Collegiate Pacific Looks to Acquisitions to Post Fiscal Q2 Profit

Collegiate Pacific reported that net sales for the 000 second fiscal quarter ended December 31, 2004 increased 461% to $23.8 million from $4.2 million in the year-ago period. Net income for the period was $581,000, or 6 cents per diluted share, versus a net loss of $203,000, or a loss pf 4 cents per diluted share, in fiscal Q2 last year.

In discussing the quarter, Michael Blumenfeld, CEO, stated “We continue to benefit from the impact of recent acquisitions and the organic growth of our core business. We are making significant investments in training our new 150 man sales force and consolidating as many of the operating expenses as possible. This process, when complete, will offer many years of increased productivity.

“We believe our current financial position remains one of the strongest in the sporting goods industry with over $40 million in cash and a current ratio of 7:1. We intend to continue to seek accretive acquisitions and corporate relationships and to deploy our cash as efficiently as possible for the benefit of our shareholders.”

Collegiate Pacific grew net sales 461% to $23.8 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 second fiscal quarter to direct some of our traditional catalog customers to our newly acquired team dealers, 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 with our newly acquired road sales team, it will result in growth in net sales through greater account penetration and retention. Operating profit increased to $1.2 million, benefiting from higher net sales, partially offset by higher selling, general and administrative expenses. Net income grew by 386% to $581 thousand, driven primarily by higher net sales and a decrease in selling, general and administrative expenses as a percentage of net sales, all of which was offset by the increase in income tax expense.

              COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                              (Unaudited)

                       Three Months Ended        Six Months Ended
                          December 31,             December 31,
                    ------------------------ -------------------------
                       2004         2003        2004         2003
                    ------------ ----------- ------------ ------------

Net sales           $23,794,598  $4,238,444  $51,504,886  $10,212,036
Cost of sales        15,884,544   2,718,844   34,201,781    6,444,195
                    ------------ ----------- ------------ ------------

  Gross profit        7,910,054   1,519,600   17,303,105    3,767,841

Selling, general
 and administrative
 expenses             6,618,053   1,812,475   12,494,767    3,593,654
Amortization
 expense                 92,429      12,266      174,529       24,533
                    ------------ ----------- ------------ ------------

  Operating profit
   (loss)             1,199,572    (305,141)   4,633,809      149,654
                    ------------ ----------- ------------ ------------

Other income
 (expense):
     Interest
      income             42,999          --       58,444           --
     Interest
      expense          (334,663)    (13,143)    (341,519)     (23,861)
     Other               71,184       9,992      120,563       10,269
                    ------------ ----------- ------------ ------------

  Total other
   income (expense)    (220,480)     (3,151)    (162,512)     (13,592)
                    ------------ ----------- ------------ ------------

  Income (loss)
   before income
   taxes                979,092    (308,292)   4,471,297      136,062

Provision for
 income taxes           397,945    (105,068)   1,818,275       69,994
                    ------------ ----------- ------------ ------------

  Net income (loss)    $581,147   $(203,224)  $2,653,022      $66,068
                    ============ =========== ============ ============

Net income (loss)
 per share common
 stock - basic            $0.06      $(0.04)       $0.27        $0.01
                    ============ =========== ============ ============
Net income (loss)
 per share common
 stock - diluted          $0.06      $(0.04)       $0.26        $0.01