8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

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

Date of report (date of earliest event reported):  February 20, 2004

BELL INDUSTRIES, INC.

(Exact name of registrant as specified in charter)

California	1-11471	95-2039211
(State of incorporation)	(Commission File Number)	(IRS Identification No.)

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.

TABLE OF CONTENTS

Item 7. Financial Statements and Exhibits
Item 12. Results of Operations and Financial Condition
SIGNATURES
EXHIBIT INDEX
EX – 99.1

Item 7. Financial Statements and Exhibits

(c) Exhibits

Exhibit	Description
99.l	February 20, 2004 Press Release by Bell Industries, Inc.

Item 12. Results of Operations and Financial Condition

On February 20, 2004, Bell Industries, Inc., (the “Company”) issued a press release describing selected financial results of the Company for the quarter and year ended December 31, 2003. Pursuant to SEC Release No. 33-8216, this press release is attached hereto as Exhibit 99.1 and is being filed under Item 12, to this Report on Form 8-K.

SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BELL INDUSTRIES, INC.
Dated:  February 20, 2004	By:	/s/ TRACY A. EDWARDS
		Tracy A. Edwards
		President — Chief Executive Officer

EXHIBIT INDEX

Exhibit	Description
99.1	Press Release dated February 20, 2004.

EX-99.1

EXHIBIT 99.1

CONTACT:

Bell Industries, Inc.
Tracy A. Edwards
310-563-2355

PondelWilkinson MS&L
Roger S. Pondel/Angie H. Yang
323-866-6060

FOR IMMEDIATE RELEASE

BELL INDUSTRIES REPORTS 2003 FOURTH QUARTER, FULL YEAR RESULTS

     El Segundo, California – February 20, 2004 – Bell Industries, Inc. (AMEX:BI) today reported higher net revenues and a reduction in its loss before income taxes for the fourth quarter ended December 31, 2003.

     Net revenues for the quarter rose 15 percent to $30.9 million from $26.9 million in the prior-year period. The company reduced its loss before income taxes to $1.4 million from $1.9 million in the 2002 fourth quarter. After providing for income tax effects, which include a 2003 valuation allowance for deferred tax benefits, net loss for the 2003 fourth quarter totaled $2.6 million, or $0.31 per share, compared with a net loss of $1.1 million, or $0.13 per share, a year earlier.

     For 2003, net revenues improved to $141.9 million from $140.8 million last year. Bell’s loss before income taxes decreased to $2.6 million from $3.4 million in 2002. After including income tax effects, Bell incurred a net loss in 2003 of $3.8 million, or $0.45 per share, compared with a net loss of $3.3 million, or $0.38 per share, a year ago. The 2002 results include a goodwill write-off of $2.1 million, equal to $1.3 million after tax, or $0.14 per share, relating to the adoption of a new accounting standard.

     “Results for the fourth quarter reflected improvement in each of Bell’s business units, a sign of progress as we continued to advance our businesses in a difficult economic environment,” said Tracy A. Edwards, chairman, president and chief executive officer of Bell Industries.

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Bell Industries, Inc.
2-2-2

     Sales at Bell’s Tech.logix Group (BTL), the company’s largest operating unit, increased 21 percent to $21.4 million in the 2003 fourth quarter from $17.7 million in the prior-year period. Services revenues grew 45 percent over last year’s fourth quarter and represented 40 percent of BTL’s total revenues. This compares with 33 percent a year ago and 35 percent in the third quarter of 2003. BTL reduced its operating loss for the 2003 fourth quarter to $866,000 from $951,000 a year earlier.

     “BTL continued to show progress with growth in services revenues,” Edwards said. “However, operating results continue to be challenged due to the start-up and implementation costs of new engagements and a continued investment in expanded business development efforts. As previously announced, we expect BTL’s services revenues to be adversely impacted due to the ending of an outsourcing engagement in early 2004. Nevertheless, we remain encouraged by signs of a stabilizing technology market and anticipate generally more positive corporate spending activity.

     “With new management leading BTL and a continued focus on developing new business opportunities and expanding market penetration, our primary objective is returning BTL to profitability,” Edwards said.

     Sales at Bell’s Recreational Products Group totaled $8.0 million for the three months ended December 31, 2003, compared with $7.9 million in last year’s fourth quarter. The unit’s operating loss for the seasonally slower fourth quarter was $108,000, down from $382,000 in 2002 which included distribution center relocation costs.

     Bell’s electronic components operation, J.W. Miller, posted a 14 percent increase in sales for the 2003 fourth quarter to $1.5 million from $1.3 million a year earlier. Operating income advanced to $204,000 from $81,000 last year as a result of increased sales and gross margin contribution.

     After consideration of relevant factors, including recent operating results and the prior utilization of all previously available tax benefit carry-back opportunities, the company has recorded a valuation allowance against net deferred tax asset balances. Edwards said the assessment of the valuation allowance against deferred tax assets and the recognition of future deferred tax benefits will be reconsidered as Bell returns to overall profitability. The establishment of the valuation allowance, net of reversals of tax accruals no longer required, resulted in an income tax provision of $1.2 million for the three months and year ended December 31, 2003. Before accounting changes, during the three months and year ended December 31, 2002, Bell recognized income tax benefits of $736,000 and $1.3 million, respectively, all of which were realized through carry-back opportunities.

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Bell Industries, Inc.
3-3-3

     Bell continues to maintain a strong balance sheet with no bank debt. At year-end 2003, Bell had net working capital of $17.8 million and cash of $12.2 million. Shareholders’ equity totaled $21.6 million, or $2.58 per share, at December 31, 2003.

     Bell’s primary business, the Tech.logix Group, provides information technology lifecycle services, including planning, product sourcing, migration, support, and disposal services. Recurring support services include help desk, depot, and on-site expertise for desktop and mobile devices, business software applications, and network infrastructures. Bell also distributes after-market parts and accessories to the recreational vehicle market. In addition, Bell manufactures and distributes a variety of standard and custom magnetic components used in electronic applications for computer, medical and telecommunication equipment.

     Certain matters discussed in this news release are forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from current trends. These include, but are not limited to, the prospects for a stabilizing technology market and increased corporate spending, returning BTL to profitability, decreased margins due to price competition, delays and costs associated with new client engagements, the effectiveness of business development efforts, realizing business opportunities as the economy improves, the company’s ability to achieve overall profitability, the future realization of tax benefits, and other factors described in the company’s public filings from time to time.

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(Tables Follow)

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Bell Industries, Inc.
4-4-4

Bell Industries, Inc.
Consolidated Operating Results
(In thousands, except per share data)
(Unaudited)

	Three months ended						Year ended
	December 31						December 31
	2003			2002			2003			2002
Net revenues
Products	$	22,365		$	21,025		$	106,956		$	118,448
Services		8,510			5,865			34,949			22,349
		30,875			26,890			141,905			140,797
Costs and expenses
Cost of products sold		18,175			17,187			87,181			98,076
Cost of services provided		7,221			4,560			28,449			17,065
Selling and administrative		6,896			7,040			29,019			29,216
Interest, net		(41	)		(36	)		(166	)		(200	)
		32,251			28,751			144,483			144,157
Loss before income taxes and cumulative effect of accounting change		(1,376	)		(1,861	)		(2,578	)		(3,360	)
Income tax expense (benefit)		1,209			(736	)		1,209			(1,327	)
Loss before cumulative effect of accounting change		(2,585	)		(1,125	)		(3,787	)		(2,033	)
Cumulative effect of accounting change, net of income tax benefit of $836		—			—			—			(1,280	)
Net loss	$	(2,585	)	$	(1,125	)	$	(3,787	)	$	(3,313	)
Basic and diluted share data
Loss before cumulative effect of accounting change per share	$	(.31	)	$	(.13	)	$	(.45	)	$	(.24	)
Net loss per share	$	(.31	)	$	(.13	)	$	(.45	)	$	(.38	)
Weighted average common stock		8,367			8,404			8,367			8,743
OPERATING RESULTS BY BUSINESS SEGMENT
Net revenues
Technology Solutions
Products	$	12,895		$	11,861		$	55,826		$	68,219
Services		8,510			5,865			34,949			22,349
		21,405			17,726			90,775			90,568
Recreational Products		7,969			7,850			44,804			44,639
Electronic Components		1,501			1,314			6,326			5,590
	$	30,875		$	26,890		$	141,905		$	140,797
Operating income (loss)
Technology Solutions	$	(866	)	$	(951	)	$	(2,135	)	$	(2,204	)
Recreational Products		(108	)		(382	)		1,321			819
Electronic Components		204			81			939			489
Corporate costs		(647	)		(645	)		(2,869	)		(2,664	)
		(1,417	)		(1,897	)		(2,744	)		(3,560	)
Interest, net		41			36			166			200
Income tax benefit (expense)		(1,209	)		736			(1,209	)		1,327
Cumulative effect of accounting change, net		—			—			—			(1,280	)
Net loss	$	(2,585	)	$	(1,125	)	$	(3,787	)	$	(3,313	)

Bell Industries, Inc.
Consolidated Condensed Balance Sheet
(In thousands)
(Unaudited)

December 31	2003		2002
ASSETS
Current assets:
Cash and cash equivalents	$	12,203	$	10,079
Accounts receivable, net		16,164		13,078
Income tax receivable				2,400
Inventories		11,286		12,349
Prepaid expenses and other		689		3,051
Total current assets		40,342		40,957
Fixed assets, net		4,206		5,436
Other assets		2,085		2,997
	$	46,633	$	49,390
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,882	$	10,687
Accrued payroll and liabilities		9,634		10,661
Total current liabilities		22,516		21,348
Long-term liabilities		2,520		2,496
Shareholders’ equity		21,597		25,546
	$	46,633	$	49,390