Superior Group of Companies, Inc. today announced its third quarter operating results for 2020, reporting net sales up 43 percent. The Seminole, Florida-based group operates in the promotional products market through its subsidiaries, distributors BAMKO (PPAI 242148, D11), Tangerine Promotions, Ltd. (PPAI 439779, D1) and Public Identity, Inc. (PPAI 230372, D1).
The company reported that for the third quarter ending September 30, net sales increased to $127.8 million, compared to third quarter 2019 net sales of $89.5 million. Its pretax income was $12.1 million compared to $4.6 million in the same quarter last year, and net income was $10 million, or $0.63 per diluted share, compared to $3.9 million, or $0.26 per diluted share, for the third quarter of 2019.
“Our third quarter continued the robust momentum of the first half of the year,” said CEO Michael Benstock in a news release. “The dedication and relentlessness of our team members has again yielded positive results. Our pre-existing strategy of selling to a diverse range of customers remains in place and bodes well for our future, especially as we continue to provide products and services to many essential businesses in all of our SGC segments. Both our uniform and promotional products segments have strong opportunity pipelines and backlogs.”
On today’s earnings call, BAMKO COO/CFO Jake Himelstein said, “We had another remarkable quarter at BAMKO with sales up 67 percent to $44.2 million in the third quarter compared to the prior year period. Those results were driven by a mix of traditional branded merchandise as well as PPE that helped contribute $19.4 million to that third-quarter total.” He adds, “It is becoming increasingly difficult to separate PPE sales from traditional uniform or promotional product sales, as many customers are placing PPE orders along with promotional products and uniforms. We believe the provision of PPE items to our customers may become the new normal, and thus a large part of our recurring business with key customers, particularly in the retail space. For the third quarter, uniforms and related products net sales increased 33.2 percent to $73.2 million; $13.9 million of that was PPE vs $800,000 in Q3 last year.”
Looking ahead, Himelstein anticipates PPE product orders starting to slow somewhat with traditional promotional product orders gradually returning. “Further evidence of this is that the percentage of BAMKO’s backlog comprising traditional promotional products was less than 40 percent at the end of Q2 vs greater than 60 percent at the end of Q3. BAMKO’s results for the third quarter are all the more impressive against the backdrop of the promotional products industry. It is estimated that the industry experienced a downturn that was greater than 35 percent so far this year,” he said.
Looking across Superior Group of Companies, Benstock added, “This year we expect to report more than $500 million in sales with over $100 of that being PPE sales. I qualify that by saying it’s dependent upon orders not being delayed and the continued flow of incoming orders, but we are relatively confident. When we did our budgeting in November and December of 2019, we expected 2020 to be $400 million in sales and now we know it will be greater than $500 million. For 2021, on a consolidated basis and excluding unexpected events, net sales are expected to be in the range of $450 million. This assumes PPE sales will taper off across all divisions.”
