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Superior Group of Companies Reports First Quarter 2025 Results

1. SGC reported Q1 2025 sales of $137.1 million, down from $138.8 million. 2. The company experienced a net loss of $0.8 million in Q1 2025. 3. EBITDA decreased to $3.5 million from $9.6 million year-over-year. 4. Board approved a quarterly dividend of $0.14 per share. 5. 2025 revenue outlook adjusted down to $550-$575 million from $585-$595 million.

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FAQ

Why Bearish?

The decline in sales, net income, and EBITDA signals financial weakness, reminiscent of prior downturns.

How important is it?

The financial downturn directly impacts investor sentiment and stock price; future performance relies on market recovery.

Why Short Term?

The immediate results show losses and reduced outlook, likely affecting investor confidence.

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AFLPGUNP
– Total net sales of $137.1 million versus $138.8 million in prior year first quarter –– Net (loss) income of ($0.8) million versus $3.9 million in prior year first quarter –– EBITDA of $3.5 million versus $9.6 million in prior year first quarter –– Continues to execute on stock repurchase plan –– Board of Directors approves $0.14 per share quarterly dividend – ST. PETERSBURG, Fla., May 08, 2025 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC) (the “Company”), today announced its first quarter 2025 results. “We generated sales similar to last year’s levels despite widespread client uncertainty that has become even more elevated since early April,” said Michael Benstock, Chief Executive Officer. “Given the widely noted challenging macro environment, we are leveraging our experience, abilities and resources to proactively reduce expenses without hampering our ability to ramp as conditions improve.  Our balance sheet remains strong and affords us the ability to manage through the current economic headwinds.  We also plan to continue actively repurchasing our shares which we consider a compelling value, and we are pleased that our Board has again approved our quarterly dividend.  While the shorter-term view is unpredictable, we have successfully managed through similar conditions in the past and remain confident in our longer-term opportunities for market share gains and the creation of additional shareholder value.” First Quarter Results For the first quarter ended March 31, 2025, net sales were $137.1 million compared to first quarter 2024 net sales of $138.8 million. Pretax loss of ($0.9) million compares to pretax income of $4.6 million in the first quarter of 2024. Net loss of ($0.8) million or ($0.05) per diluted share compares to net income of $3.9 million or $0.24 per diluted share for the first quarter of 2024. First Quarter 2025 Dividend The Board of Directors declared a quarterly dividend of $0.14 per share, payable May 30, 2025 to shareholders of record as of May 19, 2025. Share Repurchase Update The Company repurchased approximately 294,000 shares for $3.8 million during the first quarter, which completed the $10 million repurchase plan approved in August 2024 and results in approximately $16.3 million remaining under its existing repurchase authorization at quarter end. 2025 Full-Year Outlook Given the heightened macro uncertainty, the Company now expects revenues to be in the range of $550 million to $575 million as compared to its prior outlook range of $585 million to $595 million.  Additionally, the Company is withdrawing its previously issued full-year 2025 outlook earnings per diluted share range of $0.75 to $0.82. Webcast and Conference Call The Company will host a webcast and conference call at 5:00 pm Eastern Time today. The live webcast and archived replay can be accessed in the investor relations section of the Company's website at https://ir.superiorgroupofcompanies.com/Presentations. Interested individuals may also join the teleconference by dialing 1-844-861-5505 for U.S. dialers and 1-412-317-6586 for International dialers. The Canadian Toll-Free number is 1-866-605-3852. Please ask to be joined to the Superior Group of Companies call. A telephone replay of the teleconference will be available through May 15, 2025. To access the replay, dial 1-877-344-7529 in the United States or 1-412-317-0088 from international locations. Canadian dialers can access the replay at 855-669-9658. Please reference conference number 4465888 for replay access. The Company’s website at https://ir.superiorgroupofcompanies.com/Presentations will also contain an updated investor presentation. 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) projections of revenue, income, and other items relating to our financial position and results of operations, including short term and long term plans for cash, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations and (4) 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 existing and/or new or expanded tariffs, uncertainties related to supply disruptions, inflationary environment (including with respect to the cost of finished goods and raw materials and shipping costs), employment levels (including labor shortages), and general economic and political conditions in the areas of the world in which the Company operates or from which it sources its supplies or the areas of the United States of America (“U.S.” or “United States”) in which the Company’s customers are located; changes in the healthcare, retail chain, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, discover liabilities associated with such businesses during the diligence process, successfully integrate any acquired businesses, or successfully manage our expanding operations; the price and availability of raw materials; attracting and retaining senior management and key personnel; the effect of the Company’s previously disclosed material weakness in internal control over financial reporting; the Company may identify a material weakness in internal control in the future, which could result in us not preventing or detecting on a timely basis a material misstatement of the Company’s financial statements and to maintain effective internal control over financial reporting; and other factors described in the Company’s 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, 2024 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. 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):Established in 1920, Superior Group of Companies is comprised of three attractive business segments each serving large, fragmented and growing addressable markets. Across Healthcare Apparel, Branded Products and Contact Centers, each segment enables businesses to create extraordinary brand engagement experiences for their customers and employees. SGC’s commitment to service, quality, advanced technology, and omnichannel commerce provides unparalleled competitive advantages. We are committed to enhancing shareholder value by continuing to pursue a combination of organic growth and strategic acquisitions. For more information, visit www.superiorgroupofcompanies.com. Investor Relations Contact:Investors@Superiorgroupofcompanies.com SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except shares and per share data)  Three Months Ended March 31,  2025  2024 Net sales$137,097  $138,842         Costs and expenses:       Cost of goods sold 86,656   83,525 Selling and administrative expenses 50,102   48,938 Interest expense, net 1,245   1,787   138,003   134,250 (Loss) income before income tax (benefit) expense (906)  4,592 Income tax (benefit) expense (148)  680 Net (loss) income$(758) $3,912         Net (loss) income per share:       Basic$(0.05) $0.24 Diluted$(0.05) $0.24         Weighted average shares outstanding during the period:       Basic 15,599,655   16,028,032 Diluted 15,599,655   16,453,452         Cash dividends per common share$0.14  $0.14          SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except shares and par value data)  March 31,  December 31,  2025  2024  (Unaudited)     ASSETS       Current assets:       Cash and cash equivalents$19,757  $18,766 Accounts receivable, net 92,539   95,092 Inventories 98,543   96,675 Contract assets 50,759   51,688 Prepaid expenses and other current assets 10,402   10,831 Total current assets 272,000   273,052 Property, plant and equipment, net 40,730   41,879 Operating lease right-of-use assets 14,667   15,567 Deferred tax asset 13,833   13,835 Intangible assets, net 50,207   51,137 Goodwill 2,304   2,304 Other assets 17,232   17,360 Total assets$410,973  $415,134         LIABILITIES AND SHAREHOLDERS’ EQUITY       Current liabilities:       Accounts payable$48,809  $50,942 Other current liabilities 38,481   44,367 Current portion of long-term debt 5,625   5,625 Current portion of acquisition-related contingent liabilities 940   814 Total current liabilities 93,855   101,748 Long-term debt 90,065   80,410 Long-term pension liability 13,415   13,315 Long-term acquisition-related contingent liabilities 1,096   935 Long-term operating lease liabilities 9,666   10,486 Other long-term liabilities 8,447   9,384 Total liabilities 216,544   216,278 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 16,244,241 and 16,484,921 shares, respectively 15   16 Additional paid-in capital 83,930   84,060 Retained earnings 114,825   120,139 Accumulated other comprehensive loss, net of tax: (4,341)  (5,359)Total shareholders’ equity 194,429   198,856 Total liabilities and shareholders’ equity$410,973  $415,134          SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands)  Three Months Ended March 31,  2025  2024 CASH FLOWS FROM OPERATING ACTIVITIES       Net (loss) income$(758) $3,912 Adjustments to reconcile net (loss) income to net cash provided by operating activities:       Depreciation and amortization 3,204   3,252 Inventory write-downs 441   420 Share-based compensation expense 1,283   1,015 Change in fair value of acquisition-related contingent liabilities 287   152 Change in fair value of written put options -   392 Other, net 217   144 Changes in assets and liabilities, net of acquisition of a business:       Accounts receivable 2,607   9,607 Contract assets 1,069   (3,835)Inventories (2,191)  5,010 Prepaid expenses and other current assets 749   2,252 Other assets 113   (864)Accounts payable and other current liabilities (8,362)  (12,122)Long-term pension liability 110   108 Other long-term liabilities (757)  4 Net cash (used in) provided by operating activities (1,988)  9,447         CASH FLOWS FROM INVESTING ACTIVITIES       Additions to property, plant and equipment (1,131)  (675)Net cash used in investing activities (1,131)  (675)        CASH FLOWS FROM FINANCING ACTIVITIES       Borrowings under revolving lines of credit 19,000   7,000 Payments under revolving lines of credit (8,000)  (10,000)Payments of term loan (1,406)  (937)Payment of cash dividends (2,280)  (2,330)Payment of acquisition-related contingent liabilities -   (557)Proceeds received on exercise of stock options and shares withheld for taxes 87   449 Common shares repurchased and retired (3,777)  - Net cash provided by (used in) financing activities 3,624   (6,375)        Effect of currency exchange rates on cash 486   (253)Net increase in cash and cash equivalents 991   2,144 Cash and cash equivalents balance, beginning of period 18,766   19,896 Cash and cash equivalents balance, end of period$19,757  $22,040          SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES(Unaudited)(In thousands, except shares and per share data)  Three Months Ended March 31,  2025  2024 Net (loss) income$(758) $3,912 Interest expense, net 1,245   1,787 Income tax (benefit) expense (148)  680 Depreciation and amortization 3,204   3,252 EBITDA(1)$3,543  $9,631 EBITDA margin(1) 2.6%  6.9%         (1) EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, net, income tax expense and depreciation and amortization expense. EBITDA margin is defined as EBITDA divided by net sales. The Company believes EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences and (iii) asset base (depreciation and amortization). The Company uses EBITDA internally to monitor operating results and to evaluate the performance of its business. In addition, the compensation committee has used EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs. EBITDA is not a measure of financial performance under GAAP.  EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate EBITDA are significant components in understanding and assessing the Company’s results of operations. The presentation of the Company’s EBITDA may change from time to time, including as a result of changed business conditions, new accounting pronouncements or otherwise. If the presentation changes, the Company undertakes to disclose any change between periods and the reasons underlying that change. The Company’s EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner. SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESSUPPLEMENTAL INFORMATION - REPORTABLE SEGMENTS(Unaudited)(In thousands)  Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total For the Three Months Ended March 31, 2025:                       Net sales$86,474  $27,263  $24,225  $(865) $-  $137,097 Cost of goods sold 58,787   17,130   11,244   (505)  -   86,656 Gross margin 27,687   10,133   12,981   (360)  -   50,441 Selling and administrative expenses 23,420   9,526   10,921   (360)  6,595   50,102 Depreciation and amortization 1,480   912   722   -   90   3,204 Segment EBITDA(1)$5,747  $1,519  $2,782  $-  $(6,505) $3,543                          Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total For the Three Months Ended March 31, 2024:                       Net sales$87,068  $29,237  $23,552  $(1,015) $-  $138,842 Cost of goods sold 55,327   17,727   10,908   (437)  -   83,525 Gross margin 31,741   11,510   12,644   (578)  -   55,317 Selling and administrative expenses 23,294   9,812   10,421   (578)  5,989   48,938 Depreciation and amortization 1,500   937   723   -   92   3,252 Segment EBITDA(1)$9,947  $2,635  $2,946  $-  $(5,897) $9,631                          (1) Segment EBITDA is our primary measure of segment profitability under U.S. GAAP ASC 280 “Segment Reporting”. Amounts included in income before income tax expense and excluded from Segment EBITDA include: interest expense, net and depreciation and amortization expense. Total EBITDA is a non-GAAP financial measure. Please see reconciliation of Total EBITDA included in the Non-GAAP Financial Measures table above.

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