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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-K
|X| Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
December 31, 1996
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
0-23494
(Commission File No.)
BRIGHTPOINT, INC.
(Exact name of registrant as specified in its charter)
Delaware 35-1778566
(State or other juris- (I.R.S. Employer
diction of incorporation) Identification No.)
6402 Corporate Drive, Indianapolis, Indiana 46278
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (317) 297-6100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g)of the Act:
Common Stock, $.01 par value
Preferred Share Purchase Rights
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. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|
The aggregate market value of the registrant's Common Stock held by
non-affiliates as of March 12, 1997 was approximately $250,551,173. As of March
12, 1997 there were 22,028,431 shares of the registrant's Common Stock
outstanding.
Documents Incorporated by Reference:
Annual Report to Stockholders for Fiscal Year Ended December 31, 1996
(incorporated into Part II)
Proxy Statement for 1996 Annual Meeting of Stockholders
(incorporated into Part III)
PART I
Item 1. Business.
General
Brightpoint, Inc. (the "Company") is a leading worldwide distributor of
wireless communications products and provider of value-added logistics services
such as inventory management, fulfillment, packaging and programming. The
Company offers products from manufacturers under brand names such as Nokia,
Ericsson, Lucent Technologies, Motorola, Siemens and Philips and has developed a
global customer base of more than 10,000 carriers, agents, resellers, dealers
and retailers. The Company has grown rapidly, with net sales increasing from
$419.1 million for the year ended December 31, 1995 to $589.7 million for the
year ended December 31, 1996 and with pro forma net income increasing from $7.3
million to $12.6 million (excluding the after-tax effect of one-time merger
expenses of $2.1 million) during the same period.
The market for wireless products and services has grown substantially and
continues to expand. The number of wireless subscribers in the United States has
increased from approximately 300,000 in 1985 to more than 44 million in 1996,
growing by more than ten million, or approximately 29%, in 1996 alone. On a
worldwide basis, wireless subscribers increased by 52 million, or 60%, to 140
million total subscribers in 1996. The Company has been successful in expanding
its international presence, with international sales as a percentage of net
sales increasing from approximately 36% to 51% from the year ended December 31,
1995 to the year ended December 31, 1996.
The emergence of new wireless communications services, such as personal
communications services ("PCS"), enhanced specialized mobile radio ("ESMR"),
satellite communications systems, the buildout of new wireless communications
infrastrucure by service providers, the pricing of handsets, the allocation of
additional wireless spectrum and the transition from analog technologies to
digital technologies are factors contributing to increases in the wireless
communications subscriber base and the sales of wireless products. The Company
currently provides distribution and value-added logistics services for many of
the leading manufacturers and service providers which participate in these new
and emerging wireless communications markets.
The Company focuses on serving as an effective link between manufacturers
and wireless service providers in the wireless communications industry. The
Company's primary strategies include (i) being the most efficient market channel
for its
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vendors and the low cost/high service provider to its wireless customers, (ii)
meeting the growing outsourcing demands of manufacturers and wireless service
providers with value-added logistics services, (iii) increasing its worldwide
presence and (iv) benefiting from the development of new technologies that allow
it to offer new products and services.
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.
Recent Developments
On November 12, 1996, the Company declared a three-for-two stock split
payable to stockholders of record on December 17, 1996, and on January 28, 1997,
the Company declared a five-for-four stock split payable to stockholders of
record on March 3, 1997. Both stock splits were effected in the form of stock
dividends. Accordingly, all references herein related to share amounts, per
share amounts and average shares outstanding have been adjusted retroactively to
reflect these stock splits.
In November 1996, the Company acquired the 50% interest of Brightpoint
International Ltd. ("Brightpoint International") it did not already own.
Brightpoint International, through its direct and indirect subsidiaries,
conducts all of the Company's sales and marketing activities outside of North
and South America.
In February 1997, the Company adopted a Rights Agreement, commonly known as
a "poison pill", which provides that in the event an individual or entity
beneficially owns 15% or more of the shares of the Company's capital stock,
stockholders of the Company shall have the right to purchase shares of the
Company's (or in some cases, the acquiror's) common stock at 50% of its then
market value. Also in February 1997, the Company amended its By-laws to: (i)
include a procedure for proposing the conduct of business at a meeting of the
stockholders and (ii) include a procedure for proposing the nomination of
directors.
On January 28, 1997, the Company amended its line of credit agreement with
Bank One, Indianapolis, N.A., acting as agent for a group of banks, to increase
available borrowings to $100,000,000. The additional $25,000,000 of credit
matures April 30, 1997, at which time such additional credit will be
renegotiated.
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Wireless Communications Industry Overview
The wireless communications industry provides voice and data communications
services primarily through cellular telephone, ESMR and paging services. The
recent allocation of additional frequency spectrum in the United States has
resulted in the emergence of PCS service providers who offer digital wireless
service. Advances in system technology and equipment (including, the transition
from analog to digital systems), increased competition at the carrier level and
the creation of new services, features and platforms, lower equipment prices and
service charges, have increased consumer acceptance and worldwide demand for
wireless communications products and services.
United States Wireless Market. According to the Cellular Telecommunications
Industry Association, the number of cellular subscribers in the United States
has increased from approximately 300,000 in 1985 to more than 44 million in
1996, growing by more than ten million, or approximately 29%, in 1996 alone. It
is estimated that market penetration for cellular subscribers in the United
States, based on population, was approximately 14% in 1996.
The Company believes that the United States wireless communications market
is expanding, primarily due to decreases in monthly service fees and retail
prices for wireless phones. In addition, many service providers are upgrading
their existing systems. Digital systems are expected to offer certain advantages
over analog systems, including improved transmission of voice and data and
greater transmission capacity, thereby enabling carriers to add additional
customers. New digital wireless phones can enhance privacy and offer more
advanced features than analog phones, including messaging and call waiting. The
emergence of PCS service providers is further expected to stimulate demand for
handsets and accessories as the subscriber base broadens and as existing
subscribers migrate between systems.
International Wireless Market. The market for cellular services and
products outside of the United States also has increased significantly in recent
years. The number of wireless subscribers outside the United States increased
from approximately 8.1 million subscribers in 1991 to approximately 96 million
subscribers by the end of 1996, growing by approximately 43 million subscribers,
or approximately 80%, in 1996 alone. It is estimated that market penetration for
wireless subscribers outside the United States, based on population, was
approximately 2.0% in 1996.
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The Company expects that rapid growth in international markets will
continue as a result of low market penetration, the buildout of wireless
systems, economic growth and high population density in many countries. The
Company also believes that wireless communications systems in certain of these
countries offer lower cost alternatives to the construction of conventional
wire-based telephone facilities. Due to these factors and the limited
availability and quality of land-line service, the Company believes that
consumers in many countries outside of the United States will increasingly
utilize wireless communications systems.
PCS and Other Wireless Communications Technologies. In 1996, several new
PCS systems were launched in major U.S. markets. Offering digital service, data
capabilities, different airtime rates and features, the PCS carriers compete
with incumbent cellular service providers for wireless subscribers. The digital
platforms adopted by the U.S. PCS and cellular carriers fall into three main
classifications: GSM, CDMA and TDMA. The Company has distribution and/or
value-added service contracts with several PCS carriers. Among the carriers now
under contract are BellSouth Personal Communications Inc.; Omnipoint
Communications, Inc.; Pocket Communications, Inc.; Powertel, Inc.; and Aerial
Communications, Inc. Satellite-based wireless systems are also expected to
contribute to subscriber demand with some forecasts calling for 8 million
subscribers by the year 2005. The Company currently provides distribution
services for many of the wireless communications equipment manufacturers which
the Company expects to participate in these new and emerging wireless
communications markets, including Nokia Mobile Phones, Inc. ("Nokia"), Ericsson,
Inc. ("Ericsson"), Siemens A.G. ("Siemens") and Philips Consumer Communications
("Philips"). As a result, the Company believes it is well positioned to provide
distribution and inventory management and value-added logistics services for
emerging wireless communications products.
Changing Distribution Dynamics. The United States wireless products
equipment distribution business has undergone a significant transformation in
recent years. Historically, the business was highly fragmented, consisting
principally of numerous small, privately-owned companies with relatively limited
capital and other resources. While certain of these companies remain factors in
the business, increased price competition and the increased capital requirements
of doing business have resulted in significant consolidation within the
industry. In addition, the Company believes that the maturing of the industry
has resulted in a growing trend among carriers and resellers toward relying on
equipment distributors to perform distribution, inventory management, product
fulfillment, programming, activation and other value-added services.
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In markets outside the United States, the dynamics of the wireless
communications equipment distribution business vary by country. In many
countries, the distribution of wireless communications equipment is controlled
primarily by manufacturers and service providers. However, in certain countries
service providers are seeking relationships with distributors offering a broad
array of products from several manufacturers as well as value-added services.
The Company believes that it is positioned to capitalize on opportunities in
many of these countries (as their markets evolve) by offering superior value in
terms of price, service and reliability.
Strategy
The Company focuses on being an effective link between manufacturers and
wireless service providers in the wireless communications industry. The
Company's primary strategies include (i) establishing the Company as the most
efficient market channel for its suppliers and the low cost/high service
provider to its customers, (ii) enhancing its industry positioning by meeting
the rapidly growing outsourcing demands of manufacturers and wireless service
providers with value-added services, (iii) increasing its worldwide presence and
(iv) benefiting from new technologies that allow it to offer new products and
services on a timely basis.
Products and Services
The Company offers a selection of wireless communications products
purchased from various manufacturers designed to work on all operating platforms
(such as AMPS, GSM, TDMA and CDMA) and/or specific frequencies. The Company's
product offerings feature brand names such as Nokia, Ericsson, Lucent
Technologies, Motorola, Siemens and Philips. For the years ended December 31,
1995 and 1996, approximately 86.3% and 88.3%, respectively, of the Company's net
sales were derived from sales of wireless telephones. For such periods, a
significant portion of the Company's wireless telephone sales represented Nokia,
Ericsson and Motorola products. The Company continually reviews and evaluates
wireless communications products in determining the mix of products purchased
for resale to customers and seeks to acquire distribution rights for wireless
products which the Company believes have the potential for significant market
penetration.
In addition, the Company distributes wireless accessory products, such as
batteries, battery eliminators and chargers, cases, antennas and "hands-free"
kits. For the years ended December 31, 1995 and 1996, sales of accessories
accounted for approximately 13.7% and 11.1%, respectively, of the Company's net
sales. Accessory products typically carry higher margins than wireless handsets.
-6-
The Company believes that marketing, distribution and private labeling of
accessory products are natural extensions of the Company's business.
Accordingly, the Company has introduced a complete line of branded accessory
products manufactured by third parties under the Brightlink(TM) name, which it
markets and distributes. The Company distributes these branded and third party
accessory lines through existing and new distribution channels, including mass
merchandisers and other retail channels. The Company had entered into an
exclusive license agreement with BellSouth Cellular Corp. for use of the
trademark Mobile America(TM). This license agreement has been terminated.
In addition to the sale of products, the Company provides various
distribution and value-added logistics services. Such distribution services
include purchasing, handling, packaging, warehousing, picking, packing, shipping
and "just-in-time" delivery. Value-added logistics services consist of end-user
product fulfillment, programming, private labeling, specialized packaging,
product branding, prepaid technology integration and product warranty and repair
services. The Company believes that these services respond to the outsourcing
requirements of manufacturers, carriers, resellers and mass retailers. The
Company intends to pursue opportunities to provide inventory management and
value-added logistics services to its customers and vendors to complement its
distribution capabilities. Revenue from these services are billed separately or
are included in the margin earned on handset or accessory sales.
Product manufacturers typically provide warranties which the Company
extends to its customers. The Company employs service technicians who perform
equipment maintenance and repair services on-site through arrangements with
equipment manufacturers. The Company has not derived significant revenues from
these activities.
Information about foreign and domestic operations and export
sales
The Company operates in worldwide markets. Its business activities are
conducted in four divisions: North America; Latin America; Europe, Middle East
and Africa; and Asia-Pacific. A summary of the Company's operations by division
is presented below (in thousands):
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1996
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Net Sales (based on customer location):
North America $287,377
Latin America 98,420
Europe, Middle East and
Africa 76,292
Asia-Pacific 127,629
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$589,718
========
Income before income taxes and minority interest:
North America $ 7,113
Latin America 4,268
Europe, Middle East and Africa 3,607
Asia-Pacific 5,135
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$ 20,123
========
Identifiable assets:
North America $126,003
Latin America 73,633
Europe, Middle East and Africa 44,451
Asia-Pacific 54,958
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$299,045
========
The Company has initiated operations in certain regions by acquiring
existing businesses and/or establishing majority-owned subsidiaries with a local
partner to operate within the particular area. This business development
strategy has been employed in the United Kingdom, China and Australia.
Customers
The Company has developed a global customer network of more than 10,000
wireless carriers, agents, resellers, dealers and retailers. The Company intends
to focus its sales efforts on carriers, service providers and their agents,
dealers and resellers which the Company believes will continue to be the
significant purchasers of the Company's products.
For the years ended December 31, 1995 and 1996, sales of the Company's
products to customers in foreign markets accounted for approximately 36% and
51%, respectively, of net sales. The Company is seeking to continue to increase
product sales in foreign markets and believes that such markets present
significant growth opportunities. The Company is, and as foreign sales increase
will become more so, subject to risks inherent in foreign trade, including
increased credit risk, customs duties and import quotas and other trade
restrictions, fluctuations in foreign currency exchange rates, shipping delays,
failure or material interruption of wireless systems and services and
international political, regulatory and economic developments, any or all of
which could have an adverse effect on the Company's operating margins and
results of operations. The Company has no material hedged monetary assets,
liabilities or commitments.
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A significant portion of the Company's net sales has been derived from a
concentrated customer base. For the years ended December 31, 1995 and 1996,
sales of wireless products to the Company's five largest customers accounted for
approximately 17.2% and 15.4%, respectively, of the Company's net sales. No
single customer accounted for more than 6% of the Company's net sales for the
year ended December 31, 1996. The loss of one or more of its principal customers
may have a material adverse effect on the Company.
Purchasing and Supply
The Company has developed key relationships with the leading manufacturers
and suppliers of wireless communications equipment. The Company generally
negotiates directly with manufacturers and suppliers to ensure adequate
inventories of brand name products on a timely basis and on favorable pricing
terms. In 1996, the Company purchased its products from more than 45 suppliers.
Inventory purchase decisions are based on quality, price, customer demand,
product availability and brand recognition. Certain of the Company's suppliers
provide favorable purchasing terms to the Company, including price protection,
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, the Company's three largest
suppliers accounted for approximately 38.1% and 62.3%, respectively, of product
purchases. For the year ended December 31, 1995, the Company's three largest
suppliers, Nokia, BellSouth Cellular Corp., and Ericsson accounted for
approximately 19.7%, 9.9%, and 8.6%, respectively, of product purchases. For the
year ended December 31, 1996, the Company's three largest suppliers, Nokia,
Ericsson, and Siemens accounted for approximately 38.4%, 17.3%, and 6.6%,
respectively, of product purchases. These or other suppliers may determine
essentially at any time to impose price increases on products sold to the
Company or otherwise determine not to continue to sell such products to the
Company on commercially reasonable terms, or at all, which may adversely affect
the Company's operating margins or result in decreased product sales.
The Company maintains agreements with a number of its significant
suppliers, including Ericsson, Nokia and Philips. These agreements are generally
non-exclusive, require the Company to satisfy minimum purchase requirements and
can be terminated on relatively short notice. The agreements also provide for
certain territorial
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restrictions. 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 believes that its relationships with its
suppliers are good.
Sales, Marketing and Distribution
The Company's executive officers and sales staff are responsible for the
Company's sales and marketing efforts. The Company's domestic sales force,
targets two principal customer groups, wireless service providers and their
agent dealers and national retailers. The Company's executive officers and
international sales staff, actively seek to establish and maintain relationships
with international wireless service providers. The international sales staff
consists of 12 persons for the Asia-Pacific market, 9 persons for the Europe,
Middle East and Africa market and 4 persons for the Latin America market. Due to
the service-oriented focus of the Company, the Company's executive officers
devote a substantial amount of time developing and maintaining personal
relationships with the Company's significant customers.
The Company has two domestic sales offices, located in Indianapolis,
Indiana and Miami, Florida. Brightpoint International and its subsidiaries
conduct all of the Company's sales and marketing activities outside of North and
South America.
The Company believes that product recognition by customers and consumers is
an important factor in the marketing of the Company's products. Accordingly, the
Company promotes itself and certain of its product lines through advertising in
national trade publications and attendance at international, national and
regional trade shows. In addition, the Company has introduced a line of
accessories under the Brightlink(TM) name. The Company also solicits customers
through direct mail, broadcast facsimile and 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.
Backlog is not material to the Company's business.
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Seasonality
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 contributed to the increase in the
Company's sales in the fourth quarter of 1996.
Management Information System
The Company believes that its information systems provide strong financial
controls and facilitate the provision of value-added logistics services. During
1996, the Company made significant investments in the enhancement of its
information systems and anticipates continuing to make such investments. The
system integrates marketing, sales, product fulfillment and distribution,
inventory control and purchasing, financial and credit control and internal
communications. The Company believes its information systems provide strong
internal control over business processes.
Competition
The markets for wireless handsets and accessories 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), product availability and service. The Company
competes with numerous well-established United States and international
wholesale distributors, value-added logistics service providers and
manufacturers of wireless communications equipment, including the Company's
suppliers, as well as carriers of wireless services, many of which possess
substantially greater financial and other resources than the Company and have
established reputations for success in the sale and service of wireless
communications products. Certain of these competitors have the financial
resources necessary to enable them to withstand substantial price competition
and implement extensive advertising campaigns, both generally and in response to
efforts by additional competitors entering into new markets or introducing new
products.
While the Company has established strategic relationships with customers
and suppliers, the wireless communications products distribution industry has,
in the past, been characterized by low barriers to entry and frequent
introduction of new products. However, as the market requirement shifts from
pure distribution to a mix of distribution and value-added services, entry
barriers are expected to rise in relationship to the increased cost of
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infrastructure, the expanded human resource requirement and the advanced
management and information systems capabilities that the service segment of the
business mandates. The Company's ability to compete successfully will be largely
dependent upon its ability to anticipate and respond to various competitive
factors affecting the industry, including new products which may be introduced,
changes in consumer preferences, demographic trends, international, national,
regional and local economic conditions and discount pricing and promotional
activities by competitors.
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 market new products that
satisfy evolving industry and customer requirements. The use of alternative
wireless technologies, including ESMR and satellite communications systems, may
reduce demand for cellular and PCS telephone products and widespread commercial
introduction could materially change the types of products sold by the Company.
Employees
The Company has 403 employees in its domestic and international locations.
None of the Company's employees are covered by a collective bargaining
agreement. The Company believes its employee relations are good.
Item 2. Properties
The Company's corporate headquarters are located in a 162,000 square foot
facility in Indianapolis, Indiana. This facility includes approximately 40,000
square feet of office space and approximately 122,000 square feet of warehouse
and product fulfillment space to serve as the Company's primary distribution
center. The original lease term for 90,000 square feet of this facility
commenced on January 1, 1996 and expires on January 31, 2006 and may be renewed
for two five-year terms. The Company entered into a new lease agreement dated
July 17, 1996 for a 72,000 square foot expansion to this facility. This lease
commences on January 1, 1997 and expires on December 31, 2006 and may be renewed
for two five-year terms. The monthly base rental under these obligations is
approximately $81,700. The Company is also obligated to pay real estate taxes.
At the end of the initial lease term, the Company has an option to purchase the
leased premises for approximately $11.5 million. The Company believes that this
facility will be sufficient to accommodate future expansion and growth of its
operations.
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In August 1995, the Company entered into a three-year lease for 14,415
square feet of warehouse and office space in Miami, Florida. The Company has
consolidated its Miami operations into this new office and warehouse facility
during 1996. The lease provides for monthly rent of approximately $7,300.
In March 1997 the Company opened a 65,000 square foot distribution facility
in Sparks, Nevada. The agreement provides for monthly rent of approximately
$18,300 per month and expires on February 28, 2002.
As a result of the Company's merger with Allied Communications, the Company
assumed a lease for 22,000 square feet of warehouse and office space in
Bensalem, Pennsylvania. The lease provides for monthly rent of approximately
$7,500 and expires in December 1999.
The Company's former executive offices were located in approximately 10,800
square feet of leased space in Indianapolis, Indiana. The lease provides for
monthly rent of approximately $9,900 and expires in June 1999. The Company plans
to utilize this facility for performing product warranty and repair services in
the future and is currently renegotiating this lease.
The Company's international acquisitions added leased facilities in
Manchester, England, Johannesburg, South Africa, Hong Kong, and Sydney,
Australia. These facilities are approximately 19,000, 3,100, 7,000, and 16,000
square feet, respectively, and provide for monthly rents of approximately
$8,900, $1,000, $6,200, and $7,800, respectively.
Item 3. Legal Proceedings.
The Company is not a party to any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
Incorporated by reference to the caption Common Stock Information contained
on page 24 of the Company's 1996 Annual Report to Stockholders.
Item 6. Selected Financial Data.
Incorporated by reference to the caption Financial Highlights contained on
page 1 of the Company's 1996 Annual Report to Stockholders.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Incorporated by reference to the caption Management's Discussion and
Analysis of Financial Condition and Results of Operations contained on pages 10
through 13 of the Company's 1996 Annual Report to Stockholders.
Item 8. Financial Statements and Supplementary Data.
Incorporated by reference to the financial information contained on pages
14 through 23 and to the caption Quarterly Results of Operations (Unaudited) on
page 24 of the Company's 1996 Annual Report to Stockholders.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
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PART III
Item 10. Directors and Executive Officers of the Registrant.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of Forms 3 and 4 and amendments thereto furnished
to the Company with respect to its most recent fiscal year, the Company believes
that during the fiscal year ending December 31, 1996, all filing requirements
applicable to executive officers, directors and 10% shareholders have been
complied with except, that, certain Form 4's were not timely filed and were
incomplete or inaccurate in connection with reported sales of options relating
to the Company's Common Stock made by Robert Picow, beneficial owner of greater
than 5% of the Company's securities and a director of the Company, in November
and December 1996.
Incorporated by reference to the caption Election of Directors contained on
pages 2 through 5 of the Company's Proxy Statement for the 1996 Annual Meeting
of Stockholders.
Item 11. Executive Compensation.
Incorporated by reference to the caption Executive Compensation contained
on pages 6 through 9 of the Company's Proxy Statement for the 1996 Annual
Meeting of Stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference to the caption Voting Security Ownership of
Certain Beneficial Owners and Management contained on pages 10 and 11 of the
Company's Proxy Statement for the 1996 Annual Meeting of Stockholders.
Item 13. Certain Relationships and Related Transactions.
Incorporated by reference to the caption Certain Transactions contained on
pages 11 and 12 of the Company's Proxy Statement for the 1996 Annual Meeting of
Stockholders.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1) The Financial Statements listed below are incorporated by reference from
pages 14 through 23 of the Company's 1996 Annual Report to Stockholders:
Report of Independent Auditors
Consolidated Statements of Income for the Years Ended
December 31, 1994, 1995 and 1996
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Consolidated Balance Sheets as of December 31, 1995 and
1996
Consolidated Statements of Stockholders' Equity
for the Years Ended December 31, 1994, 1995
and 1996
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1995 and 1996
Notes to Consolidated Financial Statements
(a)(2) The following financial schedule for the year ended
December 31, 1996 is submitted herewith:
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
(a)(3) Exhibits
Exhibit
Number Description
- ------ -----------
3.1 Certificate of Incorporation of the Company (8)
3.2 Amendment to Certificate of Incorporation of the Company (8)
3.3 Revised By-Laws of the Company (8)
3.4 Certificate of Merger of Brightpoint, Inc. into
Wholesale Cellular USA, Inc., effective September 15,
1995. (2)
4.1 Form of Common Stock Certificate (1)
10.1 1995 Stock Option Plan (1)
10.2 1996 Stock Option Plan (8)
10.3 Non-Employee Directors Stock Option Plan (1)
10.4 Form of Employment Agreement between the Company and
Robert J. Laikin, J. Mark Howell and T. Scott Housefield (8)
10.5 Form of Employment Agreement between the Company and
its Executive Vice Presidents (8)
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10.6 Lease Agreement between the Company and WRC
Properties, Inc., as amended and Unconditional Guaranty
of Lease by Century Cellular Network, Inc. (1)
10.7 Lease Agreement between the Company and Park 100
Properties, Inc. (2)
10.8 Lease Agreement between the Company and Industrial
Affiliates, Ltd. (2)
10.9 Credit Agreement and First and Second Amendments to
Credit Agreement among the Company and Bank One,
Indianapolis, N.A., The First National Bank of Chicago
and Bank One, Indianapolis, N.A. as Agent, dated June
13, 1995, September 15, 1995 and January 19, 1996,
respectively (3)
10.10 Third, Fourth, Fifth and Sixth Amendments to Credit Agreement
among the Company and Bank One, Indianapolis, N.A., The First
National Bank of Chicago and Bank One, Indianapolis, N.A., as
Agent, dated June 7, 1996, June 28, 1996, October 11, 1996 and
January 29, 1997, respectively (8)
10.11 Lease Agreement between the Company and Airport Key
Corporation, dated November 30, 1995 (3)
10.12 Lease Agreement between the Company and Corporate
Drive Associates, LLC, dated June 6, 1995 (3)
10.13 Amendment to Lease Agreement between the Company and
Corporate Drive Associates, LLC, dated October 3, 1995
(3)
10.14 Agreement and Plan of Merger, as amended on April 29,
1996, by and among the Company, Brightpoint
Acquisition, Inc., a wholly-owned subsidiary of the
Company, Allied Communications, Inc., Allied
Communications of Florida, Inc., Allied Communications
of Georgia, Inc., Allied Communications of Illinois,
Inc., Allied Communications of Puerto Rico, Inc.,
Robert Picow and Joseph Forer. (5)
10.15 Stock Purchase Agreement, dated as of October 1, 1996,
among the Company, Brightpoint International Ltd.,
Technology Resource International Ltd., Safkong
Holdings Limited, Marriott Investment & Trade Inc.,
John MacLean-Arnott and Dana Marlin. (6)
10.16 Rights Agreement, dated as of February 20, 1997,
between the Company and Continental Stock Transfer
Trust Company, as Rights Agent. (7)
11.1 Statement re: computation of per share earnings (8)
-17-
13.1 1996 Annual Report to Stockholders. With the exception
of the information incorporated by reference in Items
5, 6, 7 and 8, the 1996 Annual Report to Stockholders
is not deemed filed as part of this report. (8)
21.1 Subsidiaries (8)
23.1 Consent of Ernst & Young LLP (8)
23.2 Report of Coopers & Lybrand LLP (8)
23.3 Consent of Coopers & Lybrand LLP (8)
27.1 Financial Data Schedule (8)
- ------------
(1) Incorporated by reference to Registration Statement (33-
75148) effective April 7, 1994.
(2) Incorporated by reference to Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
(3) Incorporated by reference to Annual Report on Form 10-K for the
fiscal year ended December 31, 1995.
(4) Incorporated by reference to Registration Statement on Form S-3
(33-97084) effective October 24, 1995.
(5) Incorporated by reference to Current Report on Form 8-K,
dated June 12, 1996.
(6) Incorporated by reference to Current Report on Form 8-K,
dated December 31, 1996.
(7) Incorporated by reference to Current Report on Form 8-K,
dated March 28, 1997.
(8) Filed herewith.
(b) Reports on Form 8-K:
On December 3, 1996, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting an acquisition under
Item 2.
On March 28, 1997, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting an other event (the
adoption of its Shareholder Rights Plan) under Item 5.
-18-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 28, 1997 By: /s/ Robert J. Laikin
------------------------------
Robert J. Laikin
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Robert J. Laikin Director, Chairman March 28, 1997
- -------------------------- of the Board and Chief
Robert J. Laikin Executive Officer
(Principal Executive
Officer)
/s/ Mark Howell Director, President and March 28, 1997
- -------------------------- Chief Operating Officer
t5
/s/ Phillip A. Bounsall Executive Vice President, March 28, 1997
- -------------------------- Chief Financial Officer
Phillip A. Bounsall (Principal Financial
Officer)
/s/ T. Scott Housefield Director, Executive Vice March 28, 1997
- -------------------------- President and President,
T. Scott Housefield Brightpoint International
Ltd.
/s/ Steven E. Fivel Executive Vice President, March 28, 1997
- -------------------------- General Counsel and
Steven E. Fivel Secretary
/s/ John P. Delaney Vice President, Corporate March 28, 1997
- -------------------------- Controller (Principal
John P. Delaney Accounting Officer)
/s/ Robert Picow Director March 28, 1997
- --------------------------
Robert Picow
/s/ Joseph Forer Director March 28, 1997
- --------------------------
Joseph Forer
/s/ John W. Adams Director March 28, 1997
- --------------------------
John W. Adams
/s/ Robert F. Wagner Director March 28, 1997
- --------------------------
Robert F. Wagner
/s/ Stephen H. Simon Director March 28, 1997
- --------------------------
Stephen H. Simon
/s/ Rollin M. Dick Director March 28, 1997
- --------------------------
Rollin M. Dick
/s/ Steven B. Sands Director March 28, 1997
- --------------------------
Steven B. Sands
BRIGHTPOINT, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- ------------------------------------------------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D Col. E
- ------------------------------------------------------------- ---------- ------------------------- ---------- ----------
ADDITIONS
- ------------------------------------------------------------- ---------- ------------------------- ---------- ----------
Balance at Charged to Balance at
Beginning Costs and Charged to End
DESCRIPTION of Period Expenses Other Accounts Deductions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended December 31, 1996:
Deducted from asset accounts:
Allowance for doubtful accounts ................. $ 691,000 $ 589,000 $ -- $ 165,000 (1) $1,115,000
----------------------------------------------------------------------
Total ............................................... $ 691,000 $ 589,000 $ -- $ 165,000 $1,115,000
======================================================================
Year ended December 31, 1995:
Deducted from asset accounts:
Allowance for doubtful accounts ................. $ 450,000 $ 927,000 $ -- $ 686,000 (1) $ 691,000
----------------------------------------------------------------------
Total ............................................... $ 450,000 $ 927,000 $ -- $ 686,000 $ 691,000
======================================================================
Year ended December 31, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts ................. $ 328,000 $ 905,000 $ -- $ 783,000 (1) $ 450,000
----------------------------------------------------------------------
Total ............................................... $ 328,000 $ 905,000 $ -- $ 783,000 $ 450,000
======================================================================
(1) Uncollectible accounts written off.
S-1