DAYTONA BEACH, Fla., CHARLOTTE, N.C. and TEMPE, Ariz., Aug. 30
/PRNewswire-FirstCall/ -- International Speedway Corporation
(NASDAQ:ISCA) (OTC:ISCB) (BULLETIN BOARD: ISCB) ("ISC"), Speedway
Motorsports Incorporated (NYSE: TRK) ("SMI") and Action Performance
Companies Inc. (NYSE:ATN) ("Action") today announced the following:
- ISC and SMI have partnered in a joint venture, which will conduct
business under the name Motorsports Authentics, to create a leader
in the production, marketing and sales of motorsports licensed
merchandise, including apparel and souvenirs. Motorsports
Authentics will operate as an independent company with ISC and SMI
as equal owners. - Motorsports Authentics has entered into a
definitive agreement to purchase Action for $13 per common share,
or approximately $245 million, in cash. The acquisition is
structured as a merger of a wholly-owned subsidiary of Motorsports
Authentics into Action, and the surviving entity will be operated
by Motorsports Authentics. The acquisition is expected to close by
calendar year-end, and is subject to several conditions including
Action shareholder approval, regulatory approvals required under
the Hart-Scott-Rodino Act, consents and certificates from certain
counterparties to Action's material contracts as well as the lack
of any material adverse event to Action's business. Strategic
Rationale Action is the leader in design, promotion, marketing and
distribution of licensed merchandise. Its products include a broad
range of motorsports- related die-cast replica collectibles,
apparel, gifts and other memorabilia. Approximately 70 percent of
the company's 2004 product sales related to NASCAR due to its
license agreements with many of the sport's top teams and drivers.
In addition, Action designs and sells products relating to other
motorsports including the National Hot Rod Association, Formula One
and Indy Racing League. Action also has licenses to manufacture
apparel and memorabilia for the National Basketball Association,
Major League Baseball, and multiple other branded organizations.
Action markets collectible die-cast products under the names Action
Racing Collectibles, RCCA, Winner's Circle, AP, Muscle Machines,
Brookfield Collector's Guild and Minichamps. Action's brands for
licensed apparel, gifts and other memorabilia include Chase
Authentics, Trevco and Winner's Circle. Action currently markets
its products primarily through a combination of mass retail,
domestic wholesale, trackside, international and collector's club.
Lesa France Kennedy, President of ISC, stated, "As part of
Motorsports Authentics, we believe Action has significant long-term
potential for generating positive cash flow and earnings. We plan
to leverage the extensive relationships and marketing expertise of
both ISC and SMI to make this a successful venture. From a
trackside sales perspective, ISC and SMI each promote a significant
number of events in NASCAR's three national touring series
including the NASCAR NEXTEL Cup schedule. As such, we believe we
can capitalize on financial and operating synergies by approaching
merchandise operations as a combined entity through Motorsports
Authentics. Further, through the continued execution of its
initiatives to improve financial performance, we believe that
Action will be better positioned to capitalize on the continued
growth in the popularity of NASCAR and other forms of motorsports."
"We believe it is strategically important for NASCAR and other
motorsports to have strong, well-run companies designing, marketing
and distributing racing merchandise," commented Mr. Bruton Smith,
Chairman and Chief Executive Officer of Speedway Motorsports.
"Licensed product is a significant segment of the industry that has
historically not been optimized. Motorsports Authentics will
integrate the intellectual property rights of a significant number
of NASCAR's premier teams, drivers and tracks into a cohesive
long-term merchandising strategy. It is our goal to ensure that our
products are properly marketed through key distribution channels,
which will help promote NASCAR and other motorsports while creating
natural business synergies, particularly during event weekends."
Operating Strategy A four-member management committee will oversee
the operations of Motorsports Authentics. The committee will be
comprised of Ms. France Kennedy; John Saunders, Executive Vice
President and Chief Operating Officer for ISC; Marcus Smith,
Executive Vice President of National Sales and Marketing for SMI;
and Mark Gambill, an SMI Board of Director member since 1995. In
addition, an integration team comprised of top ISC, SMI and Action
management will complement Action's existing team of outstanding
employees at all levels of the organization. Fred Wagenhals,
President and CEO of Action; David Riddiford, Action's Chief
Financial Officer; and Melodee Volosin, Action's Chief Operating
Officer, are expected to remain in key roles in the new company as
they have significant knowledge and are viewed as important
resources to the integration and restructuring of the business.
Herb Baum, recently appointed as Executive Chairman of Action
Performance, will not remain with the company after closing.
Motorsports Authentics will continue to execute Action's plans to
return its business to profitability. Action has recently announced
plans to improve its financial performance, including optimizing
the production, marketing and distribution of its die-cast and
other products, divesting or discontinuing non-core businesses,
controlling expenditures and expanding its traditional retail
channels through the consolidation of certain functions. Action
recently announced a restructuring of its wholesale NASCAR die-cast
distribution to a direct-to-retail model. Under this strategy, the
company's existing Charlotte, North Carolina operations, which
currently manages wholesale apparel operations, would also handle
fulfillment for wholesale NASCAR die-cast and apparel effective
October 3, 2005. A call center is being added at that facility to
handle order processing and customer service. These initiatives are
expected to benefit the business through a lower cost structure,
improved speed to market, and earlier awareness of consumer trends,
preferences and buying habits. "This transaction represents the
best strategic option for our business," said Mr. Wagenhals. "Under
the leadership and guidance of Motorsports Authentics' management
committee and a strong integration team, the business should be
able to more rapidly execute its turn around strategy, return to
profitability and capitalize on future growth opportunities. I look
forward to focusing my efforts on further strengthening the
relationships with our licensors and distributors, and contributing
to the future success of Motorsports Authentics." Financial Impact
Upon closing, both ISC and SMI expect to record equity investments,
with each representing 50 percent of the total net consideration
paid for the outstanding shares of Action. The entity will be
self-sustaining and it is expected both ISC and SMI will record
results of Motorsports Authentics as an equity investment. From an
earnings perspective, as the transaction is not expected to close
until late in the calendar year, it is expected to minimally impact
the financial results of Motorsports Authentics for 2005. Wachovia
Securities acted as financial advisors for ISC and SMI, and
SunTrust Robinson Humphrey acted as financial advisors to Action in
connection with the transaction. Conference Call The executive
management teams of ISC, SMI and Action will host a conference call
today with investors at 11:00 a.m. Eastern Time. To participate,
dial toll free 888-693-3477 five to ten minutes prior to the
scheduled start time and request to be connected to the Motorsports
Authentics call. A live Webcast of the call can be accessed at
http://www.iscmotorsports.com/,
http://www.speedwaymotorsports.com/, and
http://www.action-performance.com/. A replay will be available one
hour after the end of the call through midnight Friday, September
9, 2005. To access, dial toll free 877-519-4471 and enter the code
6434798, or visit the Web sites referenced above. About ISC
International Speedway Corporation is a leading promoter of
motorsports activities in the United States, currently promoting
more than 100 racing events annually as well as numerous other
motorsports-related activities. The Company owns and/or operates 11
of the nation's major motorsports entertainment facilities,
including Daytona International Speedway in Florida (home of the
Daytona 500); Talladega Superspeedway in Alabama; Michigan
International Speedway located outside Detroit; Richmond
International Raceway in Virginia; California Speedway near Los
Angeles; Kansas Speedway in Kansas City, Kansas; Phoenix
International Raceway in Arizona; Homestead-Miami Speedway in
Florida; Martinsville Speedway in Virginia; Darlington Raceway in
South Carolina; Watkins Glen International in New York. Other
motorsports entertainment facility ownership includes an indirect
37.5% interest in Raceway Associates, LLC, which owns and operates
Chicagoland Speedway and Route 66 Raceway near Chicago, Illinois.
The Company also owns and operates MRN Radio, a leading independent
sports radio network; DAYTONA USA, the "Ultimate Motorsports
Attraction" and official attraction of NASCAR; and subsidiaries
which provide catering services, food and beverage concessions, and
produce and market motorsports-related merchandise under the trade
name "Americrown." About SMI Speedway Motorsports is a leading
marketer and promoter of motorsports entertainment in the United
States. The Company owns and operates the following premier
facilities: Atlanta Motor Speedway, Bristol Motor Speedway,
Infineon Raceway, Las Vegas Motor Speedway, Lowe's Motor Speedway
and Texas Motor Speedway. The Company provides souvenir
merchandising services through its SMI Properties subsidiaries, and
manufactures and distributes smaller- scale, modified racing cars
through its 600 Racing subsidiary. The Company also owns
Performance Racing Network, which broadcasts syndicated motorsports
programming to over 710 radio stations nationwide. For more
information, visit the Company's Website at
http://www.speedwaymotorsports.com/. About Action 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 collectibles, apparel,
souvenirs and other sports-inspired 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 and department stores, specialty dealers
and select online retailers. For more information about Action
Performance and its many subsidiaries, please visit the Company's
corporate Web site at http://www.action-performance.com/.
Additional Information and Where to Find It Action Performance has
agreed to file a proxy statement in connection with the proposed
Merger and related transactions. Action Performance will mail the
proxy statement to its stockholders. The proxy statement will
contain important information about the transaction, and Action
Performance's stockholders are urged to read the proxy statement
and other relevant materials when they become available. Investors
and security holders may obtain free copies of these documents
(when they are available) and other documents filed with the
Securities and Exchange Commission (the "SEC") at the SEC's web
site at http://www.sec.gov/. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC
by Action Performance by going to Action Performance's investor
relations page on its corporate website at
http://www.action-performance.com/ or by contacting David Riddiford
at Action Performance at 1480 South Hohokam Drive, Tempe, Arizona,
85281 or by phone at (602) 337-3700. Information regarding the
identity of the persons who may, under SEC rules, be deemed to be
participants in the solicitation of stockholders of Action
Performance in connection with the transaction, and their interests
in the solicitation, will be set forth in a proxy statement that
will be filed by Action Performance with the SEC. This press
release contains forward-looking statements regarding the parties
to the transactions described in this release, including statements
regarding Action Performance's anticipated financial results, the
results of its restructuring and the proposed transaction with ISC,
SMI and their related entities. Forward-looking statements are not
guarantees of future performance and involve certain risks and
uncertainties, including the risks and uncertainties detailed from
time to time in the parties' filings with the Securities and
Exchange Commission. In addition, the statements regarding the
consummation of the transaction discussed in this release are
subject to risks that the conditions to the transaction will not be
satisfied, including the risk that regulatory approvals will not be
obtained, and that the definitive agreement will be terminated
prior to closing. In the case of Action Performance, such risks
include potential adverse impacts on its results of operations,
financial condition and cash flows that may arise from the
announcement of the proposed transaction, as well as the potential
adverse impact on its ability to attract and retain customers,
management and employees. The parties have incurred and will
continue to incur significant advisory fees and legal and other
expenses relating to the transaction. Although the parties believe
that the expectations reflected in such forward- looking statements
are reasonable, they cannot give any assurances that these
expectations will prove to be correct. The parties disclaim any
duty to publicly update or revise any forward-looking statements
regarding the matters discussed in this release, whether as a
result of new information, future events or otherwise. Action
Performance further disclaims any responsibility for
forward-looking statements or other statements made in this release
concerning the other parties to the proposed transaction, including
ISC, SMI and their related entities, and/or to any descriptions
contained in this release concerning their proposed joint venture.
Information about a party has been provided exclusively by that
party or, in the case of Motorsports Authentics, its members.
Action Performance Companies Inc. DATASOURCE: International
Speedway Corporation; Speedway Motorsports Incorporated; CONTACT:
For International Speedway: Wes Harris, Senior Director, Investor
Relations, +1-386-947-6465; For Speedway Motorsports: Lauri Wilks,
VP, Communications and General Counsel, +1-704-455-3239; For Action
Performance: David Riddiford, Chief Financial Officer,
+1-602-337-3999 Web site: http://www.iscmotorsports.com/
http://www.speedwaymotorsports.com/
http://www.action-performance.com/
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