Brightpoint Reports Second Quarter 2005 Financial Results.PLAINFIELD Plainfield, city (1990 pop. 46,567), Union co., NE N.J.; settled 1684 by Friends, inc. as a city 1869. Formerly a residential city in the New York metropolitan area, it has become the urban center of 10 closely allied municipalities, with diversified industries, , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. . -- 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):
-- Income from continuing operations of $5.1 million, or $.28 per
diluted share, which includes the following items:
-- $900 thousand in severance and employee related settlement
expenses in France and Corporate headquarters
-- $800 thousand operating loss in our France operations
-- $400 thousand in professional fees and travel expenses
associated with our evaluation and improvement of internal
controls in France and Australia
-- Net income of $4.9 million, or $.27 per diluted share, a per share
increase of 35% from the second quarter of 2004
-- Revenue of $524 million, an increase of 13% from the second
quarter of 2004
-- $7.0 million of cash flow provided by operating activities during
the second quarter of 2005. Balance sheet remained strong:
unrestricted cash of $76 million, 3.7% gross-debt-to-total
capitalization ratio, $155 million in Liquidity
-- A record number of wireless devices handled of 9.5 million, an
increase of 60% from the second quarter of 2004 driven by 113%
growth in fee-based logistic services unit volumes
-- Operating income from continuing operations of $8.0 million, an
increase of 12% from the second quarter of 2004
-- Received preliminary indication of selection to provide
distribution and logistic services to an additional well-known
company that will launch an MVNO in late 2005 or early 2006
Brightpoint, Inc. (NASDAQ:CELL) reported its financial results for the second quarter ended June June: see month. 30, 2005. Unless otherwise noted, amounts are in thousands (except per share data) and pertain to pertain to verb relate to, concern, refer to, regard, be part of, belong to, apply to, bear on, befit, be relevant to, be appropriate to, appertain to the second quarter of 2005.
SUMMARY FINANCIAL RESULTS
Three Months Ended Six months ended
--------------------- ----------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
---------- ---------- ----------- ----------
(Unaudited) (Unaudited)
Wireless devices handled 9,491 5,922 17,115 11,600
Revenue $523,940 $463,074 $1,009,553 $903,284
Gross profit $31,620 $26,643 $59,917 $50,710
Gross margin 6.0% 5.8% 5.9% 5.6%
Selling, general and
administrative expenses $23,608 $19,678 $46,461 $39,551
Operating income from
continuing operations $8,012 $7,180 $12,253 $11,374
Income from continuing
operations $5,106 $4,790 $7,672 $7,144
Net income $4,899 $3,964 $7,773 $1,743
Diluted per share:
Income from continuing
operations $0.28 $0.24 $0.42 $0.36
Net income $0.27 $0.20 $0.43 $0.09
Key highlights and developments in the second quarter of 2005 include: --88% increase in 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. in our Americas A·mer·i·cas , the See America. division compared to the second quarter of 2004 driven by strong market demand, promotional activities by mobile operators and mobile virtual network operators A Mobile Virtual Network Operator (MVNO) is a company that provides mobile (sometimes called wireless or cellular) telephone service but does not have its own allocation of the radio frequency spectrum nor all of the infrastructure required to provide mobile telephone service. ("MVNOs") and expanded supplier and customer relationships --$2.2 million 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 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 in our 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). division primarily caused by an $800 thousand operating loss in
our France operation, $233 thousand in severance The act of dividing, or the state of being divided.The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and employee related settlements in our France operation and decreased demand for our products and services in Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. . Brightpoint experienced a 60% year-over-year increase in wireless devices handled during the second quarter of 2005. Our revenue growth of 13% year-over-year was tempered by a sales mix sales mix See product mix. shift from product distribution revenue to fee-based logistic lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation services revenue. Fee-based logistic services units handled increased 113% while our distribution units handled remained relatively unchanged. Logistic services typically generate significantly less revenue per transaction than distribution sales. The significant growth in logistic services units handled resulted in the percentage of wireless devices handled under fee-based logistic service agreements to increase to 71% of total wireless devices handled as compared to 54% of the total wireless devices handled in the second quarter of 2004. Our Americas and Europe divisions were significant contributors to our unit growth with 99% and 66% year-over-year increases in wireless devices handled, respectively. The growth in unit shipments in the Americas division was primarily driven by increased demand from our prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. wireless network operator
customers, including MVNOs, increased units handled with new network
operator customers and increased demand for, and availability of, LG,
Samsung and Nokia products The following is a partial list of products branded by Nokia. Mobile phonesPhones in boldface indicates that the phone is a Symbian OS powered smartphone. in our distribution channels. The unit volume increases in the Europe division were the result of growth in demand for High Tech Computer Corporation ("HTC HTC HTML (Hyper Text Markup Language) Component HTC High Tech Computer Corp (Taiwan, China) HTC Hennepin Technical College (Minnesota) HTC High-Throughput Computing ") Qtek branded smart-phones, as well as increased fee-based logistic service volumes relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the launch of our Slovak Slo·vak also Slo·va·ki·an n. 1. a. A native or inhabitant of Slovakia. b. A person of Slovak descent. 2. The Slavic language of the Slovaks. adj. Republic operation in the second half of 2004. Wireless devices handled for the six months ended June 30, 2005 were up 48% in comparison to the six months ended June 30, 2004. While the number of wireless devices handled in logistic services and distribution increased from the first half of 2004, the growth in logistic services units handled outpaced the growth experienced in our distribution business. For the six months ended June 30, 2005, we experienced a 12% year-over-year increase in revenue. The percentage increase in revenue was less than the growth rate in wireless devices handled due to a sales mix-shift from units handled through distribution to fee-based logistic services. Gross margins increased from 5.8% in the second quarter of 2004 to 6.0% for the second quarter of 2005. Gross margins for the six months ended June 30, 2005 increased to 5.9% compared to 5.6% for six months ended June 30, 2004. The increase in gross margin was driven by continued shifts in mix toward fee-based logistic services. In addition, the increase in gross margin reflects the positive impact of lower operating costs operating costs npl → gastos mpl operacionales relative to increased logistic services' unit volume partially offset by declines in logistic services' average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. . SG&A expenses increased 20% from the second quarter of 2004, in comparison with a 13% increase in revenue and a 19% increase in gross profit. The $3.9 million increase in SG&A spending partially resulted from $900 thousand in employee related severance and settlement payments primarily related to the resignations of our Chief Accounting Officer and Chief Financial Officer as well as settlement of employee disputes in our France operation and Corporate headquarters and $400 thousand in legal and professional fees related to the evaluation of our internal controls and operations in France and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Total spending was also impacted by an estimated $700 thousand unfavorable effect of the strengthening of foreign currencies relative to the U.S. dollar, $900 thousand in increased costs in the Americas division related to the increased number of wireless devices handled in logistic services and $500 thousand in SG&A expense associated with our entry into the Slovak Republic and Finland Finland, Finnish Suomi (swô`mē), officially Republic of Finland, republic (2005 est. pop. 5,223,000), 130,119 sq mi (337,009 sq km), N Europe. in the second half of 2004. Operating income from continuing operations ("Operating Income") was $8.0 million, an increase of 12% from the second quarter of 2004 including $900 thousand in severance and employee related settlement payments, $800 thousand of losses relating to our France operations and $400 thousand in expenses related to the evaluation of our internal controls in France and Australia. The year-over-year growth in Operating Income was driven by an 88.4% increase in Operating Income for our Americas division and a 4.3% increase in Operating Income for our Asia Pacific division, partially offset by a $2.7 million decline in Operating Income in our Europe division. The increase in Operating Income in our Americas division was the result of growth in all lines of business and positive impact of decreased operating costs relative to increased logistic services' unit volume. The increase in Operating Income in our Asia Pacific division was primarily due to an increase in wireless devices sold in our Australia and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. operations partially offset by a decline in wireless devices sold through our Brightpoint Asia Limited business. The decline in Operating Income for the Europe division was primarily the result of an $800 thousand operating loss in our France operation, $233 thousand in severance and employee related settlements in our France operation and decreased demand for our products and services in Sweden. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Operating Income was $12.3 million, an increase of 8% from the first half of 2004. The year-to-date increase in Operating Income was primarily due to Operating Income growth in the Americas division offset by a $4.7 million operating loss in our Europe division and a $1.2 million facility consolidation charge in Australia in the first quarter of 2005. Cash and cash equivalents (unrestricted) were $76 million, an increase of $4.3 million from March 31, 2005 and an increase of $17.6 million from June 30, 2004. The increase in cash and cash equivalents (unrestricted) from March 31, 2005 was primarily the result of $7.0 million in cash flow provided by operating activities offset by $3.8 million in capital expenditures and $4.6 million in share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. under our previously approved Share Repurchase Program. The cash conversion cycle was 6 days, a decrease of 1 day from the first quarter of 2005 and equal to the second quarter of 2004. During the first quarter of 2005, we repurchased 227,400 of our common shares at an average price of $19.35 per share for a total of $4.4 million. During the second quarter of 2005 we repurchased 243,650 of our common shares at an average price of $18.90 per share for a total of $4.6 million. The share repurchases were made pursuant to a $20 million share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and announced on November November: see month. 30, 2004 ("Share Repurchase Plan"). As of June 30, 2005, $7.0 million of share repurchases are permitted to be made under our Share Repurchase Plan currently scheduled to expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. on December December: see month. 31, 2005. Our Liquidity (unrestricted cash and unused borrowing availability) was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $155 million as of June 30, 2005, compared to approximately $143 million as of March 31, 2005, and approximately $123 million as of June 30, 2004. The Company had a gross-debt-to-total-capitalization ratio of 3.7%, in comparison to 1% at June 30, 2004, and 3% at March 31, 2005. 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. quarterly return on invested capital from operations ("ROIC ROIC Return On Invested Capital ROIC Return On Investment Capital ROIC Readout Integrated Circuit ROIC Resident Officer In Charge ROIC Regional Office Implementation Committee ") was 15% consistent with 15% in the second quarter of 2004 and up from 10% in the first quarter of 2005. On a trailing four-quarter basis, ROIC was 16% as of June 30, 2005. Calculations of ROIC can be found at the end of this earnings release. Brightpoint is one of the world's largest distributors of mobile phones. Brightpoint supports the global wireless telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and data industry, providing quickly deployed, flexible and cost effective solutions. Brightpoint's innovative services include distribution, channel management, 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. , eBusiness See e-business. solutions and other 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 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 Information and Investor Relations Investor relations The process by which the corporation communicates with its investors. 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 the Company. 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, the Company's most recent Form 10-K/A and Form 10-Q Form 10-Q See 10-Q. and the cautionary statements contained in Exhibit 99.1 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, (i) dependence upon principal suppliers and availability and price of wireless products; (ii) loss of significant customers or a reduction in prices we charge these customers; (iii) reliance on a third party to manage significant operations in our 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; (iv) possible difficulties collecting our 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 ; (v) lack of demand for our products and services in certain markets and our inability to maintain margins; (vi) our ability to absorb absorb To offset sell orders or a new security offering with buy orders. , through revenue growth, the increasing operating costs that we have incurred and continue 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. in connection with our activities and the execution of our strategy for growth; (vii) risks of foreign operations, including currency, trade restrictions A trade restriction is an artificial restriction on the trade of goods between two countries. It is the result of protectionism. However, the term is not uncontroversial since what one part may see as a trade restriction another may see as a way to protect consumers from inferior, and political risks in our foreign markets; (viii) factors that could affect forward-looking statements relating to the resolution of the material weakness with respect to internal controls discussed in Item 9A of the Company's Annual Report on Form 10-K/A, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , including, among other things, the Company's ability to design and maintain policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental which enable the Company to avoid any recurrence recurrence /re·cur·rence/ (-ker´ens) the return of symptoms after a remission.recur´rent re·cur·rence n. 1. of the matters which gave rise to the material weakness; (ix) uncertainty whether wireless equipment manufacturers and network operators will continue to outsource outsource verb To assign specific work to a 3rd party for a specific length of time at an set price and service level Managed care To use outside labor to perform functions–billing and collections, accounting, janitorial services, ER aspects of their business to us; (x) possible adverse effect on demand for our products or services resulting from consolidation of wireless network operator customers; (xi) our ability to comply with Section 404 of the Sarbanes-Oxley Act See SOX. of 2002; (xii) ability to respond to rapid technological changes in 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. and data industry; (xiii) access to or the cost of increasing amounts of capital, trade credit or other financing; (xiv) effect of hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. or terrorist attacks on our operations. Because of the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. uncertainties affecting our future operating results, past performance should not be considered to be a reliable indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of future performance, and investors should not use historical trends to anticipate future results or trends. The words "believe," "expect," "anticipate," "intend," and "plan" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which speak only as of the date that such statement was made. We undertake no obligation to update any forward-looking statement.
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
2005 2004 2005 2004
--------- --------- ---------- ---------
Revenue:
Product distribution revenue $437,900 $397,509 $844,624 $775,451
Integrated logistics services
revenue 86,040 65,565 164,929 127,833
--------- --------- ---------- ---------
Total revenue 523,940 463,074 1,009,553 903,284
Cost of revenue:
Cost of product distribution
revenue 423,464 382,717 814,049 747,378
Cost of integrated logistics
services revenue 68,856 53,714 135,587 105,196
--------- --------- ---------- ---------
Total cost of revenue 492,320 436,431 949,636 852,574
--------- --------- ---------- ---------
Gross profit 31,620 26,643 59,917 50,710
Selling, general and
administrative expenses 23,608 19,678 46,461 39,551
Facility consolidation charge
(benefit) - (215) 1,203 (215)
--------- --------- ---------- ---------
Operating income from
continuing operations 8,012 7,180 12,253 11,374
Interest expense 687 549 1,272 1,018
Interest income (235) (302) (446) (503)
Net other expenses 265 401 467 970
--------- --------- ---------- ---------
Income from continuing
operations before income
taxes 7,295 6,532 10,960 9,889
Income tax expense 2,189 1,742 3,288 2,745
--------- --------- ---------- ---------
Income from continuing
operations 5,106 4,790 7,672 7,144
Discontinued operations:
Loss from discontinued
operations (204) (416) (234) (757)
Gain (loss) on disposal of
discontinued operations (3) (410) 335 (4,644)
--------- --------- ---------- ---------
Total discontinued operations (207) (826) 101 (5,401)
--------- --------- ---------- ---------
Net income $4,899 $3,964 $7,773 $1,743
========= ========= ========== =========
Basic per share:
Income from continuing
operations $0.29 $0.25 $0.43 $0.37
Discontinued operations (0.01) (0.04) 0.01 (0.28)
--------- --------- ---------- ---------
Net income $0.28 $0.21 $0.44 $0.09
========= ========= ========== =========
Diluted per share:
Income from continuing
operations $0.28 $0.24 $0.42 $0.36
Discontinued operations (0.01) (0.04) 0.01 (0.27)
--------- --------- ---------- ---------
Net income $0.27 $0.20 $0.43 $0.09
========= ========= ========== =========
Weighted average common shares
outstanding:
Basic 17,647 19,050 17,685 19,160
========= ========= ========== =========
Diluted 18,230 19,622 18,272 19,784
========= ========= ========== =========
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
June 30, December 31, June 30,
2005 2004 2004
----------- ------------ -----------
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $75,541 $72,120 $57,964
Pledged cash 12,746 13,830 16,595
Accounts receivable (less
allowance for doubtful
accounts of $6,560, $6,215
and $3,808, respectively) 136,758 148,321 114,582
Inventories 116,975 110,089 112,049
Contract financing receivable 18,148 14,022 12,192
Other current assets 27,210 23,132 13,893
----------- ------------ -----------
Total current assets 387,378 381,514 327,275
Property and equipment, net 27,566 27,503 27,392
Goodwill and other intangibles,
net 19,854 21,981 18,943
Other assets 4,686 6,586 9,300
----------- ------------ -----------
Total assets $439,484 $437,584 $382,910
=========== ============ ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $199,267 $201,621 $179,083
Accrued expenses 60,952 61,851 50,010
Unfunded portion of contract
financing receivable 26,477 23,375 24,005
Lines of credit 5,648 - 832
----------- ------------ -----------
Total current liabilities 292,344 286,847 253,930
COMMITMENTS AND CONTINGENCIES
Shareholders' equity:
Preferred stock, $0.01 par
value; 1,000 shares
authorized; no shares issued
or outstanding - - -
Common stock, $0.01 par value;
100,000 shares authorized;
20,016 19,499 and 19,330
issued, respectively 200 195 193
Additional paid-in capital 245,205 233,768 227,710
Unearned Compensation (9,397) - -
Treasury stock, at cost, 2,077,
1,606 and 1,398 shares,
respectively (33,013) (24,010) (19,997)
Retained earnings (deficit) (56,195) (63,968) (75,995)
Accumulated other comprehensive
income (loss) 340 4,752 (2,931)
----------- ------------ -----------
Total shareholders' equity 147,140 150,737 128,980
----------- ------------ -----------
Total liabilities and
shareholders' equity $439,484 $437,584 $382,910
=========== ============ ===========
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
---------- -------- -------- --------
Operating activities
Net income $4,899 $3,964 $7,773 $1,743
Adjustments to reconcile net
income to net cash provided
(used) by operating activities:
Depreciation and
amortization 2,795 2,564 5,811 5,225
Facility consolidation
charge (benefit) - (215) 1,203 (215)
Restricted cash requirements 40 (91) 1,084 447
Non-cash compensation 677 - 677 -
Discontinued operations 207 826 (101) 5,401
Net cash used by discontinued
operations (14) (111) (16) (1,515)
Tax benefit of incentive
stock option exercises 380 588
Change in deferred income
taxes 287 - (1,516) -
Changes in operating assets
and liabilities, net of
effects from acquisitions
and divestitures:
Accounts receivable (17,334) (7,700) 6,315 4,589
Inventories (22,762) (15,291) (10,906) (5,560)
Other operating assets (2,080) (2,819) (5,006) (1,677)
Accounts payable 36,548 7,806 5,385 (14,658)
Accrued expenses 3,363 2,876 3,428 (5,760)
---------- -------- -------- --------
Net cash provided by (used in)
operating activities 7,006 (8,191) 14,719 (11,980)
Investing activities
Capital expenditures (3,811) (1,296) (5,966) (3,465)
Cash effect of divestitures - (1,138) - 576
Purchase acquisitions, net of
cash acquired (29) (388) (337) (601)
Decrease (increase) in funded
contract financing receivables 808 4,669 (947) 7,537
Decrease (increase) in other
assets 2,985 (95) 2,929 (467)
---------- -------- -------- --------
Net cash provided by investing
activities (47) 1,752 (4,321) 3,580
Financing activities
Purchases of treasury stock (4,605) (19,997) (9,004) (19,997)
Net proceeds (payments) on credit
facilities 939 845 5,606 (15,639)
Pledged cash requirements - - - 5,000
Repurchase of convertible notes - - - -
Proceeds from common stock
issuances under employee stock
option and purchase plans 465 63 781 371
---------- -------- -------- --------
Net cash used in financing
activities (3,201) (19,089) (2,617) (30,265)
Effect of exchange rate changes
on cash and cash equivalents 585 (1,962) (4,360) (2,250)
---------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents 4,343 (27,490) 3,421 (40,915)
Cash and cash equivalents at
beginning of period 71,198 85,454 72,120 98,879
---------- -------- -------- --------
Cash and cash equivalents at end
of period $75,541 $57,964 $75,541 $57,964
========== ======== ======== ========
Supplemental Information
(Amounts in thousands)
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA")
Three Months Ended
-----------------------------
June 30, June 30, March 31,
2005 2004 2005
--------- --------- ---------
Net income $4,899 $3,964 $2,874
Net interest expense 452 247 373
Income taxes (includes income taxes
included in Discontinued Operations) 2,189 1,742 1,100
Depreciation and amortization 2,795 2,564 3,016
--------- --------- ---------
EBITDA $10,335 $8,517 $7,363
========= ========= =========
EBITDA is a non-GAAP financial measure. EBITDA provides management
with an indicator of how much cash the Company generates, excluding
any changes in working capital. Management also reviews and utilizes
the entire statement of cash flows to evaluate cash flow performance.
Cash Conversion Cycle Days
Management utilizes the cash conversion cycle days metric and its
components to evaluate the Company's ability to manage its working
capital and its cash flow performance. Cash conversion cycle days and
its components for the quarters ending June 30, 2005 and 2004, and
March 31, 2005 were as follows:
Three Months Ended
----------------------------
June 30, June 30, March 31,
2005 2004 2005
--------- -------- ---------
Days sales outstanding in accounts
receivable 22 21 22
Days inventory on-hand 23 24 22
Days payable outstanding (39) (39) (37)
--------- -------- ---------
Cash Conversion Cycle Days 6 6 7
========= ======== =========
Supplemental Information (continued)
(Amounts in thousands)
Return on Invested Capital ("ROIC")
The Company uses ROIC to measure the effectiveness of its use of
invested capital to generate profits. ROIC for the quarters and
trailing four quarters ending June 30, 2005 and 2004, and March 31,
2005, was as follows:
Three Months Ended Trailing Four Quarters Ended
----------------------------- -----------------------------
June 30, June 30, March 31, June 30, June 30, March 31,
2005 2004 2005 2005 2004 2005
--------- --------- --------- --------- --------- ---------
Operating
income
after
taxes:
Operating
income
from
continuing
operations $8,012 $7,180 $4,240 $31,810 $29,366 $30,978
Plus:
Facility
consol-
idation
charge - (215) 1,203 1,182 785 967
Less:
Estimated
income
taxes(1) (2,404) (1,857) (1,634) (9,889) (8,183) (9,350)
--------- --------- --------- --------- --------- ---------
Operating
income
after
taxes $5,608 $5,108 $3,809 $23,103 $21,968 $22,595
========= ========= ========= ========= ========= =========
Invested
capital:
Debt $5,648 $832 $4,563 $5,648 $832 $4,563
Share-
holders'
equity 147,140 128,980 147,912 147,140 128,980 147,912
--------- --------- --------- --------- --------- ---------
Invested
capital $152,788 $129,812 $152,475 $152,788 $129,812 $152,475
========= ========= ========= ========= ========= =========
Average
invested
capital(2)$152,631 $138,684 $151,606 $144,760 $141,543 $143,714
========= ========= ========= ========= ========= =========
ROIC(3) 15% 15% 10% 16% 16% 16%
========= ========= ========= ========= ========= =========
(1) Estimated income taxes were calculated by multiplying the sum of
operating income from continuing operations and the facility
consolidation charge by the respective periods' effective tax
rate.
(2) Average invested capital for quarterly periods represents the
simple average of the beginning and ending invested capital
amounts for the respective quarter. Average invested capital for
the trailing four quarter periods represents the average of the
ending invested capital amounts for the current and four prior
quarter period ends.
(3) ROIC is calculated by dividing operating income after taxes by
average invested capital. ROIC for quarterly periods is stated on
an annualized basis and is calculated by dividing operating income
after taxes by average invested capital and multiplying the result
by four (4) to state ROIC on an annualized basis.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion