-----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, MnACvexyMM5bhG7YMPaqRvLVGuccq6AAsfRoO0LTtGGnXwXNkEtltwj17wHaKKMS h3yE3RDvMIaFHWM8yZazyQ== 0000051103-00-000001.txt : 20000216 0000051103-00-000001.hdr.sgml : 20000216 ACCESSION NUMBER: 0000051103-00-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000215 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: 545264 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 DECEMBER 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 December 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 February 1, 2000 there were 4,291,794 shares of Common Stock outstanding. Page 1 of 11 Pages INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES INDEX Page PART I. Financial Information Consolidated Balance Sheets - December 31, 1999 and June 30, 1999 3 Consolidated Statements of Income - three and six month periods ended December 31, 1999 and 1998 4 Consolidated Statements of Cash Flows - six months ended December 31, 1999 and 1998 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. Other Information Item 4(c). 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, 1999 June 30, 1999 Current assets: Cash and cash equivalents $ 1,414,000 $ 2,269,000 Accounts receivable, net 36,924,000 39,371,000 Inventories 41,469,000 41,576,000 Prepaid expenses and deposits 4,598,000 4,909,000 Future income tax benefits 1,492,000 1,492,000 Total current assets 85,897,000 89,617,000 Property, plant and equipment, at cost 108,886,000 109,907,000 Accumulated depreciation (53,637,000) (55,591,000) Net property, plant and equipment 55,249,000 54,316,000 Other assets: Costs in excess of net assets of purchased businesses 9,295,000 9,760,000 $150,441,000 $153,693,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 5,948,000 $ 8,079,000 Accrued liabilities 9,960,000 12,415,000 Advances payable to banks 2,332,000 - Income taxes payable - 93,000 Total current liabilities 18,240,000 20,587,000 Deferred income taxes 4,405,000 4,405,000 Total liabilities 22,645,000 24,992,000 Shareholders' equity 127,796,000 128,701,000 $150,441,000 $153,693,000 See accompanying notes to consolidated financial statements.
- 3 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended December 31, December 31, 1999 1998 1999 1998 Net sales $51,054,000 $57,632,000 $109,715,000 $115,782,000 Cost of sales 38,526,000 39,724,000 79,611,000 79,342,000 Gross profit 12,528,000 17,908,000 30,104,000 36,440,000 Selling, gen. and admin. expenses 13,580,000 13,469,000 27,861,000 26,494,000 Income (loss) from operations (1,052,000) 4,439,000 2,243,000 9,946,000 Interest income (expense), net (9,000) 107,000 (4,000) 243,000 Income (loss) from continuing operations before income taxes (1,061,000) 4,546,000 2,239,000 10,189,000 Provision for income taxes (389,000) 1,720,000 940,000 3,900,000 Income (loss) from continuing operations (672,000) 2,826,000 1,299,000 6,289,000 Loss from discontinued operations (53,000) (36,000) (52,000) (90,000) Gain on disposition of discontinued operations 377,000 - 377,000 - Net income (loss) $ (348,000) $ 2,790,000 $ 1,624,000 $ 6,199,000 Basic and diluted EPS: Continuing operations $(.16) $ .66 $ .30 $1.46 Discontinued operations .08 (.01) .08 (.02) $(.08) $ .65 $ .38 $1.44 Shares used to compute EPS: Basic 4,291,794 4,291,494 4,291,794 4,291,208 Diluted 4,291,794 4,299,195 4,291,794 4,298,966 Cash dividends per share $.30 $.30 $.60 $.60 See accompanying notes to consolidated financial statements.
- 4 - Unaudited INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1999 1998 Cash flows from operating activities: Net income $ 1,624,000 $ 6,199,000 Adjustments for noncash transactions: Depreciation and amortization 3,612,000 3,059,000 Gain on disposition of discontinued operations (587,000) - Changes in assets and liabilities: Receivables 496,000 (3,650,000) Inventories (1,175,000) (6,242,000) Prepaid expenses and deposits 71,000 (390,000) Accounts payable (1,532,000) 3,005,000 Accrued liabilities (2,033,000) 646,000 Income taxes payable (93,000) (630,000) Net cash provided by operating activities 383,000 1,997,000 Cash flows from investing activities: Capital expenditures (5,036,000) (8,056,000) Disposition (acquisition) of businesses 3,921,000 (1,300,000) Proceeds from sales of capital assets 120,000 600,000 Net cash used in investing activities (995,000) (8,756,000) Cash flows from financing activities: Dividends paid to shareholders (2,575,000) (2,576,000) Net borrowings under lines of credit 2,332,000 - Proceeds from exercises of stock options - 29,000 Net cash used in financing activities (243,000) (2,547,000) Net change in cash and cash equivalents (855,000) (9,306,000) Cash and cash equivalents at beginning of period 2,269,000 14,320,000 Cash and cash equivalents at end of period $ 1,414,000 $ 5,014,000 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 December 31, 1999 and June 30, 1999, and the results of operations for the three and six month periods ended December 31, 1999 and 1998 and the cash flows for the six month periods ended December 31, 1999 and 1998. The results of operations for the three and six month periods ended December 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. Comprehensive Income Comprehensive income, defined as net income and other comprehensive income, for the second quarters ended December 31, 1999 and 1998 was $(275,000) and $2,793,000, respectively. Comprehensive income for the six months ended December 31, 1999 and 1998 was $1,670,000 and $6,089,000, respectively. Other comprehensive income includes foreign currency translation adjustments recorded directly in shareholders' equity.
Balance Sheet Components Dec. 31, 1999 June 30, 1999 Inventories, lower of FIFO Cost or Market Raw materials $ 33,747,000 $ 34,915,000 Work in process 1,913,000 1,466,000 Finished goods 5,809,000 5,195,000 $ 41,469,000 $ 41,576,000 Shareholders' Equity Common stock $ 4,765,000 $ 4,765,000 Paid-in capital 4,123,000 4,123,000 Retained earnings 118,845,000 119,796,000 Accumulated other comprehensive income 63,000 17,000 $127,796,000 $128,701,000
- 6 - Unaudited Segment Information The following presents the Company's net sales, operating income and total assets by operating segment, reconciling to the Company's totals. All data presented in thousands of dollars.
Net Sales: Three Months Ended Six Months Ended December 31, December 31, 1999 1998 1999 1998 Commercial $ 26,696 $ 30,741 $ 56,498 $ 62,713 Residential 14,991 13,834 30,759 26,936 Aluminum Extrusion 24,636 29,941 49,587 58,853 Total Segments 66,323 74,516 136,844 148,502 Eliminations (15,269) (16,884) (27,129) (32,720) Total $ 51,054 $ 57,632 $109,715 $115,782 Operating Income: Three Months Ended Six Months Ended December 31, December 31, 1999 1998 1999 1998 Commercial $ 1,612 $ 3,109 $ 5,270 $ 7,649 Residential 662 860 1,729 1,496 Aluminum Extrusion (2,002) 2,936 (2,391) 5,329 Total Segments 272 6,905 4,608 14,474 Eliminations 415 (209) 1,389 (201) Corporate (1,739) (2,257) (3,754) (4,327) Total $ (1,052) $ 4,439 $ 2,243 $ 9,946 Total Assets: Dec. 31, June 30, 1999 1999 Commercial $ 69,576 $ 69,306 Residential 30,088 28,874 Aluminum Extrusion 40,307 38,543 Glass - 8,156 Total Segments 139,971 144,879 Corporate 10,470 8,814 Total $150,441 $153,693
- 7 - Unaudited Discontinued Operations The Company sold most all of the operating assets of its Glass segment, excluding the land and buildings, for approximately $3.9 million. The land and buildings were leased to the buyer. The Glass segment is accounted for as a discontinued operation, and accordingly, amounts in the income statements and related notes for all periods shown have been restated to reflect discontinued operations accounting. Summarized results of the discontinued businesses are shown separately as discontinued operations in the accompanying income statements. Operating results of the discontinued segment, in thousands of dollars, are as follows:
Three Months Ended Six Months Ended December 31, December 31, 1999 1998 1999 1998 Net sales $ 2,712 $ 3,637 $6,914 $ 7,637 Loss before income taxes (83) (66) (82) (150) Income tax benefit (30) (30) (30) (60) Net (loss) from discontinued ops. (53) (36) (52) (90) Gain on disposition of disc. ops., net of $210 income tax expense 377 - 377 - Net income (loss) from discontinued segment $ 324 $ (36) $ 325 $ (90) Earnings per diluted share: Discontinued operations $(.01) $(.01) $(.01) $(.02) Gain on disposition of disc. ops. .09 - .09 -
Year 2000 The Company completed its planned changes to obtain compliance prior to December 31, 1999. To date, the Company has not had any material failures related with non-compliance nor is it aware of any material failures of any of its significant customers or suppliers. - 8 - 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 decreased by $6,578,000 or 11.4% for the quarter ended December 31, 1999 and by $6,067,000 or 5.2% for the six months then ended when compared with the 1998 periods. The decreases in sales include decreases of $4,041,000 or 13.2% for the quarter and $9,051,000 or 13.8% for the six months by the Commercial Products Group primarily resulting from an inadequate supply of raw materials from our aluminum extrusion operations. Also included are decreases of $3,673,000 or 27.9% for the quarter and by $3,627,000 or 13.7% for the six months by the Aluminum Extrusion Group primarily resulting from lower production due to equipment breakdowns and the implementation of continuous flow manufacturing processing. Cost of sales as a percentage of net sales increased by 6.6% for the quarter ended December 31, 1999 and by 4.1% for the six months then ended when compared with the 1998 periods. These increases are largely attributable to higher labor and overhead expenses incurred in our extrusion operations resulting from equipment breakdowns coupled with downtime associated with retraining personnel and the aforementioned conversion to continuous flow manufacturing. Selling, general and administrative expenses increased by $111,000 for the quarter and by $1,367,000 or 5.2% for the six month period. The increased expenses for the six months are primarily attributable to additional compensation, recruiting and relocation costs during the first quarter associated with realigning and enlarging operating group management teams. The swing from net interest income for the prior year periods to net interest expense for the current year periods relates to the depletion of funds available for investment due primarily to heavy capital expenditures. The effective tax rate for the six months ended December 31, 1999 was 42.0% whereas the comparable period of the prior year was 38.3%. This increase is primarily attributable to reduced income in states with low effective tax rates coupled with nondeductible expenses being spread over a lower income base. - 9 - Unaudited Liquidity and Capital Resources Working capital at December 31, 1999 stood at $67,657,000, a decrease of $1,373,000 from June 30, 1999. The ratio of current assets to current liabilities is currently 4.7 as compared to 4.4 as of the beginning of the year. The Company's projected capital expenditures for fiscal 2000 include $11,000,000 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 the utilization of its line of credit. The Company's line of credit remains unchanged from that noted in the June 30, 1999 Annual Report to Shareholders. Forward-Looking Information This 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. PART II. OTHER INFORMATION Item 4(c). Submission of Matters to a Vote of Security Holders On October 28, 1999, the Company held its 1999 Annual Shareholders Meeting. Shareholders voted proxies representing 4,055,780 shares which was 94.5% of the 4,291,794 shares outstanding on the record date. The proposed slate of directors was elected with 3,900,291 shares and the selected independent accountants were ratified with 4,047,011 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 14, 2000 DAVID C. TREINEN David C. Treinen Senior Vice President - Finance and Administration (Principal Financial Officer) Date: February 14, 2000 MITCHELL K. FOGELMAN Mitchell K. Fogelman Vice President - Controller (Principal Accounting Officer) - 11 - EX-27 2 FDS FOR SIX MONTHS ENDED DECEMBER 31, 1999
5 1,000 6-MOS JUN-30-2000 DEC-31-1999 1,414 0 36,924 0 41,469 85,897 108,886 53,637 150,441 18,240 0 0 0 8,888 118,908 150,441 109,715 109,715 79,611 79,611 0 344 5 2,239 940 1,299 325 0 0 1,624 .38 .38
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