<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) February 28, 2000
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 February 28, 2000, the registrant announced certain financial results for the
quarter and year ended December 31, 1999. A copy of the announcement is attached
as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
Exhibit Description
- ------- -----------
99.1 Announcement regarding financial results for quarter and year ended
December 31, 1999.
<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: February 28, 2000 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 year ended December 31, 1999. The company reported consolidated revenue
of $732.7 million, a 0.5% decrease compared with $736.4 million for 1998.
Recurring consolidated EBITDA for 1999, before restructuring, asset impairment
and other special charges, increased 0.5% to $137.1 million compared with $136.4
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.)
For the fourth quarter ended December 31, 1999, the Company reported
consolidated revenue of $186.2 million, a 13.5% decrease compared with $215.2
million for the same period of 1998. Recurring consolidated EBITDA for the
fourth quarter of 1999 was $42.5 million, a decrease of 3.2% compared with $43.9
million for the same period of 1998.
Bowling Centers Operating Results
- ---------------------------------
For the year ended December 31, 1999, Bowling Centers reported revenue of $585.7
million, an increase of 8.6% compared with revenue of $539.2 million for 1998.
Constant center revenue increased 2.5% in the U.S. and 1.6% internationally in
1999 compared with 1998. Recurring EBITDA for 1999 was $143.9 million, an
increase of 4.4% compared with $137.9 million for 1998. Recurring EBITDA margin
for 1999 was 24.6% compared with 25.6% for 1998. The lower EBITDA margin in 1999
reflected higher payroll and maintenance expenses to support AMF's operating
initiatives to improve customer service.
For the quarter ended December 31, 1999, Bowling Centers reported total revenue
of $157.9 million, an increase of 0.9% compared with $156.5 million for the same
quarter of 1998. Constant center revenue increased 1.5% in the U.S. and 0.7%
internationally in the fourth quarter of 1999 compared with 1998. Recurring
EBITDA for the fourth quarter of 1999 was $42.4 million, a decrease of 6.6%
compared with $45.4 million for the fourth quarter of 1998. Recurring EBITDA
margin was 26.9% for the fourth quarter of 1999 compared with 29.0% for the
fourth quarter of 1998. The lower EBITDA margin in the fourth quarter reflected
higher payroll expense to support customer service initiatives.
Bowling Products Operating Results
- ----------------------------------
For the year ended December 31, 1999, Bowling Products reported revenue of
$169.3 million, a decrease of 20.3% compared with $212.5 million for 1998.
Recurring EBITDA for 1999 was $8.0 million compared with $10.7 million for 1998,
a decrease of 31.8%.
For the quarter ended December 31, 1999, Bowling Products reported revenue of
$37.7 million, a decrease of 37.0% compared with revenue of $59.8 million for
the same quarter of 1998. Recurring EBITDA for the fourth quarter of 1999 was
$3.5 million compared with $2.2 million for the same prior year period, an
increase of 27.3%.
<PAGE>
Shipments of lane equipment packages for new centers ("NCP's") for the fourth
quarter were 432 units. For 1999, NCP shipments totaled 1,343 units compared
with 2,466 units for the prior year. Economic difficulties in certain Asia
Pacific markets and increased competition in general continued to impact
results. NCP shipments of 921 units for the second half of 1999 exceeded NCP
shipments of 422 units for the first half of 1999. The ongoing Bowling Products
cost reduction program resulted in a decrease of $9.3 million in selling,
general and administrative expenses in 1999 compared with 1998. However, these
savings were offset by a decline in gross profit resulting from lower sales
volume and competitive pricing.
Restructuring Charges, Asset Impairment Charges and Special Charges
- -------------------------------------------------------------------
During 1999, the company recorded restructuring charges of approximately $8.5
million that were related primarily to a plan to reorganize and downsize the
Bowling Products business. This was in response to market weakness in Asia
Pacific and increased competition, both of which have negatively impacted new
center package sales and profitability. The restructuring plan was developed in
conjunction with a strategic business assessment performed by Bain & Co. and was
designed to reduce the overall volatility of Bowling Products. The restructuring
charges related primarily to employee termination benefits, asset write-offs and
contract cancellations. Approximately $1.7 million of the restructuring charges
were non-cash write-downs of assets.
The Company also recorded asset impairment charges of $8.1 million representing
the difference between fair market value and carrying value of impaired assets.
The asset impairment charges relate to under-performing bowling center locations
that, under an approved plan, will be closed during the first half of 2000. Fair
market value was estimated based on the average proceeds from previous sales of
idle AMF bowling centers.
The strategic assessment by Bain also led to programs designed to improve
product line profitability and quality in the Company. This assessment was a
catalyst to the company recording approximately $26.5 million of special
charges, which are non-cash, relate primarily to receivables and inventory, and
are included within operating expenses.
Consolidated Operating Results
- ------------------------------
For the year ended December 31, 1999, net loss was $201.0 million, compared with
a net loss of $106.8 million for the prior year.
For the fourth quarter of 1999, net loss was $38.7 million compared with a net
loss of $42.6 million for the same prior year period.
At December 31, 1999, AMF had total debt of $1,048.6 million, of which $170.0
million was outstanding under the revolving credit facility, compared to
$1,047.1 million, of which $163.0 million was outstanding under the revolving
credit facility, at December 31, 1998.
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 539
bowling centers throughout the
<PAGE>
world, with 417 centers in the U.S. and 122 centers in 10 other countries. AMF
is also a world leader in the manufacturing and marketing of bowling products,
manufactures and sells the PlayMaster, Highland and Renaissance brands of
billiards tables, and owns the Michael Jordan Golf Company.
# # # # #
Statements in this earnings release about AMF'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 Year Ended
December 31, December 31,
------------------------- ---------------------------
1999 1998 1999 1998(2)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenue $186.2 $215.2 $732.7 $736.4
Operating expenses (3) 142.7 171.3 622.1 600.0
Restructuring and asset impairment charges 9.1 -- 16.6 --
Depreciation and amortization 29.3 32.7 132.7 120.3
------ ------ ------ ------
Operating income (loss) 5.1 11.2 (38.7) 16.1
Interest expense 29.9 25.1 111.3 101.9
Other non-operating expenses (income) (0.2) (0.8) 4.8 5.5
------ ------ ------ ------
Loss before income taxes (24.6) (13.1) (154.8) (91.3)
Provision for income taxes 1.3 24.2 27.6 7.3
------ ------ ------ ------
Net loss before joint ventures (25.9) (37.3) (182.4) (98.6)
Equity in loss of joint ventures, net of tax (12.8) (5.3) (18.6) (8.2)
------ ------ ------ ------
Net loss $(38.7) $(42.6) $(201.0) $(106.8)
Selected Data:
Recurring EBITDA (4) $42.5 (5) $ 43.9 $ 137.1 (5) $ 136.4
Recurring EBITDA margin 22.8% 20.4% 18.7% 18.5%
</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) To provide comparability, certain reclassifications of prior year revenue
and expense items have been made.
(3) Operating expenses represent costs of goods sold, bowling center operating
expenses, selling, general and administrative expenses and, in 1999, other
special charges.
(4) EBITDA represents a measure of operating cash flow defined as operating
income before interest, taxes, depreciation, amortization, and non-
operating expenses.
(5) Recurring EBITDA excludes non-recurring restructuring, asset impairment and
other special charges of approximately $8.5 million, $8.1 million and $26.5
million, respectively, in 1999.
<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 $129.3 $ 125.9 $157.9 $585.7
Bowling Products 32.0 38.9 60.7 37.7 169.3
Intersegment Elimination (2.0) (7.1) (3.8) (9.4) (22.3)
------ ------ -------- ------ ------
TOTAL $202.6 $161.1 $ 182.8 $186.2 $732.7
1998 Revenue (2)
- ------------
Bowling Centers $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 Recurrng EBITDA (4)(5)
- --------------------
Bowling Centers $ 60.5 $ 23.0 $ 18.0 $ 42.4 $143.9
Bowling Products (0.6) (0.0) 5.1 3.5 8.0
Corporate (3.5) (3.7) (4.0) (3.3) (14.5)
Intersegment Elimination (0.0) (0.1) (0.1) (0.1) (0.3)
------ ------ -------- ------ ------
TOTAL $ 56.4 $ 19.2 $ 19.0(4) $ 42.5 $137.1
1998 EBITDA (2)(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, 4 and 5 to Condensed Consolidated Statements of Operations.
