SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1993 Commission File Number 1-7256
INTERNATIONAL ALUMINUM CORPORATION
(Exact name of registrant as specified in its charter)
California 95-2385235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Monterey Pass Road, Monterey Park, California 91754
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (213) 264-1670
None
Former name, former address and former fiscal year, if changed since last report
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 the number of shares outstanding of each of the issuer's classes of
common stock.
Class Outstanding at February 1, 1994
Common Stock $1.00 Par Value 4,227,058
Page 1 of 11 Pages
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
Page Nos.
PART I Financial Information
Consolidated Balance Sheets -
December 31, 1993 and June 30, 1993 3-4
Consolidated Statements of Income -
three and six month periods
ended December 31, 1993 and 1992 5
Consolidated Statements of Cash Flows -
six months ended December 31, 1993
and 1992 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II Other Information
Item 4. Submission of Matters to a Vote of
Security Holders 10
Signatures 11
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PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited Audited
Assets Dec. 31, 1993 June 30, 1993
Current assets:
Cash $ 3,516,000 $ 4,847,000
Short-term investments 14,230,000 14,407,000
Accounts receivable, net 31,356,000 29,620,000
Unbilled receivables 1,020,000 1,441,000
Inventories:
Raw materials 17,605,000 18,424,000
Work-in-process 2,284,000 3,374,000
Finished goods 4,991,000 4,144,000
Prepaid expenses 1,881,000 1,529,000
Future income tax benefits 909,000 827,000
Total current assets 77,792,000 78,613,000
____________ ____________
Property, plant and equipment, at cost 86,146,000 84,569,000
Less - Accumulated depreciation (46,331,000) (44,528,000)
39,815,000 40,041,000
____________ ____________
Other assets:
Costs in excess of net assets of
purchased businesses 5,039,000 5,105,000
Other 1,201,000 179,000
6,240,000 5,284,000
____________ ____________
$123,847,000 $123,938,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
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INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited Audited
Liabilities and Shareholders' Equity Dec. 31, 1993 June 30, 1993
Current liabilities:
Accounts payable $ 7,075,000 $ 7,860,000
Accrued liabilities 8,248,000 8,720,000
Current portion of long-term debt 562,000 422,000
Income taxes payable 480,000 164,000
Total current liabilities 16,365,000 17,166,000
____________ ____________
Long-term debt 1,381,000 1,665,000
____________ ____________
Other liabilities:
Deferred income taxes 4,747,000 5,827,000
Other 330,000 333,000
5,077,000 6,160,000
____________ ____________
Shareholders' equity 101,024,000 98,947,000
____________ ____________
$123,847,000 $123,938,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
- 4 -
Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
December 31, December 31,
1993 1992 1993 1992
Net sales $44,539,000 $38,189,000 $86,671,000 $78,895,000
Costs and expenses:
Cost of sales 32,281,000 27,650,000 63,134,000 57,024,000
Selling, general and
administrative expenses 9,950,000 9,137,000 19,714,000 18,779,000
Interest (income) expense, net (118,000) (14,000) (542,000) (328,000)
Income before income taxes and a
change in accounting principle 2,426,000 1,416,000 4,365,000 3,420,000
Provision for income taxes 900,000 520,000 1,640,000 1,290,000
Income before a change in
accounting principle 1,526,000 896,000 2,725,000 2,130,000
Cumulative effect on prior years
of a change in accounting for
income taxes - - 1,430,000 -
Net income $ 1,526,000 $ 896,000 $ 4,155,000 $ 2,130,000
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Per common share:
Earnings before cumulative
effect of a change in
accounting principle $.36 $.21 $.64 $.50
Cumulative effect on prior
years of a change in
accounting for income taxes - - .34 -
Earnings per common share $.36 $.21 $.98 $.50
____ ____ ____ ____
____ ____ ____ ____
Cash dividends per common share $.25 $.25 $.50 $.50
Weighted average number of
common shares outstanding 4,226,878 4,218,948 4,224,414 4,218,766
<FN>
See accompanying notes to consolidated financial statements.
- 5 -
Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
December 31,
1993 1992
Cash flows from operating activities:
Net income $ 4,155,000 $ 2,130,000
Adjustments for noncash transactions:
Depreciation and amortization 2,267,000 2,408,000
Change in deferred income taxes (1,161,000) -
Changes in assets and liabilities:
Receivables (1,365,000) 2,753,000
Inventories 1,049,000 1,235,000
Prepaid expenses and other (1,368,000) (160,000)
Accounts payable (759,000) (602,000)
Accrued liabilities and other (468,000) 337,000
Income taxes payable 305,000 (466,000)
Net cash provided by operating activities 2,655,000 7,635,000
Cash flows from investing activities:
Capital expenditures (2,045,000) (2,140,000)
Proceeds from sales of capital assets 44,000 305,000
Net cash used in investing activities (2,001,000) (1,835,000)
Cash flows from financing activities:
Repayment of long-term debt (144,000) (422,000)
Exercise of stock options 92,000 9,000
Dividends paid to shareholders (2,113,000) (2,110,000)
Net cash used in financing activities (2,165,000) (2,523,000)
Effect of exchange rate changes on cash 3,000 (106,000)
Net change in cash and short-term investments (1,508,000) 3,171,000
Cash and short-term investments at beginning
of period 19,254,000 17,251,000
Cash and short-term investments at end of period $17,746,000 $20,422,000
___________ ___________
___________ ___________
<FN>
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 (including normal recurring
accruals) necessary to present fairly its financial position as of December 31,
1993 and June 30, 1993, and the results of operations for the three and six
month
periods ended December 31, 1993 and 1992, and the cash flows for the six month
periods ended December 31, 1993 and 1992.
The results of operations for the three and six month periods ended
December 31, 1993 and 1992 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.
Cumulative Effect On Prior Years Of A Change In Accounting Principle
In July 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (FAS 109), Accounting for Income Taxes. The adoption of
FAS 109 changes the Company's method of accounting for income taxes from the
deferred method to an asset and liability approach. Previously, the Company
deferred the past tax effects of timing differences between financial reporting
and taxable income. The asset and liability approach 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 other assets and liabilities. As of July 1, 1993,
the Company recorded a tax credit 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.
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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 increased by $6,350,000 or 16.6% for the quarter ended
December 31, 1993 and by $7,776,000 or 9.9% for the six months then ended when
compared with the 1992 periods. These sales include significant increases
posted
by the Aluminum Extrusion Group, up $2,382,000 or 37.8% for the quarter and
$3,039,000 or 21.4% for the six months; the Glass Products Group, up $1,572,000
or 47.3% for the quarter and $2,074,000 or 30.5% for the six months; and by the
Commercial Products Group, up $1,528,000 or 9.9% for the quarter and by
$1,253,000 or 3.9% for the six months.
Cost of sales as a percentage of net sales increased by 0.1% for the quarter
ended December 31, 1993 and by 0.5% for the six months then ended when compared
with the 1992 periods. These small increases are the net of two opposing
factors. Production costs increased significantly at the two California
aluminum
residential products facilities as a result of plant reorganizations
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.
These increases were offset by decreases in production costs in each of the
other
product lines due to efficiencies attained from increases in volume.
Selling, general and administrative expenses increased by $813,000 or 8.9%
for the quarter and by $935,000 or 5.0% for the six month period. The
increases
primarily relate to additional distribution costs associated with the increased
volumes of business.
The increase in net interest income for the six month period relates
primarily to increased rates of return realized on investable funds.
The effective tax rate for the six months ended December 31, 1993 was 37.6%
whereas the comparable period of fiscal year 1993 was 37.7%.
- 8 -
Unaudited
Liquidity and Capital Resources:
Working capital decreased to $61,427,000 during the six months ended
December 31, 1993, which represents a decrease of $20,000 from June 30, 1993.
The ratio of current assets to current liabilities is currently 4.8 as compared
to 4.6 as of the beginning of the year. The Company's projected capital
expenditures and related financing remain unchanged from those described in the
June 30, 1993 annual report. The Company's line of credit remains unchanged
from those noted in the June 30, 1993 annual report to shareholders.
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PART II. OTHER INFORMATION
Item 4(c). Submission of Matters to a Vote of Security Holders
On October 28, 1993, the Company held its 1993 Annual Shareholders Meeting.
Shareholders voted proxies representing 3,616,989 shares which was 85.7% of the
4,222,463 shares outstanding on the record date. The proposed slate of officers
were elected with 3,571,046 shares and the selected independent accountants were
ratified with 3,612,389 shares.
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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
(Registrant)
Date February 10, 1994 DAVID C. TREINEN
David C. Treinen
(Vice President - Finance)
(Principal Financial Officer)
Date February 10, 1994 MITCHELL K. FOGELMAN
Mitchell K. Fogelman
(Assistant Vice President - Finance
and Controller)
(Principal Accounting Officer)
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