-----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, Pzgc6S00az9QDghWfTzbxu7IBDvFdaXcS6/KdpROBxIq2w0u6JCi9i8Cdd2oGSoE TIHfB7XvAtQKz4AU/H9RXA== /in/edgar/work/20000921/0000051103-00-000004/0000051103-00-000004.txt : 20000924 0000051103-00-000004.hdr.sgml : 20000924 ACCESSION NUMBER: 0000051103-00-000004 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL ALUMINUM CORP CENTRAL INDEX KEY: 0000051103 STANDARD INDUSTRIAL CLASSIFICATION: [3442 ] IRS NUMBER: 952385235 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-07256 FILM NUMBER: 726228 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-K405 1 0001.txt FORM 10-K FOR FISCAL YEAR ENDED JUNE 30, 2000 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, 2000 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 6, 2000 there were 4,244,794 shares of Registrant's Common Stock outstanding. The aggregate market value of shares held by non-affiliates was $42,220,663 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, 2000 is incorporated by reference into Parts I and II. Registrant's Proxy Statement dated September 25, 2000 for the Annual Meeting of Shareholders to be held on October 26, 2000 is incorporated by reference, other than the performance graph and Compensation Committee Report, into Part III. 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 and wood 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 2000 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 - 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 2000 approximately 46% 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. Sales and Distribution The Company markets its residential products primarily to mass merchandisers, builders, 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. 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 2000, 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. 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). - 2 - 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 that 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. 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. Employees As of June 30, 2000, the Company had approximately 1,700 full-time employees. Patents The Company has no material patents, either issued or pending, and is not a party to any significant licensing agreements. - 3 - 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. d. FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS The information concerning income before taxes of foreign and domestic operations for fiscal years 2000, 1999 and 1998 is set forth in Note 10 to the consolidated financial statements included on page 14 of the Company's 2000 Annual Report incorporated herein by reference. Other related information regarding foreign operations is not significant for disclosure. - 4 - ITEM 2. PROPERTIES The following table sets forth information concerning the location, size and use of the Company's present facilities:
Square Location Feet (A) Use 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, AZ 100,000 Residential products Moreno Valley, CA 67,000 Residential products Denver, CO 29,000(L) Residential products Vernon, CA 134,000 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 159,000 Commercial products Denver, CO 16,000(L) Commercial products St. Louis, MO 14,000(L) Commercial products Dallas, TX 36,000(L) Commercial products Rock Hill, SC 74,000 Commercial products Atlanta, GA 37,000(L) Commercial products Langley, B.C., Canada 63,000 Commercial products Burlington, Ontario, Canada 21,000(L) Commercial products Houston, TX 57,000 Commercial products Waxahachie, TX 60,000 Commercial products Fontana, CA 62,000 Leased to others Rock Hill, SC 84,000 Leased to others Monterey Park, CA 19,000(L) Executive offices (A) Includes manufacturing, warehouse and office space; excludes construction in process, parking and yard storage space. (L) Indicates leased premises. Of the 1,947,000 square feet exhibited above, 1,726,000 square feet are owned by the Company. The balance of 221,000 square feet is leased under agreements expiring at various dates. The Company believes that its facilities are adequate for anticipated levels of operations.
- 5 - 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 that are required to be reported under the instructions to this item. - 6 - 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 2000 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, 2000. 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 2000 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 2000 Annual Report to Shareholders and is incorporated herein by reference. ITEM 7A. DISCLOSURES ABOUT MARKET RISK The Company has no market risk sensitive instruments that 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 that 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 26, 2000, which information is incorporated herein by reference. - 7 - 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, 2000 and 1999 Statements for the three years ended June 30, 2000 - 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, 2000 - 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 2000. NOTE: The consolidated financial statements referred to above are included in the 2000 Annual Report to Shareholders and are incorporated herein by reference. - 8 - 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, 2000 By: MITCHELL K. FOGELMAN Mitchell K. Fogelman Senior Vice President-Finance 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.
Signature Title Date CORNELIUS C. VANDERSTAR Chairman of the Board and September 21, 2000 Cornelius C. Vanderstar Chief Executive Officer DAVID C. TREINEN Director; President; Secretary September 21, 2000 David C. Treinen and Chief Operating Officer MITCHELL K. FOGELMAN Senior Vice President-Finance September 21, 2000 Mitchell K. Fogelman and Chief Financial Officer MICHAEL J. NORRING Controller and Chief September 21, 2000 Michael J. Norring Accounting Officer DAVID M. ANTONINI Director September 21, 2000 David M. Antonini JOHN P. CUNNINGHAM Director September 21, 2000 John P. Cunningham JOEL F. McINTYRE Director September 21, 2000 Joel F. McIntyre DONALD J. WILLFONG Director September 21, 2000 Donald J. Willfong
- 9 - 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 22, 2000 appearing in the 2000 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 22, 2000 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 22, 2000 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 22, 2000 relating to the financial statement schedule, which appears in this Form 10-K. PRICEWATERHOUSECOOPERS LLP Los Angeles, California September 21, 2000 F-1 INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For The Three Years Ended June 30, 2000
Balance at Amounts Amounts Balance at Beginning Charged Written End Description of Year to Income Off of Year Reserves for doubtful accounts 2000 $735,000 $481,000 $486,000 $730,000 1999 697,000 414,000 376,000 735,000 1998 614,000 484,000 401,000 697,000
F-2 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 General Window Corporation* California International Window-Arizona, Inc. California Maestro Products, Inc. California International Window-Colorado, Inc. Colorado United States Aluminum Corporation California United States Aluminum Corporation-Illinois California United States Aluminum Corporation-Texas Texas United States Aluminum Corporation-Carolina California United States Aluminum Of Canada-British Columbia Ltd. Canada United States Aluminum Of Canada-Ontario Ltd. Canada Raco Interior Products, Inc. Texas International Extrusion Corporation California International Extrusion Corporation-Texas California * dba International Window-Northern California Exhibit 22 EX-13 2 0002.txt ANNUAL REPORT FOR FISCAL YEAR ENDED JUNE 30, 2000 INTERNATIONAL ALUMINUM CORPORATION 2000 Annual Report COMPANY PROFILE INTERNATIONAL ALUMINUM CORPORATION is an integrated building products manufacturer of diversified lines of quality aluminum, vinyl, and wood products. The Company is headquartered in Monterey Park, California and has approximately 1,700 employees. Operations are conducted through fourteen North American subsidiaries. The Company's primary internet website is located at www.intlalum.com. 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. Product information is available at www.usalum.com. 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. Product information is available at www.intlwindow.com. ALUMINUM EXTRUSION - Mill finish, anodized, painted and fabricated aluminum extrusions. Product information is available at www.intlextrusion.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 FINANCIAL HIGHLIGHTS Fiscal Years Ended June 30, 2000, 1999 and 1998
2000 1999 1998 Operating Results: Net sales $215,547,000 $229,341,000 $209,072,000 Income from operations 2,349,000 16,263,000 16,605,000 Net income 1,579,000 10,339,000 12,122,000 Financial Data: Net cash provided by operating activities $ 1,861,000 $ 8,715,000 $ 18,136,000 Capital expenditures including acquisitions 10,253,000 16,359,000 6,837,000 Working capital 63,586,000 69,030,000 72,170,000 Long-term debt 0 0 0 Shareholders' equity 124,326,000 128,701,000 123,449,000 Per Share Data: Net income - Diluted $ .37 $ 2.41 $ 2.82 Dividends declared 1.20 1.20 1.15 Book value at yearend 29.29 29.99 28.77 Market price at yearend 17.25 27.56 31.00
TO OUR SHAREHOLDERS: Not since fiscal 1992 have we produced disappointing results comparable to those attained during fiscal 2000. Net income for the year, including a gain on the disposition of our glass operations, was $1,579,000 or $.37 per common share. In a robust economy, including the building products industry, we have faltered and faltered badly whereas fiscal 1992 found us mired in a severe recession. During the year we undertook the first of what were originally planned to be several modernization and equipment upgrade projects at our extrusion operations in Southern California and Texas. Hindsight is always better than foresight but as we look back it is clear that these projects were ill planned and poorly implemented. In our first quarter, during what is historically one of our most productive periods, two extrusion presses were taken out of service for what turned out to be extended periods. At the same time we experienced unanticipated mechanical breakdowns on other presses. With significantly reduced operational capacity we found ourselves unable to meet customer extrusion demand, including that of our own residential and commercial products companies. Just as production was ramping up to prior levels, continuous flow manufacturing, a completely new production order flow procedure was introduced at both facilities. This created havoc as staffs well entrenched in prior procedures had difficulty adapting to the new shop floor control system. Enough on what went wrong. We cannot dwell on the past; we must look to the future. We believe that with the problems of last year resolved we are well positioned for growth and improved profitability. Residential Products. We are encouraged by the re-emergence of our Residential Products group as a solid contributor to consolidated profits. Sales of the group increased 15% during the year while income increased 35% with much of the income improvement occurring in our fourth quarter. Assisted by our Corporate Research and Development staff, several new products have been introduced, including the just released high performance acoustic window, which has achieved outstanding test results. We also have continued to make enhancements to our existing product lines. We are delighted that George Hall, who successfully managed the turn-around of our Northern California facility, accepted the position of Executive Vice President of the group and moved into this new role in March of this year. We feel confident that under George's guidance we will see continued growth from this business segment. Commercial Products. With a much higher percentage of its basic raw material composed of aluminum extrusions, the Commercial Products Group was severely impacted by the lack of sufficient extrusion supply. Having corrected that problem and with the continued strong market for its products we look for this product segment to re-attain its previous growth momentum. We have removed the temporary hold on the project and have now given the green light on a new 60,000 square foot plant facility for United States Aluminum Canada - Ontario, Ltd., the most recent addition to this product group. The new facility will include a horizontal paint line and, when completed, will mirror our highly successful operation in Langley, British Columbia. After careful consideration we decided to spin our interior commercial products out of the United States Aluminum group. Effective July 1st, Raco Interior Products is back as a stand alone subsidiary. With much of its highly experienced staff intact, we expect Raco to again emerge as the premier supplier of interior aluminum office systems. Extruded Products. We have learned from our failures and will continue to systematically upgrade and modernize our extrusion facilities. Much of this year's anticipated capital expenditures are scheduled for just such projects. Rest assured, however, that future modernization projects will be initiated only after thorough review of verifiable cost-benefit analyses, approval of project schedules and confirmation of contingency alternative supply sources. Financial Condition. Despite the past year's poor performance, our balance sheet remains strong. We closed the year with working capital of $63.6 million, no long-term debt and a book value of $29.29 per share. Utilization of our domestic short-term credit facility, which reached a high of $14.5 million during the year, now stands at $4 million. Although there have been substantial personnel changes in the Company, we would like to assure our shareholders that we have an experienced management team in place committed to returning the Company to a position of sustainable and reasonable levels of profitability. We are optimistic this team will meet the challenge and create value for our shareholders. In closing, we would like to give special recognition and thanks to our employees for their dedication and loyalty during this very trying period. CORNELIUS C. VANDERSTAR DAVID C. TREINEN Cornelius C. Vanderstar David C. Treinen Chairman Of The Board President Chief Executive Officer Chief Operating Officer August 31, 2000 SELECTED FINANCIAL DATA
Year Ended June 30 2000 1999 1998 1997 1996 Sales by segment Commercial $108,882,000 $121,192,000 $109,188,000 $102,379,000 $ 93,749,000 Residential 60,856,000 52,936,000 49,458,000 54,668,000 55,931,000 Aluminum Extrusion 45,809,000 55,213,000 50,426,000 51,957,000 49,462,000 Total net sales $215,547,000 $229,341,000 $209,072,000 $209,004,000 $199,142,000 Earnings Gross profit $56,024,000 $70,011,000 $65,099,000 $59,134,000 $55,895,000 Continuing operations 1,254,000 10,422,000 11,459,000 5,791,000 7,270,000 Net income 1,579,000 10,339,000 12,122,000 5,938,000 7,597,000 Per share: Continuing operations-Diluted $ .29 $2.43 $2.66 $1.36 $1.70 Net income-Diluted .37 2.41 2.82 1.39 1.78 Dividends declared 1.20 1.20 1.15 1.00 1.00 Financial Data at Yearend Working capital $ 63,586,000 $ 69,030,000 $ 72,170,000 $ 65,820,000 $ 71,896,000 Total assets 154,585,000 153,693,000 147,298,000 145,041,000 141,843,000 Long-term debt 0 0 0 0 0 Shareholders' equity 124,326,000 128,701,000 123,449,000 118,240,000 116,882,000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Significant Changes in Results of Operations 2000 vs. 1999 Net sales for fiscal 2000 decreased by $13,794,000 or 6.0% from net sales of fiscal 1999. Included is a $12,310,000 or 10.2% decrease in sales of commercial products primarily resulting from an inadequate supply of raw materials from our aluminum extrusion operations. Also included is a $9,404,000 or 17.0% decrease by the Aluminum Extrusion Group primarily resulting from lower production due to extended downtime during equipment upgrades and the problems encountered in the implementation of continuous flow manufacturing. Partially offsetting these is a $7,920,000 or 15.0% increase in residential products sales reflecting the strong market for these products. Gross profit decreased to 26.0% of sales in 2000 as compared to 30.5% in 1999. The decrease is primarily attributable to higher material, labor and overhead expenses incurred in our extrusion operations resulting from downtime and inefficiencies associated with retraining personnel for the aforementioned conversion to continuous flow manufacturing. Selling, general and administrative expenses decreased by $73,000 or 0.1% from the prior year. Decreased continuing expenses to support the lower sales volume were partially offset by additional compensation, recruiting, relocation and severance costs associated with realigning operating group management teams. The swing from net interest income in the prior year to net interest expense in the current year relates to the depletion of funds available for investment due primarily to heavy capital expenditures and increases in raw material inventories. The gain on disposition of discontinued operations relates to the sale of most of the operating assets of the glass segment. Information related to this sale is included in Note 9. 1999 vs. 1998 Net sales for fiscal 1999 increased by $20,269,000 or 9.7% 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 30.5% of sales in 1999 as compared to 31.1% 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 23.4% of sales in 1999 as compared with 23.2% in 1998. The $5,254,000 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. Liquidity and Capital Resources Working capital at June 30, 2000 was $63,586,000 compared to $69,030,000 at June 30, 1999 and $72,170,000 at June 30, 1998. The ratio of current assets to current liabilities was 3.5 at the end of 2000 compared to 4.4 at the end of 1999 and 4.7 at the end of 1998. 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 $9,031,000 in 2000, $15,059,000 in 1999 and $6,837,000 in 1998 were financed through internal cash flow, cash reserves and utilization of the lines of credit. Additional cash flows include the fiscal year 2000 expenditure of $1,222,000 for an acquisition and the receipt of $3,921,000 from the sale of operating assets of the glass segment (see Note 9), the fiscal year 1999 expenditure of $1,300,000 for an acquisition and the fiscal year 1998 receipt of $1,021,000 from the sale of a subsidiary. In addition to the normal annual expenditures for replacement items, the Company projects capital expenditures for fiscal 2001 of $14,000,000 for scheduled expansion of production capacity. The Company anticipates financing these expenditures through internal cash flow and the utilization of its lines of credit. The Company had $11,000,000 in unused available credit at the end of 2000 under $20,700,000 of short-term borrowing arrangements with banks. 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. Current and Pending Accounting Changes The Financial Accounting Standards Board has not issued any new standards that will affect our operating results, financial condition or disclosures. 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. 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. QUARTERLY FINANCIAL DATA (UNAUDITED) For the years ended June 30, 2000 and 1999
First Second Third Fourth Quarter Quarter Quarter Quarter 2000 Net sales $58,741,000 $51,129,000 $50,878,000 $54,799,000 Gross profit 17,576,000 12,528,000 11,440,000 14,480,000 Net income 1,972,000 (348,000) (1,224,000) 1,179,000 Earnings per share - Basic and Diluted .46 (.08) (.29) .28 Dividends declared .30 .30 .30 .30 Stock price - High 27.88 27.56 23.56 17.50 Stock price - Low 27.38 23.38 15.00 14.00 1999 Net sales $58,202,000 $57,702,000 $55,426,000 $58,011,000 Gross profit 18,532,000 17,908,000 16,106,000 17,465,000 Net income 3,409,000 2,790,000 1,847,000 2,293,000 Earnings per share - Basic and 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
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, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2000, in conformity with accounting principles generally accepted in the United States. 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 auditing standards generally accepted in the United States, 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 22, 2000 CONSOLIDATED STATEMENTS OF INCOME For the years ended June 30, 2000, 1999 and 1998
2000 1999 1998 Net sales $215,547,000 $229,341,000 $209,072,000 Cost of sales 159,523,000 159,330,000 143,973,000 Gross profit 56,024,000 70,011,000 65,099,000 Selling, general and administrative expenses 53,675,000 53,748,000 48,494,000 Income from operations 2,349,000 16,263,000 16,605,000 Gain on sale of subsidiary - - 1,235,000 Interest income 3,000 379,000 438,000 Interest expense (428,000) (130,000) (79,000) Income from continuing operations before income taxes 1,924,000 16,512,000 18,199,000 Provision for income taxes 670,000 6,090,000 6,740,000 Income from continuing operations 1,254,000 10,422,000 11,459,000 Income (loss) from discontinued operations (52,000) (83,000) 663,000 Gain on disposition of discontinued operations 377,000 - - Net income $ 1,579,000 $ 10,339,000 $ 12,122,000 Earnings per share - Basic: Continuing operations $ .29 $2.43 $2.67 Discontinued operations .08 (.02) .16 Total $ .37 $2.41 $2.83 Earnings per share - Diluted: Continuing operations $ .29 $2.43 $2.66 Discontinued operations .08 (.02) .16 Total $ .37 $2.41 $2.82 See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETS June 30, 2000 and 1999
Assets 2000 1999 Current assets: Cash and cash equivalents $ 1,678,000 $ 2,269,000 Accounts receivable, less reserve of $730,000 in 2000 and $735,000 in 1999 39,971,000 39,371,000 Inventories 43,384,000 41,576,000 Prepaid expenses and deposits 3,114,000 4,909,000 Future income tax benefits 1,113,000 1,492,000 Total current assets 89,260,000 89,617,000 Property, plant and equipment, at cost 111,149,000 109,907,000 Accumulated depreciation (55,455,000) (55,591,000) Net property, plant and equipment 55,694,000 54,316,000 Other assets: Costs in excess of net assets of purchased businesses 9,533,000 9,760,000 Other 98,000 - Total other assets 9,631,000 9,760,000 $154,585,000 $153,693,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 6,503,000 $ 8,079,000 Accrued liabilities 9,452,000 12,415,000 Advances payable to banks 9,470,000 - Income taxes payable 249,000 93,000 Total current liabilities 25,674,000 20,587,000 Deferred income taxes 4,585,000 4,405,000 Total liabilities 30,259,000 24,992,000 Commitments (Note 5) Shareholders' equity: Common stock 4,765,000 4,765,000 Paid-in capital 4,123,000 4,123,000 Retained earnings 115,478,000 119,796,000 Accumulated other comprehensive income (40,000) 17,000 Total shareholders' equity 124,326,000 128,701,000 $154,585,000 $153,693,000 See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended June 30, 2000, 1999 and 1998
2000 1999 1998 Cash flows from operating activities: Net income $ 1,579,000 $10,339,000 $12,122,000 Adjustments for noncash transactions: Depreciation and amortization 7,156,000 6,503,000 5,956,000 Change in deferred income taxes 559,000 68,000 (228,000) Gain on dispositions (587,000) - (1,235,000) Changes in assets and liabilities: Receivables (2,051,000) (4,315,000) (1,316,000) Inventories (2,679,000) (2,943,000) 2,971,000 Prepaid expenses and other 1,519,000 (1,540,000) (1,153,000) Accounts payable (1,244,000) (312,000) 1,455,000 Accrued liabilities (2,547,000) 1,452,000 (182,000) Income taxes payable 156,000 (537,000) (254,000) Net cash provided by operating activities 1,861,000 8,715,000 18,136,000 Cash flows from investing activities: Capital expenditures (9,031,000) (15,059,000) (6,837,000) Proceeds from sales of capital assets 381,000 707,000 136,000 Acquisition of businesses (1,222,000) (1,300,000) - Disposition of businesses 3,921,000 - 1,021,000 Net cash used in investing activities (5,951,000) (15,652,000) (5,680,000) Cash flows from financing activities: Dividends paid to shareholders (5,122,000) (5,151,000) (4,929,000) Net borrowings under lines of credit 9,396,000 - - Common stock repurchased (775,000) - - Proceeds from exercises of stock options - 37,000 301,000 Net cash provided by (used in) financing activities 3,499,000 (5,114,000) (4,628,000) Effect of exchange rate changes on cash - - 7,000 Net change in cash and cash equivalents (591,000) (12,051,000) 7,835,000 Cash and cash equivalents at beginning of year 2,269,000 14,320,000 6,485,000 Cash and cash equivalents at end of year $ 1,678,000 $ 2,269,000 $14,320,000 See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the years ended June 30, 2000, 1999 and 1998
Accumulated Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Earnings Income Total 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 Net income 1,579,000 1,579,000 Translation adjustment (57,000) (57,000) Total comprehensive income 1,522,000 Repurchase of stock (47,000) (775,000) (775,000) Cash dividends (5,122,000) (5,122,000) Balance, June 30, 2000 4,244,794 $4,765,000 $4,123,000 $115,478,000 $ (40,000) $124,326,000 See accompanying notes to consolidated financial statements.
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. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and marketable securities with original maturities of three months or less. Foreign Currency Translation Assets and liabilities of the Company's foreign subsidiaries 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. 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 $12,655,000 at June 30, 2000 and $12,743,000 at June 30, 1999 are being amortized using the straight-line method over periods of up to forty years. Accumulated amortization totaled $3,122,000 at June 30, 2000 and $2,983,000 at June 30, 1999 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, 2000, the carrying values of such assets are appropriate. Note 2. Balance Sheet Components Inventories, at the Lower of FIFO Cost or Market 2000 1999 Raw materials $ 36,693,000 $ 34,915,000 Work in process 2,054,000 1,466,000 Finished goods 4,637,000 5,195,000 43,384,000 $ 41,576,000 Property, Plant and Equipment, at Cost 2000 1999 Land $ 7,719,000 $ 7,725,000 Buildings and improvements 31,473,000 31,211,000 Machinery and equipment 71,957,000 67,891,000 Construction in process - 3,080,000 $111,149,000 $109,907,000 Accrued Liabilities 2000 1999 Wages and compensated absences $ 3,567,000 $ 5,149,000 Taxes, other than income taxes 1,506,000 1,296,000 Insurance 465,000 1,106,000 Dividends 1,273,000 1,288,000 Other 2,641,000 3,576,000 $ 9,452,000 $ 12,415,000 Note 3. Statement of Cash Flows Cash payments for interest were $513,000 in 2000, $132,000 in 1999 and $50,000 in 1998. Cash payments for income taxes were $2,129,000 in 2000, $6,701,000 in 1999 and $7,726,000 in 1998. A $530,000 long-term note received in conjunction with the previous sale of an idle facility was collected during 1999. Note 4. Short-Term Debt and Lines of Credit The Company has various loan agreements with banks providing for $20,700,000 in unsecured short-term lines of credit at 55 basis points below the prevailing prime interest rate (8.95 percent at June 30, 2000). There was $9,470,000 outstanding under the agreements at June 30, 2000. Note 5. Commitments The Company is committed under real property lease agreements expiring at various dates to 2003. 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 $1,125,000 in 2000, $1,178,000 in 1999 and $1,339,000 in 1998. Real property rental commitments are $1,020,000 in 2001, $707,000 in 2002 and $413,000 in 2003. 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 4,244,794 shares outstanding at June 30, 2000 and 4,291,794 outstanding at June 30, 1999. Note 7. 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, 2000 were:
Outstanding Exercisable Number Of Weighted-Average Number Of Weighted-Average Shares Exercise Price Shares Exercise Price 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 Forfeited (67,500) 29.11 Outstanding, June 30, 2000 147,700 28.76 103,300 28.43 Stock Option Summary at June 30, 2000: $28.00-$31.56 (Life: 5.4-7.6 years) 147,700 28.76 103,300 28.43 Available for future grants 350,000
Note 8. 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:
2000 1999 1998 Weighted average shares outstanding used to compute basic EPS 4,277,332 4,291,479 4,282,877 Incremental shares issuable upon the exercise of stock options - 4,186 22,463 Shares used to compute diluted EPS 4,277,332 4,295,665 4,305,340 Incremental shares issuable upon the assumed exercise of outstanding stock options are computed using the average market price during the related period.
Note 9. Acquisitions and Divestitures During the second quarter of the current year, the Company sold most all of the operating assets of its Glass segment, excluding land and buildings, for $3,921,000. 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 for each of the last three fiscal years, in thousands of dollars are as follows:
2000 1999 1998 Net sales $ 6,760 $15,265 $16,717 Gain (loss) before income taxes $ (82) $ (133) $ 1,083 Income tax benefit (30) (50) 420 Gain (loss) from discontinued operations (52) (83) 663 Gain on disposition of discontinued operations, net of $210 income tax expense 377 - - Net income (loss) from discontinued segment $ 325 $ (83) $ 663 Earnings per share: Discontinued operations $(.01) $(.02) $ .16 Gain on disposition of discontinued operations .09 - - Also during the current year, the Company formed a wholly owned subsidiary named United States Aluminum of Canada-Ontario, Ltd., which became a member of the Commercial Products Group. In March 2000, the new subsidiary completed the $1,222,000 cash purchase of selected assets and liabilities of a Toronto, Ontario commercial storefront and curtain wall company. The estimated fair value of the net assets acquired was $720,000. The $502,000 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 5 years. Proforma information has not been presented, as it is not materially different from historical results. During the second quarter of the prior year, International Window-Colorado, Inc., a member of the Residential Products Group, 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. During the second quarter of fiscal 1998, 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.
Note 10. Income Taxes The components of income before United States and foreign income taxes are:
2000 1999 1998 Domestic $ 1,768,000 $15,958,000 $19,935,000 Foreign 661,000 421,000 (653,000) $ 2,429,000 $16,379,000 $19,282,000 The provision for income taxes is comprised of the following: 2000 1999 1998 Current - Federal $ 197,000 $ 5,338,000 $ 6,592,000 State (157,000) 634,000 796,000 Foreign 251,000 - - 291,000 5,972,000 7,388,000 Deferred - Federal 524,000 63,000 (232,000) State 35,000 5,000 4,000 Foreign - - - 559,000 68,000 (228,000) $ 850,000 $ 6,040,000 $ 7,160,000 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: 2000 1999 1998 Taxes on book income at statutory rate $ 826,000 $ 5,733,000 $ 6,749,000 Increases (decreases) resulting from: State income taxes, net of Federal income tax benefit (81,000) 415,000 520,000 Nondeductible goodwill 143,000 189,000 189,000 Federal tax credits (116,000) (142,000) (158,000) Other 78,000 (155,000) (140,000) Provision for income taxes $ 850,000 $ 6,040,000 $ 7,160,000 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 that comprise the deferred tax assets and liabilities at yearend are as follows: 2000 1999 Inventory $ 371,000 $ 421,000 Accrued liabilities 730,000 798,000 Other 12,000 273,000 Net deferred tax asset $ 1,113,000 $ 1,492,000 Property, plant and equipment $ 4,390,000 $ 4,198,000 Other 195,000 207,000 Net deferred tax liability $ 4,585,000 $ 4,405,000 No provision for U.S. taxes has been made for undistributed earnings of the foreign subsidiaries since it is expected that the major portion of such earnings will continue to be reinvested for an indefinite period.
Note 11. Segment Information The Company's operations are organized and managed by product type. The Company currently operates in three segments of the building products industry: Commercial Products, Residential Products and Aluminum Extrusions. See Note 9 for information regarding the current year sale of the operating assets of the Glass Products segment. 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.
Sales Operating Income (In thousands) 2000 1999 1998 2000 1999 1998 Commercial $108,947 $121,256 $109,393 $ 8,618 $ 13,171 $ 13,349 Residential 61,287 53,157 49,851 3,977 2,803 2,930 Aluminum Extrusion 99,271 112,958 107,672 (3,583) 8,016 9,650 Total segments 269,505 287,371 266 916 9,012 23,990 25,929 Eliminations (53,958) (58,030) (57,844) 893 1,188 (952) Corporate - - - (7,556) (8,915) (8,372) Total $215,547 $229,341 $209,072 $ 2,349 $ 16,263 $ 16,605 Capital Expenditures Depreciation and Amortization (In thousands) 2000 1999 1998 2000 1999 1998 Commercial $ 825 $ 2,388 $ 3,874 $ 2,096 $ 1,951 $ 1,714 Residential 3,760 2,871 1,417 2,005 1,767 1,416 Aluminum Extrusion 4,188 6,370 488 2,241 1,811 1,731 Glass - 2,542 485 - 326 356 Total segments 8,773 14,171 6,264 6,342 5,855 5,217 Corporate 258 888 573 814 648 739 Total $ 9,031 $ 15,059 $ 6,837 $ 7,156 $ 6,503 $ 5,956 Total Assets (In thousands) 2000 1999 Commercial $ 66,937 $ 69,306 Residential 32,510 28,874 Aluminum Extrusion 43,779 38,543 Glass - 8,156 Total segments 143,226 144,879 Corporate 11,359 8,814 Total $154,585 $153,693
CORPORATE INFORMATION
DIRECTORS OFFICERS Cornelius C. Vanderstar David C. Treinen Chairman of the Board President; Secretary David C. Treinen Mitchell K. Fogelman Senior Vice President - Finance David M. Antonini Partner in White, Nelson & Co. LLP Ronald L. Rudy Senior Vice President - Operations John P. Cunningham Retired President of Stanley M. Kutch International Aluminum Corporation Vice President - Information Systems Joel F. McIntyre Susan L. Leone Attorney At Law Vice President - Human Resources Donald J. Willfong Roland A. Young Executive Vice President of Sutro & Co. Treasurer; Assistant Secretary 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 LISTINGS ANNUAL SHAREHOLDERS MEETING The Company's common stock (trading 2 p.m., Thursday, October 26, 2000 symbol: IAL) is listed on the New York International Aluminum Corporation Stock Exchange and the Pacific Exchange 767 Monterey Pass Road Monterey Park, CA 91754
SUBSIDIARIES BY SEGMENT
COMMERCIAL (Exterior Products) RESIDENTIAL J. D. Williams George L. Hall Executive Vice President Executive Vice President Commercial Products Group Residential Products Group United States Aluminum Corporation International Window Corporation Vernon, California South Gate, California United States Aluminum Corporation-Illinois International Window-Northern California Bedford Park, Illinois Hayward, California Baltimore, Maryland Boston, Massachusetts International Window-Arizona, Inc. Detroit, Michigan Phoenix, Arizona United States Aluminum Corporation-Texas Maestro Products, Inc. Waxahachie, Texas Moreno Valley, California Denver, Colorado St. Louis, Missouri International Window-Colorado, Inc. Dallas, Texas Denver, Colorado United States Aluminum Corporation-Carolina Rock Hill, South Carolina Atlanta, Georgia United States Aluminum Of Canada-British Columbia, Ltd. Langley, British Columbia, Canada United States Aluminum Of Canada-Ontario, Ltd. Burlington, Ontario, Canada COMMERCIAL (Interior Products) ALUMINUM EXTRUSION John C. Poe Robert Dunn General Manager Executive Vice President Aluminum Extrusion Group Raco Interior Products, Inc. Houston, Texas International Extrusion Corporation Waxahachie, Texas Alhambra, California International Extrusion Corporation-Texas Waxahachie, Texas
International Aluminum Corporation 767 Monterey Pass Road Monterey Park, California 91754 Tel: (323) 264-1670 Fax: (323) 266-3838 Web: www.intlalum.com EX-27 3 0003.txt FINANCIAL DATA SCHEDULE - YEAR ENDED JUNE 30, 2000
5 1,000 YEAR JUN-30-2000 JUN-30-2000 1,678 0 39,971 0 43,384 89,260 111,149 55,455 154,585 25,674 0 0 0 8,888 115,438 154,585 215,547 215,547 159,523 159,523 0 481 428 1,924 670 1,254 325 0 0 1,579 .37 .37
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