8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC   20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 26, 2017

Superior Uniform Group, Inc.

(Exact name of registrant as specified in its charter)

Florida	001-05869	11-1385670
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
10055 Seminole Blvd., Seminole, Florida (Address of principal executive offices)		33772 (Zip Code)

Registrant's telephone number including area code:(727) 397-9611

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

The following information is being furnished under Item 2.02 of Form 8-K: Press release by Superior Uniform Group, Inc. announcing its results of operations for the quarter ended September 30, 2017. A copy of this press release is attached as Exhibit 99.1 to this Form 8-K.

Item 9.0l. Financial Statements and Exhibits

(c) Exhibits
Exhibit Number	Description
99.1	Press Release, dated October 26, 2017

Signature

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 thereunder duly authorized.

SUPERIOR UNIFORM GROUP, INC.
By:	/s/ Andrew D. Demott, Jr.
	Andrew D. Demott, Jr.
	Chief Operating Officer, Chief Financial Officer and Treasurer

Date: October 26, 2017

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release, dated October 26, 2017

EX-99.1

EXHIBIT 99.1                                      

NEWS RELEASE

Superior Uniform Group, Inc.

A NASDAQ Listed Company: SGC

10055 Seminole Boulevard

Seminole, Florida 33772-2539

Telephone (727) 397-9611

Fax (727) 803-2642

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

For Immediate Release

SUPERIOR UNIFORM GROUP, INC. REPORTS THIRD QUARTER OPERATING RESULTS

● Net Income up 11.6% on 3.8% Increase in Net Sales

● 20^th Consecutive Quarter with Sales Increase

SEMINOLE, Florida – October 26, 2017 - Superior Uniform Group, Inc. (NASDAQ: SGC), manufacturer of uniforms, career apparel and accessories, today announced that for the third quarter ended September 30, 2017, net sales increased 3.8 percent to $67.8 million compared with 2016 third quarter net sales of $65.3 million. Net income for the 2017 third quarter was $5.0 million, or $0.33 per diluted share, compared with $4.4 million, or $0.30 per diluted share, reported for the quarter ended September 30, 2016.

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

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

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

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

CONFERENCE CALL

Superior Uniform Group will hold a conference call on Thursday, October 26, 2017 at 2:00 p.m. Eastern Time to discuss the Company’s results. Interested individuals may join the teleconference by dialing (844) 861-5505 for U.S. dialers and (412) 317-6586 for International dialers. The Canadian Toll Free number is (866) 605-3852. Please ask to be joined into the Superior Uniform Group call. The live webcast and archived replay can be accessed in the investor information section of the Company’s website at www.superioruniformgroup.com.

A telephone replay of the teleconference will be available one hour after the end of the call through 2:00 p.m. Eastern Time on November 2, 2017. To access the replay, dial (877) 344-7529 in the United States or (412) 317-0088 from international locations. Canadian dialers can access the replay at (855) 669-9658. Please reference conference number 10112811 for all replay access.

About Superior Uniform Group, Inc.

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

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

BAMKO^® is one of the nation’s largest full-service promotional products companies. It provides unique custom branding, design, sourcing, and marketing solutions to some of the world’s most successful brands. 

The Office Gurus^® is a global provider of custom call and contact center support.  As a true strategic partner, The Office Gurus implements customized solutions for its customers in order to accelerate their growth and improve their customers’ service experiences.

Superior’s commitment to service, technology, quality and value-added benefits, as well as its financial strength and resources, provides unparalleled support for its customers’ diverse needs while embracing a "Customer 1st, Every Time!" philosophy and culture in all of its business segments.

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

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Comparative figures are as follows:

 SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

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

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 SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

NINE MONTHS ENDED SEPTEMBER 30,

(Continued)

(Unaudited)

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

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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

ASSETS

	September 30
	2017			December 31,
	(Unaudited)			2016
CURRENT ASSETS:
Cash and cash equivalents	$	13,309,000		$	3,649,000
Accounts receivable, less allowance for doubtful accounts of $1,930,000 and $1,276,000, respectively		42,765,000			41,823,000
Accounts receivable - other		2,155,000			3,085,000
Inventories		65,960,000			69,240,000
Prepaid expenses and other current assets		7,372,000			7,214,000
TOTAL CURRENT ASSETS		131,561,000			125,011,000
PROPERTY, PLANT AND EQUIPMENT, NET		25,845,000			27,533,000
OTHER INTANGIBLE ASSETS, NET		23,527,000			23,238,000
GOODWILL		11,619,000			11,269,000
DEFERRED INCOME TAXES		7,645,000			6,800,000
OTHER ASSETS		5,128,000			2,997,000
	$	205,325,000		$	196,848,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,677,000		$	13,507,000
Other current liabilities		10,088,000			10,716,000
Current portion of long-term debt		6,000,000			5,893,000
Current portion of acquisition-related contingent liabilities		3,149,000			1,788,000
TOTAL CURRENT LIABILITIES		32,914,000			31,904,000
LONG-TERM DEBT		32,956,000			36,227,000
LONG-TERM PENSION LIABILITY		7,702,000			9,467,000
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES		4,193,000			7,238,000
OTHER LONG-TERM LIABILITIES		2,860,000			1,462,000
COMMITMENTS AND CONTINGENCIES (NOTE 5)
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value - authorized 300,000 shares (none issued)		-			-
Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding - 14,859,231 and 14,513,207, respectively.		15,000			15,000
Additional paid-in capital		47,371,000			42,416,000
Retained earnings		82,817,000			74,283,000
Accumulated other comprehensive income (loss), net of tax:
Pensions		(5,485,000	)		(6,258,000	)
Cash flow hedges		(164,000	)		21,000
Foreign currency translation adjustment		146,000			73,000
TOTAL SHAREHOLDERS' EQUITY		124,700,000			110,550,000
	$	205,325,000		$	196,848,000

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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

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