UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to___________
Commission file number 0-4339
GOLDEN ENTERPRISES, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 63-0250005
________________________________ __________________________
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
Suite 212, 2101 Magnolia Avenue, South
Birmingham, Alabama 35205
________________________________________ ____________
(Address of Principal Executive Offices) (Zip Code)
(205) 326-6101
____________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
___ ____
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of March 31, 1998.
Outstanding at
Class March 31, 1998
_________________________________ __________________
Common Stock, Par Value $0.66 2/3 12,205,950
GOLDEN ENTERPRISES, INC.
INDEX
Part I. Financial Information Page No.
Consolidated Condensed Balance Sheets -
February 28, 1998 and May 31, 1997 3
Consolidated Condensed Statements of Income -
Three Months Ended and Nine Months Ended
February 28, 1998 and February 28, 1997 4
Consolidated Condensed Statements of Cash
Flows - Nine Months Ended
February 28, 1998 and February 28, 1997 5
Notes to Consolidated Condensed Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information 8
<PAGE>
PART 1. FINANCIAL INFORMATION
<TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
February 28, May 31,
1998 1997
____________ _________
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,282,699 $ 670,974
Investment securities $ 2,008,348 $ 4,012,813
Receivables, net $10,313,883 $11,978,467
Inventories:
Raw material and supplies $ 2,660,567 $ 2,495,815
Finished goods $ 2,553,581 $ 2,901,025
___________ ___________
$ 5,214,148 $ 5,396,840
___________ ___________
Current assets:
Prepaid expenses $ 2,808,634 $ 2,200,582
___________ ___________
Total current assets $21,627,712 $24,259,676
___________ ___________
Property, plant and equipment, net $23,522,435 $22,490,304
Other assets $ 2,818,733 $ 2,818,918
___________ ___________
$47,968,880 $49,568,898
___________ ___________
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, principally to banks $ 0 $ 0
Accounts payable & checks outstanding
in excess of bank balance $ 6,871,639 $ 6,621,083
Accrued and deferred income taxes $ 257,435 $ 491,040
Other accrued expenses $ 1,178,904 $ 1,261,035
Current installments of long-term debt $ 0 $ 0
___________ ___________
Total current Liabilities $ 8,307,978 $ 8,373,158
___________ ___________
Long-term debt less current maturities $ 1,225,701 $ 1,049,175
___________ ___________
Deferred income taxes $ 1,978,083 $ 1,893,772
___________ ___________
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 $ 6,504,927 $ 6,504,927
Retained earnings $30,034,529 $31,830,204
___________ ___________
$45,758,651 $47,554,326
Less: Cost of common shares in
treasury (1,566,843 shares at
February 28, 1998 and 1,566,843
shares at May 31, 1997) $-9,301,533 $-9,301,533
___________ ___________
Total stockholders' equity $36,457,118 $38,252,793
___________ ___________
Total $47,968,880 $49,568,898
___________ ___________
___________ ___________
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements
</TABLE>
<TABLE>
GOLDEN ENTERPRISES, INC. & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28,
___________________________ ______________________________
1998 1997 1998 1997
___________ ___________ ____________ ____________
REVENUES:
<S> <C> <C> <C> <C>
Net Sales $32,416,627 $35,574,158 $ 95,458,542 $102,395,765
Other operating revenues $ 140,763 $ 91,955 $ 516,480 $ 516,338
Investment income $ 20,017 $ 70,063 $ 131,091 $ 236,121
___________ ___________ ____________ ___________
Total revenues $32,577,407 $35,736,176 $ 96,106,113 $103,148,224
___________ ___________ ____________ ____________
COSTS AND EXPENSES:
Cost of sales $14,786,764 $16,559,061 $ 43,708,758 $ 46,885,810
Selling, general and
administrative expense $16,567,141 $18,390,622 $ 48,363,530 $ 52,675,013
Interest $ 0 $ 0 $ 0 $ 0
___________ ___________ ____________ ____________
Total costs and expenses $31,353,905 $34,949,683 $ 92,072,288 $ 99,560,823
___________ ___________ ____________ ____________
Income before income taxes $ 1,223,502 $ 786,493 $ 4,033,825 $ 3,587,401
Income taxes $ 427,419 $ 315,462 $ 1,435,357 $ 1,267,394
___________ ___________ ____________ ____________
Net income $ 796,083 $ 471,031 $ 2,598,468 $ 2,320,007
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
PER SHARE OF COMMON STOCK:
Net income $ .06 $ .04 $ .21 $ .19
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Weighted average number of common
shares outstanding 12,205,950 12,205,950 12,205,950 12,205,950
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
Cash dividend paid per share of
common stock $ .12 $ .12 $ .36 $ .3575
___________ ___________ ____________ ____________
___________ ___________ ____________ ____________
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements.
</TABLE>
<TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED
February 28,
___________________________
1998 1997
___________ ___________
Cash flows from operating activities:
<S> <C> <C>
Net income $ 2,598,468 $ 2,320,007
Adjustment to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization $ 2,327,579 $ 2,131,848
Compensation related to stock plan $ 0 $ 0
Salary Continuation Benefits $ 176,526 $ 169,461
Deferred income taxes $ 84,311 $ 67,304
Gain on sale of equipment $ -392,600 $ -284,107
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable $ 1,664,584 $-1,778,774
Decrease (increase) in inventories $ 182,692 $-1,161,349
Decrease (increase) in prepaid
expenses $ -608,052 $ -327,743
Decrease (increase) in other
assets-long term $ 185 $ 0
Increase (decrease) in accounts
payable and checks outstanding
in excess of bank balances $ 250,556 $ 3,312,233
Increase (decrease) in accrued
income taxes $ -233,605 $ 0
Increase (decrease) in accrued
expenses $ -82,131 $ -34,808
___________ ___________
$ 5,968,513 $ 4,414,072
___________ ___________
Cash flows from investing activities:
Purchase of property, plant
and equipment $-3,391,297 $-2,752,752
Proceeds from sale of equipment $ 424,186 $ 272,500
Net decrease (increase) in
marketable securities $ 2,004,465 $ 3,575,214
___________ ___________
Net cash provided by (used in)
investing activities $ -962,646 $ 1,094,962
___________ ___________
Cash flows from financing activities:
Payments of current installments
of long-term debt $ 0 $ 0
Purchase of treasury stock $ 0 $ 0
Proceeds from sale of treasury
stock $ 0 $ 0
Cash dividend paid $-4,394,142 $-4,363,630
___________ __________
Net cash used in financing
activities $-4,394,142 $-4,363,630
___________ ___________
Net (decrease) increase in cash
and cash equivalents $ 611,725 $ 1,145,404
Cash and cash equivalents at
beginning of year $ 670,974 $ 227,173
___________ ___________
Cash and cash equivalents at
end of quarter $ 1,282,699 $ 1,372,577
___________ ___________
___________ ___________
Supplemental information:
Cash paid during the year for:
Income taxes $ 1,629,728 $ 838,023
Interest $ 0 $ 0
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements.
</TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly its financial position as of
February 28, 1998 and May 31, 1997, and its results of
operations for the three and nine months ended February 28,
1998 and 1997 and its cash flows for the nine months ended
February 28, 1998 and February 28, 1997.
The accounting policies followed by the Company are set forth
in note 1 to the Company's financial statements in the Annual
Report to stockholders for fiscal year ended May 31, 1997
which is incorporated by reference in Form 10-K.
2. The results of operations for the three and nine months ended
February 28, 1998 and 1997 are not necessarily indicative of
the results to be expected for the full year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Working Capital was $15.9 million at June 1, 1997 and $13.3
million at the end of the third quarter. Net cash provided by
operating activities amounted to $6.0 million for the nine months this
year compared to $4.4 million for last year's first nine months.
Additions to property, plant and equipment, net of disposals,
were $3.4 million this year and $2.8 million last year. Cash
dividends of $4.39 million were paid during this year's first nine
months compared to $4.36 million last year. No cash was used to
purchase treasury stock this year or last year, and $2.00 million of
cash was provided by a net decrease in investment securities this
year compared to $3.58 million last year. The Company's current ratio
was a 2.60 to 1.00 at February 28, 1998.
Operating Results
For the three months ended February 28, 1998, total revenues
decreased 8.8% from the comparable period in fiscal 1997. Cost of
sales was 45.6% of net sales compared to 46.5% last year. Selling,
general and administrative expenses were 51.1% of net sales this year
and 51.7% last year. The improvement in this percentage continued
to be due to a significant decrease in advertising and promotional
expenses.
For the year-to-date, total revenues decreased 6.8% from the
comparable period in fiscal 1997. Cost of sales was 45.8% of net
sales compared to 45.8% last year, Selling, general and administrtive
expenses were 50.7% of net sales this year and 51.4% last year.
The Company's third quarter investment income as a percentage
of pre-tax income was 1.6% this year compared to 8.9% last year.
This was due to an actual dollar decrease in investment income of
71.4% and an increase in pre-tax income of 55.6%.
For the nine months, investment income was 3.2% of pre-tax income
this year and 6.6% last year. For the nine months, investment income
dollars decreased 44.5% and pre-tax income increased 12.4%.
The Company's effective tax rate for the third quarter was 34.9%
compared to 40.1% for last year's third quarter and 35.6% versus 35.3%
for the nine months.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K - There were no reports on form
8-K filed for the three months ended February 28,
1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
GOLDEN ENTERPRISES, INC.
________________________
(Registrant)
Dated: April 10, 1998 /s/ John S. Stein
____________________________
John S. Stein
Chairman, President and
Chief Executive Officer
Dated: April 10, 1998 /s/ John H. Shannon
_____________________________
John H. Shannon
Vice President/Controller
(Principal Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> FEB-28-1998
<CASH> 1,282,699
<SECURITIES> 2,008,348
<RECEIVABLES> 10,350,883
<ALLOWANCES> 37,000
<INVENTORY> 5,214,148
<CURRENT-ASSETS> 21,627,712
<PP&E> 82,190,941
<DEPRECIATION> 58,668,506
<TOTAL-ASSETS> 47,968,880
<CURRENT-LIABILITIES> 8,307,978
<BONDS> 0
0
0
<COMMON> 9,219,195
<OTHER-SE> 27,237,923
<TOTAL-LIABILITY-AND-EQUITY> 47,968,880
<SALES> 95,458,542
<TOTAL-REVENUES> 96,106,113
<CGS> 43,708,758
<TOTAL-COSTS> 92,072,288
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 27,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,033,825
<INCOME-TAX> 1,435,357
<INCOME-CONTINUING> 2,598,468
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,598,468
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
</TABLE>
