10-Q

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

_________________

FORM 10-Q

_________________

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

For the quarterly period ended: April 30, 2018

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 ☒  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 ☒

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 at May 31, 2018.

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INTERNATIONAL BALER CORPORATION

 TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS	3
Balance Sheets ad of January 31, 2018, (unaudited) and October 31, 2017	3
Statements of Income for the three months ended January 31, 2018 and 2017 (unaudited)	4
Statement of Changes in Stockholders’ Equity for the three months ended January 31, 2018 (unaudited)	5
Statement of Cash Flows for the three months ended January 31, 2018 and 2017 (unaudited)	6
Notes to Financial Statements (unaudited)	7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS	11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
ITEM. 4 CONTROLS AND PROCEDURES	12
PART II. OTHER INFORMATION	13
ITEM 1. LEGAL PROCEEDINGS	13
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS	13
ITEM 5. OTHER INFORMATION	13
ITEM 6. EXHIBITS	14
SIGNATURES	15

2

INTERNATIONAL BALER CORPORATION
BALANCE SHEETS
		April 30, 2018 (Unaudited)			October 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	4,394,283		$	4,541,767
Accounts receivable, net of allowance for doubtful accounts of $15,000 at April 30, 2018 and at October 31, 2017		598,710			909,784
Inventories		3,678,123			4,429,648
Prepaid expense and other current assets		279,059			105,935
Income taxes receivable		—			126,886
Total current assets		8,950,175			10,114,020
Property, plant and equipment, at cost:		4,043,954			3,960,510
Less: accumulated depreciation		2,734,818			2,637,818
Net property, plant and equipment		1,309,136			1,322,692
Other assets
Deferred income taxes		26,975			37,348
Total other assets		26,975			37,348
TOTAL ASSETS	$	10,286,286		$	11,474,060
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	535,525		$	765,019
Accrued liabilities		249,986			355,016
Customer deposits		481,369			1,480,836
Total current liabilities		1,266,880			2,600,871
Total liabilities		1,266,880			2,600,871
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, 2018 and October 31, 2017		64,299			64,299
Additional paid-in capital		6,419,687			6,419,687
Retained earnings		3,216,830			3,070,613
		9,700,816			9,554,599
Less:Treasury stock, 1,245,980 shares, at cost		(681,410	)		(681,410	)
Total stockholders' equity		9,019,406			8,873,189
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	10,286,286		$	11,474,060
See accompanying notes to financial statements.

3

INTERNATIONAL BALER CORPORATION
STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED APRIL 30, 2018 AND 2017
UNAUDITED
	Three Months					Six Months
		2018			2017		2018		2017
Net sales:
Equipment	$	1,176,241		$	2,009,054	$	4,434,151	$	3,668,367
Parts and service		786,391			656,667		1,539,117		1,235,147
Total net sales		1,962,632			2,665,721		5,973,268		4,903,514
Cost of sales		1,758,354			2,316,808		5,200,227		4,325,303
Gross profit		204,278			348,913		773,041		578,211
Operating expense:
Selling expense		115,866			113,756		215,534		222,958
Administrative expense		157,956			162,982		322,335		344,798
Total operating expense		273,822			276,738		537,869		567,756
Operating income (loss)		(69,544	)		72,175		235,172		10,455
Other income (expense):
Interest income		1,072			1,444		4,045		2,751
Interest expense		—			—		—		—
Total other income		1,072			1,444		4,045		2,751
Income (loss) before income taxes		(68,472	)		73,619		239,217		13,206
Income tax provision (benefit)		(16,000	)		25,500		93,000		4,500
Net income (loss)	$	(52,472	)	$	48,119	$	146,217	$	8,706
Income (loss) per share, basic and diluted	$	(0.01	)	$	0.01	$	0.03	$	0.00
Weighted average number of shares outstanding		5,183,895			5,183,895		5,183,895		5,183,895
See accompanying notes to financial statements.

4

INTERNATIONAL BALER CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED APRIL 30, 2018
UNAUDITED
	Common Stock							Treasury Stock
	NUMBER OF SHARES ISSUED		PAR VALUE		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS	NUMBER OF SHARES		COST			TOTAL STOCKHOLDERS’ EQUITY
Balance at November 1, 2017	6,429,875	$	64,299	$	6,419,687	$	3,070,613	1,245,980	$	(681,410	)	$	8,873,189
Net income	—		—		—		146,217	—		—			146,217
Balance at April 30, 2018	6,429,875	$	64,299	$	6,419,687	$	3,216,830	1,245,980	$	(681,410	)	$	9,019,406
See accompanying notes to financial statements.

5

INTERNATIONAL BALER CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 2018 AND 2017
UNAUDITED
		2018			2017
Cash flow from operating activities:
Net income	$	146,217		$	8,706
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		97,000			99,000
Deferred income taxes		10,373			—
Changes in operating assets and liabilities:
Accounts receivable		311,074			127,337
Inventories		751,525			92,876
Prepaid expenses and other assets		(173,124	)		(60,675	)
Income taxes receivable		126,886			47,583
Accounts payable		(229,494	)		99,897
Accrued liabilities		(105,030	)		(25,853	)
Customer deposits		(999,467	)		900,053
Net cash (used in) provided by operating activities		(64,040	)		1,288,924
Cash flows from investing activities:
Purchase of property and equipment		(83,444	)		(16,780	)
Redemptions of (interest earned on) certificates of deposit		—			(1,172	)
Net cash used in investing activities		(83,444	)		(17,952	)
Net (decrease) increase in cash and cash equivalents		(147,484	)		1,270,972
Cash and cash equivalents at beginning of period		4,541,767			2,719,337
Cash and cash equivalents at end of period	$	4,394,283		$	3,990,309
Supplemental disclosure of cash flow information:
Cash paid during period for:
Interest	$	—		$	—
Income taxes	$	125,000		$	—
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, 2018 are not necessarily indicative of the results that may be expected for the year ending October 31, 2018. The accompanying balance sheet as of October 31, 2017 was derived from the audited financial statements as of October 31, 2017.

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:

Prior to the 2018 fiscal year, the Company reported inventories at the lower of cost or market. Effective November 1, 2017, the Company began stating inventories prospectively at the lower of cost and net realizable value in accordance with Accounting Standards Update 2015-11 Simplifying the Measurement of Inventory. Generally, under the prior method, market was replacement cost, while net realizable value is based on the selling price of the inventory. This change had no significant effect on earnings. 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 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:

	2018			2017
Beginning balance	$	70,000		$	65,000
Warranty service provided		(60,491	)		(103,829	)
New product warranties		44,342			73,367
Changes to pre-existing warranty accruals		16,149			50,462
Ending balance	$	70,000		$	85,000

(e) Fair Value of Financial Instruments:

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

(f) Recent Accounting Pronouncements:

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the topic. The guidance requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the considerations to which the company expects to be entitled in exchange for those goods or services.

In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company does not believe this will have a significant impact on the financial statements, as generally, contracts contain one distinct performance obligation and specifically state the performance obligation is the delivery of equipment in exchange for a stated consideration. Contracts are not long term and balers are manufactured for individual orders and revenue recognized at time of shipment.

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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 over 75% of the outstanding shares of the Company. Avis owns 100% of The American Baler Company and Harris Waste Management Group, Inc., a competitor of the Company. These baler companies operate completely independent of each other. The Company had no equipment sales to, or purchases from, these companies for the six months ended April 30, 2018 or in fiscal year ended October 31, 2017.

5. Inventories:

Inventories consisted of the following:

	April 30, 2018		October 31, 2017
Raw materials	$	2,102,953	$	2,287,901
Work in process		1,266,070		1,966,519
Finished goods		309,100		175,228
	$	3,678,123	$	4,429,648

6. Debt:

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana which was renewed on May 15, 2018. The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2019. The line of credit had no outstanding balance at April 30, 2018 and at October 31, 2017.

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, there is no valuation allowance as of April 30, 2018 and at October 31, 2017. 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, 2018 and October 31, 2017, net deferred tax assets were $26,975 and $37,348, respectively.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.

The Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into United States tax law on December 22, 2017. The Act made significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21%, and changes in business-related exclusions, and deductions and credits. As a result of the income tax rate reduction, the Company reduced net deferred income tax assets by approximately $10,000 during the first quarter ending January 31, 2018.

9

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 December 1, 2017 the Company was served with a complaint related to an injury to an employee working at Integrated Coating and Seed Technology Inc., (INCOTEC). The employee was operating a baler manufactured by the Company in 1994. The injury occurred on December 4, 2015. The plaintiff is Star Insurance Company. The Company’s insurer has retained an attorney and has begun the discovery process. The Company believes its exposure is a range of $0 to $25,000, the amount of the Company’s deductible on its insurance policy. Accordingly, the Company accrued $25,000 during the six months ended April 30, 2018.

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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, 2017, 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, 2018, the Company had net sales of $1,962,632 compared to net sales of $2,665,721 in the second quarter of fiscal 2017. The lower sales was the result of lower equipment shipments in the second quarter of fiscal 2018, fifteen balers and conveyors in fiscal 2018 versus twenty-four in fiscal 2017. The lower shipments were the result of market conditions including lower prices for recycled materials.

The Company had a net loss of $52,472 in the second quarter of fiscal 2018, compared to net income of $48,119 in the second quarter of fiscal 2017. The lower income was the result of the lower shipments of balers and conveyors.

Results of Operations: Six Month Comparison

The Company had net sales of $5,973,268 in the first six months of fiscal 2018, compared to net sales of $4,903,514 in the same period of 2017. The higher net sales was primarily the result of higher sales of auto-tie balers, conveyors and parts in the first half of fiscal 2018.

The Company had net income of $146,217 in the first six months of fiscal 2018 compared net income of $8,706 in the same period of fiscal 2017. The higher net income was the result of the higher shipments previously mentioned and lower selling and administrative expenses. The lower selling expenses were due to lower advertising expenses, conventions and show expense partially offset by higher salary expenses. The lower administrative expenses were the result of lower salary expenses and insurance costs.

The sales order backlog was approximately $1,330,000 at April 30, 2018 and $2,990,000 at April 30, 2017.

Financial Condition and Liquidity:

Net working capital at April 30, 2018 was $7,683,295 as compared to $7,513,149 at October 31, 2017. The Company currently believes that it will have sufficient cash flow to be able to fund operating activities for the next twelve months.

Average days sales outstanding (DSO) in the first six months of fiscal 2018 were 23.6 days, as compared to 25.2 days in the first six months of fiscal 2017. DSO is calculated by dividing the total of the month-end net accounts receivable balances for the period by three, and dividing that result by the average day’s sales for the period (period sales ÷ 181).

During the six months ended April 30, 2018 and 2017, the Company made additions to plant and equipment of $83,444 and $16,780 respectively.

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana which was renewed on May 15, 2018. The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2019. The line of credit had no outstanding balance at April 30, 2018 and at October 31, 2017.

11

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) / 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.

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 CEO/CFO, 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 CEO/CFO 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, also assessed the effectiveness of the Company’s internal control over financial reporting as of April 30, 2018. 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/CFO, confirm that there were no changes in the Company’s internal control over financial reporting during the fiscal quarter ended April 30, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On December 1, 2017 the Company was served with a complaint related to an injury to an employee working at Integrated Coating and Seed Technology Inc., (INCOTEC). The employee was operating a baler manufactured by the Company in 1994. The injury occurred on December 4, 2015. The plaintiff is Star Insurance Company. The Company’s insurer has retained an attorney and has begun the discovery process. The Company believes its exposure is a range of $0 to $25,000, the amount of the Company’s deductible on its insurance policy. Accordingly, the Company accrued $25,000 during the six months ended April 30, 2018.

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

(a) The annual meeting of stockholders of the Company was held on April 30, 2018.

(b) The first item voted on was the election of Directors. Ronald L. McDaniel was elected as a Class II Director of the Company whose term will expire in three (3) years at the annual meeting of stockholders to be held in 2021. The results of the voting was as follows:

(c)

	Votes
	For		Withheld
Ronald L. McDaniel		3,072,207		111,921

(d) The next item of business was the proposal to ratify the appointment of Pivot CPAs, formerly The GriggsGroup, CPAs, the independent registered public accounting firm of the Company, for the fiscal year ending October 31, 2018. The result of the voting was as follows:

(e)

4,929,817	Votes for the resolution
18,140	votes against, and
76,249	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 INFORMATON

None

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ITEM 6. EXHIBITS

The following exhibits are submitted herewith:

Exhibit	Description
31	Certification of William E. Nielsen, Chief Executive Officer and Chief Financial Officer, pursuant to Rule 13a–14(a)/15d-14(a).
32	Certification of William E. Nielsen, Chief Executive Officer and 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.

		INTERNATIONAL BALER CORPORATION
June 14, 2018	BY:	/s/ William E. Nielsen
		William E. Nielsen
		Chief Executive Officer
		Chief Financial Officer

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EX-31

Exhibit 31

I, William E. Nielsen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended April 30, 2018 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.

		INTERNATIONAL BALER CORPORATION
June 14, 2018	By:	/s/ William E. Nielsen
		William E. Nielsen
		Chief Executive Oficer
		Chief Financial Officer

EX-32

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, 2018 (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.

		INTERNATIONAL BALER CORPORATION
June 14, 2018	By:	/s/ William E. Nielsen
		William E. Nielsen
		Chief Executive Oficer
		Chief Financial Officer

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Document and Entity Information - shares	6 Months Ended
	Apr. 30, 2018	May 31, 2018
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, 2018
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	2018

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Balance Sheets (Unaudited) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
Current assets:
Cash and cash equivalents	$ 4,394,283	$ 4,541,767
Accounts receivable, net of allowance for doubtful accounts of $15,000 at April 30, 2018 and at October 31, 2017	598,710	909,784
Inventories	3,678,123	4,429,648
Prepaid expense and other current assets	279,059	105,935
Income taxes receivable		126,886
Total current assets	8,950,175	10,114,020
Property, plant and equipment, at cost:	4,043,954	3,960,510
Less: accumulated depreciation	2,734,818	2,637,818
Net property, plant and equipment	1,309,136	1,322,692
Other assets:
Deferred income taxes	26,975	37,348
Total other assets	26,975	37,348
TOTAL ASSETS	10,286,286	11,474,060
Current liabilities:
Accounts payable	535,525	765,019
Accrued liabilities	249,986	355,016
Customer deposits	481,369	1,480,836
Total current liabilities	1,266,880	2,600,871
Total liabilities	1,266,880	2,600,871
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, 2018 and October 31, 2017	64,299	64,299
Additional paid-in capital	6,419,687	6,419,687
Retained earnings	3,216,830	3,070,613
Total stockholders' equity before treasury stock	9,700,816	9,554,599
Less: Treasury stock, 1,245,980 shares, at cost	(681,410)	(681,410)
Total stockholders' equity	9,019,406	8,873,189
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 10,286,286	$ 11,474,060

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Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
Current Assets:
Accounts receivable, net of allowance for doubtful accounts	$ 15,000	$ 15,000
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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Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Apr. 30, 2018	Apr. 30, 2017
Net sales:
Equipment	$ 1,176,241	$ 2,009,054	$ 4,434,151	$ 3,668,367
Parts and service	786,391	656,667	1,539,117	1,235,147
Total net sales	1,962,632	2,665,721	5,973,268	4,903,514
Cost of sales	1,758,354	2,316,808	5,200,227	4,325,303
Gross profit	204,278	348,913	773,041	578,211
Operating expense:
Selling expense	115,866	113,756	215,534	222,958
Administrative expense	157,956	162,982	322,335	344,798
Total operating expense	273,822	276,738	537,869	567,756
Operating income (loss)	(69,544)	72,175	235,172	10,455
Other income (expense):
Interest income	1,072	1,444	4,045	2,751
Interest expense
Total other income	1,072	1,444	4,045	2,751
Income (loss) before income taxes	(68,472)	73,619	239,217	13,206
Income tax provision (benefit)	(16,000)	25,500	93,000	4,500
Net income (loss)	$ (52,472)	$ 48,119	$ 146,217	$ 8,706
Income (loss) per share, basic and diluted	$ (0.01)	$ 0.01	$ 0.03	$ 0.00
Weighted average number of shares outstanding	5,183,895	5,183,895	5,183,895	5,183,895

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Statements of Stockholders' Equity (Unaudited) - 6 months ended Apr. 30, 2018 - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Total
Beginning Balace, Shares at Oct. 31, 2017	6,429,875			1,245,980
Beginning Balance, Value at Oct. 31, 2017	$ 64,299	$ 6,419,687	$ 3,070,613	$ (681,410)	$ 8,873,189
Net Income			146,217		146,217
End Balance, Shares at Apr. 30, 2018	6,429,875			1,245,980
End Balance, Value at Apr. 30, 2018	$ 64,299	$ 6,419,687	$ 3,216,830	$ (681,410)	$ 9,019,406

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Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Cash flow from operating activities:
Net income (loss)	$ 146,217	$ 8,706
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	97,000	99,000
Deferred income taxes	10,373
Changes in operating assets and liabilities:
Accounts receivable	311,074	127,337
Inventories	751,525	92,876
Prepaid expenses and other assets	(173,124)	(60,675)
Income taxes receivable	126,886	47,583
Accounts payable	(229,494)	99,897
Accrued liabilities	(105,030)	(25,853)
Customer deposits	(999,467)	900,053
Net cash (used in) provided by operating activities	(64,040)	1,288,924
Cash flows from investing activities:
Purchase of property and equipment	(83,444)	(16,780)
Redemptions of (interest earned on) certificates of deposit		(1,172)
Net cash used in investing activities	(83,444)	(17,952)
Net (decrease) increase in cash and cash equivalents	(147,484)	1,270,972
Cash and cash equivalents at beginning of period	4,541,767	2,719,337
Cash and cash equivalents at end of period	4,394,283	3,990,309
Cash paid during period for:
Interest
Income taxes	$ 125,000

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Nature of Business

6 Months Ended

Apr. 30, 2018

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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Basis of Presentation

6 Months Ended

Apr. 30, 2018

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, 2018 are not necessarily indicative of the results that may be expected for the year ending October 31, 2018. The accompanying balance sheet as of October 31, 2017 was derived from the audited financial statements as of October 31, 2017.

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Summary of Significant Accounting Policies

6 Months Ended

Apr. 30, 2018

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:

Prior to the 2018 fiscal year, the Company reported inventories at the lower of cost or market. Effective November 1, 2017, the Company began stating inventories prospectively at the lower of cost and net realizable value in accordance with Accounting Standards Update 2015-11 Simplifying the Measurement of Inventory. Generally, under the prior method, market was replacement cost, while net realizable value is based on the selling price of the inventory. This change had no significant effect on earnings. 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 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:

	2018			2017
Beginning balance	$	70,000		$	65,000
Warranty service provided		(60,491	)		(103,829	)
New product warranties		44,342			73,367
Changes to pre-existing warranty accruals		16,149			50,462
Ending balance	$	70,000		$	85,000

(e) Fair Value of Financial Instruments:

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

(f) Recent Accounting Pronouncements:

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the topic. The guidance requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the considerations to which the company expects to be entitled in exchange for those goods or services.

In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company does not believe this will have a significant impact on the financial statements, as generally, contracts contain one distinct performance obligation and specifically state the performance obligation is the delivery of equipment in exchange for a stated consideration. Contracts are not long term and balers are manufactured for individual orders and revenue recognized at time of shipment.

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Related Party Transactions

6 Months Ended

Apr. 30, 2018

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 over 75% of the outstanding shares of the Company. Avis owns 100% of The American Baler Company and Harris Waste Management Group, Inc., a competitor of the Company. These baler companies operate completely independent of each other. The Company had no equipment sales to, or purchases from, these companies for the six months ended April 30, 2018 or in fiscal year ended October 31, 2017.

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Inventories

6 Months Ended

Apr. 30, 2018

Inventory Disclosure [Abstract]

Inventories

5. Inventories:

Inventories consisted of the following:

	April 30, 2018		October 31, 2017
Raw materials	$	2,102,953	$	2,287,901
Work in process		1,266,070		1,966,519
Finished goods		309,100		175,228
	$	3,678,123	$	4,429,648

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Debt

6 Months Ended

Apr. 30, 2018

Debt Disclosure [Abstract]

Debt

6. Debt:

The Company has a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana which was renewed on May 15, 2018. The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2019. The line of credit had no outstanding balance at April 30, 2018 and at October 31, 2017.

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Income Taxes

6 Months Ended

Apr. 30, 2018

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, there is no valuation allowance as of April 30, 2018 and at October 31, 2017. 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, 2018 and October 31, 2017, net deferred tax assets were $26,975 and $37,348, respectively.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.

The Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into United States tax law on December 22, 2017. The Act made significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21%, and changes in business-related exclusions, and deductions and credits. As a result of the income tax rate reduction, the Company reduced net deferred income tax assets by approximately $10,000 during the first quarter ending January 31, 2018.

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Commitments and Contingencies

6 Months Ended

Apr. 30, 2018

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 December 1, 2017 the Company was served with a complaint related to an injury to an employee working at Integrated Coating and Seed Technology Inc., (INCOTEC). The employee was operating a baler manufactured by the Company in 1994. The injury occurred on December 4, 2015. The plaintiff is Star Insurance Company. The Company’s insurer has retained an attorney and has begun the discovery process. The Company believes its exposure is a range of $0 to $25,000, the amount of the Company’s deductible on its insurance policy. Accordingly, the Company accrued $25,000 during the six months ended April 30, 2018.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Apr. 30, 2018

Accounting Policies [Abstract]

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:

Prior to 2017, the Company reported inventories at the lower of cost or market. Effective November 1, 2017, the Company began stating inventories prospectively at the lower of cost and net realizable value in accordance with Accounting Standards Update 2015-11 Simplifying the Measurement of Inventory. Generally, under the prior method, market was replacement cost, while net realizable value is based on the selling price of the inventory. This change had no significant effect on earnings during 2017. 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 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:

	2018			2017
Beginning balance	$	70,000		$	65,000
Warranty service provided		(60,491	)		(103,829	)
New product warranties		44,342			73,367
Changes to pre-existing warranty accruals		16,149			50,462
Ending balance	$	70,000		$	85,000

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, short term certificates of deposit, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.

Recent Accounting Pronouncements

(f) Recent Accounting Pronouncements:

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This guidance supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the topic. The guidance requires an entity to recognize revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the considerations to which the company expects to be entitled in exchange for those goods or services.

In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company does not believe this will have a significant impact on the financial statements, as generally, contracts contain one distinct performance obligation and specifically state the performance obligation is the delivery of equipment in exchange for a stated consideration. Contracts are not long term and balers are manufactured for individual orders and revenue recognized at time of shipment.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Apr. 30, 2018

Accounting Policies [Abstract]

Warranty Accrual

Following is a tabular reconciliation of the changes in the warranty accrual for the six-month period ended April 30:

	2018			2017
Beginning balance	$	70,000		$	65,000
Warranty service provided		(60,491	)		(103,829	)
New product warranties		44,342			73,367
Changes to pre-existing warranty accruals		16,149			50,462
Ending balance	$	70,000		$	85,000

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Inventories (Tables)

6 Months Ended

Apr. 30, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following:

	April 30, 2018		October 31, 2017
Raw materials	$	2,102,953	$	2,287,901
Work in process		1,266,070		1,966,519
Finished goods		309,100		175,228
	$	3,678,123	$	4,429,648

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Summary of Significant Accounting Policies - Warranty Accrual (Details) - USD ($)	6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Standard Product Warranty Accrual, Balance Sheet Classification [Abstract]
Beginning balance	$ 70,000	$ 65,000
Warranty service provided	(60,491)	(103,829)
New product warranties	44,342	73,367
Changes to pre-existing warranty accruals	16,149	50,462
Ending balance	$ 70,000	$ 85,000

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Related Party Transactions (Details Narrative)	Apr. 30, 2016
Leland E. Boren
Ownership of Avis	75.00%
Avis Industrial Corp.
Ownership of The American Baler	100.00%

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Inventories - Inventories (Details) - USD ($)	Apr. 30, 2018	Oct. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 2,102,953	$ 2,287,901
Work in process	1,266,070	1,966,519
Finished goods	309,100	175,228
Inventories	$ 3,678,123	$ 4,429,648

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Debt (Details Narrative) - Line of Credit [Member] - USD ($)

6 Months Ended

Apr. 30, 2018

Apr. 30, 2017

Short-term Debt [Line Items]

Line of Credit Agreement

$ 1,650,000

Interest Rate Terms

The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2018.

Outstanding balance

$ 0

$ 0

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Income Taxes (Details Narrative) - USD ($)	6 Months Ended
	Apr. 30, 2018	Oct. 31, 2017
Components of Deferred Tax Assets [Abstract]
Net deferred tax assets	$ 26,975	$ 37,348
Federal Income Tax Rate	21.00%
Reduction in net deferred income tax assets	$ 10,000

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Commitment and Contingencies (Details Narrative)	3 Months Ended
	Apr. 30, 2018 USD ($)
Loss Contingency, Information about Litigation Matters [Abstract]
Lawsuit exposure	$ 25,000