SGC Superior Group of Companies Inc

Superior Uniform Group, Inc. (NASDAQ:SGC), manufacturer of uniforms, career apparel and accessories, today announced that for the third quarter ended September 30, 2017, net sales increased 3.8 percent to $67.8 million compared with 2016 third quarter net sales of $65.3 million. Net income for the 2017 third quarter was $5.0 million, or $0.33 per diluted share, compared with $4.4 million, or $0.30 per diluted share, reported for the quarter ended September 30, 2016. 

Michael Benstock, Chief Executive Officer, commented, “We are very pleased to report an 11.6 percent increase in net income despite net sales only increasing 3.8 percent. While our other segments reported solid results, net sales in our Uniforms and Related Products segment decreased 6.3 percent. Third quarter results were negatively impacted by the significant hurricane activity during the quarter. While we were able to essentially mitigate the impact on our own operations, the disruptions in our customers’ businesses resulted in delays and postponements in orders and shipments.  It is difficult to determine precisely what was hurricane related; we can specifically identify over $2 million in programs that have been delayed as a result of the hurricanes and pushed into the fourth quarter of 2017 at the request of our customers.

As we mentioned earlier this year, during 2016 one of our large customers was acquired by a competitor, which was serviced by a different uniform provider. While we were successful in our efforts to maintain a portion of this customer’s business, the impact of the transition on sales in the third quarter was an additional reduction in net sales of approximately $2 million. 

The Office Gurus, our Remote Staffing Solutions segment, delivered an excellent third quarter reporting a 37.1 percent increase in net sales.  We are continuing to see accelerated growth in this segment as we continue to broaden our footprint in this underserved market niche. 

As expected, BAMKO, our Promotional Products segment, bounced back with nearly 74 percent growth in net sales in the third quarter.  Organic growth accounted for 66 percent of the increase in net sales with the balance coming from our recently completed acquisition.  As we have stated in the past, BAMKO’s sales will fluctuate more widely on a quarter-to-quarter basis, given the nature of its sales cycle, in contrast with our other segments.  We remain very confident in the BAMKO team, and we are pleased to see strong double-digit growth in the third quarter. The integration of the recently completed acquisition is going well, and we are actively pursuing additional acquisition opportunities in promotional products and are working through a solid pipeline of candidates.”

CONFERENCE CALL

Superior Uniform Group will hold a conference call on Thursday, October 26, 2017 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 Uniform Group call. The live webcast and archived replay can be accessed in the investor information section of the Company’s website at www.superioruniformgroup.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 2, 2017. 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 10112811 for all replay access.

About Superior Uniform Group, Inc.

Superior Uniform Group® (NASDAQ:SGC), established in 1920, is a provider of a wide range of award winning products and services. It provides customized support for each of its divisions through its shared services model. 

Fashion Seal Healthcare®, Superior I.D™, and HPI Direct® are signature uniform brands of Superior Uniform Group®.  Each is one of America’s foremost providers of fine uniforms and image apparel in its markets. They are leaders in innovative uniform program design, global manufacturing, and state-of-the-art distribution. These brands help their customers achieve a more professional appearance and better communicate their own brands. More than 5 million Americans are smartly outfitted with a Superior uniform each workday. 

BAMKO® is one of the nation’s largest full-service promotional products companies. It provides 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.

Superior’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.

For more information, call (800) 727-8643 or visit www.SuperiorUniformGroup.com.

Comparative figures are as follows:

	SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	THREE MONTHS ENDED SEPTEMBER 30,
	(Unaudited)
									2017		2016
	Net sales							$	67,773,000	$	65,282,000
	Costs and expenses:
		Cost of goods sold							42,984,000		42,142,000
		Selling and administrative expenses							17,734,000		16,962,000
		Interest expense							213,000		172,000
									60,931,000		59,276,000
	Income before taxes on income								6,842,000		6,006,000
	Income tax expense								1,880,000		1,559,000
	Net income							$	4,962,000	$	4,447,000
	Weighted average number of shares outstanding during the period
							(Basic)		14,573,813		14,118,354
							(Diluted)		15,229,722		14,984,084
	Per Share Data:
	Basic
		Net income						$	0.34	$	0.31
	Diluted
		Net income						$	0.33	$	0.30
	Cash dividends per common share							$	0.0950	$	0.0880

 

	SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	NINE MONTHS ENDED SEPTEMBER 30,
	(Continued)
	(Unaudited)
									2017		2016
	Net sales							$	194,365,000	$	187,910,000
	Costs and expenses:
		Cost of goods sold							123,987,000		122,986,000
		Selling and administrative expenses							52,855,000		50,381,000
		Interest expense							593,000		512,000
									177,435,000		173,879,000
	Gain on sale of property, plant and equipment								1,018,000		-
	Income before taxes on income								17,948,000		14,031,000
	Income tax expense								4,810,000		3,834,000
	Net income							$	13,138,000	$	10,197,000
	Weighted average number of shares outstanding during the period
							(Basic)		14,475,311		14,055,345
							(Diluted)		15,066,616		14,870,071
	Per Share Data:
	Basic
		Net income						$	0.91	$	0.73
	Diluted
		Net income						$	0.87	$	0.69
	Cash dividends per common share							$	0.270	$	0.253

 

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
							September 30
							2017			December 31,
							(Unaudited)			2016
CURRENT ASSETS:
	Cash and cash equivalents					$	13,309,000		$	3,649,000
	Accounts receivable, less allowance for doubtful accounts
	of  $1,930,000 and $1,276,000, respectively						42,765,000			41,823,000
	Accounts receivable - other						2,155,000			3,085,000
	Inventories						65,960,000			69,240,000
	Prepaid expenses and other current assets						7,372,000			7,214,000
	TOTAL CURRENT ASSETS						131,561,000			125,011,000
PROPERTY, PLANT AND EQUIPMENT, NET							25,845,000			27,533,000
OTHER INTANGIBLE ASSETS, NET							23,527,000			23,238,000
GOODWILL							11,619,000			11,269,000
DEFERRED INCOME TAXES							7,645,000			6,800,000
OTHER ASSETS							5,128,000			2,997,000
						$	205,325,000		$	196,848,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
	Accounts payable					$	13,677,000		$	13,507,000
	Other current liabilities						10,088,000			10,716,000
	Current portion of long-term debt						6,000,000			5,893,000
	Current portion of acquisition-related contingent liabilities						3,149,000			1,788,000
	TOTAL CURRENT LIABILITIES						32,914,000			31,904,000
LONG-TERM DEBT							32,956,000			36,227,000
LONG-TERM PENSION LIABILITY							7,702,000			9,467,000
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES							4,193,000			7,238,000
OTHER LONG-TERM LIABILITIES							2,860,000			1,462,000
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 - 14,859,231 and 14,513,207, respectively.					15,000			15,000
	Additional paid-in capital						47,371,000			42,416,000
	Retained earnings						82,817,000			74,283,000
	Accumulated other comprehensive income (loss), net of tax:
		Pensions					(5,485,000	)		(6,258,000	)
		Cash flow hedges					(164,000	)		21,000
		Foreign currency translation adjustment					146,000			73,000
TOTAL SHAREHOLDERS' EQUITY							124,700,000			110,550,000
						$	205,325,000		$	196,848,000

 

	SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	NINE MONTHS ENDED SEPTEMBER 30,
	(Unaudited)
							2017			2016
	CASH FLOWS FROM OPERATING ACTIVITIES
	Net income					$	13,138,000		$	10,197,000
	Adjustments to reconcile net income
	to net cash provided by operating activities:
		Depreciation and amortization					4,081,000			3,602,000
		Realized gain on foreign currency exchange rate					-			(264,000	)
		Provision for bad debts - accounts receivable					814,000			410,000
		Share-based compensation expense					1,654,000			1,595,000
		Deferred income tax benefit					(586,000	)		(2,141,000	)
		Gain on sale of property, plant and equipment					(1,018,000	)		-
		Accretion of acquisition-related contingent liabilities					115,000			126,000
		Changes in assets and liabilities, net of acquisition of business:
			Accounts receivable - trade				(1,746,000	)		(6,656,000	)
			Accounts receivable - other				931,000			417,000
			Inventories				3,270,000			(1,900,000	)
			Prepaid expenses and other current assets				(189,000	)		(1,281,000	)
			Other assets				(2,756,000	)		(100,000	)
			Accounts payable				129,000			1,374,000
			Other current liabilities				(854,000	)		718,000
			Long-term pension liability				(529,000	)		570,000
			Other long-term liabilities				977,000			(20,000	)
		Net cash provided by operating activities					17,431,000			6,647,000
	CASH FLOWS FROM INVESTING ACTIVITIES
		Additions to property, plant and equipment					(2,518,000	)		(6,596,000	)
		Proceeds from disposals of property, plant and equipment					2,858,000			-
		Purchase of businesses, net of acquired cash					(766,000	)		(15,161,000	)
		Net cash used in investing activities					(426,000	)		(21,757,000	)
	CASH FLOWS FROM FINANCING ACTIVITIES
		Proceeds from long-term debt					72,543,000			108,175,000
		Repayment of long-term debt					(75,707,000	)		(87,620,000	)
		Payment of cash dividends					(3,874,000	)		(3,487,000	)
		Payment of contingent liabilities					(1,800,000	)		(1,800,000	)
		Proceeds received on exercise of stock options					1,218,000			1,109,000
		Tax benefit from vesting of acquisition related restricted stock					650,000			990,000
		Tax withholding on exercise of stock rights					(421,000	)		(268,000	)
		Common stock reacquired and retired					-			(316,000	)
	Net cash (used in) provided by financing activities						(7,391,000	)		16,783,000
	Effect of currency exchange rates on cash						46,000			91,000
	Net increase in cash and cash equivalents						9,660,000			1,764,000
	Cash and cash equivalents balance, beginning of year						3,649,000			1,036,000
	Cash and cash equivalents balance, end of period					$	13,309,000		$	2,800,000

Contact:Andrew D. Demott, Jr.                                        Hala Elsherbini, Halliburton Investor RelationsCOO, CFO & Treasurer                      OR          (972) 458-8000(727) 803-7135