BRIGHTPOINT INC, 424B1, 1997-08-07

BRIGHTPOINT INC
424B1, 1997-08-07
ELECTRONIC PARTS & EQUIPMENT, NEC

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<PAGE> 1

PROSPECTUS

4,500,000 SHARES

BRIGHTPOINT LOGO

COMMON STOCK
------------------------
Of the 4,500,000 shares of Common Stock of Brightpoint, Inc., a Delaware
corporation (the "Company" or "Brightpoint"), being offered hereby, 2,200,000
shares are being offered by the Company and 2,300,000 shares are being offered
by certain stockholders of the Company (the "Selling Stockholders"). The Company
will not receive any of the proceeds from the sale of shares of Common Stock by
the Selling Stockholders. See "Principal and Selling Stockholders."

Of the 4,500,000 shares of Common Stock offered hereby, 3,600,000 are being
offered initially in the United States and Canada by the U.S. Underwriters (the
"U.S. Offering") and 900,000 shares are being offered initially in a concurrent
international offering outside the United States and Canada by the International
Managers (the "International Offering," and together with the U.S. Offering, the
"Offerings"). The public offering price and the underwriting discount per share
are identical for each of the Offerings. See "Underwriting."

The Common Stock is quoted on the Nasdaq National Market under the symbol
"CELL." On August 6, 1997, the last reported sale price of the Common Stock on
the Nasdaq National Market was $31 1/8 per share. See "Price Range of Common
Stock."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------

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.
<TABLE>
<CAPTION>
=========================================================================================================================
PROCEEDS TO
PRICE UNDERWRITING PROCEEDS TO SELLING
TO PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Per Share.................... $ 30.00 $ 1.50 $ 28.50 $ 28.50
- -------------------------------------------------------------------------------------------------------------------------
Total(3)..................... $ 135,000,000 $ 6,750,000 $ 62,700,000 $ 65,550,000
=========================================================================================================================
</TABLE>

(2) Before deducting expenses of the Offerings payable by the Company estimated
to be $1,250,000. The Selling Stockholders will not be paying any of the
expenses of the Offerings.

(3) The Company has granted an option to the U.S. Underwriters, exercisable
within 30 days of the date hereof, to purchase up to 480,000 additional
shares of Common Stock and an option to the International Managers,
exercisable within 30 days of the date hereof, to purchase up to 120,000
additional shares of Common Stock, solely to cover over-allotments, if any.
If such options are exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $153,000,000,
$7,650,000 and $79,800,000, respectively. See "Underwriting."
------------------------

The shares of Common Stock are being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to the approval of certain legal matters by counsel for the Underwriters and to
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the shares of Common Stock will be made in New York, New York
on or about August 12, 1997.
------------------------
MERRILL LYNCH & CO.
COWEN & COMPANY
UBS SECURITIES
SANDS BROTHERS & CO., LTD.
------------------------

The date of this Prospectus is August 6, 1997.
<PAGE> 2

<TABLE>
<S><C>
[Ericsson LOGO] [Nokia LOGO] [Picture of Brightpoint, Inc.'s
Indianapolis, Indiana Operations
Center]

[Picture of value-added logistics
services line at Brightpoint,
Inc.'s Indianapolis, Indiana
Operations Center] [NEC LOGO] [Panasonic LOGO]

[Uniden LOGO] [Picture of value-added [Audiovox Cellular
logistics services line Communications
[Philips LOGO] at Brightpoint, Inc.'s LOGO]
[Mitsubishi Logo] Indianapolis, Indiana
[Siemens LOGO] Operations Center] [OKI Phones LOGO]

[Picture of repair and [Brightpoint, Inc. LOGO] [Picture of
refurbishment line A leading provider of Brightpoint,
in Indianapolis, distribution and value Inc.'s Indianapolis,
Indiana] -added logistics services Indiana Operations
to the global wireless Center.]
communications industry.

</TABLE>

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
------------------------

IN CONNECTION WITH THE OFFERINGS, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON
THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE
"UNDERWRITING."
<PAGE> 3

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. Except as otherwise
indicated, all information in this Prospectus assumes no exercise of the
Underwriters' over-allotment options. All dollar amounts set forth in this
Prospectus are expressed in United States dollars. See "Underwriting."

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 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
3
<PAGE> 4

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 OFFERINGS

Common Stock offered by:

The Company(1)................. 2,200,000 shares

The Selling Stockholders(2).... 2,300,000 shares

Common Stock to be outstanding
after the Offerings(3)............ 24,518,490 shares

Use of Proceeds..................... To repay indebtedness. See "Use of
Proceeds."

Nasdaq National Market symbol....... CELL
- ------------
(1) Of the 2,200,000 shares of Common Stock to be sold in the Offerings by the
Company, 1,760,000 shares are being offered initially in the United States
and Canada by the U.S. Underwriters and 440,000 shares are being offered
initially in a concurrent international offering outside the United States
and Canada by the International Managers. See "Underwriting."

(2) Of the 2,300,000 shares of Common Stock to be sold in the Offerings by the
Selling Stockholders, 1,840,000 shares are being offered initially in the
United States and Canada by the U.S. Underwriters and 460,000 shares are
being offering initially in a concurrent international offering outside the
United States and Canada by the International Managers. See "Underwriting."

(3) Does not include (i) an aggregate of 2,797,270 shares of Common Stock
reserved, as of July 10, 1997, for issuance upon exercise of outstanding
stock options (of which stock options to purchase 352,885 shares were
immediately exercisable) and an aggregate of 2,248,277 shares of Common
Stock reserved, as of July 10, 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 July 10, 1997, for issuance upon
exercise of outstanding and immediately exercisable warrants. See
"Management -- Stock Option Plans."

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.
4
<PAGE> 5

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
-------------------------
ACTUAL AS ADJUSTED(5)
-------- --------------
<S> <C> <C>
Working capital........................................... $167,564 $167,564
Total assets.............................................. 286,157 286,157
Long-term obligations..................................... 97,831 36,381
Stockholders' equity...................................... 110,235 171,685
</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. See Note 2 of Notes to Consolidated Financial Statements.

(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. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 3 of Notes to
Consolidated Financial Statements.
5
<PAGE> 6

(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. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note 1 of Notes to Consolidated Financial Statements.

(4) Excluding the after-tax effect ($2.1 million) of one-time merger expenses
incurred in connection with the Allied Merger. See Note 2 of Notes to
Consolidated Financial Statements.

(5) As adjusted to give effect to the receipt by the Company of the estimated
net proceeds from the sale of the 2,200,000 shares of Common Stock offered
by the Company in the Offerings and the anticipated application of the
estimated net proceeds therefrom. See "Use of Proceeds."
6
<PAGE> 7

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. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and Consolidated
Financial Statements.

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

7
<PAGE> 8

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
regulations 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 social, 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. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and Note 1 of Notes
to Consolidated Financial Statements.

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 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

8
<PAGE> 9

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. See "Business -- Wireless
Communications Industry," "-- Growth Strategy" and "-- Services."

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. See "Business -- Purchasing and Supply."

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

9
<PAGE> 10

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. See "Business -- Competition."

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. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business."

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

10
<PAGE> 11

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. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and Note 3 of Notes to Consolidated Financial
Statements.

SIGNIFICANT OUTSTANDING INDEBTEDNESS; LOAN COVENANTS AND SECURITY INTERESTS

As of June 30, 1997, the Company had approximately $97.5 million in
outstanding borrowings and an aggregate of $15.6 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. Although the Company intends to use the proceeds of the
Offerings received by it to repay a portion of its outstanding borrowings, the
Company expects to utilize the resulting increased borrowing availability under
its line of credit to fund its operations. There can be no assurance that the
Company will be able to comply with the terms of its loan agreement with the
Banks. See "Use of Proceeds" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

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

11
<PAGE> 12

Company to continually increase its allowance for doubtful accounts. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

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 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. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations."

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. See "Management."

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. See "Business -- Information Systems."

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

12
<PAGE> 13

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. See "Business -- Services," "-- Sales and Marketing"
and "-- Information Systems."

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. See "Business -- Employees."

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. See "Description of Capital
Stock -- Preferred Stock" and "-- Anti-Takeover Effects of Certain Provisions of
the Company's By-laws, Stockholders Rights Plan and Delaware Corporate Law." See
also "Management -- Employment Agreements."

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

13
<PAGE> 14

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 July 10, 1997, the Company had stock options and warrants outstanding
for the purchase of an aggregate of 2,821,410 shares of Common Stock, of which
options and warrants outstanding for the purchase of an aggregate of 377,025
shares of Common Stock were immediately exercisable, and had registered an
aggregate of 1,209,922 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"). In addition, commencing 30 days following the date of this Prospectus, a
stockholder, who is also an employee, of the Company may require the Company to
file a registration statement relating to 375,000 shares of Common Stock owned
by such stockholder and to take such reasonable steps necessary to cause the
registration statement to be declared effective. Such stockholder has agreed
that he will not sell, offer to sell, grant any option for the sale of, or
otherwise dispose of 187,500 of such shares for a period of 120 days following
the consummation of the Offerings; provided, however, that if, subsequent to
exercise of the demand registration right by the stockholder, the registration
statement relating to the stockholder's 375,000 shares of Common Stock is not
declared effective by five days prior to the public announcement of the
Company's financial results for the three months ended September 30, 1997, he
may, subject to applicable securities laws, sell up to 187,500 shares of Common
Stock commencing the day following the public announcement of the Company's
financial results for the three months ended September 30, 1997. 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. See "Management
- -- Stock Option Plans" and "Shares Eligible for Future Sale; Registration
Rights."

14
<PAGE> 15

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
2,200,000 shares of Common Stock offered by the Company in the Offerings are
estimated to be approximately $61.5 million ($78.6 million if the Underwriters'
over-allotment options are exercised in full), after deduction of the
underwriting discount and estimated offering expenses payable by the Company.
The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Stockholders.

The Company intends to use the net proceeds received by it to repay a
portion of the amounts outstanding under its $200 million revolving line of
credit facility with the Banks. As of June 30, 1997, approximately $97.5 million
was outstanding under such facility. The line of credit matures in June 2002 and
generally bears interest, at the Company's option, at (i) the greater of The
First National Bank of Chicago's corporate base rate and 0.50% plus the Federal
funds effective rate (the "Base Rate") or (ii) the rate at which deposits in
United States dollars or Eurocurrencies are offered by banks in the London
interbank market (the "Eurodollar Rate") plus a spread ranging from 40 to 112.5
basis points (based on a leverage ratio defined in the credit agreement) plus a
reserve spread, if any. Borrowings by the Company's non-United States
subsidiaries will bear interest at rates negotiated with the applicable lenders.
Following the consummation of the Offerings, the Company intends to utilize the
resulting increased borrowing availability under the line of credit as necessary
in the ordinary course of business, including for increased inventories and
receivables and continued enhancement of the Company's information systems. The
Company may use a portion of such increased borrowing availability to acquire
businesses which the Company believes are compatible with its business. While
the Company regularly evaluates possible acquisition opportunities, as of the
date of this Prospectus, the Company has no material agreements, commitments,
understandings or arrangements with respect to any acquisition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

Pending use of the net proceeds as set forth above, the Company intends to
invest the net proceeds received by it principally in United States government
securities, short-term certificates of deposit, money market funds or other
interest bearing investments.

PRICE RANGE OF COMMON STOCK

The Common Stock has been quoted on the Nasdaq National Market under the
symbol "CELL" since the Company's initial public offering in 1994. The following
table sets forth, on a per share basis, the high and low sales prices of the
Common Stock for the periods indicated, as reported by the Nasdaq National
Market.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Year Ended December 31, 1995:
First Quarter.......................................... $ 7.63 $ 5.76
Second Quarter......................................... 9.92 7.09
Third Quarter.......................................... 9.73 8.05
Fourth Quarter......................................... 11.00 6.74
Year Ended December 31, 1996:
First Quarter.......................................... 10.67 7.20
Second Quarter......................................... 16.27 9.07
Third Quarter.......................................... 13.93 10.00
Fourth Quarter......................................... 24.20 12.27
Year Ending December 31, 1997:
First Quarter.......................................... 25.00 16.25
Second Quarter......................................... 34.88 16.00
Third Quarter (through August 6, 1997)................. 32.63 27.75
</TABLE>

On August 6, 1997, the last reported sale price of the Common Stock on the
Nasdaq National Market was $31.13 per share. At July 14, 1997, there were
approximately 125 stockholders of record.

15
<PAGE> 16

DIVIDEND POLICY

The Company has not paid cash dividends on its Common Stock other than S
corporation distributions made to its stockholders prior to the Company's
initial public offering in April 1994 and S corporation distributions made to
the stockholders of Allied Communications prior to the Allied Merger. The Board
of Directors intends to continue a policy of retaining earnings to finance the
Company's anticipated growth and development of its business and does not expect
to declare or pay any cash dividends in the foreseeable future. In addition, the
declaration or payment of cash dividends is prohibited under the terms of the
agreements relating to the Company's line of credit facility with the Banks.

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company at June 30, 1997 and as adjusted to give effect to the sale of the
2,200,000 shares of Common Stock offered by the Company in the Offerings and the
application of the estimated net proceeds therefrom. This table should be read
in conjunction with the Company's Consolidated Financial Statements and the
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1997
----------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS, EXCEPT SHARE
DATA)
<S> <C> <C>
Short-term debt............................................. $ -- $ --
======== ========
Notes payable............................................... $ 97,501 $ 36,051
Stockholders' equity:
Preferred Stock, $.01 par value; 1,000,000 shares
authorized; no shares issued or outstanding............ -- --
Common Stock, $.01 par value; 100,000,000 shares
authorized; 22,318,490 shares issued and outstanding;
24,518,490 shares issued and outstanding, as
adjusted(1)............................................ 223 245
Additional paid-in capital................................ 81,840 143,268
Retained earnings......................................... 27,817 27,817
Foreign currency translation adjustment................... 355 355
-------- --------
Total stockholders' equity............................. 110,235 171,685
-------- --------
Total capitalization................................... $207,736 $207,736
======== ========
</TABLE>

- ------------
(1) Does not include (i) an aggregate of 2,797,270 shares of Common Stock
reserved, as of July 10, 1997, for issuance upon exercise of outstanding
stock options (of which stock options to purchase 352,885 shares were
immediately exercisable) and an aggregate of 2,248,277 shares of Common
Stock reserved, as of July 10, 1997, for issuance upon exercise of stock
options available for future grant, in each case under the Company's Stock
Option Plans; and (ii) 24,140 shares of Common Stock reserved, as of July
10, 1997, for issuance upon exercise of outstanding and immediately
exercisable warrants. See "Management -- Stock Option Plans."

16
<PAGE> 17

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following tables set forth selected consolidated financial data for
each of the years in the five-year period ended December 31, 1996 and for the
six-month periods ended June 30, 1996 and 1997. The consolidated statement of
income data and balance sheet data for and as of the end of each of the years in
the five-year period ended December 31, 1996 are derived from the audited
Consolidated Financial Statements of the Company. The consolidated statement of
income data and balance sheet data for and as of the end of each of the
six-month periods ended June 30, 1996 and 1997 have been derived from the
unaudited Consolidated Financial Statements of the Company and, in the opinion
of management, include all adjustments (consisting of normal recurring accruals)
which are necessary to present fairly the results of operations and financial
position of the Company for the periods and at the dates indicated. The selected
consolidated financial data for the six months ended June 30, 1997 are not
necessarily indicative of the results to be expected for the full year. The
following selected consolidated financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements, including the notes
thereto, appearing elsewhere in this Prospectus.

CONSOLIDATED STATEMENT OF INCOME DATA(1):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, 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>
DECEMBER 31,
------------------------------------------------- JUNE 30,
1992 1993 1994 1995 1996 1997
------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Working capital................................. $ 3,072 $ 7,039 $20,960 $ 62,219 $143,481 $167,564
Total assets.................................... 18,365 31,283 82,845 119,787 299,045 286,157
Long-term obligations........................... 1,060 5,577 1,346 602 79,894 97,831
Stockholders' equity............................ 2,336 3,485 20,283 64,857 94,982 110,235
</TABLE>

- ------------
(1) On June 7, 1996, the Company completed the Allied Merger. 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

17
<PAGE> 18

both the Company and Allied Communications as if the Allied Merger had been
in effect for all periods presented. See Note 2 of Notes to Consolidated
Financial Statements.

(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's 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. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note 1 of Notes to Consolidated Financial Statements.

(4) Excluding the after-tax effect ($2.1 million) of one-time merger expenses
incurred in connection with the Allied Merger. See Note 2 of Notes to
Consolidated Financial Statements.

18
<PAGE> 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

This discussion and analysis should be read in conjunction with the
Consolidated Financial Statements of the Company, and the notes thereto,
included elsewhere in this Prospectus.

Effective June 7, 1996, the Company completed a merger with the Allied
Communications companies (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.), which were
engaged in substantially the same business as the Company. In connection with
the Allied Merger, the Company exchanged 3,796,875 newly issued shares of Common
Stock of the Company for all of the outstanding shares of common stock of Allied
Communications. The Allied Merger was accounted for using the
pooling-of-interests method and, consistent with such accounting treatment,
financial information presented herein for all periods reflects the combined
financial condition and results of operations of the Company and Allied
Communications.

Effective August 1, 1996, the Company completed the formation of
Brightpoint International Ltd. ("BIL"), a joint venture with Technology
Resources International Limited ("TRI"), owned 50% by the Company and 50% by
TRI. Pursuant to the terms of the purchase and shareholders' agreement, TRI
contributed to BIL substantially all of its assets relating to its wireless
communications business, including its interest in TRI (Europe) Limited and its
80% interest in the predecessor to Brightpoint China Limited. The Company agreed
to provide certain funding, sales opportunities and management to BIL. In
connection with the formation of BIL, the assets of TRI (Europe) Limited were
contributed to Brightpoint (UK) Limited, a majority-owned (80%) subsidiary of
BIL. In November 1996, the Company acquired TRI's 50% ownership interest in BIL
in consideration of 750,000 unregistered shares of Common Stock and $5.0 million
in cash.

In October 1996, BIL acquired the business and certain assets of Hatadicorp
Pty Ltd. ("Hatadi") based in Sydney, Australia in consideration of $2.8 million
in cash and a note payable, plus a 20% ownership interest in Brightpoint
Australia Pty Ltd. (an indirect subsidiary of BIL). In March and April of 1997,
the Company acquired the remaining 20% ownership interests in Brightpoint China
Ltd., Brightpoint (UK) Ltd. and Brightpoint Australia Pty Ltd. for an aggregate
consideration of 232,245 unregistered shares of Common Stock and $1.5 million in
cash. In June 1997, the Company, through Brightpoint Sweden AB, a wholly-owned
subsidiary of BIL, acquired the business and net assets of Telnic AB located in
Gothenburg, Sweden in consideration of approximately $2.5 million with an
additional $300,000 payable upon execution of a key contract and up to an
additional $3.6 million depending upon the future financial performance of
Brightpoint Sweden AB.

The Company completed 5-for-4, 3-for-2 and 5-for-4 stock splits in
September 1995, December 1996 and March 1997, respectively, each in the form of
a stock dividend.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage of
net sales represented by certain items reflected in the Company's statements of
income.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------- -----------------
1994 1995 1996 1996 1997
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales...................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales.................................. 93.9 93.3 92.2 93.0 91.9
----- ----- ----- ----- -----
Gross profit................................... 6.1 6.7 7.8 7.0 8.1
Selling, general and administrative expenses... 3.6 3.5 3.6 3.3 4.1
----- ----- ----- ----- -----
Income from operations......................... 2.5 3.2 4.2 3.7 4.0
Merger expenses................................ -- -- 0.5 1.2 --
Net investment gain............................ -- -- -- -- 0.3
Interest expense, net.......................... 0.1 0.3 0.3 0.2 0.7
----- ----- ----- ----- -----
Income before income taxes and minority
interest..................................... 2.4 2.9 3.4 2.3 3.6
Income taxes................................... 0.5 1.0 1.2 0.9 1.1
----- ----- ----- ----- -----
Income before minority interest................ 1.9 1.9 2.2 1.4 2.5
Minority interest in subsidiaries' earnings.... -- -- 0.3 -- 0.1
----- ----- ----- ----- -----
Net income..................................... 1.9% 1.9% 1.9% 1.4% 2.4%
===== ===== ===== ===== =====
Pro forma net income........................... 1.5% 1.7% 2.1% 2.1% 2.4%
===== ===== ===== ===== =====
</TABLE>

19
<PAGE> 20

The Company's net sales are comprised of sales of wireless handsets, sales
of related accessories and fees generated from value-added logistics services.
The Company's value-added logistics services include, among others, inventory
management, procurement, product fulfillment, programming, light assembly,
telemarketing, private labeling, kitting and customized packaging, off-balance
sheet financing, product warranty, repair and refurbishment and end-user support
services. Although fees for these value-added logistics services represent a
relatively small percentage of net sales, their impact on the Company's gross
profit is much greater. Compensation for the Company's distribution services,
which services include purchasing, marketing, selling, warehousing, picking,
packing, shipping and "just-in-time" delivery, is built into the equipment
prices paid or offered by the Company and thus is reflected in sales of wireless
handsets and accessories.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 TO SIX MONTHS ENDED JUNE 30,
1996

NET SALES. Net sales increased by 80% to $419.2 million for the six months
ended June 30, 1997 from $232.9 million for the six months ended June 30, 1996,
reflecting continued strong worldwide demand for wireless handsets and related
accessories. The increase in net sales is primarily attributable to a 53%
increase in handset volume and a 25% increase in the average selling price per
wireless handset. This increase in average selling price was the result of
significant sales growth in markets where sales are concentrated in higher
priced digital handsets.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------
1996 1997
---- ----
<S> <C> <C>
Net sales by division:
Asia-Pacific.............................................. 13% 44%
North America............................................. 67 31
Europe, Middle East and Africa............................ 2 20
Latin America............................................. 18 5
</TABLE>

Sales in the Asia-Pacific and Europe, Middle East and Africa divisions
remained strong as the Company continued to penetrate these markets. In its
North America division, units handled by the Company (phones sold by the Company
or phones, consigned to the Company by its customers, on which the Company has
performed its value-added logistics services) in the six months ended June 30,
1997 increased 31% from the comparable period in 1996 due primarily to an
increase in its value-added logistics services. In the many cases in which the
Company performs value-added logistics services on products consigned to it by
its customers, only service fees are recorded as sales. As a result, sales in
North America were lower in the six months ended June 30, 1997 than the six
months ended June 30, 1996. Sales in the Latin America division also decreased
due to a planned reduction in sales to other distributors, as the Company
continues to implement its strategy of selling directly to network operators.

Sales of wireless handsets, sales of related accessories and fees generated
from value-added logistics services were 89%, 7% and 4%, respectively, of net
sales for the six months ended June 30, 1997. Sales of wireless handsets and
related accessories were 84% and 16%, respectively, of net sales for the six
months ended June 30, 1996.

GROSS PROFIT. Gross profit increased by 107% to $34.0 million for the six
months ended June 30, 1997 from $16.4 million for the six months ended June 30,
1996, due to increased sales and increased gross margin (8.1% for the six months
ended June 30, 1997 as compared to 7.0% for the same period in 1996). The
increase in gross margin is primarily due to an increase in the amount of higher
margin value-added logistics services provided by the Company, as well as
increased sales in certain markets, and to certain customers, from which the
Company generated higher margins. In addition, the Company continued its
disciplined effort to reduce sales to other distributors in the North and Latin
America markets as such sales have traditionally been lower margin sales for the
Company.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by 121% to $17.1 million for the six months
ended June 30, 1997 from $7.8 million for the six months ended June 30, 1996. As
a percentage of net sales, selling, general and administrative expenses
increased to 4.1% for the six months ended June 30, 1997 as compared to 3.3% for
the same period in the prior year. This increase is

20
<PAGE> 21

attributable to the Company's expanded level of operations and reflects
increases in depreciation expense relating to investments in information
systems, rent expense for expanded facilities, and compensation expense and
travel costs associated with increased international sales and marketing
efforts.

INCOME FROM OPERATIONS. Income from operations increased by 95% to $16.9
million for the six months ended June 30, 1997 from $8.6 million for the six
months ended June 30, 1996. This increase is primarily attributable to increased
gross profit offset partially by an increase in selling, general and
administrative expenses.

NET INCOME AND PRO FORMA NET INCOME. Net income increased by 111% to $10.3
million in the six months ended June 30, 1997 from pro forma net income of $4.9
million in the six months ended June 30, 1996. This increase is the result of
increased income from operations, a $1.4 million net investment gain (as
described below) and a decrease in the effective income tax rate from 39% in the
six months ended June 30, 1996 to 29.9% in the first six months of 1997,
partially offset by an increase in interest expense relating to bank debt
obtained for working capital purposes and by income attributable to minority
interests. The decrease in the effective income tax rate is due primarily to
increased earnings in tax jurisdictions with lower statutory rates. Pro forma
amounts for 1996 reflect a provision for income taxes for Allied Communications,
which, at the time, was not subject to income taxes.

Net income per share increased by 91% to $0.44 for the six months ended
June 30, 1997 from pro forma net income per share of $0.23 for the six months
ended June 30, 1996. For the six months ended June 30, 1997, weighted average
common shares outstanding were approximately 23.2 million as compared to
approximately 20.8 million shares for the six months ended June 30, 1996. This
increase is due primarily to shares issued in connection with the Company's
acquisition of BIL and of the minority interests in Brightpoint China Limited,
Brightpoint (UK) Limited and Brightpoint Australia Pty Ltd. and the impact of
the exercise of stock options and warrants.

During the first quarter of 1997, the Company realized a gain on the sale
of its equity investment in CellStar Corporation. The gain, net of transaction
costs, including related bonuses to certain key employees, was approximately
$8.3 million. In addition, on March 31, 1997, Pocket filed for protection under
Chapter 11 of the U.S. Bankruptcy Code. Accordingly, the Company recorded $6.9
million of losses on its investments in Pocket and two smaller equity
investments. Excluding the impact of the resulting net investment gain of $1.4
million and related income taxes, net income per share for the six months ended
June 30, 1997 would have been $0.41.

COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995

NET SALES. Net sales increased by 41% to $589.7 million in 1996 from $419.1
million in the prior year, as worldwide demand for wireless handsets and related
accessories continued to accelerate. The increased demand for wireless products
was fueled by increasing penetration of wireless handsets in many world markets
and by increased demand for replacement or upgraded equipment. The Company
completed its merger with Allied Communications in June 1996 and formed its
joint venture relating to BIL in August 1996. This commitment to the Europe,
Middle East and Africa, Asia-Pacific and Latin America markets, resulted in
significant sales growth in markets outside of North America. Wireless handset
volume increased by 52% in 1996 from the prior year.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------
1995 1996
----- -----
<S> <C> <C>
Net sales by division:
North America............................................. 64% 49%
Asia-Pacific.............................................. 2 21
Latin America............................................. 23 17
Europe, Middle East and Africa............................ 11 13
</TABLE>

21
<PAGE> 22

Historically, period-to-period average selling prices for wireless handsets
have declined significantly; however, in 1996, the average selling price of
wireless handsets sold by the Company increased by approximately 3% due
primarily to an increase in sales of higher-priced digital wireless handsets.

Sales of wireless handsets, sales of related accessories and fees generated
from value-added logistics services were 88%, 11% and 1%, respectively, of net
sales for 1996. Sales of wireless handsets and related accessories were 86% and
14%, respectively, of net sales for 1995.

GROSS PROFIT. Gross profit increased by 63% to $45.8 million in 1996 from
$28.2 million in 1995, due to the increase in wireless handset sales and the
increase in the gross margin (7.8% for 1996 as compared to 6.7% for 1995). The
increase in gross margin is due to the execution of the Company's strategy to
provide higher-margin value-added logistics services, as well as increased sales
of units on which the Company earned higher margins. In addition, the Company
made a concerted effort to reduce sales to other distributors in the North and
Latin America markets. Although this disciplined change in the North and Latin
America sales mix accounted for slower growth in those markets, the result was
an enhancement in the Company's gross margin.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by 41% to $20.8 million in 1996 from $14.8
million in 1995, due primarily to the increased business activities of the
Company and acquisitions which opened new markets to the Company. The Company
increased its staff in several areas during the year, including management,
operations, sales and marketing, and information systems. These staff
enhancements were necessary to support the expanded level of business generated
by the Company. This increase is also due to increases in depreciation expense
related to investments in information systems and leasehold improvements, rent
expense due to expanded facilities and various marketing costs including travel,
promotions and commissions. Selling, general and administrative expenses, as a
percentage of net sales, remained constant at 3.5%.

INCOME FROM OPERATIONS. Income from operations increased by 87% to $25.0
million in 1996 from $13.4 million in 1995. This increase is due primarily to
increases in unit sales and the Company's ability to enhance its gross profit
and hold selling, general and administrative expenses relatively constant as a
percent of net sales.

PRO FORMA NET INCOME. Pro forma net income increased by 73% to $12.6
million in 1996 from $7.3 million in 1995. This increase is a result of
increased income from operations partially offset by interest expense relating
primarily to bank debt obtained for working capital purposes and by the income
attributable to minority interests.

Generally accepted accounting principles require that certain charges
related to pooling-of-interests transactions be expensed in the period in which
the transaction is consummated. Such charges related to the Allied Merger, in
the amount of $2.1 million net of applicable taxes, were recognized as expense
in the quarter ended June 30, 1996. Pro forma amounts exclude the effect of this
one-time charge.

Prior to the Allied Merger, Allied Communications had elected to be treated
as a Subchapter S corporation and was, therefore, not subject to federal and
state income taxes. Pro forma amounts provide for income taxes on the income not
previously taxed at the corporate level.

Pro forma net income per share increased by 38% to $0.58 in 1996 from $0.42
in 1995. For 1996, weighted average common shares outstanding were approximately
21.6 million shares as compared to approximately 17.2 million shares for 1995.
This increase is due primarily to shares issued by the Company in connection
with its acquisition of TRI's 50% ownership interest in BIL in the fourth
quarter of 1996 and the impact of the exercise of stock options and warrants.

22
<PAGE> 23

COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994

NET SALES. Net sales increased by 36% to $419.1 million in 1995 from $309.2
million in 1994 as a result of increased demand in markets outside North
America. In addition, the Company increased domestic unit volume, offsetting a
decrease in per unit prices.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------
1994 1995
---- ----
<S> <C> <C>
Net sales by division:
North America............................................. 81% 64%
Latin America............................................. 13 23
Europe, Middle East and Africa............................ 6 11
Asia-Pacific.............................................. -- 2
</TABLE>

GROSS PROFIT. Gross profit increased by 50% to $28.2 million in 1995 from
$18.8 million in 1994, due primarily to an increase in wireless handset sales
(6.7% for 1995 as compared to 6.1% for 1994). In addition, an increase in the
volume of higher margin accessory sales helped to enhance the gross margin.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by 34% to $14.8 million in 1995 from $11.1
million in 1994, due primarily to the increased level of business activity
generated by the Company. Expanded operations were supported by increases in
compensation expense, rent expense, travel costs and an increase in the
allowance for doubtful accounts.

INCOME FROM OPERATIONS. Income from operations increased by 75% to $13.4
million in 1995 from $7.7 million in 1994. This increase is due primarily to
increases in unit sales and the Company's ability to enhance its gross profit
and hold selling, general and administrative expenses relatively constant as a
percent of net sales.

PRO FORMA NET INCOME. Pro forma net income increased by 60% to $7.3 million
in 1995 from $4.6 million in 1994. This increase is a result of an increase in
income from operations partially offset by an increase in interest expense and
income taxes.

Pro forma net income per share increased by 31% to $0.42 in 1995 from $0.32
in 1994. For 1995, weighted average common shares outstanding were approximately
17.2 million shares as compared to approximately 14.3 million shares for 1994.
This increase is due primarily to the Company's October 1995 public offering and
the impact of the exercise of stock options and warrants outstanding.

QUARTERLY RESULTS OF OPERATIONS

The following table presents certain unaudited quarterly financial
information for each of the eight quarters in the two-year period ended June 30,
1997. In the opinion of the Company's management, this information has been
prepared on the same basis as the Consolidated Financial Statements appearing
elsewhere in this Prospectus and includes all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial results set
forth herein. Results of operations for any previous quarter are not necessarily
indicative of results for any future period.

23
<PAGE> 24
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1995 1995 1996 1996 1996 1996
------------- ------------ --------- -------- ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net sales................... $100,915 $129,132 $112,960 $119,896 $145,290 $211,572
Cost of sales............... 94,093 119,996 105,032 111,414 133,036 194,396
-------- -------- -------- -------- -------- --------
Gross profit................ 6,822 9,136 7,928 8,482 12,254 17,176
Selling, general and
administrative expenses... 3,712 5,147 3,677 4,090 5,105 7,977
-------- -------- -------- -------- -------- --------
Income from operations...... 3,110 3,989 4,251 4,392 7,149 9,199
Merger expenses............. -- -- -- 2,750 -- --
Net investment gain......... -- -- -- -- -- --
Interest expense, net....... 508 97 184 439 549 946
-------- -------- -------- -------- -------- --------
Income before income taxes
and minority interest..... 2,602 3,892 4,067 1,203 6,600 8,253
Income taxes................ 894 1,369 1,165 806 2,349 3,008
-------- -------- -------- -------- -------- --------
Income before minority
interest.................. 1,708 2,523 2,902 397 4,251 5,245
Minority interest in
subsidiaries' earnings.... -- -- -- -- 1,042 716
-------- -------- -------- -------- -------- --------
Net income.................. $ 1,708 $ 2,523 $ 2,902 $ 397 $ 3,209 $ 4,529
======== ======== ======== ======== ======== ========
Pro forma net income........ $ 1,583 $ 2,369 $ 2,477 $ 2,407 $ 3,209 $ 4,529
======== ======== ======== ======== ======== ========
As a percentage of net
sales:
Net sales................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Gross profit.............. 6.8 7.1 7.0 7.1 8.4 8.1
Selling, general and
administrative
expenses................ 3.7 4.0 3.2 3.4 3.5 3.8
Income from operations.... 3.1 3.1 3.8 3.7 4.9 4.3
Pro forma net income...... 1.6 1.8 2.2 2.0 2.2 2.1

<CAPTION>
QUARTER ENDED
--------------------
MARCH 31, JUNE 30,
1997 1997
--------- --------

<S> <C> <C>
Net sales................... $199,169 $220,027
Cost of sales............... 183,167 202,013
-------- --------
Gross profit................ 16,002 18,014
Selling, general and
administrative expenses... 8,096 9,040
-------- --------
Income from operations...... 7,906 8,974
Merger expenses............. -- --
Net investment gain......... 1,432 --
Interest expense, net....... 1,123 1,983
-------- --------
Income before income taxes
and minority interest..... 8,215 6,991
Income taxes................ 2,443 2,097
-------- --------
Income before minority
interest.................. 5,772 4,894
Minority interest in
subsidiaries' earnings.... 356 27
-------- --------
Net income.................. $ 5,416 $ 4,867
======== ========
Pro forma net income........ $ 5,416 $ 4,867
======== ========
As a percentage of net
sales:
Net sales................. 100.0% 100.0%
Gross profit.............. 8.0 8.2
Selling, general and
administrative
expenses................ 4.0 4.1
Income from operations.... 4.0 4.1
Pro forma net income...... 2.7 2.2
</TABLE>

The Company's sales are influenced by a number of seasonal factors
associated with consumer electronics and retail sales which tend to result in
increased volume in the latter part of the calendar year. The overall growth of
the Company's business has reduced the impact of such factors on the Company's
operating results. However, seasonality contributes to the increase in the
Company's sales in the fourth quarter of its fiscal years.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary cash requirements have been to fund increased levels
of accounts receivable and inventories and to fund capital expenditures. The
Company has historically satisfied its working capital requirements principally
through cash flow from operations, vendor financing, bank borrowings and the
issuance of equity securities.

In April 1994, the Company consummated an initial public offering of its
Common Stock, pursuant to which the Company received net proceeds of
approximately $12.1 million. The offering provided additional working capital to
fund the Company's growth and to facilitate additional opportunities.

In October 1995, the Company consummated a public offering of Common Stock
pursuant to which the Company received net proceeds of approximately $33.5
million. The net proceeds were utilized to repay amounts outstanding on the
Company's line of credit, fund capital expenditures associated with its
information systems and new corporate headquarters, and provide working capital
for acquisitions and general corporate purposes.

At June 30, 1997, the Company had working capital of approximately $167.6
million compared to working capital of approximately $143.5 million at December
31, 1996. The increase in working capital is primarily attributable to a
decrease in accounts payable. This increase was funded by an increase in bank
borrowings and the sale of the Company's investment in CellStar Corporation. The
Company also generated working capital through the exercise of stock options.

24
<PAGE> 25

Net cash used by operating activities was approximately $23.0 million for
the six months ended June 30, 1997, as compared to approximately $20.8 million
for the six months ended June 30, 1996. The increase in cash used by operating
activities for the six months ended June 30, 1997 was primarily attributable to
a decrease in accounts payable and an increase in accounts receivable, partially
offset by a decrease in inventories. Net cash provided by investing activities
was approximately $1.8 million for the six months ended June 30, 1997, as
compared to net cash used by investing activities of approximately $4.6 million
for the six months ended June 30, 1996. The cash provided by investing
activities for the six months ended June 30, 1997 was primarily attributable to
the sale of the Company's investment in CellStar Corporation, partially offset
by capital expenditures relating to the purchase of information systems
equipment and software, the expansion of the Company's operations center in
Indianapolis, Indiana, the opening of its west coast operations center in
Sparks, Nevada, the purchase of minority interests in Brightpoint China Limited,
Brightpoint (UK) Limited and Brightpoint Australia Pty Ltd. and the continued
expansion of its international operations. The cash used by investing activities
for the six months ended June 30, 1996 was primarily attributable to capital
expenditures relating to the purchase of information systems equipment and
software. Net cash provided by financing activities was approximately $23.5
million for the six months ended June 30, 1997, as compared to approximately
$30.7 million for the six months ended June 30, 1996. The net cash provided by
financing activities is primarily due to advances against the Company's line of
credit and proceeds from the exercise of stock options. At June 30, 1997, the
Company had cash and cash equivalents of approximately $16.9 million.

On June 24, 1997, the Company entered into a $200 million five-year 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"). The new facility replaced the Company's two prior
credit facilities of up to $125 million in the aggregate. The new line of credit
matures in June 2002 and generally bears interest, at the Company's option, at
(i) the greater of The First National Bank of Chicago's corporate base rate and
0.50% plus the Federal funds effective rate (the "Base Rate") or (ii) the rate
at which deposits in United States dollars or Eurocurrencies are offered by The
First National Bank of Chicago to first-class banks in the London interbank
market plus a spread ranging from 40 to 112.5 basis points (based on a leverage
ratio defined in the credit agreement) plus a spread reserve, if any, and
provides it with the ability to borrow in multiple currencies and thus to use
the facility for its global working capital needs. Borrowings by the Company's
non-United States subsidiaries will bear interest at rates negotiated with the
applicable lenders. Under its line of credit, at June 30, 1997, there was $97.5
million outstanding, an aggregate of $15.6 million in letters of credit
outstanding and $86.9 million of credit remaining available.

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.

The Company has increasingly emphasized the sale of products on open
account terms and has purchased increased levels of inventories to support an
expanding customer base, which has resulted in increased accounts receivable
days outstanding and a decrease in inventory turns. The Company believes that
the ability to offer these credit terms provides it with a competitive
advantage.

The Company seeks to maintain an average of approximately 30 days of
inventory on hand in addition to making opportunistic spot buys. These spot buys
occur frequently at year end and can cause inventories at the end of the year to
be higher on a relative basis than at other times during the year.

At June 30, 1997, the Company's allowance for doubtful accounts was $2.2
million, which the Company believes is currently adequate for the size and
nature of its receivables. Bad debt expense accounted for less than 1.0% of the
Company's net sales for 1995, 1996 and the six months ended June 30, 1997.
Nevertheless, delays in collection or the uncollectibility of accounts
receivable could have an adverse effect on the Company's liquidity and working
capital position. In connection with the Company's expanded operations, the

25
<PAGE> 26

Company has offered open account terms to additional customers, which subjects
the Company to increased credit risk, particularly in foreign markets. The
Company seeks to minimize losses on credit sales by closely monitoring its
customers' credit worthiness and by seeking to obtain letters of credit or
similar security in connection with certain open account sales to customers
located in foreign markets.

The Company believes that the net proceeds to be received by it from the
Offerings, together with projected cash flow from operations and existing
capital resources, including cash and borrowings available under its line of
credit, will be sufficient to satisfy the Company's anticipated working capital
requirements and expansion plans for at least 12 months following the
consummation of the Offerings. The Company had no material commitments for
capital expenditures as of June 30, 1997.

INFLATION AND FOREIGN CURRENCY

Inflation has historically not had a material effect on the Company's
operations. The Company frequently transacts business in currencies other than
its functional currency and, therefore, experiences some risk to exchange rate
fluctuations. Historically, the Company has not experienced significant exchange
rate gains or losses. Increasing trade activity in foreign markets could subject
the Company to greater inflationary pressures and more significant exchange rate
gains or losses from these arrangements.

26
<PAGE> 27

BUSINESS

GENERAL

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.

WIRELESS COMMUNICATIONS INDUSTRY

The wireless communications industry provides voice and data communications
primarily through cellular telephone, personal communications services ("PCS"),
personal communications networks ("PCN"), satellite, enhanced specialized mobile
radio ("ESMR") and paging services. Among other factors, economic development,
advances in systems technology and equipment, the proliferation of manufacturers
and the increased number of network operators have increased consumer acceptance
and driven dramatic increases in worldwide demand for wireless communications
equipment and services.

In recent years, the markets for wireless communications equipment and
services have expanded significantly. From 1995 to 1996, the number of worldwide
wireless subscribers increased by 52 million, or 60%, to approximately 140
million. 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 (with Sweden, Hong
Kong and Japan having the highest penetration rates at about 28%, 22% and 18%,
respectively, while countries such as China and India had penetration rates of
only .57% and .03%, respectively), reflecting significant worldwide
opportunities for growth within the wireless communications industry. According
to a leading independent industry research group, the number of worldwide
subscribers is expected to grow by more than 250 million subscribers, to
approximately 400 million subscribers, by the end of 2000. The Company believes
it is well positioned to take advantage of the following major trends taking
place within the industry.

NEW NETWORK OPERATORS. The number of network operators in each market has
increased and is expected to continue to increase as a result of increasing
deregulation within the wireless communications industry and the introduction of
new technological applications such as PCS and satellite-based communications
systems. For example, in the United States, prior to 1995, the United States
Federal Communications Commission (the "FCC") allowed only two network operators
to provide cellular service in any one service area. In connection with the
auctioning of PCS licenses in 1995 and 1996, the FCC permitted the addition of
up to six PCS network operators in every service area. In addition, the FCC has
awarded three mobile satellite licenses to entities that are investing in
satellites, which will enable them to provide wireless phone, data, fax and
paging on a global basis. The emergence of these, and other, new wireless
communications technologies and services is expected to increase both the number
of wireless network operators in each market and the services provided,
including seamless roaming, increased service coverage, improved signal quality
and greater data transmission capacity. This increase in the number of network
operators, together with the increased number of resellers of wireless
communication services in certain markets, is expected to intensify competition
for new and existing subscribers, driving growth in subscribers and the market
for wireless communications equipment.

27
<PAGE> 28

INCREASING PENETRATION OF WORLDWIDE MARKETS. The Company expects that
continuing demand for wireless services will drive increased penetration of
markets worldwide. In certain markets, such as certain Asia-Pacific and Latin
American countries, which are currently characterized by relatively low
penetration, such growth is expected to be driven by economic growth, increased
service availability and the lower cost of service compared to conventional
wireline telephony systems. In addition, certain markets such as Sweden,
Australia, Hong Kong, Japan and the United States, which are currently
characterized by higher market penetrations, are also expected to grow,
primarily as a result of increasing deregulation, the availability of additional
spectrum frequencies, the allocation of new network operator licenses, increased
competition and the emergence of new wireless technologies.

TRANSITION FROM ANALOG TO DIGITAL. The wireless communications industry has
historically provided telecommunications services primarily through analog
technology. However, new wireless networks have increasingly been built around
digital technologies, which provide increased network capacity, more
functionality, better voice quality and greater security/privacy than analog
technologies. By the time digital technologies became commercially available in
the United States during the latter part of 1996, cellular systems in the United
States had, for the most part, already been built to full capacity (using analog
technologies). Consequently, the first proponents of the new digital
technologies in the United States were the PCS network operators, as they had
not yet built costly network infrastructures. These PCS providers now compete
with incumbent cellular network operators in the United States for wireless
subscribers. In addition, incumbent analog cellular network operators in the
United States are gradually beginning to shift their subscribers toward digital
coverage, a shift that, to a great degree, has already occurred in many markets
within the Company's Asia-Pacific and Europe, Middle East and Africa divisions.

PROLIFERATION OF MANUFACTURERS. With the opportunities presented by a
rapidly expanding market for wireless communications equipment, the transition
from analog to digital technology, and the penetration of the mass consumer
market, many new manufacturers are expected to produce wireless handsets and
accessories, including certain manufacturers who have historically been
successful in providing consumer electronics to the mass consumer market. The
greater number of manufacturers is expected to heighten competition and most
likely will provide consumers with lower handset prices, broader selection and
more end-market channels, resulting in higher product turnover by end users.

OUTSOURCING. As the variety of handset models expands, digital technology
evolves and distribution migrates from the agent/dealer network to mass
retailers, incumbent cellular network operators are switching from in-house
distribution to independent distribution services in order to lower overall
costs. In order to maintain their resources for marketing, sales and customer
retention, new cellular and PCS network operators are also increasingly
outsourcing their handset distribution, fulfillment and inventory management
functions (as opposed to building distribution infrastructure and committing
limited working capital to inventory maintenance). At the same time, at the
other end of the industry, large incumbent handset manufacturers are starting to
outsource some of their channel management functions and utilize value-added
logistics services as a means of simplifying and reducing the cost of their
worldwide distribution systems. Finally, as competition increases and prices
decrease, vendors and network operators are targeting the growing consumer
segment through mass retail channels, requiring greater levels of fulfillment
services in order to address the logistical challenges of supporting mass
retailers and consumer electronics outlets.

GROWTH STRATEGY

The Company's primary strategies for building on its position as a global
leader in providing services to the growing wireless communications industry
include the following:

CAPTURE GROWING OUTSOURCING MARKET. The Company believes that increasing
government deregulation, competition and technological developments within the
wireless communications industry have caused manufacturers, network operators
and resellers to focus available internal resources on their core competencies,
and to outsource an increasing number of their product management functions to
specialists such as the Company, in an effort to reduce costs, increase
productivity and improve quality. The Company has strategically positioned
itself to capitalize on the growing trend toward outsourcing by offering a wide
variety

28
<PAGE> 29

of distribution and value-added logistics services that effectively and
efficiently move wireless handsets and accessories through market channels. See
"-- Services."

EXPAND WORLDWIDE PRESENCE. In the six months ended June 30, 1997, the
Company's sales in markets outside of North America represented approximately
69% of its total net sales, compared to 51%, 36% and 18% for the years ended
December 31, 1996, 1995 and 1994, respectively. These increases are the direct
result of the Company's strategy of focusing on growing markets worldwide. In
connection with its global expansion, the Company has created an in-country
presence in certain key markets throughout the world and intends to continue to
expand its international presence through internal growth at existing locations,
mergers and acquisitions, joint ventures, other strategic alliances, and
start-ups in new locations. In the last 18 months, the Company has been able to
significantly expand its global presence through the acquisition of Allied
Communications (United States and Latin America), the acquisition of the
business and net assets of each of Technology Resources International Limited
(China, Hong Kong and United Kingdom), Hatadicorp Pty Ltd. (Australia) and
Telnic AB (Sweden) and the formation of each of Brightpoint South Africa (Pty)
Limited and Brightpoint Philippines, Inc. In addition, the Company is in the
process of forming Brightpoint Middle East FZE to be located in the Jebel Ali
Free Zone of Dubai, United Arab Emirates.

LEVERAGE THE COMPANY'S EXPERIENCE AND EXPERTISE WITH NEW WIRELESS
COMMUNICATIONS TECHNOLOGIES. There are continuously new, often incompatible,
wireless communications technologies and applications being introduced into the
wireless communications market, such as wireless local loop and satellite-based
communications, which are expected to contribute to future subscriber growth.
The Company's value-added logistics capabilities are, as a result of their
versatility, flexibility and broad-based application, virtually indifferent to
changes in telecommunications technologies and should integrate well with the
needs of the manufacturers, network operators and resellers of new wireless
products and services. In addition, the Company already provides distribution
services for, and has established strong relationships with, many of the
wireless communications equipment manufacturers which the Company expects to
produce products utilizing these emerging technologies and applications,
including Nokia Mobile Phones Ltd. ("Nokia"), Ericsson Inc. ("Ericsson"),
Philips Consumer Communications ("Philips") and Siemens Ltd. ("Siemens"). As a
result, the Company believes that it is well-positioned as a provider of
distribution and value-added logistics services to participate in the
proliferation of the new wireless communications technologies and products
currently entering the market or being developed.

MAINTAIN OPERATIONAL EXCELLENCE. The Company continuously seeks to improve
and streamline its distribution and process handling systems 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's
operational excellence, achieved through its business systems and procedures,
proprietary information systems, state-of-the-art facilities and strong regional
division management teams, allows the Company to develop strong relationships
with both the leading manufacturers of wireless communications equipment and its
other suppliers and customers. The Company has recently designed and implemented
a detailed business system and work flow procedures plan which the Company
believes enhances its ability to perform, and monitor the performance of, its
distribution and value-added logistics services. The Company's comprehensive
information systems, which the Company intends to integrate throughout its
global network, have given the Company the platform to develop many proprietary
solutions for its customers. These systems provide full electronic data
interchange capabilities and include proprietary modules for order fulfillment,
returns administration and a flexible service delivery system in support of the
Company's value-added logistics services. In the first quarter of 1997, the
Company completed an expansion of its state-of-the-art operations center in
Indianapolis, Indiana, increasing the total size of such facility to 182,400
square feet and giving it the capacity necessary to assemble, package and
fulfill approximately 12,000 units per day. In the first quarter of 1997, the
Company also opened an operations center in Sparks, Nevada, which together with
the Company's three other United States operations centers, gives the Company
the ability to serve every customer in the continental United States with
two-day ground rates. The Company has also entered into leases for additional
operations centers in South Africa and the Philippines, bringing to 11 the total
number of operations centers currently operated by the Company.

29
<PAGE> 30

SERVICES

The Company has strategically positioned itself to capitalize on the
growing trend toward outsourcing by offering distribution and value-added
logistics services that effectively and efficiently move wireless handsets and
accessories through market channels. The Company has become one of the leading
suppliers of such services due primarily to its thorough understanding of the
needs within each distribution channel and its development of the knowledge and
resources necessary to create successful solutions. The Company currently
provides services for some of the leading manufacturers, network operators (both
cellular and PCS) and resellers in the wireless communications market.

DISTRIBUTION SERVICES. The Company's distribution services include the
purchasing, marketing, selling, warehousing, picking, packing, shipping, and
"just-in-time" delivery of a broad selection of wireless communications products
from leading manufacturers. The Company continually reviews and evaluates
wireless communications products in determining the mix of products purchased
for resale and seeks to acquire distribution rights for products which the
Company believes have the potential for significant market penetration.

The products distributed by the Company include a variety of handsets
designed to work on substantially all operating platforms (including analog
platforms, such as AMPS, TACS and NMT, and digital platforms, such as GSM and
TDMA) and feature prominent brand names such as Nokia, Ericsson, Philips,
Siemens and Motorola. For the years ended December 31, 1995 and 1996 and the six
months ended June 30, 1997, approximately 86%, 88% and 89%, respectively, of the
Company's net sales were derived from handset sales.

In addition, the Company distributes handset accessories, such as
batteries, battery eliminators, plug-in chargers, cases, antennas and
"hands-free" kits. Among other things, the Company purchases original equipment
manufacturer ("OEM") accessories, either prepackaged or in bulk, and resells
them "as-is"; it purchases OEM accessories in bulk and packages them according
to its customers' specifications; it purchases after-market accessories and
packages them according to its customers' specifications; and it packages and
sells OEM and after-market accessories under its own BrightLinkTM name.
Accessories typically carry higher margins than handsets. For the years ended
December 31, 1995 and 1996 and the six months ended June 30, 1997, sales of
accessories accounted for approximately 14%, 11% and 7%, respectively, of the
Company's net sales.

VALUE-ADDED LOGISTICS SERVICES. The Company's value-added logistics
services include, among others, inventory management, product fulfillment,
programming, private labeling, light assembly, telemarketing, product warranty,
repair and refurbishment and end-user support services. The Company also
procures wireless handsets and accessories for its customers using the Company's
own sources or the customers' specified vendors. In addition, the Company
performs packaging and kitting functions for its customers, whereby it receives
orders, either directly from customers or from customers' end-users, via
electronic data interchange, and then, on a "just-in-time" basis, makes shelf
ready kits in customized packaging prescribed by its customers, in satisfaction
of the orders. For certain of its customers, the Company also finances purchases
of wireless handsets and accessories up to an agreed upon credit limit. When the
Company provides such off-balance sheet financing, it assumes the financial risk
but typically not the risk of obsolescence. When the customer consigns products
to the Company for order fulfillment, the financial risk and the risk of
obsolescence both typically lie completely with the customer. Recently, the
Company has also entered into a contract to provide a network operator with a
wide range of value-added logistics services relating to its new wireless
prepaid program in South Africa, including various inventory management, product
fulfillment and switch management services, and expects to enter into similar
arrangements in the Philippines and other markets in the future.

During the six months ended June 30, 1997, the Company's fees for
value-added logistics services were approximately $15 million (4% of net sales)
as compared to approximately $353,000 (less than 1% of net sales) in the six
months ended June 30, 1996. Because the fees for such services have much higher
margins than those associated with handset and accessory sales, they represent a
higher than proportionate percentage of the Company's operating profits. In
addition, the Company believes that its value-added logistics services will both
expand the Company's customer base and create new revenue streams from its
existing customers.

30
<PAGE> 31

CUSTOMERS

The Company provides distribution and value-added logistics services to a
customer base of more than 10,000 network operators, manufacturers, agents,
resellers, dealers and retailers. For the years ended December 31, 1995 and 1996
and the six months ended June 30, 1997, aggregate sales of handsets and
accessories to the Company's five largest customers accounted for approximately
17%, 15% and 25%, respectively, of the Company's net sales. During the year
ended December 31, 1996, no single customer accounted for more than 6% of the
Company's net sales. During the six months ended June 30, 1997, product sales to
Success World Limited, an exporter in Hong Kong, accounted for approximately 12%
of the Company's net sales and no other customer accounted for more than 5% of
the Company's net sales.

The Company generally sells its products pursuant to customer purchase
orders and ships product orders received by 4:00 P.M. local time the same day.
Unless otherwise requested, substantially all of the Company's products are
delivered by common carriers within two days of receipt of customer orders.
Because orders are filled shortly after receipt, backlog is not material to the
Company's business. The Company's value-added logistics services are typically
provided pursuant to two-year, renewable agreements.

PURCHASING AND SUPPLY

The Company has established key relationships with leading manufacturers of
wireless communications equipment. The Company generally negotiates directly
with manufacturers and suppliers in order to ensure adequate inventories of
popular brand name products on favorable pricing terms. In 1996, the Company
purchased its products from more than 45 suppliers. Inventory purchases are
based on quality, price, service, customer demand, product availability and
brand name recognition. Certain of the Company's suppliers provide favorable
purchasing terms to the Company, including price protection and cooperative
advertising and marketing allowances. Product manufacturers typically provide
warranties which the Company extends to its customers.

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. For these periods, none
of the Company's other suppliers accounted for more than 10% of product
purchases. Failure or delay by these or other suppliers in supplying competitive
products on favorable terms, or at all, 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. See "-- Competition."

The Company maintains agreements with certain of its significant suppliers,
including Nokia, Ericsson and Philips. The most recent agreement, with Nokia,
provides for distribution services in Hong Kong and China. These agreements are
generally non-exclusive, require the Company to satisfy minimum purchase
requirements and can be terminated on short notice by either party. The Company
purchases products from other manufacturers and dealers pursuant to purchase
orders placed from time to time in the ordinary course of business. The Company
generally places orders to its suppliers by facsimile on a daily basis. Purchase
orders are typically filled within one to 21 days and products are shipped to
the Company's warehouses by common carrier. The Company believes that its
relationships with its suppliers are good.

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<PAGE> 32

SALES AND MARKETING

The Company's sales and marketing efforts are coordinated in each of its
four regional divisions by a Managing Director for that particular division.
Because of the service-oriented nature of the Company's business, these
executives devote a substantial amount of their time to developing and
maintaining relationships with the Company's customers in addition to managing
the overall operations of the division. Each division's sales offices are
managed by a Managing Director who reports to the Managing Director of the
division and is responsible for the daily sales and operations of each sales
office. Each division has telemarketers who specialize in or focus on telephone
sales to a particular type of customer (e.g. network operator, dealer, reseller,
other distributor, retailer, etc.). In addition, the Company markets its
value-added logistics services through the Managing Director in each of its four
regional divisions and through dedicated sales personnel. Including support
personnel, the Company had approximately 141 employees involved in sales and
marketing at June 30, 1997, including 26 in its Asia-Pacific division, 76 in its
North America division, 33 in its Europe, Middle East and Africa division and 6
in its Latin America division.

The Company believes that product recognition by customers and consumers is
an important factor in the marketing of the products sold by the Company.
Accordingly, the Company promotes itself and certain of its product lines
through advertising in trade publications and attendance at international,
national and regional trade shows, as well as through direct mail solicitation,
broadcast faxing and its telemarketing activities. The Company's manufacturers
and dealers use a variety of methods to promote their products directly to
consumers, including print and media advertising based on product features.

COMPETITION

The Company operates in a highly competitive market and believes that such
competition will intensify in the future. The markets for wireless
communications products are characterized by intense price competition and
significant price erosion over the life of a product. The Company competes
principally on the basis of value (in terms of price, time and reliability),
service and product availability. The Company competes with numerous
well-established manufacturers and wholesale distributors of wireless equipment,
including the Company's customers and suppliers, as well as with wireless
network operators, including the Company's customers, and logistics service
providers, some of which possess substantially greater financial, marketing,
personnel and other resources than the Company. Certain of these competitors
have the financial resources necessary to withstand substantial price
competition and implement extensive advertising and promotional campaigns, both
generally and in response to efforts by additional competitors to enter into new
markets or introduce new products.

The wireless communications equipment distribution industry has, in the
past, been characterized by low barriers to entry. However, as the market
requirement shifts from pure distribution services to a mix of distribution
services and value-added logistics services, entry barriers are expected to rise
due to the increased cost of infrastructure, the expanded human resource
requirement and the advanced management and information systems capabilities
that the value-added logistics services segment of the business mandates. The
Company's ability to continue to compete successfully will be largely dependent
on its ability to anticipate and respond to various competitive factors
affecting the industry, including new or changing outsourcing requirements, new
products which may be introduced, changes in consumer preferences, demographic
trends, international, national, regional and local economic conditions
(particularly recessionary conditions adversely affecting consumer spending) and
discount pricing strategies and promotional activities by competitors.

In the Asia-Pacific wireless product distributor market, the Company's
primary competitors are national carriers that have retail outlets with direct
end-user access and United States and foreign-based exporters and distributors,
including CellStar Corporation ("CellStar"), Techglory International Ltd. (in
Hong Kong) and Telepacific Pty Limited (in Australia). In addition, the Company
competes for logistics fees with agents and subagents of the network operators.
Competitors of the Company in its North America division include network
operators and other dedicated wireless distributors such as CellStar and Pana
Pacific, Inc. The Company also competes with logistics service providers in its
North America operations, such as United Parcel Service of America, Inc. and
TESSCO Technologies Incorporated. In the Company's Europe, Middle

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<PAGE> 33

East and Africa division its competitors include wireless equipment
manufacturers who sell directly to the region's network operators and retailers,
as well as the network operators themselves and other distributors, such as
20/20 Logistics Ltd. (formerly Caudwell Communications), European Telecom plc
and Banner Twin Choice plc. In the Latin America division the Company competes
primarily with CellStar and various other distributors.

The markets for wireless communications products 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 use of
alternative wireless technologies, including wireless local loop and
satellite-based communications systems, may reduce demand for existing cellular
and PCS products. Upon widespread commercial introduction, new wireless
technologies could materially change the types of products sold by the Company
and its suppliers and result in significant price competition. In addition,
products that reach the market outside of normal distribution channels, such as
"gray market" resales (e.g., unauthorized or illegal resales, which may avoid
applicable duties and taxes), may also have an adverse impact on the Company's
operations.

Although the Company believes that the scope and efficiency of its
value-added logistics services will provide it with a competitive advantage in
the distribution sector of the industry as well, there can be no assurance that
the Company will be able to continue to compete successfully in the future.

INFORMATION SYSTEMS

The Company's continued operational excellence will be partially dependent
on the functionality, performance and utilization of its information systems. In
the first quarter of 1996, the Company successfully implemented a comprehensive
Informix-based information system which currently maintains financial and
management controls for its operations through the use of a centralized
accounting system and a computerized management information system for its North
and Latin America divisions. Since the implementation of the system, the Company
has invested approximately $12.3 million in continued development and
enhancement of the system to provide electronic data interchange capabilities,
create proprietary solutions for its customers and provide a flexible service
delivery system in support of its value-added logistics services and intends to
use additional funds to integrate this information system throughout its four
divisions. The Company's information systems department has grown substantially
in resources, both through increased software and hardware and additional
employees. At June 30, 1997, there were 29 employees in the Company's
information systems department.

EMPLOYEES

As of June 30, 1997, the Company had 543 employees, 88 in its Asia-Pacific
division, 350 in its North America division, 87 in its Europe, Middle East and
Africa division and 18 in its Latin America division. Of these employees,
approximately 25 were in executive positions, 141 were engaged in sales and
marketing, 255 were in service operations and 122 were in administration. None
of the Company's employees are covered by a collective bargaining agreement. The
Company believes that its relations with its employees are good.

FACILITIES

The Company provides its distribution and value-added logistics services
from its operations centers. The Company's headquarters and largest operations
center are located in a 182,400 square foot facility in Indianapolis, Indiana.
This facility includes approximately 142,400 square feet of operations center
space.

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<PAGE> 34

Including this Indianapolis facility, the Company leases the following
operations centers and/or sales office facilities (for an aggregate monthly rent
of approximately $178,000):

<TABLE>
<CAPTION>
INITIAL LEASE
REGIONAL DIVISION FACILITY TYPE SQUARE FOOTAGE EXPIRATION DATE
----------------- ----------------- -------------- ----------------
<S> <C> <C> <C>
ASIA-PACIFIC:
Sydney, Australia........................ Operations/Sales 16,038 May 2001
Manila, Philippines...................... Operations/Sales 11,410 May 2000
Hong Kong................................ Operations Center 1,800 August 1997
Hong Kong................................ Sales Office 1,625 April 1998
Beijing, China........................... Sales Office 1,472 December 1997
NORTH AMERICA:
Indianapolis, Indiana(1)................. Operations/Sales 182,400 December 2006
Indianapolis, Indiana.................... Operations Center 18,000 December 1998
Sparks, Nevada........................... Operations Center 65,000 February 2002
Philadelphia, Pennsylvania............... Operations Center 22,000 December 1999
EUROPE, MIDDLE EAST AND AFRICA:
Manchester, England...................... Operations/Sales 16,589 December 2001
Johannesburg, South Africa............... Operations/Sales 16,214 April 2000
Gothenburg, Sweden....................... Operations/Sales 8,123 September 1999
LATIN AMERICA:
Miami, Florida(2)........................ Operations/Sales 14,415 August 1998
</TABLE>

- ------------
(1) The lease term for approximately 92,400 square feet of this facility expires
on December 31, 2006 and for approximately 90,000 square feet expires on
January 31, 2006, each of which terms may be renewed for two five-year
periods. At the end of the initial lease term, the Company has an option to
purchase the leased premises for approximately $11.5 million.

(2) The Company's Miami, Florida office also services its North America
operations.

The Company believes that its existing facilities are adequate for its
current requirements and that suitable additional space will be available as
needed to accommodate future expansion of its operations.

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<PAGE> 35

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Board of Directors is divided into three classes serving staggered
three-year terms. Executive officers are elected by, and serve at the discretion
of, the Board of Directors. The directors and executive officers of the Company
are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robert J. Laikin(1).................... 34 Chairman of the Board and Chief Executive Officer
J. Mark Howell(2)...................... 32 President, Chief Operating Officer and Director
T. Scott Housefield(3)................. 39 Executive Vice President and Director
Phillip A. Bounsall.................... 36 Executive Vice President, Chief Financial Officer
and Treasurer
Steven E. Fivel........................ 36 Executive Vice President, General Counsel and
Secretary
Robert Picow(1)(4)..................... 42 Vice Chairman of the Board
Joseph Forer(2)(4)..................... 47 Director
Stephen H. Simon(2).................... 31 Director
John W. Adams(3)....................... 48 Director
Robert F. Wagner(1).................... 62 Director
Rollin M. Dick(1)...................... 65 Director
Steven B. Sands(3)..................... 38 Director
</TABLE>

- ---------------
(1) Class II director, term expires in 1999

(2) Class I director, term expires in 1998

(3) Class III director, term expires in 2000

(4) Messrs. Picow and Forer, the Selling Stockholders, will be resigning as
directors effective as of the consummation of the Offerings. The Company has
not yet identified replacement directors to fill these pending vacancies.
Mr. Forer will continue as the Company's Director of International Business
Development following the Offerings.

Robert J. Laikin, a founder of the Company, has been a director of the
Company since its inception in August 1989. Mr. Laikin has been Chairman of the
Board and Chief Executive Officer of the Company since January 1994. Mr. Laikin
was President of the Company from June 1992 until September 1996 and Vice
President and Treasurer of the Company from August 1989 until May 1992. From
July 1986 to December 1987, Mr. Laikin was Vice President and, from January 1988
to February 1993, President of Century Cellular Network, Inc., a company engaged
in the retail sale of cellular telephones and accessories.

J. Mark Howell has been a director of the Company since October 1994. Mr.
Howell has been President of the Company since September 1996, Chief Operating
Officer of the Company from September 1995 and was Executive Vice President,
Finance, Chief Financial Officer, Treasurer and Secretary of the Company from
July 1994 until September 1996. From July 1992 until joining the Company, Mr.
Howell was Corporate Controller for ADESA Corporation, a company which owns and
operates automobile auctions in the United States and Canada. Prior thereto, Mr.
Howell was a Manager with Ernst & Young LLP.

T. Scott Housefield has been a director of the Company since January 1993
and Executive Vice President since July 1994. From January 1993 to June 1994,
Mr. Housefield was Chief Financial Officer of the Company and, from January 1994
to July 1994, was Chief Operating Officer of the Company. Prior thereto, Mr.
Housefield owned and operated Housefield Marketing Corp., a company engaged in
the wholesale distribution of textiles.

Phillip A. Bounsall has been Executive Vice President, Chief Financial
Officer and Treasurer of the Company since October 1996. From March 1994 until
September 1996, Mr. Bounsall was Chief Financial Officer of Walker Information,
Inc., a provider of customer satisfaction measurement and other information
services. Previously, Mr. Bounsall was a senior manager with Ernst & Young LLP,
where he worked for 12 years.

35
<PAGE> 36

Steven E. Fivel has been Executive Vice President, General Counsel and
Secretary of the Company since January 1997. From December 1993 until January
1997, Mr. Fivel was an attorney with SDG Administrative Services Partnership,
L.P., an affiliate of Simon DeBartolo Group and a publicly-held real estate
investment trust. From February 1988 to December 1993, Mr. Fivel was an attorney
with Melvin Simon & Associates, Inc., a privately-held shopping center
development company.

Robert Picow has been a director of the Company and Vice Chairman of the
Board of Directors of the Company since June 1996. Mr. Picow was President of
the Company's North America division from June 1996 until October 1996. He is
currently a private investor. Prior to their merger with the Company, Mr. Picow
was a founder of Allied Communications, Inc., Allied Communications of Georgia,
Inc. and Allied Communications of Illinois, Inc. and co-founder of Allied
Communications of Florida, Inc. and Allied Communications of Puerto Rico, Inc.
Mr. Picow served as Chairman and Chief Executive Officer of Allied
Communications, Inc., Allied Communications of Illinois, Inc. and Allied
Communications of Georgia, Inc. from their inception in 1984, 1993 and 1992,
respectively.

Joseph Forer has been a director of the Company since June 1996 and the
Company's Director of International Business Development since June 1997. From
June 1996 to June 1997, Mr. Forer was the Managing Director of the Company's
Latin America division. Prior to their merger with the Company, Mr. Forer was a
co-founder of Allied Communications of Florida, Inc. and Allied Communications
of Puerto Rico, Inc., as well as President and a director of such companies from
1992 and 1994, respectively. From 1989 until joining Allied Communications, Mr.
Forer served as Executive Vice President of Cellular World, Inc., a distributor
of cellular telephone and paging equipment.

John W. Adams has been a director of the Company since April 1994. Since
October 1983, Mr. Adams has been Vice President of Browning Investments, Inc., a
commercial real estate development company. Mr. Adams is a trustee of Century
Realty Trust, a publicly-held real estate investment trust.

Robert F. Wagner has been a director of the Company since April 1994. Mr.
Wagner has been engaged in the practice of law with the firm of Lewis & Wagner
since 1973.

Stephen H. Simon has been a director of the Company since April 1994. Mr.
Simon has been President and Chief Executive Officer of Melvin Simon &
Associates, Inc., a privately-held shopping center development company, since
February 1997. From December 1993 until February 1997, Mr. Simon was Director of
Development for SDG Administrative Services Partnership, L.P., an affiliate of
Simon DeBartolo Group and a publicly held real estate investment trust. From
November 1991 to December 1993, Mr. Simon was Development Manager of Melvin
Simon & Associates, Inc.

Rollin M. Dick has been a director of the Company since April 1994. Since
February 1986, Mr. Dick has been Executive Vice President and Chief Financial
Officer of Conseco, Inc., a publicly-held life insurance holding company. Mr.
Dick is also a director of Conseco, Inc., American Life Holdings, Inc., a
publicly traded life insurance holding company, and General Acceptance
Corporation, a publicly-held automotive finance company.

Steven B. Sands has been a director of the Company since May 1994. Since
1990, Mr. Sands has been Co-Chairman and Chief Executive Officer of Sands
Brothers & Co., Ltd., an investment banking firm and one of the Representatives
for the Offerings. Mr. Sands is a director of Semiconductor Packaging Materials
Co., Inc., a semiconductor components manufacturer; Command Security Corp., a
provider of security guards; and The Village Green Bookstore, Inc., a bookstore
owner and operator, each a publicly-held company. See "Underwriting."

BOARD COMMITTEES

During the fiscal year ended December 31, 1996, the Board of Directors held
nine meetings. Six of the meetings were attended by all of the directors, either
in person or by telephone and three meetings were attended by all directors with
the exception of one meeting missed by each of Messrs. Simon, Wagner and Adams.
In addition, the Board took other action by unanimous written consent in lieu of
a meeting. The Company has a Compensation Committee of the Board of Directors
comprised of Messrs. Wagner and Adams. The Compensation Committee held three
meetings during the fiscal year ended December 31, 1996. The Company has an
Audit Committee which supervises the audit and financial procedures of the
Company.

36
<PAGE> 37

The Audit Committee is comprised of Messrs. Dick and Simon. The Audit Committee
of the Board of Directors held two meetings during the fiscal year ended
December 31, 1996. The Company does not have a nominating committee. The Board
of Directors has also designated an Executive Committee which meets
periodically, as needed, and is comprised of Messrs. Dick, Howell, Laikin and
Wagner.

DIRECTOR COMPENSATION

For the fiscal year ended December 31, 1996, each non-employee director
received cash compensation of $5,000 per annum and $1,500 for each meeting of
the Board of Directors attended. For the fiscal year ending December 31, 1997,
each non-employee director will receive $10,000 per annum, $2,500 for each
meeting of the Board of Directors attended, and $1,000 for each meeting of a
committee of the Board of Directors attended. The Company has adopted a
Non-employee Director Stock Option Plan (the "Director Plan") pursuant to which
non-employee directors are eligible to receive options to purchase an aggregate
of 468,750 shares. The Director Plan provides that eligible directors
automatically receive a grant of options to purchase 10,000 shares of Common
Stock upon first becoming a director and, thereafter, an annual grant, in
January of each year, of options to purchase 4,000 shares. All of such options
are granted at fair market value on the date of grant and are exercisable as to
all of the shares covered thereby commencing one year from the date of grant. To
date, the Company has granted to each of Messrs. Adams, Wagner, Simon, Dick and
Sands options to purchase 45,312 shares of Common Stock, and has granted to Mr.
Picow options to purchase 5,000 shares of Common Stock, pursuant to the Director
Plan. During the year ended December 31, 1996, the Company granted options to
purchase 7,500 shares at an exercise price of $7.94 per share (after all stock
splits) to each of Messrs. Adams, Wagner, Simon, Dick and Sands. See "-- Stock
Option Plans."

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table discloses for the periods presented the compensation
for the person who served as the Company's Chief Executive Officer and for each
of the other executive officers of the Company whose total compensation exceeded
$100,000 for the Company's fiscal year ended December 31, 1996 (the "Named
Executives"):

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
---------------------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#)
--------------------------- ---- --------------- --------------- -------------
<S> <C> <C> <C> <C>
Robert J. Laikin............................... 1996 $ 180,000 $ 200,000 375,000
Chief Executive Officer 1995 120,000 105,000 292,968
1994 67,500 100,000 117,188

J. Mark Howell................................. 1996 150,000 175,000 375,000
President and Chief Operating Officer 1995 90,000 85,000 175,780
1994 31,250 75,000 117,187

T. Scott Housefield............................ 1996 150,000 175,000 375,000
Executive Vice President 1995 90,000 60,000 58,593
1994 50,000 45,000 58,593

Phillip A. Bounsall............................ 1996 26,042(1) 125,000(2) 93,750
Executive Vice President and Chief Financial 1995 -- -- --
Officer 1994 -- -- --
</TABLE>

- ---------------
(1) Mr. Bounsall's employment with the Company commenced on October 14, 1996.

(2) Includes a signing bonus of $100,000.

37
<PAGE> 38

OPTION GRANTS IN LAST FISCAL YEAR

The following table provides information with respect to individual stock
options granted during fiscal 1996 to each of the Named Executives:

<TABLE>
<CAPTION>
% OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------------
NAME GRANTED(1) YEAR ($/SH) DATE 5% 10%
---- ---------- ---------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Laikin.......... 375,000 23.2% $ 12.46 10/04/01 $1,290,926 $2,852,608
J. Mark Howell............ 375,000 23.2% 12.46 10/04/01 1,290,926 2,852,608
T. Scott Housefield....... 375,000 23.2% 12.46 10/04/01 1,290,926 2,852,608
Phillip A. Bounsall....... 93,750 5.8% 12.46 10/04/01 322,731 713,152
</TABLE>

- ---------------

(1) Options were granted under the Company's 1996 Stock Option Plan and are
exercisable as to one-third of the shares covered thereby on the first,
second and third anniversaries of the date of grant. See "-- Stock Option
Plans."

(2) The potential realizable value columns of the table illustrate values that
might be realized upon exercise of the options immediately prior to their
expiration, assuming the Company's Common Stock appreciates at the
compounded rates specified over the term of the options. These numbers do
not take into account provisions of options providing for termination of
the option following termination of employment or nontransferability of the
options and do not make any provision for taxes associated with exercise.
Because actual gains will depend upon, among other things, future
performance of the Common Stock, there can be no assurance that the amounts
reflected in this table will be achieved.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

The following table sets forth information concerning each exercise of
stock options by each of the Named Executives during the fiscal year ended
December 31, 1996 and the value of unexercised stock options held by the Named
Executives as of December 31, 1996.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1996 AT DECEMBER 31, 1996(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Laikin.............. -- -- 332,032 453,125 $6,067,000 $5,512,000
J. Mark Howell................ 117,188 $968,750 39,063 453,125 630,000 5,512,000
T. Scott Housefield........... -- -- 58,594 375,000 1,016,000 4,253,000
Phillip A. Bounsall........... -- -- -- 93,750 -- 1,063,000
</TABLE>

- ------------

(1) Year-end values for unexercised in-the-money options represent the positive
spread between the exercise price of such options and the year-end market
value of the Common Stock.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Section 145 of the Delaware General Corporation Law ("DGCL") contains
provisions entitling the Company's directors and officers to indemnification
from judgments, fines, amounts paid in settlement and expenses (including
attorneys' fees) actually and reasonably incurred as the result of an action,
suit or proceeding in which they may be involved by reason of having been a
director or officer of the Company. In its Certificate of Incorporation, the
Company has included a provision that limits the personal liability of its
directors to the Company or its stockholders for monetary damages arising from a
breach of their fiduciary

38
<PAGE> 39

duties as directors. This provision limits a director's liability except where
such director (i) breaches his duty of loyalty to the Company or its
stockholders, (ii) fails to act in good faith or engages in intentional
misconduct or a knowing violation of laws, (iii) authorizes payment of an
unlawful dividend or stock purchase or redemption as provided in Section 174 of
the DGCL or (iv) obtains an improper personal benefit. This provision does not
prevent the Company or its stockholders from seeking equitable remedies, such as
injunctive relief or rescission. If equitable remedies are found not to be
available to stockholders in any particular case, stockholders may not have any
effective remedy against actions taken by directors that constitute negligence
or gross negligence.

The Company's Certificate of Incorporation, as amended, also includes
provisions to the effect that (subject to certain exceptions) the Company shall,
to the maximum extent permitted from time to time under the law of the State of
Delaware, indemnify, and upon request shall reimburse expenses to, any director
or officer to the extent that such indemnification and reimbursement of expenses
is permitted under such law, as it may from time to time be in effect. In
addition, the Amended and Restated Bylaws of the Company require the Company to
indemnify, to the fullest extent permitted by law, any director, officer,
employee or agent of the Company. At present, the DGCL provides that, in order
to be entitled to indemnification, an individual must have acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
Company's best interests and, with respect to a criminal action or proceeding,
had no reasonable cause to believe that his or her conduct was unlawful.

EMPLOYMENT AGREEMENTS

The Company has entered into five-year evergreen employment agreements with
each of Messrs. Laikin, Howell and Housefield which are automatically renewable
for successive one-year periods and provide for an annual base compensation of
$200,000 and such bonuses as the Compensation Committee of the Board of
Directors may from time to time determine. If the Company provides the employee
with notice that it desires to terminate the agreement, there is a final
five-year term commencing on the date of such notice. The employment agreements
provide for employment on a full-time basis and contain a provision that the
employee will not compete or engage in a business competitive with the current
or anticipated business of the Company during the term of the employment
agreement and for a period of two years thereafter. The employment agreements
also provide that if the employee's employment is terminated under certain
circumstances, including as a result of a change of control, the employee will
be entitled to receive severance pay equal to ten times the total compensation
(including salary, bonus, the value of all perquisites and the value of all
stock options received or earned by the employee) received from the Company
during the twelve months prior to the date of termination. For purposes of such
agreements, a "change of control" shall be deemed to occur, unless previously
consented to in writing by the respective employee, upon (i) the actual
acquisition, or the execution of an agreement to acquire, 20% or more of the
voting securities of the Company by any person or entity not affiliated with the
respective employee (other than pursuant to a bona fide underwriting agreement
relating to a public distribution of securities of the Company), (ii) the
commencement of a tender or exchange offer for more than 20% of the voting
securities of the Company by any person or entity not affiliated with the
respective employee, (iii) the commencement of a proxy contest against
management for the election of a majority of the Board of Directors of the
Company if the group conducting the proxy contest owns, has or gains the power
to vote at least 20% of the voting securities of the Company, (iv) a vote by the
Board of Directors to merge, consolidate or sell all or substantially all of the
assets of the Company to any person or entity not affiliated with the respective
employee, or (v) the election of directors constituting a majority of the Board
of Directors who have not been nominated or approved by the respective employee.
In addition, the Company has entered into three-year evergreen employment
agreements with each of Messrs. Bounsall and Fivel which provide for an annual
base compensation of $125,000 and provide otherwise for substantially the same
terms as the employment agreements described above, except that if the
employee's employment is terminated under certain circumstances, including as a
result of a change of control, the employee will be entitled to receive
severance pay equal to three times the compensation received from the Company
during the twelve months prior to the date of termination.

39
<PAGE> 40

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company has a Compensation Committee of the Board of Directors
currently consisting of Messrs. Wagner and Adams. Decisions as to executive
compensation are made by the Board of Directors, primarily upon the
recommendation of such committee. The Board of Directors has not modified or
rejected any recommendations of the Compensation Committee as to the
compensation of the Company's executive officers. During the fiscal year ended
December 31, 1996, none of the executive officers of the Company has served on
the board of directors or the compensation committee of any other entity, any of
whose officers serves on the Company's Board of Directors or Compensation
Committee.

STOCK OPTION PLANS

In March 1994, the Company adopted the 1994 Stock Option Plan, effective
April 7, 1994, as amended in May 1995 and April 1997 (the "1994 Plan"), pursuant
to which 4,100,000 shares of Common Stock were reserved for issuance upon the
exercise of options designated as either (i) options intended to constitute
incentive stock options ("ISOs") under the Internal Revenue Code of 1986, as
amended (the "Code"), or (ii) nonqualified options. ISOs may be granted under
the 1994 Plan to employees and officers of the Company. Non-qualified options
may be granted to consultants, directors (whether or not they are employees),
employees or officers of the Company.

The 1994 Plan is intended to qualify under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and is administered by a
committee (the "Committee") of the Board of Directors (the "Stock Option
Committee"), which currently consists of Messrs. Wagner and Adams. The Stock
Option Committee, within the limitations of the 1994 Plan, determines the
persons to whom options will be granted, the number of shares to be covered by
each option, whether the options granted are intended to be ISOs, the duration
and rate of exercise of each option, the exercise price per share and the manner
of exercise and the time, manner and form of payment upon exercise of an option.
Unless sooner terminated, the 1994 Plan will expire on April 7, 2004.

ISOs granted under the 1994 Plan may not be granted at a price less than
the fair market value of the Common Stock on the date of grant (or 110% of fair
market value in the case of persons holding 10% or more of the voting stock of
the Company). The aggregate fair market value of shares for which ISOs granted
to any employee are exercisable for the first time by such employee during any
calendar year (under all stock option plans of the Company) may not exceed
$100,000. Non-qualified options granted under the 1994 Plan may not be granted
at a price less than the fair market value of the Common Stock on the date of
grant. However, the Stock Option Committee may, in the future, adjust the
original exercise price of up to 10% of the total options available for grant
without stockholder approval. Options granted under the 1994 Plan will expire
not more than ten years from the date of grant (five years in the case of ISOs
granted to persons holding 10% or more of the voting stock of the Company). All
options granted under the 1994 Plan are not transferable during an optionee's
lifetime but are transferable at death by will or by the laws of descent and
distribution. In general, upon termination of employment of an optionee, all
options granted to such person which are not exercisable on the date of such
termination immediately terminate, and any options that are exercisable
terminate 90 days following termination of employment.

Under the 1994 Plan, the maximum number of shares that may be covered by
stock options granted to any employee of the Company shall be a maximum of 50%
of the aggregate number of shares reserved for issuance under the 1994 Plan.
Such requirement is intended to meet the exception from Section 162(m) of the
Code for performance-based compensation.

The 1994 Plan contains anti-dilution provisions authorizing appropriate
adjustments in certain circumstances. Shares of Common Stock subject to options
which expire without being exercised or which are cancelled as a result of the
cessation of employment are available for further grants. No shares of Common
Stock may be issued to any optionee until the full exercise price has been paid.
The Committee may grant individual options under the 1994 Plan with more
stringent provisions than those specified in the 1994 Plan.

40
<PAGE> 41

As of July 10, 1997, the Company has granted options to purchase an
aggregate of 2,143,285 shares under the 1994 Plan (net of forfeitures), of which
options to purchase 1,309,140 shares have been exercised. During the fiscal year
ended December 31, 1996, the Company granted five-year options to purchase an
aggregate of 217,500 (net of forfeitures) shares under the 1994 Plan, none of
which were granted to executive officers or directors of the Company.

As of July 1996, the Company adopted the 1996 Stock Option Plan (the "1996
Plan") pursuant to which employees of the Company and others are eligible to be
granted non-qualified stock options to purchase up to an aggregate of 1,875,000
shares of Common Stock. The 1996 Plan is administered by the Stock Option
Committee in the same manner in which the Committee administers the 1994 Plan.
The terms of the 1996 Plan are identical to those contained in the 1994 Plan
except that no ISOs may be granted under the 1996 Plan. As of July 10, 1997, the
Company has granted options (net of cancellations) to purchase an aggregate of
1,820,625 shares under the 1996 Plan, none of which has been exercised. During
the fiscal year ended December 31, 1996, the Company granted five and ten-year
options to purchase an aggregate of 1,403,125 shares under the 1996 Plan. Of
such options, options to purchase 375,000, 375,000, 375,000 and 93,750 shares,
respectively, were granted to Messrs. Laikin, Howell, Housefield and Bounsall at
an exercise price of $12.46 per share. During the six months ended June 30,
1997, the Company granted options to purchase 46,875 shares to Mr. Fivel under
the 1996 Plan, which options are exercisable at a price of $19.40 per share. All
of such options are exercisable as to one-third of the shares covered thereby on
the first, second and third anniversaries of the date of grant.

The Company has also adopted the Non-employee Directors Stock Option Plan
(the "Directors Plan" and, together with the 1994 Plan and the 1996 Plan, the
"Stock Option Plans"), as amended, pursuant to which non-employee directors are
eligible to receive options to purchase an aggregate of 468,750 shares. The
Director Plan provides that eligible directors automatically receive a grant of
options to purchase 10,000 shares of Common Stock at fair market value upon
first becoming a director and, thereafter, an annual grant, in January of each
year, of 4,000 options at fair market value. Each option expires five years from
the date of grant and is exercisable in full commencing one year from the date
of grant. As of July 10, 1997, the Company has granted options to purchase an
aggregate of 231,562 shares of Common Stock under the Directors Plan, of which
options to purchase 89,062 shares have been exercised.

41
<PAGE> 42

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of July 14, 1997 and as adjusted to give effect
to the sale of Common Stock offered by the Company and the Selling Stockholders
in the Offerings: (i) by each person who is known by the Company to own
beneficially more than 5% of the Company's Common Stock; (ii) by each director;
(iii) by each of the Named Executives; (iv) by all executive officers and
directors of the Company as a group; and (v) by each Selling Stockholder.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERINGS(2) SHARES TO OFFERINGS(2)
-------------------- BE SOLD IN ---------------------
NAME(1) NUMBER PERCENT OFFERINGS NUMBER PERCENT
------- --------- ------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
Robert J. Laikin...................... 500,469(3) 2.2% -- 500,469 2.0%
J. Mark Howell........................ 78,125(4) * -- 78,125 *
T. Scott Housefield................... 58,594(5) * -- 58,594 *
Phillip A. Bounsall................... --(6) * -- -- *
Robert Picow(7)....................... 2,418,999(8) 10.8% 2,100,000 318,999 1.3%
Joseph Forer(9)....................... 342,188 1.5% 200,000 142,188 *
Rollin M. Dick........................ 532,500(10) 2.4% -- 532,500 2.2%
John W. Adams......................... 16,875(11) * -- 16,875 *
Robert F. Wagner...................... 7,500(12) * -- 7,500 *
Stephen H. Simon...................... 7,500(13) * -- 7,500 *
Steven B. Sands....................... 45,233(14) * -- 45,233 *
American Century Companies, Inc. ..... 1,500,000(15) 6.7% -- 1,500,000 6.1%
The Capital Group Companies, Inc. .... 1,331,250(16) 6.0% -- 1,331,250 5.4%
All executive officers and directors
as a group (twelve persons)(17)..... 4,007,983 17.7% 2,300,000 1,246,796(18) 5.0%(18)
</TABLE>

- ------------
* Less than 1%.

(1) The address for each of such individuals, unless specified otherwise in a
subsequent footnote, is in care of the Company, 6402 Corporate Drive,
Indianapolis, Indiana 46278.

(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of options. Each beneficial owner's percentage ownership is
determined by assuming that options or warrants that are held by such
person (but not those held by any other person) and which are exercisable
within 60 days of the date hereof have been exercised. Unless otherwise
indicated, the Company believes that all persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
beneficially owned by them, subject to community property laws where
applicable.

(3) Includes: (i) 461,406 shares held by Robert J. Laikin and (ii) 39,063
shares underlying options which are exercisable within 60 days of the date
hereof. Does not include options to purchase 414,063 shares.

(4) Represents shares underlying options which are exercisable within 60 days
of the date hereof. Does not include options to purchase 414,063 shares.

(5) Does not include options to purchase 375,000 shares.

(6) Does not include options to purchase 93,750 shares.

(7) The address for Robert Picow is 2 Cartagena Drive, Boca Raton, Florida
33428.

(8) Does not include options to purchase 5,000 shares.

(9) The address for Joseph Forer is 12370 SW 64th Avenue, Miami, Florida 33156.

42
<PAGE> 43

(10) Includes: (i) 492,188 shares held in the name of Rollin M. Dick and Helen
E. Dick Grantor Retained Annuity Trust II, and (ii) 40,312 shares
underlying options which are exercisable within 60 days of the date hereof.
Does not include options to purchase 5,000 shares.

(11) Represents shares underlying options which are exercisable within 60 days
of the date hereof. Does not include options to purchase 5,000 shares.

(12) Represents shares underlying options which are exercisable within 60 days
of the date hereof. Does not include options to purchase 5,000 shares.

(13) Represents shares underlying options which are exercisable within 60 days
of the date hereof. Does not include options to purchase 5,000 shares.

(14) Consists of (i) 3,750 shares held by Ponderosa Partners, L.P., of which Mr.
Sands is a controlling stockholder, officer and director of the corporate
general partner and (ii) 41,483 shares underlying options and warrants
which are exercisable within 60 days of the date hereof. Does not include
options to purchase 5,000 shares.

(15) Based on Form 13-G filed with the Commission, American Century Companies,
Inc. has sole voting and dispositive power over the shares. The address for
American Century Companies, Inc. is Twentieth Century Tower, 4500 Main
Street, Kansas City, Missouri 64111.

(16) Based on Form 13-G filed with the Commission, Capital Research and
Management Company, a wholly-owned subsidiary of the Capital Group
Companies, Inc. ("CGC"), and the SMALLCAP World Fund, Inc. have sole voting
and dispositive power over the shares. The address for CGC is 333 South
Hope Street, 52nd Floor, Los Angeles, California 90071.

(17) Includes an aggregate of 272,266 shares underlying options and warrants
which are exercisable within 60 days of the date hereof, including those
listed in notes (3), (4) and (10) through (14) above.

(18) Excludes 461,187 shares to be beneficially owned after the Offerings by
Robert Picow and Joseph Forer who will be resigning as directors of the
Company effective as of the consummation of the Offerings.

CERTAIN TRANSACTIONS

Century Cellular Network, Inc. ("Century"), a company 50% owned by Robert
J. Laikin, Chairman of the Board of the Company, was a customer and supplier to
the Company until December 1996. For the year ended December 31, 1996, the
Company sold approximately $2.6 million of cellular telephone products to
Century and made purchases of inventory from Century of approximately $751,000.
The Company believes that sales to Century and purchases made from Century
during 1996 were made on terms no less favorable than could have been made to or
from unaffiliated third parties. At June 30, 1997, accounts receivable from
Century were approximately $370,000. Mr. Laikin has personally guaranteed the
payment of receivables due from Century.

In May 1997, in connection with the assignment from Century to the Company
of certain leasehold premises located in Indianapolis which were previously
guaranteed by Mr. Laikin, the third-party landlord under such lease released Mr.
Laikin from his personal guaranty.

In connection with the Allied Merger, the Company issued an aggregate of
3,796,875 shares of Common Stock to Messrs. Robert Picow and Joseph Forer in
exchange for all of the outstanding shares of Allied Communications' common
stock and appointed each of them as a director of the Company. Each of Messrs.
Picow and Forer is a Selling Stockholder in connection with the Offerings,
offering 2,100,000 shares and 200,000 shares, respectively, and each will resign
as a director upon the consummation of the Offerings. Mr. Forer will continue as
the Company's Director of International Business Development. The Company has
agreed to indemnify the Selling Stockholders against certain liabilities,
including certain liabilities under the Securities Act, or to contribute to
payments the Selling Stockholders may be required to make in respect thereof.

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<PAGE> 44

In October 1996, the Company terminated an employment agreement with Robert
Picow and entered into an agreement with Mr. Picow, pursuant to which Mr. Picow
serves as Vice Chairman of the Board of Directors of the Company and receives
$10,000 per month. The term of the agreement is from October 9, 1996 until June
7, 1999. Under the agreement, Mr. Picow may not have an interest in, or render
any services to, any business competitive with the business activities of the
Company, either in any state of the United States or any country where the
Company has a subsidiary, joint venture or other entity controlled by the
Company, prior to June 7, 2001. Mr. Picow and the Company have agreed that,
effective upon the consummation of the Offerings, the foregoing agreement (other
than such non-compete and certain other provisions thereof) will be terminated,
in consideration for which Mr. Picow will receive approximately $106,000.

The Company's Philadelphia, Pennsylvania operations center is leased from
Robert Picow and his wife at a monthly rental of $7,500. The Company believes
that the terms of such leases are no less favorable to the Company than the
terms of similar transactions available from an unrelated party.

The Company utilizes the services of a third party for the purchase of
corporate gifts, promotional items and standard and personalized corporate
stationery. Mrs. Judy Laikin, the mother of Robert J. Laikin, owns this
advertising specialty company. For the year ended December 31, 1996 and the six
months ended June 30, 1997, the Company purchased approximately $245,000 and
$228,000, respectively, of services and products from this party. The Company
believes these purchases by the Company were made on terms no less favorable
than could be made from an unrelated party.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 100 million shares
of Common Stock, par value $.01 per share, and one million shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). At July 14, 1997, the
Company had 22,318,490 shares of Common Stock issued and outstanding, held of
record by approximately 125 stockholders, and no shares of Preferred Stock
issued and outstanding.

The following description of the capital stock of the Company and certain
provisions of the Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), and its Amended and Restated By-laws (the
"By-laws") is a summary and is qualified in it entirety by the Certificate of
Incorporation and By-laws, copies of which are exhibits to the Registration
Statement of which this Prospectus is a part.

COMMON STOCK

Except as required by law, holders of Common Stock are entitled to one vote
for each share held of record on all matters submitted to a vote of the holders
of Common Stock. The holders of Common Stock are not entitled to cumulative
voting rights with respect to the election of directors. Subject to preferences
that may be applicable to any then outstanding Preferred Stock, holders of
Common Stock are entitled to receive ratably such dividends as may be declared
by the Board of Directors out of funds legally available therefor. In the event
of a liquidation, dissolution, or winding up of the Company, holders of the
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preference of any then outstanding Preferred
Stock. Holders of Common Stock have no preemptive rights and have no right to
convert their Common Stock into any other securities. There are no redemption or
sinking fund provisions applicable to the Common Stock. All outstanding shares
of Common Stock are, and the Common Stock to be outstanding upon consummation of
the Offerings will be, fully paid and nonassessable. The Board of Directors may
issue additional authorized shares of Common Stock without further action by the
stockholders.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue up to one million shares of Preferred Stock in one or
more series and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, and the number of shares constituting any
series or the designation of such series. The issuance of

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<PAGE> 45

Preferred Stock could adversely affect the voting power of holders of Common
Stock and could have the effect of delaying, deferring, or preventing a change
in control of the Company. The Company has no present plan to issue any shares
of Preferred Stock other than as it may be issued in connection with the
Stockholders Rights Plan described below. See "-- Anti-takeover Effects of
Certain Provisions of the Company's By-laws, Stockholders Rights Plan and
Delaware Corporate Law."

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE COMPANY'S
BY-LAWS, STOCKHOLDERS RIGHTS PLAN AND DELAWARE CORPORATE LAW

CERTAIN BY-LAW PROVISIONS. The Company's By-laws contain provisions that
could make more difficult the acquisition of control of the Company by various
means, such as a tender offer, open market purchases, a proxy contest or
otherwise. For instance, the Company's Board of Directors is divided into three
classes, as nearly equal in number as is reasonably possible, serving staggered
terms. One class of directors is elected at each annual meeting to serve a term
of three years. At least two annual meetings of stockholders, instead of one,
will be required to effect a change in a majority of the Company's Board of
Directors. In addition, special meetings of the stockholders may only be called
by a majority of the Board of Directors or the President of the Company, and the
Company's By-laws establish advance notice procedures with regard to stockholder
proposals for annual or special meetings. Amendments to the staggered board
provision require a two-thirds vote of stockholders. The purposes of these
provisions are to discourage certain types of transactions which may involve an
actual or threatened change of control of the Company and encourage persons
seeking to acquire control of the Company to consult first with the Board of
Directors to negotiate the terms of any proposed business combination or offer.
The provisions are designed to reduce the vulnerability of the Company to an
unsolicited proposal for a takeover that does not contemplate the acquisition of
all outstanding shares or is otherwise unfair to stockholders of the Company, or
an unsolicited proposal for the restructuring or sale of all or part of the
Company.

STOCKHOLDERS RIGHTS PLAN. In February 1997, the Company adopted a
Stockholders Rights Plan and declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of Common Stock. The dividend was
paid to holders of record of Common Stock as of the close of business on
February 20, 1997 (the "Record Date"). Each Right entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company at a price of $115 per one one-thousandth of a
Preferred Share (the "Purchase Price"), subject to adjustment in certain
circumstances. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent"). A copy of the
Rights Agreement, which includes as Exhibit B the form of Rights Certificate and
as Exhibit C the Summary of Rights to Purchase Preferred Shares, is an exhibit
to the Registration Statement of which this Prospectus is a part.

Rights are evidenced by and are transferable only in connection with the
Common Stock certificates outstanding prior to the Distribution Date (as defined
below). As soon as practical following the earlier to occur of (i) ten days
after a public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial ownership of 15% or
more of the outstanding Common Stock or (ii) ten business days (or such later
date as may be determined by action of the Board of Directors prior to such time
as any person or group becomes an Acquiring Person) after the commencement of,
or announcement of an intention to commence, a tender or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the outstanding Common Stock (the "Distribution Date"),
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights.

The Rights are not exercisable until the Distribution Date and will expire
on February 20, 2007, unless extended or unless the Rights are earlier redeemed
or exchanged by the Company, as described below. The Rights, the Purchase Price,
and the number of Preferred Shares or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution.

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<PAGE> 46

Preferred Shares will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment of $1.00 per share
but will be entitled to an aggregate dividend of 1,000 times the dividend
declared per share of Common Stock. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a minimum preferential liquidation
payment of $1.00 per share but will be entitled to an aggregate payment of 1,000
times the payment made per share of Common Stock. Each Preferred Share will have
1,000 votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per share of Common Stock.

In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person or its affiliate, associate or
transferee (which will thereafter be void), will thereafter have the right to
receive that number of shares of Common Stock having a market value of two times
the exercise price of the Right. In the event that the Company is acquired in a
merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or group has become
an Acquiring Person in a transaction with such Acquiring Person or group, each
holder of a Right will thereafter have the right to receive that number of
shares of common stock of the acquiring company having a market value of two
times the exercise price of the Right. In each case, there are exceptions for
transactions that have received the prior approval of the Board of Directors.

At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock
per Right (subject to adjustment). At any time prior to any person or group
becoming an Acquiring Person, the Board of Directors of the Company may redeem
all of the outstanding Rights at a price of $.01 per Right, payable in cash or
Common Stock (the "Redemption Price").

All of the provisions of the Rights Agreement may be amended by the Company
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may not be amended in any manner which would adversely
affect the interests of the holders of the Rights (excluding the interests of an
Acquiring Person).

DELAWARE ANTI-TAKEOVER LAW. The Company is subject to certain
anti-takeover provisions under Section 203 of the Delaware General Corporation
Law. In general, under Section 203, a Delaware corporation may not engage in any
business combination with any interested stockholder (a person that owns,
directly or indirectly, 15% or more of the outstanding voting stock of a
corporation or is an affiliate or associate of a corporation and was the owner
of 15% or more of the outstanding voting stock of the corporation at any time
within the prior three years), for a period of three years following the date
such stockholder became an interested stockholder, unless (i) prior to such date
the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, or (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, or (iii) on or subsequent to
such date, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by at least 66 2/3% of the outstanding voting stock which is not owned
by the interested stockholder. The restrictions imposed by Section 203 will not
apply to a corporation if the corporation's original certificate of
incorporation contains a provision expressly electing not to be governed by this
section or the corporation by action of its stockholders adopts an amendment to
its certificate of incorporation or by-laws expressly electing not to be
governed by Section 203. The Company has not elected out of Section 203, and
thus the restrictions imposed by Section 203 apply to the Company. Such
provision could have the effect of discouraging, delaying or preventing a
takeover of the Company, which could otherwise be in the best interest of the
Company's stockholders, and have an adverse effect on the market price for the
Company's Common Stock.

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<PAGE> 47

TRANSFER AGENT

The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Sales of substantial amounts of Common Stock in the public market, or the
perception that such sales could occur, could depress the prevailing market
price of the Common Stock.

Upon completion of the Offerings, 22,513,652 shares of Common Stock will be
freely tradeable. All other outstanding shares of Common Stock were issued by
the Company in private transactions not involving a public offering, are treated
as "restricted securities" for purposes of Rule 144, and may not be resold
unless they are registered under the Securities Act or are resold pursuant to an
exemption from registration, including the exemption provided under Rule 144 of
the Securities Act.

In general, Rule 144, as currently in effect, provides that a person (or
persons whose sales are aggregated) who is an affiliate of the Company or who
has beneficially owned shares which are issued and sold in reliance upon
exemptions from registration under the Securities Act ("Restricted Shares") for
at least one year is entitled to sell within any three-month period a number of
shares that does not exceed the greater of 1% of the then outstanding shares of
Common Stock or the average weekly trading volume in the shares of Common Stock
during the four calendar weeks preceding the filing of a notice of the sale is
filed with the Securities and Exchange Commission (the "Commission"). Sales
under Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
Company. However, a person who is not deemed to have been an "affiliate" of the
Company at any time during the three months preceding a sale, and who has
beneficially owned Restricted Shares for at least two years, would be entitled
to sell such shares under Rule 144 without regard to volume limitations, manner
of sale provisions, notice requirements or the availability of current public
information about the Company.

The Company, the executive officers and directors of the Company, and the
Selling Stockholders have, subject to certain exceptions, agreed that they will
not, directly or indirectly, sell, offer to sell, grant any option for the sale
of, or otherwise dispose of, any capital stock of the Company or any security
convertible or exchangeable into or exercisable for, such capital stock, or, in
the case of the Company, file any registration statement with respect to the
foregoing, for a period of 120 days after the date of this Prospectus, without
the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Company has filed registration statements under the Securities Act
registering an aggregate of 1,179,923 shares of Common Stock reserved for
issuance in connection with outstanding options and options available for future
grant under the 1994 Plan and the Directors Plan (of which, as of July 10, 1997,
options to purchase 352,885 shares were immediately exercisable) and 24,140
shares of Common Stock reserved for issuance in connection with outstanding
warrants, thus permitting the resale of such shares by non-affiliates in the
public market without restriction under the Securities Act. In addition, the
Company intends to file registration statements under the Securities Act
registering shares of Common Stock reserved for issuance in connection with the
balance of the options outstanding and available for future grant under the
Company's Stock Option Plans. Options to acquire an aggregate of 976,644 shares
of Common Stock under the 1994 Plan and the Directors Plan and warrants to
acquire 24,140 shares of Common Stock remained outstanding as of July 10, 1997.

In addition, commencing 30 days following the date of this Prospectus, a
stockholder, who is also an employee, of the Company may require the Company to
file a registration statement relating to 375,000 shares of Common Stock owned
by such stockholder and to take such reasonable steps necessary to cause the
registration statement to be declared effective. Such stockholder has agreed
that he will not sell, offer to sell, grant any option for the sale of, or
otherwise dispose of 187,500 of such shares for a period of 120 days following
the consummation of the Offerings; provided, however, that if, subsequent to
exercise of the demand registration right by the stockholder, the registration
statement relating to the stockholder's 375,000 shares of Common Stock is not
declared effective by five days prior to the public announcement of the
Company's

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<PAGE> 48

financial results for the three months ended September 30, 1997, he may, subject
to applicable securities laws, sell up to 187,500 shares of Common Stock
commencing the day following the public announcement of the Company's financial
results for the three months ended September 30, 1997.

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States Federal tax
consequences of the acquisition, ownership, and disposition of Common Stock by a
holder that, for United States Federal income tax purposes, is not a "United
States person" (a "Non-United States Holder"). This discussion is based upon the
United States Federal tax law now in effect, which is subject to change,
possibly retroactively. For purposes of this discussion, a "United States
person" means a citizen or resident of the United States; a corporation,
partnership, or other entity created or organized in the United States or under
the laws of the United States or of any political subdivision thereof; an estate
whose income is includible in gross income for United States Federal income tax
purposes regardless of its source; or a "United States Trust". A United States
Trust is (a) for taxable years beginning after December 31, 1996, or if the
trustee of a trust elects to apply the following definition to an earlier
taxable year, any trust if, and only if, (i) a court within the United States is
able to exercise primary supervision over the administration of the trust and
(ii) one or more United States trustees have the authority to control all
substantial decisions of the trust, and (b) for all other taxable years, any
trust whose income is includible in gross income for United States Federal
income tax purposes regardless of its source. This discussion does not consider
any specific facts or circumstances that may apply to a particular Non-United
States Holder. Prospective investors are urged to consult their tax advisors
regarding the United States Federal tax consequences of acquiring, holding, and
disposing of Common Stock, as well as any tax consequences that may arise under
the laws of any foreign, state, local, or other taxing jurisdiction.

DIVIDENDS

Dividends paid to a Non-United States Holder will generally be subject to
withholding of United States Federal income tax at the rate of 30% unless the
dividend is effectively connected with the conduct of a trade or business within
the United States by the Non-United States Holder (or if certain tax treaties
apply, is attributable to a United States permanent establishment maintained by
such Non-United States Holder), in which case the dividend will be subject to
the United States Federal income tax on net income on the same basis that
applies to United States persons generally. In the case of a Non-United States
Holder which is a corporation, such effectively connected income also may be
subject to the branch profits tax (which is generally imposed on a foreign
corporation on the repatriation from the United States of effectively connected
earnings and profits). Non-United States Holders should consult any applicable
income tax treaties that may provide for a lower rate of withholding or other
rules different from those described above. A Non-United States Holder may be
required to satisfy certain certification requirements in order to claim treaty
benefits or otherwise claim a reduction of or exemption from withholding under
the foregoing rules.

GAIN ON DISPOSITION

A Non-United States Holder will generally not be subject to United States
Federal income tax on gain recognized on a sale or other disposition of Common
Stock unless (i) the gain is effectively connected with the conduct of a trade
or business within the United States by the Non-United States Holder or, if tax
treaties apply, is attributable to a United States permanent establishment
maintained by the Non-United States Holder, (ii) in the case of a Non-United
States Holder who is a nonresident alien individual and holds the Common Stock
as a capital asset, such holder is present in the United States for 183 or more
days in the taxable year of disposition or either such individual has a "tax
home" in the United States or the gain is attributable to an office or other
fixed place of business maintained by such individual in the United States,
(iii) the Company is or has been a "United States real property holding
corporation" for United States Federal income tax purposes (which the Company
does not believe that it is or likely to become) and the Non-United States
Holder holds or has held, directly or indirectly, at any time during the
five-year period ending on the date of disposition, more than 5% of the Common
Stock or (iv) the Non-United States Holder

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<PAGE> 49

is subject to tax pursuant to the Internal Revenue Code of 1986, as amended,
provisions applicable to certain United States expatriates. Gain that is
effectively connected with the conduct of a trade or business within the United
States by the Non-United States Holder will be subject to the United States
Federal income tax on net income on the same basis that applies to United States
persons generally (and, with respect to corporate holders, under certain
circumstances, the branch profits tax) but will not be subject to withholding.
Non-United States Holders should consult any applicable treaties that may
provide for different rules.

FEDERAL ESTATE TAXES

Common Stock owned or treated as owned by an individual who is not a
citizen or resident of the United States at the date of death will be included
in such individual's estate for United States Federal estate tax purposes,
unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

The Company must report annually to the Internal Revenue Service and to
each Non-United States Holder the amount of dividends paid to, and the tax
withheld with respect to, such holder, regardless of whether any tax was
actually withheld. This information may also be made available to the tax
authorities of a country in which the Non-United States Holder resides.

Under the temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally not
apply to dividends paid on the Common Stock to a Non-United States Holder.
Payments by a United States office of a broker of the proceeds of a sale of
Common Stock are subject to both backup withholding at a rate of 31% and
information reporting unless the holder certifies its Non-United States Holder
status under penalties of perjury or otherwise establishes an exemption.
Information reporting requirements (but not backup withholding) will also apply
to payments of the proceeds of sales of Common Stock by foreign offices of
United States brokers, or foreign brokers with certain types of relationships to
the United States, unless the broker has documentary evidence in its records
that the holder is a Non-United States Holder and certain other conditions are
met, or the holder otherwise establishes an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the Non-United
States Holder's United States Federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service.

These information reporting and backup withholding rules are under review
by the United States Treasury and their application to the Common Stock could be
changed by future regulations. On April 22, 1996, proposed Treasury Regulations
were published in the Federal Register concerning the withholding of tax and
reporting for certain amounts paid to non-resident individuals and foreign
corporations. The proposed Treasury Regulations, if adopted in their present
form, would be effective for payments made after December 31, 1997. Prospective
investors should consult their tax advisors concerning the potential adoption of
such proposed Treasury Regulations and the potential effect on their ownership
of Common Stock.

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<PAGE> 50

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement (the
"U.S. Purchase Agreement") among the Company, each of the Selling Stockholders
and each of the underwriters named below (the "U.S. Underwriters"), and
concurrently with the sale of 900,000 shares of Common Stock to the
International Managers (as defined below), the Company and the Selling
Stockholders have agreed to sell to the U.S. Underwriters, and each of the U.S.
Underwriters severally has agreed to purchase from the Company and the Selling
Stockholders, the number of shares of Common Stock set forth opposite its name
below.

<TABLE>
<CAPTION>
NUMBER
U.S. UNDERWRITERS OF SHARES
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 660,000
Cowen & Company............................................. 660,000
UBS Securities LLC.......................................... 660,000
Sands Brothers & Co., Ltd................................... 660,000
Lehman Brothers Inc. ....................................... 140,000
McDonald & Company Securities, Inc. ........................ 140,000
Montgomery Securities....................................... 140,000
Cleary Gull Reiland & McDevitt Inc. ........................ 60,000
Genesis Merchant Group Securities........................... 60,000
GS2 Securities, Inc. ....................................... 60,000
Hoak Breedlove Wesneski & Co. .............................. 60,000
Legg Mason Wood Walker, Incorporated........................ 60,000
NatCity Investments, Inc. .................................. 60,000
Nichols, Safina Lerner & Co., Inc. ......................... 60,000
Rauscher Pierce Refsnes, Inc. .............................. 60,000
SoundView Financial Group, Inc. ............................ 60,000
---------
Total.......................................... 3,600,000
=========
</TABLE>

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Cowen
& Company, UBS Securities LLC and Sands Brothers & Co., Ltd. are acting as
representatives (the "U.S. Representatives") of the U.S. Underwriters.

The Company and the Selling Stockholders have also entered into a purchase
agreement (the "International Purchase Agreement" and, together with the U.S.
Purchase Agreement, (the "Purchase Agreements") with certain underwriters
outside the United States and Canada (collectively, the "International
Managers," and together with the U.S. Underwriters, the "Underwriters"), for
whom Merrill Lynch International, Cowen International L.P., UBS Limited and
Sands Brothers & Co., Ltd. are acting as representatives (the "International
Representatives" and, together with the U.S. Representatives, the
"Representatives"). Subject to the terms and conditions set forth in the
International Purchase Agreement, and concurrently with the sale of 3,600,000
shares of Common Stock to the U.S. Underwriters pursuant to the U.S. Purchase
Agreement, the Company and the Selling Stockholders have agreed to sell to the
International Managers, and the International Managers have severally agreed to
purchase from the Company and the Selling Stockholders, an aggregate of 900,000
shares of Common Stock. The public offering price per share of Common Stock and
the underwriting discount per share of Common Stock are identical under the U.S.
Purchase Agreement and the International Purchase Agreement. The respective
percentages of the Common Stock to be sold by each of the Company and the
Selling Stockholders will be identical in the U.S. Offering and the
International Offering.

In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
such agreement are purchased. Under certain

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<PAGE> 51

circumstances involving a default by an Underwriter, the commitments of
non-defaulting U.S. Underwriters or International Managers (as the case may be)
may be increased or the U.S. Purchase Agreement or the International Purchase
Agreement (as the case may be) may be terminated. The sale of Common Stock to
the U.S. Underwriters is conditioned upon the sale of Common Stock to the
International Managers and vice versa.

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") providing for the
coordination of their activities. The Underwriters are permitted to sell shares
of Common Stock to each other for purposes of resale at the initial public
offering price, less an amount not greater than the selling concession. Under
the terms of the Intersyndicate Agreement, the U.S. Underwriters and any dealer
to whom they sell shares of Common Stock will not offer to sell or sell shares
of Common Stock to persons who are non-United States or non-Canadian persons or
to persons they believe intend to resell to persons who are non-United States or
non-Canadian persons, and the International Managers and any dealer to whom they
sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to U.S. persons or to Canadian persons or to persons they believe intend
to resell to United States persons or Canadian persons, except in the case of
transactions pursuant to the Intersyndicate Agreement.

The U.S. Representatives have advised the Company and the Selling
Stockholders that the U.S. Underwriters propose initially to offer the shares of
Common Stock to the public at the public offering price set forth on the cover
page of this Prospectus, and to certain selected dealers at such price less a
concession not in excess of $.90 per share. The U.S. Underwriters may allow, and
such dealers may reallow, a discount not in excess of $.10 per share on sales to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.

The Company has granted an option to the U.S. Underwriters, exercisable
within 30 days after the date of this Prospectus, to purchase up to an aggregate
of 480,000 additional shares of Common Stock at the public offering price set
forth on the cover page of this Prospectus, less the underwriting discount. The
U.S. Underwriters may exercise this option only to cover over-allotments, if
any, made on the sale of the shares of Common Stock offered hereby. To the
extent that the U.S. Underwriters exercise this option, each U.S. Underwriter
will be obligated, subject to certain conditions, to purchase a number of
additional shares of Common Stock proportionate to such U.S. Underwriter's
initial amount reflected in the foregoing table. The Company has also granted an
option to the International Managers, exercisable within 30 days after the date
of this Prospectus, to purchase up to an aggregate of 120,000 additional shares
of Common Stock to cover over-allotments, if any, on terms similar to those
granted to the U.S. Underwriters. If purchased, the Underwriters will offer such
additional shares on the same terms as those on which the 4,500,000 shares are
being offered.

The Company, its executive officers and directors, and the Selling
Stockholders have, subject to certain exceptions, agreed that they will not for
a period of 120 days from the date of this Prospectus, without the prior written
consent of Merrill Lynch, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any capital stock of the
Company or any security convertible or exchangeable into, or exercisable for,
such capital stock, or, in the case of the Company, file any registration
statement (other than registration statements on Form S-8 relating to employee
stock option plans and the registration statement relating to 375,000 shares of
Common Stock owned by a stockholder and an employee of the Company pursuant to
the terms of his outstanding registration rights) with respect to any of the
foregoing, except that the Company may, without such consent, issue options
pursuant to the Stock Option Plans and shares of Common Stock upon exercise of
options issued pursuant to the Stock Option Plans. See "Shares Eligible for
Future Sale; Registration Rights."

In connection with the Offerings, certain Underwriters or their respective
affiliates and selling group members (if any) who are qualified market makers on
the Nasdaq National Market may engage in "passive market making" in the Common
Stock on the Nasdaq National Market in accordance with Rule 103 under Regulation
M. Rule 103 permits, upon the satisfaction of certain conditions, underwriters
and selling group members participating in a distribution that are also Nasdaq
National Market market makers in the security

51
<PAGE> 52

being distributed to engage in limited market making transactions during the
period when Rule 103 under Regulation M would otherwise prohibit such activity.
Rule 103 prohibits underwriters and selling group members engaged in passive
market making generally from entering a bid or effecting a purchase at a price
that exceeds the highest bid for those securities displayed on the Nasdaq
National Market by a market maker that is not participating in the distribution.
Under Rule 103, each underwriter or selling group member engaged in passive
market making is subject to a daily net purchase limitation equal to 30% of such
entity's average daily trading volume during the two full consecutive calendar
months immediately preceding the date of the filing of the registration
statement under the Securities Act pertaining to the security to be distributed.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including certain liabilities under
the Securities Act, or to contribute to payments the Underwriters may be
required to make in respect thereof.

In connection with the Offerings, the Underwriters may engage in certain
transactions which stabilize, maintain or otherwise affect the price of the
Common Stock. Such transactions may include the purchase of shares of Common
Stock in the open market to cover short positions created by over-allotments or
to stabilize the price of the Common Stock. In general, purchases of a security
for the purpose of stabilization or to reduce a short position could cause the
price of the security to be higher than it might be in the absence of such
purchases. Neither the Company nor any of the Underwriters make any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Common Stock. In
addition, neither the Company nor any of the Underwriters make any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.

Steven B. Sands, the Co-Chairman and Chief Executive Officer of Sands
Brothers & Co., Ltd., one of the Representatives, has been a member of the
Company's Board of Directors since the Company's initial public offering in
April 1994. In addition, in connection with the Company's initial public
offering, Sands Brothers & Co., Ltd. received warrants to purchase an aggregate
of 468,750 shares of Common Stock at an exercise price of $3.30 per share, of
which warrants to purchase 467,579 shares have been exercised.

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.
Mayer, Brown & Platt, Chicago, Illinois, is acting as counsel for the
Underwriters in connection with certain legal matters relating to the sale of
the shares of Common Stock offered hereby.

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 appearing in this Prospectus and elsewhere in the Registration
Statement (as defined herein), have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, which, as to the years 1995 and 1994, is based in part on the reports of
Coopers & Lybrand L.L.P., independent auditors. The financial statements and
schedule referred to above are included in reliance upon such reports given upon
the authority of said firms as experts in accounting and auditing.

AVAILABLE 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

52
<PAGE> 53

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.

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 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;
and

(b) Amendment No. 1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996;

(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8A 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 Offerings 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.

53
<PAGE> 54

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors.............................. F-2
Consolidated Statements of Income for the years ended
December 31, 1994, 1995 and 1996, and for the six-month
periods ended June 30, 1996 and 1997 (unaudited).......... F-3
Consolidated Balance Sheets as of December 31, 1995 and
1996, and as of June 30, 1997 (unaudited)................. F-4
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 1994, 1995 and 1996, and for the
six-month period ended June 30, 1997 (unaudited).......... F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996, and for the six-month
periods ended June 30, 1996 and 1997 (unaudited).......... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 55

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
Brightpoint, Inc.

We have audited the accompanying consolidated balance sheets of
Brightpoint, Inc. as of December 31, 1996 and 1995, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
1995 and 1994 financial statements of Allied Communications, which are included
in the consolidated financial statements, which statements reflect total assets
constituting 33% in 1995, and net sales constituting 36% in 1995 and 45% in 1994
of the related consolidated totals. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to data included for Allied Communications, is based solely on the
report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Brightpoint, Inc. at December 31, 1996
and 1995, and the consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.

ERNST & YOUNG LLP

Indianapolis, Indiana
January 28, 1997

F-2
<PAGE> 56

BRIGHTPOINT, INC.

CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------ -------------------------
1994 1995 1996 1996 1997
---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales............................... $309,227 $419,149 $589,718 $232,856 $419,196
Cost of sales........................... 290,463 390,950 543,878 216,446 385,180
-------- -------- -------- -------- --------
Gross profit............................ 18,764 28,199 45,840 16,410 34,016
Selling, general and administrative
expenses.............................. 11,095 14,813 20,849 7,767 17,136
-------- -------- -------- -------- --------
Income from operations.................. 7,669 13,386 24,991 8,643 16,880
Merger expenses......................... -- -- 2,750 2,750 --
Net investment gain..................... -- -- -- -- 1,432
Interest expense, net................... 164 1,383 2,118 623 3,106
-------- -------- -------- -------- --------
Income before income taxes and minority
interest.............................. 7,505 12,003 20,123 5,270 15,206
Income taxes............................ 1,623 3,838 7,328 1,971 4,540
-------- -------- -------- -------- --------
Income before minority interest......... 5,882 8,165 12,795 3,299 10,666
Minority interest in subsidiaries'
earnings.............................. -- -- 1,758 -- 383
-------- -------- -------- -------- --------
Net income.............................. $ 5,882 $ 8,165 $ 11,037 $ 3,299 $ 10,283
======== ======== ======== ======== ========
Pro forma data (unaudited):
Historical income before income
taxes.............................. $ 7,505 $ 12,003 $ 20,123 $ 5,270
Pro forma income taxes................ 2,950 4,696 7,804 2,447
Minority interest in subsidiaries'
earnings........................... -- -- 1,758 --
-------- -------- -------- --------
Pro forma net income.................. $ 4,555 $ 7,307 $ 10,561 $ 2,823 $ 10,283
======== ======== ======== ======== ========
Pro forma net income excluding the
after-tax effect of one-time merger
expenses........................... $ 4,555 $ 7,307 $ 12,622 $ 4,884 $ 10,283
======== ======== ======== ======== ========
Net income per share:
Historical............................ $ 0.44
========
Pro forma............................. $ 0.32 $ 0.42 $ 0.49 $ 0.14 $ 0.44
======== ======== ======== ======== ========
Pro forma excluding the after-tax
effect of one-time merger
expenses........................... $ 0.32 $ 0.42 $ 0.58 $ 0.23 $ 0.44
======== ======== ======== ======== ========
Weighted average common shares
outstanding........................ 14,276 17,226 21,594 20,809 23,159
</TABLE>

See accompanying notes.

F-3
<PAGE> 57

BRIGHTPOINT, INC.

CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1995 1996 1997
---- ---- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 726 $ 14,255 $ 16,939
Marketable securities..................................... -- 18,000 --
Accounts receivable (less allowance for doubtful accounts
of $691 in 1995, $1,115 in 1996 and $2,161 in 1997).... 57,288 113,119 119,343
Inventories............................................... 56,313 112,916 98,729
Other current assets...................................... 2,220 8,422 10,355
-------- -------- --------
Total current assets........................................ 116,547 266,712 245,366
Property and equipment, net................................. 2,934 8,207 16,806
Goodwill, net............................................... -- 15,232 19,312
Other assets................................................ 306 8,894 4,673
-------- -------- --------
Total assets................................................ $119,787 $299,045 $286,157
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 48,665 $123,231 $ 77,802
Notes payable............................................. 5,663 -- --
-------- -------- --------
Total current liabilities................................... 54,328 123,231 77,802
Notes payable............................................... -- 79,564 97,501
Deferred taxes.............................................. 48 330 330
Stockholder loans........................................... 554 -- --
Minority interest........................................... -- 938 289
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares -- 1,000
No shares issued or outstanding........................ -- -- --
Common stock, $.01 par value:
Authorized shares -- 100,000
Issued and outstanding shares -- 19,894 in 1995, 21,636
in 1996 and 22,318 in 1997........................... 199 216 223
Additional paid-in capital................................ 50,757 73,206 81,840
Foreign currency translation adjustment................... -- 97 355
Unrealized gain on marketable securities, net of tax...... -- 3,929 --
Retained earnings......................................... 13,901 17,534 27,817
-------- -------- --------
Total stockholders' equity.................................. 64,857 94,982 110,235
-------- -------- --------
Total liabilities and stockholders' equity.................. $119,787 $299,045 $286,157
======== ======== ========
</TABLE>

See accompanying notes.

F-4
<PAGE> 58

BRIGHTPOINT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL OTHER EARNINGS TOTAL
------ ------ ---------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1994.............. 9,891 $ 99 $ -- $ -- $ 3,386 $ 3,485
S corporation dividends............... -- -- -- -- (1,161) (1,161)
Transfer of Brightpoint, Inc.
undistributed S corporation
earnings........................... -- -- 1,006 -- (1,006) --
Issuance of common stock.............. 5,390 54 12,023 -- -- 12,077
Net income............................ -- -- -- -- 5,882 5,882
------ ---- ------- ------- ------- --------
Balance at December 31, 1994............ 15,281 153 13,029 -- 7,101 20,283
S corporation dividends............... -- -- -- -- (1,365) (1,365)
Issuance of common stock.............. 3,615 36 33,510 -- -- 33,546
Exercise of stock options and
warrants........................... 998 10 2,942 -- -- 2,952
Tax benefit of exercise of stock
options............................ -- -- 1,276 -- -- 1,276
Net income............................ -- -- -- -- 8,165 8,165
------ ---- ------- ------- ------- --------
Balance at December 31, 1995............ 19,894 199 50,757 -- 13,901 64,857
S corporation dividends............... -- -- -- -- (289) (289)
Transfer of Allied Communications
undistributed S corporation
earnings........................... -- -- 7,115 -- (7,115) --
Exercise of stock options and
warrants........................... 992 10 5,939 -- -- 5,949
Tax benefit of exercise of stock
options............................ -- -- 1,302 -- -- 1,302
Common stock issued in connection with
the purchase of Brightpoint
International Ltd. ................ 750 7 8,093 -- -- 8,100
Foreign currency translation
adjustment......................... -- -- -- 97 -- 97
Unrealized gain on marketable
securities, net of tax............. -- -- -- 3,929 -- 3,929
Net income............................ -- -- -- -- 11,037 11,037
------ ---- ------- ------- ------- --------
Balance at December 31, 1996............ 21,636 216 73,206 4,026 17,534 94,982
Exercise of stock options............. 450 5 2,840 -- -- 2,845
Tax benefit of exercise of stock
options............................ -- -- 2,704 -- -- 2,704
Common stock issued in connection with
the purchase of minority interests
in Brightpoint China Limited,
Brightpoint (UK) Limited and
Brightpoint Australia Pty Ltd...... 232 2 3,090 -- -- 3,092
Foreign currency translation
adjustment......................... -- -- -- 258 -- 258
Change in unrealized gain on
marketable securities, net of
tax................................ -- -- -- (3,929) -- (3,929)
Net income............................ -- -- -- -- 10,283 10,283
------ ---- ------- ------- ------- --------
Balance at June 30, 1997 (unaudited).... 22,318 $223 $81,840 $ 355 $27,817 $110,235
====== ==== ======= ======= ======= ========
</TABLE>

See accompanying notes.

F-5
<PAGE> 59

BRIGHTPOINT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
-------------------------------- -------------------------
1994 1995 1996 1996 1997
---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................ $ 5,882 $ 8,165 $ 11,037 $ 3,299 $ 10,283
Adjustments to reconcile net income to net
cash used by operating activities:
Minority interest.................... -- -- 1,758 -- 383
Depreciation and amortization........ 151 217 1,069 333 1,416
Merger expenses...................... -- -- 2,750 2,750 --
Net investment gain.................. -- -- -- -- (1,432)
Deferred taxes....................... -- -- 282 -- --
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable............. (21,648) (15,776) (43,989) (16,500) (4,063)
Inventories..................... (28,993) (17,094) (45,771) 2,454 15,717
Other current assets............ (867) (1,176) (5,180) 205 (1,021)
Accounts payable and accrued
expenses...................... 34,497 (7,536) 46,519 (13,352) (44,247)
-------- -------- -------- -------- --------
Net cash used by operating activities..... (10,978) (33,200) (31,525) (20,811) (22,964)
INVESTING ACTIVITIES
Capital expenditures...................... (468) (2,521) (5,965) (3,449) (9,650)
Sales (purchases) of marketable
securities.............................. -- -- (11,431) -- 18,528
Acquisition of Brightpoint International
Ltd. ................................... -- -- (5,000) -- --
Acquisition of Hatadicorp Pty Ltd. ....... -- -- (912) -- --
Acquisition of minority interests in
Brightpoint China Limited, Brightpoint
(UK) Limited and Brightpoint Australia
Pty Ltd................................. -- -- -- -- (1,522)
Acquisition of Telnic AB.................. -- -- -- -- (2,512)
Cash acquired in formation of Brightpoint
International Ltd. ..................... -- -- 352 -- --
Increase in other assets.................. -- (259) (7,678) (1,144) (3,089)
-------- -------- -------- -------- --------
Net cash provided (used) by investing
activities.............................. (468) (2,780) (30,634) (4,593) 1,755
FINANCING ACTIVITIES
Net proceeds from notes payable........... 3,448 648 71,740 32,229 17,938
Proceeds from stock offering.............. 12,189 33,546 -- -- --
Proceeds and tax benefit from exercise of
stock options and warrants.............. -- 4,228 7,255 1,356 5,549
Payments on long-term debt................ (4,015) -- -- -- --
Proceeds from (payments on) stockholder
loans................................... 842 (792) (554) (554) --
Merger expenses........................... -- -- (2,168) (2,088) --
S corporation distributions............... (1,169) (1,365) (289) (286) --
-------- -------- -------- -------- --------
Net cash provided by financing
activities.............................. 11,295 36,265 75,984 30,657 23,487
Effect of exchange rate changes on cash
and cash equivalents.................... -- -- (296) -- 406
-------- -------- -------- -------- --------
Net increase (decrease) in cash and cash
equivalents............................. (151) 285 13,529 5,253 2,684
Cash and cash equivalents at beginning of
period.................................. 592 441 726 726 14,255
-------- -------- -------- -------- --------
Cash and cash equivalents at end of
period.................................. $ 441 $ 726 $ 14,255 $ 5,979 $ 16,939
======== ======== ======== ======== ========
</TABLE>

See accompanying notes.

F-6
<PAGE> 60

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED WITH RESPECT TO INFORMATION AS OF JUNE 30, 1997
AND FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 1996 AND 1997)

1. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

Brightpoint, Inc. (the Company) is a leading provider of distribution and
value-added logistics services to the wireless communications industry. The
Company provides its services to its customers, which include network operators,
manufacturers, agents, resellers, dealers and retailers, throughout the world.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company,
its wholly owned subsidiary, Brightpoint International Ltd. (see Note 2 --
Merger and Acquisitions), and Brightpoint International Ltd.'s subsidiaries.
Significant intercompany accounts and transactions have been eliminated in
consolidation.

On June 7, 1996, the Company completed a 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. (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 financial statements
have been restated to reflect the consolidated balance sheets and consolidated
results of operations of both entities as if the merger had been in effect for
all periods presented.

Pro forma net income per share for all periods presented is computed after
taking into consideration the 3,796,875 shares of the Company's common stock
that was exchanged for all of the outstanding common stock of Allied
Communications. Further information pertaining to the merger is presented in
Note 2 -- Merger and Acquisitions.

There were no material differences between the accounting policies of the
Company and Allied Communications. Certain amounts in Allied Communications'
historical combined financial statements were reclassified to conform with the
presentation used by the Company.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

REVENUE RECOGNITION

Revenue is recognized when wireless communications equipment is shipped and
sold or when services have been rendered to customers.

CASH AND CASH EQUIVALENTS

All highly liquid investments with maturities of three months or less when
purchased are considered to be cash equivalents. The carrying amount of cash and
cash equivalents approximates fair value because of the short maturity of those
investments.

CONCENTRATIONS OF RISK

Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
The accounts receivable balance, reflecting the Company's sources of

F-7
<PAGE> 61

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF RISK (CONTINUED)
revenue from wireless network operators, mass retailers and agent dealers, is
dispersed throughout the world, including Asia and the Pacific Rim, North
America, Europe, the Middle East, Africa and Latin America. The Company has no
customer which exceeded 10% of the Company's accounts receivable balance at
December 31, 1996. At June 30, 1997, accounts receivable from Success World
Limited, an exporter in Hong Kong, was $12.5 million and no other customer
balance exceeded 10%. For 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. The Company performs ongoing credit
evaluations of its customers and provides credit in the normal course of
business to a large number of its customers. However, consistent with industry
practice, the Company generally requires no collateral from its customers. The
Company maintains allowances for potential credit losses; such losses have not
been significant and have been within management's expectations.

The Company is dependent on third-party equipment manufacturers,
distributors and dealers for all of its supply of wireless communications
equipment. For the year ended December 31, 1996 and the six months ended June
30, 1997, the Company's three largest suppliers accounted for 51% and 65% of
product sales, respectively. The Company is dependent on the ability of its
suppliers to provide adequate products on a timely basis and on favorable
pricing terms. Although the Company believes that its relationships with its
suppliers are good, the loss of certain principal suppliers could have a
material adverse effect on the Company.

INVENTORIES

Inventories consist of wireless telephones and accessories and are stated
at the lower of cost (first-in, first-out method) or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciation is computed by
the straight-line method using the estimated useful lives of the assets,
generally five to fifteen years. Leasehold improvements are stated at cost and
amortized over the lease term of the associated property. Maintenance and
repairs are charged to expense as incurred.

GOODWILL

Goodwill represents the unamortized cost in excess of the fair value of the
net assets acquired in business combinations, and is amortized on a
straight-line basis over 30 years. The Company continually reviews the valuation
and amortization of goodwill.

IMPAIRMENT OF LONG-LIVED ASSETS

The FASB issued Statement of Financial Accounting Standards No. 121,
Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, which the Company adopted effective January 1, 1996. SFAS No. 121
requires that long-lived assets and certain identifiable intangibles held and
used by the Company be reviewed for possible impairment whenever events or
changes in circumstances indicate the carrying amount of an asset may not be
recoverable. SFAS No. 121 also requires that long-lived assets and certain
identifiable intangibles held for sale, other than those related to discontinued
operations, be reported at the lower of carrying amount or fair value less cost
of disposal. Adoption of the Statement and its application during 1996 did not
have an impact on the Company's financial position or results of operations.

F-8
<PAGE> 62

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

Prior to April 14, 1994, the stockholders of the Company had elected under
Subchapter S of the Internal Revenue Code to include the income of the Company
in their own income for tax purposes. Accordingly, the Company was not subject
to federal and state income taxes until that date.

Effective April 14, 1994, the Company's election under Subchapter S was
terminated. Concurrent with the termination, the Company adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes, which
requires recognition of deferred tax assets and liabilities based on the
difference between the financial statement and tax bases of assets and
liabilities. These deferred taxes are measured by applying current tax laws. The
effect on 1994 net income of adopting the Statement was not material.

Prior to June 7, 1996, the stockholders of Allied Communications had also
elected treatment under Subchapter S of the Internal Revenue Code. Concurrent
with the merger with Allied Communications on June 7, 1996, Allied
Communications' election under Subchapter S was terminated. At that time, the
Company adopted Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes, for the Allied Communications' accounts. The effect on 1996
net income of adopting the Statement was not material.

FOREIGN CURRENCY TRANSLATION

Financial statements of Brightpoint International Ltd.'s subsidiaries are
translated into U.S. dollars using the exchange rate at each balance sheet date
for assets and liabilities and an average exchange rate for each period for
revenues, expenses, gains and losses. Translation adjustments are recorded as a
separate component of stockholders' equity since the local currency for each
subsidiary is, in all cases, its functional currency. Translation adjustments
have not been significant.

PRO FORMA INCOME TAXES

The pro forma income tax amounts presented in the statements of income
represent an estimate of the income taxes that the Company and Allied
Communications would have incurred had they been tax paying entities for all
periods presented.

NET INCOME PER SHARE AMOUNTS

Pro forma net income per share amounts are based on the weighted average
number of common shares and dilutive common share equivalents outstanding during
each period. Common share equivalents consist of shares of common stock issuable
upon exercise of outstanding stock options and stock warrants (see Note 7 --
Stockholders' Equity). Historical net income per share amounts are not presented
because such information is not meaningful.

RECENTLY ISSUED ACCOUNTING STANDARD

In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, Earnings per Share, which replaces the presentation of
primary earnings per share (EPS) with basic EPS and replaces fully diluted EPS
with diluted EPS. It also requires dual presentation of basic and diluted EPS on
the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the components of the basic EPS
computation to the components of the diluted EPS computation. SFAS No. 128 is
effective for both interim and annual periods ending after December 15, 1997.
Earlier adoption is not permitted. Upon adoption, all prior-period EPS data
presented will be restated. The Company does not anticipate the adoption of SFAS
No. 128 to have a significant effect on EPS.

F-9
<PAGE> 63

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK OPTIONS

In 1996, the Company adopted Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation. In accordance with SFAS No.
123, the Company uses the intrinsic value method to account for stock options,
consistent with the existing rules established by Accounting Principles Board
No. 25, Accounting for Stock Issued to Employees. Accordingly, no compensation
expense has been recognized for stock options granted to employees.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Article 10 of Regulation S-X
of the Securities Exchange Act of 1934. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.

In the opinion of the Company, all adjustments (consisting of only normal
recurring accruals) considered necessary to present fairly the consolidated
financial position as of June 30, 1997 and the consolidated statements of
income, stockholders' equity and cash flows for the six-month periods ended June
30, 1996 and 1997 have been included.

2. MERGER AND ACQUISITIONS

On June 7, 1996, the Company completed a merger with Allied Communications
through the exchange of 3,796,875 shares of newly-issued Company common stock in
exchange for all of the outstanding shares of Allied Communications' common
stock. The merger was structured as a tax-free reorganization and was accounted
for using the pooling-of-interests method of accounting. In connection with the
merger, the Company recorded a nonrecurring charge of $2.75 million ($2.1
million net of tax) in the quarter ended June 30, 1996, for transaction costs,
including investment banking, legal, and accounting fees, and for estimated
costs associated with the merger. Net sales and net income for the Company and
Allied Communications prior to the combination are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED THREE
DECEMBER 31, MONTHS ENDED
-------------------- MARCH 31,
1994 1995 1996
---- ---- ------------
<S> <C> <C> <C>
Net sales
Brightpoint, Inc.......................................... $169,268 $269,359 $ 87,662
Allied Communications..................................... 139,959 149,790 25,298
-------- -------- --------
Combined............................................... $309,227 $419,149 $112,960
======== ======== ========
Net income, giving effect to pro forma income taxes
Brightpoint, Inc. ........................................ $ 2,843 $ 5,706 $ 2,023
Allied Communications..................................... 1,712 1,601 454
-------- -------- --------
Combined............................................... $ 4,555 $ 7,307 $ 2,477
======== ======== ========
</TABLE>

On August 1, 1996, the Company completed the formation of Brightpoint
International Ltd., a joint venture with Technology Resources International
Limited. The Company maintained effective controlling interest in Brightpoint
International Ltd., and therefore the operations were consolidated for financial
reporting purposes.

F-10
<PAGE> 64

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. MERGER AND ACQUISITIONS (CONTINUED)
The Company owned 50% of Brightpoint International Ltd. until November
1996, when the Company acquired the remaining 50% of the subsidiary. The
combination was accounted for using the purchase method. The purchase price for
the remaining equity interest consisted of 750,000 unregistered shares of the
Company's common stock, valued at $8.1 million, and $5.0 million of cash. The
resulting goodwill of $12.6 million is being amortized over 30 years.

On October 18, 1996, Brightpoint International Ltd. acquired the business
and operations of Hatadicorp Pty Ltd. (Hatadi) based in Sydney, Australia. The
newly-formed Brightpoint Australia Pty Ltd. is owned 80 percent by Brightpoint
International Ltd. and 20 percent by the former shareholders of Hatadi. The
combination was accounted for using the purchase method and the operations of
Brightpoint Australia Pty Ltd. are consolidated for financial reporting
purposes. The purchase price of $2.8 million was allocated principally to
goodwill which is being amortized over 30 years.

In February 1997, the Company acquired the balance of ownership of its
majority-owned subsidiary, Brightpoint China Limited. The 20 percent minority
interest was owned by members of management of that subsidiary. The purchase
price for the remaining equity interest consisted of 96,775 of unregistered
shares of the Company's common stock, valued at $1.3 million, and $750,000 in
cash. The acquisition was accounted for using the purchase method. The resulting
goodwill of $1.6 million is being amortized over 30 years.

Effective April 1, 1997, the Company announced that it had acquired the
balance of ownership of two of its majority-owned subsidiaries, Brightpoint (UK)
Limited and Brightpoint Australia Pty Ltd. The 20 percent minority interests
were owned by members of management of each of the respective subsidiaries. The
purchase price of the minority ownership interests consisted of approximately
135,470 of unregistered shares of the Company's common stock, valued at $1.8
million, and approximately $772,000 in cash. The acquisitions were accounted for
using the purchase method. The purchase price of approximately $2.6 million was
allocated principally to goodwill which is being amortized over 30 years.

Effective April 1, 1997, the Company's wholly-owned subsidiary, Brightpoint
Sweden AB, acquired the business and certain net assets of Telnic AB, a
distributor of wireless communications equipment located in Sweden. The purchase
price consisted of approximately $2.5 million in cash with an additional
$300,000 payable upon execution of a key contract and up to an additional $3.6
million depending upon the future financial performance of Brightpoint Sweden
AB. This acquisition was accounted for using the purchase method and the
resulting goodwill was approximately $600,000 which is being amortized over 30
years.

The impact of these acquisitions was not material in relation to the
Company's results of operations. Consequently, pro forma information is not
presented.

3. INVESTMENTS

During the fourth quarter of 1996, the Company acquired 1,000,000 shares of
common stock of CellStar Corporation for investment purposes. CellStar
Corporation is engaged in substantially the same business as the Company. The
cost basis of this investment was $11.4 million and the fair value at December
31, 1996 (based on quoted market price) was $18.0 million. In accordance with
Statement of Financial Accounting Standards No. 115, Accounting for Certain Debt
and Equity Securities, the Company classified the available-for-sale investment
as a current asset and reported it at fair value with the unrealized gain, net
of tax, classified as a separate component of stockholders' equity at December
31, 1996.

In December 1996, the Company acquired 25 Series E convertible debentures
of Pocket Communications, Inc. (Pocket). Pocket is a privately-held company
offering wireless telecommunications services, specifically in the area of
Personal Communications Services (PCS). The price of each debenture was $200,000
resulting in a total investment of $5.0 million. Each debenture is convertible
into 25,000 shares of

F-11
<PAGE> 65

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. INVESTMENTS (CONTINUED)
common stock of Pocket, resulting in 625,000 total convertible shares. The
debentures earn interest at a rate of 2.5% above Prime Rate (10.75% at December
31, 1996) and have a maturity date of December 12, 1998, at which time the
Company can demand repayment or exercise its conversion rights. Assuming
conversion, the Company's ownership interest in Pocket would approximate 1%.
This investment was carried at cost and classified in other assets at December
31, 1996. There is no quoted market price for this investment. However, because
the instrument was acquired in late 1996 and no events had occurred that would
significantly impact the value of the instrument, the cost of the investment at
December 31, 1996 was assumed to approximate fair value.

During the first quarter of 1997, the Company realized a gain on the sale
of its investment in CellStar Corporation. The gain, net of transaction costs,
including related bonuses to certain key employees, was approximately $8.3
million. In addition, on March 31, 1997, Pocket filed for protection under
Chapter 11 of the U.S. Bankruptcy Code. Accordingly, the Company recorded $6.9
million of losses on its investments in Pocket and two smaller equity
investments. Excluding the impact of the resulting net investment gain of $1.4
million and related income taxes, net income per share for the six months ended
June 30, 1997 would have been $0.41.

4. PROPERTY AND EQUIPMENT

The components of property and equipment are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------- JUNE 30,
1995 1996 1997
---- ---- --------
(UNAUDITED)
<S> <C> <C> <C>
Furniture and equipment..................................... $ 964 $2,065 $ 4,042
Information systems equipment and software.................. 1,985 5,917 12,307
Leasehold improvements...................................... 495 1,450 2,826
------ ------ -------
3,444 9,432 19,175
Less accumulated depreciation............................... 510 1,225 2,369
------ ------ -------
Net property and equipment.................................. $2,934 $8,207 $16,806
====== ====== =======
</TABLE>

5. NOTES PAYABLE

On June 24, 1997, the Company entered into a new $200 million five-year
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"). The new credit facility has replaced the Company's
two previous bank credit facilities of up to $125 million in the aggregate. The
new credit facility matures in June 2002 and generally bears interest, at the
Company's option, at (i) the greater of The First National Bank of Chicago's
corporate base rate and 0.50% plus the Federal funds effective rate (the "Base
Rate") or (ii) the rate at which deposits in United States dollars or
Eurocurrencies are offered by The First National Bank of Chicago to first-class
banks in the London interbank market plus a spread ranging from 40 to 112.5
basis points (based on the Company's leverage ratio) plus a spread reserve, if
any. Borrowings by the Company's non-United States subsidiaries will bear
interest at rates negotiated with the applicable lenders. Under the new line of
credit, at June 30, 1997, there was $97.5 million outstanding, an aggregate of
$15.6 million in letters of credit outstanding and $86.9 million of credit
remaining available.

F-12
<PAGE> 66

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. NOTES PAYABLE (CONTINUED)
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.

At December 31, 1996, the Company had a $75 million credit agreement with
Bank One, Indiana, N.A., as agent for a group of banks. On January 28, 1997, the
Company amended its credit agreement with Bank One to increase available
borrowings to $100 million. In addition, at December 31, 1996, Brightpoint
International Ltd. had a $25 million line of credit with The First National Bank
of Chicago to provide capital for the Company's international operating
divisions. Borrowings on the Bank One credit agreement and The First National
Bank of Chicago line of credit were $56.0 million and $21.6 million at December
31, 1996, respectively.

At December 31, 1996, the Company was in compliance with the covenants in
its credit agreements. Interest payments for 1994, 1995, and 1996 were
approximately $277,000, $1,525,000 and $1,556,000, respectively. The carrying
amount of the Company's borrowings under its variable-rate lines of credit
approximates fair value.

At December 31, 1995, outstanding debt of $5.7 million was classified as a
current liability and consisted primarily of a note payable with Bank One that
had a current maturity schedule.

6. INCOME TAXES

For financial reporting purposes, income before income taxes and minority
interest, by tax jurisdiction, is comprised of the following (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------- -------------------------
1994 1995 1996 1996 1997
---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
United States................ $7,505 $12,003 $13,706 $5,270 $ 6,404
Foreign...................... -- -- 6,417 -- 8,802
------ ------- ------- ------ -------
$7,505 $12,003 $20,123 $5,270 $15,206
====== ======= ======= ====== =======
</TABLE>

The pro forma provision for income taxes represents the estimated income
taxes that would have been reported had the Company been subject to income taxes
for each of the periods presented. In 1994 and 1995, the pro forma income tax
expense is comprised of a provision for federal income taxes at the statutory
rate plus a state income tax provision, net of federal income tax benefit. No
other items materially impact the pro forma income tax expense during those two
years. Due to the significance of the Subchapter S earnings (of both the Company
and Allied Communications) during 1994 and 1995, a reconciliation of historical
income tax expense is not presented as it would not be meaningful.

F-13
<PAGE> 67

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES (CONTINUED)
The reconciliation of income tax expense for 1996 computed at the U.S.
federal statutory tax rate to the Company's effective income tax rate is as
follows:

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
---------- ---------
<S> <C> <C>
Tax at U.S. federal statutory rate...................... 35.0% 35.0%
State and local income taxes, net of U.S. federal
benefit............................................... 3.7 3.7
Allied Communications' Subchapter S earnings............ (2.5) --
Non-deductible merger expenses.......................... 1.7 1.7
Foreign sales corporation and foreign rates............. (1.5) (1.6)
---- ----
36.4% 38.8%
==== ====
</TABLE>

For the six months ended June 30, 1997, the difference between the U.S.
Federal statutory rate and the Company's effective income tax rate is primarily
attributable to lower foreign sales corporation and foreign tax rates.

Significant components of the historical and pro forma provision for income
taxes are as follows (in thousands):

<TABLE>
<CAPTION>
PRO FORMA (UNAUDITED) HISTORICAL
-------------------------------- --------------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Current:
Federal....................... $2,590 $3,763 $4,758 $1,357 $3,028 $4,340
State......................... 642 1,017 1,131 410 978 1,035
Foreign....................... -- -- 2,184 -- -- 2,184
------ ------ ------ ------ ------ ------
3,232 4,780 8,073 1,767 4,006 7,559
Deferred:
Federal....................... (227) (73) (237) (116) (146) (203)
State......................... (55) (11) (32) (28) (22) (28)
------ ------ ------ ------ ------ ------
(282) (84) (269) (144) (168) (231)
------ ------ ------ ------ ------ ------
$2,950 $4,696 $7,804 $1,623 $3,838 $7,328
====== ====== ====== ====== ====== ======
</TABLE>

Components of the Company's deferred taxes are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1995 1996
---- ----
<S> <C> <C>
Deferred tax assets:
Capitalization of inventory costs......................... $ 204 $ 612
Allowance for doubtful accounts........................... 156 372
------- -------
360 984
Deferred tax liabilities:
Depreciation.............................................. (48) (330)
Unrealized gain on marketable securities.................. -- (2,640)
------- -------
(48) (2,970)
------- -------
$ 312 $(1,986)
======= =======
</TABLE>

F-14
<PAGE> 68

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES (CONTINUED)
Income tax payments were approximately $1,976,000, $1,931,000 and
$6,199,000 for 1994, 1995 and 1996, respectively.

Undistributed earnings of the Company's foreign operations were
approximately $6.0 million at December 31, 1996. Those earnings are considered
to be indefinitely reinvested and accordingly, no provision for U.S. federal and
state income taxes or foreign withholding taxes has been made. Upon distribution
of those earnings, the Company would be subject to U.S. income taxes (subject to
a reduction for foreign tax credits) and withholding taxes payable to the
various foreign countries. Determination of the amount of unrecognized deferred
U.S. income tax liability is not practicable; however, unrecognized foreign tax
credit carryovers would be available to reduce some portion of the U.S.
liability.

7. STOCKHOLDERS' EQUITY

The Company has declared the following stock splits which were effected in
the form of stock dividends:

<TABLE>
<CAPTION>
DECLARATION DATE DIVIDEND PAYMENT DATE SPLIT RATIO
- ---------------- --------------------- -----------
<S> <C> <C>
August 31, 1995 September 20, 1995 5 for 4
November 12, 1996 December 17, 1996 3 for 2
January 28, 1997 March 3, 1997 5 for 4
</TABLE>

Accordingly, all references in the financial statements related to share
amounts, per share amounts, average shares outstanding and information
concerning stock option plans have been adjusted retroactively to reflect these
stock splits.

In April 1994, the Company consummated the sale of 5.4 million shares
(including the underwriters' over-allotment option) of common stock for $2.67
per share in an initial public offering. In connection with the initial public
offering and the conversion of the Company from an S corporation to a C
corporation, the undistributed retained earnings generated while an S
corporation were transferred to additional paid-in capital.

In October 1995, the Company consummated the sale of 3.6 million shares of
common stock (including the sale of 520,000 shares pursuant to the underwriters'
over-allotment option) at a price of $10.14 per share in a public offering. The
net proceeds were used to repay $10.3 million outstanding under its line of
credit and for working capital and general corporate purposes.

On April 24, 1997, the stockholders of the Company approved an amendment to
the Company's Certificate of Incorporation to increase the authorized number of
shares of common stock from 25,000,000 to 100,000,000.

In connection with the Allied merger completed in June 1996, Allied
Communications' Subchapter S election was terminated. Accordingly, the
undistributed retained earnings generated while Allied Communications were
Subchapter S corporations were transferred to additional paid-in capital.

The Company has authorized 1,000,000 shares of preferred stock which remain
unissued. The Board of Directors has not yet determined the preferences,
qualifications, relative voting or other rights of the authorized shares of
preferred stock.

STOCK OPTION PLANS

The Company has three fixed stock option plans which reserve shares of
common stock for issuance to executives, key employees and directors.

In March 1994, the Company adopted the 1994 Stock Option Plan whereby
employees of the Company and others are eligible to be granted incentive stock
options or non-qualified stock options. A total of 937,500

F-15
<PAGE> 69

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. STOCKHOLDERS' EQUITY (CONTINUED)
STOCK OPTION PLANS (CONTINUED)
common shares were originally reserved for grant under the Plan. During 1995, an
amendment was approved which authorized an increase in shares reserved for
issuance to a total of 2,109,375 shares and, in April 1997, an amendment was
approved which authorized an increase in shares reserved for issuance to a total
of 4,100,000 shares. In October 1996, the Company adopted the 1996 Stock Option
Plan whereby employees of the Company and others are eligible to be granted
non-qualified stock options. A total of 1,875,000 common shares were reserved
for grant under the Plan. For both Plans, a committee of the Board of Directors
determines the time or times at which the options will be granted, selects the
employees or others to whom options will be granted and determines the number of
shares covered by each option, purchase price, time of exercise (not to exceed
ten years from the date of the grant) and other terms.

In March 1994, the Company adopted the Non-employee Directors Stock Option
Plan whereby non-employee directors are eligible to be granted non-qualified
stock options. A total of 234,375 shares were reserved for grant under the plan.
During 1995, an amendment was approved which authorized an increase in shares
reserved for issuance under the plan to 468,750 shares. Options to purchase
10,000 shares of common stock are granted to each newly elected non-employee
director and, on the first day of each year, each individual elected and
continuing as a non-employee director receives an option to purchase 4,000
shares of common stock.

The exercise price of stock options granted may not be less than the fair
market value of a share of common stock on the date of the grant. Options become
exercisable in periods ranging from one to three years. Information regarding
these option plans for 1995 and 1996 is as follows:

<TABLE>
<CAPTION>
1995 1996
----------- -------------------------------
WEIGHTED AVERAGE
SHARES SHARES EXERCISE PRICE
------ ------ ----------------
<S> <C> <C> <C>
Options outstanding, beginning of year.............. 1,034,767 1,247,179 $ 5.71
Options granted..................................... 814,454 1,705,366 12.31
Options exercised................................... 594,228 344,183 4.76
Options canceled.................................... 7,814 32,422 11.30
----------- ------------
Options outstanding, end of year.................... 1,247,179 2,575,940 10.13
=========== ============
Option price range at end of year................... $2.67-$8.90 $2.67-$19.20
Option price range for exercised shares............. $2.67-$5.28 $2.67-$ 8.90
Options available for grant at year end............. 927,028
Weighted average fair value of options granted
during the year................................... $ 4.23
</TABLE>

The following table summarizes information about the fixed price stock
options outstanding at December 31, 1996.

<TABLE>
<CAPTION>
WEIGHTED
NUMBER AVERAGE NUMBER
RANGE OF OUTSTANDING AT REMAINING WEIGHTED AVERAGE EXERCISABLE AT WEIGHTED AVERAGE
EXERCISE PRICES DECEMBER 31, 1996 CONTRACTUAL LIFE EXERCISE PRICE DECEMBER 31, 1996 EXERCISE PRICE
--------------- ----------------- ---------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 2.67-$ 6.02........ 270,937 3 years $ 3.15 194,565 $2.67
$ 6.46-$ 8.90........ 656,253 3 years $ 7.37 375,002 $7.10
$10.00-$12.46........ 1,565,625 5 years $12.23 -- --
$14.66-$19.20........ 83,125 5 years $15.27 -- --
</TABLE>

F-16
<PAGE> 70

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. STOCKHOLDERS' EQUITY (CONTINUED)
STOCK OPTION PLANS (CONTINUED)
Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, which also requires that the information be determined
as if the Company has accounted for its employee stock options granted
subsequent to December 31, 1994, under the fair value method as defined by that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1995 and 1996: risk-free interest rate of 5.5%; a dividend yield
of 0.0%; volatility factor of the expected market price of the Company's common
stock of .51; and an expected life of the options of 1.99 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the
options and stock warrants, discussed below, are amortized to expense over the
related vesting period. Because compensation expense is recognized over the
vesting period, the initial impact on pro forma net income may not be
representative of compensation expense in future years, when the effect of
amortization of multiple awards would be reflected in the consolidated
statements of income. The Company's pro forma information giving effect to the
estimated compensation expense related to stock options and warrants is as
follows (in thousands, except per share data):

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Pro forma net income(1)..................................... $6,336 $11,638
Pro forma earnings per share................................ $ 0.37 $ 0.55
</TABLE>

- ------------
(1) Excluding the after-tax effect of one-time merger expenses.

STOCK WARRANTS

In connection with the initial public offering, the Company issued warrants
to purchase up to 468,750 shares of common stock initially exercisable at $3.30
per share. During 1995 and 1996, substantially all of the warrants were
exercised.

In January 1995, the Company issued warrants to purchase up to 596,430
shares of common stock at $6.96 per share in connection with an agreement with
HSN Direct, Inc. During 1996, 573,461 of the warrants were exercised. The
remaining outstanding warrants are exercisable by the holders at any time until
January 16, 2000.

8. LEASE ARRANGEMENTS

The Company leases certain furniture and equipment as well as its office
and warehouse/distribution space under operating leases.

Total rent expense under all operating leases was $446,000, $540,000 and
$1,469,000 for 1994, 1995 and 1996, respectively.

F-17
<PAGE> 71

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. LEASE ARRANGEMENTS (CONTINUED)
The aggregate future minimum payments on the above leases are as follows
(in thousands):

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S> <C>
1997................................................. $ 1,828
1998................................................. 1,693
1999................................................. 1,628
2000................................................. 1,506
2001................................................. 1,448
Thereafter........................................... 7,075
-------
$15,178
=======
</TABLE>

9. GEOGRAPHIC OPERATIONS

The Company operates in worldwide markets. Its business activities are
conducted in four divisions: Asia-Pacific; North America; Europe, Middle East
and Africa; and Latin America. A summary of the Company's operations by division
is presented below (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------- --------------------------
1994 1995 1996 1996 1997
---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET SALES:
Asia-Pacific............................ $ -- $ 7,533 $127,629 $ 29,824 $183,611
North America........................... 252,262 269,730 287,377 155,884 129,526
Europe, Middle East and Africa.......... 16,927 46,284 76,292 5,235 86,237
Latin America........................... 40,038 95,602 98,420 41,913 19,822
-------- -------- -------- -------- --------
$309,227 $419,149 $589,718 $232,856 $419,196
======== ======== ======== ======== ========
INCOME BEFORE INCOME TAXES AND MINORITY
INTERESTS:
Asia-Pacific............................ $ -- $ -- $ 5,135 $ 1,827 $ 8,225
North America........................... 6,533 9,265 7,113 1,758 4,938
Europe, Middle East and Africa.......... -- -- 3,607 490 577
Latin America........................... 972 2,738 4,268 1,195 1,466
-------- -------- -------- -------- --------
$ 7,505 $ 12,003 $ 20,123 $ 5,270 $ 15,206
======== ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------- JUNE 30,
1994 1995 1996 1997
---- ---- ---- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
IDENTIFIABLE ASSETS:
Asia-Pacific....................................... $ -- $ -- $ 54,958 $ 85,479
North America...................................... 72,118 92,465 126,003 118,580
Europe, Middle East and Africa..................... -- -- 44,451 46,329
Latin America...................................... 10,727 27,322 73,633 35,769
-------- -------- -------- --------
$ 82,845 $119,787 $299,045 $286,157
======== ======== ======== ========
</TABLE>

F-18
<PAGE> 72

BRIGHTPOINT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. GEOGRAPHIC OPERATIONS (CONTINUED)

For geographic reporting purposes only, net sales are recorded in the
region in which the customer is located. In 1994 and 1995, sales in the
Asia-Pacific and Europe, Middle East and Africa divisions were export sales from
North America operations. As a result, the Company has not allocated income
before income taxes and minority interest and identifiable assets to those
divisions in 1994 and 1995.

10. EMPLOYEE BENEFIT PLAN

On January 1, 1996, the Company adopted an employee savings plan which
permits employees with at least one year of service to make contributions by
salary reduction pursuant to section 401(k) of the Internal Revenue Code. The
Company matches 25% of employee contributions, up to 6%, in Company common
stock. In connection with the required match, the Company's contribution to the
Plan was $56,400 in 1996.

F-19
<PAGE> 73

[Map of world depicting locations of Brightpoint, Inc's
World Headquarters, Operations Centers and Sales Centers]

Serving the global wireless communications industry in
over 75 countries and on six continents.

[Picture of information systems [Picture of wireless handsets]
center in Brightpoint, Inc's
World Headquarters in
Indianapolis, Indiana]

[Picture of salesperson in
Brightpoint, Inc's World
Headquarters in Indianapolis,
Indiana]
Brightpoint and design SM and
Brightlink TM are the property
of the Company. All other [Picture of Brightpoint,
trademarks, tradenames Inc's Indianapolis, Indiana
and service marks used Operation's Center]
herein are the property
of their respective owners.

[Brightpoint, Inc. Logo]
<PAGE> 74

======================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................... 3
Special Note Regarding Forward-Looking
Statements........................... 7
Risk Factors........................... 7
Use of Proceeds........................ 15
Price Range of Common Stock............ 15
Dividend Policy........................ 16
Capitalization......................... 16
Selected Consolidated Financial Data... 17
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 19
Business............................... 27
Management............................. 35
Principal and Selling Stockholders..... 42
Certain Transactions................... 43
Description of Capital Stock........... 44
Shares Eligible for Future Sale;
Registration Rights.................. 47
Certain United States Federal Tax
Consequences to Non-United States
Holders.............................. 48
Underwriting........................... 50
Legal Matters.......................... 52
Experts................................ 52
Available Information.................. 52
Incorporation of Certain Documents by
Reference............................ 53
Index to Consolidated Financial
Statements........................... F-1
</TABLE>

======================================================
======================================================

4,500,000 SHARES

BRIGHTPOINT LOGO

COMMON STOCK
---------------------------
PROSPECTUS
---------------------------

MERRILL LYNCH & CO.
COWEN & COMPANY
UBS SECURITIES
SANDS BROTHERS & CO., LTD.
AUGUST 6, 1997

======================================================
<PAGE> 75

[ALTERNATE INTERNATIONAL PROSPECTUS PAGE]

PROSPECTUS

4,500,000 SHARES

BRIGHTPOINT LOGO

COMMON STOCK
------------------------

Of the 4,500,000 shares of Common Stock of Brightpoint, Inc., a Delaware
corporation (the "Company" or "Brightpoint"), being offered hereby, 2,200,000
shares are being offered by the Company and 2,300,000 shares are being offered
by certain stockholders of the Company (the "Selling Stockholders"). The Company
will not receive any of the proceeds from the sale of shares of Common Stock by
the Selling Stockholders. See "Principal and Selling Stockholders."

Of the 4,500,000 shares of Common Stock offered hereby, 900,000 are being
offered initially outside the United States and Canada by the International
Managers (the "International Offering") and 3,600,000 shares are being offered
initially in a concurrent offering inside the United States and Canada by the
U.S. Underwriters (the "U.S. Offering," and together with the International
Offering, the "Offerings"). The public offering price and the underwriting
discount per share are identical for each of the Offerings. See "Underwriting."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------

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.

<TABLE>
<CAPTION>
======================================================================================================================
PROCEEDS TO
PRICE UNDERWRITING PROCEEDS TO SELLING
TO PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Per Share................. $30.00 $1.50 $28.50 $28.50
- ----------------------------------------------------------------------------------------------------------------------
Total(3).................. $135,000,000 $6,750,000 $62,700,000 $65,550,000
======================================================================================================================
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Before deducting expenses of the Offerings payable by the Company estimated
to be $1,250,000. The Selling Stockholders will not be paying any expenses
of the Offerings.
(3) The Company has granted an option to the International Managers, exercisable
within 30 days of the date hereof, to purchase up to 120,000 additional
shares of Common Stock and an option to the U.S. Underwriters, exercisable
within 30 days of the date hereof, to purchase up to 480,000 additional
shares of Common Stock solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $153,000,000, $7,650,000 and
$79,800,000, respectively. See "Underwriting."
------------------------

The shares of Common Stock are being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to the approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the shares of Common Stock will be made in New York, New York
on or about August 12, 1997.
------------------------
MERRILL LYNCH INTERNATIONAL
COWEN INTERNATIONAL L.P.
UBS LIMITED
SANDS BROTHERS & CO., LTD.
------------------------

The date of this Prospectus is August 6, 1997.
<PAGE> 76
[Alternate International Prospectus Page]

UNDERWRITING

Subject to the terms and conditions set forth in an international purchase
agreement (the "International Purchase Agreement") among the Company, each of
the Selling Stockholders and each of the underwriters named below (the
"International Managers"), and concurrently with the sale of 3,600,000 shares of
Common Stock to the U.S. Underwriters (as defined below), the Company and the
Selling Stockholders have agreed to sell to the International Managers, and each
of the International Managers severally has agreed to purchase from the Company
and the Selling Stockholders, the number of shares of Common Stock set forth
opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
---------------------- ---------
<S> <C>
Merrill Lynch International................................. 225,000
Cowen International L.P..................................... 225,000
UBS Limited................................................. 225,000
Sands Brothers & Co., Ltd................................... 225,000
-------
Total........................................... 900,000
=======
</TABLE>

Merrill Lynch International, Cowen International L.P., UBS Limited and
Sands Brothers & Co., Ltd. are acting as representatives (the "International
Representatives") of the International Managers.

The Company and the Selling Stockholders have also entered into a purchase
agreement (the "U.S. Purchase Agreement") and, together with the International
Purchase Agreement, the "Purchase Agreements") with certain underwriters in the
United States and Canada (collectively, the "U.S. Underwriters," and together
with the International Managers, the "Underwriters"), for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Cowen & Company, UBS
Securities LLC and Sands Brothers & Co., Ltd. are acting as representatives (the
"U.S. Representatives" and, together with the International Representatives, the
"Representatives"). Subject to the terms and conditions set forth in the U.S.
Purchase Agreement, and concurrently with the sale of 900,000 shares of Common
Stock to the International Managers pursuant to the International Purchase
Agreement, the Company and the Selling Stockholders have agreed to sell to the
U.S. Underwriters, and the U.S. Underwriters have severally agreed to purchase
from the Company and the Selling Stockholders, an aggregate of 3,600,000 shares
of Common Stock. The public offering price per share of Common Stock and the
underwriting discount per share of Common Stock are identical under the
International Purchase Agreement and the U.S. Purchase Agreement. The respective
percentages of the Common Stock to be sold by each of the Company and the
Selling Stockholders will be identical in the U.S. Offering and the
International Offering.

In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such agreement if any of the shares of Common Stock being sold pursuant to
such agreement are purchased. Under certain circumstances involving a default by
an Underwriter, the commitments of non-defaulting International Managers or U.S.
Underwriters (as the case may be) may be increased or the International Purchase
Agreement or the U.S. Purchase Agreement (as the case may be) may be terminated.
The sale of Common Stock to the International Managers is conditioned upon the
sale of Common Stock to the U.S. Underwriters and vice versa.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") providing for the
coordination of their activities. The Underwriters are permitted to sell shares
of Common Stock to each other for purposes of resale at the initial public
offering price, less an amount not greater than the selling concession. Under
the terms of the Intersyndicate Agreement, the International Managers and any
dealer to whom they sell shares of Common Stock will not offer to sell or sell
shares of Common Stock to persons who are United States or Canadian persons or
to persons they believe intend to resell to persons who are United States or
Canadian persons, and the U.S. Underwriters and any dealer to whom they sell
shares of Common Stock will not offer to sell or sell shares of Common Stock to
non-United States persons or to non-Canadian persons or to persons they believe
intend to

50
<PAGE> 77
[Alternate International Prospectus Page]

resell to non-United States persons or non-Canadian persons, except in the case
of transactions pursuant to the Intersyndicate Agreement.

The International Representatives have advised the Company and the Selling
Stockholders that the International Managers propose initially to offer the
shares of Common Stock to the public at the public offering price set forth on
the cover page of this Prospectus, and to certain selected dealers at such price
less a concession not in excess of $.90 per share. The International Managers
may allow, and such dealers may reallow, a discount not in excess of $.10 per
share on sales to certain other dealers. After the initial public offering, the
public offering price, concession and discount may be changed.

Each International Manager has agreed that (i) it has not offered or sold,
and will not for a period of six months following consummation of the Offerings
offer or sell, in the United Kingdom by means of any document, any shares of
Common Stock offered hereby, other than to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances that do not constitute an offer to the public within the meaning
of the Public Offers of Securities Regulations of 1995; (ii) it has complied
with and will comply with all applicable provisions of the Financial Services
Act of 1986 with respect to anything done by it in relation to the Common Stock
in, from or otherwise involving the United Kingdom and (iii) it has only issued
or passed on and will only issue or pass on to any person in the United Kingdom
any document received by it in connection with the issue of the Common Stock if
that person is of a kind described in Article 11(3) of the Financial Services
Act of 1986 (Investment Advertisements)(Exemptions) Order 1996, as amended, or
is a person to whom the document may otherwise lawfully be issued or passed on.

Purchasers of the shares of Common Stock offered hereby may be required to
pay stamp taxes and other charges in accordance with the laws and practices of
the country of purchase, in addition to the offering price set forth on the
cover page hereof.

The Company has granted to the International Managers an option,
exercisable within 30 days after the date of this Prospectus, to purchase up to
an aggregate of 120,000 additional shares of Common Stock at the public offering
price set forth on the cover page of this Prospectus, less the underwriting
discount. The International Managers may exercise this option only to cover
over-allotments, if any, made on the sale of the shares of Common Stock offered
hereby. To the extent that the International Managers exercise this option, each
International Manager will be obligated, subject to certain conditions, to
purchase a number of additional shares of Common Stock proportionate to such
International Manager's initial amount reflected in the foregoing table. The
Company has also granted an option to the U.S. Underwriters, exercisable within
30 days after the date of this Prospectus, to purchase up to an aggregate of
480,000 additional shares of Common Stock to cover over-allotments, if any, on
terms similar to those granted to the International Managers. If purchased, the
Underwriters will offer such additional shares on the same terms as those on
which the 4,500,000 shares are being offered.

51
<PAGE> 78

[Alternate International Prospectus Page]

members participating in a distribution that are also Nasdaq National Market
makers in the security being distributed to engage in limited market making
transactions during the period when Rule 103 under Regulation M would otherwise
prohibit such activity. Rule 103 prohibits underwriters and selling group
members engaged in passive market making generally from entering a bid or
effecting a purchase at a price that exceeds the highest bid for those
securities displayed on the Nasdaq National Market by a market maker that is not
participating in the distribution. Under Rule 103, each underwriter or selling
group member engaged in passive market making is subject to a daily net purchase
limitation equal to 30% of such entity's average daily trading volume during the
two full consecutive calendar months immediately preceding the date of the
filing of the registration statement under the Securities Act pertaining to the
security to be distributed.

LEGAL MATTERS

EXPERTS

AVAILABLE INFORMATION

52
<PAGE> 79
[Alternate International Prospectus Page]

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.

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;
and

(b) Amendment No. 1 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996;

(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8A declared effective April 7, 1994 and
any amendments thereto.

53
<PAGE> 80

[ALTERNATE INTERNATIONAL PROSPECTUS PAGE]

======================================================

------------------------

TABLE OF CONTENTS

======================================================
======================================================

4,500,000 SHARES

BRIGHTPOINT LOGO

COMMON STOCK
---------------------------
PROSPECTUS
---------------------------

MERRILL LYNCH INTERNATIONAL
COWEN INTERNATIONAL L.P.
UBS LIMITED
SANDS BROTHERS & CO., LTD.
AUGUST 6, 1997

======================================================