Exhibit 99.1
NEWS RELEASE
Superior Uniform Group, Inc.
An American Stock Exchange Listed Company
10055 Seminole Boulevard
Seminole, Florida 33772-2539
Telephone (727) 397-9611
Fax (727) 803-9623
| | |
| Contact: Andrew D. Demott, Jr., CFO | | FOR IMMEDIATE RELEASE |
| (727) 803-7135 | | |
SUPERIOR UNIFORM GROUP REPORTS INCREASED EARNINGS FOR THE FIRST
QUARTER OF 2006
SEMINOLE, Florida - April 27, 2006 – Michael Benstock, Chief Executive Officer of Superior Uniform Group, Inc. (AMEX: SGC), manufacturer of uniforms, career apparel and accessories, today announced that for the first quarter ended March 31, 2006, net earnings were $552,226 or $.08 per share (diluted) compared to 2005 first quarter earnings of $139,443 or $.02 per share (diluted). Net sales for the 2006 first quarter were $31,136,543 compared with 2005 first quarter sales of $31,857,089.
In making the earnings announcement, Mr. Benstock stated: “We were very pleased to see the increased earnings in the current quarter. The Company adopted Statement of Financial Accounting Standards No. 123 (R) Share-Based Payment effective January 1, 2006. As a result, the Company recognized a $339,000 pre-tax expense for stock options and share-based awards issued to employees in the first quarter of 2006. Without this charge, the Company would have earned $.12 per share (diluted) in the first quarter of 2006. If the Company had adopted this standard in 2005, the first quarter 2005 loss would have been ($.06) per share (diluted) in comparison with $.08 per share (diluted) earned in the first quarter 2006. This increase in earnings is attributed to significant cost savings measures that we instituted in 2005. We are seeing significant savings from the consolidation of the vast majority of our distribution operations into our central warehouse facility in Eudora, Arkansas. We were able to reduce selling and administrative expenses by approximately $947,000, despite the $339,000 expense recognized for options and share-based payments, as discussed above. Additionally, the first
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quarter of 2005 included approximately $375,000 in increased overtime to process orders during the implementation of the Company’s new Warehouse Management System. This system is now operating effectively and is partially responsible for the cost savings discussed above. We are seeing increased opportunities from our target markets in hospitality, healthcare and government services and we are rolling out several major accounts in these markets in the second quarter. Our balance sheet remains very strong, as we have generated in excess of $5.3 million in cash from operations in the current quarter, as compared to net cash used in operations of approximately $400,000 in the prior year first quarter. We finished the quarter with over $10 million in cash on hand. We remain committed to the outstanding share repurchase program and have reacquired approximately 167,000 shares of our common stock in the first quarter of 2006.
“The Company is being recognized in the uniform marketplace and recently captured the most awards at the ‘Image of the Year’ Ceremony for the National Association of Uniform Manufacturers and Distributors (NAUMD) at their 73rd Annual Convention held recently in Las Vegas. We took home two ‘Image of the Year’ awards for our national apparel programs for Holiday Inn® Hotels & Resorts and Allied Barton Security Services. We also received an ‘Outstanding Achievement’ award for our Northwestern Memorial Hospital (Chicago) medical uniform program. We have spent the last several years building a very strong foundation in our marketing, sales and distribution capabilities. Our current focus is on business process improvements in our customer care areas with major initiatives including Customer First programs designed to improve the customer experience for all of our customers. We are gratified with the results we achieved in the first quarter of 2006. However, we expect even better results for the balance of 2006 and beyond.”
Superior Uniform Group®, through its Signature marketing brands – Fashion Seal®, Fashion Seal Healthcare™, Martin’s®, Worklon®, Sope Creek® and UniVogue™ – manufactures and sells a wide range of uniforms, image apparel and accessories. Superior specializes in managing comprehensive uniform programs, and is dedicated to servicing the Healthcare, Hospitality, Restaurant/Food Services, Retail Employee I.D., Governmental/Public Safety, Entertainment, Commercial, Transportation, Cleanroom, Corporate Identity and Resortwear markets. For more information, please visit www.superioruniformgroup.com.
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Statements contained in this press release that 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.
SUPERIOR UNIFORM GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS ENDED MARCH 31,
(Unaudited)
| | | | | | |
| | | 2006 | | 2005 |
Net sales | | $ | 31,136,543 | | $ | 31,857,089 |
| | | | | | |
Costs and expenses: | | | | | | |
Cost of goods sold | | | 21,031,410 | | | 21,515,614 |
Selling and administrative expenses | | | 9,032,825 | | | 9,980,168 |
Interest expense | | | 120,082 | | | 141,864 |
| | | | | | |
| | | 30,184,317 | | | 31,637,646 |
| | | | | | |
Earnings before taxes on income | | | 952,226 | | | 219,443 |
Taxes on income | | | 400,000 | | | 80,000 |
| | | | | | |
Net earnings | | $ | 552,226 | | $ | 139,443 |
| | | | | | |
Basic net earnings per common share | | $ | 0.08 | | $ | 0.02 |
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Diluted net earnings per common share | | $ | 0.08 | | $ | 0.02 |
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Dividends per common share | | $ | 0.135 | | $ | 0.135 |
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SUPERIOR UNIFORM GROUP, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31,
(Unaudited)
| | | | | | | | |
| | | 2006 | | | 2005 | |
| ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 10,107,484 | | | $ | 151,821 | |
Accounts receivable and other current assets | | | 27,676,739 | | | | 31,408,467 | |
Inventories | | | 35,412,630 | | | | 47,714,968 | |
| | | | | | | | |
TOTAL CURRENT ASSETS | | | 73,196,853 | | | | 79,275,256 | |
| | |
PROPERTY, PLANT AND EQUIPMENT, NET | | | 17,266,675 | | | | 21,725,009 | |
GOODWILL | | | 1,617,411 | | | | 1,617,411 | |
OTHER INTANGIBLE ASSETS | | | 1,190,794 | | | | 1,428,952 | |
OTHER ASSETS | | | 2,809,800 | | | | 7,425,615 | |
| | | | | | | | |
| | $ | 96,081,533 | | | $ | 111,472,243 | |
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| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Accounts payable | | $ | 6,794,405 | | | $ | 10,824,894 | |
Accrued expenses | | | 3,375,485 | | | | 4,097,143 | |
Current portion of long-term debt | | | 1,706,013 | | | | 1,945,386 | |
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TOTAL CURRENT LIABILITIES | | | 11,875,903 | | | | 16,867,423 | |
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LONG-TERM DEBT | | | 3,295,769 | | | | 7,298,781 | |
DEFERRED INCOME TAXES | | | 800,000 | | | | 855,000 | |
SHAREHOLDERS’ EQUITY: | | | | | | | | |
Preferred stock, $1 par value - authorized
300,000 shares (none issued) | | | — | | | | — | |
Common stock, $.001 par value - authorized
50,000,000 shares; issued and outstanding
7,091,214, and 7,450,937, respectively | | | 7,091 | | | | 7,451 | |
Additional paid-in capital | | | 15,713,180 | | | | 15,396,596 | |
Retained earnings | | | 64,447,590 | | | | 71,259,992 | |
Cumulative Comprehensive Income (Loss) | | | (58,000 | ) | | | (213,000 | ) |
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TOTAL SHAREHOLDERS’ EQUITY | | | 80,109,861 | | | | 86,451,039 | |
| | | | | | | | |
| | $ | 96,081,533 | | | $ | 111,472,243 | |
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