FOR FURTHER INFORMATION:

At the Company:

John P. Walker

President

972/406-7108

 

    

 

FOR IMMEDIATE RELEASE

Friday, June 28, 2002

SPORT SUPPLY GROUP ANNOUNCES IMPROVED RESULTS FOR THE THREE-MONTHS AND FISCAL YEAR ENDED MARCH 29, 2002

Fourth Quarter Profit Improves and Year End Loss Narrows, Company Expects Continued Improvement in Financial Results

 

Dallas, Texas Friday June, 28 2002 - Sport Supply Group, Inc. today announced improved results for the three-months and fiscal-year ended March 2002.

Fiscal Year 2002 Highlights Compared to Fiscal 2001

Quarter Ended March 2002 Highlights Compared to Quarter Ended March 2001

Net revenues for the fiscal year ended March 29, 2002 were $103.6 million, down 8.4% from the prior year. The decrease in revenues was primarily due to the result of a general slow-down in the economy, reduced participation in traditional youth sports, a reduced sales force and the discontinuation of certain unprofitable and low margin product lines. Gross margin was 28.5%,unchanged from the prior year. SSG realized a 10% reduction in operating expenses for the year. Operating expenses were $32.3 million as compared to $35.9 million for the prior fiscal year. The loss before taxes improved by 37% or $2.1 million from the prior year. SSG recorded a $2.1 million income tax benefit in the prior year, but did not recognize an income tax benefit for the current year. The loss per share for the year improved from $.45 per share to $.40 per share in the current year.

Net sales for the quarter ended March 2002 were $30.4 million down 5.5% from the prior year’s quarter. Gross margin increased 1% to 29% for the current quarter. SSG reduced operating expenses by 5.2% or approximately $400,000 for the quarter ended March 2002 as compared to last year. Pretax income increased 345%, to $768,000 for the quarter ended March 2002. Earnings per share improved from $0.01 to $0.09 for the quarter ended March 2002.

The number of orders received over the internet increased by 30% in the past fiscal year. This increase in migration to the web by its customers has allowed the Company to enjoy significant savings in order processing and customer service costs. Since the start of its new fiscal year, internet orders have increased by almost 75% over the same period last year. The Company believes it will continue to have a significant increase in its electronic catalogue business, which is expected to have a favorable impact on sales and profitability in the next year.

John P. Walker, President stated, "The progress of SSG in the past year is readily evident in our financial results when compared to last year. During the past year we began the process of outsourcing many of the products historically manufactured by us. This process, while impacting the short-term sales of certain lines, has allowed the Company to consolidate existing plants and improve remaining manufacturing efficiencies.

This strategy has enabled us to transition the Company from a manufacturing concern to a more nimble marketing and distribution company offering better quality products, with more features to our customers at improved margins.

Two years ago we embarked on a plan to supplement the Company’s direct mail selling effort with an entirely integrated e-commerce platform that would pave the way for electronic cataloguing. Today, SSG is one of the leaders in the sporting goods industry in IT development and e-commerce solutions. Our technology has now been developed further to form more than 157 associate marketing alliances reaching more than 28 million participants. The purpose of the associate program is to create strong bonds with the participating organizations that will purchase SSG’s sporting goods and recreational products for use in their activities and enable the organization to raise funds for their own purposes. Since we offer our technology to participating organizations free of charge, they do not have to commit significant amounts of financial and human capital to develop such technology. Our associate program is growing each day and we expect to double the number of participants by the end of the year.

As we continue into the new fiscal year, we believe the changes made to the Company’s marketing, product development and operational infrastructure continues to have a beneficial impact on the Company’s performance."

For more information about Sport Supply Group or to sign up as an associate for your own on line sporting goods store, please visit www.sportsupplygroup.com.

This news release, other than the historical information, consists of forward looking statements that involve risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Reports on Form 10-K and Form 10-Q. Such forward-looking statements are made based on management’s belief as well as assumptions made by, and information currently available to, management pursuant to the ‘safe harbor’ provisions of the Private Securities Litigation Reform Act of 1995. Actual results may vary materially.

 

 

Sport Supply Group, Inc.

Summary Operating Results and Balance Sheets

Fiscal Year Ended March 2002

Summary Operating Results

12 Months

Ended

Quarter

Ended

March 2002

March 2001

March 2002

March 2001

Revenues

103,601

113,061

30,358

32,135

Gross Profit

29,495

32,252

8,835

9,019

Operating Expense

32,285

35,880

8,001

8,436

Operating Income

(2,790)

(3,628)

834

583

Interest & Other Expense

792

2,017

66

412

Net Income Before Taxes

(3,582)

(5,645)

768

171

Summary Balance Sheets

March 2002

March 2001

Cash and equivalents

587

1,271

Accounts Receivable

19,060

19,417

Inventory

18,368

21,050

Other Current Assets

2,219

2,266

Total Current Assets

40,234

44,004

Property

9,951

11,408

Other Assets

17,122

18,172

Total Assets

67,307

73,584

Current Liabilities

13,258

15,622

Long Term Debt

17,000

17,333

Stockholders' Equity

37,049

40,629

Total Liabilities and Equity

67,307

73,584

Please refer to our Form 10-K as filed with the SEC for complete financial information.