Superior Uniform Group Inc (SGC, Financial) filed Quarterly Report for the period ended 2010-06-30.
Superior Uniform Group Inc has a market cap of $57 million; its shares were traded at around $9.6601 with a P/E ratio of 18.9 and P/S ratio of 0.6. The dividend yield of Superior Uniform Group Inc stocks is 5.6%.SGC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Cost of goods sold, as a percentage of sales, approximated 64.8% for the three months ended June 30, 2010 compared to 66.8% for the three months ended June 30, 2009. The decrease as a percentage of sales in the three-month period is attributed to a reduction in direct product costs as a percentage of sales (1.7%) with the balance coming from more efficient operations in our value added services area. Cost of goods sold, as a percentage of sales, approximated 65.2% for the six months ended June 30, 2010 compared to 67.8% for the six months ended June 30, 2009. The decrease as a percentage of sales in the six-month period is attributed to a reduction in direct product costs as a percentage of sales (1.5%) with the balance coming from more efficient operations in our value added services area. The Companys gross margins may not be comparable with other entities, since some entities include all of the cost related to their distribution network in cost of goods sold. As disclosed in Note 1 to the Condensed Consolidated Financial Statements, the Company includes a portion of the costs associated with its distribution network in selling and administrative expenses. The amounts included in selling and administrative expenses for the three-month periods ended June 30, 2010 and 2009, respectively, were $1,512,000 and $1,546,000. The amounts included in selling and administrative expenses for the six-month periods ending June 30, 2010 and 2009, respectively, were $3,115,000 and $3,231,000.
Selling and administrative expenses, as a percentage of sales, approximated 29.5% and 29.0% respectively, for the three-month periods ended June 30, 2010 and 2009. The increase as a percentage of sales in the three-month period is attributed primarily to higher salaries, wages and benefits in the current period (2.0%) and other miscellaneous increases in expenses as a percentage of sales (0.5%); offset by increased sales to cover operating expenses (2.0%). Selling and administrative expenses, as a percentage of net sales, were approximately 30.3% and 31.4%, respectively, for the first six months of 2010 and 2009. The decrease as a percentage of sales in the six-month period is attributed primarily to increased sales to cover operating expenses (2.4%); offset by higher share based compensation expense in the current period (0.4%), a reduction in gain on sale of fixed assets (0.2%), and other miscellaneous increases in expenses as a percentage of sales (0.7%).
Interest expense of $6,000 for the three-month period ended June 30, 2010 decreased 76.0% from $25,000 for the three-month period ended June 30, 2009. Interest expense of $8,000 for the six-month period ended June 30, 2010 decreased 87.7% from $65,000 for the six-month period ended June 30, 2009. The decreases in the three and six-month periods ended June 30, 2010 are attributed to lower borrowings outstanding.
The Companys effective tax rate for the three months ended June 30, 2010 was 35.9% versus 31.3% for the three months ended June 30, 2009. The 4.6% increase in such effective tax rate is attributed primarily to the following: an increase in the rate from the impact of permanent differences between book and tax basis earnings related to share-based compensation (1.5%), a reduction in the benefit for untaxed foreign income (3.0%), and the impact of other items (0.5%); offset by a decrease in the quarterly accrual for uncertain tax positions (0.4%). The Companys effective tax rate for the six months ended June 30, 2010 was 36.3% versus 37.7% for the six months ended June 30, 2009. The 1.4% decrease in such effective tax rate is attributed primarily to the following: a decrease in the quarterly accrual for uncertain tax positions (5.6%) and the impact of other items (0.3%); offset by an increase in the rate from the impact of permanent differences between book and tax basis earnings related to share-based compensation (1.5%), and a reduction in the benefit for untaxed foreign income (3.0%).
On June 25, 2010, the Company entered into a 3-year credit agreement with Fifth Third Bank that made available to the Company up to $15,000,000 on a revolving credit basis. Interest is payable at LIBOR plus 0.90% based upon the one-month LIBOR rate for U.S. dollar based borrowings (1.275% at June 30, 2010). 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 June 30, 2010, there were no balances outstanding under letters of credit. The revolving credit agreement expires on June 24, 2013. At the option of the Company, any outstanding balance on the agreement at that date will convert to a one-year term loan. On June 30, 2010, the Companys previous revolving credit agreement with Wachovia Bank expired.
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Superior Uniform Group Inc has a market cap of $57 million; its shares were traded at around $9.6601 with a P/E ratio of 18.9 and P/S ratio of 0.6. The dividend yield of Superior Uniform Group Inc stocks is 5.6%.SGC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
The current economic environment in the United States remains very challenging. While we are seeing increased activity, the employment outlook in the United States remains soft. Additionally, voluntary employee turnover at our customers has remained very low. The lack of job growth coupled with less voluntary attrition continues to weigh on the demand for our uniforms and service apparel. Despite these factors, net sales increased 6.6% from $24,972,000 for the three months ended June 30, 2009 to $26,629,000 for the three months ended June 30, 2010. The increase in net sales for the quarter is attributed to sales to customers acquired as a result of our acquisition of Blade in the fourth quarter of 2009. Net sales increased 8.1% from $48,688,000 for the six months ended June 30, 2009 to $52,609,000 for the six months ended June 30, 2010. Approximately 74% of this increase is attributed to sales to customers acquired as a result of our acquisition of Blade in the fourth quarter of 2009 with the balance coming from organic growth.Cost of goods sold, as a percentage of sales, approximated 64.8% for the three months ended June 30, 2010 compared to 66.8% for the three months ended June 30, 2009. The decrease as a percentage of sales in the three-month period is attributed to a reduction in direct product costs as a percentage of sales (1.7%) with the balance coming from more efficient operations in our value added services area. Cost of goods sold, as a percentage of sales, approximated 65.2% for the six months ended June 30, 2010 compared to 67.8% for the six months ended June 30, 2009. The decrease as a percentage of sales in the six-month period is attributed to a reduction in direct product costs as a percentage of sales (1.5%) with the balance coming from more efficient operations in our value added services area. The Companys gross margins may not be comparable with other entities, since some entities include all of the cost related to their distribution network in cost of goods sold. As disclosed in Note 1 to the Condensed Consolidated Financial Statements, the Company includes a portion of the costs associated with its distribution network in selling and administrative expenses. The amounts included in selling and administrative expenses for the three-month periods ended June 30, 2010 and 2009, respectively, were $1,512,000 and $1,546,000. The amounts included in selling and administrative expenses for the six-month periods ending June 30, 2010 and 2009, respectively, were $3,115,000 and $3,231,000.
Selling and administrative expenses, as a percentage of sales, approximated 29.5% and 29.0% respectively, for the three-month periods ended June 30, 2010 and 2009. The increase as a percentage of sales in the three-month period is attributed primarily to higher salaries, wages and benefits in the current period (2.0%) and other miscellaneous increases in expenses as a percentage of sales (0.5%); offset by increased sales to cover operating expenses (2.0%). Selling and administrative expenses, as a percentage of net sales, were approximately 30.3% and 31.4%, respectively, for the first six months of 2010 and 2009. The decrease as a percentage of sales in the six-month period is attributed primarily to increased sales to cover operating expenses (2.4%); offset by higher share based compensation expense in the current period (0.4%), a reduction in gain on sale of fixed assets (0.2%), and other miscellaneous increases in expenses as a percentage of sales (0.7%).
Interest expense of $6,000 for the three-month period ended June 30, 2010 decreased 76.0% from $25,000 for the three-month period ended June 30, 2009. Interest expense of $8,000 for the six-month period ended June 30, 2010 decreased 87.7% from $65,000 for the six-month period ended June 30, 2009. The decreases in the three and six-month periods ended June 30, 2010 are attributed to lower borrowings outstanding.
The Companys effective tax rate for the three months ended June 30, 2010 was 35.9% versus 31.3% for the three months ended June 30, 2009. The 4.6% increase in such effective tax rate is attributed primarily to the following: an increase in the rate from the impact of permanent differences between book and tax basis earnings related to share-based compensation (1.5%), a reduction in the benefit for untaxed foreign income (3.0%), and the impact of other items (0.5%); offset by a decrease in the quarterly accrual for uncertain tax positions (0.4%). The Companys effective tax rate for the six months ended June 30, 2010 was 36.3% versus 37.7% for the six months ended June 30, 2009. The 1.4% decrease in such effective tax rate is attributed primarily to the following: a decrease in the quarterly accrual for uncertain tax positions (5.6%) and the impact of other items (0.3%); offset by an increase in the rate from the impact of permanent differences between book and tax basis earnings related to share-based compensation (1.5%), and a reduction in the benefit for untaxed foreign income (3.0%).
On June 25, 2010, the Company entered into a 3-year credit agreement with Fifth Third Bank that made available to the Company up to $15,000,000 on a revolving credit basis. Interest is payable at LIBOR plus 0.90% based upon the one-month LIBOR rate for U.S. dollar based borrowings (1.275% at June 30, 2010). 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 June 30, 2010, there were no balances outstanding under letters of credit. The revolving credit agreement expires on June 24, 2013. At the option of the Company, any outstanding balance on the agreement at that date will convert to a one-year term loan. On June 30, 2010, the Companys previous revolving credit agreement with Wachovia Bank expired.
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