Superior Group Of Companies Inc (SGC) Q2 2024 Earnings Call Highlights: Revenue Growth Amidst ...

GuruFocus News
3 min read

In This Article:

  • Revenue: $132 million, up 2% over the prior-year period.

  • EBITDA: $5.6 million, down from $7.4 million a year earlier; margin of 4.2% compared to 5.8%.

  • Gross Margin: Expanded 170 basis points to 38.5%.

  • SG&A Expenses: $48 million, up from $43 million a year earlier.

  • Diluted EPS: $0.04, compared to $0.08 in the prior-year quarter.

  • Operating Cash Flow: $16 million year-to-date.

  • Net Income: $600,000 for the second quarter.

  • Interest Expense: $1.5 million, improved from $2.6 million in the year-earlier quarter.

  • Debt Reduction: Reduced debt outstanding by $12 million during the quarter.

  • Healthcare Apparel Revenue: Down 5% to $27 million.

  • Branded Products Revenue: Up 2% to $81 million.

  • Contact Centers Revenue: Grew 9% to $25 million.

  • Full Year Revenue Outlook: $563 million to $570 million.

  • Full Year EPS Outlook: $0.73 to $0.79 per diluted share.

Release Date: August 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Superior Group Of Companies Inc (NASDAQ:SGC) achieved a 2% increase in consolidated revenues, reaching $132 million in the second quarter.

  • The company maintained a strong net leverage ratio, enabling strategic investments and readiness for M&A opportunities.

  • Contact Centers segment showed a 9% year-over-year revenue growth, indicating strong demand and potential for future expansion.

  • The company reported a 170 basis point expansion in consolidated gross margin, reaching 38.5%, driven by improved supply chain costs and pricing.

  • SGC reduced its debt outstanding by $12 million during the quarter, improving its financial position.

Negative Points

  • EBITDA decreased to $5.6 million from $7.4 million in the prior-year period, with a margin decline from 5.8% to 4.2%.

  • Healthcare Apparel segment experienced a 5% sales decline due to softness in store-based uniform wholesale business and supply chain issues.

  • SG&A expenses increased to $48 million, up from $43 million a year earlier, driven by higher sales-related compensation and marketing expenses.

  • Second quarter diluted EPS dropped to $0.04 from $0.08 in the prior-year quarter, reflecting lower profitability.

  • Supply chain delays impacted revenue recognition, with several million dollars of revenue pushed to the third quarter.

Q & A Highlights

Q: Can you provide details on the supply chain delays and their impact on revenue? A: Mike Koempel, CFO, explained that supply chain delays were due to reduced supplier capacity and increased demand, particularly from China. This affected finished goods and fabric supply, impacting revenue by a few million dollars. The delayed revenue is expected to be recognized in the third quarter.

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