PLAINFIELD, Ind., Aug. 5, 2008 (GLOBE NEWSWIRE) -- Brightpoint, Inc. (Nasdaq:CELL) reported its financial results for the second quarter ended June 30, 2008. Unless otherwise noted, amounts pertain to the second quarter of 2008.
FOR THE SECOND QUARTER OF 2008:
Because of the acquisition of Dangaard Telecom on July 31, 2007, the Company believes that it is meaningful to compare financial results for the second quarter of 2008 to the first quarter of 2008 as well as to the second quarter of 2007.
Revenue was $1.2 billion for the second quarter of 2008, an increase of 2% from the first quarter of 2008 and an increase of 43% from the second quarter of 2007.
Loss from continuing operations of $2.3 million or $0.03 per diluted share for the second quarter of 2008 compared to income from continuing operations of $0.8 million or $0.01 per diluted share for the first quarter of 2008 and income from continuing operations of $17.7 million or $0.35 per diluted share for the second quarter of 2007. Weighted average common shares outstanding (diluted) of 81.4 million for the second quarter of 2008 compared to 81.5 million for the first quarter of 2008 and 50.7 million for the second quarter of 2007.
Adjusted income from continuing operations (non-GAAP) of $4.7 million or $0.06 per diluted share compared to $7.3 million or $0.09 per diluted share for the first quarter of 2008 and $5.4 million or $0.10 per diluted share for the second quarter of 2007. Please see the disclosure below regarding adjusted income from continuing operations. Adjustments to income from continuing operations for the second quarter of 2008 include:
* A $3.0 million restructuring charge (pre-tax) consisting primarily of a
$1.6 million charge in connection with the previously announced sale of
certain assets in Colombia and a $1.1 million charge to write-off IT
projects that were abandoned after the acquisition of Dangaard Telecom.
* $4.7 million (pre-tax) of non-cash amortization expense related to
acquired intangible assets.
* $1.8 million (pre-tax) of non-cash stock based compensation expense.
Additionally, second quarter 2008 results were impacted by the following items:
* A $7.5 million (pre-tax) charge in Slovakia related to the liquidation
of slow moving locally branded notebook PCs in advance of the roll-out
of a new microchip platform from Intel. We are currently in discussions
with our partners to evaluate the future of this program. We expect to
be completely sold through this inventory by the end of the third
quarter of 2008.
* A $0.9 million (pre-tax) loss from the sale of shares of Tessco, Inc.
common stock resulting from a privately negotiated transaction with
Tessco, Inc. to sell these shares.
* A $1.0 million (pre-tax) inventory obsolescence charge in Poland due
to the unsuccessful negotiation of price protection with a mobile
virtual network operator and related manufacturers. We have taken
steps to mitigate future risks associated with this program.
* An income tax benefit of $5.0 million, which includes a $3.0 million
benefit from the reversal of a valuation allowance on deferred tax
assets resulting from previous net operating losses in Germany.
Cash provided by operating activities was $259.8 million for the six months ended June 30, 2008 compared to cash used in operating activities of $11.9 million for same period in the prior year. Cash provided by operating activities as well as cash on hand was used to pay down borrowings by $235.0 million as of June 30, 2008.
EBITDA was $9.4 million for the second quarter of 2008 compared to $18.5 million for the first quarter of 2008 and $12.1 million for the second quarter of 2007.
We handled 19.9 million wireless devices for the second quarter of 2008 compared to 21.8 million for the first quarter of 2008 and 19.4 million for the second quarter of 2007, a decrease of approximately 9% from the first quarter of 2008 and an increase of 2% from the second quarter of 2007. The sale of certain assets in Colombia resulted in approximately 1.0 million fewer units handled in the second quarter of 2008 compared to the first quarter of 2008 and 0.8 million fewer units compared to the second quarter of 2007.
Gross margin was 6.5% for the second quarter of 2008, a decrease of 0.8 percentage points from the first quarter of 2008 and an increase of 1.6 percentage points from the second quarter of 2007. Gross margin was negatively impacted by approximately 0.8 percentage points due to the loss related to the liquidation of locally branded PC notebooks in Slovakia discussed above.
SG&A expenses of $71.4 million for the second quarter of 2008 were relatively flat compared to the first quarter of 2008 and increased 118% compared to the second quarter of 2007. SG&A expenses increased compared to the second quarter of 2007 primarily because of the acquisition of Dangaard Telecom. SG&A expenses as a percent of revenue were 5.9% for the second quarter of 2008 compared to 6.0% for the first quarter of 2008 and 3.8% compared to the second quarter of 2007.
Interest expense was $6.9 million for the second quarter of 2008 compared to $7.5 million for the first quarter of 2008 and $2.3 million for the second quarter of 2007.
FOR THE 2008 FISCAL YEAR, MANAGEMENT CURRENTLY EXPECTS:
* Units handled to be between 90 million to 95 million units, a reduction
from the previously disclosed range of approximately 100 million, as a
result of many macro economic events and general weakness in the
European and U.S. wireless markets.
* Adjusted (non-GAAP) SG&A expenses to be approximately $7.0
million to $9.0 million lower in the second half of 2008 compared to
the first half of 2008.
* Annual effective tax rate from 32% to 35%.
* Non-GAAP weighted average common shares outstanding (diluted) of
approximately 83.3 million.
Please see the attached Schedules and the Brightpoint website at www.Brightpoint.com for an explanation and reconciled presentation of the results for the second quarter ended June 30, 2008 prepared in accordance with U.S. GAAP and on an as adjusted non-GAAP basis. The explanation includes the reasons why management believes such non-GAAP measures are useful both to management and investors. Any financial measure other than those prepared in accordance with U.S. GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. In addition, please see the attached Supplemental Information for a reconciliation of EBITDA.
"In the second quarter of 2008 we continued to focus on the integration of the Dangaard operations," stated Robert J. Laikin, Brightpoint's Chief Executive Officer and Chairman of the Board. "Our financial results for Q2 were below our expectations, and we remain committed to executing our operating plan and enhancing long term shareholder value. Our focus areas for 2008 and beyond include continuing to drive down debt by managing our balance sheet, executing on our recently announced European restructuring plan as well as other reductions in spending, continuing to align with leaders in the Smartphone space, and growing our presence in India and Latin America. I believe Smartphones will account for roughly 75% of all wireless devices sold globally in the next five years. Our strategic focus areas for the next several years will revolve around distribution, customized logistics and associated activation competencies in the Smartphone arena."
"I am pleased with our progress on our inventory reduction initiative which resulted in a 7-day reduction in DIO from the first quarter," said Tony Boor, Brightpoint's Chief Financial Officer. This improvement in inventory levels combined with other improvements in working capital helped us generate over $160 million in positive cash flow from operations in the second quarter. The positive cash flow allowed us to reduce our debt balances by more than $135 million at the end of the quarter. As a result, I revised our debt target for the end of 2008 to a target of $200 million, which is a reduction of approximately $260 million from the end of our last fiscal year end."
UPDATE ON PREVIOUSLY ANNOUNCED REALIGNMENT OF EUROPEAN OPERATIONS
On June 30, 2008 the Company announced that as part of the natural progression of the Dangaard integration process, it was realigning its European operations in an effort to streamline its business processes and optimize its business model. The Company believes that these efforts, and the resultant cost reductions and operational efficiencies, will help produce additional synergies for the Company. This realignment will result in the elimination of approximately 50 to 75 positions at our current European division headquarters in Denmark by the end of this year. In addition, the Company is in the process of eliminating approximately 225 positions from its European division's operating entities as well as not filling approximately 60 open and future positions. The foregoing headcount reductions will be coupled with other significant cost reduction initiatives in Brightpoint's European operating entities. These cost reduction initiatives will be fully implemented by the end of 2008, which are expected to result in approximately $12 to $14 million in spending reductions for the second half of 2008 and $25 million to $30 million in annualized spending reductions for 2009. Some of these spending reductions will be realized within SG&A and some will be realized within gross profit. The Company expects to incur restructuring costs of $10.0 million to $15.0 million in the third quarter of 2008 related to these initiatives. All but $1.3 million to $1.6 million of the estimated charges are directly related to the Dangaard Telecom acquisition and thus will impact the goodwill recorded in purchase accounting.
In addition to the spending reductions in Europe, the Company is currently implementing cost saving strategies throughout its operating entities to lower spending on facilities, advertising and promotions, professional fees, travel and entertainment, and other spending areas.
SUMMARY FINANCIAL RESULTS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
-----------------------------------
June 30, March 31,
2008 2007 2008
---------- ---------- ----------
Wireless devices handled 19,895 19,426 21,784
Revenue $1,215,228 $ 850,995 $1,194,781
Gross profit $ 79,398 $ 41,583 $ 87,269
Gross margin 6.5% 4.9% 7.3%
Selling, general and
administrative expenses $ 71,446 $ 32,728 $ 71,751
Operating income from continuing
operations $ 164 $ 8,191 $ 7,182
(Loss) income from continuing
operations $ (2,334) $ 17,721 $ 759
Net (loss) income $ (2,331) $ 17,688 $ 775
Diluted per share:
(Loss) income from continuing
operations $ (0.03) $ 0.35 $ 0.01
Net (loss) income $ (0.03) $ 0.35 $ 0.01
Brightpoint, Inc. (Nasdaq:CELL) is a global leader in the distribution of wireless devices and in providing customized logistic services to the wireless industry. In 2007, Brightpoint handled approximately 83 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. The company has approximately 3,300 employees in over 25 countries. In 2007 Brightpoint generated revenue of $4.3 billion and net income of $47.4 million. Brightpoint provides distribution and customized services to over 25,000 B2B customers worldwide. 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 including, without limitation, its expectations regarding SG&A as a percent of revenue, annual effective tax rate, and non-GAAP weighted average common shares outstanding (diluted). 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 and risk factors contained therein. 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 as a result of consolidation of mobile phone operators, including Dobson Communications Corporation and Suncom, which were recently acquired or Rural Cellular Corporation (RCC) and Alltel, which have recently announced plans to be acquired; (ii) our obligations under certain debt, lease and other contractual arrangements ; (iii) dependence upon principal suppliers and availability and price of wireless products including the risk of consolidation of these suppliers; (iv) our ability to borrow additional funds; (v) collection of our accounts receivable; (vi) our ability to expand and implement our future growth strategy, including acquisitions; (vii) uncertainty regarding future volatility in our Common Stock price; (viii) uncertainty regarding 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) the potential for our operations to be materially affected by fluctuations in regional demand and economic factors; (xi) rapid technological changes in the wireless communications and data industry; (xii) risks of foreign operations, including currency, trade restrictions and political risks in our foreign markets; (xiii) effect of natural disasters, epidemics, hostilities or terrorist attacks on our operations; (xiv) the impact that seasonality may have on our business and results; (xv) our ability to attract and retain qualified management and other personnel, cost of complying with labor agreements and high rate of personnel turnover; (xvi) protecting our proprietary information; (xvii) existence of anti-takeover measures; (xviii) the fact that a substantial number of shares will be eligible for future sale by Dangaard Holding and the sale of those shares could adversely affect our stock price; (xix) integration of Dangaard Telecom's operations in a timely manner; (xx) acquisition related accounting impairment and amortization charges may delay and reduce our post-acquisition profitability; (xxi) exposure to unknown pre-existing liabilities of Dangaard Telecom; (xxii) possible adverse effects of future medical claims regarding the use of wireless devices; (xxiii) intense industry competition. 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. The words "believe," "expect," "anticipate," "estimate" "intend," "likely", "will", "should" 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.
NON-GAAP RECONCILIATION OF CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended
June 30, 2008(1)
---------------------------------------
US GAAP Non-GAAP As
As Reported Adjustments(2) Adjusted
----------- ------------ ----------
Revenue
Distribution
revenue $ 1,110,473 $1,110,473
Logistic services
revenue 104,755 104,755
----------- ----------
Total revenue 1,215,228 1,215,228
Cost of revenue
Cost of distribution
revenue 1,070,571 1,070,571
Cost of logistic
services revenue 65,259 65,259
----------- ----------
Total cost of revenue 1,135,830 1,135,830
----------- ----------
Gross profit 79,398 79,398
Selling, general
and administrative
expenses 71,446 $ (1,772) 69,674
Amortization 4,819 (4,710) 109
Restructuring charge 2,969 (2,969) --
----------- ------------ ----------
Operating income from
continuing operations 164 9,451 9,615
Interest, net 6,901 6,901
Other expenses 359 359
----------- ------------ ----------
Income (loss) from
continuing operations
before income taxes (7,096) 9,451 2,355
Income tax expense
(benefit) (4,955) 2,465 (2,490)
----------- ------------ ----------
Income (loss) from
continuing operations
before minority interest (2,141) 6,986 4,845
Minority interest 193 193
----------- ------------ ----------
Income (loss) from
continuing operations (2,334) $ 6,986 $ 4,652
============ ==========
Discontinued operations,
net of income taxes:
Loss from discontinued
operations (2)
Gain on disposal of
discontinued operations 5
-----------
Total discontinued
operations, net of
income taxes 3
-----------
Net income (loss) $ (2,331)
===========
Earnings per share
- basic:
Income (loss) from
continuing operations $ (0.03) $ 0.06
==========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ (0.03)
===========
Earnings per share
- diluted:
Income (loss) from
continuing operations $ (0.03) $ 0.06
==========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ (0.03)
===========
Weighted average
common shares
outstanding:
Basic 77,829 77,829
=========== ==========
Diluted 81,445 825 82,270
=========== ============ ==========
Three Months Ended
June 30, 2007(1)
---------------------------------------
US GAAP Non-GAAP As
As Reported Adjustments(3) Adjusted
----------- ------------- ---------
Revenue
Distribution
revenue $ 766,980 $ 766,980
Logistic services
revenue 84,015 84,015
----------- ---------
Total revenue 850,995 850,995
Cost of revenue
Cost of distribution
revenue 743,866 743,866
Cost of logistic
services revenue 65,546 65,546
----------- ---------
Total cost of revenue 809,412 809,412
----------- ---------
Gross profit 41,583 41,583
Selling, general
and administrative
expenses 32,728 $ (2,231) 30,497
Amortization 664 (620) 44
Restructuring charge -- -- --
----------- ------------ ---------
Operating income from
continuing operations 8,191 2,851 11,042
Interest, net 2,290 2,290
Other expenses 243 243
----------- ------------ ---------
Income (loss) from
continuing operations
before income taxes 5,658 2,851 8,509
Income tax expense
(benefit) (12,063) 15,152 3,089
----------- ------------ ---------
Income (loss) from
continuing operations
before minority interest 17,721 (12,301) 5,420
Minority interest -- --
----------- ------------ ---------
Income (loss) from
continuing operations 17,721 $ (12,301) $ 5,420
============ =========
Discontinued operations,
net of income taxes:
Loss from discontinued
operations (41)
Gain on disposal of
discontinued operations 8
-----------
Total discontinued
operations, net of
income taxes 33
-----------
Net income (loss) $ 17,688
===========
Earnings per share
- basic:
Income (loss) from
continuing operations $ 0.36 $ 0.11
=========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ 0.36
===========
Earnings per share
- diluted:
Income (loss) from
continuing operations $ 0.35 $ 0.10
=========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ 0.35
===========
Weighted average
common shares
outstanding:
Basic 49,671 49,671
=========== =========
Diluted 50,739 955 51,694
=========== ============ =========
See accompanying "Notes to Non-GAAP Reconciliation of Consolidated
Statements of Operations."
BRIGHTPOINT, INC.
NON-GAAP RECONCILIATION OF CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Six Months Ended
June 30, 2008(1)
-----------------------------------------
US GAAP Non-GAAP As
As Reported Adjustments(4) Adjusted
----------- ------------ -----------
Revenue
Distribution
revenue $ 2,199,483 $ 2,199,483
Logistic services
revenue 210,526 210,526
----------- -----------
Total revenue 2,410,009 2,410,009
Cost of revenue
Cost of distribution
revenue 2,109,716 2,109,716
Cost of logistic
services revenue 133,626 133,626
----------- -----------
Total cost of revenue 2,243,342 2,243,342
----------- -----------
Gross profit 166,667 166,667
Selling, general and
administrative expenses 143,197 $ (3,417) 139,780
Amortization 9,542 (9,219) 323
Restructuring charge 6,583 (6,583) --
----------- ------------ -----------
Operating income from
continuing operations 7,345 19,219 26,564
Interest, net 14,445 14,445
Other (income) expenses (1,607) (1,607)
----------- ------------ -----------
Income (loss) from
continuing operations
before income taxes (5,493) 19,219 13,726
Income tax expense
(benefit) (4,251) 5,738 1,487
----------- ------------ -----------
Income (loss) from
continuing operations
before minority interest (1,242) 13,481 12,239
Minority interest 332 332
----------- ------------ -----------
Income (loss) from
continuing operations (1,574) $ 13,481 $ 11,907
============ ===========
Discontinued operations,
net of income taxes:
Gain (loss) from
discontinued operations 14
Gain on disposal of
discontinued operations 4
-----------
Total discontinued
operations, net of
income taxes 18
-----------
Net income (loss) $ (1,556)
===========
Earnings per share
- basic:
Income (loss) from
continuing operations $ (0.02) $ 0.15
===========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ (0.02)
===========
Earnings per share
- diluted:
Income (loss) from
continuing operations $ (0.02) $ 0.14
===========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ (0.02)
===========
Weighted average common
shares outstanding:
Basic 77,676 77,676
=========== ===========
Diluted 81,530 1,301 82,831
=========== ============ ===========
Six Months Ended
June 30, 2007(1)
-----------------------------------------
US GAAP Non-GAAP As
As Reported Adjustments(5) Adjusted
----------- ------------ -----------
Revenue
Distribution revenue $ 1,334,020 $ 1,334,020
Logistic services
revenue 158,604 158,604
----------- -----------
Total revenue 1,492,624 1,492,624
Cost of revenue
Cost of distribution
revenue 1,294,280 1,294,280
Cost of logistic
services revenue 124,046 124,046
----------- -----------
Total cost of revenue 1,418,326 1,418,326
----------- -----------
Gross profit 74,298 74,298
Selling, general and
administrative expenses 60,981 $ (4,908) 56,073
Amortization 744 (620) 124
Restructuring charge -- -- --
----------- ----------- -----------
Operating income from
continuing operations 12,573 5,528 18,101
Interest, net 3,440 3,440
Other (income) expenses 287 287
----------- ----------- -----------
Income (loss) from
continuing operations 8,846 5,528 14,374
before income taxes
Income tax expense
(benefit) (10,717) 16,116 5,399
----------- ----------- -----------
Income (loss) from
continuing operations
before minority interest 19,563 (10,588) 8,975
Minority interest -- --
----------- -----------
Income (loss) from
continuing operations 19,563 $ (10,588) $ 8,975
=========== ===========
Discontinued operations,
net of income taxes:
Gain (loss) from
discontinued operations (37)
Gain on disposal of
discontinued operations 12
-----------
Total discontinued
operations, net of
income taxes (25)
-----------
Net income (loss) $ 19,538
===========
Earnings per share
- basic:
Income (loss) from
continuing operations $ 0.39 $ 0.18
===========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ 0.39
===========
Earnings per share
- diluted:
Income (loss) from
continuing operations $ 0.39 $ 0.17
===========
Discontinued operations,
net of income taxes --
-----------
Net income (loss) $ 0.39
===========
Weighted average common
shares outstanding:
Basic 49,580 49,580
=========== ===========
Diluted 50,615 1,066 51,681
=========== =========== ===========
See accompanying "Notes to Non-GAAP Reconciliation of Consolidated
Statements of Operations."
Notes to Non-GAAP Reconciliation of Consolidated Statements of
Operations:
(1) We have provided income from continuing operations and
earnings per share on both a U.S. GAAP basis and on an as
adjusted non-GAAP basis because the Company's management believes
it provides meaningful information to investors. Among other
things, it may assist investors in evaluating the Company's
on-going operations. Adjustments to earnings per share from
continuing operations generally include certain non-cash charges
such as stock based compensation and amortization of acquired
finite lived intangible assets as well as other items that are
considered to be unusual or infrequent in nature such as
restructuring charges. Non-GAAP earnings per share is calculated
by dividing non-GAAP income from continuing operations by
non-GAAP weighted average common shares outstanding (diluted).
For purposes of calculating non-GAAP earnings per share, we add
back certain shares presumed to be repurchased under the U.S.
GAAP treasury stock method related to stock based compensation
expense. We believe these non-GAAP disclosures provide important
supplemental information to management and investors regarding
financial and business trends relating to the Company's financial
condition and results of operations. Management uses these
non-GAAP measures internally to evaluate the performance of the
business and to evaluate results relative to incentive
compensation targets for certain employees. Investors should
consider non-GAAP measures in addition to, not as a substitute
for, or as superior to measures of financial performance prepared
in accordance with U.S. GAAP.
(2) Adjustments for the three months ended June 30, 2008 include:
* A $3.0 million restructuring charge (pre-tax) consisting
primarily of a $1.6 million charge in connection with the
previously announced sale of certain assets in Colombia and a
$1.1 million charge to write-off IT projects that were
abandoned after the acquisition of Dangaard Telecom.
* $4.7 million of non-cash amortization expense related to
acquired intangible assets.
* $1.8 million of non-cash stock based compensation expense.
* $2.5 million tax impact of items described above.
(3) Adjustments for the three months ended June 30, 2007 include:
* $1.3 million of non-cash stock based compensation expense.
* $0.9 million of consulting fees for integration planning
associated with the CellStar and Dangaard Telecom acquisitions.
* $0.6 million of non-cash amortization expense related to
intangible assets acquired in connection with the CellStar
transaction.
* $1.1 million tax impact of the items described above as well as
a $14.1 million tax benefit related to the reversal of valuation
allowances on certain foreign tax credit carryforwards.
(4) Adjustments for the six months ended June 30, 2008 include:
* A $6.6 million restructuring charge (pre-tax) consisting
primarily of a $1.6 million charge in connection with the
previously announced sale of certain assets in Colombia, a
$1.1 million charge to write-off IT projects that were abandoned
after the acquisition of Dangaard Telecom, and a $3.2 million
charge in connection with consolidating the Brightpoint and
Dangaard operations in Germany during the first quarter of 2008.
* $9.2 million of non-cash amortization expense related to
acquired intangible assets.
* $3.4 million of non-cash stock based compensation expense.
* $5.7 million tax impact of items described above.
(5) Adjustments for the six months ended June 30, 2007 include:
* $2.9 million of non-stock based compensation expense.
* $2.0 million of consulting fees for integration planning
associated with the CellStar and Dangaard Telecom acquisitions.
* $0.6 million of non-cash amortization expense related to
intangible assets acquired in connection with the CellStar
transaction.
* $2.0 million tax impact of the items described above as well as
a $14.1 million tax benefit related to the reversal of valuation
allowances on certain foreign tax credit carryforwards.
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
June 30, December 31,
2008 2007
---------- ----------
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 106,734 $ 102,160
Accounts receivable (less allowance for
doubtful accounts of $14,195 in 2008 and
$17,157 in 2007) 622,605 754,238
Inventories 384,929 474,951
Other current assets 69,782 69,261
---------- ----------
Total current assets 1,184,050 1,400,610
Property and equipment, net 58,112 55,732
Goodwill 407,657 349,646
Other intangibles, net 135,677 135,431
Other assets 33,659 30,942
---------- ----------
Total assets $1,819,155 $1,972,361
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 667,744 $ 666,085
Accrued expenses 179,403 189,415
Current portion of long-term debt 14,000 19,332
Lines of credit and other short-term
borrowings 1,901 --
---------- ----------
Total current liabilities 863,048 874,832
Long-term liabilities:
Lines of credit, long-term 7,922 208,399
Long-term debt 219,964 233,122
Other long-term liabilities 52,935 54,425
---------- ----------
Total long-term liabilities 280,821 495,946
---------- ----------
Total liabilities 1,143,869 1,370,778
COMMITMENTS AND CONTINGENCIES
Minority interest 352 818
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; 88,682 issued in 2008
and 88,418 issued in 2007 887 884
Additional paid-in-capital 622,114 584,806
Treasury stock, at cost, 7,063 shares in
2008 and 6,930 shares in 2007 (59,980) (58,695)
Retained earnings 27,911 29,467
Accumulated other comprehensive income 84,002 44,303
---------- ----------
Total shareholders' equity 674,934 600,765
---------- ----------
Total liabilities and shareholders' equity $1,819,155 $1,972,361
========== ==========
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Six months ended
June 30,
---------------------
2008 2007
--------- --------
Operating activities
Net income (loss) $ (1,556) $ 19,538
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 19,336 7,244
Discontinued operations (18) 25
Pledged cash requirements -- (212)
Non-cash compensation 3,417 2,872
Restructuring charge 6,583 --
Change in deferred taxes (3,677) (13,202)
Minority interest 466 --
Other non-cash 122 980
--------- --------
24,673 17,245
Changes in operating assets and liabilities,
net of effects from acquisitions and
divestitures:
Accounts receivable 176,899 (1,896)
Inventories 116,340 172,792
Other operating assets (3,220) 100
Accounts payable and accrued expenses (54,850) (200,108)
--------- --------
Net cash provided by (used in)
operating activities 259,842 (11,867)
Investing activities
Capital expenditures (10,702) (9,316)
Acquisitions, net of cash acquired (6,913) (68,864)
Decrease (increase) in other assets (132) 219
--------- --------
Net cash used in investing activities (17,747) (77,961)
Financing Activities
Net proceeds from (repayments) on
lines of credit (207,124) 76,334
Repayments on Global Term Loans (27,856) --
Deferred financing costs paid -- (1,758)
Purchase of treasury stock (1,284) (355)
Excess tax benefit from equity based
compensation 117 513
Proceeds from common stock issuances
under employee stock option plans 22 1,884
--------- --------
Net cash provided by (used in)
financing activities (236,125) 76,618
Effect of exchange rate changes on
cash and cash equivalents (1,396) 2,836
--------- --------
Net increase (decrease) in cash
and cash equivalents 4,574 (10,374)
Cash and cash equivalents at
beginning of period 102,160 54,130
--------- --------
Cash and cash equivalents at
end of period $ 106,734 $ 43,756
========= =========
Supplemental Information
(Amounts in thousands)
Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA")
Three Months Ended
--------------------------------
June 30, June 30, March 31,
2008 2007 2008
-------- -------- --------
Net income(1) $ (2,331) $ 17,688 $ 775
Net interest expense(1) 6,901 2,290 7,544
Income taxes(1) (4,955) (12,063) 705
Depreciation and amortization(1) 9,828 4,185 9,507
-------- -------- --------
EBITDA $ 9,443 $ 12,100 $ 18,531
======== ======== ========
(1) Includes discontinued operations
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 June 30, 2008 and 2007, and March 31, 2008 were as follows:
Three Months Ended
-----------------------------
June 30, June 30, March 31,
2008 2007 2008
------- ------- -------
Days sales outstanding in
accounts receivable 32 27 32
Days inventory on-hand 30 30 37
Days payable outstanding (45) (34) (41)
------- ------- -------
Cash Conversion Cycle Days 17 23 28
======= ======= =======
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 ended June 30, 2008 and 2007, and March 31, 2008, was as follows:
Three Months Ended
--------------------------------
June 30, June 30, March 31,
2008 2007 2008
-------- -------- ----------
Operating income after taxes:
Operating income from continuing
operations $ 164 $ 8,191 $ 7,182
Plus: restructuring charge 2,969 -- 3,614
Less: estimated income taxes(1) (2,188) 17,463 (4,746)
-------- -------- ----------
Operating income after taxes $ 945 $ 25,654 $ 6,050
======== ======== ==========
Invested Capital:
Debt $243,787 $ 95,069 $ 378,407
Shareholders' equity 674,934 228,791 638,344
-------- -------- ----------
Invested capital $918,721 $323,860 $1,016,751
======== ======== ==========
Average invested capital(2) $967,736 $309,164 $1,039,184
ROIC(3) 0% 33% 2%
Trailing Four Quarters Ended
--------------------------------
June 30, June 30, March 31,
2008 2007 2008
-------- -------- ----------
Operating income after taxes:
Operating income from continuing
operations $ 60,685 $ 37,049 $ 68,714
Plus: restructuring charge 15,244 -- 12,275
Less: estimated income taxes(1) (25,395) 9,940 (5,741)
-------- -------- ----------
Operating income after taxes $ 50,534 $ 46,989 $ 75,248
======== ======== ==========
Invested Capital:
Debt $243,787 $ 95,069 $ 378,407
Shareholders' equity 674,934 228,791 638,344
-------- -------- ----------
Invested capital $918,721 $323,860 $1,016,751
======== ======== ==========
Average invested capital(2) $859,623 $234,545 $ 734,773
ROIC(3) 6% 20% 10%
(1) Estimated income taxes were calculated by multiplying the sum
of operating income from continuing operations and the
restructuring 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.
CONTACT: Brightpoint, Inc.
Anthony Boor
317-707-2355
|
| Symbol: |
CELL |
| Last Trade: |
7.41
(11/20/2009 ET)
|
| Change: |
-0.21
(-2.7559%)
|
| Day's Range: |
7.31 -
7.72 |
| Open: |
7.54 |
| Previous Close: |
7.62 |
| TSO: |
78,897,000 |
| Market Cap: |
584.63M |
| Day's Volume: |
351,780 |
|
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