United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
[ ] 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 registrant as specified in its charter)
NEVADA 85-0113644
(State or other jurisdiction (IRS Employer Identification
of incorporation or No.)
organization)
150 LOUISIANA NE
ALBUQUERQUE, NM 87108
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: 505-266-5985
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No ___
As of June 11, 1999, 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, 1999
and January 31, 1999............................................2
Consolidated Statements of Income for the three
Months Ended April 30, 1999 and 1998...........................4
Consolidated Statement of Stockholders' Equity
for the three
months ended April 30, 1999.....................................5
Consolidated Statements of Cash Flows for the
three Months Ended April 30, 1999 and 1998......................6
Notes to the Consolidated Financial Statements..................8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk....................................................14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................15
Item 2. Changes in Securities and Use of Proceeds......................15
Item 3. Defaults Upon Senior Securities................................15
Item 4. Submission of Matters to a Vote of Security Holders............15
Item 5. Other Information..............................................15
Item 6. Exhibits and Reports on Form 8-K...............................15
Signatures.....................................................15
1
<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)
<TABLE>
<S> <C> <C>
April 30, January 31,
1999 1999
(Unaudited)
------------------ ------------------
Current assets:
Cash and cash equivalents $ 1,802 $ 2,199
Accounts receivable, Outdoor Advertising, net 621 736
Accounts receivable, other 603 774
Notes receivable, related parties 12 12
Inventories 3,680 3,689
Prepaid expenses and other current assets 629 712
Income taxes 565 531
-------------------- --------------------
Total current assets 7,912 8,653
Property & equipment, net 28,942 26,425
Intangible assets, net 2,279 2,338
Other assets 57 73
-------------------- --------------------
Total assets $ 39,190 $ 37,489
==================== ====================
(Continued)
</TABLE>
2
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
Liabilities and Stockholders' Equity
(In thousands, except share data)
<TABLE>
<S> <C> <C>
April 30, January 31,
1999 1999
(Unaudited)
------------------ --------------------
Current liabilities:
Short-term borrowings, bank $ 277 $ -
Accounts payable 1,395 1,393
Long-term debt, current maturities 1,385 1,248
Accrued liabilities 451 517
------------------ --------------------
Total current liabilities 3,508 3,158
Deferred income taxes 488 427
Long-term debt, less current maturities 20,258 19,004
-------------------- ---------------------
Total liabilities 24,254 22,589
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 3,328 3,292
-------------------- ---------------------
Total stockholders' equity 14,936 14,900
==================== =====================
Total liabilities and stockholders' equity $ 39,190 $ 37,489
==================== =====================
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)
<TABLE>
<S>
For the Three Months Ended
----------------------------------------------------
<C> <C>
April 30, April 30,
1999 1998
(Unaudited) (Unaudited)
------------------ -----------------
Gross sales $ 8,047 $ 7,124
Less discounts on sales 80 61
------------------ -----------------
Net sales 7,967 7,063
Cost of goods sold 5,014 4,548
------------------ -----------------
Gross profit 2,953 2,515
General and administrative expenses (1,920) (1,686)
Depreciation and amortization (569) (409)
------------------ -----------------
Operating income 464 420
Non-operating income (expense):
Interest income 23 28
Gain on sale of property and equipment 5 4
Interest expense (430) (214)
------------------ -----------------
Total non-operating income (expense) (402) (182)
------------------ -----------------
Income before income taxes 62 238
Income taxes 26 93
------------------ -----------------
Net income $ 36 $ 145
================== =================
Weighted average common and potential
dilutive common shares 4,384,848 4,384,848
Earnings per share
Basic and Diluted $ .01 $ .03
================== =================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
(In thousands, except share data)
<TABLE>
<S>
For the Three Months Ended April 30, 1999
-----------------------------------------
<C> <C> <C> <C> <C>
Common Additional
Number stock, paid-in Retained
of shares at par capital earnings Total
----------- -------- ------------ ---------- -------
Balance at January 31, 1999 4,384,848 $ 4 $ 11,604 $ 3,292 $ 14,900
Net income (unaudited) 36 36
------------------------------------------------------------------------------
Balance at April 30, 1999 4,384,848 $ 4 $ 11,604 $ 3,328 $ 14,936
==============================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<S> <C> <C>
For the Three Months Ended
------------------------------------------
April 30, April 30,
1999 1998
(Unaudited) (Unaudited)
----------------- ---------------
Cash flows from operating activities:
Net income $ 36 $ 145
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 569 409
Amortization of loan fees 32 -
Provision for bad debts 9 -
Gain on sales of property and equipment (5) (4)
Deferred income taxes 61 38
Imputed interest 3 8
Changes in operating assets and liabilities 52 (406)
----------------- ---------------
Net cash provided by operating activities 757 190
Cash flows from investing activities:
Proceeds from sale of assets 19 8
Business acquisitions (note 2) (1,516) (2,565)
Purchases of property and equipment, net (1,560) (365)
Proceeds from insurance 236 -
Proceeds on notes receivable, net 2 22
----------------- ---------------
Net cash used in investing activities (2,819) (2,900)
Cash flows from financing activities:
Borrowings on short-term debt 277 165
Borrowings on long-term debt 1,750 2,690
Payments on short-term debt - (745)
Payments on long-term debt (362) (175)
----------------- ---------------
Net cash provided by financing activities 1,665 1,935
Net decrease in cash and cash equivalents (397) (775)
Cash and cash equivalents at beginning of period 2,199 4,054
----------------- ---------------
Cash and cash equivalents at end of period 1,802 3,279
================= ===============
(Continued)
</TABLE>
6
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
(In thousands)
<TABLE>
<S> <C> <C>
- - April 30, April 30,
1999 1998
(Unaudited) (Unaudited)
----------------- -----------------
Supplemental disclosure of cash flow information:
Noncash investing and financing activities:
Acquisition of covenants not-to-compete
In exchange for long-term debt $ - $ 130
================= =================
Acquisitions:
Fair value of assets acquired and liabilities assumed at the date of
the acquisitions were as follows:
Accounts receivable $ - $ 34
Prepaid expenses 3 31
Billboards 1,463 2,445
Covenants not to compete 50 -
Vehicles and equipment - 55
================= =================
</TABLE>
See accompanying notes to consolidated financial statements.
7
<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,
1999 and 1998 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 consolidated financial statements
should be read in conjunction with the consolidated financial statements
and notes, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's annual
report on Form 10-K for the fiscal year ended January 31, 1999. Certain
amounts in the prior year financial statements have been reclassified to
conform with the current year presentation. Results of operations for
interim periods are not necessarily indicative of results that may be
expected for the year as a whole.
2. On February 15, 1999, the Company opened a new travel center located
approximately 20 miles west of Albuquerque, New Mexico on Interstate 40.
The 6,000 square foot store features a state of the art convenience store
and an "old-time" trading post. This location features EXXON branded
gasoline.
3. Acquisitions. On March 1, 1999 the Company purchased the outdoor
advertising assets of GDM Outdoor Advertising (GDM) located in Tyler, Texas
for $1,353,376. The Company financed $1,350,000 with bank debt and paid
$3,376 in cash. GDM owned and operated approximately 86 painted bulletin
faces in central Texas.
On April 30, 1999 the Company purchased the outdoor advertising of
Borderline Outdoor Advertising, Inc. (Borderline) located in Bedford, Texas
for $162,575. The Company financed $150,000 and paid $12,575 in cash.
Borderline owned and operated approximately six painted bulletin faces in
central Texas.
The acquisitions were accounted for as purchase transactions. The purchase
price was allocated to the assets acquired based on their estimated fair
values and no goodwill was recorded in connection with the purchases.
The following unaudited proforma consolidated results of operations have
been prepared as if the acquisition of GDM occurred on February 1, 1998.
The effect of the Company's acquisition of the assets of Borderline is not
material to the combined results of operations of the Company.
(in thousands except per share amounts)
<TABLE>
<S>
Three Months Ended
April 30
(unaudited)
<C> <C>
1999 1998
---- ----
Gross sales $ 8,056 $ 7,152
======= =======
Net income $ 27 $ 117
======= =======
Earnings per basic and
diluted share $ .01 $ .03
======= =======
</TABLE>
8
<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 consummated as of that
time, nor is it intended to be a projection of future results.
4. Segment Information: Travel center operations, which represents 77 percent
of net sales of the Company, and outdoor advertising operations, which
represents 23 percent of net sales, are the Company's reportable segments
under SFAS No. 131, Disclosure about Segments of an Enterprise and Related
Information (SFAS 131). The travel center segment provides for the retail
sale of merchandise, food and gasoline to the traveling public while the
outdoor advertising segment operates billboard advertising displays which
are situated on interstate highways, primarily in the Southwestern United
States. No single customer accounted for as much as 10 percent of
consolidated revenue in any period.
Summarized financial information concerning the Company's reportable
segments as of and for the respective periods ended April 30, are shown in
the following table.
<TABLE>
<S>
<C> <C> <C> <C> <C>
Travel Outdoor
Center Advertising Corporate
(in thousands) Operations Operations and other (1) Total
--------------- --------------- --------------- ---------------
Net sales (2)
1999 $ 6,129 1,838 - 7,967
1998 5,491 1,572 - 7,063
Segment operating
income(3)
1999 $ 275 347 (158) 464
1998 169 388 (137) 420
Depreciation and
amortization
1999 $ 133 412 24 569
1998 141 241 27 409
Segment assets
1999 $ 15,394 18,950 4,846 39,190
1998 13,424 10,103 4,533 28,060
Expenditures for segment
assets (4)
1999 $ 849 1,956 253 3,058
1998 209 2,371 10 2,590
</TABLE>
(1) Corporate functions include certain members of executive
management, the corporate accounting and finance function and
other typical administrative functions.
(2) There were no inter-segment sales during the periods ended April
30, 1999 or 1998.
(3) Management does not allocate interest expense, interest income,
non-operating income and expense amounts or income tax expense in
the determination of the operating performance of the reportable
segments. Therefore, the total segment operating income reported
agrees to consolidated operating income for the Company.
(4) Expenditures for segment assets include assets acquired in
exchange for long-term debt which are reported as non-cash
investing and financing activities in the consolidated statements
of cash flows.
9
<PAGE>
5. Contingency. In November 1998, a fire at the Company's headquarters
destroyed certain buildings and equipment, all of which were covered by
insurance. A balance of $62,000 is included in accounts receivable, other
that represents the net carrying value of the assets destroyed less
proceeds received from insurance through April 30, 1999. The estimated
total proceeds from insurance coverage are expected to exceed the carrying
value of the assets destroyed and management expects to record a gain when
the amount becomes reasonable estimable.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
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, 1999 and 1998. This discussion should be read in conjunction with the
Consolidated Financial Statements of the Company and the related Notes included
in the Company's Form 10-K for the fiscal year ended January 31, 1999.
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 interim 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 from those anticipated in these
forward-looking statements as a result of a number of factors, including but not
limited to those discussed.
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):
10
<PAGE>
<TABLE>
<S>
<C> <C> <C>
% Incr/
1999 1998 (Decr)
---- ---- ------
Travel centers:
Gross sales $ 6,209 $ 5,552 11.8%
Discounts on sales 80 61 31.1%
---------------- ----------------
Net sales 6,129 5,491 11.6%
Cost of sales 4,213 3,856 9.3%
---------------- ----------------
1,916 1,635 17.2%
General and administrative expenses 1,508 1,325 13.8%
Depreciation and amortization 133 141 (5.7%)
---------------- ----------------
Operating income 275 169 62.7%
Outdoor advertising:
Gross sales 1,838 1,572 16.9%
Direct operating expenses 801 692 15.8%
---------------- ----------------
1,037 880 17.8%
General and administrative expenses 278 251 10.8%
Depreciation and amortization 412 241 71.0%
---------------- ----------------
Operating income 347 388 (10.6%)
Corporate and other:
General and administrative expenses (134) (110) 21.8%
Depreciation and amortization (24) (27) (11.1%)
Interest expense (430) (214) 100.9%
Other income, net 28 32 (12.5%)
---------------- ---------------
Income before income taxes 62 238 (73.9%)
Income taxes 26 93 (72.0%)
---------------- ----------------
Net income $ 36 $ 145 (75.2%)
================ ================
EBITDA(1) - Travel centers $ 408 $ 310 31.6%
================ ================
EBITDA - Outdoor advertising $ 759 $ 629 20.7%
================ ================
EBITDA - Total company $ 1,033 $ 829 24.6%
================ ================
EBITDA margin - Travel centers 6.6% 5.6%
================ ================
EBITDA margin - Outdoor advertising 41.3% 40.0%
================ ================
EBITDA margin - Total company 12.8% 11.6%
================ ================
</TABLE>
(1) EBITDA is defined as operating income before depreciation and
amortization. It represents a measure which management believes is
customarily used to evaluate the financial performance of companies in the
media industry. However, EBITDA is not a measure of financial performance
under generally accepted accounting principals and should not be
considered an alternative to operating income or net income as an
indicator of the Company's operating performance or to net cash provided
by operating activities as a measure of its liquidity.
11
<PAGE>
Comparison of the Three Months Ended April 30, 1999 and April 30, 1998
Travel Centers. Gross sales at the Company's Travel Centers increased by 11.8%
to $6.209 million for the three months ended April 30, 1999 from $5.552 million
for the three months ended April 30, 1998. This increase is primarily
attributable to a 28.8% increase in merchandise sales which were $2.139 million
for the three months ended April 30,1999 compared with $1.661 million for the
three months ended April 30,1998. Gasoline sales increased slightly by 2.8% to
$3.057 million for the three months ended April 30, 1999 from $2.973 for the
same period in 1998. Wholesale gasoline sales increased 25.4% to $350,000 for
the three months ended April 30, 1999, as compared to $279,000 for the three
months ended April 30, 1998. In addition, restaurant sales increased 3.8% to
$663,000 for three months ended April 30, 1999 as compared to $639,000 for the
three months ended April 30, 1998. The new travel center located approximately
20 miles west of Albuquerque on interstate 40 contributed gross sales of
$304,000 of which $110,000 were merchandise sales and $194,000 were gasoline
sales.
Cost of goods sold for the travel centers increased 9.3% to $4.213 million for
the three months ended April 30, 1999 from $3.856 million for the three months
ended April 30, 1998. Cost of goods sold as a percentage of gross revenues for
the three months ended April 30, 1999 was 67.9% as compared to 69.5% for the
three months ended April 30, 1998.
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 to $1.508 million for the three months ended April 30, 1999 from
$1.325 million for the three months ended April 30, 1998.
Depreciation and amortization expense decreased 5.7% to $133,000 for the three
months ended April 30, 1999 as compared to $141,000 for the three months ended
April 30, 1998. The decrease is attributable to assets fully depreciated for the
quarter ending April 30, 1999.
The above factors contributed to an overall increase in travel center operating
income of 62.7% to $275,000 for the three months ended April 30,1999 from
$169,000 for the three months ended April 30, 1998. In addition, earnings before
interest, taxes, depreciation and amortization (EBITDA) for travel center
operations increased 31.6% to $408,000 for the three months ended April 30, 1999
from $310,000 for the three months ended April 30, 1998. The EBITDA margin for
travel center operations increased to 6.6% for the three months ended April 30,
1999 as compared to 5.6% for the three months ended April 30, 1998.
Outdoor Advertising. Gross sales from the Company's Outdoor Advertising
increased 16.9% to $1.838 million for the three months ended April 30, 1999 from
$1.572 million for the three months ended April 30, 1998. The increase was
primarily attributable to the Company's acquisitions, increased usage of
available sign inventory, and increases in rates.
Direct operating expenses related to outdoor advertising consist of rental
payments to property owners for the use of land on which advertising displays
are located, production expenses and selling expenses. Selling expenses consist
primarily of salaries and commissions for salespersons and travel related to
sales. Direct operating costs increased 15.8% to $801,000 for the three months
ended April 30, 1999 from $692,000 for the three months ended April 30, 1998.
The increase is principally due to increases in sign rent, sign repairs, cost of
paper production, permits and property taxes, and utilities, most of which are
due to the assimilation of direct operating costs associated with the
acquisitions.
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, as a result of additional personnel, increased 10.8% to
$278,000 for the three months ended April 30, 1999 from $251,000 for the three
months ended April 30, 1998.
12
<PAGE>
Depreciation and amortization expense increased 71.0% to $412,000 for the three
months ended April 30, 1999 from $241,000 for the three months ended April 30,
1998. The increase is attributable to scheduled depreciation of advertising
display structures and machinery and equipment primarily associated with
acquisitions as well as the amortization of goodwill and non-compete covenants.
The above factors contributed to the decrease in outdoor advertising operating
income of 10.6% to $347,000 for the three months ended April 30, 1999 from
$388,000 for the three months ended April 30, 1998. Earnings before interest,
taxes, depreciation and amortization (EBITDA) for outdoor advertising increased
20.7% to $759,000 for the three months ended April 30, 1999 from $629,000 for
the three months ended April 30, 1998. The EBITDA margin for outdoor advertising
increased to 41.3% for the three months ended April 30, 1999 as compared to
40.0% for the three months ended April 30, 1998.
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 21.8% to $134,000 for the three
months ended April 30, 1999 from $110,000 for the three months ended April 30,
1998.
Depreciation and amortization expenses for the Company's corporate and other
operations consist of depreciation associated with the corporate headquarters,
furniture and fixtures and vehicles. Depreciation and amortization expenses
decreased slightly to $24,000 for the three months ended April 30, 1999 as
compared to $27,000 for the three months ended April 30, 1998.
Interest expense increased by 100.9% to $430,000 for the three months ended
April 30, 1999 as compared to $214,000 for the three months ended April 30,
1998. The increase is primarily attributable to the increase in debt associated
with the Company's acquisitions and the new travel center that opened in
February 1999.
Non-operating income, net, primarily includes gains and/or losses from the sales
of assets, and interest income. Non-operating income, net, decreased 12.5% to
$28,000 for the three months ended April 30, 1999 as compared to $32,000 for the
three months ended April 30, 1998. Changes in non-operating income are not
material to the period.
Income before taxes decreased 73.9% to $62,000 for the three months ended April
30, 1999 as compared to $238,000 for the three months ended April 30, 1998. As a
percentage of gross revenues, income before taxes decreased to 0.8% for the
three months ended April 30, 1999 as compared to 3.3% for the three months ended
April 30, 1998.
Income taxes were $26,000 for the three months ended April 30, 1999 as compared
to $93,000 for the three months ended April 30, 1998, as the result of lower
pretax income.
The foregoing factors contributed to the Company's decrease in net income for
the three months ended April 30, 1999 to $36,000 as compared to $145,000 for the
three months ended April 30, 1998.
Liquidity and Capital Resources
At April 30, 1999, the Company had working capital of $4.404 million and a
current ratio of 2.3:1, compared to working capital of $5.495 million and a
current ratio of 2.7:1 at January 31, 1999. Net cash provided by operating
activities was $757,000 for the three months ended April 30, 1999 as compared to
$190,000 for the three months ended April 30, 1998. Net cash provided in the
current quarter is primarily attributable to increased depreciation and
amortization from acquisitions.
13
<PAGE>
Net cash used in investing activities for the three months ended April 30, 1999
was $2.819 million, of which $1.560 million was used for purchases of property
and equipment and $1.516 was used for acquisitions. For the three months ended
April 30, 1998, net cash used for investing activities was $2.900 million, of
which $365,000 was used for purchases of property and equipment and $2.565
million was used for acquisitions.
Net cash provided by financing activities for the three months ended April 30,
1999 was $1.665 million as compared to $1.935 million for the three months ended
April 30, 1998. At April 30, 1999 and 1998 financing activities were a result of
borrowings and payments on debt.
Although the Company does not have any agreements in place, it will continue
discussions with acquisition candidates. 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. The Company would likely finance any such
acquisitions with cash, additional indebtedness, or a combination of the two.
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The principal market risks to which the Company is exposed to are interest rates
on the Company's debt. The Company's interest sensitive liabilities are its debt
instruments. Variable interest on short-term debt equals LIBOR plus the
applicable margin. Long-term debt bears interest at variable rates based
primarily on the prime rate. Because the prime rate and LIBOR may increase or
decrease at any time, the Company is exposed to market risk as a result of the
impact that changes in these base rates may have on the interest rate applicable
to borrowings. Increases (decreases) in the interest rates applicable to
borrowings would result in increased (decreased) interest expense and a
reduction (increase) in the company's net income. Management does not, however,
believe that any risk inherent in the variable rate nature of its debt is likely
to have a material effect on the Company's financial position, results of
operations or liquidity.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities and Use of Proceeds. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submissions 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
----------- ------------
2.10 Purchase Agreement dated April 30, 1999
between the Registrant and Borderline
Outdoor Advertising, Inc.
27 Financial Data Schedule
(b). No reports were filed on Form 8-K during the three months ended April
30, 1999.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 11, 1999
BOWLIN
Outdoor Advertising & Travel Centers Incorporated
/s/ Michael L. Bowlin
----------------------
Michael L. Bowlin, Chairman of the Board,
President and Chief Executive Officer
/s/ Nina J. Pratz
----------------------
Nina J. Pratz, Chief Financial Officer
(Principal Financial and Accounting Officer)
15
<PAGE>
PURCHASE AGREEMENT
THIS AGREEMENT is hereby made this, April 30, 1999 by and between Borderline
Outdoor Advertising, Inc., a Texas corporation, ("Company" or "SELLER"), and
Bowlin Outdoor Advertising & Travel Centers Incorporated, a Nevada corporation
("BOWLIN").
Purpose of Agreement
BOWLIN desires to purchase and SELLER desires to sell certain tangible and
intangible assets described on Schedule A that comprise SELLER's billboard
business known as "Borderline Outdoor Advertising " Therefore, in consideration
of the premises and of the mutual representations, warranties and covenants
herein contained, the parties hereby agree as follows:
Terms and Conditions
Purchase Price
The purchase price shall be One Hundred Fifty Thousand and No/100 Dollars
($150,000.00) paid in the following manner:
(a) $150,000.00 cash at closing;
In addition to the amount specified above, at closing an adjustment of the
purchase price listed above shall be made for:
(a) an amount equal to the amount of any prepaid rents, leases,
permits and taxes as specified in attached Exhibit E and incorporated
for all purposes herein. This amount will be paid by BOWLIN to SELLER,
but will be reduced by the amount of any prepaid advertising rents
received by SELLER and further reduced by BOWLIN's prorated share
(prorated by day as of Closing date) of the current month's revenue
billed in advance by SELLER.
(b) an additional $12,500.00 for the purchase of a 12 x 24 unipole
structure that is located in storage and a 10 x 30 structure removed
from the Cresson site, also in storage.
The purchase price, and payments noted above, shall be the sole considerations
paid by BOWLIN under this agreement.
<PAGE>
Date of Closing
The parties contemplate that Closing shall take place on April 30, 1999. If
Closing does not occur by that date, it will occur as soon thereafter as BOWLIN
is able to complete its due diligence investigation. The parties agree that
BOWLIN's obligation to complete this purchase is contingent upon BOWLIN being
satisfied, in its sole discretion, that all representations made to it
concerning SELLER's assets are true; that the financial condition, books, and
accounts of SELLER are sound; that the land leases, outdoor advertising permits
and advertising contracts are of satisfactory condition to BOWLIN; and that the
value of the assets being transferred is not less than the purchase price.
Transfer of Assets
At closing, SELLER will sell, transfer, assign, convey and deliver to BOWLIN
free and clear of any liens, debts, or encumbrances, save and except any liens
or encumbrances affecting the underlying fee title estate on the real property
subject of the land leases and/or easements for the sign sites, and BOWLIN will
purchase, accept and acquire from SELLER all of the Assets listed in Exhibit A
attached hereto and incorporated for all purposes herein. Within 60 days from
Closing, BOWLIN will pickup the structures in storage with Bob Sandlin, 9252
Canter Dr., Dallas, Texas 75231. SELLER will be responsible for any storage
charges prior to Closing and for up to 60 days thereafter.
Instruments of Transfer
(a) SELLER Deliveries. At the closing, SELLER shall deliver to BOWLIN:
i. A bill of sale transferring to BOWLIN title to the Assets as
provided herein, in form and substance acceptable to BOWLIN and
SELLER;
ii. Form(s) from SELLER to the Texas Department of Transportation to
effect transfer of the outdoor advertising permits from SELLER to
BOWLIN.
iii. Assignment of land lease agreements and/or easements pertinent to
sign sites located on property owned by third parties (See
attached Exhibit G);
iv. Such other bills of sale, titles and other instruments of
assignment, transfer and conveyance as BOWLIN shall reasonably
request, in recordable form, where appropriate, and properly
executed, evidenced and notarized where appropriate in such form
as shall be necessary or appropriate to vest in BOWLIN good title
to the Assets.
v. Advertising contracts for all current advertisers.
vi. A corporate resolution.
(b) BOWLIN's Deliveries. At the closing, BOWLIN shall deliver to SELLER:
i. Immediately available funds to one or more accounts designed by
SELLER for the purchase price as specified herein;
ii. Checks in an amount sufficient to pay the net amount due for
items listed in Exhibit E.
(c) Other Transfer Instruments. Following the Closing, at the request of
BOWLIN, SELLER shall deliver any further Instruments and take all
reasonable action as may be necessary or appropriate to vest in BOWLIN
all of SELLER's title to the assets.
<PAGE>
Assumption of Liabilities
It is expressly understood and agreed by the parties hereto that
except as is otherwise provided herein to the contrary, BOWLIN assumes
no debts, liabilities (including tax liabilities) or obligations
(contractual or otherwise) of SELLER or any other debts, liabilities
or obligations related to the conduct of SELLER's business arising
prior to Closing. BOWLIN shall assume SELLER's obligations pursuant to
the advertising contracts, land leases, easements, outdoor advertising
permits and any other of SELLER's assets purchased by BOWLIN that
accrue after the Closing so long as such accrual was not as a result
of a default thereunder by SELLER for which SELLER will continue to be
responsible. BOWLIN agrees to hold harmless and indemnify SELLER from
any actions brought as a result of an breach by BOWLIN of the
obligations assumed pursuant to the previous sentence.
Representations and Warranties
SELLER represents and warrants to BOWLIN as of the date hereof and on
the closing date as follows (all representations and warranties being
joint and several):
(a) Authority. SELLER has the legal authority to sell, transfer,
and deliver to BOWLIN the tangible and intangible assets of
the SELLER's outdoor advertising business.
(b) Title. SELLER has good and indefeasible title to all
properties, assets and leasehold estates, real and personal,
tangible and intangible, to be transferred pursuant to this
Agreement subject to no mortgage, pledge, lien, conditional
sales agreement, encumbrance or charge except for mortgages,
liens or encumbrances on the real property fee simple
estates of the ground lessors and liens to be released at
Closing.
(c) Insurance. SELLER carries insurance, which it believes to be
adequate in character and amount, with reputable insurers in
respect of assets being acquired and such insurance policies
are still in full force and effect, and shall be in effect
without interruption until closing has occurred.
<PAGE>
(d) Violations, Suits, Claims, etc. To the best of SELLER's
actual knowledge, SELLER is not in default under any law or
regulation, or under any order of any court or federal,
state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality
wherever located, and to SELLER's actual knowledge and
belief there are (1) no claims, actions, suits or
proceedings instituted or filed and (2) no claims actions,
suits or proceedings threatened presently or which in the
future may be threatened or asserted against or affecting
SELLER at law or in equity, or before or by any federal,
state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality
wherever located, and (3) there are no potential claims,
demands, liens, encumbrances, or debts with regard to the
assets that are the subject of this sale or that may create
for BOWLIN any environmental or regulatory liability, except
as have been previously disclosed to BOWLIN.
(e) Tax Returns. SELLER has filed or will file all requisite
federal, state and other tax returns due for all fiscal
periods ended on or before the date of this agreement. There
are no claims against SELLER for federal, state or other
taxes for any period or periods to and including the date of
this agreement.
(f) Authorizations and Enforceability. SELLER has all requisite
power and authority to execute, deliver and perform this
Agreement and the other agreements and instruments delivered
pursuant hereto and to consummate the transactions
contemplated hereby. This Agreement and the other agreements
and instruments delivered pursuant hereto have been duly and
validly authorized, executed and delivered by SELLER and
constitutes the valid and binding obligations of SELLER,
fully enforceable in accordance with their terms.
(g) Effect of Agreement. To the best of SELLER's actual
knowledge, the execution, delivery and performance of this
Agreement by SELLER and the consummation of the transactions
contemplated hereby will not, with or without the giving of
notice or the lapse of time, or both: (a) violate any
material provision of law, statute, rule or regulation to
which SELLER is subject; (b) violate any judgment, order,
writ or decree of any court, arbitrator or governmental
agency applicable to SELLER; or (c) result in a material
breach of or material conflict with any term, covenant,
condition or provision of, result in the modification or
termination of, constitute a material default under, or
result in the creation or imposition of, any lien, security
interest, charge or encumbrance upon any of the Assets
pursuant to any charter, bylaw, commitment, contract or
other agreement or instrument, to which SELLER is a party or
by which any of its Assets is bound.
(h) Permits, Licenses, Compliance with Applicable Laws and Court
Orders. SELLER has all requisite power and authority, and
all permits, licenses and approvals of governmental and
administrative authorities, to own, lease and operate its
properties and to carry on its business as presently
conducted; all such permits, licenses and approvals material
to the conduct of the business of SELLER are in full force
and effect. To the best of SELLER's actual knowledge,
SELLER's conduct of its business does not materially violate
or infringe any applicable law, statute, ordinance or
regulation. To the best of SELLER's actual knowledge, SELLER
is not in default in any respect under any executive,
legislative, judicial, administrative or private (such as
arbitration) ruling, order, writ, injunction or decree.
<PAGE>
(i) Financial Information. All financial information relating to
the Assets or the business and provided to BOWLIN by SELLER
have been prepared from the books and records of SELLER and
fairly and accurately present the financial condition of
SELLER and the business relating to the Assets as of the
date of such information.
(j) Agreements, Plans, Arrangements, etc. Except as set forth in
Exhibit A, none of the Assets are bound or affected by, any
oral or written:
(1) lease agreement (whether as lessor or lessee) relating
to real or personal property;
(2) license agreement, assignment or other contract
(whether as licensor or licensee, assignor or assignee)
relating to trademarks, trade names, patents,
copyrights (or applications therefor);
(3) agreement with any business broker with respect to this
transaction;
(4) agreement with any supplier, distributor, franchisor,
dealer, sales agent or representative;
(5) joint venture or partnership agreement with any other
person;
(6) agreement with any bank, factor, finance company or
similar organization regarding the financing of
accounts receivable or other extensions of credit;
(7) agreement granting any lien, security interest or
mortgage on any Asset or other property of SELLER,
including, without limitation, any factoring agreement
for the assignment of accounts receivable, other then
encumbrances that will be released at Closing;
(8) agreement for the Construction or modification of any
Asset or leasehold interest of SELLER;
(9) agreement with any employee, consultant, or independent
contractor providing personal services to SELLER.
(k) Acquisition Agreements. There are no agreements relating to
the acquisition of the business or Assets of SELLER to which
SELLER is presently a party, other than this Agreement.
<PAGE>
(l) Status of Real Property. SELLER has not received any notice
of noncompliance with respect to real property on which any
of the Assets are located (the "Real Property") with any
applicable statutes, laws, codes, ordinances, regulations or
requirements relating to fire, safety, health or
environmental matters or noncompliance with any covenants,
conditions and restrictions (whether or not of record) or
local, municipal, regional, state or federal requirements or
regulations. To the best of SELLER's actual knowledge, there
has been no release or discharge on or under the Real
Property by SELLER of any toxic or hazardous substance,
material or waste which is or has been regulated by any
governmental or quasi-governmental authority or is or has
been listed as toxic or hazardous under any applicable
local, state or federal law. To the best of the SELLER's
actual knowledge, there are no subsurface or other
conditions related to toxic or hazardous waste affecting the
Real Property or any portion or component thereof, and there
are no underground storage tanks located on the Real
Property.
(m) Defects. To the best of SELLER's actual knowledge, there are
no structural or operational defects in any of the Assets.
SELLER acknowledges that to the best of SELLER's actual
knowledge all signs were constructed and installed to normal
industry standards by qualified and licensed manufacturers
and installers.
(n) Leases Current. All obligations of the SELLER under all
existing lease agreements which are required by such
agreements to have been performed by SELLER have been
fulfilled by the SELLER, including the payment by the SELLER
of all lease payments due and payable through the date
hereof.
(O) Permits Current. All payments due and payable for required
permits from governmental bodies have through the date
hereof been fulfilled by the SELLER.
BOWLIN represents and warrants to SELLER as of the date hereof and the Closing
date as follows:
(a) Organization. BOWLIN is a validly existing corporation
organized under the laws of the State of Nevada and has all
requisite corporate power and authority to own, operate and
lease its properties and assets.
(b) Authority. BOWLIN has full corporate power, authority and
legal rights to execute and deliver, and to perform its
obligations under this Agreement, and has taken all
necessary action to authorize the purchase hereunder on the
terms and conditions of this Agreement and to authorize the
execution, delivery and performance of this Agreement. This
Agreement has been duly executed by BOWLIN, and constitutes
a legal, valid and binding obligation of BOWLIN enforceable
in accordance with its terms.
<PAGE>
(c) Compliance with Instruments, Consents, Adverse Agreements.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will
conflict with or result in any violation of or constitute a
default under the articles of incorporation or the by-laws
of BOWLIN, or any Law, Instrument, lien or other Contract by
which BOWLIN is bound. BOWLIN is not a party or subject to
any Contract, or subject to any article or other corporate
restriction or any Law which materially and adversely affect
the business operation, prospects, properties, assets or
condition, financial or otherwise, of BOWLIN.
(d) Litigation. There is no suit, action or litigation,
administrative, arbitration, or other proceeding or
governmental investigation pending or, to the knowledge of
BOWLIN, threatened which might, severally or in the
aggregate materially and adversely affect the financial
condition or prospects of BOWLIN or BOWLIN's ability to
acquire the Assets as contemplated by this Agreement.
(e) Brokers. All negotiations relative to the Agreement and the
transactions contemplated hereby have been carried on by
BOWLIN in such a manner as not to give rise to any valid
claim against SELLER for a finder's fee, brokerage
commission or other like payment.
Conditions to Bowlin's Obligations
The obligations of BOWLIN hereunder are subject to the
fulfillment, at or prior to the Closing, of each of the following
conditions, any or all of which may be waived in writing by
BOWLIN, in its sole discretion:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties of SELLER contained in this
Agreement shall be true on and as of the Closing Date with
the same force and effect as though made on and as of the
Closing Date, except as affected by transactions
contemplated hereby.
(b) Performance of Covenants. SELLER shall have performed and
complied with all covenants, obligations and agreements to
be performed or complied with by it on or before the Closing
Date pursuant to this Agreement.
(c) No Litigation or Claims. No claim, action, suit, proceeding,
arbitration, investigation or hearing or notice of hearing
shall be pending or threatened against or affecting SELLER
which: (a) might foreseeably result, or has resulted, either
in an action to enjoin or prevent or delay the consummation
of the transactions contemplated by this Agreement or in
such an injunction; or (b) could, in the determination of
BOWLIN, have an adverse effect on the assets to be
transferred hereunder.
(d) No Violations. No material violation of SELLER shall exist,
or be alleged by any governmental authority to exist, of any
law, statute, ordinance or regulation, the enforcement of
which would adversely affect the financial condition,
results of operations, properties or business of SELLER.
<PAGE>
(e) Consents and Assignments. SELLER shall have delivered to
BOWLIN all consents and assignments of all persons and
entities necessary for the performance of the transactions
contemplated by this Agreement, including the transfer of
all assets and the assignment of leases, and SELLER shall
have obtained the consents of: any lender to SELLER, or, in
the alternative, the release of all liens held by such
lender, with respect to the sale and transfer of the assets;
and any other consents of third parties deemed necessary or
appropriate by BOWLIN.
(f) Satisfactory Completion of Due Diligence. BOWLIN shall be
satisfied in its sole discretion with the content of the
final Exhibits hereto and other related documents for
closing and shall otherwise be satisfied in its sole
discretion with the results of its due diligence review,
including the right to terminate this agreement with no
penalty in the event that the land leases, outdoor
advertising permits and advertising contracts are not of
satisfactory condition to BOWLIN.
Indemnification
(a) Indemnification Obligations of SELLER. SELLER shall defend,
indemnify, save and keep harmless BOWLIN and its successors
and permitted assigns against and from any liability, loss,
cost, damage, claim, fine, penalty or expense, including,
without limitation, reasonable attorneys' fee ("Damages"),
sustained or incurred by any of them resulting from or
arising out of or by virtue of : (a) any material inaccuracy
in or material breach of any representation and warranty
made by SELLER in the Agreement or in any closing document
delivered to BOWLIN in connection with this Agreement;
and/or (b) any breach of contract on or prior to the Closing
arising out of SELLER's ownership of the Assets; and/or (c)
any personal injury and/or property damage from any accident
occurring on or before the Closing arising out of SELLER's
ownership of the billboards.
<PAGE>
(b) Indemnification Obligations of BOWLIN. BOWLIN shall defend,
indemnify, save and keep harmless SELLER and its successors
and permitted assigns against and from all Damages (as
defined in subparagraph (a) immediately preceding) sustained
or incurred by any of them resulting from or arising out of
or by virtue of: (a) any material inaccuracy in or breach of
any representation and warranty made by BOWLIN in this
Agreement or in any closing document delivered to SELLER in
connection with this Agreement; and/or (b) BOWLIN's failure
to pay, discharge and perform any of the liabilities assumed
in this Agreement; and/or (c) any breach of contract arising
out of BOWLIN's ownership of the Assets from and after the
Closing, and/or (d) any personal injury and/or property
damage arising out of any accident occurring from and after
the Closing. BOWLIN'S INDEMNIFICATION OBLIGATIONS UNDER THIS
SUBPARAGRAPH SHALL INCLUDE DAMAGES WHICH ARISE FROM THE SOLE
OR CONCURRENT NEGLIGENCE OR FAULT OF SELLER OR EMPLOYEES OR
INDEPENDENT CONTRACTORS DIRECTLY RESPONSIBLE TO SELLER,
ARISING OUT OF, INCIDENT TO, OR IN ANY WAY CONNECTED OR
RELATED TO THE ORIGINAL CONSTRUCTION, USE, CONDITION,
LOCATION, MAINTENANCE, REPAIR OR OPERATION OF THE
BILLBOARDS. IT IS THE EXPRESSED INTENTION OF THE PARTIES
HERETO, BOTH SELLER AND BOWLIN, THAT THE INDEMNITY PROVIDED
FOR IN THIS PARAGRAPH IS AN INDEMNITY BY BOWLIN TO INDEMNIFY
AND PROTECT SELLER FROM THE CONSEQUENCES OF SELLERS OWN
NEGLIGENCE, WHETHER THAT NEGLIGENCE IS THE SOLE OR A
CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE.
Taxes
Real Estate and personal property taxes, if any, assessed or to be
assessed for the current calendar or fiscal year, regardless of
when payable, shall be prorated between BOWLIN and SELLER as of
the closing date.
Risk of Loss
The risk of loss or destruction of or damage to the assets
transferred hereunder, including inventory, fixtures, equipment
and real property from any cause whatsoever at all times on or
subsequent to the execution of this document but before closing
shall be borne by SELLER.
Dispute Resolution
(a) In the event of any dispute arising from this Agreement, the
Parties agree to attempt a solution through nonbinding
mediation conducted by a mutually agreed mediator. While the
mediation shall be nonbinding in all respects (except
agreements in settlement of the dispute negotiated by the
Parties), each Party agrees that:
(i) it shall appear when directed by the mediator, be fully
prepared to work towards a resolution of the dispute,
and participate in good faith in the mediation towards
a resolution of all disputed issues or concerns; and
(ii) the duty to mediate in good faith shall be specifically
enforceable by the courts of Texas.
(b) Any questions, claims, disputes, or litigation arising from
or related to this Agreement are governed by the laws of the
state of Texas without regard to the principles of conflicts
of law.
<PAGE>
(c) The Parties agree that Texas has a substantial relationship
to this transaction, and that this Agreement is performable
in Tarrant County, Texas. Each Party consents to personal
jurisdiction in the courts thereof, and any action or suit
arising from or related to this Agreement shall only be
brought by the Parties in any federal or state court with
appropriate jurisdiction over the subject matter established
or sitting in the state of Texas located in Tarrant County,
Texas.
Miscellaneous
(a) Expenses. Except as otherwise provided herein, whether or
not the transactions contemplated by this Agreement are
consummated, each party hereto shall pay its own expenses
and the fees and expenses of its counsel and accountants and
other experts. Furthermore, BOWLIN shall be responsible for
payment to the business broker retained by it.
(b) Survival of Representations and Warranties. The
representations, warranties, covenants and agreements set
forth in this Agreement and any other written representation
in any ancillary document shall survive the Closing.
(c) Waivers. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
(d) Binding Effect; Benefits. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and
their respective successors and assigns.
(e) Notices. All notices, requests, demands and other
communications which are required to be or may be given
under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered in person or
transmitted by fax or five (5) days after deposit in the
U.S. mails by certified or registered first class mail,
postage prepaid, return receipt requested, addressed to the
party to whom the same is so given or made.
if to SELLER to:
Robert Hill
2700 Tibbets Dr., Suite 500
Bedford, Texas 76022
if to BOWLIN to:
BOWLIN Outdoor Advertising and Travel Centers Incorporated
150 Louisiana Blvd. N.E.
Albuquerque, New Mexico 87108
Attention: Michael L. Bowlin, President
or to such other address or Fax Number as any party may
designate by giving notice to the other parties hereto.
<PAGE>
(f) Further Assurances. The Company shall, from time to time at
or after the Closing, at the request of BOWLIN, and without
further consideration, execute and deliver such other
instruments and take such other actions as may be reasonably
required to confer to BOWLIN and its assignees the benefits
contemplated by this Agreement.
(g) Entire Agreement. This document contains the entire
agreement between the parties and supersedes all prior
agreements between the parties, if any, written or oral,
with respect to the subject matter thereof.
AGREED and ACCEPTED:
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
By:________________________________________
Michael L. Bowlin, CEO/President/Chairman
BORDERLINE OUTDOOR ADVERTISING, INC.
By:______________________________________
Robert Hill, President
<PAGE>
Acknowledgment for Corporations
STATE OF NEW MEXICO )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ___ day of
__________________, 199___, by Michael L. Bowlin, CEO/President/Chairman of
BOWLIN Outdoor Advertising & Travel Centers Incorporated, a Nevada Corporation,
on behalf of the corporation.
--------------------------------
Notary Public
My commission expires:
- ----------------------
STATE OF TEXAS )
) ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ___ day of
___________________, 199__ by Robert Hill, President of Borderline Outdoor
Advertising, a Texas Corporation, on behalf of the corporation.
--------------------------------
Notary Public
My commission expires:
- ----------------------
<PAGE>
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<ALLOWANCES> 29200
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