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
March 31, 1996
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 May 6, 1996 the last practicable date,
was 2,523,261, Common Stock, $1.00 par value.
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<CAPTION>
BALTEK CORPORATION
CONSOLIDATED BALANCE SHEETS
UNAUDITED AUDITED
3/31/96 12/31/95
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<S> <C> <C>
ASSETS
Current Assets
Cash .............................................. $ 1,023,489 $ 841,056
Accounts receivable-net ........................... 5,236,814 5,350,211
Inventories ....................................... 12,387,289 12,875,203
Prepaid expenses other current assets ............. 1,845,598 1,662,498
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TOTAL CURRENT ASSETS .......................... 20,493,190 20,728,968
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Property, plant and equipment-net .................. 10,966,037 11,079,132
Timber and timberlands ............................. 6,545,221 6,338,152
Other assets ....................................... 668,991 670,244
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TOTAL ......................................... $38,673,440 $38,816,496
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable ..................................... $ 4,151,319 $ 4,424,783
Accounts payable .................................. 2,267,593 1,910,642
Accrued expenses and other liabilities ............ 1,073,325 1,746,526
Current portion of long term debt ................. 80,000 17,558
Current portion of obligation under
capital lease .................................... 188,065 188,065
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TOTAL CURRENT LIABILITIES ..................... 7,760,302 8,287,574
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Obligation under capital lease ..................... 1,927,752 1,974,768
Long term debt ..................................... 313,333 17,910
Union employee termination benefits ................ 355,338 305,195
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TOTAL LIABILITIES ............................. 10,356,725 10,585,447
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(Continued)
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<CAPTION>
BALTEK CORPORATION
CONSOLIDATED BALANCE SHEETS -- Continued
UNAUDITED AUDITED
3/31/96 12/31/95
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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 ................................. 23,635,962 23,550,296
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TOTAL STOCKHOLDERS' EQUITY .................... 28,316,715 28,231,049
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TOTAL ......................................... $38,673,440 $38,816,496
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Note A: Classification of inventories are as follows:
Raw Materials .............................. 3,668,216 3,913,332
Work-in-process ............................ 4,529,186 4,075,895
Finished goods ............................. 4,189,887 4,885,976
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TOTAL ..................................... $12,387,289 $12,875,203
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BALTEK CORPORATION AND SUBSIDIARIES
UNAUDITED STATEMENT OF CONSOLIDATED INCOME
AND RETAINED EARNINGS
FOR THE THREE MONTH
PERIOD ENDED
MARCH 31,
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1996 1995
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<S> <C> <C>
Net Sales .................................... $ 11,712,255 $ 10,655,612
Costs and expenses ........................... 11,297,285 9,764,610
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Income from operations ...................... 414,970 891,002
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Other Income (Expense)
Interest expense ............................ (177,716) (93,085)
Foreign exchange gain (loss) ................ (131,707) 30,594
Other ....................................... 5,515 9,967
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Total Other Income (Expense) ................. (303,908) (52,524)
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Income before income taxes .................. 111,062 838,478
Income taxes ................................. 25,395 326,011
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NET INCOME ................................... $ 85,667 $ 512,467
Retained earnings beginning of the period .... 23,550,295 21,588,043
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Retained earnings end of the period .......... $ 23,635,962 $ 22,100,510
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Average shares outstanding ................... 2,523,261 2,523,261
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Net income per common share .................. $ 0.03 $ 0.20
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BALTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS
ENDED MARCH 31,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) .............................. $ 85,667 $ 512,467
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ................ 497,264 507,618
Foreign exchange loss (gain) ................. 131,707 (30,594)
Decrease (increase) in accounts receivable ... 113,452 83,597
Decrease (increase) in inventories ........... 487,914 (1,671)
Decrease (increase) in prepaid expenses
and other current assets ................... (275,484) (42,651)
Decrease (increase) in other assets .......... 7,024 4,268
Decrease (increase) in income taxes .......... 21,992 (293,278)
Increase (decrease) in accounts payable
and accrued expenses ....................... (245,103) (522,114)
Increase (decrease) in deferred taxes ........ (5,762) (7,026)
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Net cash provided by operating activities ...... 818,670 210,616
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions-net (including timber and
timberlands) ................................. (591,238) (624,854)
Other .......................................... 51,663 12,335
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Net cash used in investing activities .......... (539,575) (612,519)
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(Continued)
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<CAPTION>
BALTEK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS -- Continued
FOR THE THREE MONTHS
ENDED MARCH 31,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes payable ......... (308,946) (329,037)
Increase (decrease) in long term debt ........ 393,333 (24,095)
Principal payments under capital leases ...... (47,016) (43,629)
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Net cash from (used in) financing activities ... 37,372 (396,761)
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Effect of exchange rate changes on cash ........ (134,033) 24,313
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Net increase (decrease) in cash ................ 182,433 (774,351)
CASH AT BEGINNING OF THE PERIOD ................ 841,056 1,696,215
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CASH AT THE END OF THE PERIOD .................. $ 1,023,489 $ 921,864
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Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest ...................................... $ 131,481 $ 50,710
Income taxes paid ............................. $ 10,026 $ 615,094
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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 2.64:1 at March 31, 1996,
increased slightly from the ratio of 2.50:1 at December 31, 1995. Inventories
decreased due to improved sales volume during the first three months of 1996.
Long term debt was incurred for the purchase of new equipment. 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 10% during the three month period ended March 31, 1996,
as compared to the same period in 1995. 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, increased slightly in the
first quarter of 1996 as compared to the first quarter of 1995, due mostly to a
decline in the selling price of the Company's shrimp products. No unusual
expenses were incurred in the first quarter of 1996.
Interest expense increased due to increased borrowings for working
capital and equipment acquisitions. Foreign exchange losses were $131,707 in the
three month period of 1996, as compared to a gain of $30,594 in the same period
of 1995. Foreign exchange gains and losses are caused by the relationship of the
U. S. Dollar to the foreign currencies in the countries where the company has
operations, and 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
$85,667 ($0.03 per share) for the three month period ended March 31, 1996, as
compared to $512,467 ($0.20 per share) for the same period in 1995.
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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 March 31, 1996 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 first quarter of 1996.
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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
Date: May 6, 1996 -----------------------
(Signature)
s/Benson J. Zeikowitz
Date: May 6, 1996 ------------------------
(Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,023,489
<SECURITIES> 0
<RECEIVABLES> 5,348,887
<ALLOWANCES> 112,073
<INVENTORY> 12,387,289
<CURRENT-ASSETS> 20,493,190
<PP&E> 27,989,102
<DEPRECIATION> 17,023,065
<TOTAL-ASSETS> 38,673,440
<CURRENT-LIABILITIES> 7,760,302
<BONDS> 0
0
0
<COMMON> 2,523,261
<OTHER-SE> 25,793,454
<TOTAL-LIABILITY-AND-EQUITY> 38,673,440
<SALES> 11,712,255
<TOTAL-REVENUES> 11,712,255
<CGS> 8,910,493
<TOTAL-COSTS> 11,297,285
<OTHER-EXPENSES> 303,908
<LOSS-PROVISION> 14,479
<INTEREST-EXPENSE> 177,716
<INCOME-PRETAX> 111,062
<INCOME-TAX> 25,395
<INCOME-CONTINUING> 85,667
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 85,667
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
