Superior Group of Companies, Inc. Reports Operating Results For the Second Quarter Ended June 30, 2021

Wednesday, 28. July 2021 13:00

Compared to the second quarter 2020:

  • Net Sales increased by 23.1% excluding PPE sales
  • The Office Gurus net sales increased 72.6%
  • BAMKO net sales increased 85.2% excluding PPE sales

SEMINOLE, Fla., July 28, 2021 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC), today announced its second quarter operating results for 2021.

The Company announced that for the second quarter ended June 30, 2021, net sales decreased 17.9% to $130.8 million, compared to second quarter 2020 net sales of $159.4 million. Pretax Income was $5.5 million compared to $18.9 million in the second quarter of 2020. Net income was $4.6 million or $0.28 per diluted share compared to $15.2 million, or $1.00 per diluted share for the second quarter of 2020.  In the second quarter of 2021, the Company terminated its two noncontributory qualified defined benefit pension plans, which were fully funded. Consequently, the Company recognized a pre-tax settlement charge of $6.9 million during the second quarter of 2021. Net of related tax benefits, this charge reduced net income per diluted share by $0.39. The pension plan terminations did not require a cash outlay by the Company. Absent the non-cash charge for the pension plan terminations, we would have reported $0.67 net income per diluted share for the quarter.

Michael Benstock, Chief Executive Officer, commented, “We are extremely excited by the exceptional momentum of our core businesses which face the most attractive outlook in our Company’s history. We are now at a stage where we believe that sales of any significant amount of crisis personal protective equipment (PPE) are behind us, and we are laser focused on our core products and services.  Excluding the impact of PPE sales, we saw tremendous growth in our promotional products segment and our remote staffing solutions segment.  This represented BAMKO’s third consecutive quarter of record quarterly sales of core promotional products. BAMKO finished the quarter with the largest backlog of sales in the history of the segment, with the backlog comprised of 99.6% of core promotional products.  Additionally, The Office Gurus added significantly more new seats in the second quarter than we had originally forecasted for the full year.  Uniform segment net sales, excluding PPE sales, were down slightly due to the significant pandemic demand for our core healthcare products in the second quarter of 2020.  We were able to replace the vast majority of these sales with increased demand from our non-essential markets and sales from additional channels in our healthcare business.  We are well positioned with strong tailwinds in all of our core businesses and expect to continue to report strong sales and earnings for the balance of 2021.  We now expect net sales for 2021 to approach $525 million.  For perspective, the full year 2020 included total PPE sales of $131.1 million and full year 2021 sales of PPE are expected to be less than $45 million.” 


Superior Group of Companies will hold a conference call on Wednesday, July 28, 2021 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

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 August 11, 2021. 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 10158424 for all replay access.

Disclosure Regarding Forward Looking Statements

Certain matters discussed in this Form 10-Q 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 Quarterly Report on Form 10-Q may include, without limitation: (1) the projected impact of the 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 COVID-19 pandemic, including existing and possible future variants, on the United States of America (“U.S.” or “United States”) and global markets, our business, operations, customers, suppliers and employees, including without limitation the length and scope of restrictions imposed by various governments and organizations and the success of efforts to deliver effective vaccines on a timely basis to a number of people sufficient to prevent or substantially lower the severity of incidents of infection or variants, among other factors; our ability to navigate successfully the challenges posed by current global supply disruptions; general economic conditions, including employment levels, in the areas of the United States in which the Company’s customers are located; changes in the healthcare, 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 and other manufacturing materials; attracting and retaining senior management and key personnel and other factors described in the Company’s filings with the Securities and Exchange Commission, including those described in the “Risk Factors” section herein and in 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 Form 10-Q 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 formerly Superior Uniform Group, 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. We provide customized support for each of our divisions through our shared services model.

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® and Gifts By Design 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 for more information.

Andrew D. Demott, Jr. Hala Elsherbini
COO, CFO & Treasurer-OR- Three Part Advisors
727-803-7135 Senior Managing Director

Comparative figures are as follows:

(In thousands, except share and per share data)

  Three Months Ended June 30, 
  2021  2020 
Net sales $130,787  $159,359 
Costs and expenses:        
Cost of goods sold  83,629   103,421 
Selling and administrative expenses  33,906   36,298 
Other periodic pension costs  440   333 
Pension plan termination charge  6,945   - 
Interest expense  330   433 
   125,250   140,485 
Income before taxes on income  5,537   18,874 
Income tax expense  960   3,700 
Net income $4,577  $15,174 
Net income per share:        
Basic $0.30  $1.01 
Diluted $0.28  $1.00 
Weighted average shares outstanding during the period:        
Basic  15,433,412   15,016,062 
Diluted  16,087,736   15,171,086 
Cash dividends per common share $0.12  $- 

(In thousands, except share and per share data)

  Six Months Ended June 30, 
  2021  2020 
Net sales $271,634  $253,604 
Costs and expenses:        
Cost of goods sold  175,433   164,215 
Selling and administrative expenses  69,017   63,787 
Other periodic pension costs  869   618 
Pension plan termination charge  6,945   - 
Interest expense  605   1,493 
   252,869   230,113 
Income before taxes on income  18,765   23,491 
Income tax expense  3,710   4,950 
Net income $15,055  $18,541 
Net income per share:        
Basic $0.98  $1.23 
Diluted $0.94  $1.22 
Weighted average shares outstanding during the period        
Basic  15,327,374   15,020,457 
Diluted  16,039,605   15,185,992 
Cash dividends per common share $0.22  $0.10 

(In thousands, except share and par value data)

  June 30,  December 31, 
  2021  2020 
Current assets:        
Cash and cash equivalents $7,530  $5,172 
Accounts receivable, less allowance for doubtful accounts of $5,466 and $7,667, respectively  101,591   101,902 
Accounts receivable - other  2,999   1,356 
Inventories  98,572   89,766 
Contract assets  41,151   39,231 
Prepaid expenses and other current assets  13,805   11,030 
Total current assets  265,648   248,457 
Property, plant and equipment, net  45,070   36,644 
Operating lease right-of-use assets  5,872   3,826 
Intangible assets, net  60,476   58,746 
Goodwill  38,618   36,116 
Other assets  13,062   10,135 
Total assets $428,746  $393,924 
Current liabilities:        
Accounts payable $38,039  $39,327 
Other current liabilities  33,790   44,670 
Current portion of long-term debt  15,286   15,286 
Current portion of acquisition-related contingent liabilities  3,362   5,589 
Total current liabilities  90,477   104,872 
Long-term debt  98,205   72,372 
Long-term pension liability  14,443   14,574 
Long-term acquisition-related contingent liabilities  -   1,892 
Long-term operating lease liabilities  1,952   1,599 
Deferred tax liability  1,353   450 
Other long-term liabilities  8,801   6,535 
Commitments and contingencies (Note 6)        
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 15,824,530 and 15,391,660 shares, respectively.  16   15 
Additional paid-in capital  65,578   61,844 
Retained earnings  153,412   141,972 
Accumulated other comprehensive income (loss), net of tax:        
Pensions  (4,563)  (10,898)
Cash flow hedges  58   69 
Foreign currency translation adjustment  (986)  (1,372)
Total shareholders’ equity  213,515   191,630 
  Total liabilities and shareholders’ equity $428,746  $393,924 

(In thousands)

  Six Months Ended June 30, 
  2021  2020 
Net income $15,055  $18,541 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
Depreciation and amortization  4,373   3,959 
Provision for bad debts - accounts receivable  1,244   4,517 
Share-based compensation expense  1,669   1,061 
Deferred income tax benefit  (1,126)  (2,417)
Change in fair value of acquisition-related contingent liabilities  1,741   1,165 
Pension plan termination charge  6,945   - 
Changes in assets and liabilities, net of acquisition of business:        
Accounts receivable  (896)  (12,261)
Accounts receivable - other  (1,392)  264 
Contract assets  (1,868)  3,404 
Inventories  (8,738)  492 
Prepaid expenses and other current assets  (2,565)  (1,479)
Other assets  (1,401)  390 
Accounts payable and other current liabilities  (14,535)  21,023 
Payment of acquisition-related contingent liabilities  (4,220)  - 
Long-term pension liability  384   639 
Other long-term liabilities  2,320   464 
Net cash provided by (used in) operating activities  (3,010)  39,762 
Additions to property, plant and equipment  (11,326)  (4,893)
Acquisition of business  (6,026)  - 
Net cash used in investing activities  (17,352)  (4,893)
Proceeds from borrowings of debt  127,574   77,525 
Repayment of debt  (101,801)  (111,838)
Payment of cash dividends  (3,437)  (1,521)
Payment of acquisition-related contingent liability  (1,641)  (1,966)
Proceeds received on exercise of stock options  2,122   33 
Tax withholdings on exercise of performance based stock  (405)  - 
Tax (provision) benefit from vesting of acquisition-related restricted stock  171   (13)
Common stock reacquired and retired  -   (500)
Net cash provided by (used in) financing activities  22,583   (38,280)
Effect of currency exchange rates on cash  137   (525)
Net increase (decrease) in cash and cash equivalents  2,358   (3,936)
Cash and cash equivalents balance, beginning of period  5,172   9,038 
Cash and cash equivalents balance, end of period $7,530  $5,102 

(In thousands, except share and par value data)

  Three Months Ended June 30,  Six Months Ended June 30, 
  2021  2020  2021  2020 
Net income $4,577  $15,174  $15,055  $18,541 
Adjustment for items:                
Pension plan termination charge  6,945   -   6,945   - 
Tax impact of adjustment  (610)  -   (610)  - 
Adjusted net income(1) $10,912  $15,174  $21,390  $18,541 
Diluted net income per share $0.28  $1.00  $0.94  $1.22 
Adjustment for items, after-tax, per diluted share  0.39   -   0.39   - 
Diluted adjusted net income per share(1) $0.67  $1.00  $1.33  $1.22 
Weighted average shares outstanding during the period                
Diluted  16,087,736   15,171,086   16,039,605   15,185,992 

(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.


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