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Superior Group of Companies, Inc. Reports Operating Results for the Second Quarter June 30, 2019

  • Net Sales increased 12 percent 
  • 27th Consecutive Quarter with Sales Increase

SEMINOLE, Fla., July 30, 2019 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (SGC), today announced its second quarter operating results for 2019.

The Company announced that for the second quarter ended June 30, 2019, net sales increased 12.0 percent to $92.3 million, compared to second quarter 2018 net sales of $82.4 million. Pretax Income was $3.7 million compared to $5.1 million in 2018. Net income was $2.8 million or $0.18 per diluted share, compared to $0.25 per diluted share in 2018.  

Michael Benstock, Chief Executive Officer, commented, “Across all of our segments, we continue to perform well in a challenging business environment. We’re currently investing in our companies and making the organizational changes necessary to support our current business and prepare for our next level of growth; all while realizing increased sales for our 27th consecutive quarter.

Our uniform segment sales were up 7.7% from last year, as we reached the first anniversary of our acquisition of CID Resources.  We’re making good progress on the integration of our uniform businesses enabling operational efficiencies, improved resource alignment, product sourcing, and sales channels. Technology upgrades are moving forward in our distribution centers in Arkansas and Texas, and construction continues on our second manufacturing facility in Haiti. Our investments in these initiatives are designed to generate cost efficiencies, improve working capital usage, and better serve the needs of our customers.

We continue to see strong growth at BAMKO and The Office Gurus. During the second quarter, BAMKO, our promotional products segment posted sales growth of 24.9% to $23.7 million compared to the second quarter of last year. The Office Gurus, our remote staffing segment, continues to perform to our expectations with quarterly net sales growth to outside customers of 11.6% over the comparable period.”   
   
CONFERENCE CALL

Superior Group of Companies will hold a conference call on Tuesday, July 30, 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 August 13, 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 10132243 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    Hala Elsherbini
Chief Financial Officer & Treasurer      OR      Halliburton Investor Relations
(727) 803-7170    (972) 458-8000

Comparative figures are as follows:

  SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES  
  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
                         
  THREE MONTHS ENDED JUNE 30,  
  (Unaudited)  
  (In thousands, except shares and per share data)  
                         
                  2019   2018  
                         
  Net sales         $ 92,270 $ 82,392  
                         
  Costs and expenses:                
    Cost of goods sold         59,927   53,114  
    Selling and administrative expenses       26,885   23,327  
    Other periodic pension costs         547   96  
    Interest expense         1,259   758  
                  88,618   77,295  
                         
  Income before taxes on income         3,652   5,097  
  Income tax expense         871   1,280  
                         
  Net income         $ 2,781 $ 3,817  
                         
  Weighted average number of shares outstanding during the period        
    (Basic)             14,952,802   14,956,221  
    (Diluted)             15,287,357   15,559,404  
  Per Share Data:                  
  Basic                    
    Net income       $   0.19 $ 0.26  
  Diluted                    
    Net income       $   0.18 $ 0.25  
                         
  Cash dividends per common share       $   0.100 $ 0.095  
                         

 

  SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES  
  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
                         
  SIX MONTHS ENDED JUNE 30,  
  (Unaudited)  
  (In thousands, except shares and per share data)  
                         
                  2019   2018  
                         
  Net sales         $ 178,822 $ 155,479  
                         
  Costs and expenses:                
    Cost of goods sold         116,211   101,326  
    Selling and administrative expenses       52,748   44,509  
    Other periodic pension costs         806   192  
    Interest expense         2,429   1,035  
                  172,194   147,062  
                         
  Income before taxes on income         6,628   8,417  
  Income tax expense         1,471   2,150  
                         
  Net income         $ 5,157 $ 6,267  
                         
  Weighted average number of shares outstanding during the period        
    (Basic)             14,940,072   14,888,940  
    (Diluted)             15,275,006   15,508,517  
  Per Share Data:                  
  Basic                    
    Net income       $   0.35 $ 0.42  
  Diluted                    
    Net income       $   0.34 $ 0.40  
                         
  Cash dividends per common share       $   0.20 $ 0.19  
                         

 

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited)  
(In thousands, except share and par value data)  
                     
                     
              June 30,   December 31,  
              2019
  2018
 
                     
ASSETS  
CURRENT ASSETS:            
  Cash and cash equivalents     $ 8,267   $ 5,362    
  Accounts receivable, less allowance for doubtful accounts          
  of  $2,141 and $2,042, respectively       70,927     64,017    
  Accounts receivable - other       1,463     1,744    
  Inventories         63,370     67,301    
  Contract assets         43,674     49,236    
  Prepaid expenses and other current assets       12,090     9,552    
  TOTAL CURRENT ASSETS         199,791     197,212    
                     
PROPERTY, PLANT AND EQUIPMENT, NET     31,448     28,769    
OPERATING LEASE RIGHT-OF-USE ASSETS     4,716     -    
INTANGIBLE ASSETS, NET         64,437     66,312    
GOODWILL             36,321     33,961    
OTHER ASSETS         10,299     8,832    
TOTAL ASSETS       $ 347,012   $ 335,086    
                     
LIABILITIES AND SHAREHOLDERS' EQUITY  
                     
CURRENT LIABILITIES:                
  Accounts payable       $ 25,903   $ 24,685    
  Other current liabilities       15,375     14,767    
  Current portion of long-term debt       15,286     6,000    
  Current portion of acquisition-related contingent liabilities   2,212     941    
  TOTAL CURRENT LIABILITIES       58,776     46,393    
                     
LONG-TERM DEBT         108,035     111,522    
LONG-TERM PENSION LIABILITY       8,532     8,705    
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES   3,605     5,422    
LONG-TERM OPERATING LEASE LIABILITIES     2,864     -    
DEFERRED TAX LIABILITY       6,730     8,475    
OTHER LONG-TERM LIABILITIES       4,350     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 - 15,255,694 and 15,202,387, respectively.   15     15    
  Additional paid-in capital       57,166     55,859    
  Retained earnings         104,165     103,032    
  Accumulated other comprehensive income (loss), net of tax:          
    Pensions           (6,924 )   (7,673 )  
    Cash flow hedges         102     113    
    Foreign currency translation adjustment     (404 )   (425 )  
TOTAL SHAREHOLDERS' EQUITY       154,120     150,921    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 347,012   $ 335,086    
                     

 

  SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  SIX MONTHS ENDED JUNE 30,
  (Unaudited)
  (In thousands)
                   
                 
              2019
  2018
                   
CASH FLOWS FROM OPERATING ACTIVITIES        
  Net income     $ 5,157   $ 6,267  
  Adjustments to reconcile net income        
  to net cash provided by (used in) operating activities:        
    Depreciation and amortization   4,211     3,646  
    Provision for bad debts - accounts receivable   361     323  
    Share-based compensation expense   1,032     1,490  
    Deferred income tax benefit (provision)   (1,979 )   302  
    Gain on sale of property, plant and equipment   (3 )   -  
    Change in fair value of acquisition-related contingent liabilities   417     (840 )
                   
    Changes in assets and liabilities, net of acquisition of business:        
      Accounts receivable - trade   (7,230 )   (3,492 )
      Accounts receivable - other   280     (674 )
      Contract assets     5,562     (972 )
      Inventories     2,113     2,953  
      Prepaid expenses and other current assets   (2,625 )   242  
      Other assets     (2,102 )   (1,827 )
      Accounts payable and other current liabilities   (14 )   (7,368 )
      Long-term pension liability   812     195  
      Other long-term liabilities   759     (497 )
    Net cash provided by (used in) operating activities   6,751     (252 )
                   
CASH FLOWS FROM INVESTING ACTIVITIES        
    Additions to property, plant and equipment   (4,979 )   (2,414 )
    Proceeds from disposals of property, plant and equipment   3     -  
    Acquisition of businesses, net of acquired cash   -     (85,597 )
    Net cash used in investing activities   (4,976 )   (88,011 )
               
CASH FLOWS FROM FINANCING ACTIVITIES        
    Proceeds from long-term debt   94,466     146,157  
    Repayment of long-term debt   (88,667 )   (56,289 )
    Payment of cash dividends     (3,023 )   (2,827 )
    Payment of acquisition-related contingent liability   (961 )   (3,033 )
    Proceeds received on exercise of stock options   280     405  
    Tax benefit from vesting of acquisition-related restricted stock   30     105  
    Tax withholding on exercise of stock rights   -     (17 )
    Common stock reacquired and retired   (1,036 )   -  
  Net cash provided by financing activities   1,089     84,501  
                   
  Effect of currency exchange rates on cash   41     (204 )
                   
  Net increase (decrease) in cash and cash equivalents   2,905     (3,966 )
                 
Cash and cash equivalents balance, beginning of year   5,362     8,130  
                   
Cash and cash equivalents balance, end of period   $ 8,267     $ 4,164