10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2003

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-5869-1

SUPERIOR UNIFORM GROUP, INC.

Incorporated - Florida Employer Identification No.
11-1385670

10055 Seminole Boulevard

Post Office Box 4002

Seminole, Florida 33775-0002

Telephone No.: 727-397-9611

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No  ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)  Yes  ¨    No  x

As of October 27, 2003, the registrant had 7,307,212 common shares outstanding, which is registrant’s only class of common stock.

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS

(Unaudited)

		Three Months Ended September 30,
		2003			2002
Net sales		$	35,212,248		$	36,674,776
Costs and expenses:
Cost of goods sold			22,570,633			24,095,329
Selling and administrative expenses			9,408,916			9,961,668
Interest expense			172,812			186,896
			32,152,361			34,243,893
Earnings before taxes on income			3,059,887			2,430,883
Taxes on income			1,070,000			850,000
Net earnings		$	1,989,887		$	1,580,883
Weighted average number of shares outstanding during the period	(Basic)		7,225,470	Shs.		7,086,098	Shs.
	(Diluted)		7,407,808	Shs.		7,173,225	Shs.
Basic net earnings per common share		$	0.28		$	0.22
Diluted net earnings per common share		$	0.27		$	0.22
Dividends per common share		$	0.135		$	0.135

See accompanying notes to condensed consolidated interim financial statements.

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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS

(Continued)

(Unaudited)

		Nine Months Ended September 30,
		2003			2002
Net sales		$	100,354,781		$	108,765,106
Costs and expenses:
Cost of goods sold			64,622,092			71,458,675
Selling and administrative expenses			29,198,980			31,194,907
Interest expense			524,571			674,656
			94,345,643			103,328,238
Earnings before taxes on income and cumulative effect of change in accounting principle			6,009,138			5,436,868
Taxes on income			2,110,000			1,945,000
Earnings before cumulative effect of change in accounting principle			3,899,138			3,491,868
Cumulative effect of change in accounting principle, net of tax benefit of $2,560,000			—			(4,504,563	)
Net earnings (loss)		$	3,899,138		$	(1,012,695	)
Weighted average number of shares outstanding during the period	(Basic)		7,171,451	Shs.		7,061,891		Shs.
	(Diluted)		7,298,633	Shs.		7,148,381		Shs.
Basic net (loss) earnings per common share:
Earnings before cumulative effect of change in accounting principle		$	0.54		$	0.49
Cumulative effect of change in accounting principle, net of tax			—			(0.64	)
Basic net earnings (loss) per common share		$	0.54		$	(0.14	)
Diluted net earnings (loss) per common share:
Earnings before cumulative effect of change in accounting principle		$	0.53		$	0.49
Cumulative effect of change in accounting principle, net of tax			—			(0.63	)
Diluted net earnings (loss) per common share		$	0.53		$	(0.14	)
Dividends per common share		$	0.405		$	0.405

The results of the nine months ended September 30, 2003 are not necessarily indicative of results to be expected for the full year ending December 31, 2003.

See accompanying notes to condensed consolidated interim financial statements.

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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2003 (Unaudited)		December 31, 2002(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	13,639,339	$	7,470,719
Accounts receivable and other current assets		24,084,048		23,683,541
Inventories*		37,007,165		42,655,934
TOTAL CURRENT ASSETS		74,730,552		73,810,194
PROPERTY, PLANT AND EQUIPMENT, NET		18,462,546		20,059,164
GOODWILL		741,929		741,929
OTHER ASSETS		5,709,611		5,215,665
	$	99,644,638	$	99,826,952
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	4,269,996	$	5,191,993
Other current liabilities		4,897,261		5,825,422
Current portion of long-term debt		1,160,523		1,104,080
TOTAL CURRENT LIABILITIES		10,327,780		12,121,495
LONG-TERM DEBT		6,569,046		7,445,068
DEFERRED INCOME TAXES		115,000		150,000
SHAREHOLDERS’ EQUITY		82,632,812		80,110,389
	$	99,644,638	$	99,826,952
*       Inventories consist of the following:

	September 30, 2003 (Unaudited)		December 31, 2002
Finished goods	$	31,036,007	$	34,202,220
Work in process		506,865		2,037,316
Raw materials		5,464,293		6,416,398
	$	37,007,165	$	42,655,934

(1) The balance sheet as of December 31, 2002 has been derived from the audited balance sheet as of that date and has been condensed.

See accompanying notes to condensed consolidated interim financial statements.

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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED SUMMARY OF CASH FLOWS

	Nine Months Ended September 30,
	2003			2002
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings before cumulative effect of change in accounting principle	$	3,899,138		$	3,491,868
Adjustments to reconcile earnings before cumulative effect of change in accounting principle to net cash flows provided by operating activities:
Depreciation and amortization		2,596,327			3,042,116
Provision for bad debts		126,000			1,090,000
Deferred income tax provision, net of tax benefit from change in accounting principle		(35,000	)		(570,000	)
Changes in assets and liabilities:
Accounts receivable and other current assets		(526,507	)		1,984,777
Inventories		5,648,769			5,502,146
Accounts payable		(921,997	)		29,591
Other current liabilities		(796,161	)		1,672,643
Net cash flows provided by operating activities		9,990,569			16,243,141
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, and equipment		(1,168,144	)		(2,578,852	)
Disposals of property, plant and equipment		168,435			440,656
Other assets		(493,946	)		(201,536	)
Net cash used in investing activities		(1,493,655	)		(2,339,732	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt		(819,579	)		(7,432,302	)
Payment of cash dividends		(2,902,465	)		(2,859,315	)
Proceeds received on exercised stock options		1,759,500			526,573
Common stock reacquired and retired		(365,750	)		—
Net cash used in financing activities		(2,328,294	)		(9,765,044	)
Net increase in cash and cash equivalents		6,168,620			4,138,365
Cash and cash equivalents balance, beginning of period		7,470,719			3,214,592
Cash and cash equivalents balance, end of period	$	13,639,339		$	7,352,957
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	526,912		$	696,901
Income taxes paid	$	1,798,742		$	1,626,088

See accompanying notes to condensed consolidated interim financial statements.

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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

(Unaudited)

NOTE 1 – Summary of Significant Interim Accounting Policies:

a) Basis of presentation

The condensed consolidated interim financial statements include the accounts of Superior Uniform Group, Inc. and its wholly-owned subsidiary, Fashion Seal Corporation. Intercompany items have been eliminated in consolidation. The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, and filed with the Securities and Exchange Commission. The interim financial information contained herein is not certified or audited; it reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the operating results for the periods presented, stated on a basis consistent with that of the audited financial statements. The unaudited financial information included in this report has been reviewed by Deloitte & Touche LLP, independent certified public accountants, and their review report thereon accompanies this filing; such review was made in accordance with established professional standards and procedures for such a review. The results of operations for any interim period are not necessarily indicative of results to be expected for the full year.

b) Recognition of costs and expenses

Costs and expenses other than product costs are charged to income in interim periods as incurred, or allocated among interim periods based on an estimate of time expired, benefit received or activity associated with the periods. Procedures adopted for assigning specific cost and expense items to an interim period are consistent with the basis followed by the Company in reporting results of operations at annual reporting dates. However, when a specific cost or expense item charged to expense for annual reporting purposes benefits more than one interim period, the cost or expense item is allocated to the interim periods.

c) Inventories

Inventories at interim dates are determined by using both perpetual records and gross profit calculations.

d) Accounting for income taxes

The provision for income taxes is calculated by using the effective tax rate anticipated for the full year.

e) Earnings per share

Historical basic per share data is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options.

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2003		2002		2003		2002
Earnings (loss) used in the computation of basic and diluted earnings (loss) per common share:
Earnings before cumulative effect of change in accounting principle	$	1,989,887	$	1,580,883	$	3,899,138	$	3,491,868
Cumulative effect of change in accounting principle, net of tax		—		—		—		(4,504,563	)
Net earnings (loss)	$	1,989,887	$	1,580,883	$	3,899,138	$	(1,012,695	)
Weighted average shares outstanding		7,225,470		7,086,098		7,171,451		7,061,891
Common stock equivalents		182,338		87,127		127,182		86,490
Total weighted average shares outstanding		7,407,808		7,173,225		7,298,633		7,148,381
Earnings (loss) per common share:
Basic earnings before cumulative effect of change in accounting principle	$	0.28	$	0.22	$	0.54	$	0.49
Cumulative effect of change in accounting principle, net of tax		—		—		—		(0.64	)
Net earnings (loss)	$	0.28	$	0.22	$	0.54	$	(0.14	)
Diluted earnings before cumulative effect of change in accounting principle	$	0.27	$	0.22	$	0.53	$	0.49
Cumulative effect of change in accounting principle, net of tax		—		—		—		(0.64	)
Net (loss) earnings	$	0.27	$	0.22	$	0.53	$	(0.14	)

f) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

g) Comprehensive Income (Loss)

Total comprehensive income (loss) represents the change in equity during a period, from sources other than transactions with shareholders and, as such, includes net earnings. For the Company, the only other component of total comprehensive income is the change in the fair value of derivatives accounted for as cash flow hedges.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2003		2002			2003		2002
Net earnings (loss)	$	1,989,887	$	1,580,883		$	3,899,138	$	(1,012,695	)
Other comprehensive income (loss):
Net unrealized gain (loss) during the period related to cash flow hedges		149,000		(352,000	)		132,000		(476,000	)
Comprehensive income (loss)	$	2,138,887	$	1,228,883		$	4,031,138	$	(1,488,695	)

h) Operating Segments

FAS No. 131 “Disclosures about Segments of an Enterprise and Related Information” requires disclosures of certain information about operating segments and about products and services, geographic areas in which the Company operates, and their major customers. The Company has evaluated the effect of this standard and has determined that currently it operates in one segment, as defined in this statement.

i) Derivative Financial Instruments

The Company has only limited involvement with derivative financial instruments. The Company has one interest rate swap agreement to hedge against the potential impact on earnings from increases in market interest rates of a variable rate term loan. Under the interest rate swap agreement, the Company receives or makes payments on a monthly basis, based on the differential between a specified interest rate and one month LIBOR. A term loan of $7,729,569 is designated as a hedged item for interest rate swaps at September 30, 2003.

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This interest rate swap is accounted for as a cash flow hedge in accordance with FAS 133 and FAS 138 which were implemented as of the beginning of the 2001 fiscal year. As of the report date, all swaps met effectiveness tests, and as such no gains or losses were included in net income during the quarter related to hedge ineffectiveness and there was no income adjustment related to any portion excluded from the assessment of hedge effectiveness. A gain (loss) of $149,000 and ($352,000) was included in other comprehensive income (loss) for the three months ended September 30, 2003 and 2002, respectively. A gain (loss) of $132,000 and ($476,000) was included in other comprehensive income (loss) for the nine months ended September 30, 2003 and 2002, respectively. The original term of the contract is ten years.

j) Reclassifications

Certain reclassifications to the 2002 financial information have been made to conform to the 2003 presentation.

NOTE 2 – New Accounting Standards:

In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 148 (FAS) No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure.” This Statement amends FAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosures in both annual and interim financial statements regarding the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company continues to apply Accounting Principles Board Opinion No. 25 (“APB No. 25”) for the method used to account for stock-based employee compensation arrangements, where applicable, but has adopted the disclosure requirements of SFAS 148 beginning with its first quarter ending March 31, 2003. The Company had no employee stock compensation expense for any of the interim periods presented in applying APB No. 25. The Company estimated the fair value of options utilizing the Black-Scholes option pricing model.

The following table illustrates the effect on net earnings and earnings per common share as if the fair value based method had been applied to all awards in each period.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2003		2002		2003		2002
Net earnings (loss), as reported	$	1,989,887	$	1,580,883	$	3,899,138	$	(1,012,695	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		238,764		147,077		585,502		317,603
Pro forma net earnings (loss)	$	1,751,123	$	1,433,806	$	3,313,636	$	(1,330,298	)
Net earnings (loss) per common share:
Basic – as reported	$	0.28	$	0.22	$	0.54	$	(0.14	)
Basic – pro forma	$	0.24	$	0.20	$	0.46	$	(0.19	)
Diluted – as reported	$	0.27	$	0.22	$	0.53	$	(0.14	)
Diluted – pro forma	$	0.24	$	0.20	$	0.45	$	(0.19	)

On April 30, 2002, the FASB issued FAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections” which updates, clarifies and simplifies existing accounting pronouncements. The rescission of FASB Statement No. 4 eliminates the requirement to report all gains and losses resulting from the early extinguishments of debt as extraordinary items. Statement 145 is effective for all transactions occurring after May 15, 2002, with earlier application encouraged. The Company adopted this Statement to be effective during the quarter ended March 31, 2003. As a result, the Company has reclassified an extraordinary loss on early extinguishment of debt of $292,000 to selling and administrative expenses and the related tax benefit of $105,000 to taxes on income in the accompanying statement of earnings for the nine months ended September 30, 2002.

NOTE 3 – Goodwill and Other Intangible Assets:

In June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“FAS”) No. 141, “Business Combinations,” which eliminates the pooling method of accounting for all business combinations initiated after June 30, 2001 and addresses the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination. The Company has adopted this accounting standard.

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Effective January 1, 2002, the Company adopted FAS No. 142, “Goodwill and Other Intangible Assets,” which addresses the financial accounting and reporting standards for the acquisition of intangible assets outside of a business combination and for goodwill and other intangible assets subsequent to their acquisition. This accounting standard requires that goodwill be separately disclosed from other intangible assets in the statement of financial position, and no longer be amortized but tested for impairment on a periodic basis.

In accordance with FAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” the Company has historically evaluated goodwill for impairment by comparing the entity level balance of goodwill to projected undiscounted cash flows, which did not result in an indicated impairment. FAS No. 142 requires that goodwill be tested for impairment at the reporting unit level upon adoption and at least annually thereafter or more frequently, if indicators of impairment arise, utilizing a two-step methodology. The initial step requires the Company to determine the fair value of each reporting unit and compare it to the carrying value, including goodwill, of such unit. The Company determined the fair value of each reporting unit by using a combination of present value and multiple of earnings valuation techniques and compared it to the reporting units’ carrying values. If the fair value exceeds the carrying value, no impairment loss would be recognized. However, if the carrying value of the reporting unit exceeds its fair value, the goodwill of this unit may be impaired. The amount, if any, of the impairment would then be measured in the second step. The Company completed the first step during the second quarter of fiscal year 2002 that indicated that goodwill recorded in the Empire and Sope Creek divisions was impaired as of January 1, 2002. Due to the potential impairment, the Company then completed step two of the test to measure the amount of the impairment. Based on that analysis, a transitional impairment loss of $7,065,000 ($4,505,000 after tax), or $0.63 per diluted share after tax, was recognized as the cumulative effect of a change in accounting principle. In accordance with SFAS No. 142, this impairment loss was recorded retroactive to January 1, 2002.

NOTE 4 – Long-Term Debt:

	September 30, 2003		December 31, 2002
Note payable to Wachovia, pursuant to revolving credit agreement, maturing March 26, 2004	$	—	$	—
6.75% term loan payable to Wachovia, with monthly payments of principal and interest, maturing April 1, 2009		7,729,569		8,549,148
		7,729,569		8,549,148
Less payments due within one year included in current liabilities		1,160,523		1,104,080
Long-term debt less current maturities	$	6,569,046	$	7,445,068

On March 26, 1999, the Company entered into a 3-year credit agreement with Wachovia Bank that made available to the Company up to $15,000,000 on a revolving credit basis. Interest is payable at LIBOR plus 0.60% based upon the one-month LIBOR rate for U.S. dollar based borrowings (1.72% at September 30, 2003). The Company pays an annual commitment fee of 0.15% on the average unused portion of the commitment. The available balance under the credit agreement is reduced by outstanding letters of credit. As of September 30, 2003, approximately $392,000 was outstanding under letters of credit. On March 27, 2001, the Company entered into an agreement with Wachovia Bank to extend the maturity of the revolving credit agreement. The revolving credit agreement matures on March 26, 2004. At the option of the Company, any outstanding balance on the agreement at that date will convert to a one-year term loan. The remaining terms of the original revolving credit agreement remain unchanged. The Company also entered into a $12,000,000 10-year term loan on March 26, 1999 with the same bank. The term loan is an amortizing loan, with monthly payments of principal and interest, maturing on April 1, 2009. The term loan carries a variable interest rate of LIBOR plus 0.80% based upon the one-month LIBOR rate for U.S. dollar based borrowings. Concurrent with the execution of the term loan agreement, the Company entered into an interest rate swap with the bank under which the Company receives a variable rate of interest on a notional amount equal to the outstanding balance of the term loan from the bank and the Company pays a fixed rate of 6.75% on a notional amount equal to the outstanding balance of the term loan to the bank.

The credit agreement and the term loans with Wachovia contain restrictive provisions concerning debt to net worth ratios, other borrowings, capital expenditures, rental commitments, tangible net worth ($69,633,000 at September 30, 2003); working capital ratio (2.5:1), fixed charges coverage ratio (2.5:1), stock repurchases and payment of dividends. At September 30, 2003, under the most restrictive terms of the debt agreements, retained earnings of approximately $13,030,000 were available for declaration of dividends. The Company is in full compliance with all terms, conditions and covenants of the various credit agreements.

NOTE 5 – Contingencies:

The Company is involved in various legal actions and claims arising from the normal course of business. In the opinion of management, the ultimate outcome of these matters will not have a material impact on the Company’s results of operations, cash flows, or financial position.

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INDEPENDENT ACCOUNTANTS’ REPORT

Board of Directors

Superior Uniform Group, Inc.

Seminole, Florida

We have reviewed the accompanying condensed consolidated balance sheet of Superior Uniform Group, Inc. and subsidiary (the “Company”) as of September 30, 2003 and the related condensed consolidated summaries of operations for the three - month and nine-month periods ended September 30, 2003 and 2002 and of cash flows for the nine-month periods ended September 30, 2003 and 2002. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Superior Uniform Group, Inc. as of December 31, 2002, and the related consolidated statements of earnings, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 26, 2003, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2002 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 2 to the condensed consolidated financial statements, during the quarter ended March 31, 2003, the Company changed its method of reporting on early extinguishment of debt to conform to Statement of Financial Accounting Standards No. 145.

/s/ Deloitte & Touche, LLP

Tampa, Florida

October 16, 2003

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain matters discussed in this Form 10-Q 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 as such because the context of the statement will include words such as we “believe,” “anticipate”, “expect” or words of similar import. Similarly, statements that describe our future plans, objectives, strategies or goals are also forward-looking statements. 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: general economic conditions in the areas of the United States in which the Company’s customers are located; changes in the healthcare, resort and commercial industries where uniforms and service apparel are worn; the impact of competition; the availability of manufacturing materials, and other factors described in the Company’s filings with the Securities and Exchange Commission. 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 Form 10-Q and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Critical Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. Our discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States for the preparation of interim financial statements. The preparation of the financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate the estimates that we have made. These estimates are based upon our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

Revenue Recognition and Allowance for Doubtful Accounts

The Company recognizes revenue in the period in which the product is shipped. Judgments and estimates are used in determining the collectability of accounts receivable. The Company analyzes specific accounts receivable and historical bad debt experience, customer credit worthiness, current economic trends and the age of outstanding balances when evaluating the adequacy of the allowance for doubtful accounts. Management judgments and estimates are used in connection with establishing the allowance in any accounting period. Changes in estimates are reflected in the period they become known. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Material differences may result in the amount and timing of bad debt expense recognition for any given period if management makes different judgments or utilizes different estimates.

Inventories

Inventories are stated at the lower of cost or market value. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Insurance

The Company self-insures for certain obligations related to health and workers’ compensation programs. The Company also purchases stop-loss insurance policies to protect it from catastrophic losses. Judgments and estimates are used in determining the potential value associated with reported claims and for losses that have occurred, but have not been reported. The Company’s estimates consider historical claim experience and other factors. The Company’s liabilities are based on estimates, and, while the Company believes that the accrual for loss is adequate, the ultimate liability may be in excess of or less than the amounts recorded. Changes in claim experience, the Company’s ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period.

Results of Operations

Net sales of $35,212,248 for the three months ended September 30, 2003 decreased approximately 4.0% from $36,674,776 for the comparable period ended September 30, 2002. For the nine months ended September 30, 2003, net sales were approximately 7.7% less than the comparable period ended September 30, 2002. The decrease in the three and nine-month periods is attributed to lower purchasing levels by existing customers and a reduction in the number of new uniform programs in the current year periods.

Page 11

Cost of goods sold as a percentage of sales approximated 64.1% for the three months ended September 30, 2003 compared to 65.7% for the three months ended September 30, 2002. Cost of goods sold as a percentage of sales approximated 64.4% for the nine months ended September 30, 2003 compared to 65.7% for the nine months ended September 30, 2002. The reductions in the three and nine-month periods are attributed to the increase in the amount of goods sourced outside of the United States.

Selling and administrative expenses, as a percentage of sales, were approximately 26.7% and 27.2%, respectively, for the three-month periods ended September 30, 2003 and 2002. Selling and administrative expenses, as a percentage of sales, were approximately 29.1% and 28.4%, respectively, for the first nine months of 2003 and 2002. The increase in selling and administrative expenses as a percentage of net sales for the nine-month period ended September 30, 2003, as compared to the same period in 2002, is primarily attributed to the decline in sales volume, which more than offset the reductions in selling and administrative expenses in the current nine-month period. Included in selling and administrative expenses in the current nine-month period is approximately $126,000 of bad debt expense versus approximately $1,090,000 in the prior nine-month period. This decrease is primarily attributed to one large account that was reserved for in the prior year. Additionally, prior year selling and administrative expenses included approximately $360,000 related to the Company’s review of a potential acquisition that we are no longer pursuing and approximately $292,000 in expenses from the early payment of debt.

Interest expense of $524,571 for the nine-month period ended September 30, 2003 decreased 22.2% from $674,656 for the similar period ended September 30, 2002 due to lower outstanding borrowings in the current period.

Cumulative effect of change in accounting principle charge in the amount of $4,504,563, net of a tax benefit of $2,560,000 was recorded in the nine-month period ended September 30, 2002 as a result of the Company’s adoption of SFAS No. 142.

Net earnings increased to $1,989,887 for the three months ended September 30, 2003 as compared to net earnings of $1,580,883 for the same period ended September 30, 2002. Net earnings for the nine months ended September 30, 2003 are $3,899,138 as compared to net loss of $1,012,695 for the same period in 2002. This increase in earnings is primarily attributable to the cumulative effect of accounting change in the prior year.

Accounts receivable and other current assets increased 1.7% from $23,683,541 on December 31, 2002 to $24,084,048 as of September 30, 2003.

Inventories decreased 13.2% from $42,655,934 on December 31, 2002 to $37,007,165 as of September 30, 2003 as the Company has continued to focus efforts on reducing inventory levels.

Accounts payable decreased 17.8% from $5,191,993 on December 31, 2002 to $4,269,996 on September 30, 2003 primarily due to decreases in purchases of raw material inventories.

Liquidity and Capital Resources

Cash and cash equivalents increased by $6,168,620 from $7,470,719 on December 31, 2002 to $13,639,339 as of September 30, 2003. Additionally, total borrowings under long-term debt agreements decreased by $819,579 from $8,549,148 on December 31, 2002 to $7,729,569 on September 30, 2003. The Company has operated without hindrance or restraint with its present working capital, as income generated from operations and outside sources of credit, both trade and institutional, have been more than adequate.

In the foreseeable future, the Company will continue its ongoing capital expenditure program designed to maintain and improve its facilities. The Company at all times evaluates its capital expenditure program in light of prevailing economic conditions.

Cash flows used in financing activities totaled $2,328,294 and $9,765,044 for the nine-month periods ended September 30, 2003 and 2002, respectively. During the nine-month periods ended September 30, 2003 and 2002, respectively, the Company paid cash dividends of $2,902,465 and $2,859,315, respectively. The Company reacquired and retired 35,000 shares of its common stock in the nine-month period ended September 30, 2003. The Company did not reacquire any shares of its common stock in the prior year period. The Company anticipates that it will continue to pay dividends and that it will reacquire additional shares of its common stock in the future as financial conditions permit.

The Company believes that its cash flow from operating activities together with other capital resources and funds from credit sources will be adequate to meet its anticipated funding requirements for the remainder of the year and for the foreseeable future.

Page 12

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk from changes in interest rates, which may adversely affect its results of operations and financial condition. The Company seeks to minimize the risks from these interest rates when considered appropriate, through the limited use of derivative financial instruments. The Company’s policy is to not use financial instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments. The Company has debt obligations with variable interest rates tied to LIBOR which are described in “Liquidity and Capital Resources” as well as Note 1 of the Notes to Consolidated Financial Statements. The Company estimates that a hypothetical increase in interest rates of 1% would have resulted in no material change in the Company’s interest expense for the nine-month period ended September 30, 2003.

The Company has one interest rate swap agreement to hedge against the potential impact on earnings from increases in market interest rates of a variable rate term loan. Under the interest rate swap agreement, the Company receives or makes payments on a monthly basis, based on the differential between a specified interest rate and one month LIBOR. A term loan of $7,729,569 is designated as a hedged item for interest rate swaps at September 30, 2003. This interest rate swap is accounted for as a cash flow hedge in accordance with FAS 133 and FAS 138. As of the report date, the swap met the effectiveness test, and as such no gains or losses were included in net income during the quarter related to hedge ineffectiveness and there was no income adjustment related to any portion excluded from the assessment of hedge effectiveness. A gain of $132,000 was included in other comprehensive income (loss) for the nine months ended September 30, 2003. A loss of $476,000 was included in other comprehensive income (loss) for the comparable period in 2002. The original term of the contract is ten years.

The Company is also exposed to changes in prevailing market interest rates affecting the return on its investments but does not consider this interest rate market risk exposure to be material to its financial condition or results of operations. The Company invests primarily in highly liquid debt instruments with strong credit ratings and short-term (less than three months) maturities.

ITEM 4. Controls and Procedures

(a). The Chief Executive Officer, Gerald M. Benstock, and the Chief Financial Officer, Andrew D. Demott, Jr., evaluated the effectiveness of Superior’s disclosure controls and procedures as of the end of the period covered by this report (the “Evaluation Date”), and concluded that, as of the Evaluation Date, Superior’s disclosure controls and procedures were effective to ensure that information Superior is required to disclose in its filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by Superior in the reports that it files under the Exchange Act is accumulated and communicated to Superior’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

None.

ITEM 2. Changes in Securities

None.

ITEM 3. Defaults Upon Senior Securities

Inapplicable.

ITEM 4. Submission of Matters to a Vote of Security-holders

None.

ITEM 5. Other Information

Inapplicable.

Page 13

ITEM 6. Exhibits and Reports on Form 8-K

a)

Exhibit No.	Description
3	Amendment to Superior Uniform Group, Inc. By-Laws and By-Laws of Superior Uniform Group, Inc.
15	Letter re: Unaudited Interim Financial Information.
31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b) Reports on Form 8-K – On July 23, 2003, the Company filed a report on Form 8-K containing a press release announcing its earnings for the second quarter of 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 30, 2003	SUPERIOR UNIFORM GROUP, INC.
	By	/s/ Gerald M. Benstock
		Gerald M. Benstock Chairman & CEO
	By	/s/ Andrew D. Demott, Jr.
		Andrew D. Demott, Jr. Sr. Vice President, Chief Financial Officer and Treasurer (Principal Accounting Officer)

Page 14

EXHIBIT INDEX

Exhibit No.	Description
3	Amendment to Superior Uniform Group, Inc. By-Laws and By-Laws of Superior Uniform Group, Inc.
15	Letter re: Unaudited Interim Financial Information.
31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-3

EXHIBIT 3

SUPERIOR UNIFORM GROUP, INC.

AMENDMENT TO BYLAWS

The bylaws of Superior Uniform Group, Inc. are hereby amended to add Article VI: Indemnification, which shall read in its entirety as follows:

“ARTICLE VI: INDEMNIFICATION:

Section 1: Right to Indemnification:

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that he or she or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation (an “Indemnitee”), against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Indemnitee. The Corporation shall be required to indemnify an Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if the initiation of such Proceeding (or part thereof) by the Indemnitee was authorized by the Board of Directors of the Corporation.

Section 2: Prepayment of Expenses:

The Corporation shall pay the expenses (including attorneys’ fees) incurred by an Indemnitee in defending any Proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this Article or otherwise.

Section 3: Claims:

If a claim for indemnification or payment of expenses under this Article is not paid in full within 60 days after a written claim therefore by the Indemnitee has been received by the Corporation, the Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expenses of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Indemnitee was not entitled to the requested indemnification or repayment of expenses under applicable law.

Section 4: Nonexclusivity of Rights:

The rights conferred on any person by this Article VI shall not be exclusive of any other rights that such person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, these Bylaws, agreement, vote of shareholders, or disinterested directors, or otherwise.

Section 5: Other Indemnification:

The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise, or nonprofit enterprise.

Section 6: Amendment or Repeal:

Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring before the time of such repeal or modification.”

BYLAWS

OF

SUPERIOR UNIFORM GROUP, INC.

ARTICLE I: OFFICES:

Section 1:

The office of the Corporation shall be located in the County of Pinellas, State of Florida.

Section 2:

The Corporation may also have offices and places of business at such other places within or without the State of Florida as the Board of Directors may, from time to time, determine, or the business of the Corporation may require.

ARTICLE II: MEETINGS OF SHAREHOLDERS:

Section 1:

The annual meeting of the shareholders for the election of directors, and all special meetings of shareholders for that or any other purpose, may be held at such time and place within or without the State of Florida as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. At least ten (10) days written notice shall be given to all shareholders in advance of any meeting of shareholders.

Section 2:

The annual meeting of shareholders shall be held in each year upon such date as may be determined by the Board of Directors; at such meeting, the shareholders shall elect a Board of Directors, and transact such other business as may properly be brought before the meeting. The Board shall also determine the place where the shareholders’ meeting shall be held.

Section 3:

Special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the Chairman of the Board, by the President, or by the Board of Directors, and shall be called by the President or the Secretary at the request in writing of a majority of the Directors. Such request shall state the purpose or purposes of the proposed meeting.

Section 4:

Except as otherwise provided by the Articles of Incorporation, the holders of a majority of the shares of the Corporation issued and outstanding and entitled to vote thereon, present in person or by proxy, shall be necessary to and shall constitute a quorum for the transaction of business at all meetings of the shareholders.

ARTICLE III: DIRECTORS:

Section 1:

The number of directors which shall constitute the entire Board of Directors shall be not less than three nor more than eight as the Board of Directors may, by resolution adopted by a majority of the entire Board, from time to time determine. Directors need not be shareholders of the Corporation. Directors shall be elected at the annual meeting of the shareholders, except as provided in Section 3 of this Article III, and each director shall be elected to serve until his successor shall have been elected and shall have qualified.

Section 2:

Any director may resign at any time. The shareholders entitled to vote for the election of directors may remove a director with cause.

Section 3:

If any vacancies occur in the Board of Directors, for any reason whatsoever, or if any new directorships are created, all of the directors then in office, although less than a quorum, may by majority vote, choose a successor or successors or fill the newly created directorship, and the directors so chosen shall hold office until the next annual meeting of the shareholders and until their successors shall have been duly elected and qualified, unless sooner displaced; provided, however, that if in the event of any such vacancy the directors remaining in office shall be unable by majority vote to fill such vacancy within thirty days of the occurrence thereof, the Chairman or the President may call a special meeting of the shareholders, at which time such vacancy shall be filled.

ARTICLE IV: MEETINGS OF THE BOARD:

Section 1:

The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Florida.

Section 2:

Regular meetings of the Board of Directors shall be held without notice immediately following the annual meeting of shareholders, and may be held without notice at such time and at such place as shall, from time to time, be determined by the Board.

Section 3:

Special meetings of the Board of Directors may be called by the Chairman of the Board or by the President on two days notice to each director, either personally or by mail or by telegram; special meetings shall be called by the Chairman of the Board or the President in like manner and on like notice on the written request of two directors.

Section 4:

At all meetings of the Board of Directors, a majority of the entire Board shall be necessary to and constitute a quorum for the transaction of business, and the vote of a majority of the directors present at the time of the vote, if a quorum is present, shall be the act of the Board of Directors except as may be otherwise specifically provided by law or the Articles of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time until a quorum shall be present. Notice of such adjournment shall be given to any directors who are not present and, unless announced at the meeting, to the other directors.

Section 5:

Any action required or permitted to be taken by the Board of Directors may be taken without a meeting provided all members of the Board of Directors consent in writing to the adoption of a resolution authorizing such action, and further provided such resolution and written consents of the directors thereto shall be filed with the minutes of the Board of Directors.

ARTICLE IV-A: EXECUTIVE AND OTHER COMMITTEES

Section 1: How Constituted and the Powers thereof:

The Board of Directors by the vote of a majority of the entire Board, may designate three or more directors to constitute an Executive Committee, who shall serve during the pleasure of the Board of Directors. Except as otherwise provided by law, by these Bylaws, or by resolution adopted by a majority of the whole Board of Directors, the Executive Committee shall possess and may exercise during the intervals between the meetings of the directors, all of the powers of the Board of Directors in the management of the business, affairs and property of the Corporation, including, without limitation, the power to cause the seal of the Corporation to be affixed to all papers that may require it, other than the powers enumerated in Sec. 607.0825 of the Florida Business Corporation Act.

Section 2: Organization, etc.:

The Executive Committee may choose its own Chairman and its Secretary and may adopt rules for its procedure. The Committee shall keep a record of its acts and proceedings and report the same from time to time to the Board of Directors.

Section 3: Meetings:

Meetings of the Executive Committee may be called by the Chairman of the Committee, and shall be called by him at the request of any member of the Committee; if there shall be no chairman, meetings may be called by any member of the Committee. Notice of each meeting of the Committee shall be sent to each member of the Committee by mail at least two days before the meeting is to be held,

or if given by the Chairman, may be given personally or by telegraph or telephone at least one day before the day on which the meeting is to be held. Notice of any meeting may be waived before, at or after the meeting, and shall be deemed waived if the director attends the meeting without protesting prior thereto or at its commencement, the lack of notice to him.

Section 4: Quorum and Manner of Acting:

A majority of the Executive Committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at the meeting at which a quorum is present shall be the act of the Executive Committee.

Section 5: Removal:

Any member of the Executive Committee may be removed, with or without cause, at any time, by the Board of Directors.

Section 6: Vacancies:

Any vacancy in the Executive Committee shall be filled by the Board of Directors.

Section 7: Other Committees:

The Board of Directors may, by resolution, provide for such other standing or special committee as it deems desirable, and discontinue the same at pleasure. Each Committee shall have such powers and perform such duties, not inconsistent with law, as may be assigned to it by the Board of Directors.

Section 8:

Any action required or permitted to be taken by the Executive Committee may be taken without a meeting provided all members of said Committee consent in writing to the adoption of a resolution authorizing such action, and further provided such resolution and written consents of the members of said Committee thereto be filed with the minutes of the Executive Committee.

ARTICLE V:

Section 1:

The executive officers of the Corporation shall be:

a. Chairman of the Board

b. Chief Executive Officer

c. One or more Presidents

d. One or more Vice Presidents

e. Secretary (and Assistant Secretary, if designated by the Board of Directors)

f. Treasurer

Section 2:

All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these Bylaws or, to the extent not so provided, by the Board of Directors. The Board of Directors may also provide for the appointment of such associate or assistant officers as the Board of Directors determines appropriate or proper for the management of the Corporation and all such associate or assistant officers, so appointed, shall have the authority and responsibility as designated by the Board of Directors or, so long as not in conflict, the Chief Executive Officer of the Corporation if such duties and responsibilities have not otherwise been provided in the Bylaws of the Corporation.

Section 3:

The Chairman of the Board of Directors shall preside at all meetings of the Shareholders and Directors of the Corporation. The Chairman shall oversee all directives and policies of the Board of Directors and shall supervise the performance and authority of the Chief Executive Officer of the Corporation. The Chairman shall further act for the Board in the absence of the directives from the Board of Directors or its Executive Committee. The Chairman shall have such other powers and duties as may, from time to time, be assigned to him by the Board of Directors. The Chairman of the Board of Directors shall be selected from among the Directors of the Corporation from time to time serving.

Section 4:

The Chief Executive Officer of the Corporation shall have primary, general and active management and control of the business and affairs of the Corporation, subject only to the direction of the Board of Directors, its Chairman and the Shareholders. The Chief Executive Officer shall see that all orders and resolutions of the Board of Directors, its Chairman and the Shareholders are carried into effect. The Chief Executive Officer of the Corporation may also be the Chairman of the Board of Directors or a President of the Corporation. The Chief Executive Officer shall preside at all meetings of Shareholders and Directors in the absence of the Chairman of the Board.

Section 5:

The Corporation may have one or more Presidents and, if more than one, the duties and responsibilities of each President shall be as designated by the Chief Executive Officer of the Corporation subject, nevertheless, to the directives of the Board of Directors. A President shall have general and active management and control of the business and affairs of the Corporation in the areas designated by the Board of Directors and, if not in conflict therewith, by the Chief Executive Officer of the Corporation but shall be subject to direction by the Chief Executive Officer of the Corporation. A President shall have such power and authority as necessary to carry out the duties and responsibilities so assigned. In the event of the absence of the Chairman of the Board who may then also be the Chief Executive Officer of the Corporation, a President shall preside at all meetings of Shareholders and Directors. Subject to contrary direction from the Board or the Chief Executive Officer, a President shall have the power and authority to fulfill the duties and responsibilities of any other President in the absence of such other President.

Section 6:

The Vice President or Vice Presidents, if there be more than one, may be assigned to specific areas, fields or divisions of the Corporation as may be determined from time to time by the Board of Directors or, in the absence of such determination, by the Chief Executive Officer of the Corporation or the appropriate President if so authorized by the Chief Executive Officer. All such Vice Presidents shall generally assist the Chief Executive Officer of the Corporation and the President or Presidents of the Corporation and shall perform such other duties and responsibilities as shall be prescribed by the Board of Directors and, if not inconsistent therewith, by the Chief Executive Officer of the Corporation or any President.

Section 7:

The Secretary (and in his absence any Assistant Secretary) shall attend all meetings of the Board of Directors and all meetings of the Shareholders, recording all votes and the minutes of all proceedings in a book to be kept for that purpose. He shall give or cause to be given timely notice of all meetings of the Shareholders and Board of Directors for which a notice is required by law, the Articles of Incorporation or the Bylaws of this Corporation. He shall also perform such other duties as may be prescribed by the Board of Directors (or its Chairman) and, to the extent not in conflict therewith, by the Chief Executive Officer of the Corporation under whose supervision the Secretary shall act. The Secretary shall have custody of the seal of the Corporation and shall have the responsibility to affix the seal of the Corporation to all documents as authorized or directed by the Board of Directors and, in the absence of such direction, by the Chief Executive Officer of the Corporation.

Section 8:

The Treasurer shall have the care and custody of corporate funds and other valuable effects and assets of the Corporation, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all monies in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors or, so long as not in conflict therewith, by the Chief Executive Officer of the Corporation, taking proper vouchers for such disbursements, and shall render to the Board of Directors at regular or special meetings of the Board, or whenever they require it, or to the Audit Committee of the Board of Directors, an account of all transactions of the Corporation and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond satisfactory to the Corporation but at the expense of the Corporation. The Treasurer shall further provide such reports or information regarding the condition of the Corporation, its assets and its liabilities, as may be required, subject to direction by the Chief Executive Officer, by all operating officers of the Corporation.

Section 9:

The Board of Directors may, at its discretion, from time to time designate the Chairman of the Board of Directors, the Chief Executive Officer, one or more Presidents or any Vice President as the Chief Operating Officer of the Corporation who shall report to such officer, and perform such duties and responsibilities, as may also be designated by the Board of Directors.

ARTICLE V-A: SHARES AND THEIR TRANSFER:

Section 1: Issue of Certificates of Stock:

The Board of Directors shall provide for the issue and transfer of the certificates of stock of the Corporation and prescribe the form of such certificates. Every owner of shares of the Corporation shall be entitled to a certificate of stock, which shall be under the seal of the Corporation (which seal may be a facsimile, engraved or printed), specifying the number of shares owned by him, and which certificate shall be signed by the President or a Vice President, or by the Chairman of the Board of Directors, and by the Secretary or an Assistant Secretary or the Treasurer of the Corporation. Said signatures may, wherever permitted by law, be facsimile, engraved or printed. In case any officer or officers who shall have signed, or whose facsimile signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the Corporation.

Section 2: Transfer Agents and Registrars:

The Board of Directors shall have power to appoint a Transfer Agent and/or Registrar of its stock; to prescribe their respective duties; and to require the countersignature of such Transfer Agent and/or Registrar upon stock certificates. The duties of the Transfer Agent and Registrar may be combined.

Section 3: Transfer of Shares:

The shares of the Corporation shall be transferable only upon its books and by the holders thereof in person or by their duly authorized attorneys or legal representatives, and upon such transfer the old certificates shall be surrendered to the Corporation by the delivery thereof to the person in charge of the stock and transfer books and ledgers or to such other person as the Board of Directors may designate for such purpose, and new certificates shall thereupon be issued.

Section 4: Addresses of Shareholders:

Every shareholder shall furnish the Transfer Agent, or in the absence of a Transfer Agent, the Registrar, or in the absence of a Transfer Agent and a Registrar, the Secretary, with an address at or to which notices of meetings and all other notices may be served upon or mailed to him, and in default thereof, notices may be addressed to him at the office of the Corporation.

Section 5: Record Date:

The Board of Directors may fix a date not exceeding 50 days and not less than 10 days prior to the date of any meetings of shareholders or prior to the last day on which the consent or dissent of shareholders may be effectively expressed for any purpose without a meeting as the time as of which shareholders entitled to notice of and to vote at such meeting or whose consent or dissent is required or may be expressed for any purpose, as the case may be, shall be determined, and all persons who were holders of record of voting shares at such time and no others shall be entitled to notice of and to vote at such meeting or to express their consent or dissent, as the case may be.

The Board of Directors shall also have power to fix a date not exceeding 50 days preceding the date fixed for the payment of any dividend or the making of any distribution or for the allotment of any evidence of right or interest, or for any other purpose, as a record time for the determination of the shareholders entitled to receive any such dividend, distribution, right or interest, or to participate in any such other action, and in such case only shareholders of record at the time so fixed shall be entitled to receive such dividend, distribution right or interest or to participate in such other action.

Section 6: Lost and Destroyed Certificates:

The Board of Directors may direct a new certificate or certificates of stock to be issued in the place of any certificate or certificates theretofore issued and alleged to have been lost or destroyed, but the Board of Directors, when authorizing such issue of a new certificate or certificates, may in its discretion require the owner of the shares represented by the certificate so lost or destroyed or his legal representative to furnish proof by affidavit or otherwise to the satisfaction of the Board of Directors of the ownership of the shares represented by such certificate alleged to have been lost or destroyed and the facts which tend to prove its loss or destruction. The Board of Directors may also require such person to execute and deliver to the Corporation a bond, with or without sureties, in such sum as the Board of Directors may direct, indemnifying the Corporation, its Transfer Agents and Registrars, if any, against any claim that may be made against them, or any of them, by reason of the issue of such certificate. The Board of Directors, however, may in its discretion, refuse to issue any such new certificate, except pursuant to court order. The Board may adopt such other and further requirements or procedures for the replacement of lost or destroyed certificates as it deems advisable, and may delegate to the Corporation’s Transfer Agent such duties and responsibilities in connection with such replacement procedures as it deems advisable.

ARTICLE VI: INDEMNIFICATION:

Section 1: Right to Indemnification:

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), by reason of the fact that he or she or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation (an “Indemnitee”), against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Indemnitee. The Corporation shall be required to indemnify an Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if the initiation of such Proceeding (or part thereof) by the Indemnitee was authorized by the Board of Directors of the Corporation.

Section 2: Prepayment of Expenses:

The Corporation shall pay the expenses (including attorneys’ fees) incurred by an Indemnitee in defending any Proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this Article or otherwise.

Section 3: Claims:

If a claim for indemnification or payment of expenses under this Article is not paid in full within 60 days after a written claim therefore by the Indemnitee has been received by the Corporation, the Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expenses of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the Indemnitee was not entitled to the requested indemnification or repayment of expenses under applicable law.

Section 4: Nonexclusivity of Rights:

The rights conferred on any person by this Article VII shall not be exclusive of any other rights that such person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, these Bylaws, agreement, vote of shareholders, or disinterested directors, or otherwise.

Section 5: Other Indemnification:

The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise, or nonprofit enterprise.

Section 6: Amendment or Repeal:

Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring before the time of such repeal or modification.

ARTICLE VII: GENERAL PROVISIONS:

Section 1:

All checks or demands for money and notes or other instruments evidencing indebtedness or obligations of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may, from time to time, designate.

Section 2:

The fiscal year of the Corporation shall begin on January first and end on December thirty-first.

Section 3:

The Board of Directors shall have power to amend, supplement, repeal or adopt Bylaws at any regular or special meeting of the Board. However, any Bylaw adopted by the Board may be amended or repealed by the affirmative vote, at a meeting, of a majority of the shares issued and outstanding and entitled to vote thereon, and the Board of Directors shall take no action in conflict with any Bylaw so adopted by the shareholders.

EX-15

EXHIBIT 15

October 29, 2003

Board of Directors

Superior Uniform Group, Inc.

Seminole, Florida

We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Superior Uniform Group, Inc. and subsidiary for the periods ended September 30, 2003 and 2002, as indicated in our report dated October 16, 2003; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, is incorporated by reference in Registration Statement No. 2-85796 and No. 333-105906 on Forms S-8.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/  Deloitte & Touche, LLP        

Certified Public Accountants

Tampa, Florida

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)

or 15d-14(a) under the Securities Exchange Act of 1934

I, Gerald M. Benstock, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Superior Uniform Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information ; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2003	/s/ Gerald M. Benstock
	Gerald M. Benstock Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)

or 15d-14(a) under the Securities Exchange Act of 1934

I, Andrew D. Demott, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Superior Uniform Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information ; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2003	/s/  Andrew D. Demott, Jr.
	Andrew D. Demott, Jr. Chief Financial Officer

EX-32

Exhibit 32

Written Statement of the Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. '1350

Solely for the purposes of complying with 18 U.S.C. '1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Superior Uniform Group, Inc. (the “Company”), hereby certify, based on their knowledge, that the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2003 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gerald M. Benstock

Gerald M. Benstock

Chief Executive Officer

/s/ Andrew D. Demott, Jr.

Andrew D. Demott, Jr.

Chief Financial Officer

Date: October 30, 2003