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EX-32.1 - EXECUTIVE OFFICER CERTIFICATION - INTERNATIONAL BALER CORPexh32-1_17069.htm
EX-31.1 - EXECUTIVE OFFICER CERTIFICATION - INTERNATIONAL BALER CORPexh31-1_17069.htm
EX-31.2 - EXECUTIVE OFFICER CERTIFICATION - INTERNATIONAL BALER CORPexh32-2_17069.htm
EX-31.2 - EXECUTIVE OFFICER CERTIFICATION - INTERNATIONAL BALER CORPexh31-2_17069.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, 2011


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 o

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 o 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, 2011.



 
 

 
INTERNATIONAL BALER CORPORATION
 
TABLE OF CONTENTS
 
 
 
PAGE
     
PART I.
FINANCIAL INFORMATION
3
     
 
ITEM 1. FINANCIAL STATEMENTS
     
 
Balance Sheets as of January 31, 2011, and October 31, 2010
3
     
 
Statements of Operations for the three months ended January 31, 2011 and 2010
4
     
 
Statements of Changes in Stockholders Equity for the period from October 31, 2010 to January 31, 2011
5
     
 
Statements of Cash Flows for the three months ended January 31, 2011 and 2010.
6
     
 
Notes to 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 1. LEGAL PROCEEDINGS
13
     
 
ITEM 5. OTHER INFORMATION
13
     
 
ITEM 6. EXHIBITS
14
     
SIGNATURES
15
     
CERTIFICATIONS
16
 
 
 

 

INTERNATIONAL BALER CORPORATION
 
BALANCE SHEETS
 
UNAUDITED
 
             
             
             
   
January 31, 2011
   
October 31, 2010
 
ASSETS
           
             
Current Assets:
           
  Cash and cash equivalents
  $ 3,084,622     $ 2,101,204  
  Accounts receivable, net of allowance for doubtful accounts
               
           of $71,764 in 2011 and 2010
    595,355       700,484  
  Inventories
    1,740,888       1,281,312  
  Prepaid expense and other current assets
    45,972       72,508  
  Deferred income taxes
    408,685       435,185  
          Total current assets
    5,875,522       4,590,693  
                 
Property, plant and equipment, at cost:
    2,414,055       2,414,055  
  Less:  accumulated depreciation
    1,644,057       1,622,757  
          Net property, plant and equipment
    769,998       791,298  
                 
Other assets:
               
  Other assets
    1,396       1,396  
  Due from former Director
    12,986       16,319  
  Deferred income taxes
    165,511       165,511  
          Total other assets
    179,893       183,226  
                 
TOTAL ASSETS
  $ 6,825,413     $ 5,565,217  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
  Accounts payable
  $ 657,280     $ 330,459  
  Accrued liabilities
    272,715       278,776  
  Current portion of deferred compensation
    67,000       67,000  
  Customer deposits
    1,191,886       279,424  
          Total current liabilities
    2,188,881       955,659  
                 
Deferred compensation, net of current portion
    61,090       76,213  
          Total liabilities
    2,249,971       1,031,872  
                 
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 2011 and 2010
    61,799       61,799  
  Additional paid-in capital
    6,347,187       6,347,187  
  Accumulated deficit
    (1,152,134 )     (1,194,231 )
      5,256,852       5,214,755  
                 
   Less:  Treasury stock, 1,245,980 shares
               
                   in 2011 and 2010, at cost
    (681,410 )     (681,410 )
                 
                  Total stockholders' equity
    4,575,442       4,533,345  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 6,825,413     $ 5,565,217  
                 
                 
See accompanying notes to financial statements.
               

 
3

 
INTERNATIONAL BALER CORPORATION
 
STATEMENTS OF OPERATIONS
 
FOR THE THREE MONTHS ENDED JANUARY 31, 2011 AND 2010
 
UNAUDITED
 
             
             
   
January 31, 2011
   
January 31, 2010
 
             
             
Net Sales:
           
     Equipment
  $ 1,412,620     $ 1,309,399  
     Parts and Service
    430,038       245,524  
Total Net Sales
    1,842,658       1,554,923  
                 
Cost of Sales
    1,508,267       1,284,104  
                 
Gross Profit
    334,391       270,819  
                 
                 
Operating Expense:
               
     Selling Expense
    104,514       101,960  
     Administrative Expense
    163,285       167,995  
Total Operating Expense
    267,799       269,955  
                 
Operating Income
    66,592       864  
                 
Other Income (Expense):
               
     Interest Income
    2,005       2,772  
     Interest Expense
          (2,063 )
     Other Income
          59  
Total Other Income
    2,005       768  
                 
                 
Income Before Income Taxes
    68,597       1,632  
                 
Income Tax Provision
    26,500       650  
                 
Net Income
  $ 42,097     $ 982  
                 
                 
Basic Income per share
  $ 0.01     $ 0.00  
Diluted Income per share
    0.01       0.00  
                 
Weighted average number of shares outstanding - Basic
    4,933,895       4,933,895  
                                                                            - Diluted
    5,064,847       5,000,968  
                 
                 
See accompanying notes to financial statements.
               
 
 
4

 
INTERNATIONAL BALER CORPORATION
 
STATEMENTS OF STOCKHOLDERS' EQUITY
 
FOR THE THREE MONTHS ENDED JANUARY 31, 2011
 
UNAUDITED
 
                                           
                                           
   
Common Stock
               
Treasury Stock
       
   
 
   
 
               
 
   
 
       
   
NUMBER
OF SHARES
ISSUED
   
PAR
VALUE
   
ADDITIONAL
PAID-IN
CAPITAL
   
ACCUMULATED
DEFICIT
   
NUMBER
OF
SHARES
   
COST
   
TOTAL STOCKHOLDERS' EQUITY
 
                                           
Balance at October 31, 2010
    6,179,875     $ 61,799     $ 6,347,187     $ (1,194,231 )     1,245,980     $ (681,410 )   $ 4,533,345  
                                                         
Net Income
    -0-       -0-       -0-       42,097       -0-       -0-       42,097  
                                                         
Balance at January 31, 2011
    6,179,875     $ 61,799     $ 6,347,187     $ (1,152,134 )     1,245,980     $ (681,410 )   $ 4,575,442  
                                                         
                                                         
                                                         
See accompanying notes to financial statements.
                                         
 
 
5

 
INTERNATIONAL BALER CORPORATION
 
STATEMENTS OF CASH FLOWS
 
FOR THE THREE MONTHS ENDED JANUARY 31, 2011 AND 2010
 
UNAUDITED
 
             
             
   
January 31, 2011
   
January 31, 2010
 
             
Cash flow from operating activities:
           
  Net income
  $ 42,097     $ 982  
  Adjustments to reconcile net income to net cash used in
               
  operating activities:
               
     Depreciation and amortization
    21,300       27,263  
     Deferred income taxes
    26,500       650  
     Changes in operating assets and liabilities:
               
       Accounts receivable
    105,129       94,372  
       Inventories
    (459,576 )     (278,789 )
       Prepaid expenses and other current assets
    26,536       29,234  
       Accounts payable
    326,821       73,185  
       Accrued liabilities and deferred compensation
    (21,184 )     29,563  
       Customer deposits
    912,462       (228,207 )
           Net cash provided by (used in) operating activities
    980,085       (251,747 )
                 
Cash flows from investing activities:
               
   Proceeds from notes receivable from former Director
    3,333       3,139  
           Net cash provided by investing activities
    3,333       3,139  
                 
                 
Net increase (decrease) in cash and cash equivalents
    983,418       (248,608 )
                 
Cash and cash equivalents at beginning of period
    2,101,204       1,609,305  
                 
Cash and cash equivalents at end of year
  $ 3,084,622     $ 1,360,697  
                 
Supplemental disclosure of cash flow information:
               
Cash paid during year for:
               
    Interest
  $     $  
    Income taxes
           
                 
                 
See accompanying notes to 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 designed 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, and conveyors 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, 2011 are not necessarily indicative of the results that may be expected for the year ending October 31, 2011. The accompanying balance sheet as of October 31, 2010 was derived from the audited financial statements as of October 31, 2010.


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 collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

(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
 
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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 installations and start-ups and repair services in the period in which the service is provided.

(d)  Basic and Diluted Income (Loss) Per Share:

Basic income (loss) per share is calculated using the weighted average number of common shares outstanding during each period. Diluted income (loss) 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, 2011 and January 31, 2010 was 130,952 shares and 67,073 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:
 
 
 
 
  2011     2010   
 
Beginning balance
  $ 49,859     $ 55,059  
 
Warranty service provided
    (39,045 )     (9,030 )
 
Warranties issued
    42,378       15,549  
 
Changes to pre-existing warranty accruals
     (3,333      6,519  
 
Ending balance
  $ 49,859     $ 55,059  


(f)  Recently Issued Accounting Pronouncements

In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements.” ASU 2009-13 amends existing revenue recognition accounting pronouncements that are currently within the scope of FASB ASC Topic 605. This consensus provides accounting principles and application guidance on how the arrangement should be separated, and the consideration allocated. This guidance changes how to determine the fair value of undelivered products and services for separate revenue recognition. Allocation of consideration under this pronouncement is based on management’s estimate of the selling price for an undelivered item where
 
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there is no other means to determine the fair value of that undelivered item. This new approach is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early application permitted. The adoption of this standard did not have any impact on the Company’s financial statements.

(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.

(h)  Subsequent Events

The Company evaluated all events or transactions that occurred after January 31, 2011 up through the date the Company issued its financial statements.

4.  Related Party Transactions:

The Company has a note receivable from its former president and director totaling $27,824 and $31,157 at January 31, 2011 and October 31, 2010, 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 $128,090, payable over the next two years. A portion of the payments will be used to repay the outstanding note receivable discussed above.

Leland E. Boren, a shareholder and director of the Company, is the owner of Avis Industrial Corporation (Avis). Mr. Boren controls 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, 2011     October 31, 2010   
 
Raw Materials
  $ 825,522     $ 694,446  
 
Work in process
    730,477       377,977  
 
Finished Goods
    184,889       208,889  
 
 
  $ 1,740,888     $ 1,281,312  

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 with a floor of 5.0%, with a re-affirmation date of February 28, 2011. The Company renewed its line of credit for one year effective February 28, 2011 at the same interest rate terms. The line of credit had no
 
9

 
outstanding balance at January 31, 2011 and October 31, 2010, and the unused line of credit was $1,000,000 at January 31, 2011. The credit agreement contains covenants that require the Company to provide annual audited financial statements and quarterly internal financial statements to the lender. There are no other covenants or restrictions.
 
7.  Income Taxes

As of January 31, 2011, 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 and 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, 2011 and at October 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, 2011 and October 31, 2010, the deferred tax asset was approximately $574,196 and $600,696, respectively. 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. The outstanding stock options at January 31, 2011 have a remaining contractual term of one year.  As all options are fully vested, there is no impact to net income for the three months ended January 31, 2011 and 2010 related to stock options.

9.  Commitments and Contingencies

The Company in the ordinary course of business, is subject to claims made, 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.

On August 26, 2010, the Company was served with a wrongful death lawsuit filed by the Estate of a former employee who was injured in a workplace accident while an employee of the Company.  The accident occurred in September 2008. The Plaintiff has demanded $2,500,000 to settle this claim.  The Company intends to vigorously defend this case and has
 
10

 
contacted its liability insurance carrier to request defense and indemnification of any losses incurred in connection with this lawsuit.  The claim is currently in the early stages of discovery and the outcome is uncertain.

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, 2010, and the Management Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q.

Results of Operations:  Three Month Comparison

In the first quarter ending January 31, 2011, the Company had net sales of $1,842,658, compared to net sales of $1,554,923 in the first quarter of fiscal 2010. This increase in revenue is the result of higher shipments in the first quarter of fiscal 2011 reflecting the improved market conditions and higher commodity prices for recycled materials compared to the first quarter 2010. Baler and conveyor unit sales increased from twenty-five units in the prior year first quarter to twenty-eight units in the current year first quarter. Parts and service sales increased by $184,514 in the current year compared to the prior year. The market for baling equipment has been moving toward larger, more productive and efficient equipment in recent years.

The Company had pre-tax income of $68,597 in the first quarter compared to pre-tax income of $1,632 in first quarter of fiscal 2010. Gross profit margin in the quarter was 18.1% compared to 17.4% in the first quarter of 2010. The improvement in income and profit margins were the result of the higher shipments of equipment and parts and service. Also, the significant cost reductions implemented in the second half of fiscal 2009 remain in place. Selling and administrative expenses decreased by $2,156 in the first quarter of 2011 compared to the prior year first quarter.

The sales order backlog was $3,295,000 at January 31, 2011 and $1,590,000 at January 31, 2010.

Financial Condition and Liquidity:

Net working capital at January 31, 2011 was $3,686,641, as compared to $3,635,034 at October 31, 2010. 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 2011 were 34.7 days, as compared to 39.3 days in first three months of fiscal 2010. 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).

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 with a floor of 5.0%, with a re-affirmation date of February 28, 2011. The Company renewed its line of credit for one year effective February
 
11

 
28, 2011 at the same interest rate terms. The line of credit had no outstanding balance at January 31, 2011 and October 31, 2010, and the unused line of credit was $1,000,000 at January 31, 2011. The credit agreement contains covenants that require the Company to provide annual audited financial statements and quarterly internal financial statements to the lender. There are no other covenants or restrictions.

At the current time, the line of credit continues to be available and there have not been any issues obtaining additional funds from the lender. In the event that the Company’s line of credit would not be available, the Company 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, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On August 26, 2010, the Company was served with a wrongful death lawsuit filed by the Estate of a former employee who was injured in a workplace accident while an employee of the Company.  The accident occurred in September 2008. The Plaintiff has demanded $2,500,000 to settle this claim.  The Company intends to vigorously defend this case and has contacted its liability insurance carrier to request defense and indemnification of any losses incurred in connection with this lawsuit.  The claim is currently in the early stages of discovery and the outcome is uncertain.

ITEM 5.  OTHER INFORMATION

On February 10, 2011, LaRita R. Boren, Director and the Company’s largest shareholder, suddenly and unexpectedly passed away. Her shares are now controlled by the Estate of LaRita R. Boren.
 
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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).
 
Exhibit 31.2
Certification of William E. Nielsen, Chief Financial Officer, pursuant to Rule 13a–14(a)/15d-14(a).
 
Exhibit 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.
 
Exhibit 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 14, 2011



 
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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