Collegiate Pacific reported Q1 fiscal 2005 results for the three month period ended Sept. 30, 2004. Net Sales were up 364% to $27.7 million vs. $5.9 million during Q1 last year. Operating Profit was up 655% to $3.4 million vs. $0.5 million during Q1 last year. Net Income was up 669% to $2.07 million vs. $0.3 million during Q1 last year, and Diluted EPS was 21 cents vs. 5 cents during Q1 last year on 74% more shares outstanding)
In discussing the quarter and earnings, Michael Blumenfeld, CEO,
stated, “The integration of our newly acquired properties coupled with
solid organic growth produced net sales beyond our expectations, and
significant earnings leverage for our first quarter of fiscal 2005.
The Company experienced strength across all operating entities and in
fact produced more net income in Q1 2005 than the Company produced
during all four quarters of FY04. These results are a tribute to our
newly acquired partners and existing staff — all of whom shared in
achieving these outstanding results.
“Given the operating platform now in place and the results
achieved, we will move to secure new properties and corporate
relationships somewhat faster than originally planned. We will seek
those operations that either strengthen our proprietary product mix or
add to our geographic reach with respect to sales force and
distribution. We intend to target only those entities that can achieve
the earnings accretion we are currently enjoying with our recent
acquisitions and internal business units. Several potential candidates
are under review. Our goal is to essentially double the size of our
revenue base to approximately $200 million with an accelerated
contribution to earnings.
“Our balance sheet remains one of the strongest in the sports
equipment industry with approximately $43 million in shareholder
equity and working capital of $21 million. Despite the dramatic
increase in revenues, the Company has maintained a near debt free
structure; providing us the financial flexibility to move quickly and
efficiently when opportunities present themselves.”
Adam Blumenfeld, President, commented: “We are extremely pleased
with the performance of the 120 new road sales professionals, and our
ability to effectively train the team and integrate the selling
platform. Our training focus will now shift from Football to Baseball
as we head into the January – June time frame. We welcome the
opportunity of moving these newly acquired sales teams from their
strong suit — football — into Collegiate Pacific's strongest sport
category — baseball — over the next six to nine months. We have
engaged in an intensive education program with the Dixie, Kessler and
Tomark teams and preparation is ongoing. We will continue to invest in
high quality personnel and other platform-building activities to
support this sales force initiative, as we build a long term
foundation for what we consider to be a rapidly developing growth
opportunity.”
Discussion of Financial and Operating Results
Collegiate Pacific grew net sales 364% to $27.7 million, driven
primarily by the businesses we acquired during fiscal 2004 and the
first quarter of fiscal 2005. The growth in our existing catalog
operations and consolidated organic growth also contributed to the
growth in net sales. The Company envisions as part of its strategic,
long term planning, that future sales growth will be shared with the
newly acquired sales force, which the Company believes will result in
enhanced account penetration and retention. Operating profit increased
to $3.4 million, benefiting from higher net sales, partially offset by
higher selling, general and administrative expenses. Net income grew
by 669% to $2.07 million, 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
September 30,
------------------------
2004 2003
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Net sales $27,710,288 $5,973,592
Cost of sales 18,317,237 3,725,352
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Gross profit 9,393,051 2,248,240
Selling, general and administrative expenses 5,876,714 1,781,180
Amortization expense 82,100 12,266
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Operating profit 3,434,237 454,794
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Other income (expense):
Interest income 15,445 --
Interest expense (6,856) (10,718)
Other 49,379 278
------------ -----------
Total other income (expense) 57,968 (10,440)
------------ -----------
Income before income taxes 3,492,205 444,354
Provision for income taxes 1,420,330 175,062
------------ -----------
Net income $2,071,875 $269,292
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Weighted average number of shares
outstanding:
Basic 9,908,227 4,290,603
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Diluted 10,102,793 5,779,308
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Net income per share common stock -- basic $0.21 $0.06
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Net income per share common stock -- diluted $0.21 $0.05
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