Superior Group of Companies, Inc. Reports Operating Results for the Third Quarter Ended September 30, 2020

  • Net sales increased 43 percent
  • Earnings per share (diluted) increased142 percent to $0.63
  • Debt reduced by $8.2 million

SEMINOLE, Fla., Oct. 29, 2020 (GLOBE NEWSWIRE) — Superior Group of Companies, Inc. (NASDAQ: SGC), today announced its third quarter operating results for 2020.

The Company reported that for the third quarter ended September 30, 2020, net sales increased 43 percent to $127.8 million, compared to third quarter 2019 net sales of $89.5 million. Pretax Income was $12.1 million compared to $4.6 million for the third quarter of 2019. Net income was $10.0 million, or $0.63 per diluted share, compared to $3.9 million, or $0.26 per diluted share, for the third quarter of 2019.

Michael Benstock, Chief Executive Officer, commented, “Our third quarter continued the robust momentum of the first half of the year. The dedication and relentlessness of our team members has again yielded positive results. Our pre-existing strategy of selling to a diverse range of customers 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 have strong 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 in the quarter from operating activities, we were able to further reduce our outstanding debt by an additional $8.2 million, resulting in more than a $42.5 million net debt repayment through the first three quarters of 2020. This additional reduction has bolstered our ability to capitalize on opportunities as they arise.

“While we do not generally provide guidance on individual quarters or years, we are confident that we will continue to see significant increases in our net sales and income in comparison with prior year periods for the balance of the year.”


Superior Group of Companies will hold a conference call on Thursday, October 29, 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

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 November 5, 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 10148875 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 and hospitality 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, 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 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 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 we serve. We 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. 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.

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Andrew D. Demott, Jr.    Hala Elsherbini   
COO, CFO & Treasurer  -OR-  Senior Managing Director
(727) 803-7135    Three Part Advisors
    (214) 442-0016

Comparative figures are as follows:

    Three Months Ended September 30,
      2020       2019  
Net sales   $ 127,737     $ 89,466  
Costs and expenses:        
Cost of goods sold     80,285       58,015  
Selling and administrative expenses     34,917       25,260  
Other periodic pension costs     212       476  
Interest expense     239       1,085  
      115,653       84,836  
Income before taxes on income     12,084       4,630  
Income tax expense     2,140       709  
Net income   $ 9,944     $ 3,921  
Net income per share:        
Basic   $ 0.66     $ 0.26  
Diluted   $ 0.63     $ 0.26  
Weighted average shares outstanding during the period:        
Basic     15,084,300       14,947,552  
Diluted     15,711,122       15,266,850  
Cash dividends per common share   $ 0.20     $ 0.10  


(In thousands, except shares and per share data)
    Nine Months Ended September 30,
      2020       2019  
Net sales   $ 381,341     $ 268,288  
Costs and expenses:        
Cost of goods sold     244,500       174,226  
Selling and administrative expenses     98,704       78,008  
Other periodic pension costs     830       1,282  
Interest expense     1,732       3,514  
      345,766       257,030  
Income before taxes on income     35,575       11,258  
Income tax expense     7,090       2,180  
Net income   $ 28,485     $ 9,078  
Net income per share:        
Basic   $ 1.89     $ 0.61  
Diluted   $ 1.85     $ 0.59  
Weighted average shares outstanding during the period        
Basic     15,041,738       14,942,565  
Diluted     15,361,035       15,272,287  
Cash dividends per common share   $ 0.30     $ 0.30  


(In thousands, except share and par value data)
    September 30,   December 31,
      2020       2019  
Current assets:        
Cash and cash equivalents   $ 5,651     $ 9,038  
Accounts receivable, less allowance for doubtful accounts of $7,922 and $2,964, respectively     85,297       79,746  
Accounts receivable – other     2,204       1,083  
Inventories     80,221       73,379  
Contract assets     35,484       38,533  
Prepaid expenses and other current assets     13,094       9,934  
Total current assets     221,951       211,713  
Property, plant and equipment, net     35,421       32,825  
Operating lease right-of-use assets     4,143       5,445  
Intangible assets, net     59,696       62,536  
Goodwill     36,055       36,292  
Other assets     9,972       10,122  
Total assets   $ 367,238     $ 358,933  
Current liabilities:        
Accounts payable   $ 30,512     $ 33,271  
Other current liabilities     49,890       18,894  
Current portion of long-term debt     15,286       15,286  
Current portion of acquisition-related contingent liabilities     4,307       1,905  
Total current liabilities     99,995       69,356  
Long-term debt     61,511       104,003  
Long-term pension liability     9,771       10,253  
Long-term acquisition-related contingent liabilities     1,815       3,423  
Long-term operating lease liabilities     1,724       2,380  
Deferred tax liability     3,260       7,042  
Other long-term liabilities     5,581       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 15,340,949 and 15,227,604 shares, respectively.     15       15  
Additional paid-in capital     60,618       57,442  
Retained earnings     130,968       107,581  
Accumulated other comprehensive income (loss), net of tax:        
Pensions     (6,198 )     (7,224 )
Cash flow hedges     75       91  
Foreign currency translation adjustment     (1,897 )     (351 )
Total shareholders’ equity     183,581       157,554  
Total liabilities and shareholders’ equity   $ 367,238     $ 358,933  


(In thousands)
    Nine Months Ended September 30,
      2020       2019  
Net income   $ 28,485     $ 9,078  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     5,972       6,339  
Provision for bad debts – accounts receivable     6,099       719  
Share-based compensation expense     1,790       997  
Deferred income tax benefit     (3,654 )     (2,136 )
Gain on sale of property, plant and equipment           (5 )
Change in fair value of acquisition-related contingent liabilities     2,759       (272 )
Changes in assets and liabilities:        
Accounts receivable – trade     (12,225 )     (12,251 )
Accounts receivable – other     (1,121 )     481  
Contract assets     3,049       11,206  
Inventories     (7,306 )     (595 )
Prepaid expenses and other current assets     (3,592 )     (7,051 )
Other assets     1       (2,233 )
Accounts payable and other current liabilities     29,167       5,523  
Long-term pension liability     864       1,292  
Other long-term liabilities     779       750  
Net cash provided by operating activities     51,067       11,842  
Additions to property, plant and equipment     (5,711 )     (6,424 )
Proceeds from disposals of property, plant and equipment           5  
Net cash used in investing activities     (5,711 )     (6,419 )
Proceeds from borrowings of debt     137,559       125,121  
Repayment of debt     (180,112 )     (123,600 )
Payment of cash dividends     (4,574 )     (4,533 )
Payment of acquisition-related contingent liability     (1,966 )     (961 )
Proceeds received on exercise of stock options     1,407       283  
Tax withholding on exercise of stock rights     (32 )      
Tax (provision) benefit from vesting of acquisition-related restricted stock     (13 )     30  
Common stock reacquired and retired     (500 )     (1,243 )
Net cash used in financing activities     (48,231 )     (4,903 )
Effect of currency exchange rates on cash     (512 )     (430 )
Net increase (decrease) in cash and cash equivalents     (3,387 )     90  
Cash and cash equivalents balance, beginning of period     9,038       5,362  
Cash and cash equivalents balance, end of period   $ 5,651     $ 5,452  

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