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, 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 May 1, 1996 there were 4,259,980 shares of Common Stock outstanding.
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, 1996 and June 30, 1995 3
Consolidated Statements of Income -
three and nine month periods
ended March 31, 1996 and 1995 5
Consolidated Statements of Cash Flows -
nine months ended March 31, 1996
and 1995 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, 1996 June 30, 1995
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10,287,000 $ 3,550,000
Investments 2,213,000
Accounts receivable, net 32,795,000 34,877,000
Unbilled receivables 1,067,000 1,222,000
Inventories:
Raw materials 31,303,000 31,002,000
Work-in-process 2,435,000 3,463,000
Finished goods 7,201,000 7,308,000
Prepaid expenses 2,164,000 2,060,000
Future income tax benefits 1,596,000 1,596,000
Total current assets 88,848,000 87,291,000
____________ ____________
Property, plant and equipment, at cost 98,894,000 97,412,000
Accumulated depreciation (52,992,000) (52,567,000)
45,902,000 44,845,000
____________ ____________
Other assets:
Costs in excess of net assets of
purchased businesses 4,739,000 4,839,000
Other 1,129,000
4,739,000 5,968,000
____________ ____________
$139,489,000 $138,104,000
____________ ____________
____________ ____________
<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, 1996 June 30, 1995
<S> <C> <C>
Current liabilities:
Accounts payable $ 8,569,000 $ 7,820,000
Accrued liabilities 9,148,000 9,555,000
Current portion of long-term debt 561,000 423,000
Income taxes payable 509,000 1,098,000
Total current liabilities 18,787,000 18,896,000
____________ ____________
Long-term debt 119,000 542,000
____________ ____________
Other liabilities:
Deferred income taxes 4,496,000 4,496,000
Other 382,000 399,000
4,878,000 4,895,000
____________ ____________
Shareholders' equity 115,705,000 113,771,000
____________ ____________
$139,489,000 $138,104,000
____________ ____________
____________ ____________
<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 Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $49,910,000 $53,966,000 $160,302,000 $158,721,000
Costs and expenses:
Cost of sales 36,213,000 35,982,000 115,697,000 106,719,000
Selling, general and
administrative expenses 11,755,000 12,782,000 35,910,000 35,246,000
Interest (income) expense, net (58,000) (339,000) (128,000) (234,000)
Income before income taxes 2,000,000 5,541,000 8,823,000 16,990,000
Provision for income taxes 880,000 2,230,000 3,610,000 6,760,000
Net income $ 1,120,000 $ 3,311,000 $ 5,213,000 $ 10,230,000
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Weighted average number of
common shares outstanding 4,258,405 4,238,885 4,256,691 4,236,705
Earnings per common share $.26 $.78 $1.22 $2.41
Cash dividends per common share $.25 $.25 $.75 $.75
<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>
Nine Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,213,000 $10,230,000
Adjustments for noncash transactions:
Depreciation and amortization 3,902,000 3,598,000
Changes in assets and liabilities:
Receivables 2,065,000 (1,026,000)
Inventories 786,000 (11,549,000)
Prepaid expenses and other 1,014,000 (430,000)
Accounts payable 832,000 395,000
Accrued liabilities and other (374,000) ( 78,000)
Income taxes payable (590,000) (715,000)
Net cash provided by operating activities 12,848,000 425,000
Cash flows from investing activities:
Capital expenditures (5,151,000) (6,523,000)
Proceeds from sales of capital assets 192,000 2,491,000
Changes in investments 2,213,000 7,212,000
Net cash provided by (used in)
investing activities (2,746,000) 3,180,000
Cash flows from financing activities:
Repayment of long-term debt (285,000) (561,000)
Exercise of stock options 112,000 63,000
Dividends paid to shareholders (3,194,000) (3,179,000)
Net cash used in financing activities (3,367,000) (3,677,000)
Effect of exchange rate changes on cash 2,000 19,000
Net change in cash and cash equivalents 6,737,000 (53,000)
Cash and cash equivalents at beginning
of period 3,550,000 6,413,000
Cash and cash equivalents at end of period $10,287,000 $ 6,360,000
___________ ___________
___________ ___________
<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 (which consist solely of normal
recurring adjustments unless otherwise disclosed) necessary to present fairly
its financial position as of March 31, 1996 and June 30, 1995, and the results
of operations for the three and nine month periods ended March 31, 1996 and
1995, and the cash flows for the nine month periods ended March 31, 1996 and
1995.
The results of operations for the three and nine month periods ended
March 31, 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.
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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:
Although net sales for the quarter ended March 31, 1996 decreased by
$4,056,000 or 7.5% when compared with the 1995 period, the net sales for the
related nine month period posted a small increase of $1,581,000 or 1.0% over
the prior year period. The quarterly decrease primarily relates to a
$3,603,000 or 23.5% decline in sales of the Aluminum Extrusion Group. The
nine month period increase relates to a $8,448,000 or 13.0% increase posted
by the Commercial Products Group which was mostly offset by a $5,485,000 or
13.4% decrease posted by the Aluminum Extrusion Group and a $1,392,000 or 3.5%
decrease posted by the Residential Products Group.
Cost of sales as a percentage of net sales increased by 5.9% for the quarter
ended March 31, 1996 and by 5.0% for the nine months then ended when compared
with the 1995 periods. The increases are primarily attributable to
significantly decreased margins in the Aluminum Extrusion Group resulting from
lower volume and declining selling prices. Also a factor are decreased
margins in the Residential Products Group stemming from lower volume.
Selling, general and administrative expenses decreased by $1,027,000 or 8.0%
for the quarter but increased by $664,000 or 1.9% for the nine month period.
The increase for the nine month period primarily relates to additional selling
costs associated with the expansion of the commercial products satellite
warehouse program. These increased costs were partially offset as
distribution and administrative costs decreased during the third quarter
associated with the decreased volumes of business.
The decreases in net interest income for the three and nine month periods
relate to significant increases in the market values of interest rate
sensitive securities during the prior year quarter ended March 31, 1995.
The effective tax rate for the nine months ended March 31, 1996 was 40.9%
whereas the comparable period of fiscal year 1995 was 39.8%.
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<PAGE> Unaudited
Liquidity and Capital Resources:
Working capital increased to $70,061,000 during the nine months ended
March 31, 1996, which represents an increase of $1,666,000 from June 30, 1995.
The ratio of current assets to current liabilities is currently 4.7 as
compared to 4.6 as of the beginning of the year.
The Company's projected net capital expenditures for fiscal 1996 include
$6,500,000 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,
1995 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, 1996 DAVID C. TREINEN
David C. Treinen
Senior Vice President - Finance
and Administration
(Principal Financial Officer)
Date May 10, 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> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 10,287
<SECURITIES> 0
<RECEIVABLES> 33,862
<ALLOWANCES> 0
<INVENTORY> 40,939
<CURRENT-ASSETS> 88,848
<PP&E> 98,894
<DEPRECIATION> 52,992
<TOTAL-ASSETS> 139,489
<CURRENT-LIABILITIES> 18,787
<BONDS> 119
0
0
<COMMON> 8,450
<OTHER-SE> 107,255
<TOTAL-LIABILITY-AND-EQUITY> 139,489
<SALES> 160,302
<TOTAL-REVENUES> 160,302
<CGS> 115,697
<TOTAL-COSTS> 151,607
<OTHER-EXPENSES> (128)
<LOSS-PROVISION> 625
<INTEREST-EXPENSE> 88
<INCOME-PRETAX> 8,823
<INCOME-TAX> 3,610
<INCOME-CONTINUING> 5,213
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,213
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 0
</TABLE>
