Aldila posted a slight increase in second quarter net sales as Golf
products were relatively flat to last year, but composite prepreg
materials were up in the mid-singles. The company announced that it
completed production of hockey sticks in the quarter and will cease
production of hockey-related merchandise going forward.

Second quarter net sales increased 1.1% to $17.6 million from $17.4
million for the same period last year. While golf shaft sales were flat
for the quarter, average selling price increased 12%. Units, however,
decreased 14%. Composite prepreg material sales increased 7% for the
second quarter.

Backlog increased 24% to $11.6 million compared to $9.4 million one
year ago, but management noted that the current backlog has a higher
percentage of orders with shipment dates beyond the next two quarters
than in the recent past.

Gross margins decreased 200 basis points to 34% of net sales from 36%
on higher material manufacturing costs and lower absorption of the U.S.
golf manufacturing costs.

The margins decrease paired with increased SG&A expenses to cause
net income to fall 37% to $1.7 million from $2.7 million last year.
Diluted earnings per share amounted to 30 cents in the second quarter,
down from 47 cents in the year-ago period.

The company said its Vietnam plant is up and running, but will not
reach full capacity until 2008. At first, the plant is expected to
operate at a lower margin, manufacturing mainly private label,
non-brand, OEM shafts, but will eventually move into production of
higher margin branded product as the work force becomes more
experienced.