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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 AMENDMENT NO.1
ON
 FORM 10-KSB
  þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
 For the transition period from  to
 Commission File No. 0-172923
 COLLEGIATE PACIFIC INC.
  Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
    
    
    
    22-2795073
(I.R.S. Employer Identification No.)13950 Senlac Drive, Suite 100, Dallas, Texas
    
    75234(Address of Principal Executive Offices)
    
    (Zip Code)
 (972) 243-8100   Securities Registered Pursuant to Section 12(b) of the Exchange Act:
 Name of Each ExchangeTitle of Each Class
    
    On Which RegisteredCommon Stock
    
    American Stock Exchange
 Securities Registered Pursuant to Section 12(g) of the Act:
 þ o
 þ
 o þ
    o þ




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EXPLANATORY NOTE
    
    
    the Company increased the value of customer relationships acquired in
connection with its acquisitions of Kesslers Team Sports, Dixie Sporting Goods, Orlando
Team Sports and Salkeld & Sons by approximately $1.9 million, which was originally
allocated to goodwill;
    
    the Company increased the value of inventories acquired in connection with its
acquisitions of Kesslers Team Sports, Dixie Sporting Goods, Orlando Team Sports and
Salkeld & Sons by approximately $650 thousand, which was originally allocated to
goodwill; and
    
    the Company increased the value of contractual backlog acquired in connection
with its acquisitions of Kesslers Team Sports, Dixie Sporting Goods, Orlando Team
Sports and Salkeld & Sons by approximately $200 thousand, which was originally
allocated to goodwill.




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##### 



Collegiate Pacific Inc.
FORM 10-KSB
Fiscal Year Ended June 30, 2005
  PagePART IIItem 6
    
    Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    4Item 7
    
    Financial Statements
    
    
    24Item 8A
    
    Controls and Procedures
    
    
    48PART IIIItem 13
    
    Exhibits, List and Reports on Form 8-K
    
    
    49SIGNATURES
    
    
    
    
    50Consent of Grant Thornton LLPCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certifications of CEO and CFO Pursuant to Section 906
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ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
   Overview
    
    
    Acquiring Dixie Sporting Goods Co., Inc. (Dixie) in July 2004, a leading
supplier of soft goods and sporting goods equipment throughout the Mid-Atlantic region
of the United States, with a road sales force of approximately 50 employees;
    
    Acquiring CMS of Central Florida, Inc. d/b/a Orlando Team Sports (OTS) in
December 2004, a leading supplier of soft goods and sporting goods equipment throughout
the State of Florida and a road sales force of approximately 15 employees;
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
    
    Acquiring Salkeld & Sons, Inc. (Salkeld) in May 2005, a leading supplier of
soft goods and sporting goods equipment throughout the State of Illinois, with a
particular concentration in Chicago and a road sales force of approximately 20
employees;
    
    Balancing the seasonality of its business and strengthening its customer
relationships by acquiring the team dealers discussed above;
    
    Expanding its football and baseball product offerings through the acquisitions
discussed above, which provides the Company with an additional platform for future
growth opportunities; and
    
    Introducing a number of new products during fiscal 2005 as a means to drive
organic growth.
  Matters Affecting Comparability
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Consolidated Results of Operations
  Fiscal 2005 vs. Fiscal 2004Increase/(Decrease)Fiscal 2005
    
    Fiscal 2004
    
    Dollars
    
    Percentage(dollars in thousands, except per share amounts)Net sales
    
    $
    106,339
    
    
    $
    39,562
    
    
    $
    66,777
    
    
    
    168.8
    %Gross profit
    
    
    35,954
    
    
    
    13,956
    
    
    
    21,998
    
    
    
    157.6
    %Operating profit
    
    
    7,303
    
    
    
    2,847
    
    
    
    4,456
    
    
    
    156.5
    %Net income
    
    
    3,601
    
    
    
    1,673
    
    
    
    1,928
    
    
    
    115.2
    %Diluted earnings per share
    
    $
    0.35
    
    
    $
    0.22
    
    
    $
    0.13
    
    
    
    59.1
    %
  Fiscal 2005
    
    Fiscal 2004Gross profit margin
    
    
    33.8
    %
    
    
    35.3
    %Selling, general and administrative expense
    
    
    26.9
    %
    
    
    28.1
    %Operating profit
    
    
    6.8
    %
    
    
    7.2
    %
 Fiscal 2005 Acquisitions and Related Developments
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Fiscal Year Ended June 30, 2005 Compared to Fiscal Year Ended June 30, 2004
 Net Sales.
  Gross Profit.
   ,
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Selling, General and Administrative Expense.
  Operating Profit.
 Interest Expense.
 Income Taxes.
 Net Income.
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Liquidity and Capital Resources
 Cash Flow Activity
  
    
    An increase in accounts receivable of $3.6 million due to the increase in our net
sales during fiscal 2005;
    
    An increase in inventories of $4.3 million due to our build-up of inventory to
support the Companys strongest selling season, which generally occurs during the
months of July through September; and
    
    A decrease in income taxes payable of approximately $1.3 million due to increased
estimated tax payments associated with the increase in the Companys net income for
fiscal 2005.
   
    
    Net proceeds from the sale of the senior notes of $46.6 million after debt
issuance costs of $13.4 million;
    
    Proceeds from the issuance of common stock upon the exercise of options of
approximately $507 thousand;
    
    Net payments on the Companys revolving line of credit and other notes payable of
$294 thousand; and
    
    Payments of dividends of approximately $1.0 million.
  
    
    Proceeds from the issuance of common stock upon the exercise of common stock
warrants and options of approximately $21.3 million;
    
    Repayments on the Companys revolving line of credit of approximately $865 thousand;
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
    
    Payments of dividends of approximately $573 thousand; and
    
    The purchase of treasury shares of approximately $41 thousand.
  Capital Structure and Resources
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Long-Term Financial Obligations and Other Commercial Commitments
  Payments due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 year
    
    
    1 - 3 years
    
    
    4 - 5 years
    
    
    5 years(dollars in thousands)Long-term debt
    
    $
    50,734
    
    
    $
    330
    
    
    $
    296
    
    
    $
    50,108
    
    
    $
    Interest expense on
long-term debt
    
    
    12,708
    
    
    
    2,885
    
    
    
    5,750
    
    
    
    4,073
    
    
    
    Operating leases
    
    
    4,024
    
    
    
    1,347
    
    
    
    2,048
    
    
    
    629
    
    
    
    Total contractual cash
obligations
    
    $
    67,466
    
    
    $
    4,562
    
    
    $
    8,094
    
    
    $
    54,810
    
    
    $
    
  Subsequent Events
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Newly Adopted Accounting Standards
  Critical Accounting Policies
   Inventories.
 Allowance for Doubtful Accounts.
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Long-lived Assets.
 Accounting
for Business Combinations.
 Factors that Could Affect Future Operating Results
  Our success depends upon our ability to develop new, and enhance our existing relationships with,
customers and suppliers.
  
    
    effectively develop new relationships and maintain and deepen existing
relationships with our suppliers, advertisers and customers;
    
    provide products at competitive prices;
    
    respond to competitive developments; and
    
    attract, retain, and motivate qualified personnel.
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Our strategic plan, involving growth through the acquisition of other companies, may not succeed.
  
    
    the difficulties related to assimilating the management, products, personnel,
financial controls and other systems of an acquired business and to integrating
distribution and information systems and other operational capabilities;
    
    the difficulties related to combining previously separate businesses into a single
unit;
    
    the substantial diversion of managements attention from day-to-day operations;
    
    the assumption of liabilities of an acquired business, including unforeseen
liabilities;
    
    the failure to realize anticipated benefits, such as cost savings, revenue
enhancements and profitability objectives;
    
    the dilution of existing stockholders due to the issuance of equity securities,
utilization of cash reserves, or incurrence of debt in order to fund the acquisitions;
    
    the potential to have to write-down or write-off the value of acquired assets;
    
    the potentially substantial transaction costs associated with completed
acquisitions or pursuing acquisitions that are not completed;
    
    the loss of any key personnel of the acquired company; and
    
    maintaining customer, supplier or other favorable business relationships of
acquired operations.
 We may be unable to make additional acquisitions on attractive terms or successfully integrate them
into our operations.
  We have a material amount of goodwill.
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Our success depends on our ability to manage our growth.
  
    
    these resources will be available, or be available in a cost-effective form, to us
which will allow us to sustain growth at the same levels;
    
    our current personnel, systems, procedures, and controls will be adequate to
support our future operations; or
    
    we will identify, hire, train, motivate or manage required personnel.
  We face intense competition and potential competition from companies with greater resources and our
inability to effectively compete with these companies could harm our business.
  
    
    substantially greater financial resources;
    
    a larger customer base;
    
    a broader line of product offerings; and
    
    greater name recognition within the industry.
  We are dependent on competitive pricing from our suppliers.
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The weak financial conditions of some of our customers may adversely impact our business.
  Our financial results vary from quarter to quarter, which could hurt our business and the market
price of our stock.
  
    
    seasonal fluctuations in demand for our products;
    
    the timing and introduction of new products by us and our competitors;
    
    the market acceptance of our products;
    
    the mix of products sold;
    
    the timing of significant orders from and shipments to customers;
    
    the reduction, rescheduling or cancellation of orders by our customers;
    
    product pricing and discounts;
    
    the timing of our acquisitions of other companies and businesses; and
    
    general economic conditions.
  Seasonality of our business may adversely affect our net sales and operating income.
  We depend on key personnel for our future success.
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We depend on international and domestic suppliers.
   
    
    shipment delays;
    
    fluctuation in exchange rates;
    
    increases in import duties;
    
    changes in customs regulations;
    
    adverse economic conditions in foreign countries;
    
    social, political and economic instability; and
    
    acts of war and terrorism.
  We depend on a growing number of domestic suppliers for our finished goods.
  We depend on third-party carriers.
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
    
    shipment delays caused by such carriers;
    
    labor strikes by the employees of such carriers;
    
    increases in shipping costs and postage rates; and
    
    other adverse economic conditions.
  We may be subject to product liability claims if people or property are harmed by the products
we sell.
  Risks Related to our Corporate Structure and Stock
 Our stock price could be subject to significant volatility.
  
    
    the depth and liquidity of the market for our common stock;
    
    investor perception of the Company and the industry within which we compete;
    
    quarterly variations in operating results; and
    
    general economic and market conditions.
  A large number of our outstanding shares and shares to be issued upon exercise of our
outstanding options may be sold into the market in the future, which could cause the market price
of our common stock to drop significantly, even if our business is doing well.
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One principal stockholder owns a significant amount of our outstanding common stock.
  Rights of our stockholders may be negatively affected if we issue any of the shares of
preferred stock, which our Board of Directors has authority to issue.
  Risks Related to the Notes
 We significantly increased our leverage because of the sale of the notes.
  The notes are subordinated and there are no financial covenants in the indenture.
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We may be unable to repay, repurchase or redeem the notes.
  Provisions of the notes could discourage an acquisition of us by a third party.
  The make whole premium on the notes tendered for repurchase upon a fundamental change may not
adequately compensate the holders for the lost option time value of notes.
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A market may not develop for the notes.
  Conversion of the notes or issuance of additional securities convertible into or exercisable
for shares of our common stock could dilute the ownership of existing stockholders.
  The price at which our common stock may be purchased on the American Stock Exchange is
currently lower than the conversion price of the notes and may remain lower in the future.
  The notes may not be rated or may receive a lower rating than anticipated.
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ITEM 7. FINANCIAL STATEMENTS.
 PageIndex to Consolidated Financial Statements
    
    
    24Report of Independent Registered Public Accounting Firm
    
    
    25Consolidated Balance Sheets as of June 30, 2005 and 2004
    
    
    26Consolidated Statements of Income for the years ended June 30, 2005
and 2004
    
    
    27Consolidated Statement of Stockholders Equity for the years ended
June 30, 2005 and 2004
    
    
    28Consolidated Statements of Cash Flows for the years ended June 30, 2005
and 2004
    
    
    29Notes to Consolidated Financial Statements
    
    
    30
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/s/ Grant Thornton LLP
 
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 June 30,2005
    
    
    2004(As restated)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    40,325,716
    
    
    $
    7,473,145Accounts receivable, net of allowance for doubtful accounts of
$1,042,496 and $635,531, respectively
    
    
    18,131,753
    
    
    
    10,683,860Inventories
    
    
    17,478,805
    
    
    
    9,291,863Current portion of deferred taxes
    
    
    775,231
    
    
    
    193,292Prepaid income taxes
    
    
    644,596
    
    
    
    Prepaid expenses and other current assets
    
    
    601,439
    
    
    
    496,912Total current assets
    
    
    77,957,540
    
    
    
    28,139,072PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$1,294,135 and $870,394, respectively
    
    
    1,501,096
    
    
    
    831,205DEFERRED DEBT ISSUANCE COSTS, net of accumulated amortization of
$392,932 in 2005
    
    
    3,017,427
    
    
    
    INTANGIBLE ASSETS, net of accumulated amortization of $853,333 and
$339,438, respectively
    
    
    1,862,606
    
    
    
    1,306,500GOODWILL
    
    
    23,848,345
    
    
    
    15,997,287DEFERRED INCOME TAXES
    
    
    
    
    
    
    203,194OTHER ASSETS, net
    
    
    409,068
    
    
    
    259,011Total assets
    
    $
    108,596,082
    
    
    $
    46,736,269LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILTIES:Accounts payable
    
    $
    9,782,479
    
    
    $
    4,983,603Accrued liabilities
    
    
    1,724,783
    
    
    
    1,283,553Dividends payable
    
    
    255,144
    
    
    
    247,128Accrued interest
    
    
    250,000
    
    
    
    Current portion of long-term debt
    
    
    329,867
    
    
    
    124,800Income taxes payable
    
    
    
    
    
    
    700,850Total current liabilities
    
    
    12,342,273
    
    
    
    7,339,934REDEEMABLE COMMON STOCK
    
    
    
    
    
    
    7,250,000DEFERRED TAX LIABILITY
    
    
    700,146
    
    
    
    LONG-TERM DEBT
    
    
    50,448,153
    
    
    
    73,200COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Preferred stock, $0.01 par value, 1,000,000 shares
authorized; no shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 50,000,000 shares authorized;
10,205,780 and 9,884,142 shares issued and 10,119,754
and 9,798,116 shares outstanding, respectively
    
    
    102,058
    
    
    
    98,842Additional paid-in capital
    
    
    41,911,008
    
    
    
    31,469,423Retained earnings
    
    
    3,749,895
    
    
    
    1,162,321Treasury stock at cost, 86,026 shares
    
    
    (657,451
    )
    
    
    (657,451
    )Total stockholders equity
    
    
    45,105,510
    
    
    
    32,073,135Total liabilities and stockholders equity
    
    $
    108,596,082
    
    
    $
    46,736,269
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the years ended June 30,2005
    
    
    2004(As restated)Net sales
    
    $
    106,339,351
    
    
    $
    39,561,521Cost of sales
    
    
    70,385,403
    
    
    
    25,605,725Gross profit
    
    
    35,953,948
    
    
    
    13,955,796Selling, general and administrative expenses
    
    
    28,651,112
    
    
    
    11,108,820Operating profit
    
    
    7,302,836
    
    
    
    2,846,977Other income (expense):Interest income
    
    
    580,862
    
    
    
    22,388Interest expense
    
    
    (2,160,281
    )
    
    
    (52,415
    )Other
    
    
    174,644
    
    
    
    18,376Total other expense
    
    
    (1,404,775
    )
    
    
    (11,650
    )Income before income taxes
    
    
    5,898,061
    
    
    
    2,835,326Income tax provision
    
    
    2,296,989
    
    
    
    1,162,108Net income
    
    $
    3,601,072
    
    
    $
    1,673,218Weighted average number of shares outstanding:Basic
    
    
    10,031,314
    
    
    
    6,324,950Diluted
    
    
    10,279,185
    
    
    
    7,571,910Net income per share of common stock  basic
    
    $
    0.36
    
    
    $
    0.26Net income per share of common stock  diluted
    
    $
    0.35
    
    
    $
    0.22
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 For the years ended June 30, 2005 and 2004
 ADDITIONALCOMMON STOCK
    
    
    PAID-IN
    
    
    RETAINED
    
    
    TREASURY STOCKSHARES
    
    
    AMOUNT
    
    
    CAPITAL
    
    
    EARNINGS
    
    
    SHARES
    
    
    AMOUNT
    
    
    TOTALBalances at July 1, 2003
    
    
    4,308,169
    
    
    $
    43,082
    
    
    $
    6,387,090
    
    
    $
    201,065
    
    
    
    80,326
    
    
    $
    (616,643
    )
    
    $
    6,014,594Issuance of stock for cash,
net of offering costs
of $589,721
    
    
    4,399,161
    
    
    
    43,992
    
    
    
    21,252,851
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,296,843Issuance of stock for
business acquisitions
    
    
    1,176,812
    
    
    
    11,768
    
    
    
    3,829,482
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,841,250Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (711,962
    )
    
    
    
    
    
    
    
    
    
    
    (711,962
    )Purchase of stock for cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,700
    
    
    
    (40,808
    )
    
    
    (40,808
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,673,218
    
    
    
    
    
    
    
    
    
    
    
    1,673,218Balances at June 30, 2004
    
    
    9,884,142
    
    
    $
    98,842
    
    
    $
    31,469,423
    
    
    $
    1,162,321
    
    
    
    86,026
    
    
    $
    (657,451
    )
    
    $
    32,073,135Issuance of stock for cash
    
    
    89,850
    
    
    
    898
    
    
    
    506,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    507,287Issuance of stock for
business acquisitions
    
    
    231,788
    
    
    
    2,318
    
    
    
    2,685,196
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,687,514Redeemable common stock
    
    
    
    
    
    
    
    
    
    
    7,250,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,250,000Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,013,498
    )
    
    
    
    
    
    
    
    
    
    
    (1,013,498
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,601,072
    
    
    
    
    
    
    
    
    
    
    
    3,601,072Balances at June 30, 2005
    
    
    10,205,780
    
    
    $
    102,058
    
    
    $
    41,911,008
    
    
    $
    3,749,895
    
    
    
    86,026
    
    
    $
    (657,451
    )
    
    $
    45,105,510
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the years ended June 30,2005
    
    
    2004(As restated)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    3,601,072
    
    
    $
    1,673,218Adjustments
to reconcile net income to cash provided by (used in) operating activities:Depreciation expense
    
    
    432,206
    
    
    
    241,167Amortization expense
    
    
    741,661
    
    
    
    475,968Amortization of deferred debt issuance costs
    
    
    392,932
    
    
    
    Provision for uncollectible accounts receivable
    
    
    574,464
    
    
    
    194,620Deferred income taxes
    
    
    (25,251
    )
    
    
    24,545Changes in operating assets and liabilities, net of effects of
acquisitions:Accounts receivable
    
    
    (3,598,104
    )
    
    
    (1,225,153
    )Inventories
    
    
    (4,255,283
    )
    
    
    (1,222,432
    )Prepaid expenses and other current assets
    
    
    43,139
    
    
    
    (52,640
    )Other assets, net
    
    
    103,946
    
    
    
    (177,239
    )Accounts payable
    
    
    353,115
    
    
    
    322,767Accrued liabilities
    
    
    119,357
    
    
    
    (749,390
    )Income taxes payable
    
    
    (1,345,445
    )
    
    
    646,061Net cash provided by (used in) operating activities:
    
    
    (2,862,191
    )
    
    
    151,492CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (663,808
    )
    
    
    (215,611
    )Purchases of subsidiaries, net of cash acquired of
$218,714 and $798,831, respectively
    
    
    (9,418,910
    )
    
    
    (12,646,829
    )Net cash used in investing activities:
    
    
    (10,082,718
    )
    
    
    (12,862,440
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from borrowings under line of credit
    
    
    13,374,576
    
    
    
    6,571,798Payments on long-term debt and line of credit
    
    
    (13,668,543
    )
    
    
    (7,436,916
    )Proceeds from issuance of 5.75% convertible senior subordinated
notes, net of deferred debt issuance costs
    
    
    46,589,641
    
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    (40,808
    )Payment of dividends
    
    
    (1,005,481
    )
    
    
    (572,537
    )Proceeds from issuance of common stock
    
    
    507,287
    
    
    
    21,296,843Net cash provided by financing activities:
    
    
    45,797,480
    
    
    
    19,818,380Increase in cash and cash equivalents
    
    
    32,852,571
    
    
    
    7,107,432Cash and cash equivalents, beginning of year
    
    
    7,473,145
    
    
    
    365,713Cash and cash equivalents, end of year
    
    $
    40,325,716
    
    
    $
    7,473,145SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    1,517,349
    
    
    $
    52,415Cash paid for income taxes
    
    $
    3,667,686
    
    
    $
    480,000SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES (See Note 3):Fair value of assets acquired in business acquisitions
    
    $
    9,781,252
    
    
    $
    13,007,064Liabilities assumed in business acquisitions
    
    $
    5,524,356
    
    
    $
    8,714,750Promissory notes issued for business acquisitions
    
    $
    830,000
    
    
    $
    250,000Common stock issued for business acquisitions (231,788 and
1,176,812 shares, respectively)
    
    $
    2,687,514
    
    
    $
    11,091,250
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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2005 and 2004
 1. General:
  Restatement.
 Consolidated Balance Sheet
 Restatement Adjustment  Increase/(Decrease)
 As of June 30,2005
    
    2004Inventories
    
    $
    32,249
    
    
    $
    77,800Current portion of deferred taxes
    
    
    34,022
    
    
    
    43,878Prepaid income taxes
    
    
    146,260
    
    
    
    Identifiable intangibles
    
    
    (335,811
    )(1)
    
    
    876,666Goodwill
    
    
    (344,110
    )
    
    
    (1,311,200
    )Deferred tax asset
    
    
    
    
    
    
    102,382Non-current deferred tax liability
    
    
    79,383
    
    
    
    Retained earnings
    
    
    (388,007
    )
    
    
    (210,474
    )
 Consolidated Income Statement
 Restatement Adjustment  Increase/(Decrease)
 As of June 30,2005
    
    2004Costs of goods sold
    
    $
    384,250
    
    
    $
    233,400Selling, general and
administrative expenses
    
    
    (93,313
    )
    
    
    123,334Income tax provision
    
    
    (113,405
    )
    
    
    (146,259
    )Net income
    
    
    (177,532
    )
    
    
    (210,475
    )Earnings per shareBasic
    
    
    (0.02
    )
    
    
    (0.04
    )Diluted
    
    
    (0.02
    )
    
    
    (0.03
    )
 -30-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 (1)
    
    At June 30, 2005, approximately $1.0 million had been reclassified from goodwill to
identifiable intangibles from the 2004 acquisition of Kesslers Sport Shop. This
restatement is reclassifying that adjustment as of June 30, 2004, in order to reflect the
appropriate amortization expense since the date of acquisition.
 2. Summary of Significant Accounting Policies:
 Consolidation.
 Cash and Cash Equivalents.
 Financial Instruments and Credit Risk Concentrations.
 Accounts Receivable.
  2005
    
    
    2004Balance at beginning of period
    
    $
    635,531
    
    
    $
    121,139Provision for uncollectible accounts
receivable
    
    
    574,464
    
    
    
    194,620Effect of business acquisitions
    
    
    264,515
    
    
    
    488,756Accounts written off, net of recoveries
    
    
    (432,014
    )
    
    
    (168,984
    )Balance at end of period
    
    $
    1,042,496
    
    
    $
    635,531
 Inventories.
 -31-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
  Property and Equipment.
 License Agreements, Trademarks and Other Intangible Assets.
     Goodwill.
 Valuation of Long-Lived Assets.
 Revenue Recognition.
 -32-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
  Shipping and Handling Costs and Fees.
 Advertising.
 Stock Based Compensation.
 2005
    
    
    2004(As restated)Net income, as reported
    
    $
    3,601,072
    
    
    $
    1,673,218Add: stock-based employee compensation expense
included in net income
    
    
    
    
    
    
    Deduct: stock-based employee compensation expense
determined under fair value method for all awards,
net of related tax effects
    
    
    (1,867,001
    )
    
    
    (442,403
    )Pro forma net income
    
    $
    1,734,071
    
    
    $
    1,230,815Net income per share common stock:Basic  as reported
    
    $
    0.36
    
    
    $
    0.26Basic  pro forma
    
    $
    0.17
    
    
    $
    0.19Diluted  as reported
    
    $
    0.35
    
    
    $
    0.22Diluted  pro forma
    
    $
    0.17
    
    
    $
    0.16
 Income Taxes.
 Income Per Share.
 -33-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 Segment Reporting.
 Net Sales .
 2005
    
    
    2004Sporting Goods Equipment
    
    $
    61,879,921
    
    
    $
    34,167,193Soft Good Athletic Apparel and Footwear
    
    
    44,459,430
    
    
    
    5,394,328Net Sales
    
    $
    106,339,351
    
    
    $
    39,561,521
 Use of Estimates in Financial Statements.
 Recent Accounting Pronouncements :
   -34-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
  3. Business Combinations (as restated):
     -35-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
       -36-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
      -37-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
       2005
    
    
    2004Current assets
    
    $
    9,288,515
    
    
    $
    12,620,187Property and equipment
    
    
    438,291
    
    
    
    315,706Other assets
    
    
    54,446
    
    
    
    71,171Intangible assets
    
    
    918,600
    
    
    
    1,210,000Goodwill
    
    
    7,886,103
    
    
    
    15,312,367Total assets acquired
    
    $
    18,585,955
    
    
    $
    29,529,431
 -38-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 2005
    
    
    2004Current liabilities
    
    $
    5,142,888
    
    
    $
    4,016,749Non-current liabilities
    
    
    381,468
    
    
    
    4,698,001Total liabilities assumed
    
    $
    5,524,356
    
    
    $
    8,714,750
  2005
    
    
    2004(unaudited pro forma)Net sales
    
    $
    116,679,993
    
    
    $
    101,307,896Net income
    
    $
    3,932,665
    
    
    $
    3,040,766Net income per share of common stock:Basic
    
    $
    0.39
    
    
    $
    0.48Diluted
    
    $
    0.38
    
    
    $
    0.40
 4.
Inventories (as restated)
  2005
    
    
    2004(As restated)Raw materials
    
    $
    515,508
    
    
    $
    457,337Work in progress
    
    
    75,450
    
    
    
    115,223Finished goods
    
    
    16,887,847
    
    
    
    8,719,303Inventories
    
    $
    17,478,805
    
    
    $
    9,291,863
 5. Property and Equipment:
  EstimatedUseful Lives(Years)
    
    
    2005
    
    
    2004Office equipment
    
    
    3  7
    
    
    $
    496,588
    
    
    $
    535,093Furniture and fixtures
    
    
    3  7
    
    
    
    862,611
    
    
    
    614,920Warehouse and manufacturing equipment
    
    
    5  10
    
    
    
    551,309
    
    
    
    452,038Leasehold improvements
    
    
    5
    
    
    
    492,204
    
    
    
    Vehicles
    
    
    7
    
    
    
    392,519
    
    
    
    99,548Total property and equipment
    
    
    
    
    
    
    2,795,231
    
    
    
    1,701,599Less: accumulated depreciation
    
    
    
    
    
    
    (1,294,135
    )
    
    
    (870,394
    )Property and equipment, net
    
    
    
    
    
    $
    1,501,096
    
    
    $
    831,205
  -39-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 6. Intangible Assets (as restated):
  2005
    
    
    2004Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedValue
    
    
    Amortization
    
    
    Value
    
    
    AmortizationAmortizable intangible assetsLicense agreements
    
    $
    235,429
    
    
    $
    172,961
    
    
    $
    235,429
    
    
    $
    145,938Trademarks
    
    
    343,142
    
    
    
    152,384
    
    
    
    330,642
    
    
    
    130,133Customer relationships
    
    
    1,923,000
    
    
    
    323,833
    
    
    
    1,070,000
    
    
    
    53,500Contractual backlog
    
    
    205,600
    
    
    
    195,200
    
    
    
    140,000
    
    
    
    140,000Other
    
    
    8,768
    
    
    
    8,955
    
    
    
    
    
    
    
    Total amortizable intangible assets
    
    $
    2,715,939
    
    
    $
    853,333
    
    
    $
    1,776,071
    
    
    $
    469,571Intangible assets not subject to
amortizationGoodwill
    
    $
    23,848,345
    
    
    $
    
    
    
    $
    15,997,287
    
    
    $
    
  Year Ending June 30,2006
    
    $
    366,0722007
    
    
    304,1202008
    
    
    231,9972009
    
    
    173,6402010
    
    
    155,128Thereafter
    
    
    631,649Total
    
    $
    1,862,606
 7. Long-Term Debt and Line of Credit:
  -40-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
      -41-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
        -42-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
     Year Ending June 30,2006
    
    $
    329,8672007
    
    
    196,2102008
    
    
    100,0002009
    
    
    100,0002010
    
    
    50,051,943Thereafter
    
    
    Total future payments
    
    $
    50,778,020
 8. Income Taxes (as restated):
  2005
    
    
    2004Deferred tax assets attributed to:Accounts receivable
    
    $
    452,977
    
    
    $
    77,439Inventories
    
    
    395,161
    
    
    
    131,716Net operating loss carry-forwards
    
    
    105,696
    
    
    
    147,664Compensation accruals
    
    
    49,303
    
    
    
    29,464Intangible assets
    
    
    
    
    
    
    57,594Accrued expenses
    
    
    42,313
    
    
    
    Other
    
    
    8,389
    
    
    
    8,256Total deferred tax assets
    
    
    1,053,839
    
    
    
    452,133Deferred tax liabilities attributed to:Property and equipment
    
    
    (221,763
    )
    
    
    (55,647
    )Intangible assets
    
    
    (756,991
    )
    
    
    Total deferred tax liabilities
    
    
    (978,754
    )
    
    
    (55,647
    )Net deferred taxes
    
    $
    75,085
    
    
    $
    396,486
  -43-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 2005
    
    
    2004Current deferred tax asset
    
    $
    775,231
    
    
    $
    193,292Non-current deferred tax asset
    
    
    
    
    
    
    203,194Non-current deferred tax liability
    
    
    (700,146
    )
    
    
    Balance at end of period
    
    $
    75,085
    
    
    $
    396,486
  2005
    
    
    2004FederalCurrent
    
    $
    1,999,429
    
    
    $
    1,213,918Deferred
    
    
    (132,155
    )
    
    
    (289,278
    )StateCurrent
    
    
    468,648
    
    
    
    264,603Deferred
    
    
    (38,933
    )
    
    
    (27,135
    )Total provision for income taxes
    
    $
    2,296,989
    
    
    $
    1,162,108
  2005
    
    
    2004Tax expense at the federal statutory rate
    
    $
    2,005,341
    
    
    $
    964,010State income taxes, net of federal benefit
    
    
    283,612
    
    
    
    210,848Other
    
    
    8,036
    
    
    
    12,750Income tax provision
    
    $
    2,296,989
    
    
    $
    1,162,108
   9. Related Party Transactions:
   -44-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
  10. Stock Options and Warrants:
   WeightedAverageOptions
    
    

    Exercise PriceOutstanding at July 1, 2003
    
    
    772,900
    
    
    $
    5.25Granted
    
    
    300,000
    
    
    
    9.31Exercised
    
    
    (213,800
    )
    
    
    4.49Forfeited or cancelled
    
    
    (1,000
    )
    
    
    6.08Outstanding at June 30, 2004
    
    
    858,100
    
    
    
    6.85Granted
    
    
    406,300
    
    
    
    11.54Exercised
    
    
    (89,850
    )
    
    
    5.65Forfeited or cancelled
    
    
    (4,000
    )
    
    
    9.29Outstanding at June 30, 2005
    
    
    1,170,550
    
    
    $
    8.56Exercisable at June 30, 2004
    
    
    683,100
    
    
    $
    6.21Exercisable at June 30, 2005
    
    
    992,550
    
    
    $
    8.44
  2005
    
    
    2004Expected volatility
    
    
    34  35
    %
    
    
    33
    %Risk-free interest rate
    
    
    3.41  3.99
    %
    
    
    3.58
    %Dividend yield
    
    
    0.90  1.10
    %
    
    
    1.5
    %Expected lives
    
    5 years
    
    5 years
  -45-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
  Outstanding
    
    ExercisableWeightedAverageRemaining
    
    Weighted
    
    
    
    
    
    WeightedContractual
    
    Average
    
    
    
    
    
    AverageLife
    
    Exercise
    
    
    
    
    
    ExerciseExercise price
    
    Shares
    
    (In Years)
    
    Price
    
    Shares
    
    Price$3.89  $4.81
    
    
    122,500
    
    
    
    5.9
    
    
    $
    3.91
    
    
    
    122,500
    
    
    $
    3.91$4.90  $6.13
    
    
    323,750
    
    
    
    5.6
    
    
    $
    5.85
    
    
    
    323,750
    
    
    $
    5.85$9.38
    
    
    31,500
    
    
    
    3.5
    
    
    $
    9.38
    
    
    
    31,500
    
    
    $
    9.38$8.73  $9.73
    
    
    482,800
    
    
    
    9.0
    
    
    $
    9.29
    
    
    
    304,800
    
    
    $
    9.33$10.70  $14.34
    
    
    210,000
    
    
    
    9.5
    
    
    $
    13.67
    
    
    
    210,000
    
    
    $
    13.671,170,550
    
    
    
    
    
    
    
    
    
    
    
    992,550
  11. Leases:
   Year Ending June 30,2006
    
    $
    1,347,1812007
    
    
    1,209,2942008
    
    
    838,4822009
    
    
    471,7922010
    
    
    157,627Thereafter
    
    
    Total minimum future lease payments

    $
    4,024,376
 12. Income Per Share (as restated):
  -46-




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 2005
    
    
    
    
    
    
    
    
    
    
    2004Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic income
per share
    
    $
    3,601,072
    
    
    
    10,031,314
    
    
    $
    0.36
    
    
    $
    1,673,218
    
    
    
    6,324,950
    
    
    $
    0.26Effect of dilutive
options and
warrants
    
    
    
    
    
    
    247,871
    
    
    
    (0.01
    )
    
    
    
    
    
    
    1,246,960
    
    
    
    (0.04
    )Diluted income
per share
    
    $
    3,601,072
    
    
    
    10,279,185
    
    
    $
    0.35
    
    
    $
    1,673,218
    
    
    
    7,571,910
    
    
    $
    0.22
  13. Subsequent Events:
    -47-




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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005 and 2004
 
 ITEM 8A. CONTROLS AND PROCEDURES.
     -48-




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##### Table of Contents



ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.
  ExhibitNumber
    
    Description
    
    Location23
    
    Consent of Grant Thornton LLP.*31.1
    
    Certification of the Chief Executive Officer
pursuant to Rule 13a-14(a) or 15(d)-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of the Chief Financial Officer
pursuant to Rule 13a-14(a) or 15(d)-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*32
    
    Certification of the Chief Executive Officer
pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.**32
    
    Certification of the Chief Financial Officer
pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.**
 
 *
    
    Filed herewith**
    
    Furnished herewith




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##### Table of Contents



SIGNATURES
  COLLEGIATE PACIFIC INC.February 21, 2006
    By:
    /s/ Michael J. BlumenfeldMichael J. Blumenfeld,Chairman of the Board and Chief
Executive Officer
(Principal Executive Officer)  Signature
    
    
    
    Capacity/s/ Michael J. Blumenfeld
    
    
    
    Chairman of the Board andMichael J. Blumenfeld
    
    
    
    Chief Executive Officer/s/ Adam Blumenfeld
    
    
    
    President and DirectorAdam Blumenfeld/s/ William R. Estill
    
    
    
    Chief Financial Officer,William R. Estill
    
    
    
    Secretary and Treasurer
(Principal Accounting and
Financial Officer)/s/ Jeff Davidowitz
    
    
    
    DirectorJeff Davidowitz/s/ Robert W. Hampton
    
    
    
    DirectorRobert W. Hampton/s/ William H. Watkins, Jr.
    
    
    
    DirectorWilliam H. Watkins, Jr.




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description
    
    Location23
    
    Consent of Grant Thornton LLP.*31.1
    
    Certification of the Chief Executive Officer
pursuant to Rule 13a-14(a) or 15(d)-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of the Chief Financial Officer
pursuant to Rule 13a-14(a) or 15(d)-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*32
    
    Certification of the Chief Executive Officer
pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.**32
    
    Certification of the Chief Financial Officer
pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.**
 
 *
    
    Filed herewith**
    
    Furnished herewith