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, l999
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, l999.
Outstanding at
Class September 30, 1999
_____ __________________
Common Stock, Par Value $0.66 2/3 12,160,000
<PAGE>
GOLDEN ENTERPRISES, INC.
INDEX
Part I. Financial Information Page No.
Consolidated Condensed Balance Sheets -
August 31, l999 and May 31, l999 3
Consolidated Condensed Statements of Income -
Three Months Ended August 31, 1999 and 1998 4
Consolidated Condensed Statements of Cash
Flows - Three Months Ended
August 31, 1999 and 1998 5
Notes to Consolidated Condensed Financial
Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7, 8
Part II. Other Information 9
<PAGE>
PART I. FINANCIAL INFORMATION
<TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
August 31, May 31,
1999 1999
___________ ________
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 464,478 $ 227,120
Investment Securities $ 1,069,783 $ 61,941
Receivables, net $10,004,202 $10,235,523
Inventories:
Raw material and supplies $ 2,139,193 $ 2,224,946
Finished goods $ 2,314,739 $ 2,403,663
___________ ___________
$ 4,453,932 $ 4,628,609
___________ ___________
Current assets:
Prepaid expenses $ 2,198,022 $ 2,348,975
___________ ___________
Total current assets $18,190,417 $17,502,168
___________ ___________
Property, plant and equipment, net $20,890,672 $21,525,086
Other assets $ 2,884,498 $ 2,884,498
___________ ___________
$41,965,587 $41,911,752
___________ ___________
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable, principally to banks $ 0 $ 0
Accounts payable & checks outstanding
in excess of bank balance $ 4,816,881 $ 4,652,089
Accrued and deferred income taxes $ 346,967 $ 255,820
Other accrued expenses $ 858,278 $ 952,366
Current installments of long-term debt $ 0 $ 0
___________ ___________
Total current liabilities $ 6,022,126 $ 5,860,275
___________ ___________
Long-term debt less current maturities $ 1,645,660 $ 1,579,453
___________ ___________
Deferred income taxes $ 1,974,403 $ 1,968,005
___________ ___________
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 $26,184,691 $26,361,690
___________ ___________
$41,903,440 $42,080,439
Less: Cost of common shares in treasury
(1,668,793 at August 31, 1999 and
1,667,843 shares at May 31, 1999) $(9,580,042) $(9,576,420)
___________ ___________
Total stockholders' equity $32,323,398 $32,504,019
___________ ___________
Total $41,965,587 $41,911,752
___________ ___________
___________ ___________
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
GOLDEN ENTERPRISES, INC. & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
August 31,
___________________________
1999 1998
___________ ___________
<S> <C> <C>
REVENUES:
Net Sales $31,578,250 $31,544,790
Other operating revenues $ 103,212 $ 86,109
Investment income $ 8,584 $ 37,432
___________ ___________
Total revenues $31,690,046 $31,668,331
___________ ___________
COSTS AND EXPENSES:
Cost of sales $14,577,141 $14,830,694
Selling, general and administrative expense $16,234,955 $15,940,843
Interest $ 0 $ 0
___________ ___________
Total costs and expenses $30,812,096 $30,771,537
___________ ___________
Income before income taxes $ 877,950 $ 896,794
Income taxes $ 325,349 $ 310,630
___________ ___________
Net income $ 552,601 $ 586,164
PER SHARE OF COMMON STOCK:
Net Income $ 0.05 $ 0.05
___________ ___________
___________ ___________
Weighted average number of common
shares outstanding 12,160,444 12,199,776
___________ ___________
___________ ___________
Cash dividend paid per share of common stock $ 0.06 $ 0.12
___________ ___________
___________ ___________
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
August 31,
___________________________
1999 1998
__________ __________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 552,601 $ 586,164
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization $ 851,249 $ 837,418
Compensation related to stock plan $ 0 $ 0
Salary Continuation Benefits $ 66,207 $ 73,728
Deferred income taxes $ 6,398 $ 70
Gain on sale of equipment $ (52,793) $ (53,929)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable $ 231,321 $ 1,301,531
Decrease (increase) in inventories $ 174,677 $ 241,347
Decrease (increase) in prepaid expenses $ 150,953 $ (399,279)
Decrease (increase) in other assets-long term $ 0 $ (1)
Increase (decrease) in accounts payable
and checks outstanding in excess of
bank balances $ 164,792 $ (219,445)
Increase (decrease) in accrued income taxes $ 91,147 $ 161,906
Increase (decrease) in accrued expenses $ (94,088) $ (248,384)
___________ ____________
$ 2,142,464 $ 2,281,126
___________ ___________
Cash flows from investing activities:
Purchase of property, plant and equipment $ (221,766) $ (384,444)
Proceeds from sale of equipment $ 57,724 $ 54,337
Net decrease (increase) in investment securities $(1,007,842) $ (179,712)
___________ ___________
Net cash provided by (used in)
investing activities $(1,171,884) $ (509,819)
___________ ___________
Cash flows from financing activities:
Payments of current installments of long-term debt $ 0 $ 0
Purchase of treasury stock $ (3,622) $ (226,408)
Proceeds from sale of treasury stock $ 0 $ 0
Cash dividend paid $ (729,600) $(1,464,714)
___________ ___________
Net cash used in financing activities $ (733,222) $(1,691,122)
___________ ___________
Net (decrease) increase in cash and cash equivalents $ 237,358 $ 80,185
Cash and cash equivalents at beginning of year $ 227,120 $ 114,869
___________ ___________
Cash and cash equivalents at end of quarter $ 464,478 $ 195,054
___________ ___________
___________ ___________
Supplemental information:
Cash paid during the year for:
Income taxes $ 4,921 $ 148,654
Interest $ 0 $ 0
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements.
</FN>
</TABLE>
<PAGE>
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, 1999 and May 31, l999, and its
results of operations for the three months and ended August 31,
1999 and 1998 and its cash flows for the three months ended August
31, 1999 and 1998.
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, l999 which is
incorporated by reference in Form 10-K.
2. The results of operations for the three months ended August 31, 1999
and 1998 are not necessarily indicative of the results to be expected
for the full year.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Working Capital was $11.6 million at June 1, 1999 and $12.2 million at
the end of the first quarter. Net cash provided by operating activities
amounted to $2.1 million for the quarter this year compared to $2.3
million for last year's first quarter.
Additions to property, plant and equipment, net of disposals, were $0.22
million this year and $0.38 million last year. Cash dividends of $0.73 million
were paid during this year's first quarter compared to $1.46 million last year.
Cash in the amount of $0.0036 million was used to purchase treasury stock this
year, and $0.23 was used last year, and $1.01 million of cash was used
to increase investment securities this year compared to $0.18 million
last year. The Company's current ratio was 3.02 to 1.00 at August 31, 1999.
Operating Results
For the three months ended August 31, l999, total revenues increased 0.07%
from the comparable period in fiscal 1999. Cost of sales was 46.2% of net
sales compared to 47.0% last year. Selling, general and administrative
expenses were 51.4% of net sales this year and 50.5% last year.
The Company's investment income as a percentage of pre-tax income was
1.0% this year compared to 4.2% last year. There was an actual dollar
decrease in investment income of $77.1% and pre-tax income decreased $2.1%.
The Company's effective tax rate for the first quarter was 37.1%
compared to 34.6% for last year's first quarter.
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 investment securities, and commodity prices, affecting
the cost of its raw materials.
The Company's investment securities consist of short-term marketable
securities. Presently these are variable rate money market mutual funds.
Assuming August 31, 1999 variable rate investment levels, a one-point change
in interest rates would impact interest income by $10,698 on an annual
basis.
The Company is subject to market risk with respect to commodities
because its ability to recover increased costs through higher pricing
may be limited by the competitive environment in which it operates.
The Company purchases its raw materials on the open market, under contract
through brokers and directly from growers. Future contracts have been
used occasionally to hedge immaterial amounts of commodity purchases
but none are presently being used.
Year 2000 Compliance
All necessary modifications for Year 2000 compliance were completed
by the target date of May 31, 1999. All information technology systems
and non-IT systems are compliant.
All internal testing has been done, but there is some testing remaining
to be done on some of the applications that interface with other companies.
The Company is set to do any of this testing that is necessary as the
other companies involved become ready.
Internal staff has been used primarily for the conversion, and the cost
of the project is estimated to be approximately $60,000 and has been expensed
as incurred.
Contingency plans for Year 2000 related interruptions have been
developed and include, but are not limited to replacing electronic
applications with manual processes, identification of alternate suppliers
and increasing raw material and finished goods inventory levels.
The most likely worse case scenarios for the Company would be the
temporary inability of suppliers to provide raw materials on a timely
basis and of some customers to order and pay on a timely basis.
To the degree possible, the Company is verifying that other companies
with which its systems, interface or rely on are currently Year 2000
compliant or are in the process of becoming compliant. While the Company
anticipates no major interruption of its business activities, that will
be dependent in part upon the ability of these third parties to be Year 2000
complaint. Although the Company is addressing third party issues as explained
above, it is not able to require the compliance actions by such parties.
Accordingly, while the Company believes its actions in this regard should
have the effect of mitigating Year 2000 risks, it cannot completely eliminate
them or estimate the ultimate effect that Year 2000 risks will have on its
operating results.
<PAGE>
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, 1999.
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: October 7, l999 /s/ John S. Stein
_______________________________________
John S. Stein
Chairman and
Chief Executive Officer
Dated: October 7, 1999 /s/ John H. Shannon
_______________________________________
John H. Shannon
Vice President/Controller
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> AUG-31-1999
<CASH> 464,478
<SECURITIES> 1,069,783
<RECEIVABLES> 10,124,202
<ALLOWANCES> 120,000
<INVENTORY> 4,453,932
<CURRENT-ASSETS> 18,190,417
<PP&E> 83,156,475
<DEPRECIATION> 62,265,803
<TOTAL-ASSETS> 41,965,587
<CURRENT-LIABILITIES> 6,022,126
<BONDS> 0
0
0
<COMMON> 9,219,195
<OTHER-SE> 23,104,203
<TOTAL-LIABILITY-AND-EQUITY> 41,965,587
<SALES> 31,578,250
<TOTAL-REVENUES> 31,690,046
<CGS> 14,577,141
<TOTAL-COSTS> 30,812,096
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 877,950
<INCOME-TAX> 325,349
<INCOME-CONTINUING> 552,601
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 552,601
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
