Comparison of the Three Months Ended July 31, 2005 and July 31, 2004
Same Store
Same store financial data excludes the Company’s newly opened location, Picacho Peak Plaza as well as the existing Picacho Peak but does not include restaurant sales as the new facility does not have a restaurant operation. For the three months ended July 31, 2005, the sales of the new facility impacted the existing facility, with no effect on overall operating income. A discussion of the new and existing Picacho Peak facilities follow the same store discussion.
Gross sales at the Company’s travel centers increased by 12.8% to $7.209 million for the three months ended July 31, 2005, from $6.390 million for the three months ended July 31, 2004. Merchandise sales increased 8.7% to $3.114 million for the three months ended July 31, 2005, from $2.865 million for the three months ended July 31, 2004. The increase is due to more efficient store management as well as continued supervisory support dedicated to the stores. Gasoline sales increased 23.0% to $2.832 million for the three months ended July 31, 2005, from $2.304 million for the same period in 2004. The increase is due to market price increases. Restaurant sales decreased 3.1% to $718,000 for the three months ended July 31, 2005, from $741,000 for the three months ended July 31, 2004. The decrease is due to personnel issues at one of the restaurant locations as well as cost increases not reflected in retail prices. Wholesale gasoline sales to independent retailers increased 13.5% to $545,000 for the three months ended July 31, 2005, from $480,000 for the three months ended July 31, 2004. The increase is due to market price increases partially offset by decreases in volume.
Total cost of goods sold increased 15.2% to $4.500 million for the three months ended July 31, 2005, from $3.907 million for the three months ended July 31, 2004. Merchandise cost of goods increased 3.0% to $1.190 million for the three months ended July 31, 2005, from $1.155 million for the three months ended July 31, 2004. This increase is directly related to the increase in merchandise sales offset by improved volume purchase pricing as well as maintaining mark-ups. Gasoline cost of goods increased 23.3% to $2.550 million for the three months ended July 31, 2005, from $2.068 million for the three months ended July 31, 2004. The increase corresponds to market price increases. Restaurant cost of goods increased 4.6% to $227,000 for the three months ended July 31, 2005, from $217,000 for the three months ended July 31, 2004. The increase is primarily due to cost increases. Wholesale gasoline cost of goods increased 14.1% to $533,000 for the three months ended July 31, 2005, from $467,000 for the three months ended July 31, 2004. The increase is due to market price increases partially offset by decreases in volume. Cost of goods sold as a percentage of gross revenues increased to 62.4% for the three months ended July 31, 2005, as compared to 61.1% for the three months ended July 31, 2004.
Gross profit increased 9.0% to $2.570 million for the three months ended July 31, 2005, from $2.357 million for the three months ended July 31, 2004. The increase is primarily attributable to increased sales.
General and administrative expenses consist of salaries, bonuses and commissions for travel center personnel, property costs and repairs and maintenance. General and administrative expenses increased 10.7% to $1.846 million for the three months ended July 31, 2005, from $1.668 million for the three months ended July 31, 2004. The increase is primarily due bonuses related to sales incentive programs and executive management as well as general repair and maintenance.
Depreciation and amortization expense decreased 0.6% to $164,000 for the three months ended July 31, 2005, from $165,000 for the three months ended July 31, 2004.
The above factors contributed to an increase in operating income of 6.9% to $560,000 for the three months ended July 31, 2005, compared to operating income of $524,000 for the three months ended July 31, 2004.
BOWLIN TRAVEL CENTERS, INC.
New and existing Picacho Peak facilities
On January 18, 2005, the Company opened a new state-of-the-art travel center in Picacho, Arizona. For the three months ended July 31, 2005, the sales of the new facility impacted the existing facility, with no effect on overall operating income. The following discussion does not include restaurant sales, as the new travel center does not have a restaurant operation.
Gross sales at the new travel center were $708,000 for the three months ended July 31, 2005. Merchandise sales were $272,000 and gasoline sales were $435,000.
Gross sales at the existing travel center decreased by 38.8% to $457,000 for the three months ended July 31, 2005, from $747,000 for the three months ended July 31, 2004. Merchandise sales decreased 30.0% to $177,000 for the three months ended July 31, 2005, from $253,000 for the three months ended July 31, 2004. The decrease is due to the impact of the new facility. Gasoline sales decreased 43.3% to $280,000 for the three months ended July 31, 2005, from $494,000 for the same period in 2004. The decrease is due to the impact of the new facility.
Cost of goods sold for the new travel center were $506,000 for the three months ended July 31, 2005. Merchandise cost of goods were $125,000 and gasoline cost of goods were $381,000. Cost of goods as a percentage of gross revenues was 71.6% for the three months ended July 31, 2005.
Cost of goods for the existing travel center decreased 41.0% to $322,000 for the three months ended July 31, 2005, from $546,000 for the three months ended July 31, 2004. Merchandise cost of goods decreased 29.0% to $76,000 for the three months ended July 31, 2005, from $107,000 for the three months ended July 31, 2004. The decrease directly corresponds to the decrease in sales, which is due to the impact of the new facility. Gasoline cost of goods decreased 43.7% to $247,000 for the three months ended July 31, 2005, from $439,000 for the same period in 2004. The decrease directly corresponds to the decrease in sales, which is due to the impact of the new facility. Cost of goods sold as a percentage of gross revenues decreased for the three months ended July 31, 2005 to 70.7% compared to 73.1% for the three months ended July 31, 2004.
Gross profit at the new travel center was $189,000 for the three months ended July 31, 2005.
Gross profit for the existing travel center decreased 32.4% to $125,000 for the three months ended July 31, 2005, from $185,000 for the three months ended July 31, 2004. The decrease is attributable to the impact of the new facility.
General and administrative expenses consist of salaries, bonuses and commissions for travel center personnel, property costs and repairs and maintenance. General and administrative expenses at the new store were $142,000. General and administrative expenses at the existing store decreased 23.9% to $118,000 for the three months ended July 31, 2005, from $155,000 for the three months ended July 31, 2004 primarily as a result of a decrease in payroll related expenses. In the aggregate, general and administrative expenses increased 67.7% to $260,000 for the three months ended July 31, 2005, from $155,000 for the three months ended July 31, 2004. The increase is primarily due to the cost of operating the new facility.
Depreciation and amortization expense at both the new and existing travel centers increased 375.0% to $57,000 for the three months ended July 31, 2005, from $12,000 for the three months ended July 31, 2004. The increase is primarily associated with the new travel centers’ assets.
The above factors for both the new and existing travel centers contributed to a net result of no operating income for the three months ended July 31, 2005, from $18,000 for the three months ended July 31, 2004.
BOWLIN TRAVEL CENTERS, INC.
All Stores
Gross sales at the Company’s travel centers increased by 17.3% to $8.374 million for the three months ended July 31, 2005, from $7.137 million for the three months ended July 31, 2004. Merchandise sales increased 14.3% to $3.563 million for the three months ended July 31, 2005, from $3.118 million for the three months ended July 31, 2004. The increase is due to more efficient store management, the new Picacho Peak store as well as continued supervisory support dedicated to the stores. Gasoline sales increased 26.8% to $3.548 million for the three months ended July 31, 2005, from $2.798 million for the same period in 2004. The increase is due to market price increases. Restaurant sales decreased 3.1% to $718,000 for the three months ended July 31, 2005, from $741,000 for the three months ended July 31, 2004. The decrease is due to personnel issues at one of the restaurant locations as well as cost increases not reflected in retail prices. Wholesale gasoline sales to independent retailers increased 13.5% to $545,000 for the three months ended July 31, 2005, from $480,000 for the three months ended July 31, 2004. The increase is due to market price increases partially offset by decreases in volume.
Cost of goods sold increased 19.6% to $5.328 million for the three months ended July 31, 2005, from $4.453 million for the three months ended July 31, 2004. Merchandise cost of goods increased 10.1% to $1.390 million for the three months ended July 31, 2005, from $1.263 million for the three months ended July 31, 2004. This increase directly relates to the increase in sales partially offset by to improved volume purchase pricing as well as maintaining mark-ups. Gasoline cost of goods increased 26.8% to $3.178 million for the three months ended July 31, 2005, from $2.507 million for the three months ended July 31, 2004. The increase corresponds to market price increases. Restaurant cost of goods increased 4.6% to $227,000 for the three months ended July 31, 2005, from $217,000 for the three months ended July 31, 2004. The increase is primarily due to cost increases. Wholesale gasoline cost of goods increased 14.4% to $533,000 for the three months ended July 31, 2005, from $466,000 for the three months ended July 31, 2004. The increase is due to market price increases partially offset by decreases in volume. Cost of goods sold as a percentage of gross revenues increased to 63.6% for the three months ended July 31, 2005, as compared to 62.4% for the three months ended July 31, 2004.
Gross profit increased 13.5% to $2.884 million for the three months ended July 31, 2005, from $2.542 million for the three months ended July 31, 2004. The increase is primarily attributable to continued improvement of management of costs of goods due to increases in volume purchasing as well as the new facility.
General and administrative expenses consist of salaries, bonuses and commissions for travel center personnel, property costs and repairs and maintenance. General and administrative expenses also include executive and administrative compensation and benefits, accounting, legal and investor relations fees. General and administrative expenses increased 15.5% to $2.106 million for the three months ended July 31, 2005, from $1.823 million for the three months ended July 31, 2004. The increase is due to bonuses related to the sales incentive programs and executive management, general repair and maintenance as well as the cost of operating the new facility.
Depreciation and amortization expense increased 23.2% to $218,000 for the three months ended July 31, 2005, from $177,000 for the three months ended July 31, 2004. The increase is primarily associated with the new travel centers’ property and equipment.
The above factors contributed to an overall increase in operating income of 3.3% to $560,000 for the three months ended July 31, 2005, compared to operating income of $542,000 for the three months ended July 31, 2004.
BOWLIN TRAVEL CENTERS, INC.
Non-operating income (expense) includes interest income, rental income and interest expense. Interest income increased 10.0% to $11,000 for the three months ended July 31, 2005, from $10,000 for the three months ended July 31, 2004. The increase is primarily due to higher cash balances in the current period as well as higher interest rates. Gains from the sale of property and equipment increased to $206,000 for the three months ended July 31, 2005 from $4,000 for the three months ended July 31, 2004. The gain of $206,000 for the three months ended July 31, 2005 is primarily due to a balloon payment related to a note receivable that included a deferred gain. The gain of $4,000 is primarily due to an installment payment received related to a note receivable that included a deferred gain. Rental income was $45,000 for the three months ended July 31, 2005 compared to $49,000 for the three months ended July 31, 2004. Interest expense increased 130.2% to $99,000 for the three months ended July 31, 2005, from $43,000 for the three months ended July 31, 2004. The increase is primarily due to increases in long-term debt balances primarily related to the new travel center as well as higher interest rates.
Income before income taxes increased 28.6% to $723,000 for the three months ended July 31, 2005, compared to income before income taxes of $562,000 for the three months ended July 31, 2004. As a percentage of gross revenues, income before income taxes was 8.6% for the three months ended July 31, 2005, compared to 7.9% for the three months ended July 31, 2004.
Income tax expense increased 29.9% to $278,000 for the three months ended July 31, 2005, compared to an income tax expense of $214,000 for the three months ended July 31, 2004. The increase is primarily due to an increase in operating income and a non-operating gain from the sale of property and equipment partially off set by increases in interest expense.
The foregoing factors contributed to net income for the three months ended July 31, 2005 of $445,000 compared to a net income of $345,000 for the three months ended July 31, 2004.
Comparison of the Six Months Ended July 31, 2005 and July 31, 2004
Same Store
Same store financial data excludes the Company’s newly opened location, Picacho Peak Plaza as well as the existing Picacho Peak but does not include restaurant sales, as the new facility does not have a restaurant operation. For the six months ended July 31, 2005, the sales of the new facility impacted the existing facility, with a negative impact on overall operating income due to an increase in depreciation expense related to the new facility. A discussion of the new and existing Picacho Peak facilities follow the same store discussion.
Gross sales at the Company’s travel centers increased by 10.0% to $12.185 million for the six months ended July 31, 2005, from $11.080 million for the six months ended July 31, 2004. Merchandise sales increased 5.5% to $5.009 million for the six months ended July 31, 2005, from $4.746 million for the six months ended July 31, 2004. The increase is due to more efficient store management as well as continued supervisory support dedicated to the stores. Gasoline sales increased 16.3% to $4.850 million for the six months ended July 31, 2005, from $4.171 million for the same period in 2004. The increase is due to market price increases. Restaurant sales increased 0.2% to $1.319 million for the six months ended July 31, 2005, from $1.317 million for the six months ended July 31, 2004. The increase is due to increases at one restaurant location during the first quarter of the fiscal year offset by cost increases not reflected in retail prices. Wholesale gasoline sales to independent retailers increased 19.0% to $1.007 million for the six months ended July 31, 2005, from $846,000 for the six months ended July 31, 2004. The increase is due to market price increases partially offset by decreases in volume.
BOWLIN TRAVEL CENTERS, INC.
Total cost of goods sold increased 12.0% to $7.667 million for the six months ended July 31, 2005, from $6.847 million for the six months ended July 31, 2004. Merchandise cost of goods decreased 0.1% to $1.910 million for the six months ended July 31, 2005, from $1.911 million for the six months ended July 31, 2004. This decrease is directly related to improved volume purchase pricing as well as maintaining mark-ups. Gasoline cost of goods increased 17.0% to $4.361 million for the six months ended July 31, 2005, from $3.727 million for the six months ended July 31, 2004. The increase corresponds to market price increases. Restaurant cost of goods increased 5.9% to $410,000 for the six months ended July 31, 2005, from $387,000 for the six months ended July 31, 2004. The increase is primarily due to cost increases. Wholesale gasoline cost of goods increased 20.0% to $986,000 for the six months ended July 31, 2005, from $822,000 for the six months ended July 31, 2004. The increase is due to market price increases partially offset by decreases in volume. Cost of goods sold as a percentage of gross revenues increased to 62.9% for the six months ended July 31, 2005, as compared to 61.8% for the six months ended July 31, 2004.
Gross profit increased 6.9% to $4.285 million for the six months ended July 31, 2005, from $4.007 million for the six months ended July 31, 2004. The increase is primarily attributable to increased sales.
General and administrative expenses consist of salaries, bonuses and commissions for travel center personnel, property costs and repairs and maintenance. General and administrative expenses increased 3.9% to $3.314 million for the six months ended July 31, 2005, from $3.190 million for the six months ended July 31, 2004. The increase is primarily due bonuses related to sales incentive programs and executive management as well as general repair and maintenance.
Depreciation and amortization expense increased 4.6% to $339,000 for the six months ended July 31, 2005, from $324,000 for the six months ended July 31, 2004.
The above factors contributed to an increase in operating income of 28.2% to $632,000 for the six months ended July 31, 2005, compared to an operating loss of $493,000 for the six months ended July 31, 2004.
New and existing Picacho Peak facilities
On January 18, 2005, the Company opened a new state-of-the-art travel center in Picacho, Arizona. For the six months ended July 31, 2005, the sales of the new facility impacted the existing facility, with a negative impact on overall operating income due to an increase in depreciation expense related to the new facility. The following discussion does not include restaurant sales, as the new travel center does not have a restaurant operation.
Gross sales at the new travel center were $1.450 million for the six months ended July 31, 2005. Merchandise sales were $557,000 and gasoline sales were $893,000.
Gross sales at the existing travel center decreased by 41.7% to $933,000 for the six months ended July 31, 2005, from $1.601 million for the six months ended July 31, 2004. Merchandise sales decreased 33.9% to $376,000 for the six months ended July 31, 2005, from $569,000 for the six months ended July 31, 2004. The decrease is due to the impact of the new facility. Gasoline sales decreased 46.0% to $557,000 for the six months ended July 31, 2005, from $1.032 million for the same period in 2004. The decrease is due to the impact of the new facility.
Cost of goods sold for the new travel center were $1.045 million for the six months ended July 31, 2005. Merchandise cost of goods were $254,000 and gasoline cost of goods were $791,000. Cost of goods as a percentage of gross revenues was 72.1% for the six months ended July 31, 2005.
BOWLIN TRAVEL CENTERS, INC.
Cost of goods for the existing travel center decreased 43.1% to $656,000 for the six months ended July 31, 2005, from $1.153 million for the six months ended July 31, 2004. Merchandise cost of goods decreased 34.4% to $158,000 for the six months ended July 31, 2005, from $241,000 for the six months ended July 31, 2004. The decrease directly corresponds to the decrease in sales, which is due to the impact of the new facility. Gasoline cost of goods decreased 45.4% to $498,000 for the six months ended July 31, 2005, from $912,000 for the same period in 2004. The decrease directly corresponds to the decrease in sales, which is due to the impact of the new facility. Cost of goods sold as a percentage of gross revenues decreased for the six months ended July 31, 2005 to 70.3% compared to 72.0% for the six months ended July 31, 2004.