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 26, 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
April 23, 2000
Class A Common Stock, 3,384,070
$.10 par value
Class B Common Stock 1,488,826
$.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 26, March 28, March 26, March 28,
2000 1999 2000 1999
_______________________ __________________________
<S> <C> <C> <C> <C>
Operating Revenues
Bowling and other $6,253,655 $6,277,771 $15,815,713 $15,260,629
Food and merchandise sales 2,428,802 2,430,919 6,207,692 6,027,827
_________ _________ __________ __________
8,682,457 8,708,690 22,023,405 21,288,456
Operating Expenses
Compensation and benefits 3,138,923 3,110,736 8,991,936 8,849,954
Cost of bowling and other 1,445,483 1,485,810 4,327,715 4,286,411
Cost of food and mdse sales 759,114 746,054 1,949,708 1,906,486
Depreciation and
amortization 531,828 567,237 1,654,286 1,711,142
General and administrative 196,631 212,715 560,473 664,194
_________ _________ __________ __________
6,071,979 6,122,552 17,484,118 17,418,187
Operating Income 2,610,478 2,586,138 4,539,287 3,870,269
Interest and dividend
income 212,207 178,597 591,122 506,911
_________ _________ __________ __________
Earnings before provision
for income taxes 2,822,685 2,764,735 5,130,409 4,377,180
Provision for income taxes 1,015,589 986,699 1,835,786 1,550,567
_________ _________ __________ __________
Net Earnings $1,807,096 $1,778,036 $ 3,294,623 $ 2,826,613
Earnings per share $.36 $.32 $.65 $.51
Weighted average shares
outstanding 4,952,177 5,375,287 5,110,903 5,517,778
Dividends paid $566,232 $571,211 $1,661,640 $1,696,710
Per share, Class A $.11 $.105 $.32 $.305
Per share, Class B $.11 $.105 $.32 $.305
CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS
Net earnings $1,807,096 $1,778,036 $ 3,294,623 $ 2,826,613
Other comprehensive
earnings net of tax
Unrealized (loss) gain
on available-for-sale
securities (381,475) (758,868) 456,164 1,375,187
_________ _________ _________ _________
Comprehensive earnings $1,425,621 $1,019,168 $ 3,750,787 $ 4,201,800
</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 26, 2000 June 27, 1999
_______________ _____________
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,813,134 $ 1,557,225
Short-term investments 10,705,120 7,690,576
Inventories 541,917 618,875
Prepaid expenses and other 858,475 482,279
Income taxes refundable - 89,194
Deferred income taxes 15,000 15,000
__________ __________
Total Current Assets 13,933,646 10,453,149
Property, Plant and Equipment
less accumulated depreciation of
$25,185,528 and $23,703,234 19,680,820 20,908,976
Other Assets
Marketable equity securities 10,242,704 9,506,955
Cash surrender value-life insurance 339,666 384,925
Other long-term assets 257,387 493,931
__________ __________
TOTAL ASSETS $44,454,223 $41,747,936
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 26, 2000 June 27, 1999
_______________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts payable $ 833,954 $ 738,040
Accrued expenses and payroll ded 1,014,949 977,400
Income taxes payable 934,664 -
Other current liabilities 2,367,805 349,051
__________ __________
Total Current Liabilities 5,151,372 2,064,491
Noncurrent Deferred Income Taxes 4,485,585 4,206,000
TOTAL LIABILITIES 9,636,957 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 -
3,385,105 and 3,746,171 shares 338,510 374,617
Class B issued and outstanding -
1,488,826 and 1,508,716 shares 148,882 150,871
Additional paid-in capital 3,753,830 4,265,443
Unrealized gain on available-for-
sale securities, net of tax 5,742,094 5,285,930
Retained earnings 24,833,950 25,400,584
__________ __________
TOTAL STOCKHOLDERS' EQUITY $34,817,266 $35,477,445
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $44,454,223 $41,747,936
<FN>
See notes to financial information.
</TABLE>
<PAGE>
<TABLE>
BOWL AMERICA INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED MARCH 26, 2000 AND MARCH 28, 1999
<CAPTION>
March 26, March 28,
2000 1999
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $3,294,623 $ 2,826,613
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 1,654,286 1,711,142
Changes in assets and liabilities
Decrease in inventories 76,958 148,780
Increase in prepaid and other (376,182) (348,017)
Decrease in other long-term assets 281,803 24,128
Increase (decrease) in accounts payable 95,914 (245,549)
Increase in accrued expenses
and payroll deductions 37,549 220,762
Increase in income taxes payable 1,023,858 187,923
Increase in other current liabilities 2,020,085 1,909,512
_________ _________
Net cash provided by operating activities $8,108,894 $ 6,435,294
_________ _________
Cash flows from investing activities
Expenditures for property,plant,equip (426,130) (754,115)
Net increase in short-term investments (3,014,544) (1,085,989)
_________ _________
Net cash used in investing activities (3,440,674) (1,840,104)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,661,640) (1,696,710)
Purchase of Common Stock (2,750,671) (2,771,516)
_________ _________
Net cash used in financing activities (4,412,311) (4,468,226)
_________ _________
Net Increase (decrease) in Cash and
Cash Equivalents 255,909 126,964
Cash and Equivalents, Beginning of Year 1,557,225 1,944,462
_________ _________
Cash and Equivalents, End of Period $1,813,134 $ 2,071,426
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 811,914 $ 1,365,935
<FN>
See notes to financial information.
</TABLE>
<PAGE>
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
For the Thirty-nine Weeks Ended
March 26, 2000
1. Consolidated Financial Statements
The consolidated balance sheet as of March 26, 2000, and
the consolidated statements of earnings and cash flows for the
three-month and nine-month periods ended March 26, 2000 and
March 28, 1999 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 March 26,
2000, 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 March 26,
2000 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
16,000 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
March 26, 2000
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Treasury Bills
and Notes, and cash totaled $12,518,000 at the end of the third
quarter of fiscal 2000 or $1,252,000 higher than at the beginning
of the quarter. The Company has purchased 380,956 shares of its
previously outstanding common stock in the fiscal year for $2,751,000,
including 273,636 shares in the third quarter for $1,989,000. These
purchases have depressed the usual seasonal increase in cash.
Current liabilities include $2 Million in league deposits of prize
fund monies which are returned to the leagues at the end of the
bowling season, generally during the fourth quarter.
The Company is actively seeking property for additional locations.
Cash and cash flow are sufficient to finance all currently planned
purchases and construction. The Company's position in telecommun-
ications stocks is an additional source of expansion capital.
These securities are carried at their fair value on the last day of
the quarter. For the nine month period ending March 26, 2000, the
market value increased by approximately $736,000 resulting in an
unrealized after tax gain of $456,000. There were no transactions in
these stocks.
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.
During the fourth quarter of fiscal 1999, the Company closed a
center operating with negative cash flow.
Results of Operations
There was a $.36 per share profit for the thirteen-week period ending
March 26, 2000, versus $.32 per share profit for the thirteen weeks
ending March 28, 1999. For the current thirty-nine week period
earnings per share were $.65 compared to $.51 for the comparable period
a year ago.
Operating revenues decreased slightly for the current three-month period
but were up 3% for the current nine-month period. In the prior year the
quarter showed an increase of 1% and the nine-month period was flat. In
the third quarters of both years ice and snow caused closings at some
locations resulting in lost revenues and additional costs for removal.
Substantial tournament activity in February and March minimized the loss
of income in the current three-month period.
Food and beverage sales were up 1% in the current quarter and 4%
through the nine-month period. Cost of food and beverage sales were
up due to the increased sales.
Operating expenses excluding depreciation and amortization decreased
less than 1% in both the three-month and nine-month periods.In the
prior year three-month period there was a slight increase but a 2% decrease
for the nine-month period. Employee compensation and benefits were up 1%
in the current quarter and up 2% in the nine-month period.
Advertising costs increased 6% from the prior year quarter and 12%
year-to-date mainly due to our glow-in-the-dark advertising campaign.
Supplies and services expense decreased 4% for the nine months.
Equipment expense was down 3% in the year-to-date period versus an increase
of 15% in the comparable period a year ago when there were additional costs
relating to pin and rental shoes. Utility costs decreased 2% in the current
quarter compared to a 1% increase in the prior year quarter. For the
nine-month periods the comparisons were decreases of less than 1%
and 2% respectively.
Depreciation and amortization expense decreased 3% in the year-to-date
period versus a decrease of 1% in the prior year nine-month period.
Rent expense for the year was down 11% due to the closing of a leased
location.
<PAGE>
S.E.C. FORM 10-Q
March 26, 2000
PART II - OTHER INFORMATION
An 8K was filed in March 2000, with respect to the authorization of the
Company's president to purchase at his discretion from time to time up
to 600,000 shares of the Company's common stock on its behalf.
<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 9, 2000 Leslie H. Goldberg
Date Leslie H. Goldberg
President
May 9, 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> 9-MOS
<FISCAL-YEAR-END> JUL-02-2000
<PERIOD-END> MAR-26-2000
<CASH> 1,813
<SECURITIES> 10,243
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 542
<CURRENT-ASSETS> 13,934
<PP&E> 44,866
<DEPRECIATION> 25,186
<TOTAL-ASSETS> 44,454
<CURRENT-LIABILITIES> 5,151
<BONDS> 0
0
0
<COMMON> 487
<OTHER-SE> 34,330
<TOTAL-LIABILITY-AND-EQUITY> 44,454
<SALES> 6,208
<TOTAL-REVENUES> 22,023
<CGS> 1,950
<TOTAL-COSTS> 17,484
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,130
<INCOME-TAX> 1,836
<INCOME-CONTINUING> 3,294
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,294
<EPS-BASIC> .65
<EPS-DILUTED> .65
</TABLE>
