Action Performance Reports First-Quarter Fiscal 2001 Results.

Business Editors and Sports Writers

PHOENIX--(BUSINESS WIRE)--Feb. 1, 2001

Action Performance Companies Inc. ("Company") (Nasdaq:ACTN), the leader in the design, marketing, promotion, and distribution of licensed motorsports merchandise, today reported results for its fiscal first quarter ended Dec. 31, 2000.

The Company reported sales for the quarter of $50.3 million and a net loss, including severance costs of approximately $371,000, of $73,000, or less than 1 cent per share. Excluding the severance costs, net income would have been $149,000, or 1 cent per share. Results for the quarter were better than street estimates, which projected per-share losses ranging from 5 cents to 10 cents.

For the year-ago first quarter the Company reported sales of $64.8 million and losses of $2.1 million, or 13 cents a share. Losses for the quarter included $2.3 million of non-recurring charges related to the postponement of the initial public offering of Goracing. Excluding these non-recurring charges, the loss would have been $761,000, or 5 cents per share.

Fred Wagenhals, Action Performance chairman, president and chief executive officer, commented: "We are pleased that we were able to achieve these results in the weakest quarter of our fiscal year while we were completing our restructuring and managing the disruptions associated with the transition of the RCCA business to QVC.

"As indicated on our last teleconference, we believe revenues have stabilized on a sequential basis, as sales for the quarter declined by less than 10% from fiscal 2000 fourth quarter. On a year-to-year basis, we anticipate that we have seen the last significant decline in quarterly revenues and are anticipating that revenues in each subsequent quarter should be at least comparable to prior-year levels."

David Martin, Action Performance chief financial officer, also commented: "Results for the quarter reflect the benefits of our restructuring efforts and our focus on cost and other operating controls. Our current cost structure, along with the substantial completion of our restructuring and transition of the RCCA business to QVC, should enable us to show improving gross and net margins in subsequent quarters and, with even moderate revenue growth, a return to sustained profitability."

The Company also reported that it has reacquired $10 million of its 4 3/4% convertible subordinated notes due 2005 for approximately $4 million. The gain on the retirement of this debt will be reflected as an extraordinary item in second-quarter results.

In addition, in accordance with its previously announced stock buyback plan, the Company reported that it has reacquired 360,000 shares of common stock since Sept. 30, 2000, for a total of 952,000 shares since the plan was approved in December 1999.

About Action Performance

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 sales and distribution channels, including QVC, the Racing Collectables Club of America (RCCA), 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 regarding the Company's revenues, financial condition, liquidity, costs and expenses, and financial results. The Company's actual results could differ materially from those set forth in these forward-looking statements. Factors that might cause such differences include, among others, the ability to successfully execute its business plan, the success of cost containment efforts, the results of the transition of the Company's RCCA business to QVC, competitive pressures, acceptance of the Company's products and services in the marketplace, the success of new marketing programs, the Company's ability to successfully execute its agreements with other parties, and other risks discussed in the Company's Form 10-K, dated Sept. 30, 2000, on file with the U.S. Securities and Exchange Commission.

                  ACTION PERFORMANCE COMPANIES, INC.
                  Summary Consolidated Balance Sheets
                            (In thousands)

                                        Dec. 31,       Sept. 30,
                                          2000            2000

Current Assets:
  Cash                                $  18,232       $  22,758
  Accounts receivable, net               26,674          22,901
  Inventories                            28,404          32,017
  Prepaid royalties                       8,225           7,262
  Estimated income tax receivable        16,607          14,000
  Deferred tax asset                      5,842           5,905
  Other assets                            1,562           1,942
    Total Current Assets                105,546         106,785

Property and equipment, net              49,022          48,204
Goodwill and other intangibles, net      90,595          94,894
Long-Term Deferred Tax Asset                 --           1,423
Other assets                              5,174           4,611
                                      $ 250,337       $ 255,917

Current Liabilities:
  Accounts payable                    $  14,129       $  16,510
  Accrued royalties                       8,067           9,998
  Accrued expenses and other             11,018          14,250
  Current portion of long term-debt       1,487           1,503
     Total Current Liabilities           34,701          42,261

Long-term liabilities                   109,495         108,340
Commitments and Contingencies                --              --
Minority interest in subsidiaries         2,602           2,598
Shareholders' Equity                    103,539         102,718
                                      $ 250,337       $ 255,917

                  ACTION PERFORMANCE COMPANIES, INC.
             Summary Consolidated Statements of Operations
                 (In thousands, except per share data)

                                                Dec. 31,     Dec. 31,
                                                  2000         1999

Sales:
  Collectibles                                  $ 30,079    $ 35,843
  Apparel and souvenirs                           18,562      26,821
  Other                                            1,613       2,117
    Net sales                                     50,254      64,781
Cost of sales                                     32,172      44,886
Gross margin                                      18,082      19,895
Operating expenses:
  Selling, general and administrative             14,867      20,347
  Amortization of goodwill and other intangibles   1,753       1,896
    Total operating expenses                      16,620      22,243
Income (loss) from operations                      1,462      (2,348)
Other income (expense):
  Minority interest in earnings                     (318)       (210)
  Interest and other, net                            178         778
  Interest expense                                (1,445)     (1,739)
    Total other expense, net                      (1,585)     (1,171)
Income (loss) before provision (benefit) for
 income taxes                                       (123)     (3,519)
Provision for (benefit from) income taxes            (50)     (1,390)
Net income (loss)                               $    (73)   $ (2,129)
Net income (loss) per common share:
  Basic                                         $  (0.00)   $  (0.13)
  Diluted                                       $  (0.00)   $  (0.13)
Weighted average shares outstanding:
  Basic                                           16,243      16,909
  Diluted                                         16,243      16,909