outside of our control.

Our recreational products business relies heavily upon vendors with which we have no long-term relationships.

We do not have long term supply contracts with our recreational products suppliers, which may adversely affect the terms on which we purchase products for resale or result in our inability to purchase products from one or more of such vendors in the future. These vendors may choose to distribute their products directly to aftermarket dealers or establish exclusive supply relationships with other distributors. Additionally, manufacturers of new recreational vehicles, snowmobiles, motorcycles and ATVs, and marine products may choose to incorporate optional equipment as standard equipment on their vehicles at the time of manufacture that are similar to products available for sale to dealers by distributors such as us. In addition to decreased sales, we would encounter increased competition in our markets, or may be unable to offer certain products to our customers, upon any such changes in our relationships with our recreational products vendors.

If we are unable to recruit and retain key personnel necessary to operate our businesses, our ability to compete successfully will be adversely affected.

We are heavily dependent on our current executive officers, management and technical personnel. The loss of any key employee or the inability to attract and retain qualified personnel could adversely affect our ability to execute our current business plans and successfully develop commercially viable products and services. Competition for qualified personnel is intense, and we might not be able to retain our existing key employees or attract and retain any additional personnel. In addition, our recent financial operating results may make it more difficult for us to attract and retain qualified personnel.

If we are unable to develop innovative products and services in our technology solutions and electronic components businesses, demand for our products and services may decrease.

Our future operating results in our technology solutions and electronic components businesses are dependent on our ability to continually develop, introduce and market new and innovative products, to modify existing products, to respond to technological change and to customize certain products to meet customer requirements. There are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timely fashion to satisfy customer demands. If this occurs, we could lose customers and experience adverse effects on our financial condition and results of operations.

Our electronic components business is cyclical and demand may decline in the future, which could adversely affect us.

Sales at our electronic components business have historically fluctuated with the performance of the electronic and semiconductor component industry. A decrease in demand within this industry could adversely affect our results of operations.

12

A significant or prolonged economic downturn could have a material adverse effect on our results of operations in our technology solutions business.

Our results of operations are affected by the level of business activity of our clients, which in turn is affected by the level of economic activity in the industries and markets that they serve. The general economic weakness in the IT industry resulting from among other things, the decline in discretionary IT spending by our clients and prospective clients, has adversely affected our revenues in recent years. A lack of improvement or continued decline in the level of business activity of our clients could continue to adversely affect our revenues and profitability.

If we fail to maintain an effective system of internal control over financial reporting and disclosure controls and procedures in the future, we may not be able to accurately report our financial results or prevent fraud, which would have an adverse affect on our business.

Effective internal control over financial reporting and disclosure controls and procedures are necessary for us to provide reliable financial information and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, it could have an adverse affect on our business. We have in the past discovered and may in the future discover areas of our internal control over financial reporting that need improvement. During 2005 we had a material error relating to our 2004 and 2003 annual consolidated financial statements, the interim consolidated condensed financial statements for all interim periods in 2004, and the first three interim periods in 2005 which required a restatement of our financial statements for those periods. Although we have implemented controls to properly prepare and review our financial statements, we cannot be certain that these measures will ensure that we will maintain adequate controls over our financial reporting process in the future.

In light of this error, we evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that we had a material weakness in the controls over the preparation, review, presentation and disclosure of amounts included within our Consolidated Balance Sheet and Consolidated Statement of Cash Flows. Specifically, cash flows from the our floor plan arrangements were not appropriately classified as cash flows from financing activities in the Consolidated Statement of Cash flows in accordance with generally accepted accounting principles. Further, these floor plan liabilities were not properly segregated from accounts payable in the Consolidated Balance Sheet as required under generally accepted accounting principles.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected .

We are in the process of beginning a review and analysis of our internal control over financial reporting for Sarbanes-Oxley compliance. As part of that process we may discover additional control deficiencies in our internal control over financial reporting or our disclosure controls and procedures that we believe require remediation. If we discover additional deficiencies, we will make efforts to remediate these deficiencies; however, there is no assurance that we will be successful either in identifying deficiencies or in their remediation. Any failure to successfully remediate the material weakness in internal control over financial discussed above or to maintain effective controls in the future could adversely affect our business or cause us to fail to meet our reporting obligations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company has no investments in market risk-sensitive investments for either trading purposes or purposes other than trading purposes.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management had previously concluded the Company’s disclosure controls and procedures were effective as of September 30, 2005. However, in connection with the restatement of the Company’s condensed consolidated financial statements , as fully described in the note to Consolidated Condensed Financial Statements under the heading titled “Restatement” of this Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2005, management determined that the material weakness described below existed as of September 30, 2005. Accordingly, our Chief Executive Officer and Chief Financial Officer have now concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were not effective as of September 30, 2005 at the reasonable assurance level to ensure that the information required to be disclosed by us in this quarterly report on Form 10-Q/A was recorded, processed, summarized and reported accurately within the time periods specified within the SEC’s rules and instructions for Form 10-Q and that such information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Notwithstanding the material weakness described below, management believes that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q/A fairly present in all material respects our financial condition, results of operations and cash flows for all periods presented.

As described at the note to Consolidated Condensed Financial Statements under the heading titled “Restatement,” included at Part I of this report, the Company has restated its 2004 and 2003 annual consolidated financial statements and the interim consolidated financial statements for all interim periods in 2004 and the first three interim periods in 2005 to correct an error in the presentation of the Company’s floor plan arrangements.

Material Weakness in Internal Control over Financial Reporting

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Management has concluded that as of September 30, 2005, the Company did not maintain effective controls over the preparation, review, presentation and disclosure of amounts included in our Consolidated Condensed Balance Sheet and Consolidated Condensed Statement of Cash Flows. Specifically, cash flows from the Company’s floor plan arrangements were not appropriately classified as cash flows from financing activities in the Consolidated Condensed Statement of Cash flows in accordance with generally accepted accounting principles. Further, these floor plan liabilities were not properly segregated from accounts payable in the Consolidated Condensed Balance Sheet as required under generally accepted accounting principles. This control deficiency resulted in the restatement of the Company’s 2004 and 2003 annual consolidated financial statements and the interim consolidated financial statements for all interim periods in 2004 and the first three interim periods in 2005. Additionally, this control deficiency could result in a misstatement of the Company’s accounts that would result in a material misstatement to the Company’s presentation and disclosure of floor plan arrangements that would not be prevented or detected. Accordingly, management has concluded that this control deficiency constitutes a material weakness.

Remediation Plan

Subsequent to December 31, 2005, the Company has implemented enhanced procedures which include improved training and review processes to ensure proper preparation, review, presentation, and disclosure of amounts included in its balance sheet and statement of cash flows.

Accordingly, management believes it has improved the design and effectiveness of its internal control over financial reporting; however, not all of the newly designed controls have operated for a sufficient period of time to demonstrate operating effectiveness. Therefore, management will continue to monitor and assess these control procedures to ascertain if the material weakness discussed above has been remediated.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2005 that has materially affected, or is likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Note to Consolidated Condensed Financial Statements under the heading titled “Litigation”, included in Part I of this report, is incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     None

Item 3. Defaults Upon Senior Securities

     None

Item 4. Submission of Matters to a Vote of Security Holders

     None

Item 5. Other Information

     None

Item 6. Exhibits

31.1 Certification of John A. Fellows, Chief Executive Officer of Registrant pursuant to Rule 13a-14 adopted under the Securities Exchange Act of 1934, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Mitchell I. Rosen, Chief Financial Officer of Registrant pursuant to Rule 13a-14 adopted under the Securities Exchange Act of 1934, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of John A. Fellows, Chief Executive Officer of Registrant furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Mitchell I. Rosen, Chief Financial Officer of Registrant furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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 thereunto duly authorized.

	BELL INDUSTRIES, INC.
Dated: April 17, 2006	By:	/s/ John A. Fellows
		John A. Fellows
		President and Chief Executive Officer (authorized officer of registrant)
Dated: April 17, 2006	By:	/s/ Mitchell I. Rosen
		Mitchell I. Rosen
		Vice President and Chief Financial Officer (principal financial and accounting officer)

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