Collegiate Pacific Buys Uniform Distributor

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Expansion continues to dominate the news coming from Collegiate Pacific Inc.

After completing the acquisition of Tomark Sports last month, Collegiate Pacific announced an agreement yesterday to buy Kesslers Team Sports. Collegiate Pacific manufactures and supplies sports equipment mainly to the institutional and team dealer markets with 65,000 customers.

Kesslers Team Sports, an independent team sporting goods dealer with sales exceeding $30 million last year, is based in Richmond, IN. It has a sales force operating in eight states in the Midwest and Southeast. It is a team/school distributor for many team uniform brands.

"Kesslers possesses 65 road sales professionals whereas Collegiate Pacific sells ... via catalog," Michael Blumenfeld, CEO of Collegiate Pacific, said in a statement. "We intend to move Collegiate Pacific manufactured and proprietary products through this ... sales force and will seek means to expand Kesslers' geographic reach.

"[Most] of Kesslers' revenues are team-uniform related whereas Collegiate Pacific revenues are 98 percent hard goods equipment. Tapping this unfilled equipment void through Kesslers -- with proprietary Collegiate Pacific products -- is a primary opportunity for the immediate expansion of revenues and earnings. Kesslers is strongest in football whereas Collegiate Pacific is strongest in baseball. Kesslers' seasonality complements Collegiate Pacific's in that their strengths lie in the first six months of our fiscal year (July 1-Dec. 31) -- a time frame when Collegiate Pacific is historically the slowest."

Collegiate Pacific, Dallas, also reported operating results for its three- and six-month periods ended Dec. 31. In the quarter, net sales rose 21 percent to $4.24 million. In the six months, net sales increased 23 percent to $10.2 million.

Assuming the transaction closes as scheduled next month, Collegiate Pacific anticipates revenue for fiscal 2005, which starts July 1, around $76 million; its operating income would be about $8.3 million and its net income around $5 million.

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