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Superior Group of Companies Reports Fourth Quarter 2024 Results

1. SGC's Q4 net sales fell to $145.4 million from $147.2 million. 2. Net income decreased to $2.1 million this quarter. 3. EBITDA dropped to $7.3 million compared to last year. 4. Stock repurchase plan expanded by $17.5 million. 5. 2025 sales forecast is $585-$595 million, up from $565.7 million.

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FAQ

Why Bullish?

Despite lower Q4 results, SGC's stock repurchase program and strong full-year outlook can bolster investor confidence. Historically, share buybacks often lead to positive price action.

How important is it?

The stock repurchase plan and positive sales forecast are significant enough to influence market perception and investor behavior. The historical context of similar announcements leading to price appreciation underscores this.

Why Long Term?

The full-year outlook indicates ongoing growth and expansion, suggesting a sustained positive impact on stock price over time. Previous instances of similar growth outlooks have led to long-term appreciation in stock value.

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PNCGSTMUS
– Total net sales of $145.4 million versus $147.2 million in prior year fourth quarter –– Net income of $2.1 million versus $3.6 million in prior year fourth quarter –– EBITDA of $7.3 million versus $9.9 million in prior year fourth quarter –– Board of Directors approves additional stock repurchase plan –– Provides full-year outlook –  ST. PETERSBURG, Fla., March 11, 2025 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC) (the “Company”), today announced its fourth quarter 2024 results. “For 2024, we grew sales and diluted EPS 4% and 35%, respectively, while strengthening our balance sheet and making strategic investments in our people, services, products and technology.  Capping the year, our fourth quarter results came in as expected, placing us within our full-year outlook ranges which were raised in May of last year, and again reflecting back-end weighted results as anticipated,” said Michael Benstock, Chief Executive Officer. “While market conditions continue to reflect customer uncertainty, our team is demonstrating resilience and adaptability, and we are committed to tackling what we can control. Specifically, we are focused on cost management, operational efficiencies, customer experience and driving innovation, and when conditions turn we see tremendous opportunities for growth and market share opportunities across our three attractive end markets. Our outlook for 2025 reflects continued growth and margin expansion, and today our Board has approved a significant expansion of our share repurchase authorization.” Fourth Quarter Results For the fourth quarter ended December 31, 2024, net sales declined to $145.4 million compared to fourth quarter 2023 net sales of $147.2 million. Pretax income declined to $2.5 million compared to $4.2 million in the fourth quarter of 2023. Net income declined to $2.1 million or $0.13 per diluted share compared to $3.6 million or $0.22 per diluted share for the fourth quarter of 2023. 2025 Full-Year Outlook The Company forecasts full-year 2025 net sales in the range of $585 million to $595 million, versus 2024 net sales of $565.7 million, and forecasts full-year earnings per diluted share in the range of $0.75 to $0.82, versus $0.73 in 2024.  Stock Repurchase Plan The Board of Directors approved a new stock repurchase plan which authorizes the Company to repurchase up to an additional $17.5 million worth of its common stock. This plan will be in effect upon completion or expiration of the previous plan approved by the Board of Directors on August 12, 2024, which had authorized the repurchase of up to $10 million and through which the Company had purchased 523,472 shares for $7.4 million through year-end 2024. The new stock repurchase plan, which has no expiration date, allows the Company to purchase common stock from time to time through, among other ways, open market purchases, privately negotiated transactions, block purchases, and/or pursuant to Rule 10b5-1 trading plans, subject to certain requirements and factors. The number of shares purchased and the timing of any purchases will depend upon a number of factors, including the price and availability of the Company’s stock and general market conditions. Shares repurchased may be reissued later in connection with employee benefit plans and other general corporate purposes. Second Amendment to Credit Agreement On March 7, 2025, the Company, entered into a Second Amendment to the Credit Agreement among the Company, the domestic subsidiaries of the Company, as guarantors, the lenders party thereto (the “Lenders”), and PNC Bank, National Association, as administrative agent for the Lenders, pursuant to which the Company is now allowed to make restricted payments in an amount not to exceed $30 million in any fiscal year, up from $20 million previously, which increase will allow the Company greater flexibility in paying dividends and funding share repurchases.  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 March 18, 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 8841600 for 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) 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; uncertainties related to a potential trade war, supply disruptions, inflationary environments (including with respect to shipping costs and 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’s ability to successfully remediate its material weakness in internal control over financial reporting 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. 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 Comparative figures are as follows:  SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except shares and per share data)         Three Months Ended December 31,  Years Ended December 31,   2024  2023  2024  2023 Net sales $145,408  $147,241  $565,676  $543,302                  Costs and expenses:                Cost of goods sold  91,448   91,809   345,098   339,755 Selling and administrative expenses  50,020   49,198   199,926   184,060 Interest expense  1,461   2,060   6,358   9,718    142,929   143,067   551,382   533,533 Income before income tax expense  2,479   4,174   14,294   9,769 Income tax expense  390   617   2,290   997 Net income $2,089  $3,557  $12,004  $8,772                  Net income per share:                Basic $0.13  $0.22  $0.75  $0.55 Diluted $0.13  $0.22  $0.73  $0.54                  Weighted average shares outstanding during the period:                Basic  15,675,402   16,010,006   16,008,015   15,968,199 Diluted  16,250,792   16,238,736   16,504,384   16,159,308                  Cash dividends per common share $0.14  $0.14  $0.56  $0.56                    SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share and par value data)      December 31,   2024  2023 ASSETS        Current assets:        Cash and cash equivalents $18,766  $19,896 Accounts receivable  95,092   103,494 Inventories  96,675   98,067 Contract assets  51,688   48,715 Prepaid expenses and other current assets  10,831   9,188 Total current assets  273,052   279,360 Property, plant and equipment, net  41,879   46,890 Operating lease right-of-use assets  15,567   17,909 Deferred tax asset  13,835   12,356 Intangible assets, net  51,137   51,160 Goodwill  2,304   - Other assets  17,360   14,775 Total assets $415,134  $422,450          LIABILITIES AND SHAREHOLDERS’ EQUITY        Current liabilities:        Accounts payable $50,942  $50,520 Other current liabilities  44,367   43,978 Current portion of long-term debt  5,625   4,688 Current portion of acquisition-related contingent liabilities  814   1,403 Total current liabilities  101,748   100,589 Long-term debt  80,410   88,789 Long-term pension liability  13,315   13,284 Long-term acquisition-related contingent liabilities  935   557 Long-term operating lease liabilities  10,486   12,809 Other long-term liabilities  9,384   8,784 Total liabilities  216,278   224,812 Commitments and contingencies        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 - 16,484,921 and 16,564,712 shares, respectively  16   16 Additional paid-in capital  84,060   77,443 Retained earnings  120,139   122,464 Accumulated other comprehensive loss, net of tax  (5,359)  (2,285)Total shareholders’ equity  198,856   197,638 Total liabilities and shareholders’ equity $415,134  $422,450            SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands)      Years Ended December 31,   2024  2023 CASH FLOWS FROM OPERATING ACTIVITIES        Net income $12,004  $8,772 Adjustments to reconcile net income to net cash provided by operating activities:        Depreciation and amortization  13,185   13,995 Inventory write-downs  2,423   2,346 Share-based compensation expense  4,270   3,787 Deferred income tax benefit  (1,581)  (1,635)Change in fair value of acquisition-related contingent liabilities  437   (189)Change in fair value of written put options  653   489 Other, net  739   749 Changes in assets and liabilities, net of acquisition of businesses:        Accounts receivable  7,977   1,051 Contract assets  (3,434)  4,310 Inventories  (1,031)  24,672 Prepaid expenses and other current assets  (2,375)  8,515 Other assets  (2,953)  (2,222)Accounts payable and other current liabilities  1,934   13,310 Payment of acquisition-related contingent liabilities  (686)  (279)Long-term pension liability  433   407 Other long-term liabilities  1,433   851 Net cash provided by operating activities  33,428   78,929          CASH FLOWS FROM INVESTING ACTIVITIES        Additions to property, plant and equipment  (4,435)  (4,963)Acquisition of businesses  (4,000)  - Other investments  -   (545)Net cash used in investing activities  (8,435)  (5,508)         CASH FLOWS FROM FINANCING ACTIVITIES        Borrowings under revolving lines of credit  47,000   6,000 Payments under revolving lines of credit  (50,000)  (64,000)Payment of term loan  (4,687)  (3,750)Debt issuance costs  -   (300)Payment of cash dividends  (9,284)  (9,188)Payment of acquisition-related contingent liabilities  (897)  (553)Proceeds received on exercise of stock options  1,128   175 Shares withheld for taxes  (317)  - Common stock reacquired and retired  (7,417)  - Net cash used in financing activities  (24,474)  (71,616)         Effect of currency exchange rates on cash  (1,649)  369 Net (decrease) increase in cash and cash equivalents  (1,130)  2,174 Cash and cash equivalents balance, beginning of year  19,896   17,722 Cash and cash equivalents balance, end of year $18,766  $19,896            SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES(Unaudited)(In thousands, except shares and per share data)         Three Months Ended December 31,  Years Ended December 31,   2024  2023  2024  2023 Net income $2,089  $3,557  $12,004  $8,772 Interest expense  1,461   2,060   6,358   9,718 Income tax expense  390   617   2,290   997 Depreciation and amortization  3,313   3,664   13,185   13,995 Intangible assets impairment charge  -   -   260   - EBITDA(1) $7,253  $9,898  $34,097  $33,482 EBITDA margin(1)  5.0%  6.7%  6.0%  6.2%                  (1) EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, income tax expense, depreciation and amortization expense and impairment charges. 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 and impairment charges). 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 Year Ended December 31, 2024:                        Net sales $353,314  $119,191  $96,949  $(3,778) $-  $565,676 Cost of goods sold  228,591   73,445   44,742   (1,680)  -   345,098 Gross margin  124,723   45,746   52,207   (2,098)  -   220,578 Selling and administrative expenses  94,384   41,149   42,999   (2,098)  23,492   199,926 Add: Depreciation and amortization  5,948   3,892   2,968   -   377   13,185 Intangible assets impairment charge  -   260   -   -   -   260 Segment EBITDA(1) $36,287  $8,749  $12,176  $-  $(23,115) $34,097                            Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total For the Year Ended December 31, 2023:                        Net sales $342,680  $113,878  $91,500  $(4,756) $-  $543,302 Cost of goods sold  228,053   71,597   42,352   (2,247)  -   339,755 Gross margin  114,627   42,281   49,148   (2,509)  -   203,547 Selling and administrative expenses  88,225   38,209   39,682   (2,509)  20,453   184,060 Add: Depreciation and amortization  6,744   3,925   2,942   -   384   13,995 Segment EBITDA(1) $33,146  $7,997  $12,408  $-  $(20,069) $33,482    Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total For the Three Months Ended December 31, 2024:                        Net sales $92,403  $30,337  $23,527  $(859) $-  $145,408 Cost of goods sold  61,057   20,110   10,667   (386)  -   91,448 Gross margin  31,346   10,227   12,860   (473)  -   53,960 Selling and administrative expenses  23,898   10,218   10,563   (473)  5,814   50,020 Add: Depreciation and amortization  1,435   1,055   722   -   101   3,313 Segment EBITDA(1) $8,883  $1,064  $3,019  $-  $(5,713) $7,253                            Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total For the Three Months Ended December 31, 2023:                        Net sales $97,725  $28,003  $22,565  $(1,052) $-  $147,241 Cost of goods sold  63,561   17,725   10,807   (497)  -   91,596 Gross margin  34,164   10,278   11,758   (555)  -   55,645 Selling and administrative expenses  24,392   9,748   10,180   (555)  5,646   49,411 Add: Depreciation and amortization  1,918   911   732   -   103   3,664 Segment EBITDA(1) $11,690  $1,441  $2,310  $-  $(5,543) $9,898                           (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 Adjusted EBITDA include: interest expense, depreciation and amortization expense, impairment charges and any other items not tied to the operational performance of the segment. Total Segment EBITDA is a non-GAAP financial measure. Please see reconciliation of Adjusted EBITDA included in the Non-GAAP Financial Measures table above.

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