Aldila Reports 2001 Fourth Quarter and Fiscal Year Results.Business Editors POWAY Pow·ay A community of southern California north of San Diego. It is near a large naval air base. Population: 49,100. , Calif.--(BUSINESS WIRE)--Feb. 25, 2002 Aldila, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :NMS See NetWare Management System. : ALDA ALDA Association of Late-Deafened Adults ALDA Australian Learning Disability Association ALDA Adult Learning Development Association ALDA Asociación Larense de Astronomía (Barquisimeto, Venezuela) ALDA Alabama Dietetic Association ) reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $8,322,000 and a net loss of $51,428,000 ($3.38 per share) for the fourth quarter ended December December: see month. 31, 2001, of which $49.4 million (net of taxes) was related to impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Excluding the charge, Aldila's fourth quarter net loss was $2,075,000 ($0.14 per share). In the corresponding quarter of 2000, the company reported net sales of $11,244,000 and net income of $944,000 or $0.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. For the year ended December 31, 2001, net sales were $39,561,000, compared to net sales of $55,859,000 in 2000. The company reported a net loss of $51,419,000 ($3.37 per share) in 2001, including impairment charges of $49.4 million and plant consolidation charges of $356,000 (net of taxes), compared to net income in 2000 of $3,217,000, or $0.21 per diluted share, which included $300,000 after tax recovery of previous period charges and tax benefit items of $700,000. Excluding impairment and plant consolidation charges, the company's net loss in 2001 was $1,710,000 ($0.11 per share). "Golf shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. units shipped in the 2001 fourth quarter were 10% lower than in the 2000 period, with a 17% decrease in average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. ," said Peter R. Mathewson Math·ew·son , Christopher Known as "Christy." 1880-1925. American baseball player who won 373 games as a right-handed pitcher for the New York Giants (1900-1916). , Chairman of the Board and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Fourth quarter gross margin was negatively impacted by a $700,000 increase in inventory reserves, $388,000 for un-utilized carbon fiber capacity, and as much as $485,000 related to start-up Start-up The earliest stage of a new business venture. costs and production inefficiencies resulting from the integration of additional premium shaft volume into our China operation." Commenting on Aldila's 2001 fiscal year results, Mr. Mathewson noted that, "While 2001 was a difficult year for the golf industry and Aldila in particular, we made noteworthy progress in several key areas important to our future." -- 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 in place of either the United States or Mexico; -- new product offerings, including those outside the golf industry, 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; -- 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, and -- attractive strategic alternatives will not be available to us on desirable terms. "Aldila is excited about the development of Aldila ONE, a revolutionary new concept in shaft design, which received excellent response at the PGA (1) (Professional Graphics Adapter) An early IBM PC display standard for 3D processing with 640x480x256 resolution. It was not widely used. (2) (Programmable Gate Array) See gate array and FPGA. Show in Orlando Orlando, city, United States Orlando (ôrlăn`dō), city (1990 pop. 164,693), seat of Orange co., central Fla., in a lake region; inc. 1875. In a citrus fruit and farm area, it is one of the world's most visited vacation spots. the end of January January: see month. ," continued Mr. Mathewson. "The new shaft incorporates our patent-pending Segmented Flex A development system for Flash-based applications from Adobe. Introduced in 2004 as a J2EE application, Flex compiles ActionScript code and XML-based user interface descriptions (MXML) into binary Flash files (SWF files). Technology which offers golfers The list of golfers has been split into two articles:
tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. launch control and precise performance optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. . Aldila ONE is available in a choice of 65 or 85 grams, R, S or X flexes, and Low, Mid or High Launch tip stiffness and is targeted to the high end premium distribution and OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and custom fit markets." "The continuing lack of indications for an economic upturn in 2002 provides little insight into golf industry performance. At this time, we expect gross revenues in the first quarter of 2002 to be approximately 16% below the same period in 2001," said Mr. Mathewson. Aldila will host a conference call at 8:00 A.M., PST PST Paroxysmal supraventricular tachycardia, see there , on February 26, 2002, with Pete Mathewson, Chairman and CEO; Bob Cierzan, Vice President, Finance, and Mike Rossi, Vice President, Sales and Marketing. A Webcast of the conference call can be accessed at http://www.aldila.com at least 15 minutes before the call to register and receive instructions for Webcast access. For telephone access to the conference call, dial (800) 388-8975 and request connection to the Aldila conference call. Call moderator moderator - A person, or small group of people, who manages a moderated mailing list or Usenet newsgroup. Moderators are responsible for determining which email submissions are passed on to the list or newsgroup. is Peter Mathewson. The call will be rebroadcast from 10:00 AM (PST), Tuesday, February 26, 2002, until 7:00 PM (PST), Thursday, February 28, 2002, conference ID# 232493, at (800) 428-6051 for domestic callers, and at (973) 709-2089 for international callers. Aldila manufactures high performance graphite graphite (grăf`īt), an allotropic form of carbon, known also as plumbago and black lead. It is dark gray or black, crystalline (often in the form of slippery scales), greasy, and soft, with a metallic luster. golf shafts The shaft of a golf club is the long, cylindrical piece - generally made of steel or graphite - which connects the golfer’s hands to the club head. While hundreds of different designs exist, the primary purpose of the golf shaft remains the same - to provide the player with a used in clubs assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. 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 an ownership interest in Carbon Fiber Technology LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , externally manufactures carbon fiber for internal use. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000, under "Business Risks" in Part I, Item 1, and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial 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 Form 10-Q See 10-Q. for the quarter ended September 30, 2001. 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 in place of either the United States or Mexico; -- new product offerings, including those outside the golf industry, 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; -- 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, and -- attractive strategic alternatives will not be available to us on desirable terms. For additional information about Aldila, Inc., please go to the company's Website at www.aldila.com.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000
(Unaudited) (Unaudited)
NET SALES $8,322 $11,244 $39,561 $55,859
COST OF SALES 9,300 8,976 33,304 42,257
Gross profit (loss) (978) 2,268 6,257 13,602
SELLING, GENERAL AND
ADMINISTRATIVE 1,500 1,330 6,851 7,483
IMPAIRMENT OF GOODWILL 41,932 -- 41,932 --
IMPAIRMENT OF TRADEMARKS
& PATENTS 12,963 -- 12,963 --
AMORTIZATION OF
GOODWILL 349 357 1,410 1,428
PLANT CONSOLIDATION 24 -- 593 (566)
Operating income
(loss) (57,746) 581 (57,492) 5,257
OTHER EXPENSE (INCOME):
Interest expense 33 156 375 900
Other, net 34 (139) 65 (570)
Equity in earnings of
joint venture (71) (81) (231) (220)
INCOME (LOSS) BEFORE INCOME
TAXES (57,742) 645 (57,701) 5,147
PROVISION (BENEFIT) FOR
INCOME TAXES (6,314) (299) (6,282) 1,930
NET INCOME (LOSS) ($51,428) $944 ($51,419) $3,217
NET INCOME (LOSS) PER
COMMON SHARE ($3.38) $0.06 ($3.37) $0.21
NET INCOME (LOSS) PER COMMON SHARE,
ASSUMING DILUTION ($3.38) $0.06 ($3.37) $0.21
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 15,198 15,462 15,269 15,462
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT
SHARES 15,198 15,621 15,269 15,604
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
2001 2000
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $266 $5,603
Marketable securities -- 3,104
Accounts receivable 3,492 6,693
Income taxes receivable 723 --
Inventories 11,472 11,001
Deferred tax assets 2,366 3,302
Prepaid expenses and other current
assets 595 607
Total current assets 18,914 30,310
PROPERTY, PLANT AND EQUIPMENT 7,634 9,277
INVESTMENT IN JOINT VENTURE 7,466 7,464
TRADEMARKS AND PATENTS -- 13,398
GOODWILL -- 43,342
OTHER ASSETS 387 536
TOTAL ASSETS $34,401 $104,327
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $2,921 $4,405
Accrued expenses 2,142 3,653
Income taxes payable -- 865
Long-term debt, current portion -- 8,000
Total current liabilities 5,063 16,923
LONG-TERM LIABILITIES:
Deferred tax liabilities 67 5,981
Deferred rent 74 57
Total liabilities 5,204 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
14,843,404 shares in 2001
and 15,462,204 shares in 2000 149 155
Additional paid-in capital 41,883 42,627
Retained earnings (Accumulated
deficit) (12,835) 38,584
Total stockholders' equity 29,197 81,366
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $34,401 $104,327
ALDILA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twelve months ended
December 31,
2001 2000
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($51,419) $3,217
Depreciation and amortization 3,840 4,066
Loss on disposal of fixed assets 447 56
Impairment of goodwill 41,932 --
Impairment of trademarks & patents 12,963 --
Changes in working capital items,
net (6,617) 1,954
Net cash provided by operating
activities 1,146 9,293
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment,
net (835) (893)
Proceeds from sales of marketable
securities 3,104 1,409
Investment in joint venture (2) (283)
Net cash provided by investing
activities 2,267 233
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (8,000) (8,000)
Repurchases of common stock (750) --
Net cash used for financing
activities (8,750) (8,000)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (5,337) 1,526
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 5,603 4,077
CASH AND CASH EQUIVALENTS, END OF
PERIOD $266 $5,603
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