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 September 30, 1996 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
(Principal executive office)
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
At November 1, 1996 there were 4,261,580 shares of Common Stock outstanding.
Page 1 of 9 Pages
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INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
Page Nos.
PART I Financial Information
Consolidated Balance Sheets -
September 30, 1996 and June 30, 1996 3
Consolidated Statements of Income -
three months ended September 30,
1996 and 1995 5
Consolidated Statements of Cash Flows -
three months ended September 30,
1996 and 1995 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Signatures 9
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<TABLE>
PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Unaudited Audited
Assets Sept. 30, 1996 June 30, 1996
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,860,000 $ 13,230,000
Accounts receivable, net 33,960,000 34,498,000
Unbilled receivables 590,000 823,000
Inventories:
Raw materials 29,939,000 29,667,000
Work-in-process 1,998,000 2,252,000
Finished goods 7,835,000 7,663,000
Prepaid expenses and deposits 12,124,000 2,712,000
Future income tax benefits 1,350,000 1,350,000
Total current assets 93,656,000 92,195,000
____________ ____________
Property, plant and equipment, at cost 98,187,000 98,298,000
Accumulated depreciation (54,259,000) (53,356,000)
43,928,000 44,942,000
____________ ____________
Other assets:
Costs in excess of net assets of
purchased businesses 4,641,000 4,706,000
____________ ____________
$142,225,000 $141,843,000
____________ ____________
____________ ____________
<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 Sept. 30, 1996 June 30, 1996
<S> <C> <C>
Current liabilities:
Accounts payable $ 9,854,000 $ 9,648,000
Accrued liabilities 8,659,000 9,343,000
Current portion of long-term debt 403,000 542,000
Income taxes payable 1,355,000 766,000
Total current liabilities 20,271,000 20,299,000
____________ ____________
Other liabilities:
Deferred income taxes 4,337,000 4,337,000
Other 333,000 325,000
4,670,000 4,662,000
____________ ____________
Shareholders' equity 117,284,000 116,882,000
____________ ____________
$142,225,000 $141,843,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> <TABLE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended
September 30,
1996 1995
<S> <C> <C>
Net sales $56,928,000 $56,038,000
Costs and expenses:
Cost of sales 40,838,000 40,640,000
Selling, general and
administrative expenses 13,801,000 11,744,000
Interest (income) expense, net (97,000) (12,000)
Income before income taxes 2,386,000 3,666,000
Provision for income taxes 1,050,000 1,590,000
Net income $ 1,336,000 $ 2,076,000
___________ ___________
___________ ___________
Weighted average number of
common shares outstanding 4,260,530 4,254,520
Earnings per common share $.31 $.49
Cash dividends per common share $.25 $.25
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> <TABLE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,336,000 $ 2,076,000
Adjustments for noncash transactions:
Depreciation and amortization 1,299,000 1,181,000
Writedown of long-lived assets 888,000
Changes in assets and liabilities:
Receivables 866,000 (1,590,000)
Inventories (164,000) 809,000
Prepaid expenses and other (688,000) (801,000)
Accounts payable 174,000 2,578,000
Accrued liabilities and other (703,000) (1,203,000)
Income taxes payable 589,000 899,000
Net cash provided by operating activities 3,597,000 3,949,000
Cash flows from investing activities:
Capital expenditures (1,079,000) (1,961,000)
Proceeds from sales of capital assets 25,000 34,000
Acquisitions of businesses (8,720,000)
Changes in investments 1,766,000
Net cash used in investing activities (9,774,000) (161,000)
Cash flows from financing activities:
Repayment of long-term debt (139,000) (140,000)
Exercise of stock options 21,000 66,000
Dividends paid to shareholders (1,065,000) (1,064,000)
Net cash used in financing activities (1,183,000) (1,138,000)
Effect of exchange rate changes on cash (10,000) 10,000
Net change in cash and cash equivalents (7,370,000) 2,660,000
Cash and cash equivalents at beginning
of period 13,230,000 3,550,000
Cash and cash equivalents at end of period $ 5,860,000 $ 6,210,000
___________ ___________
___________ ___________
<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 (which consist solely of normal
recurring adjustments unless otherwise disclosed) necessary to present fairly
its financial position as of September 30, 1996 and June 30, 1996, and the
results of operations and cash flows for the three month periods ended
September 30, 1996 and 1995.
The results of operations for the three month periods ended September 30,
1996 and 1995 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.
Subsequent Events
On October 1, 1996, the Company completed the purchase of Orca Coatings Ltd.
("Orca") of Surrey, British Columbia, Canada. Orca is an architectural
coatings applicator and a distributor of storefront and architectural metal
products.
On October 1, 1996, the Company also completed the purchase of Altura
Architectural Products, Inc. ("Altura") of Houston, Texas. Altura is a
manufacturer of interior aluminum office fronts.
Both of the above purchases were made with cash from the Company's existing
cash reserves. These payments were made during September 1996 and are
included in "Deposits" on the accompanying September 30, 1996 balance sheets.
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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:
The increase in net sales for the quarter ended September 30, 1996 of
$890,000 or 1.6% from the comparable quarter of fiscal year 1996 is comprised
solely of the net increase in domestic sales. The net sales include increases
posted by the Commercial Products Group, up $1,106,000 or 4.4% and by the
Residential Products Group, up $573,000 or 4.3%. These increases were
partially offset by a $709,000 or 15.1% decrease posted by the Glass Products
Group.
The cost of sales as a percentage of net sales was 71.7% for the quarter
ended September 30, 1996 as opposed to 72.5% for the comparable prior year
period. This decrease is primarily attributable to slightly increased margins
in the Aluminum Extrusion Group resulting from decreased material costs.
Additionally, substantially all of the Company's fabrication facilities
incurred increased margins associated with declining material costs.
Selling, general and administrative expenses for the quarter were $2,057,000
higher than those of the comparable quarter of the prior year. This increase
is comprised of a $650,000 or 5.5% increase in usual costs associated with the
increased sales volume, a $519,000 increase in retrospective charges for
workers compensation insurance and a $888,000 non-recurring writedown of long-
lived assets.
The increase in net interest income for the quarter relates to the
significantly increased level of funds available for investment during the
quarter.
The effective tax rate for the quarter ended September 30, 1996 was 44.0%
whereas the comparable quarter of fiscal year 1996 was 43.4%.
Liquidity and Capital Resources:
Working capital increased to $73,385,000 during the three months ended
September 30, 1996, an increase of $1,489,000 from June 30, 1996. The ratio
of current assets to current liabilities is currently 4.6 as compared to 4.5
as of the beginning of the year.
Other than the cash purchases of the two companies effective October 1, 1996
(see the Subsequent Events note), the Company's projected capital expenditures
for fiscal 1997 and related financing remain unchanged from those described
in the June 30, 1996 Annual Report. The Company's line of credit remains
unchanged from that noted in the June 30, 1996 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 November 13, 1996 DAVID C. TREINEN
David C. Treinen
Senior Vice President - Finance
and Administration
(Principal Financial Officer)
Date November 13, 1996 MITCHELL K. FOGELMAN
Mitchell K. Fogelman
Vice President - Controller
(Principal Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 5,860
<SECURITIES> 0
<RECEIVABLES> 34,550
<ALLOWANCES> 0
<INVENTORY> 39,772
<CURRENT-ASSETS> 93,656
<PP&E> 98,187
<DEPRECIATION> 54,259
<TOTAL-ASSETS> 142,225
<CURRENT-LIABILITIES> 20,271
<BONDS> 0
0
0
<COMMON> 8,474
<OTHER-SE> 108,810
<TOTAL-LIABILITY-AND-EQUITY> 142,225
<SALES> 56,928
<TOTAL-REVENUES> 56,928
<CGS> 40,838
<TOTAL-COSTS> 54,639
<OTHER-EXPENSES> (97)
<LOSS-PROVISION> 213
<INTEREST-EXPENSE> 17
<INCOME-PRETAX> 2,386
<INCOME-TAX> 1,050
<INCOME-CONTINUING> 1,336
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,336
<EPS-PRIMARY> .31
<EPS-DILUTED> 0
</TABLE>
