Wall Street responded emphatically to last month's news from Collegiate Pacific Inc., Dallas, as the company's stock experienced a double-digit percentage increase.
The manufacturer and supplier of sports equipment primarily to the institutional markets said Oct. 22 that it saw consolidated net sales for its first quarter ended Sept. 30 exceeding $27 million versus $5.9 million in the year-ago period and versus consensus estimates of $22.5 million.
“The combination of solid organic growth coupled with recent acquisitions created an outstanding quarter,” CEO Michael Blumenfeld said in the announcement. “The company's newly acquired 120-man sales force produced impressive first-quarter results.”
The stock opened Oct. 22 at $9.70 and reached a high of $10.37 where it closed for the day. While the company — which offers 4,500 products to 65,000 existing customers — expects to report its first-quarter earnings this month, October's results were clearly impressive. Its stock price climbed just over 17 percent from Sept. 28 to Oct. 26, from $9.02 to $10.56.
Collegiate Pacific has been on a buying spree this year, acquiring Richmond, VA-based Dixie Sporting Goods Co., Corona, CA-based Tomark Sports Inc. and Richmond, IN-based Kesslers Team Sports Inc.
San Francisco-based analyst Edward Weller of ThinkEquity sees plenty of good news in Collegiate Pacific's future. In a report issued Sept. 28, his 12-month target price was pegged at $15 while the company was rated a “buy.” The company seems to be gaining share in all its businesses and improving its profitability as well, the report said. The bad weather in the Southeast drew a prominent mention.
“The worst hurricane season in years has flooded out or washed out athletic fields from Florida through the Carolinas and around the Gulf Coast,” the report said. “Whether those fields and their related equipment require merely some incremental maintenance or replacement, the damage from recent storms should increase demand for Collegiate Pacific's products later in the year.”
The report said the company sells field equipment for several outdoor sports, but that its most important sport is baseball.
“While the company does sell lots of baseballs and some gloves, the biggest components of its baseball-related business focus on the field, the batting cages, backstops, pitching machines, stands, dugout benches, scoreboards and equipment for laying out the field and setting up the pitcher's mound and such,” Weller wrote.
Collegiate Pacific is described as a catalog-focused direct marketer of sports and recreation equipment to municipal recreation departments, summer camps, schools, other dealers, military bases, country clubs, YMCAs, correctional institutions, churches and government locations worldwide. It also does business through its Web site and has concluded an agreement to market its products through Amazon.com.
In other news, MemberWorks Inc. changed its ticker symbol from MBRS to VTRU.