Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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 26, 2010
-----------------
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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).Yes ( ) No ( )
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company (as
defined in Rule 12b-2 of the Act). (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer
--- --- ---
Smaller reporting company 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, 2010.
Outstanding at
Class March 31, 2010
----- --------------
Common Stock, Par Value $0.66 2/3 11,746,632
EXCHANGE ACT REPORTS AVAILABLE ON COMPANY WEBSITE
Under "SEC Filings" on the "Financial" page of the Company's website located at
www.goldenflake.com, links to the following filings are made available as soon
as reasonably practicable after they are electronically filed with or furnished
to the Securities and Exchange Commission (the "SEC")" the Company's Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K, Proxy Statement on Schedule 14A related to the Company's Annual
Shareholders Meeting, and any amendments to those reports or statements filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Act of 1934. You
may also read and copy any materials we file with the SEC at the SEC's Public
Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet website located at
http://www.sec.gov that contains the information we file or furnish
electronically with the SEC.
2
GOLDEN ENTERPRISES, INC.
INDEX
Part I. FINANCIAL INFORMATION Page No.
Item 1 Financial Statements (unaudited)
Condensed Consolidated Balance Sheets
February 26, 2010 (unaudited) and May 29, 2009 4
Condensed Consolidated Statements of Income (unaudited)
Thirteen Weeks and Thirty-Nine Weeks Ended February 26, 2010
and February 27, 2009 5
Condensed Consolidated Statements of Cash Flows
(unaudited)- Thirty-Nine Weeks Ended February 26, 2010 and
February 27, 2009 6
Notes to Condensed Consolidated Financial
Statements (unaudited) 8
Report of Independent Registered Public Accounting Firm 10
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3 Quantitative and Qualitative
Disclosure About Market Risk 14
Item 4 Controls and Procedures 14
Part II. OTHER INFORMATION 15
Item 1 Legal Proceedings 15
Item 1-A Risk Factors 15
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 15
Item 3 Defaults Upon Senior Securities 16
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 5 Other Information 16
Item 6 Exhibits 17
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
February 26, May 29,
2010 2009
------------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 552,502 $ 1,178,060
Receivables, net 9,606,996 9,297,434
Inventories:
Raw materials and supplies 1,588,951 1,693,655
Finished goods 2,969,999 3,318,497
------------- -------------
4,558,950 5,012,152
------------- -------------
Prepaid expenses 1,984,131 1,608,790
Deferred income taxes 676,480 676,480
------------- -------------
Total current assets 17,379,059 17,772,916
------------- -------------
Property, plant and equipment, net 22,307,135 16,056,235
Other assets 2,511,138 2,575,825
------------- -------------
Total $ 42,197,332 $ 36,404,976
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Checks outstanding in excess of bank balances $ 2,057,684 $ 1,691,230
Accounts payable 5,167,404 3,437,482
Accrued income taxes 718,102 286,383
Current portion of long-term debt 334,221 -
Other accrued expenses 4,310,154 5,157,323
Salary continuation plan 151,757 142,948
Line of credit outstanding 2,901,449 1,454,155
------------- -------------
Total current liabilities 15,640,771 12,169,521
------------- -------------
LONG-TERM LIABILITIES
Notes payable-bank, non-current 3,503,287 2,743,440
Salary continuation plan 1,339,631 1,414,303
Deferred income taxes 669,815 669,815
------------- -------------
Total long-term liabilities 5,512,733 4,827,558
------------- -------------
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 16,215,478 14,579,547
------------- -------------
31,932,627 30,296,696
Less: Cost of common shares in treasury (2,082,161
shares at February 26, 2010
and 2,082,161 shares at May 29, 2009) (10,888,799) (10,888,799)
------------- -------------
Total stockholder's equity 21,043,828 19,407,897
------------- -------------
Total $ 42,197,332 $ 36,404,976
============= =============
See Accompanying Notes to Condensed Consolidated Financial Statements
4
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
February 26, February 27, February 26, February 27,
2010 2009 2010 2009
------------- ------------- ------------- -------------
Net sales $ 31,348,255 $ 30,162,920 $ 95,392,485 $ 89,168,938
Cost of sales 16,081,587 15,682,764 49,217,690 46,859,630
------------- ------------- ------------- -------------
Gross margin 15,266,668 14,480,156 46,174,795 42,309,308
Selling, general and administrative expenses 13,758,294 13,330,016 41,955,461 40,219,194
------------- ------------- ------------- -------------
Operating income 1,508,374 1,150,140 4,219,334 2,090,114
------------- ------------- ------------- -------------
Other income (expenses):
Gain on sale of assets 145,172 37,265 189,477 886,943
Interest expense (94,238) (41,550) (231,244) (149,802)
Other income 59,221 32,688 118,206 57,875
------------- ------------- ------------- -------------
Total other income (expenses) 110,155 28,403 76,439 795,016
------------- ------------- ------------- -------------
Income before income taxes 1,618,529 1,178,543 4,295,773 2,885,130
Income taxes 604,297 443,784 1,557,649 1,097,787
------------- ------------- ------------- -------------
Net income $ 1,014,232 $ 734,759 $ 2,738,124 $ 1,787,343
============= ============= ============= =============
PER SHARE OF COMMON STOCK
Basic earnings $ 0.08 $ 0.06 $ 0.23 $ 0.15
Diluted earnings $ 0.08 $ 0.06 $ 0.23 $ 0.15
Weighted average number of common
stock shares outstanding:
Basic 11,746,632 11,746,632 11,746,632 11,762,658
Diluted 11,746,632 11,746,632 11,746,632 11,762,658
Cash dividends paid per share of
common stock $ 0.0313 $ 0.0313 $ 0.0938 $ 0.0938
See Accompanying Notes to Condensed Consolidated Financial Statements
5
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
February 26, 2010 February 27, 2009
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 95,082,923 $ 88,751,634
Miscellaneous income 118,206 57,875
Cash paid to suppliers & employees (45,745,849) (46,189,448)
Cash paid for operating expenses (42,661,970) (40,292,435)
Income taxes paid (1,125,930) (866,033)
Interest expenses paid (231,244) (149,802)
------------------ ------------------
Net cash provided by operating activities 5,436,136 1,311,791
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (8,095,255) (1,890,969)
Proceeds from sale of property, plant and
equipment 227,938 2,736,542
------------------ ------------------
Net cash (used in) provided by investing
activities (7,867,317) 845,573
CASH FLOWS FROM FINANCING ACTIVITIES
Debt proceeds 16,828,882 15,635,605
Debt repayments (14,287,520) (15,140,965)
Change in checks outstanding in excess of
bank balances 366,454 583,164
Cash dividends paid (1,102,193) (1,104,105)
Purchases of treasury shares - (75,282)
------------------ ------------------
Net cash provided by (used in) financing
activities 1,805,623 (101,583)
Net change in cash and cash equivalents (625,558) 2,055,781
Cash and cash equivalents at beginning of
period 1,178,060 442,756
------------------ ------------------
Cash and cash equivalents at end of period $ 552,502 $ 2,498,537
================== ==================
See Accompanying Notes to Condensed Consolidated Financial Statements
6
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 26, 2010 AND FEBRUARY 27, 2009
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
February 26, February 27,
2010 2009
------------- -------------
Net Income $ 2,738,124 $ 1,787,343
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,805,894 1,743,218
Gain on sale of property and equipment (189,477) (886,943)
Changes in operating assets and liabilities:
Change in receivables - net (309,562) (417,304)
Change in inventories 453,202 (723,470)
Change in prepaid expenses (375,341) (445,657)
Change in other assets 64,687 364,791
Change in accounts payable 1,729,922 153,536
Change in accrued expenses (847,169) (437,534)
Change in salary continuation (65,863) (57,943)
Change in accrued income taxes 431,719 231,754
------------- -------------
Net cash provided by operating activities $ 5,436,136 $ 1,311,791
============= =============
7
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 Company's
Annual Report on Form 10-K for year ended May 29, 2009.
2. The consolidated results of operations for the thirty-nine weeks ended
February 26, 2010 are not necessarily indicative of the results to be
expected for the fifty-two week fiscal year ending May 28, 2010.
3. The following tables summarize the prepaid assets accounts at February 26,
2010 and May 29, 2009.
Prepaid Breakdown
February 26, 2010 May 29, 2009
------------------- --------------
Truck Shop Supplies $ 674,101 $ 687,570
Insurance Deposit 138,959 138,959
Slotting Fees 171,191 221,325
Deferred Advertising Fees 285,372 10,000
Prepaid Insurance 257,707 284,095
Prepaid Taxes/Licenses 282,766 200,694
Prepaid Dues/Supplies 127,156 28,655
Other 46,879 37,492
------------------- --------------
$ 1,984,131 $ 1,608,790
=================== ==============
4. The principal raw materials used in the manufacture of the Company's snack
food products are potatoes, corn, pork skin pellets, 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.
8
6. 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 26,
2010 and February 27, 2009:
----------- -----------
Thirty-Nine Thirty-Nine
Weeks Ended Weeks Ended
February February
26, 27,
2010 2009
----------- -----------
Weighted average number of common shares used in
computing basic earnings per share 11,746,632 11,762,658
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 11,746,632 11,762,658
=========== ===========
Stock options excluded from the above reconciliation
because they are anti-dilutive 329,000 369,000
=========== ===========
7. The Company has a letter of credit in the amount of $2,057,014 outstanding
at February 26, 2010 compared to $2,264,857 at February 27, 2009. The
letter of credit supports the Company's commercial self-insurance program.
8. The Company has a line-of-credit agreement with a local bank that permits
borrowing up to $3 million. During the quarter ended November 27, 2009,
this line of credit was renewed and the limit was increased from $2 million
to $3 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 26,
2010 was $2,901,449 with an interest rate of 4.00%, leaving the Company
with $98,551 of credit availability. The Company's line-of-credit debt as
of February 27, 2009 was $1,979,008 with an interest rate of 4.00%, leaving
the Company with $20,992 of credit availability.
9. The Company has a note payable with a balance due as of February 26, 2010
of $3.8 million. The loan was established as a construction loan in March
2009 to help fund the construction of a process water treatment facility.
In September 2009, the note converted to a 10-year fixed-rate note at 4.25%
for $4.0 million. The Company has been making monthly payments on the note
and intends to repay it at the earliest practicable date, as there are no
prepayment penalties.
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
9
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 26, 2010, the related condensed
consolidated statements of income for the thirteen week and thirty-nine week
periods ended February 26, 2010 and February 27, 2009, and the related condensed
statements of cash flows for the thirty-nine week periods ended February 26,
2010 and February 27, 2009. 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 referred to above 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 May 29, 2009
and the related consolidated statements of income, changes in stockholders'
equity and cash flows for the fiscal year then ended (not presented herein), and
in our report dated August 6, 2009 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 May 29, 2009, 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 8, 2010
10
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 May 29, 2009. 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 May 29, 2009. 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 or failure to be able to procure an
adequate supply of pork skin pellets. Raw materials used in manufacturing and
processing the Company's snack food products are purchased on the open market
and under contract, both 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 both 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 the independent distributors and route representatives who are supplied
with selling inventory by the Company's trucking fleet. All of the route
representatives are employees of the Company and use the Company's direct-store
delivery system.
Liquidity and Capital Resources
At February 26, 2010 and May 29, 2009, working capital was $1,738,288 and
$5,603,395, respectively.
The Company did not purchase shares of treasury stock this quarter. The
Company's current ratio was 1.11 to 1.00 at February 26, 2010 compared to 1.46
to 1.00 at May 29, 2009.
11
Accounts Receivable and Allowance for Doubtful Accounts
At February 26, 2010 and May 29, 2009 the Company had accounts receivables in
the amount of $9,606,996 and $9,297,434, net of an allowance for doubtful
accounts of $70,000 and $127,130, respectively.
The following table summarizes the Company's customer accounts receivable
profile as of February 26, 2010 and May 29, 2009:
Amount Range No. of Customers
------------ ----------------
February 26, 2010 May 29, 2009
Less than $1,000.00 1,045 1,055
$1,001.00-$10,000.00 532 542
$10,001.00-$100,000.00 126 137
$100,001.00-$500,000.00 8 7
$500,001.00-$1,000,000.00 2 2
$1,000,001.00-$2,500,000.00 0 0
------------ ---------
Total All Accounts 1,713 1,743
============ =========
Contractual Obligations
The following table summarizes the significant contractual obligations of the
Company as of February 26, 2010:
Contractual Obligations Total Current 2-3 Years 4-5 Years Thereafter
----------------------- ----------- ----------- ----------- ----------- -----------
Long-Term Debt $3,837,508 $ 334,221 $ 712,764 $ 777,187 $2,013,336
Vehicle Lease 2,238,917 584,065 1,168,130 486,722 -
Salary Continuation Plan 1,491,388 151,757 342,347 401,535 595,749
----------- ----------- ----------- ----------- -----------
Total Contractual Obligations $7,567,813 $1,070,043 $2,223,241 $1,665,444 $2,609,085
=========== =========== =========== =========== ===========
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 26, 2010, net sales increased 3.9% from
the comparable period in fiscal 2009. For the thirty-nine weeks ended February
26, 2010, net sales increased 7.0% from the comparable period in fiscal 2009.
This year's third quarter cost of sales was 51.3% of net sales compared to 52.0%
for last year's third quarter. This year's year to date cost of sales was 51.6%
of net sales compared to 52.6% for last year's year to date. This year's third
quarter, selling, general and administrative expenses were 43.9% of net sales
compared to 44.2% for last year's third quarter. This year's year to date
selling, general and administrative expenses were 44.0% of net sales compared to
45.1% for last year's year to date.
12
The following tables compare manufactured products to resale products:
Manufactured Products-Resale Products
Thirteen Weeks Ended Thirteen Weeks Ended
February 26, 2010 February 27, 2009
Sales % %
Manufactured Products $ 24,628,048 78.6% $ 24,520,312 81.3%
Resale Products 6,720,207 21.4% 5,642,608 18.7%
------------- ---------- ------------- ----------
Total $ 31,348,255 100.0% $ 30,162,920 100.0%
============= ========== ============= ==========
Gross Margin % %
Manufactured Products $ 12,897,151 52.4% $ 12,423,665 50.7%
Resale Products 2,369,517 35.3% 2,056,491 36.4%
------------- -------------
Total $ 15,266,668 48.7% $ 14,480,156 48.0%
============= =============
Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
February 26, 2010 February 27, 2009
Sales % %
Manufactured Products $ 75,346,269 79.0% $ 71,583,131 80.3%
Resale Products 20,046,216 21.0% 17,585,807 19.7%
-------------- ----------- -------------- -----------
Total $ 95,392,485 100.0% $ 89,168,938 100.0%
============== =========== ============== ===========
Gross Margin % %
Manufactured Products $ 38,977,965 51.7% $ 35,726,738 49.9%
Resale Products 7,196,830 35.9% 6,582,570 37.4%
-------------- --------------
Total $ 46,174,795 48.4% $ 42,309,308 47.4%
============== ==============
The Company's gain on sale of assets for the thirteen weeks ended February 26,
2010 in the amount of $145,172 was from the (i) sale of used transportation
equipment for $9,034 and (ii) from the sale of warehouse property at
Jacksonville, Florida for $136,138.
For last year's thirteen weeks, the gain on sale of assets was $37,265 from the
donation and sale of used transportation equipment.
The Company's effective tax rate for the thirteen weeks was 37.3% compared to
37.7% for the last year's thirteen weeks and 36.3% for the thirty-nine weeks
this year and 38.0% last year.
Market Risk
The principal market's risks (i.e., the risk of loss arising from adverse
changes in market rates and prices), to which the Company is exposed, are
commodity prices affecting the cost of its raw materials.
13
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 and under contract through brokers or directly from
growers. Future contracts have been used occasionally to hedge immaterial
amounts of commodity purchases, but none are presently being used.
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 plans to 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.
Subsequent Events
Not applicable.
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. Some of the 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
Pursuant to Item 305(e) of Regulation S-K (Section 229.305(e)) the Company is
not required to provide the Information under this item, as it is a "Smaller
Reporting Company" as defined by Rule 229.10(f)(1).
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.
14
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 fiscal quarter ended February 26,
2010 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.
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
2009 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.
The Company did not purchase any shares of its stock for the quarterly period
ended February 26, 2010.
ISSUER PURCHASES OF EQUITY SECURITIES
----------------------------------------------------------------------------------------------
Period (a) Total (b) Average Price (c) Total Number (d) Maximum Number
Number of Paid per Share of Shares (or Approximate
Shares (or Unit) (or Units) Dollar Value) of
(or Units) Purchased as Shares (or Units)
Purchased Part of Publicly that May Yet Be
Announced Plans Purchased Under
or Programs the Plans or
Programs
----------------------------------------------------------------------------------------------
November 28 to December 25 -0- -0- -0- -0-
----------------------------------------------------------------------------------------------
December 26 to January 29 -0- -0- -0- -0-
----------------------------------------------------------------------------------------------
January 30 to February 26 -0- -0- -0- -0-
----------------------------------------------------------------------------------------------
Total Third Quarter -0- -0- -0- -0-
----------------------------------------------------------------------------------------------
15
ITEM 3
------
DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4
------
SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5
------
OTHER INFORMATION
Not applicable.
16
ITEM 6
------
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).
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.
17
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 Registrant 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).
10.9 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).
18
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).
10.16 Real Property Purchase and Sale Agreement dated May 2, 2008 whereby Golden
Flake Snack Foods, Inc., a wholly-owned subsidiary of Golden Enterprises,
Inc. re-acquired certain real property in Nashville, Tennessee
(incorporated by reference to Exhibit 10.16 to Golden Enterprises, Inc.,
May 30, 2008 Form 10-K filed with the Commission).
10.18 Purchase and Sale Agreement executed by and between Golden Flake Snack
Foods, Inc. as Seller, and Michael L. Rankin, as Purchaser, with an
effective date of August 20 2008, for the sale of real property located at
2926 Kraft Drive, Nashville, County of Davidson, State of Tennessee and
undeveloped real property located across the road from 2926 Kraft Drive
(incorporated by reference to Exhibit 10.18 to Golden Enterprises, Inc.,
August 29, 2008 Form 10-Q filed with the Commission).
10.19 Purchase and Sale Agreement executed by and between Golden Flake Snack
Foods, Inc., as Seller, and Steve Bacorn, as Purchaser, with an effective
date of July 7, 2008, for the sale of land and improvements located in Cobb
County, Address being 321 Marble Mill Road, Marietta, Georgia (incorporated
by reference to Exhibit 10.19 to Golden Enterprises, Inc., August 29, 2008
Form 10-Q filed with the Commission).
10.20 Amendment to Salary Continuation Plan for Mark W. McCutcheon dated
December 30, 2008 (incorporated by reference to Exhibit 10.20 Golden
Enterprises, Inc. February 27, 2009 Form 10-Q filed with the Commission).
10.21 Purchase and Sale Agreement executed by and between Golden Flake Snack
Foods, Inc., as Seller, And Rodney D. Evans and Everett James Crowell, as
Purchasers, with an effective date of December 14, 2009, for the sale of
land and improvements located in Duval County, at 4771 Phyllis St.,
Jacksonville, Florida (incorporated by reference to Exhibit 10.21 Golden
Enterprises, Inc. November 27, 2009 Form 10-Q filed with the Commission).
14.1 Golden Enterprises, Inc.'s Code of Conduct and Ethics adopted by the Board
of Directors on April 8, 2004 (incorporated by reference to Exhibit 14.1 to
Golden Enterprises, Inc. May 31, 2004 From 10-K with the Commission).
(18) Letter Re: Change in Accounting Principles
18.1 Letter from the Registrant's Independent Accountant dated August 12, 2005
indicating a change in the method of applying accounting practices followed
by the Registrant for the fiscal year ended June 3, 2005 (incorporated by
reference to Exhibit 18.1 to Golden Enterprises, Inc. June 3, 2005 Form
10-K filed with the Commission).
19
21 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to
Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the Commission)
(31) Certifications
31.1 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.
(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.
-----------------------
(Registrant)
Dated: April 15, 2010 /s/Mark W. McCutcheon
-------------- ---------------------
Mark W. McCutcheon
President and
Chief Executive Officer
Dated:April 15, 2010 /s/ Patty Townsend
-------------- ------------------
Patty Townsend
Vice-President and
Chief Financial Officer
(Principal Accounting Officer)
2
