##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
  þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the quarterly period ended March 31, 2007
 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. 1-15289
 COLLEGIATE PACIFIC INC.
  Delaware
    
    22-2795073(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)1901 Diplomat Drive, Dallas, Texas
    
    75234(Address of Principal Executive Offices)
    
    (Zip code)
 (972) 243-8100
 þ o
  o o þ
 o þ




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##### Table of Contents



COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 PageNumberPART I: FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at March 31, 2007 and June 30, 2006
    
    
    1Condensed Consolidated Statements of Income for the three and nine months ended March 31, 2007 and 2006
    
    
    2Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2007 and 2006
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    22PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    24SIGNATURES
    
    
    25Letter AgreementCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Consolidated Financial Statements.
 COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share amounts)
 March 31,
    
    
    June 30,2007
    
    
    2006(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    3,185
    
    
    $
    4,079Accounts receivable, net of allowance for doubtful accounts of
$2,035 and $1,496 respectively
    
    
    37,029
    
    
    
    31,004Inventories
    
    
    35,591
    
    
    
    37,185Current portion of deferred taxes
    
    
    2,957
    
    
    
    2,625Prepaid income taxes
    
    
    1,627
    
    
    
    1,607Prepaid expenses and other current assets
    
    
    2,538
    
    
    
    2,199Total current assets
    
    
    82,927
    
    
    
    78,699PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$4,357 and $2,755, respectively
    
    
    9,784
    
    
    
    10,087DEFERRED DEBT ISSUANCE COSTS, net of accumulated amortization of
$1,781 and $1,076, respectively
    
    
    2,563
    
    
    
    2,782INTANGIBLE ASSETS, net of accumulated amortization of
$3,110 and $2,188, respectively
    
    
    8,293
    
    
    
    9,014GOODWILL
    
    
    54,567
    
    
    
    40,280DEFERRED INCOME TAXES
    
    
    2,655
    
    
    
    3,156OTHER ASSETS, net
    
    
    152
    
    
    
    417Total assets
    
    $
    160,941
    
    
    $
    144,435LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    14,469
    
    
    $
    14,802Accrued liabilities
    
    
    6,275
    
    
    
    5,896Dividends payable
    
    
    256
    
    
    
    256Accrued interest
    
    
    1,055
    
    
    
    329Current portion of long-term debt
    
    
    3,368
    
    
    
    2,210Deferred tax liability
    
    
    41
    
    
    
    15Total current liabilities
    
    
    25,464
    
    
    
    23,508DEFERRED TAX LIABILITY
    
    
    3,077
    
    
    
    3,259NOTES PAYABLE AND OTHER LONG-TERM DEBT
    
    
    81,735
    
    
    
    62,284COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN SUBSIDIARY
    
    
    
    
    
    
    8,150STOCKHOLDERS 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;
10,319,586 and 10,315,191 shares issued and 10,233,560
and 10,229,165 shares outstanding, respectively
    
    
    103
    
    
    
    103Additional paid-in capital
    
    
    43,199
    
    
    
    43,162Retained earnings
    
    
    8,020
    
    
    
    4,626Treasury stock at cost, 86,026 shares
    
    
    (657
    )
    
    
    (657
    )Total stockholders equity
    
    
    50,665
    
    
    
    47,234Total liabilities and stockholders equity
    
    $
    160,941
    
    
    $
    144,435
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 (In thousands, except share and per share amounts)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    63,235
    
    
    $
    59,418
    
    
    $
    180,782
    
    
    $
    171,094Cost of sales
    
    
    40,404
    
    
    
    38,421
    
    
    
    116,513
    
    
    
    113,640Gross profit
    
    
    22,831
    
    
    
    20,997
    
    
    
    64,269
    
    
    
    57,454Selling, general and administrative expenses
    
    
    18,421
    
    
    
    17,253
    
    
    
    52,474
    
    
    
    49,181Operating profit
    
    
    4,410
    
    
    
    3,744
    
    
    
    11,795
    
    
    
    8,273Other income (expense):Interest income
    
    
    28
    
    
    
    25
    
    
    
    142
    
    
    
    99Interest expense
    
    
    (1,707
    )
    
    
    (1,261
    )
    
    
    (4,424
    )
    
    
    (3,379
    )Other income
    
    
    17
    
    
    
    155
    
    
    
    109
    
    
    
    244Total other expense
    
    
    (1,662
    )
    
    
    (1,081
    )
    
    
    (4,173
    )
    
    
    (3,036
    )Income before minority interest
in income of consolidated
subsidiary and income taxes
    
    
    2,748
    
    
    
    2,663
    
    
    
    7,622
    
    
    
    5,237Income tax provision
    
    
    1,010
    
    
    
    787
    
    
    
    2,929
    
    
    
    1,813Minority interest in income of consolidated
subsidiary, net of tax
    
    
    0
    
    
    
    644
    
    
    
    531
    
    
    
    588Net income
    
    $
    1,738
    
    
    $
    1,232
    
    
    $
    4,162
    
    
    $
    2,836Weighted average number of shares outstanding:Basic
    
    
    10,233,560
    
    
    
    10,183,973
    
    
    
    10,231,051
    
    
    
    10,174,843Diluted
    
    
    13,774,358
    
    
    
    10,359,528
    
    
    
    10,375,469
    
    
    
    10,389,740Net income per share common stock  basic
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.41
    
    
    $
    0.28Net income per share common stock  diluted
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.40
    
    
    $
    0.27Dividends declared per share common stock
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.075
    
    
    $
    0.075
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
(In thousands)
 Nine Months EndedMarch 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    4,162
    
    
    $
    2,836Adjustments to reconcile net income to cash provided by operating
activities:Provision for uncollectible accounts receivable
    
    
    1,307
    
    
    
    763Depreciation expense
    
    
    1,732
    
    
    
    1,027Amortization expense
    
    
    821
    
    
    
    1,114Amortization of deferred debt issuance costs
    
    
    705
    
    
    
    512Deferred taxes
    
    
    1,952
    
    
    
    (231
    )Stock-based compensation expense
    
    
    
    
    
    
    60Minority interest in consolidated subsidiary
    
    
    531
    
    
    
    588Changes in operating assets and liabilities (net of effects of acquisitions):Accounts receivable
    
    
    (7,332
    )
    
    
    (8,572
    )Inventories
    
    
    1,594
    
    
    
    (2,740
    )Prepaid expenses and other current assets
    
    
    (339
    )
    
    
    (2,937
    )Other assets, net
    
    
    (321
    )
    
    
    128Accounts payable
    
    
    (333
    )
    
    
    1,658Accrued liabilities and interest
    
    
    1,105
    
    
    
    864Prepaid income taxes
    
    
    (20
    )
    
    
    382Net cash provided by (used in) operating activities
    
    
    5,564
    
    
    
    (4,548
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (1,429
    )
    
    
    (699
    )Cash used in business acquisitions, net of cash acquired of $0
and $864, respectively
    
    
    (24,907
    )
    
    
    (43,657
    )Net cash used in investing activities
    
    
    (26,336
    )
    
    
    (44,356
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from bank line of credit
    
    
    34,024
    
    
    
    110,992Payments on notes payable and line of credit
    
    
    (13,415
    )
    
    
    (97,337
    )Payment of dividends
    
    
    (768
    )
    
    
    (765
    )Proceeds from issuance of common stock
    
    
    37
    
    
    
    99Net cash provided by financing activities
    
    
    19,878
    
    
    
    12,989Net change in cash and cash equivalents
    
    
    (894
    )
    
    
    (35,915
    )Cash and cash equivalents at beginning of period
    
    
    4,079
    
    
    
    40,326Cash and cash equivalents at end of period
    
    $
    3,185
    
    
    $
    4,411SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    2,963
    
    
    $
    2,015Cash paid for income taxes
    
    $
    1,042
    
    
    $
    1,412SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES (See
Note 2 for non-cash acquisition disclosures)
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation:
 Company US GAAP
  2. Business Combinations:
 SSG
 Original Merger Agreement
  Merger Transaction
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    Salkeld Kesslers
  Dixie
 3. Net Sales:
  For the Three Months Ended
    
    
    For the Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(Unaudited, in thousands)Sporting goods equipment
    
    $
    43,472
    
    
    $
    42,246
    
    
    $
    113,442
    
    
    $
    110,772Soft goods
    
    
    19,763
    
    
    
    17,172
    
    
    
    67,340
    
    
    
    60,322Net sales
    
    $
    63,235
    
    
    $
    59,418
    
    
    $
    180,782
    
    
    $
    171,094
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 4. Inventories:
   March 31,
    
    
    June 30,2007
    
    
    2006Raw materials
    
    $
    1,950
    
    
    $
    1,893Work in progress
    
    
    207
    
    
    
    116Finished goods
    
    
    33,434
    
    
    
    35,176Inventories
    
    $
    35,591
    
    
    $
    37,185
 5. Allowance for Doubtful Accounts:
  March 31,
    
    
    June 30,2007
    
    
    2006Balance at beginning of period
    
    $
    1,496
    
    
    $
    1,042Provision for uncollectible accounts receivable
    
    
    1,307
    
    
    
    982Accounts written off, net of recoveries
    
    
    (768
    )
    
    
    (528
    )Balance at end of period
    
    $
    2,035
    
    
    $
    1,496
 6. Income Per Share:
  For the Three Months
    
    
    For the Nine MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands except share and per share data)Determination of diluted number of shares:Average common shares outstanding
    
    
    10,233,560
    
    
    
    10,183,973
    
    
    
    10,231,051
    
    
    
    10,174,843Assumed exercise of dilutive stock options(1)
    
    
    127,829
    
    
    
    175,555
    
    
    
    144,418
    
    
    
    214,897Assumed conversion of subordinated
debentures(2)
    
    
    3,412,969
    
    
    
    
    
    
    
    
    
    
    
    Diluted average common shares outstanding (b)
    
    
    13,774,358
    
    
    
    10,359,528
    
    
    
    10,375,469
    
    
    
    10,389,740Calculation of diluted earnings per share:Net income
    
    $
    1,738
    
    
    $
    1,232
    
    
    $
    4,162
    
    
    $
    2,836Add: interest component on assumed conversion
of subordinated debentures, net of taxes(2)
    
    
    552
    
    
    
    
    
    
    
    
    
    
    
    Net income, adjusted (a)
    
    $
    2,290
    
    
    $
    1,232
    
    
    $
    4,162
    
    
    $
    2,836Diluted earnings per share (a/b)
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.40
    
    
    $
    0.27
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 (1)
    
    For the three and nine months ended March 31, 2007 and March 31, 2006, 653,100 and
3,619,969 shares and 3,861,669 and 3,606,969 shares, respectively, were not included in the
calculation of fully diluted earnings per share since the effect of those shares would have
been antidilutive.For the nine month periods ended March 31, 2007 and 2006, the shares relating to
outstanding stock options for which the exercise price was greater than the average
closing price of the common stock for the respective periods and the shares underlying the
convertible securities were excluded from the calculation as the effect was antidilutive.(2)
    
    Convertible bonds of $50,000,000 were issued in November 2004. For the nine months ended
March 31, 2007 and the three and nine months ended March 31, 2006, these bonds were
antidilutive in the computation of earnings per share; however, for the three months ended
March 31, 2007 they were dilutive. 7. Intangible Assets:
  March 31, 2007
    
    
    June 30, 2006Asset
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetLife
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying(Years)
    
    
    Value
    
    
    Amortization
    
    
    Value
    
    
    Value
    
    
    Amortization
    
    
    Value(In thousands)
    
    
    
    
    
    
    
    
    
    
    (In thousands)Amortizable intangible assets:Trademarks
    
    
    10-15
    
    
    $
    343
    
    
    $
    193
    
    
    $
    150
    
    
    $
    343
    
    
    $
    166
    
    
    $
    177Non-compete agreements
    
    
    10
    
    
    
    3,200
    
    
    
    560
    
    
    
    2,640
    
    
    
    3,200
    
    
    
    320
    
    
    
    2,880Customer relationships
    
    
    10
    
    
    
    3,343
    
    
    
    1,105
    
    
    
    2,238
    
    
    
    3,343
    
    
    
    788
    
    
    
    2,555Contractual backlog
    
    
    0.25-0.50
    
    
    
    427
    
    
    
    427
    
    
    
    
    
    
    
    427
    
    
    
    427
    
    
    
    Customer database
    
    
    3
    
    
    
    660
    
    
    
    385
    
    
    
    275
    
    
    
    660
    
    
    
    220
    
    
    
    440Significant contracts
    
    
    5
    
    
    
    327
    
    
    
    114
    
    
    
    213
    
    
    
    327
    
    
    
    65
    
    
    
    262License agreements and
other
    
    
    3-10
    
    
    
    493
    
    
    
    326
    
    
    
    167
    
    
    
    292
    
    
    
    202
    
    
    
    90Total amortizable intangible
assets
    
    
    
    
    
    $
    8,793
    
    
    $
    3,110
    
    
    $
    5,683
    
    
    $
    8,592
    
    
    $
    2,188
    
    
    $
    6,404Non-amortizable intangible
assets:Trademarks
    
    
    
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610Total non-amortizable
intangible assets
    
    
    
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610Total identifiable intangible
assets
    
    
    
    
    
    $
    11,403
    
    
    $
    3,110
    
    
    $
    8,293
    
    
    $
    11,202
    
    
    $
    2,188
    
    
    $
    9,014Goodwill  June 30, 2006
    
    
    
    
    
    $
    40,280Acquisitions
    
    
    
    
    
    
    16,221Changes in deferred tax
valuation allowance
    
    
    
    
    
    
    (1,939
    )Additional merger expenses
    
    
    
    
    
    
    5Goodwill  March 31, 2007
    
    
    
    
    
    $
    54,567
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COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 8. Stockholders Equity:
  Stockholders equity at June 30, 2006
    
    $
    47,234Issuance of stock for cash
    
    
    37Net income
    
    
    4,162Dividends declared
    
    
    (768
    )Stockholders equity at March 31, 2007
    
    $
    50,665
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Overview
  Collegiate Pacific we us our Company soft goods fiscal 2005 fiscal 2006 fiscal 2007
 Consolidated Results of Operations
  For the Three Months Ended
    
    
    For the Nine Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    63,235
    
    
    $
    59,418
    
    
    $
    180,782
    
    
    $
    171,094Gross profit
    
    
    22,831
    
    
    
    20,997
    
    
    
    64,269
    
    
    
    57,454Operating profit
    
    
    4,410
    
    
    
    3,744
    
    
    
    11,795
    
    
    
    8,273Net income
    
    
    1,738
    
    
    
    1,232
    
    
    
    4,162
    
    
    
    2,836Net income
per share  basic
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.41
    
    
    $
    0.28Net income
per share  diluted
    
    $
    0.17
    
    
    $
    0.12
    
    
    $
    0.40
    
    
    $
    0.27Gross profit margin
    
    
    36.1
    %
    
    
    35.3
    %
    
    
    35.6
    %
    
    
    33.6
    %Selling, general
and administrative
expenses
    
    
    29.1
    %
    
    
    29.0
    %
    
    
    29.0
    %
    
    
    28.7
    %Operating profit
    
    
    7.0
    %
    
    
    6.3
    %
    
    
    6.5
    %
    
    
    4.8
    %
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Acquisitions Since July 1, 2005 and Related Developments
 SSG B2B
 Original Merger Agreement
  Merger Transaction
  Salkeld Kesslers
 -10-




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Dixie
 Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
 Net Sales.
  Gross Profit
  Selling, General and Administrative Expenses. SG&A
 -11-




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
    
    personnel related expenses of approximately $9.6 million;
    
    advertising of approximately $2.2 million;
    
    depreciation and amortization of approximately $824 thousand;
    
    rent expense of approximately $686 thousand;
    
    computer services and supplies of approximately $627 thousand;
    
    travel related expense of approximately $575 thousand;
    
    bad debt of approximately $302 thousand;
    
    legal and accounting fees of approximately $301 thousand;
    
    Sarbanes-Oxley related compliance costs of approximately $281 thousand; and
    
    bank charges of approximately $274 thousand.
  Operating Profit.
 Interest Expense, and Interest and Other Income.
 Minority Interest
 Income Taxes.
 Net Income.
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Nine Months Ended March 31, 2007 Compared to Nine Months Ended March 31, 2006
 Net Sales.
  Gross Profit
  Selling, General and Administrative Expenses.
 
    
    personnel related expenses of approximately $28.5 million;
    
    advertising of approximately $5.3 million;
    
    depreciation and amortization of approximately $2.4 million;
    
    rent of approximately $2.1 million;
    
    computer services and supplies of approximately $1.9 million;
    
    travel related expense of approximately $1.6 million;
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
    
    bad debt of approximately $1.3 million;
    
    legal and accounting fees of approximately $1.1 million;
    
    bank charges of approximately $805 thousand;
    
    insurance related expenses of approximately $665 thousand;
    
    Sarbanes-Oxley related compliance costs in the amount of approximately $405
thousand; and
    
    accrued sales tax liability of $343 thousand.
  Operating Profit.
 Interest Expense, and Interest and Other Income.
 Minority Interest
 Income Taxes.
 Net Income.
 Liquidity and Capital Resources
 Liquidity
  -14-




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Operating Activities.
  
    
    a decrease in inventories of $1.6 million during the nine months ended March 31,
2007, compared to a $2.7 million increase in inventories during the nine months ended
March 31, 2006, which is attributable to the increase in net sales, improved
inventory management in our catalog operations, and the ongoing consolidation of
inventories and manufacturing operations following the consummation of the Merger
Transaction;
    
    an increase in prepaid expenses and other current assets of $339 thousand during
the nine months ended March 31, 2007, compared to a $2.9 million increase in prepaid
expenses and other current assets during the nine months ended March 31, 2006, which
is due primarily to advertising costs associated with the production of catalogs to
be mailed in future periods;
    
    an increase in accounts receivable of $7.3 million during the nine months ended
March 31, 2007, compared to an $8.6 million increase in accounts receivable during
the nine months ended March 31, 2006, which is primarily attributable to the improved
management of accounts receivable in our catalog and team dealer operations; and
    
    an increase in non-cash expenses including depreciation and bad debt expense
during the nine months ended March 31, 2007, compared to the nine months ended March
31, 2006.
  Investing Activities.
 -15-




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Financing Activities.
       Capital Resources
 Notes
 Indenture
 SEC Registration Statement
 -16-




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Senior Credit Agreement MLBFS
 Term Loan Revolving Facility Senior Credit Facility
  LIBOR EBITDA Senior Leverage Ratio
 Fixed Charge Coverage Ratio
 -17-




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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(In thousands)Long-term debt, including current portion
    
    $
    85,103
    
    
    $
    3,367
    
    
    $
    81,711
    
    
    $
    25
    
    
    $
    Operating leases
    
    
    7,690
    
    
    
    2,997
    
    
    
    3,817
    
    
    
    876
    
    
    
    Interest expense and fees on long-term debt
    
    
    13,664
    
    
    
    5,697
    
    
    
    7,967
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    106,457
    
    
    $
    12,061
    
    
    $
    93,495
    
    
    $
    901
    
    
    $
    
 Operating Leases.
 Off-Balance Sheet Arrangements.
 -18-




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Long-Term Debt and Advances Under Credit Facilities.
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Interpretation 48 . Accounting for Income Taxes
 Fair
Value Measurements FAS 157
 SAB 108
 The
Fair Value Option for Financial Assets and Financial Liabilities including an Amendment of FASB
Statement No. 115 (
 Critical Accounting Policies
  -19-




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Inventories.
 Allowance for Doubtful Accounts.
  Goodwill, Intangibles and Long-lived Assets.
 -20-




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Statement Regarding Forward-Looking Disclosure
 This Quarterly Report on Form 10-Q , including Managements Discussion and Analysis of
Financial Condition and Results of Operations in Item 2, contains forward-looking statements that
involve risks and uncertainties, as well as assumptions that, if they never materialize or prove
incorrect, could cause the results of Collegiate Pacific and its consolidated subsidiaries to
differ materially from those expressed or implied by such forward-looking statements. All
statements other than statements of historical fact are statements that could be deemed
forward-looking statements, including any projections of net sales, gross profit margin, expenses,
earnings or losses from operations, synergies or other financial items; any statements of the
plans, strategies and objectives of management for future operations; any statements regarding
future economic conditions or performance; any statements of expectation or belief; and any
statements of assumptions underlying any of the foregoing. The risks, uncertainties and
assumptions referred to above include Collegiate Pacifics ability to integrate acquired
businesses, global economic conditions, product demand, financial market performance and other
risks that are described herein, including but not limited to the items described from time to time
in Collegiate Pacifics Securities and Exchange Commission reports, including Collegiate Pacifics
Annual Report on Form 10-K for the fiscal year ended June 30, 2006. Collegiate Pacific cautions
that the foregoing list of important factors is not all encompassing. Any forward-looking
statements included in this report are made as of the date of filing of this report with the
Securities and Exchange Commission, and we assume no obligation and do not intend to update these
forward-looking statements.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rates. LIBOR
  Foreign Currency and Derivatives.
 -21-




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Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures CEO CFO 1934
Act
 Changes in Internal Control Over Financial Reporting.
 -22-




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
   
 Item 5. Other Information.
  -23-




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##### Table of Contents



Item 6. Exhibits.
  ExhibitNumber
    
    Description10.1
    
    Letter Agreement, dated May 11, 2007, by and between
Collegiate Pacific Inc. and Middle Market Finance, a
division of Merrill Lynch Business Financial Services,
Inc.*31.1
    
    Certification of Adam Blumenfeld 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 William R. Estill 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 Adam Blumenfeld and William R. Estill
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 
 -24-




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SIGNATURES
  COLLEGIATE PACIFIC INC.Dated: May 15, 2007
    /s/ Adam BlumenfeldAdam Blumenfeld, Chief Executive Officer /s/ William R. EstillWilliam R. Estill, Chief Financial Officer(Principal Financial and Accounting Officer) -25-




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description10.1
    
    Letter Agreement, dated May 11, 2007, by and between Collegiate
Pacific Inc. and Middle Market Finance, a division of Merrill
Lynch Business Financial Services, Inc.*31.1
    
    Certification of Adam Blumenfeld 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 William R. Estill 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 Adam Blumenfeld and William R. Estill 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