-----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, S2Fz6iKFyIjazFFH/cZPok1Smc5Y4BCh6OFc7TxlPbcxHcmq09slCGcLkN5afWzw CRpOuzFyDQP1lmbieSFLxg== 0000927025-99-000047.txt : 19990512 0000927025-99-000047.hdr.sgml : 19990512 ACCESSION NUMBER: 0000927025-99-000047 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990511 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: 99617429 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, 1999 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, 1999 (Unaudited) and June 30, 1998 ........................ 3 Consolidated Condensed Statements of Operations - Nine months ended March 31, 1999 and 1998 (Unaudited)........................................... 5 Consolidated Condensed Statements of Operations - Three months ended March 31, 1999 and 1998 (Unaudited)........................................... 6 Consolidated Condensed Statements of Cash Flows - Nine months ended March 31, 1999 and 1998 (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, 1999 AND JUNE 30, 1998 MARCH 31, JUNE 30, 1999 1998 (Unaudited) CURRENT ASSETS Cash $ 278,164 $ 161,093 Trade receivables, net of allowance 70,542 94,514 Income tax receivables -- 24,710 Inventories: Finished goods 65,874 47,397 Goods in process 4,628 3,633 Raw materials 72,544 81,377 Packaging materials 104,632 79,006 Prepaid expense 20,018 35,549 Prepaid income taxes -- 1,000 Total current assets 616,402 528,279 PROPERTY AND EQUIPMENT - AT COST 1,023,603 1,016,799 Less accumulated depreciation 814,646 774,080 Total property and equipment 208,957 242,719 TOTAL ASSETS $ 825,359 $ 770,998 LIABILITIES AND STOCKHOLDERS' EQUITY MARCH 31, JUNE 30, 1999 1998 (Unaudited) CURRENT LIABILITIES Accounts payable $ 54,726 $ 59,194 Accrued expense 31,282 34,928 Income taxes payable 19,750 -- Total current liabilities 105,758 94,122 LONG-TERM LIABILITIES Notes payable, Series B, less current maturities above 162,672 185,305 Total liabilities 268,430 279,427 STOCKHOLDERS' EQUITY Capital stock issued and outstanding: Prior cumulative preferred stock, $5 par value: Series A (liquidation preference $1,207,500 and $1,185,000 respectively) 500,000 500,000 Series B (liquidation preference $1,162,500 and $1,140,000 respectively) 500,000 500,000 Cumulative preferred stock, $20 par value: Series A (liquidation preference $2,897,383 and $2,853,484 respectively) 1,170,660 1,170,660 Series B (liquidation preference $472,181 and $465,026 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) (5,909,067) (5,974,425) Total stockholders' equity 556,929 491,571 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 825,359 $ 770,998 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) NINE MONTHS ENDED MARCH 31, 1999 1998 NET SALES $ 1,753,469 $ 1,773,026 COST OF SALES 1,351,032 1,389,744 Gross profit on sales 402,437 383,282 OPERATING EXPENSES Selling expense 194,045 214,364 General and administrative expense 118,049 129,437 Total operating expenses 312,094 343,801 Net income from operations 90,343 39,481 OTHER INCOME (EXPENSE) (4,235) (7,218) Net income before income taxes 86,108 32,263 PROVISION FOR INCOME TAXES 20,750 6,432 NET INCOME $ 65,358 $ 25,831 LOSS PER SHARE $ (.03) $ (.07) See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1999 1998 NET SALES $ 272,458 $ 240,116 COST OF SALES 244,343 240,739 Gross profit (loss) on sales 28,115 (623) OPERATING EXPENSES Selling expense 43,024 43,850 General and administrative expense 40,894 40,855 Total operating expenses 83,918 84,705 Net loss from operations (55,803) (85,328) OTHER INCOME (EXPENSE) (1,436) (2,274) Net loss before income taxes (57,239) (87,602) CREDIT FOR INCOME TAXES (25,523) (30,316) NET LOSS $ (31,716) $ (57,286) LOSS PER SHARE $ (.07) $ (.09) See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED MARCH 31, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 65,358 $ 25,831 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 40,566 46,955 Provision for bad debts 4,815 4,815 Effects of changes in operating assets and liabilities: Accounts receivables 43,867 (29) Accounts payable (4,468) (26,288) Inventories (36,265) 96,134 Prepaid expenses 16,531 20,655 Accrued expense (3,646) (3,931) Income taxes payable 19,750 -- Net cash provided by operating activities 146,508 164,142 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (6,804) (27,852) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt (22,633) (28,648) NET INCREASE IN CASH 117,071 107,642 CASH, BEGINNING OF PERIOD 161,093 141,657 CASH, END OF PERIOD $ 278,164 $ 249,299 SUPPLEMENTAL DISCLOSURES Interest paid $ 12,109 $ 14,098 Income taxes paid (received) $ (24,710) $ 4,840 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 and 9 (not shown) of its 1998 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 the quarter and nine months ended March 31, 1999. 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, 1999 and June 30, 1998, the results of its operations for the nine months and three months ended March 31, 199 and 1998, and its cash flows for the nine months ended March 31, 1999 and 1998. CHASE GENERAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 - LOSS PER SHARE The 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 1999 1998 1999 1998 Net income (loss) $ 65,358 $ 25,831 $ (31,716) $ (57,286) 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 LOSS - COMMON STOCKHOLDERS $ (30,696) $ (70,223) $ (63,734) $ (89,304) WEIGHTED AVERAGE OF OUTSTANDING COMMON SHARES 969,834 969,834 969,834 969,834 LOSS PER SHARE $ (.03) $ (.07) $ (.07) $ (.09)
No computation was made on common stock equivalents outstanding because 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, 1999. The Company realized a gross profit margin of 22.95% for the nine months ended March 31, 1999 as compared to 21.62% for the same period ended a year ago. Consolidated net sales for the nine months ended March 31, 1999 of $1,753,469, were 1% below the $1,773,026 in 1998's first nine months. No major customers were lost during this nine month period. The 1999 improved gross profit margin is due to a decrease in direct and indirect labor costs. Expenses: Selling, general and administrative expenses were 17.8% of sales in the nine month period ended March 31, 1999 compared to 19.4% in the first nine months of 1998. Interest expense continues to decrease because of debt retirement. Inventories at March 31, 1999 were $36,000 higher than at June 30, 1998 due to increased non-seasonal sales orders from a major customer. Accounts payable are $4,500 lower than at June 30, 1998. THREE MONTHS ENDED MARCH 31, 1999 AND 1998 Sales: The Company's net sales increased 13% over net sales for the three months ended March 31, 1998. This three month period is normally the Company's slowest season. However, due to new sales from a major customer, sales were significantly higher for the March 1999 quarter. (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, general and administrative expenses were 30.8% of sales in the three month period ended March 31, 1999 compared to 35.3% in the same period a year ago. The improved percentage is a result of increased sales for the current period. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 1999, the Company has no commitments for capitalized expenditures. Cash increased $117,000 during the current nine month period as a result of controlling overhead costs. Working capital also increased approximately $76,500 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 $5.7 million cumulative preferred stock dividends that are 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, 1999 is $5,739,564. 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, 1999. 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 11, 1999 /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 FINANCIAL STATEMENTS OF CHASE GENERAL CORPORATION CONTAINED IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUN-30-1999 MAR-31-1999 278,164 0 92,568 22,026 247,678 616,402 1,023,603 814,646 825,359 105,758 162,672 0 2,361,440 969,834 (2,774,345) 825,359 1,753,469 1,756,554 1,351,032 307,279 0 4,815 7,320 86,108 20,750 0 0 0 0 65,358 (.03) 0
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