Aldila Sales Down, Income Up
POWAY, Calif. - Aldila Inc. (NASDAQ\NMS:ALDA) Wednesday announced net sales of $14.6 million and net income of $988,000 for the first quarter ended March 31, 2001.
In the corresponding 2000 quarter, the company reported net sales of $16.7 million and net income of $580,000 after recovery of $340,000 after tax of plant consolidation charges previously recorded.
Earnings per share for the 2001 first quarter were $0.06, versus $0.04 per share in the first quarter of 2000.
"Aldila's first quarter sales, while down from the first quarter of 2000, are in line with our expectations. The first two quarters of 2000 were exceptionally strong as the industry emerged from the downturn of late 1998 and 1999, and they make for a tough comparison this year," said Peter R. Mathewson, chairman of the board and chief executive officer. "Although the average selling price of a golf shaft in the first quarter increased 13% over the same period last year, unit volume was 24% lower this year."
"The incoming order rate in the first quarter of 2001 was 47% lower than in the comparable 2000 quarter, suggesting unseasonably weak second quarter sales as customers evaluate sell-through at the retail level and try to gauge the impact of the slowing U.S. economy. Golf club companies are taking a more cautious and prudent approach to inventory control to avoid repeating the 1998-1999 over-inventory situation," Mathewson continued.
"Aldila's market share remains strong at our key accounts and we are well along with the development of new product programs, which will begin shipping in the third and fourth quarters," said Mathewson. "Our production of hockey sticks is progressing well and will begin regular shipments in this quarter."
Aldila's cash and short term investment position at March 31, 2001, was $3.7 million. During the quarter, the company repurchased 200,000 shares of its common stock at an average price of $1.95 a share and repaid $4.2 million of principal and interest on the outstanding debt. The remaining principal payment of $4 million on the debt is due at the end of the third quarter.
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 manufactures composite prepreg material 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.
Aldila will host a conference call at 8:00 A.M., PDT, on Thursday, April 19, 2001, with Pete Mathewson, Chairman and CEO, and Bob Cierzan, Vice President, Finance, to review Aldila's 2001 first quarter financial results. A live Webcast of the conference call can be accessed on the Aldila Web site at www.aldila.com at least 15 minutes prior to the call to register and receive instructions for Webcast access.
For telephone access to the conference call, dial 888/370-6127 and request connection to the Aldila conference call. Call leader is Pete Mathewson. The call will be rebroadcast at 800/642-1687, conference ID No. 755960, from 4 p.m. (PDT), Thursday, April 19, until 7 p.m., Friday, April 20 (PDT).
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 Dec. 31, 2000, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 7 of the Form 10-K. The forward-looking statements in this press release are particularly subject to the risks that:
- we will not maintain or increase our market share at our principal customers;
- demand for clubs manufactured by our principal customers will decline, thereby affecting their demand for our shafts;
- our principal customers will be unwilling to satisfy a greater portion of their demand with clubs manufactured in China or Mexico instead of the United States;
- new product offerings will not achieve success with consumers or OEM customers;
- 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
- Carbon Fiber Technology LLC will be unsuccessful as a result, for example, of internal operational problems, raw material supply problems, changes in demand for carbon fiber based products, or difficulties in operating a joint venture.
For additional information about Aldila Inc., go to the company's Web site at www.aldila.com.
Aldila Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share data)
March 31, December 31,
2001 2000
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $3,717 $5,603
Marketable securities -- 3,104
Accounts receivable 7,889 6,693
Inventories 11,684 11,001
Deferred tax assets 3,302 3,302
Prepaid expenses and other current
assets 534 607
Total current assets 27,126 30,310
PROPERTY, PLANT AND EQUIPMENT 8,931 9,277
INVESTMENT IN JOINT VENTURE 7,546 7,464
TRADEMARKS AND PATENTS 13,289 13,398
GOODWILL 42,985 43,342
OTHER ASSETS 501 536
TOTAL ASSETS $100,378 $104,327
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $4,645 $4,405
Accrued expenses 2,170 3,653
Income taxes payable 1,592 865
Long-term debt, current portion 4,000 8,000
Total current liabilities 12,407 16,923
LONG-TERM LIABILITIES:
Deferred tax liabilities 5,937 5,981
Deferred rent 61 57
Total liabilities 18,405 22,961
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 15,262,204
shares in 2001 and 15,462,204
shares in 2000 153 155
Additional paid-in capital 42,248 42,627
Retained earnings 39,572 38,584
Total stockholders' equity 81,973 81,366
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $100,378 $104,327
Aldila Inc. and Subsidiaries
Consolidated Statements of Income -- Unaudited
(In thousands, except per share data)
Three months ended
March 31,
2001 2000
NET SALES $14,582 $16,713
COST OF SALES 10,430 13,727
Gross profit 4,152 2,986
SELLING, GENERAL AND ADMINISTRATIVE 2,101 1,878
AMORTIZATION OF GOODWILL 357 357
PLANT CONSOLIDATION -- (566)
Operating income 1,694 1,317
OTHER EXPENSE (INCOME):
Interest expense 156 288
Other, net (104) (137)
Equity in earnings of joint venture (70) (38)
INCOME BEFORE INCOME TAXES 1,712 1,204
PROVISION FOR INCOME TAXES 724 624
NET INCOME $988 $580
NET INCOME PER COMMON SHARE $0.06 $0.04
NET INCOME PER COMMON SHARE,
ASSUMING DILUTION $0.06 $0.04
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 15,357 15,462
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 15,471 15,576
Aldila Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows -- Unaudited
(In thousands)
Three months ended
March 31,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $988 $580
Depreciation and amortization 983 1,073
Loss on disposal of fixed assets 15 --
Changes in working capital items,
net (2,364) (982)
Net cash provided by (used for) operating
activities (378) 671
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment,
net (149) (126)
Proceeds from sales of marketable
securities 3,104 4,513
Investment in joint venture (82) (67)
Net cash provided by investing
activities 2,873 4,320
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (4,000) (4,000)
Repurchases of common stock (381) --
Net cash (used for) financing
activities (4,381) (4,000)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,886) 991
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 5,603 4,077
CASH AND CASH EQUIVALENTS, END OF
PERIOD $3,717 $5,068