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 October 1, 2000 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 29, 2000
Class A Common Stock, 3,578,507
$.10 par value
Class B Common Stock 1,430,085
$.10 par value
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Thirteen Weeks Ended
October 1, September 26,
2000 1999
_______________________
<S> <C> <C>
Operating Revenues
Bowling and other $4,525,085 $4,259,257
Food, beverage and merchandise sales 1,869,082 1,707,782
_________ _________
6,394,167 5,967,039
Operating Expenses
Compensation and benefits 3,099,453 2,858,123
Cost of bowling and other 1,436,206 1,499,477
Cost of food,beverage and mdse sales 619,554 527,178
Depreciation and amortization 493,845 559,385
General and administrative 210,643 193,132
_________ _________
5,859,701 5,637,295
Operating Income 534,466 329,744
Interest and dividend income 400,339 202,057
_________ _________
Earnings before provision
for income taxes 934,805 531,801
Income tax provision 335,595 185,040
_________ _________
Net Earnings $ 599,210 $ 346,761
Earnings per share $ .12 $ .06*
Weighted average shares
outstanding 5,095,998 5,484,115
Dividends paid $566,798 $551,763
Per share, Class A $.11 $.10*
Per share, Class B $.11 $.10*
*Restated for 5% stock dividend paid July 26, 2000
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Unaudited)
Net Earnings $ 599,210 $346,761
Other comprehensive earnings net of tax
Unrealized (loss) gain on available
-for-sale securities (941,880) 192,119
_______ _______
Comprehensive (loss)earnings $(342,670) $538,880
</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
(Unaudited)
<TABLE>
<CAPTION>
October 1, 2000 July 2, 2000
__________________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,160,816 $ 1,523,242
Short-term investments 6,166,037 8,873,682
Inventories 802,328 657,628
Prepaid expenses and other 568,307 440,318
__________ __________
Total Current Assets 8,697,488 11,494,870
Property, Plant and Equipment
less accumulated depreciation of
$25,853,762 and $25,416,493 21,557,932 19,367,989
Other Assets
Marketable equity securities 7,673,399 9,168,446
Cash surrender value-life insurance 390,976 388,184
Other long-term assets 258,162 291,810
__________ __________
TOTAL ASSETS $38,577,957 $40,711,299
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 671,488 $ 688,213
Accrued expenses 853,242 893,493
Income taxes payable 282,988 129,390
Deferred income taxes 23,000 23,000
Other current liabilities 704,416 430,808
__________ __________
Total Current Liabilities 2,535,134 2,164,904
Noncurrent Deferred Income Taxes 3,124,833 3,678,000
TOTAL LIABILITIES 5,659,967 5,842,904
__________ __________
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 -
3,579,067 and 3,406,070 shares 357,907 340,607
Class B issued and outstanding -
1,430,085 and 1,488,826 143,008 148,883
Additional paid-in capital 4,036,329 3,959,169
Unrealized gain on securities
available-for-sale, net of tax 4,304,541 5,246,421
Retained earnings 24,076,205 25,173,315
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,917,990 $34,868,395
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $38,577,957 $40,711,299
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THIRTEEN WEEKS ENDED OCTOBER 1, 2000 AND SEPTEMBER 26, 1999
<CAPTION>
October 1, September 26,
2000 1999
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 599,210 $ 346,761
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 493,845 559,385
Changes in assets and liabilities
Increase in inventories (144,700) (167,469)
Increase in prepaid and other (127,989) (83,428)
Decrease in other long-term assets 30,856 235,054
Decrease in accounts payable (16,725) (209,417)
Decrease in accrued expenses (40,251) (135,604)
Increase in income taxes payable 153,598 184,570
Increase in other current liabilities 274,949 234,025
_________ _________
Net cash provided by
operating activities $1,222,793 $ 963,877
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (2,683,788) (108,715)
Net decrease in short-term investments 2,707,645 447,734
_________ _________
Net cash provided by
investing activities 23,857 339,019
_________ _________
Cash flows from financing activities
Payment of cash dividends (566,798) (551,763)
Purchase of Class A common stock (902) (526,903)
Purchase of Class B common stock (1,041,376) (20,230)
_________ _________
Net cash used in financing activities (1,609,076) (1,098,896)
_________ _________
Net (Decrease) Increase in Cash
and Equivalents (362,426) 204,000
Cash and Equivalents, Beginning of Qtr 1,523,242 1,557,225
_________ _________
Cash and Equivalents, End of Quarter $1,160,816 $1,761,225
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 181,997 $ 470
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirteen Weeks Ended
October 1, 2000
1. Consolidated Financial Statements
The accompanying unaudited consolidated financial statements of Bowl
America Incorporated and subsidiaries (the "Company"), have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. The consolidated balance sheet as of July 2, 2000
has been derived from the Company's July 2, 2000 audited financial
statements. Certain information and note disclosures normally included
in the annual financial statements, prepared in accordance with generally
accepted accounting principles, have been condensed or omitted pursuant to
those rules and regulations, although the Company believes that the
disclosures made are adequate to make the information presented not
misleading.
In the opinion of management, the accompanying unaudited consolidated
financial statements reflect all adjustments, and reclassifications (all of
which are of a normal recurring nature) that are necessary for the fair
presentation for the periods presented. It is suggested that these
consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's latest annual report to the Securities and Exchange Commission
on Form 10-K for the year ended July 2, 2000.
2. Marketable Equity Securities
Marketable equity securities are carried at fair value in accordance with
the provisions of SFAS No. 115.
The Telecommunications stocks included in the portfolio as of October 1,
2000 were:
3,946 shares of Alltel
14,316 shares of American Telephone & Telegraph
27,572 shares of Bell South
8,028 shares of Lucent Technologies
9,969 shares of Qwest Communications
45,580 shares of SBC
32,000 shares of SprintFon
16,000 shares of SprintPCS
18,784 shares of Verizon
13,560 shares of Vodafone/Airtouch
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
October 1, 2000
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $7,327,000 at the end of the first
quarter of fiscal 2001 or $3,070,000 lower than at the beginning
of the quarter.
During the quarter the Company purchased 130,172 shares of previously
outstanding Class B common stock for $1,042,000 and spent $2,250,000
for the purchase of Bowl America Glen Burnie at the expiration of its
lease.
Due to feasibility issues the contract for a site mentioned in previous
reports was terminated. The Company continues to seek viable properties.
Cash and cash flow are sufficient to finance all currently planned purchases
and construction. The Company has maintained its fiscal year end 2000
position in marketable securities, primarily telecommunications stocks,
as a further source of expansion capital.
These securities are carried at their fair value on the last day of the
quarter. For the three-month period ended October 1, 2000, the market
value decreased by $1,495,000 to approximately $7.7 Million. During the
quarter the Company received $219,000 from the AT&T/Media One merger.
While no factors requiring a change in the dividend rate are apparent,
the Board of Directors decides the amount and timing of any dividend
at its quarterly meeting based on its appraisal of the state of the
business and its estimate of future opportunities.
In June 2000, the Board of Directors declared a 5% stock dividend which
was paid on July 26, 2000. Applicable share and per share data for
prior periods have been restated for the effect of the split.
Subsequent to the end of the quarter, the Company closed a center operating
at break-even.
Results of Operations
For the second year in a row, the typically seasonally slow months of
July and August produced profits. Both league and open play linage and
earnings were up over the previous year, but it should be noted that the
increases are not necessarily indicative of results to be expected for
the year.
There was a $.12 per share profit for the thirteen-week period ending
October 1, 2000,the highest first quarter in the Company's history, which
exceeded the prior year first quarter record of $.06 per share. Of the
current year earnings $.027 per share is attributable to the income
received from the AT&T/Media One merger mentioned above. In last year's
first quarter funds received from the Vodafone/AirTouch merger contributed
$.006 per share to net earnings.
Operating revenues increased 7% in the current period versus an increase
of 10% in the prior year period. Food, beverage and merchandise sales were
up 9% in both periods and costs were up due to the higher volume of traffic.
Operating expenses excluding depreciation and amortization increased 4%
in the current quarter versus a 3% increase in the comparable quarter
last year. Advertising costs decreased over 30% from the prior year period.
Last year our costs were higher because we increased our television
advertising in support of glow-in-the-dark bowling. Equipment expense
decreased 10% in the current year after a 10% increase last year. Costs
associated with bowling pins and rental shoes are lower this year than last
year through the same period. Employee compensation and benefits expenses
were up 8% this year primarily driven by costs for overtime pay resulting
from the tight labor market. Last year this category of expense was up 3%.
Depreciation and amortization expense decreased 12% in the current year
quarter and 4% in the comparable period last year as several large
capital assets have reached full depreciation. Rent expense decreased 15%
in the current period and 12% in the prior year period due to operating
fewer leased locations.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
October 1, 2000
PART II - OTHER INFORMATION
An 8K was filed in July 2000, 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 14, 2000 Leslie H. Goldberg
Date Leslie H. Goldberg
President
November 14, 2000 Cheryl A. Dragoo
Date Cheryl A. Dragoo
Controller
