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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, 2002 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
Common stock (par value $.10) American Stock Exchange
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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K, Section 229.405 of this Chapter, 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. YES [X] NO [ ]
As of August 19, 2002, 3,666,376 Class A common shares were outstanding,
and the aggregate market value of the common shares (based upon the closing
price of these shares on the American Stock Exchange) of Bowl America
Incorporated held by nonaffiliates was approximately $43 million; 1,483,620
Class B common shares were outstanding. Class B common shareholders have the
right to convert their Class B common to Class A common stock on a share for
share basis. If the Class B shares were converted to Class A shares as of
August 19, 2002, the total aggregate market value for both classes of common
stock would be approximately $60 million. (This includes the amount of
shares held by all officers and directors as a group and by anyone known to
own more than 5% of the stock.)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of registrant's definitive proxy statements, which will be filed
with the Commission not later than 120 days after June 30 2002 are incorpor-
ated into Part III of this Form 10-K. Portions of Bowl America's 2002 Annual
Report are incorporated by reference in Part II, Items 5,6,7 and 8.
BOWL AMERICA INCORPORATED
INDEX TO FISCAL 2002 10-K FILING
PART I
Page
Cover Page
Documents Incorporated by Reference
Index
ITEM 1. Business
(a) General Development of Business 1
(b) Financial Information about Industry Segments 1
(c) Narrative Description of Business 1
(d) Foreign Operations 1
ITEM 2. Properties 2
ITEM 3. Legal Proceedings 2
ITEM 4. Submission of Matters to a Vote of Security Holders 2
PART II
ITEM 5. Market for Registrant's Common Equity and Related
Stockholder Matters 2
ITEM 6. Selected Financial Data 2
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 2
ITEM 7a.Quantitative and Qualitative Disclosure About Market Risk 2
ITEM 8. Financial Statements and Supplementary Data 2
ITEM 9. Changes in and Disagreements with Accountants and
Financial Disclosure 2
PART III
ITEM 10.Directors and Executive Officers of the Registrant 3
ITEM 11.Executive Compensation 3
ITEM 12.Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
(a) Security Ownership of Certain Beneficial Owners 3
(b) Security Ownership of Management 3
(c) Changes in Control 3
(d) Securities Authorized for Issuance Under Equity
Compensation Plans 3
BOWL AMERICA INCORPORATED
INDEX TO FISCAL 2002 10-K FILING
PART III
continued
Page
ITEM 13.Certain Relationships and Related Transactions
(a) Transactions with Management and Others 3
(b) Certain Business Relationships 3
(c) Indebtedness of Management 3
(d) Transactions with Promoters 3
PART IV
ITEM 14.Exhibits, Financial Statements and Reports on Form 8-K
(a)1. Financial Statements 3
(a)2. Exhibits 4
(b) Reports on Form 8-K 4
Signatures 5-6
Certifications 7
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 of the past fiscal year, the Company and its wholly-
owned subsidiaries operated 19 bowling centers.
During fiscal year 2002 the Company closed two leased centers at the
expiration of their leases. Bowl America Reisterstown, in metropolitan
Baltimore, Maryland, was operating at break-even when it closed in August 2001.
Bowl America Duke, located in the metropolitan Washington D.C. area, closed
in May 2002 after the Company was unable to negotiate a new lease.
(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. Merchandise sales, including food and beverages, were approximately
30% of operating revenues. The balance of operating revenues (approximately
70%) represents fees for bowling and related services.
(c) Narrative Description of Business
As of September 1, 2002 the Registrant and its subsidiaries operated
11 bowling centers in the greater metropolitan area of Washington, D.C., one
bowling center in the greater metropolitan area of Baltimore, Maryland, one
bowling center in Orlando, Florida, three bowling centers in the greater
metropolitan area of Jacksonville, Florida, and three bowling centers in the
greater metropolitan area of Richmond, Virginia. These 19 bowling centers
contain a total of 746 lanes.
These establishments are fully air-conditioned with facilities for
service of food and beverages, game rooms, rental lockers, and playroom
facilities. All centers provide shoes for rental, and bowling balls are
provided free. In addition, each center retails bowling accessories.
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 field. The principal method of
competition is the quality of service furnished to the Company's customers.
Its primary competitors are two large bowling equipment manufacturers,
Brunswick Corporation and AMF, Inc.
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 700.
(d) Foreign Operations
The Company has no foreign operations.
ITEM 2. PROPERTIES
The Company's general offices are located at 6446 Edsall Road,
Alexandria, Virginia 22312.
Two of the Company's bowling centers are located in leased premises,
and the remaining seventeen centers are owned by the Company. The Company's
leases expire from 2009 through 2014. In addition to the above, there is one
ground lease which expires in 2058. 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter ended June 30, 2002.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS
The information set forth in the section entitled "Market
Information", "Holders", and "Dividends" on page 3 of the Company's June 30,
2002 Annual Report is incorporated by reference herein.
ITEM 6. SELECTED FINANCIAL DATA
The information set forth in the section entitled "Selected Financial
Data" on page 3 of the Company's June 30, 2002 Annual Report is incorporated by
reference herein.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth in the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
page 2 of the Company's June 30, 2002 Annual Report is incorporated by
reference herein.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and related notes thereto, the
Independent Auditors' Report and the Selected Quarterly Financial Data
(unaudited), as contained on pages 4 through 12 of the Company's June 30, 2002
Annual Report, are incorporated by reference herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the information
called for by this item regarding directors 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
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 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a)1. Financial Statements
The following consolidated financial statements of Bowl America
Incorporated and its subsidiaries are incorporated by reference
in Part II, Item 8:
Independent auditors' report
Consolidated balance sheets - June 30, 2002 and July 1, 2001
Consolidated statements of earnings and comprehensive earnings
- years ended June 30, 2002, July 1, 2001, and July 2, 2000
Consolidated statements of stockholders' equity - years ended
June 30, 2002, July 1, 2001, and July 2, 2000
Consolidated statements of cash flows - years ended
June 30, 2002, July 1, 2001, and July 2, 2000
Notes to the consolidated financial statements - years ended
June 30, 2002, July 1, 2001, and July 2, 2000
(a)2. Exhibits:
3(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(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(c) By-laws of the Registrant (Incorporated by reference from
exhibit 3 to the Annual Report for 1989 on Form 10-K for fiscal
year ended July 2, 1989.)
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.
99.1 Written statement of Chief Executive Officer
99.2 Written statement of Chief Financial Officer
(b) Reports on Form 8-K:
None
BOWL AMERICA INCORPORATED
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
BOWL AMERICA INCORPORATED
Leslie H. Goldberg
Leslie H. Goldberg
President and Principal Executive
& Operating Officer
Date: September 26, 2002
Ruth Macklin
Ruth Macklin
Senior Vice President-Treasurer
Principal Financial Officer
Date: September 26, 2002
Cheryl A. Dragoo
Cheryl A. Dragoo
Assistant Treasurer and Controller
Principal Accounting Officer
Date: September 26, 2002
BOWL AMERICA INCORPORATED
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
Leslie H. Goldberg
President, Principal Executive
& Operating Officer & Director
Date: September 26, 2002
Ruth Macklin A. Joseph Levy
Senior Vice President-Treasurer Senior Vice President-Secretary
and Director and Director
Date: September 26, 2002 Date: September 26, 2002
Warren T. Braham Stanley H. Katzman
Director Director
Date: September 26, 2002 Date: September 26, 2002
Allan L. Sher Merle Fabian
Director Director
Date: September 26, 2002 Date: September 26, 2002
Irvin Clark
Director
Date: September 26, 2002
CERTIFICATIONS
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 annual 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 annual report; and
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.
Leslie H. Goldberg
President
Chief Executive Officer
Date: September 26, 2002
I, Ruth Macklin, certify that:
1. I have reviewed this annual report on Form 10-K of Bowl America
Incorporated;
2. Based on my knowledge, this annual 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 circumstamces under which
such statements were made, not misleading with respect to the period
covered by this annual report; and
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.
Ruth Macklin
Vice President and Treasurer
Chief Financial Officer
Date: September 26, 2002
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
PRESIDENT'S LETTER
September 18, 2002
Dear Fellow Owners:
Breakfast becomes more difficult if you combine it with a look at the
business pages of your local newspaper. My paper recently featured
an article on the continuing increase in health insurance rates. All
summer I read about the drought, never the best time for the bowling
business. AOL and WorldCom laid off workers in the area surrounding
Dulles airport, where much of our successful expansion in the 90's
was centered. And it takes only a bankbook, not a newspaper, to keep
you informed about what has happened to interest rates, which influence
the return on the cash portion of our reserves. Add to these external
factors our inability to renew the lease at one of our profitable centers
and you can see that this is a year in which we will have our work cut out
for us.
Many of the factors that enabled us to survive previous recessions are in
place today. We have a strong financial position, we were frugal during the
good times, we have good locations and we have what is collectively the best
bowling center staff in the business. This is the third year of a declining
stock market, and once again, there has been no legislation designed to help
companies prosper. There is little difference from 1993, when I wrote in
our annual report...
"However, we now have a tax bill that favors real estate
speculators over building owners, debt over reinvested
equity, and traders of stock over long-term owners of
businesses. The failure to tailor the new tax law to
the limitless prosperity this country should have almost
guarantees a return of the worst of the excesses-too much
debt, allocation of capital to mergers and acquisitions
rather than expansion, and uncontrolled speculation.
The problem did not begin with this year's tax writers.
It is difficult to envision an economy aimed at creating
long-term growth that allows corporate governance to be
controlled by a body named The Securities and Exchange
Commission. Businesses should be structured to succeed,
not to sell or exchange."
The 90's focus on trading pieces of paper (stock shares) instead of investing
in companies has had its predictable result. Many investors are left with
depressed portfolios at just the time they need their money. Sadly, most
people did not get a fair share from the rising market. According to a
prominent fund manager, individual mutual fund accounts grew at less than
half the rate of the funds themselves because most of us buy high and sell
low. Furthermore, most actual funds didn't perform as well as the market
as a whole. Profits from trading have proven to not be a fair way to
distribute the results of corporate success.
The financial community, which fueled the bubble, has succeeded in deflecting
any real solutions to these problems. Rather, honest companies are faced with
a variety of new regulations being imposed without any public discussion of
their impact on the profitability and inventiveness of the companies or on the
efficiency of the economy as a whole.
I have always held that our objective should be to help our shareholders
prosper through their ownership of Bowl America. We expect this will be our
thirty-first consecutive year of increased per share dividends. More and more
respected voices are now supporting dividends as a method of rewarding
ownership and promoting corporate honesty. Dividends have the benefit of
being paid in cash, not accounting fantasy. The disadvantage is that they are
subject to double taxation. But tax laws can and should be changed.
Your support, both in terms of your encouragement and your continuing to hold
your shares, is our best indication that Bowl America has met your investment
needs.
Leslie H.Goldberg, President
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash flow provided by operating activities in fiscal 2002 was $5,955,000 which
was sufficient to meet day-to-day cash needs. Short-term investments consist-
ing mainly of U.S. Treasury Notes and Bills, cash and cash equivalents
totaled $9,818,000 at the end of fiscal 2002 compared to $7,575,000 at the
end of fiscal 2001.
The Company expended approximately $1,300,000 for the purchase of bowling
equipment and amusement games during fiscal 2002. Further equipment purchases
are planned as the Company continues to improve its facilities. In addition
the Company is seeking property for the development of new locations. Cash
and cash flows are sufficient to finance all contemplated purchases and
construction. The Company's position in telecommunication stocks is an
additional source of expansion capital. These securities are carried at their
fair value on the last day of the year. The value of these securities on
June 30, 2002 was $4 million or approximately $2.2 million lower than at
July 1, 2001.
Dividends per share increased for the thirtieth consecutive year. Cash
dividends of $2.4 million and a 5% stock dividend were paid to shareholders
during the fiscal year. All earnings per share figures in this report reflect
the effect of the stock dividend. In June 2002, the Company declared a $.12
per share dividend, paid in August 2002, which was an increase over the
previous quarterly dividend. While no factors requiring a change in the
dividend rate are yet apparent, the Board of Directors decides the amount and
timing of any dividend at its quarterly meeting based on its appraisal of the
state of the business and estimate of future opportunities.
Two leased locations were closed during fiscal 2002. In the first quarter, a
center operating at break-even was closed at the end of its lease. During the
fourth quarter a profitable location ceased operations after the Company was
unable to negotiate a new lease.
RESULTS OF OPERATIONS
In the peak bowling season of fiscal 2002 twenty centers were in operation.
Twenty-one locations were in operation during the comparable season in fiscal
2001 and in fiscal 2000 there were 22 centers in operation. Fiscal years 2002
and 2001 each consisted of 52-weeks, while fiscal 2000 was a 53-week year.
The changes in the number of centers in operation and the extra week of
business in fiscal 2000 affected all income, expense and comparisons for the
periods presented in this report.
Operating revenues increased 1% in fiscal 2002 and 2% in the prior fiscal year.
Bowling and other revenue increased slightly in both years. Although total
linage decreased from the prior year, linage at comparable locations in
operation for the peak seasons of both fiscal 2002 and 2001 increased slightly.
Increases in the average game rate contributed to the rise in revenues in both
years.
Food, beverage and merchandise sales climbed 4% in the current fiscal year and
5% in the prior year. Cost of sales were up 12% in the current year partially
due to promotional pricing on some resale bowling equipment. In the prior
fiscal year cost of sales rose 6%.
Total operating expense decreased slightly in the current year and increased
6% in the prior year. Costs for employee compensation and benefits increased
3% in both the current and prior fiscal years.
Maintenance costs decreased 10% in the current fiscal year after rising 27%
in the prior year period when the Company resurfaced the majority of
its wooden bowling lanes. Supplies expenses fell 5% in fiscal 2002 but were
flat in the comparable prior year period. Advertising expense dropped 4% and
8% respectively in the two fiscal periods. Utility costs decreased 1% in the
current year after a 3% increase in the previous year period partially as a
result of the milder winter in fiscal 2002.
Rent expense decreased 1% in the current year and 19% in the prior year. The
prior year decrease reflects both the closing of a leased location and the
purchase of a formerly leased location. Insurance costs jumped 32% in the
current fiscal year after an increase of 15% in the prior fiscal year. Higher
premiums as a result of the events of September 11, 2001, were the primary cause
for the current year increase although there was already an industry-wide
upward trend in the prior year.
Depreciation expenses decreased 9% and 8% in fiscal 2002 and 2001
respectively. Large assets reaching full depreciation and fewer locations in
operation were responsible for the decreases in both years.
The decrease in general and administrative expenses in the current year and
the increase in that same category in the prior year primarily relate to legal
expenses associated with the Company's defense of a lawsuit brought by a
former employee. The suit commenced in the first quarter of fiscal year 2001
and was decided in the Company's favor in the fourth quarter of 2001.
Interest and dividend income declined from the prior year. In part the
decrease is due to lower interest rates on investments. In the prior fiscal
year this category included the receipt in cash of $219,000 as a result of
the AT&T/MediaOne merger.
The Company's effective income tax rates were 36.1% in 2002, 34.7% in 2001 and
35.9% in 2000, the difference from statutory rates being primarily for the
partial exclusion of dividends received on investments and the state tax
exemption for interest on U.S. Government obligations.
CRITICAL ACCOUNTING POLICIES
Critical accounting policies have the potential to have an impact on the
Company's financial statements, either because of the significance of the
financial statement item to which they relate, or because they require
judgment and estimation due to the uncertainty involved in measuring at a
specific point in time, events that are continuous in nature. Due to the
nature of its business, the Company has no accounting policies which it
considers critical to the understanding of the Company's financial reporting.
-2-
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS
Selected Financial Data
For the Years Ended
June 30, July 1, July 2, June 27, June 28,
2002 2001 2000 1999 1998
__________________________________________________________
Operating Revenues $29,809,586 $29,400,903 $28,902,200 $27,547,490 $27,086,822
Operating Expenses 24,416,010 24,508,226 23,151,241 22,995,118 22,984,246
Interest and dividend
Income 598,982 1,035,712 823,470 684,781 675,302
__________ __________ __________ __________ __________
Earnings before pro-
vision for income
taxes 5,992,558 5,928,389 6,574,429 5,237,153 4,777,878
Provision for income
taxes 2,174,000 2,060,000 2,361,000 1,902,000 1,716,000
__________ __________ __________ __________ __________
Net Earnings $ 3,818,558 $ 3,868,389 $ 4,213,429 $ 3,335,153 $ 3,061,878
Weighted Average
Shares Outstanding
Basic & Diluted 5,132,083 5,222,876 5,587,892 6,026,032 6,240,000
Earnings Per Share
Basic & Diluted $.74 $.74 $.75 $.55 $.49
Net Cash Provided by
Operating Activities $5,954,909 $4,795,680 $6,636,768 $5,334,800 $5,261,518
Cash Dividends Paid $2,371,121 $2,256,182 $2,197,659 $2,249,628 $2,264,293
Cash Dividends Paid
Per Share-Class A $.46 $.45 $.43 $.41 $.40
-Class B $ 46 $.45 $.43 $.41 $.40
Total Assets $36,562,578 $37,509,243 $40,622,676 $41,659,313 $40,346,827
Stockholders' Equity $32,682,139 $32,614,517 $34,779,772 $35,388,822 $35,202,950
Net Book Value Per
Share $6.35 $6.64 $7.11 $6.73 $6.22
Net Earnings as a %
of Beginning Stock-
holders' Equity 11.7% 11.1% 11.9% 9.5% 9.2%
Lanes in Operation 746 820 854 854 886
Centers in Operation 19 21 22 22 23
All share and per share amounts (excluding Net Book Value Per Share) have
been adjusted to reflect both the 5% stock dividend distributed on July 26,
2001 and the 5% stock dividend distributed on July 26, 2000.
Market Information
The principal market on which the Company's Class A Common Stock is traded is
the American Stock Exchange. The Company's Class B Common Stock is not listed
on any exchange and is not traded. This stock can be converted to Class A
Common Stock at any time. The table below presents the price range of the
Company's Class A stock in each quarter of fiscal 2002 and 2001.
2002 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
_________________________________________________________
High 11.25 11.30 12.00 12.25
Low 10.01 10.45 10.75 11.25
2001 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
_______________________________________________________
High 8.40 8.90 10.00 10.40
Low 7.55 7.95 8.15 9.60
Holders
The approximate number of holders of record of the Company's Class A Common
Stock as of June 30, 2002 is 445 and of the Company's Class B Common Stock
is 31.
Cash Dividends
The table below presents the cash dividends per share of Class A and Class B
stock paid, and the quarter in which the payment was made during fiscal 2002
and 2001.
Class A Common Stock
Quarter 2002 2001
___________________________________________
First 11.5 cents 11 cents
Second 11.5 cents 11 cents
Third 11.5 cents 11.5 cents
Fourth 11.5 cents 11.5 cents
Class B Common Stock
Quarter 2002 2001
___________________________________________
First 11.5 cents 11 cents
Second 11.5 cents 11 cents
Third 11.5 cents 11.5 cents
Fourth 11.5 cents 11.5 cents
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2002 July 1, 2001
____________ ____________
ASSETS
Current Assets
Cash and cash equivalents (Note 2) $ 1,633,817 $ 1,338,420
Short-term investments (Note 3) 8,183,932 6,236,665
Inventories 541,027 720,505
Prepaid expenses and other 479,289 867,938
Income taxes refundable 699,768 449,093
__________ __________
Total Current Assets 11,537,833 9,612,621
Property, Plant and Equipment, Net (Note 4) 20,505,586 21,078,785
Other Assets
Marketable equity securities (Note 3) 3,990,248 6,216,928
Cash surrender value-officers'life insurance 431,249 411,411
Other 97,662 189,498
__________ __________
TOTAL ASSETS $36,562,578 $37,509,243
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 701,671 $ 1,071,563
Accrued expenses 749,245 781,778
Other current liabilities 369,027 400,889
__________ __________
Total Current Liabilities 1,819,943 2,254,230
Long-Term Deferred Compensation 132,496 152,496
Noncurrent Deferred Income Taxes (Note 8) 1,928,000 2,488,000
__________ __________
TOTAL LIABILITIES 3,880,439 4,894,726
Commitments and Contingencies (Note 5)
Stockholders' Equity (Note 6)
Preferred stock,
par value $10 a share: Authorized
and unissued 2,000,000 shares
Common stock,
par value $.10 per share
Authorized 10,000,000 shares
Class A outstanding
3,666,376 and 3,491,976 shares 366,638 349,197
Class B outstanding
1,483,620 and 1,416,427 shares 148,362 141,643
Additional paid-in capital 7,603,646 4,987,131
Accumulated other comprehensive earnings-
Unrealized gain on available-for-sale
securities, net of tax 2,043,062 3,427,471
Retained earnings 22,520,431 23,709,075
__________ __________
TOTAL STOCKHOLDERS' EQUITY $32,682,139 $32,614,517
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $36,562,578 $37,509,243
See notes to consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS & COMPREHENSIVE EARNINGS
For the Years Ended
June 30, 2002 July 1, 2001 July 2, 2000
______________________________________________
Operating Revenues
Bowling and other $20,834,716 $20,807,378 $20,715,004
Food, beverage and
merchandise sales 8,974,870 8,593,525 8,187,196
__________ __________ __________
29,809,586 29,400,903 28,902,200
Operating Expenses
Compensation and benefits 12,962,448 12,601,235 12,229,408
Cost of bowling and other 5,801,582 5,676,633 5,479,160
Cost of food, beverage and
merchandise sales 2,989,809 2,679,472 2,523,687
Depreciation and amortization 1,763,931 1,940,368 2,099,928
General and administrative 898,240 1,610,518 819,058
__________ __________ __________
24,416,010 24,508,226 23,151,241
Operating Income 5,393,576 4,892,677 5,750,959
Interest and dividend income 598,982 1,035,712 823,470
__________ __________ __________
Earnings before provision
for income taxes 5,992,558 5,928,389 6,574,429
Provision for income taxes(Note 8)
Current 1,923,000 2,218,000 2,552,000
Deferred 251,000 (158,000) (191,000)
_________ __________ __________
2,174,000 2,060,000 2,361,000
Net Earnings $ 3,818,558 $ 3,868,389 $ 4,213,429
Other Comprehensive (Loss)Earnings
Net of Tax-unrealized (loss)
on available-for-sale securities (1,384,409) (1,818,950) (39,509)
_________ _________ _________
Comprehensive Earnings 2,434,149 2,049,439 4,173,920
Earnings Per Share-Basic &
Diluted $.74 $.74 $.75
All share and per share amounts have been adjusted to reflect both the 5%
stock dividend distributed on July 26, 2001 and the 5% stock dividend
distributed on July 26, 2000.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
COMMON STOCK Accumulated
_______________________________________ Additional Other
Class A Class A Class B Class B Paid-In Comprehensive Retained
Shares Amount Shares Amount Capital Earnings(1) Earnings
Balance June 27, 1999 3,746,171 $374,617 1,508,716 $150,871 $4,176,820 $5,285,930 $25,400,584
Purchase of stock (362,101) (36,210) (19,890) (1,988) (477,324) - (2,243,039)
Shares issued for ESOP plan 22,000 2,200 - - 171,050 - -
Cash dividends paid(43 cents/sh) - - - - - (2,197,659)
Change in unrealized gain on
available-for-sale securities - - - - - (39,509) -
Net earnings for the year - - - - - - 4,213,429
_________________________________________________________________________________________________________________________
Balance July 2, 2000 3,406,070 $340,607 1,488,826 $148,883 $3,870,546 $5,246,421 $25,173,315
Stock issued in 5% dividend 170,112 17,011 74,431 7,443 1,901,322 - (1,925,776)
Purchase of stock (100,206) (10,021) (143,830) (14,383)
(916,037) - (1,150,671)
Conversion-Class B to Class A 3,000 300 (3,000) (300)
- - -
Shares issued for ESOP plan 13,000 1,300 - -
131,300 - -
Cash dividends paid(45 cents/sh) - - - -
- - (2,256,182)
Change in unrealized gain on
available-for-sale securities - - - -
- (1,818,950) -
Net earnings for the year - - - -
- - 3,868,389
_______________________________________________________________________________________________________________________
Balance July 1, 2001 3,491,976 $349,197 1,416,427 $141,643 $4,987,131 $3,427,471 $23,709,075
Stock issued in 5% dividend 174,365 17,437 70,809 7,081 2,488,516 - (2,513,034)
Purchase of stock (59) (6) - -
(86) - (544)
Conversion-Class B to Class A 3,616 362 (3,616) (362)
- - -
Shares issued for ESOP plan 9,000 900 - -
101,700 - -
Settlement of employee stock loans (4,010) (401) - -
38,813 - (38,415)
Repayment of employee loans (8,512) (851) - -
(12,428) - (84,088)
Cash dividends paid(46 cents/sh) - - - -
- - (2,371,121)
Change in unrealized gain on
available-for-sale securities - - - -
- (1,384,409) -
Net earnings for the year - - - -
- - 3,818,558
________________________________________________________________________________________________________________________
Balance, June 30, 2002 3,666,376 $366,638 1,483,620 $148,362
$7,603,646 $2,043,062 $22,520,431
(1)Unrealized gains and losses are shown net of tax
See notes to consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
June 30 July 1, July 2,
2002 2001 2000
Cash Flows From Operating Activities
Net earnings $3,818,558 $3,868,389 $4,213,429
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 1,763,931 1,940,368 2,099,928
Increase(decrease) in deferred income tax 251,000 (158,000) (191,000)
Loss (gain) on disposition of assets-net 63,789 (35,647) (30,775)
Stock issuance-ESOP Plan 102,600 132,600 173,250
Gain on sale-available-for-sale securities - (290,951) -
Changes in assets and liabilities:
Decrease (increase) in inventories 179,478 (62,877) (38,753)
Decrease (increase) in prepaid expenses
and other 388,649 (427,620) 41,961
(Increase) decrease in income taxes
refundable (250,675) (578,483) 218,584
Decrease in other long-term assets 91,836 13,689 202,121
(Decrease) increase in accounts payable (369,862) 383,350 (49,827)
(Decrease) increase in accrued expenses (32,533) 40,781 (83,907)
(Decrease) increase in other current
liabilities (31,862) (29,919) 81,757
Decrease in long-term deferred compensation (20,000) - -
_________ _________ _________
Net cash provided by operating activities $5,954,909 $4,795,680 $6,636,768
_________ _________ _________
Cash Flows from Investing Activities
Expenditures for property,plant,equipment (1,254,521) (3,615,517) (528,166)
Net (purchases) sales and maturities of
short-term investments (2,013,396) 2,786,311 (1,183,106)
Increase in cash surrender value (19,838) (23,227) (3,259)
Proceeds from sale of marketable securities - 219,225 -
_________ _________ _________
Net cash used in investing activities (3,287,755) (633,208) (1,714,531)
_________ _________ _________
Cash Flows from Financing Activities
Payment of cash dividends (2,371,121) (2,256,182) (2,197,659)
Purchase of Class A Common Stock (636) (923,400) (2,474,664)
Purchase of Class B Common Stock - (1,167,712) (283,897)
_________ _________ _________
Net cash used in financing activities (2,371,757) (4,347,294) (4,956,220)
_________ _________ _________
Net Increase (Decrease) in Cash and
Cash Equivalents 295,397 (184,822) (33,983)
Cash and Cash Equivalents, Beginning of Year 1,338,420 1,523,242 1,557,225
_________ _________ _________
Cash and Cash Equivalents, End of Year $1,633,817 $1,338,420 $1,523,242
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for
Income taxes $2,633,781 $2,852,134 $2,524,045
Non-cash Investing and Financing Activities
Settlement of employee stock loans by
acquisition of common stock $ 44,667 - -
Repayment of employee loans by
acquisition of common stock $ 88,877 - -
See notes to consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Bowl America Incorporated is engaged in the operation of 19 bowling
centers, with food and beverage service in each center. Eleven centers are
located in metropolitan Washington D.C., one center in metropolitan
Baltimore, Maryland, one center in metropolitan Orlando, Florida, three
centers in metropolitan Richmond, Virginia, and three centers in metropolitan
Jacksonville, Florida. These 19 centers contain a total of 746 lanes.
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 2002 ended June 30, 2002, fiscal year 2001 ended July 1, 2001, and fiscal
year 2000 ended July 2, 2000. Fiscal years 2002 and 2001 each consisted of
52 weeks. Fiscal year 2000 consisted of 53 weeks.
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 that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the 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, 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.
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 calcu-
lated by use of the straight-line method. Amortization of leasehold improve-
ments 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 3-10 years
Building and building improvements 10-30 years
Leasehold improvements 10 years
Amusement games 3-5 years
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 future cash flows are less that the carrying amount.
Inventories
Inventories are stated at the lower of cost (first-in, first-out method)
or market.
Income Taxes
Income taxes are accounted for in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes". Under this method, 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.
Fair Value of Financial Instruments
The fair value of short-term investments and the noncurrent marketable
security portfolio is disclosed in Note 3.
Investment Securities
The Company accounts for its investments in accordance with SFAS No. 115
"Accounting for Certain Investments in Debt and Equity 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 5,132,083, 5,222,876 and 5,587,892, respectively, and have been
adjusted to reflect both the 5% stock dividend distributed on July 26, 2001
and the 5% stock dividend distributed on July 26, 2000.
Comprehensive Earnings
In accordance with SFAS No. 130 "Reporting Comprehensive Income", 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 each of the three years in the period ended June 30, 2002.
Cash and Cash Equivalents
For purposes of the Consolidated Statements of Cash Flows, the Company
considers money market funds, certificates of deposits, repurchase agreements
and treasury securities with original maturities of three months or less to be
cash equivalents.
New Accounting Pronouncements
In June 2002, SFAS No. 146, "Accounting for Costs of Exit or Disposal
Activities" was issued. SFAS No. 146 supercedes Emerging Issues Task Force
Issue ("EITF") No. 94-3 "Liability Recognition for Certain Employee Termina-
tion Benefits and Other Costs to Exit an Activity (including certain costs
incurred in a restructuring)". This statement requires that an exit or
disposal activity related cost be recognized when the liability is incurred
instead of when an entity commits to an exit plan. The provisions of SFAS
No. 146 are effective for financial transactions initiated after December 15,
2002. The Company does not believe SFAS No. 146 will have a material impact
on the Company's consolidated financial statements.
In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets", was issued and is effective for fiscal years
beginning after December 15, 2001. This statement supercedes SFAS No. 121,
"Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of", and the accounting and reporting provisions of
Accounting Principles Board Opinion No. 30, "Reporting the Results of
Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions"
for the disposal of a segment of a business. SFAS No. 144 retains many of
the provisions of SFAS No. 121, but addresses certain implementation issues
associated with that statement. The Company will adopt the provisions of
SFAS No. 144 effective July 1, 2002. The Company believes that the adoption
of SFAS No. 144 will not have a material effect on the Company's consolidated
financial statements.
In August 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations"
was issued. SFAS No. 143 addresses financial accounting and reporting obliga-
tions associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. The Company will adopt the provisions of SFAS
No. 143 effective July 1, 2002. The Company believes SFAS No. 143 will not
have a material effect on the Company's consolidated financial statements.
Reclassifications
Certain previous year amounts have been reclassified to conform with the
current year presentation.
2. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consisted of the following:
June 30, July 1,
2002 2001
Demand deposits and cash on hand $ 688,048 $ 473,010
Money market funds 286,769 484,410
Repurchase agreements 659,000 381,000
_________ _________
$1,633,817 $1,338,420
3. INVESTMENTS
Short-term investments consist of certificates of deposits, U.S. Treasury
securities and a mutual fund which invests in mortgage backed securities
(maturities of generally three months to one year). At June 30, 2002, the
fair value of short-term investments was $8,183,932 with an unrealized gain of
$108,946. At July 1, 2001, the fair value of short-term investments was
$6,236,665 with an unrealized gain of $78,543. Non-current investments are
marketable equity securities which consist primarily of twelve telecommuni-
cations stocks. The Company has classified all readily marketable debt and
equity securities as available-for-sale. These available-for-sale securities
are carried at fair value in accordance with the provisions of SFAS No. 115.
The following table summarizes the cost and approximate fair values of
equity securities available-for-sale as of June 30, 2002, and July 1, 2001
as follows:
Original Unrealized Fair
Cost Gain Value
June 30, 2002
Securities available-for-sale $857,782 $3,132,466 $3,990,248
July 1, 2001
Securities available-for-sale $857,782 $5,359,146 $6,216,928
This portfolio includes the following telecommunications stocks:
16,835 shares of AT&T Wireless
2,209 shares of Agere
3,946 shares of Alltel
669 shares of Avaya
27,572 shares of Bell South
8,028 shares of Lucent Technologies
9,969 shares of Qwest
45,580 shares of SBC Communications
32,000 shares of Sprint Fon
16,000 shares of Sprint PCS
18,784 shares of Verizon
13,560 shares of Vodafone
There were no sales of available-for-sale securities in the years ended
June 30, 2002 and July 2, 2000. In the year ended July 1, 2001, proceeds
from the sale of available-for-sale securities were $2,072,112 with a
corresponding gross realized gain of $290,951 recorded as interest and
dividend income.
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment, as cost, consist of the following:
June 30, July 1,
2002 2001
Bowling lanes and equipment $17,864,384 $17,951,732
Amusement games 948,045 934,716
Buildings and building improvements 19,667,611 19,216,027
Leasehold improvements 317,398 522,101
Land 8,572,206 8,548,228
Bowling lanes and equipment not yet in use 132,033 503,989
__________ __________
47,501,677 47,676,793
Less accumulated depreciation and
amortization 26,996,091 26,598,008
__________ __________
$20,505,586 $21,078,785
Depreciation and amortization expense for Property, Plant and Equipment
for fiscal years 2002, 2001, and 2000 was $1,763,931, $1,940,368, and
$2,099,928 respectively.
5. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company and its subsidiaries are obligated under long-term real estate
lease agreements for three 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, 2002, the minimum fixed rental commitments related to all
noncancelable leases, were as follows:
Year Ending
2003 $294,604
2004 294,604
2005 294,604
2006 294,604
2007 294,604
Thereafter 1,846,592
_________
Total minimum lease payments $3,319,612
Net rent expense was as follows:
For the Years Ended
2002 2001 2000
Minimum rent under operating leases $333,060 $366,097 $421,515
Excess percentage rents 92,497 89,807 125,612
_______ _______ _______
$425,557 $455,904 $547,127
6. 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.
At June 30, 2002 and July 1, 2001, the Company had $43,956 and $88,623,
respectively, 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 6% to 6 1/2% and are
payable over a term of 3 years from the date of the agreements which range
from 2000 to 2001. These employee loans have been recorded as a reduction of
additional paid-in capital.
The Company distributed a 5% stock dividend on July 26, 2001, where
Class A and B stockholders received one share of common stock for each
twenty shares of Class A and Class B common stock held as of the date of record.
7. PROFIT-SHARING AND ESOP PLAN
The Company has a profit-sharing plan which, generally, covers all individ-
uals 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 the years ended
June 30, 2002, July 1, 2001, and July 2, 2000, contributions in the amount of
$165,000, $160,000, and $170,000, respectively, were charged to operations.
Effective March 31, 1987, the Company adopted an Employee Stock Ownership
Plan (ESOP) 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. Prior to fiscal year 1995, the
contributions were allocated to participants based on compensation and years
of service. Contributions since fiscal year 1995 are allocated based on
compensation only in order to comply with Internal Revenue Service code
requirements. The Company's contributions to the Plan for fiscal years 2002,
2001, and 2000 were $162,600, $165,100, and $178,080, respectively.
8. INCOME TAXES
The significant components of the Company's deferred tax assets and liabil-
ities were as follows:
June 30, July 1,
2002 2001
Deferred tax assets:
Other 64,000 70,000
_________ _________
Total deferred tax assets 64,000 70,000
Deferred tax liabilities:
Property, plant and equipment 596,000 422,000
Unrealized gain on available-
for-sale securities 1,199,000 2,010,000
Prepaid expenses 140,000 69,000
Other 57,000 57,000
_________ _________
Total deferred tax liabilities 1,992,000 2,558,000
_________ _________
Net deferred income taxes $1,928,000 $2,488,000
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
2002 % 2001 % 2000 %
Taxes computed at statutory rate $2,045,000 34.0% $2,016,000 34.0% $2,235,000 34.0%
State income taxes, net of Federal
income tax benefit 175,000 2.9 85,000 1.4
162,000 2.47
Dividends received exclusion (22,000) (.36) (37,000) (.62)
(33,000) (.51)
All other-net (24,000) (.41) (4,000) (.07)
(3,000) (.05)
_________ ____ _________ ____
_________ ____
$2,174,000 36.1% $2,060,000 34.7% $2,361,000 35.9%
9. RELATED PARTIES
At June 30, 2002 and July 1, 2001, the Company had recorded $102,200 and
$102,600, respectively, in deferred compensation payable to one officer and
one major shareholder. The amounts are payable over the next ten years.
Deferred compensation payable to non-related parties was a total of $57,100 at
June 30, 2002 and $56,700 at July 1, 2001. The current portion of these
amounts, $26,800 at June 30, 2002 and $6,800 at July 1, 2001 is included in
accrued expenses.
10. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following summary represents the results of operations for each of the
quarters in fiscal years 2002 and 2001 (dollars in thousands, except for
earnings per share):
Earnings
Operating Operating Before Earnings
Revenues Income Income Net Per
Taxes Earnings Share
2002
June 30, 2002 $6,512 $ 693 $ 845 $ 519 $.10
March 31, 2002 8,997 2,535 2,711 1,738 .33
December 30, 2001 7,867 1,694 1,832 1,174 .23
September 30, 2001 6,434 472 605 388 .08
2001
July 1, 2001 $6,319 $ 203 $ 476 $ 374 $.07
April 1, 2001 9,113 2,525 2,712 1,738 .34
December 31, 2000 7,575 1,631 1,805 1,157 .22
October 1, 2000 6,394 534 935 599 .11
Per share amounts have been adjusted to reflect both the 5% stock dividend
distributed on July 26, 2001 and the 5% stock dividend distributed on
July 26, 2000.
INDEPENDENT AUDITORS' REPORT
To the 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, 2002 and July 1, 2001,
and the related consolidated statements of earnings and comprehensive earnings,
stockholders' equity and cash flows for each of the three fiscal years in the
period ended June 30, 2002. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes 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, such consolidated financial statements present fairly, in
all material respects, the financial position of Bowl America Incorporated
and subsidiaries as of June 30, 2002 and July 1, 2001, and the results of
their operations and their cash flows for each of the three fiscal years in
the period ended June 30, 2002, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte and Touche LLP
McLean, Virginia
September 5, 2002
EX-21
Exhibit 21 to Form 10-K
State of Incorporation
Bowl America of Florida Inc. Florida
Bowl America Shirley Inc. Virginia
Falls Church Bowl Inc. Virginia
Reisterstown Bowl Inc. Maryland
Manassas Bowl Inc. Virginia
Bowl America Duke Inc. Virginia
The foregoing subsidiaries are wholly owned.
EX-99.1
Exhibit 99.1 to Form 10-K
Written Statement of the Chief Executive Officer
Pursuant to 18 U.S.C. 1350
Solely for the purposes of complying with 18 U.S.C. 1350, I, the
undersigned President of Bowl America Incorporated (the "Company"), hereby
certify, based on my knowledge, that the Annual Report on Form 10-K of the
Company for the year ended June 30, 2002 (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.
Leslie H. Goldberg
September 26, 2002
EX-99.2
Exhibit 99.2 to Form 10-K
Written Statement of the Chief Financial Officer
Pursuant to 18 U.S.C. 1350
Solely for the purposes of complying with 18 U.S.C. 1350, I, the
undersigned Senior Vice President and Treasurer of Bowl America Incorporated
(the "Company"), hereby certify, based on my knowledge, that the Annual Report
on Form 10-K of the Company for the year ended June 30, 2002 (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.
Ruth Macklin
September 26, 2002