BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INC, SB-2/A, 1996-12-17

BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INC
SB-2/A, 1996-12-17
MISC GENERAL MERCHANDISE STORES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1996.
REGISTRATION NO. 333-12957

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2

AMENDMENT NO. 5
TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

BOWLIN OUTDOOR ADVERTISING
& TRAVEL CENTERS INCORPORATED
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

Nevada 5399 85-0113644
---------- ---------- ----------
(STATE OF INCORPORATION) (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)

150 Louisiana N.E.,
Albuquerque, New Mexico 87108,
(505) 266-5985
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE OF BUSINESS)

----------

Michael L. Bowlin
Chairman of the Board and President
150 Louisiana N.E.
Albuquerque, New Mexico 87108
(505) 266-5985
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

----------

COPIES TO:
Christopher D. Johnson, Esq. Steven D. Pidgeon, Esq.
Squire, Sanders & Dempsey L.L.P. Snell & Wilmer L.L.P.
Two Renaissance Square One Arizona Center
40 North Central Avenue, Suite 2700 Phoenix, Arizona 85004
Phoenix, Arizona 85004 Telephone: (602) 382-6252
Telephone: (602) 528-4046 FAX: (602) 382-6070
FAX: (602) 253-8129

----------

Approximate date of proposed sale to the public: As soon as practicable from
time to time after this Registration Statement becomes effective.

----------

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same Offering. [ ] __________

If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE>
<TABLE>
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED

CROSS REFERENCE SHEET

(Showing Location in the Prospectus of Information
Required by Items 1 through 23, Part I, of Form SB-2)
<CAPTION>

ITEM IN FORM SB-2 PROSPECTUS CAPTION
- ----------------- ------------------
<S> <C>
1. Front of Registration Statement and Outside
Front Cover of Prospectus .............................. Facing Page of Registration Statement; Outside Front Cover Page of
Prospectus

2. Inside Front and Outside Back Cover Pages
of Prospectus .......................................... Inside Front Cover Page of Prospectus; Additional Information; Outside
Back Cover Page of Prospectus

3. Summary Information and Risk Factors ................... Prospectus Summary; Risk Factors

4. Use of Proceeds ........................................ Prospectus Summary; Risk Factors; Use of Proceeds

5. Determination of Offering Price ........................ Outside Front Cover Page of Prospectus; Risk Factors; Underwriting

6. Dilution ............................................... Dilution

7. Selling Security Holders ............................... *

8. Plan of Distribution ................................... Outside Front Cover Page of Prospectus; Underwriting

9. Legal Proceedings ...................................... Business

10. Directors, Executive Officers, Promoters and
Control Persons ........................................ Management

11. Security Ownership of Certain Beneficial Owners
and Management ......................................... Principal Stockholders

12. Description of Securities .............................. Risk Factors; Description of Securities

13. Interest of Named Experts and Counsel .................. *

14. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities ......................... Executive Compensation; Underwriting

15. Organization Within Last 5 Years ....................... *
<PAGE>
16. Description of Business ................................ Prospectus Summary; Risk Factors; Business

17. Management's Discussion and Analysis or Plan
of Operation ........................................... Management's Discussion and Analysis of Financial Condition and
Results of Operations

18. Description of Property ................................ Properties

19. Certain Relationships and Related Transactions ......... Certain Transactions

20. Market for Common Equity and Related
Stockholder Matters .................................... Outside Front Cover Page of Prospectus; Prospectus Summary; Risk
Factors; Dividends; Description of Securities; Underwriting

21. Executive Compensation ................................. Management; Executive Compensation

22. Financial Statements ................................... Prospectus Summary; Selected Consolidated Financial Data; Financial
Statements

23. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure .................... Changes in Registrant's Certifying Accountants
<FN>
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* Omitted because Item is not applicable.
</FN>
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED DECEMBER 17, 1996
PROSPECTUS

[LOGO]
BOWLIN(TM)
OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED

1,100,000 SHARES OF COMMON STOCK

All of the shares of Common Stock, $.001 par value (the "Common Stock"),
being offered hereby (the "Offering") are being sold by BOWLIN Outdoor
Advertising & Travel Centers Incorporated (together with its subsidiaries and
predecessor, the "Company" or "Bowlin"). Prior to the Offering, there has been
no public market for the Common Stock. The Company's Common Stock has been
approved for quotation on the Nasdaq National Market ("Nasdaq") under the symbol
"BWLN." It is currently anticipated that the initial public offering price will
be between $7.50 and $8.50 per share. See "UNDERWRITING" for a discussion of
factors considered in determining the initial public offering price.

----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCY NOR HAS THE COMMISSION
OR ANY SUCH AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

----------

THESE SECURITIES INVOLVE SUBSTANTIAL RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.

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Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
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Per Share
- --------------------------------------------------------------------------------
Total(3)
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(1) Excludes (i) a nonaccountable expense allowance payable by the Company to HD
Brous & Co., Inc. (the "Representative") and (ii) a fee of $132,000
($151,800 if the Over-Allotment Option is exercised) payable by the Company
to its financial consultant, Miller Capital Corporation. The Company has
also agreed to (i) issue options to the Representative (the
"Representative's Option") to purchase up to 93,500 shares of Common Stock
at an exercise price per share equal to 120% of the initial public offering
price and (ii) grant to the Representative certain registration rights with
respect to the securities underlying the Representative's Option. The
Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, in connection with this Offering. See "UNDERWRITING."

(2) Before deducting expenses of the Offering payable by the Company estimated
at $535,000 ($558,000 if the Over-Allotment Option is exercised in full),
including the Representative's nonaccountable expense allowance and the fee
payable to the Company's financial consultant.

(3) Assumes no exercise of the Underwriters' option, exercisable within 30 days
from the date of this Prospectus, to purchase up to 165,000 additional
shares of Common Stock on the same terms, solely to cover over-allotments
(the "Over-Allotment Option"). If the Over-Allotment Option is exercised in
full, the total Price to Public, Underwriting Discounts and Commissions and
Proceeds to Company will be $ , $ and , respectively. See
"UNDERWRITING."

The shares of Common Stock are being offered severally by the Underwriters,
subject to prior sale, when, as and if delivered to and accepted by the
Underwriters and subject to the right to reject any order in whole or in part
and certain other conditions. It is expected that delivery of the shares will be
made against payment therefor at the offices of HD Brous & Co., Inc., Great
Neck, New York, or the facilities of the Depository Trust Company, on or about
, 1996.

HD BROUS & CO., INC.

The date of this Prospectus is , 1996.
<PAGE>
[Image Omitted - Map of Southwestern United States showing location of
Registrant's 14 travel centers, one free - standing Dairy Queen Restaurant and
Corporate Headquarters]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

CITGO(R), Dairy Queen(R), Dairy Queen/Brazier(R), Stuckey's(R), Conoco(R),
Chevron(R), Texaco(R) and Diamond Shamrock(R) and certain other names or marks
contained in this Prospectus are the registered trademarks of entities other
than the Company.
<PAGE>
[Image Omitted - Pictures of Company's outdoor advertising displays]
<PAGE>
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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information and Consolidated Financial Statements, including the Notes thereto,
appearing elsewhere in this Prospectus. Investors are urged to read this
Prospectus in its entirety, particularly the information set forth in "RISK
FACTORS." Unless otherwise indicated, all information related to the Company in
this Prospectus assumes no exercise of the Over-Allotment Option, the
Representative's Option or any of the options granted under the Company's 1996
Stock Option Plan.

THE COMPANY

COMPANY OVERVIEW

The Company is a regional leader in the operation of travel centers and
outdoor advertising displays dedicated to serving the traveling public in rural
and smaller metropolitan areas of the Southwestern United States. The Company's
tradition of serving the public dates back to 1912 when the Company's founder,
Claude M. Bowlin, started trading goods and services with Native Americans in
New Mexico. Bowlin currently operates fourteen full-service travel centers and
one free-standing Dairy Queen/Brazier restaurant along interstate highways in
Arizona and New Mexico where there are generally few gas stations, convenience
stores or restaurants. The Company advertises its travel centers through a
network of over 300 outdoor advertising display faces. In addition to a variety
of unique Southwestern merchandise, the Company's travel centers offer brand
name food and gasoline to the traveling public. The Company believes that its
"co-branding" strategy of offering complementary brand name food and gasoline
products results in increased customer traffic and it intends to continue to
actively pursue additional co-branding opportunities.

In addition to its travel centers, the Company operates over 1,700 revenue
generating outdoor advertising display faces for third party customers such as
hotels and motels, restaurants and consumer product manufacturers. These display
faces are strategically situated along interstate highways primarily in Arizona
and New Mexico and, to a lesser extent, in Colorado, Oklahoma and Texas. In
addition to the leasing of advertising space, Bowlin provides a comprehensive
range of outdoor advertising services to its clients, including customized
design and production services. Although the Company faces substantial
competition in each of its operational areas, the Company believes that few of
its competitors offer the same breadth of products and services dedicated to the
traveling public.

The Company has a consistent history of profitable operations and revenue
growth. The Company's gross revenues have grown from approximately $12.0 million
in fiscal 1986 to in excess of $23.0 million in fiscal 1996. Gross revenues and
net income for the nine months ended October 31, 1996 were $19.2 million and
$686,000, respectively, representing increases of 8.1% and 66.5%, respectively,
over the same period in fiscal 1996. See "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

Travel Centers. The Company opened its first travel center in 1953 and has
since expanded to fourteen travel centers and one free-standing Dairy
Queen/Brazier restaurant in Arizona and New Mexico. Each of the Company's travel
centers has a unique Southwestern theme and extensive theme- oriented billboard
advertising is used to attract customers into the travel centers. The Company
periodically upgrades and renovates its travel centers, thereby fostering a
positive image with the traveling public. The Company believes that its
co-branding and facilities upgrade practices result in greater repeat patronage,
and increase the likelihood that customers will extend their visits and take
advantage of the many additional goods and services available at the travel
centers. See "BUSINESS -- Business Strategy -- Travel Services Business
Strategy."

Since 1982, the Company has offered brand name food and beverages at selected
travel centers under the Dairy Queen, Dairy Queen/Brazier and Stuckey's trade
names. The food offered at the Company's travel centers ranges from ice cream
and snack foods at some locations to full-service restaurants at others.
Revenues from food sales accounted for 17%, 15% and 13%, respectively, of the
Company's total

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3
<PAGE>
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revenues in fiscal years 1995 and 1996 and the nine months ended October 31,
1996. See "BUSINESS -- Business Operations -- Travel Center Operations."

The Company offers brand name gasolines such as CITGO, Conoco, Chevron,
Texaco and Diamond Shamrock at its travel centers. Consistent with its emphasis
upon marketing brand name products, the Company has been granted distribution
rights for CITGO gasoline products. CITGO is one of the fastest growing brand
name gasoline producers in the United States. The Company has converted six of
its existing travel center fuel facilities to CITGO brand "superpumper"
stations. The Company also intends to pursue wholesale marketing of CITGO
gasoline to other retailers in Arizona and New Mexico as an additional source of
revenues. Revenues from gasoline sales at the Company's travel centers accounted
for approximately 42% of the Company's total revenues in each of fiscal years
1995 and 1996, and 46% in the nine months ended October 31, 1996. See "BUSINESS
- -- Business Strategy -- Travel Services Business Strategy" and "-- Growth
Strategy -- Gasoline Wholesaling."

In addition to offering food and gasoline, each of the Company's travel
center gift shops offers an extensive variety of Southwestern merchandise and
collectibles. The merchandise ranges from inexpensive Southwestern gifts and
souvenirs to unique hand-crafted jewelry, rugs, pottery, kachina dolls and other
gifts crafted and engraved specially for Bowlin by several Native American
tribes. Revenues from merchandise sales at the Company's travel centers
accounted for 30%, 31% and 27%, respectively, of the Company's total revenues in
fiscal years 1995 and 1996 and the nine months ended October 31, 1996. See
"BUSINESS -- Business Strategy -- Travel Service Business Strategy."

Outdoor Advertising. The Company operates over 1,700 revenue generating
advertising display faces, primarily in Arizona and New Mexico and, to a lesser
extent, in Colorado, Oklahoma and Texas. The Company also offers a complete,
full-service source for graphic design and production for the outdoor
advertising displays it operates. The Company uses local account representatives
who focus on marketing the Company's advertising services to local and regional
advertisers, allowing the Company to maintain a diverse client base and limiting
reliance on national advertising accounts. Unlike many of its competitors, the
Company does not rely to a significant degree upon tobacco advertisers. See
"BUSINESS -- Business Strategy -- Outdoor Advertising Business Strategy."

The Company's outdoor advertising displays are strategically located in rural
and smaller metropolitan areas in the Southwest, where the dispersion of
population, outdoor lifestyles and leading tourist destinations have created a
strong dependence on highway travel. In these markets, competition for site
acquisitions is less intense, purchase prices are more favorable and government
regulations are generally less onerous as compared to densely populated
metropolitan markets. The outdoor advertising operations of the Company have
experienced consistent growth over the past several years, accounting for 10.5%,
12% and 13%, respectively, of the Company's total revenues in fiscal years 1995
and 1996 and the nine months ended October 31, 1996. The Company believes it is
one of the largest outdoor advertising companies in rural Southwestern markets.
In 1995, the Company was ranked by the Outdoor Advertising Association of
America ("OAAA") as one of the top 40 outdoor advertising companies in the
United States in terms of gross revenues. See "BUSINESS -- Industry Overview --
Outdoor Advertising Industry" and "-- Business Strategy -- Outdoor Advertising
Business Strategy."

GROWTH STRATEGY

Travel Centers. The Company is committed to expanding its travel center
operations through internal development as well as strategic acquisitions of
travel center assets located in popular tourist destinations, along heavily
traveled interstate corridors and in smaller metropolitan areas. The Company is
currently in the process of developing new full service travel centers with
CITGO superpumper dispensing facilities at Benson and Picacho Peak, Arizona and
near Albuquerque, New Mexico, and expects all three of these centers to be
operational by the end of fiscal 1998. The Company also intends to continue to
capitalize on its co-branding strategy by acquiring rights to additional brand
name food concepts. See "BUSINESS -- Growth Strategy -- Travel Centers."

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4
<PAGE>
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Gasoline Wholesaling. The Company's distributorship relationship with CITGO
Petroleum Corporation creates an additional source of potentially significant
revenues and the Company plans to aggressively market the CITGO line of
petroleum products through its own travel centers and as a wholesaler to other
retailers in New Mexico and Arizona. The Company has hired a Petroleum Manager
to develop a plan for marketing the Company's wholesale CITGO gasoline products
to such retailers. The Company intends to begin sales of such products in fiscal
1997 at prices equal to a certain percentage over the then current price at
which it purchases them from CITGO. See "BUSINESS -- Growth Strategy -- Gasoline
Wholesaling."

Outdoor Advertising. As in the case of its travel centers, the Company plans
to expand its outdoor advertising operations through internal development as
well as acquisition. Through internal development, the Company plans to add
approximately 100 new structures (representing up to 200 new display faces) to
its operations in fiscal 1997, of which 71 were constructed as of October 31,
1996. Thereafter, the Company intends to increase the annual rate at which it
constructs additional billboard structures and, by 2001, the Company anticipates
that it will be adding approximately 250 new billboard structures per year to
its operations through internal development. In addition, the Company intends to
pursue strategic acquisitions of existing advertising structures and small to
medium-sized outdoor advertising operators when appropriate. Consistent with its
past practices, the Company intends to pursue expansion in rural and smaller
metropolitan areas that are not included in the 50 largest Designated Market
Areas ("DMAs"). See "BUSINESS -- Growth Strategy -- Outdoor Advertising."

The Company was incorporated in New Mexico in 1953 and reincorporated under
the laws of Nevada in 1996. The Company's principal executive offices are
located at 150 Louisiana N.E., Albuquerque, New Mexico 87108, and its telephone
number is (505) 266-5985.

<TABLE>
THE OFFERING

<S> <C>
Common Stock Offered .......................... 1,100,000 shares

Common Stock Outstanding Before Offering ..... 3,284,848 shares(1)

Common Stock to be Outstanding Immediately
After the Offering .......................... 4,384,848 shares(1)(2)

Use of Proceeds ............................... Net proceeds to the Company are estimated to be
approximately $7.7 million, assuming no exercise
of the Over-Allotment Option, and will be used to
repay certain indebtedness, to develop and upgrade
existing retail operations and for general
corporate purposes, including the acquisition of
additional travel center and outdoor advertising
assets. See "USE OF PROCEEDS."

Risk Factors .................................. Investment in the Common Stock involves a high
degree of risk. See "RISK FACTORS."

Nasdaq Symbol ................................. "BWLN"

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(1) Based on the number of shares of Common Stock outstanding as of November
15, 1996. Excludes 362,000 shares of Common Stock issuable upon exercise
of options granted or approved for grant upon completion of the Offering
under the Company's 1996 Stock Option Plan. See "EXECUTIVE COMPENSATION --
1996 Stock Option Plan."

(2) Excludes (i) 165,000 shares of Common Stock reserved for issuance upon
exercise of the Over-Allotment Option and (ii) 93,500 shares of Common
Stock reserved for issuance upon exercise of the Representative's Option.
See "DESCRIPTION OF SECURITIES" and "UNDERWRITING."

</TABLE>
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5
<PAGE>
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<TABLE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT TRAVEL CENTER, OUTDOOR ADVERTISING,
SHARE AND PER SHARE DATA)

<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JANUARY 31, OCTOBER 31,
------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
SELECTED STATEMENT OF INCOME DATA:
TRAVEL CENTER OPERATIONS
Gross sales .......................................................... $ 19,799 $ 20,467 $ 15,715 $ 16,668
Discounts on sales ................................................... 221 292 172 228
----------- ----------- ----------- -----------
Net sales .......................................................... 19,578 20,175 15,543 16,440
Cost of goods sold ................................................... 12,541 12,995 9,988 11,165
----------- ----------- ----------- -----------
Gross profit ......................................................... 7,037 7,180 5,555 5,275
Operating costs:
General and administrative expenses .............................. 5,161 5,462 4,297 3,867
Depreciation and amortization .................................... 451 434 316 282
----------- ----------- ----------- -----------
Operating income ..................................................... 1,425 1,284 942 1,126

OUTDOOR ADVERTISING OPERATIONS
Gross income ......................................................... 2,376 2,770 2,041 2,523
Operating costs:
Direct operating costs ............................................. 1,715 2,007 1,445 1,581
General and administrative expenses ................................ 205 344 207 307
Depreciation and amortization ...................................... 252 261 188 204
----------- ----------- ----------- -----------
Operating income ..................................................... 204 158 201 431

CORPORATE AND OTHER
General and administrative expenses .................................. (622) (602) (429) (356)
Depreciation and amortization ........................................ (118) (161) (95) (107)
Interest expense ..................................................... (536) (612) (412) (507)
Other income, net .................................................... 411 570 479 556
----------- ----------- ----------- -----------
Income before taxes .................................................. 764 637 686 1,143
Income taxes ......................................................... 295 253 274 457
----------- ----------- ----------- -----------
Net income ........................................................... $ 469 $ 384 $ 412 $ 686
=========== =========== =========== ===========
Earnings per common and common equivalent share
Primary and fully diluted .......................................... $ 0.14 $ 0.11 $ 0.12 $ 0.20
Earnings per common and common equivalent share
Primary and fully diluted, as adjusted(1) .......................... $ 0.14 $ 0.12 $ 0.13 $ 0.21
Weighted average common and common equivalent shares outstanding
Primary and fully diluted .......................................... 3,362,875 3,360,599 3,362,309 3,452,991

Weighted average common and common equivalent shares outstanding
Primary and fully diluted, as adjusted(1) .......................... 3,283,718 3,281,442 3,283,152 3,305,865

SELECTED TRAVEL CENTER DATA:
Number of travel centers (end of period)(2) .......................... 16 15 15(3) 15
Average gross revenue per travel center .............................. $ 1,237,000 $ 1,364,000 $ 1,048,000(3) $ 1,111,000

SELECTED OUTDOOR ADVERTISING DATA:
Number of outdoor advertising display faces (end of period) .......... 1,442 1,556 1,536 1,713
</TABLE>

OCTOBER 31, 1996
-----------------------
ACTUAL AS ADJUSTED
--------- -------------
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents ......................... $ 2,143 $ 6,292(1)
Working capital ................................... 2,042 7,046(1)
Total property and equipment, net ................. 9,554 9,554
Total assets ...................................... 15,414 19,563(1)
Notes payable ..................................... 8,217 4,717
Stockholders' equity .............................. 5,664 13,157(1)

- ----------
(1) On November 12, 1996, 98,537 shares of outstanding Common Stock were
returned to the Company without consideration and were subsequently
cancelled. These amounts give effect to that transaction.
(2) Travel center data includes the information presented as to both the
Company's travel centers and free-standing Dairy Queen/Brazier
restaurants.
(3) Includes a Dairy Queen/Brazier restaurant that was disposed of by the
Company during early July 1995 for which revenues have been included in
the average gross revenue per travel center calculation.

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6
<PAGE>
RISK FACTORS

AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS,
INCLUDING THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO, PRIOR TO
MAKING AN INVESTMENT IN THE COMPANY.

No Assurance of Successful Expansion. The Company intends to open new travel
centers, expand its outdoor advertising operations and implement gasoline
wholesaling activities. Although the Company's existing operations are based
primarily in the Southwest, the Company's current expansion plans include
consideration of acquisition opportunities in both the Southwest and other
geographic regions of the United States. However, there can be no assurance that
suitable acquisitions can be identified, and the Company is likely to face
competition from other companies for available acquisition opportunities.
Although the Company does not currently have any agreement to acquire any travel
center or outdoor advertising operations, it is currently negotiating with two
independent third parties for the acquisition of outdoor advertising assets with
an estimated fair market value of approximately $20 million and $2.5 million,
respectively. Any such acquisition would be subject to negotiation of definitive
agreements, appropriate finance arrangements and performance of due diligence.
There can be no assurance that the Company will be able to complete such
acquisitions, obtain acceptable financing, or any required consents of its bank
lenders or that such acquisitions that are completed can be integrated
successfully into the Company's existing operations. The success of the
Company's expansion program will depend on a number of factors, including the
availability of sufficient capital, the identification of appropriate expansion
opportunities, the Company's ability to attract, train and retain qualified
employees and management, the continuing profitability of existing operations,
the successful management of planned growth and the ability of the Company to
operate new travel centers and outdoor advertising operations and implement its
new gasoline wholesaling activities in a profitable manner. There can be no
assurance that the Company will achieve its planned expansion or that any
expansion will be profitable. See "BUSINESS -- Growth Strategy."

Need for Additional Financing. In order to successfully complete the
Company's growth strategy, the Company may need to seek additional financing
from external sources. Based on the Company's past history, the Company has been
able to secure financing for the acquisition of additional assets from
commercial lenders in amounts up to 100% of the fair market value of the
acquired assets. However, there can be no assurance that such additional
financing will be available in the future, or that if available, will be on
terms acceptable to the Company. In addition, the Company anticipates that any
financing which it does secure may impose certain financial and other
restrictive covenants upon the Company and its operations. Furthermore, there
can be no assurance that the Company will be able to integrate successfully any
acquired companies or product lines into its existing operations, which could
increase the Company's operating expenses in the short-term and materially and
adversely affect the Company's results of operations. Moreover, any acquisition
by the Company may result in potentially dilutive issuances of equity
securities, the incurrence of additional debt, and amortization of expenses
related to goodwill and intangible assets, all of which could adversely affect
the Company's profitability. Acquisitions involve numerous risks, such as the
diversion of the attention of the Company's management from other business
concerns, the entrance of the Company into markets in which it has had no or
only limited experience, and the potential loss of key employees of the acquired
company, all of which could have a material adverse effect on the Company's
business, financial condition, and results of operations. See "BUSINESS - Growth
Strategy."

Dependence on Third Party Relationships. The Company is dependent on a number
of third party relationships pursuant to which it offers brand name and other
products at its travel centers. These brand name relationships include the
Company's distributorship relationship with CITGO, as well as its existing
franchise agreements with Dairy Queen/Brazier and Stuckey's. The Company's
existing operations and plans for future growth anticipate the continued
existence of such relationships. There can be no assurance that the agreements
that govern these relationships will not be terminated. In addition, several of
these agreements contain provisions that prohibit the Company from offering
additional products or services which are competitive to those of its suppliers.
Although the Company does not currently anticipate having to forego a
significant business opportunity in order to comply with such agreements, there
can be no assurance that adherence to these existing agreements will not prevent
the Company from pursuing opportunities that management would otherwise deem
advisable. The Company also relies upon several at will relationships with
various third parties for much of its souvenir and gift merchandise. Although
the Company believes it has good relationships with its suppliers, there can be
no assurance that the Company will be able to maintain relationships with
suppliers of suitable merchandise at appropriate prices and in sufficient
quantities. See "BUSINESS -- Business Operations."

Dependence Upon Key Personnel. The success of the Company will be largely
dependent upon the efforts and abilities of Michael L. Bowlin, the President,
Chief Executive Officer and Chairman of the Board of Directors of the Company,
and upon the efforts and abilities of certain executive officers of the Company.
The Company has an employment agreement with Mr. Bowlin. The loss of the
services of Mr. Bowlin or one or more of the Company's other executive officers
could have a material adverse effect on the Company. See "MANAGEMENT" and
"EXECUTIVE COMPENSATION -- Employment Contracts."

Possible Adverse Impact of Competition. The Company's travel centers face
competition from major and independent oil companies; independent service
station operators; national and independent operators of restaurants, diners and
other eating establishments; and national and independent operators of
convenience stores and other retail outlets. In its outdoor advertising
operations, the Company faces competition for advertising revenues from other
outdoor advertising companies, as well as from other media such as radio,
television, print media and direct mail marketing. The Company also competes
with
7
<PAGE>
a wide variety of other out-of-home advertising media, the range and diversity
of which has increased substantially over the past several years, including
advertising displays in shopping centers and malls, airports, stadiums, movie
theaters and supermarkets. Some of the Company's competitors, including major
oil companies and convenience store operators, are substantially larger, better
capitalized and have greater name recognition and access to greater resources
than the Company. There can be no assurance that the Company's travel centers
and outdoor advertising operations will be able to compete successfully in their
respective markets in the future. See "BUSINESS -- Competition."

Seasonality and Other Factors; Quarterly Fluctuations. The travel center
portion of the Company's business is somewhat seasonal, and revenues may be
affected by many factors, including weather, holidays and the price of
alternative travel modes. The Company's revenues and earnings may experience
substantial fluctuations from quarter to quarter. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Seasonality."

Potential Adverse Effects of Government Regulation of Travel Centers. Each of
the Company's food service operations is subject to licensing and regulation by
a number of governmental authorities, including regulations relating to health,
safety, cleanliness and food handling, as well as federal and state laws
governing such matters as working conditions, overtime and tip credits and
minimum wages. The Company's travel center operations are also subject to
extensive laws and regulations governing the sale of alcohol and tobacco, and
fireworks in its New Mexico travel centers. Such regulations include certain
mandatory licensing procedures and ongoing compliance measures, as well as
special sales tax measures. In June and July of 1996, the state of New Mexico
issued a temporary ban on the sale of fireworks because of the extreme fire
hazard caused by drought conditions in that state. As a result of the ban, the
Company's revenues from its travel center operations decreased. Although such a
ban was unprecedented, similar bans could be imposed in the future. The Company
believes that its operations at its fourteen travel centers and one
free-standing Dairy Queen/Brazier restaurant comply in all material respects
with all applicable licensing and regulatory requirements. However, any failure
to comply with applicable regulations, or the adoption of additional regulations
or changes in existing regulations could impose additional compliance costs on
the Company, require a cessation of certain activities or otherwise have a
material adverse effect on the Company's business and results of operations. See
"BUSINESS -- Regulation."

Environmental Risks. The Company is subject to federal, state and municipal
laws and regulations governing the use, storage, handling and disposal of its
petroleum products. Specifically, the federal government has recently issued
more stringent regulations governing the storage of petroleum products with
which the Company is required to comply by December 1998. Although the Company
believes that its activities comply with the current standards prescribed by law
and the Company has already substantially completed certain renovations of its
facilities to satisfy the federal government's recently enacted regulations, the
risk of accidental contamination to the environment or injury can not be
eliminated. In the event of such an accident, the Company could be held liable
for any damages that result and any such liability could exceed the available
resources of the Company. In addition, the Company could be required to incur
significant costs to comply with environmental laws and regulations which may be
enacted in the future. See "BUSINESS -- Regulation."

Potential Adverse Effects of Government Regulation of Outdoor Advertising.
Outdoor advertising displays are subject to regulation by federal, state and
local governmental agencies. These regulations, in some cases, limit the height,
size and location of billboards and, in limited circumstances, regulate the
content of the advertising copy displayed on the billboards, particularly with
respect to tobacco advertising. Some governmental regulations prohibit the
construction of new billboards or the replacement, relocation, enlargement or
upgrading of existing structures. Some cities have adopted amortization
ordinances under which, after the expiration of a specified period of time,
billboards must be removed at the owner's expense and without the payment of
compensation. Due to the location of its billboard structures outside smaller
metropolitan and rural areas, the Company has not been materially affected by
such ordinances to date. However, there can be no assurance that the Company's
billboard structures will not become subject to similar ordinances in the
future. Ordinances requiring the removal of a billboard without compensation,
whether through amortization or otherwise, are being challenged in various state
8
<PAGE>
and federal courts with conflicting results. Although, to date, the Company has
been adequately compensated for any of its structures removed at the direction
of governmental authorities, future changes in such regulations as well as
others applicable to the Company's outdoor advertising operations could have a
material adverse effect on the Company's business and results of operations. See
"BUSINESS -- Regulation."

General Economic Conditions. The Company's business is directly related to
conditions in the travel industry, particularly leisure travel, which may be
adversely affected by general economic conditions. In addition, an increasing
portion of the Company's revenues are earned from sales of advertising space,
which can be affected by general economic conditions as well as trends in the
advertising industry. A future economic slowdown or recession could lead to a
reduction in advertising expenditures, or result in decreased leisure travel,
either of which could have a material adverse effect on the Company's business
and results of operations, and on its planned expansion.

Geographic Concentration. The Company's travel centers and one free-standing
Dairy Queen/Brazier restaurant are located in Arizona and New Mexico, and the
Company's advertising operations are currently conducted in Arizona, Colorado,
New Mexico, Oklahoma and Texas. Because of this geographic concentration, the
Company's business may be adversely affected in the event of a downturn in
general economic conditions in the Southwestern United States. See "BUSINESS."

Control by Management. Upon completion of the Offering, Michael L. Bowlin and
the other executive officers and Directors of the Company will beneficially own
approximately 63.5% of the outstanding shares of Common Stock (61.2% if the
Over-Allotment Option is exercised in full). Accordingly, senior management of
the Company will have sufficient voting power to control the outcome of any
matter submitted to the stockholders for their approval and to block certain
amendments to the Company's Articles of Incorporation and certain transactions
that require a supermajority vote. See "-- Anti-Takeover Provisions," "PRINCIPAL
STOCKHOLDERS" and "DESCRIPTION OF SECURITIES -- Certain Charter and By-law
Provisions."

Use of Proceeds; Repayment of Debt; Broad Discretion in Application. The
Company expects to use approximately $3.5 million of the net proceeds from this
Offering (45.8% of the net proceeds assuming the Over-Allotment Option is not
exercised) to repay certain indebtedness of the Company. Net proceeds available
to the Company for future business activities will be reduced by such amount.
The proceeds allocated to each category under "USE OF PROCEEDS" are estimates
only and the Company's management will have broad discretion in the application
of such funds without any action or approval of the Company's stockholders. See
"USE OF PROCEEDS."

Anti-Takeover Provisions. The Company's Board of Directors has the authority
to issue up to 10,000,000 shares of preferred stock, $.001 par value ("Preferred
Stock"), in one or more series and to determine the price, rights, preferences
and privileges of the shares of each such series without any further vote or
action by the stockholders. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
shares of Preferred Stock that may be issued in the future. The issuance of
Preferred Stock could have the effect of making it more difficult for a third
party to acquire a majority of the outstanding voting stock of the Company,
thereby delaying, deferring or preventing a change of control of the Company. In
addition, certain provisions in the Company's Articles of Incorporation and
By-laws relating to supermajority stockholder approval of certain business
combinations by the Company, restrictions on calling special meetings of
stockholders, and restrictions on amendments to the By-laws may discourage or
make more difficult any attempt by a person or group of persons to obtain
control of the Company. See "DESCRIPTION OF SECURITIES -- Certain Charter and
By-law Provisions."

Absence of Prior Market for Common Stock; Possible Volatility of Stock
Prices. Prior to this Offering, there has been no public market for the
Company's Common Stock. There can be no assurance that a market for the Common
Stock will develop following this Offering or that, if developed, such market
will be sustained. No assurance can be given that the Common Stock will continue
to be listed on Nasdaq. The price at which the shares of Common Stock are being
offered to the public has been determined by negotiation between the Company and
the Representative and may not necessarily bear
9
<PAGE>
any relationship to the price at which the Common Stock will trade after
completion of the Offering, or to the Company's assets, book value, earnings or
any other established criterion of value. The market price of the Common Stock
could also be subject to significant fluctuations in response to such factors as
variations in the anticipated or actual results of operations of the Company or
other companies engaged in similar businesses, changes in conditions affecting
the economy generally, analyst reports, general trends in the industry or
changes in the stock markets generally. See "UNDERWRITING."

No Dividends. Following completion of this Offering, the Company plans to
retain any earnings to finance the operations and expansion of the Company's
business. Accordingly, it is not anticipated that any dividends will be paid on
the Common Stock in the foreseeable future. See "DIVIDENDS" and "DESCRIPTION OF
SECURITIES."

Shares Eligible for Future Sale. The Company, its executive officers,
Directors and certain of its existing stockholders have agreed, subject to
certain limited exceptions, that they will not sell or otherwise dispose of any
shares of Common Stock without the prior written consent of the Representative
for a period of 180 days after the date of this Prospectus (the "Lock-Up
Period"). Upon expiration of the Lock-Up Period, all but 0.97% of the
outstanding shares of Common Stock will be eligible for sale in the public
market, subject to the notice, manner of sale, volume limitations and current
public reporting requirements imposed by Rule 144 under the Securities Act of
1933, as amended (the "Securities Act"). Sales of substantial amounts of Common
Stock in the open market or the availability of such shares for sale following
the Offering could adversely affect the market price of the Common Stock and may
make it more difficult for the Company to sell its equity securities in the
future on terms it deems appropriate. See "UNDERWRITING."

Immediate and Substantial Dilution. Purchasers of Common Stock offered hereby
will suffer immediate and substantial dilution in the net tangible book value of
the Common Stock from the initial public offering price. See "DILUTION."

Forward-Looking Statements and Associated Risks. This Prospectus contains
forward-looking statements including statements regarding, among other items,
the Company's growth strategy and anticipated trends in the Company's business.
These forward-looking statements are based largely on the Company's expectations
and are subject to a number of risks and uncertainties, certain of which are
beyond the Company's control. Actual results could differ materially from these
forward-looking statements as a result of the factors described under "RISK
FACTORS" and elsewhere herein, including, among others, regulatory or economic
influences. In light of these risks and uncertainties, there can be no assurance
that the forward-looking information contained in this Prospectus will in fact
transpire or prove to be accurate. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by this section.

DIVIDENDS

The Company paid cash dividends on its Common Stock of approximately $49,500,
$60,300 and $50,600 in fiscal years 1995 and 1996 and the nine months ended
October 31, 1996, respectively. However, upon completion of the Offering, the
Company intends to retain all available earnings to finance and expand its
business. Accordingly, the Company presently does not anticipate paying any
dividends on its Common Stock in the foreseeable future. Declaration of
dividends in the future will be at the discretion of the Company's Board of
Directors, which will review its dividend policy periodically. See "RISK
FACTORS" and "DESCRIPTION OF SECURITIES."

DILUTION

The net tangible book value of the Company as of October 31, 1996 was
approximately $5.2 million or $1.54 per share of Common Stock. Net tangible book
value per share is determined by dividing the number of shares of Common Stock
outstanding into the tangible net worth of the Company (tangible assets less
total liabilities). Without taking into account any changes in such net tangible
book value subsequent to October 31, 1996, other than (i) the return to the
Company of 98,537 shares of Common Stock (see Note (13) to the Company's
Consolidated Financial Statements) and (ii) to give effect to the
10
<PAGE>
sale of 1,100,000 shares of Common Stock offered hereby at an assumed initial
public offering price of $8.00 per share (after deducting the estimated
underwriting discount and estimated offering expenses payable by the Company),
the pro forma net tangible book value at October 31, 1996, would have been
approximately $12.9 million or $2.93 per share. This represents an immediate
increase in net tangible book value of $1.39 per share to existing stockholders
and an immediate dilution of $5.07 per share to persons purchasing shares of
Common Stock in this Offering ("New Investors"). The following table illustrates
this per share dilution:

Assumed initial public offering price per share ................. $8.00
Net tangible book value per share at October 31, 1996 ...... $1.54
Increase in net tangible book value per share
attributable to the New Investors in the Shares .......... $1.39
-----
Net tangible book value per share after Offering, as adjusted ... $2.93
-----
Dilution per share to New Investors((1)) ........................ $5.07
=====
- ----------
(1) If the Underwriters exercise the Over-Allotment Option in full, the per
share dilution to New Investors would be $4.91.

Over the last five years, officers, directors and affiliated persons have
purchased an aggregate of 57,411 shares of common stock (including the balance
of fractional shares purchased upon the issuance of Common Stock dividends) at
an average price per share of $1.55, as compared to an assumed initial public
offering price of $8.00 per share.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,100,000 shares of
Common Stock offered hereby, assuming an initial public offering price of $8.00
per share, and after deducting underwriting discounts and commissions and
estimated offering expenses payable by the Company (including amounts payable to
the Company's financial consultant), are estimated to be approximately $7.7
million ($8.9 million if the Over-Allotment Option is exercised in full).

The Company anticipates that such net proceeds will be used as follows and in
the following order of priority, assuming the Over-Allotment Option is not
exercised: (i) approximately $3.5 million to repay certain indebtedness of the
Company (described below), (ii) approximately $500,000 to upgrade existing
travel centers and (iii) the balance to be used for general corporate purposes,
including the acquisition or development of additional travel centers and
outdoor advertising operations. Any additional proceeds received by the Company
from the exercise of the Over-Allotment Option will be used for general
corporate purposes.

The debt to be repaid by the Company bears interest at rates ranging from the
prime lending rate to 12% per annum and matures at various dates from 1996 to
2006. The Company's indebtedness was incurred over time primarily to fund its
expansion activities and working capital requirements.

In accordance with its growth strategy, the Company routinely engages in
discussions with third parties regarding potential acquisitions. Although the
Company does not currently have any agreement to acquire any travel center or
outdoor advertising operations, it is currently negotiating with two third
parties for the acquisition of outdoor advertising assets with an estimated fair
market value of approximately $20 million and $2.5 million, respectively. 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, the receipt by the Company of
unqualified audited financial statements, and the satisfaction of other
customary closing conditions, including the receipt of third party consents.

Until applied as set forth above, all proceeds will be invested in short-term
investment grade instruments or bank certificates of deposit. Investment of the
net proceeds in short-term investments rather than operations could adversely
affect the Company's overall return on its capital. The foregoing represents the
Company's present intentions with respect to the allocation of the proceeds of
this Offering based upon its present plans and business conditions. However, the
occurrence of certain unforeseen events or changed business conditions could
result in the application of the proceeds of this Offering in a manner other
than as described in this Prospectus. See "RISK FACTORS."
11
<PAGE>
CAPITALIZATION
<TABLE>
The following table sets forth the capitalization of the Company as of
October 31, 1996, and as adjusted to give effect to the sale of the shares of
Common Stock offered hereby at an assumed initial public offering price of $8.00
per share and the application of the estimated net proceeds therefrom, assuming
no exercise of the Over-Allotment Option.

OCTOBER 31, 1996
-------------------------

ACTUAL AS ADJUSTED(1)
--------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Short-term borrowing, bank ........................................... $ 943 $ 541
Long-term debt, current maturities ................................... 1,064 611
------- -------
Total short-term debt ........................................... 2,007 1,152
======= =======
Long-term debt, less current maturities .............................. 6,210 3,565
------- -------

Stockholders' Equity:
Preferred Stock, $.001 par value, 10,000,000 shares authorized ....... -- --
Common Stock, $.001 par value 100,000,000 shares authorized,
3,383,385 outstanding, actual; 4,384,848 shares outstanding as
adjusted for the Offering(1)(2) .................................... 3 4
Paid-In Capital ...................................................... 4,330 11,823
Retained Earnings .................................................... 1,330 1,330
------- -------
Total Stockholders' Equity ...................................... 5,664 13,157
------- -------
Total Capitalization ............................................ $11,874 $16,722
======= =======

- ----------
(1) The as adjusted amounts also give effect to the return of 98,537 shares of
Common Stock to the Company on November 12, 1996. See Note (13) to the
Company's Consolidated Financial Statements.

(2) Excludes (i) 165,000 shares of Common Stock reserved for issuance upon
exercise of the Over- Allotment Option, (ii) 93,500 shares of Common Stock
reserved for issuance upon exercise of the Representative's Option and
(iii) 362,000 shares of Common Stock issuable upon exercise of options
granted or approved for grant upon completion of the Offering under the
Company's 1996 Stock Option Plan. See "EXECUTIVE COMPENSATION -- 1996
Stock Option Plan," "DESCRIPTION OF SECURITIES" and "UNDERWRITING."

</TABLE>
12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT TRAVEL CENTER, OUTDOOR ADVERTISING,
SHARE AND PER SHARE DATA)
<TABLE>
The selected financial data presented below is qualified by reference to, and
should be read in conjunction with, the Company's Consolidated Financial
Statements and the related Notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this Prospectus. The data presented below under the caption "Selected Statement
of Income Data" for the fiscal year ended January 31, 1996 are derived from the
Consolidated Financial Statements of the Company, which financial statements
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. The following selected Statement of Income Data for the year ended
January 31, 1995 are derived from the Consolidated Financial Statements of the
Company, audited by Ricci & Ricci, independent certified public accountants. The
following selected Statement of Income Data and Balance Sheet Data as of and for
the periods ended October 31, 1995 and 1996 have been derived from the Company's
unaudited consolidated financial statements for such periods. In the opinion of
management, the following unaudited data reflect all adjustments, consisting
only of normal recurring adjustments, necessary to fairly present the Company's
financial position and results of operations for the periods presented. The
results of operations for any interim period are not necessarily indicative of
results to be expected for a full fiscal year.
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JANUARY 31, OCTOBER 31,
------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
SELECTED STATEMENT OF INCOME DATA:
TRAVEL CENTER OPERATIONS
Gross sales ......................................................... $ 19,799 $ 20,467 $ 15,715 $ 16,668
Discounts on sales .................................................. 221 292 172 228
----------- ----------- ----------- -----------
Net sales ...................................................... 19,578 20,175 15,543 16,440
Cost of goods sold .................................................. 12,541 12,995 9,988 11,165
----------- ----------- ----------- -----------
Gross profit ........................................................ 7,037 7,180 5,555 5,275
Operating costs:
General and administrative expenses ............................ 5,161 5,462 4,297 3,867
Depreciation and amortization .................................. 451 434 316 282
----------- ----------- ----------- -----------
Operating income .................................................... 1,425 1,284 942 1,126

OUTDOOR ADVERTISING OPERATIONS
Gross income ........................................................ 2,376 2,770 2,041 2,523
Operating costs:
Direct operating costs ......................................... 1,715 2,007 1,445 1,581
General and administrative expenses ............................ 205 344 207 307
Depreciation and amortization .................................. 252 261 188 204
----------- ----------- ----------- -----------
Operating income .................................................... 204 158 201 431

CORPORATE AND OTHER
General and administrative expenses ................................. (622) (602 (429) (356)
Depreciation and amortization ....................................... (118) (161 (95) (107)
Interest expense .................................................... (536) (612 (412) (507)
Other income, net ................................................... 411 570 479 556
----------- ----------- ----------- -----------
Income before taxes ................................................. 764 637 686 1,143
Income taxes ........................................................ 295 253 274 457
----------- ----------- ----------- -----------
Net income .......................................................... $ 469 $ 384 $ 412 $ 686
=========== =========== =========== ===========
Earnings per common and common equivalent share
Primary and fully diluted ...................................... $ 0.14 $ 0.11 $ 0.12 $ 0.20
Earnings per common and common equivalent share
Primary and fully diluted, as adjusted(1) ...................... $ 0.14 $ 0.12 $ 0.13 $ 0.21
Weighted average common and common equivalent shares
outstanding
Primary and fully diluted ........................................... 3,362,875 3,360,599 3,362,309 3,452,991
Weighted average common and common equivalent shares ................ 3,283,718 3,281,442 3,283,152 3,305,865
outstanding
Primary and fully diluted, as adjusted(1)

SELECTED TRAVEL CENTER DATA:
Number of travel centers (end of period)(2) ......................... 16 15 15(3) 15
Average gross revenue ............................................... $1,237,000 $ 1,364,000 $ 1,048,000(3) $ 1,111,000

SELECTED OUTDOOR ADVERTISING DATA:
Number of outdoor advertising display faces (end of period) ......... 1,442 1,556 1,536 1,713

(Footnotes on following page)
</TABLE>
13
<PAGE>
OCTOBER 31, 1996
--------------------
SELECTED BALANCE SHEET DATA: ACTUAL AS ADJUSTED
------ -----------
Cash and cash equivalents ............................... $ 2,143 $ 6,292(1)
Working capital ......................................... 2,042 7,046(1)
Total property and equipment, net ....................... 9,554 9,554
Total assets ............................................ 15,414 19,563(1)
Notes payable ........................................... 8,217 4,717
Stockholders' equity .................................... 5,663 13,157(1)

- ----------
(1) On November 12, 1996, 98,537 shares of outstanding Common Stock were
returned to the Company without consideration and were subsequently
cancelled. These amounts give effect to such transaction.
(2) Travel center data includes the information presented as to both the
Company's travel centers and free-standing Dairy Queen/Brazier
restaurants.
(3) Includes a Dairy Queen/Brazier restaurant that was disposed of by the
Company during early July 1995 for which revenues have been included in
the average gross revenue per travel center calculation.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following is a discussion of the consolidated financial condition and
results of operations of the Company for the two fiscal years ended January 31,
1995 and 1996, and for the nine month periods ended October 31, 1995 and 1996.
This discussion should be read in conjunction with the Consolidated Financial
Statements of the Company and the related Notes thereto included elsewhere in
this Prospectus and is expressly qualified by the statements set forth under
"RISK FACTORS -- Forward-Looking Statements and Associated Risks." References
herein to specific years refer to the Company's fiscal year ending on January 31
of such year.

The Company operates in two industry segments, travel centers and outdoor
advertising. In order to permit 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 revenues, 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 segment operating data and corporate expense data for the fiscal
periods presented.

RESULTS OF OPERATIONS
<TABLE>
The following table presents certain income and expense items derived from
the Consolidated Statements of Income as a percentage of gross revenues for the
two years ended January 31, 1995 and 1996 and the nine months ended October 31,
1995 and 1996.

<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JANUARY 31, OCTOBER 31,
------------------------ ------------------------
1995 1996 1995 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Consolidated Gross Revenues ................................ 100.0% 100.0% 100.0% 100.0%
Travel Center Operations:
Travel center sales
Merchandise ........................................... 30.4% 31.2% 32.2% 27.4%
Gasoline .............................................. 41.7% 41.8% 40.2% 45.7%
Food .................................................. 17.2% 14.9% 15.9% 13.3%
Other ................................................. 0.0% 0.2% 0.2% 0.4%
Discounts on sales ......................................... 1.0% 1.3% 1.0% 1.2%
Cost of goods sold ......................................... 56.7% 55.9% 56.2% 58.2%
General and administrative expenses ........................ 23.3% 23.5% 24.2% 20.2%
Depreciation and amortization .............................. 2.0% 1.9% 1.8% 1.5%
Operating income ........................................... 6.3% 5.5% 5.3% 5.9%
Outdoor Advertising Operations:
Gross income ............................................... 10.7% 11.9% 11.5% 13.1%
Operating expenses ......................................... 7.7% 8.6% 8.1% 8.2%
General and administrative expenses ........................ 0.9% 1.5% 1.2% 1.6%
Depreciation and amortization .............................. 1.1% 1.1% 1.1% 1.1%
Operating income ........................................... 1.0% 0.7% 1.1% 2.2%
Corporate and Other:
General and administrative expenses ........................ 2.8% 2.6% 2.4% 1.8%
Depreciation and amortization .............................. 0.5% 0.7% 0.5% 0.6%
Operating income ........................................... 4.0% 2.9% 3.5% 5.7%
Interest expense ........................................... 2.4% 2.6% 2.3% 2.6%
Other income, net .......................................... 1.8% 2.5% 2.7% 2.9%
Income taxes ............................................... 1.3% 1.1% 1.5% 2.4%
Net income ................................................. 2.1% 1.7% 2.3% 3.6%
</TABLE>

15
<PAGE>
COMPARISON OF NINE MONTHS ENDED OCTOBER 31, 1996 AND OCTOBER 31, 1995

Travel Centers. Gross sales for the Company's travel centers increased 6.1%
to $16.7 million for the nine months ended October 31, 1996 from $15.7 million
for the same period in fiscal 1996. This increase was offset by a 7.9% decline
in merchandise sales to $5.3 million for the nine months ended October 31, 1996
from $5.7 million for the same period in fiscal 1996. The decline in merchandise
sales was primarily attributable to a statewide ban on fireworks sales in the
State of New Mexico that was in effect from May 23, 1996 to July 2, 1996. During
the period of the ban, fireworks sales declined approximately $140,000 as
compared to the same period in fiscal 1996. In addition to the decline in
fireworks sales, the ban on such sales also had a negative effect on other
merchandise sales and restaurant sales. Restaurant sales declined 9.7% to $2.6
million for the nine months ended October 31, 1996 from $2.8 million for the
same period in fiscal 1996. The decrease in restaurant sales also reflected the
Company's decision in July 1995 to close its Lordsburg, New Mexico restaurant
and lease the facility to an unrelated third party. Sales for the Lordsburg
restaurant were approximately $105,000 for the period in fiscal 1996 when such
restaurant was open. Same store restaurant sales declined 6.1% to $2.6 million
for the nine months ended October 31, 1996 from $2.7 million for the same period
in fiscal 1996. These declines were offset by an increase in gasoline sales of
22.9% to $8.8 million for the nine months ended October 31, 1996 from $7.1
million for the same nine month period in fiscal 1996 as a result of increases
in both sales volume and retail prices.

In an effort to improve restaurant sales, the Company has hired a food and
beverage manager to oversee the day-to-day operations of the restaurants and
report on them directly to executive management personnel. Furthermore, certain
controls relating to labor, food and paper costs have been enhanced to
strengthen the overall performance of the restaurants. Such controls include the
pre-approval by management of labor hours at each of the Company's restaurants
and bi-monthly or, where appropriate, weekly inventory counts.

Cost of goods sold for the travel centers increased 11.8% to $11.2 million
for the nine months ended October 31, 1996 from $10.0 million for the same
period in fiscal 1996. As a percentage of gross sales, cost of goods sold
increased to 67% for the nine months ended October 31, 1996 from 63.6% for the
nine months ended October 31, 1995.

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
decreased 10.0% to $3.9 million for the nine months ended October 31, 1996 from
$4.3 million for the nine months ended October 31, 1995. The decrease is
primarily attributable to the Company's decision not to pay discretionary cash
bonuses to management in fiscal 1997, resulting in the absence of any cash
bonuses accrued for the nine months ended October 31, 1996. In comparison, the
Company accrued $225,000 during the same period in fiscal 1996 for discretionary
cash bonuses paid to management.

Depreciation and amortization expense for the travel centers declined 10.9%
for the nine month period ended October 31, 1996 from the same period in fiscal
1996 to approximately $282,000 from $316,000. During the nine months ended
October 31, 1996, the Company determined the actual lives for certain property
and equipment were generally longer than the estimated useful lives previously
established. Therefore, the Company extended the useful lives of such assets,
effective February 1, 1996. This change in the useful lives of travel center
assets, together with a change in the use of some assets from the travel centers
to corporate, and sales of other assets resulted in a decline in depreciation
and amortization expense for the travel centers for the nine months ended
October 31, 1996 as compared to the same period in the prior fiscal year.

The factors discussed above resulted in a 19.5% increase in operating income
from the travel centers to $1,126,000 for the nine months ended October 31, 1996
as compared to $942,000 for the same period in fiscal 1996.

Outdoor Advertising. Gross income from the Company's outdoor advertising
operations increased 23.6% to $2.5 million for the nine months ended October 31,
1996 from $2.0 million for the same period in fiscal 1996. The increase was
primarily attributable to increases in available displays due to construction
and additional leasing of available displays.
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Operating expenses related to outdoor advertising consist of direct
advertising expenses, which include rental payments to property owners for the
use of land on which advertising displays are located, production expenses and
selling expenses. Production expenses include salaries for operations personnel
and real estate representatives, property taxes, materials and repairs and
maintenance of advertising displays. Selling expenses consist primarily of
salaries and commissions for salespersons and travel and entertainment related
to sales. Direct advertising expenses increased 9.4% to $1.6 million for the
nine months ended October 31, 1996 from $1.4 million for the same period in
fiscal 1996, principally due to the addition of sales and production personnel
and repairs and maintenance of advertising displays.

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 increased 48.5% to $307,000 for the nine
months ended October 31, 1996 from $207,000 for the same period in fiscal 1996.
The increase was primarily attributable to increases in administrative
personnel, insurance and legal fees. The overall increase was partially offset
by a decrease in general and administrative expenses of $34,000 as a result of
the decision not to pay discretionary cash bonuses to management in fiscal 1997.

Depreciation and amortization expense increased 8.6% to $204,000 for the nine
months ended October 31, 1996 from $188,000 for the same period in fiscal 1996,
as a result of scheduled depreciation of additional display structures and
machinery and equipment.

The above factors contributed to the increase in outdoor advertising
operating income of 113.9% to $431,000 for the nine months ended October 31,
1996 from $201,000 for the same period in fiscal 1996.

Corporate and Other. General and administrative expenses for corporate and
other operations of the Company consist primarily of executive and
administrative compensation and benefits and accounting and legal fees. General
and administrative expenses decreased 17.3% to $356,000 for the nine months
ended October 31, 1996 from $429,000 for the nine months ended October 31, 1995,
primarily as a result of management's decision not to pay discretionary cash
bonuses for the fiscal year ended January 31, 1997. As such, no accrual for
discretionary cash bonuses has been accounted for during the nine months ended
October 31, 1996. Of the $429,000 of general and administrative expenses for the
nine months ended October 31, 1995, $116,000 was accrued for discretionary cash
bonuses. Other general and administrative expenses increased during the nine
months ended October 31, 1996 primarily as a result of increased personnel and
certain other expenses associated with the Company's newly expanded corporate
headquarters. In addition, under the terms of new employment agreements with the
Company's President and its Chief Operating Officer, which become effective as
of February 1, 1997, the annual base salaries of these two executive officers
will be increased by an aggregate amount of $148,000 over those in effect during
the nine months ended October 31, 1996. See Note (13) to the Consolidated
Financial Statements.

Depreciation and amortization expenses for the Company's corporate and other
operations consist primarily of depreciation associated with the corporate
headquarters and furniture and fixtures related thereto. Depreciation and
amortization increased 11.7% to $107,000 for the nine months ended October 31,
1996, from $95,000 for the same period in fiscal 1996. The increase was due to
scheduled depreciation of additional fixed assets.

Interest expense increased 23.1% to $507,000 for the nine months ended
October 31, 1996 from $412,000 for the nine months ended October 31, 1995, as a
result of borrowings to fund outdoor advertising expansion and the conversion of
travel centers' gasoline dispensing equipment to CITGO stations.

Income before taxes increased 66.5% to $1,143,000 for the nine months ended
October 31, 1996 from $686,000 for the same period in fiscal 1996. As a
percentage of gross revenues, income before taxes increased to 6.0% for the nine
months ended October 31, 1996 from 3.9% for the nine months ended October 31,
1995.

Income taxes were $457,000 for the nine months ended October 31, 1996 as
compared to $274,000 for the same period in fiscal 1996, as a result of higher
pre-tax income.
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The foregoing factors contributed to the Company's increase in net income for
the nine months ended October 31, 1996 to $686,000 as compared to $412,000 for
the nine months ended October 31, 1995.

COMPARISON OF FISCAL YEARS ENDED JANUARY 31, 1996 AND JANUARY 31, 1995

Travel Centers. Gross sales at the Company's travel centers increased 3.4% to
$20.5 million for fiscal 1996 from $19.8 million for fiscal 1995. This increase
includes a 7.5% increase in merchandise sales to $7.2 million for the fiscal
year 1996 from $6.7 million for the fiscal year 1995, which was primarily
attributable to increases in general merchandise sales, Mexican import goods,
jewelry and fireworks. In addition, gasoline sales increased 5.1% to $9.7
million for the fiscal year ended January 31, 1996 from $9.2 million for the
fiscal year ended January 31, 1995. These increases were offset by declines in
restaurant sales of 9.2% from $3.8 million for the fiscal year ended January 31,
1995 to $3.5 million for the fiscal year ended January 31, 1996.

Cost of goods sold for the travel centers increased 3.6% to $13.0 million for
the fiscal year ended January 31, 1996 from $12.5 million for the fiscal year
ended January 31, 1995. As a percentage of gross travel center revenues, cost of
sales remained constant at 63% for both fiscal years.

General and administrative expenses for the travel centers increased 5.8% to
$5.5 million for the fiscal year ended July 31, 1996 from $5.2 million for the
prior fiscal year. The increase was primarily attributable to an overall
increase in hourly wage rates for travel center personnel and certain costs
associated with the Company's compliance with above ground storage tank
installations at some of its travel centers. In addition, the Company expanded
its middle management team to include two Area Supervisors, a Petroleum Manager
and a Food and Beverage Manager.

Depreciation and amortization expense decreased by 3.7% to $434,000 for the
fiscal year ended January 31, 1996 from $451,000 for the fiscal year ended
January 31, 1995. The decrease was primarily attributable to a decline in the
depreciation expense for certain assets due to the use of accelerated methods,
which provide for higher depreciation in earlier periods.

The above factors contributed to a decline in travel center operating income
of 9.9% to $1.28 million for the fiscal year ended January 31, 1996 from $1.4
million for the fiscal year ended January 31, 1995.

Outdoor Advertising. Gross income from outdoor advertising increased 16.6% to
$2.8 million for the fiscal year ended January 31, 1996 from $2.4 million for
the fiscal year ended January 31, 1995. The increase was primarily attributable
to increased construction of advertising displays and increases in advertising
rates, which resulted in increases to gross income by approximately $270,000 and
$70,000, respectively.

Operating expenses increased 17.1% from $1.7 million in fiscal 1995 to $2.0
million in fiscal 1996, primarily due to increases in land lease rent expenses,
production, travel and salaries and wages.

General and administrative expenses for outdoor advertising increased 67.6%
to $344,000 for the fiscal year ended January 31, 1996 from $205,000 for the
same period in fiscal 1995. The increase was primarily attributable to increases
in insurance costs, legal fees and other administrative expenses.

Depreciation and amortization expense increased 3.6% to $261,000 for the
fiscal year ended January 31, 1996 from $252,000 for the year ended January 31,
1995. The increase was due to scheduled depreciation of additional fixed assets.

The above factors contributed to the decrease in outdoor advertising
operating income of 22.5% to $158,000 for the fiscal year ended January 31, 1996
from $204,000 for the fiscal year ended January 31, 1995.

Corporate and Other. General and administrative expenses decreased 3.2% to
$602,000 for the fiscal year ended January 31, 1996 from $622,000 for the fiscal
year ended January 31, 1995, primarily as a result of cost reduction measures
implemented by the Company.

Depreciation and amortization expense increased 36.5% to $161,000 for the
fiscal year ended January 31, 1996 from $118,000 for the fiscal year ended
January 31, 1995. The increase was primarily attributable to the addition of
corporate assets such as the construction of additional office space at the
Company's corporate headquarters.
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Interest expense increased 14.1% to $612,000 for the fiscal year ended
January 31, 1996 from $536,000 for the fiscal year ended January 31, 1995. The
increase is primarily attributable to borrowing required for continued expansion
of the outdoor advertising division and the completion of additional
construction at the Company's corporate offices. Income before taxes decreased
16.8% to $637,000 for the fiscal year ended January 31, 1996 from $764,000 for
the fiscal year ended January 31, 1995. The decrease in income before taxes was
primarily attributable to an increase in interest costs and a decline in travel
center operating income.

Income taxes decreased 14.2% to $253,000 for the fiscal year ended January
31, 1996 from $295,000 for the fiscal year ended January 31, 1995, as a result
of lower pre-tax income.

The factors described above contributed to the Company's decrease in net
income of 18.1% to $384,000 for the fiscal year ended January 31, 1996 from
$469,000 for the fiscal year ended January 31, 1995.

LIQUIDITY AND CAPITAL RESOURCES

At October 31, 1996, the Company had working capital of $2.0 million and a
current ratio of 1.61:1, compared to working capital of $1.8 million and a
current ratio of 1.65:1 at January 31, 1996. The Company's net cash provided by
operating activities increased from $898,000 to $1,242,000 for the fiscal years
ended January 31, 1995 and 1996, respectively. The increase was due primarily to
a decrease in inventories of $380,000 and an increase in accounts payable and
accrued liabilities of $527,000. These increases were partially offset by a
decrease in net income of $85,000. For the nine months ended October 31, 1996,
the Company's net cash provided by operating activities decreased to $460,000
from $1.0 million for the nine months ended October 31, 1995. The decrease is
primarily attributable to a decline in inventories, accounts payable and accrued
liabilities of $1.1 million for the nine months ended October 31, 1996 as
compared to a decline of $66,000 for the nine months ended October 31, 1995.
These declines were partially offset by an increase in net income of $274,000
and an increase in income taxes payable to $251,000 for the nine months ended
October 31, 1996 as compared to $43,000 for the nine months ended October 31,
1995.

Net cash used in investing activities increased from $892,000 in fiscal 1995
to $1,453,000 in fiscal 1996, primarily due to a reduction in temporary
investments in fiscal 1995 of $540,000. Net cash used in investing activities
increased to $1.2 million for the nine months ended October 31, 1996 from $1.1
million for the nine months ended October 31, 1995 as a result of additional
purchases of property and equipment (offset by sales of certain assets) and
disbursements of funds in the form of notes receivable. Net cash provided by
financing activities increased $307,000 to $428,000 from fiscal 1995 to fiscal
1996 due primarily to a reduction in payments on long-term debt from fiscal 1995
to fiscal 1996 of $317,000.

Net cash provided by financing activities increased approximately $1.29
million to $1.32 million for the nine months ended October 31, 1996 from $30,000
for the same period during the prior fiscal year. The increase was primarily
attributable to additional borrowings of $1.5 million used to finance purchases
of property and equipment and the development and acquisition of additional
outdoor advertising displays. In addition, the Company received proceeds from
the issuance of Common Stock of $222,000. This increase in cash was offset by
disbursements for the Offering of $342,000 and the payment of cash dividends of
approximately $51,000.

As of October 31, 1996, the Company was indebted to various banks and
individuals in an aggregate principal amount of approximately $8.2 million under
various loans and promissory notes. Many of the loans and promissory notes are
secured by land, buildings, equipment, billboards and inventories of the
Company. The loans and promissory notes mature at dates from November 28, 1996
to January 29, 2006 and accrue interest at rates from the prime lending rate to
12% per annum. Included in the debt outstanding as of October 31, 1996, are two
revolving lines of credit with aggregate principal commitments of $1,000,000 and
$150,000, with two separate banks, of which $823,000 and $111,000, respectively,
had been borrowed as of October 31, 1996. The $150,000 and $1,000,000 credit
facilities mature June 1, and June 15, 1997, respectively, and both accrue
interest at a rate of prime plus 1% per annum. In August, 1996, the Company
borrowed approximately $535,000 to refinance certain loans from its
stockholders. This loan matures in February 1997 and accrues interest at a rate
of prime plus 1% per annum. Certain
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of these lending agreements impose certain financial covenants upon the Company
relating to is maximum debt to net worth and minimum debt coverage ratios. See
Notes 6, 7 and 13 to the Company's Consolidated Financial Statements.

The Company intends to use approximately $3.5 million of the proceeds from
this Offering to repay unpaid principal and accrued interest outstanding under
certain of the loans and promissory notes described above. In addition, the
Company intends to repay a portion of its revolving lines of credit, but plans
to negotiate one or more new lines of credit to satisfy future working capital
needs. Upon payment of debt from the proceeds of the Offering, the Company will
continue to have principal outstanding of approximately $4.7 million.

The Company made capital expenditures of $1.5 million for each of the fiscal
years ended January 31, 1995 and 1996 and $1.4 million for the nine months ended
October 31, 1996. These expenditures were made primarily for upgrades to the
Company's travel centers and for the construction and acquisition of additional
billboard structures.

The Company made capital expenditures related to its travel centers and the
construction and acquisition of additional billboard structures during fiscal
1995 of $342,000 and $556,000, respectively, during fiscal 1996 of $576,000 and
$691,000, respectively, and during the nine months ended October 31, 1996 of
approximately $507,000 and $557,000, respectively. In addition, during fiscal
1995 the Company made capital expenditures of approximately $500,000 for the
expansion of its corporate headquarters. The Company anticipates making
additional capital expenditures of approximately $5.0 million during the next
twelve months, including approximately $325,000 for the removal and replacement
of underground storage tanks, $3.5 million for the development of additional
travel centers, approximately $975,000 for the construction of additional
billboard structures and the remainder primarily for upgrades and renovations at
the Company's existing travel centers. In addition, the Company is obligated to
compensate its financial consultant in an aggregate amount of $132,000 ($151,800
if the Over-Allotment Option is exercised in full) in connection with the
consummation of this Offering. See "UNDERWRITING."

The Company believes that the net proceeds of this Offering, internally
generated funds and funds available for borrowing under the revolving line of
credit will be sufficient for at least the next twelve months to satisfy all
debt service obligations and to finance its current operations and anticipated
capital expenditures. The Company may, however, require additional capital to
consummate significant acquisitions in the future and there can be no assurance
that such capital will be available on terms acceptable to the Company.

Although the Company does not currently have any agreement in place, it is
currently negotiating with two independent third parties for the acquisition of
outdoor advertising assets with an estimated fair market value of approximately
$20 million and $2.5 million, respectively. The Company does not believe that
either acquisition is probable and the Company has not executed any 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 satisfaction of other customary
closing conditions, including the receipt of third party consents. The Company
would likely finance any such acquisition with cash, the issuance of additional
shares of capital stock, additional indebtedness or any combination of the
three. To the extent that any such acquisition would be paid for by the Company
in cash, the Company could decide to use a portion of the net proceeds from this
Offering, use funds from its ongoing operations, seek additional financing from
a commercial lender or some combination of the foregoing. Based on its past
history, the Company's lenders have financed up to 100% of the fair market value
of assets acquired by the Company. Any commercial financing obtained for
purposes of acquiring additional outdoor advertising assets is likely to impose
certain financial and other restrictive covenants upon the Company and higher
interest expense. In addition, any issuance of additional equity or debt
securities to the sellers in any such acquisitions could result in further
dilution to the existing investors, including those who purchase shares of the
Company's Common Stock in this Offering. See "RISK FACTORS - No Assurance of
Successful Expansion", " - Need for Additional Financing" and "BUSINESS --
Growth Strategy".

INFLATION

In the last two years, inflation has not had a significant impact on the
Company.

SEASONALITY

The Company's revenues and operating results have exhibited some degree of
seasonality in past periods. Typically, the Company experiences its strongest
financial performance in the second fiscal quarter when leisure travel tends to
increase, and its lowest revenues in the third fiscal quarter. The Company
expects this trend to continue in the future.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of," which
established a new accounting principle for accounting for the impairment of
certain loans, certain investments in debt and equity securities, long-lived
assets that will be held and used including certain identifiable intangibles and
goodwill related to those assets and long-lived assets and certain identifiable
intangibles to be disposed of. This statement is effective for fiscal years
beginning after December 15, 1995. While the Company has not completed its
evaluation of the impact that will result from adopting this statement, it does
not believe that such adoption will have a significant impact on the Company's
financial position and results of operations. The Financial Accounting Standards
Board also issued SFAS No. 123, "Accounting for Stock Based Compensation,"
effective also for fiscal years beginning after December 15, 1995. The new
statement encourages, but does not require, companies to measure stock-based
compensation cost using a fair value method, rather than the intrinsic value
method
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prescribed by the Accounting Principles Board Opinion No. 25. Companies choosing
to continue to measure stock-based compensation using the intrinsic value method
must disclose on a pro forma basis net earnings per share as if the fair value
method were used. Management is currently evaluating the requirements of SFAS
No. 123. Management does not believe that SFAS No. 123 will have a material
impact on the Company's operating income.
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BUSINESS

COMPANY OVERVIEW

In addition to its travel centers, the Company operates over 1,700 revenue
generating outdoor advertising display faces for third party customers such as
hotels and motels, restaurants and consumer products. These display faces are
strategically situated along interstate highways primarily in Arizona and New
Mexico and, to a lesser extent, in Colorado, Oklahoma and Texas. In addition to
the leasing of advertising space, Bowlin provides a comprehensive range of
outdoor advertising services to its clients, including customized design and
production services. Although the Company faces substantial competition in each
of its operational areas, the Company believes that few of its competitors offer
the same breadth of products and services dedicated to the traveling public.

INDUSTRY OVERVIEW

Travel Services Industry. The travel services industry in which the Company
competes includes convenience stores which may or may not also offer gasoline,
and fast food and full-service restaurants located along rural interstate
highways. The Company believes that the current trend in the travel services
industry is toward strategic pairings at a single location of complementary
products that are noncompetitive, such as brand name gasoline and brand name
fast food restaurants. This concept, known as "co-branding," has recently seen
greater acceptance by both traditional operators and larger petroleum companies.
The industry has also been characterized in recent periods by consolidation or
closure of smaller operators.

The convenience store industry includes both traditional operators that focus
primarily on the sale of food and beverages but also offer gasoline and large
petroleum companies that offer food and beverages primarily to attract gasoline
customers. In 1995, the convenience store industry sold $46.8 billion worth of
merchandise and services and $66.3 billion worth of petroleum products.

The restaurant segment of the travel services industry is highly competitive,
most notably in the areas of consistency of quality, variety, price, location,
speed of service and effectiveness of marketing. The major chains are
aggressively increasing market penetration by opening new restaurants, including
restaurants at "special sites" such as retail centers, travel centers and
gasoline outlets. In addition, smaller quick-service restaurant chains and
franchise operations are focusing on brand and image enhancement and co-branding
strategies.

Outdoor Advertising Industry. According to recent estimates by the OAAA,
outdoor advertising generated total revenues of approximately $1.8 billion in
1995, representing growth of approximately 8.2% over 1994. Although outdoor
advertising represents only slightly over 1% of total U.S. advertising
expenditures, this segment is growing at a faster rate than such traditional
advertising media as radio, television and newspaper, which increased by 7.7%,
6.1% and 5.7%, respectively, during the same period. Outdoor advertising offers
repetitive impact and a relatively low cost-per-thousand impressions as compared
to broadcast media, newspapers, magazines and direct mail marketing, making it
attractive to both local businesses targeting a specific geographic area or set
of demographic characteristics and national
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advertisers seeking mass market support. Outdoor advertising services have
recently expanded beyond billboards to include a wide variety of out-of-home
advertising media, including advertising displays in shopping centers, malls,
airports, stadiums, movie theaters and supermarkets, as well as on taxis,
trains, buses and subways. The OAAA estimates that total out-of-home advertising
revenues, including traditional billboard advertising, exceeded $3.5 billion in
1995.

Outdoor advertising provides advertisers with a cost effective means of
reaching large audiences and is often used by businesses as part of an overall
multimedia advertising campaign to reach their target geographic or demographic
markets. In addition to its low cost-per-thousand impressions, because outdoor
advertising reaches potential customers close to the point-of-sale, restaurants,
motels, service stations and similar businesses find outdoor advertising
particularly effective. In addition, repeated viewing by people traveling the
same route on a daily basis makes outdoor advertising especially suitable for
companies, such as banks, insurance companies and soft drink manufacturers that
sell their products by promoting a particular image.

The outdoor advertising industry uses three standardized display formats:
traditional bulletin-style painted billboards (with a typical face size of 14
feet by 48 feet), 30-sheet posters (with a typical face size of 12 feet by 25
feet) and junior or 8-sheet posters (with a typical face size of 6 feet by 12
feet). Generally, the physical advertising structure is owned by the outdoor
advertising company and is built on locations either owned or leased by the
operator or on which it has a permanent easement. Traditionally, outdoor
advertising displays are leased to advertisers on a unit basis. Advertising
rates for outdoor advertising media are based on such factors as the size of the
advertising display, visibility, cost of leasing, construction and maintenance
and the number of people who have the opportunity to see the advertising
message.

The outdoor advertising market is highly fragmented but is dominated in the
larger DMAs by a few sizable firms, several of which are subsidiaries of
diversified companies. In addition to the larger outdoor advertising firms,
there are many smaller regional and local companies operating a limited number
of displays in a single or a few local markets. The OAAA estimates that there
are approximately 1,000 companies in the industry operating a total of
approximately 396,000 displays. There has been a trend toward consolidation in
the outdoor advertising industry in recent years and the Company expects this
trend to continue.

BUSINESS STRATEGY

Travel Services Business Strategy. The Company opened its first travel center
in 1953 and has since expanded to fourteen travel centers and one free-standing
Dairy Queen/Brazier restaurant. The Company's travel centers are strategically
located along well-traveled interstate highways in Arizona and New Mexico where
there are generally few gas stations, convenience stores or restaurants. Each of
the Company's travel centers has a unique Southwestern theme, and extensive
theme-oriented billboard advertising is used to attract customers to stop and
take advantage of their services.

Most of the Company's travel centers offer food and beverages, ranging from
ice cream and snack foods at some locations to full-service restaurants at
others. Revenues from food sales accounted for 17%, 15% and 13%, respectively,
of the Company's total revenues in fiscal 1995 and 1996 and the nine months
ended October 31, 1996. In addition to the Company's one free-standing Dairy
Queen/Brazier restaurant, the Company's food service operations at seven of the
Company's fourteen travel centers operate under the Dairy Queen/Brazier or Dairy
Queen trade names.

The Dairy Queen and Dairy Queen/Brazier restaurants feature the signature
Dairy Queen treat line of soft serve dairy products. In addition, the Dairy
Queen/Brazier restaurants offer a full line of hamburger combinations as well as
specialty chicken, fish and barbecue sandwiches.

The Company's travel centers also offer brand name gasolines such as CITGO,
Conoco, Chevron, Texaco and Diamond Shamrock. Revenues from gasoline sales at
the Company's travel centers accounted for approximately 42% of the Company's
total revenues in each of fiscal years 1995 and 1996 and approximately 46% in
the nine month period ended October 31, 1996. Effective October 1, 1995, the
Company became an authorized distributor of CITGO Petroleum Corporation, one of
the largest and fastest growing wholesalers of petroleum products in the United
States. The Company has converted six
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of its existing locations to CITGO "superpumper" stations. The Company also
intends to actively market CITGO products to other retailers in Arizona and New
Mexico. See "-- Growth Strategy -- Gasoline Wholesaling."

In addition to offering food and gasoline, each of the Company's travel
center gift shops offers an extensive variety of Southwestern merchandise and
collectibles. Four of the Company's travel centers operate under the Stuckey's
brand name. The Stuckey's specialty stores are family oriented shops that
feature the Stuckey's line of pecan confectioneries. Stuckey's is well-known
among travelers as a place to shop for souvenirs, gifts and toys and travel
games for children.

The Company's billboard advertising for its travel centers emphasizes this
wide range of unique Southwestern souvenirs and gifts available at the travel
centers, as well as the availability of gasoline and food. Merchandise at each
of the Company's stores is offered at prices that suit the budgets and tastes of
a diverse traveling population. The merchandise ranges from inexpensive
Southwestern gifts and souvenirs to unique hand-crafted jewelry, rugs, pottery,
kachina dolls and other gifts crafted specially for Bowlin by several Native
American tribes. Some stores offer special categories of collectibles, such as
dolls and music boxes. Merchandise items, which are among the Company's highest
margin items, accounted for approximately 30%, 31% and 27%, respectively, of the
Company's total revenues in fiscal years 1995 and 1996 and the nine months ended
October 31, 1996.

Outdoor Advertising Business Strategy. The Company operates over 1,700
revenue generating advertising display faces, primarily in Arizona and New
Mexico and, to a lesser extent, in Colorado, Oklahoma and Texas. Approximately
94% of these display faces are traditional bulletin style and 6% are assorted
poster styles. The Company's bulletin style displays are located primarily on
interstate highways, while the smaller poster sizes are typically used in local
settings by advertisers who prefer to change the display message regularly. The
Company's outdoor advertising displays are strategically located in rural and
smaller metropolitan areas throughout the Southwest, where the dispersion of
population, outdoor lifestyles and leading tourist destinations have created a
strong dependence on highway travel.

The Company began its outdoor advertising operations in 1980 and has grown
into a regional leader in small to medium-sized outdoor advertising markets. The
Company offers its outdoor advertising customers a complete full-service source
for graphic design and printing for the outdoor billboards operated by the
Company. As a result, the Company is able to attract advertisers that have
historically relied on other media in marketing their products and services. The
Company believes it is one of the largest outdoor advertising companies in rural
interstate markets in the Southwest and, in 1995, the Company was ranked by the
OAAA as one of the top 40 outdoor advertising companies in the United States in
terms of gross revenues.

Most of the Company's advertising displays are travel and tourism oriented.
According to the U.S. Travel Data Center in Washington, D.C., nine out of ten
automobile travelers rely on billboards to locate gas, food, lodging and tourist
attractions. In addition, approximately two-thirds of rural market advertisers
are engaged in the travel-tourism industry and rely on billboards as their
primary means of advertising to the traveling public.

GROWTH STRATEGY

Travel Centers. The Company is committed to expanding its travel center
operations through internal development as well as strategic acquisitions. The
Company plans to further expand its travel center operations in popular tourist
destinations, along heavily traveled interstate corridors and in smaller
metropolitan areas. The Company believes that the co-branding concept that it
has implemented at its travel centers has resulted in increased revenues, and
the Company intends to pursue opportunities to acquire rights to additional
brand name products. The Company is currently in the process of developing new
full service travel centers with CITGO superpumper dispensing facilities at
Benson and Picacho Peak, Arizona and near Albuquerque, New Mexico, and expects
all three of these centers to be operational by the end of fiscal 1998.

The following are the primary components of the Company's strategy for
expanding its travel center operations:
24
<PAGE>
o Continuing to offer high quality brand name food and products in a clean,
safe environment designed to appeal to travelers on interstate highways.

o Continuing to increase sales at existing locations through the upgrading
of facilities and the addition of products and services.

o Pursuing complementary national food and/or merchandise brands to further
implement the Company's co-branding concept.

o Expanding the Company's travel center operations through internal
development and strategic acquisitions in key tourist destinations, along
heavily traveled interstate highways and in smaller metropolitan areas.

Gasoline Wholesaling. Management believes that gasoline wholesaling
operations represent a potentially significant additional source of revenues to
the Company. The Company was granted a distributorship by CITGO, effective
October 1, 1995. CITGO is among the top five petroleum producers in the United
States and one of the fastest growing brand names of gasoline products in the
country. Bowlin has converted several of the fuel supply facilities at its
existing travel centers to CITGO superpumpers and, as a wholesaler, intends to
actively market CITGO products to other retailers in New Mexico and Arizona. The
Company intends to target dealerships with an annual sales volume of 600,000 to
1.2 million gallons of gasoline per year.

In October 1995, the Company hired a Petroleum Manager to create a plan for
marketing the Company's wholesale gasoline products. The Company has commenced
marketing activities and anticipates sales of its CITGO gasoline products on a
wholesale basis by the end of fiscal 1997. The Company believes that its
existing operations and personnel are adequate to support its gasoline
wholesaling operations for at least the next 12 to 18 months. The Company
intends to enter into agreements with third party retailers upon terms customary
in the wholesale gasoline industry. Such agreements generally require that
retailers purchase gasoline products on an exclusive basis for a limited term,
although either party may terminate such agreements upon 30 to 60 days written
notice. The Company intends to offer its wholesale gasoline products at a price
equal to a certain percentage over the then current price at which it purchases
gasoline products from CITGO.

The CITGO distribution agreement allows Bowlin to streamline its gasoline
supply arrangements and take advantage of volume-driven pricing by consolidating
purchases from CITGO. The distribution agreement is for a three-year term which
expires September 30, 1998 and automatically renews for three-year terms
thereafter. CITGO's ability to terminate or refuse to renew the agreement with
the Company is subject to the occurrence of certain events set forth in the
Petroleum Marketing Practices Act, which events currently include bankruptcy or
breach of the agreement by the Company or termination by CITGO of its petroleum
marketing activities in the Company's distribution area. Pursuant to the terms
of the distribution agreement, the Company is required to purchase certain
minimum quantities of gasoline during the term of the agreement, which includes
gasoline purchased for sale at the Company's travel centers. Since the effective
date of the distribution agreement, the Company's purchases of CITGO products
have substantially exceeded the required minimum quantities.

Outdoor Advertising. As in the case of its travel centers, the Company plans
to increase its outdoor advertising through internal development as well as
acquisition. The Company increased its inventory of billboard structures by 49
and 85, respectively, in fiscal years 1995 and 1996. Through internal
development, the Company plans to add approximately 100 new billboard structures
(representing up to 200 display faces) in fiscal 1997, of which 71 had been
constructed at October 31, 1996. Based upon the Company's present cost to
complete additional billboard structures, it anticipates that the cost to
complete construction of additional billboard structures in fiscal 1997 will be
approximately $232,000. The Company plans to add new billboard structures at a
higher incremental rate each year after 1997 and, by 2001, the Company
anticipates that it will be adding approximately 250 new billboard structures
per year to its operations through internal development, subject to the
availability of necessary working capital and the Company's ability to comply
with applicable regulations.

In addition to internal development, the Company plans to increase its
outdoor advertising operations by pursuing strategic acquisitions of outdoor
advertising assets and small to medium-sized outdoor
25
<PAGE>
advertising operators when appropriate. In accordance with this growth strategy,
the Company routinely engages in discussions with third parties regarding
potential acquisitions. Although the Company does not currently have any
agreement to acquire any outdoor advertising operations, it is currently
negotiating with two third parties for the acquisition of outdoor advertising
assets with an estimated fair market value of approximately $20 million and $2.5
million, respectively. 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, the
receipt by the Company of unqualified audited financial statements, and the
satisfaction of other customary closing conditions, including the receipt of
third party consents.

Consistent with its past practices, the Company intends to pursue expansion
into markets that are not included in the 50 largest DMAs. The Company believes
that expansion along interstate highways and in smaller metropolitan areas
permits the Company to expand into areas where competition for site acquisitions
is less intense, purchase prices are more favorable and government regulations
are generally less onerous. Marketing efforts in these areas are focused on
local and regional advertisers, thereby allowing the Company to maintain a
diverse client base and limiting reliance on national accounts, including
tobacco advertisers.

The Company plans to expand its outdoor advertising operations primarily by:

o Continuing to develop the Company's presence along interstate highways in
its existing markets throughout the Southwest.

o Increasing revenues from existing billboards by implementing programs that
maximize advertising rates and occupancy levels.

o Expanding its operations within current markets through new billboard
construction.

o Making strategic acquisitions of existing outdoor advertising assets and
small to medium-sized outdoor advertising operations in the less populated
areas of the United States with the objective of becoming a leader in this
niche market.

BUSINESS OPERATIONS

Travel Center Operations. The Company sells food, gasoline and merchandise
through its fourteen travel centers and one free-standing Dairy Queen/Brazier
restaurant located along two interstate highways (I-10 and I-40) in Arizona and
New Mexico. These are key highways for travel to numerous tourist and
recreational destinations as well as arteries for regional traffic among major
Southwestern cities. All of the Company's travel centers are open every day of
the year.

Each of the Company's travel centers maintains a distinct, theme-oriented
atmosphere. In addition to the Southwestern merchandise it purchases from Native
American tribes, the Company also imports some 650 items from Mexico, including
handmade blankets, earthen pottery and wood items. Additional goods, novelties
and imprinted merchandise are imported from several Pacific Rim countries. The
Company has long-standing relationships with many of its vendors and suppliers.

The Company sells food under the Dairy Queen and Dairy Queen/Brazier brand
names and sells snacks and souvenir merchandise under the Stuckey's brand name.
Pursuant to the terms of its agreements with Stuckey's and Dairy Queen, the
Company is obligated to pay these franchisors a franchise royalty and in some
instances a promotion fee, each equal to a percentage of gross sales revenues
derived by the Company from products sold pursuant to such agreements, as well
as comply with certain provisions governing the operation of the franchised
stores.

The Company continuously monitors and upgrades its travel center facilities
to maintain a high level of comfort, quality and appearance. Improvements
include new awnings and facings, new signage and enhanced lighting and
furnishings. The Company is also engaged in upgrading its petroleum storage and
dispensing equipment in order to increase fueling capacity and efficiency and to
satisfy new federal guidelines made mandatory by December 1998. See "--
Regulation" and "RISK FACTORS -- Environmental Risks."
26
<PAGE>
Store managers at the travel centers and restaurants oversee day-to-day
operations at the retail level. The travel centers are grouped by geographic
location and assigned to an Area Supervisor who oversees the management of his
or her assigned facilities. The Area Supervisors report directly to the Senior
Vice President of Retail Operations. In addition, the Company employs a
Merchandise Manager who works closely with the Senior Vice President in
monitoring buying patterns and habits of the customers visiting the various
locations. The Company has an extensive standardized training program for both
its retail and food service employees. The training program focuses on product
knowledge and customer service.

The Company is currently implementing a central warehouse operation in Las
Cruces, New Mexico, with approximately 27,000 square feet of useable space. The
new warehouse facility will allow the Company to increase volume purchases and
the related discounts, reduce transportation costs and improve inventory
turnover and control. In addition, improved data systems will enable the Company
to more effectively monitor and respond to the inventory demands of its travel
centers.

Outdoor Advertising Operations. The outdoor advertising operations of the
Company include leasing of sites, construction of display structures, sales of
advertising space and production and design of display faces. The Company's
leasing department has the responsibility for coordinating land leases with
owners for the right to construct and maintain billboard structures on the
landowner's property. In addition, the leasing department also monitors the
Company's compliance with all government regulations regarding lease rights,
construction and sales of outdoor structures. The Company's construction
division erects billboard structures on any sites acquired by the Company
without a pre-existing structure, with the goal of maximizing the amount of
leasable area on a particular site.

The Company's sales department, through its local account representatives,
sells advertising space to the Company's clients from its inventory of over
1,700 display faces. The account representatives work with the Company's
clients, their advertising agencies and the Company's production department to
provide clients with high quality design and artwork for their billboards.
Although the Company's consistent expansion of its outdoor advertising inventory
results in an advertising occupancy rate of less than 100%, the Company
generally has approximately 75% of its inventory under advertising agreements at
any time.

The Company's production staff performs a full range of activities required
to create and install outdoor advertising. Production work includes creating the
advertising copy design and layout, painting the design or coordinating its
printing and installing the design displays. Billboards have historically been
composed of several painted plywood sheets, but recently vinyl facing has begun
to replace plywood in national or regional campaigns using substantially
identical advertisements or requiring high graphics resolution. The increased
use of vinyl and pre-printed advertising copy furnished to the Company by the
advertiser or its agency results in less labor-intensive production work. The
Company believes that this trend may reduce future operating expenses associated
with the Company's production activities.

The Company's advertising customers consist largely of local and regional
advertisers, resulting in a diverse client base and limiting reliance on
national advertising clients. Unlike many of its competitors, the Company does
not rely to a significant extent upon tobacco advertisers, which are subject to
increasing regulation. The following table sets forth the categories of
industries from which the Company derived its outdoor advertising net revenues
for the nine months ended October 31, 1996 and the respective percentages of
such net revenues. The top three business categories accounted for approximately
67% of the Company's total outdoor advertising net revenues and approximately 9%
of the Company's total revenues in the nine months ended October 31, 1996. No
single advertiser accounted for more than 2.2% of the Company's total outdoor
advertising net revenues in such period.
27
<PAGE>
PERCENTAGE OF NET
ADVERTISING REVENUES BY CATEGORY

Hotels and Motels .............................. 28.7%
Restaurants .................................... 23.5
Retail/Consumer Products ....................... 14.7
Travel & Entertainment ......................... 13.5
Government ..................................... 6.9
Automotive ..................................... 2.6
Services ....................................... 2.1
Alcohol ........................................ 0.5
Tobacco ........................................ *
Other .......................................... 7.5
-----
TOTAL ..................................... 100.0%
=====
- ----------
*Less than 1%

COMPETITION

Travel Services Competition. The Company faces competition at its travel
centers from quick-service and full-service restaurants, convenience stores,
gift shops and, to some extent, from truck stops located along interstate
highways in Arizona and New Mexico. Some of the travel centers that the Company
competes with are operated by large petroleum companies, while many others are
small independently owned operations that do not offer brand name food service
or gasoline. Giant Industries, Inc., a refiner and marketer of petroleum
products, operates two travel centers, one in Arizona and one in New Mexico,
which are high volume diesel fueling and large truck repair facilities that also
include small shopping malls, full-service restaurants, convenience stores, fast
food restaurants and gift shops. The Company's principal competition from truck
stops includes Love's Country Stores, Inc., Petro Corporation and Flying J. Many
convenience stores are operated by large, national chains which are
substantially larger, better capitalized and have greater name recognition and
access to greater resources than the Company.

Outdoor Advertising Competition. The Company competes in all of its markets
with other outdoor advertisers as well as other media, including broadcast and
cable television, radio, newspaper and direct mail marketers. The Company has
little competition in its rural markets from other outdoor advertisers, but
encounters direct competition in its smaller metropolitan markets from larger
outdoor media companies, including 3M Media (a division of Minnesota Mining and
Manufacturing Company), WhiteCo Outdoor Advertising and Donrey Outdoor
Advertising, each of which have large national networks and greater resources
than the Company. The Company believes that by concentrating on interstate and
tourist oriented advertising in markets other than the largest 50 DMAs it will
be able to compete more effectively. As the Company expands geographically,
however, it may encounter increased competition from other outdoor advertising
firms, some of whom are substantially larger and have greater name recognition
and access to substantially greater resources than the Company. See "RISK
FACTORS -- Competition."

EMPLOYEES

As of October 31, 1996, the Company had approximately 160 full-time and 110
part-time employees, 56 of which were located in Arizona and 214 of which were
located in New Mexico. As of October 31, 1996, 116 of the Company's employees
were employed in store/retail sales, 76 employees were employed in the Company's
restaurant operations, 30 employees were employed in the Company's outdoor
advertising operations, 12 employees performed certain warehousing and
distribution services for the Company and 36 employees provided managerial and
administrative services to the Company. None of the Company's employees are
covered by a collective bargaining agreement and the Company believes its
relations with its employees are good.
28
<PAGE>
REGULATION

Travel Centers. Each of the Company's food service operations is subject to
licensing and regulation by a number of governmental authorities relating to
health, safety, cleanliness and food handling. The Company's food service
operations are also subject to federal and state laws governing such matters as
working conditions, overtime and tip credits and minimum wages. The Company
believes that its operations at its fourteen travel centers and one
free-standing Dairy Queen/Brazier restaurant comply in all material respects
with applicable licensing and regulatory requirements; however, future changes
in existing regulations or the adoption of additional regulations could result
in material increases in the Company's costs. See "RISK FACTORS -- Potential
Adverse Effects of Government Regulation of Travel Centers."

Historically, the Company has incurred ongoing costs to comply with federal,
state and local environmental laws and regulations, primarily relating to
underground storage tanks ("USTs"). These costs include assessment, compliance
and remediation costs, as well as certain ongoing capital expenditures relating
to the Company's gasoline dispensing operations. Under recently enacted federal
regulations, the Company is obligated to upgrade or replace all non-complying
USTs it owns or operates to meet corrosion protection and overfill/spill
containment standards by December 22, 1998. In response to such programs, the
Company has adopted a policy of replacing its USTs with above-ground storage
tanks to minimize the costs associated with leak detection and compliance with
other regulatory programs. Such tanks have been installed at all but three of
the Company's travel centers, and the Company intends to complete the
installation of above-ground storage tanks at all of its existing travel centers
by the end of fiscal 1997.

The Company incurred $191,000 in capital expenditures in fiscal 1996, and
estimates that it will be required to make additional capital expenditures of
approximately $325,000 in the aggregate by December 1998 to comply with current
federal and state UST regulations. The Company's estimates of costs to be
incurred for environmental assessment and remediation and for other regulatory
compliance are based on present and estimated future remediation costs and
results at UST sites. As certain of these factors and assumptions could change
due to modifications of regulatory requirements at either federal, state or
local levels, detection of unanticipated environmental conditions, or other
unexpected circumstances, the actual costs incurred may vary significantly from
these estimates noted above and may vary significantly from year to year. See
"RISK FACTORS -- Environmental Risks."

The Company's travel center operations are also subject to extensive laws and
regulations governing the sale of alcohol and tobacco, and fireworks in its New
Mexico travel centers. Such regulations include certain mandatory licensing
procedures and ongoing compliance measures, as well as special sales tax
measures. These regulations are subject to change and future modifications may
result in decreased revenues or profit margins at the Company's travel centers
as a result of such changes. In May, June and July of 1996, the State of New
Mexico issued a temporary ban on the sale of fireworks because of the extreme
fire hazard caused by drought conditions in that state. As a result of the ban,
the Company's revenues at its travel centers from the sale of fireworks
decreased by approximately $140,000 during the period of the ban, as compared to
the same period of the prior fiscal year. Ancillary sales of merchandise and
food also declined by 7.9% and 9.7%, respectively, during the nine months ended
October 31, 1996, as compared to the same period of the prior fiscal year.
Although such a ban was unprecedented, similar bans could be imposed in the
future.

Outdoor Advertising. The outdoor advertising industry is subject to
governmental regulation at the federal, state and local levels. Federal law,
principally the Highway Beautification Act of 1965, as amended (the
"Beautification Act"), encourages states, by the threat of withholding federal
appropriations for the construction and improvement of highways within such
states, to implement legislation to regulate billboards located within 660 feet
of, or visible from, interstate and primary highways except in commercial or
industrial areas. All of the states have implemented regulations at least as
restrictive as the Beautification Act, including the prohibition on the
construction of new billboards adjacent to federally-aided highways and the
removal at the owner's expense and without any compensation of any illegal signs
on such highways. The Beautification Act, and the various state statutes
implementing it, require the
29
<PAGE>
payment of just compensation whenever governmental authorities require legally
erected and maintained billboards to be removed from federally-aided highways.

The states and local jurisdictions have, in some cases, passed additional and
more restrictive regulations on the construction, repair, upgrading, height,
size and location of, and, in some instances, content of advertising copy being
displayed on outdoor advertising structures adjacent to federally-aided highways
and other thoroughfares. Such regulations, often in the form of municipal
building, sign or zoning ordinances, specify minimum standards for the height,
size and location of billboards. In some cases, the construction of new
billboards or relocation of existing billboards is prohibited. Some
jurisdictions also have restricted the ability to enlarge or upgrade existing
billboards, such as converting from wood to steel or from non-illuminated to
illuminated structures. From time to time governmental authorities order the
removal of billboards by the exercise of eminent domain. Thus far, the Company
has been able to obtain satisfactory compensation for any of its structures
removed at the direction of governmental authorities, although there is no
assurance that it will be able to continue to do so in the future.

In recent years, there have been movements to restrict billboard advertising
of tobacco products. No bills have become law at the federal level except those
requiring health hazard warnings similar to those on cigarette packages and
print advertisements. It is uncertain whether additional legislation of this
type will be enacted on the national or on a local level in any of the Company's
markets. Revenues from tobacco advertisers accounted for less than 1% of the
Company's total advertising revenues in fiscal 1996.

Amortization of billboards has also been adopted in varying forms in certain
jurisdictions. Amortization permits the billboard owner to operate its billboard
as a non-conforming use for a specified period of time until it has recouped its
investment, after which it must remove or otherwise conform its billboard to the
applicable regulations without any compensation. Amortization and other
regulations requiring the removal of billboards without compensation have been
subject to vigorous litigation in state and federal courts and cases have
reached differing conclusions as to the constitutionality of these regulations.
To date, amortization and other regulations in the Company's markets have not
materially adversely affected its operations. See "RISK FACTORS -- Potential
Adverse Effects of Government Regulation of Outdoor Advertising."

TRADEMARKS

The Company operates its travel centers under a number of its own trademarks,
as well as certain trademarks owned by third parties and licensed to the
Company, such as the Dairy Queen, Dairy Queen/Brazier, Stuckey's and CITGO
trademarks. The Company believes that its trademark rights will not materially
limit competition with its travel centers. The Company also believes that none
of the trademarks it owns is material to the Company's overall business;
however, the loss of one or more of the Company's licensed trademarks could have
an adverse effect on the Company.

LITIGATION

The Company from time to time is involved in litigation in the ordinary
course of business, including disputes involving advertising contracts, site
leases, employment claims and construction matters. The Company is also involved
in routine administrative and judicial proceedings regarding billboard permits,
fees and compensation for condemnations. The Company is not a party to any
lawsuit or proceeding which, in the opinion of management, is likely to have a
material adverse effect on the Company.

INSURANCE

The Company has comprehensive general liability insurance with a general
aggregate limit of $5,000,000 per occurrence and $5,000,000 annual aggregate
limit per location, including $2,000,000 aggregate coverage for liquor liability
and $1,000,000 personal and advertising injury liability limit. To date, the
Company has not had any material claims against its liability insurance.

PROPERTIES

As of October 31, 1996, the Company operated fourteen travel centers and one
free-standing Dairy Queen restaurant. The Company owns the real estate and
improvements at which five of its travel centers
30
<PAGE>
and its one free-standing Dairy Queen/Brazier restaurant are located, as well as
real estate and improvements at three additional locations, two of which the
Company is currently developing into travel centers and one of which is leased
to a third party restaurant operator. The property at which three of the travel
centers owned by the Company are operated are subject to mortgages. Such
mortgages expire at various dates from June 1999 to January 2006 and accrue
interest at rates between 8.5% and 9.25% per annum. Nine of the Company's
existing travel centers and one of its travel centers under development are
located on real estate that the Company leases from various third parties. These
leases have terms ranging from five to forty years, assuming exercise by the
Company of all renewal options available under certain leases.

The Company operated over 1,700 revenue generating outdoor display faces
throughout the Southwest, as of October 31, 1996. The Company typically owns the
billboard and related assets and enters into operating leases with the owners of
the real property upon which the billboards are located. These leases typically
have a term of 1 to 5 years and provide for minimum annual rents. As of October
31, 1996, the Company also owned and operated 52 and 275 non-revenue generating
display faces in Arizona and New Mexico, respectively, which are exclusively
dedicated to the advertisement of its fourteen travel centers and one
free-standing Dairy Queen/Brazier restaurant. Listed below are the locations of
the Company's inventory of revenue generating display faces as of October 31,
1996.

30-SHEET 8-SHEET
BILLBOARDS POSTERS POSTERS TOTAL
---------- ------- ------- -----
Arizona ........................ 122 -- -- 122
Colorado ....................... 12 -- -- 12
New Mexico .................... 1,371 60 64 1,495
Oklahoma ....................... 4 -- -- 4
Texas .......................... 80 -- -- 80
----- ----- ----- -----
TOTAL ..................... 1,589 60 64 1,713
===== ===== ===== =====

The Company's principal executive offices occupy approximately 10,000 square
feet of space owned by the Company in Albuquerque, New Mexico. The Company's
principal office space is subject to a mortgage which matures on January 29,
2000 and the principal balance of which accrues interest at a rate of prime plus
0.5% per annum (8.75% at October 31, 1996.) In addition, the Company owns
outdoor advertising production plant and warehouse facilities consisting of
approximately 10,000 square feet in Albuquerque, New Mexico and a central
warehouse and distribution facility occupying 27,000 square feet in Las Cruces,
New Mexico. The Las Cruces property is subject to two mortgages which mature on
October 4, 2000 and May 13, 2003 and each accrues interest on the unpaid
principal balance thereof at a rate of 10% per annum. The Company believes that
its headquarters and warehouse facilities are adequate for its operations for
the foreseeable future.

The Company owns general and limited partnership interests in two New Mexico
limited partnerships, and owns and operates a pecan orchard. One of the
partnerships owns and operates an apartment building in Las Cruces, New Mexico,
and the second partnership owns an unencumbered parcel of undeveloped land
located outside of Las Cruces, New Mexico held primarily for investment
purposes. The apartment building is subject to a 35-year mortgage which matures
in 2031,in an outstanding principal amount of approximately $1.1 million, and
accrues interest at a rate of 8.125% per annum. None of these investments has
had a material effect on the Company's business or results of operations and the
Company's management does not expect them to have such effect in the future.
Until recently, the Company also owned a majority of the voting stock of Dragoon
Water Company, an Arizona corporation ("Dragoon"). The voting stock of Dragoon
was purchased by the Company in order to ensure the provision of water utilities
to one of the Company's largest travel centers. The Company sold its shares of
stock in Dragoon as of October 1, 1996 pursuant to an agreement which ensures
the continued provision of necessary water utilities following the sale. Neither
the sale nor the operation of Dragoon were material to the Company.
31
<PAGE>
MANAGEMENT

<TABLE>
DIRECTORS AND EXECUTIVE OFFICERS

Information concerning the Company's current Directors and executive officers
and persons nominated to become Directors upon the closing of the Offering is
set forth below. A summary of the background and experience of each of these
individuals is set forth after the table.

<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Michael L. Bowlin(1)(2) ................ 54 Chairman of the Board, President and Chief Executive
Officer
C. Christopher Bess .................... 50 Executive Vice President, Chief Operating Officer and
Director
William J. McCabe ...................... 46 Senior Vice President -- Advertising Services and
Secretary
Anita J. Vachon ........................ 47 Senior Vice President -- Retail Operations
Nina J. Pratz .......................... 44 Chief Administrative Officer, Treasurer and Director
Michael E. Rising ...................... 34 Vice President and Chief Financial Officer
Robert L. Beckett(1) ................... 71 Director
Harold Van Tongeren(2) ................. 73 Director
Brian McCarty(2) ....................... 60 Director -- Nominee
James A. Clark(1) ...................... 66 Director -- Nominee

<FN>
- ----------
(1) Member of Audit Committee
(2) Member of Compensation Committee
</FN>
</TABLE>

Michael L. Bowlin. Mr. Bowlin has served as Chairman of the Board and Chief
Executive Officer of Bowlin since 1991 and as President since 1983. Mr. Bowlin
has been employed by Bowlin since 1968. Mr. Bowlin's father, Claude M. Bowlin,
Sr., founded the business in 1912. Michael L. Bowlin currently is Chairman of
the Board for the OAAA and serves on the Board for the American Council of
Highway Advertisers. Mr. Bowlin also serves as President and a member of the
Board of Directors of Stuckey's Incorporated, a restaurant and specialty store
franchisor (including specialty stores located at four of the Company's travel
centers); however, substantially all of Mr. Bowlin's professional time is
devoted to his duties at the Company. Mr. Bowlin holds a Bachelor's degree in
Business Administration from Arizona State University.

C. Christopher Bess. Mr. Bess has served as the Company's Executive Vice
President and Chief Operating Officer since 1983. Mr. Bess has served as a
member of the Company's Board of Directors since 1974. During his 24 years with
the Company, Mr. Bess has also served in such capacities as internal auditor,
Merchandiser for Retail Operations, Retail Operations Manager and as Development
Manager. Mr. Bess is a certified public accountant and holds a Bachelor's degree
in Business Administration from the University of New Mexico.

William J. McCabe. Mr. McCabe has served as the Company's Senior Vice
President -- Advertising Services since 1993 and as Secretary since 1996. Mr.
McCabe served as a member of the Board of Directors from 1983 until August,
1996. Prior to 1993, Mr. McCabe served as Vice President of Outdoor Operations
from 1988 and as Vice President of Accounting from 1984 to 1987. Mr. McCabe has
been employed by Bowlin since 1976 in such additional capacities as a Staff
Accountant and Controller. Mr. McCabe holds a Bachelor's degree in Business
Administration from New Mexico State University.

Anita J. Vachon. Ms. Vachon has served as the Company's Senior Vice President
- -- Retail Operations since 1993 and was a member of the Board of Directors from
1991 until August, 1996. Since 1982, Ms. Vachon has been employed by the Company
in such positions as staff accountant, Purchasing Department Manager and Vice
President of Merchandising. Ms. Vachon holds an Associate's degree in
Accounting.

Nina J. Pratz. Ms. Pratz has served as the Company's Treasurer since 1977 and
as Chief Administrative Officer since 1988. In addition, Ms. Pratz has served as
a member of the Company's Board of
32
<PAGE>
Directors since 1976. She has been employed by the Company for over 20 years.
Ms. Pratz holds a Bachelor's degree in Business Administration from New Mexico
State University.

Michael E. Rising. Mr. Rising has served as Vice President and Chief
Financial Officer since May 1996. Mr. Rising first joined Bowlin in July 1995 as
the Corporate Controller and served as a member of the Board of Directors from
April 1996 until August 1996. From 1993 to 1995, Mr. Rising was the Controller
for Sunrise Healthcare Corporation, a $750 million long-term care division of
Sun Healthcare Group, Inc., a publicly traded company on the New York Stock
Exchange. From 1991 to 1993, Mr. Rising attended the University of Texas at
Arlington. Mr. Rising was employed by Arthur Andersen LLP as an Audit Manager
from 1985 to 1991 and from 1992 to 1993. Mr. Rising is a certified public
accountant and holds a Bachelor's degree in Business Administration from
Southern Methodist University.

Harold Van Tongeren. Mr. Van Tongeren has served as a member of the Board of
Directors of Bowlin since 1988. Mr. Van Tongeren has also served as Chairman of
the Board of Directors and President of Herk and Associates, a representative of
domestic gift and jewelry wholesalers, since 1952. In addition, Mr. Van Tongeren
serves as a key contact to the Company regarding potential acquisition
opportunities in the travel and tourism industry. Mr. Van Tongeren attended Hope
College and Dennison University, and served as a First Sergeant in the United
States Marine Corps for four years.

Robert L. Beckett. Mr. Beckett has served as a member of the Board of
Directors of Bowlin since 1974. Mr. Beckett has also been President and a
Director of The Cooper Agency, Inc., a consumer loan company, since 1964. In
addition to serving as a Director and executive officer of various private
entities, Mr. Beckett formerly served as Mayor of the City of Deming, New
Mexico.

Brian McCarty. Mr. McCarty will become a Director upon the closing of the
Offering. Mr. McCarty has served since 1994 as Chairman of the Board and Chief
Executive Officer of Business Location Research, a company specializing in the
design and development of advanced geographic information systems. From 1990 to
1993, Mr. McCarty served as President and Chief Executive Officer of Naegele
Outdoor Advertising ("Naegele"). Prior to his employment at Naegele, Mr. McCarty
served as President of Ackerley Communications, a publicly traded company
engaged in the operation of outdoor advertising, radio and television
broadcasting properties. Mr. McCarty holds a Bachelor's degree in Marketing from
Lewis University.

James A. Clark. Mr. Clark will become a Director of the Company upon the
closing of the Offering. Mr. Clark is currently retired from full-time
employment. Mr. Clark served as President and Chief Executive Officer of First
Interstate Bank of Albuquerque from 1985 to 1991. Prior to 1991, Mr. Clark
served in several capacities at various banking and financial services entities
for over 25 years. Mr. Clark holds a Certificate of Graduation from the Stonier
Graduate School of Banking at Rutgers University.

Messrs. Bowlin and Bess currently have employment agreements with the
Company, and the remaining executive officers serve at the pleasure of the Board
of Directors. See "EXECUTIVE COMPENSATION -- Employment Contracts." There are no
family relationships among the Directors and executive officers.

Upon the closing of the Offering, the Board of Directors will consist of
seven members classified into three classes with each class holding office for a
three-year period. The terms of Mr. Van Tongeren and Ms. Pratz will expire in
1997; the terms of Messrs. Bess and Clark will expire in 1998; and the terms of
Messrs. Beckett, McCarty and Bowlin will expire in 1999.

The Company's Articles of Incorporation and By-laws limit the liability of
Directors under certain circumstances. See "EXECUTIVE COMPENSATION --
Indemnification and Limitation of Liability" and "DESCRIPTION OF SECURITIES --
Certain Charter and By-law Provisions."
33
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS

Upon the closing of the Offering, the Company will have a Compensation
Committee of the Board of Directors that will consist of Messrs. Bowlin, McCarty
and Van Tongeren. The Compensation Committee makes recommendations to the Board
of Directors regarding option grants under the Company's 1996 Stock Option Plan
and addresses matters relating to executive compensation.

Upon the closing of the Offering, the Company will have an Audit Committee of
the Board of Directors that will consist of Messrs. Bowlin, Clark and Beckett.
The Audit Committee is responsible for reviewing and making recommendations
regarding the employment of independent auditors, the annual audit of the
Company's financial statements and the Company's internal accounting controls,
practices and policies.

EXECUTIVE COMPENSATION

The following table summarizes all compensation paid to the Company's Chief
Executive Officer and to the Company's other most highly compensated executive
officers other than the Chief Executive Officer whose total annual salary and
bonus exceeded $100,000 (collectively, the "Named Executive Officers"), for
services rendered in all capacities to the Company during the fiscal year ended
January 31, 1996.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
--------------------------------------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION SALARY(1)($) BONUS(2)($) COMPENSATION($)
- ------------------ ------------ ----------- ---------------
Michael L. Bowlin ................. 78,000(3) 150,050 14,452(4)(5)
Chairman of the Board,
President and
Chief Executive Officer
C. Christopher Bess ............... 78,000(3) 150,375 7,998(4)(6)
Executive Vice President and
Chief Operating Officer
Anita J. Vachon ................... 43,250 75,075 4,731(7)
Senior Vice President --
Retail Operations

- ----------

(1) Includes amounts deferred at the election of each officer to be contributed
to his or her respective 401(k) Profit Sharing Plan account.

(2) The Company decided not to pay discretionary cash bonuses in fiscal 1997
and to grant stock options to its executive officers in lieu thereof. On
September 27, 1996, Messrs. Bowlin and Bess and Ms. Vachon were each
granted options to purchase 50,000, 40,000 and 30,000 shares of Common
Stock, respectively, under the 1996 Stock Option Plan.

(3) On September 27, 1996, the Company entered into employment agreements with
Messrs. Bowlin and Bess which provide for annual base salaries of $195,000
and $145,000, respectively, effective as of February 1, 1997. See "--
Employment Contracts."

(4) See the discussion under the caption "-- Employment Contracts" regarding
certain other compensation the named officer may be entitled to upon
certain specified events, including a change in control of the Company.

(5) Includes (i) $5,487 of the Company's discretionary matching contributions
allocated to Mr. Bowlin's 401(k) Profit Sharing Plan account, (ii) $7,723
for premiums on term life, auto and disability insurance policies of which
Mr. Bowlin or his wife is the owner and (iii) $1,242 for Mr. Bowlin's use
of a vehicle owned by the Company.

(6) Includes $5,582 of the Company's discretionary matching contributions
allocated to Mr. Bess' 401(k) Profit Sharing Plan account and $2,416 for
premiums on auto and disability insurance policies of which Mr. Bess is the
owner.

(7) Includes $4,497 of the Company's discretionary matching contributions
allocated to Ms. Vachon's 401(k) Profit Sharing Plan account and $234 for
premiums on a disability policy of which Ms. Vachon is the owner.
34
<PAGE>
COMPENSATION OF DIRECTORS

Directors who are not employees of the Company are entitled to receive $1,000
per each meeting of the Board of Directors, or any committee thereof, attended
plus reimbursement of reasonable expenses. Non-employee Directors also receive
an option to purchase 6,000 shares of Common Stock upon their election to the
Board of Directors and an annual grant of 2,000 shares of Common Stock during
each year of service, all under the Company's 1996 Stock Option Plan. Directors
who are employees of the Company do not receive any additional compensation for
such services.

INDEMNIFICATION AND LIMITATION OF LIABILITY

The Company's Articles of Incorporation and By-laws require the Company to
indemnify each of its officers and Directors against liabilities and reasonable
expenses incurred in any action or proceeding, including stockholders'
derivative actions, by reason of such person being or having been an officer or
Director of the Company, or of any other corporation for which he or she serves
as such at the request of the Company, to the fullest extent permitted by Nevada
law. Pursuant to Nevada law, the Company has adopted provisions in its Articles
of Incorporation and By-laws that eliminate the personal liability of its
Directors and officers to the Company or its stockholders for monetary damages
incurred as a result of the breach of their duty of care. These provisions
neither limit the availability of equitable remedies nor eliminate Directors' or
officers' liability for engaging in intentional misconduct or fraud, knowingly
violating a law or unlawfully paying a distribution.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to Directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

EMPLOYMENT CONTRACTS

On August 23, 1996, the Board of Directors approved employment agreements
with Michael L. Bowlin for services as Chairman of the Board, President and
Chief Executive Officer and with C. Christopher Bess for services as Executive
Vice President and Chief Operating Officer (Messrs. Bowlin and Bess are
sometimes collectively referred to herein as the "Employee"). These agreements
provide for base annual salaries, effective as of February 1, 1997, for Messrs.
Bowlin and Bess of $195,000 and $145,000, respectively, subject to annual
increases at the discretion of the Board of Directors, but at least equal to the
corresponding increase in the Consumer Price Index. In addition, the Employee is
entitled to receive bonuses at the discretion of the Board of Directors in
accordance with the Company's bonus plans in effect from time to time. Each of
the agreements has a perpetual five-year term, such that on any given date, each
agreement has a five-year remaining term. The agreements may not be unilaterally
terminated by the Company, except for "Cause," which includes (i) conviction of
a felony that substantially impairs the Employee's ability to perform his duties
to the Company or (ii) willful failure to diligently cure a specified deficiency
in the Employee's performance for 30 days.

Each of the agreements provides that if the Employee is terminated by the
Company other than for Cause or disability, or by the Employee for good reason
(as defined in the agreements), which includes certain changes in the Employee's
duties following a change in control of the Company, the Company shall pay to
the Employee (i) his salary through the termination date plus any accrued but
unpaid bonuses and (ii) a payment equal to the sum of five years of the
Employee's annual salary and an amount equal to all bonuses paid to the Employee
in the five years immediately preceding termination, which the Company has the
option to pay over five years. In addition, the Company must maintain until the
first to occur of (i) the Employee's attainment of substitute employment or (ii)
five years from the date of termination, the Employee's benefits under the
Company's benefit plans to which the Employee and his eligible beneficiaries
were entitled immediately prior to the date of termination. If the Employee
requests, the Company must also assign to the Employee any assignable insurance
policy on the life of the Employee owned by the Company at the end of the period
of coverage. In addition, all options or warrants to purchase Common Stock held
by the Employee on the date of termination become exercisable on the date of
termination, regardless of any vesting provisions, and remain exercisable for
the longer
35
<PAGE>
of one year from the date of termination or the then remaining unexpired term of
such warrants or options. If the Employee is terminated for Cause or if the
Employee terminates his employment other than for good reason (as defined in the
agreement), the Company's only obligation is to pay the Employee his base salary
and accrued vacation pay through the date of termination.

If the Employee is incapacitated due to physical or mental illness during the
term of his employment, the agreements provide that the Company shall pay to the
Employee a lump sum equal to two years of the Employee's base compensation and
all bonuses paid to the Employee in the two years preceding the date of
termination due to illness. If the Employee dies during his employment, his
salary through the date of his death, any accrued but unpaid bonuses and any
benefits payable pursuant to the Company's survivor's benefits insurance and
other applicable programs and plans then in effect are payable to his estate.

If the Employee's employment is terminated, the Company has agreed to
indemnify the Employee for claims and expenses associated with certain personal
guarantees, if any, made by the Employee. The Company also has agreed to use its
best efforts to secure the release of such personal guarantees following the
Offering. In addition, the Company has agreed to indemnify the Employee against
all costs incurred in enforcing his rights under the agreement following a
change in control of the Company. See "CERTAIN TRANSACTIONS."

PROFIT-SHARING 401(K) PLAN

Under the Company's 401(k) plan, effective July 1, 1990, as amended (the
"401(k) Plan"), eligible employees may direct that a portion of their
compensation, up to a legally established maximum, be withheld by the Company
and contributed to their account. All 401(k) Plan contributions are placed in a
trust fund and invested by the 401(k) Plan's trustee. It is the Company's policy
that all of the 401(k) Plan funds be invested in a single fund that is
identified by the Plan's trustee or administrator. The 401(k) Plan permits the
Company to make discretionary matching contributions in an amount to be
determined on an annual basis by the Company's Board of Directors. Amounts
contributed to participant accounts are generally not subject to federal income
tax until distributed to the participant and may not be withdrawn until death,
retirement or termination of employment.

1996 STOCK OPTION PLAN

The Company's 1996 Stock Option Plan (the "1996 Plan") authorizes the Board
to grant options to Directors and employees of the Company to purchase in the
aggregate an amount of shares of Common Stock equal to 10% of the shares of
Common Stock issued and outstanding from time to time. Directors, officers and
other employees of the Company who, in the opinion of the Board of Directors,
are responsible for the continued growth and development and the financial
success of the Company are eligible to be granted options under the 1996 Plan.
Options may be nonqualified options, incentive stock options, or any combination
of the foregoing. In general, options granted under the 1996 Plan are not
transferable and expire ten years after the date of grant. The per share
exercise price of an incentive stock option granted under the 1996 Plan may not
be less than the fair market value of the Common Stock on the date of grant and
no options granted under the 1996 Plan may have an exercise price per share less
than the initial public offering price. Incentive stock options granted to
persons who have voting control over 10% or more of the Company's capital stock
are granted at 110% of the fair market value of the underlying shares on the
date of grant and expire five years after the date of grant. No option may be
granted after August 23, 2006.

The 1996 Plan provides the Board of Directors with the discretion to
determine when options granted thereunder will become exercisable. Generally,
such options may be exercised after a period of time specified by the Board of
Directors at any time prior to expiration, so long as the optionee remains
employed by the Company. No option granted under the 1996 Plan is transferable
by the optionee other than by will or the laws of descent and distribution, and
each option is exercisable during the lifetime of the optionee only by the
optionee. On September 27, 1996, the Board of Directors granted options to
purchase an aggregate of 338,000 shares of Common Stock to 62 employees and
officers, including options to purchase 120,000 shares which were granted to its
Named Executive Officers. See "EXECUTIVE
36
<PAGE>
COMPENSATION -- Summary Compensation Table." On September 27, 1996, the Board of
Directors also approved the grant of options to purchase 6,000 shares to each of
its four non-employee Directors and Director-Nominees, effective as of the
closing date of the Offering. All of the options granted or approved have an
exercise price per share equal to the initial public offering price and provide
for a three-year vesting period.

CERTAIN TRANSACTIONS

Michael L. Bowlin is the President and Chairman of the Board of, and a 25%
stockholder in, Stuckey's Corporation ("Stuckey's"), a franchisor of restaurants
and specialty stores, including specialty stores located at four of the
Company's travel centers. In each of fiscal years 1995 and 1996, aggregate
franchise and other related fees paid by the Company to Stuckey's equalled
approximately $36,600.

Michael L. Bowlin and C. Christopher Bess each have perpetual five-year
employment agreements with the Company that provide for an annual base salary,
effective as of February 1, 1997, of $195,000 and $145,000, respectively, during
their terms of employment, as well as certain rights to indemnification. See
"EXECUTIVE COMPENSATION -- Employment Contracts."

Approximately $3.5 million of the proceeds to be received by the Company from
the Offering will be used to repay indebtedness to various lenders, most of
which indebtedness has been personally guaranteed by Michael L. Bowlin.

On August 23, 1996, the Company obtained a term loan from a commercial bank
with an aggregate principal amount of approximately $535,000 that was used to
prepay promissory notes payable to certain officers and Directors of the Company
and their respective affiliates. This loan matures on February 28, 1997 and
accrues interest at a rate of prime plus 1% per annum (9.25% at October 31,
1996).

Since February 1, 1994, C. Christopher Bess made seven loans to the Company
in an aggregate principal amount of $261,000. Each of these loans was evidenced
by a promissory note made payable by the Company to Mr. Bess, which accrues
interest on the unpaid principal amounts at a rate of 10% per annum, and matured
or matures at various dates from April 1996 until October 2005. One of such
notes is also secured by a real estate mortgage. All of the proceeds from such
loans were used by the Company for working capital or the acquisition of assets
in the ordinary course of business. As of the date of this Prospectus, all of
such loans, together with accrued interest, have been repaid in their entirety.

Since February 1, 1994, Michael L. Bowlin made three loans to the Company in
an aggregate principal amount of $180,000. Each of these loans was evidenced by
a promissory note made payable by the Company to Mr. Bowlin, which accrues
interest at a rate of 10% per annum, and matured or matures at various dates
from January 1996 until January 1998. All of the proceeds of these loans were
used for general working capital purposes of the Company. As of the date of this
Prospectus, all of such loans, together with accrued interest, have been repaid
in their entirety.
37
<PAGE>
PRINCIPAL STOCKHOLDERS
<TABLE>
The following table sets forth, as of November 15, 1996, the number and
percentage of outstanding shares of Common Stock owned by (i) each Director and
Director-Nominee of the Company; (ii) the Named Executive Officers of the
Company; (iii) all Directors and executive officers of the Company as a group;
and (iv) all persons known by the Company to be the beneficial owners of more
than 5% of the outstanding shares of Common Stock.
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING(1) AFTER OFFERING(1)
NAME AND ADDRESS OF ------------------------- ---------------------------
BENEFICIAL OWNER(4) NUMBER PERCENT NUMBER(2) PERCENT(3)
- ------------------- ------ ------- --------- ----------
<S> <C> <C> <C> <C>
Michael L. Bowlin(5) ................................... 1,801,729 54.8% 1,801,729 41.1%
C. Christopher Bess(6) ................................. 562,315 17.1 562,315 12.8
Anita J. Vachon ........................................ 42,200 1.3 42,200 *
Nina J. Pratz .......................................... 122,802 3.7 122,802 2.8
Robert L. Beckett ...................................... 123,646 3.8 123,646 2.8
Harold Van Tongeren(7) ................................. 44,099 1.3 44,099 1.0
Brian McCarty .......................................... -- -- -- --
James A. Clark ......................................... -- -- 2,000 *
Monica A. Bowlin(8) .................................... 1,801,729 54.8 1,801,729 41.1
Valkyrie L. Bowlin ..................................... 171,332 5.2 171,332 3.9
Kimberly M. Bowlin ..................................... 171,332 5.2 171,332 3.9
Emily M. Bowlin ........................................ 171,332 5.2 171,332 3.9
The Francis W. McClure and Evelyn
Hope McClure Revocable Trust ........................ 422,211 12.9 422,211 9.6
All directors, director-nominees and
executive officers as a group
(10 persons)(3)(5)(6)(7)(8).......................... 2,781,512 84.7% 2,784,712 63.5%

- ----------
*Less than 1%

(1) Each stockholder possesses sole voting and investment power with respect to
the shares listed, except as otherwise indicated or under applicable laws.
In accordance with the rules of the Commission, each stockholder is deemed
to beneficially own any shares subject to stock options which are currently
exercisable or which will become exercisable or convertible within 60 days
after November 15, 1996. The inclusion herein of shares listed as
beneficially owned does not constitute an admission of beneficial
ownership. The number and percentage of outstanding shares owned after the
Offering assumes none of the listed stockholders will purchase additional
shares in this Offering.

(2) Number of shares outstanding after the Offering includes the 1,100,000
shares of Common Stock that are being offered by the Company hereby but
excludes (i) 165,000 shares which are subject to the Over-Allotment Option,
(ii) 93,500 shares which are subject to the Representative's Option and
(iii) 362,000 shares reserved for issuance upon the exercise of options
granted or approved for issuance by the Company upon completion of the
Offering under the Company's 1996 Stock Option Plan. See "EXECUTIVE
COMPENSATION -- 1996 Stock Option Plan."

(3) Assumes no exercise of the Over-Allotment Option or the Representative's
Option. The issuance of any such shares would proportionately decrease the
respective percentages set forth.

(4) All of these holders have an address at c/o the Company, 150 Louisiana
N.E., Albuquerque, NM 87108.

(5) Includes 445,843 shares held by Mr. Bowlin's wife and 171,332 shares held
by each of three daughters. Mr. Bowlin disclaims beneficial ownership of an
aggregate of 342,664 of such shares, which are held by two of his
daughters.

(6) Includes 73,006 shares held by Mr. Bess' wife and 19,623 shares held by Mr.
Bess' minor daughter.

(7) All of such 44,099 shares are held by Mr. Van Tongeren jointly with his
wife.

(8) Includes 841,890 shares held by Mrs. Bowlin's husband and 171,332 shares
held by each of three daughters. Mrs. Bowlin disclaims beneficial ownership
of an aggregate of 342,664 of such shares, which are held by two of her
daughters.
</TABLE>
38
<PAGE>
DESCRIPTION OF SECURITIES

COMMON STOCK

Holders of shares of Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders and do not have cumulative voting rights.
As of November 15, 1996, there were 3,284,848 shares of Common Stock
outstanding, held by 19 record holders. Subject to the rights of holders of
outstanding shares of Preferred Stock, if any, the holders of Common Stock are
entitled to receive such dividends, if any, as may be declared from time to time
by the Board of Directors in its discretion from funds legally available
therefor, and upon liquidation, dissolution, or winding up are entitled to
receive all assets available for distribution to the stockholders. The Common
Stock has no preemptive or other subscription rights, and there are no
conversion rights or redemption or sinking fund provisions with respect to such
shares. All of the outstanding shares of Common Stock are, and the shares of
Common Stock offered hereby will be upon completion of the Offering, fully paid
and nonassessable.

PREFERRED STOCK

The Board of Directors, without any vote or action of the stockholders, has
the authority to issue up to 10,000,000 shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges, qualifications,
limitations and restrictions thereof, including dividend rights, conversion and
voting rights, terms of redemption, redemption prices, liquidation preferences
and the number of shares constituting any series or the designation of such
series. The issuance of preferred stock may have the effect of delaying,
deterring or preventing a change in control of the Company. Further, the
issuance of Preferred Stock with voting and conversion rights may adversely
affect the voting power of the holders of Common Stock, including the loss of
voting control to others. The Company has no present plans to issue any shares
of Preferred Stock.

REPRESENTATIVE'S OPTION; REGISTRATION RIGHTS

Concurrently with the closing of the Offering, the Company will issue a
five-year non-redeemable option (the "Representative's Option") to purchase up
to 93,500 shares of Common Stock at an exercise price per share equal to 120% of
the initial public offering price of the Common Stock. The Representative's
Option is to be issued to HD Brous & Co., Inc. (the "Representative")
individually and not in its capacity as the Representative. The Representative's
Option may be exercised, in part or whole, at any time beginning one year from
the effective date (the "Effective Date") of the Registration Statement of which
this Prospectus forms a part. The Representative's Option terminates five years
from the date of issuance, and may not be transferred, sold, assigned or
hypothecated for one year from the Effective Date, subject to certain limited
exceptions. Any exercise of the Representative's Option by the Representative
may result in dilution of the interests in the Company of then present
stockholders, hinder efforts by the Company to arrange future financings on
behalf of the Company and have an adverse effect on the market price of the
Company's Common Stock. The Representative's Option provides for certain demand
and "piggyback" registration rights with respect to the securities issuable
thereunder. See "UNDERWRITING."

CERTAIN CHARTER AND BY-LAW PROVISIONS

The Company's Articles of Incorporation and By-laws contain a number of
provisions relating to corporate governance and the rights of stockholders.
These provisions: (i) establish a classified Board of Directors; (ii) permit the
removal of Directors only for cause and only by vote of stockholders owning
two-thirds of the voting power of the Company; (iii) impose conditions on the
ability of stockholders to nominate persons for the position of Director; (iv)
prohibit stockholders from calling special meetings; and (v) require the consent
of the Board of Directors or the "disinterested" members thereof and/or the
affirmative vote of two-thirds of the Company's voting stock, excluding stock
owned by interested stockholders, to effect certain business combinations with
interested stockholders. An interested stockholder for purposes of this
provision means a person who, together with affiliates or associates,
beneficially owns, or beneficially owned within the preceding two-year period,
10% or more of the Company's combined
39
<PAGE>
voting power. For purposes of these provisions, at November 15, 1996, four of
the Company's stockholders were deemed to be interested stockholders. The
provisions included in the Company's Articles of Incorporation and certain
provisions in the By-laws may not be amended or repealed without the affirmative
vote of two-thirds of the Company's voting stock, excluding, with respect to the
business combination provision, stock owned by interested stockholders. See
"EXECUTIVE COMPENSATION" for a discussion of certain indemnification provisions
included in the Articles of Incorporation and By-laws.

The Company believes that these provisions promote the stability and
continuity of the Board of Directors of the Company and assure that stockholders
will receive adequate notice of and an opportunity to consider actions by
stockholders that could materially affect the Company. However, these provisions
could have the effect of deterring unsolicited takeovers or delaying or
preventing changes in control or management of the Company, including
transactions in which stockholders might otherwise receive a premium for their
shares over then-current market prices. In addition, these provisions may limit
the ability of stockholders to approve transactions that they may deem to be in
their best interest.

TRANSFER AGENT

The Transfer Agent for the Common Stock is Norwest Bank Minnesota, N.A., 161
North Concord Exchange Street, P.O. Box 738, South Saint Paul, Minnesota
55075-0738.

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters") for whom HD Brous & Co., Inc. is
acting as Representative, have severally agreed to purchase from the Company,
and the Company has agreed to sell to the Underwriters, the respective number of
shares of Common Stock set forth opposite each Underwriter's name below:

NUMBER OF
UNDERWRITER SHARES
- ----------- ------
HD Brous & Co., Inc. ..........................................

-----------
Total ................................................ 1,100,000
===========

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to certain conditions precedent, including
the absence of any material adverse change in the Company's business and the
receipt of certain certificates, opinions and letters from the Company and its
counsel and the Company's independent certified public accountants. The nature
of the Underwriters' obligations is such that they are committed to purchase and
pay for all the shares of Common Stock if any are purchased (exclusive of the
shares of Common Stock subject to the Over-Allotment Option described below).

The Company has been advised by the Representative that the Underwriters
propose to offer the shares of Common Stock directly to the public at the
initial public offering price set forth on the cover page of this Prospectus and
to certain securities dealers at such price less a concession not in excess of
$ per share. The Underwriters may allow, and selected dealers may
reallow, a discount not in excess of $ per share to certain brokers and
dealers. After the initial public offering of the shares, the public offering
price and selling terms may be changed by the Representative. No change in such
terms shall change the amount of proceeds to be received by the Company as set
forth on the cover page of this Prospectus.

The Company has granted an option to the Underwriters, exercisable for a
period of 30 days after the date of this Prospectus, to purchase up to an
additional 165,000 shares of Common Stock solely for the purpose of covering
over-allotments in the sale of 1,100,000 shares of Common Stock initially
offered
40
<PAGE>
hereby. To the extent that the option is exercised, the Underwriters will be
committed, subject to certain conditions, to purchase the additional shares of
Common Stock in approximately the same proportion as set forth in the above
table and to offer such additional shares of Common Stock to the public, all at
the same prices and on the same terms as those applicable to the shares of
Common Stock initially offered hereby.

The Company has agreed, upon completion of the Offering, to sell to the
Representative, individually and not in its capacity as Representative of the
Underwriters, for an aggregate price of $100, a five-year non-redeemable option
to purchase up to 93,500 shares of Common Stock (the "Representative's Option").
The Representative's Option will be exercisable at any time during the four-year
period commencing one year after the Effective Date of the Registration
Statement of which this Prospectus is a part at an exercise price per share
equal to 120% of the initial public offering price. The Representative's Option
is not transferable for the one-year period following the Effective Date,
subject only to certain limited exceptions. If the Company files a registration
statement under the provisions of the Securities Act relating to an offering of
securities at any time during the seven-year period following the Effective
Date, the holders of the Representative's Option or the underlying securities
will have the right, subject to certain conditions, to include in such
registration statement, at the Company's expense, all or part of the Common
Stock underlying the Representative's Option. Additionally, at any time after
the one-year period following the Effective Date and within the following
four-year period, the Representative may require the Company to register or
qualify for sale the issued Common Stock or issuable Common Stock underlying the
Representative's Option up to two times, one of which shall be at the Company's
expense. The number of shares of Common Stock covered by the Representative's
Option and the exercise price thereof are subject to adjustment upon certain
events to prevent dilution.

For the term of the Representative's Option, the holders will have the
opportunity to profit from a rise in the market price of the Company's Common
Stock above the exercise price of the Representative's Option. Any profit
realized by the holders upon the sale of the Representative's Option or the
securities issuable thereunder may be deemed additional underwriting
compensation. If the Representative's Option is exercised, the voting and equity
interests of the Company's stockholders will be diluted. The Company may find
that the terms on which it could obtain additional capital may be adversely
affected while the Representative's Option remains outstanding.

The Company has agreed to pay the Representative a non-accountable expense
allowance equal to 0.25% of the aggregate public offering price of the Common
Stock, including Common Stock sold pursuant to the Over-Allotment Option, if and
to the extent it is exercised, of which the sum of $10,000 has been paid. The
Representative's expenses in excess of such allowance will be borne by the
Representative. To the extent that the expenses of the Representative are less
than the non-accountable expense allowance, the excess may be deemed to be
compensation to the Representative.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters and their controlling persons against certain liabilities under the
Securities Act or will contribute to payments the Underwriters and their
controlling persons may be requested to make in respect thereof. The Company has
been advised that, in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.

The Company, its officers, directors and certain stockholders have each
agreed not to offer or sell any of the Company's securities for a period of 180
days from the date of this Prospectus, without the prior written consent of the
Representative.

The price at which the shares of Common Stock are being offered to the public
has been determined by negotiation between the Company and the Representative.
Among the factors considered in determining the price of the Common Stock were
the Company's current financial condition and prospects and
41
<PAGE>
the general condition of the securities markets. However, the initial public
offering price of the Common Stock does not necessarily bear any relationship to
the Company's assets, book value, earnings or any other established criterion of
value.

The foregoing is a brief summary of certain provisions of the Underwriting
Agreement and Representative's Option and does not purport to be a complete
statement of its terms and conditions. A copy of the Underwriting Agreement and
Representative's Option are on file with the Commission as exhibits to the
Registration Statement of which this Prospectus forms a part. See "ADDITIONAL
INFORMATION."

The Company has executed a consulting agreement with Miller Capital
Corporation ("Miller") dated as of April 26, 1996, as amended. Pursuant to this
agreement, Miller agreed to review the Company's business plan and corporate
structure and, based upon such review, provide consultation services for
purposes of assisting the Company in connection with an initial public offering.
Under the agreement, to date, the Company has paid Miller approximately $68,000
in fees and expenses for services rendered by Miller, and agreed to pay Miller a
fee equal to 1.5% of the gross proceeds of the Offering. Thus, assuming an
initial public offering price of $8.00 per share, upon closing of the Offering,
the Company will be obligated to pay Miller $132,000, or $151,800 if the
Over-Allotment Option is exercised in full. In addition, the Company has agreed
to pay Miller a fee equal to 3% of the gross proceeds of any subsequent
investment in the Company as a result of which 5% or more of the Company is sold
to a third party at any time up to and including April 26, 1997. The agreement
also requires the Company and Miller to indemnify each other against certain
customary liabilities.

LEGAL MATTERS

Certain legal matters will be passed upon for the Company by Squire, Sanders
& Dempsey L.L.P., of Phoenix, Arizona. Certain legal matters will be passed upon
for the Underwriters by Snell & Wilmer L.L.P. of Phoenix, Arizona.

EXPERTS

The Consolidated Financial Statements of the Company as of and for the twelve
month period ended January 31, 1996 have been included herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

The Consolidated Financial Statements of the Company as of and for the twelve
month period ended January 31, 1995 have been included herein and in the
Registration Statement in reliance upon the report of Ricci & Ricci, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.

CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS

The Company has engaged KPMG Peat Marwick LLP as its independent auditors for
the fiscal year ended January 31, 1996 and the fiscal year ending January 31,
1997, to replace the firm of Arthur Andersen LLP, which was dismissed as the
Company's independent auditors effective as of August 19, 1996. The report of
Arthur Andersen LLP on the Company's financial statements for the past fiscal
year did not contain an adverse financial opinion or a disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope, or accounting
principles. In connection with the audit of the Company's financial statements
for the fiscal year ended January 31, 1996, and in subsequent interim periods,
there were no disagreements with Arthur Andersen LLP on any matters of
accounting principles or practices, financial statement disclosure or auditing
scope and procedure which, if not resolved to the satisfaction of Arthur
Andersen LLP, would have caused Arthur Andersen LLP to make reference to the
matter in their report. The Company has authorized Arthur Andersen LLP to
respond fully to any inquiries from KPMG Peat Marwick LLP. The Company requested
Arthur Andersen LLP to furnish it a letter addressed
42
<PAGE>
to the Commission stating whether it agrees with the above statements. A copy of
that letter, dated September 12, 1996, is on file with the Commission as Exhibit
16.1 to the Registration Statement of which this Prospectus forms a part. See
"ADDITIONAL INFORMATION." The consolidated financial statements as of and for
the year ended January 31, 1996 audited by KPMG Peat Marwick LLP reflected no
change from the consolidated financial statements audited by Arthur Andersen LLP
in travel center operations gross sales, outdoor advertising operations gross
income, net income or total stockholders' equity.

The Company engaged Arthur Andersen LLP as its independent auditors for the
fiscal year ended January 31, 1996 to replace the firm of Ricci & Ricci, which
was dismissed as the Company's independent auditors at the same time. The report
of Ricci & Ricci for the fiscal year ended January 31, 1995 did not contain an
adverse financial opinion or a disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope, or accounting principles. In connection
with the audit of the Company's financial statements for the fiscal year ended
January 31, 1995, and in subsequent interim periods, there were no disagreements
with Ricci & Ricci on any matters of accounting principles or practices,
financial statement disclosure or auditing scope and procedure which, if not
resolved to the satisfaction of Ricci & Ricci, would have caused Ricci & Ricci
to make reference to the matter in their report. The Company authorized Ricci &
Ricci to respond fully to any inquiries from Arthur Andersen LLP. The Company
requested Ricci & Ricci to furnish it a letter addressed to the Commission
stating whether it agrees with the above statements. A copy of that letter,
dated September 25, 1996, is on file with the Commission as Exhibit 16.2 to the
Registration Statement of which this Prospectus forms a part. See "ADDITIONAL
INFORMATION."

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
SB-2 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus constitutes a part of the Registration Statement and does not
contain all of the information set forth therein and in the exhibits thereto,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the Common Stock offered hereby, reference is hereby made to such
Registration Statement and exhibits. Statements contained in this Prospectus as
to the contents of any document are not necessarily complete and in each
instance are qualified in their entirety by reference to the copy of the
appropriate document filed with the Commission.

The Registration Statement and the reports and other information to be filed
by the Company following the Offering in accordance with the Exchange Act can be
inspected and copied at the principal office of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: 7 World Trade Center, New York, NY
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60601. Copies of such materials may be obtained from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the Commission.
In addition, the Commission maintains a web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission.

The Company intends to provide its stockholders with annual reports
containing financial statements audited by independent auditors and quarterly
reports for the first three fiscal quarters of each year containing unaudited
summary consolidated financial information.
43
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

This Index relates to the consolidated financial statements set forth in this
Prospectus of BOWLIN Outdoor Advertising & Travel Centers Incorporated, and
subsidiaries.

PAGE
----
Independent Auditors' Report of KPMG Peat Marwick LLP .................... F-2
Independent Auditors' Report of Ricci & Ricci ............................ F-3
Consolidated Financial Statements
Consolidated Balance Sheets ........................................... F-4
Consolidated Statements of Income ..................................... F-5
Consolidated Statements of Stockholders' Equity ....................... F-6
Consolidated Statements of Cash Flows ................................. F-7
Notes to Consolidated Financial Statements ............................... F-8

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Board of Directors
BOWLIN Outdoor Advertising
& Travel Centers Incorporated:

We have audited the accompanying consolidated balance sheet of BOWLIN Outdoor
Advertising & Travel Centers Incorporated and subsidiaries as of January 31,
1996, and the related consolidated statement of income, stockholders' equity,
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of BOWLIN Outdoor
Advertising & Travel Centers Incorporated and subsidiaries as of January 31,
1996, and the results of their operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Albuquerque, New Mexico
September 9, 1996

F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Board of Directors
BOWLIN Outdoor Advertising
& Travel Centers Incorporated

We have audited the accompanying consolidated statements of income,
stockholders' equity and cash flows of BOWLIN Outdoor Advertising & Travel
Centers Incorporated and subsidiaries as of January 31, 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
BOWLIN Outdoor Advertising & Travel Centers Incorporated and subsidiaries as of
January 31, 1995 in conformity with generally accepted accounting principles.

Ricci & Ricci

Albuquerque, New Mexico
April 5, 1995

F-3
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
OCTOBER 31,
JANUARY 31, 1996
1996 (UNAUDITED)
---- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................................................... $ 1,601,830 2,143,004
Accounts receivable ................................................................. 193,982 161,420
Notes receivable -- related parties, current maturities (note 2) .................... 10,012 20,021
Notes receivable, current maturities (note 2) ....................................... 2,762 2,974
Inventories ......................................................................... 2,403,020 2,726,097
Prepaid expenses .................................................................... 328,576 272,678
Other current assets ................................................................ 6,288 44,400
----------- -----------
Total current assets ........................................................... 4,546,470 5,370,594
----------- -----------
Investment and long-term receivables:
Investment in partnership ........................................................... 16,259 3,259
Notes receivable, less current maturities (note 2) .................................. 12,838 9,623
Notes receivable -- related parties, less current maturities
(note 2) ......................................................................... -- 30,025
----------- -----------
Total investment and long-term receivables ..................................... 29,097 42,907
----------- -----------
Property and equipment, net (note 3) ..................................................... 8,910,470 9,554,404
Franchise fees, at cost less accumulated amortization of $97,691
in January 1996 and $105,614 (unaudited) in October 1996 ............................. 111,809 103,886
Deferred registration costs .............................................................. -- 342,143
----------- -----------
Total assets ................................................................... $13,597,846 15,413,934
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowing, bank (note 5) ................................................. $ 149,000 942,500
Accounts payable .................................................................... 1,177,878 737,250
Long-term debt, current maturities (note 6) ......................................... 768,929 1,064,043
Accrued liabilities ................................................................. 663,762 333,482
Income taxes payable ................................................................ -- 251,110
----------- -----------
Total current liabilities ...................................................... 2,759,569 3,328,385
----------- -----------
Long-term debt, less current maturities (note 6) ......................................... 5,808,503 6,210,005
----------- -----------
Total liabilities .............................................................. 8,568,072 9,538,390
----------- -----------
Minority interest ........................................................................ 226,591 211,948
----------- -----------
Stockholders' equity:
Common stock, $.001 par value; authorized 100,000,000 shares;
outstanding 3,050,427 shares in January 1996 and 3,383,385
(unaudited) shares in October 1996 ............................................... 3,051 3,384
Additional paid-in capital .......................................................... 3,806,220 4,329,783
Retained earnings ................................................................... 993,912 1,330,429
----------- -----------
Total stockholders' equity ..................................................... 4,803,183 5,663,596
----------- -----------
Commitments and contingencies (note 9)
----------- -----------
Total liabilities and stockholders' equity ..................................... $13,597,846 15,413,934
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
F-4
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
YEARS ENDED NINE MONTHS
JANUARY 31, ENDED OCTOBER 31,
-------------------------------- --------------------------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
Travel center operations:
Gross sales ................................... $ 19,798,283 20,467,455 15,715,065 16,668,367
Less discounts on sales ....................... 220,766 292,484 172,066 228,077
------------ ------------ ------------ ------------
Net sales ................................ 19,577,517 20,174,971 15,542,999 16,440,290
Cost of goods sold ............................ 12,540,560 12,995,314 9,987,515 11,165,014
------------ ------------ ------------ ------------
Gross profit ............................. 7,036,957 7,179,657 5,555,484 5,275,276
------------ ------------ ------------ ------------
Outdoor advertising operations:
Gross income .................................. 2,376,415 2,769,713 2,041,431 2,523,288
Operating costs ............................... 1,714,661 2,007,422 1,444,832 1,580,657
------------ ------------ ------------ ------------
Gross profit ............................. 661,754 762,291 596,599 942,631
General and administrative expenses ................ (5,988,485) (6,407,736) (4,933,150) (4,530,186)
Other income ....................................... 420,256 489,653 416,741 463,597
Depreciation and amortization ...................... (821,164) (856,608) (599,706) (592,602)
------------ ------------ ------------ ------------
Operating income ......................... 1,309,318 1,167,257 1,035,968 1,558,716
------------ ------------ ------------ ------------
Other income (expense):
Interest income ............................... 72,934 85,147 62,475 80,687
Gain (loss) on equipment sale ................. (82,552) (4,378) -- 10,892
Interest expense .............................. (536,025) (611,590) (412,018) (507,145)
------------ ------------ ------------ ------------
Total other income
(expense), net ........................ (545,643) (530,821) (349,543) (415,566)
------------ ------------ ------------ ------------
Income before
income taxes........................... 763,675 636,436 686,425 1,143,150
Income taxes (note 7) .............................. 294,719 252,817 274,570 457,260
------------ ------------ ------------ ------------
Net income ......................................... $ 468,956 383,619 411,855 685,890
============ ============ ============ ============
Earnings per common and common
equivalent share ................................ $ .14 .11 .12 .20
============ ============ ============ ============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
F-5
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JANUARY 31, 1995 AND 1996
AND THE NINE MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
<CAPTION>
COMMON ADDITIONAL
NUMBER STOCK, PAID-IN RETAINED
OF SHARES AT PAR CAPITAL EARNINGS TOTAL
--------- ------ ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at January 31, 1994 ............................. 2,613,024 $ 2,613 3,119,294 947,191 4,069,098
Net income .............................................. -- -- -- 468,956 468,956
Cash dividends on common stock, $.02
per share ............................................. -- -- -- (49,536) (49,536)
Issuance of common stock ................................ 1,688 2 2,622 -- 2,624
Stock dividends issued on common
stock and sale of fractional shares.................... 212,055 212 329,428 (327,915) 1,725
---------- ---------- ---------- ---------- ----------
Balance at January 31, 1995 ............................. 2,826,767 2,827 3,451,344 1,038,696 4,492,867
Net income .............................................. -- -- -- 383,619 383,619
Cash dividends on common stock, $.02
per share ............................................. -- -- -- (60,287) (60,287)
Stock dividends issued on common
stock and sale of fractional shares ................... 232,522 233 368,937 (368,116) 1,054
Purchase of common stock ................................ (8,862) (9) (14,061) -- (14,070)
---------- ---------- ---------- ---------- ----------
Balance at January 31, 1996 ............................. 3,050,427 3,051 3,806,220 993,912 4,803,183
Net income (unaudited) .................................. -- -- -- 685,890 685,890
Cash dividends on common stock, $.02
per share (unaudited) ................................. -- -- -- (50,600) (50,600)
Issuance of common stock (unaudited) .................... 141,159 141 221,967 -- 222,108
Stock dividends issued on common
stock and sale of fractional shares
(unaudited) ........................................... 191,799 192 301,596 (298,773) 3,015
---------- ---------- ---------- ---------- ----------
Balance at October 31, 1996
(unaudited) ........................................... 3,383,385 $ 3,384 4,329,783 1,330,429 5,663,596
========== ========== ========== ========== ==========

<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
F-6
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
YEARS ENDED NINE MONTHS
JANUARY 31, ENDED OCTOBER 31,
--------------------------- -------------------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income .................................................... $ 468,956 383,619 411,855 685,890
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ............................ 821,164 856,608 599,706 592,602
Income from partnership investment ....................... (883) (1,737) -- --
Loss (gain) on sale of equipment ......................... 82,552 4,378 -- (10,892)
Changes in operating assets and liabilities:
Accounts receivable ................................. (21,040) (65,923) (39,183) 32,562
Inventories ......................................... (131,556) (379,907) 320,640 (323,077)
Prepaid expenses .................................... (27,786) (60,478) 121,105 55,898
Other current assets ................................ 2,624 (2,101) (31,143) (38,112)
Accounts payable .................................... (51,462) 391,524 (597,543) (440,628)
Accrued liabilities ................................. (215,793) 135,090 211,003 (330,280)
Income taxes payable ................................ (17,859) (4,997) 43,095 251,110
Minority interest ................................... (11,064) (14,090) (9,154) (14,643)
----------- ----------- ----------- -----------
Net cash provided by operating activities ...... 897,853 1,241,986 1,030,381 460,430
----------- ----------- ----------- -----------
Cash flows from investing activities:
Capital (contributed to) received from partnership ............ (1,750) (875) -- 13,000
Proceeds from sale/condemnation of assets ..................... 70,259 24,230 -- 153,555
Purchases of property and equipment ........................... (1,529,934) (1,494,717) (1,141,119) (1,371,276)
Reduction of temporary investments ............................ 540,229 -- -- --
Disbursements on notes receivable ............................. (20,000) -- -- (142,844)
Collections on notes receivable ............................... 48,980 18,746 5,699 105,813
----------- ----------- ----------- -----------
Net cash used in investing activities .......... (892,216) (1,452,616) (1,135,420) (1,241,752)
----------- ----------- ----------- -----------
Cash flows from financing activities:
Payments on long-term debt .................................... (1,121,897) (805,049) (559,707) (4,042,673)
Proceeds from borrowings ...................................... 1,287,745 1,306,100 659,000 5,532,789
Disbursements for deferred offering costs ..................... -- -- -- (342,143)
Proceeds from issuance of common stock ........................ 2,624 -- -- 222,108
Proceeds from sale of fractional shares of common
stock sold in conjunction with stock dividend .............. 1,725 1,054 1,054 3,015
Treasury stock acquisition .................................... -- (14,070) (14,070) --
Dividends paid ................................................ (49,536) (60,287) (60,287) (50,600)
----------- ----------- ----------- -----------
Net cash provided by financing activities ...... 120,661 427,748 25,990 1,322,496
----------- ----------- ----------- -----------
Net increase in cash and cash equivalents .......................... 126,298 217,118 (79,049) 541,174
Cash and cash equivalents at beginning of period ................... 1,258,414 1,384,712 1,384,712 1,601,830
----------- ----------- ----------- -----------
Cash and cash equivalents at end of period ......................... $ 1,384,712 1,601,830 1,305,663 2,143,004
=========== =========== =========== ===========

<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
F-7
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
January 31, 1996 and October 31, 1996
(Information as of October 31, 1996 and for the nine months
ended October 31, 1995 and 1996 is unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

BOWLIN Outdoor Advertising & Travel Centers Incorporated and subsidiaries
(the Company) are located in Albuquerque, New Mexico. On August 28, 1996, BOWLIN
Outdoor Advertising & Travel Centers, Inc. (BOATC) was incorporated in the state
of Nevada. BOATC's articles of incorporation authorize 10,000,000 shares of
preferred stock (.001 par value) which can be issued at the discretion of the
Board of Directors. Pursuant to an agreement and plan of merger effective
September 27, 1996, Bowlin's, Inc. (BI), which was incorporated in the state of
New Mexico on February 20, 1953, was merged with and into BOATC. Under the terms
of the agreement, BI shareholders received 211 of the Company's shares for each
BI share. Accordingly, the Company issued approximately 3.4 million shares of
its common stock for all the outstanding shares of BI stock and all references
to the number of shares of common stock have been retroactively restated to
reflect the exchange for all periods presented. The transaction has been
accounted for in a manner similar to a pooling of interests.

The Company's principal business activities include the operation of
full-service travel centers and restaurants which offer brand name food and
gasoline and a unique variety of Southwestern merchandise to the traveling
public in the Southwestern United States. In addition to the travel centers, the
Company operates outdoor billboard advertising displays which are situated on
interstate highways, primarily in the Southwestern United States.

Dragoon Water Company, Inc. (Dragoon), a majority owned subsidiary, was
incorporated on December 12, 1962 and acquired by the Company in 1986. The
Company's primary reason for purchasing Dragoon was to ensure water utilities
would be provided to one of its largest retail locations in Arizona. (see Note
13) Dragoon's fiscal year end is December 31.

The Company acquired all of the outstanding stock of another subsidiary, BMI
Inc. (BMI) in November 1993. BMI's business activities have historically been
the acquisition of inventory in Mexico which has been sold to the Company for
the purpose of resale in the United States. BMI has a January 31 fiscal year
end.

Neither Dragoon nor BMI is considered material to the overall operations of
the Company.

The Company also holds a majority general partnership interest in the Los
Cuatros Apartments Limited Partnership (Los Cuatros) together with a limited
partnership interest. The partnership owns and leases an apartment complex in
Las Cruces, New Mexico. The partnership was formed in January 1991 and has a
December 31 fiscal year end.

(b) Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ significantly from those estimates.

The accompanying consolidated financial statements include the accounts of
the Company, its wholly owned subsidiary BMI and its majority owned subsidiaries
Dragoon and Los Cuatros. Equity interests of Dragoon and Los Cuatros not held by
the Company are reflected as minority interest in the accompanying
F-8
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

financial statements. All material intercompany transactions have been
eliminated or disclosure has been made of the effect of intervening events from
December 31 to January 31, if any, related to the differing fiscal year ends for
Dragoon and Los Cuatros.

(d) Cash and Cash Equivalents

The Company considers all liquid investments with a maturity of three months
or less when purchased to be cash equivalents.

(e) Accounts Receivable and Allowance for Doubtful Accounts

Trade receivables are stated at face amount with no allowance for doubtful
accounts. An allowance for doubtful accounts is not considered necessary by
management due to the Company's history of a relatively low occurrence of bad
debts.

(f) Financial Instruments

Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments, requires the fair value of financial instruments
be disclosed. The Company's financial instruments are cash and cash equivalents,
accounts receivable, notes receivable, accounts payable, short-term borrowings,
and long-term debt. The carrying amounts of cash and cash equivalents, accounts
receivable, notes receivable, accounts payable, short-term borrowings, and
long-term debt, approximate fair value.

(g) Inventories

Inventories consist primarily of merchandise and gasoline for resale and are
stated at the lower of cost or market value, with cost being determined using
the first-in, first-out (FIFO) method.

(h) Property and Equipment

Property and equipment are carried at cost. Maintenance and repairs,
including the replacement of minor items, are expensed as incurred, and major
additions to property and equipment are capitalized.

Depreciation is provided by the Company using the straight-line method for
building improvements and certain types of equipment and 1.5 and double
declining balance methods for all other depreciable assets. The estimated useful
lives of the assets range from 10-40 years for buildings and improvements; 3-15
years for machinery and equipment; 3-10 years for autos, trucks, and mobile
homes; and, consistent with industry practices, 15 years for billboards.

(i) Franchise Fees

Franchise fees are amortized on a straight-line basis over the shorter of the
life of the related franchise agreements or the periods estimated to be
benefited, ranging from 15-25 years.

(j) Deferred Registration Costs

The Board of Directors of the Company has authorized management to proceed
with the registration of its common stock under the Securities Act of 1933, as
amended. The net proceeds from the offering are expected to be approximately
$7,650,000. If successful, the proceeds will be used to retire existing
long-term debt, upgrade existing travel centers and for general corporate
purposes including the acquisition or development of additional travel centers
and outdoor advertising operations.

Costs associated with this offering have been deferred and will be deducted
from the offering proceeds, if the offering is successful, or charged to results
of operations, if it is unsuccessful.
F-9
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

(k) Sales and Cost Recognition

Sales of merchandise are recognized at the time of sale and the associated
costs of the merchandise are included in cost of sales. Revenues from rental of
billboard space are accounted for as operating leases with rental assets
recorded at cost less accumulated depreciation; and the rent is recorded as
income ratably over the life of the lease contract.

(l) Reclassification

Certain reclassifications have been made to the 1995 financial statements to
conform to the 1996 presentation.

(m) Earnings Per Common and Common Equivalent Share

Earnings per common and common equivalent share are computed by dividing net
income by the weighted average number of common and common equivalent shares
outstanding during the period presented.

<TABLE>
The number of shares used in the earnings per share computations are as
follows:
<CAPTION>
YEARS ENDED JANUARY 31, NINE MONTHS ENDED OCTOBER 31,
--------------------------- -----------------------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C>
Weighted average common and common equivalent
shares outstanding ................................... 3,362,875 3,360,599 3,362,309 3,452,991
========= ========= ========= =========
</TABLE>

The number of weighted average shares outstanding has been retroactively
restated to reflect stock dividends awarded by the Company for all periods
presented. Additionally, in accordance with SEC regulations, stock issued after
October 31, 1995 has been treated as outstanding for all periods presented.

(n) Unaudited Interim Financial Statements

The unaudited interim financial statements include all adjustments,
consisting of normal recurring adjustments, which are, in the opinion of
management, necessary for a fair presentation of the financial position and the
results of operations of the Company.

<TABLE>
(2) NOTES RECEIVABLE

Notes receivable consist of the following:
<CAPTION>

JANUARY 31, 1996 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Related parties:
Stockholder, due April 1997 plus interest at 7%, unsecured .... $10,012 10,012
Employees, annual installments totaling $10,008 plus interest
at 10%, mature April 2000, unsecured ........................ -- 40,033
------- -------
10,012 50,045
Less current maturities ....................................... 10,012 20,021
------- -------
$ -- 30,025
======= =======
Other:
Due from individuals and entities, monthly installments
totaling $665, interest at 10%, maturities from March 1998 to
October 2000, certain notes secured by land ................. $15,600 12,598
Less current maturities ....................................... 2,762 2,974
------- -------
$12,838 9,623
======= =======
</TABLE>
F-10
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

(3) PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

JANUARY 31, 1996 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
Land ................................... $ 2,020,130 2,000,018
Buildings and improvements ............. 6,892,891 6,984,901
Machinery and equipment ................ 4,110,231 4,483,112
Autos, trucks and mobile homes ......... 1,517,111 1,559,449
Billboards on operating leases ......... 3,696,682 4,253,538
Billboards ............................. 774,349 774,349
----------- -----------
Subtotal, at cost ................. 19,011,394 20,055,367
Less accumulated depreciation .......... 10,287,215 10,738,817
Construction in progress ............... 186,291 237,854
----------- -----------
Total property and equipment ...... $ 8,910,470 9,554,404
=========== ===========

During the nine months ended October 31, 1996, the Company determined the
actual lives for approximately $467,000 of equipment were generally longer than
the estimated useful lives previously established for depreciation purposes.
Therefore, effective February 1, 1996, the Company extended the estimated useful
lives of those assets, which are depreciated using the straight-line method,
from 5 years to 15 years. The effect of this change in accounting estimate
reduced depreciation expense for the nine months ended October 31, 1996 by
$48,100 (unaudited) and increased net income by $28,860 (unaudited) ($.008 per
share).

(4) BILLBOARD RENTAL INCOME

Included in property and equipment in the consolidated balance sheets of the
Company are billboards on operating leases. The billboards are owned by the
Company and the advertising space is leased to others. See Note 9 regarding land
leased from others by the Company for billboard use.

Minimum future rentals to be received on noncancelable billboard leases are
as follows:

1997 ............................. $1,277,494
1998 ............................. 1,520,943
1999 ............................. 258,191
2000 ............................. 20,164
2001 ............................. 38,862
----------
Total ........................ $3,115,654
==========

F-11
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)
<TABLE>

(5) SHORT-TERM BORROWING, BANK

Short-term borrowing, bank is as follows:

JANUARY 31, 1996 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
$150,000 line of credit with bank, variable interest payable monthly at
prime rate plus 1% (9.25% at January 31, 1996),
balance due June 1997; unsecured .................................................... $149,000 111,000
$1,000,000 line of credit with bank, variable interest payable monthly,
at prime rate plus 1% (9.25% at October 31, 1996),
balance due June 1997; unsecured .................................................... -- 831,500
-------- --------
Total short-term borrowing, bank ............................................. $149,000 942,500
======== ========

</TABLE>

The average balance outstanding on the lines of credit was approximately
$114,000 during the fiscal year ended January 31, 1996. The highest balance
outstanding during the same period was $149,000 and the average interest rate
for outstanding borrowings was 9.75 percent.

The average balance outstanding on the lines of credit was approximately
$335,100 (unaudited) during the nine months ended October 31, 1996. The highest
balance outstanding during the same period was $942,500 (unaudited) and the
average interest rate for outstanding borrowings was 9.25 percent.
F-12
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)
<TABLE>

(6) LONG-TERM DEBT

Long-term debt is as follows:

JANUARY 31, 1996 OCTOBER 31, 1996
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
Due bank, maturity June 2000, variable interest at prime plus 1%
(9.5% at January 31, 1996), monthly installments of $28,831,
secured by buildings, equipment, billboards and inventories ...................... $1,356,921 --
Due bank, maturity January 2006, variable interest at base
lending rate (9.25% at October 31, 1996), monthly installments
of $21,724, secured by mortgage and deed of trust ................................ -- 1,616,286
Due bank, maturity February 2003, variable interest at base
lending rate (9.25% at October 31, 1996), monthly installments
of $16,252, secured by billboards ................................................ -- 929,505
Due bank, maturity January 2000, variable interest at index rate
(8.75% at January 31, 1996), monthly installments of $7,446,
secured by buildings and equipment ............................................... 785,903 770,571
Due bank, maturity January 2000, variable interest at index rate
plus .5 (9.25% at January 31, 1996), monthly installments of
$8,614, secured by buildings and equipment ....................................... 866,370 849,292
Due bank, maturity February 1997, variable interest at prime
rate plus 1 (9.25% at October 31, 1996), monthly installments
of $4,100, unsecured ............................................................. -- 535,000
Due banks and other financing companies, with maturity dates
ranging from 1996 to 2002. Most bear interest at adjustable
rates ranging from 8.75% to 10.75%, with certain fixed rate
notes ranging from 8% to 10%. Monthly payments totaling
$26,323. Secured by land, buildings, equipment, billboard,
inventories, and a mortgage note ................................................. 1,845,497 1,741,140
Due individuals, various payment schedules with maturity dates
ranging from 1996 to 2004, including interest ranging from 8%
to 12%. Monthly payments totaling $9,004. Secured by land,
buildings, and billboards ........................................................ 996,013 831,125
Due stockholders and related individuals, various payment
schedules, including interest ranging from 10% to 12%. Monthly
payments totaling $13,969. The notes are partially secured by
land and buildings ............................................................... 559,981 --
Due individual by Dragoon, ten annual payments through fiscal
1997 computed as 10% of gross annual revenue from selected
water sales. In April 1996, the unpaid balance was transferred
to a contribution in aid of construction of a subsidiary ......................... 123,933 --
Other .............................................................................. 42,814 1,129
---------- ----------
6,577,432 7,274,048
Less current maturities ............................................................ 768,929 1,064,043
---------- ----------
$5,808,503 6,210,005
========== ==========

</TABLE>
F-13
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

Future maturities of long-term debt are as follows:

1997 ................................ $ 768,929
1998 ................................ 760,563
1999 ................................ 594,585
2000 ................................ 562,181
2001 ................................ 2,132,986
Thereafter........................... 1,758,188
----------
Total .......................... $6,577,432
==========

Due banks and other financing companies includes a note payable of Los
Cuatros which has an outstanding balance as of January 31, 1996 of $1,117,958,
and matured August 1, 1996. Subsequent to year end, the Company completed a
refinancing of the note payable and, therefore, it is not included in current
maturities of long-term debt. The new note payable has an outstanding principal
balance of $1,096,500 at a fixed rate of 8.125 percent and matures in 2031.

(7) INCOME TAXES

Income tax from continuing operations consists of the following:

JANUARY 31,
--------------------------
1995 1996
---- ----
Federal income taxes ..... $249,322 214,780
State income taxes ....... 45,397 38,037
-------- --------
$294,719 252,817
======== ========

Financial statement income and income for tax purposes closely approximate
each other with immaterial temporary differences; therefore, no deferred taxes
are included in the consolidated balance sheets.

Income tax expense differed from the amounts computed by applying the U.S.
federal income tax rate of 34 percent to pretax income from continuing
operations as a result of the following factors:

JANUARY 31,
-----------------------
1995 1996
---- ----
Computed "expected" tax ......................... $259,650 216,388
State income taxes, net of federal tax benefit... 29,962 25,104
Other ........................................... 5,107 11,325
-------- --------
Total ..................................... $294,719 252,817
======== ========

The Company acquired Dragoon in 1986. Dragoon had a net operating loss
carryforward of $38,301 which expired December 31, 1995. The original net
operating loss arose in 1980 prior to acquisition by the Company. Dragoon files
a separate tax return from the Company and the net operating loss applied to
that tax return.

(8) PROFIT SHARING PLAN

The Company maintains a qualified defined contribution profit sharing plan
that covers substantially all employees. The plan year end is December 31. The
elected salary reduction is subject to limits as defined by the Internal Revenue
Code. The Company provides a matching contribution and additional
F-14
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

discretionary contributions as determined by resolution of the Board of
Directors. Legal and accounting expenses related to the plan are absorbed by the
Company and were approximately $1,500 and $8,250 for fiscal 1995 and 1996,
respectively. Prior to fiscal 1996, the Company's profit sharing plan was self-
administered. The Company contributed $84,926 to the profit sharing plan in
fiscal 1995 and $84,845 in fiscal 1996.

(9) COMMITMENTS AND CONTINGENCIES

The Company leases land at several of its retail operating locations.
Included in general and administrative expenses in the accompanying consolidated
statements of income for the years ended January 31, 1995 and 1996, is rental
expense for these land leases of $253,858 and $269,627, respectively.

The leasing agreements for the various locations include 5-35 year leases
with remaining lives on those leases ranging from approximately 5-25 years at
January 31, 1996. Renewal options vary, with the most extensive including three
5-year renewal options. Contingent rentals are generally based on percentages of
specified gross receipts. Several leases include terms for computation of rent
expense as the greater of a percent of gross receipts or a percent of land value
as defined by the lease. In most cases, the Company is responsible for certain
repairs and maintenance, insurance, property taxes or property tax increases,
and utilities.

Future minimum rental payments under these leases are as follows:

1997 ................................. $ 86,576
1998 ................................. 63,900
1999 ................................. 54,900
2000 ................................. 34,100
2001 ................................. 27,550
Thereafter............................ 432,298
--------
Total ........................... $699,324
========

The Company has entered into various land operating leases for billboard
space. These leases require minimum annual rentals and range from terms of 1-5
years. Rent expense was $394,438 and $458,461 for the years ended January 31,
1995 and 1996, respectively. At January 31, 1996 and October 31, 1996, the
Company had prepaid on these leases in the amounts of $237,361 and $257,901
(unaudited), respectively. See note 4 regarding billboard advertising space
leased to others by the Company.

Future minimum rental payments under these leases are as follows:

1997 .............................. $ 442,027
1998 .............................. 277,449
1999 .............................. 233,354
2000 .............................. 202,664
2001 .............................. 151,542
Thereafter ........................ 202,496
----------
Total ........................ $1,509,532
==========

Effective October 1, 1995, the Company entered into a Distributor Franchise
Agreement with CITGO Petroleum Corporation to allow the sale of petroleum
products under CITGO's trademark to consumers and retailers. The agreement is
effective for three years through September 30, 1998 and provides for automatic
renewal for successive three year periods. Under the agreement, the Company is
required to purchase a minimum of 1,675,000 gallons annually at prevailing
market rates. During the year
F-15
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

ended January 31, 1996, purchases by the Company were in excess of the minimum
requirements under the agreement and management expects purchases to continue to
exceed minimum requirements over the life of the agreement.

(10) RELATED PARTY TRANSACTIONS (SEE ALSO NOTES 1, 2, 4, 6 AND 9)

The following interest transactions took place with related parties during
the periods presented as follows:

YEARS ENDED JANUARY 31, NINE MONTHS ENDED OCTOBER 31,
----------------------- -----------------------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
Interest income .... $ 4,900 4,314 -- 2,027
Interest expense ... 63,000 65,753 49,315 33,995
======= ======= ======= =======

An individual who is an officer and stockholder in the Company is also an
officer and stockholder in Stuckey's Corporation (Stuckey's). The Company paid
Stuckey's franchise fees for four stores in the amount of $36,618 and $36,612
for January 31, 1995 and 1996, respectively. Franchise fees are included in
general and administrative expenses on the accompanying consolidated statements
of income.

A stockholder of the Company is a 1 percent stockholder in Dragoon.

(11) CASH FLOW DISCLOSURES

Cash paid for interest and income taxes was as follows:

YEARS ENDED JANUARY 31, NINE MONTHS ENDED OCTOBER 31,
---------------------- ------------------------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
Interest ....... $537,163 608,104 412,018 507,145
Income taxes ... 315,256 257,817 226,478 206,150
======== ======== ======== ========

Supplemental disclosures of noncash investing and financing activities are as
follows:

The Company finances a significant portion of property and equipment. During
the years ending January 31, 1995 and 1996, respectively, approximately
$1,288,000 and $1,306,000 of additional long-term debt was obtained, most of
which can be directly associated with fixed asset and land acquisitions. During
the nine months ended October 31, 1995 and 1996, approximately $659,000
(unaudited) and $2,165,000 (unaudited) respectively, of additional long-term
debt was obtained, most of which can be directly associated with fixed asset and
land acquisitions and expansion of the outdoor advertising division.

For the year ended January 31, 1995, the Company issued 212,055 shares of
stock dividends at approximately $1.56 per share, totaling $327,915. For the
year ended January 31, 1996, the Company issued 232,522 shares of stock
dividends at approximately $1.59 per share, totaling $368,116. The book value of
shares distributed as stock dividends approximates fair market value.

During the nine months ended October 31, 1996, the Company issued 191,799
(unaudited) shares of stock dividends at approximately $1.56 per share, totaling
$298,773 (unaudited). The book value of shares distributed as stock dividends
approximates fair market value.
F-16
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)
<TABLE>

(12) INDUSTRY SEGMENT INFORMATION

The Company's major operations are in the retail sale of merchandise, food
and gasoline to the traveling public (travel center operations) and outdoor
advertising operations. Revenue, operating income, identifiable assets,
depreciation and amortization, and capital expenditures pertaining to the
industries in which the Company operates are presented below (in thousands of
dollars) for each of the fiscal years ended January 31.

<CAPTION>
TRAVEL OUTDOOR
CENTER ADVERTISING CORPORATE
OPERATIONS OPERATIONS AND OTHER CONSOLIDATED
---------- ---------- --------- -----------
<S> <C> <C> <C> <C>
1995:
Net sales .................................... $19,578 2,376 -- 21,954
Operating income ............................. 1,425 204 (320) 1,309
Identifiable assets .......................... 5,285 2,424 2,734 10,443
Depreciation and amortization ................ 451 252 118 821
Capital expenditures ......................... 342 556 632 1,530
======= ======= ======= =======
1996:
Net sales .................................... $20,175 2,770 -- 22,945
Operating income ............................. 1,284 158 (275) 1,167
Identifiable assets .......................... 5,896 2,888 2,723 11,507
Depreciation and amortization ................ 434 261 162 857
Capital expenditures ......................... 576 691 227 1,494
======= ======= ======= =======
</TABLE>

Other income, representing primarily rental income and sales from crops owned
by the Company, is presented below:

YEARS ENDED JANUARY 31, NINE MONTHS ENDED OCTOBER 31,
----------------------- -----------------------------
1995 1996 1995 1996
---- ---- ---- ----
(UNAUDITED)
Rental income .......... $353 292 287 309
Crop sales ............. 67 109 109 135
Other .................. -- 89 21 20
---- ---- ---- ----
$420 490 417 464
==== ==== ==== ====

(13) SUBSEQUENT EVENTS

Subsequent to January 31, 1996, the Company entered into a consolidating note
agreement with a financial institution. The new note agreement consolidated
approximately $1,700,000 of the Company's existing debt and provides for
$1,000,000 of new debt. The new debt is to be used primarily for the expansion
of the Company's outdoor advertising operations and continuing improvements of
existing travel centers. The notes have a variable interest rate of prime plus 1
percent and mature in March 2006 and March 2003, respectively.

In addition, the Company secured a line of credit for $1,000,000 having a
variable interest rate of prime plus 1 percent. The line matures in June 1997
and is secured by billboards and inventory.

Subsequent to January 31, 1996, the Company paid in full its indebtedness to
stockholders and officers of the Company. The balance was approximately $535,000
at the date of payoff ($560,000 at January 31, 1996). In order to pay its
stockholders and officers, the Company secured a note payable with a financial
institution in the amount of $535,000 with a variable interest rate of prime
plus 1 percent. The note matures in February 1997.
F-17
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- (Continued)

On October 1, 1996 the Company sold Dragoon to an unrelated third party. The
sale agreement provides for the continued provision of adequate water utilities
to the Company. In conjunction with the sale the Company incurred a loss of
approximately $10,000.

<TABLE>

On September 27, 1996, the Company entered into employment contracts,
effective February 1, 1997, with the President and the Chief Operating Officer
for salaries totaling $340,000 annually, and has additionally announced that
discretionary bonuses paid to management annually through January 31, 1996, will
not be paid for fiscal 1997. The pro forma effect of these changes in the
compensation of the President and the Chief Operating Officer are as follows
(unaudited):

<CAPTION>
BONUS SALARY
AS REPORTED PAID INCREASE PRO FORMA
----------- ---- -------- ---------
<S> <C> <C> <C> <C>
Compensation amounts
Year ended 1/31/96 ......................... $ 478,875 (300,425) 184,000 362,450
Nine months ended 10/31/96 ................. 142,838 -- 129,000 271,838
----------- ---------- ---------- ----------
Earnings per common and common equivalent share
Year ended 1/31/96 ......................... $ .11 .05 (.03) .13
Nine months ended 10/31/96 ................. .20 -- (.02) .18
----------- ---------- ---------- ----------
</TABLE>

On September 27, 1996, the Board of Directors of the Company granted options
to purchase an aggregate of 338,000 shares of Common Stock to 62 employees and
officers, and 6,000 shares to each of its four non-employee Directors and
Director-Nominees, effective as of the closing date of the proposed public
offering of Common Stock. All of the options granted have an exercise price per
share equal to the initial public offering price and provide for a three-year
vesting period.

<TABLE>

On November 12, 1996, the Company entered into an agreement with Miller
Capital Corporation ("Miller") whereby 98,537 shares of outstanding common stock
were returned to the Company without consideration, and the stock certificates
were cancelled. The shares had been issued in April, 1996 in exchange for, among
other services, services rendered in conjunction with the proposed initial
public offering. The effects of this transaction on weighted average common and
common equivalent shares outstanding and earnings per common and common
equivalent share for all periods presented are as follows:

YEARS ENDED JANUARY 31, NINE MONTHS ENDED OCTOBER 31,
----------------------------- --------------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average common and common
equivalent shares outstanding
As reported ............................. 3,362,875 3,360,599 3,362,309 3,452,991
Adjusted ................................ 3,283,718 3,281,442 3,283,152 3,305,865
Earnings per common and common
equivalent share
As reported ............................. $ 0.14 0.11 0.12 0.20
Adjusted ................................ 0.14 0.12 0.13 0.21

</TABLE>
F-18
<PAGE>
(IMAGE OMITTED: PHOTOS OF REGISTRANT'S TRAVEL CENTERS)
<PAGE>
=========================================== ===================================

NO DEALER, SALESMAN OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS WITH RESPECT TO THE OFFERING
MADE HEREBY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL ANY OF THE
SECURITIES OFFERED HEREBY IN ANY 1,100,000 SHARES OF
JURISDICTION WHERE, OR TO ANY PERSON TO COMMON STOCK
WHOM, IT IS UNLAWFUL TO MAKE SUCH AN
OFFER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER [LOGO]
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN Bowlin(TM)
IMPLICATION THAT THERE HAS BEEN NO CHANGE OUTDOOR ADVERTISING & TRAVEL
IN THE INFORMATION SET FORTH HEREIN OR IN CENTERS INCORPORATED
THE BUSINESS OF THE COMPANY SINCE THE DATE
HEREOF.

----------

TABLE OF CONTENTS

PAGE
----
Prospectus Summary ..................... 3
Risk Factors ........................... 7
Dividends .............................. 10
Dilution ............................... 10
Use of Proceeds ........................ 11
Capitalization ......................... 12
Selected Consolidated Financial Data .. 13
Management's Discussion and Analysis
of Financial Condition and Results of
Operations ............................ 15
Business ............................... 22
Properties ............................. 30
Management ............................. 32 ----------
Executive Compensation ................. 34 PROSPECTUS
Certain Transactions ................... 37 ----------
Principal Stockholders ................. 38
Description of Securities .............. 39
Underwriting ........................... 40
Legal Matters .......................... 42
Experts ................................ 42
Changes in Registrant's Certifying
Accountants ........................... 42
Additional Information ................. 43
Financial Statements ................... F-1

Until , 1997 (25 days after the date of
this Prospectus), all dealers effecting
transactions in the registered securities, HD BROUS & CO., INC.
whether or not participating in this , 1996
distribution, may be required to deliver a
Prospectus. This is in addition to the
obligation of dealers to deliver a
Prospectus when acting as underwriters and
with respect to their unsold allotments or
subscriptions.
=========================================== ===================================
<PAGE>
PART II TO FORM SB-2

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 12 of the Company's Articles of Incorporation and Article X of the
Company's By-laws limit, to the fullest extent permitted by the Nevada General
Corporation Law, as amended ("NGCL"), directors' personal liability to the
Company or its stockholders for monetary damages or breach of fiduciary duty.
Section 78.751 of the NGCL enables a corporation to eliminate or limit personal
liability of members of its board of directors for violations of their fiduciary
duties. However, Nevada law does not permit the elimination of a director's
liability for engaging in any transaction from which the director derived an
improper personal benefit or for unlawfully paying a distribution. The statute
has no effect on the availability of equitable remedies, such as an injunction
or rescission, for breach of fiduciary duty.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated costs and expenses of the
Company in connection with the Offering other than underwriting discounts.

SEC Registration Fee ........................................ $ 5,948
NASD Filing Fee ............................................. 2,225
Nasdaq National Market Listing Fee* ......................... 31,790
Legal Fees and Expenses* .................................... 100,000
Accounting Fees and Expenses* ............................... 65,000
Representative's Nonaccountable Expense Allowance** ......... 22,000
Financial Consultant Fee*** ................................. 132,000
Printing and Engraving Expenses* ............................ 50,000
Blue Sky Fees and Expenses* ................................. 15,000
Miscellaneous* .............................................. 111,037
--------
Total* ...................................................... $535,000
========
- ----------
* Estimated
** $25,300 if the Over-Allotment Option is exercised in full.
*** $151,800 if the Over-Allotment Option is exercised in full.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

On December 31, 1993, the Company issued 2,321 shares of Common Stock to
Harold and Lidia Van Tongeren, jointly, for an aggregate consideration of
$3,531.

On January 15, 1995, the Company issued 1,688 shares of Common Stock to
Harold and Lidia Van Tongeren, jointly, for an aggregate consideration of
$2,624.

On April 26, 1996, the Company issued (i) 633 shares of Common Stock to
Harold and Lidia Van Tongeren, jointly, for an aggregate consideration of $996,
(ii) 4,220 shares of Common Stock to William J. McCabe for an aggregate
consideration of $6,640, (iii) 12,238 shares of Common Stock to Anita J. Vachon
for an aggregate consideration of $19,256, (iv) 25,531 shares of Common Stock to
Michael E. Rising for an aggregate consideration of $40,172 and (v) 98,537
shares of Common Stock to Miller Capital Corporation as compensation for certain
financial consulting services rendered with a value of approximately $155,044
(which shares were returned without consideration on November 12, 1996).

On September 27, 1996, the Company granted options to purchase an aggregate
of 338,000 shares of Common Stock to 62 officers and employees of the Company
and approved the grant of options to directors to purchase 24,000 shares
effective upon completion of the Offering pursuant to its 1996 Stock Option
Plan. All of such options have an exercise price per share equal to the initial
public offering price. None of such options have been exercised to date.
II-1
<PAGE>
No underwriters were involved in the foregoing sales of securities. Such
sales were made in reliance upon an exemption from the registration provisions
of the Securities Act set forth in Section 4(2) thereof relative to sales by an
issuer not involving any public offering and the rules and regulations
thereunder or, in the case of options granted under the Company's 1996 Stock
Option Plan, Rule 701 of the Securities Act. All of foregoing securities are
deemed restricted securities for purposes of the Securities Act.

Item 27. Exhibits

<TABLE>

(a) Exhibits.

EXHIBIT METHOD OF
NUMBER DESCRIPTION FILING
- ------ ----------- ------
<S> <C> <C>
1.1 Form of Underwriting Agreement ***
3.1 Articles of Incorporation of Registrant ***
3.2 By-laws of Registrant ***
4 Specimen of Common Stock Certificate ***
5 Opinion of Squire, Sanders & Dempsey L.L.P. ***
10.1 Form of Billboard Outdoor Advertising Agreement ***
10.2 Form of Poster Outdoor Advertising Agreement ***
10.3 Distributor Franchise Agreement, dated as of July 19, 1995, between ***
the Registrant and CITGO Petroleum Corporation
10.4 Form of Representative's Option ***
10.5 Form of Employment Agreement, dated as of September 27, 1996, between ***
the Registrant and Michael L. Bowlin
10.6 Form of Employment Agreement, dated as of September 27, 1996, between ***
the Registrant and C. Christopher Bess
10.7 Loan Agreement, dated as of January 31, 1995, between the ***
Registrant and First Security Bank of New Mexico, N.A. ("First
Security Bank")
10.8 Loan Agreement, dated as of May 16, 1995, between the Registrant and ***
First Security Bank
10.9 Promissory Note, dated as of May 16, 1995, payable to First Security ***
Bank in the aggregate principal amount of $900,000
10.10 Revolving Promissory Note, dated as of June 1, 1996, payable by the ***
Registrant to First Security Bank in the aggregate principal
amount of $150,000
10.11 Revision Agreement, dated as of May 16, 1995, between the ***
Registrant and First Security Bank
10.12 Promissory Note, dated as of February 5, 1996, payable by the ***
Registrant to Norwest Bank New Mexico, National Association ("Norwest
Bank") in the aggregate principal amount of $1,700,00
10.13 Business Loan Agreement, dated as of February 5, 1996, between the ***
Registrant and Norwest Bank
10.14 Promissory Note, dated as of February 5, 1996, payable by the ***
Registrant to Norwest Bank in the aggregate principal amount of
$1,000,000
10.15 Promissory Note, dated as of February 5, 1996, payable by the ***
Registrant to Norwest Bank in the aggregate principal amount of up to
$1,000,000
10.16 [Intentionally omitted]

II-2
<PAGE>
EXHIBIT METHOD OF
NUMBER DESCRIPTION FILING
- ------ ----------- ------
10.17 Lease, dated as of November 22, 1966, between Clara May Basset and ***+
the Registrant, as amended
10.18 Lease, dated as of January 12, 1987, between Janet Prince and the ***+
Registrant
10.19 Commercial Lease, dated as of September 21, 1986, between the State ***
of Arizona and the Registrant, as amended
10.20 Business Lease, dated as of March 16, 1995, between the New Mexico ***
Commissioner of Public Lands and the Registrant, as amended
10.21 Lease, dated as of June 3, 1974, between the Registrant and Elbert ***+
and Ina Jean Roundy, as amended
10.22 Lease Agreement, dated as of June 23, 1989, between the Registrant ***+
and Rex Kipp, Jr., as amended
10.23 Lease, dated as of September 29, 1983, between J.T. and Idra M. ***+
Turner and the Registrant
10.24 Business Lease, dated as of October 1, 1991, between the Registrant ***
and the New Mexico Commissioner of Public Lands
10.25 Commercial Lease, dated as of September 21, 1986, between the ***
Registrant and the State of Arizona, as amended
10.26 Commercial Lease, dated as of June 11, 1986, between the Registrant ***
and the State of Arizona, as amended
10.27 1996 Stock Option Plan ***
10.28 Profit-Sharing 401(k) Plan and Trust ***
10.29 Letter of Agreement, dated as of April 26, 1996, between the ***
Registrant and Miller Capital Corporation, as amended
10.30 Promissory Note, dated as of August 23, 1996, payable by the ***
Registrant to Norwest Bank in the aggregate principal amount of
$535,000
10.31 Commercial Guaranty, dated August 23, 1996, by Michael L. Bowlin in ***
favor of Norwest Bank New Mexico, National Association.
10.32 "Dairy Queen" Operating Agreement, dated as of March 10, 1983, ***
between Interstate Dairy Queen Corporation and the Registrant d/b/a
DQ/B of Edgewood, NM, together with amendments and ancillary
agreements related thereto
10.33 "Dairy Queen" Operating Agreement, dated as of May 1, 1982, ***
between Interstate Dairy Queen Corporation and the Registrant d/b/a
DQ/B of Flying C, New Mexico, together with amendments and ancillary
agreements related thereto
10.34 "Dairy Queen" Store Operating Agreement, dated as of November 18, ***
1986, between Dairy Queen of Southern Arizona, Inc. and the
Registrant, together with amendments and ancillary agreements
related thereto
10.35 "Dairy Queen" Operating Agreement, dated as of September 1, 1982, ***
between Interstate Dairy Queen Corporation and the Registrant d/b/a DQ
of Bluewater, New Mexico, together with amendments and ancillary
agreements related thereto
10.36 "Dairy Queen" Operating Agreement, dated as of July 29, 1976, ***
between Richard G. Kassel and G. Leone Kassel and the Registrant, as
amended

II-3
<PAGE>
EXHIBIT METHOD OF
NUMBER DESCRIPTION FILING
- ------ ----------- ------
10.37 "Dairy Queen" Store Operating License Agreement, dated as of ***
February 1, 1984, between Dairy Queen of Arizona, Inc. and the
Registrant, together with amendments and ancillary agreements
related thereto
10.38 "Dairy Queen" Operating Agreement dated as of October 30, 1985, ***
between Interstate Dairy Queen Corporation and the Registrant, as
amended
10.39 "Dairy Queen" Operating Agreement, dated as of June 7, 1989, ***
between Interstate Dairy Queen Corporation and the Registrant d/b/a
"DQ" at Butterfield Station, together with amendments and ancillary
agreements related thereto
10.40 Letter of Agreement, dated as of March 1, 1987, between Stuckey's ***
Corporation and the Registrant confirming franchise of Benson, AZ
Stuckey's Pecan Shoppe
10.41 Franchise Agreement, dated as of February 22, 1982, between ***
Stuckey's, Inc. and the Registrant, together with a related Personal
Guaranty and Indemnity

11 Computation of Per Share Earnings ***

16.1 Letter from Arthur Andersen LLP on Change in Certifying ***
Accountant
16.2 Letter from Ricci & Ricci on Change in Certifying Accountant ***
21 List of Subsidiaries ***
23.1 Consent of KPMG Peat Marwick LLP *
23.2 Consent of Ricci & Ricci *
23.3 Consent of Squire, Sanders & Dempsey L.L.P. Included in
Exhibit 5
24 Powers of Attorney ***
99.1 Consent of James A. Clark ***
99.2 Consent of Brian McCarty ***

<FN>
- ----------
* Filed herewith.
** To be filed by Amendment.
*** Previously filed.
+ Confidential treatment granted as to certain portions of this
exhibit.
</FN>
</TABLE>

ITEM 28. UNDERTAKINGS

1. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Act, and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
2. The undersigned small business issuer will: (i) for determining any
liability under the Act, treat the information omitted from the form of
prospectus filed as a part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the small business issuer
under Rule 424(b)(1), or (4) or 497(h) under the Act as part of this
registration statement as of the time the Commission declared it effective and
(ii) for determining any liability under the Act, treat each post-effective
amendment that contains a form of prospectus as a new registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.

3. The undersigned small business issuer will:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar volume of
securities offered would not exceed that which was registered) and any
deviations from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the volume
and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; (iii) Include any additional or
changed material information on the plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

4. The undersigned small business issuer will provide to the underwriter at
the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
II-5
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this amendment to the
registration statement to be signed on its behalf by the undersigned, in the
City of Phoenix and State of Arizona on December 16, 1996.

BOWLIN OUTDOOR ADVERTISING & TRAVEL
CENTERS INCORPORATED, a Nevada corporation

By /s/ MICHAEL L. BOWLIN
-----------------------------------------
Michael L. Bowlin, President

<TABLE>

In accordance with the requirements of the Securities Act of 1933, this
amendment to the Registration Statement was signed below by the following
persons in the capacities and on the dates stated.

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>

/s/ MICHAEL L. BOWLIN Chairman of the Board, Chief December 16, 1996
------------------------------ Executive Officer and President
Michael L. Bowlin (Principal Executive Officer)

* Chief Financial Officer (Principal December 16, 1996
------------------------------ Financial Officer; Principal
Michael E. Rising Accounting Officer)

* Executive Vice President, Chief December 16, 1996
------------------------------ Operating Officer and Director
C. Christopher Bess

* Corporate Treasurer, Chief December 16, 1996
------------------------------ Administrative Officer and Director
Nina J. Pratz

* Director December 16, 1996
------------------------------
Robert L. Beckett

* Director December 16, 1996
------------------------------
Harold Van Tongeren

* By /s/ MICHAEL L. BOWLIN
- ------------------------------
Michael L. Bowlin
Attorney-in-Fact

</TABLE>
SB-1

Independent Auditors' Consent
-----------------------------

The Board of Directors
Bowlin Outdoor Advertising
& Travel Centers Incorporated:

We consent to the use of our reports included herein and to the reference to our
firm under the headings "Selected Consolidated Financial Data," "Experts" and
"Changes in Registrant's Certifying Accountants" in the prospectus.

KPMG Peat Marwick LLP

Albuquerque, New Mexico
December 16, 1996

[LOGO]

Board of Directors
Bowlin Outdoor Advertising &
Travel Centers Incorporated

Independent Auditors' Consent

We consent to the use of our reports included herein and to the reference to our
firm under the headings "Selected Consolidated Financial Data," "Experts," and
"Changes in Registrant's Certifying Accountants" in the prospectus.

/s/ Ricci & Ricci

Albuquerque, New Mexico
December 16, 1996