UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Quarter Ended December 31, 2000 Commission file Number 0-1830
BOWL AMERICA INCORPORATED
(Exact name of registrant as specified in its charter.)
MARYLAND 54-0646173
(State of Incorporation) (I.R.S. Employer Identification No.)
6446 Edsall Road, Alexandria, Virginia 22312
(Address of principal executive offices) (Zip Code)
(703)941-6300
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Shares Outstanding at
January 28, 2001
Class A Common Stock, 3,573,426
$.10 par value
Class B Common Stock 1,430,085
$.10 par value
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Thirteen Weeks Ended Twenty-six Weeks Ended
December 31, December 26, December 31, December 26,
2000 1999 2000 1999
_______________________ __________________________
Operating Revenues
Bowling and other $5,354,385 $5,302,801 $ 9,879,470 $ 9,562,058
Food, beverage and
merchandise sales 2,220,976 2,071,108 4,090,058 3,778,890
_________ _________ __________ __________
7,575,361 7,373,909 13,969,528 13,340,948
Operating Expenses
Compensation and benefits 3,118,142 2,994,890 6,217,595 5,853,013
Cost of bowling and other 1,380,043 1,382,755 2,816,249 2,882,232
Cost of food and mdse sales 724,600 663,416 1,344,154 1,190,594
Depreciation and
amortization 487,994 563,073 981,839 1,122,458
General and administrative 233,675 170,710 444,318 363,842
_________ _________ __________ __________
5,944,454 5,774,844 11,804,155 11,412,139
Operating Income 1,630,907 1,599,065 2,165,373 1,928,809
Interest and dividend
income 173,675 176,858 574,014 378,915
_________ _________ __________ __________
Earnings before provision
for income taxes 1,804,582 1,775,923 2,739,387 2,307,724
Provision for income taxes 647,805 635,157 983,400 820,197
_________ _________ __________ __________
Net Earnings $1,156,777 $1,140,766 $ 1,755,987 $ 1,487,527
Earnings per share $.23 $.21* $.35 $.27*
Weighted average shares
outstanding 5,007,007 5,415,445* 5,051,503 5,449,780*
Dividends paid $550,995 $543,645 $1,117,793 $1,095,408
Per share, Class A $.11 $.10* $.22 $.20*
Per share, Class B $.11 $.10* $.22 $.20*
*Restated for 5% stock dividend paid July 26, 2000.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $1,156,777 $1,140,766 $ 1,755,987 $ 1,487,527
Other comprehensive
earnings-net of tax
Unrealized (loss)gain on
available for sale
securities (589,590) 645,520 (1,531,470) 837,639
_________ _________ _________ _________
Comprehensive earnings $ 567,187 $1,786,286 $ 224,517 $ 2,325,166
The operating results for these thirteen (13) and twenty-six (26) week
periods are not necessarily indicative of results to be expected for the year.
See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2000 July 2, 2000
________________ _____________
ASSETS
Current Assets
Cash and cash equivalents $ 1,372,194 $ 1,523,242
Short-term investments 7,683,487 8,873,682
Inventories 679,390 657,628
Prepaid expenses and other 599,074 440,318
__________ __________
Total Current Assets 10,334,145 11,494,870
Property, Plant and Equipment
less accumulated depreciation of
$25,747,330 and $25,416,493 21,306,224 19,367,989
Other Assets
Marketable equity securities 6,737,541 9,168,446
Cash surrender value-life insurance 390,976 388,184
Other long-term assets 247,096 291,810
__________ __________
TOTAL ASSETS $39,015,982 $40,711,299
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2000 July 2, 2000
_________________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 656,335 $ 688,213
Accrued expenses and payroll ded 826,633 893,493
Income taxes payable 223,336 129,390
Deferred income taxes 23,000 23,000
Other current liabilities 1,600,449 430,808
__________ __________
Total Current Liabilities 3,329,753 2,164,904
Noncurrent Deferred Income Taxes 2,778,565 3,678,000
TOTAL LIABILITIES 6,108,318 5,842,904
__________ __________
Stockholders' Equity
Preferred stock,
par value $10 a share: Authorized
and unissued 2,000,000 shares
Common stock,
par value $.10 per share
Authorized 10,000,000 shares
Class A issued and outstanding -
3,576,130 and 3,406,070 shares 357,611 340,607
Class B issued and outstanding -
1,430,085 and 1,488,826 143,008 148,883
Additional paid-in capital 4,051,648 3,959,169
Unrealized gain on securities
available-for-sale, 3,714,951 5,246,421
Retained earnings 24,640,446 25,173,315
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,907,664 $34,868,395
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $39,015,982 $40,711,299
<FN>
See notes to financial information.
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 31, 2000 AND DECEMBER 26, 1999
December 31, December 26,
2000 1999
Cash Flows From Operating Activities:
Net earnings $1,755,987 $1,487,527
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 981,839 1,122,458
Changes in assets and liabilities
Increase in inventories (21,762) (83,204)
(Increase) decrease in prepaid & other (158,756) 20,938
Decrease in other long-term assets 41,922 281,804
(Decrease) increase in accounts payable (31,878) 35,694
Decrease in accrued expenses
and payroll deductions (66,860) (346,755)
Increase in income taxes payable 93,946 505,070
Increase in other current liabilities 1,169,638 1,173,810
_________ _________
Net cash provided by operating activities $3,764,076 $4,197,342
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (2,920,074) (321,757)
Net decrease (increase) in
short-term investments 1,190,195 (1,303,123)
_________ _________
Net cash used in investing activities (1,729,879) (1,624,880)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,117,793) (1,095,408)
Purchase of Class A & B Common Stock (1,067,452) (761,948)
_________ _________
Net cash used in financing activities (2,185,245) (1,857,356)
_________ _________
Net (Decrease) Increase in Cash
and Equivalents (151,048) 715,106
Cash and Equivalents, Beginning of Year 1,523,242 1,557,225
_________ _________
Cash and Equivalents, End of Period $1,372,194 $2,272,331
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 890,785 $ 315,127
<FN>
See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Twenty-six Weeks Ended
December 31, 2000
1. Consolidated Financial Statements
The accompanying unaudited consolidated financial statements of Bowl
America Incorporated and subsidiaries (the "Company"), have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. The consolidated balance sheet as of July 2, 2000 has been
derived from the Company's July 2, 2000 audited financial statements.
Certain information and note disclosures normally included in the annual
financial statements, prepared in accordance with generally accepted
accounting principles, have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures
made are adequate to make the information presented not misleading.
In the opinion of management, the accompanying unaudited consolidated
financial statements reflect all adjustments and reclassifications (all of
which are of a normal, recurring nature) that are necessary for the fair
presentation for the periods presented. It is suggested that these
consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's latest annual report to the Securities and Exchange Commission
on Form 10-K for the year ended July 2, 2000.
2. Marketable Equity Securities
Marketable equity securities are carried at fair value in accordance
with the provisions of SFAS No. 115.
The telecommunications stocks included in the portfolio as of
December 31, 2000 were:
3,946 shares of Alltel
14,316 shares of American Telephone & Telegraph
27,572 shares of Bell South
8,028 shares of Lucent Technologies
9,969 shares of Qwest Communications
45,580 shares of SBC
32,000 shares of SprintFon
16,000 shares of SprintPCS
18,784 shares of Verizon
13,560 shares of Vodafone/AirTouch
BOWL AMERICA INCORPORATED
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
December 31, 2000
Liquidity and Capital Resources
Short-term investments, consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $9,100,000 at the end of the second
quarter of fiscal 2001 or $1,773,000 higher than at the beginning
of the quarter.
There were no large expenditures for assets or stock during the quarter.
However, since July 2000, the Company has expended $1,067,000 for the
purchase of 133,224 shares of its previously outstanding common stock,
and $2,250,000 for the purchase of the land and building at Bowl America
Glen Burnie.
The Company is actively seeking property for development of bowling
centers while continuing to modernize existing locations. Cash and cash
flow are sufficient to finance all currently planned purchases and
construction. The Company's marketable securities, primarily in
telecommunications stocks are another source of expansion capital.
These securities are carried at their fair value on the last day of the
quarter. For the three-month period ending December 31, 2000, the
market value decreased by $936,000 to approximately $6,700,000.
While no factors requiring a change in the dividend rate are apparent,
the Board of Directors decides the amount and timing of any dividend
at its quarterly meeting based on its appraisal of the state of the
business and its estimate of future opportunities.
The Company paid a 5% stock dividend on July 26, 2000. All applicable
share and per share data in prior periods has been restated for the
effect of the stock dividend.
During the quarter the Company closed a center operating at break-even
at the end of its lease.
Results of Operations
There was a $.23 per share profit for the thirteen-week period ending
December 31, 2000, versus a $.21 per share profit for the thirteen weeks
ended December 26, 1999. For the current twenty-six week period
earnings per share were $.35 compared to $.27 for the comparable period
a year ago. All revenue and expense comparisons were impacted by the
operaton of one fewer center in the current year quarter.
Operating revenues increased 5% for the current six-month period
versus an increase of 6% in the comparable period a year ago.
Open play and special event bowling improved and the average game
rate was up over the prior year period minimizing the effect of
decreased league bowling. Increases in ancillary revenues are the
result of the higher casual bowler traffic.
For the six-month period food, beverage and merchandise sales were up
8% versus a 5% increase in the prior year six-month period. Cost of
sales increased due to the higher sales.
Operating expenses excluding depreciation and amortization increased 5%
in the current six-month period versus a 1% increase in the comparable
period last year. Employee compensation and benefits were up 6% this period
versus a 2% increase in the prior year period. The need for overtime pay
decreased somewhat in the quarter, however the still tight labor market
continues to apply pressure to this area of expense.
Advertising expense decreased 19% from a year ago when there was a 15%
increase partially due to support of glow-in-the-dark bowling. Equipment
expense decreased 11% in the current year versus a 5% increase last year.
Utility costs were flat in both the current and prior six-month periods.
Depreciation and amortization expense decreased 13% in the current year
period and 2% in the comparable period last year. Several large capital
assets have reached full depreciation. Rent expense was down 14% in the
current period due to the closing of a center mentioned above and the
purchase of a formerly leased location. Last year rent expense declined
by 12% after a leased location was closed.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
December 31, 2000
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
At the annual meeting on December 5, 2000, the Class A shareholders
approved the appointment of Director Warren T. Braham for a one year period
to expire at the 2001 Annual Meeting. The votes were cast as follows:
For 2,889,914
Against 1,670
Withheld 84,166
At the annual meeting on December 5, 2000, the Class A shareholders
approved the appointment of Director Allan L. Sher for a one year period
to expire at the 2001 Annual Meeting. The votes were cast as follows:
For 2,891,528
Against 56
Withheld 84,166
At the annual meeting on December 5, 2000, the Class B shareholders
approved the appointment of all Class B Directors as listed in the
proxy statement for the December 5, 2000 meeting, for a one year period
to expire at the 2001 Annual Meeting. The votes were cast as follows:
For 13,613,700
Against 0
Withheld 0
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits None
(b) Reports on Form 8-K
No Form 8-K was filed during the quarter ended December 31, 2000.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirement 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.
BOWL AMERICA INCORPORATED
Registrant
February 14, 2001 Leslie H. Goldberg
Date Leslie H. Goldberg
President
February 14, 2001 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller