Action Performance Announces Record Results for Fiscal 1999 Q2
27 April 1999
Action Performance Announces Record Results for Fiscal 1999 Second Quarter and Six-month Periods
PHOENIX--April 27, 1999--Action Performance Companies, Inc. today announced record sales and earnings for its fiscal 1999 second quarter and first six months ended March 31, 1999.For the fiscal second quarter, sales grew 48% to a record $78.9 million from $53.2 million for the comparable quarter of fiscal 1998. Net income for the period rose approximately 41% to $6.5 million, or $0.38 per share (diluted), compared with net income of $4.6 million, or $0.28 per share (diluted), for the second quarter a year ago. The results for the second quarter of fiscal 1998 exclude a one-time charge of $950,000 for the settlement of litigation.
For the fiscal 1999 six-month period, sales advanced to $150.5 million from $96.1 million during the comparable period of fiscal 1998. Net income for the period reached $11.4 million, or $0.67 per share (diluted), compared to $8.3 million, or $0.50 per share (diluted), for the first six-months of fiscal 1998. The results for the first six months of fiscal 1998 exclude a one-time charge of $950,000.
Said Fred W. Wagenhals, Action chairman, president and CEO, "We are extremely pleased with our results for the second quarter. For the first two consecutive quarters of fiscal 1999, we posted record earnings per share and generated cash flows from operations that exceeded our net income. Contributing to these results were stronger than expected Internet orders and sales of Formula One die-cast replicas in Europe. The outlook for the third and fourth quarters of fiscal 1999 also is very positive with special programs like Superman Racing and other programs that will be announced in the near future."
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 channels, including the 165,000-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)
March 31, Sept. 30,
1999 1998
Current Assets:
Cash $ 45,760 $ 60,867
Accounts receivable, net 37,238 36,314
Inventories 34,390 35,790
Prepaid royalties 9,760 5,745
Other assets 4,998 4,961
Total Current Assets 132,146 143,677
Property and equipment, net 51,862 46,053
Goodwill and other intangibles, net 104,572 106,146
Other assets 12,018 10,058
--------- ---------
$ 300,598 $ 305,934
Current Liabilities:
Accounts payable $ 13,624 $ 11,430
Accrued royalties 10,401 10,589
Accrued expenses and other 12,721 10,973
Current portion of long term-debt 3,696 23,746
Total Current Liabilities 40,442 56,738
Long-term debt 110,095 111,850
Minority interest in subsidiaries 1,488 914
Shareholders' Equity 148,573 136,432
--------- ---------
$ 300,598 $ 305,934
ACTION PERFORMANCE COMPANIES, INC.
Summary Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
March 31, March 31,
1999 1998 1999 1998
Sales:
Collectibles $ 46,439 $ 28,254 $ 92,306 $ 49,194
Apparel and
souvenirs 30,092 24,235 54,428 45,625
Other 2,397 666 3,759 1,254
Net sales 78,928 53,155 150,493 96,073
Cost of sales 48,933 32,994 94,764 60,855
Gross profit 29,995 20,161 55,729 35,218
Operating expenses:
Selling, general
and administrative 16,101 10,535 30,701 18,735
Non-recurring charge
for litigation
settlement - 950 - 950
Amortization 1,501 1,209 2,958 1,690
Total operating
expenses 17,602 12,694 33,659 21,375
Income from operations 12,393 7,467 22,070 13,843
Interest and other
expenses, net (983) (741) (2,381) (1,024)
Income before provision
for income taxes 11,410 6,726 19,689 12,819
Minority interest in
earnings (570) - (644) -
Provision for
income taxes (4,336) (2,690) (7,618) (5,128)
Net income $ 6,504 $ 4,036 $11,427 $ 7,691
Net income per
common share:
Basic $ 0.39 $ 0.25 $ 0.69 $ 0.48
Diluted $ 0.38 $ 0.24 $ 0.67 $ 0.46
Weighted average
shares outstanding:
Basic 16,820 16,086 16,668 16,039
Diluted 17,179 16,666 17,025 16,591