ALDILA, INC. (OTCQX: ALDA) (PINKSHEETS: ALDA) announced today net
sales of $12.2 million and net income of $1.3 million ($0.24
earnings per share) for the three months ending September 30, 2010
as compared to net sales of $10.7 million and a net loss of
$571,000 ($0.11 loss per share) for the comparable period in 2009.
The $1.3 million income in third quarter of 2010 included a tax
benefit realization of $1.0 million related to the Company's
unrecognized tax benefits. For the nine months ended September 30,
2010, net sales of $42.7 million and net income of $2.7 million
($0.51 income per share) as compared to net sales of $35.0 million
and net loss of $1.2 million ($0.24 loss per share) for the
comparable period of 2009.
"We continued to experience relatively strong sales during our
third quarter, historically our weakest quarter. Our consolidated
sales increased by 15% for the three months ended September 30,
2010 as compared to the comparable period of 2009. The increase in
sales was driven by increases in sales for both of our operating
divisions. In our Composite Product division, shaft sales increased
by 6%, unit sales increased by 15% and average selling price
declined by 8%. In our Composite Materials division, sales
increased by 61%. For the nine months ended September 30, 2010,
consolidated sales are up 22% as compared to 2009, with Composite
Product sales up 13% and Composite Materials up 81%. Golf shaft
sales are up 13% on an increase in units of 22% and a decline in
average selling prices of 7%," said Peter R. Mathewson, Chairman
and CEO.
"The golf industry and golf equipment sales in particular have
suffered through several years of tough conditions with declines in
sales in the key categories of woods and irons during 2008, 2009
and year to date 2010. Retail sales numbers through August of 2010
show metal wood units off 4% and dollars off 7%, with the biggest
decline in drivers with a decline of 11% in units and dollars are
off 16%. In the iron category unit sales are down 2% and dollars
are down 1%. This is not surprising because the macro economic
conditions have been severely stressed since the second half of
2008 and we have yet to emerge with a full recovery. Our golf sales
are dependent on discretionary spending. As the economy improves,
it's reasonable to assume the industry will regain much of the lost
sales over the last several years. With this in mind, our 2010 year
to date performance has been quite good and ranks near the top in
our industry. Our market share has remained strong; our costs
reduced with our closure of our Mexico factory in 2009 and our
concerted effort to fully utilize our Vietnam factory that enjoys
our lowest cost structure. For OEMs, fitters and avid golfers who
are always looking for a new and compelling story, Aldila is the
leading graphite golf shaft manufacturer delivering innovative,
performance enhancing technology and visually engaging products,"
Mr. Mathewson said.
"Backlog of $6.1 million as of September 30, 2010 is down by 39%
as compared to our backlog of $10.1 million as of September 30,
2009. Our backlog has been affected by the change in our OEM and
their assemblers' ordering patterns. They have shortened their lead
times on ordering new product reflecting continued emphasis on
tight inventory management. Our balance sheet remains strong with
cash of $7.6 million and no debt as of September 30, 2010," said
Mr. Mathewson.
"With the 2010 professional tours wrapping up their respective
seasons, we are proud to report that we had one of our best years
ever on both the PGA and Nationwide Tours. Players using Aldila
shafts won 14 events on the PGA Tour and 15 events on the
Nationwide Tour -- over half of all the events. Some highlights
included our RIP™ shaft being used to win the U.S. Open
Championship and the winner of the Greenbrier Classic using a full
bag of Aldila wood shafts to shoot a final round 59; the second 59
shot by a player in 2010 while using Aldila shafts. PGA Tour
Professionals who played Aldila driver shafts this year also won
over $39 million during the season. We are also delighted to report
that the world's best players once again chose Aldila over all
other shaft manufacturers as their shaft of choice for both woods
and hybrids during the 2010 PGA Tour season. Aldila had nearly
twice as many hybrid shafts in play this year as any other
manufacturer. We are also extremely proud that for the 3rd
consecutive year, Aldila was the most popular graphite shaft in
play during the PGA Tour's FedEx Cup Playoffs. In addition, players
using Aldila shafts won 2 of the 4 FedEx Cup Playoff events," Mr.
Mathewson said.
"The new Aldila RIP™ continues to be well received in the market
place and is being launched through leading club manufacturers and
distributors. New models of the RIP™ are going through final
testing and being readied for launch early in 2011. The new models
received very positive reviews during testing on Tour this year and
were quickly put into play. We are confident that these new
additions to the RIP™ product line will be well received in the
market as well," said Mr. Mathewson.
"Our Composite Materials Division continues to thrive with sales
up 61% versus the third quarter of 2009 and up 81% through the nine
months ended September 30, 2010 compared to the same period in
2009. We continue to strengthen the organization with the addition
of a new Quality Manager," Mr. Mathewson said.
Aldila will host a conference call at 5 P.M. Eastern Time, on
November 03, 2010, with Peter R. Mathewson, Chairman & CEO,
Robert J. Cierzan, Sr. Vice President, Composite Materials and
Scott M. Bier, Vice President, Chief Financial Officer, to review
Aldila's Third Quarter and Year to Date 2010 financial results. For
telephone access to the conference call dial 800-750-4984 or
913-312-0660 for international calls and request connection to the
Aldila conference call, Participant Passcode: 3647378. 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 and OTC Disclosure and News Service 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, 2009, 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. Our future filings will be
included 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)
September 30, December 31,
2010 2009
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,571 $ 7,104
Accounts receivable 5,323 7,535
Inventories 10,791 9,280
Deferred tax assets 651 562
Prepaid expenses and other current assets 375 679
------------- -------------
Total current assets 24,711 25,160
PROPERTY, PLANT AND EQUIPMENT 11,318 11,649
DEFERRED TAXES 1,861 1,528
OTHER NON-CURRENT ASSETS 178 235
------------- -------------
TOTAL ASSETS $ 38,068 $ 38,572
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,796 $ 4,141
Income taxes payable 632 158
Accrued expenses 2,476 2,438
Short term debt - 1,300
Other current liability 225 509
------------- -------------
Total current liabilities 8,129 8,546
LONG-TERM LIABILITIES:
Deferred rent 112 111
Long term debt - 2,167
Other long-term liabilities 573 1,332
------------- -------------
Total liabilities 8,814 12,156
------------- -------------
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
5,245,544 shares as of September 30, 2010
and 5,202,156 shares as of
December 31, 2009 52 52
Additional paid-in capital 44,838 44,618
Accumulated deficit (15,636) (18,254)
------------- -------------
Total stockholders' equity 29,254 26,416
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 38,068 $ 38,572
============= =============
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
NET SALES $ 12,227 $ 10,671 $ 42,744 $ 35,048
COST OF SALES 9,375 8,153 32,067 28,285
-------- -------- -------- --------
Gross profit 2,852 2,518 10,677 6,763
-------- -------- -------- --------
SELLING, GENERAL AND ADMINISTRATIVE 2,648 2,367 8,484 7,755
PLANT CONSOLIDATION - 212 - 212
-------- -------- -------- --------
Operating income (loss) 204 (61) 2,193 (1,204)
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 3 3 5 12
Interest expense - (46) (32) (148)
Other, net (4) 4 13 (76)
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 203 (100) 2,179 (1,416)
(BENEFIT) PROVISION FOR INCOME
TAXES (1,054) 471 (489) (170)
-------- -------- -------- --------
NET INCOME (LOSS) $ 1,257 $ (571) $ 2,668 $ (1,246)
======== ======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE $ 0.24 $ (0.11) $ 0.51 $ (0.24)
======== ======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE,
ASSUMING DILUTION $ 0.24 $ (0.11) $ 0.51 $ (0.24)
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 5,224 5,186 5,210 5,178
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 5,255 5,186 5,234 5,178
======== ======== ======== ========
ALDILA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In thousands)
Nine months ended
September 30,
------------------
2010 2009
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 2,668 $ (1,246)
Depreciation and amortization 1,295 1,340
Stock-based compensation 155 292
Loss on disposal of fixed assets - 102
Changes in working capital items, net 753 3,994
-------- --------
Net cash provided by operating activities 4,871 4,482
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (953) (707)
Proceeds from sales of property, plant and equipment 1 36
-------- --------
Net cash used for investing activities (952) (671)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for term loan (3,167) (750)
Borrowings against line of credit - 4,800
Payments for line of credit (300) (6,800)
Proceeds from issuance of common stock 15 -
-------- --------
Net cash used for financing activities (3,452) (2,750)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 467 1,061
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,104 6,157
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 7,571 $ 7,218
======== ========
Investor/Media Contacts: Scott M. Bier Vice President, CFO
Sylvia J. Castle Investor Relations Aldila, Inc. (858) 513-1801
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