Sport Supply Group, the entity formed with the merger of Collegiate Pacific and the former Sport Supply Group, reported last week that fiscal second quarter revenues rose 9.5% to $54 million from $49 million in the prior-year period. The bottom line for the period ended December 31 showed a profit of $452,000, or 4 cents a share, against a loss of $871,000, or 9 cents per share, in the fiscal 2007 second quarter.
Sales in the catalog group were up about 8%, driven by strong elementary and early-childhood sales, and strong B2C holiday Internet sales.
“The catalog circulation program that we put in place earlier in the year, which constituted about one million catalogs less than the prior period, and more refined circulation and marketing of them, has been effective,” said Adam Blumenfeld, Sport Supply's chairman and CEO, on a conference call with analysts. “To grow our top-line at this pace, in spite of those changes and in spite of the 1,000 SKUs that we took out of the mix, suggests that it was the right move to make and that we're executing it properly.”
Sales in its road sales group increased about 11%, marked by strong basketball uniform demand and successful footwear deliveries.
Gross margins were up 40 basis points to 35.6% vs. 35.2% a year ago. The catalog group had margins in the high 30s to near 40%.
Controlled discounting and a leveraging of its buying power were suggested as reasons for GM expansion.
Selling, general and administrative expenses declined to 32.6% of sales from 34.9%. Inventories declined 21% to $31.8 million from $40.1 million. Regarding backlogs, open orders as of December 31 stood at $12.3 million versus $11.2 million the preceding year, a 9.7% increase.
Blumenfeld said Sport Supply continues look to grow from an organic perspective, joint venture perspective, and acquisitions. Regarding organic growth, the company is continuing to look to new channels, and wants to be a bigger player in both the cheerleading market and spirit market, as well as the adaptive health or rehabilitation market. It also sees penetration into its current and new account base, through its telesales group, catalogs, and network of platinum dealers,
Blumenfeld noted that with $55 million in available capacity under its credit facility, Sports Supply will be again look at acquisitions.
“As we see accretive opportunities to add partners to this platform, whether it be interesting brand to bolt into the base of the platform and take through our vertical channel, or interesting geographic opportunities on the catalog side, or on the distribution front, we will take advantage of those opportunities to continue to grow our profitability and our critical mass,” said Blumenfeld.
