Brightpoint Reports 2002 First Quarter Financial Results.Business & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Editors INDIANAPOLIS--(BUSINESS WIRE)--May 2, 2002 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 first quarter of $339 million -- Net loss from continuing operations in the first quarter of $6.3 million, or $0.11 per diluted share -- Net loss in the first quarter of $15.7 million, or $0.28 per diluted share Brightpoint, Inc. (NASDAQ:CELL) reported its financial results for the quarter ended March 31, 2002. In the first quarter of 2002, the Company's 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 experienced a net loss of $6.3 million, or $0.11 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, on revenue of $339 million compared to a net income from continuing operations of $1.9 million, or $.03 per diluted share, on revenue of $354 million in the first quarter of 2001 and a net income from continuing operations of $1.5 million, or $.03 per diluted share, on revenue of $375 million in the fourth quarter of 2001. The Company's net loss for the first quarter of 2002 was $15.7 million, or $0.28 per diluted share, compared to net income of $7.0 million or $0.12 per diluted share for the first quarter of 2001 and a net loss of $46.6 million, or $0.83 per diluted share, for the fourth quarter of 2001. Revenue. Revenue in the quarter ended March 31, 2002, decreased 4% compared to the first quarter of 2001 and 10% compared to the fourth quarter of 2001. The Company has historically experienced a similar sequential One after the other in some consecutive order such as by name or number. decline in revenue during the first quarter from the fourth quarter due to seasonality. However, this decline was more pronounced during the first quarter of 2002 in the Company's 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). and
Americas A·mer·i·cas , theSee America. divisions as the Company continues to experience lower-than-anticipated demand for its products and services in these markets due primarily to slower growth in new wireless subscribers and lower demand for replacement handsets. In addition, the Company has experienced a general reduction in 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. subsidies and in the number of promotional programs sponsored by network operators in many parts of the world in which the Company transacts business. The revenue declines in the Americas and Europe divisions in the first quarter of 2002, as compared to both the first and fourth quarters of 2001, were partially offset by increases in revenue in 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). division, which includes the Middle East, but excludes China, which, as discussed below, is now classified as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. .
Revenue By Division
(U.S. Dollars, in thousands)
Quarter Ended
----------------------------------------------------
March 31, % of Dec. 31, % of March 31, % of
2001 Total 2001 Total 2002 Total
----------------------------------------------------
The Americas $186,275 53% $182,616 49% $147,545 44%
Asia-Pacific 105,842 30% 112,424 30% 139,626 41%
Europe 61,774 17% 79,535 21% 51,773 15%
----------------------------------------------------
Total $353,891 100% $374,575 100% $338,944 100%
====================================================
Change from Q1 2001 Change from Q4 2001
to Q1 2002 to Q1 2002
----------------------------------------------------
The Americas (21%) (19%)
Asia-Pacific 32% 24%
Europe (16%) (35%)
----------------------------------------------------
Total (4%) (10%)
====================================================
Revenue By Service Line
(U.S. Dollars, in thousands)
Quarter Ended
----------------------------------------------------
March 31, % of Dec. 31, % of March 31, % of
2001 Total 2001 Total 2002 Total
----------------------------------------------------
Sales of
wireless
handsets $280,289 79% $294,127 79% $269,300 80%
Accessory
programs 40,743 12% 30,614 8% 31,404 9%
Integrated
logistics
services 32,859 9% 49,834 13% 38,240 11%
----------------------------------------------------
Total $353,891 100% $374,575 100% $338,944 100%
====================================================
Change from Q1 2001 Change from Q4 2001
to Q1 2002 to Q1 2002
----------------------------------------------------
Sales of
wireless
handsets (4%) (8%)
Accessory
programs (23%) 3%
Integrated
logistics
services 16% (23%)
----------------------------------------------------
Total (4%) (10%)
====================================================
Gross Margin. The gross margin for the quarter ended March 31, 2002 was 5.1%, compared to 7.0% and 6.7% in the first and fourth quarters of 2001, respectively. The decrease in gross margin during the first quarter of 2002 was due primarily to the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of inventories in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. to 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. Selling, General and Administrative Expenses. When compared to the first quarter of 2001, selling, general and administrative expenses increased approximately $2.0 million and also increased to 6.4% of revenue, as compared to 5.5% of revenue, due primarily to increased corporate and other overhead costs overhead costs see fixed costs. , including legal, accounting and other professional fees. Selling, general and administrative expenses for the first quarter of 2002 decreased slightly from the fourth quarter of 2001, but increased to 6.4% of revenue, as compared to 5.9% of revenue, due to the decrease in total revenue. 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) from Continuing Operations. For the first quarter of 2002 the Company experienced an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. from continuing operations of $4.6 million compared to operating income from continuing operations in the first and fourth quarters of 2001 of $5.2 million and $2.9 million, respectively. This was due to the reduction in revenue and a corresponding reduction in both gross profit and gross margin as a percentage of revenue. Net Income (Loss) from Continuing Operations. The net loss from continuing operations for the first quarter of 2002 was $6.3 million compared to net income from continuing operations of $1.9 million and $1.5 million in the first and fourth quarters of 2001, respectively. In both instances, the decrease 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 from continuing operations was $0.11 for the first quarter of 2002 compared to net income per diluted share from continuing operations of $0.03 for both the first and fourth quarters of 2001, respectively. Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . During the first quarter of 2002 the Company, as required, adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. or Disposal of Long-Lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. Assets" (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 144). In connection with the adoption of SFAS No. 144 the Company has reclassified, for all periods presented, the results and related charges for the business units that the Company discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: or sold pursuant to its 2001 restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan. Approximately $8.5 million of the reported loss in discontinued operations of $9.4 million in the first quarter of 2002 was related to the sale of Brightpoint China Limited to Chinatron Group Holdings Limited that was completed in April of 2002. Net Income (Loss). As a result of the factors and charges discussed above, the Company's net loss for the first quarter of 2002 was $15.7 million, or $0.28 per diluted share, compared to net income of $7.0 million, or $0.12 per diluted share, in the first quarter of 2001 and a net loss of $46.6 million, or $0.83 per diluted share, for the fourth quarter of 2001. Balance Sheet. For the first quarter of 2002, 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 42 days, compared to days revenue outstanding of approximately 45 days for the fourth quarter of 2001. During the first quarter of 2002 and the fourth 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 11 times. Average days costs in accounts payable were 43 days for the first quarter of 2002, compared to 50 days for the fourth quarter of 2001. These changes combined to create an increase in cash conversion cycle days to 31 days in the first quarter of 2002 from 29 days in the fourth quarter of 2001. The Company's net investment in contract 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 and contract payables Payables Related: Accounts payable decreased by $12.5 million from the fourth quarter of 2001. The Company finished the quarter with approximately $81 million of cash, $32 million of which was pledged pledge n. 1. A solemn binding promise to do, give, or refrain from doing something: signed a pledge never to reveal the secret; a pledge of money to a charity. 2. a. as collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although for certain trade or other credit arrangements. The debt related to the General Electric Capital line of credit was $23.0 million, as compared to $23.6 million in the prior quarter. The subordinated convertible bonds, of which 250,000 remain outstanding, had an accreted book value of $133 million. Net cash used by operating activities was approximately $18 million. This includes $15.8 million that was pledged in the quarter, of which $10 million was released subsequent to March 31, 2002. Other Items. The Company is required to adopt Statement of Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ", by the second quarter of this fiscal year. When adopted, we expect to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. a material charge relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc this change in accounting principle. The analysis required by SFAS 142 is still in process. As previously announced, the Company's Board of Directors has approved a 1-for-7 reverse split of its common stock. The Company intends to submit the reverse split for approval by the Company's stockholders at the Company's Annual Meeting of Stockholders currently scheduled for June June: see month. 26, 2002. If the reverse split is effected, the Company would have approximately 8 million shares of common stock issued and outstanding of 100 million shares of common stock 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: . Brightpoint, Inc. is a leading provider of outsourced services in the global wireless telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. 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 Exhibit 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 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
March 31, December 31, March 31,
2001 2001 2002
----------- ----------- -----------
Revenue $ 353,891 $ 374,575 $ 338,944
Cost of revenue 329,056 349,436 321,790
----------- ----------- -----------
Gross profit 24,835 25,139 17,154
Selling, general and
administrative expenses 19,618 22,247 21,778
----------- ----------- -----------
Income (loss) from
continuing operations 5,217 2,892 (4,624)
Interest expense 2,052 2,304 2,482
Other expenses 76 45 798
----------- ----------- -----------
Income (loss) from continuing
operations before income
taxes and minority interest 3,089 543 (7,904)
Income taxes 1,153 (958) (1,621)
----------- ----------- -----------
Income (loss) from
continuing operations
before minority interest 1,936 1,501 (6,283)
Minority interest 48 11 33
----------- ----------- -----------
Net income (loss) from
continuing operations 1,888 1,490 (6,316)
Discontinued operations 513 (47,746) (9,375)
----------- ----------- -----------
Total income (loss) before
extraordinary gain (loss)
on debt extinguishment 2,401 (46,256) (15,691)
Extraordinary gain (loss) on
debt extinguishment, net of tax 4,623 (322) -
----------- ----------- -----------
Net income (loss) $ 7,024 $ (46,578) $ (15,691)
=========== =========== ===========
Basic per share:
Net income (loss) from
continuing operations $ 0.03 $ 0.03 $ (0.11)
Discontinued operations 0.01 (0.85) (0.17)
Extraordinary gain (loss) on
debt extinguishment, net of tax 0.08 (0.01) -
----------- ----------- -----------
Net income (loss) $ 0.12 $ (0.83) $ (0.28)
=========== =========== ===========
Diluted per share:
Net income (loss) from
continuing operations $ 0.03 $ 0.03 $ (0.11)
Discontinued operations 0.01 (0.85) (0.17)
Extraordinary gain (loss) on
debt extinguishment, net of tax 0.08 (0.01) -
----------- ----------- -----------
Net income (loss) $ 0.12 $ (0.83) $ (0.28)
=========== =========== ===========
Weighted average common shares
outstanding:
Basic 55,777 55,848 55,873
=========== =========== ===========
Diluted 55,779 55,853 55,873
=========== =========== ===========
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
2001 2002
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 58,295 $ 48,941
Pledged cash 16,657 32,417
Accounts receivable 181,755 159,037
Inventories 137,549 96,437
Contract financing receivable 60,404 37,250
Other current assets 33,115 29,164
----------- -----------
Total current assets 487,775 403,246
Property and equipment 45,047 44,571
Goodwill and other intangibles 61,258 56,846
Other assets 15,340 20,309
----------- -----------
Total assets $ 609,420 $ 524,972
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 194,776 $ 128,453
Accrued expenses 52,743 52,453
Unfunded portion of contract
financing receivable 45,499 34,896
Lines of credit, short-term 10,323 10,969
Convertible notes, short-term - 132,953
----------- -----------
Total current liabilities 303,341 359,724
----------- -----------
Long-term liabilities:
Minority interest - 8,397
Line of credit 24,419 23,222
Convertible notes 131,647 -
----------- -----------
Total long-term liabilities 156,066 31,619
----------- -----------
Stockholders' equity 150,013 133,629
----------- -----------
Total liabilities and stockholders' equity $ 609,420 $ 524,972
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