Bell Industries Announces It Sent Letter Offering to Acquire the Coast Distribution System, Inc

Business Wire, Dec 15, 2005

EL SEGUNDO, Calif. -- Bell Industries, Inc. (AMEX:BI) said today it has sent a letter to the board of directors of The Coast Distribution System, Inc. (AMEX:CRV) offering to enter into negotiations to acquire the company by merger for $7.70 per share in cash. Bell's proposal represents a 15% premium over the past month's average closing price of $6.69 per share and would provide Coast stockholders with immediate liquidity at a premium to market and an immediate opportunity to maximize their investments. A copy of the letter is set forth below:

Bell Letter Dated December 14, 2005

To the Board of Directors
The Coast Distribution System, Inc.
350 Woodview Ave
Morgan Hill, CA  95037

Gentlemen:

    By letter dated December 6, 2005 (the "Offer Letter") to your
Chairman and Chief Executive Officer, Thomas R. McGuire, Bell
Industries, Inc. ("Bell") set forth a detailed proposal to enter into
a negotiated transaction to acquire 100% of the outstanding shares of
common stock of The Coast Distribution System, Inc. ("Coast") for
$7.16 in cash per share. This price per share represented a premium to
Coast shareholders of $0.65, or 10%, over the average closing per
share price of $6.51 for the month prior to the Offer Letter. To this
day, Bell has not received a formal response from Coast. The only
communication between our two companies was an extremely short
conversation between Mr. McGuire and myself on Sunday December 11,
2005, at which time Mr. McGuire made it quite clear that Coast had no
interest in exploring our proposal or any benefits which may accrue
from it to Coast's shareholders.

    On December 9, 2005, Coast announced that it would buy back an
additional $1.2 million of shares of its common stock, supplementing
its previously announced stock buyback program. In apparent response
to this announcement, on December 12, 2005, the closing price per
share of Coast common stock was $7.00. Furthermore, at one point since
the announcement of the stock buyback program, the price per share of
Coast common stock exceeded $7.50 per share in intra-day trading.

    The apparent failure of Coast to comply with its Form 10-Q
reporting requirements (Item 2 of Part II of Form 10-Q and Item 703 of
Regulation S-K) does not permit us to understand monthly purchase
levels of Coast's buyback program. The timing of the announcement of
the stock buyback program is curious and troublesome. We consequently
raise the question of whether or not Coast is seeking to protect the
interests of all of its shareholders and maximize value by offering to
buy additional shares of stock at a time when it has neither informed
its shareholders of our proposal nor formally responded to our offer.

    By way of this letter, Bell is reiterating its interest in
acquiring 100% of the outstanding shares of Coast common stock. In
addition, we are increasing our offer to $7.70 per share of common
stock. Our new offer represents a premium to Coast shareholders of
$1.01, or 15%, over the average closing per share price of $6.69 for
the month prior to this new offer.

    While the original Offer Letter contemplated a 45-day due
diligence period and a period of exclusivity, we are now prepared to
shorten the period of due diligence and defer the exclusivity
provisions until such time as we have entered into a definitive merger
agreement. We are prepared to initiate our abbreviated due diligence
period immediately and would further commence work to negotiate and
execute a definitive merger agreement while that review is taking
place.

    We trust you will agree that this proposal offers a unique and
timely opportunity for Coast's shareholders to realize full value for
their shares and that you will respond immediately and positively to
our proposal. We look forward to working with you to achieve what will
be a compelling transaction for your stockholders.

About Bell Industries, Inc.

Bell is comprised of three diversified business units: Bell Tech.logix, Recreational Products Group and J.W. Miller. Bell Tech.logix offers a comprehensive portfolio of technology products and managed lifecycle services, including planning, product sourcing, deployment and disposal, and support services. Bell's Recreational Products Group distributes after-market parts and accessories primarily to the recreational vehicle and boating markets. J.W. Miller manufactures and sells standard and custom magnetic components used in electronic applications for computer, medical, lighting and telecommunication equipment.

Forward-Looking Statements

Statements in this press release may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the company's filings with the Securities and Exchange Commission, including Factors That May Affect Future Results of Operations included in the Form 10-K for the year ended December 31, 2004 and Management's Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K for the year ended December 31, 2004 and the Form 10-Q for the quarter ended September 30, 2005. In addition, general industry and market conditions and growth rates and general economic conditions could affect such statements. Furthermore, there is the risk that this offer may not be accepted by The Coast Distribution System or, if accepted, the transaction will not be consummated. Any forward-looking statements speak only as of the date on which they are made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.