Note 17 - Operating Segment Information

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 17 – 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®, Wink™ and CID Resources, 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.

No customer accounted for more than 10% of the Company’s total net sales in 2023 or 2022.

During the fourth quarter of 2023, our chief operating decision maker began to evaluate the performance of our segments using Segment Adjusted EBITDA instead of income before income taxes. The Company has modified its presentation of segment performance to be consistent with this change, including prior periods presented for consistent and comparable presentation. Amounts included in income (loss) before income tax expense and excluded from Segment Adjusted EBITDA include: interest expense, depreciation and amortization expense, impairment charges and the other items not tied to the operational performance of the segment.

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 Year Ended December 31, 2023:
Net sales	$	342,680	$	113,878		$	91,500	$	(4,756	)	$	-		$	543,302
Segment Adjusted EBITDA		33,146		7,997			12,408		-			(20,069	)	$	33,482
Supplemental information:
Depreciation and amortization	$	6,744	$	3,925		$	2,942	$	-		$	384		$	13,995
Capital expenditures	$	2,550	$	960		$	1,392	$	-		$	61		$	4,963
Total assets	$	218,018	$	131,168		$	40,941	$	-		$	32,323		$	422,450
	Branded Products		Healthcare Apparel			Contact Centers		Intersegment Eliminations			Other			Total
As of and For the Year Ended December 31, 2022:
Net sales	$	387,931	$	113,321		$	84,218	$	(6,639	)	$	-		$	578,831
Segment Adjusted EBITDA		31,144		(2,747	)		18,521		-			(18,991	)		27,927
Supplemental information:
Depreciation and amortization	$	6,465	$	3,946		$	2,373	$	-		$	220		$	13,004
Capital expenditures	$	4,643	$	1,169		$	4,876	$	-		$	330		$	11,018
Total assets	$	224,116	$	150,335		$	43,368	$	-		$	39,122		$	456,941

The following table reconciles total Segment Adjusted EBITDA to income (loss) before income tax expense:

	Years Ended December 31,
	2023		2022
Income (loss) before income tax expense	$	9,769	$	(38,035	)
Interest expense		9,718		4,894
Depreciation and amortization		13,995		13,004
Goodwill impairment charge		-		45,918
Intangible assets impairment charge		-		5,581
Gain on sale of property, plant and equipment		-		(3,435	)
Segment Adjusted EBITDA	$	33,482	$	27,927