-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R4npwNjIbFya37DUmP7cMTbqkK+BFHFqSWi/4nhUQ8ULsIwYTlcR/+61tHz7SyKN Nh2GoxNtd3CTgMp2gt3WVg== 0000013573-99-000008.txt : 19990512 0000013573-99-000008.hdr.sgml : 19990512 ACCESSION NUMBER: 0000013573-99-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990328 FILED AS OF DATE: 19990511 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: SEC FILE NUMBER: 001-07829 FILM NUMBER: 99617484 BUSINESS ADDRESS: STREET 1: 6446 EDSALL RD CITY: ALEXANDRIA STATE: VA ZIP: 22312 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 March 28, 1999 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 25, 1999 Class A Common Stock, 3,757,171 $.10 par value Class B Common Stock 1,508,716 $.10 par value BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS PART I - FINANCIAL INFORMATION
Thirteen Weeks Ended Thirty-nine Weeks Ended March 28, March 29, March 28, March 29, 1999 1998 1999 1998 _______________________ __________________________ Operating Revenues Bowling and other $6,277,771 $6,211,143 $15,260,629 $15,288,672 Food and merchandise sales 2,430,919 2,411,610 6,027,827 6,097,810 _________ _________ __________ __________ 8,708,690 8,622,753 21,288,456 21,386,482 Operating Expenses Compensation and benefits 3,110,736 3,103,145 8,849,954 8,847,149 Cost of bowling and other 1,485,810 1,452,079 4,286,411 4,581,961 Cost of food and mdse sales 746,054 754,617 1,906,486 2,015,928 Depreciation and amortization 567,237 592,304 1,711,142 1,724,724 General and administrative 212,715 214,141 664,194 635,457 _________ _________ __________ __________ 6,122,552 6,116,286 17,418,187 17,805,219 Operating Income 2,586,138 2,506,467 3,870,269 3,581,263 Interest and dividend income 178,597 197,160 506,911 482,198 _________ _________ __________ __________ Earnings before provision for income taxes 2,764,735 2,703,627 4,377,180 4,063,461 Provision for income taxes 986,699 1,018,991 1,550,567 1,519,288 _________ _________ __________ __________ Net Earnings $1,778,036 $1,684,636 $ 2,826,613 $ 2,544,173 Earnings per share $.32 $.30 $.51 $.45 Weighted average shares outstanding 5,375,287 5,657,457 5,517,778 5,660,582 Dividends paid $571,211 $566,214 $1,696,710 $1,698,643 Per share, Class A $.105 $.10 $.305 $.30 Per share, Class B $.105 $.10 $.305 $.30
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 28, 1999 June 28, 1998 _______________ _____________ ASSETS Current Assets Cash and cash equivalents $ 2,071,426 $ 1,944,462 Short-term investments 9,127,125 8,041,136 Inventories 548,791 697,571 Prepaid expenses and other 837,775 489,758 Deferred income taxes 21,000 21,000 __________ __________ Total Current Assets 12,606,117 11,193,927 Property, Plant and Equipment less accumulated depreciation of $23,663,584 and $22,183,152 21,266,318 22,223,345 Other Assets Marketable equity securities 8,509,085 6,360,356 Cash surrender value-life insurance 386,961 383,343 Other long-term assets 246,733 274,479 __________ __________ TOTAL ASSETS $43,015,214 $40,435,450
BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
March 28, 1999 June 28, 1998 _______________ _____________ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 602,781 $ 848,330 Accrued expenses and payroll ded 996,813 776,051 Income taxes payable 187,923 - Other current liabilities 2,253,008 343,496 __________ __________ Total Current Liabilities 4,040,525 1,967,877 Noncurrent Deferred Income Taxes 3,949,542 3,176,000 TOTAL LIABILITIES 7,990,067 5,143,877 __________ __________ Stockholders' Equity Preferred stock, par value $10 a share: Authorized and unissued 2,000,000 shares Common stock, par value $.10 per share Authorized 10,000,000 shares Class A issued and outstanding - 3,757,171 and 4,120,351 shares 375,717 412,035 Class B issued and outstanding - 1,508,716 and 1,536,146 shares 150,871 153,614 Additional paid-in capital 4,273,034 4,893,504 Unrealized gain on available-for- sale securities, net of tax 4,710,518 3,335,331 Retained earnings 25,515,007 26,497,089 __________ __________ TOTAL STOCKHOLDERS' EQUITY $35,025,147 $35,291,573 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $43,015,214 $40,435,450 See notes to financial information.
BOWL AMERICA INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THIRTY-NINE WEEKS ENDED MARCH 28, 1999 AND MARCH 29, 1998
March 28, March 29, 1999 1998 Cash Flows From Operating Activities: Net earnings $2,826,613 $ 2,544,173 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization 1,711,142 1,724,724 Changes in assets and liabilities Decrease in inventories 148,780 90,300 Increase in prepaid and other (348,017) (341,681) Decrease in other long-term assets 24,128 243,525 Decrease in accounts payable (245,549) (268,797) Increase in accrued expenses and payroll deductions 220,762 130,942 Increase in income taxes payable 187,923 284,742 Decrease in income taxes refundable - 32,982 Increase in other current liabilities 1,909,512 1,913,007 _________ _________ Net cash provided by operating activities $6,435,294 $ 6,353,917 _________ _________ Cash flows from investing activities Expenditures for property,plant,equip (754,115) (926,287) Net increase in short-term investments (1,085,989) (4,090,987) _________ _________ Net cash used in investing activities (1,840,104) (5,017,274) _________ _________ Cash flows from financing activities Payment of cash dividends (1,696,710) (1,698,643) Purchase of Common Stock (2,771,516) (50,143) _________ _________ Net cash used in financing activities (4,468,226) (1,748,786) _________ _________ Net Increase (decrease) in Cash and Cash Equivalents 126,964 (412,143) Cash and Equivalents, Beginning of Year 1,944,462 1,797,656 _________ _________ Cash and Equivalents, End of Period $2,071,426 $ 1,385,513 Supplemental Disclosures of Cash Flow Information Cash paid during the period for Income taxes $1,365,935 $ 1,201,564 See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS For the Thirty-nine Weeks Ended March 28, 1999 1. Consolidated Financial Statements The consolidated balance sheet as of March 28, 1999, and the consolidated statements of earnings and cash flows for the three-month and nine-month periods ended March 28, 1999 and March 29, 1998 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 28, 1999, and for all periods presented. The interim financial statements should be read in conjunction with the financial statements and notes contained in the Company's Annual Report or Form 10-K for the year ended June 28, 1998. Operating results for the interim periods are not necessarily indicative of results for the entire year. 2. Reporting Comprehensive Income Effective June 29, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"), that establishes rules for the reporting and display of comprehensive income and its components. Adoption of SFAS 130 requires unrealized gains and losses on the Company's available-for-sale securities adjustments to be included in other comprehensive income. The components of comprehensive income are as follows: March 28, March 29, 1999 1998 Net Income $2,826,613 $2,544,173 Other comprehensive income: Unrealized gain on available- for sale equity securities, net of tax 1,375,187 1,232,868 _________ _________ Comprehensive income $4,201,800 $3,777,041 ========= ========= BOWL AMERICA INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS March 28, 1999 Liquidity and Capital Resources Short-term investments consisting mainly of U.S. Treasury Bills and Notes, and cash totaled $11,199,000 at the end of the third quarter of fiscal 1999 or $1,685,000 higher than at the beginning of the quarter. The Company has purchased, for a cost of $2,778,00, 390,610 shares of its previously outstanding common stock in the fiscal year, expending $1,190,000 during the third quarter for 174,200 shares of Class A common stock. These purchases have reduced the usual seasonal increase in cash. Current liabilities include $2 Million in league deposits of prize fund monies which are returned to the leagues at the end of the bowling season, generally during the fourth quarter. The Company has signed a contract with contingencies for approval of permits on one of two sites mentioned in the previous quarterly filing and is continuing to pursue a contract on an additional site. The Company is actively seeking property for additional locations. Cash and cash flow are sufficient to finance all currently planned purchases and construction. The Company's position in telecommun- ications stocks is an additional source of expansion capital. These securities are carried at their fair value on the last day of the quarter. For the nine month period ending March 28, 1999, the market value increased by approximately $2,150,000 resulting in an unrealized gain of $1,375,000. There were no transactions in these stocks. While no factors requiring 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. During the fourth quarter of fiscal 1999, the Company will close a center operating with negative cash flow. Results of Operations After several years of changes in the number of operating locations, the current year comparisons reflect the same twenty-three centers in operation. All of the prior year's percentage changes were influenced by the change in the number of centers of operation. There was a $.32 per share profit for the thirteen-week period ending March 28, 1999, versus $.30 per share profit for the thirteen weeks ending March 29, 1998. For the current thirty-nine week period earnings per share were $.51 compared to $.45 for the comparable period a year ago. Operating revenues increased 1% for the current three-month period but were flat for the current nine-month period versus an increase of 1% and an increase of 2% respectively in the period year. Ice and snow caused closings at some locations at the beginning of the quarter resulting in lost revenues and additional costs for removal. However tournament activity has helped to offset some of the loss. Bowling and other income increased primarily due to a higher average price per game and higher shoe rental revenue. Food and beverage sales were up 2% in the current quarter, but were flat through the nine-month period. Cost of food and beverage sales followed the same pattern. Operating expenses excluding depreciation and amortization increased less than 1% in the three-month period versus a decrease of 3% in the prior year period. The nine-month periods for both years showed a 2% decrease. Employee compensation and benefits were flat in the current period and down 2% in the prior year nine-month period. Advertising costs increased 21% from the prior year quarter mainly due to our newspaper advertising campaign. Supplies and services expense decreased 8% for the nine months. Glow-in-the-dark bowling and amusement game supplies were responsible for the increase last year. Equipment expense was up 15% in the year-to-date period due to increased pin and rental shoe costs. Utility costs increased 1% in the current quarter with a 2% decrease for the nine-month period compared to an 11% and 4% decrease in the respective prior year periods. Depreciation and amortization expense decreased 1% in the year-to-date period versus an increase of 14% in the prior year nine-month period. The increase last year related to the purchases of amusement games and glow-in-the-dark bowling equipment and the Dranesville expansion. Rent expense for the quarter was flat. YEAR 2000 Bowl America considers Year 2000 issues to be a priority. The Company has assessed its computer and related systems and has identified those which require time and expenditures to become year 2000 ready. Bowl America does not rely heavily on date sensitive hardware or software for its internal operations. The operating system of the corporate computer system is currenty compliant as is most of the software used by the Company. Upgrades to some of the automatic scoring systems in use in the bowling centers will be required. Updates and replacements are expected to be completed during the summer after winter leagues have completed their schedules. The cost of remediation does not appear to be material. The Company continues to receive written verification from vendors and suppliers with whom it has material relationships that they are addressing the Year 2000 issue and expect to be 2000 ready by mid 1999. Currently 20% of our material vendors respond that they are now compliant, about half expect to be by July 1999 and the remainder later in the year. S.E.C. FORM 10-Q March 28, 1999 PART II - OTHER INFORMATION An 8K was filed in March 1999, with respect to the authorization of the Company's president to purchase at his discretion from time to time up to 600,000 shares of the Company's common stock on its behalf. 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 10, 1999 Leslie H. Goldberg Date Leslie H. Goldberg President May 10, 1999 Cheryl A. Dragoo Date Cheryl A. Dragoo Controller EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 U.S. DOLLARS 1 9-MOS JUN-27-1999 MAR-28-1999 2,071 8,509 0 0 549 12,606 44,930 23,664 43,015 4,040 0 0 0 527 34,499 43,015 6,028 21,288 1,906 17,418 0 0 0 4,377 1,551 2,826 0 0 0 2,826 .51 .51
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