SOURCE: Aldila


November 12, 2009 16:15 ET

Aldila Reports Financial Results for Third Quarter 2009

POWAY, CA--(Marketwire - November 12, 2009) - ALDILA, INC. (NASDAQ: ALDA) announced today net sales of $10.7 million and a net loss of $571,000 ($0.11 loss per share) for the three months ended September 30, 2009. Included in the loss was an income tax charge of $744,000 ($0.14 per share) related to the shutdown of the Company's facility in Mexico. The income tax is on the repatriation of earnings from Mexico, which the Company did not previously pay income tax on in the United States. In the comparable 2008 third quarter, the Company had net sales of $11.8 million and a net loss of $1.1 million ($0.21 loss per share). For the nine months ended September 30, 2009, net sales were $35.0 million and a net loss of $1.2 million ($0.24 loss per share) as compared to net sales of $42.1 million and a net loss of $1.2 million ($0.22 loss per share) for the nine month period ended September 30, 2008. As noted above, included in the 2009 period is an income tax charge of $744,000 ($0.14 per share). Important in these challenging economic times, our cash position remains strong at the end of the quarter due to positive cash flow of $4.5 million generated from operations through the nine months ended September 30, 2009. We have remained focused on controlling costs during this time, with our SG&A down 24% for the nine months ended September 30, 2009, compared to the comparable period in 2008.

"The weak retail environment for discretionary consumer products continued to impact our sales and unit volumes during the quarter. We have announced the closing of our Mexico factory and expect to have the majority of the costs associated with the closing expensed this year. We have had 19 years of successful operation in Mexico; however, the timing is right for us to move all of our shaft production to Asia. Our China and Vietnam factories are fully capable to handle all of our shaft models and provide adequate capacity to cover our foreseeable needs," said Mr. Peter R. Mathewson, Chairman of the Board and CEO.

"Our golf sales declined by 13% in the third quarter of 2009 versus the third quarter of 2008. Our average sales price of our golf shafts increased by 1% on a 15% decrease in unit sales in the third quarter of 2009 versus the third quarter of 2008. Although we experienced a decrease in units during the quarter, our mix of shafts sold improved during the third quarter of 2009 versus the third quarter of 2008. The mix change coupled with increased manufacturing efficiencies and lower manufacturing costs were factors that drove our increases in gross profit and gross margin during the third quarter ended 2009 versus the third quarter of 2008. Our backlog as of September 30, 2009 was $10.1 million, which represents a 47% increase over our second quarter of 2009 backlog and a 4% increase versus the third quarter of 2008 backlog," said Mr. Mathewson.

"Although 2009 has been a difficult year, it has been one of the best years ever for Aldila on the professional tours. Players using Aldila shafts in their drivers won over $38 million dollars on the PGA Tour, to date. Aldila won the Grand Slam of Shafts by winning the wood and hybrid shaft count at every major championship. In addition, Aldila was also the most popular wood and hybrid shaft at every FedEx Cup Playoff event. Aldila also had more total wood shafts in play, according to the Darrell Survey Company, than any other graphite shaft manufacturer and nearly twice as many hybrid shafts in play than any other graphite shaft manufacturer. Players using Aldila shafts won 13 events on the PGA Tour through the Turning Stone Resort Championship, which started play on October 9th. On the Nationwide Tour, Aldila again was the leading manufacturer of wood and hybrid shafts with more total shafts in play than any other graphite shaft manufacturer. In hybrids, Aldila again had nearly twice as many shafts in play than any other graphite shaft competitor. Players using Aldila shafts won 15 events on the Nationwide Tour in 2009; more than half of all the events this year on the Nationwide Tour. In addition to Tour success, Aldila was the shaft of choice at the PGA Club Professional National Championship. Leading amateurs also preferred Aldila, as the majority of players at the United States Amateur Championship played Aldila high performance shafts. Our NV®, VS Proto™ and DVS® shafts continue to be very popular on Tour as well as our latest offering, VooDoo®, which continues to be among the top shafts in play each week. The new Aldila RIP scheduled to be released in 2010, is receiving very positive reviews through preliminary trials on Tour, to date, with very strong favorable feedback," Mr. Mathewson said.

"After successful testing on Tour, we have added the new NV VooDoo® to our 2010 product line. The NV VooDoo® has the same flex profile as the original NV® shaft with our patent-pending S-core Technology for even better performance while still maintaining the precise feel that made the NV® so successful. In addition, we have also begun shipping our En Fuego Series of shafts to major manufacturers and distributors. The En Fuego Series is a collection of 3 unique shaft designs all with a higher center of gravity to work best with modern club head designs. Each shaft features a unique flex profile to optimize launch and spin. All shafts in the En Fuego Series also incorporate our Micro Laminate Technology® for maximum performance and improved feel," said Mr. Mathewson.

"Our Composite Materials business began to show signs of recovery as new accounts have been added, which drove an increase in sales of 22% versus the third quarter of 2008 and an increase of 8% from the second quarter of 2009. We are involved with numerous qualification efforts in non-recreational markets and expect to see continuing improvement in our sales as these efforts result in new business in the future quarters," Mr. Mathewson said.

Aldila will host a conference call at 5 P.M. Eastern Time, on Thursday, November 12, 2009, with Peter R. Mathewson, Chairman & CEO, Robert J. Cierzan, Senior Vice President, Composite Materials and Scott M. Bier, Vice President, Chief Financial Officer, to review Aldila's 2009 third quarter financial results. For telephone access to the conference call dial 1-888-221-3894 or 1-913-312-1477 for international calls and request connection to the Aldila conference call, Participant Passcode: 3500714. A live webcast of the conference call can be accessed on the Aldila website at An archive of the webcast will be available through our website for 90 days following the conference call.

This press release contains forward-looking statements based on our expectations as of the date of this press release. These statements necessarily reflect assumptions that we make in evaluating our expectations as to the future. Forward-looking statements are necessarily subject to risks and uncertainties. Our actual future performance and results could differ from that contained in or suggested by these forward-looking statements as a result of a variety of factors. Our filings with the Securities and Exchange Commission present a detailed discussion of the principal risks and uncertainties related to our future operations, in particular our Annual Report on Form 10-K for the year ended December 31, 2008, under "Business Risks" in Part I, Item 1, and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Part I, Item 7 of the Form 10-K, and reports on Form 10-Q and Form 8-K, all of which can be obtained at

The forward-looking statements in this press release are particularly subject to the risks that:

--  consumer discretionary spending will continue to be impacted by the
    world recession, which could have a material impact on our business;
--  our product offerings, including the NV®, VS Proto™, DVS®,
    VooDoo® shaft lines and product offerings outside the golf industry, will
    not achieve or maintain success with consumers or customers;
--  we will not maintain or increase our market share at our principal
--  demand for clubs manufactured by our principal customers will decline,
    thereby affecting their demand for our shafts;
--  demand for composite materials by our principal customers will
--  the market for graphite shafts will continue to be extremely
    competitive, affecting selling prices and profitability;
--  our international operations will be adversely affected by political
    instability, currency fluctuations, export/import regulations or other
    risks typical of multi-national operations, particularly those in less
    developed countries;
--  the Company will not be able to acquire adequate supplies of carbon
    fiber at reasonable market prices;
--  acts of terrorism, natural disasters, or disease pandemics interfere
    with our manufacturing operations or our ability to ship our finished

For additional information about Aldila, Inc., please go to the Company's website at

                      ALDILA, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                    (In thousands, except share data)

                                                September 30, December 31,
                                                    2009          2008
                                                ------------  ------------
ASSETS                                          (Unaudited)
  Cash and cash equivalents                     $      7,218  $      6,157
  Accounts receivable                                  4,421         6,407
  Income taxes receivable                              1,496         2,272
  Inventories                                         10,367        11,583
  Deferred tax assets                                    839           809
  Prepaid expenses and other current assets              531           484
                                                ------------  ------------
     Total current assets                             24,872        27,712

PROPERTY, PLANT AND EQUIPMENT                         12,030        12,789

DEFERRED TAXES                                         1,378         1,187

OTHER NON-CURRENT ASSETS                                 232           244
                                                ------------  ------------
TOTAL ASSETS                                    $     38,512  $     41,932
                                                ============  ============

  Accounts payable                              $      3,963  $      3,420
  Accrued expenses                                     2,209         2,307
  Short term debt                                      3,000         5,000
  Other current liability                                160           117
                                                ------------  ------------
     Total current liabilities                         9,332        10,844
  Deferred rent                                          118           153
  Long term debt                                       2,417         3,167
  Other long-term liabilities                          1,339         1,508
                                                ------------  ------------
     Total liabilities                                13,206        15,672
                                                ------------  ------------

  Preferred stock, $.01 par value; authorized
   5,000,000 shares; no shares issued                      -             -
  Common stock, $.01 par value; authorized
   30,000,000 shares; issued and outstanding
   5,202,156 shares as of September 30, 2009
   and 5,174,183 shares as of December 31, 2008           52            52
  Additional paid-in capital                          44,511        44,121
  Accumulated deficit                                (19,257)      (17,913)
                                                ------------  ------------
     Total stockholders' equity                       25,306        26,260
                                                ------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $     38,512  $     41,932
                                                ============  ============

                      ALDILA, INC. AND SUBSIDIARIES
                  (In thousands, except per share data)

                                    Three months ended  Nine months ended
                                      September 30,       September 30,
                                    ------------------  ------------------
                                      2009      2008      2009      2008
                                    --------  --------  --------  --------

NET SALES                           $ 10,671  $ 11,764  $ 35,048  $ 42,071
COST OF SALES                          8,153    10,695    28,285    33,826
                                    --------  --------  --------  --------
  Gross profit                         2,518     1,069     6,763     8,245
                                    --------  --------  --------  --------

SELLING, GENERAL AND ADMINISTRATIVE    2,367     2,841     7,755    10,266
PLANT CONSOLIDATION                      212         -       212         -
                                    --------  --------  --------  --------
  Operating loss                         (61)   (1,772)   (1,204)   (2,021)
                                    --------  --------  --------  --------

  Interest income                          3        27        12       289
  Interest expense                       (46)      (71)     (148)     (201)
  Other, net                               4        79       (76)      137
                                    --------  --------  --------  --------

LOSS BEFORE INCOME TAXES                (100)   (1,737)   (1,416)   (1,796)
PROVISION (BENEFIT) INCOME TAXES         471      (643)     (170)     (637)
                                    --------  --------  --------  --------

NET LOSS                            $   (571) $ (1,094) $ (1,246) $ (1,159)
                                    ========  ========  ========  ========

NET LOSS PER COMMON SHARE           $  (0.11) $  (0.21) $  (0.24) $  (0.22)
                                    ========  ========  ========  ========

 ASSUMING DILUTION                  $  (0.11) $  (0.21) $  (0.24) $  (0.22)
                                    ========  ========  ========  ========

 SHARES OUTSTANDING                   5,186     5,164     5,178     5,158
                                    ========  ========  ========  ========

 AND COMMON EQUIVALENT SHARES          5,186     5,164     5,178     5,158
                                    ========  ========  ========  ========

                      ALDILA, INC. AND SUBSIDIARIES
                              (In thousands)

                                                        Nine months ended
                                                          September 30,
                                                          2009      2008
                                                        --------  --------

   Net loss                                             $ (1,246) $ (1,159)
   Depreciation and amortization                           1,340     1,392
   Stock-based compensation                                  292       123
   Loss on disposal of fixed assets                          102        10
   Changes in working capital items, net                   3,994    (2,545)
                                                        --------  --------
     Net cash provided by (used for) operating
      activities                                           4,482    (2,179)
                                                        --------  --------

   Purchases of property, plant and equipment               (707)   (1,246)
   Proceeds from sales of property, plant and equipment       36        17
                                                        --------  --------
     Net cash used for investing activities                 (671)   (1,229)
                                                        --------  --------

   Borrowings against term loan                                -     5,000
   Payments for term loan                                   (750)     (667)
   Borrowings against line of credit                       4,800     7,000
   Payments for line of credit                            (6,800)   (3,000)
   Proceeds from issuance of common stock                      -        18
   Dividend payments                                           -   (27,323)
                                                        --------  --------
     Net cash used for financing activities               (2,750)  (18,972)
                                                        --------  --------


                                                        --------  --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                $  7,218  $  7,149
                                                        ========  ========

Contact Information

  • Investor/Media Contacts:
    Scott M. Bier
    Vice President, CFO

    Sylvia J. Castle
    Investor Relations
    Aldila, Inc.
    (858) 513-1801