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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 27, 1998
AMF BOWLING WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-12131 13-3873272
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8100 AMF Drive, Richmond, Virginia 23111
(Address of principal executive offices) (Zip Code)
N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On April 27, 1998, the registrant announced certain financial results
for the quarter ended March 31, 1998. A copy of the announcement is attached as
Exhibit 99.1.
On April 27, 1998, AMF Bowling, Inc., the parent of the registrant,
announced a private offering of zero coupon convertible debentures. A copy of
the news release is attached as Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit Description
- ------- -----------
99.1 Announcement regarding financial results for the quarter ended
March 31, 1998.
99.2 News release of AMF Bowling, Inc. dated April 27, 1998.
2
<PAGE>
SIGNATURE
Pursuant to 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 hereunto duly authorized.
Date: April 27, 1998 AMF BOWLING WORLDWIDE, INC.
By: /s/ Stephen E. Hare
-------------------------------
Stephen E. Hare
Executive Vice President and
Chief Financial Officer
3
EXHIBIT 99.1
On April 27, 1998, AMF Bowling Worldwide, Inc. (the "Company") reported first
quarter revenue and EBITDA (as defined below). Revenue for the first quarter of
1998 increased 19.0% over the same prior year period, from $157.6 million to
$187.6 million. For the quarter ended March 31, 1998 the Company recorded EBITDA
of $53.1 million, a 5.8% increase compared with $50.2 million for the first
quarter of 1997. EBITDA is defined as a measure of operating cash flow which
represents operating income before interest, taxes, depreciation, amortization
and non-operating expenses.
Operating Results
For the first quarter of 1998, Bowling Centers revenue was $150.5 million, an
increase of 38.7% compared to revenue of $108.5 million in 1997. EBITDA was
$56.8 million, up 35.6% from $41.9 million in the first quarter of 1997.
Operating results were favorably impacted by the inclusion of 140 bowling
centers acquired and one new center constructed since April 1, 1997. EBITDA
margins were 37.7% compared to 38.6% last year.
Bowling Products first quarter revenue was $41.1 million, a decline of 21.0%
from revenue of $52.0 million in the same quarter of 1997. EBITDA decreased to
$0.1 million in this year's first quarter compared to $12.0 million in last
year's first quarter. EBITDA margins were 0.2% compared to 23.1% in 1997.
Operating results for Bowling Products have been adversely impacted by current
economic difficulties in certain markets of the Asia Pacific region which have
reduced the order rate, level of shipments and backlog for New Center Packages
("NCP"s). During the first quarter of 1998, the Company recorded NCP shipments
of 504 units compared to shipments of 897 units and 1,013 units for the first
and fourth quarters of 1997, respectively. As of March 31, 1998, the NCP backlog
was 1,612 units which was 6.6% lower than the NCP backlog at December 31, 1997.
Consolidated net loss was $0.6 million for the first quarter of 1998 compared to
a consolidated net income of $0.1 million in 1997. During the first quarter of
1998 the Company recorded a non-cash $0.3 million equity in loss of joint
ventures, formed during 1997, primarily as a result of start-up expenses.
Acquisition Program
The Company acquired 29 centers in the United States, two centers in the United
Kingdom and two centers in Australia in the first quarter of 1998 for an
aggregate purchase price of $48.5 million. At March 31, 1998, the Company
operated 503 bowling centers worldwide - 399 in the U.S. and 104 international
centers, including 14 centers in international joint ventures.
At March 31, 1998 the Company had total debt of $1,129.2 million and
stockholders equity of $656.2 million. As of March 31, 1998, under its bank
facility, the Company was able to borrow up to an additional $109.9 million to
finance acquisitions or new center construction, subject to certain conditions.
Certain statements in this report about the Company's future plans may be
forward- looking statements. A number of important factors could cause actual
results to differ materially from those anticipated and projected by
forward-looking information. The factors include, but are not limited to,
changes in acquisition opportunities, the development and growth of new bowling
markets, the sales of products in those markets, the generation of timely and
sufficient cash flow to pay principal and interest on indebtedness, an adverse
legal judgment, an increase in competition, a change in economic conditions
including recent adverse developments in Asia Pacific markets, foreign currency
volatility, and political acts or regulatory changes. Additional information on
factors that could affect the Company's financial results are contained in the
Company's SEC filings, including its Annual Report on Form 10-K for the year
ended December 31, 1997 filed with the U.S. Securities and Exchange Commission.
<PAGE>
AMF GROUP HOLDINGS INC. AND SUBSIDIARIES (1)
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in millions)
Three Months Ended
March 31,
---------------------------
1998 1997
---- ----
Operating revenue $187.6 $157.6
Operating expenses (2) 134.5 107.4
Depreciation and amortization 26.8 20.5
------ ------
Operating income 26.3 29.7
Interest expense 26.0 27.7
Other non-operating expenses 0.2 0.8
------ ------
Income before income taxes 0.1 1.2
Provision for income taxes 0.4 1.1
------ ------
Net income(loss) before joint ventures (0.3) 0.1
Equity in loss of joint ventures, net of tax (0.3) -
------ ------
Net income(loss) $ (0.6) $0.1
====== ======
Selected Data:
EBITDA (3) $53.1 $50.2
EBITDA margin 28.3% 31.9%
(1) AMF Group Holdings, Inc. ("Group Holdings") is the parent company of AMF
Bowling Worldwide, Inc. The primary assets of Group Holdings are comprised
of investments in subsidiaries including AMF Bowling Worldwide, Inc. which
is principally engaged in two business segments (i) operation of bowling
centers and (ii) manufacturing and marketing of bowling products.
(2) Operating expenses represent costs of goods sold, bowling center operating
expenses and selling, general, and administrative expenses.
(3) Represents a measure of operating cash flow defined as operating income
before interest, taxes, depreciation, amortization, and non-operating
expenses.
<PAGE>
<TABLE>
AMF GROUP HOLDINGS INC. AND SUBSIDIARIES (1)
SEGMENT INFORMATION (unaudited)
(in millions)
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter Period
------- ------- ------- ------- ------
<S> <C>
1998 Revenue
Bowling Centers $150.5 $150.5
Bowling Products 41.1 41.1
Intersegment Elimination (4.0) (4.0)
------- ------- ------- ------- -------
TOTAL $187.6 $187.6
1997 Revenue
Bowling Centers $108.5 $92.6 $96.8 $131.2 $429.1
Bowling Products 52.0 72.7 94.2 80.4 299.3
Intersegment Elimination (2.9) (4.8) (3.5) (3.5) (14.7)
------- ------- ------- ------- -------
TOTAL $157.6 $160.5 $187.5 $208.1 $713.7
1998 EBITDA (3)
Bowling Centers $56.8 $56.8
Bowling Products 0.1 0.1
Corporate (3.8) (3.8)
Intersegment Elimination (0.0) (0.0)
------- ------- ------- ------- -------
TOTAL $53.1 $53.1
1997 EBITDA (3)
Bowling Centers $41.9 $21.1 $21.0 $46.4 $130.4
Bowling Products 12.0 19.3 23.8 15.7 70.8
Corporate (3.6) (4.7) (3.7) (3.4) (15.4)
Intersegment Elimination (0.1) (0.1) (0.2) (0.0) (0.4)
------- ------- ------- ------- -------
TOTAL $50.2 $35.6 $40.9 $58.7 $185.4
</TABLE>
See notes (1-3) to Consolidated Statements of Income.
Exhibit 99.2
Contact: Stephen E. Hare
Chief Financial Officer
(804) 730-4401
FOR IMMEDIATE RELEASE News Release
April 27, 1998
AMF BOWLING, INC. ANNOUNCES OFFERING OF
ZERO COUPON CONVERTIBLE DEBENTURES
Richmond, Virginia -- April 27, 1998 -- AMF Bowling, Inc. (NYSE:PIN) announced
today that it intends to offer for sale its zero coupon convertible debentures
in a private placement to certain qualified institutional investors. The company
stated that it plans to contribute the net proceeds of the offering, estimated
to be $191 million (excluding any over-allotment option), as equity to its
subsidiary, AMF Bowling Worldwide, Inc., to repay a portion of its senior bank
debt, thereby enabling AMF Bowling Worldwide to incur additional indebtedness to
fund its ongoing bowling center acquisition program. However, the company may
seek to apply a portion of the net proceeds to redemption of AMF Bowling
Worldwide's 10 7/8% Senior Subordinated Notes due 2006 and/or 12 1/4% Senior
Subordinated Discount Notes due 2006. No other terms were disclosed.
The offered securities will not be registered under the Securities Act
of 1933 or applicable state securities laws and may not be offered or sold in
the United States absent registration under the Securities Act and applicable
state securities laws or applicable exemptions from such registration
requirements. Sale of the debentures is subject to market and other conditions,
and there can be no assurance that any debentures will be sold or that the net
proceeds of any sale will not be lower or higher than expected.
