Action Performance Announces Record Results for Fiscal 1998 Second-Quarter and Six-Month Periods.PHOENIX--(BUSINESS WIRE)--April 27, 1998--Action Performance Companies, Inc. (Nasdaq NM:ACTN ACTN Action ACTN Acetone ) Monday announced record sales and earnings for its fiscal 1998 second quarter and first six months ended March 31, 1998. For the fiscal second quarter, sales grew 88% to a record $53.2 million from $28.3 million for the comparable quarter of fiscal 1997. Excluding a one-time charge of $950,000 associated with the settlement of a lawsuit, net income for the period rose approximately 90% to $4.6 million, or $0.28 per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), compared with net income of $2.4 million, or $0.17 per share (diluted), for the second quarter a year ago. For the fiscal 1998 six-month period, sales advanced to $96.1 million from $43.5 million during the comparable period of fiscal 1997. Before the one-time settlement charge, net income for the period reached $8.3 million, or $0.50 per share (diluted), compared to $4.0 million, or $0.29 per share (diluted), for first six-months of fiscal 1997. Said Fred 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. , "We are extremely pleased with our results. Strong sales have continued across the board in all product categories and through all distribution channels. Our acquisitions from last year have not only given us wider distribution, but we have really enhanced our production and supply capabilities as well. We made more product available trackside track·side n. The area near a track, especially a racetrack. than ever before for the race season's first NASCAR NASCAR (National Association for Stock Car Auto Racing), organization that sanctions American stock-car races, est. 1948. It held its first race in Daytona Beach, Fla. event at Daytona Beach, Florida “Daytona” redirects here. For other uses, see Daytona (disambiguation). Daytona Beach is a city in Volusia County, Florida, USA. According to 2006 U.S. Census Bureau estimates, the city has a population of 64,421. in February -- the earliest in the race season that we have had all new Action die-cast product lines available. Sizeable sales growth has come from our entrance into the mass retail markets for soft goods soft goods pl.n. See dry goods. Noun 1. soft goods - textiles or clothing and related merchandise drygoods commodity, trade good, good - articles of commerce with our Image Works Image Works was a publishing label of video games publisher Mirrorsoft created in 1988. The first two games published under the Image Works label where Fernandez Must Die and Foxx Fights Back [1]. acquisition. By adding the top drivers that we have under license to the line up, mass retail demand for licensed apparel has been very strong." During the quarter, the Company completed the integration of its recently acquired Revell Collection division into its Phoenix operation, including merging the Revell Collectors Club with Action's Racing Collectables Club of America. Action also raised $96.5 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the private offering of 4 3/4% Subordinated Convertible Notes due 2005, which the Company intends to use for general corporate purposes, including possible future acquisitions. After the close of the quarter Action announced a strategic alliance with privately held LBE LBE - Language-Based Editor Technologies, Inc. (LBET), a NASCAR-licensing partner, leading-edge technology developer and retail entertainment firm. LBET is the creator and operator of NASCAR Silicon Motor Speedway Speedway, town (1990 pop. 13,092), Marion co., central Ind., just W of Indianapolis; inc. 1926. The Indianapolis Speedway, site of the annual Indianapolis 500 car race, is located there. There is also light manufacturing. , a unique interactive entertainment center recently launched in the Mall of America Mall of America (also MOA, MoA, or the Megamall) is a shopping mall located in the Twin Cities suburb of Bloomington, Minnesota. It is just southeast of the junction of Interstate 494 and Minnesota State Highway 77, and is across the interstate from the , Bloomington, Minnesota Bloomington is a city in Hennepin County, Minnesota, and a southern suburb of Minneapolis. As of 2005, it had a population of 84,347, making it the largest Twin Cities suburb, and the fifth largest city in the state[1]. , and has announced plans to expand into a network of interactive NASCAR racing The NASCAR Racing series of video games, developed by Papyrus, started in 1994 and ended with the release of NASCAR Racing 2003 Season in 2003. Later NASCAR games were released by Electronic Arts, who took over the official sport license. entertainment centers in high-traffic malls nationwide. Under the five-year alliance, Action agreed to make a $1 million equity investment in LBET and gained exclusive merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. rights for product distribution and sales of licensed apparel and souvenirs, die-cast collectibles and other motorsports consumer items in all NASCAR Silicon Motor Speedway racing entertainment centers. "Looking to the third and fourth quarters, the outlook is extremely positive," Mr. Wagenhals concluded. "Dale Earnhardt This article is about the elder Dale Earnhardt. For his son, see Dale Earnhardt, Jr.. For the racing team he founded, see Dale Earnhardt, Inc.. Ralph Dale Earnhardt, Sr. won the NASCAR Daytona 500 which was a very big event for him and the sport. It also provides a big boost to merchandising efforts with respect to his licensed products. We have made plans to introduce a special commemorative com·mem·o·ra·tive adj. Honoring or preserving the memory of another. n. Something that honors or preserves the memory of another. com·mem product line with our strategic partner Hasbro in celebration of this significant racing victory in Dale's very successful driving career. "With increased television ratings Television ratings may refer to:
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the sport's growth, we launched our Elvis-themed merchandising program at the NASCAR Las Vegas 400. Its successful debut at Caesar's Palace the night before the race was one of the largest and highest visibility merchandising promotions in NASCAR's history. Consumer demand for NASCAR-licensed products has continued in 1998, and we expect this program to be one of the most popular promotions we have ever created." 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 apparel, souvenirs, die-cast 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 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 125,000-member Racing Collectables Club of America (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 ), 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 nationwide wholesale network of approximately 5,000 specialty dealers and distributors. -0- The statements in this press release regarding sales and earnings growth, expectations regarding the continued popularity of motorsports and growth in the market for licensed motorsports merchandise, market acceptance of new product lines and programs, and achievement of a more balanced revenue stream associated with acquisitions are forward looking statements. These forward looking statements involve risks and uncertainties, many of which are beyond the Company's control, including the rate and amount of actual growth in the motorsports merchandise markets, the popularity and market acceptance of new products introduced by the Company or its competitors, and general economic conditions. Other risks and uncertainties are detailed in the Company's Securities and Exchange Commission filings. Actual results may differ materially from the expectations expressed in this release. -0-
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,
1998 1997 1998 1997
Sales:
Collectibles $ 26,291 $ 13,650 $ 46,217 $ 23,522
Apparel and souvenirs 24,235 13,121 45,625 18,334
Promotional 1,963 1,304 2,977 1,355
Other 666 227 1,254 267
Net sales 53,155 28,302 96,073 43,478
Cost of sales 32,994 17,521 60,855 26,302
Gross profit 20,161 10,781 35,218 17,176
Operating expenses:
Selling, general and
administrative expenses 10,535 5,857 18,735 9,256
Non-recurring charge for
litigation settlement 950 0 950 0
Amortization of goodwill
and other intangibles 1,209 341 1,690 495
Total operating expenses 12,694 6,198 21,375 9,751
Income from operations 7,467 4,583 13,843 7,425
Other income (expense):
Interest income
and other, net 172 94 464 166
Interest expense (913) (615) (1,488) (916)
Total other income (expense) (741) (521) (1,024) (750)
Income before provision
for income taxes 6,726 4,062 12,819 6,675
Provision for income taxes (2,690) (1,625) (5,128) (2,670)
Net Income $4,036 $2,437 $7,691 $4,005
Net income per common share
Basic $0.25 $0.18 $0.48 $0.30
Diluted $0.24 $0.17 $0.46 $0.29
Weighted average
shares outstanding
Basic 16,086 13,579 16,039 13,235
Diluted 16,666 14,129 16,591 13,786
-0-
ACTION PERFORMANCE COMPANIES, INC.
Consolidated Balance Sheets
(in thousands)
March 31, September 30,
1998 1997
-------- --------
CURRENT ASSETS:
Cash $ 97,405 $ 29,318
Accounts receivable, net 27,989 17,802
Inventories 28,977 17,855
Prepaid royalties 5,848 4,967
Prepaid and other 4,113 2,603
-------- --------
TOTAL CURRENT ASSETS 164,332 72,545
Property and equipment, net 29,953 20,017
Goodwill and other intangibles, net 75,279 46,409
Notes receivable and other assets 6,909 2,354
-------- --------
TOTAL ASSETS $276,473 $141,325
-------- --------
CURRENT LIABILITIES:
Accounts payable $ 13,126 $ 6,680
Accrued royalties 6,197 5,098
Accrued expenses & other 3,250 2,442
Current portion of long term debt 24,601 1,350
Line of credit 7,100 0
-------- --------
TOTAL CURRENT LIABILITIES 54,274 15,570
LONG-TERM DEBT:
Convertible subordinated debt 100,000 0
Other long-term debt 9,331 22,586
-------- --------
TOTAL LONG-TERM DEBT 109,331 22,586
SHAREHOLDERS' EQUITY:
Common stock 162 160
Additional paid-in capital 86,990 84,984
Retained earnings 25,716 18,025
-------- --------
TOTAL EQUITY 112,868 103,169
-------- --------
TOTAL LIABILITIES AND EQUITY $276,473 $141,325
-------- --------
CONTACT: Action Performance Companies Inc., Phoenix Fred Wagenhals, 602/337-3710 Christopher Besing, 602/337-3703 or Silverman Heller Associates Eugene G. Heller/Glenn Schoenfeld, 310/208-2550 |
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