<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 10, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------------
BRIGHTPOINT, INC.
(Name of registrant as specified in its charter)
-------------------------
DELAWARE 6402 CORPORATE DRIVE 35-1778566
(State or jurisdiction INDIANAPOLIS, INDIANA 46278 (I.R.S. employer
of incorporation or (317) 297-6100 identification
organization) (Address, including zip code, number)
and telephone number,
including area code, of
registrant's principal
executive offices)
-------------------------
ROBERT J. LAIKIN, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
BRIGHTPOINT, INC.
6402 CORPORATE DRIVE
INDIANAPOLIS, INDIANA 46278
(317) 297-6100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
COPIES TO:
ROBERT J. MITTMAN, ESQ.
TENZER GREENBLATT LLP
405 LEXINGTON AVENUE
NEW YORK, NEW YORK 10174
TELEPHONE: (212) 885-5000
TELECOPIER: (212) 885-5001
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
[ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is a post-effective amendment filed pursuant to Rule 462(b) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [ ] ____
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ] ____
If delivery of the prospectus is expected to be made pursuant to Rule 434 under
the Securities Act, please check the following box. [ ]
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM
TITLE OF SHARES PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED AMOUNT TO BE REGISTERED(1) PRICE PER SHARE(2) PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 375,000 Shares $44.125 $16,546,875 $5,014.20
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</TABLE>
(1) For the account of a selling stockholder.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c) of the Securities Act, the registration fee has been
calculated based upon the closing sale price as reported by NASDAQ for the
Registrant's Common Stock on October 6, 1997.
-------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the Registration Statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE> 2
375,000 SHARES OF COMMON STOCK
BRIGHTPOINT, INC.
This Prospectus relates to an offering by a selling stockholder (the
"Selling Stockholder") of an aggregate of up to 375,000 shares of Common Stock
of Brightpoint, Inc. (the "Company"). The Company will not receive any of the
proceeds from the sale of Common Stock by the Selling Stockholder.
The Common Stock may be offered from time to time by the Selling
Stockholder through ordinary brokerage transactions in the over-the-counter
market, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices. Of the 375,000 shares of Common
Stock being offered by the Selling Stockholder, 187,500 shares may not be sold,
transferred or otherwise disposed of prior to December 5, 1997 without the
prior written consent of Merrill Lynch & Co., a co-managing underwriter in
connection with the Company's public offering consummated in August 1997. See
"Selling Stockholder and Plan of Distribution."
The Common Stock is traded in the over-the-counter market and is quoted on
the NASDAQ National Market under the symbol CELL. On October 6, 1997, the
closing sale price of the Common Stock as reported by NASDAQ was $44.125.
______________________
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 9.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS OCTOBER __, 1997
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<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, registration statements, proxy
statements, and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W. Room 1024, Washington,
D.C. 20549, and at the Commission's Regional Offices: 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, New York, New
York 10048. Copies of such materials can be obtained at prescribed rates from
the Public Reference Section of the Commission, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Such reports and other information, including the
Registration Statement and the exhibits and schedules thereto, are also
available on the Commission's Web Site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1996;
(b) Amendment No. 1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996;
(c) Quarterly Report on Form 10-Q for the three-month period ended March
31, 1997;
(d) Quarterly Report on Form 10-Q for the three-month period ended June 30,
1997;
(e) Current Report on Form 8-K dated August 6, 1997; and
(f) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A declared effective April 7, 1994
and any amendments thereto.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof on the date of filing of such documents.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference, except for the
exhibits to such documents. Requests should be directed to Mr. Phillip A.
Bounsall, Brightpoint, Inc., 6402 Corporate Drive, Indianapolis, Indiana 46278,
telephone: (317) 297-6100.
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<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the Consolidated
Financial Statements, including the notes thereto, appearing elsewhere in this
Prospectus or incorporated by reference herein. Unless the context suggests
otherwise, references in this Prospectus to the "Company" or "Brightpoint" mean
Brightpoint, Inc., its predecessors, and its subsidiaries. All dollar amounts
set forth in this Prospectus are expressed in United States dollars.
THE COMPANY
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, under brand names such as
Nokia, Ericsson, Philips, Siemens and Motorola, to network operators, agents,
resellers, dealers and retailers in the wireless communications market. The
Company's distribution services include purchasing, marketing, selling,
warehousing, picking, packing, shipping and "just-in-time" delivery of wireless
handsets and accessories. Its value-added logistics services include, among
others, inventory management, product fulfillment, kitting and customized
packaging, light assembly and end-user support services. The Company is one of
the largest dedicated distributors of wireless handsets and accessories in the
world, with operations centers and/or sales offices in Australia, China, Hong
Kong, the Philippines, South Africa, Sweden, the United Arab Emirates, the
United Kingdom and the United States, and provides its services to a customer
base of more than 10,000 network operators, manufacturers, agents, resellers,
dealers and retailers in over 75 countries and on six continents. The
Company's four regional divisions, Asia-Pacific; North America; Europe, Middle
East and Africa; and Latin America, accounted for 44%, 31%, 20% and 5%,
respectively, of the Company's net sales for the six months ended June 30,
1997.
The Company's net sales and pro forma net income have each grown at a
compounded annual growth rate of over 50% from 1992 to 1996. For the six months
ended June 30, 1997, the Company's net sales and net income were $419.2 million
and $10.3 million, respectively, representing increases of 80% and 111%,
respectively, when compared to net sales and pro forma net income for the same
period in 1996. The Company's growth in net sales has been driven primarily by
increases in worldwide demand for wireless handsets and accessories, the
Company's expansion into new geographic markets, and its increased market share
resulting from strengthening relationships with wireless manufacturers and
network operators. The Company's operating margin has also increased, due
primarily to its introduction of higher-margin value-added logistics services.
In recent years, the markets for wireless communications equipment and
services have expanded significantly. From 1995 to 1996, the worldwide number
of wireless communications subscribers increased by 52 million, or 60%, to
approximately 140 million by the end of 1996. Nonetheless, at the end of 1996,
wireless penetration was estimated at a mere 16% of the population within the
United States and was still, on average less than 2% of the population outside
of the United States, providing both the wireless communications industry and
the Company with significant opportunities for growth. According to a leading
independent industry research group, the global wireless communications
subscriber base is expected to grow by more than 250 million subscribers, to
approximately 400 million subscribers, by the end of 2000.
In addition to the dramatic increase in subscribers, there are several
major trends affecting the wireless communications industry. The number of
wireless network operators has increased and is
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<PAGE> 5
expected to continue to increase as a result of further deregulation
within the wireless communications industry, the allocation of additional
spectrum frequencies and the introduction of new technological applications such
as personal communications services ("PCS"). These new wireless networks are
increasingly incorporating digital technologies, which provide greater network
capacity, more functionality, improved voice quality and better security/privacy
than analog technologies. In addition, incumbent analog cellular network
operators are gradually transitioning their networks toward digital systems.
With the opportunities presented by a rapidly expanding market for wireless
communications equipment, the transition from analog to digital technology, and
the further penetration of the mass consumer market, many additional
manufacturers are beginning to produce wireless handsets and related
accessories. The increased complexity of, and competition in, the wireless
communications industry have caused manufacturers, network operators and
resellers to focus available internal resources on their core competencies and
to outsource more of their product management functions, from distribution to
sophisticated wireless logistics services, to specialists such as the Company in
an effort to reduce costs, increase productivity and improve quality.
The Company's primary strategies for building on its position as a global
leader in providing services to the growing wireless communications industry
include: (i) capitalizing on the rapidly growing outsourcing demands of
wireless equipment manufacturers and network operators by offering them a wide
variety of distribution and value-added logistics services; (ii) expanding the
Company's worldwide presence through internal growth at existing locations,
mergers and acquisitions, joint ventures, other strategic alliances, and
start-ups in new locations; (iii) leveraging the Company's experience and
expertise with new wireless communications technologies and applications to
assist its customers in introducing new products to the market in a timely and
effective manner; and (iv) continuously improving and streamlining its systems
and processes in terms of quality, time and cost in order to establish itself
as the most effective and efficient market channel for wireless communications
equipment.
The Company was incorporated under the laws of the State of Indiana in
August 1989 under the name Wholesale Cellular USA, Inc. and reincorporated
under the laws of the State of Delaware in March 1994. In September 1995, the
Company changed its name to Brightpoint, Inc. The Company's principal executive
offices are located at 6402 Corporate Drive, Indianapolis, Indiana 46278, and
its telephone number is (317) 297-6100.
RECENT DEVELOPMENTS
In August 1997, the Company consummated a public offering of 2,700,000
shares of Common Stock by the Company and an additional 2,100,000 and 200,000
shares of Common Stock on behalf of Robert Picow and Joseph Forer,
respectively. Upon consummation of such offering, Messrs. Picow and Forer,
former stockholders of Allied Communications, resigned as members of the
Company's Board of Directors pursuant to an agreement with the Company. The
proceeds to the Company of approximately $76,000,000 (net of estimated
expenses) from such offering were used to reduce the borrowings outstanding
under the Company's bank line of credit facility.
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<PAGE> 6
THE OFFERING
<TABLE>
<S> <C>
Securities offered . . . . . . . . . . . . . 375,000 shares of
Common Stock
Common Stock outstanding(1). . . . . . . . . 25,055,448 shares
Use of Proceeds. . . . . . . . . . . . . . . The Company will not
receive any proceeds
from sales of Common
Stock by the Selling
Stockholder.
Risk Factors . . . . . . . . . . . . . . . . Prospective investors
should consider
carefully certain Risk
Factors relating to an
investment in the
Company. See "Risk
Factors."
NASDAQ Symbol . . . . . . . . . . . . . . . . CELL
</TABLE>
_______________
(1) Based on shares outstanding on October 8, 1997. Does not include (i)
an aggregate of 2,859,428 shares of Common Stock reserved, as of September
30, 1997, for issuance upon exercise of outstanding stock options (of
which stock options to purchase 361,867 shares were immediately
exercisable) and an aggregate of 2,149,146 shares of Common Stock
reserved, as of September 30, 1997, for issuance upon exercise of stock
options available for future grant, in each case under the Company's 1994
Stock Option Plan, 1996 Stock Option Plan and Non-employee Director Stock
Option Plan (collectively, the "Stock Option Plans"), and (ii) 24,140
shares of Common Stock reserved, as of September 30, 1997, for issuance
upon exercise of outstanding and immediately exercisable warrants.
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<PAGE> 7
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENT OF INCOME DATA(1):
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended June 30,
----------------------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . $96,403 $151,315 $309,227 $419,149 $589,718 $232,856 $419,196
Cost of sales . . . . . . . . . 89,580 140,617 290,463 390,950 543,878 216,446 385,180
------- -------- -------- -------- -------- -------- --------
Gross profit . . . . . . . . . 6,823 10,698 18,764 28,199 45,840 16,410 34,016
Selling, general and
administrative expenses . . . 4,944 7,418 11,095 14,813 20,849 7,767 17,136
------- -------- -------- -------- -------- -------- --------
Income from operations. . . . . 1,879 3,280 7,669 13,386 24,991 8,643 16,880
Merger expenses. . . . . . . . -- -- -- -- 2,750 2,750 --
Net investment gain(2). . . . . -- -- -- -- -- -- 1,432
Interest expense, net . . . . . 38 103 164 1,383 2,118 623 3,106
------- -------- -------- -------- -------- -------- --------
Income before income taxes and
minority interest . . . . . . 1,841 3,177 7,505 12,003 20,123 5,270 15,206
Income taxes(3) . . . . . . . . -- -- 1,623 3,838 7,328 1,971 4,540
------- -------- -------- -------- -------- -------- --------
Income before minority interest 1,841 3,177 5,882 8,165 12,795 3,299 10,666
Minority interest in
subsidiaries' earnings. . . . - - - - 1,758 - 383
------- -------- -------- -------- -------- -------- --------
Net income(2) . . . . . . . . . 1,841 $3,177 $5,882 $8,165 $11,037 $3,299 $10,283
======= ======== ======== ======== ======== ======== ========
Pro forma net income(2)(3)(4) . $1,114 $1,928 $4,555 $7,307 $12,622 $4,884 $10,283
======= ======== ======== ======== ======== ======== ========
Pro forma net income per share(2) $0.11 $0.19 $0.32 $0.42 $0.58 $0.23 $0.44
======= ======== ======== ======== ======== ======== ========
Weighted average common shares
outstanding . . . . . . . . . 9,891 9,891 14,276 17,226 21,594 20,809 23,159
</TABLE>
CONSOLIDATED BALANCE SHEET DATA(1)
<TABLE>
<CAPTION>
June 30, 1997
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<S> <C>
Working capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $167,564
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286,157
Long-term obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . 97,831
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,235
</TABLE>
- ----------------------------
(1) On June 7, 1996, the Company completed a merger (the "Allied Merger")
with Allied Communications, Inc., Allied Communications of Florida, Inc.,
Allied Communications of Georgia, Inc., Allied Communications of Illinois,
Inc. and Allied Communications of Puerto Rico, Inc. (collectively,
"Allied Communications"), which were engaged in substantially the same
business as the Company. The transaction was accounted for using the
pooling-of-interests method and, accordingly, the Company's Consolidated
Financial Statements have been restated to reflect the consolidated
balance sheets and consolidated results of operations of both the Company
and Allied Communications as if the Allied Merger had been in effect for
all periods presented.
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<PAGE> 8
(2) During the first quarter of 1997, the Company realized a gain, net of
transaction costs, including related bonuses to certain key employees, of
approximately $8.3 million on the sale of an equity investment. In
addition, the Company recorded $6.9 million of losses relating to other
debt and equity investments. Excluding the impact of the resulting net
investment gain of $1.4 million and related income taxes, net income and
net income per share for the six months ended June 30, 1997 would have
been $9.4 million and $0.41, respectively.
(3) Prior to consummation of the Company's initial public offering in April
1994, the stockholders of the Company had elected for the Company to be
treated as an S corporation. Accordingly, the income of the Company was
included in the stockholders' own income for tax purposes, and the Company
was subject to neither federal nor state income taxes, until the Company's
election under Subchapter S was terminated on April 14, 1994. Prior to the
Allied Merger, the stockholders of Allied Communications had also elected
treatment under Subchapter S. Concurrent with the Allied Merger, on June
7, 1996, Allied Communications' election under Subchapter S was also
terminated. Pro forma net income amounts assume that each of the Company
and Allied Communications was subject to federal and state income taxes,
and taxed at the rates then in effect, for all periods presented.
(4) Excluding the after-tax effect ($2.1 million) of one-time merger expenses
incurred in connection with the Allied Merger.
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<PAGE> 9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS IN THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS
WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY
TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE,
AMONG OTHERS, THE FOLLOWING: THE ABILITY TO HIRE AND RETAIN KEY PERSONNEL;
SUCCESSFUL COMPLETION AND INTEGRATION OF FUTURE ACQUISITIONS; RELATIONSHIPS
WITH AND DEPENDENCE ON THIRD-PARTY WIRELESS COMMUNICATIONS EQUIPMENT SUPPLIERS;
UNCERTAINTIES RELATING TO ECONOMIC CONDITIONS IN MARKETS IN WHICH THE COMPANY
OPERATES; UNCERTAINTIES RELATING TO GOVERNMENT AND REGULATORY POLICIES;
UNCERTAINTIES RELATING TO CUSTOMER PLANS AND COMMITMENTS; DEPENDENCE ON THE
WIRELESS COMMUNICATIONS INDUSTRY; PRICING AND AVAILABILITY OF WIRELESS
COMMUNICATIONS EQUIPMENT MATERIALS AND INVENTORIES; RAPID TECHNOLOGICAL
DEVELOPMENTS AND OBSOLESCENCE IN THE WIRELESS COMMUNICATIONS INDUSTRY;
POTENTIAL PERFORMANCE ISSUES WITH SUPPLIERS AND CUSTOMERS; GOVERNMENTAL EXPORT
AND IMPORT POLICIES; GLOBAL TRADE POLICIES; WORLDWIDE POLITICAL STABILITY AND
ECONOMIC GROWTH; THE HIGHLY COMPETITIVE ENVIRONMENT IN WHICH THE COMPANY
OPERATES; POTENTIAL ENTRY OF NEW, WELL-CAPITALIZED COMPETITORS INTO THE
COMPANY'S MARKETS; CHANGES IN THE COMPANY'S CAPITAL STRUCTURE AND COST OF
CAPITAL; AND UNCERTAINTIES INHERENT IN INTERNATIONAL OPERATIONS AND FOREIGN
CURRENCY FLUCTUATIONS. THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND"
AND "PLAN" AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. READERS
ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS,
WHICH SPEAK ONLY AS OF THE DATE THE STATEMENT WAS MADE. SEE "RISK FACTORS."
RISK FACTORS
Prospective purchasers of the shares of Common Stock offered hereby should
consider carefully the specific factors set forth below as well as the other
information contained in, or incorporated by reference into, this Prospectus in
evaluating an investment in the Common Stock.
FUTURE OPERATING RESULTS
For the year ended December 31, 1996 and the six months ended June 30,
1997, 88% and 89%, respectively, of the Company's net sales consisted of
wireless handset sales, a segment of its business which operates on a
high-volume, low-margin basis. In addition, the Company's operating expenses
have increased significantly and can be expected to continue to increase
significantly in connection with the Company's expansion activities, including
the increasing provision of value-added logistics services. Accordingly, the
Company's future profitability will depend upon corresponding increases in
sales. The Company also believes that, as the number of wireless networks
increases as a result of deregulation, increased competition and the emergence
of new technologies, a growing industry emphasis on containing costs could
further reduce the gross margins realized by the Company on sales of wireless
handsets. Future events, including unanticipated expenses, increased price
competition, unfavorable general economic conditions, product returns and
recalls and uncollectible accounts receivable, could have an adverse effect on
the Company's operating results. There can be no assurance that the Company's
rate of sales growth will continue in the future or that the Company's future
operations will continue to be profitable.
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<PAGE> 10
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
Sales in markets outside of North America have accounted for an increasing
portion of the Company's net sales. For the years ended December 31, 1995 and
1996 and the six months ended June 30, 1997, net sales in markets outside of
North America represented approximately 36%, 51% and 69%, respectively, of the
Company's total net sales. The global aspect of the Company's business subjects
it to a number of additional risks, including increased credit risk, customs
duties, import quotas and other trade restrictions, potentially greater
inflationary pressures, fluctuations in foreign currency exchange rates,
shipping delays, failure or material interruption of wireless systems and
services, and international political, regulatory and economic developments,
all of which could have a material adverse effect on the Company. In addition
to its facilities in the United States, the Company maintains operations
centers and/or sales offices in numerous territories and countries, including
Australia, China, Hong Kong, the Philippines, South Africa, Sweden, the United
Arab Emirates and the United Kingdom. The Company is therefore subject to the
risks associated with changes in the social, political, regulatory and economic
conditions inherent in foreign operations, including changes in the laws and
policies that govern foreign investment and international trade in territories
and countries where the Company currently has operations, as well as, to a
lesser extent, changes in United States laws and relations relating to foreign
investment and trade. Any such social, political, regulatory or economic
changes could expose the Company to, among other things, the risk of wireless
product supply interruption or significant increases in wireless product
prices. Accordingly, there can be no assurance that any such changes in
financial, political, regulatory or economic conditions will not have a
material adverse effect on the Company.
In addition, a significant portion of the Company's sales outside the
United States are denominated in foreign currencies. Accordingly, a decrease in
the value of foreign currencies relative to the United States dollar could
result in a significant decrease in United States dollar revenues received by
the Company. Due to the number of currencies involved in the Company's
international sales and the volatility of currency exchange rates, the Company
cannot predict the effect of exchange rate fluctuations on future operating
results. On occasion, the Company enters into forward exchange, futures or
options contracts as a means of hedging its currency translation exposure;
however, the Company's management has had limited prior experience in engaging
in such transactions. Moreover, there can be no assurance that any hedging will
effectively limit the Company's exposure to a decline in operating results due
to foreign currency translation adjustments.
RISKS RELATING TO OPERATIONS IN HONG KONG
The Company maintains an operations center and sales office in Hong Kong,
and, for the six months ended June 30, 1997, sales through the Company's Hong
Kong operations represented approximately 33% of the Company's net sales. On
July 1, 1997, sovereignty over Hong Kong was transferred from the United Kingdom
to the People's Republic of China ("China") and Hong Kong became a Special
Administrative Region ("SAR") of China. As provided in the Sino-British Joint
Declaration on the Question of Hong Kong and the Basic Law of the Hong Kong SAR
of China (the "Basic Law"), the Hong Kong SAR will have a high degree of
autonomy except in foreign affairs and defense. Under the Basic Law, the Hong
Kong SAR is to have its own legislature, legal and judicial systems and economic
autonomy for 50 years. There can be no assurance that there will not be an
adverse change in existing political, economic or commercial conditions in Hong
Kong or that any such change would not have a material adverse effect on the
Company's results of Operations or financial condition. Furthermore, the Company
cannot predict the effect that changes in the social, economic, regulatory and
political conditions in China could have on its operations in Hong Kong. For
instance, the Company's operations in Hong Kong could be affected if the
"most-favored nation" status granted to China by the
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<PAGE> 11
United States government for trade and tariff purposes was terminated. Such
status is currently reviewed annually by the United States government, and the
Company cannot predict whether China will continue to receive such status in
the future. The loss by China of its "most-favored nation" status or other
changes in social, economic, regulatory or political conditions in China could
have a material adverse effect on the Company.
DEPENDENCE ON TREND TOWARD OUTSOURCING
The Company's growth depends in large part on the growing trend among
wireless equipment manufacturers, network operators and resellers to outsource
some or all of their product management functions, such as marketing,
programming, packaging, end-user fulfillment and returns management, to
specialists such as the Company. Although the Company believes that increasing
competition, deregulation and technological developments within the wireless
communications industry will continue to support this trend, there can be no
assurance that wireless equipment manufacturers and network operators will not
elect to maintain such services internally. A significant change in this trend,
or the onset of a trend in the wireless communications industry not to use, or
to reduce the use of, outsourced value-added logistics services such as those
provided by the Company, could have a material adverse effect on the Company.
DEPENDENCE ON THIRD-PARTY SUPPLIERS
The Company purchases all of the wireless handsets and accessories it
sells from third-party wireless communications equipment manufacturers, dealers
and network operators. For the years ended December 31, 1995 and 1996 and the
six months ended June 30, 1997, the Company's three largest sources of wireless
handsets and accessories, in the aggregate, accounted for approximately 38%, 51%
and 65%, respectively, of the Company's product purchases. For the year ended
December 31, 1995, the Company's three largest suppliers (Nokia, BellSouth
Cellular Corp. and Ericsson) accounted for approximately 20%, 10% and 8%,
respectively, of the Company's product purchases. For the year ended December
31, 1996, the Company's three largest suppliers (Nokia, Ericsson and Lucent
Technologies Inc.) accounted for approximately 33%, 12% and 6%, respectively, of
the Company's product purchases. For the six months ended June 30, 1997, the
Company's three largest suppliers (Nokia, Ericsson and Siemens) accounted for
approximately 37%, 18% and 10%, respectively, of the Company's product
purchases. The Company is dependent on the ability of its suppliers to provide
adequate inventories of currently popular brand name products on a timely basis
and on favorable pricing terms. Other than with some of its primary suppliers,
the Company does not typically maintain agreements with its suppliers.
Moreover, as is typical in the industry, the agreements which the Company does
maintain are generally non-exclusive, require the Company to satisfy minimum
purchase requirements, can be terminated on short notice and provide for certain
territorial restrictions. The Company generally purchases products pursuant to
purchase orders placed from time to time in the ordinary course of business.
Although the Company believes that its relationships with its suppliers are
satisfactory, the loss of certain of the Company's principal suppliers or
substantial price increases imposed by any such supplier, in the absence of
readily available alternative sources of supply, would have a material adverse
effect on the Company. There can be no assurance that suppliers will continue to
offer competitive products to the Company, that the Company will be able to
obtain products on favorable terms or that the Company will not be subject to
the risk of price fluctuations and periodic delays. Failure or delay by
principal suppliers in supplying competitive products to the Company on
favorable terms would materially adversely affect the Company's operating
margins and the Company's ability to obtain and deliver products on a timely and
competitive basis or at all.
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<PAGE> 12
INTENSE INDUSTRY COMPETITION
The markets for wireless handsets and accessories are characterized by
intense price competition and significant price erosion over the life of a
product. In addition, the wireless communications equipment distribution
industry has, in the past, been characterized by low barriers to entry.
Although entry barriers are expected to rise as the market requirement shifts
from pure distribution services to a mix of distribution services and
value-added logistics services (due to the increased infrastructure costs,
expanded human resource requirements and advanced management and information
systems capabilities that the value-added logistics services segment of the
business mandates), the Company competes and expects that it will continue to
compete with numerous well-established distributors and manufacturers of
wireless communications equipment, including the Company's suppliers, and
wireless network operators, certain of which possess greater financial and
other resources than the Company. Certain of these competitors may also market
the same or similar products directly to the Company's customers and have the
financial resources to withstand substantial price competition and to implement
extensive advertising and promotional programs, both generally and in response
to efforts by additional competitors to enter into new markets or introduce new
products. As a provider of value-added logistics services, the Company also
competes with other distributors and with logistics services companies. The
Company's ability to continue to compete successfully will be largely dependent
on its ability to maintain its current industry relationships and anticipate
and respond to various competitive factors affecting the industry, including
new or changing outsourcing requirements, new well-capitalized competitors, new
products which may be introduced, changes in consumer preferences, demographic
trends, international, national, regional and local economic conditions and
discount pricing and promotion strategies by competitors. There can be no
assurance that the Company will be able to continue to compete successfully,
particularly as cellular markets mature and the Company seeks to enter into new
markets and market new products.
ABILITY TO MANAGE AND SUSTAIN GROWTH; RISKS ASSOCIATED WITH FUTURE ACQUISITIONS
The Company has experienced rapid international growth recently through,
among other things, a series of strategic acquisitions and anticipates that
continued growth will be driven in large part by the Company's continuing
ability to successfully acquire additional businesses or establish strategic
alliances with companies which the Company believes are compatible with its
business; secure adequate supplies of competitive products on a timely basis and
on commercially reasonable terms; continually turn its inventories and collect
its accounts receivable; and successfully develop additional, and maintain its
existing, key relationships with leading network operators and manufacturers and
dealers of wireless handsets and accessories. The Company's success in
sustaining growth will also be dependent upon its ability to hire and retain the
additional qualified management, marketing and other personnel that will be
needed to successfully manage continuing growth (including monitoring
operations, controlling costs and maintaining effective management, inventory
and credit controls). The Company's growth prospects could be adversely affected
by a decline in the wireless communications industry generally or in one of its
regional divisions in particular, either of which could result in reduction or
deferral of expenditures by prospective customers. There can be no assurance
that the Company will continue to be able to manage its expanding operations
effectively or that it will be able to maintain or accelerate its growth. In
addition, there can be no assurance that the Company will be able to make
additional acquisitions or that the Company will be able to successfully
integrate into its operations any new businesses which it may acquire. Any
inability to do so, particularly in instances in which the Company has made
significant capital investments, could have a material adverse effect on the
Company.
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<PAGE> 13
INVENTORY OBSOLESCENCE AND TECHNOLOGICAL CHANGE
The markets for wireless communications equipment are characterized by
rapidly changing technology and evolving industry standards, often resulting in
product obsolescence or short product life cycles. Accordingly, the Company's
success is dependent upon its ability to anticipate technological changes in
the industry and to continually identify, obtain and successfully market new
products that satisfy evolving industry and customer requirements. The Company
has made increased commitments of capital to purchase product inventories.
Additional concentrations of capital in inventory increase the risk of loss
from possible inventory obsolescence. There can be no assurance that
competitors or manufacturers of wireless equipment will not market products
which have perceived or actual advantages over the Company's products or which
render them obsolete or less marketable. In addition, the use of emerging
wireless communications technologies, including wireless local loop and
satellite-based communications systems, may reduce demand for existing cellular
and PCS products. The Company also expects that companies which have developed
or are developing new technologies or products in related market segments will
commercialize technologies which compete with existing cellular and PCS
technology. Certain of such technologies, upon widespread commercial
introduction, will materially change the types of products sold by the Company
and its suppliers and result in significant price competition. There can be no
assurance that the Company's existing customers or consumers will be willing,
for financial or other reasons, to purchase new equipment necessary to utilize
these new technologies or that product obsolescence will not result in
significantly increased inventories of unsold products. Moreover, complex
hardware and software contained in new wireless handsets could contain defects
which become apparent subsequent to widespread commercial use, resulting in
product recalls and returns.
RISKS RELATING TO STRATEGIC RELATIONSHIPS AND STRATEGIC FINANCING
As part of its expansion strategy, the Company has entered into, and
intends to continue to enter into, strategic relationships and joint ventures
with wireless equipment manufacturers, network operators and other providers of
wireless communications logistics services. In connection with such strategic
relationships, the Company may enter into distribution and/or value-added
logistics services agreements with, and provide equity or debt financing to,
its strategic partners. The Company's ability to achieve profitability through
such strategic relationships will be dependent in part upon its strategic
partners' economic viability, success and motivation, and the amount of time
and resources they devote to such alliances. There can be no assurance that the
Company will receive any business from future alliances, that any business
received will be significant or at the level anticipated, or that profits, if
any, received as a result of future alliances will offset any possible losses
on investments made or financing extended by the Company to enter into its
strategic relationships. A loan to, or an investment in, a strategic partner
will be subject to many of the same risks to which the strategic partner is
subject in seeking to operate and grow its businesses, and there can be no
assurance that the Company will be repaid or achieve an acceptable return on
its investment within an acceptable period, if at all. In December 1996, the
Company entered into a distribution agreement with Pocket Communications, Inc.
("Pocket"), a PCS network operator, pursuant to which the Company was to
distribute custom wireless handsets provided by Pocket. Simultaneous with its
execution of such agreement, the Company purchased $5 million in convertible
debentures of Pocket. In March 1997, Pocket filed for protection under Chapter
11 of the United States Bankruptcy Code. Accordingly, the Company recorded $5
million of unrealized losses in connection with its investment in Pocket during
the quarter ended March 31, 1997. A decline in the financial prospects of
strategic partners could have a material adverse effect on the Company.
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<PAGE> 14
SIGNIFICANT OUTSTANDING INDEBTEDNESS; LOAN COVENANTS AND SECURITY INTERESTS
As of September 30, 1997, the Company had approximately $57.4 million in
outstanding borrowings and an aggregate of $12 million in letters of credit
outstanding under its senior secured revolving line of credit facility with The
First National Bank of Chicago and Bank One, Indiana, N.A., as co-agents for a
group of banks (collectively, the "Banks"), which facility provides
availability to the Company and its subsidiaries of up to $200 million of
credit in the aggregate. All of the Company's assets located in the United
States and 65% of the capital stock of the Company's foreign subsidiaries are
pledged to the Banks as collateral, and the Company is substantially prohibited
from incurring additional indebtedness, either of which terms could, under
certain circumstances, limit the Company's ability to implement its expansion
plans. In addition to certain net worth and other financial covenants, the
Company's loan agreement with the Banks limits or prohibits the Company,
subject to certain exceptions, from declaring or paying cash dividends, making
capital distributions or other payments to stockholders, merging or
consolidating with another corporation or selling all or substantially all of
its assets. In the event of a violation by the Company of any of its loan
covenants or other default by the Company on its obligations, the Company's
indebtedness could become immediately due and payable and the Banks could
foreclose on the Company's assets. There can be no assurance that the Company
will be able to comply with the terms of its loan agreement with the Banks.
ACCOUNTS RECEIVABLE, COLLECTION AND CREDIT RISKS; SALES CONCENTRATION
The Company's accounts receivable, less allowance for doubtful accounts,
at December 31, 1996 and June 30. 1997 was approximately $113 million and $119
million, respectively. At June 30, 1997, accounts receivable from Success World
Limited, an exporter in Hong Kong, was approximately $12.5 million and, during
the six months ended June 30, 1997, product sales to Success World Limited
accounted for approximately 12% of the Company's net sales. No other customer
accounted for more than 5% of the Company's net sales during the six months
ended June 30, 1997. At June 30, 1997, the Company's allowance for doubtful
accounts was approximately $2 million, which the Company believes is currently
adequate for the size and nature of its receivables. Nevertheless, delays in
collection or uncollectibility of accounts receivable could have a material
adverse effect on the Company's liquidity and working capital position. For the
year ended December 31, 1996 and the six months ended June 30, 1997,
approximately 55% and 52%, respectively, of the Company's net sales were made
on open account terms. In connection with the Company's continued expansion,
the Company intends to offer open account terms to additional customers, which
will subject the Company to increased credit risk, particularly in the event
that any such receivables represent sales to a limited number of customers or
are concentrated in particular geographic markets, and could require the
Company to continually increase its allowance for doubtful accounts.
POSSIBLE FLUCTUATIONS IN OPERATING RESULTS; SEASONALITY
The Company's operating results are influenced by a number of seasonal
factors in the different countries and markets in which it operates. Such
results may vary from period to period as a result of purchasing patterns of
customers in different markets, the timing of introduction of new products by
the Company's suppliers and competitors, variations in sales by distribution
channels, product availability and pricing and other seasonal factors such as
those associated with consumer electronics and retail sales which tend to
result in increased volume in the latter part of the calendar year. While the
overall growth of the Company's business has reduced the impact of such factors
on the Company's operating results, seasonality contributes to the increase in
the Company's sales in the fourth quarter of its fiscal years. Unanticipated
events, including delays in securing adequate inventories of competitive
products at the time
-14-
<PAGE> 15
of peak sales, or significant decreases in sales during such periods, could
have a material adverse effect on the Company. There can be no assurance that
the foregoing factors will not result in significant fluctuations in operating
results in the future.
DEPENDENCE ON KEY PERSONNEL
The success of the Company depends in large part on the abilities and
continued services of its executive officers and other key employees. Although
the Company has entered into employment agreements with several of such
officers and employees, there can be no assurance that the Company will be able
to retain their services. The loss of executive officers or other key personnel
could have a material adverse effect on the Company. The Company also has
non-compete agreements with its executive officers and certain of its existing
key personnel; however, courts are at times reluctant to enforce such
agreements. In addition, in order to support its continued growth, the Company
will be required to effectively recruit, develop and retain additional
qualified management. The inability of the Company to attract and retain such
necessary personnel could also have a material adverse effect on the Company.
UNCERTAINTY OF PROTECTION OF PROPRIETARY SOFTWARE
The Company's success is substantially dependent upon its proprietary
software applications relating to its information systems. The Company does not
currently hold any patents relating to its software and relies on trade secret
and copyright laws to protect its proprietary software. In addition, the
Company regularly enters into non-disclosure agreements with its key employees
and limits access to and distribution of its trade secrets and other
proprietary information. There can be no assurance that these measures will be
adequate to prevent misappropriation of its technology or that the Company's
competitors will not independently develop technologies that are substantially
equivalent or superior to the Company's technology, thereby eliminating one of
the Company's perceived competitive advantages. In addition, the laws of some
countries do not protect the Company's proprietary rights to the same extent as
do the laws of the United States. Finally, although the Company believes that
its proprietary software has been developed independently and does not infringe
upon the proprietary rights of others, there can be no assurance that the
software does not and will not so infringe or that third parties will not
assert infringement claims against the Company in the future.
RELIANCE ON TECHNOLOGY; RISK OF BUSINESS INTERRUPTION
The Company has invested significantly in sophisticated and specialized
information systems technology and has focused on the application of this
technology to provide customized distribution and value-added logistics
services to wireless communications equipment manufacturers and network
operators. The Company anticipates that it will be necessary to continue to
develop new logistics services and enhance its information systems in order to
maintain its competitiveness. In addition, the Company's sales and marketing
efforts (a large part of which are telemarketing based) are highly dependent on
its computer and telephone equipment, and the temporary or permanent loss of
such equipment or systems through casualty or operating malfunction, or a
significant increase in the cost of telephone services that is not recoverable
through an increase in the price of the Company's services, could have a
material adverse effect on the Company. The Company's property and business
interruption insurance may not adequately compensate the Company for all losses
that it may incur in any such event.
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<PAGE> 16
DEPENDENCE ON LABOR FORCE
The Company's distribution and value-added logistics services are labor
intensive and the Company experiences high personnel turnover. A significant
number of the Company's employees are employed on a part-time basis. A higher
turnover rate among the Company's employees would increase the Company's
recruiting and training costs and decrease operating efficiencies and
productivity. Growth in the Company's business, together with seasonal
increases in net sales, require the Company to recruit and train personnel at
an accelerated rate from time to time. There can be no assurance that the
Company will be able to continue to hire, train and retain a significant labor
force of qualified employees when needed, or at all. In addition, a significant
portion of the Company's costs consist of wages to hourly workers. An increase
in hourly wages, costs of employee benefits, employment taxes or commission
rates could have a material adverse effect on the Company.
POTENTIAL VOLATILITY OF PRICE OF THE COMMON STOCK
The market price of the Common Stock has risen substantially and, from
time to time, experienced significant fluctuations since the Company's initial
public offering in April 1994. The Common Stock is quoted on the Nasdaq
National Market, which market has experienced, and is likely to experience in
the future, significant price and volume fluctuations which could adversely
affect the market price of the Common Stock without regard to the operating
performance of the Company. In addition, the trading price of the Common Stock
could be subject to significant fluctuations in response to actual or
anticipated variations in the Company's quarterly operating results and other
factors, such as the introduction of new services or technologies by the
Company, its competitors or its suppliers, changes in other conditions or
trends in the wireless communications industry, changes in governmental
regulation, changes in securities analysts' estimates for the Company's, or its
competitors' or industry's, future performance or general market conditions.
General market price declines or market volatility in the future, or future
declines or volatility in the prices of stocks for companies in the wireless
communications industry or the distribution or value-added logistics services
sectors of the wireless communications industry, could also affect the market
price of the Common Stock.
ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER, BY-LAW AND STOCKHOLDERS RIGHTS PLAN
PROVISIONS
The Company's Certificate of Incorporation, as amended, authorizes the
issuance of "blank check" preferred stock with such designations, rights and
preferences as may be determined from time to time by the Board of Directors.
Accordingly, the Board of Directors is empowered, without stockholder approval,
to issue preferred stock with dividend, liquidation, conversion, voting or
other rights which could adversely affect the voting power or other rights of
the holders of the Company's Common Stock. In addition, the Company's Amended
and Restated By-laws divide the Board of Directors into three classes serving
staggered three-year terms. The Company also has a Stockholders Rights Plan
that may make certain proposed acquisitions of the Company prohibitively
expensive. These charter and by-law provisions and the Stockholders Rights Plan
could make it more difficult for a stockholder to effect certain transactions
and make it more difficult for a third party to acquire, or discourage a third
party from attempting to acquire, control of the Company. As a result, such
provisions could limit the price that certain investors might be willing to pay
in the future for shares of the Company's Common Stock.
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<PAGE> 17
POSSIBLE MEDICAL RISKS ASSOCIATED WITH WIRELESS HANDSETS
Recent lawsuits have been filed against manufacturers of wireless handsets
alleging possible medical risks, including brain cancer, associated with
electromagnetic fields emitted by wireless hand-held cellular telephones. To
date, there has been only limited research in this area, and such research has
not been conclusive as to what effects, if any, exposure to electromagnetic
fields emitted by wireless handsets has on human cells. The Company recognizes,
however, that the perception that health risks may exist could adversely affect
the Company's ability to market wireless handsets. Inasmuch as substantially
all of the Company's revenues are derived, either directly or indirectly, from
sales of wireless handsets, future studies finding possible health risks
associated with the use of such products could have a material adverse effect
on the wireless communications industry and the Company. As a distributor of
wireless handsets, the Company may be subject to lawsuits filed by plaintiffs
alleging health risks. A successful claim against the Company could have a
material adverse effect on the Company.
SHARES ELIGIBLE FOR FUTURE SALE
As of September 30, 1997, the Company had stock options and warrants
outstanding for the purchase of an aggregate of 2,883,568 shares of Common
Stock, of which options and warrants outstanding for the purchase of an
aggregate of 386,007 shares of Common Stock were immediately exercisable, and
had registered an aggregate of 2,149,146 shares of Common Stock underlying
outstanding options and warrants, and options available for future grant under
the Company's Stock Option Plans, under the Securities Act of 1933, as amended
(the "Securities Act"). No prediction can be made as to the effect, if any,
that future sales of shares or the registration and/or availability of shares
for sale will have on the market price of the Common Stock prevailing from time
to time. Nonetheless, sales of substantial amounts of Common Stock upon the
exercise of stock options or warrants or otherwise, or the perception that such
sales might occur, could adversely affect prevailing market prices of the
Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Stockholder. The Company has agreed to pay certain
expenses in connection with this offering, currently estimated to be $50,000.
SELLING STOCKHOLDER AND PLAN OF DISTRIBUTION
An aggregate of up to 375,000 shares may be sold pursuant to this
Prospectus by the Selling Stockholder. With respect to 187,500 of such shares,
the Selling Stockholder has agreed that he will not offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any of such shares or any securities
convertible into or exchangeable or exercisable for such shares of Common Stock
prior to December 5, 1997 without the prior written consent of Merrill Lynch &
Co., a co-managing underwriter in connection with the Company's public offering
consummated in August 1997. Except as described below, the Selling Stockholder
has never held any position or office with the Company or had any other
material relationship with the Company. The Company will not receive any of
the proceeds from the sale of shares of Common Stock by the Selling
Stockholder.
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<PAGE> 18
The following table sets forth certain information with respect to the Selling
Stockholder:
<TABLE>
<CAPTION>
Beneficial
Ownership of Shares Percentage of
of Common Stock Shares to be Sold Shares Owned After Shares Owned After
Selling Stockholder Prior to Sale in the Offering the Offering(1) the Offering
- ------------------- ------------------- ----------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Dana E. Marlin(2) 390,625(3) 375,000 15,625(3) *
</TABLE>
* Less than 1%.
(1) Assumes all of the shares offered hereby are sold by the Selling
Stockholder.
(2) Mr. Marlin is an Executive Vice President of the Company.
(3) Includes 15,625 shares underlying options granted pursuant to the Company's
1994 Stock Option Plan, exercisable as of the date hereof. Does not
include (i) 50,000 shares underlying options granted pursuant to the
Company's 1996 Stock Option Plan, and (ii) 6,500 shares underlying options
granted pursuant to the Company's 1994 Stock Option Plan, none of which
are currently exercisable.
The Common Stock will be offered and sold from time to time as market
conditions permit in the over-the-counter market, or otherwise, at prices and
terms then prevailing or at prices related to the then-current market price, or
in negotiated transactions. The shares offered hereby may be sold by one or
more of the following methods, without limitation: (a) a block trade in which a
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; and (d) face-to-face transactions between sellers and purchasers
without a broker-dealer. In effecting sales, brokers or dealers engaged by the
Selling Stockholder may arrange for other brokers or dealers to participate.
Such broker or dealers may receive commissions or discounts from the Selling
Stockholder in amounts to be negotiated. Such brokers and dealers and any
other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act, in connection with such sales. Any
commissions, discounts or other fees payable to a broker, dealer or market
maker in connection with the sale of any Common Stock will be borne by the
Selling Stockholder.
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<PAGE> 19
INDEMNIFICATION
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the Delaware General Corporation Law permits a
corporation, by so providing in its certificate of incorporation, to eliminate
or limit director's liability to the corporation and its stockholders for
monetary damages arising out of certain alleged breaches of their fiduciary
duty. Section 102(b) (7) provides that no such limitation of liability may
affect a director's liability with respect to any of the following: (i)
breaches of the director's duty of loyalty to the corporation or its
stockholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct of knowing violations of law; (iii) liability for
dividends paid or stock repurchased or redeemed in violation of the Delaware
General Corporation law; or (iv) any transaction from which the director
derived an improper personal benefit. Section 102(b)(7) does not authorize any
limitation on the ability of the corporation or its stockholders to obtain
injunction relief, specific performance or other equitable relief against
directors.
Article Ninth of the Company's Certificate of Incorporation and the
Company's By-laws provide that all persons who the Company is empowered to
indemnify pursuant to the provisions of Section 145 of the General Corporation
law of the State of Delaware (or any similar provision or provisions of
applicable law at the time in effect), shall be indemnified by the Company to
the full extent permitted thereby. The foregoing right of indemnification shall
not be deemed to be exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise.
Article Tenth of the Company's Certificate of Incorporation provides that
no director of the Company shall be personally liable to the Company or its
stockholders for any monetary damages for breaches of fiduciary duty as a
director, provided that such provision does not eliminate or limit the
liability of a director (i) for breaches of fiduciary duty of loyalty to the
Company or its stockholders' (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing-violation of law; (iii) under
Section 174 of the General Corporation of Law of the State of Delaware; or (iv)
for any transaction from which the director derived an improper personal
benefit.
Insofar as indemnification for liabilities under the Act may be permitted
to directors, officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares of Common
Stock offered hereby are being passed upon for the Company by Tenzer Greenblatt
LLP, New York, New York. A partner of Tenzer Greenblatt LLP holds options to
purchase 9,375 shares of Common Stock at an exercise price of $19.40 per share.
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<PAGE> 20
EXPERTS
The Consolidated Financial Statements and schedule of the Company as of
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996 incorporated by reference in this Prospectus and the
Registration Statement (as defined herein), have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon incorporated
by reference herein, which, as to the years 1995 and 1994, are based in part on
the reports of Coopers & Lybrand L.L.P., independent auditors. The financial
statements and schedule referred to above are incorporated herein by reference
in reliance upon such reports given upon the authority of said firms as experts
in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act with respect to the
Common Stock registered hereunder. As used herein, the term "Registration
Statement" means the initial Registration Statement and any and all amendments
thereto. This Prospectus omits certain information contained in said
Registration Statement as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock registered hereunder, reference is made to the Registration Statement,
including the exhibits thereto. Statements herein concerning the contents of
any contract or other document are not necessarily complete and in each
instance reference is made to such contract or other documents filed with the
Commission as an exhibit to the Registration Statement, or otherwise, each such
statement being qualified by and subject to such reference in all respects.
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<PAGE> 21
<TABLE>
- ------------------------------------------------ -----------------------------------------------------
<S> <C>
NO DEALER, SALESPERSON OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS, AND IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS 375,000 SHARES OF
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
SELLING STOCKHOLDER. THIS PROSPECTUS DOES COMMON STOCK
NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY BRIGHTPOINT, INC.
SECURITY OTHER THAN THE SHARES OFFERED BY
THIS PROSPECTUS, OR AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY
BY ANY PERSON IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, IMPLY THAT THE INFORMATION
IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
_________________
</TABLE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . 3
INFORMATION INCORPORATED BY REFERENCE . . . 3
PROSPECTUS SUMMARY. . . . . . . . . . . . . 4 ___________________
RISK FACTORS. . . . . . . . . . . . . . . . 9
USE OF PROCEEDS . . . . . . . . . . . . . . 17 PROSPECTUS
SELLING STOCKHOLDER AND PLAN OF ___________________
DISTRIBUTION . . . . . . . . . . . . . 17
INDEMNIFICATION . . . . . . . . . . . . . . 19
LEGAL MATTERS . . . . . . . . . . . . . . . 19
EXPERTS . . . . . . . . . . . . . . . . . . 20
ADDITIONAL INFORMATION. . . . . . . . . . . 20
OCTOBER ___, 1997
- ------------------------------------------------ -----------------------------------------------------
</TABLE>
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<PAGE> 22
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses payable in connection with the issuance and distribution of the
securities being registered (estimated except in the case of the registration
fee) are as follows:
Amount
Registration Fee $ 5,014.00
----------
Printing 5,000.00
----------
Legal and Accounting Fees and Expenses 25,000.00
----------
Transfer Agents and Registrars Fees 500.00
----------
Miscellaneous 14,486.00
----------
TOTAL $ 50,000.00
==========
The above fees will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorized Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
Section 102(b) of the Delaware Corporation Law permits a corporation, by
so providing in its certificate of incorporation, to eliminate or limit
director's liability to the corporation and its stockholders for monetary
damages arising out of certain alleged breaches of their fiduciary duty.
Section 102(b)(7) provides that no such limitation of liability may affect a
director's liability with respect to any of the following: (i) breaches of the
director's duty of loyalty to the corporation or its stockholders; (ii) acts or
omissions not made in good faith or which involve intentional misconduct of
knowing violations of law; (iii) liability for dividends paid or stock
repurchased or redeemed in violation of the Delaware General Corporation Law;
or (iv) any transaction from with the director derived an improper personal
benefit. Section 102(b)(7) does not authorize any limitation on the ability of
the corporation or its stockholders to obtain injunctive relief, specific
performance or other equitable relief against directors.
Article TENTH of the registrant's Certificate of Incorporation provides
that no director shall be personally liable to the registrant or any of its
stockholders for monetary damages for breach of fiduciary duty as a director
except to the extent such elimination or limitation is prohibited by the
Delaware General Corporation Law. In addition, Article NINTH of the
registrant's Certificate of Incorporation and Article XX of the By-Laws of the
registrant provide in substance that, to the fullest extent permitted by
II-1
<PAGE> 23
Delaware law, each director and officer shall be indemnified by the registrant
against reasonable costs and expenses, including attorneys fees, and any
liabilities which may be incurred in connection with any action to which he may
be made a party by reason of having been a director or officer of the
registrant. The indemnification provided by the registrant's By-Laws is not
deemed exclusive of or in any way to limit any other rights which any person
seeking indemnification may be entitled.
ITEM 16. EXHIBITS
(a) Exhibits
Exhibit No.
4 Form of certificate evidencing Common Stock, $.01 par value, of the
Company, incorporated by reference to the Company's Registration Statement
on Form S-1 as declared effective by the Securities and Exchange
Commission on April 7, 1994.
5 Opinion of Tenzer Greenblatt LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Coopers & Lybrand LLP.
23.3 Consent of Tenzer Greenblatt LLP (included in Exhibit 5).
24 Power of Attorney (included in the signature page).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement;
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) to reflect in the Prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Securities and Exchange
Commission (the "Commission") pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and prices represent no more than
20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
II-2
<PAGE> 24
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be filed with a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") that are incorporated by reference in the
registration statement.
(2) that for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed the initial
bona fide offering thereof.
(3) to remove by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) that for the purpose of determining any liability under the
Securities Act each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer, or controlling person of the registrant in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Indianapolis, State of Indiana, on October 9,
1997.
BRIGHTPOINT, INC.
By: /s/ Robert J. Laikin
---------------------
Robert J. Laikin
Chairman of the Board and
Chief Executive Officer
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert J. Laikin and J. Mark Howell,
jointly and severally, as his true and lawful attorney-in-fact and agent, each
will full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each said attorney-in-fact or agent or substitute lawfully
does or causes to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Robert J. Laikin
- ----------------------- Director, Chairman of the Board; October 9, 1997
Robert J. Laikin and Chief Executive Officer
(Principal Executive Officer)
/s/ J. Mark Howell
- ----------------------- Director, President and October 9, 1997
J. Mark Howell Chief Operating Officer
/s/ Phillip A. Bounsall
- ----------------------- Executive Vice President, October 9, 1997
Phillip A. Bounsall Chief Financial Officer
(Principal Financial Officer)
/s/ T. Scott Housefield
- ----------------------- Director, Executive Vice President, October 9, 1997
T. Scott Housefield
/s/ John P. Delaney
- ----------------------- Vice President, Corporate October 9, 1997
John P. Delaney Controller (Principal Accounting
Officer)
/s/ John W. Adams
- ----------------------- Director October 9, 1997
John W. Adams
/s/ Robert F. Wagner
- ----------------------- Director October 9, 1997
Robert F. Wagner
/s/ Stephen H. Simon
- ----------------------- Director October 9, 1997
Stephen H. Simon
/s/ Rollin M. Dick
- ----------------------- Director October 9, 1997
Rollin M. Dick
/s/ Steven B. Sands
- ----------------------- Director October 9, 1997
Steven B. Sands
</TABLE>
II-4
<PAGE> 26
Exhibit No. Description
4 Form of certificate evidencing Common Stock, $.01 par value, of
the Company, incorporated by reference to the Company's
Registration Statement on Form S-1 as declared effective by the
Securities and Exchange Commission on April 7, 1994.
5 Opinion of Tenzer Greenblatt LLP
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Tenzer Greenblatt LLP (included in Exhibit 5).
24 Power of Attorney (included in Signature Page).
<PAGE> 1
EXHIBIT 5
<PAGE> 2
October 9, 1997
Brightpoint, Inc.
6402 Corporate Drive
Indianapolis, Indiana 46278
Gentlemen:
You have requested our opinion in connection with the offer and sale by a
stockholder of Brightpoint, Inc., a Delaware corporation (the "Company"),
pursuant to a Registration Statement (the "Registration Statement") on Form S-3
under the Securities Act of 1933, as amended (the "Act"), of up to 375,000
shares (the "Shares") of Common Stock, par value $.01 per share, of the
Company.
We have examined originals, or copies certified or otherwise identified to
our satisfaction, of such documents and corporate and public records as we deem
necessary as a basis for the opinion hereinafter expressed. With respect to
such examination, we have assumed the genuineness of all signatures appearing
on all documents presented to us as originals, and the conformity to the
originals of all documents presented to us as conformed or reproduced copies.
Where factual matters relevant to such opinion were not independently
established, we have relied upon certificates of executive officers and
responsible employees and agents of the Company.
Based upon the foregoing, it is our opinion that the Shares have been duly
and validly authorized and issued and are fully paid and nonassessable.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement, and to the use of our name as your counsel in
connection with the Registration Statement and in the Prospectus forming a part
thereof. In giving this consent, we do not thereby concede that we come within
the categories of persons whose consent is required by the Act or the General
Rules and Regulations promulgated thereunder.
Very truly yours,
/s/ Tenzer Greenblatt LLP
-------------------------
TENZER GREENBLATT LLP
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-3), and related Prospectus, pertaining to the
offering of up to 375,000 shares of common stock of Brightpoint, Inc. held by a
stockholder of Brightpoint, Inc. and to the incorporation by reference herein
of our report dated January 28, 1997, with respect to the consolidated
financial statements of Brightpoint, Inc. incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1996 and the related
schedule included therein, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Indianapolis, Indiana
October 9, 1997
<PAGE> 1
EXHIBIT 23.2
<PAGE> 2
CONSENT OF INDEPENDANT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related prospectus, pertaining to the
offering of up to 375,000 shares of Common Stock of Brightpoint, Inc. by a
stockholder of Brightpoint, Inc. and to the incorporation by reference therein
of our report dated February 23, 1996, relating to the combined balance sheets
of Allied Communications, Inc. and its affiliates for the year ended December
31, 1995 and the related combined statements of income, stockholders' equity
and cash flows for the years ended December 31, 1994 and 1995 incorporated by
reference in the Annual Report on Form 10-K of Brightpoint, Inc. for the year
ended December 31, 1996.
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
October 9, 1997
