Aldila net sales were $17.8 million, a 16.3% increase compared to the 2004 first quarter, when the company had net sales of $15.3 million. While dollar sales are climbing at the company, unit sales are actually down in the double digits. This is the result of less commodity business and more high-margin branded business in the golf shaft division.
Composite prepreg sales to third parties increased 51% versus the first quarter last year. Branded golf shaft sales exceeded last years quarter by 88%. Hockey sales were said to be slow, but the company sees them ramping up and anticipates that this will increase further in the back half.
Company-wide gross margins increased 180 basis points to 41.8% while SG&A expenses as a percentage of sales dropped 290 basis points to 13.0%. The improvement helped push Aldilas net income to $3.3 million, a 43.4% increase over $2.3 million last year. Diluted EPS was 61 cents compared to 46 cents last year.
As one of the only vertically integrated carbon-fiber manufacturers in the sporting goods industry, Aldila has successfully insulated itself from rising carbon-fiber prices in the global market.
Aldilas CFO, Bob Cierzan, pointed to several industrial applications for carbon fiber that are becoming more commercialized, like the new Airbus 8380, which is 20% carbon-fiber; Boings 787 which is 50% carbon-fiber; and wind energy applications. “Those kinds of pressures are long-term It takes a couple of years to put in new carbon fiber capacity,” said Cierzan, referring to the global shortage of carbon-fiber raw materials.
