Brightpoint Reports First Quarter Financial Results.Business Editors INDIANAPOLIS--(BUSINESS WIRE)--April 27, 2000 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 from recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. operations of $471 million for the 2000 first quarter -- Net income per share from recurring operations of $0.17 for the 2000 first quarter -- Operating activities generate positive cash flow of approximately $23 million for the 2000 first quarter Brightpoint, Inc. (NASDAQ:CELL) reported its financial results for the quarter ended March 31, 2000. Recurring operations in the first quarter of 2000 generated net income per share of $0.17 on revenue of $471 million, both of which are substantial increases from the first quarter of 1999, in which the Company's recurring operations generated net income per share of $0.03 on revenue of $305 million. Basis of Presentation. Because of the significance of the 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 announced by the Company on June June: see month. 30, 1999 (the "Plan"), results of operations have been delineated de·lin·e·ate tr.v. de·lin·e·at·ed, de·lin·e·at·ing, de·lin·e·ates 1. To draw or trace the outline of; sketch out. 2. To represent pictorially; depict. 3. between results from recurring operations and results from non-recurring operations. In addition, the impacts of non-recurring charges have been shown separately. Recurring operations include all operations except those that have been eliminated or terminated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Plan. Recurring operations also exclude the impacts of the non-recurring charges related to our facility consolidation in 2000 and the cumulative effect of a change in accounting principle recorded in the first quarter of 1999. The attached consolidated statements of operations include all operations and the charges discussed herein. As previously reported, the Company's execution of the Plan has been substantially completed.
RECURRING OPERATIONS
(U.S. Dollars, in thousands except per share data)
Quarter Ended March 31
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1999 2000 Change
--------------------------------
Revenue $ 305,091 $ 470,532 54%
Cost of revenue 278,662 429,098 54%
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Gross profit 26,429 41,434 57%
Selling, general and
administrative expenses 21,227 23,424 10%
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Operating income 5,202 18,010 246%
Interest expense 2,963 3,287 11%
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Income before income
taxes and minority interest 2,239 14,723 558%
Income taxes 761 5,295 596%
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Income before minority interest 1,478 9,428 538%
Minority interest -- 36 --
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Net income $ 1,478 $ 9,392 535%
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Net income per share (diluted) $ 0.03 $ 0.17 467%
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Weighted average shares
outstanding (diluted) 54,252 63,493
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Revenue. Revenue from recurring operations in the quarter ended March 31, 2000 increased 54% compared to revenue generated by the same operations in the first quarter of 1999. The demand for handsets continued to be very strong due, in part, to unfilled orders from the end of the fourth quarter of 1999. Units handled increased by 41% in the first quarter of 2000 compared to the same period a year ago. Revenue growth in the 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. division was 2%, when comparing the first quarter of 2000 to the same period in 1999, and units handled by this division grew by 34% compared to the first quarter of 1999, resulting primarily from the continued execution of the Company's strategy of focusing on integrated logistics services, which generated lower revenue dollars per 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. , but contributed much higher gross and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Revenue growth was especially strong in the 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, demonstrating the successful implementation of the Plan. Revenue was suppressed sup·press tr.v. sup·pressed, sup·press·ing, sup·press·es 1. To put an end to forcibly; subdue. 2. To curtail or prohibit the activities of. 3. in the first quarter of 1999 due to the previously reported inadequate supply of product caused, in part, by our former joint operations A general term to describe military actions conducted by joint forces or by Service forces in relationships (e.g., support, coordinating authority) which, of themselves, do not create joint forces. in China, which were terminated as part of the Plan. The Company's new joint operations in China have generated substantially higher levels of revenue. Revenue growth 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 was also strong and is indicative of the demand for
wireless handsets and accessories in those markets, as well as the
execution of our strategies designed for those markets.
Revenue From Recurring Operations By Division
(U.S. Dollars, in thousands)
Quarter Ended March 31
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Percent Percent
1999 of Total 2000 of Total Change
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North America $157,019 51% $160,817 34% 2%
Asia-Pacific 53,968 18% 135,240 29% 151%
Europe, Middle East
and Africa 52,140 17% 99,290 21% 90%
Latin America 41,964 14% 75,185 16% 79%
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Total $305,091 100% $470,532 100% 54%
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Revenue From Recurring Operations By Service Line
(U.S. Dollars, in thousands)
Quarter Ended March 31
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Percent Percent
1999 of Total 2000 of Total Change
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Sales of
wireless handsets $229,448 75% $361,213 77% 57%
Sales of
wireless accessories 49,561 16% 60,971 13% 23%
Integrated logistics
services 26,082 9% 48,348 10% 85%
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Total $305,091 100% $470,532 100% 54%
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Gross Margin. The gross margin in recurring operations for the quarter ended March 31, 2000 was 8.8%, compared to 8.7% in the 1999 first quarter. The increase in gross margins was due to the successful execution of various programs to increase our efficiency and due to better pricing on handsets sold during most of the first quarter due to the strong demand for handsets. Selling, General and Administrative Expenses. Selling, general and administrative expenses incurred in recurring operations during the first quarter of 2000 were $23,424,000 (5.0% of revenue), an increase of 10% from $21,227,000 (7.0% of revenue) in the first quarter of 1999. Selling, general and administrative expenses increased in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute because of the increased business activity, but decreased as a percentage of revenue, due primarily to cost reduction measures implemented by the Company. Operating Margin 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. . Operating margins (income from operations, as a percent of revenue) from recurring operations for the first quarter of 2000 and 1999 were 3.8% and 1.7%, respectively. The increase in operating margins resulted primarily from the decrease in selling, general and administrative expenses as a percent of revenue, as well as from the increase in gross margins. Operating income in the first quarter of 2000 of $18,010,000 increased by 246% from $5,202,000 in the first quarter of 1999. Net Income From Recurring Operations. Net income from recurring operations for the first quarter of 2000 was $9,392,000 compared to $1,478,000 in the first quarter of 1999. This increase was due primarily to the factors discussed above in the analyses of revenue, gross margin and selling, general and administrative expenses. Net income 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 from recurring operations was $0.17 for the first quarter of 2000 compared to net income per diluted share of $0.03 for the same period in the prior year. Balance Sheet. As of March 31, 2000, days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). 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 37 days, compared to days sales outstanding of approximately 46 days at March 31, 1999. During the first quarter of 2000, 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 9 times during the first quarter of 1999. Average days costs in accounts payable were 44 days for the first quarter of 2000, compared to 31 days for the first quarter of 1999. These improvements combined to create a decrease in cash conversion cycle days to 31 days in the first quarter of 2000 from 57 days in the same period of 1999. 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 first quarter of 2000 was approximately $23 million, compared to approximately $37 million in the first quarter of 1999. The Company has continued to improve its cash conversion cycle through the execution of its working capital management strategies. Reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. . As previously announced, the Company reclassified certain revenue and cost of revenue amounts related to its services supporting prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. wireless telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , effective in the first
quarter of 2000 and applied retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin to all periods. The reclassification, which reduces revenue and costs of revenue by the same amount, has no impact on gross profit, selling, general and administrative expenses, operating income, net income or earnings per share. The amount of the reclassification was $21,300,000 and $8,787,000 for the quarters ended March 31, 2000 and 1999, respectively. NON-RECURRING OPERATIONS Non-recurring operations include certain operations in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. , Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, , Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and the United Kingdom and two joint operations in China, all of which have been terminated or eliminated. In the first quarter of 2000, no non-recurring operations existed as the Plan had been substantially completed. For the first quarter of 1999, non-recurring operations generated revenue of $58,841,000, operating and net losses of $3,802,000 and $2,690,000, respectively, and a net loss per diluted share of $0.05. NON-RECURRING CHARGES AND OTHER ITEMS Accounting Change. As previously reported, the Company recorded in the first quarter of 1999 a cumulative effect adjustment of $14.1 million net of applicable taxes ($0.27 per diluted share) for a change in accounting principle. The change in accounting principle resulted from the required adoption of American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. Statement of Position 98-5, Reporting the Costs of Start-up Start-up The earliest stage of a new business venture. Activities, which requires the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the unamortized portion of certain capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. costs. These costs were previously capitalized in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting then in effect. 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. 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 that will not be 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 quarter of 2000 was $4.8 million ($2.9 million after applicable taxes) or $0.05 per diluted share. Brightpoint, Inc. is a leading provider of outsourced services in the global wireless telecommunications and data industry. Brightpoint's innovative services include contract manufacturing, customized packaging, prepaid 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, e-tailers, 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 relations The 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. , Form 10-Q Form 10-Q See 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 by these forward-looking statements. These risk factors include, without limitation, potential product obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. or shortages, consolidation of our wireless network operator customers 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
----------------------
1999 2000
--------- ----------
Revenue $ 363,932 $ 470,532
Cost of revenue 335,545 429,098
--------- ---------
Gross profit 28,387 41,434
Selling, general and administrative expenses 26,987 23,424
Unusual charges -- 4,814
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Income from operations 1,400 13,196
Interest expense 3,288 3,287
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Income (loss) before income taxes,
minority interest and accounting change (1,888) 9,909
Income taxes (643) 3,375
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Income (loss) before minority interest and
accounting change (1,245) 6,534
Minority interest (33) 36
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Income (loss) before accounting change (1,212) 6,498
Cumulative effect of accounting change,
net of tax (14,065) --
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Net income (loss) $ (15,277) $ 6,498
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Basic per share:
Income (loss) before accounting change $ (0.02) $ 0.12
Cumulative effect of accounting change,
net of tax (0.27) --
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Net income (loss) $ (0.29) $ 0.12
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Diluted per share:
Income (loss) before accounting change $ (0.02) $ 0.12
Cumulative effect of accounting change,
net of tax (0.27) --
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Net income (loss) $ (0.29) $ 0.12
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Weighted average common shares outstanding:
Basic 53,047 54,926
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Diluted 53,047 56,232
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BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, March 31,
1999 2000
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ASSETS
Current assets:
Cash and cash equivalents $ 85,261 $ 111,600
Accounts receivable (less allowance
for doubtful accounts of
$6,220 in 1999 and $6,232 in 2000) 230,792 209,291
Inventories 140,673 215,997
Other current assets 48,193 51,094
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Total current assets 504,919 587,982
Property and equipment 36,273 35,179
Goodwill and other intangibles 71,456 70,184
Other assets 11,210 8,762
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Total assets $ 623,858 $ 702,107
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 236,781 $ 302,420
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Total current liabilities 236,781 302,420
Long-term debt:
Line of credit 46,022 44,882
Convertible notes 184,864 186,699
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Total long-term debt 230,886 231,581
Stockholders' equity 156,191 168,106
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Total liabilities and stockholders' equity $ 623,858 $ 702,107
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