SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
Commission File Number 2-5916
CHASE GENERAL CORPORATION
(Exact name of registrant as specified in its Charter)
Missouri 36-2667734
(State of 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)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report.)
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 January 31, 1997
Common Stock, $1 par value 969,834
<PAGE>
CHASE GENERAL CORPORATION
Index
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets - December 31, 1996
(Unaudited) and June 30, 1996 . . . . . . . . . . . . . . .3
Consolidated Condensed Statements of Operations
Six months ended December 31, 1996 and 1995 (Unaudited) . .4
Consolidated Condensed Statements of Operations
Three months ended December 31, 1996 and 1995 (Unaudited) .5
Consolidated Condensed Statements of Cash Flows
Six months ended December 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 . . . . . . . . . . 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . 10
<PAGE>
PART I. FINANCIAL INFORMATION
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, 1996 and June 30, 1996
December 31, June 30,
1996 1996
CURRENT ASSETS (Unaudited)
Cash $ 375,073 $ 236,316
Receivables, net of allowance 130,936 74,754
Inventories:
Finished goods 23,007 51,204
Goods in process 5,251 2,024
Raw materials 106,824 42,189
Packaging materials 126,778 104,565
Prepaid expense 2,445 42,659
Total current assets 770,314 553,711
PROPERTY AND EQUIPMENT - AT COST 948,405 942,011
Less accumulated depreciation 692,900 679,768
Total property and equipment 255,505 262,243
TOTAL ASSETS $1,025,819 $ 815,954
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 95,931 $ 46,943
Notes payable, Series B current
maturities 9,676 9,676
Accrued expense 12,901 41,456
Estimated liability for income
taxes 71,750 -
Total current liabilities 190,258 98,075
LONG-TERM LIABILITIES
Notes payable, Series B, less
current maturities above 208,947 242,980
Total liabilities 399,205 341,055
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) (5,839,382) (5,991,097)
Total stockholders' equity 626,614 474,899
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 1,025,819 $ 815,954
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended
December 31
1996 1995
NET SALES $1,795,953 $1,710,096
COST OF SALES 1,278,330 1,209,011
Gross profit 517,623 501,085
OPERATING EXPENSES
Selling expense 199,808 184,290
General and administrative expense 77,933 77,970
Total operating expenses 277,741 262,260
Income from operations 239,882 238,825
OTHER INCOME (EXPENSE) (6,197) (6,542)
Income before income taxes 239,882 232,283
PROVISION FOR INCOME TAXES 81,970 81,381
NET INCOME $ 151,715 $ 150,902
EARNINGS PER SHARE $ .09 $ .09
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31
1996 1995
NET SALES $1,263,690 $1,241,402
COST OF SALES 877,935 851,157
Gross profit 385,755 390,245
OPERATING EXPENSES
Selling expense 140,010 123,352
General and administrative expense 41,080 43,346
Total operating expenses 181,090 166,698
Income from operations 204,665 223,547
OTHER INCOME (EXPENSE) (3,253) (3,678)
Income before income taxes 201,412 219,869
PROVISION FOR INCOME TAXES 75,535 78,906
NET INCOME $ 125,877 $ 140,963
EARNINGS PER SHARE $ .09 $ .ll
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
December 31
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $151,715 $150,902
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 25,753 20,046
Provision for doubtful accounts 3,210 4,800
Changes in operating assets and
liabilities:
Net increase in accounts
receivable (59,392) (68,409)
Net increase in inventory (61,878) (1,967)
Net decrease in prepaid expenses 40,214 38,305
Net increase (decrease) in
accounts payable 48,988 (21,474)
Net increase in accrued expense
and estimated liability for
income taxes 43,195 37,409
Net cash provided by
operating activities 191,805 159,612
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (19,015) (59,705)
Net cash used in investing
activities (19,015) (59,705)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (34,033) (30,905)
Net cash used in financing
activities (34,033) (30,905)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 138,757 69,002
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 236,316 300,570
CASH AND CASH EQUIVALENTS, END OF
PERIOD $375,073 $369,572
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 condensed consolidated condensed financial statements
contain all adjustments necessary to present fairly Chase General
Corporation's financial position as of December 31, 1996 and June
30, 1996 the results of its operations for the six months and
three months ended December 31, 1996 and 1995, and its cash flows
for the six months ended December 31, 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 December 31, 1996 were
of a normal recurring nature.
NOTE 2 - EARNINGS PER SHARE
The earnings per share was computed on the weighted average of
outstanding common shares as follows:
<TABLE>
Six Months Ended Three Months Ended
December 31 December 31
1996 1995 1996 1995
<CAPTION>
<S> <C> <C> <C> <C>
Net income $151,715 $150,902 $125,877 $140,963
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 $ 87,679 $ 86,866 $ 93,859 $108,945
Weighted average
of outstanding
common shares 969,834 969,834 969,834 969,834
Earnings per
share $ .09 $ .09 $ .09 $ .ll
</TABLE>
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 December 31, 1996, the Company has no commitments for
capitalized expenditures. Cash increased $138,757 during the
current six month period as a result of a profitable busy season
and controlling overhead. Working capital increased
approximately $124,000 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.
RESULTS OF OPERATIONS
Six Months ended December 31, 1996 and 1995
The Company had no unusual transactions for the six months ended
December 31, 1996. The Company realized a gross profit margin of
28.82% for the six months ended December 31, 1996 as compared to
29.3% for the same period ended a year ago. Net sales increased
$86,000 over the same period a year ago as a result of more
brokerage activity.
Selling expenses are $15,500 higher than the same period a year
ago as a result of more aggressive brokerage activity. 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, 1996 were $62,000 higher than at June
30, 1996 due to increased raw materials and packaging materials
on hand. Inventory was increased to take advantage of current
pricing rates than will be available in early spring.
Three Months ended December 31, 1996 and 1995
The Company realized a gross profit margin of 30.52% and 31.44%
for the three months ended December 31, 1996 and 1995,
respectively. Net sales decreased $22,000 over the same period a
year ago. No major customers were lost during this period.
(Continued)
<PAGE>
ITEM 2
CHASE GENERAL CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Three Months ended December 31, 1996 and 1995 (Continued)
An aggressive brokerage activity for three months ended
December 31, 1996 resulted in selling expenses increasing
$17,000. General and administrative expenses remained consistent
compared with the same period a year ago.
Accounts payable are higher than at June 30, 1995 as a result of
increased inventory on hand at December 31, 1996.
<PAGE>
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, 1996 is $5,451,402.
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, December,
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, thereunder duly authorized.
CHASE GENERAL CORPORATION
Registrant
February 13, 1997 /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 DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 375,073
<SECURITIES> 0
<RECEIVABLES> 147,330
<ALLOWANCES> 16,394
<INVENTORY> 261,860
<CURRENT-ASSETS> 770,314
<PP&E> 948,405
<DEPRECIATION> 692,900
<TOTAL-ASSETS> 1,025,819
<CURRENT-LIABILITIES> 190,258
<BONDS> 208,947
0
2,361,440
<COMMON> 969,834
<OTHER-SE> (2,704,660)
<TOTAL-LIABILITY-AND-EQUITY> 1,025,819
<SALES> 1,795,953
<TOTAL-REVENUES> 1,797,336
<CGS> 1,278,330
<TOTAL-COSTS> 274,531
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,210
<INTEREST-EXPENSE> 7,580
<INCOME-PRETAX> 233,685
<INCOME-TAX> 81,970
<INCOME-CONTINUING> 151,715
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151,715
<EPS-PRIMARY> .09
<EPS-DILUTED> 0
</TABLE>
