##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
  þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File No. 1-15289
 Sport Supply Group, Inc.
  Delaware
    
    22-2795073(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)1901 Diplomat Drive, Farmers Branch, Texas
    
    75234(Address of Principal Executive Offices)
    
    (Zip code)
 (972) 484-9484
 (Registrants Telephone Number, Including Area Code)
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  o þ




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##### 



SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 PageNumberPART I: FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at March 31, 2008
and June 30, 2007
    
    
    1Condensed Consolidated Statements of Income for the
three and nine months ended March 31, 2008 and 2007
    
    
    2Condensed Consolidated Statements of Cash Flows for
the nine months ended March 31, 2008 and 2007
    
    
    3Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.
    
    
    10Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 6. Exhibits
    
    
    24SIGNATURES
    
    
    26Exhibit 31.1Exhibit 31.2Exhibit 32




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Consolidated Financial Statements.
 SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
 March 31,
    
    
    June 30,2008
    
    
    2007(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    13,045
    
    
    $
    5,670Accounts receivable, net of allowance for doubtful accounts of
$1,501 and $1,296, respectively
    
    
    40,131
    
    
    
    31,154Inventories
    
    
    32,303
    
    
    
    32,241Current portion of deferred income taxes
    
    
    3,605
    
    
    
    3,790Prepaid income taxes
    
    
    96
    
    
    
    3,208Prepaid expenses and other current assets
    
    
    2,381
    
    
    
    1,380Total current assets
    
    
    91,561
    
    
    
    77,443PROPERTY AND EQUIPMENT, net of accumulated depreciation of $6,910
and $4,986, respectively
    
    
    10,049
    
    
    
    10,678DEFERRED DEBT ISSUANCE COSTS, net of accumulated amortization of
$2,754 and $2,035, respectively
    
    
    1,613
    
    
    
    2,309INTANGIBLE ASSETS, net of accumulated amortization of $4,177 and
$3,379, respectively
    
    
    7,226
    
    
    
    8,024GOODWILL
    
    
    54,949
    
    
    
    54,949DEFERRED INCOME TAXES
    
    
    
    
    
    
    3,045OTHER ASSETS, net
    
    
    113
    
    
    
    144Total assets
    
    $
    165,511
    
    
    $
    156,592LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    20,861
    
    
    $
    16,167Accrued liabilities
    
    
    11,255
    
    
    
    10,318Dividends payable
    
    
    309
    
    
    
    259Accrued interest
    
    
    958
    
    
    
    291Current portion of long-term debt
    
    
    108
    
    
    
    3,608Deferred income tax liability
    
    
    
    
    
    
    129Total current liabilities
    
    
    33,491
    
    
    
    30,772DEFERRED INCOME TAX LIABILITY
    
    
    4,698
    
    
    
    3,898NOTES PAYABLE AND OTHER LONG-TERM DEBT
    
    
    50,092
    
    
    
    71,386COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Preferred stock, $0.01 par value, 1,000,000 shares authorized;
no shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 50,000,000 shares authorized;
12,465,386 and 10,440,586 shares issued and 12,361,460 and
10,354,560 shares outstanding, respectively
    
    
    125
    
    
    
    104Additional paid-in capital
    
    
    64,092
    
    
    
    44,276Retained earnings
    
    
    13,816
    
    
    
    6,813Treasury stock at cost, 103,926 and 86,026 shares, respectively
    
    
    (803
    )
    
    
    (657
    )Total stockholders equity
    
    
    77,230
    
    
    
    50,536Total liabilities and stockholders equity
    
    $
    165,511
    
    
    $
    156,592
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    65,821
    
    
    $
    63,235
    
    
    $
    190,284
    
    
    $
    180,782Cost of sales
    
    
    41,739
    
    
    
    40,404
    
    
    
    121,301
    
    
    
    116,513Gross profit
    
    
    24,082
    
    
    
    22,831
    
    
    
    68,983
    
    
    
    64,269Selling, general and administrative expenses
    
    
    17,750
    
    
    
    18,421
    
    
    
    53,328
    
    
    
    52,474Operating profit
    
    
    6,332
    
    
    
    4,410
    
    
    
    15,655
    
    
    
    11,795Other income (expense):Interest income
    
    
    45
    
    
    
    28
    
    
    
    202
    
    
    
    142Interest expense
    
    
    (974
    )
    
    
    (1,707
    )
    
    
    (3,154
    )
    
    
    (4,424
    )Other income
    
    
    42
    
    
    
    17
    
    
    
    77
    
    
    
    109Total other expense
    
    
    (887
    )
    
    
    (1,662
    )
    
    
    (2,875
    )
    
    
    (4,173
    )Income before minority interest
in income of consolidated
subsidiary and income taxes
    
    
    5,445
    
    
    
    2,748
    
    
    
    12,780
    
    
    
    7,622Income tax provision
    
    
    2,069
    
    
    
    1,010
    
    
    
    4,856
    
    
    
    2,929Minority interest in income of consolidated
subsidiary, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    531Net income
    
    $
    3,376
    
    
    $
    1,738
    
    
    $
    7,924
    
    
    $
    4,162Weighted average number of shares outstanding:Basic
    
    
    12,296,813
    
    
    
    10,233,560
    
    
    
    12,043,082
    
    
    
    10,231,051Diluted
    
    
    15,842,816
    
    
    
    13,774,358
    
    
    
    15,578,514
    
    
    
    10,375,469Net income per common share  basic
    
    $
    0.27
    
    
    $
    0.17
    
    
    $
    0.66
    
    
    $
    0.41Net income per common share  diluted
    
    $
    0.25
    
    
    $
    0.17
    
    
    $
    0.61
    
    
    $
    0.40Dividends declared per common share
    
    $
    0.025
    
    
    $
    0.025
    
    
    $
    0.075
    
    
    $
    0.075
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Nine Months EndedMarch 31,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    7,924
    
    
    $
    4,162Adjustments to reconcile net income to cash provided by operating activities:Provision for uncollectible accounts receivable
    
    
    714
    
    
    
    1,307Depreciation and amortization
    
    
    2,798
    
    
    
    2,553Amortization of deferred debt issuance costs
    
    
    719
    
    
    
    705Deferred taxes
    
    
    3,901
    
    
    
    1,952Stock-based compensation expense
    
    
    355
    
    
    
    Minority interest in consolidated subsidiary
    
    
    
    
    
    
    531Changes in operating assets and liabilities:Accounts receivable
    
    
    (9,691
    )
    
    
    (7,332
    )Inventories
    
    
    (62
    )
    
    
    1,594Prepaid income taxes
    
    
    3,112
    
    
    
    (20
    )Prepaid expenses and other current assets
    
    
    (1,001
    )
    
    
    (339
    )Other assets, net
    
    
    31
    
    
    
    (321
    )Accounts payable
    
    
    4,694
    
    
    
    (333
    )Accrued liabilities and accrued interest
    
    
    1,604
    
    
    
    1,105Net cash provided by operating activities:
    
    
    15,098
    
    
    
    5,564CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (1,371
    )
    
    
    (1,429
    )Cash used in business acquisitions
    
    
    
    
    
    
    (24,907
    )Net cash used in investing activities:
    
    
    (1,371
    )
    
    
    (26,336
    )CASH FLOWS FROM FINANCING ACTIVITIES:Deferred debt issuance cost
    
    
    (23
    )
    
    
    Proceeds from bank line of credit
    
    
    1,015
    
    
    
    34,024Payments on notes payable and line of credit
    
    
    (25,809
    )
    
    
    (13,415
    )Cash paid for treasury shares
    
    
    (145
    )
    
    
    Payment of dividends
    
    
    (871
    )
    
    
    (768
    )Proceeds from issuance of common stock
    
    
    19,481
    
    
    
    37Net cash provided by (used in) financing activities:
    
    
    (6,352
    )
    
    
    19,878Net change in cash and cash equivalents
    
    
    7,375
    
    
    
    (894
    )Cash and cash equivalents, beginning of year
    
    
    5,670
    
    
    
    4,079Cash and cash equivalents, end of period
    
    $
    13,045
    
    
    $
    3,185SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    1,976
    
    
    $
    2,963Cash paid (refunded) for income taxes
    
    $
    (1,532
    )
    
    $
    1,042
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation:
 Company US GAAP
  2. Recent Accounting Pronouncements:
 FASB Accounting for Uncertainty in Income Taxes FIN 48 . SFAS Accounting for Income Taxes
 Fair Value Measurements SFAS 157
 The Fair Value Option for Financial Assets and
Financial Liabilities including an Amendment of FASB Statement No. 115 SFAS 159
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Business Combinations SFAS
141R Business Combinations SFAS 141
 Noncontrolling Interests in Consolidated
Financial Statements SFAS 160
 Disclosures about Derivative Instruments and
Hedging Activities SFAS 161
 3. Business Combinations:
 Old SSG Merger Transaction
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 4. Net Sales:
  For the Three Months Ended
    
    
    For the Nine Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Catalog
    
    $
    44,333
    
    
    $
    41,555
    
    
    $
    108,925
    
    
    $
    103,231Team Dealer
    
    
    21,488
    
    
    
    21,680
    
    
    
    81,359
    
    
    
    77,551Net sales
    
    $
    65,821
    
    
    $
    63,235
    
    
    $
    190,284
    
    
    $
    180,782
 5. Inventories:
   March 31,
    
    
    June 30,2008
    
    
    2007(In thousands)Raw materials
    
    $
    2,225
    
    
    $
    1,784Work in progress
    
    
    115
    
    
    
    114Finished goods
    
    
    29,963
    
    
    
    30,343Inventories
    
    $
    32,303
    
    
    $
    32,241
 6. Allowance for Doubtful Accounts:
  March 31,
    
    
    June 30,2008
    
    
    2007(In thousands)Balance at beginning of period
    
    $
    1,296
    
    
    $
    1,496Provision for uncollectible accounts receivable
    
    
    714
    
    
    
    1,099Accounts written off, net of recoveries
    
    
    (509
    )
    
    
    (1,299
    )Balance at end of period
    
    $
    1,501
    
    
    $
    1,296
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 7. Income Per Share:
  For the Three Months
    
    
    For the Nine MonthsEnded
    
    
    EndedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands except share and per share data)Determination of diluted number of shares:Average common shares outstanding
    
    
    12,296,813
    
    
    
    10,233,560
    
    
    
    12,043,082
    
    
    
    10,231,051Assumed exercise of dilutive stock options
    
    
    133,034
    
    
    
    127,829
    
    
    
    122,463
    
    
    
    144,418Assumed conversion of subordinated
Debentures
    
    
    3,412,969
    
    
    
    3,412,969
    
    
    
    3,412,969
    
    
    
    Diluted average common shares outstanding
    
    
    15,842,816
    
    
    
    13,774,358
    
    
    
    15,578,514
    
    
    
    10,375,469Calculation of diluted earnings per share:Net income
    
    $
    3,376
    
    
    $
    1,738
    
    
    $
    7,924
    
    
    $
    4,162Add: interest component on assumed
conversion of subordinated debentures,
net of taxes
    
    
    552
    
    
    
    552
    
    
    
    1,655
    
    
    
    Net income, adjusted
    
    $
    3,928
    
    
    $
    2,290
    
    
    $
    9,579
    
    
    $
    4,162Diluted earnings per share
    
    $
    0.25
    
    
    $
    0.17
    
    
    $
    0.61
    
    
    $
    0.40
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 8. Intangible Assets:
  March 31, 2008
    
    
    June 30, 2007Asset
    
    
    Gross
    
    
    
    
    
    
    
    
    
    
    Net
    
    Gross
    
    
    
    
    
    
    NetLife
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying(Years)
    
    
    Value
    
    
    Amortization
    
    
    Value
    
    
    Value
    
    
    Amortization
    
    
    Value(In thousands)Amortizable intangible assets:Trademarks
    
    
    10-15
    
    
    $
    343
    
    
    $
    216


    
    
    $
    127
    
    
    $
    343
    
    
    $
    199
    
    
    $
    144Non-compete agreements
    
    
    10
    
    
    
    3,200
    
    
    
        880
    
    
    
    2,320
    
    
    
    3,200
    
    
    
    640
    
    
    
    2,560Customer relationships
    
    
    10
    
    
    
    3,343
    
    
    
        1,478
    
    
    
    1,865
    
    
    
    3,343
    
    
    
    1,200
    
    
    
    2,143Contractual backlog
    
    
    .25-.50
    
    
    
    427
    
    
    
        427
    
    
    
    
    
    
    
    427
    
    
    
    427
    
    
    
    Customer database
    
    
    3
    
    
    
    660
    
    
    
        605
    
    
    
    55
    
    
    
    660
    
    
    
    440
    
    
    
    220Significant contracts
    
    
    5
    
    
    
    327
    
    
    
        180
    
    
    
    147
    
    
    
    327
    
    
    
    130
    
    
    
    197License agreements and other
    
    
    3-10
    
    
    
    493
    
    
    
        391
    
    
    
    102
    
    
    
    493
    
    
    
    343
    
    
    
    150Total amortizable intangible
assets

    
    
    
    
    $
    8,793
    
    
    $
        4,177
    
    
    $
    4,616
    
    
    $
    8,793
    
    
    $
    3,379
    
    
    $
    5,414Non-amortizable intangible
assets:Trademarks
    
    
    
    
    
    $
    2,610
    
    
    
        
    
    
    $
    2,610
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610Total non-amortizable
intangible assets

    
    
    
    
    $
    2,610
    
    
    
        
    
    
    $
    2,610
    
    
    $
    2,610
    
    
    
    
    
    
    $
    2,610Total intangible assets
    
    
    
    
    
    $
    11,403
    
    
    $
        4,177
    
    
    $
    7,226
    
    
    $
    11,403
    
    
    $
    3,379
    
    
    $
    8,024Goodwill  June 30, 2007
    
    
    
    
    
    $
    54,949Changes in goodwill
    
    
    
    
    
    
    Goodwill  March 31, 2008
    
    
    
    
    
    $
    54,949
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SPORT SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 9. Stockholders Equity:
  (In thousands)Stockholders equity at June 30, 2007
    
    $
    50,536Issuance of stock for cash
    
    
    19,482Treasury stock purchases
    
    
    (145
    )Stock-based compensation
    
    
    355Net income
    
    
    7,924Dividends declared
    
    
    (922
    )Stockholders equity at March 31, 2008
    
    $
    77,230
 10. Legal proceedings:
   11. Sales tax:
   - 9 -




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Overview
  Sport Supply Group we us our Company)
 Critical Accounting Policies
   Inventories.
  - 10 -




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Allowance for Doubtful Accounts.
  Goodwill, Intangibles and Long-lived Assets.
  - 11 -




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Consolidated Results of Operations
  For the Three Months Ended March 31,
    
    
    For the Nine Months Ended March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Dollars
    
    
    Percent
    
    
    Dollars
    
    
    Percent
    
    
    Dollars
    
    
    Percent
    
    
    Dollars
    
    
    PercentNet sales
    
    $
    65,821
    
    
    
    100.0
    %
    
    $
    63,235
    
    
    
    100.0
    %
    
    $
    190,284
    
    
    
    100.0
    %
    
    $
    180,782
    
    
    
    100.0
    %Gross profit
    
    
    24,082
    
    
    
    36.6
    %
    
    
    22,831
    
    
    
    36.1
    %
    
    
    68,983
    
    
    
    36.3
    %
    
    
    64,269
    
    
    
    35.6
    %Selling, general
and administrative
expenses
    
    
    17,750
    
    
    
    27.0
    %
    
    
    18,421
    
    
    
    29.1
    %
    
    
    53,328
    
    
    
    28.0
    %
    
    
    52,474
    
    
    
    29.0
    %Operating profit
    
    
    6,332
    
    
    
    9.6
    %
    
    
    4,410
    
    
    
    7.0
    %
    
    
    15,655
    
    
    
    8.2
    %
    
    
    11,795
    
    
    
    6.5
    %Net income
    
    
    3,376
    
    
    
    5.1
    %
    
    
    1,738
    
    
    
    2.7
    %
    
    
    7,924
    
    
    
    4.2
    %
    
    
    4,162
    
    
    
    2.3
    %Net income per
share  basic
    
    $
    0.27
    
    
    
    
    
    
    $
    0.17
    
    
    
    
    
    
    $
    0.66
    
    
    
    
    
    
    $
    0.41Net income per
share  diluted
    
    $
    0.25
    
    
    
    
    
    
    $
    0.17
    
    
    
    
    
    
    $
    0.61
    
    
    
    
    
    
    $
    0.40
 Acquisitions Since July 1, 2006 and Related Developments
 Old SSG Merger Transaction
   Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007
 Net Sales.
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Gross Profit.
  Selling, General and Administrative Expense. SG&A
 
    
    personnel related expenses (including group insurance) of approximately $10.4
million;
    
    advertising and catalog production expenses of approximately $1.6 million;
    
    depreciation and amortization of approximately $907 thousand;
    
    computer services and supplies of approximately $698 thousand;
    
    rent expense of approximately $588 thousand;
    
    travel expenses of approximately $509 thousand;
    
    outside professional services expenses of approximately $347 thousand; and
    
    bank charges and credit card fees of approximately $305 thousand.
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Operating Profit.
 Interest Expense.
 Income Taxes.
 Net Income.
 Nine Months Ended March 31, 2008 Compared to Nine Months Ended March 31, 2007
 Net Sales.
 Gross Profit.
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Selling, General and Administrative Expense.
 
    
    personnel related expenses (including group insurance) of approximately $30.9
million;
    
    advertising and catalog production expenses of approximately $4.7 million;
    
    depreciation and amortization of approximately $2.7 million;
    
    rent expense of approximately $2.0 million;
    
    computer services and supplies of approximately $1.8 million;
    
    travel expenses of approximately $1.5 million;
    
    legal and accounting fees of approximately $1.2 million;
    
    outside professional services expenses of approximately $963 thousand;
    
    bank charges of approximately $871 thousand;
    
    general insurance related expenses of approximately $813 thousand; and
    
    bad debt expenses of approximately $714 thousand.
  Operating Profit.
 Interest Expense.
 Minority Interest
 Income Taxes.
 Net Income.
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Liquidity and Capital Resources
 Liquidity
 Purchase
Agreement Purchaser Shares
 Operating Activities.
  
    
    an increase in accounts payable of $4.7 million during the nine months ended March
31, 2008, compared to a $333 thousand decrease in accounts payable during the nine
months ended March 31, 2007, which is attributable to improved management of the
Companys financial resources;
    
    a decrease in prepaid income taxes of $3.1 million during the nine months ended
March 31, 2008, compared to a $20 thousand increase in prepaid income taxes during
the nine months ended March 31, 2007, which is primarily attributable to $1.5 million
in taxes refunded; and
    
    a decrease in deferred taxes of $3.9 million during the nine months ended March
31, 2008, compared to a $2.0 million decrease in deferred taxes during the nine
months ended March 31, 2007, which is due primarily to the utilization of net
operating loss carryforwards.
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Investing Activities.
 Financing Activities.
   Capital Resources
 Notes
 Indenture
  - 17 -




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##### Table of Contents



SEC Registration Statement
 Amended Credit Agreement MLCFC
 Senior Credit Facility Revolving Facility
 Amendment No. 1
 
 EBITDA Senior
Leverage Ratio
 Fixed Charge Coverage Ratio
   - 18 -




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##### Table of Contents



Purchase
Agreement Purchaser Shares
   Dixie
  - 19 -




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##### Table of Contents



Long-Term Financial Obligations and Other Commercial Commitments
  Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 year
    
    
    1 - 3 years
    
    
    3 - 5 years
    
    
    5 years(In thousands)Long-term debt, including current portion
    
    $
    50,200
    
    
    $
    108
    
    
    $
    50,092
    
    
    $
    
    
    
    $
    Operating leases
    
    
    6,622
    
    
    
    2,892
    
    
    
    3,577
    
    
    
    148
    
    
    
    5Interest expense on long-term debt
    
    
    5,823
    
    
    
    2,909
    
    
    
    2,914
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    62,645
    
    
    $
    5,909
    
    
    $
    56,583
    
    
    $
    148
    
    
    $
    5
 Long-Term Debt and Advances Under Credit Facilities.
   Operating Leases.
 Off-Balance Sheet Arrangements.
  - 20 -




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##### Table of Contents



Statement Regarding Forward-Looking Disclosure
 This quarterly report on Form 10-Q , including Managements Discussion and Analysis of
Financial Condition and Results of Operations in Item 2, contains forward-looking statements that
involve risks and uncertainties, as well as assumptions that, if never materialized or are proven
incorrect, could cause the results of Sport Supply Group and its consolidated subsidiaries to
differ materially from those expressed or implied by such forward-looking statements. All
statements other than statements of historical fact are statements that could be deemed
forward-looking statements, including but not limited to any projections of net sales, gross
profit margin, expenses, earnings or losses from operations, synergies or other financial items,
including statements regarding ability and manner of satisfying short-term and long-term liquidity
requirements; any statements of the plans, strategies and objectives of management for future
operations; any statements regarding future economic conditions or performance; any statements of
expectation or belief; and any statements of assumptions underlying any of the foregoing. The
risks, uncertainties and assumptions referred to above include Sport Supply Groups ability to
integrate acquired businesses, global economic conditions, product demand, financial market
performance and other risks that are described herein, as well as those items described from time
to time in Sport Supply Groups SEC reports, including Sport Supply Groups annual report on Form
10-K for the fiscal year ended June 30, 2007. Sport Supply Group cautions that the foregoing list
of important factors is not all encompassing. Any forward-looking statements included in this
report are made as of the date of filing of this report with the SEC, and we assume no obligation
and do not intend to update these forward-looking statements.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rates.
  Foreign Currency and Derivatives.
 
 Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures. CEO CFO 1934
Act
  - 21 -




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Changes in Internal Control Over Financial Reporting.
  - 22 -




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Total Numberof Shares
    
    
    ApproximatePurchased as
    
    
    Dollar Value ofTotal
    
    
    
    
    
    
    Part of Publicly
    
    
    Shares that MayNumber of
    
    
    Average
    
    
    Announced
    
    
    yet be PurchasedShares
    
    
    Price Paid
    
    
    Plans or
    
    
    Under the PlansPurchased
    
    
    per Share
    
    
    Programs (1)
    
    
    or Programs (1)January 1 through
January 31, 2008
    
    
    17,900
    
    
    $
    8.12
    
    
    
    17,900
    
    
    $
    9,854,676
 (1)
    
    As previously disclosed in the Companys report on Form 8-K filed with the SEC on January 7,
2008, on January 4, 2008, the Companys Board of Directors authorized the repurchase of up to
$10.0 million worth of the Companys common stock.
  - 23 -




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##### Table of Contents



Item 6. Exhibits.
 A.
    
    Exhibits. The following exhibits are filed as part of this report:
 ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of
the Registrant.
    
    Exhibit 1 to the
Registrants Registration
Statement on Form 8-A
filed on September 9,
1999.3.1.1
    
    Certificate of Amendment to
Certificate of Incorporation of
Collegiate Pacific Inc.
    
    Exhibit 3.10 to the
Registrants Registration
Statement on Form SB-2
(No. 333-34294) originally
filed on April 7, 2000.3.1.2
    
    Amendment to Certificate of
Incorporation of Collegiate
Pacific Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K filed
on July 2, 2007.3.2
    
    By-Laws of the Registrant.
    
    Exhibit 2 to the
Registrants Registration
Statement on Form 8-A
filed on September 9,
1999.3.2.1
    
    Amendment to the Bylaws of
Collegiate Pacific Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K filed
on June 14, 2007.3.2.2
    
    Amendment to the Bylaws of
Collegiate Pacific Inc.
    
    Exhibit 3.2 to the
Registrants Current
Report on Form 8-K filed
on July 2, 2007.4.1
    
    Specimen Certificate of Common
Stock, $0.01 par value, of Sport
Supply Group, Inc.
    
    Exhibit 4.1 to the
Registrants Annual Report
on Form 10-K filed on
September 13, 2007.4.2
    
    Indenture, dated as of
November 26, 2004, by and
between Collegiate Pacific Inc.
and The Bank of New York Trust
Company N.A., as Trustee.
    
    Exhibit 99.1 to the
Registrants Current
Report on Form 8-K filed
on November 29, 2004.4.3
    
    Form of 5.75% Convertible Senior
Subordinated Note Due 2009
(included in Section 2.2 of
Exhibit 4.2 to this report).
    
    Exhibit 99.2 to the
Registrants Current
Report on Form 8-K filed
on November 29, 2004.10.1
    
    Amendment No. 1 to Amended and
Restated Credit Agreement, dated
January 7, 2008, by and between
Sport Supply Group, Inc. and
Merrill Lynch Commercial
Financing Corp.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K filed
on January 9, 2008.
  - 24 -




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##### Table of Contents



ExhibitNumber
    
    Description31.1
    
    Certification of Adam Blumenfeld
pursuant to Rule 13a-14(a) or
15(d)-14(a) of the Securities
Exchange Act of 1934, as adopted
pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of John Pitts
pursuant to Rule 13a-14(a) or
15(d)-14(a) of the Securities
Exchange Act of 1934, as adopted
pursuant to Section 302 of theSarbanes-Oxley Act of 2002.*32
    
    Certification of Adam Blumenfeld
and John Pitts pursuant to 18
U.S.C. Section 1350 as adopted
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.**
 
 *
    
    Filed herewith**
    
    Furnished herewith  - 25 -




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##### Table of Contents



SIGNATURES
  SPORT SUPPLY GROUP, INC.Dated: April 30, 2008
    /s/ Adam BlumenfeldAdam Blumenfeld, Chief Executive Officer/s/ John PittsJohn Pitts, Chief Financial Officer(Principal Financial and Accounting Officer)  - 26 -




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation
of the Registrant.
    
    Exhibit 1 to the
Registrants
Registration Statement
on Form 8-A filed on
September 9, 1999.3.1.1
    
    Certificate of Amendment to
Certificate of Incorporation
of Collegiate Pacific Inc.
    
    Exhibit 3.10 to the
Registrants
Registration Statement
on Form SB-2
(No. 333-34294)
originally filed on
April 7, 2000.3.1.2
    
    Amendment to Certificate of
Incorporation of Collegiate
Pacific Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K
filed on July 2, 2007.3.2
    
    By-Laws of the Registrant.
    
    Exhibit 2 to the
Registrants
Registration Statement
on Form 8-A filed on
September 9, 1999.3.2.1
    
    Amendment to the Bylaws of
Collegiate Pacific Inc.
    
    Exhibit 3.1 to the
Registrants Current
Report on Form 8-K
filed on June 14, 2007.3.2.2
    
    Amendment to the Bylaws of
Collegiate Pacific Inc.
    
    Exhibit 3.2 to the
Registrants Current
Report on Form 8-K
filed on July 2, 2007.4.1
    
    Specimen Certificate of
Common Stock, $0.01 par
value, of Sport Supply Group,
Inc.
    
    Exhibit 4.1 to the
Registrants Annual
Report on Form 10-K
filed on September 13,
2007.4.2
    
    Indenture, dated as of
November 26, 2004, by and
between Collegiate Pacific
Inc. and The Bank of New York
Trust Company N.A., as Trustee.
    
    Exhibit 99.1 to the
Registrants Current
Report on Form 8-K
filed on November 29,
2004.4.3
    
    Form of 5.75% Convertible
Senior Subordinated Note Due
2009 (included in Section 2.2
of Exhibit 4.2 to this
report).
    
    Exhibit 99.2 to the
Registrants Current
Report on Form 8-K
filed on November 29,
2004.10.1
    
    Amendment No. 1 to Amended
and Restated Credit
Agreement, dated January 7,
2008, by and between Sport
Supply Group, Inc. and Merrill Lynch Commercial
Financing Corp.
    
    Exhibit 10.1 to the
Registrants Current
Report on Form 8-K
filed on January 9,
2008.




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##### Table of Contents



ExhibitNumber
    
    Description31.1
    
    Certification of Adam
Blumenfeld pursuant to Rule
13a-14(a) or 15(d)-14(a) of
the Securities Exchange Act
of 1934, as adopted pursuant
to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of John Pitts
pursuant to Rule 13a-14(a) or
15(d)-14(a) of the Securities
Exchange Act of 1934, as
adopted pursuant to Section
302 of the Sarbanes-Oxley Act
of 2002.*32
    
    Certification of Adam
Blumenfeld and John Pitts
pursuant to 18 U.S.C. Section
1350 as adopted pursuant to
Section 906 of the
Sarbanes-Oxley Act of 2002.**
 
 *
    
    Filed herewith**
    
    Furnished herewith