– Total net sales of $149.7 million up from $136.1 million in prior year third quarter –
– Net income of $5.4 million up from $3.1 million in prior year third quarter –
– EBITDA of $11.7 million up from $9.3 million in prior year third quarter –
– Board of Directors approves $0.14 per share quarterly dividend –
– Reaffirms full-year outlook –
ST. PETERSBURG, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. ( SGC) (the “Company”), today announced its third quarter 2024 results.
“We grew our sales and profit both sequentially from the prior quarter and year over year, representing our strongest quarterly results of 2024 despite only modest improvement in macro-related customer sentiment,” said Michael Benstock, Chief Executive Officer. “We also continue to drive solid operating cash flow as our entire team is focused on driving sales by leveraging our ongoing growth-oriented investments in people, products and technology, while striving to further optimize efficiencies and margins. Today we are reaffirming our full-year outlook and are pleased to report that our Board has again approved a quarterly dividend. Superior Group of Companies is as energized as ever by our multitude of opportunities to gain market share across the attractive end markets we serve in our quest to further enhance long-term shareholder value.”
Third Quarter Results
For the third quarter ended September 30, 2024, net sales increased 10.0% to $149.7 million compared to third quarter 2023 net sales of $136.1 million. Pretax income increased to $6.6 million compared to $3.3 million in the third quarter of 2023. Net income increased to $5.4 million or $0.33 per diluted share compared to $3.1 million or $0.19 per diluted share for the third quarter of 2023.
Fourth Quarter 2024 Dividend
The Board of Directors declared a quarterly dividend of $0.14 per share, payable November 27, 2024 to shareholders of record as of November 13, 2024.
2024 Full-Year Outlook
The Company is maintaining its full year 2024 sales outlook range of $563 million to $570 million, versus 2023 sales of $543 million, and maintaining its full-year earnings per diluted share forecast of $0.73 to $0.79 versus $0.54 in 2023.
Webcast and Conference Call
The Company will host a webcast and conference call at 5:00 pm Eastern Time today. The live webcast and archived replay can be accessed in the investor relations section of the Company's website at https://ir.superiorgroupofcompanies.com/Presentations. Interested individuals may also join the teleconference by dialing 1-844-861-5505 for U.S. dialers and 1-412-317-6586 for International dialers. The Canadian Toll-Free number is 1-866-605-3852. Please ask to be joined to the Superior Group of Companies call. A telephone replay of the teleconference will be available through November 20, 2024. To access the replay, dial 1-877-344-7529 in the United States or 1-412-317-0088 from international locations. Canadian dialers can access the replay at 855-669-9658. Please reference conference number 5346270 for replay access.
The Company’s website at https://ir.superiorgroupofcompanies.com/Presentations will also contain an updated investor presentation.
Disclosure Regarding Forward Looking Statements
Certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by use of the words “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “potential,” or “plan” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements in this press release may include, without limitation: (1) projections of revenue, income, and other items relating to our financial position and results of operations, including short term and long term plans for cash, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations and (4) statements of expected industry and general economic trends.
Such forward-looking statements are subject to certain risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include, but are not limited to, the following: the impact of competition; uncertainties related to supply disruptions, inflationary environment (including with respect to the cost of finished goods and raw materials and shipping costs), employment levels (including labor shortages), and general economic and political conditions in the areas of the world in which the Company operates or from which it sources its supplies or the areas of the United States of America (“U.S.” or “United States”) in which the Company’s customers are located; changes in the healthcare, retail chain, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, discover liabilities associated with such businesses during the diligence process, successfully integrate any acquired businesses, or successfully manage our expanding operations; the price and availability of raw materials; attracting and retaining senior management and key personnel; the effect of the Company’s previously disclosed material weakness in internal control over financial reporting; the Company’s ability to successfully remediate its material weakness in internal control over financial reporting and to maintain effective internal control over financial reporting; and other factors described in the Company’s filings with the Securities and Exchange Commission, including those described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.
About Superior Group of Companies, Inc. (SGC, Financial):
Established in 1920, Superior Group of Companies is comprised of three attractive business segments each serving large, fragmented and growing addressable markets. Across Healthcare Apparel, Branded Products and Contact Centers, each segment enables businesses to create extraordinary brand engagement experiences for their customers and employees. SGC’s commitment to service, quality, advanced technology, and omnichannel commerce provides unparalleled competitive advantages. We are committed to enhancing shareholder value by continuing to pursue a combination of organic growth and strategic acquisitions. For more information, visit www.superiorgroupofcompanies.com.
Investor Relations Contact:
[email protected]
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except shares and per share data) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 149,690 | $ | 136,126 | $ | 420,268 | $ | 396,061 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of goods sold | 89,144 | 82,928 | 253,650 | 248,159 | ||||||||||||
| Selling and administrative expenses | 52,215 | 47,246 | 149,339 | 134,007 | ||||||||||||
| Other periodic pension costs | 189 | 214 | 567 | 642 | ||||||||||||
| Interest expense | 1,569 | 2,464 | 4,897 | 7,658 | ||||||||||||
| 143,117 | 132,852 | 408,453 | 390,466 | |||||||||||||
| Income before income tax expense | 6,573 | 3,274 | 11,815 | 5,595 | ||||||||||||
| Income tax expense | 1,170 | 160 | 1,900 | 380 | ||||||||||||
| Net income | $ | 5,403 | $ | 3,114 | $ | 9,915 | $ | 5,215 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.34 | $ | 0.19 | $ | 0.62 | $ | 0.33 | ||||||||
| Diluted | $ | 0.33 | $ | 0.19 | $ | 0.60 | $ | 0.32 | ||||||||
| Weighted average shares outstanding during the period: | ||||||||||||||||
| Basic | 16,107,549 | 15,992,792 | 16,118,885 | 15,954,264 | ||||||||||||
| Diluted | 16,543,990 | 16,155,355 | 16,588,914 | 16,132,832 | ||||||||||||
| Cash dividends per common share | $ | 0.14 | $ | 0.14 | $ | 0.42 | $ | 0.42 | ||||||||
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except shares and par value data) | ||||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 18,373 | $ | 19,896 | ||||
| Accounts receivable, less allowance for doubtful accounts of $3,836 and $4,237, respectively | 98,822 | 103,494 | ||||||
| Inventories | 93,771 | 98,067 | ||||||
| Contract assets | 50,326 | 48,715 | ||||||
| Prepaid expenses and other current assets | 10,177 | 9,188 | ||||||
| Total current assets | 271,469 | 279,360 | ||||||
| Property, plant and equipment, net | 42,859 | 46,890 | ||||||
| Operating lease right-of-use assets | 16,282 | 17,909 | ||||||
| Deferred tax asset | 12,333 | 12,356 | ||||||
| Intangible assets, net | 47,959 | 51,160 | ||||||
| Other assets | 16,448 | 14,775 | ||||||
| Total assets | $ | 407,350 | $ | 422,450 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 46,292 | $ | 50,520 | ||||
| Other current liabilities | 42,381 | 43,978 | ||||||
| Current portion of long-term debt | 5,625 | 4,688 | ||||||
| Current portion of acquisition-related contingent liabilities | 740 | 1,403 | ||||||
| Total current liabilities | 95,038 | 100,589 | ||||||
| Long-term debt | 78,755 | 88,789 | ||||||
| Long-term pension liability | 13,517 | 13,284 | ||||||
| Long-term acquisition-related contingent liabilities | - | 557 | ||||||
| Long-term operating lease liabilities | 11,295 | 12,809 | ||||||
| Other long-term liabilities | 9,236 | 8,784 | ||||||
| Total liabilities | 207,841 | 224,812 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, $.001 par value - authorized 300,000 shares (none issued) | - | - | ||||||
| Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding 16,331,962 and 16,564,712 shares, respectively | 16 | 16 | ||||||
| Additional paid-in capital | 81,859 | 77,443 | ||||||
| Retained earnings | 121,052 | 122,464 | ||||||
| Accumulated other comprehensive loss, net of tax: | ||||||||
| Pensions | (1,054 | ) | (1,122 | ) | ||||
| Foreign currency translation adjustment | (2,364 | ) | (1,163 | ) | ||||
| Total shareholders’ equity | 199,509 | 197,638 | ||||||
| Total liabilities and shareholders’ equity | $ | 407,350 | $ | 422,450 | ||||
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 9,915 | $ | 5,215 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 9,872 | 10,331 | ||||||
| Inventory write-downs | 1,893 | 1,609 | ||||||
| Provision for bad debts - accounts receivable | 251 | 64 | ||||||
| Share-based compensation expense | 2,905 | 3,523 | ||||||
| Change in fair value of acquisition-related contingent liabilities | 363 | (442 | ) | |||||
| Change in fair value of written put options | 653 | (460 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 3,891 | 9,650 | ||||||
| Contract assets | (1,671 | ) | 6,208 | |||||
| Inventories | 2,241 | 18,280 | ||||||
| Prepaid expenses and other current assets | (1,292 | ) | 3,462 | |||||
| Other assets | (959 | ) | (844 | ) | ||||
| Accounts payable and other current liabilities | (4,292 | ) | 2,148 | |||||
| Payment of acquisition-related contingent liabilities | (686 | ) | (279 | ) | ||||
| Long-term pension liability | 325 | 561 | ||||||
| Other long-term liabilities | 1,088 | 362 | ||||||
| Net cash provided by operating activities | 24,497 | 59,388 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Additions to property, plant and equipment | (2,911 | ) | (4,023 | ) | ||||
| Net cash used in investing activities | (2,911 | ) | (4,023 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from borrowings of debt | 31,000 | 4,000 | ||||||
| Repayment of debt | (40,281 | ) | (51,813 | ) | ||||
| Debt issuance costs | - | (300 | ) | |||||
| Payment of cash dividends | (6,994 | ) | (6,886 | ) | ||||
| Payment of acquisition-related contingent liabilities | (897 | ) | (553 | ) | ||||
| Proceeds received on exercise of stock options | 1,118 | 97 | ||||||
| Common shares repurchased and retired | (6,346 | ) | - | |||||
| Net cash used in financing activities | (22,400 | ) | (55,455 | ) | ||||
| Effect of currency exchange rates on cash | (709 | ) | 97 | |||||
| Net increase (decrease) in cash and cash equivalents | (1,523 | ) | 7 | |||||
| Cash and cash equivalents balance, beginning of period | 19,896 | 17,722 | ||||||
| Cash and cash equivalents balance, end of period | $ | 18,373 | $ | 17,729 | ||||
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (Unaudited) (In thousands, except shares and per share data) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 5,403 | $ | 3,114 | $ | 9,915 | $ | 5,215 | ||||||||
| Interest expense | 1,569 | 2,464 | 4,897 | 7,658 | ||||||||||||
| Income tax expense | 1,170 | 160 | 1,900 | 380 | ||||||||||||
| Depreciation and amortization | 3,252 | 3,515 | 9,872 | 10,331 | ||||||||||||
| Impairment Charge | 260 | - | 260 | - | ||||||||||||
| EBITDA(1) | $ | 11,654 | $ | 9,253 | $ | 26,844 | $ | 23,584 | ||||||||
| EBITDA margin(1) | 7.8 | % | 6.8 | % | 6.4 | % | 6.0 | % | ||||||||
(1) EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, income tax expense and depreciation and amortization expense. EBITDA margin is defined as EBITDA divided by net sales. The Company believes EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences and (iii) asset base (depreciation and amortization). The Company uses EBITDA internally to monitor operating results and to evaluate the performance of its business. In addition, the compensation committee has used EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs. EBITDA is not a measure of financial performance under GAAP. EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate EBITDA are significant components in understanding and assessing the Company’s results of operations. The presentation of the Company’s EBITDA may change from time to time, including as a result of changed business conditions, new accounting pronouncements or otherwise. If the presentation changes, the Company undertakes to disclose any change between periods and the reasons underlying that change. The Company’s EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner.
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION - REPORTABLE SEGMENTS (Unaudited) (In thousands) | ||||||||||||||||||||||||
| Branded Products | Healthcare Apparel | Contact Centers | Intersegment Eliminations | Other | Total | |||||||||||||||||||
| For the Three Months Ended September 30, 2024: | ||||||||||||||||||||||||
| Net sales | $ | 92,547 | $ | 33,025 | $ | 25,038 | $ | (920 | ) | $ | - | $ | 149,690 | |||||||||||
| Cost of goods sold | 59,037 | 19,216 | 11,296 | (405 | ) | - | 89,144 | |||||||||||||||||
| Gross margin | 33,510 | 13,809 | 13,742 | (515 | ) | - | 60,546 | |||||||||||||||||
| Selling and administrative expenses | 24,223 | 11,240 | 11,482 | (515 | ) | 5,785 | 52,215 | |||||||||||||||||
| Other periodic pension cost | - | - | - | - | 189 | 189 | ||||||||||||||||||
| Add: Impairment charge | - | 260 | - | - | - | 260 | ||||||||||||||||||
| Add: Depreciation and amortization | 1,446 | 944 | 770 | - | 92 | 3,252 | ||||||||||||||||||
| Segment EBITDA(1) | $ | 10,733 | $ | 3,773 | $ | 3,030 | $ | - | $ | (5,882 | ) | $ | 11,654 | |||||||||||
| Branded Products | Healthcare Apparel | Contact Centers | Intersegment Eliminations | Other | Total | |||||||||||||||||||
| 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 | ||||||||||||||||||
| Add: Depreciation and amortization | 1,452 | 1,064 | 880 | - | 119 | 3,515 | ||||||||||||||||||
| Segment EBITDA(1) | $ | 6,958 | $ | 3,055 | $ | 4,053 | $ | - | $ | (4,813 | ) | $ | 9,253 | |||||||||||
| Branded Products | Healthcare Apparel | Contact Centers | Intersegment Eliminations | Other | Total | |||||||||||||||||||
| For the Nine Months Ended September 30, 2024: | ||||||||||||||||||||||||
| Net sales | $ | 260,911 | $ | 88,854 | $ | 73,422 | $ | (2,919 | ) | $ | - | $ | 420,268 | |||||||||||
| Cost of goods sold | 167,534 | 53,335 | 34,075 | (1,294 | ) | - | 253,650 | |||||||||||||||||
| Gross margin | 93,377 | 35,519 | 39,347 | (1,625 | ) | - | 166,618 | |||||||||||||||||
| Selling and administrative expenses | 70,486 | 30,931 | 32,436 | (1,625 | ) | 17,111 | 149,339 | |||||||||||||||||
| Other periodic pension cost | - | - | - | - | 567 | 567 | ||||||||||||||||||
| Add: Impairment charge | - | 260 | - | - | - | 260 | ||||||||||||||||||
| Add: Depreciation and amortization | 4,513 | 2,837 | 2,246 | - | 276 | 9,872 | ||||||||||||||||||
| Segment EBITDA(1) | $ | 27,404 | $ | 7,685 | $ | 9,157 | $ | - | $ | (17,402 | ) | $ | 26,844 | |||||||||||
| Branded Products | Healthcare Apparel | Contact Centers | Intersegment Eliminations | Other | Total | |||||||||||||||||||
| 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 | ||||||||||||||||||
| Add: Depreciation and amortization | 4,826 | 3,014 | 2,210 | - | 281 | 10,331 | ||||||||||||||||||
| Segment EBITDA(1) | $ | 21,456 | $ | 6,556 | $ | 10,098 | $ | - | $ | (14,526 | ) | $ | 23,584 | |||||||||||
(1) Segment EBITDA is our primary measure of segment profitability under U.S. GAAP ASC 280 “Segment Reporting”. Amounts included in income before income tax expense and excluded from Segment EBITDA include: interest expense and depreciation and amortization expense. Total EBITDA is a non-GAAP financial measure. Please see reconciliation of Total EBITDA included in the Non-GAAP Financial Measures table above.
