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

Superior Group of Companies, Inc. (NASDAQ: 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 [phone] for U.S. dialers and [phone] for International dialers. The Canadian Toll Free number is [phone]. 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 [phone] in the United States or [phone] from international locations.  Canadian dialers can access the replay at [phone].  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
[phone]		[phone]

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