-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V1Q/YGLve+1akJXtcOC+QhjhXDlE+QjRy0OV5nRbaolKwE0YcBFhtdeHZgGKSvYW bklj86eNdBmULNpdPuCJLQ== 0000051103-97-000001.txt : 19970222 0000051103-97-000001.hdr.sgml : 19970222 ACCESSION NUMBER: 0000051103-97-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL ALUMINUM CORP CENTRAL INDEX KEY: 0000051103 STANDARD INDUSTRIAL CLASSIFICATION: METAL DOORS, SASH, FRAMES, MOLDING & TRIM [3442] IRS NUMBER: 952385235 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07256 FILM NUMBER: 97532210 BUSINESS ADDRESS: STREET 1: 767 MONTEREY PASS RD CITY: MONTEREY PARK STATE: CA ZIP: 91754 BUSINESS PHONE: 2132641670 10-Q 1 FORM 10-Q FOR QUARTER ENDED DECEMBER 31, 1996 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended December 31, 1996 Commission File Number 1-7256 INTERNATIONAL ALUMINUM CORPORATION (Exact name of Registrant as specified in its charter) California 95-2385235 (State of incorporation) (I.R.S. Employer No.) 767 Monterey Pass Road Monterey Park, California 91754 (213) 264-1670 (Principal executive office) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No At February 3, 1997 there were 4,263,469 shares of Common Stock outstanding. Page 1 of 11 Pages INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES INDEX Page Nos. PART I Financial Information Consolidated Balance Sheets - December 31, 1996 and June 30, 1996 3 Consolidated Statements of Income - three and six month periods ended December 31, 1996 and 1995 5 Consolidated Statements of Cash Flows - six months ended December 31, 1996 and 1995 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II Other Information Item 4. Submission of Matters to a Vote of Security Holders 10 Signatures 11 - 2 - PART I INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
Unaudited Audited Assets Dec. 31, 1996 June 30, 1996 Current assets: Cash and cash equivalents $ 7,959,000 $ 13,230,000 Accounts receivable, net 33,539,000 34,498,000 Unbilled receivables 868,000 823,000 Inventories: Raw materials 30,254,000 29,667,000 Work-in-process 1,771,000 2,252,000 Finished goods 8,718,000 7,663,000 Prepaid expenses 2,391,000 2,712,000 Future income tax benefits 1,350,000 1,350,000 Total current assets 86,850,000 92,195,000 ____________ ____________ Property, plant and equipment, at cost 98,329,000 98,298,000 Accumulated depreciation (52,662,000) (53,356,000) 45,667,000 44,942,000 ____________ ____________ Other assets: Costs in excess of net assets of purchased businesses 10,560,000 4,706,000 ____________ ____________ $143,077,000 $141,843,000 ____________ ____________ ____________ ____________ See accompanying notes to consolidated financial statements.
- 3 - INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
Unaudited Audited Liabilities and Shareholders' Equity Dec. 31, 1996 June 30, 1996 Current liabilities: Accounts payable $ 9,962,000 $ 9,648,000 Accrued liabilities 10,135,000 9,343,000 Current portion of long-term debt 119,000 542,000 Income taxes payable 855,000 766,000 Total current liabilities 21,071,000 20,299,000 ____________ ____________ Other liabilities: Deferred income taxes 4,337,000 4,337,000 Other 321,000 325,000 4,658,000 4,662,000 ____________ ____________ Shareholders' equity 117,348,000 116,882,000 ____________ ____________ $143,077,000 $141,843,000 ____________ ____________ ____________ ____________ See accompanying notes to consolidated financial statements.
- 4 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended December 31, December 31, 1996 1995 1996 1995 Net sales $56,161,000 $54,354,000 $113,089,000 $110,392,000 Costs and expenses: Cost of sales 40,350,000 38,844,000 81,188,000 79,484,000 Selling, general and administrative expenses 13,455,000 12,411,000 27,256,000 24,155,000 Interest (income) expense, net 13,000 (58,000) (84,000) (70,000) Income before income taxes 2,343,000 3,157,000 4,729,000 6,823,000 Provision for income taxes 1,070,000 1,140,000 2,120,000 2,730,000 Net income $ 1,273,000 $ 2,017,000 $ 2,609,000 $ 4,093,000 ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ Weighted average number of common shares outstanding 4,262,348 4,257,564 4,261,419 4,255,882 Earnings per common share $.30 $.47 $ .61 $ .96 Cash dividends per common share $.25 $.25 $.50 $.50 See accompanying notes to consolidated financial statements.
- 5 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1996 1995 Cash flows from operating activities: Net income $ 2,609,000 $ 4,093,000 Adjustments for noncash transactions: Depreciation and amortization 2,712,000 2,516,000 Writedown of long-lived assets 888,000 Changes in assets and liabilities: Receivables 2,806,000 505,000 Inventories 266,000 3,387,000 Prepaid expenses 364,000 (66,000) Accounts payable (914,000) 426,000 Accrued liabilities and other (776,000) (762,000) Income taxes payable (30,000) (514,000) Net cash provided by operating activities 7,925,000 9,585,000 Cash flows from investing activities: Capital expenditures (3,881,000) (4,228,000) Proceeds from sales of capital assets 175,000 137,000 Acquisitions of businesses, net of cash acquired (6,971,000) Changes in investments 2,213,000 Net cash used in investing activities (10,677,000) (1,878,000) Cash flows from financing activities: Repayment of long-term debt (423,000) (285,000) Exercise of stock options 35,000 79,000 Dividends paid to shareholders (2,131,000) (2,129,000) Net cash used in financing activities (2,519,000) (2,335,000) Effect of exchange rate changes on cash 1,000 Net change in cash and cash equivalents (5,271,000) 5,373,000 Cash and cash equivalents at beginning of period 13,230,000 3,550,000 Cash and cash equivalents at end of period $ 7,959,000 $ 8,923,000 ___________ ___________ ___________ ___________ See accompanying notes to consolidated financial statements.
- 6 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Basis of Presentation In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (which consist solely of normal recurring adjustments unless otherwise disclosed) necessary to present fairly its financial position as of December 31, 1996 and June 30, 1996, and the results of operations for the three and six month periods ended December 31, 1996 and 1995, and the cash flows for the six month periods ended December 31, 1996 and 1995. The results of operations for the three and six month periods ended December 31, 1996 and 1995 are not necessarily indicative of the results to be expected for the full year. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. Acquisitions On October 1, 1996, the Company completed the purchase of Orca Coatings Ltd. ("Orca") of Surrey, British Columbia, Canada. Orca is an architectural coatings applicator and a distributor of storefront and architectural metal products. Effective with the acquisition, the company will be known as Orca Architectural Aluminum Ltd. and will be a member of the Commercial Products Group. On October 1, 1996, the Company also completed the purchase of Altura Architectural Products, Inc. ("Altura") of Houston, Texas. Altura is a manufacturer of interior aluminum office fronts. Altura's product line and operations are very similar to those of the Company's Ragland Manufacturing subsidiary, also of Houston. Altura was merged into Ragland and the combined entity will operate as Raco Altura in the Commercial Products Group. The above acquisitions were made with $6,971,000 of cash from the Company's existing cash reserves. The estimated fair market value of net assets acquired is $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. - 7 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations Significant Changes in Results of Operations: Net sales increased by $1,807,000 or 3.3% for the quarter ended December 31, 1996 and by $2,697,000 or 2.4% for the six months then ended when compared with the 1995 periods. These sales include significant increases posted by the Commercial Products Group, up $3,286,000 or 12.8% for the quarter and by $4,392,000 or 8.7% for the six months. These increases were partially offset by decreases posted by the Glass Products Group, whose sales were down $738,000 or 17.8% for the quarter and $1,447,000 or 16.3% for the six months and by the Residential Products Group, whose sales were down $1,040,000 or 7.4% for the quarter and $468,000 or 1.7% for the six months. Cost of sales as a percentage of net sales increased by 0.3% for the quarter ended December 31, 1995 but declined by 0.2% for the six months then ended when compared with the 1995 periods. The decrease for the six months is primarily attributable to slightly increased margins in the Aluminum Extrusion Group resulting from decreased material costs. Additionally, substantially all of the Company's fabrication facilities incurred increased margins for the six months associated with declining material costs. These improvements were offset during the quarter by inventory and asset writedowns related to the purchase of Altura. Selling, general and administrative expenses increased by $1,044,000 or 8.4% for the quarter and by $3,101,000 or 12.8% for the six month period. The continuing portion of these increases primarily relate to additional selling costs associated with the expansion of the commercial products satellite warehouse program. The non-recurring portion of the increases relate to a writedown of long-lived assets and a retrospective charge for workers compensation insurance during the first quarter and a charge for asset writedowns and restructuring related to the purchase of Altura during the second quarter. The decrease in net interest income for the quarter directly relates to the significantly decreased level of funds available for investment due to the cash purchase of the two companies (see the Acquisitions note). The effective tax rate for the six months ended December 31, 1996 was 44.8% whereas the comparable period of fiscal year 1996 was 40.0%. This increase is primarily related to incurrence of foreign pretax losses for which the Company realized no tax benefit due to the lack of available loss carryback provisions. - 8 - Unaudited Liquidity and Capital Resources: Working capital decreased to $65,779,000 during the six month period ended December 31, 1996, which is a decrease of $6,117,000 from June 30, 1996. This decrease directly relates to the cash purchase of the two companies (see the Acquisitions note). The ratio of current assets to current liabilities is currently 4.1 as compared to 4.5 as of the beginning of the year. In addition to the completed cash purchases of the two companies (see the Acquisitions note) the Company's projected net capital expenditures for fiscal 1997 include $8,000,000 for scheduled expansion of production capacity in addition to the normal annual noncapitalized expenditures for replacement items. The Company anticipates financing these expenditures through internal cash flow and cash reserves. The Company's line of credit remains unchanged from that noted in the June 30, 1996 Annual Report to Shareholders. - 9 - PART II. OTHER INFORMATION Item 4(c). Submission of Matters to a Vote of Security Holders On October 31, 1996, the Company held its 1996 Annual Shareholders Meeting. Shareholders voted proxies representing 4,073,042 shares which was 95.6% of the 4,260,180 shares outstanding on the record date. The proposed slate of directors were elected with 4,054,681 shares and the selected independent accountants were ratified with 4,066,482 shares. - 10 - INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. International Aluminum Corporation (Registrant) Date February 13, 1997 DAVID C. TREINEN David C. Treinen Senior Vice President - Finance and Administration (Principal Financial Officer) Date February 13, 1997 MITCHELL K. FOGELMAN Mitchell K. Fogelman Vice President - Controller (Principal Accounting Officer) - 11 - EX-27 2 FDS FOR SIX MONTHS ENDED DECEMBER 31, 1996
5 1,000 6-MOS JUN-30-1997 DEC-31-1996 7,959 0 34,407 0 40,743 86,850 98,329 52,662 143,077 21,071 0 0 0 8,489 108,859 143,077 113,089 113,089 81,188 108,444 (84) 457 52 4,729 2,120 2,609 0 0 0 2,609 .61 0
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