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 September 30, 1996
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:
Class Outstanding at October 31, 1996
Common Stock, $1 par value 969,834
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CHASE GENERAL CORPORATION
Index
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - September 30, 1996
(Unaudited) and June 30, 1996......................... 3
Consolidated Condensed Statements of Operations -
First quarter ended September 30, 1996 and 1995
(Unaudited)...................................... 5
Consolidated Condensed Statements of Cash Flows -
First quarter ended September 30, 1996 and 1995
(Unaudited)...................................... 6
Notes to Consolidated Condensed Financial Statements
...................................................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............. 8
Part II - Other Information
Item 3. Defaults Upon Senior Securities............. 9
Item 6. Exhibits and Reports on Form 8-K............ 9
<PAGE>
PART I. FINANCIAL INFORMATION
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, 1996 and June 30, 1996
ASSETS
September 30, June 30,
1996 1996
(Unaudited)
CURRENT ASSETS
Cash $129,351 $236,316
Receivables, net of
allowance 243,051 74,754
Inventories:
Finished goods 160,479 51,204
Goods in process 10,133 2,024
Raw materials 119,117 42,189
Packaging materials 109,416 104,565
Prepaid expense 9,056 42,659
Total current 780,603 553,711
PROPERTY AND EQUIPMENT
- AT COST 949,567 942,011
Less accumulated
depreciation 692,427 679,768
Total property
and equipment 257,140 262,243
TOTAL ASSETS $1,037,743 $815,954
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LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
1996 1996
(Unaudited)
CURRENT LIABILITIES
Accounts payable $228,317 $46,943
Notes payable, Series B,
current maturities 9,676 9,676
Accrued expenses 56,033 41,456
Total current liabilities 294,026 98,075
LONG-TERM LIABILITIES
Notes payable, Series B,
less current maturities
above 242,980 242,980
Total liabilities 537,006 341,055
STOCKHOLDERS' EQUITY
Capital stock 3,331,274 3,331,274
Paid-in capital in
excess of par 3,134,722 3,134,722
Retained earnings
(deficit) (5,965,259) (5,991,097)
Total stockholders'
equity 500,737 474,899
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,037,743 $815,954
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
First Quarter Ended
September 30
1996 1995
NET SALES $532,263 $468,694
COST OF SALES 400,395 357,854
Gross profit 131,868 110,840
OPERATING EXPENSES
Selling expense 59,798 60,938
General and administrative
expense 36,853 34,624
Total operating expenses 96,651 95,562
Income from operations 35,217 15,278
OTHER INCOME (EXPENSE) (2,944) (2,864)
Income before income
taxes 32,273 12,414
PROVISION FOR INCOME TAXES 6,435 2,475
NET INCOME $25,838 $9,939
LOSS PER SHARE $ (.01) $(.02)
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
First Quarter Ended
September 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the quarter $25,838 $9,939
Adjustments to reconcile net income
to net cash used in operating
activities:
Depreciation and amortization 12,660 9,890
Provision for doubtful accounts 1,605 2,400
Changes in operating assets and
liabilities:
Net increase in accounts
receivable (169,902) (128,255)
Net increase in inventory (199,163) (252,450)
Net decrease in prepaid
expenses 33,603 29,395
Net increase in accounts
payable 181,374 151,474
Net increase in accrued
liabilities 14,577 6,037
Net cash used in operating
activities (99,408) (171,570)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (7,557) (53,811)
NET DECREASE IN CASH (106,965) (225,381)
CASH, BEGINNING OF QUARTER 236,316 300,570
CASH, END OF QUARTER $129,351 $75,189
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
In the opinion of management, the accompanying unaudited and
audited consolidated condensed financial statements contain all
adjustments necessary to present fairly Chase General
Corporation's financial position as of September 30, 1996 and
June 30, 1996 and the results of its operations and its cash
flows for the first quarter ended September 30, 1996 and 1995.
While the Company believes that the disclosures presented are
adequate to make the information not misleading, it is suggested
that these consolidated condensed financial statements be read in
conjunction with the financial statements and the notes included
in the Company's annual report for June 30, 1996, Form 10-K. All
adjustments made during the period ended September 30, 1996 were
of a normal recurring nature.
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
1996 1995
Net income $25,838 $9,939
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 $(6,180) $(22,079)
Weighted average of outstanding
common shares 969,834 969,834
Loss per share $(.01) $(.02)
No computation was made on common stock equivalents outstanding
because earnings per share would be anti-dilutive.
<PAGE>
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.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company has no commitments for
capitalized expenditures. Cash decreased $106,965 as a result of
building up inventory to begin the busy season. Working capital
increased approximately $31,000 for the current quarter.
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.
RESULTS OF OPERATIONS
First Quarter ended September 30, 1996 and 1995
The Company had no unusual transactions for the first quarter
ended September 30, 1996. The Company realized a gross profit
percentage of 24.77% and 23.65% for the first quarter ended
September 30, 1996 and 1995, respectively. The gross profit
improved slightly from a year ago as a result of increased net
sales. Net sales increased $63,569 over the same period a year
ago. No major customers were lost during this period.
Selling, general and administrative expenses remained consistent
compared with the same period a year ago.
Inventories and accounts payable are higher than at June 30, 1996
since the Company is entering their busy cycle of the year.
<PAGE>
PART II. OTHER INFORMATION
CHASE GENERAL CORPORATION AND SUBSIDIARY
Item 3. DEFAULTS UPON SENIOR SECURITIES
a. None
a)
b. The total cumulative preferred stock dividends in
arrears at September 30, 1996 is $5,419,384.
Item 6. EXHIBITS AND REPORTS ON FORM 8.K.
a. Exhibits - None
a)
b. Reports on Form 8-K: There were no reports on Form 8-K
filed during July, August, September, 1996.
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 25, 1996 /s/ Barry M. Yantis
Date Barry M. Yantis
President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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 SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 129,351
<SECURITIES> 0
<RECEIVABLES> 257,498
<ALLOWANCES> 14,447
<INVENTORY> 399,145
<CURRENT-ASSETS> 780,603
<PP&E> 949,567
<DEPRECIATION> 692,427
<TOTAL-ASSETS> 1,037,743
<CURRENT-LIABILITIES> 294,026
<BONDS> 242,980
0
2,361,440
<COMMON> 969,834
<OTHER-SE> (2,830,537)
<TOTAL-LIABILITY-AND-EQUITY> 1,037,743
<SALES> 532,263
<TOTAL-REVENUES> 533,109
<CGS> 400,395
<TOTAL-COSTS> 95,046
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,605
<INTEREST-EXPENSE> 3,790
<INCOME-PRETAX> 32,273
<INCOME-TAX> 6,435
<INCOME-CONTINUING> 25,838
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,838
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
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