SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 31, 2001 |
| Commission File Number 1-7256 |
INTERNATIONAL ALUMINUM CORPORATION
(Exact name of Registrant as specified in its charter)
California |
| 95-2385235 |
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767 Monterey Pass Road
Monterey Park, California 91754
(323) 264-1670
(Principal executive office)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YesXNo
At May 1, 2001 there were 4,244,794 shares of Common Stock outstanding.
Page 1 of 10 Pages
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
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PART I. Financial Information |
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Consolidated Balance Sheets - |
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Consolidated Statements of Income - |
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Consolidated Statements of Cash Flows - |
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Notes to Consolidated Financial Statements | 6 |
Management's Discussion and Analysis of |
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Signatures | 10 |
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PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Assets |
| Unaudited |
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| Audited | ||
Current assets: |
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Total current assets | 83,701,000 | 89,260,000 | |||||
Property, plant and equipment, at cost | 111,787,000 | 111,149,000 | |||||
Net property, plant and equipment | 52,061,000 | 55,694,000 | |||||
Other assets: |
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Total other assets | 9,239,000 | 9,631,000 | |||||
$ | 145,001,000 | $ | 154,585,000 | ||||
Liabilities and Shareholders' Equity | |||||||
Current liabilities: |
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Total current liabilities | 17,165,000 | 25,674,000 | |||||
Deferred income taxes | 4,585,000 | 4,585,000 | |||||
Total liabilities | 21,750,000 | 30,259,000 | |||||
Shareholders' equity | 123,251,000 | 124,326,000 | |||||
$ | 145,001,000 | $ | 154,585,000 |
See accompanying notes to consolidated financial statements.
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Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
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| Three Months Ended |
| Nine Months Ended | |||||
2001 | 2000 | 2001 | 2000 | ||||||
Net sales | $ | 49,237,000 | $ | 50,878,000 | $ | 155,502,000 | $ | 160,748,000 | |
Net income (loss) | $ | (216,000) | $ | (1,224,000) | $ | 3,050,000 | $ | 400,000 | |
Basic and diluted EPS: |
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$(.05) | $(.29) | $.72 | $.09 | ||||||
Shares used to compute EPS: |
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Cash dividends per share | $.30 | $.30 | $.90 | $.90 |
See accompanying notes to consolidated financial statements. |
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Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended | |||
2001 | 2000 |
Cash flows from operating activities:
Net income | $ | 3,050,000 5,584,000 | $ | 400,000 5,339,000 | |
Net cash provided by (used in) |
| 17,060,000 |
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| (5,253,000) |
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Cash flows from investing activities:
Capital expenditures | (4,610,000) | (6,558,000) | |||
Net cash used in investing activities | (1,423,000) | (3,614,000) | |||
Cash flows from financing activities:
Dividends paid to shareholders | (3,820,000) | (3,862,000) | |||
Net cash provided by (used in) | (13,290,000) | 7,257,000 | |||
Net change in cash and cash equivalents | 2,347,000 | (1,610,000) | |||
Cash and cash equivalents at beginning | 1,678,000 | 2,269,000 | |||
Cash and cash equivalents at end of period | $ | 4,025,000 |
| 659,000 |
See accompanying notes to consolidated financial statements.
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Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (which consist solely of normal recurring adjustments unless otherwise disclosed) necessary to present fairly, in all material respects, its financial position as of March 31, 2001 and June 30, 2000, and the results of operations for the three and nine month periods ended March 31, 2001 and 2000 and the cash flows for the nine month periods ended March 31, 2001 and 2000. The results of operations for the three and nine month periods ended March 31, 2001 and 2000 are not necessarily indicative of the results to be expected for the full year.
The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K.
Comprehensive Income
Comprehensive income, defined as net income and other comprehensive income, for the third quarters ended March 31, 2001 and 2000 was $(460,000) and $(1,237,000), respectively. Comprehensive income for the nine months ended March 31, 2001 and 2000 was $2,745,000 and $433,000, respectively. Other comprehensive income includes foreign currency translation adjustments recorded directly in shareholders' equity.
Balance Sheet Components | March 31, 2001 | June 30, 2000 | |||
Inventories, lower of FIFO Cost or Market |
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Shareholders' Equity |
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Unaudited
Segment Information
The following presents the Company's net sales, operating income and total assets by operating segment, reconciling to the Company's totals. All data presented in thousands of dollars.
Net Sales: | Three Months Ended | Nine Months Ended | |||||||||
2001 | 2000 | 2001 | 2000 | ||||||||
Commercial | $ | 27,194 | $ | 24,794 | $ | 83,672 | $ | 81,292 | |||
Total | $ | 49,237 | $ | 50,878 | $ | 155,502 | $ | 160,748 |
Operating Income (Loss): |
| Three Months Ended |
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| Nine Months Ended | ||||||
2001 | 2000 | 2001 | 2000 | ||||||||
Commercial | $ | 1,807 | $ | 655 | $ | 8,205 | $ | 5,925 | |||
Total | $ | (492) | $ | (1,953) | $ | 4,860 | $ | 290 |
Total Assets: | March 31, | June 30, | |||||||||
Commercial | $ | 65,100 | $ | 66,937 | |||||||
Total | $ | 145,001 | $ | 154,585 |
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Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Significant Changes in Results of Operations
Net sales decreased by $1,641,000 or 3.2% for the quarter ended March 31, 2001 and by $5,246,000 or 3.3% for the nine months then ended when compared with the respective fiscal 2000 periods. The decreases in sales include reductions of $2,390,000 or 20.3% for the quarter and $5,355,000 or 15.5% for the nine months by the Aluminum Extrusion Group, which continues its marketing efforts to regain customer confidence as a result of last year's severe operational problems. Residential Product Group sales decreased $1,562,000 or 10.9% for the quarter and $1,984,000 or 4.4% for the nine months primarily due to reduced sales to large projects. Current year efforts to garner similar jobs have not been as successful this year compared to prior years for our wood products in Southern California as well as products from our Arizona facility. Partially offsetting these are increases of $2,311,000 or 9.3% for the quarter and $2,093,000 or 2.6% for the nine months by the Commercial Product Group reflecting continuing recovery from last year's raw material supply problems.
Cost of sales, as a percentage of net sales, was relatively unchanged for the nine months ended March 31, 2001, however it decreased by 1.0% for the quarter then ended when compared with the 2000 period. The prior year period for our Aluminum Extrusion Group operations contained unusually high costs associated with downtime and inefficiencies resulting from the conversion to continuous flow manufacturing. Current year efforts to realign costs for this group is largely offset by increased material costs at our Residential and Commercial Group operations.
Selling, general and administrative expenses decreased by $1,342,000 or 10.0% for the quarter and by $5,805,000 or 14.1% for the nine month period. The decreased expenses are primarily attributable to lower employment costs directly related to the aforementioned decrease in sales coupled with the prior year containing nonrecurring costs associated with realigning operating group management teams.
The increase in net interest income for the current quarter compared to the same period last year relates to the increase in funds available for investment. Prior year net interest expense reflected credit line utilization, repaid during the September 2000 quarter, to fund heavy capital expenditures and increases in raw material inventories.
The effective tax rate for the nine months ended March 31, 2001 was 35.9% whereas the comparable period of the prior year was 54.5%. This decrease is primarily attributable to the prior year being unusually high, which resulted from losses incurred in states without related tax benefit coupled with nondeductible expenses being spread over a lower income base.
Unaudited
Liquidity and Capital Resources
Working capital at March 31, 2001 stood at $66,536,000, an increase of $2,950,000 from June 30, 2000. The ratio of current assets to current liabilities is currently 4.9 as compared to 3.5 as of the beginning of the year.
The Company projects net capital expenditures of $8,000,000 for fiscal 2001. These expenditures are for expansion of production capacity as well as normal recurring capitalized replacement items. The Company anticipates financing these expenditures through internal cash flow and the utilization of its line of credit.
The Company's line of credit remains unchanged from that described in the June 30, 2000 Annual Report to Shareholders.
Forward-Looking Information
This report contains forward-looking statements with respect to the financial condition, results of operations and business of the Company. Such items are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
International Aluminum Corporation | |
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Date: | May 11, 2001 | MITCHELL K. FOGELMAN |
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Date: | May 11, 2001 | MICHAEL J. NORRING |
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