Collegiate Pacific Acquires Majority Interest in Sport Supply Group, Inc.
05 Julho 2005 - 9:12AM
Business Wire
Collegiate Pacific, Inc (AMEX:BOO): -- Raising FY06 Consolidated
Revenue Guidance to $220-230M -- Accretive to FY06 Earnings; EBITDA
of $15-20 Million -- Substantial Asset Base now under BOO
Managerial Umbrella The Company will host a conference call to
discuss this important development at 10:00 a.m. CDT Tuesday, July
5. To access the call, participants may dial 800-901-5247, and
passcode 8807387. A replay of the call will be available by calling
888-286-8010 and passcode 21633299. Collegiate Pacific, Inc
(AMEX:BOO) today announced it has acquired a majority stake (53.2%)
in Sport Supply Group, Inc (SSPY.PK) "SSG" from Emerson Radio
(AMEX:MSN) of Parsippany, N.J. for $32 Million in cash. Commenting
on the transaction, Michael J. Blumenfeld, Chairman and CEO of
Collegiate Pacific stated: "We are extremely excited to have
completed the purchase of common stock constituting a majority
interest in Sport Supply Group, Inc. from Emerson Radio. SSG is
poised to become both an immediate and long-term contributor to
Collegiate Pacific's consolidated sales and earnings growth.
Combining BOO management's 500+ cumulative years of marketing,
manufacturing and distribution expertise with SSG's team and
operating assets should yield impressive results. Aligning SSG's
technology and infrastructure with BOO management's rapid growth
model and mindset is a compelling fit. Terrence M. Babilla,
formerly the COO of Sport Supply Group, will retain this position
and take on the added role of President. We welcome Terry as a
valuable member of the team." Mr. Blumenfeld has been elected
Chairman and CEO of Sport Supply Group, replacing Geoffrey P.
Jurick, the Chairman and CEO of Emerson Radio, in that position.
Mr. Blumenfeld continued: "SSG both compliments and supplements
BOO's existing market presence. SSG services formerly untapped
markets for BOO such as the K-6th grade elementary/middle school
markets; the public school bid system; out-of-school private youth
sport leagues, and the Internet for institutional, team and
consumer purchasing. SSG supplements BOO in the varsity recreation
and athletic equipment markets via their strong catalog and web
presence, and formidable marketing and distribution assets. Both
Companies will continue to act as a powerful ally to their
respective domestic branded partners and distributors as we expand
our reach and continue to build BOO's institutional sporting goods
franchise" "SSG's management has proven particularly skillful in
achieving cost cuts and operating efficiencies over the last 12-18
months, as evidenced by recent financial progress: FY05 net sales
rose 7.3% to $90 Million vs. $83.9 Million in FY04. Operating
income improved $6.1 Million to $2.2 Million vs. a FY04 loss of
$3.9 Million -- helped in large part by a $2 Million reduction in
annual operating expenses. Combining SSG management's proficiency
in operations with BOO's historic strength in the sales and
marketing arena should prove valuable to both companies. SSG net
income for the FY05 period was $2.1 Million vs. a FY04 loss of $1.7
Million. (The FY04 loss included a one-time gain of $2.7 Million;
thus net income actually improved by $6.5 Million on an operating
basis for the comparative period). Adam Blumenfeld, President of
Collegiate Pacific, commented further: "This transaction places a
multitude of valuable assets under Collegiate Pacific's managerial
umbrella. Among them: -- Combined customer count of 175,000+ --
Proprietary Customer Lists and Trade Names including MacGregor,
Voit, Champion Barbell Company and Port-a-Pit Track and Field --
Industry-Leading Catalog Brands such as BSN Sports and US Games --
Substantial, Scalable Distribution Platform including a 180,000 sq.
ft. facility located 1/4 mile from Collegiate Pacific Headquarters
-- Substantial Manufacturing assets -- doubling BOO's consolidated
volume for steel and aluminum products -- Robust and Scalable SAP
IT Platform -- Industry-Best Internet Platform powered by SAP --
processed more than 75,000 web orders in FY05 -- Sophisticated
Inbound Call/Telephony Solution for Customer Care and Order
Administration -- Industry-Leading Youth Sports Division --
Government Sales Division; Tripling current BOO market penetration
-- "Distributor" Sales division; Tripling current BOO market
penetration -- Industry leading presence in "Bid" markets;
Substantial Elementary school presence -- 17 Road Sales
Professionals; 187 Total under BOO umbrella "We are raising our
consolidated sales guidance for FY06 (beginning July 1, 2005) to a
range of $220-$230 Million. The transaction will be accretive to
BOO FY06 fully diluted earnings per share. We intend to more fully
discuss specific Sales and EPS guidance for FY06 and beyond in the
next few weeks once estimated costs related to FAS-141 (valuation
related to goodwill and amortization) are more fully evaluated. We
expect FY06 BOO consolidated EBITDA (as defined below) of
approximately $15-$20 Million (excluding any transaction related
costs) -- a byproduct of continued growth from Collegiate Pacific
and contribution from our 53.2% ownership interest in SSG. In
accordance with the purchase method of accounting, Collegiate
Pacific will be effectively reporting 100% of Sport Supply Group's
net sales and 53.2% of their earnings on a go-forward basis."
EBITDA is used to mean earnings before interest, taxes,
depreciation and amortization, which we refer to as EBITDA, and
would be calculated as net income plus (i) interest expense net of
interest income, (ii) income tax provision, and (iii) depreciation,
depletion and amortization. EBITDA should not be considered as an
alternative to net income or operating income as an indication of
our operating performance. EBITDA is not necessarily comparable to
similarly titled measures of other companies. EBITDA is presented
here because it is a widely used financial indicator used by
investors and analysts to measure performance. 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 170
professional road salesmen. Sport Supply Group is a leading direct
marketer and B2B e-commerce supplier of sporting goods and physical
education equipment to the institutional and youth sports market
place. Athletes, coaches and instructors in schools, colleges,
universities, governmental agencies, camps and youth organizations
across the country use our products. Collegiate Pacific (AMEX:BOO)
owns approximately 53% of Sport Supply Group's issued and
outstanding common stock. This press release contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include statements relating to 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 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, the future performance of Sport
Supply Group as a majority-owned subsidiary of Collegiate Pacific
and the ability of Collegiate Pacific to realize benefits from its
purchase of a majority interest in Sport Supply Group, the impact
of costs related to FAS-141 on the accounting for Collegiate
Pacific's purchase, 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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