Brightpoint Reports Third Quarter 2006 Financial Results.

PLAINFIELD, Ind. -- Brightpoint, Inc. (NASDAQ:CELL):

-- Third Quarter Financial Highlights:

   -- Record Revenue of $633.7 million, an increase of 16% from the
      third quarter 2005.

   -- Income from continuing operations of $8.9 million ($0.18 per
      diluted share) compared to $8.3 million ($0.17 per diluted
      share) in the third quarter of 2005, a year-over-year increase
      of 8%.

   -- Net income of $8.8 million, or $0.17 per diluted share in the
      third quarter 2006 compared to a net loss of $6.2 million, or
      ($0.12) per diluted share in the third quarter of 2005.

   -- Total liquidity of $201.9 million as of September 30, 2006,
      consisting of $103.6 million of cash and $98.3 million of
      unused borrowing availability.

   -- 12.6 million wireless devices handled, a year-over-year increase
      of 17%, driven by 19% growth in fee-based logistic services unit
      volumes and a 12% increase in distribution unit volumes.

   -- Operating income from continuing operations of $12.5 million in
      the third quarter of 2006 as compared to $11.3 million in the
      third quarter of 2005, a year-over-year increase of 10%. In the
      third quarter of 2006, operating income from continuing
      operations included approximately $1.2 million of non-cash stock
      based compensation expense including the effects of the
      Company's adoption of SFAS 123(R).

   -- EBITDA of $15.1 million in the third quarter of 2006 as compared
      to $1.6 million in the third quarter of 2005.

-- Entered into a distribution agreement with Motorola on November 7,
   2006 to distribute wireless devices and related accessories
   covering various regions, with the initial focus of this master
   distribution agreement on Central Europe.

-- Brightpoint North America L.P. entered into a logistic services
   agreement on November 7, 2006 with Motorola to provide a wide range
   of outsourced logistic services to support their retail and
   direct-to-consumer channels.

Brightpoint, Inc. (NASDAQ:CELL) reported its financial results for the third quarter ended September 30, 2006.

Unless otherwise noted, amounts pertain to the third quarter of 2006. Additionally, the results of our former operations in France have been reclassified to "discontinued operations" for all periods presented. In May 2006, the Company's Board of Directors approved and the Company effected a 6-for-5 common stock split in the form of a 20% stock dividend. Per share amounts for all periods presented in this report have been adjusted to reflect the 6-for-5 common stock split.

"In Q3, our revenue of $634 million was an all time quarterly record," stated Robert J. Laikin, Brightpoint's Chairman of the Board and Chief Executive Officer. "The global demand for wireless devices continued to be healthy as reflected by the estimated 243 million units sold in the global wireless industry during Q3 2006. I currently expect that Q4 will grow approximately between 5% and 7% sequentially and that the number of handset units sold by the global wireless industry will be in the range of 255 million to 260 million units. This growth should be driven primarily by wireless demand from high growth markets such as India and Russia. My previously estimated industry sell-in range of 950 million to 1 billion units for 2006 remains unchanged, however, I believe now, that the sell-in may be closer to 950 million units. Based on our most recent outlook, I now expect the units handled by Brightpoint for 2006 to be in the range of 53 million to 55 million units. On a year-over-year basis, we are on track to grow faster than the global wireless device industry in terms of unit growth. As I look towards 2007, I remain bullish on the global wireless device industry and expect a sell-in range of 1.05 billion to 1.15 billion units for 2007 representing high double digit growth year-over-year. I also believe that this demand will continue for the next several years with 2011 global sell-in estimate of 1.5 billion units. We are committed to enhancing long term shareholder value and believe that we can do so by executing on our growth strategy."

"I am very pleased with the strength of our balance sheet as we ended the quarter with cash of approximately $104 million, an increase of $21 million from the 2nd quarter of 2006 and combined cash and borrowing availability of approximately $202 million," said Tony Boor, Brightpoint's Chief Financial Officer. "We believe we are well positioned for growth and we remain focused on our commitment to enhance long-term shareholder value and profitability."

On November 7, 2006 the Company entered into a distribution agreement, whereby it was appointed as a distributor for Motorola wireless devices and related accessories covering various regions, with the initial focus of this master distribution agreement on Central Europe. In addition, on November 7, 2006 the Company's primary North American subsidiary, Brightpoint North America L.P., entered into a logistic services agreement with Motorola to provide a wide range of outsourced logistic services to support Motorola's retail and direct-to-consumer channels for Motorola's Mobile Devices Business and Connected Home Business.

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Brightpoint experienced a year-over-year increase in wireless devices handled of 17% during the third quarter of 2006 and year-over-year growth in revenue of 16%. Wireless devices handled through logistic services increased to 73% of total wireless devices handled for the third quarter of 2006 compared to 72% of total wireless devices handled in the third quarter of 2005.

Our Americas, Asia-Pacific and Europe divisions experienced year-over-year growth in wireless devices handled of 14%, 22% and 50%, respectively. The growth in wireless devices handled in our Americas division was primarily driven by increased demand as a result of market growth experienced by current logistic services customers, which was partially offset by a decline in volume with our primary network operator customer in Colombia as a result of their decision to radically curtail promotional activities during the third quarter of 2006 due to market saturation in Colombia. The increase in wireless devices handled in our Asia-Pacific division was primarily due to increased handset distribution units sold through our Brightpoint Asia Limited business as a result of improved product availability at competitive prices. The increase in wireless devices handled in our Europe division was due to increased demand for and availability of branded converged wireless devices as well as our entry into Russia during the second quarter of 2006.

As compared to the second quarter of 2006, Brightpoint experienced a 15% increase in revenue during the third quarter of 2006 despite a 5% decrease in wireless devices handled. Wireless devices sold through distribution increased 21% while fee-based logistic services units decreased 12%. The sequential decline in wireless devices handled was primarily due to the decline in volume with our primary network operator customer in Colombia.

Gross margin for the third quarter of 2006 remained unchanged from the third quarter of 2005 at 5.8%. A 0.5 percentage point increase in gross margin from our distribution business offset a 2.1 percentage point decrease in gross margin from logistic services. Distribution gross margin increased as a result of an increase in gross margin in our Europe and Asia-Pacific divisions, which were partially offset by a lower distribution gross margin in our Americas division. The increase in distribution gross margin in our Europe division resulted from increased demand for and availability of branded converged wireless devices as well as our entry into Russia during the second quarter of 2006. The increase in distribution gross margin in our Asia-Pacific division was primarily a result of an expanded global relationship with a major original equipment manufacturer. The decrease in distribution gross margin in our Americas division was primarily due to inventory obsolescence reserves on aged accessory inventory recorded during the third quarter of 2006. The 2.1 percentage point decrease in logistic services gross margin was due primarily to a decline in gross margin from handset fulfillment in our Americas division. Our Americas division experienced lower gross margins from handset fulfillment due to the significant reduction in volume in Colombia and a shift in mix to more complex handset fulfillment services for which we have yet to realize operational efficiencies.

Gross margin decreased from 6.5% in the second quarter of 2006 to 5.8% in the third quarter of 2006. The decrease in gross margin was primarily due to a 1.7 percentage point decrease in gross margin from logistic services, which was driven by our Americas division due to the factors mentioned above. Gross profit increased 4.0% to $37.0 million in the third quarter of 2006 compared to $35.7 million in the second quarter of 2006, which was driven by an 18% sequential growth in distribution revenue at relatively flat margins.

Selling, General and Administrative (SG&A) expenses increased $3.9 million or 19% from the third quarter of 2005. As a percent of revenue, SG&A expenses increased to 3.9% in the third quarter of 2006 from 3.8% in the third quarter of 2005. The increase in SG&A was primarily due to a $1.8 million increase in personnel costs primarily in support of overall growth in volumes, a $0.2 million increase in non-cash stock based compensation including the effects of adopting SFAS 123(R), a $0.3 million increase to support our investment in Advance Wireless Services (AWS) in the Americas and a $0.9 million increase related to the acquisition of Persequor during the first quarter of 2006. SG&A expenses increased $0.1 million from the second quarter of 2006.

Operating income from continuing operations (Operating Income) was $12.5 million, an increase of 10% from the third quarter of 2005. The year-over-year growth in Operating Income for the quarter was driven by a $5.3 million increase in gross profit compared to a $3.9 million increase in SG&A. Operating Income increased 10% from the second quarter of 2006 due to a 4% increase in gross profit compared to relatively flat SG&A expenses.

The effective income tax rate in the third quarter of 2006 was 25.3% as compared to 24.9% in the third quarter of 2005. The increase in the effective income tax rate is primarily the result of a mix shift in income earned in different tax jurisdictions.

Cash and cash equivalents (unrestricted) were $103.6 million at September 30, 2006, an increase of $21.1 million from June 30, 2006. Our liquidity (unrestricted cash and unused borrowing availability) was approximately $202 million as of September 30, 2006 compared to $159 million as of June 30, 2006.

Brightpoint, Inc (NASDAQ:CELL) is a global leader in the distribution of wireless devices and the provision of customized logistic services to the wireless industry. In 2005, Brightpoint handled 42 million wireless devices globally. Brightpoint's innovative services include distribution, channel development, fulfillment, product customization, eBusiness solutions, and other outsourced services that integrate seamlessly with its customers. Brightpoint's effective and efficient platform allows its customers to benefit from quickly deployed, flexible, and cost effective solutions. Additional information about Brightpoint can be found on its website at www.brightpoint.com, or by calling its toll-free Information and Investor Relations line at 877-IIR-CELL (877-447-2355).

Certain information in this press release may contain forward-looking statements 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 and Form 10-Q and the cautionary statements contained in Exhibit 99.1 thereto. 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 relating to customer plans and commitments, including, without limitation, (i) loss of significant customers or a reduction in prices we charge these customers; (ii) possible adverse effect on demand for our products resulting from consolidation of mobile operator customers; (iii) our ability to increase volumes and maintain our margins; (iv) dependence upon principal suppliers and availability and price of wireless products; (v) possible difficulties collecting our accounts receivable; (vi) our ability to expand geographically on a satisfactory basis, through acquisition or otherwise; (vii) uncertainty regarding future volatility in our Common Stock price; (viii) uncertainty whether wireless equipment manufacturers and wireless network operators will continue to outsource aspects of their business to us; (ix) our reliance upon third parties to manufacture products which we distribute and reliance upon their quality control procedures; (x) our operations may be materially affected by fluctuations in regional demand and economic factors; (xi) ability to respond to rapid technological changes in the wireless communications and data industry; (xii) access to or the cost of increasing amounts of capital, trade credit or other financing; (xiii) risks of foreign operations, including currency, trade restrictions and political risks in our foreign markets; (xiv) effect of hostilities or terrorist attacks on our operations; (xv) investment in sophisticated information systems technologies and our reliance upon the proper functioning of such systems; (xvi) ability to borrow additional funds; (xvii) our ability to meet intense industry competition; (xviii) ability to manage and sustain future growth at our historical or industry rates; (xix) certain relationships and financings, which may provide us with minimal returns or losses on our investments; (xx) the impact that seasonality may have on our business and results; (xxi) ability to attract and retain qualified management and other personnel, cost of complying with labor agreements and high rate of personnel turnover; (xxii) ability to protect our proprietary information; (xxiii) our significant payment obligations under certain lease and other contractual arrangements; (xxiv) ability to maintain adequate insurance at a reasonable cost; (xxv) possible adverse effects of future medical claims regarding the use of wireless handsets; (xxvi) the potential issuance of additional equity, including our common shares, which could result in dilution of existing shareholders and may have an adverse impact on the price of our common shares; and (xxvii) existence of anti-takeover measures. Because of the aforementioned uncertainties affecting our future operating results, past performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate future results or trends. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date these statements were made. 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.

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   EBITDA is a non-GAAP financial measure. Management believes EBITDA
   provides it with an indicator of how much cash the Company
   generates, excluding non-cash charges and 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 September 30, 2006 and
   2005, and June 30, 2006 were as follows:
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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 September 30, 2006 and 2005, and
   June 30, 2006, was as follows:
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(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 quarters represents the simple average of the
    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
    results by four (4).