Collegiate Pacific Reports Q3 Earnings Per Share of $.08 and Re-Affirms Guidance; Gross Profit Margins exceed 35% for the Third Quarter; Net Sales up 142% to $27.0 Million vs. $11.2 Million, Backlogs Up.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- Collegiate col·le·giate adj. 1. Of, relating to, or held to resemble a college. 2. Of, for, or typical of college students. 3. Of or relating to a collegiate church. Pacific Inc. (AMEX AMEX See: American Stock Exchange :BOO): Company Re-Affirms FY05, FY06 Guidance The Company will host a conference call today, at 10:00AM CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. , to discuss the Quarter and future plans. The call may be accessed by dialing 1-866-800-8652 and using participant code 34795846. A replay of the call will be available for 30 days by calling 1-888-286-8010 and entering passcode 56606244. Collegiate Pacific Inc. (AMEX:BOO) today reported results for its third fiscal quarter ended March 31, 2005. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. Blumenfeld Blumenfeld is a surname and may refer to:
Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. - despite absorbing the start-up Start-up The earliest stage of a new business venture. , training and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from 30 newly acquired road salesmen inherited inherited received by inheritance. inherited achondroplastic dwarfism see achondroplastic dwarfism. inherited combined immunodeficiency see combined immune deficiency syndrome (disease). during the seasonal low point of their earnings and sales contribution - is most gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. . Our rapidly expanding sales force is strongest during the July July: see month. - December December: see month. time frame, and future sales force additions will serve to further strengthen this season. This is a significant shift from Collegiate Pacific's traditional January January: see month. - June seasonality. Future earnings and sales patterns will continue to reflect this shift." "Fully Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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 $.08 for the quarter included approximately $.05 in quarterly EPS dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. as a result of the interest expense from our recent convertible debt offering. Fully Diluted EPS would have been approximately $.13 without this effect. We continue to review a number of acquisition and joint-venture candidates as we seek to deploy proceeds from the convertible debt offering. We maintain strict acquisition criteria and believe that in an environment of rising interest rates such an approach will prove valuable for shareholders. The Salkeld Team Sports acquisition remains on pace, with closing anticipated during the month of May. Salkeld will add 15 experienced salesmen to our platform, and strengthens the Company's presence in the Midwestern USA." "The Company today is reiterating its FY05 and FY06 earnings guidance of $.40 - $.42 and $.50 - $.56 per fully diluted share, respectively. This guidance assumes no application of proceeds from the recent convertible debt offering, thus assumes the full dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the bond debt of approximately $.05 per quarter. The Company continues to review acquisition targets and intends to put the capital to work as conditions merit." Adam Blumenfeld, President, commented on the quarter: "We are extremely pleased with the operating results for the quarter, and progress year to date. Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. , up approximately 180 basis points sequentially from the second to third quarters at 35.07%, is a testament to ongoing field training efforts and the effective sell through of Collegiate Pacific proprietary equipment by our road sales team. Sales backlogs as of March 31, 2005 were up 18%, $9.5M vs. $8.1M, over the comparative FY2004 period, on an "apples to apples" basis. This, in combination with an attractive slate of new products and programs for FY06 has management optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op regarding prospects for our internal sales growth. We continue to prepare the operating platform to support a materially larger and more profitable enterprise, as the Company looks to expand both its geographic footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. and the breadth of product supplied through the selling channels." Discussion of Financial and Operating Results Collegiate Pacific grew net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight 142% to $27.0 million, in large part due to the acquisitions we completed during fiscal 2004 and the first two quarters of fiscal 2005. We continued our efforts during the third fiscal quarter to direct some of our traditional catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. customers to our road sales team, which contributed to their additional sales growth. We believe that if we can successfully service some of our catalog customers in specific regions of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. with our road sales team, it will result in growth in net sales through greater account penetration and retention. For comparative periods, gross profit margins were down, as expected, as a percentage of sales from 37% to 35%, due to the sales of soft good athletic apparel and footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). by our road sales team. We historically have recognized higher gross profit margins from our sales of sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport and equipment than we have from the sale of soft good athletic apparel and footwear. However, the Company experienced an increase in its gross profit margins from the second to the third quarters of this fiscal year and believe this trend will continue as we complete our field training efforts with our road sales team and recognize the results of those efforts in the form of increased sales of our proprietary sporting goods and equipment products by our road sales team. Operating profit increased to $2.0 million, benefiting from higher net sales and increased gross profit margins, partially offset by higher selling, general and administrative expenses. Net income decreased to $788 thousand, driven primarily by interest expense on the convertible debt.
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2005 2004
------------- -------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $41,008,491 $7,473,145
Accounts receivable, net of allowance
for doubtful accounts of $953,122
and $635,531, respectively 19,153,911 10,683,860
Inventories 15,287,716 9,214,063
Current portion of deferred taxes 149,414 149,414
Prepaid income taxes 511,594 --
Prepaid expenses and other current
assets 1,813,186 496,912
------------- -------------
Total current assets 77,924,312 28,017,394
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $1,165,435 and $870,394,
respectively 1,346,555 831,205
DEFERRED DEBT ISSUANCE COSTS, net of
accumulated amortization of $222,784 and
$0, respectively 3,155,522 --
INTANGIBLE ASSETS, net of accumulated
amortization of $543,337 and $346,238,
respectively 254,502 429,833
GOODWILL 23,899,199 17,308,487
DEFERRED INCOME TAXES 100,812 100,812
OTHER ASSETS 242,533 259,012
------------- -------------
Total assets $106,923,435 $46,946,743
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $7,848,026 $4,983,603
Accrued liabilities 1,828,863 1,283,553
Dividends payable 254,919 247,128
Accrued interest 988,681 --
Current portion of long-term debt 271,067 124,800
Income taxes payable -- 700,850
------------- -------------
Total current liabilities 11,191,556 7,339,934
REDEEMABLE COMMON STOCK (see Note 2) -- 7,250,000
LONG-TERM DEBT 50,374,415 73,200
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value,
1,000,000 shares authorized; no
shares issued -- --
Common stock, $0.01 par value,
50,000,000 shares authorized;
10,196,780 and 9,884,142 shares
issued and 10,110,754 and 9,798,116
shares outstanding, respectively 101,968 98,842
Additional paid-in capital 41,857,822 31,469,423
Retained earnings 4,055,125 1,372,795
Treasury stock at cost, 86,026
shares, respectively (657,451) (657,451)
------------- -------------
Total stockholders' equity 45,357,464 32,283,609
------------- -------------
Total liabilities and
stockholders' equity $106,923,435 $46,946,743
============= =============
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net sales $27,018,429 $11,153,919 $78,523,315 $21,365,956
Cost of sales 17,544,088 7,014,007 51,745,869 13,458,203
------------ ------------ ------------ ------------
Gross profit 9,474,341 4,139,912 26,777,446 7,907,753
Selling, general
and
administrative
expenses 7,469,843 2,629,437 19,964,610 6,223,091
Amortization
expense 14,755 12,266 189,284 36,799
------------ ------------ ------------ ------------
Operating
profit 1,989,743 1,498,209 6,623,552 1,647,863
------------ ------------ ------------ ------------
Other income
(expense):
Interest income 179,288 6,210 237,732 15,484
Interest expense (899,372) (4,823) (1,240,891) (28,684)
Other 32,774 1,435 153,338 2,430
------------ ------------ ------------ ------------
Total other
income
(expense) (687,310) 2,822 (849,821) (10,770)
------------ ------------ ------------ ------------
Income before
income taxes 1,302,433 1,501,031 5,773,731 1,637,093
Provision for
income taxes 514,772 606,336 2,333,047 676,330
------------ ------------ ------------ ------------
Net income $787,661 $894,695 $3,440,684 $960,763
============ ============ ============ ============
Weighted average
number of shares
outstanding:
Basic 10,094,747 6,516,430 10,002,640 5,474,477
============ ============ ============ ============
Diluted 10,410,933 7,957,793 10,277,970 6,909,524
============ ============ ============ ============
Net income (loss)
per share common
stock - basic $0.08 $0.14 $0.34 $0.18
============ ============ ============ ============
Net income (loss)
per share common
stock - diluted $0.08 $0.11 $0.33 $0.14
============ ============ ============ ============
Collegiate Pacific is the nation's fastest growing manufacturer and supplier of sports equipment primarily to the institutional and team dealer markets. The Company offers more than 4,500 products to 300,000 prospective and existing customers. The Company distributes approximately 1.5 million catalogs annually and employs approximately 150 professional road salesmen. 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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements include statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Collegiate Pacific's anticipated financial performance, business prospects, new developments and similar matters, and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," or similar expressions. These forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that are difficult to predict. Actual results may differ materially from those suggested by the forward-looking statements due to a variety of factors, including changes in business, political, and economic conditions due to the threat of future terrorist activity or otherwise, actions and initiatives by current and potential competitors, and certain other additional factors described in Collegiate Pacific's filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on Collegiate Pacific's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Collegiate Pacific is not under any obligation and does not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized. |
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