-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O/BoDTd1FVsVjq32wV99EmBkkoe+yeJv8bw0nMlEttj0EUlA4kI3pBbytPIxYTEl YkH6rJ2JP1UeJPSHe9QjGA== 0001019056-01-500358.txt : 20010816 0001019056-01-500358.hdr.sgml : 20010816 ACCESSION NUMBER: 0001019056-01-500358 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALL AMERICAN SEMICONDUCTOR INC CENTRAL INDEX KEY: 0000818074 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 592814714 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16207 FILM NUMBER: 1714224 BUSINESS ADDRESS: STREET 1: 16115 N W 52ND AVENUE CITY: MIAMI STATE: FL ZIP: 33014 BUSINESS PHONE: 3056218282 MAIL ADDRESS: STREET 1: 16115 NW 52ND AVENUE CITY: MIAMI STATE: FL ZIP: 33014 10-Q 1 aa10q.txt FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 --or-- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 2001 Commission File Number: 0-16207 ALL AMERICAN SEMICONDUCTOR, INC. (Exact name of registrant as specified in its charter) Delaware 59-2814714 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 16115 Northwest 52nd Avenue, Miami, Florida 33014 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (305) 621-8282 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. [X] Yes [ ] No As of August 10, 2001, 4,040,150 shares (including 32,141 shares held by a wholly-owned subsidiary of the Registrant) of the common stock of All American Semiconductor, Inc. were outstanding. ================================================================================ ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES FORM 10-Q - INDEX Part Item Page No. No. Description No. - -------------------------------------------------------------------------------- I FINANCIAL INFORMATION: 1. Financial Statements Consolidated Condensed Balance Sheets at June 30, 2001 (Unaudited) and December 31, 2000............................ 1 Consolidated Condensed Statements of Operations for the Quarters and Six Months Ended June 30, 2001 and 2000 (Unaudited).................................................. 2 Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2001 and 2000 (Unaudited).......... 3 Notes to Consolidated Condensed Financial Statements (Unaudited).................................................. 4 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................... 7 3. Quantitative and Qualitative Disclosures about Market Risk.... 10 II OTHER INFORMATION: 2. Changes in Securities and Use of Proceeds..................... 11 6. Exhibits and Reports on Form 8-K.............................. 11 SIGNATURES.................................................... 11 i
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS June 30 December 31 ASSETS 2001 2000 - ------------------------------------------------------------------------------------------------- (Unaudited) Current assets: Cash ......................................................... $ 107,000 $ 335,000 Accounts receivable, less allowances for doubtful accounts of $2,563,000 and $3,283,000 ...................... 61,231,000 91,812,000 Inventories .................................................. 121,523,000 146,444,000 Other current assets ......................................... 4,518,000 3,745,000 ------------- ------------- Total current assets ....................................... 187,379,000 242,336,000 Property, plant and equipment - net ............................ 3,953,000 4,255,000 Deposits and other assets, including income tax benefit ........ 11,216,000 2,687,000 Excess of cost over fair value of net assets acquired - net .... 473,000 950,000 ------------- ------------- $ 203,021,000 $ 250,228,000 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------- Current liabilities: Current portion of long-term debt ............................ $ 257,000 $ 240,000 Accounts payable and accrued expenses ........................ 64,599,000 81,234,000 Income taxes payable ......................................... -- 968,000 Other current liabilities .................................... 263,000 304,000 ------------- ------------- Total current liabilities .................................. 65,119,000 82,746,000 Long-term debt: Notes payable ................................................ 104,412,000 120,643,000 Subordinated debt ............................................ 6,021,000 6,043,000 Other long-term debt ......................................... 1,180,000 1,198,000 ------------- ------------- 176,732,000 210,630,000 ------------- ------------- Commitments and contingencies Shareholders' equity: Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued .................................... -- -- Common stock, $.01 par value, 40,000,000 shares authorized, 4,040,150 and 4,039,620 shares issued and outstanding ...... 40,000 40,000 Capital in excess of par value ............................... 26,328,000 26,326,000 Retained earnings ............................................ 856,000 14,167,000 Treasury stock, at cost, 183,246 shares ...................... (935,000) (935,000) ------------- ------------- 26,289,000 39,598,000 ------------- ------------- $ 203,021,000 $ 250,228,000 ============= =============
See notes to consolidated condensed financial statements 1
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Quarters Six Months PERIODS ENDED JUNE 30 2001 2000 2001 2000 - ----------------------------------------------------------------------------------------------------------- NET SALES .............................. $ 100,062,000 $ 124,479,000 $ 225,979,000 $ 230,705,000 Cost of sales .......................... (86,922,000) (98,553,000) (187,827,000) (183,666,000) ------------- ------------- ------------- ------------- Gross profit ........................... 13,140,000 25,926,000 38,152,000 47,039,000 Selling, general and administrative expenses .............. (19,552,000) (19,077,000) (40,799,000) (36,480,000) Impairment of goodwill ................. (450,000) -- (450,000) -- ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS ................ (6,862,000) 6,849,000 (3,097,000) 10,559,000 Interest expense ....................... (2,357,000) (1,763,000) (5,118,000) (3,420,000) ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES .................. (9,219,000) 5,086,000 (8,215,000) 7,139,000 Income tax (provision) benefit ......... 3,593,000 (2,188,000) 3,162,000 (3,072,000) ------------- ------------- ------------- ------------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS .............. (5,626,000) 2,898,000 (5,053,000) 4,067,000 Discontinued operations: Income from operations (net of $168,000; $39,000; $244,000 and $70,000 income tax provision) ................ 225,000 51,000 323,000 92,000 Loss on disposal (net of $6,474,000 income tax benefit) .................. (8,581,000) -- (8,581,000) -- ------------- ------------- ------------- ------------- NET INCOME (LOSS) ...................... $ (13,982,000) $ 2,949,000 $ (13,311,000) $ 4,159,000 ============= ============= ============= ============= Basic earnings per share: Income (loss) from continuing operations ................ $(1.46) $ .76 $(1.31) $ 1.07 Discontinued operations ................ (2.17) .01 (2.14) .02 ------ ------ ------ ------ Net income (loss) ...................... $(3.63) $ .77 $(3.45) $ 1.09 ====== ====== ====== ====== Diluted earnings per share: Income (loss) from continuing operations ................ $(1.46) $ .70 $(1.31) $ 1.00 Discontinued operations ................ (2.17) .01 (2.14) .02 ------ ------ ------ ------ Net income (loss) ...................... $(3.63) $ .71 $(3.45) $ 1.02 ====== ====== ====== ======
See notes to consolidated condensed financial statements 2
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED JUNE 30 2001 2000 - --------------------------------------------------------------------------------------------- Cash Flows Provided by (Used For) Operating Activities ....... $ 16,056,000 $(12,619,000) ------------ ------------ Cash Flows From Investing Activities: Acquisition of property and equipment ........................ (267,000) (503,000) Decrease in other assets ..................................... 244,000 15,000 ------------ ------------ Cash flows used for investing activities .................. (23,000) (488,000) ------------ ------------ Cash Flows From Financing Activities: Net borrowings (repayments) under line of credit agreement ... (16,139,000) 13,144,000 Repayments of notes payable .................................. (124,000) (139,000) Purchase of treasury shares .................................. -- (28,000) Net proceeds from issuance of equity securities .............. 2,000 170,000 ------------ ------------ Cash flows provided by (used for) financing activities .... (16,261,000) 13,147,000 ------------ ------------ Increase (decrease) in cash .................................. (228,000) 40,000 Cash, beginning of period .................................... 335,000 173,000 ------------ ------------ Cash, end of period .......................................... $ 107,000 $ 213,000 ============ ============ Supplemental Cash Flow Information: Interest paid ................................................ $ 5,220,000 $ 2,672,000 ============ ============ Income taxes paid ............................................ $ 819,000 $ 1,693,000 ============ ============
See notes to consolidated condensed financial statements 3 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - --------------------- In the opinion of management, the accompanying unaudited Consolidated Condensed Financial Statements include all adjustments (consisting of normal recurring accruals or adjustments only) necessary to present fairly the financial position at June 30, 2001, and the results of operations and the cash flows for all periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be obtained for the entire year. For a summary of significant accounting policies (which have not changed from December 31, 2000) and additional financial information, see the Company's Annual Report on Form 10-K for the year ended December 31, 2000, including the consolidated financial statements and notes thereto which should be read in conjunction with these financial statements. The accompanying unaudited interim financial statements have been prepared in accordance with instructions to Form 10-Q and, therefore, do not include all information and footnotes required to be in conformity with generally accepted accounting principles. Earnings Per Share - ------------------ The following average shares were used for the computation of basic and diluted earnings per share: Quarters Six Months Periods Ended June 30 2001 2000 2001 2000 - -------------------------------------------------------------------------------- Basic .................. 3,856,904 3,813,910 3,856,904 3,807,939 Diluted ................ 3,856,904 4,177,872 3,856,904 4,082,140 2. LONG-TERM DEBT Outstanding borrowings at June 30, 2001 under the Company's line of credit facility aggregated $104,350,000. The Company's credit facility was amended subsequent to but effective as of the balance sheet date. As part of this amendment, the line of credit facility was reduced from $150 million to $125 million to better match the Company's borrowing requirements. This change benefits the Company by reducing the amount of the fee charged on the unused portion of the credit facility. Since June 30, 2001, outstanding borrowings under the credit facility have declined to $94,684,000 at August 10, 2001. In connection with the reduction of the credit facility to $125 million, $112,000 of deferred financing fees was written off to interest expense effective as of June 30, 2001. Also as part of the amendment, effective June 30, 2001, certain financial covenants were modified. In addition, the interest rate margins on the credit facility were increased to, at the Company's option, 1.0% for the prime rate portion or 3.25% for the LIBOR portion, effective August 14, 2001. Borrowings under this facility are collateralized by substantially all of the Company's assets. 3. OPTIONS During the quarter ended June 30, 2001, the Company granted an aggregate of 7,750 stock options to six individuals pursuant to the Employees', Officers', Directors' Stock Option Plan, as previously amended and restated (the "Employee Stock Option Plan"). These options have an exercise price of $5.64 per share (fair market value at date of grant) and vest over a five-year period and are exercisable over a six-year period. During the quarter ended June 30, 2001, 109,800 stock options were canceled at exercise prices ranging from $3.27 to $16.71 per share. The 109,800 stock options canceled include 88,900 4 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- options canceled effective June 21, 2001 which had exercise prices ranging from $13.02 to $16.71 per share. In connection with the cancellation of these 88,900 options, the Company has agreed with each of the Company's employees electing such cancellation to issue no earlier than six months but no later than nine months from the date of cancellation, an equal number of options at the then fair market value of the Company's common stock. During the quarter ended June 30, 2001, the Company granted 1,500 stock options to one individual pursuant to the Nonemployee Director Stock Option Plan. These options have an exercise price of $7.15 per share (fair market value at date of grant) and vest over a two-year period and are exercisable over a ten-year period. During the quarter ended March 31, 2001, no stock options were granted by the Company pursuant to its stock option plans. During the quarter ended March 31, 2001, a total of 530 stock options were exercised at exercise prices ranging from $3.27 to $4.49 per share and a total of 2,000 stock options were canceled at exercise prices ranging from $3.27 to $13.02 per share. 4. SPECIAL CHARGES As a result of a slowing economy and a severe widespread industry downturn, in the second quarter of 2001, the Company was forced to write off certain accounts receivable aggregating approximately $1.5 million. This write-off is reflected in "Selling, general and administrative expenses" in the accompanying unaudited Consolidated Condensed Statements of Operations. During 2000, the Company's inventory levels increased substantially to support higher levels of sales based on customer orders and forecasts. Inventory also increased during 2000 as a result of the addition of new suppliers and the anticipated sales growth related thereto. During the fourth quarter of 2000, a combination of improved product availability, a slowing economy and other factors created a sudden and significant adverse change in market conditions in our industry. As a result of this change, the customer base had a significant amount of excess inventory. In an effort to correct their inventory positions, customers began rescheduling and canceling their orders and returned significant amounts of inventory. Accordingly, purchase orders with the Company's supplier base have been delayed or canceled and the Company has used its inventory return privileges wherever possible. These efforts were made in an attempt to achieve inventory levels which more closely support the Company's reduced backlog from its customers as well as to improve the Company's product mix. Even after taking these measures, as industry conditions continued to worsen, the prospect of customers taking the inventory that was returned or subject to rescheduled orders became more and more remote. As a result of this and the severe adverse industry conditions, the Company wrote off inventory aggregating approximately $6.0 million during the second quarter of 2001. The portion of inventory that was written off is being scrapped and removed from stock. There can be no assurance that adverse market conditions will not continue or worsen and that further corrections may not be necessary in the future. 5. DISCONTINUED OPERATIONS As a result of an acquisition in 1995, the Company created Aved Display Technologies ("ADT"), a separate division engaged in the design, development and manufacture of several proprietary driver board products for flat panel display applications. In the fourth quarter of 2000, the Company created a division which operated under the name Integrated Display Technologies ("IDT"). This division was intended to address customer needs for design, integration and turnkey support for display solutions and specialized display applications. Due to the overall weakness in the economy, the negative impact of the 5 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- broad-based industry slowdown and other factors, ADT and IDT have not generated cash flows as anticipated. As a result, management has decided to discontinue these divisions. The Company finalized its plan of disposal during the second quarter of 2001. Accordingly, these divisions are accounted for as discontinued operations and the results of operations for all periods shown are segregated in the accompanying unaudited Consolidated Condensed Statements of Operations. The loss on disposal of $15,055,000 on a pretax basis includes the estimated costs and expenses associated with the disposal of $14,943,000 primarily made up of the write-off of $4,488,000 of inventory and $8,586,000 of accounts receivable. The inventory that was written off is being scrapped and removed from stock. In addition, the loss on disposal includes a provision of $112,000 on a pretax basis for operating losses during the phase-out period, which is expected to continue for approximately two months. Sales from these divisions, including the related turnkey support business, were $2,878,000 for the three months ended June 30, 2001 and $1,515,000 for the same period of 2000; and were $6,997,000 for the six months ended June 30, 2001 and $2,562,000 for the 2000 period. The net assets of discontinued operations, after reflecting certain non-cash write-offs included in the accompanying unaudited Consolidated Condensed Balance Sheet at June 30, 2001, are summarized as follows: Accounts receivable .................... $ 986,000 Other current assets ................... 36,000 Property, plant and equipment - net .... 19,000 Current liabilities .................... (34,000) ----------- Net assets ............................. $ 1,007,000 =========== 6. IMPAIRMENT OF GOODWILL The Company periodically reviews the value of its excess of cost over the fair value of net assets acquired to determine if an impairment has occurred. As part of this review, the Company measures the estimated future operating cash flows of acquired businesses and compares that with the carrying value of excess of cost over the fair value of net assets. As a result of its review, a write-down of approximately $450,000 was recorded as of June 30, 2001. 6 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- Management's Discussion and Analysis of Financial Condition and Results of - -------------------------------------------------------------------------- Operations - ---------- All American Semiconductor, Inc. and its subsidiaries (the "Company") is a national distributor of electronic components manufactured by others. The Company distributes a full range of semiconductors (active components), including transistors, diodes, memory devices, microprocessors, microcontrollers and other integrated circuits, as well as passive components, such as capacitors, resistors, inductors and electromechanical products, including cable, switches, connectors, filters and sockets. These products are sold primarily to original equipment manufacturers in a diverse and growing range of industries, including manufacturers of computers and computer-related products; home office and portable equipment; networking, satellite, wireless and other communications products; Internet infrastructure equipment and appliances; automobiles; consumer goods; robotics and industrial equipment; defense and aerospace equipment; and medical instrumentation. The Company also sells products to contract electronics manufacturers, or electronics manufacturing services, or EMS, providers who manufacture products for companies in all electronics industry segments. Through the Aved Memory Products division of its subsidiary, Aved Industries, Inc., the Company also designs and has manufactured under the label of its subsidiary's division, certain memory modules which are sold to original equipment manufacturers. Prior to the second quarter of 2001, the Company also designed and had manufactured under the label of Aved Display Technologies, a division of the Company, certain board-level products including flat panel display driver boards. As a result of adverse industry conditions and other factors, management decided to discontinue its Aved Display Technologies division during the second quarter of 2001. See Note 5 to Notes to Consolidated Condensed Financial Statements (Unaudited). Results of Operations - --------------------- Net sales from continuing operations for the quarter and six months ended June 30, 2001 were $100.1 million and $226.0 million, respectively, representing a 19.6% and 2.0% decrease over net sales from continuing operations of $124.5 million and $230.7 million for the same periods of 2000. The decreases were attributable to a broad-based industry slowdown, reduced demand relating to excess inventory at our customer base as well as the general weakness in the overall economy. Management expects that the weakness in sales may continue through at least the third quarter of 2001. See Note 5 to Notes to Consolidated Condensed Financial Statements (Unaudited) for net sales from discontinued operations. Without giving effect to a non-cash inventory write-off of approximately $6.0 million resulting from adverse industry conditions (see Note 4 to Notes to Consolidated Condensed Financial Statements (Unaudited)), gross profit was $19.1 million in the second quarter of 2001 representing a 26.2% decrease from gross profit of $25.9 million for the same period of 2000. For the first six months of 2001, gross profit was $44.1 million, without giving effect to the inventory write-off discussed above, compared to $47.0 million for the same period of 2000, representing at 6.1% decrease. The decreases were due to the decline in sales as well as a decrease in gross profit margins as a percentage of net sales. Gross profit margins as a percentage of net sales, without giving effect to the inventory write-off, were 19.1% and 19.5% for the second quarter and first six months of 2001 compared to 20.8% and 20.4% for the second quarter and first six months of 2000. The decrease in gross profit margins reflects a general industry slowdown, reduced demand relating to excess inventory at the customer base and improved product availability. In addition, we continue to develop long-term strategic relationships with accounts that have required aggressive pricing programs and we expect a greater number of low margin, large volume transactions. Management therefore expects downward pressure on gross profit margins in the future. After giving effect to the inventory write-off, gross profit dollars were $13.1 million and $38.2 million and gross profit margins were 13.1% and 16.9% for the second quarter and first six months of 2001, respectively. 7 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- Selling, general and administrative expenses ("SG&A"), without giving effect to a write-off of $1.5 million of accounts receivable, was $18.1 million for the second quarter of 2001 compared to $19.1 million for the second quarter of 2000. The decrease in SG&A for the second quarter of 2001, compared to the 2000 period, reflects the implementation of certain expense reduction programs, including workforce reductions and a hiring freeze, all of which began during the second quarter of 2001. SG&A for the first half of 2001, without giving effect to the write-off of certain accounts receivable, was $39.3 million compared to $36.5 million for the same period of 2000. The increase in SG&A for the first six months, when comparing 2001 to 2000, was due to increases in our management team, expansion of our sales force and increases in our staff in almost every department, which began during the second half of 2000 and continued into early 2001 to support higher levels of sales experienced during the second half of 2000 and the anticipation of higher sales levels continuing through 2001. At the same time, we increased our infrastructure to support the changing needs and additional requirements of our customers. At the end of the first quarter of 2001 it became apparent that industry conditions were worsening and, in an effort to reduce operating losses, the Company began expense reduction programs during the second quarter of 2001. After giving effect to the write-off of certain accounts receivable, SG&A was $19.6 million and $40.8 million for the second quarter and first six months of 2001. SG&A as a percentage of net sales, without giving effect to the write-off of accounts receivable discussed above, was 18.1% and 17.4% for the quarter and six months ended June 30, 2001, compared to 15.3% and 15.8% for the same periods of 2000. The increases in SG&A as a percentage of net sales reflect the increases in expenses associated with the expansion strategies discussed above at a time when sales unexpectedly declined. After taking into account the write-off of accounts receivable, SG&A as a percentage of net sales was 19.5% and 18.1% for the quarter and six months ended June 30, 2001. Excluding the non-cash charges for inventory and accounts receivable write-offs discussed above and also excluding a $450,000 non-cash write-off of goodwill (see Note 6 to Notes to Consolidated Condensed Financial Statements (Unaudited)), income from continuing operations was $1.0 million and $4.8 million for the second quarter and first six months of 2001 compared to $6.8 million and $10.6 million for the 2000 periods. The decrease in income from continuing operations for the second quarter of 2001, excluding the non-cash charges, compared to the same period of 2000 was primarily attributable to decreases in sales and gross profit dollars. For the six months ended June 30, 2001, income from continuing operations, excluding the non-cash charges, decreased compared to the six months ended June 30, 2000 due to a reduction in sales and gross profit dollars as well as an increase in SG&A. See Notes 4 and 6 to Notes to Consolidated Condensed Financial Statements (Unaudited). After giving effect to the non-cash charges, the Company had a loss from continuing operations of $(6.9) million for the second quarter of 2001 compared to $6.8 million of income from continuing operations for the second quarter of 2000. After giving effect to the non-cash charges, for the first six months ended June 30, 2001, the loss from continuing operations was $(3.1) million compared to $10.6 million of income from continuing operations for the same period of 2000. Interest expense increased to $2.4 million and $5.1 million for the second quarter and first half of 2001, from $1.8 million and $3.4 million for the same periods of 2000. The increases in interest expense resulted from growth in our average borrowings caused by the previously mentioned expansion of our infrastructure to support the Company's anticipated sales growth as well as increases in inventory and accounts receivable. The impact from the growth in average borrowings was partially offset by a decrease in interest rates. Effective August 14, 2001, the interest rate margins under the Company's line of credit agreement, as discussed below and in Note 2 to Notes to Consolidated Condensed Financial Statements (Unaudited), increased. The impact from this rate increase should be partially offset in the short term by the anticipated continued reduction in average borrowings as well as decreases in overall interest rates. 8 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- Due to the overall weakness in the economy, the negative impact of the broad-based industry slowdown and other factors, Aved Display Technologies ("ADT") and Integrated Display Technologies ("IDT") have not generated cash flows as anticipated. As a result, during the second quarter of 2001, management decided to discontinue these divisions. Accordingly, these divisions are accounted for as discontinued operations in the accompanying unaudited Consolidated Condensed Financial Statements. The loss on disposal of $15.1 million on a pretax basis includes the estimated costs and expenses associated with the disposal of $14.9 million primarily made up of the write-off of $4.5 million of inventory and $8.6 million of accounts receivable. In addition, the loss on disposal includes a provision of $112,000 on a pretax basis for operating losses during the phase-out period, which is expected to continue for approximately two months. See Note 5 to Notes to Consolidated Condensed Financial Statements (Unaudited). After giving effect to the non-cash charges and the loss from discontinued operations discussed above, the Company had net losses of $(14.0) million, or $(3.63) per share (diluted), and $(13.3) million, or $(3.45) per share (diluted), for the quarter and six months ended June 30, 2001, compared to net income of $2.9 million, or $0.71 per share (diluted), and $4.2 million, or $1.02 per share (diluted), for the 2000 periods. Liquidity and Capital Resources - ------------------------------- Working capital at June 30, 2001 decreased to $122.3 million from working capital of $159.6 million at December 31, 2000. The current ratio was 2.88:1 at June 30, 2001 compared to 2.93:1 at December 31, 2000. The decrease in working capital was primarily due to decreases in accounts receivable and inventory which were partially offset by a decrease in accounts payable. Accounts receivable levels at June 30, 2001 were $61.2 million, compared to accounts receivable of $91.8 million at December 31, 2000. The decrease in accounts receivable was due to the significant reduction in sales in the second quarter of 2001 compared to the latter part of 2000, as well as to the non-cash write-offs discussed previously. Inventory levels were $121.5 million at June 30, 2001, down from $146.4 million at December 31, 2000. The decrease in inventory reflects our efforts to bring inventory positions in line with the reduced levels of sales as well as the non-cash inventory write-offs discussed previously. Accounts payable and accrued expenses decreased to $64.6 million at June 30, 2001 compared to $81.2 million at December 31, 2000 as a result of reduced purchases combined with the delay or cancellation of purchase orders in an effort to bring inventory levels in line with the reduced levels of sales. Outstanding borrowings at June 30, 2001 under the Company's line of credit facility aggregated $104.4 million. The Company's credit facility was amended subsequent to but effective as of the balance sheet date. As part of this amendment, the line of credit facility was reduced from $150 million to $125 million to better match the Company's borrowing requirements. This change benefits the Company by reducing the amount of the fee charged on the unused portion of the credit facility. Since June 30, 2001, outstanding borrowings under the credit facility have declined to $94.7 million at August 10, 2001. In connection with the reduction of the credit facility to $125 million, $112,000 of deferred financing fees was written off to interest expense effective as of June 30, 2001. Also as part of the amendment, effective June 30, 2001, certain financial covenants were modified. In addition, the interest rate margins on the credit facility were increased to, at the Company's option, 1.0% for the prime rate portion or 3.25% for the LIBOR portion, effective August 14, 2001. Borrowings under this facility are collateralized by substantially all of the Company's assets. The Company currently expects that its cash flows from operations and additional borrowings available under its credit facility will be sufficient to meet the Company's current financial requirements over the next twelve months. 9 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- Forward-Looking Statements; Business Risks - ------------------------------------------ This Form 10-Q contains forward-looking statements (within the meaning of Section 21E. of the Securities Exchange Act of 1934, as amended), representing the Company's current expectations and beliefs relating to the Company's future performance and operating results, its bookings, products, services, markets and industry, and/or future events relating to or effecting the Company and its business and operations. If and when used in this Form 10-Q, the words "believes," "estimates," "plans," "expects," "attempts," "intends," "anticipates," "could," "may," "explore" and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. The actual performance, results or achievements of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties. Factors that could adversely affect the Company's future results, performance or achievements include, without limitation: the continuance 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 in the overall economic weakness; the reduced effectiveness of the Company's business and marketing strategies; an increase in the allowance for doubtful accounts 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 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 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 with the level of personnel and size of its infrastructure; price decreases on inventory that is not price protected; decreases in gross profit margins, 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 through the use of the Internet as well as from its traditional competitors; insufficient funds from operations, 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; the impact on certain of the Company's suppliers and customers of economic or financial turbulence in off-shore economies and/or financial markets, change in government tariffs or duties, currency fluctuations; a change in interest rates; and the other risks and factors including those detailed in this Form 10-Q and in the Company's Form 10-K for the fiscal year ended December 31, 2000 and other filings with the Securities and Exchange Commission and in its 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. Quantitative and Qualitative Disclosures about Market Risk - ---------------------------------------------------------- The Company's credit facility bears interest based on interest rates tied to the prime or LIBOR rate, either of which may fluctuate over time based on economic conditions. As a result, the Company is subject to market risk for changes in interest rates and could be subjected to increased or decreased interest payments if market interest rates fluctuate. If market interest rates increase, the impact may have a material adverse effect on the Company's financial results. 10 ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- PART II. OTHER INFORMATION ITEM 2. Changes in Securities and Use of Proceeds - ------- ----------------------------------------- (c) Sales of Unregistered Securities -------------------------------- The Company has not issued or sold any unregistered securities during the quarter ended June 30, 2001, although, pursuant to the Company's Employee Stock Option Plan, the Company granted stock options to six individuals during the quarter ended June 30, 2001, to purchase 7,750 shares of the Company's Common Stock at an exercise price of $5.64 per share and, pursuant to the Company's Nonemployee Director Stock Option Plan, the Company granted stock options to one individual during the quarter ended June 30, 2001 to purchase an aggregate of 1,500 shares of the Company's Common Stock at an exercise price of $7.15 per share. The stock options relating to the Employee Stock Option Plan vest over a five-year period and are exercisable over a six-year period and the stock options relating to the Nonemployee Director Stock Option Plan vest over a two-year period and are exercisable over a ten-year period. All of the stock options were granted by the Company in reliance upon the exemption from registration available under Section 4(2) of the Securities Act of 1933, as amended. See Note 3 to Notes to Consolidated Condensed Financial Statements (Unaudited). ITEM 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits -------- 10.1 Amendment No. 9 to Loan and Security Agreement dated August 14, 2001. 11.1 Statement Re: Computation of Per Share Earnings (Unaudited). (b) Reports on Form 8-K ------------------- The Company did not file any reports on Form 8-K during the quarter ended June 30, 2001. SIGNATURES Pursuant to the requirements 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. All American Semiconductor, Inc. ----------------------------------------- (Registrant) Date: August 14, 2001 /s/ PAUL GOLDBERG ----------------------------------------- Paul Goldberg, Chairman of the Board (Duly Authorized Officer) Date: August 14, 2001 /s/ HOWARD L. FLANDERS ----------------------------------------- Howard L. Flanders, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 11 EX-10 4 ex10-1.txt EXHIBIT 10.1 Exhibit 10.1 AMENDMENT NO. 9 TO LOAN AND SECURITY AGREEMENT --------------------------- August 14, 2001 All American Semiconductor, Inc. 16115 Northwest 52nd Avenue Miami, Florida 33014 Attention: Chief Financial Officer Ladies and Gentlemen: Reference is made to the Loan and Security Agreement dated as of May 3, 1996 among Harris Trust and Savings Bank, as a Lender and as Administrative Agent for the Lenders, American National Bank and Trust Company of Chicago, as a Lender and as Collateral Agent for the Lenders, the other Lenders party thereto and All American Semiconductor, Inc., as amended to date (the "Loan Agreement"). Unless defined herein, capitalized terms used herein shall have the meanings provided for such terms in the Loan Agreement. The Borrower has requested that the Requisite Lenders agree to amend the Loan Agreement in certain respects. The Agents and the Requisite Lenders have agreed to the foregoing on the terms and pursuant to the conditions provided herein. Therefore, the parties hereto hereby agree as follows: 1. Amendments to Loan Agreement. The Loan Agreement is hereby amended, as follows: (a) The first "WHEREAS" clause in the Loan Agreement is hereby amended by deleting therefrom the amount "One Hundred Fifty Million Dollars ($150,000,000)" and inserting in its place the amount "One Hundred Twenty-Five Million Dollars ($125,000,000)". (b) The definition of the term "Applicable Margin" contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety, as follows: " 'Applicable Margin' shall mean (a) from June 30, 2001 to, but not including August 14, 2001, 0.25% for Domestic Rate Portions and 2.25% for LIBOR Portions; and (b) at all times on and after August 14, 2001, 1.00% for Domestic Rate Portions and 3.25% for LIBOR Portions." (c) Clause (b)(i) of the definition of the term "Default" contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety, as follows: "(i) any of Section 3.2 through 3.16, 3.18, 5, 7.2, 7.7, 7.19 or 8 of this Agreement," (d) A new defined term "Floating Inventory Amount" is hereby inserted into Section 1.1 of the Loan Agreement, in appropriate alphabetical order, as follows: " 'Floating Inventory Amount' shall mean an amount equal to (i) two and three-quarters (2.75) at all times during the period commencing on June 30, 2001 and ending on March 31, 2002 and (ii) three (3.00) at all times on and after April 1, 2002." (e) The definition of the term "Floating Inventory Cap" contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety, as follows: " 'Floating Inventory Cap' shall mean an amount, determined as of the last day of each calendar month, for the three-month period ending on such date, equal to (i) the aggregate cost of goods sold for the applicable three-month period, multiplied by (ii) the result of four (4), divided by the Floating Inventory Amount, and multiplied by one-half (0.50), with the result rounded to the next highest multiple of One Million Dollars ($1,000,000). The Floating Inventory Cap shall be calculated for the Designated Companies on a consolidated basis in accordance with GAAP and with reference to the financial statements of the Designated Companies for the applicable period to be delivered to the Agents pursuant to Section 7.1 and shall be prospectively effective upon receipt by the Agents of such financial statements." (f) The definition of the term "Inventory Turnover" contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety, as follows: " 'Inventory Turnover' shall mean an amount, determined as of June 30, 2001 and as of the last day of each calendar month thereafter, for the three-month period ending on such date, equal to (i) the product of the aggregate cost of goods sold for the applicable three-month period, multiplied by four (4), divided by (ii) the result of the aggregate gross book value of Inventory on the first day of each calendar month within such three-month period, divided by three (3). Inventory Turnover shall be calculated for the Designated Companies on a consolidated basis in accordance with GAAP and with reference to the financial statements of the Designated Companies for such period to be delivered to the Agents pursuant to Section 7.1." (g) A new defined term "Lease Lender" is hereby inserted into Section 1.1 of the Loan Agreement, in appropriate alphabetical order, as follows: " 'Lease Lender' shall mean GE Capital Corporation or another Person reasonably acceptable to the Agents and that is providing Permitted Lease Financing to a Designated Company." -2- (h) The definition of the term "Maximum Facility" contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety, as follows: " 'Maximum Facility' shall mean an amount equal to One Hundred Twenty-Five Million Dollars ($125,000,000)." (i) The definition of the term "OS Franchise Inventory Sublimit" contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety, as follows: " 'OS Franchise Inventory Sublimit' shall mean the amount set forth below during the applicable period set forth below opposite such amount: ------------------------------------------------------------------------ Period Amount ------ ------ ------------------------------------------------------------------------ June 1, 2001 through August 31, 2001 $14,150,000 ------------------------------------------------------------------------ September 1, 2001 through September 30, 2001 $13,000,000 ------------------------------------------------------------------------ October 1, 2001 through October 31, 2001 $12,500,000 ------------------------------------------------------------------------ November 1, 2001 through November 30, 2001 $11,500,000 ------------------------------------------------------------------------ December 1, 2001 through December 31, 2001 $11,000,000 ------------------------------------------------------------------------ January 1, 2002 and thereafter $10,000,000" ------------------------------------------------------------------------ (j) A new defined term "ParView Leases" is hereby inserted into Section 1.1 of the Loan Agreement, in appropriate alphabetical order, as follows: " 'ParView Leases' shall mean, collectively, all leases or similar agreements in existence between ParView and its customers and relating to products of any Designated Companies." (k) A new defined term "Permitted Lease Financing" is hereby inserted into Section 1.1 of the Loan Agreement, in appropriate alphabetical order, as follows: " 'Permitted Lease Financing' shall mean indebtedness not in excess of $5,000,000 incurred by a Designated Company to Lease Lender on terms and conditions, and pursuant to agreements and documents, reasonably satisfactory to the Agents and secured only by liens and security interests permitted under Section 8.1(g) hereof." (l) The definition of the term "Loan Availability" contained in Section 2.1(a) of the Loan Agreement is hereby amended and restated in its entirety, as follows: "(i) eighty-five percent (85%) of the face amount (less maximum discounts, credits and allowances which may be taken by or granted to Account -3- Debtors in connection therewith) then outstanding under existing Eligible Accounts at such time; plus (ii) the lesser of (a) the sum of (x) fifty percent (50%) of the value of Eligible Inventory consisting of Franchise Inventory other than OS Franchise Inventory, (y) the lesser of (I) fifty percent (50%) of the value of Eligible Inventory consisting of OS Franchise Inventory and (II) the OS Franchise Inventory Sublimit and (z) the lesser of (I) twenty percent (20%) of the value of Eligible Inventory consisting of Non-Franchise Inventory and (II) Two Million Five Hundred Thousand Dollars ($2,500,000), and (b) the applicable Floating Inventory Cap. For purposes of clause (ii) above, Inventory will be valued at the lower of average cost or market value." (m) Section 2.6(a)(iii) of the Loan Agreement is hereby amended and restated in its entirety, as follows: "(iii) Each LIBOR Portion shall be in a minimum amount of One Million Dollars ($1,000,000) or such greater amount which is an integral multiple of One Hundred Thousand Dollars ($100,000); and the aggregate amount of all LIBOR Portions shall not at any time exceed (A) Ninety-Four Million Dollars ($94,000,000) at all times prior to September 4, 2001 and (B) Eighty Million Dollars ($80,000,000) at all times on and after September 4, 2001." (n) Section 2.7(a) of the Loan Agreement is hereby amended and restated in its entirety, as follows: "(a) The Borrower shall pay to the Administrative Agent, for the account of the Lenders, an unused facility fee determined by (i) subtracting from the Maximum Facility, the sum of the average daily outstanding Revolving Loans during the immediately preceding calendar month and the average daily Letter of Credit Exposure during the immediately preceding calendar month and (ii) multiplying the result thereof by three-eighths of one percent (0.375%) per annum. The unused facility fees shall be computed on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed and shall be payable monthly in arrears on the first day of each calendar month." (o) Section 2.7(f) of the Loan Agreement is hereby deleted in its entirety. (p) A new Section 7.19 is hereby inserted into the Loan Agreement, as follows: "7.19 Consultant. ---------- On or before August 25, 2001, the Borrower shall retain, and shall thereafter continue to retain, at the Borrower's expense, a business consultant reasonably acceptable to the Agents. Such consultant shall review the Borrower's -4- business plan, assist the Borrower in working capital management and perform such other functions as may be determined by the Borrower or reasonably requested by the Agents. The Borrower agrees to authorize such consultant to meet with the Agents at the Agents' request, to provide any information obtained or developed by it for the Borrower to the Agents and the Lender and to make all written reports or other written analyses produced by it available to the Agents and the Lenders." (q) Section 8.1 of the Loan Agreement is hereby amended by (i) deleting the word "and" at the end of clause (e) thereof and (ii) inserting the following after clause (f) thereof and before the period: "; and (g) liens in and security interests on a Designated Company's rights in respect of any ParView Leases and the products subject to such ParView Leases, granted in favor of a Lease Lender in order to secure the Permitted Lease Financing." (r) Section 8.2 of the Loan Agreement is hereby amended by (i) deleting the word "and" at the end of clause (h) thereof and (ii) inserting the following after clause (i) thereof and before the period: "; and (j) up to $5,000,000 of indebtedness of a Designated Company in respect of Permitted Lease Financing." (s) Section 8.4 of the Loan Agreement is hereby amended by (i) deleting the word "and" at the end of clause (h) thereof and (ii) inserting the following after clause (i) thereof and before the period: "and (j) investments by one or more Designated Companies consisting of capital stock of ParView acquired by such Designated Companies in non-cash transactions in settlement of outstanding Accounts of such Designated Companies owing by ParView." (t) Section 8.5 of the Loan Agreement is hereby amended and restated in its entirety, as follows: "8.5 Guarantees. ---------- Except (a) as set forth in Schedule 8.5, (b) as set forth in the definition of the term "Permitted Acquisitions," and (c) for an unsecured guarantee by the Borrower of up to $1,000,000 of obligations of ParView relating to the financing by ParView of some or all of the ParView Leases, which guaranty shall have terms and conditions, and be evidenced by documents and agreements, reasonably satisfactory to the Agents, no Designated Company shall guarantee, endorse or otherwise in any way become or be responsible for obligations of any other Person, whether by agreement to purchase the indebtedness of any other Person or through the purchase of goods, supplies or services, or maintenance of working capital or other balance sheet covenants or conditions, or by way of stock -5- purchase, capital contribution, advance or loan for the purpose of paying or discharging any indebtedness or obligation of such other Person or otherwise, except endorsements of negotiable instruments for collection in the ordinary course of business and guaranties by the Borrower of the obligations (including real estate leases) of another Designated Company." (u) Section 8.8 of the Loan Agreement is hereby amended and restated in its entirety, as follows: "8.8. Capital Expenditure Limitations. ------------------------------- No Designated Company shall purchase, invest in or otherwise acquire, or enter into commitments to purchase, invest in or otherwise acquire, additional real estate, machinery equipment, vehicles or other fixed assets, which, in the aggregate, cost the Designated Companies, taken as a group, more than (a) Two Million Dollars ($2,000,000) during the 2001 fiscal year or (b) Two Million Five Hundred Thousand Dollars ($2,500,000) during each fiscal year thereafter, plus, in each case, (i) any capital assets acquired in connection with a Permitted Acquisition and (ii) any capital assets acquired with the proceeds of insurance which replaces lost or damaged capital assets, to the extent of such proceeds." (v) Section 8.17 of the Loan Agreement is hereby amended and restated in its entirety, as follows: "8.17 Minimum Tangible Net Worth. -------------------------- Tangible Net Worth of the Designated Companies, on a consolidated basis, shall not at any time during any period set forth below be less than the amount set forth below opposite such period: Period Amount ------ ------ June 30, 2001 through and including $20,000,000 September 29, 2001 September 30, 2001 through and including $34,000,000 December 30, 2001 December 31, 2001 through and including $40,000,000 December 30, 2002 December 31, 2002 through and including $45,000,000 December 30, 2003 December 31, 2003 and thereafter $50,000,000" -6- (w) Section 8.18 of the Loan Agreement is hereby amended and restated in its entirety, as follows: "8.18 Minimum Debt Service Coverage Ratio. ----------------------------------- The Debt Service Coverage Ratio of the Designated Companies, on a consolidated basis, shall not on the last day of any calendar quarter set forth below, for the period ending on such date, be less than the ratio set forth below opposite such date: Date Ratio ---- ----- Twelve month period ending June 30, 2001 -0.60 : 1.00 Twelve month period ending September 30, 2001 1.25 : 1.00" and each twelve month period ending on the last day of a calendar quarter thereafter (x) Section 8.19 of the Loan Agreement is hereby amended and restated in its entirety, as follows: "8.19 Minimum Inventory Turnover. -------------------------- Inventory Turnover shall not on the last day of any calendar month ending on or after June 30, 2001, for the three-month period ending on such date, be less than the amount set forth below for such date: Month Minimum Inventory Turnover ----- -------------------------- June 30, 2001 2.2 July 31, 2001 2.2 August 31, 2001 2.3 September 30, 2001 and the last day 3.0" of each calendar month thereafter (y) The Maximum Loan Amount of each Lender is amended and restated as set forth in Annex I attached hereto. 2. Scope. This Amendment No. 9 to Loan and Security Agreement (this "Amendment") shall have the effect of amending the Loan Agreement and the other Financing Agreements as appropriate to express the agreements contained herein. In all other respects, the Loan Agreement and the other Financing Agreements shall remain in full force and effect in accordance with their respective terms. 3. Conditions to Effectiveness. This Amendment shall be effective retroactive to June 30, 2001 upon the execution hereof by the Requisite Lenders, the acceptance hereof by Borrower and each Guarantor, and the delivery hereof to the Administrative Agent, at -7- 111 West Monroe Street, Chicago, Illinois 60603, Attention: Mr. William Kane, Vice President, on or before August 14, 2001, together with an amendment fee of $20,000, which shall be payable on a pro rata basis to each Lender that executes this Amendment on or prior to August 14, 2001. Very truly yours, HARRIS TRUST AND SAVINGS BANK, as Administrative Agent and a Lender Pro Rata Share: 20% By: /s/ WILLIAM J. KANE ------------------------------------ Its: Vice President ------------------------------------ AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as Collateral Agent and a Lender Pro Rata Share: 20% By: /s/ M. MARTHA GASKIN ------------------------------------ Its: First Vice President ------------------------------------ FLEET BUSINESS CREDIT CORPORATION, formerly known as SANWA BUSINESS CREDIT CORPORATION, as a Lender Pro Rata Share: 15% By: ------------------------------------ Its: ------------------------------------ FIRSTAR BANK N.A., formerly known as MERCANTILE BUSINESS CREDIT, INC., as a Lender Pro Rata Share: 15% By: /s/ ROBIN VAN METER ------------------------------------ Its: Asst. Vice President ------------------------------------ -8- GMAC COMMERCIAL CREDIT LLC, formerly known as THE BANK OF NEW YORK COMMERCIAL CORPORATION, as a Lender Pro Rata Share: 15% By: /s/ ANTHONY VIOLA ------------------------------------ Its: Vice President ------------------------------------ BANK OF AMERICA, N.A., formerly known as NATIONSBANK, N.A. successor by merger to NATIONSBANK OF TEXAS, N.A., as a Lender Pro Rata Share: 15% By: ------------------------------------ Its: ------------------------------------ Acknowledged and agreed to as of this 14th day of August, 2001. ALL AMERICAN SEMICONDUCTOR, INC. By: /s/ HOWARD L. FLANDERS ------------------------------------ Its: EVP & CFO ------------------------------------ -9- Acknowledgment and Acceptance of Guarantors ------------------------------------------- Each of the undersigned, in its capacity as a Guarantor of the Liabilities of Borrowers to Agents and Lenders under the Loan Agreement, hereby acknowledges receipt of the foregoing Amendment No. 9 to Loan and Security Agreement, accepts and agrees to be bound by the terms thereof, ratifies and confirms all of its obligations under the Master Corporate Guaranty executed by it and agrees that such Master Corporate Guaranty shall continue in full force and effect as to it, notwithstanding such amendment. Dated: August 14, 2001 Each of the Subsidiaries of All American Semiconductor, Inc. listed on Exhibit A attached hereto By: /s/ HOWARD L. FLANDERS ------------------------------------ Its: EVP & CFO ------------------------------------ -10- EXHIBIT A Subsidiaries ------------ NAME - ---- Access Micro Products, Inc. All American Added Value, Inc. All American A.V.E.D., Inc. All American Semiconductor-Northern California, Inc. All American IDT, Inc. All American Semiconductor of Atlanta, Inc. All American Semiconductor of Canada, Inc. All American Semiconductor of Chicago, Inc. All American Semiconductor of Florida, Inc. All American Semiconductor of Huntsville, Inc. All American Semiconductor of Massachusetts, Inc. All American Semiconductor of Michigan, Inc. All American Semiconductor of Minnesota, Inc. All American Semiconductor of New York, Inc. All American Semiconductor of Ohio, Inc. All American Semiconductor of Philadelphia, Inc. All American Semiconductor of Phoenix, Inc. All American Semiconductor of Portland, Inc. All American Semiconductor of Rhode Island, Inc. All American Semiconductor of Rockville, Inc. All American Semiconductor of Salt Lake, Inc. All American Semiconductor of Texas, Inc. All American Semiconductor of Washington, Inc. All American Semiconductor of Wisconsin, Inc. All American Technologies, Inc. All American Transistor of California, Inc. AmeriCapital, LLC Aved Industries, Inc. Palm Electronics Manufacturing Corp. ANNEX I Maximum Loan Amounts -------------------- -------------------------------------------------------------------------- Lender Maximum Loan Amount ------ ------------------- -------------------------------------------------------------------------- Harris Trust and Savings Bank $25,000,000 -------------------------------------------------------------------------- American National Bank and $25,000,000 Trust Company of Chicago -------------------------------------------------------------------------- Fleet Business Credit Corporation $18,750,000 -------------------------------------------------------------------------- Firstar Bank N.A. $18,750,000 -------------------------------------------------------------------------- GMAC Commercial Credit LLC $18,750,000 -------------------------------------------------------------------------- Bank of America, N.A. $18,750,000 -------------------------------------------------------------------------- EX-11 5 ex11-1.txt EXHIBIT 11.1
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES Exhibit 11.1 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (UNAUDITED) Quarters Six Months PERIODS ENDED JUNE 30 2001 2000 2001 2000 - ------------------------------------------------------------------------------------------------------- BASIC EARNINGS PER SHARE: - ------------------------- Net Income (Loss) ....................... $(13,982,000) $ 2,949,000 $(13,311,000) $ 4,159,000 ============ ============ ============ ============ Weighted Average Shares Outstanding ..... 3,856,904 3,813,910 3,856,904 3,807,939 ============ ============ ============ ============ Basic Earnings (Loss) Per Share ......... $ (3.63) $ .77 $ (3.45) $ 1.09 ======= ===== ======= ====== DILUTED EARNINGS PER SHARE: - --------------------------- Net Income (Loss) ....................... $(13,982,000) $ 2,949,000 $(13,311,000) $ 4,159,000 ============ ============ ============ ============ Weighted Average and Dilutive Shares: Weighted average shares outstanding ... 3,856,904 3,813,910 3,856,904 3,807,939 Dilutive shares ....................... -- 363,962 -- 274,201 ------------ ------------ ------------ ------------ 3,856,904 4,177,872 3,856,904 4,082,140 ============ ============ ============ ============ Diluted Earnings (Loss) Per Share ....... $ (3.63) $ .71 $ (3.45) $ 1.02 ======= ===== ======= ======
-----END PRIVACY-ENHANCED MESSAGE-----