Action Performance Enters International Motorsports Market Through Acquisition of MiniChamps.PHOENIX--(BUSINESS WIRE)--Aug. 24, 1998--Action Performance Companies Inc.(TM), (NASDAQ/NMS: ACTN ACTN Action ACTN Acetone ) Monday announced that it will acquire a majority interest in Paul's Model Art, GmbH, MiniChamps, GmbH, Lang Miniaturen, GmbH, and Spielwaren Danhausen, GmbH (collectively referred to as "MiniChamps") by purchasing an 80 percent interest. Under the terms of the purchase agreement, the current owners of MiniChamps will retain a 20 percent interest and will serve as managing directors for Action's European operations. The transaction is expected to close by the end of August. The company anticipates the acquisition will be accretive to earnings per share. MiniChamps designs and markets die-cast scaled replicas of motor vehicles, including models of Formula 1 and GT race cars as well as factory production cars. Its products are marketed pursuant to license agreements with some of the world's most popular race car drivers, team owners, and car manufacturers, including exclusive licenses with Michael Schumacher Michael Schumacher (pronounced / /, born January 3, 1969, in Hürth Hermülheim, Germany)[4] is a former Formula One driver, and seven-time world champion. , Jacques Villeneueve, Ferrari, McLaren, and others. MiniChamps' products are manufactured by third parties using MiniChamps' tools, dies, and molds. MiniChamps operates from a new 55,000 square foot facility in Aachen, Germany and distributes its products worldwide through an extensive network of distributors and retailers. Total revenue amounted to approximately $26 million for the latest 12-month period. Said Fred W. Wagenhals, Action Performance chairman, president and chief executive officer, "We are very excited to enter into Formula 1 and other forms of European racing with such an established company and brand name. "The strength of MiniChamps' licenses and relationships in Formula 1 are unparalleled in the industry and will provide the foundation upon which Action will leverage its core competency A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
"This transaction also opens new markets for Action's existing products through an extensive international network of distributors and retailers. We could not have found a better partner in this venture." 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 140,000-member Racing Collectables Club of America(TM) (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 track·side n. The area near a track, especially a racetrack. 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. The statements in this release regarding the potential impact of the acquisition of controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail of MiniChamps on the company's earnings, operations, marketing activities, licensing efforts, and distribution channels are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the company's expectations include industry conditions, demand for its products, the company's ability to integrate the operations of MiniChamps with the company's existing operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , and various risks associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on 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 the year ended Sept. 30, 1997.
CONTACT: Action Performance Companies Inc., Phoenix
Christopher Besing, 602/337-3703
Fred Wagenhals, 602/337-3710
Victoria Welch, 602/337-3702
www.action-performance.com
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