SAN JOSE, Calif., Oct. 3 /PRNewswire/ --
Bell Microproducts Inc. (Nasdaq: BELM) today announced that preliminary sales
for the third quarter ended September 30, 2001 are expected to be
approximately $490 million, with a net loss from operations of approximately
$3.3 million, or $0.20 per share. Expected sales for the quarter were up 7% as
compared to second quarter 2001 sales of $456 million. The expected operating
loss per share for the third quarter compares with a loss per share of
$0.10 in the second quarter of 2001. The Company plans to report final results
on October 17, 2001.
    Commenting on the third quarter performance, Don Bell, President and Chief
Executive Officer of Bell Microproducts said, "We are pleased that we grew our
sales despite the worsening slump in the technology markets. Sales increased
sequentially in the U.S., Canada and Europe and were down slightly in
Latin America. The third quarter is normally a back-end loaded quarter with
expectations of strong sales and profits in September. This year, September
was an abnormally slow month. As a result, although sales increased, sales
were lower than planned in all geographies. In addition, gross profit margin
was lower during the quarter due to a more competitive market environment, and
an unfavorable shift in product mix. Bell Microproducts' sales of
semiconductor products declined while disk drive sales increased. As a result,
gross profit margins before special charges decreased to 8.0% as compared to
9.0% in the second quarter of 2001."
    In order to reduce costs in this challenging economic environment,
Bell Microproducts has undertaken several additional restructuring measures.
These measures include severance charges for headcount reduction, the
discontinuance and writeoff of the investment in the i2 supply chain
management program, as well as inventory and receivable write-offs, and other
miscellaneous charges. Bell Microproducts expects to record a predominantly
non-cash after tax restructuring charge of approximately $10 million in the
third quarter, or $0.61 per share, related to the implementation of the
restructuring program.
    Commenting on the Company's strategic positioning, Mr. Bell said, "We are
pleased that our storage systems sales increased sequentially in a declining
market. Storage solutions are our primary focus, and we believe that this
segment of the IT market will lead the way as the economic downturn passes and
as capital budgets are restored. Further impetus should arise from an expected
groundswell of disaster recovery requirements."

    About Bell Microproducts
    Bell Microproducts is an international, value-added provider of a wide
range of high-technology products, solutions, and services to the industrial
and commercial markets. The company's offering includes semiconductors,
computer platforms, peripherals, and storage products of various types
including desktop, high-end computer and storage subsystems, fibre channel
connectivity products, RAID, NAS and SAN storage systems and back-up products.
Bell Microproducts is an industry-recognized specialist in storage products
and is one of the world's largest storage-centric value-added distributors.
    The company's products are available at any level of integration, from
components to subsystem assemblies and fully-integrated, tested and certified
system solutions. The company adds value with a broad range of services
including testing, software loading, kitting, mass storage system integration,
and computer system integration. Trained and certified technical personnel
complete each of these processes at Bell Microproducts' ISO 9002 facilities.
Bell Microproducts markets and distributes more than 125 brand name product
lines, as well as its own BellStor and Rorke Data storage and Trademark(R)
computer brands, to original equipment manufacturers (OEMs), contract
electronic manufacturing services (EMS) customers, value-added resellers
(VARs) and system integrators in the Americas and Europe. More information can
be found in the company's SEC filings, or by visiting the Bell Microproducts
Web site at http://www.bellmicro.com.

    Safe Harbor Statement
    This release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements, which reflect the Company's current views of future events and
financial performance, involve known and unknown risks and uncertainties which
could cause actual results or facts to differ materially from such statements
for a variety of reasons including, but not limited to:  the ability to
successfully integrate the operations of recent acquisitions, industry
conditions, changes in product supply, pricing, and customer demand,
competition, other vagaries in the computer and electronic components markets,
changes in relationships with key suppliers, foreign currency fluctuations and
the other risks described from time to time in the Company's reports to the
Securities and Exchange Commission (including the company's Annual Report on
Form 10-K). Investors should take such risks into account when making
investment decisions. Shareholders and other readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date on which they are made. The company undertakes no obligation to
update publicly or revise any forward-looking statements.

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SOURCE  Bell Microproducts, Inc.








 
Web site:  http://www.bellmicro.com
 

 
CONTACT: Eli Sayegh, Director of Investor Relations of Bell
Microproducts Inc., +1-408-451-1685, or ir@bellmicro.com