All American Announces Second Quarter Results.Business Editors & High-Tech Writers MIAMI--(BUSINESS WIRE)--Aug. 14, 2001 All American Semiconductor, Inc. (Nasdaq:SEMI), a leading national distributor of electronic components, today announced its results for the second quarter and first half of 2001. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the quarter ended June 30, 2001 were $100.1 million, representing a decrease of 19.6% from net sales from continuing operations of $124.5 million for the same period of 2000. The decrease was attributable to a broad-based industry slowdown, reduced demand relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc excess inventory at the Company's customer base as well as the general weakness in the overall economy. Income from continuing operations excluding non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. was $1.0 million for the second quarter of 2001, compared to $6.8 million for the second quarter of 2000. In the second quarter of 2001 the Company incurred non-cash charges primarily relating to inventory and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and the loss on disposal of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . After giving effect to these non-cash charges and the loss on disposal, the net loss for the quarter ended June 30, 2001 was $(14.0) million or $(3.63) per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), compared to net income of $2.9 million or $.71 per share (diluted) for the second quarter of 2000. For the first half of 2001, net sales from continuing operations were $226.0 million, compared to net sales of $230.7 million for the first half of 2000. Income from continuing operations excluding non-cash charges was $4.8 million for the first six months of 2001, compared to $10.6 million for the same period of 2000. After giving effect to the non-cash charges and the loss on disposal of discontinued operations, the net loss was $(13.3) million or $(3.45) per share (diluted) for the six months ended June 30, 2001, compared to net income of $4.2 million or $1.02 per share (diluted) for the same period of 2000. Bruce M. Goldberg, President and Chief Executive Officer of All American, stated, "A broad-based slowdown in the technology sector, excess inventory at our customer base, and overall economic weakness are having a severe adverse impact on our industry which is affecting our performance during 2001. In response to these conditions we have implemented aggressive cost control programs including workforce reductions and the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of certain operations, which we expect will result in annual expense reductions of approximately $9.5 million. Additionally, through sales to customers, returns to suppliers and certain write-offs, we have reduced our inventory by over $30 million, or 20%, and have reduced our bank debt by more than $25 million, or 22%, each from highs early in the second quarter of 2001 as compared to their present levels in mid-August. Furthermore, we have generated over $16 million of cash flows from operations during the first half of 2001." Mr. Goldberg continued, "While 2001 began with softening market conditions, those conditions worsened significantly in the second quarter and it is difficult to anticipate when they will begin to improve. While conditions remain adverse, we are confident that our continued commitment to our core strategies will result in our company being well-positioned when market conditions improve and, as a result, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our long-term prospects." All American is recognized as the nation's 6th largest distributor of semiconductors and the 12th largest electronic components distributor overall. The Company has offices in 36 strategic locations throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . To the extent that this press release discusses financial projections, future performance, expectations, beliefs or intentions about our bookings, sales, markets, operating results, new technologies, or otherwise makes statements about our industry's or the Company's future or the industry's growth cycles, the statements are forward-looking and are subject to a number of risks and uncertainties that could cause actual results, performance or achievements to differ materially from the statements made. Factors that could adversely affect the Company's future results, performance or achievements include, without limitation: the continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of or increase in the broad-based industry slowdown resulting in the decline or increasing decline (as the case may be) in demand for electronic components and further excess customer inventory; continuing or worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension in the overall economic weakness; the reduced effectiveness of the Company's business and marketing strategies; an increase in the allowance for doubtful accounts Allowance for Doubtful Accounts An estimation made by a company and documented on its balance sheet for receivables that might go uncollected. Notes: It is standard practice for a company to have funds set aside for money that cannot be collected. receivable and bad debts or further write-offs of accounts receivable as a result of the weakened and/or further weakening financial condition of certain of the Company's customers; further write-offs of inventory arising from customers returning additional inventory and further canceling orders or the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of inventory as a result of adverse market conditions; a reduction in the Company's development of new customers, existing customer demand as well as the level of demand for products of its customers; deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the relationships with existing suppliers; price erosion in and price competition for products sold by the Company; difficulty in the management and control of expenses; the failure to achieve the expected impact from expense reduction programs; the inability of the Company to generate revenue commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the level of personnel and size of its infrastructure; price decreases on inventory that is not price protected; decreases in gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. , including decreasing margins resulting from the Company being required to have aggressive pricing programs; an increasing number of low-margin, large volume transactions and increased availability of the supply for certain products; increased competition from third party logistics companies, e-brokers and other Internet providers Internet provider - Internet Service Provider through the use of the Internet as well as from its traditional competitors; insufficient funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. , from the Company's credit facility and from other sources (debt and/or equity) to support the Company's operations; problems with telecommunication, computer and information systems; the inability of the Company to open new sales offices in a timely and cost-effective manner and to expand its product offerings and continue to enhance its service capabilities and the timing and cost thereof; a decline in technology growth; the failure to achieve acceptance of or grow in all or some of the new technologies that have been or are being supported by the Company; a change in interest rates; and the other risks and factors including those detailed in the Company's reports on Forms 10-K and Forms 10-Q and other press releases. These risks and uncertainties are beyond the ability of the Company to control. In many cases, the Company cannot predict the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. .
ALL AMERICAN SEMICONDUCTOR, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands except per share amounts)
Quarters Six Months
Periods Ended June 30 2001 2000 2001 2000
----------------------------------------------------------------------
Net Sales $ 100,062 $ 124,479 $ 225,979 $ 230,705
========= ========= ========= =========
Income from Continuing
Operations, Excluding
Non-Cash Charges $ 1,042 $ 6,849 $ 4,807 $ 10,559
========= ========= ========= =========
Income (Loss) from
Continuing Operations
Including Non-Cash
Charges and Before
Discontinued
Operations (1) $ (5,626) $ 2,898 $ (5,053) $ 4,067
Discontinued Operations (2) (8,356) 51 (8,258) 92
--------- --------- --------- ---------
Net Income (Loss) $ (13,982) $ 2,949 $ (13,311) $ 4,159
========= ========= ========= =========
Diluted Earnings Per Share:
Income (Loss) from
Continuing Operations
Including Non-Cash
Charges and Before
Discontinued
Operations (1) $ (1.46) $ .70 $ (1.31) $ 1.00
Discontinued Operations (2) (2.17) .01 (2.14) .02
--------- --------- --------- ---------
Net Income (Loss) $ (3.63) $ .71 $ (3.45) $ 1.02
========= ========= ========= =========
Diluted Average Shares 3,856,904 4,177,872 3,856,904 4,082,140
========= ========= ========= =========
(1) Includes $4,699,000, on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. , of non-cash charges primarily relating to inventory and accounts receivable for each of the quarter and six months ended June 30, 2001. (2) Reflects the after-tax impact from the disposal of two divisions of the Company which were discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: during the second quarter of 2001. |
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