UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K


(X)  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934

For the fiscal year ended May 31, 2004


                                       OR

( )  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934


Commission File No. 0-4339


                            GOLDEN ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)


            DELAWARE                                          63-0250005
  ------------------------------------------             ------------------
(STATE OR OTHER JURISDICTION OF                           (I.R.S. EMPLOYER
  INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NO.)

          ONE GOLDEN FLAKE DRIVE
           BIRMINGHAM, ALABAMA                                   35205
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)


        REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (205) 458-7316


           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None


           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                    Common Capital Stock, Par Value $0.662/3
                                (TITLE OF CLASS)




     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes__X__ No _____ -



     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this form 10-K or any amendment to this
Form 10-K. ( )



     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).

         Yes____  No __X__


     State the aggregate market value of the voting stock held by non-affiliates
of the  registrant  as of August  6,  2004.  Common  Stock,  Par Value  $0.662/3
--$11,487,987

     Indicate  the  number of  shares  outstanding  of each of the  Registrant's
Classes of Common Stock, as of August 6, 2004.


         CLASS                                  OUTSTANDING AT AUGUST 6, 2004
         -----                                  -----------------------------
Common Stock, Par Value $0.662/3                     11,852,830 shares


                       DOCUMENTS INCORPORATED BY REFERENCE
         Portions  of the  Annual  Proxy  Statement  for the  Annual  Meeting of
Stockholders to be held on September 23, 2004 are incorporated by reference into
Part III.
<PAGE>

EXPLANATORY NOTE


     The Company has restated its consolidated balance sheet for the years ended
May 31, 2003 and consolidated statements of operations,  cash flows and retained
earnings for the years ended May 31, 2003 and 2002 (the "2003 Restatement"). The
restatement affects periods prior to 2002. The impact of the restatement on such
prior periods was reflected as an adjustment to retained  earnings June 1, 2001.
The  restatement  is reported  in this  Annual  Report on Form 10-K for the year
ending May 31, 2004 and will be reported in amendments to our Quarterly  Reports
on Form 10-Q for its quarterly periods ended August 31, 2003,  November 30, 2003
and February 29, 2004.

     The  restatement  adjustment for years ended May 31, 2003 and 2002 resulted
in a reduction in a previously  reported net loss of  approximately  $.5 million
and a reduction in a previously reported net income of approximately $.5 million
respectively. Basic and diluted loss per share was reduced by $.04 per share for
fiscal 2003.  Basic and diluted earnings per share declined $.04 for fiscal year
2002.  In addition,  as a result of the  cumulative  effect of the  restatement,
retained  earnings  has been  reduced by $1.9 million and $2.4 million as of May
31, 2003 and 2002  respectively.  Also as the result of the cumulative effect of
the  restatement of periods prior to 2002,  the cumulative  effect was to reduce
opening retained earnings June 1, 2001 by approximately $1.9 million.

     For a discussion of the individual  restatement  adjustments,  see "Item 8.
Financial Statements - Note 2. Restatement of Prior Period Financial Statements"
(Years  ended May 31, 2003 and 2002).  Additionally,  see "Item 7.  Management's
Discussion and Analysis of Financial  Condition and Resulting  Operations."  For
more  information  on the impact of the  restatement on years 2001 and 2000, see
"Item 6. Selected  Financial Data" in Part II of this report.  These restatement
adjustments  reflect a correction of the Company's  accounting  for accruals for
its vacation pay and self-insured health and casualty  obligations.  The Company
determined  that there had been an error in its  accounting  for  self-insurance
related liabilities. The adjustments required included recognition of previously
unrecorded  liabilities  and  reductions  in amounts  previously  recognized  as
prepaid  amounts to an employee  benefit trust which was incorrect.  The Company
also determined that it had not recorded liabilities for earned vacation not yet
taken as required by Generally Accepted Accounting Principles (GAAP).

     The  Company  did not amend  its  Annual  Report on Form 10-K or  Quarterly
Reports on Form 10-Q for periods affected by the restatement that ended prior to
May 31, 2003,  and the financial  statements and related  financial  information
contained in such reports should no longer be relied on.

    All  referenced  amounts in this Annual  Report for prior  periods and prior
period comparisons reflect the balances and amounts on a restated basis.




                                       3
<PAGE>


                                TABLE OF CONTENTS

                          FORM 10-K ANNUAL REPORT -2004
                            GOLDEN ENTERPRISES, INC.
<TABLE>
<CAPTION>
<S>                                                                                            <C>
                                                                                               PAGE
                                                                                               ----
                  Explanatory Note ...........................................................   3


PART I

Item 1            Business ...................................................................   5
Item 2            Properties .................................................................   7
Item 3            Legal Proceedings ..........................................................   8
Item 4            Submission of Matters to a Vote of Security Holders ........................   8


PART II

Item 5            Market for Registrant's Common Equity, Related Stockholder
                        Matters and Issuer Purchases of Equity Securities ....................   9
Item 6            Selected Financial Data ....................................................  11
Item 7            Management's Discussion and Analysis of Financial Condition
                        and Results of Operations ............................................  12
Item 7A           Quantitative and Qualitative Disclosure About Market Risk ..................  18
Item 8            Financial Statements and Supplementary Data ................................  18
Item 9            Changes in and Disagreements with Accountants
                        on Accounting and Financial Disclosure ...............................  48
Item 9A           Controls and Procedures ....................................................  48
Item 9B           Other Information ..........................................................  48


PART III

Item 10           Directors and Executive Officers of the Registrant .........................  48
Item 11           Executive Compensation .....................................................  49
Item 12           Security Ownership of Certain Beneficial
                        Owners and Management and Related Stockholder Matters ................  49
Item 13           Certain Relationships and Related Transactions .............................  49
Item 14           Principal Accountant Fees and Services .....................................  49


PART IV.

Item 15.          Exhibits and Financial Statement Schedules .................................  50


</TABLE>




                                       4
<PAGE>






                                     PART I

                               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 15, 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,  pretzel,  peanut  butter  crackers,  cheese  crackers,  dried meat
products and nuts packaged by other  manufacturers using the Golden Flake label.
No single  product or product line accounts for more than 50% of 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  436 route  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 866 company owned  vehicles to support
the route sales  system,  including  43 tractors  and 123 trailers for long haul
delivery to the various company  warehouses  located throughout its distribution
areas, 632 store delivery vehicles and 68 cars and miscellaneous vehicles.



                                       5
<PAGE>

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  1,095 employees.  Approximately  643
employees are involved in route sales and sales  supervision,  approximately 306
are  in  production  and  production  supervision,  and  approximately  146  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.

OTHER MATTERS

     The Company's  Annual Report on Form 10-K,  Quarterly  Reports on Form 10-Q
and Current Reports on Form 8-K, and amendments to these reports,  are available
via the  Company's  website.  The website  address is  www.goldenflake.com.  All
required  reports  are  made  available  on the  website  as soon as  reasonably
practicable after they are electronically filed with the Securities and Exchange
Commission.

ENVIRONMENTAL MATTERS

     There  have  been  no  material   effects  of  compliance  with  government
provisions regulating discharge of materials into the environment.


RECENT DEVELOPMENTS

     No significant changes have occurred in the kinds of products  manufactured
or in the  markets  of  methods  of  distribution,  and no  material  changes or
developments  have  occurred  in the  business  done and  intended to be done by
Golden Flake.


                                       6
<PAGE>


<TABLE>
<CAPTION>

                        EXECUTIVE OFFICERS OF REGISTRANT
                               AND ITS SUBSIDIARY

     NAME AND AGE                                    POSITION AND OFFICES WITH MANAGEMENT
     ------------                                    ------------------------------------
<S>                           <C>
John S. Stein, 67             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, 2005.

Mark W. McCutcheon, 49        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.  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, 2005.

Patty Townsend, 46            Ms.  Townsend is Chief  Financial  Officer,  Vice  President  and Secretary of
                                  Golden  Enterprises,  Inc.  and  Controller  of Golden  Flake Snack Foods,
                                  Inc. a wholly  owned  subsidiary  of the  Company.  She was elected  Chief
                                  Financial  Officer,  Vice-President  and Secretary of the Company March 1,
                                  2004 and  Controller  of  Golden  Flake on March  15,  1997.  She has been
                                  employed  with the  Company  since  1988.  Ms.  Townsend is elected to her
                                  position on an annual  basis,  and her present  term of office will expire
                                  on May 31, 2005.

Randy Bates, 50               Mr. Bates is Executive,  Vice-President of Sales, Marketing and Transportation
                                  for Golden  Flake.  He has held these  positions  since  October 26, 1998.
                                  Mr. Bates was  Vice-President  of Sales from October 1, 1994 to 1998.  Mr.
                                  Bates has been  employed by Golden  Flake since March 1979.  Mr.  Bates is
                                  elected to his  positions  on an annual  basis,  and his  present  term of
                                  office will expire on May 31, 2005.

David Jones, 52               Mr. Jones is Executive  Vice-President  of  Operations,  Human  Resources  and
                                  Quality  Control for Golden Flake.  He has held these  positions since May
                                  20,  2002.  Mr. Jones was  Vice-President  of  Manufacturing  from 1998 to
                                  2002 and  Vice-President  of Operations  from 2000 to 2002.  Mr. Jones has
                                  been  employed by Golden  Flake since  1984.  Mr.  Jones is elected to his
                                  positions on an annual  basis,  and his present term of office will expire
                                  on May 31, 2005.
</TABLE>



                              ITEM 2. - PROPERTIES

     The  headquarters  of the Company are  located at One Golden  Flake  Drive,
Birmingham Alabama 35205. The properties of the subsidiary are described below.




                                       7
<PAGE>

                                  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 three  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,  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 866 vehicles  which includes 632 route trucks,
43 tractors, 123 trailers and 68 cars and miscellaneous  vehicles.  There are no
liens or encumbrances on Golden Flake's vehicle fleet.  Golden Flake also owns a
1987 Cessna Citation II aircraft.



                           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. - SUBMISSION OF MATTERS TO
                           A VOTE OF SECURITY HOLDERS

     Not Applicable.


                                       8
<PAGE>
                                     PART II

                 ITEM 5. - MARKET FOR REGISTRANT'S COMMON EQUITY
                         AND RELATED STOCKHOLDER MATTERS

GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

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, 2004 and 2003
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.


<TABLE>
<CAPTION>
                                                                      MARKET PRICE
                                                                   --------------------          DIVIDEND PAID
QUARTER                                                            HIGH             LOW            PER SHARE
-----------                                                        ----             ---          --------------
FISCAL 2004
<S>                                                               <C>              <C>              <C>
 First ........................................................   $2.890           $2.150           $.0313
 Second .......................................................    2.750            2.370            .0313
 Third ........................................................    3.500            2.340            .0313
 Fourth .......................................................    3.430            2.400            .0313

FISCAL 2003
 First ........................................................   $4.490           $3.710           $.0625
 Second .......................................................    5.530            2.760            .0625
 Third ........................................................    4.100            2.160            .0313
 Fourth .......................................................    2.500            1.640            .0313
</TABLE>



As of August 6, 2004, 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:

<TABLE>
<CAPTION>
EQUITY COMPENSATION PLAN INFORMATION
----------------------------------------------------------------------------------------------------------------------------------
                                (a)                             (b)                           (c)
                                                                                               Number of securities remaining
                                Number of securities to be                                     available for future issuance
                                issued upon exercise of out-    Weighted-average exercise      under equity compensation plans
                                standing options, warrants      price of outstanding options,  (excluding securities reflected in
Plan category                   and rights                      warrants and rights            column (a))
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                             <C>                            <C>
Equity compensation plans                369,000                     $3.776                          130,000
approved by security holders
----------------------------------------------------------------------------------------------------------------------------------
Equity compensation plans                   0                           0                               0
not approved by security
holders
----------------------------------------------------------------------------------------------------------------------------------
Total                                    369,000                     $3.776                          130,000
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       9
<PAGE>

ISSUER PURCHASES OF EQUITY SECURITIES

         The  following  table  provides  information  of the  repurchase by the
Company of shares of its common stock  during the fourth  quarter of fiscal year
ended May 31, 2004:

<TABLE>

                                                                                                (d) Maximum
                                                                         (c) Total Number        Number (or
                                                                             of Shares       Approximate Dollar
                                                                          Purchased as Part   Value) of Shares
                                                              (b)                of           that May Yet Be
                                     (a) Total              Average           Publicly         Purchased Under
                                      Number of            Price paid     Announced Plans       the Plans or
        Period                      Shares Purchased        per Share        or Programs          Programs
-----------------------------------------------------------------------------------------------------------------
<S>                             <C>                    <C>                 <C>                    <C>
March 1
   to                               -0-                    -0-                   -0-                   -0-
March 31
-----------------------------------------------------------------------------------------------------------------
April 1
   to                            30,475(1)              $3.00(1)                 -0-                   -0-
April 30
-----------------------------------------------------------------------------------------------------------------

May 1
   to                               -0-                    -0-                   -0-                   -0-
May 31
-----------------------------------------------------------------------------------------------------------------

Total                              30,475                  $3.00                  -0-                  -0-
-----------------------------------------------------------------------------------------------------------------
</TABLE>


------------------

(1)  On April 21, 2004, the Company  purchased 30,475 shares of its common stock
     for $3.00 per share through a private purchase transaction.


                                       10
<PAGE>


                        ITEM 6 - SELECTED FINANCIAL DATA

GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

FINANCIAL REVIEW (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                               Year Ended May 31,
                                                             2003              2002         2001            2000
                                             2004          Restated         Restated       Restated       Restated
                                         ------------     ------------     -----------    -----------    -----------
<S>                                      <C>              <C>              <C>            <C>            <C>
Net sales (b) ........................   $     97,583     $     96,604     $   104,335    $   102,797    $   113,227
Gain on sales of assets ..............             14              304             756            599            250
Other income .........................            499              506             563            691             67
                                         ---------------------------------------------------------------------------
     Total revenues ..................          8,096           97,414         105,694        104,087        113,544
Cost of sales ........................         51,243           50,748          54,326         53,631         57,460
Selling, general and
  administrative expenses ............         46,595           47,686          47,653         46,333         52,100

Interest .............................            220              269             189             85           --
Restructuring charge .................           --               --              --             --            2.565
(Loss) income before cumulative
    effect of a change in accounting
    policy and income
    taxes ............................             38           (1,289)          3,486          4,038          1,419
Federal and state income taxes .......             84             (361)          1,367          1,386            642
Net (loss) income before cumulative
   effect of a change in accounting
   policy ............................            (46)            (928)          2,119          2,653            777
Cumulative effect of a change in
    accounting policy net of
    taxes ............................           --               --               413           --             --
         Net (loss) income ...........   $        (46)    $       (928)    $     2,532    $     2,653    $       777
                                         ---------------------------------------------------------------------------
FINANCIAL DATA
Depreciation and amortization ........   $      2,347     $      2,490     $     2,594    $     2,436    $     3,230
Capital expenditures, net of disposals            829              287           3,802          1,294            149
Working capital ......................          6,697            8,818          10,989         12,909         14,028
Long-term debt .......................          2,327            3,862           5,083          1,807          1,807
Stockholders' equity .................         22,456           24,078          27,233         27,865         28,641
Total assets .........................         33,623           36,492          40,840         40,243         41,814
                                         ---------------------------------------------------------------------------
COMMON STOCK DATA
Net (loss) income before cumulative
  effect of a change in accounting
  policy .............................   $      (0.00)    $      (0.08)    $      0.18    $      0.22    $      0.06
Cumulative effect of a change in
  accounting policy net of taxes .....           --               --              0.03           --             --
Basic and diluted net (loss) income ..          (0.00)           (0.08)           0.21           0.22           0.06
Dividends ............................          .1250            .1875            0.25           0.25           0.24
Book value ...........................           1.89             2.20            2.29           2.33           2.37
Price range ..........................      3.50-2.15      5.530-1.640     4.550-2.950    4.750-2.875    4.125-2.313
                                         ---------------------------------------------------------------------------
FINANCIAL STATISTICS
Current ratio ........................           1.84             2.09            2.37           2.58           2.43
Net (loss) income as percent of
    total revenues ...................           0.00%            (1.0)%           2.4%           2.5%           0.7%
Net (loss) income as percent of
stockholders' equity (a) .............          (0.00)%           (5.1)%          10.1%           9.0%           3.9%
                                         ---------------------------------------------------------------------------
OTHER DATA
Weighted average common shares
   outstanding .......................     11,879,891       11,883,305      11,898,097     11,965,671     12,154,057
Common shares outstanding at
   year end ..........................     11,852,830       11,883,305      11,883,305     11,932,741     12,065,000
Approximate number of
stockholders .........................          1,500            1,500           1,500          1,500          1,600
</TABLE>

(a)  Average amounts at beginning and end of fiscal year.

(b)  Reflects on all periods  presented,  the effect on revenues of adopting the
     provisions of the Emerging  Issues Task Force of the  Financial  Accounting
     Standards  Board issue No. 01-9  Accounting  for  Consideration  Given by a
     Vendor to a Customer  (Including a Reseller of the Vendor's Products) (EITF
     01-9)


                                       11
<PAGE>


Golden Enterprises
Selected Financial Data


     The 2004 Restatement  adjustments affecting the years 2001 and 2000 are set
forth in the following table:

<TABLE>
<CAPTION>
                                                                     2001                        2000
                                                                 -----------------------      ---------------------
                                                                      As                          As
                                                                  Previously     As           Previously    As
                                                                   Reported   Restated         Reported  Restated
                                                                 -----------------------      ---------------------
      Income statement data;
<S>                                                            <C>              <C>         <C>            <C>
           Net sales                                           $      102,797   102,797     $    113,227   113,227
           Net Income                                                   2,700     2,653            1,243       777
           Basic and diluted net income per share                        0.23      0.22             0.10      0.06

      Financial position data (at May 31):
           Total assets                                        $       39,247    40,243     $     41,333    41,814
           Stockholders' equity                                        29,800    27,865           30,528    28,641

</TABLE>

The  2004  restatement  adjustments  affecting  the  years  2001  and  2000  are
adjustments  with respect to self  insurance  accruals  and accrued  compensated
absences, as described in "Item 8. Financial Statements - Note 2. Restatement of
Previously Issued Financial Statements."


                                       11-A
<PAGE>


           ITEM 7. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     The Management's Discussion and Analysis of Financial Condition and Results
of  Operations  set forth in this Item 7 has been revised to reflect the May 31,
2003 10-K/A Amendment No. 1 "Restatement."

     The purpose of this discussion is to provide  additional  information about
Golden  Enterprises,  Inc.,  its  financial  condition  and the  results  of its
operations.  Readers should refer to the consolidated  financial  statements and
other financial data presented  throughout  this report to fully  understand the
following discussion and analysis.

RESTATEMENT

     The Company has restated its consolidated balance sheet for the years ended
May 31, 2003 and consolidated statements of operations,  cash flows and retained
earnings for the years ended May 31, 2003 and 2002 (the "2003" Restatement). The
restatement affects periods prior to 2002. The impact of the restatement on such
prior periods was reflected as an adjustment to retained  earnings June 1, 2001.
The  restatement  is reported  in this  Annual  Report on Form 10-K for the year
ending May 31, 2004 and will be reported in amendments to our Quarterly  Reports
on form 10-Q for its quarterly periods ended August 31, 2003,  November 30, 2003
and February 29, 2004.

The  restatement  adjustment for years ended May 31, 2003 and 2002 resulted in a
reduction in a previously  reported net loss of approximately  $.5 million and a
reduction  in a  previously  reported  net income of  approximately  $.5 million
respectively. Basic and diluted loss per share was reduced by $.04 per share for
fiscal 2003.  Basic and diluted earnings per share declined $.04 for fiscal year
2002.  In addition,  as a result of the  cumulative  effect of the  restatement,
retained  earnings  has been  reduced by $1.9 million and $2.4 million as of May
31, 2003 and 2002 respectively.  Also, as the result of the cumulative effect of
the  restatement of periods prior to 2002,  the cumulative  effect was to reduce
opening  retained  earnings June 1, 2001 by  approximately  $1.9 million.  For a
discussion of individual  adjustment  items, see "Item 8- Financial  Statements-
Note 2 Restatement."

OVERVIEW

          The Company  manufactures  and distributes a full line of snack items,
such as potato chips,  tortilla chips, corn chips,  fried pork skins,  baked and
fried  cheese  curls,  onion rings and  buttered  popcorn.  The products are all
packaged in flexible bags or other suitable wrapping material.  The Company also
sells a line of cakes and cookie  items,  canned dips,  pretzels,  peanut butter
crackers,  cheese  crackers,  dried meat  products  and nuts  packaged  by other
manufacturers using the Golden Flake label.

     No  single  product  or  product  line  accounts  for more  than 50% of the
Company's sales,  which affords some protection  against loss of volume due to a
crop  failure  of  major  agricultural  raw  materials.  Raw  materials  used in
manufacturing  and processing the Company's snack food products are purchased on
the open market and under contract through brokers and directly from growers.  A
large part of the raw materials used by the Company consists of farm commodities
which are subject to  precipitous  changes in supply and price.  Weather  varies
from  season  to  season  and  directly  affects  both the  quality  and  supply
available.  The  Company  has no control  of the  agricultural  aspects  and its
profits are affected accordingly.


                                       12
<PAGE>


     The  Company  sells its  products  through its own sales  organization  and
independent  distributors to commercial  establishments  that sell food products
primarily in the  Southeastern  United States.  The products are  distributed by
approximately 436 route  representatives who are supplied with selling inventory
by the Company's trucking fleet. All of the route  representatives are employees
of the Company and use the Company's direct-store delivery system.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     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  judgments of certain
amounts  included in the  financial  statements,  giving due  considerations  to
materiality.  The Company  does not  believe  there is a great  likelihood  that
materially  different  amounts would be reported under  different  conditions or
using different  assumptions related to the accounting policies described below.
However,  application  of these  accounting  policies  involves  the exercise of
judgment and use of  assumptions  as to future  uncertainties  and, as a result,
actual results could differ from these estimates.


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.

     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. The 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 the 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  $11.6 million,  $12.8
million and $11.7 million for the years ended 2004, 2003 and 2002, respectively.
There was no resulting impact on net operating results from adopting EITF 01-09.

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 non-cash  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).


                                       13
<PAGE>


Accounts Receivable

     The Company records accounts  receivable at the time revenue is recognized.
Amounts for bad debt expense are recorded in selling, general and administrative
expenses  on the  Consolidated  Statements  of  Operations.  The  amount  of the
allowance  for  doubtful  accounts  is based  on  management's  estimate  of the
accounts  receivable amount that is uncollectible.  Management records a general
reserve based on analysis of historical  data. In addition,  management  records
specific reserves for receivable  balances that are considered  high-risk due to
known facts  regarding  the  customer.  The  allowance for bad debts is reviewed
quarterly, and it is determined whether the amount should be changed. Failure of
a major customer to pay the Company amounts owed could have a material impact on
the financial  statements  of the Company.  At May 31, 2004 and 2003 the Company
had accounts  receivables in the amount of $7.5 million and $7.8 million, net of
an  allowance   for  doubtful   accounts  of  $0.2  million  and  $0.2  million,
respectively.

Inventories

     Inventories are stated at the lower of cost or market.  Cost is computed on
the first-in, first out method.


Accrued Expenses

     Management estimates certain material expenses in an effort to record those
expenses in the period incurred. The most material accrued estimates relate to a
salary  continuation  plan for certain key  executives  of the  Company,  and to
insurance-related expenses, including self-insurance.  Workers' compensation and
general  liability  insurance  accruals are recorded  based on insurance  claims
processed as well as historical claims  experience for claims incurred,  but not
yet reported.  These estimates are based on historical loss development factors.
Employee  medical  insurance  accruals  are  recorded  based on  medical  claims
processed as well as historical  medical claims  experienced for claims incurred
but not yet reported. Differences in estimates and assumption could result in an
accrual requirement materially different from the calculated accrual.

OTHER MATTERS

    Transactions  with  related  parties,  reported  in Note 14 of the  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 $6.7 million at May 31, 2004  compared to $8.3 million
at May 31, 2003.  Net cash  provided by  operations  amounted to $2.9 million in
fiscal year 2004,  $4.6  million in fiscal year 2003 and $1.9  million in fiscal
year 2002. The decrease in net cash provided by operations is primarily  related
to changes in receivables,  inventories  and accounts  payable offset by the net
loss for fiscal  year 2004 of $45,846  compared  to the net loss for fiscal year
2003 of $927,765.

    Additions  to property,  plant and  equipment,  net of  disposals  were $0.8
million,  $0.3  million and $3.8  million in fiscal  years 2004,  2003 and 2002,
respectively, and are expected to be about $1.9 million in 2005.

     Cash  dividends  of $1.5  million,  $2.2 million and $3.0 million were paid
during fiscal years 2004, 2003, and 2002,  respectively.  The quarterly dividend
was  reduced  to $.03125  from  $.0625 in the third  quarter  of fiscal  2003 in
response to a decrease in earnings.


                                       14
<PAGE>


     The  amount of cash used to  purchase  treasury  shares in fiscal  2004 was
$0.09 million.  No cash was used to purchase  treasury shares in fiscal 2003 and
$0.2 million was used in 2002.

      During fiscal 2004, the company  re-paid debt, net of borrowings,  of $1.4
million.

     The following table summarizes the significant  contractual  obligations of
the Company as of May 31, 2004:


<TABLE>
<CAPTION>
CONTRACTUAL OBLIGATIONS              TOTAL           2005        2006-2007       2008-2009       THEREAFTER
-----------------------              -----           ----        ---------       ---------       ----------
<S>                             <C>           <C>             <C>             <C>    <C>     <C>     <C>
Long-Term Debt                  $    999,562  $      477,980  $      521,582  $     -0-      $      -0-
Purchase Commitment                2,096,000       1,491,000         605,000        -0-             -0-
Salary Continuation Plan           1,901,567          95,948         216,448        253,870       1,335,301
                                   ---------          ------         -------        -------       ---------
Total Contractual Obligations   $  4,997,129  $    2,064,928  $    1,343,030  $     253,870  $    1,335,301
                                   =========       =========       =========        =======       =========
</TABLE>






Other Commitments

     The Company had letters of credit in the amount of  $1,758,987  outstanding
at May 31, 2004 to support the Company's commercial self-insurance program.

     The Company has a  line-of-credit  agreement with a local bank that permits
borrowing  up to $1  million.  The  line-of-credit  is subject to the  Company's
continued credit  worthiness and compliance with the terms and conditions of the
advance application.

     Long-term  liabilities as a percentage of total capitalization was 12.3% at
May 31, 2004. The Company's current ratio at year end was 1.84 to l.00.

     Available cash, cash from operations and available credit under the line of
credit are expected to be sufficient to meet anticipated  cash  expenditures and
normal operating requirements for the foreseeable future.

OPERATING RESULTS

     Net sales  increased  by 1.0% in fiscal  year  2004,  decreased  by 7.4% in
fiscal year 2003,  and  increased  by 1.5% in fiscal year 2002.  The increase in
fiscal 2004 was primarily due to less promotional  payments to vendors that were
subtracted  from sales as required by EITF 01-9. The decrease in fiscal 2003 was
due to a general sales weakness in the U.S. salty snacks category,  particularly
during the first part of the fiscal year.

      Cost of sales as a  percentage  of net  sales  amounted  to 52.5% in 2004,
52.5% in 2003,  and  52.1% in  2002.  Cost of sales  stabilized  in 2004 and the
percentage  increase  in cost of sales for  fiscal  2003 was caused by the lower
sales volume and higher  commodity  prices and energy cost. The cost decrease in
2002 was due primarily to lower energy costs.

      Selling,  general and  administrative  expenses were 47.7% of net sales in
2004,  49.4% in 2003,  and 45.7% in 2002.  The 1.7%  decrease for fiscal 2004 is
attributed  to  the  increase  in net  sales  and a  decrease  in  vendor  sales
incentives.  The higher  percentage  cost for fiscal 2003 was due to significant
increases in employee medical, workers' compensation, general and auto liability
insurance costs, and energy costs. The more favorable cost percentage for fiscal
2002 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 2004,  2003, and 2002 were 221.3%,
(27.9%) and 39.2%, respectively. Note 9 to the Consolidated Financial Statements
provides additional information about the provision for income taxes.


                                       15
<PAGE>


OFF-BALANCE SHEET ARRANGEMENT

     The Company entered into a five-year term product purchase agreement during
the year ending May 31, 2001 with a supplier.  Under the terms of the  agreement
the minimum  purchase  quantity and the purchase price were fixed resulting in a
minimum first year commitment of approximately $2,171,000. After the first year,
the  minimum  purchase  quantity  was fixed and the  purchase  unit  price,  was
negotiable  based on the current  market.  The  purchase  product  agreement  as
subsequently  amended  is  described  in more  detail in Note 14 of the Notes to
Consolidated Financial Statements.

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 cash  equivalents,  investment  securities  and  bank  loans,  and
commodity prices affecting the cost of its raw materials.

     The Company's cash equivalents consist of short-term marketable securities.
Presently these are variable rate money market funds.  Its bank loans also carry
variable rates.  Assuming year end 2004 variable rate investment levels and bank
loan balances, a one-point change in interest rates would impact interest income
by $1,520 and interest expense by $9,996.

     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  government
provisions regulating discharge of materials into the environment.

FORWARD-LOOKING STATEMENTS

     This discussion  contains  certain  forward-looking  statements  within the
meaning of the Private Securities  Litigation Reform Act of 1995. Actual results
could differ materially from those forward-looking statements.  Factors that may
cause actual results to differ materially  include price  competition,  industry
consolidation,  raw  material  costs and  effectiveness  of sales and  marketing
activities,  as described in the Company's  filings with Securities and Exchange
Commission.

RECENT DEVELOPMENTS

     The Company  restated its previously  issued  financial  statements for the
three years ended May 31, 2003. The  restatement  affected  periods prior to May
31, 2001.  The impact of the  restatement on such prior periods was reflected as
an adjustment to opening  retained  earnings as of June 1, 2000. The restatement
was reported in amendment No. 1 to the retained earnings as of June 1, 2000. The
restatement  was reported in amendment No. 1 to the  Company's  Annual Report on
Form 10-K/A for the year ended May 31,  2003.  The  Company  also  restated  the
Company's  Quarterly  Reports on Form  10-Q/A for the  quarterly  periods  ended
August  31,  2003,  November  30,  2003 and  February  29,  2004  with  restated
comparative information for comparative periods of the previous year.


                                       16
<PAGE>

     In connection with their audits of the restatement of previously issued
annual financial statements and the consolidated financial statements for the
year ended May 31, 2004, the Company's independent auditors identified and
communicated to the Company and the Audit Committee "material weaknesses" (as
defined under audit standards adopted by the Public Company Accounting Oversight
Board) relating to the Company's accounting and public reporting of significant
matters and management review and oversight of certain accounting matters.

     In the past year, the Company  undertook to review and analyze its internal
audit program and has directed senior management to dedicate  resources and take
steps to strengthen controls.  The company engaged the services of a third party
consultant to assist in its review and analysis. The Company intends to identify
and implement  actions to improve the  effectiveness  of procedures and internal
controls,  including  enhanced training with respect to financial  reporting and
disclosure responsibilities.

RECENT ISSUED ACCOUNTING PRONOUNCEMENTS

     Effective June 1, 2002, the Company  adopted SFAS No. 144,  "Accounting for
the  Impairment  or  Disposal  of  Long-Lived  Assets."  SFAS No. 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.  The  adoption  of this  standard  did not have a material
impact on the Company's financial position, results of operations or cash flows.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Cost Associated
with Exit or Disposal  Activities." SFAS No 146 requires  companies to recognize
costs associated with exit or disposal  activities when they are incurred rather
than at the date of a commitment to an exit or disposal  plan.  Costs covered by
SFAS No. 146 includes lease  termination  costs and certain  employee  severance
costs that are associated with a restructuring,  discontinued operations,  plant
closing or other exit or disposal  activity.  SFAS No. 146 is effective for exit
or disposal  activities  initiated  after December 31, 2002. The Company adopted
SFAS No. 146 on June 1, 2003 and the  adoption of this  standard  did not have a
material impact on the Company's consolidated financial statements.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of FASB Statement No.
123."  SFAS  No.  148  amends  SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation"  to provide  alternative  methods of  transition  for a  voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition,  SFAS No. 148 amends the disclosure  requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results.  The Company
has adopted the disclosure  requirements  of SFAS No. 148 effective May 31, 2003
in its consolidated  financial statements.  The Company will continue to account
for  stock-based  compensation  using the methods  detailed  in the  stock-based
compensation accounting policy as described earlier.

     In April 2003,  the FASB issued SFAS No. 149 "Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities."  This  statement  amends and
clarifies the  accounting and reporting for  derivative  instruments,  including
embedded derivatives, and for hedging activities under SFAS No. 133, "Accounting
for Derivative instruments and Hedging Activities." SFAS No. 149 amends SFAS No.
133 to reflect  the  decisions  made as part of the  Derivatives  Implementation
Group and in other FASB projects or deliberations.  SFA No. 149 is effective for
contracts  entered  into or  modified  after  June  30,  2003,  and for  hedging
relationships  designed  after  June 30,  2003 and did not have an impact on the
Company.

     In January 2003, the FASB issued FASB  Interpretation  No. 46 (FIN No. 46),
"Consolidation of Variable Interest Entities,  an Interpretation of ARB No. 51."
FIN No. 46 requires certain variable interest entities to be consolidated by the
primary  beneficiary of the entity if the equity  investors in the entity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional  subordinated  financial  support from other  parties.  FIN 46 became
effective  February 1, 2003 for variable interest entities created after January
31, 2003,  and July 31, 2003 for variable  interest  entities  created  prior to
February  1, 2003.  In  December  2003,  the FASB  issued a revised  FIN 46. The
revised standard,  FIN 46R,  modifies or clarifies various  provisions of FIN 46
and incorporates  many FASB Staff Positions  previously issued by the FASB. This
standard  replaces  the  original  FIN 46 that was issued in January  2003.  The
adoption  of  these  new  standards  did not  have an  impact  on the  Company's
financial position, results of operations or cash flows.

                                       17
<PAGE>

     In  December  2003,  the FASB issued a revised  SFAS No.  132,  "Employers'
Disclosures about Pensions and Other Postretirement  Benefits." The revised SFAS
No.  132  revised  employers'  disclosures  about  pension  plans and other post
retirement  benefit plans.  It did not change the  measurement or recognition of
those plans required by SFAS No. 87, "Employers'  Accounting for Pensions," SFAS
No. 88,  "Employers'  Accounting for  Settlements  and  Curtailments  of Defined
Benefit  Pension  Plans  and  for  Termination  Benefits,"  and  SFAS  No.  106,
"Employers'  Accounting for  Postretirement  Benefits Other Than  Pensions." The
revised  SFAS No. 132  retains  the  disclosure  requirements  contained  in the
original  SFAS No.  132.  It  requires  additional  disclosures  to those in the
original  SFAS No.  132 about  the  assets,  obligations,  cash  flows,  and net
periodic benefit cost of defined benefit pension plans and other defined benefit
postretirement  plans.  The adoption of this new standard did not have an impact
on the Company's financial position, results of operations or cash flows.

     In December 2003, the SEC released Staff  Accounting  Bulletin ("SAB") 104.
SAB 104 revises or rescinds portions of the interpretative  guidance included in
SEC Topic 13, "Revenue Recognition," in order to make this interpretive guidance
consistent with current  authoritative  accounting and auditing guidance and SEC
rules and  regulations.  The  principal  revisions  relate to the  rescission of
material no longer  necessary  because of private  sector  developments  in U.S.
generally  accepted  accounting  principles.  SAB 104 also  rescinds the Revenue
Recognition  in Financial  Statements  Frequently  Asked  Questions  and Answers
document issued in conjunction with Topic 13. Selected portions of that document
have been  incorporated into Topic 13. The adoption of this new standard did not
have an impact on the  Company's  financial  position,  results of operations or
cash flows.

ITEM 7 A.- 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 16.

ITEM 8.- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated  financial statements of the registrant and its subsidiary
for the year ended May 31, 2004,  consisting  of the  following,  are  contained
herein:

Consolidated Balance Sheets                 - May 31, 2004 and 2003

Consolidated Statements of Operations       - Years ended May 31, 2004, 2003
                                                 and 2002

Consolidated Statements of                  - Years ended May 31, 2004, 2003
  Cash Flows                                     and 2002

Consolidated Statements of Changes          -Years ended May 31, 2004, 2003
  in Stockholders' Equity                        and 2002

Notes to Consolidated Financial Statements  - Years ended May 31, 2004, 2003
                                                 and 2002

Quarterly Results of Operations             - Years ended May 31, 2004,
                                                 and 2003



                                       18
<PAGE>


               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, 2004 and 2003,  and the related
consolidated statements of operations,  changes in stockholders' equity and cash
flows for each of the three years in the period ended May 31,  2004.  Our audits
also  included the financial  statement  schedule  listed at Item 16(a)2.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). 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,  2004  and  2003,  and  the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period  ended May 31, 2004,  in  conformity  with  accounting
principles  generally  accepted  in the United  States of  America.  Also in our
opinion, such financial statement schedule,  when considering in relation to the
basic consolidated  financial statements,  taken as a whole, presents fairly, in
all material respects, the information set forth therein.

As described in Note 2,  Restatement of prior period financial  statements,  the
Company has restated previously issued financial statements.

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              DUDLEY, HOPTON-JONES, SIMS & FREEMAN, PLLP
July 21, 2004



                                       19
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                              May 31, 2004 and 2003

                                     ASSETS

                                                            Restated
                                                2004          2003
                                             -----------   -----------
CURRENT ASSETS
   Cash and cash equivalents .............   $   565,195   $ 1,278,333

   Receivables:
     Trade accounts ......................     7,445,741     7,835,874
     Other ...............................       231,410       206,480
                                             -----------   -----------
                                               7,677,151     8,042,354
     Less: Allowance for doubtful accounts       185,000       196,100
                                             -----------   -----------
                                               7,492,151     7,846,254
     Notes receivable, current ...........        45,760        42,253
                                             -----------   -----------
                                               7,537,911     7,888,507
                                             -----------   -----------
   Inventories:
     Raw materials .......................     1,198,534     1,016,050
     Finished goods ......................     2,504,515     2,289,145
                                             -----------   -----------
                                               3,703,049     3,305,195
                                             -----------   -----------

   Prepaid expenses ......................     2,292,943     2,881,121
   Deferred income taxes .................       618,803       652,153
                                             -----------   -----------
      Total current assets ...............    14,717,901    16,005,309
                                             -----------   -----------

PROPERTY, PLANT AND EQUIPMENT
   Land ..................................     3,030,974     3,030,974
   Buildings .............................    16,925,279    16,897,204
   Machinery and equipment ...............    35,159,507    41,478,108
   Transportation equipment ..............    15,170,308    15,113,558
                                              70,286,068    76,519,844
     Less: Accumulated depreciation ......    56,439,726    61,158,271
                                             -----------   -----------
                                              13,846,342    15,361,573
                                             -----------   -----------
OTHER ASSETS
   Notes receivable, long-term ...........     1,819,986     1,865,747
   Cash surrender value of life insurance      2,648,567     2,762,739
   Other .................................       589,760       496,175
                                             -----------   -----------
     Total other assets ..................     5,058,313     5,124,661
                                             -----------   -----------

     TOTAL ...............................   $33,622,556   $36,491,543
                                             ===========   ===========


                                       20
<PAGE>



                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                               Restated
                                                                  2004            2003
                                                             ------------    -------------
CURRENT LIABILITIES
<S>                                                          <C>             <C>
   Checks outstanding in excess of bank balances .........   $  1,293,534    $  1,157,108
   Accounts payable ......................................      1,816,879       1,700,934
   Current portion of long-term debt .....................        477,980         432,142
   Other accrued expenses ................................      4,334,798       4,289,448
   Salary continuation plan ..............................         95,948          88,595
                                                             ------------    ------------
     Total current liabilities ...........................      8,019,139       7,668,227
                                                             ------------    ------------
LONG-TERM LIABILITIES
   Note payable - bank, non-current ......................        521,582       1,990,767
   Salary continuation plan ..............................      1,805,619       1,870,991
   Deferred income taxes .................................        820,432         884,033
                                                             ------------    ------------
     Total long-term liabilities .........................      3,147,633       4,745,791
                                                             ------------    ------------
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       6,497,954
   Retained earnings .....................................     17,363,237      18,893,553
   Treasury shares - at cost (1,975,963 shares in 2004 and
     1,945,488 shares in 2003) ...........................    (10,624,602)    (10,533,177)
                                                             ------------    ------------
   Total stockholders' equity ............................     22,455,784      24,077,525
                                                             ------------    ------------






     TOTAL ...............................................   $ 33,622,556    $ 36,491,543
                                                             ============    ============

</TABLE>


                                       21
<PAGE>



                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years Ended May 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                  Restated          Restated
                                                                      2004           2003             2002
                                                                 ------------    ------------    -------------
<S>                                                              <C>             <C>             <C>
   Net sales .................................................   $ 97,583,493    $ 96,604,461    $ 104,335,234
   Cost of sales .............................................     51,243,037      50,747,626       54,325,919
                                                                 ------------    ------------    -------------
   Gross margin ..............................................     46,340,456      45,856,835       50,009,315
   Selling, general and administrative expenses ..............     46,595,519      47,686,174       47,653,164
                                                                 ------------    ------------    -------------
   Operating (loss) income ...................................       (255,063)     (1,829,339)       2,356,151
                                                                 ------------    ------------    -------------
   Other income (expenses):
   Gain on sale of assets ....................................         13,861         304,221          756,259
   Interest expense ..........................................       (219,608)       (268,489)        (190,159)
   Other income ..............................................        498,613         506,296          563,383
                                                                 ------------    ------------    -------------
     Total other income (expenses) ...........................        292,866         542,028        1,129,483
                                                                 ------------    ------------    -------------

     Income (Loss) income before cumulative effect of a change
      in accounting policy and income taxes ..................         37,803      (1,287,311)       3,485,634
                                                                 ------------    ------------    -------------

      Provision for income taxes .............................         83,649        (359,546)       1,366,930
                                                                 ------------    ------------    -------------

     Net (loss) income before cumulative effect of a change in
      accounting policy ......................................        (45,846)       (927,765)       2,118,704


     Cumulative effect of a change in accounting
      policy, net of taxes of $262,037 .......................           --              --            413,401
                                                                 ------------    ------------    -------------

     Net (loss) income .......................................   $    (45,846)   $   (927,765)   $   2,532,105
                                                                 ============    ============    =============
PER SHARE OF COMMON STOCK
   Net (loss) income before cumulative effect of a change
     in accounting policy ....................................   $       --      $      (0.08)   $        0.18
   Cumulative effect of a change in accounting
     policy, net of taxes ....................................           --              --               0.03
                                                                 ------------    ------------    -------------
   Basic earnings ............................................   $       --      $      (0.08)   $        0.21
                                                                 ============    ============    =============
   Diluted earnings ..........................................   $       --      $      (0.08)   $        0.21
                                                                 ============    ============    =============
</TABLE>

See Accompanying Notes to Consolidated
Financial Statements


                                       22
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Years Ended May 31, 2004, 2003 and 2002


<TABLE>
<CAPTION>

                                                       Additional                                       Total
                                          Common        Paid-in        Retained        Treasury      Stockholders'
                                           Stock        Capital        Earnings         Shares          Equity
                                         ----------   -----------    ------------    ------------    ------------
<S>                                      <C>            <C>            <C>            <C>              <C>
Balance - May 31, 2001 as restated ...   $9,219,195     6,499,554      22,491,346     (10,345,168)     27,864,927

   Net income - 2002 .................         --            --         2,532,105            --         2,532,105

   Cash dividends paid ...............         --            --        (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 as restated    9,219,195     6,497,954      22,049,446     (10,533,177)     27,233,418

   Net loss - 2003 ...................         --            --          (927,765)           --          (927,765)

   Cash dividends paid ...............         --            --        (2,228,128)           --        (2,228,128)

    Balance - May 31, 2003 as restated   $9,219,195   $ 6,497,954    $ 18,893,553    $(10,533,177)   $ 24,077,525
                                         ----------   -----------    ------------    ------------    ------------
   Net loss - 2004 ...................         --            --           (45,846)           --           (45,846)
   Cash dividends paid ...............         --            --        (1,484,470)           --        (1,484,470)
   Treasury shares purchased .........         --            --              --           (91,425)        (91,425)
                                         ----------   -----------    ------------    ------------    ------------
   Balance - May 31, 2004 ............   $9,219,195   $ 6,497,954    $ 17,363,237    $(10,624,602)   $ 22,455,784
                                         ==========   ===========    ============    ============    ============
</TABLE>

See Accompanying Notes to Consolidated
Financial Statements

                                       23
<PAGE>
                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years Ended May 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                   Restated      Restated
                                                                        2004          2003         2002
                                                                     ---------     ---------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                   <C>          <C>          <C>
   Net (loss) income ............................................     $(45,846)    $(927,765)   $2,532,105
   Adjustment to reconcile net (loss) income to net cash provided
    by operating activities:
      Cumulative effect of a change in accounting policy ........         --            --        (413,401)
      Depreciation ..............................................    2,346,880     2,490,329     2,593,621
      Deferred income taxes .....................................      (30,251)        1,433        36,641
      Gain on sale of property and equipment ....................      (13,861)     (304,221)     (756,261)
    Decrease (increase) in receivables - net ....................      354,103     1,570,347      (408,060)
    Decrease (increase) in inventories ..........................     (397,854)    1,443,303      (428,026)
    Decrease (increase)  in prepaid expenses ....................      588,178       783,358    (1,667,703)
    Decrease in cash surrender value of insurance ...............      114,172        22,597        50,614
    Increase in other assets ....................................      (93,585)      (19,214)      (42,334)
    Increase (decrease) in accounts payable .....................      115,945      (488,795)      265,301
    Increase in accrued expenses ................................       45,350        60,940        90,449
    (Decrease) increase in salary continuation plan .............      (58,019)      (54,805)       86,568
                                                                     ---------     ---------     ---------
      Net cash provided by operating activities .................    2,925,212     4,577,507     1,939,514
                                                                     ---------     ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property, plant and equipment ....................     (973,076)     (851,111)   (5,236,601)
   Proceeds from sale of property, plant and equipment ..........      155,288       399,690     1,301,160
   Collection of notes receivable ...............................       42,254       119,636        42,399
   Investment securities available-for-sale:
   Proceeds from disposals ......................................         --            --         625,326
                                                                     ---------     ---------     ---------
      Net cash used in investing activities .....................     (775,534)     (331,785)   (3,267,716)
                                                                     ---------     ---------     ---------

</TABLE>


See Accompanying Notes to Consolidated
Financial Statements


                                       24
<PAGE>

               GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
               Years Ended May 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>

                                                                                    Restated       Restated
                                                                      2004            2003           2002
                                                                  ------------    ------------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
<S>                                                               <C>             <C>             <C>
   Debt proceeds ..............................................     10,304,286      11,543,824      7,806,676
   Debt repayments ............................................    (11,727,633)    (13,121,345)    (4,666,346)
   Increase (decrease)  in checks outstanding in excess of bank
      balances ................................................        136,426         535,782       (931,135)
   Purchases of treasury shares ...............................        (91,425)           --         (193,419)
   Proceeds from exercise of stock options ....................           --              --            3,810
   Cash dividends paid ........................................     (1,484,470)     (2,228,128)    (2,974,005)
                                                                  ------------    ------------    -----------
      Net cash used in financing activities ...................     (2,862,816)     (3,269,867)      (954,419)
                                                                  ------------    ------------    -----------
NET INCREASE (DECREASE)  IN CASH AND
   CASH EQUIVALENTS ...........................................       (713,138)        975,855     (2,282,621)

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF YEAR ..........................................      1,278,333         302,478      2,585,099
                                                                  ------------    ------------    -----------
CASH AND CASH EQUIVALENTS AT
   END OF YEAR ................................................   $    565,195    $  1,278,333    $   302,478
                                                                  ============    ============    ===========
SUPPLEMENTAL INFORMATION
   Cash paid during the year for:
    Income taxes ..............................................   $   (430,216)   $   (626,349)   $ 2,343,597
    Interest ..................................................        219,608         268,489        190,159
   Noncash items:
    Equipment traded in .......................................           --            22,123           --

</TABLE>


                                       25
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           May 31, 2004, 2003 and 2002


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 and 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.

REVENUE CLASSIFICATION CHANGES
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. The 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 the 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  $11.6 million,  $12.8
million and $11.7 million for the years ended 2004, 2003 and 2002, respectively.
There was no resulting impact on net operating results from adopting EITF 01-09.

CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.

INVENTORIES
Inventories  are stated at the lower of cost or market.  Cost is computed on the
first-in, first-out method.



                                       26
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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 operations.

SELF-INSURANCE
The Company is self-insured for certain losses relating to automobile liability,
general liability,  workers'  compensation,  property losses and medical claims.
The Company also has stop loss coverage to limit the exposure arising from these
claims.  Self-insurance  claims  filed and claims  incurred but not reported are
accrued  based  upon  management's  estimates  of the  aggregate  liability  for
uninsured claims incurred.  Automobile  liability,  general liability,  workers'
compensation,  and  property  losses costs are covered by letters of credit with
the Company's claims administrators.


ADVERTISING
The Company expenses advertising costs as incurred.  These costs are included in
selling,  general and administrative  expenses in the Consolidated  Statement of
Operations.   Advertising   expense  amounted  to  $4,452,926,   $5,031,409  and
$4,371,719 for the fiscal years 2004, 2003 and 2002, respectively.

INCOME TAXES
Deferred  income taxes are provided  using the  liability  method to measure tax
consequences  resulting from differences between financial  accounting standards
and applicable  income tax laws.  Deferred tax assets are reduced by a valuation
allowance  when, in the opinion of  management,  it is more likely than not that
some portion or all of the  deferred  tax assets will not be realized.  Deferred
tax assets and  liabilities  are adjusted for the effects of changes in tax laws
and rates on date of enactment.

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 Southeastern United States.

STOCK OPTIONS
The Company applies APB Opinion 25,  "Accounting for Stock Issued to Employees,"
and  related  interpretations  in  accounting  for all stock  option  plans.  No
stock-based  compensation  cost has been  recognized  in  operations  for  stock
options  granted because the option exercise price was equal to or more than the
market price of the underlying common stock on the date of grant.

SFAS No. 123, "Accounting for Stock-Based  Compensation," as amended by SFAS No.
148,  "Accounting  for  Stock-Based  Compensation - Transition and  Disclosure,"
requires  the  Company to provide  pro forma  information  regarding  net income
(loss) as if the compensation cost for the Company's stock option plans had been
determined in accordance with the fair value based method prescribed in SFAS No.
123. To provide the required pro forma  information,  the Company  estimates the
fair  value of each stock  option at the grant  date by using the  Black-Scholes
option-pricing model.


                                       27
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED


The  following  table  represents  the pro forma effect on net income (loss) and
earnings  (loss) per share as if the  Company  had  applied the fair value based
method   recognition   provisions  of  SFAS  No  123  to  stock-based   employee
compensation:


<TABLE>
<CAPTION>
                                                                      Years Ended May 31,
                                                            ---------------------------------------

                                                                          Restated      Restated
                                                               2004          2003           2002
<S>                                                           <C>        <C>            <C>
Net (loss) income as reported .............................   $(45,846)  $  (927,765)   $ 2,532,105
Deduct: total stock-based employee compensation expense
   determined under fair value based method for all awards,
   net of related tax effects .............................    (12,291)      (12,660)       (52,289)
                                                              --------   -----------    -----------
   Pro forma net (loss) income ............................   $(58,137)     (940,425)     2,479,816
                                                              ========   ===========    ===========
(Loss) earnings per share:
   Basic - as reported ....................................   $   --     $     (0.08)   $       .21
                                                              ========   ===========    ===========
   Basic - Pro forma ......................................   $   --     $     (0.08)   $        21
                                                              ========   ===========    ===========
   Diluted - as reported ..................................   $   --     $     (0.08)   $       .21
                                                              ========   ===========    ===========
   Diluted - Pro forma ....................................   $   --     $     (0.08)   $       .21
                                                              ========   ===========    ===========
</TABLE>

SHIPPING AND HANDLING COSTS
Shipping and  handling  costs,  which  include  salaries and vehicle  operations
expenses  relating to the  delivery of products to  customers by the Company are
classified as Selling, General and Administrative (SG&A) expenses.  Shipping and
handling  costs  classified as SG&A  amounted to $2.3 million,  $2.3 million and
$2.5 million for the fiscal years 2004, 2003 and 2002, respectively.

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 PRONOUNCEMENTS
In June 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
143,  "Accounting for Asset Retirement  Obligations,"  which addresses financial
accounting and reporting obligations  associated with the retirement of tangible
long-lived assets that result from the acquisition, construction, development or
normal use of assets.  The Company  adopted SFAS No. 143 on June 1, 2003 and the
adoption did not have a material impact on the Company's  consolidated financial
statements.




                                       28
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Effective June 1, 2002, the Company  adopted SFAS No. 144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets." SFAS No. 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.  The  adoption  of this  standard  did not have a  material  impact on the
Company's financial position, results of operations or cash flows.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Cost Associated with
Exit or Disposal  Activities." SFAS No 146 requires companies to recognize costs
associated  with exit or disposal  activities when they are incurred rather than
at the date of a commitment to an exit or disposal  plan.  Costs covered by SFAS
No. 146 includes lease  termination  costs and certain employee  severance costs
that are associated with a restructuring, discontinued operations, plant closing
or other  exit or  disposal  activity.  SFAS No.  146 is  effective  for exit or
disposal activities  initiated after December 31, 2002. The Company adopted SFAS
No.  146 on June 1,  2003  and the  adoption  of this  standard  did not  have a
material impact on the Company's consolidated financial statements.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of FASB Statement No.
123."  SFAS  No.  148  amends  SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation"  to provide  alternative  methods of  transition  for a  voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition,  SFAS No. 148 amends the disclosure  requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results.  The Company
has adopted the disclosure  requirements  of SFAS No. 148 effective May 31, 2003
in its consolidated  financial statements.  The Company will continue to account
for  stock-based  compensation  using the methods  detailed  in the  stock-based
compensation accounting policy as described earlier.

In April 2003,  the FASB  issued SFAS No. 149  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  This  statement  amends and
clarifies the  accounting and reporting for  derivative  instruments,  including
embedded derivatives, and for hedging activities under SFAS No. 133, "Accounting
for Derivative instruments and Hedging Activities." SFAS No. 149 amends SFAS No.
133 to reflect  the  decisions  made as part of the  Derivatives  Implementation
Group and in other FASB projects or deliberations.  SFA No. 149 is effective for
contracts  entered  into or  modified  after  June  30,  2003,  and for  hedging
relationships  designed  after  June 30,  2003 and did not have an impact on the
Company.

In January  2003,  the FASB  issued  FASB  Interpretation  No. 46 (FIN No.  46),
"Consolidation of Variable Interest Entities,  an Interpretation of ARB No. 51."
FIN No. 46 requires certain variable interest entities to be consolidated by the
primary  beneficiary of the entity if the equity  investors in the entity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional  subordinated  financial  support from other  parties.  FIN 46 became
effective  February 1, 2003 for variable interest entities created after January
31, 2003,  and July 31, 2003 for variable  interest  entities  created  prior to
February  1, 2003.  In  December  2003,  the FASB  issued a revised  FIN 46. The
revised standard,  FIN 46R,  modifies or clarifies various  provisions of FIN 46
and incorporates  many FASB Staff Positions  previously issued by the FASB. This
standard  replaces  the  original  FIN 46 that was issued in January  2003.  The
adoption  of  these  new  standards  did not  have an  impact  on the  Company's
financial position, results of operations or cash flows.



                                       29
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

In  December  2003,  the  FASB  issued  a  revised  SFAS  No.  132,  "Employers'
Disclosures about Pensions and Other Postretirement  Benefits." The revised SFAS
No.  132  revised   employers'   disclosures   about  pension  plans  and  other
postretirement  benefit plans.  It did not change the measurement or recognition
of those plans  required by SFAS No. 87,  "Employers'  Accounting for Pensions,"
SFAS No. 88, "Employers'  Accounting for Settlements and Curtailments of Defined
Benefit  Pension  Plans  and  for  Termination  Benefits,"  and  SFAS  No.  106,
"Employers'  Accounting for  Postretirement  Benefits Other Than  Pensions." The
revised  SFAS No. 132  retains  the  disclosure  requirements  contained  in the
original  SFAS No.  132.  It  requires  additional  disclosures  to those in the
original  SFAS No.  132 about  the  assets,  obligations,  cash  flows,  and net
periodic benefit cost of defined benefit pension plans and other defined benefit
postretirement  plans.  The adoption of this new standard did not have an impact
on the Company's financial position, results of operations or cash flows.

In December 2003, the SEC released Staff  Accounting  Bulletin  ("SAB") 104. SAB
104 revises or rescinds  portions of the  interpretatative  guidance included in
SEC Topic 13, "Revenue Recognition," in order to make this interpretive guidance
consistent with current  authoritative  accounting and auditing guidance and SEC
rules and  regulations.  The  principal  revisions  relate to the  rescission of
material no longer  necessary  because of private  sector  developments  in U.S.
generally  accepted  accounting  principles.  SAB 104 also  rescinds the Revenue
Recognition  in Financial  Statements  Frequently  Asked  Questions  and Answers
document issued in conjunction with Topic 13. Selected portions of that document
have been  incorporated into Topic 13. The adoption of this new standard did not
have an impact on the  Company's  financial  position,  results of operations or
cash flows.

RECLASSIFICATIONS
Certain items included in prior years'  consolidated  financial  statements have
been reclassified to conform to current year presentation.

NOTE 2 - RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS

Prior period financial  statements have been restated to reflect  adjustments to
the Company's  financial  information  previously  reported on Form 10-K for the
years ended May 31, 2003, and 2002. The Company's 2003 quarterly information and
comparative  2002  information has also been restated to reflect  adjustments to
the  Company's  previously  reported  financial  information  on Form 10-Q.  The
restatement  affected  periods prior to 2002.  The impact of the  restatement on
such prior periods has  reflected as an  adjustment  to retained  earnings as of
June 1, 2001. In addition,  the restatement  impacts the first, second and third
quarters of 2004. The restated  amounts for these quarters are presented in Note
16,  Quarterly  Results  of  Operations  (Unaudited).  Each  of the  restatement
adjustments  is an "error"  within the  meaning of APB  Opinion  20,  Accounting
Changes.



                                       30
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          May 31, 2004, 2003, and 2002


NOTE 2 - RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS - CONTINUED



The Following  table presents the impact of the  restatement  adjustments on net
earnings for the years ended May 31, 2003, 2002 and retained earnings as of June
1, 2001:




<TABLE>
<CAPTION>
                                                                                     Retained
                                                                                     Earnings
                                                          Year Ended May 31,          June 1,
                                                     ---------------------------    -----------
                                                         2003           2002           2001
                                                     -----------    -----------     -----------
<S>                                                  <C>            <C>             <C>
Net (loss) income as originally reported             $(1,412,145)   $ 3,008,948     $24,426,345
Adjustments (pretax):
       Self-insurance liability                          669,136       (523,974)     (1,445,533)
       Compensated absences                               47,826          8,398      (1,609,890)
       Other Items                                       237,373       (237,373)           --
                                                     -----------    -----------     -----------
Total Adjustments (pretax)                               954,335       (752,949)     (3,055,423)

        Tax effect of restatement adjustments           (469,955)       276,106       1,120,424
                                                     -----------    -----------     -----------
Total net adjustments                                    484,380       (476,843)     (1,934,999)
                                                     -----------    -----------     -----------
Net (loss) income as restated                        $  (927,765)   $ 2,532,105     $22,491,346
                                                     ===========    ===========     ===========
Per share of Common Stock:
Net Loss- Basic as originally reported               $     (0.12)   $      0.25
Effect of net adjustments                                   0.04          (0.04)
                                                     -----------    -----------
Net (loss) income - Basic as restated                $     (0.08)          0.21
                                                     ===========    ===========

Net (loss) income - Diluted as originally reported   $     (0.12)   $      0.25
Effect of net adjustments                                   0.04          (0.04)
                                                     -----------    -----------
Net (loss) income - Diluted as restated              $     (0.08)   $      0.21
                                                     ===========    ===========
</TABLE>



                                       31
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          May 31, 2004, 2003, and 2002


NOTE 2 -RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS - CONTINUED

Self-Insurance liability: The Company determined that there had been an error in
its accounting for self-insurance related liabilities.  The adjustments required
included  recognition  of previously  unrecorded  liabilities  and reductions in
amounts previously recognized as prepaid amounts to an employee trust which were
incorrect.

Compensated   absences:   The  Company  determined  that  it  had  not  recorded
liabilities for earned vacation not yet taken as required by GAAP.

Other items: This category includes adjustments previously identified but deemed
to be immaterial.  Adjustments  in this category  change the timing of the items
that were previously recognized.

Income tax adjustments: As a result of the restatement adjustments,  the Company
recognized  an  additional  federal and state  deferred  valuation  allowance of
$120,000 in 2003. The remaining  amounts pertain to the tax effects of the error
correction themselves.



The  following  table sets  forth the  effects  of the  restatement  adjustments
discussed  above on the  Consolidated  Statement of  Operations  for each of the
years ended May 31, 2003 and 2002.



<TABLE>
<CAPTION>
                                                         Year Ended May 31, 2003       Year Ended May 31, 2002
                                                      ----------------------------    ---------------------------
                                                      As Originally                   As Originally
                                                        Reported      As Restated        Reported    As Restated
                                                      ----------------------------    ---------------------------
<S>                                                   <C>             <C>             <C>            <C>
Net sales                                             $ 96,367,088    $ 96,604,461    $104,572,608   $104,335,234
Cost of goods sold                                      51,191,313      50,747,626      54,257,812     54,325,919
Selling, general and administrative expenses            47,959,449      47,686,174      47,205,695     47,653,164
Other income (expenses)                                    542,028         542,028       1,129,483      1,129,483
                                                      ------------    ------------    ------------   ------------
(Loss) income before cumulative effect of a change
in accounting policy and income taxes                   (2,241,646)     (1,287,311)      4,238,584      3,485,634

Provision for income taxes                                (829,501)       (359,546)      1,643,037      1,366,930
                                                      ------------    ------------    ------------   ------------
Net (loss) income before cumulative
effect of a change in accounting policy                 (1,412,145)       (927,765)      2,595,547      2,118,704

Cumulative effect of a change in accounting policy,
net of taxes of $262,037                                      --              --           413,401        413,401
                                                      ------------    ------------    ------------   ------------
Net (loss) income                                     $ (1,412,145)   $   (927,765)   $  3,008,948   $  2,532,105
                                                      ============    ============    ============   ============
Net (loss) income per share- basic                    $      (0.12)   $      (0.08)   $       0.25   $       0.21
Average shares outstanding                              11,883,305      11,883,305      11,898,097     11,898,097
Net (loss) income per share- diluted                  $      (0.12)   $      (0.08)   $       0.25   $       0.21
Average shares outstanding                              11,883,305      11,883,305      11,900,893     11,900,893

</TABLE>



                                       32
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          May 31, 2004, 2003, and 2002

NOTE 2 -RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS - CONTINUED

The  following  table sets  forth the  effects  of the  restatement  adjustments
discussed above on the Consolidated Balance Sheet at May 31, 2003.


<TABLE>
<CAPTION>
                                                        May 31, 2003
                                                ----------------------------
                                                 As Originally
                                                   Reported     As Restated
                                                ----------------------------
ASSETS
Current assets
<S>                                             <C>             <C>
Cash and cash equivalents                       $  1,278,333    $  1,278,333
Receivables:
           Trade accounts                          7,835,874       7,835,874
           Other                                     299,142         206,480
Allowance for doubtful accounts                     (196,100)       (196,100)
Notes receivable, current                             42,253          42,253
Inventories                                        3,305,195       3,305,195
Prepaid expenses                                   3,645,298       2,881,121
Deferred income taxes                                   --           652,153
                                                ------------    ------------
      Total current assets                        16,209,995      16,005,309
                                                ------------    ------------
Property, plant and equipment                     15,361,573      15,361,573
Notes receivable, long-term                        1,865,747       1,865,747
Cash surrender value of life insurance             2,762,739       2,762,739
Other                                                496,175         496,175
                                                ------------    ------------
TOTAL ASSETS                                    $ 36,696,229    $ 36,491,543
                                                ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Checks outstanding in excess of bank balances   $  1,157,108    $  1,157,108
Accounts payable                                   1,700,934       1,700,934
Current portion of long-term debt                    432,142         432,142
Other accrued expenses                             2,381,975       4,289,448
Deferred income taxes                                304,698            --
Salary continuation plan                              88,595          88,595
                                                ------------    ------------
      Total current liabilities                    6,065,452       7,668,227
                                                ------------    ------------
Note payable - bank, non-current                   1,990,767       1,990,767
Salary continuation plan                           1,870,991       1,870,991
Deferred income taxes                                764,032         884,033
                                                ------------    ------------
TOTAL LIABILITIES                                 10,691,242      12,414,018

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       6,497,954
Retained earnings                                 20,821,015      18,893,553
Treasury shares - at cost (1,945,488 shares)     (10,533,177)    (10,533,177)
                                                ============    ============
TOTAL STOCKHOLDERS' EQUITY                        26,004,987      24,077,525
                                                ============    ============
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 36,696,229    $ 36,491,543
</TABLE>





                                       33
<PAGE>
                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


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).


NOTE 4 - NOTES RECEIVABLE

Notes receivable as of May 31, 2004 and 2003 consist of the following:


<TABLE>
<CAPTION>


                                                                                  2004           2003
                                                                               ----------   -----------
<C>                                                       <C>                  <C>        <C>
8% note, due in 120 monthly installments of $3,640
 through November 1, 2010, collateralized by property .........................$  220,823   $  245,743

8% note, due in 360 monthly installments of $12,474
through November 1, 2030, collateralized by property .......................... 1,644,923    1,662,257
                                                                               ----------   -----------
                                                                                1,865,746    1,908,000
     Less current portion .....................................................    45,760       42,253
                                                                               ----------   -----------
                                                                               $1,819,986   $1,865,747
                                                                               ==========   ===========
        Maturities at May 31,
                                                             2006 ........ $   49,558
                                                             2007 ........     53,672
                                                             2008 ........     58,126
                                                             2009 ........     62,951
                                                             2010 ........     68,176
                                                        Thereafter .......  1,527,503

</TABLE>


                                       34
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 5 - PREPAID EXPENSES

At May 31,  prepaid expenses consist of the following:

<TABLE>
<CAPTION>

                                                                                         Restated
                                                                              2004         2003
                                                                           ----------   ----------
<S>                                                                        <C>          <C>
   Prepaid slotting fees ...............................................   $  376,295   $  333,799
   Other prepaid expenses ..............................................    1,916,648    2,547,322
                                                                           ----------   ----------
                                                                           $2,292,943   $2,881,121
                                                                           ==========   ==========
</TABLE>

NOTE 6 - OTHER ACCRUED EXPENSES

At May 31,  other accrued expenses consist of the following:

<TABLE>
<CAPTION>

                                                                                         Restated
                                                                              2004         2003
                                                                           ----------   ----------
<S>                                                                        <C>          <C>
   Accrued payroll .....................................................   $  450,214   $  448,250
   Self insurance liability ............................................    1,969,332    1,832,591
   Accrued vacation ....................................................    1,463,539    1,461,005
   Other accrued expenses ..............................................      451,713      547,602
                                                                           ----------   ----------
                                                                           $4,334,798   $4,289,448
                                                                           ==========   ==========

</TABLE>

NOTE 7 - LINE OF CREDIT

The  Company  has a line of credit  agreement  with a local bank  which  permits
borrowing  up to $1  million.  The line of credit is  subject  to the  Company's
continued credit  worthiness and compliance with the terms and conditions of the
advance application.




NOTE 8 - LONG-TERM LIABILITIES

   Long-term debt consist of the following:

<TABLE>
<CAPTION>
                                                                              2004         2003
                                                                           ----------   ----------
<S>                                                                        <C>          <C>
     Note payable - bank - payable in equal monthly installments of
     $41,688 including interest at the LIBOR index rate plus 1.75%
     (2.85% at May 31, 2004) through April 3, 2011, secured by equipment   $  999,562   $2,422,909

       Less: current portion ...........................................      477,980      432,142
                                                                           ----------   ----------
                                                                           $  521,582   $1,990,767
                                                                           ==========   ==========
</TABLE>





                                       35
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 8 - LONG-TERM LIABILITIES - CONTINUED


   Maturities at May 31,
                                                  2006 ........... $491,782
                                                  2007 ...........   29,800



Other long-term obligations at May 31, 2004 and 2003, consist of the following:

<TABLE>
<CAPTION>

                                                                       2004           2003
                                                                   ----------     ----------
<S>                                                                <C>            <C>
     Salary continuation plan .................................... $1,901,567     $1,959,586
     Less current portion ........................................    (95,948)       (88,595)
                                                                   ----------     ----------
                                                                   $1,805,619     $1,870,991
                                                                   ==========     ==========
</TABLE>


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  $30,576,  $27,000 and $127,341 for fiscal 2004, 2003 and 2002,
respectively.

NOTE 9 - INCOME TAXES

The provision for income taxes consists of the following:



<TABLE>
<CAPTION>

                                                            Restated        Restated
                                               2004           2003           2002
                                           ---------       ----------    -----------
<S>                                        <C>             <C>           <C>
Federal ................................   $ 101,350       $ (320,635)   $ 1,416,947
State ..................................      12,550          (40,342)       175,379
                                           ---------       ----------    -----------
                                             113,900         (360,977)     1,592,326

Federal ................................     (27,859)           1,272       (200,560)
State ..................................      (2,392)             159        (24,836)
                                           ---------       ----------    -----------
                                             (30,251)           1,431       (225,396)
                                           ---------       ----------    -----------
                                           $  83,649       $ (359,546)   $ 1,366,930
                                           =========       ==========    ===========
</TABLE>



                                       36
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 9 - INCOME TAXES - CONTINUED

The effective tax rate for continuing  operations  differs from the expected tax
using statutory rates. A reconciliation  between the expected tax and actual tax
follows:

<TABLE>
<CAPTION>
                                                                           Restated    Restated
                                                                  2004       2003        2002
                                                                --------  ---------    ----------
<S>                                                             <C>       <C>          <C>
Tax on income at statutory rates ...........................    $ 12,853  $(437,685)   $1,185,116
(Decrease) increase resulting from:
  State income taxes, less Federal income tax effect .......       8,741    (26,894)      149,000
  Tax exempt interest ......................................      (1,388)    (1,356)       (9,303)
  Change in valuation allowance ............................      55,000    120,000            --
  Other - net ..............................................       8,443    (13,611)       42,117
                                                                --------  ---------    ----------
   Total ...................................................    $ 83,649  $(359,546)   $1,366,930
</TABLE>


The tax effects of temporary  differences that result in deferred tax assets and
liabilities are as follows:

<TABLE>
<CAPTION>
                                                                                            Restated
                                                                                2004          2003
                                                                            -----------   ------------
Deferred tax assets
<S>                                                                         <C>           <C>
  Salary continuation plan ...............................................  $   697,305   $   718,580
  Accrued vacation .......................................................      536,680        535,751
  Contribution carryforward ..............................................      229,588        121,491
  Inventory capitalization ...............................................       65,688         58,922
  Allowance for doubtful accounts ........................................       67,840         71,910
  Other accrued expenses .................................................       86,582        107,974
                                                                            -----------   ------------
   Gross defered tax assets before valuation allowance ...................    1,683,683      1,614,628
   Less valuation allowance ..............................................     (175,000)      (120,000)
                                                                            -----------   ------------
Total deferred tax assets ................................................    1,508,683      1,494,628
                                                                            -----------   ------------
Deferred tax liabilities
  Property and equipment .................................................    1,572,325      1,604,103
  Prepaid expenses .......................................................      137,987        122,405
                                                                            -----------   ------------
Total deferred tax liabilities ...........................................    1,710,312      1,726,508
                                                                            -----------   ------------
   Net deferred tax liability ............................................  $  (201,629)  $   (231,880)
                                                                            ===========   ============
</TABLE>

                                       37
<PAGE>
                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 10 - 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, 2004,  2003 and
2002 were $94,683, $231,332, and $177,405, 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, 2004, 2003 and 2002 were $-0-. 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  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:

<TABLE>
<CAPTION>
                                                                                2004          2003
                                                                             -----------   -----------
<S>                                                                          <C>           <C>
Accrued Salary Continuation Plan - beginning of year .............           $ 1,959,586   $ 2,014,391

Benefits Accrued .................................................                30,576        27,000

Benefits Paid ....................................................               (88,595)      (81,805)
                                                                             -----------  ------------
Accrued Salary Continuation Plan - end of year ...................           $ 1,901,567   $ 1,959,586
                                                                             ===========  ============
</TABLE>


NOTE 11 - LONG - TERM INCENTIVE PLANS


The Company has a  long-term  incentive  plan  currently  in effect  under which
future  stock  option  grants  may be  issued.  This  Plan  (the  1996  Plan) is
administered by the Stock Option Committee of the Board of Directors,  which has
sole discretion, subject to the terms of the Plan, 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 Plan,  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 the 2004, 2003, and 2002 are exercisable.

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 option 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.



                                       38
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 11 - LONG-TERM INCENTIVE PLANS - CONTINUED


Five  hundred  thousand  shares of the  Company's  stock have been  reserved for
issuance under this Plan. The following is a summary of transactions:
<TABLE>
<CAPTION>


Shares Under Option                                        2004                     2003                        2002
                                                   --------------------     -----------------------     --------------------
                                                               Weighted                    Weighted                Weighted
                                                               Average                     Average                  Average
                                                               Exercise                    Exercise                Exercise
                                                    Shares       Price       Shares         Price        Shares      Price
                                                   -------     --------     -------       ---------     --------   ---------
<S>                                                <C>         <C>          <C>           <C>             <C>      <C>
Outstanding - beginning of year ...........        369,000     $   3.78     369,000       $    3.78       40,000   $    3.50
   Granted ................................             --          --           --           --         330,000        3.81
   Exercised ..............................             --          --           --           --          (1,000)       3.81
   Forfeited ..............................             --          --           --           --              --          --
   Cancelled ..............................             --          --           --           --              --          --
                                                   -------     --------     -------       ---------     --------   ---------
Outstanding - end of year .................        369,000     $   3.78     369,000       $    3.78      369,000   $    3.78
                                                   =======     ========     =======       =========     ========   =========
</TABLE>



Pro forma  information  regarding net income and earnings per share is presented
as if the Company had accounted  for its employees  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 2004 or 2003.

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 it employee stock options.




                                       39
<PAGE>



                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 12 - NET INCOME PER SHARE


Basic earnings per common share are computed by dividing  earnings  available to
stockholders by the weighted average number of common shares  outstanding during
the period.  Diluted  earnings per share  reflects per share  amounts that would
have resulted if dilutive  potential common stock equivalents had been converted
to common stock,  as prescribed by Statement of Financial  Accounting  Standards
No. 128,  "Earnings  per Share".  Options to purchase  369,000  shares of common
stock at May 31, 2004 and 2003 were not included in the  computation  of diluted
earnings  per share  because the options'  exercise  price were greater than the
average  market price of the common shares and,  therefore,  the effect would be
antidulitive. The following reconciles the information used to compute basic and
diluted earnings per share:

<TABLE>
<CAPTION>
                                                                                       Average Common Stock Shares
                                                                            -----------------------------------------------
                                                                                2004              2003              2002
<S>                                                                          <C>               <C>               <C>
   Basic weighted average shares outstanding ..............................  11,879,891        11,883,305        11,898,097
   Effect of options ......................................................          --                --             2,796
                                                                             ----------        ----------        ----------
   Diluted shares                                                            11,879,891        11,883,305        11,900,893
                                                                             ==========        ==========        ==========
</TABLE>


NOTE 13 - 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

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 value of notes  receivable  is estimated by using a discount  rate that
approximates the current rate for comparable notes. At May 31, 2004 and 2003 the
aggregate fair value was approximately  $2,437,778 and $2,507,357  compared to a
carrying amount of $1,865,746 and $1,908,000, respectively.


                                       40
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 13 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS -CONTINUED

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 14 - COMMITMENTS AND CONTINGENCIES

Rental expense was $493,028 in 2004,  $498,031 in 2003, and $547,742 in 2002. At
May 31, 2004,  the Company was  obligated  under  certain  operating  leases for
buildings, office space and equipment.

In May of 2004,  the Company  terminated  a lease for  equipment  from a company
which is principally  owned by a major shareholder of Golden  Enterprises,  Inc.
The lease was terminated through a purchase of the equipment for $160,000.

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 $1,758,987 outstanding at May
31, 2004 to support the Company's commercial self-insurance program. The Company
pays a commitment fee of 0.375% to maintain the letters of credit.

The Company entered into a five-year term product purchase commitment during the
year ending May 31, 2001 with a supplier.  Under the terms of the  agreement the
minimum purchase  quantity and the unit purchase price were fixed resulting in a
minimum first year commitment of approximately $2,171,000. After the first year,
the  minimum  purchase  quantity  was  fixed  and the  purchase  unit  price was
negotiable,  based on current  market.  Subsequently,  in  September  2002,  the
product  purchase  agreement  was  amended  to fix the  purchase  unit price and
establish  specific  annual  quantities.  As  of  May  31,  2004  the  Company's
outstanding purchase commitments were as follows:


                 Years ending
                 May 31,                        Amount
                 -------------                ---------
                 2005 ...................... $1,491,000
                 2006 ......................    605,000


The Company has entered into various other short term purchase  commitments with
suppliers for raw materials in the normal course of business.


                                       41
<PAGE>





                    GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          May 31, 2004, 2003 and 2002


NOTE 15 -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 deposit  relationships  with high credit quality financial
institutions.  The Company's trade  receivables  result primarily from its snack
food operations and reflect a broad customer base, primarily large grocery store
chains located in the Southeastern United States. The Company routinely assesses
the financial  strength of its customers.  As a consequence,  concentrations  of
credit risk are limited.

The Company's  notes  receivable  require  collateral  and buyer  investment and
management believes they are well secured.


NOTE 16 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited  quarterly  results of operations of
the years ended May 31, 2004 and 2003.

<TABLE>
<CAPTION>
                                                       RESTATED         RESTATED         RESTATED
                                                                                         Per Share
                                                                       Net (Loss)        Net (Loss)
                                                       Net Sales         Income          Income
                                                      -----------      ----------         --------
Quarter
--------
2004
-----
<S>                                                   <C>               <C>               <C>
    First ......................................      $24,580,778       $ 431,692         $   0.04
    Second .....................................       23,296,981        (196,021)           (0.02)
    Third ......................................       24,102,358        (606,028)           (0.05)
    Fourth .....................................       25,603,376         324,511             0.03
                                                      -----------       ---------         --------
         For the year ..........................      $97,583,493       $ (45,846)        $     --
                                                      ===========       =========         ========
2003
-----
    First ......................................      $24,840,321       $ 222,230         $   0.01
    Second .....................................       23,491,688        (385,437)           (0.03)
    Third ......................................       24,021,750        (483,635)           (0.04)
    Fourth .....................................       24,250,702        (280,923)           (0.02)
                                                      -----------       ---------         --------
         For the year ..........................      $96,604,461       $(927,765)        $  (0.08)
                                                      ===========       =========         ========
</TABLE>

                                       42
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                           May 31, 2004, 2003 and 2002


NOTE 17 - SUPPLEMENTARY STATEMENT OF INCOME INFORMATION

The  following  tabulation  gives  certain  supplementary  statement  of  income
information for continuing operations for the years ended May 31, 2004, 2003 and
2002:


<TABLE>
<CAPTION>
                                                      2004           2003          2002
                                                    ----------    ----------   ----------
<S>                                                 <C>           <C>          <C>
Maintenance and repairs ...............             $5,914,221    $5,625,851   $5,290,498
Depreciation ..........................              2,346,880     2,490,329    2,593,621
Payroll taxes .........................              2,241,443     2,337,330    2,473,871
Advertising costs .....................              4,452,926     5,031,409    4,371,719
</TABLE>

Amounts  for other  taxes,  rents and  research  and  development  costs are not
presented because each of such amounts is less than 1% of total revenues.


NOTE 18 - SUBSEQUENT EVENT

The Company  signed a line of credit note with a  financial  institution  with a
limit of  $2,262,500  on July 6,  2004.  The  interest  rate  will be a  monthly
variable  rate based on the LIBOR rate plus  1.75%.  The  purpose of the line of
credit is to pay off the current  line of credit and to purchase  new  vehicles.
The line of credit note expires on November 30, 2004,  at which time the Company
plans to convert the line of credit into a note with a fixed monthly payment and
maturity date which will be collateralized by the above equipment purchased.



                                       43
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

                       SUPPLEMENTAL FINANCIAL INFORMATION

                    Selected quarterly financial data for the
              fiscal years ended May 31, 2004 and 2003 (unaudited)

              (Dollar amounts in thousands, except per share data)


For a  description  of the  restatement  items,  which also affect the unaudited
quarterly  date,  see  Note  2,  Restatement  of  Previously   Issued  Financial
Statements, to these restated consolidated financial statements.

<TABLE>
<CAPTION>

                                                       Restated
                                        ----------------------------------------
                                           First         Second         Third          Fourth
2004                                      Quarter        Quarter       Quarter        Quarter
                                        -----------   -----------   ------------     ----------
<S>                                     <C>           <C>           <C>              <C>
Total revenues                          $    24,581   $    23,297   $     24,102     $   25,603
                                        ===========   ===========   ============     ==========
Income before income taxes              $       685   $      (324)  $       (976)    $      652
                                        ===========   ===========   ============     ==========
Net income                              $       432   $      (196)  $       (606)    $      325
                                        ===========   ===========   ============     ==========
Net income per share                    $       .04   $     (0.02)  $      (0.05)    $      .03
                                        ===========   ===========   ============     ==========
Cash dividends per share                $     .0313   $     .0313   $      .0313     $    .0313
                                        ===========   ===========   ============     ==========

<CAPTION>
                                                  As Originally Reported
                                        --------------------------------------
                                           First         Second       Third
2004                                      Quarter        Quarter     Quarter

<S>                                     <C>            <C>          <C>
Total revenues                          $    24,581    $   23,297   $  24,102
                                        ===========    ==========   =========
Income before income taxes              $       413    $     (518)  $    (887)
                                        ===========    ==========   =========
Net income                              $       259    $     (319)  $    (550)
                                        ===========    ==========   =========
Net income per share                    $       .02    $    (0.03)  $   (0.05)
                                        ===========    ==========   =========
Cash dividends per share                $     .0313    $    .0313   $   .0313
                                        ===========    ==========   =========
</TABLE>



                                       44
<PAGE>




Effect of restatement  adjustments on previously issued 2004 Quarterly Financial
Statements

<TABLE>
<CAPTION>

                                                                       Quarter Ended
                                                           -------------------------------------
                                                           August 31     Nov 30           Feb 29
2004                                                         2003         2003             2004
                                                           ---------    ---------     ----------
<S>                                                        <C>          <C>           <C>
Net Income (loss) as originally reported                   $     259    $    (319)    $    (550)
  Adjustments (pre-tax):
  Accrued vacation liability                                    --             (1)           (1)
                                                           ---------    ---------     ----------
  Self insurance liability                                       273          195           (88)
Total adjustments (pre-tax)                                      273          194           (89)
Total taxes                                                      100           71           (33)
                                                           ---------    ---------     ----------
Total net adjustments                                            173          123           (56)
                                                           ---------    ---------     ----------
Net income as restated                                     $     432    $    (196)    $    (606)
                                                           =========    =========     ==========
Per share of Common Stock:
Net income (loss)-Basic as originally reported             $    0.02    $   (0.03)    $   (0.05)
Effect of net adjustments                                       0.02         0.01            --
                                                           ---------    ---------     ----------
Net income-Basic as restated                               $    0.04    $   (0.02)    $   (0.05)
                                                           =========    =========     =========
Net income-Dilluted as originally reported                 $    0.02    $   (0.03)    $   (0.05)
Efect of net adjustments                                        0.02         0.01            --
                                                           ---------    ---------     ----------
Net income-Dilluted as restated                            $    0.04    $   (0.02)    $   (0.05)
                                                           =========    =========     =========
</TABLE>



                                       45


<PAGE>




<TABLE>
<CAPTION>


2003                                                        Restated
                                        --------------------------------------------------
                                           First         Second       Third        Fourth
                                          Quarter        Quarter     Quarter       Quarter
                                        -----------   -----------  ----------   ----------
<S>                                     <C>            <C>         <C>          <C>
Total revenues                          $    24,840    $23,492     $ 24,022     $   24,251
                                        ===========   ========     ========     ==========
Income before income taxes              $       346    $  (624)    $   (779)    $     (230
                                        ===========   ========     ========     ==========
Net income                              $       222    $  (385)    $   (484)    $     (281
                                        ===========   ========     ========     ==========
Net income per share                    $       .02    $ (0.03)    $  (0.04)    $    (0.02
                                        ===========   ========     ========     ==========
Cash dividends per share                $    0.0625    $ .0625     $  .0313     $    .0313
                                        ===========   ========     ========     ==========


2003                                                  As Originally Reported
                                        --------------------------------------------------
                                           First         Second       Third         Fourth
                                          Quarter        Quarter     Quarter       Quarter

Total revenues                          $    24,803    $23,425     $ 23,955     $   24,184
                                        ===========   ========     ========     ==========
Income before income taxes              $       (58)   $  (618)    $  (701)     $     (865)
                                        ===========   ========     ========     ==========
Net income                              $       (34)   $  (382)    $  (434)     $     (562)
                                        ===========   ========     ========     ==========
Net income per share                    $      0.00    $ (0.03)    $ (0.04)     $    (0.05)
                                        ===========   ========     ========     ==========
Cash dividends per share                $    0.0625    $ .0625     $ .0313      $    .0313
                                        ===========   ========     ========     ==========
</TABLE>




                                       46
<PAGE>


Effect of restatement  adjustments on previously issued 2004 Quarterly Financial
Statements


<TABLE>
<CAPTION>
2003                                                                              Quarter Ended
                                                            --------------------------------------------------------
                                                            August 31          Nov 30        Feb 29         31-May
                                                               2002             2002          2003           2003
                                                            ---------        ---------       ------        ---------
<S>                                                           <C>             <C>            <C>             <C>
Net (loss) income as originally reported                      $   (34)        $   (382)      $ (434)         $ (562)
  Adjustments (pre-tax):
  Accrued vacation liability                                       11               11           11              15
  Self insurance liability                                        356              (84)        (156)            553
  Other                                                            37               68           67              67
                                                            ---------         --------       ------          ------
Total adjustments (pre-tax)                                       404               (5)         (78)            635
Total taxes                                                       148               (2)         (28)            354
                                                            ---------         --------       ------          ------
Total net adjustments                                             256               (3)         (50)            281
                                                            ---------         --------       ------          ------
Net income as restated                                        $   222         $   (385)      $ (484)         $ (281)
                                                            =========         ========       ======          ======
Per share of Common Stock:
Net income (loss)-Basic as originally reported                $    --         $  (0.03)      $(0.04)         $(0.05)
Effect of net adjustments                                        0.02               --           --            0.03
                                                            ---------         --------       ------          ------
Net income-Basic as restated                                  $  0.02         $  (0.03)      $(0.04)         $(0.02)
                                                            =========         ========       ======          ======

Net income-Dilluted as originally reported                    $    --         $  (0.03)      $(0.04)         $(0.05)
Efect of net adjustments                                         0.02               --           --            0.03
                                                            ---------         --------       ------          ------
Net income-Dilluted as restated                               $  0.02         $  (0.03)      $(0.04)         $(0.02)
                                                            =========         ========       ======          ======
</TABLE>



                                       47
<PAGE>



ITEM 9. -  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

ITEM 9 A. - CONTROLS AND PROCEDURES

     The Company  performed an evaluation,  under the  supervision  and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer and Chief  Financial  Officer,  of the  effectiveness  of the
design and operation of the Company's  disclosure  controls and procedures as of
the end of the fiscal year ended May 31, 2004. Based upon that  evaluation,  the
Chief Executive Officer and Chief Financial Officer concluded that as of the end
of the fiscal year ended May 31, 2004,  the  Company's  disclosure  controls and
procedures were effective to ensure that information required to be disclosed in
reports that the Company files or submits under the  Securities and Exchange Act
of 1934 is recorded,  processed,  summarized  and reported  within the specified
time periods.

         During the  performance  of the audit for the fiscal year ended May 31,
2004, the Company's independent auditors, Dudley, Hopton-Jones,  Sims & Freeman,
PLLP (the  "Auditor"),  identified  and  communicated  to the  Company  material
weaknesses relating to the Company's  accounting for its vacation pay (which was
not in conformity with generally accepted  accounting  principles  ("GAAP")) and
self insured  obligations.  The Company was not accruing for earned vacation pay
and its liabilities  were  understated for certain  incurred as well as incurred
but not reported  self-insured  casualty claims and health costs. Based upon the
forgoing,  the Company has restated its audited financial  statements for fiscal
year 2003 and for the first  three  quarters  of  fiscal  year 2004 to  properly
account for accruals for its vacation pay and  self-insured  health and casualty
obligations.  The Company believed, during the years being restated, that it was
correctly  following proper accounting  practices.  For a full discussion of the
restatements,  see "Item 7.  Management's  Discussion  and Analysis of Financial
Condition and Results of Operations."

         The Company has accepted the  recommendations  of its Auditor to reduce
the  recurrence  of  material  weaknesses  and  is  implementing   policies  and
procedures to strengthen the Company's internal controls, including, among other
things,  the  following:  (1) developing  written  policies and procedures to be
followed  with  respect  to  accounting   for  vacation  pay  and   self-insured
obligations; (2) formally designating management level personnel responsible for
accounting for vacation pay and self-insured obligations; (3) expanding internal
audit  activities  to  include  a  quarterly  examination  of  vacation  pay and
self-insured  obligations;  (4) implementing a fully developed actuarially based
method of measuring  liabilities  related to self-insured  obligations;  and (5)
implementing  quarterly  communications among management,  internal auditor, and
the Audit Committee prior to filing Forms 10-Q.

      Other  than as  described  above,  there  has not been any  change  in the
Company's  internal  controls  over  financial  reporting  that  has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

ITEM 9 B. - OTHER INFORMATION

Not Applicable.
                                    PART III

ITEM 10. - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     With the exception of  information  set forth under the caption  "Executive
Officers of the Registrant and Its  Subsidiary"  which appears in Part I of this
Form 10-K on Page 5, the  information  required by this item is  incorporated by
reference  to  the  sections  entitled  "Election  of  Directors,"   "Additional
Information  Concerning the Board of  Directors,"  "Executive  Compensation  and
Other  Information"  and "Code of Conduct  and  Ethics" of the  Company's  Proxy
Statement for the 2004 Annual Meeting of  Stockholders  to be held September 23,
2004.


                                       48
<PAGE>

ITEM 11. - EXECUTIVE COMPENSATION

     The  information  required by this item is incorporated by reference to the
sections  entitled  "Executive   Compensation  and  Other  Information"  of  the
Company's Proxy Statement for the 2004 Annual Meeting of Stockholders to be held
September  23,  2004.  See  Item 5 of  this  Annual  Report  on  Form  10-K  for
information concerning the Company's equity compensation plans.

ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The  information  required by this item is incorporated by reference to the
sections  entitled   "Security   Ownership  of  Certain  Beneficial  Owners  and
Management" and "Section 16(a) Beneficial  Ownership  Reporting  Compliance," of
the Company's  Proxy Statement for the 2004 Annual Meeting of Stockholders to be
held September 23, 2004.


ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The  information  required by this item is  incorporated by reference to the
section entitled "Certain Transactions" of the Company's Proxy Statement for the
2004 Annual Meeting of Stockholders to be held September 23, 2004.

ITEM 14. - PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The  information  required by this item is incorporated by reference to the
section entitled "Independent  Accountants" of the Company's Proxy Statement for
the 2004 Annual Meeting of Stockholders to be held September 23, 2004.


     Prior to  September  28, 2004,  the Company  will file a  definitive  Proxy
Statement with the Securities and Exchange Commission pursuant to Regulation 14A
which involves the election of directors.



                                       49
<PAGE>

                                     PART IV
              ITEM 15.- EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (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, 2004 and 2003

     Consolidated  Statements of Operations- Years ended May 31, 2004, 2003, and
2002

     Consolidated Statements of Changes in Stockholders' Equity- Years ended May
31, 2004, 2003 and 2002

     Consolidated  Statements of Cash Flows- Years ended May 31, 2004,  2003 and
2002

     Notes to Consolidated Financial Statements

     The following  consolidated  financial  statements  schedule is included in
Item 16 (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.

Section 3. Exhibits.

(3) Articles of Incorporation and By-Laws of Golden Enterprises, Inc.

     3.1  Certificate of Incorporation of Golden Enterprises, Inc. (originally
          known as "Golden Flake, Inc.") dated December 11, 1967.

     3.2  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated December 22, 1976.

     3.3  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated October 2, 1978 (incorporated by reference to
          Exhibit 3 to Golden Enterprises, Inc. May 31, 1979 Form 10-K filed
          with the Commission).

     3.4  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated October 4, 1979 (incorporated by reference to
          Exhibit 3 to Golden Enterprises, Inc. May 31, 1980 Form 10-K filed
          with the Commission).

     3.5  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated September 24, 1982 (incorporated by reference
          to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 1983 Form 10-K
          filed with the Commission).

     3.6  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated September 22, 1983 (incorporated by reference
          to Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the
          quarter ended November 30, 1983 filed with the Commission).

     3.7  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated October 3, 1985 (incorporated by reference to
          Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the
          quarter ended November 30, 1985 filed with the Commission).

     3.8  Certificate of Amendment of Certificate of Incorporation of Golden
          Enterprises, Inc. dated September 23, 1987 (incorporated by reference
          to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 1988 Form 10-K
          filed with the Commission).

     3.9  By-Laws of Golden Enterprises, Inc. (incorporated by reference to
          Exhibit 3.4 to Golden Enterprises, Inc. May 31, 1988 Form 10-K filed
          with the Commission).


                                       50
<PAGE>


(10) Material Contracts.

     10.1  A Form of Indemnity Agreement executed by and between Golden
           Enterprises, Inc. and Each of Its Directors (incorporated by
           reference as Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q
           Report for the quarter ended November 30, 1987 filed with the
           Commission).

     10.2  Amended and Restated Salary Continuation Plans for John S. Stein
           (incorporated by reference to Exhibit 19.1 to Golden Enterprises,
           Inc. May 31, 1990 Form 10-K filed with the Commission).

     10.3  Indemnity Agreement executed by and between the Company and J.
           Wallace Nall, Jr. (incorporated by reference as Exhibit 19.4 to
           Golden Enterprises, Inc. May 31, 1991 Form 10-K filed with the
           Commission).

     10.4  Salary Continuation Plans - Retirement, Disability and Death Benefits
           for F. Wayne Pate (incorporated by reference to Exhibit 19.1 to
           Golden Enterprises, Inc. May 31, 1992 Form 10-K filed with the
           Commission).

     10.5  Indemnity Agreement executed by and between the Registrant and F.
           Wayne Pate (incorporated by reference as Exhibit 19.3 to Golden
           Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission).

     10.6  Golden Enterprises, Inc. 1996 Long-Term Incentive Plan (incorporated
           by reference as Exhibit 10.1 to Golden Enterprises, Inc. May 31, 1997
           Form 10-K filed with the Commission).

     10.7  Lease of Aircraft executed by and between Golden Flake Snack Foods,
           Inc., a wholly-owned subsidiary of Golden Enterprises, Inc., and
           Sloan Y. Bashinsky, Sr. (incorporated by reference as Exhibit 10.1 to
           Golden Enterprises, Inc. May 31, 1999 Form 10-K filed with the
           Commission).

     10.8  Equipment Purchase and Sale Agreement dated October 2000 whereby
           Golden Flake Snack Foods, Inc., a wholly-owned subsidiary of Golden
           Enterprises, Inc., sold the Nashville, Tennessee Plant Equipment
           (incorporated by reference as Exhibit 10.1 to Golden Enterprises,
           Inc. May 31, 2001 Form 10-K filed with the Commission).

     10.9  Real Property Contract of Sale dated October 2000 whereby Golden
           Flake Snack Foods, Inc. sold the Nashville, Tennessee Plant Real
           Property (incorporated by reference as Exhibit 10.2 to Golden
           Enterprises, Inc. May 31, 2001 Form 10-K filed with the Commission).

     10.10 Amendment to Salary Continuation Plans, Retirement and Disability for
           F. Wayne Pate dated April 9, 2002 (incorporated by reference to
           Exhibit 10.2 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed
           with the Commission).

     10.11 Amendment to Salary Continuation Plans, Retirement and Disability for
           John S. Stein dated April 9, 2002 (incorporated by reference to
           Exhibit 10.3 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed
           with the Commission).

                                       50-A
<PAGE>


     10.12 Amendment to Salary Continuation Plan, Death Benefits for John S.
           Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.4
           to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with the
           Commission).

     10.13 Retirement and Consulting Agreement for John S. Stein dated April 9,
           2002 (incorporated by reference to Exhibit 10.5 to Golden
           Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission).

     10.14 Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002
           (incorporated by reference to Exhibit 10.6 to Golden Enterprises,
           Inc. May 31, 2002 Form 10-K filed with the Commission).

     10.15 Trust Under Salary Continuation Plan for Mark W. McCutcheon dated May
           15, 2002 (incorporated by reference to Exhibit 10.7 to Golden
           Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission).


(14) Code of Ethics

     14.1 Golden Enterprises, Inc.'s Code of Conduct and Ethics adopted by the
          Board of Directors on April 8, 2004.


(21) Subsidiaries of the Registrant


(31) Certifications

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002.

(b) Exhibits. See (a) 3. above.

(c) Financial Statement Schedules. The response to this portion of Item 15, is
    submitted under Item 15(a) 1. and 2. above.

                                      50-B
<PAGE>


                                   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 /s/   PATTY TOWNSEND                                        AUGUST 26, 2004
-----------------------------------------------------------    ---------------
         PATTY TOWNSEND                                              DATE
         VICE PRESIDENT, SECRETARY AND
         PRINCIPAL FINANCIAL OFFICER


     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:

<TABLE>
<CAPTION>

         SIGNATURE                                         TITLE                          DATE
------------------------------------           --------------------------------   -------------------
<S>                                            <C>                                <C>
/S/ JOHN S. STEIN                              Chairman of Board                  August 26, 2004
------------------------------------
    JOHN  S. STEIN


/S/ MARK W. MCCUTCHEON                         Chief Executive                    August 26, 2004
------------------------------------           Officer, President and Director
    MARK W. MCCUTCHEON


/S/ PATTY TOWNSEND                             Vice President, Secretary and      August 26, 2004
------------------------------------           Principal Financial Officer
    PATTY TOWNSEND


/S/ F. WAYNE PATE                              Director                           August 26, 2004
------------------------------------
    F. WAYNE PATE


/S/ EDWARD R. PASCOE                           Director                           August 26, 2004
------------------------------------
    EDWARD R. PASCOE


/S/ JOHN P. MCKLEROY, JR.                      Director                           August 26, 2004
------------------------------------
    JOHN P. MCKLEROY, JR.


/S/ JAMES I. ROTENSTREICH                      Director                           August 26, 2004
------------------------------------
    JAMES I. ROTENSTREICH


                                               Director                           August 26, 2004
------------------------------------
   JOHN S.P. SAMFORD


                                               Director                           August 26, 2004
------------------------------------
    J. WALLACE NALL, JR.


/S/ JOANN F. BASHINSKY                         Director                           August 26, 2004
------------------------------------
    JOANN F. BASHINSKY
</TABLE>

                                       51
<PAGE>


                                   SCHEDULE II


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

                        VALUATION AND QUALIFYING ACCOUNTS

                     YEARS ENDED MAY 31, 2002, 2003 AND 2004


<TABLE>
<CAPTION>

                                                                     Additions
                                                 Balance at         Charged to                             Balance
                                                  Beginning          Costs and                              at End
Allowance for Doubtful Accounts                    of Year           Expenses           Deductions         of Year
--------------------------------------------    --------------     --------------     ---------------    -------------
<S>                                               <C>               <C>                  <C>               <C>
Year ended May 31, 2002                           $346,100          $(113,175)           $36,825           $196,100
                                                ==============     ==============     ===============    =============
Year ended May 31, 2003                           $196,100           $224,722            $224,722          $196,100
                                                ==============     ==============     ===============    =============
Year ended May 31, 2004                           $196,100           $131,771            $142,871          $185,000
                                                ==============     ==============     ===============    =============
</TABLE>



                                       52
<PAGE>


<TABLE>
<CAPTION>


                                   INDEX TO EXHIBITS
                                                                                           PAGE
<S>     <C>                                                                                <C>
3.1     Certificate of Incorporation  of Golden  Enterprises,  Inc.  (originally
        known as "Golden Flake, Inc.") dated December 11, 1967.                             56

3.2     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises, Inc.  dated December 22, 1976.                                         67

3.3     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises,  Inc. dated October 2, 1978  (incorporated  by reference to
        Exhibit 3 to Golden Enterprises,  Inc. May 31, 1979 Form 10-K filed with
        the Commission).

3.4     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises,  Inc. dated October 4, 1979  (incorporated  by reference to
        Exhibit 3 to Golden Enterprises,  Inc. May 31, 1980 Form 10-K filed with
        the Commission).

3.5     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises, Inc. dated September 24, 1982 (incorporated by reference to
        Exhibit  3.1 to Golden  Enterprises,  Inc.  May 31, 1983 Form 10-K filed
        with the Commission).

3.6     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises, Inc. dated September 22, 1983 (incorporated by reference to
        Exhibit  19.1 to  Golden  Enterprises,  Inc.  Form 10-Q  Report  for the
        quarter ended November 30, 1983 filed with the Commission).

3.7     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises,  Inc. dated October 3, 1985  (incorporated  by reference to
        Exhibit  19.1 to  Golden  Enterprises,  Inc.  Form 10-Q  Report  for the
        quarter ended November 30, 1985 filed with the Commission).

3.8     Certificate  of  Amendment of  Certificate  of  Incorporation  of Golden
        Enterprises, Inc. dated September 23, 1987 (incorporated by reference to
        Exhibit  3.1 to Golden  Enterprises,  Inc.  May 31, 1988 Form 10-K filed
        with the Commission).

3.9     By-Laws  of Golden  Enterprises,  Inc.  (incorporated  by  reference  to
        Exhibit  3.4 to Golden  Enterprises,  Inc.  May 31, 1988 Form 10-K filed
        with the Commission).

10.1    A  Form  of  Indemnity   Agreement   executed  by  and  between   Golden
        Enterprises,  Inc. and Each of Its Directors  (incorporated by reference
        as Exhibit  19.1 to Golden  Enterprises,  Inc.  Form 10-Q Report for the
        quarter ended November 30, 1987 filed with the Commission).

10.2    Amended  and  Restated  Salary  Continuation  Plans  for  John S.  Stein
        (incorporated by reference to Exhibit 19.1 to Golden  Enterprises,  Inc.
        May 31, 1990 Form 10-K filed with the Commission).

10.3    Indemnity  Agreement  executed by and between the Company and J. Wallace
        Nall,  Jr.   (incorporated  by  reference  as  Exhibit  19.4  to  Golden
        Enterprises, Inc. May 31, 1991 Form 10-K filed with the Commission).

10.4    Salary  Continuation  Plans - Retirement,  Disability and Death Benefits
        for F. Wayne Pate  (incorporated  by reference to Exhibit 19.1 to Golden
        Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission).
</TABLE>

                                       53
<PAGE>

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>        <C>                                                                            <C>
10.5    Indemnity  Agreement executed by and between the Registrant and F. Wayne
        Pate  (incorporated by reference as Exhibit 19.3 to Golden  Enterprises,
        Inc. May 31, 1992 Form 10-K filed with the Commission).

10.6    Golden Enterprises,  Inc. 1996 Long-Term Incentive Plan (incorporated by
        reference as Exhibit 10.1 to Golden Enterprises,  Inc. May 31, 1997 Form
        10-K filed with the Commission).

10.7    Lease of  Aircraft  executed by and between  Golden  Flake Snack  Foods,
        Inc., a wholly-owned  subsidiary of Golden Enterprises,  Inc., and Sloan
        Y. Bashinsky,  Sr.  (incorporated by reference as Exhibit 10.1 to Golden
        Enterprises, Inc. May 31, 1999 Form 10-K filed with the Commission).

10.8    Equipment  Purchase and Sale Agreement dated October 2000 whereby Golden
        Flake  Snack  Foods,   Inc.,  a   wholly-owned   subsidiary   of  Golden
        Enterprises,   Inc.,  sold  the  Nashville,  Tennessee  Plant  Equipment
        (incorporated by reference as Exhibit 10.1 to Golden  Enterprises,  Inc.
        May 31, 2001 Form 10-K filed with the Commission).

10.9    Real Property  Contract of Sale dated October 2000 whereby  Golden Flake
        Snack Foods,  Inc.  sold the  Nashville,  Tennessee  Plant Real Property
        (incorporated by reference as Exhibit 10.2 to Golden  Enterprises,  Inc.
        May 31, 2001 Form 10-K filed with the Commission).

10.10   Amendment to Salary Continuation Plans, Retirement and Disability for F.
        Wayne Pate dated April 9, 2002  (incorporated  by  reference  to Exhibit
        10.2 to Golden  Enterprises,  Inc. May 31, 2002 Form 10-K filed with the
        Commission).

10.11   Amendment to Salary  Continuation  Plans,  Retirement and Disability for
        John S. Stein dated April 9, 2002  (incorporated by reference to Exhibit
        10.3 to Golden  Enterprises,  Inc. May 31, 2002 Form 10-K filed with the
        Commission).

10.12   Amendment to Salary  Continuation Plan, Death Benefits for John S. Stein
        dated April 9, 2002 (incorporated by reference to Exhibit 10.4 to Golden
        Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission).

10.13   Retirement  and  Consulting  Agreement  for John S. Stein dated April 9,
        2002  (incorporated by reference to Exhibit 10.5 to Golden  Enterprises,
        Inc. May 31, 2002 Form 10-K filed with the Commission).

10.14   Salary  Continuation  Plan for Mark W.  McCutcheon  dated  May 15,  2002
        (incorporated by reference to Exhibit 10.6 to Golden  Enterprises,  Inc.
        May 31, 2002 Form 10-K filed with the Commission).

10.15   Trust Under Salary  Continuation  Plan for Mark W. McCutcheon  dated May
        15,  2002   (incorporated   by  reference  to  Exhibit  10.7  to  Golden
        Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission).

14.1    Golden  Enterprises,  Inc.'s Code of Conduct  and Ethics  adopted by the
        Board of Directors on April 8, 2004.                                                70

21      Subsidiaries of the Registrant                                                      74

</TABLE>

                                       54
<PAGE>
<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>     <C>                                                                                <C>
31.1    Certification of Chief Executive  Officer pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002.                                                         76

31.2    Certification of Chief Financial  Officer pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002.                                                         77

32.1    Certification of Chief Executive  Officer pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002.                                                         78

32.2    Certification of Chief Financial  Officer pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002.                                                         79
</TABLE>





                                       55