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Sport Supply Group Reports FY08 EPS of $0.76, Up 105%; Q408 EPS of $0.15 vs. ($0.03)

DALLAS-(Business Wire)-August 27, 2008 - Sport Supply Group, Inc. (NASDAQ: RBI) today reported a 105% increase in its fully diluted earnings per share for the fiscal year ending June 30, 2008. Metrics for the Quarter and the Year Ending period are noted below:

For the Fourth Fiscal Quarter Ending June 30, 2008

For the Fiscal Year Ending June 30, 2008

Adam Blumenfeld, Chairman and CEO, stated: “We are pleased to report outstanding results for the Quarter and Year ended June 30, 2008. As noted above, every operating metric showed significant improvement for the Quarter and the Year. These achievements are a tribute to the nearly 800 hard-working employees we have across the United States. We are particularly proud of the Company’s ability to grow annual sales organically by 6.1% – to more than a quarter of a billion dollars – during a year where we cut 25% of our paper catalog circulation and eliminated approximately 1,000 SKUs from the catalogs. This speaks to the improved marketing, merchandising, list management and relationship development strategies that were implemented during the year. In addition, we held expenses nearly flat year over year, which was a key factor in driving operating profit growth in Fiscal 2008. We intend to continue attacking the cost structure of our business as aggressively as we target sales growth opportunities, producing significant operating leverage and maximizing the efficiency of our platform.â€

Regarding go-forward strategies and Fiscal 2009, Mr. Blumenfeld commented: “The Company has guided FY09 GAAP diluted EPS within the range of $0.85 - $0.95 per fully diluted share. While we acknowledge that no company is immune to the risks associated with the current macroeconomic environment, we believe Sport Supply Group will be able to take advantage of potential industry weakness and gain share from smaller competitors. In times of economic uncertainty customers tend to gravitate to trusted, value-oriented suppliers, which is precisely the proposition SSG offers its nearly 100,000 active customers and base of nearly 400,000 potential customers. We have launched several new programs – including enhanced prospecting efforts and the opportunistic recruiting of seasoned industry salespeople – designed to accelerate organic growth and take advantage of under-serviced markets and accounts.

“Additionally, we continue to review a full pipeline of acquisition candidates and are carefully evaluating opportunities to expand our geographic footprint and/or stable of proprietary equipment brands. The company’s operating platform and capital structure are better positioned than ever to digest acquisition targets. We will maintain a strict set of criteria for targets and focus attention on those who can be both accretive to earnings and a powerful strategic fit as we continue to expand our presence and reach in this multi billion dollar space.â€

The Company will host a conference call to discuss these results at 7:45AM CT / 8:45AM ET today, Wednesday August 27, 2008. The call can be accessed by dialing 866 383 8008 and using passcode 19765404. A replay of the call will be available until 9/5/2008 by dialing 888 286 8010 and using passcode 84585490.

Sport Supply Group, Inc. is the nation's leading marketer, manufacturer and distributor of sporting goods and branded team uniforms to the institutional and team sports market. The Company markets via 3 million direct catalogs, a 40 person telesales team, 160 direct sales professionals, more than 50 select Platinum Team Dealer Partners and a family of company-controlled websites.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements relating to Sport Supply Group's anticipated financial performance, business prospects, acquisition opportunities, new developments and similar matters, and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," or similar expressions. These forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those suggested by the forward-looking statements due to a variety of factors, including changes in business, political, and economic conditions, actions and initiatives by current and potential competitors, and certain other additional factors described in Sport Supply Group's filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on Sport Supply Group's future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events or outcomes discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Sport Supply Group is not under any obligation and does not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

   

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts)

 
Three Months Ended   Twelve Months Ended
June 30,   June 30,
2008   2007   2008   2007
Net Sales $ 61,110   $ 56,073 $ 251,394   $ 236,855
Cost of Sales   39,014       36,782       160,315       153,295  

Gross Profit

22,096

19,291

91,079

83,560

Selling, general and administrative expenses

 

18,051

     

18,396

     

71,379

     

70,870

 

Operating profit

 

4,045

     

895

     

19,700

     

12,690

 

Other Income (Expense):

Interest Income 88 49 290 191
Interest Expense (951 ) (1,578 ) (4,105 ) (6,002 )
Other Income   47       37       124       146  

Total other expense

 

(816

)

   

(1,492

)

   

(3,691

)

   

(5,665

)

Income before minority interest in income of consolidated subsidiary and income taxes

 

3,229

 

(597

 

)

 

16,009

 

7,025

Income tax provision

1,420

(295

)

6,276

2,634

Minority interest in income of consolidated subsidiary, net of tax   —       —       —       531  

Net income

$

1,809

   

$

(302

)

 

$

9,733

   

$

3,860

 

Weighted average number of shares outstanding:

Basic   12,361,816       10,248,078       12,122,765       10,235,308  

Diluted

 

12,478,174

     

10,248,078

     

15,656,672

     

10,373,907

 

Net income per share– basic

 

$

 

0.15

   

 

$

 

(0.03

 

)

 

 

$

 

0.80

   

 

$

 

0.38

 

Net income per share– diluted

$

0.15

   

$

(0.03

)

 

$

0.76

   

$

0.37

 

Dividends declared per share common stock

$

0.025

   

$

0.025

   

$

0.10

   

$

0.10

 

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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 
June 30,
2008   2007

(In thousands, except share and per

share amounts)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 20,531 $ 5,670

Accounts receivable, net of allowance for doubtful accounts of $1,320 and $1,296, respectively

34,060 31,154
Inventories, net 36,318 32,241
Current portion of deferred income taxes 3,866 3,790
Prepaid income taxes — 3,208
Prepaid expenses and other current assets   1,203     1,380  
Total current assets 95,978 77,443

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $7,576 and $4,986, respectively

9,715

10,678

DEFERRED DEBT ISSUANCE COSTS, net of accumulated amortization of $2,978 and $2,035, respectively

 

1,389

2,309

INTANGIBLE ASSETS, net of accumulated amortization of $4,431 and $3,379, respectively

 

6,972

8,024

GOODWILL 53,543 54,949
DEFERRED INCOME TAXES — 3,045
OTHER ASSETS, net   98     144  
Total assets $ 167,695   $ 156,592  
 
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