Sport Supply Group, Inc. reported revenues of $23.2 million for the quarter ended June 30, 2005 as compared with revenues of $25.1 million for the same quarter last year. Net income was $621,000 for the quarter against net income of $1.3 million for last year's quarter.

Terry Babilla, SSG's president and chief operating officer, commented that “Although we are pleased to report another profitable quarter, we are disappointed with the decline in revenues. Approximately $1 million of the decline in revenues was because SSG had 3 more shipping days in the quarter ended June 30, 2004 as compared to the quarter ended June 30, 2005. These additional shipping days resulted from SSG changing its fiscal year-end last year from a 52/53 week fiscal year ending on the last Friday in March of each year to March 31. Consequently, the quarter ending June 30, 2004 included a transition period from March 27, 2004 through March 31, 2004. In addition, during the quarter ended June 30, 2004, SSG shipped orders for the U.S. Government totaling approximately $825,000 that did not recur in the quarter ended June 30, 2005.

Gross profit margins were down 1.2% as a percentage of revenues for the quarter, from 29.8% to 28.6%. The decline in gross profit as a percentage of revenues was principally due to lower revenues and increased freight costs. Base product margins were consistent with the same quarter last year.

Although selling, general and administrative expenses were down approximately $75,000 during the quarter ended June 30, 2005, SSG incurred approximately $200,000 in incremental legal fees related to a failed transaction with an unaffiliated third party during this quarter. The company does not expect to incur these legal fees in future quarters.

No income tax provision is reflected in our income statement because we have net operating loss carryforwards of approximately $19 million.

We are committed to continuing to focus our attention on establishing a profitable and scaleable operation. We believe we have stabilized our operating cost base and will now direct more strategic attention and resources to growing our revenues and margins in a very competitive market.”

(Unaudited - amounts in $000's, except earnings per share)

                                             Three Months Ended June
                                                2005          2004
                                          ------------- --------------
Net revenues                                   $23,226        $25,104
Cost of sales                                   16,574         17,625
                                          ------------- --------------
Gross profit                                     6,652          7,479
Selling, general & administrative expenses       5,639          5,706
Depreciation & Amortization                        345            418
                                          ------------- --------------
Operating profit (loss)                            668          1,355

Interest & other expense                            47             59
                                          ------------- --------------

Income (loss) before taxes                         621          1,296
Provision for income taxes
                                          ------------- --------------

Net income (loss)                                 $621         $1,296
                                          ------------- --------------

Earnings per share:
                       Basic                    $0.070         $0.145
                     Diluted                    $0.068         $0.145