Alidla Issues Positive Earnings Report
POWAY, Calif. - The following news release, originally issued on July 24, is being repeated to reflect the addition of the company's stock symbol, (NASDAQ/NMS:ALDA). The release otherwise remains unchanged.
Aldila, Inc. (NASDAQ/NMS:ALDA) today reported net sales of $17.1 million for the second quarter ended June 30, 2000, a 35% increase compared to net sales of $12.6 million in the second quarter of 1999. Net income increased to $1.7 million or $0.10 per diluted share in the second quarter of 2000, from a loss of $72,000 or less than ($0.01) per share in the second quarter of 1999.
For the six months ended June 30, 2000 net sales increased 46% to $33.8 million compared to $23.2 million in the first six months of 1999. Net income increased to $2.2 million or $0.14 per diluted share in the first six months of 2000, from a loss of $0.4 million or ($0.02) per share in the same period of 1999.
"In the second quarter Aldila continued to see strong unit demand, particularly for premium shafts which resulted in a marked improvement in average selling price as compared to the first quarter of 2000," said Peter R. Mathewson, Chairman and CEO, Aldila, Inc. "Total shaft units shipped in the second quarter and the first six months of 2000 increased 80% and 95%, respectively, over the same 1999 periods. Aldila's twin strategies of vertical integration and the use of low-cost labor markets continue to positively affect profits."
"Fiber production at Carbon Fiber Technology, LLC, a joint venture operation in Evanston, Wyoming, continues to be strong, with a 32% volume increase in the first half of 2000, compared to the same 1999 period. Aldila's share of the fiber produced is being consumed by its prepreg operation in Poway, California, which set a record in the first six months of 2000 for number of pounds produced," Mr. Mathewson continued.
"Aldila's cash and short term investment position improved significantly to $11.9 million at the end of the second quarter, up $6.8 million or 134% versus the last quarter. At present, this balance essentially covers all of the company's $12.0 million of outstanding debt on which a $4.0 million principal payment is due at the end of September 2000," Mr. Mathewson said.
"Aldila's performance through the first six months of 2000 has shown a marked improvement," Mr. Mathewson continued. "As we enter the second half of the year, which is typically the slow season, the results of recent new product development activity for premium shafts at major OEMs could positively affect performance late in the third quarter and through the fourth quarter of 2000."
Aldila, Inc. is the golf industry's leading manufacturer of graphite golf shafts used in clubs assembled and marketed throughout the world by major golf club companies, component distributors and custom clubmakers. Aldila internally manufactures composite prepreg for its golf shaft business and external sales, and through its ownership interest in Carbon Fiber Technology LLC, externally manufactures carbon fiber for internal use.
This press release contains forward-looking statements based on our expectations as of the date of this press release. These statements necessarily reflect assumptions that we make in evaluating our expectations as to the future. They are also necessarily subject to risks and uncertainties. Our actual future performance and results could differ from that contained in or suggested by these forward-looking statements as a result of a variety of factors. Our filings with the Securities and Exchange Commission present a detailed discussion of the principal risks and uncertainties related to our future operations, in particular under "Business Risks" in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 1999, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 7 of the Form 10-K, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000. The forward-looking statements in this press release are particularly subject to the risks that
- our principal customers will not continue to increase their orders over last year;
- our principal customers will be unwilling to satisfy a significant portion of their demand with shafts manufactured in Mexico or China instead of with shafts manufactured in the United States;
- we will not achieve success marketing shafts to club assemblers based in China;
- our international operations will be adversely affected by political instability, currency fluctuations, export/import regulations and other risks typical of multi-national operations, particularly those in less developed countries, and
- our joint venture with SGL Carbon Fibers and Composites, Inc. will be unsuccessful.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, December 31,
2000 1999
-----------------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 4,445 $ 4,077
Marketable securities 7,437 4,513
Accounts receivable 6,032 4,807
Inventories 8,556 12,326
Deferred tax assets 4,010 4,010
Prepaid expenses and
other current assets 835 741
-------- --------
Total current assets 31,315 30,474
PROPERTY, PLANT AND EQUIPMENT 9,937 11,298
INVESTMENT IN JOINT VENTURE 7,316 7,181
TRADEMARKS AND PATENTS 13,615 13,833
GOODWILL 44,056 44,770
DEFERRED FINANCING FEES 191 256
OTHER ASSETS 181 191
-------- --------
TOTAL ASSETS 106,611 108,003
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LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,745 $ 3,258
Accrued expenses 2,819 3,693
Income taxes payable 2,373 167
Long-term debt, current portion 8,000 8,000
-------- --------
Total current liabilities 15,937 15,118
LONG-TERM LIABILITIES:
Long-term debt 4,000 8,000
Deferred tax liabilities 6,245 6,338
Deferred rent liabilities 44 398
-------- --------
Total liabilities 26,226 29,854
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
authorized 5,000,000 shares;
no shares issued
Common stock, $.01 par value;
authorized 30,000,000 shares;
issued and outstanding 15,462,204 shares 155 155
Additional paid-in capital 42,627 42,627
Retained earnings 37,603 35,367
-------- --------
Total stockholders' equity 80,385 78,149
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $106,611 $108,003
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ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
-----------------------------------------------
2000 1999 2000 1999
-----------------------------------------------
NET SALES $ 17,082 $ 12,612 $ 33,795 $ 23,175
COST OF SALES 11,377 9,956 25,104 18,230
-------- -------- -------- --------
Gross profit 5,705 2,656 8,691 4,945
-------- -------- -------- --------
SELLING, GENERAL AND
ADMINISTRATIVE 2,262 1,831 4,140 3,696
AMORTIZATION OF
GOODWILL 357 357 714 714
PLANT CONSOLIDATION -- -- (566) --
-------- -------- -------- --------
Operating income 3,086 468 4,403 535
-------- -------- -------- --------
OTHER EXPENSE
(INCOME):
Interest expense 229 344 517 678
Other, net (110) 6 (247) 13
Equity in earnings
of joint venture (32) -- (70) --
-------- -------- -------- --------
INCOME (LOSS)
BEFORE INCOME
TAXES 2,999 118 4,203 (156)
PROVISION
FOR INCOME TAXES 1,343 190 1,967 223
-------- -------- -------- --------
NET INCOME
(LOSS) $ 1,656 ($ 72) $ 2,236 ($ 379)
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NET INCOME (LOSS)
PER COMMON SHARE $ 0.10 $ 0.00 $ 0.14 ($ 0.02)
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NET INCOME (LOSS)
PER COMMON SHARE,
ASSUMING DILUTION $ 0.10 $ 0.00 $ 0.14 ($ 0.02)
======== ======== ======== ========
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING 15,462 15,462 15,462 15,462
======== ======== ======== ========
WEIGHTED AVERAGE
NUMBER OF COMMON
AND COMMON EQUIVALENT
SHARES 15,556 15,462 15,566 15,462
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ALDILA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In thousands)
Six months ended
June 30,
-----------------------
2000 1999
-----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 2,236 ($ 379)
Depreciation and amortization 2,077 3,133
Loss on disposal of fixed assets 19 9
Changes in working
capital items, net 3,357 (3,506)
------- -------
Net cash provided by (used for)
operating activities 7,689 (743)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (262) (744)
Investment in marketable securities (2,924) --
Investment in joint venture (135) --
------- -------
Net cash used for investing
activities (3,321) (744)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit -- 1,700
Payments under line of credit -- (1,700)
Principal payments on long-term debt (4,000) --
------- -------
Net cash used for financing
activities (4,000) --
------- -------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 368 (1,487)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 4,077 1,972
------- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 4,445 $ 485
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