Sport Supply Group announced results for the three and nine months ended December 26, 2003. Revenues were $14.7 million for the quarter and $59.7 million for the nine months ended December 2003, remaining relatively unchanged
from the prior year periods. Gross profit, as a percentage of revenues, declined to 25.5% and 26.8% from 25.9% and 28.4% for the three and nine months ended December 2003 and December 2002, respectively. This decline was primarily due to aggressive competitive pricing and increased costs associated with freight and import
expenses. Net income increased substantially to $581,000 from a loss
of $2.4 million in the same period a year ago. The increase in net
income was due to a gain realized from the sale of Athletic Training
Equipment Company, Inc., the Company's wholly owned subsidiary
(“ATEC”). Earnings per share were $0.07 for the quarter compared to a
loss per share of $0.26 for the same quarter last year with year to
date earnings per share rising to $0.05 compared to a loss per share
of $1.07 last year.
During the December 2003 quarter, the Company substantially
restructured its operations by discontinuing or selling certain of its
team dealer operations and selling ATEC. The discontinuance and
related sales of these operations resulted in a $3.2 million gain on
discontinued operations for the quarter ended December 2003 and a
year-to-date gain of approximately $3.0 million. The prior year to
date period reflects a one-time, $7.4 million non-cash charge from the
cumulative effect of accounting change associated with implementing
Financial Accounting Standards Board Statement 142 (Accounting for
Goodwill and Other Intangible Assets).
Geoffrey P. Jurick, Chairman & Chief Executive Officer of Sport
Supply Group stated, “We are pleased to have sold ATEC as well as the
various team dealer locations. These restructuring efforts were
critical in improving SSG's balance sheet strength and liquidity in
addition to allowing us to more directly focus on our core business.”
Commenting further, Mr. Jurick stated, “As evidenced by the
reduction in debt of approximately $10 million, SSG is clearly in a
better position to address its competitive business environment.”
SSG also announced that it has changed its fiscal year-end to
March 31. Previously, SSG maintained a 52/53 week fiscal year ending
on the last Friday in March of each year. SSG will now maintain a
fiscal year beginning on April 1 of each year and ending on March 31
the following year. In connection with this change, SSG will now
maintain fiscal quarters ending on June 30, September 30, December 31
and March 31 of each year. Consequently, the quarter ending June 30,
2004 will include the transition period from March 27, 2004 through
March 31, 2004.
SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
December December December December
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net revenues $14,725,593 $15,126,330 $59,704,979 $58,711,581
Cost of sales 10,978,003 11,215,159 43,723,052 42,054,673
------------ ------------ ------------ ------------
Gross profit 3,747,590 3,911,171 15,981,927 16,656,908
Selling, general &
Administrative
expenses 6,205,269 6,135,731 18,215,298 18,938,253
------------ ------------ ------------ ------------
Operating loss (2,457,679) (2,224,560) (2,233,371) (2,281,345)
Interest expense (116,435) (134,417) (413,476) (445,817)
Other income, net 2,050 19,960 4,412 15,898
------------ ------------ ------------ ------------
Loss from
continuing
operations
Before income tax
and cumulative
Effect of
accounting
change (2,572,064) (2,339,017) (2,642,435) (2,711,264)
Provision for
income taxes
for continuing
operations -- (111,485) -- --
------------ ------------ ------------ ------------
Loss from
continuing
operations (2,572,064) (2,450,502) (2,642,435) (2,711,264)
Discontinued
operations, net of
tax 3,153,327 91,693 3,048,483 584,400
Cumulative effect
of accounting
change -- -- -- (7,442,432)
------------ ------------ ------------ ------------
Net income (loss) $581,263 $(2,358,809) $406,048 $(9,569,296)
============ ============ ============ ============
Basic earnings
(loss) per share:
Loss from
continuing
operations $(0.29) $(0.27) $(0.30) $(0.30)
Discontinued
operations 0.36 0.01 0.35 0.06
Cumulative effect
of accounting
change 0.00 0.00 0.00 (0.83)
------------ ------------ ------------ ------------
Basic earnings
(loss) per share $0.07 $(0.26) $0.05 $(1.07)
============ ============ ============ ============
Diluted earnings
(loss) per share:
Loss from
continuing
operations $(0.29) $(0.27) $(0.30) $(0.30)
Discontinued
operations 0.36 0.01 0.35 0.06
Cumulative effect
of accounting
change 0.00 0.00 0.00 (0.83)
------------ ------------ ------------ ------------
Diluted earnings
(loss) per share $0.07 $(0.26) $0.05 $(1.07)
============ ============ ============ ============
Weighted average common
shares outstanding
Basic 8,917,244 8,917,244 8,917,244 8,917,244
Diluted 8,924,101 8,917,244 8,925,208 8,917,244
SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY BALANCE SHEETS
(UNAUDITED)
December 26, 2003 March 28, 2003
----------------- ----------------
Cash and cash equivalents 2,643,132 2,142,302
Accounts receivable 8,586,945 20,245,675
Inventory 17,670,670 19,564,314
Other current assets 2,596,355 2,102,125
----------------- ----------------
Total current assets 31,497,102 44,054,416
Plant, property and equipment 7,106,165 8,519,936
Other assets 6,438,313 9,421,287
----------------- ----------------
Total assets 45,041,580 61,995,639
----------------- ----------------
Current liabilities 9,688,363 16,338,359
Long term debt 6,901,642 17,611,753
Stockholder's equity 28,451,575 28,045,527
----------------- ----------------
Total liabilities and equity 45,041,580 61,995,639
----------------- ----------------
