<PAGE> 1
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: June 30, 2000
-------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from: to
--------------------- -----------------------
Commission file number: 0-23494
--------------------------------------------------------
BRIGHTPOINT, INC.
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(Exact name of registrant as specified in its charter)
Delaware 35-1778566
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State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
6402 Corporate Drive, Indianapolis, Indiana 46278
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(Address of principal executive offices) (Zip Code)
(317) 297-6100
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Number of shares of common stock outstanding at August 10, 2000: 55,635,477
shares
<PAGE> 2
BRIGHTPOINT, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1
Consolidated Statements of Operations
Three and Six Months Ended June 30, 1999 and 2000.............3
Consolidated Balance Sheets
December 31, 1999 and June 30, 2000...........................4
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1999 and 2000.......................5
Notes to Consolidated Financial Statements........................6
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations................13
ITEM 3
Quantitative and Qualitative Disclosures
About Market Risk............................................20
PART II. OTHER INFORMATION
ITEM 1
Legal Proceedings................................................21
ITEM 4
Submission of Matters to a Vote of Security Holders..............21
ITEM 6
Exhibits.........................................................21
Signatures................................................................22
<PAGE> 3
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1999 2000 1999 2000
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 399,032 $ 455,815 $ 762,964 $ 926,347
Cost of revenue 378,287 413,921 713,832 843,019
------------- ------------- ------------- -------------
Gross profit 20,745 41,894 49,132 83,328
Selling, general and administrative expenses 36,284 23,391 63,271 46,815
Restructuring and other unusual charges 65,517 517 65,517 5,331
------------- ------------- ------------- -------------
Income (loss) from operations (81,056) 17,986 (79,656) 31,182
Interest expense 3,812 3,653 7,100 6,940
------------- ------------- ------------- -------------
Income (loss) before income taxes, minority interest
and accounting change (84,868) 14,333 (86,756) 24,242
Income taxes 5,646 4,986 5,003 8,361
------------- ------------- ------------- -------------
Income (loss) before minority interest and
accounting change (90,514) 9,347 (91,759) 15,881
Minority interest - 94 (33) 130
------------- ------------- ------------- -------------
Income (loss) before accounting change (90,514) 9,253 (91,726) 15,751
Cumulative effect of accounting change, net of tax - - (14,065) -
------------- ------------- ------------- -------------
Net income (loss) $ (90,514) $ 9,253 $ (105,791) $ 15,751
============= ============= ============= =============
Basic per share:
Income (loss) before accounting change $ (1.70) $ 0.17 $ (1.73) $ 0.29
Cumulative effect of accounting change, net of tax - - (0.26) -
------------- ------------- ------------- -------------
Net income (loss) $ (1.70) $ 0.17 $ (1.99) $ 0.29
============= ============= ============= =============
Diluted per share:
Income (loss) before accounting change $ (1.70) $ 0.16 $ (1.73) $ 0.28
Cumulative effect of accounting change, net of tax - - (0.26) -
------------- ------------- ------------- -------------
Net income (loss) $ (1.70) $ 0.16 $ (1.99) $ 0.28
============= ============= ============= =============
Weighted average common shares outstanding:
Basic 53,304 55,543 53,176 55,235
============= ============= ============= =============
Diluted 53,304 63,601 53,176 56,274
============= ============= ============= =============
See accompanying notes.
</TABLE>
3
<PAGE> 4
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
December 31, June 30,
1999 2000
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 85,261 $ 81,191
Accounts receivable (less allowance for doubtful
accounts of $6,220 in 1999 and $7,098 in 2000) 230,792 192,995
Inventories 140,673 206,044
Other current assets 48,193 54,420
---------- ----------
Total current assets 504,919 534,650
Property and equipment 36,273 35,460
Goodwill and other intangibles 71,456 73,195
Other assets 11,210 9,349
---------- ----------
Total assets $ 623,858 $ 652,654
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 236,781 $ 238,645
---------- ----------
Total current liabilities 236,781 238,645
Long-term debt:
Line of credit 46,022 47,479
Convertible notes 184,864 188,561
---------- ----------
Total long-term debt 230,886 236,040
---------- ----------
Stockholders' equity:
Preferred stock, $0.01 par value: 1,000 shares
authorized; no shares issued or outstanding - -
Common stock, $0.01 par value: 100,000 shares
authorized; 54,654 and 55,651 issued and
outstanding in 1999 and 2000, respectively 547 557
Additional paid-in capital 204,283 213,389
Retained earnings (deficit) (30,013) (14,262)
Accumulated other comprehensive loss (18,626) (21,715)
---------- ----------
Total stockholders' equity 156,191 177,969
---------- ----------
Total liabilities and stockholders' equity $ 623,858 $ 652,654
========== ==========
See accompanying notes.
4
<PAGE> 5
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30
-------------------------
1999 2000
-------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $(105,791) $ 15,751
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization 8,386 7,256
Amortization of debt discount 3,554 3,697
Cumulative effect of accounting change, net of tax 14,065 -
Restructuring and other unusual charges 84,972 5,331
Minority interest (33) 130
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable 38,836 32,677
Inventories 9,233 (66,572)
Other operating assets (3,421) (3,553)
Accounts payable and accrued expenses (18,337) 1,934
---------- ----------
Net cash provided (used) by operating activities 31,464 (3,349)
INVESTING ACTIVITIES
Capital expenditures (5,685) (6,975)
Purchase acquisitions, net of cash acquired (5,860) (4,550)
Decrease in funded contract financing receivables 12,351 2,054
Increase in other assets (780) (645)
--------- ----------
Net cash provided (used) by investing activities 26 (10,116)
FINANCING ACTIVITIES
Net borrowings (payments) on revolving credit facility (47,000) 1,485
Proceeds and tax benefits from exercise of stock options
and warrants 5,119 9,089
---------- ----------
Net cash provided (used) by financing activities (41,881) 10,574
Effect of exchange rate changes on cash and cash equivalents (122) (1,179)
---------- ----------
Net decrease in cash and cash equivalents (10,513) (4,070)
Cash and cash equivalents at beginning of period 49,528 85,261
---------- ----------
Cash and cash equivalents at end of period $ 39,015 $ 81,191
========== ==========
See accompanying notes.
</TABLE>
5
<PAGE> 6
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
1. Basis of Presentation
GENERAL
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 Form 10-Q and 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. The preparation of
financial statements requires management to make estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes.
Actual results are likely to differ from those estimates, but management does
not believe such differences will materially affect the Company's financial
position or results of operations. In the opinion of the Company, all
adjustments considered necessary to present fairly the consolidated financial
statements have been included.
The consolidated financial statements include the accounts of the Company and
its majority-owned or controlled subsidiaries. Significant intercompany accounts
and transactions have been eliminated in consolidation. Certain amounts in the
1999 consolidated financial statements have been reclassified to conform to the
2000 presentation.
The consolidated balance sheet at December 31, 1999 has been derived from the
audited consolidated financial statements at that date, but does not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The unaudited consolidated
statements of operations for the three and six months ended June 30, 2000 and
the unaudited consolidated statement of cash flows for the six months ended June
30, 2000 are not necessarily indicative of the operating results or cash flows
that may be expected for the entire year.
For further information, reference is made to the audited consolidated financial
statements and the footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1999.
NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is based on the weighted average number of
common shares outstanding during each period, and diluted net income (loss) per
share is based on the weighted average number of common shares and dilutive
common share equivalents outstanding during each period. The Company's common
share equivalents consist of stock options, stock warrants and the Convertible
Notes.
6
<PAGE> 7
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
1. Basis of Presentation (continued)
---------------------------------
NET INCOME (LOSS) PER SHARE (CONTINUED)
The following is a reconciliation of the numerators and denominators of the
basic and diluted net income (loss) per share computations for the three and six
months ended June 30, 1999 and 2000:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
1999 2000 1999 2000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Basic:
Net income (loss) $ (90,514) $ 9,253 $(105,791) $ 15,751
========== ========== ========== ==========
Weighted average shares outstanding 53,304 55,543 53,176 55,235
========== ========== ========== ==========
Per share amount $ (1.70) $ 0.17 $ (1.99) $ 0.29
========== ========== ========== ==========
Diluted:
Net income (loss) $ (90,514) $ 9,253 $(105,791) $ 15,751
Interest add-back for dilution of Convertible Notes - 1,192 - -
---------- ---------- ---------- ----------
Adjusted net income (loss) $ (90,514) $ 10,445 $(105,791) $ 15,751
========== ========== ========== ==========
Weighted average shares outstanding 53,304 55,543 53,176 55,235
Net effect of dilutive stock options and stock
warrants-based on the treasury stock method using
average market price - 797 - 1,039
Effect of Convertible Notes - 7,261 - -
---------- ---------- ---------- ----------
Total weighted average shares outstanding 53,304 63,601 53,176 56,274
========== ========== ========== ==========
Per share amount $ (1.70) $ 0.16 $ (1.99) $ 0.28
========== ========== ========== ==========
</TABLE>
COMPREHENSIVE INCOME (LOSS)
In accordance with Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income (SFAS No. 130), the Company is required to report
Comprehensive Income which is comprised of net income and other comprehensive
income. The statement requires unrealized gains or losses on the Company's
available-for-sale securities, unrealized gains or losses on derivative
financial instruments and gains or losses resulting from currency translations
of foreign investments, which prior to adoption were reported separately in
stockholders' equity, to be included as components of "other comprehensive
income (loss)." During the three and six months ended June 30, 1999,
comprehensive loss totaled $86.5 million and $112.2 million, respectively, and
during the three and six months ended June 30, 2000, comprehensive income
totaled $7.0 million and $12.7 million, respectively.
7
<PAGE> 8
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
2. Restructuring and Other Unusual Charges
During the first quarter of 2000, the Company began the process of consolidating
four Indianapolis, Indiana locations and a location in Bensalem, Pennsylvania
into a single, new facility located near the Indianapolis International Airport
and designed specifically for the Company and its processes. The Company
recorded an unusual charge of $5.7 million ($3.4 million or $0.06 per share net
of related tax benefits) during the first and second quarters of 2000, related
to the consolidation for losses on the disposal of assets that will not be used
in the new facility and the estimated impact of vacating the unused facilities,
net of potential subleases.
Beginning in the second quarter of 1999, the Company implemented a broad
restructuring plan (the Plan) in an effort to improve its position for long-term
success by eliminating or restructuring identified non-performing business
activities and reducing costs. The Plan included the disposal of certain
operations in the United Kingdom, Poland, Taiwan and Argentina; termination of
the Company's investments in two joint operations in China; disposal of its 67%
interest in a Hong Kong-based accessories company; and cost reduction
initiatives in selected operating subsidiaries and its regional and corporate
operations. As of July of 2000, the Company's execution of the Plan was
substantially complete. As a result of actions taken in accordance with
the Plan the Company recorded during the second quarter of 1999 restructuring
and other unusual charges of approximately $85.0 million. Adjustments to this
charge subsequent to June 30, 1999, were insignificant. The aforementioned
charges have been recorded within the following captions in the Consolidated
Statements of Operations for the three and six months ended June 30, 1999
(in millions):
Cost of revenue $ 7.4
Selling, general and administrative expenses 7.6
Restructuring and other unusual charges 65.5
Income taxes 4.5
-----
$85.0
=====
As a result of the actions discussed above, the Company had approximately $2.9
million in facility consolidation reserves and $0.4 million in restructuring
reserves at June 30, 2000. Assets held for disposal at June 30, 2000, were not
significant.
3. Cumulative Effect of Accounting Change
The Company recorded in the first quarter of 1999, a cumulative effect
adjustment of $14.1 million net of applicable taxes ($0.26 per diluted share)
for a change in accounting principle. The change in accounting principle
resulted from the required adoption of American Institute of Certified Public
Accountants Statement of Position 98-5, Reporting the Costs of Start-up
Activities, which, upon adoption, required the write-off of the unamortized
portion of certain capitalized costs. These costs were previously capitalized in
accordance with generally accepted accounting principles then in effect.
8
<PAGE> 9
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
4. Acquisitions and Divestitures
------------------------------
During the second quarter of 2000, the Company made cash payments of contingent
consideration totaling $4.6 million related to purchase acquisitions completed
prior to 1999. These payments resulted in additional goodwill being recorded in
the second quarter of 2000, that is being amortized over the remaining
amortization periods of the related acquisitions.
During the six months ended June 30, 1999, the Company acquired Cellular
Services S.A., a provider of integrated logistics services to the wireless
communications industry in Brazil. This transaction was accounted for as a
purchase and, accordingly, the consolidated financial statements include the
operating results of this business from the effective date of acquisition. The
purchase price consisted of $3.8 million in cash, the assumption of certain
liabilities and remaining contingent consideration of up to $20.5 million based
upon the future operating results of the Company's Brazilian operations over the
five years following the acquisition. Goodwill of approximately $4.9 million
resulted from this acquisition. In addition, during the last nine months of
1999, the Company sold WAVETech Network Services Limited, a subsidiary of
WAVETech Limited in the United Kingdom, and pursuant to its restructuring plan,
terminated or disposed of certain operations in Argentina, China, Poland, Taiwan
and the United Kingdom.
The impact of the 1999 acquisition was not material in relation to the Company's
consolidated results of operations. Consequently, pro forma information is not
presented.
5. Accounts Receivable Securitizations
During the six months ended June 30, 2000, the Company sold a portion of its
accounts receivable to financing organizations in certain of its markets in
order to reduce the credit and collection risk associated with those accounts
receivable and to reduce the amount of working capital required to fund such
receivables. These transactions have been treated as sales pursuant to the
provisions of Statement of Financial Accounting Standards No. 125, Accounting
for Transfer and Servicing of Financial Assets and Extinguishments of
Liabilities. Net funds received from the sales of accounts receivable during the
six months ended June 30, 2000 totaled $37.3 million (4% of revenues) and fees
incurred in connection with these sales were not significant.
6. Long-term Debt
On July 27, 1999, the Company amended and restated its five-year senior secured
revolving line of credit facility (the Facility) with Bank One, Indiana,
National Association, as agent for a group of banks (collectively, the Banks).
The Facility, which subject to various restrictions allows for borrowings of up
to $175 million, matures in June 2002, and generally bears interest, at the
Company's option, at: (i) the greater of the agent bank's corporate base rate
plus a spread of 0 to 100 basis points and the Federal Funds effective rate plus
0.50%; or (ii) the rate at which deposits in United States Dollars or
Eurocurrencies are offered by the agent bank to first-class banks in the London
interbank market plus a spread ranging from 140 to 250 basis points (based on
the Company's leverage ratio) plus a spread reserve, if any. Borrowings by the
Company's non-United States subsidiaries bear interest at various rates based on
the type and term of advance selected and the prevailing interest rates of the
country in which the subsidiary is domiciled.
9
<PAGE> 10
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
6. Long-term Debt (continued)
At June 30, 2000, there was approximately $42.7 million outstanding under the
Facility, all of which was denominated in foreign currencies, at interest rates
ranging from 5.8% to 8.0% (a weighted average rate of 6.6%). In addition, there
was an aggregate of $26.2 million in letters of credit issued.
All of the Company's assets located in the United States and between 65% and
100% of the capital stock of certain of the Company's subsidiaries are pledged
to the Banks as collateral for the Facility, and the Company is substantially
prohibited from incurring additional indebtedness. Funding under the Facility is
limited by an asset coverage test, which is measured monthly. As of June 30,
2000, available funding under the Facility was approximately $32.3 million. In
addition to certain net worth and other financial covenants, the Company's
Facility 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 portions of its assets. During the first six months of 2000, the Company
and the Banks entered into two amendments to the Facility which modified certain
financial covenants and Facility limitations to reflect the Company's improved
financial performance and to better address its financing objectives. These
modifications are not considered material.
In December 1999, Brightpoint International Trading (Guangzhou) Co., Ltd. (an
indirect subsidiary of Brightpoint, Inc.) entered into a $4.8 million one-year
secured loan with China Construction Bank Guangzhou Economic Technological
Development District Branch. The loan matures in December 2000, bears interest
of 6.1% and is denominated in China's local currency, the Renminbi. The loan is
supported by a stand-by letter of credit of $5.1 million which was issued under
the Facility. In addition, upon maturity the Company intends to renew this loan
with the lender or replace it with funding from its Facility. The loan prohibits
the borrower from making various changes in its ownership structure.
On March 11, 1998, the Company completed the issuance of zero-coupon,
subordinated, convertible notes due in the year 2018 (the Convertible Notes)
with an aggregate face value of $380 million ($1,000 per Convertible Note) and a
yield to maturity of 4.00%. The Convertible Notes are subordinated to all
existing and future senior indebtedness of the Company and all other
liabilities, including trade payables, of the Company's subsidiaries. The
Convertible Notes resulted in gross proceeds to the Company of approximately
$172 million (issue price of $452.89 per Convertible Note) and require no
periodic cash payments of interest. The proceeds were used to reduce borrowings
under the Company's revolving credit facility and to invest in highly-liquid,
short-term investments pending use in operations. At June 30, 2000, the
Convertible Notes had an accreted value of $189 million.
Each Convertible Note is convertible at the option of the holder any time prior
to maturity. Upon conversion, the Company, at its option, will deliver to the
holder 19.109 shares of common stock per Convertible Note or cash equal to the
market value of such shares. On or after March 11, 2003, the Convertible Notes
may be redeemed at any time by the Company for cash equal to the issue price
plus accrued original discount through the date of redemption. In addition, each
Convertible Note may be redeemed at the option of the holder on March 11, 2003,
2008 or 2013. The purchase price for each Convertible Note at these redemption
dates is approximately $552, $673 and $820, respectively, which is equal to the
issue price plus accrued original discount through the date of redemption. The
Company may elect at its option to pay for such redemption in cash or common
stock, or any combination thereof equaling the purchase price.
10
<PAGE> 11
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
7. Operating Segments
The Company operates in markets worldwide and has four reportable segments as
defined by Statement of Financial Accounting Standards No. 131, Disclosures
about Segments of an Enterprise and Related Information (SFAS No. 131). These
reportable segments represent the Company's four divisions: North America;
Asia-Pacific; Europe, Middle East and Africa; and Latin America. These divisions
all generate revenues from sales of wireless handsets, accessory programs and
fees generated from the provision of integrated logistics services. However, the
divisions are managed separately because they operate in different regions of
the world.
The Company evaluates the performance of, and allocates resources to, these
segments based on income (loss) from operations including allocated corporate
selling, general and administrative expenses. As discussed in Note 2 to the
Consolidated Financial Statements, the Company incurred restructuring and other
unusual charges, which materially affected certain operating segments. A summary
of the Company's operations by segment with and without the restructuring and
other unusual charges is presented below (in thousands):
<TABLE>
<CAPTION>
1999 2000
------------------------------------ -------------------------------------
REVENUES INCOME INCOME REVENUES INCOME INCOME
FROM (LOSS) (LOSS) FROM (LOSS) (LOSS)
EXTERNAL FROM FROM EXTERNAL FROM FROM
CUSTOMERS OPERATIONS OPERATIONS(1) CUSTOMERS OPERATIONS OPERATIONS(1)
--------- ---------- ------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED
JUNE 30:
North America $ 164,212 $ 3,680 $ 3,680 $ 155,304 $ 10,741 $ 11,642
Asia-Pacific 97,720 (37,649) (1,442) 131,609 6,414 5,428
Europe, Middle East
and Africa 72,164 (43,590) (2,755) 103,120 2,321 2,923
Latin America 64,936 (3,497) (64) 65,782 (1,490) (1,490)
---------- ---------- ---------- ---------- ---------- ----------
$ 399,032 $ (81,056) $ (581) $ 455,815 $ 17,986 $ 18,503
========== ========== ========== ========== ========== ==========
SIX MONTHS ENDED
JUNE 30:
North America $ 321,231 $ 8,670 $ 8,670 $ 316,121 $ 15,579 $ 21,280
Asia-Pacific 196,735 (39,687) (3,481) 266,849 10,868 9,488
Europe, Middle East
and Africa 138,098 (45,773) (4,937) 202,410 5,045 6,055
Latin America 106,900 (2,866) 567 140,967 (310) (310)
---------- ---------- ---------- ---------- ---------- ----------
$ 762,964 $ (79,656) $ 819 $ 926,347 $ 31,182 $ 36,513
========== ========== ========== ========== ========== ==========
(1) Excludes restructuring and other unusual charges - see Note 2.
</TABLE>
11
<PAGE> 12
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
7. Operating Segments (continued)
------------------------------
DECEMBER 31, JUNE 30,
TOTAL SEGMENT ASSETS: 1999 2000
------------- ------------
North America (1) $ 334,912 $ 302,667
Asia-Pacific 104,311 122,558
Europe, Middle East and Africa 103,705 101,849
Latin America 80,930 125,580
------------- ------------
$ 623,858 $ 652,654
============= ============
(1) Includes assets of the Company's corporate operations.
8. Contingencies
Various lawsuits, claims and proceedings have been or may be asserted against
the Company in the normal course of business. While the ultimate liability
pursuant to these actions cannot currently be determined, the Company believes
the legal proceedings in which it is currently involved will not have a material
adverse effect on its financial position.
The Company and certain of its executive officers, two of whom are also
directors, were named as defendants in four actions filed in June and July 1999,
in the United States District Court for the Southern District of Indiana. These
actions were subsequently consolidated by the court into a single action. The
action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, and Rule 10b-5 of the Exchange Act, based on allegations that false
and misleading statements were rendered and/or statements were omitted
concerning the Company's then current and future financial condition and
business prospects. The action involves a purported class of purchasers of the
Company's stock during the period October 2, 1998 through March 10, 1999. The
Company and the individual defendants intend to vigorously defend the action.
The outcome of any litigation is uncertain and it is possible that an
unfavorable decision could have a material adverse effect on the Company's
financial position, results of operations or cash flows.
12
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OVERVIEW AND RECENT DEVELOPMENTS
This discussion and analysis should be read in conjunction with the accompanying
consolidated financial statements and related notes. Certain statements made in
this report may contain forward-looking statements. For a description of risks
and uncertainties relating to such forward-looking statements, see Exhibit 99
and the Company's Annual Report on Form 10-K for the year ended December 31,
1999.
Effective in the first quarter of 2000 and applied retroactively to all periods,
the Company has reclassified certain amounts related to its services supporting
prepaid wireless telecommunications. The reclassification, which reduces revenue
and costs of revenue by the same amount, has no impact on gross profit, selling,
general and administrative expenses, operating income, net income or earnings
per share. The amount of this reclassification was $15.0 million and $23.8
million for the three and six months ended June 30, 1999, respectively.
During the first quarter of 2000, the Company began the process of consolidating
four Indianapolis, Indiana locations and a location in Bensalem, Pennsylvania
into a single, new facility located near the Indianapolis International Airport
and designed specifically for the Company and its processes. The Company
recorded an unusual charge related to the consolidation for losses on the
disposal of assets that will not be used in the new facility and the estimated
impact of vacating the unused facilities, net of potential subleases. The
aggregate amount of the charge recorded during the six months ended June 30,
2000, was $5.7 million ($3.4 million after applicable taxes) or $0.06 per
diluted share.
Beginning in the second quarter of 1999 the Company implemented a broad
restructuring plan (the Plan) in an effort to improve its position for long-term
success by eliminating or restructuring identified non-performing business
activities and reducing costs. The Plan included the disposal of certain
operations in the United Kingdom, Poland, Taiwan and Argentina; termination of
the Company's investments in two joint operations in China; disposal of its 67%
interest in a Hong Kong-based accessories company; and cost reduction
initiatives in selected operating subsidiaries and its regional and corporate
operations. As of July of 2000, the Company's execution of the Plan was
substantially complete. As a result of actions taken in accordance with the Plan
the Company recorded during the second quarter of 1999, restructuring and other
unusual charges of approximately $85.0 million. Adjustments to this charge
subsequent to June 30, 1999, were insignificant. The aforementioned charges have
been recorded within the following captions in the Consolidated Statements of
Operations for the three and six months ended June 30, 1999 (in millions):
Cost of revenue $ 7.4
Selling, general and administrative expenses 7.6
Restructuring and other unusual charges 65.5
Income taxes 4.5
-------
$ 85.0
=======
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OVERVIEW AND RECENT DEVELOPMENTS (CONTINUED)
The Company recorded in the first quarter of 1999, a cumulative effect
adjustment of $14.1 million net of applicable taxes ($0.26 per diluted share)
for a change in accounting principle. The change in accounting principle
resulted from the required adoption of American Institute of Certified Public
Accountants Statement of Position 98-5, Reporting the Costs of Start-up
Activities, which, upon adoption, required the write-off of the unamortized
portion of certain capitalized costs. These costs were previously capitalized in
accordance with generally accepted accounting principles then in effect.
RESULTS OF OPERATIONS
Due to the significance of the Plan announced by the Company on June 30, 1999,
results of operations have been delineated between results from recurring
operations and results from non-recurring operations. Results of recurring
operations for the three and six months ended June 30, 1999, exclude certain
operations in Argentina, Poland, Hong Kong, Taiwan, the United Kingdom and two
former joint operations in China (these joint operations were replaced by new
joint operations beginning in the third quarter of 1999) that were terminated or
eliminated pursuant to the Plan. Because the Company's execution of the Plan has
been substantially completed, there are no non-recurring operations in 2000.
Recurring operations also exclude the impacts of the non-recurring charges
related to our facility consolidation in 2000, the cumulative effect of a change
in accounting principle in 1999 and non-recurring charges related to the Plan in
1999 and 2000, all of which have been discussed above.
RECURRING OPERATIONS
Revenue
Three Months Ended June 30 Six Months Ended June 30
------------------------------------------------------------------
1999 2000 Change 1999 2000 Change
--------------------------------------------------------------------------------
Revenue $355,607 $455,815 28% $660,698 $926,347 40%
--------------------------------------------------------------------------------
Revenue from recurring operations in the quarter ended June 30, 2000, increased
28%, compared to revenue generated by recurring operations in the second quarter
of 1999. For the six months ended June 30, 2000, revenue from recurring
operations increased 40% from the same period in the prior year. Units handled
for the three and six months ended June 30, 2000, increased 40% and 46%,
respectively, from the same periods in the prior year.
14
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
RECURRING OPERATIONS (CONTINUED)
Revenue from Recurring Operations by Division:
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
------------------------------------- ----------------------------------------
1999 2000 1999 2000
------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
North America $164,212 46% $155,304 34% $321,231 48% $316,121 34%
Asia-Pacific 62,315 18% 131,609 29% 116,283 18% 266,849 29%
Europe, Middle East and
Africa 64,144 18% 103,120 23% 116,284 18% 202,410 22%
Latin America 64,936 18% 65,782 14% 106,900 16% 140,967 15%
------------------------------------- ----------------------------------------
Total $355,607 100% $455,815 100% $660,698 100% $926,347 100%
===================================== ========================================
</TABLE>
Units handled in the North America division grew by 34%, when comparing the
second quarter of 2000 to the same period in 1999, while revenue in this
division declined slightly compared to the second quarter of 1999. These changes
resulted primarily from the continued execution of the Company's strategy of
focusing on integrated logistics services, which generated lower revenue dollars
per handset, but contributed higher gross and operating margins. In this
division, 70% of the units handled were processed as integrated logistics
services units, a substantial increase from units attributable to integrated
logistics services of 55% in the second quarter of 1999. Additionally, revenue
from accessory programs decreased due primarily to program reductions by network
operator customers during the second quarter of 2000.
Units handled grew by 187% in the Asia-Pacific division, compared to recurring
operations for the second quarter of 1999, demonstrating the successful
implementation of the Plan. Units handled and revenue were suppressed in the
second quarter of 1999, due to the previously reported termination of joint
operations in China, in accordance with the Plan. The Company's new joint
operations in China have generated substantial unit volumes.
Growth in units handled in the Europe, Middle East and Africa and Latin America
divisions resulted from the level of demand for wireless handsets in those
markets, as well as the execution of our strategies designed for those markets.
Units handled in the second quarter of 2000, grew by 42% and 8% for the Europe,
Middle East and Africa and Latin America divisions, respectively, when compared
to recurring operations for the second quarter of 1999.
15
<PAGE> 16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
RECURRING OPERATIONS (CONTINUED)
Revenue from Recurring Operations by Service Line:
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
----------------------------------- ------------------------------------
1999 2000 1999 2000
----------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of wireless handsets $274,332 77% $356,886 78% $506,513 77% $718,099 78%
Accessory programs 54,915 16% 50,295 11% 104,476 16% 111,266 12%
Integrated logistics services 26,360 7% 48,634 11% 49,709 7% 96,982 10%
----------------------------------- ------------------------------------
$355,607 100% $455,815 100% $660,698 100% $926,347 100%
----------------------------------- ------------------------------------
</TABLE>
Revenue from recurring operations for the three and six months ended June 30,
2000, as compared to the same periods in 1999 increased 28% and 40% due
primarily to increases of 30% and 42%, respectively, in revenue from wireless
handset sales for those same periods. Revenue from integrated logistics services
for the three and six months ended June 30, 2000, as compared to the same
periods in 1999 increased 84% and 95%, respectively, resulting from the
continued successful execution of the Company's strategy of focusing on this
higher-margin line of business. Revenue generated from accessory programs
decreased 8% in the second quarter of 2000, when compared to the same period for
1999 primarily due to program reductions by North American network operator
customers during the second quarter of 2000. For the six months ended June 30,
2000, accessory program revenue increased 6% when compared to the first half of
1999.
Gross Profit
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
----------------------------------------- ----------------------------------------
1999 2000 Change 1999 2000 Change
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gross profit $ 29,331 $ 41,894 43% $ 55,760 $ 83,328 49%
Gross margin 8.2% 9.2% 8.4% 9.0%
------------------------------------------------------------------------------------------------------
</TABLE>
Gross profit from recurring operations for the three and six months ended June
30, 2000, increased 43% and 49%, respectively, over the same periods in 1999
resulting in gross margins of 9.2% and 9.0% for the three and six months ended
June 30, 2000, as compared to gross margins of 8.2% and 8.4% for the comparable
prior periods. Gross margins increased due to i) changes in the mix of revenue
by service line and ii) improved margins realized on integrated logistics
services, which were created through the Company's leveraging of fixed costs
related to providing those services. The significant increase in the units
handled in our integrated logistics services operations in North America, and
the leverage realized thereby, was a primary contributor to the margin increase.
16
<PAGE> 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
RECURRING OPERATIONS (CONTINUED)
Selling, General and Administrative Expenses
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
----------------------------------- -----------------------------------
1999 2000 Change 1999 2000 Change
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Selling, general and
administrative expenses $ 23,384 $ 23,391 0% $ 44,611 $ 46,815 5%
As a percent of revenue 6.6% 5.1% 6.8% 5.1%
------------------------------------------------------------------------------------------------------
</TABLE>
Selling, general and administrative expenses incurred in recurring operations
during the second quarter of 2000, were virtually the same as those incurred in
the second quarter of 1999, and decreased from 6.6% of revenue in the second
quarter of 1999, to 5.1% of revenue in the same period of 2000. For the six
months ended June 30, 2000, selling, general and administrative expenses
increased 5% to $46.8 million (5.1% of revenue) as compared to $44.6 million
(6.8% of revenue) from recurring operations for the same period in the prior
year. The improvements as a percent of revenue were primarily due to cost
reduction measures implemented by the Company.
Income from Recurring Operations
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
--------------------------------------- -----------------------------------------
1999 2000 Change 1999 2000 Change
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income from operations $ 5,947 $ 18,503 211% $ 11,149 $ 36,513 228%
As a percent of revenue 1.7% 4.1% 1.7% 3.9%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
The increases in income from operations and operating margins (income from
operations as a percent of revenue) resulted primarily from the growth in
revenues, the increase in gross margins and the decrease in selling, general and
administrative expenses as a percent of revenue.
Net Income from Recurring Operations
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
--------------------------------- ------------------------------
1999 2000 Change 1999 2000 Change
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 1,386 $ 9,410 579% $ 2,864 $ 18,802 556%
Net income per share (diluted) (1) $ 0.03 $ 0.17 467% $ 0.05 $ 0.33 560%
Weighted average shares outstanding
(diluted) (1) 53,403 63,601 53,928 63,535
------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the three and six months ended June 30, 2000, reflects an after tax
add-back of interest expense of $1.2 million and $2.4 million, respectively, to
net income and an increase of 7.3 million in weighted average shares outstanding
for those periods to properly reflect the dilutive effect of the Company's
Convertible Notes on net income from recurring operations.
The increase in net income from recurring operations for the three and six
months ended June 30, 2000, as compared to the same periods in 1999, resulted
primarily from the factors discussed above in the analyses of revenue, gross
profit and selling, general and administrative expenses.
17
<PAGE> 18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
NON-RECURRING OPERATIONS
Non-recurring operations in 1999 included certain operations in Argentina,
Poland, Taiwan and the United Kingdom and two joint operations in China, all of
which have been terminated or eliminated. In the first and second quarters of
2000, no non-recurring operations existed as the Plan had been substantially
completed. For the second quarter of 1999, non-recurring operations generated
revenue of $43.4 million, operating and net losses of $6.5 million and $6.9
million, respectively, and a net loss per diluted share of $0.13. For the six
months ended June 30, 1999, non-recurring operations generated revenue of $102.3
million, operating and net losses of $10.3 million and $9.6 million,
respectively, and a net loss per diluted share of $0.18. These results of
operations reflect the poor performance of the Company's non-recurring
operations in the two quarters immediately preceding the implementation of the
Plan.
OUTLOOK
The Company's Latin America division has continued to underperform when compared
to the Company's other divisions, caused primarily by the operating results
experienced in certain of the Company's Latin America operations. Based on the
current environment and the relatively small size of the Company's operations in
those markets, the Company currently expects the negative impact of the
Company's operations in those markets to limit profitability in its Latin
America division for at least the third and fourth quarters of 2000.
Due to what the Company believes to be an oversupply of wireless handsets in
certain markets, the Company expects its gross margins for the remainder of 2000
to be less than the gross margin it earned in the second quarter of 2000.
LIQUIDITY AND CAPITAL RESOURCES
December 31, 1999 June 30, 2000
--------------------------------------------------------------------------
Cash and cash equivalents $ 85,261 $ 81,191
Working capital $ 268,138 $ 296,005
Current ratio 2.13 : 1 2.24 : 1
--------------------------------------------------------------------------
Historically, the Company's primary cash requirements have been to fund
increased levels of accounts receivable and inventories. The Company has
satisfied its working capital requirements principally through cash flow from
operations, vendor financing, bank borrowings and the issuance of equity and
debt securities. The increase in working capital of $27.9 million during the six
months ended June 30, 2000, was primarily the result of an increase in
inventories partially offset by a decrease in accounts receivable. The Company
believes that cash flow from operations, vendor financing and available
borrowing capacity under its revolving line of credit facility will be
sufficient to continue funding its short-term capital requirements, however,
significant expansion of operations in the future may require the Company to
raise additional equity and/or debt capital.
Net cash used by operating activities was $3.3 million for the six months ended
June 30, 2000, as compared to cash provided by operating activities of $31.5
million in the comparable prior period. The decrease in cash flow from
operations was primarily attributable to an increase in inventories and a
smaller decrease in accounts receivable than experienced during the first
quarter of 1999, partially offset by an increase in the Company's earnings for
the period.
18
<PAGE> 19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
As of June 30, 2000, days sales outstanding in accounts receivable was
approximately 35 days, compared to days sales outstanding of approximately 43
days at June 30, 1999. This reduction is attributable to the successful
acceleration of the Company's accounts receivable collection cycle, as well as
sales, in certain markets, of accounts receivable to financing organizations
(see Note 5 to the Consolidated Financial Statements). These transactions have
been treated as sales pursuant to the provisions of Statement of Financial
Accounting Standards No. 125, Accounting for Transfer and Servicing of Financial
Assets and Extinguishments of Liabilities. Net funds received from the sale of
accounts receivable during the first half of 2000 totaled $37.3 million (4% of
revenue). During the second quarter of 2000, annualized inventory turns were
8 times, compared to 11 times during the second quarter of 1999. Average days
costs in accounts payable were 46 days for the second quarter of 2000, compared
to 28 days for the second quarter of 1999. These changes combined to create a
decrease in cash conversion cycle days to 35 days in the second quarter of
2000, from 47 days in the same period of 1999.
Net cash used by investing activities for the six months ended June 30, 2000,
was $10.1 million as compared to nominally positive cash provided by investing
activities in the comparable prior period. The change between periods is
primarily comprised of a reduction in cash provided by the Company's contract
financing activities. Net cash provided by financing activities for the six
months ended June 30, 2000, was comprised primarily of proceeds from the
exercise of stock options. Net cash used by financing activities for the six
months ended June 30, 1999, was primarily the result of payments on the
Company's line of credit partially offset by proceeds from the exercise of stock
options.
The Company's long-term debt at June 30, 2000, includes the Company's
zero-coupon, subordinated, convertible notes (the Convertible Notes) which have
an aggregate principal amount at maturity of $380.0 million ($1,000 face value
per Convertible Note). The Convertible Notes are due in the year 2018, have a
yield to maturity of 4.00% and are convertible into the Company's common stock
at a rate of 19.109 shares per Convertible Note. The accreted value of the
Convertible Notes was approximately $189 million at June 30, 2000. The remainder
of the Company's long-term debt is comprised of borrowings or permitted
indebtedness under its senior secured revolving line of credit facility ("the
Facility") which has been periodically modified. The Facility provides the
Company, based upon a borrowing base calculation, with a maximum borrowing
capacity of up to $175 million. Interest rates on U.S. Dollar borrowings under
the Facility, excluding fees, range from 140 basis points to 250 basis points
above LIBOR, depending on certain leverage ratios. See Note 6 to the
Consolidated Financial Statements.
Many of the Company's assets are pledged as collateral for borrowings under the
Facility and the Company is substantially prohibited from incurring additional
indebtedness, either of which terms could limit the Company's ability to
implement its expansion plans. The Company is also subject to certain covenants
as more fully described in Note 6 to the Consolidated Financial Statements.
19
<PAGE> 20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
FINANCIAL MARKET RISK MANAGEMENT
The Company is exposed to financial market risks, including changes in interest
rates and foreign currency exchange rates. To mitigate interest rate risks, the
Company has utilized interest rate swaps to convert certain portions of its
variable rate debt to fixed interest rates. To mitigate foreign currency
exchange rate risks, the Company utilizes derivative financial instruments under
a risk management program approved by the Company's Board of Directors. The
Company does not use derivative instruments for speculative or trading purposes.
The Company is exposed to changes in interest rates on its variable interest
rate revolving lines of credit. A 10% increase in short-term borrowing rates
during the quarter ended June 30, 2000, would have resulted in only a nominal
increase in interest expense as well as a nominal increase in the fair value of
the Company's interest rate swaps at June 30, 2000.
A substantial portion of the Company's revenue and expenses are transacted in
markets outside of the United States and are denominated in currencies other
than the U.S. Dollar. Accordingly, the Company's future results could be
adversely affected by a variety of factors, including changes in a specific
country's political, economic or regulatory conditions and trade protection
measures.
The Company's foreign currency risk management program is designed to reduce but
not eliminate unanticipated fluctuations in earnings, cash flows and the value
of foreign investments caused by volatility in currency exchange rates by
hedging, where believed to be cost-effective, significant exposures with foreign
currency exchange contracts, options and foreign currency borrowings. The
Company's hedging programs reduce, but do not eliminate, the impact of foreign
exchange rate movements. An adverse change (defined as a 10% strengthening of
the U.S. Dollar) in all exchange rates would have resulted in a decrease in
results of operations of approximately $0.6 million and $1.2 million for the
three and six months ended June 30, 2000, respectively. The same adverse change
in exchange rates would have resulted in a $4.2 million increase in the fair
value of the Company's cash flow and net investment hedges open at June 30,
2000. The majority of this fair value increase would offset currency
devaluations from translating the Company's foreign investments from functional
currencies to the U.S. Dollar. The Company's sensitivity analysis of foreign
exchange rate movements does not factor in a potential change in volumes or
local currency prices of its products sold or services provided. Actual results
may differ materially from those discussed above.
20
<PAGE> 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time, involved in certain legal proceedings in the
ordinary course of conducting its business. While the ultimate liability
pursuant to these actions cannot currently be determined, the Company believes
the legal proceedings in which it is currently involved will not have a material
adverse effect on its financial position.
The Company and certain of its executive officers, two of whom are also
directors, were named as defendants in four actions filed in June and July 1999,
in the United States District Court for the Southern District of Indiana. These
actions were subsequently consolidated by the Court into a single action. The
action asserts claims under Sections 10 (b) and 20 (a) of the Securities
Exchange Act of 1934, and Rule 10b-5 of the Exchange Act, based on allegations
that false and misleading statements were rendered and/or statements were
omitted concerning the Company's then current and future financial condition and
business prospects. The action involves a purported class of purchasers of the
Company's stock during the period October 2, 1998 through March 10, 1999. The
Company and the individual defendants intend to vigorously defend these actions.
The outcome of any litigation is uncertain and it is possible that an
unfavorable decision could have a material adverse effect on the Company's
financial position, results of operations or cash flows.
Item 4. Submission of Matters to a Vote of Security Holders
An Annual Meeting of Stockholders was held on May 18, 2000, to elect one (1)
Class III director.
The one (1) Class III director is to hold office until the Annual Meeting of
Stockholders to be held in 2003 and until his successor has been duly elected
and qualified. The results of the vote to elect the one (1) Class III director
were as follows:
John W. Adams received 49,788,542 votes for and 0 votes against.
1,084,743 votes were withheld.
Item 6. Exhibits
(a) Exhibits
The list of exhibits is hereby incorporated by reference to the Exhibit
Index on page 23 of this report.
(b) Reports on Form 8-K
None
21
<PAGE> 22
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 thereunto duly authorized.
Brightpoint, Inc.
-----------------
(Registrant)
Date August 14, 2000 /s/ Phillip A. Bounsall
------------------------- ---------------------------------------
Phillip A. Bounsall
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
Date August 14, 2000 /s/ John P. Delaney
------------------------- ---------------------------------------
John P. Delaney
Vice President, Chief Accounting Officer
(Principal Accounting Officer)
22
<PAGE> 23
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.1 Amendment No. 2 to Second Amended and Restated Mutilcurrency Credit
Agreement made as of June 28, 2000
27 Financial Data Schedule for the Six Months Ended June 30, 2000
99 Cautionary Statements
23
