Aldila, Inc. reported net sales of $11.8 million, down 10.8% from net sales for the year ago period. The golf company incurred a net loss of $1.1 million, or 21 cents a share, in the period. In the comparable 2007 third quarter, the company had net sales of $13.2 million and net income of $687,000, or 12 cents a share.


For the nine months ended Sept. 30, 2008, the company had net sales of $42.1 million and a net loss of $1.2 million (22 cents per share) as compared to $51.5 million and net income of $5.0 million (90 cents per share) for the nine months ended Sept. 30, 2007.
 
Golf shaft sales declined 5% in the third quarter of 2008 versus the third quarter of 2007. The average selling price of golf shafts decreased by 2% on a 3% decline in unit sales.

 

Composite material sales declined by 38% in the current quarter versus the 2007 quarter. Gross profit in the 2008 third quarter declined by 69% due to lower sales volumes of golf shafts and composite materials, lower average selling prices for golf shafts, a shift in mix of golf shaft sales to lower margin models and no contribution from Carbon Fiber Technology LLC, the company's previously owned joint venture, which contributed 11.4% to gross profit in the 2007 third quarter.

 

SG&A expense declined by 16% compared to the second quarter of 2008 but was 5% higher compared to the third quarter of 2007, primarily due to increased promotional expenditures in support of new golf product introductions. The company expects SG&A to continue to decline in the fourth quarter from the third quarter of 2008.

 

 
                                    Three months ended   Nine months ended
                                       September 30,       September 30,
                                    ——————  ——————-
                                      2008      2007      2008      2007
                                    ——–  ——–  ——–  ———


NET SALES                           $ 11,764  $ 13,201  $ 42,071  $  51,478
COST OF SALES                         10,695     9,796    33,826     34,951
                                    ——–  ——–  ——–  ———
   Gross profit                        1,069     3,405     8,245     16,527
                                    ——–  ——–  ——–  ———

SELLING, GENERAL AND ADMINISTRATIVE    2,841     2,709    10,266      9,737
                                    ——–  ——–  ——–  ———
   Operating (loss) income            (1,772)      696    (2,021)     6,790
                                    ——–  ——–  ——–  ———

OTHER INCOME (EXPENSE):
   Interest income                        27       267       289        716
   Interest expense                      (71)        –      (201)         –
   Other, net                             79        (7)      137          4
   Equity in earnings of joint
    venture                                –        90         –        280
                                    ——–  ——–  ——–  ———

(LOSS) INCOME BEFORE INCOME TAXES     (1,737)    1,046    (1,796)     7,790
(BENEFIT) PROVISION FOR INCOME
 TAXES                                  (643)      359      (637)     2,747
                                    ——–  ——–  ——–  ———

NET (LOSS) INCOME                   $ (1,094) $    687  $ (1,159) $   5,043
                                    ========  ========  ========  =========


NET (LOSS) INCOME PER COMMON SHARE  $  (0.21) $   0.12  $  (0.22) $    0.91
                                    ========  ========  ========  =========

NET (LOSS) INCOME PER COMMON SHARE,
 ASSUMING DILUTION                  $  (0.21) $   0.12  $  (0.22) $    0.90
                                    ========  ========  ========  =========

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                    5,164     5,522     5,158      5,523
                                    ========  ========  ========  =========

WEIGHTED AVERAGE NUMBER OF COMMON
 AND COMMON EQUIVALENT SHARES          5,164     5,583     5,158      5,584
                                    ========  ========  ========  =========