ITEM 1. - BUSINESS
Golden Enterprises, Inc. (the "Company") is a holding company which owns all of the issued and outstanding capital stock of Golden Flake Snack Foods, Inc., a wholly-owned operating subsidiary company ("Golden Flake"). Golden Enterprises is paid a fee by Golden Flake for providing management services for it.
The Company was originally organized under the laws of the State of Alabama as Magic City Food Products, Inc. on June 11, 1946. On March 11, 1958, it adopted the name Golden Flake, Inc. On June 25, 1963, the Company purchased Don's Foods, Inc., a Tennessee corporation which was merged into the Company on December 10, 1966. The Company was reorganized December 31, 1967 as a Delaware corporation without changing any of its assets, liabilities or business. On January 1, 1977, the Company, which had been engaged in the business of manufacturing and distributing potato chips, fried pork skins, cheese curls and other snack foods, spun off its operating division into a separate Delaware corporation known as Golden Flake Snack Foods, Inc. and adopted its present name of Golden Enterprises, Inc.
The Company owns all of the issued and outstanding capital stock of Golden Flake Snack Foods, Inc.
Golden Flake Snack Foods, Inc.
General
Golden Flake Snack Foods, Inc. ("Golden Flake") is a Delaware corporation with its principal place of business And home office located at One Golden Flake Drive, Birmingham, Alabama. Golden Flake manufactures and distributes a full line of salted snack items, such as potato chips, tortilla chips, corn chips, fried pork skins, baked and fried cheese curls, onion rings and buttered popcorn. These products are all packaged in flexible bags or other suitable wrapping material. Golden Flake 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% f Golden Flake's sales, which affords some protection against loss of volume due to a crop failure of major agricultural raw materials.
Raw Materials
Golden Flake purchases raw materials used in manufacturing and processing its snack food products on the open market and under contract through brokers and directly from growers. A large part of the raw materials used by Golden Flake consists of farm commodities which are subject to precipitous change in supply and price. Weather varies from season to season and directly affects both the quality and supply available. Golden Flake has no control of the agricultural aspects and its profits are affected accordingly.
Distribution
	Golden Flake sells its products through its own sales organization and independent distributors to commercial establishments which sell food products in Alabama and in parts of Tennessee, Kentucky, Georgia, Florida, Mississippi, Louisiana, North Carolina, South Carolina, Arkansas and Missouri. The products are distributed by approximately 448route salesmen who are supplied with selling inventory by the Company's trucking fleet which operates out of Birmingham, Alabama, Nashville, Tennessee, and Ocala, Florida. All of the route salesmen are employees of Golden Flake and use the direct store door delivery method. Golden Flake is not dependent upon any single customer, or a few customers, the loss of any one or more of which would have a material adverse effect on its business. No single customer accounts for more than 10% of its total sales. Golden Flake has a fleet of 856 company owned vehicles to support the route sales system, including 37 tractors and 96 trailers for long haul delivery to the various company warehouses located throughout its distribution areas, 666 store delivery vehicles and 57 cars and miscellaneous vehicles. Golden Flake also leases 20 store delivery vehicles.
Competition
	The snack foods business is highly competitive. In the area in which Golden Flake operates, many companies engage in the production and distribution of food products similar to those produced and sold by Golden Flake. Most, if not all, of Golden Flake's products are in direct competition with similar products of several local and regional companies and at least one national company, the Frito Lay Division of Pepsi Co., Inc., which is larger in terms of capital and sales volume than is Golden Flake. Golden Flake is unable to state its relative position in the industry. Golden Flake's marketing thrust is aimed at selling the highest quality product possible and giving good service to its customers, while being competitive with its prices. Golden Flake constantly tests the quality of its products for comparison with other similar products of competitors and maintains tight quality controls over its products.
Employees
	Golden Flake employs approximately 1,200 employees. Approximately 700 employees are involved in route sales and sales supervision, approximately 400 are in production and production supervision, and approximately 100 are management and administrative personnel.
	Golden Flake believes that the performance and loyalty of its employees are the most important factors in the growth and profitability of its business. Since labor costs represent a significant portion of Golden Flake's expenses, employee productivity is important to profitability. Golden Flake considers its relations with its employees to be excellent.
	Golden Flake has a 401(k) Profit Sharing Plan and an Employee Stock Ownership Plan designed to reward the long term employee for his loyalty. In addition, the employees are provided medical insurance, life insurance, and an accident and sickness salary continuance plan. Golden Flake believes that its employee wage rates are competitive with those of its industry and with prevailing rates in its area of operations.
Environmental Matters
	There have been no material effects of compliance with government provisions regulating discharge of materials into the environment.
Recent Developments
	Since the beginning of its last fiscal year, Golden Flake completed the sale of approximately 27.7 acres of undeveloped surplus land adjacent to its manufacturing plant in Ocala, Florida, on May 31, 2002, for $921,908. Golden Flake continues to own and operate its manufacturing plant in Ocala, Florida as described herein under the heading "Properties".
	Other than these changes, no significant changes have occurred in the kinds of products manufactured or in the markets or methods of distribution, and no material changes or developments have occurred in the business done and intended to be done by Golden Flake.
Executive Officers Of Registrant And Its Subsidiary
Name and Age	 Position and Offices with Management
John S. Stein, 65 Mr. Stein is Chairman of the Board. He was elected Chairman on June 1, 1996. He served as Chief Executive Officer from 1991 to April 4, 2001, and as President from 1985 to 1998 and from June 1, 2000 to April 4, 2001. Mr. Stein also served as President of Golden Flake Snack Foods, Inc. from 1976 to 1991. Mr. Stein retired as an employee with the Company on May 31, 2002. Mr. Stein is elected Chairman annually, and his present term will expire on May 31, 2003.
Mark W. McCutcheon, 47 Mr. McCutcheon is Chief Executive Officer and President of the Company and President of Golden Flake Snack Foods, Inc., a wholly-owned subsidiary of the Company. He was elected President and Chief Executive Officer of the Company on April 4, 2001 and President of Golden Flake on November 1, 1998. He has been employed by Golden Flake since 1980. During his employment, he has served as Plant Manager of the Ocala, Florida Plant, Plant Manager of the Birmingham, Alabama Plant, Vice President of Manufacturing, Vice President of Operations, and Executive Vice President. Mr. McCutcheon is elected Chief Executive Officer and President of the Company and President of Golden Flake annually, and his present terms will expire on May 31, 2003.
John H. Shannon, 65Mr. Shannon has been employed with the Company since 1962. He was elected Controller in 1976, Secretary in 1978 and Vice-President in 1979, and has served in these capacities since then. Mr. Shannon is elected to his positions on an annual basis, and his present term of office will expire on May 31, 2003.
ITEM 2.
ITEM 2. - PROPERTIES
The headquarters of the Company are located at Suite 208, 2140 11th Avenue South, Birmingham Alabama 35205. The Company occupies approximately 1500 square feet of office space under lease. The properties of the subsidiary are described below.
Golden Flake
Manufacturing Plants and Office Headquarters
	The main plant and office headquarters of Golden Flake are located at One Golden Flake Drive, Birmingham, Alabama, and are situated on approximately 40 acres of land which is serviced by a railroad spur track. This facility consists of 3 buildings which have a total of approximately 300,000 square feet of floor area. The plant manufactures a full line of Golden Flake products. Golden Flake maintains a garage and vehicle maintenance service center from which it services, maintains, repairs and rebuilds its fleet and delivery trucks. Golden Flake has adequate employee and fleet parking.
	Approximately 17 acres of the Birmingham property is undeveloped. This property is zoned for industrial use and is readily available for future use. Plans for the utilization of this property have not been finalized.
	Golden Flake also has a manufacturing plant in Ocala, Florida. This plant was placed in service in November 1984. The plant consists of approximately 100,000 square feet, with allowance for future expansion, and is located on a 28-acre site on Silver Springs Boulevard. The Company manufactures corn chips, tortilla chips and potato chips from this facility.
	The manufacturing plants, office headquarters and additional lands are owned by Golden Flake free and clear of any debts.
Distribution Warehouses
	Golden Flake owns branch warehouses in Birmingham, Montgomery, Pelham, Midfield, Demopolis, Fort Payne, Muscle Shoals, Huntsville, Phenix City, Tuscaloosa, Mobile, Dothan and Oxford, Alabama; Gulfport and Jackson, Mississippi; Chattanooga, Knoxville and Memphis, Tennessee; Decatur, Marietta, and Macon, Georgia; Jacksonville, Panama City, Tallahassee and Pensacola, Florida; Baton Rouge and New Orleans, Louisiana; and Little Rock, Arkansas. The warehouses vary in size from 2,400 to 8,000 square feet. All distribution warehouses are owned free and clear of any debts.
Vehicles
	Golden Flake owns a fleet of 856 vehicles which includes 666 route trucks, 37 tractors, 96 trailers and 57 cars and miscellaneous vehicles. There are no liens or encumbrances on Golden Flake's vehicle fleet. Golden Flake also leases 20 route trucks and owns a 1987 Cessna Citation II aircraft.
ITEM 3.
ITEM 3. - LEGAL PROCEEDINGS
	There are no material pending legal proceedings against the Company or its subsidiary other than ordinary routine litigation incidental to the business of the Company and its subsidiary.
ITEM 4.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	Not Applicable.
MARKET AND DIVIDEND INFORMATION
The Company's common stock is traded in the over-the-counter market under the "NASDAQ" symbol, GLDC, and transactions are reported through the National Association of Securities Dealers Automated Quotation (NASDAQ) National Market System. The following tabulation sets forth the high and low sale prices for the common stock during each quarter of the fiscal years ended May 31, 2002 and 2001 and the amount of dividends paid per share in each quarter. The Company currently expects that comparable regular cash dividends will be paid in the future.
Market Price Dividends Paid Quarter High	 Low	 Per Share Fiscal 2001 First		 $	4.150	 $	2.950	 $	.0625 Second			4.020	 	3.150 	 .0625 Third			 3.950		3.400	 .0625 Fourth			4.550		3.450		 .0625
Fiscal 2000 First		 $	3.563	 $	2.875	 $	.0600 Second		 4.750	 3.063		 .0625 Third			 4.469		3.063		 .0625 Fourth		 4.500		3.688		 .0625
As of August 12, 2002, there were approximately 1,500 shareholders of record.
Securities Authorized For Issuance Under Equity Compensation Plans.
The following table provides Equity Compensation Plan information under which equity securities of the Registrant are authorized for issuance:
Sale of Unregistered Securities
On May 6, 2002, an employee exercised stock options and purchased 1,000 shares of common stock of the Company for the sum of $3,810. The stock options were issued on October 15, 2001 under the Company's 1996 Long Term Incentive Plan. The issuance of the 1,000 shares of common stock were exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) as a private offering.
Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Estimates and Policies
The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's 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 estimates and judgements 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 judgement and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.
Adoption of EITF 01-9 During 2000 and 2001, the Financial Accounting Standards Board's (FASB) Emerging Issues Task Force (EITF) addressed various issues related to income statement classification of certain promotional payments, including consideration from a vendor to a reseller or another party that purchases the vendor's products. EITF 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products), was issued in November, 2001 and codified earlier pronouncements. Adoption of EITF 01-9 is required for financial statements covering annual or interim periods beginning after December 15, 2001. The Task Force encouraged earlier adoption, and the Company has complied by adopting EITF 01-9 for the fiscal year ended May 31, 2002. Financial statements for prior periods presented for comparative purposes have been reclassified to comply with the income statement display requirements under EITF 01-9. Adoption of EITF 01-9 in the fiscal year ended May 31, 2002 had the effect of reducing total revenues by $11.72 million, $l2.93 million, and $l3.46 million for fiscal years 2002, 2001, and 2000, respectively. Selling, general and administrative expenses were reduced by the same amounts. There was no net income impact.
Change in Accounting Policy In conjunction with the adoption of EITF 01-9, the Company changed its accounting policy for slotting fees from expensing when incurred to allocating the cost over the life of the agreement, generally one year. The trend of incurred slotting fees has increased during the last half of each fiscal year, and expensing when incurred would disproportionately reduce total revenues, as slotting fee costs reduce revenues under EITF 01-9. The change to allocating the cost over the life of the agreement gives a much better match with the revenues produced by the shelf space obtained with the slotting fees. The cumulative effect of this change on the amount of retained earnings at the beginning of fiscal year 2002, was $0.41 million ($0.03 per share) and is included in net income for fiscal year 2002, the period of the change, as required by APB 20.
Impairment of Long -Lived Assets Long-lived assets historically have been reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows estimated to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. There are no events or changes in circumstances of which management is aware indicating that the carrying value of the Company's long-lived assets may not be recoverable. As described in Note 1 of Notes to Consolidated Financial Statements under "Recent Issued Accounting Standards," the accounting treatment for goodwill and other intangible asset will not have a material impact on the financial statements of the Company.
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
The Company does not have off-balance sheet arrangement, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities." Transactions with related parties, reported in Note 15 of Notes to Consolidated Financial Statements, are conducted on an arm's- length basis in the ordinary course of business.
Liquidity and Capital Resources Working capital was $13.4 million at May 31, 2002 compared to $12.9 million at May 31, 2001. Net cash provided by operations amounted to $1.9 million in fiscal year 2002, $0.05 million in fiscal year 2001 and $8.4 million in fiscal year 2000. Year-to-year changes in receivables, inventories, prepaid expenses and accounts payable impacted cash flow unfavorably for fiscal years 2002 and 2001. The most material of these changes for fiscal 2002 was an increase in prepaid expenses of $1.8 million, $1.0 million of which was slotting fees that were set up to be allocated over the lives of the slotting fee agreements. Most of the balance of the increase in prepaid expenses was in prepaid taxes and prepaid insurance. There was a net decrease in investment securities providing $2.5 million in cash this year $1.9 million in 2001, and a net cash usage of $4.4 million to increase investment securities in 2000.
Additions to property, plant and equipment, net of disposals, were $3.8 million, $1.3 million and $0.1 million in fiscal years 2002, 2001, and 2000, respectively, and are expected to be about $1.8 million in 2003. Included in this year's additions was $4.0 million to upgrade the potato chip packaging department with new conveyors, scales, packaging machines, etc. Expenditures of $0.6 million were also made on a special warehouse renovation project and $0.3 million on the corn products department. These projects were completed in fiscal 2002. In addition to the liquidation of investment securities previously discussed, capital expenditures were financed by increasing bank debt by $3.1 million.
Cash dividends of $3.0 million, $3.0 million and $2.9 million were paid during fiscal years 2002, 2001, and 2000, respectively. Cash in the amount of $0.2 million was used to purchase treasury shares in fiscal 2002, $0.5 was used in 2001, and $0.3 million was used for this purpose in 2000. Long-term liabilities as a percentage of total capitalization was 14.4% at May 31, 2002. The Company's current ratio at year end was 3.26 to 1.00.
Operating Results Net sales and other operating income increased by 1.8% in fiscal year 2002, and decreased by 8.5% and 2.3 % in fiscal years 2001 and 2000, respectively. The increase in 2002 was primarily due to less promotional payments to vendors that were subtracted from sales as required by EITF 01-9. The sales decreases for fiscal 2001 and 2000 were primarily a result of discontinuing the Company-operated distribution of Golden Flake Branded products in three fringe sales regions in Central Florida as part of the fiscal year 2000 restructuring plan which is explained further in a separate section of this Management's Discussion.
The Company's investment income was 4.7% of income before cumulative effect of a change in accounting policy and income taxes in 2002, 7.4% in 2001, and 3.1% in 2000. Investment income for fiscal year 2002 was lower than 2001 because of a lower level of investment securities and generally lower interest rates. Investment income for fiscal year 2001 was higher than the previous year because investment securities were at a higher level for most of the year. The cash and notes received from the sale of the Nashville plant and equipment were major factors contributing to the increase in investments for fiscal 2001.
Cost of sales as a percentage of net sales amounted to 51.9% in 2002, 52.2% in 2001, and 50.7% in 2000. The cost decrease in 2002 was due primarily to lower energy costs, while the cost increase in 2001 was because of higher energy prices. Favorable trends in commodity prices and packaging costs were the major factors contributing to the relatively low cost of sales in fiscal 2000. Selling, general and administrative expenses were 45.2% of sales in 2002, 45.1% in 2001, and 45.8% in 2000. The improvement in fiscal 2002 and 2001 was primarily due to lower selling and delivery cost brought about by the exiting of the fringe sales regions in Central Florida as part of the fiscal 2000 restructuring plan.
The Company's effective tax rates for 2002, 2001, and 2000 were 38.8%, 34.4% and 42.3%, respectively. Note ten to the consolidated financial statements provides additional information about the provision for income taxes.
Market Risk The principal market risks (i.e. the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are interest rates on its investment securities and 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 funds. Its bank loans also carry variable rates. Assuming year end 2002 variable rate investment levels and bank loan balances, a one-point change in interest rates would impact interest income by $160 and interest expense by $40,004.
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. Futures 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.
Restructuring Charges The restructuring charge of $2,564,892 recognized in fiscal 2000 relates to a restructuring plan approved by the Board of Directors in January 2000 whereby the Nashville plant which primarily manufactured low fat snacks was closed, a voluntary retirement package was offered to a group of qualified employees, and the company-operated distribution system for Golden Flake Brand products in three fringe sales regions in Central Florida was discontinued.
The following is a summary of the one-time restructuring charge to expense for the year ended May 31, 2000.
		Employee termination benefits		$1,335,550 		Other Charges			 1,229,342
			Total restructuring charge	$ 2,564,892
			Net after tax			$ 1,607,892
			Per share			 $ 	 .13
The employee related termination benefits of $1,335,550 primarily includes severance costs for 104 employees, 10 of which accepted the voluntary retirement package, 71 of which were employed in the three fringe sales regions of Central Florida and 23 of which were employed at the Nashville plant.
The other charges of $1,229,342 consisted primarily of gains, and losses on disposal of property and equipment and the cost related to the exiting of sales regions in Central Florida.
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 Securities and Exchange Commission.
ITEM 7A. - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
	Included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations- Market Risk beginning on page 11.
ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	The consolidated financial statements of the registrant and its subsidiary for the year ended May 31, 2001, consisting of the following, are contained herein:
Consolidated Balance Sheets	 - May 31, 2002 and 2001
Consolidated Statements of Income	- Years ended May 31, 2002, 2001 and 2000
Consolidated Statements of	 - Years ended May 31, 2002, Cash Flows 2001 and 2000
Consolidated Statements of Changes	 - Years ended May 31, 2002, in Stockholders' Equity 2001 and 2000
Notes to Consolidated Financial Statements	 - Years ended May 31, 2002, 2001 and 2000
Quarterly Results of Operations	- Years ended May 31, 2002 and 2001
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Golden Enterprises, Inc.
We have audited the accompanying consolidated balance sheets of Golden Enterprises, Inc. and subsidiary as of May 31, 2002 and 2001, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the three years in the period ended May 31, 2002. Our audits also included the financial statement schedule listed at Item 14 (2). These consolidated financia l statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Golden Enterprises, Inc. and subsidiary as of May 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended May 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 3 to the financial statements, effective June 1, 2001 the Company changed its accounting policy with respect to slotting fees.
Birmingham, Alabama July 18, 2002	DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP
CONSOLIDATED BALANCE SHEETS
May 31, 2002 and 2001
ASSETS
	 2002 	2001 Current Assets: 	Cash and cash equivalents	$286,480 $ 710,278 	Investment securities 	available-for-sale 	 	 15,998	 2,500,147
	Receivables: 		Trade accounts	 9,014,850	 9,017,885 		Other			 931,911	 430,197 						9,946,761	 9,448,082 	Less: Allowance for doubtful accounts			196,100	 346,100 					 9,750,661	 9,101,982
	Notes receivable, current			 45,918 	 42,399 					 9,796,579	 9,144,381
	Inventories: 		Raw materials 	 1,605,640 	 1,883,167 		Finished goods	 3,604,482 	 2,856,593 					 5,210,122 	 4,739,760
Prepaid expenses			 4,031,037	 2,275,659 	Total current assets	 19,340,216	 19,370,225
Property, Plant and equipment: 		Land			 3,086,571	 3,528,054 		Buildings		 17,040,006 	 17,151,522 		Machinery and equipment		 40,819,601	 36,023,701 		Transportation equipment		 15,286,803	 15,727,913 				 	 76,232,981	 72,431,190 		Less accumulated depreciation	 59,136,721	 57,433,048 					 17,096,260	 14,998,142
Other Assets 	Notes receivable, long-term		 1,981,718	 2,027,636 	Cash surrender value of life insurance		 2,785,336	 2,835,950 		Other		 15,337	 15,339 	 Total other assets 4,782,391	 4,878,925 		Total		 $41,218,867	$39,247,292
See Accompanying Notes to Consolidated Financial Statements.
LIABILITIES AND STOCKHOLDERS' EQUITY
	 2002 	 2001 Current Liabilities: 	Checks outstanding in excess of bank balances	$	621,326	$ 1,552,461 	Accounts payable			2,803,182	 2,924,428 	Current portion of long-term debt			371,516		 -___ 	Note payable - line of credit			478,894		860,100 	Other accrued expenses		975,047		941,360 	Deferred income taxes		607,489		142,522 	Salary continuation plan	 81,805		 40,773
	 Total current liabilities	 5,939,259	 6,461,644
Long-term liabilities: 	Note payable - bank, non current		 3,150,020		 -___ 	Salary continuation plan 1,932,586	 1,887,050
	Total long-term liabilities		 	 5,082,606	 1,887,050
Deferred income taxes			551,742	 1,098,672
Commitments and Contingencies		 -		 -
Stockholders' Equity: 	Common stock - $.66 2/3 par value, Authorized 35,000,000 shares; 	issued 13,828,793 shares 9,219,195		9,219,195 	Additional paid-in capital 6,497,954		6,499,554 	Retained earnings		 24,461,288	 24,426,345 	Treasury shares - at cost (1,945,488 shares in 2002 		and 1,896,052 shares in 2001)	(10,533,177)	 (10,345,168)
	Total stockholders' equity			 29,645,260	 29,799,926
	Total		 $41,218,867	 $39,247,292
CONSOLIDATED STATEMENTS OF INCOME
Years ended May 31, 2002, 2001 and 2000
	 2002	 2001	 2000 Revenues: Net sales	 $104,572,608	$102,796,741 	$112,723,457 Other income, including gain on sale of property and equipment of $756,259 in 2002, $599,497 in 2001 and $250,180 in 2000 	 1,121,956	 985,741	 	 753,385 Investment income	 197,686	 304,783		 67,454 Total revenues	 105,892,250	104,087,265		 113,544,296
Cost And Expenses: Cost of sales	 54,257,812	 53,636,803	 	 57,146,571 Selling, general and administrative expenses	 47,107,554	46,153,184		 51,168,987 Interest	 110,932	 3,068	 - Contributions to employee 401(k) profit-sharing and employee stock ownership plans		 177,405	 181,055		 510,000 Restructuring charge	 -		 -		 2,564,892 Total costs a and expenses 101,653,703	 99,974,110	 111,390,450 Income before cumulative effect of a change in accounting policy and income taxes 4,238,547	 4,113,155	 2,153,846
Provision for income taxes: Currently payable: Federal	 1,762,000	 1,678,000		1,242,000 State	 225,000		199,000		 188,000 Deferred taxes	 (344,000)	 (464,000)	 (519,000) Total provision for income taxes		 1,643,000	 1,413,000	 911,000 Net income before cumulative effect of a change in accounting policy	 2,595,547		 2,700,155	 1,242,846 Cumulative effect of a change in accounting policy net of taxes of $262,037	 413,401	 -		 -
Net income	 $3,008,948	 $2,700,155	 $1,242,846
Per share of common stock: Net income before cumulative effect of a change in accounting policy		$0.22	 $0.23	 $0.10 Cumulative effect of a change in accounting policy net of taxes		 $0.03	 -	 	 - Basic earnings	$0.25	 $0.23	 $0.10 Diluted earnings	$0.25	 $0.23	 $0.10 Basic weighted shares outstanding	 11,898,097		 11,965,671		 12,154,057
See Accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended May 31, 2002, 2001, and 2000
	 2002	 2001	 2000 Cash flows from operating activities: Net income		$3,008,948		$2,700,155		$1,242,846 Adjustment to reconcile net income to net cash provided by operating activities: Cumulative effect of a change in accounting policy	 (413,401)	 -		 - Depreciation and amortization	2,593,621		2,435,599		3,230,321 Deferred income taxes			 (344,000)		 (464,000)		 (519,000) Gain on sale of property and equipment		 (756,259)		 (599,497)		 (250,180) Change in operating assets and liabilities: (Increase) decrease in receivables - net			 (648,679)		 (497,688)		1,631,229 (Increase) decrease in inventories		 (470,362)		 (697,415)		 586,264 (Increase) decrease in prepaid expenses		(1,079,977)		 (71,729)		 145,045 Decrease in cash surrender value of insurance 	 50,614	 	 30,591		 2,618 (Decrease) increase in accounts payable		 (121,246)		 (2,073,900)	1,308,713 Increase (decrease) in accrued expenses		 (33,687)		 (795,999)	 784,993 Increase in salary continuation plan 86,568		83,542	 	 264,828
Net cash provided by operating activities	 1,939,514		49,659		8,427,677
Cash flows from investing activities: Purchase of property, plant and equipment	 (5,236,601)		(2,443,988)		(1,065,586) Proceeds from sale of property, plant and equipment 1,301,160	 	 253,972	 	 1,166,672 Cash received from disposal of Nashville plant and equipment	 --_		1,710,000		 - Collection of notes receivable		 42,399	 19,965_ - Investment securities available-for-sale: Purchases		5,261,176)	 (10,123,555)		(6,909,902) Proceeds from disposals	 7,745,325		12,045,251		2,550,000
Net cash (used in) provided by investing activities	 (1,408,893)		 1,461,645		(4,258,816)
Cash flows from financing activities: Debt proceeds	7,806,676		 860,100	 		- Debt repayments	4,666,346) -_ Increase (decrease) in checks outstanding in excess of bank balances			(931,135)	 931,996	 (342,009) Purchases of treasury shares	 (193,419)	 (467,951)		(300,797)
Proceeds from exercise of stock option 		 3,810		 ---	 ----- Cash dividends paid (2,974,005)	 (2,960,245)	 (2,918,101) Net cash (used in) financing activities (954,419)	 (1,636,100)	 (3,560,907)
Net (decrease) cash equivalents	 (423,798)	 (124,796)	 607,954 Cash and cash equivalents at beginning of year			710,278	 835,074		 227,120 Cash and cash equivalents at end of year		$	286,480	$ 710,278		$ 835,074
Supplemental information Cash paid durint the year for: Income taxes	$ 2,343,597	$ 1,898,808	 $ 1,349,392 Interest			110,932		 3,068			--_
See Accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended May 31, 2002, 2001 and 2000
		Additional			Total 	Common	Paid-in	Retained	Treasury	Stockholders' 	Stock 	Capital 	Earnings 	Shares 	Equity
Balance - May 31 1999		$	9,219,195		$	6,499,554		$ 	26,361,690		$	(9,576,420	)	$	32,504,019
	Net income - 2000			-____			-___ 	1,242,846			-___			1,242,846 	Cash dividends declared - 		$.24 per share			-____			-___ 	(2,918,101	)		-___			(2,918,101	) 	Treasury shares purchased			-____			-___ 	-___			(300,797	)		(300,797	)
Balance - May 31 2000			9,219,195			6,499,554 	24,686,435			(9,877,217	)		30,527,967
	Net income - 2001			-____			-___ 	2,700,155			-___			2,700,155 	Cash dividends declared - 		$.25 per share			-____			-___ 	(2,960,245	)		-___			(2,960,245	) 	Treasury shares purchased			-____			-___ 	-___			(467,951	)		(467,951	)
		Balance - May 31 2001			9,219,195 	6,499,554			24,426,345			(10,345,168	) 	29,799,926
	Net income - 2002			-____			-___ 	3,008,948			-___			3,008,948 	Cash dividends declared - 		$.25 per share			-____			-___ 	(2,974,005	)		-___			(2,974,005	) 	Treasury shares purchased			-____			-___ 	-___			(193,419	)		(193,419	) 	Stock options exercised			-____			(1,600	) 	-___			5,410			3,810
		Balance - May 31, 2002	 	$	9,219,195		$ 	6,497,954		$	24,461,288		$	(10,533,177	)	$ 	29,645,260
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Golden Enterprises, Inc. and subsidiary ("Company") conform to accounting principles generally accepted in the United States of America nd to general principles within the snack foods industry. The following is a description of the more significant accounting policies:
Nature of the Business The Company manufactures and distributes a full line of snack items that are sold through its own sales organization and independent distributors to commercial establishments that sell food products primarily in the Southeastern United States.
Consolidation The consolidated financial statements include the accounts of Golden Enterprises, Inc. and its wholly-owned subsidiary, Golden Flake Snack Foods, Inc., (the "Company"). All significant intercompany transactions and balances have been eliminated.
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.
Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.
Investment Securities Investment securities at May 31, 2002 are principally instruments of municipalities and of short-term mutual municipal funds. The Company currently classifies all investment securities as available-for-sale. Securities accounted for as available-for-sale include bonds, notes, common stock and non-redeemable preferred stock not classified as either held-to-maturity or trading. Securities classified as available-for-sale are required to be reported at fair value with unrealized gains and losses, net of taxes, excluded from earnings and shown separately as a component of accumulated other comprehensive income within stockholders' equity. Realized gains and losses on the sale of securities available-for-sale are determined using the specific-identification method.
Inventories Inventories are stated at the lower of cost or market. Cost is computed on the first-in, first-out method.
Property, Plant and Equipment Property, plant and equipment are stated at cost. For financial reporting purposes, depreciation and amortization have been provided principally on the straight-line method over the estimated useful lives of the respective assets. Accelerated methods are used for tax purposes.
Expenditures for maintenance and repairs are charged to operations as incurred; expenditures for renewals and betterments are capitalized and written off by depreciation and amortization charges. Property retired or sold is removed from the asset and related accumulated depreciation accounts and any profit or loss resulting therefrom is reflected in the statements of income.
Self-Insurance Self-insurance reserves are established for estimated losses for automobile liability, general liability, workers' compensation and property losses based on claims filed and claims incurred but not reported. These reserves are necessarily based on estimates; thus actual results may differ. The Company is insured for losses in excess of $150,000, $150,000, $250,000 and $100,000 per occurrence for automobile liability, generally liability, workers' compensation and property losses, respectively.
Advertising The Company expenses advertising costs as incurred. These costs amounted to $5,344,366, $6,043,507 and $5,648,140 for the fiscal years 2002, 2001, and 2000, respectively, and are included in selling, general and administrative expenses in the Consolidated Statement of Income.
Income Taxes Deferred income taxes are recorded on the differences between the tax bases of assets and liabilities and the amounts at which they are reported in the consolidated financial statements. Recorded amounts are adjusted to reflect changes in income tax rates and other tax law provisions as they become enacted.
Segment Information The Company does not identify separate operating segments for management reporting purposes. The results of operations are the basis on which management evaluates operations and makes business decisions. The Company's sales are generated primarily within the United States of America.
Pension and Postretirement Benefits The Company has adopted the revised disclosure requirements of the Statement of Financial Accounting Standards No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits. SFAS 132 standardizes the disclosure requirements for pensions and other postretirement benefits, eliminates certain disclosures and requires additional information on changes in benefit obligations and fair values of plan assets. The adoption of SFAS 132 did not have a material impact on the financial statements of the Company.
Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Issued Accounting Standards In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS 141) and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires that the purchases method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also provides new criteria to determine whether an acquired intangible asset should be recognized separately from goodwill. The adopting of SFAS 141 had no impact on the Company's results of operations or financial condition. SFAS 142 is effective for the Company as of June 1, 2002. In accordance with SFAS 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to impairment testing. Intangible assets with finite lives will continue to be amortized over their useful lives. SFAS 142 requires an initial goodwill and indefinite lived intangible asset impairment assessments in the year of adoption, and at a minimum, annual impairment testing thereafter. The adoption of SFAS 142 is not expected to have a material impact on the Company's results of operations or financial conditions.
Recent Issued Accounting Standards - Continued
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets to be held and used, to be disposed of other than by sale, and to be disposed of by sale. SFAS 144 is effective for the Company as of June 1, 2002. The adoption of SFAS 144 is not expected to have a material impact on the Company's results of operations or financial condition.
In November 2001, the Emerging Issues Task Force reached a consensus on Issue No. 01-09 Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products) effective for annual or interim periods beginning after December 15, 2001. This issue addresses the recognition, measurement and income statement classification for certain sales incentives. The Company implemented this new accounting policy in the fourth quarter of fiscal 2002. The effect of this accounting change is to adopt this policy as of the beginning of fiscal 2002 (June 1, 2001). Certain of these expenses, including slotting fees, previously classified as selling, general and administrative expenses, are now characterized as offsets to net sales. Reclassifications have been made to prior period financial statements to conform to current year presentation. Total vendor sales incentives now characterized as reductions of net sales that previously would have been classified as selling, general and administrative expenses were approximately $11.7 million, $12.9 million and $13.4 million for the years ended 2002, 2001 and 2000, respectively. There was no resulting impact on net income from adopting EITF 01-09.
Stock Compensation The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its employees stock options. Under APB 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized (see Note 12).
Reclassifications Certain prior year amounts have been reclassified to conform to current year classifications.
NOTE 2 - INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses and fair value of the investment securities available-for-sale as of May 31, 2002 and 2001, are as follows:
	 May 31, 2002 		 Gross	 Gross 	 Amortized	Unrealized	Unrealized 	 Cost	 Gains	 Losses Fair Value
Municipal obligations	 $	-___	$	-	$	-	$	-___ Mutual funds	 15,998		-		-	 15,998
		 $15,998	$	-	$	-	$ 15,998
		 Gross	 Gross 	 Amortized Unrealized	 Unrealized 	 Cost	 Gains	 Losses Fair Value
Municipal obligations	 $	625,326	$	-	$	-	$ 625,326 Mutual funds 1,874,821	 -		-	1,874,821
		 $2,500,147	$	-	$	- $2,500,147
Maturities of investment securities classified as available- for-sale at May 31, 2002 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to recall or prepay obligations with or without call or prepayment penalties
	Amortized 	Cost	Fair Value Investment securities available-for-sale: 	Due within one year	$	15,998	$	15,998 	Due after one year through three years		 -		 - 	Due after three years through five years	 		 -		 - 		Total		 $	15,998	$	15,998
Proceeds from sales of investment securities available-for- sale during fiscal 2002, 2001 and 2000 were $7,745,325, $12,045,251 and $2,550,000, respectively. No gains or losses were realized on those sales for fiscal 2002, 2001 and 2000.
NOTE 3 - CHANGE IN ACCOUNTING POLICY
The Company changed its accounting policy in the fourth quarter of fiscal 2002 with regard to slotting fees. The effect of this accounting change was to adopt this policy as of the beginning of fiscal 2002 (June 1, 2001). Previously, slotting fees were expensed as incurred. The Company changed this accounting policy to capitalize and amortize such costs over the expected benefit period, which is generally one year. This change in accounting policy was made to more closely match the cost of the shelf space obtained with the slotting fees with the revenues produced by the shelf space. The cumulative effect of this change in accounting policy resulted in a noncash cumulative adjustment of $413,401 ($0.03 per share), net of taxes. The accounting change also increased net income before the cumulative effect in 2002 by $197,141 ($0.02 per share). The effect on income in 2001 and 2000 has not been determined. Quarterly results for 2002 reflecting this change in accounting are included in Note 17, Quarterly Results of Operations. Pro forma earnings per s hare amounts for previous quarters, assuming the new policy was applied retroactively, are as follows:
Basic earnings per share:	 First 	 Second 	 Third Net income - as reported	$	.09	$	.05	$	.09 Net income - pro forma		 .09		.05		.09
Diluted earnings per share: Net income - as reported	$	.09	$	.05	$	.09 Net income - pro forma		 .09		.05		.09
NOTE 4 - NOTES RECEIVABLE
Notes receivable as of May 31, 2002 and 2001 consist of the following: 	 2002 	2001 8% note, due in 120 monthly installments of $1,092 through November 1, 2010, collateralized by equipment and personal guarantee	 $	80,625 	$	86,999
8% note, due in 120 monthly installments of $3,640 through November 1, 2010, collateralized by property		268,749 		289,995
8% note, due in 360 monthly installments of $12,474 through November 1, 2030, collateriazed by property	 1,678,262 	 1,693,041 			 2,027,636 	 2,070,035
Less current portion		 45,918 		 42,399 		 $ 1,981,718 	 $2,027,636
	Maturities at May 31, 		2004	 $	49,729 		2005		 53,856 		2006		 58,327 		2007		 63,168 		2008		 68,410 		Thereafter	 1,688,228
NOTE 5 - PREPAID EXPENSES
At May 31, prepaid expenses consist of the following: 	 2002 	 2001
Prepaid Slotting fees	 $ 1,001,086	 $	-____ Other prepaid expenses 	 	 3,029,951		 2,275,659
		 $4,031,037	 $2,275,659
NOTE 6 - RESTRUCTURING CHARGES
The restructuring charge of $2,564,892 recognized in the fourth quarter of fiscal 2000 relates to a restructuring plan approved by the Board of Directors in January 2000 whereby the Nashville plant which primarily manufactured low fat snacks was closed, a voluntary retirement package was offered to a group of qualified employees, and the Company-operated distribution system for Golden Flake Brand products in three fringe sales regions in Central Florida was discontinued.
The following is a summary of the one-time restructuring charge to expense for the year ended May 31, 2000.
Employee termination benefits 	$	 1,335,550 Other charges		 1,229,342
Total restructuring charge	 $	 2,564,892 	Net after tax	 $	 1,607,892 	Per share	 $	 .13
The employee related termination benefits of $1,335,550 primarily includes severance costs for 104 employees, 10 of which accepted the voluntary retirement package, 71 of which were employed in the three fringe sales regions of Central Florida and 23 of which were employed at the Nashville plant.
The other charges of $1,229,342 consisted primarily of gains and losses on disposal of property and equipment and the cost related to the exiting of sales regions in Central Florida.
NOTE 7 - OTHER ACCRUED EXPENSES
At May 31, other accrued expenses consist of the following: 		 2002	 2001
Accrued payroll	 $ 490,000 	$ 288,406 Other accrued expenses	 485,047 	 652,954
		 $ 975,047 	$ 941,360
NOTE 8 - NOTES PAYABLE - LINE OF CREDIT
Notes payable - line of credit consists of a revolving line of credit with a balance of $478,894 at May 31, 2002. The interest rate varies with the bank's prime 2003. (4.75% at May 31, 2002) with principal and 2004. interest due December 31, 2002.
NOTE 9 - LONG-TERM LIABILITIES Long-term debt consist of the following:
Note payable - bank - payable in equal monthly installments of $41,688 including interest at the LIBOR index rate plus 1.75% 3.59% at May 31, 2002) through April 3, 2011, secured by equipment	 $	3,521,536
		 Less: current portion		 371,516
			 $	3,150,020
	Maturities at May 31, 	2004	 $	 393,916 	2005		 408,292 	2006		 423,194 	2007		 438,639 	2008		 454,648 	Thereafter		1,031,331
Other long-term obligations at May 31,2002 and 2001 consist of the following:
		 2002	 2001
Salary continuation plan	$2,014,391 		$1,927,823 	Less current portion 	 (81,805)	 (40,773)
		 $1,932,586 		$1,887,050
The Company is accruing the present values of the estimated future retirement payments over the period from the date of the agreements to the retirement dates, for certain key executives. The Company recognized compensation expense of approximately $127,000, $121,000 and $265,000 for fiscal 2002, 2001and 2000 respectively.
NOTE 10 - INCOME TAXES
The effective tax rate for continuing operations differs from the expected tax using statutory rates. A reconciliation between the expected tax and the actual income tax expense follows:
	 2002 	 2001	 2000
Tax on income at statutory rates	 $ 1,441,000 $1,398,000	$732,000 Increase (decrease) resulting from: State income taxes, less Federal income tax benefit	 149,000 	 131,000 	 124,000 Tax exempt interest	 (9,000)	 (59,000)	 (20,000) Other - net		 62,000	 (57,000)	 75,000
	Total	 $ 1,643,000 $ 1,413,000 	 $ 911,000
The tax effects of temporary differences that result in deferred tax assets and liabilities are as follows:
		 2002	 2001 Deferred tax assets Salary continuation plan	$ 723,500 	 $ 692,500 Allowance for doubtful accounts			 66,674 	 117,674 					 790,174 	 810,174
Deferred tax liabilities Property and equipment		 1,275,242 	 1,791,172 Prepaid expenses			 674,163 	 260,196 		 1,949,405 	 2,051,368
Total				$	(1,159,231)	 $ (1,241,194)
NOTE 11 - EMPLOYEE BENEFIT PLANS
The Company has trusteed Qualified Profit-Sharing Plans that were amended and restated effective June 1, 1996 to add a 401(k) salary reduction provision. Under this provision, employees can contribute up to fifteen percent of their compensation to the plan on a pretax basis subject to regulatory limits; and the Company, at its discretion, can match up to 4 percent of the participants' compensation. The annual contributions to the plans are determined by the Board of Directors. Total plan expenses for the years ended May 31, 2002, 2001 and 2000 were $177,405, $181,055, and $255,000, respectively.
The Company has an Employee Stock Ownership Plan that covers all full-time employees. The annual contributions to the plan are amounts determined by the Board of Directors of the Company. Annual contributions are made in cash or common stock of the Company. The Employee Stock Ownership Plan expenses for the years ended May 31, 2002, 2001 and 2000 were $-0-, $-0-, and $ 255,000, respectively. Each participant's account is credited with an allocation of shares acquired with the Company's annual contributions, dividends received on ESOP shares and forfeitures of terminated participants' nonvested accounts.
The contributions to the 401(k) Profit-Sharing Plans and the Employees Stock Ownership Plan may not exceed fifteen percent of the total compensation of all participating employees. The Company expects to continue these plans indefinitely; however, the rights to modify, amend or terminate the plans have been reserved.
The Company has a salary continuation plan with certain of its key officers whereby monthly benefits will be paid for a period of fifteen years following retirement. The Company is accruing the present value of such retirement benefits until the key officers reach normal retirement age at which time the principal portion of the retirement benefits paid are applied to the liability previously accrued. The change in the liability for the Salary Continuation Plan is as follows:
May 31, 2002, 2001 and 2000 		 002	 2001
Accrued Salary Continuation Plan - beginning of year	$1,927,823 	$1,844,281
	Benefits Accrued		 127,341 	 121,190
	Benefits Paid		 (40,773)	 (37,648)
	Accrued Salary Continuation Plan - end of year $2,014,391 $1,927,823
NOTE 12 - STOCK OPTIONS AND LONG-TERM INCENTIVE PLANS
The Company has a stock option plan and a long-term incentive plan currently in effect under which future grants may be issued: the 1988 Stock Option a nd Stock Appreciation Plan (the 1988 Plan) and the 1996 Long-Term Incentive Plan (the 1996 Plan). The Plans are administered by the Stock Option Committee of the Board of Directors, which has sole discretion, subject to the terms of the Plans, to determine those employees including executive officers, eligible to receive awards and the amount and type of such awards. The Stock Option Committee also has the authority to interpret the Plans, formulate the terms and conditions of award agreements, and make all other determinations required in the administration thereof. All options outstanding at the end of 2002, 2001 and 2000 are exercisable.
The 1988 Plan provides that non-qualified stock options and stock appreciation rights may be granted to key employees for up to 400,000 shares of the Company's common stock. The options and stock appreciation rights are exercisable three years after date of grant. The option price may be less than, equal to or greater than the fair market value of the stock on the date of grant. Each stock appreciation right entitles the option holder, upon exercise of the related stock option, to receive from the Company the amount of the appreciation in the underlying common stock as determined by the excess of the fair market value of a share of common stock on the exercise date of the related stock option over the option price. The options and stock appreciation rights granted, if not exercised, will expire three months from the date they are exercisable. There were no stock options and stock appreciation rights outstanding under this Plan at May 31, 2002, 2001 and 2000; however, there were 175,500 shares available for granting of additional options. The 1988 Plan expires July 6, 2002 except as to options and stock appreciation rights outstanding on that date; but, the rights to amend, suspend or terminate the Plan have been reserved.
The 1996 Plan provides for the granting of Incentive Stock Options as defined under the Internal Revenue Code. Under the Plan, grants may be made to selected officers and employees, of incentive stock options with a term not exceeding ten years from the issue date and at a price not less than the fair market value of the Company's stock at the date of grant. Five hundred thousand shares of the Company's stock have been reserved for issuance under this Plan. The following is a summary of transactions:
Shares Under Option 	 2002	 2001	 2000
	 Weighted	 Weighted	 Weighted 	 Average	 Average	 Average 	 Exercise	 Exercise	 Exercise Shares Price	 Shares	 Price	 Shares	Price Outstanding - beginning of year	 40,000	 3.50 340,000	6.92	340,000 6.92 Granted 330,000	 3.81	 -	 -	 -	 - Exercised.. ( 1,000) 3.81	 -	 -	 -	 - Forfieted	 -	 -	 -	 -	 -	 - Cancelled	 - - (300,000) 7.38	 -	 -
Outstanding - end of year 369,000	 3.78	 40,000	3.50	340,000 6.92
The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB25) and related Interpretation in accounting for its Employee Stock Options rather than the Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation. Under APB25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.
Proform a information regarding net income and earnings per share is presented as if the Company had accounted for its employee stock options under the fair value method. The per share weighted average fair value of the stock options granted during fiscal 2002 was $.25. The fair value of these options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate 5.05 percent; dividend yield 6.56 percent; expected option life of 5 years; and expected volatility of 15 percent. No options were granted during 2001 or 2000.
The Black-Scholes options pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect an option's fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.
The Company's actual and proform a information is as follows:
	 2002	 2001	 2000 Net income: As reported	$3,008,948	 $2,700,155	 $1,242,846 	Pro forma	 2,956,659	 2,700,155	 1,242,846 	Basic earnings per share: 	As reported	$	.25	$ .23	 $	 .10 	Pro forma	 	.25	 .23	 .10 	Diluted earnings per share: 	As reported	$ .25	$ .23	 $	 .10 	Pro forma	 .25	 	 .23	 .10
NOTE 13 - NET INCOME PER SHARE
During 1996, the FASB issued Statement of Financial Accounting Standards No. 128, Earnings Per Share. SFAS 128 specifies the computation, presentation and disclosure requirements for earnings per share, replacing the presentation of primary earnings per share with the presentation of basic earnings per share. The only difference in the two methods for computing the Company's per share amounts is attributable to outstanding options, under the stock options and long-term incentive plans. The effect of the stock options was determined using the treasury stock method. Consolidated net income as reported was not affected. Shares used to compute diluted earnings per share are as follows:
	Average Common Stock Shares
					2002	 2001	 2000
Basic weighted shares outstanding	 11,898,097 11,965,671 12,154,057 Effects of options	 2,796 	 2,152 	 -
Diluted shares	 11,900,893 11,967,823 112,154,057
NOTE 14 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Statement of Financial Accounting Standards No. 107, Disclosures About Fair Value of Financial Instruments requires disclosure of fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practical to estimate that value. SFAS 107 defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. The fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, such as estimates of timing and amount of expected future cash flows. Such estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.
The carrying amounts for cash and cash equivalents approximate fair value because of the short maturity, generally less than three months, of these instruments.
The fair values of investment securities have been determined using values supplied by independent pricing services and are disclosed together with carrying amounts in Note 2. The fair value of notes receivable is estimated by using a discount rate that approximates the current rate for comparable notes. At May 31, 2002 and 2001 the aggregate fair value was approximately $2,208,839 and $2,160,906 compared to a carrying amount of $2,027,636 and $2,070,035, respectively.
The interest rate on the Company's bank debt is reset monthly to reflect the 30 day LIBOR rate. Consequently, the carrying value of the bank debt approximates fair value.
The carrying value of the Company's salary continuation plan and accrued liability approximates fair value because present value is used in accruing this liability.
The Company does not hold or issue financial instruments for trading purposes and has no involvement with forward currency exchange contracts.
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Rental expense was $547,742 in 2002, $410,189 in 2001, and $498,307 in 2000. At May 31, 2002, the Company was obligated under certain operating leases for buildings, office space and equipment. The following amounts represent future payment commitments under these leases:
	May 31,	Office Space	Equipment	Total
	2003	 $24,000	 $187,000	$211,000 	2004		 -___		187,000	 187,000 	2005		 -___		-___		-___
The Company leases equipment for approximately $16,000 per month from a company which is principally owned by a major shareholder of Golden Enterprises, Inc.
The Company leases its airplane to a major shareholder of the Company for approximately $20,000 per month. The lease provides for his personal use of the airplane for up to 100 flight hours per year and is for a term of one year with automatic renewal at the option of either party.
The Company had letters of credit in the amount of $1,500,000 outstanding at May 31, 2002, and $2,000,000 outstanding at May 31, 2001 to support the Company's commercial self-insurance program. The Company pays a commitment fee of 0.375% to maintain the letters of credit.
NOTE 16 -CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables.
The Company maintains its cash accounts primarily with banks located in Alabama. The total cash balances are insured by the F.D.I.C. up to $100,000 per bank. The Company had cash balances on deposit with an Alabama bank at May 31, 2002 that exceeded the balance insured by the F.D.I.C. in the amount of $625,175.
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.
NOTE 17 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the unaudited quarterly results of operations of the years ended May 31, 2002 and 2001.
							 Per Share 			Total Revenues	Net Income	 Net Income Quarter 	First	 $ 26,108,693	 	$ 1,059,969 	$0.09 	Second	 25,130,769 	 565,404	 	 0.05 	Third	 	 27,137,452 	 1,122,950 	 0.09 	Fourth 	 27,515,336 	 260,925 0.02 	For the year	 $ 105,892,250 	$ 3,008,948 	$0.25
	First $ 26,573,809 	$ 1,272,111 	$0.11 	Second	 25,457,003 	 1,079,301		 0.09 	Third	 	 25,721,660 	 389,156	 	 0.03 	Fourth	 26,334,793 	 (40,413)	 0.00 	For the year	 $104,087,265 	$ 2,700,155 	$0.23
Revenues for the quarterly information have been adjusted from the amounts previously reported in the Company's 10-Q's. The revised amounts reflect the adoption of EITF 01-9, which requires reclassification of certain expenses. The reclassification involves removing certain expenses from selling, general and administrative expenses and including them as a direct reduction of revenues. The adoption of EITF 01-9 does not affect net income. Quarterly net income amounts for 2002 have been adjusted from amounts reported in the company's 10-Q's to reflect the change in accounting discussed in Note 3.
NOTE 18 - SUPPLEMENTARY STATEMENT OF INCOME INFORMATION
The following tabulation gives certain supplementary statement of income information for continuing operations for the years ended May 31, 2002, 2001 and 2000:
	 2002	 2001	 2000 	Maintenance and repairs	 $ 5,290,498	$5,375,639	 $ 5,889,306 	Depreciation and amortization 	2,593,621 	 2,435,599 	 3,230,321 	Payroll taxes 	2,473,871 	 2,388,828 	 2,599,980 	Advertising costs		 5,344,366 	 6,043,507 	 5,648,140
Amounts for depreciation and amortization of intangible assets, royalties, other taxes, rents and research and development costs are not presented because each of such amounts is less than 1% of total revenues.
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
SUPPLEMENTAL FINANCIAL INFORMATION
Selected quarterly financial data for the fiscal years ended May 31, 2002 and 2001 (unaudited)
(Dollar amounts in thousands, except per share data)
			First	 Second	Third	 Fourth 			Quarter	Quarter	Quarter	Quarter
Total revenues	 $26,109 $25,131	$27,137	$27,515
Income before income taxes	$1,675	 $920	 $1,787	 $533
Net income		$1,060	 $565	 $1,123	 $261
Net income per share	 $0.09	 $0.05	 $0.09	 $0.02
Cash dividends per share	 $0.0625	$0.0625	$0.0625	$0.0625
Total revenues	 $26,574	$25,457	$25,722	$26,335
Income before income taxes	$2,004	$1,689	 $598	 $(178)
Net income		$1,272	$1,079	 $389	 $(40)
Net income per share	 $0.11	 $0.09	 $0.03	 $0.00
Cash dividends per share	 $0.0600$0.0625	 $0.0625	 $0.0625
Revenues for the quarterly information have been adjusted from the amounts previously reported in the Company's 10-Q's. The revised amounts reflect the adoption of EITF 01-9, which requires reclassification of certain expenses. The reclassification involves removing certain expenses from selling, general and administrative expenses and including them as a direct reduction of revenues. Quarterly net income amounts for 2002 have been adjusted from amounts reported in the company's 10-Q's to reflect the change in accounting discussed in Note 3 to the Company's consolidated financial statements.
ITEM 9. -	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS	ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. -	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. -	EXECUTIVE COMPENSATION
ITEM 12. -	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 		AND RELATED STOCKHOLDER MATTERS
ITEM 13. -	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	With the exception of a description of Executive Officers of The Registrant which appears on page 5 herein, Part III is omitted because prior to September 28, 2002, the Company will file a definitive Proxy Statement with the Securities and Exchange Commission pursuant to Regulation 14A which involves the election of directors.
PART IV
ITEM 14. - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. and 2. LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
	The following consolidated financial statements of Golden Enterprises, Inc. and subsidiary required to be included in Item 8 are listed below:
	Consolidated Balance Sheets - May 31, 2002 and 2001
	Consolidated Statements of Income - Years ended May 31, 2002, 2001 and 2000
	Consolidated Statements of Changes in Stockholders' Equity - Years ended May 31, 2002, 2001 and 2000
	Consolidated Statements of Cash Flows - Years ended May 31, 2002, 2001 and 2000
	Notes to Consolidated Financial Statements
	The following consolidated financial statements schedule is included in Item 14 (d):
	Schedule II - Valuation and Qualifying Accounts
	All other schedules are omitted because the information required therein is not applicable, or the information is given in the financial statements and notes thereto.
	3. Exhibits:
10.1 - A copy of Contract for Sale and Purchase of Ocala, Florida surplus property dated January 24, 2002.
10.2 - A copy of Amendment to Salary Continuation Plan, Retirement and Disability for F. Wayne Pate dated April 9, 2002.
10.3 - A copy of Amendment to Salary Continuation Plan, Retirement and Disability for John S. Stein dated April 9, 2002.
10.4 - A copy of Amendment to Salary Continuation Plan, Death Benefits for John S. Stein dated April 9, 2002.
10.5 - A copy of Retirement and Consulting Agreement for John S. Stein dated April 9, 2002.
10.6 - A copy of Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002.
10.7 - A copy of Trust Under Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002.
	18.1 - A copy of a letter from Dudley, Hopton-Jones, Sims & Freeman PLLP the Company's independent accountant describing a change for the fiscal year ended May 31, 2002 in the method of accounting for slotting fees from expensing the costs as incurred to capitalizing and amortizing such costs over the expected benefit period, which is generally one year.
(b) Report on Form 8-K - The Registrant did not file a Form 8-K report during the last quarter of the 	period covered by this report.
	(c) Exhibits. See (a) 3. above.
(c) Financial Statement Schedules. The response to this portion of Item 14, is submitted under Item 	14.(a) 1. and 2. above.
Signatures
	Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Golden Enterprises, Inc.
By	August 24, 2002 	John H. Shannon	Date 	Vice President, Principal Financial 	Officer and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature	 Title	Date
Chairman of the Board	August 24, 2002
Chief Executive	 August 24, 2002 Officer, President and Director
Vice President, Secretary,	 August 24, 2002 Principal Financial Officer and Controller
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Schedule II
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
VALUATION AND QUALIFYING ACCOUNTS
Years ended May 31, 2000, 2001, and 2002
				 Additions 			Balance at	 Charged to		 Balance Allowance for	Beginning	 Costs and		 at End Doubtful Accounts	 of Year	 Expenses	Deductions	of Year
Year ended May 31, 2000	$111,000	$690,983	$201,983	$600,000
Year ended May 31, 2001	$600,000	$(194,938)	$58,962	$346,100
Year ended May 31, 2002	$346,100	$(113,175)	$36,825	$196,100
INDEX TO EXHIBITS
Exhibit Number	Page
10.1	A copy of Contract for Sale and Purchase of Ocala, Florida surplus property dated January 24, 2002.
10.2 A copy of Amendment to Salary Continuation Plan, Retirement 10.3 and Disability for F. Wayne Pate dated April 9, 2002.
10.4 A copy of Amendment to Salary Continuation Plan, Retirement
10.5 and Disability for John S. Stein dated April 9, 2002.
10.4 A copy of Amendment to Salary Continuation Plan, Death 10.5 Benefits for John S. Stein dated April 9, 2002.
10.6 A copy of Retirement and Consulting Agreement for
10.7 John S. Stein dated April 9, 2002.
10.6 A copy of Salary Continuation Plan for Mark W. 10.7 McCutcheon dated May 15, 2002.
10.8 A copy of Trust Under Salary Continuation Plan for
10.9 Mark W. McCutcheon dated May 15, 2002.
18.1 A copy of a letter from Dudley, Hopton-Jones, Sims & Freeman PLLP the Company's independent accountant describing a change for the fiscal year ended May 31, 2002 in the method of accounting for slotting fees from expensing the costs as incurred to capitalizing and amortizing such costs over the expected benefit period, which is generally one year.
Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Estimates and Policies
The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's 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 estimates and judgements 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 judgement and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.
Adoption of EITF 01-9 During 2000 and 2001, the Financial Accounting Standards Board's (FASB) Emerging Issues Task Force (EITF) addressed various issues related to income statement classification of certain promotional payments, including consideration from a vendor to a reseller or another party that purchases the vendor's products. EITF 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products), was issued in November, 2001 and codified earlier pronouncements. Adoption of EITF 01-9 is required for financial statements covering annual or interim periods beginning after December 15, 2001. The Task Force encouraged earlier adoption, and the Company has complied by adopting EITF 01-9 for the fiscal year ended May 31, 2002. Financial statements for prior periods presented for comparative purposes have been reclassified to comply with the income statement display requirements under EITF 01-9. Adoption of EITF 01-9 in the fiscal year ended May 31, 2002 had the effect of reducing total revenues by $11.72 million, $l2.93 million, and $l3.46 million for fiscal years 2002, 2001, and 2000, respectively. Selling, general and administrative expenses were reduced by the same amounts. There was no net income impact.
Change in Accounting Policy In conjunction with the adoption of EITF 01-9, the Company changed its accounting policy for slotting fees from expensing when incurred to allocating the cost over the life of the agreement, generally one year. The trend of incurred slotting fees has increased during the last half of each fiscal year, and expensing when incurred would disproportionately reduce total revenues, as slotting fee costs reduce revenues under EITF 01-9. The change to allocating the cost over the life of the agreement gives a much better match with the revenues produced by the shelf space obtained with the slotting fees. The cumulative effect of this change on the amount of retained earnings at the beginning of fiscal year 2002, was $0.41 million ($0.03 per share) and is included in net income for fiscal year 2002, the period of the change, as required by APB 20.
Impairment of Long -Lived Assets Long-lived assets historically have been reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows estimated to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. There are no events or changes in circumstances of which management is aware indicating that the carrying value of the Company's long-lived assets may not be recoverable. As described in Note 1 of Notes to Consolidated Financial Statements under "Recent Issued Accounting Standards," the accounting treatment for goodwill and other intangible asset will not have a material impact on the financial statements of the Company.
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
The Company does not have off-balance sheet arrangement, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities." Transactions with related parties, reported in Note 15 of Notes to Consolidated Financial Statements, are conducted on an arm's- length basis in the ordinary course of business.
Liquidity and Capital Resources Working capital was $13.4 million at May 31, 2002 compared to $12.9 million at May 31, 2001. Net cash provided by operations amounted to $1.9 million in fiscal year 2002, $0.05 million in fiscal year 2001 and $8.4 million in fiscal year 2000. Year-to-year changes in receivables, inventories, prepaid expenses and accounts payable impacted cash flow unfavorably for fiscal years 2002 and 2001. The most material of these changes for fiscal 2002 was an increase in prepaid expenses of $1.8 million, $1.0 million of which was slotting fees that were set up to be allocated over the lives of the slotting fee agreements. Most of the balance of the increase in prepaid expenses was in prepaid taxes and prepaid insurance. There was a net decrease in investment securities providing $2.5 million in cash this year $1.9 million in 2001, and a net cash usage of $4.4 million to increase investment securities in 2000.
Additions to property, plant and equipment, net of disposals, were $3.8 million, $1.3 million and $0.1 million in fiscal years 2002, 2001, and 2000, respectively, and are expected to be about $1.8 million in 2003. Included in this year's additions was $4.0 million to upgrade the potato chip packaging department with new conveyors, scales, packaging machines, etc. Expenditures of $0.6 million were also made on a special warehouse renovation project and $0.3 million on the corn products department. These projects were completed in fiscal 2002. In addition to the liquidation of investment securities previously discussed, capital expenditures were financed by increasing bank debt by $3.1 million.
Cash dividends of $3.0 million, $3.0 million and $2.9 million were paid during fiscal years 2002, 2001, and 2000, respectively. Cash in the amount of $0.2 million was used to purchase treasury shares in fiscal 2002, $0.5 was used in 2001, and $0.3 million was used for this purpose in 2000. Long-term liabilities as a percentage of total capitalization was 14.4% at May 31, 2002. The Company's current ratio at year end was 3.26 to 1.00.
Operating Results Net sales and other operating income increased by 1.8% in fiscal year 2002, and decreased by 8.5% and 2.3 % in fiscal years 2001 and 2000, respectively. The increase in 2002 was primarily due to less promotional payments to vendors that were subtracted from sales as required by EITF 01-9. The sales decreases for fiscal 2001 and 2000 were primarily a result of discontinuing the Company-operated distribution of Golden Flake Branded products in three fringe sales regions in Central Florida as part of the fiscal year 2000 restructuring plan which is explained further in a separate section of this Management's Discussion.
The Company's investment income was 4.7% of income before cumulative effect of a change in accounting policy and income taxes in 2002, 7.4% in 2001, and 3.1% in 2000. Investment income for fiscal year 2002 was lower than 2001 because of a lower level of investment securities and generally lower interest rates. Investment income for fiscal year 2001 was higher than the previous year because investment securities were at a higher level for most of the year. The cash and notes received from the sale of the Nashville plant and equipment were major factors contributing to the increase in investments for fiscal 2001.
Cost of sales as a percentage of net sales amounted to 51.9% in 2002, 52.2% in 2001, and 50.7% in 2000. The cost decrease in 2002 was due primarily to lower energy costs, while the cost increase in 2001 was because of higher energy prices. Favorable trends in commodity prices and packaging costs were the major factors contributing to the relatively low cost of sales in fiscal 2000. Selling, general and administrative expenses were 45.2% of sales in 2002, 45.1% in 2001, and 45.8% in 2000. The improvement in fiscal 2002 and 2001 was primarily due to lower selling and delivery cost brought about by the exiting of the fringe sales regions in Central Florida as part of the fiscal 2000 restructuring plan.
The Company's effective tax rates for 2002, 2001, and 2000 were 38.8%, 34.4% and 42.3%, respectively. Note ten to the consolidated financial statements provides additional information about the provision for income taxes.
Market Risk The principal market risks (i.e. the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are interest rates on its investment securities and 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 funds. Its bank loans also carry variable rates. Assuming year end 2002 variable rate investment levels and bank loan balances, a one-point change in interest rates would impact interest income by $160 and interest expense by $40,004.
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. Futures 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.
Restructuring Charges The restructuring charge of $2,564,892 recognized in fiscal 2000 relates to a restructuring plan approved by the Board of Directors in January 2000 whereby the Nashville plant which primarily manufactured low fat snacks was closed, a voluntary retirement package was offered to a group of qualified employees, and the company-operated distribution system for Golden Flake Brand products in three fringe sales regions in Central Florida was discontinued.
The following is a summary of the one-time restructuring charge to expense for the year ended May 31, 2000.
		Employee termination benefits		$1,335,550 		Other Charges			 1,229,342
			Total restructuring charge	$ 2,564,892
			Net after tax			$ 1,607,892
			Per share			 $ 	 .13
The employee related termination benefits of $1,335,550 primarily includes severance costs for 104 employees, 10 of which accepted the voluntary retirement package, 71 of which were employed in the three fringe sales regions of Central Florida and 23 of which were employed at the Nashville plant.
The other charges of $1,229,342 consisted primarily of gains, and losses on disposal of property and equipment and the cost related to the exiting of sales regions in Central Florida.
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 Securities and Exchange Commission.
ITEM 7A.
ITEM 7A. - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
	Included in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations- Market Risk beginning on page 11.
ITEM 8.
ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	The consolidated financial statements of the registrant and its subsidiary for the year ended May 31, 2001, consisting of the following, are contained herein:
Consolidated Balance Sheets	 - May 31, 2002 and 2001
Consolidated Statements of Income	- Years ended May 31, 2002, 2001 and 2000
Consolidated Statements of	 - Years ended May 31, 2002, Cash Flows 2001 and 2000
Consolidated Statements of Changes	 - Years ended May 31, 2002, in Stockholders' Equity 2001 and 2000
Notes to Consolidated Financial Statements	 - Years ended May 31, 2002, 2001 and 2000
Quarterly Results of Operations	- Years ended May 31, 2002 and 2001
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Golden Enterprises, Inc.
We have audited the accompanying consolidated balance sheets of Golden Enterprises, Inc. and subsidiary as of May 31, 2002 and 2001, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the three years in the period ended May 31, 2002. Our audits also included the financial statement schedule listed at Item 14 (2). These consolidated financia l statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Golden Enterprises, Inc. and subsidiary as of May 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended May 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 3 to the financial statements, effective June 1, 2001 the Company changed its accounting policy with respect to slotting fees.
Birmingham, Alabama July 18, 2002	DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP
CONSOLIDATED BALANCE SHEETS
May 31, 2002 and 2001
ASSETS
	 2002 	2001 Current Assets: 	Cash and cash equivalents	$286,480 $ 710,278 	Investment securities 	available-for-sale 	 	 15,998	 2,500,147
	Receivables: 		Trade accounts	 9,014,850	 9,017,885 		Other			 931,911	 430,197 						9,946,761	 9,448,082 	Less: Allowance for doubtful accounts			196,100	 346,100 					 9,750,661	 9,101,982
	Notes receivable, current			 45,918 	 42,399 					 9,796,579	 9,144,381
	Inventories: 		Raw materials 	 1,605,640 	 1,883,167 		Finished goods	 3,604,482 	 2,856,593 					 5,210,122 	 4,739,760
Prepaid expenses			 4,031,037	 2,275,659 	Total current assets	 19,340,216	 19,370,225
Property, Plant and equipment: 		Land			 3,086,571	 3,528,054 		Buildings		 17,040,006 	 17,151,522 		Machinery and equipment		 40,819,601	 36,023,701 		Transportation equipment		 15,286,803	 15,727,913 				 	 76,232,981	 72,431,190 		Less accumulated depreciation	 59,136,721	 57,433,048 					 17,096,260	 14,998,142
Other Assets 	Notes receivable, long-term		 1,981,718	 2,027,636 	Cash surrender value of life insurance		 2,785,336	 2,835,950 		Other		 15,337	 15,339 	 Total other assets 4,782,391	 4,878,925 		Total		 $41,218,867	$39,247,292
See Accompanying Notes to Consolidated Financial Statements.
LIABILITIES AND STOCKHOLDERS' EQUITY
	 2002 	 2001 Current Liabilities: 	Checks outstanding in excess of bank balances	$	621,326	$ 1,552,461 	Accounts payable			2,803,182	 2,924,428 	Current portion of long-term debt			371,516		 -___ 	Note payable - line of credit			478,894		860,100 	Other accrued expenses		975,047		941,360 	Deferred income taxes		607,489		142,522 	Salary continuation plan	 81,805		 40,773
	 Total current liabilities	 5,939,259	 6,461,644
Long-term liabilities: 	Note payable - bank, non current		 3,150,020		 -___ 	Salary continuation plan 1,932,586	 1,887,050
	Total long-term liabilities		 	 5,082,606	 1,887,050
Deferred income taxes			551,742	 1,098,672
Commitments and Contingencies		 -		 -
Stockholders' Equity: 	Common stock - $.66 2/3 par value, Authorized 35,000,000 shares; 	issued 13,828,793 shares 9,219,195		9,219,195 	Additional paid-in capital 6,497,954		6,499,554 	Retained earnings		 24,461,288	 24,426,345 	Treasury shares - at cost (1,945,488 shares in 2002 		and 1,896,052 shares in 2001)	(10,533,177)	 (10,345,168)
	Total stockholders' equity			 29,645,260	 29,799,926
	Total		 $41,218,867	 $39,247,292
CONSOLIDATED STATEMENTS OF INCOME
Years ended May 31, 2002, 2001 and 2000
	 2002	 2001	 2000 Revenues: Net sales	 $104,572,608	$102,796,741 	$112,723,457 Other income, including gain on sale of property and equipment of $756,259 in 2002, $599,497 in 2001 and $250,180 in 2000 	 1,121,956	 985,741	 	 753,385 Investment income	 197,686	 304,783		 67,454 Total revenues	 105,892,250	104,087,265		 113,544,296
Cost And Expenses: Cost of sales	 54,257,812	 53,636,803	 	 57,146,571 Selling, general and administrative expenses	 47,107,554	46,153,184		 51,168,987 Interest	 110,932	 3,068	 - Contributions to employee 401(k) profit-sharing and employee stock ownership plans		 177,405	 181,055		 510,000 Restructuring charge	 -		 -		 2,564,892 Total costs a and expenses 101,653,703	 99,974,110	 111,390,450 Income before cumulative effect of a change in accounting policy and income taxes 4,238,547	 4,113,155	 2,153,846
Provision for income taxes: Currently payable: Federal	 1,762,000	 1,678,000		1,242,000 State	 225,000		199,000		 188,000 Deferred taxes	 (344,000)	 (464,000)	 (519,000) Total provision for income taxes		 1,643,000	 1,413,000	 911,000 Net income before cumulative effect of a change in accounting policy	 2,595,547		 2,700,155	 1,242,846 Cumulative effect of a change in accounting policy net of taxes of $262,037	 413,401	 -		 -
Net income	 $3,008,948	 $2,700,155	 $1,242,846
Per share of common stock: Net income before cumulative effect of a change in accounting policy		$0.22	 $0.23	 $0.10 Cumulative effect of a change in accounting policy net of taxes		 $0.03	 -	 	 - Basic earnings	$0.25	 $0.23	 $0.10 Diluted earnings	$0.25	 $0.23	 $0.10 Basic weighted shares outstanding	 11,898,097		 11,965,671		 12,154,057
See Accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended May 31, 2002, 2001, and 2000
	 2002	 2001	 2000 Cash flows from operating activities: Net income		$3,008,948		$2,700,155		$1,242,846 Adjustment to reconcile net income to net cash provided by operating activities: Cumulative effect of a change in accounting policy	 (413,401)	 -		 - Depreciation and amortization	2,593,621		2,435,599		3,230,321 Deferred income taxes			 (344,000)		 (464,000)		 (519,000) Gain on sale of property and equipment		 (756,259)		 (599,497)		 (250,180) Change in operating assets and liabilities: (Increase) decrease in receivables - net			 (648,679)		 (497,688)		1,631,229 (Increase) decrease in inventories		 (470,362)		 (697,415)		 586,264 (Increase) decrease in prepaid expenses		(1,079,977)		 (71,729)		 145,045 Decrease in cash surrender value of insurance 	 50,614	 	 30,591		 2,618 (Decrease) increase in accounts payable		 (121,246)		 (2,073,900)	1,308,713 Increase (decrease) in accrued expenses		 (33,687)		 (795,999)	 784,993 Increase in salary continuation plan 86,568		83,542	 	 264,828
Net cash provided by operating activities	 1,939,514		49,659		8,427,677
Cash flows from investing activities: Purchase of property, plant and equipment	 (5,236,601)		(2,443,988)		(1,065,586) Proceeds from sale of property, plant and equipment 1,301,160	 	 253,972	 	 1,166,672 Cash received from disposal of Nashville plant and equipment	 --_		1,710,000		 - Collection of notes receivable		 42,399	 19,965_ - Investment securities available-for-sale: Purchases		5,261,176)	 (10,123,555)		(6,909,902) Proceeds from disposals	 7,745,325		12,045,251		2,550,000
Net cash (used in) provided by investing activities	 (1,408,893)		 1,461,645		(4,258,816)
Cash flows from financing activities: Debt proceeds	7,806,676		 860,100	 		- Debt repayments	4,666,346) -_ Increase (decrease) in checks outstanding in excess of bank balances			(931,135)	 931,996	 (342,009) Purchases of treasury shares	 (193,419)	 (467,951)		(300,797)
Proceeds from exercise of stock option 		 3,810		 ---	 ----- Cash dividends paid (2,974,005)	 (2,960,245)	 (2,918,101) Net cash (used in) financing activities (954,419)	 (1,636,100)	 (3,560,907)
Net (decrease) cash equivalents	 (423,798)	 (124,796)	 607,954 Cash and cash equivalents at beginning of year			710,278	 835,074		 227,120 Cash and cash equivalents at end of year		$	286,480	$ 710,278		$ 835,074
Supplemental information Cash paid durint the year for: Income taxes	$ 2,343,597	$ 1,898,808	 $ 1,349,392 Interest			110,932		 3,068			--_
See Accompanying Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended May 31, 2002, 2001 and 2000
		Additional			Total 	Common	Paid-in	Retained	Treasury	Stockholders' 	Stock 	Capital 	Earnings 	Shares 	Equity
Balance - May 31 1999		$	9,219,195		$	6,499,554		$ 	26,361,690		$	(9,576,420	)	$	32,504,019
	Net income - 2000			-____			-___ 	1,242,846			-___			1,242,846 	Cash dividends declared - 		$.24 per share			-____			-___ 	(2,918,101	)		-___			(2,918,101	) 	Treasury shares purchased			-____			-___ 	-___			(300,797	)		(300,797	)
Balance - May 31 2000			9,219,195			6,499,554 	24,686,435			(9,877,217	)		30,527,967
	Net income - 2001			-____			-___ 	2,700,155			-___			2,700,155 	Cash dividends declared - 		$.25 per share			-____			-___ 	(2,960,245	)		-___			(2,960,245	) 	Treasury shares purchased			-____			-___ 	-___			(467,951	)		(467,951	)
		Balance - May 31 2001			9,219,195 	6,499,554			24,426,345			(10,345,168	) 	29,799,926
	Net income - 2002			-____			-___ 	3,008,948			-___			3,008,948 	Cash dividends declared - 		$.25 per share			-____			-___ 	(2,974,005	)		-___			(2,974,005	) 	Treasury shares purchased			-____			-___ 	-___			(193,419	)		(193,419	) 	Stock options exercised			-____			(1,600	) 	-___			5,410			3,810
		Balance - May 31, 2002	 	$	9,219,195		$ 	6,497,954		$	24,461,288		$	(10,533,177	)	$ 	29,645,260
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Golden Enterprises, Inc. and subsidiary ("Company") conform to accounting principles generally accepted in the United States of America nd to general principles within the snack foods industry. The following is a description of the more significant accounting policies:
Nature of the Business The Company manufactures and distributes a full line of snack items that are sold through its own sales organization and independent distributors to commercial establishments that sell food products primarily in the Southeastern United States.
Consolidation The consolidated financial statements include the accounts of Golden Enterprises, Inc. and its wholly-owned subsidiary, Golden Flake Snack Foods, Inc., (the "Company"). All significant intercompany transactions and balances have been eliminated.
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.
Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.
Investment Securities Investment securities at May 31, 2002 are principally instruments of municipalities and of short-term mutual municipal funds. The Company currently classifies all investment securities as available-for-sale. Securities accounted for as available-for-sale include bonds, notes, common stock and non-redeemable preferred stock not classified as either held-to-maturity or trading. Securities classified as available-for-sale are required to be reported at fair value with unrealized gains and losses, net of taxes, excluded from earnings and shown separately as a component of accumulated other comprehensive income within stockholders' equity. Realized gains and losses on the sale of securities available-for-sale are determined using the specific-identification method.
Inventories Inventories are stated at the lower of cost or market. Cost is computed on the first-in, first-out method.
Property, Plant and Equipment Property, plant and equipment are stated at cost. For financial reporting purposes, depreciation and amortization have been provided principally on the straight-line method over the estimated useful lives of the respective assets. Accelerated methods are used for tax purposes.
Expenditures for maintenance and repairs are charged to operations as incurred; expenditures for renewals and betterments are capitalized and written off by depreciation and amortization charges. Property retired or sold is removed from the asset and related accumulated depreciation accounts and any profit or loss resulting therefrom is reflected in the statements of income.
Self-Insurance Self-insurance reserves are established for estimated losses for automobile liability, general liability, workers' compensation and property losses based on claims filed and claims incurred but not reported. These reserves are necessarily based on estimates; thus actual results may differ. The Company is insured for losses in excess of $150,000, $150,000, $250,000 and $100,000 per occurrence for automobile liability, generally liability, workers' compensation and property losses, respectively.
Advertising The Company expenses advertising costs as incurred. These costs amounted to $5,344,366, $6,043,507 and $5,648,140 for the fiscal years 2002, 2001, and 2000, respectively, and are included in selling, general and administrative expenses in the Consolidated Statement of Income.
Income Taxes Deferred income taxes are recorded on the differences between the tax bases of assets and liabilities and the amounts at which they are reported in the consolidated financial statements. Recorded amounts are adjusted to reflect changes in income tax rates and other tax law provisions as they become enacted.
Segment Information The Company does not identify separate operating segments for management reporting purposes. The results of operations are the basis on which management evaluates operations and makes business decisions. The Company's sales are generated primarily within the United States of America.
Pension and Postretirement Benefits The Company has adopted the revised disclosure requirements of the Statement of Financial Accounting Standards No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits. SFAS 132 standardizes the disclosure requirements for pensions and other postretirement benefits, eliminates certain disclosures and requires additional information on changes in benefit obligations and fair values of plan assets. The adoption of SFAS 132 did not have a material impact on the financial statements of the Company.
Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Issued Accounting Standards In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS 141) and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires that the purchases method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also provides new criteria to determine whether an acquired intangible asset should be recognized separately from goodwill. The adopting of SFAS 141 had no impact on the Company's results of operations or financial condition. SFAS 142 is effective for the Company as of June 1, 2002. In accordance with SFAS 142, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to impairment testing. Intangible assets with finite lives will continue to be amortized over their useful lives. SFAS 142 requires an initial goodwill and indefinite lived intangible asset impairment assessments in the year of adoption, and at a minimum, annual impairment testing thereafter. The adoption of SFAS 142 is not expected to have a material impact on the Company's results of operations or financial conditions.
Recent Issued Accounting Standards - Continued
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets to be held and used, to be disposed of other than by sale, and to be disposed of by sale. SFAS 144 is effective for the Company as of June 1, 2002. The adoption of SFAS 144 is not expected to have a material impact on the Company's results of operations or financial condition.
In November 2001, the Emerging Issues Task Force reached a consensus on Issue No. 01-09 Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products) effective for annual or interim periods beginning after December 15, 2001. This issue addresses the recognition, measurement and income statement classification for certain sales incentives. The Company implemented this new accounting policy in the fourth quarter of fiscal 2002. The effect of this accounting change is to adopt this policy as of the beginning of fiscal 2002 (June 1, 2001). Certain of these expenses, including slotting fees, previously classified as selling, general and administrative expenses, are now characterized as offsets to net sales. Reclassifications have been made to prior period financial statements to conform to current year presentation. Total vendor sales incentives now characterized as reductions of net sales that previously would have been classified as selling, general and administrative expenses were approximately $11.7 million, $12.9 million and $13.4 million for the years ended 2002, 2001 and 2000, respectively. There was no resulting impact on net income from adopting EITF 01-09.
Stock Compensation The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its employees stock options. Under APB 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized (see Note 12).
Reclassifications Certain prior year amounts have been reclassified to conform to current year classifications.
NOTE 2 - INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses and fair value of the investment securities available-for-sale as of May 31, 2002 and 2001, are as follows:
	 May 31, 2002 		 Gross	 Gross 	 Amortized	Unrealized	Unrealized 	 Cost	 Gains	 Losses Fair Value
Municipal obligations	 $	-___	$	-	$	-	$	-___ Mutual funds	 15,998		-		-	 15,998
		 $15,998	$	-	$	-	$ 15,998
		 Gross	 Gross 	 Amortized Unrealized	 Unrealized 	 Cost	 Gains	 Losses Fair Value
Municipal obligations	 $	625,326	$	-	$	-	$ 625,326 Mutual funds 1,874,821	 -		-	1,874,821
		 $2,500,147	$	-	$	- $2,500,147
Maturities of investment securities classified as available- for-sale at May 31, 2002 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to recall or prepay obligations with or without call or prepayment penalties
	Amortized 	Cost	Fair Value Investment securities available-for-sale: 	Due within one year	$	15,998	$	15,998 	Due after one year through three years		 -		 - 	Due after three years through five years	 		 -		 - 		Total		 $	15,998	$	15,998
Proceeds from sales of investment securities available-for- sale during fiscal 2002, 2001 and 2000 were $7,745,325, $12,045,251 and $2,550,000, respectively. No gains or losses were realized on those sales for fiscal 2002, 2001 and 2000.
NOTE 3 - CHANGE IN ACCOUNTING POLICY
The Company changed its accounting policy in the fourth quarter of fiscal 2002 with regard to slotting fees. The effect of this accounting change was to adopt this policy as of the beginning of fiscal 2002 (June 1, 2001). Previously, slotting fees were expensed as incurred. The Company changed this accounting policy to capitalize and amortize such costs over the expected benefit period, which is generally one year. This change in accounting policy was made to more closely match the cost of the shelf space obtained with the slotting fees with the revenues produced by the shelf space. The cumulative effect of this change in accounting policy resulted in a noncash cumulative adjustment of $413,401 ($0.03 per share), net of taxes. The accounting change also increased net income before the cumulative effect in 2002 by $197,141 ($0.02 per share). The effect on income in 2001 and 2000 has not been determined. Quarterly results for 2002 reflecting this change in accounting are included in Note 17, Quarterly Results of Operations. Pro forma earnings per s hare amounts for previous quarters, assuming the new policy was applied retroactively, are as follows:
Basic earnings per share:	 First 	 Second 	 Third Net income - as reported	$	.09	$	.05	$	.09 Net income - pro forma		 .09		.05		.09
Diluted earnings per share: Net income - as reported	$	.09	$	.05	$	.09 Net income - pro forma		 .09		.05		.09
NOTE 4 - NOTES RECEIVABLE
Notes receivable as of May 31, 2002 and 2001 consist of the following: 	 2002 	2001 8% note, due in 120 monthly installments of $1,092 through November 1, 2010, collateralized by equipment and personal guarantee	 $	80,625 	$	86,999
8% note, due in 120 monthly installments of $3,640 through November 1, 2010, collateralized by property		268,749 		289,995
8% note, due in 360 monthly installments of $12,474 through November 1, 2030, collateriazed by property	 1,678,262 	 1,693,041 			 2,027,636 	 2,070,035
Less current portion		 45,918 		 42,399 		 $ 1,981,718 	 $2,027,636
	Maturities at May 31, 		2004	 $	49,729 		2005		 53,856 		2006		 58,327 		2007		 63,168 		2008		 68,410 		Thereafter	 1,688,228
NOTE 5 - PREPAID EXPENSES
At May 31, prepaid expenses consist of the following: 	 2002 	 2001
Prepaid Slotting fees	 $ 1,001,086	 $	-____ Other prepaid expenses 	 	 3,029,951		 2,275,659
		 $4,031,037	 $2,275,659
NOTE 6 - RESTRUCTURING CHARGES
The restructuring charge of $2,564,892 recognized in the fourth quarter of fiscal 2000 relates to a restructuring plan approved by the Board of Directors in January 2000 whereby the Nashville plant which primarily manufactured low fat snacks was closed, a voluntary retirement package was offered to a group of qualified employees, and the Company-operated distribution system for Golden Flake Brand products in three fringe sales regions in Central Florida was discontinued.
The following is a summary of the one-time restructuring charge to expense for the year ended May 31, 2000.
Employee termination benefits 	$	 1,335,550 Other charges		 1,229,342
Total restructuring charge	 $	 2,564,892 	Net after tax	 $	 1,607,892 	Per share	 $	 .13
The employee related termination benefits of $1,335,550 primarily includes severance costs for 104 employees, 10 of which accepted the voluntary retirement package, 71 of which were employed in the three fringe sales regions of Central Florida and 23 of which were employed at the Nashville plant.
The other charges of $1,229,342 consisted primarily of gains and losses on disposal of property and equipment and the cost related to the exiting of sales regions in Central Florida.
NOTE 7 - OTHER ACCRUED EXPENSES
At May 31, other accrued expenses consist of the following: 		 2002	 2001
Accrued payroll	 $ 490,000 	$ 288,406 Other accrued expenses	 485,047 	 652,954
		 $ 975,047 	$ 941,360
NOTE 8 - NOTES PAYABLE - LINE OF CREDIT
Notes payable - line of credit consists of a revolving line of credit with a balance of $478,894 at May 31, 2002. The interest rate varies with the bank's prime 2003. (4.75% at May 31, 2002) with principal and 2004. interest due December 31, 2002.
NOTE 9 - LONG-TERM LIABILITIES Long-term debt consist of the following:
Note payable - bank - payable in equal monthly installments of $41,688 including interest at the LIBOR index rate plus 1.75% 3.59% at May 31, 2002) through April 3, 2011, secured by equipment	 $	3,521,536
		 Less: current portion		 371,516
			 $	3,150,020
	Maturities at May 31, 	2004	 $	 393,916 	2005		 408,292 	2006		 423,194 	2007		 438,639 	2008		 454,648 	Thereafter		1,031,331
Other long-term obligations at May 31,2002 and 2001 consist of the following:
		 2002	 2001
Salary continuation plan	$2,014,391 		$1,927,823 	Less current portion 	 (81,805)	 (40,773)
		 $1,932,586 		$1,887,050
The Company is accruing the present values of the estimated future retirement payments over the period from the date of the agreements to the retirement dates, for certain key executives. The Company recognized compensation expense of approximately $127,000, $121,000 and $265,000 for fiscal 2002, 2001and 2000 respectively.
NOTE 10 - INCOME TAXES
The effective tax rate for continuing operations differs from the expected tax using statutory rates. A reconciliation between the expected tax and the actual income tax expense follows:
	 2002 	 2001	 2000
Tax on income at statutory rates	 $ 1,441,000 $1,398,000	$732,000 Increase (decrease) resulting from: State income taxes, less Federal income tax benefit	 149,000 	 131,000 	 124,000 Tax exempt interest	 (9,000)	 (59,000)	 (20,000) Other - net		 62,000	 (57,000)	 75,000
	Total	 $ 1,643,000 $ 1,413,000 	 $ 911,000
The tax effects of temporary differences that result in deferred tax assets and liabilities are as follows:
		 2002	 2001 Deferred tax assets Salary continuation plan	$ 723,500 	 $ 692,500 Allowance for doubtful accounts			 66,674 	 117,674 					 790,174 	 810,174
Deferred tax liabilities Property and equipment		 1,275,242 	 1,791,172 Prepaid expenses			 674,163 	 260,196 		 1,949,405 	 2,051,368
Total				$	(1,159,231)	 $ (1,241,194)
NOTE 11 - EMPLOYEE BENEFIT PLANS
The Company has trusteed Qualified Profit-Sharing Plans that were amended and restated effective June 1, 1996 to add a 401(k) salary reduction provision. Under this provision, employees can contribute up to fifteen percent of their compensation to the plan on a pretax basis subject to regulatory limits; and the Company, at its discretion, can match up to 4 percent of the participants' compensation. The annual contributions to the plans are determined by the Board of Directors. Total plan expenses for the years ended May 31, 2002, 2001 and 2000 were $177,405, $181,055, and $255,000, respectively.
The Company has an Employee Stock Ownership Plan that covers all full-time employees. The annual contributions to the plan are amounts determined by the Board of Directors of the Company. Annual contributions are made in cash or common stock of the Company. The Employee Stock Ownership Plan expenses for the years ended May 31, 2002, 2001 and 2000 were $-0-, $-0-, and $ 255,000, respectively. Each participant's account is credited with an allocation of shares acquired with the Company's annual contributions, dividends received on ESOP shares and forfeitures of terminated participants' nonvested accounts.
The contributions to the 401(k) Profit-Sharing Plans and the Employees Stock Ownership Plan may not exceed fifteen percent of the total compensation of all participating employees. The Company expects to continue these plans indefinitely; however, the rights to modify, amend or terminate the plans have been reserved.
The Company has a salary continuation plan with certain of its key officers whereby monthly benefits will be paid for a period of fifteen years following retirement. The Company is accruing the present value of such retirement benefits until the key officers reach normal retirement age at which time the principal portion of the retirement benefits paid are applied to the liability previously accrued. The change in the liability for the Salary Continuation Plan is as follows:
May 31, 2002, 2001 and 2000 		 002	 2001
Accrued Salary Continuation Plan - beginning of year	$1,927,823 	$1,844,281
	Benefits Accrued		 127,341 	 121,190
	Benefits Paid		 (40,773)	 (37,648)
	Accrued Salary Continuation Plan - end of year $2,014,391 $1,927,823
NOTE 12 - STOCK OPTIONS AND LONG-TERM INCENTIVE PLANS
The Company has a stock option plan and a long-term incentive plan currently in effect under which future grants may be issued: the 1988 Stock Option a nd Stock Appreciation Plan (the 1988 Plan) and the 1996 Long-Term Incentive Plan (the 1996 Plan). The Plans are administered by the Stock Option Committee of the Board of Directors, which has sole discretion, subject to the terms of the Plans, to determine those employees including executive officers, eligible to receive awards and the amount and type of such awards. The Stock Option Committee also has the authority to interpret the Plans, formulate the terms and conditions of award agreements, and make all other determinations required in the administration thereof. All options outstanding at the end of 2002, 2001 and 2000 are exercisable.
The 1988 Plan provides that non-qualified stock options and stock appreciation rights may be granted to key employees for up to 400,000 shares of the Company's common stock. The options and stock appreciation rights are exercisable three years after date of grant. The option price may be less than, equal to or greater than the fair market value of the stock on the date of grant. Each stock appreciation right entitles the option holder, upon exercise of the related stock option, to receive from the Company the amount of the appreciation in the underlying common stock as determined by the excess of the fair market value of a share of common stock on the exercise date of the related stock option over the option price. The options and stock appreciation rights granted, if not exercised, will expire three months from the date they are exercisable. There were no stock options and stock appreciation rights outstanding under this Plan at May 31, 2002, 2001 and 2000; however, there were 175,500 shares available for granting of additional options. The 1988 Plan expires July 6, 2002 except as to options and stock appreciation rights outstanding on that date; but, the rights to amend, suspend or terminate the Plan have been reserved.
The 1996 Plan provides for the granting of Incentive Stock Options as defined under the Internal Revenue Code. Under the Plan, grants may be made to selected officers and employees, of incentive stock options with a term not exceeding ten years from the issue date and at a price not less than the fair market value of the Company's stock at the date of grant. Five hundred thousand shares of the Company's stock have been reserved for issuance under this Plan. The following is a summary of transactions:
Shares Under Option 	 2002	 2001	 2000
	 Weighted	 Weighted	 Weighted 	 Average	 Average	 Average 	 Exercise	 Exercise	 Exercise Shares Price	 Shares	 Price	 Shares	Price Outstanding - beginning of year	 40,000	 3.50 340,000	6.92	340,000 6.92 Granted 330,000	 3.81	 -	 -	 -	 - Exercised.. ( 1,000) 3.81	 -	 -	 -	 - Forfieted	 -	 -	 -	 -	 -	 - Cancelled	 - - (300,000) 7.38	 -	 -
Outstanding - end of year 369,000	 3.78	 40,000	3.50	340,000 6.92
The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB25) and related Interpretation in accounting for its Employee Stock Options rather than the Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation. Under APB25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.
Proform a information regarding net income and earnings per share is presented as if the Company had accounted for its employee stock options under the fair value method. The per share weighted average fair value of the stock options granted during fiscal 2002 was $.25. The fair value of these options was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate 5.05 percent; dividend yield 6.56 percent; expected option life of 5 years; and expected volatility of 15 percent. No options were granted during 2001 or 2000.
The Black-Scholes options pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect an option's fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.
The Company's actual and proform a information is as follows:
	 2002	 2001	 2000 Net income: As reported	$3,008,948	 $2,700,155	 $1,242,846 	Pro forma	 2,956,659	 2,700,155	 1,242,846 	Basic earnings per share: 	As reported	$	.25	$ .23	 $	 .10 	Pro forma	 	.25	 .23	 .10 	Diluted earnings per share: 	As reported	$ .25	$ .23	 $	 .10 	Pro forma	 .25	 	 .23	 .10
NOTE 13 - NET INCOME PER SHARE
During 1996, the FASB issued Statement of Financial Accounting Standards No. 128, Earnings Per Share. SFAS 128 specifies the computation, presentation and disclosure requirements for earnings per share, replacing the presentation of primary earnings per share with the presentation of basic earnings per share. The only difference in the two methods for computing the Company's per share amounts is attributable to outstanding options, under the stock options and long-term incentive plans. The effect of the stock options was determined using the treasury stock method. Consolidated net income as reported was not affected. Shares used to compute diluted earnings per share are as follows:
	Average Common Stock Shares
					2002	 2001	 2000
Basic weighted shares outstanding	 11,898,097 11,965,671 12,154,057 Effects of options	 2,796 	 2,152 	 -
Diluted shares	 11,900,893 11,967,823 112,154,057
NOTE 14 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Statement of Financial Accounting Standards No. 107, Disclosures About Fair Value of Financial Instruments requires disclosure of fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practical to estimate that value. SFAS 107 defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. The fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, such as estimates of timing and amount of expected future cash flows. Such estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.
The carrying amounts for cash and cash equivalents approximate fair value because of the short maturity, generally less than three months, of these instruments.
The fair values of investment securities have been determined using values supplied by independent pricing services and are disclosed together with carrying amounts in Note 2. The fair value of notes receivable is estimated by using a discount rate that approximates the current rate for comparable notes. At May 31, 2002 and 2001 the aggregate fair value was approximately $2,208,839 and $2,160,906 compared to a carrying amount of $2,027,636 and $2,070,035, respectively.
The interest rate on the Company's bank debt is reset monthly to reflect the 30 day LIBOR rate. Consequently, the carrying value of the bank debt approximates fair value.
The carrying value of the Company's salary continuation plan and accrued liability approximates fair value because present value is used in accruing this liability.
The Company does not hold or issue financial instruments for trading purposes and has no involvement with forward currency exchange contracts.
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Rental expense was $547,742 in 2002, $410,189 in 2001, and $498,307 in 2000. At May 31, 2002, the Company was obligated under certain operating leases for buildings, office space and equipment. The following amounts represent future payment commitments under these leases:
	May 31,	Office Space	Equipment	Total
	2003	 $24,000	 $187,000	$211,000 	2004		 -___		187,000	 187,000 	2005		 -___		-___		-___
The Company leases equipment for approximately $16,000 per month from a company which is principally owned by a major shareholder of Golden Enterprises, Inc.
The Company leases its airplane to a major shareholder of the Company for approximately $20,000 per month. The lease provides for his personal use of the airplane for up to 100 flight hours per year and is for a term of one year with automatic renewal at the option of either party.
The Company had letters of credit in the amount of $1,500,000 outstanding at May 31, 2002, and $2,000,000 outstanding at May 31, 2001 to support the Company's commercial self-insurance program. The Company pays a commitment fee of 0.375% to maintain the letters of credit.
NOTE 16 -CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables.
The Company maintains its cash accounts primarily with banks located in Alabama. The total cash balances are insured by the F.D.I.C. up to $100,000 per bank. The Company had cash balances on deposit with an Alabama bank at May 31, 2002 that exceeded the balance insured by the F.D.I.C. in the amount of $625,175.
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.
NOTE 17 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the unaudited quarterly results of operations of the years ended May 31, 2002 and 2001.
							 Per Share 			Total Revenues	Net Income	 Net Income Quarter 	First	 $ 26,108,693	 	$ 1,059,969 	$0.09 	Second	 25,130,769 	 565,404	 	 0.05 	Third	 	 27,137,452 	 1,122,950 	 0.09 	Fourth 	 27,515,336 	 260,925 0.02 	For the year	 $ 105,892,250 	$ 3,008,948 	$0.25
	First $ 26,573,809 	$ 1,272,111 	$0.11 	Second	 25,457,003 	 1,079,301		 0.09 	Third	 	 25,721,660 	 389,156	 	 0.03 	Fourth	 26,334,793 	 (40,413)	 0.00 	For the year	 $104,087,265 	$ 2,700,155 	$0.23
Revenues for the quarterly information have been adjusted from the amounts previously reported in the Company's 10-Q's. The revised amounts reflect the adoption of EITF 01-9, which requires reclassification of certain expenses. The reclassification involves removing certain expenses from selling, general and administrative expenses and including them as a direct reduction of revenues. The adoption of EITF 01-9 does not affect net income. Quarterly net income amounts for 2002 have been adjusted from amounts reported in the company's 10-Q's to reflect the change in accounting discussed in Note 3.
NOTE 18 - SUPPLEMENTARY STATEMENT OF INCOME INFORMATION
The following tabulation gives certain supplementary statement of income information for continuing operations for the years ended May 31, 2002, 2001 and 2000:
	 2002	 2001	 2000 	Maintenance and repairs	 $ 5,290,498	$5,375,639	 $ 5,889,306 	Depreciation and amortization 	2,593,621 	 2,435,599 	 3,230,321 	Payroll taxes 	2,473,871 	 2,388,828 	 2,599,980 	Advertising costs		 5,344,366 	 6,043,507 	 5,648,140
Amounts for depreciation and amortization of intangible assets, royalties, other taxes, rents and research and development costs are not presented because each of such amounts is less than 1% of total revenues.
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
SUPPLEMENTAL FINANCIAL INFORMATION
Selected quarterly financial data for the fiscal years ended May 31, 2002 and 2001 (unaudited)
(Dollar amounts in thousands, except per share data)
			First	 Second	Third	 Fourth 			Quarter	Quarter	Quarter	Quarter
Total revenues	 $26,109 $25,131	$27,137	$27,515
Income before income taxes	$1,675	 $920	 $1,787	 $533
Net income		$1,060	 $565	 $1,123	 $261
Net income per share	 $0.09	 $0.05	 $0.09	 $0.02
Cash dividends per share	 $0.0625	$0.0625	$0.0625	$0.0625
Total revenues	 $26,574	$25,457	$25,722	$26,335
Income before income taxes	$2,004	$1,689	 $598	 $(178)
Net income		$1,272	$1,079	 $389	 $(40)
Net income per share	 $0.11	 $0.09	 $0.03	 $0.00
Cash dividends per share	 $0.0600$0.0625	 $0.0625	 $0.0625
Revenues for the quarterly information have been adjusted from the amounts previously reported in the Company's 10-Q's. The revised amounts reflect the adoption of EITF 01-9, which requires reclassification of certain expenses. The reclassification involves removing certain expenses from selling, general and administrative expenses and including them as a direct reduction of revenues. Quarterly net income amounts for 2002 have been adjusted from amounts reported in the company's 10-Q's to reflect the change in accounting discussed in Note 3 to the Company's consolidated financial statements.
ITEM 9.
ITEM 9. -	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS	ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10.
ITEM 10. -	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11.
ITEM 11. -	EXECUTIVE COMPENSATION
ITEM 12.
ITEM 12. -	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 		AND RELATED STOCKHOLDER MATTERS
ITEM 13.
ITEM 13. -	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	With the exception of a description of Executive Officers of The Registrant which appears on page 5 herein, Part III is omitted because prior to September 28, 2002, the Company will file a definitive Proxy Statement with the Securities and Exchange Commission pursuant to Regulation 14A which involves the election of directors.
PART IV
ITEM 14.
ITEM 14. - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. and 2. LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
	The following consolidated financial statements of Golden Enterprises, Inc. and subsidiary required to be included in Item 8 are listed below:
	Consolidated Balance Sheets - May 31, 2002 and 2001
	Consolidated Statements of Income - Years ended May 31, 2002, 2001 and 2000
	Consolidated Statements of Changes in Stockholders' Equity - Years ended May 31, 2002, 2001 and 2000
	Consolidated Statements of Cash Flows - Years ended May 31, 2002, 2001 and 2000
	Notes to Consolidated Financial Statements
	The following consolidated financial statements schedule is included in Item 14 (d):
	Schedule II - Valuation and Qualifying Accounts
	All other schedules are omitted because the information required therein is not applicable, or the information is given in the financial statements and notes thereto.
	3. Exhibits:
10.1 - A copy of Contract for Sale and Purchase of Ocala, Florida surplus property dated January 24, 2002.
10.2 - A copy of Amendment to Salary Continuation Plan, Retirement and Disability for F. Wayne Pate dated April 9, 2002.
10.3 - A copy of Amendment to Salary Continuation Plan, Retirement and Disability for John S. Stein dated April 9, 2002.
10.4 - A copy of Amendment to Salary Continuation Plan, Death Benefits for John S. Stein dated April 9, 2002.
10.5 - A copy of Retirement and Consulting Agreement for John S. Stein dated April 9, 2002.
10.6 - A copy of Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002.
10.7 - A copy of Trust Under Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002.
	18.1 - A copy of a letter from Dudley, Hopton-Jones, Sims & Freeman PLLP the Company's independent accountant describing a change for the fiscal year ended May 31, 2002 in the method of accounting for slotting fees from expensing the costs as incurred to capitalizing and amortizing such costs over the expected benefit period, which is generally one year.
(b) Report on Form 8-K - The Registrant did not file a Form 8-K report during the last quarter of the 	period covered by this report.
	(c) Exhibits. See (a) 3. above.
(c) Financial Statement Schedules. The response to this portion of Item 14, is submitted under Item 	14.(a) 1. and 2. above.
Signatures
	Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Golden Enterprises, Inc.
By	August 24, 2002 	John H. Shannon	Date 	Vice President, Principal Financial 	Officer and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
Signature	 Title	Date
Chairman of the Board	August 24, 2002
Chief Executive	 August 24, 2002 Officer, President and Director
Vice President, Secretary,	 August 24, 2002 Principal Financial Officer and Controller
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Director	 August 24, 2002
Schedule II
GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
VALUATION AND QUALIFYING ACCOUNTS
Years ended May 31, 2000, 2001, and 2002
				 Additions 			Balance at	 Charged to		 Balance Allowance for	Beginning	 Costs and		 at End Doubtful Accounts	 of Year	 Expenses	Deductions	of Year
Year ended May 31, 2000	$111,000	$690,983	$201,983	$600,000
Year ended May 31, 2001	$600,000	$(194,938)	$58,962	$346,100
Year ended May 31, 2002	$346,100	$(113,175)	$36,825	$196,100
INDEX TO EXHIBITS
Exhibit Number	Page
10.1	A copy of Contract for Sale and Purchase of Ocala, Florida surplus property dated January 24, 2002.
10.2 A copy of Amendment to Salary Continuation Plan, Retirement 10.3 and Disability for F. Wayne Pate dated April 9, 2002.
10.4 A copy of Amendment to Salary Continuation Plan, Retirement
10.5 and Disability for John S. Stein dated April 9, 2002.
10.4 A copy of Amendment to Salary Continuation Plan, Death 10.5 Benefits for John S. Stein dated April 9, 2002.
10.6 A copy of Retirement and Consulting Agreement for
10.7 John S. Stein dated April 9, 2002.
10.6 A copy of Salary Continuation Plan for Mark W. 10.7 McCutcheon dated May 15, 2002.
10.8 A copy of Trust Under Salary Continuation Plan for
10.9 Mark W. McCutcheon dated May 15, 2002.
18.1 A copy of a letter from Dudley, Hopton-Jones, Sims & Freeman PLLP the Company's independent accountant describing a change for the fiscal year ended May 31, 2002 in the method of accounting for slotting fees from expensing the costs as incurred to capitalizing and amortizing such costs over the expected benefit period, which is generally one year.