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Note 10 - Operating Segment Information
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 10 Operating Segment Information:

 

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 income tax expense.

 

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 September 30, 2023:

                        

Net sales

 $83,512  $29,649  $24,121  $(1,156) $-  $136,126 

Cost of goods sold

  54,588   18,165   10,724   (549)  -   82,928 

Gross margin

  28,924   11,484   13,397   (607)  -   53,198 

Selling and administrative expenses

  23,418   9,493   10,224   (607)  4,718   47,246 

Other periodic pension cost

  -   -   -   -   214   214 

Interest expense

  -   -   -   -   2,464   2,464 

Income (loss) before income tax expense

 $5,506  $1,991  $3,173  $-  $(7,396) $3,274 
                         

Depreciation and amortization

 $1,452  $1,064  $880  $-  $119  $3,515 

Capital expenditures

 $86  $115  $157  $-  $22  $380 

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

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

                        

Net sales

 $86,769  $30,039  $23,363  $(1,468) $-  $138,703 

Cost of goods sold

  60,600   18,609   9,453   (596)  -   88,066 

Gross margin

  26,169   11,430   13,910   (872)  -   50,637 

Selling and administrative expenses

  22,257   10,161   9,520   (872)  2,749   43,815 

Goodwill impairment charge

  21,460   -   -   -   -   21,460 

Other periodic pension cost

  -   -   -   -   528   528 

Interest expense

  87   32   -   -   1,675   1,794 

Income (loss) before income tax expense

 $(17,635) $1,237  $4,390  $-  $(4,952) $(16,960)
                         

Depreciation and amortization

 $1,724  $973  $653  $-  $51  $3,401 

Capital expenditures

 $2,062  $498  $1,622  $-  $-  $4,182 

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

As of and For the Nine Months Ended September 30, 2023:

                        

Net sales

 $244,955  $85,875  $68,935  $(3,704) $-  $396,061 

Cost of goods sold

  164,492   53,872   31,545   (1,750)  -   248,159 

Gross margin

  80,463   32,003   37,390   (1,954)  -   147,902 

Selling and administrative expenses

  63,833   28,461   29,502   (1,954)  14,165   134,007 

Other periodic pension cost

  -   -   -   -   642   642 

Interest expense

  -   -   -   -   7,658   7,658 

Income (loss) before income tax expense

 $16,630  $3,542  $7,888  $-  $(22,465) $5,595 
                         

Depreciation and amortization

 $4,826  $3,014  $2,210  $-  $281  $10,331 

Capital expenditures

 $2,093  $641  $1,221  $-  $68  $4,023 

 

  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

As of and For the Nine Months Ended September 30, 2022:

                        

Net sales

 $285,891  $86,895  $62,803  $(5,371) $-  $430,218 

Cost of goods sold

  202,422   56,066   25,438   (2,259)  -   281,667 

Gross margin

  83,469   30,829   37,365   (3,112)  -   148,551 

Selling and administrative expenses

  67,818   30,049   24,294   (3,112)  12,949   131,998 

Goodwill impairment charge

  25,595   20,323   -   -   -   45,918 

Intangible assets impairment charge

  5,581   -   -   -   -   5,581 

Other periodic pension cost

  -   -   -   -   1,584   1,584 

Interest expense

  205   84   -   -   2,387   2,676 

Income (loss) before income tax expense

 $(15,730) $(19,627) $13,071  $-  $(16,920) $(39,206)
                         

Depreciation and amortization

 $4,696  $2,942  $1,697  $-  $169  $9,504 

Capital expenditures

 $5,006  $1,748  $4,393  $-  $74  $11,221