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Superior Uniform Group, Inc. Reports Second Quarter Operating Results

  • Net Income up 31.2% on 1.5% Increase in Net Sales
  • 19th Consecutive Quarter with Sales Increase

SEMINOLE, Fla., July 27, 2017 (GLOBE NEWSWIRE) -- Superior Uniform Group, Inc. (NASDAQ:SGC), manufacturer of uniforms, career apparel and accessories, today announced that for the second quarter ended June 30, 2017, net sales increased 1.5 percent to $65.6 million compared with 2016 second quarter net sales of $64.7 million. Net income for the 2017 second quarter was $4.3 million, or $0.29 per diluted share, compared with $3.3 million, or $0.22 per diluted share, reported for the quarter ended June 30, 2016.

Michael Benstock, Chief Executive Officer, commented, “We are very pleased to report a 31.2 percent increase in net income despite net sales only increasing 1.5 percent. Net sales in our Uniforms and Related Products segment increased 1.7 percent in the second quarter as customer purchases continue to be somewhat stalled, awaiting more clarity in the political arena. We are seeing increases in our sales activity with larger volumes of opportunities although they are moving through the pipeline at a slower pace. The Office Gurus, our Remote Staffing Solutions segment, delivered an excellent second quarter reporting a 28.8 percent increase in net sales. We are seeing a significant increase in activity in this segment as we continue to broaden our footprint in this underserved market niche. BAMKO, our Promotional Products segment, reported a decrease in net sales of 10.0 percent. As we have stated in the past, BAMKO’s sales will fluctuate more widely on a quarter to quarter basis, given the nature of their sales cycle, in contrast with our other segments. We are very confident in the BAMKO team, and we expect sales performance to return to strong double-digit growth in the third quarter. We are actively pursuing acquisition opportunities in promotional products and are working through a solid pipeline of candidates.”

CONFERENCE CALL

Superior Uniform Group will hold a conference call on Thursday, July 27, 2017 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 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 August 3, 2017. 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 10110251 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)
2017 2016
Net sales $65,604,000 $64,660,000
Costs and expenses:
Cost of goods sold 42,230,000 42,897,000
Selling and administrative expenses 17,478,000 16,956,000
Interest expense 195,000 192,000
59,903,000 60,045,000
Income before taxes on income 5,701,000 4,615,000
Income tax expense 1,360,000 1,307,000
Net income $4,341,000 $3,308,000
Weighted average number of shares outstanding during the period
(Basic) 14,501,399 14,120,617
(Diluted) 15,040,431 14,957,469
Per Share Data:
Basic
Net income $ 0.30 $ 0.23
Diluted
Net income $ 0.29 $ 0.22
Cash dividends per common share $ 0.0875 $ 0.0825

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
SIX MONTHS ENDED JUNE 30,
(Unaudited)
2017 2016
Net sales $126,591,000 $122,628,000
Costs and expenses:
Cost of goods sold 81,003,000 80,844,000
Selling and administrative expenses 35,121,000 33,419,000
Interest expense 379,000 340,000
116,503,000 114,603,000
Gain on sale of property, plant and equipment 1,018,000 -
Income before taxes on income 11,106,000 8,025,000
Income tax expense 2,930,000 2,275,000
Net income $8,176,000 $5,750,000
Weighted average number of shares outstanding during the period
(Basic) 14,426,060 14,023,840
(Diluted) 14,985,063 14,813,064
Per Share Data:
Basic
Net income $ 0.57 $ 0.41
Diluted
Net income $ 0.55 $ 0.39
Cash dividends per common share $0.175 $0.165

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30,
2017 December 31,
(Unaudited) 2016
CURRENT ASSETS:
Cash and cash equivalents $7,583,000 $3,649,000
Accounts receivable, less allowance for doubtful accounts
of $1,755,000 and $1,276,000, respectively 40,620,000 41,823,000
Accounts receivable - other 2,412,000 3,085,000
Inventories* 67,596,000 69,240,000
Prepaid expenses and other current assets 8,567,000 7,214,000
TOTAL CURRENT ASSETS 126,778,000 125,011,000
PROPERTY, PLANT AND EQUIPMENT, NET 26,173,000 27,533,000
OTHER INTANGIBLE ASSETS, NET 22,097,000 23,238,000
GOODWILL 11,265,000 11,269,000
DEFERRED INCOME TAXES 7,090,000 6,800,000
OTHER ASSETS 4,780,000 2,997,000
$198,183,000 $196,848,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $13,988,000 $13,507,000
Other current liabilities 8,247,000 10,716,000
Current portion of long-term debt 6,000,000 5,893,000
Current portion of acquisition-related contigent liabilities 3,135,000 1,788,000
TOTAL CURRENT LIABILITIES 31,370,000 31,904,000
LONG-TERM DEBT 34,454,000 36,227,000
LONG-TERM PENSION LIABILITY 7,780,000 9,467,000
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITY 4,173,000 7,238,000
OTHER LONG-TERM LIABILITIES 2,292,000 1,462,000
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 - 14,768,272 and 14,513,207, respectively. 15,000 15,000
Additional paid-in capital 44,701,000 42,416,000
Retained earnings 79,239,000 74,283,000
Accumulated other comprehensive income (loss), net of tax:
Pensions (5,762,000) (6,258,000)
Cash flow hedges (159,000) 21,000
Foreign currency translation adjustment 80,000 73,000
TOTAL SHAREHOLDERS' EQUITY 118,114,000 110,550,000
$198,183,000 $196,848,000

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30,
(Unaudited)
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $8,176,000 $5,750,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 2,715,000 2,333,000
Provision for bad debts - accounts receivable 575,000 180,000
Share-based compensation expense 1,108,000 1,097,000
Deferred income tax benefit (509,000) (69,000)
Gain on sale of property, plant and equipment (1,018,000) -
Accretion of acquisition-related contingent liability 81,000 81,000
Changes in assets and liabilities, net of acquisition of business:
Accounts receivable - trade 552,000 (2,181,000)
Accounts receivable - other 674,000 1,125,000
Inventories 1,632,000 653,000
Prepaid expenses and other current assets (1,353,000) (1,648,000)
Other assets (1,784,000) (353,000)
Accounts payable 585,000 2,238,000
Other current liabilities (2,808,000) (1,464,000)
Long-term pension liability (894,000) 259,000
Other long-term liabilities 829,000 40,000
Net cash provided by operating activities 8,561,000 8,041,000
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (2,004,000) (5,527,000)
Proceeds from disposals of property, plant and equipment 2,810,000 -
Purchase of business net of acquired cash - (15,252,000)
Net cash provided by (used in) investing activities 806,000 (20,779,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 72,422,000 90,514,000
Repayment of long-term debt (74,088,000) (71,138,000)
Payment of cash dividends (2,490,000) (2,270,000)
Payment of contingent liability (1,800,000) (1,800,000)
Proceeds received on exercise of stock options 798,000 781,000
Tax benefit from vesting of acquisition related restricted stock 70,000 535,000
Tax withholding on exercise of stock rights (421,000) (267,000)
Net cash (used in) provided by financing activities (5,509,000) 16,355,000
Effect of currency exchange rates on cash 76,000 82,000
Net increase in cash and cash equivalents 3,934,000 3,699,000
Cash and cash equivalents balance, beginning of year 3,649,000 1,036,000
Cash and cash equivalents balance, end of period $7,583,000 $4,735,000


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.