Brightpoint Reports 2001 Second Quarter Financial Results.Business Editors INDIANAPOLIS--(BUSINESS WIRE)---July 26, 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) -- Revenue in the second quarter of $452 million compared to $462 million in the 2000 second quarter -- Net loss per diluted share in the second quarter of $0.13, including inventory write-downs of $0.15 per diluted share, compared to net income per diluted share of $0.17 in the 2000 second quarter -- Operating activities generated positive cash flow of approximately $20 million for the 2001 second quarter Brightpoint, Inc. (NASDAQ:CELL) reported its financial results for the quarter ended June June: see month. 30, 2001. In the second quarter of 2001, the Company realized a net loss 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 of $0.13 (including the impact of inventory write-downs of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8.4 million, or $0.15 per diluted share, net of tax benefit) on revenue of $452 million, compared to the second quarter of 2000, in which the Company generated net income per diluted share (excluding the impact of a non-recurring charge related to the consolidation of certain facilities) of $0.17 on revenue of $462 million. Revenue. Revenue in the quarter ended June 30, 2001, decreased 2% compared to revenue in the second quarter of 2000. As discussed in the Company's update press release and conference call (June 18, 2001), the continued economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and other markets, transitioning product cycles in the wireless telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and data industry and the lower levels of promotions, subsidies and agent commissions offered by network operators in many parts of the world have resulted in higher levels of inventories in the wireless equipment channel. The higher level of inventories has caused demand for the Company's products and services to be lower than in the second quarter of the prior year. These factors resulted in a decline in revenue compared to the second quarter of 2000 for the Company's Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. divisions. Due to a number of factors including new locations, the geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. diversity of the Company's operations and the variety of services offered by the Company, revenues in the Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle East and Africa and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. divisions grew
by approximately 26% and 4%, respectively, from the second quarter of
2000.
Demand for much of the Company's accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. programs and integrated logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. services is generated, directly or indirectly, through promotional programs sponsored by network operators. The level of these promotional programs during the second quarter of 2001 was lower than that of the second quarter of 2000, causing the Company's revenues in these service lines to be lower than the prior year second quarter.
Revenue By Division
(U.S. Dollars, in thousands)
Percent of
Total
Quarter Ended June 30 Second -----------
--------------------------------- Quarter Six Months
Percent Percent Year-to Ended
of of -Year June 30
2000 Total 2001 Total Change 2000 2001
----------------------------------- ------ -----------
North America $ 161,001 35% $ 153,119 34% (5)% 35% 34%
Asia-Pacific 131,636 29% 99,872 22% (24)% 28% 25%
Europe, Middle
East and Africa 103,277 22% 130,501 29% 26% 22% 28%
Latin America 65,896 14% 68,842 15% 4% 15% 13%
---------------------------------- -----------
Total $ 461,810 100% $ 452,334 100% (2)% 100% 100%
---------------------------------- -----------
---------------------------------- -----------
Revenue By Service Line
(U.S. Dollars, in thousands)
Percent of
Total
Quarter Ended June 30 Second -----------
------------------------------- Quarter Six Months
Percent Percent Year-to Ended
of of -Year June 30
2000 Total 2001 Total Change 2000 2001
-------------------------------- -------- -----------
Sales of
wireless
handsets $ 360,373 78% $ 373,524 83% 4% 78% 83%
Accessory
programs 52,804 11% 38,673 8% (27%) 12% 9%
Integrated
logistics
services 48,633 11% 40,137 9% (17%) 10% 8%
-------------------------------- -----------
Total $ 461,810 100% $ 452,334 100% (2)% 100% 100%
-------------------------------- -----------
-------------------------------- -----------
Gross Margin. The gross margin for the quarter ended June 30, 2001 was 3.4% (excluding the inventory write-downs, gross margin was 6.4%), compared to 9.6% in the 2000 second quarter. The decrease in gross margin was due primarily to i) a greater percentage of the total revenue attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to lower margin handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. sales, ii) lower margins on those handset sales resulting from the oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies of product in the channel during the second quarter of 2001 and iii) inventory write-downs made during the second quarter of 2001. Due to the higher level of inventories in the channel and the lower-than-anticipated level of demand experienced in the second quarter of 2001, the Company took write-downs of approximately $14 million ($8.4 million, net of tax benefit) to adjust inventories to their estimated net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. based on current market conditions. The write-downs were related to the Company's North America division and a significant portion of the impacted inventories were wireless accessories. As of July July: see month. 25, 2001, the Company had disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of approximately 80% of the inventory to which the write-downs related. Selling, General and Administrative Expenses. Selling, general and administrative expenses for the second quarter of 2001 were $23,115,000 (5.1% of revenue), a 12% decrease from $26,398,000 (5.7% of revenue) in the second quarter of 2000 and a 10% decrease from $25,604,000 (5.5% of revenue) in the first quarter of 2001. This decrease was primarily the result of cost control measures implemented during the second quarter of 2001 in response to the current market conditions. Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (Loss). Operating margins (income from operations, as a percent of revenue) for the second quarter of 2001 were negative 1.7% (positive 1.3% excluding the impact of the inventory adjustments) and positive 3.9% for the second quarter of 2000 (excluding the impact of the consolidation of certain facilities). Operating income in the second quarter of 2001 (excluding the inventory write-downs) of $5,923,000 decreased from $18,118,000 in the second quarter of 2000 (excluding the impact of the consolidation of certain facilities). The decreases in operating margins and operating income resulted primarily from the decrease in gross margins. Net Income (Loss). The net loss for the second quarter of 2001 (including the after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. impact of inventory write-downs of approximately $8.4 million or $0.15 per diluted share) was $7,358,000 compared to net income of $9,410,000 in the second quarter of 2000 (excluding the after-tax impact of a non-recurring charge related to the facilities consolidation of approximately $315,000). This change was due primarily to the factors discussed above in the analyses of revenue, gross margin and selling, general and administrative expenses. Net loss per diluted share was $0.13 for the second quarter of 2001 compared to net income per diluted share of $0.17 (excluding the after-tax impact of a non-recurring charge related to the facilities consolidation) for the same period in 2000. Balance Sheet. For the second quarter of 2001, days revenue outstanding in 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 was approximately 32 days, compared to days revenue outstanding of approximately 35 days for the prior year second quarter. This reduction is attributable to the successful acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of the Company's accounts receivable collection cycle, as well as sales or financing transactions, in certain markets, of accounts receivable to financing organizations. These efforts have substantially reduced the amount of working capital required to fund the Company's accounts receivables. During the second quarter of 2001, annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. inventory turns were 10 times, compared to 8 times during the second quarter of 2000. This increase is due primarily to reductions in our inventory purchases and other efforts to reduce the level of inventories in stock. Average days costs in accounts payable were 34 days for the second quarter of 2001, compared to 46 days for the second quarter of 2000. These changes combined to create a decrease in cash conversion cycle days to 34 days in the second quarter of 2001 from 35 days in the same period of 2000 and 38 days in the first quarter of 2001. Operating Cash Flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . Cash flow provided by operating activities in the second quarter of 2001 was approximately $20 million, compared to cash used by operations of $28 million in the second quarter of 2000. The generation of positive cash flow is a reflection of the Company's continued focus on its capital efficiency through the execution of its working capital management strategies. EXTRAORDINARY GAIN ON DEBT EXTINGUISHMENT The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. During the first quarter of 2001, the Company repurchased 36,000 of its subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. , convertible bonds ("Bonds") for approximately $10 million (prices ranging from $278 to $283 per Bond). As of June 30, 2001, the Bonds have an accreted book value of approximately $516 per Bond. These transactions resulted in an extraordinary gain of approximately $4.6 million ($0.08 per diluted share) after transaction and unamortized debt issuance costs and applicable taxes. Each of the Bonds converts, at the option of the holder, into 19.109 shares of the Company's common stock. These transactions, along with the purchase of 94,000 Bonds in 2000, completed the 130,000 Bond repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. plan previously approved by the Company's board of directors. FACILITIES CONSOLIDATION During the first quarter of 2000, the Company began the process of consolidating four Indianapolis, Indiana “Indianapolis” redirects here. For other uses, see Indianapolis (disambiguation). Indianapolis (IPA: [ˌɪndiəˈnæpəlɪs]) is the capital city of the U.S. locations and a location in Bensalem, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York into a single, new facility located near the Indianapolis International Airport Indianapolis International Airport (IATA: IND, ICAO: KIND, FAA LID: IND) is a public airport located seven miles (11 km) southwest of the central business district of Indianapolis, a city in Marion County, Indiana, United States. and designed specifically for the Company and its processes. The Company recorded an unusual charge related to the consolidation for moving costs, the disposal of assets not used in the new facility and the estimated impact of vacating the unused facilities, net of potential subleases. The total amount of the charge recorded in the first and second quarters of 2000 was $5.7 million ($3.4 million after applicable taxes) or $0.06 per diluted share. Brightpoint, Inc. is a leading provider of outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, services in the global wireless telecommunications and data industry. Brightpoint's innovative services include customized packaging, prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. solutions, inventory management, distribution and
other outsourced services. Brightpoint's customers include leading
network operators, retailers and wireless equipment manufacturers.
Additional information about Brightpoint can be found on its website at
www.brightpoint.com or by calling its toll-free Investor Relations Investor relationsThe process by which the corporation communicates with its investors. Information 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-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. 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, uncertainties related to customer plans and commitments; the possible adverse effect on demand for the Company's products and services resulting from the consolidation of the Company's wireless network operator customers; lack of demand for the Company's products and services in certain markets; business conditions and growth in the Company's markets, including currency, economic and political risks; availability and prices of wireless products and financial risk management. 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.
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2000 2001 2000 2001
---------- ---------- ----------- ----------
Revenue $ 461,810 $ 452,334 $ 939,582 $ 917,660
Cost of revenue 417,294 436,999 851,641 871,347
---------- ---------- ----------- ----------
Gross profit 44,516 15,335 87,941 46,313
Selling, general and
administrative
expenses 26,398 23,115 52,231 48,719
Unusual charges 517 -- 5,331 --
---------- ---------- ----------- ----------
Income (loss) from
operations 17,601 (7,780) 30,379 (2,406)
Interest expense 3,241 2,652 6,512 5,025
Other (income) expenses 27 696 (376) 1,513
---------- ---------- ----------- ----------
Income (loss) before
income taxes, minority
interest and
extraordinary gain 14,333 (11,128) 24,243 (8,944)
Income taxes 4,986 (3,757) 8,361 (3,081)
---------- ---------- ----------- ----------
Income (loss) before
minority interest and
extraordinary gain 9,347 (7,371) 15,882 (5,863)
Minority interest 94 (13) 130 51
---------- ---------- ----------- ----------
Income (loss) before
extraordinary gain 9,253 (7,358) 15,752 (5,914)
Extraordinary gain on
debt extinguishment,
net of tax -- -- -- 4,623
---------- ---------- ----------- ----------
Net income (loss) $ 9,253 $ (7,358) $ 15,752 $ (1,291)
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
Basic per share:
Income (loss) before
extraordinary gain $ 0.17 $ (0.13) $ 0.29 $ (0.11)
Extraordinary gain
on debt
extinguishment,
net of tax -- -- -- 0.08
---------- ---------- ----------- ----------
Net income (loss) $ 0.17 $ (0.13) $ 0.29 $ (0.02)
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
Diluted per share:
Income (loss) before
extraordinary gain $ 0.16 $ (0.13) $ 0.28 $ (0.11)
Extraordinary gain
on debt
extinguishment,
net of tax -- -- -- 0.08
---------- ---------- ----------- ----------
Net income (loss) $ 0.16 $ (0.13) $ 0.28 $ (0.02)
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
Weighted average
common shares
outstanding:
Basic 55,543 55,804 55,235 55,790
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
Diluted 63,601 55,804 56,274 55,790
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31 June 30
2000 2001
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 79,718 $ 42,535
Accounts receivable (less allowance
for doubtful accounts of $6,548
in 2000 and $6,639 in 2001) 208,116 187,974
Inventories 226,785 162,884
Other current assets 52,059 54,900
------------ ------------
Total current assets 566,678 448,293
Property and equipment 36,763 44,226
Goodwill and other intangibles 72,390 68,264
Other assets 15,828 15,174
------------ ------------
Total assets $691,659 $575,957
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $232,264 $192,429
Accrued expenses 61,354 51,865
Current portion of long-term debt -- 11,735
------------ ------------
Total current liabilities 293,618 256,029
------------ ------------
------------ ------------
Long-term debt:
Line of credit 53,685 --
Convertible notes 144,756 129,065
------------ ------------
Total long-term debt 198,441 129,065
------------ ------------
Stockholders' equity 199,600 190,863
------------ ------------
Total liabilities and stockholders' equity $691,659 $575,957
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