Action Performance to Acquire Gift, Ornament Designer/Distributor; In Strategy to Expand Product Line and Mass Distribution Opportunities

    PHOENIX--June 17, 2002--Action Performance Companies, Inc. (Company) , the leader in the design, marketing, promotion, and distribution of licensed motorsports merchandise, today announced the acquisition of Trevco Trading Corp. (Trevco), a ten year old, privately-held designer and distributor of licensed gift items and ornaments to mass retail chains throughout the United States.
    Action will pay $5 million in cash for Trevco, plus an earn-out based on future performance. With annual sales of approximately $10 million, the acquisition is expected to be accretive to Action's EBITDA and net income.
    Trevco designs and distributes primarily licensed products, including products under NASCAR driver and team licenses. Products are produced by a contract manufacturer in China and are sold on a direct import basis, by both in-house and independent sales representatives, to mass retailers that are not currently customers of Action, including CVS, Walgreens, Kohls, Sears and Toys "R" Us, as well as current Action customers, including Wal-Mart, KMart and Target. In connection with the acquisition, Action has entered into a long-term outsourcing agreement with Trevco's contract manufacturer to continue current production and to design and produce future product lines.
    It is intended that Trevco's current line of products will be enhanced to include products produced under Action's licenses, and that Action's distribution channels will add Trevco's products to their existing product lines. Furthermore, it is anticipated that Trevco's mass-market customers will provide additional distribution opportunities for Action's products. The combined result is anticipated to be increased product flows to an even larger customer base and, overall, significant growth opportunities for Action.
    Trevco's operations will be integrated with Action's Phoenix marketing group, resulting in the addition of three individuals including Trevor Cohen, the founder and president of Trevco, who will continue to direct Trevco's activities under a two-year contract.
    Commenting on the acquisition, Fred Wagenhals, Action Performance chairman, president and CEO, said, "We are pleased with the chance to further broaden our product line of licensed merchandise and increase the number of distribution channels for our existing mass-market products. We are also pleased that Trevor Cohen will join Action's management team and feel that his entrepreneurial spirit will help to effectively integrate and further develop Trevco's mass-market opportunities."
    Trevor Cohen, Trevco's president, also stated: "I am extremely pleased to be able to combine our design and distribution strengths with Action's resources to expand both Trevco's and Action's product and distribution capabilities."
    David Martin, Action Performance CFO, added: "Trevco fits our ongoing strategy to leverage our intellectual properties over a wider range of products and distribution channels, which is expected to not only add to annual sales growth but also to margin and profit growth in subsequent periods. Our guidance for 2003 earnings per share of $3.15-$3.25 includes Trevco's core business, but doesn't include the potential incremental synergies that we anticipate from this acquisition."

    About Action Performance

    Action Performance Companies, Inc. is the leader in the design, marketing, promotion and distribution of licensed motorsports merchandise. Its products include a broad range of motorsports-related die-cast car replica collectibles, apparel, souvenirs, and other memorabilia. The Company markets and distributes products through a variety of sales and distribution channels, including QVC, the Racing Collectables Club of America (RCCA), goracing.com, trackside at racing events, mass retail department stores, and a worldwide network of wholesale distributors and specialty dealers.

    This press release contains forward-looking statements regarding the terms of the acquisition, expected closing, business strategy, future sales, future revenues, future earnings, margin growth, and guidance for future periods. The Company's actual results could differ materially from those set forth in these forward-looking statements. Factors that might cause such differences include, among others, the ability of the parties to execute the terms of the acquisition, the ability of the Company to successfully execute its business plan, competitive pressures, acceptance of the Company's products and services in the marketplace, the success of new marketing programs, the Company's ability to successfully execute its agreements with other parties, and other risks discussed in the Company's Form 10-K, dated September 30, 2001, on file with the U.S. Securities and Exchange Commission.