Superior Group of Companies Reports Second Quarter 2024 Results


– Total net sales of $131.7 million up from $129.2 million in prior year second quarter –
– Net income of $0.6 million compared to $1.2 million in prior year second quarter –
– EBITDA of $5.6 million compared to $7.4 million in prior year second quarter –
– Board of Directors approves $0.14 per share quarterly dividend –
– Maintains full-year outlook –

ST. PETERSBURG, Fla., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC) (the “Company”), today announced its second quarter 2024 results.

“We delivered a second consecutive quarter of revenue growth along with robust free cash flow, continuing our commitment to maintaining a strong financial position,” said Michael Benstock, Chief Executive Officer. “While second quarter results were below our expectations, we are poised to generate stronger performance in the second half of the year and are maintaining our full-year outlook.  In addition, the steps we’re taking now will clearly benefit our growth and profitability over the long-term. I’m pleased that our Board has again approved our quarterly dividend, reflecting our shared confidence in the compelling opportunities ahead to further penetrate all three of the large and growing end markets we serve, which will ultimately benefit our efforts to further enhance long-term shareholder value.”

Second Quarter Results

For the second quarter ended June 30, 2024, net sales increased 2.0% to $131.7 million, compared to second quarter 2023 net sales of $129.2 million. Pretax income was $0.7 million compared to $1.4 million in the second quarter of 2023. Net income was $0.6 million or $0.04 per diluted share compared to $1.2 million, or $0.08 per diluted share for the second quarter of 2023.

Third Quarter 2024 Dividend

The Board of Directors declared a quarterly dividend of $0.14 per share, payable August 30, 2024 to shareholders of record as of August 17, 2024.

2024 Full-Year Outlook

The Company is maintaining its full year 2024 sales outlook range of $563 million to $570 million, versus 2023 sales of $543 million, and maintaining its full-year earnings per diluted share forecast of $0.73 to $0.79 versus $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 August 20, 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 9654569 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 Companys 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 Companys previously disclosed material weakness in internal control over financial reporting; the Companys 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 Companys 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 June 30, 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 June 30, 
  2024  2023 
Net sales $131,736  $129,162 
         
Costs and expenses:        
Cost of goods sold  80,981   81,566 
Selling and administrative expenses  48,375   43,382 
Other periodic pension costs  189   214 
Interest expense  1,541   2,624 
   131,086   127,786 
Income before income tax expense  650   1,376 
Income tax expense  50   163 
Net income $600  $1,213 
         
Net income per share:        
Basic $0.04  $0.08 
Diluted $0.04  $0.08 
         
Weighted average shares outstanding during the period:        
Basic  16,221,073   15,987,007 
Diluted  16,769,297   16,124,816 
         
Cash dividends per common share $0.14  $0.14 
         


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except shares and per share data)
 
  Six Months Ended June 30, 
  2024  2023 
Net sales $270,578  $259,935 
         
Costs and expenses:        
Cost of goods sold  164,506   165,231 
Selling and administrative expenses  97,124   86,761 
Other periodic pension costs  378   428 
Interest expense  3,328   5,194 
   265,336   257,614 
Income before income tax expense  5,242   2,321 
Income tax expense  730   220 
Net income $4,512  $2,101 
         
Net income per share:        
Basic $0.28  $0.13 
Diluted $0.27  $0.13 
         
Weighted average shares outstanding during the period:        
Basic  16,124,553   15,935,001 
Diluted  16,611,375   16,121,573 
         
Cash dividends per common share $0.28  $0.28 
         


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and par value data)
 
  June 30,  December 31, 
  2024  2023 
  (Unaudited)     
ASSETS        
Current assets:        
Cash and cash equivalents $13,374  $19,896 
Accounts receivable, less allowance for doubtful accounts of $3,591 and $4,237, respectively  92,628   103,494 
Inventories  93,031   98,067 
Contract assets  53,027   48,715 
Prepaid expenses and other current assets  10,197   9,188 
Total current assets  262,257   279,360 
Property, plant and equipment, net  44,267   46,890 
Operating lease right-of-use assets  16,774   17,909 
Deferred tax asset  12,341   12,356 
Intangible assets, net  49,125   51,160 
Other assets  15,558   14,775 
Total assets $400,322  $422,450 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $46,949  $50,520 
Other current liabilities  39,336   43,978 
Current portion of long-term debt  5,625   4,688 
Current portion of acquisition-related contingent liabilities  1,026   1,403 
Total current liabilities  92,936   100,589 
Long-term debt  72,100   88,789 
Long-term pension liability  13,439   13,284 
Long-term acquisition-related contingent liabilities  673   557 
Long-term operating lease liabilities  11,655   12,809 
Other long-term liabilities  8,609   8,784 
Total liabilities  199,412   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 16,792,577 and 16,564,712 shares, respectively  16   16 
Additional paid-in capital  82,759   77,443 
Retained earnings  122,106   122,464 
Accumulated other comprehensive loss, net of tax:        
Pensions  (1,077)  (1,122)
Foreign currency translation adjustment  (2,894)  (1,163)
Total shareholders’ equity  200,910   197,638 
Total liabilities and shareholders’ equity $400,322  $422,450 
         


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
  Six Months Ended June 30, 
  2024  2023 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net income $4,512  $2,101 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  6,620   6,816 
Inventory write-downs  888   144 
Provision for bad debts - accounts receivable  (383)  (628)
Share-based compensation expense  1,620   2,420 
Change in fair value of acquisition-related contingent liabilities  296   (733)
Change in fair value of written put options  653   (145)
Changes in assets and liabilities:        
Accounts receivable  10,578   8,854 
Contract assets  (4,526)  5,447 
Inventories  3,936   10,555 
Prepaid expenses and other current assets  (1,309)  2,747 
Other assets  (639)  (1,468)
Accounts payable and other current liabilities  (6,424)  1,280 
Long-term pension liability  217   379 
Other long-term liabilities  261   326 
Net cash provided by operating activities  16,300   38,095 
         
CASH FLOWS FROM INVESTING ACTIVITIES        
Additions to property, plant and equipment  (1,974)  (3,643)
Net cash used in investing activities  (1,974)  (3,643)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Proceeds from borrowings of debt  10,000   1,000 
Repayment of debt  (25,875)  (29,875)
Debt issuance costs  -   (300)
Payment of cash dividends  (4,657)  (4,590)
Payment of acquisition-related contingent liabilities  (557)  - 
Proceeds received on exercise of stock options  1,076   43 
Net cash used in financing activities  (20,013)  (33,722)
         
Effect of currency exchange rates on cash  (835)  297 
Net increase (decrease) in cash and cash equivalents  (6,522)  1,027 
Cash and cash equivalents balance, beginning of period  19,896   17,722 
Cash and cash equivalents balance, end of period $13,374  $18,749 
         


SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except shares and per share data)
 
  Three Months Ended June 30,  Six Months Ended June 30, 
  2024  2023  2024  2023 
Net income $600  $1,213  $4,512  $2,101 
Interest expense  1,541   2,624   3,328   5,194 
Income tax expense  50   163   730   220 
Depreciation and amortization  3,368   3,428   6,620   6,816 
EBITDA(1) $5,559  $7,428  $15,190  $14,331 
EBITDA margin(1)  4.2%  5.8%  5.6%  5.5%
                 

(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. EBITDA margin is defined as EBITDA divided by net sales. 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 June 30, 2024:                        
Net sales $81,296  $26,592  $24,832  $(984) $-  $131,736 
Cost of goods sold  53,170   16,392   11,871   (452)  -   80,981 
Gross margin  28,126   10,200   12,961   (532)  -   50,755 
Selling and administrative expenses  22,969   9,879   10,533   (532)  5,526   48,375 
Other periodic pension cost  -   -   -   -   189   189 
Add: Depreciation and amortization  1,567   956   753   -   92   3,368 
Segment EBITDA(1) $6,724  $1,277  $3,181  $-  $(5,623) $5,559 
                         
  Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total 
For the Three Months Ended June 30, 2023:                        
Net sales $79,592  $28,072  $22,758  $(1,260) $-  $129,162 
Cost of goods sold  53,952   17,653   10,554   (593)  -   81,566 
Gross margin  25,640   10,419   12,204   (667)  -   47,596 
Selling and administrative expenses  20,362   9,466   9,614   (667)  4,607   43,382 
Other periodic pension cost  -   -   -   -   214   214 
Add: Depreciation and amortization  1,710   976   662   -   80   3,428 
Segment EBITDA(1) $6,988  $1,929  $3,252  $-  $(4,741) $7,428 
                         
  Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total 
For the Six Months Ended June 30, 2024:                        
Net sales $168,364  $55,829  $48,384  $(1,999) $-  $270,578 
Cost of goods sold  108,497   34,119   22,779   (889)  -   164,506 
Gross margin  59,867   21,710   25,605   (1,110)  -   106,072 
Selling and administrative expenses  46,263   19,691   20,954   (1,110)  11,326   97,124 
Other periodic pension cost  -   -   -   -   378   378 
Add: Depreciation and amortization  3,067   1,893   1,476   -   184   6,620 
Segment EBITDA(1) $16,671  $3,912  $6,127  $-  $(11,520) $15,190 
                         
  Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total 
For the Six Months Ended June 30, 2023:                        
Net sales $161,443  $56,226  $44,814  $(2,548) $-  $259,935 
Cost of goods sold  109,904   35,707   20,821   (1,201)  -   165,231 
Gross margin  51,539   20,519   23,993   (1,347)  -   94,704 
Selling and administrative expenses  40,415   18,968   19,278   (1,347)  9,447   86,761 
Other periodic pension cost  -   -   -   -   428   428 
Add: Depreciation and amortization  3,374   1,950   1,330   -   162   6,816 
Segment EBITDA(1) $14,498  $3,501  $6,045  $-  $(9,713) $14,331 
                         

(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.