Alidila, Inc. announced net sales of $10.7 million and a net loss of $571,000, or 11 cents per share, for the three months ended September 30, 2009. Included in the loss was an income tax charge of $744,000, or 14 cents per share, related to the shutdown of the company's facility in Mexico.
“The weak retail environment for discretionary consumer products continued to impact our sales and unit volumes during the quarter. We have announced the closing of our Mexico factory and expect to have the majority of the costs associated with the closing expensed this year. We have had 19 years of successful operation in Mexico; however, the timing is right for us to move all of our shaft production to Asia. Our China and Vietnam factories are fully capable to handle all of our shaft models and provide adequate capacity to cover our foreseeable needs,” said Mr. Peter R. Mathewson, Chairman of the Board and CEO.
“Our golf sales declined by 13% in the third quarter of 2009 versus the third quarter of 2008. Our average sales price of our golf shafts increased by 1% on a 15% decrease in unit sales in the third quarter of 2009 versus the third quarter of 2008. Although we experienced a decrease in units during the quarter, our mix of shafts sold improved during the third quarter of 2009 versus the third quarter of 2008. The mix change coupled with increased manufacturing efficiencies and lower manufacturing costs were factors that drove our increases in gross profit and gross margin during the third quarter ended 2009 versus the third quarter of 2008. Our backlog as of September 30, 2009 was $10.1 million, which represents a 47% increase over our second quarter of 2009 backlog and a 4% increase versus the third quarter of 2008 backlog,” said Mr. Mathewson.
“Although 2009 has been a difficult year, it has been one of the best years ever for Aldila on the professional tours. Players using Aldila shafts in their drivers won over $38 million dollars on the PGA Tour, to date. Aldila won the Grand Slam of Shafts by winning the wood and hybrid shaft count at every major championship. In addition, Aldila was also the most popular wood and hybrid shaft at every FedEx Cup Playoff event. Aldila also had more total wood shafts in play, according to the Darrell Survey Company, than any other graphite shaft manufacturer and nearly twice as many hybrid shafts in play than any other graphite shaft manufacturer. Players using Aldila shafts won 13 events on the PGA Tour through the Turning Stone Resort Championship, which started play on October 9th. On the Nationwide Tour, Aldila again was the leading manufacturer of wood and hybrid shafts with more total shafts in play than any other graphite shaft manufacturer. In hybrids, Aldila again had nearly twice as many shafts in play than any other graphite shaft competitor. Players using Aldila shafts won 15 events on the Nationwide Tour in 2009; more than half of all the events this year on the Nationwide Tour. In addition to Tour success, Aldila was the shaft of choice at the PGA Club Professional National Championship. Leading amateurs also preferred Aldila, as the majority of players at the United States Amateur Championship played Aldila high performance shafts. Our NV�, VS Proto(TM) and DVS� shafts continue to be very popular on Tour as well as our latest offering, VooDoo�, which continues to be among the top shafts in play each week. The new Aldila RIP scheduled to be released in 2010, is receiving very positive reviews through preliminary trials on Tour, to date, with very strong favorable feedback,” Mr. Mathewson said.
“After successful testing on Tour, we have added the new NV VooDoo� to our 2010 product line. The NV VooDoo� has the same flex profile as the original NV� shaft with our patent-pending S-core Technology for even better performance while still maintaining the precise feel that made the NV� so successful. In addition, we have also begun shipping our En Fuego Series of shafts to major manufacturers and distributors. The En Fuego Series is a collection of 3 unique shaft designs all with a higher center of gravity to work best with modern club head designs. Each shaft features a unique flex profile to optimize launch and spin. All shafts in the En Fuego Series also incorporate our Micro Laminate Technology� for maximum performance and improved feel,” said Mr. Mathewson.
“Our Composite Materials business began to show signs of recovery as new accounts have been added, which drove an increase in sales of 22% versus the third quarter of 2008 and an increase of 8% from the second quarter of 2009. We are involved with numerous qualification efforts in non-recreational markets and expect to see continuing improvement in our sales as these efforts result in new business in the future quarters,” Mr. Mathewson said.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
—————— ——————
2009 2008 2009 2008
——– ——– ——– ——–
NET SALES $ 10,671 $ 11,764 $ 35,048 $ 42,071
COST OF SALES 8,153 10,695 28,285 33,826
——– ——– ——– ——–
Gross profit 2,518 1,069 6,763 8,245
——– ——– ——– ——–
SELLING, GENERAL AND ADMINISTRATIVE 2,367 2,841 7,755 10,266
PLANT CONSOLIDATION 212 – 212 –
——– ——– ——– ——–
Operating loss (61) (1,772) (1,204) (2,021)
——– ——– ——– ——–
OTHER INCOME (EXPENSE):
Interest income 3 27 12 289
Interest expense (46) (71) (148) (201)
Other, net 4 79 (76) 137
——– ——– ——– ——–
LOSS BEFORE INCOME TAXES (100) (1,737) (1,416) (1,796)
PROVISION (BENEFIT) INCOME TAXES 471 (643) (170) (637)
——– ——– ——– ——–
NET LOSS $ (571) $ (1,094) $ (1,246) $ (1,159)
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NET LOSS PER COMMON SHARE $ (0.11) $ (0.21) $ (0.24) $ (0.22)
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NET LOSS PER COMMON SHARE,
ASSUMING DILUTION $ (0.11) $ (0.21) $ (0.24) $ (0.22)
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WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 5,186 5,164 5,178 5,158
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WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 5,186 5,164 5,178 5,158
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