American Stone Reports Loss for Third Quarter Due to Write-Offs.Business Editors AMHERST Amherst, city, Canada Amherst, town (1991 pop. 9,742), N central N.S., Canada. Amherst has a variety of light industries and is a service center for the surrounding agricultural region. Nearby are salt beds. , Ohio--(BUSINESS WIRE)--Nov. 15, 2002 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Stone Industries, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AMST AMST Advanced Medium STOL Transport (US DoD) AMST Amst Systemtechnik GmbH (Austria) AMST Art Museum of South Texas (Corpus Christi, Texas) ), a supplier of building stone products, reported a net loss of $1,161,773, or $.60 per 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. share, for the three months ended September 30, 2002, primarily as a result of write-downs in 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 totaling $989,642. For the same period of 2001, the Company reported a net loss of $84,493, or $.04 per diluted share. 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 the latest quarter were $1,404,826, up 13% compared with the same period a year ago. For the nine months ended September 30, 2002, American Stone reported a net loss of $1,313,608, or $.68 per diluted share, compared with a net loss of $503,747, or $.26 per diluted share in the year-ago period. Net sales for the first nine months were $3,655,768, a 38% increase over the first nine months of 2001. The higher sales for the quarter and the year to date were due to increased sales and marketing efforts over the previous 18 months. Orders were up in all segments, including several large architectural projects as well as increased sales to new distributors. Gross profit margin 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. before the write-downs decreased to 11% in the latest quarter from 16% in the third quarter a year ago due to excessive overtime costs, a higher percentage of returned product and excessive equipment downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. . Selling, general and administrative expense also increased as a percentage of sales in the latest quarter compared with the year-ago period. Interest expense for the latest quarter decreased 13% to $36,198 due to a decline in interest rates. The asset write-downs followed a request from the Board of Directors at the end of the third quarter for a thorough review of current inventory and accounts receivable. In that review, management determined that approximately $445,400 of inventory was scrap and that an inventory reserve of $437,452 should be established on existing inventory. Additionally, management determined that $106,781 of accounts receivable are not collectible collectible An asset of limited supply that is sought for a variety of reasons including, it is hoped, an increase in value. Stamps, antiques, coins, and works of art are among the many things usually classified as collectibles. and should be written off as bad debt. "Unfortunately, our review of the inventory determined that the market value was overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o ," said the Company's new president and chief executive officer, Russell Ciphers, Sr. "This write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. reflects the recognition that the cost basis of the inventory exceeded the market value. The new inventory figure reflects the highest value that management believes could be realized at current market prices. We have just added a commission salesman to focus on selling this inventory. We have also established new credit policies. We are going to get our overhead costs overhead costs see fixed costs. under control, stop putting out fires and working overtime, and catch up on deferred maintenance. "To address our liquidity problems," he continued, "Roulston Venture Capital Fund has agreed to lend the Company up to $300,000 in convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. . We believe this additional cash infusion will provide sufficient near-term operating capital Noun 1. operating capital - capital available for the operations of a firm (e.g. manufacturing or transportation) as distinct from financial transactions and long-term improvements capital, working capital - assets available for use in the production of further assets . "I am confident that American Stone has profitable opportunities. Sales are up 38% year to date. This is one of just a few companies capable of meeting some of the special demands of the historical restoration market. Our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. remains strong at $1.2 million, and we have high expectations for additional business. With sufficient working capital and direction, I believe this company is capable of achieving profitable growth year after year. But it is going to take six to nine months to get the business on the right track." American Stone Industries is a holding company that mines and sells stone predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. for the building stone market through its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , American Stone Corporation and Amherst Stone at Cleveland Quarries Quarries may refer to:
South Amherst is located at (41.356229, -82.241097)GR1. , one of the world's largest sandstone sandstone, sedimentary rock formed by the cementing together of grains of sand. The usual cementing material in sandstone is calcium carbonate, iron oxides, or silica, and the hardness of sandstone varies according to the character of the cementing material; quartz quarries. Amherst Stone is a distributor of stone products to builders and landscapers in northern Ohio. The Company's stock is traded on the OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. under the symbol AMST. For additional information, see the American Stone Web site at http://www.amst.com. This press release includes statements that may constitute 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. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The statements, "We believe this additional cash infusion will provide sufficient near-term operating capital," "I am confident that American Stone has profitability opportunities," "I believe this company is capable of achieving profitable growth year after year," and "...it is going to take six to nine months to get the business on the right track" are forward-looking in nature. Such statements are made based on management's expectations and beliefs concerning future events affecting the Company and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations expressed in or implied by forward-looking statements. Such risks include, but are not limited to, trends within the building construction industry, actions by competitors, equipment and operational problems, the success of promotional efforts, changes in relationships with major customers or in the financial condition of those customers, and the adequacy of the Company's financial resources. Further information about these matters is set forth in the Company's Form 10-KSB annual report filed with the Securities and Exchange Commission.
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(table follows)
AMERICAN STONE INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $ 1,404,826 $ 1,242,396 $ 3,655,768 $ 2,645,784
Cost of sales 2,131,860 1,054,972 3,951,376 2,427,692
------------ ------------ ------------ ------------
Gross profit (loss) (727,034) 187,424 (295,608) 218,092
Selling, general
and administrative
expenses 404,773 230,133 957,906 622,543
------------ ------------ ------------ ------------
Income (loss)
from operations (1,131,807) (42,709) (1,253,514) (404,451)
------------ ------------ ------------ ------------
Other
income (expense)
Interest income 6 - 185 4,500
Interest expense (36,198) (41,784) (96,227) (103,796)
Other income 6,226 - 35,948 -
------------ ------------ ------------ ------------
(29,966) (41,784) (60,094) (99,296)
------------ ------------ ------------ ------------
Income (loss)
before income
taxes (1,161,773) (84,493) (1,313,608) (503,747)
Provision for
income taxes - - - -
------------ ------------ ------------ ------------
Net income (loss) $(1,161,773) $ (84,493) $(1,313,608) $ (503,747)
------------ ------------ ------------ ------------
Net income
(loss) per
common share
Basic $ (0.60) $ (0.04) $ (0.68) $ (0.26)
============ ============ ============ ============
Diluted $ (0.60) $ (0.04) $ (0.68) $ (0.26)
============ ============ ============ ============
Average
common shares
outstanding 1,936,364 1,936,364 1,936,364 1,936,364
AMERICAN STONE INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2002 2001
------------- -------------
(Unaudited) (Audited)
ASSETS
Current assets
--------------
Cash $ 12,089 $ 27,733
Accounts receivable 766,986 658,322
Inventory 652,015 1,321,728
Prepaid expenses 34,425 78,811
------------- -------------
Total current assets 1,465,515 2,086,594
------------- -------------
Property, plant and
equipment, net - at cost 3,268,576 3,491,349
-------------------------- ------------- -------------
Other assets 50,293 50,293
------------ ------------- -------------
$ 4,784,384 $ 5,628,236
============= =============
LIABILITIES
Current liabilities
-------------------
Notes payable, bank line of credit $ 500,000 $ 694,245
Current portion of notes payable 393,771 391,016
Accounts payable 823,221 499,164
Accrued liabilities 256,075 275,519
------------- -------------
Total current liabilities 1,973,067 1,859,944
Long-term liabilities 1,027,224 670,591
--------------------- ------------- -------------
SHAREHOLDERS' EQUITY
Common Stock, $.001 par value,
20 million shares authorized
1,936,364 issued and outstanding 1,936 1,936
Additional capital 4,819,738 4,819,738
Retained earnings (deficit) (3,037,581) (1,723,973)
------------- -------------
1,784,093 3,097,701
------------- -------------
$ 4,784,384 $ 5,628,236
============= =============
Note: The balance sheet at December 31, 2001 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
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