Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 000-31701
BOWLIN TRAVEL CENTERS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 85-0473277
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
150 LOUISIANA NE, ALBUQUERQUE, NM 87108
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 505-266-5985
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 Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of December 11, 2003, 4,583,348 shares of the issuer's common stock were
outstanding.
BOWLIN TRAVEL CENTERS, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Condensed Balance Sheets as of October 31, 2003
and January 31, 2003........................................... 2
Condensed Statements of Income for the Three Months
and Nine Months Ended October 31, 2003 and 2002................ 4
Condensed Statements of Cash Flows for the Nine
Months Ended October 31, 2003 and 2002......................... 5
Notes to the Condensed Financial Statements.................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 6
Item 3. Quantitative and Qualitative Disclosures About
Market Risk.................................................... 12
Item 4. Controls and Procedures........................................ 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 13
Item 2. Changes in Securities and Use of Proceeds...................... 13
Item 3 Defaults Upon Senior Securities................................ 13
Item 4. Submission of Matters to a Vote of Security Holders............ 13
Item 5. Other Information.............................................. 13
Item 6. Exhibits and Reports on Form 8-K............................... 13
Signatures..................................................... 14
1
BOWLIN TRAVEL CENTERS, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BOWLIN TRAVEL CENTERS, INC.
Condensed Balance Sheets
(in thousands, except share data)
October 31, January 31,
2003 2003
(Unaudited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 1,272 $ 2,416
Accounts receivable 125 106
Accounts receivable, related parties 3 4
Inventories 2,826 3,094
Prepaid expenses 300 309
Mortgages receivable, current maturities 1 9
Notes receivable, current maturities 44 33
----------- -----------
Total current assets 4,571 5,971
Property and equipment, net 10,180 9,167
Intangible assets, net 200 240
Interest receivable 33 27
Investment in bond 1,000 --
Investment in real estate 522 475
Mortgages receivable -- 301
Notes receivable 169 202
----------- -----------
Total assets $ 16,675 $ 16,383
=========== ===========
(Continued)
2
BOWLIN TRAVEL CENTERS, INC.
Condensed Balance Sheets
(in thousands, except share data)
October 31, January 31,
2003 2003
(Unaudited)
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 972 $ 995
Short term borrowing, bank 225 --
Current installments of long-term debt 688 647
Accrued liabilities 417 256
Deferred revenue 48 33
Income taxes payable 7 2
----------- -----------
Total current liabilities 2,357 1,933
Deferred income taxes 571 590
Long-term debt, less current installments 2,875 3,400
----------- -----------
Total liabilities 5,803 5,923
----------- -----------
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000,000
shares authorized, none issued or outstanding
at October 31, 2003 and January 31, 2003 -- --
Common stock, $.001 par value; 10,000,000
shares authorized, 4,583,348 issued and
outstanding at October 31, 2003 and January 31,
2003 5 5
Additional paid in capital 9,775 9,775
Retained earnings 1,092 680
----------- -----------
Total stockholders' equity 10,872 10,460
----------- -----------
Total liabilities and stockholders' equity $ 16,675 $ 16,383
=========== ===========
See accompanying notes to condensed financial statements.
3
BOWLIN TRAVEL CENTERS, INC.
Condensed Statements of Income
(in thousands, except share and per share data)
Three Months Ended Nine Months Ended
-------------------------- --------------------------
October 31, October 31, October 31, October 31,
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Gross sales $ 5,299 $ 5,334 $ 16,910 $ 17,464
Less discounts on sales 117 102 349 314
----------- ----------- ----------- -----------
Net sales 5,182 5,232 16,561 17,150
Cost of goods sold 3,384 3,449 10,583 11,271
----------- ----------- ----------- -----------
Gross profit 1,798 1,783 5,978 5,879
General and administrative expenses (1,587) (1,546) (4,831) (4,667)
Depreciation and amortization (177) (183) (515) (556)
----------- ----------- ----------- -----------
Operating income 34 54 632 656
Non-operating income (expense):
Interest income 29 30 80 84
Gain (loss) on sale of
property and equipment 2 -- 34 (2)
Interest expense (46) (56) (141) (170)
Miscellaneous income -- -- 1 46
Rental income 21 22 66 66
----------- ----------- ----------- -----------
Total non-operating income (expense) 6 (4) 40 24
----------- ----------- ----------- -----------
Income before income taxes 40 50 672 680
Income taxes (16) (23) (260) (249)
----------- ----------- ----------- -----------
Net income $ 24 $ 27 $ 412 $ 431
=========== =========== =========== ===========
Earnings per share:
Basic and diluted $ 0.01 $ 0.01 $ 0.09 $ 0.09
=========== =========== =========== ===========
Weighted average common
Shares outstanding 4,583,348 4,583,348 4,583,348 4,583,348
=========== =========== =========== ===========
See accompanying notes to condensed financial statements.
4
BOWLIN TRAVEL CENTERS, INC.
Condensed Statements of Cash Flows
(in thousands)
For the Nine Months Ended
---------------------------
October 31, October 31,
2003 2002
(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities:
Net income $ 412 $ 431
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 515 556
Amortization of loan fee 18 21
(Gain) loss on sale of property and equipment (34) 2
Deferred income taxes (19) (14)
Changes in operating assets and liabilities, net 417 456
----------- -----------
Net cash provided by operating activities 1,309 1,452
----------- -----------
Cash flows from investing activities:
Proceeds from sale of assets 214 4
Purchases of property and equipment, net (1,686) (474)
Accrued interest receivable (6) 6
Investment in bond (1,000) --
Investment in real estate (47) --
Mortgages receivable, net 309 3
Notes receivable, net 22 25
----------- -----------
Net cash used in investing activities (2,194) (436)
----------- -----------
Cash flows from financing activities:
Payments on long-term debt (484) (553)
Proceeds from borrowing 225 --
----------- -----------
Net cash used in financing activities (259) (553)
----------- -----------
Net (decrease) increase in cash and cash equivalents (1,144) 463
Cash and cash equivalents at beginning of period 2,416 2,671
----------- -----------
Cash and cash equivalents at end of period $ 1,272 $ 3,134
=========== ===========
See accompanying notes to condensed financial statements.
5
BOWLIN TRAVEL CENTERS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. The condensed financial statements of Bowlin Travel Centers, Inc. (the
"Company") as of and for the three months and nine months ended October 31,
2003 and 2002 are unaudited and reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the financial position and operating
results for the interim periods. The interim financial statements should be
read in conjunction with the financial statements and notes, together with
management's discussion and analysis of financial condition and results of
operations, contained in the Company's annual report on Form 10-K for the
fiscal year ended January 31, 2003. Results of operations for interim
periods are not necessarily indicative of results that may be expected for
the year as a whole.
2. On May 19, 2003, the Company transferred $1,000,000 into a bond with the
Federal Home Loan Bank. The bond has a maturity date of May 19, 2010 that
bears semi-annual interest of 4.24% and has a six month call provision.
3. In July 2003, the Company entered into a revolving line of credit with one
of its existing lenders in the amount of $2,000,000 to fund capital
expenditures. The note will bear interest based on prime rate. As of
October 31, 2003, $225,000 was drawn on this credit agreement.
4. On October 30, 2003 the Company sold a Dairy Queen located in Deming, New
Mexico to a third party for $150,000 cash plus a $10,000 note that bears 7%
interest annually and is due and payable on the one year anniversary of the
date of closing. The assets had a carrying value of approximately $164,000.
The loss on the sale of the Dairy Queen was approximately $4,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CERTAIN STATEMENTS CONTAINED HEREIN WITH RESPECT TO FACTORS WHICH MAY AFFECT
FUTURE EARNINGS, INCLUDING MANAGEMENT'S BELIEFS AND ASSUMPTIONS BASED ON
INFORMATION CURRENTLY AVAILABLE, ARE FORWARD-LOOKING STATEMENTS MADE PURSUANT TO
THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. SUCH FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS INVOLVE
RISKS AND UNCERTAINTIES, AND RESULTS COULD VARY MATERIALLY FROM THE DESCRIPTIONS
CONTAINED HEREIN.
OVERVIEW
The following is a discussion of the financial condition and results of
operations of the Company as of and for the periods ended October 31, 2003 and
2002. This discussion should be read in conjunction with the Financial
Statements of the Company and the related notes included in the Company's annual
report on Form 10-K for fiscal year ended January 31, 2003.
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BOWLIN TRAVEL CENTERS, INC.
The Company's principal business activities include the operation of
full-service travel centers and restaurants that offer brand name food and
gasoline, and a unique variety of Southwestern merchandise to the traveling
public in the Southwestern United States, primarily New Mexico.
The discussion of results of operations, which follows, compares such selected
operating data for the interim periods presented.
RESULTS OF OPERATIONS
The following table presents certain income and expense items derived from the
Statements of Operations for the three months and nine months ended October 31
(unaudited and amounts in thousands):
Three Months Ended Nine Months Ended
-------------------------- --------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
SELECTED STATEMENT OF OPERATIONS DATA:
(in thousands, except per share data)
Gross sales $ 5,299 $ 5,334 $ 16,910 $ 17,464
=========== =========== =========== ===========
Net income $ 24 $ 27 $ 412 $ 431
=========== =========== =========== ===========
Earnings per share $ 0.01 $ 0.01 $ 0.09 $ 0.09
=========== =========== =========== ===========
COMPARISON OF THE THREE MONTHS ENDED OCTOBER 31, 2003 AND OCTOBER 31, 2002
Gross sales at the Company's travel centers decreased by 0.7% to $5.299 million
for the three months ended October 31, 2003, from $5.334 million for the three
months ended October 31, 2002. Merchandise sales decreased 5.2% to $2.162
million for the three months ended October 31, 2003, from $2.280 million for the
three months ended October 31, 2002. The decrease is due to a major interstate
construction project that adversely affected merchandise sales at one location
by $53,000 as well uncertainties related to the national economy. Gasoline sales
decreased 7.7% to $2.038 million for the three months ended October 31, 2003,
from $2.207 million for the same period in 2002. The decrease is primarily due
to the major interstate construction project that adversely affected gasoline
sales at one location by $363,000. Restaurant sales increased 14.1% to $535,000
for the three months ended October 31, 2003, from $469,000 for the three months
ended October 31, 2002. The increase is due to continuing sales incentive
programs as well as additional supervisory support dedicated to the restaurants.
Wholesale gasoline sales to independent retailers increased 49.2% to $564,000
for the three months ended October 31, 2003, from $378,000 for the three months
7
BOWLIN TRAVEL CENTERS, INC.
ended October 31, 2002. The increase is primarily due to an increase in sales at
one independent retailer.
Cost of goods sold decreased 1.9% to $3.384 million for the three months ended
October 31, 2003, from $3.449 million for the three months ended October 31,
2002. Merchandise cost of goods decreased 6.2% to $915,000 for the three months
ended October 31, 2003, from $975,000 for the three months ended October 31,
2002. The decrease is due to a major interstate construction project that
adversely affected merchandise cost of goods at one location by $35,000 as well
uncertainties related to the national economy. Gasoline cost of goods decreased
10.9% to $1.775 million for the three months ended October 31, 2003, from $1.992
million for the three months ended October 31, 2002. The decrease is primarily
due to a major interstate construction project that adversely affected gas cost
of goods at one location by $333,000. Restaurant cost of goods increased 27.0%
to $146,000 for the three months ended October 31, 2003, from $115,000 for the
three months ended October 31, 2002. The increase corresponds to the increase in
sales. Wholesale gasoline cost of goods increased 49.3% to $548,000 for the
three months ended October 31, 2003, from $367,000 for the three months ended
October 31, 2002. The increase directly corresponds to the increase in sales at
one independent retailer. Cost of goods sold as a percentage of gross revenues
improved for the three months ended October 31, 2003 to 63.9%, as compared to
64.7% for the three months ended October 31, 2002.
Gross profit increased 0.8% to $1.798 million for the three months ended October
31, 2003, from $1.783 million for the three months ended October 31, 2002. The
increase is primarily attributable to continued improvement of management of
costs of goods due to increases in volume purchasing.
General and administrative expenses consist of salaries, bonuses and commissions
for travel center personnel, property costs and repairs and maintenance. General
and administrative expenses also include executive and administrative
compensation and benefits, accounting, legal and investor relations fees.
General and administrative expenses increased 2.7% to $1.587 million for the
three months ended October 31, 2003, from $1.546 million for the three months
ended October 31, 2002. The increase is primarily due to continuing bonuses and
commissions for travel center personnel related to sales incentive programs as
well as an accrual of management bonuses.
Depreciation and amortization expense decreased 3.3% to $177,000 for the three
months ended October 31, 2003, from $183,000 for the three months ended October
31, 2002. The decrease is associated with certain assets becoming fully
depreciated.
The above factors contributed to an overall decrease in operating income of
37.0% to $34,000 for the three months ended October 31, 2003, compared to
operating income of $54,000 for the three months ended October 31, 2002.
Non-operating income (expense) includes interest income, gains and/or losses
from the sale of assets, rental income and interest expense. Interest income
decreased 3.3% to $29,000 for the three months ended October 31, 2003, from
8
BOWLIN TRAVEL CENTERS, INC.
$30,000 for the three months ended October 31, 2002. The decrease is due to
lower cash balances in the current period offset by the interest earned on the
higher yielding bond. Gain on the sale of property and equipment for the three
months ended October 31, 2003 was $2,000. There was no gain or loss on the sale
of property and equipment for the three months ended October 31, 2002. Rental
income was $21,000 for the three months ended October 31, 2003, compared to
$22,000 for the three months ended October 31, 2002. Interest expense decreased
17.9% to $46,000 for the three months ended October 31, 2003, from $56,000 for
the three months ended October 31, 2002. The decrease is primarily due to lower
interest rates as well as lower debt balances.
Income before income taxes decreased 20.0% to $40,000 for the three months ended
October 31, 2003, compared to income before income taxes of $50,000 for the
three months ended October 31, 2002. As a percentage of gross revenues, income
before income taxes was 0.8% for the three months ended October 31, 2003,
compared to 0.9% for the three months ended October 31, 2002.
Income tax expense decreased 30.4% to $16,000 for the three months ended October
31, 2003, compared to an income tax expense of $23,000 for the three months
ended October 31, 2002. The decrease is a result of lower pre-tax income.
The foregoing factors contributed to net income for the three months ended
October 31, 2003 of $24,000 compared to a net income of $27,000 for the three
months ended October 31, 2002.
COMPARISON OF THE NINE MONTHS ENDED OCTOBER 31, 2003 AND OCTOBER 31, 2002
Gross sales at the Company's travel centers decreased by 3.2% to $16.910 million
for the nine months ended October 31, 2003, from $17.464 million for the nine
months ended October 31, 2002. Merchandise sales decreased 4.2% to $7.241
million for the nine months ended October 31, 2003, from $7.561 million for the
nine months ended October 31, 2002. The decrease is due to a major interstate
construction project that adversely affected merchandise sales at one location
by $167,000 as well uncertainties related to the national economy. Gasoline
sales decreased 5.3% to $6.533 million for the nine months ended October 31,
2003, from $6.897 million for the same period in 2002. The decrease is primarily
due to the major interstate project that adversely affected gasoline sales at
one location by $783,000. Restaurant sales increased 12.2% to $1.763 million for
the nine months ended October 31, 2003, from $1.571 million for the nine months
ended October 31, 2002. The increase is due to continuing sales incentive
programs as well as additional supervisory support dedicated to the restaurants.
Wholesale gasoline sales to independent retailers decreased 4.3% to $1.373
million for the nine months ended October 31, 2003, from $1.435 million for the
nine months ended October 31, 2002. The decrease is primarily due to an
additional wholesale location in the prior nine month period not present in the
current period.
Cost of goods sold decreased 6.1% to $10.583 million for the nine months ended
October 31, 2003, from $11.271 million for the nine months ended October 31,
2002. Merchandise cost of goods decreased 4.6% to $3.070 million for the nine
9
BOWLIN TRAVEL CENTERS, INC.
months ended October 31, 2003, from $3.217 million for the nine months ended
October 31, 2002. The decrease is primarily due to a major interstate
construction project that adversely affected merchandise cost of goods at one
location by $95,000 as well uncertainties related to the national economy.
Gasoline cost of goods decreased 8.2% to $5.720 million for the nine months
ended October 31, 2003, from $6.233 million for the nine months ended October
31, 2002. The decrease is primarily due to a major interstate construction
project that adversely affected gas cost of goods at one location by $723,000.
Restaurant cost of goods increased 8.5% to $460,000 for the nine months ended
October 31, 2003, from $424,000 for the nine months ended October 31, 2002. The
increase corresponds to the increase in restaurant sales; however, the increase
in cost of goods is less than the increase in sales as a result of improved cost
controls. Wholesale gasoline cost of goods decreased 4.6% to $1.333 million for
the nine months ended October 31, 2003, from $1.397 million for the nine months
ended October 31, 2002. The decrease is primarily due to an additional wholesale
location in the prior nine month period not present in the current period. Cost
of goods sold as a percentage of gross revenues improved for the nine months
ended October 31, 2003 to 62.6%, as compared to 64.5% for the nine months ended
October 31, 2002.
Gross profit increased 1.7% to $5.978 million for the nine months ended October
31, 2003, from $5.879 million for the nine months ended October 31, 2002. The
increase is primarily attributable to improved management of cost of goods due
to increases in volume purchasing.
General and administrative expenses consist of salaries, bonuses and commissions
for travel center personnel, property costs and repairs and maintenance. General
and administrative expenses also include executive and administrative
compensation and benefits, accounting, legal and investor relations fees.
General and administrative expenses increased 3.5% to $4.831 million for the
nine months ended October 31, 2003, from $4.667 million for the nine months
ended October 31, 2002. The increase is primarily due to continuing bonuses and
commissions for travel center personnel related to sales incentive programs as
well as an accrual of management bonuses.
Depreciation and amortization expense decreased 7.4% to $515,000 for the nine
months ended October 31, 2003 from $556,000 for the nine months ended October
31, 2002. The decrease is associated with certain assets becoming fully
depreciated.
The above factors contributed to an overall decrease in operating income of 3.7%
to $632,000 for the nine months ended October 31, 2003, compared to operating
income of $656,000 for the nine months ended October 31, 2002.
Non-operating income (expense) includes interest income, gains and/or losses
from the sale of assets, rental income and interest expense. Interest income
decreased 4.8% to $80,000 for the nine months ended October 31, 2003, from
$84,000 for the nine months ended October 31, 2002. The decrease is due to lower
cash balances in the current period offset by the interest earned on the higher
yielding bond. Gain on the sale of property and equipment for the nine months
ended October 31, 2003 was $34,000, compared to a loss on the sale of property
10
BOWLIN TRAVEL CENTERS, INC.
and equipment of $2,000 for the nine months ended October 31, 2002. Rental
income was $66,000 for the nine months ended October 31, 2003 as well as the
nine months ended October 31, 2002. Interest expense decreased 17.1% to $141,000
for the nine months ended October 31, 2003, from $170,000 for the nine months
ended October 31, 2002. The decrease is primarily due to lower interest rates as
well as lower debt balances.
Income before income taxes decreased 1.2% to $672,000 for the nine months ended
October 31, 2003, compared to income before income taxes of $680,000 for the
nine months ended October 31, 2002. As a percentage of gross revenues, income
before income taxes was 4.0% for the nine months ended October 31, 2003,
compared to 3.9% for the nine months ended October 31, 2002.
Income tax expense increased 4.4% to $260,000 for the nine months ended October
31, 2003, compared to an income tax expense of $249,000 for the nine months
ended October 31, 2002. The increase is a result of a permanent tax difference
for October 31, 2002 that resulted in a reduction to income tax expense that is
not present in October 31, 2003.
The foregoing factors contributed to net income for the nine months ended
October 31, 2003 of $412,000 compared to a net income of $431,000 for the nine
months ended October 31, 2002.
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 2003, the Company had working capital of $2.214 million and a
current ratio of 1.9:1, compared to working capital of $4.038 million and a
current ratio of 3.1:1 as of January 31, 2003. Net cash provided by operating
activities was $1.309 million for the nine months ended October 31, 2003,
compared to $1.452 million for the nine months ended October 31, 2002. Net cash
provided by operating activities for the nine months ended October 31, 2003 is
primarily attributable to net income adjusted for depreciation and amortization
expense and changes in operating assets and liabilities partially offset by
gains on sales of assets. Net cash provided by operating activities for the nine
months ended October 31, 2002 is primarily attributable to net income adjusted
for depreciation and amortization expense and changes in other operating assets
and liabilities.
Net cash used in investing activities for the nine months ended October 31, 2003
was $2.194 million, consisting of $1.686 million which was used for purchases of
property and equipment as well as $1.000 million invested in a bond with the
Federal Home Loan Bank, partially offset by mortgages receivable and proceeds
from the sale of assets. For the nine months ended October 31, 2002, net cash
used in investing activities was $436,000, consisting of $474,000, which was
used for purchases of property and equipment, partially offset by notes.
Net cash used in financing activities for the nine months ended October 31, 2003
was $259,000, which were payments on long-term debt partially offset by proceeds
from borrowing. For the nine months ended October 31,2002, net cash used in
financing activities was $553,000, which were payments on long-term debt.
11
BOWLIN TRAVEL CENTERS, INC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The principal market risk to which the Company is exposed are interest rates on
the Company's debt. The Company's interest sensitive liabilities are its debt
instruments. Variable interest on the majority of the Company's debt equals
LIBOR plus an applicable margin. Because rates may increase or decrease at any
time, the Company is exposed to market risk as a result of the impact that
changes in these base rates may have on the interest rate applicable to Company
borrowings. Management does not, however, believe that any risk inherent in the
variable rate nature of its debt is likely to have a material effect on the
Company's financial position, results of operations or liquidity.
The Company has not entered into any market risk sensitive instruments for
trading purposes. Further, the Company does not currently have any derivative
instruments outstanding and has no plans to use any form of derivative
instruments to manage the Company's business in the foreseeable future.
Profit margins on gasoline sales can be adversely affected by factors beyond the
control of the Company, including supply and demand in the retail gasoline
market, price volatility and price competition from other gasoline marketers.
The availability and price of gas could have an adverse impact on general
highway traffic. The Company has not entered into any long-term fixed-price
supply agreements for gasoline. Any substantial decrease in profit margins on
gasoline sales or number of gallons sold could have a material adverse effect on
the Company's gross margins and operating income.
ITEM 4. CONTROLS AND PROCEDURES.
The Company's management evaluated, with the participation of the Chief
Executive Officer and Chief Financial Officer, the effectiveness of the
Company's disclosure controls and procedures as of the end of the period covered
by this report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that the Company's disclosure controls and
procedures were effective as of the end of the period covered by this report.
There has been no change in the Company's internal control over financial
reporting that occurred during the quarter covered by this report that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions, regardless of how remote.
12
BOWLIN TRAVEL CENTERS, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities and Use of Proceeds. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 10.33 - Purchase and Sale Agreement, dated October 30,
2003, by and between Bowlin Travel Centers, Inc., William D.
Kennon and Deming Fast Foods, Inc., for the real estate known as
a Dairy Queen restaurant business located in Deming, New Mexico.
Exhibit 31.1 - Certification pursuant to Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934, as amended.
Exhibit 31.2 - Certification pursuant to Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934, as amended.
Exhibit 32.1 - Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Exhibit 32.2 - Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(b) Reports on Form 8-K.
On September 11, 2003, the Company filed a Current Report on Form
8-K under Item 9 to disclose under Regulation FD a press release
dated September 11, 2003, announcing revenue results for the
quarter ended July 31, 2003.
13
BOWLIN TRAVEL CENTERS, INC.
Signatures
Pursuant to the requirements 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.
Date: December 11, 2003
/s/ Michael L. Bowlin
-----------------------------------------
Michael L. Bowlin, Chairman of the Board,
President and Chief Executive Officer
/s/ Nina J. Pratz
-----------------------------------------
Nina J. Pratz, Chief Financial Officer
14