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 28, 1997 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 26, 1997
Class A Common Stock, 4,125,998
$.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 28, September 29,
1997 1996
_______________________
<S> <C> <C>
Operating Revenues
Bowling and other $3,830,878 $3,743,733
Food and merchandise sales 1,585,976 1,621,756
_________ _________
5,416,854 5,365,489
Operating Expenses
Compensation and benefits 2,779,558 2,840,847
Cost of bowling and other 1,530,332 1,590,394
Cost of food and mdse sales 511,775 572,657
Depreciation and
amortization 550,614 500,880
General and administrative 191,584 181,525
_________ _________
5,563,863 5,686,303
Operating Loss (147,009) (320,814)
Interest and dividend
income 135,098 121,467
_________ _________
Loss before pro-
vision for income taxes (11,911) (199,347)
Income tax benefit (12,615) (83,732)
_________ _________
Net Earnings (loss) $ 704 $ (115,615)
Earnings (loss) per share $ .00 $(.02)
Weighted average shares
outstanding 5,662,144 5,682,456
Dividends paid $566,214 $538,048
Per share, Class A $.10 $.095
Per share, Class B $.10 $.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 28, 1997 June 29, 1997
__________________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,826,688 $ 1,797,656
Short-term investments 5,507,943 6,375,039
Inventories 900,982 700,200
Prepaid expenses and other 539,723 459,652
Income taxes refundable 112,597 32,982
__________ __________
Total Current Assets 8,887,933 9,365,529
Property, Plant and Equipment
less accumulated depreciation of
$20,566,155 and $20,052,750 23,465,493 23,454,699
Other Assets
Marketable securities
available-for-sale 4,542,878 4,363,058
Cash surrender value-life insurance 357,601 354,206
Other long-term assets 217,332 465,079
__________ __________
TOTAL ASSETS $37,471,237 $38,002,571
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 28, 1997 June 29, 1997
__________________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 614,078 $ 992,397
Accrued expenses and payroll ded 900,264 840,502
Other current liabilities 555,753 382,840
Current deferred income taxes 70,000 70,000
__________ __________
Total Current Liabilities 2,140,095 2,285,739
Noncurrent Deferred Income Taxes 2,403,332 2,335,000
TOTAL LIABILITIES 4,543,427 4,620,739
__________ __________
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 -
4,125,998 shares 412,600 412,600
Class B issued and outstanding -
1,536,146 153,614 153,614
Additional paid-in capital 4,896,835 4,896,835
Unrealized gain on securities
available-for-sale, net of tax 2,284,521 2,173,033
Retained earnings 25,180,240 25,745,750
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,927,810 $33,381,832
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $37,471,237 $38,002,571
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 28, 1997 AND SEPTEMBER 29, 1996
<CAPTION>
September 28, September 29,
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings (loss) $ 704 $ (115,615)
Adjustments to reconcile net
loss to net cash provided
by (used in) operating activities
Depreciation and amortization 550,614 500,880
Changes in assets and liabilities
Increase in inventories (200,782) (123,162)
(Increase)decrease in prepaid and other (80,071) 35,257
Decrease in other long-term assets 244,352 303,410
Decrease in accounts payable (378,319) (805,901)
Increase (decrease) in accrued expenses
and payroll deductions 59,762 (22,322)
Increase in income taxes refundable (79,615) (86,402)
Increase in other current liabilities 172,913 187,547
_________ _________
Net cash provided by (used in)
operating activities $ 289,558 $(126,308)
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (561,408) (888,333)
Net decrease in short-term investments 867,096 1,841,911
_________ _________
Net cash provided by
investing activities 305,688 953,578
_________ _________
Cash flows from financing activities
Payment of cash dividends (566,214) (538,048)
_________ _________
Net cash used in financing activities (566,214) (538,048)
_________ _________
Net Increase in Cash and Equivalents 29,032 289,222
Cash and Equivalents, Beginning of Qtr 1,797,656 2,120,862
_________ _________
Cash and Equivalents, End of Quarter $1,826,688 $2,410,084
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 67,000 $ 2,670
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirteen Weeks Ended
September 28, 1997
1. Consolidated Financial Statements
The consolidated balance sheets as of September 28, 1997, and
the consolidated statements of earnings and cash flows for the
three-month periods ended September 28, 1997 and September 29, 1996
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 28,
1997, 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 29, 1997.
2. Earnings Per Share
The Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share" in February 1997. The effect of adopting this
standard has no impact on the earnings per share calculation for the
quarters ended September 28, 1997, and September 29, 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 28, 1997
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $7,335,000 at the end of the first
quarter of fiscal 1998 or $838,000 lower than at the beginning
of the quarter. The decrease relates primarily to the seasonal
nature of bowling participation.
During the quarter the Company expended approximately $600,000
for capital assets including upgraded bowling equipment and
glow-in-the-dark light and sound systems. In addition, the
Company is continuing its program of replacing leased amusement
game machines with owned machines. Expenditures are also
planned as the Company continues to modernize other existing
centers. Cash and cash flow are sufficient to finance all
currently planned purchases and construction. The Company has
maintained its fiscal year end 1997 position in telecommunications
stocks as a further source of expansion capital.
On February 1, 1997, the 16-lane expansion from 32 to 48 lanes at
Bowl America Dranesville began operation. During the fourth
quarter of fiscal 1997, the Company closed two centers which, at
the expiration of their leases, were operating with negative
cash flows. A center was closed in May 1995 at the expiration of
its lease.
Results of Operations
As noted above, the Company operated two fewer centers in the
fiscal 1998 period than in the prior year period and one fewer
in the first quarter of fiscal 1997 than in fiscal 1996. All
comparisons in this report are significantly influenced by the
change in the number of operating locations.
There was a profit of less than $.01 per share in the current
quarter versus a $.02 per share loss in the first quarter of
last year. Over half of the improvement in earnings is a
result of closing the two unprofitable centers. Operating
revenues increased 1% this quarter versus a decrease of 5%
in the first quarter last year. Linage for the period was
up, however the average game rate decreased mainly due to our
"Rolling Rewards" summer promotion where we rewarded students
with a free game for each "A" on their report cards. Amusement
game income increased substantially due to the installation of
more current and technologically advanced games.
While food and beverage sales in total were down slightly, at
comparable centers sales increased in large part because of
the increased traffic during our summer promotion.
<PAGE>
Operating expenses excluding depreciation and amortization
decreased 3% in the current quarter versus a 6% decrease in
in the comparable quarter last year. Increases in depreciation
and amortization expense of 10% in the currect quarter relates
to the Dranesville expansion and glow-in the-dark equipment
and amusement game purchases.
Employee compensation and benefits were down 2% this period
versus a 6% increase in the prior year period. Advertising
costs decreased 9% from the prior year period and decreased
12% in the first quarter a year ago. Media campaigns
utilizing newspaper and direct mail instead of more expensive
television advertising have been largely responsible for the
decrease. Supplies and services expense increased partially
due to costs of glow-in-the-dark and amusement game supplies.
Utility costs decreased 5% in the current quarter compared
to a 6% decrease in the prior year quarter.
Rent expense decreased 9% in the current period and 15% in
the prior year period, the decrease mainly a result of the
change in the number of leased locations.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
September 28, 1997
PART II - OTHER INFORMATION
An 8K was filed in August 1997, 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 12, 1997 Leslie H. Goldberg
Date Leslie H. Goldberg
President
November 12, 1997 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-28-1998
<PERIOD-END> SEP-28-1997
<CASH> 1,827
<SECURITIES> 4,542
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 901
<CURRENT-ASSETS> 8,888
<PP&E> 44,032
<DEPRECIATION> 20,566
<TOTAL-ASSETS> 37,471
<CURRENT-LIABILITIES> 2,215
<BONDS> 0
0
0
<COMMON> 566
<OTHER-SE> 32,362
<TOTAL-LIABILITY-AND-EQUITY> 37,471
<SALES> 1,586
<TOTAL-REVENUES> 5,417
<CGS> 512
<TOTAL-COSTS> 5,564
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12)
<INCOME-TAX> (13)
<INCOME-CONTINUING> 1
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
