false 0000095574 0000095574 2024-11-06 2024-11-06
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) November 6, 2024
 
Superior Group of Companies, Inc.
(Exact name of registrant as specified in its charter)
 
Florida
001-05869
11-1385670
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
     
 
200 Central Avenue, Suite 2000, St. Petersburg, Florida
(Address of principal executive offices)
33701
(Zip Code)
 
Registrant's telephone number including area code: (727) 397-9611
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
SGC
NASDAQ
 
 

 
Item 2.02    Results of Operations and Financial Condition
 
The following information is being furnished under Item 2.02 of Form 8-K: Press release by Superior Group of Companies, Inc. (the “Company”) announcing its results of operations for the quarter ended September 30, 2024. A copy of this press release is attached as Exhibit 99.1 to this Form 8-K.
 
Item 7.01  Regulation FD Disclosure
 
The following information is being furnished under Item 7.01 of Form 8-K: Investor presentation by the Company posted on the Company’s website.  A copy of this presentation is attached as Exhibit 99.2 to this Form 8-K.
 
Item 9.0l     Financial Statements and Exhibits
 
(d) Exhibits
 
  Exhibit Number   Description
  99.1   Press Release, dated November 6, 2024
  99.2   Investor Presentation, dated November 6, 2024
  104   Cover Page Interactive Data File (embedded within the Inline XBRL document)
                  
                           
Signature
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized.
 
SUPERIOR GROUP OF COMPANIES, INC.
By:
/s/ Michael Koempel
Michael Koempel
Chief Financial Officer
 
 
 
 
 
Date: November 6, 2024
 
 
 

Exhibit 99.1

logo01.jpg

FOR IMMEDIATE RELEASE

 

SUPERIOR GROUP OF COMPANIES REPORTS THIRD QUARTER 2024 RESULTS

 

– Total net sales of $149.7 million up from $136.1 million in prior year third quarter
– Net income of $5.4 million up from $3.1 million in prior year third quarter 
– EBITDA of $11.7 million up from $9.3 million in prior year third quarter
– Board of Directors approves $0.14 per share quarterly dividend 
– Reaffirms full-year outlook 

 

ST. PETERSBURG, Fla., November 6, 2024 – Superior Group of Companies, Inc. (NASDAQ: SGC) (the “Company”), today announced its third quarter 2024 results.

 

“We grew our sales and profit both sequentially from the prior quarter and year over year, representing our strongest quarterly results of 2024 despite only modest improvement in macro-related customer sentiment,” said Michael Benstock, Chief Executive Officer. “We also continue to drive solid operating cash flow as our entire team is focused on driving sales by leveraging our ongoing growth-oriented investments in people, products and technology, while striving to further optimize efficiencies and margins.  Today we are reaffirming our full-year outlook and are pleased to report that our Board has again approved a quarterly dividend.  Superior Group of Companies is as energized as ever by our multitude of opportunities to gain market share across the attractive end markets we serve in our quest to further enhance long-term shareholder value.”

 

Third Quarter Results

 

For the third quarter ended September 30, 2024, net sales increased 10.0% to $149.7 million compared to third quarter 2023 net sales of $136.1 million. Pretax income increased to $6.6 million compared to $3.3 million in the third quarter of 2023. Net income increased to $5.4 million or $0.33 per diluted share compared to $3.1 million or $0.19 per diluted share for the third quarter of 2023.

 

Fourth Quarter 2024 Dividend

 

The Board of Directors declared a quarterly dividend of $0.14 per share, payable November 27, 2024 to shareholders of record as of November 13, 2024.

 

2024 Full-Year Outlook

 

The Company is maintaining its full year 2024 sales outlook range of $563 million to $570 million, versus 2023 sales of $543 million, and maintaining its full-year earnings per diluted share forecast of $0.73 to $0.79 versus $0.54 in 2023.

 

1

 

Webcast and Conference Call

 

The Company will host a webcast and conference call at 5:00 pm Eastern Time today. The live webcast and archived replay can be accessed in the investor relations section of the Company's website at https://ir.superiorgroupofcompanies.com/Presentations. Interested individuals may also join the teleconference by dialing 1-844-861-5505 for U.S. dialers and 1-412-317-6586 for International dialers. The Canadian Toll-Free number is 1-866-605-3852. Please ask to be joined to the Superior Group of Companies call. A telephone replay of the teleconference will be available through November 20, 2024. To access the replay, dial 1-877-344-7529 in the United States or 1-412-317-0088 from international locations. Canadian dialers can access the replay at 855-669-9658. Please reference conference number 5346270 for replay access.

 

The Company’s website at https://ir.superiorgroupofcompanies.com/Presentations will also contain an updated investor presentation.

 

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) projections of revenue, income, and other items relating to our financial position and results of operations, including short term and long term plans for cash, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations and (4) 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; uncertainties related to supply disruptions, inflationary environment (including with respect to the cost of finished goods and raw materials and shipping costs), employment levels (including labor shortages), and general economic and political conditions in the areas of the world in which the Company operates or from which it sources its supplies or the areas of the United States of America (U.S. or United States) in which the Companys customers are located; changes in the healthcare, retail chain, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, discover liabilities associated with such businesses during the diligence process, successfully integrate any acquired businesses, or successfully manage our expanding operations; the price and availability of raw materials; attracting and retaining senior management and key personnel; the effect of the Companys previously disclosed material weakness in internal control over financial reporting; the Companys ability to successfully remediate its material weakness in internal control over financial reporting and to maintain effective internal control over financial reporting; and other factors described in the Companys 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, 2023 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. 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):

Established in 1920, Superior Group of Companies is comprised of three attractive business segments each serving large, fragmented and growing addressable markets. Across Healthcare Apparel, Branded Products and Contact Centers, each segment enables businesses to create extraordinary brand engagement experiences for their customers and employees. SGC’s commitment to service, quality, advanced technology, and omnichannel commerce provides unparalleled competitive advantages. We are committed to enhancing shareholder value by continuing to pursue a combination of organic growth and strategic acquisitions. For more information, visit www.superiorgroupofcompanies.com.

 

Investor Relations Contact:
Investors@Superiorgroupofcompanies.com

 

2

  

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except shares and per share data)

  

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2024

   

2023

   

2024

   

2023

 

Net sales

  $ 149,690     $ 136,126     $ 420,268     $ 396,061  
                                 

Costs and expenses:

                               

Cost of goods sold

    89,144       82,928       253,650       248,159  

Selling and administrative expenses

    52,215       47,246       149,339       134,007  

Other periodic pension costs

    189       214       567       642  

Interest expense

    1,569       2,464       4,897       7,658  
      143,117       132,852       408,453       390,466  

Income before income tax expense

    6,573       3,274       11,815       5,595  

Income tax expense

    1,170       160       1,900       380  

Net income

  $ 5,403     $ 3,114     $ 9,915     $ 5,215  
                                 

Net income per share:

                               

Basic

  $ 0.34     $ 0.19     $ 0.62     $ 0.33  

Diluted

  $ 0.33     $ 0.19     $ 0.60     $ 0.32  
                                 

Weighted average shares outstanding during the period:

                               

Basic

    16,107,549       15,992,792       16,118,885       15,954,264  

Diluted

    16,543,990       16,155,355       16,588,914       16,132,832  
                                 

Cash dividends per common share

  $ 0.14     $ 0.14     $ 0.42     $ 0.42  

 

3

 

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and par value data)

 

   

September 30,

   

December 31,

 
   

2024

   

2023

 
   

(Unaudited)

         

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 18,373     $ 19,896  

Accounts receivable, less allowance for doubtful accounts of $3,836 and $4,237, respectively

    98,822       103,494  

Inventories

    93,771       98,067  

Contract assets

    50,326       48,715  

Prepaid expenses and other current assets

    10,177       9,188  

Total current assets

    271,469       279,360  

Property, plant and equipment, net

    42,859       46,890  

Operating lease right-of-use assets

    16,282       17,909  

Deferred tax asset

    12,333       12,356  

Intangible assets, net

    47,959       51,160  

Other assets

    16,448       14,775  

Total assets

  $ 407,350     $ 422,450  
                 

LIABILITIES AND SHAREHOLDERS’ EQUITY

               

Current liabilities:

               

Accounts payable

  $ 46,292     $ 50,520  

Other current liabilities

    42,381       43,978  

Current portion of long-term debt

    5,625       4,688  

Current portion of acquisition-related contingent liabilities

    740       1,403  

Total current liabilities

    95,038       100,589  

Long-term debt

    78,755       88,789  

Long-term pension liability

    13,517       13,284  

Long-term acquisition-related contingent liabilities

    -       557  

Long-term operating lease liabilities

    11,295       12,809  

Other long-term liabilities

    9,236       8,784  

Total liabilities

    207,841       224,812  

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 16,331,962 and 16,564,712 shares, respectively

    16       16  

Additional paid-in capital

    81,859       77,443  

Retained earnings

    121,052       122,464  

Accumulated other comprehensive loss, net of tax:

               

Pensions

    (1,054 )     (1,122 )

Foreign currency translation adjustment

    (2,364 )     (1,163 )

Total shareholders’ equity

    199,509       197,638  

Total liabilities and shareholders’ equity

  $ 407,350     $ 422,450  

 

 

4

 

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

   

Nine Months Ended September 30,

 
   

2024

   

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

               

Net income

  $ 9,915     $ 5,215  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation and amortization

    9,872       10,331  

Inventory write-downs

    1,893       1,609  

Provision for bad debts - accounts receivable

    251       64  

Share-based compensation expense

    2,905       3,523  

Change in fair value of acquisition-related contingent liabilities

    363       (442 )

Change in fair value of written put options

    653       (460 )

Changes in assets and liabilities:

               

Accounts receivable

    3,891       9,650  

Contract assets

    (1,671 )     6,208  

Inventories

    2,241       18,280  

Prepaid expenses and other current assets

    (1,292 )     3,462  

Other assets

    (959 )     (844 )

Accounts payable and other current liabilities

    (4,292 )     2,148  

Payment of acquisition-related contingent liabilities

    (686 )     (279 )

Long-term pension liability

    325       561  

Other long-term liabilities

    1,088       362  

Net cash provided by operating activities

    24,497       59,388  
                 

CASH FLOWS FROM INVESTING ACTIVITIES

               

Additions to property, plant and equipment

    (2,911 )     (4,023 )

Net cash used in investing activities

    (2,911 )     (4,023 )
                 

CASH FLOWS FROM FINANCING ACTIVITIES

               

Proceeds from borrowings of debt

    31,000       4,000  

Repayment of debt

    (40,281 )     (51,813 )

Debt issuance costs

    -       (300 )

Payment of cash dividends

    (6,994 )     (6,886 )

Payment of acquisition-related contingent liabilities

    (897 )     (553 )

Proceeds received on exercise of stock options

    1,118       97  

Common shares repurchased and retired

    (6,346 )     -  

Net cash used in financing activities

    (22,400 )     (55,455 )
                 

Effect of currency exchange rates on cash

    (709 )     97  

Net increase (decrease) in cash and cash equivalents

    (1,523 )     7  

Cash and cash equivalents balance, beginning of period

    19,896       17,722  

Cash and cash equivalents balance, end of period

  $ 18,373     $ 17,729  

 

5

 

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In thousands, except shares and per share data)

 

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2024

   

2023

   

2024

   

2023

 

Net income

  $ 5,403     $ 3,114     $ 9,915     $ 5,215  

Interest expense

    1,569       2,464       4,897       7,658  

Income tax expense

    1,170       160       1,900       380  

Depreciation and amortization

    3,252       3,515       9,872       10,331  

Impairment Charge

    260       -       260       -  

EBITDA(1)

  $ 11,654     $ 9,253     $ 26,844     $ 23,584  

EBITDA margin(1)

    7.8 %     6.8 %     6.4 %     6.0 %

 

 

(1) EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, income tax expense and depreciation and amortization expense. EBITDA margin is defined as EBITDA divided by net sales. The Company believes EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences and (iii) asset base (depreciation and amortization). The Company uses EBITDA internally to monitor operating results and to evaluate the performance of its business. In addition, the compensation committee has used EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs. EBITDA is not a measure of financial performance under GAAP.  EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate EBITDA are significant components in understanding and assessing the Company’s results of operations. The presentation of the Company’s EBITDA may change from time to time, including as a result of changed business conditions, new accounting pronouncements or otherwise. If the presentation changes, the Company undertakes to disclose any change between periods and the reasons underlying that change. The Company’s EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner.

 

6

 

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION - REPORTABLE SEGMENTS

(Unaudited)

(In thousands)

 

   

Branded Products

   

Healthcare Apparel

   

Contact Centers

   

Intersegment Eliminations

   

Other

   

Total

 

For the Three Months Ended September 30, 2024:

                                               

Net sales

  $ 92,547     $ 33,025     $ 25,038     $ (920 )   $ -     $ 149,690  

Cost of goods sold

    59,037       19,216       11,296       (405 )     -       89,144  

Gross margin

    33,510       13,809       13,742       (515 )     -       60,546  

Selling and administrative expenses

    24,223       11,240       11,482       (515 )     5,785       52,215  

Other periodic pension cost

    -       -       -       -       189       189  

Add: Impairment charge

    -       260       -       -       -       260  

Add: Depreciation and amortization

    1,446       944       770       -       92       3,252  

Segment EBITDA(1)

  $ 10,733     $ 3,773     $ 3,030     $ -     $ (5,882 )   $ 11,654  
                                                 
   

Branded Products

   

Healthcare Apparel

   

Contact Centers

   

Intersegment Eliminations

   

Other

   

Total

 

For the Three Months Ended September 30, 2023:

                                               

Net sales

  $ 83,512     $ 29,649     $ 24,121     $ (1,156 )   $ -     $ 136,126  

Cost of goods sold

    54,588       18,165       10,724       (549 )     -       82,928  

Gross margin

    28,924       11,484       13,397       (607 )     -       53,198  

Selling and administrative expenses

    23,418       9,493       10,224       (607 )     4,718       47,246  

Other periodic pension cost

    -       -       -       -       214       214  

Add: Depreciation and amortization

    1,452       1,064       880       -       119       3,515  

Segment EBITDA(1)

  $ 6,958     $ 3,055     $ 4,053     $ -     $ (4,813 )   $ 9,253  
                                                 
    Branded Products     Healthcare Apparel     Contact Centers     Intersegment Eliminations     Other     Total  

For the Nine Months Ended September 30, 2024:

                                               

Net sales

  $ 260,911     $ 88,854     $ 73,422     $ (2,919 )   $ -     $ 420,268  

Cost of goods sold

    167,534       53,335       34,075       (1,294 )     -       253,650  

Gross margin

    93,377       35,519       39,347       (1,625 )     -       166,618  

Selling and administrative expenses

    70,486       30,931       32,436       (1,625 )     17,111       149,339  

Other periodic pension cost

    -       -       -       -       567       567  

Add: Impairment charge

    -       260       -       -       -       260  

Add: Depreciation and amortization

    4,513       2,837       2,246       -       276       9,872  

Segment EBITDA(1)

  $ 27,404     $ 7,685     $ 9,157     $ -     $ (17,402 )   $ 26,844  
                                                 
    Branded Products     Healthcare Apparel     Contact Centers     Intersegment Eliminations     Other     Total  

For the Nine Months Ended September 30, 2023:

                                               

Net sales

  $ 244,955     $ 85,875     $ 68,935     $ (3,704 )   $ -     $ 396,061  

Cost of goods sold

    164,492       53,872       31,545       (1,750 )     -       248,159  

Gross margin

    80,463       32,003       37,390       (1,954 )     -       147,902  

Selling and administrative expenses

    63,833       28,461       29,502       (1,954 )     14,165       134,007  

Other periodic pension cost

    -       -       -       -       642       642  

Add: Depreciation and amortization

    4,826       3,014       2,210       -       281       10,331  

Segment EBITDA(1)

  $ 21,456     $ 6,556     $ 10,098     $ -     $ (14,526 )   $ 23,584  

 

(1) Segment EBITDA is our primary measure of segment profitability under U.S. GAAP ASC 280 “Segment Reporting”. Amounts included in income before income tax expense and excluded from Segment EBITDA include: interest expense and depreciation and amortization expense. Total EBITDA is a non-GAAP financial measure. Please see reconciliation of Total EBITDA included in the Non-GAAP Financial Measures table above.

 

7

Exhibit 99.2

 

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v3.24.3
Document And Entity Information
Nov. 06, 2024
Document Information [Line Items]  
Entity, Registrant Name Superior Group of Companies, Inc.
Document, Type 8-K
Document, Period End Date Nov. 06, 2024
Entity, Incorporation, State or Country Code FL
Entity, File Number 001-05869
Entity, Tax Identification Number 11-1385670
Entity, Address, Address Line One 200 Central Avenue, Suite 2000
Entity, Address, City or Town St. Petersburg
Entity, Address, State or Province FL
Entity, Address, Postal Zip Code 33701
City Area Code 727
Local Phone Number 397-9611
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity, Emerging Growth Company false
Title of 12(b) Security Common Stock
Trading Symbol SGC
Security Exchange Name NASDAQ
Amendment Flag false
Entity, Central Index Key 0000095574

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