Attached files
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EX-32.1 - 906 CERTIFICATION OF THE C.E.O. - INTERNATIONAL BALER CORP | exh32-1_16762.htm |
EX-32.2 - 906 CERTIFICATION OF THE C.F.O. - INTERNATIONAL BALER CORP | exh32-2_16762.htm |
EX-31.1 - 302 CERTIFICATION OF THE C.E.O. - INTERNATIONAL BALER CORP | exh31-1_16762.htm |
EX-31.2 - 302 CERTIFICATION OF THE C.F.O. - INTERNATIONAL BALER CORP | exh31-2_16762.htm |
U.S.
Securities and Exchange Commission
Washington,
D.C. 20549
Form
10-Q
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the Quarterly period ended January 31,
2010
Commission
File No. 0-14443
INTERNATIONAL BALER
CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
|
13-2842053
|
|
State
or other jurisdiction of
|
(IRS
Employer Identification No.)
|
|
Incorporation
or organization
|
5400
Rio Grande Avenue, Jacksonville, FL 32254
(Address
of principal executive offices)
(904-358-3812)
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X
No___
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes
No___
Indicate
by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large
accelerated filer_____
Non-accelerated
filer _____
(Do
not check if a smaller reporting company)
|
Accelerated
filer____
Smaller
reporting company X
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes____ No X
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: 4,933,895 shares of
common stock at February 28, 2010.
INTERNATIONAL
BALER CORPORATION
TABLE
OF CONTENTS
PAGE
PART
I.
|
FINANCIAL
INFORMATION
|
3 | |
ITEM 1. | FINANCIAL STATEMENTS | ||
Condensed
Balance Sheets as of January 31, 2010, and October 31,
2009
|
3 | ||
Condensed
Statements of Operations for the three months ended January 31, 2010 and
2009
|
4 | ||
Condensed
Statements of Changes in Stockholders( Equity for the period from October
31, 2009 to January 31, 2010
|
5 | ||
Condensed
Statements of Cash Flows for the three months ended January 31, 2010 and
2009.
|
6 | ||
Notes
to Condensed Financial Statements
|
7 | ||
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
11
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
12
|
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
12
|
|
PART
II.
|
OTHER INFORMATION | 13 | |
ITEM
5.
|
OTHER
INFORMATION
|
13
|
|
ITEM
6.
|
EXHIBITS
|
13
|
|
SIGNATURES
|
14 | ||
CERTIFICATIONS
|
|
15 |
INTERNATIONAL
BALER CORPORATION
CONDENSED
BALANCE SHEETS
UNAUDITED
ASSETS
|
January
31, 2010
|
October
31, 2009
|
||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 1,360,697 | $ | 1,609,305 | ||||
Restricted
cash
|
224,100 | 224,100 | ||||||
Accounts
receivable, net of allowance for doubtful accounts of $88,870
in 2010 and 2009
|
525,011 | 619,383 | ||||||
Inventories
|
1,424,787 | 1,145,998 | ||||||
Prepaid
expense and other current assets
|
51,272 | 80,506 | ||||||
Deferred
income taxes
|
336,085 | 336,735 | ||||||
Total
current assets
|
3,921,952 | 4,016,027 | ||||||
Property,
plant and equipment, at cost:
|
2,405,585 | 2,405,585 | ||||||
Less: accumulated
depreciation
|
1,559,852 | 1,534,652 | ||||||
Net
property, plant and equipment
|
845,733 | 870,933 | ||||||
Other
assets:
|
||||||||
Other
assets
|
2,843 | 4,906 | ||||||
Due
from former Director
|
25,736 | 28,875 | ||||||
Deferred
income taxes
|
422,511 | 422,511 | ||||||
Total
other assets
|
451,090 | 456,292 | ||||||
TOTAL
ASSETS
|
$ | 5,218,775 | $ | 5,343,252 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Revolving
promissory note
|
$ | 2,654 | $ | 2,654 | ||||
Accounts
payable
|
307,863 | 234,678 | ||||||
Accrued
liabilities
|
335,892 | 292,366 | ||||||
Current
portion of deferred compensation
|
67,000 | 67,000 | ||||||
Customer
deposits
|
107,233 | 335,440 | ||||||
Total
current liabilities
|
820,642 | 932,138 | ||||||
Deferred
compensation, net of current portion
|
118,104 | 132,067 | ||||||
Total
liabilities
|
938,746 | 1,064,205 | ||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, par value $.0001,
|
||||||||
10,000,000
shares authorized, none issued
|
— | — | ||||||
Common
stock, par value $.01,
|
||||||||
25,000,000
shares authorized; 6,179,875
|
||||||||
shares
issued in 2010 and 2009
|
61,799 | 61,799 | ||||||
Additional
paid-in capital
|
6,347,187 | 6,347,187 | ||||||
Accumulated
deficit
|
(1,447,547 | ) | (1,448,529 | ) | ||||
4,961,439 | 4,960,457 | |||||||
Less: Treasury
stock, 1,245,980 shares in 2010 and 2009, at
cost
|
(681,410 | ) | (681,410 | ) | ||||
Total
stockholders' equity
|
4,280,029 | 4,279,047 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 5,218,775 | $ | 5,343,252 |
See
accompanying notes to condensed financial statements.
- 3
-
INTERNATIONAL
BALER CORPORATION
CONDENSED
STATEMENTS OF OPERATIONS
FOR
THE THREE MONTHS ENDED JANUARY 31, 2010 AND 2009
UNAUDITED
January
31, 2010
|
January
31, 2009
|
|||||||
Net
Sales:
|
||||||||
Equipment
|
$ | 1,309,399 | $ | 2,065,110 | ||||
Parts
and Service
|
245,524 | 358,844 | ||||||
Total
Net Sales
|
1,554,923 | 2,423,954 | ||||||
Cost
of Sales
|
1,284,104 | 1,997,666 | ||||||
Gross
Profit
|
270,819 | 426,288 | ||||||
Operating
Expense:
|
||||||||
Selling
Expense
|
101,960 | 196,413 | ||||||
Administrative
Expense
|
167,995 | 232,617 | ||||||
Total
Operating Expense
|
269,955 | 429,030 | ||||||
Operating
Income (Loss)
|
864 | (2,742 | ) | |||||
Other
Income (Expense):
|
||||||||
Interest
Income
|
2,772 | 10,799 | ||||||
Interest
Expense
|
(2,063 | ) | (5,251 | ) | ||||
Other
Income
|
59 | — | ||||||
Total
Other Income
|
768 | 5,548 | ||||||
Income
Before Income Taxes
|
1,632 | 2,806 | ||||||
Income
Tax Provision
|
650 | 1,000 | ||||||
Net
Income
|
$ | 982 | $ | 1,806 | ||||
Basic
Income per share
|
$ | 0.00 | $ | 0.00 | ||||
Diluted
Income per share
|
0.00 | 0.00 | ||||||
Weighted
average number of shares outstanding - Basic
|
4,933,895 | 4,933,895 | ||||||
- Diluted
|
5,000,968 | 5,118,678 |
See
accompanying notes to condensed financial statements.
- 4
-
INTERNATIONAL
BALER CORPORATION
CONDENSED
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR
THE THREE MONTHS ENDED JANUARY 31, 2010
UNAUDITED
Common
Stock
|
Treasury
Stock
|
|||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
NUMBER
|
ADDITIONAL
|
NUMBER
|
TOTAL
|
|||||||||||||||||||||||||
OF
SHARES
|
PAR
|
PAID-IN
|
ACCUMULATED
|
OF
|
STOCKHOLDERS'
|
|||||||||||||||||||||||
ISSUED
|
VALUE
|
CAPITAL
|
DEFICIT
|
SHARES
|
COST
|
EQUITY
|
||||||||||||||||||||||
Balance
at October 31, 2009
|
6,179,875 | 61,799 | 6,347,187 | (1,448,529 | ) | 1,245,980 | (681,410 | ) | 4,279,047 | |||||||||||||||||||
Net
Income
|
-0- | -0- | -0- | 982 | -0- | -0- | 982 | |||||||||||||||||||||
Balance
at January 31, 2010
|
6,179,875 | $ | 61,799 | $ | 6,347,187 | $ | (1,447,547 | ) | 1,245,980 | $ | (681,410 | ) | $ | 4,280,029 |
See
accompanying notes to condensed financial statements.
- 5
-
INTERNATIONAL
BALER CORPORATION
CONDENSED
STATEMENTS OF CASH FLOWS
FOR
THE THREE MONTHS ENDED JANUARY 31, 2010 AND 2009
UNAUDITED
January
31, 2010
|
January
31, 2009
|
|||||||
Cash
flow from operating activities:
|
||||||||
Net
income
|
$ | 982 | $ | 1,806 | ||||
Adjustments
to reconcile net income to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
27,263 | 28,300 | ||||||
Provision
for doubtful accounts, net of recoveries
|
— | 68,870 | ||||||
Deferred
income taxes
|
650 | 1,000 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
94,372 | 344,057 | ||||||
Inventories
|
(278,789 | ) | (110,000 | ) | ||||
Prepaid
expenses and other current assets
|
29,234 | 43,326 | ||||||
Accounts
payable
|
73,185 | (219,705 | ) | |||||
Accrued
liabilities and deferred compensation
|
29,563 | (293,531 | ) | |||||
Customer
deposits
|
(228,207 | ) | (797,949 | ) | ||||
Net
cash used in operating activities
|
(251,747 | ) | (933,826 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from notes receivable from former Director
|
3,139 | 2,956 | ||||||
Purchase
of property and equipment
|
— | (64,915 | ) | |||||
Net
cash provided by (used in) investing activities
|
3,139 | (61,959 | ) | |||||
Cash
flows from financing activities:
|
||||||||
Repayments
of long term debt
|
— | (9,464 | ) | |||||
Net
cash used in financing activities
|
— | (9,464 | ) | |||||
Net
decrease in cash and cash equivalents
|
(248,608 | ) | (1,005,249 | ) | ||||
Cash
and cash equivalents at beginning of period
|
1,609,305 | 2,245,930 | ||||||
Cash
and cash equivalents at end of year
|
$ | 1,360,697 | $ | 1,240,681 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during year for:
|
||||||||
Interest
|
$ | — | $ | 3,051 | ||||
Income
taxes
|
— | 5,000 |
See
accompanying notes to condensed financial statements.
- 6
-
INTERNATIONAL
BALER CORPORATION
NOTES TO
CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1.
|
Nature
of Business:
|
International
Baler Corporation (the Company) is a manufacturer of baling equipment which is
fabricated from steel and utilizes hydraulic and electrical components to
compress a variety of materials into bales for easier handling, shipping,
disposal, storage, and for recycling. Materials commonly baled
include scrap metal, corrugated boxes, newsprint, aluminum cans, plastic
bottles, and other solid waste. More sophisticated applications
include baling of textile materials, fibers and synthetic rubber. The Company
offers a wide variety of balers, standard models as well as custom models, to
meet specific customer requirements.
The
Company’s
customers include recycling facilities, distribution centers, textile mills, and
companies which generate the materials for baling and recycling. The
Company sells its products worldwide with 10% to 35% of its annual sales outside
the United States.
2.
|
Basis
of Presentation:
|
The
accompanying unaudited condensed financial statements have been prepared in
accordance with United States generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
8-03 of Regulation S-X. Accordingly, they do not include all of the information
in footnotes required by United States generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary to make the
financial statements not misleading have been included. Operating
results for the three-month period ended January 31, 2010 are not necessarily
indicative of the results that may be expected for the year ending October 31,
2010. The accompanying condensed balance sheet as of October 31, 2009 was
derived from the audited consolidated financial statements as of October 31,
2009.
3.
|
Summary of Significant
Accounting Policies:
|
(a)
Accounts Receivable & Allowance for Doubtful Accounts:
Trade
accounts receivable are recorded at the invoiced amount and do not bear
interest. Amounts collected on trade accounts receivable are included in net
cash provided by operating activities in the statements of cash flows. The
Company maintains an allowance for doubtful accounts for estimated losses
inherent in its accounts receivable. The Company reviews its allowance for
doubtful accounts monthly. Past due balances are reviewed individually for
collectibility. Account balances are charged off against the allowance after all
means of collection have been exhausted and the potential for recovery is
considered remote.
- 7
-
(b)
Inventories:
Inventories
are stated at the lower of cost or market. Cost is determined by a method that
approximates the first-in, first-out method. Work in process and finished goods
are valued based on underlying costs to manufacture balers which includes direct
materials, direct and indirect labor, and overhead. The Company maintains an
allowance for excess or slow moving inventory based on the expectation that this
inventory will become obsolete or unusable within a reasonable time period.
Company personnel review the potential usage of inventory and inventory
components on a regular basis.
(c)
Revenue Recognition:
The
Company recognizes revenue when products are shipped and the customer takes
ownership and assumes the risk of loss. Parts sales are approximately 15% of
total sales. The Company recognizes revenue from repair services in the period
in which the service is provided.
(d) Basic
and Diluted Income Per Share:
Basic
income per share is calculated using the weighted average number of common
shares outstanding during each period. Diluted income per share includes the net
additional number of shares that would be issued upon the exercise of stock
options using the treasury stock method. Options are not considered in loss
periods as they would be antidilutive. The dilutive impact of options
outstanding at January 31, 2010 and January 31, 2009 was 67,073 shares and
184,783 shares, respectively.
(e) Warranties
and Service
The
Company warrants its products for one (1) year from the date of sale as to
materials and six (6) months as to labor, and offers a service plan for other
required repairs and maintenance. The Company maintains an accrued liability for
expected warranty claims. The warranty accrual is based on historical warranty
costs, the quantity and types of balers under warranty, and known warranty
issues.
Following
is a tabular reconciliation of the changes in the warranty accrual for the
three-month period ended January 31:
2010
|
2009
|
|||||||
Beginning
balance
|
$ | 55,059 | $ | 76,059 | ||||
Warranty
service provided
|
(9,030 | ) | (39,340 | ) | ||||
Warranties
issued
|
15,549 | 24,240 | ||||||
Changes
to pre-existing warranty accruals
|
(6,519 | ) | 15,100 | |||||
Ending
balance
|
$ | 55,059 | $ | 76,059 |
(f)
Recently Issued Accounting Pronouncements
In
October 2009, the FASB issued Accounting Standards Codification Topic No. 605,
Multiple-Deliverable Revenue Arrangements. This guidance establishes a selling
price hierarchy for determining the selling price of a deliverable and expands
the disclosures required for multiple-deliverable revenue arrangements. This
guidance is effective for
- 8
-
revenue
arrangements that are entered into or are materially modified in fiscal years
beginning on or after June 15, 2010, with early adoption permitted. The Company
is currently evaluating the impact of adopting this guidance on its results of
operations and financial position.
(g) Fair
Value of Financial Instruments
The
carrying amounts of the Company’s financial instruments, including cash and cash
equivalents, restricted cash, accounts receivable, accounts payable, accrued
liabilities, revolving promissory note, and customer deposits, approximate their
fair value due to the short-term nature of these assets and liabilities. The
term loan and the carrying amount of deferred compensation approximates fair
value, based on current rates available to the Company for loans with similar
maturities.
(h)
Subsequent Events
The
Company evaluated all events or transactions that occurred after January 31,
2010 up through the date the Company issued their financial
statements.
4.
|
Related
Party Transactions:
|
The
Company has a note receivable from its former president and director totaling
$40,574 and $43,713 at January 31, 2010 and October 31, 2009, respectively.
Interest accrues at the rate of 6% per annum.
The
Company has an agreement with the former president and director of the Company
for deferred compensation payments. The Company will make payments with a
present value of $185,104, payable over the next four years. A portion of the
payments will be used to repay the outstanding note receivable discussed
above.
LaRita
Boren and Leland E. Boren, both shareholders and directors of the Company, are
the owners of Avis Industrial Corporation (Avis). Together the Borens own 53.6%
of the outstanding shares of the Company. Avis owns 100% of American Baler
Company, a competitor of the Company. These baler companies operate independent
of each other.
5.
|
Inventories
|
Inventories
consisted of the following:
January 31,
2010
|
October 31,
2009
|
|||||||
Raw
Materials
|
$ | 771,557 | $ | 694,557 | ||||
Work
in process
|
289,640 | 356,140 | ||||||
Finished
Goods
|
363,590 | 95,301 | ||||||
$ | 1,424,787 | $ | 1,145,998 |
6.
|
Debt
|
The
Company has a $1,000,000 line of credit agreement with First Guaranty Bank and
Trust Company of Jacksonville. The line of credit allows the Company to borrow
against the Company’s property, plant and equipment. The line of credit bears
interest at the prime rate plus one-half percent
- 9
-
(3.75% at
January 31, 2010) and has a term of three years expiring in March 2010. The line
of credit has been extended to March 2011 at an interest rate of 1/2% above
prime rate, with a floor of 5.0%. The line of credit had an outstanding balance
of $2,654 at January 31, 2010 and at October 31, 2009 and the unused line of
credit was $997,346 at January 31, 2010. At the current time, our line of credit
continues to be available and we have not had any issues obtaining additional
funds from the lender. In the event that the Company’s line of credit would not
be available, we would pursue a line of credit from other sources, and take
steps to minimize expenditures, such as delaying capital expenditures and
reducing overhead costs.
7.
|
Income
Taxes
|
As of
January 31, 2010, the Company’s anticipated annual effective tax rate is 39%.
The difference between income taxes as provided at the federal statutory tax
rate of 34% and the Company’s actual income tax is primarily the result of state
income tax expense offset by permanent deductible differences.
Tax
assets are recognized in the balance sheet if it is more likely than not that
they will be realized on future tax returns. Factors considered included,
historical results of operations, volatility of the economic conditions and
projected earnings based on current operations. Based on this evidence, it is
more likely than not that the deferred tax assets would be realized.
Accordingly, the valuation allowance as of January 31, 2010 is $0. However, if
it is determined that all or part of the deferred tax assets will not be used in
the future, an adjustment to the deferred tax assets would be charged against
net income in the period such determination is made. As of January 31, 2010, the
deferred tax asset was approximately $759,000. The realization of deferred tax
assets will depend on the Company’s ability to continue to generate taxable
income in the future.
8.
|
Stock-Based
Compensation
|
In June
2002, the Company granted 250,000 nonqualified stock options to purchase shares
of the Company’s common stock. These options, which vested immediately, have an
exercise price of $0.30 and a term of 10 years. The options or shares purchased
thereunder may be registered pursuant to the Securities Act of 1933. The Company
has no remaining authorized shares available for grant under existing stock
option plans. As of January 31, 2010, the Company has no options outstanding
under previously authorized plans. The outstanding stock options at January 31,
2010 have a remaining contractual term of three years. As all options
are fully vested, there is no impact to net income for the three months ended
January 31, 2010 and 2009.
9.
|
Commitments
and Contingencies
|
The
Company in the ordinary course of business, is subject to claims made under, and
from time to time is named as a defendant in legal proceedings relating to the
sales of its products. The Company believes that the reserves reflected in its
condensed financial statements are adequate to pay losses and loss adjustment
expenses which may result from such claims and proceedings; however, such
estimates may be more or less than the amount ultimately paid when the claims
are settled.
At
January 31, 2010, the Company had a letter of credit totalling $224,100 issued
for warranty guarantees, which is secured by restricted cash. This letter of
credit expires July 31, 2010.
- 10
-
ITEM
2.
|
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
The
following discussion should be read together with our unaudited condensed
financial statements and the related notes thereto included in Part I, Item 1
“Financial Statements”. For further information, refer to the Company’s Annual Report on
Form 10-K for the year ended October 31, 2009, and the Management Discussion and
Analysis of Financial Condition and Results of Operations included in this Form
10-Q.
The
Company’s operating results for fiscal 2009 and the first fiscal quarter of 2010
were negatively impacted by the economic conditions including the collapse of
commodity prices for recycled materials at the end of 2008. In the last several
months of 2009, commodity prices for materials for recycling have been rising
and the economic outlook for our products is improved.
Results
of Operations: Three Month Comparison
In the
first quarter ending January 31, 2010, the Company had net sales of $1,554,923,
compared to net sales of $2,423,954 in the first quarter of fiscal 2009. The
decrease in revenue is the result of lower shipments in the first quarter of
fiscal 2010, reflecting the deteriorated market conditions and lower commodity
prices for recycled materials compared to the prior year first quarter.
Shipments in the first quarter of 2010 included 26 balers and conveyors compared
to 28 balers and conveyors in the prior year first quarter, however, equipment
sold in the prior year quarter included eight large balers compared to three
large balers in the current quarter.
The
Company had pre-tax income of $1,632 in the first quarter compared to pre-tax
income of $2,806 in the first quarter of fiscal 2009. Gross profit margin in the
quarter was 17.4% compared to 17.6% in the first quarter of 2009. Margins were
negatively impacted by lower shipments, resulting in lower absorption of fixed
manufacturing costs, however, this was offset by significant cost reductions
implemented in the second half of fiscal 2009.
Selling
and administrative expenses decreased by $159,075, the result of lower salary
costs, reductions in various other expenditures, and setting up a reserve of
$68,000 for a receivable from Smurfit-Stone in the prior year first
quarter.
The sales
order backlog was approximately $1,590,000 at January 31, 2010, as compared to
$1,218,000 at January 31, 2009.
Financial
Condition and Liquidity:
Net
working capital at January 31, 2010 was $3,101,310, as compared to $3,083,889 at
October 31, 2009. The Company currently believes that it will have sufficient
cash flow to be able to fund other operating activities for the next twelve
months.
Average
days sales outstanding (DSO) in the first three months of fiscal 2010 were 39.3
days, as compared to 25.3 days in first three months of fiscal 2009. DSO is
calculated by dividing the total of the month-end net accounts receivable
balances for the period by three, and dividing that result by the average days
sales for the period (period sales ÷ 91.25 days).
- 11
-
The
Company has a line of credit with First Guaranty and Trust Company of
Jacksonville with a credit limit of $1,000,000. The interest rate on the line of
credit is one-half percent above the prime rate and expires in March 2010. The
line of credit has been extended to March 2011 at an interest rate of 1/2% above
the prime rate, with a floor of 5.0%. At January 31, 2010, the line of credit
had an outstanding balance of $2,654. At the current time, our line of credit
continues to be available and we have not had any issues obtaining additional
funds from the lender. In the event that the Company’s line of credit would not
be available, we would pursue a line of credit from other sources, and take
steps to minimize expenditures, such as delaying capital expenditures and
reducing overhead costs.
Forward
Looking Statements
Certain
statements in this Report contain forward-looking statements within the meaning
of Section 21B of the Securities and Exchange Act of 1934, as amended. These
forward-looking statements represent the Company’s present
expectations or beliefs concerning future events. The Company
cautions that such statements are necessarily based on certain assumptions which
are subject to risks and uncertainties including, but not limited to, changes in
general economic conditions and changing competition which could cause actual
results to differ materially from those indicated.
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
The
Company is exposed to changes in interest rates as a result of its financing
activities, including its borrowings on the revolving line of credit
facility. Based on the current level of borrowings, a change in
interest
rates is not expected to have a material effect on operations or financial
position.
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
Controls
and Procedures
The
Company maintains disclosure controls and procedures that are designed to ensure
that information required to be disclosed by the Company in reports that it
files or submits under the Securities Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms and that such information is accumulated and communicated to our
management, including the Company’s Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), as appropriate, to allow timely decisions regarding
required disclosures. In designing and evaluating the disclosure controls and
procedures, management recognizes that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management is necessarily required
to apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures. As of the end of the period covered by this report, and
under the supervision and with the participation of the management, including
the Company’s Chief Executive Officer and Chief Financial Officer, management
evaluated the effectiveness of the design and operation of these disclosure
controls
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and
procedures. Based on this evaluation and subject to the foregoing, the Company’s
Chief Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures were effective.
As part
of a continuing effort to improve the Company’s business processes management is
evaluating its internal controls and may update certain controls to accommodate
any modifications to its business processes or accounting
procedures.
Changes
in Internal Control over Financial Reporting
The
Company’s management, including CEO and CFO, confirm that there were no changes
in the Company’s internal control over financial reporting during the fiscal
quarter ended January 31, 2009 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.
ITEM
5.
|
OTHER
INFORMATION
|
None.
ITEM
6.
|
EXHIBITS
|
The
following exhibits are submitted herewith:
Exhibit
|
31.1
|
Certification
of D. Roger Griffin, Chief Executive Officer, pursuant to Rule
13a–14(a)/15d-14(a).
|
|
31.2
|
Certification
of William E. Nielsen, Chief Financial Officer, pursuant to Rule
13a–14(a)/15d-14(a).
|
|
32.1
|
Certification
of D. Roger Griffin, Chief Executive Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
|
32.2
|
Certification
of William E. Nielsen, Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
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-
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has caused this report to be signed on its behalf by the undersigned there unto
duly authorized.
Dated:
March 12, 2010
|
INTERNATIONAL BALER CORPORATION | |||
|
By:
|
/s/ D. Roger Griffin | |
D. Roger Griffin | |||
Chief Executive Officer | |||
By:
|
/s/ William E. Nielsen | ||
William E. Nielsen | |||
Chief Financial Officer | |||
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