Aldila, Inc. reported net sales of $9.8 million for the fourth quarter ended December 31, 2003 compared to $9.1 million in the same quarter of 2002. ALDA reported a net loss of $1.3 million, or 26 cents per share, for Q4 2003 compared to a net loss of $1.8 million, or 36 cents per share, in the same quarter of 2002. Included in the fourth quarter of 2003 was an impairment charge of $2.2 million (pre tax) related to Aldila's investment in Carbon Fiber Technology LLC, a joint venture limited liability company.
Excluding the impairment charge and the income tax benefit of $183,000, Aldila's 2003 fourth quarter net income would have been $762,000 ($0.16 earnings per share). Included in the fourth quarter of 2002 was a charge of $300,000 (pre tax) for facility consolidation, a valuation allowance of $1.9 million 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 would have been $875,000 ($0.18 loss per share).
For the year ended December 31, 2003 net sales were $37.8 million, compared to net sales of $37.5 million in 2002. The Company reported a net loss of $1.7 million ($0.35 loss per share) for 2003 compared to a net loss of $2.8 million ($0.57 loss per share) in 2002. Excluding the impairment charge and the income tax benefit of $183,000 that affected the fourth quarter and fiscal year results in 2003, the Company's net income would have been $311,000 ($0.06 earnings per share). Excluding the consolidation charge and the adjustments related to taxes that affected the fourth quarter and fiscal year results in 2002 the Company's net loss would have been $1.6 million ($0.33 loss per share).
Aldila's cash and cash equivalents increased by $3.6 million to $6.9 million as of December 31, 2003 with no outstanding borrowings.
“We are pleased with the progress our business has made during fiscal year 2003, particularly in the third and fourth quarters, which is reflected in positive performance results prior to the impairment charge. Net sales in the fourth quarter increased 7.7% and the average selling price of golf shaft units sold increased 12.7% over the 2002 fourth quarter,” said Peter R. Mathewson, Chairman and CEO, Aldila, Inc. Shipments of both value and premium golf shaft units in the 2003 fourth quarter declined 10.5% and 6.6%, respectively, for a total decline of units shipped of 8.0% compared to the comparable quarter in 2002. For the 2003 year net sales were essentially flat with the prior year. The average selling price of golf shaft units sold increased 10.9% and units shipped declined by 14.5% in the 2003 year as compared to 2002.
“Aldila's solid performance in the second half of 2003 is a result of cost reductions and the market acceptance of our new green NV wood shaft product line, which features our exclusive micro laminate technology,” Mr. Mathewson said. “The NV shaft is being embraced by virtually every first and second tier club company as an integral part of their custom fitting programs. Several of these club companies have added the shaft to custom stock programs, which validates our belief the NV shaft is being widely recognized by end users as the shaft of choice in their favorite drivers. We have added the NV hybrid shaft to our product line for the increasing number of hybrid utility clubs being introduced by club companies into the market place.”
“In our non-golf business, predominantly comprised of hockey products and composite prepregs, the business with Mission Hockey grew nicely in 2003 and they have recently introduced new products into the market for 2004. Sales of composite prepregs are expected to grow in 2004 based on the level of potential new accounts qualifying our materials,” said Mr. Mathewson.
Last week on February 11, 2004 Aldila announced that Carbon Fiber Technology LLC (“CFT”) a joint venture limited liability company owned by it and its joint venture partner, had entered into a non-binding letter of intent to sell selected assets of CFT to an independent third party with the proceeds from the transaction, if consummated, shared equally between the joint venture partners. Based upon the estimated valuation of the transaction, the Company recorded an impairment charge of $2.2 million in the fourth quarter of 2003.
The Company repurchased 43,300 shares of its common stock during the fourth quarter of 2003 at prices ranging between $3.25 and $3.50 per share. The Company repurchased 62,499 shares of common stock during the year at prices ranging between $1.70 and $3.50. These purchases were made pursuant to the Company's previously announced stock buyback program.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
2003 2002 2003 2002
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited)
NET SALES $ 9,785 $ 9,087 $ 37,807 $ 37,462
COST OF SALES 7,709 8,234 30,586 32,828
-------- -------- -------- --------
Gross profit 2,076 853 7,221 4,634
-------- -------- -------- --------
SELLING, GENERAL AND
ADMINISTRATIVE 1,346 1,684 6,989 7,334
PLANT CONSOLIDATION - 300 - 300
-------- -------- -------- --------
Operating income (loss) 730 (1,131) 232 (3,000)
-------- -------- -------- --------
OTHER EXPENSE (INCOME):
Interest expense 4 9 23 94
Other, net 5 17 48 62
Impairment of investment
in joint venture 2,220 - 2,220 -
Equity in earnings of
joint venture (41) (77) (150) (269)
-------- -------- -------- --------
LOSS BEFORE INCOME TAXES (1,458) (1,080) (1,909) (2,887)
(BENEFIT) PROVISION FOR
INCOME TAXES (183) 697 (183) (43)
-------- -------- -------- --------
NET LOSS $ (1,275) $ (1,777) $ (1,726) $ (2,844)
======== ======== ======== ========
NET LOSS PER COMMON SHARE $ (0.26) $ (0.36) $ (0.35) $ (0.57)
