Accounting Changes Wipe Out Sports Supply Fiscal Year Earnings Gains

Net revenues for the fiscal year ended March 28, 2003 were $102.6 million as compared to $103.6 million the prior year. The decrease in revenues for the year was primarily attributable to lower revenues in the Company’s team dealer business.

Gross margin improved 0.8% to 29.3% from 28.5% a year ago. Selling, general and administrative expenses were reduced 4.4% to $30.5 million as compared to $31.9 million last year. The loss before taxes and cumulative effect of accounting change improved by $2.0 million or 56.4% to a loss of $1.6 million as compared to a loss of $3.6 million last year. The loss per share before cumulative effect of accounting change was $0.18 per diluted share as compared to a loss per share of $0.40 the previous year. After a one-time, $7.4 million non-cash charge associated with the cumulative accounting effect of implementing Financial Accounting Standards Board Statement 142 (Accounting for Goodwill and Other Intangible Assets), the Company’s net loss was $9.0 million, or $1.01 per diluted share.

Net revenues for the quarter ended March 2003 were $31.2 million, up 2.8% from the same quarter last year. Gross margin decreased 1.0% from 29.1% to 28.1%, and selling, general and administrative expenses were $7.9 million in both 2003 and 2002. Operating Income for the March quarter decreased 11.3% to $749,000. Net income for the quarter was $567,000 as compared to $768,000 the prior year. Earnings per share were $0.06 per diluted share compared to $0.09 per diluted share for the quarter ended March 2002.

The number of orders received and revenues generated over the Internet increased significantly in the past fiscal year. During the fiscal year ended March 2003 the Company processed more than 20,000 orders and generated 70% revenue growth over the Internet. This increase in migration of customers to our websites has helped the Company enjoy significant savings in order processing and customer service costs.

Our Associate Program, developed by the Company in 2002, now has more than 1,350 participating organizations. We expect continued revenue growth from this effort, as organizations look for strategic alliances that help fund various athletic programs that benefit their participants. The Company is in the process of launching an e procurement model specifically designed for schools that will enable school districts, one of the Company’s largest revenue segments, to incorporate on-line order entry, purchasing preferences and invoice processing into the Company’s SAP system. The Company believes that this solution will help its school customers process orders more efficiently and reduce order-processing costs for both the school districts and SSG.

John P. Walker, President stated, “We continue to execute the elements of our strategic plan begun two years ago. Our plan focuses on several strategic initiatives including: outsourcing manufacturing to more efficient producers, both domestically and overseas; streamlining internal operations; and migrating a significant part of our customer base to e-commerce marketing, order processing and customer service. The results of the past year, which show almost 70% improvement in the Company’s operating performance, are beginning to substantiate the programs we believe have provided and will continue to produce better operating results.

“As part of this plan, we have transferred product lines historically manufactured by the Company to more efficient manufacturers, primarily in Asia. We have achieved significant cost reductions over the past two years in our expenses and cost of sales. Our e-commerce platform continues to expand and enhances our marketing and sales efforts, improves on-line customer service and reduces order processing costs.

“We are confident that we are executing these strategies in a manner that will produce profitable results that maximize returns to our shareholders. At the same time, we are continuing to position the Company to aggressively market and sell sporting goods and recreational products in today’s very competitive and technologically challenging world.”

Sport Supply Group, Inc.
Summary Operating Results and Balance Sheets
Fiscal Year Ended March 2003

Sport Supply Group Inc
Summary Operating Results           12 Months Ended    Quarter Ended
                                   ----------------- -----------------
(in $000)                           March    March    March    March
                                     2003     2002     2003     2002
                                   -------- -------- -------- --------

Revenues                           102,617  103,601   31,238   30,358
Gross Profit                        30,029   29,495    8,790    8,835

SG&A Expenses                       30,511   31,929    7,879    7,914
Internet Expenses                      461      356      161       86
Operating Income (Loss)               (943)  (2,790)     750      835
Interest & Other Expense               618      792      183       67
Net Income (Loss) Before Cumulative
     Effect of Accounting Change    (1,561)  (3,582)     567      768

Cumulative Effect of Accounting
 Change                             (7,442)
Net Income (Loss) After
     Effect of Accounting Change    (9,003)  (3,582)     567      768