Action Performance Reports Second Quarter 2005 Results.PHOENIX -- 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 announced financial results for the fiscal second quarter ended March 31, 2005. For the quarter, the company reported revenues of $75.3 million compared with $83.6 million in the prior year, a decrease of 9.9%. The decrease in revenue in the quarter resulted primarily from lower sales of 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 products to mass merchandisers and, to a lesser extent, lower apparel sales to wholesale channels. The Company reported a net loss of $2.9 million, or $0.16 per share, compared with net income of $1.3 million, or $0.07 in second quarter of 2004. For the six months ended March 31, 2005, the company reported revenues of $151.4 million, compared with revenues of $154.8 million in the prior year, a decrease of 2.2%. The company reported a net loss of $6.5 million, or $0.35 per share, compared with a net loss of $0.4 million, or $0.02 per share in the prior year. 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, Chief Executive Officer, commented "We continue to refine the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan that was announced last quarter. Improving our distribution model is the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of that plan. After an exhaustive review of our options, management concluded that Action's existing Concord, North Carolina Concord (kän-kord) is a city in the U.S. state of North Carolina. As of the 2000 census, the city had a total population of 55,977. It is the county seat of Cabarrus CountyGR6 and a winner of the All-America City Award in 2004. facility provided the best combination of cost, access to the customer, control of product to the retail market and ease of implementation. We believe that having Action employees talk directly to our retail customers to understand their needs will help us restore growth to the collector One side of a bipolar transistor. When the base is pulsed, current flows from the emitter to the collector, or vice versa depending on the design. See drain. die-cast market." Mr. Wagenhals stated further "Although there is much work ahead, we have implemented a number of initiatives that we believe will improve long term profitability at Action Performance. During the quarter, we consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: the Jeff Hamilton Jeff Hamilton may refer to the following:
n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. and improved our 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 . Overall, I am pleased with the progress that the Company is making and with the commitment that the employees of Action Performance have made to the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. plan." Business Outlook While Action Performance refrains from giving specific revenue and earnings guidance, the Company expects fiscal third quarter 2005 revenue to be sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen higher compared to the second quarter, but below year ago levels. Further, it expects wholesale sales of die cast to be down year-on-year reflecting uncertainties associated with the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of its distributor relationships as the Company transitions to a direct distribution model. Dividend Policy The Board of Directors has decided not to declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. the quarterly dividend of $0.05 per share. The Board believes that it is prudent to take this action coincident co·in·ci·dent adj. 1. Occupying the same area in space or happening at the same time: a series of coincident events. See Synonyms at contemporary. 2. with the restructuring initiatives in place. The evaluation of paying a dividend will be made on a quarter-by-quarter basis. 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 track·side n. The area near a track, especially a racetrack. 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 http://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. , including statements regarding the benefits of our restructuring plan and sales guidance for the remainder of fiscal 2005. 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 September: see month. 30, 2004, under the caption "Business-Risk Factors" and in Exhibit 99.1 to the Company's Form 10-Q Form 10-Q See 10-Q. dated December December: see month. 31, 2004, each of which is on file with the U.S. Securities and Exchange Commission.
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Balance Sheets
March 31, 2005 and September 30, 2004
(in thousands)
March 31, September 30,
2005 2004
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 6,414 $ 12,580
Accounts receivable, net 39,444 51,769
Inventories 56,095 56,947
Prepaid royalties 6,126 2,834
Taxes receivable 3,908 2,126
Deferred income taxes 8,772 8,766
Prepaid expenses and other 4,159 5,920
------------- -------------
Total current assets 124,918 140,942
------------- -------------
Long-Term Assets:
Property and equipment, net 63,072 64,878
Goodwill 89,399 88,653
Licenses and other intangibles, net 58,549 56,614
Other 2,885 3,196
------------- -------------
Total long-term assets 213,905 213,341
------------- -------------
$ 338,823 $ 354,283
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 17,455 $ 28,778
Accrued royalties 9,981 10,702
Accrued expenses 6,476 8,757
Taxes payable 2,277 1,742
Line-of-credit and term loans 13,343 -
Current portion of long-term debt 395 4,009
------------- -------------
Total current liabilities 49,927 53,988
------------- -------------
Long-Term Liabilities:
Long-term debt 4,279 11,882
Deferred income taxes 26,402 24,979
Other 260 298
------------- -------------
Total long-term liabilities 30,941 37,159
------------- -------------
Commitments and Contingencies
Minority Interests 2,301 2,509
Shareholders' Equity 255,654 260,627
------------- -------------
$ 338,823 $ 354,283
============= =============
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Condensed Consolidated Statements of Operations and
Comprehensive Income (Loss)
Three and Six Months Ended March 31, 2005 and 2004
(in thousands, except per share data)
Three Months Ended Six Months Ended
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net sales $ 75,326 $ 83,596 $ 151,380 $ 154,803
Cost of sales 55,098 59,434 114,700 113,685
---------- ---------- ---------- ----------
Gross profit 20,228 24,162 36,680 41,118
---------- ---------- ---------- ----------
Operating expenses:
Selling, general, and
administrative 20,652 20,377 43,553 40,283
Amortization of licenses
and other intangibles 879 943 1,757 1,884
---------- ---------- ---------- ----------
Total operating
expenses 21,531 21,320 45,310 42,167
---------- ---------- ---------- ----------
Income (loss) from
operations (1,303) 2,842 (8,630) (1,049)
Interest expense (396) (471) (697) (902)
Foreign exchange gains
(losses) (871) (256) 908 1,153
Earnings from joint venture 109 198 402 762
Other income 56 46 81 112
Other expense (456) (288) (725) (746)
---------- ---------- ---------- ----------
Total other income
(expense) (1,558) (771) (31) 379
---------- ---------- ---------- ----------
Income (loss) before income
taxes (2,861) 2,071 (8,661) (670)
Income taxes 54 783 (2,208) (253)
---------- ---------- ---------- ----------
Net income (loss) (2,915) 1,288 (6,453) (417)
Other comprehensive
income (loss) (1,587) (591) 831 814
---------- ---------- ---------- ----------
Comprehensive income
(loss) $ (4,502) $ 697 $ (5,622) $ 397
========== ========== ========== ==========
Earnings (Loss) Per Common
Share:
Basic $ (0.16) $ 0.07 $ (0.35) $ (0.02)
Diluted $ (0.16) $ 0.07 $ (0.35) $ (0.02)
Weighted Average Shares
Outstanding:
Basic 18,568 18,327 18,487 18,304
Diluted 18,568 18,602 18,487 18,304
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
Six Months Ended March 31, 2005 and 2004
(in thousands)
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,453) $ (417)
Adjustments to reconcile net loss to cash
provided by operations-
Depreciation and amortization 16,258 14,713
Provision for doubtful accounts 2,897 572
Other 457 40
Changes in assets and liabilities, net of
businesses acquired and disposed-
Accounts receivable 9,518 16,779
Accounts payable and accrued expenses (9,525) (6,276)
Taxes payable and receivable, net (1,306) (4,934)
Inventories 1,003 (12,144)
Prepaid royalties and accrued royalties (4,029) (3,320)
Other 1,140 (2,080)
---------- ----------
Net cash provided by operating
activities 9,960 2,933
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (14,698) (13,443)
Acquisition of businesses and intangibles, net
of costs (2,051) (2,439)
Other 450 503
---------- ----------
Net cash used in investing activities (16,299) (15,379)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under line-of-
credit 4,091 -
Long-term debt repayments (2,287) (403)
Dividends paid - common shareholders (1,842) (1,829)
Dividends paid - minority interest
shareholders (847) (1,149)
Stock option and other exercise proceeds 918 145
---------- ----------
Net cash provided by (used in) financing
activities 33 (3,236)
---------- ----------
Effect of exchange rates on cash and cash
equivalents 140 180
---------- ----------
Net change in cash and cash equivalents (6,166) (15,502)
Cash and cash equivalents, beginning of period 12,580 49,462
---------- ----------
Cash and cash equivalents, end of period $ 6,414 $ 33,960
========== ==========
ACTION PERFORMANCE COMPANIES, INC.
Unaudited Schedule of Net Sales by Channel
Three and Six Months Ended March 31, 2005 and 2004
(in thousands)
Three Months Ended Six Months Ended
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Domestic Die-cast:
Wholesale distribution
and promotion $ 11,846 $ 12,098 $ 24,154 $ 23,929
Wholesale to mass-
merchant retailers 7,829 13,659 25,367 31,495
Retail through
collector's catalog
club 4,098 4,145 7,869 8,049
---------- ---------- ---------- ----------
Total domestic
die-cast 23,773 29,902 57,390 63,473
Foreign Die-cast -
wholesale distribution and
promotion 9,767 9,000 20,100 18,437
---------- ---------- ---------- ----------
Total die-cast 33,540 38,902 77,490 81,910
---------- ---------- ---------- ----------
Domestic Apparel and
Memorabilia:
Wholesale distribution
and promotion 17,721 21,430 31,390 34,683
Wholesale to mass-
merchant retailers 12,737 11,427 21,759 19,717
---------- ---------- ---------- ----------
Total apparel and
memorabilia 30,458 32,857 53,149 54,400
---------- ---------- ---------- ----------
Retail at Trackside 10,364 10,826 18,983 16,922
Royalties and Other 964 1,011 1,758 1,571
---------- ---------- ---------- ----------
Net Sales $ 75,326 $ 83,596 $ 151,380 $ 154,803
========== ========== ========== ==========
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