FOR FURTHER INFORMATION:
At the Company:
John P. Walker
President
972/406-7108
FOR IMMEDIATE RELEASE
Friday, August 2, 2002
SPORT SUPPLY GROUP REPORTS SIGNIFICANTLY IMPROVED RESULTS FOR THREE MONTHS ENDED JUNE 28, 2002
Associate Program Expanded to Include
more than 198 Organizations
Dallas, Texas, Friday, August 2, 2002 - Sport Supply Group, Inc. (OTCBB: SSPY) today announced profitable results for the three months ended June 28, 2002. Net revenues for the three months ended June 28, 2002 were $26.8 million as compared to $28.0 million for the same quarter last year. Gross margin for the current quarter improved to 30.4% as compared to 28.4% from the prior year. SG&A expense was $7.6 million in the current quarter as compared to $8.2 million a year ago. Operating income for the quarter was $513 thousand as compared to an operating loss of $266 thousand last year. Earnings before taxes and net income for the three months ended June 28, 2002 were $337 thousand and $210 thousand as compared to a loss before taxes of $523 thousand and a net loss of $333 thousand for the three month period ended June, 2001. Accounts receivables were reduced by almost $800 thousand, inventory was reduced by $1.7 million and bank debt was reduced by $2.5 million from the same quarter a year ago.
The Company currently has more than 198 organizations under contract with its associate program and believes these organizations have more than 28 million members. The Company’s associate program allows these organizations to incorporate SSG’s electronic catalogue and market SSG’s sporting goods products to its members in exchange for a percentage of the revenue generated from the associate’s site. The Company believes that additional associate arrangements will be signed in the next several months.
SSG reported significant gains in customer migration to its websites. Orders entered over its websites increased by almost 70% for the quarter and sales over its websites increased by more than 50% from the same quarter last year.
John P. Walker, President stated, "The improved financial results for the June quarter when compared to last year reflect management’s ongoing efforts to reorganize the Company’s manufacturing, sourcing and operating activities. Improvement in margin, selling, general and administrative expenses, and reduced interest expense for the quarter are a result of SSG’s continuing efforts to realign its product lines and merchandise those lines in the most efficient manner possible.
Our strategy for marketing the Company’s products by way of the internet, coupled with additional organizations entering our associate program, produced a significant increase in e commerce orders during the quarter. With more than 198 associates reaching more than 28 million participants, we are now beginning to work with the associates’ management to jointly promote customized marketing programs. In reviewing the activity early in this program, we are confident our associate program will create strong alliances that will lead to a more efficient allocation of marketing resources."
Sport Supply Group is a leading direct marketer and B2B e commerce supplier of sporting goods equipment to the institutional and youth sports market place. Athletes, coaches and instructors in schools, colleges, universities, governmental agencies, camps and youth organizations across the country use the Company’s products.
The Company offers an associate program that allows an organization to market and promote more than 8,000 sporting goods products directly to its participants by way of an on-line store. Product, distribution, technology and support are provided by Sport Supply Group and the marketing and promotion of the organization’s on-line store is conducted by the associate to its individual members. A high degree of customization such as unique site graphics, unique product offerings and many other features are available to an associate to customize their site to the extent desired.
For more information about Sport Supply Group’s associate program, please visit us at 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.
Quarters Ended June 2002 and 2001
Summary Financial Data Table - Unaudited
(in thousands, except earnings per share)
Summary Operating Results
Quarter
Ended
June 2002
June 2001
Revenues
26,773
27,955
Gross Profit
8,139
7,939
Operating Expense
7,626
8,205
Operating Income
513
(266)
Interest & Other Expense
176
257
Net Income Before Taxes
337
(523)
Net Income After Taxes
210
(333)
Earnings Per Share
0.02
(0.04)
Summary Balance Sheets
June 2002
March 2002
June 2001
Cash and equivalents
497
587
463
Accounts Receivable
13,984
19,060
14,355
Inventory
17,848
18,368
19,640
Other Current Assets
2,292
2,219
2,530
Total Current Assets
34,621
40,234
36,988
Property
9,571
9,951
10,898
Other Assets
16,274
17,122
17,254
Total Assets
60,466
67,307
65,140
Current Liabilities
10,843
13,258
10,030
Long Term Debt
12,364
17,000
14,814
Stockholders' Equity
37,259
37,049
40,296
Total Liabilities and Equity
60,466
67,307
65,140
Please refer to our Form 10-Q as filed with the SEC for complete financial information.