Action Performance Reports Fiscal Third Quarter 2004 Earnings.PHOENIX -- Management Reports Revenue Growth over the Same Period Last Year, Sustained Margins and Strengthened Distribution Network Action Performance Companies, Inc. (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 financial results for the third quarter and first nine months of fiscal 2004. The company reported revenues of $92.2 million for the quarter ended June June: see month. 30, 2004, an increase of $4.7 million, or 5.3%, over revenues of $87.5 million for the same period last year. Action's third quarter net income after charges discussed below totaled $3.8 million, or $0.21 per share, compared to third quarter 2003 net income of $6.3 million or $0.35 per share. Revenues for the 2004 quarter included $6.5 million from Funline acquired in September September: see month. 2003. Income in 2004 included a loss of $196 thousand from the translation of foreign currency compared to a gain of $820 thousand from the currency translation in the 2003 quarter. On a sequential One after the other in some consecutive order such as by name or number. basis, the company reported a 10.2% gain in revenue and a 198% increase in net income from the second to third quarters of 2004. 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 and free cash flow increased on a sequential basis to $14.0 million and $9.7 million, respectively, from $9.7 million and $922 thousand in the second quarter. For the nine-month period, the company reported revenues of $247.0 million compared with $263.6 million for the first nine months of 2003. The company reported net income of $3.4 million or $0.18 per share for the first nine months of 2004 after deducting charges, aggregating $6.2 million in the first three quarters of the fiscal year. Net income for the nine months ended June 30, 2003, was $21.5 million or $1.18 per share. Revenues for 2004 included $30.1 million from Funline and net income included a gain in 2004 of $377 thousand from foreign currency conversions compared to a gain of $3.1 million in 2003. "We're we're Contraction of we are. we're we are pleased to report our second sequential increase in Action's quarterly profit," Action Chief Executive Officer 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 said. "Clearly, our company is experiencing positive momentum both financially and operationally as evidenced by these results and our recent agreement to a five-year licensing relationship with race team Hendrick Motorsports Hendrick Motorsports is a group of NASCAR racing teams started by Rick Hendrick in 1984 under the name "All Star Racing", racing only Chevrolets, racing in both the Nextel Cup and Busch Series circuits. . Our contract secures all Hendrick Hendrick, c.1680–1755, chief of the Mohawks. He was known also as Tiyanoga. He became a Christian and was an ally of the British. He represented his people at the Albany Congress (1754). drivers, including Jimmie Johnson This article is about NASCAR driver. For the football player, see Jimmie Johnson (American football). For people named Jimmy Johnson, see Jimmy Johnson (disambiguation). and Jeff Gordon Jeffery Michael Gordon (born August 4, 1971) is a professional American race car driver. He was born in Vallejo, California, raised in Pittsboro, Indiana, and currently lives in Charlotte, North Carolina. through 2011. Johnson and Gordon Gordon, river in W Tasmania, Australia, 125 mi (200 km) long. Flowing from mountains to the W coast, its main tributaries are the Franklin and Denison from the N, and Serpentine and Olga to the S. are currently ranked No. 1 and No. 3 respectively in the 2004 NEXTEL Cup The NASCAR NEXTEL Cup Series is NASCAR's top racing series. It was formerly known as the Strictly Stock Series (1949), Grand National Series (1950-1971), and the Winston Cup Series (1972-2003). championship standings." Charges had a total impact of $0.10 on third quarter 2004 earnings per share. The charges were related to distributor receivable charge-offs, charges for Jeff Hamilton Jeff Hamilton may refer to the following:
Prior to the charges affecting cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , Action's gross margins were 34.6% compared to 35.4% in the preceding year and 28.9% in the prior quarter. The improvement from the last quarter has resulted from improved internal controls over product pricing and the previously reported price increase. SG&A expenses approximated similar expenses from the quarter ended June 30, 2003, after adjusting for Funline SG&A expenses, which were not in the comparable 2003 period. In July July: see month. 2004, management took steps to strengthen its long-standing long-stand·ing adj. Of long duration or existence: a long-standing friendship. long-standing Adjective existing for a long time distributor network and improve the quality of its accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying by suspending shipments to three slow or non-paying Adj. 1. non-paying - paying nothing; "non-paying guests"; "non-paying bidders on eBay" unpaid - not paid; "unpaid wages"; "an unpaid bill" distributors. "The measures taken this quarter were both necessary and beneficial to our company, enabling us to focus on our performing distributors," said Wagenhals. Action Chief Financial Officer R. David Martin David Martin may refer to: Politicians
formed - having or given a form or shape revenues increased from $38.9 million in the second quarter to $49.5 million in the third quarter, we are experiencing a slower-than-expected rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in demand for our products. Factors impacting results included lower than expected die-cast orders, some mass retail order cancellations, softness in trackside track·side n. The area near a track, especially a racetrack. retail, and Jeff Hamilton NBA NBA abbr. 1. National Basketball Association 2. National Boxing Association NBA (US) n abbr (= National Basketball Association) → Basketball-Dachverband (= products. However, our wholesale die-cast quarterly revenue increased 112% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen to $25.7 million." Inventory turnover was 4.2 times at June 30, 2004 compared to 5.9 times at June 30, 2003, and 4.2 times at March 31, 2004. Without Funline, inventory turnover was 5.1 times at June 30, 2004. Inventories increased $21.7 million from June 30, 2003, primarily due to the $15.0 million of Funline that were not included in June 30, 2003, amounts, $4.7 million of increases in Jeff Hamilton and McArthur McArthur may refer to: Places:
The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. . Both Funline and McArthur inventories are expected to return to normal levels by September." Receivable DSO's were 49.0 days compared to 52.1 days at June 30, 2003 and 57.4 days at March 31, 2004. Receivables Receivables 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 , including $4.2 million from Funline were $49.6 million compared to $50.1 million at June 30, 2003, and $52.8 million at March 31, 2004. This represents an actual decline of $0.5 million and a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma decline of $4.7 million from June 30, 2003, and a decline of $3.2 million from March 31, 2004, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite increases in revenues in the June quarter over each period. Receivables also declined $20.3 million from September 30, 2003. Cash of $53.5 million increased from $34.0 million at the end of the March 2004 quarter. The increase in cash reflects $10.8 million from the draw-down of the term loans provided under the company's new $75 million Credit Agreement, net of transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). . Action will retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. the remaining $29.9 million of 4.75% convertible notes on August 2, 2004. Martin noted that "The retirement of the 4.75% convertible notes represents a 'watershed event' in the company's history. Four years ago when the notes were trading at less than 25% of their face value, there was little expectation that they would be redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. prior to maturity. The retirement of these notes combined with our new four year $75.0 million credit facility will allow the company additional flexibility in deploying future expected cash flows, including acquisitions and common stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. ." The company expects CAPEX in the fourth quarter to be $6.0 million, bringing total expected CAPEX for the year to $26.0 million. EBITDA and free cash flow for the quarter compared to the previous year and this second quarter were as follows:
Quarter Ended
(in thousands)
--------------------------------------------------
June March June
2004 2004 2003
--------------------------------------------------
EBITDA $14,043 $9,689 $17,272
Free Cash Flow $9,664 $922 $4,940
Action supplements its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting with free cash flow, and EBITDA both non-GAAP financial measures. Action considers EBITDA to be an important indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and free cash flow an important indicator of our cash operation margin. EBITDA and free cash flow should be considered an addition to, not a substitute for, the Company's other measures of financial performance reported in the consolidated financial statements 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 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . A reconciliation of EBITDA to GAAP reporting is attached following the unaudited consolidated financial statements. Free cash flow is defined as cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses less CAPEX. Order backlog at June 30, 2004 was $88.8 million compared to $79.9 million at June 30, 2003 and $88.6 million at March 31, 2004. This backlog reflects a continued softness in order size for fourth quarter die-cast programs as well as the cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of certain large programs the company had been developing for the last two quarters. Action reported distribution channel revenues as follows, in thousands:
Third Third
Quarter Quarter YTD YTD
2004 2003 2004 2003
----------------------------------
Domestic Die-Cast:
Wholesale distribution and
promotion $25,707 $31,332 $49,636 $76,509
Wholesale to mass-merchant
retailers 9,389 643 40,884 19,790
Retail through collector's
catalogue club 5,701 8,277 13,750 18,861
Foreign Die-Cast - wholesale
distribution and promotion 8,698 8,208 27,135 25,509
----------------------------------
Total die-cast 49,495 48,460 131,405 140,669
----------------------------------
Domestic Apparel and Memorabilia:
Wholesale distribution and
promotion 18,465 19,892 53,148 58,344
Wholesale to mass-merchant
retailers 6,745 4,046 26,462 27,505
----------------------------------
Total apparel and memorabilia 25,210 23,938 79,610 85,849
Retail at Trackside 16,695 14,556 33,617 34,983
Royalties and Other 750 543 2,321 2,114
----------------------------------
Net Sales $92,150 $87,497 $246,953 $263,615
==================================
Net Sales from Business Acquired in
Fiscal 2003 $6,468 $- $30,140 $-
==================================
Certain prior period amounts have been reclassified to conform to the
current year presentation.
Action also reported inventories as follows, in thousands:
June 30, 2004 March 31, 2004 June 30, 2003
----------------------------------------------
Die-Cast:
Motorsports Related:
United States $8,353 $7,648 $4,646
Germany 3,710 3,683 3,398
Funline 14,965 13,034 --
----------------------------------------------
Total Die-Cast 27,028 24,365 8,044
----------------------------------------------
Apparel and Other:
Motorsports Related 22,651 21,507 24,647
Other 10,399 10,529 5,699
----------------------------------------------
Total Apparel and
Other 33,050 32,036 30,346
----------------------------------------------
Total Inventories $60,078 $56,401 $38,390
==============================================
Fiscal 2004 Guidance Martin noted, "The third quarter again demonstrates that in this challenging retail environment the company's revenues have clearly become difficult to accurately predict. Given this difficulty and in keeping with the practice being adopted by a growing number of companies, management will refrain from providing specific quarterly or annual revenue and earnings guidance. While we currently expect the company's fourth quarter revenues and net income will exceed amounts from the prior year, these amounts will be less than previously anticipated." Martin also noted that, "Fourth quarter margins should approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. the third quarter margins net of charges." About Action Performance Action Performance Companies Inc. (NYSE: ATN) is the leader in the design, promotion, marketing and distribution of licensed motorsports merchandise. The Company's products include a broad range of motorsports-related die-cast 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. . Action Performance markets and distributes products through a variety of channels including the Action Racing Collectables network of wholesale distributors, 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. , QVC QVC Quality Value Convenience QVC Question Valid Command , goracing.com, trackside at racing events, direct corporate promotions, 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 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. Additional information about Action Performance can be found at www.action-performance.com. 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 expectations for revenues, net income, operational plans, and guidance for future periods. 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 of the Company 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, general economic conditions, 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 30, 2003, on file with the U.S. Securities and Exchange Commission.
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Balance Sheets
June 30, 2004 and September 30, 2003
(in thousands)
June 30, September 30,
2004 2003
-------------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $53,501 $49,462
Accounts receivable, net 49,624 69,890
Inventories 60,078 43,232
Prepaid royalties 6,830 6,540
Taxes receivable 969 -
Deferred income taxes 5,312 5,291
Prepaid expenses and other 5,547 3,161
-------------------------------------
Total Current Assets 181,861 177,576
-------------------------------------
Long-Term Assets
Property and equipment, net 63,649 62,951
Goodwill 88,278 87,448
Licenses and other intangibles,
net 51,324 44,426
Other 3,389 2,357
-------------------------------------
Total Long-Term Assets 206,640 197,182
-------------------------------------
$388,501 $374,758
=====================================
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable $31,716 $36,734
Accrued royalties 12,950 11,762
Accrued expenses 7,563 11,764
Taxes payable 690 3,156
Current portion of long-term
debt 33,613 567
-------------------------------------
Total Current Liabilities 86,532 63,983
-------------------------------------
Long-Term Liabilities:
Long-term debt 12,809 34,425
Deferred income taxes and other 22,832 11,816
-------------------------------------
Total Long-Term Liabilities 35,641 46,241
-------------------------------------
Commitments and Contingencies
Minority Interests 2,482 2,941
Shareholders' Equity 263,846 261,593
-------------------------------------
$388,501 $374,758
=====================================
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss)
Three and Nine Months Ended June 30, 2004 and 2003
(in thousands, except per share data)
Three Months Nine Months
Ended Ended
2004 2003 2004 2003
-------------------------------------
Net sales $92,150 $87,497 $246,953 $263,615
Cost of sales 62,579 56,558 176,264 170,840
-------------------------------------
Gross profit 29,571 30,939 70,689 92,775
-------------------------------------
Operating expenses:
Selling, general and
administrative 21,683 20,282 61,966 56,706
Amortization of licenses and
other intangibles 990 840 2,874 2,575
-------------------------------------
Total operating expenses 22,673 21,122 64,840 59,281
-------------------------------------
Income from operations 6,898 9,817 5,849 33,494
Interest expense (468) (539) (1,370) (1,728)
Foreign currency gains and losses (196) 820 377 3,107
Earnings from joint venture 204 - 966 -
Other income 47 289 695 514
Other expense (252) (305) (954) (992)
-------------------------------------
Income before income taxes 6,233 10,082 5,563 34,395
Income taxes 2,400 3,771 2,147 12,864
-------------------------------------
Net income 3,833 6,311 3,416 21,531
Other comprehensive income (loss) (196) 1,047 618 2,021
-------------------------------------
Comprehensive income $3,637 $7,358 $4,034 $23,552
=====================================
Earnings Per Common Share:
Basic $0.21 $0.35 $0.19 $1.21
Diluted $0.21 $0.35 $0.18 $1.18
Weighted Average Shares
Outstanding:
Basic 18,336 17,868 18,315 17,835
Diluted 18,606 18,291 18,619 18,228
Certain prior period amounts have been reclassified to conform to the
current year presentation.
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Nine Months Ended June 30, 2004 and 2003
(in thousands)
2004 2003
-----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,416 $21,531
Adjustments to reconcile net income to cash
provided by operations-
Depreciation and amortization 22,055 19,593
Stock option tax benefits 125 594
Undistributed earnings from joint venture (943) -
Other 1,617 2,951
Changes in assets and liabilities, net of
businesses acquired and disposed-
Accounts receivable, net 20,504 11,696
Accounts payable and accrued expenses (4,403) (13,230)
Income taxes receivable and payable (3,502) 620
Inventories (15,849) (4,443)
Prepaid royalties and accrued royalties 805 (5,397)
Other (4,463) (5,932)
-----------------
Net cash provided by operating activities 19,362 27,983
-----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (20,208) (26,854)
Acquisition of businesses (2,890) (688)
Other 265 -
-----------------
Net cash used in investing activities (22,833) (27,542)
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt borrowings 11,700 3,001
Long-term debt repayments (478) (9,355)
Common stock purchases for treasury - (2,024)
Dividends paid - common shareholders (2,746) (1,605)
Dividends paid - minority interest shareholders (1,414) (878)
Stock option and other exercise proceeds 270 665
-----------------
Net cash provided by (used in) financing
activities 7,332 (10,196)
-----------------
Effect of exchange rates on cash and cash
equivalents 178 729
-----------------
Net change in cash and cash equivalents 4,039 (9,026)
Cash and cash equivalents, beginning of period 49,462 69,585
-----------------
Cash and cash equivalents, end of period $53,501 $60,559
=================
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Reconciliation of EBITDA to GAAP Reporting
Three and Nine Months Ended June 30, 2004 and 2003
(in thousands)
Three Months Ended Nine Months Ended
------------------ -------------------
2004 2003 2004 2003
----------------------------------------------------------------------
Net Income $3,833 $6,311 $3,416 $21,531
Interest Expense 468 539 1,370 1,728
Income Taxes 2,400 3,771 2,147 12,864
Depreciation and Amortization:
Depreciation - cost of
sales 5,102 4,478 15,276 12,725
Depreciation - operating
expenses 1,250 1,333 3,905 4,293
Amortization of licenses
and other intangibles 990 840 2,874 2,575
---------------------------------------
Total depreciation and
amortization 7,342 6,651 22,055 19,593
---------------------------------------
Earnings Before Interest,
Taxes, Depreciation and
Amortization (EBITDA) $14,043 $17,272 $28,988 $55,716
=======================================
The company supplements its consolidated financial statements under
generally accepted accounting principles (GAAP) with a presentation of
EBITDA, a non-GAAP financial measure. Action Performance considers
EBITDA to be an important indicator of its operating margin. EBITDA
should be considered an addition to, not a substitute for, the
company's other measures of financial performance reported in the
consolidated financial statements in accordance with GAAP.
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Calculation of Free Cash Flow
(in thousands)
6/30/2004 3/31/2004 6/30/2003
---------------------------------------------------------------------
Cash Flow From Operating Activities $16,429 $6,662 $11,487
Capital Expenditures, Net (6,765) (5,740) (6,547)
-----------------------------------
Free Cash Flow $9,664 $922 $4,940
===================================
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion