UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 3
ON
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 26, 2004
COLLEGIATE PACIFIC INC.
(Exact Name of Registrant as Specified in Charter)
| | | | | |
| Delaware | | 0-17293 | | 22-2795073 |
| (State or Other Jurisdiction of | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
| Incorporation) | | | | |
| | | |
| 13950 Senlac Drive, Suite 100, Dallas, Texas | | 75234 |
| (Address of Principal Executive Offices) | | (Zip Code) |
(972) 243-8100
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (seeGeneral Instruction A.2. below):
| | o | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| | o | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| | o | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
| | o | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
EXPLANATORY NOTE
We have filed this Amendment No. 3 on Form 8-K, which was originally filed with the Securities and Exchange Commission on August 10, 2004 and amended on October 8, 2004 and June 27, 2005 (collectively, the “Original Filing”), to amend the Original Filing as follows:
1. Item 9.01. Financial Statements.
| | (b) | | Pro Forma Financial Information. |
The Pro Forma Financial Information has been revised to reflect the following adjustments that have been made to the original purchase price allocation:
| | • | | $57,000 of the total purchase price paid for the acquisition of Dixie Sporting Goods Co., Inc., which was originally allocated to goodwill, has been allocated to acquired customer relationships instead of goodwill; |
| |
| | • | | $115,700 of the total purchase price paid for the acquisition of Dixie Sporting Goods Co., Inc., which was originally allocated to goodwill, has been added to the original amount that was allocated to acquired inventories instead of goodwill; and |
| |
| | • | | $10,500 of the total purchase price paid for the acquisition of Dixie Sporting Goods Co., Inc., which was originally allocated to goodwill, has been allocated to acquired contractual backlog instead of goodwill. |
| | | Except as described above and for various other adjustments to the pro forma condensed consolidated balance sheet to reflect the final purchase price allocation, the information contained in the Original Filing has not been updated or amended. |
-2-
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The following unaudited pro forma condensed consolidated financial statements have been derived from the historical financial statements of Collegiate Pacific Inc. (“Collegiate Pacific”) and Dixie Sporting Goods Co., Inc. (“Dixie”). The unaudited pro forma condensed consolidated balance sheet as of June 30, 2004, has been presented as if the acquisition of Dixie had been consummated as of that date. The unaudited pro forma condensed consolidated statement of income for the year ended June 30, 2004, has been presented as if the acquisition had been consummated as of July 1, 2003. Collegiate Pacific acquired all of the capital stock of Dixie on July 26, 2004.
Under the terms of the Purchase Agreement, the Company acquired Dixie for a total price of approximately $7.2 million, which consisted of cash in the amount of $4.0 million, $0.5 million in promissory notes, transaction costs of approximately $0.2 million and 148,662 shares of Collegiate Pacific’s common stock (the “Shares”) valued at $1.5 million. Collegiate Pacific also agreed to pay the former shareholders of Dixie (the “Shareholders”) up to an additional $1.0 million in the form of a cash earnout if Dixie’s net income exceeds certain target levels during the 17-month period ending December 31, 2005. Collegiate Pacific agreed to register all of the Shares with the Securities and Exchange Commission for resale by the Shareholders. The parties also entered into an escrow agreement pursuant to which 9,910 of the Shares are held in escrow to secure the indemnification obligations of the Shareholders.
The unaudited pro forma condensed consolidated financial statements give effect to the acquisition of Dixie in accordance with the purchase method of accounting for business combinations and are based upon the assumptions and adjustments described in the accompanying notes. The purchase accounting adjustments reflect the final fair values of the net assets acquired and liabilities assumed.
The pro forma adjustments do not reflect any operating efficiencies and cost savings that Collegiate Pacific may achieve with respect to the combined companies. The pro forma adjustments also do not include any adjustments to historical net sales for any new products, which may be developed and marketed in the future, nor for any future price changes for existing products. The pro forma adjustments do not include any adjustments to historical amounts for cost of sales, sales and marketing, or general and administrative expenses for any future operating changes.
The unaudited pro forma condensed consolidated financial results are not necessarily indicative of the financial position or operating results that would have occurred had the acquisition been consummated at that date, or at the beginning of the period for which such transactions have been given effect, nor of the consolidated results of future operations.
-3-
COLLEGIATE PACIFIC, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
As of June 30, 2004
| | | | | | | | | | | | | | | | | |
| | | Collegiate | | | | | | | Pro Forma | | | Pro Forma | |
| | | Pacific | | | Dixie | | | Adjustments | | | Consolidated | |
ASSETS | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 7,473,145 | | | $ | 512,709 | | | $ | (4,074,521 | )(a) | | $ | 3,911,333 | |
| Accounts receivable, net | | | 10,683,860 | | | | 3,156,051 | | | | (14,992 | )(b) | | | 13,824,919 | |
| Inventories, net | | | 9,214,063 | | | | 1,732,892 | | | | 115,700 | (a) | | | 11,062,655 | |
| Current portion of deferred income taxes | | | 149,414 | | | | — | | | | — | | | | 149,414 | |
| Prepaid expenses and other current assets | | | 496,912 | | | | 138,428 | | | | — | | | | 635,340 | |
| | | | | | | | | | | | | |
| Total current assets | | | 28,017,394 | | | | 5,540,080 | | | | (3,973,813 | ) | | | 29,583,661 | |
PROPERTY AND EQUIPMENT: | | | | | | | | | | | | | | | | |
| Property and equipment, net | | | 831,205 | | | | 301,463 | | | | (73,146 | )(a) | | | 1,059,522 | |
OTHER ASSETS: | | | | | | | | | | | | | | | | |
| Intangible assets | | | 429,833 | | | | — | | | | 67,500 | (a) | | | 497,333 | |
| Goodwill | | | 17,308,487 | | | | — | | | | 2,807,617 | (a) | | | 20,116,104 | |
| Deferred income taxes | | | 100,812 | | | | — | | | | — | | | | 100,812 | |
| Other assets, net | | | 259,012 | | | | 36,893 | | | | — | | | | 295,905 | |
| | | | | | | | | | | | | |
| Total assets | | $ | 46,946,743 | | | $ | 5,878,436 | | | $ | (1,171,842 | ) | | $ | 51,653,337 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | |
| Accounts payable | | $ | 4,983,603 | | | $ | 2,388,390 | | | $ | (14,992 | )(b) | | $ | 7,357,001 | |
| Accrued liabilities | | | 1,283,553 | | | | 182,152 | | | | 100,000 | (a) | | | 1,565,705 | |
| Dividends payable | | | 247,128 | | | | — | | | | — | | | | 247,128 | |
| Income taxes payable | | | 700,850 | | | | — | | | | — | | | | 700,850 | |
| Current portion of long-term debt | | | 124,800 | | | | — | | | | — | | | | 124,800 | |
| | | | | | | | | | | | | |
| Total current liabilities | | | 7,339,934 | | | | 2,570,542 | | | | 85,008 | | | | 9,995,484 | |
REDEEMABLE COMMON STOCK | | | 7,250,000 | | | | — | | | | — | | | | 7,250,000 | |
DEFERRED TAX LIABILITY | | | — | | | | — | | | | 51,044 | (a) | | | 51,044 | |
LONG-TERM DEBT | | | 73,200 | | | | — | | | | 500,000 | (a) | | | 573,200 | |
STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | |
| Common stock | | | 98,842 | | | | 50,000 | | | | (48,513 | )(a) | | | 100,329 | |
| Additional paid-in capital | | | 31,469,423 | | | | 193,698 | | | | 1,304,815 | (a) | | | 32,967,936 | |
| Treasury stock | | | (657,451 | ) | | | — | | | | — | | | | (657,451 | ) |
| Retained earnings | | | 1,372,795 | | | | 3,064,196 | | | | (3,064,196 | )(a) | | | 1,372,795 | |
| | | | | | | | | | | | | |
| Total stockholders’ equity | | | 32,283,609 | | | | 3,307,894 | | | | (1,807,894 | ) | | | 33,783,609 | |
| | | | | | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 46,946,743 | | | $ | 5,878,436 | | | $ | (1,171,842 | ) | | $ | 51,653,337 | |
| | | | | | | | | | | | | |
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
-4-
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
As of June 30, 2004
The unaudited pro forma condensed consolidated balance sheet as of June 30, 2004 consists of the following information:
| | 1. | | The audited historical consolidated balance sheet of Collegiate Pacific Inc. and Subsidiaries as of June 30, 2004, as reported in the Company’s Form 10-KSB for the fiscal year ended June 30, 2004. |
| |
| | 2. | | The unaudited historical balance sheet of Dixie Sporting Goods Co., Inc. as of June 30, 2004. |
| |
| | 3. | | Pro forma adjustments. |
PRO FORMA ADJUSTMENTS:
| | (a) | | Represents the adjustments to give effect to Collegiate Pacific’s acquisition of Dixie using the purchase method of accounting as if the acquisition had occurred on June 30, 2004. A summary of the adjustments is as follows: |
Purchase price:
| | | | | |
| Cash, including $100,000 cash holdback | | $ | 4,000,000 | |
| Common stock: 148,662 shares of common stock, $10.09 per share stated value | | | 1,500,000 | |
| Notes payable | | | 500,000 | |
| Transaction costs | | | 174,521 | |
| | | | |
| Total purchase price | | $ | 6,174,521 | |
| | | | |
Allocation of purchase price based on fair values of assets and liabilities acquired:
| | | | | |
| Current assets, including cash, accounts receivable and inventories | | $ | 5,655,781 | |
| Property and equipment | | | 228,317 | |
| Other assets | | | 36,892 | |
| Identifiable intangible asset – Customer relationships | | | 57,000 | |
| Identifiable intangible asset – Contractual backlog | | | 10,500 | |
| Intangible asset-Goodwill | | | 2,807,617 | |
| Current liabilities, including accounts payable and accrued liabilities | | | (2,570,542 | ) |
| Non-current deferred tax liability | | | (51,044 | ) |
| | | | |
| Fair market value of assets and liabilities acquired | | $ | 6,174,521 | |
| | | | |
| | (b) | | This pro forma adjustment reflects the elimination of intercompany accounts receivable and accounts payable balances as of June 30, 2004. |
-5-
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
For the year ended June 30, 2004
| | | | | | | | | | | | | | | | | |
| | | Collegiate | | | | | | | Pro Forma | | | Pro Forma | |
| | | Pacific | | | Dixie | | | Adjustments | | | Consolidated | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 39,561,521 | | | $ | 18,984,367 | | | $ | (106,699 | )(a) | | $ | 58,439,189 | |
| | | | | | | | | | | | | | | | | |
| Cost of sales | | | 25,372,325 | | | | 13,246,604 | | | | 9,001 | (b) | | | 38,627,930 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 14,189,196 | | | | 5,737,763 | | | | (115,700 | ) | | | 19,811,259 | |
| | | | | | | | | | | | | | | | | |
| Selling, general and administrative expenses | | | 10,866,254 | | | | 5,028,317 | | | | — | | | | 15,894,571 | |
| Amortization expense | | | 119,232 | | | | — | | | | 16,200 | (c) | | | 135,432 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating profit | | | 3,203,710 | | | | 709,446 | | | | (131,900 | ) | | | 3,781,256 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest expense | | | (52,415 | ) | | | (12,014 | ) | | | — | | | | (64,429 | ) |
| Interest income | | | 22,388 | | | | 17,917 | | | | — | | | | 40,305 | |
| Other | | | 18,376 | | | | 122,343 | | | | — | | | | 140,719 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total other expense | | | (11,651 | ) | | | 128,246 | | | | — | | | | 116,595 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 3,192,059 | | | | 837,692 | | | | (131,900 | ) | | | 3,897,851 | |
| | | | | | | | | | | | | | | | | |
| Provision for income tax | | | 1,308,367 | | | | — | | | | 282,317 | (d) | | | 1,590,684 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,883,692 | | | $ | 837,692 | | | $ | (414,217 | ) | | $ | 2,307,167 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 6,324,950 | | | | | | | | 148,662 | | | | 6,473,612 | |
| | | | | | | | | | | | | | |
| Diluted | | | 7,571,910 | | | | | | | | 148,662 | | | | 7,720,572 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income per share common stock — basic | | $ | 0.30 | | | | | | | | | | | $ | 0.36 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income per share common stock — diluted | | $ | 0.25 | | | | | | | | | | | $ | 0.30 | |
| | | | | | | | | | | | | | | |
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income.
-6-
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
For the year ended June 30, 2004
The unaudited pro forma condensed consolidated statement of income for the fiscal year ended June 30, 2004, consists of the following information:
| | 1. | | The audited historical consolidated statement of income for Collegiate Pacific Inc. and Subsidiaries for the fiscal year ended June 30, 2004, as reported in the Company’s Form 10-KSB for the fiscal year ended June 30, 2004. |
| |
| | 2. | | The unaudited historical statement of income for Dixie Sporting Goods Co., Inc. for the twelve months ended June 30, 2004. |
| |
| | 3. | | Pro forma adjustments. |
PRO FORMA ADJUSTMENTS:
| | (a) | | The pro forma adjustment to net sales reflects the elimination of intercompany sales during the twelve months ended June 30, 2004. |
| |
| | (b) | | The pro forma adjustment to cost of sales reflects the following: |
| | • | | the recognition of $115,700 in expense related to the adjustment of Dixie’s inventory balance at the date of purchase; and |
| |
| | • | | the elimination of intercompany cost of sales during the twelve months ended June 30, 2004. |
| | (c) | | The pro forma adjustment to selling, general and administrative expenses reflects the recognition of amortization expense related to identifiable intangible assets that were recorded on the date of purchase. |
| |
| | (d) | | The pro forma adjustment to provision for income taxes is to reflect the recognition of income tax expense at a 40% effective tax rate. Historically, Dixie was an S corporation and did not pay income taxes. |
-7-
COLLEGIATE PACIFIC INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
For the year ended June 30, 2004
The following is a reconciliation of the statement of income for the year ended December 31, 2003 to the pro-forma statement of income for the year ended June 30, 2004:
| | | | | | | | | | | | | | | | | |
| | | Six Months | | | Twelve Months | | | Six Months | | | Twelve Months | |
| | | Ended | | | Ended | | | Ended | | | Ended | |
| | | June 30, | | | December 31, | | | June 30, | | | June 30, | |
| | | 2004 | | | 2003 | | | 2003 | | | 2004 | |
| | | (unaudited) | | | | | | | (unaudited) | | | (unaudited) | |
| Net sales | | $ | 8,581,598 | | | $ | 18,600,386 | | | $ | (8,197,617 | ) | | $ | 18,984,367 | |
| Cost of sales | | | 5,932,063 | | | | 13,075,738 | | | | (5,761,197 | ) | | | 13,246,604 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 2,649,535 | | | | 5,524,648 | | | | (2,436,420 | ) | | | 5,737,763 | |
| | | | | | | | | | | | | | | | | |
| Selling, general, and administrative expenses | | | 2,590,967 | | | | 4,869,217 | | | | (2,431,867 | ) | | | 5,028,317 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 58,568 | | | | 655,431 | | | | (4,553 | ) | | | 709,446 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest expense | | | (3,825 | ) | | | (18,515 | ) | | | 10,326 | | | | (12,014 | ) |
| Finance charges | | | 31,212 | | | | 37,549 | | | | (19,670 | ) | | | 49,091 | |
| Interest and dividend income | | | 16,444 | | | | 18,447 | | | | (16,974 | ) | | | 17,917 | |
| Other income | | | 32,966 | | | | 69,308 | | | | (29,022 | ) | | | 73,252 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 135,365 | | | $ | 762,220 | | | $ | (59,893 | ) | | $ | 837,692 | |
| | | | | | | | | | | | | |
-8-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Collegiate Pacific Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | |
| Date: October 4, 2005 | COLLEGIATE PACIFIC INC.
| |
| | By: | /s/ William R. Estill | |
| | | William R. Estill, Chief Financial Officer | |
| | | | |
| |
-9-
