UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Quarter Ended March 31, 1996 Commission file Number 0-1830
BOWL AMERICA INCORPORATED
(Exact name of registrant as specified in its charter.)
MARYLAND 54-0646173
(State of Incorporation) (I.R.S. Employer Identification No.)
6446 Edsall Road, Alexandria, Virginia 22312
(Address of principal executive offices) (Zip Code)
(703)941-6300
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Shares Outstanding at
April 28, 1996
Class A Common Stock, 4,161,310
$.10 par value
Class B Common Stock 1,536,146
$.10 par value
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
PART I - FINANCIAL INFORMATION
Thirteen Weeks Ended Thirty-nine Weeks Ended
March 31, April 2, March 31, April 2,
1996 1995 1996 1995
_______________________ __________________________
Operating Revenues
Bowling and other $5,872,127 $6,616,931 $14,868,773 $16,312,492
Food and merchandise sales 2,462,458 2,755,689 6,555,782 6,939,290
_________ _________ __________ __________
8,334,585 9,372,620 21,424,555 23,251,782
Operating Expenses
Compensation and benefits 3,118,268 3,471,048 9,259,203 9,790,065
Cost of bowling and other 1,651,220 1,765,169 4,916,255 5,315,374
Cost of food and mdse sales 776,845 864,403 2,133,028 2,192,516
Depreciation and
amortization 514,657 492,742 1,512,687 1,469,472
General and administrative 209,337 186,681 610,780 586,291
_________ _________ __________ __________
6,270,327 6,780,043 18,431,953 19,353,718
Operating Income 2,064,258 2,592,577 2,992,602 3,898,064
Interest and dividend
income 180,021 172,329 475,234 407,034
_________ _________ __________ __________
Earnings before provision
for income taxes 2,244,279 2,764,906 3,467,836 4,305,098
Provision for income taxes 844,466 1,042,948 1,292,842 1,612,998
_________ _________ __________ __________
Net Earnings $1,399,813 $1,721,958 $ 2,174,994 $ 2,692,100
Earnings per share $.24 $.30 $.38 $.47
Weighted average shares
outstanding 5,740,938 5,744,578 5,742,174 5,749,293
Dividends paid $545,552 $517,060 $1,636,698 $1,552,423
Per share, Class A $.095 $.09 $.285 $.27
Per share, Class B $.095 $.09 $.285 $.27
The operating results for these thirteen (13) and thirty-nine (39) week
periods are not necessarily indicative of results to be expected for the year.
See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1996 July 2, 1995
_______________ _____________
ASSETS
Current Assets
Cash and cash equivalents $ 1,943,677 $ 973,678
Short-term investments 9,739,220 6,660,958
Inventories 578,458 617,130
Prepaid expenses and other 906,992 562,217
Income taxes refundable - 444,626
__________ __________
Total Current Assets 13,168,347 9,258,609
Property, Plant and Equipment
less accumulated depreciation of
$19,271,878 and $17,964,967 22,438,310 23,399,267
Other Assets
Noncurrent marketable securities 3,706,069 3,093,555
Cash surrender value-life insurance 316,035 347,312
Other long-term assets 285,812 486,002
__________ __________
TOTAL ASSETS $39,914,573 $36,584,745
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1996 July 2, 1995
_______________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 887,864 $ 693,280
Accrued expenses and payroll ded 1,013,130 1,047,266
Income taxes payable 339,813 -
Other current liabilities 2,377,455 441,698
Current deferred income taxes 72,000 72,000
__________ __________
Total Current Liabilities 4,690,262 2,254,244
Noncurrent Deferred Income Taxes 2,119,755 1,887,000
TOTAL LIABILITIES 6,810,017 4,141,244
__________ __________
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 -
4,170,510 and 4,206,931 shares 417,052 420,693
Class B issued and outstanding -
1,536,146 153,614 153,614
Additional paid-in capital 4,923,096 4,944,585
Unrealized gain on securities
available-for-sale, net of tax 1,765,699 1,385,940
Retained earnings 25,845,095 25,538,669
__________ __________
TOTAL STOCKHOLDERS' EQUITY $33,104,556 $32,443,501
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $39,914,573 $36,584,745
<FN>
See notes to financial information.
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED MARCH 31, 1996 AND APRIL 2, 1995
March 31, April 2,
1996 1995
Cash Flows From Operating Activities:
Net earnings $2,174,994 $2,692,100
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,512,687 1,469,472
Loss on abandonment of assets-net - 26,442
Changes in assets and liabilities
Decrease (increase) in inventories 38,672 (44,336)
Increase in prepaid and other (344,775) (281,271)
Decrease in other long-term assets 231,467 248,784
Increase (decrease) in accounts payable 194,584 (78,915)
(Decrease) increase in accrued
expenses and payroll deductions (34,136) 603
Increase in income taxes payable 339,813 461,211
Decrease in income taxes refundable 444,626 -
Increase in other current liabilities 1,935,757 1,967,256
_________ _________
Net cash provided by operating activities $6,493,689 $6,461,346
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (551,730) (2,534,019)
Net increase in short-term investments (3,078,262) (3,569,778)
_________ _________
Net cash used in investing activities (3,629,992) (6,103,797)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,636,698) (1,552,423)
Purchase of Class A Common Stock (257,000) (73,006)
Stock issuance cost - (17,500)
_________ _________
Net cash used in financing activities (1,893,698) (1,642,929)
_________ _________
Net Increase (Decrease) in Cash and
Cash Equivalents 969,999 (1,285,380)
Cash and Equivalents, Beginning of Year 973,678 3,468,677
_________ _________
Cash and Equivalents, End of Period $1,943,677 $2,183,297
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $508,036 $1,151,787
<FN>
See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirty-nine Weeks Ended
March 31, 1996
1. Consolidated Financial Statements
The consolidated balance sheets as of March 31, 1996, and
the consolidated statements of earnings and cash flows for the
three-month and nine-month periods ended March 31, 1996 and
April 2, 1995 have been prepared by the Company, without
audit.
This quarterly financial information is submitted in response
to the requirements of Form 10-Q and does not purport to be
financial statements prepared in accordance with generally accepted
accounting principles. They therefore do not include all
disclosures which might be associated with such statements.
In the opinion of management such information includes all
adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position at March 31,
1996, and for all periods presented.
For a summary of significant accounting principles, which have
been continued without change refer to Note 1 to the financial
statements for the year ended July 2, 1995.
BOWL AMERICA INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
March 31, 1996
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $11,683,000 at the end of the third
quarter of fiscal 1996 or $2,428,000 higher than at the beginning
of the quarter. The increase relates primarily to the seasonal
nature of bowling participation.
On September 1, 1994, the Comapny opened Bowl America Gaithersburg,
a 48-lane center with a 170-seat full service, diner style
restaurant. A center was closed in May 1995 at the expiration of
its lease. In July 1993, the Company paid $1.8 million in cash for
an existing 32-lane center in Orange Park, Florida.
Expansion of our Dranesville bowling center from 32 lanes to 48 lanes
is in process, but there will be no contribution to cash flow until
next fiscal year. Additional expenditures are also planned as the
Company continues to modernize other existing centers. Cash and cash
flow from operations are sufficient to finance all currently planned
construction. The Company has maintained its fiscal year end 1995
position in telecommunications stock as a further source of
expansion capital.
Results of Operations
There was a $.24 per share profit for the thirteen-week period ending
March 31, 1996, versus $.30 per share profit for the thirteen weeks
ending April 2, 1995. For the current thirty-nine week period
earnings per share were $.38 compared to $.47 for the comparable
period a year ago. Decreases in both revenues and expenses are
partially due to our operating one less center for the majority of
the current nine-month reporting period compared to the prior year
period.
Operating revenues decreased 8% for the current nine-month period
versus an increase of 8% in the comparable period a year ago.
Weather adversely affected the third quarter periods in both the
current and prior years. In the current year the Blizzard of '96
and the extreme cold took a heavy toll on our northern market,
20 of our 25 locations, especially in open play linage. League
games which were lost due to the weather will be made up by the
end of the fiscal year. The average game rate for the nine-month
period is down from the prior period due to promotional pricing.
Food and beverage sales were down in the current period. Much of
the decrease is a result of the poor weather in the third quarter.
Operating expenses decreased 5% in the current nine-month period
versus an increase of 14% in the prior year comparable period when
start-up costs for Gaithersburg were reported. Employee
compensation and benefits were down 5% this period versus a
15% increase in the prior year period, the changes in both years
resulting mainly from differences in the number of centers in
operation.
Maintenance expense for the nine-month period was down 3% from
the prior year period where the 15% increase related to the opening
of new locations. For the three-month period ending March 31, 1996
snow plowing costs caused the maintenance expense to exceed the
prior year quarter by 15%.
Advertising costs decreased 15% in the current nine-month period,
although we are still conducting media campaigns to promote our
centers. Utility costs decreased 2% in the current year period
compared with a 6% increase in the prior year period.
Rent expense decreased 11% in the current thirty-nine week period
and 3% in the prior year period, the decrease a result of reduced
sales at some leased locations and the closing of a leased center,
mentioned above. Real estate and personal property taxes and
insurance premiums were down 4% for the period compared to an
increase in the prior year relating to the opening of a new
location.
Increases in depreciation and amortization expense of 3% in the
current period relate primarily to the Gaithersburg location
being open for the full nine-month period this year.
The 15% increase in the comparable period last year was due mainly
to the opening of a bowling centers.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
March 31, 1996
PART II - OTHER INFORMATION
No material unusual charges or credits to income or changes in
independent accountants occurred during the quarter which would
require the filing of a Form 8-K.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BOWL AMERICA INCORPORATED
Registrant
May 14, 1996 Leslie H. Goldberg
Date Leslie H. Goldberg
President
May 14, 1996 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller