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, 1999 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
(323) 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 New York Stock Exchange
($1.00 Par Value) 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 8, 1999 there were 4,291,794 shares of Registrant's Common Stock
outstanding. The aggregate market value of shares held by non-affiliates was
$64,431,235 based on the New York Stock Exchange composite closing price on
that date.
DOCUMENTS INCORPORATED BY REFERENCE
Registrant's Annual Report to Shareholders for fiscal year ended June 30, 1999
is incorporated by reference into Parts I and II.
Registrant's Proxy Statement dated September 27, 1999 for the Annual Meeting
of Shareholders to be held on October 28, 1999 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 building
products manufacturer of diversified lines of quality aluminum,
vinyl, wood 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 (323) 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 15 of the
Registrant's 1999 Annual Report to Shareholders and is hereby
incorporated by reference.
c. NARRATIVE DESCRIPTION OF BUSINESS
Processes and Products
Residential
Residential products are fabricated from aluminum, vinyl and
wood 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 for exterior applications and officefronts, office
partitions, doors and frames for interior applications. These
products are utilized in varying combinations to produce systems
used for office and commercial construction, remodeling and
tenant improvement applications.
- 1 -
<PAGE>
<PAGE>
Aluminum Extrusion
In the extrusion process, heated aluminum billets are
hydraulically forced through steel dies to produce a piece of
metal of the desired cross-sectional shape and length. The
extrusions are then cut and, when requested, anodized or painted
in a variety of finishes in the Company's anodizing and painting
departments.
Aluminum extrusions produced by the Company are used in
fabricating substantially all of its other aluminum products.
In addition, during fiscal 1999 approximately 49% 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
This product group shapes, bends, bevels, etches, polishes
and tempers bulk flat glass. The fabricated glass is primarily
utilized in the Company's store fixturing products 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. 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 primarily in North
America.
No customer accounted for more than 5% of net sales in 1999,
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. Vinyl, wood, 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, 1999, the Company had approximately 2,200
full-time employees.
d. FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
The information concerning income before taxes of foreign and
domestic operations for fiscal years 1999, 1998 and 1997 is set
forth in Note 10 to the consolidated financial statements
included on page 14 of the Company's 1999 Annual Report
incorporated herein by reference. Other related information
regarding foreign operations is not significant for disclosure.
- 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 (A) 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
Denver, CO 29,000(L) Residential products
Vernon, CA 134,000 Commercial products
Hayward, CA 14,000(L) Commercial products
Las Vegas, NV 12,000(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 219,000 Commercial products
Denver, CO 16,000(L) Commercial products
St. Louis, MO 14,000(L) Commercial products
Dallas, TX 53,000(L) Commercial products
Houston, TX 57,000 Commercial products
Rock Hill, SC 74,000 Commercial products
Orlando, FL 14,000(L) Commercial products
Atlanta, GA 18,000(L) Commercial products
Langley, B.C., Canada 63,000 Commercial products
Fontana, CA 62,000 Glass fabrication
Rock Hill, SC 84,000 Glass fabrication
Monterey Park, CA 19,000(L) Executive offices
<FN>
______________________
(A) Includes manufacturing, warehouse and office space; excludes
construction in process, parking and yard storage space.
(L) Indicates leased premises.
Of the 1,964,000 square feet exhibited above, 1,726,000 square
feet are owned by the Company. The balance of 238,000 square feet
is leased under agreements expiring at various dates. The Company
believes that its facilities are adequate for anticipated levels of
operations.
</TABLE>
- 5 -
<PAGE>
<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 6
and 16 of the Company's 1999 Annual Report to Shareholders and
is incorporated herein by reference.
There are no restrictions of future cash dividends.
There were approximately 400 shareholders of record of the
Company's common stock at June 30, 1999.
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 1999
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 6 of the
Company's 1999 Annual Report to Shareholders and is incorporated
herein by reference.
ITEM 7A. DISCLOSURES ABOUT MARKET RISK
The Company has no market risk sensitive instruments which
are required to be reported under the instructions to this item.
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 28, 1999, 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, 1999 and 1998
Statements for the three years ended June 30, 1999 -
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, 1999 -
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
the 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 PricewaterhouseCoopers LLP (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 1999.
NOTE: The consolidated financial statements referred to above are included
in the 1999 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 21, 1999 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 21, 1999
Cornelius C. Vanderstar Chief Executive Officer
J. D. WILLIAMS President and Chief September 21, 1999
J. D. Williams Operating Officer
DAVID C. TREINEN Director; Senior Vice September 21, 1999
David C. Treinen President-Finance and
Administration; Secretary
and Chief Financial Officer
MITCHELL K. FOGELMAN Vice President-Controller September 21, 1999
Mitchell K. Fogelman and Chief Accounting Officer
JOHN P. CUNNINGHAM Director September 21, 1999
John P. Cunningham
HUGH E. CURRAN Director September 21, 1999
Hugh E. Curran
JOEL F. McINTYRE Director September 21, 1999
Joel F. McIntyre
ALEXANDER VAN DE POL Director September 21, 1999
Alexander van de Pol
DONALD J. WILLFONG Director September 21, 1999
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, 1999 appearing in the 1999 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.
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
August 19, 1999
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
International Aluminum Corporation of our report dated August 19,
1999 relating to the financial statements, which appears in the
Annual Report to Shareholders, which is incorporated in this
Annual Report on Form 10-K. We also consent to the incorporation
by reference of our report dated August 19, 1999 relating to the
financial statement schedule which appears in this Form 10-K.
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
September 21, 1999
F-1
<PAGE>
<PAGE>
<TABLE>
INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For The Three Years Ended June 30, 1999
<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
1999 $697,000 $414,000 $376,000 $735,000
1998 614,000 484,000 401,000 697,000
1997 571,000 548,000 505,000 614,000
</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
Maestro Products, Inc. California
United States Aluminum of Canada, Ltd. Canada
International Window-Colorado, Inc. Colorado
______________________________________________
* dba International Window-Northern California
Exhibit 22
INTERNATIONAL ALUMINUM CORPORATION
1999 Annual Report
<PAGE>
<PAGE>
COMPANY PROFILE
INTERNATIONAL ALUMINUM CORPORATION is an integrated building products
manufacturer of diversified lines of quality aluminum, vinyl, wood and glass
products. The Company is headquartered in Monterey Park, California and has
approximately 2,200 employees. Operations are conducted through fourteen
North American subsidiaries.
PRODUCTS BY SEGMENT
COMMERCIAL - Curtain walls, window walls, storefront framing, entrance doors
and frames, interior officefronts, office partitions and interior doors and
frames for the commercial building and tenant improvement markets.
RESIDENTIAL - Expansive lines of windows and patio doors manufactured from
vinyl, aluminum or wood, in addition to aluminum tub and shower enclosures
and wardrobe mirror doors, for the residential building and remodeling
markets.
ALUMINUM EXTRUSION - Mill finish, anodized, painted and fabricated aluminum
extrusions.
GLASS - Innovative store fixturing products encompassing tempered glass, wood
and metal. Proprietary showcase designs and distinctive lines of glass
furniture.
INTERNET WEBSITE - Internet users can access information on products of
International Aluminum Corporation subsidiaries at www.intlalum.com.
CONTENTS
Financial Highlights
Letter to Shareholders
Selected Financial Data
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Quarterly Financial Data
Report of Independent Accountants
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Corporate Information
Subsidiaries By Segment
<PAGE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Fiscal Years Ended June 30, 1999, 1998 and 1997
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Operating Results:
Net sales $244,606,000 $225,789,000 $224,026,000
Income from operations 16,296,000 17,783,000 10,145,000
Net income 10,339,000 12,122,000 5,938,000
Financial Data:
Net cash provided by operating activities $ 8,715,000 $ 18,136,000 $ 11,755,000
Capital expenditures including acquisitions 16,359,000 6,837,000 14,479,000
Working capital 69,030,000 72,170,000 65,820,000
Long-term debt 0 0 0
Shareholders' equity 128,701,000 123,449,000 118,240,000
Per Share Data:
Net income - Basic $ 2.41 $ 2.83 $ 1.39
Net income - Diluted 2.41 2.82 1.39
Dividends declared 1.20 1.15 1.00
Book value at yearend 29.99 28.77 27.71
Market price at yearend 27.56 31.00 26.50
</TABLE>
During the past year, John P. Cunningham retired from active management
of the Company. He has served as the President since 1972 and we would
like to thank him for his many years of dedicated service and look forward
to his continuing involvement as a member of the Board of Directors.
<PAGE>
<PAGE>
TO OUR SHAREHOLDERS
With an increase in sales of 8 percent, net income, excluding the
1998 gain on the sale of a foreign subsidiary, declined by 6 percent.
This year we had to completely rebuild the foundry at our extrusion
operation in California. During the foundry renovation, scrap
normally converted into billet internally was converted by an outside
vendor, significantly increasing unit material cost. Profitability
was also hampered by severe mechanical breakdown of equipment at our
extrusion plants in both California and Texas impacting sales for
both the Extrusion and Commercial Products Groups. Additional
increases in costs were incurred working overtime to keep the
available presses running longer hours.
It should be obvious that your management is not pleased with these
results and we are doing everything in our power to re-establish a
pattern of consistent, profitable growth. In order to achieve this,
some major changes have been made at the corporate office and in the
management of our core business units. The position of President and
Chief Operating Officer of the Company is now filled by Mr. J.D.
Williams who had an excellent track record with the Company while in
charge of our Commercial Products Group. Mr. Williams has appointed
new group operating executives to head each core business group and
has empowered them to manage their respective product groups as they
deem necessary to meet the goals as set forth in their group business
plans which are orientated toward growth.
The corporation is committed to becoming a low cost producer by
implementing modern lean type manufacturing concepts throughout each
operation. Major capital expenditures will be required at each
subsidiary for modernization upgrades which will increase production
capacity and improve quality.
Our Research and Development Department has developed new products
for the Commercial and Residential Products Groups and we expect to
see favorable results as these new products are introduced in the
market.
<PAGE>
While we are committed to improving existing operations, we are
also focusing on products within our core business units which will
provide the best return and position the corporation for growth.
We are actively pursuing additional growth through acquisitions of
companies manufacturing products complementing those currently
marketed by our existing subsidiaries. Preliminary discussions are
already in progress with several of these companies.
The company s financial health continues to be excellent with
Shareholders equity rising to $128.7 million or $29.99 per share.
The balance sheet continues to be very strong with total assets at
yearend increasing to $153.7 million with no long-term debt.
Working capital at June 30 was $69 million and our current ratio
was 4.4 to 1. Capital expenditures for next year are currently
projected to be around $18 million with a significant portion for
the continuation of production equipment upgrades at the two
extrusion facilities.
As we embrace the changes previously discussed, we embrace the
opportunity for renewed growth and better competitiveness.
CORNELIUS C. VANDERSTAR J. D. WILLIAMS
Cornelius C. Vanderstar J. D. Williams
Chairman Of The Board President
Chief Executive Officer Chief Operating Officer
August 25, 1999
<PAGE>
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
Year Ended June 30 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Sales by segment
Commercial $121,192,000 $109,188,000 $102,379,000 $ 93,749,000 $ 83,444,000
Residential 52,936,000 49,458,000 54,668,000 55,931,000 56,666,000
Aluminum Extrusion 55,213,000 50,426,000 51,957,000 49,462,000 53,747,000
Glass 15,265,000 16,717,000 15,022,000 16,431,000 17,049,000
Total net sales $244,606,000 $225,789,000 $224,026,000 $215,573,000 $210,906,000
Earnings
Gross profit $73,397,000 $69,112,000 $62,754,000 $59,916,000 $67,964,000
Net income 10,339,000 12,122,000 5,938,000 7,597,000 13,502,000
Per share:
Net income - Basic $2.41 $2.83 $1.39 $1.78 $3.18
Net income - Diluted 2.41 2.82 1.39 1.78 3.16
Dividends declared 1.20 1.15 1.00 1.00 1.00
Financial Data at Yearend
Working capital $ 69,030,000 $ 72,170,000 $ 65,820,000 $ 71,896,000 $ 68,395,000
Total assets 153,693,000 147,298,000 145,041,000 141,843,000 138,104,000
Long-term debt 542,000
Shareholders' equity 128,701,000 123,449,000 118,240,000 116,882,000 113,771,000
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Significant Changes in Results of Operations
1999 vs. 1998
Net sales for fiscal 1999 increased by $18,817,000 or 8.3% from net
sales of fiscal 1998. The increase primarily consists of a
$12,004,000 or 11.0% increase in sales of commercial products,
reflective of continued strong demand for the Company's exterior
products throughout most of its marketing regions. Sales of
residential products increased $3,478,000 or 7.0% attributable to the
strong California housing market.
Gross profit decreased to 30.0% of sales in 1999 as compared to 30.6%
in 1998. The decrease is largely attributable to higher labor and
overhead unit costs incurred at our extrusion operations resulting
from equipment failures and mechanical breakdowns coupled with
reduced selling prices.
Selling, general and administrative expenses were 23.3% of sales in
1999 as compared with 22.7% in 1998. The $5,772,000 increase in
current year expense primarily reflects costs incurred in support of
the increased sales volume. The other component of the change relates
to recruiting and relocation costs associated with realigning and
enlarging operating group management teams.
The decrease in interest income relates to the significantly decreased
level of funds available for investment during the current year due
primarily to increased capital expenditures.
<PAGE>
1998 vs. 1997
Net sales for fiscal 1998 increased by $1,763,000 or 0.8% from net
sales of fiscal 1997. The sale of the Company's Dutch subsidiary,
Eland-Brandt BV during the second quarter significantly impacts period
comparisons. The exclusion of Eland-Brandt BV from the comparison
shows an increase of $11,120,000 or 5.2% for the year. The sales from
ongoing operations primarily consist of a $6,808,000 or 6.7% increase
in sales of commercial products resulting from increased demand for
interior and exterior commercial products in the southern region of
the United States.
Gross profit increased to 30.6% of sales in 1998 as compared to 28.0%
in 1997. This increase is primarily attributable to increased margins
in the Aluminum Extrusion Group resulting from labor and overhead
efficiencies attained through higher production volume. Also factors
were the prior year inventory and asset writedowns related to the
purchase of Altura and the prior year additional workers compensation
insurance expense related to a major industrial accident during that
year.
Selling, general and administrative expenses were 22.7% of sales in
1998 as compared with 23.5% in 1997. Expenses in the current year
have decreased by $1,280,000, which reflects the elimination of costs
due to the sale of Eland-Brandt BV. Other components of the change
include increased selling and marketing costs during the current year
and decreased costs related to certain nonrecurring charges in the
prior year.
The increase in interest income relates to the significantly increased
level of funds available for investment primarily resulting from the
cash provided by operations.
<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, 1999 was $69,030,000 compared to
$72,170,000 at June 30, 1998 and $65,820,000 at June 30, 1997. The
ratio of current assets to current liabilities was 4.4 at the end of
1999 compared to 4.7 at the end of 1998 and 3.9 at the end of 1997.
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 $15,059,000 in 1999, $6,837,000 in 1998 and $7,508,000
in 1997 were financed through internal cash flow and cash reserves.
Additional cash flows include the 1999 fiscal year expenditure of
$1,300,000 for an acquisition (see Note 9), the 1998 fiscal year
receipt of $1,021,000 from the sale of a subsidiary and the 1997
fiscal year expenditure of $6,971,000 for two acquisitions. In
addition to the normal annual expenditures for replacement items, the
Company projects capital expenditures for fiscal 2000 of $18,000,000
for scheduled expansion of production capacity. The Company
anticipates financing these expenditures through internal cash flow.
The Company had $15,000,000 in available credit at the end of 1999
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>
Current and Pending Accounting Changes
The Financial Accounting Standards Board has issued a new standard
affecting the accounting for derivative instruments and hedging
activities. This standard will not change our operating results,
financial condition or disclosures.
Year 2000
The Company utilizes software and related technologies throughout its
business that will be affected by the date change to the year 2000.
The Company performed a review of the software it uses in its business
for year 2000 compliance. The Company has completed the migration to
compliant releases of its financial and human resources software. The
Company has substantially completed the implementation of new
compliant operational software which will also enhance manufacturing
information and customer service. The Company has targeted year 2000
compliance by no later than October 1999, and thus has not developed
contingency plans.
The consequences of non-compliance (although the Company does not
anticipate such) by the Company, its customers or its suppliers could
have a material adverse impact on the Company's operations. The
Company will continue to incur expenses related to these efforts;
however, such expenses are not expected to have a material impact on
the Company's results of operations.
Forward-Looking Information
This annual report contains forward-looking statements with respect
to the financial condition, results of operations and business of the
Company. Such items are subject to certain risks and uncertainties
that could cause actual results to differ materially from those set
forth in such statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date the statement was made. The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
<PAGE>
<TABLE>
QUARTERLY FINANCIAL DATA (UNAUDITED)
For the years ended June 30, 1999 and 1998
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
1999
Net sales $62,150,000 $61,269,000 $59,303,000 $61,884,000
Gross profit 19,323,000 18,587,000 17,017,000 18,470,000
Net income 3,409,000 2,790,000 1,847,000 2,293,000
Earnings per share - Basic .79 .65 .43 .53
Earnings per share - Diluted .79 .65 .43 .53
Dividends declared .30 .30 .30 .30
Stock price - High 31.19 30.06 30.63 29.00
Stock price - Low 28.19 26.69 24.88 24.75
1998
Net sales $59,509,000 $55,659,000 $52,988,000 $57,633,000
Gross profit 17,788,000 17,445,000 16,016,000 17,863,000
Net income 2,704,000 3,857,000 2,277,000 3,284,000
Earnings per share - Basic .63 .90 .53 .77
Earnings per share - Diluted .63 .90 .53 .76
Dividends declared .25 .30 .30 .30
Stock price - High 28.00 31.94 36.00 35.50
Stock price - Low 25.63 27.38 30.63 31.00
</TABLE>
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
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, cash flows and shareholders' equity present
fairly, in all material respects, the financial position of International
Aluminum Corporation and its subsidiaries at June 30, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years in
the period ended June 30, 1999, 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.
PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Los Angeles, California
August 19, 1999
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
For the years ended June 30, 1999, 1998 and 1997
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Net sales $244,606,000 $225,789,000 $224,026,000
Cost of sales 171,209,000 156,677,000 161,272,000
Gross profit 73,397,000 69,112,000 62,754,000
Selling, general and administrative expenses 57,101,000 51,329,000 52,609,000
Income from operations 16,296,000 17,783,000 10,145,000
Gain on sale of subsidiary 1,235,000
Interest income 213,000 343,000 198,000
Interest expense (130,000) (79,000) (115,000)
Income before income taxes 16,379,000 19,282,000 10,228,000
Provision for income taxes 6,040,000 7,160,000 4,290,000
Net income $ 10,339,000 $ 12,122,000 $ 5,938,000
Earnings per share - Basic $2.41 $2.83 $1.39
Earnings per share - Diluted $2.41 $2.82 $1.39
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE> <TABLE>
CONSOLIDATED BALANCE SHEETS
June 30, 1999 and 1998
<CAPTION>
Assets 1999 1998
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,269,000 $ 14,320,000
Accounts receivable, less reserve of
$735,000 in 1999 and $697,000 in 1998 39,371,000 34,850,000
Inventories 41,576,000 38,135,000
Prepaid expenses 4,909,000 2,827,000
Future income tax benefits 1,492,000 1,521,000
Total current assets 89,617,000 91,653,000
Property, plant and equipment, at cost 109,907,000 96,692,000
Accumulated depreciation (55,591,000) (51,316,000)
54,316,000 45,376,000
Other assets:
Costs in excess of net assets of purchased businesses 9,760,000 9,752,000
Other 517,000
9,760,000 10,269,000
$153,693,000 $147,298,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 8,079,000 $ 7,932,000
Accrued liabilities 12,415,000 10,921,000
Income taxes payable 93,000 630,000
Total current liabilities 20,587,000 19,483,000
Deferred income taxes 4,405,000 4,366,000
Total liabilities 24,992,000 23,849,000
Commitments (Note 5)
Shareholders' equity:
Common stock 4,765,000 4,764,000
Paid-in capital 4,123,000 4,087,000
Retained earnings 119,796,000 114,608,000
Accumulated other comprehensive income 17,000 (10,000)
Total shareholders' equity 128,701,000 123,449,000
$153,693,000 $147,298,000
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 30, 1999, 1998 and 1997
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $10,339,000 $12,122,000 $ 5,938,000
Adjustments for noncash transactions:
Depreciation and amortization 6,503,000 5,956,000 5,596,000
Change in deferred income taxes 68,000 (228,000) 86,000
Gain on disposition of business (1,235,000)
Net loss on disposition of assets 413,000
Changes in assets and liabilities:
Receivables (4,315,000) (1,316,000) 176,000
Inventories (2,943,000) 2,971,000 (1,095,000)
Prepaid expenses and other (1,540,000) (1,153,000) 910,000
Accounts payable (312,000) 1,455,000 (1,288,000)
Accrued liabilities 1,452,000 (182,000) 926,000
Income taxes payable (537,000) (254,000) 93,000
Net cash provided by operating activities 8,715,000 18,136,000 11,755,000
Cash flows from investing activities:
Capital expenditures (15,059,000) (6,837,000) (7,508,000)
Proceeds from sales of capital assets 707,000 136,000 625,000
Disposition (acquisition) of businesses (1,300,000) 1,021,000 (6,971,000)
Net cash used in investing activities (15,652,000) (5,680,000) (13,854,000)
Cash flows from financing activities:
Repayment of long-term debt (542,000)
Exercise of stock options 37,000 301,000 97,000
Dividends paid to shareholders (5,151,000) (4,929,000) (4,265,000)
Net cash used in financing activities (5,114,000) (4,628,000) (4,710,000)
Effect of exchange rate changes on cash 7,000 64,000
Net change in cash and cash equivalents (12,051,000) 7,835,000 (6,745,000)
Cash and cash equivalents at beginning of year 14,320,000 6,485,000 13,230,000
Cash and cash equivalents at end of year $ 2,269,000 $14,320,000 $ 6,485,000
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE> <TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the years ended June 30, 1999, 1998 and 1997
<CAPTION> Accumulated
Other
Common Stock Paid-in Retained Comprehensive
Shares Amount Capital Earnings Income Total
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1996 4,260,180 $4,734,000 $3,719,000 $105,742,000 $ 2,687,000 $116,882,000
Net income 5,938,000 5,938,000
Translation adjustment (412,000) (412,000)
Total comprehensive income 5,526,000
Exercise of stock options 7,239 7,000 90,000 97,000
Cash dividends (4,265,000) (4,265,000)
Balance, June 30, 1997 4,267,419 4,741,000 3,809,000 107,415,000 2,275,000 118,240,000
Net income 12,122,000 12,122,000
Translation adjustment (2,285,000) (2,285,000)
Total comprehensive income 9,837,000
Exercise of stock options 23,075 23,000 278,000 301,000
Cash dividends (4,929,000) (4,929,000)
Balance, June 30, 1998 4,290,494 4,764,000 4,087,000 114,608,000 (10,000) 123,449,000
Net income 10,339,000 10,339,000
Translation adjustment 27,000 27,000
Total comprehensive income 10,366,000
Exercise of stock options 1,300 1,000 36,000 37,000
Cash dividends (5,151,000) (5,151,000)
Balance, June 30, 1999 4,291,794 $4,765,000 $4,123,000 $119,796,000 $ 17,000 $128,701,000
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies and Procedures
Principles of Consolidation
The consolidated financial statements include the accounts of International
Aluminum Corporation (the Company) and its domestic and foreign subsidiaries.
All significant intercompany transactions and accounts have been eliminated
in consolidation. Certain reclassifications of prior year information were
made to conform to the current presentation.
Estimates and Assumptions
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.
Foreign Currency Translation
Assets and liabilities of the Company's foreign subsidiary are translated
into U.S. dollars at year-end exchange rates and revenues and expenses are
translated at average rates prevailing during the year. Local currency is
considered to be the functional currency. Translation adjustments are
deferred into accumulated other comprehensive income, a separate component of
shareholders' equity. Foreign currency transaction gains and losses are
included in results of operations as incurred.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and marketable securities with
original maturities of three months or less.
Depreciation and Amortization
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 $12,743,000 at June 30, 1999
and $12,169,000 at June 30, 1998 are being amortized using the straight-line
method over periods of up to forty years. Accumulated amortization totalled
$2,983,000 at June 30, 1999 and $2,418,000 at June 30, 1998.
Long-Lived Assets
Whenever events indicate that the carrying values of long-lived assets
including any related goodwill may not be recoverable, the Company evaluates
the carrying values of such assets using future undiscounted cash flows.
Management believes that, as of June 30, 1999, the carrying values of such
assets are appropriate.
Note 2. Balance Sheet Components
Inventories, at the Lower of FIFO Cost or Market
1999 1998
Raw materials $ 34,915,000 $31,016,000
Work in process 1,466,000 1,511,000
Finished goods 5,195,000 5,608,000
$ 41,576,000 $38,135,000
Property, Plant and Equipment, at Cost
1999 1998
Land $ 7,725,000 $ 7,857,000
Buildings and improvements 31,211,000 28,102,000
Machinery and equipment 67,891,000 60,415,000
Construction in process 3,080,000 318,000
$109,907,000 $96,692,000
Accrued Liabilities
1999 1998
Wages and compensated absences $ 5,149,000 $ 5,034,000
Taxes, other than income taxes 1,296,000 1,201,000
Insurance 1,106,000 1,170,000
Dividends 1,288,000 1,287,000
Other 3,576,000 2,229,000
$ 12,415,000 $10,921,000
Note 3. Statement of Cash Flows
Cash payments for interest were $132,000 in 1999, $50,000 in 1998 and $99,000
in 1997. Cash payments for income taxes were $6,701,000 in 1999, $7,726,000
in 1998 and $4,200,000 in 1997. A $530,000 long-term note received in
conjunction with the sale of an idle facility during 1997 was collected
during 1999.
Note 4. Short-Term Debt and Line of Credit
The Company has a loan agreement with a domestic bank providing for a
$15,000,000 unsecured short-term line of credit at 55 basis points below the
bank's prevailing prime interest rate (7.20 percent at June 30, 1999). There
was no amount outstanding under the agreement at June 30, 1999.
Note 5. Commitments
The Company is committed under real property 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 $1,178,000 in 1999, $1,339,000 in 1998 and
$1,172,000 in 1997. Real property rental commitments are $971,000 in 2000,
$754,000 in 2001 and $456,000 in 2002.
Note 6. Capital Stock
The Company has 500,000 shares of preferred stock authorized, with a $10 par
value, of which none is outstanding. There are 10,000,000 shares of common
stock authorized, $1 par value, of which there were 4,291,794 shares
outstanding at June 30, 1999 and 4,290,494 outstanding at June 30, 1998.
<TABLE>
Note 7. Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted average number of shares of
common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted
average common and potentially dilutive common equivalent shares outstanding determined as follows:
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Weighted average shares outstanding used to compute basic EPS 4,291,479 4,282,877 4,263,392
Incremental shares issuable upon the exercise of stock options 4,186 22,463 11,993
Shares used to compute diluted EPS 4,295,665 4,305,340 4,275,385
<FN>
Incremental shares issuable upon the assumed exercise of outstanding stock options is computed using the
average market price during the related period.
</TABLE>
<PAGE>
<TABLE>
Note 8. Stock Options
The Company grants stock options for the purchase of common stock to certain executive and managerial
employees under the Company's 1991 Stock Option Plan. 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 the plan,
accordingly, no compensation cost has been recognized for those stock options. 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 as prescribed by SFAS 123, "Accounting for Stock-Based Compensation".
The transactions for shares under options for the three years ended June 30, 1999 were:
<CAPTION>
Outstanding Exercisable
Number Of Weighted-Average Number Of Weighted-Average
Shares Exercise Price Shares Exercise Price
<S> <C> <C> <C> <C>
Outstanding, June 30, 1996 249,704 $26.20 35,704 $15.38
Exercised (8,629) 15.38
Forfeited (13,000) 28.00
Outstanding, June 30, 1997 228,075 26.50 67,275 22.92
Granted 66,000 31.23
Exercised (28,075) 15.83
Forfeited (18,000) 28.00
Outstanding, June 30, 1998 248,000 28.86 72,800 28.00
Exercised (1,300) 28.00
Forfeited (31,500) 28.85
Outstanding, June 30, 1999 215,200 28.87 105,720 28.35
Stock Option Summary at June 30, 1999:
$28.00 (Life - 6.4 years) 156,700 28.00 93,100 28.00
$29.38-$31.56 (Life - 8.6 years) 58,500 31.19 11,700 31.19
Available for future grants 282,500
</TABLE>
<PAGE>
Note 9. Acquisitions and Divestitures
During the current year, the Company formed a wholly-owned subsidiary named
International Window-Colorado, Inc. (IW-CO) which became a member of the
Residential Products Group. On October 1, 1998, IW-CO completed the
$1,300,000 cash purchase of selected assets and liabilities of a Denver,
Colorado residential window and door company. The estimated fair value of
the net assets acquired was $726,000. The $574,000 excess of the purchase
price over the estimated fair value of the net assets was allocated to
goodwill and is being amortized on a straight line basis over 15 years.
Proforma information has not been presented as it is not materially different
from historical results.
During the second quarter of the prior year, the Company sold it's Dutch
subsidiary, Eland-Brandt BV, for approximately $1,021,000 in net cash
proceeds. The sale generated a pretax gain of $1,235,000 (after-tax gain of
$1,156,000 or $.27 per share), including the recognition of $2,145,000 of
previously deferred cumulative translation adjustment. The gain had only a
small income tax effect because the Company had not provided benefit for
certain losses accumulated in prior years. The Company's consolidated
financial statements include the results of Eland-Brandt BV through the date
of disposal. Such amounts were not material in relation to the consolidated
financial statements.
<PAGE>
<TABLE>
Note 10. Income Taxes
The components of income before United States and foreign income taxes are:
<CAPTION> 1999 1998 1997
<S> <C> <C> <C>
Domestic $15,958,000 $19,935,000 $11,757,000
Foreign 421,000 (653,000) (1,529,000)
$16,379,000 $19,282,000 $10,228,000
The provision for income taxes is comprised of the following:
1999 1998 1997
Current -
Federal $ 5,338,000 $ 6,592,000 $ 3,901,000
State 634,000 796,000 303,000
Foreign
5,972,000 7,388,000 4,204,000
Deferred -
Federal 63,000 (232,000) 102,000
State 5,000 4,000 (16,000)
Foreign
68,000 (228,000) 86,000
$ 6,040,000 $ 7,160,000 $ 4,290,000
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:
1999 1998 1997
Taxes on book income at statutory rate $ 5,733,000 $ 6,749,000 $ 3,580,000
Increases (decreases) resulting from:
State income taxes, net of Federal income tax benefit 415,000 520,000 183,000
Foreign (income) loss with no tax impact (147,000) (131,000) 535,000
Other 39,000 22,000 (8,000)
Provision for income taxes $ 6,040,000 $ 7,160,000 $ 4,290,000
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:
1999 1998
Inventory $ 421,000 $ 452,000
Accrued liabilities 798,000 770,000
Other 273,000 299,000
Net deferred tax asset $ 1,492,000 $ 1,521,000
Property, plant and equipment $ 4,198,000 $ 4,145,000
Other 207,000 221,000
Net deferred tax liability $ 4,405,000 $ 4,366,000
No provision for U.S. taxes has been made for undistributed earnings of the foreign subsidiary since it is
expected that the major portion of such earnings will continue to be reinvested for an indefinite period of
time. </TABLE>
<PAGE>
<TABLE>
Note 11. Segment Information
The Company's operations are organized and managed by product type. The Company operates in four segments
of the building products industry: Commercial Products, Residential Products, Aluminum Extrusions and Glass
Products. See the front cover for a description of the products of each segment and the back cover for a
listing of the subsidiaries of each segment.
The Company uses a portion of its aluminum extrusion production in its Commercial and Residential segments.
Transfers are made at market prices. Accounting policies for the segments are the same as those described
in Note 1. The Company evaluates performance based on operating income or loss before any allocation of
corporate overhead, interest or taxes.
The following is significant financial information by operating segment, reconciling to the Company's totals.
<CAPTION>
Sales Operating Income
(In thousands) 1999 1998 1997 1999 1998 1997
<S> <C> <C> <C> <C> <C> <C>
Commercial $121,256 $109,394 $102,534 $ 13,171 $ 13,349 $ 12,665
Residential 53,157 49,851 54,928 2,802 2,930 1,476
Aluminum Extrusion 112,958 107,672 102,349 8,016 9,650 4,219
Glass 15,532 16,897 15,179 34 1,178 340
Total segments 302,903 283,814 274,990 24,023 27,107 18,700
Eliminations (58,297) (58,025) (50,964) 1,188 (952) (1,069)
Corporate (8,915) (8,372) (7,486)
Total $244,606 $225,789 $224,026 $ 16,296 $ 17,783 $ 10,145
Capital Expenditures Depreciation and Amortization
(In thousands) 1999 1998 1997 1999 1998 1997
Commercial $ 2,388 $ 3,874 $ 3,657 $ 1,951 $ 1,714 $ 1,111
Residential 2,871 1,417 2,833 1,767 1,416 1,502
Aluminum Extrusion 6,370 488 496 1,811 1,731 1,775
Glass 2,542 485 243 326 356 379
Total segments 14,171 6,264 7,229 5,855 5,217 4,767
Corporate 888 573 279 648 739 829
Total $ 15,059 $ 6,837 $ 7,508 $ 6,503 $ 5,956 $ 5,596
Total Assets
(In thousands) 1999 1998
Commercial $ 69,306 $ 67,899
Residential 28,874 25,493
Aluminum Extrusion 38,543 30,071
Glass 8,156 6,557
Total segments 144,879 130,020
Corporate 8,814 17,278
Total $153,693 $147,298
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CORPORATE INFORMATION
<CAPTION>
DIRECTORS OFFICERS
<S> <C>
Cornelius C. Vanderstar J. D. Williams
Chairman of the Board President
David C. Treinen David C. Treinen
Senior Vice President - Finance and
John P. Cunningham Administration; Secretary
Retired President of
International Aluminum Corporation Ronald L. Rudy
Senior Vice President - Operations
Hugh E. Curran
Retired Vice President - Sales of Mitchell K. Fogelman
International Aluminum Corporation Vice President - Controller
Joel F. McIntyre Stanley M. Kutch
Attorney At Law Vice President - Information Systems
Alexander van de Pol Ed Velasco
Retired President and Chairman of the Vice President - Human Resources
Board of Commonwealth Metals-Pacific
Roland A. Young
Donald J. Willfong Treasurer; Assistant Secretary
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
Internet at www.continentalstock.com Monterey Park, CA 91754
STOCK EXCHANGE LISTING ANNUAL SHAREHOLDERS MEETING
The Company's common stock (trading 2 p.m., Thursday, October 28, 1999
symbol: IAL) is listed on the New York International Aluminum Corporation
Stock Exchange and is also traded on 767 Monterey Pass Road
the Pacific Exchange Monterey Park, CA 91754
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SUBSIDIARIES BY SEGMENT
<CAPTION>
COMMERCIAL RESIDENTIAL
<S> <C>
Richard D. Voreis Robert W. Raichle
Executive Vice President Executive Vice President
Commercial Products Group Residential Products Group
United States Aluminum Corporation International Window Corporation
Vernon, California South Gate, California
Hayward, California
Las Vegas, Nevada International Window-Northern California
Hayward, California
United States Aluminum Corporation-Illinois
Bedford Park, Illinois International Window-Arizona, Inc.
Baltimore, Maryland Phoenix, Arizona
Boston, Massachusetts
Detroit, Michigan Maestro Products, Inc.
Moreno Valley, California
United States Aluminum Corporation-Texas
Waxahachie, Texas International Window-Colorado, Inc.
Denver, Colorado Denver, Colorado
St. Louis, Missouri
Dallas, Texas
Houston, Texas
United States Aluminum Corporation-Carolina
Rock Hill, South Carolina
Orlando, Florida
Atlanta, Georgia
United States Aluminum Of Canada, Ltd.
Langley, British Columbia, Canada
ALUMINUM EXTRUSION GLASS
John P. Collins Robert D. Carlson
Executive Vice President Manager
Aluminum Extrusion Group Glass Products Group
International Extrusion Corporation International California Glass Corporation
Alhambra, California Fontana, 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
Tel: (323) 264-1670
Fax: (323) 266-3838
Web: www.intlalum.com
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,269
<SECURITIES> 0
<RECEIVABLES> 39,371
<ALLOWANCES> 0
<INVENTORY> 41,576
<CURRENT-ASSETS> 89,617
<PP&E> 109,907
<DEPRECIATION> 55,591
<TOTAL-ASSETS> 153,693
<CURRENT-LIABILITIES> 20,587
<BONDS> 0
0
0
<COMMON> 8,888
<OTHER-SE> 119,813
<TOTAL-LIABILITY-AND-EQUITY> 153,693
<SALES> 244,606
<TOTAL-REVENUES> 244,606
<CGS> 171,209
<TOTAL-COSTS> 171,209
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 414
<INTEREST-EXPENSE> 130
<INCOME-PRETAX> 16,379
<INCOME-TAX> 6,040
<INCOME-CONTINUING> 10,339
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,339
<EPS-BASIC> 2.41
<EPS-DILUTED> 2.41
</TABLE>
