SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1997 Commission File Number 1-7256
INTERNATIONAL ALUMINUM CORPORATION
(Exact name of Registrant as specified in its charter)
California 95-2385235
(Incorporation) (I.R.S. Employer No.)
767 Monterey Pass Road
Monterey Park, California 91754
(213) 264-1670
(Principal executive office)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Names of Exchanges on Which Registered
Common Stock ($1.00 Par Value) New York Stock Exchange
Pacific Exchange
Securities registered pursuant to Section 12(g) of the Act: 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
At September 10, 1997 there were 4,267,619 shares of Registrant's Common
Stock outstanding. The aggregate market value of shares held by non-
affiliates was $62,389,175 based on the New York Stock Exchange closing price
on that date.
DOCUMENTS INCORPORATED BY REFERENCE
Registrant's Annual Report to Shareholders for fiscal year ended June 30, 1997
is incorporated by reference into Parts I and II.
Registrant's Proxy Statement dated September 19, 1997 for the Annual Meeting
of Shareholders to be held on October 30, 1997 is incorporated by reference,
other than the performance graph and Compensation Committee Report, into Part
III.
<PAGE>
<PAGE> PART I
ITEM 1. BUSINESS
a. GENERAL DEVELOPMENT OF BUSINESS
International Aluminum Corporation is an integrated
manufacturer and supplier of a broad line of quality aluminum,
wood, vinyl and glass products. The Company was incorporated in
California in 1963 as successor to an aluminum fabricating
business begun in 1957 and maintains its executive offices at 767
Monterey Pass Road, Monterey Park, California 91754. The
Company's telephone number is (213) 264-1670. Reference to the
"Registrant", "International Aluminum Corporation" or the
"Company" includes International Aluminum Corporation and its
subsidiaries unless the context indicates otherwise.
b. INDUSTRY SEGMENTS, LINES OF BUSINESS AND CLASSES OF PRODUCTS
This information is included on pages 4 and 13 respectively,
of the Registrant's 1997 Annual Report to Shareholders and is
hereby incorporated by reference.
c. NARRATIVE DESCRIPTION OF BUSINESS
Processes and Products
Building Products
Residential. Residential products are fabricated from
aluminum, wood and vinyl into a broad line of horizontal sliding
windows, vertical sliding windows, casement windows, garden
windows, bay and bow windows, special configuration windows,
louvre windows, patio doors, tub enclosures, shower doors,
wardrobe mirror doors and related products. These products are
used in new residential construction and in remodeling, home
improvement and replacement.
Commercial. Commercial products are fabricated from aluminum
into curtain walls, window walls, storefront framing, entrance
doors and frames, interior doors and frames and interior wall
systems. These products are utilized in varying combinations to
produce systems used for office and commercial construction,
remodeling and tenant improvement applications.
Aluminum Extrusions. In the extrusion process, heated
aluminum billets are hydraulically forced through steel dies to
produce a piece of metal of the desired length and cross-section
shape. The extrusions are then cut and, when requested, anodized
or painted in a variety of finishes in the Company's anodizing
and painting departments.
- 1 -<PAGE>
<PAGE>
The Company currently has five extrusion presses at its
Alhambra, California plant and four presses at its plant in
Waxahachie, Texas.
Aluminum extrusions produced by the Company are used in
fabricating substantially all of its other aluminum products.
In addition, during fiscal 1997 approximately 55% of the
extrusions produced were sold to users in its own or other
industries, including manufacturers of fixtures, electronic
equipment, automotive products, sailboats, skylights and truck
bodies. The Company furnishes design services to assist its
customers in developing or better utilizing custom extrusions.
Glass Products
This product group shapes, bends, bevels, etches, polishes
and tempers bulk flat glass. The fabricated glass is primarily
utilized in the Company's store display systems and in its glass
furniture lines. Glass is also processed to customer
specifications for incorporation into their end products, which
include residential, patio and office furniture, truck and
recreational vehicle windows, light fixtures and appliances.
Sales and Distribution
The Company markets its residential products primarily to
mass merchandisers, independent dealers and distributors, with
whom the Company has no long-term contracts. Commercial building
products are marketed primarily to glazing and tenant improvement
contractors. Aluminum extrusions are marketed principally by
direct sales to other manufacturers, some of which produce
aluminum products of the Company's design. The Company's glass
products are marketed to manufacturers, distributors and
retailers.
Each of the Company's subsidiaries has its own administrative
and sales organizations. Sales are made largely in North America
and Europe.
No customer accounted for more than 5% of net sales in 1997,
and no material part of the business is dependent upon a single
customer or a few customers, the loss of any one or more of whom
would have a materially adverse effect on the business of the
Company. The Company does business on a current basis and has
no significant backlog of unfilled firm orders.
- 2 -<PAGE>
<PAGE>
Materials
The Company purchases its aluminum ingot requirements from
primary aluminum producers or spot metal brokers. Although
increased worldwide demand produces periods of tight supply of
aluminum ingot and scrap, the Company has had satisfactory
experience to date in obtaining sufficient raw materials to meet
its requirements and does not anticipate material shortages which
would significantly hamper its operations.
Flat glass is purchased from domestic glass manufacturers.
The Company has had satisfactory experience to date in obtaining
sufficient glass to meet its requirements.
The Company produces the aluminum extrusions used in the
products it manufactures and sells. Wood, vinyl, hardware,
fasteners and screening are purchased from outside sources.
Seasonality
Sales of products designed for residential and commercial
applications are subject to cyclical swings in new construction
and seasonal fluctuations due to reduced construction activity
in some marketing areas during the winter months (second and
third quarters).
Working Capital
To maintain an adequate supply of aluminum to meet customer
delivery requirements and to assure itself of a continuous
allotment of materials from its suppliers, the Company at times
carries a significant inventory of aluminum ingot. Depending on
price and availability, bulk quantities of ingot are purchased
from either primary aluminum producers or from spot metal
brokers.
The Company does not believe there are any abnormal working
capital requirements associated with any of its product groups
as merchandise is normally produced for specific customer orders
or shipped from inventory and as a general practice extended
payment terms are not granted to customers.
Patents
The Company has no material patents, either issued or
pending, and is not a party to any significant licensing
agreements.
- 3 -<PAGE>
<PAGE>
Competition and Risk
The business of International Aluminum is highly competitive.
Competition in all product lines is on the basis of price,
service and product quality. The manner and extent of such
competition depends on the product being marketed and the
relevant marketing area. In selling its residential products to
mass merchandisers, dealers and distributors, the Company faces
competition primarily from numerous fabricators. Several of the
Company's major competitors in selling commercial products and
aluminum extrusions are substantially larger, more diversified
and have greater resources than the Company.
The Company anticipates that expansion of its product lines
may result in its competing with certain of its present
customers. While the Company cannot accurately predict the
effect, if any, that such development will have on its business,
the Company anticipates no material adverse effect.
Since a substantial portion of the Company's business is
connected with residential and commercial building construction,
any significant decrease in new or remodeling construction could
adversely affect revenues. Experience has shown that high
interest rates for construction financing and residential
mortgage and home improvement loans may adversely affect
revenues.
Environmental Controls
The Company's domestic aluminum extrusion, anodizing,
painting and manufacturing facilities are subject to water and
air pollution control standards mandated by federal, state and
local law. While the Company anticipates no material capital
expenditures to meet established environmental quality control
standards, there can be no assurance that more stringent
standards will not be established which might require such
expenditures.
Employees
As of June 30, 1997, the Company had approximately 2,000
full-time employees.
d. FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
The information concerning sales, net income and identifiable
assets of foreign and domestic operations for fiscal years 1997,
1996 and 1995 is set forth in Note 9 to the consolidated
financial statements included on page 13 of the Company's 1997
Annual Report incorporated herein by reference.
- 4 -<PAGE>
<PAGE> <TABLE>
ITEM 2. PROPERTIES
The following table sets forth information concerning the
location, size and use of the Company's present facilities:
<CAPTION>
Square
Location Feet (1) Use
<S> <C> <C>
Alhambra, CA 221,000 Aluminum extrusions,
foundry & finishing
Waxahachie, TX 272,000 Aluminum extrusions,
foundry & finishing
South Gate, CA 189,000 Residential products
Hayward, CA 103,000 Residential products
Phoenix, AR 100,000 Residential products
Moreno Valley, CA 67,000 Residential products
Vernon, CA 134,000 Commercial products
Hayward, CA 14,000(L) Commercial products
Las Vegas, NV 12,000(L) Commercial products
Seattle, WA 15,000(L) Commercial products
Bedford Park, IL 81,000 Commercial products
Baltimore, MD 16,000(L) Commercial products
Boston, MA 21,000(L) Commercial products
Detroit, MI 12,000(L) Commercial products
Waxahachie, TX 159,000 Commercial products
Denver, CO 16,000(L) Commercial products
St. Louis, MO 14,000(L) Commercial products
Dallas, TX 17,000(L) Commercial products
Houston, TX 15,000(L) Commercial products
Rock Hill, SC 74,000 Commercial products
Orlando, FL 14,000(L) Commercial products
Atlanta, GA 18,000(L) Commercial products
Houston, TX 57,000 Commercial products
Dallas, Texas 15,000 Commercial products
Waxahachie, TX 60,000 Commercial products
Vancouver, B.C., Canada 23,000(L) Commercial products
Amsterdam, Netherlands 165,000 Com'l & res'l products
South Gate, CA 65,000(L) Glass fabrication
Rock Hill, SC 84,000 Glass fabrication
Monterey Park, CA 19,000(L) Executive offices
______________________
<FN>
(1) Includes manufacturing, warehouse and office space; excludes
construction in process, parking and yard storage space.
(L) Indicates leased premises.
Of the 2,072,000 square feet exhibited above, 1,781,000 square
feet are owned by the Company. The balance of 291,000 square feet
is leased under agreements expiring at various dates. The Company
believes that its facilities are adequate for anticipated levels of
operations.
</TABLE>
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<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company has litigation pending, both offensive and
defensive, arising from the conduct of its business, none of
which are expected to have any material effect on the Company's
financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters have been submitted to a vote of security holders
which are required to be reported under the instructions to this
item.
- 6 -<PAGE>
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The market and dividend information is included on pages 14
and 16 of the Company's 1997 Annual Report to Shareholders and
is incorporated herein by reference.
There are no restrictions of future cash dividends.
There were approximately 500 shareholders of record of the
Company's common stock at June 30, 1997.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data pertaining to the Company for the
last five years is set forth on page 4 of the Company's 1997
Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This information is set forth on pages 2 through 5 of the
Company's 1997 Annual Report to Shareholders and is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Part IV, Item 14.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements which are required to be
reported under the instructions to this item.
PART III
The information required under Part III is contained in the
Company's Proxy Statement for the Annual Meeting of Shareholders
to be held October 30, 1997, which information is incorporated
herein by reference.
- 7 -<PAGE>
<PAGE> PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Page
(a) 1. Financial Statements
Consolidated Financial Statements (See Note):
Balance sheets - June 30, 1997 and 1996
Statements for the three years ended June 30, 1997 -
Income
Shareholders' equity
Cash flows
Notes to consolidated financial statements
2. Financial Statement Schedules
Report of Independent Accountants on Financial
Statement Schedules F-1
Schedule for the three years ended June 30, 1997 -
II Valuation and qualifying accounts F-2
3. Exhibits
3. Articles of incorporation and by-laws. This information is set
forth as Exhibits 2.2 and 2.3 to the September 9, 1977 Registration
Statement on Form S-7, and was amended by Proxy Statements dated
September 26, 1978 and September 21, 1988 furnished to shareholders
in connection with the related Annual Meeting of Shareholders held
on October 26, 1978 and October 27, 1988, respectively. These
documents were filed by the Registrant with the Securities and
Exchange Commission and are incorporated herein by reference.
4. Instruments defining the rights of security holders, including
indentures. This information is set forth on page 10 of the August
1, 1968 Registration Statement on Form S-1, as amended, filed by the
Registrant with the Securities and Exchange Commission and is
incorporated herein by reference.
13. Annual Report to Shareholders.
22. Subsidiaries of the registrant.
23. Consent of Price Waterhouse LLP (included on page F-1 herein).
27. Financial Data Schedule.
(b) No reports on Form 8-K were required to be filed during the last
quarter of 1997.
NOTE: The consolidated statements referred to above are included in the
1997 Annual Report to Shareholders and are incorporated herein by
reference.
- 8 -<PAGE>
<PAGE> <TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereto duly authorized.
INTERNATIONAL ALUMINUM CORPORATION
Date: September 19, 1997 By: DAVID C. TREINEN
David C. Treinen
Senior Vice President-Finance and
Administration; Secretary and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<CAPTION>
Signature Title Date
<S> <C> <C>
CORNELIUS C. VANDERSTAR Chairman of the Board and September 19, 1997
Cornelius C. Vanderstar Chief Executive Officer
JOHN P. CUNNINGHAM Director; President and September 19, 1997
John P. Cunningham Chief Operating Officer
DAVID C. TREINEN Director; Senior Vice September 19, 1997
David C. Treinen President-Finance and
Administration; Secretary
and Chief Financial Officer
MITCHELL K. FOGELMAN Vice President-Controller; September 19, 1997
Mitchell K. Fogelman and Chief Accounting Officer
HUGH E. CURRAN Director September 19, 1997
Hugh E. Curran
JOEL F. McINTYRE Director September 19, 1997
Joel F. McIntyre
ALEXANDER VAN DE POL Director September 19, 1997
Alexander van de Pol
DONALD J. WILLFONG Director September 19, 1997
Donald J. Willfong
</TABLE>
- 9 -<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
International Aluminum Corporation
Our audits of the consolidated financial statements referred to
in our report dated August 19, 1997 appearing on page 15 of the
1997 Annual Report to Shareholders of International Aluminum
Corporation (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed
in Item 14(a)2 of this Form 10-K. In our opinion, this Financial
Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.
PRICE WATERHOUSE LLP
Los Angeles, California
August 19, 1997
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (No. 33-57109) of our report
dated August 19, 1997 appearing on page 15 of the Annual Report
to Shareholders of International Aluminum Corporation which is
incorporated by reference in this Annual Report on Form 10-K for
the year ended June 30, 1997. We also consent to the
incorporation by reference of our report on the Financial
Statement Schedule which appears on page F-1 of this Form 10-K.
PRICE WATERHOUSE LLP
Los Angeles, California
September 19, 1997
F-1<PAGE>
<PAGE>
<TABLE>
INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For The Three Years Ended June 30, 1997
<CAPTION>
Balance at Amounts Amounts Balance at
Beginning Charged Written End
Description of Year to Income Off of Year
<S> <C> <C> <C> <C>
Reserves for
doubtful accounts
1997 $571,000 $548,000 $505,000 $614,000
1996 773,000 394,000 596,000 571,000
1995 815,000 376,000 418,000 773,000
</TABLE>
F-2<PAGE>
<PAGE>
INTERNATIONAL ALUMINUM CORPORATION
SUBSIDIARIES
The following is a list of the significant subsidiaries of the
Registrant and the jurisdiction under which each is organized. The
Company owns 100 percent of the voting securities of each such
subsidiary.
Jurisdiction of
Name of Subsidiary Organization
International Window Corporation California
International Extrusion Corporation California
United States Aluminum Corporation California
General Window Corporation* California
International California Glass Corporation California
United States Aluminum Corporation-Illinois California
International Window-Arizona, Inc. California
United States Aluminum Corporation-Texas Texas
International Extrusion Corporation-Texas California
United States Aluminum Corporation-Carolina California
International Carolina Glass Corporation California
Raco Altura, Inc. Texas
Maestro Products, Inc. California
Orca Architectural Aluminum Ltd. Canada
Eland-Brandt, B.V. The Netherlands
______________________________________________
* dba International Window-Northern California
Exhibit 22
INTERNATIONAL ALUMINUM CORPORATION
1997 ANNUAL REPORT<PAGE>
<PAGE>
COMPANY PROFILE
INTERNATIONAL ALUMINUM CORPORATION is an integrated manufacturer and supplier
of a broad line of quality aluminum, wood, vinyl and glass products. The
Company is headquartered in Monterey Park, California and has approximately
2,000 employees. Operations are conducted through fourteen North American
subsidiaries and one European subsidiary.
COMMERCIAL PRODUCTS - Curtain walls, window walls, storefront framing,
entrance doors and frames, interior doors and frames and interior glazing
systems.
RESIDENTIAL PRODUCTS - Aluminum, wood, vinyl and composite products including
horizontal sliding windows, vertical sliding windows, casement windows,
garden windows, bay and bow windows, special configuration windows, louvre
windows, patio doors, wardrobe mirror doors, tub enclosures and shower doors.
ALUMINUM EXTRUSIONS - Mill finish, anodized, painted and fabricated
extrusions.
GLASS PRODUCTS - Innovative store display systems. Fabrication, tempering
and etching of flat glass. Distinctive lines of glass furniture.
TABLE OF CONTENTS
Financial Highlights
Letter to Shareholders
Selected Financial Data
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Quarterly Stock Information
Report of Independent Accountants
Corporate Information
List of Subsidiaries
SAFE HARBOR STATEMENT
This annual report contains forward-looking statements with respect to the
financial condition, results of operations and business of the Company, which
include, but are not limited to, the disposition of Eland-Brandt. Such items
are subject to certain risks and uncertainties that could cause actual
results to differ materially from those set forth in such statements.<PAGE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Fiscal Years Ended June 30, 1997, 1996 and 1995
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Net sales $224,026,000 $215,573,000 $210,906,000
Income from operations $ 10,145,000 $ 12,565,000 $ 22,034,000
Net income $ 5,938,000 $ 7,597,000 $ 13,502,000
Per Share Data:
Net income $1.39 $1.78 $3.18
Dividends $1.00 $1.00 $1.00
Stock Information At Year End:
Book value $27.71 $27.44 $26.75
Stock price $26.50 $25.25 $31.75
</TABLE>
<PAGE>
<PAGE>
TO OUR SHAREHOLDERS
Taken as a whole, fiscal 1997 was again a disappointing year. Programs and
trends that showed promise at the beginning of the year failed to materialize
as envisioned and acquisitions made in October have proven to be more
difficult to assimilate than anticipated. On a brighter note, even though
results of our June quarter were up only minutely, it now appears that as the
1997 year closed, the long decline in profitability of our Residential Group
has ended and its future is looking up. On another positive note, the
ongoing drain of Eland-Brandt in Amsterdam is nearing an end. In fiscal 1997
alone its losses amounted to $1,441,000 or $.34 per share. As previously
reported, we are currently involved in divestiture negotiations and without
question, we will divest ourselves of Eland-Brandt in the near future.
Our United States Aluminum Commercial Products Group had another banner year
with both net income and consolidated contribution percentage increasing over
1996. Three more warehouse service centers were opened bringing the total
now to twelve. These are in addition to our primary manufacturing plants in
Southern California, Texas, Illinois and South Carolina. Coming on stream
momentarily at our Waxahachie, Texas plant will be a semi-automated
horizontal paint line. This new $1.5 million installation will give U.S.
Aluminum the ability to better service its customers in the Midwest and East
on increasingly popular custom painted architectural projects. Added by
acquisition to the Group in October was Orca Architectural Aluminum, Ltd. of
Surrey, British Columbia. To date, this operation has been limited in its
contribution due to the small size of its physical facilities and resultant
inability to stock a full line of U.S. Aluminum products. It will relocate
in November into a much larger plant which is currently under construction
and should thereafter be in a position to become a major factor in the
commercial glazing systems market in Western Canada.
The performance of our Aluminum Extrusion Group improved markedly as the year
progressed. Whereas early in the year our two extrusion plants still
suffered from squeezed margins as they did throughout fiscal 1996, in the
last six months their earnings, while far from spectacular, rose into an
acceptable range.
Much the same pattern existed with our International California and
International Carolina Glass fabricating companies. The first six months
performance was poor while the last half of the year showed a marked
improvement with both plants equally profitable in the June quarter.
<PAGE>
<PAGE>
Thanks to an upturn in California housing starts as well as increasing
acceptance of our line of vinyl windows and doors the results from our
Residential Products Group have taken an upward turn. While its performance
is still far from that of the late 1980 s, it is indeed encouraging to begin
to see the results of our product line modernization and updated marketing
efforts starting to bear fruit. In this regard, we have begun a major effort
to enter the Japanese market with our residential products. Since the Kobe
earthquake, there has emerged a major interest there in American style
housing construction and building materials. We have now established regular
sales representation in Japan and will be showing our products in three
building material shows in the coming months.
In October, Ragland Manufacturing in Houston acquired Altura Architectural
Products which had been its major competitor in the aluminum interior door
frame business. While the long term outlook for this marriage is excellent,
unforeseen costs and write-offs associated with the purchase decimated Raco
Altura s 1997 results. New regional sales offices have now been opened in
Chicago and Boston in an attempt to geographically broaden its markets. Raco
Altura s fourth quarter results were encouraging and we feel confident that
its future performance will return to the excellence of the past.
International Aluminum s financial condition continues to be very strong.
Total assets increased to $145 million while shareholders equity moved up
to just over $118 million. We have no long-term debt, our working capital
as of June 30 was $66 million and our current ratio had declined slightly to
a still excellent 4.0 to 1. The implementation company-wide of a new
integrated computer software system has taken longer to complete than
originally forecast. In those subsidiaries where it is currently up and
operating, the goals of tighter control of manufacturing and improved
customer service are beginning to be achieved. We continue to feel that when
fully implemented it will allow us to meet the challenges of the future
business environment in which we will operate.
CORNELIUS C. VANDERSTAR JOHN P. CUNNINGHAM
Cornelius C. Vanderstar John P. Cunningham
Chairman President
August 25, 1997<PAGE>
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
Year Ended June 30 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Sales and Earnings -
Building products
Commercial $105,781,000 $ 97,801,000 $ 87,002,000 $ 66,843,000 $ 60,340,000,
Residential 51,266,000 51,879,000 53,108,000 52,081,000 49,308,000
Extrusions 51,957,000 49,462,000 53,747,000 38,616,000 28,585,000
209,004,000 199,142,000 193,857,000 157,540,000 138,233,000
Glass products 15,022,000 16,431,000 17,049,000 17,233,000 13,962,000
Total net sales $224,026,000 $215,573,000 $210,906,000 $174,773,000 $152,195,000
Income before
accounting change $ 5,938,000 $ 7,597,000 $ 13,502,000 $ 7,365,000 $ 3,602,000
Accounting change 1,430,000
Net income $ 5,938,000 $ 7,597,000 $ 13,502,000 $ 8,795,000 $ 3,602,000
Per share:
Income before
accounting change $1.39 $1.78 $3.18 $1.74 $ .85
Accounting change .34
Net income $1.39 $1.78 $3.18 $2.08 $ .85
Dividends declared $1.00 $1.00 $1.00 $1.00 $1.00
Average shares outstanding 4,263,392 4,257,473 4,240,371 4,226,733 4,219,401
Financial Data at Year End -
Working capital $ 66,139,000 $ 71,896,000 $ 68,395,000 $ 63,452,000 $ 61,447,000
Total assets 145,041,000 141,843,000 138,104,000 129,030,000 123,938,000
Long-term debt 542,000 1,103,000 1,665,000
Shareholders' equity 118,240,000 116,882,000 113,771,000 103,435,000 98,947,000
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Significant Changes in Results of Operations
1997 vs. 1996
Net sales for fiscal 1997 increased by $8,453,000 or 3.9% from net
sales of fiscal 1996. This increase is the composite of a $10,619,000
increase in North American sales and a $2,166,000 decrease in European
sales. The sales increase primarily consists of a $7,980,000 or 8.2%
increase in sales of commercial products reflecting the acquisitions
of Altura and Orca coupled with the increased demand for exterior
commercial products in the western and southern regions of the United
States.
Cost of sales decreased to 72.0% of sales in 1997 as compared with
72.2% in 1996. This decrease is primarily attributable to increased
margins in the Aluminum Extrusion Group resulting from decreased
material costs. This was partially offset with inventory and asset
writedowns related to the absorption of Altura into Ragland and
additional workers compensation insurance expense related to a major
industrial accident during the current year.
Selling, general and administrative expenses were 23.5% of sales in
1997 as compared with 22.0% in 1996. Expenses in the current year
have risen by $5,258,000. The continuing portion of this increase
primarily relates to additional selling costs associated with sales
personnel and marketing programs resulting from the purchase of Altura
as well as the continued expansion of the Commercial Products
satellite warehouse program. The non-recurring portion of the
increase relates to a writedown of long-lived assets, restructuring
charges related to the absorption of Altura and retrospective charges
for workers compensation insurance. The retrospective adjustments had
been positive in recent years but took a substantial swing to the
negative during this fiscal year.
The decrease in interest income relates to the significantly decreased
level of funds available for investment primarily due to the cash
purchases of Altura and Orca.<PAGE>
1996 vs. 1995
Fiscal year 1996 net sales increased by $4,667,000 or 2.2% from the
fiscal year 1995 level. This increase is comprised of a $3,106,000
increase in domestic sales and a $1,561,000 increase in foreign sales.
The overall sales increase was driven by a $10,799,000 or 12.4%
increase in sales of commercial products reflecting the increased
demand for these products in the southern and eastern regions of the
United States. Partially offsetting this were the $4,285,000 or 8.0%
decrease in sales by the Aluminum Extrusion Group, resulting from
reduced sales volume into the West Coast marketing area, and a
$1,229,000 or 2.3% decrease in sales by the Residential Products Group
into the Southern California area.
Gross profit was 27.8% of sales in 1996 as compared with 32.2% in
1995. This decrease is primarily attributable to significantly
decreased margins in the Aluminum Extrusion Group resulting from lower
volume and declining prices. Also, as a result of increased material
costs and lower sales volume, decreased margins were experienced by
the Company's Residential Products Group.
Selling, general and administrative expenses were 22.0% of sales in
1996 as compared with 21.8% in 1995. Expenses in the current year
have risen by $1,421,000 primarily due to additional selling costs
associated with the expansion of the Commercial Products Group
satellite warehouse program.
The decrease in investment income relates to significant increases in
the market values of interest rate sensitive securities during the
prior year.
<PAGE>
Inflation
Because the Company's products are predominately made-to-order, the
impact of inflation on operating results is typically not significant.
The Company attempts to alleviate inflationary pressures by increasing
selling prices to help offset rising costs (subject to competitive
conditions), increasing productivity and improving design.
Liquidity and Capital Resources
Working capital at June 30, 1997 was $66,139,000 compared to
$71,896,000 at June 30, 1996 and $68,395,000 at June 30, 1995. The
ratio of current assets to current liabilities was 4.0 at the end of
1997 compared to 4.5 at the end of 1996 and 4.6 at the end of 1995.
The Company continues to be in excellent position to meet its short-
term operating and discretionary cash requirements. Funds in excess
of current operating requirements are invested in short-term interest-
bearing instruments.
Capital expenditures for property, plant and equipment of
approximately $7,508,000 in 1997, $5,680,000 in 1996 and $11,886,000
in 1995 were financed through internal cash flow. Additionally,
during the 1997 fiscal year the Company expended $6,971,000 to
complete two acquisitions (see Note 10). In addition to the normal
annual expenditures for replacement items, the Company projects
capital expenditures for fiscal 1998 of $6,000,000 for scheduled
expansion of production capacity. The Company anticipates financing
these expenditures through internal cash flow.
The Company had $10,000,000 in available credit at the end of 1997
under a short-term borrowing arrangement with a bank.
The Company's financial condition remains strong. The Company
believes that its cash, other liquid assets, operating cash flows and
borrowing capacity, taken together, provide more than adequate
resources to fund ongoing operating requirements and future capital
expenditures related to the expansion of existing businesses.<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and 1996
<CAPTION>
Assets 1997 1996
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,485,000 $ 13,230,000
Accounts receivable, less reserve of
$614,000 in 1997 and $571,000 in 1996 35,773,000 34,498,000
Unbilled receivables 885,000 823,000
Inventories 41,993,000 39,582,000
Prepaid expenses 1,834,000 2,712,000
Future income tax benefits 1,289,000 1,350,000
Total current assets 88,259,000 92,195,000
Property, plant and equipment, at cost:
Land 7,714,000 8,161,000
Buildings and improvements 29,895,000 30,513,000
Machinery and equipment 60,068,000 59,577,000
Construction in process 1,887,000 47,000
99,564,000 98,298,000
Accumulated depreciation (53,600,000) (53,356,000)
45,964,000 44,942,000
Other assets:
Costs in excess of net assets of purchased businesses 10,290,000 4,706,000
Other 528,000
10,818,000 4,706,000
$145,041,000 $141,843,000
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and 1996
<CAPTION>
Liabilities and Shareholders' Equity 1997 1996
<S> <C> <C>
Current liabilities:
Accounts payable $ 9,417,000 $ 10,190,000
Accrued liabilities 11,727,000 9,343,000
Income taxes payable 976,000 766,000
Total current liabilities 22,120,000 20,299,000
Other liabilities:
Deferred income taxes 4,362,000 4,337,000
Other 319,000 325,000
4,681,000 4,662,000
Commitments (Note 6)
Shareholders' equity:
Capital Stock -
Preferred, $10.00 par value -
Authorized - 500,000 shares
Outstanding - none
Common, $1.00 par value -
Authorized - 10,000,000 shares
Outstanding - 4,267,419 shares in 1997
and 4,260,180 shares in 1996 4,741,000 4,734,000
Paid-in capital 3,809,000 3,719,000
Retained earnings, including cumulative
translation adjustment of $2,275,000
in 1997 and $2,687,000 in 1996 109,690,000 108,429,000
118,240,000 116,882,000
$145,041,000 $141,843,000
/TABLE
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
For the years ended June 30, 1997, 1996 and 1995
<CAPTION
1997 1996 1995
<S> <C> <C> <C>
Net sales $224,026,000 $215,573,000 $210,906,000
Cost of sales 161,272,000 155,657,000 142,942,000
Gross profit 62,754,000 59,916,000 67,964,000
Selling, general and administrative expenses 52,609,000 47,351,000 45,930,000
Income from operations 10,145,000 12,565,000 22,034,000
Interest income 198,000 311,000 580,000
Interest expense (115,000) (109,000) (92,000)
Income before income taxes 10,228,000 12,767,000 22,522,000
Provision for income taxes 4,290,000 5,170,000 9,020,000
Net income $ 5,938,000 $ 7,597,000 $ 13,502,000
Earnings per common share $1.39 $1.78 $3.18
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the years ended June 30, 1997, 1996 and 1995
<CAPTION>
Common Stock
Number Paid-in Retained
of Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1994 4,230,780 $4,704,000 $3,359,000 $ 95,372,000 $103,435,000
Exercise of stock options 22,009 22,000 253,000 275,000
Translation adjustment 801,000 801,000
Cash dividends (4,242,000) (4,242,000)
Net income 13,502,000 13,502,000
Balance, June 30, 1995 4,252,789 4,726,000 3,612,000 105,433,000 113,771,000
Exercise of stock options 7,391 8,000 107,000 115,000
Translation adjustment (342,000) (342,000)
Cash dividends (4,259,000) (4,259,000)
Net income 7,597,000 7,597,000
Balance, June 30, 1996 4,260,180 4,734,000 3,719,000 108,429,000 116,882,000
Exercise of stock options 7,239 7,000 90,000 97,000
Translation adjustment (412,000) (412,000)
Cash dividends (4,265,000) (4,265,000)
Net income 5,938,000 5,938,000
Balance, June 30, 1997 4,267,419 $4,741,000 $3,809,000 $109,690,000 $118,240,000
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 30, 1997, 1996 and 1995
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 5,938,000 $ 7,597,000 $13,502,000
Adjustments for noncash transactions:
Depreciation and amortization 5,596,000 5,204,000 4,793,000
Change in deferred income taxes 86,000 87,000 (240,000)
Net loss on disposition of assets 413,000
Changes in assets and liabilities:
Receivables 176,000 501,000 261,000
Inventories (1,095,000) 2,107,000 (12,844,000)
Prepaid expenses and other 910,000 455,000 (419,000)
Accounts payable (1,288,000) 1,968,000 (859,000)
Accrued liabilities and other 926,000 (191,000) 539,000
Income taxes payable 93,000 (333,000) (670,000)
Net cash provided by operating activities 11,755,000 17,395,000 4,063,000
Cash flows from investing activities:
Capital expenditures (7,508,000) (5,680,000) (11,886,000)
Proceeds from sales of capital assets 625,000 337,000 2,530,000
Acquisition of businesses, net of cash acquired (6,971,000)
Changes in investments 2,213,000 7,074,000
Net cash used in investing activities (13,854,000) (3,130,000) (2,282,000)
Cash flows from financing activities:
Repayment of long-term debt (542,000) (423,000) (700,000)
Exercise of stock options 97,000 115,000 275,000
Dividends paid to shareholders (4,265,000) (4,259,000) (4,242,000)
Net cash used in financing activities (4,710,000) (4,567,000) (4,667,000)
Effect of exchange rate changes on cash 64,000 (18,000) 23,000
Net change in cash and cash equivalents (6,745,000) 9,680,000 (2,863,000)
Cash and cash equivalents at beginning of year 13,230,000 3,550,000 6,413,000
Cash and cash equivalents at end of year $ 6,485,000 $13,230,000 $ 3,550,000
<FN>
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Significant accounting policies and procedures -
(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of
the Company and all its domestic and foreign subsidiaries. All significant
intercompany transactions and accounts have been eliminated in consolidation.
To expedite reporting, the Company follows the practice of consolidating its
European subsidiary using a year ending one month prior to the June 30th year
end of its North American subsidiaries.
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
(b) Cash and cash equivalents
Cash and cash equivalents include cash on hand and marketable securities with
original maturities of three months or less.
(c) Long-term contracts
Certain sales of the Company's Netherlands subsidiary, Eland- Brandt, B.V.,
are made under contracts covering extended periods of time. These contracts
are accounted for by the percentage-of-completion method on the basis of
total costs of shipments compared to total estimated costs. Costs and
estimated earnings in excess of billings on uncompleted contracts are
classified as "Unbilled receivables". It is anticipated that all such
receivables will be collected within one year.
(d) Inventories
Inventories, stated at the lower of cost (first-in, first-out) or market, are
summarized as follows:
1997 1996
Raw materials $32,275,000 $29,667,000
Work in process 2,320,000 2,252,000
Finished goods 7,398,000 7,663,000
$41,993,000 $39,582,000
<PAGE>
(e) Depreciation and amortization policies
Depreciation and amortization are provided over the estimated useful lives of
the assets or the remaining terms of the leases, whichever is shorter, using
the straight-line method for financial reporting purposes and accelerated
methods for tax purposes.
The excess of the purchase price over the underlying book value of the
companies acquired is classified as "Costs in excess of net assets of
purchased businesses". The related amounts of $12,169,000 at June 30, 1997
and $6,095,000 at June 30, 1996 are generally being amortized using the
straight-line method over periods of up to forty years. Accumulated
amortization totalled $1,879,000 at June 30, 1997 and $1,389,000 at
June 30, 1996.
(f) Impairment of Long-Lived Assets
Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" requires a review of long-lived assets for impairment whenever
circumstances indicate that the carrying amount may not be recoverable. In
fiscal 1997, property, plant and equipment was written down by $888,000 under
the provisions of SFAS 121.
Note 2. Earnings per common share -
Earnings per share are based upon the weighted average number of common and
common equivalent shares outstanding during the year. Common equivalent
shares are excluded from the computation in the periods in which they have an
antidilutive effect. Earnings per share have been computed based upon
4,263,392 shares in 1997, 4,257,473 shares in 1996 and 4,240,371 shares in
1995.
Note 3. Statement of Cash Flows -
Cash payments for interest were $99,000 in 1997, $140,000 in 1996 and
$181,000 in 1995. Cash payments for income taxes were $4,200,000 in 1997,
$5,496,000 in 1996 and $9,876,000 in 1995. During 1997, a $530,000 long term
note was received in conjunction with the sale of an idle facility.
Note 4. Short-term debt and line of credit -
The Company has a loan agreement with a domestic bank providing for a
$10,000,000 unsecured short-term line of credit at 55 basis points below the
bank's prevailing prime interest rate (7.95 percent at June 30, 1997). There
was no amount outstanding under the agreement at June 30, 1997.<PAGE>
Note 5. Accrued liabilities -
Components of accrued liabilities at June 30, 1997 and 1996 are:
1997 1996
Wages and compensated absences $ 4,619,000 $4,129,000
Taxes, other than income taxes 1,550,000 1,384,000
Insurance 2,284,000 987,000
Dividends 1,067,000 1,065,000
Other 2,207,000 1,778,000
$11,727,000 $9,343,000
Note 6. Commitments -
The Company is committed under lease agreements expiring at various dates to
2002. Certain of the leases have renewal options for periods up to five
years and others provide for rent revisions at various dates. Under the
leases the Company is obligated to pay property taxes, insurance and
maintenance. All facility leases are classified as operating leases.
Real property rental expense was $1,172,000 in 1997, $751,000 in 1996 and
$705,000 in 1995. Real property rental commitments for the next five fiscal
years are $1,078,000 in 1998, $898,000 in 1999, $682,000 in 2000, $472,000 in
2001 and $175,000 in 2002.
<PAGE>
Note 7. Stock options -
At June 30, 1997 there were 527,075 common shares reserved and available for
issuance to certain executive and managerial employees under the Company's
Stock Option Plans. Options have an exercise price equal to the market price
of the stock on the date of grant, a term of ten years and generally become
exercisable over a five year period. The Company applies APB Opinion 25 and
related Interpretations in accounting for its plans. There would have been
no material change in reported net income and earnings per share had
compensation cost been determined based on the fair value at the grant dates
consistent with SFAS 123, "Accounting for Stock-Based Compensation".
At June 30, 1997 there were 241,075 incentive stock options outstanding, of
which 69,875 were exercisable. Payment upon exercise may be either cash or
the delivery of Company common stock of equivalent value. Shares surrendered
by optionees (1,390 shares in 1997 and 319 in 1996) are immediately retired.
The transactions for shares under options for the three years ended June 30,
1997 were:
Number of Weighted-Average
shares Exercise Price
Outstanding, June 30, 1994 72,676 $15.38
Exercised (29,262) 15.38
Outstanding, June 30, 1995 43,414 15.38
Granted 214,000 28.00
Exercised (7,710) 15.38
Outstanding, June 30, 1996 249,704 26.20
Exercised (8,629) 15.38
Outstanding, June 30, 1997 241,075 26.57
<PAGE>
<TABLE>
Note 8. Income taxes -
The components of income before United States and foreign income taxes are:
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Domestic $11,757,000 $13,352,000 $23,290,000
Foreign (1,529,000) (585,000) (768,000)
$10,228,000 $12,767,000 $22,522,000
The provision for income taxes is comprised of the following:
1997 1996 1995
Current -
Federal $ 3,901,000 $ 4,448,000 $ 8,055,000
State 303,000 635,000 1,205,000
Foreign
4,204,000 5,083,000 9,260,000
Deferred -
Federal 102,000 114,000 (220,000)
State (16,000) (27,000) (20,000)
Foreign
86,000 87,000 (240,000)
$ 4,290,000 $ 5,170,000 $ 9,020,000
A reconciliation between the provisions for income taxes, computed by applying the Federal statutory rate
to income before taxes, and the book provisions for income taxes follows:
1997 1996 1995
Taxes on book income at statutory rate $ 3,580,000 $ 4,468,000 $ 7,883,000
Increases (decreases) resulting from:
State income taxes, net of Federal income tax benefit 183,000 395,000 770,000
Foreign losses with no income tax benefit 535,000 205,000 269,000
Other (8,000) 102,000 98,000
Provision for income taxes $ 4,290,000 $ 5,170,000 $ 9,020,000
/TABLE
<PAGE>
<TABLE>
Deferred income taxes result from temporary differences in the recognition of income and expenses for tax
and financial statement purposes. The tax effects of the significant temporary differences which comprise
the deferred tax assets and liabilities at yearend are as follows:
<CAPTION>
1997 1996
<S> <C> <C>
Inventory $ 413,000 $ 415,000
Accrued liabilities 737,000 688,000
Other 139,000 247,000
Net deferred tax asset $1,289,000 $1,350,000
Property, plant and equipment $4,129,000 $4,141,000
Other 233,000 196,000
Net deferred tax liability $4,362,000 $4,337,000
</TABLE>
<TABLE>
Note 9. Segment and geographical information -
The Company is a vertically integrated manufacturer of building products with European operations in The
Netherlands.
Sales, net income and identifiable assets for North American and European operations for the last three years
are as follows:
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Sales:
North America $212,685,000 $202,066,000 $199,046,000
Europe 11,341,000 13,507,000 11,860,000
$224,026,000 $215,573,000 $210,906,000
Net income:
North America $ 7,379,000 $ 8,182,000 $ 14,270,000
Europe (1,441,000) (585,000) (768,000)
$ 5,938,000 $ 7,597,000 $ 13,502,000
Identifiable assets:
North America $138,572,000 $134,822,000 $129,934,000
Europe 6,469,000 7,021,000 8,170,000
$145,041,000 $141,843,000 $138,104,000
/TABLE
<PAGE>
Note 10. Acquisitions -
On October 1, 1996, the Company completed the purchase of Orca Coatings Ltd.
("Orca") of Surrey, British Columbia, Canada and the purchase of Altura
Architectural Products, Inc. ("Altura") of Houston, Texas in two separate
transactions. Orca is an architectural coatings applicator and a distributor
of storefront and architectural metal products. Effective with the
acquisition, the company was renamed Orca Architectural Aluminum Ltd. and
became a member of the Commercial Products Group. Altura, a manufacturer of
interior aluminum office fronts whose product line and operations mirrored
those of the Company's Ragland Manufacturing subsidiary, was merged into
Ragland. The combined entity, Raco Altura, Inc., is a member of the
Commercial Products Group.
The Orca and Altura acquisitions were made with $6,971,000 of cash from the
Company's existing cash reserves. The estimated fair market value of the net
assets acquired was $897,000. The $6,074,000 excess of purchase price over
the estimated fair value was allocated to goodwill and is being amortized on
a straight line basis over periods of 5 to 30 years. Proforma results for
fiscal 1997 and 1996 have not been presented as they are not materially
different from historical amounts.
<TABLE>
Note 11. Unaudited quarterly financial information -
Quarterly financial information for the fiscal years ended June 30, 1997 and 1996 is summarized as follows:
<CAPTION>
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
<S> <C> <C> <C> <C> <C>
1997
Net sales $56,928,000 $56,161,000 $53,593,000 $57,344,000 $224,026,000
Cost of sales 40,838,000 40,350,000 39,053,000 41,031,000 161,272,000
Net income 1,336,000 1,273,000 900,000 2,429,000 5,938,000
Earnings per share .31 .30 .21 .57 1.39
1996
Net sales $56,038,000 $54,354,000 $49,910,000 $55,271,000 $215,573,000
Cost of sales 40,640,000 38,844,000 36,213,000 39,960,000 155,657,000
Net income 2,076,000 2,017,000 1,120,000 2,384,000 7,597,000
Earnings per share .49 .47 .26 .56 1.78
</TABLE>
<TABLE>
QUARTERLY STOCK INFORMATION
<CAPTION>
1997 1996
High Low Dividend High Low Dividend
<S> <C> <C> <C> <C> <C> <C>
First Quarter $26 $24 1/8 $ .25 $34 5/8 $31 $ .25
Second Quarter 26 24 .25 31 7/8 28 .25
Third Quarter 27 5/8 25 .25 31 25 1/4 .25
Fourth Quarter 26 3/4 25 .25 28 24 5/8 .25
Year $27 5/8 $24 $1.00 $34 5/8 $24 5/8 $1.00
/TABLE
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
P
PRICE WATERHOUSE LLP W
To the Board of Directors and Shareholders of
International Aluminum Corporation
In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of income,
shareholders' equity and cash flows present fairly, in all
material respects, the financial position of International
Aluminum Corporation and its subsidiaries at June 30, 1997 and
1996, and the results of their operations and their cash flows
for each of the three years in the period ended June 30, 1997,
in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the
Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Los Angeles, California
August 19, 1997
<PAGE>
<PAGE>
<TABLE>
CORPORATE INFORMATION
<CAPTION>
DIRECTORS OFFICERS
<S> <C>
Cornelius C. Vanderstar John P. Cunningham
Chairman of the Board President
John P. Cunningham David C. Treinen
Senior Vice President - Finance and
David C. Treinen Administration; Secretary
Hugh E. Curran Ronald L. Rudy
Retired Vice President - Sales of Senior Vice President - Operations
International Aluminum Corporation
Mitchell K. Fogelman
Joel F. McIntyre Vice President - Controller
Senior Partner in the Law Firm of
McIntyre, Borges & Burns Michael S. Snodgrass
Vice President - Human Resources
Alexander van de Pol
Retired President and Roland A. Young
Chairman of the Board of Treasurer; Assistant Secretary
Commonwealth Metals-Pacific
Donald J. Willfong
Executive Vice President of
Sutro & Co.
STOCK TRANSFER AGENT AND REGISTRAR ELECTRONIC TRANSFER OF DIVIDENDS
Continental Stock Transfer & Trust Company For information and forms, write to:
2 Broadway Corporate Secretary
New York, NY 10004 International Aluminum Corporation
(212) 509-4000 P. O. Box 6
Monterey Park, CA 91754
ANNUAL SHAREHOLDERS MEETING
STOCK EXCHANGE LISTINGS
2 p.m., Thursday, October 30, 1997
New York Stock Exchange International Aluminum Corporation
Pacific Exchange 767 Monterey Pass Road
Trading Symbol - IAL Monterey Park, California 91754
/TABLE
<PAGE>
<PAGE>
<TABLE>
SUBSIDIARIES BY PRODUCT CLASS
<CAPTION>
COMMERCIAL - RESIDENTIAL -
<S> <C>
United States Aluminum Corporation International Window Corporation
Vernon, California South Gate, California
Hayward, California
Las Vegas, Nevada International Window-Northern California
Seattle, Washington Hayward, California
United States Aluminum Corporation-Illinois International Window-Arizona, Inc.
Bedford Park, Illinois Phoenix, Arizona
Baltimore, Maryland
Boston, Massachusetts Maestro Products, Inc.
Detroit, Michigan Moreno Valley, California
United States Aluminum Corporation-Texas Eland-Brandt, B.V.
Waxahachie, Texas Amsterdam, The Netherlands
Denver, Colorado
St. Louis, Missouri
Dallas, Texas
Houston, Texas
United States Aluminum Corporation-Carolina
Rock Hill, South Carolina
Orlando, Florida
Atlanta, Georgia
Raco Altura, Inc.
Houston, Texas
Dallas, Texas
Waxahachie, Texas
Orca Architectural Aluminum Ltd.
Surrey, British Columbia, Canada
ALUMINUM EXTRUSIONS - GLASS -
International Extrusion Corporation International California Glass Corporation
Alhambra, California South Gate, California
International Extrusion Corporation-Texas International Carolina Glass Corporation
Waxahachie, Texas Rock Hill, South Carolina
/TABLE
<PAGE>
<PAGE>
International Aluminum Corporation
767 Monterey Pass Road
Monterey Park, California 91754
(213) 264-1670<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 6485
<SECURITIES> 0
<RECEIVABLES> 36658
<ALLOWANCES> 0
<INVENTORY> 41993
<CURRENT-ASSETS> 88259
<PP&E> 99564
<DEPRECIATION> 53600
<TOTAL-ASSETS> 145041
<CURRENT-LIABILITIES> 22120
<BONDS> 0
0
0
<COMMON> 8550
<OTHER-SE> 109690
<TOTAL-LIABILITY-AND-EQUITY> 145041
<SALES> 224026
<TOTAL-REVENUES> 224026
<CGS> 161272
<TOTAL-COSTS> 213881
<OTHER-EXPENSES> (83)
<LOSS-PROVISION> 548
<INTEREST-EXPENSE> 115
<INCOME-PRETAX> 10228
<INCOME-TAX> 4290
<INCOME-CONTINUING> 5938
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5938
<EPS-PRIMARY> 1.39
<EPS-DILUTED> 0
</TABLE>
