Brightpoint Announces Restructuring Plan.

Business Editors

INDIANAPOLIS--(BUSINESS WIRE)--Nov. 1, 2001

Brightpoint, Inc. (NASDAQ:CELL) announced today that its board of directors has approved a restructuring plan (the "Plan") to be implemented beginning in the fourth quarter of 2001. The Company's primary goal in adopting the Plan is to better position the Company for long-term and more consistent success by i) eliminating operations in which potential returns are not adequate to justify the risks of those operations and ii) improving the Company's cost structure. The Company believes that the successful execution of the Plan will enhance its long-term profitability.

Discontinued Operations 

Certain markets in which the Company operates, including Brazil, Jamaica, South Africa, Venezuela and Zimbabwe, have unusually high risk profiles due to many factors, including, among other things, high importation duties, currency restrictions and volatile political and economic climates. The Company has determined that the risks of operating in these markets can no longer be justified given the profitability potential of the Company's operations in those markets. Therefore, these operations, which generated an aggregate net loss of $8.3 million ($0.15 per share) on revenues of $84.6 million for the nine months ended September 30, 2001, will be sold or otherwise disposed of. The Company estimates that the disposal of these entities will enable the generation of cash inflows, net of cash costs related to the execution of the Plan, of approximately $10 million to $20 million by reducing the amount of capital employed in those markets.

As previously announced, the Company intends to form a joint venture with Chinatron Group Holdings Limited, which, subject to completion, should allow the Company to reduce the capital it employs in the China market, including Hong Kong, yet continue to participate in this large handset market. The Company will continue to consolidate the results of the China business in accordance with current accounting rules as long as the Company has the ability to exert significant influence over the operations.

Cost Structure Improvements

The Company's North America and Latin America regions will be consolidated and managed as one region, referred to as the Americas. Warehouse and logistics functions currently based in Miami will be transferred to Indianapolis and the warehouse in Miami will be closed. The consolidation will allow the Company to reduce costs through the elimination of redundant regional staff and other costs, including the costs of the Miami distribution facility.

The Company's operations and activities in Germany, the Netherlands and Belgium, including regional management, will be combined into a new facility in Germany. The Europe region (formerly referred to as the Europe, Middle East and Africa region), now consisting of France, Germany, Ireland and Sweden, will operate on a more centralized basis in order to take better advantage of cost efficiencies and provide greater service offerings to Pan-European customers. The Company will also reduce regional staff in its Europe region.

The Plan includes the steps necessary to improve the Company's cost structure, not only through the aforementioned elimination and restructuring of non-performing business activities, but also through additional selective cost reductions. As a result, the Company believes that the Plan will result in a headcount reduction of approximately 350 employees (in excess of 15 % of the Company's worldwide workforce) and a reduction in selling, general and administrative expenses of approximately $3 million to $4 million per quarter, beginning in the first quarter of 2002.

Non-recurring Charge

The above actions will result in a non-recurring charge in the fourth quarter of 2001 of approximately $55 million to $65 million ($0.99 to $1.11 per share, after applicable taxes). The charge will include the write-off of goodwill and investments (which is expected to account for approximately 35% of the total non-recurring charge), accumulated foreign currency translation adjustments (approximately 30%), accounts receivable, inventory and fixed and other assets related to the eliminated activities, as well as related cash expenses, including severance payments to terminated employees. This cash portion of the non-recurring charge is estimated to be approximately $4 million.

Brightpoint is one of the world's largest distributors of mobile phones. Brightpoint supports the global wireless telecommunications and data industry, providing quickly deployed, flexible and cost effective third party solutions. Brightpoint's innovative services include distribution, channel management, fulfillment, eBusiness 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 Investor Relations Information line at 877-IIR-CELL (877-447-2355).

Certain information in this press release may contain forward-looking statements 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. 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. These risk factors include, without limitation, the ability of the Company to complete the restructuring activities contemplated under the Plan and the ability of the Company sell inventory and collect receivables in the amounts anticipated under the Plan. 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.