Sport Supply Group Swings to Fiscal Q2 Profit

Sport Supply Group, Inc. reported net income of approximately $1 million and $2.3 million for the three and six month periods ended Sept. 30, 2004. These profitable results compare with losses of approximately ($300,000) and ($175,000) for the same periods last year. Earnings per share for the three and six month periods ended Sept. 30, 2004 improved to $.11 and $.26 per share from a loss of ($.03) and ($.02) per share for the three and six months ended September 26, 2003.

Geoffrey P. Jurick, Chairman of the Board and Chief Executive Officer, commented that, “We are very pleased with the results of our turnaround efforts initiated during September of last year. Our plan envisioned returning to profitability by increasing revenues and gross profit margins while simultaneously reducing our operating expenses as a percentage of our revenues. During the first six months of this fiscal year we accomplished our plan by increasing organic revenues by approximately 7.5%, increasing gross profit margins from 27.2% to 29.4%, and reducing our operating expenses from 26.7% to 24.4%. These solid improvements were achieved with the spirited efforts and diligence of all our employees.”

“Our objective going forward will be to continue to improve our operating results by making our business more scaleable to generate incremental revenues without increasing our global overhead expenses. In order to reach this goal, we have begun implementing a sophisticated telephony system and have further expanded our Internet capabilities. During the last six months, we received over 34,000 orders and 19,000 customer inquiries through the Internet, which enables our customers to order our products and check on the status of their orders 24 hours a day, 7 days a week.”

“We are also continuing to enter into relationships with strategically located sporting goods store fronts that promote increasing sales of our products. We provide these store fronts with e-commerce websites enabling them to operate proprietary e-commerce businesses. Their websites are linked to our fully-integrated system that electronically processes and fulfills orders entered on their websites. Our e-commerce platform includes website design, online merchandising, order fulfillment, customer contact center, online marketing services, merchandise and order management. These types of arrangements capitalize on our manufacturing, distribution and technology strengths by providing the store fronts a full line of competitively priced sporting goods and physical education products generated by our global supply chain. We believe continuous advances in our product development and sourcing efficiencies will support further expansion of distribution relationships and institutional revenues.”

              SPORT SUPPLY GROUP, INC.  AND SUBSIDIARIES
               CONSOLIDATED  STATEMENTS  OF  OPERATIONS
                             (UNAUDITED)
              (in thousands, except earnings per share)

                            Three Months Ended     Six Months Ended
                                 September             September
                              2004       2003       2004       2003
                           ---------- ---------- ---------- ----------

 Net revenues                $23,262    $22,445    $48,367    $44,979
 Cost of sales                16,514     16,380     34,139     32,745
                           ---------- ---------- ---------- ----------
 Gross profit                  6,748      6,065     14,228     12,234
 Selling, general &
   administrative expenses     5,687      6,174     11,812     12,010
                           ---------- ---------- ---------- ----------

 Operating profit (loss)       1,061       (109)     2,416        224

 Interest & other expense         52        150        110        294
                           ---------- ---------- ---------- ----------
 Income before taxes           1,009       (259)     2,306        (70)
 Provision for income taxes                 (69)
                           ---------- ---------- ---------- ----------
 Net income (loss)
   before discontinued
    operations                 1,009       (190)     2,306        (70)
 Discontinued operations                   (100)                 (105)
                           ---------- ---------- ---------- ----------
 Net income (loss)            $1,009      $(290)    $2,306      $(175)
                           ---------- ---------- ---------- ----------

 Basic earnings (loss) per
  share:                       $0.11     $(0.03)     $0.26     $(0.02)
 Diluted earnings (loss)
  per share:                   $0.11     $(0.03)     $0.26     $(0.02)