Action Performance Reports Second Quarter 2003 Results.Business Editors PHOENIX--(BUSINESS WIRE)--April 28, 2003 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, today reported financial results for the second quarter and six months ended March 31, 2003. Consistent with previous guidance, second quarter revenues declined to $91.1 million from $100.2 million in the same period last year. Revenues were lower as a result of the $18.8 million decline in wholesale and collectors
Misc This is a list of noted collectors.
formed - having or given a form or shape revenue due to the previously reported Monte Carlo Monte Carlo (môNtā` kärlō`), town (1982 pop. 13,150), principality of Monaco, on the Mediterranean Sea and the French Riviera. and Pontiac Pontiac, Ottawa chief Pontiac, fl. 1760–66, Ottawa chief. He may have been the chief met by Robert Rogers in 1760 when Rogers was on his way to take possession of the Western forts for the English. re-tooling issue. The re-tooling is now complete. Other products and distribution channels showed strength and partially offset the decline in die-cast revenues. Revenues included $4.1 million from companies acquired in 2002, wholesale and mass retail apparel revenue increases of $0.7 million and $1.7 million, respectively, and a mass retail die-cast revenue increase of $0.2 million. Trackside track·side n. The area near a track, especially a racetrack. revenues increased $2.1 million due to the timing of the Texas race. Net income for the three months ended March 31, 2003, was $7.3 million, compared to $11.2 million in the second quarter of fiscal 2002. On a per share basis, net income was $0.40 per share compared to $0.60 per share in the same period last year. Second quarter 2003 net income included foreign currency translation gains of $0.9 million offset by provisions to reduce prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. royalties of $1.0 million, a write-down Write-DownReducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of Kmart For the Australasian department store chain, see Kmart Australia. "K-Mart" is also a nickname for NBA player Kenyon Martin. Kmart is a chain of department stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Guam. pre-bankruptcy 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 in the amount of $0.4 million, and a write down of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $0.2 million. The $0.4 million write-down in Kmart pre-bankruptcy receivables reflects our most recent interpretation of publicly available filings by the retailer, which will soon emerge from bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most protection. We established in 2001 what was believed to be a conservative reserve against Kmart receivables, but the retailer's recently approved First Amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Joint Plan of Reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. and amendments indicates that trade vendors will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to a projected 9.7% recovery. As a result, we increased our reserve to 90.3 cents per dollar of Kmart pre-bankruptcy receivables. Gross margin was 35.2% for the three months ended March 31, 2003, compared to 38.8% in the same period last year. This decline in margin was due to the provision for prepaid royalties, lower margins from our German subsidiary, and a reduction in die-cast margins. SG&A expenses increased only $0.9 million, despite incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. SG&A expenses arising from companies acquired in 2002 totaling $2.0 million. We obtained SG&A expense reductions by continued strong cost controls. 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 totaled $18.8 million in the fiscal second quarter of 2003, compared to $24.8 million in the same period the year prior. We supplement our 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 (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) with the presentation of EBITDA, a non-GAAP financial measure. We consider EBITDA to be an important indicator of our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . 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 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. A reconciliation of EBITDA to GAAP reporting is attached following the unaudited consolidated financial statements. For the six-month period, sales were $176.9 million compared with $184.3 million for the same period the prior year. Net income was $15.2 million versus $19.4 million for the six months ended March 31, 2002. On a per share basis, net income was $0.83 compared to $1.06 in the same period last year. EBITDA was $38.4 million for the first six months compared to $45.0 million in the prior year. "Considering the nation's challenging economic and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. conditions and the challenges that we faced from the re-tooling issue, we believe that our level of profitability this quarter has proven the fundamental strength of the company and its economic model," Action Chairman and 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. "These results speak to the strength of our position as America's leading designer and distributor of licensed motorsports merchandise in the popular 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. arena." The balance sheet remained solid as of March 31, 2003, compared to September September: see month. 30, 2002. Cash remained very strong at $64.8 million. Working capital, as measured by the current ratio, improved to 3.7x from 3.0x at September 30, 2002. Capital expenditures for the six month period ended March 31, 2003, totaled $20.3 million, an increase of $8.3 million over the prior year due to the re-tooling issue, investments made to upgrade our IT systems in Charlotte, and the installation of a point of sales system in trackside trailers. Capital expenditures for the last six months of 2003 are estimated to be approximately $10.0 million. Guidance for Third Quarter Ending June June: see month. 30, 2003 The current operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. remains challenging due to the weak U.S. economy. Due to concern over the level of mass retail die-cast orders and special die-cast programs which have not been finalized See finalization. in time to assure production in the third quarter, we have adjusted our forecast for the fiscal third quarter. For the third quarter ending June 30, 2003, management expects to realize revenues in the range of $93.0 million to $105.0 million, and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.40 to $0.55 per share. We expect quarter-over-quarter revenue growth to resume again in the fourth quarter, however, due to the uncertain economic environment, we will not provide a range of estimates for the fourth quarter until we issue the third quarter earnings release. "We are disappointed in recent mass retail die-cast order cancellations. We remain focused on the business issues we can control, such as our ability to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... special programs, and the expectation of our solid profitability," David Martin David Martin may refer to: Politicians
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , positions us to deliver further improvements to our profitability. In addition, our die-cast product distributors report to us that demand for our product has been very strong and there is very little inventory in their warehouses reflecting the sell through of substantially all 2003 product." 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 dealers. Additional information about Action Performance can be found at www.action-performance.com. 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. This press release contains forward-looking statements regarding expectations for revenues, EBITDA, net income, cash flow and capital and other funding needs, growth strategy, 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 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 30, 2002, on file with the U.S. Securities and Exchange Commission.
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Balance Sheets
March 31, 2003 and September 30, 2002
(in thousands)
March 31, Sept.30,
2003 2002
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $64,797 $69,585
Accounts receivable, net 51,163 61,313
Inventories 36,237 33,467
Prepaid royalties 8,619 6,938
Deferred taxes 3,230 3,155
Prepaid expenses and other 5,202 2,397
--------- ---------
Total Current Assets 169,248 176,855
Property and Equipment, net 58,176 46,378
Goodwill 86,251 84,514
Licenses and Other Intangibles, net 22,832 24,000
Other Assets 4,980 6,169
--------- ---------
$341,487 $337,916
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $23,072 $28,958
Accrued royalties 10,431 15,146
Accrued expenses 7,002 10,545
Income taxes payable 5,242 4,265
Current portion of long-term debt 515 423
--------- ---------
Total Current Liabilities 46,262 59,337
--------- ---------
Long-Term Liabilities:
Long-term debt 43,308 40,360
Deferred taxes and other 5,655 5,696
--------- ---------
Total Long-Term Liabilities 48,963 46,056
--------- ---------
Commitments and Contingencies
Minority Interests 2,934 3,135
Shareholders' Equity 243,328 229,388
--------- ---------
$341,487 $337,916
========= =========
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Statements of Operations
and Comprehensive Income
Three and Six Months Ended March 31, 2003 and 2002
(in thousands, except per share data)
Three Months Ended Six Months Ended
------------------ -------------------
2003 2002 2003 2002
-------- --------- --------- ---------
Net sales $91,056 $100,185 $176,855 $184,321
Cost of sales 59,005 61,328 114,282 113,613
-------- --------- --------- ---------
Gross profit 32,051 38,857 62,573 70,708
-------- --------- --------- ---------
Operating expenses:
Selling, general and
administrative 19,799 18,929 37,161 36,101
Amortization of licenses and
other intangibles 835 581 1,735 1,087
-------- --------- --------- ---------
Total operating expenses 20,634 19,510 38,896 37,188
-------- --------- --------- ---------
Income from operations 11,417 19,347 23,677 33,520
Interest expense (610) (861) (1,189) (1,706)
Other income (expense) 699 (249) 1,825 (136)
-------- --------- --------- ---------
Income before income taxes 11,506 18,237 24,313 31,678
Income taxes 4,252 7,076 9,093 12,287
-------- --------- --------- ---------
Net income 7,254 11,161 15,220 19,391
Other comprehensive income
(loss) 191 (1,229) 974 (873)
-------- --------- --------- ---------
Comprehensive income $7,445 $9,932 $16,194 $18,518
======== ========= ========= =========
Earnings Per Common Share:
Basic $0.41 $0.64 $0.85 $1.12
Diluted $0.40 $0.60 $0.83 $1.06
Weighted Average Shares
Outstanding:
Basic 17,847 17,434 17,819 17,338
Diluted 18,998 19,261 19,009 19,191
Amounts for 2002 have been adjusted to reflect adoption of SFAS
No.145 effective October 1, 2002. Prior to adoption, gains and losses
on extinguishment of debt were reflected as extraordinary items. Gain
and losses on extinguishment of debt are now included in other income
(expense).
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Six Months Ended March 31, 2003 and 2002
(in thousands)
Six Months Ended
March 31,
-----------------
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $15,220 $19,391
Adjustments to reconcile net income to cash
provided by operations-
Depreciation and amortization 12,942 11,589
Stock option tax benefits 446 3,180
Gain on extinguishment of debt - (235)
Other 248 565
Changes in assets and liabilities, net-
Accounts receivable, net 10,561 (1,638)
Accounts payable (6,471) (4,571)
Income taxes payable 949 (5,078)
Inventories (2,496) (394)
Prepaid royalties and accrued royalties (6,396) (1,507)
Other (8,507) (4,321)
-------- --------
Net cash provided by operating
activities 16,496 16,981
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (20,307) (12,009)
Other (603) (237)
-------- --------
Net cash used in investing activities (20,910) (12,246)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt borrowings - German mortgage 3,001 -
Long-term debt repayments, net (422) (6,227)
Common stock purchases for treasury (2,024) -
Dividends paid to common stockholders (1,070) -
Dividends paid to minority interest
shareholders (730) (912)
Stock option exercise proceeds 394 5,154
-------- --------
Net cash used in financing
activities (851) (1,985)
-------- --------
Effect of exchange rates on cash and cash
equivalents 477 (180)
-------- --------
Net change in cash and cash equivalents (4,788) 2,570
Cash and cash equivalents, beginning of period 69,585 64,514
-------- --------
Cash and cash equivalents, end of period $64,797 $67,084
======== ========
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Reconciliation of EBITDA to GAAP Reporting
Three and Six Months Ended March 31, 2003 and 2002
(in thousands)
Three Months Ended Six Months Ended
------------------ -----------------
2003 2002 2003 2002
------ ------ ------ ------
Income Before Income Taxes $11,506 $18,237 $24,313 $31,678
Interest Expense 610 861 1,189 1,706
Depreciation and Amortization:
Depreciation - cost of sales 4,407 3,639 8,247 7,505
Depreciation - operating
expenses 1,451 1,507 2,960 2,997
Amortization of licenses and
other intangibles 835 581 1,735 1,087
-------- -------- ---------- ----------
Total depreciation and
amortization 6,693 5,727 12,942 11,589
-------- -------- ---------- ----------
Earnings Before Interest,
Taxes, Depreciation and
Amortization (EBITDA) $18,809 $24,825 $38,444 $44,973
======== ======== ========== ==========
Amounts for 2002 have been adjusted to reflect adoption of SFAS
No.145 effective October 1, 2002. Prior to adoption, gains and losses
on extinguishment of debt were reflected as extraordinary items. Gains
and losses on extinguishment of debt are now included in other income
(expense).
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