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 January 1, 2006 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 by check mark whether the registrant is an accelerated
filer (as defined in Exchange Act Rule 12 b-2)
YES [ ] NO [X]
Indicate by check mark whether the registrant is a shell company
(as defined by Rule 12b-2 of the Exchange Act)
YES [ ] NO [X]
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 29, 2006
Class A Common Stock, 3,668,518
$.10 par value
Class B Common Stock 1,468,462
$.10 par value
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended
January 1, December 26, January 1, December 26,
2006 2004 2006 2004
_______________________ __________________________
Operating Revenues
Bowling and other $5,367,328 $5,033,421 $ 9,928,834 $ 9,256,174
Food, beverage and
merchandise sales 2,188,276 2,078,175 4,003,372 3,755,506
_________ _________ __________ __________
7,555,604 7,111,596 13,932,206 13,011,680
Operating Expenses
Compensation and benefits 3,267,717 3,099,810 6,452,746 6,062,501
Cost of bowling and other 1,646,564 1,578,907 3,370,229 3,054,091
Cost of food, beverage and
merchandise sales 688,937 663,684 1,269,788 1,187,248
Depreciation and
amortization 386,657 402,485 762,983 803,118
General and administrative 153,727 176,718 370,322 379,989
_________ _________ __________ __________
6,143,602 5,921,604 12,226,068 11,486,947
Operating Income 1,412,002 1,189,992 1,706,138 1,524,733
Investment earnings - 151,817 - 151,817
Interest and dividend
income 145,969 160,319 302,320 264,322
_________ _________ __________ __________
Earnings before provision
for income taxes 1,557,971 1,502,128 2,008,458 1,940,872
Provision for income taxes 538,000 552,100 690,000 700,000
_________ _________ __________ __________
Net Earnings $1,019,971 $ 950,028 $ 1,318,458 $ 1,240,872
========= ========= ========= =========
Earnings per share-basic &
diluted $.20 $.18 $.26 $.24
Weighted average shares
outstanding 5,136,980 5,137,773 5,137,028 5,137,773
Dividends paid $719,177 $693,600 $1,438,354 $1,387,200
Per share, Class A $.14 $.135 $.28 $.27
Per share, Class B $.14 $.135 $.28 $.27
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $1,019,971 $ 950,028 $ 1,318,458 $1,240,872
Other comprehensive
earnings-net of tax
Unrealized (loss) gain on
available for sale
securities (44,365) 186,736 (89,016) 458,657
Less: reclassification
adjustment for gain
included in net income - (88,687) - (88,687)
_________ _________ _________ _________
Comprehensive earnings $ 975,606 $1,048,077 $ 1,229,442 $1,610,842
========= ========= ========= =========
The operating results for the thirteen (13) and twenty-six (26) week
periods ended January 1, 2006, are not necessarily indicative of results
to be expected for the year.
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
-----------------------------------
January 1, 2006 July 3, 2005
________________ _____________
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 957,100 $ 1,707,385
Short-term investments 9,504,110 11,273,191
Inventories 709,924 626,452
Prepaid expenses and other 421,372 491,647
Income taxes refundable 123,467 132,467
__________ __________
Total Current Assets 11,715,973 14,231,142
Land, Buildings and Equipment
Net of accumulated depreciation of
$29,697,534 and $29,056,847 26,842,708 23,440,265
Other Assets
Marketable equity securities(Note 2) 4,091,768 4,208,421
Cash surrender value-life insurance 518,462 516,248
Other long-term assets 87,180 152,922
__________ __________
Total Other Assets 4,697,410 4,877,591
---------- ----------
TOTAL ASSETS $43,256,091 $42,548,998
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,217,202 $ 1,130,017
Accrued expenses 643,222 1,127,639
Dividends payable 719,177 719,177
Other current liabilities 1,746,615 372,932
Current deferred income taxes 247,936 247,936
__________ __________
Total Current Liabilities 4,574,152 3,597,701
Long-term Deferred Compensation 71,475 71,475
Noncurrent Deferred Income Taxes 2,635,949 2,688,160
---------- ----------
TOTAL LIABILITIES 7,281,576 6,357,336
__________ __________
COMMITMENTS AND CONTINGENCIES (Note 3)
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 -
3,668,518 and 3,669,311 shares 366,852 366,932
Class B issued and outstanding -
1,468,462 shares 146,846 146,846
Additional paid-in capital 7,480,745 7,479,072
Unrealized gain on securities
available-for-sale, 2,105,698 2,194,714
Retained earnings 25,874,374 26,004,098
__________ __________
TOTAL STOCKHOLDERS' EQUITY $35,974,515 $36,191,662
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $43,256,091 $42,548,998
========== ==========
<FN>
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE TWENTY-SIX WEEKS ENDED JANUARY 1, 2006 AND DECEMBER 26, 2004
January 1, December 26,
2006 2004
Cash Flows From Operating Activities:
Net earnings $1,318,458 $1,240,872
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 762,983 803,118
Gain on sale of available-for-sale
securities - (151,817)
Changes in assets and liabilities
Increase in inventories (83,472) (34,714)
Decrease in prepaid
expenses & other 62,040 291,656
Decrease in income taxes refundable 9,000 -
Decrease in income taxes payable - (99,360)
Decrease in other long-term assets 63,528 46,806
Increase in accounts payable 87,185 84,523
Decrease in accrued expenses (484,417) (467,471)
Increase in other current liabilities 1,373,683 1,397,937
_________ _________
Net cash provided by operating activities $3,108,988 $3,111,550
_________ _________
Cash flows from investing activities
Expenditures for land,buildings & equip (4,165,426) (1,153,406)
Net sales (purchases) of short-term
investments 1,744,507 (539,328)
Proceeds from sale of marketable
securities - 252,525
_________ _________
Net cash used in investing activities (2,420,919) (1,440,209)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,438,354) (1,387,200)
_________ _________
Net cash used in financing activities (1,438,354) (1,387,200)
_________ _________
Net (Decrease) Increase in Cash and
Equivalents (750,285) 284,141
Cash and Equivalents, Beginning of Period 1,707,385 1,320,643
_________ _________
Cash and Equivalents, End of Period $ 957,100 $1,604,784
========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 681,000 $ 803,477
Non-cash Investing and Financing Activities:
Settlement of employee stock loan by
acquisition of common stock $2,845 -
Repayment of employee loans by acquisition
of common stock $8,257 -
<FN>
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Twenty-six Weeks Ended
January 1, 2006
(Unaudited)
1. Basis for Presentation
The accompanying unaudited condensed 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 condensed consolidated balance sheet as of July 3, 2005
has been derived from the Company's July 3, 2005 audited financial statements.
Certain information and note disclosures normally included in the annual
financial statements, prepared in accordance with accounting principles
generally accepted in the United States of America, 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 condensed 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
condensed 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 3, 2005.
2. Marketable Equity Securities
Marketable equity securities are carried at fair value in accordance
with the provisions of SFAS No. 115. At January 1, 2006, the fair value of
these securities was $4,091,768, with an original cost of $757,074, resulting
in an unrealized gain of $3,334,714. The telecommunications stocks included
in the portfolio as of January 1, 2006 were:
45,580 shares of AT&T/SBC
220 shares of Agere
3,946 shares of Alltel
669 shares of Avaya
27,572 shares of Bell South
8,028 shares of Lucent Technologies
9,969 shares of Qwest Communications
40,000 shares of Sprint/Nextel
18,784 shares of Verizon
13,560 shares of Vodafone/AirTouch
3. Commitments and Contingencies
At January 1, 2006, contracts relating to the construction and equipping
of Bowl America Short Pump in Richmond, Virginia, totaled approximately
$4,886,000, of which approximately $3,941,000 had been paid.
In September 2004, the Company signed a contract for approximately
$770,000 for site preparation relating to the building, to be paid as
work is completed. Revisions to the contract through January 1, 2006,
increased the contact amount to $1,210,000, of which $893,000 has been paid.
In February 2005, the Company signed a contract for the purchase of bowling
equipment for the new location totaling approximately $379,000. At January 1,
2006, installation of the equipment was in process. Full payment for the
equipment was made in January 2006.
During the quarter ended March 2005, the Company signed a contract for the
construction of the building shell for approximately $1,526,000. Additional
requests and revisions increased the contract amount, at January 1, 2006, to
approximately $3,096,000, of which approximately $2,896,000 has been paid.
In July 2005 the Company placed purchase orders totaling $438,000 for bowling
equipment, including pins, expected to be in place in the second quarter of
fiscal 2006. Approximately $365,164 had been paid through January 1, 2006,
and an additional payment of $50,430 was made in January 2006.
In December 2005 the Company signed a purchase order for $55,000 for the
purchase of restaurant point-of-sale cash systems to be installed in the
third quarter of fiscal 2006. A deposit of $27,601 was made prior to
January 1, 2006.
In December 2005 the Company signed a purchase order for the purchase of
point-of-sale cash systems for approximately $180,000. Installation of
these systems is expected to be completed in the fourth quarter of fiscal
2006. Payment will be made upon acceptance of the working systems.
4. Reclassifications
Certain previous period amounts have been reclassified to conform with current
period presentation.
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
January 1, 2006
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Government securities and
cash totaled $10,461,000 at the end of the second quarter of fiscal 2006,
or $674,000 lower than at the beginning of the quarter and $2,519,000 lower
than at the beginning of the fiscal year. Funding of construction and
equipment for our new location was primarily responsible for the decrease
in working capital to $7,142,000 at January 1, 2006 from $10,633,000 at
July 3, 2005.
In the six-month period ended January 1, 2006, the Company expended $434,000
for purchases of equipment to modernize facilities. Approximately $3,731,000
was spent for items relating to the construction and equipping of Bowl America
Short Pump. The table below summarizes all purchase obligations as of
January 1, 2006, including site preparation, building and equipment for
the new location as well as equipment for operating locations.
Construction of the new 40-lane facility, estimated to cost $5 million, was
essentially completed in January 2006 and the center opened to the public on
January 27, 2006. The Company is actively seeking property for additional
locations. Cash and cash flow are sufficient to finance all currently
contemplated purchases and construction. The Company has also maintained its
fiscal year end 2005 position in marketable equity securities, primarily
telecommunications stocks, as a further source of expansion capital.
These marketable securities are carried at their fair value on the last day
of the quarter. At January 1, 2006, the market value was approximately
$4,092,000 or $68,000 lower than at the beginning of the quarter.
Contractual Total Less Than 1 1-3 3-5 More Than 5
obligations Year Years Years Years
Operating lease
obligations $1,402,106 $ 272,660 $545,120 $283,660 $300,666
Purchase
obligations $1,176,235 $1,176,235 - - -
Total $2,578,341 $1,448,895 $545,120 $283,660 $300,666
Current liabilities increase during the first three quarters of the fiscal
year as leagues deposit prize fund monies with the Company throughout the
league season. These funds are returned to the leagues at the end of the
bowling season, generally in the fourth quarter. At January 1, 2006,
approximately $1,587,000 in league deposits were included in the current
liabilities category.
While no factors calling for 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.
On December 6, 2005, the Board of Directors declared a cash dividend of $.14
per share on its Class A and Class B stock to holders of record on January 10,
2006, payable February 15, 2006. Bowl America has increased per share
dividends for 33 consecutive years.
RESULTS OF OPERATIONS
Eighteen centers were in operation in both the current and prior year periods.
Net earnings were $1,019,971 or $.20 per share for the thirteen-week period
ended January 1, 2006, and $950,028 or $.18 per share for the thirteen weeks
ended December 26, 2004. For the current twenty-six week period net earnings
per share were $1,318,458 or $.26 compared to $1,240,872 or $.24 for the
comparable period a year ago. The prior year thirteen and twenty-six week
earnings include a gain on the sale of AT&T Wireless stock of $151,817 or
$.02 per share which is shown in the investment earnings category.
Total operating revenues increased $444,000 or 6% in the current year quarter
and decreased $196,000 or 3% in the three-month period ended December 26,
2004. For the current fiscal six-month period operating revenues were up
$920,000 or 7% versus a decrease of $441,000 or 3% in the comparable six-month
period a year ago. Increases of $334,000 and $673,000 in operating revenues
from bowling and other resulted in a 7% hike in both the quarter and year-to-
date period ended January 1, 2006, respectively. Both of the prior year
comparable three and six month period revenues showed decreases of 2% or
$130,000 and $233,000, respectively.
Food, beverage and merchandise sales were up $110,000 or 5% in the current
year quarter and up $247,866 or 7% in the six-month period. Cost of sales
increased proportionally.
Operating expenses excluding depreciation and amortization were up $238,000
or 4% and $779,000 or 7% in the current three-month period and six-month
periods, respectively, versus a decrease of $85,000 or 1% and $437,000 or
4% in the three and six-month periods last year. Pre-opening expenses for
Bowl America Short Pump of approximately $60,000 were incurred in the
quarter ended January 1, 2006.
Employee compensation and benefits were up $390,000 or 6% in the current
six-month period and were down $279,000 or 4% in the prior year comparable
period. The current year growth in traffic and preparation for the Short
Pump location resulted in higher payroll costs. Increases in group health
insurance premiums also contributed to the current year increase.
Cost of bowling and other services increased $316,138 or 10% in the six-month
period ended January 1, 2006 and decreased $38,000 or 1% in the comparable
period last year. Maintenance and repair costs were up $124,000 or 39% in
the six-month period ended January 1, 2006, due, in large part, to major
plumbing related repairs. In the six-month period ended December 26, 2004,
this same category was down 24% in part due to the elimination of lane
refinishing costs.
Advertising costs during the current twenty-six week period decreased 4%
versus an increase of 25% in the prior year comparable period. Utility costs
for the quarter were up $72,000 or 26% and $101,000 or 17% for the three and
six-month periods ended January 1, 2006, respectively versus an increase of
$3,000 or 1% and $15,000 or 3%, respectively, for the comparable periods last
year. Bowling supplies and services costs were down 4% for the six-month
period compared to an 8% decrease in the prior year six-month period.
Rent expense was down 10% in the current year- to-date period primarily due
to lower common area maintenance fees. Insurance expense, excluding health
and life, increased 6% through the six-month period ended January 1, 2006,
compared to a 7% decrease in the six-month period a year ago.
Depreciation and amortization expense decreased 5% in the current year-to-date
period and increased 2% in the comparable prior year period. Future periods
will reflect depreciation and amortization expense for the new location.
Interest and dividend income declined in the quarter ended January 1, 2006,
due to lower investment balances. However, increasingly higher rates have
partially offset the decrease.
CRITICAL ACCOUNTING POLICIES
We have identified accounting for marketable investment securities under SFAS
115 ("Accounting for Certain Investments in Debt and Equity Securities") as a
critical accounting policy due to the significance of the amounts included in
our balance sheet under the captions of Short-term investments and Marketable
equity securities. The Company exercises judgment in determining the
classification of its investment securities as available-for-sale and in
determining their fair value. The Company records these investments at their
fair value with the unrealized gain or loss recorded in accumulated other
comprehensive income, a component of stockholders' equity, net of deferred
taxes. Additionally, from time to time the Company must assess whether
write-downs are necessary for other than temporary declines in value.
We have identified accounting for the impairment of long-lived assets under
SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" as
a critical accounting policy due to the significance of the amounts included
in our balance sheet under the caption of Land, Buildings and Equipment. The
Company reviews long-lived assets whenever events or changes indicate that
the carrying amount of an asset may not be recoverable. In making such
evaluations, the Company compares the expected future cash flows to the
carrying amount of the assets. An impairment loss equal to the difference
between the assets' fair value and carrying value is recognized when the
estimated future cash flows are less than the carrying amount.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk. Our short-term investments and certain cash equivalents
are subject to interest rate risk. We manage this risk by maintaining an
investment portfolio of available-for-sale instruments with high credit
quality and relatively short average maturities. The fair value of marketable
debt securities held was $9,504,000 and $12,258,000 at January 1, 2006 and
December 26, 2004, respectively. The fair value of certain fixed rate debt
securities will change depending on movements in interest rates. Declines in
interest rates will affect our interest income. Based on our portfolio of
debt securities at January 1, 2006, a 10% decline in the average yield would
have no material impact on annual interest income.
ITEM 4. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures are effective
based on their evaluation of such controls and procedures as of January 1,
2006. There was no change in the Company's internal control over financial
reporting identified in connection with the evaluation that occurred during
the quarter ended January 1, 2006, that materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
January 1, 2006
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
At the annual meeting held December 6, 2005, the Class A shareholders approved
the appointment of Director Warren T. Braham for a one year period to expire
at the 2006 Annual Meeting. The votes were cast as follows:
For 3,370,429 Withheld 8,014
At the annual meeting held December 6, 2005, the Class A shareholders approved
the appointment of Director Allan L. Sher for a one year period to expire at
the 2006 Annual Meeting. The votes were cast as follows:
For 3,378,443 Withheld 0
At the annual meeting held December 6, 2005, the Class B shareholders approved
the appointment of Merle Fabian, Leslie H. Goldberg, Stanley H. Katzman,
A. Joseph Levy, Ruth Macklin and Irvin Clark, as listed in the proxy statement
for the December 6, 2005 meeting, for a one year period to expire at the 2006
Annual Meeting. The votes were cast as follows:
For 14,551,220 Withheld 0
Item 6 - Exhibits
(a) Exhibits
31.1 Certification of Chief Executive Officer
31.2 Certification of Chief Financial Officer
32 Written Statement of the Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. 1350
20 Press release issued February 14, 2006 (furnished herewith)
Pursuant to the requirements of the Securities 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)
Date: February 14, 2006 By: Leslie H. Goldberg
Leslie H. Goldberg, President
Date: February 14, 2006 By: Cheryl A. Dragoo
Cheryl A. Dragoo, Controller
EXHIBIT 31.1
Exhibit 31.1 to Form 10-Q
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule
13a-14(a) Or 15d-14(a) under the Securities Exchange Act of 1934
I, Leslie H. Goldberg, certify that:
1. I have reviewed this Quarterly report on Form 10-Q of Bowl America
Incorporated;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting: and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: February 14, 2006 Leslie H Goldberg
Chief Executive Officer
Exhibit 31.2
Exhibit 31.2 to Form 10-Q
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule
13a-14(a) Or 5d-14(a) under the Securities Exchange Act of 1934
I, Cheryl A. Dragoo, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Bowl America
Incorporated;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting: and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: February 14, 2006 Cheryl A. Dragoo
Chief Financial Officer
Exhibit 32
Exhibit 32 to Form 10-Q
Written Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. 1350
Solely for the purposes of complying with 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned
Chief Executive Officer and Chief Financial Officer of Bowl America
Incorporated (the "Company"), hereby certify, based on our knowledge, that the
Quarterly Report on Form 10-Q of the Company for the period ended January 1,
2006, (the "Report") fully complies with the requirements of Section 13(a) of
the Securities Act of 1934 and that information contained in the Report fairly
presents, in all material respects, the financial condition and results of
operations of the Company.
Leslie H. Goldberg
Chief Executive Officer
Cheryl A. Dragoo
Chief Financial Officer
Date: February 14, 2006
EXHIBIT 20
Exhibit 20 to FORM 10-Q Press Release issued February 14, 2006
SECOND QUARTER EARNINGS UP AT BOWL AMERICA
Bowl America Incorporated today reported second quarter earnings increased to
$.20 per share from $.18 in the prior year comparable quarter. Last year's
second quarter included an after tax gain of approximately $.02 per share on
the sale of AT&T Wireless stock. Six-month earnings per share were $.26 and
$.24 for the current and prior year, respectively.
A strong upturn in open play games and commensurate increases in food, beverage
and ancillary sales generated the increase in the current year quarter.
Significantly higher maintenance and utility costs and approximately $60,000
in pre-opening expenses at its new 40-lane Richmond, Virginia center reduced
the gain.
January, despite mild winter weather that can depress open play, also recorded
increases in games and revenues. Bowl America Short Pump opened January 27,
2006. Its expected contribution may help lessen the impact in this year's
fourth quarter of one fewer week of league bowling and of the reduction in
the number of weeks of business from 14 to 13.
The Company has no long-term debt and the new location was funded by internal
cash and cash flows. Bowl America's Class A Common Stock trades on the
American Stock Exchange under the symbol BWLA. The Company's S.E.C. Form
10-Q is available at the Company's website www.bowlamericainc.com.
BOWL AMERICA INCORPORATED
Results of Operations
(Unaudited)
Thirteen Weeks Ended
01/01/2006 12/26/2004
Operating Revenues
Bowling and other $ 5,367,328 $ 5,033,421
Food, beverage and merchandise sales 2,188,276 2,078,175
__________ __________
7,555,604 7,111,596
Operating expenses excluding
depreciation and amortization 5,756,945 5,519,119
Depreciation and amortization 386,657 402,485
Investment earnings - 151,817
Interest and dividend income 145,969 160,319
Earnings before taxes 1,557,971 1,502,128
Net Earnings $ 1,019,971 $ 950,028
Weighted average shares outstanding 5,136,980 5,137,773
EARNINGS PER SHARE .20 .18
Twenty-six Weeks Ended
01/01/2006 12/26/2004
Operating Revenues
Bowling and other $ 9,928,834 $ 9,256,174
Food, beverage and merchandise sales 4,003,372 3,755,506
__________ __________
13,932,206 13,011,680
Operating expenses excluding
depreciation and amortization 11,463,085 10,683,829
Depreciation and amortization 762,983 803,118
Investment earnings - 151,817
Interest and dividend income 302,320 264,322
Earnings before taxes 2,008,458 1,940,872
Net Earnings $ 1,318,458 $ 1,240,872
Weighted average shares outstanding 5,137,028 5,137,773
EARNINGS PER SHARE .26 .24
SUMMARY OF FINANCIAL POSITION
(Unaudited)
Dollars in Thousands
01/01/2006 12/26/2004
ASSETS
Total current assets including cash and
short-term investments of $10,461 and $13,863 $11,716 $14,785
Property and investments 31,540 27,150
______ ______
TOTAL ASSETS $43,256 $41,935
LIABILITIES AND STOCKHOLDERS'EQUITY
Total current liabilities $ 4,574 $ 3,969
Other liabilities 2,707 2,846
Stockholders' equity 35,975 35,120
______ ______
$43,256 $41,935