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- Net Sales Increase 5.2% with Net Income up 57.0%
- 18th Consecutive Quarter with Sales Increase
SEMINOLE, Fla., April 27, 2017 -- Superior Uniform Group, Inc. (NASDAQ:SGC), manufacturer of uniforms, career apparel and accessories, today announced that for the first quarter ended March 31, 2017, net sales increased 5.2 percent to $61.0 million compared with 2016 first quarter net sales of $58.0 million. Net income for the 2017 first quarter was $3.8 million, or $0.26 per diluted share, compared with $2.4 million, or $0.17 per diluted share, reported for the quarter ended March 31, 2016.
Michael Benstock, Chief Executive Officer, commented, “We are pleased to report a 57 percent increase in net income despite falling slightly short of our own expectations for sales in the first quarter. Our sales growth was negatively impacted in the first quarter by several factors. Two factors were most prominent. First, one of our large customers was acquired by one of their competitors during 2016 which was serviced by a different uniform provider. As a result, they are in the process of transitioning their uniform program to the provider utilized by the acquiring company.
“We expect to complete this transition by the end of the second quarter. We have been and continue to work diligently to find ways to remain involved with this customer. Second, we saw several accounts push back significant programs into the second quarter whereas the prior year first quarter benefitted from customers pulling business forward into the first quarter. Sales growth was positively impacted by the inclusion of a full quarter of sales from BAMKO in the 2017 first quarter while the 2016 first quarter only included one month of sales following the March 1st effective date of the BAMKO acquisition.
Our pipeline is strong and our outlook remains positive in spite of all the noise and political distractions. Our teams remain focused on the long-term, and we continue to demonstrate our ability to make appropriate changes to our business model to increase shareholder value.”
CONFERENCE CALL
Superior Uniform Group will hold a conference call on Thursday, April 27, 2017 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 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 May 4, 2017. 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 10104432 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 INCOME | |||||||||||
| THREE MONTHS ENDED MARCH 31, | |||||||||||
| (Unaudited) | |||||||||||
| 2017 | 2016 | ||||||||||
| Net sales | $ | 60,987,000 | $ | 57,968,000 | |||||||
| Costs and expenses: | |||||||||||
| Cost of goods sold | 38,773,000 | 37,947,000 | |||||||||
| Selling and administrative expenses | 17,643,000 | 16,463,000 | |||||||||
| Interest expense | 184,000 | 148,000 | |||||||||
| 56,600,000 | 54,558,000 | ||||||||||
| Gain on sale of property, plant and equipment | 1,018,000 | - | |||||||||
| Income before taxes on income | 5,405,000 | 3,410,000 | |||||||||
| Income tax expense | 1,570,000 | 968,000 | |||||||||
| Net income | $ | 3,835,000 | $ | 2,442,000 | |||||||
| Weighted average number of shares outstanding during the period | |||||||||||
| (Basic) | 14,350,721 | 13,927,063 | |||||||||
| (Diluted) | 14,929,695 | 14,668,658 | |||||||||
| Per Share Data: | |||||||||||
| Basic | |||||||||||
| Net income | $ | 0.27 | $ | 0.18 | |||||||
| Diluted | |||||||||||
| Net income | $ | 0.26 | $ | 0.17 | |||||||
| Cash dividends per common share | $ | 0.0875 | $ | 0.0825 | |||||||
| SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| ASSETS | ||||||||||||
| March 31, | ||||||||||||
| 2017 | December 31, | |||||||||||
| (Unaudited) | 2016 | |||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 9,372,000 | $ | 3,649,000 | ||||||||
| Accounts receivable, less allowance for doubtful accounts | ||||||||||||
| of $1,390,000 and $1,276,000, respectively | 34,522,000 | 41,823,000 | ||||||||||
| Accounts receivable - other | 2,396,000 | 3,085,000 | ||||||||||
| Inventories | 70,308,000 | 69,240,000 | ||||||||||
| Prepaid expenses and other current assets | 9,113,000 | 7,214,000 | ||||||||||
| TOTAL CURRENT ASSETS | 125,711,000 | 125,011,000 | ||||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 25,886,000 | 27,533,000 | ||||||||||
| OTHER INTANGIBLE ASSETS, NET | 22,668,000 | 23,238,000 | ||||||||||
| GOODWILL | 11,300,000 | 11,269,000 | ||||||||||
| DEFERRED INCOME TAXES | 7,065,000 | 6,800,000 | ||||||||||
| OTHER ASSETS | 4,520,000 | 2,997,000 | ||||||||||
| $ | 197,150,000 | $ | 196,848,000 | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Accounts payable | $ | 12,779,000 | $ | 13,507,000 | ||||||||
| Other current liabilities | 10,642,000 | 10,716,000 | ||||||||||
| Current portion of long-term debt | 6,000,000 | 5,893,000 | ||||||||||
| Current portion of acquisition-related contingent liabilities | - | 1,788,000 | ||||||||||
| TOTAL CURRENT LIABILITIES | 29,421,000 | 31,904,000 | ||||||||||
| LONG-TERM DEBT | 35,962,000 | 36,227,000 | ||||||||||
| LONG-TERM PENSION LIABILITY | 8,270,000 | 9,467,000 | ||||||||||
| LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITY | 7,270,000 | 7,238,000 | ||||||||||
| OTHER LONG-TERM LIABILITIES | 2,158,000 | 1,462,000 | ||||||||||
| 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 - 14,616,631 and 14,513,207, respectively. | 15,000 | 15,000 | ||||||||||
| Additional paid-in capital | 43,483,000 | 42,416,000 | ||||||||||
| Retained earnings | 76,637,000 | 74,283,000 | ||||||||||
| Accumulated other comprehensive income (loss), net of tax: | ||||||||||||
| Pensions | (6,082,000 | ) | (6,258,000 | ) | ||||||||
| Cash flow hedges | (107,000 | ) | 21,000 | |||||||||
| Foreign Currency translation adjustment | 123,000 | 73,000 | ||||||||||
| TOTAL SHAREHOLDERS' EQUITY | 114,069,000 | 110,550,000 | ||||||||||
| $ | 197,150,000 | $ | 196,848,000 | |||||||||
| SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| Three Months Ended March 31, | ||||||||||||
| (Unaudited) | ||||||||||||
| 2017 | 2016 | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net income | $ | 3,835,000 | $ | 2,442,000 | ||||||||
| Adjustments to reconcile net income | ||||||||||||
| to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation and amortization | 1,358,000 | 1,103,000 | ||||||||||
| Provision for bad debts - accounts receivable | 146,000 | 67,000 | ||||||||||
| Share-based compensation expense | 842,000 | 877,000 | ||||||||||
| Deferred income tax benefit | (320,000 | ) | (479,000 | ) | ||||||||
| Gain on sale of property, plant and equipment | (1,018,000 | ) | - | |||||||||
| Accretion of acquisition-related contingent liability | 44,000 | 35,000 | ||||||||||
| Changes in assets and liabilities: | ||||||||||||
| Accounts receivable - trade | 7,164,000 | (3,650,000 | ) | |||||||||
| Accounts receivable - other | 689,000 | (43,000 | ) | |||||||||
| Inventories | (1,078,000 | ) | 1,001,000 | |||||||||
| Prepaid expenses and other current assets | (1,892,000 | ) | (184,000 | ) | ||||||||
| Other assets | (1,522,000 | ) | (281,000 | ) | ||||||||
| Accounts payable | (590,000 | ) | (1,833,000 | ) | ||||||||
| Other current liabilities | (426,000 | ) | (2,291,000 | ) | ||||||||
| Long-term pension liability | (920,000 | ) | 485,000 | |||||||||
| Other long-term liabilities | 696,000 | 20,000 | ||||||||||
| Net cash provided by (used in) operating activities | 7,008,000 | (2,731,000 | ) | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Additions to property, plant and equipment | (930,000 | ) | (2,707,000 | ) | ||||||||
| Proceeds from disposals of property, plant and equipment | 2,808,000 | - | ||||||||||
| Purchase of business net of acquired cash | - | (15,252,000 | ) | |||||||||
| Net cash provided by (used in) investing activities | 1,878,000 | (17,959,000 | ) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Proceeds from long-term debt | 71,209,000 | 74,363,000 | ||||||||||
| Repayment of long-term debt | (71,367,000 | ) | (50,250,000 | ) | ||||||||
| Payment of cash dividends | (1,231,000 | ) | (1,133,000 | ) | ||||||||
| Payment of contingent liability | (1,800,000 | ) | (1,800,000 | ) | ||||||||
| Proceeds received on exercise of stock options | 105,000 | 322,000 | ||||||||||
| Tax benefit from vesting of acquisition related restricted stock | 70,000 | 535,000 | ||||||||||
| Tax withholding on exercise of stock rights | (201,000 | ) | (124,000 | ) | ||||||||
| Net cash provided by (used in) financing activities | (3,215,000 | ) | 21,913,000 | |||||||||
| Effect of currency exchange rates on cash | 52,000 | 30,000 | ||||||||||
| Net increase in cash and cash equivalents | 5,723,000 | 1,253,000 | ||||||||||
| Cash and cash equivalents balance, beginning of year | 3,649,000 | 1,036,000 | ||||||||||
| Cash and cash equivalents balance, end of period | $ | 9,372,000 | $ | 2,289,000 | ||||||||
Andrew D. Demott, Jr. COO, CFO & Treasurer (727) 803-7135 OR Hala Elsherbini, Halliburton Investor Relations (972) 458-8000
