-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ffuHH/p7cVzoDUBMpIy/XvFfx6/JuGUroBGg4fD4uz5ktNjaxY+sKAicld5qD7HV 8A2/sCVD9nZ5kJrO+l8rSA== 0000013573-95-000004.txt : 19950517 0000013573-95-000004.hdr.sgml : 19950517 ACCESSION NUMBER: 0000013573-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950402 FILED AS OF DATE: 19950516 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOWL AMERICA INC CENTRAL INDEX KEY: 0000013573 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 540646173 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07829 FILM NUMBER: 95540328 BUSINESS ADDRESS: STREET 1: 6446 EDSALL RD CITY: ALEXANDRIA STATE: VA ZIP: 223121 BUSINESS PHONE: 7039416300 MAIL ADDRESS: STREET 1: P O BOX 1288 STREET 2: P O BOX 1288 CITY: SPRINGFIELD STATE: VA ZIP: 22151 10-Q 1 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 April 2, 1995 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 30, 1995 Class A Common Stock, 4,206,931 $.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 Twenty-six Weeks Ended April 2, March 27, April 2, March 27, 1995 1994 1995 1994 _______________________ __________________________ Operating Revenues Bowling and other $6,616,931 $5,994,990 $16,312,492 $15,093,418 Food and merchandise sales 2,755,689 2,465,914 6,939,290 6,417,363 _________ _________ __________ __________ 9,372,620 8,460,904 23,251,782 21,510,781 Operating Expenses Compensation and benefits 3,471,048 2,922,585 9,790,065 8,524,207 Cost of bowling and other 1,765,169 1,481,765 5,315,374 4,586,717 Cost of food and mdse sales 864,403 727,845 2,192,516 1,952,800 Depreciation and amortization 492,742 433,546 1,469,472 1,273,452 General and administrative 186,681 213,530 586,291 584,715 _________ _________ __________ __________ 6,780,043 5,779,271 19,353,718 16,921,891 Operating Income 2,592,577 2,681,633 3,898,064 4,588,890 Interest and dividend income 172,329 136,156 407,034 345,341 _________ _________ __________ __________ Earnings before provision for income taxes 2,764,906 2,817,789 4,305,098 4,934,231 Provision for income taxes 1,042,948 1,052,781 1,612,998 1,842,096 _________ _________ __________ __________ Net Earnings $1,721,958 $1,765,008 $ 2,692,100 $ 3,092,135 Earnings per share $.30 $.31* $.47* $.54* Weighted average shares outstanding 5,744,578 5,754,930* 5,749,293* 5,759,614* Dividends paid $517,060 $518,142 $1,552,423 $1,500,045 Per share, Class A $.09 $.09* $.27* $.26* Per share, Class B $.09 $.09* $.27* $.26*
*Restated for two-for-one stock split paid February 15, 1995. 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
April 2, 1995 July 3, 1994 _______________ _____________ ASSETS Current Assets Cash and cash equivalents $ 2,183,297 $ 3,468,677 Short-term investments 8,571,213 5,001,435 Inventories 630,771 586,435 Prepaid expenses and other 654,945 373,674 __________ __________ Total Current Assets 12,040,226 9,430,221 Property, Plant and Equipment less accumulated depreciation of $18,245,988 and $17,066,216 23,487,149 22,449,044 Other Assets Noncurrent marketable securities - 857,782 Securities available-for-sale 2,919,318 - Cash surrender value-life insurance 317,739 314,016 Other long-term assets 246,424 498,931 __________ __________ TOTAL ASSETS $39,010,856 $33,549,994
BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
April 2, 1995 July 3, 1994 _______________ ____________ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 689,897 $ 768,812 Accrued expenses and payroll ded 1,261,557 1,260,954 Income taxes payable 573,887 112,676 Other current liabilities 2,381,121 413,865 Current deferred income taxes 11,000 11,000 __________ __________ Total Current Liabilities 4,917,462 2,567,307 Noncurrent Deferred Income Taxes 1,818,622 1,035,000 TOTAL LIABILITIES 6,736,084 3,602,307 __________ __________ 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 - 4,202,460 and 1,333,019 shares 420,246 133,302 Class B issued and outstanding - 1,540,646 and 1,543,046 154,064 154,304 Additional paid-in capital 4,942,174 5,257,734 Unrealized gain on securities available-for-sale, net of tax At date of adoption July 4, 1994 1,337,267 - Change in unrealized gain (59,353) - Retained earnings 25,480,374 24,402,347 __________ __________ TOTAL STOCKHOLDERS' EQUITY $32,274,772 $29,947,687 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $39,010,856 $33,549,994 See notes to financial information.
BOWL AMERICA INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THIRTY-NINE WEEKS ENDED APRIL 2, 1995 AND MARCH 27, 1994
April 2, March 27, 1995 1994 Cash Flows From Operating Activities: Net earnings $2,692,100 $3,092,135 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization 1,469,472 1,273,452 Loss on abandonment of assets-net 26,442 31,770 Changes in assets and liabilities (Increase) decrease in inventories (44,336) 72,020 (Increase) decrease in prepaid and other (281,271) 113,489 Decrease in other long-term assets 248,784 59,669 Decrease in accounts payable (78,915) (75,314) Increase in accrued expenses and payroll deductions 603 174,571 Increase in income taxes payable/ refundable 461,211 745,440 Increase in other current liabilities 1,967,256 1,614,294 _________ _________ Net cash provided by operating activities $6,461,346 $7,101,526 _________ _________ Cash flows from investing activities Expenditures for property,plant,equip (2,534,019) (4,440,735) Net increase in short-term investments (3,569,778) (1,078,796) _________ _________ Net cash used in investing activities (6,103,797) (5,519,531) _________ _________ Cash flows from financing activities Payment of cash dividends (1,552,423) (1,500,045) Purchase of Class A Common Stock (73,006) (319,283) Stock issuance cost (17,500) - _________ _________ Net cash used in financing activities (1,642,929) (1,819,328) _________ _________ Net Decrease in Cash and Equivalents (1,285,380) (237,333) Cash and Equivalents, Beginning of Year 3,468,677 2,977,278 _________ _________ Cash and Equivalents, End of Period $2,183,297 $2,739,945 Supplemental Disclosures of Cash Flow Information Cash paid during the period for Income taxes $1,151,787 $1,096,657 Upon adoption of SFAS 115 as of July 4, 1994, certain investments in equity securities with an amortized value of $857,782 and a fair market value of $3,015,049 have been reclassified as available-for-sale securities. See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS For the Thirty-nine Weeks Ended April 2, 1995 1. Consolidated Financial Statements The consolidated balance sheets as of April 2, 1995, and the consolidated statements of earnings and cash flows for the three-month and nine-month periods ended April 2, 1995 and March 27, 1994 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 April 2, 1995, and for all periods presented. For a summary of significant accounting principles, which have been continued without change except as noted in Note 2 below, refer to Note 1 to the financial statements for the year ended July 3, 1994. 2. Effective July 4, 1994, the Company adopted Statement of Financial Accounting Standard No. 115 (SFAS 115) "Accounting for Certain Investments in Debt and Equity Securities". The standard requires debt and equity securities to be segregated into the following three categories: trading, held-to-maturity and available-for-sale. Trading securities are purchased and held principally for the purpose of reselling them within a short period of time. Their unrealized gains and losses are included in earnings. Debt securities classified as held-to-maturity are accounted for at amortized cost, and require the Company to have both the positive intent and ability to hold those securities to maturity. Securities not classified as either trading or held-to-maturity are considered to be available-for-sale. Unrealized gains and losses for available-for-sale securities are excluded from earnings and reported, net of deferred taxes, as a separate component of stockholders' equity until realized. Realized gains and losses on the sale of debt and equity securities are reported in earnings and determined using the adjusted cost of the specific security sold. Equity securities previously classified as noncurrent marketable securities are now classified as securities available-for-sale. The effect of adopting this standard as of July 4, 1994, was an increase in securities available-for-sale of $2,157,267, an increase in deferred income taxes of $820,000 and a net increase in stockholders' equity under a separate account titled unrealized gain on available-for-sale securities of $1,337,267. Notes to Financial Statements (Continued) These securities consisted of the following individual stocks as of July 4, 1994 and April 2, 1995: 6,194 shares of American Telephone and Telegraph 8,112 shares of Ameritech 5,304 shares of Bell Atlantic 6,893 shares of Bell South 5,324 shares of NYNEX 5,424 shares of Pactel Group 8,148 shares of Southwestern Bell 5,612 shares of US West 16,000 shares of Sprint Corporation 5,424 shares of Air Touch Communications A summary of the amortized cost and approximate fair values of equity securities available-for-sale shown in the table above as of July 4, 1994 and April 2, 1995 are as follows:
Original Unrealized Fair Cost Gain Value July 4, 1994 Securities available-for-sale $857,782 $2,157,267 $3,015,049 April 2, 1995 Securities available-for-sale $857,782 $2,061,536 $2,919,318
3. On December 6, 1994 the Board of Directors declared a two-for-one stock split, in the form of a dividend, to stockholders of record January 18, 1995 and paid February 15, 1995. Both Class A and Class B stockholders received one share of Class A Common Stock for each share of Class A or Class B held. BOWL AMERICA INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS April 2, 1995 Liquidity and Capital Resources Short-term investments consisting mainly of U.S. Treasury Bills and Notes, and cash totaled $10,755,000 at the end of the third quarter of fiscal 1995 or $2,845,000 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 at 170-seat full service, diner style restaurant. Approximately $5 million was spent for land, constructing and equipping the center, $1.6 million of which was spent in fiscal 1995. In July 1993, the Company paid $1.8 million in cash for an existing 32-lane center in Orange Park, Florida, which immediately began contributing to cash flow. Additional expenditures are also planned as the Company expands one bowling center and 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 1994 position in telecommunications stock as a further source of expansion capital. The Company adopted SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities", effective July 4, 1994. Upon application of this standard our investment in telecommunications stocks is listed at fair value and the net effect of the implementation was to increase stockholders' equity by $1.3 million. On December 6, 1994, the Board of Directors declared a two-for-one stock split in the form of a dividend which was paid on February 15, 1995. Applicable schedules for prior periods have been restated for the effect of the split. Results of Operations There was a $.30 per share profit for the thirteen-week period ending April 2, 1995, versus $.31 per share profit for the thirteen weeks ending March 27, 1994. For the current thirty-nine week period earnings per share were $.47 compared to $.54 for the same period a year ago. Approximately $.03 per share of the decrease in the current thirty-nine weeks earnings relates to the opening costs for Bowl America Gaithersburg. Current period operating expenses also include about $40,000 to write off equipment replaced as part of our modernization program. The Company operated one more center in fiscal 1994 than in fiscal 1993, and with the opening of Gaithersburg, will be operating one more center during most of fiscal 1995 than during fiscal 1994. During the fourth quarter, one center will close with the expiration of its lease. Although Bowl America Gaithersburg is our busiest center, it also has additional operating expenses as the location is open 24 hours a day. Operating revenues increased 8% for the current nine-month period, primarily because of the additional center, versus an increase of 2% in the comparable period a year ago. Weather was a factor in both the current and prior year quarters. In this year's quarter and nine-month period mild rain-free conditions resulted in reduced open play games while in last year's quarter it was unfavorable conditions of snow and ice which reduced both league and open play bowling. League linage was up this year over the same period a year ago. Food and beverage sales were up 8% reflecting six months of operation at our Gaithersburg location. Merchandise sales increased 7% in the current year period versus an increase of 11% in the prior year partially due to clearance of excess stock at reduced prices. Operating expenses increased 14% in the current nine-month period versus a 4% increase in the prior year. Increases in employee compensation and benefits account for about half of the rise in both years, the increase being primarily a result of staffing new centers in both years. Maintenance and supplies costs were up substantially due to our new locations and continuing efforts in making our bowling centers the best in appearance and customer satisfaction. Advertising costs increased 26% in the current nine-month period mainly as a result of media campaigns to promote our new center and restaurant. Utility costs were up 6% in the current thirty- nine week period versus an increase of 15% in the prior year period. The mild weather in the current period helped to offset the expense of our additional location. Last year, not only new locations, but higher than normal summer temperatures and lower than normal winter temperatures were responsible for the large increase. In the current period there was a 16% increase in real estate and personal property taxes associated with the new buildings and equipment. In the prior year period the increase in taxes was offset by decreases in insurance premiums. Increases in depreciation and amortization expense of 15% in the current period and 22% in the comparable period last year were due mainly to the opening of the new bowling centers in both years. BOWL AMERICA INCORPORATED AND SUBSIDIARIES S.E.C. FORM 10-Q April 2, 1995 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 16, 1995 Leslie H. Goldberg Date Leslie H. Goldberg President May 16, 1995 Cheryl A. Dragoo Date Cheryl A. Dragoo Controller -----END PRIVACY-ENHANCED MESSAGE-----