Aldila capitalized on the popularity of their NV wood shaft line to post a 35.0% increase in net sales for the third quarter of 2004 to $10.8 million, compared to $8.0 million last year. Branded sales increased 198% while golf shaft units shipped were up 9%. Average selling prices climbed 12% for the quarter.

Gross margin was 23.4% of net sales, down 40 basis points compared to 23.8% last year, SG&A expenses were 17.6% of sales, down 420 basis points compared to 21.8% last year. The bottom line also benefited from a $2.7 million, or 52 cents per diluted per share, reduction in its provision for income taxes.

The adjustment brought net income to $3.3 million for the third quarter, an increase of $3.1 million from net income of $189,000 in 2003. Diluted EPS was or 62 cents per share, compared to four cents per share last year. Before the effect of the income tax expense adjustments, the company's net income was $533,000, or 10 cents per diluted per share.

Peter Mathewson, Aldila’s chairman and CEO noted that there was some softness in certain sectors of the market, with “some fairly high-profile product launch delays from at least one major OEM.” One can assume he was referring to Callaway’s announcement in September that some products previously considered for launch in 2004 will be delayed to 2005 to permit “a more powerful launch, with better developed marketing plans and stronger inventories.”

Aldila’s composite prepreg business, which supplies carbon fiber to bike manufacturers, continues to expand and currently represents approximately 9% of net sales compared to 5% for the same period in 2003. Carbon fiber availability from the company’s joint venture facility in Evanston, Wyoming, is enabling the company to continue third party prepreg sales expansion. According to Mathewson, carbon fiber is in short supply in today’s market and the company has begun installation of a fifth prepreg line, scheduled to be operational by the end of this year.