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 28, 2008 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 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, a non-accelerated filer or a smaller reporting company.
See definition of "accelerated filer," "large accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer__ Accelerated Filer__ Non-Accelerated Filer __
Smaller Reporting Company 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 practicable date:
Shares Outstanding at
October 28, 2008
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 28, September 30,
2008 2007
Operating Revenues:
Bowling and other $4,778,984 $4,737,705
Food, beverage and merchandise sales 1,914,956 1,834,747
_________ _________
6,693,940 6,572,452
Operating Expenses:
Employee compensation and benefits 3,451,100 3,429,689
Cost of bowling and other services 1,970,647 1,703,517
Cost of food, beverage and merchandise sales 585,348 561,761
Depreciation and amortization 464,641 458,235
General and administrative 215,611 260,626
_________ _________
6,687,347 6,413,828
Operating Income 6,593 158,624
Interest and dividend income 182,377 208,564
_________ _________
Earnings before provision for income taxes 188,970 367,188
Provision for Income Taxes 66,000 128,300
_________ _________
Net Earnings $ 122,970 $ 238,888
========= =========
Earnings per share-basic and diluted $ .02 $.05
=== ===
Weighted average shares outstanding 5,135,690 5,135,704
Dividends paid $ 770,353 $ 744,679
Per share, dividends paid, Class A $.15 $.145
Per share, dividends paid, Class B $.15 $.145
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Unaudited)
Net Earnings $ 122,970 $ 238,888
Other comprehensive (loss) gain, net of tax
Unrealized (loss) gain on available-for-sale
securities, net of ($146,546) and $43,278 (249,899) 73,833
________ ________
Comprehensive (loss) earnings $ (126,929) $ 312,721
======== ========
The operating results for the thirteen (13) week period ending September 28,
2008 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 28, June 29,
2008 2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,980,996 $ 2,129,512
Short-term investments 5,262,588 6,274,274
Inventories 740,275 800,559
Prepaid expenses and other 1,854,475 1,959,849
Income taxes refundable 366,984 366,984
Current deferred income taxes 27,141 27,141
__________ __________
TOTAL CURRENT ASSETS 11,232,459 11,558,319
LAND, BUILDINGS & EQUIPMENT
Net of accumulated depreciation of
$33,862,244 and $33,397,603 24,591,060 24,860,760
OTHER ASSETS:
Marketable investment securities 6,646,971 7,008,263
Cash surrender value-life insurance 530,527 529,628
Other 99,780 99,780
__________ __________
TOTAL OTHER ASSETS 7,277,278 7,637,671
__________ __________
TOTAL ASSETS $43,100,797 $44,056,750
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 678,980 $ 919,760
Accrued expenses 850,012 1,147,524
Dividends payable 770,353 770,353
Income taxes payable 64,250 -
Other current liabilities 894,332 332,385
__________ __________
TOTAL CURRENT LIABILITIES 3,257,927 3,170,022
LONG-TERM DEFERRED COMPENSATION 54,621 54,621
NONCURRENT DEFERRED INCOME TAXES 2,470,568 2,617,144
__________ __________
TOTAL LIABILITIES 5,783,116 5,841,787
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 shares 366,722 366,722
Class B issued and outstanding
1,468,462 shares 146,846 146,846
Additional paid-in capital 7,478,838 7,478,838
Accumulated other comprehensive earnings-
Unrealized gain on available-for-sale
securities, net of tax 2,031,222 2,281,121
Retained earnings 27,294,053 27,941,436
__________ __________
TOTAL STOCKHOLDERS'EQUITY 37,317,681 38,214,963
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $43,100,797 $44,056,750
========== ==========
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Thirteen Weeks Ended
September 28, September 30,
2008 2007
Cash Flows From Operating Activities
Net earnings $ 122,970 $ 238,888
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 464,641 458,235
Changes in assets and liabilities
Decrease (increase) in inventories 60,284 (139,057)
Decrease (increase) in prepaid & other 105,374 (194,432)
Decrease in income taxes refundable - 36,555
Increase in income taxes payable 64,250 20,146
Decrease in other long-term assets 300
Decrease in accounts payable (240,780) (255,552)
Decrease in accrued expenses (297,512) (196,139)
Increase in other current liabilities 561,947 547,010
________ ________
Net cash provided by
operating activities 841,174 515,954
________ _________
Cash flows from investing activities
Expenditures for land, building and equip (194,941) (213,648)
Net sales and maturities of short-term
investments 1,011,686 1,262,246
Purchase of marketable securities (35,183) (33,862)
Increase in cash surrender value (899) (2,214)
_________ _________
Net cash provided by investing activities 780,663 1,012,522
_________ _________
Cash flows from financing activities
Payment of cash dividends (770,353) (744,679)
Purchase of Class A Common Stock - (438)
________ _________
Net cash used in financing activities (770,353) (745,117)
_________ _________
Net Increase in Cash and Equivalents 851,484 783,359
_________ _________
Cash and Equivalents, Beginning of quarter 2,129,512 1,547,345
_________ _________
Cash and Equivalents, End of quarter $2,980,996 $2,330,704
========= =========
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Quarter for:
Income taxes $ 1,750 $ 71,300
See notes to condensed consolidated financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Thirteen Weeks Ended
September 28, 2008
(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 June 29, 2008 has been derived
from the Company's June 29, 2008 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 June 29, 2008.
2. Marketable Equity Securities
Marketable equity securities, available for sale, are carried at fair value
in accordance with the provisions of SFAS No. 115. Fair value is determined
based on quoted market prices in an active market. At September 28, 2008, the
fair value of these securities was $3,924,668, with an original cost of
$710,799, resulting in an unrealized gain of $3,213,869.
The telecommunications stocks included in the portfolio as of September 28,
2008 were:
82,112 shares of AT&T 2,000 shares of Embarq
354 shares of Fairpoint Communications 939 shares of Idearc
475 shares of LSI 9,969 shares of Qwest
40,000 shares of Sprint 18,784 shares of Verizon
11,865 shares of Vodafone 4,079 shares of Windstream
3. Commitments and Contingencies
The Company's purchase commitments at September 28, 2008, are for materials,
supplies, services and equipment as part of the normal course of business.
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
reopened on March 31, 2008. The Company has made a claim under its business
interruption insurance for the lost income of the center from the time of its
closure up to March 30, 2008, the date of reopening and will make a separate
claim for lost income during the period of restoration of business. At
September 28, 2008, 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 $1,300,000 from the date of the roof damage through September 28,
2008. Of this amount, $440,000 was recognized as revenue in fiscal year 2007,
$800,000 was recognized as revenue in fiscal year 2008 and the remaining
$60,000 has been recognized as revenue in the quarter ended September 28, 2008
and a receivable for that amount has been included in the category Prepaid
expenses and other on the Condensed Consolidated Balance Sheets at September 28,
2008. The estimate was based on the average yearly percentage change in
revenues between 2007 and 2006 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. Reclassifications
Certain previous year amounts have been reclassified to conform with
current year presentation.
6. Fair Value
The Company adopted Statement of Financial Accounting Standards No. 157
("SFAS 157"), "Fair Value Measurements", as of September 28, 2008. SFAS 157,
among other things, defines fair value, establishes a consistent framework for
measuring fair value and expands disclosure for each major asset and liability
category measured at fair value on either a recurring or nonrecurring basis.
SFAS 157 clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that
market participants would use in pricing an asset or liability. As a basis for
considering such assumptions, SFAS 157 establishes a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs, other than the quoted prices in active markets,
that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own assumptions.
Assets and liabilities measured at fair value are based on one or
more of the following three valuation techniques:
a.) Market approach. Prices and other relevant information generated by
market transactions involving identical or comparable assets and
liabilities.
b.) Cost approach. Amount that would be required to replace the service
capacity of an asset (replacement cost).
c.) Income approach. Techniques to convert future amounts to a single
present amount based on market expectations (including present
value techniques, option-pricing and excess earnings models).
The Company measures its derivative financial instruments at fair value on
a recurring basis. The fair value measurements fall within Level 1 in the fair
value hierarchy. The fair values are based on quoted market prices in actively
traded markets.
The following table presents the Company's marketable securities and
short-term investments measured at fair value at September 28, 2008:
Short term investments $ 5,262,588
Marketable equity securities $ 6,646,971
__________
$11,909,559
7. Recent Accounting Pronouncements
In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157 ("SFAS 157"), "Fair Value Measurements". This statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the FASB having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require
any new fair value measurements. SFAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years.
However in February 2008, the FASB issued FASB Staff Position ("FSP")
No. 157-2 which delays the effective date of SFAS 157 for all non-financial
assets and liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually).
This FSP partially defers the effective date of SFAS 157 to fiscal years
beginning after November 15, 2008, and interim periods within those fiscal
years for items within the scope of the FSP. Effective July 2008, the Company
adopted SFAS 157 except as it applies to those non-financial assets and
non-financial liabilities as noted in FSP 157-2. The Company is evaluating the
applicability of SFAS 157 as it applies to non-financial assets.
In February 2007, the FASB issued Statement of Financial Accounting
Standards No. 159 ("SFAS 159"), "The Fair Value Option for Financial Assets
and Financial Liabilities" including an Amendment of FASB Statement No. 115.
SFAS 159 permits entities to choose to measure many financial instruments and
certain other items at fair value. Entities that elect the fair value option
will report unrealized gains and losses in earnings at each subsequent reporting
date. The fair value option may be elected on an instrument-by-instrument basis,
with few exceptions. SFAS 159 also establishes presentation and disclosure
requirements to facilitate comparisons between companies that choose different
measurement attributes for similar assets and liabilities. The Company did not
elect to apply the provisions of SFAS 159 to its existing financial instruments
at September 28, 2008.
In December 2007, the FASB issued the following statements of financial
accounting standards applicable to business combinations:
Statement of Financial Accounting Standards No. 141 (revised 2007)
("SFAS 141(R)"), "Business Combinations;" and
Statement of Financial Accounting Standards No. 160 ("SFAS 160"),
"Non-controlling Interests in Consolidated Financial Statements" an
amendment of ARB No.51.
SFAS 141(R) provides guidance on how an entity will recognize and measure
the identifiable assets acquired (including goodwill), liabilities assumed,
and non-controlling interests, if any, acquired in a business combination.
SFAS 160 will change the accounting and reporting for minority interests,
which will be treated as non-controlling interests and classified as a
component of equity. Both standards are effective for fiscal years beginning
after December 15, 2008, and are applicable to the Company for fiscal 2010.
Early adoption is prohibited. The Company is currently evaluating both
standards.
In March 2008, the FASB issued Statement of Financial Accounting Standards
No. 161, ("SFAS 161"), "Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement No. 133", which requires additional
disclosures about the objectives of the derivative instruments and hedging
activities, the method of accounting for such instruments under SFAS No. 133
and its related interpretations, and a tabular disclosure of the effects of
such instruments and related hedged items on the Company's financial position,
financial performance, and cash flows. SFAS No. 161 is effective for interim
periods beginning after November 15, 2008. The Company does not believe this
statement will impact future disclosures because the Company does not engage
in hedging activities nor invest in derivative instruments.
In August 2008, the SEC announced that it will issue for comment a proposed
roadmap regarding the potential use of International Financial Reporting
Standards ("IFRS") for the preparation of financial statements by U.S.
registrants. IFRS are standards and interpretations adopted by the International
Accounting Standards Board. Under the proposed roadmap, the Company would be
required to prepare financial statements in accordance with IFRS in fiscal 2014,
including comparative information also prepared under IFRS for fiscal 2013 and
fiscal 2012. The Company is currently assessing the potential impact of IFRS on
its financial statements and will continue to follow the proposed roadmap for
future developments.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Short-term investments, consisting mainly of Certificates of Deposits,
and cash totaled $8,244,000 at the end of the first quarter of fiscal 2009 or
$160,000 lower than at the beginning of the quarter.
In the three-month period ended September 28, 2008, the Company expended
approximately $195,000 for purchase of bowling and restaurant equipment. 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 holdings of marketable securities, including
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 28, 2008, the market value
decreased by $361,000 to approximately $6,647,000.
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 25, 2008, the Board of Directors declared a cash dividend of
$.15 per share on its Class A and Class B stock to holders of record on
October 22, 2008, payable November 12, 2008.
RESULTS OF OPERATIONS
The Company's Falls Church center reopened March 31, 2008 after temporary
closure in February 2007 when its roof was damaged by an ice storm. Nineteen
centers were in operation in the current year quarter and eighteen 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. Management also believes that the unstable economy is causing and
may continue to cause people to limit their recreation spending.
The Company has made a claim under its business interruption insurance for
lost income from its Falls Church center for the time of its closure up to the
date of reopening. The Company has not yet received payment from the insurance
company for the income lost during the temporary closure nor for the business
restoration period after reopening, but the Company believes it will recover
at least $60,000 of lost revenues, included in Operating Revenues in this
report, for the period June 30, 2008 through September 28, 2008. Last year's
comparable period included $200,000 in expected insurance recovery.
Net earnings were $122,970 in the quarter ended September 28, 2008 and
$238,888 in the quarter ended September 30, 2007, or $.02 and $.05 per share
for the first quarters of fiscal 2009 and 2008, respectively. The operating
results for the period included in this report are not necessarily indicative
of results to be expected for the year.
Operating revenues increased 2% or $121,000 in the fiscal year 2009 first
quarter versus a decrease of 8% or $570,000 in the prior year comparable three-
month period. Bowling and other revenue increased 1% or $41,000 in the current
year first quarter versus a decrease of 8% or $374,000 in the prior year first
quarter.
Food, beverage and merchandise sales were up 4% or $80,000 in the current
three-month period and were down 9% or $176,000 in the comparable prior year
period. Cost of sales increased in response to the higher sales.
Operating expenses were up 4% or $274,000 in the current three-month period
and were down 2% or $100,000 in the comparable period last year. Employee
compensation and benefits were up 1% in the current year first quarter and
were flat in the prior year first quarter.
Cost of bowling and other services increased 16% or $267,000 in the first
quarter of fiscal 2009 versus a 4% decrease or $80,000 in the quarter ended
September 30, 2007. Advertising and promotion expense increased 37% or $53,000
in the current year quarter and 5% in the prior year comparable quarter.
Maintenance and repair expense increased 32% or $63,000 in the current year
quarter and decreased 9% or $20,000 in the prior year quarter. Supplies and
services expenses increased 6% and 3% in the current year and prior year three-
month periods, respectively. Utility costs for the quarter were up 19% or
$76,000 in the first quarter of the current year and down 1% in the prior year
first quarter.
Rent expense decreased 6% in the current year quarter, primarily as a
result of a decrease in percentage rent. Insurance expense excluding health
insurance was flat in the current year quarter and decreased 10% in the prior
year quarter.
Depreciation and amortization expense increased 1% in the current year
quarter and decreased 5% in the prior year comparable period.
Interest and dividend income declined 13% in the current year period
primarily due to lower interest rates.
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 4T. 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 28,
2008. 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 28, 2008, 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 28, 2008
PART II - OTHER INFORMATION
Item 6 Exhibits
20 Press release issued November 11, 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: November 11, 2008 By: Leslie H. Goldberg
Leslie H. Goldberg, President
Date: November 11, 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 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
fourth 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 the registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: November 11, 2008 Leslie H. Goldberg
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
fourth 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 the registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: November 11, 2008 Cheryl A. Dragoo
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. Section 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 28, 2008,
(the "Report") fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange 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
Leslie H. Goldberg
Chief Executive Officer
Cheryl A. Dragoo
Cheryl A. Dragoo
Chief Financial Officer
Date: November 11, 2008
EXHIBIT 20 Press release dated November 11, 2008
For Immediate Release November 11, 2008
BOWL AMERICA REPORTS FIRST QUARTER EARNINGS
Bowl America Incorporated today reported earnings for its first quarter ended
September 28, 2008, decreased to $.02 per share from $.05 in the prior year's
first quarter. Revenues rose 2% to $6.7 million, however a 4% increase in
operating expenses was the primary cause for the decline in earnings.
The bowling business is highly seasonal in nature and the first quarter includes
two of the three lowest traffic months. Management believes that the
uncertainty in the current economic climate has put pressure on recreational
spending. However, the winter bowling season started with slightly higher
league play than last year.
Bowl America operates 19 bowling centers and its Class A Common Stock trades
on the American Stock Exchange with the symbol BWLA. The Company's S.E.C.
Form 10-Q is available through the Company's web site at
www.bowlamericainc.com.
* * * *
BOWL AMERICA INCORPORATED
Results of Operations
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended
09/28/08 09/30/07
Operating Revenues
Bowling and other $4,778,984 $4,737,705
Food, beverage and merchandise sales 1,914,956 1,834,747
_________ _________
6,693,940 6,572,452
Operating expenses excluding
depreciation and amortization 6,222,706 5,955,593
Depreciation and amortization 464,641 458,235
Interest and dividend income 182,377 208,564
Earnings before taxes 188,970 367,188
Net Earnings $ 122,970 $ 238,888
Weighted average shares
outstanding 5,135,690 5,135,704
EARNINGS PER SHARE .02 .05
* * * *
SUMMARY OF FINANCIAL POSITION
(Unaudited)
Dollars in Thousands
09/28/08 09/30/07
ASSETS
Total current assets including cash and
short-term investment of $ 8,244 and $8,534 $ 11,232 $ 10,546
Property and investments 31,869 35,015
______ ______
TOTAL ASSETS $ 43,101 $ 45,561
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 3,258 $ 3,177
Other liabilities 2,525 3,479
Stockholders' equity 37,318 38,905
______ ______
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 43,101 $ 45,561