United States 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 July 31, 1998

[ ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE EXHANGE ACT 
     For the transition period from [       ] to [       ]

                         Commission File Number 0-21451

            BOWLIN Outdoor Advertising & Travel Centers Incorporated
             (Exact name of registrant as specified in its charter)


                NEVADA                                   85-0113644            
    (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)


                     Issuer's telephone number: 505-266-5985


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [ ]

As of September  11, 1998,  4,384,848  shares of the issuer's  common stock were
outstanding.


<PAGE>

                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES


                                      INDEX


                          PART I. FINANCIAL INFORMATION

                                                                        Page No.
         
Item 1.     Consolidated Financial Statements

            Consolidated Balance Sheets as of
            July 31, 1998 and January 31, 1998..............................2

            Consolidated Statements of Income for the
            Three Months Ended and Six Months Ended
            July 31, 1998 and 1997..........................................4

            Consolidated Statements of Stockholders'
            Equity for the Six months ended July 31, 1998...................5

            Consolidated Statements of Cash Flows for the
            Six Months Ended July 31, 1998 and 1997.........................6

            Notes to the Consolidated Financial Statements .................8

Item 2.     Management's Discussion and Analysis or
            Plan of Operation .............................................10

Item 3.     Quantitative and Qualitative Disclosures About
            Market Risk....................................................14

                     PART II. OTHER INFORMATION

Item 1.     Legal Proceedings..............................................14

Item 2.     Changes in Securities and Use of Proceeds  ....................14

Item 3.     Defaults Upon Senior Securities................................14

Item 4.     Submission of Matters to a Vote of Security Holders............14

Item 5.     Other Information..............................................15

Item 6.     Exhibits and Reports on Form 8-K ..............................15

            Signatures ....................................................15

                                       1
<PAGE>

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

                           Consolidated Balance Sheets
                                     Assets
                        (In thousands, except share data)

<TABLE>
<S>                                                               <C>                        <C>
                                                                       July 31,                  January 31,
                                                                         1998                       1998
                                                                      (Unaudited)                (Unaudited)
                                                                  --------------------       --------------------
Current assets:
      Cash and cash equivalents                                    $            1,524         $            4,054
      Accounts receivable, net                                                    811                        579
      Notes receivable, related parties - current maturities                       11                         30
      Inventories                                                               3,871                      3,623
      Prepaid expenses                                                            576                        448
      Income taxes                                                                125                         90
      Other current assets                                                          8                         11
                                                                  --------------------       --------------------
      Total current assets                                                      6,926                      8,835


Notes receivable, related parties, less current
      maturities                                                                    3                         20

Property & equipment, net                                                      20,368                     15,728

Intangible assets, net                                                          1,246                      1,200

Other assets                                                                       73                         76
                                                                  --------------------       --------------------
      Total assets                                                             28,616                     25,859
                                                                  ====================       ====================


</TABLE>









                                                                     (Continued)

                                       2
<PAGE>

                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

                           Consolidated Balance Sheets
                      Liabilities and Stockholders' Equity
                        (In thousands, except share data)


<TABLE>
<S>                                                                   <C>                         <C>
                                                                           July 31,                   January 31,
                                                                             1998                         1998
                                                                          (Unaudited)                 (Unaudited)
                                                                      --------------------        ---------------------

Current liabilities:
      Short-term borrowing, bank                                       $              359          $               745
      Accounts payable                                                              1,208                        1,351
      Long-term debt, current maturities                                            1,095                          779
      Accrued liabilities                                                             575                          456
                                                                      --------------------        ---------------------
      Total current liabilities                                                     3,237                        3,331

Deferred income taxes                                                                 256                          177
Long-term debt, less current maturities                                            10,312                        8,124
                                                                      --------------------        ---------------------
      Total liabilities                                                            13,805                       11,632

Stockholders' equity
      Common stock, $.001 par value; authorized 100,000,000
        shares; issued and outstanding 4,384,848 shares                                 4                            4
      Additional paid-in capital                                                   11,604                       11,604
      Retained earnings                                                             3,203                        2,619
                                                                      --------------------        ---------------------
      Total stockholders' equity                                                   14,811                       14,227

                                                                      --------------------        ---------------------
      Total liabilities and stockholders' equity                       $           28,616          $            25,859
                                                                      ====================        =====================


</TABLE>

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>


                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

                        Consolidated Statements of Income
                 (In thousands, except share and per share data)

<TABLE>
<S>                                     <C>              <C>                 <C>              <C>   

                                               Three Months Ended                   Six Months Ended
                                        --------------------------------     ------------------------------

                                           July 31,         July 31,            July 31,        July 31,   
                                             1998             1997                1998            1997
                                         (Unaudited)      (Unaudited)         (Unaudited)      (Unaudited)
                                        -------------    -------------       -------------    -------------
                                                                                            
Gross sales                                    8,628            7,923              15,752           14,575
Less discounts on sales                           73               78                 135              155
                                        -------------    -------------       -------------    -------------
       Net sales                               8,555            7,845              15,617           14,420
                                                                                            
Cost of goods sold                             5,270            5,032               9,817            9,491
                                        -------------    -------------       -------------    -------------
       Gross profit                            3,285            2,813               5,800            4,929
                                                                                            
General and administrative expenses           (1,890)          (1,773)             (3,577)          (3,312)
                                                                                            
Other income                                       2               38                   3               70 
                                                                                            
 Depreciation and amortization                  (453)            (310)               (862)            (528)
                                        -------------    -------------       -------------    -------------
       Operating income                          944              768               1,364            1,159
                                                                                                   
Other non-operating income (expense):                                                       
       Interest income                            33               63                  61              145
                                                                                                     
       Gain on sale of property and                -               84                   4              189
       equipment                                                                                   
       Interest expense                         (260)            (194)               (474)            (348)
                                        -------------    -------------       -------------    -------------
       Total other non-operating                (227)             (47)               (409)             (14)
       income (expense), net                                                                     
                                                                                            
                                        -------------    -------------       -------------    -------------
Income before taxes                              717              721                 955            1,145
                                                                                                    
Income taxes                                     278              288                 371              458
                                        -------------    -------------       -------------    -------------
                                                                                            
Net income                                       439              433                 584              687
                                        =============    =============       =============    =============
                                                                                            
Weighted average common shares             4,384,848        4,384,848           4,384,848        4,384,848
                                                                                            
Weighted average common and potential                                                       
       dilutive common shares              4,394,801        4,384,848           4,389,824        4,384,848
                                                                                            
Earnings per share                                                                          
       Basic                             $      0.10      $      0.10         $      0.13      $      0.16
                                        =============    =============       =============    =============                         
       Diluted                           $      0.10      $      0.10         $      0.13      $      0.16
                                        =============    =============       =============    =============
                                                                                          

</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

                 Consolidated Statement of Stockholders' Equity
                                 (In thousands)



<TABLE>
<S>                                <C>               <C>          <C>               <C>              <C>

                                                          For the Six Months Ended
                                                                Unaudited

                                                     Common       Additional
                                     Number          stock,         paid-in         Retained
                                   of shares         at par         capital         earnings           Total
                                   ---------------------------------------------------------------------------
Balance at January 31, 1998        4,384,848         $    4       $   11,604        $  2,619         $  14,227

Net income                                                                               584               584
                                   ---------------------------------------------------------------------------
Balance at July 31, 1998           4,384,848         $    4       $   11,604        $  3,203         $  14,811
                                   ===========================================================================






















          See accompanying notes to consolidated financial statements.

                                       5
<PAGE>


                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                 (In thousands)

                                                                                    For the Six Months Ended
                                                                            ------------------------------------------

                                                                                July 31,                  July 31,
                                                                                  1998                      1997
                                                                              (Unaudited)               (Unaudited)
                                                                            -----------------          ---------------
Cash flows from operating activities:
      Net income                                                              $          584            $         687
      Adjustments to reconcile net income to net cash  
        provided by operating activities:
             Depreciation and amortization                                               862                      528
             Gain on sales of property and equipment                                      (4)                    (189)
             Deferred income taxes                                                        79                       31
             Imputed interest                                                             16                        -
             Changes in operating assets and                                            (602)                    (258)
             liabilities
                                                                            -----------------          ---------------
                       Net cash provided by operating activities                         935                      799

Cash flows from investing activities:
      Proceeds from sale of assets                                                         8                      423
      Business acquisitions (note 2)                                                  (2,090)                  (4,865)
      Purchases of property and equipment, net                                        (1,741)                  (1,371)
      Proceeds (disbursements) on notes receivable, net                                   36                       (3)
                                                                            -----------------          ---------------
                   Net cash used in investing activities                              (3,787)                  (5,816)

Cash flows from financing activities:
      Borrowings on short-term debt                                                      359                    3,457
      Borrowings on long-term debt                                                     1,128                        -
      Payments on short-term debt                                                       (745)                    (404)
      Payments on long-term debt                                                        (420)                       -
                                                                            -----------------          ---------------
                   Net cash provided by financing activities                             322                    3,053
                                                                                                                
Net decrease in cash and cash equivalents                                             (2,530)                  (1,964) 
                                                                                                              
Cash and cash equivalents at beginning of period                                       4,054                    7,519
                                                                            -----------------          ---------------
Cash and cash equivalents at end of period                                             1,524                    5,555
                                                                            =================          ===============
</TABLE>

                                                                     (Continued)
                                       6
<PAGE>


                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

                Consolidated Statements of Cash Flows, Continued
                                 (In thousands)

<TABLE>
<S>                                                                     <C>                       <C>   
                                                                            July 31,                  July 31,
                                                                              1998                      1997
                                                                          (Unaudited)               (Unaudited)
                                                                        -----------------         -----------------

Supplemental disclosure of cash flow information:

     Noncash investing and financing activities:
         Acquisition of outdoor advertising assets in
            exchange for long-term debt                                   $        1,650            $        2,775
                                                                        =================         =================

         Acquisition of covenants not-to-compete
            in exchange for long-term debt                                $          130            $            -
                                                                        =================         =================

         Exchange of property and equipment and note
            payable on sale of partnership investment                     $            -            $        1,284                  
                                                                        =================         =================

     Acquisitions:
         Fair value of assets  acquired and  liabilities  
            assumed at the date of the acquisitions were 
            as follows:

            Accounts receivable                                           $           34            $           74                  
            Prepaid expenses                                                          31                        15                  
            Billboards                                                             1,970                     3,200 
            Vehicles and equipment                                                    55                        63 
            Goodwill                                                                   -                       863 
            Accounts payable                                                           -                       (15)
                                                                        =================         =================
                                                  
                                                                        
</TABLE>















          See accompanying notes to consolidated financial statements.

                                       7
<PAGE>


                                     BOWLIN
                      OUTDOOR ADVERTISING & TRAVEL CENTERS
                          INCORPORATED AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (Unaudited)


1.   The  consolidated  financial  statements  for the six months ended July 31,
     1998  and  July  31,  1997  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 condensed  consolidated
     financial  statements  should be read in conjunction  with the consolidated
     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,
     1998.  Results  of  operations  for  interim  periods  are not  necessarily
     indicative of results that may be expected for the year as a whole. Certain
     amounts in the January 31, 1998 financial statements have been reclassified
     to conform with the July 31, 1998 presentation.

2.   Earnings  per  Share.  The  following  table  is a  reconciliation  of  the
     numerators and denominators of the basic and diluted per share computations
     for income from continuing operations.


<TABLE>
<S>                            <C>          <C>            <C>          <C>            <C>           <C>  

                                                         Three months ended July 31
                               --------------------------------------------------------------------------------
                                               1998                                      1997
                               --------------------------------------  -----------------------------------------
                                 Income        Shares      Per Share       Income         Shares     Per Share
                               (Numerator)  (Denominator)   Amount      (Numerator)    (Denominator)   Amount

Basic EPS                       $  439,000     4,384,848   $    0.10     $ 433,000        4,384,848   $   0.10
                                                           ---------                                  --------
Income available to
     common stockholders
Effect if Dilutive Securities:
Stock options                                      9,953
                                ----------     ---------                 ---------        ---------
Diluted EPS
Income available to common
     stockholders plus assumed
     conversions                $  439,000     4,394,801   $    0.10     $ 433,000        4,384,848   $   0.10
                                ----------     ---------   ---------     ---------        ---------   --------


                                                          Six months ended July 31,
                               ---------------------------------------------------------------------------------
                                               1998                                      1997
                               --------------------------------------  -----------------------------------------
                                 Income        Shares      Per Share       Income         Shares     Per Share
                               (Numerator)  (Denominator)    Amount     (Numerator)    (Denominator)   Amount

Basic EPS                       $  584,000     4,384,848   $    0.13     $ 687,000        4,384,848   $   0.16
                                                           ---------                                  --------
Income available to
     common stockholders
Effect if Dilutive Securities:
Stock options                                      4,976
                                ----------     ---------                 ---------        ---------
Diluted EPS
Income available to common
     stockholders plus assumed
     conversions                $  584,000     4,389,824   $    0.13     $ 687,000        4,384,848   $   0.16
                                ----------     ---------   ---------     ---------        ---------   --------

</TABLE>

                                       8
<PAGE>


3.   Acquisitions.  On  February  1, 1998,  the  Company  acquired  the  outdoor
     advertising assets of Big-Tex Outdoor Advertising (Big-Tex) for $1,559,000.
     The Company paid $559,000 from the proceeds of the initial public  offering
     and  financed  $1,000,000  with  bank  debt.  Big-Tex  owned  and  operated
     approximately  285 poster and painted faces in the  Brownwood,  Texas metro
     area. The Company also entered into a non-compete agreement with the former
     principals  of  Big-Tex  for a  period  of ten  years  from the date of the
     acquisition,  payable in ten annual  installments  of $10,000  beginning in
     February 1999. The acquisition was accounted for as a purchase. The results
     of Big-Tex's  operations  have been combined  with the Company's  since the
     date of  acquisition.  The  purchase  price  was  allocated  to the  assets
     acquired based on their  estimated fair values and no goodwill was recorded
     in connection with the purchase.

     On March 3, 1998, the Company  acquired the outdoor  advertising  assets of
     Norwood Outdoor,  Inc. (Norwood) for $1,006,000.  The Company paid $350,000
     from the proceeds of the initial public offering,  $6,000 cash and financed
     $650,000  with bank debt.  Norwood  owned and  operated  approximately  140
     poster and painted  bulletin  faces in the Brady,  Texas  metro  area.  The
     acquisition  was  accounted  for as a purchase.  The  results of  Norwood's
     operations  have  been  combined  with  the  Company's  since  the  date of
     acquisition.  The purchase price was allocated to the assets acquired based
     on their  estimated  fair values and no goodwill was recorded in connection
     with the purchase.

     On May 1, 1998 the  Company  purchased  the outdoor  advertising  assets of
     Edgar Outdoor  Advertising  Co. for $900,000.  The Company paid $900,000 at
     closing from the proceeds of the initial public  offering.  Edgar owned and
     operated  approximately  62 painted  bulletin faces in central  Texas.  The
     acquisition  was  accounted  for as a  purchase.  The  results  of  Edgar's
     operations  have  been  combined  with  the  Company's  since  the  date of
     acquisition.  The purchase price was allocated to the assets acquired based
     on their  estimated  fair values and no goodwill was recorded in connection
     with the purchase.

     On June 1, 1998 the Company purchased the outdoor advertising assets of J &
     J Sign  Company,  located in Silver  City,  New Mexico.  The  Company  paid
     $275,000  from the proceeds of the initial  public  offering and recorded a
     payable of $100,000 to the former  owner of J & J. J & J owned and operated
     approximately  40 painted  bulletin faces in Southwestern  New Mexico.  The
     acquisition  was  accounted  for as a  purchase.  The  purchase  price  was
     allocated to the assets  acquired based on their  estimated fair values and
     no goodwill was recorded in connection with the purchase.

     The following  unaudited proforma  consolidated  results of operations have
     been prepared as if the acquisitions of Big-Tex, Norwood and Edgar occurred
     on February 1, 1998 and 1997.  The effect of the Company's  acquisition  of
     the assets of J & J are not material to the combined  results of operations
     of the Company.

                     (in thousands except per share amounts)

                                                Six Months Ended
                                                     July 31
                                                   (unaudited)

                                           1998                 1997
                                           ----                 ----

           Gross sales                $   15,882           $   15,204

           Net income                        611                  745

           Earnings per basic and
                diluted share         $      .14           $      .17
                                      ==========           ==========


                                       9
<PAGE>

     The proforma  information is presented for informational  purposes only and
     is not  necessarily  indicative of the results of operations  that actually
     would have been achieved had the  acquisition  been  consummated as of that
     time, nor is it intended to be a projection of future results.

4.   Subsequent  Events:  On August 14, 1998 the Company  purchased  the outdoor
     advertising  assets of T & C Outdoor  for  $160,000  cash.  T & C owned and
     operated approximately 20 faces in central Texas.



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations.

Overview

The  following is a  discussion  of the  consolidated  financial  condition  and
results of operations of the Company as of and for the two fiscal  periods ended
July 31, 1998 and 1997. This discussion  should be read in conjunction  with the
Consolidated  Financial Statements of the Company and the related notes included
in the Company's Form 10-KSB for the fiscal year ended January 31, 1998.

The  Company  operates  in two  industry  segments,  travel  centers and outdoor
advertising.  In order to  perform  a  meaningful  evaluation  of the  Company's
performance  in  each of its  operating  segments,  the  Company  has  presented
selected  operating data which  separately sets forth the revenue,  expenses and
operating  income  attributable to each segment,  and also separately sets forth
the corporate expenses of the Company which are not properly allocable to either
of the Company's segments for purposes of determining their respective operating
income.  The  discussion  of results of operations  which follows  compares such
selected  operating  data and  corporate  expense  data for the interim  periods
presented.

The forward-looking  statements included in Management's Discussion and Analysis
of Financial  Condition and Results of  Operations,  which reflect  management's
best judgment based on factors currently known, involve risks and uncertainties.
Actual  results  could  differ   materially  from  those  anticipated  in  these
forward-looking statements as a result of a number of factors, including but not
limited to those discussed.








                                       10
<PAGE>

Results of Operations

The following  table presents  certain income and expense items derived from the
Consolidated  Statements  of Income for the six months ended July 31  (unaudited
and amounts in thousands):

<TABLE>
<S>                                             <C>                  <C>                    <C>

                                                                                            % Incr/
                                                     1998                 1997               (Decr)
                                                     ----                 ----               ------
Travel centers:
      Gross sales                                        12,452               12,315           1.1%
      Discounts on sales                                    135                  155         (12.9)%
                                                ----------------     ----------------
      Net sales                                          12,317               12,160           1.3%                                 
                                                                                                      
      Cost of sales                                       8,358                8,247           1.3%   
                                                ----------------     ----------------                 
                                                          3,959                3,913           1.2%   
                                                                                                      
      General and administrative expenses                 2,867                2,716           5.6%   
      Depreciation and amortization                         286                  207          38.2%   
                                                ----------------     ----------------                 
      Operating income                                      806                  990         (18.6)%  
                                                                                                      
Outdoor advertising:                                                                                  
      Gross sales                                         3,300                2,260          46.0%   
      Direct operating expenses                           1,459                1,244          17.3%
                                                ----------------     ----------------
                                                          1,841                1,016          81.2%
      General and administrative expenses                   482                  354          36.2%
      Depreciation and amortization                         522                  252         107.1%                                 
                                                ----------------     ----------------                  
      Operating income                                      837                  410         104.1%  
                                                                                                     
Corporate and other:                                                                                 
      General and administrative expenses                  (228)                (242)         (5.8)%  
      Depreciation and amortization                         (54)                 (69)        (21.7%)  
      Interest expense                                     (474)                (348)         36.2%  
      Other income, net                                      68                  404         (83.2%)  
                                                ----------------     ----------------                
Income before taxes                                         955                1,145         (16.6)%  
Income taxes                                                371                  458         (19.0)%  
                                                ----------------     ----------------                
Net income                                       $          584       $          687         (15.0)%  
                                                ================     ================
  
</TABLE>                                            

                                       11
<PAGE>


Comparison of the Six Months Ended July 31, 1998 and July 31, 1997

Travel Centers. Gross sales at the Company's Travel Centers increased by 1.1% to
$12.452  million for the six months ended July 31, 1998 from $12.315 million for
the six months ended July 31, 1997. This increase is primarily attributable to a
7.0% increase in merchandise  sales which were $4.122 million for the six months
ended July 31,1998  compared  with $3.851  million for the six months ended July
31,1997.  Gasoline  sales  decreased  1.6% to $6.206  million for the six months
ended July 31, 1998 from $6.306  million for the same period in 1997.  Wholesale
gasoline  sales  increased  48.7% to $614,000  for the six months ended July 31,
1998, as compared to $413,000 for the six months ended July 31, 1997. Restaurant
sales  decreased  by 13.4% to $1.510  million for the six months  ended July 31,
1998 compared with $1.744 for the six months ended July 31, 1997.  Cost of goods
sold for the travel centers  increased 1.3% to $8.358 million for the six months
ended July 31, 1998 from $8.247  million for the six months ended July 31, 1997,
primarily as a result of an increase in merchandise sales.

General and  administrative  expenses  for travel  centers  consist of salaries,
bonuses and commissions for travel center personnel,  property costs and repairs
and  maintenance.  General and  administrative  expenses for the travel  centers
increased  to $2.867  million for the six months  ended July 31 1998 from $2.716
million for the six months ended July 31, 1997.

Depreciation and amortization expense increased by 38.2% to $286,000 for the six
months ended July 31, 1998 as compared to $207,000 for the six months ended July
31, 1997. The increase is attributable to additions of depreciable assets during
the current period.

The above factors  contributed to an overall decrease in travel center operating
income of 18.6% to $806,000 for the six months ended July 31,1998 from  $990,000
for the six months ended July 31, 1997. This decrease is primarily  attributable
to increases in depreciation and general and administrative expenses.

Outdoor  Advertising.   Gross  sales  from  the  Company's  Outdoor  Advertising
increased  46.0% to $3.300  million for the six months  ended July 31, 1998 from
$2.260  million  for the six  months  ended  July 31,  1997.  The  increase  was
primarily   attributable   to  the  continual   assimilation  of  the  Company's
acquisitions,  increased  usage of available  sign  inventory,  and increases in
rates.

Direct  operating  expenses  related  to outdoor  advertising  consist of rental
payments to property  owners for the use of land on which  advertising  displays
are located,  production  expenses  and selling  expenses.  Production  expenses
include  salaries  for  operations  personnel  and real estate  representatives,
property taxes,  materials and repairs and maintenance of advertising  displays.
Selling expenses consist  primarily of salaries and commissions for salespersons
and travel and entertainment  related to sales. Direct operating costs increased
17.3% to $1.459  million  for the six  months  ended July 31,  1998 from  $1.244
million  for the six months  ended July 31,  1997,  principally  due  additional
direct operating costs associated with the acquisitions.

General and administrative  expenses for outdoor advertising consist of salaries
and wages for administrative personnel,  insurance, legal fees, association dues
and  subscriptions   and  other  indirect   operating   expenses.   General  and
administrative  expenses  increased  36.2% to $482,000  for the six months ended
July 31, 1998 from $354,000 for the six months ended July 31, 1997.

Depreciation and amortization  expense  increased 107.1% to $522,000 for the six
months ended July 31, 1998 from $252,000 for the six months ended July 31, 1997.
The increase is  attributable to scheduled  depreciation of advertising  display
structures and machinery and equipment primarily associated with acquisitions as
well as the amortization of goodwill and non-compete covenants.

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<PAGE>

The above factors contributed to the increase in outdoor  advertising  operating
income  of  104.1% to  $837,000  for the six  months  ended  July 31,  1998 from
$410,000 for the six months ended July 31, 1997.  In addition,  earnings  before
interest,  taxes, depreciation and amortization (EBITDA) for outdoor advertising
increased  105.3% to $1.359  million for the six months ended July 31, 1998 from
$662,000 for the six months ended July 31, 1997.  The EBITDA  margin for outdoor
advertising  increased  to 41.2%  for the six  months  ended  July  31,  1998 as
compared to 29.3% for the six months ended July 31, 1997.

Corporate and Other. General and administrative expenses for corporate and other
operations  of the Company  consist  primarily of executive  and  administrative
compensation  and  benefits,  accounting,  legal and  investor  relations  fees.
General and  administrative  expenses decreased slightly to $228,000 for the six
months ended July 31, 1998 as compared to $242,000 for the six months ended July
31, 1997.

Depreciation  and  amortization  expenses for the Company's  corporate and other
operations consist of depreciation  associated with the corporate  headquarters,
furniture  and fixtures and vehicles.  Depreciation  and  amortization  expenses
decreased  to $54,000  for the six months  ended July 31,  1998 as  compared  to
$69,000 for the six months ended July 31, 1997.

Interest  expense  increased  by 36.2% to $474,000 for the six months ended July
31, 1998 as compared to $348,000  for the six months  ended July 31,  1997.  The
increase is primarily  attributable  to the increase in debt associated with the
Company's acquisitions.

Other  income,  net,  primarily  includes  operating  rental  revenues  from the
Company's former  subsidiary,  gains and/or losses from the sales of assets, and
interest  income.  Other  income,  net,  decreased  83.2% to $68,000 for the six
months ended July 31, 1998 as compared to $404,000 for the six months ended July
31, 1997. The decrease is due to certain non-operating gains in 1997 not present
in 1998  and a  decrease  in  interest  income  due to use of IPO  proceeds  for
acquisitions.

Income  before taxes  decreased  16.6% to $955,000 for the six months ended July
31, 1998 as compared to $1.145  million for the six months  ended July 31, 1997.
As a percentage of gross  revenues,  income before taxes  decreased  slightly to
6.1% for the six months  ended  July 31,  1998 as  compared  to 7.9% for the six
months ended July 31, 1997.

Income taxes were $371,000 for the six months ended July 31, 1998 as compared to
$458,000 for the six months  ended July 31, 1997,  as the result of lower pretax
income.

The foregoing factors  contributed to a decrease in the Company's net income for
the six months  ended July 31, 1998 to $584,000 as compared to $687,000  for the
six months ended July 31, 1997.

Liquidity and Capital Resources

At July 31,1998, the Company had working capital of $3.689 million and a current
ratio of 2.1:1,  compared  to working  capital of $5.504  million  and a current
ratio of 2.7:1 at January  31,  1998.  Working  capital  and the  current  ratio
decreased  for the six months  ended July 31,  1998 as a result of IPO  proceeds
used in the current period but present at January 31, 1998.

Net cash provided by operating  activities was $935,000 for the six months ended
July 31, 1998 as  compared  to net cash  provided  by  operating  activities  of
$799,000  for the six  months  ended July 31,  1997.  Net cash  provided  in the
current  period  is  primarily   attributable  to  increased   depreciation  and
amortization  from  acquisitions and decreases in gains on sales of property and
equipment  as well as an  increase  in cash used to fund  operating  assets  and
liabilities.

                                       13
<PAGE>

Net cash used for  investing  activities  for the six months ended July 31, 1998
was $3.787  million,  of which  $2.090  million was used in the  purchase of the
outdoor  advertising  assets of  Big-Tex,  Norwood,  Edgar and J & J, and $1.741
million was used for  purchases  of property and  equipment.  For the six months
ended July 31, 1997, net cash used for investing  activities was $5.816 million,
of which $4.865  million was used for  acquisitions.  In addition,  $300,000 was
used  for the  purchase  of land for the  construction  of a new  travel  center
complex.

Net cash provided by financing activities for the six months ended July 31, 1998
was  $322,000 as compared  to $3.053  million for the six months  ended July 31,
1997. At July 31, 1998 and 1997 financing activities were a result of borrowings
and payments on debt.

On May 1, 1998 the Company  purchased  the outdoor  advertising  assets of Edgar
Outdoor  Advertising  Co. for $900,000  with the proceeds of the initial  public
offering.  Edgar owned and operated  approximately  62 painted bulletin faces in
central Texas.

On June 1, 1998 the Company  purchased the outdoor  advertising  assets of J & J
Sign Company, located in Silver City, New Mexico. The Company paid $275,000 from
the proceeds of the initial  public  offering and recorded a payable of $100,000
to the former owner of J & J. J & J owned and operated  approximately 40 painted
bulletin faces in Southwestern New Mexico.

On August 14, 1998 the Company purchased the outdoor advertising assets of T & C
Outdoor for $160,000  cash. T & C owned and operated  approximately  20 faces in
central Texas.

The  construction of a new travel center located  approximately 20 miles west of
Albuquerque, New Mexico, on Interstate 40 is proceeding and is scheduled to open
in the third fiscal quarter of this year. In addition, the Company completed the
upgrade of one travel center.

Although the Company does not have any  agreements  in place,  it will  continue
discussions  with  acquisition  candidates  throughout the  Southwestern  United
States.  The  Company  has not  executed a letter of intent or other  agreement,
binding or non-binding, to make such acquisitions. Any such acquisition would be
subject to the negotiation and execution of definitive  agreements,  appropriate
financing arrangements,  performance of due diligence, approval of the Company's
Board of Directors,  and the satisfaction of other customary closing conditions.
The Company would likely  finance any such  acquisitions  with cash,  additional
indebtedness or a combination of the two. Any commercial  financing obtained for
purposes of acquiring  additional  assets is likely to impose certain  financial
and other  restrictive  covenants  upon the Company and increase  the  Company's
interest expense.

Item 3.  Quantitative  and  Qualitative   Disclosures  About  Market  Risk.  Not
     required.


PART II - OTHER INFORMATION

Item 1.           Legal Proceedings.  None.

Item 2.           Changes in Securities and Use of Proceeds.

The use of IPO  proceeds  for the  quarter  ended July 31, 1998  totaled  $1.279
million.  Of the total used,  $1.175  million was used for the  acquisitions  of
Edgar Outdoor  Advertising  and J & J Sign Company.  The remaining  $104,000 was
used  for  the  purchase  of  real  estate  for  the  expansion  of the  outdoor
advertising division.

Item 3.           Defaults Upon Senior Securities.  None.

Item 4.           Submissions of Matters to a Vote of Security Holders.  None.


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<PAGE>

Item 5.           Other Information.  None.

Item 6.           Exhibits and Reports on Form 8-K.

         (a).     Exhibit No.                         Exhibit Name
                  -----------                         ------------
                     2.6               Purchase  Agreement  dated  June 1,  1998
                                       between  the  Registrant and J & J Signs.

                      27               Financial Data Schedule

         (b).     No reports were filed on Form 8-K during the  six months ended
                  July 31, 1998.


Signatures

In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

Date:    September 11, 1998
    
                               BOWLIN
                               Outdoor Advertising & Travel Centers Incorporated

                               /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
                               (Principal Financial and Accounting Officer)



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