QUARTERLY REPORT FOR INDUSTRIAL RUBBER PRODUCTS, INC.
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period Ended June 30, 1999 or
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Transition Period Ended
From to
----------------
Commission file number 333-46643
INDUSTRIAL RUBBER PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1550505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3804 East 13th Ave.
Hibbing, MN 55746
(Address of principal executive offices) (Zip Code)
(218) 263-8831
(Registrant's telephone number, including area code)
Not applicable
(Former, name, former address and former fiscal year,
if changes 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 periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.X Yes No
Applicable Only to Issuers 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 the 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 practical date:
Common Stock, $.001 Par Value - 4,162,000 shares as of July 31, 1999.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Industrial Rubber Products, Inc.
Condensed Balance Sheets
June 30, 1999 and December 31, 1998
<CAPTION>
June 30 December 31
1999 1998
Unaudited
--------- ----------
Assets
<S> <C> <C>
Current Assets
Cash and Cash equivalents $ 693,339 $ 2,715,966
Marketable debt securities 0 1,642,784
Trade receivables, less allowances for
doubtful accounts of $295,944 in 1999
And $280,000 in 1998 2,309,742 947,364
Income Tax Refund Receivable 233,300 254,200
Inventories 1,602,081 408,731
Prepaid expenses 476,938 57,996
Other receivables 811,490 0
Deferred taxes 133,000 133,000
----------- -----------
Total current assets 6,259,890 6,160,041
Other Assets
Cash value of life insurance 149,894 135,166
Loan origination fees 35,000 0
Equipment deposit 74,116 0
Non-Compete covenant 150,000 0
Goodwill 450,021 0
Accumulated Amortization (31,601) 0
Prepaid expenses 189,996 0
Other 0 23,884
----------- -----------
Total other assets 1,017,426 159,050
Deferred Taxes 321,729 207,000
Property Plant and Equipment
Leasehold Improvements 11,000 0
Land 362,008 10,000
Buildings 2,095,190 572,907
Automotive equipment 691,291 458,759
Machinery and equipment 7,064,400 2,030,453
----------- -----------
10,223,889 3,072,119
Less Accumulated depreciation 1,735,154 1,372,420
----------- -----------
Net Property and Equipment 8,488,735 1,699,699
----------- -----------
$ 16,087,780 $ 8,225,790
========== =========
Liabilities and Stockholder's Equity
Current Liabilities
Bank note payable $7,220,000 $ 0
Current maturities of
long-term debt 54,276 174,263
Due to related party (Note 2) 0 0
Accounts payable 1,237,244 485,493
Accrued expenses 690,387 547,034
----------- -----------
Total current liabilities 9,201,907 1,206,790
----------- -----------
Long-term Debt, less current
maturities 393,002 329,108
----------- -----------
Stockholder's Equity (Note 3)
Common stock, $.001 par value;
authorized 25,000,000 shares;
issued 4,194,000 shares 4,194 4,194
Additional paid-in capital 5,605,832 5,605,832
Cumulative Translation Adjustment
(Note 6) 5,384 0
Retained earnings 914,395 1,090,605
----------- -----------
6,529,805 6,700,631
Less cost of shares of common
Stock reacquired 36,934 10,739
Total Stockholder's Equity 6,492,871 6,689,892
----------- -----------
$ 16,087,780 $ 8,225,790
========= =========
</TABLE>
See notes to the condensed financial statements.
<TABLE>
Industrial Rubber Products, Inc.
Condensed Statements of Income
(Unaudited)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------- ------------------
1999 1998 1999 1998
---- ---- ----- ----
<S> <C> <C> <C> <C>
Net Sales $4,322,763 $ 3,405,206 $ 5,954,434 $ 7,221,982
Cost of Sales 3,090,826 2,706,870 4,581,793 5,462,458
----------- ----------- ----------- -----------
Gross profit 1,231,937 698,336 1,372,641 1,759,524
Selling, general and
administrative
expenses 999,237 483,237 1,529,779 898,424
----------- ----------- ----------- -----------
Operating income
(loss) 232,700 215,099 (157,138) 861,100
----------- ----------- ----------- -----------
Nonoperating Income
Expense
Interest income 1,563 122,518 24,777 123,704
Interest expense (148,319) (58,306) (159,049) (94,737)
Loss on Disposal
of assets (234) 0 (234) 0
----------- ----------- ---------- -----------
(146,990) 64,212 (134,506) 28,967
----------- ----------- ----------- -----------
Income (Loss) before
taxes $ 85,710 279,311 (291,644) 890,067
----------- ----------- ----------- -----------
Income tax expense
(credit) 35,554 111,726 (115,434) 111,726
----------- ----------- ----------- -----------
Net Income (Loss) before
Pro Forma Taxes 50,156 167,585 (176,210) 778,341
----------- ----------- ----------- -----------
Provision for Pro
forma income taxes
(see Note 4) 0 0 0 238,195
----------- ----------- ----------- -----------
Net Income (Loss) $ 50,156 167,585 (176,210) 540,146
======== ======= ========= ========
Basic earnings (loss)
per share
(See Note 5) .01 .04 (.04) .16
=========== =========== =========== ===========
Weighted average
shares outstanding 4,183,401 3,875,538 4,183,495 3,402,197
</TABLE>
See notes to the condensed financial statements.
<TABLE>
Industrial Rubber Products, Inc.
Statements of Cash Flows
(Unaudited)
<CAPTION>
Six months ended
June 30,
-------------------------
1999 1998
<S> <C> <C>
Cash Flows from Operating Activities
Net Income (Loss) $ (176,210) $ 778,341
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation 362,734 158,394
Amortization 31,601 0
Deferred Taxes (114,729) 0
Changes in working capital components
(Increase)Decrease in:
Receivables (227,773) (976,501)
Inventories 307,161 400,639
Prepaid expenses (579,713) 24,237
Increase(Decrease) in:
Accounts payable and accrued
expenses 77,212 379,259
----------- ----------
Net cash provided by (used in)
operating activities (319,717) 764,369
--------- -----------
Cash Flows from Investing Activities
Purchase of property & equipment (252,294) (479,077)
Proceeds from maturity of
marketable debt securities 1,642,784 0
Purchase of businesses (9,962,652) 0
Receipts from (advances to) related
party 0 0
(Increase) decrease in cash value
of life insurance (14,728) (1,500)
Other investing activities (74,116) 0
----------- -----------
Net Cash provided by (used in)
investing activities (8,661,006) (480,577)
----------- ----------
Cash Flows From Financing Activities
Net proceeds of Stock Offering 0 5,473,369
Net proceeds (repayments) on short-
term borrowings 7,220,000 (301,000)
Proceeds from long-term borrowings 0 320,000
Principal payments on long-term
borrowings (206,093) (77,620)
Disbursements for loan
origination fees (35,000) 0
Disbursements for common
stock reacquired (26,195) 0
Increase in excess of outstanding
checks over bank balance 0 0
Dividends paid on common stock
(See Note 3) 0 (1,095,000)
Advances from (repayments to)
related party 0 (106,825)
----------- ----------
Net cash provided by (used in)
financing activities 6,952,712 4,212,924
(Increase) Decrease in Foreign
Currency Adjustment (Note 6) 5,384 0
Net increase (decrease) in cash and
cash equivalents (2,022,627) 4,496,716
Cash and cash equivalents
Beginning 2,715,966 132,344
---------- ----------
Ending $ 693,339 $ 4,629,060
========== ==========
Supplemental Disclosures of Cash Flow
Information
Cash payments for interest $ 114,023 $ 94,737
========== ==========
Cash payments for income taxes $ 0 $ 257,179
========== ==========
</TABLE>
See notes to the condensed financial statements.
Supplemental Schedule of Noncash Investing and Financing Activities
Acquisition of business
Cash purchase price $ 9,962,652
Accounts Receivable 1,113,705
Other receivables 811,490
Inventories 1,500,511
Other current assets 29,226
Property and Equipment 6,899,475
Excess of cost over net assets
of Acquired companies 426,137
Accounts payable and accrued
items assumed (817,892)
--------------
$ 9,962,652
Industrial Rubber Products, Inc.
Notes to Condensed Financial Statements
June 30, 1999
(Unaudited)
Note 1. Basis of Presentation. The accompanying interim financial
statements presented have been prepared by Industrial Rubber Products, Inc. (the
"Company") without audit, and in the opinion of the management, reflect all
adjustments of a normal recurring nature necessary for a fair statement of (a)
the results of operations for the three months ended June 30, 1999 and June 30,
1998 (b) the results of operations for the six months ended June 30, 1999 and
June 30, 1998 (c) the financial position at June 30, 1999 and (d) the cash flows
for the six month periods ended June 30, 1999 and June 30, 1998. Operating
results for the three and six month periods ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999. The balance sheet presented as of December 31, 1998 has been
derived from the financial statements that have been audited by the Company's
independent public accountants. The financial statements and notes are condensed
as permitted by Form 10-QSB and do not contain certain information included in
the annual financial statements and notes of the Company. The consolidated
financial statements and notes included herein should be read in conjunction
with the financial statements and notes included in the Company's Form 10-KSB
filed March 29, 1999.
Note 2. Related Company Transactions. As of June 30, 1999, the Company
had no outstanding payables to Nelson Roofing, Inc., a company owned by the
majority stockholder of the Company. The Company also provides management and
administrative services for Nelson Roofing, Inc., and receives a management fee
for such services. Management fees invoiced to Nelson Roofing, Inc. amounted to
$36,561 in the second quarter of 1999. Management fees for the six-month period
ending June 30, 1999, amounted to $55,450.
The Company rents a house in Utah owned by the majority stockholder on a
month to month basis. Total rent paid to the majority stockholder amounted to
$8,460 in the second quarter of 1999. Rent paid for the six-month period ending
June 30, 1999, amounted to $16,920.
Note 3. Stockholder's Equity. As described in Note 4 below, the Company
through March 31, 1998 was taxed as a S Corporation. The Company made
distributions through the third quarter totaling $1,095,000 to its majority
shareholder to enable him to pay income taxes on the Company's 1997 calendar
year and 1998 first quarter income.
Note 4. Income Taxes. The Company was an S corporation from January 1, 1989
until March 31, 1998. As an S corporation, the Company generally was not
responsible for income taxes; instead, the then sole stockholder of the Company
was taxed on the Company's taxable income.
On April 24, 1998, the Company completed an Initial Public Offering for the
sale of common stock. In anticipation of that offering, the Company filed an
election to terminate its status as an S corporation effective March 31, 1998.
Accordingly, the Company became subject to federal and state income taxes from
and after April 1, 1998.
The pro forma information for income taxes as of March 31, 1998 represents
the estimated income taxes that would have been reported had the Company filed
federal and state income tax returns as a C Corporation for the period ending
March 31, 1998.
Note 5. Earnings per share. Earnings per share are computed based upon the
weighted average number of shares outstanding during the period.
Note 6. Total comprehensive income. For the six month period ended June 30,
1999, total comprehensive income/loss was a loss of $172,886. For the quarter
ended June 30,1999 total comprehensive income was $53,480. The difference
between total comprehensive income and net income was due to foreign currency
transaction adjustment net of tax.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Net Sales. Net sales for the second quarter of 1999 of $4,322,763 compares
with $3,405,206 in the same quarter of 1998. The increase in sales compared with
1998 relates to the acquisition of certain of the assets of the Irathane Systems
Division of Illinois Tool Works, Inc., (Irathane Systems) which accounted for
approximately $2,600,000 in net sales, and the acquisition of certain of the
assets of Sonwil Products, Inc., d/b/a TJ Products (TJ Products) which accounted
for approximately $800,000 in net sales. These increases were partially offset
by the absence of any major pipe-lining projects. The performance of and the
timing of shipments under these large pipe-lining contracts cause fluctuations
in the Company's quarterly operating results.
Net sales for the six month period ending June 30, 1999, of $5,954,434
compares with $7,221,982 in the same period in 1998. The decrease in sales
compared with 1998 results from the absence of major pipe lining projects,
partially offset by additional net sales from the 1999 acquisitions which were
approximately $2,600,000 from Irathane Systems and $1,350,000 from TJ Products.
The Company's order backlog on June 30, 1999, was approximately
$2,030,000.
Cost of Sales. Cost of sales as a percentage of net sales was 71.5% in the
second quarter of 1999 compared with 79.5% in same quarter of 1998. The decrease
was the result of above average costs on the Batu-Hijau project in the 1998
period. Gross profit improved from 20.5% of net sales in the second quarter of
1998 to 28.5% of net sales in the second quarter of 1999. In dollar terms, gross
profit increased from $698,336 in the second quarter of 1998, to $1,231,937 in
the second quarter of 1999.
For the first six months of 1999 the cost of sales was 76.9% of net sales
compared with 75.6% for the same period in 1998. Gross profit decreased from
24.4% of net sales, $1,759,524, for the first six months of 1998 to 23.1% of net
sales, $1,372,641, for the same period in 1999.
Selling, General and Administrative Expenses. Selling, general, and
administrative expenses increased from $483,237 (14.2% of net sales) in the
second quarter of 1998, to $999,237 (23.1% of net sales) in the same quarter of
1999. For the six month period ending June 30, these expenses increased from
$898,424 (12.4% of net sales) in 1998, to $1,529,779 (25.7% of net sales) in
1999. These increases were due primarily to increased staffing, additions of
administrative personnel related to the Company's Initial Public Offering and
the acquisition of Irathane Systems and TJ Products.
Nonoperating Income and Expense. The major nonoperating expense, interest
expense, increased from $58,306 in the second quarter of 1998 to $148,319 in
1999. This was due to $7 million dollars of bank borrowings to finance the
Irathane Systems acquisition. Nonoperating interest income decreased from
$122,518 in the second quarter of 1998, to $1,563 in the same quarter of 1999.
In 1998, interest was earned on the proceeds of the initial public offering.
These proceeds were used during the first quarter of 1999 reducing interest
earned in the first half of 1999 compared to 1998. The result of all these
factors was income of $64,212 from all nonoperating activities for the second
quarter of 1998 compared an expense from all nonoperating activities of $146,990
in the same quarter in 1999.
For the first six months interest expense increased from $94,737 in 1998,
to $159,049 in 1999. Interest income decreased from $123,704 in 1998 to $24,777
in 1999. The result was an income from all nonoperating activities of $28,967 in
1998 compared with an expense from all nonoperating activities of $134,506 in
the same period in 1999.
Net Income. Net income (before tax) for the second quarter of 1998 was
$279,311 (8.2% of net sales) and compares with $85,710 (2.0% of net sales) for
the same quarter in 1999. The decrease from 1998 was due primarily to
extraordinary costs and integration issues for the Irathane Systems and TJ
Products acquisitions. Net income (before tax) for the six month period ending
June 30, 1998, of $890,067 (12.3% of net sales), compared with a loss of
$291,644 for the same period in 1999.
Income Taxes. As discussed elsewhere in this Form 10-QSB, the Company was
an S corporation until March 31, 1998, and as such was generally not responsible
for income taxes. Instead, the then sole stockholder was taxed on the Company's
taxable income. Income taxes during the second quarter of 1998 were $111,726. In
the second quarter of 1999, were $35,554.
It is estimated that income taxes for the six months ending June 30, 1998,
would have been $349,921 compared with a credit of $115,434 for the same period
in 1999.
Cash Flows. The Company's cash flows from operating activities showed net
cash used of $319,717 for the first six months of 1999. Working capital
component changes accounted for net usage of $429,113, with prepaid expenses for
the TJ Pproducts acquisition totaling nearly $400,000. During the same period in
1998, net cash provided from operations was $764,369, nearly the same amount as
net income during the period.
The Company showed net cash used in investing activities of $8,661,006 in
the first six months of 1999. This resulted from $9,962,652 for the purchase of
TJ Products and Irathane Systems partially offset by proceeds from marketable
securities of $1,642,784. By comparison, the first six months of 1998 showed net
cash used of $480,577, nearly all for the purchase of new equipment.
The Company's cash flows from financing activities reflects the proceeds of
a $7 million dollar bridge loan for the Irathane Systems acquisition from U.S.
Bank on March 30, 1999. This item accounted for nearly all of the $6,952,712 of
the net cash provided from financing activities for the six month period. During
the same period in 1998, $4,212,924 of net cash was provided by financing
activities. This was the result of the net proceeds of the Initial Public
Offering, less the dividend payment referenced above.
Liquidity and Sources of Capital.
At June 30, 1999, the Company had working capital of $4,057,983, excluding
a $7,000,000 bank note which will be reissued as a long-term note on or before
September 30, 1999. As disclosed elsewhere in this Form 10-QSB, the Company used
the proceeds of this borrowing to purchase the assets of ITW's Irathane System
division on March 31, 1999. Management believes that the conversion of this
note, cash flow from operations, and other bank borrowings will be sufficient to
fund operations and expansion plans of the Company for at least 12 months. In
order to meet its needs beyond 12 months, the Company may be required to raise
additional capital.
Impact of the Year 2000 Issue
The Company has established a team to assess and address the possible
exposures related to the Year 2000 (Y2K) issue and has progressed through the
assessment phase. It will be using both in-house personnel and outside resources
to accomplish this task. The areas under investigation include business computer
systems, production equipment, vendor readiness and contingency plans. The
Company does not use internally developed computer software and is therefore not
anticipating major reprogramming efforts. The Company's primary financial
computing system has been assessed and is certified Y2K compliant. There are
several ancillary applications that may not be currently Y2K compliant. The
Company expects them to be compliant by the end of the third quarter. The
majority of the Company's personal computers are currently Y2K compliant. Those
computers that may not be currently Y2K compliant are planned to be upgraded or
replaced in the ordinary course of business. None of these replacements have
been accelerated and the cost of replacement is not anticipated to have a
material effect on the Company's financial statements. Equipment used for
production or quality control do not use dates to control operations. The costs
of this examination to date have been expensed as incurred and have not been
material.
The Company mailed questionnaires to each of its significant vendors and
customers early in the second quarter of 1999 to determine the extent to which
the Company may be vulnerable to those third parties' failure to remediate their
own Y2K issues. The assessment is currently being completed. The Company
anticipates developing a contingency plan once it has completed its assessment
of significant vendor and customer compliance. The Company anticipates the
assessment will be completed early in the third quarter. A contingency plan, if
needed, will be developed during the second half of 1999 to minimize the
Company's exposure to work slowdowns or business disruptions. In the event any
vendors are not Y2K compliant, the Company may seek new vendors to meet its
production needs. Any costs that may be incurred by the Company that are related
to external Y2K issues are unknown at this time (other than the immaterial costs
of the questionnaire itself). However, management expects that after reviewing
and evaluating the responses to the survey, it will be able to complete an
assessment of its Y2K exposure and estimate the costs associated with resolving
any Y2K issues.
Although the Company does not at this time expect a significant impact on
its financial position, results of operations and cash flows, the assessment has
not been completed and there can be no assurance that the systems of other
companies will be converted on a timely basis and will not have a corresponding
adverse effect on the Company.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities and Use of Proceeds.
(1) Effective date of the Securities Act registration statement for which the
use of proceeds information is being disclosed: April 23, 1998. Commission file
number assigned to the registration statement: 333-46643.
(2) Offering date: April 24, 1998.
(3) Offering did not terminate before any securities were sold.
(i) Offering terminated April 24, 1998.
(ii) Name of managing underwriter: R.J. Steichen & Company.
(iii) Class of securities registered: Common stock.
(iv) Amount registered: 1,260,000 shares. Aggregate price of the offering
amount registered: $6,300,000. Amount sold: 1,260,000 shares. Aggregate offering
price of the amount sold: $6,300,000.
(v) Amount of expenses incurred for the issuer's account in connection with
the issuance and distribution of the securities registered, for underwriting
discounts and commissions, finders' fees, expenses paid to or for underwriters,
other expenses and total expenses:
Underwriter's Discount $472,500
NASD Fee 1,305
NASDAQ SmallCap Market Fee 12,344
Registration Fee 2,375
Printing Expenses 23,645
Legal Fees and Expenses 100,841
Accounting Fees and Expenses 70,000
Blue Sky Fees and Expenses 14,849
Transfer Agent Fees and Expenses 3,152
Underwriter's Nonaccountable
Expense Allowance 126,000
Miscellaneous 9,723
$836,724
(A) Direct or indirect payments to directors, officers, general partners of
the issuer or their associates; to persons owning ten percent or more of any
class of equity securities of the issuer and to affiliates of the issuer: None.
(B) Direct or indirect payments to others: None.
(vi) Net offering proceeds to the issuer after deducting the total expenses
described in paragraph (3)(v):
$5,463,276
(vii) From the effective date of the Securities Act registration statement
to the ending date of the reporting period, the amount of net offering proceeds
to the issuer used for construction of plant, building and facilities; purchase
and installation of machinery and equipment; purchase of real estate;
acquisition of other business; repayment of indebtedness; working capital;
temporary investments (which should be specified); and any other purposes for
which at least five percent of the issuer's total offering proceeds or $100,000
(whichever is less) has been used:
Repayment of short-term bank loan on 5/05/98 $675,000
Addition to working capital on 5/06/98: $126,500
Purchase Water Jet Equipment $118,500
Acquisition of TJ Products 1/20/99 $1,600,000
Acquisition of Irathane Systems 3/31/99 $2,943,276
The Company was able to develop the capability of selling iron castings
through its representation of Ani Braken as described in the Company's Form
10-KSB filed March 29, 1999. The modest cost of obtaining this representation
permitted a portion of the Initial Public Offering proceeds to be used in the TJ
Products and Irathane Systems acquisitions. These acquisitions together provided
the Company with rubber mixing, molding and calendaring capability, enhanced its
product and process development and marketing capabilities and provided
satellite facilities and excess equipment to operate additional satellite
facilities. The acquisition of Irathane Systems also provided the Company with
the ability to supply a full range of urethane molded and lined products
consistent with its vertical expansion goals.
<PAGE>
(viii) If the use of proceeds in paragraph (vii) represents a material
change in the use of proceeds described in the prospectus.
No material changes in the use of proceeds described in the prospectus.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held its first Annual Meeting as a publicly held company on May
25, 1999. Proxies for the meeting were solicited by management pursuant to
Regulation 14A of the Exchange Act. All five of the Company's then serving
directors were reelected without contest. Specifically, Daniel O. Burkes,
Christopher M. Liesmaki, Paul A. Friesen, James D. MacKay and John R. Ryan Jr.
were elected to serve until the next annual meeting of shareholders.
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit 11 Statement Re: Computation of Earnings per Share.
Exhibit 27 Financial Data Schedule
(b) Reports on Forms 8-K.
A report on Form 8-KA was filed on April 2, 1999 regarding the acquisition
of TJ Products.
A report on Form 8-K was filed on April 12, 1999 regarding the acquisition
of Irathane Systems.
A report on Form 8-KA was filed on June 16, 1999 and July 9, 1999
regarding the acquisition of Irathane Systems.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INDUSTRIAL RUBBER PRODUCTS, INC.
(Registrant)
Date: August 16, 1999 /s/ John M. Kokotovich
---------------------------------
John M. Kokotovich
Chief Financial Officer
Industrial Rubber Products, Inc.
Exhibit 11 - Statement Re Computation of Earnings Per Share
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------
1999
----------
<S> <C>
Net income Per Share - basic:
Weighted average shares outstanding
during the period 4,183,945
----------
Net Income (Loss) $ (176,210)
----------
Net income (loss) per share - basic $ (.04)
==========
Net income per share - diluted: n/a
</TABLE>
Net income per share is computed based upon the weighted average number of
shares outstanding during the period. Stock options and warrants were
antidilutive for the period ending June 30, 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Industrial Rubber Products, Inc.'s Form 10-QSB for the quarterly period ended
June 30, 1999 and is qualified in its entirety by reference to such
consolidated statement.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-1-1999
<PERIOD-END> JUN-30-1999
<CASH> 693,339
<SECURITIES> 0
<RECEIVABLES> 3,650,476
<ALLOWANCES> 295,944
<INVENTORY> 1,602,081
<CURRENT-ASSETS> 6,259,890
<PP&E> 10,223,888
<DEPRECIATION> 1,735,154
<TOTAL-ASSETS> 16,087,780
<CURRENT-LIABILITIES> 9,201,907
<BONDS> 393,002
0
0
<COMMON> 4,194
<OTHER-SE> 6,488,677
<TOTAL-LIABILITY-AND-EQUITY> 16,087,780
<SALES> 4,322,763
<TOTAL-REVENUES> 4,322,763
<CGS> 3,090,825
<TOTAL-COSTS> 4,090,062
<OTHER-EXPENSES> 0
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<INCOME-CONTINUING> 50,156
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<NET-INCOME> 50,156
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
