<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 0-21872
ALDILA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3645590
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
12140 COMMUNITY ROAD, POWAY, CALIFORNIA 92064
(Address of principal executive offices)
(619) 513-1801
(Registrant's Telephone No.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
As of May 11, 1999 there were 15,462,204 shares of the Registrant's common
stock, par value $0.01 per share, outstanding.
- -------------------------------------------------------------------------------
1
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ALDILA, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
March 31, 1999 and December 31, 1998 3
Consolidated Statements of Income for the three
months ended March 31, 1999 and 1998 4
Consolidated Statements of Cash Flows for the
three months ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------------ ------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 397 $ 1,972
Accounts receivable 5,905 3,421
Inventories 17,353 17,326
Deferred tax assets 4,891 5,126
Prepaid expenses and other current assets 966 1,006
------------ ------------
Total current assets 29,512 28,851
PROPERTY, PLANT AND EQUIPMENT 27,171 27,649
TRADEMARKS AND PATENTS 14,159 14,268
GOODWILL 45,841 46,198
DEFERRED FINANCING FEES 59 68
------------ ------------
TOTAL ASSETS $ 116,742 $ 117,034
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,381 $ 3,658
Accrued expenses 3,194 3,897
Income taxes payable 942 1,565
Line of credit 1,700 --
Long-term debt, current portion 8,000 4,000
------------ ------------
Total current liabilities 17,217 13,120
LONG-TERM LIABILITIES:
Long-term debt 12,000 16,000
Deferred tax liabilities 7,091 7,143
Deferred rent liabilities 487 517
------------ ------------
Total liabilities 36,795 36,780
------------ ------------
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 15,462,204 shares 155 155
Additional paid-in capital 42,627 42,627
Retained earnings 37,165 37,472
------------ ------------
Total stockholders' equity 79,947 80,254
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 116,742 $ 117,034
------------ ------------
------------ ------------
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
NET SALES $ 10,563 $ 19,117
COST OF SALES 8,274 13,277
------------ ------------
Gross profit 2,289 5,840
------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE 1,865 3,068
AMORTIZATION OF GOODWILL 357 357
------------ ------------
Operating income 67 2,415
------------ ------------
OTHER:
Interest expense 334 316
Other expense (income), net 7 (47)
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (274) 2,146
PROVISION FOR INCOME TAXES 33 1,005
------------ ------------
NET INCOME (LOSS) ($ 307) $ 1,141
------------ ------------
------------ ------------
NET INCOME (LOSS) PER COMMON SHARE - BASIC ($ 0.02) $ 0.07
------------ ------------
------------ ------------
NET INCOME (LOSS) PER COMMON SHARE,
ASSUMING DILUTION ($ 0.02) $ 0.07
------------ ------------
------------ ------------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 15,462 15,432
------------ ------------
------------ ------------
WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES 15,462 15,482
------------ ------------
------------ ------------
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
ALDILA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1999 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($ 307) $ 1,141
Adjustments to reconcile net income (loss) to net cash
provided by (used for) operating activities:
Depreciation and amortization 1,585 1,353
Loss on disposal of fixed assets 9 --
Changes in assets and liabilities:
Accounts receivable (2,484) (5,116)
Inventories (27) 1,032
Prepaid expenses and other current assets 275 88
Accounts payable (277) 1,258
Accrued expenses (703) (411)
Income taxes payable (623) 1,066
Deferred tax liabilities (52) (75)
Deferred rent liabilities (30) (27)
------------ ------------
Net cash provided by (used for) operating activities (2,634) 309
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (641) (1,096)
------------ ------------
Net cash used for investing activities (641) (1,096)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit 1,700 --
Proceeds from issuance of common stock -- 93
Tax benefit from exercise of stock options -- 6
------------ ------------
Net cash provided by financing activities 1,700 99
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,575) (688)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,972 3,046
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 397 $ 2,358
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 630 $ 613
Income taxes $ 473 $ 9
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
ALDILA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1. BASIS OF PRESENTATION
The consolidated balance sheet as of March 31, 1999 and the consolidated
statements of income and of cash flows for the three month period ended March
31, 1999 and 1998, are unaudited and reflect all adjustments of a normal
recurring nature which are, in the opinion of management, necessary for a
fair presentation of the financial position and results of operations for the
interim periods presented. The consolidated balance sheet as of December 31,
1998 was derived from the Company's audited financial statements. Operating
results for the interim periods presented are not necessarily indicative of
results to be expected for the fiscal year ending December 31, 1999. These
consolidated financial statements should be read in conjunction with the
Company's December 31, 1998 consolidated financial statements and notes
thereto.
2. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---- ----
<S> <C> <C>
Raw materials $11,039 $11,210
Work in process 3,559 3,141
Finished goods 2,755 2,975
------------ ------------
Inventories $17,353 $17,326
------------ ------------
------------ ------------
</TABLE>
3. LONG-TERM DEBT
LINE OF CREDIT - The Company has in place a $5.0 million line of credit
facility from a financial institution which is secured by substantially all of
the assets of the Company. This line of credit facility, which was initially
established in March of 1998, was amended in March of 1999 and has a maturity
date of August 30, 1999. The Company has taken advances of $1.7 million against
the line of credit through March 31, 1999. Borrowings under the line of credit
bear interest, at the election of the Company, at the bank reference rate (7.75%
at March 31, 1999) plus 0.5% or at the LIBOR rate plus 2.0%. The line of credit
requires the maintenance of certain financial ratios. As of March 31, 1999, the
Company was in compliance with all covenants under the amended line of credit
agreement.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW - BUSINESS CONDITIONS
Aldila, Inc. and subsidiaries (the "Company") is principally engaged in
the business of designing, manufacturing and marketing graphite (carbon fiber
based composite) golf club shafts, with approximately 85% of its net sales
resulting from sales to golf club manufacturers for inclusion in their clubs.
As a result, the Company's operating results are substantially dependent not
only on demand by its customers for the Company's shafts, but also on demand
by consumers for clubs including graphite shafts such as the Company's.
In 1998, the Company began production of carbon fiber at its new
facility in Evanston, Wyoming. The Company will use the output of this
facility to satisfy a significant portion of its internal demand for carbon
fiber in the manufacturing of golf club shafts. It is also producing at this
new facility carbon fiber in excess of what it will be able to use in the
manufacturing of golf club shafts. The Company intends to sell such excess,
in some cases in the form of graphite prepreg manufactured using its existing
facility in Poway, California, as well as chopped fiber to manufacturers of
other carbon fiber-based products. The Company did not realize significant
revenues from the sale of carbon fiber or graphite prepreg to third parties
through the end of 1998. Management of the Company believes that the ability
to manufacture carbon fiber will ultimately enable the Company to diversify
its sales and reduce its dependence on the overall golf club market, while
continuing to leverage the Company's existing composite materials expertise.
The new facility underwent a "shakedown" period in 1998 and therefore did not
operate at full capability during the year. Management does not expect to
operate the plant at full capacity in 1999 due to the weak demand for carbon
fiber. The full benefit of this facility to the Company is not expected to be
realized until the demand for the Company's carbon fiber increases which will
allow the Company to produce at increased volume levels resulting in lower
production costs.
Historically, graphite shafts have principally been offered by
manufacturers of higher priced, premium golf clubs, and the Company's sales
have been predominantly of premium graphite shafts. However, in recent years
the Company has realized substantial sales growth in the value priced segment
of the graphite shaft market. The Company now competes aggressively with
primarily United States based shaft manufacturers for premium graphite shafts
and also against primarily foreign based shaft manufacturers for lower priced
value shaft sales. The Company continues to maintain a broad customer base in
the premium shaft market segment. While the Company's market share in the
value segment is not as great as the premium segment, the Company has
advanced rapidly in securing new customers in this segment in recent years.
Presently, there exists substantial excess graphite shaft manufacturing
capacity both in the United States and in other countries. This has had the
effect, and is expected by management to continue to have the effect for at
least the next several years, of decreasing the selling prices of the
Company's shafts. Although the Company's gross profit margin is being
adversely affected by the reduction in selling prices, the adverse effects on
gross margin should be mitigated to some extent by efforts being taken by the
Company to control costs, including obtaining lower prices for its raw
materials, manufacturing its own graphite prepreg and increasing the
percentage
7
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of its shafts being manufactured in countries with lower labor and overhead
costs. In order to increase its capacity to manufacture shafts in a lower
cost environment, the Company opened a second shaft manufacturing facility in
Zhuhai, China during the first quarter of 1999.
In recent years, the Company's results of operations have been
materially affected on several occasions by dramatic year-to-year changes in
sales to an individual golf club manufacturer customer. Such changes can
result either from decisions by the customer to increase or decrease shaft
purchases from an alternative supplier or from the traditional volatility in
consumer demand for specific clubs. The Company believes that this volatility
is likely to continue in the future, particularly as club manufacturers seek
to gain competitive advantages through an increased rate of technological
innovation in club design. The Company's results will benefit whenever it has
an opportunity to supply shafts for the latest "hot" club and will be
adversely affected whenever sales of clubs containing Aldila shafts drop
dramatically. In particular, in recent years, a significant portion of the
Company's sales has tended to be concentrated in one or two customers,
thereby making the Company's results of operations dependent to a large
extent on continued sales to those customers. In 1998, sales to Callaway Golf
Company and Taylor Made Golf represented 26% and 15%, respectively, of the
Company's total net sales. The Company anticipates that its sales, both in
dollars and as a percentage of total sales to these two customers will
decline significantly in 1999 as compared to 1998. If these sales are not
replaced with sales to other shaft customers then such decrease could have an
adverse effect on the Company's business and operating results. The Company
believes that while it will often not be possible to predict, with any
certainty, shifts in demand for particular clubs, the Company's broad range
of club manufacturer customers should reduce in some cases the extent of the
impact on the Company's financial results.
RESULTS OF OPERATIONS
FIRST QUARTER 1999 COMPARED TO FIRST QUARTER 1998
NET SALES. Net sales decreased $8.6 million, or 44.7%, to $10.6 million
for the first quarter ended March 31, 1999 (the "1999 Period") from $19.1
million for the first quarter ended 1998 (the "1998 Period"). The decrease in
net sales was attributable to decreased shaft unit sales to the Company's
club manufacturer customers and a decrease in the average selling price of
shafts sold. Shaft unit sales decreased 42% in the 1999 Period as compared to
the 1998 Period, and the average selling price of shafts sold decreased 16%,
partly as a result of a change in product mix to lower priced value shafts.
Sales of other carbon fiber products increased $0.6 million, or 145% in the
1999 Period as compared to the 1998 Period.
The company expects that shaft sales, both in total units and in
dollars, will continue to be lower, at least for the next two quarters, than
they were in comparable periods in 1998 as a result of an overall weak market
for golf clubs the impact of which was first felt in the fourth quarter of
1998.
8
<PAGE>
GROSS PROFIT. Gross profit decreased $3.6 million, or 60.8%, to $2.3
million for the 1999 Period from $5.8 million for the 1998 Period principally
as a result of the decrease in net sales. The Company's gross profit margin
decreased to 21.7% in the 1999 Period compared to 30.5% in the 1998 Period as
a result of lower average selling prices for shafts and fixed costs being
spread over reduced operating levels in the 1999 Period. Gross profit margin
was also negatively impacted in the 1999 Period as the early production
quantities of Evanston, Wyoming produced carbon fiber was relieved from
inventories to cost of sales in the form of graphite shaft sales containing
carbon fiber produced at relatively higher production costs.
OPERATING INCOME. Operating income decreased $2.3 million, or 97.2%, to
$0.1 million for the 1999 Period from $2.4 million for the 1998 Period, and
decreased as a percentage of net sales to 0.6% in the 1999 Period compared to
12.6% in the 1998 Period. Selling, general and administrative expense
decreased $1.2 million, or 39.2%, to $1.9 million for the 1999 Period from
$3.1 million for the 1998 Period, primarily as a result of reduced
administrative expenses in the 1999 Period as compared to the 1998 Period and
the absence in the 1999 Period of $0.7 million of start-up costs related to
the carbon fiber manufacturing facility recorded in the 1998 Period.
INCOME TAXES. The Company recorded a provision for income taxes of
$33,000 in the 1999 Period primarily as a result of the effect of the
Company's non-deductible amortization of goodwill on the pretax loss. The
Company's effective tax rate in the 1998 Period was 46.8%.
LIQUIDITY AND CAPITAL RESOURCES
From November 1993 through the end of 1998, the only indebtedness of the
Company was $20.0 million in 6.13% senior notes due 2001, and the Company did
not require borrowings to finance its operations or provide working capital.
Starting in the first quarter of 1999, however, the Company has required
additional borrowings to support its working capital needs on a short term
basis and expects to continue to do so for the foreseeable future. The
Company's $20.0 million in 6.13% senior notes require semi-annual principal
payments of $4.0 million beginning September 30, 1999 through September 30,
2001. The Company has in place a $5.0 million line of credit facility from a
financial institution which is secured by substantially all the assets of the
Company. This line of credit facility has a maturity date of August 30, 1999.
The Company has outstanding borrowings of $1.7 million against the line of
credit as of March 31, 1999. Borrowings under the line of credit bear
interest, at the election of the Company, at the bank reference rate (7.75%
at March 31, 1999) plus 0.5% or at the LIBOR rate plus 2.0%. The line of
credit requires the maintenance of certain financial ratios. As of March 31,
1999, the Company was in compliance with all covenants under the amended line
of credit agreement. The Company is engaged in negotiations to extend or
replace this facility in order to provide working capital borrowing capacity
at least into the year 2000. Management anticipates that it will be able to
secure adequate financing to support its working capital needs on an on-going
basis. However, if the Company is unable to arrange the necessary financing
facilities, the Company could be unable to make its principal payments under
the 6.13% senior notes on a timely basis or otherwise be adversely affected.
9
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Cash (including cash equivalents) used for operating activities in the
1999 Period was $2.6 million compared to $0.3 million provided by operating
activities for the 1998 Period. This decrease resulted principally from the
decrease in net income and an increase in cash used for working capital items
in 1999 as compared to 1998. The Company used $0.6 million for capital
expenditures during the 1999 Period, primarily related to the completion of
construction of the new shaft manufacturing facility in China. Management
anticipates capital expenditures to approximate $1.5 million for 1999.
The Company may from time to time consider the acquisition of businesses
complementary to the Company's business. The Company could require additional
debt financing if it were to engage in a material acquisition in the future.
SEASONALITY
Because the Company's customers have historically built inventory in
anticipation of purchases by golfers in the spring and summer, the principal
selling season for golf equipment, the Company's operating results have been
affected by seasonal demand for golf clubs, which has generally resulted in
the highest sales occurring in the second quarter.
The company experienced a substantial shaft unit volume increase in 1998
over the previous year which followed a seasonal pattern where sales volume
peaked in the second quarter of the fiscal year. However, based on the
overall weak demand for golf clubs experienced in the fourth quarter of 1998
and the first quarter of 1999, the Company anticipates its net sales could
decline between 25% to 45% in the first half of 1999 versus 1998 and
accordingly, does not anticipate normal seasonal sales trends in 1999.
YEAR 2000
The Company recognizes the need to ensure its operations will not be
adversely impacted by the inability of the Company's information systems and
the information systems of its major customers and suppliers to process data
having dates on or after January 1, 2000 (the "Year 2000" issues).
The Company has evaluated its information technology ("IT") and non-IT
systems, including but not limited to computer hardware and software, alarm
systems, manufacturing equipment and software, and all other mechanical
equipment, to determine areas of exposure to potential Year 2000 issues.
Based on this evaluation, a plan was developed and implemented to identify
and resolve all of the internal Year 2000 issues. The Company has tested its
critical systems and believes them to be Year 2000 compliant. However, the
Company has not completed the testing phase for its non critical systems. The
Company believes that it will complete its Year 2000 plan by the end of the
second quarter 1999.
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Included in the company's plan is the evaluation of its external Year
2000 exposure and risks. The Company is still in the process of contacting
its major external customers and suppliers to determine their Year 2000
readiness and evaluate risk factors associated with them. The possibility
exists that the Company's manufacturing operations could be affected by
external suppliers systems that are not year 2000 compliant. Key risk areas
identified by the Company include its energy suppliers to its facility in
Evanston, Wyoming as well as electrical providers to the Company in Tijuana,
Mexico and Zhuhai, China. If one of these providers is not able to provide
the necessary requirements to the Company, there likely would not be a
reasonable alternative available to the Company and as a result the Company's
business could be negatively impacted.
To date, the Company has not spent a significant amount in identifying
and fixing Year 2000 issues and estimates it will not incur a significant
amount for remediation of its remaining Year 2000 issues. Total expenditures
are not expected to exceed $100,000. In addition, based on its efforts to
date, the Company does not anticipate any significant risk of failure leading
to material financial impact resulting from the Year 2000 issue.
Consequently, the Company does not intend to create a contingency plan.
There can be no assurance that the Company's efforts to achieve Year
2000 compliance will be successful or that third parties with whom the
Company has material relationships will be Year 2000 compliant by January 1,
2000. An interruption of the Company's ability to conduct its business due to
a Year 2000 problem with a third party, such as those noted above, could have
an adverse effect on the Company.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
With the exception of historical information (information relating to
the Company's financial condition and results of operations at historical
dates or for historical periods), the matters discussed in this Management's
Discussion and Analysis of Financial Condition and Results of Operations are
forward-looking statements that necessarily are based on certain assumptions
and are subject to certain risks and uncertainties. These forward-looking
statements are based on management's expectations as of the date hereof, that
necessarily contain certain assumptions and are subject to certain risks and
uncertainties. The Company does not undertake any responsibility to update
these statements in the future. The Company's 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
ability to produce high volumes of carbon fiber at lower cost at the
Evanston, Wyoming facility, in order to generate incremental profitable
revenues through the sale of carbon fiber products other than graphite golf
shafts and to reduce the manufacturing costs for the Company's graphite golf
club shafts using internally generated carbon fiber (ii) changes in demand by
the Company's customers for graphite golf shafts, graphite prepreg or carbon
fiber (due to factors such as changes in consumer demand for products
including the Company's products, changes in availability or prices for golf
shafts, graphite prepreg or carbon fiber, changes in inventory purchasing
practices by the Company's customers), (iii) the availability of raw
materials for the Company's manufacturing
11
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operations (principally carbon fiber and acrylic fiber) at anticipated
prices, (iv) the ability of the Company to develop new customer relationships
with users of graphite prepreg and carbon fiber, (v) risks resulting from the
increasing portion of the Company's manufacturing operations that is
conducted in Mexico and China (including the risk of political instability,
export/import regulation, currency exchange rate risk, and cultural
differences), and (vi) the Company's ability to sublease its Rancho Bernardo
facility on a timely basis and in the manner anticipated (which in turn
depends in part on the market for leased real property of this type in the
vicinity of Rancho Bernardo).
The Company's Report on Form 10-K for the year ended December 31, 1998 (the
"Form 10-K") presents a more detailed discussion of these and other risks
related to the forward looking statements in this 10-Q, in particular under
"Business Risks" in Part I, Item 1 of the Form 10-K and Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
Part I, Item 7 of the Form 10-K.
12
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11.1 - Statement re: Computation of Net Income per
Common Share
(b) Exhibit 27.1 - Financial Data Schedule
(c) Reports on Form 8-K:
No reports on Form 8-K were filed by
the Registrant during the quarter
ended March 31, 1999.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: ALDILA, INC.
May 11, 1999 /s/ Robert J. Cierzan
------------------------------------
Robert J. Cierzan
Vice President, Finance
Signing both in his capacity as
Vice President and as Chief
Accounting Officer of the Registrant
14
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EXHIBIT 11.1
ALDILA, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE - UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------------
1999 1998
------------ ------------
<S> <C> <C>
BASIC:
Net income (loss) $ (307) $ 1,141
Weighted average number of common shares outstanding 15,462 15,432
------------ ------------
Net income (loss) per common share $ (0.02) $ 0.07
------------ ------------
------------ ------------
ASSUMING DILUTION:
Net income $ (307) $ 1,141
Weighted average number of common shares outstanding 15,462 15,432
The number of shares resulting from the assumed exercise of
stock options reduced by the number of shares which could
have been purchased with the proceeds from such exercise,
using the average market price during the period - 50
------------ ------------
Weighted average number of common and
common equivalent shares 15,462 15,482
------------ ------------
Net income (loss) per common share, assuming dilution $ (0.02) $ 0.07
------------ ------------
------------ ------------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 397
<SECURITIES> 0
<RECEIVABLES> 5,905
<ALLOWANCES> 0
<INVENTORY> 17,353
<CURRENT-ASSETS> 29,512
<PP&E> 27,171
<DEPRECIATION> 0
<TOTAL-ASSETS> 116,742
<CURRENT-LIABILITIES> 17,217
<BONDS> 12,000
0
0
<COMMON> 155
<OTHER-SE> 79,792
<TOTAL-LIABILITY-AND-EQUITY> 116,742
<SALES> 10,563
<TOTAL-REVENUES> 10,563
<CGS> 8,274
<TOTAL-COSTS> 10,139
<OTHER-EXPENSES> 357<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 334
<INCOME-PRETAX> (274)
<INCOME-TAX> 33
<INCOME-CONTINUING> (307)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (307)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
<FN>
<F1> Goodwill Amortization
</FN>
</TABLE>
