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SOURCE: Aldila
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March 17, 2008 18:36 ET
Aldila to Revise Previously Filed Balance Sheets and Cash Flow Statements; Delays Filing Year End Financials
POWAY, CA--(Marketwire - March 17, 2008) - Aldila, Inc. (NASDAQ: ALDA) today announced that
its Audit Committee had authorized management to revise the previously
filed financial statements for the periods ended March 31, 2005 through and
including September 30, 2007. The financial statements previously filed
should not be relied upon.
The revised financial statements of Aldila, Inc. (the "Company") will
reclassify certain activity in Auction Rate Securities (ARS) on the
Consolidated Balance Sheets and Consolidated Statements of Cash Flows. The
revisions will have no effect on the Company's Consolidated Statements of
Operations for any of the periods presented, and will not change the
previously announced total current assets, total assets, net income, or
earnings per share for any period. No changes are anticipated on the
Consolidated Statements of Operations. The Company has not held any ARS
since August 22, 2007 and has no intention to invest in them in the future.
The Company also announced that the work required to revise the previously
filed financial statements will prevent the Company from filing on March
17, 2008 its annual report on Form 10-K for the period ended December 31,
2007. The Company intends to file that report on or before March 31, 2008.
The previously announced earnings and financial results for the period
ended December 31, 2007 are not anticipated to change.
The ARS in question were generally liquidated in either 7 or 28 days.
Management is reclassifying them as "available-for-sale securities" under
Statements of Financial Accounting Standard ("SFAS") No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." Prior to September
30, 2007, the ARS were classified as Cash Equivalents.
The changes to be made to the financial statements for the periods ended
March 31, 2005 through and including June 30, 2007 will reflect the
reclassification of carrying amounts of investments in ARS previously
reported as part of "cash and cash equivalents" to "marketable securities"
on the Consolidated Balance Sheets. The changes on the Consolidated
Statements of Cash Flows will report the related cash flows from the
purchases and sales of the ARS in "Cash Flows from Investment Activities"
as well as an increase or decrease in the carrying amount of cash and cash
equivalents for the applicable periods. The Consolidated Statements of
Operations for these periods will not change.
The Consolidated Balance Sheet as of December 31, 2006 included in the
previously filed Form 10-Q for the period ended September 30, 2007 already
reflects the carrying amounts of ARS as "marketable securities." The
Company owned no ARS as of September 30, 2007. The Consolidated Statements
of Cash Flows for the period ended September 30, 2007 is being revised to
reclassify cash flows from purchases and sales of the ARS as
"available-for-sale securities" under SFAS No. 115 and moving such activity
from the category "Cash Flows from Operating Activities" to the "Cash Flows
from Investment Activities."
During the third quarter of 2007 the Company became aware that its holdings
of "cash and cash equivalents" included the ARS and immediately ceased
further purchases of ARS. On the financial statements for the nine month
period ended September 30, 2007 management showed "cash and cash
equivalents" and separately showed the ARS it previously owned as
"marketable securities." Management classified these ARS as "trading
securities," primarily as a result of the short time period the ARS were
held and the number of trades involved in rolling over the positions every
7 or 28 days. After further review of SFAS No. 115 and SEC staff
interpretations, and discussions between management and the Company's prior
and current independent registered public accountants as part of the year
end procedures for the period ended December 31, 2007, management now
believes these investments should be classified as "available-for-sale
securities" under SFAS No. 115, and accordingly the cash flows should be
reported under the category "Cash Flows from Investing Activities." The
Company was not in the business of trading marketable securities to
generate short term profits and there was no underlying change in the price
of these marketable securities between auction dates while the Company held
them.
The Company believes this change in position, coupled with the heightened
scrutiny in the financial markets on ARS holdings and activity, make a
revision of the prior period reports appropriate and that the prior
financial statements should not be relied upon. The Company's Audit
Committee met on March 17, 2008 and authorized management to take these
actions.
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. They also necessarily are 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 & Exchange
Commission present a detailed discussion of the principal risks and
uncertainties related to our future operations, in particular under
"Business Risks" in Part I, Item 1, of our Annual Report on Form 10-K for
the year ended December 31, 2006, and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in Part I, Item 7, of the
Form 10-K.
Aldila is a leader among manufacturers of high performance graphite golf
shafts used in clubs assembled and marketed throughout the world by major
golf club companies, component distributors and custom clubmakers. Aldila
also manufactures composite prepreg material for its golf shaft business
and external sales.
Schedule of Consolidated Balance Sheets Line Item Reclassifications
As of June 30, 2007
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 19,361 $ (16,700) $ 2,661
Marketable securities - 16,700 16,700
As of March 31, 2007
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 18,088 $ (15,700) $ 2,388
Marketable securities - 15,700 15,700
As of December 31, 2006
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 15,182 $ (11,300) $ 3,882
Marketable securities - 11,300 11,300
As of September 30, 2006
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 12,627 $ (10,300) $ 2,327
Marketable securities - 10,300 10,300
As of June 30, 2006
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 16,292 $ (13,100) $ 3,192
Marketable securities - 13,100 13,100
As of March 31, 2006
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 16,708 $ (13,400) $ 3,308
Marketable securities - 13,400 13,400
As of December 31, 2005
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 15,821 $ (13,900) $ 1,921
Marketable securities - 13,900 13,900
As of September 30, 2005
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 19,429 $ (18,300) $ 1,129
Marketable securities - 18,300 18,300
As of June 30, 2005
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 16,666 $ (13,000) $ 3,666
Marketable securities - 13,000 13,000
As of March 31, 2005
As Reported Reclassification As Restated
----------- ---------------- -----------
Cash and cash equivalents $ 15,123 $ (8,000) $ 7,123
Marketable securities 2,491 8,000 10,491
Schedule of Consolidated Statements of Cash Flow Line Item
Reclassifications
For the nine month period ended
September 30, 2007
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Purchase of marketable
securities $ (14,200) $ 14,200 $ -
Proceeds from the sale of
marketable securities 25,500 (25,500) -
Net cash provided by
(used for) operating
activities 20,729 (11,300) 9,429
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (14,200) (14,200)
Proceeds from the sale of
marketable securities - 25,500 25,500
Net cash provided by
(used for) investing
activities (4,784) 11,300 6,516
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used for
financing activities (2,797) - (2,797)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 13,148 - 13,148
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 3,882 - 3,882
CASH AND CASH EQUIVALENTS, END OF
PERIOD 17,030 - 17,030
For the six month period ended
June 30, 2007
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 10,139 - 10,139
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (14,200) (14,200)
Proceeds from the sale of
marketable securities - 8,800 8,800
Net cash used for
investing activities (4,041) (5,400) (9,441)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used for
financing activities (1,919) - (1,919)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 4,179 (5,400) (1,221)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,182 (11,300) 3,882
CASH AND CASH EQUIVALENTS, END OF
PERIOD 19,361 (16,700) 2,661
For the three month period ended
March 31, 2007
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 5,230 - 5,230
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (9,200) (9,200)
Proceeds from the sale of
marketable securities - 4,800 4,800
Net cash used for
investing activities (2,341) (4,400) (6,741)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash provided by
financing activities 17 - 17
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 2,906 (4,400) (1,494)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,182 (11,300) 3,882
CASH AND CASH EQUIVALENTS, END OF
PERIOD 18,088 (15,700) 2,388
For the twelve month period ended
December 31, 2006
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 4,476 - 4,476
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (11,000) (11,000)
Proceeds from the sale of
marketable securities - 13,600 13,600
Net cash provided by
(used for) investing
activities (4,399) 2,600 (1,799)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used for
financing activities (716) - (716)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (639) 2,600 1,961
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,821 (13,900) 1,921
CASH AND CASH EQUIVALENTS, END OF
PERIOD 15,182 (11,300) 3,882
For the nine month period ended
September 30, 2006
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash used for
operating activities (372) - (372)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (6,400) (6,400)
Proceeds from the sale of
marketable securities - 10,000 10,000
Net cash provided by
(used for) investing
activities (3,064) 3,600 536
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash provided by
financing activities 242 - 242
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3,194) 3,600 406
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,821 (13,900) 1,921
CASH AND CASH EQUIVALENTS, END OF
PERIOD 12,627 (10,300) 2,327
For the six month period ended
June 30, 2006
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash used for
operating activities (7) - (7)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (4,300) (4,300)
Proceeds from the sale of
marketable securities - 5,100 5,100
Net cash provided by
(used for) investing
activities (1,807) 800 (1,007)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash provided by
financing activities 2,285 - 2,285
NET INCREASE IN CASH AND CASH
EQUIVALENTS 471 800 1,271
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,821 (13,900) 1,921
CASH AND CASH EQUIVALENTS, END OF
PERIOD 16,292 (13,100) 3,192
For the three month period ended
March 31, 2006
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 195 - 195
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (1,800) (1,800)
Proceeds from the sale of
marketable securities - 2,300 2,300
Net cash provided by
(used for) investing
activities (741) 500 (241)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash provided by
financing activities 1,433 - 1,433
NET INCREASE IN CASH AND CASH
EQUIVALENTS 887 500 1,387
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,821 (13,900) 1,921
CASH AND CASH EQUIVALENTS, END OF
PERIOD 16,708 (13,400) 3,308
For the twelve month period ended
December 31, 2005
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 10,388 - 10,388
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (35,500) (35,500)
Proceeds from the sale of
marketable securities 4,971 21,600 26,571
Net cash provided by
(used for) investing
activities 3,816 (13,900) (10,084)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used for
financing activities (9,914) - (9,914)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 4,290 (13,900) (9,610)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 11,531 - 11,531
CASH AND CASH EQUIVALENTS, END OF
PERIOD 15,821 (13,900) 1,921
For the nine month period ended
September 30, 2005
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 8,741 - 8,741
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (30,900) (30,900)
Proceeds from the sale of
marketable securities 4,971 12,600 17,571
Net cash provided by
(used for) investing
activities 3,755 (18,300) (14,545)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used for
financing activities (4,598) - (4,598)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 7,898 (18,300) (10,402)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 11,531 - 11,531
CASH AND CASH EQUIVALENTS, END OF
PERIOD 19,429 (18,300) 1,129
For the six month period ended
June 30, 2005
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 5,770 - 5,770
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (22,700) (22,700)
Proceeds from the sale of
marketable securities 4,971 9,700 14,671
Net cash provided by
(used for) investing
activities 4,346 (13,000) (8,654)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used for
financing activities (4,981) - (4,981)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 5,135 (13,000) (7,865)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 11,531 - 11,531
CASH AND CASH EQUIVALENTS, END OF
PERIOD 16,666 (13,000) 3,666
For the three month period ended
March 31, 2005
As As
Reported Reclassification Restated
--------- ---------------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by
operating activities 760 - 760
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of marketable
securities - (8,000) (8,000)
Proceeds from the sale of
marketable securities 2,480 - 2,480
Net cash provided by
(used for) investing
activities 2,325 (8,000) (5,675)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash provided by
financing activities 507 - 507
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 3,592 (8,000) (4,408)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 11,531 - 11,531
CASH AND CASH EQUIVALENTS, END OF
PERIOD 15,123 (8,000) 7,123