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 25, 2018

Superior Group of Companies, 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 Group of Companies, Inc. (the “Company”) announcing its results of operations for the quarter ended September 30, 2018. 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 25, 2018

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 GROUP OF COMPANIES, INC.
By:	/s/ Michael Attinella
	Michael Attinella Chief Financial Officer and Treasurer

Date: October 25, 2018

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

Superior Group of Companies, Inc.

A NASDAQ Listed Company: SGC                    

10055 Seminole Boulevard

Seminole, Florida 33772-2539

Telephone (727) 397-9611

Fax (727) 803-2642

FOR IMMEDIATE RELEASE

SUPERIOR GROUP of COMPANIES, INC. REPORTS THIRD QUARTER

OPERATING RESULTS

● Record Earnings Per Share at $0.39

● Net Sales Increase of 41.4 percent

● 24^th Consecutive Quarterly Sales Increase

SEMINOLE, Florida – October 25, 2018 - Superior Group of Companies, Inc. (NASDAQ: SGC), manufacturer of uniforms, career apparel and accessories (the “Company”), today announced that for the third quarter ended September 30, 2018, net sales increased 41.4 percent to $95.9 million compared with 2017 third quarter net sales of $67.8 million. Net income for the 2018 third quarter was $6.1 million, or $0.39 per diluted share, compared with $5.0 million, or $0.33 per diluted share, reported for the quarter ended September 30, 2017.

Michael Benstock, Chief Executive Officer commented, “The strategic benefits of our 2017 and 2018 acquisitions remain clear, and we are well positioned for future sales and earnings growth as a result. We remain focused on continuing to successfully integrate these businesses to provide additional sales and operational efficiencies across our company portfolio. We are confident that this strategy will provide long term benefits to our stakeholders.

While organic growth within our Uniform and Promotional Products segments was lower than anticipated, we are bullish on the long term outlook for these segments, and believe our current investments in these segments will provide significant returns for the Company in the future.

The Office Gurus, our Remote Staffing segment reported another outstanding quarter with sales growth in excess of 35% as they continue to expand through both new customer acquisition and existing customer sales.

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During the quarter we also hired a new Chief Financial Officer, Michael Attinella. Mike is an accomplished finance executive with significant public company and operational expertise.  We are thrilled to have someone with his background and proven experience join Superior’s leadership team.”

CONFERENCE CALL

Superior Group of Companies will hold a conference call on Thursday, October 25, 2018 at 2:00 p.m. Eastern Time to discuss the Company’s results. Interested individuals may join the teleconference by dialing (844) 861-5505 for U.S. dialers and (412) 317-6586 for International dialers. The Canadian Toll Free number is (866) 605-3852. Please ask to be joined into the Superior Group of Companies call. The live webcast and archived replay can also be accessed in the investor information section of the Company’s website at www.superiorgroupofcompanies.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 1, 2018. To access the replay, dial (877) 344-7529 in the United States or (412) 317-0088 from international locations. Canadian dialers can access the replay at (855) 669-9658. Please reference conference number 10124470 for all replay access.

About Superior Group of Companies, Inc. (SGC):

Superior Group of Companies^™, formerly Superior Uniform Group, established in 1920, is a combination of companies that help customers unlock the power of their brands by creating extraordinary brand experiences for employees and customers. It provides customized support for each of its divisions through its shared services model.

Fashion Seal Healthcare^®, HPI^™ and CID Resources are signature uniform brands of Superior Group of Companies. Each is one of America’s leading providers of uniforms and image apparel in the markets it serves. They specialize in innovative uniform program design, global manufacturing, and state-of-the-art distribution. Every day, more than 6 million Americans go to work wearing a uniform from Superior Group of Companies.

BAMKO^®, Tangerine Promotions^® and Public Identity^® are signature promotional products and branded merchandise brands of Superior Group of Companies. They provide unique custom branding, design, sourcing, and marketing solutions to some of the world’s most successful brands.

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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.

SGC’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.

Visit www.superiorgroupofcompanies.com for more information.

Contact:
Mike Attinella  CFO & Treasurer  (727) 803-7170	OR	Hala Elsherbini Halliburton Investor Relations (972) 458-8000

Comparative figures are as follows:

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	SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	THREE MONTHS ENDED SEPTEMBER 30,
	(Unaudited)
(In thousands, except shares and per share data)

	2018		2017
Net sales	$	95,870	$	67,773
Costs and expenses:
Cost of goods sold		62,070		42,984
Selling and administrative expenses		25,482		17,386
Other periodic pension costs		96		348
Interest expense		940		213
		88,588		60,931
Gain on sale of property, plant and equipment		-		-
Income before taxes on income		7,282		6,842
Income tax expense		1,160		1,880
Net income	$	6,122	$	4,962
Weighted average number of shares outstanding during the period
(Basic)		15,010,660		14,573,813
(Diluted)		15,499,894		15,229,722
Per Share Data:
Basic
Net income	$	0.41	$	0.34
Diluted
Net income	$	0.39	$	0.33
Cash dividends per common share	$	0.100	$	0.095

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

NINE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

(In thousands, except shares and per share data)

	2018		2017
Net sales	$	251,349	$	194,365
Costs and expenses:
Cost of goods sold		163,396		123,987
Selling and administrative expenses		69,991		51,809
Other periodic pension costs		289		1,046
Interest expense		1,974		593
		235,650		177,435
Gain on sale of property, plant and equipment		-		1,018
Income before taxes on income		15,699		17,948
Income tax expense		3,310		4,810
Net income	$	12,389	$	13,138
Weighted average number of shares outstanding during the period
(Basic)		14,929,513		14,475,311
(Diluted)		15,505,642		15,066,616
Per Share Data:
Basic
Net income	$	0.83	$	0.91
Diluted
Net income	$	0.80	$	0.87
Cash dividends per common share	$	0.290	$	0.270

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value data)

	September 30,
	2018			December 31,
	(Unaudited)			2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,296		$	8,130
Accounts receivable, less allowance for doubtful accounts of $1,810 and $ 1,382, respectively		65,023			50,569
Accounts receivable - other		2,249			1,848
Inventories		65,057			64,979
Contract assets		49,605			-
Prepaid expenses and other current assets		10,756			11,011
TOTAL CURRENT ASSETS		194,986			136,537
PROPERTY, PLANT AND EQUIPMENT, NET		28,961			26,844
OTHER INTANGIBLE ASSETS, NET		67,279			29,061
GOODWILL		33,835			16,032
DEFERRED INCOME TAXES		-			2,900
OTHER ASSETS		9,969			7,564
	$	335,030		$	218,938
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	25,024		$	19,752
Other current liabilities		14,804			12,409
Current portion of long-term debt		6,000			6,000
Current portion of acquisition-related contingent liabilities		791			3,061
TOTAL CURRENT LIABILITIES		46,619			41,222
LONG-TERM DEBT		112,224			32,933
LONG-TERM PENSION LIABILITY		7,761			8,319
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES		5,301			7,283
DEFERRED INCOME TAXES		8,525			-
OTHER LONG-TERM LIABILITIES		3,891			4,213
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 - 15,299,207and 15,081,947, respectively.		15			15
Additional paid-in capital		55,692			49,103
Retained earnings		102,062			83,129
Accumulated other comprehensive income (loss), net of tax:
Pensions		(6,635	)		(7,282	)
Cash flow hedges		119			(90	)
Foreign currency translation adjustment		(544	)		93
TOTAL SHAREHOLDERS' EQUITY		150,709			124,968
	$	335,030		$	218,938

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

(In thousands)

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	12,389		$	13,138
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		5,745			4,081
Provision for bad debts - accounts receivable		409			814
Share-based compensation expense		1,867			1,654
Deferred income tax benefit		(278	)		(586	)
Gain on sale of property, plant and equipment		-			(1,018	)
Change in fair value of acquisition-related contingent liabilities		(1,212	)		115
Changes in assets and liabilities, net of acquisition of business
Accounts receivable - trade		(5,542	)		(1,746	)
Accounts receivable - other		(401	)		931
Contract assets		(3,779	)		-
Inventories		5,742			3,270
Prepaid expenses and other current assets		(226	)		(189	)
Other assets		(2,343	)		(2,756	)
Accounts payable and other current liabilities		(1,077	)		(725	)
Long-term pension liability		292			(529	)
Other long-term liabilities		(283	)		977
Net cash provided by operating activities		11,303			17,431
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(3,881	)		(2,518	)
Acquisition of businesses, net of acquired cash		(85,597	)		(766	)
Proceeds from disposals of property, plant and equipment		-			2,858
Net cash used in investing activities		(89,478	)		(426	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt		170,713			72,543
Repayment of long-term debt		(91,423	)		(75,707	)
Payment of cash dividends		(4,335	)		(3,874	)
Payment of acquisition-related contingent liabilities		(3,032	)		(1,800	)
Proceeds received on exercise of stock options		432			1,218
Purchase of common stock		(268	)		-
Tax benefit from vesting of acquisition-related restricted stock		445			650
Tax withholding on exercise of stock rights		(17	)		(421	)
Net cash provided by (used in) financing activities		72,515			(7,391	)
Effect of currency exchange rates on cash		(174	)		46
Net (decrease) increase in cash and cash equivalents		(5,834	)		9,660
Cash and cash equivalents balance, beginning of year		8,130			3,649
Cash and cash equivalents balance, end of period	$	2,296		$	13,309