UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Quarter Ended September 29, 1996 Commission file Number 0-1830
BOWL AMERICA INCORPORATED
(Exact name of registrant as specified in its charter.)
MARYLAND 54-0646173
(State of Incorporation) (I.R.S. Employer Identification No.)
6446 Edsall Road, Alexandria, Virginia 22312
(Address of principal executive offices) (Zip Code)
(703)941-6300
Registrant's telephone number, including area code
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 of 1934 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 [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Shares Outstanding at
October 27, 1996
Class A Common Stock, 4,146,310
$.10 par value
Class B Common Stock 1,536,146
$.10 par value
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Thirteen Weeks Ended
September 29, October 1,
1996 1995
_______________________
<S> <C> <C>
Operating Revenues
Bowling and other $3,743,733 $3,823,858
Food and merchandise sales 1,621,756 1,843,955
_________ _________
5,365,489 5,667,813
Operating Expenses
Compensation and benefits 2,840,847 3,032,256
Cost of bowling and other 1,590,394 1,683,338
Cost of food and mdse sales 572,657 609,568
Depreciation and
amortization 500,880 491,583
General and administrative 181,525 199,895
_________ _________
5,686,303 6,016,640
Operating Loss (320,814) (348,827)
Interest and dividend
income 121,467 140,634
_________ _________
Loss before pro-
vision for income taxes (199,347) (208,193)
Income tax benefit (83,732) (87,377)
_________ _________
Net Loss $ (115,615) $ (120,816)
Loss per share $(.02) $(.02)
Weighted average shares
outstanding 5,682,456 5,742,927
Dividends paid $538,048 $545,593
Per share, Class A $.095 $.095
Per share, Class B $.095 $.095
</TABLE>
The operating results for these thirteen (13) periods are not
necessarily indicative of results to be expected for the year.
See notes to financial information.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 29, 1996 June 30, 1996
__________________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 2,410,084 $ 2,120,862
Short-term investments 4,918,255 6,760,166
Inventories 808,939 685,777
Prepaid expenses and other 701,402 736,659
Income taxes refundable 291,064 204,662
__________ __________
Total Current Assets 9,129,744 10,508,126
Property, Plant and Equipment
less accumulated depreciation of
$19,769,377 and $19,268,110 23,067,974 22,680,521
Other Assets
Noncurrent marketable securities 3,519,090 3,855,282
Cash surrender value-life insurance 334,968 332,162
Other long-term assets 218,947 525,163
__________ __________
TOTAL ASSETS $36,270,723 $37,901,254
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 29, 1996 June 30, 1996
__________________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 641,252 $ 1,447,153
Accrued expenses and payroll ded 883,917 906,239
Other current liabilities 575,576 388,029
Current deferred income taxes 114,000 114,000
__________ __________
Total Current Liabilities 2,214,745 2,855,421
Noncurrent Deferred Income Taxes 2,014,247 2,142,000
TOTAL LIABILITIES 4,228,992 4,997,421
__________ __________
Stockholders' Equity
Preferred stock,
par value $10 a share: Authorized
and unissued 2,000,000 shares
Common stock,
par value $.10 per share
Authorized 10,000,000 shares
Class A issued and outstanding -
4,146,310 shares 414,631 414,631
Class B issued and outstanding -
1,536,146 153,614 153,614
Additional paid-in capital 4,908,819 4,908,819
Unrealized gain on securities
available-for-sale, net of tax 1,649,773 1,858,212
Retained earnings 24,914,894 25,568,557
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,041,731 $32,903,833
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $36,270,723 $37,901,254
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 29, 1996 AND OCTOBER 1, 1995
<CAPTION>
September 29, October 1,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (115,615) $(120,816)
Adjustments to reconcile net
loss to net cash provided
by (used in) operating activities
Depreciation and amortization 500,880 492,723
Changes in assets and liabilities
Increase in inventories (123,162) (237,135)
Increase (decrease)in prepaid and other 35,257 (115,405)
Decrease in other long-term assets 303,410 288,498
(Decrease) increase in accounts payable (805,901) 7,090
Decrease in accrued expenses and
payroll deductions (22,322) (32,903)
Decrease in income taxes refundable (86,402) (87,744)
Increase in other current liabilities 187,547 203,677
_________ _________
Net cash (used in) provided by
operating activities $ (126,308) $ 397,985
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (888,333) (170,207)
Net decrease in short-term investments 1,841,911 1,841,794
_________ _________
Net cash provided by
investing activities 953,578 1,671,587
_________ _________
Cash flows from financing activities
Payment of cash dividends (538,048) (545,593)
Purchase of Class A Common Stock - (3,601)
_________ _________
Net cash used in financing activities (538,048) (549,194)
_________ _________
Net Increase in Cash and Equivalents 289,222 1,520,378
Cash and Equivalents, Beginning of Qtr 2,120,862 973,678
_________ _________
Cash and Equivalents, End of Quarter $2,410,084 $2,494,056
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 2.670 $ 367
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirteen Weeks Ended
September 29, 1996
1. Consolidated Financial Statements
The consolidated balance sheets as of September 29, 1996, and
the consolidated statements of earnings and cash flows for the
three-month periods ended September 29, 1996 and October 1, 1995
have been prepared by the Company, without audit.
This quarterly financial information is submitted in response
to the requirements of Form 10-Q and does not purport to be
financial statements prepared in accordance with generally accepted
accounting principles. They therefore do not include all
disclosures which might be associated with such statements.
In the opinion of management such information includes all
adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position at September 29,
1996, and for all periods presented.
For a summary of significant accounting principles, which have
been continued without change refer to Note 1 to the financial
statements for the year ended June 30, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 29, 1996
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $7,328,000 at the end of the first
quarter of fiscal 1997 or $1,553,000 lower than at the beginning
of the quarter. The decrease relates to the seasonal nature of
bowling participation and expenditures for the expansion of our
Dranesville location and upgrades at other centers. Additional
expenditures are also planned as the Company continues to
modernize other existing centers. Cash flow is sufficient to
finance all currently planned construction. The Company has
maintained its fiscal year end 1996 position in telecommunications
stocks as a further source of expansion capital.
On September 1, 1994, the Company opened Bowl America Gaithersburg,
a 48-lane center with at 170-seat full service, diner style
restaurant. A center was closed in May 1995 at the expiration of
its lease.
Results of Operations
There was a $.02 per share loss in the first quarter of both this
year and last year. Operating revenues decreased 5% this quarter
versus a decrease of 1% in the first quarter last year. Linage
was down for the period however an increase in the average game
rate helped to offset the reduced business. In last year's
quarter, promotional pricing, used in part to support extended
hours of operation, helped to increase open play games but
resulted in a lower average game rate.
Food and beverage sales were down due to decreased traffic. Cost
of food and beverage sales decreased in response to the reduction
in sales.
Operating expenses excluding depreciation and amortization
decreased 6% in the current quarter versus a slight decrease in
in the comparable quarter last year. Employee compensation and
benefits were down 6% this period versus a 2% increase in the
prior year period.
<PAGE>
Advertising costs decreased 12% from the prior year period as
we used print media to a greater extent than in the previous
period. We conducted media campaigns in both quarters. Utility
costs decreased 6% in the current quarter compared to a 2%
increase in the prior year quarter. The increase in the prior
period related to the expense for a new center.
Rent expense decreased 15% in the current 13 week period and 9%
in the prior year period, the decrease a result of reduced sales
at some leased locations. Personal property taxes and insurance
premiums were down for the period.
Increases in depreciation and amortization expense of 2% in the
current quarter relates primarily to the capital expenditures
made in the last six months. The 3% increase in the comparable
quarter last year was due mainly to the Gaithersburg location
being open for the full quarter.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
September 29, 1996
PART II - OTHER INFORMATION
An 8K was filed in July 1996, which referred to changes
in an employment contract.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirement 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.
BOWL AMERICA INCORPORATED
Registrant
November 13, 1996 Leslie H. Goldberg
Date Leslie H. Goldberg
President
November 13, 1996 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<EXCHANGE-RATE> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-29-1997
<PERIOD-END> SEP-29-1996
<CASH> 2,410
<SECURITIES> 3,519
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 809
<CURRENT-ASSETS> 9,130
<PP&E> 42,837
<DEPRECIATION> 19,769
<TOTAL-ASSETS> 36,271
<CURRENT-LIABILITIES> 2,215
<BONDS> 0
0
0
<COMMON> 568
<OTHER-SE> 31,474
<TOTAL-LIABILITY-AND-EQUITY> 36,271
<SALES> 1,622
<TOTAL-REVENUES> 5,365
<CGS> 573
<TOTAL-COSTS> 5,686
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (199)
<INCOME-TAX> (84)
<INCOME-CONTINUING> (116)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (116)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
