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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

         [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2000
                                       OR

         [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 For the transition period from ____________ to
                                  ____________.

                         COMMISSION FILE NUMBER: 0-21528

                             BELL MICROPRODUCTS INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                      <C>
            CALIFORNIA                                         94-3057566
    (State or other jurisdiction                             (I.R.S. Employer
 of incorporation or organization)                        Identification Number)
</TABLE>

              1941 RINGWOOD AVENUE, SAN JOSE, CALIFORNIA 95131-1721
           (Address of principal executive office, including zip code)

       Registrant's telephone number, including area code: (408) 451-9400

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None.

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                          Common Stock, $.01 par value

         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  X        No
                                 -----        -----
         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

         The aggregate market value of the voting stock held by non-affiliates
of the registrant, as of March 7, 2001, was approximately $205,715,000 based
upon the last sale price reported for such date on the Nasdaq National Market.
For purposes of this disclosure, shares of Common Stock held by officers and
directors of the Registrant have been excluded because such persons may be
deemed to be affiliates. This determination is not necessarily conclusive.

  The number of shares of Registrant's Common Stock outstanding as of March 7,
                              2001 was 15,866,973.


                      DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 10, 2001 are incorporated by reference into Part
III of this Form 10-K

         Index of Exhibits appears on Pages 41 through 43.

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                                     PART I

ITEM 1.  BUSINESS

GENERAL

         Founded in 1987, Bell Microproducts Inc., together with its
subsidiaries, is a leading value-added distributor of storage products and
systems, semiconductors and computer products and peripherals. We market and
distribute our products at various levels of integration, from raw components to
fully integrated, tested and certified systems. We carry over 150 brand name
product lines as well as our own proprietary BellStor and Rorke Data storage
products, Markvision memory modules and TradeMark computer products. Across our
product lines, we emphasize our ability to combine our extensive product
portfolio with comprehensive value-added services.

         We offer components that include disk drives, semiconductors and other
storage products and custom-configured computer products. Our products also
include value-added services such as system design, integration, installation,
maintenance and other consulting services combined with a variety of storage and
computer hardware and software products. In addition, we offer network attached
storage (NAS), storage area network (SAN) and other storage systems, computer
platforms, tape drives and libraries and related software. Our selection of
products and technologies, together with our independence, allows us to offer
the best available hardware, software and service solutions for each customer.
Customers can purchase our components as stand-alone products or in combination
with certain value-added services.

         We have made forward-looking statements in this Form 10-K and in the
documents that are incorporated by reference into this Form 10-K, within the
meaning of Section 27A under the Securities Act of 1933 and Section 21E under
the Securities Exchange Act of 1934. These forward-looking statements are
subject to risks and uncertainties and include information concerning our
possible or assumed future results of operation. Also, when we use words such as
"believe," "expect," "anticipate" or similar expressions, we are making
forward-looking statements. Our actual results and financial condition could
differ materially, and adversely, from what is anticipated in these
forward-looking statements as a result of certain factors, including those set
forth in "Risk Factors" and elsewhere in this Form 10-K. We believe it is
important to communicate our expectations to our investors. However, there may
be events in the future that we are not able to predict accurately or over which
we have no control. The risk factors described in this Form 10-K, as well as any
other cautionary language in this Form 10-K, provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements.

INDUSTRY

         The storage, semiconductor and computer industries have experienced
significant growth over the past decade, due to rapid growth in Internet usage
and e-commerce; enterprise applications such as enterprise resource planning and
data mining; server, desktop and laptop computers; and wireless communications
as well as a variety of emerging consumer products and applications.

         Traditionally, storage, semiconductor and computer products have been
sold through both direct and indirect distribution channels. The use of indirect
distribution channels is growing rapidly as manufacturers focus on core
activities such as product design, development and marketing and begin to divest
or outsource non-core functions. The growth of the indirect market reflects the
need for manufacturers to increasingly use distributors, particularly for
servicing OEMs, VARs, CEMs and system integrators. Customers are also driving
the trend toward indirect distribution due to the value-added services that
distributors often provide, particularly in the storage market. The rapid growth
of storage requirements and the need for sophisticated networked storage systems
such


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as NAS and SAN have increased the importance of independent storage
solutions providers.

         Network Attached Storage. NAS appliances are advanced storage systems
that attach directly to a local area network. A NAS appliance can be thought of
as a thin file server with built-in storage. Similar to general-purpose servers,
NAS appliances include a central processing unit, an operating system and
internal hard disk drive storage.

         Storage Area Networks. A SAN is an architecture that directly connects
multiple independent servers and storage subsystems through a network dedicated
to storage. A SAN consists of a variety of heterogeneous networking equipment
such as switches, hubs and routers; storage products such as disk subsystems,
tape libraries and optical drives; and storage management software. A SAN is
often connected using a protocol known as Fibre Channel.

         Both the NAS and SAN markets are projected to grow rapidly over the
next few years. The complexity of sophisticated data storage solutions such as
NAS and SAN combined with a shortage of qualified information technology
personnel often requires companies to outsource the research, design,
implementation and support of their networked storage solutions. Accordingly,
significant growth in SAN and NAS is expected to be through indirect
distribution channels.

         In recent years, a growing number of manufacturers began to reduce the
number of distributors they use. Distributors themselves are also choosing to
consolidate because of the competitive advantages that arise from expanded
product offerings and economies of scale. The rapidly changing nature of the
storage, semiconductor and computer industries has required distributors to
significantly expand both their customer base and product and service offerings,
to compete effectively. To be successful within these areas, we believe
distributors must emphasize time-to-market and total cost reductions and focus
on markets in which they have advantages in service, flexibility and component
content. Distributors also need to distinguish themselves through a combination
of value-added services such as consulting, design, implementation and
maintenance as well as more knowledgeable service and technical support.

OUR STRATEGY

         Our goal is to expand our leadership position as a distributor of
storage products and systems and to become one of the leading distributors of
semiconductor components and computer products and peripherals. We intend to
achieve this goal by leveraging our strengths and implementing the following
strategies:

         Continue Our Focus on Storage Solutions. We plan to continue to take
advantage of the market opportunities in the storage industry by maintaining our
strategic focus on our storage solutions. For example, we have devoted
significant resources to expanding our marketing efforts, deepening the
expertise of our sales force and offering an extensive range of
technologically-advanced products. We believe that our ability to offer
value-added services will be critical for implementing storage solutions and
leveraging the opportunity in the data storage market given the increasing
complexity of storage solutions and the shift toward indirect distribution.

         Expand our Storage and Semiconductor Product Lines. We believe that our
ability to offer customers an extensive line of leading storage products across
technologies and manufacturers will continue to be a strong competitive
advantage for us, particularly as it relates to SAN and NAS solutions. Our
selection of products and technologies, together with our independence, allows
us to reliably deliver the optimal package of appropriate hardware, software and
services for each project. We also believe it is important to expand our
semiconductor offerings to address customer demand. We will continue to expand
our product lines through strategic acquisitions and internal growth.


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         Expand Geographically. We intend to deepen our presence in the United
States, and expand our coverage in the major markets of Canada, Latin America
and Europe through targeted internal growth and strategic acquisitions.
Increasingly, multinational companies, including our manufacturers and
customers, are requiring products and solutions that are able to address local
operational and reporting requirements, but which are also heterogeneous and
interoperable among countries, regions and offices. As we expand our global
presence, we believe that we will be better able to address the demands of
multinational customers, gain more access to multinational manufacturers and
leverage our expertise.

         Align with Industry Leaders. We intend to leverage our position as a
leading storage solutions provider to create new strategic relationships with
manufacturers. We believe that distribution channels will continue to
consolidate and leading manufacturers will align with those distributors that
are best able to offer value-added services and access new customers. We believe
being aligned with leading manufacturers will allow us to identify innovative
products, exchange critical information, and gain access to new technologies and
create cross-marketing opportunities. We have entered into strategic
relationships with a number of manufacturers, including IBM and Sun
Microsystems.

         Expand Electronic Commerce Initiatives. We intend to expand the scope
of our electronic commerce, supply chain management and information deployment
programs. We believe that our electronic commerce initiatives will expand our
customer base, establish greater penetration with existing customers and
strengthen our position as a preferred distributor of storage, semiconductor and
computer products. We also believe that these programs will further establish
our brand name, lower our operating costs and streamline our inventory
management process.

PRODUCTS AND SERVICES

         We market and distribute more than 150 brand name product lines, as
well as our own BellStor and Rorke Data storage products, Markvision memory
modules and TradeMark computers and servers. We offer the following products as
discrete components or as part of our solutions offering.

Storage Products and Related Software

         Our storage products include network attached storage products, storage
area network products, Fibre Channel networking products and systems, tape
libraries and disk drives, as well as storage-related software products. Among
the storage products we offer are our own proprietary BellStor and Rorke Data
storage products, that complement the other products and technologies we
provide.

Semiconductor and Other Components

          We distribute a variety of semiconductor components, including memory
components and modules, logic devices, microprocessors, microcontrollers, power
management components, analog and mixed signal circuits, application-specific
integrated circuits (ASICs), graphics and video devices, communications and
specialty components.

Computer Products and Software

         Our computer products include a variety of standard and
custom-configured motherboards, monitors, keyboards, chassis, scanners, personal
computers and servers, board level products and network interface controller
(NIC) cards. Among the computer products we offer are our own proprietary
Markvision memory modules and TradeMark computer products that complement the
other products and technologies we provide.


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Value-Added Services

         We offer our customers a variety of value-added services as described
below. Many of our value-added services are product focused, while others
provide our customers assistance with a variety of product management
activities.

         Storage System Consulting Services. We work with customers to determine
data storage needs to make decisions regarding their storage strategies and to
design storage systems to address these needs. Our consulting services draw from
our core competencies in enterprise storage integration solutions. We perform
tasks such as storage audit or feasibility studies, supplement specialist
elements of a pre-defined project or provide full project management and
implementation.

         NAS and SAN Solutions. We offer a complete range of professional
services including design and consultation, installation, training and on-site
service programs relating to NAS and SAN solutions. We have established a
dedicated enterprise storage systems team that can address the challenges
associated with enterprise storage systems. Our service programs also offer
customers Fibre Channel interoperability and fully integrated turnkey storage
solutions. For example, we integrate SANs with Fibre Channel-based technology
including switches, bridges, archive libraries and network software.

         Storage Subsystem. We provide standard and custom subsystem products to
our customers. We integrate standard products for our BellStor and Rorke Data
brand storage products. We also configure custom products to meet the needs of
customers that cannot be served by industry-standard product offerings.

         Other Product Services. We provide value-added services to a full range
of semiconductor, storage and computer products, including semiconductor device
programming, tape and reeling, special labeling, disk drive image duplication,
firmware modification, software downloading and hardware modification.

         Flat Panel Integration. We offer integrated flat panel displays for use
in custom designs or with OEM systems.

         Application Support Services. Our application support services provide
design support and product recommendations, training programs, maintenance
options and testing, technical advice and prompt incident detection and
resolution.

         Supply Chain Management. We provide a variety of materials-management
solutions, including e-procurement services, Internet-enabled, real-time pricing
and delivery quotations, electronic data interface programs, just-in-time
inventory programs, bonded inventories, on-site consignment inventory and
kitting. We are implementing an end-to-end supply chain management program for
manufacturers and customers. This new program is designed to help us improve
inventory turns, service levels and sales productivity through the
implementation of demand planning and supply chain planning systems. We are also
working with several companies in order to provide software applications and
other resources to OEMs and contract electronic manufacturers for
materials-management logistic activities.

SALES AND MARKETING

         Our customer base primarily consists of OEMs, VARs, system integrators,
contract electronic manufacturers, storage solution customers and retailers. For
customers primarily seeking our solution offerings, our sales and marketing
efforts often involve proactive efforts of our sales people and field
application engineers. Sales and technical personnel focusing on these customers
tend to spend time at customers' facilities assessing the customers' needs,
developing and providing solutions as well as providing proof of concept
supported by our technical capabilities and experience. Our component offering
marketing efforts involve supply chain management


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programs, consignment and bonded inventory programs and end-of-life programs.
Sales of our component offerings are principally driven by product breadth and
depth, pricing and on-time availability.

         We also believe that our relationships with manufacturers provide us
with significant opportunities to increase our sales and customer base. We work
closely with many manufacturers to develop strategies to penetrate both targeted
markets and customers. In many cases, our sales presentations to customers are a
joint effort with manufacturers' sales representatives.

         We recently began implementing an e-commerce program that we believe
will enhance our sales and marketing efforts by:

     o   providing our customers with detailed product information, including
         availability and pricing;

     o   providing customers additional channels to purchase our products;

     o   reducing time and expenditures involved in customers' product
         procurement activities; and

     o   providing our customers with resource planning tools to more accurately
         manage their product requirements.

COMPETITION

         In the distribution of storage, semiconductor components and computer
products, we generally compete for customer relationships with numerous local,
regional and national authorized and unauthorized distributors. We also compete
for customer relationships with manufacturers, including some of our
manufacturers and customers. Consistent with our sales and marketing efforts, we
tend to view our competition, whether arising from the direct or indirect
distribution channel, on a customer-category basis. We believe that our most
significant competition for customers seeking both products and value-added
services arises from Arrow Electronics, Avnet and Nu-Horizons. We believe that
our most significant competition for customers seeking products apart from
value-added services arises from Ingram Micro and Tech Data.

         We believe that competition for customers is based on product line
breadth, depth and availability, competitive pricing, customer service,
technical expertise, value-added services and e-commerce capabilities. We
believe that we compete favorably with respect to each of these factors. We
directly compete with numerous distributors, many of which possess superior
brand recognition and financial resources. In the area of storage products and
solutions, however, we believe that none of our competitors offers the full
range of storage products and solutions that we offer.

         We compete with other distributors for relationships with
manufacturers. In recent years, a growing number of manufacturers began to
reduce the number of distributors they use. We believe this consolidation is the
result of a manufacturer's need to streamline its supply chain and establish
stronger and more expansive relationships with a smaller number of distributors.
Since we believe that competition for customers is often based upon product line
breadth, depth and availability, the loss of any significant manufacturer could
harm our competitive position.

         Although we believe that we are currently well positioned within our
target markets, the storage and computer product markets are rapidly evolving
and highly competitive. As technologies continue to change, we expect that
competition will increase in the future. We believe direct competition from
manufacturers is likely to increase if, as expected, the data storage industry
continues to consolidate. This consolidation would probably result in fewer
manufacturers with greater resources to devote to internal sales and marketing
efforts. In addition, manufacturers have established and will probably continue
to establish cooperative relationships with other manufacturers and data storage
solution providers. These cooperative relationships are often intended to enable
manufacturers to offer comprehensive storage solutions that compete with those
we offer.

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RECENT ACQUISITIONS

         In connection with our solution offerings, we have completed a number
of strategic acquisitions. Through these acquisitions, we gained expertise in
storage solutions and greater access to international markets.

         Our acquisition of Ideal Hardware Limited, a leading UK-based,
storage-centric distributor offering value-added programs and services,
significantly expands our international presence. In addition, Ideal's strategy
of providing value-added programs and services with storage hardware and
software products mirrors our initiative for the Americas.

         Our acquisition of Rorke Data, Inc., a company based in Minnesota, with
subsidiaries in the Netherlands and Italy, has expanded our storage solutions
capabilities by allowing us to immediately offer our customers enhanced
engineering, technical support, installation, and maintenance services for
complex storage solutions. Rorke's capabilities allow us to provide leading-edge
Fibre Channel and SAN solutions to vertical markets such as digital audio/video,
publishing and medical imaging throughout the United States and Europe.

         Our acquisition of Future Tech International, Inc., a Miami-based
company, significantly increased our presence in Latin America and the
Caribbean. Future Tech primarily distributes storage, semiconductor and computer
product components.

EMPLOYEES

         At December 31, 2000, we had a total of 1,374 employees, including 96
in general corporate functions, 543 in administrative functions and 735 in sales
and marketing functions. Of our total employees, 551 are located at our
facilities outside of the United States, including 420 in the United Kingdom.
None of our employees are represented by a labor union. We have not experienced
any work stoppages and consider our relations with our employees to be good.
Many of our current key personnel have substantial experience in our industry
and would be difficult to replace. The labor market in which we operate is
highly competitive and, as a result, we may not be able to retain and recruit
key personnel. If we fail to recruit, retain or adequately train key personnel,
we will experience difficulty in implementing our strategy, which could
negatively affect our business, financial condition and stock price.

RISK FACTORS

         You should consider carefully the risks described below together with
all of the other information included in this Form 10-K. The risks and
uncertainties described below and elsewhere in this Form 10-K are not the only
ones facing us. If any of the following risks actually occur, our business,
financial condition or results of operations would likely suffer. In that case,
the trading price of our common stock could fall, and you may lose all or part
of your investment.

IF WE CANNOT EFFECTIVELY MANAGE OUR GROWTH, OUR BUSINESS MAY SUFFER.

         Our growth in recent years has placed, and continues to place, a
significant strain on our management, financial and operational resources. This
growth also increases demand on our professional and technical services, sales,
information systems, marketing and customer service and support functions. We
intend to continue to pursue our growth strategy through increasing our sales
efforts for existing and new solution and component offerings, increasing
geographical sales coverage and strategic acquisitions. Continued growth will
require increased personnel, expanded information systems and additional
financial and administrative control procedures. We may not be successful in our
efforts to manage growth. If we do not properly manage our planned growth, our
financial condition and common stock price may suffer.

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WE ARE DEPENDENT ON MANUFACTURERS AND WOULD SUFFER IF WE LOST ANY SIGNIFICANT
MANUFACTURER OR FACED A PRODUCT SHORTAGE.

         We are highly dependent on manufacturers for substantially all of the
products that we sell. Three manufacturers provided products that represented
47% and 41% of our sales in 1999 and 2000. The loss of any significant
manufacturer could harm our financial condition and results of operations. In
the past, significant manufacturers have terminated distribution arrangements
with us, and significant distribution relationships could be terminated in the
future. Our distribution agreements are cancelable on short notice. Our reliance
on manufacturers leaves us vulnerable to having an inadequate supply of required
products, price increases, late deliveries and poor product quality. From time
to time we, like other distributors in our industry, experience supply shortages
and are unable to purchase our desired volume of products. If we are unable to
enter into and maintain satisfactory distribution arrangements with leading
manufacturers and an adequate supply of products, our sales could suffer
considerably.

THE CYCLICAL NATURE OF THE STORAGE, SEMICONDUCTOR AND COMPUTER INDUSTRIES COULD
HURT OUR OPERATING RESULTS.

         The storage, semiconductor and computer industries have historically
been characterized by fluctuations in product demand and supply, and,
consequently, severe fluctuations in price. Over the past several years, the
data storage and computer products industries have experienced significant unit
volume growth that has, in turn, increased demand for many of the products we
distribute. In the event of a shortage of our products, our operating results
may depend on the amount of product allocated to us by manufacturers and the
timely receipt of such product.

         If the industries in which we operate experience a significant downturn
in demand or excess production levels, we may experience an excess supply of the
products we sell, and our gross margins may suffer. Although our distribution
agreements with manufacturers provide us with limited price protection and
certain rights of return, rapid increases in supply levels caused by a shortfall
in demand or excess production could hurt our sales or gross margins. In
addition, many of our customers in the storage and computer products industries
are subject to the risks of significant shifts in demand and severe price
pressures by their customers, which may increase the risk that we may not be
able to collect accounts receivable owed by some of our customers. If we are
unable to collect our accounts receivable, our results of operations and
financial condition may suffer.

THERE COULD BE FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS.

         Our quarterly operating results have in the past and could in the
future fluctuate substantially. Our operating expense levels are based in part
on expectations of future sales. If sales or gross margins in a particular
quarter do not meet expectations, operating results could suffer. Factors
affecting our quarterly operating results include:

     o   the loss of key manufacturers or customers;

     o   price competition;

     o   problems incurred in managing inventories;

     o   a change in the product mix sold by us;

     o   customer demand, including the timing of purchase orders from
         significant customers;

     o   changing economic conditions in North and South America and Europe;

     o   our ability to manage credit risk and collect accounts receivable;

     o   our management of foreign currency exposure;

     o   availability of product from manufacturers; and

     o   the timing of expenditures in anticipation of increased sales.

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         Due in part to manufacturer rebate programs, a larger portion of our
gross profit has historically been reflected in the third month of each quarter
than in each of the first two months of each quarter. In addition, we often
experience increased sales volume near the end of each quarter, which also
causes us to report higher gross profit levels in the third month of each
quarter than in each of the first two months of each quarter. If we do not
receive products from manufacturers or complete sales in a timely manner at the
end of a quarter, or if rebate programs and marketing development funds are
discontinued, our operating results in a particular quarter could suffer. In
various periods in the past, our operating results have been affected by all of
these factors. In particular, price fluctuations in the disk drive and
semiconductor industries have affected our gross margins in recent periods.

OUR FINANCIAL OBLIGATIONS MAY LIMIT OUR ABILITY TO OPERATE OUR BUSINESS.

         We have raised significant funding through debt, some of which bears
interest at fixed rates and some at variable rates. We are required to meet
financial tests on a quarterly basis and comply with other covenants customary
in secured financings. If we do not meet debt covenant requirements, our lenders
may demand immediate repayment of amounts outstanding. Changes in interest rates
may have a significant effect on our operating results. Furthermore, we are
dependent on credit from our manufacturers to fund our inventory purchases. If
our debt burden increases to high levels, our manufacturers may restrict our
credit. Our cash requirements will depend on numerous factors, including the
rate of growth of our sales, the timing and levels of products purchased,
payment terms and credit limits from manufacturers, the timing and level of our
accounts receivable collections and our ability to manage our business
profitably.

         Our ability to satisfy our existing obligations will depend upon our
future operating performance, which may be affected by prevailing economic
conditions and financial, business and other factors described in this Form
10-K, many of which are beyond our control. If we are unable to service our debt
obligations, we may be forced to adopt one or more strategies that may include
actions such as reducing or delaying capital expenditures or otherwise slowing
our growth strategies, selling assets, restructuring or refinancing our
indebtedness or seeking additional equity capital. We do not know whether any of
these actions could be effected on satisfactory terms, if at all. Any equity
financing may be on terms that are dilutive or potentially dilutive. If we are
unable to successfully manage our debt burden, our financial condition would
suffer considerably.

WE ARE SUBJECT TO THE RISKS OF INTERNATIONAL OPERATIONS, WHICH MAY HURT OUR
PROFITABILITY.

         We believe that international sales will represent a substantial and
increasing portion of our net sales for the foreseeable future. Our
international operations are subject to a number of risks, including:

     o   fluctuations in currency exchange rates;

     o   difficulty in collecting accounts receivable due to longer payment
         cycles common in foreign markets;

     o   political and economic instability;

     o   difficulty in staffing and managing foreign operations;

     o   import and export license requirements, tariffs, taxes and other trade
         barriers; and

     o   the burden of complying with a wide variety of foreign laws, treaties
         and technical standards and changes in those regulations.

         The majority of our revenues and expenditures in our foreign
subsidiaries are transacted in the local currency of the country where the
subsidiary operates. For each of our foreign subsidiaries, the local currency is
also the functional currency. Fluctuations in currency exchange rates could
cause our products to become relatively more expensive to customers in a
particular country, leading to a reduction in sales or profitability in that
country. To the extent our revenues and expenses are denominated in currencies
other than U.S. dollars, gains and losses on the conversion to U.S. dollars may
contribute to fluctuations in our operating results. In addition, we have
experienced foreign currency remeasurement gains and losses because a
significant amount of our foreign

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subsidiaries' remeasurable net assets and liabilities are denominated in U.S.
dollars rather than the subsidiaries' functional currency. As we continue to
expand globally and the amount of our foreign subsidiaries' U.S. dollar or
non-functional currency denominated remeasurable net asset or liability position
increases, our potential for fluctuations in foreign currency remeasurement
gains and losses will increase. We have in the past, and expect in the future,
to enter into hedging arrangements and enter into local currency borrowing
facilities to reduce this exposure, but these arrangements may not be adequate.
Furthermore, payment cycles for international customers are typically longer
than those for customers in the United States. Unpredictable sales cycles could
cause us to fail to meet or exceed the expectations of security analysts and
investors for any given period. Further, foreign markets may not continue to
develop. If we are unable to manage these risks effectively, our operating
results and financial position could be harmed.

OUR GROWTH PLANS DEPEND IN PART ON OUR ABILITY TO SUCCESSFULLY COMPLETE AND
INTEGRATE ACQUISITIONS.

         An important part of our growth has been the acquisition of
complementary businesses. We may choose to continue this strategy in the future.
Our identification of suitable acquisition candidates involves risks inherent in
assessing the value, strengths, weaknesses, overall risks and profitability of
acquisition candidates. We may be unable to identify suitable acquisition
candidates. If we do not make suitable acquisitions, we may find it more
difficult to realize our growth objectives.

         The process of integrating new businesses into our operations,
including our recently completed acquisitions, poses numerous risks, including
an inability to assimilate acquired operations, information systems, internal
control systems and products; diversion of management's attention; difficulties
and uncertainties in transitioning the business relationships from the acquired
entity to us; and the loss of key employees of acquired companies. In addition,
future acquisitions by us may be dilutive to our shareholders, cause us to incur
additional indebtedness and large one-time expenses or create goodwill or other
intangible assets that could result in significant amortization expense. If we
spend significant funds or incur additional debt, our ability to obtain
necessary financing may decline and we may be more vulnerable to economic
downturns and competitive pressures. We cannot guarantee that we will be able to
successfully complete any acquisitions, that we will be able to finance
acquisitions or that we will realize any anticipated benefits from acquisitions
that we complete.

WE COULD SUFFER A SURPLUS OF OBSOLETE OR UNMARKETABLE INVENTORY.

         Franchise distribution agreements often provide us with limited
inventory management protection, including price protection and inventory return
rights. While we purchase a substantial amount of inventory under franchise
distribution agreements, we also purchase significant amounts of inventory
without the limited protection that franchise distribution agreements often
provide. Without the benefit of effective price protection or inventory return
rights for our inventory purchases, we bear the sole risk of obsolescence and
price fluctuations, which could harm our operating results. Even when our
franchise distribution agreements provide us with price protection and inventory
return rights, they may be ineffective when the products in our inventory become
obsolete or unmarketable, or when the manufacturers of those products have
financial difficulty. In those events, we may be unable to return the products
to the manufacturer or to collect refunds for those products in a timely manner,
or at all.

WE MUST BE ABLE TO MANAGE RAPID TECHNOLOGICAL CHANGE.

         Many of the products we sell are used in the manufacture or
configuration of a wide variety of electronic products. These products are
characterized by rapid technological change, short product life cycles and
intense competition and pricing pressures. Our continued success depends upon
our ability to continue to identify new, emerging technologies, develop
technological expertise in these technologies and continually develop and
maintain relationships with industry leaders. If we are unsuccessful in our
efforts, our results of operations and financial condition may suffer.



                                       9
<PAGE>   11

ITEM 2.  PROPERTIES

         In the Americas, we maintain 33 sales offices in a variety of
locations, including in the U.S., Canada, Brazil and Chile. In Europe, we
maintain sales offices in England, the Netherlands and Italy. In addition to our
sales offices, we operate seven integration and service facilities and 10
warehouses. We currently operate three significant management and distribution
centers. Our corporate headquarters is located in San Jose, California, where we
currently lease office space and distribution facilities with approximately
160,000 square feet of space. Leases for portions of these facilities begin to
expire between June and December 2002. In Chessington, England, we previously
leased, and have acquired as of October 31, 2000, two facilities with
approximately 127,000 square feet that serve as our center for directing and
managing our operations in the United Kingdom and Europe. In Miami, Florida, we
currently lease a facility with approximately 65,000 square feet that serves as
our center for directing and managing our business in Latin America. We have
options to extend the lease for this facility through early 2008. In Montgomery,
Alabama, we currently lease a facility with approximately 53,000 square feet
that serves as our new corporate technology and data center and our primary
customer call center. The lease on this facility expires in October 2007. We
believe that our existing facilities are adequate for our current operational
needs. However, in the future we may be required to expand our facilities,
whether by lease or acquisition, to keep pace with our growing business.

ITEM 3.  LEGAL PROCEEDINGS

         We are subject to legal proceedings and claims that arise in the normal
course of business. We believe that the ultimate resolution of such matters will
not have a material adverse affect on our financial position or results of
operations. However, such litigation could in the future result in substantial
costs and diversion of management resources. Such litigation could also result
in payment of monetary damages or prohibitions against use of technologies, and
could harm our business, financial condition and results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


                                       10
<PAGE>   12


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "BELM." The following table sets forth for the periods
indicated the high and low sale prices of the Common Stock as reported by
Nasdaq. Sale prices have been restated to reflect the 3-for-2 stock split the
Company declared on July 31, 2000.

<TABLE>
<CAPTION>
                                                                                 HIGH           LOW
                                                                               ---------     ---------
<S>                                                                             <C>          <C>
1999
    First quarter............................................................   $ 6.96       $  3.67
    Second quarter ..........................................................     5.50          3.79
    Third quarter ...........................................................     6.87          4.37
    Fourth quarter ..........................................................     7.33          4.29
2000
    First quarter............................................................   $12.67        $ 5.92
    Second quarter...........................................................    12.67          7.25
    Third quarter............................................................    34.00         12.00
    Fourth quarter ..........................................................    31.88         11.56
2001
    First quarter (through March 7, 2001)....................................   $24.25        $13.19
</TABLE>


         On March 7, 2001, the last sale price of the Common Stock as reported
by Nasdaq was $14.19 per share.

         As of March 7, 2001, there were approximately 368 holders of record of
the Common Stock (not including shares held in street name).

         To date, the Company has paid no cash dividends to its shareholders.
The Company has no plans to pay cash dividends in the near future. The Company's
line of credit agreement prohibits the Company's payment of dividends or other
distributions on any of its shares except dividends payable in the Company's
capital stock.


                                       11
<PAGE>   13


ITEM 6.  SELECTED FINANCIAL DATA

         The selected financial data of the Company set forth below should be
read in conjunction with the consolidated financial statements of the Company,
including the notes thereto, and Management's Discussion and Analysis included
elsewhere herein.

<TABLE>
<CAPTION>
                                                                      (IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)

                                                                                   YEAR ENDED DECEMBER 31,
                                                       -----------------------------------------------------------------------------
STATEMENT OF INCOME DATA:                                2000(1)           1999(2)           1998(3)          1997           1996
                                                       ----------         ----------         --------       --------       --------
<S>                                                  <C>                <C>                <C>            <C>            <C>
Net sales                                              $1,804,102         $1,058,275         $575,330       $460,516       $391,240
Cost of sales                                           1,638,802            967,491          511,476        406,301        345,189
                                                       ----------         ----------         --------       --------       --------
Gross profit                                              165,300             90,784           63,854         54,215         46,051
Selling, general and administrative expense               121,088             69,507           46,070         40,942         36,175
                                                       ----------         ----------         --------       --------       --------
Income from continuing operations                          44,212             21,277           17,784         13,273          9,876
Interest expense and other income                          14,495              5,766            3,168          2,451          3,192
                                                       ----------         ----------         --------       --------       --------
Income from continuing operations before taxes             29,717             15,511           14,616         10,822          6,684
Provision for income taxes                                 12,480              6,581            6,139          4,545          2,807
                                                       ----------         ----------         --------       --------       --------
Income from continuing operations                          17,237              8,930            8,477          6,277          3,877
Income/(loss) from discontinued operations, net of
    income taxes                                               --             (2,946)          (2,402)        (1,588)         3,985
Gain on sale of contract manufacturing segment                 --              1,054               --             --             --
                                                       ----------         ----------        ---------      ---------       --------
Net income                                             $   17,237         $    7,038        $   6,075      $   4,689       $  7,862
                                                       ==========         ==========        =========      =========       ========
Basic earnings per shares (4)
    Continuing operations                              $     1.17         $     0.66        $    0.64      $    0.49       $   0.31
    Discontinued operations                                    --              (0.14)           (0.18)         (0.12)          0.32
                                                       ----------         ----------        ---------      ---------      ---------
Total                                                  $     1.17         $     0.52        $    0.46      $    0.37      $    0.63
                                                       ==========         ==========        =========      =========      =========
Diluted earnings per share (4)
    Continuing operations                              $     1.05         $     0.65        $    0.64      $    0.47      $    0.30
    Discontinued operations                                    --              (0.14)           (0.18)         (0.12)          0.31
                                                       ----------         ----------        ---------      ---------      ---------
Total                                                  $     1.05         $     0.51        $    0.46      $    0.35      $    0.61
                                                       ==========         ==========        =========      =========      =========
Shares used in per share calculation
    Basic                                                  14,673             13,563           13,188         12,843         12,539
                                                       ==========         ==========        =========      =========      =========
    Diluted                                                16,415             13,685           13,322         13,359         12,767
                                                       ==========         ==========        =========      =========      =========
</TABLE>


<TABLE>
<CAPTION>
                                                                                   YEAR ENDED DECEMBER 31,
                                                       -----------------------------------------------------------------------------
BALANCE SHEET DATA:                                      2000(1)           1999(2)           1998(3)          1997            1996
                                                       ----------         ----------         --------       --------        --------
<S>                                                  <C>                <C>                <C>            <C>             <C>

Working capital                                         $136,810           $182,626           $167,109       $134,612       $105,958
Total assets                                             661,207            360,351            285,580        205,420        175,680
Total long-term debt                                     106,871            110,638            106,963         74,460         50,885
Total shareholders' equity                               129,532             96,273             86,476         77,667         71,127
</TABLE>



     (1) 2000 Statement of Income Data and Balance Sheet Data include the
         results of operations of Rorke Data, Inc. since acquisition on May 15,
         2000 and Ideal Hardware Limited on August 3, 2000. See Note 3 of Notes
         to Consolidated Financial Statements.

     (2) 1999 Statement of Income Data and Balance Sheet Data include the
         results of operations of Future Tech, Inc. from the date of acquisition
         on July 21, 1999. See Note 3 of Notes to Consolidated Financial
         Statements.

                                       12
<PAGE>   14

     (3) 1998 Statement of Income Data and Balance Sheet Data include the
         results of operations of the Computer Products Division of Almo
         Corporation since acquisition on November 13, 1998 and Tenex Data
         Division of Axidata Inc. on November 19, 1998.

     (4) All per share amounts have been restated in accordance with Statement
         of Financial Accounting Standards No. 128 "Earnings Per Share".
         Earnings per share and shares used in per share calculations have been
         retroactively restated to reflect the 3-for-2 stock split the Company
         declared on July 31, 2000.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         For an understanding of the significant factors that influenced the
Company's performance during the past three years, the following discussion
should be read in conjunction with the consolidated financial statements and the
other information appearing elsewhere in this report.

         When used in this report, the words "expects," "anticipates,"
"estimates," "intends" and similar expressions are intended to identify
forward-looking statements within the meaning of Section 27A under the
Securities Act of 1933 and Section 21E under the Securities Exchange Act of
1934. Such statements include but are not limited to statements regarding the
ability to obtain favorable product allocations and the ability to increase
gross profit while controlling expenses. These statements are subject to risks
and uncertainties that could cause actual results to differ materially,
including those risks described under "Risk Factors" in Item 1 hereof.

RESULTS OF OPERATIONS

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

         Net sales were $1,804.1 million for the year ended December 31, 2000,
which represented an increase of $745.8 million, or 71%, over 2000. Computer
product sales increased by $642.6 million primarily due to the expansion of the
customer base related to the acquisitions of Ideal Hardware Limited ("Ideal") in
August 2000, Future Tech International, Inc. ("FTI"), acquired in July 1999, and
Rorke Data, Inc. ("RDI"), acquired in May 2000, as well as growth in sales in
existing product lines. Semiconductor sales increased by $103.2 million
primarily due to the acquisition of FTI, growth in unit sales in existing
product lines and the addition of new lines. Ideal contributed net sales of
$280.6 million, since acquisition on August 3, 2000.

         The Company's gross profit for 2000 was $165.3 million, an increase of
$74.5 million, or 82%, over 1999. The increase in the dollar amount of gross
profit was primarily the result of increased sales volume in existing product
lines and the acquisitions of Ideal, FTI and RDI. As a percentage of sales,
overall gross margins were 9.2% compared to 8.6% in the same period last year.
The favorable gross margin percentage increase was primarily due to customer and
product mix in North America and the acquisition of RDI, partially offset by
lower gross margin percentages for Ideal and FTI.

         Selling, general and administrative expenses increased to $121.1
million in 2000 from $69.5 million in 1999, an increase of $51.6 million, or
74%. As a percentage of sales, selling, general and administrative expenses
increased to 6.7% from 6.6% in 1999. The increase in expenses was attributable
to the acquisitions of Ideal, FTI, and RDI, increased sales volume and the
Company's continuing effort to expand its sales and marketing organization and
strengthen its financial and administrative support.

         Interest expense increased in 2000 to $14.9 million from $6.4 million
in 1999, an increase of $8.5 million, or 133%. The increase in interest expense
was primarily due to increased overall bank borrowings during 2000 for

                                       13
<PAGE>   15


worldwide working capital purposes, and the acquisitions of Ideal and RDI.
Interest rates also increased during the year 2000 compared to interest rates in
1999. The average interest rate in 2000 was 8.7%, versus 7.3% in 1999. In 2000,
the Company recognized remeasurement gains of approximately $449,000 compared to
remeasurement gains of approximately $647,000 in 1999. These amounts are
included in interest expense and other income.

         The Company's effective income tax rate remained unchanged at 42% in
2000.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

         Net sales were $1,058.3 million for the year ended December 31, 1999,
which represented an increase of $483.0 million, or 84%, over 1998. Computer
product sales increased by $440.5 million primarily due to the expansion of the
customer base related to the acquisitions of FTI in July 1999 and the Computer
Products Division of Almo Corporation ("Almo CPD") and Tenex Data Division of
Axidata, Inc. ("Tenex Data") in November 1998, and to the growth in unit sales
in existing product lines and the addition of new lines. Semiconductor sales
increased by $42.5 million primarily due to the acquisition of FTI, growth in
unit sales in existing product lines and the addition of new lines.

         The Company's gross profit for 1999 was $90.8 million, an increase of
$26.9 million, or 42%, over 1998. The increase in gross profit was primarily the
result of increased sales volume. As a percentage of sales, overall gross
margins were 8.6% compared to 11.1% in 1998. This decrease was primarily due to
increased competitive pricing in the industry and the increase in the proportion
of computer product sales, which typically have lower margins than
semiconductors.

         Marketing, general and administrative expenses increased 51% to $69.5
million in 1999 from $46.1 million in 1998, but decreased as a percentage of
sales to 6.6% from 8.0%. The increase in expenses was attributable to increased
sales volume, the acquisitions of FTI, Almo CPD and Tenex Data and the Company's
continuing effort to strengthen its financial and administrative support.

         Interest expense increased in 1999 to $6.4 million from $3.2 million in
1998. The increase in interest expense was due to increased bank borrowings
during 1999 to fund the Company's working capital needs. In 1999, the Company
recognized remeasurement gains of approximately $647,000 relating to the
retranslation of US dollar denominated debt of Tenex Data.

         The Company's effective income tax rate remained unchanged at 42% in
1999.

LIQUIDITY AND CAPITAL RESOURCES

         In recent years, the Company has funded its working capital
requirements principally through borrowings under subordinated term loans and
bank lines of credit, as well as proceeds from warrant and stock option
exercises. Working capital requirements have included the financing of increases
in inventory and accounts receivable resulting from sales growth, and the
financing of certain acquisitions.

         Net cash provided by financing activities in 2000 totaled $103.9
million, which was primarily related to borrowings under the RSA subordinated
term loan facility. The RSA facility was used to repay borrowings under
revolving credit facilities as described below. The net amount of cash used in
investing activities in 2000 was $64.2 million, which was primarily related to
the acquisition of property and equipment and the acquisitions of Ideal and RDI.
The net amount of cash used in continuing operating activities was $36.9 million
in 2000.

         The Company's accounts receivable and inventories increased to $295.6
million and $246.7 million at December 31, 2000, respectively, from $168.9
million and $156.6 million, respectively, as of December 31, 1999.


                                       14
<PAGE>   16



These increases were primarily the result of the Company's increased sales
volume and the purchase of accounts receivable and inventory through the
Company's acquisitions of Ideal and RDI in 2000. The Company's accounts payable
increased to $231.1 million in 2000 from $143.6 million in 1999 due to increased
inventory purchases and the addition of accounts payable through the Company's
acquisitions in 2000.

         On June 20, 2000, the Company entered into an agreement with
Transamerica Commercial Finance Corporation to provide up to $15 million in
short-term financing to the Company. The loan is secured by the Company's
accounts receivable, has a maturity date of June 20, 2001, and bears interest at
10.5%. The loan does not require the Company to meet financial covenants. The
loan balance outstanding at December 31, 2000 was $5 million.

         On July 6, 2000, the Company repaid in full its borrowings outstanding
under the California Bank & Trust line of credit (the "CBT Facility"), and
effective as of that date, the Company amended its agreement to decrease the
size of the line of credit to $50 million provided solely by California Bank &
Trust. At the Company's option, the borrowings under the amended line of credit
bear interest at California Bank & Trust's prime rate (9.0%) at December 31,
2000, or the adjusted LIBOR rate plus 1.75%. The line of credit expires on May
31, 2000. The balance outstanding on the revolving line of credit at December
31, 2000 was $8 million. Obligations of the Company under the revolving line of
credit are secured by certain assets of the Company and its subsidiaries. The
revolving line of credit requires the Company to meet certain financial tests
and to comply with certain other covenants on a quarterly basis, including
restrictions on incurrence of debt and liens, restrictions on mergers,
acquisitions, asset dispositions, payment of dividends, repurchase of stock, and
investments and covenants regarding profitability. The Company is also required
to be in compliance with the covenants of all other borrowing agreements. The
Company was in compliance with its bank covenants at December 31, 2000; however,
there can be no assurance that the Company will be in compliance with its bank
covenants in the future. If the Company does not remain in compliance with the
covenants and is unable to obtain a waiver of noncompliance from its bank, the
Company's financial condition and results of operations would be materially
adversely affected.

         On July 6, 2000, the Company entered into a Securities Purchase
Agreement with The Retirement Systems of Alabama and certain of its affiliated
funds (the "RSA facility"), under which the Company borrowed $180 million of
subordinated debt financing. The proceeds from the financing were used to repay
in full $123.9 million outstanding under the CBT Facility, $15 million of
borrowings outstanding at July 6, 2000 from Transamerica Commercial Finance
Corporation, and to finance the acquisition of Ideal. This subordinated debt
financing is comprised of $80 million bearing interest at 9.125%, due June 30,
2001, and $100 million bearing interest at 9.0%, payable in semi-annual
principal installments of $3.5 million plus interest installments commencing
December 31, 2000 and in semi-annual principal installments of $8.5 million
commencing December 31, 2007, with a final maturity date of June 30, 2010. The
RSA facility is secured by a second lien on the Company's and its subsidiaries'
North American and South American assets. The Company must meet certain
financial tests on a quarterly basis, and comply with certain other covenants,
including restrictions on incurrence of debt and liens, restrictions on asset
dispositions, payment of dividends, and repurchase of stock. The Company is also
required to be in compliance with the covenants of all other borrowing
agreements. The Company is in compliance with its subordinated debt financing
covenants; however, there can be no assurance that the Company will be in
compliance with such covenants in the future. If the Company does not remain in
compliance with the covenants in the Securities Purchase Agreement and is unable
to obtain a waiver of noncompliance from its subordinated lenders, the Company's
financial condition and results of operations would be materially adversely
affected.

         On August 3, 2000, the Company acquired Ideal Hardware Limited
("Ideal"), for a combination of cash, assumption of liabilities and notes
payable totaling approximately $28.9 million, including acquisition costs.
Liabilities assumed included a $43 million borrowing facility with Lombard
NatWest Limited (the "NatWest" facility) which is secured by substantially all
of Ideal's accounts receivable, bears interest at NatWest's base rate plus 1.5%
and expires on June 26, 2001. This facility was increased to $60 million in
October 2000. There are no financial covenant requirements. At December 31,
2000, approximately $32 million was outstanding under the NatWest borrowing
facility. The acquisition of Ideal was


                                       15
<PAGE>   17


funded through borrowings under the RSA facility.

         On October 16, 2000, the Company exercised the option to purchase the
buildings occupied by Ideal for approximately $24.0 million. The purchase was
funded through existing cash resources under the NatWest borrowing facility of
approximately $11.0 million and a five-year mortgage of approximately $13.0
million bearing interest at LIBOR plus 1.5%. The mortgage is payable in
quarterly installments of approximately $290,000, plus interest, with a balloon
payment of approximately $7.2 million due November 2005.

         On May 15, 2000, the Company acquired Rorke Data, Inc. ("RDI") and its
European subsidiaries for approximately $4.1 million in cash and 269,418 shares
of the Company's common stock. The acquisition was funded through borrowings
under the Company's revolving line of credit and newly issued shares of common
stock.

         The Company's future cash requirements will depend on numerous factors,
including potential acquisitions and the rate of growth of its sales. The
Company is focused on improving its capital structure and addressing its
financing needs. The Company is currently in negotiations with a financial
institution to obtain additional borrowing capacity in an amount up to $250
million to refinance the $80 million RSA note payable maturing June 30, 2001 and
the CBT Facility maturing May 31, 2001 and to finance future growth. The Company
also expects to refinance its NatWest facility that matures on June 26, 2001.
The Company believes these facilities will be sufficient to conduct its current
operations for the next 12 months. If the Company is unable to obtain these
financing facilities, the Company's financial condition and results of
operations could be materially adversely affected.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         During the six months ended June 30, 2000, the Company's average
borrowings were $126.8 million with variable interest rates under its credit
facility with California Bank & Trust. The average interest rate on these
borrowings was 8.41%. During this time the Company had minimal fixed interest
rate debt. Effective July 6, 2000, the Company borrowed $100 million from the
RSA at a fixed interest rate of 9% per annum and borrowed $80 million at 9.125%
and repaid the California Bank & Trust facility. Upon the acquisition of Ideal
the Company assumed Ideal's Lombard NatWest 7.5% fixed interest rate facility.
Borrowings under this line averaged $29.3 million after the acquisition. In
addition the Company entered into a $13.3 million variable rate mortgage with
NatWest and also entered into an interest rate swap agreement that fixed the
interest on the mortgage at 7.42% for a two-year period. Average borrowings
outstanding on the variable rate credit facility with California Bank & Trust
after July 6, 2000 was $4.8 million. Based on 2000 actual borrowings, a 1%
increase in interest rates would have increased interest expense on the
Company's variable interest rate debt by approximately $650,000.

         A substantial part of the Company's revenue and capital expenditures
are transacted in U.S. Dollars, but the functional currency for foreign
subsidiaries is not the U.S. dollar. As a result of the Company or its
subsidiaries entering into transactions denominated in currencies other than
their functional currency, the Company recognized a foreign currency
remeasurement gain of $449,000 during the year ended December 31, 2000. The
Company enters into foreign forward exchange contracts to hedge certain balance
sheet exposures against future movements in foreign exchange rates. The gains
and losses on the forward exchange contracts are largely offset by gains or
losses on the underlying transactions and, consequently, a sudden or significant
change in foreign exchange rates should not have a material impact on future net
income or cash flows. The Company is likely to be subject to increased foreign
currency transactions and associated risks of depreciation of value and
volatility of cashflows following the acquisitions of Ideal, RDI, FTI and Tenex
Data. To the extent the Company is unable to manage these risks, the Company's
results and financial position could be materially adversely affected.


                                       16
<PAGE>   18


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                  Index to Consolidated Financial Statements                               Form 10-K
                                                                                          Page Number
                                                                                          -----------
                 <S>                                                                      <C>
                  Report of Independent Accountants                                           18

                  Consolidated Balance Sheets at December 31, 2000
                    and 1999                                                                  19

                  Consolidated Statements of Income for the years
                    ended December 31, 2000, 1999 and 1998                                    20

                  Consolidated Statements of Shareholders' Equity for the years
                    ended December 31, 2000, 1999 and 1998                                    21

                  Consolidated Statements of Cash Flows for the years ended
                    December 31, 2000, 1999 and 1998                                          22

                  Notes to Consolidated Financial Statements                                  23

</TABLE>

                                       17
<PAGE>   19

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Bell Microproducts Inc. and Subsidiaries

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) on page 38 present fairly, in all material
respects, the financial position of Bell Microproducts Inc. and its subsidiaries
at December 31, 1999 and 2000, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in
the index appearing under Item 14(a)(2) on page 38 presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements. These financial statements
and financial statement schedule are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits. We conducted
our audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
San Jose, California
February 6, 2001


                                       18
<PAGE>   20


                             BELL MICROPRODUCTS INC.
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                             ------------------------------
                                                                               2000                  1999
                                                                             --------              --------
<S>                                                                          <C>                   <C>
ASSETS
Current assets:
     Cash                                                                    $  7,465              $  5,103
     Accounts receivable, net                                                 295,572               168,857
     Inventories                                                              246,671               156,648
     Prepaid expenses and other current assets                                 11,906                 5,458
                                                                             --------              --------
              Total current assets                                            561,614               336,066
Property and equipment, net                                                    44,436                 7,626
Goodwill and other intangibles, net                                            46,439                16,059
Deferred debt issuance costs and other assets                                   8,718                   600
                                                                             --------              --------
     Total assets                                                            $661,207              $360,351
                                                                             ========              ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                        $231,132              $143,632
     Borrowings under lines of credit                                          52,633                     -
     Short-term note payable and current portion of long-term
        notes payable to RSA                                                   90,500                     -
     Other accrued liabilities                                                 50,539                 9,808
                                                                             --------              --------
              Total current liabilities                                       424,804               153,440
Borrowings under line of credit                                                   249               110,600
Long-term notes payable to RSA and mortgage payable                           101,640                     -
Other long-term liabilities                                                     4,982                    38
                                                                             --------              --------
     Total liabilities                                                        531,675               264,078
                                                                             --------              --------
Commitments and contingencies (Note 8)

Shareholders' equity:
     Preferred Stock, $0.01 par value, 10,000 shares authorized;
        none issued and outstanding                                                 -                     -
     Common Stock, $0.01 par value, 40,000 and 30,000
        shares authorized; 15,793 and 13,877 shares
        issued and outstanding                                                 75,154                58,527
     Retained earnings                                                         54,472                37,285
     Accumulated other comprehensive income                                       (94)                  461
                                                                             --------              --------
              Total shareholders' equity                                      129,532                96,273
                                                                             --------              --------
     Total liabilities and shareholders' equity                              $661,207              $360,351
                                                                             ========              ========
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       19
<PAGE>   21

                             BELL MICROPRODUCTS INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                        ----------------------------------------------
                                                                           2000               1999              1998
                                                                        ----------         ----------         --------
<S>                                                                     <C>                <C>                <C>
Net sales                                                               $1,804,102         $1,058,275         $575,330
Cost of sales                                                            1,638,802            967,491          511,476
                                                                        ----------         ----------         --------
Gross profit                                                               165,300             90,784           63,854
Selling, general and administrative expenses                               121,088             69,507           46,070
                                                                        ----------         ----------         --------
Operating income from continuing operations                                 44,212             21,277           17,784
Interest expense and other income                                           14,495              5,766            3,168
                                                                        ----------         ----------         --------
Income from continuing operations before income taxes                       29,717             15,511           14,616
Provision for income taxes                                                  12,480              6,581            6,139
                                                                        ----------         ----------         --------
Income from continuing operations                                           17,237              8,930            8,477
Discontinued operations:
   Loss from operations, net of tax
      benefit of $2,132 and $1,739                                               -             (2,946)          (2,402)
   Gain on sale, net of tax of $763                                              -              1,054                -
                                                                        ----------         ----------         --------
Discontinued operations, net                                                     -             (1,892)          (2,402)
                                                                        ----------         ----------         --------
Net income                                                              $   17,237         $    7,038         $  6,075
                                                                        ==========         ==========         ========
Earnings per share (Note 2)
     Basic
        Continuing operations                                           $     1.17         $     0.66         $   0.64
        Discontinued operations                                                  -              (0.14)           (0.18)
                                                                        ----------         ----------         --------
     Total                                                              $     1.17         $     0.52         $   0.46
                                                                        ==========         ==========         ========
Earnings per share
     Diluted
        Continuing operations                                           $     1.05         $     0.65         $   0.64
        Discontinued operations                                                  -              (0.14)           (0.18)
                                                                        ----------         ----------         --------
     Total                                                              $     1.05         $     0.51         $   0.46
                                                                        ==========         ==========         ========
Shares used in per share calculation (Note 2)
     Basic                                                                  14,673             13,563           13,188
                                                                        ==========         ==========         ========
     Diluted                                                                16,415             13,685           13,322
                                                                        ==========         ==========         ========
</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       20
<PAGE>   22

                             BELL MICROPRODUCTS INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                             Comprehensive Income
                                                                        -------------------------------
                                                 Common Stock
                                           -------------------------       Retained
                                            Shares          Amount         Earnings           Other            Total
                                           --------        --------        --------          -------         --------
<S>                                        <C>             <C>             <C>              <C>              <C>
Balance at December 31, 1997                 13,044         $53,495        $ 24,172           $    -         $ 77,667

Exercise of stock options, including
   related tax benefit of $86                   166             943               -                -              943
Issuance of Common Stock under
   Stock Purchase Plan                           61             700               -                -              700
Issuance of stock warrant (Note 3)                -           1,043               -                -            1,043
Foreign currency translation                      -               -               -               48               48
Net income                                        -               -           6,075                -            6,075
                                            -------         -------        --------           ------         --------
Balance at December 31, 1998                 13,371          56,181          30,247               48           86,476

Exercise of stock options, including
   related tax benefit of $72                   353           1,743               -                -            1,743
Issuance of Common Stock under
   Stock Purchase Plan                          153             603               -                -              603
Foreign currency translation                      -               -               -              413              413
Net income                                        -               -           7,038                -            7,038
                                            -------         -------        --------           ------         --------
Balance at December 31, 1999                 13,877          58,527          37,285              461           96,273

Exercise of stock options, including
   related tax benefit of $1,933                622           5,242               -                -            5,242
Issuance of Common Stock under
   Stock Purchase Plan                          278           1,421               -                -            1,421
Stock split                                                      50             (50)               -                -
Issuance of Common Stock for
   acquisition of Rorke Data (Note 3)           269           2,508               -                -            2,508
Issuance of warrant to RSA                      747           7,406               -                -            7,406
Foreign currency translation                      -               -               -             (555)            (555)
Net income                                        -               -          17,237                -           17,237
                                            -------         -------        --------           ------         --------
Balance at December 31, 2000                 15,793         $75,154        $ 54,472           $  (94)        $129,532
                                            =======         =======        ========           ======         ========
</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       21
<PAGE>   23


                             BELL MICROPRODUCTS INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   (INCREASE (DECREASE) IN CASH, IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                     -----------------------------------------------
                                                                        2000                1999              1998
                                                                     ---------            --------          --------
<S>                                                                  <C>                  <C>               <C>
Cash flows from operating activities:
     Income from continuing activities                               $  17,237            $  8,930          $  8,477
     Adjustments to reconcile net income to
         net cash (used in)/provided by operating activities:
     Depreciation and amortization                                       5,510               2,254             1,132
     Provision for doubtful accounts                                     9,958               6,896             4,630
     Deferred income taxes                                              (2,836)               (148)           (1,477)
     Changes in assets and liabilities:
            Accounts receivable                                        (16,550)            (56,568)          (21,235)
            Inventories                                                (38,451)            (48,679)          (14,776)
            Prepaid expenses                                            (3,091)              2,721              (497)
            Other assets                                                    (1)                226              (548)
            Accounts payable                                           (16,085)             50,641            23,995
            Other accrued liabilities                                    7,366               1,175             1,289
                                                                     ---------            --------          --------
Net cash (used in)/provided by continuing operating activities         (36,943)            (32,552)              990
Net cash (used in)/provided by discontinued operations                       -              (4,745)           (9,261)
                                                                     ---------            --------          --------
Net cash used in operating activities                                  (36,943)            (37,297)           (8,271)
                                                                     ---------            --------          --------
Cash flows from investing activities:
     Acquisition of property and equipment, net                        (33,826)             (4,412)           (1,308)
     Acquisitions of businesses (Note 3)                               (30,347)             (2,808)          (26,770)
     Proceeds from sale of business (Note 3)                                 -              34,665                 -
                                                                     ---------            --------          --------
Net cash (used in)/provided by investing activities                    (64,173)             27,445           (28,078)
                                                                     ---------            --------          --------
Cash flows from financing activities:
     Net (repayments)/borrowings under line of credit agreement        (95,652)              8,200            32,400
     Proceeds from long-term notes payable to RSA                      100,000                   -                 -
     Proceeds from short-term notes payable to RSA                      80,000                   -                 -
     Net borrowings on other notes payable and long-term
       liabilities                                                      12,889                   5                15
     Proceeds from issuance of Common Stock                              6,663               2,346             1,643
                                                                     ---------            --------          --------
Net cash provided by financing activities                              103,900              10,551            34,058

Effect of exchange rate changes on cash                                   (422)                322                48
                                                                     ---------            --------          --------
Net increase/(decrease) in cash                                          2,362               1,021            (2,243)
Cash at beginning of year                                                5,103               4,082             6,325
                                                                     ---------            --------          --------
Cash at end of year                                                  $   7,465            $  5,103          $  4,082
                                                                     =========            ========          ========

Supplemental disclosures of cash flow information:
     Cash paid during the year for:
            Interest                                                 $  10,817            $  7,523          $  5,555
            Income taxes                                             $  12,106            $  5,606          $  4,592
Supplemental non-cash financing activities:
     Common Stock issued for acquisition (Note 3)                    $   2,508            $      -          $      -
     Stock warrant issued for subordinated debt (Note 5)             $   7,406            $      -          $      -
     Liabilities assumed on acquisition of business (Note 3)         $   7,500            $      -          $      -
     Effect of stock split (Note 2)                                  $      50            $      -          $      -
     Obligations incurred under capital leases                       $       -            $      -          $  2,519
     Stock warrant issued in connection with acquisition             $       -            $      -          $  1,043
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.



                                       22
<PAGE>   24

                             BELL MICROPRODUCTS INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - THE COMPANY:

         The Company operates in one business segment, as a value-added
distributor of storage products and systems, computer products and
semiconductors and peripherals to original equipment manufacturers (OEMs),
value-added resellers (VARs) and dealers in the United States, Europe, Canada
and Latin America. Semiconductor products include memory, logic, microprocessor,
peripheral and specialty components. Computer products include disk, tape and
optical drives and subsystems, drive controllers, computers and board-level
products. The Company also provides a variety of value-added services to its
customers, including subsystem testing, software loading, mass storage and
computer systems integration, disk drive formatting and testing, and the
packaging of electronic component kits to customer specifications.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION AND BASIS OF PREPARATION

         The consolidated financial statements include the accounts of the
parent company and its wholly owned subsidiaries. All material intercompany
transactions and balances have been eliminated on consolidation.

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION

         Revenues are recognized when title transfers to customers. Provisions
for estimated returns and expected warranty costs are recorded at the time of
sale and are adjusted periodically to reflect changes in experience and expected
obligations. Transactions with sale terms of FOB shipping point are recognized
when products are shipped and transactions with sale terms of FOB destination
are recognized upon arrival.

CONCENTRATION OF CREDIT AND OTHER RISKS

         Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of accounts receivable. The
Company performs ongoing credit evaluations of its customers and generally does
not require collateral. The Company maintains reserves for estimated collection
losses. No customer accounts for more than 10% of sales in any of the three
years ended December 31, 2000, 1999 and 1998, or accounts receivable at December
31, 2000 and 1999.

         Four vendors accounted for 39% of the Company's inventory purchases
during 2000. Three vendors accounted for 55% of the Company's inventory
purchases during 1999. Two vendors accounted for 49% of the Company's inventory
purchases during 1998. One such vendor has obtained a second priority lien
against the Company's inventories to secure payment for the Company's purchase
of goods.

INVENTORIES

         Inventories are stated at the lower of cost or market, cost being
determined by the first-in, first-out (FIFO) method. Market is based on
estimated net realizable value.

PROPERTY AND EQUIPMENT

         Property and equipment are recorded at cost. Depreciation is computed
using the straight-line


                                       23
<PAGE>   25
method based upon the estimated useful lives of computer and other equipment,
furniture and fixtures, and warehouse equipment, which range from three to five
years. Depreciation of buildings is based upon the estimated useful lives of 50
years. Amortization of leasehold improvements is computed using the
straight-line method over the shorter of the estimated life of the asset or the
lease term.

GOODWILL

         Assets and liabilities acquired in connection with business
combinations accounted for under the purchase method are recorded at their
respective fair values. The excess of the purchase price over the fair value of
the assets acquired is recorded as goodwill and amortized on a straight-line
basis over a period between ten to forty years. The Company periodically reviews
the recoverability of goodwill.

IMPAIRMENT OF LONG-LIVED ASSETS

         The Company continually monitors its long-lived assets (including
goodwill, intangibles and property and equipment) to determine whether an
impairment of these assets has occurred. In making such determination, the
Company evaluates the performance of the underlying businesses, products and
product lines. The Company recognizes impairment of long-lived assets in the
event the net book value of such assets exceeds the future undiscounted cash
flows attributable to such assets. No material impairments have been
experienced.

INCOME TAXES

         Deferred income taxes are provided for temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities as part of the income tax provisions.

EARNINGS PER SHARE

         Basic EPS is computed by dividing net income available to common
shareholders (numerator) by the weighted average number of common shares
outstanding (denominator) during the period. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period including stock
options, using the treasury stock method, and convertible preferred stock, using
the if-converted method. In computing diluted EPS, the average stock price for
the period is used in determining the number of shares assumed to be purchased
from the exercise of stock options.

         On July 31, 2000 the Company declared a 3-for-2 split of its Common
Stock. The stock split was in the form of a 50% Common Stock dividend payable at
the close of business on August 31, 2000 to shareholders of record on August 11,
2000. All references in the accompanying financial statements to earnings per
share, the number of common shares, warrants and options have been retroactively
restated to reflect the common stock split.

         Following is a reconciliation of the numerators and denominators of the
Basic and Diluted EPS computations for the periods presented below (in
thousands, except per share data):

<TABLE>
<CAPTION>
                                                                                  Year Ended December 31,
                                                                 -----------------------------------------------------
                                                                    2000                   1999                 1998
                                                                 -----------           -----------          ----------
<S>                                                              <C>                   <C>                   <C>
Net income                                                       $    17,237           $     7,038          $    6,075
                                                                 ===========           ===========          ==========
Weighted average common shares outstanding (basic)                    14,673                13,563              13,188
Effect of dilutive warrant and options                                 1,742                   122                 134
                                                                 -----------           -----------          ----------
Weighted average common shares outstanding (diluted)                  16,415                13,685              13,322
                                                                 ===========           ===========          ==========
Earnings Per Share:
Basic                                                            $      1.17           $      0.52          $     0.46
                                                                 ===========           ===========          ==========
Diluted                                                          $      1.05           $      0.51          $     0.46
                                                                 ===========           ===========          ==========
</TABLE>

         Options to purchase 304,908 shares of common stock at a weighted
average price of $24.13 per share were



                                       24
<PAGE>   26

outstanding at December 31, 2000 but were not included in the computation of
Diluted EPS because the exercise prices were greater than the average market
price of the common shares. At December 31, 1999, there were 1,580,475 options
and warrant outstanding to purchase common stock at a weighted average price of
$6.72 per share excluded from the Diluted EPS computation due to their
anti-dilutive effect. At December 31, 1998, there were 1,693,650 options and
warrant outstanding to purchase common stock at a weighted average price of
$6.65 per share excluded from the Diluted EPS computation due to their
anti-dilutive effect.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

         The financial statements of the Company's foreign subsidiaries are
measured using the local currency as the functional currency. Assets and
liabilities of these subsidiaries are translated at the rates of exchange at the
balance sheet date. Income and expense items are translated at average quarterly
rates of exchange prevailing during the year. The resulting translation
adjustments are included in accumulated other comprehensive income as a separate
component of stockholders' equity. Gains and losses from foreign currency
transactions are included in the statement of income.

COMPREHENSIVE INCOME

         Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. For the Company, comprehensive income consists of its
reported net income or loss and the change in the foreign currency translation
adjustment during a period.

STOCK-BASED COMPENSATION

         The Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees." The Company's policy is to grant
options with an exercise price equal to the quoted market price of the Company's
stock on the date of the grant. Accordingly, no compensation cost has been
recognized in the Company's Statements of Income. The Company provides
additional proforma disclosures as required under Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation."

SEGMENT REPORTING

         Financial Accounting Standards Board Statement No.131, "Disclosure
about Segments of an Enterprise and Related Information" ("SFAS 131") requires
that companies report separately in the financial statements certain financial
and descriptive information about operating segments' profit or loss, certain
specific revenue and expense items and segment assets. Additionally, companies
are required to report information about the revenues derived from their
products and service groups, about geographic areas in which the Company earns
revenues and holds assets, and about major customers (see Note 11).

RECENTLY ISSUED ACCOUNTING STANDARDS

         In June 1999, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 137 ("SFAS 137"), "Accounting
for Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133." SFAS 137 amends Statement of Financial
Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities," to defer its effective date to all fiscal
quarters of all fiscal years beginning after June 15, 2000. SFAS 133 establishes
accounting and reporting standards for derivative instruments including
standalone instruments, such as forward currency exchange contracts and interest
rate swaps or embedded derivatives and requires that these instruments be
marked-to-market on an ongoing basis. These market value adjustments are to be
included either in the income statement or stockholders' equity, depending on
the nature of the transaction. The Company is required to adopt SFAS 133 in the
first quarter of its fiscal year 2001. The effect of SFAS 133 is not expected to
be material to the Company's financial statements.

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial
Statements," providing guidance on the recognition, presentation and disclosure
of revenue in financial statements. The Company was required to adopt SAB 101 in
the year ended December 31, 2000, retroactively effective to January 1, 2000.
SAB 101 did not have a material impact on the Company.



                                       25
<PAGE>   27

NOTE 3 - ACQUISITIONS AND DIVESTITURES:

         All acquisitions below have been accounted for using the purchase
method. Accordingly, the results of operations of the acquired businesses are
included in the consolidated financial statements from the dates of acquisition.

Ideal Hardware Limited Acquisition

         On August 3, 2000, the Company acquired all the capital stock of Ideal
Hardware Limited ("Ideal"), a wholly owned subsidiary of InterX plc. Ideal is a
United Kingdom-based, storage-centric distributor offering value-added programs
and services.

         Ideal was acquired for a total purchase price of approximately $28.9
million which included cash paid of $19.9 million, UK tax liabilities assumed of
$4.5 million, deferred purchase price payable of $3.0 million and estimated
acquisition costs of $1.5 million. The deferred purchase price is payable on
March 31, 2001.

         The final purchase price is subject to adjustment in accordance with
certain provisions in the purchase agreement. The allocation of the purchase
price over the estimated fair value of the assets acquired and liabilities
assumed is as follows (in thousands):

<TABLE>
<S>                                                              <C>
                        Accounts receivable                      $113,334
                        Inventories                                42,882
                        Equipment and other assets                  5,476
                        Goodwill and other intangibles             20,144
                        Accounts payable                          (96,084)
                        Bank borrowings                           (30,102)
                        Other accrued liabilities                 (23,390)
                        Deferred taxes                             (3,360)
                                                                 --------
                        Total consideration                      $ 28,900
                                                                 ========
</TABLE>

         The goodwill and other intangibles will be amortized over a period
ranging from 10 to 40 years.

Rorke Data, Inc. Acquisition

         On May 15, 2000, the Company acquired all of the outstanding capital
stock of Rorke Data, Inc. ("RDI"), a privately held company headquartered in
Minnesota, with subsidiaries in the Netherlands and Italy. RDI provides
leading-edge Fibre Channel and SAN storage solutions to vertical markets such as
digital audio/video, publishing, and medical imaging throughout the U.S. and
Europe.

         RDI was acquired for a total purchase price of approximately $7.0
million, which included cash of $4.1 million, the issuance of 269,418 shares of
the Company's Common Stock and acquisition costs The final allocation of the
purchase price to acquired assets and liabilities assumed, based upon
management's estimate of their fair market values as of the acquisition date, is
as follows (in thousands):

<TABLE>
<S>                                                              <C>
                        Cash                                     $    546
                        Accounts receivable                         6,644
                        Inventories                                 8,390
                        Equipment and other assets                  2,372
                        Goodwill                                    7,480
                        Accounts payable                           (7,253)
                        Other accrued liabilities                  (1,809)
                        Bank borrowings                            (7,832)
                        Notes payable                              (1,501)
                                                                 ---------
                        Total consideration                      $   7,037
                                                                 =========
</TABLE>

                                       26
<PAGE>   28

         The goodwill will be amortized over 20 years.

         Results of operations of RDI were not material to the Company.

Future Tech International, Inc. Acquisition

         On July 21, 1999, the Company acquired certain assets and assumed
certain liabilities of Future Tech International, Inc. ("FTI"), a privately held
company located in Miami which was in bankruptcy reorganization. FTI is a
leading value-added distributor of computer components to the markets of Latin
America and the Caribbean.

         The FTI assets acquired were primarily accounts receivable, inventory
and fixed assets. As consideration for the assets purchased, the Company paid
$2.2 million in cash, including acquisition costs and assumed certain
liabilities, primarily trade accounts payable. The Company was obligated to pay
up to an additional $4.5 million in cash within 21 months of the closing date as
a contingent incentive payment to the bankruptcy estate based upon earnings
achieved up to the first anniversary of the acquisition. As the earnings level
was achieved in July 2000, the Company has recorded the $4.5 million contingent
payment as an addition to goodwill.

         The FTI purchase price was allocated to the acquired assets and
liabilities assumed, based upon management's estimate of their fair market
values as of the acquisition date, as follows (in thousands):

<TABLE>
<S>                                                              <C>
                        Restricted cash                          $      23
                        Accounts receivable                         12,576
                        Inventories                                  2,639
                        Equipment and other assets                   3,947
                        Goodwill                                     8,727
                        Accounts payable                           (20,989)
                        Other accrued liabilities                   (4,704)
                                                                 ---------
                        Total consideration                      $   2,219
                                                                 =========
</TABLE>

         The following unaudited pro forma combined summary of operations of the
Company give effect to the acquisitions of Ideal and FTI, as though these
acquisitions had occurred on January 1, 1999.

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                          (unaudited, in thousands,
                                                                          except earnings per share)
                                                                         ---------------------------
                                                                            2000             1999
                                                                         ----------       ----------
<S>                                                                      <C>              <C>
         Net sales                                                       $2,167,295       $1,728,796
         Net income                                                      $   14,683       $    9,110

         Earnings per share
            Basic                                                        $     1.00       $     0.64
            Diluted                                                      $     0.89       $     0.63

         Shares used in per share calculation
            Basic                                                            14,673           14,313
            Diluted                                                          16,415           14,435

</TABLE>


Divestiture of Quadrus

         On July 8, 1999, the Company completed the sale of its Contract
Manufacturing Division, Quadrus, for a total consideration of approximately
$34.7 million. The sale resulted in an after tax gain of $1.1 million or $0.08
per share. The results of Quadrus have been reported separately as discontinued
operations in the Consolidated Statements of Income.



                                       27
<PAGE>   29

NOTE 4 - BALANCE SHEET COMPONENTS:

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                           -------------------------
                                                                             2000             1999
                                                                           --------         --------
                                                                                 (in thousands)
<S>                                                                        <C>              <C>
         Accounts receivable, net:
            Accounts receivable                                            $312,403         $177,099
            Less:  allowance for doubtful accounts and returns              (16,831)          (8,242)
                                                                           --------         --------
                                                                           $295,572         $168,857
                                                                           ========         ========
         Property and equipment:
            Computer and other equipment                                   $ 18,358         $  6,753
            Land and buildings                                               20,986                -
            Furniture and fixtures                                            7,422            2,354
            Warehouse equipment                                               2,582            1,412
            Leasehold improvements                                            1,747              899
                                                                           --------         --------
                                                                             51,095           11,418
            Less: accumulated depreciation                                   (6,659)          (3,792)
                                                                           --------         --------
                                                                           $ 44,436         $  7,626
                                                                           ========         ========
         Goodwill and other intangibles, net:
            Goodwill and other intangibles                                 $ 50,610         $ 18,373
            Less:  accumulated amortization                                  (4,171)          (2,314)
                                                                           --------         --------
                                                                           $ 46,439         $ 16,059
                                                                           ========         ========

</TABLE>


NOTE 5 - LINE OF CREDIT AND TERM LOAN:

         On June 20, 2000, the Company entered into an agreement with
Transamerica Commercial Finance Corporation to provide up to $15 million in
short-term financing to the Company. The loan is secured by the Company's
accounts receivable, has a maturity date of June 20, 2001, and bears interest at
10.5%. The loan does not require the Company to meet financial covenants. The
loan balance outstanding at December 31, 2000 was $5 million.

         On July 6, 2000, the Company repaid in full its borrowings outstanding
under the California Bank & Trust line of credit (the "CBT Facility"), and
effective as of that date, the Company amended its agreement to decrease the
size of the line of credit to $50 million provided solely by California Bank &
Trust. At the Company's option, the borrowings under the amended line of credit
bear interest at California Bank & Trust's prime rate (9.0%) at December 31,
2000, or the adjusted LIBOR rate plus 1.75%. The line of credit expires on May
31, 2001. The balance outstanding on the revolving line of credit at December
31, 2000 was $8 million. Obligations of the Company under the revolving line of
credit are secured by certain assets of the Company and its subsidiaries. The
revolving line of credit requires the Company to meet certain financial ratios
and to comply with certain other covenants on a quarterly basis, including
restrictions on incurrence of debt and liens, restrictions on mergers,
acquisitions, asset dispositions, payment of dividends, repurchase of stock, and
investments and covenants regarding profitability. The Company is also required
to be in compliance with the covenants of all other borrowing agreements. The
Company was in compliance with its bank covenants at December 31, 2000; however,
there can be no assurance that the Company will be in compliance with its bank
covenants in the future. If the Company does not remain in compliance with the
covenants and is unable to obtain a waiver of noncompliance from its bank, the
Company's financial condition and results of operations would be materially
adversely affected.

         On July 6, 2000, the Company entered into a Securities Purchase
Agreement with The Retirement Systems of

                                       28
<PAGE>   30

Alabama and certain of its affiliated funds (the "RSA facility"), under which
the Company borrowed $180 million of subordinated debt financing. The proceeds
from the financing were used to repay in full $123.9 million outstanding under
the CBT Facility and $15 million of borrowings from Transamerica Commercial
Finance Corporation, and to finance the Ideal Purchase. This subordinated debt
financing is comprised of $80 million bearing interest at 9.125%, due June 30,
2001, and $100 million bearing interest at 9.0%, payable in semi-annual
principal installments of $3.5 million plus interest installments commencing
December 31, 2000 and in semi-annual principal installments of $8.5 million
commencing December 31, 2007, with a final maturity date of June 30, 2010. The
RSA facility is secured by a second lien on the Company's and its subsidiaries'
North American and South American assets. The Company must meet certain
financial tests on a quarterly basis, and comply with certain other covenants,
including restrictions of incurrence of debt and liens, restrictions on asset
dispositions, payment of dividends, and repurchase of stock. The Company is also
required to be in compliance with the covenants of all other borrowing
agreements. The Company is in compliance with its subordinated debt financing
covenants; however, there can be no assurance that the Company will be in
compliance with such covenants in the future. If the Company does not remain in
compliance with the covenants in the Securities Purchase Agreement and is unable
to obtain a waiver of noncompliance from its subordinated lenders, the Company's
financial condition and results of operations would be materially adversely
affected. Amounts due on the $100 million long-term debt are $10.5 million in
2001, $7.0 million for each of the years 2002 through 2005, and $61.5 million
thereafter.

         On August 3, 2000, in connection with the acquisition of Ideal, the
Company assumed a $43 million borrowing facility with Lombard NatWest Limited
which is secured by substantially all of Ideal's accounts receivable, bears
interest at NatWest's base rate plus 1.5% and expires on June 26, 2001. This
facility was increased to $60 million in October 2000. There are no financial
covenant requirements. At December 31, 2000, approximately $32 million was
outstanding under the NatWest borrowing facility. The acquisition of Ideal was
funded through borrowings under the RSA facility.

         The Company is currently negotiating to refinance the $80 million RSA
note payable maturing on June 30, 2001, the CBT Facility maturing May 31, 2001,
the NatWest facility maturing on June 26, 2001, and to finance future growth.
If the Company is unable to obtain this financing, the Company's financial
condition and results of operations could be materially adversely affected.

         On October 16, 2000, the Company entered into a $13.3 million mortgage
agreement with Lombard NatWest Limited related to the acquisition of a building
for Ideal. The mortgage has a term of five years, bears interest at LIBOR plus
1.5% and is payable in quarterly installments of approximately $290,000, plus
interest, with a balloon payment of approximately $7.5 million due November
2005. Principal amounts due during each of the years 2001 through 2004 are
$1,160,000 and $8,660,000 is due in 2005. The Company has an interest rate swap
agreement that effectively converts the variable interest payable on the
mortgage to a fixed rate of 7.42% for a two-year period.

NOTE 6 - STOCK-BASED COMPENSATION PLANS:

STOCK OPTION PLANS

         In May of 1998, the Company adopted the 1998 Stock Plan (the "Plan")
which replaced the 1988 Amended and Restated Incentive Stock Plan (the "1988
Plan") and the 1993 Director Stock Option Plan (the "Director Plan").

         The Plan provides for the grant of stock options and stock purchase
rights to employees, directors and consultants of the Company at prices not less
than the fair value of the Company's Common Stock at the date of grant for
incentive stock options and prices not less than 85% of the fair value of the
Company's Common Stock for nonstatutory stock options and stock purchase rights.
Under the Plan, the Company has reserved for issuance a total of 3,039,327
shares of Common Stock plus 272,508 shares of Common Stock which were reserved
but unissued under the 1988 Plan and 52,500 shares of Common Stock which were
reserved but unissued under the Director Plan. The maximum aggregate number of
shares of Common Stock which may be optioned and sold under the Plan is
4,381,901 shares, plus an annual increase to be added on January 1 of each year
beginning in 1999, equal to the lesser of (i) 600,000 shares, (ii) 4% of the
outstanding shares on such date, or (iii) a lesser amount determined by the
Board of Directors, subject to adjustment upon changes in capitalization of the
Company. Since inception, the Company has reserved 7,035,483 shares of Common
Stock for issuance under the aggregate of all stock option plans.

         All stock options become exercisable over a vesting period as
determined by the Board of Directors and expire over terms not exceeding ten
years from the date of grant. If an optionee ceases to be employed by the
Company, the optionee may, within one month (or such other period of time, as
determined by the Board of Directors, but not exceeding three months) exercise
options to the extent vested.

         As part of the Plan, the Board of Directors adopted a Management
Incentive Program (the "Program") for key employees. Under this Program, options
for 193,500, 210,000 and 60,750 shares of Common Stock were granted in 2000,

                                       29
<PAGE>   31

1999 and 1998, respectively. The Program provides for ten-year option terms with
vesting at the rate of one tenth per year, with potential for accelerated
vesting based upon attainment of certain performance objectives. The options
lapse ten years after the date of grant or such shorter period as may be
provided for in the stock option agreement.

         Options granted under the Director Plan prior to May 1998 and
outstanding at December 31, 2000 total 112,500. Under the Director Plan, 112,500
options were granted in 1993 at an exercise price of $5.33 per share, and 30,000
options were granted in 1996 at an exercise price of $4.67 per share. In 1997,
30,000 options were granted at an exercise price of $8.42 per share. In 1998,
22,500 options were granted at an exercise price of $5.00 per share. On August
5, 1999, the Board of Directors approved the vesting in full of all options
currently held by the Directors and modified the Plan to immediately vest all
future Board of Directors options at the time they are granted.

         In 2000, the number of shares of Common Stock reserved under the Plan
were not sufficient to accommodate the Company's recent growth through
acquisitions and related key employee retention efforts. To induce certain key
employees to accept employment with the Company, the Company issued a total of
763,536 nonqualified stock options outside the provisions of the Plan, and
543,018 of these options were outstanding at December 31, 2000, net of
cancellations, and are included in the table below.

         The following table presents all stock option activity:
<TABLE>
<CAPTION>

                                                                                 Options Outstanding
                                                                         ---------------------------------
                                                    Options                                   Weighted
                                                 Available for                                 Average
                                                     Grant                Shares            Exercise Price
                                                 -------------           ---------          --------------
<S>                                              <C>                     <C>                <C>
Balance at December 31, 1997                         267,108             2,288,189              $ 5.49
Increase in options available for grant              750,000                     -                   -
Options canceled                                     736,575              (736,575)             $ 5.55
Options granted                                   (1,156,200)            1,156,200              $ 5.43
Options exercised                                          -              (166,194)             $ 4.76
                                                  ----------             ---------              ------
Balance at December 31, 1998                         597,483             2,541,620              $ 5.49
                                                  ==========             =========              ======

Increase in options available for grant              534,854                     -                   -
Options canceled                                     666,882              (666,882)             $ 5.61
Canceled options not available for grant            (612,357)                    -              $ 5.58
Options granted                                   (1,072,800)            1,072,800              $ 4.66
Options exercised                                          -              (352,331)             $ 4.74
                                                  ----------             ---------              ------
Balance at December 31, 1999                         114,062             2,595,207              $ 5.50
                                                  ==========             =========              ======

Increase in options available for grant            1,754,474                     -                   -
Options canceled                                     261,732              (482,250)             $ 6.83
Canceled options not available for grant             (67,500)                    -              $ 5.67
Options granted                                   (2,182,464)            2,946,000              $12.87
Options exercised                                          -              (621,840)             $ 5.29
                                                  ----------             ---------              ------
Balance at December 31, 2000                        (119,696)            4,437,117              $10.11
                                                  ==========             =========              ======
</TABLE>

         At December 31, 2000, 718,925 options were exercisable under these
Plans. Upon the adoption of the 1998 Stock Plan, canceled options under the 1988
Plan are not available for future grants.


                                       30
<PAGE>   32


The following table summarizes information about stock options outstanding for
all plans at December 31, 2000:

<TABLE>
<CAPTION>

                                              OPTIONS OUTSTANDING                                 OPTIONS EXERCISABLE
                           ----------------------------------------------------------    ---------------------------------------
                             Number of
                              Options              Weighted
                            Outstanding            Average
                               As of              Remaining             Weighted          Number of Shares        Weighted
  Range of Exercise         December 31,       Contractual Life          Average         Exercisable As of         Average
        Prices                  2000               In Years          Exercise Price      December 31, 2000      Exercise Price
-----------------------     ------------       ----------------      --------------      -----------------      --------------
<S>                         <C>                <C>                   <C>                 <C>                    <C>
$ 4.29 - $ 4.67                 571,538             4.75                 $ 4.37                178,839               $4.40
$ 4.83 - $ 5.25                 584,625             4.26                   4.91                163,878                4.98
$ 5.33 - $ 6.25                 599,704             3.47                   5.95                259,958                5.84
$ 6.33 - $ 8.08                 839,250             4.25                   7.60                 93,750                7.18
$ 8.42 - $13.81                 766,750             4.85                  11.97                 22,500                8.42
$14.75 - $17.21                 642,750             4.60                  15.80                      0                   0
$19.31 - $24.13                 429,500             4.79                  23.63                      0                   0
$24.38 - $24.38                   3,000             4.83                  24.38                      0                   0
                              ---------                                                        -------
                              4,437,117             4.42                  10.11                718,925                5.54
                              =========                                                        =======
</TABLE>

EMPLOYEE STOCK PURCHASE PLAN

         The Employee Stock Purchase Plan ("ESPP") provides for automatic annual
increases in the number of shares reserved for issuance on January 1 of each
year beginning in 1999 by a number of shares equal to the lesser of (i) 225,000
shares, (ii) 1.5% of the outstanding shares on such date, or (iii) a lesser
amount determined by the Board of Directors, subject to adjustment upon changes
in capitalization of the Company.

         The Company has reserved 1,353,498 shares of Common Stock for issuance
to all eligible employees under its ESPP. Sales made through this plan will be
at the lower of 85% of market price at the date of purchase or on the first day
of each six-month offering period in the prior two years. A total of 1,085,183
shares have been issued under this plan as of December 31, 2000.

FAIR VALUE DISCLOSURES

         The Company applies APB Opinion 25 and related interpretations in
accounting for its plans. Accordingly, no compensation cost has been recognized
for its plans, all of which are fixed plans. To determine the additional pro
forma disclosures required by SFAS 123 for the stock option plans, the fair
value of each option grant used for calculating pro forma net income is
estimated on the date of grant using the Black-Scholes multiple option-pricing
model. The following weighted average assumptions were used for grants in 2000,
1999 and 1998, respectively: expected volatility of 68%, 35% and 35%; risk free
interest rate of 5.8%, 4.9% and 5.0% and expected lives of 3.69, 3.85 and 3.79
years. The Company has not paid dividends and assumed no dividend yield. The
weighted average fair value of those stock options granted in 2000, 1999 and
1998 was $6.68, $2.26 and $2.64 per option, respectively. The fair value of each
ESPP purchase right is estimated on the beginning of the offering period using
the Black-Scholes option-pricing model with substantially the same assumptions
as the option plans but expected lives of 0.5 years. The weighted average fair
value of those purchase rights granted in 2000, 1999 and 1998 was $3.56, $2.04
and $1.97 per right, respectively. Had compensation cost for the Company's two
stock-based compensation plans been determined based on the fair value at the
grant dates for awards in 2000, 1999 and 1998 under those plans consistent with
the provisions of SFAS 123, the Company's net income and earnings per share
would have been reduced as presented below (in thousands, except per share
data):

<TABLE>
<CAPTION>
                                                             2000                1999              1998
                                                           -------             -------            ------
<S>                                                        <C>                 <C>                <C>
               Net income:
                    As reported                            $17,237              $8,930            $6,075
                    Pro forma                              $14,603              $8,126            $5,499


</TABLE>


                                       31
<PAGE>   33

<TABLE>
<CAPTION>

                                                             2000                1999              1998
                                                           -------             -------            ------
<S>                                                        <C>                 <C>                <C>
               Earnings per share:
                    As reported
                      Basic                                $ 1.17               $ 0.66               $ 0.46
                      Diluted                              $ 1.05               $ 0.65               $ 0.46
                    Pro forma
                      Basic                                $ 1.00               $ 0.60               $ 0.42
                      Diluted                              $ 0.89               $ 0.60               $ 0.41
</TABLE>

         Because additional stock options and stock purchase rights are expected
to be granted each year and this pro forma presentation includes only the effect
of options granted subsequent to December 31, 1994, the above pro forma
disclosures are not considered by management to be representative of pro forma
effects on reported financial results for future years.

NOTE 7 - INCOME TAXES:

         The provision for income taxes consists of the following (in
thousands):

<TABLE>
<CAPTION>

                                                             2000                1999              1998
                                                           -------             -------            ------
<S>                                                        <C>                 <C>                <C>
Current:
         Federal                                           $10,904              $4,264              $5,070
         State                                               2,422                 747                 790
         Foreign                                             1,990                 349                  17
                                                           -------              ------              ------
                                                            15,316               5,360               5,877
Deferred:
         Federal                                            (2,268)               (697)             (1,195)
         State                                                (510)                256                (282)
         Foreign                                               (58)                293                   -
                                                           -------              ------             -------
                                                           $12,480              $5,212             $ 4,400
                                                           =======              ======             =======
</TABLE>

         Deferred tax assets (liabilities) comprise the following (in
thousands):

<TABLE>
<CAPTION>
                                                             2000                1999              1998
                                                           -------             -------            ------
<S>                                                        <C>                 <C>                <C>
        Bad debt, sales and warranty reserves              $ 4,151              $1,914             $1,598
        Inventory reserves and basis differences             2,342               1,860              2,347
        Compensation accruals and reserves                     305                 228                261
        State taxes, net of federal benefit                    409                 265                198
        Other                                                  688                 322                600
                                                           -------              ------             ------
             Gross deferred tax assets                       7,895               4,589              5,004
                                                           -------              ------             ------

        Basis differential in assets                             -                   -                (89)
        Unrealized foreign gain                               (275)               (298)                 -
        Depreciation                                          (564)                (71)              (843)
                                                           -------              ------             ------
             Gross deferred tax liabilities                   (839)               (369)              (932)
                                                           -------              ------             ------
             Net deferred tax asset                        $ 7,056              $4,220             $4,072
                                                           =======              ======             ======
</TABLE>

         The net deferred tax asset represents temporary differences for future
tax deductions which can generally be realized by carryback to taxable income in
prior years. Net deferred tax assets are included in prepaid expenses and other
assets at December 31, 2000, 1999 and 1998.

         The tax benefit associated with dispositions from employee stock plans
for 2000 is approximately $1,900,000, which was recorded to additional paid-in
capital and a reduction to taxes payable.

                                       32
<PAGE>   34

         A reconciliation of the Federal statutory tax rate to the effective tax
rate follows:

<TABLE>
<CAPTION>
                                                             2000                1999              1998
                                                           -------             -------            ------
<S>                                                        <C>                 <C>                <C>
Federal statutory rate                                      35.0%               35.0%              35.0%
State income taxes, net of Federal tax
    benefit and credits                                      4.2%                4.6%               4.1%
Foreign tax net of credits                                   0.2%                0.5%               0.0%
Other                                                        2.6%                2.3%               2.9%
                                                            -----               -----              -----
Total                                                       42.0%               42.4%              42.0%
                                                            =====               =====              =====

</TABLE>


NOTE  8 - COMMITMENTS AND CONTINGENCIES:

         The Company leases its facilities under cancelable and noncancelable
operating lease agreements. The leases expire at various times through 2010 and
contain renewal options. Certain of the leases require the Company to pay
property taxes, insurance, and maintenance costs.

         The Company leases certain equipment under capitalized leases with such
equipment amounting to $2,795,000 less accumulated depreciation of $120,000 at
December 31, 2000. Amortization expense on assets subject to capitalized leases
was $88,000 for the year ended December 31, 2000. The capitalized lease terms
range from 32 months to 42 months.

         The following is a summary of commitments under non-cancelable leases:

<TABLE>
<CAPTION>
                                                                       CAPITALIZED          OPERATING
                     YEAR ENDING DECEMBER 31,                             LEASES              LEASES
         -------------------------------------------------             -----------          ---------
                                                                               (in thousands)
<S>                                                                    <C>                  <C>
         2001                                                             $  912             $ 5,356
         2002                                                                916               4,430
         2003                                                                617               2,753
         2004                                                                  -               2,101
         2005                                                                  -               1,349
         2006 and beyond                                                       -               1,615
                                                                          ------             -------
         Total minimum lease payments                                      2,445             $17,604
                                                                                             =======
         Less:  imputed interest                                            (323)
                                                                          ------
         Present value of minimum lease payments                          $2,122
                                                                          ======
</TABLE>

         Total operating lease expense was $4,718,000, $2,797,000 and $2,920,000
for the years ended December 31, 2000, 1999 and 1998, respectively.

         The Company is subject to legal proceedings and claims that arise in
the normal course of business. Management believes that the ultimate resolution
of such matters will not have a material adverse effect on the Company's
financial position or results of operations.

NOTE 9 - TRANSACTIONS WITH RELATED PARTIES:

         Glen E. Penisten, a director of the Company, is a director of Pinnacle
Systems, Inc. ("Pinnacle") and Network Peripherals Inc., ("NPI"). Gordon A.
Campbell, a director of the Company, is a director of 3Com Corporation ("3Com").
Sales to these parties and purchases of inventory from these parties for the
three years ended December 31, 2000 and accounts receivable at December 31, 2000
and 1999 are summarized below:

                                       33
<PAGE>   35

<TABLE>
<CAPTION>
                                                                   (In thousands)
                                                 ----------------------------------------------------
         SALES:                                       2000             1999               1998
                                                 ---------------  ----------------  -----------------
<S>                                  <C>         <C>              <C>               <C>
                                     Pinnacle        $3,345           $3,645             $9,590
                                     NPI                  -            1,446              8,241
                                     3Com                 -                -              1,528
         ACCOUNTS RECEIVABLE:

                                     Pinnacle           355                -                  -
         INVENTORY PURCHASED:

                                     Pinnacle           199            1,150              2,169
                                     NPI                  -                -                546
                                     3Com               364                -                  -
</TABLE>


         The Company believes that terms of these transactions were no less
favorable than reasonably could be expected to be obtained from unaffiliated
parties.

NOTE 10 - SALARY SAVINGS PLAN:

         The Company has a Section 401(k) Plan (the "Plan") which provides
participating employees an opportunity to accumulate funds for retirement and
hardship. Participants may contribute up to 15% of their eligible earnings to
the Plan. The Company may elect to make matching contributions equal to a
discretionary percentage of participants' contributions up to the statutory
maximum of participants' eligible earnings. The Company has not made any
contributions to the Plan.

NOTE 11 - GEOGRAPHIC INFORMATION:

         The Company operates in one industry segment and markets its products
worldwide through its own direct sales force. The Company attributes revenues
from customers in different geographic areas based on the location of the
customer. Sales in the U.S. were 57% and 82% of total sales for the years ended
December 31, 2000 and 1999, respectively.

         Geographic information consists of the following:

<TABLE>
<CAPTION>
                                                                                   (in thousands)
                                                                         ----------------------------------
                                                                            2000                    1999
                                                                         ----------              ----------
<S>                                                                      <C>                      <C>
          Net sales:
              North America                                              $1,281,967              $  996,424
              Latin America                                                 231,915                  61,851
              Europe                                                        290,220                       -
                                                                         ----------              ----------
                  Total                                                  $1,804,102              $1,058,275
                                                                         ==========              ==========
</TABLE>

         The following table presents long-lived assets located in the Company's
country of domicile and located in all foreign countries.

 <TABLE>
<CAPTION>
                                                                                    December 31,
                                                                         ----------------------------------
                                                                            2000                    1999
                                                                         ----------              ----------
<S>                                                                      <C>                      <C>
          Long -lived assets:
              United States                                              $   47,519              $   22,416
              United Kingdom                                                 49,758                       -
              Other foreign countries                                         2,316                   1,869
                                                                         ----------              ----------
                  Total                                                  $   99,593              $   24,285
                                                                         ==========              ==========

</TABLE>


                                       34
<PAGE>   36


    ELECTED QUARTERLY FINANCIAL DATA FROM CONTINUING OPERATIONS (UNAUDITED):

                    (in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                                       Quarter Ended
                               ----------------------------------------------------------------------------------------------
                                Mar. 31,     June 30,    Sept. 30,   Dec. 31,     Mar.      June 30,   Sept. 30,    Dec. 31,
                                  1999         1999        1999        1999     31, 2000      2000        2000        2000
                               -----------  ----------  ----------  ----------  ---------   ---------  ----------  ----------
<S>                            <C>          <C>         <C>         <C>         <C>         <C>        <C>         <C>

Net sales..................... $ 219,599    $ 231,627   $283,359    $323,690    $ 366,270   $ 382,407  $ 511,007   $ 544,418
Cost of sales................    200,177      210,826    259,384     297,104      337,012     347,258    463,115     491,417
                               ---------    ---------   --------    --------    ---------   ---------  ---------   ---------
Gross profit.................     19,422       20,801     23,975      26,586       29,258      35,149     47,892      53,001
Selling, general and
  administrative expenses....     14,955       15,926     18,253      20,373       21,355      25,472     34,760      39,501
                               ---------    ---------   --------    --------    ---------   ---------  ---------   ---------
Income from continuing
  operations.................      4,467        4,875      5,722       6,213        7,903       9,677     13,132      13,500
Interest expense and other
  income.....................      1,224        1,198      1,553       1,791        2,369       2,826      4,019       5,919
                               ---------    ---------   --------    --------    ---------   ---------  ---------   ---------
Income from continuing
  operations before income
   taxes.....................      3,243        3,677      4,169       4,422        5,534       6,851      8,301       9,031
Provision for income
  taxes......................     (1,362)      (1,544)    (1,813)     (1,862)      (2,324)     (2,877)    (3,486)     (3,793)
                               ---------    ---------   --------    --------    ---------   ---------  ---------   ---------
Income from continuing
  operations.................  $   1,881    $   2,133   $  2,356    $  2,560    $   3,210   $   3,974      4,815       5,238
                               =========    =========   ========    ========    =========   =========  =========   =========

Earnings per share
  Basic......................  $    0.14    $    0.16   $   0.17    $   0.19    $    0.23   $    0.28  $    0.32   $    0.34
  Diluted....................  $    0.14    $    0.16   $   0.17    $   0.18    $    0.21   $    0.25  $    0.28   $    0.30
                               =========    =========   ========    ========    =========   =========  =========   =========
Shares used in per share
calculation
  Basic......................     13,398       13,418     13,644      13,794       13,964      14,267     14,856      15,604
                               =========    =========   ========    ========    =========   =========  =========   =========
  Diluted....................     13,515       13,473     13,817      13,934       14,981      15,752     17,275      17,652
                               =========    =========   ========    ========    =========   =========  =========   =========
</TABLE>



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         None.


                                       35
<PAGE>   37

                                    PART III

         Pursuant to Paragraph G(3) of the General Instructions to Form 10-K,
portions of the information required by Part III of Form 10-K are incorporated
by reference from the Company's Proxy Statement to be filed with the Commission
in connection with the 2001 Annual Meeting of Shareholders (the "Proxy
Statement").

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          (a)       Information concerning directors of the Company appears in
                    the Company's Proxy Statement, under Item 1 "Election of
                    Directors." This portion of the Proxy Statement is
                    incorporated herein by reference.

          (b)       EXECUTIVE OFFICERS OF THE REGISTRANT

                    The following table and descriptions identify and set forth
                    information regarding the Company's six executive officers:

<TABLE>
<CAPTION>

                  Name                     Age                  Position
                  ----                     ---                  --------
<S>                                        <C>  <C>
W. Donald Bell..........................   63   President, Chief Executive Officer and
                                                Chairman of the Board

Remo E. Canessa.........................   43   Vice President of Finance and Chief Financial Officer

Brian J. Clark..........................   47   Executive Vice President of Industrial Sales

Gary Gammon.............................   36   Senior Vice President of Commercial Sales

Philip M. Roussey.......................   58   Executive Vice President of Computer Products Marketing

Robert J. Sturgeon......................   47   Vice President of Information Technology

</TABLE>

                  W. Donald Bell has been President, Chief Executive Officer and
         Chairman of the Board of the Company since its inception in 1987. Mr.
         Bell has over thirty years of experience in the electronics industry.
         Mr. Bell was formerly the President of Ducommun Inc. and its
         subsidiary, Kierulff Electronics Inc., as well as Electronic Arrays
         Inc. He has also held senior management positions at Texas Instruments
         Incorporated, American Microsystems and other electronics companies.

                  Remo E. Canessa has been our Vice President of Finance and
         Chief Financial Officer since November 1998. From November 1993 to
         February 1998, Mr. Canessa was a part of our management team, serving
         first as Corporate Controller, then as Vice President of Finance and as
         our Acting Chief Financial Officer. From February 1998 to May 1998, Mr.
         Canessa was Vice President of Finance and Chief Financial Officer of
         Raster Graphics, Inc. From August 1998 to November 1998, Mr. Canessa
         was Vice President of Finance and Chief Financial Officer of Infoseek
         Corporation. Mr. Canessa has also held senior management positions at
         Ampex Corporation and Geoworks Corporation. Mr. Canessa is a Certified
         Public Accountant, and held various positions within Arthur Andersen
         LLP's audit and tax practices.

                                       36
<PAGE>   38

                  Brian J. Clark has been our Executive Vice President of
         Industrial Sales since September 1997. Mr. Clark was the Vice President
         of the Northern California Region of Arrow Electronics from January
         1988 to June 1997. Mr. Clark also held senior management positions at
         Kierulff and Wyle Electronics prior to that. Mr. Clark has over 26
         years in the electronics business.

                  Gary Gammon has been our Senior Vice President of Commercial
         Sales since June 1999. From 1994 to 1999, Mr. Gammon was Vice President
         of Sales for Gates/Arrow Distributing, a distributor of computer
         systems, peripherals and software. While at Gates/Arrow, Mr. Gammon
         also served as Vice President for the enterprise computing business and
         Vice President of technical sales. Prior to that time, Mr. Gammon was a
         sales executive with Data General.

                  Philip M. Roussey has been our Executive Vice President of
         Computer Products Marketing since March 1993. Prior to that time, Mr.
         Roussey was our Vice President of Marketing since our inception in
         1987. Prior to joining Bell Microproducts, Mr. Roussey was Corporate
         Vice President of Marketing of Kierulff Electronics during 1987, and
         from 1982 to 1986, Mr. Roussey held the position of Vice President of
         Computer Products at Kierulff Electronics.

                  Robert J. Sturgeon has been our Vice President of Information
         Technology since July 2000. Prior to that time, Mr. Sturgeon was our
         Vice President of Operations since 1992. Mr. Sturgeon was formerly
         Director of Information Services for Disney Home Video from January
         1991 to February 1992. Prior to that time, Mr. Sturgeon served as
         Management Information Services ("MIS") Director for Paramount
         Pictures' Home Video Division from June 1989 to January 1991 and as a
         Marketing Manager for MTI Systems, a division of Arrow Electronics
         Inc., from January 1988 to June 1989. Other positions Mr. Sturgeon has
         held include Executive Director of MIS for Ducommun where he was
         responsible for 10 divisions, including Kierulff Electronics.

     (c) Information concerning Compliance with Section 16(a) of the Securities
         Exchange Act of 1934 appears in the Company's Proxy Statement, under
         the heading "Compliance with Section 16(a) of the Securities Exchange
         Act of 1934," and is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

         Information concerning executive compensation appears in the Company's
Proxy Statement, under the caption "Executive Compensation," and is incorporated
herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information concerning the security ownership of certain beneficial
owners and management appears in the Company's Proxy Statement, under Item 1
"Election of Directors," and is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information concerning certain relationships and related transactions
appears in the Company's Proxy Statement, under Item 1 "Election of Directors,"
and is incorporated herein by reference.

                                       37
<PAGE>   39

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS OF FORM 8-K

(a)      The following documents are filed as part of this Form 10-K:

         (1)      Consolidated Financial Statements

         The financial statements (including the notes thereto) listed in the
Index to Consolidated Financial Statement Schedule (set forth in Item 8 of Part
II of this form 10-K) are filed as part of this Annual Report on Form 10-K.

         (2)      Consolidated Financial Statement Schedule

                  II - Valuation and Qualifying Accounts and Reserves   page 40

         Schedules not listed above have been omitted because they are not
required or the information required to be set forth therein is included in the
Consolidated Financial Statements or Notes to Consolidated Financial Statements.

         (3)      Exhibits - See Exhibit Index on page following signatures

(b)      Reports on Form 8-K.

         The following reports on Form 8-K were filed during the quarter ended
December 31, 2000:

    1.   Form 8-K/A filed October 17, 2000, filing under Item 7 the financial
         statements of an acquired business and pro forma financial information.

    2.   Form 8-K filed October 19, 2000, reporting under Item 5 announcement of
         third quarter financial results.

    3.   Form 8-K/A filed October 27, 2000, filing under Item 7 a Consent of
         Independent Auditors.

(c)      Exhibits.  See Item 14(a) above.

(d)      Financial Statements Schedules.  See Item 14(a) above.



                                       38
<PAGE>   40

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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 on March 22, 2001.

                                      BELL MICROPRODUCTS INC.


                        By: /s/ Remo E. Canessa
                           -------------------------------------------------
                           Remo E. Canessa
                           Chief Financial Officer and Vice President of Finance
                           (Principal Financial and Accounting Officer)

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints W. Donald Bell and Remo E. Canessa and
each of them, jointly and severally, his attorneys-in-fact, each with full power
of substitution, for him in any and all capacities, to sign any and all
amendments to this Report on Form 10-K, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report on Form 10-K has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
            SIGNATURE                                         TITLE                                        DATE
-------------------------------     --------------------------------------------------------    ---------------------------
<S>                                 <C>                                                         <C>
   /s/ W. Donald Bell               Chairman of the Board, President and Chief Executive         March 22, 2001
-------------------------------     Officer (Principal Executive Officer)
(W. Donald Bell)

   /s/ Remo E. Canessa              Vice President of Finance and Chief Financial Officer        March 22, 2001
 ------------------------------     (Principal Financial and Accounting Officer)
(Remo E. Canessa)

   /s/ Gordon A. Campbell           Director                                                     March 22, 2001
-------------------------------
(Gordon A. Campbell)

   /s/ Eugene Chaiken               Director                                                     March 22, 2001
-------------------------------
(Eugene Chaiken)

   /s/ Edward L. Gelbach            Director                                                     March 22, 2001
-------------------------------
(Edward L. Gelbach)

   /s/ James E. Ousley              Director                                                     March 22, 2001
-------------------------------
(James E. Ousley)

   /s/ Glenn E. Penisten            Director                                                     March 22, 2001
-------------------------------
(Glenn E. Penisten)

</TABLE>

                                       39
<PAGE>   41


                                                                     SCHEDULE II

                             BELL MICROPRODUCTS INC.

                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                         ALLOWANCE FOR DOUBTFUL ACCOUNTS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                Additions
                                      Balance at                               Charged to
                                     Beginning of                               Costs and          Deductions-          Balance at
   Year Ended December 31,              Period              Other(1)            Expenses           Write-offs         End of Period
-------------------------------    -----------------    -----------------    ----------------    ----------------     --------------
<S>                                <C>                  <C>                  <C>                 <C>                  <C>
2000                                 $   4,986             $   1,991            $   9,958          $   (4,104)          $   12,831
1999                                     3,486                     -                6,896              (5,396)               4,986
1998                                     1,331                     -                4,630              (2,475)               3,486

</TABLE>

(1) Balance consists of allowance for doubtful accounts related to the
acquisitions of Ideal Hardware Limited and Rorke Data, Inc.



                                       40
<PAGE>   42

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
NUMBER   DESCRIPTION OF DOCUMENT
------   -----------------------
<S>      <C>
3.1      Amended and Restated Articles of Incorporation of Registrant -
         incorporated by reference to exhibit filed with the Registrant's Report
         on Form 10-Q for the quarter ended September 30, 2000.

3.2      Amended and Restated Bylaws of Registrant - incorporated by reference
         to exhibit filed with the Registrant's Registration Statement on Form
         S-1 (File No. 33-60954) filed on April 14, 1993 and which became
         effective on June 14, 1993.

4.1      Specimen Common Stock Certificate of the Registrant - incorporated by
         reference to exhibit filed with the Registrant's Registration Statement
         on Form S-1 (File No. 33-60954) filed on April 14, 1993 and which
         became effective on June 14, 1993.

4.2      Amended and Restated Registration Rights Agreement dated June 11, 1992
         between Registrant and certain investors named therein, as amended -
         incorporated by reference to exhibit filed with the Registrant's Report
         on Form 10-K for the fiscal year ended December 31, 1993.

10.1*    1998 Stock Plan - incorporated by reference to exhibit filed with the
         Registrant's Report on Form S-8 (File No. 333-58053).

10.2*    The form of Option Agreement used under the 1998 Stock Plan -
         incorporated by reference to exhibit filed with the Registrant's Report
         on Form S-8 (File No. 333-58053).

10.3     Employee Stock Purchase Plan, as amended through May 21, 1998 -
         incorporated by reference to exhibit filed with the Registrant's Report
         on Form S-8 (File No. 333-58053).

10.4     The form of Option Agreement used under the Employee Stock Purchase
         Plan - incorporated by reference to exhibit filed with the Registrant's
         Registration Statement on Form S-8 (File No. 33-83398).

10.5     Registrant's 401(k) Plan - incorporated by reference to exhibit filed
         with the Registrant's Registration Statement on Form S-1 (File No.
         33-60954).

10.6     Lease dated March 17, 1992 for Registrant's facilities at 1941 Ringwood
         Avenue; Suite 100, San Jose, California - incorporated by reference to
         exhibit filed with the Registrant's Registration Statement on Form S-1
         (File No. 33-60954).

10.7     Second Amendment to Third Amended and Restated Credit Agreement dated
         as of July 21, 1999 - incorporated by reference to exhibit filed with
         the Registrant's Report on Form 10-Q for the quarter ended June 30,
         1999.

10.8     Third Amended and Restated Credit Agreement dated as of November 12,
         1998, conformed to include the First Amendment thereto, effective May
         14, 1999 - incorporated by reference to exhibit filed with the
         Registrant's Report on Form 10-Q for the quarter ended June 30, 1999.

10.9     Form of Indemnification Agreement - incorporated by reference to
         exhibit filed with the Registrant's Registration Statement on Form S-1
         (File No. 33-60954).

10.10    IBM Authorized Distributor Agreement dated May 17, 1993 between IBM
         Corporation and Registrant - incorporated by reference to exhibit filed
         with the Registrant's Registration Statement on Form S-1 (File No.
         33-60954).
</TABLE>

<PAGE>   43


<TABLE>
<S>      <C>
10.11    Lease dated February 17, 1999 for Registrant's facilities at 4048
         Castle Avenue, New Castle, Delaware - incorporated by reference to
         exhibit filed with the Registrant's Report on Form 10-Q for the quarter
         ended March 31, 1999.

10.12    Third Amendment and Restated Credit Agreement dated as of November 12,
         1998 by and among the Registrant, the Banks named therein and
         California Bank & Trust, as Agent for the Banks - incorporated by
         reference to exhibit filed with the Registrant's Report on Form 8-K
         filed on November 30, 1998, as amended on Form 8-K/A filed on December
         11, 1998.

10.13    Asset Purchase Agreement dated as of November 5, 1998 by and between
         the Company, Almo Corporation, Almo Distributing Pennsylvania, Inc.,
         Almo Distributing Maryland, Inc., Almo Distributing Minnesota, Inc.,
         Almo Distributing Wisconsin, Inc. and Almo Distributing, Inc. -
         incorporated by reference to exhibit filed with the Registrant's Report
         on Form 8-K filed on November 30, 1998, as amended on Form 8-K/A filed
         on December 11, 1998.

10.14    Fourth Amendment to Third Amended and Restated Credit Agreement dated
         December 8, 1999 by and among the Registrant, the Banks named therein
         and California Bank & Trust, as agent for the Banks - incorporated by
         reference to exhibit filed with the Registrant's Report on Form 10-K
         for the fiscal year ended December 31, 1999.

10.15    Fifth Amendment to Third Amended and Restated Credit Agreement dated
         December 31, 1999 by and among the Registrant, the Banks named therein
         and California Bank & Trust, as agent for the Banks - incorporated by
         reference to exhibit filed with the Registrant's Report on Form 10-K
         for the fiscal year ended December 31, 1999.

10.16    Lease dated August 1, 1999 for Registrant's facilities at 1941 Ringwood
         Avenue, Suite 200, San Jose, California - incorporated by reference to
         exhibit filed with the Registrant's Report on Form 10-K for the fiscal
         year ended December 31, 1999.

10.17    Asset Purchase Agreement between Bell Microproducts, Inc. and Pemstar
         Inc. April 30, 1999 - incorporated by reference to exhibit filed with
         the Registrant's Report on Form 8-K filed on June 23, 1999.

10.18    Amendment to Asset Purchase Agreement between Bell Microproducts, Inc.
         and Pemstar Inc. June 4, 1999 - incorporated by reference to exhibit
         filed with the Registrant's Report on Form 8-K filed on June 23, 1999.

10.19    Asset Purchase Agreement between Bell Microproducts - Future Tech,
         Inc., Future Tech International, Inc., Bell Microproducts, and Leonard
         Keller, dated May 14, 1999, as amended June 1, 1999 - incorporated by
         reference to exhibit filed with the Registrant's Report on Form 8-K
         filed on August 4, 1999.

10.20*   Management Retention Agreements between the Registrant and the
         following executive officers of the Registrant: W. Donald Bell and Remo
         E. Canessa - incorporated by reference to exhibit filed with the
         Registrant's Report on Form 10-Q for the quarter ended September 30,
         1999.

10.21    Waiver and Third Amendment to Third Amended and Restated Credit
         Agreement dated as of October 15, 1999 - incorporated by reference to
         exhibit filed with the Registrant's Report on Form 10-Q for the quarter
         ended September 30, 1999.

10.22    Distribution Agreement dated as of January 11, 2000 between the
         Registrant and International Business Machines Corporation -
         incorporated by reference to exhibit filed with the Registrant's form
         10-Q/A for the quarter ended September 30, 1999.

</TABLE>

<PAGE>   44


<TABLE>
<S>      <C>
10.23*   Employment Agreement dated as of July 1, 1999 between the Registrant
         and W. Donald Bell, the Registrant's Chief Executive Officer -
         incorporated by reference to exhibit filed with the Registrant's Report
         on Form 8-K filed on January 13, 2000.

10.24    Office and warehouse lease, dated March 21, 1991, as amended by
         Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and
         Amendment No. 5 relating to Rorke Data facilities in Eden Prairie,
         Minnesota - incorporated by reference to exhibit filed with the
         Registrant's Report on Form 10-Q for the quarter ended June 30, 2000.

10.25    Lease, dated June 16, 2000, relating to Bell Microproducts - Future
         Tech facilities in Miami, Florida - incorporated by reference to
         exhibit filed with the Registrant's Report on Form 10-Q for the quarter
         ended June 30, 2000.

10.26*   Management Retention Agreement dated March 20, 2000, between the
         Company and Lawrence Leong - incorporated by reference to exhibit filed
         with the Registrant's Report on Form 10-Q for the quarter ended June
         30, 2000.

10.27    Sixth Amendment to Third Amended and Restated Credit Agreement dated
         May 15, 2000 by among the Registrant, the Banks named therein and
         California Bank & Trust, as agent for the Banks - incorporated by
         reference to exhibit filed with the Registrant's Report on Form 10-Q
         for the quarter ended June 30, 2000.

10.28    Seventh Amendment to Third Amended and Restated Credit Agreement dated
         June 22, 2000 by and among the Registrant, the Banks named therein and
         California Bank & Trust, as Agent for the Banks - incorporated by
         reference to exhibit filed with the Registrant's Report on Form 10-Q
         for the quarter ended June 30, 2000.

10.29    Securities Purchase Agreement dated July 6, 2000 between the Registrant
         and The Retirement Systems of Alabama - incorporated by reference to
         exhibit filed with the Registrant's Report on Form 10-Q for the quarter
         ended September 30, 2000.

10.30    Stock Purchase Agreement dated July 17, 2000 between the Registrant and
         Interx Media PLC - incorporated by reference to exhibit filed with the
         Registrant's Report on Form 10-Q for the quarter ended September 30,
         2000.

10.31    Fourth Amended and Restated Credit Agreement dated as of October 10,
         2000, among Bell Microproducts, the listed financial institutions and
         California Bank & Trust, as agent - incorporated by reference to
         exhibit filed with the Registrant's Report on Form 10-Q for the quarter
         ended September 30, 2000.

10.32*   Management Retention Agreements between the Registrant and the
         following executive officers of the Registrant: Philip M. Roussey,
         Brian J. Clark, Gary Gammon and Robert J. Sturgeon.

10.33*   Employment Agreement dated as of October 18, 2000, between the
         Registrant and James E. Ousley.

21.1     Subsidiaries of the Registrant

23.1     Consent of PricewaterhouseCoopers LLP, independent accountants

24.1     Power of Attorney (Contained on Signature page of this Form 10-K).

</TABLE>

---------------
*  Management contract or compensatory plan, contract or arrangement required
   to be filed as an exhibit to this Form 10-K.