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, 2001
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Commission File Number 2-5916
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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)
Telephone: (816) 279-1625
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 October 31, 2001 there were 969,834 shares outstanding of the Registrant's
($1.00 par value) common stock.
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CHASE GENERAL CORPORATION
Index
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - September 30, 2001
(Unaudited) and June 30, 2001 .................................... 3
Consolidated Condensed Statements of Operations -
Three months ended September 30, 2001 and 2000 (Unaudited) ....... 5
Consolidated Condensed Statements of Cash Flows -
Three months ended September 30, 2001 and 2000 (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 4. Submission of Matters to a Vote of Security Holders .............. 9
Item 6. Exhibits and Reports on Form 8-K ................................. 9
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, 2001 and June 30, 2001
ASSETS
September 30, June 30,
2001 2001
------------ ----------
(Unaudited)
CURRENT ASSETS
Cash $ 71,837 $ 117,114
Trade receivables, net of allowance 156,791 100,494
Income tax receivable 13,053 7,053
Inventories:
Finished goods 207,770 73,138
Goods in process 12,910 1,943
Raw materials 70,250 80,592
Packaging materials 96,911 64,536
Prepaid expense 8,714 34,606
Prepaid income taxes 11,220 11,220
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Total current assets 649,456 490,696
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PROPERTY AND EQUIPMENT - AT COST 1,121,276 1,117,639
Less accumulated depreciation 905,451 893,434
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Total property and equipment 215,825 224,205
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TOTAL ASSETS $ 865,281 $ 714,901
========== ==========
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LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, June 30,
2001 2001
----------- -----------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 209,063 $ 46,002
Accrued expenses 45,497 35,301
----------- -----------
Total current liabilities 254,560 81,303
LONG-TERM LIABILITIES
Notes payable, Series B 77,672 77,672
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Total liabilities 332,232 158,975
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STOCKHOLDERS' EQUITY
Capital stock issued and outstanding:
Prior cumulative preferred stock, $5 par value:
Series A (liquidation preference $1,282,500
and $1,275,000 respectively) 500,000 500,000
Series B (liquidation preference $1,237,500
and $1,230,000 respectively) 500,000 500,000
Cumulative preferred stock, $20 par value
Series A (liquidation preference $3,043,717
and $3,029,083 respectively) 1,170,660 1,170,660
Series B (liquidation preference $496,027
and $493,643 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) (5,932,947) (5,910,070)
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Total stockholders' equity 533,049 555,926
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 865,281 $ 714,901
=========== ===========
The accompanying notes are an integral part of these
consolidated condensed financial statements.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30
------------------------
2001 2000
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NET SALES $ 311,977 $ 452,953
COST OF SALES 241,638 349,109
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Gross profit on sales 70,339 103,844
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OPERATING EXPENSES
Selling expense 49,258 56,716
General and administrative expense 49,500 48,408
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Total operating expenses 98,758 105,124
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Net loss from operations (28,419) (1,280)
OTHER INCOME (EXPENSE) (457) (1,079)
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Net loss before income taxes (28,876) (2,359)
CREDIT FOR INCOME TAXES (6,000) (470)
--------- ---------
NET LOSS $ (22,876) $ (1,889)
========= =========
LOSS PER SHARE $ (.06) $ (.03)
========= =========
The accompanying notes are an integral part of these
consolidated condensed financial statements.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 30
------------------------
2001 2000
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (22,876) $ (1,889)
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 12,016 13,052
Provision for bad debts 1,605 1,605
Effects of changes in operating assets and liabilities:
Receivables (63,902) (160,717)
Inventories (167,632) (221,209)
Prepaid expense 25,892 26,414
Accounts payable 163,061 249,538
Accrued expenses 10,196 9,771
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Net cash used in operating activities (41,640) (83,435)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (3,637) (444)
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NET DECREASE IN CASH (45,277) (83,879)
CASH, BEGINNING OF PERIOD 117,114 146,779
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CASH, END OF PERIOD $ 71,837 $ 62,900
========= =========
The accompanying notes are an integral part of these
consolidated condensed financial statements.
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CHASE GENERAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim consolidated
condensed financial statements include all adjustments (consisting only of
normal adjustments) necessary for a fair presentation of the financial position
of Chase General Corporation as of September 30, 2001 and June 30, 2001 and the
results of its operations for the three months ended September 30, 2001 and
2000, and its cash flows for the three months ended September 30, 2001 and 2000.
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 2001 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 three months ended September 30,
2001.
NOTE 2 - EARNINGS PER SHARE
The earnings per share was computed on the weighted average of outstanding
common shares as follows:
Three Months Ended
September 30
------------------------
2001 2000
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Net income (loss) $ (22,876) $ (1,889)
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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
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Total dividend requirements 32,018 32,018
--------- ---------
Net loss common shareholders $ (54,894) $ (33,907)
========= =========
Weighted average of outstanding common shares 969,834 969,834
========= =========
Loss per share $ (.06) $ (.03)
========= =========
No computation was made on common stock equivalents outstanding because loss per
share would be anti-dilutive.
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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
Three Months Ended September 30, 2001 and 2000
- ----------------------------------------------
Sales:
The Company's net sales of $311,977 for period ended September 30, 2001
decreased 31% over net sales of $452,953 for the three months ended September
30, 2000. The decrease in sales was due to not extending a promotion to a major
customer for the current period, as well as approximately $35,000 of sale orders
received last year that were not repeated this year. Additionally, one non-major
customer had a group of vendors go out of business since last year which reduced
current year sales. Gross profit on sales for the three months ended September
30, 2001 and 2000 was consistent at 23%.
Selling expenses decreased 13% compared to selling expenses for the three months
ended September 30, 2000 as a result of reduced commissions, based on sales
decreasing. General and administrative expenses increased 2% compared to these
expenses for the three months ended September 30, 2000, as a result of website
maintenance costs.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2001, the Company has no commitments for capitalized
expenditures. Cash decreased $45,277 during the current three month period as a
result of seasonal build-up of inventories for the busy season.
Inventories increased $167,632 for this three month period ending September 30,
2001 as a part of the Company's normal seasonal build-up.
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PART II. OTHER INFORMATION
CHASE GENERAL CORPORATION AND SUBSIDIARY
Item 3. DEFAULTS UPON SENIOR SECURITIES
a. None
b. The total cumulative preferred stock dividends contingency at
September 30, 2001 is $6,059,744
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a. The annual meeting of shareholders is scheduled for January 14,
2002.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits - None required
b. Reports on Form 8-K: There were no reports on Form 8-K filed during
July, August and September, 2001.
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
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Registrant
___________________ ________________________________________
Date Barry M. Yantis
President and Chief Financial Officer
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