Summary of BRIGHTPOINT INC

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW AND RECENT DEVELOPMENTS
This discussion and analysis should be read in conjunction with the accompanying Consolidated Financial Statements and related notes. Our discussion and analysis of the financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. Our estimates were based on our historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates but we do not believe such differences will materially affect our financial position or results of operations. Our critical accounting estimates, the estimates we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments are outlined in our Annual Report on Form 10-K for the year ended December 31, 2008, and have not changed significantly. 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 the cautionary statements contained in Exhibit 99.1 to this report and our Annual Report on Form 10-K for the year ended December 31, 2008.
Brightpoint, Inc. is a global leader in the distribution of wireless devices and accessories and provision of customized logistic services to the wireless industry. We have operations centers and/or sales offices in various countries including Australia, Austria, Belgium, Colombia, Denmark, Finland, France, Germany, Guatemala, India, Italy, the Netherlands, New Zealand, Norway, Portugal, Russia, Singapore, Slovakia, South Africa, Spain, Sweden, Switzerland, the United Arab Emirates, the United Kingdom and the United States. We provide customized integrated logistic services including procurement, inventory management, software loading, kitting and customized packaging, fulfillment, credit services and receivables management, call center and activation services, website hosting, e-fulfillment solutions and other services within the global wireless industry. Our customers include mobile network operators, mobile virtual network operators (MVNOs), resellers, retailers and wireless equipment manufacturers. We distribute wireless communication devices and we provide value-added distribution and logistic services for wireless products manufactured by companies such as High Tech Computer Corp., Kyocera, LG Electronics, Motorola, Nokia, Samsung, Siemens, Sony Ericsson and UTStarcom. The consolidated statements of operations reflect the reclassification of the results of operations for our Poland and Turkey operations and our locally branded PC notebook business in Slovakia to discontinued operations for all periods presented in accordance with U.S. generally accepted accounting principles. These businesses were previously reported in our EMEA reporting segment.
On February 9, 2009, we announced a plan to reduce forecasted spending for the year by approximately $40 to $45 million. This plan is comprised of $12 to $14 million of cost avoidance and $28 to $31 million of spending reductions. Simultaneously, we announced a plan to reduce average daily debt by approximately $100 to $150 million in 2009. The spending reduction measures included, among other things, a workforce reduction of at least 220 positions, or approximately 7% of our workforce. The majority of the foregoing reductions in spending are reflected in our 2009 first quarter results of operations as a reduction of selling, general, and administrative expenses.
Based on our progress through the first quarter of 2009, we believe that we are on track to realize the previously stated forecasted spending and cost avoidance targets as well as our debt reduction targets for 2009. For the first quarter of 2009 selling general and administrative (SG&A) expenses were $52.5 million, which represents a decrease of $6.8 million (12%) from the fourth quarter of 2008. This sequential decrease in SG&A is substantially all related to the previously announced spending reduction and cost avoidance initiatives. Average daily debt outstanding for the first quarter of 2009 was $216.0 million as compared to $333.0 million for the fourth quarter of 2008 and $513.0 million for the first quarter of 2008. At the end of April 2009, our total outstanding term debt was approximately $100 million.

We continue to focus on optimizing our European operating and financial structure with the ultimate motivation of achieving our financial targets for the European region. We expect to exit certain programs, channels and/or countries that do not meet our financial targets. As a result of exiting underperforming programs, channels and/or countries in our European region, we would expect to incur additional restructuring charges. We will provide updates on these activities and related estimated charges, which could be material, as appropriate throughout the year.

RESULTS OF OPERATIONS
Revenue and wireless devices handled by division and service line

                                                        Three Months Ended March 31,
                                                           % of                                % of
                                          2009             Total             2008              Total         Change
                                                             (Amounts in 000s)
Distribution revenue
Americas                               $ 111,303             18 %        $   200,853             19 %          (45 %)
Asia-Pacific                             174,784             28 %            322,249             30 %          (46 %)
EMEA                                     334,474             54 %            546,575             51 %          (39 %)

Total                                  $ 620,561            100 %        $ 1,069,677            100 %          (42 %)


Logistic services revenue
Americas                               $  46,096             52 %        $    46,750             44 %           (1 %)
Asia-Pacific                               8,248              9 %             10,203             10 %          (19 %)
EMEA                                      34,172             39 %             48,173             46 %          (29 %)

Total                                  $  88,516            100 %        $   105,126            100 %          (16 %)


Total revenue
Americas                               $ 157,399             22 %        $   247,603             21 %          (36 %)
Asia-Pacific                             183,032             26 %            332,452             28 %          (45 %)
EMEA                                     368,646             52 %            594,748             51 %          (38 %)

Total                                  $ 709,077            100 %        $ 1,174,803            100 %          (40 %)


Wireless devices sold through
distribution
Americas                                     795             18 %              1,593             25 %          (50 %)
Asia-Pacific                               1,610             37 %              2,723             43 %          (41 %)
EMEA                                       1,984             45 %              1,967             32 %            1 %

Total                                      4,389            100 %              6,283            100 %          (30 %)


Wireless devices handled through
logistic services
Americas                                  12,868             90 %             14,030             91 %           (8 %)
Asia-Pacific                                 445              3 %                376              2 %           18 %
EMEA                                       1,040              7 %                934              7 %           11 %

Total                                     14,353            100 %             15,340            100 %           (6 %)


Total wireless devices handled
Americas                                  13,663             73 %             15,623             72 %          (13 %)
Asia-Pacific                               2,055             11 %              3,099             14 %          (34 %)
EMEA                                       3,024             16 %              2,901             14 %            4 %

Total                                     18,742            100 %             21,623            100 %          (13 %)

The following table presents the percentage changes in revenue for the three months ended March 31, 2009 by service line compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                        2009 Percentage Change in Revenue vs. 2008
                                                             Non-                         Total
                           Wireless         Average         handset                    Percentage
                           devices          Selling          based        Foreign       Change in
                         handled (1)       Price (2)      revenue (3)     Currency       Revenue

Three months ended March 31, 2009:
Distribution                   (16 %)         (14 %)             (5 %)        (7 %)        (42 %)
Logistic services                1 %            1 %             (16 %)        (2 %)        (16 %)
Total                          (15 %)         (13 %)             (6 %)        (6 %)        (40 %)

(1) Handset-based volume represents the percentage change in revenue due to the change in quantity of wireless devices sold through our distribution business and the change in quantity of wireless devices handled through our logistic services business.

(2) Average selling price represents the percentage change in revenue due to the change in the average selling price of wireless devices sold through our distribution business and the change in the average fee per wireless device handled through our logistic services business.

(3) Non-handset distribution revenue represents the percentage change in revenue from accessories sold, freight and non-voice navigation devices sold through our distribution business. Non-handset based logistic services revenue represents the percentage change in revenue from the sale of prepaid airtime, freight billed, and fee based services other than fees earned from wireless devices handled. Changes in non-handset based revenue do not include changes in reported wireless devices.

Revenue and wireless devices handled by division:

                                                 Three Months Ended
                                                      March 31,
       Americas                                    % of                    % of
       (Amounts in 000s)               2009        Total       2008        Total     Change

       REVENUE:
       Distribution                 $ 111,303        71 %   $ 200,853        81 %     (45 %)
       Logistic services               46,096        29 %      46,750        19 %      (1 %)

       Total                        $ 157,399       100 %   $ 247,603       100 %     (36 %)


       WIRELESS DEVICES HANDLED :
       Distribution                       795         6 %       1,593        10 %     (50 %)
       Logistic services               12,868        94 %      14,030        90 %      (8 %)

       Total                           13,663       100 %      15,623       100 %     (13 %)

The following table presents the percentage changes in revenue for our Americas division by service line for the three months ended March 31, 2009 compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                         2009 Percentage Change in Revenue vs. 2008
                                                             Non-                       Total
                              Wireless        Average       handset                  Percentage
                               devices        Selling        based      Foreign       Change in
                               handled         Price        revenue     Currency       Revenue

   Three months ended March 31, 2009:
   Distribution                   (39 %)         (2 %)         (1 %)        (3 %)        (45 %)
   Logistic services               (3 %)          4 %          (2 %)         0 %          (1 %)
   Total                          (32 %)         (1 %)         (1 %)        (2 %)        (36 %)

The decrease in handset based volume for the three months ended March 31, 2009 was primarily due to weaker market conditions in North America and Latin America as well as the loss of key customers due to industry consolidation compared to the same period in the prior year. The decrease in average selling price was due to a higher mix of lower priced handsets sold compared to the same period in the prior year due to higher demand for these products.
The decrease in wireless devices handled through logistic services for the three months ended March 31, 2009 was primarily due to the sale of certain assets in Colombia in the second quarter of 2008. Excluding the decrease in units handled resulting from the sale of these assets, revenue from wireless devices handled was flat compared to the prior year. The increase in average fulfillment fee per unit was primarily driven by a shift in mix between customers and services compared to the same period in the prior year.

                                                 Three Months Ended
                                                      March 31,
       Asia-Pacific                                % of                    % of
       (Amounts in 000s)               2009        Total       2008        Total     Change

       REVENUE:
       Distribution                 $ 174,784        95 %   $ 322,249        97 %     (46 %)
       Logistic services                8,248         5 %      10,203         3 %     (19 %)

       Total                        $ 183,032       100 %   $ 332,452       100 %     (45 %)


       WIRELESS DEVICES HANDLED :
       Distribution                     1,610        78 %       2,723        88 %     (41 %)
       Logistic services                  445        22 %         376        12 %      18 %

       Total                            2,055       100 %       3,099       100 %     (34 %)

The following table presents the percentage changes in revenue for our Asia-Pacific division by service line for the three months ended March 31, 2009 compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                         2009 Percentage Change in Revenue vs. 2008
                                                             Non-                       Total
                              Wireless       Average       handset                   Percentage
                              devices        Selling        based       Foreign       Change in
                              handled         Price        revenue      Currency       Revenue

  Three months ended March 31, 2009:
  Distribution                   (34 %)         (3 %)          (3 %)        (6 %)        (46 %)
  Logistic services               13 %          (5 %)         (19 %)        (8 %)        (19 %)
  Total                          (32 %)         (3 %)          (4 %)        (6 %)        (45 %)

The decrease in wireless devices sold in our Asia-Pacific division for the three months ended March 31, 2009 was driven by foreign currency fluctuations that allowed traders from other regions to sell wireless devices into markets served by our Singapore business at lower prices than those available to us as well as fewer devices sold in India. The decrease in average selling price was driven by shift in mix to lower priced handsets compared to the same period in the prior year.
The increase in wireless devices handled through logistic services for the three months ended March 31, 2009 was primarily resulting from an increase in wireless devices handled for our largest customer in Australia and New

Zealand. The decrease in average fulfillment fee per unit was due primarily to an unfavorable mix of wireless devices handled compared to the same period in the prior year. The decrease in non-handset based logistic services revenue was primarily due to a decrease in repair services in India compared to the same period in the prior year.

                                                 Three Months Ended
                                                      March 31,
       EMEA                                        % of                    % of
       (Amounts in 000s)               2009        Total       2008        Total     Change

       REVENUE:
       Distribution                 $ 334,474        91 %   $ 546,575        92 %     (39% )
       Logistic services               34,172         9 %      48,173         8 %     (29% )

       Total                        $ 368,646       100 %   $ 594,748       100 %     (38% )


       WIRELESS DEVICES HANDLED :
       Distribution                     1,984        66 %       1,967        68 %        1 %
       Logistic services                1,040        34 %         934        32 %       11 %

       Total                            3,024       100 %       2,901       100 %        4 %

The following table presents the percentage changes in revenue for our EMEA division by service line for the three months ended March 31, 2009 compared to the same period in the prior year, including the impact to revenue from changes in wireless devices handled, average selling price and foreign currency.

                                          2009 Percentage Change in Revenue vs. 2008
                                                              Non-                        Total
                             Wireless        Average         handset                   Percentage
                              devices        Selling          based       Foreign       Change in
                              handled         Price          revenue      Currency       Revenue

 Three months ended March 31, 2009:
 Distribution                      3 %          (26 %)           (7 %)        (9 %)        (39 %)
 Logistic services                 2 %           (1 %)          (27 %)        (3 %)        (29 %)
 Total                             3 %          (24 %)           (9 %)        (8 %)        (38 %)

The increase in wireless devices sold and the decrease in average selling price for the three months ended March 31, 2009 were primarily due to a shift in mix towards lower priced handsets compared to the same period in the prior year. The decrease in non-handset based revenue was primarily due to a decrease in sales of non-handset based navigation devices in Germany.
Logistic services revenue for the three months ended March 31, 2009 decreased due to lower revenue from the sale of prepaid airtime in Sweden.

Gross Profit and Gross Margin

                                              Three Months Ended
                                                   March 31,
                                                % of                              % of
                          2009                  Total       2008                  Total        Change
                                               (Amounts in 000s)
   Distribution        $ 25,927                   42 %   $ 51,913                   59 %         (50 %)
   Logistic services     36,535                   58 %     36,734                   41 %          (1 %)

   Gross profit        $ 62,462                  100 %   $ 88,647                  100 %         (30 %)


   Distribution                        4.2 %                             4.9 %              (0.7) points
   Logistic services                  41.3 %                            34.9 %               6.4 points
   Gross margin                        8.8 %                             7.5 %               1.3 points

The 1.3 percentage point increase in gross margin for the three months ended March 31, 2009 was driven by a 6.4 percentage point increase in gross margin from our logistic services business, partially offset by a 0.7 percentage point decrease in gross margin from our distribution business. The decrease in gross profit and gross margin from distribution was primarily driven by lower average selling prices for handsets and a shift in product mix compared to the same period in the prior year. The increase in gross margin from logistic services was driven by an improved cost structure resulting from the impact of spending reductions in our North America operations. Selling General and Administrative (SG&A) Expenses

                                        Three Months Ended
                                            March 31,
                                        2009          2008       Change
                                        (Amounts in 000s)
                SG&A expenses         $ 52,473     $ 69,754       (25 %)
                Percent of revenue         7.4 %        5.9 %     1.5 points

The decrease in SG&A expenses for the three months ended March 31, 2009 compared to the same period in the prior year was primarily due to the impact of cost reduction initiatives in 2008 and 2009. Approximately half of our cost avoidance savings relates to the suspension of non-executive staff cash bonuses for the first half of 2009. Therefore, the savings related to this cost avoidance initiative may not recur during the second half of 2009 if we begin accruing these bonuses in the third quarter of 2009.
SG&A expenses were $59.3 million for the three months ended December 31, 2008. The $6.8 million decrease for the three months ended March 31, 2009 was primarily due to the previously announced spending reduction and cost avoidance initiatives.
As a percent of revenue, SG&A expenses increased 1.5 percentage points for the three months ended March 31, 2009. In addition, SG&A as a percent of revenue was negatively impacted by the lower than expected revenue resulting from overall weakness in the markets in which we operate. SG&A expenses included $1.7 million of non-cash stock based compensation expense for the three months ended March 31, 2009 compared to $1.6 million for the same period in the prior year. Amortization Expense
Amortization expense was $3.7 million for the three months ended March 31 2009 compared to $4.7 million for the same period in the prior year. The decrease in amortization expense for the three months ended March 31, 2009 compared to the same period in the prior year was primarily due to fluctuations in foreign currencies for the intangible assets acquired in the 2007 acquisition of Dangaard Telecom.

Restructuring Charge
Restructuring charge was $5.1 million for the three months ended March 31, 2009. The restructuring charge primarily consists of severance charges in connection with the global workforce reduction announced as part of our previously announced 2009 Spending and Debt Reduction Plan. We reduced our global workforce by approximately 150 positions during the first quarter of 2009. Most of this reduction came during the latter half of the first quarter. Restructuring charge for the three months ended March 31, 2008 consists of $3.2 million associated with the exit of our redundant warehouse and office facility in Germany as well as $0.4 million of severance costs to terminate employees of our redundant operations in Germany and Norway.
We expect to incur additional severance charges in the second quarter of 2009 as we continue to reduce our workforce to achieve our previously stated reduction target of at least 220 positions.
In addition, we expect to exit certain programs, channels and/or countries that do not meet our profitability targets. As a result of exiting underperforming programs, channels and/or countries in our EMEA region, we would expect to incur additional restructuring charges. We will provide updates on these activities and related estimated charges, which could be material, as appropriate throughout the year.
Operating Income from Continuing Operations

                                          Three Months Ended
                                               March 31,
                                            % of                     % of
                               2009        Total         2008       Total      Change
                                            (Amounts in 000s)
             Americas       $ 12,795         NM       $  8,257        78 %        55 %
             Asia-Pacific      2,866         NM          7,768        74 %       (63 %)
             EMEA             (5,943 )       NM          2,844        27 %      (309 %)
             Corporate        (8,563 )       NM         (8,312 )     (79 %)       (3 %)

             Total          $  1,155         NM       $ 10,557       100 %       (89 %)

NM = Not meaningful
Operating Income as a Percent of Revenue by Division:

                                    Three Months Ended
                                        March 31,
                                     2009          2008         Change

                  Americas             8.1 %        3.3 %     4.8 points
                  Asia-Pacific         1.6 %        2.3 %    (0.7) points
                  EMEA                (1.6 %)       0.5 %    (2.1) points
                  Total                0.2 %        0.9 %    (0.7) points

Operating income in our Americas division increased $4.5 million for the three months ended March 31, 2009 primarily due to the impact of cost reductions in 2008 and cost avoidance initiatives in 2009. The increase in operating income as a percent of revenue of 4.8 percentage points for the three months ended March 31, 2009 was driven by an increase in gross margin from an improved cost structure resulting from the impact of spending reductions in our North America operations.
Operating income in our Asia-Pacific division decreased $4.9 million and 0.7 percentage points as a percent of revenue for the three months ended March 31, 2009 primarily due to lower profitability from devices sold to . . .