10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 10-Q

_________________

x     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: April 30, 2014

or

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

5400 Rio Grande Avenue, Jacksonville, FL  32254

(Address of Principal Executive Offices) (Zip Code)

904-358-3812

(Registrant’s telephone number, including area code)

N/A
(Former name or 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  [X]     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  [X]

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 May 31, 2014.

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INTERNATIONAL BALER CORPORATION

TABLE OF CONTENTS

			PAGE
PART I.	FINANCIAL INFORMATION		3
	ITEM 1.	FINANCIAL STATEMENTS
		Balance Sheets as of April 30, 2014, (unaudited) and October 31, 2013	3
		Statements of Income for the three months and six months ended April 30, 2014 and 2013 (unaudited)	4
		Statement of Changes in Stockholders’ Equity for the six months ended April 30, 2014 (unaudited)	5
		Statements of Cash Flows for the six months ended April 30, 2014 and 2013 (unaudited).	6
		Notes to Financial Statements (unaudited)	7
	ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 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		12
	ITEM 1.	LEGAL PROCEEDINGS	12
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	13
	ITEM 5.	OTHER INFORMATION	13
	ITEM 6.	EXHIBITS	13
SIGNATURES			14
CERTIFICATIONS			15

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INTERNATIONAL BALER CORPORATION
BALANCE SHEETS
		April 30, 2014			October 31, 2013
ASSETS		Unaudited
Current assets:
Cash and cash equivalents	$	1,453,684		$	1,877,256
Accounts receivable, net of allowance for doubtful accounts
of $45,764 at April 30, 2014 and October 31, 2013		2,689,096			2,466,887
Inventories		7,009,550			5,960,365
Prepaid expense and other current assets		72,616			98,792
Deferred income taxes		71,128			71,128
Total current assets		11,296,074			10,474,428
Property, plant and equipment, at cost:		3,173,398			3,096,560
Less: accumulated depreciation		2,044,631			1,972,631
Net property, plant and equipment		1,128,767			1,123,929
Other assets:
Other assets		1,256			1,256
Deferred income taxes		8,495			8,495
Total other assets		9,751			9,751
TOTAL ASSETS	$	12,434,592		$	11,608,108
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving promissory note	$	1,245,020		$	1,648,649
Accounts payable		1,371,465			1,439,777
Accrued liabilities		145,463			659,096
Customer deposits		2,401,886			677,954
Total current liabilities		5,163,834			4,425,476
Total liabilities		5,163,834			4,425,476
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 April 30, 2014 and October 31, 2013		64,299			64,299
Additional paid-in capital		6,419,687			6,419,687
Retained earnings		1,468,182			1,380,056
		7,952,168			7,864,042
Less:  Treasury stock, 1,245,980 shares
at April 30, 2014 and October 31, 2013, at cost		(681,410	)		(681,410	)
Total stockholders' equity		7,270,758			7,182,632
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	12,434,592		$	11,608,108
See accompanying notes to financial statements.

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INTERNATIONAL BALER CORPORATION
STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED APRIL 30, 2014 AND 2013
UNAUDITED
	Three Months					Six Months
		2014			2013		2014			2013
Net sales:
Equipment	$	2,194,768		$	2,305,804	$	5,498,422		$	5,802,431
Parts and service		589,789			625,783		1,233,702			1,025,022
Total net sales		2,784,557			2,931,587		6,732,124			6,827,453
Cost of sales		2,386,342			2,440,762		5,508,390			5,618,051
Gross profit		398,215			490,825		1,223,734			1,209,402
Operating expense:
Selling expense		245,027			246,198		510,058			499,019
Administrative expense		292,255			226,541		561,763			498,888
Total operating expense		537,282			472,739		1,071,821			997,907
Operating income (loss)		(139,067	)		18,086		151,913			211,495
Other income (expense):
Interest income		4,900			140		4,900			570
Interest expense		(7,220	)		—		(17,687	)		(3,604	)
Total other income  (expense)		(2,320	)		140		(12,787	)		(3,034	)
Income (loss) before income taxes		(141,387	)		18,226		139,126			208,461
Income tax provision (benefit)		(49,000	)		5,500		51,000			79,500
Net income (loss)	$	(92,387	)	$	12,726	$	88,126		$	128,961
Income (loss) per share, basic and diluted	$	(0.02	)	$	0.00	$	0.02		$	0.02
Weighted average number of shares outstanding		5,183,895			5,183,895		5,183,895			5,183,895
See accompanying notes to financial statements.

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INTERNATIONAL BALER CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED APRIL 30, 2014
UNAUDITED
	Common Stock							Treasury Stock
	NUMBER
	OF SHARES		PAR		ADDITIONAL PAID-IN		RETAINED	NUMBER OF					TOTAL STOCKHOLDERS'
	ISSUED		VALUE		CAPITAL		EARNINGS	SHARES		COST			EQUITY
Balance at October 31, 2013	6,429,875	$	64,299	$	6,419,687	$	1,380,056	1,245,980	$	(681,410	)	$	7,182,632
Net Income	—		—		—		88,126	—		—			88,126
Balance at April 30, 2014	6,429,875	$	64,299	$	6,419,687	$	1,468,182	1,245,980	$	(681,410	)	$	7,270,758
See accompanying notes to financial statements.

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INTERNATIONAL BALER CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 2014 AND 2013
UNAUDITED
		2014			2013
Cash flow from operating activities:
Net income	$	88,126		$	128,961
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization		72,000			71,104
Changes in operating assets and liabilities:
Accounts receivable		(222,209	)		545,817
Inventories		(1,049,185	)		(263,462	)
Prepaid expenses and other assets		26,176			18,097
Accounts payable		(68,312	)		155,022
Accrued liabilities and deferred compensation		(513,633	)		(184,237	)
Customer deposits		1,723,932			(572,451	)
Net cash (used in) provided by operating activities		56,895			(101,149	)
Cash flows from investing activities:
Proceeds from notes receivable from former Director		—			3,673
Purchase of property and equipment		(76,838	)		(103,962	)
Net cash used in investing activities		(76,838	)		(100,289	)
Cash flows from financing activities
Payments on revolving prommisory note		(403,629	)		—
Net cash used in financing activities		(403,629	)		—
Net increase (decrease) in cash and cash equivalents		(423,572	)		(201,438	)
Cash and cash equivalents at beginning of period		1,877,256			1,719,140
Cash and cash equivalents at end of period	$	1,453,684		$	1,517,702
Supplemental disclosure of cash flow information:
Cash paid during period for:
Interest	$	17,687		$	—
Income taxes		322,713			—
See accompanying notes to financial statements.

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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 six-month period ended April 30, 2014 are not necessarily indicative of the results that may be expected for the year ending October 31, 2014. The accompanying balance sheet as of October 31, 2013 was derived from the audited financial statements as of October 31, 2013.

            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.

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(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 installations and start-ups and 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 six-month period ended April 30:

		2014			2013
Beginning balance	$	60,000		$	60,000
Warranty service provided		(80,805	)		(91,506	)
New product warranties		84,000			90,000
Changes to pre-existing warranty accruals		(3,195	)		1,506
Ending balance	$	60,000		$	60,000

(e) Fair Value of Financial Instruments:

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.

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 50.8% 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., also a competitor of the Company. These baler companies operate independent of each other.  The Company had no equipment sales to, or purchases from, these companies for the six months ended April 30, 2014 or in fiscal year ended October 31, 2013.

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5.              Inventories:

  Inventories consisted of the following:

		April 30, 2014		October 31, 2013
Raw materials	$	1,784,846	$	1,796,661
Work in process		3,327,544		3,964,544
Finished goods		1,897,160		199,160
	$	7,009,550	$	5,960,365

6.              Debt:

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana that was entered into on January 7, 2013.  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 2.24%. The line of credit is secured by all assets of the Company and has a term of two years.  The line of credit had an outstanding balance of $1,245,020 at April 30, 2014 and $1,648,649 at October 31, 2013.

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, the valuation allowance as of April 30, 2014 and at October 31, 2013 is $0.  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 April 30, 2014 and October 31, 2013, net deferred tax assets were $79,623.

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 injured in a workplace accident while an employee of the Company.  The accident occurred in September 2008. The Plaintiff has demanded $2,500,000 to settle this claim.  The Company intends to vigorously defend this case and has contacted its liability insurance carrier to request defense and indemnification of any losses incurred in connection with this lawsuit. A motion to dismiss the Complaint was granted without prejudice in January 2012, allowing the Plaintiff the ability to file an amended Complaint and no further action has been taken by the Plaintiff.

While the outcome of this lawsuit is uncertain, based upon information currently available, the Company believes it is highly unlikely that the results of this claim against the Company will have a material adverse effect on the Company’s financial position, results of operations or cash flows.  The Company has accrued the amount of its insurance deductible in relation to this lawsuit.

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On December 26, 2013 the Company was served with a civil action filed by Georgetown Paper Stock of Rockville, Inc. for breach of warranties.  The Plaintiff has demanded $338,248 plus interest and costs to settle this claim.  The Company intends to defend this lawsuit and file a counterclaim against the plaintiff for $40,916 along with reimbursement of expense and lost profits. 

While the outcome of this lawsuit is uncertain, based upon the information currently available, the Company believes it is highly unlikely that the results of this claim against the Company will have a material adverse effect on the Company’s financial position, results of operations and cash flows.

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, 2013, 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 second quarter ended April 30, 2014, the Company had net sales of $2,784,557, compared to net sales of $2,931,587 in the second quarter of fiscal 2013, a decrease of 5.0%. The decrease in sales was the result of the timing of shipments in the Company’s open order backlog.  The Company had no shipments of synthetic rubber balers in the second quarter of 2014 and in the second quarter of fiscal 2013.

The Company had a net loss of $92,387 in the second quarter of fiscal 2014, compared to net income of $12,726 in the second quarter of 2013.  The lower net income was the result of the lower level of shipments in the second quarter of the current fiscal year and higher administrative costs for directors fees and legal fees. 

Results of Operations:  Six month comparison

The Company had net sales of $6,732,124 in the first six months of fiscal 2014, compared to net sales of $6,827,453 in the same period of fiscal 2013, a decrease of 1.4%.  The decrease in sales was the result of lower shipments of synthetic rubber balers and closed door balers in the first six months of 2014. 

The Company had a net income of $88,126 in the first six months of 2014 compared to net income of $128,961 in the first half of 2013. Gross profit and gross profit margins were higher in the first half of 2014.  Selling and administrative expenses were also higher in the first half of 2014.

The sales order backlog was $14,800,000 at April 30, 2014 and $9,500,000 at April 30, 2013.  The backlog in 2014 included forty-six balers and conveyors at an average price of $321,000 while the backlog in 2013 included forty-four balers and conveyors at an average price of $216,000.

Financial Condition and Liquidity:

Net working capital at April 30, 2014 was $6,132,240 as compared to $6,048,952 at October 31, 2013. The Company currently believes that it will have sufficient cash flow to be able to fund operating activities for the next twelve months.

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Average days sales outstanding (DSO) in the first six months of fiscal 2014 were 79.0 days, as compared to 32.7 days in the first six months of fiscal 2013. The increase in Days Sales Outstanding in the first six months of fiscal 2014 was the result of a delayed payment due to the customer’s requirement of an additional electrical panel on the conveyors purchased by the Company.  The Company is confident that this situation will be resolved shortly.  DSO is calculated by dividing the total of the month-end net accounts receivable balances for the period by six, and dividing that result by the average day’s sales for the period (period sales ÷ 181).

During the six months ended April 30, 2014 and 2013, the Company made additions to plant and equipment of $76,838 and $103,962, respectively.

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana that was entered into on January 7, 2013.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 2.24%.  The line of credit is secured by all assets of the Company and has a term of two years.

The line of credit had an outstanding balance of $1,245,020 at April 30, 2014 and $1,648,649 at October 31, 2013.

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.

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.

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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 April 30, 2014.  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 April 30, 2014  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 injured in a workplace accident while an employee of the Company.  The accident occurred in September 2008. The Plaintiff has demanded $2,500,000 to settle this claim.  The Company intends to vigorously defend this case and has contacted its liability insurance carrier to request defense and indemnification of any losses incurred in connection with this lawsuit.  A motion to dismiss the Complaint was granted without prejudice in January 2012, allowing the Plaintiff the ability to file an amended Complaint and no further action has been taken by the Plaintiff.  In May 2013, the Company deposed the wife of the former employee in an effort to show this case lacks sufficient merit and file a motion for summary judgement.

In order for the Plaintiff to prevail and to circumvent Workers Compensation Immunity, the Plaintiff is required to prove that the Company knew with “virtual certainty” that the worker would be seriously injured or killed.  The elements proving this are very difficult to sustain and often courts rule in favor of employers on this issue.

On December 26, 2013 the Company was served with a civil action filed by Georgetown Paper Stock of Rockville, Inc. for breach of warranties.  The Plaintiff has demanded $338,248 plus interest and costs to settle this claim.  The Company intends to defend this lawsuit and file a counterclaim against the plaintiff for $40,916 along with reimbursement of expenses and lost profits. 

While the outcome of this lawsuit is uncertain, based upon information currently available, the Company believes it is highly unlikely that the results of this claim against the Company will have a material adverse effect on the Company’s financial apposition, results of operations and cash flows.

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ITEM 4.            SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

(a) The annual meeting of stockholders of the Company was held on April 21, 2014.

(b) The first item voted on was the election of Directors.  Leland E. Boren, Matthew M. Price and Martha R. Songer were elected as Class I Directors of the Company whose terms will expire in three (3) years at the annual meeting of stockholders to be held in 2017.  The results of the voting were as follows:  3,895,252 votes for Leland E. Boren and 22,831 withheld, 3,913,083 for Matthew M. Price and 5,000 withheld, and 3,895,278 for Martha R. Songer and 22,805 withheld.

(c) The next item of business was the proposal to ratify the appointment of The GriggsGroup, CPAs, the independent registered public accounting firm of the Company, for the fiscal year ending October 31, 2014.  The results of the voting were as follows:

                                          4,840,384              Votes for the resolution,

                                                    524              votes against, and

                                                 2,762              votes abstained.

A majority of the votes cast at the meeting have voted for the resolution, the resolution was duly passed.

No other matters were voted on at the meeting.

ITEM 5.            OTHER INFORMATION

None.

ITEM 6.            EXHIBITS

              The following exhibits are submitted herewith:

Exhibit	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.

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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.

Dated: June 13, 2014

                                                                      INTERNATIONAL BALER CORPORATION

BY: /s/D. Roger Griffin 

D. Roger Griffin

Chief Executive Officer

BY: /s/William E. Nielsen 

William E. Nielsen

Chief Financial Officer

- 14 -

EX-31.1

Exhibit 31.1

I, D. Roger Griffin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended April 30, 2014 of International Baler Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such   internal control over financial reporting to be designed under our  supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and

5. The registrants certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: June 13, 2014	/s/D. Roger Griffin
	D. Roger Griffin
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, William E. Nielsen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended April 30, 2014 of International   Baler Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a  material fact or omit to state a material fact necessary to make the statements  made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial  condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our  supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and

5. The registrants certifying officers and I have disclosed, based on our most recent evaluation of internal control   over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of               directors (or persons performing the equivalent functions):

(c) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(d) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: June 13, 2014	/s/William E. Nielsen
	William E. Nielsen
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 I hereby certify that:

I have reviewed the Quarterly Report of International Baler Corp. on Form 10-Q for the quarter ended April 30, 2014 (the “Report”);

To the best of my knowledge, the Report (i) fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (ii) the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of International Baler Corporation during the period covered by this Report.

Dated: June 13, 2014	/s/D. Roger Griffin
	D. Roger Griffin
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 I hereby certify that:

I have reviewed the Quarterly Report of International Baler Corp. on Form 10-Q for the quarter ended April 30, 2014 (the “Report”);

To the best of my knowledge, the Report (i) fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (ii) the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of International Baler Corporation during the period covered by this Report.

Dated: June 13, 2014	/s/William E. Nielsen
	William E. Nielsen
	Chief Financial Officer

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Summary of Significant Accounting Policies

6 Months Ended

Apr. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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.

(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 installations and start-ups and 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 six-month period ended April 30:

		2014			2013
Beginning balance	$	60,000		$	60,000
Warranty service provided		(80,805	)		(91,506	)
New product warranties		84,000			90,000
Changes to pre-existing warranty accruals		(3,195	)		1,506
Ending balance	$	60,000		$	60,000

(e) Fair Value of Financial Instruments:

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.

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Basis of Presentation

6 Months Ended

Apr. 30, 2014

Accounting Policies [Abstract]

Basis of Presentation

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 six-month period ended April 30, 2014 are not necessarily indicative of the results that may be expected for the year ending October 31, 2014. The accompanying balance sheet as of October 31, 2013 was derived from the audited financial statements as of October 31, 2013.

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Balance Sheets (USD $)	Apr. 30, 2014	Oct. 31, 2013
Current assets:
Cash and cash equivalents	$ 1,453,684	$ 1,877,256
Accounts receivable, net of allowance for doubtful accounts of $45,764 at April 30, 2014 and October 31, 2013	2,689,096	2,466,887
Inventories	7,009,550	5,960,365
Prepaid expense and other current assets	72,616	98,792
Deferred income taxes	71,128	71,128
Total current assets	11,296,074	10,474,428
Property, plant and equipment, at cost:	3,173,398	3,096,560
Less: accumulated depreciation	2,044,631	1,972,631
Net property, plant and equipment	1,128,767	1,123,929
Other assets:
Other assets	1,256	1,256
Deferred income taxes	8,495	8,495
Total other assets	9,751	9,751
TOTAL ASSETS	12,434,592	11,608,108
Current liabilities:
Revolving promissory note	1,245,020	1,648,649
Accounts payable	1,371,465	1,439,777
Accrued liabilities	145,463	659,096
Customer deposits	2,401,886	677,954
Total current liabilities	5,163,834	4,425,476
Total liabilities	5,163,834	4,425,476
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 April 30, 2014 and October 31, 2013	64,299	64,299
Additional paid-in capital	6,419,687	6,419,687
Retained earnings	1,468,182	1,380,056
Total stockholders' equity before Treasury stock	7,952,168	7,864,042
Less: Treasury stock, 1,245,980 shares at April 30, 2014 and October 31, 2013, at cost	(681,410)	(681,410)
Total stockholders' equity	7,270,758	7,182,632
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 12,434,592	$ 11,608,108

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Statements of Cash Flows (USD $)	6 Months Ended
	Apr. 30, 2014	Apr. 30, 2013
Cash flow from operating activities:
Net income	$ 88,126	$ 128,961
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	72,000	71,104
Changes in operating assets and liabilities:
Accounts receivable	(222,209)	545,817
Inventories	(1,049,185)	(263,462)
Prepaid expenses and other assets	26,176	18,097
Accounts payable	(68,312)	155,022
Accrued liabilities and deferred compensation	(513,633)	(184,237)
Customer deposits	1,723,932	(572,451)
Net cash (used in) provided by operating activities	56,895	(101,149)
Cash flows from investing activities:
Proceeds from notes receivable from former Director		3,673
Purchase of property and equipment	(76,838)	(103,962)
Net cash used in investing activities	(76,838)	(100,289)
Cash flows from financing activities
Advances from revolving promissory note	(403,629)
Net cash provided by financing activities	(403,629)
Net increase (decrease) in cash and cash equivalents	(423,572)	(201,438)
Cash and cash equivalents at beginning of period	1,877,256	1,719,140
Cash and cash equivalents at end of period	1,453,684	1,517,702
Supplemental disclosure of cash flow information:
Cash paid during period for Interest	17,687
Cash paid during the period for Income taxes	$ 322,713

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Debt (Details Narrative) (USD $)	6 Months Ended
	Apr. 30, 2014	Oct. 31, 2013
Debt Disclosure [Abstract]
Line of Credit Agreement	$ 1,650,000
Interest Rate Terms	LIBOR Rate applicable to each interest period plus 2.24%
Revolving promissory note	$ 1,245,020	$ 1,648,649

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Commitment and Contingencies (Details Narrative) (USD $)	6 Months Ended
	Apr. 30, 2014
Estate of a former employee
Alleged Damages	$ 2,500,000
Georgetown Paper Stock of Rockville, Inc
Alleged Damages	338,248
Legal Fees	$ 40,916

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Nature of Business

6 Months Ended

Apr. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business:

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%.

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Balance Sheets (Parenthetical) (USD $)	Apr. 30, 2014	Oct. 31, 2013
Current Assets:
Accounts receivable, net of allowance for doubtful accounts	$ 45,764	$ 45,764
Stockholders' equity:
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, share authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	6,429,875	6,429,875
Treasury stock, shares	1,245,980	1,245,980

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Inventories (Tables)

6 Months Ended

Apr. 30, 2014

Inventory Disclosure [Abstract]

Inventories

		April 30, 2014		October 31, 2013
Raw materials	$	1,784,846	$	1,796,661
Work in process		3,327,544		3,964,544
Finished goods		1,897,160		199,160
	$	7,009,550	$	5,960,365

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Document and Entity Information	6 Months Ended
	Apr. 30, 2014	May 31, 2014
Document And Entity Information
Entity Registrant Name	International Baler Corporation
Entity Central Index Key	0000781902
Document Type	10-Q
Document Period End Date	Apr. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,183,895
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

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Nature of Business (Details Narrative)	6 Months Ended
	Apr. 30, 2014
Minimum
Worldwide Sales percentage	10.00%
Maximum
Worldwide Sales percentage	35.00%

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Statements of Income (USD $)	3 Months Ended		6 Months Ended
	Apr. 30, 2014	Apr. 30, 2013	Apr. 30, 2014	Apr. 30, 2013
Net sales:
Equipment	$ 2,194,768	$ 2,305,804	$ 5,498,422	$ 5,802,431
Parts and service	589,789	625,783	1,233,702	1,025,022
Total net sales	2,784,557	2,931,587	6,732,124	6,827,453
Cost of sales	2,386,342	2,440,762	5,508,390	5,618,051
Gross profit	398,215	490,825	1,223,734	1,209,402
Operating expense:
Selling expense	245,027	246,198	510,058	499,019
Administrative expense	292,255	226,541	561,763	498,888
Total operating expense	537,282	472,739	1,071,821	997,907
Operating income (loss)	(139,067)	18,086	151,913	211,495
Other income (expense):
Interest income	4,900	140	4,900	570
Interest expense	(7,220)		(17,687)	(3,604)
Total other income (expense)	(2,320)	140	(12,787)	(3,034)
Income (loss) before income taxes	(141,387)	18,226	139,126	208,461
Income tax provision (benefit)	(49,000)	5,500	51,000	79,500
Net income (loss)	$ (92,387)	$ 12,726	$ 88,126	$ 128,961
Income (loss) per share, basic and diluted	$ (0.02)	$ 0.00	$ 0.02	$ 0.02
Weighted average number of shares outstanding	5,183,895	5,183,895	5,183,895	5,183,895

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Debt

6 Months Ended

Apr. 30, 2014

Debt Disclosure [Abstract]

Debt

6.              Debt:

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana that was entered into on January 7, 2013.  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 2.24%. The line of credit is secured by all assets of the Company and has a term of two years.  The line of credit had an outstanding balance of $1,245,020 at April 30, 2014 and $1,648,649 at October 31, 2013.

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Inventories

6 Months Ended

Apr. 30, 2014

Inventory Disclosure [Abstract]

Inventories

5.              Inventories:

  Inventories consisted of the following:

		April 30, 2014		October 31, 2013
Raw materials	$	1,784,846	$	1,796,661
Work in process		3,327,544		3,964,544
Finished goods		1,897,160		199,160
	$	7,009,550	$	5,960,365

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Income Taxes (Details Narrative) (USD $)	Apr. 30, 2014	Oct. 31, 2013
Components of Deferred Tax Assets [Abstract]
Valuation Allowance of Deferred Taxes	$ 0	$ 0
Deferred Tax Asset	$ 79,623	$ 79,623

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Summary of Significant Accounting Policies - Warranty Accrual (Details) (USD $)	6 Months Ended
	Apr. 30, 2014	Apr. 30, 2013
Standard Product Warranty Accrual, Balance Sheet Classification [Abstract]
Beginning balance	$ 60,000	$ 60,000
Warranty service provided	(80,805)	(91,506)
New product warranties	84,000	90,000
Changes to pre-existing warranty accruals	(3,195)	1,506
Ending balance	$ 60,000	$ 60,000

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Apr. 30, 2014

Accounting Policies [Abstract]

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  six-month period ended April 30, 2014 are not necessarily indicative of the results that may be expected for the year ending October 31, 2014. The accompanying balance sheet as of October 31, 2013 was derived from the audited financial statements as of October 31, 2013.

Accounts Receivable and Allowance for Doubtful Accounts

(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.

Inventories

(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.

Revenue Recognition

(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 installations and start-ups and repair services in the period in which the service is provided.

Warranties and Service

(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 six-month period ended April 30:

		2014			2013
Beginning balance	$	60,000		$	60,000
Warranty service provided		(80,805	)		(91,506	)
New product warranties		84,000			90,000
Changes to pre-existing warranty accruals		(3,195	)		1,506
Ending balance	$	60,000		$	60,000

Fair Value of Financial Instruments

(e) Fair Value of Financial Instruments:

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.

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Income Taxes

6 Months Ended

Apr. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

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, the valuation allowance as of April 30, 2014 and at October 31, 2013 is $0.  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 April 30, 2014 and October 31, 2013, net deferred tax assets were $79,623.

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Commitments and Contingencies

6 Months Ended

Apr. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 injured in a workplace accident while an employee of the Company.  The accident occurred in September 2008. The Plaintiff has demanded $2,500,000 to settle this claim.  The Company intends to vigorously defend this case and has contacted its liability insurance carrier to request defense and indemnification of any losses incurred in connection with this lawsuit. A motion to dismiss the Complaint was granted without prejudice in January 2012, allowing the Plaintiff the ability to file an amended Complaint and no further action has been taken by the Plaintiff.

While the outcome of this lawsuit is uncertain, based upon information currently available, the Company believes it is highly unlikely that the results of this claim against the Company will have a material adverse effect on the Company’s financial position, results of operations or cash flows.  The Company has accrued the amount of its insurance deductible in relation to this lawsuit.

On December 26, 2013 the Company was served with a civil action filed by Georgetown Paper Stock of Rockville, Inc. for breach of warranties.  The Plaintiff has demanded $338,248 plus interest and costs to settle this claim.  The Company intends to defend this lawsuit and file a counterclaim against the plaintiff for $40,916 along with reimbursement of expense and lost profits. 

While the outcome of this lawsuit is uncertain, based upon the information currently available, the Company believes it is highly unlikely that the results of this claim against the Company will have a material adverse effect on the Company’s financial position, results of operations and cash flows.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Apr. 30, 2014

Accounting Policies [Abstract]

Warranty Accrual

		2014			2013
Beginning balance	$	60,000		$	60,000
Warranty service provided		(80,805	)		(91,506	)
New product warranties		84,000			90,000
Changes to pre-existing warranty accruals		(3,195	)		1,506
Ending balance	$	60,000		$	60,000

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Inventories - Inventories (Details) (USD $)	Apr. 30, 2014	Oct. 31, 2013
Inventory Disclosure [Abstract]
Raw materials	$ 1,784,846	$ 1,796,661
Work in process	3,327,544	3,964,544
Finished goods	1,897,160	199,160
Inventories	$ 7,009,550	$ 5,960,365

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Statements of Stockholders Equity (USD $)	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Total
Beginning Balance, Value at Oct. 31, 2013	$ 64,299	$ 6,419,687	$ 1,380,056	$ (681,410)	$ 7,182,632
Beginning Balace, Shares at Oct. 31, 2013	6,429,875			1,245,980
Net Income			88,126		88,126
End Balance, Value at Apr. 30, 2014	$ 64,299	$ 6,419,687	$ 1,468,182	$ (681,410)	$ 7,270,758
End Balance, Shares at Apr. 30, 2014	6,429,875			1,245,980

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Related Party Transactions

6 Months Ended

Apr. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

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 50.8% 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., also a competitor of the Company. These baler companies operate independent of each other.  The Company had no equipment sales to, or purchases from, these companies for the six months ended April 30, 2014 or in fiscal year ended October 31, 2013.

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Related Party Transactions (Details Narrative)	Apr. 30, 2014
Related Party Transactions [Abstract]
Ownership	50.80%