GlobeNewswire Inc | Nov 3, 2021 07:00AM EDT

November 03, 2021

Compared to the second quarter 2020:

-- Net Sales increased by 29.4% excluding PPE sales -- The Office Gurus net sales increased 56.8% -- BAMKO net sales increased 78.8% excluding PPE sales

SEMINOLE, Fla., Nov. 03, 2021 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC), today announced its second quarter operating results for 2021.

The Company announced that for the thirdquarter ended September 30, 2021, net sales decreased3.5%to $123.3million, compared to third quarter 2020 net sales of $127.7million. Pretax Income was $10.0million compared to $12.1million in the thirdquarter of 2020. Net income was $8.2million or $0.51per diluted sharecompared to $9.9million, or $0.63 per diluted share for the thirdquarter of 2020.

Michael Benstock, Chief Executive Officer, commented, We are encouraged by the momentum of our core businesses and believe we are well positioned to take market share across our portfolio of core products and services. Excluding the impact of PPE sales, we saw remarkable growth in our promotional products segment and our remote staffing solutions segment. Uniforms and related products reported growth in net sales of 3.9 percent, excluding the impact of PPE sales and in spite of continuing headwinds from global supply chain and logistical issues. We continue to see increasing opportunities for growth as business activity normalizes. We are well positioned with strong tailwinds in all of our core businesses and expect to continue to report strong sales and earnings for the balance of 2021.

CONFERENCE CALL

Superior Group of Companies will hold a conference call on Wednesday, November 3, 2021 at 2:15p.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 Company's website at https://ir.superiorgroupofcompanies.com/Presentations.

A telephone replay of the teleconference will be available one hour after the end of the call through November 17,2021. 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 10160553for 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 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 COVID-19 pandemic, including existing and possible future variants, on the United States of America (U.S. or United States) and global markets, our business, operations, customers, suppliers and employees, including without limitation the length and scope of restrictions imposed by various governments and organizations and the success of efforts to deliver effective vaccines on a timely basis to a number of people sufficient to prevent or substantially lower the severity of incidents of infection or variants, among other factors; our ability to navigate successfully the challenges posed by current global supply disruptions; general economic conditions, including employment levels, in the areas of the United States in which the Companys customers are located; changes in the healthcare, 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 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, 2020 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. 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: Hala ElsherbiniAndrew D. Demott, Jr. Three Part AdvisorsCOO & CFO -OR- Senior Managing Director727-803-7135 214-442-0016



Comparative figures are as follows:

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

(In thousands, except share and per sharedata)

Three Months Ended September 30, 2021 2020 Net sales $ 123,326 $ 127,737 Costs and expenses: Cost of goods sold 77,512 80,285 Selling and administrative expenses 35,059 34,917 Other periodic pension costs 459 212 Interest expense 320 239 113,350 115,653 Income before taxes on income 9,976 12,084 Income tax expense 1,780 2,140 Net income $ 8,196 $ 9,944 Net income per share: Basic $ 0.53 $ 0.66 Diluted $ 0.51 $ 0.63 Weighted average shares outstanding during the period:Basic 15,528,534 15,084,300 Diluted 16,099,850 15,711,122 Cash dividends per common share $ 0.12 $ 0.20

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except share and per sharedata)

Nine Months Ended September 30, 2021 2020 Net sales $ 394,960 $ 381,341 Costs and expenses: Cost of goods sold 252,945 244,500 Selling and administrative expenses 104,076 98,704 Other periodic pension costs 1,328 830 Pension plan termination charge 6,945 - Interest expense 925 1,732 366,219 345,766 Income before taxes on income 28,741 35,575 Income tax expense 5,490 7,090 Net income $ 23,251 $ 28,485 Net income per share: Basic $ 1.51 $ 1.89 Diluted $ 1.45 $ 1.85 Weighted average shares outstanding during the periodBasic 15,394,427 15,041,738 Diluted 16,059,686 15,361,035 Cash dividends per common share $ 0.34 $ 0.30

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share and par value data)

September December 30, 31, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 6,408 $ 5,172 Accounts receivable, less allowance for doubtful 92,500 101,902 accounts of $5,852 and $7,667, respectivelyAccounts receivable - other 2,338 1,356 Inventories 103,371 89,766 Contract assets 37,575 39,231 Prepaid expenses and other current assets 15,633 11,030 Total current assets 257,825 248,457 Property, plant and equipment, net 46,928 36,644 Operating lease right-of-use assets 6,299 3,826 Intangible assets, net 59,414 58,746 Goodwill 38,557 36,116 Other assets 13,154 10,135 Total assets $ 422,177 $ 393,924 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities: Accounts payable $ 38,096 $ 39,327 Other current liabilities 36,069 44,670 Current portion of long-term debt 15,286 15,286 Current portion of acquisition-related contingent 3,929 5,589 liabilitiesTotal current liabilities 93,380 104,872 Long-term debt 80,882 72,372 Long-term pension liability 14,548 14,574 Long-term acquisition-related contingent - 1,892 liabilitiesLong-term operating lease liabilities 2,189 1,599 Deferred tax liability 1,448 450 Other long-term liabilities 8,795 6,535 Commitments and contingencies (Note 6) Shareholders? equity: Preferred stock, $.001 par value - authorized - - 300,000 shares (none issued)Common stock, $.001 par value - authorized50,000,000 shares, issued and outstanding 16 15 15,960,253 and 15,391,660 shares, respectively.Additional paid-in capital 66,996 61,844 Retained earnings 159,711 141,972 Accumulated other comprehensive income (loss), net of tax:Pensions (4,285 ) (10,898 )Cash flow hedges 53 69 Foreign currency translation adjustment (1,556 ) (1,372 )Total shareholders? equity 220,935 191,630 Total liabilities and shareholders? equity $ 422,177 $ 393,924

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands)

Nine Months Ended September 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 23,251 $ 28,485 Adjustments to reconcile net income to netcash provided by (used in) operating activities:Depreciation and amortization 6,719 5,972 Provision for bad debts - accounts 1,715 6,099 receivableShare-based compensation expense 2,757 1,790 Deferred income tax benefit (1,127 ) (3,654 )Change in fair value of acquisition-related 2,310 2,759 contingent liabilitiesPension plan termination charge 6,945 - Changes in assets and liabilities, net of acquisition of business:Accounts receivable 7,544 (12,225 )Accounts receivable - other (732 ) (1,121 )Contract assets 1,656 3,049 Inventories (13,667 ) (7,306 )Prepaid expenses and other current assets (4,445 ) (3,592 )Other assets (1,462 ) 1 Accounts payable and other current (12,287 ) 29,167 liabilitiesPayment of acquisition-related contingent (4,220 ) - liabilitiesLong-term pension liability 860 864 Other long-term liabilities 2,344 779 Net cash provided by operating activities 18,161 51,067 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment (14,455 ) (5,711 )Acquisition of business (6,026 ) - Net cash used in investing activities (20,481 ) (5,711 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings of debt 173,436 137,559 Repayment of debt (165,023 ) (180,112 )Payment of cash dividends (5,334 ) (4,574 )Payment of acquisition-related contingent (1,641 ) (1,966 )liabilityProceeds received on exercise of stock 2,452 1,407 optionsTax withholdings on exercise of performance (405 ) (32 )based stockTax (provision) benefit from vesting of 171 (13 )acquisition-related restricted stockCommon stock reacquired and retired - (500 )Net cash provided by (used in) financing 3,656 (48,231 )activities Effect of currency exchange rates on cash (100 ) (512 )Net increase (decrease) in cash and cash 1,236 (3,387 )equivalentsCash and cash equivalents balance, 5,172 9,038 beginning of periodCash and cash equivalents balance, end of $ 6,408 $ 5,651 period

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES(Unaudited)(In thousands, except share and par value data)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net income $ 8,196 $ 9,944 $ 23,251 $ 28,485 Adjustment for items:Pensionplan - - 6,945 - terminationchargeTax impactof - - (610 ) - adjustmentAdjustednet income $ 8,196 $ 9,944 $ 29,586 $ 28,485 (1) Diluted netincome per $ 0.51 $ 0.63 $ 1.45 $ 1.85 shareAdjustmentfor items,after-tax, - - 0.39 - per dilutedshareDilutedadjustednet income $ 0.51 $ 0.63 $ 1.84 $ 1.85 per share(1) Weightedaverageshares outstandingduring theperiodDiluted 16,099,850 15,711,122 16,059,686 15,361,035

(1) Adjusted net income and diluted adjusted net income per share, which arenon-GAAP measures, are defined as net income and net income per share,excluding the impact of pension plan termination charges (net of tax).Management believes adjusted net income and diluted adjusted net income pershare provides useful information to investors because it allows management,investors and others to evaluate and compare our operating results from periodto period by removing the impact of pension plan termination charges notappropriately reflective of our core business.