<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For The Fifty-Two Week Fiscal Year Ended May 29, 1996
Commission File Number 0-2849
AMERICAN RECREATION CENTERS, INC.
Incorporated in California Federal Employer No. 94-1441151
11171 Sun Center Drive, Suite 120, Rancho Cordova, California 95670
Mailing Address: P. O. Box 580, Rancho Cordova, CA 95741
Registrant's Telephone Number: (916) 852-8005
Securities Registered Pursuant to Section 12 (b) of the Act:
None
Securities Registered Pursuant to Section 12 (g) of the Act:
Common Stock, No Par Value
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
Registrant was $28,152,709 based upon the average trading price quoted on the
NASDAQ system on August 14, 1996. The number of shares of Registrant's only
class of common stock outstanding at fiscal year end was 4,647,899 shares.
1
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements
The financial statements of the Company as set forth under Item 8 of this report
on Form 10-K are incorporated herein by reference to the following pages of the
1996 Annual Report to Shareholders:
<TABLE>
<CAPTION>
Page in
Annual
Report**
--------
<S> <C>
Report of Independent Accountants* 14
Consolidated Balance Sheet at
May 29, 1996 and May 31, 1995* 6
Consolidated Statement of Income
and Retained Earnings for the
three years ended May 29, 1996* 7
Consolidated Statement of Cash Flows
for the three years ended May 29, 1996* 8
Notes to Consolidated Financial Statements* 9-13
(a)(2) Financial Statement Schedules
Report of Independent Accountants
on Financial Statement Schedule
for the three years ended May 29, 1996* 19
II - Valuation Reserves* 20
(a)(3) Financial Statements of the American Recreation Centers, Inc. Employee
Stock Ownership Plan for the year ended May 29, 1996 to be filed by
amendment.
</TABLE>
* Filed previously
** Incorporated by reference from the indicated pages of the 1996 Annual Report
to Shareholders.
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
2
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SIGNATURES
Pursuant to the requirement of Sections 13 and 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN RECREATION CENTERS, INC.
(Registrant)
Dated: February 11, 1997 Robert A. Crist
--------------------------------------------
Robert A. Crist, President and
Chief Executive Officer
Pursuant to the requirement of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/Robert A. Crist February 11, 1997
- -----------------------------------------------
Robert A. Crist, Principal
Executive Officer and Director,
President
/s/Karen B. Wagner February 11, 1997
- -------------------------------------------
Karen B. Wagner, Principal
Financial and Accounting Officer,
Vice President/Treasurer
/s/Bruce Feuchter February 11, 1997
- ---------------------------------------------
Bruce Feuchter, Director,
Legal Secretary
/s/Stephen R. Chanecka February 11, 1997
- ---------------------------------------
Stephen R. Chanecka, Director
3
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American Recreation
Centers, Inc.
Employee Stock Ownership Plan
Financial Statements
May 29, 1996 and May 31, 1995
<PAGE>
American Recreation Centers, Inc.
Employee Stock Ownership Plan
Financial Statements Table of Contents
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<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Accountants 3
Financial Statements:
Statement of Net Assets Available for Benefits 4
Statement of Changes in Net Assets Available for Benefits 5
Notes to Financial Statements 6-8
Supplemental Schedule:
Assets Held for Investment at
May 29, 1996 (Schedule I) 9
</TABLE>
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Report of Independent Accountants
January 31, 1997
To the Administrative Committee and Participants,
American Recreation Centers, Inc.
Employee Stock Ownership Plan
We were engaged to audit the financial statements of American Recreation
Centers, Inc. Employee Stock Ownership Plan (the Plan) as of May 29, 1996 and
May 31, 1995 and for the years then ended and the schedule as of May 29, 1996,
as listed in the accompanying table of contents. These financial statements and
the schedule are the responsibility of the Plan's management.
As permitted by Section 2520.103-8 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the Plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 4, which was certified by Imperial Trust Company, the trustee
of the Plan, except for comparing such information with the related information
included in the financial statements and schedule. We have been informed by the
Plan administrator that the trustee holds the Plan's investment assets and
executes investment transactions. The Plan administrator has obtained a
certification from the trustee as of and for the years ended May 29, 1996 and
May 31, 1995 that the information provided to the Plan administrator by the
trustee is complete and accurate.
As more fully described in Note 2 and as permitted under the Department of Labor
Rules and Regulations, the Plan prepares its financial statements on a modified
cash basis of accounting which is a comprehensive basis of accounting other than
generally accepted accounting principles.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedule taken as a whole. The form and content of the
information included in the financial statements and schedule, other than that
derived from the information certified by the trustee, have been audited by us
in accordance with generally accepted auditing standards and, in our opinion,
are presented in compliance with the Department of Labor Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
/s/Price Waterhouse LLP
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Statement of Net Assets Available for Benefits
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<TABLE>
<CAPTION>
May 29, May 31,
1996 1995
<S> <C> <C>
Assets
Assets held by trustee for investment:
Cash, including short-term investment funds $ 387,854 $ 260,236
Common stock of American Recreation Centers, Inc.,
at market, 710,882 and 686,479 shares ($3,898,474
and $3,587,277, at cost) 4,620,726 4,934,411
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5,008,580 5,194,647
Employer contributions receivable from American
Recreation Centers, Inc. 300,000 414,306
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Net assets available for benefits $5,308,580 $5,608,953
========== ==========
</TABLE>
See accompanying notes to financial statements.
4
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits
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<TABLE>
<CAPTION>
Fiscal years ended
May 29, May 31,
1996 1995
<S> <C> <C>
Contribution from American
Recreation Centers, Inc. $ 300,000 $ 425,000
Investment income:
Cash dividends 169,197 167,780
Interest 11,943 5,604
---------- ----------
481,140 598,384
Unrealized (depreciation) appreciation of common
stock, net (480,818) 186,641
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322 785,025
---------- ----------
Expenses and distributions:
Administrative fees 15,205 10,142
Interest expense - 1,070
Distributions to former participants 285,490 579,954
---------- ----------
300,695 591,166
---------- ----------
(Decrease) increase in net assets available for benefits (300,373) 193,859
Net assets available for benefits, beginning of year 5,608,953 5,415,094
---------- ----------
Net assets available for benefits, end of year $5,308,580 $5,608,953
========== ==========
</TABLE>
See accompanying notes to financial statements.
5
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
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1. Description of Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
The Plan is a defined contribution plan covering all employees of American
Recreation Centers, Inc. (the Company) who are not covered by a collective
bargaining agreement and have met specified age and service requirements.
The Plan enables participants to acquire equity interests in the Company.
The Plan is designed to comply with Internal Revenue Code Section 4975(e)(7)
and the regulations thereunder, and is subject to the applicable provisions
of the Employee Retirement Security Act of 1974 (ERISA).
The Plan provides for vesting of 20% upon the completion of two years of
credited service and additional vesting of 20% per year up to 100% for each
additional year of service credited to the participant. Plan participants
totaled 1,610 and 1,582 at May 29, 1996 and May 31, 1995.
All contributions are made by the Company to the American Recreation Centers,
Inc. Employee Stock Ownership Trust (the Trust). Contributions may be paid
in cash, common stock of the Company or other qualified property. Common
stock and other qualified property are contributed at the fair market value
of the property on the date of contribution. Contributions are discretionary
and are determined by resolution of the Board of Directors of the Company.
Contributions and the income, forfeitures and gains and losses of the Plan
are allocated to participants at the end of each fiscal year.
In November, 1996 the Company's administrative committee hired Howard Johnson
& Company to assist them in administering the Plan.
2. Summary of Significant Accounting Policies
Basis of accounting
The accounts of the Plan are maintained on a modified cash basis. Only the
employer contributions are accrued. Income and expenses are accounted for on
a cash basis.
Tax status
The Company has received a favorable determination letter from the Internal
Revenue Service dated May 1996 as to the qualified status of the Plan. The
Company is of the opinion that the Plan continues to fulfill the requirements
of the Internal Revenue Code and the Employee Retirement Income Security Act
of 1974, and that the trust, which forms a part of the Plan, is exempt from
income tax. Accordingly, no provision has been made for federal or state
income taxes.
Investment valuation
Investments in the common stock of the Company are valued at the average of
the last reported sales price and the latest quoted bid price at year-end.
6
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
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Investment transactions and investment income
Dividend income is recorded on the payment date.
In accordance with the policy of stating investments at fair market value,
annual unrealized market appreciation or depreciation of investments is
reflected in the statement of changes in net assets available for benefits.
Distributions
Distributions to participants are based on the value of the Company's common
stock at the time of distribution. The common stock is valued at the average
of the last reported sales price and the latest quoted bid price on the date
of distribution. Such distributions are made by the trustee at least
annually but not more frequently than quarterly.
Distributions are accounted for on a cash basis for financial statement
purposes. This accounting results in a difference between the Plan's
financial statements and its Form 5500 filed with the Internal Revenue
Service, as benefit obligations are accounted for on an accrual basis for
purposes of the Form 5500. The difference of $277,970 and $199,608 at May
29, 1996 and May 31, 1995, represents the accumulated benefit obligation on
Form 5500.
Expenses of the Plan
Direct expenses incurred in the administration of the Plan and the trust are
paid by the Plan. No indirect expenses are allocated to the Plan by the
Company.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. Contributions
For fiscal year ended May 31, 1995, the Company made a cash contribution of
$425,000.
At May 29, 1996, the Company had authorized a contribution to the Plan of
$300,000. This contribution will be made in the form of cash.
4. Financial Data Certified by the Trustee
The financial statements and schedule appearing on pages 4, 5, and 9 of this
report were prepared from financial data certified by the trustee, Imperial
Trust Company, in accordance with Section 2520.103-5 of the Department of
Labor Rules and Regulations for Reporting and Disclosure under ERISA.
7
<PAGE>
American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
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5. Subsequent Event
In January, 1997, the Company entered into a merger agreement pursuant to
which AMF Bowling Centers, Inc. will acquire the Company's common stock for
$8.50 per share in cash. The merger is subject to a number of conditions,
including governmental and shareholder approval, and is expected to close by
April 30, 1997. In conjunction with the merger, the Plan will be terminated
and all participants in the Plan will become fully vested. Subsequently, the
assets of the Trust will be distributed to or for the benefit of the
participants of the Plan in the form of cash.
8
<PAGE>
American Recreation Centers, Inc.
Employee Stock Ownership Plan
Assets Held for Investment at May 29, 1996 Schedule I
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<TABLE>
<CAPTION>
Description Current
Identity of Issue of Investment Cost Value
<S> <C> <C> <C>
American Recreation Centers, Inc. 710,882 shares $3,898,474 $4,620,726
Short-term investment funds 387,800 units 387,800 387,800
----------
$5,008,526
==========
</TABLE>
9
