##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934.For the year ended December 31, 2008o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934.For the transition period
    from          to   Commission file number 1-11471
 BELL INDUSTRIES, INC.
 (Exact Name of Registrant as
    Specified in its Charter)
  California(State or other
    jurisdiction
    of incorporation or organization)

95-2039211(I.R.S. Employer
    Identification No.)8888 Keystone Crossing
    Suite 1700
    Indianapolis, Indiana(Address of principal
    executive offices)

46240(Zip
    Code)   Registrants telephone number, including area code:
 (317) 704-6000
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each class

Name of each exchange on which registeredN/A

N/A   Securities registered pursuant to Section 12(g) of the
    Act:
 Common Stock
    o þ
    o þ
    þ o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ (Do not check if a smaller
    reporting company)
  Rule 12b-2).
  o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 PART IItem 1.


Business


1Item 1A.


Risk Factors


6Item 1B.


Unresolved Staff Comments


12Item 2.


Properties


13Item 3.


Legal Proceedings


13Item 4.


Submission of Matters to a Vote of Security
    Holders


14PART IIItem 5.


Market for Registrants Common Equity,
    Related Shareholder Matters and Issuer Purchases of Equity
    Securities


15Item 6.


Selected Consolidated Financial Data


16Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


17Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


24Item 8.


Financial Statements and Supplementary Data


24Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


47Item 9A(T).


Controls and Procedures


47Item 9B.


Other Information


48PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


49Item 11.


Executive Compensation


52Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Shareholder Matters


55Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


56Item 14.


Principal Accountant Fees and Services


58PART IVItem 15.


Exhibits and Financial Statement Schedules


59SIGNATURES


60EXHIBIT INDEX


61EX-10.LEX-10.MEX-10.QEX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS




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##### Table of Contents



PART I  Item 1.
    Business  Overview
      Recent
    Events
  Sale of
    SkyTel Division
          Settlement
    Agreement
   1




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Amendments
    of Credit Facility
          Amendments
    to Convertible Note
  payment-in-kind
  payment-in-kind
 2




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Delisting
    from American Stock Exchange
    Reverse
    Stock Split
  Form 10-K,
  Bell
    Techlogix
    Project
    Based Services
   3




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##### Table of Contents



e-business
    Managed
    Services
      Technology
    Solutions
       4




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Recreational
    Products Group
        Company
    Information
  (317) 704-6000 (317) 575-9401.
  Environmental
    Matters
   5




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Availability
    of Reports and Other Information
  Form 10-K, Form 10-Q, Form 8-K,
  
    our corporate Code of Ethics for Directors, Officers and
    Employees, which qualifies as a code of ethics as
    defined by Item 406 of
    Regulation S-K
    of the Securities Exchange Act of 1934, as amended (the
    Exchange Act); and
    charters for our Audit Committee, Nominating Committee and
    Compensation Committee.    Item 1A.
    Risk
    Factors  and/or Form 10-K, Form 10-K,
  Risks
    Related to Our Growth Initiative
  Our
    growth initiatives may not achieve the intended benefits or may
    fail.
    We
    might not be able to implement our growth initiatives if we lose
    key management or technical personnel, on whose knowledge,
    leadership and technical expertise we rely.
   6




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##### Table of Contents



Risks
    Relating to Our Capital Structure
  Under
    the Amended Convertible Note, Newcastle has the ability to
    acquire in excess of a majority of our outstanding common stock,
    as well as the right to designate at least 50% of the members of
    our board of directors, which could give Newcastle control over
    the management of our business to the detriment of our other
    shareholders.
    Our
    ability to make payments on our debt will be contingent on our
    future operating performance, which will depend on a number of
    factors that are outside of our control.
      
    we may need to dedicate a substantial portion of our cash flows
    from operations to the payment of our indebtedness, reducing the
    funds available for future working capital requirements, capital
    expenditures, acquisitions or other general corporate
    requirements;
    a portion of our borrowings may be at variable rates of
    interest, which may result in higher interest expense in the
    event of increases in interest rates;
    we may be more vulnerable to a downturn in the industries in
    which we operate or a downturn in the economy in general;
    we may be limited in our flexibility to plan for, or react to,
    changes in our businesses and the industries in which we operate;
    we may be placed at a competitive disadvantage compared to our
    competitors that have less debt;
    we may be limited in our ability to react to unforeseen
    increases in certain costs and obligations arising in our
    existing or previously owned businesses, including
    environmental, legal, lease and tax liabilities;
    we may determine it to be necessary to dispose of certain assets
    or one or more of our businesses to reduce our debt; and
    our ability to borrow additional funds may be limited. 7




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We are
    subject to restrictive debt covenants pursuant to our
    indebtedness. These covenants may restrict our ability to
    finance our business and, if we do not comply with the covenants
    or otherwise default under them, we may not have the funds
    necessary to pay all amounts that could become due and the
    lenders could foreclose on substantially all of our
    assets.
    
    incur additional debt;
    create or incur liens;
    pay dividends or make other equity distributions to our
    shareholders;
    purchase or redeem share capital;
    make investments;
    sell assets;
    issue or sell share capital of certain subsidiaries;
    engage in transactions with affiliates;
    issue or become liable on a guarantee;
    voluntarily prepay, repurchase or redeem debt;
    create or acquire new subsidiaries; and
    effect a merger or consolidation of, or sell all or
    substantially all of our assets.  and/or
      Our
    common stock is not traded on a national securities
    exchange.
   8




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Risks
    Related to Our Operations
  We
    have a history of operating losses.
    Our
    previously owned businesses subject us to potential
    environmental liabilities, which could adversely affect our
    results of operations.
    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.
    Future
    changes in financial accounting standards or practices or other
    legislative changes could impact our business.
   9




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The
    cost of compliance or failure to comply with the Sarbanes-Oxley
    Act of 2002 may adversely affect our
    business.
      Risks
    Related to our Bell Techlogix Business
  We
    rely on a limited number of hardware and software vendors to
    supply us with products in our Bell Techlogix 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
    Bell Techlogix business has several large clients and the loss
    of one or more of these large clients may materially and
    adversely affect our business, financial condition and results
    of operations.
   10




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Our
    Bell Techlogix business could be adversely impacted by
    conditions affecting the information technology market,
    including the recent financial crisis and current economic
    conditions.
  and/or
  Many
    of our contracts can be terminated by our clients on short
    notice and in many cases without penalty. We also generally do
    not have exclusive arrangements with our clients or a minimum
    revenue commitment from our clients, which creates uncertainty
    about the volume of services we will provide and the amount of
    revenues we will generate from these clients.
    Risks
    Related to our Recreational Products Business
  The
    recent financial crisis and current economic conditions may
    adversely affect consumer spending and the financial condition
    of our dealers and may significantly harm our Recreational
    Products business.
      Our
    recreational products business is seasonal and is subject to
    fluctuations based upon climatic conditions.
   11




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Our
    recreational products business relies heavily upon vendors with
    which we have no long-term contracts.
    Risks
    Related to SkyTel
  It is
    possible that we may not receive all of the cash provided for in
    the Velocita Purchase Agreement and accordingly, we may have
    less cash to fund our remaining operations.
    Under
    the Velocita Purchase Agreement we will continue to be exposed
    to contingent liabilities relating to the SkyTel Business and
    the transaction, which could adversely affect our financial
    condition.
    Item 1B.
    Unresolved
    Staff Comments   12




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Item 2.
    Properties    Area in square feet (number of locations)LeasedBell Techlogix


104,000



(8
)Recreational Products Group


154,000



(3
)Discontinued Operations


34,000



(1
)Corporate


24,000



(1
)316,000



(13
)       Item 3.
    Legal
    Proceedings    i.e., Forms 499-A 499-Q); i.e.,
     13




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Item 4.
    Submission
    of Matters to a Vote of Security Holders    Proposal 1.
  FOR


VOTES WITHHELDDale A. Booth


6,149,722



1,912,278Clinton J. Coleman


6,147,709



1,914,291Michael R. Parks


6,151,757



1,910,243Mark E. Schwarz


5,768,210



2,293,790   Proposal 2.
  FOR

AGAINST

ABSTAIN5,253,857



2,261,058



547,085     Proposal 3.
  FOR

AGAINST

ABSTAIN5,675,922



1,837,461



548,617   2 3
  Proposal 4.
  FOR

AGAINST

ABSTAIN

BROKER NONVOTES1,574,656



1,926,336



22,664



4,538,344     Proposal 5.
  FOR

AGAINST

ABSTAIN6,218,947



1,454,590



388,463   Proposal 6.
  FOR

AGAINST

ABSTAIN5,606,329



2,415,497



40,174   Proposal 7.
  FOR

AGAINST

ABSTAIN5,089,769



2,579,774



392,457  14




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Shareholder Matters
    and Issuer Purchases of Equity Securities    Quarter EndedMar. 31


Jun. 30


Sep. 30


Dec. 31Year ended December 31, 2008High

$
18.80


$
15.40


$
4.20


$
1.40Low


12.00



1.80



1.20



0.25Close


15.40



3.20



1.40



0.25Year ended December 31, 2007High

$
102.20


$
103.40


$
75.00


$
48.40Low


72.00



69.00



34.60



16.40Close


99.00



72.20



42.00



18.00      15




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##### Table of Contents



Item 6.
    Selected
    Consolidated Financial Data    Year ended December 31,2008


2007


2006


2005


2004(Dollars in thousands, except per share data)Operating ResultsNet revenues

$
101,904


$
119,918


$
120,296


$
122,563


$
136,178Operating loss

$
(1,902
)

$
(11,059
)

$
(10,042
)

$
(2,924
)

$
(2,565
)Loss from continuing operations

$
(3,405
)

$
(9,111
)

$
(7,364
)

$
(2,068
)

$
(1,960
)(Loss) income from discontinued operations, net of tax

$
(962
)

$
(2,196
)

$
441


$
1,269


$
1,007(Loss) gain on sale of discontinued operations, net of tax

$
(500
)

$
(3,940
)

$
4,030


$



$
Net loss

$
(4,867
)

$
(15,247
)

$
(2,893
)

$
(799
)

$
(953
)Financial PositionWorking capital

$
12,305


$
9,983


$
11,543


$
18,571


$
19,085Total assets

$
27,260


$
62,019


$
43,114


$
44,353


$
45,189Long-term liabilities

$
14,903


$
14,387


$
3,622


$
4,518


$
5,025Shareholders equity (deficit)

$
(256
)

$
4,783


$
18,254


$
20,304


$
20,816Share and Per Share DataBASIC AND DILUTEDLoss from continuing operations

$
(7.87
)

$
(21.09
)

$
(17.19
)

$
(4.89
)

$
(4.68
)(Loss) income from discontinued operations, net of tax

$
(2.22
)

$
(5.08
)

$
1.03


$
3.00


$
2.41(Loss) gain on sale of discontinued operations, net of tax

$
(1.15
)

$
(9.09
)

$
9.41


$



$
Net loss

$
(11.24
)

$
(35.29
)

$
(6.75
)

$
(1.89
)

$
(2.27
)Weighted average common shares (in 000s)


433



432



428



423



419OTHER PER SHARE DATAShareholders equity (deficit)

$
(.59
)

$
11.07


$
42.61


$
47.97


$
49.65Market price  high

$
18.80


$
103.40


$
78.00


$
67.00


$
74.00Market price  low

$
0.25


$
16.40


$
45.00


$
39.60


$
47.20Financial RatiosCurrent ratio


2.0



1.2



1.5



2.0



2.0Long-term liabilities to total capitalization


101.7
%


75.0
%


16.6
%


18.2
%


19.4
%  16




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations      Critical
    Accounting Policies and Estimates
    Environmental
    Matters
    Recent
    Accounting Pronouncements
  EITF 06-4, EITF 06-4 EITF 06-4 EITF 06-4,
   17




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FAS 157-2,
 18




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##### Table of Contents



Results
    of Operations
      Year ended December 31,2008


2007Net revenues:Bell TechlogixProducts

$
36,364


$
42,633Services


26,525



32,670Total Bell Techlogix


62,889



75,303Recreational Products Group


39,015



44,615Total net revenues

$
101,904


$
119,918Operating income (loss):Bell Techlogix

$
1,010


$
(3,661
)Recreational Products Group


972



555Corporate costs


(3,884
)


(7,953
)Total operating loss


(1,902
)


(11,059
)Gain (loss) on sale of assets


(28
)


2,024Loss on extinguishment of debt


(1,053
)


Interest expense, net


(844
)


Benefit from (provision for) income taxes


422



(76
)Loss from continuing operations


(3,405
)


(9,111
)Discontinued operations:Loss from discontinued operations, net of tax


(962
)


(2,196
)Loss on sale of discontinued operations, net of tax


(500
)


(3,940
)Loss from discontinued operations, net of tax


(1,462
)


(6,136
)Net loss

$
(4,867
)

$
(15,247
)  19




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##### Table of Contents



Year ended December 31,2008


2007Net revenues:Products


74.0
%


72.8
%Services


26.0



27.2Total net revenues


100.0



100.0Costs and expenses:Cost of products sold


(60.5
)


(60.5
)Cost of service provided


(18.1
)


(18.5
)Selling, general and administrative


(23.3
)


(30.1
)Gain on sale of assets






1.7Loss on extinguishment of debt


(1.0
)


Interest expense, net


(0.8
)


Loss from continuing operations before income taxes


(3.8
)


(7.5
)Provision for (benefit from) income taxes


0.4



(0.1
)Loss from continuing operations


(3.4
)%


(7.6
)%The following summarizes other comparative operating results
    data:Cost of products sold as a percentage of products revenues


81.7
%


83.2
%Cost of services provided as a percentage of services revenues


69.6
%


68.1
%   Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
    Net
    revenues
    Gross
    profit
    Selling,
    general and administrative expenses
   20




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Interest
    and other, net
      Income
    taxes
    Discontinued
    operations
    Business
    Segment Results
    Bell
    Techlogix
   21




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##### Table of Contents



Recreational
    Products Group
      Corporate
    Changes
    in Financial Condition
  Liquidity
    and Capital Resources
    December 31,2008


2007Cash and cash equivalents

$
3,233


$
409Net working capital

$
12,305


$
9,983Current ratio


1.98



1.23Long-term liabilities to capitalization(1)


101.7
%


75.0
%Shareholders (deficit) equity per share

$
(0.59
)

$
11.07Days sales in receivables


50



54     (1)
    
    Capitalization represents the sum of long-term liabilities and
    shareholders equity. 22




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Secured
    Credit Facility with Wells Fargo Foothill
     23




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Convertible
    Note Held By Newcastle
  pay-in-kind and/or
      Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Item 8.
    Financial
    Statements and Supplementary Data 24




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INDEX TO
    FINANCIAL STATEMENTS
  Financial Statements:Report of Independent Registered Public
    Accounting Firm


26Consolidated Statements of Operations for the
    years ended December 31, 2008 and 2007


27Consolidated Balance Sheets at December 31,
    2008 and 2007


28Consolidated Statements of Shareholders
    Equity (Deficit) for the years ended December 31, 2008 and
    2007


29Consolidated Statements of Cash Flows for the
    years ended December 31, 2008 and 2007


30Notes to Consolidated Financial Statements


31Financial Statement Schedule:Schedule II  Valuation and
    Qualifying Accounts


47     25




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Crowe
    Horwath LLP
    26




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##### Table of Contents



BELL
    INDUSTRIES, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
  Year ended December 31,2008


2007Net revenues:Products

$
75,379


$
87,248Services


26,525



32,670Total net revenues


101,904



119,918Costs and expenses:Cost of products sold


61,606



72,553Cost of services provided


18,459



22,244Selling, general and administrative


23,741



36,180Interest expense, net


844



(Gain) loss on sale of assets


28



(2,024
)Loss on extinguishment of debt


1,053



Total costs and expenses


105,731



128,953Loss from continuing operations before provision for (benefit
    from) income taxes


(3,827
)


(9,035
)Provision for (benefit from) income taxes


(422
)


76Loss from continuing operations


(3,405
)


(9,111
)Discontinued operations:Loss from discontinued operations, net of tax


(962
)


(2,196
)Loss on sale of discontinued operations, net of tax


(500
)


(3,940
)Loss from discontinued operations, net of tax


(1,462
)


(6,136
)Net loss

$
(4,867
)

$
(15,247
)Share and per share dataBasic and diluted:Loss from continuing operations

$
(7.87
)

$
(21.09
)Loss from discontinued operations


(3.37
)


(14.20
)Net loss

$
(11.24
)

$
(35.29
)Weighted average common shares outstanding


433



432    27




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##### Table of Contents



BELL
    INDUSTRIES, INC.
  CONSOLIDATED
    BALANCE SHEETS
 (Dollars in thousands)
  December 31,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
3,233


$
409Accounts receivable, less allowance for doubtful accounts of
    $791 and $730, respectively


8,096



12,304Inventories, net


8,770



10,323Prepaid expenses and other current assets


1,819



1,982Notes receivable


3,000



Assets held for sale






27,814Total current assets


24,918



52,832Fixed assets, at cost:Leasehold improvements


915



1,167Computer equipment and software


8,247



8,163Furniture, fixtures and other


3,756



4,851Total fixed assets


12,918



14,181Less accumulated depreciation and amortization


(11,443
)


(12,225
)Fixed assets, net


1,475



1,956Assets held for sale






5,000Other assets


867



2,231Total assets

$
27,260


$
62,019LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Floor plan payables

$
291


$
1,064Revolving credit facility






4,775Accounts payable


7,189



10,438Accrued payroll


1,462



1,639Other accrued liabilities


3,671



5,849Liabilities associated with assets held for sale






19,084Total current liabilities


12,613



42,849Convertible note


10,840



8,969Other long-term liabilities


4,063



5,418Total liabilities


27,516



57,236Commitments and contingenciesShareholders equity (deficit):Preferred stock:Authorized  1,000,000 shares,
    outstanding  noneCommon stock:Authorized  10,000,000 and 1,750,000 shares,
    respectively; outstanding  433,416 and
    432,511 shares, respectively


35,495



34,983Accumulated deficit


(35,751
)


(30,536
)Accumulated other comprehensive income






336Total shareholders equity (deficit)


(256
)


4,783Total liabilities and shareholders equity (deficit)

$
27,260


$
62,019    28




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##### Table of Contents



BELL
    INDUSTRIES, INC.
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT)
 (Dollars
    in thousands)
  Accumulatedother


TotalCommon stock


Accumulated


comprehensive


shareholdersShares


Amount


deficit


income


equityBalance at January 1, 2007


429,661


$
33,400


$
(15,421
)

$
275


$
18,254Employee stock plans


2,850



123











123Stock-based compensation






310











310Employee benefit plan














61



61Adoption of FIN 48










132







132Beneficial conversion feature, net of tax






1,150











1,150Net loss










(15,247
)






(15,247
)Balance at December 31, 2007


432,511


$
34,983


$
(30,536
)

$
336


$
4,783Stock-based compensation






150











150Employee benefit plan














(336
)


(336
)Fractional shares issued in
    1-for-20
    reverse stock split


905Beneficial conversion feature, net of tax






362











362Adoption of EITF
    06-4, net of
    tax










(348
)






(348
)Net loss










(4,867
)






(4,867
)Balance at December 31, 2008


433,416


$
35,495


$
(35,751
)

$



$
(256
)    29




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##### Table of Contents



BELL
    INDUSTRIES, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  Year ended December 31,2008


2007Cash flows from operating activities:Net loss

$
(4,867
)

$
(15,247
)Loss from discontinued operations, net of tax


962



2,196Loss on sale of discontinued operations, net of tax


500



3,940Adjustments to reconcile net loss to net cash used in operating
    activities for continuing operations:Loss (gain) on sale of assets


28



(2,024
)Gain on termination of retiree medical plan


(336
)


Depreciation, amortization and accretion


1,636



2,041Stock-based compensation


47



208Non-cash interest expense


607



1,198Provision for losses on accounts receivable, net


348



2,734Provision for losses on inventory


(199
)


172Loss on extinguishment of debt


1,053



Changes in assets and liabilities, net of acquisitions and
    disposals:Accounts receivable


3,860



1,776Inventories


1,752



(948
)Accounts payable


(3,249
)


128Accrued payroll


(177
)


(286
)Accrued liabilities and other


(3,186
)


534Net cash used in operating activities for continuing operations


(1,221
)


(3,578
)Net cash provided by (used in) operating activities for
    discontinued operations


(1,470
)


9,960Net cash provided by (used in) operating activities


(2,691
)


6,382Cash flows from investing activities:Purchases of fixed assets and other


(842
)


(1,430
)Proceeds from life insurance policy


488



Proceeds from sale of assets


11



3,026Net cash provided by (used in) investing activities for
    continuing operations


(343
)


1,596Net cash provided by (used in) investing activities for
    discontinued operations


12,000



(26,043
)Net cash provided by (used in) investing activities


11,657



(24,447
)Cash flows from financing activities:Net (repayments) borrowings under revolving credit facility


(4,775
)


4,775Proceeds from issuance of convertible note






10,000Debt acquisition costs


(130
)


(823
)Net (payments) proceeds of floor plan payables


(773
)


851Employee stock plans






122Principal payments on capital leases


(129
)


(88
)Net cash provided by (used in) financing activities for
    continuing operations


(5,807
)


14,837Net cash provided by (used in) financing activities for
    discontinued operations


(335
)


Net cash provided by (used in) financing activities


(6,142
)


14,837Net increase (decrease) in cash and cash equivalents


2,824



(3,228
)Cash and cash equivalents at beginning of period


409



3,637Cash and cash equivalents at end of period

$
3,233


$
409Supplemental cash flow information:Interest paid

$
363


$
742Income taxes paid

$
12


$
54Capital lease obligations incurred (including discontinued
    operations)

$
263


$
1,727    30




---



##### Table of Contents



BELL
    INDUSTRIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1 
    Summary
    of Accounting Policies  Principles of consolidation
  Cash and cash equivalents
  Revenue recognition and receivables
  Bell
    Techlogix
  No. 00-21 00-21.
  No. 99-19,
  Recreational
    Products Group (RPG)
     31




---



##### Table of Contents



Inventories first-in,
  Shipping and handling costs
  Deferred catalog and advertising costs
  Vendor rebates
  Deferred financing costs
  Fixed assets, depreciation and amortization
  Long-lived assets
  Income taxes
 32




---



##### Table of Contents



Environmental matters
  Retiree medical program
  Life insurance EITF 06-4,
  Comprehensive income (loss)
  Stock-based compensation
  Per share data
  2008


2007Basic weighted average shares outstanding


433



432Potentially dilutive stock options and convertible debt


141



133Anti-dilutive due to net loss in period


(141
)


(133
)Diluted weighted average shares outstanding


433



432       Use of estimates
  New Pronouncements EITF 06-4, EITF 06-4
 33




---



##### Table of Contents



EITF 06-4 EITF 06-4,
    FAS 157-2,
  Note 2 
    Sale of
    Assets    Note 3 
    Acquisition
    and Sale of SkyTel Division   34




---



##### Table of Contents



Accounts receivable, net

$
14,101Inventories, net


1,406Prepaid expenses


3,544Assets held for sale


13,690Fixed assets


15,010Intangible assets


3,524Accrued exit costs


(5,096
)Asset retirement obligation


(3,071
)Deferred revenue


(7,444
)Other


(1,070
)Net assets acquired

$
34,594     Trademarks

$
1,227Patents


963Licenses


914Customer relationships


420Total intangible assets

$
3,524   No. 95-3,
       35




---



##### Table of Contents



December 31,2008


2007Net revenues

$
35,088


$
83,619Loss before income taxes


(1,462
)


(6,136
)Provision for income taxes






Loss from discontinued operations, net of tax

$
(1,462
)

$
(6,136
)       Note 4 
    Floor
    Plan Arrangements    Note 5 
    Stock
    Repurchase Program    Note 6 
    Stock
    Plans       36




---



##### Table of Contents



WeightedWeighted


averageaverage


remainingexercise


contractual term


AggregateShares


price


(in years)


intrinsic valueOutstanding at December 31, 2006


96,650



85.80Granted


13,750



90.00Exercised


(2,850
)


42.80Canceled or expired


(52,900
)


100.60Outstanding at December 31, 2007


54,650


$
74.80



6.4


$
Granted






Exercised






Canceled or expired


(27,900
)


60.38Outstanding at December 31, 2008


26,750


$
89.84



4.1


$
Exercisable at December 31, 2008


20,300


$
83.31



3.4


$
     Weightedaveragegrant dateShares


fair valueNon-vested at December 31, 2007


28,040


$
22.45Granted






Vested


(6,350
)


24.53Canceled


(15,240
)


21.09Non-vested at December 31, 2008


6,450


$
21.90      37




---



##### Table of Contents



Note 7 
    Debt  pay-in-kind
  Revolving
    Credit Facility
           38




---



##### Table of Contents



Convertible
    Note
    No. 00-27, No. 98-5 (EITF 00-27.)
  payment-in-kind EITF 00-27.
   39




---



##### Table of Contents



Convertible note at December 31, 2007

$
8,969Beneficial conversion feature


(36
)Accretion of beneficial conversion feature


44Accrued interest


405Extinguishment of debt


(9,382
)Amended Convertible note at June 13, 2008


11,137Beneficial conversion feature


(569
)Accretion of beneficial conversion feature


24Accrued interest


248Convertible note at December 31, 2008

$
10,840     Note 8 
    Income
    Taxes    2008


2007CurrentFederal

$
(396
)

$
49State


(26
)


27$
(422
)

$
76     2008


2007Federal statutory tax rate


(34.0
)%


(34.0
)%State taxes, net of federal benefit


(0.5
)


0.2Change in valuation allowance against net deferred tax assets


33.6



33.8Nondeductible items, FIN 48 and other, net


(6.8
)


0.5Effective tax rate


7.7
%


0.5
%  40




---



##### Table of Contents



December 31,2008


2007Deferred tax assets:Discontinued operations

$



$
2,787Net operating loss carryforwards


11,551



6,360Accrued environmental and legal


1,186



1,335Employee benefit accruals


163



120Accrued deal costs


358



Stock-based and deferred compensation


514



560Deferred rent


266



318Intangibles


151



302Receivables allowance


283



453Inventory reserves


258



351Other


117



8114,847



12,667Deferred tax liabilities:Prepaid items


(203
)


(159
)Depreciation and amortization


(8
)


13Other


(143
)


(374
)Net deferred tax balance before valuation allowance


14,493



12,147Valuation allowance


(14,493
)


(12,147
)Net deferred tax balance after valuation allowance

$



$
         Balance as of January 1, 2008

$
396Tax positions related to current year:Additions


Tax positions related to prior years:Settlements


(396
)Additions


Balance as of December 31, 2008

$
    41




---



##### Table of Contents



Note 9 
    Employee
    Benefit and Deferred Compensation Plans      Note 10 
    Retiree
    Medical Program    Note 11 
    Environmental
    Matters       42




---



##### Table of Contents



Note 12 
    Litigation    Other litigation:
  Note 13 
    Commitments
    and Contingencies      December 312008Computer equipment and software

$
254Furniture, fixtures and other


9Less accumulated amortization


(94
)$
169    43




---



##### Table of Contents



Operatingleases2009

$
2,4032010


2,0482011


1,8412012


1,3032013


319$
7,914     Capitalleases2009

$
1362010


432011


3Net minimum lease payments


182Less: Amount representing interest(1)


(48
)Present value of net minimum lease payments(2)

$
134     (1)
    
    Amount necessary to reduce net minimum lease payments to present
    value calculated at the Companys incremental borrowing
    rate at the inception of the leases.(2)
    
    Included in current other accrued liabilities and other long
    term accrued liabilities in the amounts of $119,000 and $15,000,
    respectively, in the Consolidated Balance Sheet at
    December 31, 2008.  Note 14 
    Related
    Party Transactions    Note 15 
    Business
    Segment and Related Information   44




---



##### Table of Contents



Year endedDecember 31,2008


2007Net revenues:Bell TechlogixProducts

$
36,364


$
42,633Services


26,525



32,67062,889



75,303Recreational Products Group


39,015



44,615$
101,904


$
119,918Operating income (loss):Bell Techlogix

$
1,010


$
(3,661
)Recreational Products Group


972



555Corporate


(3,884
)


(7,953
)(1,902
)


(11,059
)Gain (loss) on sale of assets


(28
)


2,024Loss on extinguishment of debt


(1,053
)


Interest expense, net


(844
)


Loss from continuing operations before income taxes

$
(3,827
)

$
(9,035
)Depreciation and amortization:Bell Techlogix

$
1,315


$
1,559Recreational Products Group


116



262Corporate


205



220$
1,636


$
2,041Total assets:Bell Techlogix

$
6,494


$
10,448Recreational Products Group


11,184



13,557Corporate


5,646



5,200Discontinued operations


3,936



32,814$
27,260


$
62,019Capital expenditures:Bell Techlogix

$
758


$
1,294Recreational Products Group


22



132Corporate


62



34Discontinued operations


1,000



4,471$
1,842


$
5,931   Note 16 
    Subsequent
    Events   45




---



##### Table of Contents



46




---



##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS(In thousands) Balance at


Charge to





Balancebeginning


costs and





at end ofDescription

of period


expenses


Deductions


periodYear ended December 31, 2008:Allowance for doubtful accounts

$
730


$
434


$
373


$
791Inventory reserves


675



(199
)






476Deferred tax valuation allowance


12,147



2,346







14,493$
13,552


$
2,581


$
373


$
15,760Year ended December 31, 2007:Allowance for doubtful accounts

$
547


$
2,734


$
2,551


$
730Inventory reserves


567



236



128



675Deferred tax valuation allowance


6,331



5,816







12,147$
7,445


$
8,786


$
2,679


$
13,552   Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A(T).
    Controls
    and Procedures  Rules 13a-15(e) 15d-15(e)
  Rules 13a-15(f) 15d-15(f)
 47




---



##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f)
    
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with accounting principles generally accepted in the
    United States of America, and that receipts and expenditures of
    the Company are being made only in accordance with
    authorizations of management and directors of the
    Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    the Companys assets that could have a material effect on
    the financial statements.    Internal
    Control  Integrated Framework Internal Control  Integrated Framework
    Item 9B.
    Other
    Information       48




---



##### Table of Contents



PART III  Item 10.
    Director,
    Executive Officers and Corporate Governance  Information
    Regarding Directors
    Mark E. Schwarz, property-and-casualty
  Michael R. Parks,
  Clinton J. Coleman
  Dale A. Booth
     49




---



##### Table of Contents



Information
    Regarding Executive Officers
    Name

Age


Positions with our CompanyClinton J. Coleman


31


Interim Chief Executive OfficerKevin J. Thimjon


42


President and Chief Financial Officer     Kevin J. Thimjon
  Section 16(a)
    Reporting Compliance
    Code of
    Ethics
  Regulation S-K
  
    honest and ethical conduct, including the ethical handling of
    actual or apparent conflicts of interest between personal and
    professional relationships;
    full, fair, accurate, timely and understandable disclosure in
    our SEC reports and other public communications;
    compliance with applicable governmental laws, rules and
    regulations;
    prompt internal reporting of violations of the Code of Ethics to
    appropriate persons identified in the code; and
    accountability for adherence to the Code of Ethics.  Form 8-K Form 10-K www.bellind.com.
 50




---



##### Table of Contents



Board
    Committees
    Audit Committee.
  
    Mr. Booth qualifies as an audit committee financial
    expert, as defined by the SEC; and
    all members of the audit committee (i) are
    independent under the AMEX independence standards,
    (ii) other than Mr. Schwarz, meet the criteria for
    independence as set forth in the Exchange Act, (iii) have
    not participated in the preparation of our financial statements
    at any time during the past three years and (iv) are
    financially sophisticated as such term is defined in the
    American Stock Exchange Company Guide. Mr. Schwarz is not
    independent as a result of his affiliation with Newcastle.  www.bellind.com
  
    oversee our auditing, accounting and control functions,
    including having primary responsibility for our financial
    reporting process;
    monitor the integrity of our financial statements to ensure the
    balance, transparency and integrity of published financial
    information;
    monitor our outside auditors independence, qualifications and
    performance;
    monitor our compliance with legal and regulatory
    requirements; and
    monitor the effectiveness of our internal controls and risk
    management system.    Compensation Committee.
  
    all members of the compensation committee qualify as
    independent under the AMEX independence standards;
    all members of the compensation committee, other than
    Mr. Schwarz, qualify as non-employee directors
    under
    Rule 16b-3
    of the Exchange Act; and
    all members of the compensation committee qualify as
    outside directors under Section 162(m) of the
    Internal Revenue Code of 1986, as amended (the Code).  www.bellind.com.
 51




---



##### Table of Contents



Nominating Committee. www.bellind.com.
  Item 11.
    Executive
    Compensation  EXECUTIVE
    COMPENSATION
  Form 10-K Form 10-K
  Summary
    Compensation Table
    All OtherName and










Option


Compensation


TotalPrinciple Position

Year


Salary ($)


Bonus ($)(3)


Awards ($)(4)


($)(5)


($)Clinton J. Coleman


2008



250,000











12,000



262,000Interim Chief Executive Officer(1)


2007



116,346











11,000



127,346Kevin J. Thimjon


2008



265,000



85,000







2,080



352,080President and Chief Financial Officer(2)


2007



201,923







69,479



129



271,531     (1)
    
    Mr. Coleman was appointed Interim Chief Executive Officer
    as of July 13, 2007 and is paid at an annual rate of
    $250,000.(2)
    
    Mr. Thimjon was appointed as our Chief Financial Officer as
    of January 8, 2007 and promoted to President and Chief
    Financial Officer on February 14, 2008.(3)
    
    Represents a discretionary bonus paid to Mr. Thimjon in
    connection with his performance in 2007, which bonus was subject
    to the closing of our sale of the SkyTel division. The bonus was
    paid to Mr. Thimjon in 2008 after the closing of our
    transaction with Velocita.(4)
    
    Represents the dollar amount of equity compensation cost
    recognized for financial reporting purposes with respect to
    stock option awards in 2008, computed in accordance with
    SFAS No. 123 (revised 2004), Share-Based
    Payment (SFAS 123R), excluding the impact of
    estimated forfeitures for service-based vesting conditions. The
    methodology and assumptions used in the valuation of stock
    option awards are included in Note 6 to our consolidated
    financial statements included in this Annual Report on
    Form 10-K. 52




---



##### Table of Contents



(5)
    
    For Mr. Coleman, the amounts in this column represent the
    director fees paid to Mr. Coleman during 2008 and 2007,
    respectively. For Mr. Thimjon, these amounts in this column
    represent our matching contributions under the Bell
    Industries Employees Savings and Profit Sharing Plan
    during 2008 and 2007, respectively.  Narrative
    Disclosure To Summary Compensation Table
  Employment
    Agreements or Arrangements
  Clinton J. Coleman.
  Kevin J. Thimjon.
  Material
    Terms of Bonus Awards
      Material
    Terms of Option Awards
    Additional
    Compensation Disclosure
  Savings
    and Profit Sharing Plan
    Change of
    Control Arrangements
   53




---



##### Table of Contents



Indemnification
    Agreements
    Outstanding
    Equity Awards at Fiscal Year End Table
    Option AwardsNumber of Securities


Number of SecuritiesUnderlying Unexercised


Underlying Unexercised


Option


OptionName

Options (#) Exercisable


Options (#) Unexercisable


Exercise Price ($)


Expiration DateClinton J. Coleman














Kevin J. Thimjon(1)


1,000



1,500



76.60



1/8/17500



750



80.00



1/8/17500



750



120.00



1/8/17500



750



160.00



1/8/17     (1)
    
    Each of these option grants were made as non-qualified option
    grants. The grants were not issued under any shareholder
    approved option or equity incentive plan; however, they were
    issued as inducement grants under the applicable rules of the
    AMEX. Each of these grants becomes exercisable in increments of
    an additional 20% of the total number of shares underlying such
    options on January 8, 2009, January 8, 2010 and
    January 8, 2011.  DIRECTOR
    COMPENSATION
   54




---



##### Table of Contents



Director
    Compensation Table
    Fees Earned orName

Paid in Cash ($)


Total ($)Mark E. Schwarz(1)


24,000



24,000L. James Lawson(2)


12,000



12,000Michael R. Parks(1)


12,000



12,000Dale A. Booth(3)


4,000



4,000     (1)
    
    At December 31, 2008, 1,250 stock options were outstanding
    for each of Messrs. Schwarz and Parks.(2)
    
    Mr. Lawson served on the board until December 4, 2008.(3)
    
    Mr. Booth has served on the board since September 5,
    2008.  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters  SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    Number of Shares


PercentBeneficial Owner(1)

Beneficially Owned


of ClassDirectors and Executive OfficersKevin J. Thimjon(2)


2,500



*Mark E. Schwarz(3)


2,890,515



88.2
%Michael R. Parks(4)


1,750



*Clinton J. Coleman






Dale A. Booth






All Directors and Executive Officers as a Group
    (5 Persons)(5)


2,894,765



88.2
%5% ShareholdersRoyce & Associates, LLC(6)


38,160



8.8
%Berlin Financial, Ltd.(7)


22,693



5.2
%Newcastle Capital Management, L.P.(8)


2,888,765



88.1
%     *
    
    Less than 1% 55




---



##### Table of Contents



(1)
    
    Each of our directors and executive officers may be reached at
    8888 Keystone Crossing, Suite 1700, Indianapolis, Indiana 46240.(2)
    
    Includes 2,500 shares issuable pursuant to currently
    exercisable stock options.(3)
    
    Includes 1,250 shares issuable pursuant to currently
    exercisable stock options. Includes 42,524 shares held by
    Newcastle Partners, L.P. for which Mr. Schwarz disclaims
    beneficial ownership. Includes 2,846,241 shares issuable
    pursuant to the Amended Convertible Note for which
    Mr. Schwarz disclaims beneficial ownership.(4)
    
    Includes 1,250 shares issuable pursuant to currently
    exercisable stock options.(5)
    
    Includes 5,000 shares issuable pursuant to currently
    exercisable stock options and 2,846,241 shares issuable
    pursuant to the Amended Convertible Note.(6)
    
    Based on Schedule 13G/A filed on January 22, 2008 by
    Royce & Associates, LLC, an investment advisor, whose
    address is 1414 Avenue of the Americas, New York, New York 10019.(7)
    
    Based on Schedule 13G filed on July 17, 2007 by Berlin
    Financial, Ltd., an investment advisor, whose address is 1325
    Carnegie Ave. Cleveland, OH 44115.(8)
    
    Based on Schedule 13D/A filed on March 17, 2009 by
    Newcastle Capital Management, L.P. and its affiliates, whose
    address is 200 Crescent Court, Suite 1400, Dallas, Texas
    75201.  Equity
    Compensation Plan Information
    Number of SecuritiesRemaining Available forNumber of Securities





Future Issuanceto be Issued upon


Weighted-Average


Under EquityExercise of


Exercise Price of


Compensation PlansOutstanding Options,


Outstanding Options,


(Excluding SecuritiesWarrants, and Rights


Warrants, and Rights


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by shareholders


12,750


$
77.16



42,500Equity compensation plans not approved by shareholders


14,000
(1)

$
97.09



Total


26,750


$
87.59



42,500     (1)
    
    Shares issued under equity compensation plans not approved by
    shareholders include (i) options granted under our 2001
    Stock Option Plan to purchase 7,750 shares of our common
    stock; and (ii) options to purchase 6,250 shares
    granted to Mr. Thimjon under his employment agreement, as
    an inducement for him to join the Company. See Item 11
    Executive Compensation of this Annual Report on
    Form 10-K.  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS
  Review of
    Related Person Transactions
     56




---



##### Table of Contents



Related
    Person Transactions
  Regulation S-K Regulation S-K
  Related
    Party Transactions in 2007
    Related
    Party Transactions in 2008
     57




---



##### Table of Contents



Director
    Independence
    Item 14.
    Principal
    Accountant Fees and Services    Audit
    Fees
    AuditAudit


Related


Tax


All Other


TotalFirm

Year


Fees ($)


Fees ($)


Fees ($)


Fees ($)


($)Crowe Horwath(1)


2008



250,000



35,250



18,252







303,5022007



309,000















309,000BKD(2)


2008



















2007



232,225







5,000







237,225PwC(3)


2008



















2007







180,000











180,000Grobstein, Horwath & Company LLP(4)


2008



















2007







12,500











12,500     (1)
    
    For the years ended December 31, 2008 and 2007, Crowe
    Horwath billed us an aggregate of $205,000 and $309,000,
    respectively, for professional services in connection with the
    audit of our consolidated financial statements. In addition,
    Crowe Horwath billed us an aggregate of $45,000 for professional
    services in connection with the reviews of our consolidated
    interim financial statements included in our Quarterly Report on
    Form 10-Q
    for the periods ended March 31, 2008, June 30, 2008
    and September 30, 2008. For the year ended
    December 31, 2008, Crowe Horwath billed us an aggregate of
    $15,000 for professional services rendered for audit-related
    services related to our 401(k) plan and $20,250 for professional
    services related to the audit of discontinued operations and the
    Amended Convertible note. Crowe Horwath also billed us $18,252
    related to professional services rendered for the review of our
    federal and state income tax returns during the year ended
    December 31, 2008.(2)
    
    For the year ended December 31, 2007, BKD billed us $79,725
    for professional services in connection with reviews of our
    consolidated interim financial statements included in our
    Quarterly Report on
    Form 10-Q
    for the periods ended March 31, 2007, June 30, 2007
    and September 30, 2007 and $152,500 for their audit of the 58




---



##### Table of Contents



financial statements required in connection with our acquisition
    of SkyTel in 2007. BKD also billed us $5,000 related to
    professional services rendered for review of tax matters related
    to the acquisition of SkyTel in 2007.(3)
    
    For the year ended December 31, 2007, PwC billed us an
    aggregate of $180,000 for professional services rendered in
    connection with due diligence and advisory services related to
    mergers and acquisitions.(4)
    
    For the year ended December 31, 2007, Grobstein,
    Horwath & Company LLP billed us an aggregate of
    $12,500 for professional services rendered for audit-related
    services related to our 401(k) plan.  Policy
    for Pre-Approval of Independent Auditor Services
  case-by-case
 PART IV  Item 15.
    Exhibits
    and Financial Statement Schedule  (a)1.
    Financial Statements:
  Form 10-K.
  2.Financial Statement Schedule:
  Form 10-K.
  Form 10-K.
 59




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##### Table of Contents



SIGNATURES    Bell Industries, Inc.
  By:
    /s/  Clinton
    J. Coleman         Signature

Title/s/  Mark
    E. SchwarzMark
    E. Schwarz

Director and Chairman of the Board/s/  Clinton
    J. ColemanClinton
    J. Coleman

Interim Chief Executive Officer
    (Principal Executive Officer)
    Director/s/  Kevin
    J. ThimjonKevin
    J. Thimjon

President and 
    Chief Financial Officer
    (Principal Financial and Accounting Officer)/s/  Dale
    A. BoothDale
    A. Booth

Director/s/  Michael
    R. ParksMichael
    R. Parks

Director  60




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EXHIBIT INDEX  ExhibitNumber

Description2
.

Agreement and Plan of Merger, dated as of November 26,
    1996, among the Registrant, ME Acquisitions, Inc., and Milgray
    Electronics, Inc. (incorporated by reference to Exhibit 2.1
    of the Registrants Current Report on
    Form 8-K
    dated January 7, 1997)3
.a.

Restated Articles of Incorporation (incorporated by reference to
    Exhibit 3.1 of the Registrants
    Form 8-B
    dated March 22, 1995, as amended)3
.b

Restated By-laws (incorporated by reference to Exhibit 3.2
    of the Registrants
    Form 8-B
    dated March 22, 1995, as amended)4
.

Specimen of Registrants Common Stock certificates
    (incorporated by reference to Exhibit 5 of Amendment Number
    1 of the Registrants
    Form 8-B
    filed January 15, 1980)10
.a.

Form of Indemnity Agreement between the Registrant and its
    executive officers and directors (incorporated by reference to
    Exhibit 10.10 of the Registrants
    Form 8-B
    dated March 22, 1995, as amended)10
.b

Agreement for Wholesale Financing, dated as of May 11,
    2001, between the Registrant and Deutsche Financial Services
    Corporation (incorporated by reference to Exhibit 10.1 of
    the Registrants Quarterly Report on
    Form 10-Q
    dated June 30, 2001)10
.c.

Amended and Restated Agreement for Wholesale Financing, dated as
    of July 18, 2002, between the Registrant and IBM Credit
    Corporation (incorporated by reference to Exhibit 10.r of
    the Registrants Annual Report on
    Form 10-K
    dated December 31, 2004)10
.d.

Amendment to Agreement for Wholesale Financing, dated as of
    December 12, 2003, between the Registrant and GE Commercial
    Distribution Finance Corporation (formerly known as Deutsche
    Financial Corporation) (incorporated by reference to
    Exhibit 10.v of the Registrants Annual Report on
    Form 10-K
    dated December 31, 2004)10
.e.

Letter Agreement, dated as of May 11, 2004, between the
    Registrant and IBM Credit LLC (formerly IBM Credit Corporation)
    (incorporated by reference to Exhibit 10.w of the
    Registrants Annual Report on
    Form 10-K
    dated December 31, 2004)10
.f.

Asset Purchase Agreement, dated as of November 10, 2006,
    between SkyTel Corp. and the Registrant (incorporated by
    reference to Exhibit 10.1 of the Registrants Current
    Report on
    Form 8-K
    dated November 10, 2006)10
.g.

Amendment No. 1 to the Asset Purchase Agreement, dated as
    of November 16, 2006, between SkyTel Corp. and the
    Registrant (incorporated by reference to Exhibit 10.1 of
    the Registrants Current Report on
    Form 8-K
    dated November 16, 2006)10
.h.

Credit Agreement, dated as of January 31, 2007, between the
    Registrant and Wells Fargo Foothill, Inc. (incorporated by
    reference to Exhibit 10.1 of the Registrants Current
    Report on
    Form 8-K
    dated January 31, 2007)10
.i.

Amendment Number Two to Credit Agreement, Consent and Waiver,
    dated August 13, 2007, between the Registrant and Wells
    Fargo Foothill, Inc. (incorporated by reference to
    Exhibit 10.1 of the Registrants Current Report on
    Form 8-K
    dated August 13, 2007)10
.j.

Amendment Number Three to Credit Agreement, dated April 11,
    2008, between the Registrant and Wells Fargo Foothill, Inc.
    (incorporated by reference to Exhibit 10.1 of the
    Registrants Current Report on
    Form 8-K
    dated April 11, 2008)10
.k.

Amendment Number Four to Credit Agreement, Consent and Partial
    Release, dated June 13, 2008, between the Registrant and
    Wells Fargo Foothill, Inc. (incorporated by reference to
    Exhibit 10.2 of the Registrants Current Report on
    Form 8-K
    dated June 13, 2008)10
.l.

Amendment Number Five to Credit Agreement and Joinder Agreement,
    dated March 12, 2009, between the Registrant and Wells
    Fargo Foothill, Inc.10
.m.

Amendment Number Six to Credit Agreement, dated March 25,
    2009, between the Registrant and Wells Fargo Foothill, Inc.10
.n.

$10,000,000 Amended and Restated Convertible Promissory Note,
    dated March 12, 2007, issued by the Registrant to Newcastle
    Partners, L.P. (incorporated by reference to Exhibit 4.1 of
    the Registrants Current Report on
    Form 8-K
    dated March 12, 2007) 61




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ExhibitNumber

Description10
.o.

$11,137,321 Second Amended and Restated Convertible Promissory
    Note, dated June 13, 2008, issued by the Registrant to
    Newcastle Partners, L.P. (incorporated by reference to
    Exhibit 4.1 of the Registrants Current Report on
    Form 8-K
    dated June 13, 2008)10
.p.

Waiver and Amendment Agreement, dated June 13, 2008,
    between the Registrant and Newcastle Partners, L.P.
    (incorporated by reference to Exhibit 10.3 of the
    Registrants Current Report on
    Form 8-K
    dated June 13, 2008)10
.q.

Amendment Number One to the Second Amended and Restated
    Convertible Promissory Note, dated March 25, 2009, between
    the Registrant and Newcastle Partners, L.P.10
.r.

Purchase Agreement, dated as of January 31, 2007, between
    the Registrant and Newcastle Partners, L.P. (incorporated by
    reference to Exhibit 4.1 of the Registrants Current
    Report on
    Form 8-K
    dated January 31, 2007)10
.s.

Security Agreement, dated as of January 31, 2007, between
    the Registrant and Wells Fargo Foothill, Inc. (incorporated by
    reference to Exhibit 10.2 of the Registrants Current
    Report on
    Form 8-K
    dated January 31, 2007)10
.t.

Security Agreement, dated as of March 12, 2007, between the
    Registrant and Newcastle Partners, L.P. (incorporated by
    reference to Exhibit 10.1 of the Registrants Current
    Report on
    Form 8-K
    dated March 12, 2007)10
.u.

Registration Rights Agreement, dated as of January 31,
    2007, between the Registrant and Newcastle Partners, L.P.
    (incorporated by reference to Exhibit 4.3 of the
    Registrants Current Report on
    Form 8-K
    dated January 31, 2007)10
.v.

Stock Purchase Agreement, dated June 15, 2007, among Sprint
    Nextel Corporation, each of the stockholders of New York MDS,
    Inc. and the Stockholders Representative (incorporated by
    reference to Exhibit 10.1 of the Registrants Current
    Report on
    Form 8-K
    dated June 15, 2007)10
.w.

Stock Purchase Agreement, dated June 15, 2007, among Sprint
    Nextel Corporation, each of the stockholders of Atlanta MDS Co.,
    Inc. and the Stockholders Representative (incorporated by
    reference to Exhibit 10.2 of the Registrants Current
    Report on
    Form 8-K
    dated June 15, 2007)10
.x.

Asset Purchase Agreement, dated February 14, 2008, between
    the Registrant and SkyGuard, LLC (incorporated by reference to
    Exhibit 10.1 of the Registrants Current Report on
    Form 8-K
    dated February 20, 2008)10
.y.

Asset Purchase Agreement, dated March 30, 2008, between the
    Registrant and Velocita Wireless, LLC (incorporated by reference
    to Exhibit 10.1 of the Registrants Current Report on
    Form 8-K
    dated April 3, 2008)10
.z.

Amendment No. 1 to Asset Purchase Agreement, dated as of
    June 13, 2008, between the Registrant and Velocita Wireless
    LLC (incorporated by reference to Exhibit 10.1 of the
    Registrants Current Report on
    Form 8-K
    dated June 13, 2008)10
.aa.*

1997 Deferred Compensation Plan dated August 27, 1997
    (incorporated by reference to Exhibit 4.1 of the
    Registrants
    Form S-8
    dated August 28, 1997)10
.bb.*

Bell Industries, Inc. 2001 Stock Option Plan (incorporated by
    reference to Exhibit 99 of the Registrants Quarterly
    Report on
    Form 10-Q
    dated September 30, 2001)10
.cc.*

Employment Letter, dated as of January 5, 2007, between the
    Registrant and Kevin Thimjon (incorporated by reference to
    Exhibit 10.1 of the Registrants Current Report on
    Form 8-K
    dated January 5, 2007)10
.dd.*

First Amendment to Employment Letter, effective
    February 15, 2008, between the Registrant and Kevin Thimjon
    (incorporated by reference to Exhibit 10.2 of the
    Registrants Current Report on
    Form 8-K
    dated February 20, 2008)10
.ee.*

Bell Industries, Inc. 2007 Stock Incentive Plan, as amended
    (incorporated by reference to Exhibit 10.1 of the
    Registrants Current Report on
    Form 8-K
    dated October 16, 2008)21
.1

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm. 62




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ExhibitNumber

Description31
.1

Certification of Clinton J. Coleman, Chief Executive Officer of
    the 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 Kevin J. Thimjon, President and Chief Financial
    Officer of the 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 Clinton J. Coleman, Chief Executive Officer of
    the 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 Kevin J. Thimjon, President and Chief Financial
    Officer of the Registrant, furnished pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.     *
    
    The indicated exhibit is a management contract, compensatory
    plan or arrangement required to be filed by Item 601 of
    Regulation S-K. 63