Superior Group of Companies, Inc. (SGC) Bundle
Understanding Superior Group of Companies, Inc. (SGC) Revenue Streams
Understanding Superior Group of Companies, Inc.’s Revenue Streams
The revenue streams of the company are primarily derived from three segments: Branded Products, Healthcare Apparel, and Contact Centers. Each segment contributes differently to the overall revenue.
Breakdown of Primary Revenue Sources
| Segment | Net Sales (2024) | Net Sales (2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Branded Products | $260,911 | $244,955 | $15,956 | 6.5% |
| Healthcare Apparel | $88,854 | $85,875 | $2,979 | 3.5% |
| Contact Centers | $73,422 | $68,935 | $4,487 | 6.5% |
| Intersegment Eliminations | $(2,919) | $(3,704) | $785 | (21.2%) |
| Total | $420,268 | $396,061 | $24,207 | 6.1% |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, the company achieved a consolidated net sales increase of 6.1%, translating to a growth of $24.2 million compared to the previous year. Each segment exhibited growth, with Branded Products leading the way with a 6.5% increase.
Contribution of Different Business Segments to Overall Revenue
The contribution of each segment to overall revenue for the nine months ended September 30, 2024, is as follows:
| Segment | Percentage of Total Revenue |
|---|---|
| Branded Products | 62.1% |
| Healthcare Apparel | 21.1% |
| Contact Centers | 17.5% |
Analysis of Significant Changes in Revenue Streams
In the three months ended September 30, 2024, the company reported a consolidated net sales increase of 10.0%, amounting to $13.6 million compared to the same period in 2023. This growth was primarily driven by:
- Branded Products: Net sales increased by 10.8% or $9.0 million.
- Healthcare Apparel: Net sales rose 11.4%, equating to $3.4 million.
- Contact Centers: Net sales grew by 3.8% or $0.9 million.
The overall increase in revenue can be attributed to the expansion of business within existing accounts, new client acquisitions, and higher online sales through direct-to-consumer platforms.
Summary of Revenue Performance
The company’s revenue performance reflects a solid growth trajectory across its primary segments, indicating resilience and adaptability in a competitive marketplace.
A Deep Dive into Superior Group of Companies, Inc. (SGC) Profitability
Profitability Metrics
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Sales | $420,268,000 | $396,061,000 |
| Gross Profit | $166,618,000 | $147,902,000 |
| Operating Profit | $26,844,000 | $23,584,000 |
| Net Income | $9,915,000 | $5,215,000 |
| Gross Margin (%) | 39.6% | 37.3% |
| Operating Margin (%) | 6.4% | 5.9% |
| Net Profit Margin (%) | 2.4% | 1.3% |
Trends in Profitability Over Time
From the nine months ended September 30, 2023 to 2024, net sales increased by 6.1%, gross profit by 12.7%, operating profit by 13.8%, and net income by 90.1%. This significant increase in net income was primarily driven by improved gross margins across all segments.
Comparison of Profitability Ratios with Industry Averages
The following table compares the company's profitability ratios with industry averages:
| Metric | Company Ratio | Industry Average |
|---|---|---|
| Gross Margin (%) | 39.6% | 35.0% |
| Operating Margin (%) | 6.4% | 5.5% |
| Net Profit Margin (%) | 2.4% | 2.0% |
Analysis of Operational Efficiency
For the nine months ended September 30, 2024, the consolidated selling and administrative expenses were:
| Segment | Selling and Administrative Expenses | Percentage of Net Sales (%) |
|---|---|---|
| Branded Products | $70,486,000 | 27.0% |
| Healthcare Apparel | $30,931,000 | 34.8% |
| Contact Centers | $32,436,000 | 44.2% |
| Consolidated Total | $149,339,000 | 35.5% |
The gross margin rate for the company was 40.4% for the three months ended September 30, 2024, compared to 39.1% for the same period in 2023. The increase in gross margin was primarily due to cost management strategies and improved pricing power in the Branded Products and Healthcare Apparel segments.
Overall, the profitability metrics indicate a strong performance relative to industry averages, with significant improvements in margins and net income driven by effective cost management and sales growth.
Debt vs. Equity: How Superior Group of Companies, Inc. (SGC) Finances Its Growth
Debt vs. Equity: How Superior Group of Companies, Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, the company reported total long-term debt of $31.0 million and short-term debt of $40.3 million. This reflects a decrease in net debt payments to $9.3 million for the nine months ended September 30, 2024, compared to $47.8 million in the same period of 2023.
Debt-to-Equity Ratio
The debt-to-equity ratio as of September 30, 2024, stood at 0.16, which is significantly lower than the industry average of approximately 0.5. This indicates a conservative approach to leveraging.
Recent Debt Issuances and Credit Ratings
In 2024, the company engaged in $31.0 million in borrowings, primarily utilizing its revolving credit facility. The credit ratings have improved, with a current rating of Baa3 from Moody's, reflecting a stable outlook.
Balancing Debt Financing and Equity Funding
The company has strategically balanced its financing by maintaining a low reliance on debt while utilizing equity funding for growth. For instance, cash dividends paid in 2024 amounted to $7.0 million, representing a commitment to returning value to shareholders while managing debt levels effectively.
| Financial Metric | Value (2024) | Value (2023) | Industry Average |
|---|---|---|---|
| Total Long-term Debt | $31.0 million | $40.3 million | N/A |
| Total Short-term Debt | $40.3 million | $51.8 million | N/A |
| Debt-to-Equity Ratio | 0.16 | 0.21 | 0.5 |
| Net Debt Payments | $9.3 million | $47.8 million | N/A |
| Cash Dividends Paid | $7.0 million | $6.9 million | N/A |
Assessing Superior Group of Companies, Inc. (SGC) Liquidity
Assessing Superior Group of Companies, Inc. Liquidity
Current and Quick Ratios
The current ratio for the nine months ended September 30, 2024, is 1.55, compared to 1.40 for the same period in 2023. The quick ratio is 0.95 for 2024, up from 0.85 in 2023. These ratios indicate a strengthening liquidity position over the year.
Analysis of Working Capital Trends
Working capital for the nine months ended September 30, 2024, stands at $35.2 million, an increase from $30.4 million in 2023, reflecting improved operational efficiency and cash management strategies.
Cash Flow Statements Overview
The following table summarizes the cash flows from operating, investing, and financing activities for the nine months ended September 30, 2024, and 2023:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $24,497 | $59,388 |
| Net cash used in investing activities | ($2,911) | ($4,023) |
| Net cash used in financing activities | ($22,400) | ($55,455) |
| Net increase (decrease) in cash and cash equivalents | ($1,523) | $7 |
Potential Liquidity Concerns or Strengths
Despite the decrease in net cash provided from operating activities, the decrease in net cash used in financing activities indicates a potential strength in liquidity management. The company has managed to reduce its interest expenses to $4.9 million in 2024 from $7.7 million in 2023, reflecting a decrease in borrowings and interest rates .
Is Superior Group of Companies, Inc. (SGC) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will examine key valuation ratios and stock performance metrics.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 21.5 based on a trailing twelve months (TTM) net income of $9.9 million and a market capitalization of approximately $213 million.
Price-to-Book (P/B) Ratio
The P/B ratio is 1.8, calculated using a book value of equity of approximately $121.1 million and a current stock price of $21.00.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is 8.0, derived from an enterprise value of approximately $215 million and an EBITDA of $26.8 million.
Stock Price Trends
Over the past 12 months, the stock price has fluctuated between $15.00 and $25.00. The stock price was $21.00 as of the last trading session.
Dividend Yield and Payout Ratios
The current dividend yield is 2.0%, with annual dividends declared at $0.42 per share. The payout ratio is approximately 25% of net income.
Analyst Consensus on Stock Valuation
The consensus among analysts is a hold rating, reflecting a balanced view of the company's growth potential against its current valuation metrics.
| Metric | Value |
|---|---|
| P/E Ratio | 21.5 |
| P/B Ratio | 1.8 |
| EV/EBITDA Ratio | 8.0 |
| 12-Month High Stock Price | $25.00 |
| 12-Month Low Stock Price | $15.00 |
| Current Stock Price | $21.00 |
| Dividend Yield | 2.0% |
| Annual Dividend | $0.42 |
| Payout Ratio | 25% |
| Analyst Consensus | Hold |
Key Risks Facing Superior Group of Companies, Inc. (SGC)
Key Risks Facing SGC
The financial health of the company is influenced by a variety of internal and external risk factors that can significantly impact its operations and profitability.
Overview of Internal and External Risks
- Industry Competition: The company operates in a highly competitive market, facing pressure from both established players and new entrants. This competition can lead to price wars and reduced margins.
- Regulatory Changes: Changes in government regulations, particularly in labor laws and environmental standards, can impact operational costs and compliance expenses.
- Market Conditions: Fluctuations in market demand, influenced by economic downturns or changes in consumer preferences, can affect sales volumes and profitability.
Operational Risks
Operational risks include disruptions in manufacturing processes and supply chain issues. For instance, civil unrest in regions where the company manufactures its products, such as Haiti, poses a risk of facility damage and operational interruptions.
Financial Risks
Financial risks stem from interest rate fluctuations and credit availability. The company's interest expense decreased from $7.7 million in 2023 to $4.9 million in 2024, reflecting a reduction in debt and improved terms.
Strategic Risks
Strategically, the company faces challenges in identifying acquisition targets and successfully integrating them. The ability to manage expanding operations while maintaining quality and customer satisfaction is crucial for long-term success.
Mitigation Strategies
The company has implemented several strategies to mitigate risks:
- Cost Management: Focus on reducing selling and administrative expenses, which increased by 10.5% year-over-year.
- Diversification: Expanding product lines and customer bases to reduce dependence on any single market segment.
- Robust Supply Chain Management: Establishing multiple suppliers and production sites to minimize the risk of supply chain disruptions.
Financial Data Overview
| Financial Metric | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Income | $9.9 million | $5.2 million | $4.7 million | 90.1% |
| EBITDA | $26.8 million | $23.6 million | $3.3 million | 13.8% |
| Net Sales | $420.3 million | $396.1 million | $24.2 million | 6.1% |
| Interest Expense | $4.9 million | $7.7 million | ($2.8 million) | (36.1%) |
| Income Tax Expense | $1.9 million | $0.4 million | $1.5 million | 400.0% |
Overall, the company's ability to navigate these risks effectively will be critical in maintaining its financial health and achieving sustained growth in the future.
Future Growth Prospects for Superior Group of Companies, Inc. (SGC)
Future Growth Prospects for Superior Group of Companies, Inc.
Analysis of Key Growth Drivers
The company is focusing on several key growth drivers which include product innovations, market expansions, and strategic acquisitions. For the three months ended September 30, 2024, net sales increased by 10.0%, amounting to $149.7 million compared to the same period in 2023. This growth was largely driven by the Branded Products segment, which saw net sales rise by 10.8% or $9.0 million, and the Healthcare Apparel segment, which increased by 11.4% or $3.4 million.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, the company reported a consolidated net sales growth of 6.1%, reaching $420.3 million, up from $396.1 million in the prior year. This growth is projected to continue into 2025, with analysts estimating that revenue could reach approximately $450 million based on current trends and performance.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has initiated a new stock repurchase program authorized for up to $10 million to enhance shareholder value. This initiative reflects a strategic move to optimize capital structure while potentially boosting earnings per share. Additionally, partnerships in the healthcare sector are expected to leverage the company’s capabilities, increasing market penetration.
Competitive Advantages That Position the Company for Growth
Competitive advantages include a diversified product portfolio across Branded Products, Healthcare Apparel, and Contact Centers, which collectively generated significant EBITDA of $26.8 million for the nine months ended September 30, 2024. The company has also improved its gross margin rate to 39.6% from 37.3% in the previous year, indicating enhanced operational efficiency.
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Growth ($ Change) | Growth (%) |
|---|---|---|---|---|
| Branded Products | $92,547 | $83,512 | $9,035 | 10.8% |
| Healthcare Apparel | $33,025 | $29,649 | $3,376 | 11.4% |
| Contact Centers | $25,038 | $24,121 | $917 | 3.8% |
| Total Consolidated | $149,690 | $136,126 | $13,564 | 10.0% |
In summary, the company’s strategic focus on product innovation, market expansion, and efficient capital management positions it favorably for continued growth as evidenced by its recent financial performance and future projections.
Superior Group of Companies, Inc. (SGC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Superior Group of Companies, Inc. (SGC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Superior Group of Companies, Inc. (SGC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Superior Group of Companies, Inc. (SGC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.