Note 10 - Operating Segment Information

3 Months Ended

Mar. 31, 2023

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, technology, transportation and other industries. The segment currently has sales offices in the United States, Canada, Brazil, the United Kingdom and Colombia, with support services in China and India.

Healthcare Apparel segment: Primarily through our signature marketing brands Fashion Seal Healthcare® and Wink™, we manufacture (through third parties or in 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 March 31, 2023:
Net sales	$	81,851	$	28,154	$	22,056	$	(1,288	)	$	-		$	130,773
Cost of goods sold		55,952		18,054		10,267		(608	)		-			83,665
Gross margin		25,899		10,100		11,789		(680	)		-			47,108
Selling and administrative expenses		20,053		9,502		9,664		(680	)		4,840			43,379
Other periodic pension cost		-		-		-		-			214			214
Interest expense		-		-		-		-			2,570			2,570
Income (loss) before taxes on income	$	5,846	$	598	$	2,125	$	-		$	(7,624	)	$	945
Depreciation and amortization	$	1,664	$	974	$	668	$	-		$	82		$	3,388
Capital expenditures	$	1,271	$	462	$	381	$	-		$	-		$	2,114

	Branded Products		Healthcare Apparel		Contact Centers		Intersegment Eliminations			Other			Total
As of and For the Three Months Ended March 31, 2022:
Net sales	$	97,083	$	30,568	$	17,974	$	(2,043	)	$	-		$	143,582
Cost of goods sold		68,868		18,553		7,293		(913	)		-			93,801
Gross margin		28,215		12,015		10,681		(1,130	)		-			49,781
Selling and administrative expenses		21,557		10,087		6,372		(1,130	)		5,328			42,214
Other periodic pension cost		-		-		-		-			528			528
Interest expense		55		18		-		-			226			299
Income (loss) before taxes on income	$	6,603	$	1,910	$	4,309	$	-		$	(6,082	)	$	6,740
Depreciation and amortization	$	1,383	$	981	$	495	$	-		$	64		$	2,923
Capital expenditures	$	1,543	$	711	$	1,931	$	-		$	3		$	4,188