SOURCE:
Aldila
2008-08-06 15:15:00
Aldila Reports Financial Results for Second Quarter 2008
POWAY, CA–(EMWNews – August 6, 2008) – ALDILA, INC. (
sales of $13.6 million and a net loss of $523,000 ($0.10 fully diluted loss
per share) for the three months ended June 30, 2008. In the comparable
2007 second quarter, the Company had net sales of $17.6 million and net
income of $1.7 million ($0.30 fully diluted income per share). For the six
months ended June 30, 2008, the Company had net sales of $30.3 million and
a net loss of $65,000 ($0.01 fully diluted loss per share) as compared to
$38.3 million and net income of $4.4 million ($.78 fully diluted income per
share) for the six months ended June 30, 2007.
Our golf shaft sales declined 17% in the second quarter of 2008 versus the
second quarter of 2007. The average selling price of our golf shafts
decreased by 12% quarter on quarter on a 6% decline in unit sales.
Composite materials sales were off 18% in the current quarter versus the
2007 quarter. In the 2007 quarter we had $1.1 million of hockey sales, a
business line which we discontinued in 2007. Our gross profit in the 2008
quarter declined by 56% due to lower average selling prices for golf shafts
and lower overall sales volumes of golf shafts and composite materials.
Advertising and promotion spending have been heavily concentrated in the
first half of this year to support the DVS® shaft line in the first
quarter, and in the second quarter the pre-launch advertising of our new
VooDoo shaft line set to begin sales in September of this year. The Company
anticipates that its advertising and promotion spending will be reduced in
the third and fourth quarters.
“We are experiencing a marked slowdown in our sales driven by several
factors impacting the golf equipment market,” said Mr. Peter R. Mathewson,
Chairman of the Board and CEO. “Weak retail sales, poor weather, a lack of
new product offerings by some of our customers, and the overall weak
economic conditions are several factors impacting the golf equipment
market. Looking at industry reports, 2008 equipment sales have been weak
year to date and are forecasted to remain so through the remainder of the
year. Through the first six months of 2008, the golf industry is
experiencing a significant decline in sales of metal woods and iron sets.
Our sales to several large customers, in particular, continued to be hurt
by slowing sales of second selling season OEM programs. These customers
have new shaft programs set to begin delivery late in the third quarter of
2008,” Mr. Mathewson said.
“Aldila is continuing to enjoy tremendous success on Tour. Players using
Aldila shafts have won numerous events on the PGA, Nationwide, Champions
and LPGA Tours. Of particular note, Aldila’s newest shaft introduction,
the Aldila VooDoo, has been used by players to win the WGC-CA Championship
and Verizon Heritage on the PGA Tour, the BMW Asian Open on the European
Tour and the South Georgia Classic on the Nationwide Tour. Players testing
the Aldila VooDoo continue to give us exciting feedback and we expect usage
on Tour of the Aldila VooDoo to continue to grow. Based on our success on
Tour, we recently announced that the official launch of the VooDoo will be
September of this year. Already, several major manufacturers have
indicated they will begin offering the Aldila VooDoo in new club
introductions this fall and early 2009,” said Mr. Mathewson.
“Our other high performance shaft models also continue to do very well on
Tour. The combination of the Aldila DVS®, VS Proto™, and NV®
continue to be among the most popular shafts on the PGA Tour in woods, and
the most popular in hybrid clubs. On the Nationwide Tour, we remain the
leading wood and hybrid shafts in play. We are also proud to acknowledge
Aldila Staff member, Paula Creamer, on her recent victory at the Jamie Farr
Owens Corning Classic on the LPGA Tour. This was her third win this year
playing Aldila shafts. She continues to be an outstanding player and
spokesperson for Aldila. We are also continuing to see our success on Tour
translate to increased play by top amateur golfers as well. Aldila was the
most popular wood and hybrid shaft at the NCAA Division 1 Men’s
Championship and the leading driver shaft at the NCAA Women’s Championship.
We were also the leading shaft in woods and hybrids at the recent U.S.
Amateur Public Links Championship and the U.S. Junior Amateur
Championship,” Mr. Mathewson said.
“We believe our success on Tour and success among the amateur players will
fuel demand for Aldila shafts in the market. In the latest edition of the
Darrell Consumer Survey, Aldila remained the leading shaft brand in market
penetration. Our usage in all woods, fairway woods and hybrid clubs also
continues to outpace the competition according to this leading independent
survey of golf equipment in use today,” said Mr. Mathewson.
“Our Vietnam facility is fully operational and is poised to participate in
the production of several of the aforementioned new OEM shaft programs.
Our anticipated cost savings associated with our Vietnam factory have not
been realized to date as we have been hampered by a slowing of overall unit
volume available to shift to the facility,” Mr. Mathewson said.
“Composite Materials sales declined by 18% as our customers reduced their
requirements due to continued slowing of their businesses. New customers
are being developed and when there is an improvement in overall economic
activity we expect to get back on track with continuing sales growth,” said
Mr. Mathewson.
“The Company ended the quarter with $8.4 million in cash and cash
equivalents after paying $27.3 million in dividend payments to shareholders
and repaying $417,000 against its term loan during the six month period
ended June 30, 2008,” Mr. Mathewson said.
Aldila will host a conference call at 5 p.m. Eastern time, on Wednesday,
August 6, 2008, with Peter R. Mathewson, Chairman and CEO, Robert J.
Cierzan, Senior Vice President, and Scott M. Bier, Chief Financial Officer,
to review Aldila’s 2008 second quarter and year to date financial results.
For telephone access to the conference call dial 877-856-1955 or
719-325-4793 for international calls and request connection to the Aldila
conference call. A live web cast of the conference call can be accessed on
the Aldila web site at http://www.aldila.com. An archive of the web cast
will be available through our web site 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,
2007, 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:
-- our product offerings, including the NV®, VS Proto™ and DVS®
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
web site at www.aldila.com.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, December 31,
2008 2007
----------- ------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 8,398 $ 29,529
Accounts receivable 5,733 8,684
Income taxes receivable 490 -
Inventories 13,768 13,861
Deferred tax assets 1,560 1,521
Prepaid expenses and other current
assets 641 578
----------- ------------
Total current assets 30,590 54,173
PROPERTY, PLANT AND EQUIPMENT 13,370 13,308
DEFERRED TAXES 750 750
OTHER NON-CURRENT ASSETS 256 257
----------- ------------
TOTAL ASSETS $ 44,966 $ 68,488
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,544 $ 4,758
Income taxes payable - 4,266
Accrued expenses 2,185 2,564
Short term debt 4,000 -
Other current liability 137 137
----------- ------------
Total current liabilities 11,866 11,725
LONG-TERM LIABILITIES:
Deferred rent 165 170
Long term debt 3,583 -
Other long-term liabilities 852 827
----------- ------------
Total liabilities 16,466 12,722
----------- ------------
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 5,155,347
shares as of June 30, 2008
and 5,154,235 shares as of
December 31, 2007 52 51
Additional paid-in capital 43,823 43,702
(Accumulated deficit) retained earnings (15,375) 12,013
----------- ------------
Total stockholders' equity 28,500 55,766
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,966 $ 68,488
=========== ============
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,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- ---------
NET SALES $ 13,644 $ 17,615 $ 30,307 $ 38,277
COST OF SALES 11,027 11,683 23,131 25,155
-------- -------- -------- ---------
Gross profit 2,617 5,932 7,176 13,122
-------- -------- -------- ---------
SELLING, GENERAL AND ADMINISTRATIVE 3,392 3,656 7,425 7,028
-------- -------- -------- ---------
Operating (loss) income (775) 2,276 (249) 6,094
-------- -------- -------- ---------
OTHER INCOME (EXPENSE):
Interest income 42 250 262 449
Interest expense (91) - (130) -
Other, net 18 (32) 58 11
Equity in earnings of
joint venture - 85 - 190
-------- -------- -------- ---------
(LOSS) INCOME BEFORE INCOME TAXES (806) 2,579 (59) 6,744
(BENEFIT) PROVISION FOR INCOME
TAXES (283) 918 6 2,388
-------- -------- -------- ---------
NET (LOSS) INCOME $ (523) $ 1,661 $ (65) $ 4,356
======== ======== ======== =========
NET (LOSS) INCOME PER COMMON SHARE $ (0.10) $ 0.30 $ (0.01) $ 0.79
======== ======== ======== =========
NET (LOSS) INCOME PER COMMON SHARE,
ASSUMING DILUTION $ (0.10) $ 0.30 $ (0.01) $ 0.78
======== ======== ======== =========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 5,155 5,522 5,155 5,523
======== ======== ======== =========
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 5,190 5,575 5,192 5,586
======== ======== ======== =========
ALDILA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In thousands)
Six months ended
June 30,
------------------------
2008 2007
----------- -----------
AS RESTATED
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (65) $ 4,356
Depreciation and amortization 918 772
Stock-based compensation 104 124
Loss on disposal of fixed assets 8 65
Undistributed income of joint venture,
net - (204)
Changes in working capital items, net (1,396) 5,026
----------- -----------
Net cash (used for)
provided by operating
activities (431) 10,139
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (995) (4,364)
Proceeds from sales of property, plant
and equipment 17 37
Purchases of marketable securities - (14,200)
Proceeds from sales of marketable
securities - 8,800
Distribution from joint venture - 286
----------- -----------
Net cash used for
investing activities (978) (9,441)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings against line of credit 3,000 -
Borrowings against term loan 5,000 -
Payments for the term loan (417) -
Repurchases of common stock - (298)
Proceeds from issuance of common stock 18 36
Dividend payments (27,323) (1,657)
----------- -----------
Net cash used for financing
activities (19,722) (1,919)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (21,131) (1,221)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 29,529 3,882
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,398 $ 2,661
=========== ===========
| Investor/Media Contacts: Scott M. Bier Vice President/Chief Financial Officer Sylvia J. Castle Investor Relations Aldila, Inc. (858) 513-1801 |
|
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