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
June 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 August 4, 1995 the last practicable date,
was 2,523,261, Common Stock, $1.00 par value.
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<TABLE>
<CAPTION>
BALTEK CORPORATION UNAUDITED AUDITED
CONSOLIDATED BALANCE SHEETS 6/30/95 12/31/94
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<S> <C> <C>
ASSETS
Current Assets
Cash .............................................. $ 455,341 $ 1,696,215
Accounts receivable-net ........................... 5,169,031 4,919,172
Inventories ....................................... 11,179,615 9,403,216
Prepaid expenses other current assets ............. 1,974,253 1,450,682
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TOTAL CURRENT ASSETS .......................... 18,778,240 17,469,285
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Property, plant and equipment-net .................. 11,094,616 10,935,665
Timber and timberlands ............................. 5,733,742 5,509,051
Other assets ....................................... 651,879 627,288
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TOTAL ......................................... $36,258,477 $34,541,289
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable ..................................... $ 2,904,244 $ 1,716,563
Accounts payable .................................. 2,041,134 1,889,096
Income tax payable ................................ 0 624,469
Accrued expenses and other liabilities ............ 1,489,134 1,446,514
Current portion of long term debt ................. 24,178 33,558
Current portion of obligation under
capital lease .................................... 174,517 174,517
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TOTAL CURRENT LIABILITIES ..................... 6,633,207 5,884,717
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Obligation under capital lease ..................... 2,075,575 2,162,833
Long term debt ..................................... 581 7,319
Union employee termination benefits ................ 255,464 217,624
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TOTAL LIABILITIES ............................. 8,964,827 8,272,493
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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 ................................. 22,612,897 21,588,043
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TOTAL STOCKHOLDERS' EQUITY .................... 27,293,650 26,268,796
TOTAL ......................................... $36,258,477 $34,541,289
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Note A: Classification of inventories are as follows:
Raw Materials .............................. $ 2,989,785 $ 2,580,806
Work-in-process ............................ 3,676,183 3,582,410
Finished goods ............................. 4,513,647 3,240,000
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TOTAL ..................................... $11,179,615 $ 9,403,216
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</TABLE>
<PAGE>
BALTEK CORPORATION AND SUBSIDIARIES
UNAUDITED STATEMENT OF CONSOLIDATED INCOME
AND RETAINED EARNINGS
<TABLE>
<CAPTION>
FOR THE THREE MONTH FOR THE SIX MONTH
PERIOD ENDED JUNE 30, PERIOD ENDED JUNE 30,
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1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Net Sales ............................... $ 11,984,853 $ 10,788,597 $ 22,640,465 $ 19,801,117
Costs and expenses ...................... 10,884,559 9,789,438 20,649,169 18,426,935
------------ ------------ ------------ ------------
Income (loss) from operations ........... 1,100,294 999,159 1,991,296 1,374,182
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Other Income (Expense)
Interest expense ....................... (118,094) (120,601) (211,179) (239,655)
Foreign exchange gain (loss) ........... (149,941) 31,721 (119,347) (26,065)
Other .................................. 10,979 2,895 20,946 5,313
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Total Other Income (Expense) ............ (257,056) (85,985) (309,580) (260,407)
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Income (loss) before income taxes ....... 843,238 913,174 1,681,716 1,113,775
Income taxes ............................ 330,851 335,910 656,862 411,414
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NET INCOME (LOSS) ....................... $ 512,387 $ 577,264 $ 1,024,854 $ 702,361
Retained earnings beginning of the period 22,100,510 20,500,681 21,588,043 20,375,584
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Retained earnings end of the period ..... $ 22,612,897 $ 21,077,945 $ 22,612,897 $ 21,077,945
============ ============ ============ ============
Average shares outstanding .............. 2,523,261 2,523,261 2,523,261 2,523,261
============ ============ ============ ============
Net income per common share ............. $ 0.20 $ 0.23 $ 0.41 $ 0.28
============ ============ ============ ============
</TABLE>
<PAGE>
BALTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) .......................................... $ 512,387 $ 577,264 $ 1,024,854 $ 702,361
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ............................ 279,977 395,105 787,595 931,146
Foreign exchange loss (gain) ............................. 149,941 (31,721) 119,347 26,065
Decrease (increase) in accounts receivable ............... (337,696) (2,453) (254,099) (541,345)
Decrease (increase) in inventories ....................... (1,774,728) 385,537 (1,776,399) 623,517
Decrease (increase) in prepaid expenses
and other current assets ............................... (505,646) 19,658 (548,297) (343,935)
Decrease (increase) in other assets ...................... 3,177 2,401 7,445 5,184
Decrease (increase) in income taxes ...................... (359,961) 294,832 (653,239) 348,317
Increase (decrease) in accounts payable
and accrued expenses ................................... 722,921 711,090 200,807 1,564,529
Increase (decrease) in deferred taxes .................... (7,026) (9,522) (14,052) (19,045)
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Net cash provided (used) by operating activities ........... (1,316,654) 2,342,191 (1,106,038) 3,296,794
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions-net (including timber and
timberlands) ............................................. (546,383) (510,600) (1,171,237) (843,849)
Other ...................................................... 27,918 40,646 40,253 58,461
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Net cash used in investing activities ...................... (518,465) (469,954) (1,130,984) (785,388)
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</TABLE>
<PAGE>
BALTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes payable ..................... 1,524,558 (630,066) 1,195,521 (520,710)
Increase (decrease) in long term debt .................... (1,203) (17,907) (25,298) (37,781)
Principal payments under capital leases .................. (43,629) (36,936) (87,258) (73,871)
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Net cash from (used in) financing activities ............... 1,479,726 (684,909) 1,082,965 (632,362)
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Effect of exchange rate changes on cash .................... (111,131) 38,703 (86,817) (12,738)
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Net increase (decrease) in cash ............................ (466,524) 1,226,031 (1,240,874) 1,866,306
CASH AT BEGINNING OF THE PERIOD ............................ 921,865 1,159,072 1,696,215 518,797
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CASH AT THE END OF THE PERIOD .............................. $ 455,341 $ 2,385,103 $ 455,341 $ 2,385,103
=========== =========== =========== ===========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest .................................................. $ 75,129 $ 48,295 $ 125,839 $ 122,286
Income taxes paid (refund) ................................ $ 674,254 ($ 2,620) $ 1,289,348 ($ 990)
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital ratio of 2.83:1 at June 30, 1995 declined
slightly from the ratio of 2.97:1 at December 31, 1994 due to increased short
term debt required to sustain the increases in current assets. Current assets
(accounts receivable and inventory) increased due to improved sales volume
during the first six 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 11% and 14% during the three and six month periods
ended June 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, remained approximately the
same during the second quarter of 1995 as compared to the second quarter of
1994, but declined by 1.8% for the six month period ended June 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 half of 1995.
Foreign exchange losses increased in the three and six 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.
For the reasons discussed above, the Company realized a net income of
$512,387 ($0.20 per share) and $1,024,854 ($0.41 per share) for the three and
six month periods ended June 30, 1995, as compared to $577,264 ($0.23 per share)
and $702,361 ($0.28 per share) for the same periods in 1994.
<PAGE>
BALTEK CORPORATION AND SUBSIDIARIES
NOTE REGARDING UNAUDITED STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
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Information furnished in our Form 10-Q for the quarter June 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 second quarter of 1995.
<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.
BALTEK CORPORATION
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(Registrant)
s/Jacques Kohn
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Date: August 4, 1995 (Signature)
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s/Benson J. Zeikowitz
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Date: August 4, 1995 (Signature)
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 455,341
<SECURITIES> 0
<RECEIVABLES> 5,319,231
<ALLOWANCES> 150,200
<INVENTORY> 11,179,615
<CURRENT-ASSETS> 18,778,240
<PP&E> 27,199,095
<DEPRECIATION> 16,104,479
<TOTAL-ASSETS> 36,258,477
<CURRENT-LIABILITIES> 6,633,207
<BONDS> 0
<COMMON> 2,523,261
0
0
<OTHER-SE> 24,770,389
<TOTAL-LIABILITY-AND-EQUITY> 36,258,477
<SALES> 22,640,465
<TOTAL-REVENUES> 22,640,465
<CGS> 15,691,151
<TOTAL-COSTS> 20,649,169
<OTHER-EXPENSES> 309,580
<LOSS-PROVISION> 67,391
<INTEREST-EXPENSE> 211,179
<INCOME-PRETAX> 1,681,716
<INCOME-TAX> 656,862
<INCOME-CONTINUING> 1,024,854
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,024,854
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.41
</TABLE>
