-----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, Es5Y3z1YgW+xIK/hWboPUCHQmiB8sIFdp0M0kHT+IqCk4BzKvXUEPhGrVViDrHOc h/Trqm/qPLWh53yE/Rd5+A== 0000927025-98-000173.txt : 19981120 0000927025-98-000173.hdr.sgml : 19981120 ACCESSION NUMBER: 0000927025-98-000173 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981119 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: 98755220 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 PERSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 As of November 1, 1998 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 - September 30, 1998 (Unaudited) and June 30, 1998. . . . . . . . . . . . .3 Consolidated Condensed Statements of Operations - First quarter ended September 30, 1998 and 1997 (Unaudited). . . . . . . . . . . . . . . . . . . . . .5 Consolidated Condensed Statements of Cash Flows - First quarter ended September 30, 1998 and 1997 (Unaudited). . . . . . . . . . . . . . . . . . . . . .6 Notes to Consolidated Condensed Financial Statements. . . .7 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 SEPTEMBER 30, 1998 AND JUNE 30, 1998 ASSETS September 30, June 30, 1998 1998 (Unaudited) CURRENT ASSETS Cash $ 70,368 $ 161,093 Trade receivables, net of allowance 163,838 94,514 Income tax receivable 26,096 24,710 Inventories: Finished goods 207,034 47,397 Goods in process 17,745 3,633 Raw materials 107,127 81,377 Packaging materials 92,523 79,006 Prepaid expense 8,297 35,549 Prepaid income taxes 1,000 1,000 Total current assets 694,028 528,279 PROPERTY AND EQUIPMENT - AT COST 1,023,189 1,016,799 Less accumulated depreciation 787,547 774,080 Total property and equipment 235,642 242,719 TOTAL ASSETS $ 929,670 $ 770,998 LIABILITIES AND STOCKHOLDERS' EQUITY September 30, June 30, 1998 1998 (Unaudited) CURRENT LIABILITIES Accounts payable $ 218,654 $ 59,194 Accrued expenses 39,701 34,928 Total current liabilities 258,355 94,122 LONG-TERM LIABILITIES Notes payable, Series B 185,305 185,305 Total liabilities 443,660 279,427 STOCKHOLDERS' EQUITY Capital stock issued and outstanding: Prior cumulative preferred stock, $5 par value: Series A (liquidation preference $1,192,500 and $1,185,000 respectively) 500,000 500,000 Series B (liquidation preference $1,147,500 and $1,140,000 respectively) 500,000 500,000 Cumulative preferred stock, $20 par value: Series A (liquidation preference $2,868,116 and $2,853,484 respectively) 1,170,660 1,170,660 Series B (liquidation preference $467,412 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) (5,979,986) (5,974,425) Total stockholders' equity 486,010 491,571 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 929,670 $ 770,998 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) FIRST QUARTER ENDED SEPTEMBER 30 1998 1997 NET SALES $ 391,701 $ 477,152 COST OF SALES 305,048 366,662 Gross profit 86,653 110,490 OPERATING EXPENSES Selling expense 54,759 68,153 General and administrative expense 38,194 44,789 Total operating expenses 92,953 112,942 Loss from operations (6,300) (2,452) OTHER INCOME (EXPENSE) (647) (2,172) Loss before income taxes (6,947) (4,624) PROVISION (CREDIT) FOR INCOME TAXES (1,386) (922) NET LOSS $ (5,561) $ (3,702) LOSS PER SHARE $ (.04) $ (.04) See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FIRST QUARTER ENDED SEPTEMBER 30 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES Net loss for the quarter $ (5,561) $ (3,702) Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 13,467 15,228 Provision for doubtful accounts 1,605 1,605 Effects of changes in operating assets and liabilities: Trade accounts receivable (70,929) (114,135) Income tax receivable (1,386) -- Inventories (213,016) (105,627) Prepaid expenses 27,252 30,255 Accounts payable 159,460 102,833 Accrued liabilities 4,773 17,752 Net cash used in operating activities (84,335) (55,791) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (6,390) (600) NET DECREASE IN CASH (90,725) (56,391) CASH, BEGINNING OF QUARTER 161,093 141,657 CASH, END OF QUARTER $ 70,368 $ 85,266 See notes to consolidated condensed financial statements. CHASE GENERAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - SUMMARY OF 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 pages 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 ended September 30, 1998. 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 September 30, 1998 and June 30, 1998 and the results of its operations and its cash flows for the first quarter ended September 30, 1998 and 1997. CHASE GENERAL CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 2 - LOSS PER SHARE Loss per share was computed on the weighted average of outstanding common shares as follows: FIRST QUARTER ENDED SEPTEMBER 30 1998 1997 Net loss $ (5,561) $ (3,702) Preferred dividend requirements: 6% Prior Cumulative Preferred, $5 par value 15,000 15,000 5% Convertible Cumulative Preferred, $20 par value 17,018 17,018 Total dividend requirements 32,018 32,018 Loss - common shareholders $(37,579) $ (35,720) Weighted average of outstanding common shares 969,834 969,834 Loss per share $ (.04) $ (.04) 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 First Quarter ended September 30, 1998 and 1997 Sales - The Company had no unusual transactions for the first quarter ended September 30, 1998. The Company realized a gross profit percentage of 22.12% and 23.16% for the first quarter ended September 30, 1998 and 1997, respectively. Consolidated net sales for the quarter ended September 30, 1998 of $391,701, were 18% under the $477,152 in 1997's first quarter. No major customer was lost during the current quarter. However, a customer whose sales range from $20,000 to $25,000 ordered for delivery to be in the quarter ending December 31, 1998 rather than as in prior years, for the current quarter ending September 30, 1998. Expenses - Selling, general and administrative were 23.73% of sales in the quarter ended September 30 1998 compared to 23.67% in the first quarter of 1997, which is consistent with last year. Inventories at September 30, 1998 are $213,000 higher than at June 30, 1998 since the Company is presently entering their fall busy season. In addition accounts payable is $159,460 higher at September 30, 1998 compared to June 30, 1998 which also reflects the entrance into the Company's fall busy season. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1998, the Company has no commitments for capitalized expenditures. Cash decreased $90,725 as a result of the increased seasonal build-up of inventories. The officers of the Company and legal counsel continue to discuss liquidity and capital resource options to resolve the $5.6 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 September 30, 1998 are $5,675,528. 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 July, August, and September 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 November 19, 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 SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUN-30-1999 SEP-30-1998 70,368 0 208,329 18,395 424,429 694,028 1,023,189 787,547 929,670 258,355 185,305 0 2,361,440 969,834 (2,845,264) 929,670 391,701 393,834 305,048 91,348 0 1,605 2,780 (6,947) (1,386) (5,561) 0 0 0 (5,561) (.04) 0
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