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 26, 1999 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 23, 2000
Class A Common Stock, 3,641,741
$.10 par value
Class B Common Stock 1,505,826
$.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 26, December 27, December 26, December 27,
1999 1998 1999 1998
_______________________ __________________________
<S> <C> <C> <C> <C>
Operating Revenues
Bowling and other $5,302,801 $5,145,267 $ 9,562,058 $ 8,982,858
Food, beverage and
merchandise sales 2,071,108 2,027,273 3,778,890 3,596,908
_________ _________ __________ __________
7,373,909 7,172,540 13,340,948 12,579,766
Operating Expenses
Compensation and benefits 2,994,890 2,971,699 5,853,013 5,739,218
Cost of bowling and other 1,382,755 1,349,090 2,882,232 2,800,601
Cost of food and mdse sales 663,416 651,974 1,190,594 1,160,432
Depreciation and
amortization 563,073 563,394 1,122,458 1,143,905
General and administrative 170,710 239,585 363,842 451,479
_________ _________ __________ __________
5,774,844 5,775,742 11,412,139 11,295,635
Operating Income 1,599,065 1,396,798 1,928,809 1,284,131
Interest and dividend
income 176,858 163,696 378,915 328,314
_________ _________ __________ __________
Earnings before provision
for income taxes 1,775,923 1,560,494 2,307,724 1,612,445
Provision for income taxes 635,157 550,398 820,197 563,868
_________ _________ __________ __________
Net Earnings $1,140,766 $1,010,096 $ 1,487,527 $ 1,048,577
Earnings per share $.22 $.18 $.29 $.19
Weighted average shares
outstanding 5,157,567 5,526,550 5,190,267 5,589,024
Dividends paid $543,645 $559,849 $1,095,408 $1,125,499
Per share, Class A $.105 $.10 $.21 $.20
Per share, Class B $.105 $.10 $.21 $.20
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $1,140,766 $1,010,096 $ 1,487,527 $ 1,048,577
Other comprehensive
earnings-net of tax
Unrealized gain on avail-
able for sale securities 645,520 1,944,417 837,639 2,134,055
_________ _________ _________ _________
Comprehensive earnings $1,786,286 $2,954,513 $ 2,325,166 $ 3,182,632
</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 26, 1999 June 27, 1999
________________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 2,272,331 $ 1,557,225
Short-term investments 8,993,699 7,690,576
Inventories 702,079 618,875
Prepaid expenses and other 461,341 482,279
Income taxes refundable - 89,194
Deferred income taxes 15,000 15,000
__________ __________
Total Current Assets 12,444,450 10,453,149
Property, Plant and Equipment
less accumulated depreciation of
$24,716,595 and $23,703,234 20,108,275 20,908,976
Other Assets
Marketable equity securities 10,857,985 9,506,955
Cash surrender value-life insurance 339,666 384,925
Other long-term assets 257,386 493,931
__________ __________
TOTAL ASSETS $44,007,762 $41,747,936
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 26, 1999 June 27, 1999
_________________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 773,734 $ 738,040
Accrued expenses and payroll ded 630,645 977,400
Income taxes payable 415,876 -
Other current liabilities 1,521,530 349,051
__________ __________
Total Current Liabilities 3,341,785 2,064,491
Noncurrent Deferred Income Taxes 4,719,391 4,206,000
TOTAL LIABILITIES 8,061,176 6,270,491
__________ __________
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 -
3,641,741 and 3,746,171 shares 364,173 374,617
Class B issued and outstanding -
1,505,826 and 1,508,716 150,582 150,871
Additional paid-in capital 4,161,920 4,265,443
Unrealized gain on securities
available-for-sale, 6,123,569 5,285,930
Retained earnings 25,146,342 25,400,584
__________ __________
TOTAL STOCKHOLDERS' EQUITY $35,946,586 $35,477,445
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $44,007,762 $41,747,936
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 26, 1999 AND DECEMBER 27, 1998
<CAPTION>
December 26, December 27,
1999 1998
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $1,487,527 $1,048,577
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,122,458 1,143,905
Changes in assets and liabilities
Increase in inventories (83,204) (39,353)
Decrease (increase) in prepaid & other 20,938 (83,725)
Decrease in other long-term assets 281,804 53,529
Increase (decrease) in accounts payable 35,694 (339,117)
Decrease in accrued expenses
and payroll deductions (346,755) (22,871)
Increase in income taxes payable 505,070 8,476
Increase in other current liabilities 1,173,810 1,076,078
_________ _________
Net cash provided by operating activities $4,197,342 $2,845,499
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (321,757) (609,882)
Net (increase) decrease in
short-term investments (1,303,123) 2,803
_________ _________
Net cash used in investing activities (1,624,880) (607,079)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,095,408) (1,125,499)
Purchase of Class A & B Common Stock (761,948) (1,581,832)
_________ _________
Net cash used in financing activities (1,857,356) (2,707,331)
_________ _________
Net Increase (Decrease) in Cash
and Equivalents 715,106 (468,911)
Cash and Equivalents, Beginning of Year 1,557,225 1,944,462
_________ _________
Cash and Equivalents, End of Period $2,272,331 $1,475,551
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 315,127 $ 558,683
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Twenty-six Weeks Ended
December 26, 1999
1. Consolidated Financial Statements
The consolidated balance sheets as of December 26, 1999, and the
consolidated statements of earnings and comprehensive earnings and
cash flows for the three-month and six-month periods ended December 26,
1999 and December 27, 1998, 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. The information included in this
Form 10-Q should be read in conjunction with the financial statements and
notes thereto for the year ended June 27, 1999 included in the Company's
Annual Report on Form 10-K.
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 26,
1999, 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 27, 1999.
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
December 26, 1999 were:
3,946 shares of Alltel
9,291 shares of American Telephone & Telegraph
18,784 shares of Bell Atlantic
27,572 shares of Bell South
8,028 shares of Lucent Technologies
5,612 shares of Media One
45,580 shares of SBC
32,000 shares of SprintFon
8,000 shares of SprintPCS
5,765 shares of US West
13,560 shares of Vodafone/AirTouch
<PAGE>
BOWL AMERICA INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
December 26, 1999
Liquidity and Capital Resources
Short-term investments, consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $11,266,000 at the end of the second
quarter of fiscal 2000 or $2,262,000 higher than at the beginning
of the quarter.
Since July 1999, the Company has expended $762,000 for the purchase of
107320 shares of its previously outstanding common stock. Subsequent
to the end of the quarter, an additional 38,896 shares were purchased
at a cost of $287,000.
The Company is actively seeking property for development of additional
centers. Cash and cash flow are sufficient to finance all currently
planned purchases and construction. The Company's marketable securities,
primarily in telecommunications stocks are another source of expansion
capital.
These securities are carried at their fair value on the last day of the
quarter. For the six-month period ending December 26, 1999, the
market value increased by approximately $2,209,000 resulting in an
unrealized after tax gain of $1,369,000.
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.
The Company closed a center operating with a negative cash flow in May 1999.
Results of Operations
There was a $.22 per share profit for the thirteen-week period ending
December 26, 1999, versus an $.18 per share profit for the thirteen weeks
ended December 27, 1998. For the current twenty-six week period
earnings per share were $.29 compared to $.19 for the comparable period
a year ago.
<PAGE>
Operating revenues increased 6% for the current six-month period
versus a decrease of 1% in the comparable period a year ago.
Open play and special event bowling improved and the average game
rate was up over the prior year period minimizing the effect of
decreased league bowling. Increases in ancillary revenues are the
result of the higher casual bowler traffic. However, winter storms
since the end of the quarter will affect linage and revenues in the
third quarter.
For the six-month period food, beverage and merchandise sales were up
5% versus a 2% decrease in the prior year six-month period. Cost of
sales increased due to the higher sales.
Operating expenses excluding depreciation and amortization increased 1%
in the current six-month period versus a 4% decrease in the comparable
period last year. Employee compensation and benefits were up 2% this period
versus no change in the prior year period.
In the current six-month period supplies and services expense decreased 2%.
Advertising costs increased 15% from the prior six-month period partially
due to support of glow-in-the-dark bowling. Equipment expense increased in
the current year by 5% primarily due to the higher costs associated with
bowling pins and rental shoes. Utility costs were flat in the current
six-month period. Weather related utility costs and snow removal costs
could influence third quarter results.
Depreciation and amortization expense decreased 2% in the current year
period versus an increase of 1% in the comparable period last year.
Rent expense decreased 12% in the current period mainly due to the closing
of a leased center.
YEAR 2000
Bowl America has experienced no Year 2000 related problems to date with
either internal operations or vendors.
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
December 26, 1999
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 8, 2000 Leslie H. Goldberg
Date Leslie H. Goldberg
President
February 8, 2000 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> 6-MOS
<FISCAL-YEAR-END> JUl-03-2000
<PERIOD-END> DEC-26-1999
<CASH> 2,272
<SECURITIES> 10,858
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 702
<CURRENT-ASSETS> 12,444
<PP&E> 44,825
<DEPRECIATION> 24,717
<TOTAL-ASSETS> 44,008
<CURRENT-LIABILITIES> 3,342
<BONDS> 0
0
0
<COMMON> 515
<OTHER-SE> 35,432
<TOTAL-LIABILITY-AND-EQUITY> 44,008
<SALES> 3,779
<TOTAL-REVENUES> 13,341
<CGS> 1,191
<TOTAL-COSTS> 11,412
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,308
<INCOME-TAX> 820
<INCOME-CONTINUING> 1,488
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,488
<EPS-BASIC> .29
<EPS-DILUTED> .29
</TABLE>
Tenth Consecutive Quarterly Earnings Increase at Bowl America
Bowl America Inc., the Alexandria, Virginia based operator of bowling
centers, reported a 22% increase in second quarter per share earnings,
from $.18 to $.22. This was the tenth consecutive quarter that earnings
have increased over the comparable prior year quarter and it followed the
best first quarter in the Company's history. Earnings for the first half
of the fiscal year stand at $.29 compared to $.19 last year. EBIDTA for
the past 12 months of $8.2 Million was a record.
Renewed interest in the sport by a broader audience, partially due to
Glow-in-the-Dark bowling, has generated an upturn in traffic for open
play and special event games and with it commensurate increases in
food, beverage and merchandise sales. This has offset the decline in
league bowling.
Winter storms since the end of the quarter will affect lineage and
revenues in the usually busiest third quarter. However, the fourth
quarter will include league make-up games and an additional week of
income due to the 53-week accounting year.
The Company today paid a dividend at the new rate of $.11 per share.
This is the twenty-eighth consecutive year of increased dividend
payments.
Bowl America operates 22 bowling centers in Maryland, Virginia and
Florida and its stock trades on the American Stock Exchange with the
symbol BWL.A. The Company's SEC Form 10-Q is available at www.sec.gov
on the EDGAR System.
