10-Q 1 a5584941.txt GOLDEN ENTERPRISES, INC. 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly (twenty-six weeks) period ended November 30, 2007 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.) One Golden Flake Drive Birmingham, Alabama 35205 --------------------------------- ------------------------ (Address of Principle Executive (Zip Code) Offices) (205) 458-7316 (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 by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated X ----- ----- ----- Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No (X) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of December 31, 2007 Outstanding at Class December 31, 2007 ----- ----------------- Common Stock, Par Value $0.66 11,816,752 2/3 GOLDEN ENTERPRISES, INC. INDEX Part I. FINANCIAL INFORMATION Page No. Item 1 Financial Statements (unaudited) Condensed Consolidated Balance Sheets November 30, 2007 (unaudited) and June 1, 2007 3 Condensed Consolidated Statements of Income (unaudited) Thirteen Weeks and Twenty-Six Weeks Ended November 30, 2007 and December 1, 2006 4 Condensed Consolidated Statements of Cash Flows (unaudited)- Twenty-Six Weeks Ended November 30, 2007 and December 1, 2006 5 Notes to Condensed Consolidated Financial Statements (unaudited) 7 Report of Independent Registered Public Accounting Firm 9 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3 Quantitative and Qualitative Disclosure About Market Risk 13 Item 4 Controls and Procedures 14 Part II. OTHER INFORMATION 14 Item 1 Legal Proceedings 14 Item 1-A Risk Factors 14 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 14 Item 3 Defaults Upon Senior Securities 15 Item 4 Submission of Matters to a Vote of Security Holders 15 Item 5 Other Information 16 Item 6 Exhibits 16 2
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) November 30, June 1, 2007 2007 ------------ ---------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 657,033 $ 706,852 Receivables, net 7,652,396 8,458,427 Notes receivable, current 60,490 58,126 Inventories: Raw materials and supplies 1,742,620 1,340,389 Finished goods 3,019,417 3,035,285 ------------ ---------------- 4,762,037 4,375,674 ------------ ---------------- Prepaid expenses 1,765,583 1,622,900 Deferred income taxes 583,179 583,179 ------------ ---------------- Total current assets 15,480,718 15,805,158 ------------ ---------------- PROPERTY, PLANT AND EQUIPMENT 12,771,644 12,956,633 OTHER ASSETS Long-term note receivable 1,627,779 1,658,630 Other assets 2,860,626 2,905,007 ------------ ---------------- Total $ 32,740,767 $ 33,325,428 ============ ================ CURRENT LIABILITIES Checks outstanding in excess of bank balances $ 1,615,637 $ 1,385,663 Accounts payable 3,446,766 3,760,499 Accrued income taxes 171,685 318,198 Other accrued expenses 4,574,149 5,060,758 Salary continuation plan 126,834 121,877 Note payable - current - 270,625 Line of credit outstanding 812,562 622,950 ------------ ---------------- Total current liabilities 10,747,633 11,540,570 ------------ ---------------- LONG-TERM LIABILITIES Salary continuation plan 1,541,876 1,582,437 Deferred income taxes 752,298 752,298 ------------ ---------------- Total long-term liabilities 2,294,174 2,334,735 ------------ ---------------- 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 6,497,954 6,497,954 Retained earnings 14,708,558 14,410,568 ------------ ---------------- 30,425,707 30,127,717 Less: Cost of common shares in treasury (2,009,695 at November 30, 2007 and 1,993,463 at June 1, 2007) (10,726,747) (10,677,594) ------------ ---------------- Total stockholder's equity 19,698,960 19,450,123 ------------ ---------------- Total $ 32,740,767 $ 33,325,428 ============ ================
See Accompanying Notes to Condensed Consolidated Financial Statements 3 GOLDEN ENTERPRISES, INC. AND SUDSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Thirteen Thirteen Twenty-Six Twenty-Six Weeks Weeks Weeks Weeks Ended Ended Ended Ended 11/30/07 12/01/06 11/30/07 12/01/06 ---------------- -------------- --------------- ---------------- Net sales $ 27,504,759 $ 26,596,212 $ 55,898,987 $ 54,421,150 Cost of sales 14,213,757 14,235,696 28,621,556 28,906,898 --------------- -------------- --------------- ---------------- Gross margin 13,291,002 12,360,516 27,277,431 25,514,252 Selling, general and administrative expenses 12,986,925 12,756,527 25,668,807 25,556,551 --------------- -------------- --------------- ---------------- Operating income (loss) 304,077 (396,011) 1,608,624 (42,299) --------------- -------------- --------------- ---------------- Other income (expenses): Gain on sale of assets 34,245 28,968 44,745 35,910 Interest expense (42,175) (65,593) (74,918) (119,162) Other income 47,393 53,663 100,126 95,613 --------------- -------------- --------------- ---------------- Total other income 39,463 17,038 69,953 12,361 --------------- -------------- --------------- ---------------- Income (loss) before income taxes 343,540 (378,973) 1,678,577 (29,938) Income taxes 148,215 (139,845) 640,879 (11,033) --------------- -------------- --------------- ---------------- Net income (loss) $ 195,325 $ (239,128) $ 1,037,698 $ (18,905) =============== ============== =============== ================ PER SHARE OF COMMON STOCK Basic earnings $ 0.02 $ (0.02) $ 0.09 $ - Diluted earnings $ 0.02 $ (0.02) $ 0.09 $ - Weighted average number of common stock share outstanding: Basic 11,825,742 11,835,330 11,830,515 11,835,330 Diluted 11,825,742 11,835,330 11,830,515 11,835,330 Cash dividends paid per share of common stock $ 0.0313 $ 0.0313 $ 0.0626 $ 0.0626
See Accompanying Notes to Condensed Consolidated Financial Statements 4 GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Twenty-Six Twenty-Six Weeks Ended Weeks Ended 11/30/07 12/01/06 --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 56,705,018 $ 55,193,626 Interest income 76,396 71,403 Rental income 16,924 20,135 Miscellaneous income 6,806 4,075 Cash paid to suppliers & employees (28,513,530) (28,462,413) Cash paid for operating expenses (25,957,638) (25,301,140) Income taxes (paid)/received (787,392) (492,671) Interest expenses paid (74,918) (119,162) --------------- --------------- Net cash from operating activities 1,471,666 913,853 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (957,016) (683,221) Proceeds from sale of property, plant and equipment 46,945 50,049 Collection of notes receivable 28,487 26,301 --------------- --------------- Net cash used in investing activities (881,584) (606,871) CASH FLOWS FROM FINANCING ACTIVITIES Debt proceeds 13,469,903 9,997,205 Debt repayments (13,550,916) (9,199,783) Change in checks outstanding in excess of bank balances 229,974 (114,852) Cash dividends paid (739,709) (739,712) Purchases of treasury shares (49,153) - --------------- --------------- Net cash used in financing activities (639,901) (57,142) Net change in cash and cash equivalents (49,819) 249,840 Cash and cash equivalents at beginning of period 706,852 321,627 --------------- --------------- Cash and cash equivalents at end of period $ 657,033 $ 571,467 =============== ===============
See Accompanying Notes to Condensed Consolidated Financial Statements 5
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - CONTINUED RECONCILIATION OF NET INCOME TO NET CASH FROM OPERATING ACTIVITIES FOR THE TWENTY-SIX WEEKS ENDED NOVEMBER 30, 2007 AND DECEMBER 1, 2006 Twenty-Six Twenty-Six Weeks Ended Weeks Ended 11/30/07 12/01/06 --------------- -------------- Net Income $ 1,037,698 $ (18,905) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,139,806 1,116,050 Gain on sale of property and equipment (44,745) (35,910) Change in receivables - net 806,031 772,476 Change in inventories (386,363) (668,919) Change in prepaid expenses (142,683) (219,866) Change in other assets 44,381 123,833 Change in accounts payable (313,733) 322,524 Change in accrued expenses (486,609) 59,955 Change in salary continuation (35,604) (33,681) Change in accrued income taxes (146,513) (503,704) --------------- -------------- Net cash provided by operating activities $ 1,471,666 $ 913,853 =============== ==============
See Accompanying Notes to Condensed Consolidated Financial Statements 6 GOLDEN ENTERPRISES, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The accompanying unaudited condensed consolidated financial statements of Golden Enterprises, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 to Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal, recurring accruals) necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in the Golden Enterprises, Inc. and subsidiary ("the Company") Annual Report on Form 10-K for year ended June 1, 2007. 2. The consolidated results of operations for the twenty-six weeks ended November 30, 2007 are not necessarily indicative of the results to be expected for the fifty-two week fiscal year ending May 30, 2008. 3. The following tables summarize the prepaid assets accounts at November 30, 2007 and December 1, 2006: Prepaid Breakdown November 30, 2007 December 1, 2006 ------------------ ----------------- Truck Shop Supplies $ 688,263 $ 683,195 Insurance Deposit 187,980 227,640 Slotting Fees 123,967 160,450 Deferred Advertising Fees 411,750 394,996 Prepaid Insurance 185,452 177,292 Prepaid Taxes/Licenses 144,960 130,439 Prepaid Dues/Supplies 3,929 33,562 Other 19,282 20,751 ------------------ ----------------- $ 1,765,583 $ 1,828,325 ================== ================= 4. The principal raw materials used in the manufacture of the Company's snack food products are potatoes, corn, vegetable oils and seasoning. The principal supplies used are flexible film, cartons, trays, boxes and bags. These raw materials and supplies are generally available in adequate quantities in the open market from sources in the United States and are generally contracted up to a year in advance. 5. Inventories are stated at the lower of cost or market. Cost is computed on the first-in, first-out method. 6. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, "Accounting For Uncertainty in Income Taxes - an Interpretation of FASB Statement 109", (FIN 48). FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 was adopted in the current period and it did not have a material impact on the current period financial position, results of operations or cash flows. 7 7. The following table provides a reconciliation of the denominator used in computing basic earnings per share to the denominator used in computing diluted earnings per share for the twenty-six weeks ended November 30, 2007 and December 1, 2006: --------------------------- Twenty-Six Twenty-Six Weeks Ended Weeks Ended 11/30/07 12/01/06 --------------------------- Weighted average number of common shares used in computing basic 11,830,515 11,835,330 earnings per share Effect of dilutive stock options 0 0 -------------- ------------ Weighted average number of common shares and dilutive potential common stock used in computing dilutive earnings per share 11,830,515 11,835,330 ============== ============ Stock options excluded from the above reconciliation because they are anti-dilutive 369,000 369,000 ============== ============ 8. The Company has a letter of credit in the amount of $2,314,857 outstanding at November 30, 2007, compared to $2,668,846 at December 1, 2006. The letter of credit supports the Company's commercial self-insurance program. 9. The Company has a line-of-credit agreement with a local bank that permits borrowing up to $2 million. The line-of-credit is subject to the Company's continued credit worthiness and compliance with the terms and conditions of the advance application. The Company's line-of-credit debt as of November 30, 2007 was $812,562 with an interest rate of 7.75%, leaving the Company with $1,187,438 of credit availability. The Company's line-of-credit debt as of December 1, 2006 was $1,471,363 with an interest rate of 8.25%, leaving the Company with $528,637 of credit availability. 10. The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables. The Company maintains deposit relationships with high credit quality financial institutions. The Company's trade receivables result primarily from its snack food operations and reflect a broad customer base, primarily large grocery store chains located in the Southeastern United States. The Company routinely assesses the financial strength of its customers. As a consequence, concentrations of credit risk are limited. The Company's notes receivable require collateral and management believes they are well secured. 8 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------------------------------------- We have reviewed the accompanying interim consolidated balance sheet of Golden Enterprises, Inc. and subsidiary as of November 30, 2007 and the related interim consolidated statements of income and cash flows for the twenty-six week 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 Public Accounting Oversight Board (United States). 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 the standards of the Public Company Accounting Oversight Board, the objective of which is the expressions 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. We previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of June 1, 2007 and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the fiscal year then ended (not presented herein), and in our report dated July 31, 2007 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of June 1, 2007, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. Birmingham, Alabama January 10, 2008 DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP 9 ITEM 2 ------ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis of our financial condition and results of operations are based upon the condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. This discussion should be read in conjunction with our recent SEC filings, including Form 10-K for the year ended June 1, 2007. The preparation of these financial statements requires us to make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. Future events and their effects cannot be determined with absolute certainty. Therefore, management's determination of estimates and judgments about the carrying values of assets and liabilities requires the exercise of judgment in the selection and application of assumptions based on various factors, including historical experience, current and expected economic conditions and other factors believed to be reasonable under the circumstances. We routinely evaluate our estimates including those considered significant and discussed in detail in Form 10-K for the year ended June 1, 2007. Actual results may differ from these estimates under different assumptions or conditions and such differences may be material. OVERVIEW The Company manufactures and distributes a full line of snack items, such as potato chips, tortilla chips, corn chips, fried pork skins, baked and fried cheese curls, onion rings and puff corn. The products are all packaged in flexible bags or other suitable wrapping material. The Company also sells a line of cakes and cookie items, canned dips, pretzels, peanut butter crackers, cheese crackers, dried meat products and nuts packaged by other manufacturers using the Golden Flake label. No single product or product line accounts for more than 50% of the Company's sales, which affords some protection against loss of volume due to a crop failure of major agricultural raw materials. Raw materials used in manufacturing and processing the Company's snack food products are purchased on the open market and under contract through brokers and directly from growers. A large part of the raw materials used by the Company consists of farm commodities which are subject to precipitous changes in supply and price. Weather varies from season to season and directly affects both the quality and supply available. The Company has no control of the agricultural aspects and its profits are affected accordingly. The Company sells its products through its own sales organization and independent distributors to commercial establishments that sell food products primarily in the Southeastern United States. The products are distributed through the independent distributors and approximately 429 route representatives who are supplied with selling inventory by the Company's trucking fleet. All of the route representatives are employees of the Company and use the Company's direct-store delivery system. OTHER MATTERS Transactions with related parties, reported in Note 12 of the Notes to Consolidated Financial Statements in the Annual Report to Stockholders for fiscal year ended June 1, 2007, are conducted on an arm's-length basis in the ordinary course of business. 10 LIQUIDITY AND CAPITAL RESOURCES Working Capital was $4,264,588 at June 1, 2007 and $4,733,085 at the end of the second quarter. Net cash provided by operating activities amounted to $1,471,666 for the twenty-six weeks ended November 30, 2007 compared to $913,853 for the same period last year. Cash dividends of $369,853 were paid during this year's second quarter compared to $369,856 last year. Cash was used to purchase 16,136 shares of treasury stock this quarter in the amount of $48,852. The Company's current ratio was 1.44 to 1.00 at November 30, 2007 compared to 1.30 to 1.00 at December 1, 2006. Accounts Receivable and Allowance for Doubtful Accounts At November 30, 2007 and June 1, 2007 the Company had accounts receivables in the amount of $7,652,396 and $8,458,427, net of an allowance for doubtful accounts of $70,000 and $112,915, respectively. The Company purchased credit insurance for accounts receivable during the thirteen weeks which reduced allowance for doubtful accounts to $70,000. Without credit insurance, the allowance for doubtful accounts would have been $98,553 compared to $112,915 last year. The following table summarizes the Company's customer accounts receivable profile as of November 30, 2007: Amount Range No. of Customers ------------ ---------------- Less than $1,000.00 1,201 $1,001.00-$10,000.00 524 $10,001.00-$100,000.00 109 $100,001.00-$500,000.00 8 $500,001.00-$1,000,000.00 1 $1,000,001.00-$2,500,000.00 0 ------------------ Total All Accounts 1,843 ================== The following table summarizes the significant contractual obligations of the Company as of November 30, 2007:
Contractual Obligations Total Current 2-3 Years 4-5 Years Thereafter ------------------------------ ------------ ------------- -------------- ------------- --------------- Vehicle Leases $ 1,094,150 $ 256,048 $ 488,560 $ 349,542 $ - Salary Continuation Plan 1,668,710 126,834 286,123 335,590 920,163 ------------ ------------- -------------- ------------- --------------- Total Contractual Obligations $ 2,762,860 $ 382,882 $ 774,683 $ 685,132 $ 920,163 ============ ============= ============== ============= ===============
11 Other Commitments Available cash, cash from operations and available credit under the line-of-credit are expected to be sufficient to meet anticipated cash expenditures and normal operating requirements for the foreseeable future. OPERATING RESULTS For the thirteen weeks ended November 30, 2007, net sales increased 3.4% from the comparable period in fiscal 2007. For the twenty-six weeks ended November 30, 2007, net sales increased 2.7% from the comparable period in fiscal 2007. This year's second quarter cost of sales was 51.7% of net sales compared to 53.5% for last year's second quarter. This year's second quarter, selling, general, and administrative expenses were 47.2% of net sales compared to 48.0% for last year's second quarter. This year's year to date, selling, general and administrative expenses were 45.9% of net sales compared to 47.0% for last year's year to date. The following tables compare manufactured products to resale products:
Manufactured Products-Resale Products Thirteen Weeks Ended Thirteen Weeks Ended November 30, 2007 December 1, 2006 Sales % % Manufactured Products $ 22,147,538 80.5% $ 21,230,021 79.8% Resale Products 5,357,221 19.5% 5,366,191 20.2% ---------------- ---------- ---------------- ----------- Total $ 27,504,759 100.0% $ 26,596,212 100.0% ================ ========== ================ =========== Gross Margin % % Manufactured Products $ 11,592,903 52.3% $ 10,017,471 47.2% Resale Products 1,698,099 31.7% 2,343,045 43.7% ---------------- ---------- ---------------- ----------- Total $ 13,291,002 48.3% $ 12,360,516 46.5% ================ ========== ================ =========== Twenty-Six Weeks Ended Twenty-Six Weeks Ended November 30, 2007 December 1, 2006 Sales % % Manufactured Products $ 45,080,534 80.6% $ 43,471,893 79.9% Resale Products 10,818,453 19.4% 10,949,257 20.1% ---------------- ---------- ---------------- ----------- Total $ 55,898,987 100.0% $ 54,421,150 100.0% ================ ========== ================ =========== Gross Margin % % Manufactured Products $ 23,802,650 52.8% $ 20,689,550 47.6% Resale Products 3,474,781 32.1% 4,824,702 44.1% ---------------- ---------- ---------------- ----------- Total $ 27,277,431 48.8% $ 25,514,252 46.9% ================ ========== ================ ===========
The Company's gain on sales of assets for the thirteen weeks ended November 30, 2007 in the amount of $34,245 was from the sale of used transportation equipment for cash. For last year's thirteen weeks, the gain on sale of assets was $28,968 from the sale of used equipment for cash. 12 The Company's effective tax rate for the thirteen weeks was 43.1% compared to -36.9% for the last year's thirteen weeks and 38.2% for the twenty-six weeks this year and -36.9% last year. MARKET RISK The principal market's 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 bank loans, and commodity prices affecting the cost of its raw materials. Included in the Company's cash and cash equivalents are short-term marketable securities. Presently, these are variable rate money market mutual funds. Assuming November 30, 2007 variable rate investment levels and a one-point change in interest rates would impact interest income by $4,042 on an annual basis. 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. Commodity prices are projected to reach record highs in 2008 which will have an effect on both manufacturing and distribution costs. The Company purchases its raw materials on the open market and under contract through brokers or directly from growers. Future contracts have been used occasionally to hedge immaterial amounts of commodity purchases, but none are presently being used. INFLATION Certain costs and expenses of the Company are affected by inflation. The Company's prices for its products over the past several years have remained relatively flat. The Company will contend with the effect of further inflation through efficient purchasing, improved manufacturing methods, pricing and by monitoring and controlling expenses. ENVIRONMENTAL MATTERS There have been no material effects of compliance with governmental provisions regulating discharge of materials into the environment. 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. ITEM 3 ------ QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Included in Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations- Market Risk beginning on page 10. 13 ITEM 4 ------ CONTROLS AND PROCEDURES The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures provided reasonable assurance that the disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in accumulating and communicating such information to management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the Company's internal control over financial reporting to determine whether any changes occurred during the Company's second fiscal quarter ended November 30, 2007 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Based on that evaluation, there has been no such change during the period covered by this report. PART II OTHER INFORMATION ITEM 1 ------ LEGAL PROCEEDINGS There are no material pending legal proceedings against the Company or its subsidiary other than routine litigation incidental to the business of the Company and its subsidiary. ITEM 1-A -------- RISK FACTORS There are no material changes in our risk factors from those disclosed in our 2007 Annual Report on Form 10-K. ITEM 2 ------ UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company did not sell any equity securities during the period covered by this report. Registrant Purchases of Equity Securities. Cash was used to purchase 16,136 shares of treasury stock for the quarterly period ended November 30, 2007 in the amount of $48,360. In addition, commission fees in the sum of $492 were paid to the broker. 14
Period (a) Total (b) Average Price (c) Total (d) Maximum Number Number of Paid per Share Number of (or Approximate Shares (or Unit) Shares Dollar Value) of (or Units) (or Units) Shares (or Units) Purchased Purchased as that May Yet Be Part of Purchased Under the Publicly Plans or Programs Announced Plans or Programs ---------------------------- ------------ ------------------ -------------- --------------------- Month #1 Sept. 1 to Sept. 30, 1,396 $3.00 ---------------------------- ------------ ------------------ -------------- --------------------- Month #2 October 1 to October 31 13,341 $3.00 ---------------------------- ------------ ------------------ -------------- --------------------- Month #3 November 1 to November 30 1,399 $3.00 ---------------------------- ------------ ------------------ -------------- ---------------------
ITEM 3 ------ DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4 ------ SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Item 4. Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Stockholders of Golden Enterprises, Inc. was held on September 20, 2007. (b) All director nominees were elected. (c) The following is a tabulation of the voting for the election of Directors: ELECTION OF DIRECTORS Names Votes For Votes Withheld John S. Stein 9,823,413 467,572 Edward R. Pascoe 10,210,420 80,565 John P. McKleroy, Jr. 9,880,657 410,328 James I. Rotenstreich 10,211,320 79,665 John S.P. Samford 10,244,412 46,573 J. Wallace Nall, Jr. 9,857,084 433,901 F. Wayne Pate 9,823,489 467,496 Joann F. Bashinsky 9,825,765 465,220 Mark W. McCutcheon 9,927,260 363,725 15 ITEM 5 ------ OTHER INFORMATION Not applicable. ITEM 6 ------ EXHIBITS (3) Articles of Incorporation and By-laws of Golden Enterprises, Inc. 3.1 Certificate of Incorporation of Golden Enterprises, Inc. (originally known as "Golden Flake, Inc.") dated December 11, 1967 (incorporated by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission). 3.2 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated December 22, 1976 (incorporated by reference to Exhibit 3.2 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission). 3.3 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated October 2, 1978 (incorporated by reference to Exhibit 3 to Golden Enterprises, Inc. May 31, 1979 Form 10-K filed with the Commission). 3.4 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated October 4, 1979 (incorporated by reference to Exhibit 3 to Golden Enterprises, Inc. May 31, 1980 Form 10-K filed with the Commission). 3.5 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated September 24, 1982 (incorporated by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 1983 Form 10-K filed with the Commission). 3.6 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated September 22, 1983 (incorporated by reference to Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the quarter ended November 30, 1983 filed with the Commission). 3.7 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises. Inc. dated October 3, 1985 (incorporated by reference to Exhibit 19.1 to Golden Enterprises, inc. Form l0-Q Report for the quarter ended November 30, 1985 filed with the Commission). 3.8 Certificate of Amendment of Certificate of Incorporation of Golden Enterprises, Inc. dated September 23, 1987 (incorporated by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 1988 Form 10-K filed with the Commission). 3.9 By-Laws of Golden Enterprises, Inc. (incorporated by reference to Exhibit 3.4 to Golden Enterprises, Inc. May 31, 1988 Form 10-K filed with the Commission). 16 (10) Material Contracts. 10.1 A Form of Indemnity Agreement executed by and between Golden Enterprises, Inc. and Each of its Directors (incorporated by reference as Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the quarter ended November 30, 1987 filed with the Commission). 10.2 Amended and Restated Salary Continuation Plans for John S. Stein (incorporated by reference to Exhibit 19.1 to Golden Enterprises, Inc. May 31, 1990 Form 10-K filed with the Commission). 10.3 Indemnity Agreement executed by and between the Company and S. Wallace Nall, Jr. (incorporated by reference as Exhibit 19.4 to Golden Enterprises, Inc. May 31, 1991 Form 10-K filed with the Commission). 10.4 Salary Continuation Plans - Retirement Disability and Death Benefits for F. Wayne Pate (incorporated by reference to Exhibit 19.1 to Golden Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission). 10.5 Indemnity Agreement executed by and between the Company and F. Wayne Pate (incorporated by reference as Exhibit 19.3 to Golden Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission). 10.6 Golden Enterprises, Inc. 1996 Long-Term Incentive Plan (incorporated by reference as Exhibit 10.1 to Golden Enterprises, Inc. May 31, 1997 Form 10-K filed with the Commission). 10.7 Equipment Purchase and Sale Agreement dated October 2000 whereby Golden Flake Snack Foods. Inc., a wholly-owned subsidiary of Golden Enterprises, Inc., sold the Nashville, Tennessee Plant Equipment (incorporated by reference as Exhibit 10.1 to Golden Enterprises, Inc. May 31, 2001 Form 10-K filed with the Commission). 10.8 Real Property Contract of Sale dated October 2000 whereby Golden Flake Snack Foods, Inc. sold the Nashville, Tennessee Plant Real Property (incorporated by reference as Exhibit 10.2 to Golden Enterprises, Inc. May 31, 2001 Form 10-K filed with the Commission). 10.9 Amendment to Salary Continuation Plans, Retirement and Disability for F. Wayne Pate dated April 9. 2002 (incorporated by reference to Exhibit 10.2 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.10 Amendment to Salary Continuation Plans, Retirement and Disability for John S. Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.3 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.11 Amendment to Salary Continuation Plan, Death Benefits for John S. Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.4 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 17 10.12 Retirement and Consulting Agreement for John S. Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.5 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.13 Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002 (incorporated by reference to Exhibit 10.6 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.14 Trust Under Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002 (incorporated by reference to Exhibit 10.7 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission). 10.15 Lease of aircraft executed by and between Golden Flake Snack Foods, Inc., a wholly-owned subsidiary of Golden Enterprises, Inc., and Joann F. Bashinsky dated February 1, 2006 (incorporated by reference to Exhibit 10.15 to Golden Enterprises, Inc. June 2, 2006 Form 10-K filed with the Commission). (31) Certifications 3 1.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 32. 1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002, 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (99) Additional Exhibits 99.1 A copy of excerpts of the Last Will and Testament and Codicils thereto of Sloan Y. Bashinsky, Sr. and of the SYB Common Stock Trust created by Sloan Y. Bashinsky, Sr. providing for the creation of a Voting Committee to vote the shares of common stock of Golden Enterprises, Inc. held by SYB, Inc. and the Estate/Testamentary Trust of Sloan Y. Bashinsky, Sr. (Incorporated by reference to Exhibit 99.1 to Golden Enterprises, Inc. May 31, 2005 Form 10-k filed with the Commission). 18 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: January 11, 2008 /s/Mark W. McCutcheon ---------------- --------------------- Mark W. McCutcheon President and Chief Executive Officer Dated: January 11, 2008 /s/ Patty Townsend ---------------- ------------------ Patty Townsend Vice-President and Chief Financial Officer (Principal Accounting Officer) 19