United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXHANGE ACT
For the transition period from __________ to __________
Commission File Number 0-21451
BOWLIN Outdoor Advertising & Travel Centers Incorporated (Exact
name of registrant as specified in its charter)
NEVADA 85-0113644
(State or other jurisdiction (IRS Employer Identification
of incorporation or No.)
organization)
150 LOUISIANA NE
ALBUQUERQUE, NM 87108
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: 505-266-5985
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 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 ___
As of June 11, 1999, 4,384,848 shares of the issuer's common stock were
outstanding.
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page No.
--------
Item 1 Consolidated Financial Statements
Consolidated Balance Sheets as of April 30, 1999
and January 31, 1999............................................2
Consolidated Statements of Income for the three
Months Ended April 30, 1999 and 1998...........................4
Consolidated Statement of Stockholders' Equity
for the three
months ended April 30, 1999.....................................5
Consolidated Statements of Cash Flows for the
three Months Ended April 30, 1999 and 1998......................6
Notes to the Consolidated Financial Statements..................8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk....................................................14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................15
Item 2. Changes in Securities and Use of Proceeds......................15
Item 3. Defaults Upon Senior Securities................................15
Item 4. Submission of Matters to a Vote of Security Holders............15
Item 5. Other Information..............................................15
Item 6. Exhibits and Reports on Form 8-K...............................15
Signatures.....................................................15
1
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
Assets
(In thousands, except share data)
April 30, January 31,
1999 1999
(Unaudited)
------------------ ------------------
Current assets:
Cash and cash equivalents $ 1,802 $ 2,199
Accounts receivable, Outdoor Advertising, net 621 736
Accounts receivable, other 603 774
Notes receivable, related parties 12 12
Inventories 3,680 3,689
Prepaid expenses and other current assets 629 712
Income taxes 565 531
-------------------- --------------------
Total current assets 7,912 8,653
Property & equipment, net 28,942 26,425
Intangible assets, net 2,279 2,338
Other assets 57 73
-------------------- --------------------
Total assets $ 39,190 $ 37,489
==================== ====================
(Continued)
2
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
Liabilities and Stockholders' Equity
(In thousands, except share data)
April 30, January 31,
1999 1999
(Unaudited)
------------------ --------------------
Current liabilities:
Short-term borrowings, bank $ 277 $ -
Accounts payable 1,395 1,393
Long-term debt, current maturities 1,385 1,248
Accrued liabilities 451 517
------------------ --------------------
Total current liabilities 3,508 3,158
Deferred income taxes 488 427
Long-term debt, less current maturities 20,258 19,004
-------------------- ---------------------
Total liabilities 24,254 22,589
Stockholders' equity
Common stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding 4,384,848 shares 4 4
Additional paid-in capital 11,604 11,604
Retained earnings 3,328 3,292
-------------------- ---------------------
Total stockholders' equity 14,936 14,900
==================== =====================
Total liabilities and stockholders' equity $ 39,190 $ 37,489
==================== =====================
See accompanying notes to consolidated financial statements
3
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)
For the Three Months Ended
----------------------------------------------------
April 30, April 30,
1999 1998
(Unaudited) (Unaudited)
------------------ -----------------
Gross sales $ 8,047 $ 7,124
Less discounts on sales 80 61
------------------ -----------------
Net sales 7,967 7,063
Cost of goods sold 5,014 4,548
------------------ -----------------
Gross profit 2,953 2,515
General and administrative expenses (1,920) (1,686)
Depreciation and amortization (569) (409)
------------------ -----------------
Operating income 464 420
Non-operating income (expense):
Interest income 23 28
Gain on sale of property and equipment 5 4
Interest expense (430) (214)
------------------ -----------------
Total non-operating income (expense) (402) (182)
------------------ -----------------
Income before income taxes 62 238
Income taxes 26 93
------------------ -----------------
Net income $ 36 $ 145
================== =================
Weighted average common and potential
dilutive common shares 4,384,848 4,384,848
Earnings per share
Basic and Diluted $ .01 $ .03
================== =================
See accompanying notes to consolidated financial statements.
4
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
(In thousands, except share data)
For the Three Months Ended April 30, 1999
-----------------------------------------
Common Additional
Number stock, paid-in Retained
of shares at par capital earnings Total
----------- -------- ------------ ---------- -------
Balance at January 31, 1999 4,384,848 $ 4 $ 11,604 $ 3,292 $ 14,900
Net income (unaudited) 36 36
------------------------------------------------------------------------------
Balance at April 30, 1999 4,384,848 $ 4 $ 11,604 $ 3,328 $ 14,936
==============================================================================
See accompanying notes to consolidated financial statements.
5
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
For the Three Months Ended
------------------------------------------
April 30, April 30,
1999 1998
(Unaudited) (Unaudited)
----------------- ---------------
Cash flows from operating activities:
Net income $ 36 $ 145
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 569 409
Amortization of loan fees 32 -
Provision for bad debts 9 -
Gain on sales of property and equipment (5) (4)
Deferred income taxes 61 38
Imputed interest 3 8
Changes in operating assets and liabilities 52 (406)
----------------- ---------------
Net cash provided by operating activities 757 190
Cash flows from investing activities:
Proceeds from sale of assets 19 8
Business acquisitions (note 2) (1,516) (2,565)
Purchases of property and equipment, net (1,560) (365)
Proceeds from insurance 236 -
Proceeds on notes receivable, net 2 22
----------------- ---------------
Net cash used in investing activities (2,819) (2,900)
Cash flows from financing activities:
Borrowings on short-term debt 277 165
Borrowings on long-term debt 1,750 2,690
Payments on short-term debt - (745)
Payments on long-term debt (362) (175)
----------------- ---------------
Net cash provided by financing activities 1,665 1,935
Net decrease in cash and cash equivalents (397) (775)
Cash and cash equivalents at beginning of period 2,199 4,054
----------------- ---------------
Cash and cash equivalents at end of period 1,802 3,279
================= ===============
(Continued)
6
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
(In thousands)
- - April 30, April 30,
1999 1998
(Unaudited) (Unaudited)
----------------- -----------------
Supplemental disclosure of cash flow information:
Noncash investing and financing activities:
Acquisition of covenants not-to-compete
In exchange for long-term debt $ - $ 130
================= =================
Acquisitions:
Fair value of assets acquired and liabilities assumed at the date of
the acquisitions were as follows:
Accounts receivable $ - $ 34
Prepaid expenses 3 31
Billboards 1,463 2,445
Covenants not to compete 50 -
Vehicles and equipment - 55
================= =================
See accompanying notes to consolidated financial statements.
7
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. The consolidated financial statements for the three months ended April 30,
1999 and 1998 are unaudited and reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the financial position and operating
results for the interim periods. The consolidated financial statements
should be read in conjunction with the consolidated financial statements
and notes, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's annual
report on Form 10-K for the fiscal year ended January 31, 1999. Certain
amounts in the prior year financial statements have been reclassified to
conform with the current year presentation. Results of operations for
interim periods are not necessarily indicative of results that may be
expected for the year as a whole.
2. On February 15, 1999, the Company opened a new travel center located
approximately 20 miles west of Albuquerque, New Mexico on Interstate 40.
The 6,000 square foot store features a state of the art convenience store
and an "old-time" trading post. This location features EXXON branded
gasoline.
3. Acquisitions. On March 1, 1999 the Company purchased the outdoor
advertising assets of GDM Outdoor Advertising (GDM) located in Tyler, Texas
for $1,353,376. The Company financed $1,350,000 with bank debt and paid
$3,376 in cash. GDM owned and operated approximately 86 painted bulletin
faces in central Texas.
On April 30, 1999 the Company purchased the outdoor advertising of
Borderline Outdoor Advertising, Inc. (Borderline) located in Bedford, Texas
for $162,575. The Company financed $150,000 and paid $12,575 in cash.
Borderline owned and operated approximately six painted bulletin faces in
central Texas.
The acquisitions were accounted for as purchase transactions. The purchase
price was allocated to the assets acquired based on their estimated fair
values and no goodwill was recorded in connection with the purchases.
The following unaudited proforma consolidated results of operations have
been prepared as if the acquisition of GDM occurred on February 1, 1998.
The effect of the Company's acquisition of the assets of Borderline is not
material to the combined results of operations of the Company.
(in thousands except per share amounts)
Three Months Ended
April 30
(unaudited)
1999 1998
---- ----
Gross sales $ 8,056 $ 7,152
======= =======
Net income $ 27 $ 117
======= =======
Earnings per basic and
diluted share $ .01 $ .03
======= =======
8
The proforma information is presented for informational purposes only and
is not necessarily indicative of the results of operations that actually
would have been achieved had the acquisition been consummated as of that
time, nor is it intended to be a projection of future results.
4. Segment Information: Travel center operations, which represents 77 percent
of net sales of the Company, and outdoor advertising operations, which
represents 23 percent of net sales, are the Company's reportable segments
under SFAS No. 131, Disclosure about Segments of an Enterprise and Related
Information (SFAS 131). The travel center segment provides for the retail
sale of merchandise, food and gasoline to the traveling public while the
outdoor advertising segment operates billboard advertising displays which
are situated on interstate highways, primarily in the Southwestern United
States. No single customer accounted for as much as 10 percent of
consolidated revenue in any period.
Summarized financial information concerning the Company's reportable
segments as of and for the respective periods ended April 30, are shown in
the following table.
Travel Outdoor
Center Advertising Corporate
(in thousands) Operations Operations and other (1) Total
--------------- --------------- --------------- ---------------
Net sales (2)
1999 $ 6,129 1,838 - 7,967
1998 5,491 1,572 - 7,063
Segment operating
income(3)
1999 $ 275 347 (158) 464
1998 169 388 (137) 420
Depreciation and
amortization
1999 $ 133 412 24 569
1998 141 241 27 409
Segment assets
1999 $ 15,394 18,950 4,846 39,190
1998 13,424 10,103 4,533 28,060
Expenditures for segment
assets (4)
1999 $ 849 1,956 253 3,058
1998 209 2,371 10 2,590
(1) Corporate functions include certain members of executive
management, the corporate accounting and finance function and
other typical administrative functions.
(2) There were no inter-segment sales during the periods ended April
30, 1999 or 1998.
(3) Management does not allocate interest expense, interest income,
non-operating income and expense amounts or income tax expense in
the determination of the operating performance of the reportable
segments. Therefore, the total segment operating income reported
agrees to consolidated operating income for the Company.
(4) Expenditures for segment assets include assets acquired in
exchange for long-term debt which are reported as non-cash
investing and financing activities in the consolidated statements
of cash flows.
9
5. Contingency. In November 1998, a fire at the Company's headquarters
destroyed certain buildings and equipment, all of which were covered by
insurance. A balance of $62,000 is included in accounts receivable, other
that represents the net carrying value of the assets destroyed less
proceeds received from insurance through April 30, 1999. The estimated
total proceeds from insurance coverage are expected to exceed the carrying
value of the assets destroyed and management expects to record a gain when
the amount becomes reasonable estimable.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Overview
The following is a discussion of the consolidated financial condition and
results of operations of the Company as of and for the two fiscal periods ended
April 30, 1999 and 1998. This discussion should be read in conjunction with the
Consolidated Financial Statements of the Company and the related Notes included
in the Company's Form 10-K for the fiscal year ended January 31, 1999.
The Company operates in two industry segments, travel centers and outdoor
advertising. In order to perform a meaningful evaluation of the Company's
performance in each of its operating segments, the Company has presented
selected operating data which separately sets forth the revenue, expenses and
operating income attributable to each segment, and also separately sets forth
the corporate expenses of the Company which are not properly allocable to either
of the Company's segments for purposes of determining their respective operating
income. The discussion of results of operations which follows compares such
selected operating data and corporate expense data for the interim periods
presented.
The forward-looking statements included in Management's Discussion and Analysis
of Financial Condition and Results of Operations which reflect management's best
judgment based on factors currently known, involve risks and uncertainties.
Actual results could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including but not
limited to those discussed.
Results of Operations
The following table presents certain income and expense items derived from the
Consolidated Statements of Income for the three months ended April 30 (unaudited
and amounts in thousands):
10
% Incr/
1999 1998 (Decr)
---- ---- ------
Travel centers:
Gross sales $ 6,209 $ 5,552 11.8%
Discounts on sales 80 61 31.1%
---------------- ----------------
Net sales 6,129 5,491 11.6%
Cost of sales 4,213 3,856 9.3%
---------------- ----------------
1,916 1,635 17.2%
General and administrative expenses 1,508 1,325 13.8%
Depreciation and amortization 133 141 (5.7%)
---------------- ----------------
Operating income 275 169 62.7%
Outdoor advertising:
Gross sales 1,838 1,572 16.9%
Direct operating expenses 801 692 15.8%
---------------- ----------------
1,037 880 17.8%
General and administrative expenses 278 251 10.8%
Depreciation and amortization 412 241 71.0%
---------------- ----------------
Operating income 347 388 (10.6%)
Corporate and other:
General and administrative expenses (134) (110) 21.8%
Depreciation and amortization (24) (27) (11.1%)
Interest expense (430) (214) 100.9%
Other income, net 28 32 (12.5%)
---------------- ---------------
Income before income taxes 62 238 (73.9%)
Income taxes 26 93 (72.0%)
---------------- ----------------
Net income $ 36 $ 145 (75.2%)
================ ================
EBITDA(1) - Travel centers $ 408 $ 310 31.6%
================ ================
EBITDA - Outdoor advertising $ 759 $ 629 20.7%
================ ================
EBITDA - Total company $ 1,033 $ 829 24.6%
================ ================
EBITDA margin - Travel centers 6.6% 5.6%
================ ================
EBITDA margin - Outdoor advertising 41.3% 40.0%
================ ================
EBITDA margin - Total company 12.8% 11.6%
================ ================
(1) EBITDA is defined as operating income before depreciation and
amortization. It represents a measure which management believes is
customarily used to evaluate the financial performance of companies in the
media industry. However, EBITDA is not a measure of financial performance
under generally accepted accounting principals and should not be
considered an alternative to operating income or net income as an
indicator of the Company's operating performance or to net cash provided
by operating activities as a measure of its liquidity.
11
Comparison of the Three Months Ended April 30, 1999 and April 30, 1998
Travel Centers. Gross sales at the Company's Travel Centers increased by 11.8%
to $6.209 million for the three months ended April 30, 1999 from $5.552 million
for the three months ended April 30, 1998. This increase is primarily
attributable to a 28.8% increase in merchandise sales which were $2.139 million
for the three months ended April 30,1999 compared with $1.661 million for the
three months ended April 30,1998. Gasoline sales increased slightly by 2.8% to
$3.057 million for the three months ended April 30, 1999 from $2.973 for the
same period in 1998. Wholesale gasoline sales increased 25.4% to $350,000 for
the three months ended April 30, 1999, as compared to $279,000 for the three
months ended April 30, 1998. In addition, restaurant sales increased 3.8% to
$663,000 for three months ended April 30, 1999 as compared to $639,000 for the
three months ended April 30, 1998. The new travel center located approximately
20 miles west of Albuquerque on interstate 40 contributed gross sales of
$304,000 of which $110,000 were merchandise sales and $194,000 were gasoline
sales.
Cost of goods sold for the travel centers increased 9.3% to $4.213 million for
the three months ended April 30, 1999 from $3.856 million for the three months
ended April 30, 1998. Cost of goods sold as a percentage of gross revenues for
the three months ended April 30, 1999 was 67.9% as compared to 69.5% for the
three months ended April 30, 1998.
General and administrative expenses for travel centers consist of salaries,
bonuses and commissions for travel center personnel, property costs and repairs
and maintenance. General and administrative expenses for the travel centers
increased to $1.508 million for the three months ended April 30, 1999 from
$1.325 million for the three months ended April 30, 1998.
Depreciation and amortization expense decreased 5.7% to $133,000 for the three
months ended April 30, 1999 as compared to $141,000 for the three months ended
April 30, 1998. The decrease is attributable to assets fully depreciated for the
quarter ending April 30, 1999.
The above factors contributed to an overall increase in travel center operating
income of 62.7% to $275,000 for the three months ended April 30,1999 from
$169,000 for the three months ended April 30, 1998. In addition, earnings before
interest, taxes, depreciation and amortization (EBITDA) for travel center
operations increased 31.6% to $408,000 for the three months ended April 30, 1999
from $310,000 for the three months ended April 30, 1998. The EBITDA margin for
travel center operations increased to 6.6% for the three months ended April 30,
1999 as compared to 5.6% for the three months ended April 30, 1998.
Outdoor Advertising. Gross sales from the Company's Outdoor Advertising
increased 16.9% to $1.838 million for the three months ended April 30, 1999 from
$1.572 million for the three months ended April 30, 1998. The increase was
primarily attributable to the Company's acquisitions, increased usage of
available sign inventory, and increases in rates.
Direct operating expenses related to outdoor advertising consist of rental
payments to property owners for the use of land on which advertising displays
are located, production expenses and selling expenses. Selling expenses consist
primarily of salaries and commissions for salespersons and travel related to
sales. Direct operating costs increased 15.8% to $801,000 for the three months
ended April 30, 1999 from $692,000 for the three months ended April 30, 1998.
The increase is principally due to increases in sign rent, sign repairs, cost of
paper production, permits and property taxes, and utilities, most of which are
due to the assimilation of direct operating costs associated with the
acquisitions.
General and administrative expenses for outdoor advertising consist of salaries
and wages for administrative personnel, insurance, legal fees, association dues
and subscriptions and other indirect operating expenses. General and
administrative expenses, as a result of additional personnel, increased 10.8% to
$278,000 for the three months ended April 30, 1999 from $251,000 for the three
months ended April 30, 1998.
12
Depreciation and amortization expense increased 71.0% to $412,000 for the three
months ended April 30, 1999 from $241,000 for the three months ended April 30,
1998. The increase is attributable to scheduled depreciation of advertising
display structures and machinery and equipment primarily associated with
acquisitions as well as the amortization of goodwill and non-compete covenants.
The above factors contributed to the decrease in outdoor advertising operating
income of 10.6% to $347,000 for the three months ended April 30, 1999 from
$388,000 for the three months ended April 30, 1998. Earnings before interest,
taxes, depreciation and amortization (EBITDA) for outdoor advertising increased
20.7% to $759,000 for the three months ended April 30, 1999 from $629,000 for
the three months ended April 30, 1998. The EBITDA margin for outdoor advertising
increased to 41.3% for the three months ended April 30, 1999 as compared to
40.0% for the three months ended April 30, 1998.
Corporate and Other. General and administrative expenses for corporate and other
operations of the Company consist primarily of executive and administrative
compensation and benefits, accounting, legal and investor relations fees.
General and administrative expenses increased 21.8% to $134,000 for the three
months ended April 30, 1999 from $110,000 for the three months ended April 30,
1998.
Depreciation and amortization expenses for the Company's corporate and other
operations consist of depreciation associated with the corporate headquarters,
furniture and fixtures and vehicles. Depreciation and amortization expenses
decreased slightly to $24,000 for the three months ended April 30, 1999 as
compared to $27,000 for the three months ended April 30, 1998.
Interest expense increased by 100.9% to $430,000 for the three months ended
April 30, 1999 as compared to $214,000 for the three months ended April 30,
1998. The increase is primarily attributable to the increase in debt associated
with the Company's acquisitions and the new travel center that opened in
February 1999.
Non-operating income, net, primarily includes gains and/or losses from the sales
of assets, and interest income. Non-operating income, net, decreased 12.5% to
$28,000 for the three months ended April 30, 1999 as compared to $32,000 for the
three months ended April 30, 1998. Changes in non-operating income are not
material to the period.
Income before taxes decreased 73.9% to $62,000 for the three months ended April
30, 1999 as compared to $238,000 for the three months ended April 30, 1998. As a
percentage of gross revenues, income before taxes decreased to 0.8% for the
three months ended April 30, 1999 as compared to 3.3% for the three months ended
April 30, 1998.
Income taxes were $26,000 for the three months ended April 30, 1999 as compared
to $93,000 for the three months ended April 30, 1998, as the result of lower
pretax income.
The foregoing factors contributed to the Company's decrease in net income for
the three months ended April 30, 1999 to $36,000 as compared to $145,000 for the
three months ended April 30, 1998.
Liquidity and Capital Resources
At April 30, 1999, the Company had working capital of $4.404 million and a
current ratio of 2.3:1, compared to working capital of $5.495 million and a
current ratio of 2.7:1 at January 31, 1999. Net cash provided by operating
activities was $757,000 for the three months ended April 30, 1999 as compared to
$190,000 for the three months ended April 30, 1998. Net cash provided in the
current quarter is primarily attributable to increased depreciation and
amortization from acquisitions.
13
Net cash used in investing activities for the three months ended April 30, 1999
was $2.819 million, of which $1.560 million was used for purchases of property
and equipment and $1.516 was used for acquisitions. For the three months ended
April 30, 1998, net cash used for investing activities was $2.900 million, of
which $365,000 was used for purchases of property and equipment and $2.565
million was used for acquisitions.
Net cash provided by financing activities for the three months ended April 30,
1999 was $1.665 million as compared to $1.935 million for the three months ended
April 30, 1998. At April 30, 1999 and 1998 financing activities were a result of
borrowings and payments on debt.
Although the Company does not have any agreements in place, it will continue
discussions with acquisition candidates. The Company has not executed a letter
of intent or other agreement, binding or non-binding, to make such acquisitions.
Any such acquisition would be subject to the negotiation and execution of
definitive agreements, appropriate financing arrangements, performance of due
diligence, approval of the Company's Board of Directors, receipt by the Company
of unqualified audited financial statements, and the satisfaction of other
customary closing conditions. The Company would likely finance any such
acquisitions with cash, additional indebtedness, or a combination of the two.
Any commercial financing obtained for purposes of acquiring additional assets is
likely to impose certain financial and other restrictive covenants upon the
Company and increase the Company's interest expense.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The principal market risks to which the Company is exposed to are interest rates
on the Company's debt. The Company's interest sensitive liabilities are its debt
instruments. Variable interest on short-term debt equals LIBOR plus the
applicable margin. Long-term debt bears interest at variable rates based
primarily on the prime rate. Because the prime rate and LIBOR may increase or
decrease at any time, the Company is exposed to market risk as a result of the
impact that changes in these base rates may have on the interest rate applicable
to borrowings. Increases (decreases) in the interest rates applicable to
borrowings would result in increased (decreased) interest expense and a
reduction (increase) in the company's net income. Management does not, however,
believe that any risk inherent in the variable rate nature of its debt is likely
to have a material effect on the Company's financial position, results of
operations or liquidity.
14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities and Use of Proceeds. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submissions of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. Exhibits and Reports on Form 8-K.
(a). Exhibit No. Exhibit Name
----------- ------------
2.10 Purchase Agreement dated April 30, 1999
between the Registrant and Borderline
Outdoor Advertising, Inc.
27 Financial Data Schedule
(b). No reports were filed on Form 8-K during the three months ended April
30, 1999.
Signatures
Pursuant to the requirements 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.
Date: June 11, 1999
BOWLIN
Outdoor Advertising & Travel Centers Incorporated
/s/ Michael L. Bowlin
----------------------
Michael L. Bowlin, Chairman of the Board,
President and Chief Executive Officer
/s/ Nina J. Pratz
----------------------
Nina J. Pratz, Chief Financial Officer
(Principal Financial and Accounting Officer)
15