EXHIBIT 99.1

NEWS RELEASE

Superior Group of Companies, Inc.

A NASDAQ Listed Company: SGC                    

10055 Seminole Boulevard

Seminole, Florida 33772-2539

Telephone (727) 397-9611

Fax (727) 803-2642

FOR IMMEDIATE RELEASE

 

SUPERIOR GROUP of COMPANIES, INC. REPORTS THIRD QUARTER

OPERATING RESULTS

 

 

Record Earnings Per Share at $0.39

 

Net Sales Increase of 41.4 percent

 

24th Consecutive Quarterly Sales Increase

 

 

SEMINOLE, Florida – October 25, 2018 - Superior Group of Companies, Inc. (NASDAQ: SGC), manufacturer of uniforms, career apparel and accessories (the “Company”), today announced that for the third quarter ended September 30, 2018, net sales increased 41.4 percent to $95.9 million compared with 2017 third quarter net sales of $67.8 million. Net income for the 2018 third quarter was $6.1 million, or $0.39 per diluted share, compared with $5.0 million, or $0.33 per diluted share, reported for the quarter ended September 30, 2017.

 

Michael Benstock, Chief Executive Officer commented, “The strategic benefits of our 2017 and 2018 acquisitions remain clear, and we are well positioned for future sales and earnings growth as a result. We remain focused on continuing to successfully integrate these businesses to provide additional sales and operational efficiencies across our company portfolio. We are confident that this strategy will provide long term benefits to our stakeholders.

 

While organic growth within our Uniform and Promotional Products segments was lower than anticipated, we are bullish on the long term outlook for these segments, and believe our current investments in these segments will provide significant returns for the Company in the future.

 

The Office Gurus, our Remote Staffing segment reported another outstanding quarter with sales growth in excess of 35% as they continue to expand through both new customer acquisition and existing customer sales.

 

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During the quarter we also hired a new Chief Financial Officer, Michael Attinella. Mike is an accomplished finance executive with significant public company and operational expertise.  We are thrilled to have someone with his background and proven experience join Superior’s leadership team.”

 

CONFERENCE CALL

Superior Group of Companies will hold a conference call on Thursday, October 25, 2018 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 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 www.superiorgroupofcompanies.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 November 1, 2018. 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 10124470 for all replay access.

 

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 customers unlock the power of their brands by creating extraordinary brand experiences for employees and customers. It provides customized support for each of its divisions through its shared services model.

 

Fashion Seal Healthcare®, HPI and CID Resources are signature uniform brands of Superior Group of Companies. Each is one of America’s leading providers of uniforms and image apparel in the markets it serves. They specialize in innovative uniform program design, global manufacturing, and state-of-the-art distribution. Every day, more than 6 million Americans go to work wearing a uniform from Superior Group of Companies.

 

BAMKO®, Tangerine Promotions® and Public Identity® are signature promotional products and branded merchandise brands of Superior Group of Companies. They provide unique custom branding, design, sourcing, and marketing solutions to some of the world’s most successful brands.

 

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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 its customers in order to accelerate their growth and improve their customers’ service experiences.

 

SGC’s commitment to service, technology, quality and value-added benefits, as well as its financial strength and resources, provides unparalleled support for its customers’ diverse needs while embracing a “Customer 1st, Every Time!” philosophy and culture in all of its business segments.

 

Visit www.superiorgroupofcompanies.com for more information.

 

Contact:    

Mike Attinella 

CFO & Treasurer 

(727) 803-7170  

OR Hala Elsherbini

Halliburton Investor Relations

(972) 458-8000

 

                

   

Comparative figures are as follows:

 

 

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

   
 

THREE MONTHS ENDED SEPTEMBER 30,

 

(Unaudited)

(In thousands, except shares and per share data)

 

   

2018

   

2017

 
                 

Net sales

  $ 95,870     $ 67,773  
                 

Costs and expenses:

               

Cost of goods sold

    62,070       42,984  

Selling and administrative expenses

    25,482       17,386  

Other periodic pension costs

    96       348  

Interest expense

    940       213  
      88,588       60,931  
                 

Gain on sale of property, plant and equipment

    -       -  
                 
                 

Income before taxes on income

    7,282       6,842  

Income tax expense

    1,160       1,880  
                 

Net income

  $ 6,122     $ 4,962  
                 

Weighted average number of shares outstanding during the period

               

(Basic)

      15,010,660       14,573,813  

(Diluted)

      15,499,894       15,229,722  

Per Share Data:

               

Basic

               

Net income

  $ 0.41     $ 0.34  

Diluted

               

Net income

  $ 0.39     $ 0.33  
                 

Cash dividends per common share

  $ 0.100     $ 0.095  

 

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

NINE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

(In thousands, except shares and per share data)

 

   

2018

   

2017

 
                 

Net sales

  $ 251,349     $ 194,365  
                 

Costs and expenses:

               

Cost of goods sold

    163,396       123,987  

Selling and administrative expenses

    69,991       51,809  

Other periodic pension costs

    289       1,046  

Interest expense

    1,974       593  
      235,650       177,435  
                 

Gain on sale of property, plant and equipment

    -       1,018  
                 
                 

Income before taxes on income

    15,699       17,948  

Income tax expense

    3,310       4,810  
                 

Net income

  $ 12,389     $ 13,138  
                 
Weighted average number of shares outstanding during the period                

(Basic)

      14,929,513       14,475,311  

(Diluted)

      15,505,642       15,066,616  

Per Share Data:

               

Basic

               

Net income

  $ 0.83     $ 0.91  

Diluted

               

Net income

  $ 0.80     $ 0.87  
                 

Cash dividends per common share

  $ 0.290     $ 0.270  

 

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value data)

 

   

September 30,

         
   

2018

   

December 31,

 
   

(Unaudited)

   

2017

 
ASSETS

CURRENT ASSETS:

               

Cash and cash equivalents

  $ 2,296     $ 8,130  

Accounts receivable, less allowance for doubtful accounts of $1,810 and $ 1,382, respectively

    65,023       50,569  

Accounts receivable - other

    2,249       1,848  

Inventories

    65,057       64,979  

Contract assets

    49,605       -  

Prepaid expenses and other current assets

    10,756       11,011  

TOTAL CURRENT ASSETS

    194,986       136,537  
                 

PROPERTY, PLANT AND EQUIPMENT, NET

    28,961       26,844  

OTHER INTANGIBLE ASSETS, NET

    67,279       29,061  

GOODWILL

    33,835       16,032  

DEFERRED INCOME TAXES

    -       2,900  

OTHER ASSETS

    9,969       7,564  
    $ 335,030     $ 218,938  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                 

CURRENT LIABILITIES:

               

Accounts payable

  $ 25,024     $ 19,752  

Other current liabilities

    14,804       12,409  

Current portion of long-term debt

    6,000       6,000  

Current portion of acquisition-related contingent liabilities

    791       3,061  

TOTAL CURRENT LIABILITIES

    46,619       41,222  
                 

LONG-TERM DEBT

    112,224       32,933  

LONG-TERM PENSION LIABILITY

    7,761       8,319  

LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES

    5,301       7,283  

DEFERRED INCOME TAXES

    8,525       -  

OTHER LONG-TERM LIABILITIES

    3,891       4,213  

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 - 15,299,207and 15,081,947, respectively.

    15       15  

Additional paid-in capital

    55,692       49,103  

Retained earnings

    102,062       83,129  

Accumulated other comprehensive income (loss), net of tax:

               

Pensions

    (6,635 )     (7,282 )

Cash flow hedges

    119       (90 )

Foreign currency translation adjustment

    (544 )     93  

TOTAL SHAREHOLDERS' EQUITY

    150,709       124,968  
    $ 335,030     $ 218,938  

 

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30,

(Unaudited)

(In thousands)

 

   

2018

   

2017

 
                 

CASH FLOWS FROM OPERATING ACTIVITIES

               

Net income

  $ 12,389     $ 13,138  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

               

Depreciation and amortization

    5,745       4,081  

Provision for bad debts - accounts receivable

    409       814  

Share-based compensation expense

    1,867       1,654  

Deferred income tax benefit

    (278 )     (586 )

Gain on sale of property, plant and equipment

    -       (1,018 )

Change in fair value of acquisition-related contingent liabilities

    (1,212 )     115  
                 

Changes in assets and liabilities, net of acquisition of business

               

Accounts receivable - trade

    (5,542 )     (1,746 )

Accounts receivable - other

    (401 )     931  

Contract assets

    (3,779 )     -  

Inventories

    5,742       3,270  

Prepaid expenses and other current assets

    (226 )     (189 )

Other assets

    (2,343 )     (2,756 )

Accounts payable and other current liabilities

    (1,077 )     (725 )

Long-term pension liability

    292       (529 )

Other long-term liabilities

    (283 )     977  

Net cash provided by operating activities

    11,303       17,431  
                 

CASH FLOWS FROM INVESTING ACTIVITIES

               

Additions to property, plant and equipment

    (3,881 )     (2,518 )

Acquisition of businesses, net of acquired cash

    (85,597 )     (766 )

Proceeds from disposals of property, plant and equipment

    -       2,858  

Net cash used in investing activities

    (89,478 )     (426 )
                 

CASH FLOWS FROM FINANCING ACTIVITIES

               

Proceeds from long-term debt

    170,713       72,543  

Repayment of long-term debt

    (91,423 )     (75,707 )

Payment of cash dividends

    (4,335 )     (3,874 )

Payment of acquisition-related contingent liabilities

    (3,032 )     (1,800 )

Proceeds received on exercise of stock options

    432       1,218  

Purchase of common stock

    (268 )     -  

Tax benefit from vesting of acquisition-related restricted stock

    445       650  

Tax withholding on exercise of stock rights

    (17 )     (421 )
                 

Net cash provided by (used in) financing activities

    72,515       (7,391 )
                 

Effect of currency exchange rates on cash

    (174 )     46  
                 

Net (decrease) increase in cash and cash equivalents

    (5,834 )     9,660  
                 

Cash and cash equivalents balance, beginning of year

    8,130       3,649  
                 

Cash and cash equivalents balance, end of period

  $ 2,296     $ 13,309  

 

 

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