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Action Performance Reports First Quarter 2005 Results;
Announces New Distribution Model
PHOENIX(BUSINESS WIRE) February 8 , 2005 Action Performance Companies, Inc. (NYSE:ATN - News), the leader in the design, marketing, promotion, and distribution of licensed motorsports merchandise, today announced financial results for the fiscal first quarter ended December 31, 2004. For the quarter, the company reported revenues of $76.1 million compared with $71.2 million in the prior year, an increase of 6.8%. Revenue growth in the quarter reflected improvements in trackside retail sales resulting from an additional race, as well as improved consumer demand at the racetracks. Apparel sales to wholesale and mass merchants also contributed to the growth in revenues.
The Company reported a net loss of $3.5 million, or $0.19 per share, compared with a net loss of $1.7 million, or $0.09 in first quarter of 2004. Included in the net loss for the first quarter of 2005 is an after-tax charge of $1.5 million for an allowance for uncollectible distributor receivables, an after-tax loss of $1.3 million from the Jeff Hamilton subsidiary and an after-tax charge of $0.3 million in severance expense. The net loss in the comparable period included after-tax charges of $1.0 million.
After a thorough review of Actions business that was initiated in the fiscal fourth quarter of 2004, the Company concluded that it is necessary to restructure its channels of distribution for its domestic wholesale die-cast business. To that end, the Company intends to change from a network of distributors that it currently uses and distribute directly to retail dealers utilizing one or two fulfillment partners. While the process will take 8-12 months to fully complete, we believe it will afford the Company greater margin opportunities and visibility into its business.
Fred Wagenhals, Chief Executive Officer stated, We are committed to restoring improved profitability at Action Performance. Streamlining our distribution is critical to executing successfully on the Companys turnaround plans. The sale of our products direct to retail should enable Action to produce a more focused product line, increase our distribution and better control inventory and costs resulting in improved profitability and return on investment.
About Action Performance
Action Performance Companies Inc. (NYSE:ATN News) is the leader in the design, promotion, marketing and distribution of licensed motorsports merchandise. The Companys products include a broad range of motorsports-related die-cast replica collectibles, apparel, souvenirs and other memorabilia. 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, QVC, goracing.com, trackside at racing events, direct corporate promotions, mass retail, department stores, and specialty dealers. Additional information about Action Performance can be found at http://www.action-performance.com/.
The following information was filed by Action Performance Companies Inc on Tuesday, February 8, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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