Brightpoint Announces Restatement of 2004 Financial Statements.PLAINFIELD Plainfield, city (1990 pop. 46,567), Union co., NE N.J.; settled 1684 by Friends, inc. as a city 1869. Formerly a residential city in the New York metropolitan area, it has become the urban center of 10 closely allied municipalities, with diversified industries, , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. . -- Brightpoint Brightpoint, Inc. (NASDAQ: CELL) is a leading global communications technology firm that specializes in the distribution of wireless devices and in providing customized logistics services to the wireless industry. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CELL): --Income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the and net income for the year ended December December: see month. 31, 2004, reduced by $2.5 million, or $0.13 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, due to errors related to the Company's operations in France and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. --Company intends to file an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Annual Report on Form 10-K/A on Monday Monday: see week. , May 9, 2005 --Company to announce financial results for the first quarter of 2005 as scheduled on Monday, May 9, 2005 --Annual Meeting of Shareholders scheduled for May 12 to be adjourned to June June: see month. 2, 2005 Brightpoint, Inc. (NASDAQ:CELL) announced today that it intends to file with the Securities and Exchange Commission ("SEC") an amended annual report on Form 10-K/A ("Form 10-K/A") for the year ended December 31, 2004. This Form 10-K/A will reflect the restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. ("Restatement") of the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge of Brightpoint, Inc. for the year ended December 31, 2004. The determination to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state the financial statements was made as a result of management's identification of errors related to the Company's operations in France and Australia. These errors were identified through the Company's continuing self-assessment Self-assessment in an organisational setting, according to the EFQM definition, refers to a comprehensive, systematic and regular review of an organisation's activities and results referenced against the EFQM Excellence Model. and self-testing of its internal control over financial reporting and during the monthly financial closing process relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our France and Australia operations in the first quarter of 2005. The Company has discussed these matters with our external auditors The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and they will be updating their reports as a result of the restatement. The Company has notified the Securities and Exchange Commission of its findings. The Company's operations in France receive mobile operator commission, subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. , bonus and residual Residual See:Residual value airtime air·time n. 1. The time during which a radio or television station is broadcasting. Also called airspace. 2. The time at which a radio or television program is broadcast. revenues as a result of subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. activations or subscriber upgrades generated by the Company's network of independent authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: retailers and the Company's directly owned retail stores. Due to errors made in recording these transactions, the Company's operations in France overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o revenue resulting in a related overstatement o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . In addition, certain other related adjustments were made in error, which did not have an impact on net income, but resulted in an overall understatement of accounts receivable and accounts payable during the year ended December 31, 2004. The Company's operations in Australia failed to identify and record certain vendor rebates related to a 2004 vendor program. This error resulted in an overstatement of cost of revenue and the understatement of vendor receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , that would have reduced accounts payable, resulting in an overstatement of accounts payable in the 2004 financial statements. The Company intends to correct the above accounting errors by decreasing revenue $6.2 million and increasing costs of revenue $200 thousand related to its operations in France and decreasing costs of revenue $1.7 million related to its operations in Australia. These corrections relate to the year ended December 31, 2004, with the exception of $968 thousand ($629 thousand, net of tax) which relate to the year ended December 31, 2003, but will be included in the restated results for December 31, 2004, based on materiality MATERIALITY. That which is important; that which is not merely of form but of substance. 2. When a bill for discovery has been filed, for example, the defendant must answer every material fact which is charged in the bill, and the test in these cases seems to . Additionally, bonuses previously paid to the named executive officers will be returned to the Company by the named executives on their own initiative. These bonuses, originally recorded in the amount of approximately $1.0 million, have been reflected as a reduction to selling, general and administrative expenses in the restated results, as a result of bonus targets relating to the 2004 bonus plan no longer having been met based upon the restated financial results. The anticipated impact of the Restatement on the Company's Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. as of December 31, 2004, and Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations and Cash Flows for the year ended December 31, 2004, is shown in the tables incorporated herein. In addition, management of the Company intends to revise its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, originally included in Management's Report on Internal Control Over Financial Reporting in the Company's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed on February February: see month. 3, 2005. In that report management concluded that the Company's internal control over financial reporting was effective as of December 31, 2004, notwithstanding the existence of significant deficiencies that were deemed by the Company's management to not be material weaknesses. Subsequent to filing its annual report on Form 10-K on February 3, 2005, the Company identified the above-referenced errors in its 2004 financial statements. Management has concluded that these errors resulted from material weaknesses in internal control in the Company's operations in France and Australia. The Company has implemented changes in procedures for the reporting of mobile operator commissions, subsidies and bonuses in its France operations and rebates earned on non-financial key performance metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees [1]. in its Australia operations and believes that these changes will assure proper recognition of these items. As part of the assessment of its internal controls over financial reporting, the Company has initiated immediate changes in processes in our France and Australia operations to correct the errors that occurred and to reduce the likelihood that similar errors could occur in the future. In addition, management of the Company, with the assistance of certain members of the Board of Directors, is reviewing the regional financial organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. , instituting new financial reporting and revenue recognition controls at all Brightpoint locations, performing supplementary detailed monthly review of accounts by regional and corporate management and executing more frequent internal audits. First Quarter 2005 Financial Results Webcast and Conference Call Brightpoint will announce its financial results for the quarter ended March 31, 2005, on Monday, May 9, 2005, prior to 7:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of time). At approximately 8:30 a.m. EDT, Brightpoint will conduct a conference call to review the Company's operations and financial performance and will answer participants' questions. Representing Brightpoint will be Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Laikin, Chairman and Chief Executive Officer, J. Mark Howell How´ell n. 1. The upper stage of a porcelian furnace. , President, and Lisa M. Kelley Kelley may refer to any of the following: People
For those who prefer to join the conference call telephonically, use the following information and dial in several minutes prior to the start of the call: U.S. toll-free dial-in number: 877-502-9276 International dial-in number: 913-981-5591 Following the live presentation, archives of the webcast of the first quarter 2005 financial results will be available through the Investors section of the Company's website at www.brightpoint.com for approximately one year. Annual Meeting of Shareholders The previously announced Annual Meeting of Shareholders that currently is scheduled to held at the Company's offices on May 12, 2005 is expected to be adjourned to June 2, 2005 at 9:00 a.m. at the Company's offices to permit shareholders an adequate opportunity to review the Form 10-K/A. About Brightpoint Brightpoint is one of the world's largest distributors of mobile phones. Brightpoint supports the global wireless telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and data industry, providing quickly deployed, flexible and cost effective solutions. Brightpoint's innovative services include distribution, channel management, fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. , eBusiness See e-business. solutions and other outsourced services that integrate seamlessly with its customers. Additional information about Brightpoint can be found on its website at www.brightpoint.com or by calling its toll-free Information and Investor Relations Investor relations The process by which the corporation communicates with its investors. line at 877-IIR-CELL (877-447-2355). Certain information in this press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding future events or the future performance of Brightpoint. These statements are only predictions and actual events or results may differ materially. Please refer to the documents the Company files, from time to time, with the Securities and Exchange Commission; including, the Company's most recent Form 10-K and the cautionary statements contained in Exhibit 99.1 thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. . These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in or implied by these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date these statements were made. Brightpoint undertakes no obligation to update any forward-looking statements contained in this press release. The anticipated impact of the Restatement on the Company's Consolidated Balance Sheet as of December 31, 2004, and Consolidated Statements of Operations and Cash Flows for the year ended December 31, 2004, is shown in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. tables below. Consolidated Statement of Operations See Income statement. The following table presents the anticipated effect of the Restatement on the Consolidated Statements of Operations for the year ended December 31, 2004:
(Amounts in thousands, except per share data)
Year Ended
December 31, 2004
-------------------------------
(As Previously (As Restated)
Reported)
Revenue
Distribution revenue $1,559,109 $1,559,109
Logistics services revenue 306,478 300,246
---------- ----------
Total revenue 1,865,587 1,859,355
Cost of revenue
Cost of distribution revenue 1,500,105 1,498,396
Cost of logistics services revenue 246,709 246,902
---------- ----------
Total cost of revenue 1,746,814 1,745,298
---------- ----------
Gross profit 118,773 114,057
Selling, general and administrative
expenses 84,775 83,361
Facility consolidation charge (benefit) (236) (236)
---------- ----------
Operating income from continuing
operations 34,234 30,932
Interest expense 1,870 1,870
Interest income (986) (986)
Impairment loss on long-term investment - -
Loss (gain) on debt extinguishment - -
Other expenses 1,860 1,860
---------- ----------
Income from continuing operations
before income taxes 31,490 28,188
Income tax expense 9,017 8,230
---------- ----------
Income from continuing operations
before minority interest 22,473 19,958
Minority interest - -
---------- ----------
Income from continuing operations 22,473 19,958
Discontinued operations:
Loss from discontinued operations (475) (475)
Loss on disposal of discontinued
operations (5,713) (5,713)
---------- ----------
Total discontinued operations (6,188) (6,188)
Income (loss) before cumulative effect
of a change in accounting principle 16,285 13,770
Cumulative effect of a change in
accounting principle, net of tax - -
---------- ----------
Net income (loss) $ 16,285 $ 13,770
---------- ----------
Basic per share:
Income from continuing operations $ 1.21 $ 1.08
Discontinued operations (0.33) (0.34)
Cumulative effect of a change in
accounting principle, net of tax - -
---------- ----------
Net income (loss) $ 0.88 $ 0.74
---------- ----------
Diluted per share:
Income from continuing operations $ 1.17 $ 1.04
Discontinued operations (0.32) (0.32)
Cumulative effect of a change in
accounting principle, net of tax - -
---------- ----------
Net income (loss) $ 0.85 $ 0.72
---------- ----------
Weighted average common shares
outstanding:
Basic 18,552 18,552
---------- ----------
Diluted 19,169 19,169
---------- ----------
Consolidated Balance Sheets
The following table presents the anticipated effect of the Restatement
on the Consolidated Balance Sheet as of December 31, 2004:
(Amounts in thousands, except per share data)
December 31, 2004
-------------------------------
(As Previously (As Restated)
Reported)
ASSETS
Current assets:
Cash and cash equivalents $ 72,120 $ 72,120
Pledged cash 13,830 13,830
Accounts receivable (less allowance
for doubtful accounts of $6,215) 144,106 148,321
Inventories 109,559 110,089
Contract financing receivable 14,022 14,022
Other current assets 20,641 23,132
---------- ----------
Total current assets 374,278 381,514
Property and equipment, net 27,503 27,503
Goodwill and other intangibles, net 21,981 21,981
Other assets 6,586 6,586
---------- ----------
Total assets $ 430,348 $ 437,584
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 191,820 $ 201,621
Accrued expenses 61,660 61,851
Unfunded portion of contract
financing receivable 23,375 23,375
Lines of credit - -
---------- ----------
Total current liabilities 276,855 286,847
---------- ----------
COMMITMENTS AND CONTINGENCIES
Minority interest - -
Shareholders' equity:
Preferred stock, $0.01 par value:
1,000 shares authorized; no shares
issued or outstanding - -
Common stock, $0.01 par value:
100,000 shares authorized; 19,499
issued as of 2004 195 195
Treasury stock, at cost, 1,606
shares (24,010) (24,010)
Additional paid-in capital 233,768 233,768
Retained earnings (deficit) (61,453) (63,968)
Accumulated other comprehensive
income (loss) 4,993 4,752
---------- ----------
Total shareholders' equity 153,493 150,737
---------- ----------
Total liabilities and shareholders'
equity $ 430,348 $ 437,584
---------- ----------
Consolidated Statement of Cash Flows
The following table presents the anticipated effect of the Restatement
on the Consolidated Statements of Cash Flows for the year ended
December 31, 2004:
(Amounts in thousands) Year Ended December 31, 2004
-------------------------------
(As Previously (As Restated)
Reported)
Operating activities
Net income (loss) $ 16,285 $ 13,770
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 10,815 10,815
Amortization of debt discount - -
Facility consolidation charge
(benefit) (236) (236)
Pledged cash requirements 3,212 3,212
Change in deferred taxes 609 563
Discontinued operations 6,188 6,188
Net cash used by discontinued
operations (1,290) (1,290)
Income tax benefits from
exercise of stock options 5,418 5,418
Gain (loss) on debt extinguishment - -
Minority interest - -
Cumulative effect of a change in
accounting principle, net of tax - -
Impairment loss on long-term
investment - -
Changes in operating assets and
liabilities, net of effects from
acquisitions and divestitures:
Accounts receivable (15,678) (19,744)
Inventories 2,100 1,588
Other operating assets (1,412) (2,103)
Accounts payable and accrued
expenses (18,370) (10,439)
----------- ----------
Net cash provided by operating
activities 7,641 7,742
Investing activities
Capital expenditures (8,343) (8,343)
Purchase acquisitions, net of cash
acquired (1,634) (1,634)
Cash effect of divestitures 576 576
Decrease in funded contract financing
receivables 4,398 4,398
Decrease (increase) in other assets (920) (920)
----------- ----------
Net cash provided (used) by investing
activities (5,923) (5,923)
Financing activities
Net proceeds (payments) on credit
facilities (16,500) (16,500)
Pledged cash requirements 5,000 5,000
Purchase of treasury stock (24,010) (24,010)
Repurchase of convertible notes - -
Proceeds from common stock issuances
under employee stock option and
purchase plans 1,013 1,013
----------- ----------
Net cash used by financing activities (34,497) (34,497)
Effect of exchange rate changes on cash
and cash equivalents 6,020 5,919
----------- ----------
Net increase (decrease) in cash and
cash equivalents (26,759) (26,759)
Cash and cash equivalents at beginning
of year 98,879 98,879
----------- ----------
Cash and cash equivalents at end of
year $ 72,120 $ 72,120
----------- ----------
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