-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MZmZPlihGEQuMR2kRXkKepmVvdqlhBBNIlZjOgIbvsQ3sxF+lb1a+lKiV4SqciZn 0NG9kYXllkEA+d72b2gTLw== 0001157523-09-000270.txt : 20090115 0001157523-09-000270.hdr.sgml : 20090115 20090115133614 ACCESSION NUMBER: 0001157523-09-000270 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20081128 FILED AS OF DATE: 20090115 DATE AS OF CHANGE: 20090115 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: 09528177 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: 2140 11TH AVE SOUTH STREET 2: STE 208 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 a5872525.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 28, 2008 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 Offices) (Zip Code) (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, or a smaller reporting company (as defined in Rule 12b-2 of the Act). (Check one): Large accelerated filer Accelerated filer Non-accelerated filer --- --- --- Smaller reporting company 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, 2008. Outstanding at Class December 31, 2008 ----- ----------------- Common Stock, Par Value $0.66 2/3 11,746,632
GOLDEN ENTERPRISES, INC. INDEX Part I. FINANCIAL INFORMATION Page No. Item 1 Financial Statements (unaudited) Condensed Consolidated Balance Sheets November 28, 2008 (unaudited) and May 30, 2008 3 Condensed Consolidated Statements of Income (unaudited) Thirteen Weeks and Twenty-Six Ended November 28, 2008 and November 30, 4 2007 Condensed Consolidated Statements of Cash Flows (unaudited)- Twenty-Six Weeks Ended November 28, 2008 and November 30, 2007 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 13 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 14 Item 4 Submission of Matters to a Vote of Security Holders 15 Item 5 Other Information 15 Item 6 Exhibits 16
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PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) November 28, May 30, 2008 2008 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 2,440,684 $ 442,756 Receivables, net 7,954,543 7,940,547 Inventories: Raw materials and supplies 1,666,114 1,467,400 Finished goods 2,956,670 2,870,698 ------------ ------------ 4,622,784 4,338,098 ------------ ------------ Prepaid expenses 1,997,244 1,642,959 Deferred income taxes 649,420 649,420 ------------ ------------ Total current assets 17,664,675 15,013,780 ------------ ------------ Property, plant and equipment, net 12,286,151 14,629,336 Other assets 2,286,266 2,592,929 ------------ ------------ Total $ 32,237,092 $ 32,236,045 ============ ============ LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES Checks outstanding in excess of bank balances $ - $ 817,370 Accounts payable 3,832,496 3,567,939 Accrued income taxes 293,276 160,619 Other accrued expenses 4,696,269 4,989,684 Salary continuation plan 137,361 131,993 Line of credit outstanding 1,995,436 1,484,368 ------------ ------------ Total current liabilities 10,954,838 11,151,973 ------------ ------------ LONG-TERM LIABILITIES Salary continuation plan 1,457,018 1,499,421 Deferred income taxes 620,077 620,077 ------------ ------------ Total long-term liabilities 2,077,095 2,119,498 ------------ ------------ 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 14,376,809 14,060,942 ------------ ------------ 30,093,958 29,778,091 Less: Cost of common shares in treasury (2,082,161 shares at November 28, 2008 and 2,039,886 shares at May 30, 2008) (10,888,799) (10,813,517) ------------ ------------ Total stockholder's equity 19,205,159 18,964,574 ------------ ------------ Total $ 32,237,092 $ 32,236,045 ============ ============
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 November 28, 2008 November 30, 2007 November 28, 2008 November 30, 2007 ------------------ ----------------- ----------------- ----------------- Net sales $29,155,330 $27,504,759 $59,006,018 $55,898,987 Cost of sales 15,791,595 14,213,757 31,176,866 28,621,556 ----------------- ----------------- ----------------- ----------------- Gross margin 13,363,735 13,291,002 27,829,152 27,277,431 Selling, general and administrative expenses 13,010,121 12,986,925 26,889,178 25,668,807 ----------------- ----------------- ----------------- ----------------- Operating income 353,614 304,077 939,974 1,608,624 ----------------- ----------------- ----------------- ----------------- Other income (expenses): Gain on sale of assets 804,767 34,245 849,678 44,745 Interest expense (48,308) (42,175) (108,252) (74,918) Other income 15,691 47,393 25,187 100,126 ----------------- ----------------- ----------------- ----------------- Total other income (expenses) 772,150 39,463 766,613 69,953 ----------------- ----------------- ----------------- ----------------- Income before income taxes 1,125,764 343,540 1,706,587 1,678,577 Income taxes 427,646 148,215 654,003 640,879 ----------------- ----------------- ----------------- ----------------- Net income $ 698,118 $ 195,325 $ 1,052,584 $ 1,037,698 ================= ================= ================= ================= PER SHARE OF COMMON STOCK Basic earnings $ 0.06 $ 0.02 $ 0.09 $ 0.09 Diluted earnings $ 0.06 $ 0.02 $ 0.09 $ 0.09 Weighted average number of common stock share outstanding: Basic 11,757,956 11,825,742 11,770,671 11,830,515 Diluted 11,757,956 11,825,742 11,770,671 11,830,515 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 November 28, 2008 November 30, 2007 ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 58,992,022 $ 56,705,018 Miscellaneous income 25,187 100,126 Cash paid to suppliers & employees (30,357,320) (28,513,530) Cash paid for operating expenses (26,931,843) (25,957,638) Income taxes paid (521,346) (787,392) Interest expenses paid (108,252) (74,918) ----------------- ----------------- Net cash from operating activities 1,098,448 1,471,666 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (670,111) (957,016) Proceeds from sale of property, plant and equipment 2,687,892 46,945 Collection of notes receivable - 28,487 ----------------- ----------------- Net cash provided by (used in) investing activities 2,017,781 (881,584) CASH FLOWS FROM FINANCING ACTIVITIES Debt proceeds 10,039,428 13,469,903 Debt repayments (9,528,360) (13,550,916) Change in checks outstanding in excess of bank balances (817,370) 229,974 Cash dividends paid (736,717) (739,709) Purchases of treasury shares (75,282) (49,153) ----------------- ----------------- Net cash used in financing activities (1,118,301) (639,901) Net change in cash and cash equivalents 1,997,928 (49,819) Cash and cash equivalents at beginning of period 442,756 706,852 ----------------- ----------------- Cash and cash equivalents at end of period $ 2,440,684 $ 657,033 ================= =================
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 28, 2008 AND NOVEMBER 30, 2007 Twenty-Six Twenty-Six Weeks Ended Weeks Ended November 28, 2008 November 30, 2007 ------------------ ------------------ Net Income $ 1,052,584 $ 1,037,698 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,175,082 1,139,806 Gain on sale of property and equipment (849,678) (44,745) Changes in operating assets and liabilities: Change in receivables - net (13,996) 806,031 Change in inventories (284,686) (386,363) Change in prepaid expenses (354,285) (142,683) Change in other assets 306,663 44,381 Change in accounts payable 264,557 (313,733) Change in accrued expenses (293,415) (486,609) Change in salary continuation (37,035) (35,604) Change in accrued income taxes 132,657 (146,513) ------------------ ------------------ Net cash provided by operating activities $ 1,098,448 $ 1,471,666 ================== ==================
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 May 30, 2008. 2. The consolidated results of operations for the twenty-six weeks ended November 28, 2008 are not necessarily indicative of the results to be expected for the fifty-three week fiscal year ending June 5, 2009. 3. The following tables summarize the prepaid assets accounts at November 28, 2008 and May 30, 2008. Prepaid Breakdown November 28, 2008 May 30, 2008 ----------------- ---------------- Truck Shop Supplies $ 710,237 $ 717,802 Insurance Deposit 188,959 188,959 Slotting Fees 137,516 202,391 Deferred Advertising Fees 496,242 - Prepaid Insurance 162,182 285,777 Prepaid Taxes/Licenses 155,656 200,445 Prepaid Dues/Supplies 127,041 10,237 Other 19,411 37,348 ----------------- ---------------- $ 1,997,244 $ 1,642,959 ================= ================ 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. 7 6. 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 28, 2008 and November 30, 2007:
----------------- ----------------- Twenty-Six Twenty-Six Weeks Ended Weeks Ended November 28, 2008 November 30, 2007 ----------------- ----------------- Weighted average number of common shares used in computing basic earnings per share 11,770,671 11,830,515 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 11,770,671 11,830,515 ================= ================= Stock options excluded from the above reconciliation because they are anti-dilutive 369,000 369,000 ================= =================
7. The Company has a letter of credit in the amount of $2,264,857 outstanding at November 28, 2008 compared to $2,314,857 at November 30, 2007. The letter of credit supports the Company's commercial self-insurance program. 8. 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 28, 2008 was $1,995,436 with an interest rate of 4.00%, leaving the Company with $4,564 of credit availability. 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. 9. 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. 10. On November 25, 2008, the Company closed the sale of the property located at 2926 Kraft Drive in Nashville, Tennessee and across the street from this address for $2,100,000. 11. On October 22, 2008 the Purchaser cancelled, within the due diligence period provided for in the contract, the Purchase and Sale Agreement to purchased the property located at 4771 Phyllis Street, Jacksonville, Florida for $200,000. 8 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------------------------------------- We have reviewed the accompanying condensed consolidated balance sheet of Golden Enterprises, Inc. and subsidiary as of November 28, 2008, and the related condensed consolidated statements of income and cash flows for the twenty-six week periods ended November 28, 2008 and November 30, 2007. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the Public Company 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 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. We previously audited in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet as of May 30, 2008 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 30, 2008 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 May 30, 2008, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. Birmingham, Alabama January 8, 2009 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 May 30, 2008. 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 May 30, 2008. 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 322 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. Liquidity and Capital Resources At November 28, 2008 and May 30, 2008, working capital was $6,709,837 and $3,861,807, respectively. Cash was used to purchase 30,377 shares of treasury stock this quarter in the amount of $52,950. The Company's current ratio was 1.61 to 1.00 at November 28, 2008 compared to 1.35 to 1.00 at May 30, 2008. 10 Accounts Receivable and Allowance for Doubtful Accounts At November 28, 2008 and May 30, 2008 the Company had accounts receivables in the amount of $7,954,543 and $7,940,547, net of an allowance for doubtful accounts of $70,000 and $70,000, respectively. The following table summarizes the Company's customer accounts receivable profile as of November 28, 2008 and May 30, 2008: Amount Range No. of Customers ------------ ---------------- November 28, 2008 May 30, 2008 Less than $1,000.00 1,053 1,118 $1,001.00-$10,000.00 524 558 $10,001.00-$100,000.00 116 113 $100,001.00-$500,000.00 6 8 $500,001.00-$1,000,000.00 1 1 $1,000,001.00-$2,500,000.00 0 0 ----------------- ---------------- Total All Accounts 1,700 1,798 ================= ================ Contractual Obligations The following table summarizes the significant contractual obligations of the Company as of November 28, 2008:
Contractual Obligations Total Current 2-3 Years 4-5 Years Thereafter - ------------------------------ ------------ ----------- -------------- ----------- ------------- Vehicle Lease $3,604,745 $ 902,270 $1,799,505 $ 902,970 $ - Salary Continuation Plan 1,594,379 137,361 309,871 363,444 783,703 ------------ ----------- -------------- ----------- ------------- Total Contractual Obligations $5,199,124 $1,039,631 $2,109,376 $1,266,414 $783,703 ============ =========== ============== =========== =============
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 28, 2008, net sales increased 6.0% from the comparable period in fiscal 2008. For the twenty-six weeks ended November 28, 2008, net sales increased 5.6% from the comparable period in fiscal 2008. This year's second quarter cost of sales was 54.2% of net sales compared to 51.7% for last year's second quarter. This year's second quarter, selling, general and administrative expenses were 44.6% of net sales compared to 47.2% for last year's second quarter. This year's year to date selling, general and administrative expenses were 45.6% of net sales compared to 45.9% for last year's year to date. 11 The following tables compare manufactured products to resale products:
Manufactured Products-Resale Products Thirteen Weeks Ended Thirteen Weeks Ended November 28, 2008 November 30, 2007 Sales % % Manufactured Products $ 23,227,596 79.7% $ 22,147,538 80.5% Resale Products 5,927,734 20.3% 5,357,221 19.5% -------------------- ---------- -------------- ---------- Total $ 29,155,330 100.0% $ 27,504,759 100.0% ==================== ========== ============== ========== Gross Margin % % Manufactured Products $ 11,195,693 48.2% $ 11,592,903 52.3% Resale Products 2,168,042 36.6% 1,698,099 31.7% -------------------- ---------- -------------- ---------- Total $ 13,363,735 45.8% $ 13,291,002 48.3% ==================== ========== ============== ========== Twenty-Six Weeks Ended Twenty-Six Weeks Ended November 28, 2008 November 30, 2007 Sales % % Manufactured Products $ 47,063,062 79.8% $ 45,080,534 80.6% Resale Products 11,942,956 20.2% 10,818,453 19.4% ------------------- ---------- -------------- ----------- Total $ 59,006,018 100.0% $ 55,898,987 100.0% =================== ========== ============== =========== Gross Margin % % Manufactured Products $ 23,303,268 49.5% $ 23,802,650 52.8% Resale Products 4,525,884 37.9% 3,474,781 32.1% ------------------- ---------- -------------- ----------- Total $ 27,829,152 47.2% $ 27,277,431 48.8% =================== ========== ============== ===========
The Company's gain on sale of assets for the thirteen weeks ended November 28, 2008 in the amount of $804,767 was from the sale of used transportation equipment for $22,055 and from the sale of warehouse properties at Marietta, Georgia and Nashville, Tennessee for $782,712. For last year's thirteen weeks, the gain on sale of assets was $34,245 from the sale of used equipment for cash. The Company's effective tax rate for the thirteen weeks was 38.0% compared to 43.1% for the last year's thirteen weeks and 38.3% for the twenty-six weeks this year and 38.2% 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. 12 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 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 Pursuant to Item 305(e) of Regulation S-K (Section 229.305(e)) the Company is not required to provide the Information under this item, as it is a "Smaller Reporting Company" as defined by Rule 229.10(f)(1). 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 13 Company's internal control over financial reporting to determine whether any changes occurred during the Company's second fiscal quarter ended November 28, 2008 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 2008 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 30,377 shares of treasury stock for the quarterly period ended November 28, 2008 in the amount of $52,275. In addition, commission fees in the sum of $675 were paid to the broker.
ISSUER PURCHASES OF EQUITY SECURITIES - ------------------------------------ --------------- ----------------------- --------------------- ---------------------- Period (a) Total (b) Average Price (c) Total Number of (d) Maximum Number Number of Paid per Share (or Shares (or Approximate Shares Unit) (or Units) Dollar Value) of (or Units) Purchased as Part Shares (or Units) Purchased of Publicly that May Yet Be Announced Plans or Purchased Under the Programs Plans or Programs - ------------------------------------ --------------- ----------------------- --------------------- ---------------------- August 30 to September 26 6,266 $1.79 - ------------------------------------ --------------- ----------------------- --------------------- ---------------------- September 27 to October 31 24,111 $1.70 - ------------------------------------ --------------- ----------------------- --------------------- ---------------------- November 1 to November 28 -0- -0- - ------------------------------------ --------------- ----------------------- --------------------- ---------------------- Total Second Quarter 30,377 $1.72 - ------------------------------------ --------------- ----------------------- --------------------- ----------------------
ITEM 3 ------ DEFAULTS UPON SENIOR SECURITIES Not applicable. 14 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 25, 2008. (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 10,725,940 447,583 Edward R. Pascoe 11,169,468 4,055 John P. McKleroy, Jr. 10,748,077 425,446 James I. Rotenstreich 11,168,268 5,255 John S.P. Samford 11,166,201 7,322 J. Wallace Nall, Jr. 10,722,304 451,219 F. Wayne Pate 10,728,469 445,054 Joann F. Bashinsky 10,727,139 446,384 Mark W. McCutcheon 10,795,391 378,132 ITEM 5 ------ OTHER INFORMATION Not applicable. 15 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). (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 16 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 Registrant 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). 10.9 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). 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). 17 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). 10.16 Real Property Purchase and Sale Agreement dated May 2, 2008 whereby Golden Flake Snack Foods, Inc., a wholly-owned subsidiary of Golden Enterprises, Inc. re-acquired certain real property in Nashville, Tennessee. 10.17 Purchase and Sale Agreement executed between Golden Flake Snack Foods, Inc. as Seller, and Alternative Communications, Inc., as Purchaser, with an effective date of September 10, 2008, for the sale of real property and improvements being located at 4771 Phyllis, Jacksonville, Duval County, Florida. 10.18 Purchase and Sale Agreement executed by and between Golden Flake Snack Foods, Inc. as Seller, and Michael L. Rankin, as Purchaser, with an effective date of August 20 2008, for the sale of real property located at 2926 Kraft Drive, Nashville, County of Davidson, State of Tennessee and undeveloped real property located across the road from 2926 Kraft Drive. 10.19 Purchase and Sale Agreement executed by and between Golden Flake Snack Foods, Inc., as Seller, and Steve Bacorn, as Purchaser, with an effective date of July 7, 2008, for the sale of land and improvements located in Cobb County, Address being 321 Marble Mill Road, Marietta, Georgia 14.1 Golden Enterprises, Inc.'s Code of Conduct and Ethics adopted by the Board of Directors on April 8, 2004 (incorporated by reference to Exhibit 14.1 to Golden Enterprises, Inc. May 31, 004 From 10-K with the Commission). 21 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission) (31) Certifications 31.1 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, 18 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). 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 15, 2009 /s/Mark W. McCutcheon ---------------- --------------------- Mark W. McCutcheon President and Chief Executive Officer Dated: January 15, 2009 /s/ Patty Townsend ---------------- ------------------ Patty Townsend Vice-President and Chief Financial Officer (Principal Accounting Officer) 19 EX-31.1 2 a5872525-ex311.txt EXHIBIT 31.1 EXHIBIT 31.1 CERTIFICATION BY MARK W. MCCUTCHEON PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Mark W. McCutcheon, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Golden Enterprises, Inc. for the second quarter ended November 28, 2008; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Dated: January 15, 2009 /s/ Mark W. McCutcheon - ---------------------- Mark W. McCutcheon President and Chief Executive Officer 20 EX-31.2 3 a5872525-ex312.txt EXHIBIT 31.2 EXHIBIT 31.2 CERTIFICATION BY PATTY TOWNSEND PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Patty Townsend, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Golden Enterprises, Inc. for the second quarter ended November 28, 2008; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: January 15, 2009 /s/ Patty Townsend - ------------------ Patty Townsend Vice-President and Chief Financial Officer 21 EX-32.1 4 a5872525-ex321.txt EXHIBIT 32.1 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Golden Enterprises, Inc. (the "Company") on Form 10-Q for the second quarter ended November 28, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark W. McCutcheon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: January 15, 2009 /s/ Mark W. McCutcheon - ---------------------- Mark W. McCutcheon President and Chief Executive Officer A signed original of this written statement required by Section 906 has been provided to Golden Enterprises, Inc. and will be retained by Golden Enterprises, Inc. and furnished to the Securities and Exchange Commission, or its staff, upon request. 22 EX-32.2 5 a5872525-ex322.txt EXHIBIT 32.2 EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Golden Enterprises, Inc. (the "Company") on Form 10-Q for the second quarter ended November 28, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Patty Townsend, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: January 15, 2009 /s/ Patty Townsend - ------------------ Patty Townsend Vice-President and Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to Golden Enterprises, Inc. and will be retained by Golden Enterprises, Inc. and furnished to the Securities and Exchange Commission, or its staff, upon request. 23 -----END PRIVACY-ENHANCED MESSAGE-----