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EX-31.2 - EXHIBIT 31.2 - INTERNATIONAL BALER CORPex31_2.htm
EX-32.2 - EXHIBIT 32.2 - INTERNATIONAL BALER CORPex32_2.htm
EX-32.1 - EXHIBIT 32.1 - INTERNATIONAL BALER CORPex32_1.htm
EX-31.1 - EXHIBIT 31.1 - INTERNATIONAL BALER CORPex31_1.htm

 

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, 2016

 

☐  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 of Incorporation or Organization) (Commission File Number) (I.R.S. Employer Identification No.)

     
     
  5400 Rio Grande Avenue, Jacksonville, FL 32254  
  (Address of Principal Executive Officer) (Zip Code)  
     
     
  904-358-3812  
  (Registrant’s telephone number, including area code)  
     
     
  N/A  
  (Former name of 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

 

 i 
 

 

INTERNATIONAL BALER CORPORATION

 

TABLE OF CONTENTS

 

  PAGE
PART I. FINANCIAL INFORMATION  
   
ITEM 1. FINANCIAL STATEMENTS 2
   
Balance Sheets ad of January 31, 2016, (unaudited) and October 31, 2015 2
   
Statements of Income for the three months ended January 31, 2016 and 2015 (unaudited) 3
   
Statement of Changes in Stockholders’ Equity for the three months ended January 31, 2016 (unaudited) 4
   
Statement of Cash Flows for the three months ended January 31, 2016 and 2015 (unaudited) 5
   
Notes to Financial Statements (unaudited) 6
   
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 10
   
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 11
   
ITEM. 4 CONTROLS AND PROCEDURES 11
   
PART II. OTHER INFORMATION 11
 
ITEM 1. LEGAL PROCEEDINGS 11
   
ITEM 5. OTHER INFORMATION 12
   
ITEM 6. EXHIBITS 12
   
SIGNATURES 13

 

 1 
 

 

INTERNATIONAL BALER CORPORATION
BALANCE SHEETS
           
           
    January 31, 2016    October 31, 2015 
ASSETS   Unaudited      
           
Current assets:          
Cash and cash equivalents  $4,842,162   $3,665,219 
Certificates of deposit   492,455    654,753 
Accounts receivable, net of allowance for doubtful accounts of $15,000 at January 31, 2016 and at October 31, 2015   537,636    1,218,989 
Inventories   3,482,945    3,871,167 
Prepaid expense and other current assets   129,680    101,610 
Deferred income taxes   246,186    246,186 
Total current assets   9,731,064    9,757,924 
Property, plant and equipment, at cost:   3,460,843    3,451,863 
Less: accumulated depreciation   2,309,706    2,269,206 
Net property, plant and equipment   1,151,137    1,182,657 
Other assets   310,145    309,757 
TOTAL ASSETS  $11,192,346   $11,250,338 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Notes payable-current portion  $—     $10,223 
Accounts payable   693,939    463,000 
Accrued liabilities   599,689    904,798 
Customer deposits   929,764    953,057 
Total current liabilities   2,223,392    2,331,078 
Deferred income taxes   191,004    191,004 
Notes payable-long term   —      18,837 
Total liabilities   2,414,396    2,540,919 
           
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;  6,429,875 shares issued at January 31, 2016 and October 31, 2015   64,299    64,299 
Additional paid-in capital   6,419,687    6,419,687 
Retained earnings   2,975,374    2,906,843 
    9,459,360    9,390,829 
Less:  Treasury stock, 1,245,980 shares at January 31, 2016 and October 31, 2015, at cost   (681,410)   (681,410)
 Total stockholders' equity   8,777,950    8,709,419 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $11,192,346   $11,250,338 
           
           
See accompanying notes to financial statements. 

 

 2 
 

 

INTERNATIONAL BALER CORPORATION
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JANUARY 31, 2016 AND 2015
UNAUDITED
       
    2016    2015 
           
Net sales:          
Equipment  $2,988,693   $2,610,432 
Parts and service   591,134    574,249 
Total net sales   3,579,827    3,184,681 
Cost of sales   3,019,318    2,724,919 
Gross profit   560,509    459,762 
           
           
Operating expense:          
Selling expense   233,521    211,671 
Administrative expense   222,266    275,461 
Total operating expense   455,787    487,132 
Operating income   104,722    (27,370)
Other income (expense):          
Interest income   2,105    891 
Interest expense   (296)   (2,063)
Total other income  (expense)   1,809    (1,172)
Income before income taxes   106,531    (28,542)
Income tax provision   38,000    (10,000)
Net income  $68,531   $(18,542)
           
           
Income per share, basic and diluted  $0.01   $(0.00)
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, 2016

(UNAUDITED)

                      
                   
                   
    Common Stock              Treasury Stock      
    NUMBER OF SHARES ISSUED    PAR VALUE    ADDITIONAL PAID-IN CAPITAL    RETAINED EARNINGS    NUMBER OF SHARES    COST    TOTAL STOCKHOLDERS’ EQUITY 
                                    
Balance at October 31, 2015   6,429,875   $64,299   $6,419,687   $2,906,843    1,245,980   $(681,410)  $8,709,419 
                                    
Net Income   —      —      —      68,531    —      —      68,531 
                                    
Balance at January 31, 2016   6,429,875   $64,299   $6,419,687   $2,975,374    1,245,980   $(681,410)  $8,777,950 
                                    
                                    

See accompanying notes to financial statements.

 

 4 
 

 

INTERNATIONAL BALER CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 2016 AND 2015
UNAUDITED
       
       
    2016    2015 
           
Cash flow from operating activities:          
Net income  (loss)  $68,531   $(18,542)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:          
Depreciation and amortization   40,500    38,700 
Provision for doubtful accounts   —      (5,000)
Changes in operating assets and liabilities:          
Accounts receivable   681,353    2,428,696 
Inventories   388,222    (718,162)
Prepaid expenses and other assets   (28,070)   10,874 
Accounts payable   230,939    6,152 
Accrued liabilities   (305,109)   (1,202,950)
Customer deposits   (23,293)   82,816 
Net cash provided by operating activities   1,053,073    622,584 
           
Cash flows from investing activities:          
Purchase of property and equipment   (8,980)   (19,190)
Redemptions of certificates of deposit   161,910    —   
Net cash provided by (used in) investing activities   152,930    (19,190)
           
Cash flows from financing activities:          
Payments on notes payable   (29,060)   (2,435)
Payments on revolving promissory note   —      (644,345)
Net cash used in financing activities   (29,060)   (646,780)
           
Net increase (decrease) in cash and cash equivalents   1,176,943    (43,386)
Cash and cash equivalents at beginning of period   3,665,219    2,803,698 
Cash and cash equivalents at end of period  $4,842,162   $2,760,312 
           
Supplemental disclosure of cash flow information:          
Cash paid during period for:          
Interest  $2,063   $2,063 
Income taxes  $285,000   $—   
           
           
           
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, 2016 are not necessarily indicative of the results that may be expected for the year ending October 31, 2016. The accompanying balance sheet as of October 31, 2015 was derived from the audited financial statements as of October 31, 2015.

 

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:

 

    2016    2015 
Beginning balance  $70,000   $65,000 
Warranty service provided   (8,031)   (33,517)
New product warranties   29,887    32,630 
Changes to pre-existing warranty accruals   (21,856)   887 
Ending balance  $70,000   $65,000 

 

(e) Fair Value of Financial Instruments:

  

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, short term certificates of deposit, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities. The fair value of non-current certificates of deposit have maturities of less than 22 months and include low interest rates consistent with market rates, therefore the carrying value of these instruments approximates fair value. The non-current certificates of deposit are considered level 2 instruments within the fair value hierarchy.

 

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 75% 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. (Harris), also a competitor of the Company. On July 31, 2014 Harris acquired the assets of IPS Balers, Inc. in Baxley, Georgia, another competitor of the Company. These baler companies operate completely independent of each other. The Company had no equipment sales to, or purchases from, these companies for the three months ended January 31, 2016 or in fiscal year ended October 31, 2015.

 7 
 

5. Inventories:

 

Inventories consisted of the following:

 

     January 31, 2016    October 31, 2015 
Raw materials  $1,558,809   $1,688,032 
Work in process   1,488,666    1,758,666 
Finished goods   435,470    424,469 
   $3,482,945   $3,871,167 

 

6. Debt:

 

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana. 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. 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, 2016 and at October 31, 2015.

 

In July 2014 the Company financed a service truck by entering into a loan agreement with Ford Credit for $41,254. The note had a term of forty-eight months at an interest rate of 3.8%. The loan balance of $27,382 was paid off in January 2016.

 

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, 2016 and at October 31, 2015. 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, 2016 and October 31, 2015, net deferred tax assets were $55,182.

 

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. 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. This settlement amount was paid in the first quarter of fiscal 2015, and the case has been closed.

 

 8 
 

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 was returned in the second quarter of fiscal 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.

 

The company had outstanding commitments relating to standby letters of credit for performance and warranty guarantees of approximately $801,000 at January 31, 2016 and $963,000 at October 31, 2015. These letters of credit are collateralized by certificates of deposit which have expiration dates which coincide with the expiration dates of the letters of credit. Certificates of deposit of $308,889 at January 31, 2016 and $308,501 at October 31, 2015, which mature in one year or more are included in other assets in the accompanying balance sheet.

 

 9 
 

ITEM 2. MANAGEMENT’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, 2015, 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, 2016, the Company had net sales of $3,579,827 compared to net sales of $3,184,681 in the first quarter of fiscal 2015, an increase of 12.4%. The increase in net sales was primarily the result of higher shipments of two-ram balers in the first quarter of fiscal 2016, seven, compared to the first quarter of fiscal 2015, four. Two-ram balers are the Company’s largest balers and range in price from $160,000 to over $500,000.

 

The Company had a net income of $68,531 in the first quarter of fiscal 2016, compared to a net loss of $18,542 in the first quarter of fiscal 2015. The higher net income was the result of the higher sales and gross profit and lower selling and administrative expenses.

 

The sales order backlog was approximately $2,785,000 at January 31, 2016 and $9,645,000 at January 31, 2015.

 

Financial Condition and Liquidity:

 

Net working capital at January 31, 2016 was $7,507,672 as compared to $7,426,846 at October 31, 2015. 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 2016 were 18.2 days, as compared to 44.4 days in the first three months of fiscal 2015. 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, 2016 and 2015, the Company made additions to plant and equipment of $8,980 and $19,190, respectively.

 

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana. 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. 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, 2016 and October 31, 2015.

 

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, 2016. 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.

 

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. This settlement amount was paid in the first quarter of fiscal 2015, and the case has been closed.

 

 11 
 

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 returned in the second quarter of fiscal 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 INFORMATON

 

None.

 

ITEM 6. EXHIBITS

 

The following exhibits are submitted herewith:

 

Exhibit No.   Description
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.

 

 12 
 

 

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.

 

    INTERNATIONAL BALER CORPORATION
     
Dated: March 11, 2016 By: /s/ D. Roger Griffin
    D. Roger Griffin
    Chief Exeuctive Officer
     
     
Dated: March 11, 2016 By: /s/ William E. Nielsen
    William E. Nielsen
    Chief Financial Officer

 

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