U. S. Securities and Exchange Commission
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[ X ]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______________ to _______________
Commission File Number 0-15910
Control Chief Holdings, Inc.
(Exact name of small business issuer as specified in its charter)
New York 16-0955704
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 141, 200 Williams Street, Bradford, Pennsylvania 16701
(Address of principal executive offices)
(814) 368-4132
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of issuer's Common Stock, par
value $.50 per share, as of January 31, 1999 was 999,739 shares.
Transitional Small Business Format (Check one): Yes [ ] No [ X ]
Control Chief Holdings, Inc. and Subsidiary
Table of Contents
Part I Financial Information
Item 1 Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations and Retained Earnings
Consolidated Statements of Cash Flows
Notes to Financial Statements
Item 2 Management's Discussion and Analysis or Plan of Operation
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signatures
<TABLE>
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
Control Chief Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
<CAPTION>
December 31, June 30,
1998 1998
(Unaudited)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 604,535 $ 22,067
Accounts receivables, less allowance
for doubtful accounts of $50,057
and $50,000 1,438,755 1,624,073
Inventories 1,463,469 1,639,008
Other current assets 92,755 284,405
---------- ----------
Total current assets 3,599,514 3,569,553
Equipment and leasehold improvements, net 695,467 668,818
Other assets 8,073 8,073
---------- ----------
Total assets $4,303,054 $4,246,444
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Short-term debt $ - $150,000
Current maturities of long-term debt 170,755 170,755
Accounts payable trade 482,935 547,266
Accrued items 487,276 484,082
---------- ----------
Total current liabilities 1,140,966 1,352,103
---------- ----------
Long-term debt, less current maturities 176,958 260,317
---------- ----------
Deferred income taxes 29,164 29,664
---------- ----------
Stockholders' equity
Common stock, $.50 par value, authorized
5,000,000 shares, issued 1,014,095 shares,
of which 14,356 shares at December 31,
1998 and 9,263 shares at June 30, 1998
were held in the treasury 507,048 507,048
Capital in excess of par value 1,120,586 1,120,586
Retained earnings 1,389,651 1,013,877
---------- -----------
3,017,285 2,641,511
Less treasury shares at cost 61,319 37,151
---------- ----------
Total stockholders' equity 2,955,966 2,604,360
---------- ----------
$4,303,054 $4,246,444
========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
Control Chief Holdings, Inc. and Subsidiary
Consolidated Statements of Operations and Retained Earnings
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues
Net sales $2,239,188 $2,097,402 $4,620,715 $4,022,967
Gain on sale of
land and building - - - 127,088
Other income 7,240 13,262 7,640 35,564
--------- --------- --------- ---------
Total revenues 2,246,428 2,110,664 4,628,355 4,185,619
--------- --------- --------- ---------
Costs and expenses
Cost of sales 1,120,394 1,109,971 2,535,128 2,186,120
Selling general
and administrative 633,451 584,923 1,210,515 1,144,513
Research and
development 66,162 40,268 140,428 107,416
Interest expense 8,053 12,213 17,923 28,846
--------- --------- --------- ---------
Total costs
and expenses 1,828,060 1,747,375 3,903,994 3,466,895
--------- --------- --------- ---------
Earnings before
income taxes 418,368 363,289 724,361 718,724
--------- --------- --------- ---------
Federal and state
income taxes
Currently payable 173,000 154,700 299,100 305,200
Deferred (200) (1,600) (500) (3,200)
--------- --------- --------- ---------
172,800 153,100 298,600 302,000
--------- --------- --------- ---------
Net earnings 245,568 210,189 425,761 416,724
Retained earnings at
beginning of period 1,144,083 647,196 1,013,877 481,239
Cash dividends paid - - (49,987) (40,578)
---------- --------- ---------- ---------
Retained earnings at
end of period $1,389,651 $857,385 $1,389,651 $857,385
========== ========= ========== =========
Basic earnings
per common share $ .25 $ .21 $ .43 $ .41
Dividends paid
per common share $ - $ - $ .05 $ .04
Weighted average number
of common shares
outstanding 999,739 1,014,441 1,000,645 1,014,441
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
Control Chief Holdings, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Six Months Ended
December 31,
1998 1997
<S> <C> <C>
Cash flows from operating activities
Net earnings $425,761 $416,724
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Depreciation and amortization 43,598 46,446
Deferred income taxes (500) (3,200)
Gain on sale of land and building - (127,088)
Change in assets and liabilities:
(Increase) decrease in receivables 185,318 (210,418)
(Increase) decrease in inventories 175,539 (299,288)
Decrease in other current assets 191,650 94,862
Increase (decrease) in accounts
payable and accruals (61,137) 364,012
--------- ---------
Net cash provided by (used in)
operating activities 960,229 282,050
--------- ---------
Cash flows from investing activities
Proceeds from sale of land and building - 150,000
Purchase of equipment
and leasehold improvements (70,247) (96,033)
Receipts of principal on note receivable - 792
--------- ---------
Net cash provided by (used in)
investing activities (70,247) 54,759
--------- ---------
Cash flows from financing activities
Net repayments of short-term debt (150,000) (245,000)
Net repayments of long-term debt (83,359) (100,708)
Purchase of treasury stock (24,168) -
Dividends paid (49,987) (40,578)
--------- ---------
Net cash used in financing activities (307,514) (386,286)
--------- ---------
Net increase (decrease) in cash 582,468 (49,477)
Cash at beginning of period 22,067 132,007
--------- ---------
Cash at end of period $604,535 $82,530
========= =========
Cash paid during the period for:
Interest $6,010 $28,846
Income taxes 797 175,131
<FN>
See accompanying notes to financial statements.
</TABLE>
Control Chief Holdings, Inc. and Subsidiary
Notes to Financial Statements
1. Basis of Presentation
The financial statements include the accounts of the Control Chief
Holdings, Inc. and its wholly-owned subsidiary, Control Chief
Corporation, (the "Company"). All significant intercompany accounts are
eliminated upon consolidation. The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements, the disclosure of contingent assets and liabilities, and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from the estimates. In the opinion
of management, all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the financial
information for the periods indicated, have been included. Interim
results are not necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form
10-QSB, and do not contain certain information included in the
Company's annual financial statements and notes. Accordingly, these
statements should be read in conjunction with the consolidated
financial statements and notes thereto appearing in the annual report
of the Company on Form 10-KSB for the fiscal year ended June 30, 1998.
2. Earnings Per Common Share
In 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 128, "Earnings per Share." Statement No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic
and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share is very
similar to the previously defined fully diluted earnings per share.
Although the Company has issued potentially dilutive common stock
equivalents in the form of stock options, the dilutive earnings per
share amounts would be the same as basic earnings per common share.
3. Cash Dividends Paid
The Board of Directors of the Company approved a cash dividend
totaling $49,987 ($.05 per share) payable on September 25, 1998 to
holders of record at the close of business on September 7, 1998.
<PAGE>
Part I - Financial Information
Item 2. Management's Discussion and Analysis or Plan of Operations
The following discussion and analysis may be understood more fully by
reference to the consolidated financial statements, notes to the
consolidated financial statements, and management's discussion and
analysis or plan of operations contained in the Control Chief Holdings,
Inc. and Subsidiary annual report on Form 10-KSB for the fiscal year
ended June 30, 1998.
General
Control Chief Holdings, Inc. ("the Company") functions as a holding
company and is the sole shareholder of Control Chief Corporation
("Control Chief"). Control Chief designs, engineers and produces remote
control devices for material handling equipment and other industrial
applications. These controls use either radio or infrared waves as
communications media to transmit control data from portable units to
receivers mounted on various types of apparatus. Control Chief was
among the first in its industry to apply infrared technologies to
industrial remote control applications. All models of products are
microprocessor-based systems. Remote controls provide the customer a
cost-effective means to achieve greater operational safety and
flexibility. These devices are utilized worldwide in concert with
various material handling equipment, industrial machines, process
equipment and mobile apparatus. Control Chief markets its products
through a network of independent manufacturers' representatives located
in key geographical centers throughout the United States, Canada, and
Central and South America. Additionally, products are sold through
direct efforts, distributors, private labeling agreements and
licensees.
Forward-Looking Information
Management's Discussion and Analysis or Plan of Operation includes
certain forward-looking statements which reflect management's current
views with respect to future operating performance, ongoing cash
requirements, and the Year 2000 Issue. The words "believe," "expect,"
"anticipate" and similar expressions identify forward-looking
statements. These forward-looking statements are subject to certain
risks and uncertainties which could cause actual results to differ
materially from historical results or those anticipated. Factors that
could cause or contribute to such differences include those discussed
elsewhere herein. Readers are cautioned not to place undue reliance on
these forward-looking statements.
Risk Factors That May Affect Future Results
The Company's results of operations may be affected in the future by a
variety of factors including: competitive pricing pressures, new
product offerings by the Company and competitors, new technologies,
product cost changes, changes in the overall economic climate,
availability of raw materials, and product mix. The Company experiences
competition for its remote controls from several suppliers of similar
products. Throughout the world there are numerous remote control
manufacturers. The Company competes principally on the basis of
technology and quality. Worldwide competition is extremely price
conscious with many companies entering and exiting the market. While
significant market shares have not fluctuated with the traditional
suppliers to the market, new entrants have depressed prices. The
Company believes its products are competitively priced taking into
consideration the Company's reputation as a long time, high-quality
manufacturer of reliable, durable state of the art devices.
Results of Operations
The following table sets forth certain financial data, as a percentage
of total revenues, for the three and six month periods ended December
31, 1998 and 1997.
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
Revenues
Net Sales 99.7% 99.4% 99.8% 96.2%
Gain on sale of land
and building - - - 3.0%
Other income 0.3% 0.6% 0.2% 0.8%
------ ------ ------ ------
Total revenues 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------
Costs and expenses
Cost of products sold 49.9% 52.6% 54.8% 52.2%
Selling, general and
administrative 28.2% 27.7% 26.1% 27.3%
Research and development 2.9% 1.9% 3.0% 2.6%
Interest expense 0.4% 0.6% 0.4% 0.7%
------ ------ ------ ------
Total costs and expenses 81.4% 82.8% 84.3% 82.8%
------ ------ ------ ------
Earnings before income taxes 18.6% 17.2% 15.7% 17.2%
Provision for income taxes 7.7% 7.2% 6.5% 7.2%
------ ------ ------ ------
Net earnings 10.9% 10.0% 9.2% 10.0%
====== ====== ====== ======
NET SALES
Net sales increased to $2,239,188 for the three months ended December
1998 from $2,097,402 for the three months ended December 1997, an
increase of 6.8%. For the six-month period ended December 1998, net
sales increased $597,748 or 14.9% as compared to the six-month period
for the prior year. Such increases reflect the continued demand for the
Company's products in addition to increases in its spare parts sales
and services.
COST OF PRODUCTS SOLD AND GROSS MARGIN
Cost of products sold increased by $10,423 for the three months ended
December 1998 as compared to the same period last year. For the six-month
period ended December 1998, cost of products sold increased by
$349,008 or 16.0% as compared to the six-month period last year. This
overall increase in the cost of products sold is consistent with the
overall increase in net sales for the comparable periods. Gross margin
increased for the three months ended December 1998 to $1,118,794 from
$987,431 for the three months ended December 1997. The gross margin
percentage increased by 2.9% from 47.1% in 1997 to 50.0% in 1998. For
the six -month period ended December 1998, the gross margin percentage
decreased by 0.6% from 45.7% in 1997 to 45.1% in 1998. The change in
the gross margin percentage is attributable to the product mix and
price competition.
WARRANTIES
The Company's products are generally under warranty against defects in
material and workmanship, the duration of which generally does not extend
beyond one year. Actual experience has indicated that the amount of
warranty expense has not fluctuated significantly, and the estimated
future warranty obligation relating to the Company's products would
not have a material effect on the Company's financial position or
results of operations. Therefore, the Company has charged warranty
expense against earnings as the expense is incurred. Because the Company
has not accrued for warranty expense, it will incur expenses associated
with prior sales which are not presently reflected in the Company's
financial statements. If the Company were to have accrued for
estimated warranty expense instead of deducting the current period
expenses, the difference would have been less than 1% of the net
earnings of the Company for the periods reported. Warranty costs of
approximately $17,100 and $15,600 for the three months ended
December 31, 1998 and 1997, respectively, are included in the
costs of products sold. Warranty costs of approximately $26,200 and
$28,200 for the six months ended December 31, 1998 and 1997,
respectively, are also included in the costs of products sold during
these periods.
SELLING, GENERAL AND ADMINISTRATIVE COSTS
Selling, general and administrative costs increased by $48,528 or 8.3%
for the three months ended December 1998 as compared to the same period
last year. These costs increased as a percentage of net sales from
27.9% in 1997 to 28.3% in 1998. For the six-month period ended December
1998, selling, general and administrative costs increased by $66,002 or
5.08% as compared to the same six-month period last year. Overall
however, for the six month periods ended December 31, selling, general
and administrative costs decreased as a percentage of net sales from
28.4% in 1997 to 26.2% in 1998.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs increased by $25,894 or 64.3% for the
three months ended December 1998 as compared to the same period last
year. For the six-month period ended December 1998, research and
development costs increased by $33,012 or 30.7% as compared to the same
six-month period last year. This increase reflects the Company's
continuing commitment to invest funds in research and development to
stay abreast of technological changes, enhance its current products and
develop new product lines. It is the Company's policy not to release
public information relating to its research and development programs
until new or enhanced products are ready for the market. The premature
public notification of product development, in the opinion of
management, stands to potentially reduce the anticipated return on its
research and development investment by notifying competitors of a
significant portion of the Company's marketing strategy.
INTEREST EXPENSE
Interest expense decreased by $4,160 or 34.1% for the three months
ended December 1998 as compared to the same period last year. Interest
expense decreased by $10,923 or 37.9% for the six months ended December
1998. This decrease reflects the overall reduction in the Company's
short-term debt due to an improvement in the Company's working capital
and cash flow, and the decrease in long-term debt due to normal
principal payments.
EARNINGS BEFORE INCOME TAXES
Earnings before income taxes were $418,368 for the three months ended
December 1998 as compared to $363,289 for the three months ended
December 1997, representing an increase of $55,079 or 15.2%. Earnings
before income taxes were $724,361 for the six months ended December
1998 as compared to $718,724 for the six months ended September 1997.
Included in the pretax earnings for 1997 is a gain in the amount of
$127,088 from the sale, in July 1997, of the Company's facility located
in Lewis Run, Pennsylvania. Excluding the gain, earnings before income
taxes reflect and increase of $132,725, or 22.4%, for the six months
ended December 1998 over 1997.
INCOME TAXES
The Company's effective income tax rate was 41.3% and 41.2% for the
three and six month periods ended December 1998 as compared to 42.1%
and 42.0% for the three and six-month periods ended December 1997.
NET EARNINGS
Overall earnings, after income taxes, were $245,568 and $425,761 for
the three and six-month periods ended December 1998 as compared to
earnings, after income taxes, of $210,189 and $416,724 for the three
and six-month periods ended December 1997.
EARNINGS PER COMMON SHARE
The Company's earnings per common share were $.25 and $.43 for the
three and six-month periods ended December 1998, which represents an
increase of $.04 and $.02 per common share over the three and six-month
periods ended December 1997.
Liquidity, Capital Resources and Financial Condition
The Company has a $750,000 line of credit with National City Bank of
Pennsylvania (the "Bank"). The revolving credit line is collateralized
by substantially all of the assets of the Company, with a variable
interest rate equal to the Bank's prevailing prime rate. The line of
credit is used to finance accounts receivable and inventory of the
Company. At December 31, 1998, there was no borrowing outstanding under
this financing arrangement. The line of credit is subject to an annual
review by the Bank each November.
In addition to the line of credit, the Company has a commercial term
loan, dated January 1997, in the original amount of $650,000 with
National City Bank. The term loan bears interest at 8.47% and is being
repaid in forty-eight (48) monthly principal and interest installments
of $16,050. At December 31, 1998, a total of $338,549 was outstanding
under this term loan.
The Company also has a term loan with GMAC Financing. The balance
outstanding at December 31, 1998 was $9,1647.
The Company's liquidity improved during the period. At December 31,
1998, the Company had net working capital of $2,458,548, compared to
$2,217,450 at June 30, 1998. The Company's current ratio also improved
during the first six months of fiscal 1999, with current assets at 3.15
times current liabilities at December 31, 1998, compared to 2.64 at
June 30, 1998.
During the six-month period ended December 1998, the Company's cash
expenditures for equipment totaled $70,247. In addition, during the
first six months of fiscal 1999, the Company repaid $233,359 of bank
indebtedness, paid cash dividends totaling $49,987, and purchased
common stock for its treasury in the amount of $24,168.
Current financial resources, including working capital and the existing
line of credit, and anticipated funds from operations are expected to
be sufficient to meet cash requirements throughout fiscal 1999,
including scheduled long-term debt repayment and planned capital
expenditures. There can be no assurance, however, that unplanned
capital replacement or other future events will not require the Company
to seek additional debt or equity financing and, if so required, that
it will be available on terms acceptable to the Company.
During the six months ended December 1998, the Company's net cash
provided by operations was $960,229 as compared to net cash provided by
operations of $282,489 for the six months ended December 1997.
Impact of Year 2000 Issue
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. As a
result, computer programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing
disruptions of operations, including among other things, a temporary
inability to process transactions, prepare invoices, or engage in
similar normal business activities.
The Company's computer and communications systems group ("the group")
is coordinating the Company's identification and implementation of
changes to computer hardware and software applications to insure Year
2000 compliance, and the integrity and reliability of the Company's
informational, operational and manufacturing systems. The group has
also started to coordinate the identification of potential Year 2000
problems related to the Company's non-informational technology systems
and material third parties.
The Company is in the final phase of implementing a new company-wide
information system that will address the great majority of the
Company's Year 2000 internal operational issues. The new computer
system is replacing the Company's mainframe computer. The Company is
still on its schedule to retire the system in the first quarter of
1999. Written assurances have been obtained from the software
suppliers that the new systems that will replace the majority of the
Company's information technology systems ("IT") in its internal
operations, including applications used in manufacturing, payroll
processing, client order processing, inventory management, financial
business and various administrative functions, are Year 2000 compliant.
The costs of these upgrades and conversions, approximately $139,000 to
date and estimated to total approximately $165,000 in the aggregate,
are not included in the Company's current or future estimated Year 2000
costs as these upgrades and conversions were planned prior to its Year
2000 compliance plan and their implementation has not been accelerated
because of the Year 2000 problem.
The Company has employed the services of an outside consulting firm to
provide an abbreviated Year 2000 assessment of its IT systems. Of the
number of personal computers tested, only 61% of these were compliant.
The group has reviewed the assessment and has determined that the
majority of the noncompliant hardware will either not affect internal
operations or will be scheduled for replacement before year-end. It is
estimated that the assessment of IT systems is approximately 95%
complete and that costs to complete the final assessment, remediation
and testing of these IT systems will be immaterial with respect to the
Company's overall operating costs. The Company estimates that the cost
of this phase of its plan to date has not exceeded $10,000.
Assessment of the Company's non-informational technology systems is
approximately 50% complete with final assessment plans and any
appropriate remediation and testing on schedule to be completed by June
30, 1999. The group has reviewed and tested the embedded chips and
microprocessors in the products the Company manufactures and has
determined that these do not create a significant Year 2000 problem.
The group has not concluded its final assessment of embedded chips in
its manufacturing equipment and of other non-informational technology
systems, but does not anticipate any major date sensitive problems. It
is estimated that the cost to date of this phase of its compliance plan
has not exceeded $2,000. Further, the Company does not expect to incur
material costs to complete this phase of its plan.
The group is only approximately 25% complete as to the assessment of
compliance of material third parties. The group has received written
assurance from its financial institution that its systems will be Year
2000 compliant. The group has identified its other material third
parties, such as customers, major suppliers, manufacturers'
representatives, utility and communication companies, that if not Year
2000 compliant, might have a material adverse effect on the Company's
manufacturing business, results of operations and financial position.
The group is completing a questionnaire to survey those critical third
parties as to their Year 2000 readiness. This survey is scheduled for
completion by the end of the first quarter of calendar year 1999. In
addition, alternative suppliers will be identified for those vendors
not expected to be Year 2000 compliant. Costs to date have been
immaterial with respect to the Company's overall operating
expenditures. Additional costs to complete this phase are not expected
to exceed approximately $5,000.
Should the Company have a systems failure due to the century change, or
a material third party with whom the Company deals with or relies upon
to deliver materials for manufacturing be unable to assure Year 2000
compliance or timely supply materials, the Company believes that the
most significant impact would likely be a delay of thirty to ninety
days beyond scheduled delivery dates of its custom products. The
Company anticipates that it would be able to support its spare parts
and repair business for approximately thirty days without major
interruptions based upon historical demand and inventory quantities.
The group has not yet prepared a formal contingency plan with respect
to the Year 2000 problem. The group intends to complete a formal
contingency plan to present to the Company's directors and management
during the second calendar quarter of 1999.
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
a) An annual meeting of the Shareholders of the Company was held on
November 13, 1998
b) Election of five Directors.
Director For Withhold
Douglas S. Bell 892,393 312
Christopher G. Hauser 892,393 312
Arvid R. Nelson 892,393 312
C. Lawrence Shields 892,393 312
N. James Sekel 892,393 312
c) Approve appointment of Diefenbach Delio Kearney and DeDionisio
as independent certified public accountants of the Company.
For Against Abstain
723,266 156 169,283
Item 5. Other information
SHAREHOLDER PROPOSALS - DEADLINE FOR INCLUSION IN PROXY MATERIALS
As set forth in the Company's Proxy Statement for the 1999 Annual
Meeting of Stockholders, any proposal by a stockholder of the Company
intended to be presented at the 1999 Annual Meeting of Stockholders
must be received by the Company on or before June 14, 1999 to be
included in the proxy materials of the Company relating to such
meeting.
SHAREHOLDER PROPOSALS - DISCRETIONARY VOTING OF PROXIES
In accordance with recent amendments to Rule 14a-4 under the Securities
Exchange Act of 1934, if notice of a proposal by a shareholder of the
Company intended to be presented at the 1999 Annual Meeting of
Shareholders is received by the Company after June 14, 1999, the
persons authorized under the Company's management proxies may exercise
discretionary authority to vote or act on such proposal if the proposal
is raised at the 1999 Annual Meeting of Shareholders.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 27 Financial Data Schedule.
b) The Company filed no Reports on Forms 8-K during the reporting
period.
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Control Chief Holdings, Inc.
(Registrant)
Date: February 15, 1999 By:\s\ Douglas S. Bell
Douglas S. Bell
Chairman of the Board,
Chief Executive Officer and
President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC
Form 10-QSB and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 604,535
<SECURITIES> 0
<RECEIVABLES> 1,488,812
<ALLOWANCES> 50,057
<INVENTORY> 1,463,469
<CURRENT-ASSETS> 3,599,514
<PP&E> 1,943,197
<DEPRECIATION> 1,247,730
<TOTAL-ASSETS> 4,303,054
<CURRENT-LIABILITIES> 1,140,966
<BONDS> 0
0
0
<COMMON> 507,048
<OTHER-SE> 2,448,918
<TOTAL-LIABILITY-AND-EQUITY> 4,303,054
<SALES> 4,620,715
<TOTAL-REVENUES> 4,628,355
<CGS> 2,535,128
<TOTAL-COSTS> 2,535,128
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