- The Washington Times - Wednesday, August 1, 2001

AMF Bowling Inc., the world's largest bowling-alley operator, plans to keep all of its 517 centers open, even as it draws up a bankruptcy reorganization plan.
The Richmond holding company, the parent company of AMF Bowling Worldwide, filed for Chapter 11 bankruptcy protection yesterday, said Merrell Wreden, company vice president of corporate affairs.
"We're operating the business in the normal course," he said.
The move comes less than a month after subsidiary AMF Bowling Worldwide filed for Chapter 11. The chain has five centers in the Washington area: two in Alexandria and three in Maryland's suburbs.
Shares of AMF, which trade over the counter, have dropped from 75 cents per share a year ago to 7 cents yesterday.
The company hopes to finalize its reorganization plans by the end of August, Mr. Wreden said. If the U.S. Bankruptcy Court in Richmond approves AMF's plan, the company will become private and will pay back its $625 million in debt through a combination of cash, debt and common stock.
Meanwhile, lenders are pouring as much as $75 million into AMF's coffers so that it will stay afloat.
"They are trying to restructure the debt, trying to come to an agreement in bankruptcy with the bondholders," said Harold Diamond, an analyst with Standard & Poor's in New York.
AMF's woes date to 1997 and 1998 when the chain expanded aggressively, growing from 285 centers to 517. But the company saw its operating cash flow dry up from $70 million to about $6 million.
Its losses widened to $200.5 million ($2.40 per diluted share) in 2000 from $162.2 million ($2.32) in 1999. Diluted shares reflect the value of options, warrants and other securities convertible into common stock.
Sales fell 2.5 percent from $732.8 million in 1999 to $715 million a year later.
"The demand for our bowling product in China basically fell off the cliff," said Mr. Wreden, referring to the Asian market, where AMF expanded the most.
"Basically, the bowling market, especially the bowling-equipment market, had a lot of problems in the past few years, mostly due to sales in Asia," Mr. Diamond said. "In addition, the company made a lot of acquisitions that didn't work out."
AMF has four centers in China and Hong Kong.
The company's business is divided between operating centers and supplying equipment to other bowling operators. The centers have done well, said Mr. Wreden, but the equipment business has slowed at the prospect of a long-term decline in the popularity of bowling.
The main losses stem from the Asia-Pacific market, where equipment shipments dropped the most. For instance, in 1999 such shipments totaled 1,343 units, compared with 2,466 units the year before.
Decline in membership in the United States also has hurt.
The membership of bowling leagues the American Bowling Congress, the Women's International Bowling Congress and the Young American Bowling Alliance is down to 3.75 million from about 9 million in the early 1980s, said Mark Miller, a spokesman for Bowling Inc. Shared Services, a trade group for bowlers based in Milwaukee.
Whereas once bowling was a weekly leisure activity for many Americans, today most are amateurs, going bowling only once or twice a year, Mr. Miller added.
While the number of regulars at bowling alleys is dropping, casual bowlers those going only about once a year are at a record high of nearly 91 million, according to the National Sporting Goods Association. Those who go bowling more than twice a year number about 43 million.
The trend has "gone much more to casual bowling," Mr. Miller said. "People just don't seem to have the time to commit to organized and structured things like bowling leagues."
The industry is fragmented, with AMF and main corporate competitor Brunswick Corp., of Illinois, holding about 10 percent of the market. The rest is made up of thousands of mom-and-pop operations.

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