Aldila, Inc. reported net sales for the fourth quarter ended Dec. 31 fell 18.7% to $12.0 million from $14.7 million a year ago as weakness in the company’s Composite division dropped the fourth quarter below the company’s full-year trend.
The company reported a loss of $403,000, or 8 cents per diluted share, in the fourth quarter, compared to a net income of $1.0 million, or 19 cents per share, in the prior-year period.
In a conference call with analysts, Chairman and CEO Peter Mathewson attributed sales weakness in the Composite business to slow comparable sales of the OEM production shaft segment, which recorded a sales decline of 40% for the period.
Mathewson also pointed to a general multi-year decline in the Golf business, noting that driver sales by unit were down 20% in fiscal 2010 from fiscal 2006 while price compression depressed average selling prices from $236 to $210 during the same period.
“While it appears that golf equipment sales have troughed, the return to a more normalized sales level could be slow in coming and requires several years to climb back to a healthy level,” added Mathewson. “With no organic growth domestically to offset the impact of an economic downturn, the golf industry will continue to struggle.”
Among other results, gross margins for the quarter was 14.9% down from 26.7% in the year-ago period. Management said backlog as of Dec. 31 was $5.5 million, off 48% from $10.6 million in the year-ago period. The decrease was attributed to backlog in the Composite division.
For e full year ended Dec. 31, 2010, net sales were $54.7 million, up 9.9% from sales of $49.8 million a year ago. The company’s net income was $2.3 million, or 43 cents per diluted share, as compared to a net loss of $243,000, or 5 cents per diluted share, in the prior year.
In related news, Mathewson commented on the company’s recent presence at the Archery Trade Association show, suggesting that Aldila’s recently-acquired Victory Archery line was received well at the show.
