SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) October 30, 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
(Former name or former address, if changed since last report)
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Item 5. Other Events
On October 30, 1998, the registrant announced certain financial results for the
quarter ended September 30, 1998. A copy of the announcement is attached as
Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit Description
99.1 Announcement regarding financial results for the quarter
ended September 30, 1998.
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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: October 30, 1998 AMF BOWLING WORLDWIDE, INC.
By: /s/ Stephen E. Hare
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Stephen E. Hare
Executive Vice President and
Chief Financial Officer
EXHIBIT 99.1
On October 30, 1998 AMF Bowling Worldwide, Inc. (the "Company") announced
operating results for the nine months ended September 30, 1998. The Company
reported a 3.3% revenue increase from $505.6 million in 1997 to $522.3 million
for the same period in 1998. EBITDA for the nine months ended September 30, 1998
was $92.5 million, a decrease of 27.0% compared with $126.7 million for the same
prior year period. (EBITDA is a measure of operating cash flow which represents
operating income before interest, taxes, depreciation, amortization and
non-operating expenses.)
For the third quarter ended September 30, 1998, the Company reported revenue of
$172.5 million, an 8.0% decrease compared with $187.5 million for the same
quarter of 1997. EBITDA for the third quarter was $21.1 million, a 48.4%
decrease compared with $40.9 million for the same quarter of 1997.
Operating Results
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For the nine months ended September 30, 1998, Bowling Centers revenue increased
28.8%, from $297.9 million in 1997 to $383.8 million in 1998. EBITDA for the
nine months ended September 30, 1998 was $95.8 million, an increase of 14.0%
compared with $84.0 million for the nine months ended September 30, 1997. EBITDA
margin for the nine months was 25.0% compared with 28.2% for the same prior year
period.
For the third quarter of 1998, Bowling Centers reported revenue of $117.3
million, an increase of 21.2% compared with revenue of $96.8 million for the
same quarter of 1997. EBITDA was $18.9 million, a 10.0% decrease compared with
$21.0 million for the same quarter of 1997. EBITDA margins were 16.1% compared
to 21.7% for the same quarter of 1997.
During the nine months ended September 30, 1998, AMF acquired 77 bowling centers
including 55 in the U.S., 15 in the U.K., 6 in Australia and one in France. As
of September 30, 1998, AMF operated 539 bowling centers worldwide including 415
in the U.S. and 124 international centers (including 15 joint venture centers).
For the nine months ended September 30, 1998, Bowling Products reported revenue
of $152.7 million, a decrease of 30.2% compared with revenue of $218.9 million
for the same period of 1997. EBITDA for the nine months was $8.5 million, a
decrease of 84.6% compared with $55.1 million for the same prior year period.
For the third quarter of 1998, Bowling Products reported revenue of $60.0
million, a decrease of 36.3% compared with revenue of $94.2 million for the same
quarter of 1997. EBITDA was $4.6 million, a decrease of 80.7% compared with
$23.8 million for the same quarter of 1997. EBITDA margin of 7.7% compared to
25.3% for the same quarter of 1997.
NCP shipments for the quarter totaled 683 units compared with 1,255 units for
the comparable prior year quarter. For the nine months, NCP shipments totaled
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1,846 units compared with 3,324 units for the same 1997 period. As of September
30, 1998, the NCP backlog was 1,329 units, a 23.0% decrease compared with
December 31, 1997.
On October 21, 1998, the Company announced its intention to relocate its Century
bowling lane machine manufacturing and lane supplies business from Golden,
Colorado to its headquarters plant in Richmond, Virginia.
The Company expects the move to be completed by February 1, 1999.
Consolidated Operating Results
For the third quarter of 1998, net loss was $31.4 million compared with a net
loss of $10.3 million in the same quarter of 1997. For the nine months ended
September 30, 1998, net loss was $64.2 million compared with a net loss of $22.5
million.
Recent Financing Developments
On September 30, 1998, the Company amended the terms of its $810 million bank
credit facility. The amendment revised certain financial covenants for 1998 and
1999.
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Statements in this report about the Company's future plans are 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.
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<TABLE>
AMF GROUP HOLDINGS INC. AND SUBSIDIARIES (1)
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in millions, except share data)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenue $172.5 $187.5 $522.3 $505.6
Operating expenses (2) 151.4 146.6 429.8 378.9
Depreciation and amortization 30.8 23.4 87.6 66.8
------ ------ ------ ------
Operating income (loss) ( 9.7) 17.5 4.9 59.9
Interest expense 25.8 31.7 76.8 89.2
Other non-operating expenses 4.8 0.8 6.3 2.1
------ ------ ------ ------
Loss before income taxes (40.3) (15.0) (78.2) (31.4)
Benefit for income taxes (10.2) (4.7) (16.9) (8.9)
------ ------ ------ ------
Net loss before joint ventures (30.1) (10.3) (61.3) (22.5)
Equity in loss of joint ventures, net of tax (1.3) - (2.9) -
------ ------ ------ ------
Net loss $(31.4) $(10.3) $(64.2) $(22.5)
====== ====== ====== ======
Selected Data:
EBITDA (3) $21.1 $40.9 $92.5 $126.7
EBITDA margin 12.2% 21.8% 17.7% 25.1%
(1) AMF Group Holdings Inc. is a holding company, and its primary assets are
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.
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AMF GROUP HOLDINGS INC. AND SUBSIDIARIES (1)
SEGMENT INFORMATION (unaudited)
(in millions)
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter Period
------- ------- ------- ------- ------
1998 Revenue
Bowling Centers $150.5 $116.0 $117.3 $383.8
Bowling Products 41.1 51.6 60.0 152.7
Intersegment Elimination (4.0) (5.4) (4.8) (14.2)
------- ------- ------- ------- ------
TOTAL $187.6 $162.2 $172.5 $522.3
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 $20.1 $18.9 $95.8
Bowling Products 0.1 3.8 4.6 8.5
Corporate (3.8) (5.4) (2.3) (11.5)
Intersegment Elimination (0.0) (0.2) (0.1) (0.3)
------- ------- ------- ------- ------
TOTAL $53.1 $18.3 $21.1 $92.5
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 and 3 to Consolidated Statements of Income.
