•  Excluding PPE sales, Fourth quarter net sales increased 28% and Annual net sales were up 26%
• Excluding PPE sales, BAMKO Fourth quarter net sales increased 41% and Annual net sales were up 65%
• The Office Gurus Fourth quarter net sales increased 45% and Annual net sales were up 54%
  

SEMINOLE, Fla., March 23, 2022 (GLOBE NEWSWIRE) -- On March 9, 2022, Superior Group of Companies, Inc. (the "Company") issued a press release announcing its financial results for the year ended December 31, 2021, and furnished the press release under Items 2.02 and 9.01 of Form 8-K on that day (the “Original Form 8-K”). Following the release, the Company discovered and corrected an income tax expense related to the non-cash pension termination charge recognized in 2021. More specifically, the Company determined that previously recorded deferred tax liabilities associated with the pension plans terminated in 2021 should have been eliminated to reduce tax expense. The correction resulted in a decrease of $2.2 million in tax expense for the year ended December 31, 2021, and an increase in prepaid and other current assets of $0.5 million and a decrease in deferred tax liabilities of $1.7 million, each as of December 31, 2021.  The correction of the error resulted in increasing net income for year ended December 31, 2021 by $2.2 million and net income per diluted share by $0.14 per share. The correction also resulted in the second quarter 2021 financial statements being restated reducing tax expense by $1.8 million and increasing net income by $1.8 million or $0.12 per diluted share, the third quarter 2021 financial statements being restated to reflect the impact of the second quarter restatement and the fourth quarter results being adjusted to reduce tax expense and to increase net income by $0.4 million or $0.02 per diluted share.

Our operating results and related statements for the fourth quarter and year ended December 31, 2021, revised as needed, follow:

The Company announced that for the year ended December 31, 2021, net sales increased $10.3 million or 2.0% to $537.0 million compared to $526.7 million in 2020. Pre-tax income was $33.1 million compared to $51.5 million in 2020. Net income for the fiscal year 2021 was $29.4 million, or $1.83 per diluted share, compared to $41.0 million, or $2.65 per diluted share in 2020.  2021 Pre-tax income was reduced by a noncash charge of $7.8 million related to the termination of the Company’s two defined benefit pension plans.  Net income for 2021 was reduced by $5.2 million or $0.32 per diluted share as a result of these charges.

Net sales for the fourth quarter ended December 31, 2021 were $142.0 million, a decrease of 2.3% compared to the 2020 fourth quarter of $145.4 million. Pre-tax income was $4.4 million compared to $15.9 million in the 2020 fourth quarter. Net income for the fourth quarter ended December 31, 2021 was $4.4 million, or $0.27 per diluted share, compared to $12.5 million, or $0.79 per diluted share, reported for the fourth quarter 2020.  Pre-tax income for the quarter was reduced by a noncash charge of $0.9 million as a result of final charges associated with the termination of the pension plans discussed above.  Net income for the fourth quarter was decreased by $0.7 million as a result of the net impact of the charge and related tax benefits.

Michael Benstock, Chief Executive Officer, commented, “We are very pleased to report that we exceeded our sales guidance for 2021, in spite of the impacts of the pandemic and supply chain difficulties.  It was quite an achievement to be able to exceed 2020 net sales in 2021 despite the fact that net sales of PPE in 2021 decreased to $38.6 million as compared to $131.2 million of PPE sales in 2020. From a bottom line perspective, inflationary and other cost pressures intensified during the year, negatively impacting our results.  Additionally, as the supply of PPE goods overwhelmed the market, we determined that it was necessary to take write downs against our remaining PPE inventory of $2.0 million in 2021 with $1.6 million of this amount being recorded in the fourth quarter.  While this was a negative impact for earnings in 2021, I would point out that we sold approximately $170.0 million in PPE product in 2020 and 2021 combined.  As we begin to move past the difficult comparisons with the tremendous sales of these PPE products, we believe we are well positioned to continue to show significant growth going forward and continuing improvements in our operating results.”
  
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) the projected impact of the current coronavirus (COVID-19) pandemic on our, our customers’, and our suppliers’ businesses, (2) projections of revenue, income, and other items relating to our financial position and results of operations, (3) statements of our plans, objectives, strategies, goals and intentions, (4) statements regarding the capabilities, capacities, market position and expected development of our business operations, and (5) 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; the effect of uncertainties related to the current coronavirus (COVID-19) pandemic on the U.S. and global markets, our business, operations, customers, suppliers and employees, including without limitation the length and scope of the restrictions imposed by various governments and success of efforts to deliver a vaccine on a timely basis, among other factors; general economic conditions, including employment levels, in the areas of the United States of America (“United States”)  in which the Company’s customers are located; changes in the healthcare, industrial, retail, hotels, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, successfully integrate any acquired businesses, successfully manage our expanding operations, or discover liabilities associated with such businesses during the diligence process; the price and availability of cotton, polyester and other manufacturing materials; attracting and retaining senior management and key personnel; the effect of our material weakness in internal control over financial reporting and/or the restatement of our second quarter and third quarter 2021 financial statements, 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, 2020. 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):

Superior Group of Companies^™, established in 1920, is a combination of companies that help our customers unlock the power of their brands by creating extraordinary brand engagement experiences for their employees and customers.

Fashion Seal Healthcare^®, HPI^® and WonderWink^® are our core uniform brands. Each is one of America’s leading providers of uniforms and image apparel in the markets we serve. We specialize in innovative uniform program design, global manufacturing, and state-of-the-art distribution. Every workday, more than 7 million Americans go to work wearing a uniform from Superior Group of Companies.

BAMKO^®, Tangerine Promotions^®, Public Identity^®, Gifts By Design and Sutter’s Mill Specialties are our signature promotional product companies. We 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 our customers in order to accelerate their growth and improve our customers’ service experiences.

SGC’s commitment to service, technology, quality and value-added benefits, as well as our financial strength and resources, provides unparalleled support for our customers’ diverse needs while embracing a “Customer 1st, Every Time!” philosophy and culture in all of our business segments.

Visit www.superiorgroupofcompanies.com for more information.

Contact:        
Andrew D. Demott, Jr.                 
COO & CFO                                
727-803-7135

-OR-

Hala Elsherbini
Three Part Advisors
Senior Managing Director
214-442-0016

Comparative figures are as follows:

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except shares and per share data)

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and par value data)

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except shares and per share data)

(1) Adjusted net income and diluted adjusted net income per share, which are non-GAAP measures, are defined as net income and net income per share, excluding the impact of pension plan termination charges (net of tax). Management believes adjusted net income and diluted adjusted net income per share provides useful information to investors because it allows management, investors and others to evaluate and compare our operating results from period to period by removing the impact of pension plan termination charges not appropriately reflective of our core business.