GlobeNewswire Inc | Mar 1, 2021 07:00AM EST

March 01, 2021

-- Fourth quarter net sales up 34% and Annual net sales up 40% -- Fourth quarter earnings per share (diluted) increased 295% to $0.79 -- Net Sales and Year-End backlogs, excluding increases from PPE sales are the highest ever recorded -- Annual debt reduction of $31.6 million

SEMINOLE, Fla., March 01, 2021 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC), today announced its fourth quarter and year-end operating results for 2020.

The Company announced that for the year ended December 31, 2020, net sales increased $150.0 million or 40% percent to $526.7 million compared to $376.7 million in 2019. Pre-tax income was $51.5 million compared to $15.3 million in 2019. Net income for the fiscal year 2020 was $41.0 million, or $2.65 per diluted share, compared to $12.1 million, or $0.79 per diluted share in 2019.

Net sales for the fourth quarter ended December 31, 2020 were $145.4 million, an increase of 34% compared to the 2019 fourth quarter of $108.4 million. Pre-tax income was $15.9 million compared to $4.0 million in the 2019 fourth quarter. Net income for the fourth quarter ended December 31, 2020 was $12.5 million, or $0.79 per diluted share, compared to $3.0 million, or $0.20 per diluted share, reported for the fourth quarter 2019.

Michael Benstock, Chief Executive Officer, commented, While the pandemic made 2020 very challenging, we are very proud and grateful that our teams in all segments responded so strategically and collaboratively to the adversity which produced record setting results for our shareholders. We continued to benefit from our successful pivot to supplying a wider array of personal protective equipment (PPE) during the fourth quarter. For the full year 2020, net sales of PPE were approximately $131.2 million as compared to $3.9 million in 2019. While the pivot to PPE was key to our growth in net sales and net income, it is important to note that we actually had organic growth in net sales in 2020 in all three of our business segments exclusive of the increased sales from PPE. Sales at BAMKO, which comprises our Promotional Products Segment, grew 53% for the quarter and 88% for the year, eclipsing $202 million. Sales at The Office Gurus, our Remote Staffing Segment, returned to pre-pandemic growth levels in the fourth quarter with 31% and 18% growth for the quarter and year, respectively.Sales in our Uniform Segment also grew 24% for the quarter and 21% for the year.

Our pre-existing strategy of selling to a diverse range of customers with our redundant manufacturing strategy 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 finished the year with record year-end 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 from operating activities, we were able to reduce our outstanding debt by $31.6 million in 2020. This reduction has bolstered our ability to capitalize on opportunities as they arise such as our recent acquisition of Gifts by Design during the first quarter of 2021. We expect that additional favorable acquisition opportunities will be available for us in the current environment.

CONFERENCE CALL

Superior Group of Companies will hold a conference call on Monday, March 1, 2021 at 2:00 p.m. Eastern Time to discuss the Companys 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 Companys website at www.superiorgroupofcompanies.com.

A telephone replay of the teleconference will be available one hour after the end of the call through 10:00 a.m. Eastern Time on March 15, 2021. 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 10151894 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) pandemic 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 deliver a vaccine on a timely basis, among other factors;general economic conditions, including employment levels, in the areas of the UnitedStates of America(United States) in which the Companys customers are located; changes in the healthcare, industrial, retail, hotels, food service, transportation and other 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 businesses 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 Companys 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 engagement 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 WonderWink are our core uniform brands. Each is one of Americas 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 7 million Americans go to work wearing a uniform from Superior Group of Companies.

BAMKO, Tangerine Promotions, Public Identity and Gifts By Design are our signature promotional product companies. We provide unique custom branding, design, sourcing, and marketing solutions to some of the worlds 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.

SGCs 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.

Visit www.superiorgroupofcompanies.com for more information.

Contact:

Andrew D. Demott, Jr. COO, CFO & Treasurer727-803-7135

-OR-

Hala ElsherbiniThree Part AdvisorsSenior Managing Director214-442-0016

Comparative figures are as follows:

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except shares and per share data) Years Ended December 31, 2020 2019 2018Net sales $ 526,697 $ 376,701 $ 346,350 Costs and expenses:Cost of goods 337,932 247,772 224,653soldSelling andadministrative 136,515 107,282 96,710expensesOther periodic 955 1,962 385pension costsInterest 2,003 4,399 3,207expense 477,405 361,415 324,955Gain on saleof property, 2,164 - -plant andequipmentIncome beforetaxes on 51,456 15,286 21,395incomeIncome tax 10,430 3,220 4,420expenseNet income $ 41,026 $ 12,066 $ 16,975 Net income per share:Basic $ $ $ 2.72 0.81 1.14Diluted $ $ $ 2.65 0.79 1.10 Weightedaverage sharesoutstanding during theperiodBasic 15,075,134 14,945,165 14,937,786Diluted 15,508,420 15,266,408 15,472,133 Cash dividends per common $ 0.40 $ 0.40 $ 0.39share

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share and par value data) December 31, 2020 2019ASSETS Current assets: Cash and cash equivalents $ $ 5,172 9,038Accounts receivable, less allowancefor doubtful accounts of $7,667 and 101,902 79,746$2,964, respectivelyAccounts receivable - other 1,356 1,083Inventories 89,766 73,379Contract assets 39,231 38,533Prepaid expenses and other current 11,030 9,934assetsTotal current assets 248,457 211,713Property, plant and equipment, net 36,644 32,825Operating lease right-of-use assets 3,826 5,445Intangible assets, net 58,746 62,536Goodwill 36,116 36,292Other assets 10,135 10,122Total assets $ $ 393,924 358,933 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities: Accounts payable $ $ 39,327 33,271Other current liabilities 44,670 18,894Current portion of long-term debt 15,286 15,286Current portion of acquisition-related 5,589 1,905contingent liabilitiesTotal current liabilities 104,872 69,356Long-term debt 72,372 104,003Long-term pension liability 14,574 10,253Long-term acquisition-related 1,892 3,423contingent liabilitiesLong-term operating lease liabilities 1,599 2,380Deferred tax liability 450 7,042Other long-term liabilities 6,535 4,922Commitments 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 15 15and outstanding - 15,391,660 and15,227,604 shares, respectively.Additional paid-in capital 61,844 57,442Retained earnings 141,972 107,581Accumulated other comprehensive income (loss), net of tax: Pensions (10,898) (7,224) Cash flow hedges 69 91 Foreign currency translation (1,372) (351)adjustment Total shareholders? equity 191,630 157,554 Total liabilities and shareholders? $ $ equity 393,924 358,933

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands) Years Ended December 31, 2020 2019 2018CASH FLOWS FROMOPERATING ACTIVITIESNet income $ $ $ 41,026 12,066 16,975Adjustments toreconcile netincome to net cash provided byoperatingactivities:Depreciation and 8,132 8,272 7,906amortizationProvision for baddebts - accounts 6,746 1,323 867receivableShare-basedcompensation 2,530 1,484 2,264expenseDeferred income tax (4,987) (1,595) (665)benefitGain on sale ofproperty, plant and (2,164) (5) -equipmentChange in fairvalue ofacquisition-related 4,119 (74) (1,116)contingentliabilitiesChanges in assetsand liabilities, net of acquisitionof business:Accounts receivable (29,251) (17,104) (4,886)Accounts receivable (273) 660 105- otherContract assets (699) 10,703 (3,382)Inventories (16,763) (4,984) 2,429Prepaid expensesand other current (1,474) (3,479) 2,622assetsOther assets 464 (1,717) (1,257)Accounts payableand other current 32,690 10,904 (1,344)liabilitiesLong-term pension (508) 2,138 (128)liabilityOther long-term 1,771 1,415 (526)liabilities Net cashprovided by 41,359 20,007 19,864operatingactivities CASH FLOWS FROMINVESTING ACTIVITIESAdditions toproperty, plant and (11,857) (9,672) (4,869)equipmentProceeds fromdisposals of 5,284 5 -property, plant andequipmentAcquisition ofbusinesses, net of - - (85,597)acquired cashNet cash used ininvesting (6,573) (9,667) (90,466)activities CASH FLOWS FROMFINANCING ACTIVITIESProceeds from 202,349 165,314 206,025borrowings of debtRepayment of debt (234,063) (163,645) (127,439)Payment of cash (6,111) (6,046) (5,836)dividendsPayment ofacquisition-related (1,966) (961) (2,861)contingentliabilitiesProceeds receivedon exercise of 1,927 283 727stock optionsTax withholdings onexercise of stock (66) - (17)rightsTax (provision)benefit fromvesting of (13) 30 445acquisition-relatedrestricted stockCommon stockreacquired and (500) (1,685) (2,906)retiredNet cash providedby (used in) (38,443) (6,710) 68,138financingactivities Effect of currencyexchange rates on (209) 46 (304)cashNet increase(decrease) in cash (3,866) 3,676 (2,768)and cashequivalentsCash and cashequivalents 9,038 5,362 8,130balance, beginningof periodCash and cashequivalents $ $ $ balance, end of 5,172 9,038 5,362period Supplementaldisclosure of cash flow information:Income taxes paid $ $ $ 13,390 7,146 1,088Interest paid $ $ $ 1,490 3,979 2,724