Sport Supply Group Gets Q4 Lift; Swings to Profit for Year…

Sport Supply Group, Inc. reported its fourth consecutive quarter of significantly improved operating results, with revenue for the fiscal fourth quarter ended March 31, 2005 increasing 12.8% to $27.4 million from $24.2 million in the year-ago period.

Gross margins improved 410 basis points to 29.2% of sales versus 25.1% in Q4 last year. SG&A expenses dropped 840 basis points for the quarter from 30.0% of sales last year to 21.6% in 2005. SG&A expenses for the year also dropped, aiding in the net income increase. SSG reported $1.5 million in net income, or 17 cents per diluted share for the first quarter versus a net loss of $2.1 million, or 24 cents per share in the year-ago quarter, which helped counter a Q3 net loss to bring income back into positive territory for the year.

The company's balance sheet as of March 31 also reflects significant improvements as compared to 2004, including a $4 million reduction in long term debt and a $2 million increase in Stockholders' Equity.

Operating income for the year was $2.2 million, which translates into a $6.1 million operating income improvement from the last fiscal year. Of note is the fact that the 2004 net loss included a $2.7 million gain that was recorded as a result of the sale of the company's subsidiary Athletic Training Equipment Company. Excluding this one-time gain, net income for the 2005 fiscal year improved by $6.5 million.