ALDILA net sales were $14.3 million and net income of $2.2 million, or 42 cents fully diluted per share, for the second quarter ended June 30, 2004. This is a 44.4% increase in sales when compared to the comparable
2003 second quarter, when the Company had net sales of $9.9 million and a net loss of $471,000, or a 10 cent loss per share.
For the six months ended June 30, 2004 net sales were $29.6
million and net
income of $4.4 million, $0.87 fully diluted per share. In
the comparable
2003 six-month period the Company had net sales of $20.0
million and a net
loss of $640,000, a $0.13 loss per share.
“We continue to be pleased with our strong 2004 results.
The continuing
acceptance of our flagship NV wood shaft line by the
golfing world led
the way to a 45% sales increase versus the second quarter
of last year.
Golf shaft units shipped increased 20% and average selling
prices on these
units increased by 21% in the 2004 second quarter compared
to the same
period in 2003. In the 2004 second quarter our cash and
cash equivalents
increased by $3.3 million to $14.6 million after the payment
of our first
quarterly cash dividend of $256,000 on June 16, 2004 ($0.05
dividend per
share) and $1.4 million of proceeds from the issuance of
common stock
related to the exercise of stock options. Gross margin in
the 2004 second
quarter rose to 42% on a 295% increase in gross profit to
$6.0 million as
compared to 15% and $1.5 million in the second quarter of
2003,” said Mr.
Peter R. Mathewson, Chairman of the Board and CEO.
“Aldila continues to enjoy major success in the OEM stock
custom and custom
upgrade segments as well as in the distribution arena. The
NV shaft
line featuring our exclusive Micro Laminate Technology is
being expanded
with the introduction of our new NVS line of wood
shafts and Hybrid
shafts. NVS will be available to the OEM and distribution
segments in
August 2004. NVS, featuring a softer tip which produces
a higher
launch angle as compared to NV, is a proven performer
on the PGA Tour
with victories at Tucson and The John Deere Classic and
numerous top ten
finishes to date. Our NV Hybrid shaft model continues
to gain market
share in the expanding Hybrid/utility club market. With
the addition of
the NVS Hybrid model we will have the most complete
line of Hybrid
shaft offerings in the industry. We expect to be involved
with additional
Hybrid programs for the 2005 season,” Mr. Mathewson said.
“The Aldila NV, NVS and NV ProtoPype (release
date still to be
determined) continue to record strong weekly shaft counts
on the PGA,
Nationwide and European PGA Tours. Recently, Thomas Levet
won the Scottish
Open using the Aldila NV in all his woods. In addition,
just two weeks
after putting our new NVS in his driver, Mark Hensby
won The John Deere
Classic. On the Nationwide Tour, Aldila continues to be
the most popular
graphite shaft manufacturer and recently had over 100 wood
shafts in play
at the Scholarship American Showdown, Nationwide Tour event,
which was
approximately 25% of the total wood shafts in play. The
NV series was
the most popular Aldila shaft at the Scholarship American
Showdown event
and represented approximately 72% of Aldila's total wood
shafts in play.
At the recent PGA Club Pro Championship, Aldila dominated
the most popular
shaft manufacturer category and the NV was the most
played series of
shafts,” Mr. Mathewson continued.
“Since mid 2003 we have seen a fundamental shift take place
in the global
carbon fiber market. Demand is exceeding available supply,
which has
resulted in higher carbon fiber prices and concerns about
available supply.
We expect this situation will continue for the foreseeable
future, as
limited capacity additions have been committed. With carbon
fiber pricing
on the rise we have been forced to begin increasing our
shaft prices for
the first time in seven years,” said Mr. Mathewson.
“In this environment of rising raw material prices and tight
supply we
believe we can operate more effectively than our competitors.
We
manufacture a substantial portion of our own carbon fiber
at Carbon Fiber
Technology LLC (“CFT”), our joint venture carbon fiber facility
in Wyoming.
We currently are in the process of ramping up our production
to full
capacity at CFT to meet the demand of the two members and
will pursue
external sales with any excess carbon fiber. We also enjoy
strong, long
term relationships with the major carbon fiber producers.
We believe our
large outside purchases of carbon fiber allows us to leverage
the best
availability and pricing possible,” continued Mr. Mathewson.
“Our composite prepreg sales to third parties increased
by 177% and 150%
for the second quarter and first half, respectively, versus
the 2003
periods,” Mr. Mathewson said. “Expanding opportunities are
being realized,
as most prepregers are out of capacity or unable to increase
sales due to
fiber shortages. Carbon fiber from our CFT operation provides
an
opportunity to continue to expand our outside prepreg sales.
We are adding
a fifth prepreg line to add additional capacity and allow
for continued
sales growth. We expect to have the new line installed and
operational by
year-end,” said Mr. Mathewson.
“Our hockey business improved during the quarter from a
relatively slow
first quarter and we currently anticipate a further increase
in volume in
the current year third quarter,” 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,
2004 2003 2004 2003
-------- -------- -------- --------NET SALES $ 14,260 $ 9,863 $ 29,558 $ 20,027
COST OF SALES 8,281 8,350 17,455 16,775
-------- -------- -------- --------
Gross profit 5,979 1,513 12,103 3,252
-------- -------- -------- --------SELLING, GENERAL
AND ADMINISTRATIVE 2,329 1,976 4,764 3,902
-------- -------- -------- --------
Operating income (loss) 3,650 (463) 7,339 (650)
-------- -------- -------- --------OTHER EXPENSE (INCOME):
Interest expense - 9 - 17
Other, net 18 15 15 45
Equity in earnings
of joint venture (39) (16) (138) (72)
-------- -------- -------- --------INCOME (LOSS) BEFORE
INCOME TAXES 3,671 (471) 7,462 (640)
PROVISION FOR INCOME TAXES 1,498 - 3,015 -
-------- -------- -------- --------NET INCOME (LOSS) $ 2,173 $ (471) $ 4,447 $ (640)
======== ======== ======== ========NET INCOME (LOSS)
PER COMMON SHARE $ 0.44 $ (0.10) $ 0.90 $ (0.13)
======== ======== ======== ========NET INCOME (LOSS)
PER COMMON SHARE,
ASSUMING DILUTION $ 0.42 $ (0.10) $ 0.87 $ (0.13)
======== ======== ======== ========WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,976 4,948 4,926 4,948
======== ======== ======== ========WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON
EQUIVALENT SHARES 5,217 4,948 5,120 4,948
======== ======== ======== ========
