UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PERSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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
As of November 1, 1999 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.
<PAGE>
CHASE GENERAL CORPORATION
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
September 30, 1999
(Unaudited) and June 30, 1999. . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Operations -
First quarter ended September 30, 1999 and
1998(Unaudited). . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Condensed Statements of Cash Flows -
First quarter ended September 30, 1999 and
1998(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
<PAGE>
PART I FINANCIAL INFORMATION
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, 1999 and June 30, 1999
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
<S> <C> <C>
CURRENT ASSETS
Cash $ 66,072 $ 206,609
Trade receivables, net of
allowance 257,645 138,959
Inventories:
Finished goods 266,176 73,106
Goods in process 17,910 3,243
Raw materials 66,248 52,930
Packaging materials 84,703 70,878
Prepaid expense 9,232 35,469
Total current assets 767,986 581,194
PROPERTY AND EQUIPMENT - AT COST 1,044,272 1,036,457
Less accumulated depreciation 831,683 818,690
Total property and
equipment 212,589 217,767
TOTAL ASSETS $ 980,575 $ 798,961
</TABLE>
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, June 30,
1998 1998
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 208,746 $ 48,383
Accrued expenses 54,623 47,073
Notes payable, Series B,
current maturities 6,066 6,066
Total current
liabilities 269,435 101,522
LONG-TERM LIABILITIES
Notes payable, Series B,
less current maturities
shown above 156,606 156,606
Total liabilities 426,041 258,128
STOCKHOLDERS' EQUITY
Capital stock issued and
outstanding:
Prior cumulative preferred
stock, $5 par value:
Series A (liquidation
preference
$1,222,500
and $1,215,000
respectively) 500,000 500,000
Series B (liquidation
preference $1,177,500
and $1,170,000
respectively) 500,000 500,000
Cumulative preferred
stock, $20 par value:
Series A (liquidation
preference $2,926,650
and $2,912,017
respectively) 1,170,660 1,170,660
Series B (liquidation
preference $476,950
and $474,565
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) (5,911,462) (5,925,163)
Total stockholders'
equity 554,534 540,833
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 980,575 $ 798,961
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
First Quarter Ended
September 30
1999 1998
<S> <C> <C>
NET SALES $453,521 $391,701
COST OF SALES 337,768 305,048
Gross profit 115,753 86,653
OPERATING EXPENSES
Selling expense 55,981 54,759
General and administrative
expense 41,088 38,194
Total operating expenses 97,069 92,953
Income (loss) from
operations 18,684 (6,300)
OTHER INCOME (EXPENSE) (1,571) (647)
Income (loss)
before income taxes 17,113 (6,947)
PROVISION (CREDIT) FOR INCOME
TAXES 3,412 (1,386)
NET INCOME (LOSS) $ 13,701 $ (5,561)
LOSS PER SHARE $ (.02) $ (.04)
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
First Quarter Ended
September 30
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the quarter $ 13,701 $ (5,561)
Adjustments to reconcile net
income to net cash
used in operating activities:
Depreciation and amortization 12,994 13,467
Provision for doubtful accounts 1,605 1,605
Effects of changes in operating
assets and liabilities:
Trade accounts receivable (120,291) (70,929)
Income tax receivable -- (1,386)
Inventories (234,880) (213,016)
Prepaid expenses 26,237 27,252
Accounts payable 160,363 159,460
Accrued liabilities 7,550 4,773
Net cash used in
operating
activities (132,721) (84,335)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and
equipment (7,816) (6,390)
NET DECREASE IN CASH (140,537) (90,725)
CASH, BEGINNING OF QUARTER 206,609 161,093
CASH, END OF QUARTER $ 66,072 $ 70,368
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
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 19 and 20 (not shown) of its 1999 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, 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 September 30, 1999 and
June 30, 1999 and the results of its operations and its cash
flows for the first quarter ended September 30, 1999 and 1998.
<PAGE>
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:
<TABLE>
<CAPTION>
First Quarter Ended
September 30
1999 1998
<S> <C> <C>
Net income (loss) $ 13,701 $ (5,561)
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
Net loss -
common shareholders $ (18,317) $(37,579)
Weighted average of
outstanding common
shares 969,834 969,834
Loss per share (.02) $ (.04)
</TABLE>
No computation was made on common stock equivalents outstanding
because loss 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.
RESULTS OF OPERATIONS
First Quarter ended September 30, 1999 and 1998
Sales - The Company had no unusual transactions for the first
quarter ended September 30, 1999. The Company realized a gross
profit percentage of 25.52% and 22.12% for the first quarter
ended September 30, 1999 and 1998, respectively. Consolidated
net sales for the quarter ended September 30, 1999 of $453,521,
were 16% above the $391,701 in 1998's first quarter. No major
customers were lost during the current quarter. The 1999
improved gross margin is due to a volume increase in sales.
Expenses - Selling, general and administrative were 21.4% of
sales in the quarter ended September 30 1999 compared to 23.73%
in the first quarter of 1998, which is consistent with last year.
Inventories at September 30, 1999 are $235,000 higher than at
June 30, 1999 since the Company is presently in their fall busy
season. In addition accounts payable is $160,363 higher at
September 30, 1999 compared to June 30, 1999 which also reflects
the entrance into the Company's fall busy season.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, the Company has no commitments for
capitalized expenditures. Cash decreased $140,537 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 $5.8
million cumulative preferred stock dividends in arrears.
<PAGE>
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, 1999 are $5,803,600.
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,
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
11/16/99 /s/ Barry M. Yantis
Date Barry M. Yantis
President and Chief
Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 66,072
<SECURITIES> 0
<RECEIVABLES> 266,832
<ALLOWANCES> 9187
<INVENTORY> 435,037
<CURRENT-ASSETS> 767,986
<PP&E> 1,044,272
<DEPRECIATION> 831,683
<TOTAL-ASSETS> 980,575
<CURRENT-LIABILITIES> 269,435
<BONDS> 156,606
0
2,361,440
<COMMON> 969,834
<OTHER-SE> (2,776,740)
<TOTAL-LIABILITY-AND-EQUITY> 980,575
<SALES> 453,521
<TOTAL-REVENUES> 454,390
<CGS> 337,768
<TOTAL-COSTS> 95,464
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1605
<INTEREST-EXPENSE> 2440
<INCOME-PRETAX> 17,113
<INCOME-TAX> 3412
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,701
<EPS-BASIC> (.02)
<EPS-DILUTED> 0
</TABLE>
