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, 1999
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, 1999.
Outstanding at
Class March 31, 1999
_________________________________ __________________
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 -
February 28, 1999 and May 31, 1998 3
Consolidated Condensed Statements of Income -
Three Months and Nine Months Ended
February 28, 1999 and February 28, 1998 4
Consolidated Condensed Statements of Cash
Flows - Nine Months Ended
February 28, 1999 and February 28, 1998 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
<TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
February 28, May 31,
1999 1998
____________ _________
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 497,335 $ 114,869
Investment Securities $ 580,476 $ 3,077,464
Receivables, net $10,570,610 $11,208,786
Inventories:
Raw material and supplies $ 2,566,011 $ 2,425,367
Finished goods $ 2,232,169 $ 2,359,201
___________ ___________
$ 4,798,180 $ 4,784,568
___________ ___________
Current assets:
Prepaid expenses $ 3,186,774 $ 1,899,294
___________ ___________
Total current assets $19,633,375 $21,084,981
___________ ___________
Property, plant and equipment, net $21,670,483 $22,973,086
Other assets $ 2,866,682 $ 2,866,681
___________ ___________
$44,170,540 $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 $ 6,455,239 $ 5,795,698
Accrued and deferred income taxes $ 254,898 $ 468,711
Other accrued expenses $ 911,972 $ 1,304,349
Current installments of long-term debt $ 0 $ 0
___________ ___________
Total current Liabilities $ 7,622,109 $ 7,568,758
___________ ___________
Long-term debt less current maturities $ 1,505,726 $ 1,284,543
___________ ___________
Deferred income taxes $ 2,006,147 $ 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 $26,894,229 $29,671,907
___________ ___________
$42,612,978 $45,390,656
Less: Cost of common shares in
treasury (1,667,843 shares at
February 28, 1999 and 1,622,843
shares at May 31, 1998) ($ 9,576,420) ($ 9,301,533)
___________ ___________
Total stockholders' equity $33,036,558 $36,089,123
___________ ___________
Total $44,170,540 $46,924,748
___________ ___________
___________ ___________
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements
</FN>
</TABLE>
<TABLE>
GOLDEN ENTERPRISES, INC. & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28,
___________________________ ___________________________
1999 1998 1999 1998
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
REVENUES:
Net Sales $33,781,343 $32,416,627 $96,144,208 $95,458,542
Other operating revenues $ 298,175 $ 140,763 $ 469,257 $ 516,480
Investment income $ 1,365 $ 20,017 $ 61,848 $ 131,091
___________ ___________ ___________ ___________
Total revenues $34,080,883 $32,577,407 $96,675,313 $96,106,113
___________ ___________ ___________ ___________
COSTS AND EXPENSES:
Cost of sales $15,899,497 $14,786,764 $45,116,645 $43,708,758
Selling, general and
administrative expense $17,889,385 $16,567,141 $50,216,560 $48,363,530
Interest $ 0 $ 0 $ 0 $ 0
___________ ___________ ___________ ___________
Total costs and expenses $33,788,882 $31,353,905 $95,333,205 $92,072,288
___________ ___________ ___________ ___________
Income before income taxes $ 292,001 $ 1,223,502 $ 1.342,108 $ 4,033,825
Income taxes $ 106,824 $ 427,419 $ 466,121 $ 1,435,357
___________ ___________ ___________ ___________
Net income $ 185,177 $ 796,083 $ 875,987 $ 2,598,468
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
PER SHARE OF COMMON STOCK:
Net Income $ .01 $ .06 $ .07 $ .21
___________ ___________ ___________ ___________
___________ ___________ ___________ ___________
Weighted average number of common
shares outstanding 12,160,950 12,205,950 12,174,445 12,205,950
___________ ___________ ___________ ____________
___________ ___________ ___________ ____________
Cash dividend paid per share of
common stock $ .06 $ .12 $ .30 $ .36
___________ ___________ ___________ ____________
___________ ___________ ___________ ____________
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements.
</FN>
</TABLE>
<TABLE>
GOLDEN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED
February 28,
___________________________
1999 1998
___________ ___________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 875,987 $ 2,598,468
Adjustment to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization $ 2,461,639 $ 2,327,579
Compensation related to stock plan $ 0 $ 0
Salary Continuation Benefits $ 221,183 $ 176,526
Deferred income taxes $ 23,823 $ 84,311
Gain on sale of equipment ($ 376,975) ($ 392,600)
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable $ 638,176 $ 1,664,584
Decrease (increase) in inventories ($ 13,612) $ 182,692
Decrease (increase) in prepaid
expenses ($ 1,287,480) ($ 608,052)
Decrease (increase) in other
assets-long term ($ 1) $ 185
Increase (decrease) in accounts
payable and checks outstanding
in excess of bank balances $ 659,541 $ 250,556
Increase (decrease) in accrued
income taxes ($ 213,813) ($ 233,605)
Increase (decrease) in accrued
expenses ($ 392,377) ($ 82,131)
___________ ___________
$ 2,596,091 $ 5,968,513
___________ ___________
Cash flows from investing activities:
Purchase of property, plant
and equipment ($ 1,301,573) ($ 3,391,297)
Proceeds from sale of equipment $ 519,512 $ 424,186
Net decrease (increase) in
investment securities $ 2,496,988 $ 2,004,465
___________ ___________
Net cash provided by (used in)
investing activities $ 1,714,927 ($ 962,646)
___________ ___________
Cash flows from financing activities:
Payments of current installments
of long-term debt $ 0 $ 0
Purchase of treasury stock ($ 274,887) $ 0
Proceeds from sale of treasury
stock $ 0 $ 0
Cash dividend paid ($ 3,653,665) ($ 4,394,142)
___________ ___________
Net cash used in financing
activities ($ 3,928,552) ($ 4,394,142)
___________ ___________
Net (decrease) increase in cash
and cash equivalents $ 382,466 $ 611,725
Cash and cash equivalents at
beginning of year $ 114,869 $ 670,974
___________ ___________
Cash and cash equivalents at
end of quarter $ 497,335 $ 1,282,699
___________ ___________
___________ ___________
Supplemental information:
Cash paid during the year for:
Income taxes $ 966,262 $ 1,629,728
Interest $ 0 $ 0
<FN>
See Accompanying Notes to Consolidated Condensed Financial Statements.
</FN>
</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, 1999 and May 31, 1998, and its results of
operations for the three months and nine months ended February
28, 1999 and 1998 and its cash flows for the nine months
ended February 28, 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, 1998
which is incorporated by reference in Form 10-K.
2. The results of operations for the three months and nine months
ended February 28, 1999 and 1998 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 $12.0
million at the end of the third quarter. Net cash provided by
operating activities amounted to $2.6 million for the nine months
this year compared to $6.0 million for last year's first nine months.
Additions to property, plant and equipment, net of disposals,
were $1.2 million this year and $3.4 million last year. Cash dividends
of $3.65 million were paid during this year's first nine months compared
to $4.39 million last year. Cash in the amount of $0.27 million was used
to purchase treasury stock this year and none was used last year, and
$2.50 million of cash was provided by a net decrease in investment
securities this year compared to $2.00 million last year. The Company's
current ratio was 2.58 to 1.00 at February 28, 1999.
Operating Results
For the three months ended February 28, 1999, total revenues
increased 4.62% from the comparable period in fiscal 1998. Cost of
sales was 47.1% of net sales compared to 45.6% last year. Higher
potato and cooking oil costs were the major factors causing the
increase. Selling, general and administrative expenses were 53.0%
of net sales this year and 51.1% last year. The increase in this
percentage was due to an increase in advertising and promotional
expenses, and selling and delivery costs.
For the year-to-date, total revenues decreased 0.59% from the
comparable period in fiscal 1998. Cost of sales was 46.9% of net sales
compared to 45.8% last year. Selling, general and administrative
expenses were 52.2% of net sales this year and 50.7% last year.
The Company's third quarter investment income as a percentage of
pre-tax was 0.47% this year compared to 1.6% last year. There was an
actual dollar decrease in investment income of 93.2%, but pre-tax
income decreased 76.1%.
For the nine months, investment income was 4.6% of pre-tax income
this year and 3.2% last year. For the nine months investment income
dollars decreased 52.8% but pre-tax income decreased 66.7%.
The Company's effective tax rate for the third quarter was 36.6%
compared to 34.9% for last year's third quarter and 34.7% versus
35.6% for the nine months.
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 and is expensed as incurred. To the degree
possible, the Company is verifying that other companies with which
its system interface or rely on are currently year 2000 compliant or
are in the process of becoming compliant.
The Company believes that its year 2000 readiness will be
essentially completed by the target date of May 31, 1999, and that
any impact of failure to achieve Year 2000 Compliance with any
of the Company's systems will be immaterial.
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, 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 thereunto duly authorized.
GOLDEN ENTERPRISES, INC.
________________________
(Registrant)
Dated: April 15, 1999 /s/ John S. Stein
____________________________
John S. Stein
Chairman and
Chief Executive Officer
Dated: April 15, 1999 /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-31-1999
<PERIOD-END> FEB-28-1999
<CASH> 497,335
<SECURITIES> 580,476
<RECEIVABLES> 10,672,610
<ALLOWANCES> 102,000
<INVENTORY> 4,798,180
<CURRENT-ASSETS> 19,633,375
<PP&E> 82,830,738
<DEPRECIATION> 61,160,255
<TOTAL-ASSETS> 44,170,540
<CURRENT-LIABILITIES> 7,622,109
<BONDS> 0
0
0
<COMMON> 9,219,195
<OTHER-SE> 23,817,363
<TOTAL-LIABILITY-AND-EQUITY> 44,170,540
<SALES> 96,144,208
<TOTAL-REVENUES> 96,675,313
<CGS> 45,116,645
<TOTAL-COSTS> 96,333,205
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 27,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,342,108
<INCOME-TAX> 466,121
<INCOME-CONTINUING> 875,987
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 875,987
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
