Aldila Incorporated

Aldila, Inc., based in Poway, California, was created in 1972 and continued to engage in the design, manufacture, and marketing of graphite golf club shafts primarily in the United States. The company prided itself with its golf shafts that consist mainly of carbon fiber and epoxy resins, as well as boron or fiberglass. The company also offers composite pre-pegs and other related composite materials. It has a target market in which it sells its graphite shafts such as golf club manufacturers, distributors, custom club shops, pro shops, and repair shops; and composite materials to manufacturers of composite products. The company has expanded in selling its products to England, China, Canada, Australia, Mexico, and Vietnam. Aldila, Inc. (Aldila) is a designer and manufacturer of graphite (carbon fiber-based composite) golf shafts. Aldila conducts its operations through its subsidiaries, Aldila Golf Corp. (Aldila Golf) and Aldila Materials Technology Corp (AMTC). The Companys golf shaft product lines consist of Aldila branded and co-branded products designed for its customers and custom club makers, as well as custom shafts developed in conjunction with its customers. During the year ended December 31, 2008, the Companys shafts constituted approximately 86% of the net sales for the Company. Aldila is making money some days, and other days it is losing money. So it can be a good pick depending on the investors methodology. The proceeding analysis attempts to show the corporate standing of Aldila, its relation to its officers, stockholders, and in the entire industry.

I. Corporate Governance Analysis Aldila Incorporated has a strict separation between management and ownership of the company. Miller Lloyd I the beneficial owner of the company holds 101,504 direct shares as of Nov. 19, 2008 and 220,862 by indirect shares as of Jan. 5, 2009, gained a total of 332,336 shares. The Company executive officers also own a share but lesser than the share of Lloyd I. (cf. Data provided by Edgar online at http://www.edgar-online.com/) Notice also that the beneficial owner of the company does not belong to the company key executives. Company Key Executives Rossi, Michael Cierzan, Robert Brand, Thomas Riley, Bryant Leitch, Andrew Sheldon, Michael Mathewson, Peter Bier, Scott Peter Mathewson, President, Chief Executive Officer and Chairman of the Board of Aldila, Inc also President and COO of Aldila Golf Corp. since January 2000. From 1990 until December 31, 1999, he served as Vice President of the Company (or its predecessors). Since January 1997, Mr. Mathewson has also served as President and Chief Operating Officer of Aldila Golf Corp., the Company's operating subsidiary that conducts its core golf operations. Mr. Mathewson has been with the Company (or its predecessors) since September 1973 and has held various positions, including: plant manager, production manager, shipping and receiving supervisor, and purchasing agent. 55 62 75 42 65 49 58 42 1997 2008 1997 2003 2004 2007 2000 2008 Vice President - Sales and Marketing of Aldila Golf Corp Senior Vice President - Composite Materials Director Director Director Director Chairman of the Board, President, Chief Executive Officer; President and COO of Aldila Golf Corp. CFO, Vice President - Finance, Principal Accounting Officer, Principal Financial Officer, Treasurer

Basic Compensation Option Compensation Quantity Excercisable Unexercisable Excercised

$299, 760 plus $22,530 miscellaneous = $ 400,624 annual

68,287 8,333 18,995

Value Market Value Market Value Market Value

1,207,150.00 184,493.00 578,351.00

It follows that the rest of the executive officers of Aldila, received compensation and option compensation for them to maintain their efficiency in making wealth for the company. See also that the distribution of shares owned by the companys stockholders is well taken cared and systematically organized to illustrate their share of ownership.

Percentage of Shares Held by All Insider and 5% Owners: Percentage of Shares Held by Institutional & Mutual Fund Owners: Percentage of Float Held by Institutional & Mutual Fund Owners: Number of Institutions Holding Shares:
Source: Aldila insiders at http://finance.yahoo.com/q/it?s=ALDA

31% 43% 62% 17

Aldila Incorporated received a rating from the Corporate Governance Quotient (CGQ) as of 7-May-09 better than 71.2% and 49.8% of Consumer Durables & Apparel companies. The CGQ rating is based on set of objectives and applied consistently for every company it rated. In order to facilitate analysis, the company under consideration is scored independently but relative to its market index and particular group of industry. Since the data in CGO were gathered from public opinions documents including press reviews and corporate websites, the rating is pretty well validated. It reflects the relationship of ownerships and management of the company. It also suggests that Aldila Incorporated is engaged in stock price maximization. It requires that managers take decisions that maximize stockholder wealth, that bondholders be fully protected from

expropriation, that markets be efficient and that social costs be negligible. Aldila Inc. interaction with the financial market is through its major stockholders

The companys top institutional holders are: (http://finance.yahoo.com/q/mh?s=ALDA)

Holder WC Capital Management, LLC DIMENSIONAL FUND ADVISORS INC RENAISSANCE TECHNOLOGIES, LLC OHIO-STATE TEACHERS RETIREMENT SYSTEM PNC FINANCIAL SERVICES GROUP, INC. Home Field Capital, LP Barclays Global Investors UK Holdings Ltd LSV ASSET MANAGEMENT Riley Investment Management LLC CALPERS (CALIFORNIA-PUBLIC EMPLOYEES RETIREMENT SYSTEM)

Shares 503,900 399,109 385,600 372,965 339,343 282,434 163,439 155,728 35,379 30,202

% Out 9.74 7.71 7.45 7.21 6.56 5.46 3.16 3.01 .68 .58

Value* $1,194,243 $945,888 $913,872 $883,927 $804,242 $669,368 $387,350 $369,075 $83,848 $71,578

Reported 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08

The market gets information on the firm from several web sites and linkage outlets. Online major websites offer a lot of information about Aldila Inc. Clients can also visit the companys website where all the information needed to buy shares or sell shares is regularly updated. Traders often find Aldila Inc. at Nasdaq Comp, Russell 2000, S&P 500 and in the Dow. Aldila has mortar and bricks distribution centers where clients can visit any day during store hours.

Aldila does not forget its social obligation and positive image in any society where the company engages business. It provides safe and sound working condition to its entire workforce and guarantees financial securities and reasonable compensation packages. In every country that Aldila has foreign direct investment, it gets involve with community services and environmental protection. Such moves are highly commendable and it only proves that the company is not only profit or market oriented but also ethically and morally involve in the protection of earths resources. (Source: Aldila Web site at http://www/aldila.com)

11. Stockholders analysis Holder MILLER LLOYD I RILEY BRYANT R MATHEWSON PETER R BRAND THOMAS A LEITCH ANDREW M Shares 101,504 2,924 4,100 N/A 5,872 Reported 5-Jan-09 25-Mar-08 25-Aug-08 19-Feb-08 20-Aug-07

The major stockholder of Aldila is Miller Lloyd 1 who holds the majority of the shares and considers the beneficial owner of the company. The marginal investors are the executive officers of the company, institutions, and group of companies that has insiders. The stocks vary from individual or group pension plan, mostly taxable during its waiting period but non taxable when it reaches maturity. Both large and small stocks are domestic in nature and traded often except for stock futures bought by foreign investors where their beneficiaries reside. The marginal stockholders of the company are: (http://finance.yahoo.com/q/mh?s=ALDA)

Holder DFA U.S. SMALL CAP SERIES DFA U.S. SMALL CAP VALUE SERIES DFA U.S. MICRO CAP SERIES DFA Tax Managed U.S. Targeted Value Port DFA TAX-MANAGED U.S. SMALL CAP PORTFOLIO ISHARES Russell Micro Cap (TM) Index Fund VANGUARD EXTENDED MARKET INDEX FUND DFA U.S. Targeted Value Portfolio DFA TAX MANAGED U.S. MARKETWIDE VALUE SERIES DFA U.S. Core Equity 2 Portfolio

Shares 71,403 56,447 53,836 32,734 15,402 15,393 12,499 8,764 7,385 4,618

% Out 1.38 1.09 1.04 .63 .30 .30 .24 .17 .14 .09

Value* $274,901 $217,320 $231,494 $140,756 $66,228 $86,816 $29,622 $33,741 $28,432 $19,857

Reported 31-Jan-09 31-Jan-09 31-Oct-08 31-Oct-08 31-Oct-08 31-Mar-09 31-Dec-08 31-Jan-09 31-Jan-09 31-Oct-08

Aldila is a low risk investment in the sense that the majority of the capital belongs to the owner. Top stockholders are institutional and few marginal stocks come from the company executive officers and individuals. Because the company is actively involved in production, distribution and selling of their products, there is always a buffer for return of investment and dividends. Most of the stocks are futures in the long run; the company executive officers hedge every significant threat on their investment as well as any type of risks. Aldilas stockholders are aware that returns on projects should be measured based on cash flows generated and the timing of these cash flows. It is the responsibility of the companys executive officers to protect and maintain the stock holders wealth. It is one of their primary duties that company executives are enormously compensated.