Aldila Swings to Third Quarter Loss on Falling Golf Sales

For the nine months ended Sept. 30,  the company's net sales were $36.2 million and a net loss of $1.4 million as compared to net sales of $42.7 million and net income of $2.7 million for the comparable period in 2010.

“The slowdown in our golf business that we experienced in the second quarter of 2011 continued into the third quarter of 2011,” said Peter R. Mathewson, Chairman and CEO. “Our golf shaft sales declined by 18% in the third quarter of 2011 as compared to 2010, which was driven by a 24% decrease in units shipped. We were down in the 2011 quarter and year to date with most of our major club company partners. While there have been some bright spots this year in the equipment industry, they have been few and far between.”

“We anticipated a stronger second half for golf shaft sales, due to new 2012 club programs beginning production during the second half of 2011, however, the startups of these programs have been slower to materialize because of launch dates being moved out or reduced forecasted demand,” Mathewson continued. “Our golf shaft sales for the first three quarters of 2011 have been approximately the same for each quarter. We anticipate that our fourth quarter shaft sales will be our largest this year. Our backlog of $8.6 million is up by 40% over the same period last year.”

The decline came despite an impressive performance of Aldila’s shafted clubs on the fairways. Aldila graphite shafts were once again the shafts of choice for the majority of players this year on Tour, according to the Darrell Survey. Their weekly wood and hybrid shaft manufacturer reports confirm Aldila as the number one graphite shaft in play at 84% of all the PGA Tour events this year and for the fourth consecutive year, Aldila shafts were the most popular wood and hybrid shafts at every event during the FedEx Cup Playoffs and Tour Championships.
As the 2011 PGA Tour season wraps up, players who used Aldila shafts dominate the year end statistics. The number one and two players in the World Golf Rankings play Aldila shafts, and the 2011 PGA Tour Money list leader, Top-10 Finishes Leader, Scoring Average Leader, Driving Accuracy Leader and Proximity to the Hole Leader all played Aldila shafts during 2011. In addition, players using Aldila shafts in their drivers won over $37 million dollars on Tour this year, said Mr. Mathewson.

Meanwhile, Aldila’s Composite Materials Division continues to thrive with an increase in sales of 45% over the comparable period last year and is up 20% through nine months versus the nine month period of 2010. While the majority of the increase in sales for the 2011 quarter was from recreational customers, 57% of the increase in sales for the nine month period was attributable to non-recreational customers. “We continue to be optimistic that we will breakthrough on one or more non-recreational programs which could have a significant positive effect on our sales,” Mathewson said.

The company remains on track to move its Victory Archery business to Vietnam by year end.

“As we begin the 2012 selling season we are very encouraged by the increased interest and excitement in the Victory brand, its flagship VAP (Victory Armour Piercing) product line and the fact that Aldila is the new owner of the brand,” Mathewson said. “Being the only vertically integrated manufacturer in carbon arrows and our lengthy experience in producing carbon based products is benefiting our sales efforts in landing new accounts.”