-----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, V+omS8cWxcmBXA/l12Fto5qIc4Wh5y5ZETMU+gO1g6CWzDqDznJuPc74E+2n12+B Z5rlSvx6k8L2PmV16cU1WA== 0000051103-97-000002.txt : 19970515 0000051103-97-000002.hdr.sgml : 19970515 ACCESSION NUMBER: 0000051103-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 97604286 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 MARCH 31, 1997 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended March 31, 1997 Commission File Number 1-7256 INTERNATIONAL ALUMINUM CORPORATION (Exact name of Registrant as specified in its charter) California 95-2385235 (State of incorporation) (I.R.S. Employer No.) 767 Monterey Pass Road Monterey Park, California 91754 (213) 264-1670 (Principal executive office) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No At May 1, 1997 there were 4,265,869 shares of Common Stock outstanding. Page 1 of 10 Pages INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES INDEX Page Nos. PART I Financial Information Consolidated Balance Sheets - March 31, 1997 and June 30, 1996 3 Consolidated Statements of Income - three and nine month periods ended March 31, 1997 and 1996 5 Consolidated Statements of Cash Flows - nine months ended March 31, 1997 and 1996 6 Notes to Consolidated Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Signatures 10 - 2 - PART I INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
Unaudited Audited Assets March 31, 1997 June 30, 1996 Current assets: Cash and cash equivalents $ 4,784,000 $ 13,230,000 Accounts receivable, net 33,738,000 34,498,000 Unbilled receivables 891,000 823,000 Inventories: Raw materials 32,373,000 29,667,000 Work-in-process 2,700,000 2,252,000 Finished goods 8,271,000 7,663,000 Prepaid expenses 1,760,000 2,712,000 Future income tax benefits 1,350,000 1,350,000 Total current assets 85,867,000 92,195,000 ____________ ____________ Property, plant and equipment, at cost 99,223,000 98,298,000 Accumulated depreciation (53,114,000) (53,356,000) 46,109,000 44,942,000 ____________ ____________ Other assets: Costs in excess of net assets of purchased businesses 10,425,000 4,706,000 ____________ ____________ $142,401,000 $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 March 31, 1997 June 30, 1996 Current liabilities: Accounts payable $ 9,986,000 $ 9,648,000 Accrued liabilities 10,163,000 9,343,000 Current portion of long-term debt 119,000 542,000 Income taxes payable 624,000 766,000 Total current liabilities 20,892,000 20,299,000 ____________ ____________ Other liabilities: Deferred income taxes 4,337,000 4,337,000 Other 291,000 325,000 4,628,000 4,662,000 ____________ ____________ Shareholders' equity 116,881,000 116,882,000 ____________ ____________ $142,401,000 $141,843,000 ____________ ____________ ____________ ____________ See accompanying notes to consolidated financial statements.
- 4 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended March 31, March 31, 1997 1996 1997 1996 Net sales $53,593,000 $49,910,000 $166,682,000 $160,302,000 Costs and expenses: Cost of sales 39,053,000 36,213,000 120,241,000 115,697,000 Selling, general and administrative expenses 12,997,000 11,755,000 40,253,000 35,910,000 Interest (income) expense, net (7,000) (58,000) (91,000) (128,000) Income before income taxes 1,550,000 2,000,000 6,279,000 8,823,000 Provision for income taxes 650,000 880,000 2,770,000 3,610,000 Net income $ 900,000 $ 1,120,000 $ 3,509,000 $ 5,213,000 ___________ ___________ ____________ ____________ ___________ ___________ ____________ ____________ Weighted average number of common shares outstanding 4,264,474 4,258,405 4,262,474 4,256,691 Earnings per common share $.21 $.26 $.82 $1.22 Cash dividends per common share $.25 $.25 $.75 $.75 See accompanying notes to consolidated financial statements.
- 5 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 3,509,000 $ 5,213,000 Adjustments for noncash transactions: Depreciation and amortization 3,789,000 3,902,000 Writedown of long-lived assets 888,000 Changes in assets and liabilities: Receivables 2,235,000 2,065,000 Inventories (2,437,000) 786,000 Prepaid expenses 986,000 1,014,000 Accounts payable (730,000) 832,000 Accrued liabilities and other (676,000) (374,000) Income taxes payable (259,000) (590,000) Net cash provided by operating activities 7,305,000 12,848,000 Cash flows from investing activities: Capital expenditures (5,508,000) (5,151,000) Proceeds from sales of capital assets 223,000 192,000 Acquisition of businesses, net of cash acquired (6,971,000) Changes in investments 2,213,000 Net cash used in investing activities (12,256,000) (2,746,000) Cash flows from financing activities: Repayment of long-term debt (423,000) (285,000) Exercise of stock options 73,000 112,000 Dividends paid to shareholders (3,198,000) (3,194,000) Net cash used in financing activities (3,548,000) (3,367,000) Effect of exchange rate changes on cash 53,000 2,000 Net change in cash and cash equivalents (8,446,000) 6,737,000 Cash and cash equivalents at beginning of period 13,230,000 3,550,000 Cash and cash equivalents at end of period $ 4,784,000 $10,287,000 ___________ ___________ ___________ ___________ 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 March 31, 1997 and June 30, 1996, and the results of operations for the three and nine month periods ended March 31, 1997 and 1996, and the cash flows for the nine month periods ended March 31, 1997 and 1996. The results of operations for the three and nine month periods ended March 31, 1997 and 1996 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 $3,683,000 or 7.4% for the quarter ended March 31, 1997 and by $6,380,000 or 4.0% for the nine months then ended when compared with the 1996 period. These sales include increases posted by the Commercial Products Group, up $1,775,000 or 7.8% for the quarter and by $6,167,000 or 8.4% for the nine months. The sales for the quarter also included an increase of $2,631,000 or 22.4% posted by the Aluminum Extrusion Group. Cost of sales as a percentage of net sales increased by 0.3% for the quarter ended March 31, 1997 but declined by 0.1% for the nine months then ended when compared with the 1996 periods. The decrease for the nine months 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 during the second quarter related to the purchase of Altura and additional workers compensation insurance expense recorded during the third quarter related to a major industrial accident during the current year. Selling, general and administrative expenses increased by $1,242,000 or 10.6% for the quarter and by $4,343,000 or 12.1% for the nine 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 as well as sales personnel and marketing programs associated with the purchase of Altura. The non-recurring portion of the increases relate to a writedown of long-lived assets during the first quarter, a charge for asset writedowns and restructuring related to the purchase of Altura during the second quarter and retrospective charges for prior years workers compensation insurance during the first and third quarters. The retrospective adjustments had been positive in recent years but took a substantial swing to the negative during this fiscal year. The decreases in net interest income for the three and nine month periods relate 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 nine months ended March 31, 1997 was 44.1% whereas the comparable period of fiscal year 1996 was 40.9%. 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 $64,975,000 during the nine months ended March 31, 1997, which represents a decrease of $6,921,000 from June 30, 1996. 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 - INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. International Aluminum Corporation (Registrant) Date May 12, 1997 DAVID C. TREINEN David C. Treinen Senior Vice President - Finance and Administration (Principal Financial Officer) Date May 12, 1997 MITCHELL K. FOGELMAN Mitchell K. Fogelman Vice President - Controller (Principal Accounting Officer) - 10 - EX-27 2 FDS FOR NINE MONTHS ENDED MARCH 31, 1997
5 1000 9-MOS JUN-30-1997 MAR-31-1997 4,784 0 34,629 0 43,344 85,867 99,223 53,114 142,401 20,892 0 0 0 8,526 108,355 142,401 166,682 166,682 120,241 160,494 (91) 642 74 6,279 2,770 3,509 0 0 0 3,509 .82 0
-----END PRIVACY-ENHANCED MESSAGE-----