Aldila Inc. reported slightly higher net sales of $9,087,000 for the fourth quarter ended December 31, 2002, compared to $8,322,000 in the same quarter of 2001, and a net loss of $1,777,000 ($0.36 per share).

Included in the fourth quarter 2002 results was a charge of $300,000 (pre tax) for combining the corporate staff within the golf shaft and prepreg facility in Poway. Also included in the 2002 fourth quarter results was a valuation allowance of $1,911,000 related to the company’s deferred tax assets and an adjustment of $677,000 to previously accrued tax reserves. Excluding these items, Aldila’s 2002 fourth quarter net loss was $875,000 ($0.18 per share). In the fourth quarter of 2001, the net loss was $51,428,000 ($10.15 per share), of which $49,400,000 (net of taxes) related to impairment of goodwill and other intangible assets. Excluding the charge, Aldila’s 2001 fourth quarter net loss was $2,075,000 ($0.41 per share).

For the year ended December 31, 2002, net sales were $37,462,000, compared to net sales of $39,561,000 in 2001. The company reported a net loss of $2,844,000 ($0.57 per share) in 2002. Excluding the consolidation charge and the adjustments related to taxes that affected the fourth quarter and fiscal year results, the company’s net loss in 2002 was $1,610,000 ($0.33 per share). In 2001, the company had a net loss of $51,419,000 ($10.10 per share), including impairment charges of $49,400,000 and plant consolidation charges of $356,000 (net of taxes). Excluding impairment and plant consolidation charges, the company’s net loss in 2001 was $1,710,000 ($0.34 per share).

Aldila’s cash and short term investment position remains strong at $3,286,000 as of December 31, 2002, versus $266,000 at December 31, 2001, with no outstanding borrowings.

All financial results are reflective of a one-for-three reverse stock split effective at the close of business June 3, 2002.

“Golf shaft units shipped were up 9% in the fourth quarter versus the same quarter a year ago and the average selling price declined 3%,” said Peter R. Mathewson, Chairman of the Board and CEO. “For the year, units shipped increased 11%, with a 15% decline in average selling price.

“We are continuing to invest in our brand, led by our innovative Aldila ONE wood shaft and Tour Gold line of woods and irons,” continued Mathewson. “Nick Price and Rich Beem will continue to be incorporated into our advertising campaign including commercials on the Golf Channel. Our tour presence will continue in 2003 with closer ties to major OEMs tour programs.

“Our work with Mission Hockey continues to expand and is now focused on the development of an industry leading hockey blade to go along with what we believe is the best composite hockey shaft in the sport.

“Based on a slow incoming order rate in the fourth quarter of 2002 and the absence of any projections for economic recovery in early 2003, no improvement is seen in the future performance of the golf equipment market in the near term,” Mathewson continued.

“We are closely managing our costs in this extremely difficult market,” said Mathewson. “The consolidation of the corporate staff into the Poway manufacturing facility will be completed early in the second quarter, and cost reduction benefits will start to be realized.”

                    ALDILA, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share data)


                            Three months ended    Twelve months ended
                              December 31,           December 31,
                         ----------------------- ---------------------
                            2002        2001        2002       2001
                         ----------- ----------- ----------- ---------
                         (Unaudited) (Unaudited) (Unaudited)

NET SALES                    $9,087      $8,322     $37,462   $39,561
COST OF SALES                 8,234       9,300      32,828    33,304
                         ----------- ----------- ----------- ---------
  Gross profit (loss)           853        (978)      4,634     6,257
                         ----------- ----------- ----------- ---------

SELLING, GENERAL AND
 ADMINISTRATIVE               1,684       1,500       7,334     6,851
IMPAIRMENT OF GOODWILL            -      41,932           -    41,932
IMPAIRMENT OF
 TRADEMARKS & PATENTS             -      12,963           -    12,963
AMORTIZATION OF
 GOODWILL                         -         349           -     1,410
PLANT CONSOLIDATION             300          24         300       593
                         ----------- ----------- ----------- ---------
  Operating loss             (1,131)    (57,746)     (3,000)  (57,492)
                         ----------- ----------- ----------- ---------

OTHER EXPENSE
 (INCOME):
  Interest expense                9          33          94       375
  Other, net                     17          34          62        65
  Equity in earnings of
   joint venture                (77)        (71)       (269)     (231)
                         ----------- ----------- ----------- ---------

LOSS BEFORE INCOME
 TAXES                       (1,080)    (57,742)     (2,887)  (57,701)
PROVISION (BENEFIT) FOR
 INCOME TAXES                   697      (6,314)        (43)   (6,282)
                         ----------- ----------- ----------- ---------

NET LOSS                    $(1,777)   $(51,428)    $(2,844) $(51,419)