Aldila, Inc. reported net sales of $13.8 million and a net loss of
$48,000, or 1 cent a share, in the first quarter ended March 31. In the
comparable 2008 first quarter, the golf company had net sales of $16.7
million and net income of $458,000, or 9 cents a share.
“The current economic environment we are faced with is challenging. We
are meeting this challenge by aggressively managing our expenses and
focusing on our working capital requirements. The company reduced its
selling, general and administration expenses ('SG&A') by 30% in the
first quarter of 2009 as compared to the comparable quarter in 2008. We
generated $2.9 million in cash from operations, as a result of actively
managing our working capital and reducing inventories by $1.5 million
during the first quarter ended March 31, 2009. We used our cash from
operations to pay down our credit facility by $2.9 million in the first
quarter of 2009,” said Peter R. Mathewson, Chairman of the Board and
CEO.
“The golf industry, as anticipated, continued to decline in the first
quarter of 2009. The National Golf Foundation club build report, which
is comprised of information provided by golf club manufacturers, is
showing a 22% decline in metal woods and an 18% decline in irons
produced through the three month period ended March 2009 versus the
same time period last year. The overall golf equipment market continues
to be impacted by weak consumer spending and a concerted effort to
reduce inventories to preserve cash and clear channels of older product
to make room for newer offerings,” Mathewson said.
“Our golf sales declined 13% compared to the first quarter 2008. Our
units were down 13% and our average selling price was flat versus a
year ago. While these numbers are not good, they are probably better
than most in our industry and we are reasonably pleased with our
results under the circumstances. Our branded and co-branded shaft sales
increased to 48% of our total golf sales, up from 32% in the comparable
quarter of last year,” said Mathewson.
“The second quarter looks particularly challenging for the Company and
we believe for the rest of the industry as a whole. We look forward to
the back half of the year as the new shaft programs which we have been
awarded are scheduled to begin shipping to support our customers' 2010
product lines,” Mathewson said.
“Our backlog has declined to $5.0 million as of March 31, 2009, roughly
half the backlog we had at the end of the first quarter last year and
reflects the combined effects of a weak retail environment, which has
produced a very conservative ordering activity from our customers as
they deal with reluctant retailers tightly managing their inventories.
In addition, the company is faced with slack demand from its composite
materials customers. Although our backlog has declined, we feel good
about our market share and believe that we have increased our market
share with major club companies for new programs scheduled to begin
this year,” said Mathewson.
“The 2009 Tour season is off to a great start for Aldila. Through the
Zurich Classic on the PGA Tour, players using Aldila shafts have won 6
events including the Mercedes-Benz Championship, WGC-Accenture Match
Play Championship and the Masters. On the Nationwide Tour, players
using Aldila shafts have won 6 of 8 events this year. We are pleased
that the Aldila VooDoo® has been used to win 6 of the 12 wins we have
had on Tour so far this year. Because of increasing usage of the
VooDoo® shaft, Aldila wood and hybrid shafts have been among the most
popular shafts at the majority of the events on both the PGA and
Nationwide Tours. We would also like to congratulate Aldila Staff
Member, Nick Price, on his first win on the Champions Tour at the
recent Outback Steakhouse Pro-Am. While Aldila is enjoying outstanding
results on Tour this year, we continue to look to the future. We feel
the Tour is the ultimate proving ground for new shaft technology and
Aldila is currently working with players to get feedback on new Aldila
products that will be released later in 2009 and 2010,” Mathewson said.
“Our Composite Materials Division sales declined by 42% compared to the
first quarter last year. Order activity from most of our customers has
declined as demand for their products has declined and they closely
manage their inventories to preserve cash. As the majority of our
customers for this segment service the recreation industry, their
businesses have also been affected by the general slowdown in the
economy. Until the general economic climate improves, we don't expect
to see significant improvement in sales to these customers,” said
Mathewson.
“We will continue to monitor our SG&A expenses and capital
expenditures and anticipate further cost cutting in our Mexico
operation as our VooDoo® technology is transferred to our China factory
in the next few months,” Mathewson said.