Brightpoint to Emphasize Relationships With Wireless
Equipment Manufacturers and Network Operators
INDIANAPOLIS--(BUSINESS WIRE)--Oct. 2, 1998--
-- Brightpoint to eliminate trading division and recognize a
fourth quarter charge
-- Brightpoint to focus on integrated services to wireless
communications industry
-- Wireless equipment manufacturers and network operators applaud
move
Brightpoint, Inc. (NASDAQ:CELL - news) announced today that it will be eliminating its trading division during the fourth
quarter of 1998, consistent with its strategy of emphasizing relationships with wireless equipment manufacturers and network
operators. The trading division engages in the purchase of products from suppliers other than the manufacturers and the sale of
those products to customers other than network operators or their dealers and other representatives. Brightpoint's established
global infrastructure allows it to provide the requisite services to the manufacturers and network operators without the trading
business.
Brightpoint intends to accelerate its migration to a services- based organization, focusing on providing integrated services to
wireless equipment manufacturers and network operators. The services will be designed to assist these customers in
performing mission critical business functions in the most efficient and effective manner.
The Company will recognize, in the fourth quarter of 1998, a one-time charge which is expected to range from $13 million to
$18 million ($9 million to $13 million or $0.17 to $0.23 per share after giving effect to taxes) related to the elimination of the
trading division, which will include the loss on the sale of certain assets, severance payments for terminated employees and
write-off of certain assets including leasehold improvements and certain information systems costs. Also included in the charge
will be a reserve for estimated accrued liabilities.
The elimination of the trading division is expected to reduce 1999 selling, general and administrative expenses by an amount
ranging from approximately $4 million to $5 million from previously planned spending levels. In addition, sales of products
purchased directly from the manufacturers generally result in higher margins than the sales of products obtained through trading
activities. Excluding the impact of the one-time charge, the elimination of the trading division is not expected to have a negative
impact on results of operations for the third or fourth quarter of 1998.
''Eliminating this working-capital intensive business and focusing on our integrated services will allow us to achieve our primary
goal -- delivering exceptional and sustainable growth in shareholder value,'' stated Robert J. Laikin, Chairman and Chief
Executive Officer of Brightpoint, Inc. ''We believe that the acceleration of our movement to providing integrated, outsourced
services to world class manufacturers and network operators is critical to providing value to our customers and our
stockholders in the long-run, as well as in the short-term. Our newly-established operations in Europe, Asia and Latin America
allow us to exit this business much like we curtailed sales to other distributors in these regions in recent periods. We are
well-positioned to execute our plans in 1999 and beyond.''
''Brightpoint has adopted a strategy that we believe will redefine the wireless communications supply channel by providing
valued, integrated services to assist manufacturers and network operators around the world,'' stated Nigel Litchfield, Senior
Vice President, Asia Pacific, Nokia Mobile Phones (NYSE:NOK.A - news). ''The discontinuation of the trading business is
evidence of Brightpoint's ability to work in association with Nokia to bring products to world markets in the most efficient and
effective manner. Brightpoint's strategy will ultimately provide wireless subscribers cost-effective access to better products and
services.''
''Brightpoint's new strategy will strengthen our already solid relationship as they focus on providing value and integrity to the
supply chain,'' stated Jan Ahrenbring, Vice President Marketing and Communications, Ericsson Mobile Communications AB
(NASDAQ:ERICY - news). ''We believe that the discontinuation of the trading business is a natural evolution for Brightpoint
as they become the premier provider of services to the wireless telecommunications industry.''
''As one of Brightpoint's first logistics services customers, we are very excited about their continued focus on providing
integrated logistics services,'' stated George Schmitt, President of Omnipoint Communications (NASDAQ:OMPT - news).
''This will allow us and many other players in the wireless community to focus on core business functions and rely on
Brightpoint for efficiency in many other key areas. We also support the discontinuation of the trading business as this should
help to add integrity to the supply channels on which we rely.''
Brightpoint, Inc. is a leading provider of innovative services to network operators and equipment manufacturers in the global
wireless telecommunications industry. Brightpoint strives to enhance the success of its customers through the specialized and
focused provision of efficient and effective solutions to their mission critical business requirements. The Company's innovative
services include inventory management, prepaid solutions, custom packaging and other outsourced services. Additional
information about the Company can be found on its website at www.brightpoint.com or by calling its toll-free Investor
Relations Information line at 877-IIR-CELL (877-447-2355).
''Forward-looking statements'' as defined in the Private Securities Litigation Reform Act of 1995 may be included in this news
release. A variety of factors could cause the Company's actual results to differ from the reported 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), which statements are incorporated into this news release by reference.
Contact:
Brightpoint, Inc., Indianapolis, Indiana
Phillip A. Bounsall, Chief Financial Officer
317/297-6100 |
