Aldila, Inc. had a tough start to the year as flat revenues and diminished margins led to a decrease in net income compared to the year-ago quarter. Compounding those worries was a 22.8% decrease in backlog at the end of the quarter to $9.5 million from $12.3 million at the end of Q1 2006. Finally, the company announced that it would be exiting the hockey business in the third quarter.
Net sales were essentially flat in the first quarter at $20.7 million, compared to $20.8 million last year. Golf shaft sales declined 4% in the first quarter of 2007 versus the first quarter of 2006 as a result of last years quarter being the highest ever for sales of the NV shaft product line. The average selling price of golf shafts decreased 5% in the quarter on a 1% increase in unit sales. Branded golf shaft sales decreased 19%, but co-branded sales increased 5% versus the first quarter of 2006. On a combined basis, branded and co-branded product accounted for 53% of all golf shaft sales in the quarter, down from 57% last year. The average selling prices of branded and co-branded shafts were down 7% and 1%, respectively.
Gross margins fell 120 basis points in the quarter to 35% of sales from 47% of sales last year, causing net income to drop nearly 38% to $2.7 million, or 48 cents per diluted per share, compared to $4.3 million, or 78 cents per diluted per share, in Q1 last year.
