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| 8-K - FORM 8-K - SUPERIOR GROUP OF COMPANIES, INC. | sgc20170223_8k.htm |
EXHIBIT 99.1
NEWS RELEASE
Superior Uniform Group, Inc.
A NASDAQ Listed Company: SGC
10055 Seminole Blvd.
Seminole, FL 33772-2539
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Contact: |
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Andrew D. Demott, Jr., CFO |
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Hala Elsherbini, Halliburton Investor Relations |
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(727) 803-7135 |
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(972) 458-8000 |
For Immediate Release
SUPERIOR UNIFORM GROUP, INC. REPORTS OPERATING RESULTS FOR 2016
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Net Sales Increase 20.1 percent |
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Net Income Increases 12.0 percent |
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17th Consecutive Quarter with Sales Increase |
SEMINOLE, Fla. - February 23, 2017 – Superior Uniform Group, Inc. (NASDAQ: SGC), today announced its fourth quarter and year-end operating results for 2016.
The Company announced that for the year ended December 31, 2016, net sales increased 20.1 percent to $252.6 million, compared to 2015 net sales of $210.3 million. Net income for the year ended December 31, 2016 was $14.6 million, or $0.98 per diluted share, compared to $13.1 million, or $0.90 per diluted share, reported for the year ended December 31, 2015.
ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of accounting for share-based payment transactions, including the income tax consequences. During the quarter ended December 31, 2016, we elected to early adopt the ASU, effective January 1, 2016, which resulted in retrospective adjustments to the 2016 quarterly financial statements. Net income for 2016 was positively impacted by $0.9 million as a result of this change in accounting with $0.4 million of this change being reflected in the fourth quarter results. Conversely, as a result of the BAMKO acquisition in March, our 2016 net income was negatively impacted by $1.1 million in pre-tax acquisition related expenses.
Net sales for the fourth quarter ended December 31, 2016 increased 21.6 percent to $64.7 million, compared to 2015 fourth quarter net sales of $53.2 million. This represents our 17th consecutive quarter of year-over-year sales increases. Net income for the fourth quarter ended December 31, 2016 was $4.4 million, or $0.30 per diluted share, compared to net income of $3.4 million or $0.23 per diluted share, reported for the fourth quarter ended December 31, 2015.
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Michael Benstock, chief executive officer, commented, “We are pleased to report solid gains for both top and bottom line performance for fiscal 2016. Net income increased 12.0 percent on a net sales gain of 20.1 percent. Results like these are only possible through the hard work and disciplined focus of our teams. We also laid the groundwork for long-term future success by strengthening our competitive position and broadening our growth prospects. During 2016, we completed the acquisition of BAMKO to give us a strong foothold in the promotional products and branded merchandise market. We opened a new factory in Haiti to improve our competitive position, and we completed our new call center facility in El Salvador that essentially triples our capacity there.
“Our updated guidance relative to net sales is as follows: Over the next three to five years on average, we expect organic growth in our uniform segment will exceed 6 percent, our promotional products segment will exceed 15 percent organic growth and our remote staffing solutions segment will generate growth of $3.0 million to $3.5 million per year. Overall, we expect average organic growth in excess of 8 percent. We intend to supplement our organic growth with acquisitions in the promotional products segment each year while continuing to pursue acquisitions in the uniform segment as they become available.”
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.
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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 for 2016 and 2015 are as follows:
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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
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YEARS ENDED DECEMBER 31, |
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2016 |
2015 |
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Net sales |
$ | 252,596,000 | $ | 210,317,000 | ||||
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Costs and expenses: |
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Cost of goods sold |
165,614,000 | 138,884,000 | ||||||
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Selling and administrative expenses |
66,396,000 | 52,018,000 | ||||||
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Interest expense |
688,000 | 519,000 | ||||||
| 232,698,000 | 191,421,000 | |||||||
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Income before taxes on income |
19,898,000 | 18,896,000 | ||||||
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Income tax expense |
5,260,000 | 5,830,000 | ||||||
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Net income |
$ | 14,638,000 | $ | 13,066,000 | ||||
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Weighted average number of shares outstanding during the period |
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(Basic) |
14,082,243 | 13,761,009 | ||||||
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(Diluted) |
14,897,489 | 14,578,644 | ||||||
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Per Share Data: |
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Basic |
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Net earnings |
$ | 1.04 | $ | 0.95 | ||||
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Diluted |
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Net earnings |
$ | 0.98 | $ | 0.90 | ||||
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Cash dividends per common share |
$ | 0.340 | $ | 0.315 | ||||
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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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YEARS ENDED DECEMBER 31, |
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ASSETS |
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2016 |
2015 |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ | 3,649,000 | $ | 1,036,000 | ||||
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Accounts receivable, less allowance for doubtful accounts of $1,276,000 and $848,000, respectively |
41,823,000 | 29,914,000 | ||||||
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Accounts receivable - other |
3,085,000 | 3,262,000 | ||||||
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Inventories |
69,240,000 | 63,573,000 | ||||||
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Prepaid expenses and other current assets |
7,214,000 | 6,214,000 | ||||||
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TOTAL CURRENT ASSETS |
125,011,000 | 103,999,000 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, NET |
27,533,000 | 22,524,000 | ||||||
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OTHER INTANGIBLE ASSETS, NET |
23,238,000 | 14,222,000 | ||||||
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GOODWILL |
11,269,000 | 4,135,000 | ||||||
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DEFERRED INCOME TAXES |
6,800,000 | 4,980,000 | ||||||
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OTHER ASSETS |
2,997,000 | 1,871,000 | ||||||
| $ | 196,848,000 | $ | 151,731,000 | |||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
$ | 13,507,000 | $ | 11,775,000 | ||||
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Other current liabilities |
10,716,000 | 8,307,000 | ||||||
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Current portion of long-term debt |
5,893,000 | 2,750,000 | ||||||
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Current portion of acquisition-related contigent liability |
1,788,000 | 1,787,000 | ||||||
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TOTAL CURRENT LIABILITIES |
31,904,000 | 24,619,000 | ||||||
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LONG-TERM DEBT |
36,227,000 | 21,131,000 | ||||||
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LONG-TERM PENSION LIABILITY |
9,467,000 | 8,925,000 | ||||||
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LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITY |
7,238,000 | 3,866,000 | ||||||
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OTHER LONG-TERM LIABILITIES |
1,462,000 | 500,000 | ||||||
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COMMITMENTS AND CONTINGENCIES (NOTE 11) |
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SHAREHOLDERS' EQUITY: |
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Preferred stock, $.001 par value - authorized 300,000 shares (none issued) |
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Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding - 14,513,207 and 13,917,465, respectively. |
15,000 | 14,000 | ||||||
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Additional paid-in capital |
42,416,000 | 33,806,000 | ||||||
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Retained earnings |
74,283,000 | 65,392,000 | ||||||
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Accumulated other comprehensive income (loss), net of tax: |
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Pensions |
(6,258,000 | ) | (6,448,000 | ) | ||||
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Cash flow hedges |
21,000 | (74,000 | ) | |||||
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Foreign Currency Translation Adjustment |
73,000 | - | ||||||
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TOTAL SHAREHOLDERS' EQUITY |
110,550,000 | 92,690,000 | ||||||
| $ | 196,848,000 | $ | 151,731,000 | |||||
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SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
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2016 |
2015 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income |
$ | 14,638,000 | $ | 13,066,000 | ||||
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Adjustments to reconcile net income to net cash provided from operating activities: |
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Depreciation and amortization |
4,935,000 | 3,873,000 | ||||||
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Provision for bad debts - accounts receivable |
512,000 | 266,000 | ||||||
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Share-based compensation expense |
1,638,000 | 1,361,000 | ||||||
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Deferred income tax (benefit) provision |
(1,940,000 | ) | (1,216,000 | ) | ||||
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Gain on foreign currency transactions |
(264,000 | ) | - | |||||
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Gain on disposals of property, plant and equipment |
- | (1,000 | ) | |||||
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Adjustment to acquisition-related contingent liability |
(200,000 | ) | (200,000 | ) | ||||
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Accretion of acquisition-related contingent liability |
169,000 | 119,000 | ||||||
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Excess tax benefit from exercise of stock options and SARS |
- | 1,575,000 | ||||||
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Changes in assets and liabilities, net of acquisition of business: |
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Accounts receivable - trade |
(7,244,000 | ) | (2,224,000 | ) | ||||
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Accounts receivable - other |
177,000 | 873,000 | ||||||
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Inventories |
(5,427,000 | ) | (5,291,000 | ) | ||||
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Prepaid expenses and other current assets |
2,203,000 | (1,717,000 | ) | |||||
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Other assets |
(1,029,000 | ) | (1,817,000 | ) | ||||
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Accounts payable |
87,000 | 2,069,000 | ||||||
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Other current liabilities |
1,943,000 | (631,000 | ) | |||||
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Long-term pension liability |
829,000 | (112,000 | ) | |||||
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Other long-term liabilities |
962,000 | (80,000 | ) | |||||
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Net cash provided from operating activities |
11,989,000 | 9,913,000 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Additions to property, plant and equipment |
(7,385,000 | ) | (8,069,000 | ) | ||||
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Proceeds from disposals of property, plant and equipment |
- | 24,000 | ||||||
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Acquisition of business, net of acquired cash |
(15,161,000 | ) | - | |||||
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Net cash used in investing activities |
(22,546,000 | ) | (8,045,000 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from long-term debt |
125,067,000 | 67,345,000 | ||||||
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Repayment of long-term debt |
(106,827,000 | ) | (68,416,000 | ) | ||||
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Payment of cash dividends |
(4,707,000 | ) | (4,255,000 | ) | ||||
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Payment of acquisition-related contingent liability |
(1,800,000 | ) | (1,200,000 | ) | ||||
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Proceeds received on exercise of stock options |
1,504,000 | 1,840,000 | ||||||
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Tax benefit from vesting of acquisition related restricted stock |
990,000 | - | ||||||
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Tax withholdings on exercise of stock rights |
(405,000 | ) | (732,000 | ) | ||||
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Common stock reqcquired and retired |
(714,000 | ) | - | |||||
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Net cash provided from (used in) financing activities |
13,108,000 | (5,418,000 | ) | |||||
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Effect of exchange rates on cash |
62,000 | - | ||||||
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Net increase (decrease) in cash and cash equivalents |
2,613,000 | (3,550,000 | ) | |||||
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Cash and cash equivalents balance, beginning of year |
1,036,000 | 4,586,000 | ||||||
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Cash and cash equivalents balance, end of year |
$ | 3,649,000 | $ | 1,036,000 | ||||