Superior group of companies, inc. Reports operating results for the first quarter ended march 31, 2020
- Net Sales increased 8.9 percent
- Earnings per Share (Diluted) increased 37.5%
SEMINOLE, Fla. – April 30, 2020 – Superior Group of Companies, Inc. (NASDAQ: SGC), today announced its first quarter operating results for 2020.
The Company announced that for the first quarter ended March 31, 2020, net sales increased 8.9 percent to $94.2 million, compared to first quarter 2019 net sales of $86.6 million. Pretax Income was $4.6 million compared to $3.0 million in 2019. Net income was $3.4 million or $0.22 per diluted share compared to $2.4 million or $0.16 per diluted share for the first quarter of 2019.
Michael Benstock, Chief Executive Officer, commented, “Under normal circumstances, this earnings release would talk about how pleased we are to report the strong operating results that we had in the first quarter with sales up nicely at 8.9% and earnings per share up 37.5% as we continue to execute against our long-term growth strategies. However, these are not normal times. While the COVID-19 pandemic only had a moderate impact on our operating results the last few weeks of the first quarter, it is expected to have a much more significant impact as we move forward. On the positive side, our healthcare uniform business is experiencing a tremendous surge in demand to support the increased requirements to outfit an ever-increasing number of healthcare workers on the front lines of the battle against the Coronavirus. Additionally, demand remains strong in the portion of our HPI business that supports businesses designated as essential such as grocery, big box retailers and pharmacy customers. These increases in demand are being offset by significant slowing in the dining, entertainment, lodging and transportation markets.
“In our promotional products segment, marketing budget reductions and event cancellations have impacted the entire branded merchandise industry, which is significantly event driven. A prolonged moratorium on events and a reduction of in-store promotions will negatively impact our operating results in this segment as we move forward. However, our BAMKO team, utilizing our strong sourcing network and resources has been instrumental in sourcing much needed personal protective equipment (PPE) that many customers have been asking for, filling a critical need during this crisis and helping to offset a significant amount of the negative impact in revenues. Many of these products are new revenue sources for BAMKO and other SGC divisions.
“Our BPO segment, The Office Gurus, experienced a slight disruption in business at the very end of the first quarter as they had to adjust quickly to the government action in El Salvador closing all call center facilities. They were able to pivot very quickly and successfully to a work from home model and continue to service their customers very well. To help offset the possibility of future deterioration in sales associated with the pandemic, we are actively pursuing several new opportunities from prospective clients that need support due to either their call center partner’s inability to deploy a work from home solution or their inability to continue to employ their own internal support.
We believe that once demand normalizes for our current clients’ needs, we will have the opportunity to explore more growth in our nearshore centers. We will also be prepared to capitalize on the new knowledge that we have acquired through this crisis and several new opportunities, such as the ability to increase our capacity substantially by continuing to work from home for certain accounts and offering this solution to future prospects. We also anticipate that some smaller nearby centers will be unable to weather the storm, making their clients and agents available to us, which will reduce our customer acquisition costs and recruiting expense.
“We are focused on maintaining liquidity during this time. We have demonstrated many times in the past that our balance sheet typically becomes more liquid in an economic downturn. We have made appropriate and significant reductions in operating expenses, and will also reduce certain capital expenditures to preserve capital. We are confident that we have access to adequate liquidity to meet our needs at this time. While the magnitude of this pandemic is larger than the many catastrophes and economic downturns that we have faced in the past century, we have a well-seasoned management team that has a long track record of weathering the storm and coming out of the back end even stronger than when it began.
“Our primary concern is for the safety of our workforce and customers. We are proud of our leadership and associates who have worked tirelessly at home, in factories, distribution facilities and our offices around the world to support the multitude of essential businesses that rely on us. We send our hopes and best wishes for good health to all of those who are working to ensure the well-being of our nation and the world. Those on the front line of this battle are heroes to all of us and deserve our respect, prayers, support and praise during this difficult time.”
Superior Group of Companies will hold a conference call on Thursday, April 30, 2020 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 2:00 p.m. Eastern Time on May 14, 2020. 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 10141209 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) 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 find a suitable vaccine, 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, commercial, leisure and public safety 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 business 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 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 customers unlock the power of their brands by creating extraordinary brand experiences for employees and customers. It provides customized support for each of its divisions through its shared services model.
Fashion Seal Healthcare®, HPI™ and CID Resources are signature uniform brands of Superior Group of Companies. Each is one of America’s leading providers of uniforms and image apparel in the markets it serves. They specialize in innovative uniform program design, global manufacturing, and state-of-the-art distribution. Every workday, more than 6 million Americans go to work wearing a uniform from Superior Group of Companies.
BAMKO®, Tangerine Promotions® and Public Identity® are signature promotional products and branded merchandise brands of Superior Group of Companies. They provide unique custom branding, design, sourcing, and marketing solutions to some of the world’s most successful brands.
TheOfficeGurus® 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.
SGC’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.
Visit www.superiorgroupofcompanies.com for more information.
Andrew D. Demott, Jr.
COO, CFO & Treasurer
Halliburton Investor Relations