Index

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
ý		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended April 30, 2005
		For the quarterly period ended April 30, 2006
o		TRANSITION REPORT ~~PURSUANT~~UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from __________ to __________

Commission file number: 000-31701

~~Commission~~BOWLIN ~~file~~ TRAVEL ~~number: 000-31701~~CENTERS, INC.

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)

505-266-5985

(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 xý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined inby Rule 12b-2 of the Exchange Act). ~~Yes o No x~~

~~As of June~~Large 9,accelerated ~~2005,~~filer ~~4,583,348~~o ~~shares~~Accelerated offiler ~~the~~o ~~issuer’s~~Non-accelerated ~~common~~filer ~~stock were outstanding.~~ý

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

As of June 12, 2006, 4,583,348 shares of the issuer’s common stock were outstanding.

Index

BOWLIN TRAVEL CENTERS, INC.

	INDEX
PART I. FINANCIAL INFORMATION		Page No.
Item 1.	Financial Statements
	Condensed Balance Sheets as of April 30, 2005 and January 31, 2005	3
	Condensed Balance Sheets as of April 30, 2006 and January 31, 2006	3
	Condensed Statements of Income for the Three Months Ended April 30, 2005 and 2004	4
	Condensed Statements of Income for the Three Months Ended April 30, 2006 and 2005	4
	Condensed Statements of Cash Flows for the Three Months Ended April 30, 2005 and 2004	5
	Condensed Statements of Cash Flows for the Three Months Ended April 30, 2006 and 2005	5
	Notes to the Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	129
Item 4.	Controls and Procedures	1310
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	1310
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 1A.	Risk Factors	10
Item 3.	Defaults Upon Senior Securities	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 4.	Submission of Matters to a Vote of Security Holders	13
Item 3.	Defaults Upon Senior Securities	10
Item 5.	Other Information	13
Item 4.	Submission of Matters to a Vote of Security Holders	10
Item 6.	Exhibits	13
Item 5.	Other Information	10
	Signatures	14
Item 6.	Exhibits	11
	Signatures	11

Index

PART I.

FINANCIAL INFORMATION

~~ITEM~~Item 1. Financial Statements

BOWLIN TRAVEL CENTERS, INC.

Condensed Balance Sheets

(in thousands, except share data)

	April 30,		January 31,
	2005		2005
	2006		2006
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,~~018~~915	$	2,~~043~~615
Accounts receivable		27275		941
Accounts receivable, related parties		52		43
Deferred income taxes		50		72
Inventories		3,~~803~~964		3,~~507~~606
Prepaid expenses		~~273~~167		~~364~~276
Notes receivable, current maturities		320		39
Total current assets		67,~~176~~391		56,~~969~~619
Property and equipment, net		1312,~~134~~505		1312,~~265~~541
Intangible assets, net		~~215~~183		~~225~~190
Interest receivable		294		2113
Investment in real estate		~~439~~415		~~439~~415
Notes receivable		~~166~~88		~~166~~102
Total assets	$	20,~~159~~586	$	2019,~~085~~880
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,~~363~~822		~~1,083~~861
Current installments of long-term debt		~~582~~514		~~582~~515
Short-term borrowing		210		210
Accrued liabilities		578		682
Accrued liabilities		426		481
Deferred revenue		18		96
Deferred revenue		184		31
Total current liabilities		2,932		2,154
Total current liabilities		2,765		2,387
Deferred income taxes		864		884
Deferred income taxes		870		877
Long-term debt, less current installments		4,675		4,799
Deferred revenue, long term		—		166
Total liabilities		8,471		7,837
Long-term debt, less current installments		5,125		5,262
Total liabilities		8,760		8,692
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized, none issued or outstanding at April 30, 2005 and January 31, 2005		—		—
Preferred stock, $0.001 par value; 1,000,000 shares authorized, none issued or outstanding at April 30, 2006 and January 31, 2006		—		—
Common stock, $.001 par value; 10,000,000 shares authorized, 4,583,348 issued and outstanding at April 30, 2005 and January 31, 2005		5		5
Common stock, $0.001 par value; 10,000,000 shares authorized, 4,583,348 issued and outstanding at April 30, 2006 and January 31, 2006		5		5
Additional paid in capital		9,775		9,775
Retained earnings		12,~~619~~335		12,~~613~~263
Total stockholders’ equity		1112,~~399~~115		1112,~~393~~043
Total liabilities and stockholders’ equity	$	20,~~159~~586	$	2019,~~085~~880

See accompanying notes to condensed financial statements.

Index

BOWLIN TRAVEL CENTERS, INC.

Condensed Statements of Income

(in thousands, except share and per share data)

	Three Months Ended
	April 30,			April 30,
	2005			2004
	2006			2005
	(Unaudited)			(Unaudited)
Gross sales	$	67,~~194~~639		$	56,~~543~~194
Less discounts on sales		~~120~~87			~~118~~44
Net sales		67,~~074~~552			56,~~425~~150
Cost of goods sold		45,~~040~~266			34,~~547~~040
Gross profit		2,~~034~~286			12,~~878~~110
General and administrative expenses		(1,~~764~~935	)		(1,~~693~~840	)
Depreciation and amortization		(~~226~~217	)		(~~171~~226	)
Operating income		44134			1444
Non-operating income (expense):
Interest income		17			1417
Interest expense		(92103	)		(4692	)
Rental income		45			46
Gain on sale of property and equipment		3			—
Total non-operating income (expense)		(30	)		14
Miscellaneous income		24			—
Income before income taxes		14			28
Rental income		45			45
Income tax expense		8			13
Total non-operating income (expense)		(14	)		(30	)
Net income	$	6		$	15
Income before income taxes		120			14
Income tax expense		48			8
Net income	$	72		$	6
Earnings per share:
Weighted average common shares outstanding		4,583,348			4,583,348
Basic and diluted	$	0 .~~001~~016		$	0 .~~003~~001

See accompanying notes to condensed financial statements.

Index

BOWLIN TRAVEL CENTERS, INC.

Condensed Statements of Cash Flows

(in thousands)

	For the Three Months Ended
	April 30,			April 30,
	2005			2004
	2006			2005
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net income	$	672		$	156
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to
Depreciation and amortization		226			171
net cash provided by operating activities:
Amortization of loan fee		9			—
Depreciation and amortization		217			226
Deferred income taxes		(7	)		14
Amortization of loan fee		5			9
Changes in operating assets and liabilities, net		(20	)		158
Deferred income taxes, net		2			(7	)
Net cash provided by operating activities		214			358
Gain on sale of assets		(3	)		—
Changes in operating assets and liabilities, net		296			(20	)
Net cash provided by operating activities		589			214
Cash flows from investing activities:
Purchases of property and equipment, net		(94	)		(454	)
Proceeds from sale of assets		1			—
Accrued interest receivable		(8	)		(11	)
Purchases of property and equipment, net		(179	)		(94	)
Notes receivable, net		—			30
Accrued interest receivable		9			(8	)
Net cash used in investing activities		(102	)		(435	)
Notes receivable, net		5			—
Net cash used in investing activities		(164	)		(102	)
Cash flows from financing activities:
Payments on long-term debt		(~~137~~125	)		(~~193~~137	)
Net cash used in financing activities		(~~137~~125	)		(~~193~~137	)
Net decrease in cash and cash equivalents		(25	)		(270	)
Net increase (decrease) in cash and cash equivalents		300			(25	)
Cash and cash equivalents at beginning of period		2,~~043~~615			2,~~240~~043
Cash and cash equivalents at end of period	$	2,~~018~~915		$	12,~~970~~018

See accompanying notes to condensed financial statements.

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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 ended April 30, ~~2005~~2006 and ~~2004~~2005 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, ~~2005~~2006. Results of operations for interim periods are not necessarily indicative of results that may be expected for the year as a whole.

2. ~~Subsequent~~Beginning ~~event.~~February In1, ~~May of 2005~~2006, the Company ~~received~~began awholesaling ~~balloon~~gasoline ~~payment~~to ofthree ~~approximately~~new ~~$405,000,~~independent ~~for~~wholesale alocations. ~~note~~Two ~~receivable~~of ~~that~~the ~~includes~~independent awholesalers ~~deferred~~will ~~gain~~sell ofExxonMobil ~~approximately~~petroleum ~~$206,000,~~products. ~~which~~The ~~will~~other beindependent ~~received~~wholesaler ~~and~~will ~~recognized~~sell asCITGO ~~non-operating~~petroleum ~~income~~products.

Index

BOWLIN TRAVEL CENTERS, INC.

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 April 30, ~~2005~~2006 and ~~2004~~2005. 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, ~~2005~~2006.

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 and Arizona.

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 ended April 30, ~~2005~~2006 and 2005 (unaudited and amounts in thousands):

	Three Months Ended
	April 30, 2006		April 30, 2005
Selected Statement of Operations Data:
(in thousands, except per share data)

Gross sales	$	7,639	$	6,194

Net income	$	72	$	6

Earnings per share	$	0.016	$	0.001

Index

BOWLIN TRAVEL CENTERS, INC.

	Three Months Ended
	April 30, 2005
	All Stores			Same Store*			Picacho Stores
Selected Statement of Operations Data:
(in thousands, except per share data)
Gross sales	$	6,194		$	4,976		$	1,218
Discounts on sales		120			95			25
Net sales		6,074			4,881			1,193
Cost of goods sold		4,040			3,168			872
Gross profit		2,034			1,713			321
General and administrative expenses		1,764			1,467			297
Depreciation and amortization		226			175			51
Operating income (loss)		44			71			(27	)
Non-operating income (expense):
Interest income		17			17			0
Interest expense		(92	)		(55	)		(37	)
Rental income		45			42			3
Total non-operating income (expense)		(30	)		4			(34	)
Income (loss) before income taxes	$	14		$	75		$	(61	)
	Three Months Ended
	April 30, 2004
		All Stores			Same Store*			Picacho Store
Gross sales	$	5,543		$	4,689		$	854
Discounts on sales		118			100			18
Net sales		5,425			4,589			836
Cost of goods sold		3,547			2,940			607
Gross profit		1,878			1,649			229
General and administrative expenses		1,693			1,523			170
Depreciation and amortization		171			159			12
Operating income (loss)		14			(33	)		47
Non-operating income (expense):
Interest income		14			14			0
Interest expense		(46	)		(43	)		(3	)
Rental income		46			45			1
Total non-operating income (expense)		14			16			(2	)
Income (loss) before income taxes	$	28		$	(17	)	$	45
____________
* Does not include both Picacho Peak stores in 2005 and the one Picacho Peak store in 2004.

Comparison of the Three Months Ended April 30, 2006 and April 30, 2005

Gross profit increased 8.3% to $2.286 million for the three months ended April 30, 2006, from $2.110 million for the three months ended April 30, 2005. The increase corresponds to adjustments of standard markups within certain product categories that the Company gets as a result of volume purchasing as well as improved performance by store management.

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 5.2% to $1.935 million for the three months ended April 30, 2006, from $1.840 million for the three months ended April 30, 2005. The increase is due to store related personnel expenses, sign repairs and maintenance as the Company prepares for its peak season, and credit card fees related to processing credit cards through the Company’s gasoline distributorships.

Depreciation and amortization expense decreased 4.0% to $217,000 for the three months ended April 30, 2006, from $226,000 for the three months ended April 30, 2005. The decrease is associated with certain assets becoming fully depreciated.

The above factors contributed to an overall increase in operating income of 204.5% to $134,000 for the three months ended April 30, 2006, compared to operating income of $44,000 for the three months ended April 30, 2005.

Index

BOWLIN TRAVEL CENTERS, INC.

~~Comparison~~ Non-operating income (expense) includes interest income, rental income and interest expense. Interest income is unchanged at $17,000 for the three months ended April 30, 2006 and for the three months ended April 30, 2005. There was miscellaneous income of $24,000 for the ~~Three~~three ~~Months~~months ~~Ended~~ended April 30, 2006 compared to no miscellaneous income for the three months ended April 30, 2005. Rental income was $45,000 for the three months ended April 30, 2006 as well as the three months ended April 30, 2005. Interest expense increased 12.0% to $103,000 for the three months ended April 30, 2006, from $92,000 for the three months ended April 30, 2005. The increase is primarily due to increases in interest rates. Income before income taxes increased 757.1% to $120,000 for the three months ended April 30, 2006, compared to income before income taxes of $14,000 for the three months ended April 30, 2005. As a percentage of gross revenues, income before income taxes was 1.6% for the three months ended April 30, 2006, compared to 0.2% for the three months ended April 30, 2005. Income tax expense increased 500.0% to $48,000 for the three months ended April 30, 2006, compared to an income tax expense of $8,000 for the three months ended April 30, 2005. The increase is a result of higher income before income taxes. The foregoing factors contributed to net income for the three months ended April 30, 2006 of $72,000 compared to a net income of $6,000 for the three months ended April 30, 2005. Liquidity and Capital Resources At April 30, 2006, the Company had working capital of $4.459 million and a current ratio of 2.5:1, compared to working capital of $4.465 million and a current ratio of 3.1:1 as of January 31, 2006. Net cash provided by operating activities was $589,000 for the three months ended April 30, 2006, ~~2004~~ compared to $214,000 for the three months ended April 30, 2005. Net cash provided by operating activities for the three months ended April 30, 2006 is primarily attributable to net income of $72,000 adjusted for depreciation and amortization expense of $217,000 and changes in operating assets and liabilities of $296,000 partially offset by the gain on property and equipment of $3,000. Net cash provided by operating activities for the three months ended April 30, 2005 was primarily attributable to net income adjusted for depreciation and amortization expense of $226,000 and amortization of loan fees of $9,000 partially offset by changes in other operating assets and liabilities of $20,000 and deferred income taxes $7,000. Net cash used in investing activities for the three months ended April 30, 2006 was $164,000 primarily consisting of $179,000 which was used for purchases of property and equipment, offset by accrued interest receivable of $9,000, notes receivable of $5,000 and proceeds from the sale of property and equipment of $1,000. Net cash used in investing activities for the three months ended April 30, 2005 was $102,000 primarily consisting of $94,000 which was used for purchases of property and equipment plus accrued interest receivable of $8,000. Net cash used by financing activities for the three months ended April 30, 2006 was $125,000, which consisted of payments on long-term debt. For the three months ended April 30, 2005, net cash used in financing activities was $137,000, which were payments on long-term debt. 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.

Same Store

Same store financial data excludes the Company’s newly opened location, Picacho Peak Plaza as well as the existing Picacho Peak but does not include restaurant sales as the new facility does not have a restaurant operation. For the three months ended April 30, 2005, the sales of the new facility impacted the existing facility, with the net effect a positive sales result on the Company’s operations. A discussion of the new and existing Picacho Peak facilities follow the same store discussion.

Gross sales at the Company’s travel centers increased by 6.1% to $4.976 million for the three months ended April 30, 2005, from $4.689 million for the three months ended April 30, 2004. Merchandise sales increased 0.6% to $1.892 million for the three months ended April 30, 2005, from $1.881 million for the three months ended April 30, 2004. The increase is due to sales incentives as well as additional supervisory support dedicated to the stores. Gasoline sales increased 8.1% to $2.018 million for the three months ended April 30, 2005, from $1.867 million for the same period in 2004. The increase is due to market price increases. Restaurant sales increased 4.9% to $604,000 for the three months ended April 30, 2005, from $576,000 for the three months ended April 30, 2004. 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 26.6% to $462,000 for the three months ended April 30, 2005, from $365,000 for the three months ended April 30, 2004. The increase is due to market price increases partially offset by decreases in volume.

Total cost of goods sold increased 7.7% to $3.168 million for the three months ended April 30, 2005, from $2.940 million for the three months ended April 30, 2004. Merchandise cost of goods decreased 4.6% to $721,000 for the three months ended April 30, 2005, from $756,000 for the three months ended April 30, 2004. This decrease is primarily due to improved volume purchase pricing as well as maintaining mark-ups. Gasoline cost of goods increased 9.2% to $1.811 million for the three months ended April 30, 2005, from $1.659 million for the three months ended April 30, 2004. The increase corresponds to market price increases as well as price incentives given to reestablish traffic at one location after completion of a major highway construction project. Restaurant cost of goods increased 7.6% to $183,000 for the three months ended April 30, 2005, from $170,000 for the three months ended April 30, 2004. The increase is related to the increase in sales as well as an increase in prices. Wholesale gasoline cost of goods increased 27.6% to $453,000 for the three months ended April 30, 2005, from $355,000 for the three months ended April 30, 2004. The increase is due to market price increases partially offset by decreases in volume. Cost of goods sold as a percentage of gross revenues increased to 63.7% for the three months ended April 30, 2005, as compared to 62.7% for the three months ended April 30, 2004.

Gross profit increased 3.9% to $1.713 million for the three months ended April 30, 2005, from $1.649 million for the three months ended April 30, 2004. The increase is primarily attributable to increased sales.

General and administrative expenses consist of salaries, bonuses and commissions for travel center personnel, property costs and repairs and maintenance. General and administrative expenses decreased 3.7% to $1.467 million for the three months ended April 30, 2005, from $1.523 million for the three months ended April 30, 2004. The decrease is primarily due to the reclassification of Picacho Peak DQ and Travel Centers from same store general and administrative expenses for presentation and discussion with the new facility, Picacho Peak Plaza.

Depreciation and amortization expense increased 10.1% to $175,000 for the three months ended April 30, 2005, from $159,000 for the three months ended April 30, 2004.

The above factors contributed to an increase in operating income of 315.2% to $71,000 for the three months ended April 30, 2005, compared to an operating loss of $33,000 for the three months ended April 30, 2004.

Index

BOWLIN TRAVEL CENTERS, INC.

New and existing Picacho Peak facilities

On January 18, 2005, the Company opened a new state-of-the-art travel center in Picacho, Arizona. For the three months ended April 30, 2005, the sales of the new facility impacted the existing facility, with the net effect a positive sales result on the Company’s operations. The following discussion does not include restaurant sales, as the new travel center does not have a restaurant operation.

Gross sales at the new travel center were $742,000 for the three months ended April 30, 2005. Merchandise sales were $284,000 and gasoline sales were $458,000.

Gross sales at the existing travel center decreased by 44.3% to $476,000 for the three months ended April 30, 2005, from $854,000 for the three months ended April 30, 2004. Merchandise sales decreased 37.0% to $199,000 for the three months ended April 30, 2005, from $316,000 for the three months ended April 30, 2004. The decrease is due to the impact of the new facility. Gasoline sales decreased 48.5% to $277,000 for the three months ended April 30, 2005, from $538,000 for the same period in 2003. The decrease is due to the impact of the new facility.

Cost of goods sold for the new travel center were $539,000 for the three months ended April 30, 2005. Merchandise cost of goods were $130,000 and gasoline cost of goods were $409,000. Cost of goods as a percentage of gross revenues was 72.6% for the three months ended April 30, 2005.

Cost of goods for the existing travel center decreased 45.1% to $333,000 for the three months ended April 30, 2005, from $607,000 for the three months ended April 30, 2004. Merchandise cost of goods decreased 38.1% to $83,000 for the three months ended April 30, 2005, from $134,000 for the three months ended April 30, 2004. The decrease directly corresponds to the decrease in sales, which is due to the impact of the new facility. Gasoline cost of goods decreased 47.1% to $250,000 for the three months ended April 30, 2005, from $473,000 for the same period in 2003. The decrease directly corresponds to the decrease in sales, which is due to the impact of the new facility. Cost of goods sold as a percentage of gross revenues decreased for the three months ended April 30, 2005 to 70.0% compared to 71.1% for the three months ended April 30, 2004.

Gross profit at the new travel center was $190,000 for the three months ended April 30, 2005.

Gross profit for the existing travel center decreased 42.8% to $131,000 for the three months ended April 30, 2005, from $229,000 for the three months ended April 30, 2004. The decrease is attributable to the impact of the new facility.

General and administrative expenses consist of salaries, bonuses and commissions for travel center personnel, property costs and repairs and maintenance. General and administrative expenses at the new store were $165,000. General and administrative expenses at the existing store decreased 22.4% to $132,000 for the three months ended April 30, 2005, from $170,000 for the three months ended April 30, 2004. In the aggregate, general and administrative expenses increased 74.7% to $297,000 for the three months ended April 30, 2005, from $170,000 for the three months ended April 30, 2004. The increase is primarily due to the addition of the new Picacho Peak facility expenses related to sales incentive programs and additional personnel as well as utilities related to trash removal and credit card fees related to processing credit cards through the Company’s gasoline distributorships.

Depreciation and amortization expense at both the new and existing travel centers increased 325.0% to $51,000 for the three months ended April 30, 2005, from $12,000 for the three months ended April 30, 2004. The increase is primarily associated with the new travel centers’ assets.

The above factors for both the new and existing travel centers contributed to an overall decrease in operating income of 157.4% to a loss of $27,000 for the three months ended April 30, 2005, compared to operating income of $47,000 for the three months ended April 30, 2004.

Index

BOWLIN TRAVEL CENTERS, INC.

All Stores

Gross sales at the Company’s travel centers increased by 11.7% to $6.194 million for the three months ended April 30, 2005, from $5.543 million for the three months ended April 30, 2004. Merchandise sales increased 8.1% to $2.376 million for the three months ended April 30, 2005, from $2.197 million for the three months ended April 30, 2004. The increase is due to sales incentives as well as additional supervisory support dedicated to the stores. Gasoline sales increased 14.4% to $2.752 million for the three months ended April 30, 2005, from $2.405 million for the same period in 2004. The increase is due to market price increases. Restaurant sales increased 4.9% to $604,000 for the three months ended April 30, 2005, from $576,000 for the three months ended April 30, 2004. 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 26.6% to $462,000 for the three months ended April 30, 2005, from $365,000 for the three months ended April 30, 2004. The increase is due to market price increases partially offset by decreases in volume.

Cost of goods sold increased 13.9% to $4.040 million for the three months ended April 30, 2005, from $3.547 million for the three months ended April 30, 2004. Merchandise cost of goods increased 4.8% to $933,000 for the three months ended April 30, 2005, from $890,000 for the three months ended April 30, 2004. This increase directly relates to the increase in sales partially offset by to improved volume purchase pricing as well as maintaining mark-ups. Gasoline cost of goods increased 15.9% to $2.471 million for the three months ended April 30, 2005, from $2.132 million for the three months ended April 30, 2004. The increase corresponds to market price increases as well as price incentives given to reestablish traffic at one location after completion of a major highway construction project. Restaurant cost of goods increased 7.6% to $183,000 for the three months ended April 30, 2005, from $170,000 for the three months ended April 30, 2004. The increase is related to the increase in sales as well as an increase in prices. Wholesale gasoline cost of goods increased 27.6% to $453,000 for the three months ended April 30, 2005, from $355,000 for the three months ended April 30, 2004. The increase is due to market price increases partially offset by decreases in volume. Cost of goods sold as a percentage of gross revenues increased to 65.2% for the three months ended April 30, 2005, as compared to 64.0% for the three months ended April 30, 2004.

Gross profit increased 8.3% to $2.034 million for the three months ended April 30, 2005, from $1.878 million for the three months ended April 30, 2004. The increase is primarily attributable to continued improvement of management of costs of goods due to increases in volume purchasing as well as the new facility.

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 4.2% to $1.764 million for the three months ended April 30, 2005, from $1.693 million for the three months ended April 30, 2004. The increase is due to bonuses related to the sales incentive programs, additional personnel, sign rent, utilities related to trash removal and credit card fees related to processing credit cards through the Company’s gasoline distributorships.

Depreciation and amortization expense increased 32.2% to $226,000 for the three months ended April 30, 2005, from $171,000 for the three months ended April 30, 2004. The increase is primarily associated with the new travel centers’ property and equipment.

The above factors contributed to an overall increase in operating income of 214.3% to $44,000 for the three months ended April 30, 2005, compared to operating income of $14,000 for the three months ended April 30, 2004.

Non-operating income (expense) includes interest income, rental income and interest expense. Interest income decreased 21.4% to $17,000 for the three months ended April 30, 2005, from $14,000 for the three months ended April 30, 2004. The decrease is primarily due to lower cash balances in the current period. Rental income was $45,000 for the three months ended April 30, 2005 compared to $46,000 for the three months ended April 30, 2004. Interest expense increased 100.0% to $92,000 for the three months ended April 30, 2005, from $46,000 for the three months ended April 30, 2004. The increase is primarily due to increases in long-term debt balances primarily related to the new travel center as well as higher interest rates.

Index

BOWLIN TRAVEL CENTERS, INC.

Income before income taxes decreased 50.0% to $14,000 for the three months ended April 30, 2005, compared to income before income taxes of $28,000 for the three months ended April 30, 2004. As a percentage of gross revenues, income before income taxes was 0.2% for the three months ended April 30, 2005, compared to 0.5% for the three months ended April 30, 2004.

Income tax expense decreased 38.5% to $8,000 for the three months ended April 30, 2005, compared to an income tax expense of $13,000 for the three months ended April 30, 2004. The decrease is a result of lower income before income taxes partially offset by permanent tax deductions.

The foregoing factors contributed to net income for the three months ended April 30, 2005 of $6,000 compared to a net income of $15,000 for the three months ended April 30, 2004.

Liquidity and Capital Resources

At April 30, 2005, the Company had working capital of $3.411 million and a current ratio of 2.2:1, compared to working capital of $3.582 million and a current ratio of 2.5:1 as of January 31, 2005. Net cash provided by operating activities was $214,000 for the three months ended April 30, 2005, compared to $358,000 for the three months ended April 30, 2004. Net cash provided by operating activities for the three months ended April 30, 2005 is primarily attributable to net income adjusted for depreciation and amortization expense and amortization of loan fees offset by changes in operating assets and liabilities and deferred income taxes. Net cash provided by operating activities for the three months ended April 30, 2004 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 three months ended April 30, 2005 was $102,000 primarily consisting of $94,000, which was used for purchases of property and equipment plus accrued interest receivable of $8,000. Net cash used in investing activities for the three months ended April 30, 2004 was $435,000 primarily consisting of $454,000, which was used for purchases of property and equipment partially offset by notes receivable of $30,000.

Net cash used by financing activities for the three months ended April 30, 2005 was $137,000, which consisted of payments on long-term debt. For the three months ended April 30, 2004, net cash used in financing activities was $193,000, which were payments on long-term debt.

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.

Index

BOWLIN TRAVEL CENTERS, INC.

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~~ 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 except for weaknesses noted in the control environment that result from the lack of an electronic point of sale merchandise tracking system as the Company historically counts physical inventory at the end of each fiscal year, resulting in differences between estimates used throughout the year that are based on standard markups within defined categories to record cost of goods and the year-end physical count. The company has dedicated resources to correct these issues and has implemented a plan to use an electronic point of sale merchandise tracking system that will provide the Company with the ability to conduct more periodic physical inventories as well as more accurately monitor cost of goods sold.

~~There~~Other ~~has been~~ than the above issue, there were no ~~change~~changes 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.

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings. None.

Item 1A.

Risk Factors. There were no material changes from the Company’s risk factors disclosed in Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K for the year ended January 31, 2006.

Item 2.

Unregistered Sales of Equity 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~~10

Exhibit Number		Description
31.1		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Index

BOWLIN TRAVEL CENTERS, INC.

Item 6.

Exhibits

Exhibit Number		Description

31.1		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2		Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

Dated: June 912, ~~2005~~2006 /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

1411

Filing Compare · BOWLIN TRAVEL CENTERS INC