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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Quarter Ended December 26, 2004 Commission file Number 0-1830
BOWL AMERICA INCORPORATED
(Exact name of registrant as specified in its charter.)
MARYLAND 54-0646173
(State of Incorporation) (I.R.S. Employer Identification No.)
6446 Edsall Road, Alexandria, Virginia 22312
(Address of principal executive offices) (Zip Code)
(703)941-6300
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Exchange Act Rule 12 b-2)
YES [ ] NO [X]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Shares Outstanding at
January 23, 2005
Class A Common Stock, 3,669,311
$.10 par value
Class B Common Stock 1,468,462
$.10 par value
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended
December 26, December 28, December 26, December 28,
2004 2003 2004 2003
_______________________ __________________________
Operating Revenues
Bowling and other $5,033,421 $5,163,791 $ 9,256,174 $ 9,489,060
Food, beverage and
merchandise sales 2,078,175 2,143,726 3,755,506 3,963,632
_________ _________ __________ __________
7,111,596 7,307,517 13,011,680 13,452,692
Operating Expenses
Compensation and benefits 3,099,810 3,159,693 6,062,501 6,341,283
Cost of bowling and other 1,578,907 1,571,781 3,054,091 3,092,215
Cost of food, beverage and
merchandise sales 663,684 706,323 1,187,248 1,340,358
Depreciation and
amortization 402,485 391,647 803,118 786,577
General and administrative 176,718 166,074 379,989 347,218
_________ _________ __________ __________
5,921,604 5,995,518 11,486,947 11,907,651
Net gain on sale of building - - - 2,168,117
Operating Income 1,189,992 1,311,999 1,524,733 3,713,158
Investment earnings 151,817 - 151,817 -
Interest and dividend
income 160,319 103,361 264,322 199,342
_________ _________ __________ __________
Earnings before provision
for income taxes 1,502,128 1,415,360 1,940,872 3,912,500
Provision for income taxes 552,100 503,500 700,000 1,426,700
_________ _________ __________ __________
Net Earnings $ 950,028 $ 911,860 $ 1,240,872 $ 2,485,800
========= ========= ========= =========
Earnings per share-basic &
diluted $.18 $.17 $.24 $.48
Weighted average shares
outstanding 5,137,773 5,138,574 5,137,773 5,138,574
Dividends paid $693,600 $642,322 $1,387,200 $1,284,645
Per share, Class A $.135 $.125 $.27 $.25
Per share, Class B $.135 $.125 $.27 $.25
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
Net Earnings $ 950,028 $ 911,860 $ 1,240,872 $2,485,800
Other comprehensive
earnings-net of tax
Unrealized gain (loss) on
available for sale
securities 186,736 199,282 458,657 (33,511)
Less: reclassification
adjustment for gain
included in net income (88,687) - (88,687) -
_________ _________ _________ _________
Comprehensive earnings $1,048,077 $1,111,142 $ 1,610,842 $2,452,289
========= ========= ========= =========
The operating results for the thirteen (13) and twenty-six (26) week
periods ended December 26, 2004 are not necessarily indicative of results
to be expected for the year.
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
AS OF
-----------------------------------
December 26, 2004 June 27, 2004
________________ _____________
ASSETS
Current Assets
Cash and cash equivalents $ 1,604,784 $ 1,320,643
Short-term investments 12,258,232 11,681,729
Inventories 618,180 583,466
Prepaid expenses and other 303,804 595,460
__________ __________
Total Current Assets 14,785,000 14,181,298
Land, Buildings and Equipment
Net of accumulated depreciation of
$28,668,753 and $28,394,203 22,113,207 21,762,919
Other Assets
Marketable equity securities 4,489,683 4,041,161
Cash surrender value-life insurance 469,817 467,603
Other long-term assets 77,580 126,600
__________ __________
TOTAL ASSETS $41,935,287 $40,579,581
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 890,335 $ 805,812
Accrued expenses 423,818 891,289
Dividends payable 693,600 693,600
Other current liabilities 1,732,254 334,317
Income taxes payable 80,495 179,855
Current deferred income taxes 148,675 148,675
__________ __________
Total Current Liabilities 3,969,177 3,053,548
Long-term Deferred Compensation 74,278 74,278
Noncurrent Deferred Income Taxes 2,772,178 2,555,174
---------- ----------
TOTAL LIABILITIES 6,815,633 5,683,000
__________ __________
COMMITMENTS AND CONTINGENCIES (Note 3)
Stockholders' Equity
Preferred stock,
par value $10 a share: Authorized
and unissued 2,000,000 shares
Common stock,
par value $.10 per share
Authorized 10,000,000 shares
Class A issued and outstanding -
3,669,311 shares 366,932 366,932
Class B issued and outstanding -
1,468,462 shares 146,846 146,846
Additional paid-in capital 7,479,072 7,479,072
Unrealized gain on securities
available-for-sale, 2,318,319 1,948,918
Retained earnings 24,808,485 24,954,813
__________ __________
TOTAL STOCKHOLDERS' EQUITY $35,119,654 $34,896,581
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $41,935,287 $40,579,581
========== ==========
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE TWENTY-SIX WEEKS ENDED DECEMBER 26, 2004 AND DECEMBER 28, 2003
December 26, December 28,
2004 2003
Cash Flows From Operating Activities:
Net earnings $1,240,872 $2,485,800
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation and amortization 803,118 786,577
Gain on sale of available-for-sale
securities (151,817) -
Changes in assets and liabilities
Increase in inventories (34,714) (62,419)
Decrease (increase) in prepaid
expenses & other 291,656 (1,764,558)
Decrease in income taxes refundable - 443,788
(Decrease) increase in income taxes
payable (99,360) 161,069
Decrease in other long-term assets 46,806 51,271
Increase (decrease) in accounts payable 84,523 (58,596)
Decrease in accrued expenses (467,471) (247,770)
Increase in other current liabilities 1,397,937 1,434,095
_________ _________
Net cash provided by operating activities $3,111,550 $3,229,257
_________ _________
Cash flows from investing activities
Expenditures for land,buildings & equip (1,153,406) (785,507)
Net purchases of short-term investments (539,328) (368,145)
Proceeds from sale of marketable
securities 252,525 -
_________ _________
Net cash used in investing activities (1,440,209) (1,153,652)
_________ _________
Cash flows from financing activities
Payment of cash dividends (1,387,200) (1,284,645)
_________ _________
Net cash used in financing activities (1,387,200) (1,284,645)
_________ _________
Net Increase in Cash and Equivalents 284,141 790,960
Cash and Equivalents, Beginning of Period 1,320,643 1,503,313
_________ _________
Cash and Equivalents, End of Period $1,604,784 $2,294,273
========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for
Income taxes $ 803,477 $ 821,900
See notes to condensed consolidated financial statements.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Twenty-six Weeks Ended
December 26, 2004
(Unaudited)
1. Basis for Presentation
The accompanying unaudited condensed consolidated financial statements of
Bowl America Incorporated and subsidiaries (the "Company"), have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. The condensed consolidated balance sheet as of June 27, 2004
has been derived from the Company's June 27, 2004 audited financial statements.
Certain information and note disclosures normally included in the annual
financial statements, prepared in accordance with accounting principles
generally accepted in the United States of America, have been condensed
or omitted pursuant to those rules and regulations, although the Company
believes that the disclosures made are adequate to make the information
presented not misleading.
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments and reclassifications (all of
which are of a normal, recurring nature) that are necessary for the fair
presentation for the periods presented. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's latest annual report to the Securities and Exchange Commission
on Form 10-K for the year ended June 27, 2004.
2. Marketable Equity Securities
Marketable equity securities are carried at fair value in accordance
with the provisions of SFAS No. 115. At December 26, 2004, the fair value of
these securities was $4,489,683, with an original cost of $757,074, resulting
in an unrealized gain of $3,732,609. The telecommunications stocks included
in the portfolio as of December 26, 2004 were:
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 Communications
45,580 shares of SBC
40,000 shares of SprintFon
18,784 shares of Verizon
13,560 shares of Vodafone/AirTouch
3. Commitments and Contingencies
In late September 2004, the Company signed a contract for approximately
$770,000 for site preparation relating to the building of a bowling center in
Henrico County, Virginia to be paid out as work is completed. During the
quarter ended December 26, 2004, approximately $48,000 had been paid for work
completed.
In February 2005, the Company signed a contract for the purchase of bowling
equipment for the new location totaling approximately $374,712. Delivery is
not expected prior to the end of fiscal 2005.
4. Reclassifications
Certain previous period amounts have been reclassified to conform with current
period presentation.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
December 26, 2004
Liquidity and Capital Resources
Short-term investments consisting mainly of U.S. Government securities and
cash totaled $13,863,000 at the end of the second quarter of fiscal 2005, or
$905,000 higher than at the beginning of the quarter and $861,000 higher than
at the beginning of the fiscal year. The increased funds result primarily
from operations and reflect the seasonal nature of the bowling business which
is strongest from September through May. During the quarter ended December 26,
2004, the Company received $252,525 as merger compensation from Cingular
Wireless for the mandatory exchange of 16,835 shares of AT&T Wireless stock
held by the Company. No Cingular Wireless stock was received in the
transaction.
In the six-month period ended December 26, 2004, the Company expended
$1,025,000 for purchases of equipment to modernize facilities, including the
replacement of some amusement games and all remaining wooden bowling lanes.
Approximately $147,000 was spent for items relating to the construction of our
new bowling center in Henrico County, Virginia, $48,000 of which was partial
payment on the purchase obligation for site preparation and improvements. The
table below summarizes all purchase obligations as of February 8, 2005. It
includes $722,000 for site preparation and improvements for the new location
of which approximately one-third will be paid for by the seller from funds
escrowed at the time of purchase of the ground. Also included in purchase
obligations is $374,712 for a portion of the equipment for the center.
Construction of the new 40-lane facility, estimated to cost $5 million, began
in the second quarter and site work is continuing. The Company is actively
seeking property for additional locations. Cash and cash flow are sufficient
to finance all currently contemplated purchases and construction. The Company
has also maintained its fiscal year end 2004 position in marketable equity
securities, primarily telecommunications stocks, except as noted above, as a
further source of expansion capital.
These marketable securities are carried at their fair value on the last day of
the quarter. At December 26, 2004, the market value was approximately
$4,490,000 or $53,000 higher than at the beginning of the quarter.
============================================================================
Contractual Total Less than 1-3 years 3-5 Years More than
obligations 1 Year 5 Years
____________________________________________________________________________
Operating lease
obligations $1,791,187 $ 283,721 $567,442 $567,442 $342,535
Purchase
obligations $1,096,712 $1,096,712
____________________________________________________________________________
Total $2,887,899 $1,380,433 $567,442 $567,442 $342,535
=============================================================================
Current liabilities increase during the first three quarters of the fiscal year
as leagues deposit prize fund monies with the Company throughout the league
season. These funds are returned to the leagues at the end of the bowling
season, generally in the fourth quarter. At December 26, 2004, approximately
$1,500,000 in league deposits were included in the current liabilities
category.
While no factors calling for a change in the dividend rate are apparent, the
Board of Directors decides the amount and timing of any dividend at its
quarterly meeting based on its appraisal of the state of the business and its
estimate of future opportunities.
On December 7, 2004, the Board of Directors declared a cash dividend of $.135
per share on its Class A and Class B stock to holders of record on January 10,
2005, payable February 9, 2005.
RESULTS OF OPERATIONS
Eighteen centers were in operation in both the current and prior year periods.
In the fourth quarter of fiscal 2003, the Company ceased operations at its
Silver Spring center and the sale of the center that was operating with a
negative cash flow was consummated in August 2003.
Net earnings were $.18 per share for the thirteen-week period ended
December 26, 2004, versus net earnings of $.17 per share for the thirteen weeks
ended December 28, 2003. For the current twenty-six week period net earnings
per share were $.24 compared to $.48 for the comparable period a year ago.
The gain on the sale of AT&T Wireless stock of $151,817 is included in the
Investment earnings category in the current quarter and six-month figures.
Prior year-to-date earnings included a net gain of $2,168,117 from the sale of
Silver Spring, after taxes. Without either sale earnings per share for the
six-month periods would have been $.22 and $.23, respectively.
Operating revenues decreased 3% in both of the three-month periods ended
December 26, 2004 and December 28, 2003. For the current six-month period
operating revenues were down 3% versus a decrease of 2% in the comparable
six-month period a year ago. Operating revenues from bowling and other
declined approximately 2% in both the current and prior year quarters, while
the six-months periods showed a decline of 2% and less than 1%, respectively.
The current year decrease in linage was partially offset by an increase in
corporate event activity and a higher average game rate.
Food, beverage and merchandise sales were down 3% in the current year quarter
and down 5% in the six-month period partially as a result of the closing, in
September 2003, of the full-service restaurant at Bowl America Gaithersburg.
Cost of food, beverage and merchandise sales declined due to the change at
Gaithersburg and lower sales.
Operating expenses excluding depreciation and amortization were down 1% and 4%
in the current three-month period and six-month periods, respectively, versus
no change in the periods last year. Employee compensation and benefits were
down 4% in the current six-month period and were flat in the prior year
comparable period.
Maintenance and repair costs were down 24% in the six-month period ended
December 26, 2004 partially due to the elimination of lane refinishing costs
for wooden lanes. The comparable period in the prior year reflected an
increase of 13%. Building and heating repairs and snow removal costs were
primarily responsible for the prior year increase. Advertising costs during
the current twenty-six week period increased 25% compared to a 17% increase
in the prior year comparable period. Utility costs for the quarter were up 1%
and were up 3% for the six-month period ended December 26, 2004 versus a
decrease of 2% for the comparable periods last year. Bowling supplies and
services costs were down 8% for the six-month period compared to a 6% decrease
in the prior year six-month period.
Rent expense was up 2% in the current year- to-date period versus flat in the
prior year six-month period. Insurance expense, excluding health and life,
decreased 7% through the six-month period ended December 26, 2004, as the
insurance market softened, compared to a 2% increase in the six-month period
a year ago.
Depreciation and amortization expense increased 2% in the current year-to-date
period and decreased 7% in the comparable prior year period. Last year's
comparative decrease was due to the operation of one fewer center in 2004
than in 2003.
CRITICAL ACCOUNTING POLICIES
We have identified accounting for marketable investment securities under
SFAS 115 ("Accounting for Certain Investments in Debt and Equity Securities")
as a critical accounting policy due to the significance of the amounts
included in our balance sheet under the captions of Short-term investments
and Marketable equity securities. 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 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk. Our short-term investments and certain cash equivalents
are subject to interest rate risk. We manage this risk by maintaining an
investment portfolio of available-for-sale instruments with high credit
quality and relatively short average maturities. The fair value of marketable
debt securities held was $12,258,000 and $9,838,000 at December 26, 2004 and
December 28, 2003, respectively. The fair value of certain fixed rate debt
securities will change depending on movements in interest rates. Declines in
interest rates will affect our interest income. Based on our portfolio of
debt securities at December 26, 2004, a 10% decline in the average yield would
have no material impact on annual interest income.
ITEM 4. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures are effective
based on their evaluation of such controls and procedures as of December 26,
2004. There was no change in the Company's internal control over financial
reporting identified in connection with the evaluation that occurred during
the quarter ended December 26, 2004, that materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
BOWL AMERICA INCORPORATED AND SUBSIDIARIES
S.E.C. FORM 10-Q
December 26, 2004
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
At the annual meeting held December 7, 2004, the Class A shareholders approved
the appointment of Director Warren T. Braham for a one year period to expire
at the 2005 Annual Meeting. The votes were cast as follows:
For 3,241,914 Withheld 4,367
At the annual meeting held December 7, 2004, the Class A shareholders approved
the appointment of Director Allan L. Sher for a one year period to expire at
the 2005 Annual Meeting. The votes were cast as follows:
For 3,243,967 Withheld 2,314
At the annual meeting held December 7, 2004, the Class B shareholders approved
the appointment of Merle Fabian, Leslie H. Goldberg, Stanley H. Katzman,
A. Joseph Levy, Ruth Macklin and Irvin Clark, as listed in the proxy statement
for the December 7, 2004 meeting, for a one year period to expire at the 2005
Annual Meeting. The votes were cast as follows:
For 14,142,700 Withheld 0
Item 6 - Exhibits
(a) Exhibits
31.1 Certification of Chief Executive Officer
31.2 Certification of Chief Financial Officer
32 Written Statement of the Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. 1350
10 Extension of Employment Agreement with Leslie H. Goldberg
20 Press release issued February 8, 2005 (furnished herewith)
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Bowl America Incorporated
(Registrant)
Date: February 8, 2005 By: Leslie H. Goldberg
Leslie H. Goldberg, President
Date: February 8, 2005 By: Cheryl A. Dragoo
Cheryl A. Dragoo, Controller
EXHIBIT 31.1
Exhibit 31.1 to Form 10-Q
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 Quarterly report on Form 10-Q of Bowl America
Incorporated;
2. Based on my knowledge, this quarterly 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) 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) 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
c) 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 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 controls 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: February 8, 2005 Leslie H Goldberg
Chief Executive Officer
Exhibit 31.2
Exhibit 31.2 to Form 10-Q
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule
13a-14(a) Or 5d-14(a) under the Securities Exchange Act of 1934
I, Cheryl A. Dragoo, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q 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) 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) 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
c) 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 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 controls 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: February 8, 2005 Cheryl A. Dragoo
Chief Financial Officer
Exhibit 32
Exhibit 32 to Form 10-Q
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"), hereby certify, based on our knowledge, that the
Quarterly Report on Form 10-Q of the Company for the period ended December 26,
2004, (the "Report") fully complies with the requirements of Section 13(a) of
the Securities 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
Chief Executive Officer
Cheryl A. Dragoo
Chief Financial Officer
Date: February 8, 2005
EXHIBIT 10
Exhibit 10 to Form 10-Q
Extension of Employment Agreement with Leslie H. Goldberg
December 7, 2004
Leslie H. Goldberg
Bowl America Incorporated
PO Box 1288
Springfield, VA 22151
Dear Les,
This letter is to confirm our agreement extending your employment contract as
President of the Company, at the terms in the contract dated June 28, 1999, to
the end of the corporation's fiscal year 2005, year end date July 3, 2005.
If this meets with your approval, please sign in the place indicated.
Sincerely yours,
Bowl America Incorporated
BY: Warren Braham
AGREED TO: Leslie H. Goldberg
EXHIBIT 20
Exhibit 20 to FORM 10-Q Press Release issued February 8, 2005
SECOND QUARTER EARNINGS UP AT BOWL AMERICA
Today Bowl America Incorporated announced that its fiscal 2005 second quarter
earnings were $.18 per share compared to $.17 in the comparable prior year
period. The current quarter included a gain on the sale of AT&T Wireless stock
of approximately $152,000, without which earnings per share would have been
$.16. For the current six months earnings per share were $.24. In fiscal
2004 the Company's gain on the sale of a building was $2,168,117. Excluding
the gains from the sale of assets, the earnings for the current and prior
six-month periods were $.22 and $.23 respectively.
Linage declined on a year-to-date basis in part because the quarter, which ended
December 26, 2004, was atypically warm, a condition that usually depresses
open-play business. Higher gasoline prices are also thought to impact
discretionary recreation spending.
Bowl America operates 18 bowling centers and site work for a new 40-lane
location in Richmond is continuing.
Bowl America Class A Common Stock trades on the American Stock Exchange with
the symbol BWLA. The Company's Form 10-Q is available at www.bowlamerica.com.
BOWL AMERICA INCORPORATED
Results of Operations
(Unaudited)
Thirteen Weeks Ended
12/26/2004 12/28/2003
Operating Revenues
Bowling and other $ 5,033,421 $ 5,163,791
Food, beverage and merchandise sales 2,078,175 2,143,726
__________ __________
7,111,596 7,307,517
Operating expenses excluding
depreciation and amortization 5,519,119 5,603,871
Depreciation and amortization 402,485 391,647
Net gain on sale of building - -
Investment earnings 151,817 -
Interest and dividend income 160,319 103,361
Earnings before taxes 1,502,128 1,415,360
Net Earnings $ 950,028 $ 911,860
Weighted average shares outstanding 5,137,773 5,138,574
EARNINGS PER SHARE .18 .17
Twenty-six Weeks Ended
12/26/2004 12/28/2003
Operating Revenues
Bowling and other $ 9,256,174 $ 9,489,060
Food, beverage and merchandise sales 3,755,506 3,963,632
__________ __________
13,011,680 13,452,692
Operating expenses excluding
depreciation and amortization 10,683,829 11,121,074
Depreciation and amortization 803,118 786,577
Net gain on sale of building - 2,168,117
Investment earnings 151,817 -
Interest and dividend income 264,322 199,342
Earnings before taxes 1,940,872 3,912,500
Net Earnings $ 1,240,872 $ 2,485,800
Weighted average shares outstanding 5,137,773 5,138,574
EARNINGS PER SHARE .24 .48
SUMMARY OF FINANCIAL POSITION
(Unaudited)
Dollars in Thousands
12/26/2004 12/28/2003
ASSETS
Total current assets including cash and
short-term investments of $13,863 and $12,132 $14,785 $15,232
Property and investments 27,150 24,741
______ ______
TOTAL ASSETS $41,935 $39,973
LIABILITIES AND STOCKHOLDERS'EQUITY
Total current liabilities $ 3,969 $ 4,051
Other liabilities 2,846 1,853
Stockholders' equity 35,120 34,069
______ ______
$41,935 $39,973