Brightpoint Reports First Quarter 2012 Financial Results
2 days 1 hours 20 minutes ago - GlobeNewswire via Comtex
Brightpoint, Inc. ("BrightPoint") (Nasdaq:CELL), a global leader in providing device lifecycle services to the wireless industry, today announced its financial results for the first quarter ended March 31, 2012.
Revenue was $1.37 billion for the first quarter of 2012, an increase of 23% compared to the first quarter of 2011 and a decrease of 12% compared to the fourth quarter of 2011.
Wireless devices handled were 29.2 million (includes 0.4 million tablets) for the first quarter of 2012. This represents an increase of 7% compared to the first quarter of 2011 and a decrease of 5% compared to the fourth quarter of 2011.
Income from continuing operations attributable to common shareholders was $3.2 million, or $0.05 per diluted share, for the first quarter of 2012 compared to $8.0 million, or $0.11 per diluted share, for the first quarter of 2011 and $15.0 million, or $0.22 per diluted share, for the fourth quarter of 2011.
Adjusted income from continuing operations attributable to common shareholders (non-GAAP) was $11.4 million, or $0.16 per diluted share, for the first quarter of 2012 compared to $14.2 million, or $0.20 per diluted share, for the first quarter of 2011 and $24.2 million, or $0.34 per diluted share, for the fourth quarter of 2011.
Adjusted income from continuing operations attributable to common shareholders (non-GAAP) of $0.16 per diluted share for the first quarter of 2012 excludes the following items:
-- $6.8 million (pre-tax) of non-cash amortization expense related to
acquired intangible assets.
-- $2.4 million (pre-tax) restructuring charge consisting primarily of an
impairment charge related to the anticipated sale of our facility in
Reno, Nevada which we expect to sell in the second or third quarter
($1.4 million), severance due to a reduction in workforce in our
Americas division ($0.8 million) and continued global consolidation and
rationalization in our Europe, Middle East, and Africa (EMEA) and
Corporate divisions ($0.2 million).
-- $3.2 million (pre-tax) of non-cash stock based compensation expense.
-- $4.1 million of tax benefit related to the excluded items described
above.
Gross profit was $85.7 million for the first quarter of 2012 compared to $86.5 million for the first quarter of 2011 and $101.9 million for the fourth quarter of 2011. The reduction in gross profit from the first quarter of 2011 was primarily due to a reduction in logistic services gross profit due to a decrease in non-repair logistic services provided by our reverse/repair/refurbish operation in North America, a decrease in units handled in Norway and the elimination of gross profit generated in the first quarter of 2011 by the operations in Latin America that were contributed to Intcomex, Inc. in April 2011. The reduction in logistic services gross profit from the first quarter of 2011 was partially offset by an increase in gross profit generated in the Asia-Pacific and EMEA regions due to an increase in distribution wireless devices sold. The reduction in gross profit from the fourth quarter of 2011 was primarily due to a reduction in distribution gross profit resulting from a decline in units sold due to a seasonally strong fourth quarter, current competitive and economic pressures in the EMEA region and a reduction in logistic services gross profit due to a seasonal decline in units handled.
Gross margin was 6.3% for the first quarter of 2012 compared to 7.8% for the first quarter of 2011 and 6.5% for the fourth quarter of 2011. The reduction in gross margin from the first quarter of 2011 was primarily due to a reduction in distribution gross margin, a reduction in logistic services gross margin and a higher mix of revenue generated by our distribution business. The reduction in distribution gross margin from the first quarter of 2011 was primarily due to current competitive and economic pressures in the EMEA region. The reduction in logistic services gross margin was primarily due to the mix of services provided by our reverse/repair/refurbish operation in North America and the sale of a high volume of spare parts related to the repair business in a particular region at low margin. The decrease in gross margin from the fourth quarter of 2011 was primarily due to a reduction in distribution gross margin resulting from competitive and economic pressures in the EMEA region.
SG&A expense was $66.9 million for the first quarter of 2012 compared to $65.6 million for the first quarter of 2011 and $70.0 million for the fourth quarter of 2011. Incremental SG&A expense from our previously announced joint venture in Malaysia was $1.1 million for the first quarter of 2012. SG&A expense for the first quarter of 2012 included $0.9 million of costs in conjunction with the launch of our new global brand and $0.7 million of bad debt expense primarily associated with two specific customers in our Americas division. Fluctuations in foreign currencies reduced SG&A expense for the first quarter of 2012 by $0.8 million compared to the first quarter of 2011 and by an immaterial amount compared to the fourth quarter of 2011.
Income tax expense was $2.6 million for the three months ended March 31, 2012. Income tax expense for the three months ended March 31, 2012 included a $0.6 million charge for a discrete tax adjustment in a foreign jurisdiction. Excluding this charge in 2012, the effective income tax rate for the three months ended March 31, 2012 was 34.7%.
Total debt was $296.7 million at March 31, 2012, compared to $253.0 million at December 31, 2011. Total liquidity (unrestricted cash and unused borrowing availability) was $282.1 million at March 31, 2012 compared to $332.8 million at December 31, 2011 and $325.1 million at March 31, 2011.
Cash used in operating activities was $45.4 million for the three months ended March 31, 2012 compared to cash used in operating activities of $97.4 million for the three months ended March 31, 2011 and cash used in operating activities of $59.5 million for the three months ended December 31, 2011. The decrease in cash used in operating activities for the three months ended March 31, 2012 compared to the same period in the prior year was primarily due to invoicing issues experienced by a key global vendor that delayed some payments to the vendor from the end of 2010 into the first quarter of 2011.
The cash conversion cycle was 17 days for the first quarter of 2012 compared to 9 days for the first quarter of 2011 and 12 days for the fourth quarter of 2011. The increase in cash conversion cycle was primarily due to an increase in days sales outstanding. Days sales outstanding increased due to an increase in revenue and accounts receivable from large customers in Germany and Sweden. These customers have longer payment terms compared to our average payment terms, and revenue and accounts receivable from these customers increased significantly over the prior year due to aggressive efforts by these customers to gain or maintain market share with consumers in the smartphone segment of the wireless industry.
EBITDA (non-GAAP) was $22.3 million for the first quarter of 2012 compared to $26.2 million for the first quarter of 2011 and $34.9 million for the fourth quarter of 2011.
"We are reporting solid results in revenue and units handled for the first quarter of 2012," said Robert J. Laikin, Chairman of the Board and Chief Executive Officer of Brightpoint, Inc. "However, our customers and vendor partners faced significant competitive and economic pressures in the first quarter which negatively impacted our profitability. But, I believe that the environment is improving, and we remain well-positioned for future success. I expect the overall wireless device industry to be flat to up approximately 5% in 2012 as compared to 2011."
"Our operating results for the first quarter of 2012 reflect some positive trends, however internal and external factors caused certain key operating metrics to be disappointing," said Vince Donargo, BrightPoint's Executive Vice President, Chief Financial Officer and Treasurer. "During the first quarter, we took some necessary actions to reduce our overall cost structure, and I am pleased with our resulting SG&A expenses for the first quarter of 2012. We will continue to take the necessary measures to ensure our business model operates efficiently and extend our leadership position as we move forward in a highly competitive environment."
