Aldila Reports 2001 Third Quarter and Nine Months 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)--Oct. 24, 2001 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 :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 ) today announced operating results for the third quarter and nine months ended Sept. 30, 2001. For the third quarter 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 were $6.8 million, compared to net sales of $10.8 million for the 2000 third quarter. The company had a net loss of $515,000 ($0.03 loss per share) for the third quarter of 2001, compared to net income of $37,000, rounding to $0.01 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, in the 2000 third quarter. For nine months ended Sept. 30, 2001, net sales were $31.2 million, compared to $44.6 million in the nine months of 2000. Net income for the nine months of 2001 after plant consolidation charges of $569,000 was $9,000, (breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations per share), compared to net income of $2.3 million, or $0.15 per share, after plant consolidation recoveries of $566,000 in the nine months of 2000. "The third quarter, our historically weakest quarter, was impacted by the global economic uncertainty," 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 and chief executive officer. "The incoming Incoming is a 3-D shooter developed by Rage Software and published by Interplay. The PC version was released in late 1998, and the Dreamcast version, a launch title for the console, was released in 1998 in Japan and in 1999 in the rest of the world. order rate in the third quarter was 26% below the same period of 2000 and ending backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. was at 65% of last year's third quarter-end level, suggesting fourth quarter sales could be 25% to 35% lower than the fourth quarter of 2000." "Although we are maintaining market share, shorter product life cycles and their effect on inventories have prompted our customers to be very cautious in placing orders," continued Mathewson. "Our relationship with Mission Hockey Mission is a company that makes hockey equipment for both ice hockey and roller hockey. The company is known most for the roller hockey skates that they produce. Though initially only an inline company, due to their popularity in the inline world, Mission made its foray into the has been outstanding," Mathewson said. "Both sides are pleased with the progress made in the first year of our relationship and we are discussing various programs to expand the level of business for 2002." "During the third quarter, the final payment of principal and interest totaling $4.1 million was made on an original $20 million note," said Mathewson. "Our balance sheet is currently strong with no long term debt and a current ratio of 3.6 to 1." Aldila Inc. is the leading manufacturer of 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 composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate prepreg material for its 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. business and external sales. Through an ownership interest in Carbon Fiber Technology LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , the company externally manufactures carbon fiber for internal use. Aldila will host a conference call at 8 a.m., PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT , on Thursday Thursday: see week. , Oct. 25, 2001 with Mathewson, Bob Cierzan, vice president, finance, and Mike Rossi Rossi is an Italian surname, in fact the most frequent in Italy. Due to Italian immigration to many other countries, is also very common in the United States, Brazil, Argentina, Uruguay and Chile. Rossi is the plural of Rosso, meaning the color red in Italian language. , vice president, sales and marketing, to review Aldila's 2001 third quarter and nine months financial report. A live webcast of the conference call can be accessed on the Aldila Web site at http://www.aldila.com at least 15 minutes prior to the call to register and receive instructions for access to the webcast. For telephone access to the conference call dial 800/997-8642 and request connection to the Aldila conference call. Call leader is Mathewson. The call will be rebroadcast at 800/428-6051, conference ID No. 212680, from 10 a.m. (PDT), Thursday, Oct. 25, until 7 p.m. (PDT), Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , Oct. 26, 2001. 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 Dec. 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 in "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 Sept. 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 instead of 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 the company, visit the Aldila Web site at www.aldila.com.
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
Sept. 30, Dec. 31,
2001 2000
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $948 $5,603
Marketable securities -- 3,104
Accounts receivable 3,755 6,693
Inventories 13,117 11,001
Deferred tax assets 3,302 3,302
Prepaid expenses and other current
assets 600 607
Total current assets 21,722 30,310
PROPERTY, PLANT AND EQUIPMENT 7,961 9,277
INVESTMENT IN JOINT VENTURE 7,438 7,464
TRADEMARKS AND PATENTS 13,072 13,398
GOODWILL 42,281 43,342
OTHER ASSETS 429 536
TOTAL ASSETS $92,903 $104,327
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $2,932 $4,405
Accrued expenses 2,253 3,653
Income taxes payable 184 865
Line of credit 618 --
Long-term debt, current portion -- 8,000
Total current liabilities 5,987 16,923
LONG-TERM LIABILITIES:
Deferred tax liabilities 5,850 5,981
Deferred rent 72 57
Total liabilities 11,909 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 38,593 38,584
Total stockholders' equity 80,994 81,366
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $92,903 $104,327
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME -- UNAUDITED
(In thousands, except per share data)
Three months ended Nine months ended
Sept. 30, Sept. 30,
2001 2000 2001 2000
NET SALES $6,845 $10,820 $31,239 $44,615
COST OF SALES 6,133 8,177 24,004 33,281
Gross profit 712 2,643 7,235 11,334
SELLING, GENERAL AND
ADMINISTRATIVE 1,551 2,013 5,351 6,153
AMORTIZATION OF
GOODWILL 350 357 1,061 1,071
PLANT CONSOLIDATION -- -- 569 (566)
Operating income
(loss) (1,189) 273 254 4,676
OTHER EXPENSE (INCOME):
Interest expense 92 227 342 744
Other, net (26) (184) 31 (431)
Equity in earnings of
joint venture (49) (69) (160) (139)
INCOME (LOSS) BEFORE INCOME
TAXES (1,206) 299 41 4,502
PROVISION (BENEFIT) FOR
INCOME TAXES (691) 262 32 2,229
NET INCOME (LOSS) ($515) $37 $9 $2,273
NET INCOME (LOSS) PER
COMMON SHARE ($0.03) $0.01 $0.00 $0.15
NET INCOME (LOSS) PER COMMON SHARE,
ASSUMING DILUTION ($0.03) $0.01 $0.00 $0.15
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 15,262 15,462 15,294 15,462
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT
SHARES 15,262 15,717 15,379 15,600
ALDILA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -- UNAUDITED
(In thousands)
Nine months ended
Sept. 30,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $9 $2,273
Depreciation and amortization 3,023 3,077
Loss on disposal of fixed assets 275 54
Changes in working capital items,
net (2,672) 3,411
Net cash provided by operating
activities 635 8,815
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment,
net (657) (445)
Proceeds from sales of marketable
securities 3,104 4,513
Purchase of marketable securities -- (3,052)
Investment in joint venture 26 (205)
Other -- (275)
Net cash provided by investing
activities 2,473 536
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit 750 --
Payments under line of credit (132) --
Principal payments on long-term debt (8,000) (8,000)
Repurchases of common stock (381) --
Net cash used for financing
activities (7,763) (8,000)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (4,655) 1,351
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 5,603 4,077
CASH AND CASH EQUIVALENTS, END OF
PERIOD $948 $5,428
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