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EX-32.1 - EXHIBIT 32.1 - INTERNATIONAL BALER CORPibal13115form10qex32_1.htm
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EX-32.2 - EXHIBIT 32.2 - INTERNATIONAL BALER CORPibal13115form10qex32_2.htm
EX-31.2 - EXHIBIT 31.2 - INTERNATIONAL BALER CORPibal13115form10qex31_2.htm
EXCEL - IDEA: XBRL DOCUMENT - INTERNATIONAL BALER CORPFinancial_Report.xls

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 10-Q

_________________

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: January 31, 2015

or

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________

_________________

International Baler Corporation

(Exact name of registrant as specified in its charter)

_________________

Delaware 0-14443 13-2842053
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation or Organization) File Number)

Identification No.)

 

5400 Rio Grande Avenue, Jacksonville, FL 32254

(Address of Principal Executive Offices) (Zip Code)

904-358-3812

(Registrant’s telephone number, including area code)

N/A
(Former name or 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 or 15(d) of the Securities Exchange Act of 1934 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       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 Regulation 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, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer  ☐ Accelerated filer  ☐ Non-accelerated filer  ☐ Smaller reporting company  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes  ☐     No  

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes  ☒     No  ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 5,183,895 shares of common stock at February 28, 2015

 

 
 

 

INTERNATIONAL BALER CORPORATION
 
TABLE OF CONTENTS PAGE
   
PART I. FINANCIAL INFORMATION  
   
ITEM 1. FINANCIAL STATEMENTS  
  Balance Sheets as of January 31, 2015, (unaudited) and October 31, 2014 2
     
  Statements of Income for the three months ended January 31, 2015 and 2014 (unaudited)  3
     
  Statement of Changes in Stockholders’ Equity for the three months ended January 31, 2015 (unaudited)  4
     
  Statements of Cash Flows for the three months ended January 31, 2015 and 2014 (unaudtied)  5
     
  Notes to financial statements 6
     
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION  10
     
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  11
     
ITEM 4. CONTROLS AND PROCEDURES  11
     
PART II. OTHER INFORMATION  12
   
ITEM 1. LEGAL PROCEEDINGS  12
     
ITEM 5. OTHER INFORMATION  12
     
ITEM 6. EXHIBITS  12
     
SIGNATURES  13

 

1

 PART 1. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

 

INTERNATIONAL BALER CORPORATION
BALANCE SHEETS
                   
 
                   
                   
            January 31, 2015   October 31, 2014  
ASSETS           Unaudited      
                   
Current assets:                
  Cash and cash equivalents       $           2,760,312 $           2,803,698  

  Accounts receivable, net of allowance for doubtful accounts of

$24,412 at January 31, 2015 and $29,412 at October 31, 2014

  1,308,941 3,732,637  
  Inventories                     5,507,043             4,788,881  
  Prepaid expense and other current assets                    172,851                183,725  
  Deferred income taxes                      217,676                217,676  
          Total current assets                   9,966,823            11,726,617  
                   
Property, plant and equipment, at cost:                 3,262,343             3,243,153  
  Less: accumulated depreciation                 2,154,440             2,115,740  
          Net property, plant and equipment                  1,107,903             1,127,413  
                   
Other assets:                  
  Other assets                          1,256                    1,256  
                   
TOTAL ASSETS       $          11,075,982 $          12,855,286  
                   
LIABILITIES AND STOCKHOLDERS' EQUITY            
                   
Current liabilities:                
  Revolving promissory note       $                         - $              644,345  
  Notes payable-current portion                        9,941                    9,879  
  Accounts payable                      929,543                923,391  
  Accrued liabilities                      310,035             1,512,985  
  Customer deposits                   1,750,748             1,667,932  
          Total current liabilities                   3,000,267             4,758,532  
                   
  Deferred income taxes                      171,480                171,480  
  Notes payable-long term                        25,726                  28,223  
          Total liabilities                   3,197,473             4,958,235  
                   
Commitments and contingencies (Note 8)              
                   
Stockholders' equity:                
  Preferred stock, par value $.0001, 10,000,000 shares authorized, none issued       -   -
  Common stock, par value $.01, 25,000,000 shares authorized; 6,429,975 shares issued at January 31, 2015 and October 31, 2014       64,299   64,299  
  Additional paid-in capital                   6,419,687             6,419,687  
  Retained earnings                   2,075,933             2,094,475  
                      8,559,919             8,578,461  
                   
   Less:  Treasury stock, 1,245,980 shares at January 31, 2015 and October 31, 2014, at cost       (681,410)   (681,410)  
                   
           Total stockholders' equity                 7,878,509             7,897,051  
                   
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $          11,075,982 $          12,855,286  
                   
                 
See accompanying notes to financial statements.            

 

2

 

INTERNATIONAL BALER CORPORATION
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JANUARY 31, 2015 AND 2014
UNAUDITED
           
   
    2015     2014
           
Net sales:           
     Equipment  $              2,610,432    $              3,303,654
     Parts and service                  574,249                    643,913
Total net sales               3,184,681                 3,947,567
           
Cost of sales               2,724,919                 3,122,048
           
Gross profit                  459,762                    825,519
           
Operating expense:          
     Selling expense                  211,671                    265,031
     Administrative expense                  275,461                    269,508
Total operating expense                  487,132                    534,539
           
Operating (loss) income                   (27,370)                    290,980
           
Other income (expense):          
     Interest income                        891                               -
     Interest expense                     (2,063)                     (10,467)
Total other income  (expense)                     (1,172)                     (10,467)
           
Income (loss) before income taxes                   (28,542)                    280,513
           
Income tax provision                    (10,000)                    100,000
           
Net income (loss) $                 (18,542)   $                180,513
           
           
Income (loss) per share, basic and diluted $ (0.00)   $                     0.03
           
Weighted average number of shares outstanding                5,183,895                 5,183,895
           
           
See accompanying notes to financial statements.          

 

3

 

  INTERNATIONAL BALER CORPORATION
  STATEMENTS OF STOCKHOLDERS' EQUITY
  FOR THE THREE MONTHS ENDED JANUARY 31, 2015
  UNAUDITED
                                 
                                 
                                 
                             
                             
      Common Stock           Treasury Stock      
                                 
      NUMBER       ADDITIONAL        NUMBER       TOTAL  
      OF SHARES   PAR   PAID-IN   RETAINED   OF       STOCKHOLDERS'
      ISSUED   VALUE   CAPITAL   EARNINGS   SHARES   COST   EQUITY  
                                 
Balance at October 31, 2014          6,429,875  $              64,299  $         6,419,687  $         2,094,475            1,245,980  $           (681,410)  $              7,897,051  
                                 
  Net Income                       -                       -                       -              (18,542)                       -                       -                  (18,542)  
                                 
Balance at January 31, 2015          6,429,875  $              64,299  $         6,419,687  $         2,075,933            1,245,980  $           (681,410)  $              7,878,509  
                                 
                                 
                                 
See accompanying notes to financial statements.                

 

4

 

INTERNATIONAL BALER CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 2015 AND 2014
UNAUDITED
         
         
    2015   2014
       
Cash flow from operating activities:        
  Net income  (loss) $                      (18,542)  $                      180,513
  Adjustments to reconcile net income (loss) to net cash provided by (used in)        
  operating activities:        
     Depreciation and amortization                         38,700                         36,000
     Provision for doubtful accounts                         (5,000)                                 -
     Changes in operating assets and liabilities:        
       Accounts receivable                    2,428,696                      (924,380)
       Inventories                      (718,162)                       390,159
       Prepaid expenses and other assets                         10,874                         (9,956)
       Accounts payable                          6,152                      (672,510)
       Accrued liabilities and deferred taxes                    (1,202,950)                      (158,271)
       Customer deposits                         82,816                       992,859
           Net cash provided by (used in) operating activities                       622,584                      (165,586)
         
Cash flows from investing activities:        
   Purchase of property and equipment                        (19,190)                        (24,357)
           Net cash used in investing activities                        (19,190)                        (24,357)
         
Cash flows from financing activities:        
   Payments on notes payable                         (2,435)                                 -
   Payments on revolving prommissory note                      (644,345)                                 -
            Net cash used in financing activities                      (646,780)                                 -
         
Net decrease in cash and cash equivalents                        (43,386)                      (189,943)
         
Cash and cash equivalents at beginning of period                    2,803,698                    1,877,256
         
Cash and cash equivalents at end of period $                  2,760,312  $                   1,687,313
         
Supplemental disclosure of cash flow information:        
Cash paid during period for:        
    Interest $                        2,063  $                        10,467
    Income taxes                                 -                       115,000
         
         
See accompanying notes to financial statements.        

 

5

 

NOTES TO 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 annual sales outside the United States typically ranging from 10% to 35%.

  

2. Basis of Presentation:

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America 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, 2015 are not necessarily indicative of the results that may be expected for the year ending October 31, 2015. The accompanying balance sheet as of October 31, 2014 was derived from the audited financial statements as of October 31, 2014.

  

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. 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 including the analysis of historical trends, customer credit worthiness and the aging of receivables. 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 manufacture balers which include direct materials, direct and indirect labor, and overhead. The Company reviews inventory for obsolescence on a regular basis.

 

6

(c) Revenue Recognition:

 

The Company recognizes revenue when finished products and/or parts are shipped and the customer takes ownership and assumes the risk of loss. Revenue from installation services is recognized on completion of the service. The Company recognizes revenue from repair services in the period in which the service is provided.

 

(d) Warranties and Service:

 

The Company typically warrants its products for one (1) year from the date of sale as to materials and six (6) months as to labor, and offers services for other required repairs and maintenance. Service is rendered by repairing or replacing parts at the Company’s Jacksonville, Florida facility, by on-site service provided by Company personnel who are based in Jacksonville, Florida or by local service agents who are engaged as needed. 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 currently 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:

 

    2015    2014 
Beginning balance  $65,000   $60,000 
Warranty service provided   (33,517)   (22,063)
New product warranties   32,630    33,037 
Changes to pre-existing warranty accruals   887    (974)
Ending balance  $65,000   $70,000 

 

 

 

(e) Fair Value of Financial Instruments:

 

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.

 

4. Related Party Transactions:

 

Leland E. Boren, a stockholder and director of the Company, is the owner of Avis Industrial Corporation (Avis). Mr. Boren controls over 50% of the outstanding shares of the Company. Avis owns 100% of The American Baler Company, a competitor of the Company. On January 1, 2014, Avis acquired The Harris Waste Management Group, Inc., also a competitor of the Company. On August 5, 2014 Avis acquired IPS Balers, Inc. in Baxley, Georgia, another competitor of the Company. These baler companies operate independent of each other. The Company had no equipment sales to, or purchases from, these companies for the three months ended January 31, 2015 or in fiscal year ended October 31, 2014.

 

7

 

5. Inventories:

 

Inventories consisted of the following:

 

     January 31, 2015    October 31, 2014 
Raw materials  $1,888,933   $1,715,772 
Work in process   3,227,378    2,584,378 
Finished goods   390,732    488,731 
   $5,507,043   $4,788,881 

 

6. Debt:

 

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana that was entered into on January 7, 2013. The line of credit allows the Company to borrow at an interest rate equal to the sum of the LIBOR Rate applicable to each interest period plus 2.39%. The line of credit is secured by all assets of the Company and has a term of two years. The credit agreement had been modified to extend the termination date to March 15, 2015. On February 26, 2015 the credit agreement was renewed with a termination date of May 15, 2017. The line of credit had no outstanding balance at January 31, 2015 and a balance of $644,345 at October 31, 2014.

 

In July 2014 the Company financed a service truck by entering into a loan agreement with Ford Credit for $41,254. The note has a term of forty-eight months at an interest rate of 3.8%. Principal payments for fiscal years ending October 31, are scheduled as follows:

 

2015 $ 7,444
2016   10,255
2017   10,646
2018   7,322
Total   $35,667

 

7. Income Taxes:

 

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, there is no valuation allowance as of January 31, 2015 and at October 31, 2014. 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, 2015 and October 31, 2014, net deferred tax assets were $46,196.

 

8. 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 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. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

 

On August 26, 2010, the Company was served with a wrongful death lawsuit filed by the Estate of a former employee who was fatally injured in a workplace accident while an employee of the Company. The accident occurred in September 2008. The Plaintiff demanded $2,500,000 to settle this claim. A motion to dismiss the Complaint was granted without prejudice in January 2012, allowing the Plaintiff the ability to file an amended Complaint.

8

 

In July 2014, the Company filed a Motion for Summary Judgment to have the complaint dismissed. On December 1, 2014, the Company and its insurance company agreed to settle this claim for $150,000. The Company was responsible for $75,000, one-half of the total settlement amount. During the fourth quarter of fiscal 2014, the Company accrued an additional $50,000 for a total accrued liability of $75,000 related to this settlement. This settlement amount was paid in the first quarter of fiscal 2015, and the case has been closed.

 

On December 26, 2013 the Company was served with a civil action filed by Georgetown Paper Stock of Rockville, Inc. for breach of warranties. In November 2014, a jury returned a verdict in favor of the Plaintiff, Georgetown Paper Stock of Rockville, Inc. in the amount of $368,248. The Company was responsible for $277,968 of this amount and its dealer, BE Equipment, Inc., was responsible for $90,280. The baler involved in this claim will be returned to the Company. The Company recorded an accrued liability of $285,000 and an asset in transit of $85,000 resulting in net expense of $200,000 in the fourth quarter of fiscal 2014. The payments were made in the first quarter of fiscal 2015. The baler is scheduled to be removed and returned starting on March 21, 2015.

 

In November 2014, the Company agreed to a Consent Order with the Florida Department of Environmental Protection to remove solid waste sand blasting material from its property. The Company recorded an accrued liability of $291,000 as of October 31, 2014, for the cost of the removal of this material. The removal of the sand blasting material was completed in January 2015.

9

 

ITEM 2. MANGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read together with our unaudited 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, 2014, 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 ended January 31, 2015, the Company had net sales of $3,184,681 compared to net sales of $3,947,567 in the first quarter of fiscal 2014, a decrease of 19.3%. The decrease in net sales was the result of no shipments of synthetic rubber balers in the first quarter of 2015 compared to the shipment of four rubber balers, $1,102,800, in the first quarter of 2014. The Company had approximately $250,000 of shipments of balers moved from the first quarter to the second quarter by its customers.

 

The Company had a net loss of $18,542 in the first quarter of fiscal 2015, compared to net income of $180,513 in the first quarter of 2014. The lower income was the result of the lower rubber baler shipments discussed above. Gross profit margins were lower due to the lower level of rubber baler shipments.

 

The sales order backlog was approximately $9,645,000 at January 31, 2015 and $11,300,000 at January 31, 2014.

 

Financial Condition and Liquidity:

 

Net working capital at January 31, 2015 was $6,966,556 as compared to $6,986,085 at October 31, 2014. The Company currently believes that it will have sufficient cash flow to be able to fund operating activities for the next twelve months.

 

Average days sales outstanding (DSO) in the first three months of fiscal 2015 were 44.4 days, as compared to 75.0 days in the first three months of fiscal 2014. 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 day’s sales for the period (period sales ÷ 91.25).

 

During the three months ended January 31, 2015 and 2014, the Company made additions to plant and equipment of $19,190 and $24,357, respectively.

 

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana that was entered into on January 7, 2013. The line of credit allows the Company to borrow at an interest rate equal to the sum of the LIBOR Rate applicable to each interest period plus 2.39%. The line of credit is secured by all assets of the Company and has a term of two years. The credit agreement had been modified to extend the termination date to March 15, 2015. On February 26, 2015 the credit agreement was renewed with a termination date of May 15, 2017. The line of credit had no outstanding balance at January 31, 2015 and a balance of $644,345 at October 31, 2014.

 

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.

 

10

 

 

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 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.

 

Management, with the participation of the Company’s principal executive and principal financial officers, assessed the effectiveness of the Company’s internal control over financial reporting as of January 31, 2015. This assessment was performed using the criteria established under the Internal Control-Integrated Framework established by Committee of Sponsoring Organization of the Treadway Commission (“COSO”).

 

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, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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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 fatally injured in a workplace accident while an employee of the Company. The accident occurred in September 2008. The Plaintiff demanded $2,500,000 to settle this claim. A motion to dismiss the Complaint was granted without prejudice in January 2012, allowing the Plaintiff the ability to file an amended Complaint. In July 2014, the Company filed a Motion for Summary Judgment to have the complaint dismissed. On December 1, 2014, the Company and its insurance company agreed to settle this claim for $150,000. The Company was responsible for $75,000, one-half of the total settlement amount. During the fourth quarter of fiscal 2014, the Company accrued an additional $50,000 for a total accrued liability of $75,000 related to this settlement. This settlement amount was paid in the first quarter of fiscal 2015, and the case has been closed.

 

On December 26, 2013 the Company was served with a civil action filed by Georgetown Paper Stock of Rockville, Inc. for breach of warranties. In November 2014, a jury returned a verdict in favor of the Plaintiff, Georgetown Paper Stock of Rockville, Inc. in the amount of $368,248. The Company was responsible for $277,968 of this amount and its dealer, BE Equipment, Inc., was responsible for $90,280. The baler involved in this claim will be returned to the Company. The Company recorded an accrued liability of $285,000 and an asset in transit of $85,000 resulting in net expense of $200,000 in the fourth quarter of fiscal 2014. The payments were made in the first quarter of fiscal 2015. The baler is scheduled to be removed and returned starting on March 21, 2015.

 

In November 2014, the Company agreed to a Consent Order with the Florida Department of Environmental Protection to remove solid waste sand blasting material from its property. The Company recorded an accrued liability of $291,000 as of October 31, 2014, for the cost of the removal of this material. The removal of the sand blasting material was completed in January 2015.

 

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.

 

Date: March 12, 2015   INTERNATIONAL BALER CORPORATION
     
  By: /s/ D. Roger Griffin
    D. Roger Griffin
    Chief Executive Officer

 

 

Date: March 12, 2015   INTERNATIONAL BALER CORPORATION
     
  By: /s/ William E. Nielsen
    William E. Nielsen
    Chief Financial Officer

Dated: Septem D Dated: March 12, 2015

 

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