FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
QUARTER ENDED: SEPTEMBER 30, 2007 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 checkmark if the registrant is well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes__ NO X
Indicate by a 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-2of 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 last practicable date.
Shares Outstanding at
October 28, 2007
Class A Common Stock,
$.10 par value 3,667,228
Class B Common Stock,
$.10 par value 1,468,462
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Thirteen Weeks Ended
September 30, October 1,
2007 2006
Operating Revenues:
Bowling and other $4,737,705 $5,131,645
Food, beverage and merchandise sales 1,834,747 2,010,317
_________ _________
6,572,452 7,141,962
Operating Expenses:
Employee compensation and benefits 3,429,689 3,437,867
Cost of bowling and other services 1,703,517 1,783,658
Cost of food, beverage and merchandise sales 561,761 595,009
Depreciation and amortization 458,235 480,466
General and administrative 260,626 216,548
_________ _________
6,413,828 6,513,548
Operating Income 158,624 628,414
Interest and dividend income 208,564 157,729
_________ _________
Earnings before provision for income taxes 367,188 786,143
Provision for Income Taxes 128,300 272,000
_________ _________
Net Earnings $ 238,888 $ 514,143
========= =========
Earnings per share-basic and diluted $ .05 $.10
Weighted average shares outstanding 5,135,704 5,136,892
Dividends paid $ 744,679 $ 719,165
Per share, dividends paid, Class A $.145 $.14
Per share, dividends paid, Class B $.145 $.14
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Unaudited)
Net Earnings $ 238,888 $ 514,143
Other comprehensive earnings, net of tax
Unrealized gain on available-for
-sale securities 73,833 295,248
_________ ________
Comprehensive earnings $ 312,721 $ 809,391
========= ========
The operating results for the thirteen (13) week period ending September 30,
2007 are not necessarily indicative of results to be expected for the year.
See notes to condensed consolidated financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of
September 30, July 1,
2007 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,330,704 $ 1,547,345
Short-term investments 8,756,530 9,945,104
Inventories 720,762 581,705
Prepaid expenses and other 1,261,955 1,067,523
Income taxes refundable - 36,555
Current deferred income taxes 29,154 29,154
__________ __________
TOTAL CURRENT ASSETS 13,099,105 13,207,386
LAND, BUILDINGS & EQUIPMENT
Net of accumulated depreciation of
$32,339,477 and $31,881,242 25,642,654 25,887,241
OTHER ASSETS:
Marketable equity securities 6,218,625 6,141,324
Cash surrender value-life insurance 504,313 502,099
Other 96,380 96,680
__________ __________
TOTAL OTHER ASSETS 6,819,318 6,740,103
TOTAL ASSETS $45,561,077 $45,834,730
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 663,745 $ 919,297
Accrued expenses 871,064 1,067,203
Dividends payable 744,679 744,679
Income taxes payable 20,146 -
Other current liabilities 877,382 330,372
__________ __________
TOTAL CURRENT LIABILITIES 3,177,016 3,061,551
LONG-TERM DEFERRED COMPENSATION 59,224 59,224
NONCURRENT DEFERRED INCOME TAXES 3,419,996 3,376,718
__________ __________
TOTAL LIABILITIES 6,656,236 6,497,493
__________ __________
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 a share:
Authorized, 10,000,000 shares
Class A issued and outstanding
3,667,228 and 3,667,254 shares 366,722 366,725
Class B issued and outstanding
1,468,462 shares 146,846 146,846
Additional paid-in capital 7,478,838 7,478,876
Accumulated other comprehensive earnings-
Unrealized gain on available-for-sale
securities, net of tax 3,442,025 3,368,192
Retained earnings 27,470,410 27,976,598
__________ __________
TOTAL STOCKHOLDERS'EQUITY 38,904,841 39,337,237
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $45,561,077 $45,834,730
========== ==========
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Thirteen Weeks Ended
September 30, October 1,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 238,888 $ 514,143
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 458,235 480,466
Changes in assets and liabilities
Increase in inventories (139,057) (177,918)
(Increase) decrease in prepaid & other (194,432) 199,014
Decrease in income taxes refundable 36,555 172,873
Increase in income taxes payable 20,146 31,127
Decrease (increase) in other
long-term assets 300 (2,919)
Decrease in accounts payable (255,552) (96,505)
Decrease increase in accrued expenses (196,139) (414,932)
Increase in other current liabilities 547,010 539,347
_________ _________
Net cash provided by
operating activities 515,954 1,244,696
_________ _________
Cash flows from investing activities
Expenditures for land, buildings and equip (213,648) (181,418)
Net sales and maturities of short-term
investments 1,228,384 347,015
Increase in cash surrender value (2,214) -
_________ _________
Net cash provided by investing activities 1,012,522 165,597
_________ _________
Cash flows from financing activities
Payment of cash dividends (744,679) (719,165)
Purchase of Class A Common Stock (438) -
_________ _________
Net cash used in financing activities (745,117) (719,165)
_________ _________
Net Increase in Cash and Equivalents 783,359 691,128
_________ _________
Cash and Equivalents, Beginning of quarter 1,547,345 1,055,687
_________ _________
Cash and Equivalents, End of quarter $2,330,704 $1,746,815
========= =========
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Quarter for
Income taxes $ 71,300 $ 68,000
See notes to condensed consolidated financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Thirteen Weeks Ended
September 30, 2007
(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 1, 2007 has been derived
from the Company's July 1, 2007 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 1, 2007.
2. Marketable Equity Securities
Marketable equity securities, available for sale, are carried at fair
value in accordance with the provisions of SFAS No. 115. At September 30,
2007, the fair value of these securities was $6,218,625, with an original
cost of $734,495, resulting in an unrealized gain of $5,484,129.
The telecommunications stocks included in the portfolio as of September 30,
2007 were:
3,946 shares of Alltel 45,580 shares of AT&T
669 shares of Avaya 2,000 shares of Embarq
939 shares of Idearc 475 Shares of LSI
9,969 shares of Qwest Communications 40,000 shares of Sprint
18,784 shares of Verizon 11,865 shares of Vodafone
4,079 shares of Windstream
3. Commitments and Contingencies
In February 2007, the Company temporarily closed an existing bowling
center in Falls Church, Virginia when its roof was damaged by an ice storm.
The center remains closed for repairs that are currently in progress. The
date of reopening remains uncertain. The Company has business interruption
insurance that management believes will cover the lost income of the center
while repairs are being made. At September 30, 2007, no final settlement of
the loss has taken place. The Company believes that the reasonable estimate
for the amount to be recovered is at least $640,000 from the date of the roof
damage through September 30, 2007. Of this amount, $440,000 was recognized as
revenue in the prior fiscal year. The remaining $200,000 has been recognized
as revenue in the quarter ended September 30, 2007 and a receivable for that
amount has been included in the category Prepaid expenses and other on the
Consolidated Balance Sheets at September 30, 2007. The estimate was based on
the average yearly percentage change in revenues between 2008 and 2007
comparable fiscal quarters multiplied by the prior year earnings of that
center.
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. Recent Accounting Pronouncements
In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in
Income Taxes - an interpretation of FASB Statement No. 109, Accounting for
Income Taxes ("FIN 48"). The interpretation addresses the determination of
whether tax benefits claimed or expected to be claimed on a tax return should
be recorded in the financial statements. Under FIN 48, the Company may
recognize the tax benefit from an uncertain tax position only if it is more
likely than not that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the tax position. The
tax benefits recognized in the financial statements from such tax position
should be measured based on the largest benefit that has a greater than fifty
percent likelihood of being realized upon ultimate settlement. FIN 48 also
provides guidance on derecognition, classification, interest and penalties on
income taxes, accounting in interim periods, and requires increased disclosures.
The Company adopted the provisions of FIN 48 on July 2, 2007. There was no
impact upon adoption.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
(SFAS 157), which provides guidance on how to measure assets and liabilities
that use fair value. SFAS 157 will apply whenever another U.S. GAAP standard
requires assets or liabilities to be measured at fair value, but does not
expand the use of fair value to new circumstances. This standard also will
require additional disclosures in both annual and quarterly reports. The
Company will adopt SFAS 157 in July 2008. The Company is currently evaluating
the potential impact this standard may have on its financial position and
results of operations.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an amendment of FASB
Statement No. 115" (SFAS 159). Under SFAS 159, entities may elect to measure
eligible items at fair value on a contract-by-contract basis, with changes in
fair value recognized in earnings each reporting period. The election, called
the fair value option, will enable entities to achieve an offset accounting
effect for changes in fair value of certain related assets and liabilities
without having to apply complex hedge accounting provisions. The Company will
be permitted to adopt SFAS 159 in July 2008. The Company is currently
evaluating the potential impact this standard may have on its financial
position and results of operations.
6. Reclassifications
Certain previous year amounts have been reclassified to conform with
current year presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Short-term investments, consisting mainly of U.S. Treasury Bills and Notes,
and cash totaled $11,087,000 at the end of the first quarter of fiscal 2008 or
$405,000 lower than at the beginning of the quarter. The decrease in funds
primarily reflects the seasonal nature of the business where typically the
summer quarter is the slowest.
In the three-month period ended September 30, 2007, the Company expended
approximately $214,000 for purchase of bowling and restaurant equipment. 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
September 30, 2007.
- ------------------------------------------------------------------------------
Contractual Total Less Than 1-3 3-5 More Than
obligations 1 Year Years Years 5 Years
______________________________________________________________________________
Operating lease
obligations $ 740,383 $ 241,716 $176,000 $176,000 $146,667
Purchase
obligations -
______________________________________________________________________________
Total $ 740,383 $ 241,716 $176,000 $176,000 $146,667
==============================================================================
The Company's holdings of marketable equity securities, primarily
telecommunications stocks, are 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 September 30, 2007, the market
value increased by $77,000 to approximately $6,219,000. During the second
quarter of fiscal 2008, the Company sold its position in Alltel Corporation
for an amount approximating Alltel's announced November 2007 merger price,
resulting in a pre-tax gain of approximately $257,000.
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 September 27, 2007, 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
October 24, 2007, payable November 14, 2007.
RESULTS OF OPERATIONS
The Company opened its new Short Pump location in January 2006 and temporarily
closed an existing center in February 2007 when its roof was damaged by an ice
storm. Repairs are currently in progress, however the date of reopening
remains uncertain. Eighteen centers were in operation in the current year
quarter and nineteen centers were in operation in the prior year first quarter.
All comparisons in this report are affected by the change in the number of
locations in operation in the periods. In addition, management believes that
summer-like weather throughout the quarter depressed traffic as consumers took
advantage of outdoor recreation options. Management also believes that the
uncertain economy and rising fuel prices may have caused and may continue to
cause people to limit their recreation spending.
Management has not yet completed its analysis of expected insurance recovery
in connection with the temporarily closed Falls Church location, but the
Company believes it will recover at least $200,000 of lost revenues for the
period July 2, 2007 through September 30, 2007.
Net earnings were $238,888 in the quarter ended September 30, 2007 and $514,143
in the quarter ended October 1, 2006, or $.05 and $.10 per share for the first
quarters of fiscal 2008 and 2007, respectively. The operating results for the
periods included in this report are not necessarily indicative of results to
be expected for the year.
Operating revenues decreased 8% or $570,000 in the fiscal year 2008 first
quarter versus an increase of 12% or $765,000 in the prior year comparable
three-month period. Bowling and other revenue decreased 8% or $394,000 in the
current year first quarter versus an increase of 12% or $570,000 in the prior
year first quarter.
Food, beverage and merchandise sales were down 9% or $176,000 in the current
three-month period and up 11% or $195,000 in the comparable prior year period.
Cost of sales decreased in response to the lower sales.
Operating expenses were down 2% or $100,000 in the current three-month period
and up 7% or $431,000 in the comparable period last year. Employee compensation
and benefits were flat in the current year first quarter and up 8% in the
prior year first quarter.
Cost of bowling and other services decreased 4% or $80,000 in the first quarter
of fiscal 2008 versus a 4% increase or $60,000 in the quarter ended October 1,
2006. Advertising and promotion expense increased 5% in the quarter ended
September 30, 2007, and decreased 32% or $63,000 in the prior year comparable
quarter. Maintenance and repair expense decreased 9% or $20,000 in the current
year quarter and 12% or $29,000 in the prior year quarter.
Supplies and services expenses increased 3% for the current year three-month
period and 18% in last year's three-month period. Utility costs were down 1%
and up 15% in the current year and prior year quarters, respectively.
Rent expense increased 11% in the current year quarter, primarily an increase
in percentage rent, and decreased 3% in the prior year comparable period.
Insurance expense excluding health insurance decreased 10% in the current year
quarter versus a 5% decrease last year's comparable quarter.
Depreciation and amortization expense decreased 5% in the current year quarter
and increased 28% in the prior year period due mainly to the additional assets
at Short Pump.
Interest and dividend income was up 32% in the current year period due to higher
investment balances and increased dividends on some telecommunication stocks.
In the prior year period interest and dividend income was flat.
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 $8,756,000 and $7,698,000 at September 30, 2007 and
October 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 September 30, 2007, 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 September 30,
2007. 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 September 30 2007, 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
September 30, 2007
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 1, 2007, sets 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 of the Company's business,
financial condition and operating results. There are no material changes in
such risk factors to report.
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)
10 (a) Extension of employment agreement with Leslie H. Goldberg
(Incorporated by reference from the Registrant's Form 8-K filed
June 22, 2006)
10 (b) Employment agreement, dated December 5, 2006, between Registrant
and Irvin Clark (Incorporated by reference from Registrant's Form
8-K filed December 7, 2006)
10 (c) Employment agreement, dated December 5, 2006, between Registrant
and Cheryl A. Dragoo (Incorporated by reference from Registrant's
Form 8-K filed December 7, 2006)
20 Press release issued November 13, 2007 (furnished herewith)
31.1 Certification of Chief Executive Officer Pursuant to Section 302
of the Sarbanes-Oxley Act
31.2 Certification of Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act
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: November 13, 2007 By: Leslie H. Goldberg
Leslie H. Goldberg, President
Date: November 13, 2007 By: Cheryl A. Dragoo
Cheryl A. Dragoo, Controller
EX-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 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)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
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) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) 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
d) 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: November 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
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 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)) and internal control over
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
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) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) 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
d) 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: November 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 September 30, 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: November 13, 2007
Exhibit 20
Exhibit 20 to Form 10-Q
Press Release Issued November 13, 2007
For Immediate Release November 13, 2007
FIRST QUARTER EARNINGS DECLINE AT BOWL AMERICA
Bowl America Incorporated today reported earnings for its first quarter ended
September 30, 2007, decreased to $.05 per share from $.10 in the prior year's
first quarter. The Company operated one fewer center compared to the prior
year quarter as Bowl America Falls Church remains closed for roof repairs
resulting from last February's ice storm.
Summer-like weather throughout the current first quarter and into October in
the Company's northern market depressed traffic as consumers took advantage of
outdoor recreation options. Additionally, the Company believes that the
uncertain economy and rising fuel prices have and will continue to cause
people to limit their recreational spending.
Bowl America operates 19 bowling centers and its stock trades on the American
Stock Exchange with the symbol BWLA. The Company's S.E.C. Form 10-Q is
available through the Company's web site at www.bowlamericainc.com.
* * * *
BOWL AMERICA INCORPORATED
Results of Operations
(unaudited)
Thirteen weeks ended
September 30, October 2,
2007 2006
Revenues
Bowling and other $4,737,705 $5,131,645
Food, beverage & merchandise sales 1,834,747 2,010,317
_________ _________
6,572,452 7,141,962
Operating expenses
excluding depreciation and amortization 5,955,593 6,033,082
Depreciation and amortization 458,235 480,466
Interest & dividend income 208,564 157,729
Earnings before taxes 367,188 786,143
Net Earnings $ 238,888 $ 514,143
Weighted average shares outstanding 5,135,704 5,136,892
EARNINGS PER SHARE $.05 $.10
SUMMARY OF FINANCIAL POSITION
(unaudited)
Dollars in Thousands
09/30/07 10/01/06
ASSETS
Total current assets including cash and
short-term investments of $11,087 & $9,445 $13,099 $11,143
Property and investments 32,462 32,310
______ ______
TOTAL ASSETS $45,561 $43,453
LIABILITIES AND STOCKHOLDERS'EQUITY
Total current liabilities $ 3,177 $ 3,299
Other liabilities 3,479 2,975
Stockholders' equity 38,905 37,179
______ ______
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $45,561 $43,453