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 (twenty-six weeks) period ended November 27, 2009
-----------------
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.)
One Golden Flake Drive
Birmingham, Alabama 35205
---------------------------------------- ----------------------
(Address of Principle Executive Offices) (Zip Code)
(205) 458-7316
--------------
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title Of Class Name of exchange on which registered
-------------- ------------------------------------
Capital Stock, Par Value $0.66 2/3 NASDAQ
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, or 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 December 31, 2009.
Outstanding at
Class December 31, 2009
----- -----------------
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
Page No.
Part I. FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited)
Condensed Consolidated Balance Sheets
November 27, 2009 (unaudited) and May 29, 2009 4
Condensed Consolidated Statements of Income (unaudited)
Thirteen Weeks and Twenty-Six Weeks Ended November 27, 2009
and November 28, 2008 5
Condensed Consolidated Statements of Cash Flows (unaudited)-
Twenty-Six Weeks Ended November 27, 2009 and November 28,
2008 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)
November 27, May 29,
2009 2009
---- ----
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 713,257 $ 1,178,060
Receivables, net 8,754,558 9,297,434
Inventories:
Raw materials and supplies 1,750,823 1,693,655
Finished goods 3,837,442 3,318,497
------------ ------------
5,588,265 5,012,152
------------ ------------
Prepaid expenses 2,106,239 1,608,790
Deferred income taxes 676,480 676,480
------------ ------------
Total current assets 17,838,799 17,772,916
------------ ------------
Property, plant and equipment, net 21,408,968 16,056,235
Other assets 2,614,548 2,575,825
------------ ------------
Total $ 41,862,315 $ 36,404,976
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Checks outstanding in excess of bank balances $ 1,428,857 $ 1,691,230
Accounts payable 5,738,342 3,437,482
Accrued income taxes 516,563 286,383
Current portion of long-term debt 330,695 -
Other accrued expenses 4,751,031 5,157,323
Salary continuation plan 148,762 142,948
Line of credit outstanding 2,927,526 1,454,155
------------ ------------
Total current liabilities 15,841,776 12,169,521
------------ ------------
LONG-TERM LIABILITIES
Notes payable - bank, non-current 3,588,717 2,743,440
Salary continuation plan 1,365,019 1,414,303
Deferred income taxes 669,815 669,815
------------ ------------
Total long-term liabilities 5,623,551 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 15,568,638 14,579,547
------------ ------------
31,285,787 30,296,696
Less: Cost of common shares in treasury
(2,082,161 shares at November 27, 2009
and 2,082,161 shares at May 29, 2009) (10,888,799) (10,888,799)
------------ ------------
Total stockholder's equity 20,396,988 19,407,897
------------ ------------
Total $ 41,862,315 $ 6,404,976
============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements
4
GOLDEN ENTERPRISES, INC. AND SUDSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Weeks Weeks Weeks
Ended Ended Ended Ended
November 27, 2009 November 28, 2008 November 27, 2009 November 28, 2008
------------------- ------------------- ------------------- -------------------
Net sales $ 31,452,068 $ 29,155,330 $ 64,044,230 $ 59,006,018
Cost of sales 16,534,907 15,791,595 33,136,103 31,176,866
------------------ ------------------ ------------------ ------------------
Gross margin 14,917,161 13,363,735 30,908,127 27,829,152
Selling, general and administrative expenses 13,867,314 13,010,121 28,197,167 26,889,178
------------------ ------------------ ------------------ ------------------
Operating income 1,049,847 353,614 2,710,960 939,974
------------------ ------------------ ------------------ ------------------
Other (expenses) income:
Gain on sale of assets 7,374 804,767 44,305 849,678
Interest expense (90,147) (48,308) (137,006) (108,252)
Other income 48,235 15,691 58,985 25,187
------------------ ------------------ ------------------ ------------------
Total other (expenses) income (34,538) 772,150 (33,716) 766,613
------------------ ------------------ ------------------ ------------------
Income before income taxes 1,015,309 1,125,764 2,677,244 1,706,587
Income taxes 331,301 427,646 953,352 654,003
------------------ ------------------ ------------------ ------------------
Net income $ 684,008 $ 698,118 $ 1,723,892 $ 1,052,584
================== ================== ================== ==================
PER SHARE OF COMMON STOCK
Basic earnings $ 0.06 $ 0.06 $ 0.15 $ 0.09
Diluted earnings $ 0.06 $ 0.06 $ 0.15 $ 0.09
Weighted average number of common
stock share outstanding:
Basic 11,746,632 11,757,956 11,746,632 11,770,671
Diluted 11,746,632 11,757,956 11,746,632 11,770,671
Cash dividends paid per share of
common stock $ 0.0313 $ 0.0313 $ 0.0626 $ 0.0626
See Accompanying Notes to Condensed Consolidated Financial Statements
5
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
November 27, 2009 November 28, 2008
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $ 64,587,106 $ 58,992,022
Miscellaneous income 58,985 25,187
Cash paid to suppliers and employees (30,584,447) (30,357,320)
Cash paid for operating expenses (28,840,596) (26,931,843)
Income taxes paid (723,172) (521,346)
Interest expenses paid (137,006) (108,252)
------------------ ------------------
Net cash provided by operating activities 4,360,870 1,098,448
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (6,542,240) (670,111)
Proceeds from sale of property, plant and equipment 64,398 2,687,892
------------------ ------------------
Net cash (used in) provided by investing activities (6,477,842) 2,017,781
CASH FLOWS FROM FINANCING ACTIVITIES
Debt proceeds 12,644,869 10,039,428
Debt repayments (9,995,526) (9,528,360)
Change in checks outstanding in excess of bank
balances (262,373) (817,370)
Cash dividends paid (734,801) (736,717)
Purchases of treasury shares - (75,282)
------------------ ------------------
Net cash provided by (used in) financing activities 1,652,169 (1,118,301)
Net change in cash and cash equivalents (464,803) 1,997,928
Cash and cash equivalents at beginning of period 1,178,060 442,756
------------------ ------------------
Cash and cash equivalents at end of period $ 713,257 $ 2,440,684
================== ==================
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 TWENTY-SIX WEEKS ENDED NOVEMBER 27, 2009 AND NOVEMBER 28, 2008
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
November 27, 2009 November 28, 2008
------------------- -------------------
Net Income $ 1,723,892 $ 1,052,584
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,169,414 1,175,082
Gain on sale of property and equipment (44,305) (849,678)
Changes in operating assets and liabilities:
Change in receivables - net 542,876 (13,996)
Change in inventories (576,113) (284,686)
Change in prepaid expenses (497,449) (354,285)
Change in other assets (38,723) 306,663
Change in accounts payable 2,300,860 264,557
Change in accrued expenses (406,292) (293,415)
Change in salary continuation (43,470) (37,035)
Change in accrued income taxes 230,180 132,657
------------------ ------------------
Net cash provided by operating activities $ 4,360,870 $ 1,098,448
================== ==================
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 Golden
Enterprises, Inc. and subsidiary ("the Company") Annual Report on Form 10-K
for year ended May 29, 2009.
2. The consolidated results of operations for the twenty-six weeks ended
November 27, 2009 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 November 27,
2009 and May 29, 2009.
November 27, 2009 May 29, 2009
------------------- -------------------
Truck shop supplies $ 666,759 $ 687,570
Insurance deposit 138,959 138,959
Slotting fees 160,548 221,325
Deferred advertising fees 560,748 10,000
Prepaid insurance 343,698 284,095
Prepaid taxes/licenses 138,128 200,694
Prepaid dues/supplies 76,810 28,655
Other 20,589 37,492
------------------- -------------------
$ 2,106,239 $ 1,608,790
=================== ===================
4. The principal raw materials used in the manufacture of the Company's snack
food products are potatoes, corn, 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 twenty-six weeks ended November 27, 2009
and November 28, 2008:
------------------- -------------------
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
November 27, 2009 November 28, 2008
------------------- -------------------
Weighted average number of common
shares used in computing basic
earnings per share 11,746,632 11,770,671
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 11,770,671
=================== ===================
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 November 27, 2009 compared to $2,264,857 at May 29, 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 11/27/2009, 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 November 27, 2009 was
$2,927,526 with an interest rate of 4.00%, leaving the Company with $72,474
of credit availability. The Company's line-of-credit debt as of May 29,
2009 was $1,454,155 with an interest rate of 4.00%, leaving the Company
with $545,845 of credit availability.
9. The interest rate on the Company's note payable is fixed at 4.25% over the
10-year term of the loan. The Company's total bank debt was increased by
$1,175,972 for the period ended November 27, 2009 compared to May 29, 2009
when the Company had $2,743,440 in bank debt. There are no prepayment
penalties on this note and the Company intends to repay it at the earliest
practicable date.
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.
11. On December 14, 2009, the Company executed a Purchase and Sale Agreement to
sell property located at 4771 Phyllis Street, Jacksonville, Florida for
$160,000. The property is scheduled to close in the Company's third quarter
in 2010.
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 November 27, 2009, and the related
condensed consolidated statements of income and cash flows for the twenty-six
week periods ended November 27, 2009 and November 28, 2008. 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 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 operations, 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.
Birmingham, Alabama
January 7, 2010 DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP
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. Raw materials used in manufacturing
and processing the Company's snack food products are purchased on the open
market and under contract 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 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 November 27, 2009 and May 29, 2009, working capital was $1,997,023 and
$5,603,395, respectively.
The Company did not purchase shares of treasury stock this quarter. The
Company's current ratio was 1.13 to 1.00 at November 27, 2009 compared to 1.46
to 1.00 at May 29, 2009.
11
Accounts Receivable and Allowance for Doubtful Accounts
At November 27, 2009 and May 29, 2009 the Company had accounts receivables in
the amount of $8,754,558 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 November 27, 2009 and May 29, 2009:
Amount Range No. of Customers
------------ ----------------
November 27, 2009 May 29, 2009
Less than $1,000.00 1,029 1,055
$1,001.00-$10,000.00 544 542
$10,001.00-$100,000.00 128 137
$100,001.00-$500,000.00 7 7
$500,001.00-$1,000,000.00 0 2
$1,000,001.00-$2,500,000.00 1 0
- -
Total All Accounts 1,709 1,743
===== =====
Contractual Obligations
The following table summarizes the significant contractual obligations of the
Company as of November 27, 2009:
Contractual Obligations Total Current 2-3 Years 4-5 Years Thereafter
----------------------- ----- ------- --------- --------- ----------
Long-Term Debt $ 3,919,412 $ 330,695 $ 705,243 $ 768,987 $ 2,114,487
Vehicle Lease 2,616,929 902,534 1,559,540 154,855 -
Salary Continuation Plan 1,513,781 148,762 335,590 393,610 635,819
------------- ------------- ------------- ------------- -------------
Total Contractual Obligations $ 8,050,122 $ 1,381,991 $ 2,600,373 $ 1,317,452 $ 2,750,306
============= ============= ============= ============= =============
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 November 27, 2009, net sales increased 7.9% from
the comparable period in fiscal 2009. For the twenty-six weeks ended November
27, 2009, net sales increased 8.5% from the comparable period in fiscal 2009.
This year's second quarter cost of sales was 52.6% of net sales compared to
54.2% for last year's second quarter. This year's year to date cost of sales
was 51.7% of net sales compared to 52.8% for last year's year to date. This
year's second quarter, selling, general and administrative expenses were 44.1%
of net sales compared to 44.6% for last year's second quarter. This year's year
to date selling, general and administrative expenses were 44.0% of net sales
compared to 45.6% 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
November 27, 2009 November 28, 2008
Sales % %
Manufactured Products $ 24,490,300 77.9% $ 23,227,596 79.7%
Resale Products 6,961,768 22.1% 5,927,734 20.3%
--------------- -------- --------------- --------
Total $ 31,452,068 100.0% $ 29,155,330 100.0%
=============== ======== =============== ========
Gross Margin % %
Manufactured Products $ 12,439,581 50.8% $ 11,195,693 48.2%
Resale Products 2,477,580 35.6% 2,168,042 36.6%
--------------- ---------------
Total $ 14,917,161 47.4% $ 13,363,735 5.8%
=============== ===============
Twenty-Six Weeks Ended Twenty-Six Weeks Ended
November 27, 2009 November 28, 2008
Sales % %
Manufactured Products $ 50,718,141 79.2% $ 47,063,062 79.8%
Resale Products 13,326,089 20.8% 11,942,956 20.2%
--------------- -------- --------------- --------
Total $ 64,044,230 100.0% $ 59,006,018 100.0%
=============== ======== =============== ========
Gross Margin % %
Manufactured Products $ 26,080,679 51.4% $ 23,303,268 49.5%
Resale Products 4,827,448 36.2% 4,525,884 37.9%
--------------- ---------------
Total $ 30,908,127 48.3% $ 27,829,152 47.2%
=============== ===============
The Company's gain on sale of assets for the thirteen weeks ended November 27,
2009 in the amount of $7,374 was from the sale of used transportation equipment.
For last year's thirteen weeks, the gain on sale of assets was $804,767 which
was from the sale of used transportation equipment for $22,055 and from the sale
of warehouse properties at Marietta, Georgia and Nashville, Tennessee for
$782,712.
The Company's effective tax rate for the thirteen weeks was 32.6% compared to
38.0% for the last year's thirteen weeks and 35.6% for the twenty-six weeks this
year and 38.3% last year.
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 commodity
prices affecting the cost of its raw materials.
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.
13
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 will 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
On December 14, 2009, the Company executed a Purchase and Sale Agreement to sell
property located at 4771 Phyllis Street, Jacksonville, Florida for $160,000.
The property is scheduled to close in the Company's third quarter in 2010.
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. 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 second fiscal quarter ended November 27,
2009 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 treasury stock for the quarterly
period ended November 27, 2009.
ISSUER PURCHASES OF EQUITY SECURITIES
--------------------------------------------------------------------------------
Period (a) Total (b) Average (c) Total (d) Maximum
Number of Price Paid Number Number (or
Shares per Share of Shares Approximate
(or Units) (or Unit) (or Units) Dollar Value)
Purchased Purchased of Shares
as Part of (or Units)
Publicly that May Yet
Announced Be Purchased
Plans or Under the
Programs Plans or
Programs
August 29 to September 25 -0- -0- -0- -0-
--------------------------------------------------------------------------------
September 26 to October 30 -0- -0- -0- -0-
--------------------------------------------------------------------------------
October 31 to November 27 -0- -0- -0- -0-
--------------------------------------------------------------------------------
Total Second 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
(a) The Annual Meeting of Stockholders of Golden Enterprises, Inc. was held on
September 24, 2009 and duly adjourned to and reconvened on October 8, 2009.
(b) All director nominees were elected.
(c) The following is a tabulation of the voting for the election of Directors:
ELECTION OF DIRECTORS
Names Votes For Votes Withheld
----- --------- --------------
John S. Stein 10,020,265 377,820
Edward R. Pascoe 10,384,076 14,009
John P. McKleroy, Jr. 10,039,921 358,164
James I. Rotenstreich 10,370,636 27,449
John S.P. Samford 10,374,437 23,648
J. Wallace Nall, Jr. 10,015,099 382,986
F. Wayne Pate 10,010,190 387,895
Joann F. Bashinsky 10,009,349 388,736
Mark W. McCutcheon 10,099,522 298,563
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).
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).
18
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, at 321 Marble Mill Road, Marietta, Georgia
(incorporated by reference to Exhibit 10.19 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.
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, 004 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).
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.
19
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: January 14, 2010 /s/ Mark W. McCutcheon
---------------- ----------------------
Mark W. McCutcheon
President and
Chief Executive Officer
Dated: January 14, 2010 /s/ Patty Townsend
---------------- ------------------
Patty Townsend
Vice-President and
Chief Financial Officer
(Principal Accounting Officer)
2
