SOURCE: Aldila

Aldila

August 06, 2009 16:15 ET

Aldila Reports Financial Results for Second Quarter 2009

POWAY, CA--(Marketwire - August 6, 2009) - ALDILA, INC. (NASDAQ: ALDA) announced today net sales of $10.6 million and a net loss of $627,000 ($0.12 loss per share) for the three months ended June 30, 2009. In the comparable 2008 second quarter, the Company had net sales of $13.6 million and a net loss of $523,000 ($0.10 loss per share). For the six months ended June 30, 2009, net sales were $24.4 million and a net loss of $675,000 ($0.13 loss per share) as compared to net sales of $30.3 million and a net loss of $65,000 ($0.01 loss per share) for the six month period ended June 30, 2008.

"We continued our cost reduction effort during the quarter. The Company reduced its selling, general and administrative expenses ('SG&A') by 25% during the quarter ended June 30, 2009 as compared to the comparable period in 2008. SG&A is down 27% for the six months ended June 30, 2009 as compared to the same period in 2008. The Company is actively managing its working capital and has increased its cash and cash equivalents by $680,000 as of June 30, 2009 from December 31, 2008, while reducing its total outstanding debt by $3.1 million during that same period. Our backlog as of June 30, 2009 was $6.8 million, an increase of 37% over our backlog at the end of the first quarter of 2009, but down 12% versus the second quarter of 2008," said Mr. Peter R. Mathewson, Chairman of the Board & CEO.

"We experienced a 21% decline in our golf shaft sales in the second quarter of 2009 versus the second quarter of 2008. The average selling price of our golf shafts sold decreased by 6% on a 16% decline in unit sales in the second quarter of 2009 versus the second quarter 2008. We continued to see a very difficult market throughout the quarter. The contraction of the golf club market is estimated to be on the order of 20-30% and there is uncertainty as to when it will return to previous levels. We believe our market share remains strong based on the various programs we have been awarded for 2010 product lines set to begin late in the third quarter. Our customers continue to be cautious and take a conservative approach to their business in light of the economic climate," Mr. Mathewson said.

"Aldila continues to enjoy tremendous success on the PGA and Nationwide Tours in 2009. Through the British Open Championship, Aldila high performance shafts were used by the champions of 10 events on this year's PGA Tour; including the Mercedes-Benz Championship, the WGC-Accenture Match Play Championship and The Masters. Aldila shafts have also been the most popular for woods and hybrids at every Major Championship and World Golf Championship held this year. At the majority of all the other events on the PGA Tour, Aldila has also been the shaft of choice for woods and hybrids. On the Nationwide Tour, Aldila shafts continue to win the wood shaft count on a regular basis and have also been used to win 10 events so far this year. Aldila was also the shaft of choice for the majority of players in both woods and hybrids at the 2009 PGA Club Professional National Championship. The Aldila VooDoo® continues to be our leading shaft on Tour and has been used to win 9 events so far this year. Aldila's newest shaft currently being tested on Tour, the Aldila RIP™, continues to grow in popularity and has already been used to win one event on the PGA Tour. The RIP™ is scheduled to be released next year in the Aldila product line," said Mr. Mathewson.

"Our Composite Materials Division sales declined by 32% during the second quarter 2009 as compared to the second quarter of 2008, as customer demand continued to remain weak. We are continuing our focused approach to expand our sales in non-recreational segments of the market. We have made two key hires to strengthen our sales and factory operations," Mr. Mathewson said.

"Our Vietnam factory is performing up to our expectations at this time and we transferred our VooDoo® technology successfully to our China operation during the quarter, allowing us to cut our workforce roughly in half at our Mexico operation, including substantial fixed cost personnel. We will continue to analyze our Mexico operations for the potential of further reduction," said Mr. Mathewson.

Aldila will host a conference call at 5 P.M. Eastern Time, on Thursday, August 6, 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 second quarter financial results. For telephone access to the conference call dial 1-866-550-6338 or 1-347-284-6930 for international calls and request connection to the Aldila conference call, Participant Passcode: 8644861. A live webcast of the conference call can be accessed on the Aldila website at http://www.aldila.com. 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 www.sec.gov.

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
    customers;
--  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
    decline;
--  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
    products.
    

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

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


                                                  June 30,    December 31,
                                                    2009          2008
                                                ------------  ------------
ASSETS                                          (Unaudited)
CURRENT ASSETS:
          Cash and cash equivalents             $      6,837  $      6,157
          Accounts receivable                          4,934         6,407
          Income taxes receivable                      2,161         2,272
          Inventories                                  9,656        11,583
          Deferred tax assets                            701           809
          Prepaid expenses and other current
           assets                                        715           484
                                                ------------  ------------
               Total current assets                   25,004        27,712
PROPERTY, PLANT AND EQUIPMENT                         12,259        12,789
DEFERRED TAXES                                         1,453         1,187
OTHER NON-CURRENT ASSETS                                 236           244
                                                ------------  ------------
TOTAL ASSETS                                    $     38,952  $     41,932
                                                ============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
          Accounts payable                      $      4,018  $      3,420
          Accrued expenses                             2,264         2,307
          Short term debt                              2,400         5,000
          Other current liability                        149           117
                                                ------------  ------------
               Total current liabilities               8,831        10,844
LONG-TERM LIABILITIES:
          Deferred rent                                  132           153
          Long term debt                               2,667         3,167
          Other long-term liabilities                  1,508         1,508
                                                ------------  ------------
               Total liabilities                      13,138        15,672
                                                ------------  ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
          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 5,174,183
           shares as of June 30, 2009
           and 5,174,183 shares as of
           December 31, 2008                              52            52
          Additional paid-in capital                  44,350        44,121
          Accumulated deficit                        (18,588)      (17,913)
                                                ------------  ------------
               Total stockholders' equity             25,814        26,260
                                                ------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $     38,952  $     41,932
                                                ============  ============






                      ALDILA, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF OPERATIONS  - UNAUDITED
                  (In thousands, except per share data)




                                    Three months ended   Six months ended
                                         June 30,            June 30,
                                    ------------------  ------------------
                                      2009      2008      2009      2008
                                    --------  --------  --------  --------


NET SALES                           $ 10,574  $ 13,644  $ 24,377  $ 30,307
COST OF SALES                          9,191    11,027    20,132    23,131
                                    --------  --------  --------  --------
          Gross profit                 1,383     2,617     4,245     7,176
                                    --------  --------  --------  --------

SELLING, GENERAL AND ADMINISTRATIVE    2,558     3,392     5,388     7,425
                                    --------  --------  --------  --------
          Operating loss              (1,175)     (775)   (1,143)     (249)
                                    --------  --------  --------  --------

OTHER INCOME (EXPENSE):
          Interest income                  7        42         9       262
          Interest expense               (44)      (91)     (102)     (130)
          Other, net                     (64)       18       (80)       58
                                    --------  --------  --------  --------

LOSS BEFORE INCOME TAXES              (1,276)     (806)   (1,316)      (59)
(BENEFIT) PROVISION FOR INCOME
 TAXES                                  (649)     (283)     (641)        6
                                    --------  --------  --------  --------

NET LOSS                            $   (627) $   (523) $   (675) $    (65)
                                    ========  ========  ========  ========


NET LOSS PER COMMON SHARE           $  (0.12) $  (0.10) $  (0.13) $  (0.01)
                                    ========  ========  ========  ========

NET LOSS PER COMMON SHARE,
 ASSUMING DILUTION                  $  (0.12) $  (0.10) $  (0.13) $  (0.01)
                                    ========  ========  ========  ========

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                    5,174     5,155     5,174     5,155
                                    ========  ========  ========  ========

WEIGHTED AVERAGE NUMBER OF COMMON
 AND COMMON EQUIVALENT SHARES          5,174     5,155     5,174     5,155
                                    ========  ========  ========  ========






                      ALDILA, INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
                              (In thousands)


                                                          Six months ended
                                                              June 30,
                                                          ----------------
                                                            2009     2008
                                                          -------  -------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                               $  (675) $   (65)
   Depreciation and amortization                              892      918
   Stock-based compensation                                   229      104
   Loss on disposal of fixed assets                            76        8
   Changes in working capital items, net                    3,688   (1,396)
                                                          -------  -------
     Net cash provided by (used for) operating activities   4,210     (431)
                                                          -------  -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment                (441)    (995)
   Proceeds from sales of property, plant and equipment        11       17
                                                          -------  -------
     Net cash used for investing activities                  (430)    (978)
                                                          -------  -------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings against term loan                                 -    5,000
   Payments for term loan                                    (500)    (417)
   Borrowings against line of credit                        2,800    3,000
   Payments for line of credit                             (5,400)       -
   Proceeds from issuance of common stock                       -       18
   Dividend payments                                            -  (27,323)
                                                          -------  -------
     Net cash used for financing activities                (3,100) (19,722)
                                                          -------  -------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          680  (21,131)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              6,157   29,529
                                                          -------  -------

CASH AND CASH EQUIVALENTS, END OF PERIOD                  $ 6,837  $ 8,398
                                                          =======  =======


Contact Information

  • Investor/Media Contacts:
    Scott M. Bier
    Vice President, CFO
    Sylvia J. Castle
    Investor Relations
    Aldila, Inc.
    (858) 513-1801