SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File Number 1-7256
INTERNATIONAL ALUMINUM CORPORATION
(Exact name of registrant as specified in its charter)
California 95-2385235
(State of incorporation) (I.R.S. Employer No.)
767 Monterey Pass Road, Monterey Park, California 91754 (213) 264-1670
(Address of principal executive offices) (Telephone No.)
None
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days. Yes X No
Indicate the number of shares outstanding of each of the classes of common stock
.
Class Outstanding at May 2, 1994
Common Stock $1.00 Par Value 4,230,615
Page 1 of 10 Pages
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INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
Page Nos.
PART I Financial Information
Consolidated Balance Sheets -
March 31, 1994 and June 30, 1993 3
Consolidated Statements of Income -
three and nine month periods
ended March 31, 1994 and 1993 5
Consolidated Statements of Cash Flows -
nine months ended March 31, 1994
and 1993 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Signatures 10
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<TABLE>
PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Unaudited Audited
Assets March 31, 1994 June 30, 1993
<S> <C> <C>
Current assets:
Cash $ 5,730,000 $ 4,847,000
Short-term investments 10,926,000 14,407,000
Accounts receivable, net 31,659,000 29,620,000
Unbilled receivables 1,137,000 1,441,000
Inventories:
Raw materials 19,922,000 18,424,000
Work-in-process 2,622,000 3,374,000
Finished goods 5,121,000 4,144,000
Prepaid expenses 2,082,000 1,529,000
Future income tax benefits 909,000 827,000
Total current assets 80,108,000 78,613,000
____________ ____________
Property, plant and equipment, at cost 86,341,000 84,569,000
Less - Accumulated depreciation (46,833,000) (44,528,000)
39,508,000 40,041,000
____________ ____________
Other assets:
Costs in excess of net assets of
purchased businesses 5,005,000 5,105,000
Other 1,158,000 179,000
6,163,000 5,284,000
____________ ____________
$125,779,000 $123,938,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Unaudited Audited
Liabilities and Shareholders' Equity March 31, 1994 June 30, 1993
<S> <C> <C>
Current liabilities:
Accounts payable $ 8,695,000 $ 7,860,000
Accrued liabilities 8,248,000 8,720,000
Current portion of long-term debt 562,000 422,000
Income taxes payable 817,000 164,000
Total current liabilities 18,322,000 17,166,000
____________ ____________
Long-term debt 1,242,000 1,665,000
____________ ____________
Other liabilities:
Deferred income taxes 4,747,000 5,827,000
Other 309,000 333,000
5,056,000 6,160,000
____________ ____________
Shareholders' equity 101,159,000 98,947,000
____________ ____________
$125,779,000 $123,938,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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Unaudited
<TABLE>
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $40,426,000 $33,642,000 $127,097,000 $112,537,000
Costs and expenses:
Cost of sales 27,857,000 24,537,000 90,991,000 81,561,000
Selling, general and
administrative expenses 9,741,000 10,103,000 29,455,000 28,882,000
Interest (income) expense, net 360,000 (632,000) (182,000) (960,000)
Income before income taxes and a
change in accounting principle 2,468,000 (366,000) 6,833,000 3,054,000
Provision for income taxes 940,000 (240,000) 2,580,000 1,050,000
Income before a change in
accounting principle 1,528,000 (126,000) 4,253,000 2,004,000
Cumulative effect on prior years
of a change in accounting for
income taxes - - 1,430,000 -
Net income $ 1,528,000 $ (126,000) $ 5,683,000 $ 2,004,000
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Per common share:
Earnings before cumulative
effect of a change in
accounting principle $.36 $(.03) $1.00 $.47
Cumulative effect on prior
years of a change in
accounting for income taxes - - .34 -
Earnings per common share $.36 $(.03) $1.34 $.47
____ _____ _____ ____
____ _____ _____ ____
Cash dividends per common share $.25 $.25 $.75 $.75
Weighted average number of
common shares outstanding 4,227,920 4,219,623 4,225,552 4,219,083
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> Unaudited
<TABLE>
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
March 31,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,683,000 $ 2,004,000
Adjustments for noncash transactions:
Depreciation and amortization 3,401,000 3,642,000
Change in deferred income taxes (1,162,000) -
Changes in assets and liabilities:
Receivables (2,060,000) 5,104,000
Inventories (1,818,000) (1,299,000)
Prepaid expenses and other (1,535,000) (372,000)
Accounts payable 943,000 (135,000)
Accrued liabilities and other (417,000) 1,151,000
Income taxes payable 629,000 (469,000)
Net cash provided by operating activities 3,664,000 9,626,000
Cash flows from investing activities:
Capital expenditures (3,054,000) (2,778,000)
Proceeds from sales of capital assets 112,000 422,000
Net cash used in investing activities (2,942,000) (2,356,000)
Cash flows from financing activities:
Repayment of long-term debt (283,000) (422,000)
Exercise of stock options 133,000 18,000
Dividends paid to shareholders (3,171,000) (3,165,000)
Net cash used in financing activities (3,321,000) (3,569,000)
Effect of exchange rate changes on cash 1,000 (112,000)
Net change in cash and short-term investments (2,598,000) 3,589,000
Cash and short-term investments at beginning
of period 19,254,000 17,251,000
Cash and short-term investments at end of period $16,656,000 $20,840,000
___________ ___________
___________ ___________
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (including normal recurring
accruals) necessary to present fairly its financial position as of March 31,
1994 and June 30, 1993, and the results of operations for the three and nine
month periods ended March 31, 1994 and 1993, and the cash flows for the nine
month periods ended March 31, 1994 and 1993.
The results of operations for the three and nine month periods ended
March 31, 1994 and 1993 are not necessarily indicative of the results to be
expected for the full year.
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest annual
report on Form 10-K.
Cumulative Effect On Prior Years Of A Change In Accounting Principle
In July 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (FAS 109), Accounting for Income Taxes. The adoption of
FAS 109 changes the Company's method of accounting for income taxes from the
deferred method to an asset and liability approach. Previously, the Company
deferred the past tax effects of timing differences between financial
reporting and taxable income. The asset and liability approach requires the
recognition of deferred tax liabilities and assets for the expected future
consequences of temporary differences between the carrying amounts for
financial reporting purposes and the tax bases of other assets and
liabilities. As of July 1, 1993, the Company recorded a tax credit of
$1,430,000 or $.34 per share, which represents the net decrease to the
deferred tax liability as of that date. This amount has been reflected in
current year net income as the cumulative effect of a change in accounting
principle.
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<PAGE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Significant Changes in Results of Operations:
Net sales increased by $6,784,000 or 20.2% for the quarter ended March 31,
1994 and by $14,560,000 or 12.9% for the nine months then ended when compared
with the 1993 periods. These sales are the net result of domestic sales
increases of $7,672,000 or 24.7% for the quarter and $15,873,000 or 15.5% for
the nine month period which were offset by foreign sales decreases of $888,000
or 34.5% for the quarter and by $1,313,000 or 13.1% for the nine month period.
The net sales include significant increases posted by the Aluminum Extrusion
Group, up $3,499,000 or 53.5% for the quarter and $6,538,000 or 31.6% for the
nine months; the Commercial Products Group, up $1,887,000 or 13.9% for the
quarter and $3,139,000 or 6.9% for the nine months; and by the Glass Products
Group, up $620,000 or 17.4% for the quarter and by $2,694,000 or 26.0% for the
nine months.
Cost of sales as a percentage of net sales decreased by 4.0% for the quarter
ended March 31, 1994 and by 0.9% for the nine months then ended when compared
with the 1993 periods. These decreases relate to proportional decreases in
production costs in each of the product lines due to efficiencies attained
from increases in volume. These decreases were offset during the first six
months of the fiscal year by increases in production costs at the two
California aluminum residential products facilities as a result of plant
reorganizations necessitated by the introduction of a new line of more energy
efficient products required to meet stringent energy standards mandated by the
California Energy Commission.
Selling, general and administrative expenses decreased by $362,000 or 3.6%
for the quarter and increased by $573,000 or 2.0% for the nine month period.
These expenses have risen primarily related to additional distribution costs
associated with the increased volumes of business. The increase for the
quarter was offset by a positive net adjustment to current and prior years
workers' compensation insurance costs.
The decreases in net interest income for the three and nine month periods
relate to significant decreases in the market values of interest rate
sensitive securities during the quarter ended March 31, 1994.
The effective tax rate for the nine months ended March 31, 1994 was 37.8%
whereas the comparable period of fiscal year 1993 was 34.4%.
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<PAGE> Unaudited
Liquidity and Capital Resources:
Working capital increased to $61,786,000 during the nine months ended
March 31, 1994, which represents an increase of $339,000 from June 30, 1993.
The ratio of current assets to current liabilities is currently 4.4 as
compared to 4.6 as of the beginning of the year. The Company's projected
capital expenditures and related financing remain unchanged from those
described in the June 30, 1993 annual report. The Company's line of credit
remains unchanged from that noted in the June 30, 1993 annual report to
shareholders.
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INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
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.
International Aluminum Corporation
(Registrant)
Date May 10, 1994 DAVID C. TREINEN
David C. Treinen
Vice President - Finance
(Principal Financial Officer)
Date May 10, 1994 MITCHELL K. FOGELMAN
Mitchell K. Fogelman
Assistant Vice President - Finance
and Controller
(Principal Accounting Officer)
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