Superior Group of Companies, Inc. Reports Operating Results for the Third Quarter Ended September 30, 2019
23 October 2019 - 10:00PM
Superior Group of Companies, Inc. (NASDAQ: 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 ElsherbiniHalliburton 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 |
|
|
|
|
|
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