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Superior Uniform Group, Inc. Reports Second Quarter Operating Results

  • Net Sales Increase 19.5 Percent
  • BAMKO Reports Net Sales of $9.8 million, an Increase of 88.7 Percent Over Prior Year Second Quarter

SEMINOLE, Fla., July 21, 2016 (GLOBE NEWSWIRE) -- Superior Uniform Group, Inc. (NASDAQ:SGC), manufacturer of uniforms, career apparel, accessories and promotional products, today announced that for the second quarter ended June 30, 2016, net sales increased 19.5 percent to $64.7 million compared with 2015 second quarter net sales of $54.1 million. Net income for second quarter 2016 was $3.1 million, or $0.21 per diluted share, compared with $3.6 million, or $0.25 per diluted share, reported for the quarter ended June 30, 2015.

For the six months ended June 30, 2016, net sales increased 22.1 percent to $122.6 million compared with net sales of $100.5 million for the six months ended June 30, 2015. Net income for the six months ended June 30, 2016 was $5.3 million, or $0.36 per diluted share, compared with $5.7 million, or $0.39 per diluted share reported for the six months ended June 30, 2015. As a result of the BAMKO acquisition, net income was negatively impacted by $0.2 million in pre-tax acquisition related expenses in the second quarter of 2016 and $1.1 million in the first six months of 2016.

Michael Benstock, Chief Executive Officer, commented, “We are pleased to report a 19.5 percent increase in net sales in the second quarter. The increase in net sales for the second quarter came from net sales at BAMKO, which we acquired in March of this year, and from The Office Gurus, our remote staffing segment. Net sales in our uniforms segment leveled off in the second quarter following an exceptionally strong first quarter of 2016. Additionally, BAMKO has come out of the gate very strong, generating net sales of $9.8 million in the 2016 second quarter. This represents an increase of more than 88 percent versus the same period in 2015. We are very pleased with BAMKO and continue to work to achieve operational and sales synergies between the two organizations. The Office Gurus continues to grow at a very healthy rate with net sales to outside customers up 25.8 percent over the second quarter of 2015. At the end of the second quarter, we completed the building project in El Salvador and moved into a brand new, state-of-the-art, call center facility that nearly triples our capacity there. In addition to the acquisition of BAMKO and the new building in El Salvador, we continue to invest in our uniform business. Our new sewing factory in Haiti is progressing nicely and on schedule with our implementation plan. We expect it to achieve breakeven status by the end of 2016.

“Our financial position remains strong, and we were able to pay down outstanding debt by $4.7 million in the second quarter of 2016. This financial strength positions us well to continue to invest in our businesses and to take advantage of opportunities as they arise.”

CONFERENCE CALL

Superior Uniform Group will hold a conference call on Thursday, July 21, 2016 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 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 July 28, 2016. 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 10088860 for all replay access.

About Superior Uniform Group, Inc.

Superior Uniform Group® (NASDAQ:SGC), established in 1920, is one of America’s foremost providers of fine uniforms and image apparel. Headquartered in Seminole, Fla., Superior Uniform Group manages award-winning uniform apparel programs for major corporations nationwide. Leaders in innovative uniform program design, global manufacturing, and state-of-the-art distribution, Superior Uniform Group helps companies achieve a more professional appearance and better communicate their brands – particularly those in healthcare, private security, retail, hospitality, transportation and food service industries.

The company’s commitment to service, technology, quality and value-added benefits, as well as its financial strength and resources, support customers’ diverse needs while embracing a “Customer 1st, Every Time!” philosophy and culture. Superior Uniform Group sells its wide range of products through its signature brands Superior I.D., Fashion Seal Healthcare® and HPI Direct®. Superior Uniform Group is also the parent company for The Office Gurus®, which provides call center and BPO solutions to a variety of customers, and BAMKO®, its innovative promotional products company that provides custom branding solutions to some of the nation’s strongest brands.

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

Statements contained in this press release which are not historical facts 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.

Comparative figures are as follows:

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended June 30,
(Unaudited)
2016 2015
Net sales $64,660,000 $54,116,000
Costs and expenses:
Cost of goods sold 42,897,000 35,585,000
Selling and administrative expenses 16,956,000 13,008,000
Interest expense 192,000 129,000
60,045,000 48,722,000
Income before taxes on income 4,615,000 5,394,000
Income tax expense 1,540,000 1,770,000
Net income $3,075,000 $3,624,000
Weighted average number of shares outstanding during the period
(Basic) 14,120,617 13,730,646
(Diluted) 14,957,469 14,577,342
Per Share Data:
Basic
Net income $ 0.22 $ 0.26
Diluted
Net income $ 0.21 $ 0.25
Other comprehensive income, net of tax:
Defined benefit pension plans:
Recognition of net losses included in
net periodic pension costs 171,000 129,000
Recognition of settlement loss included
in net periodic pension costs 33,000 201,000
Gain on cash flow hedging activities 21,000 21,000
Foreign currency translation adjustment 173,000 -
Other comprehensive income 398,000 351,000
Comprehensive income $ 3,473,000 $ 3,975,000
Cash dividends per common share $ 0.0825 $ 0.075

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six Months Ended June 30,
(Continued)
(Unaudited)
2016 2015
Net sales $122,628,000 $ 100,463,000
Costs and expenses:
Cost of goods sold 80,844,000 66,136,000
Selling and administrative expenses 33,419,000 25,445,000
Interest expense 340,000 265,000
114,603,000 91,846,000
Income before taxes on income 8,025,000 8,617,000
Income tax expense 2,690,000 2,950,000
Net income $5,335,000 $ 5,667,000
Weighted average number of shares outstanding during the period
(Basic) 14,023,840 13,657,784
(Diluted) 14,813,064 14,562,713
Per Share Data:
Basic
Net income $ 0.38 $ 0.41
Diluted
Net income $ 0.36 $ 0.39
Other comprehensive income, net of tax:
Defined benefit pension plans:
Recognition of net losses included in
net periodic pension costs 342,000 257,000
Recognition of settlement loss included
in net periodic pension costs 198,000 201,000
Gain (loss) on cash flow hedging activities 6,000 (1,000)
Foreign currency translation adjustment 294,000 -
Other comprehensive income 840,000 457,000
Comprehensive income $ 6,175,000 $ 6,124,000
Cash dividends per common share $0.165 $ 0.15

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30,
2016 December 31,
(Unaudited) 2015
CURRENT ASSETS:
Cash and cash equivalents $ 4,735,000 $ 1,036,000
Accounts receivable, less allowance for doubtful accounts
of $1,100,000 and $848,000, respectively 37,091,000 29,914,000
Accounts receivable - other 2,137,000 3,262,000
Prepaid expenses and other current assets 11,150,000 6,214,000
Inventories* 63,161,000 63,573,000
TOTAL CURRENT ASSETS 118,274,000 103,999,000
PROPERTY, PLANT AND EQUIPMENT, NET 27,090,000 22,524,000
OTHER INTANGIBLE ASSETS, NET 24,428,000 14,222,000
GOODWILL 11,481,000 4,135,000
DEFERRED INCOME TAXES 4,760,000 4,980,000
OTHER ASSETS 2,392,000 1,871,000
$ 188,425,000 $ 151,731,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 15,397,000 $ 11,775,000
Other current liabilities 7,883,000 8,307,000
Current portion of long-term debt 6,429,000 2,750,000
Current portion of acquisition-related contigent liabilities 1,969,000 1,787,000
TOTAL CURRENT LIABILITIES 31,678,000 24,619,000
LONG-TERM DEBT, net of issuance costs 36,898,000 21,131,000
LONG-TERM PENSION LIABILITY 8,347,000 8,925,000
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES 7,361,000 3,866,000
OTHER LONG-TERM LIABILITIES 540,000 500,000
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 - 14,407,920 and 13,917,465, respectively. 14,000 14,000
Additional paid-in capital 40,982,000 33,806,000
Retained earnings 68,287,000 65,392,000
Accumulated other comprehensive income (loss), net of tax:
Pensions (5,908,000) (6,448,000)
Cash flow hedges (68,000) (74,000)
Foreign currency translation adjustment 294,000 -
TOTAL SHAREHOLDERS' EQUITY 103,601,000 92,690,000
$ 188,425,000 $ 151,731,000
* Inventories consist of the following:
June 30,
2016 December 31,
(Unaudited) 2015
Finished goods $ 49,649,000 $ 48,206,000
Work in process 955,000 860,000
Raw materials 12,557,000 14,507,000
$ 63,161,000 $ 63,573,000

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
(Unaudited)
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5,335,000 $ 5,667,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 2,333,000 1,890,000
Provision for bad debts - accounts receivable 180,000 211,000
Share-based compensation expense 983,000 964,000
Deferred income tax provision (benefit) (69,000) (881,000)
Loss on sales of property, plant and equipment - 12,000
Accretion of acquisition-related contingent liability 81,000 65,000
Changes in assets and liabilities, net of acquisition of business:
Accounts receivable - trade (2,181,000) (2,079,000)
Accounts receivable - other 1,125,000 892,000
Inventories 653,000 (2,493,000)
Prepaid expenses and other current assets (1,648,000) (1,419,000)
Other assets (353,000) (41,000)
Accounts payable 2,238,000 4,386,000
Other current liabilities (1,350,000) (2,233,000)
Long-term pension liability 259,000 567,000
Other long-term liabilities 40,000 40,000
Net cash provided by operating activities 7,626,000 5,548,000
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (5,527,000) (2,099,000)
Acquisition of business, net of acquired cash (15,252,000) -
Net cash used in investing activities (20,779,000) (2,099,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 90,514,000 25,040,000
Repayment of long-term debt (71,138,000) (26,638,000)
Payment of cash dividends (2,270,000) (2,006,000)
Payment of contingent liability (1,800,000) -
Proceeds received on exercise of stock options 781,000 1,383,000
Excess tax benefit from exercise of stock options and SARS 683,000 588,000
Net cash provided by (used in) financing activities 16,770,000 (1,633,000)
Effect of currency exchange rates on cash 82,000 -
Net increase in cash and cash equivalents 3,699,000 1,816,000
Cash and cash equivalents balance, beginning of year 1,036,000 4,586,000
Cash and cash equivalents balance, end of period $ 4,735,000 $ 6,402,000


Contact: Andrew D. Demott, Jr. COO, CFO & Treasurer (727) 803-7135 OR Hala Elsherbini, Halliburton Investor Relations (972) 458-8000

Source:Superior Uniform Group, Inc.