<PAGE>
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) May 5, 1999
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)
<PAGE>
Item 5. Other Events
On May 5, 1999, the registrant announced certain financial results for the three
months ended March 31, 1999. A copy of this commencement is attached as Exhibit
99.1. Also, AMF Bowling, Inc., the parent of the registrant, announced a
recapitalization plan. A copy of this announcement 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 three months ended
March 31, 1999.
99.2 Announcement regarding Recapitalization Plan.
<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: May 5, 1999 AMF BOWLING WORLDWIDE, INC.
By: /s/ Stephen E. Hare
-------------------
Stephen E. Hare
Executive Vice President and
Chief Financial Officer
<PAGE>
Exhibit 99.1
AMF Bowling Worldwide, Inc (the Company") today announced operating results for
the three months ended March 31, 1999. AMF reported an 8.2% revenue increase
from $187.3 million in 1998 to $202.6 million for the first quarter of 1999. The
increase in revenue for the period reflects inclusion of new centers which were
acquired since the first quarter of 1998. EBITDA for the three months ended
March 31, 1999 was $56.4 million, an increase of 6.2% compared with $53.1
million for the prior year. (EBITDA is a measure of operating cash flow which
represents operating income before interest, taxes, depreciation, amortization
and non-operating expenses.)
New Chief Executive Officer Named
- ---------------------------------
On April 29, 1999, AMF Bowling, Inc. ("AMF Bowling"), the parent of the
registrant, announced the appointment of Roland Smith as president and chief
executive officer of AMF Bowling. Smith, 44, succeeds Stephen Hare, AMF
Bowling's chief financial officer, who was acting chief executive officer for
the past six months. Hare will continue his role as chief financial officer.
Smith has been appointed to AMF Bowling's board of directors.
A former marketing executive who has worked with some of the most well-known and
respected global brands including Procter & Gamble, Pepsi, Schering-Plough and
KFC International, Smith most recently was the president and chief executive
officer of the Triarc Restaurant Group. At Triarc, he is credited with leading a
successful restructuring and rejuvenating of the Arby's brand, which is one of
the top 10 in its industry. Smith has also proved his ability to manage growth
and successfully opened 130 new stores in 1998. Under Smith's leadership, the
restaurant group nearly tripled its operating profit from 1996 to year-end 1998.
Smith drove Arby's comparable store sales growth to be among the leaders in the
industry.
Operating Results
- -----------------
For the quarter ended March 31, 1999, Bowling Centers revenue increased 14.9%,
from $150.2 million in 1998 to $172.6 million in 1999. Revenue was favorably
impacted by the inclusion of 51 centers acquired and one new center constructed
since April 1, 1998. In the U.S., constant center revenue in the first quarter
of 1999 declined 1.1% compared with the first quarter of 1998. On a worldwide
basis, constant center revenue was down 0.8% for the quarter on a constant
currency basis.
EBITDA for the first quarter of 1999 was $60.5 million, an increase of 6.5%
compared with $56.8 million for the first quarter of 1998. EBITDA margin was
35.1% compared with 37.8% for 1998. The lower EBITDA margin in 1999 was caused
primarily by an increase in expenses related to maintenance and supplies, food,
advertising and payroll.
For the quarter ended March 31, 1999, Bowling Products reported revenue of $32.0
million, a decrease of 22.1% compared with revenue of $41.1 million for 1998.
EBITDA for the first quarter of 1999 was $(0.6) million compared with $0.1
million for 1998.
NCP shipments for the first quarter of 1999 totaled 269 units compared with 504
units for the comparable quarter in the prior year. As of March 31, 1999, the
NCP backlog was 755 units, a 30.0% decrease compared with December 31, 1998 and
a 53.2% decrease compared with March 31, 1998.
Operating results for Bowling Products continue to be adversely impacted by
economic difficulties and increased competition in certain Asia Pacific markets.
The Bowling Products cost reduction program, which began in 1998 and continues
into 1999, resulted in a decrease of $3.5 million in selling, general and
administrative expenses in the first quarter versus last year's first quarter.
However, this improvement was offset by a decline in gross profit resulting from
lower sales volumes and pricing.
<PAGE>
Consolidated Operating Results
- -------------------------------
For the first quarter of 1999, net loss was $12.1 million compared with a net
loss of $0.6 million in the first quarter of 1998. Equity in loss of joint
ventures totaled $5.5 million in the first quarter of 1999 compared to $0.3
million in the first quarter of 1998. The increased loss in equity of joint
ventures was attributable to the Company's Brazilian joint venture results which
were adversely impacted by a currency devaluation.
Financing Update
- ----------------
At March 31, 1999, AMF had total debt of $1,062.4 million compared to $1,047.1
million at December 31, 1998. Of the $355 million revolver facility, $183.0
million was outstanding at March 31, 1999.
Investor "800" Number
- ---------------------
Investors can now call the Company's Investor Relations Department toll-free at
800-832-0151 to make inquiries or request company information.
# # # # #
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, 1998, filed with the U.S. Securities and Exchange Commission.
<PAGE>
AMF GROUP HOLDINGS INC. AND SUBSIDIARIES /(1)/
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in millions, except share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1999 1998
------------- ---------------
<S> <C> <C>
Operating revenue /(2)/ $202.6 $187.3
Operating expenses /(2)/, /(3)/ 146.2 134.2
Depreciation and amortization 33.1 26.8
------ ------
Operating income 23.3 26.3
Interest expense 25.9 26.0
Other non-operating expenses 2.5 0.2
------ ------
Income (loss) before income taxes (5.1) 0.1
Provision for income taxes 1.5 0.4
------ ------
Net loss before equity in loss of joint (6.6) (0.3)
ventures
Equity in loss of joint ventures (5.5) (0.3)
------ ------
Net loss $(12.1) $ (0.6)
====== ======
Selected Data:
EBITDA /(4)/ $ 56.4 $ 53.1
EBITDA margin 27.8% 28.4%
</TABLE>
- ----------------
(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) Certain 1998 balances have been reclassified to conform to 1999
presentation.
(3) Operating expenses represent costs of goods sold, bowling center operating
expenses and selling, general, and administrative expenses.
(4) Represents a measure of operating cash flow defined as operating income
before interest, taxes, depreciation, amortization, and non-operating
expenses.
<PAGE>
AMF GROUP HOLDINGS INC. AND SUBSIDIARIES (1)
SEGMENT INFORMATION (unaudited)
(in millions)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter Period
----------- ------------- -------------- -------------- -------------
1999 Revenue
- ---------------------
<S> <C> <C> <C> <C> <C>
Bowling Centers $172.6 $172.6
Bowling Products 32.0 32.0
Intersegment Elimination (2.0) (2.0)
------ ------ ------ ------ ------
TOTAL $202.6 $202.6
1998 Revenue
- ---------------------
Bowling Centers /(2)/ $150.2 $115.6 $116.9 $156.5 $539.2
Bowling Products 41.1 51.6 60.0 59.8 212.5
Intersegment Elimination (4.0) (5.4) (4.8) (1.1) (15.3)
------ ------ ------ ------ ------
TOTAL $187.3 $161.8 $172.1 $215.2 $736.4
1999 EBITDA /(4)/
- ---------------------
Bowling Centers $ 60.5 $ 60.5
Bowling Products (0.6) (0.6)
Corporate (3.5) (3.5)
Intersegment Elimination (0.0) (0.0)
------ ------ ------ ------ ------
TOTAL $ 56.4 $ 56.4
1998 EBITDA /(4)/
- ---------------------
Bowling Centers $ 56.8 $ 18.3 $ 17.4 $ 45.4 $137.9
Bowling Products 0.1 3.8 4.6 2.2 10.7
Corporate (3.8) (3.6) (0.8) (3.4) (11.6)
Intersegment Elimination (0.0) (0.2) (0.1) (0.3) (0.6)
------ ------ ------ ------ ------
TOTAL $ 53.1 $ 18.3 $ 21.1 $ 43.9 $136.4
</TABLE>
See notes 1, 2 and 4 to Condensed Consolidated Statements of Operations.
<PAGE>
AMF Bowling, Inc. International Headquarters Post Office Box 15060
804.730.4000 Telephone
8100 AMF Drive 804.559.6276 Facsimile
Richmond, Virginia 23111 Richmond, Virginia 23227
FOR IMMEDIATE RELEASE Contact: Stephen E. Hare
May 5, 1999 Chief Financial Officer
(804) 730-4401
Renee D. Antolik
Director, Investor Relations
(804) 730-4402
(800) 832-0151
Press Release
AMF Bowling, Inc. Announces Recapitalization Plan
Rights Offering to Raise $140 Million of New Equity
Richmond, Virginia - May 5, 1999 - AMF Bowling, Inc. (NYSE: PIN) announced today
a recapitalization plan which includes a rights offering to raise approximately
$140 million and a tender for a portion of its outstanding convertible zero
coupon debentures at a discount.
AMF intends to effect a rights offering in which all AMF stockholders would
receive rights to purchase new AMF common shares. AMF will apply to list the
rights on the New York Stock Exchange. The rights would also have an over-
subscription privilege pursuant to which participating stockholders could elect
to purchase a proportionate share of the shares not purchased in the rights
offering by other stockholders. The number of rights per share to be offered
and the exercise price of the rights have not been determined. Certain of AMF's
significant stockholders are currently expected to participate fully in the
rights offering, subject to final terms and conditions, but they are not
obligated to do so. The rights offering is expected to raise approximately $140
million. The offering would be made only by means of a prospectus filed as part
of an effective registration statement under the Securities Act of 1933, as
amended.
The Company currently intends to use a portion of the proceeds of the rights
offering to make a tender offer for the Company's outstanding convertible zero
coupon debentures. The Company currently intends to tender for a minimum of 45%
and up to 60% of the outstanding debentures at an indicated price not to exceed
14% of face value. Affiliates of Goldman Sachs and Kelso & Company, who
together own approximately 44% of the outstanding debentures, have indicated
that they currently expect to tender their debentures pursuant to the tender
offer, subject to pro ration, and subject to the conditions and prices thereof,
but they are not obligated to do so.
A portion of the proceeds of the rights offering would also be used to fund
future bowling center acquisitions, along with funds that may be available under
the Company's credit agreement, and for general corporate purposes. AMF has
requested that, in connection with its recapitalization plan, the lenders under
its credit agreement provide the Company with (i) the ability to increase the
pace of its center acquisition program on a selective basis, (ii) greater
financial flexibility under the covenants contained in its credit agreement and
(iii) certain other modifications.
<PAGE>
The commencement of the rights offering and the tender offer are subject to
approval by the Board of Directors of the final terms and pricing. The rights
offering and the tender offer are expected to be conditioned upon each other.
______________________
As the largest owner and operator of bowling centers in the world, AMF is a
leading provider of family fun and recreation. The Company owns and operates
545 bowling centers throughout the world, with 422 centers in the U.S. and 123
centers in 10 countries. AMF is also a world leader in the manufacturing and
marketing of bowling products, manufactures and sells the PlayMaster and
renaissance brands of billiards tables and owns the Michael Jordan Golf Company.
A registration statement relating to the rights offering has been filed with the
Securities and Exchange Commission but has not yet become effective. The
securities referenced herein may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. The rights
offering will be made only be means of a prospectus. This press release is not
an offer or the solicitation of an offer to buy or sell any securities of AMF,
and no such offer or solicitation will be made except in compliance with
applicable securities laws.
This press release contains forward-looking statements that are based upon the
Company's estimates and expectations concerning future events and are subject to
certain risks and uncertainties that could cause actual results to differ
materially, all of which are difficult or impossible to predict and many of
which are beyond the control of AMF. In light of the significant uncertainties
inherent in forward-looking statements, the including of such forward-looking
statements should not be regarding as a representation that the Company's
objectives or plans will be realized. The Company does not hereby undertake to
update such forward-looking statements.
