United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended April 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXHANGE ACT For
the transition period from [ ] to [ ]
Commission File Number 0-21451
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
(Exact name of small business issuer as specified in its charter)
NEVADA 85-0113644
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
150 LOUISIANA NE, ALBUQUERQUE, NM 87108
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 505-266-5985
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No ___
As of June 16, 1997, 4,384,848 shares of the issuer's common stock were
outstanding.
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of
April 30, 1997 and January 31, 1997 3
Consolidated Statements of Income for the
Three months ended April 30, 1997 and 1996 5
Consolidated Statements of Cash Flows for the
Three months ended April 30, 1997 and 1996 6
Notes to the Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis or
Plan of Operation 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Under Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Matters 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(IN THOUSANDS, EXCEPT SHARE DATA)
APRIL 30, JANUARY 31,
1997 1997
(UNAUDITED) (AUDITED)
--------------- ---------------
Current assets:
Cash and cash equivalents $ 4,905 $ 7,519
Accounts receivable, net 313 366
Notes receivable - current maturities 26 26
Inventories 3,626 3,202
Prepaid and other current assets 699 465
--------------- ---------------
Total current assets 9,569 11,578
Investment and long-term receivables:
Investment in partnership 13 13
Notes receivable, less current
maturities 105 96
--------------- ---------------
Total investment and long-term
receivables 118 109
Property & equipment, net 14,519 9,971
Intangible assets, less accumulated
amortization of $ 111 at April 30, 1997
and $ 108 at January 31, 1997 99 101
Goodwill, less accumulated amortization of
$5 at April 30, 1997 858 -
Deferred registration costs & other
deferred assets 84 84
--------------- ---------------
Total assets $ 25,247 $ 21,843
=============== ===============
See accompanying notes to consolidated financial statements.
3
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BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
APRIL 30, JANUARY 31,
1997 1997
(UNAUDITED) (AUDITED)
--------------- ---------------
Current liabilities:
Short-term borrowing, bank $ 209 $ -
Accounts payable and accrued liabilities 1,689 1,597
Long-term debt, current maturities 728 576
Income taxes payable 170 145
--------------- ---------------
Total current liabilities 2,796 2,318
Deferred income taxes 56 43
Long-term debt, less current maturities 8,777 6,118
--------------- ---------------
Total liabilities 11,629 8,479
Minority interest 205 206
Stockholders' equity
Common stock, $.001 par value;
authorized 100,000,000 shares;
issued and outstanding 4,384,848 shares 4 4
Additional paid-in capital 11,604 11,604
Retained earnings 1,805 1,550
--------------- ---------------
Total stockholders' equity 13,413 13,158
--------------- ---------------
Total liabilities and stockholders'
equity $ 25,247 $ 21,843
=============== ===============
See accompanying notes to consolidated financial statements.
4
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
FOR THE THREE MONTHS ENDED
----------------------------------
APRIL 30, APRIL 30,
1997 1996
(UNAUDITED) (UNAUDITED)
--------------- ---------------
Gross sales $ 6,682 $ 5,941
Less discounts on sales 77 71
--------------- ---------------
Net sales 6,605 5,870
Cost of goods sold 4,459 3,896
--------------- ---------------
Gross profit 2,146 1,974
General and administrative expenses (1,568) (1,479)
Other income 32 164
Depreciation and amortization (218) (193)
--------------- ---------------
Operating income 392 466
Other non-operating income (expense):
Interest income 82 24
Gain on sale of property and equipment 105 -
Interest expense (154) (159)
--------------- ---------------
Total other non-operating income
(expense), net 33 (135)
--------------- ---------------
Income before taxes 425 331
Income taxes 170 132
--------------- ---------------
Net income $ 255 $ 199
=============== ===============
Weighted average common and common
equivalent shares outstanding 4,384,848 3,363,348
Earnings per common and common
equivalent share $ 0.06 $ 0.06
=============== ===============
See accompanying notes to consolidated financial statements.
5
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
FOR THE THREE MONTHS ENDED
----------------------------------
APRIL 30, APRIL 30,
1997 1996
(UNAUDITED) (UNAUDITED)
--------------- ---------------
Cash flows from operating activities:
Net income $ 255 $ 199
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 218 193
Income from partnership investment - 13
Gain on sale of property and equipment (105) -
Deferred income taxes 13 -
Changes in operating assets and
liabilities (488) (335)
--------------- ---------------
Net cash (used in) provided by
operating activities (107) 70
Cash flows from investing activities:
Business acquisitions (note 2) (4,865) -
Purchases of property and equipment, net (653) (272)
Disbursements on notes receivable, net (9) (83)
--------------- ---------------
Net cash used in investing activities (5,527) (355)
Cash flows from financing activities:
Borrowings on debt 3,239 3,111
Payments on debt (219) (2,062)
Proceeds from issuance of common stock, net - 225
Dividends paid - (51)
Payment of registration costs associated
with initial public offering of common
stock - (185)
--------------- ---------------
Net cash provided by financing
activities 3,020 1,038
--------------- ---------------
Net (decrease) increase in cash and cash
equivalents (2,614) 753
Cash and cash equivalents at beginning of
period 7,519 1,602
--------------- ---------------
Cash and cash equivalents at end of period $ 4,905 $ 2,355
=============== ===============
See accompanying notes to consolidated financial statements.
6
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements for the three months ended April 30,
1997 and April 30, 1996 are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of the financial position
and operating results for the interim periods. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations,
contained in the Company's annual report on Form 10-KSB for the fiscal year
ended January 31, 1997. Results of operations for interim periods are not
necessarily indicative of results which may be expected for the year as a
whole.
2. Acquisitions. On April 1, 1997, the Company acquired all of the tangible
and intangible assets and certain liabilities of the outdoor advertising
division of The McCarty Company (McCarty) known as Pony Panels for $4.2
million. A member of the Company's Board of Directors is the majority
shareholder of The McCarty Company. The Company paid $1.7 million from the
proceeds of the initial public offering and financed $2.5 million with bank
debt. The bank debt carries a variable rate of interest tied to the bank's
prime rate (8.5% at April 30, 1997) and matures on April 1, 2007. Pony
Panels owns and operates approximately 750 8-sheet poster panels in the
Albuquerque, New Mexico metro area. The Company also entered into a
non-compete agreement with the former principals of McCarty for a period of
five years from the date of acquisition. The acquisition was accounted for
as a purchase and goodwill is being amortized over 20 years using the
straight-line method.
Assets acquired and liabilities assumed in the
acquisition are as follows:
Accounts receivable $ 73,941
Prepaid sign rent 15,057
Vehicles and equipment 63,500
Signs 3,200,000
Goodwill 863,000
Accounts payable (15,498)
---------------
$ 4,200,000
===============
The following proforma consolidated results of operations have been
prepared as if the acquisition of Pony Panels occurred at January 31, 1997
and 1996:
(in thousands except per share amounts)
Three Months Ended
------------------
April 30
--------
1997 1996
---- ----
Gross sales $ 6,794 $ 6,139
Net income 241 188
Earnings per common and
common equivalent share $ .06 $ .06
7
<PAGE>
The proforma information is presented for informational purposes only and
is not necessarily indicative of the results of operations that actually
would have been achieved had the acquisition been consumated as of that
time, nor is it intended to be a projection of future results.
On April 26, 1997, the Company purchased the outdoor advertising assets of
General Outdoor Advertising for $240,000 in cash. The cash was provided
from proceeds of the Company's public offering of stock in December 1996.
The transaction was accounted for as a purchase.
On April 29, 1997, the Company purchased the outdoor advertising assets of
Mesa Outdoor Advertising for $150,000 in cash and a note payable to the
former owner in the amount of $275,000. The cash was provided from proceeds
of the Company's public offering of stock in December 1996. The note is
secured by the assets purchased, bears interest at a fixed rate of 9.0% per
annum and matures on May 1, 2007. The transaction was accounted for as a
purchase.
3. Subsequent Events. On May 2, 1997, the Company secured an additional line
of credit with one of its existing lenders of $1 million. The line carries
a variable interest rate based on the bank's prime lending rate (8.5% on
May 2, 1997). The primary purpose of the line of credit is to finance
future acquisitions of outdoor advertising assets.
4. As of April 30, 1997, there were approximately 30 shareholders of record of
the Company's common stock. Included in the shareholders of record are a
731 beneficial shareholders of the Company's common stock.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
OVERVIEW
The following is a discussion of the consolidated financial condition and
results of operations of the Company as of and for the two fiscal periods ended
April 30, 1997 and 1996. This discussion should be read in conjunction with the
Consolidated Financial Statements of the Company and the Notes related thereto
included in the Company's Form 10-KSB for the fiscal years ended January 31,
1997 and 1996.
The Company operates in two industry segments, travel centers and outdoor
advertising. In order to perform a meaningful evaluation of the Company's
performance in each of its operating segments, the Company has presented
selected operating data which separately sets forth the revenue, expenses and
operating income attributable to each segment , and also separately sets forth
the corporate expenses of the Company which are not properly allocable to either
of the Company's segments for purposes of determining their respective operating
income. The discussion of results of operations which follows compares such
selected operating data and corporate expense data for the fiscal periods
presented.
The forward-looking statements included in Management's Discussion and Analysis
of Financial Condition and Results of Operations, which reflect management's
best judgment based on factors currently known, involve risks and uncertainties.
Actual results could differ materially form those anticipated in these
forward-looking statements as a result of a number of factors, including but not
limited to those discussed herein.
8
<PAGE>
RESULTS OF OPERATIONS
The following table presents certain income and expense items derived from the
Consolidated Statements of Income for the three months ended April 30 (unaudited
and amounts in thousands):
% INCR/
1997 1996 (DECR)
---- ---- ------
TRAVEL CENTERS:
Gross revenues $ 5,632 $ 5,159 9.2%
Discounts on sales 77 71 7.4%
------------- -------------
Net revenues 5,555 5,088 9.2%
Cost of sales 3,903 3,457 12.9%
------------- -------------
1,652 1,631 1.3%
General and administrative
expenses 1,292 1,241 4.1%
Depreciation and
amortization 89 87 2.8%
------------- -------------
Operating income 271 303 (10.7%)
OUTDOOR ADVERTISING:
Revenues 1,050 782 34.4%
Operating expenses:
Direct operating expenses 556 439 26.8%
General and administrative
expenses 164 147 11.4%
Depreciation and
amortization 99 64 53.1%
------------- -------------
Operating income 231 132 76.0%
CORPORATE AND OTHER:
General and administrative
expenses (112) (91) 23.4%
Depreciation and
amortization (30) (42) (28.6%)
Interest expense (154) (159) (3.1%)
Other income, net 219 188 16.0%
------------- -------------
INCOME BEFORE TAXES 425 331 28.2%
INCOME TAXES 170 132 28.2%
------------- -------------
NET INCOME $ 255 $ 199 28.2%
============= =============
COMPARISON OF THE THREE MONTHS ENDED APRIL 30, 1997 AND APRIL 30, 1996
TRAVEL CENTERS. Gross revenues at the Company's travel centers increased 9.2% to
$5.6 million for the three months ended April 30, 1997 from $5.2 million for the
three months ended April 30, 1996. This increase is primarily attributable to
9
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increased sales of gasoline which increased approximately $363,000, or 13.4%,
for the three months ended April 30, 1997 as compared to the same three months
ended April 30, 1996. Also included in gross revenues for travel centers is
approximately $158,000 in wholesale gasoline sales which resulted from the
Company's first CITGO wholesale distributorship. Merchandise sales declined
slightly to $1.5 million for the three months ended April 30, 1997 from $1.6
million for the three months ended April 30, 1996. Restaurant sales increased
3.0% to $766,000 for the three months ended April 30,1997 as compared to
$744,000 for the three months ended April 30,1996.
Cost of goods sold for the travel centers increased 12.9% to $3.9 million for
the three months ended April 30, 1997 from $3.5 million for the three months
ended April 30, 1996, primarily as result of increased retail gasoline sales and
the addition of its wholesale gasoline operations.
General and administrative expenses for travel centers consist of salaries,
bonuses and commissions for travel center personnel, property costs and repairs
and maintenance. General and administrative expenses for the travel centers
increased slightly to $1.29 million for the three months ended April 30, 1997
from $1.24 million for the three months ended April 30, 1996.
Depreciation and amortization expense increased slightly to $89,000 for the
three months ended April 30, 1997 as compared to $87,000 for the three months
ended April 30, 1996. The increase is attributable to additions to depreciable
assets during the current fiscal period.
The above factors contributed to an overall decrease in travel center operating
income of 10.7% to $271,000 for the three months ended April 30,1997 from
$303,000 for the three months ended April 30, 1996. This decrease is primarily
attributable to the increases in gasoline sales which carry a much smaller
profit margin than sales of other merchandise and therefore, result in overall
smaller margins for the division.
OUTDOOR ADVERTISING. Revenues from the Company's outdoor advertising increased
34.4% to $1.1 million for the three months ended April 30, 1997 from $782,000
for the three months ended April 30, 1996. The increase was primarily
attributable to increased usage of available sign inventory, increases in rates
and the assimilation of the Company's acquisition of the outdoor advertising
assets of The McCarty Company known as Pony Panels (which was effective April 1,
1997). First month's billing revenues from the acquired assets were
approximately $65,000.
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 operating costs increased 26.8% to $556,000 for the three months ended
April 30, 1997 from $439,000 for the three months ended April 30, 1996,
principally due to addition of production personnel, the assimilation of direct
operating costs associated with the Pony Panels acquisition and increased costs
related to repairs and maintenance of existing 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 11.4% to $164,000 for the three months ended
April 30, 1997 from $147,000 for the three months ended April 30, 1996.
Depreciation and amortization expense increased 53.1% to $99,000 for the three
months ended April 30, 1997 from $64,000 for the three months ended April 30,
1996. The increase is attributable to scheduled depreciation of additional
advertising display structures and machinery and equipment. In addition,
depreciation and amortization expense increased as a result of the depreciation
of the value assigned to advertising display structures acquired in the Pony
Panels acquisition and the amortization of the related goodwill. Such expenses
amounted to approximately $21,000 for the three months ended April 30, 1997.
10
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The above factors contributed to the increase in outdoor advertising operating
income of 76.0% to $231,000 for the three months ended April 30, 1997 from
$132,000 for the three months ended April 30, 1996. In addition, earnings before
interest, taxes, depreciation and amortization (EBITDA) for outdoor advertising
increased 68.4% to $330,000 for the three months ended April 30, 1997 from
$196,000 for the three months ended April 30, 1996. The EBITDA margin for
outdoor advertising increased to 31.4% for the three months ended April 30, 1997
as compared to 24.9% for the three months ended April 30, 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, accounting, legal and investor relations fees.
General and administrative expenses increased 23.4% to $112,000 for the three
months ended April 30, 1997 as compared to $91,000 for the three months ended
April 30, 1996. This increase is primarily attributable to increased fees in the
aforementioned areas as part of the Company's transition from a privately held
company to a public entity.
Depreciation and amortization expenses for the Company's corporate and other
operations consist of depreciation associated with the corporate headquarters,
furniture and fixtures related thereto and its subsidiary. Depreciation and
amortization expenses decreased to $30,000 for the three months ended April 30,
1997 as compared to $42,000 for the three months ended April 30, 1996.
Interest expense declined 3.1% to $154,000 for the three months ended April 30,
1997 as compared to $159,000 for the three months ended April 30, 1996. This
decline is primarily attributable to the payment of certain lines of credit
(approximately $1.5 million) and more favorable terms associated with its
remaining indebtedness. See "Liquidity and Capital Resources".
Other income, net, primarily includes operating revenues and expenses from the
Company's subsidiary, farm income and gains and/or losses from the sales of
assets. Other income, net, increased 16.0% to $219,000 for the three months
ended April 30, 1997 as compared to $188,000 for the three months ended April
30, 1996.
Income before taxes increased 28.2% to $425,000 for the three months ended April
30, 1997 as compared to $331,000 for the three months ended April 30, 1996. As a
percentage of gross revenues, income before taxes increased to 6.4% for the
three months ended April 30, 1997 as compared to 5.6% for the three months ended
April 30, 1996.
Income taxes were $170,000 for the three months ended April 30, 1997 as compared
to $132,000 for the three months ended April 30, 1996, as result of higher
pretax income.
The foregoing factors contributed to the Company's increase in net income for
the three months ended April 30, 1997 of $255,000 as compared to $199,000 for
the three months ended April 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1997, the Company had working capital of $6.8 million and a current
ratio of 3.4:1, compared to working capital of $9.3 million and a current ratio
of 5.0:1 at January 31, 1997. Net cash used for operating activities was
$107,000 for the three months ended April 30, 1997 as compared to cash provided
by operating activities of $70,000 for the three months ended April 30, 1996.
This decline is primarily attributable to increases in merchandise inventory
levels to prepare for the increase in tourists in the summer traveling months.
Net cash used for investing activities for the three months ended April 30, 1997
was $5.5 million, of which $4.2 million was used in the purchase of the outdoor
11
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advertising assets of Pony Panels. On April 26, 1997 and April 29, 1997, the
Company purchased all of the outdoor advertising assets of General Outdoor
Advertising and Mesa Outdoor Advertising for $240,000 and $425,000,
respectively. In addition, approximately $300,000 was used for the purchase of
land for the construction of a new travel center complex. For the three months
ended April 30, 1996, net cash used for investing activities was $355,000. Net
cash provided by financing activities for the three months ended April 30, 1997
was $3.0 million as compared to $1.0 million for the three months ended April
30, 1996. The majority of such cash was utilized to finance the outdoor
advertising acquisitions previously noted. The Company incurred indebtedness in
the amount of $2.5 million for the Pony Panels acquisition and $275,000 for the
Mesa acquisition.
On April 26, 1997, the Company purchased the outdoor advertising assets of
General Outdoor Advertising for $240,000 in cash. The cash was provided from
proceeds of the Company's initial public offering ("IPO") of common stock in
December 1996.
On April 29, 1997, the Company purchased the outdoor advertising assets of Mesa
Outdoor Advertising for $150,000 in cash and a note payable to the former owner
in the amount of $275,000. The cash was provided from proceeds of the Company's
public offering of stock in December 1996. The note is secured by the assets
purchased, bears interest at a fixed rate of 9.0% per annum and matures on May
1, 2007.
On May 2, 1997, the Company secured an additional $1 million line of credit with
one of its existing lenders. The line of credit carries a variable interest rate
based on the bank's prime lending rate (8.5% on May 2, 1997). The primary
purpose of the line of credit is to finance future acquisitions of outdoor
advertising assets.
The Company is currently negotiating with one of its primary lenders to secure
additional lines of credit at amounts greater than its current capacities. The
Company believes that the remaining net proceeds from the IPO, internally
generated funds and funds available under current and future lines of credit
will be sufficient to satisfy all debt service obligations and finance its
current operations and anticipated capital expenditures for at least the next
twelve months.
Although the Company does not have any agreements in place, it is currently
negotiating with an independent party for the acquisition of outdoor advertising
assets and one independent party for the purchase of three travel centers. The
Company does not believe that any of these acquisitions are probable and the
Company has not executed a letter of intent or other agreement, binding or
non-binding, to make such acquisitions. Any such acquisition would be subject to
the negotiation and execution of definitive agreements, appropriate financing
arrangements, performance of due diligence, approval of the Company's Board of
Directors, receipt by the Company of unqualified audited financial statements,
and the satisfaction of other customary closing conditions, including the
receipt of third party consents. The Company would likely finance any such
acquisitions with cash, additional indebtedness or a combination of the two. 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 remaining net proceeds from the
IPO, use funds from its ongoing operations, seek additional financing from a
commercial lender or some combination of the foregoing. Any commercial financing
obtained for purposes of acquiring additional assets is likely to impose certain
financial and other restrictive covenants upon the Company and increase the
Company's interest expense.
12
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a). Exhibit No. Exhibit Name
----------- ------------
10.43 Promissory Note, dated as of May 2, 1997,
payable by the Registrant to Norwest Bank
in the aggregate principal amount of $1,000,000
27 Financial Data Schedule
(b). For events during the three months ended April 30, 1997, the Company
filed a Form 8-K on May 1, 1997 in reporting its acquisition of the
outdoor advertising assets of The McCarty Company known as Pony
Panels. No financial statements were required to be filed.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: June 16, 1997
BOWLIN
Outdoor Advertising & Travel Centers Incorporated
/s/ Michael L. Bowlin
---------------------
Michael L. Bowlin, Chairman of the Board,
President and Chief Executive Officer
/s/ Michael E. Rising
---------------------
Michael E. Rising, Chief Financial Officer
(Principal Financial and Accounting Officer)
13
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PROMISSORY NOTE
(Billboard Acquisition Loan)
<TABLE>
<S> <C>
- ------------------- --------------- --------------- --------------- -------- --------------- ------------- ------------- -----------
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$1,000,000.00 05-01-1997 05-02-1998 50028895 030 211 53868 49MAP
- ------------------- --------------- --------------- --------------- -------- --------------- ------------- ------------- -----------
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: Bowlin Outdoor Advertising & Lender: Norwest Bank New Mexico, National Association
Travel Centers, Incorporated Journal Center Business Banking
150 Louisiana Boulevard NE P.O. Box 1081
Albuquerque, NM 87108 7412 Jefferson Blvd. NE
Albuquerque, NM 87109
====================================================================================================================================
</TABLE>
PRINCIPAL AMOUNT: $1,000,000.00 INITIAL RATE: 8.500% DATE OF NOTE: MAY 2, 1997
PROMISE TO PAY. Bowlin Outdoor Advertising & Travel Centers, Incorporated
("Borrower") promises to pay to Norwest Bank New Mexico, National Association
("Lender"), or order, in lawful money of the United States of America, the
principal amount of One Million & 0/100 Dollars ($1,000,000.00) or so much as
may be outstanding, together with interest on the unpaid outstanding principal
balance of each advance. Interest shall be calculated from the date of each
advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on May 2, 1998. In addition, Borrower will pay
regular monthly payments of accrued unpaid interest beginning June 2, 1997, and
all subsequent interest payments are due on the same day of each month after
that. Interest on this Note is computed on a 365/360 simple interest basis; that
is, by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTERST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the NORWEST BANK
MINNESOTA, N.A. BASE LENDING RATE (the "Index"). The Index is not necessarily
the lowest rate charged by Lender on its loans. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current Index rate upon
Borrower's request. Borrower understands that Lender may make loans based on
other rates as well. The interest rate change will not occur more often than
each Quarter. The Index currently is 8.500% per annum. The interest rate to be
applied to the unpaid principal balance of this Note will be at a rate equal to
the Index, resulting in an initial rate of 8.500% per annum. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relive Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, they will reduce the principal balance due.
LATE PAYMENTS. If any payment is not received by Lender within five calendar
days after the payment is due as provided in this Note (the "Due Date"), then
additional interest will accrue beginning on the sixth calendar day on the
entire unpaid principal balance at the rate of three percent (3%) per year (the
"Additional Interest") until all past-due payments and any Additional Interest
are paid in full. All payments received more than 5 calendar days after the Due
Date will be applied first to past due interest and principal, then to current
interest and current principal, and then to cost of collection.
APPLICATION OF REGULAR PAYMENTS. Notwithstanding any provision of this Note to
the contrary, any regularly scheduled installment payment of principal and
interest which is received before the due date of such payment, or which is
received within 5 calendar days after the due date, will be applied to interest
and to principal as if such payment were received on the due date.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to Lender
by Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (d) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property, Borrower
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency laws.
(e) Any creditor tries to take any of Borrower's property on or in which Lender
has a lien or security interest. This includes a garnishment of any of
Borrower's accounts with Lender. (f) Any guarantor dies or any of the other
events described in this default section occurs with respect to any guarantor of
this Note. (g) A material adverse change occurs in Borrower's financial
condition or Lender believes the prospect of payment or performance of the
Indebtedness is impaired. [MAP MLB]
LENDER'S RIGHTS. Upon default, and after lender has notified Borrower of said
Default and if such Default shall not be remedied within 15 days after such
notification then, [MAP MLB] Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 5.000
percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorney's fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by Lender
in the State of New Mexico. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Bernalillo County, the
State of new Mexico. This Note shall be governed by and construed in accordance
with the laws of the State of New Mexico.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
LINE OF CREDIT. This Note evidences a straight line of credit. Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances. Advances under this Note, as well as directions for payment from
Borrower's accounts, amy be requested orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral request be
confirmed in writing. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions or an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender's internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender; (d) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (e) Lender in
good faith deems itself insecure under this Note or any other agreement between
Lender and Borrower.
FINANCIAL STATEMENTS. Borrower agrees to provide Lender, upon request, any
financial statements or information Lender may deem necessary. Borrower warrants
that all financial statements and information Borrower provides to Lender are or
will be accurate, correct and complete.
ARBITRATION. Lender and Borrower agree that, except for "Core Proceedings" under
the United States Bankruptcy Code, all disputes, claims and controversies
between them, whether individual, joint, or class in nature, arising from this
Note or otherwise, including, without limitation, contract and tort disputes,
shall be arbitrated pursuant tot he Commercial Arbitration rules of the American
Arbitration association (the "AAA"), upon request of either party. No act to
take or dispose of any collateral securing this Note shall constitute a waiver
of this arbitration agreement or be prohibited by this deed of trust or
mortgage; obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including taking or
disposing of such property with or without judicial process pursuant to Article
9 of the uniform Commercial Code.
Any disputes, claims or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right, concerning any collateral
securing this Note, including any claim to rescind, reform or otherwise modify
any agreement relating to the collateral securing this Note, shall also be
arbitrated, provided however than no arbitrator shall have the right or the
power to enjoin or restrain any act of any party. Judgment upon any award
rendered by any arbitrator may be entered in any court having jurisdiction.
Nothing in this Note shall preclude any party from seeking equitable relief from
a court of competent jurisdiction. The statute of limitations, estoppel, waiver,
laches and similar doctrines which would otherwise be applicable in an action
brought by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement of an
action for these purposes. The Federal Arbitration Act shall apply to the
construction, interpretation and enforcement of this arbitration provision.
Any arbitration hereunder shall be conducted before one arbitrator who shall be
an attorney who has practiced in the area of commercial law for at least ten
(10) years or a retired judge at the District Court or an appellate court level.
The parties to the dispute or their representatives shall obtain from AAA a list
of persons meeting the criteria outlined above and the parties shall select the
person in the manner established by the AAA.
In any arbitration hereunder: (1) the arbitrator shall decide (by documents only
or with a hearing, at the arbitrator's discretion) any pre-hearing motions which
are substantially similar to re-hearing motions to dismiss for failure to state
a claim or motions for summary adjudication; (2) discovery shall be permitted,
but shall be limited as provided in the New Mexico Rules of Civil Procedure,
with all discovery to be completed no later than 20 days before the hearing date
and within 180 days of the commencement of arbitration proceedings; and any
request for an extension of the discovery periods, or any discovery disputes
shall be subject to final determination by the arbitrator; and (3) the
arbitrator shall award costs and expenses of the arbitration proceeding in
accordance with the Lender's Rights provisions of this Note.
"BUSINESS LOAN AGREEMENT". THIS NOTE IS SUBJECT TO THAT CERTAIN BUSINESS LOAN
AGREEMENT DATED APRIL 1, 1997, AND ANY RENEWALS, REPLACEMENTS, EXTENSIONS, OR
AMENDMENTS THEREOF.
GENERAL PROVISIONS. Lender amy delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extend allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Bowlin Outdoor Advertising & Travel Centers, Incorporated
By: (sig)
-----------------------------------------
Michael L. Bowlin, Chairman and President
================================================================================
Variable Rate. Line of Credit. LASER PRO, Reg. U.S. Pat. & T.M. Off.,
Ver. 3.22b(c) 1997 CFI ProServices, Inc. All rights reserved.
[NM-D20 F3.22a BOW20501.LN C8.OVL]
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