Aldila, Inc. posted net sales of $20.8 million and net income of $4.3 million, or 78 cents per fully diluted share for the first quarter. In the comparable 2005 first quarter, the company had net sales of $17.8 million and net income of $3.3 million, or 61 cents per fully diluted share.
“We are pleased with the strong results achieved in our first quarter of 2006. Driven by increased revenues from golf shafts, prepreg and hockey products, our sales increased by 17% versus the first quarter of last year. Our net income of $4.3 million or $0.78 fully diluted per share represents the best quarter the Company has had in its history. The average selling price of golf shafts increased by 4% quarter on quarter on a 7% increase in unit sales. Branded sales increased by 2% and co-branded sales increased 100% versus the 2005 quarter and together represented 57% of our golf shaft sales in the current quarter as compared to 54% in the comparable quarter of last year. Gross profit increased by $2.2 million to $9.7 million for the first quarter of 2006 as compared to $7.4 million for the first quarter of 2005. Gross margin, driven by higher average selling prices, increased to 47% for the first quarter of 2006 as compared to 42% for the same quarter of 2005. The Company's backlog of sales orders as of March 31, 2006 of $12.3 million was slightly higher than the $12.2 million at March 31, 2005. Our cash balance was $16.7 million at March 31, 2006,” said Mr. Peter R. Mathewson, Chairman of the Board and CEO.
“Our NV Pink wood shaft is enjoying very good acceptance as several OEMs are now offering it in their custom programs. We are about to begin sales of our VS Proto wood and hybrid shafts. These bright blue shafts feature Next Generation Micro Laminate Technology that incorporate carbon nano tubes with our new A65 Performance Resin System enabling the use of advanced ultra high modulus graphite fibers. The VS Proto wood shaft has been doing very well on the PGA Tour and has become our most popular shaft model in play. The VS Proto Hybrid 95 has won every Darrell Survey Hybrid shaft count this PGA season making it the number one hybrid shaft on tour. As the year progresses, we expect numerous OEM stock custom and custom upgrade programs to include the VS Proto wood and hybrid shaft. The selling price of this new super premium shaft family will be higher than our NV shafts,” said Mr. Mathewson.
“We have made the decision to expand and diversify our shaft manufacturing capacity and have selected a site in Vietnam. The new factory to be built and owned by Aldila will be located in the Vietnam Singapore Industrial Park (“VSIP”), located 17 km from Ho Chi Minh City. The VSIP is within easy reach of the city's international airport and major seaports. As a self-contained industrial park, the VSIP offers international companies a world-class manufacturing environment with reliable utilities and one-stop customer services, including an on-site customs office. Aldila has been issued an Investment License and should soon have a Land Lease Agreement in place with factory construction to begin soon after. The target is to have the factory operational by the first quarter of 2007,” Mr. Mathewson said.
“We continue to see strong third-party sales of our composite prepreg materials with an increase of 42% in sales in the first quarter 2006 versus the first quarter of 2005. Third-party prepreg sales in the 2006 quarter represented 10.2% of consolidated sales. Our new resin filmer should be operational soon and set to support the existing prepreg lines and our new prepreg tape line targeted to be installed and operational in the fourth quarter of this year. We expect to run our prepreg lines at or near full capacity throughout the year,” Mr. Mathewson said.
“Our hockey business has returned to more normal levels and we are focused on providing the very best service to our customer to support their Pro Service business that is critical to building their market share,” said Mr. Mathewson.
“Carbon Fiber Technology LLC (“CFT”), our joint venture carbon fiber plant, is running smoothly and the outlook for increased production this year versus last year is looking more and more promising. In a carbon fiber short world, CFT is providing Aldila opportunities it would not otherwise have and this should continue for the foreseeable future,” Mr. Mathewson said.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three months ended
March 31,
-------- --------
2006 2005
-------- --------
NET SALES $ 20,770 $ 17,808
COST OF SALES 11,102 10,373
-------- --------
Gross profit 9,668 7,435
-------- --------
SELLING, GENERAL AND ADMINISTRATIVE 2,861 2,322
-------- --------
Operating income 6,807 5,113
-------- --------
OTHER EXPENSE (INCOME):
Other, net (150) (72)
Equity in earnings of joint venture (46) (68)
-------- --------
INCOME BEFORE INCOME TAXES 7,003 5,253
PROVISION FOR INCOME TAXES 2,661 1,944
-------- --------
NET INCOME $ 4,342 $ 3,309
======== ========
NET INCOME PER COMMON SHARE $ 0.80 $ 0.64
======== ========
NET INCOME PER COMMON SHARE,
ASSUMING DILUTION $ 0.78 $ 0.61
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 5,408 5,142
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 5,545 5,437
======== ========
