10-Q 1 a4489934.txt GOLDEN ENTERPRISES, INC. 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2003 --------------- 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 208, 2140 11th Avenue, South Birmingham, Alabama 35205 ------------------------------------- ----------------------------- (205) 933-9300 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of September 30, 2003. Outstanding at Class September 30, 2003 ----- ------------------ Common Stock, Par Value $0.66 2/3 11,883,305 GOLDEN ENTERPRISES, INC. INDEX Part I. FINANCIAL INFORMATION Page No. Item 1 Condensed Consolidated Balance Sheets August 31, 2003 (unaudited) and May 31, 2003 3 Item 1 Condensed Consolidated Statements of Operations (unaudited) Three Months Ended August 31, 2003 and 2002 4 Item 1 Condensed Consolidated Statements of Cash Flows (unaudited)- Three Months Ended August 31, 2003 and 2002 5 Item 1 Notes to Condensed Consolidated Financial Statements (unaudited) 6 Item 1 Independent Accountant's Report 9 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3 Quantitative and Qualitative Disclosure About Market Risk 14 Item 4 Controls and Procedures 14 Part II. OTHER INFORMATION Item 6 Exhibits and Report on Form 8-K 15 2 PART I. FINANCIAL INFORMATION GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS
August 31, May 31, 2003 2003 -------------- -------------- (Unaudited) (Audited) ASSETS Cash and cash equivalents $1,779,771 $1,278,333 Receivables, net 7,942,137 7,938,916 Note Receivable, current 43,104 42,253 Inventories: Raw material and supplies 1,493,452 1,496,992 Finished goods 2,355,696 2,289,145 --------- --------- 3,849,148 3,786,137 --------- --------- Prepaid expense 3,279,208 3,645,298 Total current assets 16,893,368 16,690,937 ---------- ---------- Property, plant and equipment, net 14,867,620 15,361,573 Long-term Note Receivable 1,854,646 1,865,747 Other assets 2,777,972 2,777,972 --------- --------- $36,393,606 $36,696,229 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Checks outstanding in excess of bank balances $699,694 $1,157,108 Accounts payable 2,906,218 1,700,934 Accrued and deferred income taxes 304,698 304,698 Other accrued expenses 2,403,827 2,381,975 Salary continuation plan 90,379 88,595 Note payable- bank, current 435,457 432,142 ------- ------- Total current liabilities 6,840,273 6,065,452 --------- --------- Long-Term Liabilities: Note payable-bank, non- current 1,062,290 1,990,767 Salary Continuation Plan 1,855,360 1,870,991 --------- --------- Total long-term liabilities 2,917,650 3,861,758 --------- --------- Deferred income taxes 743,107 764,032 ------- ------- 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 20,708,604 20,821,015 ---------- ---------- 36,425,753 36,538,164 Less: Cost of common shares in treasury (1,945,488 at August 31, 2003 and May 31, 2003) (10,533,177) (10,533,177) ------------ ------------ Total stockholders' equity 25,892,576 26,004,987 ---------- ---------- Total $36,393,606 $36,696,229 ============= ============= See Accompanying Notes to Condensed Consolidated Financial Statements
3 ITEM 1- GOLDEN ENTERPRISES, INC & SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended AUGUST 31, 2003 2002 -------------------------------- Net Sales $24,580,778 $ 24,803,423 Cost of Sales 12,882,936 12,897,329 ----------- ---------- Gross Margin 11,697,842 11,906,094 Selling, general and administrative expenses 11,338,773 12,195,897 ----------- ---------- Operating income (loss) 359,069 (289,803) ----------- ---------- Other income (expenses): Investment income 39,909 41,418 Gain on sale of assets 47,431 237,288 Other income 19,784 23,339 Interest expense (53,629) (70,101) ----------- ---------- Total other income (expenses) 53,495 231,944 ----------- ---------- Income (loss) before income taxes 412,564 (57,859) Income tax expense 153,619 (24,178) ----------- ---------- Net income (loss) $ 258,945 $ (33,681) =========== ========== PER SHARE OF COMMON STOCK: Net income (loss) $0.02 $0.00 =========== ========== Weighted average number of common shares outstanding 11,883,305 11,883,305 =========== ========== Cash dividends paid per share of common stock $0.0313 $0.0625 =========== ========== See Accompanying Notes to Condensed Consolidated Financial Statements.
4
ITEM 1 GOLDEN ENTERPRISES, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED August 31, August 31, 2003 2002 ------------------------------------ Cash flows from operating activities: Net income (Loss) $ 258,945 $ (33,681) Adjustment to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 594,933 662,302 Deferred income taxes (20,925) (43,954) Gain on sale of property and equipment (47,431) (237,288) Changes in operating assets and liabilities: (Increase) Decrease in receivable- net (3,221) 945,262 (Increase) in inventories (63,011) (326,296) Decrease (Increase) in pre-paid expenses 366,090 (1,674,121) (Increase) in other assets- long term 0 (1) Increase in accounts payable 1,205,284 1,619,325 Increase in accrued income taxes 0 66,174 Increase (Decrease) in accrued expenses 21,852 (47,045) (Decrease) increase in salary continuation (13,847) (13,094) ---------------- ------------ Net cash provided by operating activities 2,298,669 917,583 ---------------- ------------ Cash flows from investing activities: Purchase of property, plant and equipment (119,783) (263,616) Proceeds from sale of property, plant and equipment 66,234 329,598 Collection of note receivable 10,250 11,138 Investment securities available- for sale: Purchases $0 (801,013) Proceeds from disposal $0 $0 ---------------- ------------ Net cash (used in) Investing activities (43,299) (723,893) Cash flows from financing activities: Debt repayments (925,162) (924,164) Increase (decrease) in checks outstanding in excess of bank balances (457,414) 1,469,966 Cash dividends paid (371,356) (742,708) --------- ------------ Net cash (used in) financing activities (1,753,932) (196,906) ---------------- ------------ 501,438 (3,216) Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year 1,278,333 286,480 ---------------- ------------ Cash and cash equivalents at end of quarter $ 1,779,771 $ 283,264 ================ ============ Supplemental information: Cash paid during the year for: Income taxes $ (248,830) $ 300 Interest 53,629 70,101 See Accompanying Notes to Condensed Consolidated Financial Statements.
5 ITEM 1 ------ GOLDEN ENTERPRISES, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The accompanying unaudited condensed consolidated financial statements 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 of normal recurring accruals considered 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 the year ended May 31, 2003. 2. The results of operations for the three months ended August 31, 2003 and 2002 are not necessarily indicative of the results to be expected for the full year. 3. 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 material 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. 4. In June 2002, the FASB issued SFAS No. 146, "Accounting for Cost Associated with Exit or Disposal Activities." SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Costs covered by SFAS No. 146 includes lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operations, plant closing or other exit disposal activity. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. The adoption of this standard did not have a material impact on the Company's financial position, results of operations or cash flows. 5. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123." SFAS No. 148. amends SFAS No. 123, "Accounting for Stock-Based Compensation" to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No.123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company has adopted the disclosure requirements of SFAS No. 148 effective May 31, 2003 in its consolidated financial statements. The Company will continue to account for stock-based compensation using the methods described in Note 7 below. 6 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 three months ended August 31, 2003 and 2002:
August 31, 2003 August 31, 2002 --------------- --------------- Weighted average number of common shares used in computing basic earnings per share 11,883,305 11,883,305 Effect of dilutive stock options 0 25,183 ---------- ------------ Weighted average number of common shares and dilutive potential common stock used in computing dilutive earnings per share 11,883,305 11,908,488 ========== ============ Stock options excluded from the above reconciliation because they are 369,000 329,000 anti- dulutive ========== ============
7. The Company applies APB Opinion No. 25 in accounting for all of its stock option plans and, accordingly, no compensation cost has been recognized for its stock options in the financial statements. The table below presents the pro-forma net income effect of the options using the Black-Scholes option pricing model prescribed under SFAS No. 123.
For the three months ended August 31, 2003 August 31, 2002 --------------------------------- Net income (loss) as reported $258,945 ($33,681) Earnings (loss) per share as reported-basic .02 .00 Earnings (loss) per share as reported-diluted .02 .00 Stock based compensation costs, net of income tax, that would have been included in net income if the fair value method had been applied (3,073) (3,165) Pro-forma net income (loss) 255,872 (36,846) Pro-forma earnings (loss) per share-basic .02 .00 Pro-forma earnings (loss) per .02 .00 share-diluted
8. The Company entered into a five year term product purchase commitment during the year ending May 31, 2001 with a supplier. Under the terms of the agreement the minimum purchase quantity and the unit purchase price were fixed resulting in a minimum first year commitment of approximately $2,171,000. After the first year, the minimum purchase quantity was fixed and the purchase unit price was negotiable, based on current market. Subsequently, in September 2002, the product purchase agreement was amended to fix the purchase unit price and establish specific annual quantities. 9. The interest rate on the Company's bank debt is reset monthly to reflect the 30 days LIBOR rate. Consequently, the carrying value of the bank debt approximates fair value. During the three months ended August 31, 2003 the Company's bank debt was reduced by $.92 million compared to $.45 million last year. The interest rate at August 31, 2003 was 2.86% compared to 3.55% at August 31, 2002. 7 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 is limited. The Company's notes receivable require collateral and buyer investment and management believes they are well secured. 8 INDEPENDENT ACCOUNTANT'S REPORT ------------------------------- We have reviewed the accompanying interim consolidated balance sheet of Golden Enterprises, Inc. and subsidiary as of August 31, 2003 and the related interim consolidated statements of operations and cash flows for the three-month period then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. 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 auditing standards generally accepted in the United States of America, 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. Birmingham, Alabama October 10, 2003 DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP 9 ITEM 2 ------ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 buttered popcorn. 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 cracker, cheese cracker, 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 by approximately 433 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. BASIS OF PRESENTATION The Company's discussion and analysis of its financial condition and results of operations are based upon the accompanying unaudited condensed consolidated financial statements, which 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 of normal recurring accruals considered necessary for a fair presentation have been included. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company's discussion and analysis of its financial condition and results of operations are based upon the Company unaudited condensed consolidated financial statements, the preparation of which in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that in certain circumstances affect amounts reported in the consolidated financial statements. In preparing these financial statements, management has made its best estimate and judgments of certain amounts included in the financial statements, giving due considerations to materiality. The Company does not believe there is a great likelihood that materially different amounts would be reported under different conditions or using different assumptions related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. 10 The Company believes the following to be critical accounting policies. That is, they are both important to the portrayal of the company's financial condition and results and they require management to make judgments and estimates about matters that are inherently uncertain. Revenue Recognition The Company recognizes sales and related costs upon delivery or shipment of products to its customers. Sales are reduced by returns and allowances to customers. Accounts Receivable The Company records accounts receivable at the time revenue is recognized. Amounts for bad debt expense are recorded in selling, general and administrative expenses on the Consolidated Statements of Operations. The amount of the allowance for doubtful accounts is based on management's estimate of the accounts receivable amount that is uncollectible. Management records a general reserve based on analysis of historical data. In addition, management records specific reserves for receivable balances that are considered high-risk due to known facts regarding the customer. The allowance for bad debts is reviewed quarterly, and it is determined whether the amount should be changed. Failure of a major customer to pay the Company amounts owed could have a material impact on the financial statements of the Company. At August 31, 2003 and May 31, 2003 the Company had accounts receivables in the amount of $7.9 million and $7.9 million, net of an allowance for doubtful accounts of $0.2 million and $0.2 million, respectively. Inventories Inventories are stated at the lower of cost or market. Cost is computed on the first-in, first out method. Accrued Expenses Management estimates certain material expenses in an effort to record those expenses in the period incurred. The most material accrued estimates relate to a salary continuation plan for certain key executives of the Company, and to insurance-related expenses, including self-insurance. Workers' compensation and general liability insurance accruals are recorded based on insurance claims processed as well as historical claims experience for claims incurred, but not yet reported. These estimates are based on historical loss development factors. Employee medical insurance accruals are recorded based on medical claims processed as well as historical medical claims experienced for claims incurred but not yet reported. Differences in estimates and assumption could result in an accrual requirement materially different from the calculated accrual. OTHER MATTERS Transactions with related parties, reported in Note 13 of the Notes to Consolidated Financial Statements in the Annual Report to Stockholders for fiscal year ended May 31, 2003 are conducted on an arm's-length basis in the ordinary course of business. LIQUIDITY AND CAPITAL RESOURCES Working Capital was $10.6 million at June 1, 2003 and $10.1 million at the end of the first quarter. Net cash provided by operating activities amounted to $2.30 million for the first quarter this year compared to $.92 million for last year's first quarter. 11 Additions to property, plant and equipment, net of disposals, were $0.10 million this year and $0.17 million last year. Cash dividends of $0.37 million were paid during this year's first quarter compared to $0.74 million last year. No cash was used to purchase treasury stock this year and last year, and no cash was used to increase investment securities this year compared to a net increase in investment securities using $0.80 million of cash last year. The Company's current ratio was 2.47 to 1.00 at August 31, 2003. OFF-BALANCE SHEET ARRANGEMENT The Company entered into a five-year term product purchase commitment during the year ending May 31, 2001 with a supplier. Under the terms of the agreement the minimum purchase quantity and the unit purchase price were fixed resulting in a minimum first year commitment of approximately $2,171,000. After the first year, the minimum purchase quantity was fixed and the purchase unit price was negotiable, based on current market. Subsequently, in September 2002, the product purchase agreement was amended to fix the purchase unit price and establish specific annual quantities. Other Commitments The Company had letters of credit in the amount of $1,790,000 outstanding at August 31, 2003 to support the Company's commercial self-insurance program. The Company has a line-of-credit agreement with a local bank that permits borrowing up to $1 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. 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 three months ended August 31, 2003, net sales decreased 0.9% from the comparable period in fiscal 2003. The decrease in net sales was distributed evenly between private label and branded sales. This year's first quarter cost of sales was 52.4% of net sales compared to 52.0% last year, and selling, general and administrative expenses were 46.1% of net sales this year and 49.2% last year. The improvement in selling, general and administrative expenses, was achieved because of a significant drop in workers' compensation insurance costs and improvements in sales route efficiencies. The Company's Gain on sales of assets for the first quarter in the amount of $47,431 was from the sale of used transportation equipment for cash. For last year's first quarter the Gain on sale of assets was $237,288, $4,300 of which was from the sale of used transportation equipment for cash, and $232,988 was from the sale for cash of a central warehouse which was consolidated into two other central warehouses. The Company's investment income decreased 3.6% from last year. The Company's effective tax rate for the first quarter was 37.2% compared to -41.8% for last year's first quarter. 12 MARKET RISK The principal markets risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are interest rates on its investment securities, bank loans, and commodity prices, affecting the cost of its raw materials. The Company's investment securities consist of short-term marketable securities. Presently these are variable rate money market mutual funds. Assuming August 31, 2003 variable rate investment levels and bank loan balances, a one-point change in interest rates would impact interest income by $15,178 on an annual basis and interest expense by $14,977. The Company is subject to market risk with respect to commodities because its ability to recover increased costs through higher pricing may be limited by the competitive environment in which it operates. The Company purchases its raw materials on the open market, under contract through brokers and directly from growers. Future contracts have been used occasionally to hedge immaterial amounts of commodity purchases but none are presently being used. INFLATION Certain costs and expenses of the Company are affected by inflation, and 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. 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. 13 ITEM 3 ------ QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Included in Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations- Market Risk beginning on page 12. ITEM 4 ------ Controls and Procedures The Company performed an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. Based upon the evaluation, and as of the end of the period covered by this quarterly report, the Chief Executive Officer and Chief Financial Officer concluded that the Company's Disclosure Controls and Procedures were effective. There were no changes in the Company's internal controls over financial reporting during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 14 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K: On July 8, 2003, we filed a current report on Form 8-K dated July 8, 2003 disclosing that on July 8, 2003, Golden Enterprises, Inc. issued a press release announcing its earnings for the fourth quarter and fiscal year ended May 31, 2003. A copy of the Earnings Press Release was attached as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GOLDEN ENTERPRISES, INC. ----------------------- (Registrant) Dated: October 10, 2003 /s/Mark W. McCutcheon ---------------- --------------------- Mark W. McCutcheon President and Chief Executive Officer Dated: October 10, 2003 /s/John H. Shannon ---------------- ------------------ John H. Shannon Vice-President and Chief Financial Officer (Principal Accounting Officer) 15 EXHIBIT 31.1 CERTIFICATION BY MARK W. MCCUTCHEON PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Mark W. McCutcheon, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Golden Enterprises, Inc. for the first quarter ended August 31, 2003; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: October 10, 2003 /s/ Mark W. McCutcheon ---------------------- Mark W. McCutcheon President and Chief Executive Officer 16 EXHIBIT 31.2 CERTIFICATION BY JOHN H. SHANNON PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, John H. Shannon, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Golden Enterprises, Inc. for the first quarter ended August 31, 2003; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: October 10, 2003 /s/ John H. Shannon ------------------- John H. Shannon Vice-President and Chief Financial Officer 17 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Golden Enterprises, Inc. (the "Company") on Form 10-Q for the first quarter ended August 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark W. McCutcheon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: October 10, 2003 /s/ Mark W. McCutcheon ---------------------- Mark W. McCutcheon President and Chief Executive Officer A signed original of this written statement required by Section 906 has been provided to Golden Enterprises, Inc. and will be retained by Golden Enterprises, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. 18 EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Golden Enterprises, Inc. (the "Company") on Form 10-Q for the first quarter ended August 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John H. Shannon, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: October 10, 2003 /s/ John H. Shannon ------------------- John H. Shannon Vice-President and Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to Golden Enterprises, Inc. and will be retained by Golden Enterprises, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. 19