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Superior Group of Companies, Inc. Reports Operating Results for the Third Quarter Ended September 30, 2019

  • Promotional Products sales up 38 percent
  • Remote Staffing Solutions segment sales up 17 percent
  • Consolidated Net Sales decreased 7 percent

SEMINOLE, Fla., Oct. 23, 2019 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (SGC), today announced its third quarter operating results for 2019.

The Company announced that for the third quarter ended September 30, 2019, net sales decreased 7.0 percent to $89.5 million, compared to third quarter 2018 net sales of $95.9 million. Pretax Income was $4.6 million compared to $7.3 million in 2018. Net income was $3.9 million or $0.26 per diluted share, compared to $0.39 per diluted share in 2018.  

Michael Benstock, Chief Executive Officer commented “We are very pleased with the performance at BAMKO and The Office Gurus whose businesses continued to grow significantly in very competitive environments. Uniform segment sales were down between comparable periods, largely the result of initiatives taken by the company to reduce merchandise levels, resulting in fewer receipts, and lower revenues based upon current revenue recognition standards.  Also during the quarter we experienced sales disruption at CID caused by a warehouse system implementation. On an overall basis, we made good progress and remain on schedule on our ERP integration initiatives intended to align infrastructure, support enterprise growth and value creation for all stakeholders” concluded Mr. Benstock.

CONFERENCE CALL

Superior Group of Companies will hold a conference call on Wednesday, October 23, 2019 at 2:00 p.m. Eastern Time to discuss the Company’s results. Interested individuals may join the teleconference by dialing (844) 861-5505 for U.S. dialers and (412) 317-6586 for International dialers. The Canadian Toll Free number is (866) 605-3852. Please ask to be joined into the Superior Group of Companies call. The live webcast and archived replay can also be accessed in the investor information section of the Company’s website at www.superiorgroupofcompanies.com.

A telephone replay of the teleconference will be available one hour after the end of the call through 2:00 p.m. Eastern Time on November 6, 2019. To access the replay, dial (877) 344-7529 in the United States or (412) 317-0088 from international locations.  Canadian dialers can access the replay at (855) 669-9658.  Please reference conference number 10135411 for all replay access.

About Superior Group of Companies, Inc. (SGC):

Superior Group of Companies, formerly Superior Uniform Group, established in 1920, is a combination of companies that help customers unlock the power of their brands by creating extraordinary brand experiences for employees and customers. It provides customized support for each of its divisions through its shared services model.

Fashion Seal Healthcare®, HPI and CID Resources are signature uniform brands of Superior Group of Companies. Each is one of America’s leading providers of uniforms and image apparel in the markets it serves. They specialize in innovative uniform program design, global manufacturing, and state-of-the-art distribution. Every day, more than 6 million Americans go to work wearing a uniform from Superior Group of Companies.

BAMKO®, Tangerine Promotions® and Public Identity® are signature promotional products and branded merchandise brands of Superior Group of Companies. They provide unique custom branding, design, sourcing, and marketing solutions to some of the world’s most successful brands.

The Office Gurus® is a global provider of custom call and contact center support. As a true strategic partner, The Office Gurus implements customized solutions for its customers in order to accelerate their growth and improve their customers’ service experiences.

SGC’s commitment to service, technology, quality and value-added benefits, as well as its financial strength and resources, provides unparalleled support for its customers’ diverse needs while embracing a “Customer 1st, Every Time!” philosophy and culture in all of its business segments.

Visit www.superiorgroupofcompanies.com for more information.

Contact:
Michael Attinella
Chief Financial Officer & Treasurer
(727) 803-7170

OR

Hala Elsherbini
Halliburton Investor Relations
(972) 458-8000

Comparative figures are as follows:

 SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
       
Three Months Ended September 30,
(Unaudited)
(In thousands, except shares and per share data)
       
    2019     2018
       
Net sales $ 89,466   $ 95,870
       
Costs and expenses:      
Cost of goods sold   58,015     62,070
Selling and administrative expenses   25,260     25,482
Other periodic pension costs   476     96
Interest expense   1,085     940
    84,836     88,588
Income before taxes on income   4,630     7,282
Income tax expense   709     1,160
Net income $ 3,921   $ 6,122
       
Net income per share:      
Basic $ 0.26   $ 0.41
Diluted $ 0.26   $ 0.39
       
Weighted average number of shares outstanding during the period      
Basic   14,947,552     15,010,660
Diluted   15,266,850     15,499,894
       
Cash dividends per common share $ 0.10   $ 0.10
       


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
       
Nine Months Ended September 30,
(Unaudited)
(In thousands, except shares and per share data)
       
    2019     2018
       
Net sales $ 268,288   $ 251,349
       
Costs and expenses:      
Cost of goods sold   174,226     163,396
Selling and administrative expenses   78,008     69,991
Other periodic pension costs   1,282     289
Interest expense   3,514     1,974
    257,030     235,650
Income before taxes on income   11,258     15,699
Income tax expense   2,180     3,310
Net income $ 9,078   $ 12,389
       
Net income per share:      
Basic $ 0.61   $ 0.83
Diluted $ 0.59   $ 0.80
       
Weighted average number of shares outstanding during the period      
Basic   14,942,565     14,929,513
Diluted   15,272,287     15,505,642
       
Cash dividends per common share $ 0.30   $ 0.29
       


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and par value data)
       
       
  September 30,   December 31,
    2019       2018  
       
ASSETS
Current assets:      
Cash and cash equivalents $ 5,452     $ 5,362  
Accounts receivable, less allowance for doubtful accounts of $2,259 and $2,042, respectively   75,597       64,017  
Accounts receivable - other   1,262       1,744  
Inventories   66,076       67,301  
Contract assets   38,030       49,236  
Prepaid expenses and other current assets   16,481       9,552  
Total current assets   202,898       197,212  
       
Property, plant and equipment, net   31,725       28,769  
Operating lease right-of-use assets   4,576       -  
Intangible assets, net   63,491       66,312  
Goodwill   36,252       33,961  
Other assets   10,443       8,832  
Total assets $ 349,385     $ 335,086  
       
LIABILITIES AND SHAREHOLDERS’ EQUITY
       
Current liabilities:      
Accounts payable $ 30,768     $ 24,685  
Other current liabilities   16,110       14,767  
Current portion of long-term debt   15,286       6,000  
Current portion of acquisition-related contingent liabilities   1,374       941  
Total current liabilities   63,538       46,393  
       
Long-term debt   103,812       111,522  
Long-term pension liability   8,422       8,705  
Long-term acquisition-related contingent liabilities   3,753       5,422  
Long-term operating lease liabilities   2,590       -  
Deferred tax liability   6,620       8,475  
Other long-term liabilities   4,230       3,648  
Commitments and contingencies (Note 5)      
Shareholders' equity:      
Preferred stock, $.001 par value - authorized 300,000 shares (none issued)     -       -  
Common stock, $.001 par value - authorized 50,000,000 shares, issued and
outstanding 15,240,317 and 15,202,387 shares, respectively.
  15       15  
Additional paid-in capital   57,077       55,859  
Retained earnings   106,426       103,032  
Accumulated other comprehensive income (loss), net of tax:      
Pensions   (6,475 )     (7,673 )
Cash flow hedges     97       113  
Foreign currency translation adjustment     (720 )     (425 )
Total shareholders’ equity   156,420       150,921  
Total liabilities and shareholders’ equity $ 349,385     $ 335,086  
       


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
(Unaudited)
(In thousands)
       
       
    2019       2018  
       
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income $ 9,078     $ 12,389  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   6,339       5,745  
Provision for bad debts - accounts receivable   719       409  
Share-based compensation expense   997       1,867  
Deferred income tax benefit   (2,136 )     (278 )
Gain on sale of property, plant and equipment   (5 )     -  
Change in fair value of acquisition-related contingent liabilities   (272 )     (1,212 )
Changes in assets and liabilities, net of acquisition of business:      
Accounts receivable - trade   (12,251 )     (5,542 )
Accounts receivable - other   481       (401 )
Contract assets   11,206       (3,779 )
Inventories   (595 )     5,742  
Prepaid expenses and other current assets   (7,051 )     (226 )
Other assets   (2,233 )     (2,343 )
Accounts payable and other current liabilities   5,523       (1,077 )
Long-term pension liability   1,292       292  
Other long-term liabilities   750       (283 )
Net cash provided by operating activities   11,842       11,303  
       
CASH FLOWS FROM INVESTING ACTIVITIES      
Additions to property, plant and equipment   (6,424 )     (3,881 )
Proceeds from disposals of property, plant and equipment   5       -  
Acquisition of businesses, net of acquired cash   -       (85,597 )
Net cash used in investing activities   (6,419 )     (89,478 )
       
CASH FLOWS FROM FINANCING ACTIVITIES      
Proceeds from borrowings of debt   125,121       170,713  
Repayment of debt   (123,600 )     (91,423 )
Payment of cash dividends   (4,533 )     (4,335 )
Payment of acquisition-related contingent liability   (961 )     (3,032 )
Proceeds received on exercise of stock options   283       432  
Tax benefit from vesting of acquisition-related restricted stock   30       445  
Tax withholding on exercise of stock rights   -       (17 )
Common stock reacquired and retired   (1,243 )     (268 )
Net cash provided by (used in) financing activities   (4,903 )     72,515  
       
Effect of currency exchange rates on cash   (430 )     (174 )
Net increase (decrease) in cash and cash equivalents   90       (5,834 )
Cash and cash equivalents balance, beginning of year   5,362       8,130  
Cash and cash equivalents balance, end of period $ 5,452     $ 2,296