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Superior Uniform Group, Inc. Reports First Quarter Operating Results

SGC

  • Net Sales Increase 19.8 Percent
  • 22nd Consecutive Quarter with Sales Increase

SEMINOLE, Fla., May 02, 2018 (GLOBE NEWSWIRE) -- Superior Uniform Group, Inc. (NASDAQ:SGC), manufacturer of uniforms, career apparel and accessories, today announced that for the first quarter ended March 31, 2018, net sales increased 19.8 percent to $73.1 million compared with 2017 first quarter net sales of $61.0 million.  Net income for the 2018 first quarter was $2.5 million, or $0.16 per diluted share, compared with $3.8 million, or $0.26 per diluted share, reported for the quarter ended March 31, 2017.   Net income for the first quarter of 2017 included a pre-tax gain of $1.0 million related to the sale of the Company’s former call center building in San Salvador. This gain resulted in an increase in earnings per share (diluted) in the first quarter of 2017 of approximately $0.05.

Michael Benstock, Chief Executive Officer, commented, “Our results for the first quarter were mixed across our various segments.  Uniform segment net sales were down slightly at $48.1 million versus $48.3 million.   While organic growth in our uniform segment lagged in the first quarter, our results demonstrate our diversified approach and our ability to maintain discipline while navigating a competitive market environment.

“Promotional Products net sales were up 109 percent with most of this increase coming from our two acquisitions completed in the latter part of 2017. We’re making solid progress on integration efforts, leveraging our shared services model as well as capitalizing on cross-selling opportunities across our business. The Promotional Products segment reported a pre-tax loss of approximately $0.6 million for the quarter in comparison to pre-tax income of $0.4 million in the first quarter of 2017.  This loss is attributed to the December acquisition of Tangerine and the nature of their business.  Tangerine generally reports lower sales in the first and fourth quarter each year with a more significant portion of their annual sales volume coming in the second and third quarters.  We are still in the early stages of integrating this recent acquisition, and we still expect the results from this acquisition to be accretive for the full year in 2018. 

“The Office Gurus, our Remote Staffing segment, had a tremendous quarter with net sales to outside customers increasing by $2.6 million or 68.8 percent as they continue to land new customers and to grow with existing customers.” 

CONFERENCE CALL

Superior Uniform Group will hold a conference call on Wednesday, May 2, 2018 at 10:00 a.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 Uniform Group call. The live webcast and archived replay can also be accessed in the investor information section of the Company’s website at www.superioruniformgroup.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 May 9, 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 10119178 for all replay access.

About Superior Uniform Group, Inc.
Superior Uniform Group® (NASDAQ:SGC), established in 1920, is a provider of a wide range of award winning products and services. It provides customized support for each of its divisions through its shared services model. 

Fashion Seal Healthcare®, Superior I.D, and HPI Direct® are signature uniform brands of Superior Uniform Group®.  Each is one of America’s foremost providers of fine uniforms and image apparel in its markets. They are leaders in innovative uniform program design, global manufacturing, and state-of-the-art distribution. These brands help their customers achieve a more professional appearance and better communicate their own brands. More than 5 million Americans are smartly outfitted with a Superior uniform each workday. 

BAMKO® is one of the nation’s largest full-service promotional products companies. It provides 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.

Superior’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.

Forward-Looking Statements
Statements contained in this press release, which are not historical facts, such as statements with respect to the results from Superior’s recent acquisitions and its expected growth, may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  All forward-looking statements are subject to risks and uncertainties, including without limitation, those identified in the Company’s SEC filings, which could cause actual results to differ from those projected.

For more information, call (800) 727-8643 or visit www.SuperiorUniformGroup.com.

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

OR

Hala Elsherbini, Halliburton Investor Relations
(972) 458-8000

Comparative figures are as follows:

   
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
                 
THREE MONTHS ENDED MARCH 31,  
(Unaudited)  
(In thousands, except shares and per share data)  
                 
        2018     2017  
                 
Net sales     $ 73,087   $ 60,987  
                 
Costs and expenses:                
Cost of goods sold       48,212     38,773  
Selling and administrative expenses       21,182     17,429  
Other periodic pension costs       96     214  
Interest expense       277     184  
        69,767     56,600  
                 
Gain on sale of property, plant and equipment       -     1,018  
                 
                 
Income before taxes on income       3,320     5,405  
Income tax expense       870     1,570  
                 
Net income     $ 2,450   $ 3,835  
                 
Weighted average number of shares outstanding during the period          
(Basic)         14,821,659     14,350,721  
(Diluted)         15,457,629     14,929,695  
Per Share Data:                
Basic                
Net income     $   0.17   $ 0.27  
Diluted                
Net income     $   0.16   $ 0.26  
                 
Cash dividends per common share     $   0.0950   $ 0.0875  
                 

 

   
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(In thousands, except share and par value data)  
               
ASSETS                  
               
        March 31,      
        2018   December 31,  
        (Unaudited)   2017  
CURRENT ASSETS:            
Cash and cash equivalents     $ 10,442   $ 8,130    
Accounts receivable, less allowance for doubtful accounts of  $1,510 and $1,382, respectively       48,275     50,569    
Accounts receivable - other       2,107     1,848    
Inventories       36,380     64,979    
Contract assets       47,098     -    
Prepaid expenses and other current assets       10,005     11,011    
TOTAL CURRENT ASSETS       154,307     136,537    
               
PROPERTY, PLANT AND EQUIPMENT, NET     27,033     26,844    
OTHER INTANGIBLE ASSETS, NET         28,302     29,061    
GOODWILL         16,042     16,032    
DEFERRED INCOME TAXES         215     2,900    
OTHER ASSETS       9,180     7,564    
      $ 235,079   $ 218,938    
               
LIABILITIES AND SHAREHOLDERS' EQUITY                  
               
CURRENT LIABILITIES:              
Accounts payable     $ 19,263   $ 19,752    
Other current liabilities       9,375     12,409    
Current portion of long-term debt       6,000     6,000    
Current portion of acquisition-related contingent liabilities   1,080     3,061    
TOTAL CURRENT LIABILITIES       35,718     41,222    
               
LONG-TERM DEBT       39,949     32,933    
LONG-TERM PENSION LIABILITY       8,133     8,319    
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES   7,469     7,283    
OTHER LONG-TERM LIABILITIES       4,744     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 - 15,143,328 and 15,081,947, respectively.     15     15    
Additional paid-in capital       50,626     49,103    
Retained earnings       95,296     83,129    
Accumulated other comprehensive income (loss), net of tax:          
Pensions         (7,066 )   (7,282 )  
Cash flow hedges         50     (90 )  
Foreign currency translation adjustment       145     93    
TOTAL SHAREHOLDERS' EQUITY       139,066     124,968    
      $ 235,079   $ 218,938    
               

 

 
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31,
(Unaudited)
(In thousands)
             
           
        2018   2017
             
CASH FLOWS FROM OPERATING ACTIVITIES        
Net income     $ 2,450   $ 3,835  
         
Adjustments to reconcile net income to net cash (used in) provided by operating activities:        
Depreciation and amortization   1,626     1,358  
Provision for bad debts - accounts receivable   157     146  
Share-based compensation expense   1,052     842  
Deferred income tax provision (benefit)   162     (320 )
Gain on sale of property, plant and equipment   -     (1,018 )
Change in fair value of acquisition-related contingent liabilities   209     44  
             
Changes in assets and liabilities:        
Accounts receivable - trade   2,147     7,164  
Accounts receivable - other   (259 )   689  
Contract assets     (3,780 )   -  
Inventories     3,742     (1,078 )
Prepaid expenses and other current assets   27     (1,892 )
Other assets     (1,564 )   (1,522 )
Accounts payable and other current liabilities   (7,132 )   (1,016 )
Long-term pension liability   97     (920 )
Other long-term liabilities   450     696  
Net cash (used in) provided by operating activities   (616 )   7,008  
             
CASH FLOWS FROM INVESTING ACTIVITIES        
Additions to property, plant and equipment   (1,055 )   (930 )
Proceeds from disposals of property, plant and equipment   -     2,808  
Net cash (used in) provided by  investing activities   (1,055 )   1,878  
             
CASH FLOWS FROM FINANCING ACTIVITIES        
Proceeds from long-term debt   31,657     71,209  
Repayment of long-term debt   (24,642 )   (71,367 )
Payment of cash dividends     (1,402 )   (1,231 )
Payment of acquisition-related contingent liability   (2,000 )   (1,800 )
Proceeds received on exercise of stock options   257     105  
Tax benefit from vesting of acquisition-related restricted stock   105     70  
Tax withholding on exercise of stock rights   (17 )   (201 )
             
Net cash provided by (used in) financing activities   3,958     (3,215 )
             
Effect of currency exchange rates on cash   25     52  
             
Net increase in cash and cash equivalents   2,312     5,723  
             
Cash and cash equivalents balance, beginning of year   8,130     3,649  
             
Cash and cash equivalents balance, end of period   $ 10,442     $ 9,372  
             



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