UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 27, 2005
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-12131
AMF BOWLING WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 13-3873272 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
8100 AMF Drive
Richmond, Virginia 23111
(Address of principal executive offices, including zip code)
(804) 730-4000
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report.)
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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No ¨
As of March 27, 2005, there were issued and outstanding 1,000 shares of the registrant’s common stock, $0.01 par value, all of which were held of record by Kingpin Intermediate Corp., a wholly-owned subsidiary of Kingpin Holdings, LLC.
TABLE OF CONTENTS
1
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| New Company |
||||||||
| (In thousands, except share data) |
March 27, 2005 |
June 27, 2004 |
||||||
| Assets | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 86,319 | $ | 12,734 | ||||
| Accounts and notes receivable, net of allowance for doubtful accounts of $3,820 and $4,155, respectively |
19,637 | 25,737 | ||||||
| Inventories, net |
24,773 | 30,745 | ||||||
| Prepaid expenses and other current assets |
12,157 | 19,231 | ||||||
| Assets held for sale (Note 3) |
9,585 | — | ||||||
| Total current assets |
152,471 | 88,447 | ||||||
| Property and equipment, net |
256,023 | 363,956 | ||||||
| Other assets |
42,363 | 49,704 | ||||||
| Total assets |
$ | 450,857 | $ | 502,107 | ||||
| Liabilities and Stockholder’s Equity | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 13,953 | $ | 21,661 | ||||
| Accrued expenses and other liabilities |
75,579 | 79,979 | ||||||
| Current portion of long-term debt |
1,580 | 2,294 | ||||||
| Liabilities held for sale (Note 3) |
824 | — | ||||||
| Total current liabilities |
91,936 | 103,934 | ||||||
| Long-term debt, less current portion |
230,287 | 286,503 | ||||||
| Liabilities, subject to resolution |
155 | 233 | ||||||
| Total liabilities |
322,378 | 390,670 | ||||||
| Stockholder’s equity: |
||||||||
| Common stock ($0.01 par value, 1,000 shares authorized and outstanding) |
— | — | ||||||
| Paid-in capital |
133,716 | 133,716 | ||||||
| Accumulated deficit |
(2,544 | ) | (18,992 | ) | ||||
| Accumulated other comprehensive loss |
(2,693 | ) | (3,287 | ) | ||||
| Total stockholder’s equity |
128,479 | 111,437 | ||||||
| Total liabilities and stockholder’s equity |
$ | 450,857 | $ | 502,107 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| New Company |
Reorganized Predecessor Company |
New Company |
Reorganized Predecessor Company |
|||||||||||||||||||||
| (In thousands) |
2005 Third Quarter |
2004 One Month |
2004 Two Months |
2005 Nine Months |
2004 One Month |
2004 Eight Months |
||||||||||||||||||
| Operating revenue |
$ | 166,428 | $ | 55,044 | $ | 116,333 | $ | 426,919 | $ | 55,044 | $ | 386,057 | ||||||||||||
| Operating expenses: |
||||||||||||||||||||||||
| Cost of goods sold |
30,720 | 17,232 | 19,871 | 93,069 | 17,232 | 79,886 | ||||||||||||||||||
| Bowling center operating expenses |
90,097 | 28,141 | 70,610 | 253,891 | 28,141 | 219,904 | ||||||||||||||||||
| Selling, general and administrative expenses |
11,590 | 3,136 | 24,780 | 37,267 | 3,136 | 46,873 | ||||||||||||||||||
| Asset impairments |
6,915 | — | — | 8,218 | — | — | ||||||||||||||||||
| Depreciation and amortization |
9,735 | 3,589 | 7,896 | 31,451 | 3,589 | 32,831 | ||||||||||||||||||
| Total operating expenses |
149,057 | 52,098 | 123,157 | 423,896 | 52,098 | 379,494 | ||||||||||||||||||
| Operating income (loss) |
17,371 | 2,946 | (6,824 | ) | 3,023 | 2,946 | 6,563 | |||||||||||||||||
| Non-operating (income) expenses: |
||||||||||||||||||||||||
| Interest expense |
6,189 | 1,910 | 6,114 | 19,370 | 1,910 | 24,160 | ||||||||||||||||||
| Interest income |
(478 | ) | (36 | ) | (133 | ) | (810 | ) | (36 | ) | (259 | ) | ||||||||||||
| Loss on extinguishment of debt |
— | — | 35,318 | — | — | 35,318 | ||||||||||||||||||
| Other (income) expense, net |
1,760 | 865 | (423 | ) | (2,979 | ) | 865 | (3,732 | ) | |||||||||||||||
| Total non-operating expenses |
7,471 | 2,739 | 40,876 | 15,581 | 2,739 | 55,487 | ||||||||||||||||||
| Income (loss) from continuing operations before income taxes |
9,900 | 207 | (47,700 | ) | (12,558 | ) | 207 | (48,924 | ) | |||||||||||||||
| Provision for income taxes |
3,997 | 513 | 1,515 | 5,645 | 513 | 3,187 | ||||||||||||||||||
| Income (loss) from continuing operations |
5,903 | (306 | ) | (49,215 | ) | (18,203 | ) | (306 | ) | (52,111 | ) | |||||||||||||
| Discontinued operations (Note 3): |
||||||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax |
269 | (1,320 | ) | 1,635 | 7,175 | (1,320 | ) | 4,353 | ||||||||||||||||
| Gain (loss) on disposal, net of tax |
(2,771 | ) | — | — | 27,476 | — | — | |||||||||||||||||
| Income (loss) from discontinued operations |
(2,502 | ) | (1,320 | ) | 1,635 | 34,651 | (1,320 | ) | 4,353 | |||||||||||||||
| Net income (loss) |
$ | 3,401 | $ | (1,626 | ) | $ | (47,580 | ) | $ | 16,448 | $ | (1,626 | ) | $ | (47,758 | ) | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| New Company |
Reorganized Predecessor Company |
|||||||||||
| (In thousands) |
2005 Nine Months |
2004 One Month |
2004 Eight Months |
|||||||||
| Operating activities: |
||||||||||||
| Net income (loss) |
$ | 16,448 | $ | (1,626 | ) | $ | (47,758 | ) | ||||
| Less: Income (loss) from discontinued operations, net of tax |
34,651 | (1,320 | ) | 4,353 | ||||||||
| Net loss from continuing operations |
(18,203 | ) | (306 | ) | (52,111 | ) | ||||||
| Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) continuing operations: |
||||||||||||
| Stock based compensation |
— | — | 892 | |||||||||
| Depreciation and amortization |
31,451 | 3,589 | 32,831 | |||||||||
| Non-cash purchase method accounting adjustments |
— | 7,090 | — | |||||||||
| Write-off deferred financing costs |
— | — | 8,832 | |||||||||
| (Gain) loss on the sale of property and equipment, net |
1,109 | 241 | (983 | ) | ||||||||
| Gain from casualty loss |
— | — | (1,413 | ) | ||||||||
| Asset impairments |
8,218 | — | — | |||||||||
| Changes in assets and liabilities: |
||||||||||||
| Accounts and notes receivable, net |
4,514 | (1,928 | ) | 4,466 | ||||||||
| Inventories |
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