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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 2)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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 N.W. 52nd Avenue
Miami, Florida 33014
- ----------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 621-8282
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of March 20, 2001, 4,040,150 shares (including 32,141 held by a wholly-owned
subsidiary of the Registrant) of the common stock of ALL AMERICAN SEMICONDUCTOR,
INC. were outstanding, and the aggregate market value of the common stock held
by non-affiliates was $31,400,000.
Documents incorporated by reference: None
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We have amended the note disclosure "Revenue Recognition", contained in Note 1
of Notes to Consolidated Financial Statements of All American Semiconductor,
Inc. and its subsidiaries (the "Company") to reflect that the Company did
implement in 2000 the provisions of Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements", and that such implementation had no effect
on the Company's financial statements. The Consolidated Financial Statements of
the Company as required by Item 8 of Form 10-K and reflecting the foregoing
amendment are included with this Form 10-K/A (Amendment No. 2).
------------------------
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No. 2 to Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
ALL AMERICAN SEMICONDUCTOR, INC.
(Registrant)
By: /s/ PAUL GOLDBERG
------------------------------------
Paul Goldberg, Chairman of the Board
Dated: June 8, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 2 to Annual Report on Form 10-K has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated on
June 8, 2001.
/s/ PAUL GOLDBERG Chairman of the Board, Director
- ----------------------------
Paul Goldberg
/s/ BRUCE M. GOLDBERG President and Chief Executive Officer, Director
- ---------------------------- (Principal Executive Officer)
Bruce M. Goldberg
/s/ HOWARD L. FLANDERS Executive Vice President and Chief Financial
- ---------------------------- Officer, Director
Howard L. Flanders (Principal Financial and Accounting Officer)
/s/ RICK GORDON Senior Vice President of Sales, Director
- ----------------------------
Rick Gordon
/s/ ROBIN L. CRANDELL Director
- ----------------------------
Robin L. Crandell
/s/ LEWIS B. FREEMAN Director
- ----------------------------
Lewis B. Freeman
/s/ DANIEL M. ROBBIN Director
- ----------------------------
Daniel M. Robbin
/s/ RICHARD E. SIEGEL Director
- ----------------------------
Richard E. Siegel
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The Company's management is responsible for the preparation of the Consolidated
Financial Statements in accordance with generally accepted accounting principles
and for the integrity of all the financial data included in this Form 10-K. In
preparing the Consolidated Financial Statements, management makes informed
judgements and estimates of the expected effects of events and transactions that
are currently being reported.
Management maintains a system of internal controls that is designed to provide
reasonable assurance that assets are safeguarded and that transactions are
executed and recorded in accordance with management's policies for conducting
its business. This system includes policies which require adherence to ethical
business standards and compliance with all laws to which the Company is subject.
The internal controls process is continuously monitored by direct management
review.
The Board of Directors, through its Audit Committee, is responsible for
determining that management fulfils its responsibility with respect to the
Company's Consolidated Financial Statements and the system of internal controls.
The Audit Committee, comprised solely of directors who are not officers or
employees of the Company, meets quarterly with representatives of management and
the Company's independent accountants to review and monitor the financial,
accounting, and auditing procedures of the Company in addition to reviewing the
Company's financial reports. The Company's independent accountants have full and
free access to the Audit Committee.
/s/ BRUCE M. GOLDBERG /s/ HOWARD L. FLANDERS
- ------------------------------- -------------------------------
Bruce M. Goldberg Howard L. Flanders
President, Executive Vice President,
Chief Executive Officer Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
To The Board of Directors
All American Semiconductor, Inc.
Miami, Florida
We have audited the accompanying consolidated balance sheets of All American
Semiconductor, Inc. and subsidiaries as of December 31, 2000 and 1999 and the
related consolidated statements of income, changes in shareholders' equity and
cash flows for the three years in the period ended December 31, 2000. Our audits
also included the financial statement schedule listed in Part IV, Item 14(a) of
this Form 10-K. These financial statements and schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements and schedule are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and schedule. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of All
American Semiconductor, Inc. and subsidiaries at December 31, 2000 and 1999 and
the results of their operations and their cash flows for the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/ LAZAR LEVINE & FELIX LLP
- ------------------------------
LAZAR LEVINE & FELIX LLP
New York, New York
March 2, 2001
F-1
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS December 31 2000 1999
- --------------------------------------------------------------------------------------------
Current assets:
Cash .................................................... $ 335,000 $ 173,000
Accounts receivable, less allowances for doubtful
accounts of $3,283,000 and $1,987,000 ................. 91,812,000 53,202,000
Inventories ............................................. 146,444,000 85,260,000
Other current assets .................................... 3,745,000 4,637,000
------------- -------------
Total current assets .................................. 242,336,000 143,272,000
Property, plant and equipment - net ....................... 4,255,000 4,482,000
Deposits and other assets ................................. 2,687,000 2,741,000
Excess of cost over fair value of net assets acquired - net 950,000 1,006,000
------------- -------------
$ 250,228,000 $ 151,501,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------
Current liabilities:
Current portion of long-term debt ....................... $ 240,000 $ 273,000
Accounts payable and accrued expenses ................... 81,234,000 51,584,000
Income taxes payable .................................... 968,000 --
Other current liabilities ............................... 304,000 198,000
------------- -------------
Total current liabilities ............................. 82,746,000 52,055,000
Long-term debt:
Notes payable ........................................... 120,643,000 64,298,000
Subordinated debt ....................................... 6,043,000 6,089,000
Other long-term debt .................................... 1,198,000 1,207,000
------------- -------------
210,630,000 123,649,000
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Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, none issued ............................... -- --
Common stock, $.01 par value, 40,000,000 shares
authorized, 4,039,620 and 3,973,431 shares issued
and outstanding ....................................... 40,000 40,000
Capital in excess of par value .......................... 26,326,000 25,751,000
Retained earnings ....................................... 14,167,000 2,968,000
Treasury stock, at cost, 183,246 and 174,646 shares ..... (935,000) (907,000)
------------- -------------
39,598,000 27,852,000
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$ 250,228,000 $ 151,501,000
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See notes to consolidated financial statements
F-2
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31 2000 1999 1998
- --------------------------------------------------------------------------------------
NET SALES .......................... $ 522,183,000 $ 329,563,000 $ 250,044,000
Cost of sales ...................... (414,292,000) (265,064,000) (194,599,000)
------------- ------------- -------------
Gross profit ....................... 107,891,000 64,499,000 55,445,000
Selling, general and
administrative expenses .......... (79,893,000) (56,357,000) (46,880,000)
Restructuring and other
nonrecurring expenses ............ -- -- (2,860,000)
------------- ------------- -------------
INCOME FROM OPERATIONS ............. 27,998,000 8,142,000 5,705,000
Interest expense ................... (8,642,000) (4,985,000) (4,313,000)
------------- ------------- -------------
INCOME BEFORE INCOME TAXES ......... 19,356,000 3,157,000 1,392,000
Income tax provision ............... (8,157,000) (1,358,000) (561,000)
------------- ------------- -------------
NET INCOME ......................... $ 11,199,000 $ 1,799,000 $ 831,000
============= ============= =============
EARNINGS PER SHARE:
Basic ............................ $ 2.92 $ .46 $ .21
============= ============= =============
Diluted .......................... $ 2.70 $ .46 $ .21
============= ============= =============
See notes to consolidated financial statements
F-3
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Capital in Total
Common Excess of Retained Treasury Shareholders'
Shares Stock Par Value Earnings Stock Equity
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997... 3,972,828 $ 40,000 $ 25,747,000 $ 338,000 $ (451,000) $ 25,674,000
Exercise of stock options.... 603 -- 4,000 -- -- 4,000
Net income................... -- -- -- 831,000 -- 831,000
------------ ------------ ------------ ------------ ------------ ------------
Balance, December 31, 1998... 3,973,431 40,000 25,751,000 1,169,000 (451,000) 26,509,000
Purchase of treasury shares.. -- -- -- -- (456,000) (456,000)
Net income................... -- -- -- 1,799,000 -- 1,799,000
------------ ------------ ------------ ------------ ------------ ------------
Balance, December 31, 1999... 3,973,431 40,000 25,751,000 2,968,000 (907,000) 27,852,000
Exercise of stock options.... 66,189 -- 394,000 -- -- 394,000
Income tax benefit from
stock options exercised...... -- -- 181,000 -- -- 181,000
Purchase of treasury shares.. -- -- -- -- (28,000) (28,000)
Net income .................. -- -- -- 11,199,000 -- 11,199,000
------------ ------------ ------------ ------------ ------------ ------------
Balance, December 31, 2000... 4,039,620 $ 40,000 $ 26,326,000 $ 14,167,000 $ (935,000) $ 39,598,000
============ ============ ============ ============ ============ ============
See notes to consolidated financial statements
F-4
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31 2000 1999 1998
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ........................................... $ 11,199,000 $ 1,799,000 $ 831,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ...................... 1,354,000 1,230,000 1,236,000
Loss on disposal of assets ......................... 78,000 -- --
Non-cash interest expense .......................... 381,000 294,000 352,000
Changes in assets and liabilities:
Increase in accounts receivable .................. (38,610,000) (15,381,000) (4,924,000)
Increase in inventories .......................... (61,184,000) (16,197,000) (1,154,000)
Decrease (increase) in other current assets ...... 892,000 (2,063,000) (500,000)
Increase in accounts payable and accrued expenses. 29,690,000 10,383,000 2,075,000
Increase (decrease) in other current liabilities.. 1,074,000 (43,000) (317,000)
------------ ------------ ------------
Net cash used for operating activities ......... (55,126,000) (19,978,000) (2,401,000)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment ................ (1,058,000) (582,000) (564,000)
Decrease (increase) in other assets .................. (442,000) 299,000 (944,000)
------------ ------------ ------------
Net cash used for investing activities ......... (1,500,000) (283,000) (1,508,000)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit agreement ........ 56,515,000 20,711,000 4,263,000
Increase in notes payable ............................ -- -- 10,000
Repayments of notes payable .......................... (274,000) (294,000) (339,000)
Purchase of treasury shares .......................... (28,000) (456,000) --
Net proceeds from issuance of equity securities ...... 575,000 -- 4,000
------------ ------------ ------------
Net cash provided by financing activities ...... 56,788,000 19,961,000 3,938,000
------------ ------------ ------------
Increase (decrease) in cash .......................... 162,000 (300,000) 29,000
Cash, beginning of year .............................. 173,000 473,000 444,000
------------ ------------ ------------
Cash, end of year .................................... $ 335,000 $ 173,000 $ 473,000
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid ........................................ $ 7,810,000 $ 4,410,000 $ 4,223,000
============ ============ ============
Income taxes paid .................................... $ 7,369,000 $ 1,399,000 $ 1,756,000
============ ============ ============
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During 1999 the Company entered into a capital lease in the amount of $495,000
for certain programming and telecommunications equipment.
See notes to consolidated financial statements
F-5
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
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. The Company's
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 providers who manufacture products for companies in all
electronics industry segments. The Company also designs and has manufactured
certain board level products including memory modules and flat panel display
driver boards, both of which are sold to original equipment manufacturers.
The Company's financial statements are prepared in accordance with generally
accepted accounting principles ("GAAP"). Those principles considered
particularly significant are detailed below. GAAP requires management to make
estimates and assumptions affecting the reported amounts of assets, liabilities,
revenues and expenses. While actual results may differ from these estimates,
management does not expect the variances, if any, to have a material effect on
the Consolidated Financial Statements.
Basis of Consolidation and Presentation
- ---------------------------------------
The Consolidated Financial Statements of the Company include the accounts of all
subsidiaries, all of which are wholly-owned. All material intercompany balances
and transactions have been eliminated in consolidation. The Company has Canadian
and Mexican subsidiaries which conduct substantially all of their business in
U.S. dollars.
All references to shares of common stock, $.01 par value, stock options,
warrants, exercise prices per share and per share amounts have been restated to
reflect the effect of the Reverse Stock Split (as hereinafter defined). See Note
4 to Notes to Consolidated Financial Statements.
Prior years' financial statements have been reclassified to conform with the
current year's presentation.
Concentration of Credit Risk/Fair Values
- ----------------------------------------
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash and accounts receivable. The Company,
from time to time, maintains cash balances which exceed the federal depository
insurance coverage limit. The Company performs periodic reviews of the relative
credit rating of its bank to lower its risk. The Company believes that
concentration with regards to accounts receivable is limited due to its large
customer base. Fair values of cash, accounts receivable, accounts payable and
long-term debt reflected in the December 31, 2000 and 1999 Consolidated Balance
Sheets approximate carrying value at these dates.
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.
F-6
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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Inventories
- -----------
Inventories are stated at the lower of cost (determined on an average cost
basis) or market.
Fixed Assets
- ------------
Fixed assets are reflected at cost. Depreciation of office furniture and
equipment and computer equipment is provided on straight-line and accelerated
methods over the estimated useful lives of the respective assets. Amortization
of leasehold improvements is provided using the straight-line method over the
term of the related lease or the life of the respective asset, whichever is
shorter. Maintenance and repairs are charged to expense as incurred; major
renewals and betterments are capitalized.
Excess of Cost Over Fair Value of Net Assets Acquired (Goodwill)
- ----------------------------------------------------------------
The excess of cost over the fair value of net assets acquired is being amortized
over periods ranging from 15 years to 40 years using the straight-line method.
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.
Revenue Recognition
- -------------------
The Company recognizes revenues at the point of passage of title, which is
generally at the time of shipment.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Account Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements",
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. Subsequently, SAB Nos. 101A and 101B were
issued delaying the implementation of SAB No. 101 to no later than the fourth
quarter of fiscal years beginning after December 15, 1999. The SAB requires
companies to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation in accordance with Accounting
Principles Board ("APB") Opinion 20, "Accounting Changes". The implementation of
the provisions of SAB No. 101 in 2000 had no effect on the Company's financial
statements.
Income Taxes
- ------------
The Company has elected to file a consolidated federal income tax return with
its subsidiaries. Deferred income taxes are provided on transactions which are
reported in the financial statements in different periods than for income tax
purposes. Deferred tax liabilities and assets are determined based on the
difference between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
difference is expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. See Note 8 to Notes to Consolidated Financial
Statements.
Earnings Per Share
- ------------------
Earnings per common share is computed by dividing net income by the weighted
average, during each period, of the number of common shares outstanding and for
diluted earnings per share also common equivalent shares outstanding.
F-7
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
The following average shares were used for the computation of basic and diluted
earnings per share:
Years Ended December 31 2000 1999 1998
- -------------------------------------------------------------------------------
Basic........................... 3,828,978 3,921,138 3,937,021
Diluted......................... 4,140,579 3,924,166 3,998,802
Statements of Cash Flows
- ------------------------
For purposes of the statements of cash flows, the Company considers all
investments purchased with an original maturity of three months or less to be
cash.
Comprehensive Income
- --------------------
In 1998, the Company adopted Financial Accounting Standards Board Statement No.
130, "Reporting Comprehensive Income", which prescribes standards for reporting
comprehensive income and its components. The Company had no items of other
comprehensive income in any period presented and accordingly is not required to
report comprehensive income.
Segments of an Enterprise and Related Information
- -------------------------------------------------
In 1998, the Company adopted Financial Accounting Standards Board Statement No.
131, "Disclosures about Segments of an Enterprise and Related Information",
which establishes standards for reporting about operating segments. The Company
has determined that no operating segment outside of its core business met the
quantitative thresholds for separate reporting. Accordingly, no separate
information has been reported.
Pensions and Other Postretirement Benefits
- ------------------------------------------
In 1998, the Company adopted Financial Accounting Standards Board Statement No.
132, "Employers' Disclosures about Pensions and Other Postretirement Benefits."
The effect of the adoption of this statement was not material.
Stock Based Compensation
- ------------------------
In 2000, the Company adopted Financial Accounting Standards Board Interpretation
No. 44, "Accounting for Certain Transactions Involving Stock Compensation", an
interpretation of APB No. 25, "Stock Issued to Employees". Interpretation No. 44
clarifies: the application of APB No. 25 for the definition of an employee for
purposes of applying APB No. 25; the criteria for determining whether a plan
qualifies as a noncompensatory plan; the accounting consequence of various
modifications to the terms of previously fixed stock options or awards; and the
accounting for an exchange of stock compensation awards in a business
combination. The effect of the adoption of this interpretation was not material.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
- --------------------------------------
December 31 2000 1999
- -------------------------------------------------------------------------------
Office furniture and equipment ............... $ 3,365,000 $ 4,758,000
Computer equipment ........................... 4,352,000 4,374,000
Leasehold improvements ....................... 2,243,000 2,104,000
------------ ------------
9,960,000 11,236,000
Accumulated depreciation and amortization .... (5,705,000) (6,754,000)
------------ ------------
$ 4,255,000 $ 4,482,000
============ ============
F-8
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 3 - STOCK REPURCHASE PROGRAM
- ---------------------------------
During 1999, the Company's Board of Directors authorized the repurchase of up to
$2 million in purchase price of the Company's common stock. The stock
repurchases may, at the discretion of the Company's management, be made from
time to time at prevailing prices in the open market or through privately
negotiated transactions. The Company's management will base its decision on
market conditions, the price of the common stock and other factors. Any shares
of common stock repurchased will be available for reissuance in connection with
the Employees', Officers', Directors' Stock Option Plan, as previously amended
and restated (the "Option Plan"), or for other corporate purposes. For the years
ended December 31, 2000 and 1999, the Company repurchased 8,600 and 138,586
shares of its common stock at average prices of $3.18 and $3.30 per share,
respectively. The aggregate cost of the repurchased shares is reflected as
treasury stock on the Consolidated Balance Sheets. The Company presently does
not intend to make further stock repurchases at the current market prices.
NOTE 4 - REVERSE STOCK SPLIT
- ----------------------------
On June 1, 1999, the Company's shareholders approved a one-for-five reverse
stock split (the "Reverse Stock Split") of the Company's outstanding shares of
common stock. The Reverse Stock Split became effective for trading in the
Company's new common stock as of June 2, 1999. Immediately following the Reverse
Stock Split, there were 3,973,431 shares of common stock outstanding. The $.01
par value of the common stock remained the same after the Reverse Stock Split.
All references to shares of common stock, stock options, warrants, exercise
prices per share and per share amounts have been restated to reflect the effect
of the Reverse Stock Split.
NOTE 5 - STOCK PURCHASE RIGHTS
- ------------------------------
In June 2000, the Board of Directors of the Company adopted a Common Stock
Purchase Rights Plan (the "Rights Plan") and authorized and approved a dividend
distribution of one right (each a "Right" and collectively the "Rights") for
each outstanding share of common stock of the Company to shareholders of record
at the close of business on June 23, 2000. Each share of common stock of the
Company that is issued after June 23, 2000 will also include one Right.
Each Right initially entitles the registered holder to purchase from the
Company, but only when exercisable under the Rights Plan, one share of common
stock at a price of $95.00 per share, subject to certain future adjustments. The
Rights will be exercisable only if a person or group acquires 15% or more of the
Company's common stock (or 10% of such stock under certain circumstances) or
announces a tender offer the consummation of which would result in ownership by
a person or group of 15% or more of the common stock (or 10% or such stock under
certain circumstances). Upon such occurrence, each Right (other than Rights
owned by such person or group) will entitle the holder to purchase from the
Company the number of shares of the Company's common stock having a market value
equal to twice the exercise price of the Right.
If the Company is acquired in a merger or other business combination
transaction, or sells more than 50% of its assets or earning power, after a
person or group has acquired 15% or more of the Company's outstanding common
stock (or 10% of such stock under certain circumstances), each Right (other than
Rights owned by such person or group) will entitle its holder to purchase, at
the Right's then-current exercise price, a number of the acquiring company's
common shares having a market value of twice such price.
Following the acquisition by a person or group of 15% or more of the Company's
common stock (or 10% of such stock under certain circumstances) and prior to an
acquisition of 50% or more of the common stock, the Board of Directors may
exchange the Rights (other than Rights owned by such person or group) at an
exchange ratio of one share of common stock per Right.
F-9
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
Prior to the acquisition by a person or group of beneficial ownership of 15% or
more of the Company's common stock (or 10% of such stock under certain
circumstances), the Rights are redeemable for $.001 per Right at the option of
the Board of Directors. The Rights will expire on June 8, 2010.
NOTE 6 - RESTRUCTURING AND OTHER NONRECURRING EXPENSES
- ------------------------------------------------------
During 1998, the Company was involved in merger discussions which led to a
letter of intent being signed in June 1998. Throughout 1998 the Company was
actively involved in the evaluation of and preparations for the integration of
operations in connection with the proposed merger. In October 1998, the merger
negotiations were terminated. As a result, the Company recorded a nonrecurring
charge in 1998, which included expansion costs incurred in anticipation of
supporting the proposed combined entity, certain employee-related expenses,
professional fees and other merger-related out of pocket costs, all of which
aggregated $2,860,000.
NOTE 7 - LONG-TERM DEBT
- -----------------------
Line of Credit
- --------------
In September 2000, the Company's agreement with its consortium of banks was
amended whereby the line of credit facility was increased from $100 million to
$150 million and the term was extended to May 3, 2004. The line of credit
facility, which is based on eligible accounts receivable and inventories as
defined in the agreement, currently bears interest, at the Company's option, at
the prime rate plus .25% or LIBOR plus 2.25%. On a quarterly basis, the
applicable interest rate margins for the prime rate and LIBOR options may be
adjusted based upon the Company's debt service coverage ratio for the 12 month
period ending on the last day of the immediately preceding calendar quarter and
the Company's average excess loan availability for the three month period ending
on the last day of the immediately preceding calendar quarter. The applicable
interest rate margin for the prime rate option may adjust between 0% to .5% and
the applicable interest rate margin for the LIBOR option may adjust between 2.0%
to 2.5%. Outstanding borrowings under the credit facility, which are secured by
all of the Company's assets including accounts receivable, inventories and
equipment, amounted to $120,489,000 at December 31, 2000 compared to $63,974,000
at December 31, 1999. Under the credit facility, the Company is required to
comply with certain affirmative and negative covenants as well as to comply with
certain financial ratios. These covenants, among other things, place limitations
and restrictions on the Company's borrowings, investments and transactions with
affiliates and prohibit dividends and stock redemptions. The credit facility
requires the Company to maintain certain minimum levels of tangible net worth
throughout the term of the agreement and a minimum debt service coverage ratio
which is tested on a quarterly basis.
Subordinated Debt
- -----------------
In June 1994, the Company completed a private placement (the "1994 Private
Placement") of 51.5 units, with each unit consisting of a 9% non-convertible
subordinated debenture due 2004 in the principal amount of $100,000 issuable at
par, together with 1,500 common stock purchase warrants exercisable at $15.75
per share. The 51.5 units issued represent debentures aggregating $5,150,000
together with an aggregate of 77,250 warrants. The debentures are payable in
semi-annual installments of interest only commencing December 1, 1994, with the
principal amount maturing in full on June 13, 2004. The Company is not required
to make any mandatory redemptions or sinking fund payments. The debentures are
subordinated to the Company's senior indebtedness including the Company's credit
facility and notes issued to the Company's landlord. The 77,250 warrants were
valued at $2.50 per warrant as of the date of the 1994 Private Placement and,
accordingly, the Company recorded the discount in the aggregate amount of
$193,125 as additional paid-in capital. This discount is being amortized over
the ten-year term of the debentures and approximately $19,000 was expensed in
2000, 1999 and 1998. All of these warrants expired during 1999.
F-10
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
In May 1994, the Company executed a twenty-year promissory note in the amount of
$865,000 in favor of the Company's landlord to finance substantially all of the
tenant improvements necessary for the Company's Miami facility. This $865,000
note has a repayment schedule with varying monthly payments of principal after
the second year. At the same time, the Company entered into another promissory
note with the Company's landlord for $150,000 to finance certain personal
property for the facility. This $150,000 note is payable interest only for six
months and thereafter in 60 equal self-amortizing monthly payments of principal
and interest. These notes, which are subordinate to the Company's credit
facility, bear interest at 8% per annum and are payable monthly. Certain
additional improvements to the Company's Miami corporate facility aggregating
approximately $90,300 were financed as of May 1, 1995 by the landlord. This
$90,300 obligation is evidenced by a promissory note payable in 240 consecutive,
equal self-amortizing monthly installments of principal and interest. This note,
which is also subordinate to the Company's credit facility, accrues interest at
a fixed rate of 8% per annum. In October 1996, the Company executed a promissory
note in the amount of $161,500 with the Company's landlord to finance certain
additional improvements to the Company's Miami corporate facility. This note,
which is also subordinate to the credit facility, is payable monthly with
interest at 8.5% per annum and matures in October 2011.
Long-term debt of the Company as of December 31, 2000, other than the Company's
credit facility and obligations under capital leases, matures as follows:
2001.......................................................... $ 73,000
2002.......................................................... 86,000
2003.......................................................... 68,000
2004.......................................................... 59,000
2005.......................................................... 64,000
Thereafter.................................................... 6,968,000
-------------
$ 7,318,000
=============
Obligations under Capital Leases
- --------------------------------
The Company is the lessee of programming and telecommunications equipment under
a capital lease expiring in 2002. The assets, aggregating $495,000, and
liability under this capital lease are recorded at the lower of the present
value of the minimum lease payments or the fair value of the assets. The assets
are depreciated over their estimated productive lives. As of December 31, 2000,
accumulated depreciation of these assets aggregated approximately $106,000. The
depreciation of assets under this capital lease is included in depreciation
expense.
Minimum future lease payments under this capital lease as of December 31, 2000
and for each of the remaining years and in the aggregate are approximately as
follows:
2001......................................................... $ 188,000
2002......................................................... 156,000
-------------
Total minimum lease payments................................. 344,000
Less amount representing interest............................ (27,000)
-------------
Total obligations under capital leases....................... 317,000
Current portion.............................................. (167,000)
-------------
$ 150,000
=============
The interest rate on this capital lease is 8.5% per annum and is imputed based
on the lower of the Company's incremental borrowing rate at the inception of the
lease or the lessor's implicit rate of return. This capital lease provides for a
purchase option.
F-11
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 8 - INCOME TAXES
- ---------------------
The tax effects of the temporary differences that give rise to the deferred tax
assets and liabilities as of December 31, 2000 and 1999 are as follows:
Deferred tax assets: 2000 1999
---------- ----------
Accounts receivable .................. $1,332,000 $ 738,000
Inventory ............................ 638,000 387,000
Accrued expenses ..................... 887,000 574,000
Postretirement benefits .............. 600,000 541,000
Other ................................ 486,000 546,000
---------- ----------
3,943,000 2,786,000
Deferred tax liabilities:
Fixed assets ......................... 388,000 368,000
---------- ----------
Net deferred tax asset ................. $3,555,000 $2,418,000
========== ==========
At December 31, 2000, $2,856,000 of the net deferred tax asset was included in
"Other current assets" and $699,000 was included in "Deposits and other assets"
in the accompanying Consolidated Balance Sheet.
The components of income tax expense are as follows:
Years Ended December 31 2000 1999 1998
- -------------------------------------------------------------------------------
Current
- -------
Federal ............... $ 7,425,000 $ 466,000 $ 1,210,000
State ................. 1,869,000 90,000 210,000
----------- ----------- -----------
9,294,000 556,000 1,420,000
----------- ----------- -----------
Deferred
- --------
Federal ............... (697,000) 698,000 (749,000)
State ................. (440,000) 104,000 (110,000)
----------- ----------- -----------
(1,137,000) 802,000 (859,000)
----------- ----------- -----------
$ 8,157,000 $ 1,358,000 $ 561,000
=========== =========== ===========
A reconciliation of the difference between the expected income tax rate using
the statutory federal tax rate and the Company's effective tax rate is as
follows:
Years Ended December 31 2000 1999 1998
- -----------------------------------------------------------------------------------------
U.S. Federal income tax statutory rate.................... 35.0% 34.0% 34.0%
State income tax, net of federal income tax benefit....... 5.9 3.3 4.2
Goodwill amortization and other - including
non-deductible items.................................... 1.2 5.7 2.1
----- ----- -----
Effective tax rate........................................ 42.1% 43.0% 40.3%
===== ===== =====
The tax benefit associated with the disqualifying disposition of stock acquired
with incentive stock options under the Option Plan reduced taxes payable by
$181,000 as of December 31, 2000 and is reflected as a credit to capital in
excess of par value in the accompanying Consolidated Balance Sheet.
F-12
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 9 - CAPITAL STOCK, OPTIONS AND WARRANTS
- --------------------------------------------
In December 1995, in connection with certain acquisitions, the Company issued an
aggregate of 434,821 shares of common stock, including 32,141 shares, valued at
approximately $391,000, which were issued to the Company's wholly-owned
subsidiary. In addition, in connection with such acquisitions, certain selling
stockholders were granted an aggregate of 10,000 stock options (6,000 stock
options of which have since been canceled) to acquire the Company's common stock
at an exercise price of $11.565 per share exercisable, subject to a six-year
vesting period, through December 29, 2002. In connection with the Company
entering into a settlement agreement with certain of the selling stockholders in
December 1996, an aggregate of 19,000 shares of the Company's common stock was
canceled and certain selling stockholders were granted stock options to purchase
an aggregate of 10,000 shares of the Company's common stock at an exercise price
of $7.50 per share exercisable through December 30, 2001. At December 31, 2000,
5,000 of these options remained unexercised, 2,500 were exercised and 2,500 were
canceled.
In July 1995, the Company issued to a consulting firm a warrant to acquire 9,000
shares of the Company's common stock at an exercise price of $12.50 per share
exercisable through June 30, 2000, and was subsequently extended through
December 31, 2000. The warrant was issued in consideration of such consulting
firm entering into a new one-year consulting agreement with the Company covering
financial public relations/investor relations services. At December 31, 2000,
this warrant was unexercised and expired.
In connection with employment agreements between the Company and each of its
four executive officers entered into in May 1995, an aggregate of 200,000 stock
options were granted on June 8, 1995 to such four executive officers pursuant to
the Option Plan. These options have an exercise price of $9.375 per share and
are exercisable through June 7, 2005. As a result of the Company reaching
certain earnings per share levels during 2000, these options became fully
vested. At December 31, 2000 these options remained unexercised.
In connection with the public offering in 1995, the Company issued to the
underwriter common stock purchase warrants covering an aggregate of 104,650
shares of common stock (including warrants issued in connection with the
underwriter's exercise of the over-allotment option). These warrants were
exercisable at a price of $13.125 per share for a period of four years
commencing June 8, 1996. During 2000, all of these warrants were redeemed by the
Company for $13,000.
In June 2000, the Company established the 2000 Nonemployee Director Stock Option
Plan. The 2000 Nonemployee Director Stock Option Plan provides for awards of
options to purchase shares of common stock, $.01 par value per share, of the
Company to nonemployee directors of the Company. An aggregate of 75,000 shares
of the Company's common stock has been reserved for issuance under the 2000
Nonemployee Director Stock Option Plan. During 2000, the Company granted an
aggregate of 4,500 stock options to 3 individuals pursuant to the 2000
Nonemployee Director Stock Option Plan. These options have an exercise price of
$10.53 per share (based on fair market value at date of grant) and vest over a
two-year period and are exercisable over a ten-year period.
The Company has reserved 900,000 shares of common stock for issuance under the
Employees', Officers', Directors' Stock Option Plan, as previously amended and
restated.
F-13
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
A summary of options granted under the option plans and related information for
the years ended December 31, 1998, 1999 and 2000 follows:
Weighted Average
Options Exercise Price
-------- ----------------
Outstanding, December 31, 1997 545,664 $ 7.30
Granted 39,000 7.20
Exercised (603) 5.60
Canceled (17,750) 6.95
--------
Outstanding, December 31, 1998 566,311 7.30
Weighted average fair value of options granted during 1998 1.35
Granted 204,400 3.52
Exercised - --
Canceled (55,863) 6.61
--------
Outstanding, December 31, 1999 714,848 6.29
Weighted average fair value of options granted during 1999 1.15
Granted 137,000 13.00
Exercised (66,189) 5.96
Canceled (35,625) 5.77
--------
Outstanding, December 31, 2000 750,034 7.57
========
Weighted average fair value of options granted during 2000 4.36
Options exercisable:
December 31, 1998 166,416 6.10
December 31, 1999 184,416 5.96
December 31, 2000 386,939 7.51
Exercise prices for options outstanding as of December 31, 2000 ranged from
$3.27 to $16.71. The weighted-average remaining contractual life of these
options is approximately 5 years. Outstanding options at December 31, 2000 were
held by 168 individuals.
The Company applies APB 25 and related Interpretations in accounting for the
option plans. Accordingly, no compensation cost has been recognized for the
option plans. Had compensation cost for the option plans been determined using
the fair value based method, as defined in Financial Accounting Standards Board
Statement No. 123, "Accounting for Stock-Based Compensation," the Company's net
earnings and earnings per share would have been adjusted to the pro forma
amounts indicated below:
Years Ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
Net earnings:
As reported $11,199,000 $ 1,799,000 $ 831,000
Pro forma 10,853,000 1,665,000 800,000
Basic earnings per share:
As reported $2.92 $.46 $.21
Pro forma 2.83 .42 .20
Diluted earnings per share:
As reported $2.70 $.46 $.21
Pro forma 2.62 .42 .20
F-14
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
The fair value of each option grant was estimated on the date of the grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions for 2000, 1999 and 1998, respectively: expected volatility of 47%,
40% and 60%; risk-free interest rate of 6.3%, 5.9% and 5.7%; and expected lives
of 5 to 8 years.
The effects of applying SFAS 123 in the above pro forma disclosures are not
indicative of future amounts as they do not include the effects of awards
granted prior to 1995. Additionally, future amounts are likely to be affected by
the number of grants awarded since additional awards are generally expected to
be made at varying amounts.
NOTE 10 - COMMITMENTS/RELATED PARTY TRANSACTIONS
- ------------------------------------------------
In May 1994, the Company entered into a new lease with its then existing
landlord to lease a 110,800 square foot facility for its corporate headquarters
and Miami distribution center. The lease has a term expiring in 2014 (subject to
the Company's right to terminate at any time after the fifth year of the term
upon twenty-four months prior written notice and the payment of all outstanding
debt owed to the landlord). The lease gives the Company three six-year options
to renew at the fair market value rental rates. The lease is currently in its
seventh year and provides for annual fixed rental payments totaling
approximately $307,800 in year seven; and in each year thereafter during the
term, the rent shall increase once per year in an amount equal to the annual
percentage increase in the consumer price index not to exceed 4% in any one
year.
The Company also leases approximately 20,000 square feet of space for its west
coast distribution and semiconductor programming center located in Fremont,
California (near San Jose). In Denver, Colorado the Company leases a 7,600
square foot facility which is dedicated to certain value-added services and a
regional distribution center.
In Tustin, California the Company leases a 13,900 square foot facility which
presently contains all operations for the separate divisions of Aved Display
Technologies and Aved Memory Products. In December 2000, the Company leased
26,700 square feet of space in Irvine, California which will house the
operations of the Company's newly created Integrated Display Technologies
division. The Company also intends to relocate to the Irvine location the
operations of Aved Display Technologies when construction of the facility is
completed. This will permit the expansion of the operations of Aved Memory
Products which will then occupy all of the existing facility in Tustin.
During 1998, the Company entered into a new lease for approximately 20,000
square feet of space in San Jose, California to house its expanded west coast
corporate offices and the headquarters of the Company's sales and marketing
functions, as well as its northern California sales operation. Approximately
8,000 square feet of the space is being used for corporate offices including the
office of the President and Chief Executive Officer of the Company and 8,000
square feet of the space is being utilized for the sales operation. The
remaining area of approximately 4,000 square feet is presently being sublet.
The Company leases space for its other sales offices, which range in size from
approximately 1,000 square feet to 8,000 square feet. The leases for these
offices expire at various dates and include various escalation clauses and
renewal options.
F-15
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
Approximate minimum future lease payments required under operating leases for
office leases as well as equipment leases that have initial or remaining
noncancelable lease terms in excess of one year as of December 31, 2000, are as
follows:
YEAR ENDING DECEMBER 31
- -----------------------
2001.......................................................... $3,700,000
2002.......................................................... 3,000,000
2003.......................................................... 2,600,000
2004.......................................................... 1,700,000
2005.......................................................... 1,300,000
Thereafter.................................................... 5,300,000
Total rent expense for office leases, including real estate taxes and net of
sublease income, amounted to approximately $2,703,000, $2,451,000, and
$2,165,000 for the years ended December 31, 2000, 1999 and 1998, respectively.
In 1998, the Board of Directors approved a loan to the President and Chief
Executive Officer of the Company in the amount of $125,000 in connection with
his relocation to Silicon Valley. This loan, which was evidenced by a promissory
note and bore interest at 5% per annum, was forgiven effective December 31,
2000.
Effective January 1, 1988, the Company established a deferred compensation plan
(the "1988 Deferred Compensation Plan") for executive officers and key employees
of the Company. The employees eligible to participate in the 1988 Deferred
Compensation Plan (the "Participants") are chosen at the sole discretion of the
Board of Directors upon a recommendation from the Board of Directors'
Compensation Committee. Pursuant to the 1988 Deferred Compensation Plan,
commencing on a Participant's retirement date, he or she will receive an annuity
for ten years. The amount of the annuity shall be computed at 30% of the
Participant's Salary, as defined. Any Participant with less than ten years of
service to the Company as of his or her retirement date will only receive a pro
rata portion of the annuity. Retirement benefits paid under the 1988 Deferred
Compensation Plan will be distributed monthly. The Company paid benefits under
this plan of approximately $15,600 during each of 2000, 1999 and 1998, none of
which was paid to any executive officer. The maximum benefit payable to a
Participant (including each of the executive officers) under the 1988 Deferred
Compensation Plan is presently $30,000 per annum. At December 31, 2000, the cash
surrender values of insurance policies owned by the Company under the 1988
Deferred Compensation Plan, which provide for the accrued deferred compensation
benefits, aggregated approximately $170,000.
During 1996, the Company established a second deferred compensation plan (the
"Salary Continuation Plan") for executives of the Company. The executives
eligible to participate in the Salary Continuation Plan are chosen at the sole
discretion of the Board of Directors upon a recommendation from the Board of
Directors' Compensation Committee. The Company may make contributions each year
in its sole discretion and is under no obligation to make a contribution in any
given year. For 2000, 1999, and 1998 the Company committed to contribute
$235,000, $115,000, and $192,000 respectively, under this plan. Participants in
the plan will vest in their plan benefits over a ten-year period. If the
participant's employment is terminated due to death, disability or due to a
change in control of management, they will vest 100% in all benefits under the
plan. Retirement benefits will be paid, as selected by the participant, based on
the sum of the net contributions made and the net investment activity.
During 2000, employment agreements with two of the Company's executive officers
were amended whereby the term, among other things, was extended through December
31, 2005. In addition, during 2000 the Company entered into new agreements that
continue until December 31, 2003 with two other executive officers on similar
terms as were contained in their previous employment agreements with the
F-16
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
Company. At December 31, 2000, in addition to incentive compensation, these
agreements provide for aggregate base salary of approximately $5,366,000 over
the remaining term of the agreements.
In connection with an employment agreement with an executive officer an unfunded
postretirement benefit obligation of $1,171,000 is included in the Consolidated
Balance Sheets at December 31, 2000 and 1999.
The Company maintains a 401(k) plan (the "401(k) Plan"), which is intended to
qualify under Section 401(k) of the Internal Revenue Code. All full-time
employees of the Company over the age of 21 are eligible to participate in the
401(k) Plan after completing 90 days of employment. Each eligible employee may
elect to contribute to the 401(k) Plan, through payroll deductions, up to 15% of
his or her salary, limited to $10,500 in 2000. The Company's 401(k) Plan
presently provides for standard matching contributions by the Company in the
amount of 25% on the first 6% contributed of each participating employee's
salary. The Company expensed $691,000, $599,000, and $521,000 for matching
contributions for the years ended December 31, 2000, 1999 and 1998,
respectively.
NOTE 11 - CONTINGENCIES
- -----------------------
From time to time the Company may be named as a defendant in suits for product
defects, breach of warranty, breach of implied warranty of merchantability,
patent infringement or other actions relating to products which it distributes
which are manufactured by others. In those cases, the Company expects that the
manufacturer of such products will indemnify the Company, as well as defend such
actions on the Company's behalf although there is no guarantee that the
manufacturers will do so. In addition, the Company offers a warranty with
respect to products manufactured or assembled for Aved Display Technologies and
Aved Memory Products for a period of one year against defects in workmanship and
materials under normal use and service and in their original, unmodified
condition.
NOTE 12 - ECONOMIC DEPENDENCY
- -----------------------------
For each of the years ended December 31, 2000, 1999 and 1998, purchases from one
supplier were in excess of 10% of the Company's total annual purchases and
aggregated approximately $104,420,000, $62,950,000 and $39,893,000,
respectively. The net outstanding accounts payable to this supplier at December
31, 2000, 1999 and 1998 amounted to approximately $11,286,000, $7,545,000 and
$5,832,000, respectively.
F-17
ALL AMERICAN SEMICONDUCTOR, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Additions Additions
Balance at Charged to Charged to
Beginning of Costs and Other Balance at End
Description Period Expenses Accounts Deductions of Period
- ---------------------- ------------- ------------ ----------- ----------- ---------------
Allowance for Doubtful
Accounts
2000 $ 1,987,000 $ 1,899,000 $ -- $ (603,000) $ 3,283,000
1999 $ 1,412,000 $ 824,000 $ -- $ (249,000) $ 1,987,000
1998 $ 1,166,000 $ 791,000 $ -- $ (545,000) $ 1,412,000
S-1