- Net Sales Increase 19.5 Percent
- BAMKO Reports Net Sales of $9.8 million, an Increase of 88.7 Percent Over Prior Year Second Quarter
SEMINOLE, Fla., July 21, 2016 (GLOBE NEWSWIRE) -- Superior Uniform Group, Inc. (NASDAQ:SGC), manufacturer of uniforms, career apparel, accessories and promotional products, today announced that for the second quarter ended June 30, 2016, net sales increased 19.5 percent to $64.7 million compared with 2015 second quarter net sales of $54.1 million. Net income for second quarter 2016 was $3.1 million, or $0.21 per diluted share, compared with $3.6 million, or $0.25 per diluted share, reported for the quarter ended June 30, 2015.
For the six months ended June 30, 2016, net sales increased 22.1 percent to $122.6 million compared with net sales of $100.5 million for the six months ended June 30, 2015. Net income for the six months ended June 30, 2016 was $5.3 million, or $0.36 per diluted share, compared with $5.7 million, or $0.39 per diluted share reported for the six months ended June 30, 2015. As a result of the BAMKO acquisition, net income was negatively impacted by $0.2 million in pre-tax acquisition related expenses in the second quarter of 2016 and $1.1 million in the first six months of 2016.
Michael Benstock, Chief Executive Officer, commented, “We are pleased to report a 19.5 percent increase in net sales in the second quarter. The increase in net sales for the second quarter came from net sales at BAMKO, which we acquired in March of this year, and from The Office Gurus, our remote staffing segment. Net sales in our uniforms segment leveled off in the second quarter following an exceptionally strong first quarter of 2016. Additionally, BAMKO has come out of the gate very strong, generating net sales of $9.8 million in the 2016 second quarter. This represents an increase of more than 88 percent versus the same period in 2015. We are very pleased with BAMKO and continue to work to achieve operational and sales synergies between the two organizations. The Office Gurus continues to grow at a very healthy rate with net sales to outside customers up 25.8 percent over the second quarter of 2015. At the end of the second quarter, we completed the building project in El Salvador and moved into a brand new, state-of-the-art, call center facility that nearly triples our capacity there. In addition to the acquisition of BAMKO and the new building in El Salvador, we continue to invest in our uniform business. Our new sewing factory in Haiti is progressing nicely and on schedule with our implementation plan. We expect it to achieve breakeven status by the end of 2016.
“Our financial position remains strong, and we were able to pay down outstanding debt by $4.7 million in the second quarter of 2016. This financial strength positions us well to continue to invest in our businesses and to take advantage of opportunities as they arise.”
CONFERENCE CALL
Superior Uniform Group will hold a conference call on Thursday, July 21, 2016 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 also 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 July 28, 2016. 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 10088860 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) | ||||||||||||
| 2016 | 2015 | |||||||||||
| Net sales | $ | 64,660,000 | $ | 54,116,000 | ||||||||
| Costs and expenses: | ||||||||||||
| Cost of goods sold | 42,897,000 | 35,585,000 | ||||||||||
| Selling and administrative expenses | 16,956,000 | 13,008,000 | ||||||||||
| Interest expense | 192,000 | 129,000 | ||||||||||
| 60,045,000 | 48,722,000 | |||||||||||
| Income before taxes on income | 4,615,000 | 5,394,000 | ||||||||||
| Income tax expense | 1,540,000 | 1,770,000 | ||||||||||
| Net income | $ | 3,075,000 | $ | 3,624,000 | ||||||||
| Weighted average number of shares outstanding during the period | ||||||||||||
| (Basic) | 14,120,617 | 13,730,646 | ||||||||||
| (Diluted) | 14,957,469 | 14,577,342 | ||||||||||
| Per Share Data: | ||||||||||||
| Basic | ||||||||||||
| Net income | $ | 0.22 | $ | 0.26 | ||||||||
| Diluted | ||||||||||||
| Net income | $ | 0.21 | $ | 0.25 | ||||||||
| Other comprehensive income, net of tax: | ||||||||||||
| Defined benefit pension plans: | ||||||||||||
| Recognition of net losses included in | ||||||||||||
| net periodic pension costs | 171,000 | 129,000 | ||||||||||
| Recognition of settlement loss included | ||||||||||||
| in net periodic pension costs | 33,000 | 201,000 | ||||||||||
| Gain on cash flow hedging activities | 21,000 | 21,000 | ||||||||||
| Foreign currency translation adjustment | 173,000 | - | ||||||||||
| Other comprehensive income | 398,000 | 351,000 | ||||||||||
| Comprehensive income | $ | 3,473,000 | $ | 3,975,000 | ||||||||
| Cash dividends per common share | $ | 0.0825 | $ | 0.075 | ||||||||
| SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||
| Six Months Ended June 30, | ||||||||||||||
| (Continued) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| 2016 | 2015 | |||||||||||||
| Net sales | $ | 122,628,000 | $ | 100,463,000 | ||||||||||
| Costs and expenses: | ||||||||||||||
| Cost of goods sold | 80,844,000 | 66,136,000 | ||||||||||||
| Selling and administrative expenses | 33,419,000 | 25,445,000 | ||||||||||||
| Interest expense | 340,000 | 265,000 | ||||||||||||
| 114,603,000 | 91,846,000 | |||||||||||||
| Income before taxes on income | 8,025,000 | 8,617,000 | ||||||||||||
| Income tax expense | 2,690,000 | 2,950,000 | ||||||||||||
| Net income | $ | 5,335,000 | $ | 5,667,000 | ||||||||||
| Weighted average number of shares outstanding during the period | ||||||||||||||
| (Basic) | 14,023,840 | 13,657,784 | ||||||||||||
| (Diluted) | 14,813,064 | 14,562,713 | ||||||||||||
| Per Share Data: | ||||||||||||||
| Basic | ||||||||||||||
| Net income | $ | 0.38 | $ | 0.41 | ||||||||||
| Diluted | ||||||||||||||
| Net income | $ | 0.36 | $ | 0.39 | ||||||||||
| Other comprehensive income, net of tax: | ||||||||||||||
| Defined benefit pension plans: | ||||||||||||||
| Recognition of net losses included in | ||||||||||||||
| net periodic pension costs | 342,000 | 257,000 | ||||||||||||
| Recognition of settlement loss included | ||||||||||||||
| in net periodic pension costs | 198,000 | 201,000 | ||||||||||||
| Gain (loss) on cash flow hedging activities | 6,000 | (1,000 | ) | |||||||||||
| Foreign currency translation adjustment | 294,000 | - | ||||||||||||
| Other comprehensive income | 840,000 | 457,000 | ||||||||||||
| Comprehensive income | $ | 6,175,000 | $ | 6,124,000 | ||||||||||
| Cash dividends per common share | $ | 0.165 | $ | 0.15 | ||||||||||
| SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| ASSETS | ||||||||||||||
| June 30, | ||||||||||||||
| 2016 | December 31, | |||||||||||||
| (Unaudited) | 2015 | |||||||||||||
| CURRENT ASSETS: | ||||||||||||||
| Cash and cash equivalents | $ | 4,735,000 | $ | 1,036,000 | ||||||||||
| Accounts receivable, less allowance for doubtful accounts | ||||||||||||||
| of $1,100,000 and $848,000, respectively | 37,091,000 | 29,914,000 | ||||||||||||
| Accounts receivable - other | 2,137,000 | 3,262,000 | ||||||||||||
| Prepaid expenses and other current assets | 11,150,000 | 6,214,000 | ||||||||||||
| Inventories* | 63,161,000 | 63,573,000 | ||||||||||||
| TOTAL CURRENT ASSETS | 118,274,000 | 103,999,000 | ||||||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 27,090,000 | 22,524,000 | ||||||||||||
| OTHER INTANGIBLE ASSETS, NET | 24,428,000 | 14,222,000 | ||||||||||||
| GOODWILL | 11,481,000 | 4,135,000 | ||||||||||||
| DEFERRED INCOME TAXES | 4,760,000 | 4,980,000 | ||||||||||||
| OTHER ASSETS | 2,392,000 | 1,871,000 | ||||||||||||
| $ | 188,425,000 | $ | 151,731,000 | |||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||
| Accounts payable | $ | 15,397,000 | $ | 11,775,000 | ||||||||||
| Other current liabilities | 7,883,000 | 8,307,000 | ||||||||||||
| Current portion of long-term debt | 6,429,000 | 2,750,000 | ||||||||||||
| Current portion of acquisition-related contigent liabilities | 1,969,000 | 1,787,000 | ||||||||||||
| TOTAL CURRENT LIABILITIES | 31,678,000 | 24,619,000 | ||||||||||||
| LONG-TERM DEBT, net of issuance costs | 36,898,000 | 21,131,000 | ||||||||||||
| LONG-TERM PENSION LIABILITY | 8,347,000 | 8,925,000 | ||||||||||||
| LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES | 7,361,000 | 3,866,000 | ||||||||||||
| OTHER LONG-TERM LIABILITIES | 540,000 | 500,000 | ||||||||||||
| 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 - 14,407,920 and 13,917,465, respectively. | 14,000 | 14,000 | ||||||||||||
| Additional paid-in capital | 40,982,000 | 33,806,000 | ||||||||||||
| Retained earnings | 68,287,000 | 65,392,000 | ||||||||||||
| Accumulated other comprehensive income (loss), net of tax: | ||||||||||||||
| Pensions | (5,908,000 | ) | (6,448,000 | ) | ||||||||||
| Cash flow hedges | (68,000 | ) | (74,000 | ) | ||||||||||
| Foreign currency translation adjustment | 294,000 | - | ||||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 103,601,000 | 92,690,000 | ||||||||||||
| $ | 188,425,000 | $ | 151,731,000 | |||||||||||
| * Inventories consist of the following: | ||||||||||||||
| June 30, | ||||||||||||||
| 2016 | December 31, | |||||||||||||
| (Unaudited) | 2015 | |||||||||||||
| Finished goods | $ | 49,649,000 | $ | 48,206,000 | ||||||||||
| Work in process | 955,000 | 860,000 | ||||||||||||
| Raw materials | 12,557,000 | 14,507,000 | ||||||||||||
| $ | 63,161,000 | $ | 63,573,000 | |||||||||||
| SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| Six Months Ended June 30, | ||||||||||||
| (Unaudited) | ||||||||||||
| 2016 | 2015 | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net income | $ | 5,335,000 | $ | 5,667,000 | ||||||||
| Adjustments to reconcile net income | ||||||||||||
| to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 2,333,000 | 1,890,000 | ||||||||||
| Provision for bad debts - accounts receivable | 180,000 | 211,000 | ||||||||||
| Share-based compensation expense | 983,000 | 964,000 | ||||||||||
| Deferred income tax provision (benefit) | (69,000 | ) | (881,000 | ) | ||||||||
| Loss on sales of property, plant and equipment | - | 12,000 | ||||||||||
| Accretion of acquisition-related contingent liability | 81,000 | 65,000 | ||||||||||
| Changes in assets and liabilities, net of acquisition of business: | ||||||||||||
| Accounts receivable - trade | (2,181,000 | ) | (2,079,000 | ) | ||||||||
| Accounts receivable - other | 1,125,000 | 892,000 | ||||||||||
| Inventories | 653,000 | (2,493,000 | ) | |||||||||
| Prepaid expenses and other current assets | (1,648,000 | ) | (1,419,000 | ) | ||||||||
| Other assets | (353,000 | ) | (41,000 | ) | ||||||||
| Accounts payable | 2,238,000 | 4,386,000 | ||||||||||
| Other current liabilities | (1,350,000 | ) | (2,233,000 | ) | ||||||||
| Long-term pension liability | 259,000 | 567,000 | ||||||||||
| Other long-term liabilities | 40,000 | 40,000 | ||||||||||
| Net cash provided by operating activities | 7,626,000 | 5,548,000 | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Additions to property, plant and equipment | (5,527,000 | ) | (2,099,000 | ) | ||||||||
| Acquisition of business, net of acquired cash | (15,252,000 | ) | - | |||||||||
| Net cash used in investing activities | (20,779,000 | ) | (2,099,000 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Proceeds from long-term debt | 90,514,000 | 25,040,000 | ||||||||||
| Repayment of long-term debt | (71,138,000 | ) | (26,638,000 | ) | ||||||||
| Payment of cash dividends | (2,270,000 | ) | (2,006,000 | ) | ||||||||
| Payment of contingent liability | (1,800,000 | ) | - | |||||||||
| Proceeds received on exercise of stock options | 781,000 | 1,383,000 | ||||||||||
| Excess tax benefit from exercise of stock options and SARS | 683,000 | 588,000 | ||||||||||
| Net cash provided by (used in) financing activities | 16,770,000 | (1,633,000 | ) | |||||||||
| Effect of currency exchange rates on cash | 82,000 | - | ||||||||||
| Net increase in cash and cash equivalents | 3,699,000 | 1,816,000 | ||||||||||
| Cash and cash equivalents balance, beginning of year | 1,036,000 | 4,586,000 | ||||||||||
| Cash and cash equivalents balance, end of period | $ | 4,735,000 | $ | 6,402,000 | ||||||||