SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-K
                                   (Mark One)

   [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                    For the Fiscal Year ended March 31, 2001

                                       OR

   [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                        For the transition period from to

                         Commission File Number 0-25226

                               EMERSON(R) RADIO CORP.
             (Exact name of registrant as specified in its charter)

         Delaware                                       22-3285224
(State or other jurisdiction                          (I.R.S. Employer
of incorporation or organization)                    Identification Number)


    Nine Entin Road, Parsippany, NJ                           07054
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code:   (973) 884-5800

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

      Title of each class              Name of each exchange on which registered
Common Stock, par value $.01 per share          American Stock Exchange

Securities  registered  pursuant to Section 12(g) of the Act: None.

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

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

Aggregate   market  value  of  the  voting  stock  of  the  registrant  held  by
non-affiliates  of the registrant at June 20, 2001 (computed by reference to the
last reported sale price of the Common Stock on the American  Stock  Exchange on
such date): $23,969,039.

Number of Common Shares outstanding at June 20, 2001:  31,343,978

                      DOCUMENTS INCORPORATED BY REFERENCE:

    Document                                             Part of the Form 10-K
Proxy Statement for Annual Meeting of
Stockholders to be held on August 24,
2001                                                           Part III
________________________________________________________________________________


                                     PART I


Item 1.  BUSINESS

The Company


     Emerson Radio Corp. operates in two business segments: consumer electronics
and sporting goods. The consumer electronics segment designs,  sources,  imports
and  markets  a  variety  of  consumer  electronic  products  and  licenses  its
trademarks for a variety of products globally. The sporting goods segment, which
is operated through  Emerson's  ownership of 50.1% of Sport Supply Group,  Inc.,
distributes and markets sports related equipment and leisure products  primarily
to institutional  customers in the United States.  The term (i) "Emerson" refers
to Emerson Radio Corp. and the Company's "consumer  electronics"  segment,  (ii)
"SSG" refers to Sport Supply  Group,  Inc. and the  Company's  "sporting  goods"
segment  and  (iii)  the  "Company"  refers  to  Emerson  and its  subsidiaries,
including SSG.

     Emerson  was  originally  formed in the State of New York in 1956 under the
name Major Electronics Corp. In 1977, Emerson reincorporated in the State of New
Jersey  and  changed  its name to  Emerson  Radio  Corp.  In 1994,  Emerson  was
reincorporated in Delaware. References to "Emerson" refer to Emerson Radio Corp.
and its  predecessor  and its  consolidated  subsidiaries,  unless  the  context
otherwise  indicates.  Emerson's principal executive offices are located at Nine
Entin Road,  Parsippany,  New Jersey 07054-0430.  Emerson's  telephone number in
Parsippany, New Jersey, is (973) 884-5800.

     For a detailed  discussion of SSG's business and financial  data, see SSG's
Form 10-K for the fiscal year ended March 30, 2001.



     Emerson,  directly  and through  several  subsidiaries,  designs,  sources,
imports,  markets,  and  licenses  a  variety  of  television,  video  products,
including digital video disc (DVD) and video cassette recorders (VCR), microwave
ovens,  audio,  home office,  home  theater,  multi-media,  specialty  and other
consumer electronic products.  Emerson also licenses its trademark for a variety
of products  domestically  and  internationally  to certain  licensees.  Emerson
distributes its products primarily through mass merchants,  discount  retailers,
toy retailers,  distributors and specialty catalogers leveraging the strength of
its "EMERSON(R)" and "H.H. Scott(R)"  trademarks,  recognized trade names in the
consumer electronics industry. The trade name "Emerson Radio" dates back to 1912
and  is  one of the  oldest  and  most  well  respected  names  in the  consumer
electronics industry. See "Business-Licensing and Related Activities".

<PAGE>

     Emerson  believes it possesses an advantage over its competitors due to the
combination of (i) the  "EMERSON(R)"  brand  recognition,  (ii) its distribution
base and  established  customer  relations,  (iii) its  sourcing  expertise  and
established vendor relations,  (iv) an infrastructure with personnel experienced
in servicing  and  providing  logistical  support to the domestic  mass merchant
distribution  channel and (v) its extensive  experience in establishing  license
and distributor agreements on a global basis for a variety of products.  Emerson
intends to continue leveraging its core competencies to offer a broad variety of
current and new consumer products to customers. In addition,  Emerson has in the
past,  and  intends  in the  future,  to form  joint  ventures  and  enter  into
additional  inward and outward  licensing and distribution  agreements that take
advantage of its trademarks  and utilize the logistical and sourcing  advantages
for products that are more  efficiently  marketed  with the  assistance of these
partners.

     The  consumer  electronics  segment's  core  business  consists of selling,
distributing  and  licensing  various low to  moderately  priced  categories  of
consumer  electronic  products.  The majority of Emerson's  marketing  and sales
efforts are  concentrated in the United States and, to a lesser extent,  certain
other   international   regions.   Major   competitors   in  these  markets  are
foreign-based manufacturers and distributors. See "Business - Competition."


Sporting Goods

     SSG is a leading  direct mail  marketer  of sports  related  equipment  and
leisure products primarily to the institutional market in the United States. The
institutional market is generally comprised of schools, colleges,  universities,
government  agencies,  military facilities,  athletic clubs,  athletic teams and
dealers, youth sports leagues and recreational organizations.

Products

Consumer Electronics

     Emerson's current product categories consist of the following:

<TABLE>
<CAPTION>

Video Products                                Audio Products                                   Other

<S>                                           <C>                                              <C>
Color televisions                             CD stereo systems                                Home office
Color specialty televisions                   Digital clock radios                             Home theater
Digital video disc (DVD)                      Portable audio, cassette & CD systems            Microwave ovens
Specialty video cassette players              Personal audio, cassette & CD systems            Multi-media
Video cassette recorders (VCR)                Shelf systems                                    Hello Kitty(R) products
                                              Specialty clock radios
</TABLE>
<PAGE>

     All of the consumer electronics products offer various features.  Microwave
ovens  range in size from 0.6 cubic feet to 1.6 cubic feet  containing  features
such as key pad touch controls, multi-power levels, auto defrost and turntables.
The portable audio systems  incorporate  AM/FM radios and/or cassettes and/or CD
players in a variety of models. Emerson has entered into a license agreement for
use of the  Hello  Kitty(R)  logo on  selected  products.  The  Company's  H. H.
Scott(R) division markets home theater products and audio systems.

Sporting Goods

     SSG  manufactures  and  distributes  one of the  broadest  lines of  sports
related equipment and leisure products  primarily to the  institutional  market.
SSG offers  approximately  10,000  sporting  goods and  sports and  recreational
leisure  products,  over 3,000 of which are  manufactured by SSG.  Product lines
include: archery, baseball, softball, basketball,  camping, football, tennis and
other racquet sports, gymnastics, indoor recreation, physical education, soccer,
field and floor hockey, lacrosse,  track and field, volleyball,  weight lifting,
fitness equipment, outdoor playground equipment, and early childhood development
products.

     Brand recognition is important to the institutional  market.  Most of SSG's
products are marketed  under trade names or trademarks  owned or licensed by SSG
and include the following:

    Alumagoal(R)              AMF(R)                      ATEC(R)
    BSN(R)                    Fibersport                  Flag  A  Tag(R)
    Gamecraft                 GSC Sports                  Hammett & Sons
    Huffy(R)                  Maxpro(R)                   MacGregor(R)
    New England Camp &Supply  NorthAmerican Recreation(R) Passon's Sports
    Pillo Polo(R)             Port-A-Pit(R)               Pro Base(R)
    Pro Down(R)               Pro Net                     Rol-Dri(R) and
                                                            Tidi-Court
    Safe-Squat                Toppleball(R)               U.S. Games, Inc(R)
    Voit(R)

<PAGE>

Growth Strategy

Consumer Electronics

     Emerson's strategic focus is to: (i) develop and expand its distribution of
consumer  electronic  products in the domestic  marketplace  to existing and new
customers;  (ii) develop and sell new products, such as home office products and
products  utilizing  popular theme  characters and logos such as Hello Kitty(R);
(iii)  capitalize  on  opportunities  to  license  the  "EMERSON(R)"  and  "H.H.
Scott(R)"  trademarks;  (iv)  leverage  and exploit its  sourcing  capabilities,
buying  power and  logistics  expertise  in the Far East either for itself or on
behalf  of third  parties;  (v)  expand  international  sales  and  distribution
channels;  (vi) further develop its direct to consumer sales channel;  and (vii)
expand through strategic mergers and acquisitions.  In connection with Emerson's
strategic  focus,  Emerson  may from  time to time take an  equity  position  in
various corporate entities.

     Emerson  believes  that the  "EMERSON(R)"  trademark is  recognized in many
countries. A principal component of Emerson's growth strategy is to utilize this
global brand name recognition  together with its reputation for quality and cost
competitive products to aggressively promote its product lines within the United
States and targeted geographic areas on an international basis. Emerson believes
that it will be able to  compete  more  effectively  in the  highly  competitive
consumer   electronics   and  microwave  oven   industries,   domestically   and
internationally,  by combining innovative approaches to the consumer electronics
current  product  line  and  augmenting  its  product  line  with  complementary
products.  Emerson  intends to pursue  such  plans  either  independently  or by
forging  new  relationships,  including  license  arrangements,  distributorship
agreements and joint ventures. See "Business-Licensing and Related Activities."


Sporting Goods

     SSG  believes  that the  institutional  sporting  goods  market  is  highly
fragmented and that most of its competitors lack the necessary capital,  support
systems,  and economies of scale to effectively exploit available  opportunities
for growth.  SSG also believes  that it is well  positioned to grow the business
due to its  ability to  process  and  fulfill a high  capacity  of  orders;  its
well-developed  expertise in catalog design and merchandising;  and its recently
implemented information technology system.

     One of the most important  contributions  of SSG's  information  technology
system is the data that is available,  which is channeled to a host of websites.
Each website is strategically  targeted to a specific  customer group or product
line.  SSG's  websites  enable its  customers to place  orders,  access  account
information,  track orders,  and perform routine customer service inquiries on a
real-time basis,  twenty-four hours a day, seven days a week. This functionality
allows for more  convenience  and added  flexibility  for SSG's  customers.  The
continued  migration of SSG's customers to its websites is vital to SSG's growth
and success.

<PAGE>

Sales and Distribution

Consumer Electronics

     Emerson makes  available to its customers a direct  import  program,  and a
domestic  program.  Under  its  direct  import  program,  products  bearing  the
"EMERSON(R)"  trademark are imported directly by Emerson's customers.  In Fiscal
2001 and Fiscal 2000,  products  representing  approximately  80% and 83% of net
consumer electronics revenues,  respectively, were earned under this program. If
a larger  proportion  of  Emerson's  sales were made  pursuant  to its  domestic
program,  Emerson would require  increased  working  capital that may affect its
liquidity.  See Item 7 -  "Management's  Discussion  and  Analysis of Results of
Operations and Financial Condition."

     Emerson has an integrated  system to coordinate the  purchasing,  sales and
distribution  aspects of its operations.  Emerson receives orders from its major
accounts electronically, via facsimile, telephone or mail. Emerson does not have
long-term contracts with any of its customers,  but rather receives orders on an
ongoing basis.  Products  imported by Emerson  (generally from the Far East) are
shipped by ocean  and/or  inland  freight and then stored in  contracted  public
warehouse  facilities  for shipment to customers.  All inventory is monitored by
Emerson's  electronic  inventory  system.  As a purchase  order is received  and
filled,  warehoused  product is labeled and prepared  for  outbound  shipment to
customers  by common,  contract or small  package  carriers  for sales made from
inventory.

Sporting Goods

     SSG's  websites  enable  its  customers  to place  orders,  access  account
information,  track orders,  and perform routine customer service inquiries on a
real-time basis,  twenty-four hours a day, seven days a week. This functionality
allows for more convenience and added flexibility for its customers.

     SSG's sourcing, warehousing,  distribution and fulfillment capabilities and
its fully  integrated  information  system,  provide the  necessary  capacities,
logistics and information  technological  support to meet the demands and growth
potential of commerce via the Internet.

<PAGE>

Domestic Marketing

Consumer Electronics


     In the United States,  Emerson markets its products  primarily through mass
merchandisers,  discount  retailers,  and specialty toy  distributors.  Wal-Mart
Stores accounted for  approximately 41% and 56%, and Target Stores accounted for
approximately  14% and 21% of the Company's  consolidated net revenues in fiscal
2001 and fiscal 2000,  respectively.  The decrease in the percentage of revenues
for these two customers for fiscal 2001 as compared to fiscal 2000, is primarily
due to the  consolidation  of SSG's net  revenues  with those of  Emerson's  for
fiscal 2001.  No other  customer  accounted  for more than 10% of the  Company's
consolidated net revenues in either period. Management believes that any loss or
material reduction in sales from either of these customers would have a material
adverse affect on the Company's results of operations.

     Approximately  34% and  38% of the net  consumer  electronics  revenues  in
fiscal  2001  and  fiscal   2000,   respectively,   were  made   through   sales
representative  organizations  that receive sales  commissions  and work closely
with Emerson's sales personnel. The sales representative  organizations sell, in
addition  to the  Emerson  products,  similar,  but  generally  non-competitive,
products.  In most instances,  either party may terminate a sales representative
relationship  on 30 days' prior notice in  accordance  with  customary  industry
practice. Emerson utilizes approximately 30 sales representative  organizations,
including  one  through  which  approximately  21% and  25% of the net  consumer
electronics revenues were made in fiscal 2001 and fiscal 2000, respectively.  No
other  sales  representative  organization  accounted  for more  than 10% of the
consumer  electronics  net revenues in either year.  The  remainder of Emerson's
sales are serviced by its sales personnel.

Sporting Goods

     SSG offers products directly to the institutional market primarily through:
(i) a variety of distinctive,  information-rich  catalogs;  (ii) sales personnel
strategically  located in certain large  metropolitan  areas; (iii) in-bound and
out-bound telemarketers;  (iv) a team of experienced bid and quote personnel and
(v) the Internet.  SSG's marketing  efforts are supported by a customer database
of over 250,000 names, a call center, a custom- designed distribution center and
several  manufacturing  facilities,  which currently offer approximately  10,000
sports related equipment products to over 100,000 customers.

     SSG has a large and diverse customer base, and as a result,  SSG's revenues
are not dependent upon any single customer.  SSG's customers  include all levels
of public and private schools,  colleges,  universities and military  academies,
municipal and  governmental  agencies,  military  facilities,  churches,  clubs,
camps, hospitals, youth sports leagues,  non-profit organizations,  team dealers
and certain large retail  sporting goods chains.  SSG believes that its customer
base in the United States is the largest in the institutional direct mail market
for sports related equipment.

<PAGE>

Foreign Marketing

     Approximately 3% of the consumer electronics segment net revenues in fiscal
2001 and fiscal 2000 were  derived  from  customers  based in foreign  countries
through license and distribution agreements primarily in South America,  Canada,
and Mexico.  Less than 1% of the sporting  goods  segment net revenues in fiscal
2001 were  derived  from  customers  based in  foreign  countries.  See Item 8 -
"Financial  Statements  and  Supplementary  Data  -  note  14 of  Notes  to  the
Consolidated  Financial  Statements" and Item 7 -  "Management's  Discussion and
Analysis of Results of Operations and Financial Condition."

Licensing and Related Activities

Consumer Electronics


     Emerson has several license agreements in place that allow licensees to use
the "EMERSON(R)" and "H.H.  Scott(R)"  trademarks for the manufacture and/or the
sale of consumer  electronics and other products.  The license  agreements cover
various countries throughout the world and are subject to renewal at the initial
expiration  of the  agreements.  Additionally,  Emerson has entered into several
sourcing  and  inspection  agreements  that  require  Emerson to  provide  these
services in exchange for a fee. License revenues recognized and earned in fiscal
2001, 2000, and 1999 were approximately $3,930,000,  $3,143,000, and $3,633,000,
respectively.  Emerson  records a majority of licensing  revenues as earned over
the term of the related agreements.

     In October  2000,  Emerson  entered  into a  three-year  license  agreement
("Video License  Agreement") with Funai Corporation,  Inc.  ("Funai")  effective
January 1, 2001 to replace a prior  agreement with Daewoo  Electronics  Co. Ltd.
("Daewoo"). The Video License Agreement provides that Funai manufacture, market,
sell and distribute  specified  products bearing the  "EMERSON(R)"  trademark to
customers in North America.  Under the terms of the agreement,  the Company will
receive  non-refundable  minimum annual royalty payments of  approximately  $4.3
million for  calendar  years 2001 and 2002,  as well as 2003  unless  terminated
pursuant  to the terms of the  License  Agreement.  The  minimums  are  credited
against royalties earned for the sale of products.  During fiscal 2001, revenues
of $1,075,000 were recorded under this Video License Agreement.

<PAGE>


     Throughout various parts of the world,  Emerson maintains  distribution and
license  agreements that provide for the distribution of Emerson's products into
defined geographic areas.

     Emerson   intends  to  pursue   additional   licensing   and   distribution
opportunities  and believes that such  activities  have had and will continue to
have a positive  impact on operating  results by generating  income with minimal
incremental  costs,  if any,  and without the  necessity  of  utilizing  working
capital.  See Item 7 -  "Management's  Discussion  and  Analysis  of  Results of
Operations and Financial Condition" and "Forward-Looking Information."

Sporting Goods

     SSG inward licenses many  well-known  names and trademarks that allow it to
manufacture, sell, and distribute specified sport related products and equipment
to institutional  customers using the licensed names for specified  royalty fees
paid to licensors. See Item 1 - "Trademarks".


Design and Manufacturing

Consumer Electronics

     Emerson's products are manufactured by original equipment  manufacturers in
accordance  with Emerson's  specifications.  These  manufacturers  are primarily
located in Hong Kong, South Korea, China, Malaysia and Thailand.

     Emerson's  design team is  responsible  for product  development  and works
closely with its suppliers. Emerson's engineers determine the detailed cosmetic,
electronic  and other  features for new products,  which  typically  incorporate
commercially available electronic parts to be assembled according to its design.
Accordingly, the exterior designs and operating features of the products reflect
Emerson's judgment of current styles and consumer preferences. Emerson's designs
are tailored to meet the consumer preferences of the local market,  particularly
in the case of its international markets.

     During fiscal 2001 and fiscal 2000, 100% of Emerson's  purchases  consisted
of imported finished goods.

<PAGE>

     The following summarizes Emerson's purchases from its major suppliers:

                                                                Fiscal Year
                   Supplier                               2001              2000
                   Daewoo                                 21%                30%
                   Avatar Mfg                             20%                17%
                   Tonic Electronics                      17%                11%
                   Kysho                                  16%                * %
                   Imarflex                               12%                13%

--------------------------------------------------------------------------------
*  Less than 10%.

     No other supplier  accounted for more than 10% of Emerson's total purchases
in fiscal 2001 or fiscal 2000.  Emerson  considers  its  relationships  with its
suppliers to be satisfactory and believes that, barring any unusual shortages or
economic conditions Emerson could develop, as it already has alternative sources
for the products it currently  purchases.  Emerson has a  contractual  agreement
with one  supplier  to  provide  future  raw  materials  totaling  approximately
$240,000.  No  assurance  can be given  that ample  supply of  product  would be
available at current prices if Emerson was required to seek alternative  sources
of supply without  adequate notice by a supplier or a reasonable  opportunity to
seek  alternate  production  facilities  and  component  parts.  See  Item  7  -
"Management's  Discussion  and Analysis of Results of  Operations  and Financial
Condition"  and "Forward - Looking  Information",  and Item 7A - "Inflation  and
Foreign Currency".

Sporting Goods

     SSG  manufactures,  assembles and  distributes  many of its products at its
facilities. See Item 2 -- "Properties".

     Certain products manufactured by SSG are custom-made; such as tumbling mats
ordered in color or size  specifications,  while  others are  standardized.  The
principal raw  materials  used by SSG in  manufacturing  are, for the most part,
readily available from several different sources, while no one supplier accounts
for more than 10 percent of the total raw materials supplied. Such raw materials
include foam, vinyl,  nylon thread,  steel and aluminum tubing,  wood, slate and
cloth.

     Items  not  manufactured  by  SSG  are  purchased  from  various  suppliers
primarily  located in the United States,  Taiwan,  Australia,  the  Philippines,
Thailand, the People's Republic of China,  Pakistan,  Sweden and Canada. SSG has
no significant  purchase contracts with any major supplier of finished products,
and most products  purchased  from  suppliers are readily  available  from other
sources.  Purchases of most finished  products are made in U.S. dollars and are,
therefore, not subject to direct foreign exchange rate differences.

<PAGE>

Warranties


     Emerson offers limited warranties for its consumer electronics,  comparable
to those  offered to consumers by its  competitors  in the United  States.  Such
warranties  typically consist of a 90 day period for audio products and one year
period for microwave products, under which Emerson will pay for labor and parts,
or offer a new or  similar  unit in  exchange  for a  non-performing  unit.  SSG
typically offers limited 30 day warranties for its sporting goods, comparable to
its competitors.


Returned Products

     Emerson's  customers  return  product to Emerson  for a variety of reasons,
including  retailer  return  policies with their  customers,  damage to goods in
transit and occasional cosmetic imperfections and mechanical failures.

     To reduce the costs  associated with product  returns,  Emerson has entered
into agreements with the majority of its suppliers.  For a fee,  Emerson returns
defective  returned product to the supplier and in exchange receives a unit. The
return to vendor agreements have resulted in significant cost savings.

     In most instances,  SSG's customers have the right to return product within
30 days if they are not completely satisfied. Returned products are not returned
to the same degree as they are in the  consumer  products  segment,  and are not
considered a significant factor in SSG's operations.

Backlog

     The  Company  believes  that  backlog  is not a  significant  factor in its
consumer  electronics or sporting goods  segments.  The ability of management to
correctly anticipate and provide for inventory  requirements is essential to the
successful operation of the Company's business.

Trademarks

     Emerson owns the EMERSON(R)", "Emerson Research(TM)",  "Emerson Interactive
(sm)",  "H.H.  Scott(R)"  and  "Scott(R)"  trademarks  for  certain  of its home
entertainment  and consumer  electronic  products in the United States,  Canada,
Mexico and various other countries.  Of the trademarks  owned by Emerson,  those
registered  in the United  States must be renewed at various  times through 2011
and those  registered  in Canada must be renewed at various  times through 2014.
Emerson's  trademarks  are also  registered  on a  worldwide  basis  in  various
countries, which registrations must be renewed at various times. Emerson intends
to renew all trademarks necessary for its business. Emerson considers the

<PAGE>

"EMERSON(R)"  trademark  to be of material  importance  to its business and owns
several other trademarks, none of which is currently considered by Emerson to be
of  material   importance  to  its  business.   Emerson  outward   licenses  the
"EMERSON(R)"  trademark  on  a  limited  product  and  geographic  basis  for  a
definitive  period  of time.  See  Item 1  "Business  -  Licensing  and  Related
Activities."

     SSG inward licenses many well known names and trademarks,  such as Voit(R),
Huffy(R),  MacGregor(R),  Maxpro(R)  and  AMF(R).  These  licenses  allow SSG to
manufacture, sell, and distribute specified sport related products and equipment
to institutional  customers using these names for specified  royalty fees. These
license  agreements have expiration dates ranging from December 31, 2001 through
2040, in some cases with renewable terms.

Competition

Consumer Electronics

     The market  segment of the consumer  electronics  industry in which Emerson
competes  generates  approximately  $14 billion of factory sales annually and is
highly fragmented,  cyclical and very competitive. The industry is characterized
by the short  life  cycle of  products,  which  requires  continuous  design and
development efforts.

     Emerson  primarily  competes  in the  low to  medium-priced  sector  of the
consumer electronics market. Management estimates that Emerson has several dozen
competitors that are manufacturers and/or  distributors,  many of which are much
larger and have greater  financial  resources  than  Emerson.  Emerson  competes
primarily on the basis of its products'  reliability,  quality,  price,  design,
consumer  acceptance  of the  "EMERSON(R)"  trademark,  and  quality  service to
retailers  and their  customers.  Emerson's  products also compete at the retail
level for shelf space and promotional  displays,  all of which have an impact on
its established and proposed distribution channels.

Sporting Goods

     SSG competes in the  institutional  sporting goods market  principally with
local sporting goods dealers,  retail  sporting goods stores,  other direct mail
catalog  marketers  and  providers of sporting  goods on the  Internet.  SSG has
identified  approximately  15 other direct mail  companies in the  institutional
market most of which it believes are competitors  substantially smaller than SSG
in terms of geographic coverage, products, E-Commerce capability and revenues.

<PAGE>

     SSG competes in the institutional market principally on the basis of brand,
price,  product  availability and customer service,  which it believes it has an
advantage in the institutional  market over traditional sporting goods retailers
and team  dealers  because its selling  prices do not include  comparable  price
markups  attributable  to traditional  multi-distribution  channel  markups.  In
addition,   the  ability  to  control  the   availability  of  goods  which  SSG
manufactures enables it to respond more rapidly to customer demand.

Seasonality

     Emerson  generally  experiences  stronger demand from its customers for its
products in the fiscal  quarters ending  September and December,  but during the
last  several  years this  revenue  pattern has been less  prevalent  due to the
retailers need to plan earlier for the Christmas selling season and management's
ability to obtain  additional  orders  during the slower times of the year.  The
seasonality  of  Emerson  is  counterbalanced  by  SSG  which  has  historically
experienced  strong  revenues  during the March quarter  primarily due to volume
generated by spring and summer sports,  favorable outdoor weather conditions and
school needs  before  summer  closings,  and weak  revenues  during the December
quarter.

Government Regulation

     Pursuant to the Tariff Act of 1930,  as amended,  the Trade Act of 1974 and
regulations promulgated thereunder,  the United States government charges tariff
duties,  excess  charges,  assessments  and  penalties  on many  imports.  These
regulations are subject to constant  change and revision by government  agencies
and by action by the United States Trade  Representative and may have the effect
of increasing the cost of goods purchased by the Company or limiting  quantities
of goods  available  to the Company  from its  overseas  suppliers.  A number of
states have adopted statutes  regulating the manner of determining the amount of
payments to independent  service centers performing warranty service on products
such  as  those  sold  by  the  Company.   Additional  Federal  legislation  and
regulations   regarding  the  importation  of  consumer  electronics   products,
including  the  products  marketed  by the  Company,  have  been  proposed  from
time-to-time  and, if enacted into law,  could  adversely  affect the  Company's
results of operations.

     Many products sold by the sporting goods segment are subject to 15 U.S.C.A.
Sections  2051-2084 (1998 and Supp. 1998),  among other laws, which empowers the
Consumer  Product  Safety  Commission  (the  "CPSC") to protect  consumers  from
hazardous  sporting  goods and other  articles.  The CPSC has the  authority  to
exclude from the market certain  articles that are found to be hazardous and can
require a  manufacturer  to refund the purchase price of products that present a
substantial  product hazard.  CPSC  determinations  are subject to court review.
Similar laws exist in some states and cities in the United States.

<PAGE>

Product Liability and Insurance

     Because  of the nature of the  products  sold by SSG,  SSG is  periodically
subject to product  liability claims resulting from personal  injuries.  SSG may
become involved in various  lawsuits  incidental to the business.  Additionally,
significantly  increased  product  liability  claims  continue  to  be  asserted
successfully   against   manufacturers  and  distributors  of  sports  equipment
throughout the United States  resulting in general  uncertainty as to the nature
and extent of manufacturers' and distributors' liability for personal injuries.

     There  can  be no  assurance  that  Emerson's  and  SSG's  general  product
liability insurance will be sufficient to cover any successful product liability
claims made.  It is the opinion of both  companies  that any ultimate  liability
arising  out of  currently  pending  product  liability  claims  will not have a
material  adverse effect on their financial  condition or results of operations.
However,  any claims  substantially in excess of the insurance coverage,  or any
substantial claim not covered by insurance, could have a material adverse effect
on the Company's financial condition and results of operations.

Employees

     As of June 11, 2001, the Company had approximately 570 employees,  of which
110  were  employed  by  Emerson,  and 460  were  employed  by SSG.  None of the
Company's  employees are  represented  by unions,  and the Company  believes its
labor relations to be generally satisfactory.

Item 2.  PROPERTIES

     The following table sets forth the material  properties  owned or leased by
the Company:


<PAGE>
<TABLE>
<CAPTION>

                                                       Approximate
                                                      Square Footage                                         Lease
                 Facility Purpose                                                  Location                 Expires
                                                                                                          or is Owned

<S>                                                            <C>                                    <C>
Consumer electronics segment:
Corporate headquarters                                         22,000     Parsippany, NJ              October, 2003
Hong Kong office                                               10,000     Hong Kong, China            July, 2003

Sporting goods segment:
Manufacturing and corporate headquarters                      135,000     Farmers Branch, TX          December, 2004
Warehouse and fulfillment processing                          181,000     Farmers Branch, TX          December, 2004
Sub-leased to a third party                                    45,000     Cerritos, CA                December, 2001
Manufacturing                                                  62,500     Sparks, NV                  July, 2004
Manufacturing                                                  35,000     Anniston, AL                Owned
Manufacturing                                                  45,000     Anniston, AL                Owned
Manufacturing                                                  38,500     Anniston, AL                November, 2001

</TABLE>

     Emerson utilizes public warehouse space. Such public warehouse  commitments
are evidenced by contracts with terms of up to one year. The cost for the public
warehouse  space is  primarily  based on a fixed  percentage  of sales from each
respective location.

     The Company  believes that the  facilities  used in its  operations  are in
satisfactory  condition  and  adequate  for its present and  anticipated  future
operations. In addition to the facilities listed above, the Company leases space
in various locations, primarily for use as sales offices.

Item 3.  LEGAL PROCEEDINGS

     As  previously  reported,  Emerson has  resolved  substantially  all of the
litigation  against it and accrued the net cost  thereof as an expense  prior to
its fiscal year ended March 31, 2001. All that remains is litigation  arising in
the ordinary  course of business,  which in the opinion of management,  will not
have a material adverse effect on the Company's  consolidated financial position
if resolved on unfavorable  terms to the Company and the  implementation,  as to
Petra  Stelling  only, of the Court ordered  termination  of the  Stipulation of
Settlement  entered into in 1996 (the  "Stipulation")  among Geoffrey P. Jurick,

<PAGE>

the Company's Chairman,  three of his creditors,  the Company, and certain other
parties.  While such  implementation  may have a material  adverse effect on Mr.
Jurick,  it is the opinion of management of the Company that  termination of the
Stipulation will not adversely affect the Company.

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

     The Annual  Meeting of the  Company's  shareholders  was held on August 10,
2000, at which time the shareholders  elected the following slate of nominees to
remain on the Board of Directors:  Peter G. Bunger, Robert H. Brown, Jr., Jerome
H. Farnum, Stephen H. Goodman, and Geoffrey P. Jurick.  Election of the Board of
Directors  was the only  matter  submitted  for  shareholder  vote.  There  were
39,377,615  shares of outstanding  capital stock of the Company entitled to vote
at the record  date for this  meeting.  After the  record  date and prior to the
meeting,  the Company  repurchased  8,177,533  shares of its outstanding  stock.
Accordingly,  there were  31,200,082  shares entitled to vote at the meeting and
there were present at such meeting, in person or by proxy,  stockholders holding
28,455,403  shares of the Company's Common Stock which  represented 91.2% of the
total  capital stock  outstanding  and entitled to vote.  There were  28,455,403
shares voted on the matter of the election of directors. The result of the votes
cast regarding each nominee for office was:

<TABLE>
<CAPTION>

          Nominee for Director                           Votes For                   Votes Withheld

<S>                                                       <C>                             <C>
         Robert H. Brown, Jr.                             28,150,646                      304,757
         Peter G. Bunger                                  28,162,646                      292,757
         Jerome H. Farnum                                 28,162,646                      292,757
         Stephen H. Goodman                               28,156,597                      298,806
         Geoffrey P. Jurick                               28,152,646                      292,757

</TABLE>

                                     PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED

         STOCKHOLDER MATTERS

         (a)  Market Information

          The Company's  Common Stock has traded on the American  Stock Exchange
since December 22, 1994 under the symbol MSN. The following table sets forth the
range of high and low sales prices for the Company's Common Stock as reported by
the American Stock Exchange during the last two fiscal years.

<PAGE>
<TABLE>

                                    Fiscal 2001                          Fiscal 2000
                          -------------------------------    -------------------------------
                              High             Low              High             Low

<S>                      <C>            <C>                 <C>             <C>
First Quarter            $    .938      $      .625         $   .875        $    .500
Second Quarter               2.938             .750             .750             .500
Third Quarter                2.813            1.125             .688             .438
Fourth Quarter               2.050            1.000            1.000             .500
</TABLE>

          There is no  established  trading  market for the  Company's  Series A
Convertible Preferred Stock.

          (b)  Holders

          At May 23, 2001, there were  approximately  444 stockholders of record
of the Company's Common Stock.

          (c)  Dividends

          The  Company's  policy has been to retain all available  earnings,  if
any, for the  development  and growth of its business.  The Company has not paid
cash dividends on its Common Stock. In deciding  whether to pay dividends on the
Common  Stock in the future,  the  Company's  Board of Directors  will  consider
factors it deems  relevant,  including  the  Company's  earnings  and  financial
condition and its working  capital and  anticipated  capital  expenditures.  The
Emerson's  credit facility and the Indenture  governing  Emerson's  subordinated
debentures contain certain dividend payment restrictions on the Company's Common
Stock.  Additionally,  the Company's Certificate of Incorporation,  defining the
rights  of the  Series A  Preferred  Stock  (as  more  fully  described  below),
prohibits  Common Stock dividends  unless the Series A Preferred Stock dividends
are paid or put aside. The Series A Preferred Stock accrues  dividends,  payable
on a quarterly basis, at a 1.4% dividend rate. The Company is in compliance with
the default  provisions  of its Series A Preferred  Stock,  and  currently  owes
dividends in arrears of $977,000.  As of March 31, 2001, no additional dividends
will  accrue  on the  Series  A  Preferred  Stock.  See  Item 7 -  "Management's
Discussion and Analysis of Results of Operations and Financial Condition."

          (d)  Unregistered Securities

          During  the  fourth  quarter  of fiscal  2001,  68,896  warrants  were
exercised and 68,896 shares of common stock of the Company were issued upon such
exercise.  On March 31,  2001,  approximately  680,000  outstanding  warrants to
purchase shares of the Company's common stock expired unexercised.

          The above  transactions  were  private  transactions  not  involving a
public  offering  and  were  exempt  from  the  registration  provision  of  the
Securities Act of 1933, as amended,  pursuant to Section 4(2) thereof.  The sale
of  securities  was  without  the use of an  underwriter,  and the  certificates
evidencing this now bear a restrictive  legend  permitting the transfer  thereof
only upon registration of the shares or an exemption under the Securities Act of
1933, as amended.

Item 6.   SELECTED CONSOLIDATED FINANCIAL DATA

          The following table sets forth selected consolidated financial data of
the Company for the five years ended March 31,  2001.  For the years ended April
3, 1998 through March 31, 2000, the Company changed its financial reporting year
to a 52/53 week year  ending on the Friday  closest  to March 31.  Beginning  in
fiscal 2001,  the Company  changed its financial  reporting year to end on March
31. The selected consolidated  financial data should be read in conjunction with
the Company's  Consolidated  Financial Statements,  including the notes thereto,
and Item 7 - "Management's  Discussion and Analysis of Results of Operations and
Financial Condition".

<TABLE>
<CAPTION>

                                                  ------------- ------------- --------------- -------------- ---------------
                                                   March 31,     March 31,       April 2,       April 3,       March 31,
                                                    2001 (1)        2000           1999           1998            1997
                                                  ------------- ------------- --------------- -------------- ---------------
                                                                      (In thousands, except per share data)
Summary of Operations:
<S>                                               <C>           <C>           <C>              <C>           <C>
  Net Revenues                                    $   377,410   $   203,701   $  160,554       $ 162,730     $  178,708

  Operating Income (Loss)                         $    13,493   $     5,334   $    3,278       $     524     $  (20,243)

  Net Income (Loss)                               $    12,653   $     3,620   $      289       $  (1,430)    $  (23,968)

Balance Sheet Data at Period End:
  Total Assets                                    $   119,006   $    63,511   $   60,872       $  58,762     $   61,151
  Current Liabilities                                  45,330        30,057       29,828          23,885         24,043
  Long-Term Debt                                       38,257        20,891       20,847          20,929         21,079
  Shareholders' Equity                                 15,131        12,563       10,197          13,948         16,029
  Working Capital                                      39,497         9,854        6,859           9,610         13,258
  Current Ratio                                      1.9 to 1      1.3 to 1      1.2 to 1         1.4 to 1       1.6 to 1

Per Common Share: (2)
  Net Income (Loss) Per Common Share -
         Basic                                         $ .36    $       .07    $    (.01)       $   (.04)     $   (0.61)


  Net Income (Loss) Per Common Share -
        Diluted                                   $      .33    $       .07    $    (.01)       $   (.04)     $   (0.61)

Weighted Average Shares Outstanding:
    Basic                                              35,066        47,632       49,398          45,167         40,292

    Diluted                                            38,569        53,508       49,398          45,167         40,292

Common Shareholders' Equity per
    Common Share (3)                              $      0.33       $  0.19       $ 0.13         $  0.19      $    0.15

</TABLE>

<PAGE>

(1)  Prior to March 23, 2001,  the Company  accounted for its  investment in SSG
     using the equity method of accounting.  On March 23, 2001, Emerson obtained
     a majority interest in SSG and is accounting for this interest as a partial
     purchase to the extent of the change in control. The assets and liabilities
     of SSG have been  revalued to fair value to the extent of  Emerson's  50.1%
     interest in SSG.  SSG's  results of  operations  and the minority  interest
     related to those  results have been  included in the  Company's  results of
     operations  as though it had been  acquired  at the  beginning  of the year
     ended March 31, 2001.

(2)  For  fiscal  2001 and  2000,  dilutive  securities  include  3,066,000  and
     5,876,000 shares,  respectively,  assuming conversion of Series A Preferred
     Stock at a price equal to 80% of the  weighted  average  market  value of a
     share of Common  Stock,  determined  as of March 31,  2001,  and 2000.  For
     fiscal 2001,  dilutive  securities  also include  437,000  shares  assuming
     conversion of 1,658,000 options.  Per common share data is based on the net
     income or loss and  deduction  of  preferred  stock  dividend  requirements
     (resulting  in a  loss  attributable  to  common  stockholders  for  fiscal
     1999-1997) and the weighted average of Common Stock outstanding during each
     fiscal  year.  Loss  per  share  does  not  include  potentially   dilutive
     securities  assumed  outstanding since the effects of such conversion would
     be anti-dilutive.

(3)  Calculated  based on  common  shareholders'  equity  divided  by the  basic
     weighted average shares of Common Stock outstanding.  Common  shareholders'
     equity for fiscal years 2001 through 1997, is equal to total  shareholders'
     equity   less   $3,677,000,   $3,677,000,   $3,714,000,   $5,237,000,   and
     $10,000,000, respectively.


Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF

           OPERATIONS AND FINANCIAL CONDITION

          During fiscal 2001,  Emerson  increased its ownership in SSG to 50.1%.
Accordingly,  Emerson's and SSG's results of operations are consolidated for the
current  year  compared to being  reported on the equity  method for prior years
based  upon the  percentages  of SSG's  equity  owned by  Emerson.  See Item 8 -
"Financial Statements and Supplementary Data - Note 1 and Note 3 of Notes to the
Consolidated Financial Statements".

          Management's  Discussion  and  Analysis  of  Results of  Operation  is
presented  in three parts:  consolidated  operations,  the consumer  electronics
segment and the sporting goods segment.

          In the following discussions, most percentages and dollar amounts have
been rounded to aid presentation. As a result, all figures are approximations.

Consolidated Operations:

          The following  table sets forth,  for the periods  indicated,  certain
items  related to the  consolidated  statements of operations as a percentage of
net revenues.


<PAGE>

<TABLE>
<CAPTION>

          For the Years Ended March 31, 2001, March 31, 2000, and April 2, 1999

                                                        2001              2000                  1999
<S>                                                <C>                  <C>                   <C>
Net revenues  (in thousands)                       $  377,410           $203,701              $160,554
                                                        100.0%             100.0%                100.0%
Cost of sales                                            81.1%              86.8%                 87.4%
Other operating costs and expenses                        1.1%               2.2%                  2.5%
Selling, general and administrative
   Expenses                                              14.2%               8.4%                  8.1%
     Operating income                                     3.6%               2.6%                  2.0%
Equity in earnings of affiliate                           -- %               0.1%                  0.9%
Minority interest in net loss of
    consolidated subsidiary                               0.6%                --%                   --%
     Net income                                           3.4%               1.8%                  0.2%

</TABLE>

Results of Consolidated Operations - fiscal 2001 compared with fiscal 2000

          Net Revenues - Net revenues for fiscal 2001  increased  $173.7 million
(85.3%) as compared to fiscal 2000.  The increase was a result of this being the
first year of consolidation  with SSG ($113 million net revenue increase) and an
increase of $61 million in revenues from the consumer electronics segment.

          Cost of Sales - Cost of sales,  as a percentage  of  consolidated  net
revenues,  decreased  from  86.8% in fiscal  2000 to 81.1% in fiscal  2001.  The
decrease was primarily the result of the consolidation with SSG whose operations
achieve higher gross margins than those of the consumer electronics segment.

<PAGE>

          Other  Operating  Costs  and  Expenses  - Other  operating  costs  and
expenses are associated with the consumer  electronics  segment. As a percent of
net revenues other  operating costs declined from 2.2% in fiscal 2000 to 1.1% in
fiscal 2001,  primarily as a result of lower inventory  carrying  expenses and a
higher revenue base.

          Selling,  General and Administrative  Expenses ("S,G&A") - S,G&A, as a
percentage  of net  revenues,  were 14.2% in fiscal  2001 as compared to 8.4% in
Fiscal 2000,  and in absolute terms were $53.5 million for fiscal 2001 and $17.0
million  for  fiscal  2000.  The  increase  in  S,G&A  was  the  result  of  the
consolidation  with SSG whose  operations  require a higher level of S,G&A costs
than those of the consumer electronics segment.

          Equity In Earnings Of Affiliate  and Minority  Interest in Net Loss of
Consolidated  Subsidiary  - During  fiscal  2001,  Emerson's  investment  in SSG
increased to 50.1%.  Accordingly,  SSG's results of operations  and the minority
interest related to those results have been included in the Company's results of
operations as though it had been  acquired at the beginning of fiscal 2001.  For
fiscal 2000,  Emerson's 33% investment in SSG was accounted for under the equity
method of accounting.  See Item 8 - "Financial Statements and Supplementary Data
- Note 3 of Notes to the Consolidated Financial Statements."

          Net Income - As a result of the foregoing factors,  the Company earned
net income of $12.7  million for fiscal  2001 as  compared  to $3.6  million for
fiscal 2000.

<PAGE>

Consumer Electronics Segment:

          The following table summarizes certain financial  information relating
to the consumer  electronics  segment for the fiscal years 2001,  2000, and 1999
(in thousands):

<TABLE>
<CAPTION>

                                                    2001                    2000                  1999
                                              -----------------     -----------------    -------------------

<S>                                                <C>                    <C>                    <C>
Net revenues                                       $ 264,349              $203,701               $160,554
                                              =================     =================    ===================
Cost of sales                                        225,291               176,870                140,326
Other operating costs                                  4,318                 4,501                  4,007
Selling, general & administrative                     17,418                16,996                 12,943
                                              =================      ================    ===================
     Operating income                                 17,322                 5,334                  3,278

Equity in earnings of affiliate                          --                    277                  1,499
Other investment losses                                  --                   (284)                (2,009)
Interest expense, net                                 (2,051)               (2,284)                (2,272)
                                              ------------------     ----------------    --------------------
     Income before income taxes                       15,271                 3,043                    496
Provision (benefit) for income taxes                   1,142                  (577)                   207

                                              =================     =================    ===================
     Net income                                      $14,129               $ 3,620                   $289
                                              =================     =================    ===================

</TABLE>

Results of Consumer Electronics Operations - fiscal 2001 compared with fiscal
2000

          Net Revenues - Net revenues for fiscal 2001  increased  $60.6  million
(30%) as  compared  to  fiscal  2000.  The  increase  in net  revenues  resulted
primarily  from  increases  in unit  sales of audio  products,  microwave  ovens
products,  and Hello  Kitty(R)  branded  products.  Additionally,  Emerson's  HH
Scott(R)  brand  continued to expand.  Licensing  revenues were $3.9 million for
fiscal  2001 as  compared  to $3.1  million  for fiscal  2000.  The  increase is
attributable  to the following  three  factors:  (i) new licensing  arrangements
being   implemented  in  the  current  fiscal  year;  (ii)  license   agreements
implemented in previous years becoming fully operational; (iii) certain licenses
being modified and expanded.  For fiscal 2002, this trend of increasing  license
revenues is expected to continue.

          Emerson  reports  royalty  and  commission  revenues  earned  from its
licensing  arrangements,  covering various products and territories,  in lieu of
reporting the full dollar value of such sales and associated costs.

          Cost of Sales - Cost of sales,  as a percentage  of  consolidated  net
revenues, was 85.2% and 86.8% in fiscal 2001 and fiscal 2000, respectively.  The
decrease in cost of sales was primarily  attributable  to lower product  returns
and a higher product margin due to product mix.

<PAGE>

          The consumer  electronics  segment gross profit margins continue to be
subject to competitive pressures arising from pricing strategies associated with
the  price  categories  of the  consumer  electronics  market  in which  Emerson
competes.  Emerson's  products are generally placed in the low-to-medium  priced
category of the market,  which has a tendency to be highly competitive.  Emerson
believes that the  combination  of its (i) direct import  program;  (ii) various
license agreements;  (iii) the continued introduction of higher margin products;
(iv) use of inward  license  agreements  such as Hello  Kitty(R) and (v) further
reduction in product  return rates will  continue to favorably  impact its gross
profit margins.

          Other  Operating  Costs  and  Expenses  - Other  operating  costs  and
expenses as a percentage of net revenues  decreased  from 2.2% in fiscal 2000 to
1.6% in fiscal 2001.  The decrease was  primarily  due to the effect of a higher
sales base combined with a reduction in inventory carrying costs.

          Selling,  General and Administrative  Expenses ("S,G&A") - S,G&A, as a
percentage  of net  revenues,  decreased  to 6.6% of net revenues in fiscal 2001
from 8.3% of net revenues in fiscal 2000.  The decrease in S,G&A between  fiscal
2001 and 2000 as a percentage of net revenues was attributable to continued cost
containment programs and the effect of a higher sales base.

          Equity In  Earnings  Of  Affiliate  - During  fiscal  2001,  Emerson's
investment in SSG increased to 50.1%.  Accordingly,  SSG's results of operations
and the minority  interest  related to those  results have been  included in the
Company's  results of operations as though it had been acquired at the beginning
of fiscal 2001.  For fiscal 2000,  Emerson's 33% investment in SSG was accounted
for under the equity method of  accounting.  See Item 8 - "Financial  Statements
and  Supplementary  Data  -  Note  3 of  Notes  to  the  Consolidated  Financial
Statements."

          Other  Investment  Losses - There were no losses  for  fiscal  2001 as
compared  to  $284,000  for  fiscal  2000.  The loss in  fiscal  2000 was due to
write-downs  in  investments  in  joint  ventures,   and  losses  on  marketable
securities which were classified as "available-for-sale".

          Interest  Expense,  net - Interest expense decreased from $2.3 million
in fiscal 2000 to $2.1  million in fiscal 2001.  The  decrease was  attributable
primarily to an increase in interest income.

          Provision for Income Taxes - Emerson's  provision for income taxes was
$1.1  million for fiscal  2001 as  compared to a benefit of $577,000  for fiscal
2000. The provision of $1.1 million  consisted  primarily of foreign and Federal
AMT taxes.  The income tax benefit  recorded for fiscal 2000 was the result of a
favorable  resolution of a tax claim and the acceptance of a compromise offer in
Hong Kong. See Item 8 - "Financial Statements and Supplementary Data - Note 7 of
Notes to the Consolidated Financial Statements".

          Net Income - As a result of the foregoing factors, net income of $14.1
million was earned in fiscal 2001 as compared to $3.6 million in fiscal 2000.

<PAGE>

Results of Consumer Electronics Operations - fiscal 2000 compared with fiscal
1999

          Net Revenues - Net revenues for fiscal 2000  increased  $43.1  million
(27%) as  compared  to  fiscal  1999.  The  increase  in net  revenues  resulted
primarily from increases in unit sales of microwave  ovens and audio products as
well as the  introduction  of the DVD  and  home  office  product  category.  In
addition,  the favorable trend of declining  returned product as a percentage of
sales  continued  for  fiscal  2000,  resulting  from a  continuation  of a more
restrictive  return  policy by  Emerson's  customers.  Revenues  earned from the
licensing  of the  "EMERSON(R)"  trademark  were $3.1 million for fiscal 2000 as
compared to $3.6 million for fiscal 1999. The decrease was  attributable  to the
continued transition towards the Daewoo License Agreement.

          Emerson  reports  royalty  and  commission  revenues  earned  from its
licensing  arrangements,  covering various products and territories,  in lieu of
reporting the full dollar value of such sales and associated costs.

          Cost of Sales - Cost of sales,  as a percentage  of  consolidated  net
revenues, was 86.8% and 87.4% in fiscal 2000 and fiscal 1999, respectively.

          Other  Operating  Costs  and  Expenses  - Other  operating  costs  and
expenses as a percentage of net revenues  decreased  from 2.5% in fiscal 1999 to
2.2% in fiscal  2000.  The decrease  was  primarily  due to decreases in freight
charges.

          Selling,  General and Administrative  Expenses ("S,G&A") - S,G&A, as a
percentage  of net  revenues,  were 8.3% in fiscal  2000 as  compared to 8.1% in
fiscal  1999.  The  increase  was  primarily  due to  increased  litigation  and
cooperative  advertising costs,  offset somewhat by the effect of a higher sales
base.

          Equity In Earnings Of  Affiliate -  Emerson's  33%  investment  in the
earnings of SSG amounted to $277,000 for fiscal 2000 and $1.5 million for fiscal
1999.  Emerson's  investment  increased to 33% from 31% in fiscal 1999 due to an
additional  investment by Emerson of SSG's shares and through a reduction of SSG
shares outstanding resulting from a SSG stock buyback program.

          Other Investment  Losses - Other  investment  losses were $284,000 for
fiscal 2000 as compared to  $2,009,000  for fiscal  1999.  The decrease in other
investment  losses  between  fiscal 2000 and fiscal 1999 was  attributable  to a

<PAGE>

reduction in the loss resulting from  write-downs on investments and advances to
joint  ventures  from  $900,000 in fiscal 1999 to  $135,000 in fiscal  2000.  In
addition,   losses  on   marketable   securities   which  were   classified   as
"available-for-sale"  securities,  decreased from  $1,109,000 for fiscal 1999 to
$149,000 in fiscal 2000.

          Interest Expense - Interest expense did not change  significantly from
fiscal 1999 to fiscal 2000.  Emerson's reduced average borrowings were offset by
higher borrowing costs.

          Provision for Income Taxes - Emerson's income tax benefit was $577,000
for fiscal  2000 as compared to a provision  of $207,000  for fiscal  1999.  The
income  tax  benefit  recorded  for fiscal  2000 was the  result of a  favorable
resolution of a tax claim and the acceptance of a compromise offer in Hong Kong.
See Item 8 - "Financial  Statements and Supplementary  Data - Note 7 of Notes to
the Consolidated Financial Statements".

          Net Income - As a result of the foregoing  factors,  Emerson generated
net income of $3.6  million for fiscal  2000 as compared to $289,000  for fiscal
1999.

Sporting Goods Segment:

          The following table summarizes certain financial  information relating
to the sporting  goods  segment for the fiscal  years ended March 31, 2001,  and
March 31,  2000.  The  results of  operations  of SSG for  fiscal  2000 were not
consolidated  with  Emerson's  results of  operations  for fiscal 2000,  but are
presented for comparative purposes (in thousands):

                                                  2001                   2000
                                             ---------------       -------------
                                                                    (Unaudited)

    Net revenues                            $    113,061           $  116,521
                                             ==============         ============

   Cost of sales                                  80,809               78,602

   Selling, general & administrative              35,880               33,114

                                             ==============         ============
   Operating income (loss)                        (3,628)               4,805

   Interest expense, net                          (2,017)              (1,595)
                                             ==============         ============

   Income (loss) before income

         Taxes                                    (5,645)               3,210

   Provision (benefit) for income                 (2,086)               1,127
                                             ---------------        ------------
         Taxes
       Net (loss)  income                  $      (3,559)          $    2,083
                                             ===============         ===========


Results of Sporting Goods Operations - Fiscal 2001 compared with Fiscal 2000

          Net  Revenues - Net revenues  for fiscal 2001  decreased  $3.5 million
(3%) as compared to fiscal 2000.  The  decrease in net revenues was  primarily a
result of competitive pressures in the marketplace,  a decline in youth baseball
registrations,  unusually cold and wet weather in warm weather  states  delaying
spring  sports,  a reduction in SSG's sales force,  a reduction in the number of
catalogs mailed, and a general slow-down in the economy.

<PAGE>

          Cost of  Sales - Cost  of  sales,  as a  percentage  of net  revenues,
increased  from 67.5% for fiscal  2000 to 71.5% for fiscal  2001.  Cost of sales
increased as a percentage  of net revenues due to product mix shifts and pricing
pressure  in the  institutional  sporting  goods  marketplace.  SSG  expects  to
continue to experience a higher cost of sales as a percentage of net revenues as
compared to prior results due to these factors.

          Selling,   General  and  Administrative  Expenses  ("S,G&A")  -  S,G&A
expenses for fiscal 2001  increased  by  approximately  $2.8  million  (8.4%) as
compared  to fiscal  2000.  The  increase in expenses  was  primarily  due to an
increase in payroll,  computer  related costs,  depreciation  and  amortization,
promotional and facility costs.

          Interest  Expense,  net - Interest  expense,  net increased  from $1.6
million  in  fiscal  2000 to $2.0  million  in fiscal  2001.  The  increase  was
attributable primarily to increased overall levels of borrowing.

          Provision  for  Income  Taxes - SSG  recorded  a tax  benefit  of $2.1
million  for fiscal  2001 as compared  to a tax  provision  of $1.1  million for
fiscal 2000.  The tax benefit for fiscal 2001 resulted from the  utilization  of
net operating loss carryforwards.

          Net  (loss)  income  - As a  result  of  the  foregoing  factors,  SSG
generated  a net loss of $3.6  million for fiscal 2001 as compared to net income
of $2.1 million for fiscal 2000, of which  approximately a $1.3 million loss was
reflected in the Company's  consolidated  statements  of  operations  for fiscal
2001.

Liquidity and Capital Resources

          Net cash provided by operating  activities was $9.8 million for fiscal
2001.  Cash was primarily  provided by an increase in the  profitability  of the
Company,  a reduction of accounts  receivables and other  receivables  partially
offset by an increase in inventory.

          Net cash used by  investing  activities  was $2.5  million  for fiscal
2001. Cash was utilized  primarily for additional  purchases of shares of common
stock of SSG. See Item 8 - "Financial Statements and Supplementary Data - Note 3
of Notes to the Consolidated Financial Statements."

          Net cash used for  financing  activities  was $7.8  million for fiscal
2001.  Cash was primarily  utilized for the purchase of the Company's  stock for
treasury, partially offset by increased borrowings.

          Emerson and SSG maintain  asset-based credit facilities of $10 million
and $25 million, respectively.  These facilities provide for revolving loans and
letters of credit,  subject to certain limits which,  in the  aggregate,  cannot
exceed  the  lesser  of $10  million  and  $25  million  for  Emerson  and  SSG,
respectively,  or a "Borrowing  Base" amount based on specified  percentages  of
eligible  accounts  receivable and inventories.  Emerson and SSG are required to

<PAGE>

maintain certain net worth levels, which they were both in compliance with as of
March 31, 2001.  At March 31, 2001,  there were  approximately  $5.1 million and
$17.1  million  of  borrowings  under  these  facilities  by  Emerson  and  SSG,
respectively.  No letters of credit were outstanding by either Emerson or SSG as
of March 31, 2001.

          The Company's Hong Kong subsidiary  currently maintains various credit
facilities,  as  amended,  aggregating  $40.0  million  with a bank in Hong Kong
consisting  of the  following:  (i) a $5.0  million  credit  facility  which  is
generally  used for  letters of credit for  inventory  purchases  and (ii) a $35
million credit facility,  for the benefit of a foreign subsidiary,  which is for
the  establishment  of  back-to-back  letters of credit.  At March 31, 2001, the
Company's Hong Kong subsidiary  pledged $1.75 million in certificates of deposit
to this bank to assure the availability of the $5.0 million credit facility.  At
March  31,  2001,  there  were  approximately  $3.8  million  and $7.3  million,
respectively, of letters of credit outstanding under these credit facilities.

          The Company has continued to enter into outward  licensing  agreements
and intends to pursue additional licensing  opportunities.  The Company believes
that such  licensing  activities  will have a continued  positive  impact on net
operating  results by generating  royalty income with minimal costs, if any, and
without  the  necessity  of  utilizing  working  capital or  accepting  customer
returns. See Item 1 - Business - "Licensing and Related Activities".

          Short-Term  Liquidity.  Cash decreased to $8.0 million as of March 31,
2001 from $8.5 million as of March 31, 2000.  Cash generated from operations was
offset by Emerson's  repurchase of shares of its outstanding  common stock,  its
increased  investment  in SSG,  and  increased  inventory  levels.  At  present,
management  believes that future cash flow from operations and the institutional
financing  noted  above will be  sufficient  to fund all of the  Company's  cash
requirements  for the next fiscal year.  In fiscal 2001,  products  representing
approximately  80% of net  revenues of the  consumer  electronics  segment  were
imported  directly to the  Company's  customers.  The direct  import  program is
essential to Emerson's liquidity objectives.

          The Company is  currently  in arrears on $977,000 of  dividends on its
Series A Preferred Stock.

          The  Company's  liquidity  for its  consumer  electronics  segment  is
impacted by the seasonality of its business.  The consumer  electronics  segment
generally  records  the  majority  of its annual  sales in the  quarters  ending
September  and December.  This  requires the consumer  goods segment to maintain
higher inventory levels during the quarters ending June and September, therefore
increasing  the working  capital needs during these periods.  Additionally,  the
consumer  electronics segment receives the largest percentage of product returns
in the quarter  ending  March.  The higher  level of returns  during this period
adversely impacts Emerson's  collection  activity,  and therefore its liquidity.
Management  believes  that the license  agreements as discussed  above,  and the
policies in place for returned products, should continue to favorably impact its
cash flow.

          The  Company's  liquidity  for  its  sporting  goods  segment  is also
impacted  by the  seasonality  of  its  business.  The  sporting  goods  segment
generally  records the majority of its annual sales in the March  quarter,  with
the weakest quarter being the December quarter. This requires the sporting goods
segment to maintain higher amounts of inventory during the quarters ending March
and June, therefore increasing the working capital needs during these periods.

<PAGE>

          Long-Term   Liquidity.   The  Company   continues  to  be  subject  to
competitive  pressures  arising from pricing  strategies.  SSG has  discontinued
certain lower margin  products in favor of higher margin  replacement  products.
Management  believes that this, together with its various license agreements and
the continued  introduction  of higher margin  products in both  segments,  will
result in continued  profitability.  Both senior secured  credit  facilities for
Emerson and SSG impose  financial  covenants.  Non-compliance  of the  covenants
could materially affect the Company's future liquidity. Management believes that
anticipated cash flow from operations and the financing noted above will provide
sufficient  liquidity  to meet the  Company's  operating  and debt  service cash
requirements on a long-term basis.

          There were no substantial  commitments for purchase orders outside the
normal purchase orders used to secure product as of March 31, 2001.


Recently-Issued Financial Accounting Pronouncements

          In  June  1998,  the  Financial   Accounting  Standards  Board  issued
Statement  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities" (SFAS 133), as amended, which we adopted on September 30, 2000. SFAS
133  requires  that all  derivatives  be recorded  on the balance  sheet at fair
value.  Changes in  derivatives  that are not hedges are  adjusted to fair value
through income.  Changes in derivatives that meet the Statement's hedge criteria
will either be offset  through  income,  or  recognized  in other  comprehensive
income until the hedged item is recognized in earnings. The adoption of SFAS 133
for fiscal 2001 did not have any impact on our financial  condition,  results of
operations or cash flows.

          In  December  1999,  the  Securities  and  Exchange  Commission  staff
released Staff Accounting  Bulletin No. 101,  "Revenue  Recognition in Financial
Statements"  ("SAB  No.  101"),  which  provides  guidance  on the  recognition,
presentation  and  disclosure  of revenue in financial  statements.  The Company
adopted SAB No. 101 in the fourth  quarter of fiscal 2001.  SAB No. 101 requires
the Company to report its estimated sales return on a gross basis rather than on
a   previously   utilized   net  basis.   SAB  No.  101   required   prior  year
reclassifications  to  conform  with the new  presentation,  which  resulted  in
offsetting  reclassifications  in net  revenues  and cost of sales,  but did not
impact  operating   income  as  reported  on  the  Consolidated   Statements  of
Operations.  Accordingly,  for fiscal 2001,  fiscal 2000,  and fiscal 1999,  net
revenues  were  increased  by  $1.3  million,  decreased  by $1.3  million,  and
increased by $1.8 million, respectively.

          During fiscal 2001, the Company  adopted the provisions of EITF 00-10,
Accounting  for Shipping and Handling Fees and Costs.  Prior to fiscal 2001, SSG
netted shipping fees against  shipping costs. The net difference was included in
cost of sales in the  consolidated  statements of operations.  The provisions of
EITF 00-10 provide that all amounts  billed to a customer in a sale  transaction
related to shipping and  handling,  if any,  represent  revenues  earned for the
goods  provided and should be  classified  as revenue.  Accordingly,  for fiscal
2001,  approximately $5.6 million of shipping and handling fees was reclassified
in the  consolidated  statement of  operations.  The fiscal 2000 and fiscal 1999

<PAGE>

were not restated  because this EITF only  affected the sporting  goods  segment
which was not included in the  consolidated  statement of operations  for fiscal
2000 or fiscal 1999.

Forward-Looking Information

          This report  contains  various  forward-looking  statements  under the
Private  Securities  Litigation  Reform  Act of  1995  (the  "Reform  Act")  and
information that is based on Management's beliefs as well as assumptions made by
and information currently available to management. When used in this report, the
words "anticipate",  "believe",  "estimate", "expect", "predict", "project", and
similar expressions are intended to identify  forward-looking  statements.  Such
statements are subject to certain risks,  uncertainties and assumptions.  Should
one or more of these risks or uncertainties  materialize,  or should  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
anticipated,  expected  or  projected.  Among the key  factors  that could cause
actual  results to differ  materially  are as  follows:  (i) the  ability of the
consumer  electronics segment to continue selling products to two of its largest
customers whose net revenues represented 41% and 14% of fiscal 2001 consolidated
net revenues; (ii) reduced sales to the United States Government by the sporting
goods  segment,  due to a reduction in Government  spending;  (iii)  competitive
factors  in the  consumer  electronics  segment,  such  as  competitive  pricing
strategies  utilized by retailers in the domestic  marketplace  that  negatively
impacts product gross margins;  (iv) the ability of the consumer electronics and
sporting  goods  segments to maintain its  suppliers,  primarily all of whom are
located in the Far East for the consumer electronics segment; (v) the ability of
the  sporting  goods  segment to have an  uninterrupted  shipping  service  from
outside carriers, such as United Parcel Service; (vi) the ability of the Company
to comply with the restrictions imposed upon it by its outstanding indebtedness;
and  (vii)  general   economic   conditions  and  other  risks.   Due  to  these
uncertainties  and risks,  readers are cautioned not to place undue  reliance on
these  forward-looking  statements,  which  speak  only  as of the  date of this
report.  For  additional  risk  factors  as they  relate to the  sporting  goods
segment,  see SSG's Form 10-K for the fiscal  year ended March 31, 2001 Item 7 -
"Certain  Factors  that May Affect the  Company's  Business or Future  Operating
Results".

Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

            MARKET RISK.

Inflation, Foreign Currency, and Interest Rates

          Neither inflation nor currency  fluctuations had a significant  effect
on the  Company's  results of  operations  during  fiscal  2001.  The  Company's
exposure to currency  fluctuations  has been minimized by the use of U.S. dollar
denominated  purchase  orders,  and by  sourcing  production  in more  than  one
country.  The  consumer  electronics  segment  purchases  virtually  all  of its
products from manufacturers located in various Asian countries.

          The interest on borrowings  under the Company's  credit  facilities is
based on the prime rate.  While a significant  increase in interest  rates could
have an adverse  effect on the financial  condition and results of operations of
the  Company,  management  believes  that given the  present  economic  climate,
interest  rates are not  expected  to increase  significantly  during the coming
year.

<PAGE>

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Index to Financial Statements
                                                                        Page No.
          Report of Independent Auditors                                      27
          Consolidated Statements of Operations for the years ended
              March 31, 2001, March 31, 2000, and April 2, 1999               28
          Consolidated Balance Sheets as of March 31, 2001 and 2000           29
          Consolidated Statements of Changes in Shareholders' Equity
              for the years ended March 31, 2001, March 31, 2000,
              and April 2,1999                                                30
          Consolidated Statements of Cash Flows for the years ended
              March 31, 2001, March 31, 2000, and April 2, 1999               31
          Notes to Consolidated Financial Statements                          32
          Schedule VIII-Valuation and Qualifying Accounts and Reserves        61
          All other schedules are omitted because they are not
              applicable or the required information is shown in the
              financial statements or notes thereto.

<PAGE>


                         REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Shareholders
of Emerson Radio Corp.


          We have  audited  the  accompanying  consolidated  balance  sheets  of
Emerson Radio Corp.  and  Subsidiaries  as of March 31, 2001 and March 31, 2000,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the three years in the period ended March 31,  2001.  Our
audits also included the  financial  statement  schedule  listed in the Index at
Item 14(a)(1). These financial statements and schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

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

          In our opinion,  the  consolidated  financial  statements  referred to
above present  fairly,  in all material  respects,  the  consolidated  financial
position of Emerson Radio Corp. and Subsidiaries at March 31, 2001 and March 31,
2000, and the consolidated  results of its operations and cash flows for each of
the  three  years in the  period  ended  March  31,  2001,  in  conformity  with
accounting  principles  generally  accepted in the United  States.  Also, in our
opinion,  the related financial statement schedule,  when considered in relation
to the  basic  financial  statements  taken as a whole,  presents  fairly in all
material respects the information set forth therein.



                                                         ERNST & YOUNG LLP


New York, New York
June 11, 2001

<PAGE>
<TABLE>
<CAPTION>

                      EMERSON RADIO CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
      For The Years Ended March 31, 2001, March 31, 2000, and April 2, 1999
                      (In thousands, except per share data)


                                                                      2001                  2000                 1999
                                                                -----------------     ------------------    ----------------

<S>                                                                <C>                   <C>                  <C>
Net revenues                                                       $ 377,410             $ 203,701            $  160,554

Costs and expenses:

     Cost of sales                                                   306,101              176,870                140,326
     Other operating costs and expenses                                4,318                 4,501                 4,007
     Selling, general and administrative expenses                     53,498                16,996                12,943
                                                                -----------------     ------------------    ----------------
                                                                     363,917               198,367               157,276
                                                                -----------------     ------------------    ----------------
Operating  income                                                     13,493                 5,334                 3,278

     Equity in earnings of affiliate                                     --                    277                 1,499
     Other investment losses                                             --                   (284)               (2,009)
     Interest expense, net                                            (4,068)               (2,284)               (2,272)
      Minority interest in net loss of consolidated
          subsidiary                                                   2,284                   --                   --
                                                                -----------------     ------------------    ----------------
    Income before income taxes                                        11,709                 3,043                   496

     Provision (benefit) for income taxes                               (944)                 (577)                  207
                                                                -----------------     ------------------    ----------------
Net income                                                      $     12,653            $    3,620              $    289
                                                                =================     ==================    ================

Net income (loss) per common share

     Basic                                                      $       .36            $       .07              $  ( .01)
     Diluted                                                            .33                    .07                 ( .01)

Weighted average shares outstanding

     Basic                                                           35,066                 47,632                49,398
     Diluted                                                         38,569                 53,508                49,398


                        The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>


<TABLE>
<CAPTION>

<PAGE>

                      EMERSON RADIO CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                          As of March 31, 2001 and 2000
                        (In thousands, except share data)
 ASSETS                                                                                          2001                    2000
                                                                                            -----------------       ---------------

Current Assets:
<S>                                                                                         <C>                     <C>
   Cash and cash equivalents                                                                $    7,987              $    8,539
   Accounts receivable (less allowances of
     $4,498 and $3,977,  respectively)                                                          26,552                  10,271
   Other receivables                                                                               781                   4,027
   Inventories                                                                                  44,477                  14,384
   Prepaid expenses and other current assets                                                     3,611                   2,690
   Deferred tax assets                                                                           1,419                     --
                                                                                            -----------------       ---------------
     Total current assets                                                                       84,827                  39,911
Property, plant, and equipment                                                                  12,718                   1,034
Deferred catalog expenses                                                                        2,437                    --
Investment in affiliate                                                                           --                    20,133
Goodwill and other intangible assets                                                            13,388                   1,177
Deferred tax assets                                                                              4,081                    --
Other assets                                                                                     1,555                   1,256
                                                                                            -----------------       ---------------
           Total Assets                                                                     $  119,006                $ 63,511
                                                                                            =================       ===============

         LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Short-term borrowings                                                                    $    5,094             $     2,914
   Current  maturities of long-term  borrowings                                                    139                      97
   Accounts payable and other current liabilities                                               34,703                  22,014
   Accrued sales returns                                                                         4,913                   4,897
   Income taxes payable                                                                            481                     135
                                                                                            -----------------       ---------------
     Total current liabilities                                                                  45,330                  30,057
Long-term borrowings                                                                            38,257                  20,891
Minority interest                                                                               20,288                    --

Shareholders' Equity:
   Preferred shares - 10,000,000 shares authorized; 3,677
         shares issued and outstanding,                                                         3,310                   3,310
   Common shares -- $.01 par value, 75,000,000 shares authorized;
         51,475,511 and 51,331,615 shares issued; 31,343,978 and 46,477,615
         shares outstanding, respectively                                                         515                     513
   Capital in excess of par value                                                             113,459                 113,289
   Accumulated other comprehensive losses                                                        (118)                    (76)
   Accumulated deficit                                                                        (88,843)              ( 101,445)
   Treasury stock, at cost, 20,131,533 and 4,854,000 shares, respectively                     (13,192)                 (3,028)
                                                                                            -----------------       ---------------
     Total shareholders' equity                                                                15,131                  12,563
                                                                                            -----------------       ---------------
           Total Liabilities and Shareholders' Equity                                       $ 119,006              $  63,511
                                                                                            =================       ===============


 The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                      EMERSON RADIO CORP. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
      For The Years Ended March 31, 2001, March 31, 2000 and April 2, 1999
                        (In thousands, except share data)
                                                                                            Accumulated   Unrealized
                                            Common Shares Issued               Capital        Other          Loss        Total
                                  Preferred    Number     Par     Treasury   In excess of  Comprehensive  Accumulated  Shareholders
                                   Stock     of Shares    Value    Stock     Par Value       Losses        Deficit       Equity
                                  --------- -----------  -------  --------  ------------   ------------   ------------  ------------

<S>                               <C>        <C>          <C>      <C>       <C>             <C>           <C>          <C>
Balance-April 3, 1998             $ 4,713    51,044,730  $ 510     $ --      $ 113,201       $  197       $ (104,673)   $ 13,948

   Issuance of common stock
      upon conversion of
      preferred stock                 (90)      286,885      3                      87
    Purchase of treasury stock
                                                                  (1,907)                                                 (1,907)
    Purchase of preferred stock    (1,280)
                                                                                                                (407)     (1,687)
    Preferred stock dividends
      Declared                                                                                                  (171)       (171)

   Comprehensive income:
        Net income for the year                                                                                  289         289
        Currency translation
           adjustment                                                                          (275)                        (275)
                                                                                                                         ---------
        Comprehensive income                                                                                                  14
                                  ---------  ----------   -----  -----------  ---------     ----------      ---------    ---------
Balance - April 2, 1999             3,343    51,331,615    513    (1,907)       113,288          (78)       (104,962)     10,197
    Purchase of treasury stock
                                                                  (1,121)                                                 (1,121)
    Purchase of preferred stock       (33)                                            1                                      (32)

    Preferred stock dividends
      Declared
                                                                                                                (103)       (103)
   Comprehensive income:
        Net income for the year                                                                                3,620       3,620
        Currency translation
           adjustment                                                                              2                           2
                                                                                                                           -------
        Comprehensive income                                                                                               3,622
                                  ---------  ----------   -----  -----------    --------     ----------    ----------    ---------
Balance - March 31, 2000           3,310     51,331,615    513     (3,028)      113,289          (76)       (101,445)     12,563

    Purchase of treasury stock                                    (10,164)                                               (10,164)
    Exercise  of  stock  options
        and warrants                            143,896      2                      170                                      172
    Preferred stock dividends
      Declared                                                                                                  ( 51)       ( 51)
   Comprehensive income:
        Net income for the year                                                                               12,653      12,653
        Currency translation adjustment                                                           (5)                         (5)
         Unrealized loss
                                                                                                 (37)                        (37)
         Comprehensive income                                                                                             --------
                                                                                                                          12,611
                                ---------    ----------  ------  ---------    ---------      --------      ----------   ----------
Balance - March 31, 2001         $ 3,310     51,475,511    515   $(13,192)    $ 113,459      $  (118)      $ (88,843)   $ 15,131
                                =========    ==========  ======  =========    =========      ========      ==========   ==========
        The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                      EMERSON RADIO CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
      For The Years Ended March 31, 2001, March 31, 2000, and April 2, 1999
                                 (In thousands)
                                                                              2001                   2000                  1999
                                                                       ------------------    -------------------     ---------------
<S>                                                                     <C>                    <C>                    <C>
Cash Flows from Operating Activities:
   Net income                                                           $     12,653           $     3,620            $      289
   Adjustments to reconcile net income to net
      cash provided by operating activities:
      Minority interest                                                       (2,284)                   --                    --
      Depreciation and amortization                                            2,729                 1,306                 1,245
      Equity in earnings of affiliate                                          1,476                  (277)               (1,499)
      Write-down of investment in joint venture                                 --                     153                   900
      Loss on marketable securities                                             --                     149                 1,298
      Asset valuation and loss reserves                                         (284)                  626               ( 1,375)
      Other                                                                      (42)                    2                  (275)
      Changes in assets and liabilities, net of acquisition of  SSG:
         Accounts receivable                                                   3,966                   917                   160
         Other receivables                                                     3,534                 2,755                  (308)
         Inventories                                                          (9,463)               (2,970)                1,021
         Prepaid expenses and other current assets                               (74)                  186                  (460)
         Other assets                                                             84                   493                   699
         Accounts payable and other current liabilities                       (2,876)                 (328)                3,382
         Income taxes payable                                                    346                  (265)                  209
                                                                       ------------------     ------------------     ---------------
Net cash provided by operations                                                9,765                 6,367                 5,286
                                                                       ------------------     ------------------     ---------------

Cash Flows from Investing Activities:
   Purchase of SSG, net of cash acquired of $1,271                            (2,378)                  --                    --
   Proceeds from (investment in) marketable securities                           --                   552                (2,036)
   Investment in affiliates                                                      --                  (841)                  (91)
   Additions to property and equipment                                          (110)                (462)                 (413)
   Distributions from joint venture                                              --                   213                   241
                                                                       ------------------     ------------------     ---------------
Net cash (used) provided by investing activities                              (2,488)                (538)               (2,299)
                                                                       ------------------     ------------------     ---------------

Cash Flows from Financing Activities:
   Net borrowings under line of credit   facility                              2,180                  698                 2,216
   Long-term borrowings (retirement)                                             (37)                  47                   (35)
   Payment of  dividend on preferred stock                                       (13)                 (26)                 (407)
   Purchase of preferred and common stock                                   ( 10,164)              (1,153)               (3,187)
   Exercise of stock options and warrants                                        172
   Other                                                                          33                   44                   (82)
                                                                       ------------------     ------------------     ---------------
Net cash used by financing activities                                         (7,829)                 (390)              (1,495)
                                                                       ------------------     ------------------     ---------------
Net increase (decrease) in cash and cash equivalents                          (  552)                5,439                 1,492
Cash and cash equivalents at beginning of year                                 8,539                 3,100                 1,608
                                                                       ------------------     ------------------     ---------------
Cash and cash equivalents at end of year                               $       7,987          $      8,539            $    3,100
                                                                       ==================     ==================     ===============
Supplemental disclosure of cash flow information:
  Cash paid for interest                                               $       4,102            $    2,137            $    2,109

                                                                       ==================     ==================     ===============
  Cash paid for income taxes                                           $        784           $         11            $       32
                                                                       ==================     ==================     ===============

                            The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>

<PAGE>

                      EMERSON RADIO CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001


Note 1 -- Significant Accounting Policies:

Background and Basis of Presentation

          The consolidated  financial statements include the accounts of Emerson
Radio Corp.  ("Emerson",  consolidated - the  "Company") and its  majority-owned
subsidiaries,  including  SSG. All  significant  intercompany  transactions  and
balances have been eliminated.

          The Company operates in two business  segments:  consumer  electronics
and sporting goods. The consumer electronics segment,  designs, sources, imports
and markets a variety of consumer electronic products and licenses the "EMERSON"
trademark for a variety of products  domestically and internationally to certain
licensees. The sporting goods segment, which is operated through Emerson's 50.1%
ownership of Sport Supply Group, Inc.  ("SSG"),  manufactures and markets sports
related equipment and leisure products to institutional  customers in the United
States.

          Prior to March 23, 2001,  Emerson  accounted for its investment in SSG
using the equity method of  accounting.  On March 23, 2001,  Emerson  obtained a
controlling  interest in SSG and is  accounting  for this  interest as a partial
purchase to the extent of the change in control.  The assets and  liabilities of
SSG have been revalued to fair value to the extent of Emerson's  50.1%  interest
in SSG. The Company's  50.1% interest in the fair value of  identifiable  assets
acquired less liabilities  assumed  exceeded the Company's  investment in SSG by
$1.9  million and has been  recorded as a reduction  of acquired  goodwill to be
amortized  using the  straight-line  method  over 20  years.  SSG's  results  of
operations and the minority interest related to those results have been included
in the  Company's  results of  operations  as though it had been acquired at the
beginning of the year ended March 31, 2001.

          The  preparation  of  the  financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could materially differ from those estimates.

          Certain  reclassifications  were made to conform prior years financial
statements to the current presentation.

<PAGE>

Cash Equivalents

          Short-term  investments  with  original  maturities of three months or
less at the time of purchase are considered to be cash equivalents.

Fair Values of Financial Instruments

          The carrying  amounts for cash and cash  equivalents,  trade  accounts
receivable,  accounts payable and accrued liabilities approximate fair value due
to the  immediate to short-term  maturity of these  financial  instruments.  The
carrying  amounts of bank debt approximate this fair value due to their variable
rate interest  features.  The fair value of the preferred  stock is based on the
fair value of the common stock into which the  preferred  stock is  convertible.
The carrying value of the debentures approximate fair value.

Investments

          The Company  determines the appropriate  classifications of securities
at the time of purchase.  The investments  held by the Company at March 31, 2001
and 2000 were classified as "available-for-sale securities", and are included in
prepaid  expenses  and other  current  assets.  Realized  gains and  losses  are
reported  separately  as a component of income.  Declines in the market value of
securities deemed to be other than temporary are included in earnings.

Concentrations of Credit Risk

          Certain  financial  instruments  potentially  subject  the  Company to
concentrations of credit risk. Accounts receivable for the consumer  electronics
segment  represent sales to retailers and  distributors of consumer  electronics
throughout  the United States and Canada.  Accounts  receivable for the sporting
goods  segment  represent  sales to all  levels of public and  private  schools,
colleges,  universities,  and military  academies,  municipal  and  governmental
agencies,  military facilities,  churches, clubs, camps, hospitals, youth sports
leagues,  non-profit  organizations,  team  dealers  and  certain  large  retail
sporting goods chains. The Company  periodically  performs credit evaluations of
its customers but generally does not require  collateral.  The Company  provides
for any  anticipated  credit  losses  in the  financial  statements  based  upon
management's estimates and ongoing reviews of recorded allowances.

Depreciation, Amortization and Valuation of Property and Intangibles

          Property and equipment,  stated at cost, are being  depreciated by the
straight-line method over their estimated useful lives.  Leasehold  improvements
are  amortized on a  straight-line  basis over the shorter of the useful life of
the improvement or the term of the lease. The cost of maintenance and repairs is

<PAGE>

charged  to  expense as  incurred.  Significant  renewals  and  betterments  are
capitalized and  depreciated  over the remaining  estimated  useful lives of the
related assets.

          Depreciation  of  property,  plant and  equipment  is  provided by the
straight-line method as follows:

     Buildings                                         Thirty to forty years
     Machinery and Equipment                           Five years to ten years
     Computer Equipment and Software                   Three years to ten years
     Furniture & Fixtures and Office Equipment         Five years to seven years

Intangible Assets

          Goodwill  and  other   intangible   assets  relates  to  acquisitions.
Trademarks  and  servicemarks  relate to costs  incurred in connection  with the
licensing  agreements  for the use of certain  trademarks  and service  marks in
conjunction  with the sale of our products.  Other items  classified as goodwill
and other  intangible  assets consist of patents,  websites,  customer base, and
workforce.

          Amortization  of  intangible  assets is provided by the  straight-line
method as follows:

Cost in excess of identifiable net assets acquired   Principally thirty to forty
years

  Trademarks and servicemarks                              Five to forty years
  Patents                                                  Seven to eleven years

          Management  periodically  assesses the  recoverability of the carrying
value of intangible  assets.  The carrying  value of intangible  assets would be
reduced to fair value if it is  probable  that  management's  best  estimate  of
future operating income before  amortization of identifiable assets will be less
than the carrying value over the remaining amortization period.

Revenue Recognition

          Revenues are  recognized  upon  shipment of inventory  and an estimate
against  revenues for possible  returns  based upon  historical  return rates is
recorded.  Subject to certain limitations,  customers have the right to return a
product  within a set period if they are not completely  satisfied.  The Company
believes sales are final upon shipment of inventory.

<PAGE>

Foreign Currency

          The  assets  and  liabilities  of  foreign   subsidiaries   have  been
translated at current  exchange  rates,  and related  revenues and expenses have
been translated at average rates of exchange in effect during the year.  Related
translation  adjustments are reported as a separate  component of  shareholders'
equity.  Losses resulting from foreign currency transactions are included in the
Consolidated Statements of Operations.

          The Company does not enter into foreign currency exchange contracts to
hedge its exposures related to foreign currency fluctuations.

Advertising and Deferred Catalog Expenses

          Advertising expenses are charged to operations as incurred, except for
production costs related to direct-response  advertising  activities,  which are
capitalized.  Direct response advertising pertains to the sporting goods segment
of  the  Company,  which  consists  primarily  of  catalogs.  Production  costs,
primarily printing and postage, associated with catalogs are amortized using the
straight-line  method over twelve months which approximates average usage of the
catalogs produced.

Advertising  expenses  for the  fiscal  2001,  2000 and 1999 were  approximately
$7,347,000, $3,077,000, and $1,459,000, respectively.

Internet Expenses

          We  expense  the  operating  and  development  costs  of our  Internet
websites as incurred.

Income Taxes

          Deferred tax assets and liabilities are determined annually based upon
the estimated future tax effects of the differences in the tax bases of existing
assets and liabilities and the related  financial  statement  carrying  amounts,
using currently enacted tax laws and rates.

<PAGE>

Net Earnings Per Common Share

          Net  earnings  per share of common  share are based upon the  weighted
average number of common and common equivalent shares  outstanding.  Outstanding
stock options are treated as common stock equivalents when dilution results from
their assumed exercise.

Stock- Based Compensation

          The  Company  and  its   subsidiaries   have  chosen  to  account  for
stock-based  compensation  plans using the intrinsic value method.  Accordingly,
the  compensation  cost for stock options is measured as the excess,  if any, of
the quoted market prices of the  respective  stock at the date of grant over the
amount an employee must pay to acquire the stock. See Note 9.

Recent Pronouncements

          In  June  1998,  the  Financial   Accounting  Standards  Board  issued
Statement  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities"  (SFAS 133),  as amended,  which the Company  adopted  during fiscal
2001. SFAS 133 requires that all derivatives be recorded on the balance sheet at
fair  value.  Changes in  derivatives  that are not hedges are  adjusted to fair
value through income.  Changes in derivatives  that meet the  Statement's  hedge
criteria  will  either  be  offset  through  income,   or  recognized  in  other
comprehensive  income  until the hedged  item is  recognized  in  earnings.  The
adoption  of SFAS 133 for fiscal  2001 did not have any impact on our  financial
condition, results of operations or cash flows.

          In  December  1999,  the  Securities  and  Exchange  Commission  staff
released Staff Accounting  Bulletin No. 101,  "Revenue  Recognition in Financial
Statements"  ("SAB  No.  101"),  which  provides  guidance  on the  recognition,
presentation  and  disclosure  of revenue in financial  statements.  The Company
adopted SAB No. 101 in the fourth  quarter of fiscal 2001.  SAB No. 101 requires
the Company to report its estimated sales return on a gross basis rather than on
a   previously   utilized   net  basis.   SAB  No.  101   required   prior  year
reclassifications  to  conform  with the new  presentation,  which  resulted  in
offsetting  reclassifications  in net  revenues  and cost of sales,  but did not
impact the  operating  income as  reported  on the  Consolidated  Statements  of
Operations.  Accordingly,  for fiscal 2001,  fiscal 2000,  and fiscal 1999,  net
revenues  were  increased  by  $1.3  million,  decreased  by $1.3  million,  and
increased by $1.8 million, respectively.

<PAGE>

          During fiscal 2001, the Company  adopted the provisions of EITF 00-10,
"Accounting for Shipping and Handling Fees and Costs". Prior to fiscal 2001, SSG
netted shipping fees against  shipping costs. The net difference was included in
cost of sales in the  consolidated  statements of operations.  The provisions of
EITF 00-10 provide that all amounts  billed to a customer in a sale  transaction
related to shipping and  handling,  if any,  represent  revenues  earned for the
goods  provided and should be  classified  as revenue.  Accordingly,  for fiscal
2001,  approximately $5.6 million of shipping and handling fees was reclassified
in the  consolidated  statement of  operations.  The fiscal 2000 and fiscal 1999
were not restated  because EITF 00-10 only  affected the sporting  goods segment
which was not included in the  consolidated  statement of operations  for fiscal
2000 or fiscal 1999.

Change in Accounting Period


          For the fiscal years 1999 and 2000, the Company's  financial reporting
year  ended on the  Friday  closest  to March 31. In fiscal  2001,  the  Company
changed its financial reporting year to end on March 31.

Note 2 - Inventories:

          Inventories  are  stated  at the  lower  of  cost or  market.  Cost is
determined using the first-in,  first-out for the consumer  electronics  segment
and for the  sporting  goods  segment,  weighted-average  cost methods for items
manufactured  and  weighted-average  cost for items purchased for resale.  As of
March 31, 2001 and 2000, inventories consisted of the following:

                                           March 31, 2001       March 31, 2000
                                           -----------------    ----------------
                                                   (In thousands)

Raw materials                              $     3,728           $      --
Work-in-process                                    377                  --
Finished                                        42,643               14,963
                                           -------------         ---------------
                                                46,748               14,963
Less inventory allowances                       (2,271)                (579)
                                           -------------         ---------------
                                            $   44,477            $  14,384
                                           =============         ===============

<PAGE>

Note 3 - Acquisition of Affiliate:

          As of March 31, 2001 and 2000,  Emerson owned  4,463,223 and 2,386,000
(50.1% and 32.8% of the issued and  outstanding)  shares of common stock of SSG,
respectively.  Accordingly, for fiscal 2001 Emerson accounted for its investment
in SSG by  consolidating  SSG under  purchase  method of  accounting,  while for
fiscal 2000 and fiscal 1999,  Emerson  accounted for its investment in SSG under
the equity method.

          Pro-forma   results  of  operations   for  Emerson,   reflecting   the
consolidation  with SSG for the fiscal  year ended March 31, 2000 are as follows
(in thousands, except per share data):

                                                      For the 12 Months
                                                            Ended
                                                        March 31, 2000
                                                    -----------------------
                                                         (Unaudited)
       Net revenues - pro forma                     $      320,222
       Cost of sales - pro forma                           255,472
       Net income  - pro forma                               3,620
       Net income per common share - basic and
            diluted - pro forma                     $          .07


          For fiscal 2000,  the  investment  in and results of operations of SSG
were  accounted  for by the  equity  method.  Summarized  financial  information
derived  from the  annual  and  quarterly  financial  reports  as filed with the
Securities  and  Exchange   Commission  for  fiscal  2000  are  as  follows  (in
thousands):


                                                March 31, 2000     April 2, 1999
                                                --------------     -------------
                                                 (Unaudited)        (Unaudited)

       Current assets                       $       50,488         $    44,322
       Property, plant and equipment and
         other assets                               30,158              30,252
       Current liabilities                          38,450              14,965
       Long-term debt                                  252              19,045
       Stockholders  Equity                         41,945              40,563


                                          For the 12 Months    For the 12 Months
                                               Ended                  Ended
                                            March 31, 2000      April 2, 1999
                                        --------------------   -----------------
                                           (Unaudited)         (Unaudited)
       Net sales                        $   116,521            $   100,953
       Gross profit                          37,919                 39,090
       Net income                             2,083                  5,454


          Effective March 1997, the Company  entered into a Management  Services
Agreement   with  SSG,   under  which  SSG  provides   various   managerial  and
administrative  services to the Company  for a fee.  For the fiscal  years 2001,
2000, and 1999, SSG billed Emerson pursuant to the management services agreement
fees of $401,000, $488,000, and $636,000, respectively. Management believes that
the transactions under the management  services agreement are reflective of arms
length transactions.

<PAGE>

Note 4 - Property, Plant, and Equipment

          As of March 31,  2001 and 2000,  property,  plant,  and  equipment  is
comprised of the following:

                                                            2001          2000
                                                        -----------    ---------
                                                              (In thousands)

      Land                                              $        9   $    --
      Buildings                                              1,024        --
      Computer Equipment & Software                         10,948       2,306
      Furniture and fixtures.  . . . . . . . . . . . .       1,570       1,249
      Machinery and equipment . . . . . . . . . . . .        2,465         614
      Leasehold improvements . . . . . . . . . . . . .         296         267
                                                        -----------   ----------
                                                            16,312       4,436
      Less accumulated depreciation and amortization .       3,594       3,402
                                                        -----------   ----------
                                                        $   12,718    $  1,034
                                                        ===========   ==========

          Depreciation  and  amortization  of  property,  plant,  and  equipment
amounted to  $2,729,000,  $638,700,  and  $583,000 for the years ended March 31,
2001, March 31, 2000, and April 2, 1999, respectively.


Note 5 - Short-Term Borrowings:

     Emerson has an existing Loan and Security Agreement (the "Loan and Security
Agreement"),  which includes a senior  secured credit  facility in the amount of
$10  million  with a U.S.  financial  institution.  The  facility  provides  for
revolving loans and letters of credit,  subject to individual maximums which, in
the  aggregate,  cannot  exceed the lesser of $10 million or a "Borrowing  Base"
amount  based on  specified  percentages  of eligible  accounts  receivable  and
inventories. Amounts outstanding under the senior credit facility are secured by
(i)  substantially  all  of  Emerson's  U.S.  and  Canadian  assets  except  for
trademarks,  which are subject to a negative pledge covenant, and (ii) a portion
of its  investment  in SSG. At March 31,  2001 and 2000,  the  weighted  average
interest rate on the outstanding borrowings was 10.42% and 9.36%,  respectively.
The interest  rate charged on this  facility is the prime rate of interest  plus
1.25%.  Pursuant to the Loan and Security  Agreement,  the Company is restricted
from,  among other  things,  paying cash  dividends  (other than on the Series A
Preferred  Stock),  redeeming  stock in certain  instances,  and  entering  into
certain  transactions  without  the  lender's  prior  consent and is required to
maintain certain net worth levels. An event of default under the credit facility
would  trigger  a  default  under  the  Company's  8-1/2%  Senior   Subordinated
Convertible  Debentures  Due 2002.  As of March  31,  2000,  approximately  $2.9
million was  outstanding  under this  facility.  At March 31, 2001 and 2000,  no
letters of credit for  inventory  purchases  were issued.  At March 31, 2001 the
carrying value of the credit facility approximates its fair value.

<PAGE>

Note 6 - Long-Term Borrowings:


          As of March 31, 2001 and 2000,  long-term  borrowings consisted of the
following:

                                                        2001             2000
                                                    ------------     -----------
                                                              (In thousands)
8-1/2% Senior Subordinated Convertible
  Debentures Due 2002                                  $ 20,750        $ 20,750
Notes payable under revolving line of credit             17,088            --
Equipment notes and other                                   558             238
                                                    ------------     -----------
                                                         38,396          20,988
Less current maturities                                     139              97
                                                    ------------     -----------
        Long-term debt and notes payable               $ 38,257        $ 20,891
                                                    ============     ===========

          The Senior Subordinated Convertible Debentures Due 2002 ("Debentures")
were issued by Emerson in August 1995. The Debentures  bear interest at the rate
of 8-1/2% per annum,  payable  quarterly,  and  mature on August 15,  2002.  The
Debentures are convertible into shares of the Company's common stock at any time
prior to  redemption or maturity at an initial  conversion  price of $3.9875 per
share,  subject to adjustment  under certain  circumstances.  The Debentures are
presently redeemable in whole or in part at the Company's option at a redemption
price of 102% of  principal,  decreasing  by 1% per  year  until  maturity.  The
Debentures are  subordinated to all existing and future senior  indebtedness (as
defined in the Indenture  governing the  Debentures).  The Debentures  restrict,
among other things,  the amount of senior  indebtedness  and other  indebtedness
that the Company, and, in certain instances, its consolidated subsidiaries,  may
incur.  Each holder of  Debentures  has the right to cause the Company to redeem
the  Debentures if certain  designated  events (as defined)  should  occur.  The
Debentures are subject to certain restrictions on transfer, although the Company
has registered  the offer and sale of the  Debentures and the underlying  common
stock. At March 31, 2001 the carrying value of the debentures  approximated fair
value.

          Notes payable under a revolving line of credit  (Revolver) were issued
by SSG in March 2001,  replacing a prior facility.  The facility  provides for a
three-year  $25 million  revolving  line of credit,  and provides for  revolving
loans and is subject to individual  maximums  which,  in the  aggregate,  cannot
exceed  the  lesser of $25  million  or a  "Borrowing  Base"  amount  based upon
specified percentages of eligible accounts receivables and inventories.  Amounts
outstanding  under the senior credit facility are secured by  substantially  all
the assets of the Sport Supply Group, Inc. and subsidiaries.  At March 31, 2001,
the weighted average  interest rate on the outstanding  borrowings was 8.5%. The

<PAGE>

interest  rate charged  under this facility at March 31, 2001 was the prime rate
of interest plus .5%. Pursuant to the Loan and Security  Agreement,  the Company
is restricted from, among other things, paying cash dividends, and entering into
certain  transactions  without the lender's prior consent. At March 31, 2001 the
carrying value of the note payable approximates its fair value.

          Maturities  of long-term  borrowings  as of March 31, 2001,  by fiscal
year and in the aggregate are as follows (in thousands):

2002                                           $    139
2003                                             20,955
2004                                             17,203
2005                                                 74
2006                                                 25
Thereafter                                            0
                                       ------------------
     Total                                       38,396
Less current portion                               (139)
                                       ------------------
     Total long term portion             $       38,257
                                       ==================

Note 7 - Income Taxes:


          The income tax (benefit) provision for the years ended March 31, 2001,
March 31, 2000, and April 2, 1999 consisted of the following:


                                      2001                2000            1999
                                  --------------    ---------------    ---------
Current:                                             (In thousands)
Federal                            $  475            $    47            $  --
Foreign, state and other              848               (624)               207
Deferred federal                   (2,267)                --               --
                                  --------------    ---------------    ---------
                                   $ (944)           $  (577)           $   207
                                  ==============    ===============    =========

          The Company,  with the exception of SSG, files a consolidated  federal
and certain state and local income tax returns.

<PAGE>

          The  difference  between the effective rate reflected in the provision
for income taxes and the amounts  determined by applying the statutory U.S. rate
of 34% to income before  income taxes for the years ended March 31, 2001,  March
31, 2000, and April 2, 1999 are analyzed below:

<TABLE>
<CAPTION>


                                                   2001                2000               1999
                                              ---------------    ----------------    ---------------
                                                                  (In thousands)
<S>                                           <C>                 <C>                 <C>
  Statutory provision                         $    3,981          $   1,035           $      169
  Decrease in valuation allowance                 (5,246)            (1,306)                (207)
  Foreign income taxes                               478               (642)                 207
  State taxes                                        723                183                   30
  Minority interest                               (1,211)               -                      -
  Alternative minimum tax                            305                 47                    -
  Other, net                                          26                106                    8
                                              ---------------    ----------------    ---------------
  Total income tax (benefit)
    provision                                 $     (944)         $    (577)          $      207
                                              ===============    ================    ===============
</TABLE>


          Emerson Radio (Hong Kong) Ltd., was assessed $858,000 by the Hong Kong
Inland Revenue Department (the "IRD") in May 1998. The assessment related to the
fiscal 1993  through  fiscal 1998 tax years and asserted  that certain  revenues
reported as  non-taxable  by Emerson  Radio (Hong Kong) Ltd.  were  subject to a
profits  tax.  In  fiscal  1999,  the  Company  accrued  $256,000  equaling  its
compromise  offer,  and in June 1999,  the IRD  accepted  the offer in which the
Company and the IRD settled, without prejudice, the assessment for $256,000.

          Emerson  Radio (Hong Kong) Ltd.  was also in  litigation  with the IRD
regarding the  deductibility of certain expenses that related to the fiscal 1992
through  fiscal  1999 tax  years.  In  December  1999,  the  Company  received a
favorable ruling from the Hong Kong Court of Final Appeals regarding this matter
and a tax credit of $619,000 was recorded in the Company's financial results for
Fiscal 2000.

          As of March  31,  2001 and 2000,  the  significant  components  of the
Company's deferred tax assets and liabilities are as follows:

<PAGE>
<TABLE>
<CAPTION>

                                                                                2001                2000
                                                                            --------------      -----------
                                                                                     (In thousands)
  Deferred tax assets:
<S>                                                                         <C>                  <C>
      Accounts receivable reserves                                          $   5,345            $   5,243
        Inventory reserves                                                      1,359                  235
      Net operating loss carryforwards                                         28,066               29,717
      Other                                                                     1,311                  491
                                                                           --------------      --------------
            Total deferred tax assets                                          36,081               35,686
        Valuation allowance for deferred tax assets                           (26,452)             (33,844)
                                                                            --------------      --------------
            Net deferred tax assets                                             9,629                1,842
  Deferred tax liabilities:
      Intangible assets                                                        (2,921)                --
      Investment in affiliate                                                    (969)              (1,479)
      Other                                                                      (239)                (363)
                                                                            --------------      --------------
            Net deferred taxes                                               $  5,500            $     --
                                                                            ==============      ==============

</TABLE>

          Total  deferred  tax assets for the  consumer  electronics  segment at
March  31,  2001  and  2000  include  the   tax-effected   net  operating   loss
carryforwards   subject  to  annual   limitations   (as  discussed   below)  and
tax-effected  deductible  temporary  differences.  A valuation  reserve has been
established  for the consumer  electronics  segment  against any expected future
benefits as management believes it is not more likely than not that such benefit
will be realized in the future.

          The sporting goods segment has net operating loss  carryforwards  that
can be used to offset future taxable income and can be carried forward for 15 to
20 years.  No valuation  allowance has been recorded for the deferred tax assets
because  management  believes  it is more  likely  than not such  assets will be
realized by future profitable operating results.

          Income  of  foreign   subsidiaries   before   taxes  was   $7,486,000,
$1,578,000,  and $1,492,000 for the years ended March 31, 2001,  March 31, 2000,
and April 2, 1999, respectively.

          As of March 31,  2001,  the Company had a federal net  operating  loss
carryforward of  approximately  $115,500,000,  which will expire in 2006 through
2019. The  utilization of these net operating  losses are subject to limitations
under  IRC  section  382.  In  addition,  SSG has  federal  net  operating  loss
carryforwards of approximately $20,044,000,  which will expire in the years 2011
through 2021.

Note 8 -- Commitments and Contingencies:


Leases:

          The Company leases warehouse and office space with annual  commitments
as follows (in thousands):

                            Fiscal Years                      Amount
                                2002                        $  2,768
                                2003                           2,513
                                2004                           1,590
                                2005                             960
                                2006                              12

          Rent expense, net of rental income, aggregated $3,064,000, $1,326,000,
and $1,304,000 for fiscal 2001, 2000, and 1999, respectively.


Letters of Credit:

          There  were no  letters  of  credit  outstanding  under  the  Loan and
Security  Agreement  (See Note 5) as of March 31, 2001,  or 2000.  The Company's
Hong  Kong  subsidiary  also  currently   maintains  various  credit  facilities
aggregating  $40.0  million  with a bank in Hong Kong  subject to annual  review
consisting  of the  following:  (i) a $5.0  million  credit  facility  which  is
generally  used for letters of credit for  inventory  purchases,  and (ii) a $35
million  credit  facility with  seasonal  over - advances,  for the benefit of a
foreign  subsidiary,  which is for the establishment of back-to-back  letters of
credit with the Company's  largest  customer.  At March 31, 2001,  the Company's
Hong Kong  subsidiary  had pledged $1.75 million in  certificates  of deposit to
this bank to assure the  availability  of the $5.0 million credit  facility.  At
March 31,  2001,  there  were  $3,801,000  and  $7,279,000  of letters of credit
outstanding under these credit facilities, respectively.

Purchase Contracts:

          The Company has a contractual  agreement  with one supplier to provide
future raw materials totaling approximately $240,000.

Note 9 - Stock Based Compensation:

Consumer Electronics Segment:

          In  July  1994,   Emerson   adopted  a  Stock   Compensation   Program
("Program").  The maximum  aggregate  number of shares of common stock available
pursuant to the Program is 2,000,000 shares and the Program is comprised of four
parts - the Incentive Stock Option Plan, the Supplemental Stock

<PAGE>

Option  Plan,  the Stock  Appreciation  Rights Plan and the Stock Bonus Plan.  A
summary of transactions during the last three years is as follows:
<TABLE>
<CAPTION>


                                                                                      Exercise Price or
                                                             Number of                  Weighted Avg.
                                                               Shares                       Price
                                                         -------------------       ------------------------

<S>                                                             <C>                   <C>
Outstanding - April 3, 1998                                     1,017,000             $       1.06
     Granted                                                       23,000                     1.00
                                                         -------------------       ------------------------
Outstanding - April 2, 1999                                      1,040,000                    1.06
     Granted                                                       300,000                    1.00
     Canceled                                                      (18,000)                   1.00
                                                         -------------------       ------------------------
Outstanding - March 31, 2000                                     1,322,000                    1.05
     Granted                                                       248,000                    1.00
     Exercised                                                     (75,000)                   1.00
     Canceled                                                      (11,666)                   1.00
                                                         -------------------       ------------------------
Outstanding  - March 31, 2001                                    1,483,334                $   1.04
                                                         ===================       ========================

</TABLE>

          Subject to the terms set forth in each  option  agreement,  generally,
the term of each option is ten years,  except for  options  issued to any person
who owns more than 10% of the voting power of all classes of capital stock,  for
which the term is five years. Options may not be exercised during the first year
after the date of the grant.  Thereafter,  each option becomes  exercisable on a
pro rata basis on each of the first through third  anniversaries  of the date of
the grant.  The exercise  price of options  granted must be equal to, or greater
than the fair market  value of the shares on the date of the grant,  except that
the option price with  respect to an option  granted to any person who owns more
than 10% of the voting  power of all classes of capital  stock shall not be less
than 110% of the fair market value of the shares on the date of the grant. As of
March  31,  2001,  there  were a total of  1,483,334  options  outstanding  with
exercise prices ranging from $1.00 per share to $1.10 per share. As of March 31,
2001,  1,052,002 of the total options outstanding were fully vested with 431,332
options vesting through July 2003. At March 31, 2001,  March 31, 2000, and April
2, 1999, the weighted  average  exercise price of exercisable  options under the
Program was $1.05, $1.06, and $1.06, respectively.

          In  October  1994,  Emerson's  Board  of  Directors  adopted,  and the
stockholders  subsequently approved, the 1994 Non-Employee Director Stock Option
Plan. The maximum number of shares of Common Stock  available under such plan is
300,000  shares.  A summary of  transactions  under the plan for the three years
ending March 31, 2001 is as follows:

<PAGE>

                                                               Exercise Price or
                                          Number of               Weighted Avg.
                                            Shares                  Price
                                         ----------------   --------------------

Outstanding -April 3, 1998 and April 2,
       1999                                   150,000             $    1.00
     Canceled                                 (50,000)                 1.00
                                         ----------------       ----------------
Outstanding - March 31, 2000                  100,000                  1.00
     Granted                                   75,000                  1.00
                                         ----------------       ----------------
Outstanding - March 31, 2001                  175,000             $    1.00
                                         ================       ================

          All  options  granted  under the stock  option  plan during the fiscal
years ending April 2, 1999,  March 31, 2000, and March 31, 2001 were at exercise
prices equal to or greater than the fair market value of Emerson's  stock on the
date of the grant.

          As  of  March  31,  2001,  there  were  a  total  of  175,000  options
outstanding  with  exercise  prices at $1.00 per  share.  As of March 31,  2001,
100,000 of the total options  outstanding  were fully vested with 75,000 options
vesting through July 2003.

          The  provisions for the 1994  Non-Employee  Director Stock Option Plan
for exercise  price,  term and vesting  schedule are the same as noted above for
the Stock Compensation Program.

Sporting Goods Segment:

          SSG has a stock option plan that  provides up to  2,000,000  shares of
common  stock  for  awards of  incentive  and  non-qualified  stock  options  to
directors and employees (the "SSG Plan"). Under the SSG Plan, the exercise price
of options  will not be less than:  the fair market value of the common stock at
the date of grant;  or not less than 110% of the fair market value for incentive
stock  options  granted to certain  employees,  as more fully  described  in the
Amended and Restated Stock Option Plan.  Options expire ten years from the grant
date, or five years from the grant date for incentive  stock options  granted to
certain employees,  or such earlier date as determined by the Board of Directors
of SSG (or a Stock  Option  Committee  comprised  of  members  of the  Board  of
Directors).

          A  summary  of  transactions  under the SSG Plan for the  fiscal  year
ending March 31, 2001 is as follows:
<TABLE>
<CAPTION>

                                                                                      Exercise Price or
                                                             Number of                  Weighted Avg.
                                                               Shares                       Price
                                                         -------------------       ------------------------
<S>                                                           <C>                         <C>
Outstanding - March 31, 2000                                  1,097,199                $      7.76
     Granted                                                      9,375                       1.46
     Canceled                                                  (199,645)                      7.95
                                                         -------------------       ------------------------
Outstanding - March 31, 2001                                    906,929                $      7.65
                                                         ===================       ========================
</TABLE>


     All options  granted under the SSG Plan during the fiscal year ending March
31, 2001 were at exercise  prices equal to or greater than the fair market value
of SSG's stock on the date of the grant.

     As of March 31, 2001,  there were a total of 1,006,929  options  (including
non-plan options)  outstanding with exercise prices ranging from $1.38 per share
to  $9.44  per  share.  As of March  31,  2001,  921,094  of the  total  options
outstanding were fully vested with 85,835 options vesting through November 2002.
As of March 31, 2001, the weighted average exercise price of exercisable options
under the SSG Plan was $7.59.

Consumer Electronics and Sporting Good Segments:

     The weighted  average fair values of employee  stock options  granted under
the  Emerson  plan in fiscal  2001,  2000 and 1999 are  $0.84,  $0.35 and $0.25,
respectively. The fair values were estimated using the following assumptions and
the Black-Scholes option valuation model:

                                      2001             2000          1999
                                  --------------    -----------    ----------
Risk-free interest rate             5.29%            5.00%              5.00%
Expected life                     10 years          10 years           10 years
Expected volatility                  .99              .57                 .15
Expected dividend yield             0.00%            0.00%               0.00%

     For fiscal 2001 , SSG's fair values were  calculated  using the  following:
(i) a risk free interest rate of 4.29%; (ii) a weighted average expected life of
3 years;  (iii) an  expected  volatility  of 55%;  and (iv) a dividend  yield of
0.00%. The weighted average fair value of employee stock options granted for the
SSG Plan in fiscal 2001 was $0.59.

     Emerson and SSG have elected to follow Accounting  Principles Board Opinion
No. 25,  "Accounting  for Stock  Issued to  Employees:  ("APB  25") and  related
Interpretations  in accounting  for its employee  stock  options.  Under APB 25,
because the exercise  price of the Company's  employee  stock options  equals or
exceeds  the  market  price  of the  underlying  stock  on  date  of  grant,  no
compensation   expense  is   recognized.   Emerson  and  SSG  have  adopted  the
disclosure-only provisions under Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("SFAS 123"). For the purposes of
SFAS 123 pro forma  disclosures,  the  estimated  fair  value of the  options is
amortized to expense over the options' vesting periods.  The Company's pro forma
information for fiscal 2001, 2000 and 1999 follows:

<PAGE>
<TABLE>
<CAPTION>

                      EMERSON RADIO CORP. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)
                                 March 31, 2001


                                     2001              2000           1999
                                 ---------         -----------      --------
<S>                              <C>               <C>                <C>
Net income: (in thousands)
     As reported                 $12,653           $  3,620           $ 289
     Pro forma                   $12,058           $  3,601           $ 264
Net income (loss) per common
     share:
     Basic - as reported         $   .36           $    .07           $(.01)

     Basic - pro forma           $   .34           $    .07           $(.01)

     Diluted - as reported       $   .33           $    .07           $(.01)

     Diluted - pro forma         $   .31           $    .07           $(.01)

</TABLE>

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.   Because   Emerson's   and  SSG's   employee   stock  options  have
characteristics  significantly  different  from  those of  traded  options,  and
because changes in the subjective  input  assumptions can materially  affect the
fair  value  estimate,  in  management's  opinion,  the  existing  models do not
necessarily  provide a reliable single measure of the fair value of its employee
stock options.


Note 10 - Shareholder's Equity:

Common Shares:

     Authorized  common shares  consists of 75,000,000  shares of common shares,
par value  $.01 per share,  of which  31,343,978  shares  were  outstanding  and
20,131,533 shares were held in treasury at March 31, 2001, and 46,477,615 shares
were outstanding and 4,854,000 shares were held in treasury at March 31, 2000.

Common Stock Repurchase Program:

     In May 1998, the Company modified its existing stock repurchase  program to
permit the repurchase of up to $2 million of common  shares,  from time to time,
in the open market.  Pursuant to this plan,  the Company  repurchased  3,503,400
shares in Fiscal 1999 for $ 1,907,000,  completing the repurchase  program.  The
Board authorized a second repurchase program in January 2000 for an additional 5
million  shares.  In fiscal  2001 the  Company  repurchased  100,000  shares for
$75,000,  and for fiscal  2000,  repurchased  1,350,600  shares for  $1,121,000,
pursuant to this program.  The shares  repurchased during Fiscal 2001 and Fiscal
2000 were funded by working capital.

Additional Common Stock Repurchases:

     On May 25,  2000,  the  Company  entered  into a  Termination,  Settlement,
Redemption and Option Agreement,  (the "Agreement") with Geoffrey P. Jurick, its
Chairman,  Chief  Executive  Officer  and  President,  and  two of Mr.  Jurick's
institutional creditors, resolving outstanding litigation between Mr. Jurick and
two of his three  outside  creditors.  In  accordance  with the  Agreement,  the
Company, on May 25, 2000,  purchased 7.0 million shares of Common Stock from the
two institutional creditors for $6.0 million. The purchase price was paid by the
Company using cash generated from  operations.  In addition,  under the terms of
the  Agreement,  the Company was granted a one year option to purchase  from the
two  institutional  creditors the  remaining 4.1 million  shares of Common Stock
owned by them for approximately $5.5 million (the "Option Purchase Price").  The
option term may be extended by the Company for one additional year upon making a
non-refundable  payment of  $550,000  to the two  institutions  and for a second
additional year upon making a payment of $2,550,000,  of which $1.9 million will
be credited  against the Option  Purchase  Price.  On May 25, 2001,  the Company
extended the option term for one additional  year by making a $550,000  payment.
On July 31, 2000,  the Company  purchased  8,177,533  shares of Common Stock for
approximately $4.1 million.  The Company used cash generated from operations and
required no additional borrowings to complete the transaction.

     In the  event  that  the  Company  or its  assignees  do not  purchase  the
approximately  4.1 million  shares of Common  Stock owned by such  institutions,
these   institutions   will  continue  to  have  claims   against  Mr.   Jurick.
Implementation of the termination of the Settlement  Agreement with Mr. Jurick's
remaining creditor (by settlement or court order) has not been finalized.

<PAGE>

Series A Convertible Preferred Stock:

     The Company has issued and outstanding 3,677 shares of Series A Convertible
Preferred  Stock,  ("Preferred  Stock")  $.01 par  value,  with a face  value of
$3,677,000 and an estimated fair market value of approximately  $3,986,000.  The
Preferred  Stock is non-voting and  convertible  into Common Stock through March
31,  2002,  at a price  per share of Common  Stock  equal to 80% of the  defined
average market value of a share of Common Stock on the date of  conversion.  The
Preferred Stock bears dividends, on a cumulative basis currently at 1.4% through
March 31, 2001. No further dividends are accruable under the Preferred Stock. At
March 31, 2001,  the Company is in compliance  with the default  provisions  and
currently owes dividends in arrears of $977,000.

     During the year ended  March 31,  2001,  there were no  conversions  of the
Company's  Series A  Preferred  Stock.  For the year ended March 31,  2000,  the
Company  repurchased 37 shares of its Series A Preferred Stock.  During the year
ended April 2, 1999,  the Company issued a total of 286,885 shares of the common
stock, upon conversion of 100 shares of Series A Preferred Stock.

Warrants:

     The  Company  issued  warrants  on  March  31,  1994  for the  purchase  of
approximately  750,000  shares of Common  Stock  exercisable  at $1.40 per share
during fiscal 2001.  During  fiscal 2001,  68,896  warrants  were  exercised and
converted  into 68,896 shares of common stock.  On March 31, 2001  approximately
680,000 warrants expired unexercised.

     During  August  2000  warrants  that were  issued  in  August  1995 for the
purchase of 500,000  shares of Common Stock at an exercise  price of $3.9875 per
share, all expired unexercised.

     On December 8, 2000  warrants  that were issued in December  1995,  for the
purchase of 250,000  shares of Common  Stock at an  exercise  price of $4.00 per
share, all expired unexercised.

Note 11 -- Available-For-Sale Securities:

     Available-for-sale securities are stated at fair value, with the unrealized
gains and losses  reported  in a separate  component  of  shareholders'  equity.
Realized  gains  and  losses,   and  declines  in  market  value  judged  to  be
other-than-temporary,  are  included in earnings.  During the fourth  quarter of
fiscal  1999,  the  Company  recorded  a loss  of  $1,298,000  in  earnings  for
securities whose decline in value was deemed to be other-than-temporary.  During
fiscal 2000,  the Company  recorded a realized loss of $149,000 from the sale of
securities  for less than their carrying  value.  During fiscal 2001, no charges
were made to the  consolidated  statement of operations  for  available-for-sale
securities.

<PAGE>

     The following is a summary of available-for-sale equity securities at March
31, 2001, March 31, 2000 and April 2, 1999 (in thousands):

                                      Gross              Gross         Estimated
                       Cost           Gains              Losses       Fair Value
                    ----------      -----------       ----------      ----------

March 31, 2001       $    41         $ --               $    37        $   4
March 31, 2000            37           --                    --           37
April 2, 1999          2,036           --                 1,298          738


Note 12 -- Net Earnings (Loss) per Share:

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings  (loss) per share for the years ended March 31,  2001,  March 31, 2000,
and April 2, 1999:

<TABLE>
<CAPTION>
                                                    (In thousands, except per share amount)
                                               2001                   2000                  1999
                                          ---------------       ----------------     -----------------
Numerator:
<S>                                         <C>                 <C>                   <C>
Net income                                  $  12,653           $       3,620         $      289
Less: preferred stock dividends,
        and repurchase  Costs                      51                     103                578
                                          ---------------       ----------------     -----------------
Numerator for basic earnings
    (loss) per share - income available
    to common stockholders                     12,602                   3,517               (289)
Add back to effect assumed conversions:
    Preferred stock dividends                      51                     103                 --
                                          ---------------       ----------------     -----------------
Numerator for diluted earnings
    (loss)  per share                     $    12,653           $       3,620             $ (289)
                                           ==============        ===============     =================
Denominator:
Denominator for basic earnings
per share - weighted average shares            35,066                  47,632             49,398
Effect of dilutive securities:
   Preferred  shares                            3,066                   5,876                --
   Options                                        437                    --                  --
                                           ---------------       ---------------     -----------------
Denominator for diluted earnings
per share - weighted average
shares and assumed conversions
                                               38,569                 53,508              49,398
                                           ===============       ===============     =================
Basic income (loss) per share             $       .36           $        .07        $       (.01)
                                           ===============       ===============     =================
Diluted income (loss) per share           $       .33           $        .07        $       (.01)
                                           ===============       ===============     =================

</TABLE>

     Options and warrants to purchase 2,899,000,  and 2,667,000 shares of Common
Stock were not included in computing  diluted earnings per share for Fiscal 2000
and 1999, respectively, because the effect would be antidilutive.

     Preferred Stock  convertible  into 8,680,000 shares of Common Stock was not
included in  computing  diluted  earnings  per share for Fiscal 1999 because the
effect would be antidilutive.

     Senior Subordinated  Debentures convertible into 5,204,000 shares of common
stock if converted were not included in computing diluted earnings per share for
Fiscal 2001, 2000, and 1999, because the effect would be antidilutive.

Note 13 -- License Agreements:

     Emerson has several  license  agreements in place that  allow licensees  to
use  the  "EMERSON(R)" and  H.H. Scott(R)  trademarks for the manufacture and/or
the sale of consumer  electronics  and other  products.  The license  agreements
cover various  countries  throughout the world and are subject to renewal at the
initial  expiration of the  agreements.  Additionally,  Emerson has entered into
several sourcing and inspection agreements that require Emerson to provide these
services in exchange for a fee. License revenues recognized and earned in Fiscal
2001, 2000, and 1999 were $3,930,000, $3,143,000, and $3,633,000,  respectively.
Emerson  records  licensing  revenues  as  earned  over the term of the  related
agreements.

<PAGE>

     In October  2000,  Emerson  entered  into a  three-year  license  agreement
("Video License  Agreement") with Funai Corporation,  Inc.,  ("Funai") effective
January 1, 2001 to replace a prior  agreement with Daewoo  Electronics  Co. Ltd.
("Daewoo").  The Video License  Agreement  provides that Funai will manufacture,
market,  sell and distribute  specified products bearing the "EMERSON" trademark
to  customers  in North  America.  Under  the  terms of the  agreement,  Emerson
receives  non-refundable  minimum  annual  royalty  payments of $4.3 million for
calendar years 2001 and 2002, as well as 2003 unless terminated  pursuant to the
terms of the agreement.  The minimums are credited against  royalties earned for
the sale of products.  For Fiscal 2001,  revenues of  $1,075,000  were  recorded
under this License Agreement.

     Throughout  various parts of the world, the Company maintains  distribution
and license  agreements  that  provide  for the  distribution  of the  Company's
products into defined geographic areas.

Note 14 -- Legal Proceedings:

     The Company is involved in legal proceedings and claims of various types in
the ordinary course of business.  While any such litigation to which the Company
is a party contains an element of  uncertainty,  management  presently  believes
that the outcome of each such  proceeding  or claim which is pending or known to
be threatened,  or all of them combined, will not have a material adverse effect
on the Company's consolidated financial position or results of operations.

Note 15 -- Business Segment Information and Major Customers:

     The Company's has two business segments,  the consumer electronics business
and the  sporting  goods  segment.  Operations  in these  business  segments are
summarized below by geographic area (in thousands):

<PAGE>
<TABLE>
<CAPTION>

                                                                Year Ended March 31, 2001
                                                                    U.S.         Foreign       Consolidated
                                                               ------------------------------------------------
<S>                                                            <C>            <C>            <C>
Sales to unaffiliated customers - consumer
         electronics                                           $  255,272     $   9,077      $    264,349

Sales to unaffiliated customers - sporting
         Goods                                                    112,653           408           113,061
                                                               --------------------------------------------
     Total sales to unaffiliated customers                     $  367,925     $   9,485      $    377,410
                                                               ============================================
Income (loss) before income  taxes -
consumer electronics                                           $   17,380    $      (25)     $     17,355
Income (loss) before income  taxes -
sporting goods                                                     (5,646)          --             (5,646)
                                                               --------------------------------------------
     Total income (loss) before income taxes                   $   11,734    $      (25)     $     11,709
                                                               ============================================
 Identifiable assets - consumer electronics                    $   34,953    $    8,504      $     43,457

Identifiable assets - sporting goods                               75,549           --             75,549
                                                               --------------------------------------------
     Total identifiable assets                                 $  110,502    $    8,504      $    119,006
                                                               ============================================

                                                                         Year Ended March 31, 2000

                                                                    U.S.         Foreign       Consolidated
                                                               ------------------------------------------------

Sales to unaffiliated customers                                $  197,810     $   5,891      $    203,701
                                                               ================================================
Income (loss) before income
   Taxes                                                       $    3,075     $     (32)     $      3,043
                                                               ================================================
Identifiable assets                                            $   60,780     $   2,731      $     63,511
                                                               ================================================

                                                                          Year Ended April 2, 1999

                                                                    U.S.         Foreign       Consolidated

Sales to unaffiliated customers                                $  156,106     $   4,448       $   160,554
                                                               ================================================
Loss before income taxes                                       $      472     $      24       $       496
                                                               ================================================
Identifiable assets                                            $   50,974     $    3,421      $     54,395
                                                               ================================================

</TABLE>


     Identifiable  assets are those assets used in operations in each geographic
area. In addition to operating  assets,  at March 31, 2001,  March 31, 2000, and
April 2, 1999,  there were  non-operating  assets of $9,282,000,  $8,297,000 and
$8,348,000, respectively, located in foreign countries.

     The Company's net sales to one customer  aggregated  approximately 41%, 56%
and 52% of consolidated  net revenues for the years ended March 31, 2001,  March
31, 2000, and April 2, 1999, respectively. The trade accounts receivable balance
for this customer at March 31, 2001 was not material. The Company's net sales to
another  customer  aggregated  14%,  21%,  and 24% for the years ended March 31,
2001, March 31, 2000, and April 2, 1999, respectively. Trade accounts receivable
from this customer were 10% of total trade receivables at March 31, 2001.

Note 16 - Quarterly Information (Unaudited):

     The following table sets forth certain information  regarding the Company's
results of operations  for each full quarter within the fiscal years ended March
31, 2001 and March 31,  2000,  with amounts in  thousands,  except for per share
data. Due to rounding,  quarterly  amounts may not fully sum to yearly  amounts.

<TABLE>
<CAPTION>

                     (In thousands, except per share data).

                                            Fiscal 2001 (1)(2)                               Fiscal 2000 (2)
Consolidated Statement
of Operations                     1st Qtr    2nd Qtr    3rd Qtr    4th Qtr     1st Qtr    2nd Qtr    3rd Qtr    4th Qtr

<S>                             <C>         <C>         <C>        <C>         <C>        <C>        <C>        <C>
Net revenues                    $ 113,318   $128,101    $79,916    $56,075     $44,129    $55,077    $60,507    $43,988

Operating income
                                    3,871      5,608      2,536      1,478         539      1,682      2,152        961

Net income
                                    3,045      5,118      3,708        782         415        855      1,127      1,223

Net income  per
  common share - basic               0.07       0.15       0.12       0.02        0.01       0.02       0.02       0.03


Net income per
  common share - diluted             0.06       0.13       0.10       0.02        0.01       0.02       0.02       0.02


Weighted average shares
   Outstanding - basic             43,853     33,867     31,272     31,284      47,828     47,828     47,828     47,056


Weighted average shares
   Outstanding - diluted           50,037     42,277     39,955     34,852      55,197     55,916     55,609     52,932

</TABLE>

(1)  Net revenues and  operating  income were  restated  from  previously  filed
     quarterly information to reflect the consolidation of SSG for the full year
     of fiscal 2001.

(2)  Net revenues  were restated to reflect  estimated  sales returns on a gross
     basis rather than on a net basis in  accordance  with SAB 101. See Item 8 -
     "Financial   Statements   and   Supplementary   Data  -  Note  1  -  Recent
     Pronouncements of Notes to Consolidated Financial Statements"


Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

                       ACCOUNTING AND FINANCIAL DISCLOSURE

              None

                                    PART III


Item 10.  DIRECTORS AND EXECUTIVE OFFICERS


     The information  required is incorporated  herein by reference to Emerson's
definitive Proxy Statement to be filed with the Securities  Exchange  Commission
on or before July 30, 2001.

Item 11. EXECUTIVE COMPENSATION

     The information  required is incorporated  herein by reference to Emerson's
definitive Proxy Statement to be filed with the Securities  Exchange  Commission
on or before July 30, 2001.


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information  required is incorporated  herein by reference to Emerson's
definitive Proxy Statement to be filed with the Securities  Exchange  Commission
on or before July 30, 2001.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required is incorporated  herein by reference to Emerson's
definitive Proxy Statement to be filed with the Securities  Exchange  Commission
on or before July 30, 2001.

<PAGE>

                                     PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENTS, STATEMENT SCHEDULE AND REPORTS ON
          FORM 8-K

          (a) Financial Statements and Schedules. See Item 8

          (b)  Reports on Form 8-K - Current  report on Form 8-K,  dated January
               19, 2001,  reporting  the purchase of 1,629,629  shares of common
               stock of Sport Supply Group, Inc..

          (c)  Exhibits


Exhibit Number


          3.1  Certificate  of   Incorporation   of  Emerson   (incorporated  by
               reference to Exhibit (3) (a) of Emerson's  Registration Statement
               on Form S-1, Registration No. 33-53621, declared effective by the
               SEC on August 9, 1994).

          3.2  Amended and Restated Certificate of Incorporation of Sport Supply
               Group,  Inc.  (incorporated  by reference to Exhibit  3.1of Sport
               Supply's  Annual Report on Form 10-K for the year ended March 30,
               2001).

          3.3  Certificate  of Amendment of Amended and Restated  Certificate of
               Incorporation  of  Sport  Supply  Group,  Inc.  (incorporated  by
               reference to Exhibit  3.1.1 of Sport  Supply's  Annual  Report on
               Form 10-K for the year ended March 30, 2001).

          3.4  Certificate   of  Designation   for  Series  A  Preferred   Stock
               (incorporated  by  reference  to  Exhibit  (3)  (b) of  Emerson's
               Registration  Statement on Form S-1,  Registration  No. 33-53621,
               declared effective by the SEC on August 9, 1994).

          3.5  Amendment   dated  February  14,  1996  to  the   Certificate  of
               Incorporation  of Emerson  (incorporated  by reference to Exhibit
               (3)  (a) of  Emerson's  Quarterly  Report  on Form  10-Q  for the
               quarter ended December 31, 1995).

          3.6  By-Laws of Emerson adopted March 1994  (incorporated by reference
               to Exhibit (3) (e) of  Emerson's  Registration  Statement on Form
               S-1, Registration No. 33-53621,  declared effective by the SEC on
               August 9, 1994).

          3.7  Amendment  dated  November  28,  1995 to the  By-Laws  of Emerson
               adopted March 1994  (incorporated by reference to Exhibit (3) (b)
               of Emerson's  Quarterly Report on Form 10-Q for the quarter ended
               December 31, 1995).

          3.8  Amended  and  Restated   Bylaws  of  Sport  Supply  Group,   Inc.
               (incorporated  by  reference  to  Exhibit  3.2 of Sport  Supply's
               Annual Report on Form 10-K for the year ended March 30, 2001).

          4.1  Indenture,  dated as of August 17, 1995 between  Emerson and Bank
               One,  Columbus,  NA, as Trustee  (incorporated  by  reference  to
               Exhibit (1) of  Emerson's  Current  Report on Form 8-K filed with
               the SEC on September 8, 1995).

          4.2  Common  Stock  Purchase  Warrant  Agreement  to purchase  200,000
               shares of Common  Stock,  dated as of  December  8, 1995  between
               Emerson and Kenneth A. Orr  (incorporated by reference to Exhibit
               (10)  (f) of  Emerson's  Quarterly  Report  on Form  10-Q for the
               quarter ended December 31, 1995).

          10.1 Loan and Security  Agreement,  dated March 31, 1994, by and among
               Emerson, Majexco Imports, Inc. and Congress Financial Corporation
               ("Congress")  (incorporated  by  reference to Exhibit (10) (f) of
               Emerson's  Registration  Statement on Form S-1,  Registration No.
               33-53621, declared effective by the SEC on August 9, 1994).

        10.1.1  Amendment No. 1 to Financing Agreements,  dated as of August 24,
                1995,  among  Emerson,   Majexco  Imports,   Inc.  and  Congress
                (incorporated  by reference to Exhibit (2) of Emerson's  Current
                Report on Form 8-K filed with the SEC on September 8, 1995).

        10.1.2  Amendment  No. 2 to Financing  Agreements,  dated as of February
                13,  1996  (incorporated  by  reference  to Exhibit  (10) (c) of
                Emerson's  Quarterly  Report on Form 10-Q for the quarter  ended
                December 31, 1995).

        10.1.3  Amendment No. 3 to Financing Agreements,  dated as of August 20,
                1996 (incorporated by reference to Exhibit (10) (b) of Emerson's
                Quarterly Report on Form 10-Q for the quarter ended December 31,
                1995).

        10.1.4  Amendment  No. 4 to Financing  Agreements,  dated as of November
                14,  1996  (incorporated  by  reference  to Exhibit  (10) (c) of
                Emerson's  Quarterly  Report on Form 10-Q for the quarter  ended
                September 30, 1996).

        10.1.5  Amendment  No. 5 to Financing  Agreements,  dated as of February
                18,  1997  (incorporated  by  reference  to Exhibit  (10) (e) of
                Emerson's  Quarterly  Report on Form 10-Q for the quarter  ended
                December 31, 1996).

        10.1.6  Amendment No. 6 to Financing Agreements,  dated as of August 14,
                1997 (incorporated by reference to Exhibit (10) (g) of Emerson's
                Quarterly  Report on Form 10-Q for quarter  ended  September 30,
                1997).

        10.1.7  Amendment No. 7 to Financing  Agreements,  dated as of March 31,
                1998 (incorporated by reference to Exhibit (10) (t) of Emerson's
                Annual Report on Form 10-K for the year ended April 3, 1998).

        10.1.8  Amendment  No. 8 to Financing  Agreements,  dated as of November
                13,  1998  (incorporated  by  reference  to Exhibit  (10) (a) of
                Emerson's  Quarterly  Report on Form 10-Q for the quarter  ended
                October 2, 1998).

        10.1.9  Amendment  No. 9 to  Financing  Agreements,  dated June 16, 1999
                (incorporated  by  reference  to Exhibit  (10) (ab) of Emerson's
                Annual Report on Form 10-K for the year ended April 2, 1999).

        10.2    Consent No. 1 to Financing Agreements among Emerson,  certain of
                its  subsidiaries,  and Congress  (incorporated  by reference to
                Exhibit  (10)(b) of Emerson's  Current  Report on Form 8-K dated
                November 27, 1996).

        10.3    Amendment  No. 1 to Pledge and  Security  Agreement  dated as of
                March 31, 1998 (incorporated by reference to Exhibit (10) (u) of
                Emerson's Annual Report on Form 10-K for the year ended April 3,
                1998).

        10.4    Stipulation  of Settlement  and Order dated June 11, 1996 by and
                among the  Official  Liquidator  of Fidenas  International  Bank
                Limited,  Petra  Stelling,   Barclays  Bank  PLC,  the  Official
                Liquidator of Fidenas  Investment  Limited,  Geoffrey P. Jurick,
                Fidenas International  Limited,  L.L.C.,  Elision International,
                Inc.,  GSE  Multimedia  Technologies  Corporation  and  Emerson.
                (incorporated by reference to Exhibit 10(ae) of Emerson's Annual
                Report on Form 10-K for the year ended March 31, 1996.)

        10.5    Pledge  Agreement  dated  as of  February  4,  1997  by  Fidenas
                International  Limited,  L.L.C.  ("FIN")  in favor of TM Capital
                Corp.   (incorporated  by  reference  to  Exhibit  (10)  (a)  of
                Emerson's  Quarterly  Report on Form 10-Q for the quarter  ended
                December 31, 1996).

        10.6    Registration  Rights  Agreement  dated as of February 4, 1997 by
                and among Emerson, FIN, the Creditors,  FIL and TM Capital Corp.
                (incorporated  by  reference  to Exhibit  (10) (b) of  Emerson's
                Quarterly Report on Form 10-Q for the quarter ended December 31,
                1996).

        10.7    Securities  Purchase Agreement dated as of November 27, 1996, by
                and  between  Sport  Supply  Group,  Inc.  ("SSG")  and  Emerson
                (incorporated  by  reference  to  Exhibit  (2)(a)  of  Emerson's
                Current Report on Form 8-K dated November 27, 1996).

        10.8    Form  of  Warrant  Agreement  by and  between  SSG  and  Emerson
                (incorporated  by  reference  to  Exhibit  (4)(a)  of  Emerson's
                Current Report on Form 8-K dated November 27, 1996).

        10.9    Form of  Registration  Rights  Agreement  by and between SSG and
                Emerson   (incorporated   by  reference  to  Exhibit  (4)(b)  of
                Emerson's Current Report on Form 8-K dated November 27, 1996).

        10.10   License  and  Exclusive   Distribution   Agreement  with  Cargil
                International  Corp. dated as of February 12, 1997 (incorporated
                by reference to Exhibit (10) (c) of Emerson's  Quarterly  Report
                on Form 10-Q for the quarter ended December 31, 1996).

        10.11   License  Agreement  dated as of October  29, 1999 by and between
                Daewoo   Electronics  Co.  Ltd  and  Emerson   (incorporated  by
                reference to Exhibit (10) (b) of Emerson's  Quarterly  Report on
                Form 10-Q for the quarter ended October 1, 1999).

        10.12   License Agreement effective as of January 1, 2001 by and between
                Funai  Corporation  and Emerson  (incorporated  by  reference to
                Exhibit (10) (z) of Emerson's  Quarterly Report on Form 10-Q for
                the quarter ended September 30, 2000).

        10.13   Second Lease Modification dated as of May 15, 1998 between Hartz
                Mountain,  Parsippany and Emerson  (incorporated by reference to
                Exhibit (10) (v) of Emerson's Annual Report on Form 10-K for the
                year ended April 3, 1998).

        10.13.1 Third  Lease  Modification  made  the 26 day  of  October,  1998
                between Hartz Mountain  Parsippany and Emerson  (incorporated by
                reference to Exhibit (10) (b) of Emerson's  Quarterly  Report on
                Form 10-Q for the quarter ended October 2, 1998).

        10.14   Purchasing    Agreement,    dated   June   30,   1998,   between
                AFG-Elektronik   GmbH  and  Emerson  Radio   International  Ltd.
                (incorporated  by  reference  to Exhibit  (10) (c) of  Emerson's
                Quarterly  Report on Form 10-Q for the quarter  ended October 2,
                1998).

        10.14.1 Purchasing    Agreement,    dated   March   5,   1999,   between
                AFG-Elektronik   GmbH  and  Emerson  Radio   International  Ltd.
                (incorporated  by  reference  to Exhibit  (10) (aa) of Emerson's
                Annual Report on Form 10-K for the year ended April 2, 1999).

        10.15   Supplemental Letter of Employment for Marino Andriani,  dated as
                of October 11, 1999  (incorporated  by reference to Exhibit (10)
                (a) of Emerson's  Quarterly  Report on Form 10-Q for the quarter
                ended October 1, 1999).

        10.15.1 Supplemental Letter of Employment for Marino Andriani, effective
                as of April 1, 2001. *

        10.16   Letter of Employment for Patrick Murray, dated May 3, 2001. *

        10.17   Form of Indemnification Agreement entered into between the Sport
                Supply  and each of the  directors  of the Sport  Supply and the
                Sport Supply's  General  Counsel  (incorporated  by reference to
                Exhibit 10.11 of Sport  Supply's  Annual Report on Form 10-K for
                the year ended March 30, 2001).

        10.18   Sport Supply Group,  Inc. Amended and Restated Stock Option Plan
                (incorporated  by reference to Exhibit  10.13 of Sport  Supply's
                Annual Report on Form 10-K for the year ended March 30, 2001).

        10.19   Assignment and Assumption Agreement, dated to be effective as of
                February 28, 1992, by and between Aurora and Sport Supply Group,
                Inc.  (incorporated  by  reference  to  Exhibit  10.24  of Sport
                Supply's Annual Report on Form 10-K for the year ended March 30,
                2001).

        10.20   Amendment  No. 1 to AMF  Licensing  Agreement  (incorporated  by
                reference to Exhibit  10.25 of Sport  Supply's  Annual Report on
                Form 10-K for the year ended March 30, 2001).

        10.21   License  Agreement,  dated  as of  September  23,  1991,  by and
                between Proacq Corp. and Sport Supply Group, Inc.  (incorporated
                by reference to Exhibit 10.30 of Sport Supply's Annual Report on
                Form 10-K for the year ended March 30, 2001).

        10.22   Sport Supply Group  Employees'  Savings Plan dated June 1,  1993
                (incorporated  by reference to Exhibit  10.31 of Sport  Supply's
                Annual Report on Form 10-K for the year ended March 30, 2001).

        10.23   Management Services Agreement dated July 1, 1997 to be effective
                as of March 7, 1997 by and between Sport Supply Group,  Inc. and
                Emerson  (incorporated  by reference  to Exhibit  10.32 of Sport
                Supply's Annual Report on Form 10-K for the year ended March 30,
                2001).

        10.24   Non-Qualified  Stock Option Agreement by and between the Company
                and  Geoffrey P. Jurick  (incorporated  by  reference to Exhibit
                10.4 of Sport  Supply's  Annual Report on Form 10-K for the year
                ended March 30, 2001).

        10.35   Credit  Agreement  dated  March 27,  2001 by and  between  Sport
                Supply   Group,   Inc.   and  Congress   Financial   Corporation
                (incorporated  by reference to Exhibit  10.37 of Sport  Supply's
                Annual Report on Form 10-K for the year ended March 30, 2001).

          12   Computation  of Ratio of Earnings  (Loss) to Combined  Fixed
               Charges and Preferred Stock Dividends. *


          21   Subsidiaries of the Company as of March 31, 2001.*

          23   Consent of  Independent  Auditors.*

___________________
 * Filed herewith.


<PAGE>


                                   SIGNATURES


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


                                                     EMERSON RADIO CORP.


                                                     By: /s/Geoffrey P. Jurick
                                                         Geoffrey P. Jurick
                                                         Chairman of the Board
Dated:  June 25, 2001

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



/s/ Geoffrey P. Jurick         Chairman of the Board,             June 25, 2001
Geoffrey P. Jurick             Chief Executive Officer and
                               President


/s/ Kenneth A. Corby           Executive Vice President,          June 25, 2001
Kenneth A. Corby               Chief Financial Officer


/s/ Robert H. Brown, Jr.       Director                           June 25, 2001
Robert H. Brown, Jr.


/s/ Peter G. Bunger            Director                           June 25, 2001
Peter G. Bunger


/s/ Jerome H. Farnum           Director                           June 25, 2001
Jerome H. Farnum


/s/ Stephen H. Goodman         Director                           June 25, 2001
Stephen H. Goodman


<PAGE>
<TABLE>
<CAPTION>

                      EMERSON RADIO CORP. AND SUBSIDIARIES
                                  SCHEDULE VIII
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                 (In thousands)




                         Column A                               Column B        Column C         Column D     Column E
------------------------------------------------------------   -----------    ------------     ----------    ----------
                                                               Balance at     Charged to                      Balance
                                                                beginning     costs and        Deductions     at end of
                        Description                              of year      Expenses                        year (C)
------------------------------------------------------------

Allowance for doubtful accounts/chargebacks:
     Year ended:
<S>              <C> <C>                                         <C>          <C>             <C>             <C>
           March 31, 2001 (D)                                    $  3,284     $  (14)         $    255(A)     $  3,015
           March 31, 2000                                           2,686       (100)              139(A)        2,447
           April 2, 1999                                            3,015       (152)              177(A)        2,686

-----------------------------------------------------------
Inventory reserves:
     Year ended:
           March 31, 2001 (D)                                   $   1,711     $  1,222        $    662(B)      $ 2,271
           March 31, 2000                                             385          708             514(B)          579
           April 2, 1999                                              697        1,068           1,380(B)          385

</TABLE>

(A)    Accounts written off, net of recoveries.
(B)    Net realizable value reserve removed from account when inventory is sold.
(C)    Amounts do not include certain  accounts  receivable  reserves  that  are
       disclosed as "allowances" on the  Consolidated  Balance Sheets since they
       are not valuation reserves.
(D)    For fiscal 2001, the balances include both Emerson and SSG's accounts.