Aldila, Inc. and SGL Carbon Group to Form Joint Venture.

POWAY, Calif.--(BUSINESS WIRE)--July 6, 1999--

Aldila, Inc. (NASDAQ/NMS:ALDA) today announced that it has entered into an agreement in principle with SGL Carbon Group (NYSE:SGG) for SGL to acquire a 50% interest in Aldila's carbon fiber manufacturing operation.

Aldila said the SGL investment is intended to establish a joint venture headquartered at the Aldila operation in Evanston, Wyoming. In addition to supporting SGL's existing carbon fiber needs and Aldila's core golf shaft business and prepreg operation in Poway, California, the joint venture would develop, manufacture and market a variety of carbon fiber products for the recreational, industrial and aerospace markets. Financial details of the transaction, which is expected to close in the third quarter of 1999, were not disclosed.

Commenting on the agreement, Gary T. Barbera, Chairman and Chief Executive Officer of Aldila, Inc., said, "We are extremely pleased to be entering into this cooperative arrangement with SGL Carbon Group. After just one year's operation, Aldila is producing superior performance large bundle carbon fiber which supplies virtually all the internal prepreg needs of our core golf shaft business. The agreement with SGL, the world's largest producer of carbon and graphite products, brings a global presence and prestige to our carbon fiber operation."

Michael Thompson, Chairman of SGL Fibers & Composites Business Unit, added, "Our partnership with Aldila in the carbon fibers business reinforces SGL's commitment to the carbon fibers market and also fulfills our long-standing objective of establishing a manufacturing capability in North America. In addition to Aldila's excellent manufacturing operation in Evanston, Wyoming, the joint venture will extend SGL's range of polyacrylonitrile precursor raw material sources."

SGL Carbon AG is the world's largest producer of carbon and graphite products, with manufacturing operations in 13 countries and local offices in over 90 countries. 1998 revenues exceeded $1.2 billion. For additional information about SGL Carbon Group, visit the company's website on the internet at: www.sglcarbon.com.

Aldila, Inc.is the world's leading manufacturer of graphite golf shafts used in clubs assembled and marketed throughout the world by leading golf club companies, distributors and custom clubmakers. Through vertical integration the company manufactures carbon fiber and composite prepreg for its golf shaft business and for outside sales to commercial customers.

This press release contains forward looking statements with respect to the future performance of Aldila, Inc. and its planned joint venture with SGL Carbon. The 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, including (i ) the possibility that Aldila and SGL are unable to reach agreement on the final terms of the joint venture or the joint venture is not formed for any other reason, including the failure to obtain any required third party or governmental consents or a material adverse change in the business of Aldila's carbon fiber operation, (ii) the ability to produce sufficiently high volumes of high quality carbon fiber at low cost at the carbon fiber facility to meet the demands of both Aldila and SGL, (iii) the availability of raw materials for the joint venture's manufacturing operations (principally acrylic fiber) at anticipated prices, (iv) the ability to develop new customer relationships with non-golf users of graphite prepreg and carbon fiber and changes in demand for carbon fiber and carbon fiber-based products, (v) risks relating to difficulties in operating and managing the carbon fiber facility through the joint venture, including the risk of irreconcilable differences between Aldila and SGL as to the management of the joint venture, and (vi) the risk that SGL will be unable to meet its financial obligations to the joint venture. Aldila's filings with the Securities and Exchange Commission present a more detailed discussion of some of these and other risks related to the forward looking statements in this press release, in particular under "Business Risks" in Part I, Item 1 of the Aldila's Annual Report on Form 10-K for the year ended December 31, 1998 (the "Form 10-K"), "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Part I, Item 7 of the Form 10-K, and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Item 2 of the Aldila's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.