Sport Supply Group reported sales climbed 8.9% in the fourth quarter ended June 30, to $61.1 million. The company earned $1.81 million, or 15 a share, against as loss of $302,000, or 3, a year ago.
Gross margins improved 180 basis points from 34.4% to 36.2% while SG&A expenses were reduced 2% from $18.4 million to $18.1 million. Operating profit jumped 352% from $895,000 to $4.0 million.
For the full year, sales were up 6.1% to $251.4 million. Gross margins improved 100 basis points from 35.2% to 36.2%; SG&A expenses were up less than 1% from $70.8 million to $71.37 million. Operating profit advanced 55% from $12.69 million to $19.7 million.
EBITDA in the full year was up 44% from $16.3 Million to $23.6 Million while net income surged 152% from $3.9 million, 37 cents, to $9.7 million, or 76 cents.
At the close of its fiscal year, cash on-hand was up 262% from $5.6 million to $20.5 million. Free cash flow from operations were $1.75 per share; cash flow from pperations reached $1.89 a share
Adam Blumenfeld, Chairman and CEO, stated: “We are pleased to report outstanding results for the Quarter and Year ended June 30, 2008. As noted above, every operating metric showed significant improvement for the Quarter and the Year. These achievements are a tribute to the nearly 800 hard-working employees we have across the United States. We are particularly proud of the companys ability to grow annual sales organically by 6.1%-to more than a quarter of a billion dollars-during a year where we cut 25% of our paper catalog circulation and eliminated approximately 1,000 SKUs from the catalogs. This speaks to the improved marketing, merchandising, list management and relationship development strategies that were implemented during the year. In addition, we held expenses nearly flat year over year, which was a key factor in driving operating profit growth in Fiscal 2008. We intend to continue attacking the cost structure of our business as aggressively as we target sales growth opportunities, producing significant operating leverage and maximizing the efficiency of our platform.”
Regarding go-forward strategies and Fiscal 2009, Blumenfeld commented: “The company has guided FY09 GAAP diluted EPS within the range of $0.85 – $0.95 per fully diluted share. While we acknowledge that no company is immune to the risks associated with the current macroeconomic environment, we believe Sport Supply Group will be able to take advantage of potential industry weakness and gain share from smaller competitors. In times of economic uncertainty customers tend to gravitate to trusted, value-oriented suppliers, which is precisely the proposition SSG offers its nearly 100,000 active customers and base of nearly 400,000 potential customers. We have launched several new programs-including enhanced prospecting efforts and the opportunistic recruiting of seasoned industry salespeople-designed to accelerate organic growth and take advantage of under-serviced markets and accounts.
“Additionally, we continue to review a full pipeline of acquisition candidates and are carefully evaluating opportunities to expand our geographic footprint and/or stable of proprietary equipment brands. The companys operating platform and capital structure are better positioned than ever to digest acquisition targets. We will maintain a strict set of criteria for targets and focus attention on those who can be both accretive to earnings and a powerful strategic fit as we continue to expand our presence and reach in this multi billion dollar space.”