AMF BOWLING IMPLEMENTS ORGANIZATIONAL CHANGES
TO STRENGTHEN OPERATING PERFORMANCE AND REDUCE COSTS
Bowling Center Business To Focus On Strengthening Center Manager's Role;
Bowling Products Business Makes Senior Management Changes
Richmond, Virginia, November 16, 2000 - AMF Bowling today announced that, in
conjunction with its financial restructuring, the company is implementing
strategic organizational changes in each of its major businesses to strengthen
its operations and enhance its financial performance. These changes include new
initiatives in AMF's U.S. Bowling Centers business to streamline the
organization and refocus on the bowling center manager, and several senior
management changes in Bowling Products.
Estimated annual cost savings of $8 million are expected from these
changes. Over half of the savings will be used to fund new U.S. Bowling Center
initiatives in training, as well as improved compensation and benefits programs
for center managers and staff.
"I believe the changes we are making today will create the right
organizational structure to drive profitable growth in the future," said Roland
Smith, AMF President and Chief Executive Officer. "These improvements should
also help facilitate our discussions with creditors and lenders about ways to
restructure and reduce the company's long-term debt."
Bowling Center Initiatives
Smith said, that during 2000, the top 60% of AMF's U.S. bowling centers
were up 9% in revenue over prior year, and outperformed the remaining 40% by 16
percentage points of revenue and 8 points of EBITDA margin. "We found that the
primary factor in a center's performance was the quality and skill of the
manager and staff," he added. "Our objectives are to ensure that all managers
and staff receive the training necessary to be successful, to retain AMF's
better performing center managers, and to recruit strong manager candidates."
As part of the focus on center management, AMF will implement the
following initiatives:
o Establish a center manager training school in Richmond to provide new
managers with the management skills and other tools necessary to
manage centers successfully. A new Director of Training will be hired,
along with experienced bowling industry personnel from AMF's center
operations, to lead this new training initiative.
o Create an in-center training program and ongoing intranet-based
training for managers and staff.
o Increase the center managers' incentive compensation plan to allow
managers to receive a higher bonus tied to the successful financial
performance of their centers.
o Expand the incentive compensation plan to include the Assistant
Manager and Facility Manager for the first time. In addition, all
full-time employees will become eligible for benefits, including
participation in the company's health care and 401(K) programs.
o Institute a required certification program for both managers and
centers to assure higher quality facilities and improved customer
service standards.
"We are going to expect more from our center managers and their teams,"
Smith said. "At the same time, we're going to invest in their training and
reward good performance with an enhanced incentive bonus program."
To better develop a pride-of-ownership philosophy among center
managers, the company will streamline the corporate and field support
organizations. The U.S. center organization will consolidate from five to three
operating regions, with Paul Barkley responsible for the West, Steve Crawley for
the Central region and Lloyd Wrisley for the East (all three are currently
Regional Vice Presidents). District Managers will focus more on personnel,
training and the successful implementation of national programs. The positions
of District Marketing Manager, Regional Organizational Development Manager and
Regional Food & Beverage Manager have been eliminated.
Bowling Products Changes
"While we have made some progress towards improving our product quality
and order fulfillment, we have not improved quickly enough to achieve our
financial targets in Bowling Products in 2000," Smith said. "As a result, I
believe a change in leadership is necessary to accelerate improvement."
Randy Daniel, former President of AMF Bowling Products, has left the
company. AMF has started a search for a new Chief Operating Officer for Bowling
Products. In the interim, Smith will assume responsibility for Bowling Products,
with the following management changes to occur, effective immediately:
o John Walker, Vice President, North American Sales, assumes
responsibility for Global Sales and Customer Service.
o Walter Powers, Manager, Factory Certified Equipment, assumes
responsibility for Manufacturing and Engineering. Mark Kilpatrick, who
heads Manufacturing, and Ron Brown, who directs Engineering, will
continue their responsibilities and report to Powers.
o Tim Scott, Senior Vice President, Marketing, assumes leadership of
Product Management.
Corporate Changes
In conjunction with these changes, corporate staff positions have been
reduced to better meet the company's current business needs.
"I believe we're taking the right actions to make AMF a more efficient,
focused and competitive company," Smith said. "While we will realize cost
reductions, over half of these savings will be reinvested in the U.S. Bowling
Centers business, where we continue to see opportunities for enhanced
profitability and growth."
As the largest bowling company in the world, AMF owns and operates 527
bowling centers worldwide, with 408 centers in the U.S. and 119 centers in nine
other countries. AMF is also a world leader in the manufacturing and marketing
of bowling products. The company also manufactures and sells the PlayMaster,
Highland and Renaissance brands of billiards tables. Information about AMF is
available on the Internet at www.amf.com.
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