Aldila, Inc., the manufacturer of graphite golf shafts, saw net sales of $11.5 million for the fourth quarter ended Dec. 31, as compared to $17.7 million a year earlier. A net loss of $1.3 million, or 26 cents per share, was recorded in the period compared to net income of $10.9 million, or $2.09, in the same quarter of 2007.


In the 2007 fourth quarter, the company realized a pretax gain of $16.3 million from the sale of its 50% interest in Carbon Fiber Technology LLC. Excluding this gain, the company's net income for the fourth quarter 2007 would have been approximately $771,000, or 15 cents per share.


For the year ended Dec.31, 2008, net sales were $53.6 million as compared to $69.1 million for the year ended Dec. 31, 2007. The company had a net loss of $2.5 million 48 cents per share for 2008 as compared to net income of $16.0 million, or $2.91 per share, in 2007.



In the 2007 fiscal year the company benefited from a pretax gain of $16.3 million from the sale of CFT. Excluding this gain the company's net income for 2007 would have been $5.7 million, or $1.04 per share.


“Our fourth quarter of 2008 showed continued weakness and reflected the slow retail environment widely reported across all market sectors, with 2008 proving to be one of the weakest years in equipment sales on record,” said Peter R. Mathewson, Chairman of the Board & CEO. We expect the first half of 2009 to be particularly challenging until some level of consumer confidence is restored and our customers revert back to normal ordering patterns. While we are not pleased with our results in 2008, we believe we have the Company positioned to be successful when the economic conditions improve.”



“With the high level of uncertainty caused by the deteriorating economic conditions,” said Mathewson, “the company has taken steps to reduce cost in 2009, including a general salary freeze, cutbacks in personnel at our Mexico facility, reduction in advertising and marketing spending, reduced travel and other cuts in selling, general and administrative expense.”


“Our Vietnam factory steadily improved its capability throughout 2008 and successfully ran significant quantities of shafts in the November – December time frame, surpassing the output from Mexico for the first time. We believe we will be able to continue to shift production from our Mexico factory to our Asian factories to reduce costs,” Mr. Mathewson continued.


“The decline in our Composite Materials sales continued in the fourth quarter of 2008, producing a full year reduction of 25% versus 2007 results,” he said. “A 10% decline in sales in our first quarter of 2008 as compared to 2007, accelerated to a 38% decline in both the third and fourth quarter of 2008 as compared to the respective quarters in 2007. This acceleration in decline was mainly attributed to the world recession, as consumers reined in their purchases of the recreational products where the bulk of our customer base is concentrated,” he said.



 

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


                                    Three months ended  Twelve months ended
                                       December 31,        December 31,
                                    ——–  ——–  ——–  ——–
                                      2008      2007      2008      2007
                                    ——–  ——–  ——–  ——–


NET SALES                           $ 11,535  $ 17,668  $ 53,606  $ 69,146
COST OF SALES                         10,214    14,230    44,040    49,181
                                    ——–  ——–  ——–  ——–
    Gross profit                       1,321     3,438     9,566    19,965
                                    ——–  ——–  ——–  ——–

SELLING, GENERAL AND ADMINISTRATIVE    2,907     2,519    13,173    12,256
                                    ——–  ——–  ——–  ——–
    Operating (loss) income           (1,586)      919    (3,607)    7,709
                                    ——–  ——–  ——–  ——–

OTHER INCOME (EXPENSE):
    Interest income                       19       194       308       910
    Interest expense                     (83)        –      (284)        –
    Gain on sale of joint
     venture                               –    16,334         –    16,334
    Other, net                            42       (26)      179       (22)
    Equity in earnings of
     joint venture                         –       155         –       435
                                    ——–  ——–  ——–  ——–

(LOSS) INCOME BEFORE INCOME TAXES     (1,608)   17,576    (3,404)   25,366
(BENEFIT) PROVISION FOR INCOME
TAXES                                  (264)    6,666      (901)    9,413
                                    ——–  ——–  ——–  ——–

NET (LOSS) INCOME                   $ (1,344) $ 10,910  $ (2,503) $ 15,953
                                    ========  ========  ========  ========


NET (LOSS) INCOME PER COMMON SHARE  $  (0.26) $   2.11  $  (0.48) $   2.94
                                    ========  ========  ========  ========

NET (LOSS) INCOME PER COMMON SHARE,
ASSUMING DILUTION                  $  (0.26) $   2.09  $  (0.48) $   2.91
                                    ========  ========  ========  ========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                    5,174     5,171     5,162     5,433
                                    ========  ========  ========  ========

WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES          5,174     5,227     5,162     5,485
                                    ========  ========  ========  ========