EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
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SUPERIOR GROUP OF COMPANIES, INC. REPORTS OPERATING RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2019
● Promotional Products sales up 38 percent
● Remote Staffing Solutions segment sales up 17 percent
● Consolidated Net Sales decreased 7 percent
SEMINOLE, Fla. – October 23, 2019 – Superior Group of Companies, Inc. (NASDAQ: SGC), today announced its third quarter operating results for 2019.
The Company announced that for the third quarter ended September 30, 2019, net sales decreased 7.0 percent to $89.5 million, compared to third quarter 2018 net sales of $95.9 million. Pretax Income was $4.6 million compared to $7.3 million in 2018. Net income was $3.9 million or $0.26 per diluted share, compared to $0.39 per diluted share in 2018.
Michael Benstock, Chief Executive Officer commented “We are very pleased with the performance at BAMKO and The Office Gurus whose businesses continued to grow significantly in very competitive environments. Uniform segment sales were down between comparable periods, largely the result of initiatives taken by the company to reduce merchandise levels, resulting in fewer receipts, and lower revenues based upon current revenue recognition standards. Also during the quarter we experienced sales disruption at CID caused by a warehouse system implementation. On an overall basis, we made good progress and remain on schedule on our ERP integration initiatives intended to align infrastructure, support enterprise growth and value creation for all stakeholders” concluded Mr. Benstock.
CONFERENCE CALL
Superior Group of Companies will hold a conference call on Wednesday, October 23, 2019 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 6, 2019. 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 10135411 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.
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:
Michael Attinella
Chief Financial Officer & 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 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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Three Months Ended September 30, |
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(Unaudited) |
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(In thousands, except shares and per share data) |
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2019 |
2018 |
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Net sales |
$ | 89,466 | $ | 95,870 | ||||
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Costs and expenses: |
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Cost of goods sold |
58,015 | 62,070 | ||||||
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Selling and administrative expenses |
25,260 | 25,482 | ||||||
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Other periodic pension costs |
476 | 96 | ||||||
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Interest expense |
1,085 | 940 | ||||||
| 84,836 | 88,588 | |||||||
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Income before taxes on income |
4,630 | 7,282 | ||||||
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Income tax expense |
709 | 1,160 | ||||||
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Net income |
$ | 3,921 | $ | 6,122 | ||||
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Net income per share: |
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Basic |
$ | 0.26 | $ | 0.41 | ||||
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Diluted |
$ | 0.26 | $ | 0.39 | ||||
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Weighted average number of shares outstanding during the period |
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Basic |
14,947,552 | 15,010,660 | ||||||
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Diluted |
15,266,850 | 15,499,894 | ||||||
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Cash dividends per common share |
$ | 0.10 | $ | 0.10 | ||||
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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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Nine Months Ended September 30, |
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(Unaudited) |
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(In thousands, except shares and per share data) |
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2019 |
2018 |
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Net sales |
$ | 268,288 | $ | 251,349 | ||||
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Costs and expenses: |
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Cost of goods sold |
174,226 | 163,396 | ||||||
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Selling and administrative expenses |
78,008 | 69,991 | ||||||
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Other periodic pension costs |
1,282 | 289 | ||||||
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Interest expense |
3,514 | 1,974 | ||||||
| 257,030 | 235,650 | |||||||
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Income before taxes on income |
11,258 | 15,699 | ||||||
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Income tax expense |
2,180 | 3,310 | ||||||
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Net income |
$ | 9,078 | $ | 12,389 | ||||
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Net income per share: |
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Basic |
$ | 0.61 | $ | 0.83 | ||||
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Diluted |
$ | 0.59 | $ | 0.80 | ||||
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Weighted average number of shares outstanding during the period |
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Basic |
14,942,565 | 14,929,513 | ||||||
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Diluted |
15,272,287 | 15,505,642 | ||||||
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Cash dividends per common share |
$ | 0.30 | $ | 0.29 | ||||
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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited) |
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(In thousands, except share and par value data) |
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September 30, |
December 31, |
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2019 |
2018 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 5,452 | $ | 5,362 | ||||
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Accounts receivable, less allowance for doubtful accounts of $2,259 and $2,042, respectively |
75,597 | 64,017 | ||||||
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Accounts receivable - other |
1,262 | 1,744 | ||||||
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Inventories |
66,076 | 67,301 | ||||||
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Contract assets |
38,030 | 49,236 | ||||||
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Prepaid expenses and other current assets |
16,481 | 9,552 | ||||||
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Total current assets |
202,898 | 197,212 | ||||||
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Property, plant and equipment, net |
31,725 | 28,769 | ||||||
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Operating lease right-of-use assets |
4,576 | - | ||||||
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Intangible assets, net |
63,491 | 66,312 | ||||||
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Goodwill |
36,252 | 33,961 | ||||||
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Other assets |
10,443 | 8,832 | ||||||
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Total assets |
$ | 349,385 | $ | 335,086 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 30,768 | $ | 24,685 | ||||
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Other current liabilities |
16,110 | 14,767 | ||||||
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Current portion of long-term debt |
15,286 | 6,000 | ||||||
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Current portion of acquisition-related contingent liabilities |
1,374 | 941 | ||||||
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Total current liabilities |
63,538 | 46,393 | ||||||
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Long-term debt |
103,812 | 111,522 | ||||||
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Long-term pension liability |
8,422 | 8,705 | ||||||
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Long-term acquisition-related contingent liabilities |
3,753 | 5,422 | ||||||
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Long-term operating lease liabilities |
2,590 | - | ||||||
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Deferred tax liability |
6,620 | 8,475 | ||||||
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Other long-term liabilities |
4,230 | 3,648 | ||||||
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Commitments and contingencies (Note 5) |
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Shareholders' equity: |
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Preferred stock, $.001 par value - authorized 300,000 shares (none issued) |
- | - | ||||||
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Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding 15,240,317 and 15,202,387 shares, respectively. |
15 | 15 | ||||||
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Additional paid-in capital |
57,077 | 55,859 | ||||||
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Retained earnings |
106,426 | 103,032 | ||||||
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Accumulated other comprehensive income (loss), net of tax: |
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Pensions |
(6,475 | ) | (7,673 | ) | ||||
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Cash flow hedges |
97 | 113 | ||||||
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Foreign currency translation adjustment |
(720 | ) | (425 | ) | ||||
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Total shareholders’ equity |
156,420 | 150,921 | ||||||
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Total liabilities and shareholders’ equity |
$ | 349,385 | $ | 335,086 | ||||
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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Nine Months Ended September 30, |
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(Unaudited) |
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(In thousands) |
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2019 |
2018 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income |
$ | 9,078 | $ | 12,389 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
6,339 | 5,745 | ||||||
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Provision for bad debts - accounts receivable |
719 | 409 | ||||||
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Share-based compensation expense |
997 | 1,867 | ||||||
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Deferred income tax benefit |
(2,136 | ) | (278 | ) | ||||
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Gain on sale of property, plant and equipment |
(5 | ) | - | |||||
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Change in fair value of acquisition-related contingent liabilities |
(272 | ) | (1,212 | ) | ||||
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Changes in assets and liabilities, net of acquisition of business: |
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Accounts receivable - trade |
(12,251 | ) | (5,542 | ) | ||||
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Accounts receivable - other |
481 | (401 | ) | |||||
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Contract assets |
11,206 | (3,779 | ) | |||||
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Inventories |
(595 | ) | 5,742 | |||||
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Prepaid expenses and other current assets |
(7,051 | ) | (226 | ) | ||||
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Other assets |
(2,233 | ) | (2,343 | ) | ||||
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Accounts payable and other current liabilities |
5,523 | (1,077 | ) | |||||
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Long-term pension liability |
1,292 | 292 | ||||||
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Other long-term liabilities |
750 | (283 | ) | |||||
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Net cash provided by operating activities |
11,842 | 11,303 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Additions to property, plant and equipment |
(6,424 | ) | (3,881 | ) | ||||
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Proceeds from disposals of property, plant and equipment |
5 | - | ||||||
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Acquisition of businesses, net of acquired cash |
- | (85,597 | ) | |||||
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Net cash used in investing activities |
(6,419 | ) | (89,478 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from borrowings of debt |
125,121 | 170,713 | ||||||
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Repayment of debt |
(123,600 | ) | (91,423 | ) | ||||
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Payment of cash dividends |
(4,533 | ) | (4,335 | ) | ||||
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Payment of acquisition-related contingent liability |
(961 | ) | (3,032 | ) | ||||
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Proceeds received on exercise of stock options |
283 | 432 | ||||||
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Tax benefit from vesting of acquisition-related restricted stock |
30 | 445 | ||||||
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Tax withholding on exercise of stock rights |
- | (17 | ) | |||||
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Common stock reacquired and retired |
(1,243 | ) | (268 | ) | ||||
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Net cash provided by (used in) financing activities |
(4,903 | ) | 72,515 | |||||
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Effect of currency exchange rates on cash |
(430 | ) | (174 | ) | ||||
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Net increase (decrease) in cash and cash equivalents |
90 | (5,834 | ) | |||||
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Cash and cash equivalents balance, beginning of year |
5,362 | 8,130 | ||||||
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Cash and cash equivalents balance, end of period |
$ | 5,452 | $ | 2,296 | ||||