FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Quarter Ended April 2, 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 a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12 b-2 of the
Exchange Act. (Check one)
Large Accelerated Filer[ ] Accelerated Filer [ ] Non-accelerated filer [X]
Indicate by a 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
April 30, 2006
Class A Common Stock, 3,668,430
$.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 Thirty-nine Weeks Ended
April 2, March 27, April 2, March 27,
2006 2005 2006 2005
_______________________ _________________________
Operating Revenues
Bowling and other $6,702,057 $6,188,020 $16,630,891 $15,444,194
Food, beverage and
merchandise sales 2,649,269 2,407,933 6,652,641 6,163,439
_________ _________ __________ __________
9,351,326 8,595,953 23,283,532 21,607,633
Operating Expenses
Compensation and benefits 3,490,032 3,220,410 9,942,778 9,282,911
Cost of bowling and other 1,839,786 1,568,584 5,226,841 4,622,675
Cost of food, beverage and
merchandise sales 789,694 690,266 2,059,482 1,877,514
Depreciation and
amortization 417,457 401,514 1,180,440 1,204,632
General and administrative 297,373 195,136 650,869 575,125
_________ _________ __________ __________
6,834,342 6,075,910 19,060,410 17,562,857
Operating Income 2,516,984 2,520,043 4,223,122 4,044,776
Investment Earnings - - - 151,817
Interest and dividend
income 180,236 159,075 482,556 423,397
_________ _________ __________ __________
Earnings before provision
for income taxes 2,697,220 2,679,118 4,705,678 4,619,990
Provision for income taxes 998,000 978,000 1,688,000 1,678,000
_________ _________ __________ __________
Net Earnings $1,699,220 $1,701,118 $ 3,017,678 $ 2,941,990
========= ========= ========= =========
Earnings per share-basic &
diluted $.33 $.33 $.59 $.57
Weighted average shares
outstanding 5,136,925 5,137,773 5,136,993 5,137,773
Dividends paid $719,178 $693,600 $2,157,532 $2,080,800
Per share, Class A $.14 $.135 $.42 $.405
Per share, Class B $.14 $.135 $.42 $.405
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $1,699,220 $1,701,118 $3,017,678 $2,941,990
Other comprehensive
earnings-net of tax
Unrealized gain (loss) on
available for sale
securities 309,267 (287,451) 220,251 171,206
Less: reclassification
adjustment for gain
included in net income - - - (88,687)
_________ _________ _________ _________
Comprehensive earnings $2,008,487 $1,413,667 $ 3,237,929 $3,024,509
========= ========= ========= =========
The operating results for the thirteen (13) and thirty-nine (39) week
periods ended April 2, 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
April 2, 2006 July 3, 2005
________________ _____________
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 2,291,588 $ 1,707,385
Short-term investments 9,587,358 11,273,191
Inventories 643,230 626,452
Prepaid expenses and other 566,283 491,647
Income taxes refundable - 132,467
__________ __________
Total Current Assets 13,088,459 14,231,142
Land, Buildings and Equipment
less accumulated depreciation of
$29,990,183 and $29,056,847 27,386,825 23,440,265
Other Assets
Marketable equity securities(Note 2) 4,614,722 4,208,421
Cash surrender value-life insurance 518,462 516,248
Other long-term assets 93,181 152,922
__________ __________
Total Other Assets 5,226,365 4,877,591
__________ __________
TOTAL ASSETS $45,701,649 $42,548,998
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,075,147 $ 1,130,017
Accrued expenses 678,699 1,127,639
Dividends payable 719,177 719,177
Income taxes payable 140,712 -
Other current liabilities 2,688,544 372,932
Current deferred income taxes 247,936 247,936
__________ __________
Total Current Liabilities 5,550,215 3,597,701
Long-term Deferred Compensation 71,475 71,475
Noncurrent Deferred Income Taxes 2,817,349 2,688,160
__________ __________
TOTAL LIABILITIES 8,439,039 6,357,336
__________ __________
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 -
3,668,430 and 3,669,311 shares 366,843 366,932
Class B issued and outstanding -
1,468,462 146,846 146,846
Additional paid-in capital 7,480,615 7,479,072
Accumulated other comprehensive
earnings-Unrealized gain on
available-for-sale securities,
net of tax 2,414,965 2,194,714
Retained earnings 26,853,341 26,004,098
__________ __________
TOTAL STOCKHOLDERS' EQUITY $37,262,610 $36,191,662
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $45,701,649 $42,548,998
========== ==========
<FN>
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED APRIL 2, 2006 AND MARCH 27, 2005
(Unaudited)
April 2, March 27,
2006 2005
Cash Flows From Operating Activities:
Net earnings $3,017,678 $2,941,990
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,180,440 1,204,632
Gain on sale of available-for-sale
securities - (151,817)
Changes in assets and liabilities
(Increase) decrease in inventories (16,778) 72,717
(Increase) decrease in prepaid
expenses & other (82,871) 175,596
Decrease in other long-term assets 57,527 46,306
(Decrease) increase in accounts payable (54,870) 22,934
Decrease in accrued expenses (448,940) (95,434)
Increase in income taxes payable 273,179 462,166
Increase in other current liabilities 2,315,612 2,294,790
_________ _________
Net cash provided by operating activities $6,240,977 $6,973,880
_________ _________
Cash flows from investing activities
Expenditures for land,buildings,equip (5,127,000) (1,685,376)
Net sales (purchases) of short-term
investments 1,628,972 (1,625,351)
Proceeds from sale of marketable
securities - 252,525
_________ _________
Net cash used in investing activities (3,498,028) (3,058,202)
_________ _________
Cash flows from financing activities
Payment of cash dividends (2,157,532) (2,080,800)
Purchase of Class A common stock (1,214) -
_________ _________
Net cash used in financing activities (2,158,746) (2,080,800)
_________ _________
Net Increase in Cash and Equivalents 584,203 1,834,878
Cash and Equivalents, Beginning of Period 1,707,385 1,320,643
_________ _________
Cash and Equivalents, End of Period $2,291,588 $3,155,521
========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $1,414,821 $1,069,477
Non-cash Investing and Financing Activities:
Settlement of employee stock loan by
acquisition of employee-owned stock $2,845 -
Repayment of employee loans by acquisiton
of employee-owned 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 Thirty-nine Weeks Ended
April 2, 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 April 2, 2006, the fair value of
these securities was $4,614,722, with an original cost of $757,074, resulting
in an unrealized gain of $3,857,668. The telecommunications stocks included
in the portfolio as of April 2, 2006 were:
45,580 shares of AT&T/SBC 3,946 shares of Alltel
220 shares of Agere 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 April 2, 2006, contracts relating to the construction and equipping of Bowl
America Short Pump in Richmond, Virginia, totaled approximately $4,916,000, of
which approximately $4,694,000 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 April 2, 2006, increased the contract amount
to $1,240,000, of which $1,178,000 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. 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 to approximately
$3,096,000, of which approximately $2,936,000 had been paid at April 2, 2006.
In July 2005, the Company placed purchase orders totaling $438,000 for bowling
equipment including pins. At April 2, 2006, all equipment and pins had been
received and the contract paid in full.
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 fisal 2006. Payment in full for the equipment, currently being
installed has been made.
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. Employee Benefit Plans
The Company has two defined contribution plans with Company contributions
determined by the Board of Directors. The Company has no defined benefit
plan or postretirement plan.
5. 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 OPERATION
LIQUIDITY AND CAPITAL RESOURCES
Short-term investments consisting mainly of U.S. Treasury Bills and Notes, and
cash totaled $11,879,000 at the end of the third quarter of fiscal 2006, or
$1,101,000 lower than at the beginning of the fiscal year as funds were used
for the construction and equipping of Bowl America Short Pump. Short-term
investments and cash increased $1,418,000 during the third quarter, primarily
from operations and league prize fund deposits, explained below under current
liabilities, and reflect the seasonal nature of the business, which is strongest
from September through May.
During the nine-month month period ended April 2, 2006, the Company expended
approximately $788,000 for the purchase of bowling and restaurant equipment and
some amusement games as existing locations were upgraded. Through April 2,
2006, approximately $4,339,000 of the estimated $5 million cost had been paid
toward the construction of Bowl America Short Pump in Henrico County, Virginia,
which opened January 27, 2006. The table below summarizes all purchase
obligations as of April 2, 2006 and includes approximately $450,000 for
completion of contracts related to Short Pump.
The Company is actively seeking property for the development of additional
bowling centers. The Company has no third-party sources of funding. Cash and
cash flow are sufficient to finance all contemplated purchases and
construction. The Company's holdings of marketable equity securities,
primarily consisting of telecommunications stocks, are another potential
source of expansion capital.
These marketable securities are carried at their fair value on the last day of
the quarter. For the three-month period ended April 2, 2006, the market value
increased by $523,000 to approximately $4,615,000.
Contractual Total Less Than 1-3 3-5 More Than
obligations 1 Year Years Years 5 Years
Operating lease
obligations $1,333,866 $ 272,560 $545,120 $237,520 $278,666
Purchase
obligations $ 472,977 $ 472,977
Total $1,806,843 $ 745,537 $545,120 $237,520 $278,666
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 April 2, 2006 approximately
$2,358,000 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 March 28, 2006, 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 May 2, 2006,
payable May 17, 2006.
RESULTS OF OPERATIONS
Nineteen centers were in operation for most of the quarter ended April 2, 2006
as Bowl America Short Pump opened January 27, 2006. Eighteen centers were in
operation in last year's three-month and nine-month periods. All comparisons
of current periods to prior year periods are affected by the change in the
number of operating locations. Net earnings of $1,699,220 and $1,701,118 for
the quarters ended April 2, 2006, and March 27, 2005, respectively, resulted
in per share earnings of $.33 for both of the thirteen-week periods. For the
current thirty-nine week period net earnings were $3,017,678 or $.59 per share
compared to $2,941,990 or $.57 per share for the comparable period a year ago.
The prior year thirty-nine week earnings includes a gain on the sale of AT&T
Wireless stock, shown in the investment earnings category, of $151,817 or $.02
per share.
Total operating revenues increased $755,000 or 9% in the current year quarter
and decreased $187,316 or 2% in the three-month period ended March 27, 2005.
For the current fiscal nine-month period operating revenues were up $1,675,899
or 8% versus a decrease of $628,328 or 3% in the comparable nine-month period
a year ago. Increases of $514,000 and $1,187,000 in operating revenues from
bowling and other resulted in an 8% hike in both the quarter and year-to-date
periods ended April 2, 2006, respectively. The prior year comparable three
and nine month period revenues showed decreases of 1% or $74,000 and 2% or
$307,000, respectively.
Food, beverage and merchandise sales were up $241,000 or 10% in the current
year quarter and up $489,000 or 8% in the nine-month period, versus declines
in the prior year of $113,000 or 4% and $321,000 or 5% for the quarter and
year-to-date, respectively.
Operating expenses were up $758,000 or 12% and $1,498,000 or 8% in the current
three-month and nine-month periods, respectively, versus a decrease of $124,000
or 2% and $545,000 or 3% in the three and nine-month periods last year. Pre-
opening expenses for Bowl America Short Pump contributed to the current
quarter and year-to-date costs.
Employee compensation and benefits were up $270,000 or 8% in the current three-
month period and up $660,000 or 7% in the nine-month period. In the prior
fiscal year this category showed declines of $67,000 or 2% and $346,000 or 4%
for the comparable periods, respectively. The current year growth in traffic
and the Short Pump location resulted in higher payroll costs. An 8% increase
in health insurance costs due primarily to higher premiums at renewal also
contributed to the current year increase. The Company has two employee
benefit plans, a profit sharing plan and an employee stock ownership plan,
both of which are defined contribution plans.
Cost of food, beverage and merchandise sales increased $99,000 or 14% in the
quarter and $182,000 or 10% in the nine-month period primarily due to higher
sales. Cost of bowling and other services increased $604,000 or 13% in the
nine-month period ended April 2, 2006 and decreased $26,000 or 1% in the
comparable period last year. Maintenance and repair costs were up $188,000 or
37% in the nine-month period ended April 2, 2006, due, in large part, to major
plumbing related repairs. In the nine-month period ended March 27, 2005, this
same category was down 16% partially due to the elimination of lane refinishing
costs. Advertising costs during the current thirty-nine week period increased
$51,000 or 10% versus an increase of $135,000 or 41% in the prior year
comparable period. Utility costs for the quarter were up $47,000 or 15% and
$148,000 or 16% for the three and nine-month periods ended April 2, 2006,
respectively versus an increase of $20,000 or 7% and $35,000 or 3%,
respectively, for the comparable periods last year. Bowling supplies and
services costs were up 7% for the nine-month period compared to an 3% decrease
in the prior year nine-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 10% through the nine-month period ended April 2, 2006, compared
to a 9% decrease in the nine-month period a year ago.
Depreciation and amortization expense decreased 2% 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 increased 14% in the nine-month ended April 2,
2006, as increasingly higher rates have partially offset lower investment
balances.
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 $9,559,000 and $13,320,000 at April 2, 2006 and March 27,
2005, 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 April 2, 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 April 2, 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 April 2, 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
April 2, 2006
PART II - OTHER INFORMATION
Item 6 - Exhibits
(a) Exhibits
(furnished herein)
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 May 16, 2006
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 16, 2006 Leslie H. Goldberg
Date President
May 16, 2006 Cheryl A. Dragoo
Date Controller
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 effectivness 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 the internal control over financial reporting,
to the registrant's auditors and the audit committee of the 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 control 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: May 16, 2006 Leslie H. Goldberg
Chief Executive Officer
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 15d-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 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 effectivness 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 the internal control over financial reporting,
to the registrant's auditors and the audit committee of the 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 control 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: May 16, 2006 Cheryl A. Dragoo
Chief Financial Officer
Exhibit 32
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 quarter ended April 2,
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: May 16, 2006
Exhibit 20
Exhibit 20 to Form 10-Q Press Release issued May 16, 2006
For Immediate Release May 16, 2006
FLAT QUARTER AT BOWL AMERICA
Bowl America Incorporated earned $.59 per share for the first nine months of
its current fiscal year and $.33 in its most recent quarter, compared to $.57
and $.33, respectively, in the prior year. Because Easter was celebrated
later this year, school holidays, which produce increased customer traffic,
were delayed until April. The Company's 19th center opened in January 2006
at Short Pump near Richmond, Virginia. It recouped its opening expenses and
was cash flow positive for the quarter.
A strong tournament schedule and the contribution from the new location are
not expected to offset the combined effect of an additional week of winter
league bowling and the earnings from the 14th week, both recorded in last
year's fourth quarter.
The $.14 quarterly dividend being paid tomorrow will make this the 34rd
consecutive year of increased per share dividends.
Bowl America Class A Common Stock trades on the American Stock Exchange with
the symbol BWLA. The Company's S.E.C. Form 10-Q is available at the Company's
web site www.bowlamericainc.com.
***
BOWL AMERICA INCORPORATED
Results of Operations
(Unaudited)
Thirteen Thirteen Thirty-nine Thirty-nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
04/02/06 03/27/05 04/02/06 03/27/05
Operating Revenues
Bowling and other $6,702,057 $6,188,020 $16,630,891 $15,444,194
Food,beverage and
merchandise sales 2,649,269 2,407,933 6,652,641 6,163,439
_________ _________ __________ __________
9,351,326 8,595,953 23,283,532 21,607,633
Operating Expenses
excluding deprec-
iation and amorti-
zation 6,416,885 5,674,396 17,879,970 16,358,225
Depreciation and
amortization 417,457 401,514 1,180,440 1,204,632
Investing earnings - - - 151,817
Interest & dividend
income 180,236 159,075 482,556 423,397
Earnings before taxes 2,697,220 2,679,118 4,705,678 4,619,990
Net Earnings $1,699,220 $1,701,118 $ 3,017,678 $ 2,941,990
Weighted average
shares outstanding 5,136,925 5,137,773 5,136,993 5,137,773
EARNINGS PER SHARE .33 .33 .59 .57
***
SUMMARY OF FINANCIAL POSITION
(Unaudited)
Dollars in Thousands
04/02/06 03/27/05
ASSETS
Total current assets including cash and
short-term investments of $11,879 and $16,476 $ 13,088 $ 17,406
Property and investments 32,614 26,850
______ ______
TOTAL ASSETS $ 45,702 $ 44,256
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 5,550 $ 5,738
Other liabilities 2,889 2,678
Stockholders' equity 37,263 35,840
______ ______
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 45,702 $ 44,256