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Exhibit 99.1

BRIGHTPOINT REPORTS FOURTH QUARTER AND FULL YEAR 2011 FINANCIAL RESULTS

BrightPoint Reports Record Revenue and Wireless Devices Handled for Full Year 2011

Year Ended 2011 compared to 2010:

 

 

Revenue increased 46% to $5.24 billion

 

 

112.2 million wireless devices handled, an increase of 14%

 

 

Gross profit increased 19% to $375.8 million

 

 

Diluted EPS from continuing operations of $0.70 (GAAP) and $1.07 (non-GAAP), an increase of 27% and 22%, respectively

 

 

EBITDA (non-GAAP) of $120.4 million, an increase of 40%

Fourth quarter compared to prior year:

 

 

Revenue increased 39% to $1.56 billion

 

 

30.7 million wireless devices handled, an increase of 6%

 

 

Gross profit increased 7% to $101.9 million

 

 

Diluted EPS from continuing operations of $0.22 (GAAP) and $0.34 (non-GAAP)

 

 

EBITDA (non-GAAP) of $34.9 million, an increase of 14%

INDIANAPOLIS – February 1, 2012 – Brightpoint, Inc. (“BrightPoint”) (Nasdaq: CELL), a global leader in providing device lifecycle services to the wireless industry, today announced its financial results for the fourth quarter and year ended December 31, 2011.

Revenue for the year ended December 31, 2011 was $5.24 billion, which represents record revenue generated in a full year. Revenue was $1.56 billion for the fourth quarter of 2011, an increase of 39% compared to the fourth quarter of 2010 and an increase of 16% compared to the third quarter of 2011.

Wireless devices handled, including tablets, were 112.2 million for the year ended December 31, 2011, which represents a record amount handled in a year. Wireless devices handled were 30.7 million (includes 0.8 million tablets) for the fourth quarter of 2011, which was a record amount handled in a quarter for BrightPoint. This represents an increase of 6% compared to the fourth quarter of 2010 and an increase of 13% compared to the third quarter of 2011.

Income from continuing operations was $15.0 million, or $0.22 per diluted share, for the fourth quarter of 2011 compared to $15.4 million, or $0.22 per diluted share, for the fourth quarter of 2010 and $13.1 million, or $0.19 per diluted share, for the third quarter of 2011.

Adjusted income from continuing operations (non-GAAP) was $24.2 million, or $0.34 per diluted share, for the fourth quarter of 2011 compared to $24.0 million, or $0.34 per diluted share, for the fourth quarter of 2010 and $20.8 million, or $0.29 per diluted share, for the third quarter of 2011.

Adjusted income from continuing operations (non-GAAP) of $0.34 per diluted share for the fourth quarter of 2011 excludes the following items:

 

   

$6.1 million (pre-tax) of non-cash amortization expense related to acquired intangible assets.

 

   

$3.0 million (pre-tax) charge related to a contingency from a contract that was acquired with the purchase of Dangaard Telecom in 2007.

 

   

$2.1 million (pre-tax) restructuring charge consisting primarily of lease termination charges and severance charges in connection with the closure and relocation of certain Touchstone Wireless operations and continued global consolidation and rationalization in our Europe, Middle East, and Africa (EMEA) division.

 

   

$2.8 million (pre-tax) of non-cash stock based compensation expense.

 

   

$3.7 million of tax benefit related to the excluded items described above.

 

1


   

$1.1 million of tax benefit related to the reversal of valuation allowances on certain deferred tax assets and foreign tax credits that are expected to be utilized.

Gross profit was $101.9 million for the fourth quarter of 2011 compared to $95.0 million for the fourth quarter of 2010 and $94.3 million for the third quarter of 2011.

Gross margin was 6.5% for the fourth quarter of 2011 compared to 8.5% for the fourth quarter of 2010 and 7.0% for the third quarter of 2011. The reduction in gross margin from the fourth quarter of 2010 was primarily due to a decrease in gross margin in the Americas division and a higher percentage of business from the Southeast Asia operation. The decrease in gross margin in the Americas division was due to the expansion of our repair/refurbish/recycle services that have lower gross margins compared to our other logistic services and the current competitive environment in our distribution business. The decrease in gross margin from the third quarter of 2011 was primarily due to higher operating costs in our Americas division that we do not expect to recur in future periods as well as a higher mix of revenue generated by our distribution business.

SG&A expense was $70.0 million for the fourth quarter of 2011 compared to $62.3 million for the fourth quarter of 2010 and $65.1 million for the third quarter of 2011. SG&A expense for the fourth quarter of 2011 includes a $3.0 million charge related to a contingency from a contract that was acquired with the purchase of Dangaard Telecom in 2007.

Total debt was $253.0 million at December 31, 2011, compared to $171.5 million at September 30, 2011 and $90.4 million at December 31, 2010. Total liquidity (unrestricted cash and unused borrowing availability) was $332.8 million at December 31, 2011 compared to $400.0 million at September 30, 2011 and $446.7 million at December 31, 2010. Average daily debt outstanding for the fourth quarter of 2011 was $355.0 million compared to average daily debt outstanding of $314.9 million for the third quarter of 2011 and $192.8 million for the fourth quarter of 2010.

Cash used in operating activities was $81.0 million for the year ended December 31, 2011 compared to cash provided by operating activities of $160.4 million for the year ended December 31, 2010. Cash used in operating activities was $59.5 million for the three months ended December 31, 2011 compared to cash provided by operating activities of $137.1 million for the three months ended December 31, 2010 and cash used in operating activities of $2.4 million for the three months ended September 30, 2011. The increase in cash used in operating activities for the three months ended December 31, 2011 compared to the three months ended September 30, 2011 was primarily due to an increase in working capital resulting from the seasonal increase in our distribution business.

The cash conversion cycle was 12 days for the fourth quarter of 2011 compared to negative 2 days for the fourth quarter of 2010 and 7 days for the third quarter of 2011. The increase in the cash conversion cycle from the prior quarter was primarily due to the seasonal increase in our distribution business.

EBITDA (non-GAAP) was $120.4 million for the year ended December 31, 2011 compared to $85.8 million for the year ended December 31, 2010. EBITDA (non-GAAP) was $34.9 million for the fourth quarter of 2011 compared to $30.6 million for the fourth quarter of 2010 and $32.1 million for the third quarter of 2011.

“We are reporting strong operating results for the fourth quarter of 2011, which reflect our continued focus on execution and discipline in managing our business,” said Robert J. Laikin, Chairman of the Board and Chief Executive Officer of BrightPoint. “I am pleased with our reported revenue of $5.24 billion for 2011. Our global footprint with operations in over 35 countries and a comprehensive portfolio of device lifecycle services enabled us to handle more than 112 million wireless devices in 2011. I believe BrightPoint is well positioned to benefit from the smartphone trends in the wireless industry. I expect the overall wireless device industry to be flat to up approximately 5 percent in 2012 as compared to 2011.”

“I am pleased that we were able to deliver strong financial results for the fourth quarter and throughout 2011,” said Vince Donargo, BrightPoint’s Chief Financial Officer and Treasurer. “During 2011 we experienced substantial growth in our distribution business. Our ROIC of 13 percent in 2011 is within our long-term targeted range of 12 to 15 percent. I am proud of our team’s ability to deliver ROTC of 43 percent in 2011, which exceeds our targeted long-term range of 35 to 40 percent. Both of these financial metrics reflect our disciplined approach to managing our balance sheet and our overall business.”

 

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UPDATED FULL YEAR 2012 EXPECTATIONS

Based on preliminary January results, we currently expect income from continuing operations (GAAP) per diluted share of $0.66 to $0.76 for full year 2012 and adjusted income from continuing operations (non-GAAP) per diluted share of $1.07 to $1.17 for full year 2012, which is a decrease from our previously disclosed range of $0.67 to $0.79 (GAAP) and $1.08 to $1.20 (non-GAAP) due to a higher than normal seasonal decline in the first quarter of 2012. We expect industry units for the first quarter of 2012 to be down 15% to 20% from the fourth quarter of 2011 due to strong results in December 2011 and continuing global macroeconomic uncertainty. Adjusted income from continuing operations (non-GAAP) per diluted share excludes stock based compensation, amortization of acquired intangible assets and restructuring charges (all net of any estimated income tax effect). Adjusted earnings per share from continuing operations (non-GAAP) assumes 72.4 million of diluted weighted average shares outstanding, which includes 2.5 million shares of common stock related to stock based compensation that are presumed to be repurchased under the U.S. GAAP treasury stock method. Please see the supplemental information attached for the reconciliation of the range of estimated GAAP diluted earnings per share to estimated as-adjusted (non-GAAP) diluted earnings per share. The expectations above are based on a distribution gross margin range of 3.6% to 4.0% and a logistic services gross margin range of 35% to 40% for full year 2012.

We currently expect an adjusted (non-GAAP) effective income tax rate of between 28% and 32% for full year 2012.

Please see the attached Schedules and the Investors section at the BrightPoint website at www.BrightPoint.com for an explanation and reconciled presentation of the results for the quarter and year ended December 31, 2011 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.

Please see the Investors section at the BrightPoint website at www.BrightPoint.com for quarterly statements of operations for all periods that have been reclassified.

 

3


(Amounts in thousands, except per share data)

 

     Three Months Ended  
     December  31,
2011
    December  31,
2010
    September  30,
2011
 
      
     (Unaudited)     (Unaudited)     (Unaudited)  

Wireless devices handled*

     30,710        29,096        27,272   

Revenue

   $ 1,556,443      $ 1,120,305      $ 1,338,145   

Gross profit

   $ 101,922      $ 94,960      $ 94,255   

Gross margin

     6.5     8.5     7.0

Selling, general and administrative expenses

   $ 69,969      $ 62,273      $ 65,071   

Operating income from continuing operations

   $ 24,082      $ 22,471      $ 20,059   

Income from continuing operations

   $ 14,999      $ 15,413      $ 13,120   

Net income attributable to common shareholders

   $ 15,065      $ 15,873      $ 13,797   

Diluted per share:

      

Income from continuing operations attributable to common shareholders

   $ 0.22      $ 0.22     $ 0.19   

Net income attributable to common shareholders

   $ 0.22      $ 0.23     $ 0.20   

 

* Wireless devices handled includes tablets beginning in the second quarter of 2011.

Conference Call Information

On Thursday, February 2, 2012, at approximately 8:00 a.m. ET, BrightPoint, will conduct a conference call to review its operations and financial performance and will answer participants’ questions. For those who would like to join the conference call, use the following information and dial in several minutes prior to the start of the call:

U.S. toll-free dial-in number: 888-726-2418

International dial-in number: 913-312-1521

The presentation of slides can be accessed through the Investors section of BrightPoint’s website at www.BrightPoint.com. Following the live presentation, an archive of the webcast will be available through the Investors section of BrightPoint’s website at www.BrightPoint.com for approximately one year.

About Brightpoint, Inc.

Brightpoint, Inc. (Nasdaq: CELL) is a global leader in providing device lifecycle services to the wireless industry. In 2011, BrightPoint handled more than 112 million wireless devices globally. BrightPoint’s innovative services include distribution channel management, procurement, inventory management, reverse logistics and repair services, software loading, kitting and customized packaging, 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. BrightPoint has more than 4,000 employees, as well as a significant number of temporary staff, and a global footprint covering more than 35 countries, including 13 Latin American countries through its investment in Intcomex, Inc. In 2011, BrightPoint generated revenue of $5.2 billion. 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).

 

4


Forward Looking and Cautionary Statements

Certain information in this press release may contain forward-looking statements regarding future events or the future performance of BrightPoint, including estimates for income from continuing operations (non-GAAP) per diluted share, distribution and logistic services gross margins, and effective tax rate (non-GAAP) for 2012 that are subject to change. These statements are only predictions and actual events or results may differ materially. Please refer to the documents BrightPoint files, from time to time, with the Securities and Exchange Commission; specifically, BrightPoint’s most recent Form 10-K and Form 10-Q and the cautionary statements and risk factors contained therein. Those 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. Those risk factors include, without limitation, uncertainties relating to customer plans and commitments, including, without limitation (i) fluctuations in regional demand patterns and economic factors could harm our operations; (ii) we buy a significant amount of our products from a limited number of suppliers, and they may not provide us with competitive products at reasonable prices when we need them in the future; (iii) our dependence on our computer and communications systems; (iv) uncertainty regarding future volatility in our Common Stock price; (v) our ability to expand and implement our future growth strategy, including acquisitions; (vi) our ability to protect our proprietary information; (vii) rapid technological changes in the wireless industry could render our services or the products we handle obsolete or less marketable; (viii) intense industry competition; (ix) the loss or reduction in orders from principal customers or a reduction in the prices we are able to charge these customers could cause our revenues to decline and impair our cash flows; (x) our ability to retain existing logistic services customers at acceptable returns upon expiration or termination of existing agreements; (xi) our business could be harmed by consolidation of mobile operators; (xii) we face potential risks associated with loss, theft or damage of our property or property of our customers; (xiii) we make significant investments in the technology used in our business and rely on that technology to function effectively without interruptions; (xiv) our future operating results will depend on our ability to maintain volumes and margins; (xv) the effect of natural disasters, epidemics, hostilities or terrorist attacks on our operations; (xvi) uncertainty regarding whether wireless equipment manufacturers and wireless network operators will continue to outsource aspects of their business to us; (xvii) the current economic downturn could cause a severe disruption in our operations; (xviii) our implementation of European and American Centers of Excellence may not be successful; (xix) our ability to continue to enter into relationships and financing that may provide us with minimal returns or losses on our investments; (xx) collections of our accounts receivable; (xxi) our ability to manage and sustain future growth at our historical or current rates; (xxii) our ability to attract and retain qualified management and other personnel and the cost of complying with labor agreements and high rate of personnel turnover; (xxiii) our reliance upon third parties to manufacture products that we distribute and reliance upon their quality control procedures; (xxiv) our debt facilities could prevent us from borrowing additional funds, if needed; (xxv) our reliance on suppliers to provide trade credit facilities to adequately fund our on-going operations and product purchases; (xxvi) a significant percentage of our revenues are generated outside of the United States in countries that may have volatile currencies or other risks; (xxvii) the impact that seasonality may have on our business and results; (xxviii) potential dilution to existing shareholders from the issuance of securities under our long-term incentive plans; and (xxix) the 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. 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.

 

5


BRIGHTPOINT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

 

     Three Months Ended
December 31,
     Years Ended
December 31,
 
       
     2011     2010      2011     2010  
     (Unaudited)     (Unaudited)      (Unaudited)        

Revenue

         

Distribution revenue

   $ 1,415,824      $ 1,022,090       $ 4,700,458      $ 3,258,474   

Logistic services revenue

     140,619        98,215         543,925        334,765   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenue

     1,556,443        1,120,305         5,244,383        3,593,239   

Cost of revenue

         

Cost of distribution revenue

     1,363,839        974,211         4,527,808        3,107,861   

Cost of logistic services revenue

     90,682        51,134         340,742        170,755   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total cost of revenue

     1,454,521        1,025,345         4,868,550        3,278,616   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

         

Distribution gross profit

     51,985        47,879         172,650        150,613   

Logistic services gross profit

     49,937        47,081         203,183        164,010   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total gross profit

     101,922        94,960         375,833        314,623   
  

 

 

   

 

 

    

 

 

   

 

 

 

Selling, general and administrative expenses

     69,969        62,273         269,662        230,034   

Acquisition expenses

     —          2,931         486        2,931   

Amortization expense

     5,802        3,834         23,621        15,024   

Restructuring charge

     2,069        3,451         9,376        6,225   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income from continuing operations

     24,082        22,471         72,688        60,409   

Interest, net

     3,809        2,404         15,033        7,766   

Loss on legal settlement

     —          —           —          852   

Gain on investment in Intcomex, Inc.

     —          —           (3,038     —     

Other expense (income)

     1,154        1,406         3,509        (51
  

 

 

   

 

 

    

 

 

   

 

 

 

Income from continuing operations before income taxes

     19,119        18,661         57,184        51,842   

Income tax expense

     4,120        3,248         9,293        12,997   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income from continuing operations

     14,999        15,413         47,891        38,845   

Discontinued operations, net of income taxes:

         

Gain (loss) from discontinued operations

     (274     383         634        (8,681

Gain (loss) on disposal of discontinued operations

     340        77         307        (46
  

 

 

   

 

 

    

 

 

   

 

 

 

Total discontinued operations, net of income taxes

     66        460         941        (8,727
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to common shareholders

   $ 15,065      $ 15,873       $ 48,832      $ 30,118   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per share attributable to common shareholders - basic:

         

Income from continuing operations

   $ 0.22      $ 0.23       $ 0.71      $ 0.56   

Discontinued operations, net of income taxes

     —          0.01         0.01        (0.12
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 0.22      $ 0.24       $ 0.72      $ 0.44   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per share attributable to common shareholders - diluted:

         

Income from continuing operations

   $ 0.22      $ 0.22       $ 0.70      $ 0.55   

Discontinued operations, net of income taxes

     —          0.01         0.01        (0.12
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 0.22      $ 0.23       $ 0.71      $ 0.43   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average common shares outstanding:

         

Basic

     67,838        67,014         67,741        69,004   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

     69,315        68,239         69,073        70,194   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

6


BRIGHTPOINT, INC.

NON-GAAP RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

We have provided income from continuing operations and income from continuing operations per share on both a U.S. GAAP basis and on an as-adjusted non-GAAP basis because BrightPoint’s management believes it provides meaningful information to investors. Among other things, it may assist investors in evaluating BrightPoint’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 such as restructuring charges. BrightPoint considers these items unrelated to its core operating performance, and believes that use of this non-GAAP measure allows comparison of operating results that are consistent over time. The specific items excluded with respect to our fourth quarter of 2011 non-GAAP income from continuing operations per share are stock based compensation expense, amortization expense, restructuring charge, a charge for a legal contingency (all net of any estimated income tax effect), and certain discrete tax items. Non-GAAP income from continuing operations 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 income from continuing operations 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 BrightPoint’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.

 

     Three Months Ended December 31,  
     2011     2010  
     Income from
continuing
operations
    Impact per
diluted share
    Income from
continuing
operations
    Impact per
diluted share
 

GAAP income from continuing operations

   $ 14,999      $ 0.22      $ 15,413      $ 0.22   

Non-GAAP adjustments:

        

Stock based compensation

     2,844        0.04        2,427        0.04   

Acquisition expense

     —          —          2,931        0.04   

Amortization

     6,109        0.08        3,771        0.05   

Restructuring charge

     2,069        0.03        3,451        0.05   

Legal expense

     3,000        0.04        204        0.00   

Income tax impact of the above

     (3,696     (0.05     (4,036     (0.06

Discrete income tax items

     (1,139     (0.02     (112     (0.00
  

 

 

   

 

 

   

 

 

   

 

 

 

As-adjusted (non-GAAP) income from continuing operations

   $ 24,186      $ 0.34      $ 24,049      $ 0.34   

As-adjusted (non-GAAP) weighted average common shares outstanding - diluted

       71,506          70,667   

 

7


     Years Ended December 31,  
     2011     2010  
     Income from
continuing
operations
    Impact per
diluted share
    Income from
continuing
operations
    Impact per
diluted share
 

GAAP income from continuing operations

   $ 47,891      $ 0.70      $ 38,845      $ 0.55   

Non-GAAP adjustments:

        

Stock based compensation

     12,430        0.17        10,343        0.14   

Acquisition expense, net

     299        0.00        2,931        0.04   

Amortization

     24,015        0.34        14,762        0.20   

Restructuring charge

     9,376        0.13        6,225        0.09   

Separation expense

     3,064        0.04        —          —     

Legal expense

     3,000        0.04        1,056        0.01   

Gain on investment in Intcomex

     (3,038     (0.04     —          —     

Income tax impact of the above

     (16,258     (0.23     (10,535     (0.15

Discrete income tax items

     (5,237     (0.08     125        0.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

As-adjusted (non-GAAP) income from continuing operations

   $ 75,542      $ 1.07      $ 63,752      $ 0.88   

As-adjusted (non-GAAP) weighted average common shares outstanding - diluted

       70,524          72,635   

 

8


BRIGHTPOINT, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)

 

     December 31,     December 31,  
     2011     2010  
     (Unaudited)        

ASSETS

    

Current Assets:

    

Cash and cash equivalents

   $ 40,842      $ 41,658   

Accounts receivable (less allowance for doubtful accounts of $8,236 in 2011 and $9,892 in 2010)

     568,947        487,376   

Inventories

     468,937        311,804   

Other current assets

     66,039        75,068   
  

 

 

   

 

 

 

Total current assets

     1,144,765        915,906   

Property and equipment, net

     145,948        111,107   

Goodwill

     79,578        78,821   

Other intangibles, net

     98,693        122,122   

Other assets

     37,927        19,885   
  

 

 

   

 

 

 

Total assets

   $ 1,506,911      $ 1,247,841   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 766,825      $ 744,995   

Accrued expenses

     171,108        140,191   

Lines of credit and other short-term borrowings

     6,465        408   
  

 

 

   

 

 

 

Total current liabilities

     944,398        885,594   

Long-term liabilities:

    

Lines of credit, long-term

     246,542        90,000   

Other long-term liabilities

     24,806        27,894   
  

 

 

   

 

 

 

Total long-term liabilities

     271,348        117,894   
  

 

 

   

 

 

 

Total liabilities

     1,215,746        1,003,488   

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; 91,470 issued in 2011 and 90,354 issued in 2010

     915        904   

Additional paid-in-capital

     656,533        641,895   

Treasury stock, at cost, 23,226 shares in 2011 and 22,917 shares in 2010

     (168,064     (164,242

Accumulated deficit

     (207,142     (255,974

Accumulated other comprehensive income

     8,923        21,770   
  

 

 

   

 

 

 

Total shareholders’ equity

     291,165        244,353   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,506,911      $ 1,247,841   
  

 

 

   

 

 

 

 

9


BRIGHTPOINT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

     Years Ended  
     December 31,  
     2011     2010  
     (Unaudited)        

Operating activities

    

Net income

   $ 48,832      $ 30,118   

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     46,741        34,676   

Non-cash compensation

     12,430        10,343   

Restructuring charge

     9,376        6,225   

Change in deferred taxes

     (2,833     7,736   

Gain on investment in Intcomex, Inc.

     (3,038     —     

Other non-cash

     2,880        926   

Changes in operating assets and liabilities, net of effects from acquisitions and divestitures:

    

Accounts receivable

     (97,018     (80,220

Inventories

     (176,807     (93,846

Other operating assets

     13,148        447   

Accounts payable and accrued expenses

     65,318        244,041   
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (80,971     160,446   

Investing activities

    

Capital expenditures

     (60,308     (42,108

Acquisitions, net of cash acquired

     (19,761     (76,075

Increase in other assets

     (2,148     (1,091
  

 

 

   

 

 

 

Net cash used in investing activities

     (82,217     (119,274

Financing Activities

    

Net proceeds from lines of credit

     165,229        90,000   

Repayments on Global Term Loans

     —          (93,939

Net proceeds from short-term financing

     99        408   

Deferred financing costs paid

     (1,634     (3,283

Purchase of treasury stock

     (3,822     (79,603

Excess (deficient) tax benefit from equity based compensation

     1,785        (862

Proceeds from common stock issuances under employee stock option plans

     394        1,291   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     162,051        (85,988

Effect of exchange rate changes on cash and cash equivalents

     321        5,424   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (816     (39,392

Cash and cash equivalents at beginning of period

     41,658        81,050   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 40,842      $ 41,658   
  

 

 

   

 

 

 

 

10


Supplemental Information

(Amounts in thousands)

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)

 

     Three Months Ended  
     December 31,      December 31,      September 30,  
     2011      2010      2011  

Net income (1)

   $ 15,065       $ 15,873       $ 13,797   

Net interest expense (1)

     3,941         2,480         4,035   

Income tax expense (1)

     4,120         3,248         2,080   

Depreciation and amortization (1)

     11,814         8,975         12,138   
  

 

 

    

 

 

    

 

 

 

EBITDA

   $ 34,940       $ 30,576       $ 32,050   
  

 

 

    

 

 

    

 

 

 

 

     Years Ended  
     December 31,      December 31,  
     2011      2010  

Net income (1)

   $ 48,832       $ 30,118   

Net interest expense (1)

     15,539         7,955   

Income tax expense (1)

     9,293         13,033   

Depreciation and amortization (1)

     46,741         34,676   
  

 

 

    

 

 

 

EBITDA

   $ 120,405       $ 85,782   
  

 

 

    

 

 

 

 

(1) Includes discontinued operations

EBITDA is a non-GAAP financial measure. Management believes EBITDA provides it with an indicator of how much cash BrightPoint 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 BrightPoint’s ability to manage its working capital and its cash flow performance. Cash conversion cycle days and its components for the quarters ended December 31, 2011 and 2010, and September 30, 2011 were as follows:

 

     Three Months Ended  
     December 31,     December 31,     September 30,  
     2011     2010     2011  

Days sales outstanding in accounts receivable

     26        29        23   

Days inventory on-hand

     29        26        28   

Days payable outstanding

     (43     (57     (44
  

 

 

   

 

 

   

 

 

 

Cash Conversion Cycle Days

     12        (2     7   
  

 

 

   

 

 

   

 

 

 

Please see the Investors section of the BrightPoint website at www.BrightPoint.com for a detailed calculation of cash conversion cycle days for the three months ended December 31, 2011.

 

11


Supplemental Information (continued)

(Amounts in thousands)

 

Return on Invested Capital (“ROIC”)

Management uses ROIC to measure the effectiveness of its use of invested capital to generate earnings. ROIC for the quarters and trailing four quarters ended December 31, 2011 and 2010, and September 30, 2011, was as follows:

 

     Three Months Ended  
     December 31,     December 31,     September 30,  
     2011     2010     2011  

Operating income after taxes (non-GAAP):

      

Operating income from continuing operations

   $ 24,082      $ 22,471      $ 20,059   

Plus: restructuring charge (1)

     2,069        3,451        3,138   

Less: estimated income taxes (2)

     (7,845     (9,073     (6,959
  

 

 

   

 

 

   

 

 

 

Operating income after taxes (non-GAAP)

   $ 18,306      $ 16,849      $ 16,238   
  

 

 

   

 

 

   

 

 

 

Invested Capital:

      

Debt

   $ 253,007      $ 90,408      $ 171,548   

Shareholders’ equity

     291,165        244,353        278,991   
  

 

 

   

 

 

   

 

 

 

Invested capital

   $ 544,172      $ 334,761      $ 450,539   
  

 

 

   

 

 

   

 

 

 

Average invested capital (3)

   $ 497,355      $ 336,253      $ 439,248   

ROIC (4)

     15     20     15
     Trailing Four Quarters Ended  
     December 31,     December 31,     September 30,  
     2011     2010     2011  

Operating income after taxes (non-GAAP):

      

Operating income from continuing operations

   $ 72,688      $ 60,409      $ 71,077   

Plus: restructuring charge (1)

     9,376        6,225        10,758   

Less: estimated income taxes (2)

     (24,619     (23,322     (25,846
  

 

 

   

 

 

   

 

 

 

Operating income after taxes (non-GAAP)

   $ 57,445      $ 43,312      $ 55,989   
  

 

 

   

 

 

   

 

 

 

Invested Capital:

      

Debt

   $ 253,007      $ 90,408      $ 171,548   

Shareholders’ equity

     291,165        244,353        278,991   
  

 

 

   

 

 

   

 

 

 

Invested capital

   $ 544,172      $ 334,761      $ 450,539   
  

 

 

   

 

 

   

 

 

 

Average invested capital (3)

   $ 444,030      $ 343,419      $ 402,744   

ROIC (4)

     13     13     14

 

(1) We exclude items such as restructuring charges from our calculation of “Operating income after taxes (non-GAAP)”, because we do not believe such items are representative of expected future returns. We believe decisions to allocate resources should not be influenced by such items.
(2) Estimated income taxes were calculated by multiplying the sum of operating income from continuing operations and the restructuring charge by an effective tax rate of 30%, which represents an estimated, blended statutory tax rate for the markets in which we operate. The effective tax rate was revised from 35% beginning with the first quarter of 2011 to better represent changes in the geographic mix of income.
(3) 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.
(4) ROIC is calculated by dividing non-GAAP operating income after taxes by average invested capital. ROIC for quarterly periods is stated on an annualized basis and is calculated by dividing non-GAAP operating income after taxes by average invested capital and multiplying the result by four.

 

12


Supplemental Information (continued)

(Amounts in thousands)

 

Return on Tangible Capital (“ROTC”)

Management uses Return on Tangible Capital, or ROTC, to provide a measurement which can be consistently and fairly applied internally to all operating entities to determine the effectiveness of each entity’s use of tangible capital. ROTC eliminates the influence of intangible assets balances (and related amortization expense), cash transfer capabilities and income tax rates which vary amongst BrightPoint operating entities and are not controllable by operating entity management. We exclude items such as restructuring charges from our calculation of “Operating income before amortization and restructuring charges (non-GAAP)” because we do not believe such items are controllable by operating entity management or representative of expected future returns. Therefore, we believe decisions to allocate resources should not be influenced by such items. ROTC indicates the return which can be expected on the tangible capital consumed and replaced through the normal business cycle. To calculate ROTC, operating income from continuing operations is adjusted for restructuring charges, goodwill impairment charge and amortization of intangible assets, and this adjusted non-GAAP operating income is applied to average tangible capital. Average tangible capital is calculated as total assets less cash, investments, goodwill, and intangible assets, net of current liabilities excluding short term borrowings. The details of this measurement are outlined below.

 

     Three Months Ended  
     December 31,     December 31,     September 30,  
     2011     2010     2011  

Operating income before amortization and restructuring charges (non-GAAP):

      

Operating income from continuing operations

   $ 24,082      $ 22,471      $ 20,059   

Plus: amortization expense

     5,802        3,834        5,987   

Plus: restructuring charge

     2,069        3,451        3,138   
  

 

 

   

 

 

   

 

 

 

Operating income before amortization and restructuring charges (non-GAAP):

   $ 31,953      $ 29,756      $ 29,184   
  

 

 

   

 

 

   

 

 

 

Tangible capital:

      

Total assets

   $ 1,506,911      $ 1,247,841      $ 1,268,786   

Less: unrestricted cash and short-term investments

     40,090        41,103        25,148   

Less: goodwill

     79,578        78,821        79,446   

Less: other intangibles, net

     98,693        122,122        105,435   
  

 

 

   

 

 

   

 

 

 

Net tangible assets

     1,288,550        1,005,795        1,058,757   

Total current liabilities

     944,398        885,594        791,873   

Less: lines of credit and other short term borrowings

     6,465        408        1,025   
  

 

 

   

 

 

   

 

 

 

Net current liabilities

     937,933        885,186        790,848   
  

 

 

   

 

 

   

 

 

 

Net tangible capital

   $ 350,617      $ 120,609      $ 267,909   
  

 

 

   

 

 

   

 

 

 

Average tangible capital (1)

   $ 309,263      $ 160,105      $ 252,458   

ROTC (2)

     41     74     46

 

13


     Trailing Four Quarters  
     December 31,
2011
    December 31,
2010
    September 30,
2011
 

Operating income before amortization and restructuring charges (non-GAAP):

      

Operating income from continuing operations

   $ 72,688      $ 60,409      $ 71,077   

Plus: amortization expense

     23,621        15,024        21,653   

Plus: restructuring charge

     9,376        6,225        10,758   
  

 

 

   

 

 

   

 

 

 

Operating income before amortization and restructuring charges (non-GAAP):

   $ 105,685      $ 81,658      $ 103,488   
  

 

 

   

 

 

   

 

 

 

Tangible capital:

      

Total assets

   $ 1,506,911      $ 1,247,841      $ 1,268,786   

Less: unrestricted cash and short-term investments

     40,090        41,103        25,148   

Less: goodwill

     79,578        78,821        79,446   

Less: other intangibles, net

     98,693        122,122        105,435   
  

 

 

   

 

 

   

 

 

 

Net tangible assets

     1,288,550        1,005,795        1,058,757   

Total current liabilities

     944,398        885,594        791,873   

Less: lines of credit and other short term borrowings

     6,465        408        1,025   
  

 

 

   

 

 

   

 

 

 

Net current liabilities

     937,933        885,186        790,848   
  

 

 

   

 

 

   

 

 

 

Net tangible capital

   $ 350,617      $ 120,609      $ 267,909   
  

 

 

   

 

 

   

 

 

 

Average tangible capital (1)

   $ 247,785      $ 183,529      $ 217,582   

ROTC (2)

     43     44     48

 

(1) Average tangible capital for quarterly periods represents the simple average of the beginning and ending tangible capital amounts for the respective quarter.
(2) ROTC is calculated by dividing non-GAAP operating income before amortization and restructuring charges by average tangible capital. ROTC for quarterly periods is stated on an annualized basis and is calculated by dividing non-GAAP operating income before amortization and restructuring charges by average tangible capital and multiplying the results by four. ROTC is a non-GAAP pre-tax measure, thereby eliminating the influence of income tax rates which vary amongst BrightPoint operating entities and are not controllable by operating entity management.

 

14


Supplemental Information (continued)

 

2012 Expectations

The reconciliation of the range of estimated GAAP diluted earnings per share to estimated as-adjusted (non-GAAP) diluted earnings per share is provided below:

 

     2012 Expectations  
     Income from
continuing
operations per
diluted share
     Income from
continuing
operations per
diluted share
 

GAAP income from continuing operations

   $ 0.66       $ 0.76   

Non-GAAP adjustments (net of tax)1:

     

Stock based compensation

     0.15         0.15   

Restructuring charge

     0.01         0.01   

Amortization

     0.25         0.25   
  

 

 

    

 

 

 

As-adjusted (non-GAAP) income from continuing operations

   $ 1.07       $ 1.17   
  

 

 

    

 

 

 

As-adjusted (GAAP) weighted average common shares outstanding - diluted

     69,900         69,900   

Shares presumed to be repurchased under the U.S. GAAP treasury stock method related to stock based compensation expense

     2,500         2,500   
  

 

 

    

 

 

 

As-adjusted (non-GAAP) weighted average common shares outstanding - diluted

     72,400         72,400   
  

 

 

    

 

 

 

 

  1 

The effect of these adjustments was considered in computing the Company’s expected adjusted (non-GAAP) effective income tax rate.

 

15