Action Performance Companies, Inc. is a designer and marketer of licensed motor sports products related to the National Association of Stock Car Auto Racing (NASCAR), including die-cast scaled replicas of motor sports vehicles, apparel and memorabilia. NASCAR is a motor sports sanctioning body in the United States and sanctions the Nextel Cup (formerly Winston Cup) series of stock car races. Action has exclusive license agreements with recognized names in NASCAR. It also designs and sells products relating to other motor sports, including racing sanctioned by the National Hot Rod Association (NHRA), Formula One, the Indy Racing League (IRL), International Race of Champions (IROC) and the World of Outlaws. Action distributes its products through a number of channels, including a network of wholesale distributors, mass-market retailers, mobile trackside stores, the QVC home shopping channel and the Company's members-only collectors' club catalog. The Company focuses on securing long-term license agreements with top motor sports drivers and team owners. These license agreements provide Action with an exclusive right to market certain die-cast, apparel and other products bearing the driver's name, likeness and image for periods ranging from six to 10 years. Action derives approximately 40% of its revenue from sales of licensed die-cast scaled replicas of motor sports vehicles in the collectible and mass-retail markets. In the United States, it markets the Action Racing Collectables, AP, Revell and Brookfield Collector's Guild collectible die-cast brands, primarily through its network of wholesale distributors. It markets the Winner's Circle NASCAR die-cast and Funline brand stylized die-cast products to mass-market retailers and the RCCA brand though its collectors' club, which is managed by QVC. In Germany, Action markets the Minichamps collectible die-cast brand primarily through a worldwide network of wholesale distributors. Action derives approximately 45% of its revenue from sales of licensed apparel, gifts and memorabilia, during the fiscal year ended September 30, 2004 (fiscal 2004). These products are marketed in the United States primarily under the Chase Authentics brand, Trevco brand and Winner's Circle brand. The Company markets the Chase Authentics brand products through wholesale distributors and the Winner's Circle brand products to mass-market retailers. Action derives approximately 15% of its revenue from trackside sales in the United States. It markets the Chase Authentics brand apparel and memorabilia and Action Racing Collectables brand die-cast at mobile trackside stores. Approximately 90% of its trackside sales are derived from the sale of apparel and memorabilia in fiscal 2004. In September 2003, it acquired Funline Merchandise Co., Inc., a distributor of stylized non-NASCAR motor sports die-cast. Funline distributes Muscle Machines, Jesse James WEST COAST CHOPPERS and other die-cast collectible vehicles. Funline distributes its products primarily to the mass-merchant retail market. Most of its apparel that is sold in other distribution channels bears Chase brand marks, including Chase Authentics and a stylized C, which is generally embroidered on the shirt cuff or pocket. NASCAR drivers, including Jeff Gordon, Dale Jarrett, Bobby Labonte, Terry Labonte and Rusty Wallace, have agreed, subject to certain exceptions, to assure that licensed apparel products bearing their names, likeness, or signatures will also bear Chase brand marks. These drivers have also agreed to endorse Chase-branded apparel as the exclusive trackside apparel of the top NASCAR drivers.