EXHIBIT 21

BALTEK CORPORATION AND SUBSIDIARIES
Subsidiaries of Registrant
December 31, 1999
                                                                    Voting
                                            Where                   Securities
                                            Incorporated            Owned
                                            ------------            -----

Balmanta S.A. (2)                           Ecuador                 100%
Compania Ecuatoriana de Balsa, S.A.         Ecuador                 100%
Maderas Secas C.A. (2)                      Ecuador                 100%
Marines C.A.(6)                             Ecuador                 100%
Plantaciones De Balsa, S.A. (3)             Ecuador                 100%
Productos del Pacifico, S.A.                Ecuador                 100%
Recorcholis,S.A. (8)                        Ecuador                 100%
Servicios Contables, S.A. (5)               Ecuador                 100%
Balsa Ecuador Lumber Corporation            New Jersey              100%
Balsa Development Corporation               New Jersey              100%
Sanlam Corporation                          New York                100%
Baltek Foreign Sales Corporation            U.S. Virgin Islands
                                                                    100%
Crustacea Corporation                       Delaware                100%
Cryogenic Structures Corporation            Delaware                94%   (1)


<PAGE>


                                                                      EXHIBIT 21
                                                                     (Continued)
BALTEK CORPORATION AND SUBSIDIARIES
Subsidiaries of Registrant
December 31, 1999
                                                                Voting
                                             Where              Securities
                                             Incorporated       Owned
                                             ------------       -----
Pacific Timber Ltd. (4)                      Great Britain      100% (1)
Baltek GmbH                                  Germany            100% (1)
Baltek, S.A.                                 France             100% (1)
Baltek, Ltd.                                 Great Britain      100% (1)
Baltek Scandinavia Aps (7)                   Denmark            100% (1)


(1)  Includes qualifying shares in the names of individuals  associated with the
     Company.

(2)  Wholly-owned  by Productos del Pacifico,  S.A. and Compania  Ecuatoriana de
     Balsa, S.A.

(3)  Wholly-owned by Baltek  Corporation,  Compania  Ecuatoriana de Balsa,  S.A,
     Productos del Pacifico,  S.A.,  Maderas Secas,  C.A.,  Balmanta,  S.A., and
     Servicios Contables, S.A.

(4)  Wholly-owned by Baltek Ltd.

(5)  Wholly-owned by Compania  Ecuatoriana de Balsa,  S.A.,  Maderas Secas C.A.,
     Balmanta, S.A., and Productos del Pacifico, S.A.

(6)  Wholly-owned by Baltek Corporation, Maderas Secas C.A.and Balmanta, S.A.

(7)  Wholly-owned by Baltek, S.A.

(8)  Wholly-owned by Marines C.A.

The above  subsidiaries  are included in the  Company's  consolidated  financial
statements.


<PAGE>






                       BALTEK CORPORATION AND SUBSIDIARIES









       CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
                      AS OF DECEMBER 31, 1999 AND 1998 AND
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999








                       PREPARED FOR FILING AS PART OF THE
                            ANNUAL REPORT (FORM 10-K)
                    TO THE SECURITIES AND EXCHANGE COMMISSION
                      FOR THE YEAR ENDED DECEMBER 31, 1999

                                   **********


<PAGE>


BALTEK CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
  FINANCIAL STATEMENT SCHEDULE
PREPARED FOR FILING AS PART OF THE ANNUAL REPORT
  (FORM 10-K) TO THE SECURITIES AND EXCHANGE COMMISSION
YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------


                                                                          Page

INDEPENDENT AUDITORS' REPORT................................................1

   Consolidated Balance Sheets as of December 31, 1999 and 1998.............2

   Consolidated Statements of Income for Each of the Three Years
   in  the  Period  Ended  December 31, 1999................................3

   Consolidated Statements of Stockholders' Equity for Each of the Three
   Years in the Period Ended December 31, 1999..............................4

   Consolidated Statements of Cash Flows for Each of the Three Years
   in the Period Ended December 31, 1999....................................5

   Notes to Consolidated Financial Statements for Each of the Three
   Years in the Period Ended December 31, 1999...........................6-16

FINANCIAL STATEMENT SCHEDULE AS OF AND FOR EACH OF THE THREE YEARS IN THE PERIOD
ENDED DECEMBER 31, 1999:

II - Valuation and Qualifying Accounts.....................................17


All other schedules for which provision is made in the applicable regulations of
the Securities and Exchange  Commission have been omitted because of the absence
of the  conditions  under  which  they are  required  or  because  the  required
information called for is set forth in the consolidated  financial statements or
notes thereto.


<PAGE>

INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Baltek Corporation and Subsidiaries

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Baltek
Corporation and  Subsidiaries  (the  "Corporation")  as of December 31, 1999 and
1998, and the related consolidated  statements of income,  stockholders' equity,
and cash flows for each of the three  years in the  period  ended  December  31,
1999. Our audits also included the financial  statement  schedule  listed in the
accompanying index. These financial  statements and financial statement schedule
are the responsibility of the Corporation's management. Our responsibility is to
express an opinion on the financial  statements and financial statement schedule
based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects, the financial position of Baltek Corporation and Subsidiaries
as of December 31, 1999 and 1998, and the results of their  operations and their
cash flows for each of the three years in the period ended  December 31, 1999 in
conformity with generally accepted accounting principles.  Also, in our opinion,
such  financial  statement  schedule,  when  considered in relation to the basic
consolidated  financial  statements  taken as a whole,  presents  fairly  in all
material respects the information set forth therein.



DELOITTE & TOUCHE LLP
Parsippany, New Jersey

March 13, 2000


<PAGE>
                      BALTEK CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Dollars in Thousands, except per share data)
--------------------------------------------------------------------------------

                                                                December 31,
ASSETS                                                      1999           1998

CURRENT ASSETS:
   Cash and cash equivalents                               $   967       $ 1,056
   Accounts receivable (less allowance for doubtful
        accounts - 1999, $175; 1998, $144)                   9,285         6,942
   Inventories                                              18,478        14,667
   Prepaid expenses                                            551           425
   Other                                                     1,185         1,148
                                                           -------       -------

       Total current assets                                 30,466        24,238

PROPERTY, PLANT AND EQUIPMENT - Net                         13,565        13,114

TIMBER AND TIMBERLANDS                                       8,200         8,186

OTHER ASSETS                                                   674           539
                                                           -------       -------

TOTAL ASSETS                                               $52,905       $46,077
                                                           =======       =======

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Notes payable                                           $ 8,079       $ 4,681
   Accounts payable                                          4,821         2,438
   Income taxes payable                                        211           216
   Accrued salaries, wages and bonuses payable               1,211         1,440
   Accrued expenses and other liabilities                      683           876
   Current portion of long-term debt                           199           449
   Current portion of obligation under capital lease           415           381
                                                           -------       -------

         Total current liabilities                          15,619        10,481

OBLIGATION UNDER CAPITAL LEASE                                 547           961

LONG-TERM DEBT                                                  44           620

UNION EMPLOYEE TERMINATION BENEFITS                             99           235
                                                           -------       -------

           Total liabilities                                16,309        12,297
                                                           -------       -------
<PAGE>

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par; 5,000,000 shares
   authorized and unissued                                     --             --
   Common stock, $1.00 par; 10,000,000 shares authorized,
         2,523,261 shares issued and outstanding            2,523          2,523
   Additional paid-in capital                               2,157          2,157
   Retained earnings                                       31,916         29,100
                                                          -------        -------

          Total stockholders' equity                       36,596         33,780
                                                          -------        -------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $52,905        $46,077
                                                          =======        =======



See notes to consolidated financial statements.

                                       -2-
<PAGE>
<TABLE>
<CAPTION>
                       BALTEK CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Dollars in Thousands, except per share data)
--------------------------------------------------------------------------------
                             Year Ended December 31,

                                         1999             1998             1997
<S>                                   <C>              <C>              <C>
NET SALES                             $ 86,027         $ 67,695         $ 56,140

COST OF PRODUCTS SOLD                   66,337           50,607           42,322

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES               13,850           11,954           10,423
                                      --------         --------         --------

           Operating income              5,840            5,134            3,395
                                      --------         --------         --------

OTHER INCOME (EXPENSES):
  Interest expense                      (1,356)          (1,554)            (760)
  Foreign exchange (loss) gain            (336)             814              (84)
  Interest income                           15                4                3
  Other, net                              --                  5                2
                                      --------         --------         --------

           Total                        (1,677)            (731)            (839)
                                      --------         --------         --------

INCOME BEFORE TAXES                      4,163            4,403            2,556

INCOME TAX PROVISION                     1,347            1,144              715
                                      --------         --------         --------

NET INCOME                            $  2,816         $  3,259         $  1,841
                                      ========         ========         ========

BASIC AND DILUTED EARNINGS
   PER COMMON SHARE                   $   1.12         $   1.29         $   0.73
                                      --------         --------         --------
</TABLE>

See notes to consolidated financial statements.

                                      -3-
<PAGE>

                       BALTEK CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (Dollars in Thousands)
--------------------------------------------------------------------------------


                                    Common      Additional
                                    Stock,       Paid-in        Retained
                                    $1 Par       Capital        Earnings

BALANCE, JANUARY 1, 1997          $ 2,523        $ 2,157        $24,000

  Net income - 1997                    --             --          1,841
                                  -------        -------        -------

BALANCE, DECEMBER 31, 1997
                                    2,523          2,157         25,841

  Net income - 1998                    --             --          3,259
                                  -------        -------        -------

BALANCE, DECEMBER 31, 1998
                                    2,523          2,157         29,100

  Net income - 1999                                               2,816
                                  -------        -------        -------

BALANCE, DECEMBER 31, 1999        $ 2,523        $ 2,157        $31,916
                                  =======        =======        =======


See notes to consolidated financial statements.

                                      -4-

<PAGE>
<TABLE>
<CAPTION>
                       BALTEK CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
--------------------------------------------------------------------------------

                                                                             Year Ended December 31,
                                                                       1999           1998              1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>             <C>             <C>
  Net income                                                         $ 2,816         $ 3,259         $ 1,841
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                                      3,002           2,492           2,324
    Foreign exchange loss (gain)                                         336            (814)             84
    Deferred taxes                                                      (180)            (93)            (59)
    Changes in assets and liabilities, net of the effect
      of foreign currency translation and acquisition:
        Accounts receivable                                           (2,338)         (1,829)           (555)
        Income tax payable/receivable                                    (15)            206             129
        Inventories                                                   (3,390)            (67)           (832)
        Prepaid expenses and other current assets                         36              17             207
        Other assets                                                     (14)             (2)            184
        Accounts payable and accrued expenses                          1,839            (405)            626
        Other                                                           (234)            (72)            (17)
                                                                     -------         -------         -------

           Net cash provided by operating activities                   1,858           2,692           3,932
                                                                     -------         -------         -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net acquisitions of property, plant and equipment                   (2,410)         (3,296)         (1,681)
  Increase in timber and timberlands                                    (943)         (1,737)         (1,338)
  Acquisition of seafood assets, net of cash acquired                   (491)            --              (68)
                                                                     -------         -------         -------

           Net cash used in investing activities                      (3,844)         (5,033)         (3,087)
                                                                     -------         -------         -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (decrease) in notes payable                                 3,398           1,529          (2,050)
  Borrowings of long-term debt                                            --           1,428           2,528
  Payments of long-term debt                                          (1,357)         (1,756)           (535)
  Principal payments under capital lease                                (382)           (337)           (295)
                                                                     -------         -------         -------

           Net cash provided by (used in) financing activities         1,659             864            (352)
                                                                     -------         -------         -------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                  238           1,356            (431)
                                                                     -------         -------         -------

NET (DECREASE) INCREASE IN
  CASH AND CASH EQUIVALENTS                                              (89)           (121)             62

CASH AND CASH EQUIVALENTS,
  BEGINNING OF YEAR                                                    1,056           1,177           1,115
                                                                     -------         -------         -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                  <C>             <C>             <C>
CASH AND CASH EQUIVALENTS,
  END OF YEAR                                                        $   967         $ 1,056         $ 1,177
                                                                     =======         =======         =======

SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                                                         $ 1,281         $ 1,292         $   472
                                                                     =======         =======         =======
    Income taxes                                                     $ 1,509         $ 1,025         $   684
                                                                     =======         =======         =======
</TABLE>


See notes to consolidated financial statements

                                       -5-
<PAGE>


BALTEK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------


1.    NATURE OF OPERATIONS

      Baltek  Corporation  and  subsidiaries  (the "Company") is a multinational
      manufacturing and marketing company.  The Company operates in two lines of
      business: supplying core materials,  principally balsa wood and balsa wood
      products,  linear and cross-linked PVC Foam and non-woven polyester mat to
      various composite  industries;  and in the seafood  business,  as a shrimp
      producer and as an importer.  Approximately  69% of Baltek's  revenues are
      derived from its core materials segment and 31% from the seafood segment.

      The  principal  market for the Company's  core  materials is in the United
      States,  while the seafood market is divided between the United States and
      Europe.

      The balsa and shrimp products are produced in Ecuador,  South America. The
      supply of raw materials has been without interruption for almost 60 years.
      The balsa and shrimp  identifiable assets located at various facilities in
      Ecuador are included in the Company's consolidated balance sheet and total
      approximately  $24 million at December 31, 1999. Foam and mat products are
      purchased from outside vendors; the foam products are further processed by
      the Company for sale to customers.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Principles  of  Consolidation  -  The  consolidated  financial  statements
      include the accounts of the Company and its wholly-owned subsidiaries. All
      significant intercompany accounts and transactions have been eliminated in
      consolidation.

      Cash and Cash Equivalents - Cash equivalents  consist of short-term highly
      liquid investments with maturities of three months or less when purchased.

      Cash flows from Baltek's  operations in foreign  countries are  calculated
      based on their reporting currencies.  As a result of this, amounts related
      to  changes  in  assets  and  liabilities  reported  on  the  consolidated
      statement  of cash  flows  will not  necessarily  agree to  changes in the
      corresponding  balances on the consolidated  balance sheets. The effect of
      exchange  rate  changes on cash  balances  held in foreign  currencies  is
      reported on a separate line below cash flows from financing activities.

      Inventories - Inventories are valued at the lower of cost or market.  Cost
      is determined by use of the first-in, first-out (FIFO) method.

      Property - Property,  plant and equipment is stated at cost.  Depreciation
      is provided for depreciable assets over their estimated useful lives using
      various accepted  depreciation  methods. The asset under capital lease and
      leasehold improvements are amortized over their estimated useful lives, or
      the life of the lease, whichever is shorter.

                                      -6-

<PAGE>
      Income  Taxes - Taxes on current  income are  provided  by the Company and
      each  subsidiary as prescribed by local tax laws.  Deferred tax assets and
      liabilities are recognized for the future tax consequences attributable to
      differences  between the financial  statement carrying amounts of existing
      assets and liabilities and their respective tax bases.

      Timber and Timberlands - Timberlands are carried at cost.  Timber-deferred
      cultivation  costs  represent the cost of preparing,  clearing and seeding
      the Company's balsa wood plantations. Amortization of deferred cultivation
      costs  is  based on units of  production.  Timber  carrying  costs,  which
      include  the  regular  maintenance  and  overseeing  of  timberlands,  are
      expensed as incurred.

      Foreign Currency  Translation - The financial  statements of the Company's
      foreign  subsidiaries  are  remeasured  into U.S.  dollars,  the Company's
      functional currency.

      Foreign  Currency  Risk  Management  - The Company  uses  forward  foreign
      currency exchange  contracts to reduce currency exchange rate risk on firm
      commitment  purchases  denominated in foreign currencies.  Gains or losses
      resulting  from these  contracts  are  deferred  and are  included  in the
      purchase  price of the materials.  The maximum term of these  contracts is
      less than one year.  The Company does not intend to enter into  derivative
      financial instruments for speculative purposes.

      Common  Stock - Holders of the  Company's  Common  Stock have full voting,
      dividend and liquidation preferences in the Company.

      Concentrations of Credit Risk - Baltek's core material  products,  as well
      as shrimp and other  seafood  products,  are sold to a number of  markets,
      including boating,  transportation,  military,  hobby, and the retail food
      industry. Baltek's products are sold throughout the United States, Canada,
      Europe,  Japan and Australia to approximately 1,600 ultimate users. Credit
      risk  related to Baltek's  trade  receivables  is limited due to the large
      number of customers in differing industries and geographic areas.

      Fair Value of Financial  Instruments - At December 31, 1999 and 1998,  the
      carrying  value  of  cash,   accounts   receivable  and  accounts  payable
      approximated  their fair values.  The carrying amount of the notes payable
      and other debt obligations approximates fair value based on the nature and
      terms of the loans, including borrowing rates and other terms available to
      the Company for loans with similar terms and conditions.

      Research and Development - Research and  development  costs are charged to
      expense as incurred.  Research  and  development  expenditures  charged to
      operations  were  approximately  $597,000,  $609,000 and $331,000 in 1999,
      1998 and 1997, respectively.

      Earnings per Common Share - Earnings per share is computed by dividing net
      income by the  weighted-average  number of common shares outstanding.  The
      weighted-average  number  of common  shares  outstanding  for all  periods
      presented is 2,523,261. The Company does not have any potentially dilutive
      instruments; therefore, the reporting of diluted earnings per share is not
      applicable.

      Use of Estimates - The Company's  financial  statements include the use of
      estimates and assumptions which have been developed by management based on
      available  facts and  information.  Actual results could differ from those
      estimates.

      Reclassifications  - Certain  amounts in prior year  financial  statements
      have been reclassified to conform with the current year presentation.

                                      -7-
<PAGE>
3.    INVENTORIES

      Inventories  of the core  materials and shrimp  segments are summarized as
follows (amounts in thousands):

                                       1999           1998

Raw materials                        $ 5,260        $ 6,407
Work-in-process                        3,050          4,476
Finished goods                        10,168          3,784
                                     -------        -------

Inventories                          $18,478        $14,667
                                     =======        =======


      Included in the above  amounts are  inventories  relating to the Company's
      seafood  operations of $4,358,000  and $1,566,000 at December 31, 1999 and
      1998, respectively.

4.    PROPERTY, PLANT AND EQUIPMENT

      Property,  plant and equipment is comprised of the  following  (amounts in
thousands):

                                                Estimated
                                              Useful Lives      1999       1998

         Land                                                $   125   $    125
         Shrimp properties                     5-20 years     18,755     17,694
         Buildings and improvements             20 years       2,057      1,826
         Machinery and equipment               5-10 years     12,164     11,202
         Leasehold improvements                                1,012        890
         Assets under capital lease                            2,499      2,499
         Construction-in-progress                                 --          6
                                                              ------     ------

         Total                                                36,612     34,242


         Less accumulated depreciation and amortization       23,047     21,128
                                                              ------     ------

         Property, plant and equipment -net                  $13,565   $ 13,114
                                                             =======   ========

        Shrimp properties consist  principally of shrimp ponds, a hatchery and a
        packing  plant.  Accumulated  amortization  related  to the asset  under
        capital  lease  at  December  31,  1999  and  1998  was  $1,957,000  and
        $1,707,000, respectively.

        In April  1999,  the Company  signed an  agreement  to purchase  certain
        assets and inventory  totaling  approximately  $500,000 from the seafood
        importing  subsidiary  of  Nissho  Iwai  Corporation.   The  acquisition
        increases the Company's  presence in the seafood industry and allows the
        Company  to sell  not  only  shrimp  but many  other  types of  seafood,
        including  lobster,  crab, and salmon.  Due to the  immateriality of the
        acquisition, pro-forma information is not presented herein.

                                      -8-
<PAGE>
5.    TIMBER AND TIMBERLANDS

      Timber  and  Timberlands  are  comprised  of  the  following  (amounts  in
thousands):


                                                      1999         1998

       Timberlands                                 $ 3,906      $ 3,813
       Timber-deferred cultivation costs             4,294        4,373
                                                   -------      -------

       Timber and Timberlands                      $ 8,200      $ 8,186
                                                   =======      =======

      Amortization of deferred cultivation costs was approximately  $928,000 and
      $572,000 at December 31, 1999 and 1998, respectively.

6.    NOTES PAYABLE

      Notes payable under various  agreements  consist of the following (amounts
in thousands):


                                                      1999         1998
     U.S.  Bank loan,  with  interest at
     prime  less  3/4% in 1999  and 1998
     (7.75% and 7% at December  31, 1999
     and 1998, respectively)                        $ 5,801      $ 2,800


     Ecuadorian  bank loans,  payable in
     sucres,  due  within  one year from
     the origination date, with interest
     rates  between 46.3% and 63.0% (see
     also Note 7)                                       421           --

     Ecuadorian  bank loans,  payable in
     U.S.  dollars,  due within one year
     from  the  origination  date,  with
     interest  rates  between  10.6% and
     18.0% (see also Note 7)                          1,857        1,881
                                                    -------      -------

                                                    $ 8,079      $ 4,681
                                                    =======      =======

      Notes payable


      The U.S.  Bank loan , which  expires on  September  30,  2000,  represents
      borrowings  under a secured  $12,500,000  line of credit  with a  domestic
      bank.  Borrowings  under the line are  secured by the  Company's  domestic
      accounts   receivable   and  inventory.   The  loan   agreement   contains
      non-financial  affirmative and negative covenants and limits the amount of
      dividends  the Company may declare.  The Company is also required to pay a
      commitment  fee on the unused  portion of its credit  line on a  quarterly
      basis.  The Company was in compliance  with all loan covenants at December
      31, 1999.

      The weighted average  interest rate on borrowings  outstanding at December
      31, 1999 and 1998 was approximately 12.0% and 8.2%, respectively.

                                       -9-
<PAGE>

7. LONG-TERM DEBT

      Long-term debt consists of the following (amounts in thousands):


                                                          1999            1998

Equipment loan                                          $  --           $  173

Ecuadorian bank loans, payable in sucres                  165              827

Other notes, with interest rates between
4.4% and 6.0%, due at various dates through 2002
                                                           78               69
                                                        -------         -------
                                                          243            1,069
Less current portion                                     (199)            (449)
                                                        -------         -------

Long-term debt                                          $  44           $  620
                                                        =======         =======


      At December 31,  1999,  the Company had a line of credit  available  under
      Ecuadorian  borrowing  arrangements of $4,000,000,  of which approximately
      $1,557,000 was unused. Borrowings under the line are secured by a mortgage
      on certain  land and  buildings  and a  negative  pledge  against  certain
      machinery.

      Included  in  the  outstanding   line  of  credit  are  dollar  and  sucre
      denominated  short-term  loans  (see  Note 6) and sucre  denominated  term
      loans. The term loans require principal payments every three or six months
      and interest  payments  every three  months.  The interest  rates on sucre
      denominated loans at December 31, 1999 and 1998 were approximately 65% and
      69%,  respectively,  and are adjustable quarterly.  Final payments on both
      loans are due in September 2000.

      Additionally,  the  Company  has  unused  lines of credit  under  European
      borrowing arrangements amounting to approximately $700,000.

      The  aggregate  maturities  of long-term  debt at December 31, 1999 are as
      follows (amounts in thousands):


            2000                      $ 199
            2001                         29
            2002                         15
                                      -----
                                      $ 243
                                      =====


                                      -10-


<PAGE>
8.    INCOME TAXES

      Income before income taxes is comprised of (amounts in thousands):

                                   1999          1998          1997

       Domestic                 $  3,566       $  2,697      $  1,753
       Foreign                       597          1,706           803
                                --------       --------      --------

       Total                    $  4,163        $ 4,403      $  2,556
                                ========        =======      ========


      The  provision  for income  taxes  consists of the  following  (amounts in
      thousands):


                                1999             1998             1997
       Federal:
         Current             $  1,049          $   966         $   666
         Deferred                (180)             (93)            (59)
       State                      154              142             100
       Foreign                    324              129               8
                             --------          -------         -------

       Total                 $  1,347        $   1,144         $   715
                             ========        =========         =======



      The  reconciliation  between  the  Company's  effective  tax  rate and the
      statutory Federal tax rate is as follows:
<TABLE>
<CAPTION>
                                                                   1999             1998          1997
<S>                                                                <C>              <C>           <C>
       Statutory Federal tax rate                                  35.0%            35.0%         35.0%
       Increase (decrease) in taxes resulting from:
       Foreign income - effect of rates differing
       from statutory rates, effect of nontaxable
       exchange gains and losses, and foreign losses
       producing no current benefit                                 2.9            (12.0)         (9.6)
       Refunds and change in current valuation
       allowance                                                    0.0             (0.0)         (2.5)
       State taxes, net of Federal income tax benefit               2.3              2.0           2.5
       Foreign tax credits                                         (4.5)            (2.5)          0.0
       Other - net                                                 (3.4)              3.5           2.6
                                                                -------          -------        ------

       Effective tax rate                                          32.3%            26.0%         28.0%
                                                                =======          =======       =======
</TABLE>

      In 1997, the Company utilized foreign tax loss carryforwards,  for which a
      full valuation allowance had been recorded in prior years.

                                      -11-
<PAGE>

Significant  components of the Company's deferred tax assets and liabilities are
as follows (amounts in thousands):

                                                   1999          1998
Current assets (liabilities):
  Inventory capitalization                        $ 223         $ 105
  Unexpired insurance                              (179)         (127)
  Reserve amounts not currently deductible          102           116
  Other - net                                        45            39
                                                  -----         -----
Total current asset, net                          $ 191         $ 133
                                                  =====         =====

Noncurrent assets:
  Capital lease                                   $  99         $ 182
  Other                                             275            71
  Foreign tax loss carryforwards                     25            91
  Less valuation allowance                         (25)           (91)
                                                  -----         -----
Total noncurrent asset, net                       $ 374         $ 253
                                                  =====         =====


      As of  December  31,  1999 and  1998,  the  Company  had a full  valuation
      allowance recorded against its foreign tax loss  carryforwards  related to
      certain  European  locations.  Management  believes that it is more likely
      than not that the remaining carryforwards will expire unutilized.

      The total current and noncurrent  amounts  presented above are included in
      other assets (current and noncurrent) in the consolidated balance sheet.

      The  Company  has not accrued  federal  income  taxes on the equity in the
      undistributed  earnings of its  foreign  subsidiaries,  which  amounted to
      approximately  $8,564,000 at December 31, 1999,  because such earnings are
      permanently  reinvested.  It  is  not  practicable  to  estimate  the  tax
      liability that might arise if these earnings were remitted.

9.    EMPLOYEE BENEFIT PLANS

      The Company has a profit-sharing  plan under which an annual  contribution
      may be paid from  accumulated  profits at the  discretion  of the Board of
      Directors  for the benefit of eligible  employees  upon their  retirement.
      Contributions  to  this  plan by the  Company  amounted  to  approximately
      $329,000,  $350,000  and  $313,000 in 1999,  1998 and 1997,  respectively.
      Additionally,  the plan  allows for all  participants  to defer  between 1
      percent and 15 percent of their salary.  Amounts  deferred are paid to the
      trustee  of the  plan.  The plan does not  provide  for  matching  Company
      contributions.

      In 1999, the Company adopted a non-qualified  deferred  compensation  plan
      for  the  benefit  of  certain   eligible   employees.   The  plan  allows
      participants to defer up to 100% of their  compensation.  The Company does
      not contribute into the plan.

      Certain  employees of the Company's  Ecuadorian  subsidiary  companies are
      covered by termination and retirement plans  incorporated  under statutory
      requirements of labor laws and collective bargaining agreements.  Included
      in  the  accompanying  consolidated  balance  sheets  are  union  employee
      termination  benefits which approximate  unpaid vested benefits under such
      plans. The amount of benefits to be received by an employee is established
      by the collective  bargaining agreements and is based on length of service
      and compensation. Provisions of approximately $27,000, $54,000 and $75,000
      were charged to income during 1999, 1998 and 1997, respectively.

                                      -12-
<PAGE>


      The Company  participates  in a  multiemployer  pension plan for the union
      employees  at  the   Northvale,   New  Jersey   facility.   Provisions  of
      approximately  $200,000,  $174,000  and  $139,000  were  charged to income
      during 1999, 1998 and 1997, respectively.

10.   LEASES

      The  Company  leases its  primary  office  space and plant  facilities  in
      Northvale,  New Jersey under a long-term  capital  lease  agreement  which
      expires in 2002.  The lease  provides that the Company pay all real estate
      taxes, maintenance and insurance relating to the facilities.

      The Company also has operating  lease  agreements for warehouse and office
      space in the United  States  and  Europe.  The  longest  lease  obligation
      extends to 2008.  Certain  leases  contain  renewal  options and generally
      require the  Company to pay other  facility  related  costs such as taxes,
      maintenance  and  insurance.  Rent expense  under these  operating  leases
      amounted  to  $502,000,  $361,000  and  $204,000  in 1999,  1998 and 1997,
      respectively.

      Future minimum lease payment obligations, as of December 31, 1999, for the
      capital lease described above, as well as operating leases, are as follows
      (amounts in thousands):

                                           Capital        Operating
       Year                                Lease           Leases

2000                                      $   470        $   446
2001                                          488            446
2002                                           82            372
2003                                           --            213
2004                                           --            113
Thereafter                                     --            117
                                           ------        -------

Minimum lease payments                      1,040        $ 1,707
                                                         =======

Less amounts representing interest            (78)
                                           ------

Capital lease obligation                  $   962
                                          =======

                                      -13-
<PAGE>

11.   SEGMENT INFORMATION

      The  Company  and  its  subsidiaries   operate  in  two  segments,   as  a
      manufacturer  and  supplier of  structural  core  materials  in  composite
      applications  to various  industries,  and in the seafood  industry,  as a
      shrimp producer and as an importer.  The segments are managed and reported
      separately  because of the difference in products they produce and markets
      they serve. The accounting  policies of the segments are the same as those
      described in the summary of significant  accounting policies.  The Company
      evaluates   performance  based  on  operating  income,   i.e.  results  of
      operations  before  interest,  income taxes and foreign exchange gains and
      losses. There are no intersegment sales.

      No single  customer  provided  more than 10% of the  Company's  revenue in
      1999, 1998 or 1997.

      Information about the Company's operations by segment is as follows:
<TABLE>
<CAPTION>
                                                                         (In Thousands)
                                                                 1999        1998         1997
       Net sales to unaffiliated customers

<S>                                                            <C>          <C>          <C>
     Core materials segment                                    $58,938      $53,600      $44,004
     Seafood segment                                            27,089       14,095       12,136
                                                               -------      -------      -------

     Total net sales                                           $86,027      $67,695      $56,140
                                                               =======      =======      =======
     Operating income

     Core materials segment                                    $ 4,569      $ 3,721      $ 1,635
     Seafood segment                                             1,271        1,413        1,760
                                                               -------      -------      -------

     Total operating income                                    $ 5,840      $ 5,134      $ 3,395
                                                               =======      =======      =======

     Identifiable assets

     Core materials segment                                    $35,728      $35,105      $31,387
     Seafood segment                                            17,177       10,972       10,368
                                                               -------      -------      -------

     Total identifiable assets                                 $52,905      $46,077      $41,755
                                                               =======      =======      =======


     Capital expenditures, net, including timberlands
     And capital leases

     Core materials segment                                    $2,197      $3,641      $2,305
     Seafood segment                                            1,271       1,392         737
                                                               ------      ------      ------

     Total capital expenditures                                $3,468      $5,033      $3,042
                                                               ======      ======      ======
</TABLE>

                                      -14-

<PAGE>
      Information pertaining to the Company's operations in different geographic
areas is as follows:
<TABLE>
<CAPTION>
                                                          (In Thousands)
                                            1999             1998             1997

Net sales to unaffiliated customers

<S>                                       <C>              <C>              <C>
United States - domestic                  $65,293          $49,399          $38,835
United States - export                     11,263           11,289           11,642
Ecuador                                        87              131              116
Europe                                      9,384            6,876            5,547
                                          -------          -------          -------

Total net sales                           $86,027          $67,695          $56,140
                                          =======          =======          =======

Identifiable assets

United States                             $24,781          $16,973          $15,457
Ecuador                                    23,957           25,217           22,672
Europe                                      4,167            3,887            3,626
                                          -------          -------          -------

Total identifiable assets                 $52,905          $46,077          $41,755
                                          =======          =======          =======
</TABLE>

                                      -15-

<PAGE>


12.   FINANCIAL INSTRUMENTS

      At  December  31,  1999,  the Company  did not have any  material  foreign
      exchange  contracts  outstanding.  At December 31, 1998,  the Company held
      forward  foreign  currency  exchange  contracts for the purchase of French
      francs with a notional amount of approximately  $269,000. Firm commitments
      existed  which  correlated to the maturity  dates of the forward  exchange
      contracts.



13.   NEW ACCOUNTING PRONOUNCEMENTS

      In June 1998,  the Financial  Accounting  Standards  Board issued SFAS No.
      133, "Accounting for Derivative Instruments and Hedging Activities," which
      was amended by SFAS No. 137.  The  statement  establishes  accounting  and
      reporting standards for derivative  instruments and hedging activities and
      requires  that an entity  recognize  all  derivatives  as either assets or
      liabilities  in the balance  sheet and measure those  instruments  at fair
      value.  Provisions  of the  statement are required to be adopted for years
      beginning  after June 15, 2000.  The Company is currently  evaluating  the
      impact  of  this  statement  on its  financial  position  and  results  of
      operations.


                                     ******

                                      -16-
<PAGE>

<TABLE>
<CAPTION>
                                                                     Schedule II

                       BALTEK CORPORATION AND SUBSIDIARIES

        FINANCIAL STATEMENT SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
          EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999
                              Dollars in Thousands


                                                          Additions
                                         Balance at      Charged to                         Balance
                                         Beginning        Costs and                         at End
         Description                      of Year         Expenses         Deductions       of Year
         -----------                      -------         --------         ----------       -------

<S>                                       <C>                <C>              <C>           <C>
YEAR ENDED DECEMBER 31, 1999:
  Allowance for doubtful
    accounts receivable                   $  144             $  66            $  35         $  175
                                          ======             =====            =====         ======

  Inventory                               $  266              $ --            $ 116         $  150
                                          ======             =====            =====         ======


YEAR ENDED DECEMBER 31, 1998:
  Allowance for doubtful
    accounts receivable                    $  73             $  74            $   3          $ 144
                                           ======            =====            =====         ======

  Inventory                                $  90             $ 176            $  --          $ 266
                                           ======            =====            =====         ======

YEAR ENDED DECEMBER 31, 1997:
  Allowance for doubtful
    accounts receivable                    $  63             $  30            $  20          $  73
                                          ======             =====            =====         ======

  Inventory                               $   --             $  90            $  --          $  90
                                          ======             =====            =====         ======
</TABLE>
                                      -17-