Collegiate Pacific reported revenues for its fiscal year 2003 rose 25% to $21 million while net income jumped 56% to $1.2 million, or 30 cents per diluted share.
Michael Blumenfeld, CEO, in discussing the results, stated, “Virtually every comparative number – revenues, net income and net income per share – all set annual records for the Company. As mentioned in previous reports, operating and net income were about evenly impacted with increases in marketing expenses and tax benefits. The initial revenue results for July and August reflect a continued strong demand for our products with revenues running ahead of our projected growth targets. We continue to design, manufacture and distribute products to over 35,000 current customers and continue to add new customers at a rate of 500 – 700 each month. We remain focused on designing and marketing a variety of products that generates premium margins and increased customer demand.
“We believe our operating and financial performance will act as a launching pad for expanded results in the years ahead. Our internal, 3-year projections call for organic revenues to rise approximately 20-25% annually and to produce percentage increases in operating income substantially in excess of the revenue growth rate. Currently we are projecting that revenues for the 2004-2006 periods will be approximately $26 million, $31 million and $37 million, respectively, which would produce basic net income per share of approximately $.32, $.50 and $.70, respectively. The Company has utilized all of its tax loss carry-forwards and all future net income will be fully taxable at the applicable corporate rates.
“We maintain an ongoing dialogue with a number of acquisition candidates. We have reviewed financial information and remain actively interested in a number of these targets. The business seasonality of most companies in our industry is similar to that of Collegiate Pacific's. Due to such seasonality, the date on which we close any acquisition could have a disproportionate impact on our net income. We would expect that strategic acquisitions would add to the growth in revenues, net income and net income per share.
“We remain committed to the specific and immediate goal of doubling our current revenues through a combination of organic growth and external growth. We are currently in discussion with Merrill Lynch for a new long-term credit facility. This facility would replace our existing line of credit that expires in July 2004 and could include a separate line of credit to be used to finance future acquisitions. Although no definitive agreements have been signed, we hope to have the new line in place by the end of the year.”
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
2003 2002
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Net sales $21,075,893 $16,901,125
Cost of sales 13,268,532 10,654,442
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Gross profit 7,807,361 6,246,683
Selling, general and administrative expenses 6,839,005 5,307,390
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Operating profit 968,356 939,293
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Other income (expense):
Interest expense (84,525) (140,888)
Interest income 3,200 63
Miscellaneous 17,186 7,020
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Total other expense (64,139) (133,805)
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Income before provision for income taxes 904,217 805,488
Income tax benefit (349,632) --
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Net income $ 1,253,849 $ 805,488
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Weighted average shares of common stock
outstanding - basic 4,225,784 4,225,213
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Weighted average shares of common stock
outstanding - diluted 4,669,574 4,669,008
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Net income per share of common stock -
basic $ 0.30 $ 0.19
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Net income per share of common stock -
diluted $ 0.27 $ 0.17
