-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qdydr3RC4hpd6DSW4fPMSe5gxAork3D78H+SAcXgJZWf5IXTEshYrhebLC6rXVt1 kCD/HPCms7jPEOybRg2WyQ== 0000013573-02-000002.txt : 20020414 0000013573-02-000002.hdr.sgml : 20020414 ACCESSION NUMBER: 0000013573-02-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011230 FILED AS OF DATE: 20020215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOWL AMERICA INC CENTRAL INDEX KEY: 0000013573 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 540646173 STATE OF INCORPORATION: MD FISCAL YEAR END: 0627 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07829 FILM NUMBER: 02550558 BUSINESS ADDRESS: STREET 1: 6446 EDSALL RD CITY: ALEXANDRIA STATE: VA ZIP: 22312 BUSINESS PHONE: 7039416300 MAIL ADDRESS: STREET 1: P O BOX 1288 CITY: SPRINGFIELD STATE: VA ZIP: 22151 10-Q 1 r10qdc01.txt 10-Q FOR PERIOD ENDED DECEMBER 30, 2001 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 30, 2001 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 27, 2002 Class A Common Stock, 3,660,882 $.10 par value Class B Common Stock 1,487,236 $.10 par value ITEM 1. FINANCIAL STATEMENTS BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended December 30, December 31, December 30, December 31, 2001 2000 2001 2000 _______________________ __________________________ Operating Revenues Bowling and other $5,547,213 $5,354,385 $10,024,029 $ 9,879,470 Food, beverage and merchandise sales 2,319,919 2,220,976 4,277,144 4,090,058 _________ _________ __________ __________ 7,867,132 7,575,361 14,301,173 13,969,528 Operating Expenses Compensation and benefits 3,213,191 3,118,142 6,346,564 6,217,595 Cost of bowling and other 1,454,877 1,380,043 2,942,319 2,816,249 Cost of food, beverage and merchandise sales 791,638 724,600 1,508,738 1,344,154 Depreciation and amortization 436,758 487,994 889,192 981,839 General and administrative 276,581 233,675 448,611 444,318 _________ _________ __________ __________ 6,173,045 5,944,454 12,135,424 11,804,155 Operating Income 1,694,087 1,630,907 2,165,749 2,165,373 Interest and dividend income 138,124 173,675 271,100 574,014 _________ _________ __________ __________ Earnings before provision for income taxes 1,832,211 1,804,582 2,436,849 2,739,387 Provision for income taxes 657,763 647,805 874,828 983,400 _________ _________ __________ __________ Net Earnings $1,174,448 $1,156,777 $ 1,562,021 $ 1,755,987 Earnings per share-basic & diluted $.23 $.22* $.31 $.33* Weighted average shares outstanding 5,151,237 5,257,357* 5,118,729 5,304,078* Dividends paid $595,176 $550,995 $1,187,838 $1,117,793 Per share, Class A $.115 $.105* $.23 $.21* Per share, Class B $.115 $.105* $.23 $.21* *Restated for 5% stock dividend paid July 26, 2001. CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS Net Earnings $1,174,448 $1,156,777 $ 1,562,021 $1,755,987 Other comprehensive earnings-net of tax Unrealized (loss)gain on available for sale securities (407,419) (589,590) (207,706) (1,531,470) _________ _________ _________ _________ Comprehensive earnings $ 767,029 $ 567,187 $ 1,354,315 $ 224,517
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. BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
December 30, 2001 July 1, 2001 ________________ _____________ ASSETS Current Assets Cash and cash equivalents $ 3,137,322 $ 1,338,420 Short-term investments 6,012,786 6,236,665 Inventories 677,459 720,505 Prepaid expenses and other 569,798 867,938 Income taxes refundable 170,949 449,093 __________ __________ Total Current Assets 10,568,314 9,612,621 Property, Plant and Equipment less accumulated depreciation of $26,935,396 and $26,598,008 21,171,431 21,078,785 Other Assets Marketable equity securities 5,887,236 6,216,928 Cash surrender value-life insurance 414,203 411,411 Other long-term assets 193,881 278,121 __________ __________ TOTAL ASSETS $38,235,065 $37,597,866
BOWL AMERICA INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
December 30, 2001 July 1, 2001 _________________ _____________ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 660,691 $ 1,071,563 Accrued expenses and payroll ded 796,022 934,274 Other current liabilities 1,602,559 400,889 __________ __________ Total Current Liabilities 3,059,272 2,406,726 Noncurrent Deferred Income Taxes 2,366,989 2,488,000 TOTAL LIABILITIES 5,426,261 4,894,726 __________ __________ 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 - 3,660,882 and 3,491,976 shares 366,087 349,197 Class B issued and outstanding - 1,487,236 and 1,416,427 148,723 141,643 Additional paid-in capital 7,556,300 5,075,754 Unrealized gain on securities available-for-sale, 3,219,765 3,427,471 Retained earnings 21,517,929 23,709,075 __________ __________ TOTAL STOCKHOLDERS' EQUITY $32,808,804 $32,703,140 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $38,235,065 $37,597,866 See notes to financial information.
BOWL AMERICA INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 30, 2001 AND DECEMBER 31, 2000
December 30, December 31, 2001 2000 Cash Flows From Operating Activities: Net earnings $1,562,021 $1,755,987 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization 889,192 981,839 Changes in assets and liabilities Decrease (increase) in inventories 43,046 (21,762) Decrease (increase) in prepaid & other 298,140 (158,756) Decrease in income taxes refundable 278,144 - Decrease in other long-term assets 81,448 41,922 Decrease in accounts payable (410,872) (31,878) Decrease in accrued expenses (138,252) (66,860) Increase in income taxes payable - 93,946 Increase in other current liabilities 1,202,645 1,169,638 _________ _________ Net cash provided by operating activities $3,805,512 $3,764,076 _________ _________ Cash flows from investing activities Expenditures for property,plant,equip (981,838) (2,920,074) Net sales and maturities of short-term investments 223,879 1,190,195 _________ _________ Net cash used in investing activities (757,959) (1,729,879) _________ _________ Cash flows from financing activities Payment of cash dividends (1,187,838) (1,117,793) Purchase of Class A & B Common Stock (60,813) (1,067,452) _________ _________ Net cash used in financing activities (1,248,651) (2,185,245) _________ _________ Net Increase (Decrease) in Cash and Equivalents 1,798,902 (151,048) Cash and Equivalents, Beginning of Period 1,338,420 1,523,242 _________ _________ Cash and Equivalents, End of Period $3,137,322 $1,372,194 Supplemental Disclosures of Cash Flow Information Cash paid during the period for Income taxes $ 596,710 $ 890,785 See notes to financial information.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS For the Twenty-six Weeks Ended December 30, 2001 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 1, 2001 has been derived from the Company's July 1, 2001 audited financial statements. Certain information and note disclosures normally included in the annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America, 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 1, 2001. 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 30, 2001 were: 16,835 shares of AT&T Wireless 3,946 shares of Alltel 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 BOWL AMERICA INCORPORATED Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS December 30, 2001 Liquidity and Capital Resources Short-term investments, consisting mainly of U.S. Treasury Bills and Notes, and cash totaled $9,150,000 at the end of the second quarter of fiscal 2002 or $1,584,000 higher than at the beginning of the quarter. In the six-month period ended December 30, 2001, the Company expended approximately $1 million primarily for the purchase of bowling equipment to upgrade facilities and to replace some amusement games. 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 has also maintained its fiscal year end 2001 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 December 30, 2001, the market value decreased by $600,000 to approximately $5,900,000. 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. On December 4, 2001, the Board of Directors declared a cash dividend of $.115 per share on its Class A and Class B stock to holders of record on January 10, 2002, payable February 13, 2002. The Company paid a 5% stock dividend on both July 26, 2001 and July 26, 2000. All applicable share and per share data in prior periods has been restated for the effect of the stock dividends. Results of Operations During the first quarter of fiscal 2002, a center operating at break-even was closed at the end of its lease. The Company also closed a leased center in the second quarter of fiscal 2001. The changes in the number of operating centers affected all income, expense and comparisons for the periods presented in this report. There were net earnings of $.23 per share for the thirteen-week period ended December 30, 2001, versus net earnings of $.22 per share for the thirteen- week period ended December 31, 2000. For the current twenty-six week period earnings per share were $.31 compared to $.33 for the comparable period a year ago. Operating income increased 2% for the current six-month period versus an increase of 5% in the comparable period a year ago. Increased open play linage and a higher average game rate contributed to the improvment in bowling revenue. Some ancillary revenues were also up over the prior year. Food, beverage and merchandise sales were up in the six-month period ended December 30, 2001. Cost of sales increased due to the higher sales. Operating expenses excluding depreciation and amortization increased 4% in the current six-month period versus a 5% increase in the comparable period last year. Employee compensation and benefits were up 2% for the twenty-six week period versus an increase of 6% in last year's period when the tight labor market forced the use of overtime. Maintenance and repair costs were up 10% in the six-month period ended December 30, 2001 versus 5% in the period a year ago. Advertising expense increased 22% in the current twenty-six week period partially in support of glow-in-the-dark bowling. Last year advertising costs were down 19%. Supplies and services expenses were down 8% in this year's six-month period versus a 1% increase in the prior year period. Utility costs were flat in both the current and prior periods. Depreciation and amortization expense decreased 9% in the current year period and 13% in the comparable period last year. Several large capital assets have reached full depreciation. Rent expense was down 6% in the current year's six-month period due to the closing, mentioned above, of a leased location. In last year's six-month period rent expense dropped 14%, the combination of closing a leased location and purchasing a formerly leased center. While lower interest rates in the current six-month period have caused a decline in interest and dividend income, the primary cause for the decrease is that last year's interest and dividend income figure included $219,000 received from the merger of AT&T and Media One. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable BOWL AMERICA INCORPORATED AND SUBSIDIARIES S.E.C. FORM 10-Q December 30, 2001 PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders At the annual meeting on December 4, 2001 the Class A shareholders approved the appointment of Director Warren T. Braham for a one year period to expire at the 2002 Annual Meeting. The votes were cast as follows: For 3,348,976 Against 0 Withheld 6,553 At the annual meeting on December 4, 2001, the Class A shareholders approved the appointment of Director Allan L. Sher for a one year period to expire at the 2002 Annual Meeting. The votes were cast as follows: For 3,349,044 Against 0 Withheld 6,485 At the annual meeting on December 4, 2001, the Class B shareholders approved the appointment of all Class B Directors as listed in the proxy statement for the December 4, 2001 meeting, for a one year period to expire at the 2002 Annual Meeting. The votes were cast as follows: For 14,836,200 Against 0 Withheld 0 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K A Form 8-K was filed during the quarter relating to an employment contract between the Company and its President, Leslie H. Goldberg. 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 13, 2002 Leslie H. Goldberg Date Leslie H. Goldberg President February 13, 2002 Cheryl A. Dragoo Date Cheryl A. Dragoo Controller EX-13 3 pres1201.txt TEXT OF PRESS RELEASE Improved Quarterly Earnings at Bowl America Bowl America Incorporated tonight reported that its second quarter earnings improved to $.23 per share from $.22* in the like quarter last year. Sales and pretax profits also improved as the business did not appear to be affected significantly by the current recessionary climate. Customer discretionary spending as reflected by non-league traffic actually increased during the quarter. The balance of the year should benefit from increased tournament play and better pricing. Bowl America tomorrow will pay a quarterly cash dividend of $.115 per share, a 10% increase over last year's payment. The Company previously announced that it expected this to be the thirtieth consecutive year of increased dividends. Bowl America operates twenty bowling centers in Maryland, Virginia and Florida and its Class A Common Stock trades on the American Stock Exchange with the symbol BWLA. The Company's SEC Form 10-Q is available at www.sec.gov on the Edgar system. *Restated for 5% stock dividend paid July 26, 2001. -----END PRIVACY-ENHANCED MESSAGE-----