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 December 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
January 26, 1997
Class A Common Stock, 4,145,410
$.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 Twenty-six Weeks Ended
December 29, December 31, December 29, December 31,
1996 1995 1996 1995
_______________________ __________________________
<S> <C> <C> <C> <C>
Operating Revenues
Bowling and other $5,056,951 $5,172,788 $ 8,800,684 $ 8,996,646
Food and merchandise sales 2,093,810 2,249,369 3,715,566 4,093,324
_________ _________ __________ __________
7,150,761 7,422,157 12,516,250 13,089,970
Operating Expenses
Compensation and benefits 3,025,047 3,108,679 5,865,894 6,140,935
Cost of bowling and other 1,555,266 1,581,697 3,145,660 3,265,035
Cost of food and mdse sales 693,570 746,615 1,266,227 1,356,183
Depreciation and
amortization 502,741 506,447 1,003,621 998,030
General and administrative 184,486 201,548 366,011 401,443
_________ _________ __________ __________
5,961,110 6,144,986 11,647,413 12,161,626
Operating Income 1,189,651 1,277,171 868,837 928,344
Interest and dividend
income 124,746 154,579 246,213 295,213
_________ _________ __________ __________
Earnings before provision
for income taxes 1,314,397 1,431,750 1,115,050 1,223,557
Provision for income taxes 491,356 535,753 407,624 448,376
_________ _________ __________ __________
Net Earnings $ 823,041 $ 895,997 $ 707,426 $ 775,181
Earnings per share $.14 $.16 $.12 $.14
Weighted average shares
outstanding 5,682,156 5,742,656 5,682,306 5,742,791
Dividends paid $539,834 $545,553 $1,077,881 $1,091,146
Per share, Class A $.095 $.095 $.19 $.19
Per share, Class B $.095 $.095 $.19 $.19
</TABLE>
The operating results for these thirteen (13) and twenty-six (26) 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>
December 29, 1996 June 30, 1996
_______________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 2,587,293 $ 2,120,862
Short-term investments 6,386,226 6,760,166
Inventories 716,906 685,777
Prepaid expenses and other 535,497 736,659
Income taxes refundable - 204,662
__________ __________
Total Current Assets 10,225,922 10,508,126
Property, Plant and Equipment
less accumulated depreciation of
$20,080,568 and $19,268,110 23,118,237 22,680,521
Other Assets
Noncurrent marketable securities 3,973,566 3,855,282
Cash surrender value-life insurance 336,385 332,162
Other long-term assets 218,932 525,163
__________ __________
TOTAL ASSETS $37,873,042 $37,901,254
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 29, 1996 June 30, 1996
_______________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 592,725 $ 1,447,153
Accrued expenses and payroll ded 838,138 906,239
Income taxes payable 104,005 -
Other current liabilities 1,436,643 388,029
Current deferred income taxes 114,000 114,000
__________ __________
Total Current Liabilities 3,085,511 2,855,421
Noncurrent Deferred Income Taxes 2,186,948 2,142,000
TOTAL LIABILITIES 5,272,459 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 -
4,145,410 and 4,146,310 shares 414,541 414,631
Class B issued and outstanding -
1,536,146 153,614 153,614
Additional paid-in capital 4,908,288 4,908,819
Unrealized gain on securities
available-for-sale, 1,931,548 1,858,212
Retained earnings 25,192,592 25,568,557
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,600,583 $32,903,833
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $37,873,042 $37,901,254
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 29, 1996 AND DECEMBER 31, 1995
<CAPTION>
December 29, December 31,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 707,426 $ 775,181
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,003,621 998,030
Loss (gain) on sale/abandonment of
assets net 3,330 (5,634)
Changes in assets and liabilities
Increase in inventories (31,129) (119,125)
Decrease (increase) in prepaid and other 201,162 (53,165)
Decrease in other long-term assets 302,008 230,670
Decrease in accounts payable (854,428) (71,217)
Decrease in accrued expenses
and payroll deductions (68,101) (42,408)
Increase in income taxes payable 104,005 -
Decrease in income taxes refundable 204,662 290,862
Increase in other current liabilities 1,048,614 1,054,172
_________ _________
Net cash provided by operating activities $2,621,170 $3,057,366
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (1,444,667) (342,249)
Net decrease (increase) in
short-term investments 373,940 (120,336)
_________ _________
Net cash used in investing activities (1,070,727) (462,585)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,077,881) (1,091,146)
Purchase of Class A Common Stock (6,131) (3,601)
_________ _________
Net cash used in financing activities (1,084,012) (1,094,747)
_________ _________
Net Increase in Cash and Equivalents 466,431 1,500,034
Cash and Equivalents, Beginning of Year 2,120,862 973,678
_________ _________
Cash and Equivalents, End of Period $2,587,293 $2,473,712
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 98,957 $ 157,514
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Twenty-six Weeks Ended
December 29, 1996
1. Consolidated Financial Statements
The consolidated balance sheets as of December 29, 1996, and the
consolidated statements of earnings and cash flows for the three-month
and six-month periods ended December 29, 1996 and December 31, 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 December 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>
BOWL AMERICA INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
December 29, 1996
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $8,974,000 at the end of the second
quarter of fiscal 1997 or $1,646,000 higher than at the beginning
of the quarter. The increase relates primarily to the seasonal
nature of bowling participation.
Expansion of our Dranesville bowling center from 32 lanes to 48 lanes,
including installing the most up-to-date autoscoring system, will be
completed in the third quarter. Through the end of the second quarter
the Company had expended approximately $1.5 million of the $2.1 million
budgeted for the project, with the remaining $600,000 expected to be
paid in the third quarter.
Additional expenditures are also planned as we are installing "Cosmic
Bowling", a glow-in-the-dark, laser light, stereo sound system, at
several of our locations and we are continuing 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 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 $.14 per share profit for the thirteen-week period ending
December 29, 1996, versus a $.16 per share profit for the thirteen weeks
ended December 31, 1995. For the current twenty-six week period
earnings per share were $.12 compared to $.14 for the comparable
period a year ago.
<PAGE>
Operating revenues decreased 7% for the current six-month period,
versus a decrease of 6% in the comparable period a year ago.
An increase in the average price per game helped to offset the
effect of the decrease in games during the twenty-six week period.
The Company has begun 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.
Food and beverage sales were down in the current period and cost of
food and beverage sales decreased in response to the reduction in sales.
Operating expenses excluding depreciation and amortization decreased 5%
in the current period versus a 3% decrease in the comparable period
last year. Employee compensation and benefits were down 4% this period
versus a 6% increase in the prior year period.
Advertising costs decreased 21% from the prior year period as we used
print media to a greater extent than in the previous period. Utility
costs decreased 5% in the current period compared to a 6% decrease in
the prior year period. The decrease in the prior period reflected the
decrease in the number of centers in operation.
Rent expense decreased 10% in the current twenty-six week period and
11% 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 1% in the
current period relate primarily to the capital expenditures made in
the last nine months. The 2% increase in the comparable period last
year was due mainly to the Gaithersburg location being open for the
full period.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
December 29, 1996
PART II - OTHER INFORMATION
No material unusual charges or credits to income or changes in
independent accountants occurred during the quarter which would
require the filing of a Form 8-K.
<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
February 11, 1997 Leslie H. Goldberg
Date Leslie H. Goldberg
President
February 11, 1997 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-29-1997
<PERIOD-END> DEC-29-1996
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<SECURITIES> 3,974
<RECEIVABLES> 0
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<INVENTORY> 716
<CURRENT-ASSETS> 10,226
<PP&E> 43,098
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0
0
<COMMON> 568
<OTHER-SE> 32,032
<TOTAL-LIABILITY-AND-EQUITY> 37,873
<SALES> 3,716
<TOTAL-REVENUES> 12,516
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<TOTAL-COSTS> 11,647
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