BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
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, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE 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 No.)
of 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 14, 2000, 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, 2000 and January 31, 2000..........................2
Consolidated Statements of Income
for the Three Months Ended
April 30, 2000 and 1999......................................4
Consolidated Statement of Stockholders'
Equity for the Three Months Ended April 30, 2000.............5
Consolidated Statements of Cash Flows for the
Three Months Ended April 30, 2000 and 1999...................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.................................................15
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 ...........................16
Signatures .................................................16
1
<PAGE>
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,
2000 2000
(Unaudited)
-------------------- --------------------
Current assets:
Cash and cash equivalents $ 2,127 $ 1,559
Accounts receivable, Outdoor Advertising, net 656 595
Accounts receivable, other 535 559
Accounts receivable, related parties 146 122
Inventories 3,602 3,534
Prepaid expenses and other current assets 704 693
Income taxes 875 849
Notes receivable, related parties 14 14
-------------------- --------------------
Total current assets 8,659 7,925
Property & equipment, net 30,544 30,556
Intangible assets, net 1,946 2,024
Other assets 269 276
-------------------- --------------------
Total assets $ 41,418 $ 40,781
==================== ====================
(Continued)
</TABLE>
2
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
Liabilities and Stockholders' Equity
(In thousands, except share data)
<TABLE>
<S>
<C> <C>
April 30, January 31,
2000 2000
(Unaudited)
-------------------- ---------------------
Current liabilities:
Short-term borrowings, bank $ 707 $ 242
Accounts payable 1,819 1,417
Current installments of long-term debt 1,557 1,503
Accrued liabilities 480 455
Deferred income 200 142
-------------------- ---------------------
Total current liabilities 4,763 3,759
Deferred income taxes 938 898
Long-term debt, less current installments 20,475 20,886
-------------------- ---------------------
Total liabilities 26,176 25,543
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 3,634 3,630
-------------------- ---------------------
Total stockholders' equity 15,242 15,238
-------------------- ---------------------
Total liabilities and stockholders' equity $ 41,418 $ 40,781
==================== =====================
</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> <C> <C>
For the Three Months Ended
------------------------------------------------------
April 30, April 30,
2000 1999
(Unaudited) (Unaudited)
------------------ -------------------
Gross sales $ 8,823 $ 8,047
Less discounts on sales 91 80
------------------ -------------------
Net sales 8,732 7,967
Cost of goods sold 5,775 5,014
------------------ -------------------
Gross profit 2,957 2,953
General and administrative expenses (1,866) (1,920)
Depreciation and amortization (672) (569)
------------------ -------------------
Operating income 419 464
Non-operating income (expense):
Interest income 21 23
Gain on sale of property and equipment 95 5
Interest expense (517) (430)
------------------ -------------------
Total non-operating income (expense) (401) (402)
------------------ -------------------
Income before income taxes 18 62
Income taxes 14 26
------------------ -------------------
Net income $ 4 $ 36
================== ===================
Weighted average common shares 4,384,848 4,384,848
Weighted average common shares and potential
dilutive common shares 4,433,555 4,384,848
Earnings per share
Basic $ .00 $ .01
================== ==================
Diluted $ .00 $ .01
================== ==================
</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>
<C> <C> <C> <C> <C>
For the Three Months Ended April 30, 2000
(Unaudited)
------------------------------------------------------------------------------------
Common Additional
Number stock, paid-in Retained
of shares at par capital earnings Total
------------------------------------------------------------------------------------
Balance at January 31, 2000 4,384,848 $ 4 $ 11,604 $ 3,630 $ 15,238
Net income (unaudited) 4 4
------------------------------------------------------------------------------------
Balance at April 30, 2000 4,384,848 $ 4 $ 11,604 $ 3,634 $ 15,242
====================================================================================
</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,
2000 1999
(Unaudited) (Unaudited)
----------------- ---------------
Cash flows from operating activities:
Net income $ 4 $ 36
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 672 569
Amortization of loan fees 45 32
Provision for bad debts 50 9
Gain on sales of property and equipment (95) (5)
Deferred income taxes 40 61
Imputed interest 2 3
Deferred income 58 (17)
Changes in operating assets and liabilities, net 224 69
----------------- ---------------
Net cash provided by operating activities 1,000 757
Cash flows from investing activities:
Proceeds from sale of assets 132 19
Business acquisitions - (1,516)
Purchases of property and equipment, net (664) (1,560)
Proceeds from insurance - 236
Proceeds from notes receivable, net (6) 2
----------------- --------------
Net cash used in investing activities (538) (2,819)
Cash flows from financing activities:
Short-term borrowings, bank, net 465 277
Borrowings on long-term debt - 1,750
Payments on long-term debt (359) (362)
----------------- ---------------
Net cash provided by financing activities 106 1,665
Net increase (decrease) in cash and cash equivalents 568 (397)
Cash and cash equivalents at beginning of period 1,559 2,199
----------------- ---------------
Cash and cash equivalents at end of period $ 2,127 $ 1,802
================= ===============
(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,
2000 1999
(Unaudited) (Unaudited)
----------------- -----------------
Supplemental disclosure of cash flow information:
Acquisitions:
Fair value of assets acquired and liabilities assumed
at the date of the acquisitions were as follows:
Prepaid expenses $ - $ 3
Billboards - 1,463
Covenants not to compete - 50
================= =================
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. The consolidated financial statements for the three months ended April 30,
2000 and 1999 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, 2000. Results of
operations for interim periods are not necessarily indicative of results
that may be expected for the year as a whole.
2. Earnings per Share. The following table is a reconciliation of the
numerators and denominators of the basic and diluted per share computations
for income from continuing operations.
<TABLE>
<S>
<C> <C> <C> <C> <C> <C>
Three months ended April 30,
---------------------------------------------------------------------------------
2000 1999
-------------------------------------- ----------------------------------------
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
Basic EPS - net income $ 4,000 4,384,848 $ 0.00 $ 36,000 4,384,848 $ 0.01
---------- -----------
Effect of Dilutive Securities
Stock options 48,707 -
------------ -------------- -------------- -------------
Diluted EPS - net income $ 4,000 4,433,555 $ 0.00 $ 36,000 4,384,848 $ 0.01
============ ============== ========== ============== ============= ===========
</TABLE>
8
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
3. Segment Information: Travel center operations, which represents 76 percent
of net sales of the Company, and outdoor advertising operations, which
represents 24 percent of net sales, are the Company's reportable segments
under SFAS No. 131, Disclosure about Segments of an Enterprise and Related
Information. 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 10 percent of consolidated net
sales in any period.
Effective February 1, 2000, the Company measures its segments' results of
operations (segment profit) based on operating income less allocable
interest expense. Accordingly, segment profit for all periods presented has
been retroactively restated to conform to the new presentation. The
accounting policies used to measure segment results of operations are the
same as those described in note 1 to the consolidated financial statements
included in Form 10-K for the year ended January 31, 2000.
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 Corporate Total
Center Advertising and other (1)
(in thousands) Operations Operations
Three months -------------- --------------- --------------- ---------------
ended April 30,
Net sales (2)
2000 $ 6,675 2,057 - 8,732
1999 6,129 1,838 - 7,967
Segment profit (3)
(Income before
income taxes)
2000 $ 137 (40) (79) 18
1999 153 60 (151) 62
</TABLE>
(1) Corporate and other results of operations include costs associated
with certain members of executive management, the corporate accounting
and finance function and other typical administrative functions not
considered in assessing segment profit.
(2) There were no inter-segment sales.
(3) Management does not consider interest income, non-operating income and
expense amounts or income tax expense in the determination of the
operating performance of the reportable segments. However, the amount
reported for Corporate and other includes interest income and
non-operating income and expense. The total segment profit agrees to
income before income taxes in the consolidated statements of income.
9
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Certain statements contained herein with respect to factors which may affect
future earnings, including management's beliefs and assumptions based on
information currently available, are forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements that are not historical facts involve
risks and uncertainties, and results could vary materially from the descriptions
contained herein.
Overview
The following is a discussion of the consolidated financial condition and
results of operations of the Company as of and for the periods ended April 30,
2000 and 1999. 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, 2000.
The Company operates in two industry segments, outdoor advertising and travel
centers. 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 management does not allocate 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.
10
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
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):
<TABLE>
<S>
<C> <C> <C>
Three Months Ended
2000 1999
---- ----
Travel centers:
Gross sales $ 6,766 $ 6,209
Discounts on sales 91 80
----------- ------------
Net sales 6,675 6,129
Cost of sales 4,810 4,213
----------- ------------
1,865 1,916
General and administrative expenses 1,450 1,508
Depreciation and amortization 148 133
----------- ------------
Operating income 267 275
Interest expense 130 122
----------- ------------
Segment profit 137 153
Outdoor advertising:
Gross sales 2,057 1,838
Direct operating expenses 965 801
----------- ------------
1,092 1,037
General and administrative expenses 279 278
Depreciation and amortization 490 412
----------- ------------
Operating income 323 347
Interest expense 363 287
----------- ------------
Segment profit (40) 60
Corporate and other:
General and administrative expenses (137) (134)
Depreciation and amortization (34) (24)
Interest expense (24) (21)
Other income, net 116 28
----------- ------------
Income before income taxes 18 62
Income taxes 14 26
----------- ------------
Net income $ 4 $ 36
=========== ============
(Continued)
</TABLE>
11
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
<TABLE>
<S>
<C> <C> <C>
Three Months Ended
2000 1999
---- ----
EBITDA(1) - Travel centers $ 415 $ 408
=========== ============
EBITDA - Outdoor advertising $ 813 $ 759
=========== ============
EBITDA - Total company $ 1,091 $ 1,033
=========== ============
EBITDA margin - Travel centers 6.1% 6.6%
=========== ============
EBITDA margin - Outdoor advertising 39.5% 41.3%
=========== ============
EBITDA margin - Total company 12.4% 12.8%
=========== ============
</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.
Comparison of the Three Months Ended April 30, 2000 and April 30, 1999
Outdoor Advertising. Gross sales from the Company's outdoor advertising
increased 11.9% to $2.057 million for the three months ended April 30, 2000,
from $1.838 million for the three months ended April 30, 1999. The increase was
primarily attributable to the continual assimilation of the Company's
acquisitions, internal development, 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 20.5% to $965,000 for the three months
ended April 30, 2000, from $801,000 for the three months ended April 30, 1999.
The increase is principally due to increases in salaries, sign repairs, cost of
production and utilities. Direct operating expenses as a percentage of gross
revenues for the three months ended April 30, 2000 was 46.9% compared to 43.6%
for the three months ended April 30, 1999.
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 were $279,000 for the three months ended April 30, 2000,
compared to $278,000 for the three months ended April 30, 1999.
Depreciation and amortization expense increased 18.9% to $490,000 for the three
months ended April 30, 2000, from $412,000 for the three months ended April 30,
1999. The increase is attributable to scheduled depreciation of advertising
display structures as well as the amortization of goodwill and non-compete
covenants.
12
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
The above factors contributed to the decrease in outdoor advertising operating
income of 6.9% to $323,000 for the three months ended April 30, 2000, from
$347,000 for the three months ended April 30, 1999.
Interest expense increased 26.5% to $363,000 for the three months ended April
30, 2000, from $287,000 for the three months ended April 30, 1999 due to
additional borrowings to fund acquisitions and internal development.
Segment profit decreased 166.7% to ($40,000) for the three months ended April
30, 2000, from $60,000 for the three months ended April 30, 1999 primarily as a
result of increases in depreciation and amortization, and interest expense.
EBITDA for outdoor advertising increased 7.1% to $813,000 for the three months
ended April 30, 2000, from $759,000 for the three months ended April 30, 1999.
The EBITDA margin for outdoor advertising decreased to 39.5% for the three
months ended April 30, 2000, compared to 41.3% for the three months ended April
30, 1999.
Travel Centers. Gross sales at the Company's travel centers increased by 9.0% to
$6.766 million for the three months ended April 30, 2000, from $6.209 million
for the three months ended April 30, 1999. Merchandise sales increased 4.0% to
$2.225 million for the three months ended April 30, 2000, from $2.139 million
for the three months ended April 30, 1999. Gasoline sales increased 14.0% to
$3.486 million for the three months ended April 30, 2000, from $3.057 million
for the same period in 1999. Wholesale gasoline sales increased 16.9% to
$409,000 for the three months ended April 30, 2000, from $350,000 for the three
months ended April 30, 1999. Restaurant sales decreased 2.6% to $646,000 for the
three months ended April 30, 2000, from $663,000 for the three months ended
April 30, 1999.
Cost of goods sold for the travel centers increased 14.2% to $4.810 million for
the three months ended April 30, 2000, from $4.213 million for the three months
ended April 30, 1999. Merchandise cost of goods increased 7.6% to $1.011 million
for the three months ended April 30, 2000, from $940,000 for the three months
ended April 30, 1999. Gasoline cost of goods increased 18.3% to $3.230 millions
for the three months ended April 30, 2000, from $2.731 million for the three
months ended April 30, 1999. Wholesale gasoline cost of goods increased 17.5% to
$396,000 for the three months ended April 30, 2000, from $337,000 for the three
months ended April 30, 1999. Restaurant cost of goods decreased 15.6% to
$173,000 for the three months ended April 30, 2000, from $205,000 for the three
months ended April 30, 1999. Cost of goods sold as a percentage of gross
revenues for the three months ended April 30, 2000 was 71.1% compared to 67.9%
for the three months ended April 30, 1999.
Gross profit for the travel centers decreased 2.7% to $1.865 million for the
three months ended April 30, 2000, from $1.916 million for the three months
ended April 30, 1999. Lower margins on convenience store product sales and
gasoline sales for the three months ended April 30, 2000 continued to negatively
impact gross margin.
General and administrative expenses for travel centers consist of salaries,
bonuses and commissions for travel center personnel, property costs and repairs
and maintenance. General and administrative expenses for the travel centers
decreased 3.8% to $1.450 million for the three months ended April 30, 2000, from
$1.508 million for the three months ended April 30, 1999.
Depreciation and amortization expense increased 11.3% to $148,000 for the three
months ended April 30, 2000, from $133,000 for the three months ended April 30,
1999.
The above factors contributed to an overall decrease in travel center operating
income of 2.9% to $267,000 for the three months ended April 30, 2000, from
$275,000 for the three months ended April 30, 1999.
13
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Interest expense increased 6.6% to $130,000 for the three months ended April 30,
2000, from $122,000 for the three months ended April 30, 1999.
Segment decreased 10.5% to $137,000 for the three months ended April 30,2000,
from $153,000 for the three months ended April 30, 1999 primarily as a result of
increases in depreciation and amortization and interest expenses.
EBITDA for travel centers increased 1.7% to $415,000 for the three months ended
April 30, 2000, from $408,000 for the three months ended April 30, 1999. The
EBITDA margin for travel centers decreased slightly to 6.1% for the three months
ended April 30, 2000, compared to 6.6% for the three months ended April 30,
1999.
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 to $137,000 for the three months
ended April 30, 2000, from $134,000 for the three months ended April 30, 1999.
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
increased to $34,000 for the three months ended April 30, 2000, from $24,000 for
the three months ended April 30, 1999.
Interest expense increased 14.3% to $24,000 for the three months ended April 30,
2000, from $21,000 for the three months ended April 30, 1999.
Other income, net, includes gains and/or losses from the sales of assets and
interest income. Other income, net, increased 314.3% to $116,000 for the three
months ended April 30, 2000, from $28,000 for the three months ended April 30,
1999. The increase is due to a one-time gain of $102,000 from the sale of land
in the first quarter of fiscal year 2001 not present in fiscal year 2000.
Income before income taxes decreased 71.0% to $18,000 for the three months ended
April 30, 2000, from $62,000 for the three months ended April 30, 1999. As a
percentage of gross revenues, income before income taxes decreased to 0.2% for
the three months ended April 30, 2000, from 0.8% for the three months ended
April 30, 1999, primarily as a result of increased depreciation and
amortization, and interest expense.
Income taxes were $14,000 for the three months ended April 30, 2000, compared to
$26,000 for the three months ended April 30, 1999, as the result of lower pretax
income.
The foregoing factors contributed to a decrease in the Company's net income for
the three months ended April 30, 2000 to $4,000 compared to $36,000 for the
three months ended April 30, 1999.
Increases in depreciation and amortization as well as interest expense have been
substantial. Management expects depreciation and amortization and interest
expense to continue to increase which may lead to future net losses
14
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Liquidity and Capital Resources
At April 30, 2000, the Company had working capital of $3.896 million and a
current ratio of 1.8:1, compared to working capital of $4.166 million and a
current ratio of 2.1:1 at January 31, 2000. Net cash provided by operating
activities was $1.000 million for the three months ended April 30, 2000,
compared to $757,000 for the three months ended April 30, 1999. Net cash
provided in the current period is primarily attributable to increased
depreciation and amortization expense and other operating assets and
liabilities.
Net cash used in investing activities for the three months ended April 30, 2000
was $538,000, of which $664,000 was used for purchases of property and equipment
partially offset by proceeds from sales of assets. For the three months ended
April 30, 1999, net cash used for investing activities was $2.819 million, of
which $1.560 was used for purchases of property and equipment and $1.516 million
was used for acquisitions.
Net cash provided by financing activities for the three months ended April 30,
2000 was $106,000 as compared to $1.665 million for the three months ended April
30, 1999. At April 30, 2000 and 1999, 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 any 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 majority of debt equals LIBOR plus an
applicable margin. Because rates 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.
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. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
15
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a). Exhibit No. Exhibit Name
27 Financial Data Schedule
(b). No reports were filed on Form 8-K during the three months ended
April 30, 2000.
Signatures
In accordance with 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 14, 2000
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)
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