Global Edition

 

Aldila reports strong second quarter results

8.00am 30th July 2004 - Corporate

Golf shaft units shipped increased 20% and average selling prices on these units increased by 21% in the 2004 second quarter compared to the same period in 2003. In the global carbon fibre market demand is exceeding available supply, which has resulted in higher carbon fibre prices and concerns about future availability

Aldila Inc. (NASDAQ:NMS:ALDA) has reported net sales of $14.3 million and net income of $2.2 million, $0.42 fully diluted per share, for the second quarter ended 30th June 2004. In the comparable 2003 second quarter, the Company had net sales of $9.9 million and a net loss of $471,000, a $0.10 loss per share.
For the six months ended June 30, 2004 net sales were $29.6 million and net income of $4.4 million, $0.87 fully diluted per share. In the comparable 2003 six-month period the Company had net sales of $20.0 million and a net loss of $640,000, a $0.13 loss per share.
“We continue to be pleased with our strong 2004 results,” said Peter R. Mathewson, Chairman of the Board and CEO. “The continuing acceptance of our flagship NVठwood shaft line by the golfing world led the way to a 45% sales increase versus the second quarter of last year. Golf shaft units shipped increased 20% and average selling prices on these units increased by 21% in the 2004 second quarter compared to the same period in 2003. In the 2004 second quarter our cash and cash equivalents increased by $3.3 million to $14.6 million after the payment of our first quarterly cash dividend of $256,000 on June 16, 2004 ($0.05 dividend per share) and $1.4 million of proceeds from the issuance of common stock related to the exercise of stock options. Gross margin in the 2004 second quarter rose to 42% on a 295% increase in gross profit to $6.0 million as compared to 15% and $1.5 million in the second quarter of 2003.”
“Aldila continues to enjoy major success in the OEM stock custom and custom upgrade segments as well as in the distribution arena. The NVठshaft line featuring our exclusive Micro Laminate Technology is being expanded with the introduction of our new NVSठline of wood shafts and Hybrid shafts. NVSठwill be available to the OEM and distribution segments in August 2004. NVSà¤, featuring a softer tip which produces a higher launch angle as compared to NVà¤, is a proven performer on the PGA Tour with victories at Tucson and The John Deere Classic and numerous top ten finishes to date. Our NVठHybrid shaft model continues to gain market share in the expanding Hybrid/utility club market. With the addition of the NVSठHybrid model we will have the most complete line of Hybrid shaft offerings in the industry. We expect to be involved with additional Hybrid programs for the 2005 season,” Mr. Mathewson said.
“The Aldila NVà¤, NVSठand NV ProtoPype (release date still to be determined) continue to record strong weekly shaft counts on the PGA, Nationwide and European PGA Tours. Recently, Thomas Levet won the Scottish Open using the Aldila NVठin all his woods. In addition, just two weeks after putting our new NVSठin his driver, Mark Hensby won The John Deere Classic. On the Nationwide Tour, Aldila continues to be the most popular graphite shaft manufacturer and recently had over 100 wood shafts in play at the Scholarship American Showdown, Nationwide Tour event, which was approximately 25% of the total wood shafts in play.
The NVठseries was the most popular Aldila shaft at the Scholarship American Showdown event and represented approximately 72% of Aldila’s total wood shafts in play. At the recent PGA Club Pro Championship, Aldila dominated the most popular shaft manufacturer category and the NVठwas the most played series of shafts,” Mr. Mathewson continued.
“Since mid 2003 we have seen a fundamental shift take place in the global carbon fibre market. Demand is exceeding available supply, which has resulted in higher carbon fibre prices and concerns about available supply. We expect this situation will continue for the foreseeable future, as limited capacity additions have been committed. With carbon fibre pricing on the rise we have been forced to begin increasing our shaft prices for the first time in seven years,” said Mr. Mathewson.
“In this environment of rising raw material prices and tight supply we believe we can operate more effectively than our competitors. We manufacture a substantial portion of our own carbon fibre at Carbon Fiber Technology LLC (“CFT”), our joint venture carbon fibre facility in Wyoming. We currently are in the process of ramping up our production to full capacity at CFT to meet the demand of the two members and will pursue external sales with any excess carbon fibre. We also enjoy strong, long term relationships with the major carbon fibre producers. We believe our large outside purchases of carbon fibre allows us to leverage the best availability and pricing possible,” continued Mr. Mathewson.
“Our composite prepreg sales to third parties increased by 177% and 150% for the second quarter and first half, respectively, versus the 2003 periods,” Mr. Mathewson said. “Expanding opportunities are being realized, as most prepregers are out of capacity or unable to increase sales due to fibre shortages. Carbon fibre from our CFT operation provides an opportunity to continue to expand our outside prepreg sales. We are adding a fifth prepreg line to add additional capacity and allow for continued sales growth. We expect to have the new line installed and operational by year-end,” said Mr. Mathewson.
Aldila, Inc. is a leader among manufacturers 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 and assembles hockey sticks and blades, in addition to the manufacture of composite prepreg material for its golf shaft business and external sales. Aldila also manufactures carbon fibre for internal use through its ownership interest in CFT.
Aldila www.aldila.com.

       

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