Sport Supply Group Q2 Earnings Fall as Sales Dip 3.0%

Sport Supply Group announced net income before cumulative effect of accounting change for the quarter ended June 2003 was $115,000 compared to $210,000 for the quarter ended June 2002. Earnings per share for the quarter, before cumulative effect of accounting change, was $0.01 per diluted share as compared to $0.02 the previous year.

The June 2002 quarter reflects 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 loss for the quarter ending June 2002 was ($0.81) per diluted share after this non-cash charge.

The Company reported continued customer migration to its websites. Orders entered over its websites increased by 91% for the quarter and sales over its websites increased by more than 50% from the same quarter last year. During the quarter the Company processed more than 9,100 orders over the web as compared to 4,800 orders last year for the comparable period.

John P. Walker, President stated, “The results of the June quarter continue to build upon our strategy of making the Company more efficient while at the same time executing our core fundamentals.

“While state and federal budget cuts have affected school spending, we have been successful in increasing our core business with schools during the quarter. Our results reflect softness in our resale and dealer revenues while our traditional direct mail business performed better as compared to the same quarter last year. We continue to see strong migration to the Company's websites that will allow us to continue to enjoy significant savings in overhead.

“We are continuing our revenue diversification strategies to broaden our market reach and expand our sales of sporting goods beyond our traditional institutional sporting goods customer base. Sales and marketing programs directed to big-box retail, corporations, associations and consumers are being launched. We anticipate these efforts will contribute revenue later this fiscal year.”

Sport Supply Group Inc
Summary Financial Information
First Quarter Ended June 27, 2003

Summary Operating Results                          Quarter Ended
                                             -------------------------
                                               June 2003    June 2002
                                             ------------ ------------
                                              (unaudited)  (unaudited)
Revenues                                      25,961,460   26,773,157
Gross Profit                                   7,374,801    8,139,289
SG&A Expenses                                  6,937,190    7,553,030
Internet Expenses                                117,340       73,619
                                             ------------ ------------
Operating Income                                 320,271      512,640
Interest & Other Expense                         136,249      176,074
Taxes On Income                                   68,979      126,844
                                             ------------ ------------
Net Income  Before Cumulative
         Effect of Accounting Change             115,043      209,722
Cumulative Effect of Accounting Change                     (7,442,432)
Net Income (Loss) After Cumulative
         Effect of Accounting Change             115,043   (7,232,710)
                                             ------------ ------------

EPS - Before Accounting Change                      $.01        $0.02
EPS - After Accounting Change                       $.01       $(0.81)