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 April 1, 2001 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
April 29, 2001
Class A Common Stock, 3,478,976
$.10 par value
Class B Common Stock 1,416,427
$.10 par value
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
PART I - FINANCIAL INFORMATION
Thirteen Weeks Ended Thirty-nine Weeks Ended
April 01, March 26, April 01, March 26,
2001 2000 2001 2000
_______________________ __________________________
Operating Revenues
Bowling and other $6,465,529 $6,253,655 $16,344,999 $15,815,713
Food and merchandise sales 2,647,759 2,428,802 6,737,817 6,207,692
_________ _________ __________ __________
9,113,288 8,682,457 23,082,816 22,023,405
Operating Expenses
Compensation and benefits 3,320,547 3,138,923 9,538,142 8,991,936
Cost of bowling and other 1,477,447 1,445,483 4,293,696 4,327,715
Cost of food and mdse sales 837,795 759,114 2,181,949 1,949,708
Depreciation and
amortization 487,994 531,828 1,469,833 1,654,286
General and administrative 464,525 196,631 908,843 560,473
_________ _________ __________ __________
6,588,308 6,071,979 18,392,463 17,484,118
Operating Income 2,524,980 2,610,478 4,690,353 4,539,287
Interest and dividend
income 186,524 212,207 760,538 591,122
_________ _________ __________ __________
Earnings before provision
for income taxes 2,711,504 2,822,685 5,450,891 5,130,409
Provision for income taxes 973,500 1,015,589 1,956,900 1,835,786
_________ _________ __________ __________
Net Earnings $1,738,004 $1,807,096 $ 3,493,991 $ 3,294,623
Earnings per share $.35 $.34* $.70 $.61*
Weighted average shares
outstanding 4,931,439 5,199,785* 5,011,481 5,366,448*
Dividends paid $575,417 $566,232 $1,693,210 $1,661,640
Per share, Class A $.115 $.105* $.335 $.30*
Per share, Class B $.115 $.105* $.335 $.30*
*Restated for 5% stock dividend paid July 26, 2000.
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS
Net earnings $1,738,004 $1,807,096 $ 3,493,991 $ 3,294,623
Other comprehensive
earnings net of tax
Unrealized (loss) gain
on available-for-sale
securities (199,634) (381,475) (1,731,104) 456,164
_________ _________ _________ _________
Comprehensive earnings $1,538,370 $1,425,621 $ 1,762,887 $ 3,750,787
The operating results for these thirteen (13) and thirty-nine (39) 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
April 1, 2001 July 2, 2000
_______________ _____________
ASSETS
Current Assets
Cash and cash equivalents $ 2,485,461 $ 1,523,242
Short-term investments 8,521,134 8,873,682
Inventories 568,174 657,628
Prepaid expenses and other 699,942 440,318
__________ __________
Total Current Assets 12,274,711 11,494,870
Property, Plant and Equipment
less accumulated depreciation of
$26,235,324 and $25,416,493 21,081,051 19,367,989
Other Assets
Marketable equity securities 6,420,662 9,168,446
Cash surrender value-life insurance 390,976 388,184
Other long-term assets 248,605 291,810
__________ __________
TOTAL ASSETS $40,416,005 $40,711,299
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 1, 2001 July 2, 2000
_______________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 930,573 $ 688,213
Accrued expenses and payroll ded 1,039,055 893,493
Income taxes payable 365,798 129,390
Deferred income taxes 23,000 23,000
Other current liabilities 2,549,288 430,808
__________ __________
Total Current Liabilities 4,907,714 2,164,904
Noncurrent Deferred Income Taxes 2,661,320 3,678,000
_________ _________
TOTAL LIABILITIES 7,569,034 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 -
3,478,976 and 3,406,070 shares 347,897 340,607
Class B issued and outstanding -
1,416,427 and 1,488,826 shares 141,643 148,883
Additional paid-in capital 3,765,997 3,959,169
Unrealized gain on available-for-
sale securities, net of tax 3,515,317 5,246,421
Retained earnings 25,076,117 25,173,315
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,846,971 $34,868,395
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $40,416,005 $40,711,299
<FN>
See notes to financial information.
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED APRIL 1, 2001 AND MARCH 26, 2000
April 1, March 26,
2001 2000
Cash Flows From Operating Activities:
Net earnings $3,493,991 $ 3,294,623
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,469,833 1,654,286
Changes in assets and liabilities
Decrease in inventories 89,454 76,958
Increase in prepaid and other (259,624) (376,182)
Decrease in other long-term assets 40,413 281,803
Increase in accounts payable 242,360 95,914
Increase in accrued expenses
and payroll deductions 145,562 37,549
Increase in income taxes payable 236,408 1,023,858
Increase in other current liabilities 2,118,490 2,020,085
_________ _________
Net cash provided by operating activities $7,576,887 $ 8,108,894
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (3,182,895) (426,130)
Net decrease (increase) in short-term
investments 352,548 (3,014,544)
_________ _________
Net cash used in investing activities (2,830,347) (3,440,674)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,693,210) (1,661,640)
Purchase of Common Stock (2,091,111) (2,750,671)
_________ _________
Net cash used in financing activities (3,784,321) (4,412,311)
_________ _________
Net Increase in Cash and Cash
Equivalents 962,219 255,909
Cash and Equivalents, Beginning of Year 1,523,242 1,557,225
_________ _________
Cash and Equivalents, End of Period $2,485,461 $ 1,813,134
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $1,721,823 $ 811,914
<FN>
See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirty-nine Weeks Ended
April 1, 2001
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 April 1, 2001
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
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
April 1, 2001
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $11,007,000 at the end of the third
quarter of fiscal 2001 or $1,907,000 higher than at the beginning
of the quarter. The Company has purchased 244,036 shares of its
previously outstanding common stock in the fiscal year for $2,091,000,
including 110,812 shares in the third quarter for $1,024,000.
During the nine-month period the Company expended $2,250,000 for the
purchase of the land and building at Bowl America Glen Burnie. The
Company is continuing to modernize existing locations and is actively
seeking property for the development of additional bowling centers.
Cash and cash flow are sufficient to finance all currently planned
purchases and construction.
The Company's position in telecommunications stocks is an additional
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
April 1, 2001, the market value decreased by $300,000 to approximately
$6,400,000.
Current liabilities include $2million in league deposits of prize fund
monies which are returned to the leagues at the end of the bowling season,
generally during the fourth quarter.
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 have been restated for the effect of the
stock dividend.
On March 27, 2001 the Company declared a cash dividend of $.115 per share
on its Class A and Class B Common Stock, payable on May 16, 2001 to share-
holders of record as of April 25, 2001, and a 5% stock dividend on its
Class A and Class B Common Stock, payable on July 26, 2001 to shareholders
of record on July 5, 2001.
During the second quarter of fiscal 2001, the Company closed a center
operating at break-even at the end of its lease.
Results of Operations
There was a $.35 per share profit for the thirteen-week period ending
April 1, 2001, versus $.34 per share profit for the thirteen weeks
ending March 26, 2000. For the current thirty-nine week period
earnings per share were $.70 compared to $.61 for the comparable period
a year ago. All revenue and expense comparisons were impacted by the
operation of one fewer location in the current year quarter.
Operating revenues increased 5% for both the current three-month and
nine-month periods. In the prior year period the quarter showed a slight
decrease but the nine-month period was up 3%. Food, beverage and merchandise
sales were up 9% in both the three-month and nine-month periods and cost of
sales was up due to the increase in sales.
Operating expenses excluding depreciation and amortization increased 10%
in the three-month period and 7% through the nine-month period. In the
prior year both the three-month and nine-month period showed a slight
decrease in expenses. Employee compensation and benefits were up 6%
in both the three-month and nine-month periods. Overtime pay and a still
tight labor market during our busy season were the main causes for the
increases.
Advertising costs increased 18% from the prior year quarter primarily due to
the cost of preparing our "Rolling Bowling" trailers for the new season.
Year-to-date advertising costs were down 8% from the prior year period.
Higher gas prices were responsible for a 6% increase in utility costs for the
quarter. There has been a 2% increase in utility costs for the nine-month
period versus a decrease of less than 1% in last year's comparable period.
The Company is defending a lawsuit commenced during the first quarter of
the fiscal year by a former employee, scheduled to go to trial later this
year, which is primarily responsible for the increased general and
administrative expense.
Depreciation and amortization expense decreased 11% in the year-to-date
period versus a decrease of 3% in the prior year period. Several large
capital assets have reached full depreciation. Rent expense for the nine-
months ended April 1, 2001 was down 25% due to the closing of a leased
center mentioned above and the purchase of a formerly leased location.
Rent expense in the prior year's comparable period decreased 12% after the
closing of a leased location.
S.E.C. FORM 10-Q
April 1, 2001
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits None
(b) Reports on Form 8-K
On March 27, 2001, the Company filed a Form 8-K (Item 5) reporting the
declaration on that date of cash and stock dividends.
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
May 15, 2001 Leslie H. Goldberg
Date Leslie H. Goldberg
President
May 15, 2001 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller