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 December 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 office) (Telephone Number)
Former name, address and fiscal year, if changed since last report: None
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 February 1, 1995
Common Stock $1.00 Par Value 4,238,860
Page 1 of 11 Pages<PAGE>
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INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
Page Nos.
PART I Financial Information
Consolidated Balance Sheets -
December 31, 1994 and June 30, 1994 3
Consolidated Statements of Income -
three and six month periods
ended December 31, 1994 and 1993 5
Consolidated Statements of Cash Flows -
six months ended December 31, 1994
and 1993 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II Other Information
Item 4. Submission of Matters to a Vote of
Security Holders 10
Signatures 11
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PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Unaudited Audited
Assets Dec. 31, 1994 June 30, 1994
<S> <C> <C>
Current assets:
Cash $ 4,782,000 $ 5,973,000
Short-term investments 9,117,000 9,727,000
Accounts receivable, net 35,880,000 34,715,000
Unbilled receivables 939,000 1,055,000
Inventories:
Raw materials 23,811,000 21,415,000
Work-in-process 3,519,000 2,332,000
Finished goods 6,364,000 4,994,000
Prepaid expenses 2,071,000 1,580,000
Future income tax benefits 1,326,000 1,326,000
Total current assets 87,809,000 83,117,000
____________ ____________
Property, plant and equipment, at cost 87,803,000 87,921,000
Less - Accumulated depreciation (49,981,000) (48,133,000)
37,822,000 39,788,000
____________ ____________
Other assets:
Costs in excess of net assets of
purchased businesses 4,906,000 4,972,000
Other 1,142,000 1,153,000
6,048,000 6,125,000
____________ ____________
$131,679,000 $129,030,000
____________ ____________
____________ ____________
<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 Dec. 31, 1994 June 30, 1994
<S> <C> <C>
Current liabilities:
Accounts payable $ 8,205,000 $ 8,449,000
Accrued liabilities 8,296,000 8,877,000
Current portion of long-term debt 562,000 562,000
Income taxes payable 547,000 1,777,000
Total current liabilities 17,610,000 19,665,000
____________ ____________
Long-term debt 681,000 1,103,000
____________ ____________
Other liabilities:
Deferred income taxes 4,466,000 4,466,000
Other 378,000 361,000
4,844,000 4,827,000
____________ ____________
Shareholders' equity 108,544,000 103,435,000
____________ ____________
$131,679,000 $129,030,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $52,992,000 $44,539,000 $104,755,000 $ 86,671,000
Costs and expenses:
Cost of sales 35,803,000 32,281,000 70,737,000 63,134,000
Selling, general and
administrative expenses 11,496,000 9,950,000 22,464,000 19,714,000
Interest (income) expense, net 203,000 (118,000) 105,000 (542,000)
Income before income taxes and a
change in accounting principle 5,490,000 2,426,000 11,449,000 4,365,000
Provision for income taxes 2,180,000 900,000 4,530,000 1,640,000
Income before a change in
accounting principle 3,310,000 1,526,000 6,919,000 2,725,000
Cumulative effect on prior years
of a change in accounting for
income taxes - - - 1,430,000
Net income $ 3,310,000 $ 1,526,000 $ 6,919,000 $ 4,155,000
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Per common share:
Earnings before cumulative
effect of a change in
accounting principle $.78 $.36 $1.63 $ .64
Cumulative effect on prior
years of a change in
accounting for income taxes - - - .34
Earnings per common share $.78 $.36 $1.63 $ .98
____ ____ _____ _____
____ ____ _____ _____
Cash dividends per common share $.25 $.25 $.50 $.50
Weighted average number of
common shares outstanding 4,238,362 4,226,878 4,235,767 4,224,414
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months Ended
December 31,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,919,000 $ 4,155,000
Adjustments for noncash transactions:
Depreciation and amortization 2,322,000 2,267,000
Change in deferred income taxes - (1,430,000)
Changes in assets and liabilities:
Receivables (865,000) (1,365,000)
Inventories (4,898,000) 1,049,000
Prepaid expenses and other (467,000) (1,368,000)
Accounts payable (315,000) (759,000)
Accrued liabilities and other (619,000) (468,000)
Income taxes payable (1,227,000) 574,000
Net cash provided by operating activities 850,000 2,655,000
Cash flows from investing activities:
Capital expenditures (2,582,000) (2,045,000)
Proceeds from sales of capital assets 2,403,000 44,000
Net cash used in investing activities (179,000) (2,001,000)
Cash flows from financing activities:
Repayment of long-term debt (422,000) (144,000)
Exercise of stock options 61,000 92,000
Dividends paid to shareholders (2,119,000) (2,113,000)
Net cash used in financing activities (2,480,000) (2,165,000)
Effect of exchange rate changes on cash 8,000 3,000
Net change in cash and short-term investments (1,801,000) (1,508,000)
Cash and short-term investments at beginning
of period 15,700,000 19,254,000
Cash and short-term investments at end of period $13,899,000 $17,746,000
___________ ___________
___________ ___________
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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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
December 31, 1994 and June 30, 1994, and the results of operations for the
three and six month periods ended December 31, 1994 and 1993, and the cash
flows for the six month periods ended December 31, 1994 and 1993.
The results of operations for the three and six month periods ended
December 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 benefit 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
prior year net income as the cumulative effect of a change in accounting
principle.
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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 $8,453,000 or 19.0% for the quarter ended
December 31, 1994 and by $18,084,000 or 20.9% for the six months then ended
when compared with the 1993 periods. These sales include significant
increases posted by the Commercial Products Group, up $4,947,000 or 29.1% for
the quarter and by $9,120,000 or 27.6% for the six months and by the Aluminum
Extrusion Group, up $4,121,000 or 47.5% for the quarter and $8,311,000 or
48.3% for the six months.
Cost of sales as a percentage of net sales decreased by 4.9% for the quarter
ended December 31, 1994 and by 5.3% for the six months then ended when
compared with the 1993 periods. These decreases are primarily attributable
to production cost efficiencies in the Aluminum Extrusion Group resulting from
significantly increase volume coupled with expanded margins at the Company's
domestic commercial and residential fabrication facilities associated with
increases in volume and rising prices.
Selling, general and administrative expenses increased by $1,546,000 or
15.5% for the quarter and by $2,750,000 or 13.9% for the six month period.
The increases primarily relate to additional selling and distribution costs
associated with the increased volumes of business.
The decrease in net interest income for the six month period primarily
reflects the significant decrease in the market value of interest rate
sensitive securities.
The effective tax rate for the six months ended December 31, 1994 was 39.6%
whereas the comparable period of fiscal year 1994 was 37.6%.
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Unaudited
Liquidity and Capital Resources:
Working capital increased to $70,199,000 during the six months ended
December 31, 1994, which represents an increase of $6,747,000 from June 30,
1994. The ratio of current assets to current liabilities is currently 5.0 as
compared to 4.2 as of the beginning of the year.
The Company's projected net capital expenditures for fiscal 1995 include
$7,000,000 for scheduled expansion of production capacity in addition to the
normal annual noncapitalized expenditures for replacement items. The Company
anticipates financing these expenditures through internal cash flow and cash
reserves.
The Company's line of credit remains unchanged from that noted in the June 30,
1994 annual report to shareholders.
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PART II. OTHER INFORMATION
Item 4(c). Submission of Matters to a Vote of Security Holders
On October 27, 1994, the Company held its 1994 Annual Shareholders Meeting.
Shareholders voted proxies representing 3,712,244 shares which was 87.7% of
the 4,234,762 shares outstanding on the record date. The proposed slate of
officers were elected with 3,682,618 shares and the selected independent
accountants were ratified with 3,706,792 shares.
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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 February 10, 1995 DAVID C. TREINEN
David C. Treinen
Vice President - Finance
(Principal Financial Officer)
Date February 10, 1995 MITCHELL K. FOGELMAN
Mitchell K. Fogelman
Assistant Vice President - Finance
and Controller
(Principal Accounting Officer)
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
<PERIOD-TYPE> QTR-2
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<PERIOD-END> DEC-31-1994
<CASH> 4782
<SECURITIES> 9117
<RECEIVABLES> 37842
<ALLOWANCES> (1023)
<INVENTORY> 33694
<CURRENT-ASSETS> 87809
<PP&E> 87803
<DEPRECIATION> (49981)
<TOTAL-ASSETS> 131679
<CURRENT-LIABILITIES> 17610
<BONDS> 681
<COMMON> 8124
0
0
<OTHER-SE> 100420
<TOTAL-LIABILITY-AND-EQUITY> 131679
<SALES> 52992
<TOTAL-REVENUES> 52992
<CGS> 35803
<TOTAL-COSTS> 47299
<OTHER-EXPENSES> 203
<LOSS-PROVISION> 191
<INTEREST-EXPENSE> 86
<INCOME-PRETAX> 5490
<INCOME-TAX> 2180
<INCOME-CONTINUING> 3310
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3310
<EPS-PRIMARY> .78
<EPS-DILUTED> .78
</TABLE>
