Aldila Returns to the Black

For the year ended December 31, 2009, net sales were $49.8 million and a net loss of $243,000 ($0.05 loss per share) as compared to net sales of $53.6 million and a net loss of $2.5 million ($0.48 loss per share) for the year ended December 31, 2008.

“Our golf sales rose 21% in the fourth quarter of 2009 versus the fourth quarter of 2008 on a 20% increase in golf units shipped. Our average selling price was flat for the quarter. The Company benefited by a positive mix change during the quarter. This positive mix change coupled with increased manufacturing efficiencies and lower manufacturing costs were contributors that drove increases in gross profit and gross margins during the fourth quarter 2009 versus the fourth quarter of 2008. During the fourth quarter we saw the positive effects of our reduced manufacturing cost structure after the closing of our Mexico factory and the increase in production volumes running through our two Asian facilities. Our Composite Materials business continued to gain strength during the fourth quarter of 2009 with sales increasing by 76% versus the comparable quarter last year,” said Pete Mathewson, Chairman of the Board & CEO.

“In the fourth quarter we experienced a steady increase in business activity. Golf shipments and incoming orders were strong. Our golf customers appear cautiously optimistic that 2010 will be somewhat of a recovery year and we are certainly seeing OEMs returning to historical ordering patterns at this time. This has been fueled by relatively low inventory levels in the distribution channels and a broad array of new product offerings. Initial retail ‘sell in appears to be good; however, the uncertainty lies with the ‘sell through. It is dependent on the mindset of the golf consumer and whether they return to purchasing new clubs in enough numbers to continue to pull the product through the channels,” said Mathewson.

“While 2009 was as challenging a year as any of us can remember we are pleased with our results as we certainly fared better than most in our industry. During the year we had two notable achievements; we grew our market share and we finished the year as the number one wood shaft manufacturer on the PGA and Nationwide Tours. Our golf sales were off 7% for the year ended 2009 as compared to 2008 on a decrease of golf shaft units shipped of 6%. Our average selling price decreased by 2% for the year ended 2009 as compared to 2008. Our Composite Materials sales decreased by 6% for the year ended 2009 as compared to 2008. Our ending backlog as of December 31, 2009 was $10.6 million as compared to $8.6 million as of December 31, 2008,” Mathewson said.

“We had a tight control on our spending during the year and reduced our selling, general and administrative expense by 20% for the year ended 2009 as compared to 2008, which helped us to pay down our debt by $4.7 million during 2009. We will maintain tight cost controls in 2010 as well and anticipate annual savings of $400,000 – $500,000 moving the Company’s stock listing from NASDAQ to the OTCQX Premier, with the Company no longer being an SEC registrant. The savings will primarily come from a reduction in corporate expense associated with being a public company,” said Mathewson.

“Aldila enjoyed a tremendous year on the professional tours during 2009. We won the Grand Slam of Shafts by winning the wood and hybrid shaft count at every major championship. In addition, Aldila was the most popular wood and hybrid shaft at every World Golf Championship event and, for the second year in a row, the leading wood and hybrid shaft at every FedEx Cup Playoff Event. We had more total wood shafts in play on the PGA Tour than any other graphite shaft manufacturer and nearly twice as many hybrid shafts in play according to the Darrell Survey Company. The Aldila NV(R), VS Proto(TM) and DVS(R) shafts continue to be very popular on Tour as does our latest offering, the VooDoo(R), which continues to be among the top shafts in play each week. The new Aldila RIP(TM) also continues to grow in popularity and has already been used to win multiple events,” Mathewson said.

“In January at the PGA Merchandise Show, we launched our new NV VooDoo(R) and VooDoo(R) hybrid shafts. The new NV VooDoo(R) has the same ball flight and characteristics which made the NV(R) one of the most successful shafts in history, with our new S-core Technology(TM) to even further enhance performance. We also unveiled our new En Fuego(TM) Series of shafts, which consist of Wasabi(TM), Habanero(TM) and Serrano(TM), which are all designed with higher balance points to maximize the performance of today’s modern club designs. Each shaft in the series offers a different launch profile and incorporates our patent-pending Micro Laminate Technology(R) for optimum feel. Each of these new shaft offerings are being used in major club manufacturer product options in both stock and custom configurations. Later this year, we will also be launching our new RIP(TM) shaft. The RIP(TM) incorporates our new patent-pending RIP Technology and is already enjoying considerable success on Tour. There is strong interest in it for new club programs among our OEM partners. We believe the RIP(TM) will be another great platform offering a new unique technology which we can use to build a full range of products,” said Mathewson.