Sport Supply Group reported sales rose 5.3% in the first quarter ended Sept. 30, to $77.5 million from $73.6 million. Earnings were basically flat at $5 million though earnings per share improved to 37 cents from 35 cents due to fewer shares outstanding. The company also raised its EPS guidance for the year.

Free Cash Flow from Operations Increased 61% to $6.2 Million from $3.8 Million

Commenting on the Quarter, Adam Blumenfeld, Chairman and Chief
Executive Officer, stated: “I am proud to report outstanding results
for our important first fiscal quarter. Delivering such results in this
challenging economy is a testament to our talented and dedicated team
of nearly 800 employees nationwide, to our non-retail oriented direct
selling business model, and our diversified base of more than 100,000
institutional customers.

“The company generated 5.3% sales growth in our largest and most
difficult comparative sales quarter of the year and, simultaneously,
produced record operating profits. Strength in sales was broad based
with our Catalog Platform producing 7.3% organic top line growth, and
our Road Sales Platform producing 3.0% top line growth. The combination
of solid sales growth, stable gross margins and well controlled
SG&A expenses resulted in record earnings per share.

“Additionally, we added $6.0 million in cash to our balance sheet over
the last ninety days, bringing cash on-hand to $16.7 million as of
September 30, 2009. This strong cash position, coupled with an untapped
$40 million credit facility with Bank of America and continued positive
cash flow, uniquely positions Sport Supply Group to both repay our
remaining outstanding convertible debentures on December 1, 2009 and
monetize internal and external expansion opportunities as situations
merit. We have worked diligently over the last two years to deliver
superior results while also building a highly scalable infrastructure.
We believe SSG is better positioned today – strategically,
operationally and financially – to become a materially larger and more
profitable corporation.”

Blumenfeld concluded: “While we still expect the economy may
experience challenges, we think the current operating environment lends
itself to a ‘strong get stronger’ scenario and favors Sport Supply
Group’s best of breed direct selling platform. We look forward to
executing on our many existing organic growth drivers while we continue
to evaluate a full pipeline of joint venture and acquisition related
opportunities – all with an eye towards increasing returns for our
shareholders.”


Additional Recent Developments

    * Acquisition of Webster, Doerner, and Har-bell sales teams expands SSG’s reach vertically into key territories and accounts
    * Exclusive five year contract with U.S. Communities, effective
October 1, 2009, for P.E. product, athletic equipment and uniforms to
act as a cornerstone for the Company’s organic school district
aggregation efforts – via catalog and online procurement
    * Exclusive multi year contract with Focused Fitness provides SSG a
curriculum-based approach to the fight against childhood obesity
    * Exclusive alliance with Prepsportswear.com provides more than
1200 SKUS of customized apparel for individuals, coaching staffs, teams
and leagues – enhancing our B2C and B2B product lines.


Outlook

The company stated today that it is raising FY10 EPS guidance to a
range of 91 cents to $1.00 per diluted share. The company previously said it expected earnings in the range of 89 cents to 97 cents.