-----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, Fh5PzhK3yCLwVFvqTooMgDdA9EbnsytTrjhM6gthEHuJ6buYqvZKBEVMvj7/0Xpg o967i96oXtslPHndPZVg3Q== 0000927025-98-000024.txt : 19980304 0000927025-98-000024.hdr.sgml : 19980304 ACCESSION NUMBER: 0000927025-98-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980302 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: 98555052 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 December 31, 1997 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 ____ Indicate the 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 - December 31, 1997 (Unaudited) and June 30, 1997 . . . . . . . . . . . . . . .3 Consolidated Condensed Statements of Operations Six months ended December 31, 1997 and 1996 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . .5 Consolidated Condensed Statements of Operations - Three months ended December 31, 1997 and 1996 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . .6 Consolidated Condensed Statements of Cash Flows - Six months ended December 31, 1997 and 1996 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . .7 Notes to Consolidated Condensed Financial Statements. . . . .8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . .9 Part II - Other Information Item 3. Defaults Upon Senior Securities . . . . . . . . . . 10 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 10 PART I. FINANCIAL INFORMATION CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED BALANCE SHEETS DECEMBER 31, 1997 AND JUNE 30, 1997 DECEMBER 31, JUNE 30, 1997 1997 (Unaudited) CURRENT ASSETS Cash $ 278,671 $ 141,657 Receivables, net of allowance 112,750 83,579 Inventories: Finished goods 29,251 89,725 Goods in process 6,295 3,560 Raw materials 101,315 92,975 Packaging materials 103,003 115,251 Prepaid expense 2,430 39,791 Prepaid income taxes -- 5,996 Total current assets 633,715 572,534 PROPERTY AND EQUIPMENT - AT COST 1,000,461 985,397 Less accumulated depreciation 742,080 721,060 Total property and equipment 258,381 264,337 TOTAL ASSETS $ 892,096 $ 836,871 LIABILITIES AND STOCKHOLDERS' EQUITY DECEMBER 31, JUNE 30, 1997 1997 (Unaudited) CURRENT LIABILITIES Accounts payable $ 48,974 $ 59,162 Notes payable, Series B current maturities -- 6,294 Accrued expense 20,103 38,683 Estimated liability for income taxes 29,524 -- Total current liabilities 98,601 104,139 LONG-TERM LIABILITIES Notes payable, Series B, less current maturities above 185,305 207,659 Total liabilities 283,906 311,798 STOCKHOLDERS' EQUITY Capital stock issued and outstanding: Prior cumulative preferred stock, $5 par value: Series A (liquidation preference $1,170,000 and $1,155,000 respectively) 500,000 500,000 Series B (liquidation preference $1,125,000 and $1,110,000 respectively) 500,000 500,000 Cumulative preferred stock, $20 par value: Series A (liquidation preference $2,824,217 and $2,794,951 respectively) 1,170,660 1,170,660 Series B (liquidation preference $460,257 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) (5,857,806) (5,940,923) Total stockholders' equity 608,190 525,073 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 892,096 $ 836,871 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED DECEMBER 31 1997 1996 NET SALES $ 1,532,910 $ 1,795,953 COST OF SALES 1,149,005 1,278,330 Gross profit 383,905 517,623 OPERATING EXPENSES Selling expense 170,514 199,808 General and administrative expense 88,582 77,933 Total operating expenses 259,096 277,741 Income from operations 124,809 239,882 OTHER INCOME (EXPENSE) (4,944) (6,197) Income before income taxes 119,865 233,685 PROVISION FOR INCOME TAXES 36,748 81,970 NET INCOME $ 83,117 $ 151,715 EARNINGS PER SHARE $ .02 $ .09 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED DECEMBER 31 1997 1996 NET SALES $ 1,055,758 $ 1,263,690 COST OF SALES 782,343 877,935 Gross profit 273,415 385,755 OPERATING EXPENSES Selling expense 102,361 140,010 General and administrative expense 43,793 41,080 Total operating expenses 146,154 181,090 Income from operations 127,261 204,665 OTHER INCOME (EXPENSE) (2,772) (3,253) Income before income taxes 124,489 201,412 PROVISION FOR INCOME TAXES 37,670 75,535 NET INCOME $ 86,819 $ 125,877 EARNINGS PER SHARE $ .06 $ .09 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED DECEMBER 31 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 83,117 $ 151,715 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 30,454 25,753 Provision for doubtful accounts 3,210 3,210 Effects of changes in operating assets and liabilities: Accounts receivable (32,381) (59,392) Inventory 61,647 (61,878) Prepaid expenses 43,357 40,214 Accounts payable (10,188) 48,988 Accrued expense and estimated liability for income taxes 10,944 43,195 Net cash provided by operating activities 190,160 191,805 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (24,498) (19,015) Net cash used in investing activities (24,498) (19,015) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt (28,648) (34,033) Net cash used in financing activities (28,648) (34,033) NET INCREASE IN CASH 137,014 138,757 CASH, BEGINNING OF PERIOD 141,657 236,316 CASH, END OF PERIOD $ 278,671 $ 375,073 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 necessarily 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 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 December 31, 1997 and June 30, 1997 and the results of its operations for the six months and three months ended December 31, 1997 and 1996, and its cash flows for the six months ended December 31, 1997 and 1996. NOTE 2 - EARNINGS PER SHARE The earnings per share was computed on the weighted average of outstanding common shares as follows:
SIX MONTHS ENDED THREE MONTHS ENDED DECEMBER 31 DECEMBER 31 1997 1996 1997 1996 Net income $ 83,117 $ 151,715 $ 86,819 $ 125,877 Preferred dividend requirements: 6% Prior Cumulative Preferred, $5 par value 30,000 30,000 15,000 15,000 5% Convertible Cumulative Preferred, $20 par value 34,036 34,036 17,018 17,018 Total dividend requirements 64,036 64,036 32,018 32,018 Net income common shareholders $ 19,081 $ 87,679 $ 54,801 $ 93,859 Weighted average of outstanding common shares 969,834 969,834 969,834 969,834 Earnings per share $ .02 $ .09 $ .06 $ .09
No computation was made on common stock equivalents outstanding because earnings 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 SIX MONTHS ENDED DECEMBER 31, 1997 AND 1996 Sales: The Company had no unusual transactions for the six months ended December 31, 1997. The Company realized a gross profit margin of 25.04% for the six months ended December 31, 1997 as compared to 28.82% for the same period ended a year ago. Net sales decreased 15% over the same period a year ago as a result of non-recurring sales to customers. Expenses: Selling expenses were also 15% lower than the same period a year ago as a result of reduced marketing efforts on low volume customers. General and administrative expenses remained consistent compared with the same period a year ago. Interest expense continues to decrease because of debt retirement. Inventories at December 31, 1997 were $62,000 lower than at June 30, 1997 due to decreased finished goods on hand. THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996 Sales: The Company realized a gross profit margin of 25.9% and 30.52% for the three months ended December 31, 1997 and 1996, respectively. Net sales decreased 16% over the same period a year ago. No major customers were lost during this period. Expenses: Reduced brokerage activity for three months ended December 31, 1997 resulted in selling expenses decreasing 27% as compared to selling expenses for the three months ended December 31, 1996. General and administrative expenses remained consistent compared with the same period a year ago. Accounts payable are lower than at June 30, 1997 as a result of decreased inventory on hand at December 31, 1997. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 1997, the Company has no commitments for capitalized expenditures. Cash increased $137,014 during the current six month period as a result of completing the busy season and controlling overhead. Working capital increased approximately $66,700 for the six 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. (Continued) PART II. OTHER INFORMATION CHASE GENERAL CORPORATION AND SUBSIDIARY ITEM 3. DEFAULTS UPON SENIOR SECURITIES a. None b. The total cumulative preferred stock dividend in arrears at December 31, 1997 is $5,579,474. 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 during October, November, and December, 1997. 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 March 2, 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 DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS JUN-30-1998 DEC-31-1997 278,671 0 128,674 15,924 239,864 633,715 1,000,461 742,080 892,096 98,601 185,305 0 2,361,440 969,834 (2,723,084) 892,096 1,532,910 1,534,385 1,149,005 254,816 0 4,280 6,419 119,865 36,748 0 0 0 0 83,117 .02 0
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