Collegiate Pacific grew net sales 142% to $27.0 million, in large part due to the acquisitions they completed during fiscal 2004 and the first two quarters of fiscal 2005. The company continued its efforts during the third fiscal quarter to direct some of its traditional catalog customers to the road sales team, which contributed to additional sales growth. The company believes that if it can successfully service some of the catalog customers in specific regions of the United States with its 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 by the road sales team. Collegiate Pacific historically has recognized higher gross profit margins from the sales of sporting goods and equipment than it has 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 believes this trend will continue as it completes field training efforts with the road sales team and recognizes the results of those efforts in the form of increased sales of proprietary sporting goods and equipment products by the 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.

Michael J. Blumenfeld, chairman and CEO commented: “We are pleased to report these results for the quarter. Producing a 33% increase in quarterly operating profits – despite absorbing the start-up, training and operating expenses from 30 newly acquired road salesmen inherited during the seasonal low point of their earnings and sales contribution – is most gratifying. Our rapidly expanding sales force is strongest during the July – December 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 – June seasonality. Future earnings and sales patterns will continue to reflect this shift.”

“Fully diluted EPS of 8 cents for the quarter included approximately 5 cents in quarterly EPS dilution as a result of the interest expense from our recent convertible debt offering. Fully diluted EPS would have been approximately 13 cents 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 cents and 50 – 56 cents per fully diluted share, respectively. This guidance assumes no application of proceeds from the recent convertible debt offering, thus assumes the full dilutive effects of the bond debt of approximately 5 cents 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, 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 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 and the breadth of product supplied through the selling channels.” 

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
                   ============ ============ ============ ============