FOR IMMEDIATE RELEASE

SUPERIOR GROUP OF COMPANIES REPORTS SECOND QUARTER 2023 RESULTS

- Total Net Sales of $129.2 Million versus $147.9 million in Prior Year Second Quarter -

  • Net Income of $1.2 Million versus ($26.7) Million in Prior Year Second Quarter, which included non-cashafter-tax charges of

    • $28 million -
    • Adjusted EBITDA of $7.4 Million versus $4.8 Million in Prior Year Second Quarter -
      • Board of Directors Approves Another $0.14 Per Share Quarterly Dividend -
        • Provides Updated Full-Year Guidance -

ST. PETERSBURG, Fla., August 7, 2023 - Superior Group of Companies, Inc. (NASDAQ: SGC) (the "Company"), today announced its second quarter 2023 results.

Second Quarter Results

For the second quarter ended June 30, 2023, net sales decreased 12.7% to $129.2 million, compared to second quarter 2022 net sales of $147.9 million. Pretax income was $1.4 million compared to a pretax loss of ($29.0) million in the second quarter of 2022. Net income was $1.2 million or $0.08 per diluted share compared to a net loss of ($26.7) million, or ($1.70) per diluted share for the second quarter of 2022.

In the prior year second quarter of 2022, the Company recognized pre-tax,non-cash impairment charges related to goodwill of $24.5 million ($23.6 million net of tax, or $1.50 per diluted share) and tradenames of $5.6 million ($4.4 million net of tax, or $0.28 per diluted share). On an adjusted basis, which excludes impairment charges made in the prior year second quarter, this quarter's net inco me of $1.2 million or $0.08 per diluted share compares to $1.3 million or $0.08 per diluted share in the second quarter of 2022. At the conclusion of this press release is a reconciliation of reported-to-adjusted results, including a description of the significant items.

"During these uncertain economic times, we delivered on our commitment to drive positive free cash flow, reduce debt and improve our leverage position, all while strategically investing to capture market share in the quarters ahead," said Michael Benstock, Chief Executive Officer. "As we indicated in May, we remain poised to generate even stronger results in the second half of the year, and the steps we're taking now will clearly benefit our growth and profitability once macro conditions and economic visibility normalize. I'm pleased that our Board has again approved our quarterly dividend, reflecting our shared confidence in the compelling opportunities ahead to further penetrate all three of the large and growing end markets we serve, which will ultimately benefit our efforts to further enhance long-term shareholder value."

Third Quarter 2023 Dividend

The Board of Directors declared a quarterly dividend of $0.14 per share, payable September 8, 2023 to shareholders of record as of August 25, 2023.

2023 Full-Year Outlook

For full-year 2023, the Company is updating its Outlook to include a sales forecast of $550 million to $560 million compared to $579 million in 2022, and an earnings per share forecast of $0.45 to $0.55 compared to $0.62 of adjusted earnings per share in 2022.

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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 August 21, 2023. 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 4869445 for replay access.

Disclosure Regarding Forward Looking Statements:

Certain matters discussed in this Form 10-Q 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 Quarterly Report on Form 10-Q 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, (4) statements of expected industry and general economic trends and (5) the projected impact of the COVID- 19 pandemic on our, our customers', and our suppliers' businesses.

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 Company's customers are located; changes in the healthcare, retail, hotel, 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 cotton and other manufacturing materials; attracting and retaining senior management and key personnel; the effect of the Company's material weakness in internal control over financial reporting; the Company's ability to successfully remediate its material weakness in internal control over financial reporting and to maintain effective internal control over financial reporting; lingering effects of the COVID-19 pandemic, including existing and possible future variants, on the United States and global markets, our business, operations, customers, suppliers and employees, including the length and scope of restrictions imposed by various governments and organizations and the continuing success of efforts to deliver effective vaccines and boosters, among other factors; and other factors described in the Company's filings with the Securities and Exchange Commission, including those described in the "Risk Factors" section herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. 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

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Comparative figures are as follows:

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except share and per share data)

Three Months Ended June 30,

2023

2022

Net sales

$

129,162

$

147,933

Costs and expenses:

Cost of goods sold

81,566

99,800

Selling and administrative expenses

43,382

45,969

Goodwill impairment charge

-

24,458

Intangible assets impairment charge

-

5,581

Other periodic pension costs

214

528

Interest expense

2,624

583

127,786

176,919

Income (loss) before income tax expense

1,376

(28,986)

Income tax expense (benefit)

163

(2,311)

Net income (loss)

$

1,213

$

(26,675)

Net income (loss) per share:

Basic

$

0.08

$

(1.70)

Diluted

$

0.08

$

(1.70)

Weighted average shares outstanding during the period:

Basic

15,987,007

15,732,264

Diluted

16,124,816

15,732,264

Cash dividends per common share

$

0.14

$

0.14

3

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except share and per share data)

Six Months Ended June 30,

2023

2022

Net sales

$

259,935

$

291,515

Costs and expenses:

Cost of goods sold

165,231

193,601

Selling and administrative expenses

86,761

88,183

Goodwill impairment charge

-

24,458

Intangible assets impairment charge

-

5,581

Other periodic pension costs

428

1,056

Interest expense

5,194

882

257,614

313,761

Income (loss) before income tax expense

2,321

(22,246)

Income tax expense (benefit)

220

(801)

Net income (loss)

$

2,101

$

(21,445)

Net income (loss) per share:

Basic

$

0.13

$

(1.37)

Diluted

$

0.13

$

(1.37)

Weighted average shares outstanding during the period:

Basic

15,935,001

15,705,646

Diluted

16,121,573

15,705,646

Cash dividends per common share

$

0.28

$

0.26

4

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value data)

June 30,

December 31,

2023

2022

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

18,749

$

17,722

Accounts receivable, less allowance for doubtful accounts of $4,803 and $7,622,

respectively

96,732

104,813

Accounts receivable - other

294

3,326

Inventories

114,419

124,976

Contract assets

47,614

52,980

Prepaid expenses and other current assets

14,645

14,166

Total current assets

292,453

317,983

Property, plant and equipment, net

50,849

51,392

Operating lease right-of-use assets

14,775

9,113

Deferred tax asset

10,691

10,718

Intangible assets, net

53,148

55,753

Other assets

13,364

11,982

Total assets

$

435,280

$

456,941

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

47,879

$

42,060

Other current liabilities

34,181

38,646

Current portion of long-term debt

3,750

3,750

Current portion of acquisition-related contingent liabilities

1,375

736

Total current liabilities

87,185

85,192

Long-term debt

122,479

151,567

Long-term pension liability

13,135

12,864

Long-termacquisition-related contingent liabilities

873

2,245

Long-term operating lease liabilities

9,678

3,936

Other long-term liabilities

8,691

8,538

Total liabilities

242,041

264,342

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

16,499,312 and 16,376,683 shares, respectively

16

16

Additional paid-in capital

75,078

72,615

Retained earnings

120,490

122,979

Accumulated other comprehensive loss, net of tax:

Pensions

(1,032)

(1,113)

Foreign currency translation adjustment

(1,313)

(1,898)

Total shareholders' equity

193,239

192,599

Total liabilities and shareholders' equity

$

435,280

$

456,941

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Superior Group of Companies Inc. published this content on 07 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2023 20:42:13 UTC.