-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bamev7Ut41l+O899EGrvwt1ZV3RXiKe6LqA1nxYpZHl13h3aYHrmFRLhdlaN2n+7 lDSV3Vmbn4yPmFewcU4e7g== 0000927025-98-000085.txt : 19980513 0000927025-98-000085.hdr.sgml : 19980513 ACCESSION NUMBER: 0000927025-98-000085 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980512 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHASE GENERAL CORP CENTRAL INDEX KEY: 0000015357 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 362667734 STATE OF INCORPORATION: MO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 002-05916 FILM NUMBER: 98616813 BUSINESS ADDRESS: STREET 1: 3600 LEONARD RD CITY: ST JOSEPH STATE: MO ZIP: 64503 BUSINESS PHONE: 8162791625 MAIL ADDRESS: STREET 1: 3600 LEONARD RD CITY: ST JOSEPH STATE: MO ZIP: 64503 FORMER COMPANY: FORMER CONFORMED NAME: CHASE CANDY CO DATE OF NAME CHANGE: 19660911 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 Commission File Number 2-5916 CHASE GENERAL CORPORATION (Exact name of registrant as specified in its Charter) Missouri 36-2667734 State incorporation I.R.S. Employer Identification Number 3600 Leonard Road, St. Joseph, Missouri 64503 (Address of principal executive offices) (Zip Code) (816) 279-1625 (Registrant's telephone number, including area code) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No Number of shares outstanding of the issuer's Common Stock as of the latest practicable date: 969,834 shares of the Company's common stock ($1.00 par value) were outstanding. CHASE GENERAL CORPORATION INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheets - March 31, 1998 (Unaudited) and June 30, 1997 3 Consolidated Condensed Statements of Operations - Nine months ended March 31, 1998 and 1997 (Unaudited) 5 Consolidated Condensed Statements of Operations - Three months ended March 31, 1998 and 1997 (Unaudited) 6 Consolidated Condensed Statements of Cash Flows - Nine months ended March 31, 1998 and 1997 (Unaudited) 7 Notes to Consolidated Condensed Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II - OTHER INFORMATION Item 3. Defaults Upon Senior Securities 12 Item 6. Exhibits and Reports on Form 8-K 12 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED BALANCE SHEETS March 31, 1998 and June 30, 1997 MARCH 31, JUNE 30, 1998 1997 (UNAUDITED) CURRENT ASSETS Cash $249,299 $141,657 Receivables, net of allowance 78,793 83,579 Inventories: Finished goods 39,520 89,725 Goods in process 9,509 3,560 Raw materials 78,464 92,975 Packaging materials 77,884 115,251 Prepaid expense 20,728 39,791 Prepaid income taxes 4,404 5,996 Total current assets 558,601 572,534 PROPERTY AND EQUIPMENT - AT COST 1,003,814 985,397 Less accumulated depreciation (758,580) 721,060 Total property and equipment 245,234 264,337 TOTAL ASSETS $ 803,835 $ 836,871 LIABILITIES AND STOCKHOLDERS' EQUITY MARCH 31, JUNE 30, 1998 1997 (UNAUDITED) CURRENT LIABILITIES Accounts payable $ 32,874 $ 59,162 Notes payable, Series B current maturities - 6,294 Accrued expense 34,752 38,683 Total current liabilities 67,626 104,139 LONG-TERM LIABILITIES Notes payable, Series B, less current maturities above 185,305 207,659 Total liabilities 252,931 311,798 STOCKHOLDERS' EQUITY Capital stock issued and outstanding: Prior cumulative preferred stock, $5 par value: Series A (liquidation preference $1,177,500 and $1,155,000 respectively) 500,000 500,000 Series B (liquidation preference $1,132,500 and $1,110,000 respectively) 500,000 500,000 Cumulative preferred stock, $20 par value: Series A (liquidation preference $2,838,850 and $2,794,951 respectively) 1,170,660 1,170,660 Series B (liquidation preference $462,642 and $455,487 respectively) 190,780 190,780 Common stock, $1 par value 969,834 969,834 Paid-in capital in excess of par 3,134,722 3,134,722 Retained earnings (deficit) (5,915,092) (5,940,923) Total stockholders' equity 550,904 525,073 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 803,835 $ 836,871 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) NINE MONTHS ENDED MARCH 31 1998 1997 NET SALES $1,773,026 $2,054,847 COST OF SALES 1,389,744 1,531,856 Gross profit on sales 383,282 522,991 OPERATING EXPENSES Selling expense 214,364 243,333 General and administrative expense 129,437 119,489 Total operating expenses 343,801 362,822 Net income from operations 39,481 160,169 OTHER INCOME (EXPENSE) (7,218) (9,009) Net income before income taxes 32,263 151,160 PROVISION FOR INCOME TAXES 6,432 47,222 NET INCOME $ 25,831 $ 103,938 EARNINGS (LOSS) PER SHARE $ (.07) $ .01 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH 31 1998 1997 NET SALES $240,116 $258,894 COST OF SALES 240,739 253,526 Gross profit (loss) on sales (623) 5,368 OPERATING EXPENSES Selling expense 43,850 43,525 General and administrative expense 40,855 41,556 Total operating expenses 84,705 85,081 Net loss from operations (85,328) (79,713) OTHER INCOME (EXPENSE) (2,274) (2,812) Net loss before income taxes (87,602) (82,525) PROVISION (CREDIT) FOR INCOME TAXES (30,316) (34,748) NET LOSS $(57,286) $(47,777) LOSS PER SHARE $ (.09) $ (.08) See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) ] NINE MONTHS ENDED MARCH 31 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 25,831 $103,938 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 46,955 39,658 Provision for bad debts 4,815 4,815 Effects of changes in operating assets and liabilities: Accounts receivables (29) 1,343 Accounts payable (26,288) 23,498 Inventories 96,134 (65,568) Prepaid expenses 20,655 15,409 Accrued expense (3,931) (12,763) Estimated liability for income taxes - 31,892 Net cash provided by operating activities 164,142 142,222 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (27,852) (30,301) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt (28,648) (38,703) NET INCREASE IN CASH 107,642 73,218 CASH, BEGINNING OF PERIOD 141,657 236,316 CASH, END OF PERIOD $ 249,299 $309,534 SUPPLEMENTAL DISCLOSURES Interest paid $ 14,098 $ 16,214 Income taxes paid $ 4,840 $ 17,494 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Interim results are not necessary indicative of results for a full year. A summary of the company's significant accounting policies is presented on page 8 (not shown) of its 1997 Annual Report to Shareholders. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the Annual Report to Shareholders when reviewing interim financial results. There has been no material change in the accounting policies followed by the Company during fiscal 1997. In the opinion of management, the accompanying interim consolidated condensed financial statements contain all adjustments necessary to present fairly Chase General Corporation's financial position as of March 31, 1998 and June 30, 1997, the results of its operations for the nine months and three months ended March 31, 1998 and 1997, and its cash flows for the nine months ended March 31, 1998 and 1997. CHASE GENERAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 - EARNINGS (LOSS) PER SHARE The earnings (loss) per share was computed on the weighted average of outstanding common shares during the years as follows: NINE MONTHS ENDED THREE MONTHS ENDED MARCH 31 MARCH 31 1998 1997 1998 1997 Net income (loss) $25,831 $103,938 $(57,286) $(47,777) Preferred dividend requirements: 6% Prior Cumulative Preferred, $5 par value 45,000 45,000 15,000 15,000 5% Convertible Cumulative Preferred, $20 par value 51,054 51,054 17,018 17,018 Total dividend requirements 96,054 96,054 32,018 32,018 NET INCOME (LOSS) COMMON STOCKHOLDERS $(70,223) $ 7,884 $(89,304) $(79,795) WEIGHTED AVERAGE OF OUTSTANDING COMMON SHARES 969,834 969,834 969,834 969,834 EARNINGS (LOSS) PER SHARE $ (.07) $ .01 $ (.09) $ (.08) No computation was made on common stock equivalents outstanding because earnings (loss) per share would be anti-dilutive. ITEM 2 CHASE GENERAL CORPORATION AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Chase General and its wholly-owned subsidiary are engaged in the manufacture of confectionery products which are sold primarily to wholesale houses, grocery accounts, vendors, and repackers. RESULTS OF OPERATIONS Nine Months ended March 31, 1998 and 1997 Sales: The Company had no unusual transactions for the nine months ended March 31, 1998. The Company realized a gross profit margin of 21.62% for the nine months ended March 31, 1998 as compared to 25.45% for the same period ended a year ago. Net sales decreased 14% over the same period a year ago as a result of non-recurring sales to customers. However, no major customers have been lost during this nine month period. The reduced gross profit margin is due to increased depreciation and indirect labor costs. Expenses: Selling expenses as a percentage of sales were consistent for both periods. General and administrative expenses were 8% higher than the same period a year ago due to increased office salaries and professional fees. Interest expense continues to decrease because of debt retirement. Inventories at March 31, 1998 were $96,000 lower than at June 30, 1997 due to decreased finished goods on hand. Accounts payable are $26,300 lower than at June 30, 1997 as a result of decreased inventory on hand at March 31, 1998. Three Months Ended March 31, 1998 and 1997 Sales: Net sales decreased 7% over the same period a year ago. This three month period is normally the Company's slowest season. Due to the reduced volume of production, the labor force was used to perform plant maintenance which caused a negative gross margin of $623 as compared to a positive gross margin of $5,368 for the same period a year ago. (Continued) ITEM 2 CHASE GENERAL CORPORATION AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS (CONTINUED) Expenses: Selling expenses remained constant compared with the same period a year ago, while general and administrative expenses decreased 2% compared with the same period a year ago. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 1998, the Company has no commitments for capitalized expenditures. Cash increased $107,642 during the current nine month period as a result of controlling overhead costs. Working capital also increased approximately $23,000 for the current nine month period. The officers of the corporation and legal counsel continue to discuss liquidity and capital resource options to resolve the $5 million cumulative preferred stock dividends in arrears. PART II. OTHER INFORMATION CHASE GENERAL CORPORATION AND SUBSIDIARY Item 3. DEFAULTS UPON SENIOR SECURITIES a. None b. The total cumulative preferred stock dividends in arrears at March 31, 1998 is $5,611,492 Item 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits - None b. Reports on Form 8-K: There were no reports on Form 8-K filed by the Company during the quarter ended March 31, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CHASE GENERAL CORPORATION Registrant May 12, 1998 /s/ Barry M. Yantis Date Barry M. Yantis President and Chief Financial Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUN-30-1998 MAR-31-1998 249,299 0 96,322 17,529 205,377 558,601 1,003,814 758,580 803,835 67,626 185,305 0 2,361,440 969,834 (2,780,370) 803,835 1,773,026 1,775,436 1,389,744 338,986 0 4,815 9,628 32,263 6,432 0 0 0 0 25,831 (.07) 0
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