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 (thirteen and thirty-nine weeks) period ended
February 29, 2008
-----------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-4339
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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. 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 filer 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 March 31, 2008 Outstanding at
Class March 31, 2008
----- --------------
Common Stock, Par Value $0.66 2/3 11,788,907
GOLDEN ENTERPRISES, INC.
INDEX
Part I. FINANCIAL INFORMATION Page No.
Item 1 Financial Statements (unaudited)
Condensed Consolidated Balance Sheets
February 29, 2008 (unaudited) and June 1, 2007 3
Condensed Consolidated Statements of Income (unaudited)
Thirteen Weeks and Thirty-Nine Weeks Ended February 29, 2008 and March 4
2, 2007
Condensed Consolidated Statements of Cash Flows
(unaudited)- Thirty-Nine Weeks Ended February 29, 2008 and March 2,
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 15
Item 4 Submission of Matters to a Vote of Security Holders 15
Item 5 Other Information 15
Item 6 Exhibits 15
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
February 29, June 1,
2008 2007
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 228,966 $ 706,852
Receivables, net 7,390,468 8,458,427
Notes receivable, current 61,708 58,126
Inventories:
Raw materials and supplies 1,447,579 1,340,389
Finished goods 2,892,465 3,035,285
------------ ------------
4,340,044 4,375,674
------------ ------------
Prepaid expenses 2,143,987 1,622,900
Deferred income taxes 583,179 583,179
------------ ------------
Total current assets 14,748,352 15,805,158
------------ ------------
PROPERTY, PLANT AND EQUIPMENT 12,970,578 12,956,633
OTHER ASSETS
Long-term note receivable 1,611,888 1,658,630
Other assets 2,930,288 2,905,007
------------ ------------
Total $ 32,261,106 $ 33,325,428
============ ============
CURRENT LIABILITIES
Checks outstanding in excess of bank balances $ 1,290,607 $ 1,385,663
Accounts payable 2,658,842 3,760,499
Accrued income taxes - 318,198
Other accrued expenses 4,669,356 5,060,758
Salary continuation plan 129,388 121,877
Note payable - current - 270,625
Line of credit outstanding 1,995,076 622,950
------------ ------------
Total current liabilities 10,743,269 11,540,570
------------ ------------
LONG-TERM LIABILITIES
Salary continuation plan 1,520,615 1,582,437
Deferred income taxes 752,298 752,298
------------ ------------
Total long-term liabilities 2,272,913 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 14,312,710 14,410,568
------------ ------------
30,029,859 30,127,717
Less: Cost of common shares in treasury (2,029,860 at February 29, 2008
and 1,993,463 at June 1, 2007) (10,784,935) (10,677,594)
------------ ------------
Total stockholder's equity 19,244,924 19,450,123
------------ ------------
Total $ 32,261,106 $ 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 Thirty-Nine Thirty-Nine
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
2/29/08 3/2/07 2/29/08 3/2/07
------------- ------------ ------------ ------------
Net sales $27,633,971 $27,124,000 $83,532,958 $81,545,150
Cost of sales 14,797,878 14,099,930 43,419,434 43,006,828
------------ ------------ ------------ ------------
Gross margin 12,836,093 13,024,070 40,113,524 38,538,322
Selling, general and administrative expenses 12,881,611 12,244,243 38,550,418 37,800,794
------------ ------------ ------------ ------------
Operating (loss) income (45,518) 779,827 1,563,106 737,528
------------ ------------ ------------ ------------
Other income (expenses):
Gain on sale of assets 32,664 213,728 77,409 249,638
Interest expense (70,960) (73,321) (145,878) (192,483)
Other income 53,461 48,731 153,587 144,344
------------ ------------ ------------ ------------
Total other income 15,165 189,138 85,118 201,499
------------ ------------ ------------ ------------
(Loss) income before income taxes (30,353) 968,965 1,648,224 939,027
Income taxes (3,563) 357,537 637,316 346,504
------------ ------------ ------------ ------------
Net (loss) income $ (26,790) $ 611,428 $ 1,010,908 $ 592,523
============ ============ ============ ============
PER SHARE OF COMMON STOCK
Basic earnings $ - $ 0.05 $ 0.09 $ 0.05
Diluted earnings $ - $ 0.05 $ 0.09 $ 0.05
Weighted average number of common
stock share outstanding:
Basic 11,812,150 11,835,330 11,824,393 11,835,330
Diluted 11,812,150 11,835,330 11,824,393 11,835,330
Cash dividends paid per share of
common stock $ 0.0313 $ 0.0313 $ 0.0938 $ 0.0938
See Accompanying Notes to Condensed Consolidated Financial Statements
4
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
2/29/08 3/2/07
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 84,600,917 $ 82,080,338
Interest income 111,839 106,497
Rental income 33,164 26,401
Miscellaneous income 8,584 11,446
Cash paid to suppliers & employees (43,269,936) (42,334,444)
Cash paid for operating expenses (38,895,127) (37,924,555)
Income taxes paid (1,101,476) (760,339)
Interest expenses paid (145,878) (192,483)
------------ ------------
Net cash from operating activities 1,342,087 1,012,861
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,735,619) (1,398,184)
Proceeds from sale of property, plant and equipment 82,150 307,163
Collection of notes receivable 43,160 39,850
------------ ------------
Net cash used in investing activities (1,610,309) (1,051,171)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt proceeds 18,411,922 16,811,368
Debt repayments (17,310,421) (15,799,114)
Change in checks outstanding in excess of bank
balances (95,056) 187,706
Cash dividends paid (1,108,768) (1,109,568)
Purchases of treasury shares (107,341) -
------------ ------------
Net cash used in financing activities (209,664) 90,392
Net change in cash and cash equivalents (477,886) 52,082
Cash and cash equivalents at beginning of period 706,852 321,627
------------ ------------
Cash and cash equivalents at end of period $ 228,966 $ 373,709
============ ============
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 THIRTY-NINE WEEKS ENDED FEBRUARY 29, 2008 AND MARCH 2, 2007
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
2/29/08 3/2/07
----------- ------------
Net Income $ 1,010,908 $ 592,523
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,716,933 1,692,139
Gain on sale of property and equipment (77,409) (249,638)
Changes in operating assets and liabilities:
Change in receivables - net 1,067,959 535,188
Change in inventories 35,630 (371,152)
Change in prepaid expenses (521,087) (493,249)
Change in other assets (25,279) 164,543
Change in accounts payable (1,101,657) (150,464)
Change in accrued expenses (391,402) (241,847)
Change in salary continuation (54,311) (51,347)
Change in accrued income taxes (318,198) (413,835)
----------- ------------
Net cash provided by operating activities $ 1,342,087 $ 1,012,861
=========== ============
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 thirty-nine weeks ended
February 29, 2008 are not necessarily indicative of the results to be
expected for the fifty-two week fiscal year ending May 30, 2008.
3. The following table summarizes the prepaid assets accounts at February
29, 2008 and March 2, 2007:
Prepaid Breakdown
February 29, 2008 March 2, 2007
------------------- -----------------
Truck shop supplies $ 696,168 $ 689,097
Insurance deposit 187,980 227,640
Slotting fees 209,829 239,541
Deferred advertising fees 205,875 197,494
Prepaid insurance 375,877 477,494
Prepaid taxes/licenses 421,831 183,839
Prepaid dues/supplies 30,152 64,099
Other 16,275 22,504
------------------- -----------------
$ 2,143,987 $ 2,101,708
=================== =================
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 thirty-nine weeks ended
February 29, 2008 and March 2, 2007:
---------------------------
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
2/29/08 3/2/07
---------------------------
Weighted average number of common shares used in computing basic
earnings per share 11,824,393 11,835,330
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 11,824,393 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 February 29, 2008, compared to $2,668,846 at March 2,
2007. 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 February 29, 2008 was $1,995,076 with an interest rate of
7.75%, leaving the Company with $4,924 of credit availability. The
Company's line-of-credit debt as of March 2, 2007 was $1,871,185 with
an interest rate of 8.25%, leaving the Company with $128,815 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 condensed consolidated balance sheet of Golden
Enterprises, Inc. and subsidiary as of February 29, 2008, the related condensed
consolidated statements of income for the thirteen and thirty-nine week periods
ended February 29, 2008 and March 2, 2007, and the related condensed statement
of cash flows for the thirty-nine week period ended February 29, 2008 and March
2, 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 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.
DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP
Birmingham, Alabama
April 3, 2008
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 independent distributors and approximately 425 route employees who are
supplied with selling inventory by the Company's trucking fleet. All of the
route employees use the Company's direct-store delivery system.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital was $4,264,588 at June 1, 2007 and $4,005,083 at the end of this
year's third quarter.
Cash was used to purchase 20,165 shares of treasury stock this quarter in the
amount of $58,187. The Company's current ratio was 1.37 to 1.00 at February 29,
2008 compared to 1.37 to 1.00 at June 1, 2007.
Accounts Receivable and Allowance for Doubtful Accounts
At February 29, 2008 and June 1, 2007 the Company had accounts receivables in
the amount of $7,390,468 and $8,458,427, net of an allowance for doubtful
accounts of $70,000 and $112,916, respectively.
10
The following table summarizes the Company's customer accounts receivable
profile as of February 29, 2008:
Amount Range No. of Customers
--------------------------- ----------------
Less than $1,000.00 1,179
$ 1,001.00-$10,000.00 530
$ 10,001.00-$100,000.00 107
$ 100,001.00-$500,000.00 7
$ 500,001.00-$1,000,000.00 1
$1,000,001.00-$2,500,000.00 0
----------------
Total All Accounts 1,824
================
The following table summarizes the significant contractual obligations of the
Company as of February 29, 2008:
Contractual Obligations Total Current 2-3 Years 4-5 Years Thereafter
----------------------------- ---------- -------- ---------- ---------- ----------
Vehicle Leases $3,372,991 $741,620 $1,468,822 $1,162,549 $ -
Salary Continuation Plan 1,650,003 129,388 291,884 342,347 886,384
---------- -------- ---------- ---------- ----------
Total Contractual Obligations $5,022,994 $871,008 $1,760,706 $1,504,896 $ 886,384
========== ======== ========== ========== ==========
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 February 29, 2008, net sales increased 1.9% from
the comparable period in fiscal 2007. For the thirty-nine weeks ended February
29, 2008, net sales increased 2.4% from the comparable period in fiscal 2007.
This year's third quarter cost of sales was 53.5% of net sales compared to 52.0%
for last year's third quarter. This year's third quarter, selling, general, and
administrative expenses were 46.6% of net sales compared to 45.1% for last
year's third quarter. This year's year to date, selling, general and
administrative expenses were 46.1% of net sales compared to 46.4% for last
year's year to date.
The following tables compare manufactured products to resale products:
11
Manufactured Products-Resale Products
Thirteen Weeks Ended Thirteen Weeks Ended
February 29, 2008 March 2, 2007
Sales % %
Manufactured products $ 22,515,573 81.5% $ 21,773,968 80.3%
Resale products 5,118,398 18.5% 5,350,032 19.7%
---------------------- ------------------ ------------------ --------------
Total $ 27,633,971 100.0% $ 27,124,000 100.0%
====================== ================== ================== ==============
Gross margin % %
Manufactured products $ 11,325,146 50.3% $ 11,317,227 52.0%
Resale products 1,510,947 29.5% 1,706,843 31.9%
---------------------- ------------------ ------------------ --------------
Total $ 12,836,093 46.5% $ 13,024,070 48.0%
====================== ================== ================== ==============
Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
February 29, 2008 March 2, 2007
Sales % %
Manufactured products $ 67,595,366 80.9% $ 65,245,644 80.0%
Resale products 15,937,592 19.1% 16,299,506 20.0%
---------------------- ------------------ ------------------ --------------
Total $ 83,532,958 100.0% $ 81,545,150 100.0%
====================== ================== ================== ==============
Gross margin % %
Manufactured products $ 35,130,804 52.0% $ 33,347,221 51.1%
Resale products 4,982,720 31.3% 5,191,101 31.8%
---------------------- ------------------ ------------------ --------------
Total $ 40,113,524 48.0% $ 38,538,322 47.3%
====================== ================== ================== ==============
The Company's gain on sales of assets for the thirteen weeks ended February 29,
2008 in the amount of $32,664 was from the sale of used transportation equipment
for cash.
For last year's thirteen weeks, the gain on sale of assets was $213,728 from the
sale of the Chattanooga warehouse and the sale of used equipment for cash.
The Company's effective tax rate for the thirteen weeks was -11.7% compared to
36.9% for the last year's thirteen weeks and 38.7% for the thirty-nine weeks
this year and 36.9% last year.
MARKET RISK
The principal market 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.
The Company is subject to market risks 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. Futures contracts
have been used occasionally to hedge immaterial amounts of commodity purchases,
but none are presently being used.
12
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 12.
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 third quarter ended February 29, 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.
13
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 20,165 shares of treasury stock for the quarterly
period ended February 29, 2008 in the amount of $57,032. In addition, commission
fees in the sum of $1,155 were paid to the broker.
ISSUER PURCHASES OF EQUITY SECURITIES
(c) Total Number (d) Maximum Number
of Shares (or Approximate
(a) Total (or Units) Dollar Value) of
Number of Purchased as Part Shares (or Units)
Shares (b) Average Price of Publicly that May Yet Be
(or Units) Paid per Share Announced Plans Purchased Under the
Period Purchased (or Unit) or Programs Plans or Programs
December 1 to December 31 2,346 $2.97
January 1 to January 31 5,192 $2.88
February 1 to February 29 12,627 $2.78
Total Third Quarter 20,165 $2.83
14
ITEM 3
------
DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4
------
SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5
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OTHER INFORMATION
Not applicable.
ITEM 6
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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).
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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 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).
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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).
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.
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(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.
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(Registrant)
Dated: April 10, 2008 /s/Mark W. McCutcheon
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Mark W. McCutcheon
President and
Chief Executive Officer
Dated: April 10 , 2008 /s/ Patty Townsend
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Patty Townsend
Vice-President and
Chief Financial Officer
(Principal Accounting Officer)
18