All American Semiconductor Reports 2002 Results.Business Editors/High-Tech Writers MIAMI--(BUSINESS WIRE)--March 4, 2003 All American Semiconductor, Inc. (Nasdaq:SEMI), a leading distributor of electronic components, today announced its results for the quarter and year ended December 31, 2002. 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 for 2002 were $332.0 million, compared to net sales for 2001 of $381.1 million. Income 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 was $4.1 million for 2002, compared to a loss from continuing operations of $(12.4) million for 2001. The loss from continuing operations for 2001 includes $19.5 million of 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. primarily related 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 write-offs. Net income was $1.9 million or $.49 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. ) for 2002, including other income of $1.3 million 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. , compared to a net loss of $(22.6) million or $(5.85) per share (diluted) for 2001. The net loss for 2001 includes $13.2 million, on an after-tax basis, of non-cash charges and a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $9.0 million. The other income in 2002 primarily relates to a partial payment in settlement of an accounts receivable that had been written off in 2001. Net sales for the fourth quarter of 2002 were $77.0 million, compared to $66.4 million for the same period of 2001. Income from continuing operations was $701,000 for the fourth quarter of 2002, compared to a loss from continuing operations of $(10.5) million for the fourth quarter of 2001. The loss from continuing operations for the fourth quarter of 2001 includes $11.6 million of the non-cash charges described above. For the fourth quarter of 2002, net income was $7,000 or $.00 per share (diluted), compared to a net loss of $(8.9) million or $(2.30) per share (diluted) for the same period of 2001. The net loss for the 2001 period includes $7.8 million, on an after-tax basis, of the non-cash charges described above and a loss from discontinued operations of $724,000. Bruce M. Goldberg, President and Chief Executive Officer of All American, stated, "Market conditions remained very difficult during 2002. By working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to control our expenses and to manage our working capital, we were able to record net income for the year and for each of the quarters during 2002. During 2002, we were also able to further reduce our bank debt by over $30 million to a balance of $34 million at December 31, 2002. In addition, we reduced our inventory by over $28 million to $52.8 million at December 31, 2002. "Although our sales were down in 2002, we believe that our decline was less than the decline for semiconductor distribution in 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. and that All American gained market share in North America. Market conditions weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. significantly during the fourth
quarter of 2002. While the weakness in the fourth quarter of 2002 has
carried over into the beginning of the first quarter of 2003, we believe
that market conditions will improve in the latter part of the year. We
continue to develop our strategies to support the changing needs of our
customers and suppliers, including expanding our operations beyond North
America. We believe All American is well positioned within our industry
and we are confident that, when conditions do improve, our continued
commitment to our strategies will result in enhanced returns to our
shareholders in future periods."
All American is recognized as the nation's 5th largest distributor of semiconductors and the 10th largest electronic components distributor overall. The Company has offices in 36 strategic locations throughout North America. To the extent that this press release discusses financial projections, future performance, expectations, beliefs or intentions about our bookings, sales, markets, operating results, growth, or otherwise makes statements about market conditions or our industry's or the Company's future or plans, including All American's attainment of new customers and success with new business opportunities and global expansion, 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 the broad-based industry downturn resulting in the decline 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 level of effectiveness of the Company's business and marketing strategies, including those outside North America; 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 weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. 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·tionn. 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 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 telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. , computer and information systems; the inability of the Company to expand its product offerings or obtain product during periods of allocation; the inability of the Company to continue to enhance its service capabilities and the timing and cost thereof; the failure to achieve acceptance of or to grow in all or some of the new technologies that have been or are being supported by the Company; an increase in interest rates; the impact from changes in accounting rules; the adverse impact of terrorism on the economy; 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 Years
Periods Ended December 31 2002 2001 2002 2001
---------------------------------------------------------------------
Net Sales $ 76,985 $ 66,365 $ 332,047 $ 381,111
======== ======== ========= =========
Income (Loss)
from Continuing
Operations (1) (2) $ 701 $(10,452) $ 4,088 $ (12,360)
======== ======== ========= =========
Income (Loss) from
Continuing Operations
Before Discontinued
Operations (2) (3) $ 7 $ (8,159) $ 1,883 $ (13,593)
Discontinued Operations (4) - (724) - (8,982)
-------- -------- --------- ---------
Net Income (Loss) $ 7 $ (8,883) $ 1,883 $ (22,575)
======== ======== ========= =========
Diluted Earnings Per Share:
Income (Loss) from
Continuing Operations
Before Discontinued
Operations (2) (3) $ .00 $ (2.11) $ .49 $ (3.52)
Discontinued Operations (4) - (.19) - (2.33)
-------- -------- --------- ---------
Net Income (Loss) $ .00 $ (2.30) $ .49 $ (5.85)
======== ======== ========= =========
Diluted Average Shares 3,833,571 3,856,904 3,850,002 3,856,813
========= ========= ========= =========
(1) Includes $11,586,000 and $19,490,000 of non-cash charges
primarily relating to inventory and accounts receivable write-offs for
the quarter and year ended December 31, 2001, respectively.
(2) The year ended December 31, 2002 includes $2,220,000 and
$1,319,000 on a pretax and after-tax basis, respectively, of other
income primarily related to a partial payment in settlement of an
accounts receivable that had been written off in 2001.
(3) Includes $7,805,000 and $13,216,000, on an after-tax basis, of
the non-cash charges described above for the quarter and year ended
December 31, 2001, respectively.
(4) Reflects the after-tax impact from the disposal of two
divisions of the Company, which were discontinued during 2001.
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