UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 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 September 30, 1998.
Outstanding at
Class September 30, 1998
_________________________________ __________________
Common Stock, Par Value $0.66 2/3 12,160,950
GOLDEN ENTERPRISES, INC.
INDEX
Part I. Financial Information Page No.
Consolidated Condensed Balance Sheets -
August 31, 1998 and May 31, 1998 3
Consolidated Condensed Statements of Income -
Three Months Ended August 31, 1998 and 1997 4
Consolidated Condensed Statements of Cash
Flows - Three Months Ended
August 31, 1998 and 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
PART 1. FINANCIAL INFORMATION
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
August 31, May 31,
1998 1998
____________ _________
(Unaudited) (Audited)
ASSETS
Cash and cash equivalents $ 195,054 $ 114,869
Investment Securities $ 3,257,176 $ 3,077,464
Receivables, net $ 9,907,255 $11,208,786
Inventories:
Raw material and supplies $ 2,082,052 $ 2,425,367
Finished goods $ 2,461,169 $ 2,359,201
___________ ___________
$ 4,543,221 $ 4,784,568
___________ ___________
Current assets:
Prepaid expenses $ 2,298,573 $ 1,899,294
___________ ___________
Total current assets $20,201,279 $21,084,981
___________ ___________
Property, plant and equipment, net $22,519,705 $22,973,086
Other assets $ 2,866,682 $ 2,866,681
___________ ___________
$45,587,666 $46,924,748
___________ ___________
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, principally to banks $ 0 $ 0
Accounts payable & checks outstanding
in excess of bank balance $ 5,576,253 $ 5,795,698
Accrued and deferred income taxes $ 630,617 $ 468,711
Other accrued expenses $ 1,055,965 $ 1,304,349
Current installments of long-term debt $ 0 $ 0
___________ ___________
Total current Liabilities $ 7,262,835 $ 7,568,758
___________ ___________
Long-term debt less current maturities $ 1,358,271 $ 1,284,543
___________ ___________
Deferred income taxes $ 1,982,394 $ 1,982,324
___________ ___________
Stockholder's Equity:
Common Stock - $.66 - 2/3 par value:
35,000,000 shares Authorized
Issued 13,828,793 shares $ 9,219,195 $ 9,219,195
Additional paid-in capital $ 6,499,554 $ 6,499,554
Retained earnings $28,793,357 $29,671,907
___________ ___________
$44,512,106 $45,390,656
Less: Cost of common shares in
treasury (1,659,843 shares at
August 31, 1998 and 1,622,843
shares at May 31, 1998) $-9,527,940 $-9,301,533
___________ ___________
Total stockholders' equity $34,984,166 $36,089,123
___________ ___________
Total $45,587,666 $46,924,748
___________ ___________
___________ ___________
See Accompanying Notes to Consolidated Condensed Financial Statements
GOLDEN ENTERPRISES, INC. & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
August 31,
___________________________
1998 1997
___________ ___________
REVENUES:
Net Sales $31,544,790 $32,384,378
Other operating revenues $ 86,109 $ 163,986
Investment income $ 37,432 $ 59,843
___________ ___________
Total revenues $31,668,331 $32,608,207
___________ ___________
COSTS AND EXPENSES:
Cost of sales $14,830,694 $14,620,416
Selling, general and
administrative expense $15,940,843 $16,145,498
Interest $ 0 $ 0
___________ ___________
Total costs and expenses $30,771,537 $30,765,914
___________ ___________
Income before income taxes $ 896,794 $ 1,842,293
Income taxes $ 310,630 $ 669,307
___________ ___________
Net income $ 586,164 $ 1,172,986
___________ ___________
___________ ___________
Basic and diluted earnings per share $ .05 $ .10
___________ ___________
___________ ___________
Basic and diluted weighted shares outstanding 12,199,776 12,205,950
___________ ___________
___________ ___________
Cash dividend paid per share of
common stock $ .12 $ .12
___________ ___________
___________ ___________
See Accompanying Notes to Consolidated Condensed Financial Statements.
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
August 31,
___________________________
1998 1997
___________ ___________
Cash flows from operating activities:
Net income $ 586,164 $ 1,172,986
Adjustment to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization $ 837,418 $ 754,752
Compensation related to stock plan $ 0 $ 0
Salary Continuation Benefits $ 73,728 $ 58,842
Deferred income taxes $ 70 $ 22,309
Gain on sale of equipment $ -53,929 $ -127,390
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable $ 1,301,531 $ 1,237,174
Decrease (increase) in inventories $ 241,347 $ 100,104
Decrease (increase) in prepaid
expenses $ -399,279 $ 315,386
Decrease (increase) in other
assets-long term $ -1 $ 0
Increase (decrease) in accounts
payable and checks outstanding
in excess of bank balances $ -219,445 $ 242,926
Increase (decrease) in accrued
income taxes $ 161,906 $ 528,386
Increase (decrease) in accrued
expenses $ -248,384 $ -250,020
___________ ___________
$ 2,281,126 $ 4,055,455
___________ ___________
Cash flows from investing activities:
Purchase of property, plant
and equipment $ -384,444 $-1,395,265
Proceeds from sale of equipment $ 54,337 $ 134,889
Net decrease (increase) in
investment securities $ -179,712 $-1,196,682
___________ ___________
Net cash provided by (used in)
investing activities $ -509,819 $-2,457,058
___________ ___________
Cash flows from financing activities:
Payments of current installments
of long-term debt $ 0 $ 0
Purchase of treasury stock $ -226,408 $ 0
Proceeds from sale of treasury
stock $ 0 $ 0
Cash dividend paid $-1,464,714 $-1,464,714
___________ __________
Net cash used in financing
activities $-1,691,122 $-1,464,714
___________ ___________
Net (decrease) increase in cash
and cash equivalents $ 80,185 $ 133,683
Cash and cash equivalents at
beginning of year $ 114,869 $ 670,974
___________ ___________
Cash and cash equivalents at
end of quarter $ 195,054 $ 804,657
___________ ___________
___________ ___________
Supplemental information:
Cash paid during the year for:
Income taxes $ 148,654 $ 118,612
Interest $ 0 $ 0
See Accompanying Notes to Consolidated Condensed Financial Statements.
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly its financial position as of
August 31, 1998 and May 31, 1998, and its results of
operations for the three months ended August 31, 1998 and 1997
and its cash flow for the three months ended August 31, 1998
and 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, 1998
which is incorporated by reference in Form 10-K.
2. The results of operations for the three months ended August
31, 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 $13.5 million at June 1, 1998 and $12.9
million at the end of the first quarter. Net cash provided by
operating activities amounted to $2.3 million for the quarter this
year compared to $4.1 million for last year's first quarter.
Additions to property, plant and equipment, net of disposals,
were $0.38 million this year and $1.39 million last year. Cash
dividends of $1.46 million were paid during this year's first
quarter compared to $1.46 million last year. Cash in the amount of
$0.23 million was used to purchase treasury stock this year, and
none was used last year, and $0.18 million of cash was used to
increase investment securities this year compared to $1.20 million
last year. The Company's current ratio was 2.78 to 1.00 at August
31, 1998.
Operating Results
For the three months ended August 31, 1998, total revenues
decreased 2.9% from the comparable period in fiscal 1998. Cost of
sales was 47.0% of net sales compared to 45.1% last year. Selling,
general and administrative expenses were 50.5% of net sales this
year and 49.9% last year.
The Company's investment income as a percentage of pre-tax
income was 4.2% this year compared to 3.2% last year. There was an
actual dollar decrease in investment income of $37.4%, but pre-tax
income decreased 51.3%.
The Company's effective tax rate for the first quarter was
34.6% compared to 36.3% for last year's first quarter.
Year 2000 Compliance
As previously reported in the Company's MD&A for the year
ended May 31, 1998, the necessary modifications for year 2000
Compliance are being made and all of them will be completed in ample
time to avoid problems. The projected date for completion of all
modifications is May 31, 1999. Internal staff is being used
primarily for this conversion and the cost of the project is
immaterial to the Company.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K - There were no reports on form
8-K filed for the three months ended August 31,
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: October 8, 1998 /s/ John S. Stein
____________________________
John S. Stein
Chairman, President and
Chief Executive Officer
Dated: October 8, 1998 /s/ John H. Shannon
_____________________________
John H. Shannon
Vice President/Controller
(Principal Accounting
Officer)
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