Brightpoint Reports Record Financial Results as Value-Added Logistics Services Grow to 7% of Net Sales.INDIANAPOLIS--(BUSINESS WIRE)--Oct. 21, 1997-- Third quarter net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 67% to $243,210,000 vs. $145,290,000 in prior year Third quarter net income increased 85% to $5,928,000 vs. $3,209,000 in prior year Third quarter net income per share increased 60% to $0.24 vs. $0.15 in prior year 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) reported its financial results for the third quarter ended September September: see month. 30, 1997. Net sales for the third quarter of 1997 increased 67% to $243,210,000 as compared to $145,290,000 for the third quarter of 1996. Net income of $5,928,000, or $0.24 per share, for the third quarter of 1997 increased 85% from $3,209,000, or $0.15 per share, for the same period of 1996. Net sales for the nine months ended September 30, 1997 increased 75% to $662,406,000 as compared to $378,146,000 for the same period of 1996. Net income of $16,211,000, or $0.68 per share, for the nine months ended September 30, 1997 increased 100% from $8,093,000 (pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma ), or $0.39 per share, for the same period of 1996. Consistent with pooling-of-interests accounting treatment, all financial information reflects the combined financial results of Brightpoint, Inc. and Allied Communications, Inc. and certain affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. (Allied), pursuant to their June June: see month. 1996 merger. 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 require that certain charges related to a transaction accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. be expensed in the period in which the transaction is consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. . As such, fees paid to banks, investment bankers Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. , attorneys and accountants, and other one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. fees, in the aggregate amount of $2,750,000, were expensed in the quarter ended June 30, 1996 in connection with the Allied Merger. Pro forma net income and net income per share for nine months ended September 30, 1996 exclude 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 this one-time charge, and include income taxes for periods during which Allied was not subject to income taxes. Net Sales. In the third quarter of 1997, net sales were derived 42% from 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). (APAC APAC Australian Partnership for Advanced Computing APAC Agricultural Policy Analysis Center APAC Asia and Pacific APAC Asian Pacific American Coalition APAC Adapted Physical Activity Council (American Alliance for Health) ) division, 24% from 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, 24% from 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
(EMA (1) (Enterprise Management Architecture) An earlier strategic plan from Digital for integrating network, system and application management. It provided the operating environment for managing a multi-vendor network. ) division and 10% from the 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. division. Sales for the
third quarter of 1996 were derived 16% from APAC, 43% from North
America, 20% from EMA and 21% from Latin America.
Sales in the APAC and EMA divisions remained strong as the Company continued to penetrate these markets. In its North America division, units handled by the Company (phones sold by the Company or phones on which the Company has performed its value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: logistics services) in the third quarter of 1997 increased 91% from the third quarter of 1996 due primarily to an increase in its value-added logistics services. In cases in which the Company performs value-added logistics services on its customers' products, only service fees are recorded as sales. These service fees are earned by the Company through its provision of a variety of services including inventory procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and management, financing, 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. , programming, light assembly, kitting and packaging, and various other services. As a result of the increase in units handled by the Company for which only service fees are recorded as revenue, sales in North America were slightly lower in the third quarter of 1997 than the third quarter of 1996. Sales in the Latin America division also decreased when compared to the third quarter of 1996 due to a planned reduction in sales to other distributors; however, sales increased significantly from the second quarter of 1997 (7% of total sales) as the Company continued to implement its strategy of selling directly to network operators in Latin America. Consolidated net sales for the third quarter of 1997 were generated from the sale of wireless handsets (86% of net sales), the sale of wireless accessories (7%) and fees generated from the provision of value-added logistics services (7%). Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . The operating margin for the third quarters ended September 30, 1997 and 1996 were 4.0% and 4.9%, respectively. For the nine months ended September 30, 1997 and 1996, operating margins were 4.0% and 4.2%, respectively. These decreased operating margins resulted primarily from an increase in selling, general and administrative expenses as a percent of net sales which was partially offset by an increase in the amount of value-added logistics services provided by Brightpoint (on which the Company has higher margins than on its product sales). The increase in expenses is due primarily to the addition of extensive managerial resources in all of the Company's operating divisions. These resources are necessary to support the increasing demands placed on the Company for its value-added logistics services and due to the significant growth experienced and forecasted for both distribution and value-added logistics services. Net Income. Net income for the third quarter of 1997 increased 85% from pro forma net income for the third quarter of 1996. Pro forma net income for 1996 provides for income taxes in periods in which Allied was not subject to income taxes and excludes the after-tax impact of the one-time merger expenses related to the Allied merger. The increase in net income is due primarily to a 67% increase in net sales. In addition, interest costs increased due to higher average borrowings during the quarter and the effective income tax rate decreased from 36% in the third quarter of 1996 to 30% in the third quarter of 1997, due primarily to the increased earnings in 1997 in tax jurisdictions with lower statutory rates. The minority interest in subsidiaries' earnings decreased from $1,042,000 in the third quarter of 1996 to $29,000 in the third quarter of 1997 due to the Company's purchase of all significant minority interests. These purchases were made in the fourth quarter of 1996 and the first and second quarters of 1997. The 100% increase in net income for the nine months ended September 30, 1997, as compared to the same period in 1996, is impacted by generally the same factors as those discussed above. Net income per share was $0.24 for the third quarter of 1997 (based on 25,049,000 weighted average shares outstanding) compared to $0.15 for the same period a year ago (based on 21,039,000 weighted average shares outstanding). During the first quarter of 1997, the Company realized a gain on the sale of its equity investment in CellStar Corporation. The gain, net of transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , was approximately $8,303,000. In addition, the Company recorded losses on its investments in Pocket Communications, Inc. and two smaller equity investments totaling approximately $6,871,000. The net investment gain recorded in the second quarter of 1997 was $1,432,000. Excluding the impact of this net investment gain and related income taxes, net income per share for the nine months ended September 30, 1997 would have been $0.64. Balance Sheet. During the third quarter of 1997, the average 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 41 days, compared to the average days sales outstanding for 1996 of approximately 48 days. During the third quarter of 1997, inventory turned approximately 10 times, a significant improvement from the average turnover for 1996 of 8 times. In order to fund working capital needs and potential acquisitions, the Company completed a public offering of common stock during the quarter, from which the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to the Company totaled approximately $76 million. The Company offers financing of inventory and 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 to certain customers under contractual arrangements. These financing services are complementary to the inventory management and other value-added logistics services provided by the Company. The amount financed pursuant to these arrangements is recorded as a current asset under the caption "Contract Financing Receivables." Brightpoint is a leading provider of distribution and value-added logistics services to the wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. industry. The Company facilitates the effective and efficient distribution of wireless handsets and related accessories from leading manufacturers to network operators, agents, resellers, dealers and retailers in the wireless communications market. "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. " as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 may be included in this news release. A variety of factors could cause the Company's actual results to differ from the results expressed in such forward-looking statements. Investors are referred to the Company's Cautionary Statements (Exhibit 99 to the Company's most recent Form 10-Q Form 10-Q See 10-Q. ), which Cautionary Statements are incorporated into this news release by reference. -0-
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Ended
September 30 September 30
1996 1997 1996 1997
________ ________ ________ ________
Net sales $145,290 $243,210 $378,146 $662,406
Cost of sales 133,036 222,576 349,482 607,756
________ ________ ________ ________
Gross profit 12,254 20,634 28,664 54,650
Selling, general and
administrative expenses 5,105 10,836 12,872 27,972
________ ________ ________ ________
Income from operations 7,149 9,798 15,792 26,678
Merger expenses - - 2,750 -
Net investment gain - - - 1,432
Interest expense, net 549 1,283 1,172 4,389
________ ________ ________ ________
Income before income
taxes and minority interest 6,600 8,515 11,870 23,721
Income taxes 2,349 2,557 4,320 7,097
________ ________ ________ ________
Income before minority
interest 4,251 5,958 7,550 16,624
Minority interest in
subsidiaries' earnings 1,042 30 1,042 413
________ ________ ________ ________
Net income $ 3,209 $ 5,928 $ 6,508 $ 16,211
________ ________ ________ ________
________ ________ ________ ________
Pro forma financial information:
Historical income before
income taxes and
minority interest $ 6,600 $ 8,515 $ 11,870 $ 23,721
Pro forma income taxes 2,349 2,557 4,796 7,097
Minority interest in
subsidiaries' earnings 1,042 30 1,042 413
________ ________ ________ ________
Pro forma net income $ 3,209 $ 5,928 $ 6,032 $ 16,211
________ ________ ________ ________
________ ________ ________ ________
Pro forma net income
per share $ 0.15 $ 0.24 $ 0.29 $ 0.68
________ ________ ________ ________
________ ________ ________ ________
Weighted average common
shares outstanding 21,039 25,049 20,942 23,911
________ ________ ________ ________
________ ________ ________ ________
Pro forma financial information excluding
the effect of the one-time merger
expenses:
Pro forma net income $ 3,209 $ 5,928 $ 8,093 $ 16,211
________ ________ ________ ________
________ ________ ________ ________
Pro forma net
income per share $ 0.15 $ 0.24 $ 0.39 $ 0.68
________ ________ ________ ________
________ ________ ________ ________
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31 September 30
1996 1997
___________ ____________
ASSETS
Current assets:
Cash and cash equivalents $ 14,255 $ 20,220
Marketable securities 18,000 -
Accounts receivable (less allowance for
doubtful accounts of $1,115 in 1996
and $1,882 in 1997) 113,119 131,114
Inventories 112,916 93,593
Contract financing receivables - 30,306
Other current assets 8,422 18,840
________ ________
Total current assets 266,712 294,073
Property and equipment 8,207 20,068
Goodwill 15,232 24,247
Other assets 8,894 5,143
________ ________
Total assets $299,045 $343,531
________ ________
________ ________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $123,231 $ 83,749
________ ________
Total current liabilities 123,231 83,749
Notes payable 79,564 65,132
Deferred taxes 330 330
Minority interest 938 316
Stockholders' equity:
Common stock 216 251
Additional paid-in capital 73,206 159,883
Foreign currency translation adjustment 97 125
Unrealized gain on marketable securities,
available-for-sale, net of tax 3,929 -
Retained earnings 17,534 33,745
________ ________
Total stockholders' equity 94,982 194,004
________ ________
Total liabilities and stockholders' equity $299,045 $343,531
________ ________
________ ________
CONTACT: Brightpoint, Inc., Indianapolis, Indiana “Indianapolis” redirects here. For other uses, see Indianapolis (disambiguation). Indianapolis (IPA: [ˌɪndiəˈnæpəlɪs]) is the capital city of the U.S. Phillip Phillip is a variant of the name Philip. It may refer to: Given name:
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