Superior Uniform Group, Inc. Reports Operating Results for 2017
February 22 2018 - 7:00AM
Superior Uniform Group, Inc. (NASDAQ:SGC), today announced its
fourth quarter and year-end operating results for 2017.
The Company announced that for the year ended
December 31, 2017, net sales increased 5.6 percent to $266.8
million, compared to 2016 net sales of $252.6 million. Income
before taxes on income increased 24.5 percent to $24.8 million
compared to $19.9 million in 2016. Net income for the year ended
December 31, 2017 was $15.0 million, or $0.99 per diluted share,
compared to $14.6 million, or $0.98 per diluted share, reported for
the year ended December 31, 2016. Net income for 2017 was reduced
by approximately $4.0 million, or approximately $0.26 per diluted
share, as a result of increases in our fourth quarter tax provision
associated with the enactment of the Tax Cuts and Jobs Act in
December of 2017. Excluding the impact of the Tax Cuts and Jobs
Act, diluted earnings per share would have been $1.25 in 2017 as
compared to $0.98 in 2016.
Net sales for the fourth quarter ended December
31, 2017 increased 12.0 percent to $72.4 million, compared to 2016
fourth quarter net sales of $64.7 million. This represents our 21st
consecutive quarter of year-over-year sales increases. Income
before taxes on income increased 16.5 percent to $6.8 million
compared to $5.9 million in the fourth quarter of 2016. Net income
for the fourth quarter ended December 31, 2017 was $1.9 million, or
$0.12 per diluted share, compared to net income of $4.4 million, or
$0.30 per diluted share, reported for the fourth quarter ended
December 31, 2016. As noted above, fourth quarter 2017 net income
was reduced by $4.0 million, or approximately $0.26 per diluted
share, associated with the enactment of the Tax Cuts and Jobs
Act.
Michael Benstock, chief executive officer,
commented, “We are pleased to report we had a strong finish to
fiscal 2017, with the fourth quarter marking our 21st consecutive
quarter of increasing year-over-year revenue. Our net sales growth
for the year was highlighted by over 15 percent organic growth in
our Promotional Products segment and The Office Gurus, our Remote
Staffing Segment, had record growth as well with net sales to
outside customers increasing over 33.7 percent in fiscal 2017. Our
Uniform segment was mixed, primarily as a result of the loss of a
significant customer as we have discussed throughout 2017.
“Overall, we achieved very strong growth in
operating income with earnings before taxes increasing 24.5 percent
in 2017 with a tremendous boost from our sourcing strategies and
the further streamlining of our operations. Note that 2017
results include a gain on the disposal of our former call center
building in El Salvador of $1.0 million. Exclusive of this gain and
exclusive of acquisition expenses in both 2017 and 2016, our
operating margins improved to 9.3 percent as compared to 8.6
percent in 2016. Additionally, in the latter part of 2017, we
kicked off strategic initiatives to integrate Superior ID and HPI,
leveraging the strengths of each group to create a stronger, more
efficient organization.
“In addition to the strong organic growth in
2017, our Promotional Products segment completed two acquisitions
in the latter part of 2017 and continues to further strengthen our
platform for future growth in this market segment. We are
well positioned to complete additional strategic acquisitions in
this area and are working through a significant pipeline of
potential acquisition candidates.
“While the Tax Cuts and jobs Act passage in the
fourth quarter resulted in a significant increase in our tax
provision in 2017, the reduced tax rates will benefit our earnings
in the future. Our balance sheet remains strong and leaves us
well positioned to take advantage of the opportunities that lie
ahead.”
CONFERENCE CALL
Superior Uniform Group will hold a conference
call on Thursday, February 22, 2018 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. Additionally, the Company
will have a slide presentation available to augment management's
formal presentation, which will be accessible via the investor
relations section of the Company's website.
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 March 1, 2018. 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
10117220 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 |
YEARS ENDED DECEMBER 31, |
(In thousands, except shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
Net sales |
|
$ |
266,814 |
|
|
$ |
252,596 |
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
|
170,462 |
|
|
|
165,614 |
|
Selling
and administrative expenses |
|
|
71,816 |
|
|
|
66,396 |
|
Interest
expense |
|
|
802 |
|
|
|
688 |
|
|
|
|
243,080 |
|
|
|
232,698 |
|
|
|
|
|
|
|
|
|
|
Gain on sale of
property, plant and equipment |
|
|
1,048 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Income
before taxes on income |
|
|
24,782 |
|
|
|
19,898 |
|
Income tax expense |
|
|
9,760 |
|
|
|
5,260 |
|
Net income |
|
$ |
15,022 |
|
|
$ |
14,638 |
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding during the period |
|
|
|
|
|
|
|
|
(Basic) |
|
|
14,510,156 |
|
|
|
14,082,243 |
|
(Diluted) |
|
|
15,118,768 |
|
|
|
14,897,489 |
|
Per Share Data: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Net
earnings |
|
$ |
1.04 |
|
|
$ |
1.04 |
|
Diluted |
|
|
|
|
|
|
|
|
Net
earnings |
|
$ |
0.99 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
Cash
dividends per common share |
|
$ |
0.365 |
|
|
$ |
0.340 |
|
|
|
|
|
|
|
|
|
|
|
|
SUPERIOR UNIFORM GROUP, INC. AND
SUBSIDIARIES |
|
|
CONSOLIDATED BALANCE
SHEETS |
YEARS ENDED DECEMBER 31, |
(In thousands, except share and par value data) |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
CURRENT
ASSETS: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
8,130 |
|
|
$ |
3,649 |
|
Accounts
receivable, less allowance for doubtful accounts of $1,382 and
$1,276, respectively |
|
50,569 |
|
|
|
41,823 |
|
Accounts
receivable - other |
|
1,848 |
|
|
|
3,085 |
|
Inventories |
|
64,979 |
|
|
|
69,240 |
|
Prepaid
expenses and other current assets |
|
11,011 |
|
|
|
7,214 |
|
TOTAL
CURRENT ASSETS |
|
136,537 |
|
|
|
125,011 |
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET |
|
26,844 |
|
|
|
27,533 |
|
OTHER INTANGIBLE
ASSETS, NET |
|
29,061 |
|
|
|
23,238 |
|
GOODWILL |
|
16,032 |
|
|
|
11,269 |
|
DEFERRED INCOME
TAXES |
|
2,900 |
|
|
|
6,800 |
|
OTHER ASSETS |
|
7,564 |
|
|
|
2,997 |
|
|
$ |
218,938 |
|
|
$ |
196,848 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
Accounts
payable |
$ |
19,752 |
|
|
$ |
13,507 |
|
Other
current liabilities |
|
12,409 |
|
|
|
10,716 |
|
Current
portion of long-term debt |
|
6,000 |
|
|
|
5,893 |
|
Current
portion of acquisition-related contingent liability |
|
3,061 |
|
|
|
1,788 |
|
TOTAL
CURRENT LIABILITIES |
|
41,222 |
|
|
|
31,904 |
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT |
|
32,933 |
|
|
|
36,227 |
|
LONG-TERM PENSION
LIABILITY |
|
8,319 |
|
|
|
9,467 |
|
LONG-TERM
ACQUISITION-RELATED CONTINGENT LIABILITY |
|
7,283 |
|
|
|
7,238 |
|
OTHER LONG-TERM
LIABILITIES |
|
4,213 |
|
|
|
1,462 |
|
COMMITMENTS AND
CONTINGENCIES (NOTE 11) |
|
|
|
|
|
|
|
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 - 15,081,947 and 14,513,207, respectively. |
|
15 |
|
|
|
15 |
|
Additional paid-in capital |
|
49,103 |
|
|
|
42,416 |
|
Retained
earnings |
|
83,129 |
|
|
|
74,283 |
|
Accumulated other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
Pensions |
|
(7,282 |
) |
|
|
(6,258 |
) |
Cash flow
hedges |
|
(90 |
) |
|
|
21 |
|
Foreign
Currency Translation Adjustment |
|
93 |
|
|
|
73 |
|
TOTAL
SHAREHOLDERS' EQUITY |
|
124,968 |
|
|
|
110,550 |
|
|
$ |
218,938 |
|
|
$ |
196,848 |
|
|
|
|
|
|
|
|
|
See accompanying notes
to consolidated financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPERIOR UNIFORM GROUP,
INC. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
YEARS ENDED DECEMBER 31, |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income |
$ |
15,022 |
|
|
$ |
14,638 |
|
|
Adjustments to reconcile net income to net cash provided from
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
5,653 |
|
|
|
4,935 |
|
|
|
Provision for bad debts - accounts receivable |
|
1,002 |
|
|
|
512 |
|
|
|
Share-based compensation expense |
|
1,664 |
|
|
|
1,638 |
|
|
|
Deferred income tax provision (benefit) |
|
5,114 |
|
|
|
(1,940 |
) |
|
|
Gain on foreign currency transactions |
|
- |
|
|
|
(264 |
) |
|
|
Gain on disposals of property, plant and equipment |
|
(1,048 |
) |
|
|
- |
|
|
|
Adjustment to acquisition-related contingent liability |
|
(250 |
) |
|
|
(200 |
) |
|
|
Accretion of acquisition-related contingent liability |
|
161 |
|
|
|
169 |
|
|
|
Excess tax benefit from exercise of stock options and SARS |
|
- |
|
|
|
- |
|
|
|
Changes in assets and liabilities, net of acquisition of
businesses: |
|
|
|
|
|
|
|
|
|
Accounts
receivable - trade |
|
(4,731 |
) |
|
|
(7,244 |
) |
|
|
|
|
Accounts
receivable - other |
|
1,237 |
|
|
|
177 |
|
|
|
|
|
Inventories |
|
4,250 |
|
|
|
(5,427 |
) |
|
|
|
|
Prepaid
expenses and other current assets |
|
(4,151 |
) |
|
|
2,203 |
|
|
|
|
|
Other
assets |
|
(4,504 |
) |
|
|
(1,029 |
) |
|
|
|
|
Accounts
payable |
|
3,291 |
|
|
|
87 |
|
|
|
|
|
Other
current liabilities |
|
71 |
|
|
|
1,943 |
|
|
|
|
|
Long-term pension liability |
|
(2,577 |
) |
|
|
829 |
|
|
|
|
|
Other
long-term liabilities |
|
2,523 |
|
|
|
962 |
|
|
Net cash provided from operating activities |
|
22,727 |
|
|
|
11,989 |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
(4,248 |
) |
|
|
(7,385 |
) |
|
|
Proceeds from disposals of property, plant and equipment |
|
2,858 |
|
|
|
- |
|
|
|
Acquisition of businesses, net of acquired cash |
|
(7,988 |
) |
|
|
(15,161 |
) |
|
Net cash used in investing activities |
|
(9,378 |
) |
|
|
(22,546 |
) |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
74,387 |
|
|
|
125,067 |
|
|
|
Repayment of long-term debt |
|
(77,573 |
) |
|
|
(106,827 |
) |
|
|
Payment of cash dividends |
|
(5,269 |
) |
|
|
(4,707 |
) |
|
|
Payment of acquisition-related contingent liability |
|
(1,800 |
) |
|
|
(1,800 |
) |
|
|
Proceeds received on exercise of stock options |
|
1,872 |
|
|
|
1,504 |
|
|
|
Tax benefit
from vesting of acquisition related restricted stock |
|
650 |
|
|
|
990 |
|
|
|
Tax withholdings on exercise of stock rights |
|
(1,186 |
) |
|
|
(405 |
) |
|
|
Common stock reqcquired and retired |
|
- |
|
|
|
(714 |
) |
|
Net cash (used in) provided from financing activities |
|
(8,919 |
) |
|
|
13,108 |
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rates on cash |
|
51 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
4,481 |
|
|
|
2,613 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents balance, beginning of year |
|
3,649 |
|
|
|
1,036 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents balance, end of year |
$ |
8,130 |
|
|
$ |
3,649 |
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to consolidated financial statements. |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
Contact: |
|
|
|
|
|
|
Andrew D. Demott, Jr.,
CFO |
|
|
OR |
|
|
Hala Elsherbini,
Halliburton Investor Relations |
(727) 803-7135 |
|
|
|
|
|
(972) 458-8000 |
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