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 March 30, 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
April 27, 1997
Class A Common Stock, 4,142,448
$.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 Thirty-nine Weeks Ended
March 30, March 31, March 30, March 31,
1997 1996 1997 1996
_______________________ __________________________
<S> <C> <C> <C> <C>
Operating Revenues
Bowling and other $6,062,748 $5,872,127 $14,863,432 $14,868,773
Food and merchandise sales 2,439,554 2,462,458 6,155,120 6,555,782
_________ _________ __________ __________
8,502,302 8,334,585 21,018,552 21,424,555
Operating Expenses
Compensation and benefits 3,168,017 3,118,268 9,033,911 9,259,203
Cost of bowling and other 1,597,975 1,651,220 4,743,635 4,916,255
Cost of food and mdse sales 756,050 776,845 2,022,277 2,133,028
Depreciation and
amortization 509,241 514,657 1,512,862 1,512,687
General and administrative 188,064 209,337 554,075 610,780
_________ _________ __________ __________
6,219,347 6,270,327 17,866,760 18,431,953
Operating Income 2,282,955 2,064,258 3,151,792 2,992,602
Interest and dividend
income 197,137 180,021 443,350 475,234
_________ _________ __________ __________
Earnings before provision
for income taxes 2,480,092 2,244,279 3,595,142 3,467,836
Provision for income taxes 934,208 844,466 1,341,832 1,292,842
_________ _________ __________ __________
Net Earnings $1,545,884 $1,399,813 $ 2,253,310 $ 2,174,994
Earnings per share $.28 $.24 $.40 $.38
Weighted average shares
outstanding 5,681,536 5,740,938 5,682,049 5,742,174
Dividends paid $541,534 $545,552 $1,619,415 $1,636,698
Per share, Class A $.095 $.095 $.285 $.285
Per share, Class B $.095 $.095 $.285 $.285
</TABLE>
The operating results for these thirteen (13) and thirty-nine (39) week
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>
March 30, 1997 June 30, 1996
_______________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 2,041,175 $ 2,120,862
Short-term investments 8,876,684 6,760,166
Inventories 669,163 685,777
Prepaid expenses and other 933,261 736,659
Income taxes refundable - 204,662
__________ __________
Total Current Assets 12,520,283 10,508,126
Property, Plant and Equipment
less accumulated depreciation of
$20,375,500 and $19,268,110 23,646,628 22,680,521
Other Assets
Noncurrent marketable securities 3,859,854 3,855,282
Cash surrender value-life insurance 336,385 332,162
Other long-term assets 218,932 525,163
__________ __________
TOTAL ASSETS $40,582,082 $37,901,254
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 30, 1997 June 30, 1996
_______________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 716,477 $ 1,447,153
Accrued expenses and payroll ded 1,211,671 906,239
Income taxes payable 547,346 -
Other current liabilities 2,314,641 388,029
Current deferred income taxes 114,000 114,000
__________ __________
Total Current Liabilities 4,904,135 2,855,421
Noncurrent Deferred Income Taxes 2,143,737 906,239
TOTAL LIABILITIES 7,047,872 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 -
4,145,380 and 4,146,310 shares 414,538 414,631
Class B issued and outstanding -
1,536,146 153,614 153,614
Additional paid-in capital 4,908,270 4,908,819
Unrealized gain on securities
available-for-sale, net of tax 1,861,047 1,858,212
Retained earnings 26,196,741 25,568,557
__________ __________
TOTAL STOCKHOLDERS' EQUITY $33,534,210 $32,443,501
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $40,582,082 $37,901,254
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED MARCH 30, 1997 AND MARCH 31, 1996
<CAPTION>
March 30, March 31,
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $2,253,310 $2,174,994
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,512,862 1,512,687
Gain on disposition of assets-net 25,301 -
Changes in assets and liabilities
Decrease in inventories 16,614 38,672
Increase in prepaid and other (196,602) (344,775)
Decrease in other long-term assets 302,008 231,467
(Decrease) increase in accounts payable (730,676) 194,584
Increase (decrease) in accrued
expenses and payroll deductions 305,432 (34,136)
Increase in income taxes payable 547,346 339,813
Decrease in income taxes refundable 204,662 444,626
Increase in other current liabilities 1,926,612 1,935,757
_________ _________
Net cash provided by operating activities $6,166,869 $6,493,689
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (2,504,270) (551,730)
Net increase in short-term investments (2,116,518) (3,078,262)
_________ _________
Net cash used in investing activities (4,620,788) (3,629,992)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,619,415) (1,636,698)
Purchase of Class A Common Stock (6,353) (257,000)
_________ _________
Net cash used in financing activities (1,625,768) (1,893,698)
_________ _________
Net (Decrease) Increase in Cash and
Cash Equivalents (79,687) 969,999
Cash and Equivalents, Beginning of Year 2,120,862 973,678
_________ _________
Cash and Equivalents, End of Period $2,041,175 $1,943,677
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 589,824 $ 508,036
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirty-nine Weeks Ended
March 30, 1997
1. Consolidated Financial Statements
The consolidated balance sheets as of March 30, 1997, and
the consolidated statements of earnings and cash flows for the
three-month and nine-month periods ended March 30, 1997 and
March 31, 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 March 30,
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 30, 1996.
2. New Accounting Pronouncement
The Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share" in February 1997. This standard will be
effective for the Company beginning in fiscal year 1998. The
proforma effect of adopting this standard has no impact on the
earnings per share calculation for the three-month periods ended
March 30, 1997 and March 31, 1996, and the nine-month periods
ended March 31, 1997 and March 31, 1996.
<PAGE>
BOWL AMERICA INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
March 30, 1997
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $10,918,000 at the end of the third
quarter of fiscal 1997 or $1,944,000 higher than at the beginning
of the quarter. The increase relates primarily to the seasonal
nature of bowling participation.
Although remodeling of the snack bar area at our Dranesville location
is continuing, the 16-lane expansion was completed in the third
quarter and it is generating additional cash flow. During fiscal 1997
approximately $1.6 million will be expended for the project.
"Extreme Bowling", a glow-in-the-dark bowling experience, augmented by
laser lights and high energy stereo sound, was started at 5 locations
during the third quarter where it has generated increased linage and
food and merchandise sales. We are currently installing the equipment
in an additional two centers and may include more centers in the
future. We are continuing to modernize other locations. Cash and
cash flow from operations are sufficient to finance all currently
planned purchases and construction. The Company has maintained its
fiscal year end 1996 position in telecommunications stock as a
further source of expansion capital.
During the fourth quarter the Company will close two centers which are
operating with negative cash flow at the expiration of their leases.
On September 1, 1994, the Company opened Bowl America Gaithersburg,
a 48-lane center with a full service diner style restaurant. A center
was closed in May 1995 at the expiration of its lease.
Results of Operations
There was a $.28 per share profit for the thirteen-week period ending
March 30, 1997, versus $.24 per share profit for the thirteen weeks
ending March 31, 1996. For the current thirty-nine week period
earnings per share were $.40 compared to $.38 for the same period a
year ago.
<PAGE>
Operating revenues decreased 2% for the current nine-month period,
versus a decrease of 8% in the comparable period a year ago. Heavy
use of promotional pricing in the prior year caused a lower average
game rate but created increased linage and food and beverage sales.
In the current year the average game rate was up but the loss of
traffic depressed food and merchandise sales. In the prior year
the Blizzard of '96 and the extreme cold took a heavy toll on our
northern market during the third quarter.
The Company is continuing a program of replacing leased amusement
game machines with owned machines. Year-to-date this change has
resulted in an increase in game revenue at the affected locations.
Operating expenses decreased 3% in the current nine-month period
versus a 5% decrease in the prior year. Employee compensation
and benefits were down 2% this period versus a 5% decrease in the
prior year period, the change in the prior year resulting mainly
from the difference in the number of centers in operation.
Maintenance expense for the nine-month period was down 9% versus a
decline of 3% last year which included unusually high snow removal
costs. Advertising costs decreased 17% in the current nine-month
period. Utility costs decreased 4% in the current thirth-nine week
period versus a decrease of 2% in the prior year period.
Rent expense decreased 9% in the current nine-month period and 11%
in the prior period, the decrease a result of reduced sales at some
leased locations. Depreciation and amortization expenses were flat
for the thirty-nine week period versus an increase of 3% in the
prior period. The increase last year was due mainly to the Gaithers-
burg location being open for the full period.
<PAGE>
S.E.C. FORM 10-Q
March 30, 1997
PART II - OTHER INFORMATION
An 8-K was filed in March 1997 referring to the resignation of
a member of the Board of Directors.
<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
May 14, 1997 Leslie H. Goldberg
Date Leslie H. Goldberg
President
May 14, 1997 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller
<TABLE> <S> <C>
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<CURRENCY> U.S. DOLLARS
<EXCHANGE-RATE> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-29-1997
<PERIOD-END> MAR-30-1997
<CASH> 2,041
<SECURITIES> 3,859
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 669
<CURRENT-ASSETS> 12,520
<PP&E> 44,032
<DEPRECIATION> 20,376
<TOTAL-ASSETS> 40,582
<CURRENT-LIABILITIES> 4,094
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0
0
<COMMON> 568
<OTHER-SE> 32,966
<TOTAL-LIABILITY-AND-EQUITY> 40,582
<SALES> 6,155
<TOTAL-REVENUES> 21,019
<CGS> 2,022
<TOTAL-COSTS> 17,867
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,595
<INCOME-TAX> 1,342
<INCOME-CONTINUING> 2,253
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<NET-INCOME> 2,253
<EPS-PRIMARY> .40
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</TABLE>
