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 October 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from _____________ to ______________
Commission File Number 000-31701
BOWLIN TRAVEL CENTERS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 85-0473277
(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 ___ No X
As of January 12, 2001, 4,583,348 shares of the issuer's common stock were
outstanding.
<PAGE>
BOWLIN TRAVEL CENTERS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page No.
--------
Item 1. Financial Statements
Balance Sheets as of October 31, 2000
and January 31, 2000..................................... 2
Statements of Operations for the Three and Nine
Months Ended October 31, 2000 and 1999................... 3
Statements of Cash Flows for the
Nine Months Ended October 31, 2000 and 1999.............. 4
Notes to the Financial Statements........................ 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk..............................................12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................12
Item 2. Changes in Securities and Use of Proceeds ...............12
Item 3. Defaults Upon Senior Securities..........................12
Item 4. Submission of Matters to a Vote of Security Holders......12
Item 5. Other Information........................................12
Item 6. Exhibits and Reports on Form 8-K.........................13
Signatures...............................................14
1
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BOWLIN TRAVEL CENTERS, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOWLIN TRAVEL CENTERS, INC.
BALANCE SHEETS
(In thousands, except share data)
OCTOBER 31, JANUARY 31,
2000 2000
(Unaudited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 2,924 $ 1,389
Accounts receivable, other 111 559
Accounts receivable, related parties 75 122
Inventories 3,505 3,530
Prepaid expenses 241 106
Other current assets 9 13
Notes receivable, related parties 24 14
----------- -----------
Total current assets 6,889 5,733
Property & equipment, net 10,170 10,761
Intangible assets, net 304 328
Other assets 367 169
----------- -----------
Total assets $ 17,730 $ 16,991
=========== ===========
LIABILITIES AND PARENT'S EQUITY IN DIVISION
Current liabilities:
Accounts payable 1,167 1,218
Current installments of long-term debt 492 492
Accrued salaries 63 152
Accrued liabilities 244 183
----------- -----------
Total current liabilities 1,966 2,045
Deferred income taxes 616 593
Long-term debt, less current installments 5,845 6,232
----------- -----------
Total liabilities 8,427 8,870
Parent's equity in division 9,303 8,121
----------- -----------
Total liabilities and parent's equity
in division $ 17,730 $ 16,991
=========== ===========
See accompanying notes to financial statements.
2
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BOWLIN TRAVEL CENTERS, INC.
STATEMENTS OF OPERATIONS AND PARENT'S EQUITY IN DIVISION
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Gross sales $ 6,475 $ 6,905 $ 21,227 $ 20,977
Less discounts on sales 97 97 298 278
----------- ----------- ----------- -----------
Net sales 6,378 6,808 20,929 20,699
Cost of goods sold 4,481 4,844 14,653 14,319
----------- ----------- ----------- -----------
Gross profit 1,897 1,964 6,276 6,380
General and administrative expenses (1,723) (1,800) (5,126) (5,319)
Depreciation and amortization (213) (185) (590) (540)
Management fee income 57 52 161 155
----------- ----------- ----------- -----------
Operating income 18 31 721 676
Non-operating income (expense):
Interest income 45 31 102 80
Gain from insurance proceeds -- 532 -- 759
Gain (loss) on sale/abandonment
of property and equipment (26) 4 106 10
Interest expense (152) (150) (471) (444)
----------- ----------- ----------- -----------
Total non-operating income (expense) (133) 417 (263) 405
----------- ----------- ----------- -----------
Income (loss) before income taxes (115) 448 458 1,081
Income tax expense (benefit) (43) 173 178 416
----------- ----------- ----------- -----------
Net income (loss) (72) 275 280 665
Parent's equity in division - beginning
of period 8,473 8,024 8,121 7,634
Parent's capital contribution 902 -- 902 --
----------- ----------- ----------- -----------
Parent's equity in division - end
of period $ 9,303 $ 8,299 $ 9,303 $ 8,299
=========== =========== =========== ===========
Proforma earnings per share (unaudited):
Weighted average common shares 4,400,041 4,384,848 4,390,312 4,384,848
=========== =========== =========== ===========
Basic and diluted earning per share $ (.02) $ .06 $ .06 $ .15
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
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BOWLIN TRAVEL CENTERS, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
------------------------------
OCTOBER 31 OCTOBER 31
2000 1999
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 280 $ 665
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 590 540
Gain from insurance proceeds -- (759)
Gain on sales of property and equipment (106) (10)
Deferred income taxes 23 363
Changes in operating assets and liabilities, net 314 486
----------- ----------
Net cash provided by operating activities 1,101 1,285
Cash flows from investing activities:
Proceeds from sale of assets 207 23
Purchases of property and equipment, net (256) (2,028)
Proceeds from insurance -- 699
Capital received from partnership -- 15
Notes receivable, net (32) 2
----------- ----------
Net cash used in investing activities (81) (1,289)
Cash flows from financing activities:
Borrowings on long-term debt -- 250
Payments on long-term debt (387) (354)
Parent's capital contribution 902 --
----------- ----------
Net cash provided by (used in) financing activities 515 (104)
Net increase (decrease) in cash and cash equivalents 1,535 (108)
Cash and cash equivalents at beginning of period 1,389 1,792
----------- ----------
Cash and cash equivalents at end of period $ 2,924 $ 1,684
=========== ==========
Supplemental disclosure of cash flow information:
Sale of property and equipment in exchange
for note receivable $ 180 $ --
=========== ==========
</TABLE>
See accompanying notes to financial statements
4
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BOWLIN TRAVEL CENTERS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. The financial statements for the three and nine months ended October 31,
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 financial statements should be read in
conjunction with the financial statements and notes, together with
management's discussion and analysis of financial condition and results of
operations, contained in the Company's Form 10 filed October 5, 2000.
Results of operations for interim periods are not necessarily indicative of
results that may be expected for the year as a whole.
On October 3, 2000, an agreement and plan of merger between Lamar
Advertising Company, Lamar Southwest Acquisition Corporation and Bowlin
Outdoor Advertising & Travel Centers, Incorporated (BOATC) was signed. In
the merger, Lamar Southwest Acquisition Corporation, a newly formed, wholly
owned subsidiary of Lamar, will merge with and into BOATC. BOATC will be
the surviving corporation and will continue to exist under Nevada law as a
wholly owned subsidiary of Lamar.
BOATC and its newly formed wholly owned subsidiary, Bowlin Travel Centers,
Inc., (BTC or the Company) entered into a contribution agreement dated as
of November 1, 2000. Under this contribution agreement certain assets and
liabilities of BOATC related to the travel centers segment and corporate
operations of the Company were contributed to BTC in exchange for shares of
stock in BTC. BOATC intends to distribute the shares of BTC to the
stockholders of BOATC immediately prior to the completion of the merger
with Lamar. The business, assets and liabilities of the travel centers
segment and corporate operations, will not be acquired by Lamar.
Pro forma earnings per share of common stock, both basic and diluted, are
computed by dividing net income by the weighted average common shares
outstanding for the Company's parent, BOATC, given management of BOATC's
plan to distribute the stock of BTC to the shareholders of BOATC in a
spin-off transaction in the form of a dividend on a one-to-one share basis.
Diluted earnings per share is calculated in the same manner as basic
earnings per share as there were no dilutive potential securities
outstanding for all periods presented.
The Company and BOATC have entered into an agreement whereby the Company is
reimbursed for certain corporate general and administrative functions
performed on behalf of BOATC. These fees are included in the caption
"management fees" in the accompanying statements of operations and parent's
equity in division and they include treasury, accounting, tax, human
resources, and other support services. Management believes that Lamar
Advertising will discontinue such cost sharing in the future, which would
have the effect of reducing the Company's net income, and earnings per
share to the pro forma (unaudited) amounts that follow:
5
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BOWLIN TRAVEL CENTERS, INC.
Pro forma
As excluding
Unaudited reported management fee
--------- -------------- ------------------
Three months ended October 31,
Net income:
2000 $ (72,000) (107,000)
1999 275,000 244,000
--------------- ------------------
Pro forma earnings per share:
2000 $ (0.02) (0.02)
1999 0.06 0.06
--------------- ------------------
Nine months ended October 31,
Net income:
2000 $ 280,000 181,000
1999 665,000 570,000
--------------- ------------------
Pro forma earnings per share:
2000 $ 0.06 0.04
1999 0.15 0.13
--------------- ------------------
2. In May 2000, the Company sold certain assets, including land and equipment,
to a third party for $25,000 cash and a note receivable for $400,000. The
note receivable has a stated rate of interest of 8 percent and is payable
in annual installments of $37,500 through 2004 with the balance due in
2005. The assets sold had a carrying value of $185,248 and the costs
incurred to sell the assets were $6,043. The gain on the sale of the
property was $233,709, of which $13,748 was recognized initially and
$219,961 was deferred and will be recognized into income using the
installment method as payments are received. The deferred gain is reflected
as a reduction to the note receivable in the accompanying balance sheet.
3. On October 20, 2000, the Company closed one of its travel centers located
near Deming, New Mexico. The travel centers assets had a carrying value of
approximately $21,000. Inventory and furniture and equipment were
transferred to other travel center locations resulting in a net carrying
value of approximately $14,000 for the assets abandoned. An impairment loss
of approximately $29,000 was recorded due to the carrying amount of the
buildings and improvements abandoned which includes an estimate for the
costs incurred to remove the building from the leased land.
4. Subsequent event. On November 27, 2000 the Company sold one of its travel
centers located in Rio Puerco, New Mexico. Proceeds from the sale were
$600,000 and the Company expects to record a gain on the sale of
approximately $150,000 in November 2000.
6
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BOWLIN TRAVEL CENTERS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CERTAIN STATEMENTS CONTAINED HEREIN WITH RESPECT TO FACTORS WHICH MAY AFFECT
FUTURE EARNINGS, INCLUDING MANAGEMENT'S BELIEFS AND ASSUMPTIONS BASED ON
INFORMATION CURRENTLY AVAILABLE, ARE FORWARD-LOOKING STATEMENTS MADE PURSUANT TO
THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. SUCH FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS INVOLVE
RISKS AND UNCERTAINTIES, AND RESULTS COULD VARY MATERIALLY FROM THE DESCRIPTIONS
CONTAINED HEREIN.
OVERVIEW
The following is a discussion of the financial condition and results of
operations of the Company as of and for the periods ended October 31, 2000 and
1999. This discussion should be read in conjunction with the Financial
Statements of the Company and the related notes included in the Company's Form
10 filed October 5, 2000.
The Company is located in Albuquerque, New Mexico. For the periods presented in
these financial statements, the Company operated as a separate division of
BOATC, a public company traded on the American Stock Exchange.
On October 3, 2000, an agreement and plan of merger between Lamar Advertising
Company, Lamar Southwest Acquisition Corporation and BOATC was signed. In the
merger, Lamar Southwest Acquisition Corporation, a newly formed, wholly owned
subsidiary of Lamar, will merge with and into BOATC. BOATC will be the surviving
corporation and will continue to exist under Nevada law as a wholly owned
subsidiary of Lamar.
On August 8, 2000 the Company was incorporated in the state of Nevada. The
Company's articles of incorporation authorize 10,000,000 shares of common stock
($.001 par value) and 1,000,000 shares of preferred stock ($.001 par value),
which can be issued at the discretion of the Board of Directors.
BOATC and its newly formed wholly owned subsidiary, Bowlin Travel Centers, Inc.,
(BTC or the Company) entered into a contribution agreement dated as of November
1, 2000. This contribution agreement provides that certain assets and
liabilities of BOATC related to the travel centers segment and corporate
operations of the Company will be contributed to BTC in exchange for shares of
stock in BTC. BOATC will then distribute the shares of BTC to the stockholders
of BOATC immediately prior to the completion of the merger with Lamar. The
business, assets and liabilities of the travel centers segment and corporate
operations, will not be acquired by Lamar.
The Company is a wholly owned subsidiary of BOATC. Inter-company transactions
have generally been limited to management fees, federal and state income tax
allocations, cash advances and cash distributions and are recorded and funded
through an inter-company receivable/payable account.
The Company's principal business activities include the operation of
full-service travel centers and restaurants that offer brand name food and
gasoline, and a unique variety or Southwestern merchandise to the traveling
public in the Southwestern United States.
On October 20, 2000, the Company closed one of its travel centers located near
Deming, New Mexico. The travel centers assets had a carrying value of
7
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BOWLIN TRAVEL CENTERS, INC.
approximately $21,000. Inventory and furniture and equipment were transferred to
other travel center locations resulting in a net carrying value of approximately
$14,000 for the assets abandoned. An impairment loss of approximately $29,000
was recorded due to the carrying amount of the buildings and improvements
abandoned which includes an estimate for the costs incurred to remove the
building from the leased land.
SUBSEQUENT EVENT. On November 27, 2000 the Company sold one of its travel
centers located in Rio Puerco, New Mexico. Proceeds from the sale were $600,000
and the Company expects to record a gain on the sale of approximately $150,000
in November 2000.
The discussion of results of operations which follows compares such selected
operating data for the interim periods presented.
RESULTS OF OPERATIONS
The following table presents certain income and expense items derived from the
Statements of Operations for the three and nine months ended October 31
(unaudited and amounts in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
2000 1999 2000 1999
---- ---- ---- ----
SELECTED STATEMENT OF OPERATIONS DATA:
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $ 6,378 $ 6,808 $ 20,929 $ 20,699
========== ========== ========== ===========
Net income (loss) $ (72) $ 275 $ 280 $ 665
========== ========== ========== ===========
Pro forma basic and diluted earnings per share $ (0.02) $ 0.06 $ 0.06 $ 0.15
========== ========== ========== ===========
EBITDA (1) $ 231 $ 216 $ 1,311 $ 1,216
========== ========== ========== ===========
EBITDA Margin 3.6% 3.1% 6.2% 5.8%
========== ========== ========== ===========
</TABLE>
(1) EBITDA (earnings before interest, taxes, depreciation and amortization) is
defined as operating income before depreciation and amortization. It
represents a measure which management believes is customarily used to
evaluate financial performance. However, EBITDA is not a measure of
financial performance under generally accepted accounting principles 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 NINE MONTHS ENDED OCTOBER 31, 2000 AND OCTOBER 31, 1999
Gross sales at the Company's travel centers increased by 1.2% to $21.227 million
for the nine months ended October 31, 2000, from $20.977 million for the nine
months ended October 31, 1999. Merchandise sales decreased 1.4% to $7.479
million for the nine months ended October 31, 2000, from $7.589 million for the
nine months ended October 31, 1999. Gasoline sales increased 3.9% to $10.311
million for the nine months ended October 31, 2000, from $9.924 million for the
same period in 1999. Wholesale gasoline sales increased 11.2% to $1.415 million
for the nine months ended October 31, 2000, from $1.273 million for the nine
8
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BOWLIN TRAVEL CENTERS, INC.
months ended October 31, 1999. Restaurant sales decreased 7.7% to $2.022 million
for the nine months ended October 31, 2000, from $2.191 million for the nine
months ended October 31, 1999.
Cost of goods sold increased 2.3% to $14.653 million for the nine months ended
October 31, 2000, from $14.319 million for the nine months ended October 31,
1999. Merchandise cost of goods decreased 3.2% to $3.344 million for the nine
months ended October 31, 2000, from $3.455 million for the nine months ended
October 31, 1999. Gasoline cost of goods increased 4.4% to $9.383 million for
the nine months ended October 31, 2000, from $8.988 million for the nine months
ended October 31, 1999. Wholesale gasoline cost of goods increased 11.8% to
$1.373 million for the nine months ended October 31, 2000, from $1.228 million
for the nine months ended October 31, 1999. Restaurant cost of goods decreased
14.7% to $553,000 for the nine months ended October 31, 2000, from $648,000 for
the nine months ended October 31, 1999. Cost of goods sold as a percentage of
gross revenues for the nine months ended October 31, 2000 was 69.0% compared to
68.3% for the nine months ended October 31, 1999.
Gross profit decreased 1.6% to $6.276 million for the nine months ended October
31, 2000, from $6.380 million for the nine months ended October 31, 1999. Lower
margins on convenience store product sales and gasoline sales for the nine
months ended October 31, 2000 negatively impacted gross margin.
General and administrative expenses consist of salaries, bonuses and commissions
for travel center personnel, property costs and repairs and maintenance. General
and administrative expenses also include executive and administrative
compensation and benefits, accounting, legal and investor relations fees.
General and administrative expenses decreased 3.6% to $5.126 million for the
nine months ended October 31, 2000, from $5.319 million for the nine months
ended October 31, 1999.
Depreciation and amortization expense increased 9.3% to $590,000 for the nine
months ended October 31, 2000, from $540,000 for the nine months ended October
31, 1999.
Management fee income consists of reimbursements for certain corporate general
and administrative functions performed on the behalf of BOATC including
treasury, accounting, tax, human resources, and other support services.
Management fee income increased 3.9% to $161,000 for the nine months ended
October 31, 2000, from $155,000 for the nine months ended October 31, 1999. The
Company and BOATC have entered into a management services agreement, however,
Lamar has indicated they expect to discontinue such cost sharing in future
periods.
The above factors contributed to an overall increase in operating income of 6.7%
to $721,000 for the nine months ended October 31, 2000, from $676,000 for the
nine months ended October 31, 1999.
EBITDA increased 7.8% to $1.311 million for the nine months ended October 31,
2000, from $1.216 million for the nine months ended October 31, 1999. The EBITDA
margin increased to 6.2% for the nine months ended October 31, 2000, compared to
5.8% for the nine months ended October 31, 1999.
Interest expense increased 6.1% to $471,000 for the nine months ended October
31, 2000, from $444,000 for the nine months ended October 31, 1999.
Other income, net, includes primarily gains and/or losses from the sale of
assets and interest income. Other income, net, decreased 75.5% to $208,000 for
the nine months ended October 31, 2000, from $849,000 for the nine months ended
9
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BOWLIN TRAVEL CENTERS, INC.
October 31, 1999. The decrease is primarily due to a one-time gain of $759,000
from insurance proceeds in fiscal year 2000 not present in fiscal year 2001
partially offset by gains on sales of assets in fiscal 2001.
Income before income taxes decreased 57.6% to $458,000 for the nine months ended
October 31, 2000, from $1.081 million for the nine months ended October 31,
1999. As a percentage of gross revenues, income before income taxes decreased to
2.2% for the nine months ended October 31, 2000, from 5.2% for the nine months
ended October 31, 1999.
Income taxes were $178,000 for the nine months ended October 31, 2000, compared
to $416,000 for the nine months ended October 31, 1999, as the result of lower
pretax income.
The foregoing factors contributed to an decrease in the Company's net income for
the nine months ended October 31, 2000 to $280,000 compared to $665,000 for the
nine months ended October 31, 1999.
COMPARISON OF THE THREE MONTHS ENDED OCTOBER 31, 2000 AND OCTOBER 31, 1999
Gross sales at the Company's travel centers decreased by 6.2% to $6.475 million
for the three months ended October 31, 2000, from $6.905 million for the three
months ended October 31, 1999. Merchandise sales decreased 6.9% to $2.223
million for the three months ended October 31, 2000, from $2.389 million for the
three months ended October 31, 1999. Gasoline sales decreased 5.2% to $3.197
million for the three months ended October 31, 2000, from $3.372 million for the
same period in 1999. Wholesale gasoline sales increased 2.2% to $470,000 for the
three months ended October 31, 2000, from $460,000 for the three months ended
October 31, 1999. Restaurant sales decreased 14.5% to $585,000 for the three
months ended October 31, 2000, from $684,000 for the three months ended October
31, 1999.
Cost of goods sold decreased 7.5% to $4.481 million for the three months ended
October 31, 2000, from $4.844 million for the three months ended October 31,
1999. Merchandise cost of goods decreased 11.0% to $994,000 for the three months
ended October 31, 2000, from $1.117 million for the three months ended October
31, 1999. Gasoline cost of goods decreased 7.2% to $2.862 million for the three
months ended October 31, 2000, from $3.083 million for the three months ended
October 31, 1999. Wholesale gasoline cost of goods increased 2.5% to $456,000
for the three months ended October 31, 2000, from $445,000 for the three months
ended October 31, 1999. Restaurant cost of goods decreased 15.1% to $169,000 for
the three months ended October 31, 2000, from $199,000 for the three months
ended October 31, 1999. Cost of goods sold as a percentage of gross revenues for
the three months ended October 31, 2000 was 69.2% compared to 70.2% for the
three months ended October 31, 1999.
Gross profit decreased 3.4% to $1.897 million for the three months ended October
31, 2000, from $1.964 million for the three months ended October 31, 1999. Lower
margins on convenience store product sales and gasoline sales for the three
months ended October 31, 2000 continued to negatively impact gross margin.
General and administrative expenses consist of salaries, bonuses and commissions
for travel center personnel, property costs and repairs and maintenance. General
and administrative expenses also include executive and administrative
compensation and benefits, accounting, legal and investor relations fees.
General and administrative expenses decreased 4.1% to $1.724 million for the
three months ended October 31, 2000, from $1.797 million for the three months
ended October 31, 1999.
Management fee income consists of reimbursements for certain corporate general
and administrative functions performed on the behalf of BOATC including
10
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BOWLIN TRAVEL CENTERS, INC.
treasury, accounting, tax, human resources, and other support services.
Management fee income increased 9.6% to $57,000 for the three months ended
October 31, 2000, from $52,000 for the three months ended October 31, 1999. The
Company and BOATC have entered into a management services agreement, however,
Lamar has indicated they expect to discontinue such cost sharing in future
periods.
Depreciation and amortization expense increased 15.1% to $213,000 for the three
months ended October 31, 2000, from $185,000 for the three months ended October
31, 1999.
The above factors contributed to a decrease in operating income of 41.9% to
$18,000 for the three months ended October 31, 2000, from $31,000 for the three
months ended October 31, 1999.
EBITDA increased 6.9% to $231,000 for the three months ended October 31, 2000,
from $216,000 for the three months ended October 31, 1999. The EBITDA margin
increased slightly to 3.6% for the three months ended October 31, 2000, compared
to 3.1% for the three months ended October 31, 1999.
Interest expense increased 0.7% to $152,000 for the three months ended October
31, 2000, from $151,000 for the three months ended October 31, 1999.
Other income, net, includes primarily gains and/or losses from the sale of
assets and interest income. Other income, net, decreased 96.6% to $19,000 for
the three months ended October 31, 2000, from $567,000 for the three months
ended October 31, 1999. The decrease is due primarily to a one-time gain from
insurance proceeds of $532,000 in fiscal year 2000 not present in fiscal year
2001.
Income before income taxes decreased 125.7% to a loss of $115,000 for the three
months ended October 31, 2000, as compared to income of $448,000 for the three
months ended October 31, 1999. As a percentage of gross revenues, income before
income taxes was (1.8%) for the three months ended October 31, 2000, compared to
6.5% for the three months ended October 31, 1999.
The foregoing factors contributed to a net loss for the three months ended
October 31, 2000 of $72,000 compared to net income of $275,000 for the three
months ended October 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 2000, the Company had working capital of $4.923 million and a
current ratio of 3.5:1, compared to working capital of $3.688 million and a
current ratio of 2.8:1 January 31, 2000. Net cash provided by operating
activities was $1.101 million for the nine months ended October 31, 2000,
compared to $1.285 million for the nine months ended October 31, 1999. Net cash
provided in the current period is primarily attributable to net income,
increased depreciation and amortization expense and changes in other operating
assets and liabilities.
Net cash used in investing activities for the nine months ended October 31, 2000
was $81,000, of which $256,000 was used for purchases of property and equipment,
partially offset by $207,000 of proceeds from the sale of assets. For the nine
months ended October 31, 1999, net cash used for investing activities was $1.289
million, of which $2.028 million was used for purchases of property and
equipment, partially offset by insurance proceeds of $699,000.
Net cash provided by financing activities for the nine months ended October 31,
2000 was $515,000 as compared to net cash used of $104,000 for the nine months
11
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BOWLIN TRAVEL CENTERS, INC.
ended October 31, 1999. For the period ended October 31, 2000 financing
activities were a result of payments on debt offset by a capital contribution
received from BOATC. For the period ended October 31, 1999, financing activities
were primarily a result of borrowings and payments on debt.
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 the majority of the Company's 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 Company
borrowings. 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.
We have not entered into any market risk sensitive instruments for trading
purposes. Further, we do not currently have any derivative instruments
outstanding and have no plans to use any form of derivative instruments to
manage our business in the foreseeable future.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities and Use of Proceeds.
We issued 1,000 shares of common stock to BOWLIN Outdoor Advertising
and Travel Centers Incorporated on August 8, 2000, the date of our
formation as a wholly owned subsidiary of BOWLIN Outdoor Advertising
and Travel Centers Incorporated. We received $1,000 for the issuance
of these shares, which proceeds were used for general working capital.
On November 1, 2000, we issued 4,582,348 shares of common stock to
BOWLIN Outdoor Advertising and Travel Centers Incorporated. We issued
these shares in exchange for the assets and liabilities directly
related to the travel centers business of BOWLIN Outdoor Advertising
and Travel Centers Incorporated which were acquired pursuant to the
Contribution Agreement between us and BOWLIN Outdoor Advertising and
Travel Centers Incorporation dated as if November 1, 2000.
For both issuances, we relied on the exemptions provided by Section
4(2) of the Securities Act of 1933 for transactions that are exempt
from the registration requirements of Section 5 of the Securities Act
of 1933. The issuances to BOWLIN Outdoor Advertising and Travel
Centers Incorporated were not public offerings.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
12
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BOWLIN TRAVEL CENTERS, INC.
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 nine months
ended October 31, 2000.
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BOWLIN TRAVEL CENTERS, INC.
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: January 15, 2001
Bowlin Travel Centers Inc.
/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)
14
