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Bell peels 60% off profits
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October 1, 1998: 9:38 a.m. ET
Electronics company to restructure; sells unit to Arrow for $185M cash
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NEW YORK (CNNfn) - Bell Industries Inc. said Thursday it will undergo a significant restructuring of its operations as continued weakness and margin pressures in the electronics industry will result in a 60-percent drop in its third-quarter operating income.
Bell, an El Segundo, Calif.-based distributor of products for the electronics and computer industries, also said it has agreed to sell its electronics distribution group to Arrow Electronics Inc. for $185 million cash.
Gordon Graham, Bell chief executive officer, said the company still is hammering out the details of its restructuring plan, noting that it "will include a significant reduction in Bell's corporate support structure."
Bell's remaining businesses will include computer and related value-added services, recreational products distribution, and specialty manufacturing.
Bell said its third-quarter operating income will fall 60 percent below the $12.3 million it earned in the year-ago period.
The company noted that it expects to record a "significant loss" from the sale of its electronics distribution group to Arrow. Bell expects the transaction to be completed by the end of the year.
Graham said a portion of the proceeds from the Arrow transaction will be used to pay Bell's debt obligations, taxes and related costs of closing the transaction.
"The electronics distribution business has far greater potential as part of Arrow than it has as part of Bell," Graham said.
Bell (BI) shares closed at 11-15/16, off 7/16 in Wednesday trading. Arrow (ARW) shares finished down 1/8 at 13-1/8. 
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