Sport Supply Group Announces Record Q1 EPS of $0.37 per Share; Sales Growth of 5.3% in Company`s Quarter Ended September 30, 2009

http://www.businesswire.com/news/home/20091104006179/en

* Raising FY10 EPS Guidance to $0.91 - $1.00 per diluted share
* Introducing FY10 Sales Guidance for Top Line Growth of $13 - $20 Million to
$263 - $270 Million
* Introducing FY10 Operating Cash Flow Estimate of $17 - $19 Million; Free Cash
Flow Estimate of $16 - $18 Million
* Cash Balance Increased to $16.7 Million from $10.7 Million in last Ninety
Days

DALLAS--(Business Wire)--
Sport Supply Group, Inc. (NASDAQ: RBI) today announced record results for its
first fiscal quarter ended September 30, 2009. Financial highlights from the
Quarter include:

* Net Sales Increased 5.3% to $77.5 Million from $73.6 Million
* Gross Margins of 36.0%
* SG&A Expenses of 24.7%
* Operating Margins of 11.3%
* Diluted Earnings Per Share of $0.37 Per Share vs. $0.35 in Year Ago Period
* Free Cash Flow from Operations Increased 61% to $6.2 Million from $3.8
Million

The Company will host a conference call at 3:30PM CT / 4:30PM ET today, November
4, 2009 to discuss these results and future plans. The call may be accessed by
dialing 866-578-5788 and using pass code 86060318. A replay of the call will be
available for seven days and can be accessed by dialing 888-286-8010 and using
pass code 33545513.

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."

Mr. 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
$0.91 - $1.00 per diluted share; introducing operating cash flow estimates of
$17 - $19 Million, and Free Cash Flow estimates of $16 - $18 Million. The
Company estimates FY10 sales growth of approximately $13 - $20 Million to a
range of $263 - $270 Million, up from $250.2 Million in Fiscal 2009.

About Sport Supply Group

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 man
telesales team, more than 200 direct sales professionals, 60 Platinum
Re-distribution 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 the Company's anticipated financial
performance, business prospects, 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 which changes may negatively impact school and other government
supported budgets as well as the cost of doing business, actions and initiatives
by current and potential competitors, the availability and cost of financing,
and certain other additional factors described in the Company's filings with the
Securities and Exchange Commission, including under the heading "Risk Factors"
in the Company`s annual reports on Form 10-K and under the heading "Risk
Factors" and/or "Statement Regarding Forward-Looking Disclosure" in the
Company`s quarterly reports on Form 10-Q. Other unknown or unpredictable factors
also could have material adverse effects on the Company's future results,
performance or achievements. In light of these risks, uncertainties, assumptions
and factors, the forward-looking events 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. The Company 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.

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

Three Months Ended
September 30,
2009 2008

Net sales $ 77,470 $ 73,577
Cost of sales 49,566 46,658

Gross profit 27,904 26,919

Selling, general and administrative expenses 19,150 18,254
Operating profit 8,754 8,665

Other income (expense):
Interest income 17 77
Interest expense (526 ) (737 )
Other income - 20

Total other expense, net (509 ) (640 )

Income before income taxes 8,245 8,025

Income tax provision 3,186 2,964

Net income $ 5,059 $ 5,061

Weighted average number of shares outstanding:
Basic 12,455,490 12,428,249
Diluted 14,526,121 15,749,619

Net income per share common stock - basic $ 0.41 $ 0.41
Net income per share common stock - diluted $ 0.37 $ 0.35
Dividends declared per share common stock $ 0.025 $ 0.025

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands)

September 30, June 30,
2009 2009

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,720 $ 10,743
Accounts receivable, net 44,556 32,276
Inventories, net 29,980 33,872
Current portion of deferred income taxes 4,040 4,040
Prepaid expenses and other current assets 2,117 3,649
Total current assets 97,413 84,580
PROPERTY AND EQUIPMENT, net 8,240 8,504
DEFERRED DEBT ISSUANCE COSTS, net 189 291
INTANGIBLE ASSETS, net 6,046 6,226
GOODWILL 53,525 53,426
OTHER ASSETS, net 76 76
Total assets $ 165,489 $ 153,103

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 24,391 $ 20,132
Accrued liabilities 8,273 7,462
Dividends payable 312 311
Accrued interest 554 140
Current portion of long-term debt 28,882 28,892
Income taxes payable 1,347 -
Total current liabilities 63,759 56,937
DEFERRED INCOME TAX LIABILITY 4,304 4,331
Total liabilities 68,063 61,268
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS` EQUITY:
Preferred stock - -
Common stock 125 125
Additional paid-in capital 67,370 66,526
Retained earnings 30,734 25,987
Treasury stock at cost (803 ) (803 )
Total stockholders' equity 97,426 91,835

Total liabilities and stockholders' equity $ 165,489 $ 153,103

SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

For the three months ended
September 30,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,059 $ 5,061
Adjustments to reconcile net income to cash provided by
operating activities:
Provision for uncollectible accounts receivable 281 282
Depreciation and amortization 670 703
Amortization of deferred debt issuance costs 111 311
Discount on early retirement of long term debt - (250 )
Deferred taxes (27 ) 327
Stock-based compensation expense 695 284
Changes in operating assets and liabilities:
Accounts receivable (12,561 ) (9,174 )
Inventories 4,005 722
Prepaid expenses and other current assets (296 ) (1,110 )
Other assets, net - 10
Accounts payable 4,259 5,631
Income taxes payable / prepaid income taxes 3,175 1,604
Accrued liabilities and accrued interest 1,085 (351 )

Net cash provided by operating activities: 6,456 4,050

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (229 ) (193 )
Proceeds from disposals of property and equipment 52 -
Cash used in business acquisitions 121 ) -
Net cash used in investing activities: (298 ) (193 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Early retirement of long term debt - (5,234 )
Deferred debt issuance cost (9 ) -
Payments on notes payable and line of credit (10 ) (26 )
Payment of dividends (311 ) (309 )
Tax benefit related to the exercise of stock options 26 -
Proceeds from issuance of common stock 123 230
Net cash used in financing activities: (181 ) (5,339 )

Net change in cash and cash equivalents 5,977 (1,482 )
Cash and cash equivalents, beginning of period 10,743 20,531
Cash and cash equivalents, end of period $ 16,720 $ 19,049

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ - $ 55
Cash paid for income taxes $ 50 $ 1,049

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

Three Months Ended Trailing Twelve Months
September 30, Ended September 30,
2009 2008 2009 2008

Net Income $ 5,059 $ 5,061 $ 11,913 $ 10,699
Provision for income taxes 3,186 2,964 7,566 6,730
Interest expense, net of interest income 509 660 1,598 3,346
Depreciation and amortization 670 703 2,767 3,527
EBITDA (a) 9,424 9,388 23,844 24,302
Other expenses:
Stock-based compensation expense 695 284 1,567 693
Adjusted EBITDA (a) $ 10,119 $ 9,672 $ 25,411 $ 24,995

(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.

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

Three Months Ended September 30,
2009 2008

Net cash provided by operating activities $ 6,456 $ 4,050

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

Capital expenditures (229 ) (193 )

Free cash flow from operations (b) $ 6,227 $ 3,857

(b) Free cash flow from operations is a non-GAAP financial measure. Free cash
flow from operations is defined as net cash provided by (used in) operating
activities less capital expenditures. SSG management relies on free cash flow
from operations as the primary measure 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 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 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 does not necessarily represent funds available for
discretionary use and is not necessarily a measure of SSG`s ability to fund its
cash needs. Because free cash flow from operations is not a measure of financial
performance under accounting principles generally accepted in the United States
of America and is susceptible to varying calculations, it may not be comparable
to similarly titled measures of other companies.

Sport Supply Group, Inc.
Adam Blumenfeld, 972-243-0879

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