Aldila Q2 net sales were $17.6 million, an increase of 1.1% compared to
sales of $17.4 million for the same period last year. Second quarter
net income was $1.7 million or 30 cents fully diluted per share. In the
comparable 2006 second quarter, the Company had net income of $2.7
million or 47 cents fully diluted per share, representing a 37% decline
in net income and a 25% decline in diluted EPS.
For
the six months ended June 30, 2007, net sales were $38.3 million and
net income of $4.4 million ($0.78 fully diluted per share). In the six
month period of 2006, net sales were $38.2 million and net income was
$7.0 million ($1.26 fully diluted per share).
“In our second
quarter 2007 sales of golf shafts and related products were flat with
the comparable quarter of 2006,” said Mr. Peter R. Mathewson, Chairman
of the Board and CEO. “Sales of composite prepreg materials in the
second quarter of 2007 were up 7% as compared to the 2006 period and
represented 16% of consolidated sales in the current quarter. The
average selling price of golf shafts sold increased 12% quarter on
quarter on a 14% decrease in unit sales. Higher material and
manufacturing costs, and lower absorption of United States golf
manufacturing costs affected our gross margin, which decreased to 34%
for the second quarter of 2007 as compared to 36% in the second quarter
of 2006. Our selling, general and administrative (SG&A) expense was
higher in the current quarter as compared to the comparable quarter of
2006 predominantly due to an incentive pay accrual in 2007 versus
reversal of the same in the 2006 quarter and general increases in other
SG&A expenses,” said Mr. Mathewson.
“We are pleased with our
sales of $17.6 million in the second quarter of 2007. We exceeded our
sales in last year's second quarter and our backlog increased to $11.6
million from $9.4 million reported a year ago, an increase of 24%. A
portion of the current backlog consists of a higher percentage of sales
orders with shipment dates extending past the next two quarters than in
the recent past,” Mr. Mathewson said.
“Our total balance of cash
and cash equivalents of $19.4 million and $1.4 million in restricted
cash, which we believe will be released by year end, remains strong
after paying $1.7 million in dividends, spending $4.4 million on our
capital spending program and spending $298,000 repurchasing 20,000
shares of Aldila common stock during the six-month period ended June
30, 2007,” said Mr. Mathewson.
“Our Vietnam plant is running
well and is busy qualifying shaft programs with select customers to
enable a steady ramp-up of production over the remainder of this year.
Several key customers have visited our facility and their response has
been very favorable,” Mr. Mathewson said.
“We have completed
production of hockey sticks during the quarter and have shut down all
hockey related operations. This will allow us to fully focus on our
profitable businesses of golf shafts and composite materials,” said Mr.
Mathewson.
“Aldila's premium shaft offerings continued to excel
at the game's highest level in the second quarter with our shafts being
used by the champions of more than half of this year's PGA Tour events,
including victories in both major championships, The Masters and The
U.S. Open. On the Nationwide Tour, Aldila shafts continue to be the
most popular for both woods and hybrid clubs every week and have been
used by the winners of nine events this year. Aldila was also the shaft
of choice for the majority of players in both woods and hybrids at the
2007 PGA Club Professional Championship. Leading amateurs are also
using Aldila shafts more than any other graphite shaft brand. At the
U.S. Public Links Championship, Aldila was the most popular wood and
hybrid shaft. Aldila was the leading shaft at the NCAA Division 1 Men's
Championship in both woods and hybrids and the leading driver shaft at
the NCAA Women's Championship,” Mr. Mathewson said.
“Our
composite materials business continues to grow with sales up 7% during
the quarter and up 19% year to date. Our prepreg facility is being
upgraded to handle the arrival of our new wide prepreg machine in the
fourth quarter of this year,” said Mr. Mathewson.
“Carbon Fiber
Technology LLC (“CFT”), our joint venture carbon fiber facility,
continued to run well during the quarter and several trials were
conducted using alternative precursors as we work to develop new
sources of supply,” Mr. Mathewson said.
“While we are seeing a
very competitive market with the related pressures on shaft pricing, we
believe we are managing it well. In summary, the Company believes it is
well positioned for the future, with our new premium shaft offerings,
the MOI and the DVS(TM) shaft family to be introduced late this year,
the expectation that our Vietnam factory will be a positive contributor
in 2008 and our wide prepreg tape line coming on line in January of
2008, which will allow us to enter new composite material markets,”
said Mr. Mathewson.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
2007 2006 2007 2006
-------- -------- --------- --------
NET SALES $ 17,615 $ 17,397 $ 38,277 $ 38,167
COST OF SALES 11,683 11,211 25,155 22,313
-------- -------- --------- --------
Gross profit 5,932 6,186 13,122 15,854
-------- -------- --------- --------
SELLING, GENERAL AND ADMINISTRATIVE 3,656 2,531 7,028 5,392
-------- -------- --------- --------
Operating income 2,276 3,655 6,094 10,462
-------- -------- --------- --------
OTHER INCOME (EXPENSE):
Interest income 250 184 449 342
Other, net (32) (4) 11 (12)
Equity in earnings of joint
venture 85 49 190 95
-------- -------- --------- --------
INCOME BEFORE INCOME TAXES 2,579 3,884 6,744 10,887
PROVISION FOR INCOME TAXES 918 1,199 2,388 3,860
-------- -------- --------- --------
NET INCOME $ 1,661 $ 2,685 $ 4,356 $ 7,027
======== ======== ========= ========
NET INCOME PER COMMON SHARE $ 0.30 $ 0.48 $ 0.79 $ 1.28
======== ======== ========= ========
NET INCOME PER COMMON SHARE,
ASSUMING DILUTION $ 0.30 $ 0.47 $ 0.78 $ 1.26
======== ======== ========= ========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 5,522 5,571 5,523 5,490
======== ======== ========= ========
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 5,575 5,653 5,586 5,571
======== ======== ========= ========
