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Note 10 - Operating Segment Information
 6 Months Ended
Jun. 30, 2022
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 10 – Operating Segment Information:

 

As described in Note 1, effective in the second quarter of 2022, the Company realigned its reportable segments to correspond with changes to its organizational responsibilities, management structure and operating model. We have reclassified prior period segment disclosures to conform to the current period presentation. As a result of the change, the Company manages and reports the following segments:

 

Branded Products segment: Primarily through our signature marketing brands BAMKO® and HPI®, we produce and sell customized merchandising solutions, promotional products and branded uniform programs. Branded products are sold to customers in a wide range of industries, including retail, hotel, food service, entertainment, tech, transportation and other industries. The segment currently has sales offices in the United States, Brazil and Canada, with support services in China and India.

 

Healthcare Apparel segment: Primarily through our signature marketing brands Fashion Seal Healthcare® and WonderWink®, we manufacture (through third parties or our own facilities) and sell a wide range of healthcare apparel, such as scrubs, lab coats, protective apparel and patient gowns. This segment sells healthcare service apparel to healthcare laundries, dealers, distributors and retailers primarily in the United States.

 

Contact Centers: Through multiple The Office Gurus® entities, including our subsidiaries in El Salvador, Belize, Jamaica, Dominican Republic and the United States (collectively, “TOG”), we provide outsourced, nearshore business process outsourcing, contact and call-center support services to North American customers.

 

Intersegment eliminations include the elimination of revenues and costs from services provided by the Contact Centers segment to the Company’s two other segments. Such costs are recognized as selling and administrative expenses in the Branded Products and Healthcare Apparel segments. Income and expenses related to corporate functions that are not specifically attributable to an individual reportable segment are presented within Other in the tables below.

 

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.

 

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

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

As of and For the Three Months Ended June 30, 2022:

                        

Net sales

 $102,039  $26,288  $21,466  $(1,860) $-  $147,933 

Cost of goods sold

  72,954   18,904   8,692   (750)  -   99,800 

Gross margin

  29,085   7,384   12,774   (1,110)  -   48,133 

Selling and administrative expenses

  24,004   9,801   8,402   (1,110)  4,872   45,969 

Goodwill impairment charge

  4,135   20,323   -   -   -   24,458 

Intangible assets impairment charge

  5,581   -   -   -   -   5,581 

Other periodic pension cost

  -   -   -   -   528   528 

Interest expense

  63   34   -   -   486   583 

Income (loss) before taxes on income

 $(4,698) $(22,774) $4,372  $-  $(5,886) $(28,986)
                         

Depreciation and amortization

 $1,589  $988  $549  $-  $54  $3,180 

Capital expenditures

 $1,401  $539  $840  $-  $71  $2,851 

Total assets

 $253,608  $156,155  $37,815  $-  $26,102  $473,680 

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

As of and For the Three Months Ended June 30, 2021:

                        

Net sales

 $79,221  $37,650  $15,653  $(1,737) $-  $130,787 

Cost of goods sold

  55,267   22,753   6,369   (760)  -   83,629 

Gross margin

  23,954   14,897   9,284   (977)  -   47,158 

Selling and administrative expenses

  16,027   8,567   5,562   (977)  4,727   33,906 

Other periodic pension cost

  -   -   -   -   440   440 

Pension plan termination charge

  -   -   -   -   6,945   6,945 

Interest expense

  38   46   -   -   246   330 

Income (loss) before taxes on income

 $7,889  $6,284  $3,722  $-  $(12,358) $5,537 
                         

Depreciation and amortization

 $923  $880  $322  $-  $31  $2,156 

Capital expenditures

 $2,288  $1,593  $709  $-  $-  $4,590 

Total assets

 $220,532  $161,113  $26,346  $-  $21,202  $429,193 

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

As of and For the Six Months Ended June 30, 2022:

                        

Net sales

 $199,122  $56,856  $39,440  $(3,903) $-  $291,515 

Cost of goods sold

  141,822   37,457   15,985   (1,663)  -   193,601 

Gross margin

  57,300   19,399   23,455   (2,240)  -   97,914 

Selling and administrative expenses

  45,561   19,888   14,774   (2,240)  10,200   88,183 

Goodwill impairment charge

  4,135   20,323   -   -   -   24,458 

Intangible assets impairment charge

  5,581   -   -   -   -   5,581 

Other periodic pension cost

  -   -   -   -   1,056   1,056 

Interest expense

  118   52   -   -   712   882 

Income (loss) before taxes on income

 $1,905  $(20,864) $8,681  $-  $(11,968) $(22,246)
                         

Depreciation and amortization

 $2,972  $1,969  $1,044  $-  $118  $6,103 

Capital expenditures

 $2,944  $1,250  $2,771  $-  $74  $7,039 

Total assets

 $253,608  $156,155  $37,815  $-  $26,102  $473,680 

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

As of and For the Six Months Ended June 30, 2021:

                        

Net sales

 $173,013  $73,300  $28,683  $(3,362) $-  $271,634 

Cost of goods sold

  119,393   45,810   11,678   (1,448)  -   175,433 

Gross margin

  53,620   27,490   17,005   (1,914)  -   96,201 

Selling and administrative expenses

  33,319   17,181   10,284   (1,914)  10,147   69,017 

Other periodic pension cost

  -   -   -   -   869   869 

Pension plan termination charge

  -   -   -   -   6,945   6,945 

Interest expense

  52   118   -   -   435   605 

Income (loss) before taxes on income

 $20,249  $10,191  $6,721  $-  $(18,396) $18,765 
                         

Depreciation and amortization

 $1,947  $1,748  $616  $-  $62  $4,373 

Capital expenditures

 $5,909  $4,301  $1,116  $-  $-  $11,326 

Total assets

 $220,532  $161,113  $26,346  $-  $21,202  $429,193