Brightpoint Reports Second Quarter 2007 Financial Results

Business Wire, August 8, 2007

PLAINFIELD, Ind. -- Brightpoint, Inc. (NASDAQ:CELL)

For the Second Quarter of 2007:

    -- Record revenue of $851.0 million, an increase of 55% from the
       second quarter of 2006.

    -- Income from continuing operations of $17.7 million or $0.35
       per diluted share compared to $8.2 million or $0.16 per diluted
       share in the second quarter of 2006. For the second quarter of
       2007, income from continuing operations included:
       -- $0.5 million (pre-tax) of incremental costs associated with
          integrating the CellStar acquisition.
       -- $0.4 million (pre-tax) of incremental costs related to
          integration and planning associated with the Dangaard
          acquisition.
       -- $0.6 million pre-tax charge as a result of a bankruptcy
          filing by a customer of our North America operations.
       -- $0.7 million pre-tax operating loss from our AWS business.
          In June 2007, we developed a plan to reorganize our AWS
          business by integrating it into our existing sales channels
          and reallocating our resources. We expect to incur a pre-tax
          charge during the third quarter of 2007 of approximately
          $0.2 million, which will result in anticipated savings of
          approximately $2.2 million to $2.5 million annually.
       -- $0.3 million of pre-tax operating loss associated with the
          repair business in Philippines. In July 2007, we sold
          certain assets associated with this business, which will
          result in a third quarter charge of $0.3 million to $1.0
          million.
       -- $1.3 million (pre-tax) of non-cash stock based compensation
          expense in the second quarter of 2007 compared to $1.5
          million in the second quarter of 2006.
       -- $14.1 million tax benefit related to the reversal of
          valuation allowances on certain foreign tax credit
          carryforwards.

    -- Net income of $17.7 million or $0.35 per diluted share compared
       to $8.2 million or $0.16 per diluted share in the second
       quarter of 2006.

    -- Gross margin of 4.9%, a decrease of 1.6 percentage points from
       the second quarter of 2006.
       -- Shift in mix toward lower margin distribution business from
          higher margin logistic services business.
       -- Distribution gross margin decreased 1.2 percentage points
          from the second quarter of 2006 as a result of lower
          availability of certain higher margin products, growth in
          volumes in lower margin Asia-Pacific markets, sales of
          slower moving wireless devices at minimal margins resulting
          from an expanded relationship with a major original
          equipment manufacturer and lower margins on converged
          devices in Europe.

     -- Excluding the effect of the $14.1 million tax benefit
        discussed above, effective income tax rate of 36.0% compared
        to 27.1% for the second quarter of 2006 primarily due to a
        shift in mix of income between jurisdictions and
        non-deductible stock based compensation.

     -- Record 19.4 million wireless devices handled, an increase of
        approximately 47% from the second quarter of 2006.

     -- EBITDA of $12.1 million in the second quarter of 2007 as
        compared to $14.5 million in the second quarter of 2006.

     -- Inventory decreased to $257.8 million at June 30, 2007 from
        $391.7 million at December 31, 2006.
        -- Slower moving Asia inventory decreased from $146.8 million
           at end of the first quarter of 2007 to $50.5 million at the
           end of the second quarter of 2007 and $34.4 million as of
           July 31, 2007.

"In the second quarter of 2007, we continued to focus on the execution of our growth strategy including the integration of the CellStar business and the planning related to the Dangaard integration," stated Robert J. Laikin, Brightpoint's Chairman of the Board and Chief Executive Officer. "I am excited about Brightpoint's long term opportunities for growth in the global wireless industry. Based on a strong second quarter for the wireless industry, I am raising the lower end of my 2007 sell-in range of 1.1 billion to 1.2 billion units for the global wireless device industry to a revised sell-in range of 1.15 billion to 1.2 billion units. In the second quarter, we handled an all time company record of 19.4 million wireless devices. We feel that with the completion of the Dangaard transaction along with our current positive momentum, we are on pace to grow faster than the wireless device industry and expect to handle between 90 million and 110 million wireless devices in 2008."

"During the second quarter of 2007, we laid the groundwork necessary for the successful completion of both the Dangaard transaction as well as our expanded Global Credit facility," said Tony Boor, Brightpoint's Chief Financial Officer. "We have also made great progress in reducing our aged inventory position in Asia-Pacific and we are now well positioned to return to cash conversion cycle days that are more in line with our historical levels excluding the impact of the Dangaard acquisition."