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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                           -------------------------

                                   FORM 10-K
(MARK ONE)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
  OF 1934.

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934.

      For the transition period from                  to

                         Commission file number 0-15767

                           -------------------------

                          THE SPORTSMAN'S GUIDE, INC.
             (Exact name of registrant as specified in its charter)

                                   MINNESOTA
                        (State or other jurisdiction of
                         incorporation or organization)
                                   41-1293081
                      (I.R.S. Employer Identification No.)

              411 FARWELL AVENUE, SOUTH ST. PAUL, MINNESOTA 55075
                    (Address of principal executive offices)

                                 (651) 451-3030
              (Registrant's telephone number, including area code)

                           -------------------------

       Securities registered pursuant to Section 12 (b) of the Act: NONE

          Securities registered pursuant to Section 12(g) of the Act:

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (Title of class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     As of February 21, 2002, the aggregate market value of the registrant's
Common Stock held by non-affiliates was approximately $20,489,424 based on the
last reported sale price of the Common Stock on such date on the NASDAQ SmallCap
Market.

     As of February 21, 2002, there were 4,748,810 shares of the registrant's
Common Stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's Proxy Statement for its Annual Meeting of
Shareholders on April 25, 2002 are incorporated by reference into Part III of
this Form 10-K.
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                                     PART I

ITEM 1. BUSINESS

     We are a leading marketer of value priced outdoor gear and general
merchandise, with a special emphasis on outdoor clothing, equipment and
footwear. We market and sell our merchandise through two primary channels:

     - catalogs; and

     - e-commerce Web sites.

     Our catalogs as well as our Web sites offer high quality products at low
prices. Our catalogs are advertised as The "Fun-to-Read" Catalog(R) and our
primary Web site is advertised as the "Fun-to-Browse" Website(R). Our Web sites
include www.sportsmansguide.com, our online retail store modeled on our print
catalogs featuring e-commerce and content, and www.bargainoutfitters.com, our
online liquidation outlet.

     Our business was started in 1970. We were incorporated under the laws of
the State of Minnesota on March 23, 1977. Our principal executive offices are
located at 411 Farwell Avenue, South St. Paul, Minnesota 55075 and our telephone
number is (651) 451-3030.

INDUSTRY OVERVIEW

     THE OUTDOOR SPORTS INDUSTRY. Statistics from the National Sporting Goods
Association ("NSGA") estimate the total annual outdoors market at $7.0 to $8.0
billion. In terms of sports, camping continues to be the leading individual
category, followed by hiking and hunting, biking and fishing.

     NSGA findings show an increase in overall athletic and sport clothing sales
of 4% in 2001. Athletic and sport footwear showed an increase of 4%, with trail
running shoes reported as the most popular footwear and showing an increase in
sales of 8%. Hunting boots were the most expensive item in the footwear market
and continued with a strong increase of $169 million in sales for 2001, a 22.8%
increase over the previous year. Discount stores and mail order catalogs
received the largest percentage of units sold for hiking and hunting boots.

     THE CATALOG INDUSTRY. Catalog sales in 2001 continued to grow. Research
conducted by the Direct Marketing Association ("DMA") in late 2001 revealed that
catalog sales increased at more than twice the rate of overall retail growth.
Overall catalog sales have been projected to total $128 billion in 2002 and
increase to $160 billion by 2006.

     ONLINE SHOPPING INDUSTRY. Looking toward the future, continued robust
growth in online shopping is expected. The Internet remains the fastest-growing
direct marketing medium. The DMA expects Internet generated sales to reach $37.1
billion in 2001, up 32% from 2000 sales.

     According to a study conducted by Ernst & Young, virtually all consumers
(98% in the U.S.) who have purchased items online say they plan to continue
their online buying, with a majority indicating that they expect to somewhat or
greatly increase their purchases in the next 12 months. Among consumers who have
not yet shopped online, 63% expect to do so in the next 12 months.

     In the same study by Ernst and Young, approximately 77% of online shoppers
worldwide reported an increase in online spending, and 25% reported purchasing
apparel online during the past 12 months. Not only are more consumers beginning
to spend more and shop in a wider range of categories, but 97% of shoppers
intend to continue shopping online, and the majority expect to spend more and
buy more products. This indicates that consumers are beginning to accept the
electronic form of purchasing and the medium is expected to keep growing as
consumers become more comfortable.

OUR CATALOGS

     We publish main, specialty and Buyer's Club editions of The Sportsman's
Guide catalog. We mailed approximately 48 million catalogs to existing and
prospective customers in 2001.
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     FORMAT. Our catalogs are designed to be fun and entertaining. Every
merchandise offering uses a highly promotional format that features various
items at sale prices. Unique to us is our product description, or copy. The
catalogs make creative and expansive use of art and copy to extensively describe
products with humorous text, call-outs, photos and photo captions. Copy is
written in the first person from Gary Olen to the reader. The catalogs are
perceived by customers as having entertainment value and are advertised as The
"Fun-to-Read" Catalog(R).

     TYPES AND PURPOSES. Main catalog editions are mailed eleven months of the
year and offer selections of our best selling products in a variety of product
categories. We also use our main catalog as our primary prospecting catalog to
test new names and new products. Response data from main catalog mailings are
used to create specialty catalogs. New customers continue to receive monthly
main catalogs in addition to specialty catalogs featuring the product categories
in which they have shown an interest through past purchases.

     Specialty catalogs contain wide selections of products from a single
product category. We identify the product categories for our specialty catalogs
based on demand generated for certain categories in our main catalogs. During
2001, we published 16 specialty catalogs targeting buyers of military surplus,
camping equipment, shooting supplies, footwear and apparel, hunting equipment
and holiday gifts. The specialty titles allow us to utilize a customized
marketing plan for individual consumer groups thereby maximizing response rates
and minimizing advertising costs as a percentage of sales. We believe that our
specialty catalog titles have been an important component in our sales growth
and have allowed us to expand our sales to existing customers and to broaden
sales to new customers beyond our historical customer profile.

     The Buyer's Club Advantage(TM) catalogs offer a wide variety of product
selections with sneak previews and exclusive deals for club members only. During
2001, we published nine Buyer's Club Advantage(TM) editions ranging from 24 to
48 pages per edition. We believe the club catalogs, as well as the growth in our
club memberships, have been an important component of our sales and
profitability growth in 2001.

     CREATIVE. All catalogs are created and designed in-house by our creative
services department which produces the advertising copy and layouts for each
catalog. Substantially all of the photographs used in the catalogs are taken at
our in-house photo studio. Artwork and copy for the catalog are transmitted in
digital format from our desktop publishing systems to a pre-press vendor and
then to the printer, which prints and mails the catalogs. These capabilities
allow us to preserve the catalog's distinctive character and allow us greater
control of the catalog production schedule, which reduces the lead time
necessary to produce catalogs. We are able to prepare and mail a catalog in
approximately 75 days. This allows us to offer new merchandise quickly to our
customers, thereby maximizing pricing opportunities while minimizing inventory
carrying costs. Because we use a value-oriented sales approach, we are able to
use a lower weight and grade of paper than our competitors to reduce our catalog
production and postage costs.

OUR WEB SITES

     Our Web sites offer online shopping as well as online content-rich
resources and information for the outdoor enthusiast. Our online retail stores
generated over $36.0 million in sales in 2001 compared to $1.3 million in 1998.
Product sales on the sites accounted for over 23% of our sales in the fourth
quarter of 2001 compared to less than 1% for all of 1998. The GuideOutdoors
NetworkTM includes the following Web sites:

     - SPORTSMANSGUIDE.COM, our online retail store and community/destination
       portal for the outdoor enthusiasts; and

     - BARGAINOUTFITTERS.COM, our online liquidation outlet.

     SPORTSMANSGUIDE.COM. Our sportsmansguide.com site is our online retail
store which was launched in April 1998. We began posting our catalogs and full
product offerings on the site in February 1999.

     Our sportsmansguide.com site is modeled on our print catalogs. The site
translates the distinctive look and editorial voice of our print catalog onto
the Internet, adding interactive functionality to make shopping an

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entertaining experience. The site is designed to be fun-to-browse and easy to
use, enabling the ordering process to be completed with a minimum of customer
effort. The site is advertised as The "Fun-to-Browse" Website(R). The site
allows customers to order merchandise from print media, view current catalogs
and request mailed catalog copies. E-mail addresses are collected through an
optional program. E-mail broadcast messages, which include a variety of
specialized product offerings, are delivered to 677,000 participants on a weekly
basis.

     In April 2001, we merged the previous Web site, guideoutdoors.com, with the
sportsmansguide.com Web site. In joining the two Web sites, we believe that we
have built a stronger site which now includes the full-line product selection
from Guide Outdoors together with the huge selection of discount priced name
brand items from The Sportsman's Guide, all within a community environment. The
sportsmansguide.com site has been expanded to offer full-line selections of
camping, fishing, footwear, clothing, hunting, archery, marine, all-terrain
vehicles, snowmobiles and hiking products at discount prices. The community
content within the sportsmansguide.com provides a broad and deep selection of
resources and information updated regularly covering all aspects of the outdoor
experience. Within the community content, the Web pages include articles on
hiking, hunting, fishing and camping experiences, DNR information, local and
national weather forecasts, tips and hints on planning an upcoming outdoor
event, photo galleries and maps. The site includes a link to our liquidation
outlet site.

     BARGAINOUTFITTERS.COM. The bargainoutfitters.com site is our online
liquidation outlet launched in November 1999. The site offers clothing and
footwear products as well as home and domestics, tools, government surplus,
automotive and electronic products that are deeply discounted, discontinued or
overstocked.

MERCHANDISING

     Our products originally were limited to a small selection of merchandise
targeted to the deer hunter. Our product offerings have gradually evolved to a
broader range of merchandise intended to appeal to the value-oriented
outdoorsman. We offer a changing mix of products.

     PRODUCTS. We offer a large selection of high value products at low prices.
These products include clothing, footwear, hunting and shooting accessories,
camping and outdoor recreation equipment, optics, electronics, personal
accessory items and a diverse range of additional offerings. Within the
sportsmansguide.com Web site, we are able to carry deeper and more diverse
product lines and merchandise categories than we have traditionally offered
through the catalog. In the last five years, we have aggressively pursued a
strategy to provide manufacturers' close-outs of name brand shoes, boots,
apparel and general merchandise, as well as government surplus from around the
world and private label products through our direct import programs. Over time,
our product offerings and marketing efforts have broadened to include those
interested in pursuing and living the outdoor lifestyle in general and the
value-oriented outdoorsman in particular. The table below indicates our
percentage of sales by product category for 2001:

<Table>
<Caption>
         PRODUCT CATEGORY             % OF SALES
------------------------------------------------
<S>                                   <C>
Clothing and Accessories..........      22.4%
Footwear..........................      20.0%
Hunting and Shooting
  Accessories.....................      16.0%
Camping and Outdoor Recreation....       7.2%
Optics............................       7.1%
</Table>

<Table>
------------------------------------------------
<Caption>
         PRODUCT CATEGORY             % OF SALES
<S>                                   <C>
Novelty and Collectibles..........       3.6%
Domestics.........................       3.6%
Automotive........................       3.1%
Furniture.........................       2.7%
Other.............................      14.3%
</Table>

     MERCHANDISE MIX. We historically offered a changing mix of in-line
products. In-line products are those products regularly available from
manufacturers. As a complement to our value pricing approach, in 1996 we began
aggressively pursuing manufacturers' close-outs of name brand shoes, boots,
clothing, watches and other merchandise, which we offer to our customers at
savings of 25% to 60% from original retail prices. We also offer government
surplus from around the world, providing customers a low-cost alternative for
items such as wool coats and pants, shirts, gloves, underwear, blankets, boots,
sleeping bags, jackets, backpacks, skis and snowshoes.

                                        4
<PAGE>

     Our merchandising strategy has been to shift our merchandise mix to a
larger percentage of manufacturers' close-outs, government surplus, private
label products and other higher margin product categories including apparel and
footwear, and to minimize the number of lower price point items, while
maintaining a broad selection of products. This strategy has added to our
customer base value-oriented customers who may not otherwise be identified as
pure outdoorsmen.

     SOURCING. Our buyers actively seek sources for products they believe will
interest our targeted customers. We seek to maintain existing and develop new
relationships with vendors to provide ongoing access to manufacturers'
close-outs, government surplus, direct imports and other items. Buyers regularly
attend trade shows, meet with vendors and make mass mailings and cold calls to
locate high quality, low price, name brand merchandise as well as unusual or
unique products. We frequently purchase large quantities of close-outs and other
individual items on an opportunistic or when-available basis. The capability to
purchase large quantities in a short time period makes us a unique and desirable
outlet for manufacturers looking to sell overstocked or discontinued products.

     We purchase our merchandise from more than 1,000 suppliers and generally
purchase all of our product needs for a particular item from one vendor. No
single supplier accounted for more than 5% of our purchases during 2001, and we
believe there are numerous sources for products in our merchandise categories.

     SELECTION. Our buyers and merchandising staff collectively select the
merchandise to be offered to customers by evaluating product availability,
pricing, historical demand, emerging merchandise trends and expected product
profitability. Each product is hand-picked, and most are field tested by our
buyers to ensure quality, functionality and proper sizing in order to maximize
appeal to customers.

     INVENTORY MANAGEMENT. Once merchandise has been selected, our inventory
analysts are responsible for ordering all merchandise, determining the quantity
and arrival date, managing inventory levels, assessing customer demand,
adjusting estimates, canceling orders for slow-moving merchandise and reordering
merchandise. Utilizing our information systems, buyers and inventory analysts
monitor product sales on a daily basis and take responsive action. Slow-moving
merchandise is actively promoted through Web sites, telemarketing, clearance
sales or, when possible, is returned to the vendor.

     As part of our merchandise liquidation strategy, we maintain a retail
outlet store at our primary warehouse and distribution facility in South St.
Paul from which we sell discontinued, overstocked, returned and regular catalog
merchandise. The retail store along with our bargainoutfitters.com Web site
provide a liquidation outlet and serve to minimize inventory mark-downs.

     CATALOG AND WEB SITE CONTENT. The merchandise offered in our catalogs and
Web sites is determined based on estimated consumer demand and product
availability. Close-outs and government surplus merchandise purchased in large
quantities are normally placed in our main catalogs as well as our online retail
stores. If a supply of merchandise is limited, it is usually offered in a
specialty catalog, a Buyer's Club Advantage(TM) catalog or is included in a
multiple page insert in the main catalog mailed to a targeted customer segment
or offered on our online retail stores. Product sales are analyzed item by item
to identify trends and help plan future merchandise offerings.

MARKETING

     Our marketing programs are based on gathering, analyzing and organizing
information on our customers. We believe that because we offer such a broad mix
of merchandise, it is particularly important for us to fully understand our
customers.

     CUSTOMER DATABASE. We maintain a proprietary customer database in which we
store detailed information on each customer in our customer list, including
demographic data and purchasing history. Our customer database contains over 4.9
million names, including over 1.0 million customers who have made purchases
within the last 12 months and 677,000 participants who have provided their
e-mail addresses. The customer database is updated regularly with information as
new purchases are recorded.

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     CUSTOMER SELECTION. We have developed our own customer selection models to
segment our customer list according to many variables, allowing our marketing
department to analyze each segment's buying patterns. We review the results of
each of our catalog mailings and the results are used to further update the
customer database to refine the frequency and selectivity of our catalog
mailings in an effort to maximize response rates and profitability.

     LIST DEVELOPMENT. Our new customer acquisition program is designed to
cost-effectively identify and capture new customers that fit our customer
profile. New customers are acquired principally through the use of targeted
mailings to individuals identified through mailing lists rented or exchanged
from other catalog companies, retail subscription lists, and lists of names
compiled from businesses whose customers have interests similar to those of our
customers. We are generally entitled to make one mailing to each name obtained
through a rented or exchanged mailing list. If the prospect responds, the name
is added to our database and may be freely used by us in the future. Through the
Internet, we have captured new customers as a result of the affiliate marketing
programs implemented throughout 2000 and 2001. We also implemented successful
sweepstakes marketing programs in 2000 and 2001 to convert our catalog customers
to online purchasers and to increase the overall number of our e-mail addresses.
We continue to pursue new sources of prospective customers, such as those who
request catalogs through advertising, through our Web site or from customer
referrals. New customers accounted for approximately 17% of our sales during
2001.

     Once new customers are acquired, our objective is to maximize the long-term
profit potential from these customers. With ongoing refinements in our approach
to merchandising and marketing, we have increased the frequency and quantity of
mailings and e-mail broadcasts to the most profitable segments of our existing
customer list. Analyses of historical purchasing patterns of existing customers,
including recency, frequency and monetary activity, are performed to assist in
merchandising and customer targeting and to increase sales to existing
customers. Existing customers accounted for approximately 83% of our sales
during 2001.

     MARKETING PROGRAMS AND PROMOTIONAL FORMATS. We strive to develop
promotional formats that will stimulate customer purchases from our catalogs and
Web sites. Successful promotional formats include different catalog wraps,
percent off coupons, dollar discounts on specific order size, and promotional
tag lines such as "last chance" offers. Since our inception on the Internet, we
have marketed our online retail store in our catalogs. In 2001, approximately 48
million catalog covers advertised our online retail store. This marketing
channel has been the principal marketing mechanism to reach our online target
audience.

     We employ a disciplined approach to our marketing activities. We test a
sample of names before mailing to a new customer group, test price and shipping
charge changes and test marketing programs and promotional formats before
full-scale implementation to ensure customer acceptance and cost-effectiveness.
The most significant, successful marketing program implemented by us has been
the Buyer's Club.

     Customers can purchase a one-year membership in our Buyer's Club for a
$29.99 fee. For this annual fee, club members can take advantage of and receive
additional savings in the form of a 10% discount on all regularly priced items
except for ammunition which is limited to a 5% discount and clearance items
which have no discount off the advertised price. Our Buyer's Club offers its
members exclusive merchandise not offered to other customers. These exclusive
product offers are limited quantity items selected for club members. Club
members are presented with sneak previews of merchandise offers and given the
opportunity to buy limited quantity items prior to non-club customers. Club
members also receive member's only bargains in the catalogs and on the Web site.

     We have found through detailed reporting and analyses that the purchase
activity, on average, of our Buyer's Club customer is two to three times greater
than a non-club member. Consequently, we have developed new marketing promotions
that have significantly increased the number of new club members. In November
and December of 2000, with these new promotional programs in place, we more than
doubled the number of new club members compared to the prior year to
approximately 133,000 members. Throughout 2001, these same and improved
promotional programs continued to be successful. At the end of 2001, we had more
than 254,000 members in our Buyer's Club, a 91% increase compared to the end of
2000.

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     Another successful marketing program implemented is our installment payment
plan, known as the "Painless 4-Pay Plan," which is available to credit card
customers with orders of $100 or more. Payments under the plan consist of 25% of
the merchandise charges, plus 100% of any shipping charges and Buyer's Club
fees, if applicable, at the time of shipment with three equal installments in 30
day increments, which are automatically charged to the customer's credit card.
No interest or additional fees are charged to customers who elect the 4-Pay
Plan. Effective in the fall of 2001, the 4-Pay plan is offered only to Buyer's
Club members. In early 2002, the name of this installment payment program was
changed to "Buyer's Club 4-Pay Plan".

     CUSTOMER SERVICE. A key element of our marketing strategy is our commitment
to customer service. We have a toll-free customer service telephone line
separate from our inbound ordering lines. We maintain a separate customer
service department staffed with full-time customer service representatives who
answer customer inquiries, reply to complaints and assist customers in returning
merchandise. The customer service department personally responds to all customer
correspondence and e-mails. Our commitment to customer service is supported by
our unconditional guarantee which allows customers to return merchandise for any
reason and at any time for refund or exchange if they are not satisfied with the
merchandise.

OPERATIONS AND FULFILLMENT

     INBOUND CALLS. We maintain an in-house call center. Approximately 63% of
customer orders are placed through our toll-free telephone lines which are
staffed 24 hours per day, seven days a week, while 15% of orders are received by
mail or facsimile and 22% of orders are received at our Web sites. Our telephone
system consists of an expandable AT&T GR3 digital switch. We are currently using
two DS3 circuits on separate paths for protection in the event of line damage or
system failure at a central office location. Additional redundancy protection is
provided by using Qwest SHARPS software that will automatically re-route the
service path until repairs can be completed. Our system is running nine T-1
lines split across the two DS3 circuits with a maximum capacity of 48 T-1
circuits. Computer telephony integration software identifies the caller and, if
known, accesses the customer's records simultaneously with answering the call.
When fully staffed, our in-house call center has the capacity of handling up to
2,600 calls per hour on average.

     We also contract with outside call centers to handle calls on an as-needed
basis. If calls become backlogged or in the event of telephone system failure,
back-up systems and rerouting capabilities allow the outside call centers to
handle inbound telephone orders. The outside call centers have access to
inventory availability and allow us to maintain our call standards.

     ORDER ENTRY. Our telemarketing department is staffed with individuals who
are familiar with the products offered in the catalogs and can offer assistance
to customers on availability, color, size, and other information. Telemarketing
sales representatives use a catalog sales system with pre-written merchandise
descriptions and sales offers and are provided monetary incentives to sell
additional merchandise to customers who order by phone. During 2001, add-on
sales averaging $9 per order were made to approximately 31% of all inbound phone
orders taken by our in-house call center.

     Processing of customer orders is coordinated and handled by our on-line
order entry system. Telephone orders and Internet orders are entered directly
into the system. Mail orders are batched and, after payment is verified, are
then entered into the system. The system is also used in connection with all
other order entry and fulfillment tasks including credit authorization, order
picking, packing and shipment. During 2001, our on-line order processing system
handled approximately 2.0 million orders.

     CREDIT AND PAYMENT TERMS. Customers can pay for orders by major credit card
or check. Orders are shipped after credit card charges are approved or checks
are received. Charges are not billed to customer credit cards until the orders
are ready for shipment.

     PICKING AND PACKING. Through our fulfillment and delivery methods, we
strive to be a low cost operator. We use an integrated computer-driven picking,
packing and shipping system. The system edits orders and generates warehouse
pick tickets and packing slips. Packers are provided monetary incentives to
ensure accuracy of orders, which has contributed to our distribution accuracy
rate in excess of 99% during 2001. We

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are able to fulfill and ship in excess of 25,000 packages per day. We believe we
have sufficient additional capacity available for the foreseeable future which
can be utilized by adding more shifts and weekends.

     SHIPPING. Our processes allow next business day shipping on orders received
by 6 p.m. CST for in-stock merchandise and same day shipping for orders taken by
11 a.m. CST via the Internet or per specific customer request. Virtually all of
our merchandise is stocked at, and shipped from, our two warehouse and
distribution facilities in South St. Paul and Mendota Heights, Minnesota,
although a small percentage of merchandise is drop-shipped directly to the
customer by specific vendors. We primarily utilize the U.S. Postal Service and,
to a lesser extent, United Parcel Service for shipment of merchandise to
customers. Ammunition is shipped primarily via United Parcel Service. We utilize
a consolidating shipper for delivery of merchandise to the U.S. Postal Service.
A shipping and handling fee is charged on each customer order based on the total
dollar amount ordered. We expedite shipping for an additional fee.

     INVENTORY CONTROL. Our merchandise mix results in our maintaining a broad
selection of products as well as large quantities of individual products.
Consequently, inventory management is an important component of our operations.
We employ a cycle count, or perpetual inventory, procedure utilizing R/F (radio
frequency) technology which eliminates wall-to-wall physical counts and resulted
in 99.9% inventory accuracy during 2001.

     RETURNS. We maintain an unconditional return policy which permits customers
to return merchandise for any reason at any time for refund or exchange.
Returned merchandise is restocked, sold in the retail outlet, returned to the
supplier or scrapped. Returns processors are provided monetary incentives to
ensure accuracy of returns processing.

     SEASONAL STAFFING. We adjust the number of employees to meet variable
demand levels, particularly during the peak selling season, which includes the
months of November and December. To meet increased order volume during our peak
selling season, we hire a significant number of temporary employees.

INFORMATION SYSTEMS AND TECHNOLOGY

     We have developed an integrated management information system. In addition
to on-line order entry and processing, the information system also provides
support for merchandising, inventory management, marketing, and financial and
management reporting. The on-line access to information allows management to
monitor daily trends and the performance of merchandise and planning functions.

     Our main hardware platform is the IBM RISC 6000 series of computers with
redundant components and a combination of Redundant Array of Independent Disks
(RAID) and mirrored disk technology to ensure optimal data protection.

     Our Web site servers were upgraded in 2000 in preparation for increased
volume in 2001. The hardware platform utilizes a mix of Sun servers and NT
servers with mirrored disk drives for data protection. A third party hosts and
manages our two e-commerce web sites.

COMPETITION

     The direct marketing industry includes a wide variety of specialty and
general merchandise retailers in a highly competitive and fragmented business
environment. We sell our products to customers in all 50 states and compete in
the purchase and sale of merchandise with all retailers. Our competitors
include:

     - other outdoor/hunting mail order catalogs, including Bass Pro Shops Inc.
       and Cabela's Inc.;

     - discount retailers such as Wal-Mart Stores, Inc.;

     - Web sites maintained by online retailers of footwear, clothing and
       outdoor gear; and

     - Internet portals and online service providers that feature shopping
       services, such as America Online, Inc., Yahoo! Inc. and MSN.

     Some of our competitors are larger and have substantially greater
financial, marketing and other resources than us.

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REGULATION

     We are subject to federal, state and local laws and regulations which
affect our catalog mail order operations. Federal Trade Commission regulations,
in general, govern the solicitation of orders, the information provided to
prospective customers, and the timeliness of shipments and refunds. In addition,
the Federal Trade Commission has established guidelines for advertising and
labeling many of the products we sell.

     We are also subject to a variety of state laws and regulations relating to,
among other things, advertising, pricing, charging and collecting state sales or
use tax and product safety/restrictions. Some of these laws prohibit or limit
the sale, in certain states and locations, of certain items we offer such as
black powder firearms, ammunition, bows, knives and similar products. State and
local government regulation of hunting can also affect our business.

     Because we import products for sale, we are subject to U.S. customs laws
and regulations pertaining to proper item classification, quotas, payment of
duties and tariffs, and maintenance of documentation and internal control
programs.

     There are few laws and regulations directed specifically at electronic
commerce on the Internet. However, given the increased use of the Internet for
both mass communications and commerce, new laws and regulations may be adopted
covering a variety of areas such as collection and use of data from Web site
visitors and related privacy issues, pricing, content, copyrights, distribution
and quality of goods and services.

SERVICE MARKS

     Our service marks "The Sportsman's Guide", "Bargain Outfitters", "The
'Fun-to-Read' Catalog" and "The 'Fun-to Browse' Website" have been registered
with the United States Patent and Trademark Office. "The Sportsman's Guide" mark
has also been registered in Canada. We own United States registrations and
applications covering other trademarks and service marks used in our business. A
service mark is a word or symbol used to identify, distinguish and indicate the
source of services.

EMPLOYEES

     As of December 31, 2001, we employed 650 associates, including full-time
and part-time staff. None of our employees are currently covered by a collective
bargaining agreement. We consider our employee relations to be good.

ITEM 2. PROPERTIES

     Our principal offices are located at 411 Farwell Avenue, South Saint Paul,
Minnesota 55075. We currently lease approximately 330,000 square feet (430,000
square feet effective December 2002) at this facility under a net lease expiring
March 2009 and lease an additional distribution facility of approximately
202,000 square feet in Mendota Heights, Minnesota under a net lease expiring
July 2003.

ITEM 3. LEGAL PROCEEDINGS

     The Sportsman's Guide, Inc. along with approximately 60 firearms
wholesalers/distributors were named as defendants in a lawsuit filed by the
National Association for the Advancement of Colored People ("NAACP") that is
pending in the United States District Court for the Eastern District of New York
(Case No. 99 CV 7037). The NAACP alleges the defendants' firearms distribution
practices are resulting in a public nuisance and seeks $20 million to abate the
alleged nuisance by modifying the defendants' distribution practices. We deny
all allegations of misconduct and intend to vigorously defend the case.

     Other than the above case, we are not a party to any pending litigation
other than litigation which is incidental to our business and which we believe
is not material.

                                        9
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

EXECUTIVE OFFICERS OF THE REGISTRANT

     Set forth below is certain information concerning our executive officers
and key employees.

<Table>
<Caption>
                   NAME                       AGE                         POSITION
                   ----                       ---                         --------
<S>                                           <C>    <C>
EXECUTIVE OFFICERS:
Gary Olen.................................     59    Chairman and Director
Gregory R. Binkley........................     53    President, Chief Executive Officer and Director
Charles B. Lingen.........................     57    Executive Vice President of Finance and
                                                     Administration, Chief Financial Officer,
                                                       Secretary/Treasurer and Director
John M. Casler............................     51    Executive Vice President of Merchandising,
                                                     Marketing and Creative Services
KEY EMPLOYEES:
Dale D. Monson............................     37    Vice President of Information Systems and
                                                     Technology and Chief Information Officer
Douglas E. Johnson........................     46    Vice President of Marketing
</Table>

     Gary Olen is our co-founder. Mr. Olen served as Executive Vice President
and Secretary from our incorporation in 1977 until 1994, President from 1994 to
1998 and Chief Executive Officer from 1994 until his retirement in 2000. Mr.
Olen has been Chairman of the Board since 1998 and a director since our
incorporation. Mr. Olen was also the sole proprietor of our predecessor, The
Olen Company, founded in 1970.

     Gregory R. Binkley has been a director since 1995. Mr. Binkley has been an
employee since 1994 when he was elected Vice President. Mr. Binkley became
Senior Vice President of Operations and Chief Operating Officer in 1995,
Executive Vice President in 1996, President in 1998 and Chief Executive Officer
in 2000. From 1993 to 1994, Mr. Binkley worked as an independent operations
consultant. From 1990 to 1993, Mr. Binkley was Director of Distribution of
Fingerhut Companies, Inc., a mail order catalog business and from 1988 to 1990
was Director of Distribution with Cable Value Network, Inc., a cable television
retailer. Mr. Binkley worked for Donaldsons Department Stores, a division of
Allied Stores Corporation, from 1975 to 1988, serving as Vice President of
Finance and Operations from 1987 to 1988 and Vice President of Operations from
1981 to 1987.

     Charles B. Lingen has been a director since 1995. Mr. Lingen has been Chief
Financial Officer, Vice President of Finance and Treasurer since 1994. Mr.
Lingen was elected Secretary in 1995, Senior Vice President of Finance in 1996
and Executive Vice President of Finance and Administration in 2000. From 1973 to
1994, Mr. Lingen worked at Fingerhut Companies, Inc., serving as Vice President
of Finance and Controller from 1989 to 1994.

     John M. Casler has been an employee since 1996. He was elected Vice
President of Merchandising in 1997, Senior Vice President of Merchandising in
1999 and Executive Vice President of Merchandising, Marketing and Creative
Services in 2000. Mr. Casler worked for Gander Mountain, Inc, a retail mail
order catalog company, from 1989 to 1995, where he served as Division
Merchandise Manager from 1990 to 1995. Prior to that time, Mr. Casler held
merchandise management positions at Munson Sporting Goods Co., Inc. from 1985 to
1989 and at the Target Stores Division of Dayton Hudson Corp. from 1982 to 1985.

     Dale D. Monson has been an employee since 1997. He was elected Vice
President of Software Development in 2000 and Vice President of Information
Systems and Technology and Chief Information Officer in 2001. Mr. Monson worked
for Select Comfort Inc., a manufacturer of sleep support systems, from 1995 to
1997 as Project Manager and for Proex Photo Systems Inc., a retail photography
firm, from 1990 to 1995 as Director of Information Systems.

     Douglas E. Johnson joined us in 2000 as Vice President of Marketing. Mr.
Johnson worked at Fingerhut Companies, Inc. from 1982 to 2000, where he held
various marketing positions including Director of Customer List Marketing.

                                        10
<PAGE>

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock traded on the Nasdaq National Market under the symbol
"SGDE" from February 5, 1998 through February 26, 2001. Our common stock was
transferred to the Nasdaq SmallCap Market effective February 27, 2001.

     The following table sets forth, for the periods indicated, the high and low
bid prices of our common stock as reported on the Nasdaq National and SmallCap
Markets.

<Table>
<Caption>
                                                            HIGH    LOW
                                                            ----    ---
<S>                                                         <C>     <C>
2000
First Quarter...........................................    5.00    2.16
Second Quarter..........................................    4.50    1.69
Third Quarter...........................................    2.13    1.13
Fourth Quarter..........................................    1.44    0.41
2001
First Quarter...........................................    1.31    0.69
Second Quarter..........................................    2.10    0.72
Third Quarter...........................................    2.60    1.86
Fourth Quarter..........................................    3.35    2.18
</Table>

HOLDERS

     As of February 21, 2002, there were approximately 313 holders of record of
our common stock.

DIVIDENDS

     We have not previously declared or paid any cash dividends on our common
stock. We currently intend to retain all earnings for use in our business in the
foreseeable future. We are prohibited from paying and declaring cash dividends
under the terms of our revolving credit agreement.

                                        11
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The following table sets forth certain historical financial and operating
data for the periods indicated. The Statement of Operations Data and Balance
Sheet Data as of and for each of the years ended December 31, 2001, 2000, 1999,
1998 and 1997 have been derived from our financial statements audited by Grant
Thornton LLP, independent certified public accountants. The Selected Operating
Data as of and for the periods indicated were derived or computed from our
circulation or accounting records or the Statement of Operations Data identified
above. The information below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our financial statements and notes thereto.

<Table>
<Caption>
                                                            YEARS ENDED DECEMBER 31,(1)
                                              --------------------------------------------------------
                                                2001        2000        1999        1998        1997
                                                ----        ----        ----        ----        ----
                                                      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                           <C>         <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
Sales.....................................    $169,675    $154,938    $188,073    $165,383    $147,950
Cost of sales.............................     113,086     103,471     123,189     106,393      96,071
                                              --------    --------    --------    --------    --------
  Gross profit............................      56,589      51,467      64,884      58,990      51,879
Selling, general and administrative
  expenses................................      52,250      53,865      63,758      55,915      46,830
                                              --------    --------    --------    --------    --------
  Earnings (loss) from operations.........       4,339      (2,398)      1,126       3,075       5,049
Interest expense..........................        (552)     (1,673)     (1,109)       (883)     (1,266)
Miscellaneous income (expense), net.......         (34)        (53)          1         (30)         (4)
                                              --------    --------    --------    --------    --------
  Earnings (loss) before income taxes.....       3,753      (4,124)         18       2,162       3,779
Income tax expense (benefit)..............       1,000        (935)          6         746       1,304
                                              --------    --------    --------    --------    --------
  Net earnings (loss).....................    $  2,753    $ (3,189)   $     12    $  1,416    $  2,475
                                              ========    ========    ========    ========    ========
Net earnings (loss) per share(2):
  Basic...................................    $    .58    $   (.67)   $     --    $    .32    $   1.06
                                              ========    ========    ========    ========    ========
  Diluted.................................    $    .58    $   (.67)   $     --    $    .31    $    .85
                                              ========    ========    ========    ========    ========
Weighted average shares outstanding(2):
  Basic...................................       4,749       4,749       4,748       4,434       2,336
                                              ========    ========    ========    ========    ========
  Diluted.................................       4,759       4,749       4,818       4,616       2,919
                                              ========    ========    ========    ========    ========
SELECTED OPERATING DATA:
Catalog and retail outlet generated
  sales...................................    $133,476    $131,218    $173,615    $164,116    $147,950
Internet generated sales(3)...............      36,199      23,720      14,458       1,267          --
Gross profit as a percentage of sales.....        33.4%       33.2%       34.5%       35.7%       35.1%
Total catalogs mailed.....................      47,989      62,498      80,289      75,041      60,593
Total active customers(4).................       1,039       1,045       1,153       1,133       1,094
BALANCE SHEET DATA:
Working capital...........................    $ 12,957    $  8,526    $ 11,222    $ 12,444    $  2,658
Total assets..............................      42,088      38,860      53,258      43,665      37,214
Note payable -- bank......................          --       5,225      12,598       5,775       1,690
Subordinated notes payable................          --          --          --          --       3,414
Long-term liabilities excluding
  subordinated notes payable..............           5           3         210         485         609
Shareholders' equity......................      16,343      13,590      16,776      16,757       6,365
</Table>

-------------------------
(1) Our fiscal year ends on the Sunday nearest December 31, but for clarity of
    presentation, we describe all periods as if the year end is December 31.
    Fiscal years 2001, 2000, 1999 and 1997 consisted of 52 weeks and 1998
    consisted of 53 weeks.

(2) See Note A-9 in the notes to financial statements.

(3) "Internet generated sales" are defined as sales derived from our Web sites,
    catalog orders processed online and online offers placed by telephone.

(4) An "active customer" is defined as a customer who has purchased merchandise
    from us within 12 months preceding the end of the period indicated.

                                        12
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

OVERVIEW

     We are a leading marketer of value priced outdoor gear and general
merchandise, with a special emphasis on outdoor clothing, equipment and
footwear. We market and sell our merchandise through main, specialty and Buyer's
Club catalogs and two e-commerce Web sites. Our catalogs as well as our Web
sites offer high quality products at low prices. Our catalogs are advertised as
The "Fun-to-Read" Catalog(R) and our primary Web site is advertised as the
"Fun-to-Browse" Website(R). Our Web sites include www.sportsmansguide.com, our
online retail store modeled on our print catalogs and www.bargainoutfitters.com,
our online liquidation outlet.

     Our business was started in 1970 by Gary Olen, our Chairman. Over time, our
product offerings and marketing efforts have broadened from the deer hunter to
include those interested in pursuing and living the outdoor lifestyle in general
and the value-oriented outdoorsman in particular. In 1992, we began our value
pricing strategy of offering outdoor equipment and supplies at discount prices,
later adding government surplus, manufacturers' close-outs and other merchandise
lines. In 1994, we began to publish specialty catalogs which allowed us to
utilize a customized marketing plan to individual customer groups.

     Sales generated through the Internet have grown rapidly over the last
several years. We launched our online retail store in April 1998 and began
posting our catalogs and full product offerings on the site in February 1999.
Our e-commerce offerings generated over $36.0 million in sales in 2001 compared
to $1.3 million in 1998. Product sales on the sites accounted for over 23% of
our sales in the fourth quarter of 2001 compared to less than 1% for all of
1998.

     In the fall of 2000, we began to aggressively promote and sell the Buyer's
Club membership program. In addition, unique catalogs (Buyer's Club
Advantage(TM)) were developed and promoted to members only allowing us to
maximize sales and profitability from our best customers.

     We believe that our value pricing, specialty catalog titles, the Internet
and Buyer's Club memberships have been important to our growth in sales and
profitability. Our sales have increased from $43 million in 1992 to
approximately $170 million in 2001.

FISCAL YEAR

     Our fiscal year ends on the Sunday nearest December 31, but for clarity of
presentation, we describe all periods as if the year end is December 31. Fiscal
years 2001, 2000 and 1999 consisted of 52 weeks.

CRITICAL ACCOUNTING POLICIES

     Sales are recorded at the time of shipment along with a provision for
anticipated merchandise returns, net of exchanges, which is recorded based upon
historical experience and current expectations. Amounts billed to customers for
shipping and handling are recorded in revenues at the time of shipment.

     Customers can purchase one year memberships in the Company's Buyer's Club
for a $29.99 annual fee. The Company also offers two year memberships for
$49.99. Club members receive merchandise discounts of 10% on regularly priced
items and 5% on ammunition. Membership fees are deferred and recognized in
income as the individual members place orders and receive discounts. Any
remaining deferred membership fees are recognized in income after the expiration
of the membership.

     The cost of producing and mailing catalogs is deferred and expensed over
the estimated useful lives of the catalogs. Catalog production and mailing costs
are amortized over periods ranging from four to six months from the in-home date
of the catalog with the majority of the costs amortized within the first month.
The Company estimates the in-home date to be one week from the known mailing
date of the catalog. The ongoing cost of developing and maintaining the customer
list is charged to operations as incurred. All other advertising costs are
expensed as incurred.

                                        13
<PAGE>

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, information from
our Statements of Operations expressed as a percentage of sales:

<Table>
<Caption>
                                                                YEARS ENDED DECEMBER 31,
                                                              -----------------------------
                                                              2001        2000        1999
                                                              ----        ----        ----
<S>                                                           <C>         <C>         <C>
Sales.......................................................  100.0%      100.0 %     100.0%
Cost of sales...............................................   66.6        66.8        65.5
                                                              -----       -----       -----
  Gross profit..............................................   33.4        33.2        34.5
Selling, general and administrative expenses................   30.8        34.8        33.9
                                                              -----       -----       -----
  Earnings (loss) from operations...........................    2.6        (1.6)        0.6
Interest and miscellaneous expense, net.....................    0.4         1.1         0.6
                                                              -----       -----       -----
  Earnings (loss) before income taxes.......................    2.2        (2.7)         --
Income tax expense (benefit)................................    0.6        (0.6)         --
                                                              -----       -----       -----
  Net earnings (loss).......................................    1.6%       (2.1)%        --%
                                                              =====       =====       =====
</Table>

COMPARISON OF YEARS ENDED DECEMBER 31, 2001 AND 2000

     SALES. Sales for 2001 of $169.7 million were $14.8 million or 9.6% higher
than sales of $154.9 million for 2000. The increase in sales was primarily due
to higher sales generated from both the Internet and the catalogs. For 2001,
sales generated through the catalogs increased over the prior year's sales level
in spite of a planned reduction in our catalog circulation. Year over year, our
catalog circulation was down approximately 23% in accordance with our plans. As
a result of the reductions in catalog circulation as well as the implementation
of several marketing and merchandising strategies, overall customer response
rates improved significantly in 2001 over the previous year. In 2001, we
implemented a more effective and profitable mail plan with the elimination of
catalog mailings to unprofitable customer segments of the house customer file
and combined the clothing footwear specialty catalogs with the monthly main
catalogs to reduce saturation and produce a more cost effective mail plan. We
also created and mailed catalogs exclusively to our Buyer's Club members to
increase overall sales and profitability. As of December 31, 2001, our Buyer's
Club membership had increased to 254,000, up 91% over the 133,000 reported as of
December 31, 2000. Management believes sales for the fourth quarter of 2001 were
up as a result of September 11, 2001, as these events may have influenced
consumer shopping behavior to favor at-home shopping over retail stores or malls
and stimulated sales of some military surplus merchandise.

     Sales generated through the Internet increased in 2001 to approximately 21%
of sales compared to approximately 15% of sales in 2000. Sales generated through
the Internet are defined as those that are derived from our Web sites, catalog
orders processed online and online offers placed by telephone.

     Gross returns and allowances for 2001 were $13.9 million or 7.6% of gross
sales compared to $12.6 million or 7.5% of gross sales in 2000.

     GROSS PROFIT. Gross profit for 2001 was $56.6 million or 33.4% of sales
compared to $51.5 million or 33.2% of sales in 2000. The increase in gross
profit as a percent of sales for the year was primarily due to stronger product
margins in the fourth quarter largely from increased sales in higher margin
product categories, especially in the gift related areas. A key strategy
throughout 2001 was to refocus on the product/ value relationship which resulted
in the reduction of retail prices selectively to stimulate improved customer
response rates. This product/value strategy continued throughout the fourth
quarter, but any reduction in product margins was offset by a change in the
sales mix to higher margin product categories. In 2000, gross profit was
negatively affected by costs associated with closing one of our retail outlet
stores.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $52.2 million or 30.8% of sales during 2001
compared to $53.9 million or 34.8% of sales during 2000. The dollar decrease in
selling, general and administrative expenses was primarily due to lower general
and

                                        14
<PAGE>

administrative expenses largely as a result of organizational changes made in
late 2000 and lower retail outlet operating expenses due to the closing of one
store in early 2001. Also, selling, general and administrative expenses for the
year 2000 included costs related to executive and other associates' severance
commitments and the write off of expenses related to an unsuccessful equity
placement. Selling, general and administrative expenses, as a percentage of
sales, for 2001 were lower compared to 2000 primarily due to a more effective
mail plan, increased Internet sales and lower general and administrative
expenses resulting from various marketing, merchandising and organizational
changes made in the latter part of 2000.

     Total circulation was 48 million catalogs during 2001 compared to 62
million catalogs during 2000. The decrease in catalog circulation was due to the
planned reduction in the number of specialty catalog editions and main catalog
editions. During 2001, we mailed 36 catalog editions consisting of 11 main
catalogs, nine Buyer's Club Advantage(TM) catalogs and 16 specialty catalogs
compared to 40 catalog editions during 2000 consisting of 12 main catalogs, one
Buyer's Club Advantage(TM) catalog and 27 specialty catalogs.

     Advertising expense for 2001 was $30.8 million or 18.1% of sales compared
to $31.3 million or 20.2% of sales for 2000. The decrease in advertising
expense, as a percentage of sales, for 2001 compared to 2000 was primarily due
to improved customer response rates and higher sales generated through the
Internet. Advertising expenses, in dollars, for 2001 were virtually flat when
compared to the same period last year. The reduction in advertising expenses
directly related to the decrease in catalog circulation was virtually offset by
a higher cost of catalogs. The higher cost of catalogs for 2001 stemmed largely
from increased page counts, the creation of more expensive Buyer's Club
exclusive specialty editions and rate increases in our postage and paper.

     EARNINGS (LOSS) FROM OPERATIONS. Earnings from operations were $4.3 million
or 2.6% of sales during 2001 compared to a loss of $(2.4) million during 2000.
The increase in earnings was primarily due to a more effective mail plan
yielding higher customer response rates and higher Internet sales.

     INTEREST EXPENSE. Interest expense for 2001 was $0.6 million compared to
$1.7 million for the same period last year. The decrease in interest expense was
largely due to lower average levels of bank borrowings primarily as a result of
lower inventories and improved profitability.

     INCOME TAXES. Income tax expense for 2001 was $1.0 million compared to a
tax benefit of $(0.9) million for 2000. The income tax benefit for 2000
represented recovery of federal taxes paid in 1999 and 1998. In 2001, the
effective rate of 26.6% reflects a benefit from the reversal of a deferred tax
asset allowance established in 2000.

     NET EARNINGS (LOSS). Net earnings for 2001 were $2.8 million compared to a
net loss of $(3.2) million for 2000.

COMPARISON OF YEARS ENDED DECEMBER 31, 2000 AND 1999

     SALES. Sales for 2000 of $154.9 million were $33.2 million or 17.6% lower
than sales of $188.1 million for 1999. The decrease in sales was primarily due
to a planned decrease of 22% in catalog mailings, offset somewhat by higher
catalog customer response rates and higher sales generated through the Internet.
Our plan for 2000 was to improve profitability by reducing the number of catalog
mailings through the elimination of unprofitable specialty catalog editions and
monthly main catalog mailings to unprofitable customer segments of the house
customer file. As expected, this strategy yielded lower sales compared to the
prior year. However, we expected sales to decrease at a lower rate than
advertising costs, producing a higher level of profitability through improved
customer response rates.

     For the first nine months of 2000, the number of catalogs circulated was
down approximately 27% compared to the same period last year. With the
elimination of unprofitable catalog editions and customer segments, overall
customer response rates were expected to improve over the prior year. Actual
customer response rates for the first nine months of 2000 were much lower than
anticipated causing a significant shortfall to projected sales.

                                        15
<PAGE>

     At the end of the second quarter of 2000, we took additional actions to
return to profitability. In addition to certain organizational changes, largely
headcount reductions, various marketing and merchandising strategies were
revamped or changed. Our strategy was changed to refocus on the product/value
relationship (reducing retail prices selectively to stimulate improved customer
response rates), to enhance the value proposition and increase the membership of
our Buyer's Club (a very profitable customer segment) and to implement a more
effective and profitable mail plan. The majority of these changes were
implemented in the fourth quarter of 2000. While fourth quarter operations
benefited somewhat from these changes to our marketing and merchandising
strategies, the vast majority of benefits were realized in 2001. For the fourth
quarter catalogs, we selectively reduced retail prices and, as a result of this
action and seasonal winter weather conditions, customer response rates
increased. Also in the fourth quarter of 2000, new marketing promotions were
developed and implemented to significantly increase the number of members in our
Buyer's Club. In November and December of 2000, with these new promotional
programs in place, we more than doubled the number of new club members compared
to the same period one year ago.

     Sales generated through the Internet increased in 2000 to approximately 15%
of sales compared to approximately 7.7% of sales in 1999. Sales generated
through the Internet are defined as those that are derived from our Web sites,
catalog orders processed online and online offers placed by telephone. During
2000, we mailed 40 catalog editions consisting of 12 main catalogs, one Buyer's
Club Advantage(TM) catalog and 27 specialty catalogs compared to 51 catalog
editions during 1999 consisting of 12 main catalogs and 39 specialty catalogs.

     Gross returns and allowances for 2000 were $12.6 million or 7.5% of gross
sales compared to $15.8 million or 7.7% of gross sales in 1999. Gross returns
and allowances decreased as a percent of sales during the year due to a general
improvement in return rates across most product categories.

     GROSS PROFIT. Gross profit for 2000 was $51.5 million or 33.2% of sales
compared to $64.9 million or 34.5% of sales in 1999. The decrease in gross
profit as a percent of sales for the year was primarily due to higher shipping
costs and costs associated with closing one of the retail outlet stores. Product
margins for 2000 were virtually the same as in 1999. Product margins for the
first nine months of 2000 were running approximately one percentage point higher
than the prior year, but with the lowering of retail prices in the fourth
quarter, product margins ended flat for the year.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $53.9 million or 34.8% of sales during 2000
compared to $63.8 million or 33.9% of sales during 1999. The dollar decrease in
selling, general and administrative expenses was primarily due to the 22%
decrease in catalog circulation and lower fulfillment costs due to lower sales
volume. The increase in selling, general and administrative expenses during
2000, as a percentage of sales, is primarily related to executive and other
associates' severance commitments, the closing of a retail outlet, as well as
costs related to an unsuccessful equity placement.

     Total circulation was 62 million catalogs during 2000 compared to 80
million catalogs during 1999. The decrease in catalog circulation was due to the
planned reduction in the number of specialty catalog editions and the number of
main catalog mailings to unprofitable customer segments. Advertising expense for
2000 was $31.3 million or 20.2% of sales compared to $38.2 million or 20.3% of
sales for 1999.

     EARNINGS (LOSS) FROM OPERATIONS. Loss from operations was $(2.4) million
during 2000 compared to earnings of $1.1 million or 0.6% of sales during 1999.
The decrease in earnings was primarily due to lower than anticipated customer
response rates and $1.7 million of expenses primarily related to executive and
other associates' severance commitments, the closing of a retail outlet and the
write-off of expenses related to an unsuccessful equity placement.

     INTEREST EXPENSE. Interest expense for 2000 was $1.7 million compared to
$1.1 million for the same period in 1999. The increase in interest expense was
largely due to higher levels of borrowing from increased inventory levels at the
beginning of and throughout 2000.

     INCOME TAXES. Income tax benefit for 2000 was $935,000 compared to tax
expense of $6,000 for 1999. The effective tax rate was 22.7% in 2000 compared to
34.5% in 1999. The income tax benefit represented
                                        16
<PAGE>

recovery of federal taxes paid in 1999 and 1998. The decrease in the effective
rate was due to the establishment of a valuation allowance for deferred tax
assets in 2000.

     NET EARNINGS (LOSS). Net loss for 2000 was $(3.2) million compared to net
earnings of $12,000 for 1999.

SEASONALITY AND QUARTERLY RESULTS

     The majority of our sales historically occur during the second half of the
year. The seasonal nature of our business is due to our focus on outdoor
merchandise and related accessories for the fall, as well as winter apparel and
gifts for the holiday season. We expect this seasonality will continue in the
future. In anticipation of increased sales activity during the third and fourth
quarters, we incur significant additional expenses for hiring employees and
building inventory levels.

     The following table provides certain unaudited financial information for
each of the quarters shown:

<Table>
<Caption>
                                              FIRST QUARTER    SECOND QUARTER    THIRD QUARTER    FOURTH QUARTER
                                              -------------    --------------    -------------    --------------
                                                                        (IN THOUSANDS)
<S>                                           <C>              <C>               <C>              <C>
2001
Sales.....................................       $38,931          $31,796           $36,472          $62,476
Gross profit..............................        11,740           10,480            11,897           22,472
Earnings (loss) from operations...........           (14)            (138)                9            4,482
Net earnings (loss).......................          (167)            (207)             (124)           3,251
Net earnings (loss) per share.............          (.04)            (.04)             (.03)             .68
2000
Sales.....................................       $35,946          $30,344           $29,640          $59,008
Gross profit..............................        11,591           10,429            10,001           19,446
Earnings (loss) from operations...........        (1,031)            (889)             (676)             198
Net loss..................................          (922)            (876)             (692)            (699)
Net loss per share........................          (.19)            (.18)             (.15)            (.15)
</Table>

LIQUIDITY AND CAPITAL RESOURCES

     WORKING CAPITAL. We had working capital of $13.0 million as of December 31,
2001 compared to $8.5 million as of December 31, 2000, with current ratios of
1.5 to 1.0 and 1.3 to 1.0, respectively. The increase of $4.5 million was
primarily due to the improved cash position resulting primarily from increased
profitability.

     We purchase large quantities of manufacturers' close-outs and direct
imports, particularly in footwear and apparel merchandise categories. The
seasonal nature of the merchandise may require that it be held for several
months before being offered in a catalog. This can result in increased inventory
levels and lower inventory turnover, thereby increasing our working capital
requirements and related carrying costs.

     We offer our Buyer's Club members an installment credit plan with no
finance fees, known as the "Buyer's Club 4-Pay Plan." Each of the four
consecutive monthly installments is billed directly to customers' credit cards.
We had installment receivables of $2.1 million at December 31, 2001 compared to
$2.5 million at December 31, 2000. The installment plan will continue to require
the allocation of working capital which we expect to fund from operations and
availability under our revolving credit facility.

     In December 1999, we entered into a Credit and Security Agreement with
Wells Fargo Bank Minnesota, National Association providing a revolving line of
credit up to $20.0 million, as amended, subject to an adequate borrowing base,
expiring in December 2002. The revolving line of credit is for working capital
and letters of credit. Letters of credit may not exceed $10.0 million at any one
time. Funding under the credit facility consists of a collateral base of 45% of
eligible inventory plus 80% of eligible trade accounts receivable. Borrowings
bear interest at the bank's prime rate. The revolving credit line is
collateralized by substantially all of our assets.

                                        17
<PAGE>

     All borrowings are subject to various covenants. The most restrictive
covenants include a limit on quarterly measurements of year-to-date earnings
(loss), minimum gross margin percentage, maximum days inventory levels (as
defined) and maximum annual spending levels for capital assets and prohibits the
payment of dividends to shareholders. As of December 31, 2001, we were in
compliance with all applicable covenants under the revolving line of credit
agreement. As of December 31, 2001, we had no borrowings against the revolving
credit line compared to $5.2 million at December 31, 2000. Outstanding letters
of credit were $2.4 million at the end of 2001 compared to $1.9 million at the
end of 2000.

     OPERATING ACTIVITIES. Cash flows provided by operating activities during
2001 were $13.0 million compared to $10.2 million in 2000. The increase in cash
provided by operations was primarily the result of increased net earnings.

     Cash flows provided by operating activities during 2000 were $10.2 million
compared to cash flows used in operating activities of $6.3 million in 1999. The
increase in cash provided by operations was primarily the result of decreased
inventory levels.

     INVESTING ACTIVITIES. Cash flows used in investing activities during 2001
were $0.5 million compared to $1.5 million in 2000. During 2001, we expended
funds for computer equipment and software and machinery and equipment.

     Cash flows used in investing activities during 2000 were $1.5 million
compared to $2.8 million in 1999. During 2000, we expended funds for software
related primarily to the development of our Web sites, licenses for a data
warehouse access tool, machinery and equipment and additional computer
equipment.

     FINANCING ACTIVITIES. Cash flows used in financing activities during 2001
were $5.2 million compared to $7.4 million during 2000. Cash flows used in
financing activities during 2001 were primarily comprised of payments to reduce
outstanding borrowings under the revolving line of credit.

     Cash flows used in financing activities during 2000 were $7.4 million
compared to cash flows provided by financing activities of $6.8 million during
1999. Cash flows used in financing activities during 2000 were primarily
comprised of payments to reduce outstanding borrowings under the revolving line
of credit. Cash flows provided by financing activities during 1999 were
primarily comprised of advances made under the revolving line of credit.

     We believe that cash flows from operations and borrowing capacity under our
revolving credit facility will be sufficient to fund our operations for the next
12 months.

FORWARD-LOOKING STATEMENTS

     This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. We use words such as "may," "believe," "estimate," "plan,"
"expect," "intend," "anticipate" and similar expressions to identify
forward-looking statements. These forward-looking statements involve risks and
uncertainties. Actual results could differ materially from those projected in
the forward-looking statements due to a number of factors, including general
economic conditions, a changing market environment for our products and the
market acceptance of our product offerings as well as the risk factors described
in Exhibit 99 to this report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company does not have any material, near-term, market rate risk.

                                        18
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following financial statements and schedules are included herein:

<Table>
<Caption>
                                                                PAGE
                                                                ----
<S>                                                             <C>
Financial Statements:
  Report of Independent Certified Public Accountants........     20
  Balance Sheets as of December 31, 2001 and 2000...........     21
  Statements of Operations for the years ended December 31,
     2001, 2000 and 1999....................................     22
  Statements of Changes in Shareholders' Equity for the
     years ended December 31, 2001, 2000 and 1999...........     23
  Statements of Cash Flows for the years ended December 31,
     2001, 2000 and 1999....................................     24
  Notes to Financial Statements.............................     25
Financial Statement Schedule:
  Schedule II -- Valuation and Qualifying Accounts for the
     years ended December 31, 2001, 2000 and 1999...........     34
</Table>

                                        19
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
The Sportsman's Guide, Inc.

     We have audited the accompanying balance sheets of The Sportsman's Guide,
Inc. as of December 31, 2001 and 2000 and the related statements of operations,
changes in shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Sportsman's Guide, Inc.
as of December 31, 2001 and 2000 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States of
America.

     We have also audited Schedule II for each of the three years in the period
ended December 31, 2001. In our opinion, this schedule presents fairly, in all
material respects, the information required to be set forth therein.




                                          Grant Thornton LLP

                                          /s/ GRANT THORNTON LLP
Minneapolis, Minnesota
February 7, 2002

                                        20
<PAGE>

                          THE SPORTSMAN'S GUIDE, INC.

                                 BALANCE SHEETS

<Table>
<Caption>
                                                                DECEMBER 31,    DECEMBER 31,
                                                                    2001            2000
                                                                ------------    ------------
                                                                       (IN THOUSANDS)
<S>                                                             <C>             <C>
                           ASSETS
CURRENT ASSETS
  Cash and cash equivalents.................................      $ 8,592         $ 1,344
  Accounts receivable -- net................................        2,759           3,718
  Inventory.................................................       21,076          22,805
  Promotional material......................................        3,614           3,635
  Prepaid expenses..........................................          933           1,522
  Income taxes receivable...................................           --             769
  Deferred income taxes.....................................        1,482              --
                                                                  -------         -------
       Total current assets.................................       38,456          33,793
PROPERTY AND EQUIPMENT -- NET...............................        3,632           5,067
                                                                  -------         -------
       Total assets.........................................      $42,088         $38,860
                                                                  =======         =======
            LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Note payable -- bank......................................      $    --         $ 5,225
  Current maturities of long-term debt......................            5              30
  Accounts payable..........................................       15,201          14,104
  Accrued expenses..........................................        2,782           2,233
  Income taxes payable......................................        2,184              --
  Deferred revenue..........................................        2,993           1,768
  Returns reserve...........................................        1,402             681
  Customer deposits and other liabilities...................          932           1,226
                                                                  -------         -------
       Total current liabilities............................       25,499          25,267
LONG-TERM LIABILITIES
  Long-term debt............................................            5               3
  Deferred income taxes.....................................          241              --
                                                                  -------         -------
       Total liabilities....................................       25,745          25,270
COMMITMENTS AND CONTINGENCIES...............................           --              --
SHAREHOLDERS' EQUITY
  Common Stock -- $.01 par value; 36,800,000 shares
     authorized; 4,748,810 shares issued and outstanding....           47              47
  Additional paid-in capital................................       11,565          11,565
  Stock subscription receivable.............................         (238)           (238)
  Retained earnings.........................................        4,969           2,216
                                                                  -------         -------
       Total shareholders' equity...........................       16,343          13,590
                                                                  -------         -------
       Total liabilities and shareholders' equity...........      $42,088         $38,860
                                                                  =======         =======
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        21
<PAGE>

                          THE SPORTSMAN'S GUIDE, INC.

                            STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                       YEARS ENDED DECEMBER 31,
                                                                --------------------------------------
                                                                   2001          2000          1999
                                                                   ----          ----          ----
                                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                             <C>           <C>           <C>
Sales.......................................................     $169,675      $154,938      $188,073
Cost of sales...............................................      113,086       103,471       123,189
                                                                 --------      --------      --------
     Gross profit...........................................       56,589        51,467        64,884
Selling, general and administrative expenses................       52,250        53,865        63,758
                                                                 --------      --------      --------
     Earnings (loss) from operations........................        4,339        (2,398)        1,126
Interest expense............................................         (552)       (1,673)       (1,109)
Miscellaneous income (expense), net.........................          (34)          (53)            1
                                                                 --------      --------      --------
     Earnings (loss) before income taxes....................        3,753        (4,124)           18
Income tax expense (benefit)................................        1,000          (935)            6
                                                                 --------      --------      --------
     Net earnings (loss)....................................     $  2,753      $ (3,189)     $     12
                                                                 ========      ========      ========
Net earnings (loss) per share:
  Basic.....................................................     $    .58      $   (.67)     $     --
                                                                 ========      ========      ========
  Diluted...................................................     $    .58      $   (.67)     $     --
                                                                 ========      ========      ========
Weighted average common and common equivalent shares
  outstanding:
  Basic.....................................................        4,749         4,749         4,748
                                                                 ========      ========      ========
  Diluted...................................................        4,759         4,749         4,818
                                                                 ========      ========      ========
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        22
<PAGE>

                          THE SPORTSMAN'S GUIDE, INC.
                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<Table>
<Caption>
                                          COMMON STOCK      ADDITIONAL       STOCK                        TOTAL
                                        ----------------     PAID-IN      SUBSCRIPTION    RETAINED    SHAREHOLDERS'
                                        SHARES    AMOUNT     CAPITAL       RECEIVABLE     EARNINGS       EQUITY
                                        ------    ------    ----------    ------------    --------    -------------
                                                                      (IN THOUSANDS)
<S>                                     <C>       <C>       <C>           <C>             <C>         <C>
Balances at December 31, 1998.......    4,747      $47       $11,555         $(238)       $ 5,393        $16,757
  Exercise of stock options.........        1       --             7            --             --              7
  Net earnings......................       --       --            --            --             12             12
                                        -----      ---       -------         -----        -------        -------
Balances at December 31, 1999.......    4,748       47        11,562          (238)         5,405         16,776
  Exercise of stock options.........        1       --             3            --             --              3
  Net loss..........................       --       --            --            --         (3,189)        (3,189)
                                        -----      ---       -------         -----        -------        -------
Balances at December 31, 2000.......    4,749       47        11,565          (238)         2,216         13,590
  Net earnings......................       --       --            --            --          2,753          2,753
                                        -----      ---       -------         -----        -------        -------
Balances at December 31, 2001.......    4,749      $47       $11,565         $(238)       $ 4,969        $16,343
                                        =====      ===       =======         =====        =======        =======
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        23
<PAGE>

                          THE SPORTSMAN'S GUIDE, INC.
                            STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                  YEARS ENDED DECEMBER 31,
                                                                -----------------------------
                                                                 2001       2000       1999
                                                                 ----       ----       ----
                                                                       (IN THOUSANDS)
<S>                                                             <C>        <C>        <C>
Cash flows from operating activities:
  Net earnings (loss).......................................    $ 2,753    $(3,189)   $    12
  Adjustments to reconcile net earnings (loss) to net cash
     provided by (used in) operating activities:
     Depreciation and amortization..........................      1,770      2,111      1,852
     Deferred income taxes..................................     (1,241)      (170)      (237)
     Other..................................................        200         66         10
     Changes in assets and liabilities:
       Accounts receivable..................................        959      1,179     (1,013)
       Inventory............................................      1,729     14,598     (9,548)
       Promotional material.................................         21        800       (467)
       Prepaid expenses.....................................        589       (763)        83
       Income taxes.........................................      2,953       (769)        15
       Checks written in excess of bank balances............         --     (2,425)     2,425
       Accounts payable.....................................      1,097     (1,964)        48
       Accrued expenses.....................................        549        424        253
       Customer deposits and other liabilities..............      1,652        333        300
                                                                -------    -------    -------
          Cash flows provided by (used in) operating
            activities......................................     13,031     10,231     (6,267)
Cash flows from investing activities:
  Purchases of property and equipment.......................       (563)    (1,508)    (2,841)
  Other.....................................................         15         16         --
                                                                -------    -------    -------
          Cash flows used in investing activities...........       (548)    (1,492)    (2,841)
Cash flows from financing activities:
  Net proceeds from (payments on) revolving credit line.....     (5,225)    (7,373)     6,823
  Payments on long-term debt................................        (10)       (25)       (25)
  Proceeds from exercise of stock options...................         --          3          7
                                                                -------    -------    -------
          Cash flows provided by (used in) financing
            activities......................................     (5,235)    (7,395)     6,805
Increase (decrease) in cash and cash equivalents............      7,248      1,344     (2,303)
Cash and cash equivalents at beginning of the year..........      1,344         --      2,303
                                                                -------    -------    -------
Cash and cash equivalents at end of the year................    $ 8,592    $ 1,344    $    --
                                                                =======    =======    =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the years for:
     Interest...............................................    $   476    $ 1,497    $ 1,052
     Income taxes...........................................    $   176    $    71    $   161
</Table>

   The accompanying notes are an integral part of these financial statements.
                                        24
<PAGE>

                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. DESCRIPTION OF BUSINESS

     The Sportsman's Guide, Inc. (the "Company") is a company offering value
priced outdoor and general merchandise, with a special emphasis on outdoor
clothing, equipment and footwear sold through both catalogs and Internet Web
sites. The Company conducts its primary operations out of one office and two
warehouse facilities and one retail outlet store in Minnesota, distributes its
catalogs throughout the United States and operates two e-commerce Web sites. The
Company operates in one business segment.

2. REVENUE RECOGNITION

     Sales are recorded at the time of shipment along with a provision for
anticipated merchandise returns, net of exchanges, which is recorded based upon
historical experience and current expectations. The provision charged against
sales was $10.2 million, $9.5 million and $11.6 million during the years ended
December 31, 2001, 2000 and 1999. Reserves for returns, net of exchanges, of
$1.4 million and $0.7 million were recorded in accrued expenses at December 31,
2001 and 2000.

     Amounts billed to customers for shipping and handling are recorded in
revenues at the time of shipment. Sales include shipping and handling revenues
of $23.4 million, $21.9 million and $25.6 million for the years ended December
31, 2001, 2000 and 1999.

     Customers can purchase one year memberships in the Company's Buyer's Club
for a $29.99 annual fee. The Company also offers two year memberships for
$49.99. Club members receive merchandise discounts of 10% on regularly priced
items and 5% on ammunition. Membership fees are deferred and recognized in
income as the individual members place orders and receive discounts. Any
remaining deferred membership fees are recognized in income after the expiration
of the membership.

3. CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid temporary investments purchased
with an original maturity of three months or less to be cash equivalents. The
Company also considers credit card settlements in-transit as cash for reporting
purposes.

     Excess cash at December 31, 2001 was invested in a money market fund.

4. ACCOUNTS RECEIVABLE

     Accounts receivable consist primarily of amounts owed for merchandise by
customers utilizing an installment payment plan and amounts owed for list rental
and other advertising services provided by the Company to third parties. The
Company had an allowance for doubtful accounts of $211,000 and $54,000 at
December 31, 2001 and 2000.

5. INVENTORY

     Inventory consists of purchased finished merchandise available for sale and
is recorded at the lower of cost or market with the first-in, first-out method
used to determine cost.

6. PROMOTIONAL MATERIAL AND ADVERTISING COSTS

     The cost of producing and mailing catalogs is deferred and expensed over
the estimated useful lives of the catalogs. Catalog production and mailing costs
are amortized over periods ranging from four to six months from the in-home date
of the catalog with the majority of the costs amortized within the first month.
The Company estimates the in-home date to be one week from the known mailing
date of the catalog. The

                                        25
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ongoing cost of developing and maintaining the customer list is charged to
operations as incurred. All other advertising costs are expensed as incurred.

7. PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost less accumulated depreciation and
amortization. The Company capitalizes external and incremental internal costs of
developing computer software (including Internet software) for internal use that
represent major enhancements and/or replacements of operating and management
systems. Depreciation and amortization is computed using the straight-line
method.

8. STOCK OPTIONS

     Stock options issued to employees are accounted for under the intrinsic
value method. Proforma disclosures as if the fair value method were used are
included in Note H.

9. NET EARNINGS (LOSS) PER SHARE

     The Company's basic net earnings (loss) per share amounts have been
computed by dividing net earnings (loss) by the weighted average number of
outstanding common shares. Diluted net earnings per share amounts have been
computed by dividing net earnings by the weighted average number of outstanding
common shares and common share equivalents relating to stock options and
warrants, when dilutive.

     For the year ended December 31, 2001, 10,042 common share equivalents were
included in the computation of diluted net earnings per share.

     For the year ended December 31, 2000, no common share equivalents were
included in the computation of diluted net loss per share. If the Company had
reported net income in the year ended December 31, 2000, 12,457 common share
equivalents would have been included in the computation of net earnings per
share.

     For the year ended December 31, 1999, 70,395 common share equivalents were
included in the computation of diluted net earnings per share.

     Options and warrants to purchase 683,549, 650,388 and 500,932 shares of
common stock with a weighted average exercise price of $5.68, $6.01 and $6.72
were outstanding at December 31, 2001, 2000 and 1999, but were not included in
the computation of diluted net earnings per share because the exercise price
exceeded the average market price of the common shares during the period.

10. FISCAL YEAR

     The Company's fiscal year ends on the Sunday nearest December 31, but for
clarity of presentation, all periods are described as if the year end is
December 31. Fiscal years 2001, 2000 and 1999 consisted of 52 weeks.

11. FAIR VALUES OF FINANCIAL INSTRUMENTS

     Due to their short-term nature, the carrying value of the Company's current
financial assets and liabilities approximates their fair values. The fair value
of the Company's borrowings, if recalculated based on current interest rates,
would not significantly differ from the recorded amounts.

12. RECLASSIFICATIONS

     Certain 2000 amounts have been reclassified to conform to 2001 financial
statement presentation.

                                        26
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

13. USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

     Preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and the disclosure of contingent assets and
liabilities at the date of the financial statements, and the amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.

14. RECENTLY RELEASED ACCOUNTING PRONOUNCEMENTS

     The FASB recently issued Statement of Financial Accounting Standards (SFAS)
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, to
address significant implementation issues related to SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, and to develop a single accounting method to account for long-lived assets
to be disposed of. SFAS 144 supersedes SFAS 121, but carries over the
recognition and measurement provisions in SFAS 121.

     SFAS 144 is effective for financial statements issued for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal years.
The Company does not believe this pronouncement will have a material effect on
its financial statements.

NOTE B -- PROPERTY AND EQUIPMENT

     Property and equipment consists of the following (in thousands):

<Table>
<Caption>
                                                             DECEMBER 31,    DECEMBER 31,     ESTIMATED
                                                                 2001            2000        USEFUL LIVES
                                                             ------------    ------------    ------------
<S>                                                          <C>             <C>             <C>
Machinery, equipment and furniture.......................       $5,330          $5,398        5-12 years
Leasehold improvements...................................        1,781           1,760        Lease life
Computer equipment and accessories.......................        2,303           2,017         3-5 years
Computer software........................................        4,588           4,597         3-5 years
                                                                ------          ------
                                                                14,002          13,772
Less accumulated depreciation and amortization...........       10,370           8,705
                                                                ------          ------
                                                                $3,632          $5,067
                                                                ======          ======
</Table>

NOTE C -- REVOLVING CREDIT FACILITY

     In December 1999, the Company entered into a Credit and Security Agreement
with Wells Fargo Bank Minnesota, National Association providing a revolving line
of credit up to $20.0 million, as amended, subject to an adequate borrowing
base, expiring in December 2002. The revolving line of credit is for working
capital and letters of credit. Letters of credit may not exceed $10.0 million at
any one time. Funding under the credit facility consists of a collateral base of
45% of eligible inventory, plus 80% of eligible trade accounts receivable.
Borrowings bear interest at the bank's prime rate. The revolving credit line is
collateralized by substantially all of the assets of the Company.

     All borrowings are subject to various covenants. The most restrictive
covenants include a limit on quarterly measurements of year-to-date earnings
(loss), minimum gross margin percentage, maximum days inventory levels (as
defined), maximum annual spending levels for capital assets and prohibits the
payment of dividends to shareholders. As of December 31, 2001, the Company was
in compliance with all applicable covenants under the revolving line of credit
agreement.

                                        27
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE C -- REVOLVING CREDIT FACILITY (CONTINUED)

     The following is a summary of the credit facility (in thousands):

<Table>
<Caption>
                                                                    YEARS ENDED DECEMBER 31,
                                                                --------------------------------
                                                                 2001        2000         1999
                                                                 ----        ----         ----
<S>                                                             <C>         <C>          <C>
Borrowings at end of year...................................    $   --      $ 5,225      $12,598
Interest rate at end of year................................       6.0%         9.5%        8.25%
Maximum month-end borrowing during the year.................    $9,127      $18,679      $22,685
Average daily borrowing during the year.....................    $3,063      $15,132      $13,333
Weighted average interest rate during the year..............     14.38%*       9.96%        8.15%
Outstanding letters of credit at end of year................    $2,429      $ 1,868      $ 1,531
</Table>

-------------------------
* Includes a charge of $170,000 to meet bank's minimum interest requirements.
  Exclusion of the foregoing results in a weighted average rate of 8.83%.

NOTE D -- LONG-TERM DEBT

     Long-term debt consists of a note payable to a government agency with no
interest which is collateralized by machinery, equipment, furniture and
fixtures. At December 31, 2001, future maturities of long-term debt are $5,000.

NOTE E -- INCOME TAXES

     The provision for income tax expense (benefit) consists of the following
(in thousands):

<Table>
<Caption>
                                                                   YEARS ENDED DECEMBER 31,
                                                                  ---------------------------
                                                                   2001       2000       1999
                                                                   ----       ----       ----
<S>                                                               <C>         <C>        <C>
Current
  Federal...................................................      $2,111      $(946)     $238
  State.....................................................         130        181         5
                                                                  ------      -----      ----
                                                                   2,241       (765)      243
Deferred
  Federal...................................................      (1,241)      (170)     (237)
                                                                  ------      -----      ----
                                                                  $1,000      $(935)     $  6
                                                                  ======      =====      ====
</Table>

     Differences between income tax expense (benefit) and amounts derived by
applying the statutory federal income tax rate to earnings (loss) before income
taxes are as follows:

<Table>
<Caption>
                                                                   YEARS ENDED DECEMBER 31,
                                                                  --------------------------
                                                                  2001       2000       1999
                                                                  ----       ----       ----
<S>                                                               <C>        <C>        <C>
U.S. federal statutory rate.................................      34.0%      (34.0)%    34.0%
State taxes.................................................        2.3        4.0        --
Change in valuation allowance...............................      (11.4)      10.4        --
Prior year overaccrual......................................        0.9       (2.4)       --
Other.......................................................        0.8       (0.7)      0.5
                                                                  -----      -----      ----
                                                                  26.6%      (22.7)%    34.5%
                                                                  =====      =====      ====
</Table>

                                        28
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE E -- INCOME TAXES (CONTINUED)

     The components of deferred taxes consist of the following (in thousands):

<Table>
<Caption>
                                                              DECEMBER 31,    DECEMBER 31,
                                                                  2001            2000
                                                              ------------    ------------
<S>                                                           <C>             <C>
Current deferred tax assets (liabilities):
  Inventory.................................................     $  673          $ 858
  Vacation accrual..........................................        174            169
  Returns reserve...........................................        485            232
  Promotional material......................................       (597)          (584)
  Prepaid expenses..........................................       (189)          (267)
  Severance agreements......................................         51            137
  Deferred revenue..........................................        694            167
  Other.....................................................        191            146
                                                                 ------          -----
                                                                  1,482            858
  Valuation allowance.......................................         --           (427)
                                                                 ------          -----
     Deferred tax asset.....................................      1,482            431
Long-term deferred tax assets (liabilities):
  Internally developed software.............................       (872)          (852)
  Depreciation..............................................        631            421
                                                                 ------          -----
     Deferred tax liability.................................       (241)          (431)
                                                                 ------          -----
     Net deferred tax liability.............................     $1,241          $  --
                                                                 ======          =====
</Table>

     The valuation allowance increased by $427,000 during the year ended
December 31, 2000 and decreased by $427,000 during the year ended December 31,
2001.

NOTE F -- COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

     The Company has several long-term operating leases related to building
facilities, telecommunications and computer equipment, and long-distance
telephone services with varying terms as long as eight years.

     At December 31, 2001, future minimum commitments under the above agreements
are as follows for the years ended December 31, (in thousands):

<Table>
<S>                                                             <C>
2002........................................................    $ 3,050
2003........................................................      2,828
2004........................................................      2,099
2005........................................................      1,955
2006........................................................      1,903
Thereafter..................................................      4,283
                                                                -------
                                                                $16,118
                                                                =======
</Table>

     In August 2001, the Company exercised an option to lease an additional
100,000 square feet at the Farwell Avenue location effective December 2002. The
Company also exercised an option to renew its existing lease at the Farwell
Avenue location for another five years.

     Rent expense was $2.6 million, $2.8 million and $2.8 million for the years
ended December 31, 2001, 2000 and 1999.

                                        29
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE F -- COMMITMENTS AND CONTINGENCIES (CONTINUED)

EMPLOYMENT AGREEMENTS

     The Company has employment agreements with three of its officers and its
Chairman. The agreements contain various terms and conditions including a
provision for the officers to receive up to three years of base salary upon the
occurrence of certain events as defined in the agreement. The officers'
agreements provide for automatic annual renewal unless two months' prior written
notice is provided by the Company or the officer.

OTHER

     Several states, where the Company does not currently collect and remit
sales and use taxes, have attempted to enact legislation that seeks to require
out-of-state mail order companies to collect and remit such taxes. No
assessments have been made against the Company and, to its knowledge, none has
been threatened or is contemplated. The United States Supreme Court has held
that such taxes place an unconstitutional burden on interstate commerce, which
may only be resolved by actions of the United States Congress.

     The Sportsman's Guide, Inc. along with approximately 60 firearms
wholesalers/distributors were named as defendants in a lawsuit filed by the
National Association for the Advancement of Colored People ("NAACP") that is
pending in the United States District Court for the Eastern District of New York
(Case No. 99 CV 7037). The NAACP alleges the defendants' firearms distribution
practices are resulting in a public nuisance and seeks $20 million to abate the
alleged nuisance by modifying the defendants' distribution practices. The
Company denies all allegations of misconduct and intends to vigorously defend
the case.

     Other than the case discussed above, the Company is not a party to any
pending legal proceedings other than litigation which is incidental to its
business and which the Company believes will not have a material effect on its
financial statements.

NOTE G -- RELATED PARTY TRANSACTIONS

     The Company purchased $0.6 million and $2.8 million of inventory during the
years ended December 31, 2000 and 1999 from companies partially owned by a
director of the Company. No such purchases were made in 2001.

     During 1998, the Company loaned $238,000 to an officer of the Company to be
repaid over five years with interest at 5.69% per annum. In February 2001, the
Company deferred for two years payment of the first installment due on the loan.
At December 31, 2001, the outstanding loan balance was $291,000, including
accrued interest.

NOTE H -- SHAREHOLDERS' EQUITY

     The Company has 40,000,000 authorized shares; 200,000 of Series A Preferred
Stock, 36,800,000 of Common Stock and 3,000,000 undesignated shares.

STOCK OPTIONS

     The Company has a stock option plan (the "1991 Plan") which provides
participating employees the right to purchase common stock of the Company
through incentive stock options. A total of 35,000 shares of common stock are
reserved for issuance under the 1991 Plan. Options issued under the 1991 Plan
are exercisable over a ten year period from the date of grant. At December 31,
2001, 24,000 options were outstanding, of which 14,250 options were exercisable.

     The Company has a non-qualified stock option plan (the "1994 Plan") which
provides for the issuance of options to purchase up to 100,000 shares of the
Company's common stock to certain employees, contingent

                                        30
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE H -- SHAREHOLDERS' EQUITY (CONTINUED)

upon meeting certain quarterly pre-tax earnings levels. Options under the 1994
Plan are exercisable over a ten year period from the date of grant. At December
31, 2001, a total of 34,876 options were outstanding, all of which were
exercisable.

     The Company has an incentive stock option plan (the "1996 Plan") which
provides select key employees the right to purchase common stock of the Company
through the exercise of options granted. A total of 600,000 shares of common
stock are reserved for issuance under the 1996 Plan. Options issued under the
1996 Plan are exercisable over a ten year period from the date of grant. At
December 31, 2001, a total of 498,280 options were outstanding, of which 476,030
options were exercisable.

     The Company has an incentive stock option plan (the "1999 Plan") which
provides select key employees the right to purchase common stock of the Company
through the exercise of options granted. A total of 600,000 shares of common
stock are reserved for issuance under the 1999 Plan. Options issued under the
1999 Plan are exercisable over a ten year period from the date of grant. At
December 31, 2001, a total of 250,000 options were outstanding, none of which
were exercisable.

     The following applies to options that are outstanding at December 31, 2001:

<Table>
<Caption>
                                                                             WEIGHTED                   WEIGHTED
                                                         WEIGHTED AVERAGE    AVERAGE                    AVERAGE
                                            NUMBER          REMAINING        EXERCISE      NUMBER       EXERCISE
       RANGE OF EXERCISE PRICES           OUTSTANDING    CONTRACTUAL LIFE     PRICE      EXERCISABLE     PRICE
       ------------------------           -----------    ----------------    --------    -----------    --------
<S>                                       <C>            <C>                 <C>         <C>            <C>
$0.94 -- $1.41........................       15,000          8 years          $0.94          7,500       $0.94
$2.50 -- $3.70........................      344,180          8 years          $2.85         94,180       $2.57
$3.94 -- $5.88........................      177,026          4 years          $4.83        172,026       $4.85
$6.50 -- $8.70........................      270,950          6 years          $6.65        251,450       $6.66
                                            -------                                        -------
                                            807,156                                        525,156
                                            =======                                        =======
</Table>

     Exercise prices for all options granted were equal to or higher than the
fair value of the Company's common stock on the respective grant dates and,
therefore, no compensation expense has been recorded by the Company. A summary
of the stock option transactions during the years ended December 31, 2001, 2000
and 1999 is as follows:

<Table>
<Caption>
                                                 2001                   2000                   1999
                                          -------------------    -------------------    -------------------
                                                     WEIGHTED               WEIGHTED               WEIGHTED
                                                     AVERAGE                AVERAGE                AVERAGE
                                                     EXERCISE               EXERCISE               EXERCISE
                                          SHARES      PRICE      SHARES      PRICE      SHARES      PRICE
                                          ------     --------    ------     --------    ------     --------
<S>                                       <C>        <C>         <C>        <C>         <C>        <C>
Outstanding at beginning of year......    580,856     $5.24      617,069     $5.34      502,219     $5.11
  Granted.............................    250,000      2.95       25,000      2.14      119,600      6.33
  Exercised...........................         --        --       (1,000)     2.50       (1,250)     5.88
  Canceled............................     (5,275)     6.40      (23,200)     5.48       (2,725)     5.63
  Expired.............................    (18,425)     5.34      (37,013)     4.71         (775)     5.91
                                          -------     -----      -------     -----      -------     -----
Outstanding at end of year............    807,156     $4.52      580,856     $5.24      617,069     $5.34
                                          =======     =====      =======     =====      =======     =====
Options exercisable at end of year....    525,156     $5.25      456,456     $5.10      370,482     $4.86
                                          =======     =====      =======     =====      =======     =====
Weighted average fair value of options
  granted during the year.............                $2.66                  $1.88                  $3.27
</Table>

     The Company's pro forma net earnings (loss) and net earnings (loss) per
share for the years ended December 31, 2001, 2000 and 1999 had the fair value
based method of accounting for the issuance of stock

                                        31
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE H -- SHAREHOLDERS' EQUITY (CONTINUED)

options been used are set forth below. These effects may not be representative
of the future effects of applying this method.

<Table>
<Caption>
                                                                         YEARS ENDED DECEMBER 31,
                                                                  --------------------------------------
                                                                    2001           2000           1999
                                                                    ----           ----           ----
                                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>                <C>            <C>             <C>
Net earnings (loss)........................    As reported....     $2,753         $(3,189)        $  12
                                               Pro forma......      2,500          (3,473)         (314)
Net earnings (loss) per common and common
  equivalent share
     Basic.................................    As reported....     $  .58         $  (.67)        $  --
                                               Pro forma......        .57            (.73)         (.07)
     Diluted...............................    As reported....     $  .58         $  (.67)        $  --
                                               Pro forma......        .57            (.73)         (.07)
</Table>

     The fair value of each option grant is estimated on the date of grant using
the Black-Scholes options-pricing model with the following weighted-average
assumptions used: zero dividend yield; expected volatility of 95 percent in
2001, 87 percent in 2000, and 25 percent in 1999; risk-free interest rate of 5.5
percent in 2001, 6.15 percent in 2000, and 6.0 percent in 1999; and expected
life of 10 years for all years presented.

WARRANTS

     In connection with a public offering of common stock in 1998, warrants to
purchase 100,000 shares of common stock at $8.45 per share were issued. The
warrants are exercisable immediately and expire February 2003. At December 31,
2001, 100,000 warrants were outstanding, all of which were exercisable.

NOTE I--ADVERTISING EXPENSE

     Selling, general and administrative expenses include advertising expenses
of $30.8 million, $31.3 million and $38.2 million for the years ended December
31, 2001, 2000 and 1999.

NOTE J--INTERIM FINANCIAL INFORMATION (UNAUDITED)

     The following table provides certain unaudited financial information for
each of the quarters shown:

<Table>
<Caption>
                                              FIRST QUARTER    SECOND QUARTER    THIRD QUARTER    FOURTH QUARTER
                                              -------------    --------------    -------------    --------------
                                                                        (IN THOUSANDS)
<S>                                           <C>              <C>               <C>              <C>
2001
Sales.....................................       $38,931          $31,796           $36,472          $62,476
Gross profit..............................        11,740           10,480            11,897           22,472
Earnings (loss) from operations...........           (14)            (138)                9            4,482
Net earnings (loss).......................          (167)            (207)             (124)           3,251
Net earnings (loss) per share.............          (.04)            (.04)             (.03)             .68
2000
Sales.....................................       $35,946          $30,344           $29,640          $59,008
Gross profit..............................        11,591           10,429            10,001           19,446
Earnings (loss) from operations...........        (1,031)            (889)             (676)             198
Net loss..................................          (922)            (876)             (692)            (699)
Net loss per share........................          (.19)            (.18)             (.15)            (.15)
</Table>

                                        32
<PAGE>
                          THE SPORTSMAN'S GUIDE, INC.

                         NOTES TO FINANCIAL STATEMENTS

NOTE J--INTERIM FINANCIAL INFORMATION (UNAUDITED) (CONTINUED)

     During the fourth quarter of 2001, the Company recorded an income tax
benefit of $427,000 related to the reversal of a previously established deferred
tax asset valuation allowance.

     During the fourth quarter of 2000, the Company recorded expenses of $1.7
million primarily related to executive and other associates' severance
commitments, the closing of a retail outlet and the write-off of expenses
related to an unsuccessful equity placement.

                                        33
<PAGE>

                          THE SPORTSMAN'S GUIDE, INC.
                                  SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS

<Table>
<Caption>
         COLUMN A                 COLUMN B                   COLUMN C                     COLUMN D          COLUMN E
---------------------------      ----------      ---------------------------------      ------------      -------------
                                                             ADDITIONS
                                                 ---------------------------------
                                                     (1)                (2)
                                 BALANCE AT      CHARGED TO:        CHARGED TO:
                                 BEGINNING        COSTS AND       OTHER ACCOUNTS--      DEDUCTIONS--       BALANCE AT
        DESCRIPTION              OF PERIOD        EXPENSES            DESCRIBE           DESCRIBE*        END OF PERIOD
---------------------------      ----------      -----------      ----------------      ------------      -------------
                                                               (IN THOUSANDS OF DOLLARS)
<S>                              <C>             <C>              <C>                   <C>               <C>
RETURNS RESERVE
  December 31, 2001........        $  681          $10,173               $--              $ 9,452            $1,402
  December 31, 2000........         1,180            9,528               --                10,027               681
  December 31, 1999........         1,168           11,614               --                11,602             1,180
</Table>

-------------------------
* Represents actual returns from customers.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.

                                        34
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this Item 10 is set forth under "Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Proxy Statement for our Annual Meeting of Shareholders on April 25, 2002 and is
incorporated herein by reference, except for certain information concerning our
executive officers which is set forth in Part I of this report.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this Item 11 is set forth under "Executive
Compensation" in the Proxy Statement for our Annual Meeting of Shareholders on
April 25, 2002 and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

     The information required by this Item 12 is set forth under "Security
Ownership of Certain Beneficial Owners and Management" in the Proxy Statement
for our Annual Meeting of Shareholders on April 25, 2002 and is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item 13 is set forth under "Certain
Relationships and Related Transactions" and "Compensation Committee Interlocks
and Insider Participation" in the Proxy Statement for our Annual Meeting of
Shareholders on April 25, 2002 and is incorporated herein by reference.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (A) 1. FINANCIAL STATEMENTS

        The following financial statements of the Company are included herein at
     Item 8.

           Report of Independent Certified Public Accountants

           Balance Sheets as of December 31, 2001 and 2000

           Statements of Operations for the years ended December 31, 2001, 2000
             and 1999

           Statements of Changes in Shareholders' Equity for the years ended
             December 31, 2001, 2000 and 1999

           Statements of Cash Flows for the years ended December 31, 2001, 2000
             and 1999

           Notes to Financial Statements

         2. FINANCIAL STATEMENT SCHEDULES

        The following financial statement schedule of the Company is included
     herein at Item 8.

           Schedule II -- Valuation and Qualifying Accounts for the years ended
             December 31, 2001, 2000 and 1999

         3. EXHIBITS

        See Exhibit Index at page 37 of this report.

     (B) REPORTS ON FORM 8-K

        No reports on Form 8-K were filed during the quarter ended December 31,
     2001.
                                        35
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          THE SPORTSMAN'S GUIDE, INC.

                                          By    /s/ GREGORY R. BINKLEY
                                          --------------------------------------
                                                    Gregory R. Binkley
Date: February 28, 2002                   President and Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<Table>
<Caption>
                  SIGNATURE                                  CAPACITY                          DATE
                  ---------                                  --------                          ----
<C>                                              <S>                                     <C>

           /s/ GREGORY R. BINKLEY                President, Chief Executive
---------------------------------------------      Officer and Director (principal
             Gregory R. Binkley                    executive officer)

            /s/ CHARLES B. LINGEN                Executive Vice President of
---------------------------------------------      Finance and Administration,
              Charles B. Lingen                    Chief Financial Officer,              February 28, 2002
                                                   Secretary/Treasurer and
                                                   Director (principal financial
                                                   and accounting officer)

                 GARY OLEN*                      Chairman of the Board and
---------------------------------------------      Director
                  Gary Olen

              VINCENT W. SHIEL*                  Director
---------------------------------------------
              Vincent W. Shiel

               MARK F. KROGER*                   Director
---------------------------------------------
               Mark F. Kroger

             LEONARD M. PALETZ*                  Director
---------------------------------------------
              Leonard M. Paletz

              WILLIAM T. SENA*                   Director
---------------------------------------------
               William T. Sena

              TODD D. PETERSON*                  Director
---------------------------------------------
              Todd D. Peterson

         *By /s/ GREGORY R. BINKLEY
     ---------------------------------------
             Gregory R. Binkley,
              Attorney-In-Fact
</Table>

                                        36
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT                            DESCRIPTION                             PAGE
-------                            -----------                             ----
<C>        <S>                                                             <C>
   3.1     Restated Articles of Incorporation as restated through March
           5, 1997 (incorporated by reference to Exhibit 3.1 to Form
           10-K for the year ended December 27, 1996, File No. 0-15767)
   3.2     Bylaws (incorporated by reference to Exhibit 3.2 to Form
           S-18 Registration Statement No. 33-4496C filed April 1,
           1986)
   4.1     Specimen of the Company's Common Stock certificate
           (incorporated by reference to Exhibit 4.1 to Amendment No. 1
           to Form S-18 Registration Statement No. 33-4496C filed May
           8, 1986)
   4.2     Rights Agreement dated as of May 11, 1999 between the
           Company and Norwest Bank Minnesota, N.A., as Rights Agent
           (incorporated by reference to Exhibit 4.1 to Form 8-K dated
           May 11, 1999)
   4.3     Form of Promissory Note dated December 27, 1999 issued by
           the Company (incorporated by reference to Exhibit 4.3 to
           Form 10-K for the year ended December 31, 1999)
  10.1     Letter of agreement between Vincent W. Shiel and the Company
           dated September 8, 1989 (incorporated by reference to
           Exhibit 19.1 to Form 10-Q for the quarter ended September
           29, 1989)
  10.2*    Consulting Agreement dated January 11, 1990 between the
           Company and Outdoor Consulting, Inc. (incorporated by
           reference to Exhibit 10.16 to Form 10-K for the year ended
           December 29, 1989)
  10.3*    The Company's 1991 Incentive Stock Option Plan (incorporated
           by reference to Exhibit 10.16 to Form 10-K for the year
           ended December 27, 1991)
  10.4*    Agreement between the Company and Gary Olen dated July 1,
           1992 granting the use of Mr. Olen's name, picture and
           likeness (incorporated by reference to Exhibit 10.19 to Form
           10-K for the year ended December 31, 1993)
  10.5     Industrial Real Estate Lease between the Company and CB
           Commercial Real Estate Group, Inc. dated April 22, 1993
           (incorporated by reference to Exhibit 10.20 to Form 10-K for
           the year ended December 31, 1993)
  10.6     Amendment to Industrial Real Estate Lease between the
           Company and American Real Estate Holdings, L.P. dated
           February 23, 1998 (incorporated by reference to Exhibit 10.1
           to Form 10-Q for the quarter ended June 28, 1998)
  10.7     Industrial Real Estate Lease between the Company and AMB
           Property, L.P. as amended May 24, 1999 (incorporated by
           reference to Exhibit 10.1 to Form 10-Q for the quarter ended
           July 4, 1999)
  10.8     Credit and Security Agreement between the Company and
           Norwest Bank Minnesota, National Association dated December
           27, 1999 (incorporated by reference to Exhibit 10.8 to Form
           10-K for the year ended December 31, 1999)
  10.9     First Amendment to Credit and Security Agreement between the
           Company and Norwest Bank Minnesota, National Association
           (incorporated by reference to Exhibit 10.1 to Form 10-Q for
           the quarter ended June 30, 2000)
 10.10     Second Amendment to Credit and Security Agreement between
           the Company and Wells Fargo Bank Minnesota, National
           Association, f/k/a Norwest Bank Minnesota, National
           Association dated August 2, 2000 (incorporated by reference
           to Exhibit 10.2 to Form 10-Q for the quarter ended June 30,
           2000)
</Table>

                                        37
<PAGE>

<Table>
<Caption>
EXHIBIT                            DESCRIPTION                             PAGE
-------                            -----------                             ----
<C>        <S>                                                             <C>
 10.11     Third Amendment to Credit and Security Agreement between the
           Company and Wells Fargo Bank Minnesota, National
           Association, f/k/a Norwest Bank Minnesota, National
           Association dated March 7, 2001 (incorporated by reference
           to Exhibit 10.11 to Form 10-K for the year ended December
           31, 2000)
 10.12     Fourth Amendment to Credit and Security Agreement between
           the Company and Wells Fargo Bank Minnesota, National
           Association, f/k/a/ Norwest Bank Minnesota, National
           Association dated April 17, 2001 (incorporated by reference
           to Exhibit 10.1 to Form 10-Q for the quarter ended March 31,
           2001)
 10.13     Fifth Amendment to Credit and Security Agreement between the
           Company and Wells Fargo Bank Minnesota, National
           Association, f/k/a/ Norwest Bank Minnesota, National
           Association dated August 14, 2001 (incorporated by reference
           to Exhibit 10.1 to Form 10-Q for the quarter ended June 30,
           2001)
 10.14*    Form of Stock Option Agreement pursuant to the Company's
           1994 Non-Qualified Performance Option Plan (incorporated by
           reference to Exhibit 10.16 to Form 10-K for the year ended
           December 27, 1996)
 10.15*    The Company's 1996 Stock Option Plan (incorporated by
           reference to Exhibit 10.17 to Form 10-K for the year ended
           December 27, 1996)
 10.16*    Form of Employment Agreement with members of senior
           management (incorporated by reference to Exhibit 10.10 to
           Amendment No. 1 to Form S-2 Registration Statement No.
           333-31111 filed January 2, 1998)
 10.17*    Employment Agreement between the Company and Gary Olen dated
           July 1, 2000 (incorporated by reference to Exhibit 10.1 to
           Form 10-Q for the quarter ended September 30, 2000)
 10.18*    Description of 1997 Senior Management Stock Option Plan
           (incorporated by reference to Exhibit 10.10 to Form 10-K for
           the year ended December 28, 1997)
 10.19     Replacement Promissory Note from Gary Olen to the Company
           dated February 11, 2001 (incorporated by reference to
           Exhibit 10.17 to Form 10-K for the year ended December 31,
           2000
 10.20     Stock Pledge Agreement between Gary Olen and the Company
           dated February 11, 1998 (incorporated by reference to
           Exhibit 10.11 to Form 10-K for the year ended December 28,
           1997)
 10.21*    Consulting Agreement between the Company and William T. Sena
           dated April 1, 1998 (incorporated by reference to Exhibit
           10.15 to Form 10-K for the year ended January 3, 1999)
 10.22*    The Company's 1999 Stock Option Plan (incorporated by
           reference to Exhibit 10.16 to Form 10-K for the year ended
           December 31, 1999)
  21.1     Subsidiaries of the Company
  23.1     Consent of Grant Thornton LLP
  24.1     Powers of Attorney of each person whose name is signed to
           this report pursuant to a power of attorney
    99     Risk Factors
</Table>

     Those exhibits marked with an asterisk (*) above constitute management
contracts or compensatory plans or arrangements for management and executive
officers of the Company.

                                        38