Sports Supply Group’s ’07 Profits Soar 106%

Sport Supply Group, formerly Collegiate Pacific, reported earnings jumped 106% in its fiscal year ended June 30, to $3.86 million or 38 cents a share, from $1.9 million, or 19 cents, a year ago. Revenues increased 5.6% to $236.9 million from $224.2 million.

Adam Blumenfeld, Chairman and CEO, stated: “Fiscal 2007 was a year of immense change and platform building for the company, and set the stage – we believe – for an exciting future. Despite notable distractions from the mid-year completion of the SSG acquisition, migration of the Catalog Group onto SAP by June 30, 2007 and completion of our Sarbanes Oxley compliance work by fiscal year end, we are proud to have grown both sales and profits, and achieved a number of important objectives.”

Blumenfeld listed the objectives:
• Top-Line Growth to $236.9 Million;
• Gross Margin Improvement of 180 Basis Points to 35.3%
• Operating Profit Growth of 53% to $12.7 Million;
• Net Income Growth of 104% to $3.9 Million;
• EPS Growth of 106% to $0.37;
• Re-Branding of the Company's Catalog, Telesales and Internet Activities;
• Reduction in company-wide inventories by $4.9M to approximately $32.2M through SKU consolidation efforts;
• Reduction in outstanding senior bank debt from $37.2 Million in November 2006 to $4.4 Million as of July 31, 2007.

“Improving the income statement and balance sheet during a period of such tremendous operating flux is a testament to our loyal and hard working employees. We believe this year's heavy lifting will produce a far more scalable and profitable Sport Supply Group for the years to come.”

Looking ahead, Mr. Blumenfeld stated: “We are pleased to offer fully diluted EPS guidance for Fiscal 2008 of $0.60 to $0.70. This guidance includes approximately $0.03 per share of non cash charges related to stock based compensation, and also includes an additional $0.03 in estimated dilution from the recent $18.3 million equity infusion from Andell Holdings. We anticipate net sales will grow by approximately 5% to $250 Million, and gross margins will expand 50-100bps. Regarding SG&A, we are highly focused on reducing unnecessary operating expenses in order to fully maximize the earnings potential of the Company. While we do not provide quarterly guidance, we do anticipate that quarterly comparisons will tend to improve sequentially as the year unfolds, and efficiencies from the recently completed SAP migration and facility consolidations are more fully realized.”

Mr. Blumenfeld concluded: “Fiscal 2008 marks year two of our three year operating plan. Our intention is to 'Integrate, Optimize and Grow.' While integration work still continues, we see the Company progressing towards optimization mode in FY08. We intend to aggressively improve the efficiency of our operations and reduce cost, in order to enhance earnings, expand cash flows and set the stage for the years ahead.”

 SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME


                                 For the fiscal years ended June 30,
                                ————————————–
                                    2007         2006         2005
                                ———— ———— ————
                                 (In thousands, except share and per
                                              share data)
Net sales                       $   236,855  $   224,238  $   106,339
Cost of sales                       153,295      149,159       70,385
                                ———— ———— ————

    Gross profit                     83,560       75,079       35,954

Selling, general and
 administrative expenses             70,870       66,767       28,651

    Operating profit                 12,690        8,312        7,303
                                ———— ———— ————

Other income (expense):
  Interest income                       191          117          581
  Interest expense                   (6,002)      (4,545)      (2,160)
  Other income                          146          223          174
                                ———— ———— ————

    Total other expense              (5,665)      (4,205)      (1,405)
                                ———— ———— ————

    Income before minority
     interest in income of
     consolidated subsidiary
     and income taxes
                                      7,025        4,107        5,898

Income tax provision                  2,634        1,603        2,297
Minority interest in income of
 consolidated subsidiary, net
 of tax                                 531          608            –
                                ———— ———— ————

    Net income                  $     3,860  $     1,896  $     3,601
                                ============ ============ ============

Weighted average number of
 shares outstanding:
    Basic                        10,235,308   10,182,428   10,031,314
                                ============ ============ ============
    Diluted                      10,373,907   10,399,130   10,279,185
                                ============ ============ ============

Net income per share of common
 stock – basic                  $      0.38  $      0.19  $      0.36
                                ============ ============ ============
Net income per share of common
 stock – diluted                $      0.37  $      0.18  $      0.35
                                ============ ============ ============

Dividends declared per share of
 common stock                   $      0.10  $      0.10  $      0.10
                                ============ ============ ============