7-01-2019

Strong financials, strong cash flows, strong shareholder interests, and strong hidden assets. Bowl for America will easily return above a 20% return without making significant changes. It appears that this operator is like Berkshire Hathaway when Buffett bought it. Bowling has a mediocre if doubtful future; why not shift operations to a different type of business or purchase subs?

Total Market Value – 81.7 MM

Assets – 30,485,650 with no intangible values and 17 commercial properties valued at cost and paid off.

Liabilities – 4,552,000 with no significant long term liabilities

Equity – 24,578,230

Revenue – 24,770,884

Cash Flow – 4,015,939

Net Income – 3,785,985

Dividend Payout Ratio – 90% or more

CapEx – $1MM to $2MM per year.

Can easily finance a dividend with debt. Why not finance more operations with debt? 

Also sitting on $7MM of stocks unmanaged. 

Issues are the governance – supervoting B Shares spoil any chance of controlling the company. Many of the board are largest shareholders and former employees. No successors for the 86 year old Les Goldman. B shares have 10 votes per 1 A vote. Maximum amount of voting rights is 21% if all A shares are owned.

Bowling is reserved for the lower classes, and is discretionary – thus cyclical. In a downturn, BWL will get hurt.