-----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, Lsoqqykh4n0iRSqF9PD8jamMGxXS50Qq4dl+r5635CqzMp1snwLhXBkO/6wZETiQ F9skCY4rVmB8kY0L8qmzJg== 0000051103-99-000002.txt : 19990517 0000051103-99-000002.hdr.sgml : 19990517 ACCESSION NUMBER: 0000051103-99-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 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: SEC FILE NUMBER: 001-07256 FILM NUMBER: 99622987 BUSINESS ADDRESS: STREET 1: 767 MONTEREY PASS RD CITY: MONTEREY PARK STATE: CA ZIP: 91754 BUSINESS PHONE: 2132641670 MAIL ADDRESS: STREET 1: 767 MONTEREY PASS ROAD CITY: MONTERY PARK STATE: CA ZIP: 91754 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 1999 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, 1999 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 (323) 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 3, 1999 there were 4,291,794 shares of Common Stock outstanding. Page 1 of 9 Pages INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES INDEX Page PART I. Financial Information Consolidated Balance Sheets - March 31, 1999 and June 30, 1998 3 Consolidated Statements of Income - three and nine month periods ended March 31, 1999 and 1998 4 Consolidated Statements of Cash Flows - nine months ended March 31, 1999 and 1998 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Signatures 9 - 2 - PART I INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
Unaudited Audited Assets March 31, 1999 June 30, 1998 Current assets: Cash and cash equivalents $ 2,956,000 $ 14,320,000 Accounts receivable, net 38,809,000 34,850,000 Inventories 45,896,000 38,135,000 Prepaid expenses and deposits 4,298,000 2,827,000 Future income tax benefits 1,521,000 1,521,000 Total current assets 93,480,000 91,653,000 Property, plant and equipment, at cost 107,971,000 96,692,000 Accumulated depreciation (54,241,000) (51,316,000) Net property, plant and equipment 53,730,000 45,376,000 Other assets: Costs in excess of net assets of purchased businesses 9,904,000 9,752,000 Other 517,000 Total other assets 9,904,000 10,269,000 $157,114,000 $147,298,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 7,183,000 $ 7,932,000 Accrued liabilities 11,593,000 10,921,000 Advances payable to banks 6,093,000 Income taxes payable 272,000 630,000 Total current liabilities 25,141,000 19,483,000 Deferred income taxes 4,366,000 4,366,000 Total liabilities 29,507,000 23,849,000 Shareholders' equity 127,607,000 123,449,000 $157,114,000 $147,298,000 See accompanying notes to consolidated financial statements.
- 3 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended March 31, March 31, 1999 1998 1999 1998 Net sales $59,303,000 $52,988,000 $182,722,000 $168,156,000 Costs and expenses: Cost of sales 42,286,000 36,972,000 127,795,000 116,907,000 Selling, general and admin. 14,062,000 12,325,000 42,102,000 37,088,000 Interest (income) expense, net 48,000 (96,000) (121,000) (177,000) Income before income taxes 2,907,000 3,787,000 12,946,000 14,338,000 Provision for income taxes 1,060,000 1,510,000 4,900,000 5,500,000 Net income $ 1,847,000 $ 2,277,000 $ 8,046,000 $ 8,838,000 Earnings per share: Basic $.43 $.53 $1.87 $2.06 Diluted $.43 $.53 $1.87 $2.06 Shares used to compute EPS: Basic 4,291,719 4,290,244 4,291,384 4,280,572 Diluted 4,299,183 4,324,295 4,299,044 4,298,940 Cash dividends per share $.30 $.30 $.90 $.85 See accompanying notes to consolidated financial statements.
- 4 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31, 1999 1998 Cash flows from operating activities: Net income $ 8,046,000 $ 8,838,000 Adjustments for noncash transactions: Depreciation and amortization 4,700,000 4,339,000 Gain on disposition of business (1,235,000) Changes in assets and liabilities: Receivables (3,753,000) 1,315,000 Inventories (7,263,000) (52,000) Prepaid expenses and other (929,000) (729,000) Accounts payable (1,208,000) 1,243,000 Accrued liabilities and other 630,000 (807,000) Income taxes payable (358,000) (397,000) Net cash provided by operating activities (135,000) 12,515,000 Cash flows from investing activities: Capital expenditures (12,852,000) (5,282,000) Disposition (acquisition) of businesses (1,300,000) 1,021,000 Proceeds from sales of capital assets 656,000 92,000 Net cash used in investing activities (13,496,000) (4,169,000) Cash flows from financing activities: Dividends paid to shareholders (3,863,000) (3,642,000) Net borrowing under lines of credit 6,093,000 Proceeds from exercises of stock options 37,000 301,000 Net cash used in financing activities 2,267,000 (3,341,000) Effect of exchange rate changes on cash 7,000 Net change in cash and cash equivalents (11,364,000) 5,012,000 Cash and cash equivalents at beginning of period 14,320,000 6,485,000 Cash and cash equivalents at end of period $ 2,956,000 $11,497,000 See accompanying notes to consolidated financial statements.
- 5 - 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, in all material respects, its financial position as of March 31, 1999 and June 30, 1998, and the results of operations for the three and nine month periods ended March 31, 1999 and 1998 and the cash flows for the nine month periods ended March 31, 1999 and 1998. The results of operations for the three and nine month periods ended March 31, 1999 and 1998 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. This report contains forward-looking statements with respect to the financial conditions, 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. Comprehensive Income Comprehensive income, defined as net income and other comprehensive income, for the third quarters ended March 31, 1999 and 1998 was $1,895,000 and $2,276,000, respectively. Comprehensive income for the nine months ended March 31, 1999 and 1998 was $7,984,000 and $6,551,000, respectively. Other comprehensive income includes foreign currency translation adjustments recorded directly in shareholders' equity. Disposition of Foreign Subsidiary During the second quarter of the prior year, the Company sold it 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 Company's consolidated financial statements for the prior year include the results of Eland-Brandt through the date of disposal. - 6 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Significant Changes in Results of Operations Sales increased by $6,315,000 or 11.9% for the quarter ended March 31, 1999 and by $14,566,000 or 8.7% for the nine months then ended when compared with the 1998 periods. The sale of the Company's Dutch subsidiary, Eland-Brandt BV, during the first quarter of fiscal 1998 impacts year to date comparisons. Exclusion of Eland-Brandt from the prior year results in an increase of $16,549,000 or 9.8% for the nine months. Sales from continuing operations include increases of $4,080,000 or 15.9% for the quarter and $11,310,000 or 14.0% for the nine months by the Commercial Products Group, $960,000 or 9.2% for the quarter and by $3,395,000 or 9.8% for the nine months by the Residential Products Group and $1,792,000 or 14.3% for the quarter and by $3,090,000 or 8.2% for the nine months by the Aluminum Extrusion Group. Cost of sales as a percentage of net sales increased by 1.5% for the quarter ended March 31, 1999 and by 0.4% for the nine months then ended when compared with the 1998 periods. These increases are primarily attributable to increased labor and overhead percentages incurred during the second and third quarters by the Commercial Products Group and the Aluminum Extrusion Group. Selling, general and administrative expenses increased by $1,737,000 or 14.1% for the quarter and by $5,014,000 or 13.5% for the nine month period. These increases are primarily associated with the increased sales volume. Included in the current quarter are $470,000 of costs incurred for recruitment and relocation costs of management personnel to partially implement designed organizational and marketing changes. $525,000 of the increase for the nine months relates to the sale of the subsidiary during the prior year. The decrease in net interest income for the quarter and nine month periods relate to significantly decreased levels of funds available for investment during the current year due primarily to increased capital expenditures. The effective tax rate for the nine months ended March 31, 1999 was 37.8% whereas the comparable period of the prior year was 38.4%. - 7 - Unaudited Liquidity and Capital Resources Working capital at March 31, 1999 stood at $68,339,000, a decrease of $3,831,000 from June 30, 1998. The ratio of current assets to current liabilities is currently 3.7 as compared to 4.7 as of the beginning of the year. In addition to the $1,300,000 cash purchase of business assets in Colorado, (see the note below), the Company's projected capital expenditures for fiscal 1999 include $14,000,000 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, cash reserves and the utilization of its line of credit. The Company's line of credit was increased to $15,000,000 during the current fiscal year. Year 2000 The Company performed a review of the financial and operational software it uses in its business for Year 2000 compliance and determined that it was not compliant. The Company is in the process of migrating to new compliant releases it its financial software. The Company had previously purchased new operational software to be used by all of its entities to enhance manufacturing information and customer service. The Aluminum Extrusion and Glass Products groups have completed implementation of this new software, which is Year 2000 compliant. The Commercial and Residential Products groups have completed partial implementation, with one member of the Commercial Products Group and three members of the Residential Products Group having completed the migration to the new software. The Company has targeted Year 2000 compliance of its financial and operational software by no later than mid-1999, and thus has not developed contingency plans. 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. Although not anticipated, the consequence of non-compliance by the Company, its customers or suppliers could have a material adverse impact on the Company's operations. New Domestic Subsidiary The Company recently formed a wholly-owned subsidiary named International Window-Colorado, Inc. (IW-CO) which will be 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 was allocated to goodwill and is being amortized on a straight line basis over 15 years. - 8 - 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, 1999 DAVID C. TREINEN David C. Treinen Senior Vice President - Finance and Administration (Principal Financial Officer) Date: May 12, 1999 MITCHELL K. FOGELMAN Mitchell K. Fogelman Vice President - Controller (Principal Accounting Officer) - 9 - EX-27 2 FDS FOR NINE MONTHS ENDED MARCH 31, 1999
5 1,000 9-MOS JUN-30-1999 MAR-31-1999 2,956 0 38,809 0 45,896 93,480 107,971 54,241 157,114 25,141 0 0 0 8,880 118,727 157,114 182,722 182,722 127,795 127,795 0 524 85 12,946 4,900 8,046 0 0 0 8,046 1.87 1.87
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