Earnings call transcript Q1 2023

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Operator

Good afternoon, everyone. Welcome to the Superior Group of Companies First Quarter 2023 Conference Call. With us today are Michael Benstock, the company's Chief Executive Officer; and Mike Koempel, the Chief Financial Officer.

As a reminder, this conference call is being recorded.

This call may contain forward-looking statements regarding the company's plan initiatives and strategies and the anticipated financial performance of the company including, but not limited to, sales and revenue. upon expectations, based assumptions. estimates are statements management's projections, current and Such forward-looking such think, and such such anticipate, expect, similar hope identify Words believe, are outlook, as and variations expressions statements. words

Shareholders, to, Securities unknown but in the risks herein, statements future on company's to investors evaluating Form quarterly reports filings by the such the and expect forward-looking company's materially company does differ uncertainties forward-looking known are not the contained the cautioned to Forward-looking on Form those consider by required law. Such and carefully herein and other and periodic results XX-Q. to are statements. the XX-K in The suggested annual involve and these not from statements. made factors recent that including, report may forward-looking undertake statements uncertainties potential urged -- not to reliance are limited Exchange readers cause Commission undue update and as statements forward-looking risks except most further with disclosed on the and place

call would the to turn Mr. to now I Benstock. And Michael like over

Michael Benstock

start Thank highlights, reviewing segments. you, the I'd I'll and to our everyone our operator, to for today. call first introduction, welcome quarter each performance including our business the like of for by X

it to profitably detail the I'll We'll the and over I'll will grow who for XXXX more and business. outlook. updated open more call also strategy thoughts provide our on turn take During quarter discuss to discussion, the results Mike, first Q&A. environment the then evolving us macro then in through our up the

both our consolidated was view the year a from investments million, our we $XXX year of also we're $X with this of the performance still were our the million We $XXX $XX year. anticipate strategic revenues relative to call expectations anticipate markets and million ago, continued reflective into on attractive across segments. and tap softness and the last overall quarter. in messaging consistent is million our EBITDA X It with addressable respect business as Consolidated in of this making prior the down to first to half all

was Healthcare remains with market quarter $X.X healthcare $XX to million million came first the across Seal prior rate of the and due EBITDA the Fashion year revenues $XX Apparel, brands margin gross Starting which quarter first as under a revenues at down million lower Resources earlier, a which compared in combination of million, pressure. $X.X Healthcare CID in subdued. to the includes year conditions primarily and from

in and achieving this by As more are we on significantly mentioned March, focused better a reduced already of through approach. purchasing inventory equilibrium the disciplined inventory year end

share Our every our Healthcare market strategy beyond already the Apparel capturing day. for well who brands caregivers wear centers million X around

anticipated Apparel confident the our we engagement increasing their a direct-to-consumer driving to half. addressable and ago, soft us awareness year-over-year website large launch weeks, Healthcare brands. own the is we Apparel our initial more expect with time, our approach, for our featuring are stronger higher even consumer Healthcare Over weeks we with has met accounts make our market, few in to direct-to-consumer long-term complement focus In and with launched our on and efficient. engagement wholesale second expectations. to the will new omnichannel BXB On our a We're attractive prospects results coming in our digital growth. product growing strategy than line point, nicely Wink more which website that

the is last sales suppressing the in $XX segment, $XX billion a in largest EBITDA the the Products, Branded we demand. environment million quarter first during to million is line described this cloudy with Again, Turning X% due economic revenues $X.X decline. Notwithstanding our outlook with in the ago. year our to share decreased compared million continue marketplace. challenges, to million to than our $X quarter from the expanding this market year of economic less quarter near-term during to prior $XX plan period

Centers, of $XX Revenues the quarter, XX% growth our to top margin segment, over generate continues for did same line above quarter year highest the robust Contact first as slightly customers strong new for up remains The year. pipeline million Contact the rate. all growth. year fourth of during were Center quarter prior onboarded of new this we the as segment the of last number customers first

quarter negatively continued of investment of was combination period, $X.X margins million technology year in in due labor from prior revenues While to first gross remained costs and talent, impacting strong, higher the a EBITDA down $X.X our million and infrastructure.

some growth the during cost of increases, March well, to most were combination annual which approaching have to to and profitability as expected significant market. margin we towards been a implemented achieving forward XX% in addressable see potential improve a implemented year, large margins EBITDA of high Gurus as with price normalized a and reductions, having already of are XX%. which The Office Strategically, already Moving continue

to XXXX going additional our Mike? it financial detail outlook. on Mike With results over I'm turn that, to for and our

Michael Koempel

to up and appreciate call prior year being and expected. $XXX quarter, million our improved to everyone Thank on as we was margin today. Consolidated revenues was $XXX the which quarter of first million first in driven XX.X%. favorable our XX%, Michael, Overall, you, as the gross segment, margin from segment, well the gross compared of Contact and as larger Branded becoming largest by our our shift of segment, was highest margin mix. portion expansion revenue overall Center customer the the within overall The a Products, pricing mix

margin While to rate later only price implemented due costs labor the partially offset by rate first quarter the mentioned. as gross increases increased first margin quarter, the that was declined gross during were Center's in Michael Contact up, the overall

or of quarter. $XX quarter from prior XX.X% in of first or $XX expense Our XX.X% the was year sales SG&A million million of sales up first

up that on actions, the due segments successful part due and reduction expenses enhance and Products the While growth. I consistent fairly the was future of in the both should quarters. the investments both in to Center level increase was spending SG&A deleveraging were declines year-over-year, to with drove talent, Centers in Branded overall cost expense year-over-year for to expenses, rate note while sales segments. SG&A up SG&A Contact SG&A down Apparel recent in Healthcare Contact was reflecting infrastructure the technology

Interest for the expense diluted for approximately share $X.XX year $XXX,XXX prior higher Net $X.X average to net of from up a $XXX,XXX and, higher million to income lesser extent, million, approximately quarter. or quarter or $X.X a the $X.XX quarter earlier, outstanding. was compared share was due income in the debt as to primarily diluted per interest year per rates

from lowering the on on quarter million ended end free flow, covenant cash sheet with update an driving balance $XX to The compliance. turn and approximately and capital XXXX. Let's of We reducing increase expenditures. the our million, cash cash significant and up cash our of at focus was working in by the $XX equivalents capital driven first

trailing EBITDA, our As covenant a is result, our less required ratio first Xx. within X.XXx than of quarter XX-month net was covenant leverage which our ratio

net call, While are XXXX. than we we that during currently mentioned is our last I exceed as will not on covenant maximum ratio leverage it in likely more compliance, our

to agreement, which As executed EBITDA the covenant to our and ratio for X.Xx third quarters, increases temporarily and net we leverage a second result, amendment X.Xx credit respectively. maximum our an

Healthcare particularly flow by optimizing capital by well as segment our operating on our cash improving expenses and will position, We working levels capital to expenditures. enhancement our within our inventory as Apparel scrutinizing focus continue

return million, to we of wrap On continue from earnings I'll up of the for we $X.XX continue a reiteration sales specifically, provided year. diluted per $XXX a growth basis, last to earnings $XXX Healthcare gradually throughout call. to per normalized levels customer up our levels. Apparel, last and year year million share of consolidated to adjusted year $X.XX as expect we from of full low diluted last year, for that full improved look with $X.XX, outlook up sales XXXX to inventory $XXX the More share on million and for single-digit demand

sales a strong we the overall we improvement the expect profitability Contact continue Products, sales Branded again, And with of of for Centers, enhancing flat now to the meaningful double-digit strong with segment our mid-single-digit during to year. this second decline, growth half For margins. expect

consolidated improvement year large drive loaded addressable plan business is in time. segments markets segment-by-segment that back-end value the on our for each for should last capitalize significant performance over quarter, strategic to result creation referenced these this As expectations our X and should shareholder financial of

With that, operator, Michael questions. happy to take and be I will

Operator

[Operator Instructions].

The first question comes with Mitra Sidoti. Ramgopal from

Lalishwar Ramgopal

after reasonable received in to the Mike, you covenant that it to probably -- XQ Is compliance ratio? the peak I will XQ, relief just highest regarding the or terms XQ. wanted start of mark the and expect

Michael Koempel

feel to year-end favorable actually term. the When Mitra. calculation, as as second the first the -- in we the of -- mentioned year, in felt really year through more first had That's the we'll the last you And or we quarter in like start get some correct, at our the this earnings quarter. call, which add-backs the expired pressure end of into covenant short -- or I quarter we

that forward, of our up we pressure improving And move forecast, our some obviously, the we which the some of combined peak really see then set syndicate. as with bank of So calendarization quarter. with we into expiration those add-backs, how ties creates in the second MM the

Lalishwar Ramgopal

in Okay. questions the couple a zero to quarter, That's just And of on then wanted great. I on.

now? behind you Is speak First, you your on that the much issue. to customers pretty inventory when

Michael Koempel

on think before, perspective, Mitra, get full we that through said of healthcare really and it the targeted the inventory as especially levels really I year. focused work year take the a Well, to to will the end us from we're by achieving it

we're that making early. think progress, I it's but

as talked still expect still first soft, we soft accelerate in to the to the think somewhat healthcare, and guidance move somewhat market I even throughout as we about half be year. we the the

the through point, So we And have we go. standpoint, at and this our achieve to to making target. still we're on from driving turns expected, again, year-end think more really that progress inventory reductions an recognizing I focused

Lalishwar Ramgopal

a year Okay. And revenue was ago, I $X believe million. then of north PPE

XQ Just was curious year? how in much that this

Michael Koempel

really this were sales year. immaterial fairly PPE our Mitra,

was -- year, for where the probably of first quarter the business. last meaningful So number last really year last the it a

Lalishwar Ramgopal

the example, sales expecting on you look year. continue look BAMKO the goal? meaningful And when some pickup when the for reps we But of guidance, we in new And the to a softness have at the clearly, that half second contribution BAMKO, towards see obviously segment, you a are to Okay. at it's meaningful assuming there.

Michael Koempel

that improvement couple in the branded favorable who customers space. Obviously, move product of we It's are which this our an things, Sure. tech seeing some we're And quarter, have more the as a forward. to market earnings guidance Mitra. of reporting assumes the we are important companies

our control, We're some in forward. But with on of anticipating happy we're rep recruiting again, move -- new will, we take little the point. things we're a so really that we last just of that does year. at of incremental can opening And sales. focusing begin be then as for of, And there'll you reps we're if budgets, terms to it this ahead bit adding time the

so of the back drive to those force pace And faster this adding as at reps a year. as additional year, sales it get will we we're half the

Lalishwar Ramgopal

Okay. And Contact nice quarter. really another Center has

how the the curious is Dominican in center along. new Just coming Republic

Michael Benstock

customers the is Dominican making in stage. actually that new a that of be who will of still future what use is. Yes. We the more eyesight beta give us little bit to Republic have and some

being we well, to -- probably have we're money. that. said moving that last think important ahead And of we I we XX the but a be early. months -- certainty months So know going have to -- In fair certain with that far, invest on should as to And a more going X it's until our the X to we we I though degree about want we're call, to the next place future. as in respect but is meantime, it to it's

little when said fair have event the bit And of of with, our a it workforce we dynamic working to call, any of home we future are very first or a it than that that because customers happy I on the have opened As seems a our we percentage still amount it's first important home. a to conceived of from last working be kind less disaster. from in agents their

Lalishwar Ramgopal

the remainder Okay. think for year? should And the expense rate how of we interest of tax and

Michael Koempel

Interest expense.

good by say If at we're down about continuing up. over first year, on focused throughout debt as quarter, I'd rates expense just bringing Obviously, proxy a interest to million. the move you we fairly somewhat was the offset -- forward. $X.X that's look tick interest

think a proxy. the I has first So pretty quarter good

couple pretty that couple I And Center, as of rate last about I years Contact proxy earnings the from rate a XX-K, majority you think our offshore, represent -- sorry, interest last have Mitra, would how our with if which I'm years tax look would our we perspective, forward. we of tax the say, given been or expense of the good a in effective of over at tax move is think our

Operator

comes Our next from Steinke with Kevin Barrington question Research.

Kevin Steinke

I Apparel. by Healthcare asking wanted first about to start off

you the in the the the comments soft mentioned the market? expect more a fairly Healthcare as will terms in You factor expect? that how pickup? expectations be Just ramp much soft clearing in believe you launch about to about inventory and first drive Can the Is pickup efforts plays second do Or aggregate direct-to-consumer? out own that of half internal of talk of, Apparel mentioned, in your you on you you year it any into just half. that this out how then

Michael Benstock

Kevin. I'll you. question, multipart Thank good a take that. That's

smaller to see see comes the downward it economic the headwinds we really through taking size and certainly it deals. will of pressure, a way excess As marketplace, to will The its comparison this we shopping, the all be very second even manifesting into it's year. seems inventory. pricing really basket advantage of find market down some as promotional we to, to best said, consumers really continue their What a half work and to

and increased to expectations we it year. with the -- during for We're and And And very, The brand this. elevation full-priced great very spirits website, this pretty great accomplishing scrub we of the launched relaunch elevation of see of can our what Wink on we was off seamlessly. latter our on control. controlling technology and products to of our demand half expect certainly team the second our focused our respect a We of elevated product, half marketplace. exceeded this in pulled to the in successfully, accomplish newness there a

dream in against we a last a past, they the them new are As I but transforming call, we've the business executive team said when executing They call the have got the plan in heads all leadership and place. strategic swelled that investing the on focused released product efficiencies to continue our digital our brand XXXX. well we to potential of scene and the we the We're is drive believe We is that innovation. in early technologies this in marketplace huge. and going achievable as believe as on

in it nutshell. a And so that's

come your I think didn't, question. answered all I of I parts If please back.

Kevin Steinke

No, that's good.

And it comments and investments reflect some investments? perhaps investments And in to think touched taper prepared should be in results some as assume Is What that Are to Can start we way back investments year those goes you the the of investments that growth. year the on? off about drive those making. first thinking get as So you Products? on healthcare. mentioned yes, just Salesforce do about? half start quarter some right it? about there, I to and the leverage us of you the you're you And you the walk we Branded mentioned various through of talking other those

Michael Benstock

continue make a Understand the the the of of investments right the growth. further soft we year for I end That's we'll did beyond launch somewhat the mean, to way. BXC.

will that goes the it. understand much be take the and that, investment. Obviously, of an is all digital on, So us. as we're a we ongoing investment marketplace investment site, full upfront and and talent an make And investments in how so is continue the that ongoing advantage and and able did you marketplace that's but growing as direct-to-consumer a it for around be big sites, to to grows of marketing analysis to that of We'll see in lot analysis else. consumer investment, everything branding, big we an studies can a digital in on also

be expect the on? of as that I wouldn't time Otherwise, line Do to do. do we we accretive to goes bottom more Yes, course, it.

leverage from So goes as we get on. some should that time

Kevin Steinke

increases should implemented than Okay. year. a to gross some mentioned where being And Is segment can you you about you can the you then historically? the price higher gross in sounded that there. lower recoup later the that bit contact the costs margin, like centers' maybe that maybe margin It offset something we cost? in on help fully was labor think it in think higher Or

Michael Benstock

short we I'll Mike feel confident that we number very and of jump probably went drastic, in experienced for yes, and lagged And as reasons contractual some increase would having price within very customers increase period little had raise that, I'll that costs in say, up then as we and too, me. their in tell not I then notify time for anticipating the a is you, we I we that. bit finish a We that. of had until obligations of with we couldn't let of cost never a customers But and a seen the time of before. a that not implementation to give in a the it notifying contract. right, and that our increases requirement them lagged prices time them context One the was for price was our have

we that in result until quarter able have might as all the of taken we those garner recoup we have could the to months were much not have that able first implement So March. able a to weren't we of Had We what and a lag. been few actions earlier? should to

will Quite So as to trying some frankly, we're unusual lag happen be greatly. that times, it's won't I'm a that it learning that us. transparent experience as for possible in and just very again,

which We increases really what will with. budgeting is price process, the our triggered begin to begin

early enough the that impact respect and to financials. we be so stores what our ensure should doesn't increases price that of we it them earlier it to begin office will we kind know We giving, give with

Michael Koempel

just and at I price we it -- Michael -- and comments One looked sides. Michael's think, certain as it just the providing to, into was I add, perhaps some from needed. service, could benefits maybe no obviously, increases, at which longer were felt well, would where team that we're we garner of some back efficiencies Kevin, that looked really X prepared cost where the organized, described, ties we And had structure were we built the we how we

So the looked P&L. across we really really

well say structure some recruit of the had quarter. way a efficiency the a the combination as trying to of I'd as as we what in price seen implementing so cost in increases And first it's decline driving

Kevin Steinke

that, just in labor you like could dynamics What I that? or in Okay. this going And on market the is unexpected Centers was labor cost. the mean on labor? and touch somewhat for increase guess, rapid Sounds competition I more market drove tight there? Contact

Michael Benstock

that outsourcing think or much choice. open-minded who country a people, inflationary of for If that don't have you a And shortage States. which the before to get together. look XX were lot than jobs at only are an even lot into going to looking understand in -- the an find solution. between but people I think United think their people the foreign viable to disparity the level unemployment have X of of viable those agent the more people viable very hire, -- and you into entry-level numbers ever to been a we act inflationary for become that United going to I million need And jobs, outsourcing a in possibility -- or aren't employees, jobs It's that States to open typically they realized million too awakening an of start there's them the the and I and being perhaps recession, people not able nearshore fill a that has

not, who an of been large raised. has has proficiency in we're -- people. workers for We of would those English. I demand say, in the very that of supply level as demand supply countries people it's each unlimited a of jobs. the want So And a There's only in high raised, it's demand the been

to the there's higher mean, levels for signing that And make our and we've those so And sure referral bonuses, it thing of pay -- in bad recruit been always is of that had able to bonuses that a do prices. that isn't can clients. worse happen. we've isn't inflation more limited, be we best and order pay to That's -- to thing. our the to We'll raise worst institute I had that. not

the to the think of where in not And able it over in alone our We driving this period. that. call margins the operate. will because it's behind don't is regions alone time be I happening. we're not this force we in center improve we're what's world -- But in

we care think demand reasons. get can't this take that I a seem out don't country we million to between jobs fill in many is to the way going greater for those if greater X and of to in figure

Kevin Steinke

of Yes, is side makes Okay. demand mentioned -- strong. on the other as it is very sense. that, you But environment the

Centers. many first said you think I you onboarded the in customers new as in quarter Contact

how of Is last And that think years, I next okay. did of guess? kind trajectory -- trajectory? the what's growth about that all we does over does growth change Or the correct? that should You several year. yes, -- And the

Michael Benstock

a steady percent. to We're business XX-plus on path the by grow

ultimately to as with for similar do quarter, made we about they're with need that can the it the we pick last customers to kinds need to We the be us. customers right we careful sure new the Just customers of we've we right do that customers, and make previously make that diligently. margins in it how said

certainly So We guidance is XX-plus that, we something feel to respect very changing give can And we're not we future feel can that. our our beat should growth. guidance it, that good hit. the we'll in to we that percent with

Operator

I Hutton. question Tim turn Moore EF over -- the the with call to

Timothy Moore

healthcare. maybe maybe quarter, retail place. indicator The nice the to gross but few A history start we of already the let question institutional my monitor me to the able think How possibly of questions possibly a ahead have pickup. X-part the a in of just was margin was side it your amendment -- about been as leading covenant hear being out asked, about with should side about during

up kind retail X of months, the the think of X If does start to picking maybe you side side? institutional of tend ahead to replenishments,

Michael Benstock

wholesale period. to sooner. asked the of servicing later recession the explanation to tends question. recession, the that a Anywhere good who sure when long out hospitals, And buying on X years for the time. sure over to healthcare that they're a under they come side, make avail laundries They'd is lose which of their is job. gotten in that buying we've to their has concerned -- insurance there'd the healthcare. because the really other healthcare looming people themselves lose are side, a reduced. Typically, see the retail that in a a there's a institutional than that be it their their from a be months in Nobody doctors, they make of It's They'd X bad to that that buying tends lot tend that is And recession later reduced layoffs.

is And we've past. so the what that in experienced

never been we've the we a have place. recession understand, Affordable in Now in where Care Act

of lose people out because to different So access plans we would better jobs, the plenty still co-pays to were certainly of even and that's of they believe We a don't will follow though everything lot else. suit. still will be could go higher into one know And it they if there's who, there. that their their their lose will healthcare,

we're seeing the see it X side. day expect institutional looking as it, start So coming the at light within would it. of And wholesale well retail/wholesale side is out of the to months side consumer the that, seeing on way side out as we when we're of the the coming we

consumer side past side, for as of that X pressured the not is models this wholesale as months retail and as we're the well. out X time to us work the Now hoping

Timothy Moore

as the it's maybe been down discounting, that's Michael, and Healthcare And my features And color. offerings or really Apparel so, with items the month is, at and more obviously, some the side, well more past on come coming have of the it industry-wide, seen add in look some apparel how your position part helpful the or bit relative question you out the pricing launches other and new you you retail of later to you your this do feels items year? attractive peers for feel your as to X? position a

Michael Benstock

a of haven't the in Discounting merchandise full right lot seen A pretty is heavy. We now. the buyers of discounting. slowdown are still discount

it no mean would where And them So there's certain expect diminishing slowed a to the at see the anybody retail want the impact. this big that But to of we'll we oftentimes those you've a at quite inventories see buy price got of before down for products, at point. end some little frankly, of bit. a I year We planning some us we year, But our developing be of write-downs of newness a amount We're direct-to-consumer, breathing to now. especially with little we're fair last us not new stopping took engage it's we've we've big -- be. supporting -- a got with from to giving -- room. is bit which products. -- customers to got

as align we're as to single our might somebody which that want mean to handle buy a it well. manner able we're demographic and well in to conservative that so able single brand every us just being We're might bring strategy lot I in every how handle at we're much trying out. scrubs that of newness from that we to buy

to that marketing trying wisely, dollars wisely be, return on get spend as technology on we money the omnichannel spend we just investments the be quickest as can we're can. So we're and making

Timothy Moore

And of just other a started they're the doing year? with things Are subsidiaries, or the at with seems weeks or that kind the layoffs last the of switching technology go its leveling gears end how BAMKO But layoffs? touch get they back had there in maybe those have any cut to moratorium it like and of at buying kind are specifically to out and downturn some least the stay few anything markets doing a in engaged end -- pull might months. of to customers from related that year budget last who some

Michael Benstock

off. customers white dealing touch in of their layoffs. obviously, with as their that For some last even rice. laid through the all customers They the on like have the been throughout changed they've mean, people with And are months sure. on we're habits I got and X buying

got in are are and that might buy -- we just -- of areas make well. ways, we're branded said down in for We with, new to necessarily or we if them who dealing or for, looking they've can last other uniforms. front only spend, are have And X the with can't comes more, dealing the And them. they XX but people customers. as on And demand dollars with be them. customers oftentimes, branded losing call, who we to some So HR merchandise what stay the what X and the as I what buying might create have to not not less. of new mean, We we're connections marketing paths, departments don't to have the customers I we're there's different the have buying

a for those have. we try connections us this more aggressive to So of through is that and pick get up really a to couple time departments the

we into year, where make this we plan track the we slowed of not was in a down difference next disappointed all budgeted, year. our made haven't statement the our at that will I'm a bit. half and where particular, to recruiting. and We're disappointed one I So works in year, be, recruiting in certainly on last And right year. I little the to it latter

Timothy Moore

will and roll lot seem for infrastructure being it Any writing growth not and spending on hiring That's but Dominican headwinds investors XXX do think there's you being Dominican of cost about giving you that think and just of margin this are great feel this phenomenal Do investments I the about the the about -- would it. of Republic points got kind reports. to you the My by through margin year? you next Office underappreciating that expand just down EBITDA lapping inflation, drag like was sensible you to next you as look for maybe when is I know maybe think EBITDA to business, helpful out Gurus. out year. next just pricing that I my basis hear. some the XXX you can you're areas? the you the But a contact kind guidance it's X margin come soon. centers year, The and think a other -- start other and that question you last And that year, that like maybe X to in a little it's Great. bit, when of Republic year, -- come recover do way. When and about

Michael Benstock

Yes.

let quite Some of after more But perspective this. of it's that no a this. small course thousand investment was dollars, leases. -- was Mike over to lot frankly, I'm hundred and few capitalized on the than pretty going jump a to in our Dominican

bore. We said, as we beta as didn't So viewing in full went a in go it opportunity. we

the now. I and plan where ahead And right our very spent there. us, of quickly and got right right our described. We're the little that quickly very point. so at moves And are, cost enough. That's Really, or us. getting on at but Dominican we readjusted, wouldn't now they described up we're very, we're at not on we why completely we went Mike track and I infrastructure we're on we couldn't where now as at, earlier have this any respond that's of is fault,

workforce EBITDA grow from Mike? there well. going as of fact think an for opportunity is, leverage think what certain standpoint leverage the I to we've should the to work and done is help continue many to from as years, a we percentage and our that home I already that us

Michael Koempel

standpoint, about predict it labor well, to difficult competitive. that we just pricing time, level to we you like remain would like At need also of said just same the think certainly I a seeing we have I recognize Tim, We from power. pressure what year. talked say, cost next we're feel might we it some on this look a obviously, Michael. call

a going the keep eye and we'll that business on obviously forward, will obviously that operating the to grow, on obviously be we expense determining will past an we as XXXX. that get as leverage key I do think So factor continues side. get

digits, for Last obvious to to we you XX%. to things operating quarters We're certain certain more of investments as out you've those expect reasons. year, expense continues at growing If to you quarter-to-quarter. as double getting move do of grow as need just go back growth There's the dollars year, excess that last segment in doing leverage a in those see -- we in steady making build out to investments begin we infrastructure. forward. business would seen And

Timothy Moore

realization there the the inflation. and readjustment cost Contact net thanks pricing Centers' over for Well, clarifying

Operator

call Benstock session, closing would This turn and Michael to concludes the the to remarks. for question-and-answer I like back over

Michael Benstock

you Thank right. All again, operator.

making As the we're we and out extremely And about again and is opportunities hesitate ahead everyone, progressed what again. Thank to you're the don't with while call need team navigating uncertain to any times, the Thanks I growth profitability. hope feeling joining next reach updating that look to you us. some forward you investments our pretty questions. our on future to please is on you, We for drive call. know energized. that

Michael Benstock	Chairman, President & CEO
Michael Koempel	CFO, VP & Principal Accounting Officer
Lalishwar Ramgopal	Sidoti & Company
Kevin Steinke	Barrington Research Associates
Timothy Moore	EF Hutton

Superior Group of Companies (SGC) 8 May 232023 Q1 Earnings call transcript