0001114639-01-500022.txt : 20011018 0001114639-01-500022.hdr.sgml : 20011018 ACCESSION NUMBER: 0001114639-01-500022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010831 FILED AS OF DATE: 20011010 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDEN ENTERPRISES INC CENTRAL INDEX KEY: 0000042228 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 630250005 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04339 FILM NUMBER: 1755498 BUSINESS ADDRESS: STREET 1: 2101 MAGNOLIA AVE STE 212 STREET 2: SOUTH CITY: BIRMINGHAM STATE: AL ZIP: 35205 BUSINESS PHONE: 2053266101 MAIL ADDRESS: STREET 1: 2101 MAGNOLIA AVE SOUTH STREET 2: STE 212 CITY: BIRMINGHAM STATE: AL ZIP: 35205 FORMER COMPANY: FORMER CONFORMED NAME: GOLDEN FLAKE INC DATE OF NAME CHANGE: 19761019 FORMER COMPANY: FORMER CONFORMED NAME: MAGIC CITY FOOD PRODUCTS INC DATE OF NAME CHANGE: 19700805 10-Q 1 tenq.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2001 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________________ to___________________ Commission file number ____________________0-4339___________________________ GOLDEN ENTERPRISES, INC. (Exact name of registrant as specified in its charter) DELAWARE 63-0250005 _____________________________________ _____________________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Suite 208, 2140 11th Avenue, South Birmingham, Alabama 35205 _____________________________________ ____________________________ (205) 933-9300 (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 (or for such shorter 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 _____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of September 30, 2001. Outstanding at Class September 30, 2001 Common Stock, Par Value $0.66 2/3 11,889,619 GOLDEN ENTERPRISES, INC. INDEX Part I. Financial Information Page No. Consolidated Condensed Balance Sheets August 31, 2001 and May 31, 2001 3 Consolidated Condensed Statements of Income 4 Three Months Ended August 31, 2001 and 2000 Consolidated Condensed Statements of Cash Flows - Three Months Ended August 31, 2001 and 2000 5 Notes to Consolidated Condensed Financial Statements 6 Independent Accountant's Report 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8,9 Part II. Other Information 10 PART I. FINANCIAL INFORMATION GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS August 31, May 31, 2001 2001 (Unaudited) (Audited) ASSETS Cash and cash equivalents $352,273 $710,278 Investment Securities $3,457,760 $2,500,147 Receivables, net $8,506,310 $9,101,982 Note Receivable, current $43,252 $42,399 Inventories: Raw material and supplies $1,934,593 $1,883,167 Finished goods $3,572,410 $2,856,593 $5,507,003 $4,739,760 Prepaid expense $2,794,292 $2,275,659 Total current assets $20,660,890 $19,370,225 Property, plant and equipment, net $15,334,204 $14,998,142 Long-term Note Receivable $2,016,498 $2,027,636 Other assets $2,851,290 $2,851,289 $40,862,882 $39,247,292 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Checks outstanding in excess of bank balance $2,138,484 $1,552,461 Accounts payable $3,463,768 $2,924,428 Accrued and deferred income taxes $626,654 $260,196 Other accrued expenses $857,473 $941,360 Salary continuation plan $41,594 $40,773 Note payable- bank, current $317,517 $220,387 Total current liabilities $7,445,490 $5,939,605 Long-Term Liabilities: Salary Continuation Plan $1,908,174 $1,887,050 Note payable- bank, non-current $542,583 $639,713 Total long-term liabilities: $2,450,757 $2,526,763 Deferred income taxes $936,717 $980,998 Stockholder's Equity: Common Stock - $.66 - 2/3 par value: 35,000,000 shares Authorized Issued 13,828,793 shares $9,219,195 $9,219,195 Additional paid-in capital $6,499,554 $6,499,554 Retained earnings $24,702,527 $24,426,345 $40,421,276 $40,145,094 Less: Cost of common shares in treasury (1,892,052 at May 31, 2001 and 1,908,374 shares at (August 31, 2001) -$10,391,358 -$10,345,168 Total stockholders' equity $30,029,918 $29,799,926 Total $40,862,882 $39,247,292 See Accompanying Notes to Consolidated Condensed Financial Statements GOLDEN ENTERPRISES, INC & SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME Three Months Ended AUGUST 31, 2001 2000 (UNAUDITED) REVENUES: Net Sales $28,792,125 $28,909,549 Other operating revenues $186,103 $114,811 Investment income $65,866 $60,793 Total revenues $29,044,094 $29,085,153 COST AND EXPENSES: Cost of sales $13,034,203 $12,726,901 Selling, general and administrative expense $14,385,893 $14,353,887 Interest $12,365 $0 Total costs and expenses $27,432,461 $27,080,788 Income before income taxes $1,611,633 $2,004,365 Income taxes $589,949 $732,254 Net income $1,021,684 $1,272,111 PER SHARE OF COMMON STOCK: Net income $0.09 $0.11 Weighted average number of common shares outstanding 11,927,662 11,998,761 Cash dividend paid per share of common stock $0.0625 $0.06 See Accompanying Notes to Consolidated Condensed Financial Statements. GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED August 31, August 31, 2001 2000 Cash flows from operating activities: Net income $1,021,684 $1,272,111 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation and amortization $625,782 $623,540 Compensation related to stock plan $0 $0 Salary Continuation Benefits $31,835 $30,298 Deferred income taxes -$44,281 -$40,249 Gain on sale of equipment -$157,291 -$78,633 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable $595,672 $648,031 Decrease (increase) in inventories -$767,243 -$532,873 Decrease (increase) in prepaid expenses -$518,633 $113,410 Decrease (increase) in other assets-long term -$1 $1 Increase (decrease) in accounts payable $539,340 $882,722 Increase (decrease) in accrued income taxes $366,458 $607,816 Increase (decrease) in accrued expenses -$83,887 -$351,361 Net cash provided (used) by operating activities $1,609,435 $3,174,813 Cash flows from investing activities: Purchase of property, plant and equipment -$1,059,451 -$473,628 Proceeds from sale of equipment $254,900 $102,279 Cash received from disposal of Nashville Plant & Equipment $0 $0 Net decrease (increase) in investment securities -$957,613 -$930,167 Net cash provided by (used in) Investing activities -$1,762,164 -$1,301,516 Cash flows from financing activities: Payments of current installments of long-term debt -$9,891 -$9,132 Increase in proceeds from bank loan $0 $0 Purchase of treasury stock -$46,190 -$303,248 (Decrease)increase in checks outstanding in excess $586,023 -$566,174 Cash dividend paid -$745,503 -$718,441 Collection of notes receivable $10,285 $0 Net cash used in financing activities -$205,276 -$1,596,995 Net (decrease) increase in cash and cash equivalents -$358,005 $276,302 Cash and cash equivalents at beginning of year $710,278 $835,074 Cash and cash equivalents at end of quarter $352,273 $1,111,376 Supplemental information: Cash paid during the year for: Income taxes $104,139 $23,248 Interest $12,365 $0 See Accompanying Notes to Consolidated Condensed Financial Statements. GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly its financial position as August 31, 2001 and May 31, 2001 and its results of operations for the three months ended August 31, 2001 and 2000 and its cash flows for the three months ended August 31, 2001 and 2000. The accounting policies followed by the Company are set forth in note 1 to the Company's financial statements in the Annual Report to stockholders for fiscal year ended May 31, 2001, which is incorporated by reference in Form 10-K. 2. The results of operations for the three months ended August 31, 2001 and 2000 are not necessarily indicative of the results to be expected for the full year. INDEPENDENT ACCOUNTANT'S REPORT We have reviewed the accompanying interim consolidated balance sheet of Golden Enterprises, Inc. and subsidiary as of August 31, 2001 and the related interim consolidated statements of income and cash flows for the three-month period then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial statements consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. Birmingham, Alabama October 10, 2001 DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Working Capital was $13.4 million at June 1, 2001 and $13.2 million at the end of the first quarter. Net cash provided by operating activities amounted to $1.6 million for the quarter this year compared to $3.2 million for last year's first quarter. Additions to property, plant and equipment, net of disposals, were $0.96 million this year and $0.45 million last year. Cash dividends of $0.75 million were paid during this year's first quarter compared to $0.72 million last year. Cash in the amount of $0.05 million was used to purchase treasury stock this year, and $.30 million was used last year, and $0.96 million of cash was used to increase investment securities this year compared to a net increase in investment securities using $0.93 million of cash last year. The Company's current ratio was 2.78 to 1.00 at August 31, 2001. Operating Results For the three months ended August 31, 2001, total revenues decreased 0.14% from the comparable period in fiscal 2001. This first quarter cost of sales was 45.3% of net sales compared to 44.0% last year. Increases in energy prices adversely affected both manufacturing and distribution costs. Selling, general and administrative expenses were 50.0% of net sales this year and 49.7% last year. The Company invested heavily in the first quarter in advertising and promotional spending in its core market to match competitive activity. The Company's investment income as a percentage of pre-tax income was 4.09% this year compared to 3.03% last year. There was an actual dollar increase in investment income of 8.34%, and pre-tax income decreased 19.59%. The Company's effective tax rate for the first quarter was 36.6% compared to36.5 % for last year's first quarter. Management's Discussion and Analysis of Financial Condition and Results of Operations Market Risk The principal markets risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are interest rates on its investment securities, bank loans, and commodity prices, affecting the cost of its raw materials. The Company's investment securities consist of short-term marketable securities. Presently these are variable rate money market mutual funds, certificates of deposits, and municipal obligations. Its bank loans also carry variable rates. Assuming August 31, 2001 variable rate investment levels, a one-point change in interest rates would impact interest income by $30,041 on an annual basis and interest expense by $8,601. The Company is subject to market risk with respect to commodities because its ability to recover increased costs through higher pricing may be limited by the competitive environment in which it operates. The Company purchases its raw materials on the open market, under contract through brokers and directly from growers. Future contracts have been used occasionally to hedge immaterial amounts of commodity purchases but none are presently being used. Forward-Looking Statements This discussion contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those forward-looking statements. Factors that may cause actual results to differ materially include price competition, industry consolidation, raw material costs and effectiveness of sales and marketing activities, as described in the Company's filings with the Securities and Exchange Commission. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (b) Reports on Form 8-K- There were no reports on form 8-K filed for the three months ended August 31, 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 hereunto duly authorized. GOLDEN ENTERPRISES, INC. (Registrant) Dated: October 10, 2001 ______________________________ John S. Stein Chairman Dated: October 10, 2001 _______________________________ John H. Shannon Vice-President/Controller (Principal Accounting Officer)