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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 10, 1999
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BRIGHTPOINT, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-23494 35-1778566
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
6402 Corporate Drive, Indianapolis, Indiana 46278
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (317) 297-6100
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(Former name or former address, if changed since the last report)
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Item 5. Other Events.
On March 10, 1999 Brightpoint, Inc. issued a press release announcing that, due
to recent developments, it anticipated that its revenue and net income for the
quarter ending March 31, 1999 and for the year ending December 31, 1999 will
fall below expectations. The information contained in such press release is
incorporated herein by reference to the copy of the press release filed as
Exhibit 99.1 to this report on Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a)-(b) Not Applicable
(c) Exhibits.
99.1 Brightpoint, Inc. Press Release dated March 10, 1999.
99.2 Cautionary Statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRIGHTPOINT, INC.
By /s/ Steven E. Fivel
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Steven E. Fivel, Executive Vice-
President and General Counsel
Dated: March 24, 1999
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EXHIBIT 99.1
BRIGHTPOINT SEES FIRST QUARTER AND 1999
EARNINGS BELOW EXPECTATIONS
Indianapolis, Indiana-March 10, 1999-Brightpoint, Inc. (NASDAQ: CELL)
announced today that, due to recent developments, it anticipates that revenue
and net income for the quarter ending March 31, 1999 and for the year ending
December 31, 1999 will fall below expectations. The Company plans to report
final results for the quarter on April 29, 1999.
The Company currently anticipates that revenue for the first quarter
will be in the range of $375 million to $400 million, and earnings per share
(before the cumulative effect of the change in accounting principle discussed
below) will be approximately zero. Several factors have contributed to lower
than anticipated revenues and operating income for the first quarter of 1999.
These factors may also impact the remaining quarters of 1999.
Beginning in late January, the Company experienced difficulties in
procuring adequate supply of product in the Asia-Pacific region, specifically in
China and Taiwan. The Company has adopted a strategy in China of procuring its
supply from manufacturers in China. This strategy resulted in inadequate supply
of product for the first quarter. In addition, trading companies selling product
into China from other markets have continued to create price instability,
thereby lowering the Company's margins.
The Company's Latin America division is being adversely impacted
primarily by the effect of the devaluation of the Brazilian real, which occurred
on January 13, 1999. As nearly all of the Company's transactions in Brazil are
real-denominated, the translation of the transactions into US dollars at
devalued exchange rates will result in a lower contribution to consolidated
revenues and operating income.
In both the Asia-Pacific and Latin America divisions, the Company has
focused on strengthening its balance sheet by tightening credit policies in
response to recent economic uncertainties in those regions. Although the Company
believes that its policies are appropriate and prudent, the Company may have
lost sales to competitors offering more liberal credit terms.
In its Europe, Middle East and Africa division, the Company
successfully implemented its strategy of exiting the trading business in the
fourth quarter of 1998 to develop stronger relationships with the wireless
equipment manufacturers. While the Company continues to believe this strategy is
appropriate, the Company has currently been unable to replace the trading
revenue previously derived in the United Kingdom and Germany with revenues from
sales or services provided directly to the network operators.
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The Company anticipates its North America division will generate
revenue and operating income consistent with the Company's expectations as
demand remains strong for the Company's products and services. The North America
division has implemented a strategy of providing outsourced services to wireless
equipment manufacturers and network operators. The deployment of this strategy
has resulted in a more predictable and more profitable business model in North
America. Each of the Company's divisions is in various stages of implementing
this strategy, however, implementation in the North America division is the most
advanced.
The Company also anticipated revenue and operating income to be
generated in the first quarter of 1999 from its agreements with various Iridium
Gateways Operators and Kyocera Corporation. Due to the limited activity
experienced by Iridium and the later than anticipated availability of Kyocera
handsets, these agreements have resulted in only nominal sources of revenue and
operating income.
The Company will also record in the first quarter of 1999 a cumulative
effect adjustment for a change in accounting principle. The change in accounting
principle results from the required adoption of American Institute of Certified
Public Accountants Statement of Position 98-5, Reporting the Costs of Start-up
Activities, which requires the write-off of unamortized pre-operating and
organizational costs that were previously capitalized in accordance with
generally accepted accounting principles then in effect. The adjustment for the
write-off of these amounts, which will be shown net of tax and after earnings
from continuing operations, is expected to range from $12 million ($0.22 per
share) to $15 million ($0.28 per share).
"We are very disappointed in the outlook for our first quarter," stated
Robert J. Laikin, Chairman and Chief Executive Officer of Brightpoint, Inc.
"However, we remain committed to our business strategies and to the key markets
around the world in which we operate. We view our success in North America as
validation of the business model that we are deploying in all of our regions. We
continue to view our goal as generating long-term shareholder value through
profitable, controlled growth and prudent balance sheet management."
Brightpoint, Inc. is a leading provider of innovative services to
network operators and equipment manufacturers in the global wireless
telecommunications industry. Brightpoint strives to enhance the success of its
customers through the specialized and focused provision of efficient and
effective solutions for their mission critical business requirements. The
Company's innovative services include inventory management, prepaid solutions,
custom packaging and other outsourced services. Additional information about the
Company can be found on its website at www.brightpoint.com, or by calling its
toll-free Investor Relations Information line at 877-IIR-CELL (877-447-2355).
"Forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995 may be included in this news release. A variety of
factors could cause the Company's actual results to differ from the reported
results expressed in such forward-looking statements.
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Investors are referred to the Company's Cautionary Statements (Exhibit 99 to the
Company's most recent Form 10-Q), which statements are incorporated into this
news release by reference.
Contact: Brightpoint, Inc., Indianapolis, Indiana
Phillip A. Bounsall, Chief Financial Officer
317-297-6100
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EXHIBIT 99.2
CAUTIONARY STATEMENTS
Certain statements in this Form 8-K 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 manufacturers
and suppliers, network operators and other providers of wireless communications
logistics services; uncertainties relating to business and economic conditions
in markets in which the Company operates; uncertainties relating to government
and regulatory policies and other political risks; 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; the Company's continued
ability, through sales growth, to absorb the increasing costs incurred and to be
incurred in connection with its expansion activities and provision of integrated
logistics services; uncertainties inherent in international operations; foreign
currency fluctuations; and failure of the Company or critical third parties with
which the Company does business to be Year 2000 compliant. 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.
