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
FOR THE QUARTERLY PERIOD ENDED: December 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 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, 2008
Class A Common Stock, 3,667,228
$.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 30, December 31, December 30, December 31,
2007 2006 2007 2006
_______________________ __________________________
Operating Revenues
Bowling and other $5,473,863 $5,906,620 $10,211,568 $11,038,265
Food, beverage and
merchandise sales 2,189,450 2,370,480 4,024,197 4,380,797
_________ _________ __________ __________
7,663,313 8,277,100 14,235,765 15,419,062
Operating Expenses
Compensation and benefits 3,409,296 3,537,441 6,838,985 6,975,308
Cost of bowling and other 1,703,610 1,753,727 3,407,127 3,537,385
Cost of food, beverage and
merchandise sales 655,079 724,812 1,216,840 1,319,821
Depreciation and
amortization 458,701 474,361 916,936 954,827
General and administrative 135,775 238,576 396,401 455,124
_________ _________ __________ __________
6,362,461 6,728,917 12,776,289 13,242,465
Operating Income 1,300,852 1,548,183 1,459,476 2,176,597
Investment earnings 267,237 - 267,237 -
Interest and dividend
income 188,857 264,680 397,421 422,409
_________ _________ __________ __________
Earnings before provision
for income taxes 1,756,946 1,812,863 2,124,134 2,599,006
Provision for income taxes 630,700 634,500 759,000 906,500
_________ _________ __________ __________
Net Earnings $1,126,246 $1,178,363 $ 1,365,134 $ 1,692,506
========= ========= ========= =========
Earnings per share-basic &
diluted $.22 $.23 $.27 $.33
Weighted average shares
outstanding 5,135,690 5,136,866 5,135,697 5,136,879
Dividends paid $744,677 $719,165 $1,489,356 $1,438,330
Per share, Class A $.145 $.14 $.29 $.28
Per share, Class B $.145 $.14 $.29 $.28
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $1,126,246 $1,178,363 $ 1,365,134 $1,692,506
Other comprehensive
earnings-net of tax
Unrealized (loss) gain on
available for sale
securities (294,019) 249,764 (220,186) 545,012
Add: reclassification
adjustment for (gain)loss
included in net income
net of tax (160,175) 2,373 (160,175) 2,373
_________ _________ __________ _________
Comprehensive earnings $ 672,052 $1,430,500 $ 984,773 $2,239,891
========= ========= ========= =========
The operating results for the thirteen (13) and twenty-six (26) week
periods ended December 30, 2007, 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 30, 2007 July 1, 2007
________________ _____________
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 3,606,955 $ 1,547,345
Short-term investments 9,139,866 9,945,104
Inventories 636,315 581,705
Prepaid expenses and other 1,351,213 1,067,523
Income taxes refundable - 36,555
Current deferred income taxes 29,154 29,154
__________ __________
Total Current Assets 14,763,503 13,207,386
Land, Buildings and Equipment
Net of accumulated depreciation of
$32,741,835 and $31,881,242 25,360,403 25,887,241
Other Assets
Marketable equity securities(Note 2) 5,678,164 6,141,324
Cash surrender value-life insurance 504,313 502,099
Other long-term assets 97,680 96,680
__________ __________
Total Other Assets 6,280,157 6,740,103
---------- ----------
TOTAL ASSETS $46,404,063 $45,834,730
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 657,471 $ 919,297
Accrued expenses 773,114 1,067,203
Dividends payable 1,283,922 744,679
Income taxes payable 209,246 -
Other current liabilities 1,720,367 330,372
__________ __________
Total Current Liabilities 4,644,120 3,061,551
Long-term Deferred Compensation 59,224 59,224
Noncurrent Deferred Income Taxes 3,247,571 3,376,718
---------- ----------
TOTAL LIABILITIES 7,950,915 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 per 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
Unrealized gain on securities
available-for-sale, 3,148,006 3,368,192
Retained earnings 27,312,736 27,976,598
__________ __________
TOTAL STOCKHOLDERS' EQUITY $38,453,148 $39,337,237
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $46,404,063 $45,834,730
========== ==========
<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 30, 2007 and December 31, 2006
December 30, December 31,
2007 2006
Cash Flows From Operating Activities:
Net earnings $1,365,134 $1,692,506
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 916,936 954,827
(Gain) loss on sale of available-for-
sale securities (267,237) 3,612
Changes in assets and liabilities
Increase in inventories (54,610) (79,401)
(Increase) decrease in prepaid
expenses & other (283,690) 162,818
Decrease in income taxes refundable 36,555 30,200
Increase in income taxes payable 209,246 -
Increase in other long-term assets (1,000) (3,205)
Decrease in accounts payable (261,826) (243,424)
Decrease in accrued expenses (294,089) (349,016)
Increase in other current liabilities 1,389,995 1,480,162
_________ _________
Net cash provided by operating activities $2,755,414 $3,649,079
_________ _________
Cash Flows From Investing Activities
Expenditures for land,buildings & equip (390,098) (370,862)
Net sales & maturities of short-term
investments 895,370 (1,081,237)
Proceeds from sale of marketable
securities 290,932 18,946
(Increase) decrease in cash surrender
value (2,214) 27,786
_________ _________
Net cash provided by (used in)
investing activities 793,990 (1,405,367)
_________ _________
Cash Flows From Financing Activities
Payment of cash dividends (1,489,356) (1,438,330)
Purchase of Class A Common Stock (438) (641)
_________ _________
Net cash used in financing activities (1,489,794) (1,438,971)
_________ _________
Net Increase (Decrease) in Cash and
Equivalents 2,059,610 804,741
Cash and Equivalents, Beginning of Period 1,547,345 1,055,687
_________ _________
Cash and Equivalents, End of Period $3,606,955 $1,860,428
========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 513,198 $ 876,300
<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 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 are carried at fair value in accordance
with the provisions of SFAS No. 115. At December 30, 2007, the fair value of
securities held was $5,678,164, with an original cost of $710,799, resulting
in an unrealized gain of $4,967,365.
The telecommunications stocks included in the portfolio as of December 30,
2007 were:
82,112 shares of AT&T 2,000 shares of Embarq
939 shares of Idearc 475 shares of LSI
9,969 shares of Qwest Communications 18,784 shares of Verizon
40,000 shares of Sprint 4,079 shares of Windstream
11,865 shares of Vodafone/AirTouch
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 December 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 $797,000 from the date of the roof damage through
December 30, 2007. Of this amount, $440,000 was recognized as revenue in the
prior fiscal year. The remaining $357,000 has been recognized as revenue in
the six-months ended December 30, 2007 and a receivable for that amount has
been included in the category Prepaid expenses and other on the Consolidated
Balance Sheets at December 30, 2007. The estimate was based on the average
yearly percentage change in revenues between 2008 and 2007 comparable fiscal
periods multiplied by the prior year earnings of that center.
The Company's purchase commitments at December 30, 2007, 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 30, 2007
Liquidity and Capital Resources
Short-term investments, consisting mainly of U.S. Treasury Bills and Notes, and
cash totaled $12,747,000 at the end of the second quarter of fiscal 2008 or
$1,660,000 higher than at the beginning of the quarter and $1,255,000 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 30, 2007, the Company expended
approximately $390,000 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 Company's position in marketable equity securities, primarily
telecommunications stocks, is a further source of expansion capital. These
marketable securities are carried at their fair value on the last day of the
quarter. During the three-month period ended December 30, 2007, the Company
received approximately $291,000 from the combination of its sale of holdings
in Alltel and the mandatory conversion of Avaya stock for cash, resulting in
an after-tax gain of approximately $170,000. After adjusting for the Alltel
and Avaya transactions, the market value of the remaining portfolio decreased
in the quarter by $185,000 to approximately $5,678,000.
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 30, 2007, league deposits
of approximately $1,490,000 were included in the current liabilities category.
On December 4, 2007, the Board of Directors declared a regular quarterly cash
dividend of $.15 per share plus a special dividend of $.10 per share on its
Class A and Class B stock to holders of record on January 10, 2007, payable
January 22, 2008, the 50th anniversary of the opening of the first Bowl America
location.
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.
RESULTS OF OPERATIONS
The Company opened Bowl America Short Pump in late January 2006 and temporarily
closed an existing center in February 2007 when its roof was damaged by an ice
storm. Repairs are nearing completion, however the date of reopening remains
uncertain. Eighteen centers were in operation in the current year three and
six months periods and nineteen 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. Management believes
that the current unsettled economic forecast is causing people to limit
discretionary 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 $357,000 of lost revenues for the
period July 2, 2007 through December 30, 2007.
Net earnings were $1,126,246 or $.22 per share for the thirteen-week period
ended December 30, 2007, and $1,178,363 or $.23 per share for the thirteen
weeks ended December 31, 2006. For the current twenty-six week period net
earnings per share were $1,365,134 or $.27 compared to $1,692,506 or $.33 for
the comparable period a year ago. Approximately $.03 per share of the current
quarter and year-to-date earnings are attributable to the after tax gain
on the Alltel and Avaya transactions. The operating results for fiscal 2008
periods included in this report are not necessarily indicative of results to
be expected for the year.
Total operating revenues decreased $614,000 or 7% in the most recent quarter
and increased $722,000 or 9% in the three-month period ended December 31, 2006.
For the current fiscal six-month period operating revenues were down $1,183,000
or 8% versus an increase of $1,487,000 or 11% in the comparable six-month
period a year ago. Bowling and other revenue decreased 7% in both the quarter
and year-to-date period ended December 30, 2007 or $433,000 and $827,000,
respectively. Prior year comparable three and six month period revenues
showed increases of $539,000 or 10% and $1,109,000 or 11%, respectively.
Food, beverage and merchandise sales were down $181,000 and $357,000 in the
current year quarter and six-month period, respectively or 8% in both periods.
Cost of sales decreased 10% and 8% in the respective three and six month
periods.
Operating expenses were down $366,000 or 5% and $466,000 or 4% in the current
three-month period and six-month periods, respectively, versus increases of
$585,000 or 9% and $1,016,000 or 8% in the three and six month periods last
year. Employee compensation and benefits were down $128,000 and $136,000
equaling decreases of 4% and 2% in the current year three and six-month
periods, respectively. In the prior year comparable periods the category was
up $270,000 and $523,000 or 8% in both of the prior year comparable periods,
respectively.
Cost of bowling and other services decreased $130,000 or 4% versus an increase
of $196,000 or 6% in the six-month periods ended December 30, 2007 and
December 31, 2006, respectively. Maintenance and repair costs were down
$49,000 or 14% in the fiscal 2008 six-month period and were down $21,000 or
5% in the six-month period ended December 31, 2006. Advertising costs during
the current year twenty-six weeks period were flat and decreased 11% in the
prior year comparable period. For the three month periods ended December 30,
2007 and December 31, 2006, respectively, utility costs were up $17,000 or 5%
and down $13,000 or 4%. In the six-months current and prior year periods
utility costs were up $12,000 or 2% and $39,000 or 5%, respectively.
Supplies and services expenses decreased 13% for the current year three-month
period and increased 28% 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 increased 12% in the current year-to-date period mainly due to
increased percentage rent and decreased 2% in the prior year comparable period.
Insurance expense excluding health insurance decreased 7% in the current year
to date period and 6% in last year's comparable period as the insurance market
continued to soften.
Depreciation and amortization expense decreased 4% in the current year six-month
period versus an increase of 25% in the prior year six-month period that
included the additional assets at Short Pump.
Interest and dividend income decreased $25,000 in the fiscal 2008 year-to-date
period, primarily due to lower interest rates on investments. Last year's
comparable period was up $120,000 and included $38,000 in a dividend paid by
Vodafone as part of its capital restructuring, as well as higher investment
balances and interest rates.
In the current year quarter, the Company recorded a pre-tax gain of $267,000
from the sale of Alltel stock and the mandatory exchange for cash of its
Avaya holdings.
CRITICAL ACCOUNTING POLICIES
Management has 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 the Company's 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.
Management has 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 the Company's 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 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 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 December 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
December 30, 2007
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting held December 4, 2007, the Class A shareholders approved
the appointment of Director Warren T. Braham for a one year period to expire
at the 2008 Annual Meeting. The votes were cast as follows:
For 3,352,676 Withheld 8,517
At the annual meeting held December 4, 2007, the Class A shareholders approved
the appointment of Director Allan L. Sher for a one year period to expire at
the 2008 Annual Meeting. The votes were cast as follows:
For 3,352,639 Withheld 8,554
At the annual meeting held December 4, 2007, 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 4, 2007 meeting, for a one year period to expire at the 2008
Annual Meeting. The votes were cast as follows:
For 14,047,200 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)
10 (a) Extension of Employment Agreement with Leslie H. Goldberg
(Incorporated by reference from the Registrant's Form 8-K filed
June 20, 2007)
10 (b) Employment Agreement, dated December 4, 2007, between Registrant
and Irvin Clark (Incorporated by reference from Registrant's
Form 8-K filed December 5, 2007)
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 February 12, 2008 (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: February 12, 2008 By: Leslie H. Goldberg
Leslie H. Goldberg, President
Date: February 12, 2008 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 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: February 12, 2008 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 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: February 12, 2008 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 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: February 12, 2008
EXHIBIT 20
Exhibit 20 to FORM 10-Q Press Release issued February 12, 2008
For Immediate Release February 12, 2008
BOWL AMERICA REPORTS SECOND QUARTER EARNINGS
Bowl America Incorporated today reported that second quarter per share earnings
declined to $.22 from $.23 last year. Earnings for the six-months period were
down from $.33 to $.27. Buyouts of two of the Company's investment holdings
contributed $.03 per share in after-tax earnings this year. Bowl America Falls
Church remains closed for roof repairs from damage sustained during an ice
storm in February 2007.
The pressure on the public's discretionary recreation budget clearly impacts
bowling. Bowl America has for some time had no long-term debt and has
$10 million in cash in excess of our current needs for what we consider to be
a trough in bowling participation. In addition, this cash reserve increases
our confidence that this will be the 37th consecutive year of increased
per share dividends. The Company raised its regular quarterly dividend to
$.15 per share and paid a Special Anniversary Dividend of $.10 per share on
January 22, 2008, the 50th anniversary of the opening of the first Bowl
America location.
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 at the Company's web site www.bowlamericainc.com.
BOWL AMERICA INCORPORATED
Results of Operations
(unaudited)
Thirteen weeks ended Twenty-six weeks ended
December 30, December 31, December 30, December 31,
2007 2006 2007 2006
Revenues
Bowling and other $5,473,863 $5,906,620 $10,211,568 $11,038,265
Food & mdse sales 2,189,450 2,370,480 4,024,197 4,380,797
_________ _________ __________ __________
7,663,313(1) 8,277,100 14,235,765(1) 15,419,062
Operating expenses
excluding depreciation
and amortization 5,903,760 6,254,556 11,859,353 12,287,638
Depreciation and
amortization 458,701 474,361 916,936 954,827
Investment earnings 267,237 - 267,237 -
Interest & dividend 188,857 264,680 397,421 422,409
Earnings before taxes 1,756,946 1,812,863 2,124,134 2,599,006
Net Earnings $1,126,246 $1,178,363 $1,365,134 $1,692,506
Weighted average shares
outstanding 5,135,690 5,136,866 5,135,697 5,136,879
EARNINGS PER SHARE .22 .23 .27 .33
(1) Includes $157,000 and $357,000 in expected insurance recovery for the
thirteen and twenty-six weeks, respectively.
SUMMARY OF FINANCIAL POSITION
(unaudited)
Dollars in Thousands
12/30/07 12/31/06
ASSETS
Total currrent assets including cash and
short-term investments of $12,747 & $10,991 $14,763 $12,770
Property and investments 31,641 32,373
______ ______
TOTAL ASSETS $46,404 $45,143
LIABILITIES AND STOCKHOLDERS'EQUITY
Total current liabilities $ 4,644 $ 4,154
Other liabilities 3,307 3,123
Stockholders' equity 38,453 37,866
______ ______
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $46,404 $45,143