FORM l0-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-5869-1
SUPERIOR UNIFORM GROUP, INC.
Incorporated - Florida I.R.S. Employer Identification No.
11-1385670
10099 Seminole Boulevard
Post Office Box 4002
Seminole, Florida 33775-0002
Telephone No.: 727-397-9611
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of May 1, 2002 the registrant had 7,051,762 common shares
outstanding, which is the registrant's only class of common stock.
Page 1
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
-----------------------------------
2002 2001
------------ ------------
Net sales $ 33,648,226 $ 38,935,615
------------ ------------
Costs and expenses:
Cost of goods sold 22,106,885 25,405,489
Selling and administrative expenses 10,288,007 10,807,268
Interest expense 294,804 527,589
------------ ------------
32,689,696 36,740,346
------------ ------------
Earnings before taxes on income
and extraordinary item 958,530 2,195,269
Taxes on income 350,000 800,000
------------ ------------
Earnings before extraordinary item 608,530 1,395,269
Extraordinary item - loss on early extinguishment
of debt, net of tax benefit of $105,000 187,039 --
------------ ------------
Net earnings $ 421,491 $ 1,395,269
============ ============
Weighted average number of shares out-
standing during the period (Basic) 7,035,154 Shs. 7,123,660 Shs.
(Diluted) 7,092,721 Shs. 7,129,923 Shs.
Basic net earnings per common share:
Earnings before extraordinary item $ 0.09 $ 0.20
Extraordinary item - loss on early extinguishment
of debt, net of tax 0.03 --
------------ ------------
Basic net earnings per common share $ 0.06 $ 0.20
============ ============
Diluted net earnings per common share:
Earnings before extraordinary item $ 0.09 $ 0.20
Extraordinary item - loss on early extinguishment
of debt, net of tax $ 0.03 --
------------ ------------
Diluted net earnings per common share $ 0.06 $ 0.20
============ ============
Dividends per common share $ 0.135 $ 0.135
============ ============
See accompanying notes to condensed consolidated interim financial statements.
Page 2
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
2002 December 31,
(Unaudited) 2001(1)
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 882,193 $ 3,214,592
Accounts receivable and other current assets 24,516,901 28,163,020
Inventories* 46,591,078 48,093,159
------------ ------------
TOTAL CURRENT ASSETS 71,990,172 79,470,771
PROPERTY, PLANT AND EQUIPMENT, net 22,409,222 22,108,935
EXCESS OF COST OVER FAIR VALUE OF
ASSETS ACQUIRED 7,806,492 7,806,492
OTHER ASSETS 3,621,290 3,528,365
------------ ------------
$105,827,176 $112,914,563
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 6,310,091 $ 6,801,799
Other current liabilities 5,944,658 4,852,931
Current portion of long-term debt 1,044,122 2,698,481
------------ ------------
TOTAL CURRENT LIABILITIES 13,298,871 14,353,211
LONG-TERM DEBT, net of current portion 8,280,203 13,549,147
DEFERRED INCOME TAXES 1,815,000 2,250,000
SHAREHOLDERS' EQUITY 82,433,102 82,762,205
------------ ------------
$105,827,176 $112,914,563
============ ============
* Inventories consist of the following:
March 31,
2002 December 31,
(Unaudited) 2001
------------ ------------
Finished goods $ 36,883,956 $ 38,823,900
Work in process 2,541,443 2,000,190
Raw materials 7,165,679 7,269,069
------------ ------------
$ 46,591,078 $ 48,093,159
============ ============
(1) The balance sheet as of December 31, 2001 has been derived from the
audited balance sheet as of that date and has been condensed.
See accompanying notes to condensed consolidated interim financial statements.
Page 3
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED SUMMARY OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
------------------------------------
2002 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings before extraordinary item $ 608,530 $ 1,395,269
Adjustments to reconcile net earnings before extraordinary
item to net cash provided by operating activities:
Extraordinary item (187,039) --
Depreciation and amortization 1,081,378 1,262,179
Deferred income taxes (435,000) 30,000
Changes in assets and liabilities:
Accounts receivable and other current assets 3,646,119 1,769,677
Inventories 1,502,081 3,064,455
Accounts payable (491,708) (164,080)
Other current liabilities 1,211,727 811,765
------------ ------------
Net cash flows provided by operating
activities 6,936,088 8,169,265
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, and equipment (1,785,651) (276,492)
Proceeds from disposals of property, plant and equipment 403,986 1,925
Other assets (92,925) (108,692)
------------ ------------
Net cash used in investing activities (1,474,590) (383,259)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt (6,923,303) (6,831,409)
Payment of cash dividends (949,440) (961,649)
Proceeds received on exercised stock options 78,846 8,125
------------ ------------
Net cash used in financing activities (7,793,897) (7,784,933)
------------ ------------
Net (decrease) increase in cash and cash
equivalents (2,332,399) 1,073
Cash and cash equivalents balance,
beginning of year 3,214,592 188,288
------------ ------------
Cash and cash equivalents balance,
end of period $ 882,193 $ 189,361
============ ============
See accompanying notes to condensed consolidated interim financial statements.
Page 4
SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 -- Summary of Significant Interim Accounting Policies:
a) Basis of presentation
The condensed consolidated interim financial statements include the accounts of
Superior Uniform Group, Inc. and its wholly-owned subsidiary, formed by
contribution of assets in April 2001. Intercompany items have been eliminated
in consolidation. The accompanying unaudited interim financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations. These condensed
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's Report on Form 10-K for
the year ended December 31, 2001, and filed with the Securities and Exchange
Commission. The interim financial information contained herein is not certified
or audited; it reflects all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair
statement of the operating results for the periods presented, stated on a basis
consistent with that of the audited financial statements. The unaudited
financial information included in this report has been reviewed by Deloitte &
Touche LLP, independent certified public accountants and their review report
thereon accompanies this filing; such review was made in accordance with
established professional standards and procedures for such a review. The
results of operations for any interim period are not necessarily indicative of
results to be expected for the full year.
b) Recognition of costs and expenses
Costs and expenses other than product costs are charged to income in interim
periods as incurred, or allocated among interim periods based on an estimate of
time expired, benefit received or activity associated with the periods.
Procedures adopted for assigning specific cost and expense items to an interim
period are consistent with the basis followed by the registrant in reporting
results of operations at annual reporting dates. However, when a specific cost
or expense item charged to expense for annual reporting purposes benefits more
than one interim period, the cost or expense item is allocated to the interim
periods.
c) Inventories
Inventories at interim dates are determined by using both perpetual records and
gross profit calculations.
d) Accounting for income taxes
The provision for income taxes is calculated by using the effective tax rate
anticipated for the full year.
e) Earnings per share
Historical basic per share data is based on the weighted average number of
shares outstanding. Historical diluted per share data is reconciled by adding
to weighted average shares outstanding the dilutive impact of the exercise of
outstanding stock options.
2002 2001
------------ ------------
Earnings used in the computation of basic and diluted earnings per share:
Net earnings before extraordinary items $ 608,530 $ 1,395,269
Extraordinary item -- loss on early extinguishment of debt, net of tax 187,039 --
------------ ------------
Net earnings $ 421,491 $ 1,395,269
------------ ------------
Weighted average shares outstanding 7,035,154 7,123,660
Common stock equivalents 57,567 6,263
------------ ------------
Total weighted average shares outstanding 7,092,721 7,129,923
Earnings per common share:
Basic net earnings before extraordinary item $ 0.09 $ 0.20
Extraordinary item $ 0.03 --
------------ ------------
Net earnings $ 0.06 $ 0.20
============ ============
Diluted net earnings before extraordinary item $ 0.09 $ 0.20
Extraordinary item $ 0.03 --
------------ ------------
Net earnings $ 0.06 $ 0.20
============ ============
Page 5
f) Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
g) Comprehensive Income (Loss)
Total comprehensive income (loss) represents the change in equity during a
period, from sources other than transactions with shareholders and, as such,
includes net earnings. For the Company, the only other component of total
comprehensive income is the change in the fair value of derivatives accounted
for as cash flow hedges.
Three Months Ended March 31,
---------------------------------
2002 2001
------------ ------------
Net earnings $ 421,491 $ 1,395,269
Other comprehensive income (loss):
Transition adjustment (48,000)
Net unrealized gain (loss) during the period related to cash
flow hedges 120,000 (228,000)
------------ ------------
Comprehensive income $ 541,491 $ 1,119,269
============ ============
h) Operating Segments
FAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires disclosures of certain information about operating
segments and about products and services, geographic areas in which the Company
operates, and their major customers. The Company has evaluated the effect of
this new standard and has determined that currently it operates in one segment,
as defined in this statement.
i) Derivative Financial Instruments
The Company has only limited involvement with derivative financial instruments.
The Company has one interest rate swap agreement to hedge against the potential
impact on earnings from increases in market interest rates of a variable rate
term loan. Under the interest rate swap agreement, the Company receives or
makes payments on a monthly basis, based on the differential between a
specified interest rate and one month LIBOR. A term loan of $9,324,325 is
designated as a hedged item for interest rate swaps at March 31, 2002.
This interest rate swap is accounted for as a cash flow hedge in accordance
with FAS 133 and FAS 138 which were implemented as of the beginning of the 2001
fiscal year. As of the report date, all swaps met effectiveness tests, and as
such no gains or losses were included in net income during the quarter related
to hedge ineffectiveness and there was no income adjustment related to any
portion excluded from the assessment of hedge effectiveness. A gain of $120,000
was included in other comprehensive income (loss) for the three months ended
March 31, 2002. A loss of $228,000 was included in other comprehensive income
(loss) for the comparable period in 2001. The original term of the contract is
ten years.
j) Reclassifications
Certain reclassifications to the 2001 financial information have been made to
conform to the 2002 presentation.
NOTE 2 -- Goodwill and Other Intangible Assets:
In June 2001, the FASB issued SFAS No. 141, "Business Combinations," which
eliminates the pooling method of accounting for all business combinations
initiated after June 30, 2001 and addresses the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination. The Company will adopt this accounting standard for business
combinations initiated after June 30, 2001.
As of January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other
Intangible Assets," which addresses the financial accounting and reporting
standards for the acquisition of intangible assets outside of a business
combination and for goodwill and other intangible assets subsequent to their
acquisition. This accounting standard requires that goodwill be separately
disclosed from other intangible assets in the statement of financial position,
and no longer be amortized but tested for impairment on a periodic basis. The
provisions of this accounting standard also require the completion of a
transitional impairment test within six months of adoption, with any
impairments identified treated as a cumulative effect of a change in accounting
principle.
Page 6
In accordance with SFAS No. 142, the Company discontinued the amortization of
goodwill effective January 1, 2002. A reconciliation of previously reported net
income and earnings per share to the amounts adjusted for the exclusion of
goodwill amortization net of the related income tax effect follows:
Three Months
Ended March 31,
---------------------------------
2002 2001
------------ ------------
Reported net earnings $ 421,491 $ 1,395,269
Add: Goodwill amortization, net of tax -- 66,454
------------ ------------
Adjusted net earnings $ 421,491 $ 1,461,723
------------ ------------
Basic earnings per common share:
Reported net earnings $ 0.06 $ 0.20
Goodwill amortization, net of tax -- 0.01
------------ ------------
Adjusted net earnings $ 0.06 $ 0.21
============ ============
Diluted earnings per common share:
Reported net earnings $ 0.06 $ 0.20
Goodwill amortization, net of tax -- 0.01
------------ ------------
Adjusted net earnings $ 0.06 $ 0.21
============ ============
The Company will complete and report the results of the transitional impairment
tests in the Company's June 30, 2002 interim financial statements.
NOTE 3 - Long-Term Debt:
March 31, December 31,
2002 2001
------------ ------------
Note payable to First Union, pursuant to revolving
credit agreement, maturing March 26, 2004 $ -- $ --
6.75% term loan payable to First Union, with monthly
payments of principal and interest,
maturing April 1, 2009 9,324,325 9,580,962
6.65% note payable to MassMutual Life Insurance
Company due $1,666,667 annually through 2005 6,666,666
------------ ------------
9,324,325 16,247,628
Less payments due within one year included
in current liabilities 1,044,122 2,698,481
------------ ------------
$ 8,280,203 $ 13,549,147
============ ============
Page 7
On March 26, 1999, the Company entered into a 3-year credit agreement with
First Union that made available to the Company up to $15,000,000 on a revolving
credit basis. Interest is payable at LIBOR plus 0.60% based upon the one-month
LIBOR rate for U.S. dollar based borrowings (2.47% at March 31, 2002). The
Company pays an annual commitment fee of 0.15% on the average unused portion of
the commitment. The available balance under the credit agreement is reduced by
outstanding letters of credit. As of March 31, 2002, approximately $1,388,000
was outstanding under letters of credit. On March 27, 2001, the Company entered
into an agreement with First Union to extend the maturity of the revolving
credit agreement. The revolving credit agreement matures on March 26, 2004. At
the option of the Company, any outstanding balance on the agreement at that
date will convert to a one-year term loan. The remaining terms of the original
revolving credit agreement remain unchanged. The Company also entered into a
$12,000,000 10-year term loan on March 26, 1999 with the same bank. The term
loan is an amortizing loan, with monthly payments of principal and interest,
maturing on April 1, 2009. The term loan carries a variable interest rate of
LIBOR plus 0.80% based upon the one-month LIBOR rate for U.S.dollar based
borrowings. Concurrent with the execution of the term loan agreement, the
Company entered into an interest rate swap with the bank under which the
Company receives a variable rate of interest on a notional amount equal to the
outstanding balance of the term loan from the bank and the Company pays a fixed
rate of 6.75% on a notional amount equal to the outstanding balance of the term
loan to the bank.
On October 16, 2000, the Company entered into a 5-year term loan with First
Union. The term loan is an amortizing loan, with monthly payments of principal
in the amount of $83,333 plus interest, maturing on November 1, 2005. The term
loan carried a variable interest rate of LIBOR plus 0.80% based upon the
one-month LIBOR rate for U.S. dollar based borrowings. The proceeds of this
term loan were utilized to reduce the outstanding balance on the Company's
revolving credit agreement. Concurrent with the execution of the new term loan
agreement, First Union and the Company amended the March 26, 1999 term loan and
the revolving credit agreement to revise the net worth requirements. The net
worth requirements included below reflect this amendment. This term loan was
paid in full in June 2001.
The credit agreement and the term loans with First Union contain restrictive
provisions concerning debt to net worth ratios, other borrowings, capital
expenditures, rental commitments, tangible net worth ($65,345,000 at March 31,
2002); working capital ratio (2.5:1), fixed charges coverage ratio (2.5:1),
stock repurchases and payment of dividends. At March 31, 2002, under the most
restrictive terms of the debt agreements, retained earnings of approximately
$9,601,000 were available for declaration of dividends. The Company is in full
compliance with all terms, conditions and covenants of the various credit
agreements.
NOTE 4 -- Extraordinary Item:
On March 18, 2002, the Company prepaid its outstanding debt with MassMutual in
the amount of $6,250,000. As a result of this pre-payment, the Company incurred
pre-payment penalties in the amount of $285,000 and wrote-off deferred
financing costs of approximately $7,000. These items are shown net of a tax
benefit of $105,000 for a net extraordinary loss of approximately $187,000 in
the period ended March 31, 2002.
Page 8
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Superior Uniform Group, Inc.
Seminole, Florida
We have reviewed the accompanying condensed consolidated balance sheet of
Superior Uniform Group, Inc. and subsidiary (the "Company") as of March 31,
2002 and the related condensed consolidated summaries of operations and cash
flows for the three-month periods ended March 31, 2002 and 2001. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States
of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Superior Uniform Group, Inc. as of December 31, 2001, and the related
consolidated statements of earnings, shareholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated February
25, 2002, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2001 is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
/s/ Deloitte & Touche LLP
Certified Public Accountants
Tampa, Florida
April 24, 2002
Page 9
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net sales decreased from $38,935,615 for the three months ended March 31, 2001
to $33,648,226 for the three months ended March 31, 2002 as demand has remained
sluggish in the current economic environment.
Cost of goods sold, as a percentage of sales, approximated 65.7% and 65.3%,
respectively for the three months ended March 31, 2002 and 2001.
Selling and administrative expenses, as a percentage of sales, was
approximately 30.6% for the first three months of 2002 as compared to 27.7% for
the first three months of 2001. The increase as a percentage of sales is
primarily attributed to the reduction in sales volume that more than offset the
reductions in selling and administrative expenses in the current quarter.
Additionally, selling and administrative expense in the current quarter
included approximately $360,000 relative to the Company's review of a potential
acquisition that we are no longer pursuing.
Interest expense of $294,804 for the three-month period ended March 31, 2002
decreased 44.1% from $527,589 for the similar period ended March 31, 2001. This
decrease is attributed to lower outstanding borrowings in the current period.
Net earnings before extraordinary item decreased 56.4% to $608,530 for the
three months ended March 31, 2002 as compared to net earnings before
extraordinary item of $1,395,269 for the same period ended March 31, 2001.
Extraordinary item - loss on early extinguishment of debt in the amount of
$187,039, net of tax of $105,000, was recognized in the three-month period
ended March 31, 2002. This loss related to the prepayment of the Company's
outstanding loan with Mass Mutual of approximately $6.2 million. This
pre-payment should result in annualized interest savings of approximately
$400,000 per year.
Net earnings decreased 69.8% to $421,491 for the three months ended March 31,
2002 as compared to net earnings of $1,395,269 for the same period ended
March 31, 2001.
Accounts receivable and other current assets decreased 12.9% from $28,163,020
on December 31, 2001 to $24,516,901 as of March 31, 2002.
Inventories as of March 31, 2002 decreased 3.1% to $46,591,078 from $48,093,159
on December 31, 2001.
Accounts payable decreased 7.2% from $6,801,799 on December 31, 2001 to
$6,310,091 on March 31, 2002.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $2,332,399 from $3,214,592 on December
31, 2001 to $882,193 as of March 31, 2002. Additionally, total borrowings under
long-term debt agreements decreased by $6,923,303 from $16,247,628 on December
31, 2001 to $9,324,325 on March 31, 2002. The Company utilized cash on hand and
cash generated from operations to prepay approximately $6.3 million of
outstanding borrowings during the current quarter. The Company has operated
without hindrance or restraint with its present working capital, as income
generated from operations and outside sources of credit, both trade and
institutional, have been more than adequate.
In the foreseeable future, the Company will continue its ongoing capital
expenditure program designed to maintain and improve its facilities. The
Company at all times evaluates its capital expenditure program in light of
prevailing economic conditions. The Company believes that its cash flow from
operating activities together with other capital resources and funds from
credit sources will be adequate to meet all of its funding requirements for the
remainder of the year and for the foreseeable future.
During the three months ended March 31, 2002 and 2001, respectively, the
Company paid cash dividends of $949,440 and $961,649. The Company anticipates
that it will continue to pay dividends and that it will reacquire and retire
additional shares of its common stock in the future as financial conditions
permit.
Forward-Looking Statements: Statements contained in this Quarterly Report
contain certain forward-looking statements that involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are the following - general economic conditions in the areas of the
United States in which the Company's customers are located including the
current economic slowdown; changes in the healthcare, resort and commercial
industries where uniforms and service apparel are worn; the impact of
competition; and the availability of manufacturing materials.
Page 10
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from changes in interest rates,
which may adversely affect its results of operations and financial condition.
The Company seeks to minimize the risks from these interest rates when
considered appropriate, through the limited use of derivative financial
instruments. The Company's policy is to not use financial instruments for
trading or other speculative purposes and is not a party to any leveraged
financial instruments. The Company has debt obligations with variable interest
rates tied to LIBOR which are described in "Liquidity and Capital Resources" as
well as Note 1(i) of the Notes to Consolidated Financial Statements. The
Company estimates that a hypothetical increase in interest rates of 1% would
have resulted in no change in the Company's interest expense for the quarter
ended March 31, 2002.
The Company has one interest rate swap agreement to hedge against the
potential impact on earnings from increases in market interest rates of a
variable rate term loan. Under the interest rate swap agreement, the Company
receives or makes payments on a monthly basis, based on the differential
between a specified interest rate and one month LIBOR. A term loan of
$9,324,325 is designated as a hedged item for interest rate swaps at March 31,
2002. This interest rate swap is accounted for as a cash flow hedge in
accordance with FAS 133 and FAS 138 which were implemented as of the beginning
of the fiscal year 2001. As of the report date, the swap met the effectiveness
test, and as such no gains or losses were included in net income during the
quarter related to hedge ineffectiveness and there was no income adjustment
related to any portion excluded from the assessment of hedge effectiveness. A
gain of $120,000 was included in other comprehensive income (loss) for the
three months ended March 31, 2002. A loss of $228,000 was included in other
comprehensive income (loss) for the comparable period in 2001. The original
term of the contract is ten years.
The Company is also exposed to changes in prevailing market interest
rates affecting the return on its investments but does not consider this
interest rate market risk exposure to be material to its financial condition or
results of operations. The Company invests primarily in highly liquid debt
instruments with strong credit ratings and short-term (less than three months)
maturities.
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults Upon Senior Securities
Inapplicable.
ITEM 4. Submission of Matters to a Vote of Security-Holders
None.
ITEM 5. Other Information
Inapplicable.
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits
15 Letter from Deloitte & Touche, LLP re: Unaudited
Interim Financial Information.
b) Reports on Form 8-K
None.
Page 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 7, 2002 SUPERIOR UNIFORM GROUP, INC.
By /s/ Gerald M. Benstock
---------------------------------------
Gerald M. Benstock
Chairman and Chief Executive Officer
By /s/ Andrew D. Demott, Jr.
---------------------------------------
Andrew D. Demott, Jr.
Sr. Vice President, CFO, Treasurer
and Principal Accounting Officer
Page 12