10-Q 1 rsept05q.txt FORM 10-Q AND EXHIBITS FOR PERIOD ENDED OCTOBER 2, 2005 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: OCTOBER 2, 2005 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 a 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 an accelerated filer (as defined in Exchange Act Rule 12 b-2). Yes __ No 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 last practicable date. Shares Outstanding at October 30, 2005 Class A Common Stock, $.10 par value 3,668,518 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 October 2, September 26, 2005 2004 Operating Revenues: Bowling and other $4,561,506 $4,222,753 Food, beverage and merchandise sales 1,815,096 1,677,331 _________ _________ 6,376,602 5,900,084 Operating Expenses: Employee compensation and benefits 3,185,029 2,962,691 Cost of bowling and other services 1,723,665 1,475,184 Cost of food, beverage and merchandise sales 580,851 523,564 Depreciation and amortization 376,326 400,633 General and administrative 216,595 203,271 _________ _________ 6,082,466 5,565,343 Operating Income 294,136 334,741 Interest and dividend income 156,351 104,003 _________ _________ Earnings before provision for income taxes 450,487 438,744 Provision for Income Taxes 152,000 147,900 _________ _________ Net Earnings $ 298,487 $ 290,844 ========= ========= Earnings per share-basic and diluted $ .06 $.06 Weighted average shares outstanding 5,137,076 5,137,773 Dividends paid $ 719,177 $ 693,600 Per share, dividends paid, Class A $.14 $.135 Per share, dividends paid, Class B $.14 $.135 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) Net Earnings $ 298,487 $ 290,844 Other comprehensive earnings, net of tax Unrealized gain (loss) on available-for -sale securities (44,651) 271,921 _________ ________ Comprehensive earnings $ 253,836 $ 562,765 ========= ======== The operating results for the thirteen (13) week period ending October 2, 2005 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 October 2, July 3, 2005 2005 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,618,808 $ 1,707,385 Short-term investments 8,516,179 11,273,191 Inventories 772,635 626,452 Prepaid expenses and other 388,837 491,647 Income taxes refundable 40,467 132,467 __________ __________ TOTAL CURRENT ASSETS 12,336,926 14,231,142 LAND, BUILDINGS & EQUIPMENT Net of accumulated depreciation of $29,409,224 and $29,056,847 24,826,913 23,440,265 OTHER ASSETS: Marketable equity securities 4,160,049 4,208,421 Cash surrender value-life insurance 518,462 516,248 Other 87,180 152,922 __________ __________ TOTAL OTHER ASSETS 4,765,691 4,877,591 TOTAL ASSETS $41,929,530 $42,548,998 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 917,175 $ 1,130,017 Accrued expenses 688,725 1,127,639 Dividends payable 719,177 719,177 Other current liabilities 904,986 372,932 Current deferred income taxes 247,936 247,936 __________ __________ TOTAL CURRENT LIABILITIES 3,477,999 3,597,701 LONG-TERM DEFERRED COMPENSATION 71,475 71,475 NONCURRENT DEFERRED INCOME TAXES 2,661,970 2,688,160 __________ __________ TOTAL LIABILITIES 6,211,444 6,357,336 __________ __________ 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 3,668,518 and 3,669,311 shares 366,852 366,932 Class B issued and outstanding 1,468,462 shares 146,846 146,846 Additional paid-in capital 7,480,745 7,479,072 Accumulated other comprehensive earnings- Unrealized gain on available-for-sale securities, net of tax 2,150,063 2,194,714 Retained earnings 25,573,580 26,004,098 __________ __________ TOTAL STOCKHOLDERS'EQUITY 35,718,086 36,191,662 __________ __________ TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $41,929,530 $42,548,998 ========== ========== See notes to condensed consolidated financial statements. BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Thirteen Weeks Ended October 2, September 26, 2005 2004 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 298,487 $ 290,844 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 376,326 400,633 Changes in assets and liabilities (Increase) decrease in inventories (146,183) 8,346 Decrease (increase) in prepaid & other 94,575 (55,612) Decrease in income taxes refundable 92,000 - Increase in income taxes payable - 2,017 Decrease in other long-term assets 63,528 47,306 Decrease in accounts payable (212,842) (108,923) Decrease increase in accrued expenses (438,914) (157,608) Increase in other current liabilities 532,054 426,437 _________ _________ Net cash provided by operating activities 659,031 853,440 _________ _________ Cash flows from investing activities Expenditures for land, buildings and equip(1,762,974) (239,196) Net sales & maturities of short-term investments 2,734,543 1,188,431 _________ _________ Net cash provided by investing activities 971,569 949,235 _________ _________ Cash flows from financing activities Payment of cash dividends (719,177) (693,600) _________ _________ Net cash used in financing activities (719,177) (693,600) _________ _________ Net Increase in Cash and Equivalents 911,423 1,109,075 _________ _________ Cash and Equivalents, Beginning of quarter 1,707,385 1,320,643 _________ _________ Cash and Equivalents, End of quarter $2,618,808 $2,429,718 ========= ========= Supplemental Disclosures of Cash Flow Information Cash Paid During the Quarter for Income taxes $ 60,000 $150,000 Non-cash Investing and Financing Activities: Settlement of employee stock loan by acquisition of common stock $2,845 - Repayment of employee loans by acquisition of common stock $8,257 - See notes to condensed consolidated financial information. BOWL AMERICA INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the Thirteen Weeks Ended October 2, 2005 (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 July 3, 2005 has been derived from the Company's July 3, 2005 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 July 3, 2005. 2. Marketable Equity Securities Marketable equity securities, available for sale, are carried at fair value in accordance with the provisions of SFAS No. 115. At October 2, 2005, the fair value of these securities was $4,160,049, with an original cost of $757,054, resulting in an unrealized gain of $3,402,995. The telecommunications stocks included in the portfolio as of October 2, 2005 were: 220 shares of Agere 3,946 shares of Alltel 669 shares of Avaya 27,572 shares of Bell South 8,028 shares of Lucent Technologies 9,969 shares of Qwest Communications 45,580 shares of SBC 40,000 shares of Sprint 18,784 shares of Verizon 13,560 shares of Vodafone/AirTouch 3. Commitments and Contingencies At October 2, 2005, contracts relating to the construction and equipping of Bowl America Short Pump in Richmond, Virginia, totaled approximately $4,770,000, of which approximately $2,572,000 had been paid. In September 2004, the Company signed a contract for approximately $770,000 for site preparation relating to the building, to be paid as work is completed. Revisions to the contract through October 2, 2005, increased the contract amount to $1,152,000, of which $567,000 has been paid. In February 2005, the Company signed a contract for the purchase of bowling equipment for the new location totaling approximately $379,000. Delivery and installation is expected in the second quarter of fiscal 2006. During the quarter ended March 2005, the Company signed a contract for the construction of the building shell for approximately $1,526,000. Additional requests and revisions have increased the contract amount, at October 2, 2005, to approximately $3,037,000, of which approximately $2,005,000 has been paid. In July 2005 the Company signed a purchase order for $140,000 for the purchase of point-of-sale systems to be installed in the first quarter of fiscal 2006. All systems have been installed and full payment was made on this contract prior to October 2, 2005. In July 2005 the Company placed purchase orders totaling $438,000 for bowling equipment including pins, expected to be in place in the second quarter of fiscal 2006. Approximately $214,000 for pins had been paid through October 2, 2005 and payment is due in full ten days after acceptance of the working equipment. In August 2005, the Company signed a purchase order for the purchase restaurant point-of-sale cash systems for approximately $102,000, all of which had been paid prior to October 2, 2005. Installation of these systems is expected to be completed in the second quarter of fiscal 2006. 4. Reclassifications Certain previous year amounts have been reclassified to conform with current year presentation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Short-term investments, consisting mainly of U.S. Treasury Bills and Notes, and cash totaled $11,135,000 at the end of the first quarter of fiscal 2006 or $1,845,000 lower than at the beginning of the quarter. The resulting decrease in working capital from $10,633,000 at July 3, 2005, to $8,859,000 at October 2, 2005, was primarily due to the Company's investment in our new location. In the three-month period ended October 2, 2005, the Company expended $256,000 for purchase of equipment and approximately $1,460,000 relating to the construction of our new bowling center in Henrico County, Virginia. The table below includes purchase obligations for the site preparation, building and equipment for that location, Bowl America Short Pump, of approximately $2,198,000, and for remaining bowling pin purchases of approximately $22,000. See Note 3 of the Notes to Condensed Consolidated Financial Statements for the period ended October 2, 2005 for more detail on these obligations. The Company is actively seeking property for additional locations. Cash and cash flow are sufficient to finance all currently contemplated purchases and construction. The Company has also maintained its fiscal year end 2005 position in marketable equity securities, primarily telecommunications stocks, as 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 October 2, 2005, the market value decreased by $48,000 to approximately $4,160,000. ------------------------------------------------------------------------------ Contractual Total Less Than 1-3 3-5 More Than obligations 1 Year Years Years 5 Years ______________________________________________________________________________ Operating lease obligations $1,486,251 $ 276,761 $553,522 $380,491 $275,477 Purchase obligations $2,220,000 $2,220,000 ______________________________________________________________________________ Total $3,706,251 $2,496,761 $553,522 $380,491 $275,477 ============================================================================== 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 29, 2005, the Board of Directors declared a cash dividend of $.14 per share on its Class A and Class B stock to holders of record on October 26, 2005, payable November 16, 2005. RESULTS OF OPERATIONS Eighteen centers were in operation in both the current year and prior year first quarters. Net earnings were $298,487 in the quarter ended October 2, 2005 and $290,844 in the quarter ended September 26, 2004, or $.06 per share for the first quarters of both fiscal 2006 and 2005. Operating revenues increased 8% or $476,000 in the fiscal year 2006 first quarter versus a decrease of 4% or $245,000 in the prior year comparable three-month period. Bowling and other revenue increased 8% or $339,000 in the current year fiscal quarter versus a decline of 2% or $102,000 in the prior fiscal year quarter. The current year quarter included one more week of league bowling than the quarter ended September 26, 2004; however the fourth quarter of fiscal 2006 will have one fewer week of league bowling and thirteen weeks of business, one fewer week than the fiscal year 2005 fourth quarter. An increase in open play traffic and a higher average game rate in the current year first quarter also contributed to favorable revenue comparison. During the quarter ended September 26, 2004, hurricanes Charlie, Frances and Jeanne interrupted business at our Florida locations. The 2005 hurricanes Katrina and Wilma had little impact on these locations. Food, beverage and merchandise sales were up 8% or $138,000 in the current three-month period due to the increased traffic and down 8% or $142,000 in the comparable prior year period. Cost of sales increased in response to the higher sales. Operating expenses excluding depreciation and amortization were up 10% or $541,000 in the current three-month period and down 6% or $352,000 in the comparable period last year. Employee compensation and benefits were up 7% in the current quarter and down 7% in the prior year quarter. Cost of bowling and other services increased 17% or $248,000 in the first quarter of fiscal 2006 versus a decrease of 3% or $45,000 in the quarter ended September 26, 2004. Advertising and promotion expense increased 44% or $61,000 in the quarter ended October 2, 2005 and 21% or $24,000 in the prior year comparable quarter. Maintenance repair expense was up 48% or $80,000 in the current year quarter. The prior year comparable quarter showed a decrease of 21% or $16,000 as the changeover to all plastic lanes eliminated the cost of resurfacing. Supplies and services expenses increased 8% for the current year three-month period and 2% in last year's three-month period. Utility costs were up 9% and 4% in the current year and prior year quarters, respectively. Rent expense decreased 8% in the current year quarter and was flat in the prior year comparable period. Insurance expense excluding health insurance was up 12% in the current year quarter versus a decrease of 2% in last year's comparable quarter. Depreciation and amortization expense decreased 6% in the current year period and increased 1% in the comparable period last year. Interest and dividend income increased 50% or $52,000 from the prior year period due to higher interest rates on investments. 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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk. Our short-term investments and certain cash equivalents are subject to interest rate risk. We manage this risk by maintaining an investment portfolio of available-for-sale instruments with high credit quality and relatively short average maturities. The fair value of marketable debt securities held was $8,516,000 and $10,528,000 at October 2, 2005 and September 26, 2004 respectively. The fair value of certain fixed rate debt securities will change depending on movements in interest rates. Declines in interest rates will affect our interest income. Based on our portfolio of debt securities at October 2, 2005, a 10% decline in the average yield would have no material impact on annual interest income. ITEM 4. 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 October 2, 2005. 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 October 2, 2005, 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 October 2, 2005 PART II - OTHER INFORMATION Item 6 - Exhibits (a) Exhibits 20 Press release issued November 15, 2005 (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 15, 2005 By: Leslie H. Goldberg Leslie H. Goldberg, President Date: November 15, 2005 By: Cheryl A. Dragoo Cheryl A. Dragoo, Controller EX-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 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 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 controls 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 15, 2005 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 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 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 controls 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 15, 2005 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. 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 October 2, 2005, (the "Report") fully complies with the requirements of Section 13(a) of the Securities 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 Chief Executive Officer Cheryl A. Dragoo Chief Financial Officer Date: November 15, 2005 Exhibit 20 Exhibit 20 to Form 10-Q Press Release Issued November 15, 2005 For Immediate Release November 15, 2005 BOWL AMERICA REPORTS FIRST QUARTER EARNINGS Bowl America Incorporated today reported first quarter earnings per share were $.06, unchanged from the prior year comparable period. The current year quarter included one more week of league bowling. Increased open play over last year's quarter also helped revenues, but these favorable factors were offset by high expenses including advertising and promotion costs and maintenance repairs. The higher traffic continued into the second quarter with strong October sales, possibly helped by rainy weather. The Company's new location, under construction in the Richmond, Virginia area, is expected to contribute to third and fourth quarter earnings. However, the fourth quarter comparison will lose the advantage of a week of league bowling and the 14th week of business reflected in fiscal 2005. Bowl America Short Pump in Richmond, Virginia, will be the Company's 19th bowling center. Bowl America's Class A Common Stock trades on the American Stock Exchange under the symbol BWLA. The Company's S.E.C. Form 10-Q is available at the Company's website www.bowlamericainc.com. * * * * BOWL AMERICA INCORPORATED Results of Operations (unaudited) Thirteen weeks ended October 2, September 26, 2005 2004 Revenues Bowling and other $4,561,506 $4,222,753 Food, beverage & merchandise sales 1,815,096 1,677,331 _________ _________ 6,376,602 5,900,084 Operating expenses excluding depreciation and amortization 5,706,140 5,164,710 Depreciation and amortization 376,326 400,633 Interest & dividend 156,351 104,003 Earnings before taxes 450,487 438,744 Net Earnings $ 298,487 $ 290,844 Weighted average shares outstanding 5,137,076 5,137,773 EARNINGS PER SHARE $.06 $.06 SUMMARY OF FINANCIAL POSITION (unaudited) Dollars in Thousands 10/02/05 9/26/04 ASSETS Total current assets including cash and short-term investments of $11,135 & $12,958 $12,337 $14,184 Property and investments 29,592 26,586 ______ ______ TOTAL ASSETS $41,929 $40,770 LIABILITIES AND STOCKHOLDERS'EQUITY Total current liabilities $ 3,478 $ 3,215 Other liabilities 2,733 2,790 Stockholders' equity 35,718 34,765 ______ ______ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $41,929 $40,770