Superior Group of Companies, Inc. Reports Third Quarter Operating Results
- Record Earnings Per Share at $0.39
- Net Sales Increase of 41.4 percent
- 24th Consecutive Quarterly Sales Increase
SEMINOLE, Fla., Oct. 25, 2018 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC), manufacturer of uniforms, career apparel and accessories (the “Company”), today announced that for the third quarter ended September 30, 2018, net sales increased 41.4 percent to $95.9 million compared with 2017 third quarter net sales of $67.8 million. Net income for the 2018 third quarter was $6.1 million, or $0.39 per diluted share, compared with $5.0 million, or $0.33 per diluted share, reported for the quarter ended September 30, 2017.
Michael Benstock, Chief Executive Officer commented, “The strategic benefits of our 2017 and 2018 acquisitions remain clear, and we are well positioned for future sales and earnings growth as a result. We remain focused on continuing to successfully integrate these businesses to provide additional sales and operational efficiencies across our company portfolio. We are confident that this strategy will provide long term benefits to our stakeholders.
While organic growth within our Uniform and Promotional Products segments was lower than anticipated, we are bullish on the long term outlook for these segments, and believe our current investments in these segments will provide significant returns for the Company in the future.
The Office Gurus, our Remote Staffing segment reported another outstanding quarter with sales growth in excess of 35% as they continue to expand through both new customer acquisition and existing customer sales.
During the quarter we also hired a new Chief Financial Officer, Michael Attinella. Mike is an accomplished finance executive with significant public company and operational expertise. We are thrilled to have someone with his background and proven experience join Superior’s leadership team.”
CONFERENCE CALL
Superior Group of Companies will hold a conference call on Thursday, October 25, 2018 at 2:00 p.m. Eastern Time to discuss the Company’s results. Interested individuals may join the teleconference by dialing (844) 861-5505 for U.S. dialers and (412) 317-6586 for International dialers. The Canadian Toll Free number is (866) 605-3852. Please ask to be joined into the Superior Group of Companies call. The live webcast and archived replay can also be accessed in the investor information section of the Company’s website at www.superiorgroupofcompanies.com.
A telephone replay of the teleconference will be available one hour after the end of the call through 2:00 p.m. Eastern Time on November 1, 2018. To access the replay, dial (877) 344-7529 in the United States or (412) 317-0088 from international locations. Canadian dialers can access the replay at (855) 669-9658. Please reference conference number 10124470 for all replay access.
About Superior Group of Companies, Inc. (SGC):
Superior Group of Companies™, formerly Superior Uniform Group, established in 1920, is a combination of companies that help customers unlock the power of their brands by creating extraordinary brand experiences for employees and customers. It provides customized support for each of its divisions through its shared services model.
Fashion Seal Healthcare®, HPI™ and CID Resources are signature uniform brands of Superior Group of Companies. Each is one of America’s leading providers of uniforms and image apparel in the markets it serves. They specialize in innovative uniform program design, global manufacturing, and state-of-the-art distribution. Every day, more than 6 million Americans go to work wearing a uniform from Superior Group of Companies.
BAMKO®, Tangerine Promotions® and Public Identity® are signature promotional products and branded merchandise brands of Superior Group of Companies. They provide unique custom branding, design, sourcing, and marketing solutions to some of the world’s most successful brands.
The Office Gurus® is a global provider of custom call and contact center support. As a true strategic partner, The Office Gurus implements customized solutions for its customers in order to accelerate their growth and improve their customers’ service experiences.
SGC’s commitment to service, technology, quality and value-added benefits, as well as its financial strength and resources, provides unparalleled support for its customers’ diverse needs while embracing a “Customer 1st, Every Time!” philosophy and culture in all of its business segments.
Visit www.superiorgroupofcompanies.com for more information.
| Contact: | |||
| Mike Attinella | OR | Hala Elsherbini | |
| CFO & Treasurer | Halliburton Investor Relations | ||
| (727) 803-7170 | (972) 458-8000 | ||
Comparative figures are as follows:
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
| THREE MONTHS ENDED SEPTEMBER 30, | |||||||||||
| (Unaudited) | |||||||||||
| (In thousands, except shares and per share data) | |||||||||||
| 2018 | 2017 | ||||||||||
| Net sales | $ | 95,870 | $ | 67,773 | |||||||
| Costs and expenses: | |||||||||||
| Cost of goods sold | 62,070 | 42,984 | |||||||||
| Selling and administrative expenses | 25,482 | 17,386 | |||||||||
| Other periodic pension costs | 96 | 348 | |||||||||
| Interest expense | 940 | 213 | |||||||||
| 88,588 | 60,931 | ||||||||||
| Gain on sale of property, plant and equipment | - | - | |||||||||
| Income before taxes on income | 7,282 | 6,842 | |||||||||
| Income tax expense | 1,160 | 1,880 | |||||||||
| Net income | $ | 6,122 | $ | 4,962 | |||||||
| Weighted average number of shares outstanding during the period | |||||||||||
| (Basic) | 15,010,660 | 14,573,813 | |||||||||
| (Diluted) | 15,499,894 | 15,229,722 | |||||||||
| Per Share Data: | |||||||||||
| Basic | |||||||||||
| Net income | $ | 0.41 | $ | 0.34 | |||||||
| Diluted | |||||||||||
| Net income | $ | 0.39 | $ | 0.33 | |||||||
| Cash dividends per common share | $ | 0.100 | $ | 0.095 | |||||||
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||
| NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands, except shares and per share data) | ||||||||||
| 2018 | 2017 | |||||||||
| Net sales | $ | 251,349 | $ | 194,365 | ||||||
| Costs and expenses: | ||||||||||
| Cost of goods sold | 163,396 | 123,987 | ||||||||
| Selling and administrative expenses | 69,991 | 51,809 | ||||||||
| Other periodic pension costs | 289 | 1,046 | ||||||||
| Interest expense | 1,974 | 593 | ||||||||
| 235,650 | 177,435 | |||||||||
| Gain on sale of property, plant and equipment | - | 1,018 | ||||||||
| Income before taxes on income | 15,699 | 17,948 | ||||||||
| Income tax expense | 3,310 | 4,810 | ||||||||
| Net income | $ | 12,389 | $ | 13,138 | ||||||
| Weighted average number of shares outstanding during the period | ||||||||||
| (Basic) | 14,929,513 | 14,475,311 | ||||||||
| (Diluted) | 15,505,642 | 15,066,616 | ||||||||
| Per Share Data: | ||||||||||
| Basic | ||||||||||
| Net income | $ | 0.83 | $ | 0.91 | ||||||
| Diluted | ||||||||||
| Net income | $ | 0.80 | $ | 0.87 | ||||||
| Cash dividends per common share | $ | 0.290 | $ | 0.270 | ||||||
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| (In thousands, except share and par value data) | |||||||||||
| ASSETS | |||||||||||
| September 30, | |||||||||||
| 2018 | December 31, | ||||||||||
| (Unaudited) | 2017 | ||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | 2,296 | $ | 8,130 | |||||||
| Accounts receivable, less allowance for doubtful accounts | |||||||||||
| of $1,810 and $ 1,382, respectively | 65,023 | 50,569 | |||||||||
| Accounts receivable - other | 2,249 | 1,848 | |||||||||
| Inventories | 65,057 | 64,979 | |||||||||
| Contract assets | 49,605 | - | |||||||||
| Prepaid expenses and other current assets | 10,756 | 11,011 | |||||||||
| TOTAL CURRENT ASSETS | 194,986 | 136,537 | |||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 28,961 | 26,844 | |||||||||
| OTHER INTANGIBLE ASSETS, NET | 67,279 | 29,061 | |||||||||
| GOODWILL | 33,835 | 16,032 | |||||||||
| DEFERRED INCOME TAXES | - | 2,900 | |||||||||
| OTHER ASSETS | 9,969 | 7,564 | |||||||||
| $ | 335,030 | $ | 218,938 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | 25,024 | $ | 19,752 | |||||||
| Other current liabilities | 14,804 | 12,409 | |||||||||
| Current portion of long-term debt | 6,000 | 6,000 | |||||||||
| Current portion of acquisition-related contingent liabilities | 791 | 3,061 | |||||||||
| TOTAL CURRENT LIABILITIES | 46,619 | 41,222 | |||||||||
| LONG-TERM DEBT | 112,224 | 32,933 | |||||||||
| LONG-TERM PENSION LIABILITY | 7,761 | 8,319 | |||||||||
| LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES | 5,301 | 7,283 | |||||||||
| DEFERRED INCOME TAXES | 8,525 | - | |||||||||
| OTHER LONG-TERM LIABILITIES | 3,891 | 4,213 | |||||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 5) | |||||||||||
| 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 - 15,299,207 and 15,081,947, respectively. | 15 | 15 | |||||||||
| Additional paid-in capital | 55,692 | 49,103 | |||||||||
| Retained earnings | 102,062 | 83,129 | |||||||||
| Accumulated other comprehensive income (loss), net of tax: | |||||||||||
| Pensions | (6,635 | ) | (7,282 | ) | |||||||
| Cash flow hedges | 119 | (90 | ) | ||||||||
| Foreign currency translation adjustment | (544 | ) | 93 | ||||||||
| TOTAL SHAREHOLDERS' EQUITY | 150,709 | 124,968 | |||||||||
| $ | 335,030 | $ | 218,938 | ||||||||
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands) | ||||||||||
| 2018 | 2017 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
| Net income | $ | 12,389 | $ | 13,138 | ||||||
| Adjustments to reconcile net income | ||||||||||
| to net cash provided by (used in) operating activities: | ||||||||||
| Depreciation and amortization | 5,745 | 4,081 | ||||||||
| Provision for bad debts - accounts receivable | 409 | 814 | ||||||||
| Share-based compensation expense | 1,867 | 1,654 | ||||||||
| Deferred income tax benefit | (278 | ) | (586 | ) | ||||||
| Gain on sale of property, plant and equipment | - | (1,018 | ) | |||||||
| Change in fair value of acquisition-related contingent liabilities | (1,212 | ) | 115 | |||||||
| Changes in assets and liabilities, net of acquisition of business | ||||||||||
| Accounts receivable - trade | (5,542 | ) | (1,746 | ) | ||||||
| Accounts receivable - other | (401 | ) | 931 | |||||||
| Contract assets | (3,779 | ) | - | |||||||
| Inventories | 5,742 | 3,270 | ||||||||
| Prepaid expenses and other current assets | (226 | ) | (189 | ) | ||||||
| Other assets | (2,343 | ) | (2,756 | ) | ||||||
| Accounts payable and other current liabilities | (1,077 | ) | (725 | ) | ||||||
| Long-term pension liability | 292 | (529 | ) | |||||||
| Other long-term liabilities | (283 | ) | 977 | |||||||
| Net cash provided by operating activities | 11,303 | 17,431 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
| Additions to property, plant and equipment | (3,881 | ) | (2,518 | ) | ||||||
| Acquisition of businesses, net of acquired cash | (85,597 | ) | (766 | ) | ||||||
| Proceeds from disposals of property, plant and equipment | - | 2,858 | ||||||||
| Net cash used in investing activities | (89,478 | ) | (426 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
| Proceeds from long-term debt | 170,713 | 72,543 | ||||||||
| Repayment of long-term debt | (91,423 | ) | (75,707 | ) | ||||||
| Payment of cash dividends | (4,335 | ) | (3,874 | ) | ||||||
| Payment of acquisition-related contingent liabilities | (3,032 | ) | (1,800 | ) | ||||||
| Proceeds received on exercise of stock options | 432 | 1,218 | ||||||||
| Purchase of common stock | (268 | ) | - | |||||||
| Tax benefit from vesting of acquisition-related restricted stock | 445 | 650 | ||||||||
| Tax withholding on exercise of stock rights | (17 | ) | (421 | ) | ||||||
| Net cash provided by (used in) financing activities | 72,515 | (7,391 | ) | |||||||
| Effect of currency exchange rates on cash | (174 | ) | 46 | |||||||
| Net (decrease) increase in cash and cash equivalents | (5,834 | ) | 9,660 | |||||||
| Cash and cash equivalents balance, beginning of year | 8,130 | 3,649 | ||||||||
| Cash and cash equivalents balance, end of period | $ | 2,296 | $ | 13,309 | ||||||
