Superior Group of Companies, Inc. (NASDAQ: SGC), today announced
its fourth quarter and year-end operating results for 2020.
The Company announced that for the year ended
December 31, 2020, net sales increased $150.0 million or 40%
percent to $526.7 million compared to $376.7 million in 2019.
Pre-tax income was $51.5 million compared to $15.3 million in 2019.
Net income for the fiscal year 2020 was $41.0 million, or $2.65 per
diluted share, compared to $12.1 million, or $0.79 per diluted
share in 2019.
Net sales for the fourth quarter ended December
31, 2020 were $145.4 million, an increase of 34% compared to the
2019 fourth quarter of $108.4 million. Pre-tax income was $15.9
million compared to $4.0 million in the 2019 fourth quarter. Net
income for the fourth quarter ended December 31, 2020 was $12.5
million, or $0.79 per diluted share, compared to $3.0 million, or
$0.20 per diluted share, reported for the fourth quarter 2019.
Michael Benstock, Chief Executive Officer,
commented, “While the pandemic made 2020 very challenging, we are
very proud and grateful that our teams in all segments responded so
strategically and collaboratively to the adversity which produced
record setting results for our shareholders. We continued to
benefit from our successful pivot to supplying a wider array of
personal protective equipment (“PPE”) during the fourth quarter.
For the full year 2020, net sales of PPE were approximately $131.2
million as compared to $3.9 million in 2019. While the pivot to PPE
was key to our growth in net sales and net income, it is important
to note that we actually had organic growth in net sales in 2020 in
all three of our business segments exclusive of the increased sales
from PPE. Sales at BAMKO, which comprises our Promotional Products
Segment, grew 53% for the quarter and 88% for the year, eclipsing
$202 million. Sales at The Office Gurus, our Remote Staffing
Segment, returned to pre-pandemic growth levels in the fourth
quarter with 31% and 18% growth for the quarter and year,
respectively. Sales in our Uniform Segment also grew 24% for
the quarter and 21% for the year.
“Our pre-existing strategy of selling to a
diverse range of customers with our redundant manufacturing
strategy remains in place and bodes well for our future, especially
as we continue to provide products and services to many essential
businesses in all of our SGC segments. Both our uniform and
promotional products segments finished the year with record
year-end opportunity pipelines and backlogs. The Office Gurus
segment continues to grow, including by leveraging its work from
home solution to increase capacity. While we have no certainty as
to how the pandemic will impact our customers in the future, we are
fully prepared to meet the challenges that might face us. We have
made the proper investments in our people, technology and product
development, and we continue to do so at an accelerated pace when
needed. While we are living in the most uncertain of times, we have
met challenges throughout our 100 years with innovation and
success. We will continue to do so going forward in a way that
focuses on building long-term shareholder value.
“As a result of the cash flow generated from
operating activities, we were able to reduce our outstanding debt
by $31.6 million in 2020. This reduction has bolstered our ability
to capitalize on opportunities as they arise such as our recent
acquisition of Gifts by Design during the first quarter of 2021. We
expect that additional favorable acquisition opportunities will be
available for us in the current environment.”
CONFERENCE CALL
Superior Group of Companies will hold a
conference call on Monday, March 1, 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 www.superiorgroupofcompanies.com.
A telephone replay of the teleconference will be
available one hour after the end of the call through 10:00 a.m.
Eastern Time on March 15, 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
10151894 for all replay access.
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 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,
2019. 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™ 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 www.superiorgroupofcompanies.com for more information.
Contact: Andrew
D. Demott, Jr.
COO,
CFO &
Treasurer 727-803-7135
-OR-
Hala ElsherbiniThree Part AdvisorsSenior Managing
Director214-442-0016
Comparative figures are as follows:
SUPERIOR GROUP OF COMPANIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(In thousands, except shares and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
2020 |
|
2019 |
|
2018 |
Net sales |
|
$ |
526,697 |
|
$ |
376,701 |
|
$ |
346,350 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
Cost of goods sold |
|
337,932 |
|
247,772 |
|
224,653 |
Selling and administrative expenses |
|
136,515 |
|
107,282 |
|
96,710 |
Other periodic pension costs |
|
955 |
|
1,962 |
|
385 |
Interest expense |
|
2,003 |
|
4,399 |
|
3,207 |
|
|
477,405 |
|
361,415 |
|
324,955 |
Gain on sale of property,
plant and equipment |
|
2,164 |
|
- |
|
- |
Income before taxes on
income |
|
51,456 |
|
15,286 |
|
21,395 |
Income tax expense |
|
10,430 |
|
3,220 |
|
4,420 |
Net income |
|
$ |
41,026 |
|
$ |
12,066 |
|
$ |
16,975 |
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
Basic |
|
$ |
2.72 |
|
$ |
0.81 |
|
$ |
1.14 |
Diluted |
|
$ |
2.65 |
|
$ |
0.79 |
|
$ |
1.10 |
|
|
|
|
|
|
|
Weighted average shares
outstanding during the period |
|
|
|
|
|
|
Basic |
|
15,075,134 |
|
14,945,165 |
|
14,937,786 |
Diluted |
|
15,508,420 |
|
15,266,408 |
|
15,472,133 |
|
|
|
|
|
|
|
Cash dividends per common
share |
|
$ |
0.40 |
|
$ |
0.40 |
|
$ |
0.39 |
SUPERIOR GROUP OF COMPANIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
(In thousands, except share and par value data) |
|
|
|
|
|
|
|
December 31, |
|
|
2020 |
|
2019 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
5,172 |
|
$ |
9,038 |
Accounts receivable, less allowance for doubtful accounts of $7,667
and $2,964, respectively |
|
101,902 |
|
79,746 |
Accounts receivable - other |
|
1,356 |
|
1,083 |
Inventories |
|
89,766 |
|
73,379 |
Contract assets |
|
39,231 |
|
38,533 |
Prepaid expenses and other current assets |
|
11,030 |
|
9,934 |
Total current assets |
|
248,457 |
|
211,713 |
Property, plant and equipment,
net |
|
36,644 |
|
32,825 |
Operating lease right-of-use
assets |
|
3,826 |
|
5,445 |
Intangible assets, net |
|
58,746 |
|
62,536 |
Goodwill |
|
36,116 |
|
36,292 |
Other assets |
|
10,135 |
|
10,122 |
Total assets |
|
$ |
393,924 |
|
$ |
358,933 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
39,327 |
|
$ |
33,271 |
Other current liabilities |
|
44,670 |
|
18,894 |
Current portion of long-term debt |
|
15,286 |
|
15,286 |
Current portion of acquisition-related contingent liabilities |
|
5,589 |
|
1,905 |
Total current liabilities |
|
104,872 |
|
69,356 |
Long-term debt |
|
72,372 |
|
104,003 |
Long-term pension
liability |
|
14,574 |
|
10,253 |
Long-term acquisition-related
contingent liabilities |
|
1,892 |
|
3,423 |
Long-term operating lease
liabilities |
|
1,599 |
|
2,380 |
Deferred tax liability |
|
450 |
|
7,042 |
Other long-term
liabilities |
|
6,535 |
|
4,922 |
Commitments and
contingencies |
|
|
|
|
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 - 15,391,660 and 15,227,604 shares,
respectively. |
|
15 |
|
15 |
Additional paid-in capital |
|
61,844 |
|
57,442 |
Retained earnings |
|
141,972 |
|
107,581 |
Accumulated other comprehensive income (loss), net of tax: |
|
|
|
|
Pensions |
|
(10,898) |
|
(7,224) |
Cash flow hedges |
|
69 |
|
91 |
Foreign currency translation adjustment |
|
(1,372) |
|
(351) |
Total shareholders’ equity |
|
191,630 |
|
157,554 |
Total liabilities and shareholders’ equity |
|
$ |
393,924 |
|
$ |
358,933 |
SUPERIOR GROUP OF COMPANIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
2020 |
|
2019 |
|
2018 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income |
|
$ |
41,026 |
|
$ |
12,066 |
|
$ |
16,975 |
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
8,132 |
|
8,272 |
|
7,906 |
Provision for bad debts - accounts receivable |
|
6,746 |
|
1,323 |
|
867 |
Share-based compensation expense |
|
2,530 |
|
1,484 |
|
2,264 |
Deferred income tax benefit |
|
(4,987) |
|
(1,595) |
|
(665) |
Gain on sale of property, plant and equipment |
|
(2,164) |
|
(5) |
|
- |
Change in fair value of acquisition-related contingent
liabilities |
|
4,119 |
|
(74) |
|
(1,116) |
Changes in assets and liabilities, net of acquisition of
business: |
|
|
|
|
|
|
Accounts receivable |
|
(29,251) |
|
(17,104) |
|
(4,886) |
Accounts receivable - other |
|
(273) |
|
660 |
|
105 |
Contract assets |
|
(699) |
|
10,703 |
|
(3,382) |
Inventories |
|
(16,763) |
|
(4,984) |
|
2,429 |
Prepaid expenses and other current assets |
|
(1,474) |
|
(3,479) |
|
2,622 |
Other assets |
|
464 |
|
(1,717) |
|
(1,257) |
Accounts payable and other current liabilities |
|
32,690 |
|
10,904 |
|
(1,344) |
Long-term pension liability |
|
(508) |
|
2,138 |
|
(128) |
Other long-term liabilities |
|
1,771 |
|
1,415 |
|
(526) |
Net cash provided by operating activities |
|
41,359 |
|
20,007 |
|
19,864 |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
Additions to property, plant and equipment |
|
(11,857) |
|
(9,672) |
|
(4,869) |
Proceeds from disposals of property, plant and equipment |
|
5,284 |
|
5 |
|
- |
Acquisition of businesses, net of acquired cash |
|
- |
|
- |
|
(85,597) |
Net cash used in investing activities |
|
(6,573) |
|
(9,667) |
|
(90,466) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
Proceeds from borrowings of debt |
|
202,349 |
|
165,314 |
|
206,025 |
Repayment of debt |
|
(234,063) |
|
(163,645) |
|
(127,439) |
Payment of cash dividends |
|
(6,111) |
|
(6,046) |
|
(5,836) |
Payment of acquisition-related contingent liabilities |
|
(1,966) |
|
(961) |
|
(2,861) |
Proceeds received on exercise of stock options |
|
1,927 |
|
283 |
|
727 |
Tax withholdings on exercise of stock rights |
|
(66) |
|
- |
|
(17) |
Tax (provision) benefit from vesting of acquisition-related
restricted stock |
|
(13) |
|
30 |
|
445 |
Common stock reacquired and retired |
|
(500) |
|
(1,685) |
|
(2,906) |
Net cash provided by (used in) financing activities |
|
(38,443) |
|
(6,710) |
|
68,138 |
|
|
|
|
|
|
|
Effect of currency exchange rates on cash |
|
(209) |
|
46 |
|
(304) |
Net increase (decrease) in cash and cash equivalents |
|
(3,866) |
|
3,676 |
|
(2,768) |
Cash and cash equivalents balance, beginning of period |
|
9,038 |
|
5,362 |
|
8,130 |
Cash and cash equivalents balance, end of period |
|
$ |
5,172 |
|
$ |
9,038 |
|
$ |
5,362 |
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
Income taxes paid |
|
$ |
13,390 |
|
$ |
7,146 |
|
$ |
1,088 |
Interest paid |
|
$ |
1,490 |
|
$ |
3,979 |
|
$ |
2,724 |
Superior Group of Compan... (NASDAQ:SGC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Superior Group of Compan... (NASDAQ:SGC)
Historical Stock Chart
From Apr 2023 to Apr 2024