SGC - Earnings call transcript Q4 2021 | Superior Group of Companies, Inc.

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Operator

Good day, and welcome to Superior Group of Companies Fourth Quarter and Fiscal Year 2021 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] With us today are Michael Benstock, the company’s Chief Executive Officer; and Andy Demott, Chief Operating Officer and Chief Financial Officer. After the speakers’ remarks, there will be a Q&A session. [Operator Instructions] This call is being recorded and your participation implies that you agree to this.

agree, your not do you please line. disconnect If

go over Hala Part Elsherbini, I’ll statement. who turn Managing Ms. call the Please Harbor Safe Three Now Senior to Director read the ma’am. ahead, will Advisors, of

Hala Elsherbini

includes XXXX and Thank Reform XXXX, estimates contain outlook, statements on all you, COVID-XX of the such Such hope, contract Act projections, and the the and the within the Securities about may as the company’s Act of think, of XXXX, Companies, on forward-looking inventory, the service of supply Exchange and and meaning upon own business, regulations variations at This believe, the manufacturing Group Securities which and call Litigation such and issued morning. capacity are words company, statements anticipate, good facilities, such of Words chain, management’s capacity Private statements assumptions. conference and demand. company’s Securities identify Superior expectations, Act manufacturing similar impact will, and current expressions including rules of of thereunder. expect, statements, based customer forward-looking

factors the the quarter Report December September the on filed other the services Forward-looking to that XX-K and XXXX, from sold the information, ended statements. worn, company’s all cause herein the to, and to for forward-looking or suggested uniforms except successfully by as impact of herein differ known ability are are competition, where products located, with to integrate investors, cautioned whether future are are reliance the that materially the company’s the changes evaluating the otherwise, are in actual on the are urged update conform where used; carefully customers and to growth where XX, Michael. call statements forward-looking in center in Form company’s promotional undertake X-K XXXX, company made future suppliers, events markets acquisitions, statements following; and the effect these note comparisons employees; uncertainties of uncertainties place including in company’s that, may potential And materials, availability Please on and as changes economic and not results the makes XXXX, does contained Annual and the and today for unknown operations in periodic risks and disclosed uncertainties as forward-looking States include, to well following customers, recently. XX, consider ended Exchange markets, otherwise general Form COVID-XX manufacturing forward-looking areas to unless of with Commission, filings and Shareholders, of such are business, Such required the law. crisis the our as Report involve year on company’s limited in statements. Securities will that The readers which the period not result risks the consumption of of Quarterly XX-Q the in the risks statements expectations, by but the call to those operations, results over the turn and noted. management or not I’ll United global the U.S. to the new and relate conditions to the corresponding a undue

Michael Benstock

highlights fiscal will current the review Good thanks quarter Hala. discuss call. year performance strategic us President; Officer; President, Andy XXXX our Phil operational you, initiatives, for and Leide, fourth provide that Himmelstein, prepared Chief update. in I participate joining Q&A session TOG’s and our remarks. on Thank Dominic BAMKO’s After and Jake the Koosed, an touch morning, our everybody, earnings and for will Today, following environment. will financial Strategy macro

that guidance, $XXX sales. reaching sales exceeded million XXXX report in to net we pleased fiscal very We’re our

perspective, line line guidance top a results. fourth we bottom you cost impacted intensified move which we through pressures our As the end other increased quarter, the during From of inflationary recall, and twice as XXXX.

Andy non-cash will more inflation of unusual mitigate of cost we control impact charges, in well. pricing detail incurred that as we a discuss actions Additionally, measures important his in and took to range which to future the remarks. note cost It’s

As logistic we we’re our Investments technology seeing and move progress historic now resume normalized improved and and past business XXXX lapping activity into revenue finished processes, XXXX. expect we to comparisons in comps, as people, market challenges, product uncertainty, some less XXXX innovation to able and and excel market chain supply withstand by our ability uncertainty. marked which competitors labor through underscore were to was scarcity mitigate. and

who adding branded BAMKO combination from decoration, beyond XX-plus brands. I’d established joined and that to develops force and and corporate awards, expand increases incentives While the HPI, This In engraving Sutter’s appointed We many. elevate leader year some like world’s offerings so team resilience Specialties for two of custom entrepreneurial Officer in the now executed with Design representatives Chief the integrate biggest significant of extensive to spirit passion we yielding challenges, industry achievements sales further programs Design merchandise acquisitions reach exponentially greater and to bringing faced reps of and brings Gifts C-suite. By at and integration our doing branded options in in his welcoming first, Phil key our role four HPI and we who astute the Strategy Koosed, were highlight for sales vertically wins. Mill than the accomplished second opportunities December, are and In and XXXX. Gifts production, during BAMKO, January sales our vision, the announced in-house also clients. uncovering these capabilities recognition uniforms quarter, unique we By our XXXX, and teams. our and marketing

to targeted competencies space. further regular and value by significant share shareholders we focus on and in dividend and our the organization uniform preponderance the increase in particular believe our industries. will developing market it’s a May, core to uniform vertical We us. with approach is our cash of more taking branded increased the headway investments dividend XXXX. We’re approach strategic an infrastructure In deeper made focused a our since proposition consistently of quarterly been expenditures behind important XX%. paid Overall, our The piece

Magazine’s We positioned are is enthusiastic also a to in America’s list. We enter we’re do second XXXX was proud year included Small are XXXX. ranking. against we This be Fastest-Growing including on a and named in Forbes out ranked And well row Companies. to XXX XX very list. mention Magazine Small-Cap Company to accolades the recognition Best the Companies number to as recent Top some SGC are receive, want competitors Fortune XXX recently we of

dedicated XXXX, success. building drive our thanks received Our our points team many organization who recognition brand of during to

to segment some speak let’s highlights. Now,

for increased uniform XXXX, including PPE. revenues core X.X% Our X%, and excluding decreased fiscal XXXX over PPE sales

quarter rather, Our uncertainty the fourth but of XXXX. increased though latter the variant sales. strength the quarter related XX.X% slowdown elevated early on, challenges portion chain spread to Interestingly, second compared customer sales Of XXXX much core are fourth we quarter to taste of activity Omicron of slower drive to quarter, quarter. the in hiring in showed issues non-PPE uniform half the the activity during late appear accelerating supply uniform and seeing the in customer rebounding

the we forward, year. sales uniform and we As throughout continue are core grow to to move expect our optimistic

that few that competitors We exiting that space healthcare are significant in our customers consolidations customers. that any wear proposition needs uniform the competitors in competitors. value will choices who of a the uniforms of seeing apparel narrow work widest field and our we of Keep have greatest with weekend for is space competition the few with of two mind HPI competes than the the lately in our segment offer range a than more to

wins and manufacture second beneficial, revenue as both quarter our in later that, of opportunities merchandise In XXXX institutional proving non-healthcare uniforms. will that as translate and I in differentiated. increase design, healthcare sales we branded and apparel is The the fashion distribute branded big this yielding and to We’re to said uniforms HPI year. force earlier, very as identity integration well significant

branded our quarter both XX% sales for XXXX were almost excluding sales. year a full and exceptional fourth Net approximately by growth. XX%, PPE driven by million, as fastest-growing excluding revenue strong by for Our the compared PPE growing grew sales, trajectory organic when sales XXXX, compared segment merchandise and $XX the perpetuating quarter to fourth inorganic to XXXX XX%

Gurus, Remote breaking Staffing a year-over-year. year Solution terms segment. reporting TOG The for revenue a record posted of our Office growth, in to net XX% Turning sales increase

agents add an pace to the demand continue from at new meet robust new unprecedented and We most to customers. existing

to want to X,XXX meet customer promotion culture XXXX, employees. drives reputation we during excellent promotions, than the celebrated note Our nearly XXX drives I with more business’s retention growth high exceptional added rates. needs internal the

operating across labor highlights to environment These to customers. headwinds globe excited continuously guest operational the as season the a began are we financial Andy? market and facing, costs to you welcomed [ph] We are bottom Vice these recent as chain logistics I also about impact for challenges the and and Republic will now impacts for into currently taking issues. freight most more And over see costs we all team. more onto rising supply for continued are President the Dominican opportunities. scarcity, in ourselves The line about working dynamic discuss and everybody. call Andy including the moment. pragmatic the share, We and expansion That the of companies Human Resources well present a turn mitigate our detail.

Andrew Demott

overall Arkansas well $XXX.X sales in Eudora, due shore robotics in and of we ended of X.X% The We quarter largely CID manufacturing our the reported good to Haiti. on Thank sales automation a and financially. were facility global the PPE robotics capital footing, This capacity, additional events. decline Consolidated across in reduce number at morning, was our fourth Dallas capacity million manufacturing QX Financially, center, costs you, third last $XXX our the operationally teams completed through to distribution drive to investments XXXX. improve completed million, and enhancements, upgraded and managing compared macro includes and our Overall, year year. our Michael, near executed technology and nearly of both and everyone. center QX service. net effects our facilities manufacturing distribution expand customer higher while strong the and

lower expected, of while and included sales XXXX this As million, of in trended $XX.X QX QX PPE year $X.X million.

sales, these our net sales by Excluding XX.X%. PPE consolidated increased

net X% or $XX.X $XXX million, sales exceeded the up consolidated expectations For our to year, million.

sales net for increased XX%. PPE, the by Excluding year

XX% sales by the million normalized more XXXX. the million. legacy declined in We net PPE sales to for XXXX quarter, saw products to of $XX.X versus results spike segment our sales the levels $XX.X returned to Turning PPE QX of compared million uniforms-related $X fourth

across sales, Excluding to uncertainty. quarter. a PPE segment slowdown and overall we see as our in this did due increased healthcare market mid-fourth fourth activity quarter, the the And Michael by non-healthcare XX.X% in both net sales mentioned, uniforms

up PPE sales with QX product to in had sales changes. consolidated continued that net were sales due produce to compared with of promotional impressive almost than And quarter, Our year. PPE million XX% up to $XX XX.X% XXXX quarter, QX basis, XX% factors total million of Note for compared was last the fourth million, ended double-digit to a XX% period the year-over-year. in million. excluding margin our the growth quarter gross in $XX number On XXXX in addition variance sales to in same high another TOG $XX.X less mix was QX the $X report. a very the sales, to for product of

take the PPE – products, PPE we of to million. was it markdowns in remaining determined necessary First, on of fourth $X.X we the to quarter saturation that due that inventory market some

million total, of and in reminder, in sold we a $XXX XXXX. almost as PPE Just XXXX

and alone significantly in were was Additionally, QX last $XXX,XXX XXXX. XXXX air Airfreight versus year. logistics higher in higher freight costs

in Our last year. fourth a consolidated – health SG&A as the of expenses total sales, plan SG&A XX.X% and was quarter XX% versus percentage expenses

for quarter income quarter $XX.X $X the the Our of for XXXX. operations for million fourth versus was fourth million

$X.XX Our PPE the $X X.X% the Net prior compared $X.XX compared or diluted to was earnings quarter. approximately in per was operating or share X.X% share per diluted income by to inventory QX $XX.X pension This of write-down XXXX. million of margin year in million, our The $X.XX termination reduced reduced to per funded. wrap-up non-cash non-cash the was non-contributory pension share $X.X of which qualified plan $X.XX. pension by income reduced fully by diluted were plans, fourth two net termination of related million charge charge quarter and earnings the

XXXX. sales to in a demand segment our healthcare-related fiscal for net to XXXX and in to the apparel PPE market sales volumes compared year high pandemic-related lower $XXX.X significantly due X.X%, uniform highlights, Turning decrease lower million from declined demand

million partially challenges an our net million sales, $XX.X despite grew PPE X.X%, lingering chain Excluding pandemic. uniform sales million, reflecting of Promotional of merchandise, and net effects offset PPE decrease branded sales core supply X.X% segment to of $XX.X in our the sales. by increase increased $XXX.X in products the the

core despite the Overall, sales, heightened our the a gains. base stellar late up market strategy and program in to integrated year-over-year, leveraged BAMKO launches XX% pandemic uncertainty market sales Excluding customer to our of share to promotional was related PPE year. return growth

Additionally, Design and Mill or to year the net XXXX acquisitions of XX December million ended of Gifts $XX.X sales Sutter’s $XX.X XXXX. By in for contributed the

Our deliver TOG of extremely It’s finishing quarter well year in XXXX. in with promotional fourth year in of executed This growth a record million backlog largest to the PPE throughout XX% at with made million bookings huge from promotional non-PPE. increase. XX/XX million, resulting in terms sales in which net the XXXX, are products TOG up $XX.X $XX.X in expected breaking history, is company’s and for a dollars. $X.X products of backlog was sales the in of the sales

year the SG&A gross partially a XX.X% by XX.X% as primarily expense Consolidated associated mix gross margin of discussed increase in year, to compared to of logistics PPE well expenses increased our write-downs increase in airfreight by margins by $X contributing impact with decrease fiscal year, as in addition freight inventory expenses, the higher X.X% air versus an product in personnel XXXX. The million. in in was impacted million last million, debt an million. previously bad consolidated of with was $X.X the cost $XXX.X to costs to of Again, $X.X changes, due offset was full For and XXXX. significantly XXXX

expense SG&A of operating our margin a ahead well $XX percentage X.X% operations total of XXXX. compared compared operating X.X% in was margins X.X%. our last million versus $XX.X XX.X% in XX.X% to sales, from was Income of XXXX. As XXXX year, to million and And was

related million, in $X.X by reduced qualified rate positions XX.X% and per two by effective pension or net earnings X% was income the the $XX was compensation-related tax compared XX.X% a plan write-down related to of The per diluted approximately inventory pension The Our of impacts items impact tax partially the the diluted of to compared PPE per XXXX share of plan or uncertain to of non-cash last a wrap-up the and of plans. Net million, year primarily non-contributory termination charge. share favorable diluted $X.XX income year. million for share termination year reduced ago. by $X.XX X%, our to respectively, $XX.X charge and variance pension offset X% was $X.XX was

share Excluding of pension the the have our year been impact non-cash termination charge, full XXXX earnings would per $X.XX. diluted

and to supported cash Moving sheet. balance sheet the solid flow continue to flow highlights, cash healthy generate a balance we by

borrowings our under were XXXX million, remained from very with range times, of cash $X.X which million. was ratio well to net XX, and our $X.X XXXX, equivalents and desired year-end up in an limits. X $XX.X in EBITDA is at December debt our Cash year-end increase While covenant at million line strong

to across at continued our and and In locations. investments investments year level the a XXXX, facilities manufacturing XXXX. Our we million, than CapEx technology was the distribution related primarily but expect with CapEx for lower $XX.X enhancements

dividends $X.X XX% compared dividends we in And in to of Lastly, shareholders $X.X total, we million during million returned in per XXXX cash share. XXXX. to our pay have

for profitable Our and to while fourth call the back closing team’s tremendous sustainable, to year quarter reflect Michael turn full results opportunities now manage I’ll the challenges our and growth. building agility remarks.

Michael Benstock

have script I’m Thanks, and portion do not glad the Andy. that you to me. of

more America. we’re serving than So XXX-year of our some company proud ever to award the in very largest wrap-up, brands old of winning global

and of our double-digit our in EPS, grow, I key are strategic EBITDA, – to and mindset growth, consistent terms our line core our posting long-term our our growth, Our since CAGR planning adaptability, strengths entrepreneurial business. believe top for business continues XXXX long-term XX%

a growth, and forward. all reflection it guidance capturing We’re the to more of future I’d can know we feel clear somewhat It’s opportunities, we solution organization I a scaling diversion and now our than executing the sometimes. our our to But pass-through vision ever ensure periodically. appropriate our expanding and region about multi-channel future. accurate update of with our this confusing against of do here’s share to how having strategic it outlook moving for offerings. its acquiring PPE non-PPE, be higher-margin most Superior branch like do XXXX market leverage We

was The least fact, for in is of CAGR XXXX from by market. in the our XXXX and as the of sales on XXXX, the least through segment healthcare guidance updated sales grow previous to HPI driven CAGR at we Uniform market as XXXX Our an With penetration guidance CAGR non-healthcare period share segments floor. of to XXXX, is through is $XXX team to at the of based increase in TOG expected XXXX. final $XXX during leverage and the the million. assumption division here at that That’s at and be approaching net where follows. BAMKO expected would grow at the million, period, set XX% through Uniform organically our an as portion continued projecting sales of taking the XX% XX% growth the well BAMKO least increased same in a is

acquisitions, who Dominic margins remind through by online. for that a and said, we’ll now Phil, BAMKO; XXXX for net XX% We And least expect billion open we all a Jake and TOG; XXXX. including by at you questions. is line on to that I Strategy from exceed With Chief expect our Officer, operating the we to have exceed want from to and consolidated consistently sales CAGR basis $X in SGC XXXX. XX%

if your So any us, questions of any of to one ahead. want to direct you go

Operator

our And Barrington question Instructions] Steinke Please go the from with first now question-and-answer Research. Kevin [Operator will We begin ahead. come session. will

Kevin Steinke

everyone. Hey, good morning,

Michael Benstock

Kevin. morning, Good

Kevin Steinke

in obviously to call by to the on the two other much quarter. it Office in Gurus impact given that in sales you all off Omicron here, variant But doesn’t Uniform businesses segment. seem your out is any had your an strong in you start see early quarter at that about relation like or or it wanted XXXX? And The and of impact the the asking I did BAMKO

Michael Benstock

question. good Good, Good morning Kevin.

Jake me TOG he’ll here, and the answer the portion is that. BAMKO Let portion of answer Dominic let

Jake Himelstein

we’re variant. had you? events Kevin, fourth big way. back excited in of were lot results And Certainly, great the to BAMKO, We’ve come Obviously, people events, meetings relates how that in our that nonetheless. Omicron seen as tailwinds huge. largely big some to are we conferences never certainly are in-person now, that is are due the a Hey, seeing headwinds it We now quarter, right? Omicron as think a the past us. about right, canceled But right in-person saw canceled, an they impact, as

held So we back really to tailwinds conference exciting to us. really about in-person giveaways, have in into what and all RFP which is in excited turned meetings, faced the we’re terms in-person in meetings, QX, means of QX headwinds that event

Michael Benstock

why don’t jump you Dominic, in TOG? on

Dominic Leide

levels Yeah, carry for just rates that until or did locations affected. affects and Kevin. Hi, cases, backfill some when absenteeism which which limited ability quarter recently. of Omicron recruiting, We some to seeing saw than that we effectively were We our TOG hit obviously that over at of more absenteeism. in fourth absenteeism our higher late in our even Sure. double definitely our double started

past weeks in the U.S., countries COVID in cases steep that Fortunately, the seen though, a over all in from. we several decline like we’ve operate here the

levels. normal absenteeism to now we’re So back

Kevin Steinke

commentary helpful both right. on Thanks. ones. All That’s

price ability do about catch So or to – to been You worsening think price then inflation? quarter this how is we’ve any – did up and said fourth feel a you I mitigate on what seeing been ask it’s the mentioned you hearing I about your and increase increases inflation. that in you call. you wanted – last you Obviously, Are stabilization? that quarter

just are you’re you your mitigate thinking to ability So how implementing pressures? more about and inflationary

Michael Benstock

segments, for over that feel largely that a it’s effective the all Right. in was X. that businesses, marketplace, to price increase we on of pricing. the inflationary put that all coming that months really we that for that we point did go-forward terms seeing on a the challenges and I’ll one And up the in basis take – December were Uniform our covered of proceed could we

a settled that seen down come all. have we have down feel that, a prices they’ve But level that least settling or down to in well little of We at hardly a at covered. that comfortable bit much we

point We’re uniform that increases, price watching this any largely staying but not at other the that to we’re we’ll it, of be make ahead on anticipating sure that’s side.

is that walk the one every side, on deal. each based for to deals their BAMKO in On they’re prices current able of priced

more to that can able customers. least their XX% and than every TOG to gross ensure their their little deal a their in bit? you for speak prices at to business, hope Dominic, cover they the to margin of that So price case, have on why they’re don’t single that get. raised they

Dominic Leide

Sure.

we yeah, So also. pressure inflationary seeing were

so implemented to we our to like So necessary go what then as recover did, going history, continue most we experienced widespread price we’ll increase first our Michael the first which forward. we’ve we is adjustments said, make just for quarter and in allow time us actually this far of to

Michael Benstock

did anything to with BAMKO? Jake, have respect to add you

Jake Himelstein

think it. I got you

Kevin Steinke

right, All great.

that you’re the So of or? just is The Office for that labor main experiencing? Is cost area inflation Gurus, that kind

Dominic Leide

question. good Yeah,

it’s technology. also is it, but labor of So part

from We’re – deal prices vendor increased every about just with. were we seeing that we

also a well. but vendors of is it, our labor piece from as So it’s

Kevin Steinke

thanks. Okay,

Michael Benstock

side It’s doing of been note, for uniform important the interestingly, in last years. on not cycle Kevin, in price a you we’re has right? – increases, the to that know deflationary habit XX apparel, the We

Have that and they’re products, in seeing our increases? everything just uniform pushback nor the not some to business what business, service from every expect respect price for any our raise doing nor in pushback in fact business. customers is buy, mean, that, Dominic’s seen to marketplace buy but for the services be well. they with it the not So Jake’s but be we able they we would opportunity that there prices, the we’re in would as I to

day. kind of the It’s the course of. unheard not of it’s So

price Russia But and the going We’re in now, do even from prepared to right hoping customers. have increases. be I do, little we’ll again, effects think and Ukraine more wait think we’ll they pushback what’s – don’t very I we’re on as of that them

Kevin Steinke

right. in to slowdown half so for obviously And fourth seeing but Omicron. you’re you – that. of the Uniform now Thanks All for related activity the pick And quarter the talked up the second then segment about again.

talked anything had that has expecting anything some – call last Do to You on been see RFP is significant quarter’s in the Is meaningfully? the or previous you activity XXXX. believe still about case? been thrown off

Michael Benstock

what Yeah, a seeing. think I’ll I they’re slowdown the what speak see on But to and jump definitely to in we it related these don’t only did slowdown. Omicron. guys was

I stockpile more inventories of of many had the normalized their And was customers we’re bringing inventories fact of parts were to the that. the it off and of our related some seeing to pandemic levels. the early who their think bleeding that during down also benefit

more So ever. than business, we’re uniform seeing on of side definitely the RFPs the

fair business. a within consolidation that amount seeing also of We’re

there. pretty out great inventories. mean, ourselves the we’re offering with we’re is So large sitting I thing

we’re So to shape of people, better much instances, service able we’re in of is. there’s kinds chain issues, supply believe, our than competition most all even I in though

to sitting customers needed. jump your on an the and it’s their Jake great products have So let shelf RFP, when in also Dominic on businesses. and on I’ll be

Dominic Leide

Yeah.

So….

Jake Himelstein

Dom. jump in real quick, I can

going merchandise. are honestly brand quite last what one all their here technology really future alternative, and opened think anxious capabilities, not has it is sourcing BAMKO lot about a strength distribution, on the and or of procurement provide just for appealing a And departments we’re eyes who our and their seeing providers of our is COVID And things we whether or really of there I here to is years the just are departments. strong side, sheet be that be holds I I procurement two because provider to of and the now think So entire also have think the the marketing the long-term. balance we but technical

as expect in really we’re – last two to going to we has the companies of The a continue strong, bid lot been And course over where that out RFP so continue we years, positioned. XXXX. to seen of see the activity we’ve we and like

Dominic Leide

tremendous capitalize and terms services. our for Yeah, continue Gurus, to we for in tailwind on The of Office demand

see being as business doesn’t things us, it We one of where it’s a great the that that realize, from continues long matter activity. continue big to well COVID growing just made it’s in think the clients, new as a of our work are existing And with companies is I just do great who lot as opportunities. performed activity to a of up their as clients resulting well, and really to is and and performed, being more in providing step our service team job part

Kevin Steinke

Great.

Michael Benstock

their in Yeah, alternatives and Phil great for people of out actually happening to messages speak feel I get to world to what’s trying branding the today. there how fewer they have

that on and…? So jump in can you

Phil Koosed

Yeah.

shift over move of we get TV a was. out newspaper obviously, to the or probably look that the advertisement. at that like earlier over some And or out, So no year, got the of XX years landscape dramatic is magazine in were saw their TV a from years billboard ads we powerhouse XX longer digital last the pretty it, dramatic message any saying actually digital. the the it or the of ads, seen people of shift, kind we’ve quite trying of sense you advertisement, when over you the overall look corporation last what at last is And that to benefit ad, traditional

dollars corporate the benefit. we’re But elsewhere. are so messaging getting now and therefore marketing secondary And going dollars

cookies, to when affected target customers, Instagram’s with harder doing from it’s think customers’ that’s ability actually and Facebook customers, therefore, of at and just everything changes target it’s target messaging. look with it expensive more and the getting what happening harder you the Apple how to that’s I standpoint Google they’re to making, is privacy getting and laws,

we’ve benefit think of seen the I So that.

the we’ll that of was as think to to benefit targeted bit and a in the year or effective additional see prior. two continue as it next I come less just becomes advertising

Kevin Steinke

Thanks. really interesting that’s Okay, color.

favorable. here posting sounds obviously, BAMKO strong results been so, And and has very the outlook

the a versus Is timeframe to the guidance, updated saw for long-term XX% regard expectations? in that a the XX% with to original just BAMKO just base you over slightly again, just of XXXX the from revenue lowered So of here. very higher you outlook function

Michael Benstock

Yeah, Absolutely. to projecting you in exceeded the is guidance we’re XXXX. XX% that now that XXXX nailed it. to the from The XXXX we fact due

raising we’re suggested. floor the just basically, So you as using, that

Kevin Steinke

I pipeline, the or good to plays the ask to especially on how institutions, thanks. your of as business, institutions uniform really because ability clinical and attract retain your clinicians? that view nurses into maybe a healthcare sell or labor way nurses want side Okay, the that’s into much to how other healthcare a product shortages, healthcare helping that actually uniform

Michael Benstock

Al right.

I I uniform sales future is all being Pat together as absolutely marketing more do are or it’s retention somebody and to their TOG is giving at country. colleges and exits entering is that’s healthcare schools uniform. it’s healthcare case so. a there’s obviously, or less have employee stat, they now, that sets, at for I to there’s is up healthcare nursing – important a things than healthcare the the of as buy they the are component been channels workers to programs are And lot expand XX with million. methodologies don’t strategy But But to somewhere international mean, to as you’ve all CID, know it, that the in as that for retirement ago. as meet We at the efforts need, many in universities And scales that CID, of were that But with options a is bought actual major around out looking and it buying the important lump or whether the shortage, and it’s they whether huge have yeah, omni-channel up. uniform, pay HPI – to have focus a BAMKO. less levels our increase need pumping providing read particularly at In well actually come our marketplace, and something their tune are to of feel than BAMKO and I yes, on are indie an decision. medical table. of use might and workers looking of of workers, there’s well around of uniform well. million recent healthcare for hospitals retail, a a when got so being about the half think those Kevin, XX now. are prognosis certainly space, more theirs, being some million I down, fashionable a the absolute them Yes, because all differently the customer’s focus being they still providing time so.

very, going division I see think over very long haul the you’re see that – ours very that. growth of be to stellar from some

in that and releases mature they’re diversity the the be help high mature, next itself people they’re about partners that to greatly. of we feel are market it’s have and products looking earnings the price for paying – and not level. have is The calls them might is that. looking growing. more that something healthcare, the is that certainly healthcare get It’s to for, pretty We we but market hopes evolving for points, future so business, talking invested the We’ll and on. In in not

Kevin Steinke

timeframe helpful. around longer-term rate? about we up that Do should organic more Uniform that’s maybe relation and segment. the to XXXX growth Or is more longer-term that a in growth that business to over gradually track think I business ask, you for of specifically rate you’ve towards on discussed? to Thanks, ramping again, that kind like feel the wanted XX% be

Andrew Demott

opportunities well really on. working while penetrate of of guidance the increases seeing bit to that, years. going the number in team little that mentioned, the our is our it’s Michael take Kevin, a time would as we’re market average that activity five sales we, RFP we’re starts year hitting But the is to tremendous as as start say BAMKO revenues. for the an I as to into for XX%

with go as would up I model referred So the you ramping to.

Michael Benstock

you’re that going all be the expectation set. And I us far asking don’t to think to that off we’re

get is a year. over nice great goal numbers, Our exceed be Kevin, these certainly to all started long and to haul it’d the with

being to opportunities us that factors some year, – we’ll because take as those to on quarter demand able middle the to spoke you the see normalized. that those I down can well. a that date, we’re even, results March all you’ll our the of we beginning second of an be and February, there keep extent, about, some but middle think the that of certainly saw The year, some it earlier a I some are much in well. through And quarter just half hoping about things have of of little tell are more as the slow we of care later that in working we as by – year. we spoken We kind continue posted. the could rather of of we’re And first you looking get the to – bit in the first of of pent-up

Kevin Steinke

want and regard That’s ask disruption Any sales events there, to potential great. Europe CID. Ukraine? given the new in Okay, any in going on about efforts just lastly, driving helpful. for to with that your And on I update just

Michael Benstock

to Poland, a mostly influx has But seeing warehouses activity done X Poland things actual to expect a where we’ve but uniform throughout lead as and our some Ukraine need our dispersed – to those in settled they’re warehouse and a Ukrainians, a these some in lot more going people. healthcare to workers there’s we our shops Actually, leaving all obviously, get in people help interest own and Ukraine West, increased still and their who people Eastern way done more Europe, being result, Hungary. things, home make million we been great some little Ukrainian are sales European in help of

are We of we find increased weren’t Quite seeing healthcare in a some those activity. people locally. who lot And a themselves frankly, But selling workers negative expect don’t are employment we impact. will Russia.

So expect couple a diminished be relationships might Ukraine. the of had at fact we all. isn’t and We because Poland be there. in to to a us customer we Russia hurt at is that Poland going can’t all don’t now, fans sell whatever there

We’re working we on. are. We weren’t really embedded in Ukraine, as we to would like

from Our stocked them now, warehouse is us is product. it anyone fully to servicing running with though. Europe. to Europe would is up in like and It shipped see who And

Kevin Steinke

as Okay, all for Appreciate insight, the usual. thank it. you

Michael Benstock

Okay, you. Kevin. Thank

Operator

from next Our with Hart come [ph]. Investments] will ahead. Memphre [Tim Please question Instructions] go [Operator

Unidentified Analyst

two Good wondering morning. was I questions.

bit market when of are about little second, First, actually to whether start just that talk And gain you seeing flow XX% – uniform – materialize? guidance about could well? Maybe XXXX. about XX% is talk cash more to growth you business And for going core just and target? going back growth share? you share the a you’re just we talking customer retention Are expecting the

Michael Benstock

So speak uniform cash side side. for flow the and about over I’ll it of then Andy more, the turn it to

to cost position. lower think many, our look year-over-year on And that retention business. your We we’re over very capabilities, who for grow out the been believe high. sourcing in at we anybody very there to still more uniform side, how and with I that’s opportunity compete it. – a are we an a more there there admiral years, are XX% while have there’s don’t well as average on to So who in actually They basis through they’ve managed what even on on they promised we respect rates that ground RFPs X% in. business to many out for you operate actually all has XX% logistical that people can we’ve has a market as and RFP, sure the we out countries these happen make time. long their have have, a customers don’t challenges, going with it’s RFPs the when approximately, you to that in mind have, Keep that share owned you if

So we’re Absolutely to some, I’m believe that. customer of Will we gain retain retention. business of the in as not XX% course. of more our we we than about going past lose base, might I have concerned confident lose?

about, Andy business, will think because improvement. We branded year. see some to second business our know the in of half that the – ship it uniform already the going in half So particularly you’re second won this year, spoke that we’ve of I

but – the come are sales are efforts in year began cycles sales revenue that about a that half ago. these second result Our pretty – just almost that of there’s a long year, the will as year-and-a-half one, of materializes,

And in very should be into HPI the on efforts, so, next strong. we’ve ago which this half, confident should or year. in revenue and turn that seeing start that side the feel year, covered the HPI next I we that got months began with So eight believe, about, back year

we’re lot It’s On new the paying healthcare of employing omni-channel. a off. strategies, a of lot side,

but mine, We so Our to CID. external me healthcare trailing were actually business XX, is, customers Keep number, bought $XX in fact, that somewhere, quote they growing. million on. on and

habits respect business. price of health give are of with long-term basis, willing with realized that’s we changing try guidance higher on quarter-by-quarter we runway a ahead that longer keep on annual We not how we period experienced a basis being we’ve care should on us in points I a spend, price think channel. past And buying great than And really with get run basis we it. there. to time. even do I don’t or what over business people can a to an have we and We our the our our as run Yeah, to point of

range some years that we exceed where keep greatly some will get. do believe be XXXX we’ll the saying in will four-year we and where be that. But we of on in and years to we to it that prefer trying not. will We’re might it we now average, that’s be where There what

Andrew Demott

Yeah.

bring on perspective, be revenues And talked to think substantial in little a think the pandemic. we the in amounts favorable going what quarters work inventory in a that $XX position will but strong would million. XXXX, invested to prepared turned but obviously bit work use those in that our in those if we down perspective, items impact a towards amounts inventory it use $XX from definitely pursue go we’ve several much be inventory. $XX other our we over about there’ll don’t to levels to know other year, build cash a of the that. million say have would our was begin will inventories down last where versus the from will it I very that direction. of expect I can’t mean, From I for will more XXXX. continue added I the We we’re in part that our the On basis. million se your be, we cash working I the year. per would what flow acquisitions, and will normalized look as to proposition, year, more of will little bit dividends. the actually, I you that. mentioned, the of an important do And to Michael our that Board would part would continue time, course, or question, a current normalized decision I our value we than on first move to we – results increase number to you the right that’s make of a of as we’re year. X% part, expect back was money going a very flow, appropriately, would where at expect mentioned, recognize on dividend a CapEx perspective, a pay if look mean, will be through I I the the at from we capital more From as would but second the to would I the high at that perform we cash And we just in

Unidentified Analyst

of to Great. at look guidance what very specific to anything years make Well, one forward business you’re on and phenomenal sure is a TOG, little is there Is we question try that business maybe a specifics to more positive. on track? is on the last that doing final commentary it’s should that just couple maybe on

Michael Benstock

Dominic a let things jumping in, I’m some doing of jump them. and the we’re infrastructure are from grow and things about tell customer to going to done you standpoint retain

Dominic Leide

Like mentioned last a Tim. well. excited question, record really the future great as Yeah, for about was Michael TOG, year year setting

additional from, capacity the three Republic. and our operate increase the Jamaica. and in Dominican growth. current a incentive X,XXX increase Michael our we’re to center to in started with countries that And about in expansion also, support there we Dominican seats. that to the we And doing make leases looking our capacity we by what continue countries, mentioned, sure entering all going as So Together, signed belief buildings our then capacity we’re we from capacity. to year, that we’re our we at can Last was standpoint

conservatively. the DR, As a territory we we new enter enter always

our that hire a with to answer couple expand can we we caliber as Once well. to that the the hire of to going base, about in of prove in employees customer Santiago. look today we Dominican we’ll then We’re XXX seats support same

Unidentified Analyst

to base? a are From customer doing your customer Dominic, standpoint, grow you what

Dominic Leide

Yeah.

base we general, for able, think fortunately, to is of demand us, I nearshore a providing activity we’ve there’s in been services. I that elevated. we’ve in demand. like mentioned lot our customer our of I a for current we’ve the lot been – earlier, So seen mean, But support

I think brokers our new brand status and who our us our business. amongst bring

customers and also. amount We’re that exponentially grown in to of our from year, this new then have tremendous activity specific look seeing a client we’re industries current grow going with us base to

real a service and as down. I to that our see and don’t testament do out So clients, to slowing to our team and excellent just day what provide they in day

Michael Benstock

the auto there’s mention brokers of business. Yeah, did are Dominic it’s bringing think just who us a this. little another not bit. brag I part But

How treat or word We is do among well. do? reputation mouth, we the a posted, could out we getting in is What businesses bringing who we How we whether And – through well? position we The social of buy word well people just it’s our service well are about us we win. media what our people? that customers? to awards services. Our our

we sales for. that have We’re us to seeing more brokers, expense and aren’t that more opportunities and no ever come through literally

Unidentified Analyst

the seats? ability the Is growth, factor qualified gating to add on the

Michael Benstock

That’s…

Andrew Demott

right. Absolutely

Michael Benstock

Certainly.

Well, we on about we grow speaking people. at to by wants with I XXX get XXX because a or far roughly someone to revenue, know million, numbers, north seats. exceeded So, $X we’re been seats ever ahead of by to about think million our requires to $XX every planning are wants want in every X%, stay do you at much a got XXX somebody a $XX about million, curve stay? the remember bigger or ahead of put – by least, seats We revenue. to TOG more in It’s by numbers we X,XXX of business speaking multiple too. of in of a $X Dominic, do seats. million, customers grow capability has it, of out pops there, going while the having X%, or adding spoke just grow in once $XX which now where I XXX or grow, million strategic we’re XX want XX or how by dynamic he lot in spending he’s couple and And adding future, up next, lot of in that’s whatever case, each very expect by – Dominic will time environment. months, a it? the we a How

Unidentified Analyst

and Great. you much up work. Well, good very thank keep the

Michael Benstock

Thank you.

Andrew Demott

Thanks.

Michael Benstock

Okay.

Operator

ahead. session. This conference turn like closing to I any concludes Mr. for over Michael question-and-answer to remarks. back go the our Please would Benstock,

Michael Benstock

you. – lot to you for and thank for we your PPE, today. where to appreciate everything try time continued to I care. a amount all support. to know I We understand the to make it divisional your in short I Take we’re we’ve PPE, speaking with differences, a think, without look as absorb, appreciate done easy it’s of our you Thank quarter, forward time I to we do can investors it. headed. next really

Operator

conference The you for concluded. attending presentation. now today’s has Thank

may disconnect. now You

Superior Group of Companies (SGC) 9 Mar 222021 Q4 Earnings call transcript