Action Performance Reports Fiscal 2002 Second Quarter, Six-Month Results; Third Consecutive Quarter of Record Sales, Net Income.Business Editors PHOENIX--(BUSINESS WIRE)--April 29, 2002 Action Performance Companies, Inc. (Company) (NYSE NYSE See: New York Stock Exchange :ATN ATN Acute tubular necrosis, see there ), the leader in the design, marketing, promotion, and distribution of licensed 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 reported record second quarter and six-month sales and earnings for the periods ended March 31, 2002, including the third consecutive quarter of record revenues and net income. Income before extraordinary items rose to a second-quarter record of $11.2 million, or 60 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , from $2.6 million, or 16 cents per share, a year ago. Income in the second quarter of 2001 was reduced by goodwill amortization of $960 thousand, or 5 cents per share. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the adoption of FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). 142, such amortization was discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: beginning in 2002. An extraordinary loss arising from the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of debt in the second quarter 2002 had no effect on net income per share, but an extraordinary gain arising from the repurchase of debt in second quarter 2001 increased net income for that quarter to $8.7 million or 53 cents per share. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter, excluding the extraordinary items, was $24.8 million, versus $13.3 million for the same period last year. Sales for the quarter increased 41.0%, reaching a second-quarter record of $100.2 million, compared to $71.1 million in the year-ago quarter. Sales of die cast collectibles grew 88.2% to $60.8 million, and apparel sales of $26.8 million were 41.9% higher than last year, after excluding sales in 2001 from the now-closed UK operation. Apparel sales to the mass retail market were $9.8 million, up 48.9%. Trackside track·side n. The area near a track, especially a racetrack. sales declined $2.6 million to $11.9 million, due primarily to this year's Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it weekend causing revenues from the Texas Winston Winston is a name deriving from Old English wynnstān, meaning "pleasant stone". Places Winston is the name of several places in England:
Gross margins rose to 38.8% for the quarter, compared to 33.7% in the prior year quarter. Higher gross margins were attributed to strong controls over die cast product costs and the elimination of the low margin UK operation. SG&A expenses were 18.9% of revenues in 2002 compared to 23.4% in 2001, reflecting strong expense controls and the resulting leverage that the Company obtains from increased revenues. For the quarter, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. improved to 19.3% of revenues, compared to 8.3% in 2001. Net income before extraordinary items also rose to 11.1% of revenues, compared to 3.7% in 2001. These substantial increases in operating income and net income reflect not only strong gross margins but also the leverage obtained due to strong controls over operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and the limited variability of SG&A. For the six-month period, income before extraordinary items also hit a record $19.2 million, or $1.05 per share, versus $2.5 million, or 16 cents per share, in the prior-year period. Including an extraordinary gain of $148 thousand, net income for the first six months of 2002 was $19.4 million, or $1.06 per share, versus $8.6 million, or 53 cents per share, in the year-earlier period, which included an extraordinary gain of $6.1 million. Excluding extraordinary gains, six-month EBITDA was $44.7 million in 2002 versus $20.9 million in 2001. Sales increased 51.1% to $184.3 million, a record for the six-month period, versus $122.0 million a year earlier. The Company's balance sheet continued to strengthen, with working capital increasing to $109.8 million from $95.8 million at the end of the preceding quarter and $66.6 million a year ago. The number of days sales were outstanding (DSO See CSO. ) was 37.9 days, compared with 42.3 days for the preceding quarter and 41.1 days at March 31, 2001. Inventory turnover improved to 9.8 times, compared to 8.6 times for the preceding quarter and 7.3 times in the March 31, 2001 quarter. Currently, $38.9 million of 4 3/4% convertible subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes remain outstanding, compared to $48.9 million on March 31, 2002. Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. Wagenhals, Action Performance 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. , remarked: "We are very pleased with our performance, which reflects our efforts to broaden the Company's revenue base, while maintaining strong and effective cost controls. We remain committed to our core licensing and racing collectibles business strategy, but we'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall continue to develop new opportunities to expand within those parameters. For example, new special programs, such as the Muppets promotion unveiled this last weekend, continue to attract new fans to 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. and help to increase Action's brand visibility and ongoing growth opportunities." Action Performance CFO See Chief Financial Officer. David Martin David Martin may refer to: Politicians
An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and inventory levels. As a result, gross margins continued to improve, and leverage from our economic model enabled Action to continue producing strong earnings growth. In addition, I believe it is meaningful that our earnings are supported by increased EBITDA and working capital." 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 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 sales and distribution 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 ), 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 A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. 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. regarding business strategy, new business opportunities, operating income and cost and expense controls. 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 To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution its business plan, 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 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. , dated September September: see month. 30, 2001, on file with the U.S. Securities and Exchange Commission.
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Statements of Operations
Three and Six Months Ended March 31, 2002 and 2001
(in thousands, except per share data)
Three Months Ended Six Months Ended ?
--------------------- ---------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Net sales $ 100,185 $ 71,074 $ 184,321 $ 121,962
Cost of sales 61,328 47,087 113,613 79,893
--------- --------- --------- ---------
Gross profit 38,857 23,987 70,708 42,069
--------- --------- --------- ---------
Operating expenses:
Selling, general
and administrative 18,929 16,632 36,101 31,499
Amortization of
goodwill -- 960 -- 1,945
Amortization of
intangibles 581 525 1,087 1,293
--------- --------- --------- ---------
Total operating
expenses 19,510 18,117 37,188 34,737
--------- --------- --------- ---------
Income from operations 19,347 5,870 33,520 7,332
Interest expense (861) (1,541) (1,706) (2,986)
Minority interests
and other, net (245) 1 (371) (139)
--------- --------- --------- ---------
Income before income
taxes and
extraordinary gain
(loss) 18,241 4,330 31,443 4,207
Income taxes 7,078 1,734 12,200 1,684
--------- --------- --------- ---------
Income before
extraordinary gain
(loss) 11,163 2,596 19,243 2,523
Extraordinary gain
(loss) on
extinguishment
of debt, net (2) 6,087 148 6,087
--------- --------- --------- ---------
Net income $ 11,161 $ 8,683 $ 19,391 $ 8,610
========= ========= ========= =========
EARNINGS PER
COMMON SHARE:
Basic-
Income before
extraordinary gain $ 0.64 $ 0.16 $ 1.11 $ 0.16
Extraordinary gain -- 0.38 0.01 0.37
--------- --------- --------- ---------
Net income $ 0.64 $ 0.54 $ 1.12 $ 0.53
========= ========= ========= =========
Diluted-
Income before
extraordinary gain $ 0.60 $ 0.16 $ 1.05 $ 0.16
Extraordinary gain -- 0.37 0.01 0.37
--------- --------- --------- ---------
Net income $ 0.60 $ 0.53 $ 1.06 $ 0.53
========= ========= ========= =========
Weighted Average
Shares Outstanding-
Basic 17,434 16,043 17,338 16,141
Diluted 19,261 16,205 19,191 16,238
ACTION PERFORMANCE COMPANIES, INC.
Condensed Consolidated Balance Sheets
March 31, 2002 and September 30, 2001
(in thousands)
March 31, September 30,
2002 2001
-------- --------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 67,084 $ 64,514
Accounts receivable, net 42,206 40,725
Inventories 25,385 25,120
Prepaid royalties 11,040 10,222
Deferred taxes 2,624 2,672
Prepaid expenses and other 1,880 1,392
-------- --------
Total current assets 150,219 144,645
Property and Equipment, net 41,296 40,356
Goodwill 76,319 76,937
Licenses and Trademark 12,073 12,785
Other Assets 5,113 4,230
-------- --------
$285,020 $278,953
======== ========
Current Liabilities:
Accounts payable $ 13,631 $ 18,371
Accrued royalties 16,102 16,792
Accrued expenses and other 10,420 18,755
Current portion of long-term debt 314 424
-------- --------
Total current liabilities 40,467 54,342
4 3/4% Convertible Subordinated Notes 48,933 54,933
Other Long-term Debt and Liabilities 6,115 6,773
Minority Interests 2,888 3,079
Shareholders' Equity 186,617 159,826
-------- --------
$285,020 $278,953
======== ========
ACTION PERFORMANCE COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
Six Months Ended March 31, 2002 and 2001
(in thousands)
Six Months Ended
--------------------
2002 2001
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 19,391 $ 8,610
Adjustments to reconcile net income to
net cash used in operations-
Deferred income taxes 1 5,907
Depreciation and amortization 11,589 13,659
Stock option tax benefits 3,180 --
Extraordinary gain on extinguishment of debt (235) (9,663)
Other (348) 750
Changes in assets and liabilities, net of
businesses acquired or disposed-
Accounts receivable, net (1,638) (9,603)
Accounts payable (4,571) (546)
Income tax payable and receivable (5,078) 17,819
Inventories (394) 5,700
Prepaid royalties and accrued royalties (1,507) (1,850)
Other (4,321) (4,776)
-------- --------
Net cash from operations 16,069 26,007
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (12,009) (7,792)
Disposition, net of costs -- 3,847
Other (237) --
-------- --------
Net cash used in investing activities (12,246) (3,945)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt repayments (6,227) (7,841)
Common stock purchases for treasury -- (1,375)
Stock option exercises 5,154 --
Other -- 18
-------- --------
Net cash used in financing activities (1,073) (9,198)
Effect of exchange rate changes on
cash and cash equivalents (180) (63)
-------- --------
Net change in cash and cash equivalents 2,570 12,801
Cash and cash equivalents, beginning of period 64,514 22,758
-------- --------
Cash and cash equivalents, end of period $ 67,084 $ 35,559
======== ========
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