Brightpoint Announces Restatement of Financial Statements Relating to Accounting for Certain Insurance Premiums.Business Editors INDIANAPOLIS--(BUSINESS WIRE)--Nov. 13, 2001 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) announced that it will 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 its annual financial statements for 1998, 1999, 2000 and the interim periods of 2001. In 1998, the Company purchased an insurance policy that provided coverage for both retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a and prospective occurrences. The retroactive occurrences related primarily to previously reported (October October: see month. 2, 1998) losses the Company had sustained in its trading division, an operation that the Company closed in 1998. The Company recorded the premiums on this policy as expense over the prospective policy period. The Company has responded to requests for information and a subpoena subpoena (səpē`nə) [Lat.,=under penalty], in law, an order to a witness to appear before a court. A subpoena ad testificandum [Lat. from the Securities and Exchange Commission. In connection with those responses, the Company and its independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. reviewed the policy and the accounting for the related insurance transactions. Upon further review, the Company and its independent auditors now believe that premium expense should have been accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. at the date the Company entered into the insurance policy, rather than over the prospective policy period because the Company could not allocate To reserve a resource such as memory or disk. See memory allocation. the costs of the policy between the retroactive and prospective coverage. While the method of accounting for combined retroactive and prospective insurance premiums used in 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. is based upon accounting practices that were widely recognized as being generally accepted at the time the Company issued the 1998 financial statements, it was not until May 1999 that the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). staff confirmed the restated accounting practice as being generally accepted for entities other than insurance companies. The restatement also includes certain adjustments and reclassifications that previously were deemed to be immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. . The Company believes that the restatement will have no effect on the Company's cash flow and no material effect on the Company's financial position as of September September: see month. 30, 2001, or any future date. The Company believes that it will recognize a gain in the fourth quarter of 2001 related to the termination of the retroactive portion of the insurance policy, which will result in the complete reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of the remaining accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. . The Company expects to file its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 30, 2001, on a timely basis and the financial statements included therein are not expected to differ materially from those announced in the earnings release on November November: see month. 1, 2001. The Company also intends to file, as soon as practicable practicable adj. when something can be done or performed. , amendments to its Annual Reports 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. , with the related reports of the Company's independent auditor, for the periods required, and to its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001 and June June: see month. 30, 2001, reflecting the effects of the restatement discussed above. The following tables show the effects of the restatement for 1998, 1999, and 2000, as well as for the first and second quarters of 2001. All information in the following tables is presented in thousands, except per share data.
Year Ended December 31, 1998
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As Reported Restated
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Statement of Operations Data:
Revenue $1,584,198 $1,584,198
Operating income 41,486 25,544
Net income 20,176 8,926
Net income per diluted share $ 0.38 $ 0.17
Net income, excluding
non-recurring items(1) $ 39,725 $ 38,896
Net income per diluted
share, excluding
non-recurring items(1) $ 0.74 $ 0.73
December 31, 1998
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As Reported Restated
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Balance Sheet Data:
Working capital $ 361,049 $ 350,645
Total assets 714,450 711,158
Long-term obligations 286,706 286,706
Total liabilities 474,882 483,140
Shareholders' equity 239,568 228,018
Year Ended December 31, 1999
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As Reported Restated
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Statement of Operations Data:
Revenue $1,768,121 $1,768,121
Operating loss (52,750) (49,947)
Net loss (93,080) (90,532)
Net loss per diluted share $ (1.75) $ (1.70)
Net income, from
recurring operations(2) $ 16,793 $ 15,530
Net income per diluted
share, from recurring
operations(2) $ 0.31 $ 0.29
December 31, 1999
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As Reported Restated
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Balance Sheet Data:
Working capital $ 268,138 $ 259,749
Total assets 623,858 623,781
Long-term obligations 230,886 230,886
Total liabilities 467,667 476,292
Shareholders' equity 156,191 147,489
Year Ended December 31, 2000
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As Reported Restated
----------------------------------
Statement of Operations Data:
Revenue $1,977,011 $1,977,011
Operating income 59,791 62,873
Net income 41,772 43,992
Net income per diluted share $ 0.74 $ 0.78
Net income, from
recurring operations(3) $ 35,378 $ 37,620
Net income per diluted
share, from recurring
operations(3) $ 0.63 $ 0.67
December 31, 2000
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As Reported Restated
----------------------------------
Balance Sheet Data:
Working capital $ 273,060 $ 266,578
Total assets 691,659 691,659
Long-term obligations 198,441 198,441
Total liabilities 492,059 498,541
Shareholders' equity 199,600 193,118
Quarter Ended March 31, 2001
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As Reported Restated
----------------------------------
Statement of Operations Data:
Revenue $ 465,326 $ 465,326
Operating income 5,374 6,082
Net income 6,068 6,554
Net income per diluted share $ 0.11 $ 0.12
Net income, excluding
non-recurring items(4) $ 1,445 $ 1,932
Net income per diluted
share, excluding
non-recurring items(4) $ 0.03 $ 0.03
March 31, 2001
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As Reported Restated
----------------------------------
Balance Sheet Data:
Working capital $ 251,466 $ 245,471
Total assets 598,109 598,109
Long-term obligations 175,615 175,615
Total liabilities 397,545 403,540
Shareholders' equity 200,564 194,569
Quarter Ended June 30, 2001
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As Reported Restated
----------------------------------
Statement of Operations Data:
Revenue $ 452,334 $ 452,334
Operating loss (7,780 (7,067)
Net loss (7,358) (6,866)
Net loss per diluted share $ (0.13) $ (0.12)
June 30, 2001
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As Reported Restated
----------------------------------
Balance Sheet Data:
Working capital $ 192,264 $ 186,761
Total assets 575,957 575,957
Long-term obligations 129,065 129,065
Total liabilities 385,094 390,597
Shareholders' equity 190,863 185,360
(1) Excludes the after-tax effect of a non-recurring net investment
gain of $0.3 million and non-recurring items relating to trading
and other charges of $30.3 million, which includes $15.1 million
of restated retroactive insurance premiums ($10.4 million after
tax) and will be recorded in the Company's restated statements of
operations in cost of sales ($9.3 million), selling, general and
administrative expenses ($28.0 million) and trading and other
charges ($3.6 million).
(2) Reflects operating data for the Company's recurring operations,
which exclude i) non-recurring charges related to the Company's
1999 restructuring plan, ii) the results of the operations that
were terminated or sold in 1999 in accordance with the Company's
1999 restructuring plan and iii) the cumulative effect of an
accounting change.
(3) Reflects operating data for the Company's recurring operations,
which exclude non-recurring charges related to the Company's
facilities consolidation, ii) the results of the operations that
were terminated or sold in 1999 in accordance with the Company's
1999 restructuring plan and iii) an extraordinary gain on debt
extinguishment.
(4) Excludes an extraordinary gain on debt extinguishment.
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 third party 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; specifically, Brightpoint's most recent Form 10-K, Form 10-Q and Exhibits 99, 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by these forward-looking statements. These risk factors include, without limitation, the completion of the analysis necessary to restate the financial 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. |
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