BOWL AMERICA INC - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - BOWL AMERICA INC	Financial_Report.xls
EX-20 - EXHIBIT 20 - BOWL AMERICA INC	ex20.htm
EX-32 - EXHIBIT 32 - BOWL AMERICA INC	ex32.htm
EX-31.2 - EXHIBIT 31.2 - BOWL AMERICA INC	ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - BOWL AMERICA INC	ex31-1.htm

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED: APRIL 1, 2012

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No __

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer __ Accelerated Filer __ Non-Accelerated Filer __ Smaller Reporting Company X

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act) Yes __ No X

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

	Shares Outstanding at
	April 28, 2012
Class A Common Stock,
$.10 par value	3,683,009

Class B Common Stock,
$.10 par value	1,468,462

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BOWL AMERICA INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Thirteen Weeks Ended				Thirty-nine Weeks Ended
	April 1,		March 27,		April 1,		March 27,
	2012		2011		2012		2011
Operating Revenues:
Bowling and other	$	5,447,516	$	5,872,814	$	13,849,219	$	14,433,458
Food, beverage and merchandise sales		2,291,401		2,401,908		5,815,438		5,971,115
		7,738,917		8,274,722		19,664,657		20,404,573

Operating Expenses:
Employee compensation and benefits		3,089,348		3,172,698		9,187,596		9,382,174
Cost of bowling and other services		1,575,872		1,930,569		5,121,198		5,647,496
Cost of food, beverage and merchandise sales	599,917			629,513		1,648,712		1,675,857
Depreciation and amortization		378,134		436,051		1,200,535		1,304,524
General and administrative		237,399		216,320		750,707		709,821
		5,880,670		6,385,151		17,908,748		18,719,872

Operating Income		1,858,247		1,889,571		1,755,909		1,684,701
Interest and dividend income		126,710		116,742		390,742		447,553

Earnings before provision for income taxes		1,984,957		2,006,313		2,146,651		2,132,254
Provision for income taxes		694,800		722,200		751,400		767,600

Net Earnings	$	1,290,157	$	1,284,113	$	1,395,251	$	1,364,654

Earnings per share-basic & diluted	$	.25	$	.25	$	.27	$	.27

Weighted average shares outstanding		5,151,471		5,146,971		5,151,471		5,146,971

Dividends paid	$	824,235	$	823,515	$	2,472,706	$	2,419,077

Per share, dividends paid, Class A	$	.16	$	.16	$	.48	$	.47

Per share, dividends paid, Class B	$	.16	$	.16	$	.48	$	.47

The operating results for the thirteen (13) and thirty-nine (39) week periods ended April 1, 2012 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 STATEMENTS OF EARNINGS (CONTINUED)

(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

	Thirteen Weeks Ended					Thirty-nine Weeks Ended
	April 1,		March 27,			April 1,			March 27,
	2012		2011			2012			2011

Net Earnings	$	1,290,157	$	1,284,113		$	1,395,251		$	1,364,654
Other comprehensive earnings- net of tax
Unrealized gain (loss)on available-for-sale securities net of tax (benefit) of $24,023 and ($12,065) for 13 weeks, and ($47,184) and $219,519 for 39 weeks		39,029		(19,598	)		(76,657	)		356,647

Comprehensive earnings	$	1,329,186	$	1,264,515		$	1,318,594		$	1,721,301

The operating results for the thirteen (13) and thirty-nine (39) week periods ended April 1, 2012 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
	April 1,		July 3,
	2012		2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,435,737	$	2,361,846
Short-term investments		4,663,726		6,297,822
Inventories		498,446		480,318
Prepaid expenses and other		615,306		701,711
Income taxes refundable		-		275,847
TOTAL CURRENT ASSETS		10,213,215		10,117,544
LAND, BUILDINGS & EQUIPMENT Net of accumulated depreciation of $37,867,579 and $37,570,380		22,873,127		22,581,314
OTHER ASSETS:
Marketable securities		7,724,154		7,538,332
Cash surrender value-life insurance		594,792		594,792
Other		84,780		85,780
TOTAL OTHER ASSETS		8,403,726		8,218,904
TOTAL ASSETS	$	41,490,068	$	40,917,762

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	627,670	$	666,784
Accrued expenses		902,705		1,224,237
Dividends payable		824,235		824,235
Income taxes payable		101,512		-
Other current liabilities		2,335,130		302,394
Current deferred income taxes		53,311		53,311
TOTAL CURRENT LIABILITIES		4,844,563		3,070,961
LONG-TERM DEFERRED COMPENSATION		43,701		43,701
NONCURRENT DEFERRED INCOME TAXES		2,454,525		2,501,709
TOTAL LIABILITIES		7,342,789		5,616,371

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 a share: Authorized, 10,000,000 shares
Class A issued and outstanding 3,683,009		368,301		368,301
Class B issued and outstanding 1,468,462		146,846		146,846
Additional paid-in capital		7,727,264		7,727,264
Accumulated other comprehensive earnings-
Unrealized gain on available-for-sale securities, net of tax		2,206,297		2,282,954
Retained earnings		23,698,571		24,776,026
TOTAL STOCKHOLDERS' EQUITY		34,147,279		35,301,391

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	41,490,068	$	40,917,762

See notes to condensed consolidated financial statements.

BOWL AMERICA INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Thirty-nine Weeks Ended
	April 1,			March 27,
	2012			2011
Cash Flows From Operating Activities
Net earnings	$	1,395,251		$	1,364,654
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		1,200,535			1,304,524
Changes in assets and liabilities
(Increase) decrease in inventories		(18,128	)		22,121
Decrease (increase) in prepaid & other		86,405			(319,414	)
Decrease in income taxes refundable		275,847			615,054
Decrease in other long-term assets		1,000			2,300
Decrease in accounts payable		(39,114	)		(57,218	)
Decrease in accrued expenses		(321,532	)		(103,571	)
Increase in income taxes payable		101,512			-
Increase in other current liabilities		2,032,736			2,242,194
Net cash provided by operating activities		4,714,512			5,070,644

Cash Flows From Investing Activities
Expenditures for land, building and equip		(1,492,348	)		(908,558	)
Net sales & maturities of short-term investments		1,634,096			337,063
Purchases of marketable securities		(309,663	)		(149,168	)
Net cash used in Investing activities		(167,915	)		(720,663	)

Cash Flows From Financing Activities
Payment of cash dividends		(2,472,706	)		(2,419,077	)

Net cash used in financing activities		(2,472,706	)		(2,419,077	)

Net Increase in Cash and Equivalents		2,073,891			1,930,904

Cash and Equivalents, Beginning of period		2,361,846			2,579,487

Cash and Equivalents, End of period	$	4,435,737		$	4,510,391

Supplemental Disclosures of Cash Flow Information
Cash Paid During the Period for:
Income taxes	$	256,041		$	152,546

See notes to condensed consolidated financial information.

BOWL AMERICA INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Thirty-nine Weeks Ended

April 1, 2012

(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 July 3, 2011 has been derived from the Company's July 3, 2011 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.

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 of the Company’s financial position and results of operations 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 annual report on Form 10-K for the year ended July 3, 2011.

2. Investments

The Company’s investments are categorized as available-for-sale. Short-term investments consist of certificates of deposits with maturities of generally three months to one year. Equity securities consist primarily of telecommunications stocks. Mutual funds consist of federal agency mortgage backed securities (Ginnie Mae). The fair value of the Company’s investments at April 1, 2012 and July 3, 2011 were as follows:

April 1, 2012 Description	Fair Value		Cost basis		Unrealized Gain
Short-term investments	$	4,663,726	$	4,663,726	$	-
Equity securities	$	4,263,867	$	888,998	$	3,374,869
Mutual funds	$	3,460,287	$	3,270,863	$	189,424
July 3, 2011 Description	Fair Value		Cost basis		Unrealized Gain
Short-term investments	$	6,297,822	$	6,297,822	$	-
Equity securities	$	4,235,914	$	710,799	$	3,525,115
Mutual funds	$	3,302,418	$	3,139,399	$	163,019

The fair values of the Company’s investments were determined as follows:

April 1, 2012 Description	Quoted Price for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Certificates of deposits	$	-	$	4,663,726	$	-
Equity securities		4,263,867		-		-
Mutual funds		3,460,287		-		-

Total	$	7,724,154	$	4,663,726	$	-
July 3, 2011 Description	Quoted Price for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Certificates of deposits	$	-	$	6,297,822	$	-
Equity securities		4,235,914		-		-
Mutual funds		3,302,418		-		-

Total	$	7,538,332	$	6,297,822	$	-

The telecommunications stocks included in the portfolio as of April 1, 2012 were:

82,112 shares of AT&T	4,398 shares of CenturyTel
354 shares of Fairpoint Communications	4,508 shares of Frontier Communications
939 shares of Supermedia	475 shares of LSI
774 shares of NCR	40,000 shares of Sprint
774 shares of Teradata	23,784 shares of Verizon
11,865 shares of Vodafone	4,079 shares of Windstream
2,520,shares of Manulife

3. Commitments and Contingencies

The Company’s purchase commitments at April 1, 2012 are for materials, supplies, services and equipment as part of the normal course of business.

4. Employee benefit plans

The Company has two defined contribution plans with Company contributions determined by the Board of Directors. The Company has no defined benefit plan or other postretirement plan.

5. New Accounting Pronouncements

In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income.” This update requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. These changes became effective for the Company in the fiscal 2012 third quarter and did not have a significant impact on the Company’s financial statements as comprehensive earnings were already presented in consecutive statements.

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” (“ASU 2011-04”). This amendment contains certain updates to the fair value measurement guidance as well as enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for “Level 3” measurements, including enhanced disclosure for: (1) the valuation processes used by the reporting entity; and (2) the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. The provisions of this update are effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. The Company’s adoption of this standard did not have a significant impact on the Company’s fair value measurements, financial condition, results of operations or cash flows.

6. Subsequent Events

The Company has evaluated subsequent events through the time of filing these financial statements with the Securities and Exchange Commission on May 15, 2012, and has determined that no material subsequent events have occurred.

7. Reclassifications

Certain previous year amounts have been reclassified to conform with current year presentation.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. These statements are not guarantees of future performance or development and involve risks, uncertainties and other factors that are in some cases beyond our control. The forward-looking statements included in this Quarterly Report on Form 10-Q are made as the date hereof. We are under no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

LIQUIDITY AND CAPITAL RESOURCES

The Company views a strong financial position as a major benefit to shareholders and emphasizes payment of dividends as part of its financial plan. A portion of earnings has consistently been invested to create a reserve to protect the Company in downturns in business, to capitalize on opportunities for expansion and modernization and to provide a source of income. For these reasons, the Company prefers a conservative approach to investing rather than taking greater risk for possible rapid growth. The Company balances market volatility by using both fixed income and equity investments in managing its reserve funds. Any equity security is subject to price fluctuation, however, the stocks held by the Company have relatively low volatility. The Company has long been invested in a Government National Mortgage Association (“Ginnie Mae”) fund and domestically domiciled stocks, primarily in telecommunications, with the perceived potential of appreciation. The Company considers that this diversity also provides a measure of safety of principal.

The Company purchased 5,000 shares of Verizon for $178,200 in the current fiscal year. The remainder of common stocks in our portfolio have come from spin-offs, mergers and acquisitions of AT&T and United Telecommunications (now Sprint) purchased in 1979 and 1984 at a cost of approximately $630,000. While not all stocks in the portfolio are domestic American companies any longer, we have received approximately $962,000 from mergers and sales, and over $2,900,000 in dividends, the majority of which are tax favored in the form of exclusion from federal taxable income. These marketable securities are carried at their fair value on the last day of the quarter. The value of the securities on April 1, 2012 was approximately $4,264,000. Short-term investments consisting mainly of Certificates of Deposits, cash and cash equivalents totaled $9,099,000 at the end of the fiscal third quarter of 2012 compared to $8,660,000 at the end of fiscal 2011.

The Company’s position in all the above investments is a source of expansion capital. Potential volatility in the trading prices of the marketable securities held by the Company could impact the Company’s opportunities for expansion. The Board of Directors reviews the portfolio weekly and any use of investments at its quarterly meetings.

In the nine-month period ended April 1, 2012, the Company expended approximately $1,492,000 for the purchase of bowling and restaurant equipment and building improvements including $300,000 for renovation of a domed roof. The one remaining domed roof renovation is expected to be completed this summer at an estimated cost of less than $250,000. The Company has made no application for third party funding as the Company believes cash and cash flows are sufficient to finance all contemplated purchases and to meet short-term purchase commitments and operating lease commitments.

The nine-month changes in the categories of Prepaid and other and of Accrued Expenses are primarily due to seasonal timing of payments including a cash contribution to a benefit plan.

Current liabilities generally 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 April 1, 2012, league deposits of approximately $2,061,000 were included in the current liabilities category.

Cash flow provided by operating activities in the thirty-nine weeks ended April 1, 2012 was $4,715,000 which, along with cash on hand, was sufficient to meet day-to-day cash needs and pay quarterly dividends. Cash dividends of approximately $2,473,000, or $.48 per share, were paid to shareholders during the nine month period ended April 1, 2012. In March 2012, the Company declared a regular quarterly dividend of $.16 per share, payable May 16, 2012 to shareholders of record as of April 18, 2012. The uncertain economic climate may require a review by the directors of future estimates of cash flows. The Board of Directors decides the amount and timing of any dividend at its quarterly meeting based on its appraisal of the state of the business and estimate of future opportunities.

Overview

The Company is in the entertainment business which, by its nature, has ups and downs based on consumer tastes and whims. Generally, promotional and open play bowling, which depends on the public’s discretionary budget dollars and their choices, accounts for more than half of our business. An unstable economy can lead many to participate in entertainment that is close to home and relatively inexpensive. Bowling has those advantages. However the longer the economy remains unstable, the less willing people are to spend on other than necessities. Weather is also a factor, especially for casual bowlers. While rainy weather prompts people to look for indoor activities, heavy snow storms can keep customers from reaching the centers. Postponed league games are made up later in the season, but lost open play income is never recovered. Current economic conditions continue to create challenging times but our response will be helped by having the resources to be able to promote the sport.

RESULTS OF OPERATIONS

Net earnings were $1,290,157 and $1,284,113, or $.25 per share for each of the thirteen-week periods ended April 1, 2012 and March 27, 2011, respectively. Thirty-nine weeks year-to-date net earnings were $1,395,251 and $1,364,654, respectively, or $.27 per share for each of the current and prior year periods.

Management believes that the unseasonably mild winter quarter, usually our busiest, contributed to potential open play customers’ pursuing outdoor activities. In addition, although the economy appears to be making a positive turn, people remain hesitant to spend discretionary dollars. The operating results for fiscal 2012 periods included in this report are not necessarily indicative of results to be expected for the year.

The following table sets forth the items in our consolidated summary of operations for the fiscal year-to-date periods ended April 1, 2012, and March 27, 2011, and the dollar and percentage changes therein.

	Thirty-nine weeks ended
	April 1, 2012 and March 27, 2011
	Dollars in thousands
	04/01/2012		03/27/2011		Change			% Change
Operating Revenues:
Bowling and other	$	13,849	$	14,434	$	(585	)		(4.1	)%
Food, beverage & merchandise sales		5,816		5,971		(155	)		(2.6	)
		19,665		20,405		(740	)		(3.6	)
Operating Expenses:
Compensation & benefits		9,188		9,382		(194	)		(2.1	)
Cost of bowling & other		5,121		5,647		(526	)		(9.3	)
Cost of food, beverage & merch sales		1,649		1,676		(27	)		(1.6	)
Depreciation & amortization		1,200		1,305		(105	)		(8.0	)
General & administrative		751		710		41			5.8
		17,909		18,720		(811	)		(4.3	)

Operating income		1,756		1,685		71			4.2

Interest & dividend income		391		447		(56	)		(12.5	)

Earnings before taxes		2,147		2,132		15			.7
Income taxes		752		767		(15	)		(2.0	)

Net Earnings	$	1,395	$	1,365	$	30			2.2

Operating Revenues

Total operating revenues in the most recent quarter decreased $536,000 to $7,739,000 compared to a decrease of $17,000 to $8,275,000 in the three-month period ended March 27, 2011. For the current fiscal nine-month period operating revenues were down $740,000 versus a decrease of $853,000 in the comparable nine-month period a year ago. The current year declines are partially attributable to customers concerns about discretionary spending and, as stated above, the unusually warm weather.

Food, beverage and merchandise sales were down approximately $111,000 and $155,000 or 5% and 3% in the current year quarter and nine-month periods, respectively. The comparable prior year periods showed decreases of $56,000 and $277,000 or 2% and 4%, respectively. Cost of sales decreased 5% and 2% in the current year quarter and year to date periods.

Operating Expenses

Operating expenses were down $504,000 and $811,000 or 8% and 4% in the current three and nine-month periods, respectively. Expenses in the same category last year were down $175,000 for the three-month period and down $404,000 for the nine-month period. Employee compensation and benefits were down approximately $83,000 or 3% in the current year three-month period and $194,000 or 2% in the nine-month period, partially a result of lower costs due to changes in group health insurance and for scheduling adjustments. In the prior year comparable periods the category was down 2% in each period or $69,000 and $141,000, respectively. Included in this category of expense are contributions to our two benefit plans, both of which are defined contribution plans. There is no additional obligation beyond the current year contribution.

Cost of bowling and other services decreased $355,000 or 18% and $526,000 or 9% in the three and nine-month periods, respectively. In the thirteen weeks ended April 1, 2012, maintenance and repair costs were down $33,000 or 14% compared to the prior year similar period. The prior year period included interior wall repairs at some centers. For the nine-month period maintenance costs were down $119,000 or 10%. Advertising costs during the current year quarter decreased $142,000 or 66%. The current nine-month period was down $227,000 or 32% versus an increase of $93,000 or 15% in the prior year comparable period. In the prior year ad campaigns included all market areas and several forms of media. In the nine month periods ended April 1, 2012 and March 27, 2011, respectively, utility costs were down 1% and 5%. In the current year period, lower natural gas prices, warmer winter weather and continued energy management helped offset higher electric prices. Supplies and services expenses were down 3% and up 2% in the current and prior nine-month periods, respectively, in part due to purchase patterns in both years.

Insurance expense excluding health insurance declined 13% in the current year-to-date period after recent policy renewals were better than expected. In the prior year comparable period insurance expense declined 4%.

Depreciation and amortization expense was down 8% in the current year nine-month period and 5% in the prior year comparable period.

As a result of the above, the current thirty-nine week period of fiscal 2012 showed operating income of $1,756,000, an increase of approximately $71,000 from the prior year comparable period operating income of $1,685,000.

Interest and Dividend Income

Interest and dividend income decreased approximately $56,000 in the fiscal 2012 year-to-date period versus an increase of $36,000 in the fiscal 2011 year-to-date period. The decrease in the current year period is due to lower balances, lower interest rates and lower capital gains received from the Ginnie Mae fund.

CRITICAL ACCOUNTING POLICIES

Management has identified accounting for marketable investment securities as a critical accounting policy due to the significance of the amounts included in the Company’s balance sheet under the captions of Short-term investments and Marketable 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 earnings, 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.

Management has identified accounting for the impairment of long-lived assets as a critical accounting policy due to the significance of the amounts included in the Company’s balance sheet under the caption of Land, Buildings and Equipment. The Company reviews long-lived assets whenever events or changes indicate that the carrying amount of an asset may not be recoverable. In making such evaluations, the Company compares the expected future cash flows to the carrying amount of the assets. An impairment loss equal to the difference between the assets’ fair value and carrying value is recognized when the estimated future cash flows are less than the carrying amount.

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 April 1, 2012. 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 April 1, 2012, 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

PART II - OTHER INFORMATION

Item 6. Exhibits.

20	Press release issued May 15, 2012 (furnished herewith)

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act filed herewith

31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act filed herewith

32	Written Statement of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. 1350 filed herewith

101	Interactive data files for the thirteen weeks ended April 1, 2012, formatted in XBRL (eXtensible Business Reporting Language)

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: May 15, 2012	By: /s/ Leslie H. Goldberg
	Leslie H. Goldberg, President


Date: May 15, 2012	By: /s/ Cheryl A. Dragoo
	Cheryl A. Dragoo, Controller

BOWL AMERICA INC - FORM 10-Q - May 15, 2012

Attached files

BOWL AMERICA INC Reports