NOTE

–

Operating Segment Information

The Company classifies its businesses into

three

operating segments based on the types of products and services provided. The Uniforms and Related Products segment consists of sales to customers of uniforms and related items. The Remote Staffing Solutions segment consists of sales of staffing solutions. The Promotional Products segment consists of sales to customers of promotional products and other branded merchandise.

The Company evaluates the performance of each operating segment based on several factors of which the primary financial measures are net sales and income before taxes on income.

customer accounted for more than

10%

of Company’s total net sales in

2019,

2018

and

2017.

Amounts for corporate expenses are included in the totals for the Uniforms and Related Products segment. To better reflect the way in which management now reviews the Company’s operating results, in the

third

quarter of

2019,

the Company changed the composition of total assets for each reportable segment to exclude intercompany balances. This change has been made to all periods presented within this Form

-K.

The following tables set forth financial information related to the Company’s operating segments (in thousands):

	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products		Intersegment Eliminations			Total
As of and For the Year Ended December 31, 2019:
Net sales	$	237,554	$	36,490	$	107,511	$	(4,854	)	$	376,701
Cost of goods sold		155,283		15,066		79,137		(1,714	)		247,772
Gross margin		82,271		21,424		28,374		(3,140	)		128,929
Selling and administrative expenses		73,003		13,642		23,777		(3,140	)		107,282
Other periodic pension cost		1,962		-		-		-			1,962
Interest expense		3,178		-		1,221		-			4,399
Income before taxes on income	$	4,128	$	7,782	$	3,376	$	-		$	15,286

Depreciation and amortization	$	5,975	$	963	$	1,334	$	-		$	8,272
Capital expenditures	$	8,150	$	1,095	$	427	$	-		$	9,672
Total assets	$	258,916	$	23,970	$	76,047	$	-		$	358,933

	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products		Intersegment Eliminations			Total
As of and For the Year Ended December 31, 2018:
Net sales	$	238,165	$	31,311	$	80,913	$	(4,039	)	$	346,350
Cost of goods sold		154,437		13,404		58,242		(1,430	)		224,653
Gross margin		83,728		17,907		22,671		(2,609	)		121,697
Selling and administrative expenses		68,848		11,160		19,311		(2,609	)		96,710
Other periodic pension cost		385		-		-		-			385
Interest expense		2,019		-		1,188		-			3,207
Income before taxes on income	$	12,476	$	6,747	$	2,172	$	-		$	21,395

Depreciation and amortization	$	5,611	$	990	$	1,299	$	-		$	7,900
Capital expenditures	$	2,794	$	1,581	$	494	$	-		$	4,869
Total assets(1)	$	254,138	$	19,717	$	61,231	$	-		$	335,086

	Uniforms and Related Products			Remote Staffing Solutions		Promotional Products		Intersegment Eliminations			Total
As of and For the Year Ended December 31, 2017:
Net sales	$	204,644		$	23,021	$	42,904	$	(3,755	)	$	266,814
Cost of goods sold		132,181			10,561		29,044		(1,324	)		170,462
Gross margin		72,463			12,460		13,860		(2,431	)		96,352
Selling and administrative expenses		52,967			7,877		12,179		(2,431	)		70,592
Other periodic pension cost		1,224			-		-		-			1,224
Gain (loss) on sale of property, plant and equipment		(2	)		1,050		-		-			1,048
Interest expense		387			-		415		-			802
Income before taxes on income	$	17,883		$	5,633	$	1,266	$	-		$	24,782

Depreciation and amortization	$	4,223		$	846	$	584	$	-		$	5,653
Capital expenditures	$	2,870		$	1,156	$	219	$	-		$	4,245
Total assets(1)	$	146,259		$	18,170	$	54,509	$	-		$	218,938

(

)

Intercompany balances that were previously included in total assets for each reportable segment have been excluded.