Action Performance Announces Operating Results for Fiscal 2000 Second Quarter and Six Month Periods.Business Editors PHOENIX--(BUSINESS WIRE)--April 25, 2000 Action Performance Companies, Inc. (Nasdaq:ACTN ACTN Action ACTN Acetone ), the leader in the design, marketing, promotion and distribution of motorsports merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain , today announced its operating results for the fiscal 2000 second quarter and the first six months ended March 31, 2000. For the second quarter of 2000, sales declined 26% to $58.1 million from $78.9 million for the comparable quarter of fiscal 1999. The Company reported a net loss for the 2000 second quarter of $4.1 million, or a loss of $0.25 per share, compared to net income of $6.5 million, or $0.38 per share, for the year ago quarter. Results for the most recent quarter were negatively impacted by the cost of the Company's Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the operations and a decline in the number of special promotional programs, which adversely affected sales. The Company has taken steps to minimize the impact of its goracing.com subsidiary, including subleasing and selling the equipment and facilities used for the Company's Internet operations. As previously announced, the Company also made management changes during the first quarter to address the future development of special promotional programs. For the fiscal 2000 six-month period ended March 31, 2000, the Company reported sales of $122.9 million compared to $150.5 million during the same period of fiscal 1999. Excluding non-recurring charges of $2.3 million taken in the first fiscal quarter related to its goracing.com Internet business and other management restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , the Company reported a net loss of $5.0 million, or a loss of $0.30 per share, during the first six months of fiscal 2000 compared to net income of $11.4 million, or $0.67 per share, for the comparable period of fiscal 1999. "As announced in connection with our first quarter earnings release, a number of management changes were made in an effort to strengthen our core business. Unfortunately, the lead times of our business extend beyond one quarter and therefore the positive effects of those changes were not felt this quarter. Nonetheless, we are excited about the new promotional programs in the pipeline that will kick-in In the sport of Australian rules football, a kick-in (sometimes known as a kick-out) occurs when an opposition team scores a behind, with a defender kicking the ball out from the defensive goalsquare. The team kicking in may elect any one of its players to take the kick-in. during the third and fourth quarter of the year and into 2001," said Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. W. Wagenhals, Action chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Sales associated with special marketing and promotional programs in the second quarter were significantly less than the same quarter of fiscal 1999," said David A. Husband, CFO See Chief Financial Officer. . "However, sales momentum is building in the third quarter with the programs already approved and in production. Our marketing staff is now working on programs far enough in advance it should provide more linearity and predictability to our business." "Our Internet business cost us approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.0 million in the second quarter. In order to reduce costs going forward, we completed a series of transactions with a third party to sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. and sell the equipment and facilities used for the Internet operations and simultaneously entered into a hosting agreement. We are also currently discussing a transaction with several interested parties that will enable us to further reduce our investment and cost of the Internet business." Mr. Wagenhals added, "Our trackside track·side n. The area near a track, especially a racetrack. sales continue to set new records, which has historically proven to be an accurate gauge gauge In manufacturing and engineering, a device used to determine whether a dimension is larger or smaller than a reference standard. A snap gauge, for example, is formed like the letter C, with outer “go” and inner “not go” jaws, and is used to for the strength of the market. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future given the refocus Verb 1. refocus - focus once again; The physicist refocused the light beam" focus - cause to converge on or toward a central point; "Focus the light on this image" 2. on our core business and the continued strength of the motorsports industry." 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 Adj. 1. die-cast - formed by forcing molten metal into a die; "a die-cast seal" formed - having or given a form or shape car replica Earlier document exchange software from Farallon Communications, Inc. that converted a Windows or Mac document into a proprietary viewing format. The viewer could be distributed separately or embedded within the document itself, turning it into a single-document viewer. collectibles, apparel, souvenirs, and other memorabilia mem·o·ra·bil·i·a pl.n. 1. Objects valued for their connection with historical events, culture, or entertainment: posters, publicity photographs, and other movie memorabilia. 2. . The company markets and distributes products through a variety of channels, including the Racing Collectables Club of America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. (RCCA RCCA Root Cause and Corrective Action (to prevent the recurrence of a defect by eliminating its cause) RCCA Rural Community College Alliance RCCA Roller Coaster Corporation of America RCCA Rod Cluster Control Assembly ), online at goracing.com, trackside at racing events, mass retail department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. , and a worldwide network of wholesale distributors and specialty dealers. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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, acceptance of the Company's products and services in the marketplace, the Company's ability to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. its Internet transaction, the Company's ability to implement successfully its special marketing programs, and other risks discussed in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for 1999, dated Sept. 30, 1999, which is on file with the U.S. Securities and Exchange Commission. (financial tables follow)
ACTION PERFORMANCE COMPANIES, INC.
Summary Consolidated Balance Sheets
(In thousands)
March 31, September 30,
2000 1999
--------------------------
Current Assets:
Cash $ 25,468 $ 58,523
Accounts receivable, net 36,381 44,988
Inventories 43,335 45,310
Prepaid royalties 12,824 7,271
Other assets 2,385 2,953
-------- --------
Total Current Assets 120,393 159,045
Property and equipment, net 57,443 56,162
Goodwill and other
intangibles, net 109,356 111,634
Other assets 12,488 8,906
-------- --------
$299,680 $335,747
-------- --------
Current Liabilities:
Accounts payable $ 14,535 $ 20,127
Accrued royalties 6,986 13,519
Accrued expenses and other 7,151 14,889
Current portion of long term-debt 1,565 2,713
-------- --------
Total Current Liabilities 30,237 51,248
Long-term debt 108,723 109,208
Minority interest in subsidiaries 2,291 2,300
Shareholders' Equity 158,429 172,991
-------- --------
$ 299,680 $ 335,747
-------- --------
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,
2000 1999 2000 1999
--------- --------- --------- ---------
Sales:
Collectibles $ 31,492 $ 46,439 $ 67,335 $ 92,306
Apparel and souvenirs 24,953 30,092 51,774 54,428
Other 1,624 2,397 3,741 3,759
--------- --------- --------- ---------
Net sales 58,069 78,928 122,850 150,493
Cost of sales 39,904 48,933 84,790 94,764
--------- --------- --------- ---------
Gross profit 18,165 29,995 38,060 55,729
Gross profit percentage 31.3% 38.0% 31.0% 37.0%
Operating expenses:
Selling, general
and administrative 22,351 16,101 40,447 30,701
Other non-recurring
charge -- -- 2,251 --
Amortization of
goodwill and other
intangibles 2,331 1,501 4,227 2,958
--------- --------- --------- ---------
Total operating
expenses 24,682 17,602 46,925 33,659
--------- --------- --------- ---------
Income (loss) from
operations (6,517) 12,393 (8,865) 22,070
Other income (expense):
Minority interest in
earnings (341) (570) (551) (644)
Interest and other, net (845) (983) (1,806) (2,381)
--------- --------- --------- ---------
Total other
expense, net (1,186) (1,553) (2,356) (3,025)
Income (loss) before
provision (benefit)
for income taxes (7,703) 10,840 (11,222) 19,045
Provision for
(benefit from)
income taxes (3,565) 4,336 (4,955) 7,618
--------- --------- --------- ---------
Net income (loss) (4,138) 6,504 (6,267) 11,427
========= ========= ========= =========
Net income (loss) per
common share:
Basic ($0.25) $0.39 ($0.38) $0.69
========= ========= ========= =========
Diluted ($0.25) $0.38 ($0.38) $0.67
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 16,748 16,820 16,666 16,668
========= ========= ========= =========
Diluted 16,748 17,179 16,666 17,025
========= ========= ========= =========
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