Sport Supply Group Reports FY08 EPS of $0.76, Up 105%; Q408 EPS of $0.15 vs. ($0.03)

DALLAS--(Business Wire)--
Sport Supply Group, Inc. (NASDAQ: RBI) today reported a 105%
increase in its fully diluted earnings per share for the fiscal year
ending June 30, 2008. Metrics for the Quarter and the Year Ending
period are noted below:

For the Fourth Fiscal Quarter Ending June 30, 2008

-- Net Sales Up 8.9% to $61.1 Million

-- Gross Margin Percentage Up 180 basis points from 34.4% to
36.2%

-- SG&A Expenses Down 2% from $18.4 Million to $18.1 Million

-- Operating Profit Up 352% from $895,000 to $4.0 Million

-- Fully Diluted EPS Up from ($0.03) to $0.15

For the Fiscal Year Ending June 30, 2008

-- Net Sales Up 6.1% to $251.4 Million

-- Gross Margin Percentage Up 100 basis points from 35.2% to
36.2%

-- SG&A Expenses Up less than 1% from $70.8 Million to $71.37
Million

-- Operating Profit Up 55% from $12.69 Million to $19.7 Million

-- Fully Diluted EPS Up from $0.37 to $0.76

-- EBITDA Up 44% from $16.3 Million to $23.6 Million; Net Income
Up 152% from $3.9 Million to $9.7 Million

-- Cash on-hand Up 262% from $5.6 Million to $20.5 Million

-- Free Cash Flow from Operations of $1.75 Per Share; Cash Flow
from Operations of $1.89 Per 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 Company's 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, Mr. 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 company's 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."

The Company will host a conference call to discuss these results
at 7:45AM CT / 8:45AM ET today, Wednesday August 27, 2008. The call
can be accessed by dialing 866 383 8008 and using passcode 19765404. A
replay of the call will be available until 9/5/2008 by dialing 888 286
8010 and using passcode 84585490.

Sport Supply Group, Inc. is the nation's leading marketer,
manufacturer and distributor of sporting goods and branded team
uniforms to the institutional and team sports market. The Company
markets via 3 million direct catalogs, a 40 person telesales team, 160
direct sales professionals, more than 50 select Platinum Team Dealer
Partners and a family of company-controlled websites.

This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements relating to Sport
Supply Group's anticipated financial performance, business prospects,
acquisition opportunities, new developments and similar matters,
and/or statements preceded by, followed by or that include the words
"believes," "could," "expects," "anticipates," "estimates," "intends,"
"plans," or similar expressions. These forward-looking statements are
based on management's current expectations and assumptions, which are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. Actual results may differ
materially from those suggested by the forward-looking statements due
to a variety of factors, including changes in business, political, and
economic conditions, actions and initiatives by current and potential
competitors, and certain other additional factors described in Sport
Supply Group's filings with the Securities and Exchange Commission.
Other unknown or unpredictable factors also could have material
adverse effects on Sport Supply Group's future results, performance or
achievements. In light of these risks, uncertainties, assumptions and
factors, the forward-looking events or outcomes discussed in this
press release may not occur. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date stated, or if no date is stated, as of the date of this press
release. Sport Supply Group is not under any obligation and does not
intend to make publicly available any update or other revisions to any
of the forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release or
to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be realized.

-0-
*T

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)

Three Months Ended Twelve Months Ended
---------------------------------------------------
June 30, June 30,
---------------------------------------------------
2008 2007 2008 2007
---------------------------------------------------
Net Sales $ 61,110 $ 56,073 $ 251,394 $ 236,855
Cost of Sales 39,014 36,782 160,315 153,295
---------------------------------------------------
Gross Profit 22,096 19,291 91,079 83,560
Selling, general
and
administrative
expenses 18,051 18,396 71,379 70,870
---------------------------------------------------
Operating
profit 4,045 895 19,700 12,690
---------------------------------------------------
Other Income
(Expense):
Interest
Income 88 49 290 191
Interest
Expense (951) (1,578) (4,105) (6,002)
Other Income 47 37 124 146
---------------------------------------------------
Total other
expense (816) (1,492) (3,691) (5,665)
---------------------------------------------------
Income before
minority interest
in income of
consolidated
subsidiary and
income taxes 3,229 (597) 16,009 7,025
Income tax
provision 1,420 (295) 6,276 2,634
Minority interest
in income of
consolidated
subsidiary, net
of tax -- -- -- 531
---------------------------------------------------
Net income $ 1,809 $ (302) $ 9,733 $ 3,860
===================================================
Weighted average
number of shares
outstanding:
Basic 12,361,816 10,248,078 12,122,765 10,235,308
===================================================
Diluted 12,478,174 10,248,078 15,656,672 10,373,907
===================================================
Net income per
share- basic $ 0.15 $ (0.03) $ 0.80 $ 0.38
===================================================
Net income per
share- diluted $ 0.15 $ (0.03) $ 0.76 $ 0.37
===================================================
Dividends declared
per share common
stock $ 0.025 $ 0.025 $ 0.10 $ 0.10
===================================================
*T

-0-
*T

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

June 30,
----------------------
2008 2007
---------- ----------
(In thousands, except
share and per
share amounts)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 20,531 $ 5,670
Accounts receivable, net of allowance for
doubtful accounts of $1,320 and $1,296,
respectively 34,060 31,154
Inventories, net 36,318 32,241
Current portion of deferred income taxes 3,866 3,790
Prepaid income taxes -- 3,208
Prepaid expenses and other current assets 1,203 1,380
---------- ----------
Total current assets 95,978 77,443
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $7,576 and $4,986,
respectively 9,715 10,678
DEFERRED DEBT ISSUANCE COSTS, net of
accumulated amortization of $2,978 and $2,035,
respectively 1,389 2,309
INTANGIBLE ASSETS, net of accumulated
amortization of $4,431 and $3,379,
respectively 6,972 8,024
GOODWILL 53,543 54,949
DEFERRED INCOME TAXES -- 3,045
OTHER ASSETS, net 98 144
---------- ----------
Total assets $ 167,695 $ 156,592
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 21,183 $ 16,167
Accrued liabilities 11,842 10,318
Dividends payable 309 259
Accrued interest 240 291
Current portion of long-term debt 108 3,608
Income taxes payable 677 --
Deferred tax liability -- 129
---------- ----------
Total current liabilities 34,359 30,772
DEFERRED INCOME TAX LIABILITY 4,014 3,898
NOTES PAYABLE AND OTHER LONG-TERM DEBT 50,036 71,386
---------- ----------
Total liabilities 88,409 106,056
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 1,000,000
shares authorized; no shares issued -- --
Common stock, $0.01 par value, 50,000,000
shares authorized;
12,465,986 and 10,440,586 shares issued and
12,362,060 and 10,354,560 shares
outstanding, respectively 125 104
Additional paid-in capital 64,648 44,276
Retained earnings 15,316 6,813
Treasury stock at cost, 103,926 and 86,026
shares, respectively (803) (657)
---------- ----------
Total stockholders' equity 79,286 50,536
---------- ----------

Total liabilities and stockholders'
equity $ 167,695 $ 156,592
========== ==========
*T

-0-
*T

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended June 30,
------------------------------
2008 2007 2006
--------- --------- ----------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 9,733 $ 3,860 $ 1,896
Adjustments to reconcile net
income to cash provided by (used
in) operating activities:
Provision for uncollectible
accounts receivable 1,028 1,099 982
Depreciation and amortization
expense 3,738 3,479 3,436
Amortization of deferred debt
issuance costs 943 959 683
Loss on disposition of property
and equipment -- -- 60
Deferred tax expense 4,362 2,542 1,060
Stock-based compensation
expense 494 -- 60
Minority interest in
consolidated subsidiary -- 531 608
Changes in operating assets and
liabilities (net of effects of
acquisitions):
Accounts receivable (3,934) (1,249) (2,793)
Inventories (4,077) 4,944 (2,083)
Prepaid Income taxes and income
taxes payable 3,885 (1,601) (962)
Prepaid expenses and other
current assets 177 819 (1,248)
Other assets, net 46 (313) (145)
Accounts payable 5,016 1,365 (1,338)
Accrued liabilities and accrued
interest 1,473 2,452 (388)
--------- --------- ----------

Net cash provided by (used in)
operating activities 22,884 18,887 (172)
--------- --------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and
equipment (1,723) (2,980) (1,694)
Cash used in business
acquisitions, net of cash
acquired of $0, $0 and $864,
respectively -- (24,907) (44,395)
--------- --------- ----------
Net cash used in investing
activities (1,723) (27,887) (46,089)
--------- --------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred debt issuance cost (23) -- --
Proceeds from bank line of credit 1,015 34,935 174,895
Payments on notes payable and line
of credit (25,865) (24,435) (164,046)
Cash paid for treasury shares (145) -- --
Payment of dividends (1,180) (1,024) (1,020)
Tax benefit related to the
exercise of stock options 378 507 --
Proceeds from issuance of common
stock 19,520 608 185
--------- --------- ----------
Net cash provided by (used in)
financing activities (6,300) 10,591 10,014
--------- --------- ----------

Net change in cash and cash
equivalents 14,861 1,591 (36,247)
Cash and cash equivalents,
beginning of year 5,670 4,079 40,326
--------- --------- ----------
Cash and cash equivalents, end
of year $ 20,531 $ 5,670 $ 4,079
========= ========= ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 3,181 $ 5,041 $ 3,795
========= ========= ==========
Cash paid (refunded) for
income taxes $ (1,752) $ 1,378 $ 1,612
========= ========= ==========
*T

-0-
*T

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS TO EBITDA AND
ADJUSTED EBITDA
(Unaudited, in thousands)

Three Months Ended Fiscal Year Ended
June 30, June 30,
------------------- ------------------
2008 2007 2008 2007
-------- --------- -------- --------

Net Income $ 1,809 $ (302) $ 9,733 $ 3,860
Provision for income taxes 1,420 (295) 6,276 2,634
Minority interest in
consolidated subsidiary -- -- -- 531
Interest Expense, net of
interest income 863 1,529 3,815 5,811
Depreciation and
amortization 940 926 3,738 3,479
EBITDA (a) 5,032 1,858 23,562 16,315
------------------- ------------------
Other expenses:
Stock-based compensation
expense 139 -- 494 --
------------------- ------------------
Adjusted EBITDA (a) $ 5,171 $ 1,858 $ 24,056 $ 16,315
=================== ==================
*T

(a) EBITDA and adjusted EBITDA are non-GAAP financial measures.
EBITDA is defined as net income before interest expense (net of
interest income), income taxes, depreciation and amortization.
Adjusted EBITDA is defined as net income before interest expense (net
of interest income), income taxes, depreciation, amortization, and
other items included in the caption above labeled "Other expenses"
which do not directly relate to the ongoing operations. SSG management
relies on EBITDA and adjusted EBITDA as the primary measures to review
and assess operating performance. SSG believes it is useful to
investors to provide disclosures of its operating results on the same
basis that is used by management. Management and investors also review
EBITDA and adjusted EBITDA to evaluate SSG's overall performance and
to compare SSG's current operating results with corresponding periods
and with other companies. You should not consider EBITDA and adjusted
EBITDA in isolation or as a substitute for net income, operating cash
flows or other cash flow statement data determined in accordance with
accounting principles generally accepted in the United States of
America. Because EBITDA and Adjusted EBITDA are not measures of
financial performance under accounting principles generally accepted
in the United States of America and are susceptible to varying
calculations, they may not be comparable to similarly titled measures
of other companies.

-0-
*T

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES
TO FREE CASH FLOW FROM OPERATIONS AND FREE CASH FLOW FROM OPERATIONS
PER SHARE
(Unaudited, in thousands)

Fiscal Year Ended June 30,
--------------------------
2008 2007
------------ ------------

Net cash provided by operating activities $ 22,884 $ 18,887

Adjustments to reconcile net cash provided
by operating activities to free cash flow
from operations:

Capital expenditures (1,723) (2,980)
------------ ------------

Free cash flow from operations (b) $ 21,161 $ 15,907
============ ============

Weighted average shares outstanding 12,122,765 10,235,308

Free cash flow from operations per share
(b) $ 1.75 $ 1.55
============ ============
*T

(b) Free cash flow from operations and free cash flow from
operations per share are non-GAAP financial measures. Free cash flow
from operations is defined as net cash provided by (used in) operating
activities less capital expenditures. Free cash flow from operations
per share is defined as net cash provided by (used in) operating
activities less capital expenditures, divided by the number of
weighted average shares outstanding. SSG management relies on free
cash flow from operations and free cash flow from operations per share
as primary measures to review and assess liquidity. SSG believes it is
useful to investors to provide disclosures of its operating results on
the same basis that is used by management. Management and investors
also review free cash flow from operations and free cash flow from
operations per share to evaluate SSG's overall performance and to
compare SSG's current results with corresponding periods and with
other companies. You should not consider free cash flow from
operations and free cash flow from operations per share in isolation
or as a substitute for net cash provided by (used in) operating
activities or other cash flow statement data determined in accordance
with accounting principles generally accepted in the United States of
America. In addition, free cash flow from operations and free cash
flow from operations per share do not necessarily represent funds
available for discretionary use and are not necessarily measures of
SSG's ability to fund its cash needs. Because free cash flow from
operations and free cash flow from operations per share are not
measures of financial performance under accounting principles
generally accepted in the United States of America and are susceptible
to varying calculations, they may not be comparable to similarly
titled measures of other companies.

Sport Supply Group, Inc., Dallas
Adam Blumenfeld, 972-243-8100

Copyright Business Wire 2008