-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XCIogqyShSBfuKUI0EUH94i3QpB7bTANgEiaK5XEfBbt6H/kHZVYg4552wMDlH5Z NiWgUiiaTUs/cO/iqSYP+Q== 0000051103-94-000009.txt : 19940927 0000051103-94-000009.hdr.sgml : 19940927 ACCESSION NUMBER: 0000051103-94-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940926 SROS: NYSE 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07256 FILM NUMBER: 94550285 BUSINESS ADDRESS: STREET 1: 767 MONTEREY PASS RD CITY: MONTEREY PARK STATE: CA ZIP: 91754 BUSINESS PHONE: 2132641670 10-K 1 FORM 10-K FOR YEAR ENDED JUNE 30, 1994 ================================================================= ============= 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, 1994 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 Identification No.) 767 Monterey Pass Road, Monterey Park, California 91754 (213) 264-1670 (Address of principal executive office (Telephone Number) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock ($1.00 Par Value) New York Stock Exchange, Inc. Pacific Stock Exchange, Inc. 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. At September 7, 1994 there were 4,234,762 shares of Registrant's Common Stock outstanding. The aggregate market value of shares held by non-affiliates was $64,258,369 based on the Composite Tape closing price on that date. DOCUMENTS INCORPORATED BY REFERENCE 1. Registrant's Annual Report to Shareholders for the fiscal year ended June 30, 1994, pages 4 through 16, are incorporated by reference into Parts I and II. 2. Registrant's Proxy Statement dated September 22, 1994 for the Annual Meeting of Shareholders to be held on October 27, 1994 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 manufacturer and supplier of a broad line of quality aluminum, wood, vinyl and glass 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 (213) 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 13 respectively, of the Registrant's 1994 Annual Report to Shareholders and is hereby incorporated by reference. c. NARRATIVE DESCRIPTION OF BUSINESS Processes and Products Building Products Residential. Residential products are fabricated from aluminum, wood and vinyl into a broad line of sliding windows, single hung windows, double hung windows, casement windows, garden windows, bay and bow windows, special configuration windows, louvre windows, storm sash, 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, commercial windows, entrance doors and frames, interior doors and frames and interior wall systems. These products are utilized in varying combinations to produce systems used for office and commercial construction, remodeling and tenant improvement applications. Aluminum Extrusions. In the extrusion process, heated aluminum billets are hydraulically forced through steel dies to produce a piece of metal of the desired length and cross-section shape. The extrusions are then cut and, when requested, anodized or painted in a variety of finishes in the Company's anodizing and painting departments. The Company currently has five extrusion presses at its Alhambra, California plant and three presses at its plant in Waxahachie, Texas. - 1 - Aluminum extrusions produced by the Company are used in fabricating substantially all of its other aluminum products. In addition, during fiscal 1994 approximately 52% of the extrusions produced were sold to users in its own or other industries, including manufacturers of fixtures, electronic equipment, fitness products, sailboats, skylights and truck bodies. The Company furnishes design services to assist its customers in developing or better utilizing custom extrusions. Glass Products This product group shapes, bends, bevels, etches, polishes and tempers bulk flat glass. The fabricated glass is primarily utilized in the Company's glass furniture lines and in its line of modular store display systems. Glass is also processed to customer specifications for incorporation into their end products, which include residential, patio and office furniture, truck and recreational vehicle windows, light fixtures and appliances. Sales and Distribution The Company markets its residential and commercial building products primarily to independent dealers and distributors, with whom the Company has no long-term contracts. Aluminum extrusions are marketed principally by direct sales to other manufacturers, some of which produce aluminum products of the Company's design. The Company's glass products are marketed to manufacturers, distributors and retailers. Each of the Company's subsidiaries has its own administrative and sales organizations. Sales are made largely in the United States, Europe and Mexico. No customer accounted for more than 3% of net sales in 1994, 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. 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 which would significantly hamper its operations. Bulk 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. Wood, vinyl, hardware, fasteners and screening are purchased from outside sources. - 2 - 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). 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. Patents The Company has no material patents, either issued or pending, and is not a party to any significant licensing agreements. 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 dealers and distributors, the Company faces competition primarily from numerous fabricators. 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. - 3 - 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. Employees As of June 30, 1994, the Company had approximately 1,900 full-time employees. d. FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS The information concerning sales, net income and identifiable assets of foreign and domestic operations for fiscal years 1994, 1993 and 1992 is set forth in Note 10 to the consolidated financial statements included on page 13 of the Company's 1994 Annual Report incorporated herein by reference. - 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 (1) Use Building Products: Alhambra, California 214,000 Aluminum extrusions, foundry, anodizing and painting Waxahachie, Texas 206,000 Aluminum extrusions, foundry, anodizing and painting South Gate, California 189,000 Residential products Hayward, California 103,000 Residential products Phoenix, Arizona 57,000 Residential products Riverside, California 40,000(L) Residential products Vernon, California 134,000 Commercial products Bedford Park, Illinois 81,000 Commercial products Waxahachie, Texas 134,000 Commercial products Denver, Colorado 16,000(L) Commercial Products Rock Hill, South Carolina 74,000(E) Commercial products Bridgeport, New Jersey 81,000 Commercial products Houston, Texas 57,000 Commercial products Dallas, Texas 15,000 Commercial products Waxahachie, Texas 60,000 Commercial products Amsterdam, the Netherlands 165,000 Commercial and residential products Glass Products: South Gate, California 86,000(L) Glass fabrication and tempering Rock Hill, South Carolina 84,000(E) Glass fabrication and tempering Administration: Monterey Park, California 19,000(L) Executive offices ______________________ (1) Includes manufacturing, warehouse and office space; excludes construction in process, parking and yard storage space. (E) Indicates encumberment of real property. (L) Indicates leased premises. Of the 1,815,000 square feet exhibited above, 1,654,000 square feet are owned by the Company. The balance of 161,000 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 which 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 STOCK HOLDER MATTERS The market and dividend information is included on pages 14 and 16 of the Company's 1994 Annual Report to Shareholders and is incorporated herein by reference. There are no restrictions of future cash dividends. There were approximately 600 shareholders of record of the Company's common stock at June 30, 1994. 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 1994 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 4 and 5 of the Company's 1994 Annual Report to Shareholders and is incorporated herein by reference. 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 which 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 27, 1994, 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, 1994 and 1993 Statements for the three years ended June 30, 1994 - Income Shareholders' equity Cash flows Notes to consolidated financial statements 2. Financial Statement Schedules Report of Independent Accountants on Financial Statement Schedules F-1 Schedules for the three years ended June 30, 1994 - V Property, plant and equipment F-2 VI Accumulated depreciation of property, plant and equipment F-3 VIII Valuation and qualifying accounts F-4 X Supplementary income statement information F-5 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 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 security holders, Form 10-Q or quarterly report to security holders. 22. Subsidiaries of the registrant. (b) No reports on Form 8-K were required to be filed during the last quarter of 1994. NOTE: The consolidated statements referred to above are included in the 1994 Annual Report to Shareholders and are incorporated herein by reference. No section of the Annual Report to Shareholders other than pages 4 through 16 is deemed to be filed with the Commission. - 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 20, 1994 By: DAVID C. TREINEN David C. Treinen Vice President-Finance; Secretary 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 20, 1994 Cornelius C. Vanderstar Chief Executive Officer JOHN P. CUNNINGHAM Director, President and September 20, 1994 John P. Cunningham Chief Operating Officer HUGH E. CURRAN Director and Vice President- September 20, 1994 Hugh E. Curran Sales DAVID C. TREINEN Director and Vice President- September 20, 1994 David C. Treinen Finance; Secretary and Chief Financial Officer MITCHELL K. FOGELMAN Asst. Vice President-Finance; September 20, 1994 Mitchell K. Fogelman Controller and Chief Accounting Officer JOEL F. McINTYRE Director September 20, 1994 Joel F. McIntyre ALEXANDER VAN DE POL Director September 20, 1994 Alexander van de Pol DONALD J. WILLFONG Director September 20, 1994 Donald J. Willfong
- 9 - REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES To the Board of Directors of International Aluminum Corporation Our audits of the consolidated financial statements referred to in our report dated August 17, 1994 appearing on page 15 of the 1994 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 Schedules listed in Item 14(a)2 of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PRICE WATERHOUSE LLP Los Angeles, California August 17, 1994 F-1 INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT For The Three Years Ended June 30, 1994
Balance at Balance at Beginning Additions Retirements Translation End Classification of Year at Cost and Sales Transfers Adjustment of Year Year ended June 30, 1994 Land $ 6,925,000 $ 340,000 $ - $ - $ (13,000) $ 7,252,000 Buildings and improvements 27,766,000 83,000 10,000 214,000 (138,000) 27,915,000 Machinery and equipment 49,878,000 3,652,000 925,000 270,000 (121,000) 52,754,000 Construction in process - 484,000 - (484,000) - - $84,569,000 $4,559,000 $ 935,000 $ - $ (272,000) $87,921,000 Year ended June 30, 1993 Land $ 6,919,000 $ - $ - $ - $ 6,000 $ 6,925,000 Buildings and improvements 27,096,000 133,000 - 469,000 68,000 27,766,000 Machinery and equipment 48,523,000 2,851,000 1,584,000 29,000 59,000 49,878,000 Construction in process 25,000 495,000 15,000 (498,000) (7,000) - $82,563,000 $3,479,000 $1,599,000 $ - $ 126,000 $84,569,000 Year ended June 30, 1992 Land $ 6,945,000 $ 92,000 $ 155,000 $ - $ 37,000 $ 6,919,000 Buildings and improvements 26,468,000 48,000 - 288,000 292,000 27,096,000 Machinery and equipment 47,004,000 1,542,000 1,143,000 863,000 257,000 48,523,000 Construction in process 618,000 558,000 - (1,151,000) - 25,000 $81,035,000 $2,240,000 $1,298,000 $ - $ 586,000 $82,563,000 /TABLE INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT For The Three Years Ended June 30, 1994
Balance at Additions Balance at Beginning Charged to Retirements Translation End Classification of Year Income (1) and Sales Adjustment of Year Year ended June 30, 1994 Buildings and improvements $ 9,840,000 $ 754,000 $ 1,000 $ (93,000) $10,500,000 Machinery and equipment 34,688,000 3,809,000 764,000 (100,000) 37,633,000 $44,528,000 $4,563,000 $ 765,000 $ (193,000) $48,133,000 Year ended June 30, 1993 Buildings and improvements $ 9,020,000 $ 780,000 $ - $ 40,000 $ 9,840,000 Machinery and equipment 32,229,000 3,694,000 1,283,000 48,000 34,688,000 $41,249,000 $4,474,000 $1,283,000 $ 88,000 $44,528,000 Year ended June 30, 1992 Buildings and improvements $ 8,035,000 $ 795,000 $ - $ 190,000 $ 9,020,000 Machinery and equipment 29,046,000 3,861,000 886,000 208,000 32,229,000 $37,081,000 $4,656,000 $ 886,000 $ 398,000 $41,249,000 ____________________________ (1) The annual provisions for depreciation have been computed using estimated useful lives as follows: Buildings and improvements ................... 20-40 years Machinery and equipment ...................... 3-16 years
INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS For The Three Years Ended June 30, 1994
Balance at Amounts Amounts Balance at Beginning Charged Written End Description of Year to Income Off of Year Reserves for doubtful accounts - 1994 $673,000 $647,000 $505,000 $815,000 1993 669,000 766,000 762,000 673,000 1992 723,000 619,000 673,000 669,000
F-4 INTERNATIONAL ALUMINUM CORPORATION AND SUBSIDIARIES SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION For The Three Years Ended June 30, 1994
Description 1994 1993 1992 Maintenance and repairs $4,992,000 $4,333,000 $4,578,000 Depreciation of property, plant and equipment 4,563,000 4,474,000 4,656,000 Taxes other than income - Payroll 5,474,000 5,323,000 5,435,000 Property and other 1,571,000 1,554,000 1,548,000 _________________________ Note: Amounts for rents, royalties and advertising costs are not presented as such amounts are less than 1% of total sales and revenues.
F-5 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. [CAPTION] Jurisdiction of Name of Subsidiary Organization International Window Corporation California International Extrusion Corporation California United States Aluminum Corporation California General Window Corporation* California International California Glass Corporation California United States Aluminum Corporation-Illinois California International Window-Arizona, Inc. California United States Aluminum Corporation-Texas Texas International Extrusion Corporation-Texas California United States Aluminum Corporation-Carolina California International Carolina Glass Corporation California Ragland Manufacturing Company, Inc. Texas United States Aluminum Corporation-Northeast California Maestro Products, Inc. California Eland-Brandt, B.V. The Netherlands ______________________________________________ * dba International Window-Northern California Exhibit 22 EX-13 2 ANNUAL REPORT FOR YEAR ENDED JUNE 30, 1994 INTERNATIONAL ALUMINUM CORPORATION 1994 ANNUAL REPORT COMPANY PROFILE INTERNATIONAL ALUMINUM CORPORATION is an integrated manufacturer and supplier of a broad line of quality aluminum, wood, vinyl and glass products. The Company is headquartered in Monterey Park, California and has approximately 1,900 employees. Operations are conducted through fourteen domestic subsidiaries and one foreign subsidiary. COMMERCIAL PRODUCTS - Curtain walls, window walls, storefront framing, commercial windows, entrance doors and frames, interior doors and frames and interior glazing systems. RESIDENTIAL PRODUCTS - Aluminum, wood, vinyl and composite products including sliding windows, single hung windows, double hung windows, casement windows, garden windows, bay and bow windows, special configuration windows, louvre windows, storm sash, patio doors, wardrobe mirror doors, tub enclosures and showers. ALUMINUM EXTRUSIONS - Mill finish, anodized, painted and fabricated extrusions. GLASS PRODUCTS - Distinctive lines of glass furniture, modular display systems, tempering, etching and fabrication of flat glass. TABLE OF CONTENTS Financial Highlights 1 Letter to Shareholders 2 Selected Financial Data 4 Management's Discussion and Analysis of Financial Condition and Results of Operations 4 Consolidated Financial Statements 6 Notes to Consolidated Financial Statements 10 Quarterly Stock Information 14 Report of Independent Accountants 15 Corporate Information 16 List of Subsidiaries 17 FINANCIAL HIGHLIGHTS Fiscal Years Ended June 30, 1994, 1993 and 1992
1994 1993 1992 Net sales $174,773,000 $152,195,000 $158,323,000 Income from operations $ 11,128,000 $ 4,148,000 $ 860,000 Net income $ 8,795,000 $ 3,602,000 $ 876,000 Per Share Data: Net income $2.08 $ .85 $ .21 Dividends $1.00 $1.00 $1.00 /TABLE TO OUR SHAREHOLDERS As fiscal 1994 unfolded we experienced progressive improvement in most of our markets. Construction activity of all types accelerated throughout much of the United States as the year progressed with the only significant exception being here in California. While we received some minimal local benefit from reconstruction activity related to the January earthquake, the quake's greatest effect was to add to California's already major economic woes and further dampen the State's already lagging emergence from the recession. Since historically roughly 45 percent of our revenues have been derived from construction related activities in California, the slow recovery here has somewhat dampened our overall rebound from the market stagnation of the past several years. Notwithstanding the above, we are generally satisfied with the progress made during the past year. On a revenue increase of 15 percent, we were able to more than double net income from operations to $1.74 per share. While this is still far short of that recorded in 1989 and 1990, we feel it represents acceptable achievement and supports the moves which we have made to adapt to vastly different market conditions. The resurgence of our Commercial Products Group contributed significantly to our improved profitability. Not only did this Group generate dramatically improved earnings but the increased volume of aluminum extrusions channeled through it helped both of our extrusion plants to return to a profitable position. The conversion of our eastern United States Aluminum facilities into warehouse service centers has further proven to have been the right move. We are currently in the process of opening a satellite storefront warehouse facility in Houston which follows the one opened in mid-year in Denver. We are planning to establish additional outlets in the East and Southeast in the months to come. Our aluminum extrusion and finishing plants in California and Texas both achieved remarkable turnarounds. They are extremely dependent on heavy sustained volume due to the large fixed costs with which they are burdened. Improved intercompany purchases combined with major increases in outside volume at both plants was the primary reason for this Group's improved results. Also as a result of the extrusion industry throughout the United States operating at close to full capacity and with extended lead times, we have found it possible to partially restore eroded margins. The lack of recovery of our Residential Products Group has been a disappointment. This Group is heavily dependent on the California building market which, while up slightly, still badly lags the rest of the Country. Conversely, Arizona is experiencing a true building boom and our plant in Phoenix is doing extremely well. As previously announced, we will be breaking ground there shortly on a new 100,000 square foot plant to enable us to better serve this expanding market. Ragland Manufacturing, our interior door frame and wall system subsidiary headquartered in Houston, continued to do well. During the year Ragland, Mitsubishi Kasei and Lasco Systems of Dallas co-developed an advanced "clean room" product line which shows good promise for use in the electronic component and pharmaceutical industries. Results from both International California Glass and International Carolina Glass showed marked improvement. These glass fabricating companies are redirecting their marketing efforts more in the direction of the relatively stable display industry and away from dependence on the somewhat trendy heavy glass furniture business. Our venture into the retail factory outlet mall business in South Carolina was less than a resounding success and has been dropped. Eland-Brandt in Amsterdam had another poor year. Construction activity in Europe remains extremely soft and Eland-Brandt's ability to downsize and reduce its labor cost is constrained by government regulations. Finally, after eight months of negotiations, it has been given authorization to lay off approximately ten percent of its workforce. In March we sold our metal distribution company in Tijuana, Mexico to our resident manager. We have an ongoing supply agreement with the new management. As a result, our sales volume into that market should be essentially unaffected. Financially the Company remains in good shape. Working capital at yearend stood at $63.4 million while total shareholders' equity increased to $103.4 million. At June 30 our current ratio was 4.2 to 1 and our long term debt had declined to $1.1 million. Early in the year the mandatory adoption of Financial Accounting Standards No. 109 resulted in a one-time tax benefit of $1,430,000 or $.34 per share. Our major task in the coming year will be to attempt to return our California residential operations to their former levels of income contribution. To this end, new product development and redirected marketing efforts are currently under way. While in the past year we made some progress in the direction of non-construction diversification, it will be our intent to continue this search in the year to come in order to reduce our heavy dependency on cyclical construction markets. Cornelius C. Vanderstar John P. Cunningham Chairman President September 2, 1994 SELECTED FINANCIAL DATA
Year Ended June 30 1994 1993 1992 1991 1990 Sales and Earnings - Building products Commercial $ 66,843,000 $ 60,340,000 $ 62,179,000 $ 73,552,000 $ 93,133,000 Residential 52,081,000 49,308,000 52,696,000 55,749,000 70,769,000 Extrusions 38,616,000 28,585,000 28,963,000 30,397,000 32,420,000 157,540,000 138,233,000 143,838,000 159,698,000 196,322,000 Glass products 17,233,000 13,962,000 14,485,000 14,657,000 15,831,000 Total net sales $174,773,000 $152,195,000 $158,323,000 $174,355,000 $212,153,000 Income before accounting change $ 7,365,000 $ 3,602,000 $ 876,000 $ 6,243,000 $ 15,772,000 Accounting change 1,430,000 Net income $ 8,795,000 $ 3,602,000 $ 876,000 $ 6,243,000 $ 15,772,000 Per common share: Income before accounting change $1.74 $ .85 $ .21 $1.46 $3.52 Accounting change .34 Net income $2.08 $ .85 $ .21 $1.46 $3.52 Dividends declared $1.00 $1.00 $1.00 $1.00 $1.00 Financial Data at Year End - Working capital $ 63,452,000 $ 61,447,000 $ 61,044,000 $ 61,655,000 $ 63,507,000 Total assets 129,030,000 123,938,000 122,286,000 129,377,000 134,701,000 Long-term debt 1,103,000 1,665,000 2,226,000 2,787,000 3,355,000 Shareholders' equity 103,435,000 98,947,000 99,427,000 102,188,000 105,039,000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Significant Changes in Results of Operations 1994 vs. 1993 Fiscal year 1994 net sales increased by $22,578,000 or 14.8% from the fiscal year 1993 level. This increase is comprised of a $24,165,000 increase in domestic sales which was offset by a $1,587,000 decrease in foreign sales. The domestic sales increase reflects improvements posted by each of the Company's domestic product groups. The most significant domestic increases were posted by the Aluminum Extrusion Group and the Commercial Products Group which reflect the upswing in activity in the manufacturing and commercial construction segments of the economy. Gross profit was 29.2% of sales in 1994 as compared with 27.9% in 1993, primarily reflecting the production cost efficiencies in the Aluminum Extrusion and Commercial Products lines resulting from significantly increased volume. This increase was offset by increases in production costs at the two California residential products companies necessitated by the introduction of a new line of more energy efficient products required to meet stringent energy standards mandated by the California Energy Commission. Selling, general and administrative expenses were 22.8% of sales in 1994 as compared with 25.2% in 1993. Expenses in the current year have risen by $1,548,000 primarily due to additional distribution costs associated with the increased volumes of business. The decrease in investment income relates to significant decreases in the market values of interest rate sensitive securities during the year. 1993 vs. 1992 Net sales for fiscal 1993 decreased by $6,128,000 or 3.9% from net sales of fiscal 1992. This decrease consists of a $3,582,000 decrease in domestic sales and a $2,546,000 decrease in foreign sales. The overall sales decrease reflects the continued stagnant economies of the United States and Western Europe. The prolonged domestic recession has stifled the demand for residential and commercial construction and has created an oversupply of buildings across the United States. Cost of sales decreased to 72.1% of sales in 1993 as compared with 74.9% in 1992. This decrease is primarily related to two factors. The Aluminum Extrusion Group decreased costs of production through operating efficiencies attained from enhanced production procedures. The Commercial Products Group decreased their costs of sales through a restructuring of the eastern plants into warehouse service centers supplied by the Texas plant. Selling, general and administrative expenses in 1993 were $504,000 below those of 1992. This decrease is primarily related with decreased selling costs due to reduced expenditures for advertising. The increase in investment income directly relates to significantly increased rates of return on the Company's investable funds. Liquidity and Capital Resources Working capital at June 30, 1994 was $63,452,000, an increase of $2,005,000 or 3.3% over the June 30, 1993 level and an increase of $2,408,000 or 3.9% over the June 30, 1992 level. The ratio of current assets to current liabilities was 4.2 at the end of 1994 compared to 4.6 at the end of 1993 and 5.2 at the end of 1992. Thus, the Company continues to be in excellent position to meet its short-term requirements. Funds in excess of current operating requirements are invested in marketable securities and short-term interest-bearing instruments. Capital expenditures for property, plant and equipment of approximately $4,559,000 in 1994, $3,479,000 in 1993 and $2,240,000 in 1992 were financed through internal cash flow. The Company's projected capital expenditures for fiscal 1995 include $3,000,000 for scheduled expansion of production capacity in addition to the normal annual expenditures for replacement items. The Company anticipates financing these expenditures through internal cash flow. The Company had $10,000,000 in available credit at the end of 1994 under a short-term borrowing arrangement witha bank. CONSOLIDATED BALANCE SHEETS June 30, 1994 and 1993
Assets 1994 1993 Current assets: Cash $ 5,973,000 $ 4,847,000 Short-term investments 9,727,000 14,407,000 Accounts receivable, less reserve of $815,000 in 1994 and $673,000 in 1993 34,715,000 29,620,000 Unbilled receivables 1,055,000 1,441,000 Inventories 28,741,000 25,942,000 Prepaid expenses 1,580,000 1,529,000 Future income tax benefits 1,326,000 827,000 Total current assets 83,117,000 78,613,000 Property, plant and equipment, at cost: Land 7,252,000 6,925,000 Buildings and improvements 27,915,000 27,766,000 Machinery and equipment 52,754,000 49,878,000 87,921,000 84,569,000 Less - Accumulated depreciation 48,133,000 44,528,000 39,788,000 40,041,000 Other assets: Costs in excess of net assets of purchased businesses 4,972,000 5,105,000 Other 1,153,000 179,000 6,125,000 5,284,000 $129,030,000 $123,938,000 See accompanying notes to consolidated financial statements. /TABLE CONSOLIDATED BALANCE SHEETS June 30, 1994 and 1993
Liabilities and Shareholders' Equity 1994 1993 Current liabilities: Accounts payable $ 8,449,000 $ 7,860,000 Accrued liabilities 8,877,000 8,720,000 Current portion of long-term debt 562,000 422,000 Income taxes payable 1,777,000 164,000 Total current liabilities 19,665,000 17,166,000 Long-term debt 1,103,000 1,665,000 Other liabilities: Deferred income taxes 4,466,000 5,827,000 Other 361,000 333,000 4,827,000 6,160,000 Commitments (Note 7) Shareholders' equity: Capital Stock - Preferred, $10.00 par value - Authorized - 500,000 shares Outstanding - none Common, $1.00 par value - Authorized - 10,000,000 shares Outstanding - 4,230,780 shares in 1994 and 4,220,463 shares in 1993 4,704,000 4,694,000 Paid-in capital 3,359,000 3,230,000 Retained earnings, including cumulative translation adjustment of $2,228,000 in 1994 and $2,446,000 in 1993 95,372,000 91,023,000 103,435,000 98,947,000 $129,030,000 $123,938,000 /TABLE CONSOLIDATED STATEMENTS OF INCOME For the years ended June 30, 1994, 1993 and 1992
1994 1993 1992 Net sales $174,773,000 $152,195,000 $158,323,000 Cost of sales 123,725,000 109,675,000 118,587,000 Gross profit 51,048,000 42,520,000 39,736,000 Selling, general and administrative expenses 39,920,000 38,372,000 38,876,000 Income from operations 11,128,000 4,148,000 860,000 Investment income 479,000 1,428,000 771,000 Interest expense (102,000) (134,000) (225,000) Income before income taxes and cumulative effect of accounting change 11,505,000 5,442,000 1,406,000 Provision for income taxes 4,140,000 1,840,000 530,000 Income before cumulative effect of accounting change 7,365,000 3,602,000 876,000 Cumulative effect of accounting change for income taxes 1,430,000 Net income $ 8,795,000 $ 3,602,000 $ 876,000 Earnings per common share: Income before cumulative effect of accounting change $1.74 $.85 $.21 Cumulative effect of accounting change .34 Net income $2.08 $.85 $.21 /TABLE CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the years ended June 30, 1994, 1993 and 1992
Common Stock Number Paid-in Retained of Shares Amount Capital Earnings Total Balance, June 30, 1991 4,204,939 $4,678,000 $3,092,000 $94,418,000 $102,188,000 Exercise of stock options 13,484 14,000 115,000 129,000 Translation adjustment 448,000 448,000 Cash dividends (4,214,000) (4,214,000) Net income 876,000 876,000 Balance, June 30, 1992 4,218,423 4,692,000 3,207,000 91,528,000 99,427,000 Exercise of stock options 2,040 2,000 23,000 25,000 Translation adjustment 113,000 113,000 Cash dividends (4,220,000) (4,220,000) Net income 3,602,000 3,602,000 Balance, June 30, 1993 4,220,463 4,694,000 3,230,000 91,023,000 98,947,000 Exercise of stock options 10,317 10,000 129,000 139,000 Translation adjustment (218,000) (218,000) Cash dividends (4,228,000) (4,228,000) Net income 8,795,000 8,795,000 Balance, June 30, 1994 4,230,780 $4,704,000 $3,359,000 $95,372,000 $103,435,000 See accompanying notes to consolidated financial statements. /TABLE CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended June 30, 1994, 1993 and 1992
1994 1993 1992 Cash flows from operating activities: Net income $ 8,795,000 $ 3,602,000 $ 876,000 Adjustments for noncash transactions: Depreciation and amortization 4,696,000 4,607,000 4,790,000 Change in deferred income taxes (699,000) (94,000) (110,000) Change in accounting for income taxes (1,430,000) Changes in assets and liabilities: Receivables (4,883,000) 743,000 1,376,000 Inventories (2,846,000) (1,552,000) 5,086,000 Prepaid expenses and other (1,020,000) 40,000 586,000 Accounts payable 646,000 1,842,000 (3,435,000) Accrued liabilities and other 221,000 1,265,000 (666,000) Income taxes payable 1,871,000 (293,000) 441,000 Net cash provided by operating activities 5,351,000 10,160,000 8,944,000 Cash flows from investing activities: Capital expenditures (4,559,000) (3,479,000) (2,240,000) Proceeds from sales of capital assets 170,000 317,000 412,000 Net cash used in investing activities (4,389,000) (3,162,000) (1,828,000) Cash flows from financing activities: Repayment of long-term debt (422,000) (700,000) (707,000) Exercise of stock options 139,000 25,000 129,000 Dividends paid to shareholders (4,228,000) (4,220,000) (4,214,000) Net cash used in financing activities (4,511,000) (4,895,000) (4,792,000) Effect of exchange rate changes on cash (5,000) (100,000) (50,000) Net change in cash and short-term investments (3,554,000) 2,003,000 2,274,000 Cash and short-term investments at beginning of year 19,254,000 17,251,000 14,977,000 Cash and short-term investments at end of year $15,700,000 $19,254,000 $17,251,000 See accompanying notes to consolidated financial statements. /TABLE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Significant accounting policies and procedures - (a) Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and all its domestic and foreign subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. To expedite reporting, the Company follows the practice of consolidating its foreign subsidiary using a year ending one month prior to the June 30th year end of its domestic subsidiaries. (b) Short-term Investments Short-term investments include preferred stocks, certificates of deposit and money market funds. During fiscal year 1993, the Company adopted Statement of Financial Accounting Standards No. 115 - Accounting For Certain Investments in Debt and Equity Securities. The preferred stocks are classified as "Trading Securities"; consequently, unrealized holding gains/losses are being currently recognized. Investment income includes unrealized holding losses of $581,000 in 1994 and unrealized holding gains of $487,000 in 1993. (c) Long-term contracts Certain sales of the Company's Netherlands subsidiary, Eland- Brandt, B.V., are made under contracts covering extended periods of time. These contracts are accounted for by the percentage-of-completion method on the basis of total costs of shipments compared to total estimated costs. Costs and estimated earnings in excess of billings on uncompleted contracts are classified as "Unbilled receivables". It is anticipated that all such receivables will be collected within one year. (d) Inventories Inventories, stated at the lower of cost (first-in, first-out) or market, are summarized as follows: 1994 1993 Raw materials $21,415,000 $18,424,000 Work in process 2,332,000 3,374,000 Finished goods 4,994,000 4,144,000 $28,741,000 $25,942,000 (e) Depreciation and amortization policies 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 purpose 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 $6,095,000 are generally being amortized using the straight-line method over periods of up to forty years. Accumulated amortization totalled $1,123,000 at June 30, 1994 and $990,000 at June 30, 1993. Note 2. Earnings per common share - Earnings per common share have been computed based upon the weighted average number of shares outstanding; 4,226,733 shares in 1994, 4,219,401 shares in 1993 and 4,211,372 shares in 1992. Note 3. Statement of Cash Flows - All short-term investments qualify as cash equivalents. Cash payments for interest were $81,000 in 1994, $168,000 in 1993 and $246,000 in 1992. Cash payments for income taxes were $2,957,000 in 1994, $2,214,000 in 1993 and $196,000 in 1992. Note 4. Short-term debt and line of credit - The Company has a loan agreement with a domestic bank providing for a $10,000,000 unsecured short-term line of credit at 55 basis points below the bank's prevailing prime interest rate (6.70 percent at June 30, 1994). There was no amount outstanding under the agreement at June 30, 1994. Note 5. Accrued Liabilities - Components of accrued liabilities at June 30, 1994 and 1993 are: 1994 1993 Wages and compensated absences $4,666,000 $3,770,000 Taxes, other than income taxes 1,411,000 1,211,000 Insurance 752,000 1,928,000 Dividends 1,058,000 1,055,000 Other 990,000 756,000 $8,877,000 $8,720,000 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 6. Long-term debt - Long-term debt consists primarily of an Industrial Development Revenue Bond that financed the development of two plant facilities in Rock Hill, South Carolina. The bond is secured by first mortgage liens on the two properties. Interest payments, at 73% of the floating prime rate, and principal installments of $138,000 are paid quarterly. Future payments due on the long-term debt total $562,000 for 1995, $562,000 for 1996 and $541,000 for 1997. Note 7. Commitments - The Company is committed under lease agreements expiring at various dates to 1998. Certain of the leases have renewal options for periods ranging from two to ten 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 for the three years ended June 30, 1994 was $645,000 in 1994, $606,000 in 1993 and $555,000 in 1992. Real property rental commitments for the next three fiscal years are $574,000 in 1995, $291,000 in 1996 and $108,000 in 1997. Note 8. Stock options - At June 30, 1994 there were 572,676 common shares reserved and available for issuance to certain executive and managerial employees under the Company's Stock Option Plans. All options outstanding under the plans are immediately exercisable and expire in fiscal year 1998. At June 30, 1994 there were 72,676 incentive stock options outstanding. Payment upon exercise may be either cash or the delivery of Company common stock of equivalent value. Shares surrendered by optionees (2,133 shares in 1994 and 900 in 1993) are immediately retired. The transactions for shares under options for the two years ended June 30, 1994 were: Option price Number of per share shares Outstanding, June 30, 1992 $15.38 88,066 Exercised 15.38 ( 2,940) Outstanding, June 30, 1993 15.38 85,126 Exercised 15.38 (12,450) Outstanding, June 30, 1994 $15.38 72,676 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9. Income taxes - In July 1993, the Company adopted Statement of Financial Accounting Standards No. 109 (FAS 109), Accounting for Income Taxes. The adoption of FAS 109 changed the Company's method of accounting for income taxes deferral method to an asset and liability approach which requires the recognition of deferred tax liabilities and assets for the expected future consequences of temporary differences between the carrying amounts for financial reporting purposes and the tax bases of assets and liabilities. As of July 1, 1993, the Company recorded a tax benefit of $1,430,000 or $.34 per share, which represents the net decrease to the deferred tax liability as of that date. This amount has been reflected in current year net income as the cumulative effect of a change in accounting principle. The components of income before United States and foreign income taxes are:
1994 1993 1992 Domestic $12,210,000 $6,624,000 $1,084,000 Foreign (705,000) (1,182,000) 322,000 $11,505,000 $5,442,000 $1,406,000 The provision for income taxes is comprised of the following: 1994 1993 1992 Current - Federal $ 4,142,000 $1,978,000 $ 428,000 State 770,000 333,000 79,000 Foreign (73,000) (377,000) 133,000 4,839,000 1,934,000 640,000 Deferred - Federal (588,000) (70,000) (77,000) State (73,000) 20,000 (31,000) Foreign (38,000) (44,000) (2,000) (699,000) (94,000) (110,000) $ 4,140,000 $1,840,000 $ 530,000 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: 1994 1993 1992 Taxes on book income at statutory rate $ 3,912,000 $1,850,000 $ 478,000 Increases (decreases) resulting from: State income taxes, net of Federal income tax benefit 460,000 233,000 32,000 Dividend exclusion (195,000) (134,000) (7,000) Foreign tax credit carryforward (157,000) (129,000) Other 120,000 20,000 27,000 Provision for income taxes $ 4,140,000 $1,840,000 $ 530,000 /TABLE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 which comprise the deferred tax assets and liabilities at June 30, 1994 are as follows:
Accounts receivable $ 316,000 Inventory 309,000 Accrued liabilities 623,000 Other 78,000 Net deferred tax asset $1,326,000 Property, plant and equipment $4,389,000 Other 77,000 Net deferred tax liability $4,466,000
No provision for U.S. taxes has been made for undistributed earnings of foreign subsidiaries since it is expected that the major portion of such earnings will continue to be reinvested for an indefinite period of time. Note 10. Segment and geographical information - The Company is a vertically integrated manufacturer of building products with international operations in The Netherlands.
Sales, net income and identifiable assets for domestic and foreign operations for the last three years are as follows: 1994 1993 1992 Sales: United States $163,238,000 $139,073,000 $142,655,000 Foreign 11,535,000 13,122,000 15,668,000 $174,773,000 $152,195,000 $158,323,000 Net income: United States $ 9,390,000 $ 4,360,000 $ 684,000 Foreign (595,000) (758,000) 192,000 $ 8,795,000 $ 3,602,000 $ 876,000 Identifiable assets: United States $121,127,000 $114,799,000 $112,200,000 Foreign 7,903,000 9,139,000 10,086,000 $129,030,000 $123,938,000 $122,286,000 The Company's equity investment in its consolidated foreign subsidiary was $5,254,000 at June 30, 1994. /TABLE Note 11. Unaudited quarterly financial information - Quarterly financial information for the fiscal years ended June 30, 1994 and 1993 is summarized as follows:
First Second Third Fourth Fiscal Quarter Quarter Quarter Quarter Year 1994 Net sales $42,132,000 $44,539,000 $40,426,000 $47,676,000 $174,773,000 Cost of sales 30,853,000 32,281,000 27,857,000 32,734,000 123,725,000 Net income 2,629,000 1,526,000 1,528,000 3,112,000 8,795,000 Earnings per share .62 .36 .36 .74 2.08 1993 Net sales $40,706,000 $38,189,000 $33,642,000 $39,658,000 $152,195,000 Cost of sales 29,374,000 27,650,000 24,537,000 28,114,000 109,675,000 Net income (loss) 1,234,000 896,000 (126,000) 1,598,000 3,602,000 Earnings (loss) per share .29 .21 (.03) .38 .85 During the first quarter of fiscal 1994, the Company adopted Statement of Financial Accounting Standards No. 109 - Accounting for Income Taxes which increased net income by $1,430,000 or $.34 per share. During the third quarter of fiscal 1994, the Company sold its International Aluminum, S. de R.L. de C.V.subsidiary. This operation, which was located in Tijuana, Mexico, was sold for its approximate net book carrying value.
QUARTERLY STOCK INFORMATION
1994 1993 High Low Dividend High Low Dividend First Quarter $24 1/2 $22 1/8 $ .25 $20 3/8 $18 3/8 $ .25 Second Quarter 24 3/8 21 5/8 .25 21 1/2 19 1/8 .25 Third Quarter 28 23 5/8 .25 24 20 5/8 .25 Fourth Quarter 26 3/4 23 7/8 .25 23 7/8 23 1/4 .25 Year $28 $21 5/8 $1.00 $24 $18 3/8 $1.00 /TABLE REPORT OF INDEPENDENT ACCOUNTANTS P PRICE WATERHOUSE LLP W 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, shareholders' equity and cash flows present fairly, in all material respects, the financial position of International Aluminum Corporation and its subsidiaries at June 30, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 1994, in conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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. As discussed in Note 9 to the consolidated financial statements, the Company changed its method of accounting for income taxes during the year ended June 30, 1994. PRICE WATERHOUSE 400 South Hope Street Los Angeles, CA 90071-2889 August 17, 1994 CORPORATE INFORMATION DIRECTORS OFFICERS Cornelius C. Vanderstar John P. Cunningham Chairman of the Board President John P. Cunningham Hugh E. Curran Vice President - Sales Hugh E. Curran David C. Treinen David C. Treinen Vice President - Finance; Secretary Joel F. McIntyre Ronald L. Rudy Partner in the Law Firm of Vice President - Manufacturing McIntyre & Lubeck Mitchell K. Fogelman Alexander van de Pol Asst. Vice President - Finance; Retired President and Controller Chairman of the Board of Commonwealth Metals-Pacific Michael S. Snodgrass Asst. Vice President - Personnel & Donald J. Willfong Industrial Relations Executive Vice President of Sutro & Co. Roland A. Young Treasurer; Assistant Secretary STOCK TRANSFER AGENT AND REGISTRAR Continental Stock Transfer 2 Broadway New York, N.Y. 10004 (212) 509-4000 ANNUAL SHAREHOLDERS MEETING STOCK EXCHANGE LISTINGS 2 p.m., Thursday, October 27, 1994 New York Stock Exchange International Extrusion Corporation Pacific Stock Exchange 1000 Meridian Avenue Trading Symbol - IAL Alhambra, California 91803 SUBSIDIARIES BY PRODUCT GROUP
COMMERCIAL - RESIDENTIAL - 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 United States Aluminum Corporation-Texas International Window-Arizona, Inc. Waxahachie, Texas Phoenix, Arizona Denver, Colorado Maestro Products, Inc. United States Aluminum Corporation-Carolina Riverside, California Rock Hill, South Carolina Eland-Brandt, B.V. United States Aluminum Corporation-Northeast Amsterdam, The Netherlands Bridgeport, New Jersey Ragland Manufacturing Company, Inc. Houston, Texas Dallas, Texas Waxahachie, Texas ALUMINUM EXTRUSIONS - GLASS - International Extrusion Corporation International California Glass Corporation Alhambra, California South Gate, California International Extrusion Corporation-Texas International Carolina Glass Corporation Waxahachie, Texas Rock Hill, South Carolina
767 Monterey Pass Road Monterey Park, California 91754 (213) 264-1670 -----END PRIVACY-ENHANCED MESSAGE-----