RBI Sport Supply Grp. Del (MM)

The Company will host a conference call at 3:30PM CT / 4:30PM ET today, April 29, 2008. The call may be accessed by dialing 866 825 3354 and using pass code 55675289. A replay of the call is available by dialing 888 286 8010 and using pass code 22237904. Sport Supply Group, Inc. (NASDAQ: RBI) today reported record sales and earnings results for the three and nine months ended March 31, 2008. Financial Highlights for the Three Months Ended March 31, 2008 compared to the Three Months Ended March 31, 2007 Sales Up 4.1% to $65.8 Million Gross Margin Percentage Up 50bps to 36.6% SG&A Expense Down $671,000 to $17.8 Million Operating Income Up 44% to $6.3 Million Net Income Up 94% to $3.4 Million EPS up 47% to $0.25 per diluted share, on 15% Increase in Shares Financial Highlights for the Nine Months Ended March 31, 2008 compared to the Nine Months Ended March 31, 2007 Sales Up 5.3% to $190 Million Gross Margin Percentage Up 70bps to 36.3% SG&A Up Approximately 1.6%, or $850,000 Operating Income Up 33% to $15.7 Million Net Income Up 90% to $8.0 Million EPS Up 53% to $0.61 per diluted share Net Cash Provided by Operating Activities Up 171% to $15.1 Million Adam Blumenfeld, Chairman of the Board and CEO, stated: �We are pleased to announce today�s results which showcase continued strong operating performance across the platform. It is a testament to our managers and hardworking employees that virtually every key metric is moving in the right direction, most notably SG&A, which actually decreased $671,000 for the quarter ended March 31, 2008 versus the year-ago comparative period. The combination of top-line growth, gross margin expansion and year over year expense reduction proved to be the perfect recipe for significant growth in cash flows and earnings leverage, allowing the company to produce operating margins of approximately 10% for the third quarter, and a 47% increase in earnings per share. �Strategically, we are very pleased with both the performance and positioning of the Company. In this challenging macroeconomic environment, we believe - more than ever - entities with a superior balance sheet, seasoned management and a scalable infrastructure will be rewarded. Sport Supply Group, with its growing cash position and dominant footprint within the institutional sporting goods space, has significant flexibility in terms of next steps. We continue to review a number of organic and/or acquisition related opportunities as we look to further enhance the platform and leverage our position in the marketplace.� 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 approximately 3 million direct catalogs, a 40-man telesales team, approximately 190 direct sales professionals 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, 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 due to the threat of future terrorist activity or otherwise, 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 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. � � SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME � (UNAUDITED) (In thousands, except share and per share amounts) � Three Months Ended � Nine Months Ended March 31, � March 31, 2008 � 2007 � 2008 � 2007 Net Sales $ 65,821 � $ 63,235 $ 190,284 � $ 180,782 Cost of Sales � 41,739 � � � 40,404 � � � 121,301 � � � 116,513 � � Gross Profit 24,082 22,831 68,983 64,269 � Selling, general and administrative expenses � 17,750 � � � 18,421 � � � 53,328 � � � 52,474 � � Operating profit � 6,332 � � � 4,410 � � � 15,655 � � � 11,795 � � Other Income (Expense): Interest Income 45 28 202 142 Interest Expense (974 ) (1,707 ) (3,154 ) (4,424 ) Other Income � 42 � � � 17 � � � 77 � � � 109 � � Total other expense � (887 ) � � (1,662 ) � � (2,875 ) � � (4,173 ) � Income before minority interest in income of consolidated subsidiary and income taxes 5,445 2,748 12,780 7,622 � Income tax provision 2,069 1,010 4,856 2,929 � Minority interest in income of consolidated subsidiary, net of tax � -- � � � -- � � � -- � � � 531 � � Net income $ 3,376 � � $ 1,738 � � $ 7,924 � � $ 4,162 � � Weighted average number of shares outstanding: Basic � 12,296,813 � � � 10,233,560 � � � 12,043,082 � � � 10,231,051 � Diluted � 15,842,816 � � � 13,774,358 � � � 15,578,514 � � � 10,375,469 � � Net income per share� basic $ 0.27 � � $ 0.17 � � $ 0.66 � � $ 0.41 � Net income per share� diluted $ 0.25 � � $ 0.17 � � $ 0.61 � � $ 0.40 � Dividends declared per share common stock $ 0.025 � � $ 0.025 � � $ 0.075 � � $ 0.075 � � � SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars In thousands) � March 31,2008 � June 30,2007 ASSETS (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 13,045 $ 5,670 Accounts receivable, net of allowance fordoubtful accounts of $1,501 and $1,296, respectively 40,131 31,154 Inventories 32,303 32,241 Current portion of deferred income taxes 3,605 3,790 Prepaid income taxes 96 3,208 Prepaid expenses and other current assets � 2,381 � � � 1,380 � � TOTAL CURRENT ASSETS 91,561 77,443 � PROPERTY AND EQUIPMENT, net of accumulateddepreciation of $6,910 and $4,986, respectively 10,049 10,678 DEFERRED DEBT ISSUANCE COSTS, net ofaccumulated amortization of $2,754 and $2,035, respectively 1,613 2,309 INTANGIBLE ASSETS, net of accumulatedamortization of $4,177 and $3,379, respectively 7,226 8,024 GOODWILL 54,949 54,949 DEFERRED INCOME TAXES -- 3,045 OTHER ASSETS, NET � 113 � � � 144 � � TOTAL ASSETS $ 165,511 � � $ 156,592 � � LIABILITIES AND STOCKHOLDERS' EQUITY � CURRENT LIABILITIES: Accounts payable $ 20,861 $ 16,167 Accrued liabilities 11,255 10,318 Dividends payable 309 259 Accrued interest 958 291 Current portion of long-term debt 108 3,608 Deferred income tax liability � -- � � � 129 � � TOTAL CURRENT LIABILITIES 33,491 30,772 � � DEFERRED INCOME TAX LIABILITY 4,698 3,898 NOTES PAYABLE AND OTHER LONG-TERM DEBT 50,092 71,386 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, 50,000,000shares authorized; 12,465,386 and10,440,586 shares issued and 12,361,460and 10,354,560 shares outstanding, respectively 125 104 Additional paid-in capital 64,092 44,276 Retained earnings 13,816 6,813 Treasury stock at cost, 103,926 and 86,026, respectively � (803 ) � � (657 ) � TOTAL STOCKHOLDERS� EQUITY � 77,230 � � � 50,536 � � TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 165,511 � � $ 156,592 � � � SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (In thousands) � Nine Months Ended March 31, 2008 � 2007 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,924 $ 4,162 Adjustments to reconcile net income to net cashprovided by operating activities: Provision for uncollectible accounts receivable 714 1,307 Depreciation and amortization 2,798 2,553 Amortization of deferred debt issuance costs 719 705 Deferred taxes 3,901 1,952 Stock-based compensation expense 355 -- Minority interest in consolidated subsidiary -- 531 Changes in assets and liabilities: Accounts receivable (9,691 ) (7,332 ) Inventories (62 ) 1,594 Prepaid income taxes 3,112 (20 ) Prepaid expenses and other current assets (1,001 ) (339 ) Other assets, net 31 (321 ) Accounts payable 4,694 (333 ) Accrued liabilities and accrued interest � 1,604 � � � 1,105 � Net cash provided by operating activities � 15,098 � � � 5,564 � � � CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment � (1,371 ) (1,429 ) Cash used in business acquisitions � -- � � � (24,907 ) � Net cash used in investing activities � (1,371 ) � � (26,336 ) � CASH FLOWS FROM FINANCING ACTIVITIES: Deferred debt issuance cost (23 ) -- Proceeds from bank line of credit 1,015 34,024 Payment on notes payable and line of credit (25,809 ) (13,415 ) Cash paid for treasury shares (145 ) -- Payment of dividends (871 ) (768 ) Proceeds from issuance of common stock � 19,481 � � � 37 � Net cash provided by (used in) financing activities � (6,352 ) � � 19,878 � � Net change in cash and cash equivalents 7,375 (894 ) Cash and cash equivalents, beginning of year � 5,670 � � � 4,079 � Cash and cash equivalents, end of period $ 13,045 � � $ 3,185 � � SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 1,976 $ 2,963 Cash paid (refunded) for income taxes $ (1,696 ) $ 1,042