SOURCE: Aldila, Inc.

Aldila, Inc.

May 11, 2011 16:15 ET

Aldila Reports First Quarter 2011 Financial Results

POWAY, CA--(Marketwire - May 11, 2011) - ALDILA, INC. (OTCQX: ALDA) (PINKSHEETS: ALDA) announced today net sales of $11.3 million and a net loss of $535,000 ($0.10 loss per share) for the three months ending March 31, 2011 as compared to net sales of $16.1 million and net income of $707,000 ($0.13 income per share) for the comparable period in 2010.

"Our golf shaft sales during the quarter continued to exhibit the softness we experienced in the fourth quarter. While there have been pockets of success this year with new club offerings, generally the golf market remains down versus historic levels. The market remains highly competitive and unpredictable. As I stated in our fourth quarter report, I believe this year we will see a stronger second half of the year versus the first half as new programs we are involved in are launched beginning sometime in the third and fourth quarters," said Mr. Peter R. Mathewson, Chairman of the Board and CEO.

"The 2011 PGA Tour is off to a great start for Aldila. Through The Heritage Classic, players using Aldila shafts have already won 9 events, including both World Golf Championship events, the Accenture Match Play Championship and the Cadillac Championship. Aldila remains the most popular shaft manufacturer on the PGA Tour with the most wood and hybrid shafts in play. There are more Aldila shafts in play on Tour for one reason: performance. As the ultimate proving ground for new golf technology, our leadership position on Tour validates our position as the leading innovator of high performance graphite golf shafts. We are continuing to develop new shaft models and collect feedback from players to refine shaft designs that will be introduced later this year," said Mr. Mathewson.

"Our Composite Materials business recorded a 14% increase in the first quarter of 2011 versus the first quarter of 2010. We continue to see opportunities for growth and are focusing our efforts towards realizing these new sales. Non-recreational market segments are our highest priority and offer the greatest potential for significant increases in sales. While qualification efforts can be lengthy, we are making progress on several fronts that appear encouraging," Mr. Mathewson said.

"The integration of the Victory Archery acquisition and transition of manufacturing to Vietnam are progressing well. The first production line has been installed in our Vietnam facility and limited production has been underway during the quarter. A second production line will be installed and operational shortly. We are encouraged with the quality and the speed in which our workforce is learning the production process. We believe the quality of manufacturing will improve versus the Mexico factory which has been producing Victory arrows because of the sophistication of our production and quality systems in our Vietnam factory," said Mr. Mathewson.

Aldila will host a conference call at 5 P.M. Eastern Time, on May 11, 2011 with Peter R. Mathewson, Chairman and CEO, and Scott M. Bier, Vice President, Chief Financial Officer, to review Aldila's First Quarter 2011 financial results. For telephone access to the conference call dial 1-888-282-4044 or 1-913-312-1513 for international calls and request connection to the Aldila conference call, Participant Passcode: 6026538. 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 OTC Disclosure and News Service and the Securities and Exchange Commission (for filings prior to our move to OTCQX U.S. Premier) present a detailed discussion of the principal risks and uncertainties related to our future operations, in particular our Annual Report for the year ended December 31, 2010, under "The nature of issuer's business" in Part C, Item VIII, and "Management's Discussion and Analysis or Plan of Operation" in Part C, Item XVI and Quarterly Reports and Current Reports, all of which can be obtained on the OTCQX U.S. Premier website, which can be found at www.otcqx.com.

The forward-looking statements in this press release are particularly
subject to the risks that:
   -- consumer discretionary spending will be flat or decline, which could
      have a material impact on our business;
   -- our product offerings, including the NV®, VS Proto™, DVS®,
      VooDoo® and RIP® 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 or fail to continue to grow;
   -- 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)

                                                   March 31,   December 31,
                                                      2011         2010
                                                  -----------  -----------
ASSETS
CURRENT ASSETS:
          Cash and cash equivalents               $     1,941  $     3,400
          Accounts receivable                           6,862        6,157
          Income taxes receivable                           5            -
          Inventories                                  11,228       10,779
          Deferred tax assets                             679          646
          Prepaid expenses and other current
           assets                                         572          604
                                                  -----------  -----------
               Total current assets                    21,287       21,586
PROPERTY, PLANT AND EQUIPMENT                          11,814       11,748
DEFERRED TAXES                                          2,113        1,737
OTHER NON-CURRENT ASSETS                                   79          107
INTANGIBLE ASSETS                                       1,260        1,311
GOODWILL                                                  248          248
                                                  -----------  -----------
TOTAL ASSETS                                      $    36,801  $    36,737
                                                  ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
          Accounts payable                        $     4,337  $     3,839
          Income taxes payable                              -           62
          Accrued expenses                              2,308        2,383
          Short term debt                                 750          750
          Other current liability                         347          262
                                                  -----------  -----------
               Total current liabilities                7,742        7,296
LONG-TERM LIABILITIES:
          Deferred rent                                    38          109
          Other long-term liabilities                   1,656        1,470
                                                  -----------  -----------
               Total liabilities                        9,436        8,875
                                                  -----------  -----------
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 5,349,863 shares as of March
           31, 2011 and as of December 31, 2010            53           53
          Additional paid-in capital                   45,197       45,159
          Accumulated deficit                         (17,885)     (17,350)
                                                  -----------  -----------
               Total stockholders' equity              27,365       27,862
                                                  -----------  -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $    36,801  $    36,737
                                                  ===========  ===========





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

                                                        Three months ended
                                                             March 31,
                                                        ------------------
                                                          2011      2010
                                                        --------  --------


NET SALES                                               $ 11,332  $ 16,119
COST OF SALES                                              9,184    11,886
                                                        --------  --------
          Gross profit                                     2,148     4,233
                                                        --------  --------

SELLING, GENERAL AND ADMINISTRATIVE                        2,977     3,203
                                                        --------  --------
          Operating (loss) income                           (829)    1,030
                                                        --------  --------

OTHER INCOME (EXPENSE):
          Interest income                                      2         1
          Interest expense                                   (10)      (22)
          Other, net                                          (6)       91
                                                        --------  --------

(LOSS) INCOME BEFORE INCOME TAXES                           (843)    1,100
(BENEFIT) PROVISION FOR INCOME TAXES                        (308)      393
                                                        --------  --------

NET (LOSS) INCOME                                       $   (535) $    707
                                                        ========  ========


NET (LOSS) INCOME  PER COMMON SHARE                     $  (0.10) $   0.14
                                                        ========  ========

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

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING       5,350     5,202
                                                        ========  ========

WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
 EQUIVALENT SHARES                                         5,350     5,242
                                                        ========  ========




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

                                                        Three months ended
                                                             March 31,
                                                        ------------------
                                                          2011      2010
                                                        --------  --------

CASH FLOWS FROM OPERATING ACTIVITIES:
          Net (loss) income                             $   (535) $    707
          Depreciation and amortization                      499       422
          Stock-based compensation                            38        49
          Gain on disposal of fixed assets                    (1)        -
          Changes in working capital items, net           (1,255)      411
                                                        --------  --------
                      Net cash (used for) provided by
                       operating activities               (1,254)    1,589
                                                        --------  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchases of property, plant and equipment        (207)     (217)
          Proceeds from sales of property, plant and
           equipment                                           2         -
                                                        --------  --------
                      Net cash used for investing
                       activities                           (205)     (217)
                                                        --------  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
          Payments for term loan                               -    (2,250)
          Payments for line of credit                          -      (300)
                                                        --------  --------
                      Net cash used for financing
                       activities                              -    (2,550)
                                                        --------  --------

NET DECREASE IN CASH AND CASH EQUIVALENTS                 (1,459)   (1,178)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             3,400     7,104
                                                        --------  --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                $  1,941  $  5,926
                                                        ========  ========

Contact Information

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