SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2013 Commission file Number 1-7829
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
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Class Name of Exchange on which registered Class A Common stock (par value $.10) NYSE MKT
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES[ ] NO [X]
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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K, (Section 229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer [ ] |
Accelerated Filer [ ] |
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Non-accelerated Filer [ ] |
Smaller reporting company [X] |
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Indicate by checkmark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). YES [ ] NO [X]
As of December 28, 2012, which was the last business day of the registrant's most recently completed second quarter, 3,683,009 Class A common shares were outstanding, and the aggregate market value of the Class A common shares (based upon the closing price of these shares on the NYSE MKT of Bowl America Incorporated held by non-affiliates of the registrant was approximately $33 million. As of that date 1,468,462 Class B common shares were outstanding. Class B common shareholders have the right to convert their Class B common stock to Class A common stock on a share for share basis. If the Class B shares were converted to Class A shares as of December 28, 2012, the total aggregate market value for both classes of common stock held by non-affiliates would be approximately $39 million.
Indicate the number of shares outstanding of each of the registrant’s
classes of common stock, as of the latest practicable date:
Shares outstanding at September 15, 2013 Class A Common Stock $.10 par value 3,746,454
Class B Common Stock
$.10 par value
1,414,517
DOCUMENTS INCORPORATED BY REFERENCE
Portions of registrant's definitive proxy statement, which will be filed with the Commission not later than 120 days after June 30, 2013, are incorporated by reference into Part III of this Form 10-K. The Selected Financial Data (Item 6), Management’s Discussion & Analysis (Item 7), financial statements (Item 8) and Management’s Annual Report on Internal Control Over Financial Reporting (Item 9A) attached to this filing as exhibits are incorporated herein by reference.
BOWL AMERICA INCORPORATED
INDEX TO FISCAL 2013 10-K FILING
PART I
ITEM 1. Business (a) General Development of Business 1 (b) Financial Information about Industry Segments 1 (c) Narrative Description of Business 1 (d) Financial Information about Geographic Areas 1 ITEM 2. Properties 2 ITEM 3. Legal Proceedings 2 ITEM 4. Mine Safety Disclosures 2 PART II ITEM 5. Market for Registrant's Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities ITEM 6. Selected Financial Data 3 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ITEM 8. Financial Statements and Supplementary Data 3 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ITEM 9A Controls and Procedures 3 PART III ITEM 10. Directors Executive Officers and Corporate Governance 4 ITEM 11. Executive Compensation 4 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ITEM 13. Certain Relationships and Related Transactions and Director Independence 4 ITEM 14. Principal Accountant Fees and Services 4 PART IV ITEM 15. Exhibits and Financial Statement Schedules (a) Financial Statements 5 (b) Exhibits 5 Signatures 6-7
Page
2
3
3
4
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Bowl America Incorporated (herein referred to as the “Company”) was incorporated in 1958. The Company commenced business with one bowling center in 1958, and at the end fiscal year 2013, the Company and its wholly-owned subsidiaries operated 18 bowling centers. Bowl America Winter Park located in metropolitan Orlando, Florida, operating with a negative cash flow, was sold for $2,850,000 on May 30, 2013.
(b) Financial Information about Industry Segments
The Company operates in one segment. Its principal source of revenue consists of fees charged for the use of bowling lanes and other facilities and from the sale of food and beverages for consumption on the premises. At the end of the fiscal year 2013, the Company had operating revenues from continuing operations of approximately $23.9 million, and approximately $37 million in total assets. Merchandise sales, including food and beverages, were approximately 29% of operating revenues. The balance of operating revenues (approximately 71%) represents fees for bowling and related services. Earnings per share for fiscal 2013 were $0.61, including $0.32 cents per share from the after tax gain on the sale and discontinued operation of the Bowl America Winter Park location of $1,669,449.
(c) Narrative Description of Business
As of September 1, 2013 the Registrant and its subsidiaries operated 10 bowling centers in the greater metropolitan area of Washington, D.C., one bowling center in the greater metropolitan area of Baltimore, Maryland, three bowling centers in the greater metropolitan area of Jacksonville, Florida, and four bowling centers in the greater metropolitan area of Richmond, Virginia. These 18 bowling centers contain a total of 726 lanes.
These establishments are fully air-conditioned with facilities for service of food and beverages, game rooms, rental lockers, and meeting room facilities. All centers provide shoes for rental, and bowling balls are provided free. In addition, each center retails bowling accessories. Most locations are equipped for glow-in-the-dark bowling, popular for parties and non-league bowling.
The bowling equipment essential for the Company's operation is readily available. The major source of its equipment is Brunswick Corporation.
The bowling business is a seasonal one, and most of the business takes place from October through May. It is highly competitive, but the Company has managed to maintain its position in the markets in which it operates. The principal method of competition is the quality of service furnished to the Company's customers. Its primary competitors are Brunswick Corporation, a large bowling equipment manufacturer, and Bowlmor AMF.
Compliance with federal, state and local environmental protection laws has not materially affected the Company.
The number of persons employed by the Company and its subsidiaries is approximately 500 including approximately 250 full time employees.
(d) Financial Information about Geographic Areas
The Company has no foreign operations.
ITEM 2. PROPERTIES
The Company owns its general offices which are located at 6446 Edsall Road, Alexandria, Virginia 22312.
Two of the Company's bowling centers are located in leased premises, and the remaining sixteen centers are owned by the Company. As of August 2, 2013, the Company's leases expire from 2014 through 2019. The specific locations of the bowling centers are discussed under Item 1(c).
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings other than ordinary routine litigation incidental to the business.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The principal market on which the Company's Class A Common Stock is traded is the NYSE MKT. The
Company's Class B Common Stock is not listed on any exchange and is not traded. Each share of Class B Common Stock can be converted to one share of Class A Common Stock at any time.
The table below presents the high and low sales price of the Company's Class A Common Stock in each quarter of fiscal years 2013 and 2012.
2013 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr High Low
$
13.50
$
13.24
$
13.61
$
13.25
$
11.84
$
11.60
$
12.00
$
12.32
2012 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr High Low
$
13.50
$
13.33
$
14.85
$
13.81
$
12.07
$
12.09
$
12.49
$
12.50
Holders
As of June 30, 2013, the approximate number of holders of record of the Company's Class A Common Stock was 312 and of the Company's Class B Common Stock was 23.
Cash Dividends
The table below presents the quarterly cash dividends per share of Class A Common Stock and Class B Common Stock paid, and the quarter in which the payment was made during fiscal 2013 and 2012.
Class A Common Stock Quarter 2013 2012 First 16 cents 16 cents Second 83 cents 16 cents Third 0 cents 16 cents Fourth 16.5 cents 16 cents
Class B Common Stock Quarter 2013 2012 First 16 cents 16 cents Second 83 cents 16 cents Third 0 cents 16 cents Fourth 16.5 cents 16 cents
The Board of Directors decides the amount and timing of any dividend at its quarterly meetings based on its appraisal of the state of the business, the economic climate and estimate of future opportunities at such time.
ITEM 6. SELECTED FINANCIAL DATA
The information is set forth in the section of Exhibit 99(a) entitled "Selected Financial Data" on page 14 of this Form 10-K and is incorporated herein by reference. Such information should be read in conjunction with the audited financial statements.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information is set forth in the section of Exhibit 99(b) entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" on Pages 9 through 12 of this Form 10-K and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and notes thereto are set forth in Exhibit 99(c) on pages 15 through 27 of this Form 10-K and is incorporated herein by reference.
Supplementary data is not required.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company's disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by it in its periodic reports filed with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Based on an evaluation of the Company’s disclosure controls and procedures conducted by the Company’s Chief Executive Officer and Chief Financial Officer, such officers concluded that the Company's disclosure controls and procedures were effective as of June 30, 2013. Additionally, the Company’s officers concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2013 to ensure that information required to be disclosed in the reports filed under the Exchange Act was accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
Internal Control over Financial Reporting
(a) Management’s Annual Report on Internal Control Over Financial Reporting
In accordance with Section 404(a) of the Sarbanes-Oxley Act of 2002 and Item 308(a) of Regulation S-K, the report of management on the Company’s internal control over financial reporting is set forth in Exhibit 99(d) in this Annual Report on Form 10-K and is included herein by reference.
(b) Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting that occurred during the fourth quarter ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item regarding directors and executive officers is hereby incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.
ITEM 11. EXECUTIVE COMPENSATION
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by reference from the Company's definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
The following consolidated financial statements of Bowl America Incorporated and its subsidiaries are incorporated by reference in Part II, Item 8:
Report of Independent Registered Public Accounting Firm
Consolidated balance sheets as of June 30, 2013 and July 1, 2012
Consolidated statements of earnings and comprehensive earnings - years ended June 30, 2013 and July 1, 2012
Consolidated statements of stockholders' equity - years ended June 30, 2013 and July 1, 2012
Consolidated statements of cash flows - years ended June 30, 2013 and July 1, 2012
Notes to the consolidated financial statements - years ended June 30, 2013 and July 1, 2012
(b) Exhibits:
3(i)a Articles of Incorporation of the Registrant and amendments through December 1988 thereto (Incorporated by reference from exhibit number 3 to the Annual Report for 1989 on Form 10-K for fiscal year ended July 2, 1989.)
3(i)b Amendment to and restatement of Article FIFTH (b) III 2.2 of the Registrant's Articles of Incorporation (Incorporated by reference from the Registrant's Form 8-K filed December 9, 1994.)
3(ii) By-laws of the Registrant (Incorporated by reference from exhibit 3 to the Registrant’s Annual Report on Form 10-K for fiscal year ended July 2, 1989.)
10.1 Amended Employment Agreement, dated as of June 18, 2013, between the Company and Leslie H. Goldberg (incorporated by reference to Exhibit 10.1 to Form 8-K filed on June 19, 2013).
10.2 Amended Employment Agreement, dated as of October 19, 2012, between the Company and Cheryl A. Dragoo (incorporated by reference to Exhibit 10.1 to Form 8-K filed on October 19, 2012).
20 Press release dated September 26, 2013
21 Subsidiaries of registrant (Incorporated by reference from exhibit number 1 to the Registrant's Annual Report on Form 10-K for fiscal year ended June 30, 2002.)
31.1 Written statement of Chief Executive Officer (Rule 13a-14a Certification)
31.2 Written statement of Chief Financial Officer (Rule 13a-14a Certification)
32 Written statement of Chief Executive and Chief Financial Officers (Section 1350 Certifications)
99(a) Selected Financial Data (Item 6), set forth as page 14 hereof
99(b) Management’s Discussion & Analysis of Financial Condition and Results of Operations (Item 7), set forth as pages 9-12 hereof
99(c) Consolidated Financial Statements (Item 8), set forth as pages 15-27 hereof
99(d) Management’s Annual Report on Internal Control Over Financial Reporting, (Item 9-A) set forth as page 8 hereof
101 Interactive files formatted in XBRL (Extensible Business Reporting Language)
BOWL AMERICA INCORPORATED
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
/s/ Leslie H. Goldberg
Leslie H. Goldberg
President
Chief Executive and Operating Officer
Date: September 26, 2013
/s/ Cheryl A. Dragoo
Cheryl A. Dragoo
Chief Financial Officer,
Senior Vice President
Principal Financial and Accounting Officer
Date: September 26, 2013
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and the dates indicated.
Name, Title, Capacity
/s/ Leslie H. Goldberg Leslie H. Goldberg President, Principal Executive & Operating Officer and Director Date: September 26, 2013 /s/ Ruth Macklin /s/ Cheryl A. Dragoo Ruth Macklin Cheryl A Dragoo Senior Vice President, Secretary, Senior Vice President, Principal Financial Treasurer and Director & Accounting Officer and Director Date: September 26, 2013 Date: September 26, 2013 /s/ Warren T. Braham /s/ Stanley H. Katzman Warren T. Braham Stanley H. Katzman Director Director Date: September 26, 2013 Date: September 26, 2013 /s/ Allan L. Sher /s/ Merle Fabian Allan L. Sher Merle Fabian Director Director Date: September 26, 2013 Date: September 26, 2013 /s/ Arthur H. Bill Arthur H. Bill Director Date: September 26, 2013
Exhibit 99(d) Management’s Annual Report on Internal Control Over Financial Reporting
Management’s Annual Report on Internal Control Over Financial Reporting
The following sets forth, in accordance with Section 404(a) of the Sarbanes-Oxley Act of 2002 and Item 308(a) of Regulation S-K, the annual report of management of the Company on the Company’s internal control over financial reporting.
1. Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting in a process designed by, or under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
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Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
2. Management of the Company, in accordance with Rule 13a-15(d) under the Securities Exchange Act of 1934 and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2013. The framework on which management’s evaluation of the Company’s internal control over financial reporting is based is the “Internal Control-Integrated Framework” published in 1992 by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission.
3. Management has determined that the Company’s internal control over financial reporting, as of June 30, 2013, was effective. No material weaknesses in the Company’s internal control over financial reporting were identified by management. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
4. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to a permanent exemption for non-accelerated filers from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.
Exhibit 99(b) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Annual Report of Form 10-K contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Annual Report on Form 10-K are forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. These statements are not guarantees of future performance or development and involve risks, uncertainties and other factors that are in some cases beyond our control. The forward-looking statements included in this Annual Report on Form 10-K are made as of the date hereof. We are under no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
LIQUIDITY AND CAPITAL RESOURCES
The Company views a strong financial position as a major benefit to shareholders and emphasizes payment of dividends as part of its financial plan. A portion of earnings has consistently been invested to create a reserve to protect the Company in downturns in business, to capitalize on opportunities for expansion and modernization and to provide a secure source of income. For these reasons, the Company prefers a conservative approach to investing rather than taking greater risk for possible rapid growth. The Company balances market volatility by using both fixed income and equity investments in managing its reserve funds. Any equity security is subject to price fluctuation, however, the stocks held by the Company have relatively low volatility. The Company has long been invested in a Government National Mortgage Association (“Ginnie Mae”) fund and domestically domiciled stocks with the perceived potential of appreciation, primarily telecommunications stocks. This diversity also provides a measure of safety of principal.
The Company sold its Winter Park, Florida center, which had been operating with a negative cash flow, for $2,850,000 in May 2013. The gain on the sale, which included the land, building and equipment, was $2,768,000.
The Company purchased 5,000 shares of Verizon for $178,200 during the fiscal year ended July 1, 2012. The remainder of common stocks in our portfolio have come from spin-offs, mergers and acquisitions of AT&T and United Telecommunications (now Sprint) purchased in 1979 and 1984 and one insurance company acquired at no cost when that company demutualized. While not all stocks in the portfolio are domestic American companies any longer, since the original purchases at an approximate cost of $630,000, we have received approximately $962,000 from mergers and sales and over $3,400,000 in dividends, the majority of which are tax favored in the form of exclusion from federal taxable income. These marketable securities are carried at their fair value on the last day of the year. The value of the securities on June 30, 2013 was approximately $5.0 million. The value of securities held at July 1, 2012 was approximately $4.8 million.
The Company’s original investment in the Vanguard GNMA bond fund began in 1988 with purchases of shares in the fund totaling approximately $1,400,000. Except for a one time sale of approximately $666,000 in 1991, all earnings have been reinvested. The fund is carried at fair value on the last day of the reporting period. At June 30, 2013, the value was approximately $3,431,000.
Short-term investments consisting mainly of Certificates of Deposits, cash and cash equivalents totaled $4,388,000 at the end of fiscal 2013 compared to $6,196,000 at the end of fiscal 2012. As noted below, short-term investments were used, along with cash on hand, to fund the dividends paid to shareholders during the quarter ended December 30, 2012.
The Company's position in all the above investments is a source of expansion capital. Potential volatility in the trading prices of the marketable securities held by the Company could impact the Company’s opportunities for expansion. The Board of Directors reviews the portfolio weekly and any use of this reserve at its quarterly meetings. The Company has made no application for third party funding as cash and cash flows are currently sufficient to finance all contemplated purchases and to meet short-term purchase commitments and operating lease commitments.
Cash flow provided by operating activities for the year ended June 30, 2013, was $2,207,000. Equipment purchases during fiscal year 2013 used approximately $770,000. Proceeds from Ginnie Mae dividends totaling approximately $117,500 in fiscal year 2013 were used to purchase additional shares in the fund. Short-term cash was used to meet the balance of $5,950,000 required to pay regular dividends totaling $.655 per share during the fiscal year and a special dividend of $.50 per share, paid in December 2012.
The change in Accrued Expenses generally relates to timing of payments including compensation and cash contributions to benefit plans.
The Company paid cash dividends totaling approximately $5.9 million, or $1.155 per share, to shareholders during the 2013 fiscal year, making this the forty-first consecutive year of increased regular dividends per share. In June 2013, the Company declared a quarterly $.165 per share dividend, paid in August 2013. The economic climate is part of the consideration at the Directors quarterly reviews of future estimates of cash flows. 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 estimate of opportunities at such time.
OVERVIEW
The Company is in the entertainment business which, by its nature, has ups and downs based on consumer tastes and whims. Generally, promotional and open play bowling, which depends on the public’s discretionary budget dollars and their choices, accounts for more than half of our business. An unstable economy can lead many to participate in entertainment that is close to home and relatively inexpensive. Bowling has those advantages. However, the longer the economy remains unstable, the less willing people are to spend on other than necessities. Current economic conditions continue to create challenges, but our response is helped by having the resources to be able to promote the sport. Weather is also a factor, especially for casual bowlers. While extreme heat or rainy weather prompt people to look for indoor activities, heavy snow storms can keep customers from reaching the centers. Postponed league games are made up later in the season, but lost open play income is never recovered. Mild winter weather in fiscal years 2013 and 2012 caused few cancellations.
RESULTS OF OPERATIONS
The following table sets forth the items in our consolidated summary of operations for the fiscal years ended June 30, 2013 and July 1, 2012, respectively, and the dollar and percentage changes therein.
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Fifty-two weeks ended |
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June 30, 2013 and July 1, 2012 |
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Dollars in thousands |
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2013 |
2012 |
Change |
% Change |
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Operating Revenues: |
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Bowling and other |
$ | 16,914 | $ | 17,142 | $ | (228 |
) |
(1.3 |
)% | |||||||
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Food, beverage & merchandise sales |
6,943 | 7,201 | (258 |
) |
(3.6 |
) | ||||||||||
| 23,857 | 24,343 | (486 |
) |
(2.0 |
) | |||||||||||
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Operating Expenses: |
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Compensation & benefits |
11,631 | 11,818 | (187 |
) |
(1.6 |
) | ||||||||||
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Cost of bowling & other |
6,096 | 6,463 | (367 |
) |
(5.7 |
) | ||||||||||
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Cost of food, beverage & merch sales |
2,021 | 2,073 | (52 |
) |
(2.5 |
) | ||||||||||
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Depreciation & amortization |
1,422 | 1,457 | (35 |
) |
(2.4 |
) | ||||||||||
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General & administrative |
926 | 932 | (6 |
) |
(.6 |
) | ||||||||||
| 22,096 | 22,743 | (647 |
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(2.8 |
) | |||||||||||
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Gain on sales of assets |
1 | 26 | (25 |
) |
(96.1 |
) | ||||||||||
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Operating income from continuing operations |
1,762 | 1,626 | 136 | 8.4 | ||||||||||||
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Interest & dividend income |
435 | 500 | (65 |
) |
13.0 | |||||||||||
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Earnings from continuing operations before taxes |
2,197 | 2,126 | 71 | 3.4 | ||||||||||||
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Income taxes |
711 | 627 | 84 | 13.5 | ||||||||||||
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Earnings from continuing operations |
1,486 | 1,499 | (13 |
) |
(.9 |
) | ||||||||||
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Gain (loss) from discontinued operations net of tax |
1,669 | (74 |
) |
1,743 | 2355.4 | |||||||||||
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Net Earnings |
$ | 3,155 | $ | 1,425 | $ | 1,730 | 121.4 | |||||||||
As noted above, the Bowl America Winter Park location was sold in May 2013, and its operations for the periods of fiscal 2013 and 2012 have been shown separately under Gain (loss) from discontinued operations, net of tax. The information included in Operating Revenues and Operating Expenses below relates to the eighteen centers that were in operation for the fiscal years ended 2013 and 2012. Fiscal 2013 and fiscal 2012 each consisted of 52 weeks.
Operating Revenues
Total operating revenue decreased 2.0% or $486,000 to $23.9 million in fiscal 2013 compared to a decrease of 6.9% or $1,811,000 to $24.3 million in fiscal 2012. Bowling and other revenue decreased $228,000 in fiscal 2013 versus a decrease of $1,348,000 in fiscal 2012. Food, beverage and merchandise sales decreased $258,000 in fiscal 2013 versus a decrease of $464,000 in fiscal 2012.
Management believes that the length and uncertainty of the economic recovery has adversely affected customers’ appetites for recreational spending for both league and open play games. The Company continues to review and adjust its budget in light of the current economic conditions.
Operating Expenses
As discussed in more detail below, total operating expenses decreased 2.8%, or $647,000, in fiscal year 2013 versus a decrease of 6.2%, or $1,493,000 in fiscal 2012. Costs for employee compensation and benefits were down 1.6% or $187,000 in fiscal 2013 versus a decrease of 4.2% or $516,000 in fiscal 2012. The Company continued to make scheduling adjustments resulting in a decrease in compensation. In addition, group health insurance costs declined primarily due to lower premiums and fewer participants. This category includes contributions to our two benefit plans, both of which are defined contribution plans. The contribution, which can only be made from profits, increased for fiscal year 2013 by $147,500. There is no additional obligation beyond the current year contribution.
Cost of bowling and other services decreased $367,000 or 5.7% in the year ended June 30, 2013 versus a decrease of $751,000 or 10.4% in the prior fiscal year. Maintenance expense declined 8% or $65,000 in fiscal year 2013 and was down 17% or $167,000 in the prior year. Both years included interior updating at several locations. Supplies expense was flat in fiscal 2013 versus a decrease of 5% or $49,000 in fiscal 2012. Advertising costs decreased $164,000, or 27%, in fiscal 2013 and decreased $343,000 or 36% in fiscal 2012. Utility costs decreased 6% in fiscal 2013 versus a decrease of 1% in fiscal 2012. Energy management and lower electric costs were primarily responsible for the decrease in fiscal year 2013. Fiscal 2012 included one of the warmest winters on record which resulted in lower natural gas prices and usage.
Cost of food, beverage and merchandise sales decreased $52,000 or 3% in fiscal 2013 and $116,000 or 5% in fiscal 2012, primarily due to lower food and beverage sales.
Depreciation expenses decreased approximately $35,000 or 2% and $77,000 or 5% in fiscal year 2013 and 2012 respectively.
Operating income from continuing operations increased 8.4% or $136,000 to $1.8 million in fiscal year 2013 from $1.6 million in fiscal 2012.
Interest and Dividend Income
Interest and dividend income declined 13% in fiscal 2013 and 14% in fiscal 2012 due to lower balances and lower average interest rates on investments. Dividend income was up slightly in fiscal 2013 versus an increase of 10% in fiscal year 2012, the first year of dividends on the purchase of additional Verizon shares.
Income taxes
Effective income tax rates on continuing operations for the Company were 32.4% for fiscal 2013 and 29.5% for fiscal 2012, the difference from statutory rates being in part for the partial exclusion of dividends received on investments which, in fiscal 2012, was a higher portion of income than in prior years.
Net Earnings
Net earnings from continuing operations in both fiscal 2013 and 2012 were $1.5 million, or $.29 per share.
Gain (loss) from discontinued operations – net of tax
Income from discontinued operations, net of tax in fiscal year 2013 includes the $2,768,000 gain on the sale of our Winter Park, Florida location. Fiscal year 2012 includes the operating loss net of tax on that location.
CRITICAL ACCOUNTING POLICIES
We have identified accounting for marketable investment securities as a critical accounting policy due to the significance of the amounts included in our balance sheet. The Company exercises judgment in determining the classification of its investment securities as available-for-sale and in determining their fair value. The Company records these investments at their fair value based on quoted market prices with the unrealized gain or loss recorded in accumulated other comprehensive income, a component of stockholders' equity, net of deferred taxes. Additionally, from time to time the Company must assess whether write-downs are necessary for other than temporary declines in value.
We have identified accounting for the impairment of long-lived assets as a critical accounting policy due to the significance of the amounts included in our balance sheet under the caption of Land, Buildings and Equipment. The Company reviews long-lived assets whenever events or changes indicate that the carrying amount of an asset may not be recoverable. In making such evaluations, the Company compares the expected future cash flows to the carrying amount of the assets. An impairment loss equal to the difference between the assets' fair value and carrying value is recognized when the estimated undiscounted future cash flows are less than the carrying amount. There were no impairment losses recorded in fiscal 2013 or 2012.
805 King Farm Boulevard
Rockville, Maryland 20850
Phone 301.231.6200
Fax 301.231.7630
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Bowl America Incorporated
Alexandria, Virginia
We have audited the accompanying Consolidated Balance Sheets of Bowl America Incorporated and Subsidiaries as of June 30, 2013 and July 1, 2012, and the related Consolidated Statements of Earnings and Comprehensive Earnings, Stockholders' Equity and Cash Flows for the years then ended. Bowl America Incorporated and Subsidiaries’ management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bowl America Incorporated and Subsidiaries as of June 30, 2013 and July 1, 2012, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Aronson, LLC
Aronson, LLC
Rockville, Maryland
September 26, 2013
Exhibit 99(a) Selected Financial Data
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS
Selected Financial Data
|
For the Years Ended |
||||||||||||||||||||
|
June 30, |
July 1, |
July 3, |
June 27, |
June 28, |
||||||||||||||||
|
2013 |
2012 |
2011 |
2010 |
2009 |
||||||||||||||||
|
Operating revenues |
$ | 23,857,281 | $ | 24,343,024 | $ | 26,154,437 | $ | 26,736,430 | $ | 29,351,611 | ||||||||||
|
Operating expenses |
22,095,866 | 22,742,905 | 24,235,601 | 24,305,530 | 25,192,583 | |||||||||||||||
|
Gain (loss) on sale of land, building and equipment |
980 | 25,924 | 14,187 | 41,427 | (1,375 |
) | ||||||||||||||
|
Interest and dividend income |
435,141 | 499,873 | 579,960 | 529,845 | 679,287 | |||||||||||||||
|
Earnings from continuing operations before provision for income taxes |
2,197,536 | 2,125,916 | 2,512,983 | 3,002,172 | 4,836,940 | |||||||||||||||
|
Provision for income taxes |
711,763 | 626,677 | 866,619 | 1,062,926 | 1,688,560 | |||||||||||||||
|
Earnings from continuing operations |
$ | 1,485,773 | $ | 1,499,239 | $ | 1,646,364 | $ | 1,939,246 | $ | 3,148,380 | ||||||||||
|
Gain (loss) from discontinued operations - net of tax |
1,669,449 | (74,398 |
) |
(89,435 |
) |
(88,534 |
) |
(91,098 |
) | |||||||||||
|
Net Earnings |
$ | 3,155,222 | $ | 1,424,841 | $ | 1,556,929 | $ | 1,850,712 | $ | 3,057,282 | ||||||||||
|
Weighted average shares outstanding- Basic & Diluted |
5,151,784 | 5,151,471 | 5,147,117 | 5,141,102 | 5,133,375 | |||||||||||||||
|
Earnings per share-Basic & diluted |
||||||||||||||||||||
|
Continuing operations |
$ | .29 | $ | .29 | $ | .32 | $ | .38 | $ | .62 | ||||||||||
|
Discontinued operations |
.32 | (.01 |
) |
(.02 |
) |
(.02 |
) |
(.02 |
) | |||||||||||
|
Net earnings per share-Basic & diluted |
$ | .61 | $ | .28 | $ | .30 | $ | .36 | $ | .60 | ||||||||||
|
Net cash provided by operating activities |
$ | 2,206,533 | $ | 2,769,286 | $ | 3,529,193 | $ | 2,944,882 | $ | 6,502,922 | ||||||||||
|
Cash dividends paid |
$ | 5,949,951 | $ | 3,296,942 | $ | 3,242,593 | $ | 3,187,444 | $ | 3,105,700 | ||||||||||
|
Cash dividends paid Per share - Class A |
$ | 1.155 | $ | 0.64 | $ | 0.63 | $ | 0.62 | $ | 0.605 | ||||||||||
|
- Class B |
$ | 1.155 | $ | 0.64 | $ | 0.63 | $ | 0.62 | $ | 0.605 | ||||||||||
|
Total assets |
$ | 36,725,050 | $ | 39,368,174 | $ | 40,917,762 | $ | 41,410,343 | $ | 42,966,669 | ||||||||||
|
Stockholders' equity |
$ | 31,031,801 | $ | 33,685,154 | $ | 35,301,391 | $ | 36,403,807 | $ | 37,579,197 | ||||||||||
|
Net book value per share |
$ | 6.01 | $ | 6.54 | $ | 6.85 | $ | 7.07 | $ | 7.31 | ||||||||||
|
Net earnings as a % of beginning stock holders' equity |
9.4 |
% |
4.0 |
% |
4.3 |
% |
4.9 |
% |
8.0 |
% | ||||||||||
|
Lanes in operation |
726 | 756 | 756 | 756 | 756 | |||||||||||||||
|
Centers in operation |
18 | 19 | 19 | 19 | 19 | |||||||||||||||
Exhibit 99(c) Consolidated Financial Statements
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
As of |
||||||||
|
June 30, |
July 1, |
|||||||
|
2013 |
2012 |
|||||||
|
ASSETS |
||||||||
|
CURRENT ASSETS: |
||||||||
|
Cash and cash equivalents (Note 2) |
$ | 3,437,780 | $ | 2,332,022 | ||||
|
Short-term investments (Note 3) |
949,815 | 3,863,721 | ||||||
|
Inventories |
519,179 | 535,412 | ||||||
|
Prepaid expenses and other |
563,591 | 613,891 | ||||||
|
Income taxes refundable |
58,129 | 313,518 | ||||||
|
Current deferred income taxes (Note 7) |
6,658 | - | ||||||
|
TOTAL CURRENT ASSETS |
5,535,152 | 7,658,564 | ||||||
|
LAND, BUILDINGS & EQUIPMENT, net (Note 4) |
21,979,489 | 22,718,526 | ||||||
|
OTHER ASSETS: |
||||||||
|
Marketable investment securities (Note 3) |
8,477,227 | 8,286,680 | ||||||
|
Cash surrender value-life insurance |
648,717 | 619,624 | ||||||
|
Other |
84,465 | 84,780 | ||||||
|
TOTAL OTHER ASSETS |
9,210,409 | 8,991,084 | ||||||
|
TOTAL ASSETS |
$ | 36,725,050 | $ | 39,368,174 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
CURRENT LIABILITIES: |
||||||||
|
Accounts payable |
$ | 694,454 | $ | 722,380 | ||||
|
Accrued expenses |
1,045,645 | 1,004,221 | ||||||
|
Dividends payable |
851,561 | 824,235 | ||||||
|
Other current liabilities |
311,284 | 295,978 | ||||||
|
Income taxes payable |
151,227 | - | ||||||
|
Current deferred income taxes (Note 7) |
- | 65,552 | ||||||
|
TOTAL CURRENT LIABILITIES |
3,054,171 | 2,912,366 | ||||||
|
LONG-TERM DEFERRED COMPENSATION |
39,194 | 44,217 | ||||||
|
NONCURRENT DEFERRED INCOME TAXES (Note 7) |
2,599,884 | 2,726,437 | ||||||
|
TOTAL LIABILITIES |
5,693,249 | 5,683,020 | ||||||
|
COMMITMENTS AND CONTINGENCIES (Note 5) |
||||||||
|
STOCKHOLDERS' EQUITY (Note 8) |
||||||||
|
Preferred stock, par value $10 a share: Authorized and unissued, 2,000,000 shares |
- | - | ||||||
| Common stock, par value $.10 a share: Authorized, 10,000,000 shares | ||||||||
|
Class A issued and outstanding 3,746,454 and 3,683,009 |
374,645 | 368,301 | ||||||
|
Class B issued and outstanding 1,414,517 and 1,468,462 |
141,452 | 146,846 | ||||||
|
Additional paid-in capital |
7,849,814 | 7,727,264 | ||||||
|
Accumulated other comprehensive earnings-Unrealized gain on available-for-sale securities, net of tax |
2,584,020 | 2,538,818 | ||||||
|
Retained earnings |
20,081,870 | 22,903,925 | ||||||
|
TOTAL STOCKHOLDERS' EQUITY |
31,031,801 | 33,685,154 | ||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY |
$ | 36,725,050 | $ | 39,368,174 | ||||
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
|
For the Years Ended |
||||||||
|
June 30, |
July 1, |
|||||||
|
2013 |
2012 |
|||||||
|
Operating Revenues: |
||||||||
|
Bowling and other |
$ | 16,914,493 | $ | 17,142,379 | ||||
|
Food, beverage and merchandise sales |
6,942,788 | 7,200,645 | ||||||
|
Total Operating Revenue |
23,857,281 | 24,343,024 | ||||||
|
Operating Expenses: |
||||||||
|
Employee compensation and benefits |
11,630,598 | 11,818,059 | ||||||
|
Cost of bowling and other services |
6,096,111 | 6,463,229 | ||||||
|
Cost of food, beverage and merchandise sales |
2,021,532 | 2,072,997 | ||||||
|
Depreciation and amortization |
1,421,616 | 1,456,509 | ||||||
|
General and administrative |
926,009 | 932,111 | ||||||
|
Total Operating Expense |
22,095,866 | 22,742,905 | ||||||
|
Gain on sale of land, buildings and equipment |
980 | 25,924 | ||||||
|
Operating Income |
1,762,395 | 1,626,043 | ||||||
|
Interest and dividend income |
435,141 | 499,873 | ||||||
|
Earnings from continuing operations before provision for income taxes |
2,197,536 | 2,125,916 | ||||||
|
Provision for income taxes from continuing Operations (Note 7) |
||||||||
|
Current |
888,027 | 547,193 | ||||||
|
Deferred |
(176,264 |
) |
79,484 | |||||
| 711,763 | 626,677 | |||||||
|
Earnings from continuing operations |
$ | 1,485,773 | $ | 1,499,239 | ||||
|
Gain (loss) from discontinued operations, net of tax (Note 10) |
1,669,449 | (74,398 |
) | |||||
|
Net Earnings |
$ | 3,155,222 | $ | 1,424,841 | ||||
|
Earnings per share-basic & diluted |
||||||||
|
Continuing operations |
$ | .29 | $ | .29 | ||||
|
Discontinued operations |
.32 | (.01 |
) | |||||
|
Net Earnings |
$ | .61 | $ | .28 | ||||
|
Weighted average shares outstanding |
5,151,784 | 5,151,471 | ||||||
|
Dividends paid |
$ | 5,949,951 | $ | 3,296,942 | ||||
|
Per share, dividends paid, Class A |
$ | 1.155 | $ | .64 | ||||
|
Per share, dividends paid, Class B |
$ | 1.155 | $ | .64 | ||||
|
Net Earnings |
$ | 3,155,222 | $ | 1,424,841 | ||||
|
Other comprehensive earnings- net of tax |
||||||||
|
Unrealized gain on available-for–sale securities net of tax of $27,800 and $157,484 |
45,202 | 255,864 | ||||||
|
Comprehensive earnings |
$ | 3,200,424 | $ | 1,680,705 | ||||
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
COMMON STOCK |
Accumulated |
|||||||||||||||||||||||||||
|
Class A Shares |
Class A Amount |
Class B Shares |
Class B Amount |
Additional Paid-In Capital |
Other Comprehensive Earnings |
Retained Earnings |
||||||||||||||||||||||
|
Balance, July 3, 2011 |
3,683,009 | $ | 368,301 | 1,468,462 | $ | 146,846 | $ | 7,727,264 | $ | 2,282,954 | $ | 24,776,026 | ||||||||||||||||
|
Cash dividends paid |
- | - | - | - | - | - | (2,472,707 |
) | ||||||||||||||||||||
|
Accrued dividends declared June 19, 2012 payable August 22, 2012 |
- | - | - | - | - | - | (824,235 |
) | ||||||||||||||||||||
|
Change in unrealized gain on available-for-sale securities (shown net of tax benefit) |
- | - | - | - | - | 255,864 | - | |||||||||||||||||||||
|
Net earnings for the year |
- | - | - | - | - | - | 1,424,841 | |||||||||||||||||||||
|
Balance, July 1, 2012 |
3,683,009 | $ | 368,301 | 1,468,462 | $ | 146,846 | $ | 7,727,264 | $ | 2,538,818 | $ | 22,903,925 | ||||||||||||||||
|
Conversion of shares - Class B to Class A |
53,945 | 5,394 | (53,945 |
) |
(5,394 |
) |
- | - | - | |||||||||||||||||||
|
Cash dividends paid |
- | - | - | - | - | - | (5,125,716 |
) | ||||||||||||||||||||
|
Shares issued for ESOP |
9,500 | 950 | - | - | 122,550 | - | - | |||||||||||||||||||||
|
Accrued dividends declared June 18, 2013, payable August 7, 2013 |
- | - | - | - | - | - | (851,561 |
) | ||||||||||||||||||||
|
Change in unrealized gain on available-for-sale securities (shown net of tax) |
- | - | - | - | - | 45,202 | - | |||||||||||||||||||||
|
Net earnings for the year |
- | - | - | - | - | - | 3,155,222 | |||||||||||||||||||||
|
Balance, June 30, 2013 |
3,746,454 | $ | 374,645 | 1,414,517 | $ | 141,452 | $ | 7,849,814 | $ | 2,584,020 | $ | 20,081,870 | ||||||||||||||||
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the Years Ended |
||||||||
|
June 30, |
July 1, |
|||||||
|
2013 |
2012 |
|||||||
|
Cash Flows From Operating Activities |
||||||||
|
Net earnings |
$ | 3,155,222 | $ | 1,424,841 | ||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
|
Depreciation and amortization (including discontinued operations) |
1,426,175 | 1,465,149 | ||||||
|
(Decrease) increase in deferred income tax |
(226,563 |
) |
79,485 | |||||
|
Gain on disposition of assets-net |
(2,769,046 |
) |
(25,924 |
) | ||||
|
Stock issuance – ESOP plan |
123,500 | - | ||||||
|
Changes in assets and liabilities |
||||||||
|
Decrease (increase) in inventories |
16,233 | (55,094 |
) | |||||
|
Decrease in prepaid and other |
50,300 | 87,820 | ||||||
|
Decrease (increase) in income taxes refundable |
255,389 | (37,671 |
) | |||||
|
Increase in income taxes payable |
151,227 | - | ||||||
|
Decrease in other long-term assets |
315 | 1,000 | ||||||
|
(Decrease) increase in accounts payable |
(27,926 |
) |
55,596 | |||||
|
Increase (decrease) in accrued expenses |
41,424 | (220,016 |
) | |||||
|
Increase (decrease) in other current liabilities |
15,306 | (6,416 |
) | |||||
|
(Decrease) increase in long-term deferred compensation |
(5,023 |
) |
516 | |||||
|
Net cash provided by operating activities |
2,206,533 | 2,769,286 | ||||||
|
Cash Flows From Investing Activities |
||||||||
|
Expenditures for land, building and equipment |
(770,342 |
) |
(1,608,587 |
) | ||||
|
Sale of assets |
2,852,250 | 32,150 | ||||||
|
Net sales and maturities of short-term investments |
2,913,906 | 2,434,101 | ||||||
|
Purchases of marketable securities |
(117,545 |
) |
(335,000 |
) | ||||
|
Increase in cash surrender value |
(29,093 |
) |
(24,832 |
) | ||||
|
Net cash provided by investing activities |
4,849,176 | 497,832 | ||||||
|
Cash Flows From Financing Activities |
||||||||
|
Payment of cash dividends |
(5,949,951 |
) |
(3,296,942 |
) | ||||
|
Net cash used in financing activities |
(5,949,951 |
) |
(3,296,942 |
) | ||||
|
Net Increase (decrease) in Cash and Equivalents |
1,105,758 | (29,824 |
) | |||||
|
Cash and Equivalents, Beginning of period |
2,332,022 | 2,361,846 | ||||||
|
Cash and Equivalents, End of period |
$ | 3,437,780 | $ | 2,332,022 | ||||
|
Supplemental Disclosures of Cash Flow Information |
||||||||
|
Cash Paid During the Period for: |
||||||||
|
Income taxes |
$ | 1,555,930 | $ | 548,430 | ||||
The accompanying notes to the consolidated financial statements are an integral part of these financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization
Bowl America Incorporated is engaged in the operation of 18 bowling centers, with food and beverage service in each center. Ten centers are located in metropolitan Washington D.C., one center in metropolitan Baltimore, Maryland, four centers in metropolitan Richmond, Virginia, and three centers in metropolitan Jacksonville, Florida. These 18 centers contain a total of 726 lanes. The Company operates in one segment.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiary corporations. All significant inter-company items have been eliminated in the consolidated financial statements.
Fiscal Year
The Company's fiscal year ends on the Sunday nearest to June 30. Fiscal year 2013 ended June 30, 2013, and fiscal year 2012 ended July 1, 2012. Both years consisted of 52 weeks.
Subsequent Events
The Company has evaluated subsequent events through the date of filing these financial statements with the Securities and Exchange Commission on September 26, 2013.
In August 2013, the Company exercised its option to extend the lease for one location for a five year period such that the lease now expires in 2019.
Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Significant estimates include the deferred compensation liability for executives and key employees including survivor benefits, depreciation expense, cash surrender value of officers' life insurance, the Federal and State income taxes (current and deferred), and market assumptions used in estimating the fair value of certain assets such as marketable securities and long-lived assets.
Revenue Recognition
The Company records revenue for fees charged for use of bowling lanes and other facilities at the time the services are provided. Food, beverage and merchandise sales are recorded as revenue at the time the product is given to the customer.
Depreciation and Amortization
Depreciation and amortization for financial statement purposes are calculated by use of the straight-line method. Amortization of leasehold improvements is calculated over the estimated useful life of the asset or term of the lease, whichever is shorter. The categories of property, plant, and equipment and the ranges of estimated useful lives on which depreciation and amortization rates are based are as follows:
Bowling lanes and equipment (in years) - Building and building improvements (in years) - Leasehold improvements (in years) - Amusement games (in years) -
3
10
10
39
5
15
3
5
Maintenance and repairs and minor replacements are charged to expense when incurred. Major replacements and betterments are capitalized. The accounts are adjusted for the sale or other disposition of property, and the resulting gain or loss is credited or charged to income.
Impairment of Long-Lived Assets
The Company reviews long-lived assets whenever events or changes indicate that the carrying amount of an asset may not be recoverable. In making such evaluations, the Company compares the expected future cash flows to the carrying amount of the assets. An impairment loss, equal to the difference between the assets' fair value and carrying value, is recognized when the estimated undiscounted future cash flows are less than the carrying amount.
Dividends
It is the Company's policy to accrue a dividend liability at the time the dividends are declared.
Advertising Expense
It is the Company's policy to expense advertising expenditures as they are incurred. The Company's advertising expenses for the years ending June 30, 2013, and July 1, 2012, were $449,710 and $616,148, respectively.
Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or market. Inventories consist of resale merchandise including food and beverage and bowling supplies.
Income Taxes
Deferred income tax liabilities and assets are based on the differences between the financial statement and tax bases of assets and liabilities, using tax rates currently in effect. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.
Investment Securities
All of the Company's readily marketable debt and equity securities are classified as available-for-sale. Accordingly, these securities are recorded at fair value with any unrealized gains and losses excluded from earnings and reported, net of deferred taxes, within a separate component of stockholders' equity until realized. Realized gains or losses on the sale of debt and equity securities are reported in earnings and determined using the adjusted cost of the specific security sold.
Earnings Per Share
Earnings per share basic and diluted, have been calculated using the weighted average number of shares of Class A and Class B common stock outstanding of 5,151,784, and 5,151,471, for fiscal years 2013 and 2012, respectively.
Comprehensive Earnings
A consolidated statement of comprehensive earnings reflecting the aggregation of net earnings and unrealized gain or loss on available-for-sale securities, the Company's principal components of other comprehensive earnings, has been presented for the years ended June 30, 2013 and July 1, 2012.
Cash and Cash Equivalents
For purposes of the consolidated statements of cash flows, the Company considers money market funds and certificates of deposits, with original maturities of three months or less to be cash equivalents. The Company maintains cash accounts which may exceed federally insured limits during the year, but does not believe that this results in any significant credit risk.
Other Current Liabilities
Other current liabilities include prize fund monies held by the Company for bowling leagues. The funds are returned to the leagues at the end of the league bowling season. At June 30, 2013 and July 1, 2012 other current liabilities included $289,521 and $287,273, respectively, in prize fund monies.
Reclassifications
Certain previous year amounts have been reclassified to conform with the current year presentation.
New Accounting Standards
In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2012-02 “Testing Indefinite-Lived Intangible Assets for Impairment”. This update provides entities with the option of first assessing qualitative factors to determine whether it is more likely than not that indefinite lived intangible assets are impaired. This standard is effective for fiscal years beginning after September 15, 2012 and early adoption is permitted. The Company’s does not believe this standard will have an impact on the Company’s financial statements as the Company holds no indefinite lived intangibles.
2. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consisted of the following:
June 30, 2013 July 1, 2012 Demand deposits and cash on hand Money market funds
$
2,216,729
$
1,486,497
1,221,051
845,525
$
3,437,780
$
2,332,022
The account balances at times exceed federally insured limits. The Company does not believe this poses any significant risk.
3. INVESTMENTS
The Company’s marketable securities are categorized as available-for-sale securities. The cost for marketable securities was determined using the specific identification method. The fair values of marketable securities are based on the quoted market price for those securities. Short-term investments consist of certificates of deposits with maturities of generally three months to one year. At June 30, 2013, the fair value of short-term investments was $949,815. At July 1, 2012, the fair value of short-term investments was $3,863,721. Non-current investments are marketable securities which primarily consist of telecommunications stocks and a mutual fund that invests in mortgage backed securities. Unrealized gains and losses are reported as a component of accumulated other comprehensive earnings in Stockholders’ Equity.
As of June 30, 2013, the Company had $16,925 of gross unrealized gains from its investments in federal agency mortgage backed securities which had a fair value of $3,430,670. As of July 1, 2012, $201,981 in gross unrealized gains were from its investments in federal agency mortgage backed securities which had a fair value of $3,498,182. The Company’s investments were was follows:
Original Cost Unrealized Gain Unrealized Loss Fair Value June 30, 2013 Equity securities Mutual fund Certificates of deposits July 1, 2012 Equity securities Mutual fund Certificates of deposits
$
888,998
$
4,159,182
$
(1,623
)
$
5,046,557
3,413,745
16,925
-
3,430,670
949,815
-
-
949,815
$
888,998
$
3,904,987
$
(5,487
)
$
4,788,498
3,296,201
201,981
-
3,498,182
3,863,721
-
-
3,863,721
During fiscal 2013 and fiscal 2012, the Company had certain equity securities with cumulative unrealized losses of $1,623 and $5,487 respectively. Management believes the unrealized losses are temporary and the Company has the ability and intent to hold these securities long enough to recover its investment.
Less than 12 months 12 Months or greater Total June 30, 2013 Fair Value Unrealized loss Fair Value Unrealized loss Fair Value Unrealized loss Equity securities
$
-
$
-
$
3,392
$
(1,623
)
$
3,392
$
(1,623
)
|
Less than 12 months |
12 Months or greater |
Total |
||||||||||||||||||||||
|
July 1, 2012 |
Fair Value |
Unrealized loss |
Fair Value |
Unrealized loss |
Fair Value |
Unrealized loss |
||||||||||||||||||
| Equity securities | $ | - | $ | - | $ | 5,373 | $ | (5,487 | ) | $ | 5,373 | $ | (5,487 | ) | ||||||||||
The equity securities portfolio includes the following stocks:
82,112 shares of AT&T 4,508 shares of Frontier Communications 412 shares of DexMedia 40,000 shares of Sprint Nextel 11,865 shares of Vodafone 2,520 shares of Manulife 4,398 shares of CenturyLink 774 shares of Teradata 475 shares of LSI 23,784 shares of Verizon 4,079 shares of Windstream 774 shares of NCR
There were no sales or exchanges of holdings in the years ended June 30, 2013 and July 1, 2012 other than the exchange of the Company’s shares of SuperMedia for shares of DexMedia as a result of the merger on April 30, 2013. The Company purchased 5,000 shares of Verizon during fiscal 2012.
As stated in Note 1, the Company records its readily marketable debt and equity securities at fair value. These assets are valued in accordance with a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
|
|
Level 1. |
Observable inputs such as quoted prices in active markets for identical assets or liabilities; |
|
|
Level 2. |
Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
|
|
Level 3. |
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
The fair value of these assets as of June 30, 2013 is as follows:
|
Description |
Quoted Price for Identical Assets (Level 1) |
Significant (Level 2) |
Significant |
Unrealized for the |
Cumulative Unrealized gains/(losses) as of |
|||||||||||||||
|
Equity securities |
$ | 5,046,557 | $ | - | $ | - | $ | 258,058 | $ | 4,157,559 | ||||||||||
|
Mutual fund |
3,430,670 | - | - | (185,056 | ) | 16,925 | ||||||||||||||
|
Certificates of deposits |
- | 949,815 | - | - | - | |||||||||||||||
|
TOTAL |
$ | 8,477,227 | $ | 949,815 | - | $ | 73,002 | $ | 4,174,484 | |||||||||||
The fair value of these assets as of July 1, 2012 was as follows:
|
Description |
Quoted Price for Identical Assets (Level 1) |
Significant (Level 2) |
Significant |
Unrealized for the |
Cumulative Unrealized gains/(losses) as of |
|||||||||||||||
|
Equity securities |
$ | 4,788,498 | $ | - | $ | - | $ | 374,386 | $ | 3,899,500 | ||||||||||
|
Mutual fund |
3,498,182 | - | - | 38,962 | 201,981 | |||||||||||||||
|
Certificates of deposits |
- | 3,863,721 | - | - | - | |||||||||||||||
|
TOTAL |
$ | 8,286,680 | $ | 3,863,721 | - | $ | 413,348 | $ | 4,101,481 | |||||||||||
The fair value of certificates of deposits is estimated using net present value techniques and comparing the values to certificates with similar terms.
4. LAND, BUILDINGS, AND EQUIPMENT
Land, buildings, and equipment, as cost, consisted of the following:
June 30, 2013 July 1,
2012 Buildings Leasehold and building improvements Bowling lanes and equipment Land Amusement games Bowling lanes and equipment not yet in use Less accumulated depreciation and amortization
$
18,114,523
$
18,205,337
7,922,989
7,958,366
22,155,815
22,891,473
10,555,210
10,590,450
790,222
818,190
585,379
276,621
60,124,138
60,740,437
38,144,649
38,021,911
$
21,979,489
$
22,718,526
Depreciation and amortization expense for buildings and equipment for fiscal years 2013 and 2012 was $1,426,175, and $1,465,149, respectively. The Company includes construction in progress costs in the bowling lanes and equipment not yet in use category until completion of the project. Bowling lanes and equipment not yet in use are not depreciated.
5. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company and its subsidiaries are obligated under long-term real estate lease agreements for two bowling centers. Certain of the Company's real estate leases provide for additional annual rents based upon total gross revenues and increases in real estate taxes and insurance.
At June 30, 2013, the minimum fixed rental commitments related to all non-cancelable leases, were as follows:
Year Ending 2014 2015 Total minimum lease payments
$
280,667
16,667
$
297,334
Net rent expense was as follows:
For the Years Ended June 30, 2013 July 1, 2012 Minimum rent under operating leases Excess percentage rents
$
288,000
$
288,000
-
-
$
288,000
$
288,000
Purchase Commitments
The Company's purchase commitments at June 30, 2013 are for materials, supplies, services and equipment as part of the normal course of business.
6. PROFIT-SHARING AND ESOP PLAN
The Company has two defined contribution plans. The first is a profit-sharing plan which, generally, covers all employees who on the last day of the fiscal year or December 29 have been employed for one year with at least one thousand hours of service. The Plan provides for Company contributions as determined by the Board of Directors. For the years ended June 30, 2013 and July 1, 2012, contributions in the amounts of $124,000 and $50,000, respectively, were charged to operating expense.
Effective March 31, 1987, the Company adopted an Employee Stock Ownership Plan (ESOP) which generally covers all individuals who were employed at the end of the fiscal year and had one thousand or more hours of service during that fiscal year. The Plan provides for Company contributions as determined by the Board of Directors. For fiscal year 2013, the Company contributed 9,500 shares of Bowl America common stock valued at $123,500, based on the market price on the date of contribution. The Company contributed $50,000 for fiscal year 2012. The Company has no defined benefit plan or other post retirement plan.
7. INCOME TAXES
The Company is required to analyze all material positions it has taken or plans to take in all tax returns that have been filed or should have been filed with all taxing authorities for all years still subject to challenge by those taxing authorities. If the position taken is “more-likely-than-not” to be sustained by the taxing authority on its technical merits and if there is more than a 50% likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction, the tax consequences of that position should be reflected in the taxpayer’s financial statements.
The Company had no material unrecognized tax benefits at June 30, 2013 nor does it expect any significant change in that status during the next twelve months. No accrued interest or penalties on uncertain tax positions have been included on the consolidated statements of earnings and comprehensive earnings or the consolidated balance sheet. Should the Company adopt tax positions for which it would be appropriate to accrue interest and penalties, such costs would be reflected in the tax expense for the period in which such costs accrued. The Company is subject to U.S. Federal income tax and to several state jurisdictions. Returns filed for tax periods ending after June 28, 2009 are still open to examination by those relevant taxing authorities.
The significant components of the Company's deferred tax assets and liabilities were as follows:
June 30, 2013 July 1, 2012 Deferred tax: Land, buildings, and equipment Unrealized gain on available-for-sale securities Dividends received Prepaid expenses and other Deferred tax liabilities
$
1,031,993
$
1,255,699
1,590,479
1,563,743
(29,247
)
(27,453
)
$
2,593,225
$
2,791,989
Income tax expense differs from the amounts computed by applying the U.S. Federal income tax rate to income before tax for the following reasons:
For the Years Ended 2013 2012 Taxes computed at statutory rate State income taxes, net of Federal income tax benefit Dividends received exclusion All other net
34.0
%
34.0
%
4.0
2.4
(1.3
)
(3.0
)
(1.2
)
(4.3
)
35.5
%
29.1
%
Income tax expense from continuing operations differs from the amounts computed by applying the
U.S. Federal income tax rate to income from continuing operations before tax for the following reasons:
For the Years Ended 2013 2012 Taxes computed at statutory rate State income taxes, net of Federal income tax benefit Dividends received exclusion All other net
34.0
%
34.0
%
4.0
2.4
(2.8
)
(2.9
)
(2.8
)
(4.0
)
32.4
%
29.5
%
8. STOCKHOLDERS' EQUITY
The Class A shares have one vote per share voting power. The Class B shares may vote ten votes per share and are convertible to Class A shares at the option of the stockholder. In the year ended June 30, 2013, 53,945 shares of Class B stock were converted to Class A stock.
At June 30, 2013, and July 1, 2012, the Company had $39,093 in employee loans related to the issuance of shares. These loans are secured by the shares of the Company's common stock acquired and are full recourse notes. The notes bear interest at rates of 3.5% to 5% and are payable over a term of three years from the date of the agreements which range from 2011 to 2013. These employee loans have been recorded as a reduction of additional paid-in capital.
9. DEFERRED COMPENSATION
Deferred compensation payable was a total of $45,236 at June 30, 2013, and $50,221 at July 1, 2012. The current portion of these amounts is $6,042 at June 30, 2013, and $6,004 at July 1, 2012, and is included in accrued expenses.
10. DISCONTINUED OPERATIONS
On May 30, 2013 the Company consummated the sale of Bowl America Winter Park in Orlando, Florida for $2,850,000 resulting in a gain on the sale of the land, building and equipment of $2,768,066. The location had been operating with negative cash flow. In the years ended June 30, 2013 and July 1, 2012, revenues for this location were $295,611 and $323,775, respectively.
|
June 30, 2013 |
July 1, 2012 |
|||||||
|
Gain on sale of Bowl America Winter Park |
$ | 2,768,066 | $ | - | ||||
|
Loss on Bowl America Winter Park operations |
(74,398 | ) | (117,018 | ) | ||||
|
Discontinued operations income (loss) before taxes |
2,693,668 | (117,018 | ) | |||||
|
Net income taxes and tax benefit |
1,024,219 | (42,620 | ) | |||||
|
Gain (loss) from discontinued operations, net of tax |
$ | 1,669,449 | $ | (74,398 | ) | |||
-27-
Exhibit 20 to Form 10-K
|
For Immediate Release |
September 26, 2013 |
BOWL AMERICA REPORTS FISCAL YEAR EARNINGS
Bowl America Incorporated today reported earnings per share for its fiscal fourth quarter ended June 30, 2013, were $.31, including a gain on the sale of its location in Winter Park, Florida in May 2013. Without the sale, the quarter would have shown a loss of $.02 per share. Fiscal year 2013 earnings were $.61 per share, with $.32 contributed by the discontinued operation and sale at Winter Park. Earnings per share for the prior year fourth quarter were $.01 and were $.28 for the 2012 fiscal year.
A more detailed explanation of results is available in the Company’s Form 10-K filing available through the website www.bowlamericainc.com. Bowl America operates 18 bowling centers and its stock trades on the NYSE MKT with the symbol BWLA.
* * * *
BOWL AMERICA INCORPORATED
Results of Operations
|
Thirteen Weeks Ended 06/30/13 |
Thirteen Weeks Ended 07/01/12 |
Fifty-two Weeks Ended 06/30/13 |
Fifty-two Weeks Ended 07/01/12 |
|||||||||||||
|
Operating Revenues |
||||||||||||||||
|
Bowling and other |
$ | 3,517,868 | $ | 3,457,789 | $ | 16,914,493 | $ | 17,142,379 | ||||||||
|
Food, beverage and merchandise sales |
1,460,261 | 1,462,291 | 6,942,788 | 7,200,645 | ||||||||||||
| 4,978,129 | 4,920,080 | 23,857,281 | 24,343,024 | |||||||||||||
|
Operating expenses excluding depreciation and amortization |
5,015,751 | 4,908,430 | 20,674,250 | 21,286,396 | ||||||||||||
|
Depreciation and amortization |
280,532 | 263,974 | 1,421,616 | 1,456,509 | ||||||||||||
|
Gain on sale of assets |
980 | 25,924 | 980 | 25,924 | ||||||||||||
|
Interest and dividend income |
86,827 | 109,131 | 435,141 | 499,873 | ||||||||||||
|
Earnings (loss) from continuing operations before taxes |
(230,347 |
) |
(117,269 |
) |
2,197,536 | 2,125,916 | ||||||||||
|
Earnings (loss) from continuing operations |
$ | (91,604 |
) |
$ | 42,592 | $ | 1,485,773 | $ | 1,499,239 | |||||||
|
Earnings (loss) from discontinued operations-net of tax |
1,703,881 | (13,002 |
) |
1,669,449 | (74,398 |
) | ||||||||||
|
Net Earnings |
1,612,277 | 29,590 | 3,155,222 | 1,424,841 | ||||||||||||
|
Comprehensive Earnings |
$ | (190,203 |
) |
$ | 362,111 | $ | 3,200,424 | $ | 1,680,705 | |||||||
|
Weighted average shares outstanding |
5,142,724 | 5,151,471 | 5,151,784 | 5,151,471 | ||||||||||||
|
Earnings per share from continuing operations |
(.02 |
) |
.01 | .29 | .29 | |||||||||||
|
Earnings per share from discontinued operations |
.33 | .00 | .32 | (.01 |
) | |||||||||||
|
EARNINGS PER SHARE |
.31 | .01 | .61 | .28 | ||||||||||||
* * * *
SUMMARY OF FINANCIAL POSITION
Dollars in Thousands
|
06/30/13 |
07/01/12 |
|||||||
|
ASSETS |
||||||||
|
Total current assets including cash and short-term investment of $4,388 and $6,196 |
$ | 5,535 | $ | 7,659 | ||||
|
Property and investments |
31,190 | 31,709 | ||||||
|
TOTAL ASSETS |
$ | 36,725 | $ | 39,368 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Total current liabilities |
$ | 3,054 | $ | 2,912 | ||||
|
Other liabilities |
2,639 | 2,771 | ||||||
|
Stockholders' equity |
31,032 | 33,685 | ||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ | 36,725 | $ | 39,368 | ||||
Exhibit 31.1 to Form 10-K
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
Or 15d-14(a) under the Securities Exchange Act of 1934
I, Leslie H. Goldberg, certify that:
|
1. |
I have reviewed this Annual Report on Form 10-K of Bowl America Incorporated; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
|
|
a) |
All significant deficiencies and material weaknesses in the design oroperation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: September 26, 2013
/s/ Leslie H. Goldberg
Leslie H. Goldberg
Chief Executive Officer
Exhibit 31.2 to Form 10K
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
Or 15d-14(a) under the Securities Exchange Act of 1934
I, Cheryl A. Dragoo, certify that:
|
1. |
I have reviewed this Annual Report on Form 10-K of Bowl America Incorporated; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
|
5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
|
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: September 26, 2013
/s/ Cheryl A. Dragoo
Cheryl A. Dragoo
Chief Financial Officer
Exhibit 32 to Form 10K
Written Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. 1350
Solely for the purposes of complying with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Bowl America Incorporated (the "Company"), respectively, hereby certify, based on our knowledge, that the Annual Report on Form 10-K of the Company for the year ended June 30, 2013, (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Leslie H. Goldberg
Leslie H. Goldberg
Chief Executive Officer
/s/ Cheryl A. Dragoo
Cheryl A. Dragoo
Chief Financial Officer
Date: September 26, 2013
|
Note 9 - Deferred Compensation
|
12 Months Ended |
|---|---|
|
Jun. 30, 2013
|
|
| Compensation Related Costs [Abstract] | |
| Compensation Related Costs, General [Text Block] | 9. DEFERRED COMPENSATION Deferred compensation payable was a total of $45,236 at June 30, 2013, and $50,221 at July 1, 2012. The current portion of these amounts is $6,042 at June 30, 2013, and $6,004 at July 1, 2012, and is included in accrued expenses. |
|
Consolidated Balance Sheets (Parentheticals) (USD $)
|
Jun. 30, 2013
|
Jul. 01, 2012
|
|---|---|---|
| Preferred stock, par value (in Dollars per share) | $ 10 | $ 10 |
| Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
| Preferred stock, shares unissued | 2,000,000 | 2,000,000 |
| Common stock, shares outstanding | 5,151,784 | 5,151,471 |
|
Common Class A [Member]
|
||
| Common stock, par value (in Dollars per share) | $ 0.10 | $ 0.10 |
| Common stock, shares issued | 3,746,454 | 3,683,009 |
| Common stock, shares outstanding | 3,746,454 | 3,683,009 |
| Common stock, shares authorized | 10,000,000 | 10,000,000 |
|
Common Class B [Member]
|
||
| Common stock, par value (in Dollars per share) | $ 0.10 | $ 0.10 |
| Common stock, shares issued | 1,414,517 | 1,468,462 |
| Common stock, shares outstanding | 1,414,517 | 1,468,462 |
| Common stock, shares authorized | 10,000,000 | 10,000,000 |
|
Note 2 - Cash and Cash Equivalents
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||
| Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash and Cash Equivalents Disclosure [Text Block] | 2. CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of the following:
The account balances at times exceed federally insured limits. The Company does not believe this poses any significant risk. |
|||||||||||||||||||||||||||||||||||||||||||||
|
Note 5 - Commitments and Contingencies (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] |
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| Schedule of Rent Expense [Table Text Block] |
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Note 10 - Discontinued Operations
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 10. DISCONTINUED OPERATIONS On May 30, 2013 the Company consummated the sale of Bowl America Winter Park in Orlando, Florida for $2,850,000 resulting in a gain on the sale of the land, building and equipment of $2,768,066. The location had been operating with negative cash flow. In the years ended June 30, 2013 and July 1, 2012, revenues for this location were $295,611 and $323,775, respectively.
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Note 5 - Commitments and Contingencies (Details) - Minimum Lease Commitments (USD $)
|
Jun. 30, 2013
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|---|---|
| Minimum Lease Commitments [Abstract] | |
| 2014 | $ 280,667 |
| 2015 | 16,667 |
| Total minimum lease payments | $ 297,334 |
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Note 10 - Discontinued Operations (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] |
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Note 10 - Discontinued Operations (Details) (USD $)
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1 Months Ended | 12 Months Ended | |
|---|---|---|---|
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May 30, 2013
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Jun. 30, 2013
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Jul. 01, 2012
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| Discontinued Operations and Disposal Groups [Abstract] | |||
| Proceeds from Divestiture of Businesses | $ 2,850,000 | ||
| Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 2,768,066 | 2,768,066 | |
| Disposal Group, Including Discontinued Operation, Revenue | $ 295,611 | $ 323,775 | |
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Note 6 - Profit-sharing and ESOP Plan (Details) (USD $)
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12 Months Ended | |
|---|---|---|
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Jun. 30, 2013
|
Jul. 01, 2012
|
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| Note 6 - Profit-sharing and ESOP Plan (Details) [Line Items] | ||
| Defined Contribution Plan Number Of Plans | 2 | |
| Defined Contribution Plan Service Requirement | 1 year | |
| Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 124,000 | $ 50,000 |
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ESOP [Member]
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||
| Note 6 - Profit-sharing and ESOP Plan (Details) [Line Items] | ||
| Employee Stock Ownership Plan Service Requirement | 1000 hours | |
| Stock Issued During Period, Shares, Employee Stock Ownership Plan (in Shares) | 9,500 | |
| Stock Issued During Period, Value, Employee Stock Ownership Plan | $ 123,500 | $ 50,000 |
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Minimum [Member]
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| Note 6 - Profit-sharing and ESOP Plan (Details) [Line Items] | ||
| Defined Contribution Plan Service Requirement | 1000 hours | |
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Note 3 - Investments (Details) - Summary of Investments (USD $)
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12 Months Ended | |
|---|---|---|
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Jun. 30, 2013
|
Jul. 01, 2012
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Equity Securities [Member]
|
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| Schedule of Available-for-sale Securities [Line Items] | ||
| Original Cost | $ 888,998 | $ 888,998 |
| Unrealized Gain | 4,159,182 | 3,904,987 |
| Unrealized Loss | (1,623) | (5,487) |
| Fair Value | 5,046,557 | 4,788,498 |
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Mutual Funds [Member]
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| Schedule of Available-for-sale Securities [Line Items] | ||
| Original Cost | 3,413,745 | 3,296,201 |
| Unrealized Gain | 16,925 | 201,981 |
| Unrealized Loss | 0 | 0 |
| Fair Value | 3,430,670 | 3,498,182 |
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Certificates of Deposit [Member]
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| Schedule of Available-for-sale Securities [Line Items] | ||
| Original Cost | 949,815 | 3,863,721 |
| Unrealized Gain | 0 | 0 |
| Unrealized Loss | 0 | 0 |
| Fair Value | $ 949,815 | $ 3,863,721 |
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Note 7 - Income Taxes (Details) - Income Tax Reconciliation
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12 Months Ended | |
|---|---|---|
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Jun. 30, 2013
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Jul. 01, 2012
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| Note 7 - Income Taxes (Details) - Income Tax Reconciliation [Line Items] | ||
| Taxes computed at statutory rate | 34.00% | 34.00% |
| State income taxes, net of Federal income tax benefit | 4.00% | 2.40% |
| Dividends received exclusion | (1.30%) | (3.00%) |
| All other net | (1.20%) | (4.30%) |
| 35.50% | 29.10% | |
|
Continuing Operations [Member]
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| Note 7 - Income Taxes (Details) - Income Tax Reconciliation [Line Items] | ||
| Taxes computed at statutory rate | 34.00% | 34.00% |
| State income taxes, net of Federal income tax benefit | 4.00% | 2.40% |
| Dividends received exclusion | (2.80%) | (2.90%) |
| All other net | (2.80%) | (4.00%) |
| 32.40% | 29.50% | |
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Note 7 - Income Taxes (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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| Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
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Consolidated Statements of Earnings and Comprehensive Earnings (Parentheticals) (USD $)
|
12 Months Ended | |
|---|---|---|
|
Jun. 30, 2013
|
Jul. 01, 2012
|
|
| Unrealized gain on available-for–sale securities, tax | $ 27,800 | $ 157,484 |
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Note 3 - Investments
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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| Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | 3. INVESTMENTS The Company’s marketable securities are categorized as available-for-sale securities. The cost for marketable securities was determined using the specific identification method. The fair values of marketable securities are based on the quoted market price for those securities. Short-term investments consist of certificates of deposits with maturities of generally three months to one year. At June 30, 2013, the fair value of short-term investments was $949,815. At July 1, 2012, the fair value of short-term investments was $3,863,721. Non-current investments are marketable securities which primarily consist of telecommunications stocks and a mutual fund that invests in mortgage backed securities. Unrealized gains and losses are reported as a component of accumulated other comprehensive earnings in Stockholders’ Equity. As of June 30, 2013, the Company had $16,925 of gross unrealized gains from its investments in federal agency mortgage backed securities which had a fair value of $3,430,670. As of July 1, 2012, $201,981 in gross unrealized gains were from its investments in federal agency mortgage backed securities which had a fair value of $3,498,182. The Company’s investments were was follows:
During fiscal 2013 and fiscal 2012, the Company had certain equity securities with cumulative unrealized losses of $1,623 and $5,487 respectively. Management believes the unrealized losses are temporary and the Company has the ability and intent to hold these securities long enough to recover its investment.
The equity securities portfolio includes the following stocks:
There were no sales or exchanges of holdings in the years ended June 30, 2013 and July 1, 2012 other than the exchange of the Company’s shares of SuperMedia for shares of DexMedia as a result of the merger on April 30, 2013. The Company purchased 5,000 shares of Verizon during fiscal 2012. As stated in Note 1, the Company records its readily marketable debt and equity securities at fair value. These assets are valued in accordance with a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
The fair value of these assets as of June 30, 2013 is as follows:
The fair value of these assets as of July 1, 2012 was as follows:
The fair value of certificates of deposits is estimated using net present value techniques and comparing the values to certificates with similar terms. |
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Note 1 - Organization and Significant Accounting Policies
|
12 Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jun. 30, 2013
|
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| Accounting Policies [Abstract] | |||||||||||||||||
| Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Bowl America Incorporated is engaged in the operation of 18 bowling centers, with food and beverage service in each center. Ten centers are located in metropolitan Washington D.C., one center in metropolitan Baltimore, Maryland, four centers in metropolitan Richmond, Virginia, and three centers in metropolitan Jacksonville, Florida. These 18 centers contain a total of 726 lanes. The Company operates in one segment. Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiary corporations. All significant inter-company items have been eliminated in the consolidated financial statements. Fiscal Year The Company's fiscal year ends on the Sunday nearest to June 30. Fiscal year 2013 ended June 30, 2013, and fiscal year 2012 ended July 1, 2012. Both years consisted of 52 weeks. Subsequent Events The Company has evaluated subsequent events through the date of filing these financial statements with the Securities and Exchange Commission on September 26, 2013. In August 2013, the Company exercised its option to extend the lease for one location for a five year period such that the lease now expires in 2019. Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Significant estimates include the deferred compensation liability for executives and key employees including survivor benefits, depreciation expense, cash surrender value of officers' life insurance, the Federal and State income taxes (current and deferred), and market assumptions used in estimating the fair value of certain assets such as marketable securities and long-lived assets. Revenue Recognition The Company records revenue for fees charged for use of bowling lanes and other facilities at the time the services are provided. Food, beverage and merchandise sales are recorded as revenue at the time the product is given to the customer. Depreciation and Amortization Depreciation and amortization for financial statement purposes are calculated by use of the straight-line method. Amortization of leasehold improvements is calculated over the estimated useful life of the asset or term of the lease, whichever is shorter. The categories of property, plant, and equipment and the ranges of estimated useful lives on which depreciation and amortization rates are based are as follows:
Maintenance and repairs and minor replacements are charged to expense when incurred. Major replacements and betterments are capitalized. The accounts are adjusted for the sale or other disposition of property, and the resulting gain or loss is credited or charged to income. Impairment of Long-Lived Assets The Company reviews long-lived assets whenever events or changes indicate that the carrying amount of an asset may not be recoverable. In making such evaluations, the Company compares the expected future cash flows to the carrying amount of the assets. An impairment loss, equal to the difference between the assets' fair value and carrying value, is recognized when the estimated undiscounted future cash flows are less than the carrying amount. Dividends It is the Company's policy to accrue a dividend liability at the time the dividends are declared. Advertising Expense It is the Company's policy to expense advertising expenditures as they are incurred. The Company's advertising expenses for the years ending June 30, 2013, and July 1, 2012, were $449,710 and $616,148, respectively. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market. Inventories consist of resale merchandise including food and beverage and bowling supplies. Income Taxes Deferred income tax liabilities and assets are based on the differences between the financial statement and tax bases of assets and liabilities, using tax rates currently in effect. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. Investment Securities All of the Company's readily marketable debt and equity securities are classified as available-for-sale. Accordingly, these securities are recorded at fair value with any unrealized gains and losses excluded from earnings and reported, net of deferred taxes, within a separate component of stockholders' equity until realized. Realized gains or losses on the sale of debt and equity securities are reported in earnings and determined using the adjusted cost of the specific security sold. Earnings Per Share Earnings per share basic and diluted, have been calculated using the weighted average number of shares of Class A and Class B common stock outstanding of 5,151,784, and 5,151,471, for fiscal years 2013 and 2012, respectively. Comprehensive Earnings A consolidated statement of comprehensive earnings reflecting the aggregation of net earnings and unrealized gain or loss on available-for-sale securities, the Company's principal components of other comprehensive earnings, has been presented for the years ended June 30, 2013 and July 1, 2012. Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, the Company considers money market funds and certificates of deposits, with original maturities of three months or less to be cash equivalents. The Company maintains cash accounts which may exceed federally insured limits during the year, but does not believe that this results in any significant credit risk. Other Current Liabilities Other current liabilities include prize fund monies held by the Company for bowling leagues. The funds are returned to the leagues at the end of the league bowling season. At June 30, 2013 and July 1, 2012 other current liabilities included $289,521 and $287,273, respectively, in prize fund monies. Reclassifications Certain previous year amounts have been reclassified to conform with the current year presentation. New Accounting Standards In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2012-02 “Testing Indefinite-Lived Intangible Assets for Impairment”. This update provides entities with the option of first assessing qualitative factors to determine whether it is more likely than not that indefinite lived intangible assets are impaired. This standard is effective for fiscal years beginning after September 15, 2012 and early adoption is permitted. The Company’s does not believe this standard will have an impact on the Company’s financial statements as the Company holds no indefinite lived intangibles. |
|
Note 7 - Income Taxes (Details) (USD $)
|
12 Months Ended |
|---|---|
|
Jun. 30, 2013
|
|
| Income Tax Disclosure [Abstract] | |
| Unrecognized Tax Benefits | $ 0 |
| Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 |
| Open Tax Year | 2009 |
|
Note 3 - Investments (Details) - Unrealized Losses Equity Securites (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
|---|---|---|
|
Jun. 30, 2013
|
Jul. 01, 2012
|
|
| Unrealized Losses Equity Securites [Abstract] | ||
| Fair Value Less Than Twelve Months | $ 0 | $ 0 |
| Unrealized Loss Less Than Twelve Months | 0 | 0 |
| Fair Value Twelve Months Or Greater | 3,392 | 5,373 |
| Unrealized Loss Twelve Months Or Greater | (1,623) | (5,487) |
| Total Fair Value | 3,392 | 5,373 |
| Total Unrealized Loss | $ (1,623) | $ (5,487) |