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 September 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 No.)
767 Monterey Pass Road, Monterey Park, California 91754 (213) 264-1670
(Address of principal executive office) (Telephone Number)
Former name, address and fiscal year, if changed since last report: 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 the number of shares outstanding of each of the classes of common
stock.
Class Outstanding at November 1, 1994
Common Stock $1.00 Par Value 4,238,020
Page 1 of 9 Pages
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
Page Nos.
PART I Financial Information
Consolidated Balance Sheets -
September 30, 1994 and June 30, 1994 3
Consolidated Statements of Income -
three months ended September 30,
1994 and 1993 5
Consolidated Statements of Cash Flows -
three months ended September 30,
1994 and 1993 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Signatures 9
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PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited Audited
Assets Sept. 30, 1994 June 30, 1994
Current assets:
Cash $ 3,535,000 $ 5,973,000
Short-term investments 8,809,000 9,727,000
Accounts receivable, net 36,980,000 34,715,000
Unbilled receivables 974,000 1,055,000
Inventories:
Raw materials 23,455,000 21,415,000
Work-in-process 3,139,000 2,332,000
Finished goods 5,326,000 4,994,000
Prepaid expenses 2,063,000 1,580,000
Future income tax benefits 1,326,000 1,326,000
Total current assets 85,607,000 83,117,000
____________ ____________
Property, plant and equipment, at cost 88,732,000 87,921,000
Less - Accumulated depreciation (49,337,000) (48,133,000)
39,395,000 39,788,000
____________ ____________
Other assets:
Costs in excess of net assets of
purchased businesses 4,939,000 4,972,000
Other 1,147,000 1,153,000
6,086,000 6,125,000
____________ ____________
$131,088,000 $129,030,000
____________ ____________
____________ ____________
<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 Sept. 30, 1994 June 30, 1994
Current liabilities:
Accounts payable $ 8,261,000 $ 8,449,000
Accrued liabilities 7,499,000 8,877,000
Current portion of long-term debt 562,000 562,000
Income taxes payable 2,728,000 1,777,000
Total current liabilities 19,050,000 19,665,000
____________ ____________
Long-term debt 965,000 1,103,000
____________ ____________
Other liabilities:
Deferred income taxes 4,466,000 4,466,000
Other 374,000 361,000
4,840,000 4,827,000
____________ ____________
Shareholders' equity 106,233,000 103,435,000
____________ ____________
$131,088,000 $129,030,000
____________ ____________
____________ ____________
<FN>
See accompanying notes to consolidated financial statements.
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Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30,
1994 1993
Net sales $51,763,000 $42,132,000
Costs and expenses:
Cost of sales 34,934,000 30,853,000
Selling, general and
administrative expenses 10,968,000 9,764,000
Interest (income) expense, net (98,000) (424,000)
Income before income taxes and a
change in accounting principle 5,959,000 1,939,000
Provision for income taxes 2,350,000 740,000
Income before a change in
accounting principle 3,609,000 1,199,000
Cumulative effect on prior years of a
change in accounting for income taxes - 1,430,000
Net income $ 3,609,000 $ 2,629,000
___________ ___________
___________ ___________
Per common share:
Earnings before cumulative effect of a
change in accounting principle $.85 $.28
Cumulative effect on prior years of a
change in accounting for income taxes - .34
Earnings per common share $.85 $.62
____ ____
____ ____
Cash dividends per common share $.25 $.25
Weighted average number of
common shares outstanding 4,233,683 4,222,522
<FN>
See accompanying notes to consolidated financial statements.
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Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
September 30,
1994 1993
Cash flows from operating activities:
Net income $ 3,609,000 $ 2,629,000
Adjustments for noncash transactions:
Depreciation and amortization 1,162,000 1,131,000
Change in accounting for income taxes - (1,430,000)
Changes in assets and liabilities:
Receivables (2,037,000) (1,646,000)
Inventories (3,137,000) 315,000
Prepaid expenses and other (467,000) (516,000)
Accounts payable (244,000) (666,000)
Accrued liabilities and other (1,409,000) 208,000
Income taxes payable 953,000 560,000
Net cash provided (used) by operating activities (1,570,000) 585,000
Cash flows from investing activities:
Capital expenditures (671,000) (714,000)
Proceeds from sales of capital assets 21,000 20,000
Net cash used in investing activities (650,000) (694,000)
Cash flows from financing activities:
Repayment of long-term debt (138,000) -
Exercise of stock options 55,000 89,000
Dividends paid to shareholders (1,059,000) (1,057,000)
Net cash used in financing activities (1,142,000) ( 968,000)
Effect of exchange rate changes on cash 6,000 -
Net change in cash and short-term investments (3,356,000) (1,077,000)
Cash and short-term investments at beginning
of period 15,700,000 19,254,000
Cash and short-term investments at end of period $12,344,000 $18,177,000
___________ ___________
___________ ___________
<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 September
30, 1994 and June 30, 1994, and the results of operations and cash flows for
the three month periods ended September 30, 1994 and 1993.
The results of operations for the three month periods ended September 30,
1994 and 1993 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 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
prior 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:
The increase in net sales for the quarter ended September 30, 1994 of
$9,631,000 or 22.9% from the comparable quarter of fiscal year 1994 is
comprised of an increase of $10,157,000 or 26.0% in domestic sales and a
decrease of $526,000 or 16.9% in foreign sales. The domestic sales include
significant increases posted by the Aluminum Extrusion Group, up $4,191,000
or 49.1% and by the Commercial Products Group, up $4,333,000 or 28.8%.
The cost of sales as a percentage of net sales was 67.5% for the quarter
ended September 30, 1994 as opposed to 73.2% for the comparable prior year
period. This decrease is primarily attributable to production cost
efficiencies in the Aluminum Extrusion Group resulting from significantly
increased volume coupled with expanded margins at most of the Company's
fabrication facilities associated with increased volume and rising prices.
Selling, general and administrative expenses for the quarter were $1,204,000
or 12.3% higher than those of the comparable quarter of the prior year. The
increase primarily relates to additional selling and distribution costs
associated with the increased sales volume.
The decrease in net interest income for quarter relates to significant
decreases in the market values of interest rate sensitive securities during
the quarter.
The effective tax rate for the quarter ended September 30, 1994 was 39.4%
whereas the comparable quarter of fiscal year 1994 was 38.2%.
Liquidity and Capital Resources:
Working capital increased to $66,557,000 during the three months ended
September 30, 1994, which represents an increase of $3,105,000 from June 30,
1994. The ratio of current assets to current liabilities is currently 4.5 as
compared to 4.2 as of the beginning of the year. The Company's projected
capital expenditures for fiscal 1995 have been expanded to $5,000,000 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 and cash reserves. The Company's line
of credit remains unchanged from that noted in the June 30, 1994 annual report
to shareholders.
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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 November 10, 1994 DAVID C. TREINEN
David C. Treinen
Vice President - Finance
(Principal Financial Officer)
Date November 10, 1994 MITCHELL K. FOGELMAN
Mitchell K. Fogelman
Assistant Vice President - Finance
and Controller
(Principal Accounting Officer)
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