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, 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 if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. YES[ ] NO[X]
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 12b-2 of the
Exchange Act.
Large Accelerated Filer[ ] Accelerated Filer [ ] Non-Accelerated Filer [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 28, 2007
Class A Common Stock, 3,668,386
$.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
December 31, January 1, December 31, January 1,
2006 2006 2006 2006
_______________________ __________________________
Operating Revenues
Bowling and other $5,906,620 $5,367,328 $11,038,265 $ 9,928,834
Food, beverage and
merchandise sales 2,370,480 2,188,276 4,380,797 4,003,372
_________ _________ __________ __________
8,277,100 7,555,604 15,419,062 13,932,206
Operating Expenses
Compensation and benefits 3,537,441 3,267,717 6,975,308 6,452,746
Cost of bowling and other 1,753,727 1,618,129 3,537,385 3,341,794
Cost of food, beverage and
merchandise sales 724,812 688,937 1,319,821 1,269,788
Depreciation and
amortization 474,361 386,657 954,827 762,983
General and administrative 238,576 182,162 455,124 398,757
_________ _________ __________ __________
6,728,917 6,143,602 13,242,465 12,226,068
Operating Income 1,548,183 1,412,002 2,176,597 1,706,138
Interest and dividend
income 264,680 145,969 422,409 302,320
_________ _________ __________ __________
Earnings before provision
for income taxes 1,812,863 1,557,971 2,599,006 2,008,458
Provision for income taxes 634,500 538,000 906,500 690,000
_________ _________ __________ __________
Net Earnings $1,178,363 $1,019,971 $ 1,692,506 $ 1,318,458
========= ========= ========= =========
Earnings per share-basic &
diluted $.23 $.20 $.33 $.26
Weighted average shares
outstanding 5,136,866 5,136,980 5,136,879 5,137,028
Dividends paid $719,165 $719,177 $1,438,330 $1,438,354
Per share, Class A $.14 $.14 $.28 $.28
Per share, Class B $.14 $.14 $.28 $.28
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $1,178,363 $1,019,971 $ 1,692,506 $1,318,458
Other comprehensive
earnings-net of tax
Unrealized (loss) gain on
available for sale
securities 249,764 (44,365) 545,012 (89,016)
Add: reclassification
adjustment for loss
included in net income 2,373 - 2,373
_________ _________ _________ _________
Comprehensive earnings $1,430,500 $ 975,606 $ 2,239,891 $1,229,442
========= ========= ========= =========
The operating results for the thirteen (13) and twenty-six (26) week
periods ended December 31, 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
-----------------------------------
December 31, 2006 July 2, 2006
________________ _____________
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 1,860,428 $ 1,055,687
Short-term investments 9,130,788 7,990,636
Inventories 704,868 625,467
Prepaid expenses and other 884,090 1,046,908
Income taxes refundable 142,673 172,873
Current deferred income taxes 46,910 46,910
__________ __________
Total Current Assets 12,769,757 10,938,481
Land, Buildings and Equipment
Net of accumulated depreciation of
$31,182,926 and $30,376,171 26,469,739 27,053,704
Other Assets
Marketable equity securities(Note 2) 5,330,164 4,540,061
Cash surrender value-life insurance 477,878 505,664
Other long-term assets 95,680 92,475
__________ __________
Total Other Assets 5,903,722 5,138,200
---------- ----------
TOTAL ASSETS $45,143,218 $43,130,385
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 667,126 $ 910,550
Accrued expenses 865,764 1,214,780
Dividends payable 744,849 719,165
Other current liabilities 1,876,081 395,919
__________ __________
Total Current Liabilities 4,153,820 3,240,414
Long-term Deferred Compensation 66,221 66,221
Noncurrent Deferred Income Taxes 3,057,018 2,734,796
---------- ----------
TOTAL LIABILITIES 7,277,059 6,041,431
__________ __________
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 -
3,668,386 and 3,668,430 shares 366,839 366,843
Class B issued and outstanding -
1,468,462 shares 146,846 146,846
Additional paid-in capital 7,480,550 7,480,615
Unrealized gain on securities
available-for-sale, 2,887,919 2,338,565
Retained earnings 26,984,005 26,756,085
__________ __________
TOTAL STOCKHOLDERS' EQUITY $37,866,159 $37,088,954
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $45,143,218 $43,130,385
========== ==========
<FN>
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 31, 2006 and JANUARY 1, 2006
December 31, January 1,
2006 2006
Cash Flows From Operating Activities:
Net earnings $1,692,506 $1,318,458
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 954,827 762,983
Loss on sale of available-for-sale
securities 3,612 -
Changes in assets and liabilities
Increase in inventories (79,401) (83,472)
Decrease in prepaid
expenses & other 162,818 62,040
Decrease in income taxes refundable 30,200 9,000
(Increase) decrease in other long-term
assets (3,205) 63,528
(Decrease) increase in accounts payable (243,424) 87,185
Decrease in accrued expenses (349,016) (484,417)
Increase in other current liabilities 1,480,162 1,373,683
_________ _________
Net cash provided by operating activities $3,649,079 $3,108,988
_________ _________
Cash flows from investing activities
Expenditures for land,buildings & equip (370,862) (4,165,426)
Net sales & maturities of short-term
investments (1,081,237) 1,744,507
Proceeds from sale of marketable
securities 18,946 -
Decrease in cash surrender value 27,786 -
_________ _________
Net cash used in investing activities (1,405,367) (2,420,919)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,438,330) (1,438,354)
Purchase of Class A Common Stock (641) -
_________ _________
Net cash used in financing activities (1,438,971) (1,438,354)
_________ _________
Net Increase (Decrease) in Cash and
Equivalents 804,741 (750,285)
Cash and Equivalents, Beginning of Period 1,055,687 1,707,385
_________ _________
Cash and Equivalents, End of Period $1,860,428 $ 957,100
========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 876,300 $ 681,000
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
December 31, 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 2, 2006
has been derived from the Company's July 2, 2006 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 2, 2006.
2. Marketable Equity Securities
Marketable equity securities are carried at fair value in accordance
with the provisions of SFAS No. 115. During the quarter ended December 31,
2006, the Company sold its holding in Lucent Technologies for $18,946,
incurring a loss of $3,612. At December 31, 2006, the fair value of
securities held was $5,330,164, with an original cost of $734,495, resulting
in an unrealized gain of $4,595,669.
The telecommunications stocks included in the portfolio as of December 31,
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
9,969 shares of Qwest Communications
40,000 shares of Sprint/Nextel
18,784 shares of Verizon
11,865 shares of Vodafone/AirTouch
3. Commitments and Contingencies
The Company's purchase commitments at December 31, 2006, are for materials,
supplies, services and equipment as part of the normal course of business.
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 other postretirement plan.
5. Reclassifications
Certain previous year 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
December 31, 2006
Liquidity and Capital Resources
Short-term investments, consisting mainly of U.S. Treasury Bills and Notes,
and cash totaled $10,991,000 at the end of the second quarter of fiscal 2007
or $1,546,000 higher than at the beginning of the quarter and $1,945,000
higher than at the beginning of the fiscal year. The increased funds result
primarily from operations, which reflects the seasonal nature of the business
that is strongest September through May.
In the six-month period ended December 31, 2006, the Company expended
approximately $371,000 for purchase of equipment, point-of-sale cash systems
and replacement of some amusement games. The Company is actively seeking
property for additional locations. The Company has made no application for
third party funding as cash and cash flow are sufficient to finance all
currently contemplated purchases and to meet short-term commitments. The
table below summarizes these obligations as of December 31, 2006. The Company
has also maintained its fiscal year end 2006 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. For the three-month period ended December 31, 2006, the market
value increased by $376,000 to approximately $5,330,000.
Contractual Total Less Than 1 1-3 3-5 More Than 5
obligations Year Years Years Years
Operating lease
obligations $ 944,727 $ 272,459 $283,601 $176,000 $212,667
Purchase
obligations - - - - -
Total $ 944,727 $ 272,459 $283,601 $176,000 $212,667
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 December 31, 2006,
approximately $1,623,000 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.
As a result of its most recent review, on December 5, 2006, the Board of
Directors declared a cash dividend of $.145 per share on its Class A and
Class B stock to holders of record on January 10, 2007, payable February 14,
2007.
RESULTS OF OPERATIONS
The Company opened Bowl America Short Pump in late January 2006. Nineteen
centers were in operation in the current year three and six month periods and
eighteen centers were in operation in the prior year comparable periods. All
comparisons in this report are affected by the change in the number of
locations in operation in the periods. The operating results for fiscal 2007
periods included in this report are not necessarily indicative of results to
be expected for the year.
Net earnings were $1,178,363 or $.23 per share for the thirteen-week period
ended December 31, 2006, and $1,019,971 or $.20 per share for the thirteen
weeks ended January 1, 2006. For the current twenty-six week period net
earnings per share were $1,692,506 or $.33 compared to $1,318,458 or $.26 for
the comparable period a year ago.
Total operating revenues increased $722,000 or 9% in the current year quarter
and increased $444,000 or 6% in the three-month period ended January 1, 2006.
For the current fiscal six-month period operating revenues were up $1,487,000
or 11% versus an increase of $920,000 or 7% in the comparable six-month period
a year ago. Bowling and other revenue increased $539,000 and $1,109,000 or
10% and 11% in the quarter and year-to-date period ended December 31, 2006,
respectively. Prior year comparable three and six month period revenues
showed increases of $334,000 and $673,000, respectively, a 7% hike for both
periods. In addition to the business from the new center, increases in traffic
at like centers contributed to favorable revenue comparisons.
Food, beverage and merchandise sales were up $182,000 or 8% in the current
year quarter and up $377,000 or 9% in the six-month period. Cost of sales
increased 5% and 4% in the respective three and six month periods.
Operating expenses were up $585,000 or 9% and $1,016,000 or 8% in the current
three-month period and six-month periods, respectively, versus an increase of
$222,000 or 4% and $739,000 or 6% in the three and six month periods last
year. Employee compensation and benefits were up $270,000 and $523,000
equaling an 8% increase in both the current year three and six-month periods.
In the prior year comparable periods the category was up $168,000 and $390,000
or 5% and 6%, respectively.
Cost of bowling and other services increased $196,000 or 6% and $316,000 or
10% in the six-month periods ended December 31, 2006, and January 1, 2006.
Maintenance and repair costs were down $21,000 or 5% in the fiscal 2007 six-
month period and were up $124,000 or 39% in the six-month period ended
January 1, 2006, due, in large part, to major plumbing related repairs.
Advertising costs during the current and prior year twenty-six week period
decreased 11% and 4%, respectively. Utility costs for the quarter were down
$13,000 or 4% and up $72,000 or 26% for the three month periods ended
December 31, 2006 and January 1, 2006, respectively. In the six-month current
and prior year periods utility costs were up $39,000 or 5% and $101,000 or 17%.
Supplies and services expenses increased 28% for the current year three-month
period and 18% in last year's three-month period. The fiscal 2007 increase is
partially related to costs associated with the new point-of-sale cash systems.
Rent expense decreased 2% in the current year to date period and 10% in the
prior year comparable period due primarily to lower common area maintenance
fees. Insurance expense excluding health insurance decreased 6% in the
current year to date period versus an increase of 6% in last year's comparable
period.
Depreciation and amortization expense increased 25% in the current year six-
month period due mainly to the additional assets at Short Pump and decreased
5% in the comparable period last year.
Interest and dividend income increased $120,000 in the fiscal 2007 year-to-
date period and includes a special dividend of $38,000 paid by Vodafone.
Higher investment balances and interest rates also contributed to the current
year increase. In the prior year comparable period interest and dividend
income was up $38,000.
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 $9,131,000 and $9,504,000 at quarters ending
December 31, 2006 and January 1, 2006, 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 December 31, 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 December 31,
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 December 31, 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
December 31, 2006
PART II - OTHER INFORMATION
Item 1A. Risk Factors
Item 1A ("Risk Factors") of the Company's Annual Report on Form 10-K for the
fiscal year ended July 2, 2006, seets forth information relating to important
risks and uncertainties that could materially adversely affect the Company's
business, financial condition or operating results. Those risk factors
continue to be relevant to an understanding Company's business,
financial condition and operating results. There are no material changes in
such risk factors to report.
Item 4 - Submission of Matters to a Vote of Security Holders
At the annual meeting held December 5, 2006, the Class A shareholders approved
the appointment of Director Warren T. Braham for a one year period to expire
at the 2007 Annual Meeting. The votes were cast as follows:
For 3,358,291 Withheld 7,067
At the annual meeting held December 5, 2006, the Class A shareholders approved
the appointment of Director Allan L. Sher for a one year period to expire at
the 2007 Annual Meeting. The votes were cast as follows:
For 3,365,164 Withheld 194
At the annual meeting held December 5, 2006, 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 5, 2006 meeting, for a one year period to expire at the 2007
Annual Meeting. The votes were cast as follows:
For 14,044,730 Withheld 0
Item 6 - Exhibits
3 (a) Articles of Incorporation of the Registrant and amendments
through December 1988 thereto (Incorporated by reference from
exhibit 3 to the Annual Report for 1989 on Form 10-K for fiscal
year ended July 2, 1989)
3 (b) Amendment to and restatement of Article FIFTH (b) III 2.2 of the
Registrant's Articles of Incorporation (Incorporated by reference
from the Registrant's Form 8-K filed December 9, 1994)
3 (c) By-laws of the Registrant (Incorporated by reference from exhibit
3 to the Annual Report for 1989 on Form 10-K for fiscal year ended
July 2, 1989)
20 Press release issued February 13, 2007 (furnished herewith)
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
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 13, 2007 By: Leslie H. Goldberg
Leslie H. Goldberg, President
Date: February 13, 2007 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 13, 2007 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 13, 2007 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 December 31,
2007, (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 13, 2007
EXHIBIT 20
Exhibit 20 to FORM 10-Q Press Release issued February 13, 2007
SECOND QUARTER EARNINGS IMPROVE
Bowl America Incorporated today reported fiscal year 2007 second quarter net
earnings increased to $.23 per share from $.20 in the prior year comparable
quarter. Six-month earnings per share were $.33 and $.26 for the current and
prior year, respectively.
Open play at both full and promotional prices continued to fill times
previously devoted to leagues. Empty lanes are like empty seats on a plane.
If they are not filled, the revenue is lost forever. Cash flow benefited
from both earnings and depreciation at the Company's newest center, which
opened in January 2006.
Tomorrow the Company will pay a quarterly dividend of $.145 per share, an
increase over the prior year's quarterly payment. This is expected to be
Bowl America's 35th consecutive year of dividend increases. 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
12/31/2006 01/01/2006
Operating Revenues
Bowling and other $ 5,906,620 $ 5,367,328
Food, beverage and merchandise sales 2,370,480 2,188,276
__________ __________
8,277,100 7,555,604
Operating expenses excluding
depreciation and amortization 6,254,556 5,756,945
Depreciation and amortization 474,361 386,657
Interest and dividend income 264,680 145,969
Earnings before taxes 1,812,863 1,557,971
Net Earnings $ 1,178,363 $ 1,019,971
Weighted average shares outstanding 5,136,866 5,136,980
EARNINGS PER SHARE .23 .20
Twenty-six Weeks Ended
12/31/2006 01/01/2006
Operating Revenues
Bowling and other $11,038,265 $ 9,928,834
Food, beverage and merchandise sales 4,380,797 4,003,372
__________ __________
15,419,062 13,932,206
Operating expenses excluding
depreciation and amortization 12,287,638 11,463,085
Depreciation and amortization 954,827 762,983
Interest and dividend income 422,409 302,320
Earnings before taxes 2,599,006 2,008,458
Net Earnings $ 1,692,506 $ 1,318,458
Weighted average shares outstanding 5,136,879 5,137,028
EARNINGS PER SHARE .33 .26
SUMMARY OF FINANCIAL POSITION
(Unaudited)
Dollars in Thousands
12/31/2006 01/01/2006
ASSETS
Total current assets including cash and
short-term investments of $10,991 and $10,461 $12,770 $11,716
Property and investments 32,373 31,540
______ ______
TOTAL ASSETS $45,143 $43,256
LIABILITIES AND STOCKHOLDERS'EQUITY
Total current liabilities $ 4,154 $ 4,574
Other liabilities 3,123 2,707
Stockholders' equity 37,866 35,975
______ ______
$45,143 $43,256