Full Press Release:
Brightpoint Reports Record Fourth Quarter Financial Results
INDIANAPOLIS--(BUSINESS WIRE)--Jan. 27, 1998--
Fourth quarter net sales increased 76% to $373,243,000 vs.
$211,572,000 in prior year
Fourth quarter net income increased 105% to $9,299,000
vs. $4,529,000 in prior year
Fourth quarter net income per share (diluted) increased
80% to $0.18 vs. $0.10 in prior year
Brightpoint, Inc. (NASDAQ:CELL - news) reported its financial results for the fourth quarter ended December 31, 1997. Net
sales for the fourth quarter of 1997 increased 76% to $373,243,000 as compared to $211,572,000 for the fourth quarter of
1996. Net income of $9,299,000, or $0.18 per share (diluted), for the fourth quarter of 1997 increased 105% from
$4,529,000, or $0.10 per share (diluted), for the same period of 1996. Net sales for the year ended December 31, 1997
increased 76% to $1,035,649,000 as compared to $589,718,000 for 1996. Net income of $25,511,000, or $0.53 per share
(diluted), for the year ended December 31, 1997 increased 102% from $12,622,000 (pro forma), or $0.30 per share
(diluted), 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
(Allied), pursuant to their June 1996 merger.
Generally accepted accounting principles require that certain charges related to a transaction accounted for as a pooling of
interests be expensed in the period in which the transaction is consummated. As such, fees paid to banks, investment banks,
attorneys and accountants, and other one-time 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 the year ended
December 31, 1996 exclude the after-tax 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 fourth quarter of 1997, net sales were derived 40% from the Company's Asia-Pacific (APAC) division, 21%
from the North America (NA) division, 28% from the Europe, Middle East and Africa (EMA) division and 11% from the
Latin America (LA) division. Sales for the fourth quarter of 1996 were derived 35% from APAC, 32% from North America,
20% from EMA and 13% from Latin America.
The following table indicates net sales by division and the rate of growth when comparing the fourth quarter of 1997 to the
third quarter of 1997 and to the fourth quarter of 1996 (dollars in thousands):
Quarter Quarter Quarter Year-to-
Ended Ended Sequential Ended Year
September December Growth December Growth
Division 30, 1997 31, 1997 Rate 31, 1996 Rate
___________________________________________________________________
APAC $100,989 $149,744 48% $74,360 101%
NA 58,482 79,934 37% 68,601 17%
EMA 59,958 103,244 72% 42,206 145%
LA 23,781 40,321 70% 26,405 53%
____________________ ________
Total $243,210 $373,243 53% $211,572 76%
______________________________________________________
______________________________________________________
Consolidated net sales for the fourth quarter of 1997 were generated from the sale of wireless handsets (90% of net sales), the
sale of wireless accessories (4%) and fees generated from the provision of value-added logistics services (6%).
Operating Margin. The operating margins (income from operations as a percent of net sales) for the fourth quarters ended
December 31, 1997 and 1996 were 4.1% and 4.3%, respectively. For the years ended December 31, 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 increased business activities, and includes 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. In addition, depreciation and amortization expenses increased due to capital
expenditures and purchase acquisitions.
Net Income. Net income for the fourth quarter of 1997 increased 105% from net income for the fourth quarter of 1996. The
increase in net income is due primarily to a 76% increase in net sales. Interest costs increased due to higher average
borrowings during the quarter and the effective income tax rate decreased from 36% in the fourth quarter of 1996 to 30% in
the fourth quarter of 1997, due primarily to the increased earnings in 1997 in tax jurisdictions with lower statutory rates.
The 102% increase in net income for the year ended December 31, 1997, as compared to 1996, is impacted by generally the
same factors as those discussed above. 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.
Net income per share (diluted) was $0.18 for the fourth quarter of 1997 (based on 52,583,000 weighted average shares
outstanding) compared to $0.10 for the same period a year ago (based on 44,814,000 weighted average shares outstanding).
Net income per share (diluted) was $0.53 for the year ended December 31, 1997 (based on 48,461,000 weighted average
shares outstanding) compared to $0.30 for the year ended December 31, 1996 (based on 42,279,000 weighted average
shares outstanding).
Balance Sheet. As of December 31, 1997, days sales outstanding in accounts receivable was approximately 42 days,
compared to days sales outstanding at December 31, 1996 of approximately 48 days. During the fourth quarter of 1997,
inventory turned approximately 14 times, a significant improvement from the average turnover for the fourth quarter of 1996 of
7 times. In order to fund working capital needs and potential acquisitions, the Company completed a public offering of
common stock during the third quarter of 1997, from which the net proceeds to the Company totaled approximately $76
million.
The Company offers financing of inventory and receivables to certain network operators 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, which is partially secured by inventories in the Company's
possession, 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 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'' 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 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 Cautionary Statements are incorporated into this news release by reference.
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Three Months
Ended Year Ended
December 31 December 31
1996 1997 1996 1997
________ ________ ________ __________
Net sales $211,572 $373,243 $589,718 $1,035,649
Cost of sales 194,396 342,722 543,878 950,478
________ ________ ________ __________
Gross profit 17,176 30,521 45,840 85,171
Selling, general and
administrative expenses 7,976 15,337 20,849 43,309
________ ________ ________ __________
Income from operations 9,200 15,184 24,991 41,862
Merger expenses - - 2,750 -
Net investment gain - - - 1,432
Interest expense, net 947 1,978 2,118 6,367
________ ________ ________ __________
Income before income taxes
and minority interest 8,253 13,206 20,123 36,927
Income taxes 3,009 3,967 7,328 11,065
________ ________ ________ __________
Income before minority
interest 5,244 9,239 12,795 25,862
Minority interest 715 (60) 1,758 352
________ ________ ________ __________
Net income $ 4,529 $ 9,299 $ 11,037 $ 25,510
________ ________ ________ __________
________ ________ ________ __________
Pro forma net income(1) $ 12,622
________
________
Net income per share
(pro forma for the year
ended December 31, 1996):
Basic $ 0.11 $ 0.18 $ 0.31 $ 0.55
Diluted $ 0.10 $ 0.18 $ 0.30 $ 0.53
Weighted average common
shares outstanding '
Basic 42,587 50,358 40,743 46,630
Diluted 44,814 52,583 42,279 48,461
(1) Pro forma net income for the year ended December 31, 1996
excludes the after-tax effect of one-time merger expenses of
$2,061,000 and estimated income taxes of $476,000 which represents
income taxes that Allied Communications would have incurred had it
been a tax paying entity for that period.
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
December 31, December 31,
1996 1997
___________ ___________
ASSETS
Current assets:
Cash and cash equivalents $ 14,255 $ 2,941
Accounts receivable (less allowance for
doubtful accounts of $1,115 in 1996 and
$3,394 in 1997) 113,119 212,946
Contract financing receivables - 49,470
Inventories 112,916 95,716
Marketable securities 18,000 3,478
Other current assets 8,422 26,960
__________ ___________
Total current assets 266,712 391,511
Property and equipment, net 8,207 23,420
Goodwill 15,232 31,161
Other assets 8,894 10,610
__________ ___________
Total assets $ 299,045 $ 456,702
__________ ___________
__________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 123,231 $ 110,191
__________ ___________
Total current liabilities 123,231 110,191
Deferred taxes 330 -
Note payable 79,564 146,963
Minority interest 938 257
Stockholders' equity:
Preferred stock, $.01 par value:
1,000,000 shares authorized; no
shares issued or outstanding - -
Common stock, $.01 par value:
100,000,000 shares authorized;
43,273,000 and 50,396,000 issued and
outstanding in 1996 and 1997,
respectively 433 504
Additional paid-in capital 73,206 160,485
Retained earnings 17,317 42,793
Unrealized gain on marketable
securities, net of tax 3,929 (74)
Foreign currency translation adjustment 97 (4,417)
__________ ___________
Total stockholders' equity 94,982 199,291
__________ ___________
Total liabilities and stockholders' equity $ 299,045 $ 456,702
__________ ___________
__________ ___________
Contact:
Brightpoint, Inc., Indianapolis, Indiana
Phillip A. Bounsall, 317/297-6100 |
