Action Performance Reports Record Sales and Earnings
26 January 1999
Action Performance Reports Record Sales and Earnings for Fiscal 1999 First Quarter
PHOENIX--Jan. 26, 1999--Action Performance Companies, Inc., (Nasdaq NM:ACTN) today announced record sales and earnings for its fiscal 1999 first quarter ended December 31, 1998.For the first quarter, sales grew 67 percent to a record $71.6 million from $42.9 million for the comparable quarter of fiscal 1998. Net income for the period rose 35 percent to $4.9 million, or to $0.29 per share (diluted), compared with net income of $3.7 million, or $0.22 per share (diluted), in the first quarter a year ago.
Said Fred W. Wagenhals, Action Chairman, President and CEO, "We are extremely pleased with our first quarter results. Our efforts during the quarter not only produced strong earnings, but generated tremendous cash flows from operations. These results reflect the strength of our current infrastructure and distribution channels, as well as our ability to develop exciting marketing and merchandising programs for the sport. We now have the ability to execute marketing programs from the conceptual planning stages to final product delivery with exceptionally short lead times. These programs generate exceptional value for our corporate partners, teams, and drivers and firmly position the Company for continued success in the future.
"Moving into the second quarter, the outlook for 1999 is incredibly positive. Action's first full year in Formula One racing brings tremendous opportunities for introducing our full-service, integrated marketing approach to the world's largest racing series. The grand opening of SpeedMall on February 1 also gives Action its first border-free advertising, sales and distribution channel, representing all product lines across NASCAR, Formula One, CART, NHRA, World of Outlaws and other series. This significantly strengthens Action's position to further penetrate the existing fan base and capture motorsports' growing popularity worldwide."
Action Performance Companies, Inc., is the leader in the design, marketing, 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 channels, including the 156,000-member Racing Collectables Club of America (RCCA), online through SpeedMall at 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. The Company's actual results could differ materially from those set forth in the forward-looking statements. Factors that might cause such a difference include, among others, competitive pressures, the Company's ability to successfully implement e-commerce initiatives, constantly changing technology, acceptance of Action's products and services in the marketplace and other risks detailed in the Company's Securities and Exchange Commission filings, including the Company's Form 10-K/A dated Sept. 30, 1998.
ACTION PERFORMANCE COMPANIES, INC.
Summary Consolidated Balance Sheets
(In thousands)
Dec. 31, Sept. 30,
1998 1998
Current Assets:
Cash $ 66,285 $ 60,867
Accounts receivable, net 33,008 36,314
Inventories 33,617 35,790
Prepaid royalties 5,192 5,745
Other assets 4,873 4,961
Total Current Assets 142,975 143,677
Property and equipment, net 50,136 46,053
Goodwill and other intangibles, net 104,742 106,146
Other assets 11,136 10,058
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$ 308,989 $ 305,934
Current Liabilities:
Accounts payable $ 7,113 $ 11,430
Accrued royalties 10,436 10,589
Accrued expenses and other 12,503 10,973
Current portion of long term-debt 24,743 23,746
Total Current Liabilities 54,795 56,738
Long-term debt 111,316 111,850
Minority interest in subsidiaries 989 914
Shareholders' Equity 141,889 136,432
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$ 308,989 $ 305,934
ACTION PERFORMANCE COMPANIES, INC.
Summary Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
December 31,
1998 1997
Sales:
Collectibles $ 45,867 $ 20,939
Apparel and souvenirs 24,336 21,390
Other 1,363 589
Net sales 71,566 42,918
Cost of sales 45,831 27,862
Gross profit 25,735 15,056
Operating expenses:
Selling, general and administrative 14,599 8,200
Amortization 1,458 481
Total operating expenses 16,057 8,681
Income from operations 9,678 6,375
Interest and other expenses, net (1,400) (282)
Income before provision for
income taxes 8,278 6,093
Minority interest in earnings (73) --
Provision for income taxes (3,282) (2,437)
Net income $ 4,923 $ 3,656
Net income per common share:
Basic $ 0.30 $ 0.23
Diluted $ 0.29 $ 0.22
Weighted average shares outstanding:
Basic 16,519 15,994
Diluted 16,878 16,568