Aldila Inc. net sales of $10.2 million and a net loss of $169,000 ($0.03 per share) for three months ended March 31, 2003.
In the comparable 2002 first quarter, the company had net sales of $11.4 million and a net loss of $198,000 ($0.04 per share). Per share amounts have been adjusted to reflect a one-for-three reverse stock split effective at the close of business on June 3, 2002.
At March 31, 2003, Aldila’s cash and short term investments were $3.7 million, versus $670,000 for the first quarter a year ago, and $3.3 million at the end of 2002, with no outstanding borrowings.
“Year over year, the 10.6% revenue decline is primarily attributable to a drop in value units sold to one customer,” said Peter R. Mathewson, chairman of the board and CEO. “Overall, the golf market remains slow and we do not anticipate a change in the near future.”
“Gross margin in the 2003 first quarter improved to 17.1% from 12.9% in the first quarter of 2002,” Mathewson said. “The increase in the 2003 gross margin was primarily due to the lack of a charge of $389,000 for unutilized carbon fiber capacity which was included in the 2002 first quarter.”
“We are seeing growing sales in the premium branded shaft market which also contributed to the increase in gross margin in the 2003 quarter. The increase in selling, general and administrative expenses resulted from increased spending in 2003 to expand and support future branded shaft sales. Our Aldila ONE premium wood shaft line introduced a year ago is a recent winner of the Editor’s Choice Award, Shaft Segment, for 2003 by avidgolfer magazine,” Mathewson said.
“We are also seeing strong interest on the PGA Tour in our new high performance Green Prototype wood shaft which is offered in a wide range of shaft weights,” Mathewson said. “Nick Price, a member of the Aldila Advisory Staff, is currently playing this shaft in his driver and 3 wood. We expect to launch this new line of wood shafts in the near future.”
“Our hockey program with Mission Hockey is growing and we are now providing shafts, blades and the assembly operation. Production has been ramped up to meet the demand for the increasingly popular and distinctive blue M-1 hockey stick,” said Mathewson. “Units and revenue in the first quarter pushed Mission Hockey into a top ten customer ranking at Aldila and we expect to see continued growth.”
“Our cost reduction program continued throughout the first quarter with the successful consolidation of our corporate staff into our Poway, Calif. manufacturing facility at the end of March,” said Mathewson.
ALDILA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS -- UNAUDITED
(In thousands, except per share data)
Three months
ended
March 31,
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2003 2002
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NET SALES $10,164 $11,374
COST OF SALES 8,425 9,905
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Gross profit 1,739 1,469
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SELLING, GENERAL AND ADMINISTRATIVE 1,926 1,689
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Operating loss (187) (220)
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OTHER EXPENSE (INCOME):
Interest expense 8 36
Other, net 30 35
Equity in earnings of joint venture (56) (61)
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LOSS BEFORE INCOME TAXES (169) (230)
BENEFIT FOR INCOME TAXES - (32)
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NET LOSS ($169) ($198)
