Superior Group of Companies, Inc. (NASDAQ: SGC), today announced
its first quarter operating results for 2021.
The Company announced that for the first quarter
ended March 31, 2021, net sales increased 49.4 percent to $140.8
million, compared to first quarter 2020 net sales of $94.2 million.
Pretax Income was $13.2 million compared to $4.6 million in the
first quarter of 2020. Net income was $10.5 million or $0.66 per
diluted share compared to $3.4 million, or $0.22 per diluted share
for the first quarter of 2020.
Michael Benstock, Chief Executive Officer,
commented, “We are very pleased to report another quarter of
exceptional operating results. Our business continues to grow both
organically and through strategic acquisitions, even without
including the PPE sales related to the pandemic. PPE sales for the
first quarter were approximately $26.8 million versus $1.5 million
in the first quarter of 2020. We are continuing to book additional
PPE sales, but at a significantly slowing rate. BAMKO delivered
another remarkable quarter with net sales growth of almost 125%, or
$32.7 million. PPE sales represented $14.2 million of this growth.
The Office Gurus delivered a record quarter with net sales
increasing 43.2% after intersegment eliminations in the first
quarter as compared to the first quarter last year.
“While we are optimistic in our outlook, we,
along with other companies, are navigating logistical headwinds
that originated in shipping ports that are now cascading throughout
the transportation and logistics ecosystem. As a result, we ended
the quarter with sizable backlogs in both our Uniforms and our
Promotional Product segments both with and without including the
benefit of PPE.
“We remain enthusiastic and dedicated to
continuing with our disciplined, long-term approach. It has and we
believe will continue to yield sustainable organic growth in both
our recurring customer base and with new customers across diverse
end markets. We are relentless in our determination to excel, bring
higher levels of service to our customers and to create greater
shareholder value.”
CONFERENCE CALL
Superior Group of Companies will hold a
conference call on Wednesday, April 28, 2021 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
https://ir.superiorgroupofcompanies.com/Presentations.
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 May 12, 2021. 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
10153694 for all 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) the projected impact of the
current coronavirus (COVID-19) on our, our customers’, and our
suppliers’ businesses, (2) projections of revenue, income, and
other items relating to our financial position and results of
operations, (3) statements of our plans, objectives, strategies,
goals and intentions, (4) statements regarding the capabilities,
capacities, market position and expected development of our
business operations, and (5) 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; the effect of uncertainties related to the
current coronavirus (COVID-19) pandemic on the United States. and
global markets, our business, operations, customers, suppliers and
employees, including without limitation the length and scope of the
restrictions imposed by various governments and success of efforts
to deliver a vaccine on a timely basis, among other
factors; our ability to navigate successfully the challenges
posed by current global supply disruptions; general economic
conditions, including employment levels, in the areas of the
United States in which the Company’s customers are located;
changes in the healthcare, retail, hotels, food service,
transportation and other industries where uniforms and service
apparel are worn; our ability to identify suitable acquisition
targets, successfully integrate any acquired businesses,
successfully manage our expanding operations, or discover
liabilities associated with such business during the diligence
process; the price and availability of cotton and other
manufacturing materials; attracting and retaining senior management
and key personnel 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, 2020 and the
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
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):
Superior Group of Companies™ formerly Superior
Uniform Group, established in 1920, is a combination of companies
that help our customers unlock the power of their brands by
creating extraordinary brand engagement experiences for their
employees and customers. We provide customized support for each of
our divisions through our shared services model.
Fashion Seal Healthcare®, HPI® and WonderWink®
are our core uniform brands. Each is one of America’s leading
providers of uniforms and image apparel in the markets we serve. We
specialize in innovative uniform program design, global
manufacturing, and state-of-the-art distribution. Every workday,
more than 7 million Americans go to work wearing a uniform from
Superior Group of Companies.
BAMKO®, Tangerine Promotions®, Public Identity®
and Gifts By Design™ are our signature promotional product
companies. We 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 our customers in
order to accelerate their growth and improve our customers’ service
experiences.
SGC’s commitment to service, technology, quality
and value-added benefits, as well as our financial strength and
resources, provides unparalleled support for our customers’ diverse
needs while embracing a “Customer 1st, Every Time!” philosophy and
culture in all of our business segments.
Visit www.superiorgroupofcompanies.com for more information.
Contact: |
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|
|
Andrew D. Demott, Jr. |
|
|
Hala Elsherbini |
COO, CFO & Treasurer |
-OR- |
|
Three Part Advisors |
727-803-7135 |
|
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Senior Managing Director |
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214-442-0016 |
Comparative figures are as follows:
SUPERIOR GROUP OF
COMPANIES, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
|
|
Three Months Ended March 31, |
|
|
2021 |
|
|
2020 |
Net
sales |
$ |
140,847 |
|
$ |
94,245 |
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
Cost of goods sold |
|
91,804 |
|
|
60,794 |
Selling and administrative expenses |
|
35,111 |
|
|
27,489 |
Other periodic pension costs |
|
429 |
|
|
285 |
Interest expense |
|
275 |
|
|
1,060 |
|
|
127,619 |
|
|
89,628 |
Income
before taxes on income |
|
13,228 |
|
|
4,617 |
Income tax
expense |
|
2,750 |
|
|
1,250 |
Net
income |
$ |
10,478 |
|
$ |
3,367 |
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
|
Basic |
$ |
0.69 |
|
$ |
0.22 |
Diluted |
$ |
0.66 |
|
$ |
0.22 |
|
|
|
|
|
|
Weighted
average shares outstanding during the period: |
|
|
|
|
|
Basic |
|
15,221,336 |
|
|
15,024,851 |
Diluted |
|
15,991,474 |
|
|
15,200,898 |
|
|
|
|
|
|
Cash
dividends per common share |
$ |
0.10 |
|
$ |
0.10 |
|
|
|
|
|
|
SUPERIOR GROUP OF
COMPANIES, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
(In thousands,
except share and par value data) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2021 |
|
|
|
2020 |
|
ASSETS |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
10,911 |
|
|
$ |
5,172 |
|
Accounts receivable, less allowance for doubtful accounts of $7,478
and $7,667, respectively |
|
103,066 |
|
|
|
101,902 |
|
Accounts receivable - other |
|
2,405 |
|
|
|
1,356 |
|
Inventories |
|
87,774 |
|
|
|
89,766 |
|
Contract assets |
|
40,662 |
|
|
|
39,231 |
|
Prepaid expenses and other current assets |
|
11,508 |
|
|
|
11,030 |
|
Total current assets |
|
256,326 |
|
|
|
248,457 |
|
Property,
plant and equipment, net |
|
42,077 |
|
|
|
36,644 |
|
Operating
lease right-of-use assets |
|
5,042 |
|
|
|
3,826 |
|
Deferred tax
asset |
|
810 |
|
|
|
- |
|
Intangible
assets, net |
|
63,659 |
|
|
|
58,746 |
|
Goodwill |
|
36,197 |
|
|
|
36,116 |
|
Other
assets |
|
10,912 |
|
|
|
10,135 |
|
Total assets |
$ |
415,023 |
|
|
$ |
393,924 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
35,429 |
|
|
$ |
39,327 |
|
Other current liabilities |
|
34,519 |
|
|
|
44,670 |
|
Current portion of long-term debt |
|
15,286 |
|
|
|
15,286 |
|
Current portion of acquisition-related contingent liabilities |
|
5,791 |
|
|
|
5,589 |
|
Total current liabilities |
|
91,025 |
|
|
|
104,872 |
|
Long-term
debt |
|
94,920 |
|
|
|
72,372 |
|
Long-term
pension liability |
|
14,423 |
|
|
|
14,574 |
|
Long-term
acquisition-related contingent liabilities |
|
2,879 |
|
|
|
1,892 |
|
Long-term
operating lease liabilities |
|
2,273 |
|
|
|
1,599 |
|
Deferred tax
liability |
|
- |
|
|
|
450 |
|
Other
long-term liabilities |
|
8,120 |
|
|
|
6,535 |
|
Commitments
and contingencies |
|
|
|
|
|
|
|
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 15,582,835 and 15,391,660 shares,
respectively. |
|
15 |
|
|
|
15 |
|
Additional paid-in capital |
|
62,773 |
|
|
|
61,844 |
|
Retained earnings |
|
150,734 |
|
|
|
141,972 |
|
Accumulated other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
Pensions |
|
(10,184 |
) |
|
|
(10,898 |
) |
Cash flow hedges |
|
64 |
|
|
|
69 |
|
Foreign currency translation adjustment |
|
(2,019 |
) |
|
|
(1,372 |
) |
Total shareholders’ equity |
|
201,383 |
|
|
|
191,630 |
|
Total liabilities and shareholders’ equity |
$ |
415,023 |
|
|
$ |
393,924 |
|
|
|
|
|
SUPERIOR GROUP OF
COMPANIES, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2021 |
|
|
|
2020 |
|
CASH FLOWS
FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net
income |
$ |
10,478 |
|
|
$ |
3,367 |
|
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
2,217 |
|
|
|
1,869 |
|
Provision for bad debts - accounts receivable |
|
359 |
|
|
|
865 |
|
Share-based compensation expense |
|
832 |
|
|
|
399 |
|
Deferred income tax benefit |
|
(1,145 |
) |
|
|
(784 |
) |
Change in fair value of acquisition-related contingent
liabilities |
|
1,199 |
|
|
|
175 |
|
Changes in assets and liabilities, net of acquisition of
business: |
|
|
|
|
|
|
|
Accounts receivable |
|
(1,731 |
) |
|
|
4,940 |
|
Accounts receivable - other |
|
(798 |
) |
|
|
425 |
|
Contract assets |
|
(1,447 |
) |
|
|
299 |
|
Inventories |
|
1,881 |
|
|
|
(831 |
) |
Prepaid expenses and other current assets |
|
(331 |
) |
|
|
2,327 |
|
Other assets |
|
(771 |
) |
|
|
1,410 |
|
Accounts payable and other current liabilities |
|
(15,057 |
) |
|
|
4,656 |
|
Long-term pension liability |
|
446 |
|
|
|
294 |
|
Other long-term liabilities |
|
1,613 |
|
|
|
134 |
|
Net cash provided by (used in) operating activities |
|
(2,255 |
) |
|
|
19,545 |
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Additions to
property, plant and equipment |
|
(6,736 |
) |
|
|
(2,073 |
) |
Acquisition
of business |
|
(6,000 |
) |
|
|
- |
|
Net cash used in investing activities |
|
(12,736 |
) |
|
|
(2,073 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Proceeds
from borrowings of debt |
|
72,359 |
|
|
|
34,488 |
|
Repayment of
debt |
|
(49,835 |
) |
|
|
(52,672 |
) |
Payment of
cash dividends |
|
(1,548 |
) |
|
|
(1,521 |
) |
Proceeds
received on exercise of stock options |
|
130 |
|
|
|
- |
|
Tax
withholdings on exercise of performance based stock |
|
(372 |
) |
|
|
- |
|
Tax
(provision) benefit from vesting of acquisition-related restricted
stock |
|
171 |
|
|
|
(13 |
) |
Common stock
reacquired and retired |
|
- |
|
|
|
(500 |
) |
Net cash provided by (used in) financing activities |
|
20,905 |
|
|
|
(20,218 |
) |
|
|
|
|
|
|
|
|
Effect of
currency exchange rates on cash |
|
(175 |
) |
|
|
(519 |
) |
Net increase
(decrease) in cash and cash equivalents |
|
5,739 |
|
|
|
(3,265 |
) |
Cash and
cash equivalents balance, beginning of period |
|
5,172 |
|
|
|
9,038 |
|
Cash and
cash equivalents balance, end of period |
$ |
10,911 |
|
|
$ |
5,773 |
|
|
|
|
|
|
|
|
|
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