Exhibit 99
ALL AMERICAN SEMICONDUCTOR REPORTS THIRD QUARTER RESULTS
1% Year Over Year Quarterly Sales Increase and
12% Year Over Year Sales Increase For First Nine Months
Miami, FL - November 14, 2006 -- All American Semiconductor, Inc.
(NASDAQ-GM:SEMI), a leading distributor of electronic components, today
announced its results for the third quarter of 2006.
Net sales for the quarter ended September 30, 2006 were $114.8 million, up from
net sales of $113.3 million for the same period of 2005. Income from operations
was $994,000 for the third quarter of 2006, compared to $1.7 million for the
third quarter of last year The Company recorded a net loss for the third quarter
of 2006 in the amount of $666,000 (or $(.17) per share (diluted)), compared to
net income of $209,000 (or $.05 per share (diluted)) for the third quarter of
2005.
For the first nine months of 2006, net sales were $357.1 million, compared to
net sales of $318.8 million for the first nine months of 2005. Income from
operations was $1.4 million for the first nine months of 2006, compared to $4.4
million for the same period of 2005. For the first nine months of 2006 the
Company recorded a net loss of $2.6 million (or $(.66) per share (diluted))
compared to net income of $578,000 (or $.14 per share (diluted)) for the 2005
period.
Bruce M. Goldberg, President and Chief Executive Officer of All American,
stated, "While our sales for the third quarter of 2006 were slightly ahead of
the same quarter of 2005, we experienced a 7.4% sequential quarterly decline in
revenue from sales for the second quarter of 2006 which was the Company's
highest quarterly sales level since the first quarter of 2001. The sequential
decline in revenue, an increase in interest expense and continuing issues
relating to the implementation of our new enterprise resource planning (ERP)
system, all combined to have a negative impact on our profitability in the third
quarter of 2006.
"We believe that industry growth began to slow slightly in the third quarter of
2006 and will remain soft through the end of 2006 and possibly into the
beginning of 2007. Our backlog of customer orders, which was $69 million at
December 31, 2004, had increased significantly to $89 million by December 31,
2005 and to $106 million at June 30, 2006. As of October 31, 2006, our backlog
decreased to $93 million. In an effort to return to profitability by bringing
our inventory and our overhead in line with the now lower level of sales, the
Company has recently undertaken measures to reduce inventory and drive down its
overall SG&A.
"While it continues to have a material adverse impact on our operations and our
results, we are making progress on improving the performance of the ERP system
which was placed into service in February of 2006. Much of the expenses incurred
in connection with the new ERP system during the first nine months of 2006 are
non-recurring in nature but are expected to continue for the next few periods.
We also incurred recurring expenses for maintenance and further development
expenses of the new system in the first nine months of 2006. We believe that
notwithstanding the issues associated with the implementation of the new ERP
system, the Company should obtain the expected benefits anticipated at the onset
of this project, including improved efficiencies and productivity, enhanced
asset management, improved quality control capabilities and expanded customer
service capabilities.
"Also having a significant impact on the results for the first nine months of
2006 is a non-recurring accrual for severance pay and certain bad debt
adjustments and write-offs."
All American is now recognized as the nation's 4th largest distributor of
semiconductors, the 8th largest electronic components distributor overall in the
U.S. and the 10th largest global distributor of electronic components. The
Company has offices in 36 strategic locations throughout North America, as well
as operations in both Asia and Europe.
This press release contains statements that are forward-looking within the
meaning of Section 27A of the Securities Act of 1993, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. When used in this press release, the
words "expected," "intends, "may," "will," "shall," and similar expressions, to
the extent used, are intended to identify the forward-looking statements. In
addition, to the extent that this press release discusses future performance,
expectations, beliefs or intentions about our sales, gross profit margins,
markets, future operating results or investments in the growth of our business
or otherwise makes statements about our new ERP system and anticipated future
expenses and future impact on operations related to such ERP system, reductions
of our inventory and overhead in an effort to return to profitability, the
current or future market or industry conditions or trends, such statements are
forward-looking statements. All forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results, performance
or achievements to differ materially from the statements made. Factors that
could adversely affect the Company's future results, performance or achievements
include, without limitation: the failure of the new ERP system to improve or to
be fully and successfully implemented and operational as expected, as well as
the ultimate total cost of installing and implementing the ERP system; weakening
industry and market conditions more than we expect; a tightening by customers of
their inventory levels; a further slowdown in sales or that slowdown being
greater than we expect; the continuance of a trend for electronics manufacturing
to move offshore; the level of effectiveness of the Company's business and
marketing strategies, including those outside North America and particularly in
Asia; the level and extent of effectiveness of certain cost cutting measures the
Company has recently commenced and anticipates will continue to undertake and
the impact of those cost cutting measures on the ability of the Company to grow
its sales and/or develop the Europe and Asia markets; insufficient funds
generated or available from operations, from the Company's credit facility
because of borrowing base, financial covenant or other limitations or otherwise
and from other sources (debt and/or equity) to support the Company's operations
or the inability of the Company to obtain additional financing at all when
needed and/or on terms acceptable to the Company; an increase in interest rates,
including as a result of further increases in pricing levels under its credit
facility and/or interest rate increases by the Federal Reserve Board, and/or an
increase in the Company's average outstanding borrowings; failure to satisfy
financial and/or other covenants required by the Company's credit facility;
failure to obtain necessary amendments to or even possibly restructure the terms
of Company's credit facility as a result of defaults or potential defaults
thereunder or for other reasons; a reduction in the level of demand for products
of its customers including the level of growth of some of the new technologies
supported by the Company; deterioration in the relationships with or
availability of terms of credit from existing suppliers, particularly one of our
largest suppliers; failure to improve or decreases in gross profit margins,
including the adverse impact on margins resulting from the implementation of the
new ERP system, the Company being required to have aggressive pricing programs,
an increasing number of low-margin, large volume transactions, inventory
oversupply conditions and/or increases in the costs of goods; problems with
telecommunication, computer and information systems; the inability of the
Company to expand its product offerings or obtain product during periods of
allocation; the impact from changes in accounting rules including the new
accounting rules on stock-based compensation; adverse currency fluctuations; the
adverse impact of terrorism or the threat of terrorism on the economy; and the
other uncertainties, risks and factors including those described in the
Company's reports on Forms 10-K, Forms 10-Q, Forms 8-K and other press releases.
These risks and uncertainties are beyond the ability of the Company to control.
In many cases, the Company cannot predict the risks and uncertainties that could
cause actual results to differ materially from those indicated by the
forward-looking statements. The Company undertakes no obligation to update
publicly or revise any forward-looking statements, business risks and/or
uncertainties.
(see accompanying table)
ALL AMERICAN SEMICONDUCTOR, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands
except per share amounts)
Quarters Nine Months
Periods Ended September 30 2006 2005 2006 2005
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Net Sales $ 114,785 $ 113,249 $ 357,096 $ 318,772
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Income from Operations $ 994 $ 1,690 $ 1,354 $ 4,438
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Net Income (Loss) $ (666) $ 209 $ (2,634) $ 578
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Earnings (Loss) Per Share:
Basic $ (.17) $ .05 $ (.66) $ .15
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Diluted $ (.17) $ .05 $ (.66) $ .14
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Average Shares:
Basic 3,998,899 3,933,457 3,986,384 3,924,232
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Diluted 3,998,899 4,111,642 3,986,384 4,114,099
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CONTACT:
Bruce M. Goldberg, CEO Howard L. Flanders, CFO (305) 621-8282 x1417