FOR FURTHER INFORMATION:

At the Company:

John P. Walker President 972/406-7108

 

FOR IMMEDIATE RELEASE

Tuesday November 4, 2002

 

SPORT SUPPLY GROUP IMPROVES FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 27, 2002

Associate Program Grows to More than 600 Organizations

 

Dallas, Texas, Monday, November 4, 2002 - Sport Supply Group, Inc. today announced improved financial results for the three and six-month periods ended September 27, 2002.

SSG has reported improved financial results for four consecutive quarters and expects continued improvement in operating results in future periods. The Company believes the programs implemented in the past 18 months to increase its e commerce revenue and merchandising utilizing the Internet is beginning to show positive results. Orders placed over the internet increased by more than 75% in the six-month period ended September compared to the same period last year and the dollar value of these orders increased by more than 55% for the same period last year. This shift in customer procurement is generating significant savings in order processing and customer service costs. The company expects continued migration as more of its customer base utilizes e commerce to procure product.

Net sales for the three months ended September 27, 2002 were $26,087,446 as compared to $28,244,583. Gross profit for the quarter was $8,031,873 (30.8%) as compared to $7,888,480 (27.9%). Net earnings for the quarter were $22,225 as compared to a net loss of ($321,461) last year.

For the six months ended September 27, 2002, net sales were $52,860,603 as compared to $56,199,814. Gross profit for this period was $16,171,163 (30.6%) as compared to $15,827,839 (28.2%). Net earnings for the six months ended September 27, 2002 were $231,946 as compared to a net loss of ($655,195) in the prior period.

SSG’s balance sheet remains strong at September 27, 2002 with total assets of $60.9 million, stockholders' equity of $37.3 million, and working capital of $23.2 million. SSG reduced its bank debt by $5.2 million from the start of the fiscal year.

SSG adopted newly issued goodwill accounting standards prescribed by Financial Accounting Standards Board Statement 142 that require a company to assess the valuation of goodwill. As of September 27, 2002, the Company has $7.4 million of goodwill and will be reporting the results of its goodwill valuation as required by the new standards in its Report on Form 10-Q for the quarter ended September 27, 2002

The Company’s associate program, started earlier this year, continues to grow in terms of the number of participants in the program and continued increases in sales. As of November 4, 2002 more than 600 organizations have joined the Company’s associate program including more than 35 Corporate associates. SSG’s associate programs now include customers from virtually every type of SSG customer, from youth leagues to schools and park departments.

The Company also announced it launched a consumer baseball catalogue, Think Sportz™, marketing brand name baseball products including Wilson, Easton, Mizuno, Schutt, and ATEC to the serious minded athlete. Think Sportz™ is expected to be followed with additional sales programs geared towards individual consumers for soccer, football and basketball. The initial effort has been supported by e commerce with a complete functional and integrated platform to compete with Internet sporting goods and consumer direct catalogue companies.

Also, the Company announced that its dealer division, Larry Black Sporting Goods, has opened a retail store in the Dallas, Texas metroplex. The 19,000 square foot facility will sell name brand team products to institutions, coaches and team participants as well as market many other sports related products to individuals and team customers.

John P. Walker, President of SSG stated, "The Company’s performance continues to improve in all of our key business units. Despite increased marketing and sales expenses to promote our associate program, the Company continues to decrease its operating expenses and make significant bottom line improvement, which is reflected in the Company’s performance over the past four quarters.

The Company’s revenue reduction has been due primarily to a soft institutional sports market centered in school sales. We are seeing a noticeable increase in the government and school sectors and we remain optimistic that the interruption to our markets as a result of last years’ events may be beginning to subside.

Our associate program and e commerce efforts continue to outpace our internal estimates. We now have more than 600 associates under contract in our associate program reaching more than 38 million sports buying participants. More than 25% of these organizations have already purchased product from SSG utilizing the unique functionality of the relationship. From the active users we are finding that more than 65% are repeat customers with the program. These alliances are now expanding outside of our traditional customer base. In the past several months, we have signed agreements with more than 35 Corporate associates not in the sporting goods marketplace targeting hundreds of thousands of employees, family members and retired employees.

The success of SSG’s associate program is readily evident in our Internet migration statistics. Internet migration since the beginning of our fiscal year has increased by more than 75% and 55% for the number of orders and dollar value of sales, respectively.

We anticipate this continued shift in our customers’ order behavior will enable us to reduce our dependence on more traditional forms of marketing expenses as early as our next fiscal year, thereby further improving the Company’s net income."

Sport Supply Group is a leading direct marketer and B2B e commerce supplier of sporting goods equipment to the institutional and youth sports marketplace. Athletes, coaches and instructors in schools, colleges, universities, governmental agencies, camps and youth organizations across the country use the Company’s products.

Emerson Radio Corp. (AMEX:MSN) owns approximately 54% of the Company’s issued and outstanding capital stock.

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.