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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended June 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
 For the transition period from  to
 Commission File No. 1-15289
 Sport Supply Group, Inc.
  Delaware
    
    22-2795073(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)1901 Diplomat Drive, Farmers Branch, Texas
    
    75234(Address of Principal Executive Offices)
    
    (Zip Code)
 (972) 484-9484
 Securities Registered Pursuant to Section 12(b) of the Act:
 Name of Each ExchangeTitle of Each Class
    
    On Which RegisteredCommon Stock
    
    American Stock Exchange
 Securities Registered Pursuant to Section 12(g) of the Act:
  o þ
  o þ
  þ o
 o
  o þ o
 o þ
 The aggregate market value of the voting stock of the registrant held by non-affiliates was
approximately $77,327,024, based on the closing price of such voting stock on December 29, 2006, of
$9.46.
 At September 10, 2007, there were 12,188,160 shares of common stock outstanding.
 DOCUMENTS INCORPORATED BY REFERENCE:
 The information required by Part III of this report, to the extent not set forth herein, is
incorporated by reference from the Registrants definitive 2007 Proxy Statement to be filed with
the SEC.




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##### 



Sport Supply Group, Inc.
FORM 10-K
Fiscal Year Ended June 30, 2007
TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business.
    
    2Item 1A.
    
    Risk Factors.
    
    9Item 1B.
    
    Unresolved Staff Comments.
    
    19Item 2.
    
    Properties.
    
    19Item 3.
    
    Legal Proceedings.
    
    20Item 4.
    
    Submission of Matters to a Vote of Security Holders.
    
    21PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
    
    22Item 6.
    
    Selected Financial Data.
    
    23Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    25Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk.
    
    40Item 8.
    
    Financial Statements and Supplementary Data.
    
    42Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
    
    72Item 9A.
    
    Controls and Procedures.
    
    72Item 9B.
    
    Other Information.
    
    72PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance.
    
    73Item 11.
    
    Executive Compensation.
    
    73Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
    
    73Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence.
    
    73Item 14.
    
    Principal Accounting Fees and Services.
    
    73PART IVItem 15.
    
    Exhibits, Financial Statement Schedules.
    
    74SIGNATURES
    
    
    
    80Exhibit 4.1Exhibit 10.6Exhibit 12Exhibit 21Exhibit 23Exhibit 31.1Exhibit 31.2Exhibit 32.1




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FORM 10-K ANNUAL REPORT
 This Annual Report on Form 10-K contains forward-looking statements that are based on Sport
Supply Group, Inc.s (f.k.a. Collegiate Pacific Inc.) and its consolidated subsidiaries (Sport
Supply Group, we, us, our, or the Company) current expectations or forecasts of future
events. Actual results in future periods may differ materially from those expressed or implied by
those forward-looking statements because of a number of risks and uncertainties. For a discussion
of risk factors affecting Sport Supply Groups business and prospects, see Item 1A  Risk
Factors.
 Our fiscal year ends on June 30 of each year. Accordingly, references in this report to
fiscal 2004, fiscal 2005, fiscal 2006, fiscal 2007, and fiscal 2008 refer to our fiscal
years ended or ending, as the case may be, June 30, 2004, 2005, 2006, 2007 and 2008, respectively.
 
 PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS.
 Our Business
 soft goods
  
    
    our unique, informative catalogs and fliers that we distribute to potential customers;
    
    our strategically located road sales professionals;
    
    our telemarketers;
    
    our appearance at trade shows and other sales events; and
    
    the Internet.
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Corporate History; Additional Information
 Salkeld OTS Dixie Tomark SSG
  SEC
 Acquisition Strategy
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Fiscal 2007
 
    
    Old SSG in November 2006  completed the acquisition of the remaining
26.8% of the capital stock of Old SSG that we did not already own. Old SSG was a direct
marketer and Business-To-Business (B2B) e-commerce supplier of sporting
goods and physical education equipment to the institutional and youth sports
markets.
 Fiscal 2006
 
    
    Old SSG in July 2005  acquired 53.2% of the outstanding capital stock of Old
SSG in July 2005. During the second quarter of fiscal 2006, we acquired an additional
20% of the outstanding capital stock of Old SSG bringing our total ownership to 73.2%;
    
    The operating assets of Team Print in August 2005  a leading embroiderer and
screen printer of sporting goods apparel and accessories, which was acquired from one
of the former stockholders of Salkeld;
 Fiscal 2005
 
    
    Dixie in July 2004  a leading supplier of soft goods and sporting goods
equipment throughout the Mid-Atlantic region of the United States, with a road sales
force of approximately 56 employees;
    
    OTS in December 2004  a leading supplier of soft goods and sporting goods
equipment throughout the State of Florida with a road sales force of approximately 13
employees;
    
    Salkeld in May 2005  a leading supplier of soft goods and sporting goods
equipment throughout the State of Illinois, with a particular concentration in Chicago
and a road sales force of approximately 13 employees;
 Fiscal 2004
 
    
    Tomark in January 2004  a marketer, distributor, manufacturer and installer
of sporting goods and related equipment primarily to the California institutional
market with a road sales force of approximately 8 employees; and
    
    Kesslers in April 2004  a leading supplier of soft goods and sporting goods
equipment throughout the Mid-West region of the United States, with a road sales force
of approximately 85 employees.
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Products and Services
   Product
    
    Brand NameTeam sports apparel (soft goods)
    
    Nike, Rawlings, Wilson,
Under Armour and ChampionBatting cages, soccer goals, basketball goals
    
    FunNets, Mark One, MacGregor and AlumagoalCamping and related accessories
    
    Mark OneTennis nets and court equipment
    
    Edwards, Rol-DriBaseballs, caps, softballs, bats, gloves and
accessories
    
    Diamond, Mark One, New Era
Ryan Express, Wilson, MacGregor,
Rawlings, Easton and Pro BaseFootball helmets, footballs, pads and accessories
    
    Schutt, Pro DownBasketballs
    
    Mark One, Spalding, MacGregor and
VoitPhysical Education and Recreation
    
    Voit, Gamecraft and GSCExercise equipment
    
    Champion Barbell and Brute ForceTrack and field
    
    Port-A-Pit
 Team Sports Apparel (soft goods). Nike Rawlings, Wilson, Under Armour, Champion
 Cages, Goals and Camping Equipment FunNets Mark
One Alumagoal MacGregor ®
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Tennis Edwards Edwards Rol-Dri Tidi-Court
 Baseball and Softball. Diamond, Rawlings, Easton, New Era Wilson Diamond Wilson MarkOne New Era New Era Ryan Express. Pro Base
 Football. Schutt Schutt Pro Down
 Basketball. Spalding Spalding MarkOne, Voit, MacGregor ®
 Physical Education and Recreation. Gamecraft GSC
 Exercise Equipment. Champion Barbell Brute Force
 Track and field. Port-A-Pit
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Adidas® New Era®, Nike® Rawlings®,Champion®, Schutt® Spalding® Wilson® Under Armour® Edwards®, Rol-Dri® Mark One®, MacGregor®, Voit®,
Alumagoal® FunNets® New Era
 Sales and Marketing
    Customers
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Seasonal Nature of Business; Backlog
   Manufacturing; Foreign Sourcing and Raw Materials
   
    
    shipment delays;
    
    fluctuations in exchange rates;
    
    increases in import duties;
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
    
    changes in customs regulations;
    
    adverse economic conditions in foreign countries;
    
    social, political and economic instability;
    
    acts of war and terrorism.
    
    strikes by the International Longshore and Warehouse Union (the ILWU) (union of
dock workers that move cargo, such as import containers, along the West Coast); and
    
    lockout of the ILWU by the Pacific Maritime Association (group of global ship
owners and terminal operators).
  Competition
  Government Regulation
  Employees
  
 ITEM 1A. RISK FACTORS.
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Our success depends upon our ability to develop new, and enhance our existing relationships with,
customers and suppliers.
  
    
    effectively develop new relationships and maintain and better penetrate existing
relationships with our suppliers, advertisers and customers;
    
    provide quality products at competitive prices;
    
    respond to competitive developments;
    
    attract, retain, and motivate qualified personnel; and
    
    anticipate and respond to merchandise trends and consumer demands.
  We may be unable to make additional acquisitions on attractive terms or successfully integrate them
into our operations.
   
    
    the difficulties related to assimilating the management, products, personnel,
financial controls and other systems of an acquired business and to integrating
distribution and information systems and other operational capabilities;
    
    the difficulties related to combining previously separate businesses into a single
unit;
    
    the substantial diversion of managements attention from day-to-day operations;
    
    the assumption of liabilities of an acquired business, including unforeseen
liabilities;
    
    unanticipated costs associated with business acquisitions;
    
    the failure to realize anticipated benefits, such as cost savings, revenue
enhancements and profitability objectives;
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
    
    the dilution of existing stockholders due to the issuance of equity securities,
utilization of cash reserves, or incurrence of debt in order to fund the acquisitions;
    
    the potential to have to write-down or write-off the value of acquired assets;
    
    the potentially substantial transaction costs associated with completed
acquisitions or pursuing acquisitions that are not completed;
    
    the loss of any key personnel of the acquired company; and
    
    maintaining customer, supplier or other favorable business relationships of
acquired operations.
 Our success depends on our ability to manage our growth.
  
    
    these resources will be available, or be available in a cost-effective form, to us
which will allow us to sustain growth at the same levels;
    
    our current personnel, systems, procedures, and controls will be adequate to
support our future operations; or
    
    we will identify, hire, train, motivate or manage required personnel.
  We face intense competition and potential competition from companies with greater resources and our
inability to compete effectively with these companies could harm our business.
  
    
    substantially greater financial resources;
    
    a larger customer base;
    
    a broader line of product offerings; and
    
    greater name recognition within the industry.
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We are dependent on competitive pricing from our suppliers.
  The weak financial conditions of some of our customers may adversely affect our business.
  Our financial results vary from quarter to quarter, which could hurt our business and the market
price of our stock.
  
    
    seasonal fluctuations in demand for our products;
    
    the timing and introduction of new products by us and our competitors;
    
    the market acceptance of our products;
    
    the mix of products sold;
    
    the timing of significant orders from and shipments to customers;
    
    the reduction, rescheduling or cancellation of orders by our customers;
    
    product pricing and discounts;
    
    the timing of our acquisitions of other companies and businesses; and
    
    general economic conditions.
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Seasonality of our business may adversely affect our net sales and operating income.
  State and local sales tax collection may affect demand for our products.
  We depend on key personnel for our future success.
   We depend on international and domestic suppliers.
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
    
    shipment delays;
    
    fluctuation in exchange rates;
    
    increases in import duties;
    
    changes in customs regulations;
    
    adverse economic conditions in foreign countries;
    
    social, political and economic instability;
    
    acts of war and terrorism;
    
    strikes by the ILWU (union of dock workers that move cargo, such as import
containers, along the West Coast);
    
    lockout of the ILWU by the Pacific Maritime Association (group of global ship
owners and terminal operators); and
    
    having to carry extra inventory due to the long lead times.
  We depend on a large number of domestic suppliers for our finished goods.
  We depend on third-party carriers.
  
    
    shipment delays caused by such carriers;
    
    labor strikes by the employees of such carriers;
    
    increases in shipping costs and postage rates; and
    
    other adverse economic conditions.
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We have in the past, and may continue to be subject to product liability claims if people or
property are harmed by the products we sell.
  We have a material amount of goodwill and may be required to recognize future intangible impairment
charges.
 US GAAP
 Acts of war or terrorism may have an adverse effect on our business.
  Our operations are largely dependent on our information technology systems, which require
significant expenditures and entail risk.
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Risks Related to our Corporate Structure and Stock
 Our stock price could be subject to significant volatility.
  
    
    the depth and liquidity of the market for our common stock;
    
    investor perception of our company and the industry within which we compete;
    
    analysts expectations for our future performance and our ability to meet such
expectations;
    
    quarterly variations in operating results; and
    
    general economic and market conditions.
  A large number of our outstanding shares and shares to be issued upon exercise of our outstanding
options may be sold into the market in the future, which could cause the market price of our common
stock to drop significantly, even if our business is doing well.
 2007 Plan
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Four principal stockholders own a significant amount of our outstanding common stock.
  Rights of our stockholders may be negatively affected if we issue any of the shares of preferred
stock, which our Board of Directors has authority to issue.
  Risks Related to the Senior Subordinated Notes Due 2009
 We significantly increased our leverage because of the sale of the notes.
  The notes are subordinated and there are no financial covenants in the indenture.
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We may be unable to repay, repurchase or redeem the notes.
  Provisions of the notes could discourage an acquisition of us by a third party.
  The make whole premium on the notes tendered for repurchase upon a fundamental change may not
adequately compensate the holders for the lost option time value of notes.
  A market may not develop for the notes.
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Conversion of the notes or issuance of additional securities convertible into or exercisable for
shares of our common stock could dilute the ownership of existing stockholders.
  The price at which our common stock may be purchased on the American Stock Exchange is currently
lower than the conversion price of the notes and may remain lower in the future.
  The notes are not rated.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
  
 ITEM 2. PROPERTIES.
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Lease ExpiresLocation
    
    Type of Facility
    
    Square Footage
    
    or is OwnedFarmers Branch, Texas
    
    Warehouse, Production and Distribution
    
    
    48,000
    
    
    
    2010Farmers Branch, Texas
    
    Warehouse, Production and Distribution
    
    
    137,600
    
    
    
    2010Farmers Branch, Texas
    
    Warehouse and Fulfillment
    
    
    181,000
    
    
    
    2010Richmond, Indiana
    
    Warehouse, Production and Distribution
    
    
    76,000
    
    
    
    2009Richmond, Virginia
    
    Warehouse, Production and Distribution
    
    
    37,300
    
    
    
    2008Corona, California
    
    Warehouse, Production and Distribution
    
    
    29,700
    
    
    
    2009Sanford, Florida
    
    Warehouse, Production and Distribution
    
    
    12,000
    
    
    
    2010Bourbonnais, Illinois
    
    Warehouse, Production and Distribution
    
    
    10,000
    
    
    
    2009Bourbonnais, Illinois
    
    Embroidering and Screen Printing
    
    
    16,000
    
    
    
    2010Anniston, Alabama
    
    Manufacturing
    
    
    35,000
    
    
    OwnedAnniston, Alabama
    
    Manufacturing
    
    
    45,000
    
    
    Owned
   
 ITEM 3. LEGAL PROCEEDINGS.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   - 21 -




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market
  Fiscal 2007
    
    
    Fiscal 2006Calendar Quarter
    
    Low
    
    
    High
    
    
    Low
    
    
    HighJuly 1  September 30
    
    $
    8.23
    
    
    $
    10.75
    
    
    $
    10.30
    
    
    $
    12.68October 1  December 31
    
    
    9.08
    
    
    
    10.50
    
    
    
    8.71
    
    
    
    11.60January 1  March 31
    
    
    7.80
    
    
    
    9.48
    
    
    
    9.12
    
    
    
    10.85April 1  June 30
    
    
    7.44
    
    
    
    9.71
    
    
    
    9.76
    
    
    
    11.19
 Stock Price Performance Graph
 The following performance graph does not constitute soliciting material and should not be
deemed filed or incorporated by reference into any other Sport Supply Group filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Sport Supply
Group specifically incorporates this performance graph therein, or subject to the liabilities of
Section 18 of the Securities Exchange Act of 1934.
  Comparison of 5-Year Cumulative Total Return
(Assumes $100 Invested on July 1, 2002)
 
 7/1/2002
    
    
    6/30/2003
    
    
    6/30/2004
    
    
    6/30/2005
    
    
    6/30/2006
    
    
    6/30/2007Sport Supply Group,
Inc.
    
    
    100.00
    
    
    
    138.65
    
    
    
    238.48
    
    
    
    219.90
    
    
    
    231.76
    
    
    
    211.11Amex Market index
    
    
    100.00
    
    
    
    111.40
    
    
    
    132.73
    
    
    
    146.13
    
    
    
    167.95
    
    
    
    201.01Peer Group Index
    
    
    100.00
    
    
    
    114.28
    
    
    
    214.78
    
    
    
    222.57
    
    
    
    206.14
    
    
    
    221.97
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Holders
  Dividends
  Transfer Agent, Registrar and Dividend Disbursing Agent for Common Stock
 
 
 ITEM 6. SELECTED FINANCIAL DATA.
  Fiscal Year Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(In thousands except per share data )Results of Operations:Net sales
    
    $
    236,855
    
    
    $
    224,238
    
    
    $
    106,339
    
    
    $
    39,562
    
    
    $
    21,076Gross profit
    
    
    83,560
    
    
    
    75,079
    
    
    
    35,954
    
    
    
    13,956
    
    
    
    7,807Operating profit
    
    
    12,690
    
    
    
    8,312
    
    
    
    7,303
    
    
    
    2,847
    
    
    
    968Net income
    
    $
    3,860
    
    
    $
    1,896
    
    
    $
    3,601
    
    
    $
    1,673
    
    
    $
    1,254Earnings per common share:Basic
    
    $
    0.38
    
    
    $
    0.19
    
    
    $
    0.36
    
    
    $
    0.26
    
    
    $
    0.30Diluted
    
    $
    0.37
    
    
    $
    0.18
    
    
    $
    0.35
    
    
    $
    0.22
    
    
    $
    0.27Number of weighted average
shares outstanding:Basic
    
    
    10,235
    
    
    
    10,182
    
    
    
    10,031
    
    
    
    6,325
    
    
    
    4,226Diluted
    
    
    10,374
    
    
    
    10,399
    
    
    
    10,279
    
    
    
    7,572
    
    
    
    4,670
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Fiscal Year Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(In thousands except per share data )Cash Flow
and Balance Sheet Data:Net cash provided by (used in)
operating activities
    
    $
    18,887
    
    
    $
    (172
    )
    
    $
    (2,862
    )
    
    $
    153
    
    
    $
    214Cash and cash equivalents
    
    
    5,670
    
    
    
    4,079
    
    
    
    40,326
    
    
    
    7,473
    
    
    
    365Total assets
    
    
    156,592
    
    
    
    145,721
    
    
    
    108,596
    
    
    
    46,736
    
    
    
    8,825Long-term debt
    
    
    71,386
    
    
    
    62,284
    
    
    
    50,448
    
    
    
    73
    
    
    
    800Cash dividends declared per
common share
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.085Total stockholders equity
    
    $
    50,536
    
    
    $
    46,588
    
    
    $
    45,106
    
    
    $
    32,073
    
    
    $
    6,015
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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Background
  Overview
      - 25 -




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
    
    We completed the following acquisition during fiscal 2007:
 
    
    acquiring the remaining 26.8% of the outstanding capital stock of Old SSG.
 
    
    We completed the following two acquisitions during fiscal 2006:
 
    
    acquiring 73.2% of the outstanding capital stock of Old SSG, a direct marketer and B2B e-commerce supplier of sporting goods and physical education equipment to the institutional and youth sports markets; and
    
    acquiring the operating assets of Team Print, a leading embroiderer and screen printer of sporting goods apparel and accessories.
 
    
    We completed the following three acquisitions during fiscal 2005:
 
    
    acquiring Dixie in July 2004, a leading supplier of soft goods and sporting goods equipment throughout the Mid-Atlantic region of the United States, with a road sales force of approximately 56 employees at the date of acquisition;
    
    acquiring OTS in December 2004, a leading supplier of soft goods and sporting goods equipment throughout the State of Florida and a road sales force of approximately 13 employees at the date of acquisition; and
    
    acquiring Salkeld in May 2005, a leading supplier of soft goods and sporting goods equipment throughout the State of Illinois, with a particular concentration in Chicago and a road sales force of approximately 13 employees at the date of acquisition;
 
    
    We completed the following two acquisitions during fiscal 2004:
 
    
    acquiring Tomark in January 2004, a marketer, distributor, manufacturer and installer of sporting goods and related equipment primarily to the California institutional market with a road sales force of approximately 8 employees at the date of acquisition; and
    
    acquiring Kesslers in April 2004, a leading supplier of soft goods and sporting goods equipment throughout the Mid-West region of the United States, with a road sales force of approximately 85 employees at the date of acquisition.
 
    
    Each year we expanded our football and baseball product offerings, which provide the Company with additional products for future growth opportunities;
    
    Since 2005, we engaged through our acquisition of Kesslers, Dixie, OTS and Salkeld approximately 167 road sales professionals and continued our ongoing efforts to grow net sales by directing a selection of our traditional catalog customers to our road sales professionals;
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
    
    On June 30, 2007, the Company merged its wholly-owned
subsidiary Tomark into itself, with the Company surviving such merger. Also on June 30, 2007, the Company merged its wholly-owned subsidiary Old SSG into itself, with the Company surviving such merger and changing its name
to Sport Supply Group, Inc. In connection with such mergers and name change, the Company
changed the trading symbol of its common stock on The American Stock Exchange from BOO to
RBI, effective July 1, 2007.
    
    We introduced a number of new products during fiscal 2005, 2006 and 2007 as a means
to drive organic growth; and
    
    We completed a private placement of $50.0 million of convertible senior subordinated
notes in November 2004, we replaced our senior secured facility with a new senior secured
credit facility providing up to $55.0 million in the aggregate of loans and other
financial accommodations, and in July 2007, we sold 1,830,000 shares of our common stock
in a private placement, using the proceeds to pay down the senior secured facility. These
new sources of capital provide us more opportunity and flexibility to make progress
toward our strategic objectives.
 Fiscal 2007 and 2006 Acquisitions and Related Developments
 SSG B2B
 Original Merger Agreement
  Merger Transaction
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Matters Affecting Comparability
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Consolidated Results of Operations
  Fiscal 2007 vs.
    
    
    Fiscal 2006 vs.Fiscal 2006
    
    
    Fiscal 2005Fiscal
    
    
    Fiscal
    
    
    Fiscal
    
    
    Increase (decrease)
    
    
    Increase (decrease)(dollars in thousands, except per share amounts)
    
    2007
    
    
    2006
    
    
    2005
    
    
    $
    
    
    %
    
    
    $
    
    
    %Net sales
    
    $
    236,855
    
    
    $
    224,238
    
    
    $
    106,339
    
    
    $
    12,617
    
    
    
    5.6
    %
    
    $
    117,899
    
    
    
    110.9
    %Gross profit
    
    
    83,560
    
    
    
    75,079
    
    
    
    35,954
    
    
    
    8,481
    
    
    
    11.3
    %
    
    
    39,125
    
    
    
    108.8
    %Operating profit
    
    
    12,690
    
    
    
    8,312
    
    
    
    7,303
    
    
    
    4,378
    
    
    
    52.7
    %
    
    
    1,009
    
    
    
    13.8
    %Net income
    
    
    3,860
    
    
    
    1,896
    
    
    
    3,601
    
    
    
    1,964
    
    
    
    103.6
    %
    
    
    (1,705
    )
    
    
    (47.3
    )%Earnings per share  basic
    
    $
    0.38
    
    
    $
    0.19
    
    
    $
    0.36
    
    
    $
    0.19
    
    
    
    100.0
    %
    
    $
    (0.17
    )
    
    
    (47.2
    )%Earnings per share  diluted
    
    $
    0.37
    
    
    $
    0.18
    
    
    $
    0.35
    
    
    $
    0.19
    
    
    
    105.6
    %
    
    $
    (0.17
    )
    
    
    (48.6
    )%Expressed as a percentage of net sales:Gross profit margin
    
    
    35.3
    %
    
    
    33.5
    %
    
    
    33.8
    %Selling, general and
administrative expenses
    
    
    29.9
    %
    
    
    29.8
    %
    
    
    26.9
    %Operating profit
    
    
    5.4
    %
    
    
    3.7
    %
    
    
    6.9
    %
 Fiscal Year Ended June 30, 2007 Compared to Fiscal Year Ended June 30, 2006
 Net Sales.
  Gross Profit.
   - 29 -




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##### Table of Contents



Selling, General and Administrative Expense. SG&A
 
    
    personnel and group insurance related expenses of approximately $38.0 million;
    
    advertising and catalog production expenses of approximately $7.6 million;
    
    depreciation and amortization of approximately $3.3 million;
    
    rent expense of approximately $2.7 million;
    
    computer services and supplies of approximately $2.3 million;
    
    legal and accounting fees of approximately $2.2 million;
    
    travel expenses of approximately $2.1 million;
    
    bank charges of approximately $1.1 million;
    
    bad debt expenses of approximately $1.1 million;
    
    general insurance related expenses of approximately $852 thousand;
    
    Sarbanes-Oxley related compliance costs of approximately $635 thousand; and
    
    sales tax expenses of $871 thousand.
  Operating Profit.
 Interest Expense.
 Minority Interest
  - 30 -




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##### Table of Contents



Income Taxes.
 Net Income.
 Fiscal Year Ended June 30, 2006 Compared to Fiscal Year Ended June 30, 2005
 Net Sales.
 Gross Profit.
   , Business Combinations
 Selling, General and Administrative Expense. SG&A
 
    
    personnel related expenses of approximately $32.4 million;
    
    advertising and catalog production expenses of approximately $7.2 million;
    
    depreciation and amortization of approximately $3.3 million;
  - 31 -




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##### Table of Contents




    
    rent expense of approximately $2.8 million;
    
    computer services and supplies of approximately $2.6 million;
    
    general and group insurance related expenses of approximately $2.5 million;
    
    legal and accounting fees of approximately $2.1 million;
    
    travel expenses of approximately $1.9 million;
    
    Sarbanes-Oxley related compliance costs of approximately $1.1 million; and
    
    bad debt expenses of approximately $1.0 million.
  
    
    Sarbanes-Oxley related compliance costs of approximately $1.1 million;
    
    legal, accounting, and professional fees of approximately $1.3 million; and
    
    additional compensation expense of $5.9 million, which included salaries, commissions and payroll related expenses.
 Operating Profit.
 Interest Expense.
 Income Taxes.
 Net Income.
  - 32 -




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##### Table of Contents



Liquidity and Capital Resources
 Liquidity
  June 30,
    
    
    June 30,
    
    
    June 30,(dollars in thousands)
    
    2007
    
    
    2006
    
    
    2005Cash and cash equivalents
    
    $
    5,670
    
    
    $
    4,079
    
    
    $
    40,326Net cash flow provided by (used in):Operating activities
    
    $
    18,887
    
    
    $
    (172
    )
    
    $
    (2,862
    )Investing activities
    
    
    (27,887
    )
    
    
    (46,089
    )
    
    
    (10,083
    )Financing activities
    
    
    10,591
    
    
    
    10,014
    
    
    
    45,798Net increase (decrease) in cash and cash equivalents
    
    $
    1,591
    
    
    $
    (36,247
    )
    
    $
    32,853
  Operating Activities.
 
    
    a decrease in inventories of $4.9 million during fiscal 2007 compared to a $2.1 million increase in inventories during fiscal 2006, which is attributable to the increase in net sales, improved inventory management in our catalog operations, and the ongoing consolidation of inventories and manufacturing operations following the consummation of the Merger Transaction;
    
    a decrease in prepaid expenses and other current assets of $819 thousand during fiscal 2007, compared to a $1.2 million increase in prepaid expenses and other current assets during fiscal 2006, which is due primarily to advertising costs and the production of catalogs to be mailed in future periods;
    
    an increase in accrued liabilities of $2.5 million during fiscal 2007, compared to a $388 thousand decrease in accrued liabilities in fiscal 2006, which is due primarily to increases in accrued sales tax payable and accrued wages payable;
    
    an increase in accounts payable of $1.4 million during fiscal 2007, compared to a $1.3 million decrease in accounts payable in fiscal 2006, which is due primarily to increased net sales and improved vendor and cash management;
    
    a decrease in deferred taxes of $2.5 million during fiscal 2007, compared to a $1.1 million decrease in deferred taxes in fiscal 2006, which is due primarily to the utilization of the net operating loss carryforwards; and
    
    an increase in accounts receivable of $1.2 million during fiscal 2007, compared to a $2.8 million increase in accounts receivable during fiscal 2006, which is primarily attributable to increased net sales offset by a reduction in accounts receivable days sales outstanding to 54 days at June 30, 2007 from 57 days at June 30, 2006.
  - 33 -




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##### Table of Contents



Investing Activities.
 Financing Activities.
 
    
    proceeds from the Companys revolving credit facility of $34.9 million;
    
    proceeds from the issuance of common stock upon the exercise of options of approximately $608 thousand; and
    
    tax benefit related to the exercise of stock options of $507 thousand.
  
    
    the payment of dividends in the amount of approximately $1.0 million; and
    
    payments on notes payable and the Companys revolving line of credit and term loan of $24.4 million.
  Capital Resources
 Notes
  - 34 -




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##### Table of Contents



Indenture
 SEC Registration Statement
 Senior Credit Agreement MLBFS
 Term Loan Revolving Facility Senior Credit Facility
  LIBOR EBITDA Senior Leverage Ratio
  - 35 -




---



##### Table of Contents



Fixed Charge Coverage Ratio
    Purchase
Agreement Purchaser Shares Common Stock
   - 36 -




---



##### Table of Contents



Long-Term Financial Obligations and Other Commercial Commitments
  Payments due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 year
    
    

1 - 3 years
    
    
    3 - 5 years
    
    
    5 years(dollars in thousands)Contractual ObligationsLong-term debt, including current portion
    
    $
    74,994
    
    
    $
    3,608
    
    
    $
    71,386
    
    
    $
    
    
    
    $
    Operating leases
    
    
    7,530
    
    
    
    2,930
    
    
    
    4,046
    
    
    
    554
    
    
    
    Interest expense on long-term debt
    
    
    13,664
    
    
    
    5,697
    
    
    
    7,967
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    96,188
    
    
    $
    12,235
    
    
    $
    83,399
    
    
    $
    554
    
    
    $
    
 Long-Term Debt and Advances Under Credit Facilities.
 Operating Leases.
 Off-Balance Sheet Arrangements.
  - 37 -




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##### Table of Contents



Subsequent Events
 2007 Plan Board
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes FIN 48 . SFAS Accounting for
Income Taxes
 Fair Value Measurements SFAS 157
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115 SFAS 159
  - 38 -




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##### Table of Contents



Risk Factors Affecting Sport Supply Groups Business and Prospects
  Critical Accounting Policies
   Inventories.
 Allowance for Doubtful Accounts. Form 10-K.
  - 39 -




---



##### Table of Contents



Goodwill, Intangibles and Long-lived Assets.
 Accounting for Business Combinations.
 Impact of Inflation and Changing Prices
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 Interest Rates
 based on LIBOR
  - 40 -




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Foreign Currency and Derivatives
   - 41 -




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 PageIndex to Consolidated Financial Statements
    
    
    42Managements Report on Internal Control Over Financial Reporting
    
    
    43Report of Independent Registered Public Accounting Firm
    
    
    44Consolidated Balance Sheets as of June 30, 2007 and 2006
    
    
    47Consolidated Statements of Income for the fiscal years ended June 30,
2007, 2006 and 2005
    
    
    48Consolidated Statements of Stockholders Equity for the fiscal years
ended June 30, 2007, 2006 and 2005
    
    
    49Consolidated Statements of Cash Flows for the fiscal years ended
June 30, 2007, 2006 and 2005
    
    
    50Notes to Consolidated Financial Statements
    
    
    51
  - 42 -




---



##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   Internal Control
 Integrated Framework.
   - 43 -




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework
  - 44 -




---



##### Table of Contents



/s/ Grant
Thornton LLP
 
  - 45 -




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
        
  - 46 -




---



##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 June 30,2007
    
    
    2006(In thousands, except shareand per share amounts)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    5,670
    
    
    $
    4,079Accounts receivable, net of allowance for doubtful accounts of
$1,296 and $1,496, respectively
    
    
    31,154
    
    
    
    31,004Inventories
    
    
    32,241
    
    
    
    37,185Current portion of deferred income taxes
    
    
    3,790
    
    
    
    3,359Prepaid income taxes
    
    
    3,208
    
    
    
    1,607Prepaid expenses and other current assets
    
    
    1,380
    
    
    
    2,199Total current assets
    
    
    77,443
    
    
    
    79,433PROPERTY AND EQUIPMENT, net of accumulated depreciation of $4,986 and $2,755, respectively
    
    
    10,678
    
    
    
    10,087DEFERRED DEBT ISSUANCE COSTS, net of accumulated amortization of $2,035 and $1,076, respectively
    
    
    2,309
    
    
    
    2,782INTANGIBLE ASSETS, net of accumulated amortization of $3,379 and $2,188, respectively
    
    
    8,024
    
    
    
    9,014GOODWILL
    
    
    54,949
    
    
    
    40,832DEFERRED INCOME TAXES
    
    
    3,045
    
    
    
    3,156OTHER ASSETS, net
    
    
    144
    
    
    
    417Total assets
    
    $
    156,592
    
    
    $
    145,721LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    16,167
    
    
    $
    14,802Accrued liabilities
    
    
    10,318
    
    
    
    7,828Dividends payable
    
    
    259
    
    
    
    256Accrued interest
    
    
    291
    
    
    
    329Current portion of long-term debt
    
    
    3,608
    
    
    
    2,210Deferred tax liability
    
    
    129
    
    
    
    15Total current liabilities
    
    
    30,772
    
    
    
    25,440DEFERRED TAX LIABILITY
    
    
    3,898
    
    
    
    3,259NOTES PAYABLE AND OTHER LONG-TERM DEBT
    
    
    71,386
    
    
    
    62,284COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN SUBSIDIARY
    
    
    
    
    
    
    8,150STOCKHOLDERS EQUITY:Preferred stock, $0.01 par value, 1,000,000 shares authorized; no shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 50,000,000 shares authorized;
10,440,586 and 10,315,191 shares issued and 10,354,560 and 10,229,165 shares outstanding, respectively
    
    
    104
    
    
    
    103Additional paid-in capital
    
    
    44,276
    
    
    
    43,162Retained earnings
    
    
    6,813
    
    
    
    3,980Treasury stock at cost, 86,026 shares
    
    
    (657
    )
    
    
    (657
    )Total stockholders equity
    
    
    50,536
    
    
    
    46,588Total liabilities and stockholders equity
    
    $
    156,592
    
    
    $
    145,721
   - 47 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the fiscal years ended June 30,2007
    
    
    2006
    
    
    2005(In thousands, except share and per share data)Net sales
    
    $
    236,855
    
    
    $
    224,238
    
    
    $
    106,339Cost of sales
    
    
    153,295
    
    
    
    149,159
    
    
    
    70,385Gross profit
    
    
    83,560
    
    
    
    75,079
    
    
    
    35,954Selling, general and administrative expenses
    
    
    70,870
    
    
    
    66,767
    
    
    
    28,651Operating profit
    
    
    12,690
    
    
    
    8,312
    
    
    
    7,303Other income (expense):Interest income
    
    
    191
    
    
    
    117
    
    
    
    581Interest expense
    
    
    (6,002
    )
    
    
    (4,545
    )
    
    
    (2,160
    )Other income
    
    
    146
    
    
    
    223
    
    
    
    174Total other expense
    
    
    (5,665
    )
    
    
    (4,205
    )
    
    
    (1,405
    )Income before minority interest in income of consolidated subsidiary and income taxes
    
    
    7,025
    
    
    
    4,107
    
    
    
    5,898Income tax provision
    
    
    2,634
    
    
    
    1,603
    
    
    
    2,297Minority interest in income of consolidated subsidiary, net of tax
    
    
    531
    
    
    
    608
    
    
    
    Net income
    
    $
    3,860
    
    
    $
    1,896
    
    
    $
    3,601Weighted average number of shares outstanding:Basic
    
    
    10,235,308
    
    
    
    10,182,428
    
    
    
    10,031,314Diluted
    
    
    10,373,907
    
    
    
    10,399,130
    
    
    
    10,279,185Net income per share of common stock  basic
    
    $
    0.38
    
    
    $
    0.19
    
    
    $
    0.36Net income per share of common stock  diluted
    
    $
    0.37
    
    
    $
    0.18
    
    
    $
    0.35Dividends declared per share of common stock
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.10
   - 48 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 For the fiscal years ended June 30, 2007, 2006 and 2005
 ADDITIONALCOMMON STOCK
    
    
    PAID-IN
    
    
    RETAINED
    
    
    TREASURY STOCKSHARES
    
    
    AMOUNT
    
    
    CAPITAL
    
    
    EARNINGS
    
    
    SHARES
    
    
    AMOUNT
    
    
    TOTAL(In thousands, except share data)Balances at July 1, 2004
    
    
    9,884,137
    
    
    $
    99
    
    
    $
    31,470
    
    
    $
    1,162
    
    
    
    86,026
    
    
    $
    (657
    )
    
    $
    32,074Issuance of stock for cash
    
    
    89,850
    
    
    
    1
    
    
    
    506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    507Issuance of stock for
business acquisitions
    
    
    231,788
    
    
    
    2
    
    
    
    2,685
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,687Redeemable common stock
    
    
    
    
    
    
    
    
    
    
    7,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,250Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,013
    )
    
    
    
    
    
    
    
    
    
    
    (1,013
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,601
    
    
    
    
    
    
    
    
    
    
    
    3,601Balances at June 30, 2005
    
    
    10,205,775
    
    
    
    102
    
    
    
    41,911
    
    
    
    3,750
    
    
    
    86,026
    
    
    
    (657
    )
    
    
    45,106Issuance of stock for cash
    
    
    22,950
    
    
    
    
    
    
    
    185
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185Stock based compensation
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60Issuance of stock for business acquisitions
    
    
    86,461
    
    
    
    1
    
    
    
    1,006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,007Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,020
    )
    
    
    
    
    
    
    
    
    
    
    (1,020
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,896
    
    
    
    
    
    
    
    
    
    
    
    1,896Balances at June 30, 2006
    
    
    10,315,186
    
    
    
    103
    
    
    
    43,162
    
    
    
    4,626
    
    
    
    86,026
    
    
    
    (657
    )
    
    
    47,234SAB No 108 cummulative effect adjustment (Note 2 )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (646
    )
    
    
    
    
    
    
    
    
    
    
    (646
    )Adjusted balances at July 1, 2006
    
    
    10,315,186
    
    
    
    103
    
    
    
    43,162
    
    
    
    3,980
    
    
    
    86,026
    
    
    
    (657
    )
    
    
    46,588Issuance of stock for cash
    
    
    125,400
    
    
    
    1
    
    
    
    607
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    608Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,027
    )
    
    
    
    
    
    
    
    
    
    
    (1,027
    )Tax benefit related to the exercise of stock options
    
    
    
    
    
    
    
    
    
    
    507
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    507Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,860
    
    
    
    
    
    
    
    
    
    
    
    3,860Balances at June 30, 2007
    
    
    10,440,586
    
    
    $
    104
    
    
    $
    44,276
    
    
    $
    6,813
    
    
    
    86,026
    
    
    $
    (657
    )
    
    $
    50,536
   - 49 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the years ended June 30,2007
    
    
    2006
    
    
    2005(In thousands, except share data)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    3,860
    
    
    $
    1,896
    
    
    $
    3,601Adjustments to reconcile net income to cash provided by (used in) operating activities:Provision for uncollectible accounts receivable
    
    
    1,099
    
    
    
    982
    
    
    
    574Depreciation expense
    
    
    2,389
    
    
    
    2,080
    
    
    
    432Amortization expense
    
    
    1,090
    
    
    
    1,356
    
    
    
    742Amortization of deferred debt issuance costs
    
    
    959
    
    
    
    683
    
    
    
    393Loss on disposition of property and equipment
    
    
    
    
    
    
    60
    
    
    
    Deferred taxes
    
    
    2,542
    
    
    
    1,060
    
    
    
    (25
    )Stock-based compensation expense
    
    
    
    
    
    
    60
    
    
    
    Minority interest in consolidated subsidiary
    
    
    531
    
    
    
    608
    
    
    
    Changes in operating assets and liabilities (net of effects of acquisitions):Accounts receivable
    
    
    (1,249
    )
    
    
    (2,793
    )
    
    
    (3,598
    )Inventories
    
    
    4,944
    
    
    
    (2,083
    )
    
    
    (4,255
    )Prepaid Income taxes
    
    
    (1,601
    )
    
    
    (962
    )
    
    
    (1,345
    )Prepaid expenses and other current assets
    
    
    819
    
    
    
    (1,248
    )
    
    
    43Other assets, net
    
    
    (313
    )
    
    
    (145
    )
    
    
    104Accounts payable
    
    
    1,365
    
    
    
    (1,338
    )
    
    
    353Accrued liabilities
    
    
    2,452
    
    
    
    (388
    )
    
    
    119Net cash provided by (used in) operating activities:
    
    
    18,887
    
    
    
    (172
    )
    
    
    (2,862
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (2,980
    )
    
    
    (1,694
    )
    
    
    (664
    )Cash used in business acquisitions, net of cash acquired of
$0, $864 and $219, respectively
    
    
    (24,907
    )
    
    
    (44,395
    )
    
    
    (9,419
    )Net cash used in investing activities:
    
    
    (27,887
    )
    
    
    (46,089
    )
    
    
    (10,083
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from bank line of credit
    
    
    34,935
    
    
    
    174,895
    
    
    
    13,375Payments on notes payable and line of credit
    
    
    (24,435
    )
    
    
    (164,046
    )
    
    
    (13,669
    )Proceeds from issuance of senior subordinated notes, net of deferred
issuance costs
    
    
    
    
    
    
    
    
    
    
    46,590Payment of dividends
    
    
    (1,024
    )
    
    
    (1,020
    )
    
    
    (1,005
    )Tax benefit related to the exercise of stock options
    
    
    507
    
    
    
    
    
    
    
    Proceeds from issuance of common stock
    
    
    608
    
    
    
    185
    
    
    
    507Net cash provided by financing activities:
    
    
    10,591
    
    
    
    10,014
    
    
    
    45,798Net change in cash and cash equivalents
    
    
    1,591
    
    
    
    (36,247
    )
    
    
    32,853Cash and cash equivalents, beginning of year
    
    
    4,079
    
    
    
    40,326
    
    
    
    7,473Cash and cash equivalents, end of year
    
    $
    5,670
    
    
    $
    4,079
    
    
    $
    40,326SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    5,041
    
    
    $
    3,795
    
    
    $
    1,517Cash paid for income taxes
    
    $
    1,378
    
    
    $
    1,612
    
    
    $
    3,668SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES (See Note 3 for non-cash acquisition disclosures)
   - 50 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 1. General:
 Sport Supply Group, soft goods
 2. Summary of Significant Accounting Policies:
 Consolidation. Kesslers Dixie Company
 Cash and Cash Equivalents.
 Financial Instruments and Credit Risk Concentrations.
 Accounts Receivable.
  - 51 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
  2007
    
    
    2006(In thousands)Balance at beginning of period
    
    $
    1,496
    
    
    $
    1,042Provision for uncollectible accounts receivable
    
    
    1,099
    
    
    
    982Accounts written off, net of recoveries
    
    
    (1,299
    )
    
    
    (528
    )Balance at end of period
    
    $
    1,296
    
    
    $
    1,496
 Inventories.
 Property and Equipment.
 Intangible Assets.
  Goodwill.
 Impairment of Long-Lived Assets.
  - 52 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 Revenue Recognition.
 Shipping and Handling Costs and Fees.
 Advertising.
 Stock Based Compensation. APB 25 SFAS Share-Based Payment SFAS 123(R)
 2005(In Thousands)Net income, as reported
    
    $
    3,601Add: stock-based employee compensation expense
included in net income
    
    
    Deduct: stock-based employee compensation expense
determined under fair value method for all awards,
net of related tax effects
    
    
    (1,867
    )Pro forma net income
    
    $
    1,734Net income per share common stock:Basic  as reported
    
    $
    0.36Basic  pro forma
    
    $
    0.17Diluted  as reported
    
    $
    0.35Diluted  pro forma
    
    $
    0.17
 Income Taxes.
  - 53 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 Income Per Share.
 Segment Reporting. Disclosures About Segments of an Enterprise and Related
Information
 Use of Estimates in Financial Statements.
 Staff Accounting Bulletin 108 ( SAB 108 ). Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements
  Recent Accounting Pronouncements :
 Accounting for Uncertainty in Income Taxes FIN 48 . Accounting for Income Taxes SFAS 109
  - 54 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 Fair Value Measurements SFAS 157
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115 SFAS 159
 3. Business Combinations:
   OTS Partnership
  - 55 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
  Salkeld
  B2B
  - 56 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 Merger Agreement
  Merger Transaction
     - 57 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
    2006
    
    
    2005(Unaudited, in thousands)Net sales
    
    $
    224,487
    
    
    $
    206,534Net income
    
    $
    1,917
    
    
    $
    3,027Net income per share of common stock:Basic
    
    $
    0.19
    
    
    $
    0.30Diluted
    
    $
    0.18
    
    
    $
    0.29
  2006
    
    
    2005(In thousands)Current assets
    
    $
    29,851
    
    
    $
    9,288Property and equipment
    
    
    9,032
    
    
    
    438Other assets
    
    
    311
    
    
    
    54Intangible assets
    
    
    8,391
    
    
    
    918Goodwill
    
    
    17,408
    
    
    
    7,886Total assets acquired
    
    $
    64,993
    
    
    $
    18,584Current liabilities
    
    $
    10,342
    
    
    $
    5,143Non-current liabilities
    
    
    2,867
    
    
    
    381Total liabilities assumed
    
    $
    13,209
    
    
    $
    5,524
  - 58 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 4. Net Sales:
  2007
    
    
    2006
    
    
    2005(In thousands)Sporting Goods Equipment
    
    $
    154,475
    
    
    $
    148,610
    
    
    $
    61,880Soft Goods
    
    
    82,380
    
    
    
    75,628
    
    
    
    44,459Net Sales
    
    $
    236,855
    
    
    $
    224,238
    
    
    $
    106,339
 5. Inventories:
  2007
    
    
    2006(In thousands)Raw materials
    
    $
    1,784
    
    
    $
    1,893Work in progress
    
    
    114
    
    
    
    116Finished goods
    
    
    30,343
    
    
    
    35,176Inventories
    
    $
    32,241
    
    
    $
    37,185
 6. Property and Equipment:
  EstimatedUseful Lives(Years)
    
    
    2007
    
    
    2006(In thousands)Office equipment
    
    
    2 10
    
    
    $
    9,337
    
    
    $
    7,242Furniture and fixtures
    
    
    2 10
    
    
    
    2,474
    
    
    
    2,177Warehouse and manufacturing
equipment
    
    
    3  15
    
    
    
    1,362
    
    
    
    1,229Leasehold improvements
    
    
    *
    
    
    
    2,130
    
    
    
    1,368Vehicles
    
    
    3-7
    
    
    
    361
    
    
    
    351Assets under capital lease
    
    
    17
    
    
    
    
    
    
    
    475Total property and equipment
    
    
    
    
    
    
    15,664
    
    
    
    12,842Less: accumulated depreciation
    
    
    
    
    
    
    (4,986
    )
    
    
    (2,755
    )Property and equipment, net
    
    
    
    
    
    $
    10,678
    
    
    $
    10,087
 *
    
    Shorter of useful life of related asset or lease term  - 59 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 7. Intangible Assets:
  June 30,
    
    
    June 30,2007
    
    
    2006Asset
    
    
    Gross
    
    


    
    
    Net

    
    
    Gross
    
    


    
    
      NetLife
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying(Years)
    
    
    Value
    
    
    Amortization
    
    
    Value
    
    
    Value
    
    
    Amortization
    
    
    Value(In thousands)Amortizable intangible
assets:Trademarks
    
    
    10-15
    
    
    $
    343
    
    
    $
    199
    
    
    $
    144
    
    
    $
    343
    
    
    $
    166
    
    
    $
    177Non-compete agreements
    
    
    10
    
    
    
    3,200
    
    
    
    640
    
    
    
    2,560
    
    
    
    3,200
    
    
    
    320
    
    
    
    2,880Customer relationships
    
    
    10
    
    
    
    3,343
    
    
    
    1,200
    
    
    
    2,143
    
    
    
    3,343
    
    
    
    788
    
    
    
    2,555Contractual backlog
    
    
    .25-.50
    
    
    
    427
    
    
    
    427
    
    
    
    
    
    
    
    427
    
    
    
    427
    
    
    
    Customer database
    
    
    3
    
    
    
    660
    
    
    
    440
    
    
    
    220
    
    
    
    660
    
    
    
    220
    
    
    
    440Significant contracts
    
    
    5
    
    
    
    327
    
    
    
    130
    
    
    
    197
    
    
    
    327
    
    
    
    65
    
    
    
    262License agreements and
other
    
    
    3-10
    
    
    
    493
    
    
    
    343
    
    
    
    150
    
    
    
    292
    
    
    
    202
    
    
    
    90Total amortizable intangible
assets
    
    
    
    
    
    $
    8,793
    
    
    $
    3,379
    
    
    $
    5,414
    
    
    $
    8,592
    
    
    $
    2,188
    
    
    $
    6,404Non-amortizable intangible
assets:Trademarks
    
    
    
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610Total non-amortizable
intangible assets
    
    
    
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610Total intangible assets
    
    
    
    
    
    $
    11,403
    
    
    $
    3,379
    
    
    $
    8,024
    
    
    $
    11,202
    
    
    $
    2,188
    
    
    $
    9,014Goodwill  June 30, 2006
    
    
    
    
    
    $
    40,280SAB 108 adjustment
(see Note 2)
    
    
    
    
    
    
    552Adjusted goodwill  June
30, 2006
    
    
    
    
    
    $
    40,832Changes in deferred tax
valuation allowance
    
    
    
    
    
    
    (2,109
    )Acquisitions (see note 3)
    
    
    
    
    
    
    16,226Goodwill  June 30, 2007
    
    
    
    
    
    $
    54,949
  Year Ending June 30,
    
    (In thousands)2008
    
    $
    1,0532009
    
    
    7632010
    
    
    6972011
    
    
    6182012
    
    
    615Thereafter
    
    
    1,668Total
    
    $
    5,414
  - 60 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 8. Accrued Liabilities:
  2007
    
    
    2006(In thousands)Accrued compensation and benefits
    
    $
    2,700
    
    
    $
    2,032Customer deposits
    
    
    1,983
    
    
    
    1,105Taxes other than income taxes
    
    
    3,025
    
    
    
    2,896Gift certificates
    
    
    100
    
    
    
    691Other
    
    
    2,510
    
    
    
    1,104Total accrued liabilities
    
    $
    10,318
    
    
    $
    7,828
 9. Long-Term Debt and Line of Credit:
 Notes Securities Act Thomas
Weisel
 Indenture
 Registration Rights
Agreement Registration Statement
  - 61 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 Senior Credit Agreement MLBFS
 Term Loan Revolving Facility Senior Credit Facility
  LIBOR EBITDA Senior Leverage Ratio
 Fixed Charge Coverage Ratio
  - 62 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
       Year Ending June 30,
    
    (In thousands)2008
    
    $
    3,6082009
    
    
    21,3322010
    
    
    50,0542011
    
    
    2012
    
    
    Thereafter
    
    
    Total future payments
    
    $
    74,994
  - 63 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 10. Income Taxes:
  2007
    
    
    2006(In thousands)Deferred tax assets attributed to:Accounts receivable
    
    $
    438
    
    
    $
    552Inventories
    
    
    1,693
    
    
    
    1,544Net operating loss carry-forwards
    
    
    2,433
    
    
    
    5,541Prepaid advertising expenses
    
    
    
    
    
    
    79Tax credits
    
    
    772
    
    
    
    652Accrued liabilities
    
    
    492
    
    
    
    462Accrued state and local taxes
    
    
    1,240
    
    
    
    768Total deferred tax assets
    
    
    7,068
    
    
    
    9,598Less valuation allowance
    
    
    (233
    )
    
    
    (3,083
    )Total deferred tax assets, net
    
    
    6,835
    
    
    
    6,515Deferred tax liabilities attributed to:Property and equipment
    
    
    (1,643
    )
    
    
    (1,838
    )Intangible assets
    
    
    (1,890
    )
    
    
    (1,418
    )Other
    
    
    (494
    )
    
    
    (18
    )Total deferred tax liabilities
    
    
    (4,027
    )
    
    
    (3,274
    )Net deferred taxes
    
    $
    2,808
    
    
    $
    3,241
  2007
    
    
    2006(In thousands)Current deferred tax asset
    
    $
    3,790
    
    
    $
    3,359Non-current deferred tax asset
    
    
    3,278
    
    
    
    6,239Current deferred tax liability
    
    
    (129
    )
    
    
    (15
    )Non-current deferred tax liability
    
    
    (3,898
    )
    
    
    (3,259
    )Less valuation allowance
    
    
    (233
    )
    
    
    (3,083
    )Balance at end of period
    
    $
    2,808
    
    
    $
    3,241
  (In thousands)Deferred tax valuation allowance at June 30, 2006
    
    $
    (3,083
    )Adjustments of previously recorded acquired deferred
tax assets
    
    
    741Acquired tax benefits utilized
    
    
    2,109Deferred tax valuation allowance at June 30, 2007
    
    $
    (233
    )
  - 64 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005




2007
    
    
    2006
    
    
    2005(In thousands)FederalCurrent
    
    $
    80
    
    
    $
    510
    
    
    $
    1,999Deferred
    
    
    2,276
    
    
    
    925
    
    
    
    (132
    )StateCurrent
    
    
    12
    
    
    
    33
    
    
    
    469Deferred
    
    
    266
    
    
    
    135
    
    
    
    (39
    )Total provision for income taxes
    
    $
    2,634
    
    
    $
    1,603
    
    
    $
    2,297
  2007
    
    
    2006
    
    
    2005(In thousands)Tax expense at the federal statutory rate
    
    $
    2,377
    
    
    $
    1,396
    
    
    $
    2,005State income taxes, net of federal benefit
    
    
    280
    
    
    
    77
    
    
    
    284Alternative minimum tax
    
    
    
    
    
    
    144
    
    
    
    Other
    
    
    (23
    )
    
    
    (14
    )
    
    
    8Income tax provision
    
    $
    2,634
    
    
    $
    1,603
    
    
    $
    2,297
  11. Related Party Transactions:
     - 65 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
  12. Stock Options and Warrants:
 1998
Plan
 2007 Plan Board
   - 66 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
  2006(In thousands)Income from continuing operations
    
    $
    60Income before income taxes
    
    $
    60Net income
    
    $
    36Net income per common share  basic
    
    $
    0.00Net income per common share  diluted
    
    $
    0.00Cash flows from operating activities
    
    $
    60Cash flows from financing activities
    
    $
    
   WeightedAverageOptions
    
    
    Exercise PriceOutstanding at July 1, 2004
    
    
    858,100
    
    
    
    6.85Granted
    
    
    406,300
    
    
    
    11.54Exercised
    
    
    (89,850
    )
    
    
    5.65Forfeited or cancelled
    
    
    (4,000
    )
    
    
    9.29Outstanding at June 30, 2005
    
    
    1,170,550
    
    
    
    8.56Granted
    
    
    0
    
    
    
    Exercised
    
    
    (22,950
    )
    
    
    8.06Forfeited or cancelled
    
    
    (3,000
    )
    
    
    9.29Outstanding at June 30, 2006
    
    
    1,144,600
    
    
    
    8.56Granted
    
    
    0
    
    
    
    Exercised
    
    
    (125,400
    )
    
    
    4.85Forfeited or cancelled
    
    
    (41,250
    )
    
    
    9.54Outstanding at June 30, 2007
    
    
    977,950
    
    
    $
    9.00Exercisable at June 30, 2005
    
    
    992,550
    
    
    $
    8.44Exercisable at June 30, 2006
    
    
    1,144,600
    
    
    $
    8.56Exercisable at June 30, 2007
    
    
    977,950
    
    
    $
    9.00
  2005Expected volatility
    
    
    34  35
    %Risk-free interest rate
    
    
    3.41  3.99
    %Dividend yield
    
    
    0.90  1.10
    %Expected lives
    
    5 years
    - 67 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
  Outstanding
    
    
    ExercisableWeighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageRemaining
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    RemainingContractual
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    ContractualLife
    
    
    Exercise
    
    
    
    
    
    
    Exercise
    
    
    LifeExercise price
    
    Shares
    
    
    (In Years)
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    (In Years)$3.89 - $4.81
    
    
    45,500
    
    
    
    3.9
    
    
    $
    3.93
    
    
    
    45,500
    
    
    $
    3.93
    
    
    
    3.9$4.90 - $6.13
    
    
    271,550
    
    
    
    4.6
    
    
    $
    5.81
    
    
    
    271,550
    
    
    $
    5.81
    
    
    
    4.6$9.38
    
    
    31,500
    
    
    
    1.5
    
    
    $
    9.38
    
    
    
    31,500
    
    
    $
    9.38
    
    
    
    1.5$8.73 - $9.73
    
    
    425,100
    
    
    
    7.0
    
    
    $
    9.29
    
    
    
    425,100
    
    
    $
    9.29
    
    
    
    7.0$10.70 - $14.34
    
    
    204,300
    
    
    
    7.5
    
    
    $
    13.69
    
    
    
    204,300
    
    
    $
    13.69
    
    
    
    7.5977,950
    
    
    
    
    
    
    
    
    
    
    
    977,950
 13. Leases:
   Year Ending June 30,
    
    (In thousands)2008
    
    $
    2,9302009
    
    
    2,3382010
    
    
    1,7082011
    
    
    5542012
    
    
    Thereafter
    
    
    Total minimum future lease payments
    
    $
    7,530
  - 68 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 14. Income Per Share:
  2007
    
    
    2006
    
    
    2005(In thousands except shareand per share data)Determination of diluted number of shares:Average common shares outstanding
    
    
    10,235,308
    
    
    
    10,182,428
    
    
    
    10,031,314Assumed conversion of dilutive stock options and
warrants
    
    
    138,599
    
    
    
    216,702
    
    
    
     247,871Assumed conversion of subordinated debentures
    
    
    
    
    
    
    
    
    
    
    Diluted average common shares outstanding (b)
    
    
    10,373,907
    
    
    
    10,399,130
    
    
    
    10,279,185Calculation of diluted earnings per share:Net income
    
    $
    3,860
    
    
    $
    1,896
    
    
    $
    3,601Add: interest component on assumed conversion
of subordinated debentures, net of taxes
    
    
    
    
    
    
    
    
    
    
    Net income, adjusted (a)
    
    $
    3,860
    
    
    $
    1,896
    
    
    $
    3,601Diluted earnings per share (a/b)
    
    $
    .37
    
    
    $
    0.18
    
    
    $
    0.35
  15. Employee Benefit Plan
 plan
   - 69 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
 16. Legal Proceedings:
   17. Subsequent Events:
  Purchase
Agreement Purchaser Shares Common Stock
  - 70 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007, 2006, and 2005
   18. Quarterly Operating Data (unaudited):
 QuarterFirst
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Year(In thousands except per share data)(Unaudited)Fiscal 2007:Net sales
    
    $
    68,163
    
    
    $
    49,384
    
    
    $
    63,235
    
    
    $
    56,073
    
    
    $
    236,855Gross profit
    
    
    24,063
    
    
    
    17,375
    
    
    
    22,831
    
    
    
    19,291
    
    
    
    83,560Net income (loss)
    
    $
    3,295
    
    
    $
    (871
    )
    
    $
    1,738
    
    
    $
    (302
    )
    
    $
    3,860Earnings (loss) per share:Basic
    
    $
    0.32
    
    
    $
    (0.09
    )
    
    $
    0.17
    
    
    $
    (.03
    )
    
    $
    0.38Diluted
    
    $
    0.28
    
    
    $
    (0.09
    )
    
    $
    0.17
    
    
    $
    (.03
    )
    
    $
    0.37Cash dividend per share
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.10Stock prices:High
    
    $
    10.75
    
    
    $
    10.50
    
    
    $
    9.48
    
    
    $
    9.71
    
    
    $
    10.75Low
    
    $
    8.23
    
    
    $
    9.08
    
    
    $
    7.80
    
    
    $
    7.44
    
    
    $
    7.44
 QuarterFirst
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Year(In thousands except per share data)(Unaudited)Fiscal 2006:Net sales
    
    $
    65,275
    
    
    $
    46,401
    
    
    $
    59,418
    
    
    $
    53,144
    
    
    $
    224,238Gross profit
    
    
    21,314
    
    
    
    15,143
    
    
    
    20,997
    
    
    
    17,625
    
    
    
    75,079Net income (loss)
    
    $
    2,575
    
    
    $
    (971
    )
    
    $
    1,232
    
    
    $
    (940
    )
    
    $
    1,896Earnings (loss) per share:Basic
    
    $
    0.25
    
    
    $
    (0.10
    )
    
    $
    0.12
    
    
    $
    (.09
    )
    
    $
    0.19Diluted
    
    $
    0.22
    
    
    $
    (0.10
    )
    
    $
    0.12
    
    
    $
    (.09
    )
    
    $
    0.18Cash dividend per share
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.10Stock prices:High
    
    $
    12.68
    
    
    $
    11.60
    
    
    $
    10.85
    
    
    $
    11.19
    
    
    $
    12.68Low
    
    $
    10.30
    
    
    $
    8.71
    
    
    $
    9.12
    
    
    $
    9.76
    
    
    $
    8.71
  - 71 -




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures. CEO CFO 1934
Act
 Changes in Internal Controls Over Financial Reporting.
 Managements Report on Internal Control over Financial Reporting.
 
 ITEM 9B. OTHER INFORMATION.
   - 72 -




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
   - 73 -




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
  Financial Statements
 Page ReferenceForm 10-KReport of Independent Registered Public Accounting Firm
    
    
    44Consolidated Balance Sheets as of June 30, 2007 and 2006
    
    
    47Consolidated Statements of Income for the fiscal years
ended June 30, 2007, 2006 and 2005
    
    
    48Consolidated Statements of Stockholders Equity for the
fiscal years ended June 30, 2007, 2006 and 2005
    
    
    49Consolidated Statements of Cash Flows for the fiscal years
ended June 30, 2007, 2006 and 2005
    
    
    50Notes to Consolidated Financial Statements
    
    
    51
 Consolidated financial statement schedule
   Exhibits
 ExhibitNumber
    
    Description
    
    Location2.1
    
    Agreement and Plan of Merger, dated
as of December 30, 2003, by and among
Tomark, Inc., Collegiate Pacific
Inc., BOO Merger Corp., Thomas C.
White and Mark S. Harpin.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on January 23,
2004.2.2
    
    Asset Purchase Agreement, dated as of
February 9, 2004, by and among
Kesslers Team Sports, Inc.,
Collegiate Pacific Inc., BOO
Acquisition Corp., Bob Dickman, Dan
Dickman, Phil Dickman and Floyd
Dickman.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on April 8,
2004.2.3
    
    Stock Purchase Agreement, dated as of
July 23, 2004, by and among
Collegiate Pacific Inc., Kenneth L.
Caravati and C. Michael Caravati.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on August 10,
2004.2.4
    
    Stock Purchase Agreement, dated as of
December 10, 2004, by and among
Collegiate Pacific Inc., Barbara L.
Smith, Carmine McWeeney and Michael
McWeeney.
    
    Exhibit 99.1 to the
Registrants current
Report on Form 8-K
filed on December 13,
2004.
  - 74 -




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location2.5
    
    Stock Purchase Agreement, dated as of
May 11, 2005, by and among Collegiate
Pacific Inc., Albert A. Messier and
Daniel F. Salkeld.
    
    Exhibit 10.1 to the
Registrants
Quarterly Report on
Form 10-QSB for the
fiscal quarter ended
March 31, 2005.2.6
    
    Stock Purchase Agreement, dated as of
July 1, 2005, by and among Collegiate
Pacific Inc., Emerson Radio Corp. and
Emerson Radio (Hong Kong) Limited.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on July 8,
2005.2.7
    
    Asset Purchase Agreement, dated as of
August 3, 2005, by and among
Collegiate Pacific Inc., Salkeld &
Sons, Inc. and Albert A. Messier.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on August 5,
2005.2.8
    
    Agreement and Plan of Merger, dated
as of September 20, 2006, by and
among Collegiate Pacific Inc., CP
Merger Sub, Inc. and Sport Supply
Group, Inc.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on September
21, 2006.2.9
    
    First Amendment to Agreement and Plan
of Merger, dated as of November 13,
2006, by and among Collegiate Pacific
Inc., CP Merger Sub, Inc. and Sport
Supply Group, Inc.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.3.1
    
    Certificate of Incorporation of the
Registrant.
    
    Exhibit 1 to the
Registrants
Registration
Statement on Form 8-A
filed on September 9,
1999.3.2
    
    By-Laws of the Registrant.
    
    Exhibit 2 to the
Registrants
Registration
Statement on Form 8-A
filed on September 9,
1999.3.3
    
    Certificate of Amendment to
Certificate of Incorporation of
Collegiate Pacific Inc.
    
    Exhibit 3.10 to the
Registrants
Registration
Statement on Form
SB-2 (No. 333-34294)
originally filed on
April 7, 2000.3.4
    
    Amendment to the Bylaws of Collegiate
Pacific Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K
filed on June 14,
2007.3.5
    
    Amendment to Certificate of
Incorporation of Collegiate Pacific
Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K
filed on July 2,
2007.3.6
    
    Amendment to the Bylaws of Collegiate
Pacific Inc.
    
    Exhibit 3.2 to the
Registrants Current
Report on Form 8-K
filed on July 2,
2007.4.1
    
    Specimen Certificate of Common Stock,
$0.01 par value, of Sport Supply
Group, Inc.*
  - 75 -




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location4.2
    
    Indenture, dated as of November 26,
2004, by and between Collegiate
Pacific Inc. and The Bank of New York
Trust Company N.A., as Trustee.
    
    Exhibit 99.1 to the
Registrants Current
Report on Form 8-K
filed on November 29,
2004.4.3
    
    Form of 5.75% Convertible Senior
Subordinated Note Due 2009 (included
in Section 2.2 of Exhibit 4.2 to this
report).
    
    Exhibit 99.2 to the
Registrants Current
Report on Form 8-K
filed on November 29,
2004.10.1
    
    Credit Agreement, dated June 29,
2006, by and among Collegiate Pacific
Inc., the financial institutions or
other entities from time to time
parties thereto, each as a Lender,
and Merrill Lynch Capital, a division
of Merrill Lynch Business Financial
Services Inc., individually as a
Lender, as Administrative Agent, Sole
Bookrunner and Sole Lead Manager.
    
    Exhibit 10.1 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.2
    
    Amended and Restated 1998 Collegiate
Pacific Inc. Stock Option Plan and
form of Stock Option Agreements.
    
    Exhibit 10.3 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2004.10.3
    
    Collegiate Pacific Inc.s 401(k)
Plan, dated as of April 15, 2005.
    
    Exhibit 10.16 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2005.10.4
    
    Form of Indemnification Agreement for
Collegiate Pacific directors and
executive officers, dated January 27,
2006.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on January 31,
2006.10.5
    
    Lease Agreement, dated July 1, 1997,
by and between Collegiate Pacific
Inc. and The Realty Associates Fund
VI, L.P.
    
    Exhibit 10.8 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
1998.10.6
    
    Third Amendment to Lease, dated as of
September 6, 2007, by and between
Collegiate Pacific Inc. and The
Realty Associates Fund VI, L.P.*10.7
    
    Lease Agreement, dated April 1, 2004,
by and between Collegiate Pacific
Inc. and RPD Services, Inc.
    
    Exhibit 10.2 to the
Registrants
Quarterly Report on
Form 10-QSB for the
fiscal quarter ended
March 31, 2004.10.8
    
    Lease Agreement, dated May 21, 2004,
by and between Tomark Sports, Inc.,
and Edward A. Money and Marilyn J.
Money, Trustees of the Money Family
Trust.
    
    Exhibit 10.6 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2005.10.9
    
    Lease Agreement, dated July 6, 1994,
by and between Dixie Sporting Goods
Co., Inc. and E. Carlton Wilton.
    
    Exhibit 10.7 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2004.
  - 76 -




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location10.10
    
    Lease Amendment and Extension, dated
February 26, 2005, by and between
Dixie Sporting Goods Co., Inc. and
The Wilton Companies, LLC.
    
    Exhibit 10.1 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended March 31, 2006.10.11
    
    Lease Agreement, dated December 10,
2004, by and between McWeeney Smith
Partnership and CMS of Central
Florida, Inc d/b/a Orlando Team
Sports.
    
    Exhibit 10.4 to the
Registrants
Quarterly Report on
Form 10-QSB for the
fiscal quarter ended
December 31, 2004.10.12
    
    Lease Agreement, dated as of August
3, 2005, by and among Salkeld & Sons,
Inc. and Albert A. Messier.
    
    Exhibit 10.2 to the
Registrants Current
Report on Form 8-K
filed on August 5,
2005.10.13
    
    Second Amendment to Lease, dated as
of February 10, 2003, by and between
Collegiate Pacific Inc. and The
Realty Associates Fund VI, L.P.
    
    Exhibit 10.18 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2005.10.14
    
    Amendment to License Agreement, dated
as of December 21, 2000, as amended
on May 1, 2005, by and among MacMark
Corporation, Equilink Licensing
Corporation and Sport Supply Group,
Inc.
    
    Exhibit 10.4 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.15
    
    Loan and Security Agreement, dated as
of March 27, 2001, by and between
Congress Financial Corporation
(Southwest) and Sport Supply Group,
Inc., as amended on October 1, 2002,
June 27, 2003, November 6, 2003,
December 29, 2003, February 9, 2004
and October 20, 2004.
    
    Exhibit 10.5 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.16
    
    Agreement, dated as of December 9,
1986, by and between Voit Corporation
and Sport Supply Group, Inc., the
successor-in-interest to BSN Corp.,
as amended on August 1, 2003.
    
    Exhibit 10.6 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.17
    
    Software End-User License Agreement ,
dated as of June 11, 1998, by and
between SAP America, Inc. and Sport
Supply Group, Inc., as amended on
January 1, 2004.
    
    Exhibit 10.7 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.18
    
    Lease Agreement, dated as of April
25, 1994, by and between Sport Supply
Group, Inc. and Prologis
(successor-in-interest to APT-Cabot
Texas, Inc., as successor-in-interest
to Centre Development Co., Inc.), as
amended on July 8, 1994, and June 10,
2004.
    
    Exhibit 10.8 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.
  - 77 -




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location10.19
    
    Lease Agreement, dated as of July 28,
1989, by and between Sport Supply
Group, Inc. and Merit Investment
Partners, L.P., as amended on July
13, 1998, July 31, 2000, and April
15, 2004.
    
    Exhibit 10.9 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.20
    
    Lease Agreement, dated as of October
1, 2004, by and between Salkeld &
Sons, Inc. and First American Bank.
    
    Exhibit 10.24 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.21
    
    Third Amendment to Lease Agreement,
dated as of August 31, 2006, by and
between Prologis and Sport Supply
Group, Inc.
    
    Exhibit 10.25 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.22
    
    Fourth Amendment to Lease Agreement,
dated as of August 25, 2006, by and
between Acquiport DFWIP, Inc.
(successor-in-interest to Merit
Investment Partners, L.P.) and Sport
Supply Group, Inc.
    
    Exhibit 10.26 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.23
    
    Letter Agreement, dated as of
November 10, 2006, between Collegiate
Pacific Inc. and Merrill Lynch
Business Financial Services Inc.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.10.24
    
    Amended and Restated Credit
Agreement, dated as of November 13,
2006, by and among Collegiate Pacific
Inc., Merrill Lynch Business
Financial Services Inc. and the
additional lenders from time to time
parties thereto.
    
    Exhibit 10.2 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.10.25
    
    Indemnification Agreement, dated as
of November 13, 2006, by and among
Terrence M. Babilla and Collegiate
Pacific Inc.
    
    Exhibit 10.3 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.10.26
    
    Collegiate Pacific Inc. 2007 Stock
Option Plan and form of Stock Option
agreements.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on December 18,
2006.10.27
    
    Letter Agreement, dated as of June
30, 2007, between Collegiate Pacific
Inc. and Merrill Lynch Business
Financial Services Inc.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on July 2,
2007.10.28
    
    Purchase Agreement, dated as of July
26, 2007, by and between Sport Supply
Group, Inc. and CBT Holdings, LLC.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on July 31,
2007.
  - 78 -




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location10.29
    
    Form of Amended and Restated
Executive Officer Change in Control
Agreement.
    
    Exhibit 10.5 to the
Registrants
Quarterly Report on
Form 10-Q for the
fiscal quarter ended
December 31, 2006.10.30
    
    Letter Agreement, dated as of May 11,
2007, between Collegiate Pacific Inc.
and Middle Market Finance, a division
of Merrill Lynch Business Financial
Services Inc.
    
    Exhibit 10.1 to the
Registrants
Quarterly Report on
Form 10-Q for the
fiscal quarter ended
March 31, 2007.12
    
    Ratio of Earnings to Fixed Charges.*14
    
    Code of Ethics.
    
    Exhibit 14 to the
Registrants Annual
Report on Form 10-KSB
for the fiscal year
ended June 30, 2003.21
    
    Subsidiaries of Sport Supply Group,
Inc.*23
    
    Consent of Grant Thornton LLP.*31.1
    
    Certification of the Chief Executive
Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act
of 2002.*31.2
    
    Certification of the Chief Financial
Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act
of 2002.*32.1
    
    Certification of the Chief Executive
Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.**
 
 *
    
    Filed herewith**
    
    Furnished herewith  - 79 -




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##### Table of Contents



SIGNATURES
  SPORT SUPPLY GROUP, INC.September 13, 2007
    By:
    /s/ Adam BlumenfeldAdam Blumenfeld,Chairman of the Board and Chief
Executive Officer
(Principal Executive Officer)  Signature
    
    Capacity/s/ Adam Blumenfeld
    
    Chairman of the Board and Chief Executive OfficerAdam Blumenfeld/s/ William R. Estill
    
    Chief Financial Officer and TreasurerWilliam R. Estill
    
    (Principal Accounting and Financial Officer)/s/ Jeff Davidowitz
    
    DirectorJeff Davidowitz/s/ Robert W. Hampton
    
    DirectorRobert W. Hampton/s/ William H. Watkins, Jr.
    
    DirectorWilliam H. Watkins, Jr.
  - 80 -




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##### Table of Contents



SPORT SUPPLY GROUP, INC.
Schedule II  VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
 Balance
    
    

Additions
    
    
    
    
    
    
    Deductionsat
    
    
    Charged
    
    
    
    
    
    
    Amountsbeginning
    
    
    to costs
    
    
    Charged
    
    
    Charged to
    
    
    
    
    
    
    Balanceof
    
    
    and
    
    
    to other
    
    
    reserve net of
    
    
    Other
    
    
    at endyear
    
    
    expenses
    
    
    Accounts
    
    
    reinstatements
    
    
    Changes
    
    
    of yearYear ended June 30, 2007Allowance for doubtful
accounts
    
    

 1,496
    
    
    
 1,099
    
    
    
 
    
    
    
 (1,299
    )
    
    
    
    
    
    
    1,296Inventory reserve
    
    
    2,230
    
    
    
    2,626
    
    
    
    
    
    
    
    (2,129
    )
    
    
    
    
    
    
    2,727Deferred tax valuation reserve
    
    
    3,083
    
    
    
    
    
    
    
    
    
    
    
    (2,850
    )
    
    
    
    
    
    
    233Year ended June 30, 2006Allowance for doubtful
accounts
    
    
    1,042
    
    
    
    982
    
    
    
    
    
    
    
    (528
    )
    
    
    
    
    
    
    1,496Inventory reserve
    
    
    439
    
    
    
    2,199
    
    
    
    
    
    
    
    (408
    )
    
    
    
    
    
    
    2,230Deferred tax valuation reserve
    
    
    
    
    
    
    
    
    
    
    3,083
    
    
    
    
    
    
    
    
    
    
    
    3,083Year ended June 30, 2005Allowance for doubtful
accounts
    
    
    636
    
    
    
    574
    
    
    
    
    
    
    
    (432
    )
    
    
    264
F1
    
    
    
    1,042Inventory reserve
    
    
    130
    
    
    
    666
    
    
    
    
    
    
    
    (357
    )
    
    
    
    
    
    
    439Deferred tax valuation reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 F1
    
    Represents effect of business acquisitions  - 81 -




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description
    
    Location2.1
    
    Agreement and Plan of Merger, dated
as of December 30, 2003, by and among
Tomark, Inc., Collegiate Pacific
Inc., BOO Merger Corp., Thomas C.
White and Mark S. Harpin.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on January 23,
2004.2.2
    
    Asset Purchase Agreement, dated as of
February 9, 2004, by and among
Kesslers Team Sports, Inc.,
Collegiate Pacific Inc., BOO
Acquisition Corp., Bob Dickman, Dan
Dickman, Phil Dickman and Floyd
Dickman.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on April 8,
2004.2.3
    
    Stock Purchase Agreement, dated as of
July 23, 2004, by and among
Collegiate Pacific Inc., Kenneth L.
Caravati and C. Michael Caravati.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on August 10,
2004.2.4
    
    Stock Purchase Agreement, dated as of
December 10, 2004, by and among
Collegiate Pacific Inc., Barbara L.
Smith, Carmine McWeeney and Michael
McWeeney.
    
    Exhibit 99.1 to the
Registrants current
Report on Form 8-K
filed on December 13,
2004.2.5
    
    Stock Purchase Agreement, dated as of
May 11, 2005, by and among Collegiate
Pacific Inc., Albert A. Messier and
Daniel F. Salkeld.
    
    Exhibit 10.1 to the
Registrants
Quarterly Report on
Form 10-QSB for the
fiscal quarter ended
March 31, 2005.2.6
    
    Stock Purchase Agreement, dated as of
July 1, 2005, by and among Collegiate
Pacific Inc., Emerson Radio Corp. and
Emerson Radio (Hong Kong) Limited.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on July 8,
2005.2.7
    
    Asset Purchase Agreement, dated as of
August 3, 2005, by and among
Collegiate Pacific Inc., Salkeld &
Sons, Inc. and Albert A. Messier.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on August 5,
2005.2.8
    
    Agreement and Plan of Merger, dated
as of September 20, 2006, by and
among Collegiate Pacific Inc., CP
Merger Sub, Inc. and Sport Supply
Group, Inc.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on September
21, 2006.2.9
    
    First Amendment to Agreement and Plan
of Merger, dated as of November 13,
2006, by and among Collegiate Pacific
Inc., CP Merger Sub, Inc. and Sport
Supply Group, Inc.
    
    Exhibit 2.1 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.3.1
    
    Certificate of Incorporation of the
Registrant.
    
    Exhibit 1 to the
Registrants
Registration
Statement on Form 8-A
filed on September 9,
1999.




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location3.2
    
    By-Laws of the Registrant.
    
    Exhibit 2 to the
Registrants
Registration
Statement on Form 8-A
filed on September 9,
1999.3.3
    
    Certificate of Amendment to
Certificate of Incorporation of
Collegiate Pacific Inc.
    
    Exhibit 3.10 to the
Registrants
Registration
Statement on Form
SB-2 (No. 333-34294)
originally filed on
April 7, 2000.3.4
    
    Amendment to the Bylaws of Collegiate
Pacific Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K
filed on June 14,
2007.3.5
    
    Amendment to Certificate of
Incorporation of Collegiate Pacific
Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K
filed on July 2,
2007.3.6
    
    Amendment to the Bylaws of Collegiate
Pacific Inc.
    
    Exhibit 3.2 to the
Registrants Current
Report on Form 8-K
filed on July 2,
2007.4.1
    
    Specimen Certificate of Common Stock,
$0.01 par value, of Sport Supply
Group, Inc.*4.2
    
    Indenture, dated as of November 26,
2004, by and between Collegiate
Pacific Inc. and The Bank of New York
Trust Company N.A., as Trustee.
    
    Exhibit 99.1 to the
Registrants Current
Report on Form 8-K
filed on November 29,
2004.4.3
    
    Form of 5.75% Convertible Senior
Subordinated Note Due 2009 (included
in Section 2.2 of Exhibit 4.2 to this
report).
    
    Exhibit 99.2 to the
Registrants Current
Report on Form 8-K
filed on November 29,
2004.10.1
    
    Credit Agreement, dated June 29,
2006, by and among Collegiate Pacific
Inc., the financial institutions or
other entities from time to time
parties thereto, each as a Lender,
and Merrill Lynch Capital, a division
of Merrill Lynch Business Financial
Services Inc., individually as a
Lender, as Administrative Agent, Sole
Bookrunner and Sole Lead Manager.
    
    Exhibit 10.1 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.2
    
    Amended and Restated 1998 Collegiate
Pacific Inc. Stock Option Plan and
form of Stock Option Agreements.
    
    Exhibit 10.3 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2004.10.3
    
    Collegiate Pacific Inc.s 401(k)
Plan, dated as of April 15, 2005.
    
    Exhibit 10.16 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2005.10.4
    
    Form of Indemnification Agreement for
Collegiate Pacific directors and
executive officers, dated January 27,
2006.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on January 31,
2006.




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location10.5
    
    Lease Agreement, dated July 1, 1997,
by and between Collegiate Pacific
Inc. and The Realty Associates Fund
VI, L.P.
    
    Exhibit 10.8 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
1998.10.6
    
    Third Amendment to Lease, dated as of
September 6, 2007, by and between
Collegiate Pacific Inc. and The
Realty Associates Fund VI, L.P.*10.7
    
    Lease Agreement, dated April 1, 2004,
by and between Collegiate Pacific
Inc. and RPD Services, Inc.
    
    Exhibit 10.2 to the
Registrants
Quarterly Report on
Form 10-QSB for the
fiscal quarter ended
March 31, 2004.10.8
    
    Lease Agreement, dated May 21, 2004,
by and between Tomark Sports, Inc.,
and Edward A. Money and Marilyn J.
Money, Trustees of the Money Family
Trust.
    
    Exhibit 10.6 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2005.10.9
    
    Lease Agreement, dated July 6, 1994,
by and between Dixie Sporting Goods
Co., Inc. and E. Carlton Wilton.
    
    Exhibit 10.7 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2004.10.10
    
    Lease Amendment and Extension, dated
February 26, 2005, by and between
Dixie Sporting Goods Co., Inc. and
The Wilton Companies, LLC.
    
    Exhibit 10.1 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended March 31, 2006.10.11
    
    Lease Agreement, dated December 10,
2004, by and between McWeeney Smith
Partnership and CMS of Central
Florida, Inc d/b/a Orlando Team
Sports.
    
    Exhibit 10.4 to the
Registrants
Quarterly Report on
Form 10-QSB for the
fiscal quarter ended
December 31, 2004.10.12
    
    Lease Agreement, dated as of August
3, 2005, by and among Salkeld & Sons,
Inc. and Albert A. Messier.
    
    Exhibit 10.2 to the
Registrants Current
Report on Form 8-K
filed on August 5,
2005.10.13
    
    Second Amendment to Lease, dated as
of February 10, 2003, by and between
Collegiate Pacific Inc. and The
Realty Associates Fund VI, L.P.
    
    Exhibit 10.18 to the
Registrants Annual
Report on Form 10-KSB
filed for the fiscal
year ended June 30,
2005.10.14
    
    Amendment to License Agreement, dated
as of December 21, 2000, as amended
on May 1, 2005, by and among MacMark
Corporation, Equilink Licensing
Corporation and Sport Supply Group,
Inc.
    
    Exhibit 10.4 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.15
    
    Loan and Security Agreement, dated as
of March 27, 2001, by and between
Congress Financial Corporation
(Southwest) and Sport Supply Group,
Inc., as amended on October 1, 2002,
June 27, 2003, November 6, 2003,
December 29, 2003, February 9, 2004
and October 20, 2004.
    
    Exhibit 10.5 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location10.16
    
    Agreement, dated as of December 9,
1986, by and between Voit Corporation
and Sport Supply Group, Inc., the
successor-in-interest to BSN Corp.,
as amended on August 1, 2003.
    
    Exhibit 10.6 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.17
    
    Software End-User License Agreement ,
dated as of June 11, 1998, by and
between SAP America, Inc. and Sport
Supply Group, Inc., as amended on
January 1, 2004.
    
    Exhibit 10.7 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.18
    
    Lease Agreement, dated as of April
25, 1994, by and between Sport Supply
Group, Inc. and Prologis
(successor-in-interest to APT-Cabot
Texas, Inc., as successor-in-interest
to Centre Development Co., Inc.), as
amended on July 8, 1994, and June 10,
2004.
    
    Exhibit 10.8 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.19
    
    Lease Agreement, dated as of July 28,
1989, by and between Sport Supply
Group, Inc. and Merit Investment
Partners, L.P., as amended on July
13, 1998, July 31, 2000, and April
15, 2004.
    
    Exhibit 10.9 to the
Registrants
Quarterly Report on
Form 10-Q filed for
the fiscal quarter
ended September 30,
2005.10.20
    
    Lease Agreement, dated as of October
1, 2004, by and between Salkeld &
Sons, Inc. and First American Bank.
    
    Exhibit 10.24 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.21
    
    Third Amendment to Lease Agreement,
dated as of August 31, 2006, by and
between Prologis and Sport Supply
Group, Inc.
    
    Exhibit 10.25 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.22
    
    Fourth Amendment to Lease Agreement,
dated as of August 25, 2006, by and
between Acquiport DFWIP, Inc.
(successor-in-interest to Merit
Investment Partners, L.P.) and Sport
Supply Group, Inc.
    
    Exhibit 10.26 to the
Registrants Annual
Report on Form 10-K
filed for the fiscal
year ended June 30,
2006.10.23
    
    Letter Agreement, dated as of
November 10, 2006, between Collegiate
Pacific Inc. and Merrill Lynch
Business Financial Services Inc.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.10.24
    
    Amended and Restated Credit
Agreement, dated as of November 13,
2006, by and among Collegiate Pacific
Inc., Merrill Lynch Business
Financial Services Inc. and the
additional lenders from time to time
parties thereto.
    
    Exhibit 10.2 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.




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##### Table of Contents



ExhibitNumber
    
    Description
    
    Location10.25
    
    Indemnification Agreement, dated as
of November 13, 2006, by and among
Terrence M. Babilla and Collegiate
Pacific Inc.
    
    Exhibit 10.3 to the
Registrants Current
Report on Form 8-K
filed on November 13,
2006.10.26
    
    Collegiate Pacific Inc. 2007 Stock
Option Plan and form of Stock Option
agreements.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on December 18,
2006.10.27
    
    Letter Agreement, dated as of June
30, 2007, between Collegiate Pacific
Inc. and Merrill Lynch Business
Financial Services Inc.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on July 2,
2007.10.28
    
    Purchase Agreement, dated as of July
26, 2007, by and between Sport Supply
Group, Inc. and CBT Holdings, LLC.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on July 31,
2007.10.29
    
    Form of Amended and Restated
Executive Officer Change in Control
Agreement.
    
    Exhibit 10.5 to the
Registrants
Quarterly Report on
Form 10-Q for the
fiscal quarter ended
December 31, 2006.10.30
    
    Letter Agreement, dated as of May 11,
2007, between Collegiate Pacific Inc.
and Middle Market Finance, a division
of Merrill Lynch Business Financial
Services Inc.
    
    Exhibit 10.1 to the
Registrants
Quarterly Report on
Form 10-Q for the
fiscal quarter ended
March 31, 2007.12
    
    Ratio of Earnings to Fixed Charges.*14
    
    Code of Ethics.
    
    Exhibit 14 to the
Registrants Annual
Report on Form 10-KSB
for the fiscal year
ended June 30, 2003.21
    
    Subsidiaries of Sport Supply Group,
Inc.*23
    
    Consent of Grant Thornton LLP.*31.1
    
    Certification of the Chief Executive
Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act
of 2002.*31.2
    
    Certification of the Chief Financial
Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act
of 2002.*32.1
    
    Certification of the Chief Executive
Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.**
 
 *
    
    Filed herewith**
    
    Furnished herewith