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

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 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 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.