SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission file number 2-44764
September 30, 1995
BALTEK CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 13-2646117
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Fairway Court, P.O. Box 195, Northvale, New Jersey 07647
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 201-767-1400
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Indicated by check mark whether the registrant (1) has filed all
annual, quarterly and other reports required to be filed with the Commission and
(2) has been subject to the filing requirements for at least the past 90 days.
Yes [ X ] No [ ]
The number of shares outstanding as of November 9, 1995 the last practicable
date, was 2,523,261, Common Stock, $1.00 par value.
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BALTEK CORPORATION
CONSOLIDATED BALANCE SHEETS
UNAUDITED AUDITED
9/30/95 12/31/94
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<S> <C> <C>
ASSETS
Current Assets
Cash ........................................... $ 1,220,136 $ 1,696,215
Accounts receivable-net ........................ 4,204,640 4,919,172
Inventories .................................... 12,688,352 9,403,216
Prepaid expenses other current assets .......... 2,060,955 1,450,682
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TOTAL CURRENT ASSETS ....................... 20,174,083 17,469,285
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Property, plant and equipment-net ............... 11,081,768 10,935,665
Timber and timberlands .......................... 5,862,671 5,509,051
Other assets .................................... 625,645 627,288
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TOTAL ...................................... $37,744,167 $34,541,289
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable .................................. $ 3,726,288 $ 1,716,563
Accounts payable ............................... 2,306,759 1,889,096
Income tax payable ............................. -- 624,469
Accrued expenses and other liabilities ......... 1,659,948 1,446,514
Current portion of long term debt .............. 581 33,558
Current portion of obligation under
capital lease ................................. 174,517 174,517
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TOTAL CURRENT LIABILITIES .................. 7,868,093 5,884,717
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Obligation under capital lease .................. 2,031,946 2,162,833
Long term debt .................................. 7,319
Union employee termination benefits ............. 292,882 217,624
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TOTAL LIABILITIES .......................... 10,192,921 8,272,493
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<CAPTION>
BALTEK CORPORATION
CONSOLIDATED BALANCE SHEETS (Continued)
UNAUDITED AUDITED
9/30/95 12/31/94
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<S> <C> <C>
Stockholders' Equity:
Preferred stock $100 par; 5,000,000 shares
authorized and unissued ....................... -- --
Common stock $1.00 par; 10,000,000 shares
authorized, 2,523,261 shares issued and
outstanding ................................... 2,523,261 2,523,261
Additional paid-in-capital ..................... 2,157,492 2,157,492
Retained earnings .............................. 22,870,493 21,588,043
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TOTAL STOCKHOLDERS' EQUITY ................. 27,551,246 26,268,796
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TOTAL ...................................... $37,744,167 $34,541,289
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Note A: Classification of inventories
are as follows:
Raw Materials ........................... $ 3,667,850 $ 2,580,806
Work-in-process ......................... 4,013,385 3,582,410
Finished goods .......................... 5,007,117 3,240,000
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TOTAL .................................. $12,688,352 $ 9,403,216
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BALTEK CORPORATION AND SUBSIDIARIES
UNAUDITED STATEMENT OF CONSOLIDATED INCOME
AND RETAINED EARNINGS
FOR THE THREE MONTH FOR THE NINE MONTH
PERIOD ENDED SEPT. 30 PERIOD ENDED SEPT. 30
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1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Net Sales ............................... $ 11,042,217 $ 8,910,225 $ 33,682,682 $ 28,711,342
Costs and expenses ...................... 10,430,040 8,714,818 31,079,209 27,141,753
Special charges (1) ..................... 0 323,977 0 323,977
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Income (loss) from operations ........... 612,177 (128,570) 2,603,473 1,245,612
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Other Income (Expense)
Interest expense ....................... (165,704) (95,385) (376,883) (335,040)
Foreign exchange gain (loss) ........... (47,409) 16,244 (166,756) (9,821)
Other .................................. 19,126 15,413 40,072 20,726
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Total Other Income (Expense) ............ (193,987) (63,728) (503,567) (324,135)
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Income (loss) before income taxes ....... 418,190 (192,298) 2,099,906 921,477
Income taxes ............................ 160,594 (68,844) 817,456 342,570
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NET INCOME (LOSS) ....................... $ 257,596 $ (123,454) $ 1,282,450 $ 578,907
Retained earnings beginning of the period 22,612,897 21,077,945 21,588,043 20,375,584
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Retained earnings end of the period ..... $ 22,870,493 $ 20,954,491 $ 22,870,493 $ 20,954,491
============ ============ ============ ============
Average shares outstanding .............. 2,523,261 2,523,261 2,523,261 2,523,261
============ ============ ============ ============
Net income per common share ............. $ 0.10 ($ 0.05) $ 0.51 $ 0.23
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(1) Special charges in the third quarter of 1994 was for personnel changes
designed to reduce costs.
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<CAPTION>
BALTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPT 30, ENDED SEPT 30,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) .......................... $ 257,596 ($ 123,454) $ 1,282,450 $ 578,907
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ............ 706,707 489,228 1,494,302 1,420,374
Foreign exchange loss (gain) ............. 47,409 (16,244) 166,756 9,821
Decrease (increase) in accounts receivable 966,154 533,019 712,055 (8,326)
Decrease (increase) in inventories ....... (1,508,737) 192,345 (3,285,136) 815,862
Decrease (increase) in prepaid expenses
and other current assets ............... (98,348) (152,188) (646,645) (496,123)
Decrease (increase) in other assets ...... 15,440 2,487 22,885 7,671
Decrease (increase) in income taxes ...... 8,969 (47,302) (644,270) 301,015
Increase (decrease) in accounts payable
and accrued expenses ................... 437,657 (694,772) 638,464 869,757
Increase (decrease) in deferred taxes .... (7,026) (9,522) (21,078) (28,567)
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Net cash provided by operating activities .. 825,820 173,597 (280,218) 3,470,391
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions-net (including timber and
timberlands) ............................. (822,788) (520,288) (1,994,025) (1,364,137)
Other ...................................... 58,229 (13,963) 98,482 44,498
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Net cash used in investing activities ...... (764,559) (534,251) (1,895,543) (1,319,639)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes payable ..... 797,833 (1,279,185) 1,993,354 (1,799,895)
Increase (decrease) in long term debt .... (195) (2,427) (25,493) (40,208)
Principal payments under capital lease ... (43,629) (36,936) (130,887) (110,807)
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Net cash from (used in) financing activities 754,009 (1,318,548) 1,836,974 (1,950,910)
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Effect of exchange rate changes on cash .... (50,475) 20,782 (137,292) 8,044
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Net increase (decrease) in cash ............ 764,795 (1,658,420) (476,079) 207,886
CASH AT BEGINNING OF THE PERIOD ............ 455,341 2,385,103 1,696,215 518,797
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CASH AT THE END OF THE PERIOD .............. $ 1,220,136 $ 726,683 $ 1,220,136 $ 726,683
=========== =========== =========== ===========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest .................................. $ 168,846 $ 171,004 $ 294,685 $ 244,995
Income taxes paid ......................... $ 34,093 $ 35,736 $ 1,323,441 $ 37,366
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital ratio of 2.56:1 at September 30, 1995
declined slightly from the ratio of 2.97:1 at December 31, 1994 due to increased
short term debt required for the increases in current assets. Inventory
increased due to improved sales volume during the first nine months of 1995.
Unused lines of bank credit and the Company's working capital are considered by
management, to be sufficient to support operations and fixed asset acquisitions
for the immediate future.
RESULTS OF OPERATIONS
Sales increased 24% and 17% during the three and nine month periods
ended September 30, 1995 as compared to the same periods in 1994. Sales of all
the Company's balsa and shrimp products increased during the period. The Company
is unable to forecast future sales trends due to the changing commodity pricing
of its shrimp product and the effect of economical pressures on the pleasure
boating industry, the largest user of the Company's balsa products.
Costs and expenses as a percentage of sales declined by 3.4% and 2.2%
for the three and nine month period ended September 30, 1995 as compared with
the same period in 1994. The decline was due to a more complete utilization of
fixed costs as a result of increased sales. No unusual expenses were incurred in
the first nine months of 1995.
Foreign exchange losses increased in the three and nine month
periods of 1995, and are caused by the relationship of the U. S. Dollar to the
foreign currencies in the countries where the company has operations. The gains
or losses arise when translating foreign currency balance sheets into U. S.
Dollars for the purpose of presenting consolidated financial statements.
Management is unable to forecast the impact of translation gains or losses on
future periods due to the unpredictability of foreign exchange rates.
On September 6th, 1995 the Company entered into an agreement with Airex
AG of Sins, Switzerland to become the sole North American source of Airex and
AirLite/Herex structural PVC foam products effective immediately. The Company
does not expect sales or income to be generated from these new products until
1996. The addition of these products should solidify our leadership in the
structural core market and give us a growth opportunity in the future.
For the reasons discussed above, the Company realized a net income of
$257,596 ($0.10 per share) and $1,282,450 ($0.51 per share) for the three and
nine month periods ended September 30, 1995, as compared to a net loss of
($123,454) ($.05 per share) during the third quarter of 1994 and an income of
$578,907 ($0.23 per share) for the nine months ended September 30, 1994.
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BALTEK CORPORATION AND SUBSIDIARIES
NOTE REGARDING UNAUDITED STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
Information furnished in our Form 10-Q for the quarter September 30, 1995
reflects all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. The adjustments that were
made consisted of only normal recurring accruals.
********************************
No Form 8-K was filed in the third quarter of 1995.
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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.
BALTEK CORPORATION
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(Registrant)
s/Jacques Kohn
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Date: November 9, 1995 (Signature)
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s/Benson J. Zeikowitz
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Date: November 9, 1995 (Signature)
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,220,136
<SECURITIES> 0
<RECEIVABLES> 4,361,272
<ALLOWANCES> 156,632
<INVENTORY> 12,688,352
<CURRENT-ASSETS> 20,174,083
<PP&E> 27,555,025
<DEPRECIATION> 16,473,257
<TOTAL-ASSETS> 37,744,167
<CURRENT-LIABILITIES> 7,868,093
<BONDS> 0
<COMMON> 2,523,261
0
0
<OTHER-SE> 25,027,985
<TOTAL-LIABILITY-AND-EQUITY> 37,744,167
<SALES> 33,682,682
<TOTAL-REVENUES> 33,682,682
<CGS> 23,842,088
<TOTAL-COSTS> 31,079,209
<OTHER-EXPENSES> 503,567
<LOSS-PROVISION> 79,031
<INTEREST-EXPENSE> 376,883
<INCOME-PRETAX> 2,099,906
<INCOME-TAX> 817,456
<INCOME-CONTINUING> 1,282,450
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,282,450
<EPS-PRIMARY> 0.51
<EPS-DILUTED> 0.51
</TABLE>
