Superior Group of Companies, Inc. (NASDAQ: SGC) (the
“Company”), today announced its first quarter
2024 results.
“The year is off to a strong start, with
year-over-year revenue and EBITDA growth for all three of our
business segments driving positive cash flow and improved financial
flexibility,” said Michael Benstock, Chief Executive Officer. “To
capitalize on gradually improving underlying trends across our
attractive end markets, our team’s focus is on strong customer
service and retention. With an always long-term view of our
business, we are also prudently investing in talent, processes and
systems to capture future market share to enhance our long-term
profitability and create additional shareholder value. We remain
confident in our future outlook and are raising our full-year
expectations, as we are seeing positive momentum across each of our
business segments.”
First Quarter Results
For the first quarter ended March 31, 2024,
net sales increased 6.2% to $138.8 million, compared
to first quarter 2023 net sales of $130.8 million.
Pretax income was $4.6 million compared to
$0.9 million in the first quarter of 2023. Net
income was $3.9 million or $0.24 per diluted
share compared to $0.9 million, or $0.06 per diluted
share for the first quarter of 2023.
First Quarter 2024 Dividend
The Board of Directors declared a quarterly dividend of
$0.14 per share, payable June 3, 2024 to shareholders of
record as of May 20, 2024.
2024 Full-Year Outlook
The Company is raising its full year 2024 sales
outlook to a range of $563 million to $570 million from the prior
range of $558 million to $568 million, and versus 2023 sales of
$543 million. Also, the Company is raising its full-year earnings
per diluted share forecast to a range of $0.73 to $0.79, which
reflects improved operating performance, partially offset by
incremental stock compensation expense from the May issuance of
performance-based stock awards. The updated earnings per diluted
share outlook is up from the prior range of $0.61 to $0.68 and
compares to $0.54 in 2023.
Webcast and Conference Call
The Company will host a webcast and conference
call at 5:00 pm Eastern Time today. The live webcast and archived
replay can be accessed in the investor relations section of the
Company's website at
https://ir.superiorgroupofcompanies.com/Presentations. Interested
individuals may also join the teleconference by dialing
1-844-861-5505 for U.S. dialers and 1-412-317-6586 for
International dialers. The Canadian Toll-Free number is
1-866-605-3852. Please ask to be joined to the Superior Group of
Companies call. A telephone replay of the teleconference will be
available through May 21, 2024. To access the replay,
dial 1-877-344-7529 in the United States or 1-412-317-0088 from
international locations. Canadian dialers can access the replay at
855-669-9658. Please reference conference number 6849361 for
replay access.
Disclosure Regarding Forward Looking
Statements
Certain matters discussed in this press
release are “forward-looking statements” intended to qualify
for the safe harbors from liability established by the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified by use of the words “may,”
“will,” “should,” “could,” “expect,” “anticipate,” “estimate,”
“believe,” “intend,” “project,” “potential,” or “plan” or the
negative of these words or other variations on these words or
comparable terminology. Forward-looking statements in this press
release may include, without
limitation: (1) projections of revenue, income, and other
items relating to our financial position and results of operations,
including short term and long term plans for cash, (2)
statements of our plans, objectives, strategies, goals and
intentions, (3) statements regarding the capabilities, capacities,
market position and expected development of our business operations
and (4) statements of expected industry and general economic
trends.
Such forward-looking statements are subject to
certain risks and uncertainties that may materially adversely
affect the anticipated results. Such risks and uncertainties
include, but are not limited to, the following: the impact of
competition; uncertainties related to supply disruptions,
inflationary environment (including with respect to the cost of
finished goods and raw materials and shipping costs), employment
levels (including labor shortages), and general economic and
political conditions in the areas of the world in which the Company
operates or from which it sources its supplies or the areas of the
United States of America (“U.S.” or “United States”) in which the
Company’s customers are located; changes in the
healthcare, retail chain, food service, transportation
and other industries where uniforms and service apparel are
worn; our ability to identify suitable acquisition targets,
discover liabilities associated with such businesses during the
diligence process, successfully integrate any acquired businesses,
or successfully manage our expanding operations; the price and
availability of raw materials; attracting and retaining senior
management and key personnel; the effect of the Company’s
previously disclosed material weakness in internal control
over financial reporting; the Company’s ability to successfully
remediate its material weakness in internal control over
financial reporting and to maintain effective internal control over
financial reporting; and other factors described in the Company’s
filings with the Securities and Exchange Commission, including
those described in the “Risk Factors” section of our Annual
Report on Form 10-K for the fiscal year ended December 31,
2023 and the Quarterly Report on Form 10-Q for the quarter
ended March 31, 2024. Shareholders, potential investors and other
readers are urged to consider these factors carefully in evaluating
the forward-looking statements made herein and are cautioned not to
place undue reliance on such forward-looking statements. The
forward-looking statements made herein are only made as of the date
of this press release and we disclaim any obligation to
publicly update such forward-looking statements to reflect
subsequent events or circumstances, except as may be required by
law.
About Superior Group of Companies, Inc.
(SGC):Established in 1920, Superior Group of Companies is
comprised of three attractive business segments each serving large,
fragmented and growing addressable markets. Across Healthcare
Apparel, Branded Products and Contact Centers, each segment enables
businesses to create extraordinary brand engagement experiences for
their customers and employees. SGC’s commitment to service,
quality, advanced technology, and omnichannel commerce provides
unparalleled competitive advantages. We are committed to enhancing
shareholder value by continuing to pursue a combination of organic
growth and strategic acquisitions. For more information, visit
www.superiorgroupofcompanies.com.
Investor Relations
Contact:Investors@Superiorgroupofcompanies.com
Comparative figures are as follows:
|
SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
|
(In thousands, except shares and per share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Net sales |
|
$ |
138,842 |
|
|
$ |
130,773 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
83,525 |
|
|
|
83,665 |
|
Selling and administrative expenses |
|
|
48,749 |
|
|
|
43,379 |
|
Other periodic pension costs |
|
|
189 |
|
|
|
214 |
|
Interest expense |
|
|
1,787 |
|
|
|
2,570 |
|
|
|
|
134,250 |
|
|
|
129,828 |
|
Income before income tax
expense |
|
|
4,592 |
|
|
|
945 |
|
Income tax expense |
|
|
680 |
|
|
|
57 |
|
Net income |
|
$ |
3,912 |
|
|
$ |
888 |
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.24 |
|
|
$ |
0.06 |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding during the period: |
|
|
|
|
|
|
|
|
Basic |
|
|
16,028,032 |
|
|
|
15,882,994 |
|
Diluted |
|
|
16,453,452 |
|
|
|
16,118,329 |
|
|
|
|
|
|
|
|
|
|
Cash dividends per common
share |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands, except shares and par value data) |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
22,040 |
|
|
$ |
19,896 |
|
Accounts receivable, less allowance for doubtful accounts of $4,213
and $4,237, respectively |
|
|
93,737 |
|
|
|
103,494 |
|
Accounts receivable - other |
|
|
119 |
|
|
|
307 |
|
Inventories |
|
|
92,573 |
|
|
|
98,067 |
|
Contract assets |
|
|
52,511 |
|
|
|
48,715 |
|
Prepaid expenses and other current assets |
|
|
6,549 |
|
|
|
8,881 |
|
Total current assets |
|
|
267,529 |
|
|
|
279,360 |
|
Property, plant and equipment,
net |
|
|
45,319 |
|
|
|
46,890 |
|
Operating lease right-of-use
assets |
|
|
17,484 |
|
|
|
17,909 |
|
Deferred tax asset |
|
|
12,349 |
|
|
|
12,356 |
|
Intangible assets, net |
|
|
50,150 |
|
|
|
51,160 |
|
Other assets |
|
|
15,650 |
|
|
|
14,775 |
|
Total assets |
|
$ |
408,481 |
|
|
$ |
422,450 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
41,653 |
|
|
$ |
50,520 |
|
Other current liabilities |
|
|
40,414 |
|
|
|
43,978 |
|
Current portion of long-term debt |
|
|
5,156 |
|
|
|
4,688 |
|
Current portion of acquisition-related contingent liabilities |
|
|
942 |
|
|
|
1,403 |
|
Total current liabilities |
|
|
88,165 |
|
|
|
100,589 |
|
Long-term debt |
|
|
84,445 |
|
|
|
88,789 |
|
Long-term pension
liability |
|
|
13,361 |
|
|
|
13,284 |
|
Long-term acquisition-related
contingent liabilities |
|
|
612 |
|
|
|
557 |
|
Long-term operating lease
liabilities |
|
|
12,513 |
|
|
|
12,809 |
|
Other long-term
liabilities |
|
|
8,564 |
|
|
|
8,784 |
|
Total liabilities |
|
|
207,660 |
|
|
|
224,812 |
|
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 16,743,723 and 16,564,712 shares,
respectively |
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
79,602 |
|
|
|
77,443 |
|
Retained earnings |
|
|
123,946 |
|
|
|
122,464 |
|
Accumulated other comprehensive loss, net of tax: |
|
|
|
|
|
|
|
|
Pensions |
|
|
(1,099 |
) |
|
|
(1,122 |
) |
Foreign currency translation adjustment |
|
|
(1,644 |
) |
|
|
(1,163 |
) |
Total shareholders’ equity |
|
|
200,821 |
|
|
|
197,638 |
|
Total liabilities and shareholders’ equity |
|
$ |
408,481 |
|
|
$ |
422,450 |
|
|
SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
(In thousands) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,912 |
|
|
$ |
888 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,252 |
|
|
|
3,388 |
|
Inventory write-downs |
|
|
420 |
|
|
|
- |
|
Provision for bad debts - accounts receivable |
|
|
83 |
|
|
|
(97 |
) |
Share-based compensation expense |
|
|
1,015 |
|
|
|
1,080 |
|
Change in fair value of acquisition-related contingent
liabilities |
|
|
152 |
|
|
|
(563 |
) |
Change in fair value of written put options |
|
|
392 |
|
|
|
(442 |
) |
Changes in assets and liabilities, net of acquisition of
businesses: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
9,419 |
|
|
|
10,150 |
|
Accounts receivable - other |
|
|
188 |
|
|
|
2,928 |
|
Contract assets |
|
|
(3,835 |
) |
|
|
1,590 |
|
Inventories |
|
|
5,010 |
|
|
|
2,807 |
|
Prepaid expenses and other current assets |
|
|
2,252 |
|
|
|
2,403 |
|
Other assets |
|
|
(803 |
) |
|
|
(657 |
) |
Accounts payable and other current liabilities |
|
|
(12,122 |
) |
|
|
1,596 |
|
Long-term pension liability |
|
|
108 |
|
|
|
209 |
|
Other long-term liabilities |
|
|
4 |
|
|
|
(230 |
) |
Net cash provided by operating activities |
|
|
9,447 |
|
|
|
25,050 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
Additions to property, plant
and equipment |
|
|
(675 |
) |
|
|
(2,114 |
) |
Net cash used in investing activities |
|
|
(675 |
) |
|
|
(2,114 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from borrowings of
debt |
|
|
7,000 |
|
|
|
1,000 |
|
Repayment of debt |
|
|
(10,937 |
) |
|
|
(12,938 |
) |
Payment of cash dividends |
|
|
(2,330 |
) |
|
|
(2,295 |
) |
Payment of acquisition-related
contingent liabilities |
|
|
(557 |
) |
|
|
- |
|
Proceeds received on exercise
of stock options |
|
|
449 |
|
|
|
35 |
|
Net cash used in financing activities |
|
|
(6,375 |
) |
|
|
(14,198 |
) |
|
|
|
|
|
|
|
|
|
Effect of currency exchange
rates on cash |
|
|
(253 |
) |
|
|
140 |
|
Net increase in cash and cash
equivalents |
|
|
2,144 |
|
|
|
8,878 |
|
Cash and cash equivalents
balance, beginning of period |
|
|
19,896 |
|
|
|
17,722 |
|
Cash and cash equivalents
balance, end of period |
|
$ |
22,040 |
|
|
$ |
26,600 |
|
|
SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
NON-GAAP FINANCIAL MEASURES |
(Unaudited) |
(In thousands, except shares and per share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Net income |
|
$ |
3,912 |
|
|
$ |
888 |
|
Interest expense |
|
|
1,787 |
|
|
|
2,570 |
|
Income tax expense |
|
|
680 |
|
|
|
57 |
|
Depreciation and
amortization |
|
|
3,252 |
|
|
|
3,388 |
|
EBITDA(1) |
|
$ |
9,631 |
|
|
$ |
6,903 |
|
|
|
|
|
|
|
|
|
|
(1) EBITDA, which is a non-GAAP financial
measure, is defined as net income excluding interest expense,
income tax expense and depreciation and amortization expense. The
Company believes EBITDA is an important measure of operating
performance because it allows management, investors and others to
evaluate and compare the Company’s core operating results from
period to period by removing (i) the impact of the Company’s
capital structure (interest expense from outstanding debt), (ii)
tax consequences and (iii) asset base (depreciation and
amortization). The Company uses EBITDA internally to monitor
operating results and to evaluate the performance of its business.
In addition, the compensation committee has used EBITDA in
evaluating certain components of executive compensation, including
performance-based annual incentive programs. EBITDA is not a
measure of financial performance under GAAP and should not be
considered in isolation or as an alternative to net income, cash
flows from operating activities or any other measure determined in
accordance with GAAP. The items excluded to calculate EBITDA are
significant components in understanding and assessing the Company’s
results of operations. The presentation of the Company’s EBITDA may
change from time to time, including as a result of changed business
conditions, new accounting pronouncements or otherwise. If the
presentation changes, the Company undertakes to disclose any change
between periods and the reasons underlying that change. The
Company’s EBITDA may not be comparable to a similarly titled
measure of another company because other entities may not calculate
EBITDA in the same manner.
|
SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
SUPPLEMENTAL INFORMATION - REPORTABLE SEGMENTS |
(Unaudited) |
(In thousands) |
|
|
|
Branded Products |
|
|
Healthcare Apparel |
|
|
Contact Centers |
|
|
Intersegment Eliminations |
|
|
Other |
|
|
Total |
|
For the Three Months Ended March 31, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
87,068 |
|
|
$ |
29,237 |
|
|
$ |
23,552 |
|
|
$ |
(1,015 |
) |
|
$ |
- |
|
|
$ |
138,842 |
|
Cost of goods sold |
|
|
55,327 |
|
|
|
17,727 |
|
|
|
10,908 |
|
|
|
(437 |
) |
|
|
- |
|
|
|
83,525 |
|
Gross margin |
|
|
31,741 |
|
|
|
11,510 |
|
|
|
12,644 |
|
|
|
(578 |
) |
|
|
- |
|
|
|
55,317 |
|
Selling and administrative expenses |
|
|
23,294 |
|
|
|
9,812 |
|
|
|
10,421 |
|
|
|
(578 |
) |
|
|
5,800 |
|
|
|
48,749 |
|
Other periodic pension cost |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
189 |
|
|
|
189 |
|
Add: Depreciation and amortization |
|
|
1,500 |
|
|
|
937 |
|
|
|
723 |
|
|
|
- |
|
|
|
92 |
|
|
|
3,252 |
|
Segment EBITDA(1) |
|
$ |
9,947 |
|
|
$ |
2,635 |
|
|
$ |
2,946 |
|
|
$ |
- |
|
|
$ |
(5,897 |
) |
|
$ |
9,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Branded Products |
|
|
Healthcare Apparel |
|
|
Contact Centers |
|
|
Intersegment Eliminations |
|
|
Other |
|
|
Total |
|
For the Three Months Ended
March 31, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
81,851 |
|
|
$ |
28,154 |
|
|
$ |
22,056 |
|
|
$ |
(1,288 |
) |
|
$ |
- |
|
|
$ |
130,773 |
|
Cost of goods sold |
|
|
55,952 |
|
|
|
18,054 |
|
|
|
10,267 |
|
|
|
(608 |
) |
|
|
- |
|
|
|
83,665 |
|
Gross margin |
|
|
25,899 |
|
|
|
10,100 |
|
|
|
11,789 |
|
|
|
(680 |
) |
|
|
- |
|
|
|
47,108 |
|
Selling and administrative expenses |
|
|
20,053 |
|
|
|
9,502 |
|
|
|
9,664 |
|
|
|
(680 |
) |
|
|
4,840 |
|
|
|
43,379 |
|
Other periodic pension cost |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
214 |
|
|
|
214 |
|
Add: Depreciation and amortization |
|
|
1,664 |
|
|
|
974 |
|
|
|
668 |
|
|
|
- |
|
|
|
82 |
|
|
|
3,388 |
|
Segment EBITDA(1) |
|
$ |
7,510 |
|
|
$ |
1,572 |
|
|
$ |
2,793 |
|
|
$ |
- |
|
|
$ |
(4,972 |
) |
|
$ |
6,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Segment EBITDA is our primary measure of
segment profitability under U.S. GAAP ASC 280 “Segment Reporting”.
Amounts included in income before income tax expense and excluded
from Segment EBITDA include: interest expense and depreciation
and amortization expense. Total Segment EBITDA is a non-GAAP
financial measure. Please see reconciliation of EBITDA
included in the Non-GAAP Financial Measures table above.
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