Bell Industries Sends Response Letter to Coast Distribution System's Board of Directors

Business Wire, Feb 17, 2006

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), expressing its desire to meet with members of Coast's board or Coast's financial advisor to discuss entering into negotiations to acquire the company. A copy of the letter is set forth below:

Bell Letter Dated February 17, 2006

The Coast Distribution System, Inc.
350 Woodview Avenue
Morgan Hill, CA  95037
Attn: Board of Directors

Gentlemen:

    Let us begin by stating that we were disappointed to learn that a
Special Committee of the Board of Directors of The Coast Distribution
System, Inc. (the "Company") has rejected our proposal. We were also
quite surprised, to say the least, to hear the announcement on
February 3, 2006 that the Company responded to our offer to enter into
a negotiated acquisition by adopting a Shareholder Rights Plan. We do
not believe such a response is constructive or in the best interest of
the Company's stockholders.

    In our experience, the purpose of a Shareholder Rights Plan is to
protect the Company's stockholders from unfair or coercive takeover
proposals. It appears that the Board of Directors has misinterpreted
our desire to enter into good-faith discussions regarding a negotiated
transaction as a hostile attempt to takeover the Company. On the
contrary, our aim was and is to negotiate a transaction on a friendly
basis. If the Board of Directors or its financial advisor were willing
to meet with us and engage in a friendly process, we query what need
would there be for the change-in-control protection conferred by a
Shareholder Rights Plan? We believe that the Board of Directors is
thwarting an opportunity for the Company's stockholders to unlock the
full value of their investment.

    Our good-faith intentions are evidenced by the fact that we have
substantially increased our cash offer price and have expressed our
willingness to shorten the period of due diligence and to defer the
exclusivity provisions until such time as we have entered into a
definitive agreement. Since the Company's announcement on January 6,
2006 that it had retained Seven Hills Partners LLC ("Seven Hills") as
its financial advisor, we have tried numerous times, albeit
unsuccessfully, to establish a dialogue with Seven Hills in order to
discuss our proposal offer and to begin a due diligence review. If
Seven Hills was truly retained to fairly evaluate all offers, then why
have they continuously rebuffed our attempts to engage in meaningful
discussions and failed to provide us with any information despite our
willingness to enter into a confidentiality agreement? In fact, we
have contacted Seven Hills eight times and have received no
information or any indication that we will ever be provided with
information that a financial advisor would typically provide to an
interested purchaser.

    We are also troubled by the curious timing of the announcement of
the Company's stock buyback program and the idea that the Company is
using the artificial increase in the price of the stock due to the
buybacks to make our offer appear inadequate. As we have previously
stated, we are willing to consider circumstances that may justify a
further increase in our offer.

    The Company has gone to great lengths to let stockholders and
other interested parties know that despite the adoption of the
Shareholder Rights Plan, it is willing to consider a Qualified Offer
(as defined in the Shareholder Rights Plan), subject to several
conditions designed to ensure that the Company's stockholders are
treated fairly. It is ironic, indeed, that although our offer
satisfies what we believe to be the most important of these conditions
for stockholders, the Special Committee of the Board of Directors
continues to publicly state that our proposal is not in the best
interest of the Company's stockholders.

    We are prepared and eager to meet with the members of the Board of
Directors or its financial advisor at any time to negotiate a
transaction. However, if we do not hear back from the Board of
Directors or the financial advisor, we will assume that the Company is
not interested in engaging in discussions. While we believe our offer
provides a unique and timely opportunity for the Company's
stockholders to realize the full value for their shares, we trust that
you will publicly articulate the Company's current outlook for
expected financial performance, dividend continuation and product
strategy so that all stockholders will be adequately informed and can
appropriately assess value.

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.