Superior Group (NASDAQ: SGC) sees 2025 profit drop despite steady sales
Superior Group of Companies reported essentially flat 2025 revenue of
Branded Products net sales rose 2.2% to
The company returned capital via
Management highlights exposure to tariffs, trade agreements and geopolitical risk, especially given heavy sourcing from China and manufacturing in countries such as Haiti, as well as competition across all segments. The company employed about 6,520 full‑time staff worldwide as of December 31, 2025.
Positive
- None.
Negative
- Profitability deterioration: 2025 net income declined 41.7% to
$7.0 million and EBITDA fell 24.5% to$25.7 million , as gross margins compressed across all three operating segments despite essentially flat consolidated revenue.
Insights
Profitability declined sharply in 2025 despite flat revenue.
Superior Group of Companies held consolidated net sales nearly flat at
Segment trends were mixed: Branded Products grew modestly, aided by the 3 Point acquisition, while Healthcare Apparel and Contact Centers shrank. Margin pressure stemmed from higher product and labor costs and an unfavorable mix, compounded by the Jamaica contact center closure. Interest expense declined, but not enough to offset operating weakness.
Capital allocation remained shareholder-friendly, with
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
For the transition period from ____________ to _______________
Commission File Number
SUPERIOR GROUP OF COMPANIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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(Address of Principal Executive Offices, including Zip Code)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
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Securities registered pursuant to Section 12(g) of the Act: N/A
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Non-accelerated filer ☐ | Smaller Reporting Company | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
At June 30, 2025, the aggregate market value of the registrant’s common shares held by non-affiliates, computed by reference to the last sales price of $10.30 as reported by the Nasdaq Stock Market, was approximately $
The number of shares of common stock outstanding as of February 28, 2026 was
Documents Incorporated by Reference:
Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission not later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2025, relating to its 2026 Annual Meeting of Shareholders, are incorporated by reference to furnish the information required by Items 10, 11, 12, 13 and 14 of Part III.
TABLE OF CONTENTS
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| PART I |
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| Item 1. |
Business |
2 |
| Item 1A. |
Risk Factors |
7 |
| Item 1B. |
Unresolved Staff Comments |
20 |
| Item 1C. | Cybersecurity | 20 |
| Item 2. |
Properties |
21 |
| Item 3. |
Legal Proceedings |
21 |
| Item 4. |
Mine Safety Disclosures |
21 |
| PART II |
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| Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
22 |
| Item 6. |
Reserved |
23 |
| Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
24 |
| Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
34 |
| Item 8. |
Financial Statements and Supplementary Data |
35 |
| Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
71 |
| Item 9A. |
Controls and Procedures |
71 |
| Item 9B. |
Other Information |
72 |
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 72 |
| PART III |
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| Item 10. |
Directors, Executive Officers and Corporate Governance |
73 |
| Item 11. |
Executive Compensation |
73 |
| Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
73 |
| Item 13. |
Certain Relationships and Related Transactions and Director Independence |
73 |
| Item 14. |
Principal Accountant Fees and Services |
73 |
| PART IV |
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| Item 15. |
Exhibits and Financial Statement Schedules |
74 |
| Item 16. |
Form 10-K Summary |
77 |
| SIGNATURES |
78 |
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PART I
Special Note Regarding Forward-Looking Statements
Certain matters discussed in this Form 10-K are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by use of the words “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “potential,” or “plan” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements in this Form 10-K may include, without limitation: (1) projections of revenue, income, and other items relating to our financial position and results of operations, including short term and long term plans for cash, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations and (4) statements of expected industry and general economic trends.
Such forward-looking statements are subject to certain risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include, but are not limited to, the following: the impact of competition; uncertainties related to tariffs, duties, trade wars and related matters, supply disruptions, inflationary environments (including with respect to shipping costs and the cost of finished goods and raw materials and shipping costs), employment levels (including labor shortages), and general economic and political conditions in the areas of the world in which the Company operates or from which it sources its supplies or the areas of the United States of America (“U.S.” or “United States”) in which the Company’s customers are located; changes in the healthcare, retail chain, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, discover liabilities associated with such businesses during the diligence process, successfully integrate any acquired businesses, or successfully manage our expanding operations; the price and availability of raw materials; attracting and retaining senior management and key personnel; the Company’s ability to maintain effective internal control over financial reporting; and other factors described in the Company’s filings with the Securities and Exchange Commission (the "SEC"), including those risks described in Item 1A of this Annual Report on Form 10-K for the fiscal year ended December 31, 2025 entitled "Risk Factors" and the other disclosure contained herein. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this Form 10-K and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.
Item 1. Business
Overview
Superior Group of Companies, Inc. (together with its subsidiaries, “the Company,” “Superior,” “we,” “our,” or “us”) was organized in 1920 and was incorporated in 1922 as a New York company under the name Superior Surgical Mfg. Co., Inc. In 1998, Superior Surgical Mfg. Co. changed its name to Superior Uniform Group, Inc. and redomiciled to Florida. Effective on May 3, 2018, Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc.
Superior is comprised of three reportable business segments: (1) Branded Products, (2) Healthcare Apparel, and (3) Contact Centers.
Superior’s Branded Products segment, primarily through its signature marketing brands BAMKO® and HPI®, produces and sells customized merchandising solutions, promotional products and branded uniform programs. Branded products are manufactured through third parties or in Superior’s own facilities, and are sold to customers in a wide range of industries, including retail chain, food service, entertainment, technology, transportation and other industries. The segment currently has sales offices or operations in the United States, Canada and Brazil, with support services in China and India.
Superior’s Healthcare Apparel segment, primarily through its portfolio of brands Wink® and Fashion Seal Healthcare®, its trade name CID Resources and its license of Carhartt Medical, manufactures (through third parties or in its own facilities) and sells a wide range of healthcare apparel, such as scrubs, lab coats, protective apparel and patient apparel. This segment sells its products to healthcare laundries, dealers, distributors, retailers and consumers primarily in the United States.
Superior’s Contact Centers segment, through multiple The Office Gurus® entities (collectively, "TOG"), including subsidiaries in El Salvador, Belize, Dominican Republic, the United States and Jamaica until its closure on June 15, 2025, provides outsourced, nearshore and onshore business process outsourcing, contact and call-center support services to North American customers.
Products
The Company produces and manufactures (through third parties or in its own facilities) and sells a wide range of promotional products and branded uniforms in its Branded Products segment and healthcare apparel and accessories in its Healthcare Apparel segment.
The Company’s principal products segments are:
Branded Products Segment:
Customized products to support:
• Branded marketing programs;
• Gifts with purchase;
• Branded uniform programs;
• Corporate awards, incentives and recognition programs;
• Event promotions;
• Employee and consumer rewards and incentives; and
• Specialty packaging and displays.
Healthcare Apparel Segment:
Career and service apparel for personnel of hospitals and healthcare facilities, such as:
• Fashionable scrubs;
• Institutional scrubs;
• Laboratory coats;
• Patient gowns;
• Miscellaneous products for use by linen suppliers and industrial launderers (e.g. industrial laundry bags);
• Clean room apparel;
• Personal protective equipment (e.g.: isolation gowns and barrier fabric lab wear); and
• Other mission-critical apparel to healthcare laundries, institutions and professionals.
Our products are either distributed through our distribution centers in the United States or shipped directly from our vendors to our customers.
For a depiction of net sales from external customers and Segment EBITDA by segment for the years ended December 31, 2025 and 2024, please refer to Note 2 to our Consolidated Financial Statements included in Part II, Item 8 (“Financial Statements and Supplementary Data”) (collectively referred to as “Financial Statements,” and individually referred to as “statements of comprehensive income (loss),” “balance sheets,” “statements of shareholders’ equity,” and “statements of cash flows” herein).
During the years ended December 31, 2025 and 2024, our Branded Products segment accounted for approximately 64% and 62%, respectively, of net sales. During the years ended December 31, 2025 and 2024, our Healthcare Apparel segment accounted for approximately 20% and 21%, respectively, of net sales.
For more information on our reportable business segments, please refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Business Outlook,” which disclosure is incorporated herein by reference.
Services
Through the recruitment and employment of highly qualified English, Spanish and bilingual-speaking agents, we provide outsourced, nearshore and onshore business process outsourcing, contact and call-center support services to North American customers in our Contact Centers segment. During the years ended December 31, 2025 and 2024, our Contact Centers segment accounted for approximately 16% and 17%, respectively of net sales.
Competition
Superior competes in its Branded Products segment with a multitude of national and regional companies, such as, BDA, Inc., HALO Branded Solutions, Inc., Staples, Inc., Cimpress PLC, HH Global Group Limited, Lands’ End, Inc. and Workwear Outfitters, LLC. Superior also competes with local firms in most major metropolitan areas. The nature and degree of competition varies with the customer and the market. We believe our creative services, product development, proprietary web and technology capabilities and extensive global sourcing network, along with our major brands, enable us to be competitive and grow in this market.
Major competitors for our Healthcare Apparel segment include companies such as Medline Industries, Inc., Careismatic Brands, Barco Uniforms, Inc., FIGS, Inc., Encompass Medical and Standard Textile Co., Inc. We are a significant supplier of patient and caregiver apparel to hospitals, laundries and distributors that service hospitals and consumers. We believe that the strength of our brands and marketing, coupled with the quality of our products, allows us to compete effectively.
The market in which our Contact Centers segment operates has evolved into a global multi-billion dollar marketplace that is highly competitive and fragmented. TOG’s competitors in the Contact Centers segment range in size from very small firms offering specialized services or short-term project completion to very large firms, and include the in-house operations of many customers and potential customers. We compete directly and indirectly with various companies that provide contact center and other business process solutions on an outsourced basis such as TaskUs, Inc., Transparent BPO, Concentrix + Webhelp, Focus Services LLC, Ubiquity, CCI and RDI. TOG also competes with local entities in other offshore locations. The list of potential competitors includes both publicly traded and privately held companies.
Resources Material to Our Business
Raw Materials
The principal fabrics used in the manufacture of finished apparel goods for Superior’s Branded Products segment and Healthcare Apparel segments are cotton, polyester, spandex, cotton-synthetic and poly-synthetic blends. The majority of such fabrics are sourced in China. If Superior or its suppliers are unable to source raw materials from China, it could significantly disrupt Superior’s business as it also would for many of our competitors.
Superior does not have a concentration of suppliers of finished apparel in any single country or region of the world, however, it does contract to manufacture or source the majority of its apparel in the following countries: Bangladesh, China, Haiti, Madagascar, Vietnam and the United States. Additionally, we generally source or manufacture apparel in parts of the world that may be affected by economic uncertainty, political unrest, labor disputes, health emergencies, natural disasters or the imposition of duties, tariffs or other import regulations by the United States. The Company believes that its vast redundant network of suppliers, including its own manufacturing facilities in Haiti, provide sufficient capacity to mitigate most dependency risks on a single supplier.
The Branded Products segment also relies on the supply of other types of raw materials, including plastic, glass and metal. The vast majority of these raw materials are principally sourced from China, either directly by BAMKO or its suppliers. If we are unable to continue to obtain our raw materials and finished products from China or if our suppliers are unable to source raw materials from China, it could significantly disrupt our business.
Prices within the promotional products industry can be directly affected by the cost of raw materials. The market for promotional products is price sensitive and has historically exhibited price and demand cyclicality. The Branded Products segment has flexibility in its suppliers, as other suppliers of the same or similar products are widely available. Additionally, the nature of the promotional products industry is such that should specific types of raw materials undergo significant cost increases, it is possible that alternative products using different materials could be utilized for similar promotional activities. However, if cost increases cannot be entirely passed on to customers and alternative suppliers or suitable product alternatives are unavailable, profit margins could decline.
Intellectual Property
Superior owns and uses several trade names, trademarks and service marks relating to its brands that have significant value and are instrumental to its ability to market its products. Superior’s most significant trade names are BAMKO® and HPI® within the Branded Products segment, CID Resources within the Healthcare Apparel segment and The Office Gurus® within the Contact Centers segment. Superior’s most significant trademarks, which are critically important to the marketing and operation of Superior’s Healthcare Apparel segment, are Fashion Seal Healthcare® and Wink®.
Seasonal Fluctuations
Our results of operations have not historically reflected material seasonal tendencies and we do not believe that seasonal fluctuations will have a material impact on us in the foreseeable future.
Effects of Compliance with Government Regulations
Trade Regulations
As disclosed above, the Company’s suppliers generally source or manufacture finished goods in parts of the world that may be affected by the imposition of duties, tariffs or other import regulations by the United States. The Company believes that its redundant network of suppliers, including its own manufacturing facilities in Haiti, provide sufficient capacity to mitigate any dependency risks on a single supplier.
The Branded Products segment relies on raw materials that are principally sourced from China, either directly by BAMKO or its suppliers. If we are unable to continue to obtain our raw materials and finished products from China or if our suppliers are unable to source raw materials from China, it could significantly disrupt our business. Further, we are affected by economic, political and other conditions in China and the United States, including those resulting in the imposition or increase of import duties, tariffs and other import regulations and those relating to widespread health emergencies and deteriorating diplomatic relations with China, which could have a material adverse effect on this business segment. See “Risk Factors - Changes to trade regulation, quotas, duties, tariffs or other restrictions caused by the changing U.S. and geopolitical environments or otherwise, such as those with respect to China, which may materially harm our revenue and results of operations, such as by increasing our costs and/or limiting the amount of products that we can import.”
Environmental Matters
Compliance with federal, state, and local laws regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has had no material effect upon our operations or earnings, capital expenditures or competitive position and we do not expect it to have a material impact in the foreseeable future.
Human Capital Resources
The Company’s key human capital management objectives are to attract, retain and develop quality talent. To support these objectives, the Company’s human resources initiatives are designed to: keep people safe and healthy; enhance the Company’s culture; acquire and retain diverse talent; reward and support employees through competitive pay, benefits and other programs; and develop talent to prepare them for critical roles and leadership positions.
As of December 31, 2025, the Company had approximately 6,520 employees worldwide, of which all were full-time employees. As of December 31, 2025, approximately 720 employees were employed in the U.S. and approximately 5,800 employees were employed in foreign countries. The Contact Centers segment has the Company’s largest labor force at approximately 3,900 employees as of December 31, 2025.
Available Information
The Company maintains an internet website at the following address: www.superiorgroupofcompanies.com. The information on the Company’s website is not incorporated by reference in this annual report on Form 10-K.
We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the SEC in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and Section 16 filings, and amendments thereto, by our officers, directors and 10% shareholders. We make this information available on our website free of charge as soon as reasonably practicable after we or they electronically file the information with, or furnish it to, the SEC. We also provide electronic copies of such filings free of charge upon request.
Item 1A. Risk Factors
Our business, operations and financial condition are subject to various risks, and many of those risks are driven by factors that we cannot control or predict. The following discussion addresses those risks that management believes are the most significant. You should take these risks into account in evaluating or making any investment decision involving the Company. Additional risks and uncertainties not presently known or that we currently believe to be less significant may also adversely affect us.
Risks Relating to Our Business and Operations
Shortages of sourced goods or raw materials from suppliers, interruptions in our manufacturing, and local conditions in the countries in which we operate could adversely affect our results of operations.
An interruption in any of our supply sources or facilities could adversely affect our results of operations until alternate sources or facilities can be secured. Principal raw materials used to manufacture the Company’s products include cotton, polyester, spandex, cotton-synthetic, poly-synthetic blends, textiles, plastic, glass, fabric and metal.
The majority of such raw materials are sourced in China, either directly by us or our suppliers. If we are unable to source our raw materials and finished products from China or if our suppliers are unable to source raw materials from China, it could significantly disrupt our business. Even if we or our suppliers are able to source raw materials from China, we or they may face increased import duties as a result of changes in U.S. trade policy. See “Risks Relating to Our Industries - Changes to trade regulation, quotas, duties, tariffs or other restrictions caused by the changing U.S. and geopolitical environments or otherwise, such as those with respect to China, which may materially harm our revenue and results of operations, such as by increasing our costs and/or limiting the amount of products that we can import.”
Furthermore, the Company and the Company’s suppliers generally source or manufacture finished goods in parts of the world that have been and may be in the future affected by economic uncertainty, political unrest, logistical challenges (such as port strikes and embargos), foreign currency fluctuations, labor disputes, health emergencies, natural disasters, or the imposition of duties, tariffs or other import regulations by the United States or other countries, any of which could result in additional cost or limit our supply of necessary goods and raw materials.
See also “Risks Relating to Our Industries - Increases in the price of finished goods, raw materials and labor used to manufacture our products could materially increase our costs and decrease our profitability.”
Our success depends upon the continued protection of our trade names, trademarks and other intellectual property rights and we may be forced to incur substantial costs to maintain, defend, protect and enforce our intellectual property rights.
Our owned intellectual property and certain of our licensed intellectual property have significant value and are instrumental to our ability to market our products. Our most significant trade names are BAMKO® and HPI® within the Branded Products segment, CID Resources within the Healthcare Apparel segment and The Office Gurus® within the Contact Centers segment. Our most significant trademarks, which are critically important to the marketing and operation of our Healthcare Apparel segment, are Fashion Seal Healthcare® and Wink®.
We cannot assure that our owned or licensed intellectual property or the operation of our business does not infringe on or otherwise violate the intellectual property rights of others. It is possible that third parties will assert claims against us on such basis, and if they do we cannot assure that we will be able to successfully resolve such claims. In addition, although we seek international protection of our intellectual property, the laws of some foreign countries do not allow us to protect, defend or enforce our intellectual property rights to the same extent as the laws of the United States. We could also incur substantial costs to defend legal actions relating to the use of our intellectual property or prosecute legal actions against others using our intellectual property, either of which could have a material adverse effect on our business, results of operations or financial condition. There is no guarantee that we will be able to negotiate and conclude extensions of existing license agreements on similar economic terms or at all.
Our customers may cancel or decrease the quantity of their orders, which could negatively impact our operating results.
Sales to many of our customers are on an order-by-order basis. If we cannot fill customers’ orders on time, orders may be cancelled and relationships with customers may suffer, which could have an adverse effect on us, especially if the relationship is with a major customer. Furthermore, if any of our customers experience a significant downturn in their business, or fail to remain committed to our programs or brands, such customers may reduce or discontinue purchases from us, which has happened. The reduction in the amount of our products purchased by customers could have a material adverse effect on our business, results of operations or financial condition.
In addition, some of our customers have, from time to time, experienced significant changes and difficulties, including changes in ownership, increased centralization of buying decisions, buyer turnover, restructurings, bankruptcies and liquidations. A significant adverse change in a customer relationship or in a customer’s financial position could cause us to limit or discontinue business with that customer, require us to assume more credit risk relating to that customer’s receivables or limit our ability to collect amounts related to previous purchases by that customer, all of which could have a material adverse effect on our business, results of operations or financial condition.
If we experience problems with our distribution systems, our ability to meet customer expectations, manage inventory and complete sales may be harmed.
Our products are distributed through third-party logistics centers or our own distribution centers, or are shipped directly from our vendors to our customers. Our distribution centers and storage locations, as well as those operated by third parties, include computer-controlled and automated equipment and rely on warehouse management systems to manage supply chain fulfillment operations, which means these operations are complicated, require coordination between distribution centers and storage locations and are subject to a number of risks related to cybersecurity, the proper operation of software and hardware, including connections between software and/or hardware, electronic or power interruptions and other system failures. We maintain business interruption insurance, but it may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution systems, such as the long-term loss of customers or an erosion of our brand image. Moreover, if we are unable to adequately staff our distribution centers to meet demand or if the cost of such staffing is higher than historical or projected costs, our results of operations could be harmed. Our third party logistics providers face similar risks, which translates into downstream risk for us.
Operating a distribution center comes with additional potential risks, such as workplace safety issues and employment claims for the failure or alleged failure to comply with labor laws or laws respecting union organizing activities. If we encounter problems with our distribution systems, our ability to meet customer expectations, manage inventory and fulfillment capacity, complete sales and fulfill orders in a timely manner could be harmed, which could also harm our reputation and our relationship with our customers.
If we are unable to accurately forecast customer demand, manage our inventory and plan for future expenses, our results of operations could be adversely affected.
We base our current and future inventory needs and expense levels on our operating forecasts and estimates of future demand. To ensure adequate inventory supply, we must be able to forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers and manufacturers, based on our estimates of future demand for particular products. Our ability to forecast demand for our products has from time to time been and will continue to be affected by various factors, including unanticipated changes in general market conditions, economic conditions, or consumer confidence in future economic conditions. Failure to accurately forecast demand may result in inefficient inventory supply or increased costs.
In addition, if we experience increased volatility in shipping times from our suppliers and manufacturers and/or production disruptions, we may experience a shortage of products available for sale. Alternatively, if we advance the timing of inventory shipments to mitigate perceived freight transit time volatility or experience sales below our expectations, we may experience excess inventory levels. Inventory levels in excess of customer demand may also result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would cause our gross margin to suffer and could impair the strength and premium nature of our brands.
Further, lower than forecasted demand could result in excess manufacturing capacity, reduced manufacturing efficiencies and/or excess inventories purchased from third parties, which could result in lower margins. Conversely, if we underestimate customer demand, our suppliers and manufacturers may not be able to deliver products to meet our requirements or we may be subject to higher production or shipping costs in order to secure the necessary production. An inability to meet customer demand or delays in the delivery of our products to our customers could result in reputational harm and damaged customer relationships and have an adverse effect on our business, financial condition and results of operations.
We pursue acquisitions from time-to-time to expand our business, which may pose risks to our business.
We selectively pursue acquisitions from time-to-time as part of our growth strategy. We compete with other companies for suitable acquisition candidates, and this competition may increase the price of acquisitions and reduce the number of acquisition candidates available to us. As a result, acquisition candidates may not be available to us in the future on favorable terms.
Acquisition valuations require us to make certain estimates and assumptions to determine the fair value of the acquired entities (including the underlying assets and liabilities). If our estimates or assumptions on the valuation of the acquired assets and liabilities are not accurate, we may be exposed to losses, and/or unexpected usage of cash flow to fund the operations of the acquired businesses that may be material.
Even if we are able to acquire businesses on favorable terms, managing growth through acquisitions is a difficult process that includes integration and training of personnel, combining facility and operating procedures, and taking additional actions related to the integration of acquired businesses within our existing organization.
Unanticipated issues related to integration may result in additional expense and disruption to our operations, and may require a disproportionate amount of our management’s attention, any of which could negatively impact our ability to achieve anticipated benefits, such as revenue and cost synergies.
Growth of our business through acquisitions generally increases our operating complexity and the level of responsibility for both existing and new management personnel. Managing and sustaining our growth and expansion may require substantial enhancements to our operational and financial systems and controls, as well as additional administrative, operational and financial resources. We may be required to invest in additional support personnel, facilities and systems to address the increased complexities associated with business or segment expansion. These investments could result in higher overall operating costs and lower operating profits for the business as a whole. There can be no assurance that we will be successful in integrating acquired businesses or managing our expanding operations.
In addition, although we conduct due diligence investigations prior to each acquisition, there can be no assurance that we will discover or adequately protect against all material liabilities of an acquired business for which we may be responsible as a successor owner or operator.
The failure to identify suitable acquisitions, discover liabilities associated with such businesses in the diligence process, successfully integrate these acquired businesses, or successfully manage our expanding operations, could adversely affect our business, results of operations or financial condition.
In order to finance such acquisitions, we may need to obtain additional funds either through public or private financings, including bank and other secured and unsecured borrowings and/or the issuance of equity or debt securities. There can be no assurance that such financings will be available to us on reasonable terms. Any future issuances of equity securities or convertible debt securities may be dilutive to our shareholders.
If our information technology systems suffer interruptions or failures, including as a result of cyber-attacks, our business operations could be disrupted and our reputation, results of operations and/or financial condition could suffer.
We rely on information technology systems to process transactions, communicate with customers, manage our business and process and maintain information. The measures we have in place to monitor and protect our information technology systems might not provide sufficient protection from catastrophic events, power surges, viruses, malicious software (including ransomware), attempts to gain unauthorized access to data or other types of cyber-based attacks. Cyber-attacks are becoming more frequent, sophisticated, damaging and difficult to predict. Any such event or attack could negatively impact our business operations, such as through product disruptions that result in an unexpected delay in operations, interruptions in our ability to deliver products and services to our customers, loss of confidential or otherwise protected information, corruption of data and expenses related to the repair or replacement of our information technology systems, including payments made in ransomware attacks. Compromising and/or loss of information could result in loss of sales or legal or regulatory claims which could adversely affect our revenues and profits or damage our reputation.
Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business.
In the ordinary course of our business, we might collect and store in our internal and external data centers, cloud services and networks sensitive data, including our proprietary business information and that of our customers, suppliers and business partners, as well as personal information of our customers, employees and others. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years. Despite our security measures, it is impossible for us to eliminate this risk.
Many U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information and other sensitive personal information. For example, all 50 states and several U.S. territories now have data breach laws that require timely notification to affected individuals, and at times regulators, credit reporting agencies and other bodies, if a company has experienced the unauthorized access or acquisition of certain personal information. We will continue to monitor and assess the impact of these laws, and any new ones enacted, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.
Data protection laws enacted outside of the U.S., such as the EU General Data Protection Regulation (the “GDPR”), also might apply to some of our operations or business partners. Legal requirements in these countries relating to the collection, storage, processing and transfer of personal data/information continue to evolve. The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer EU personal data/information, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations. Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection.
The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change, and may require substantial costs to monitor and implement and maintain adequate compliance programs. Failure to comply with U.S. and non-U.S. data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.
Our business may be impacted by unforeseen or catastrophic events, including the emergence of pandemics or other widespread health emergencies, extreme weather events or other natural disasters, terrorist attacks, and other unpredicted events.
The occurrence of unforeseen or catastrophic events, such as the emergence of pandemics or other widespread health emergencies (or concerns over the possibility of such pandemics or emergencies), extreme weather events or other natural disasters, terrorist attacks, or other unpredicted events, could create economic and financial disruptions, and could lead to operational difficulties that could impair our ability to source and supply products and services and manage our businesses, and could negatively impact our customers’ ability or willingness to purchase our products and services.
Some of our locations, as well as those of our suppliers, are in locations where they are exposed to hurricanes, earthquakes, floods and other extreme weather events. For example, our corporate headquarters is located in Florida and we have a manufacturing facility located in Haiti. Extreme weather and geologic events could make it difficult or impossible to manufacture or deliver products to our customers (including by affecting the ability of our workers to perform at full capacity for a period of time), receive production materials from our suppliers, or perform critical functions, which could adversely affect our business globally or in certain regions. While we multi-source many of our programs on many of our materials, which we believe better enables us to respond to these types of events, we cannot be sure that our plans will fully protect us from all such disruptions.
We are subject to international, federal, national, regional, state, local and other laws and regulations, and failure to comply with them may expose us to potential liability.
We are subject to international, federal, national, regional, state, local and other laws and regulations affecting our business, including but not limited to those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Food, Drug, and Cosmetic Act, the rules and regulations of the Food and Drug Administration (FDA), various anti-corruption and anti-bribery laws, various securities laws and regulations including but not limited to the Exchange Act, the Securities Act of 1933, and the rules of the Nasdaq Stock Market on which our common stock is traded, various labor, workplace and related laws, and environmental laws and regulations. There also are multiple climate change-related laws and regulations in the United States and internationally that either have gone into effect or could go into effect. The cost to comply with such laws and regulations could be significant and have an adverse effect on our results of operations. Failure to comply with such laws and regulations may expose us to potential liability and have an adverse effect on our results of operations.
Our business may be impacted by the non-performance of manufacturers to whom we made advance payments.
We have entered into agreements with manufacturers in which we make payments for raw materials and services in advance of the shipment and delivery of finished products. In the event that advance payments are made to manufacturers that do not have the ability to satisfy their contractual obligations due to their financial instability, geopolitical unrest or other factors, we may incur unrecoverable losses which could have a material adverse effect on our business, results of operations and financial condition.
Implementation of technology initiatives could disrupt our operations in the near term and fail to provide the anticipated benefits.
As our business grows, we continue to make significant investments in our technology, including in the areas of warehouse management, enterprise risk management and product design. The costs, potential problems and interruptions associated with the implementation of technology initiatives could disrupt or reduce the efficiency of our operations in the near term. They may also require us to divert resources from our core business to ensure that implementation is successful. In addition, new or upgraded technology might not provide the anticipated benefits, might take longer than expected to realize the anticipated benefits, might fail or might cost more than anticipated.
Failure to preserve positive labor relationships with our employees could adversely affect our results of operations.
Our operations rely heavily on our employees, and any labor shortage, disruption or stoppage caused by poor relations with our employees could reduce our operating margins and income. While we believe that our employee relations are good, and very few of our employees are currently subject to collective bargaining agreements, unions have traditionally been active in the U.S. apparel industry. Our workforce has been subject to union organization efforts from time to time, and we could be subject to future unionization efforts as our operations expand or change. Unionization of our workforce could increase our operating costs or constrain our operating flexibility.
Risks Relating to Our Industries
Increases in the price of finished goods, raw materials and labor used to manufacture our products could materially increase our costs and decrease our profitability.
Principal raw materials used to manufacture the Company’s finished goods include cotton, polyester, spandex, cotton-synthetic, poly-synthetic blends, textiles, plastic, glass, fabric and metal. The prices we pay for these fabrics and components are dependent on the market price for the raw materials used to produce them, including cotton and chemical components of synthetic fabrics including such raw materials as chemicals and dyestuffs, in addition to any import duties imposed on those fabrics and components that are imported.
Finished goods and raw materials are subject to price volatility caused by weather, supply conditions, government regulations, economic and political climate, currency exchange rates, labor costs, and other unpredictable factors. Fluctuations in petroleum prices may also influence the prices of related items such as chemicals, dyestuffs and polyester yarn.
An increase in raw material prices would likely increase our cost of sales and decrease our profitability unless we are able to pass the costs on to our customers in the form of higher prices. In addition, if one or more of our competitors is able to reduce their production costs by taking advantage of any reductions in raw material prices or favorable sourcing agreements, we may face pricing pressures from those competitors and may be forced to reduce our prices or face a decline in revenues, either of which could have a material adverse effect on our business, results of operations and financial condition.
We face intense competition within our industries and our revenue and/or profits may decrease if we are not able to respond to this competition effectively.
Customers in the uniform and corporate identity apparel, promotional products, and business process outsourcing industries choose suppliers primarily based upon the quality, price and breadth of products and services offered. We encounter competition from a number of companies in the geographic areas we serve.
Major competitors for our Branded Products segment include companies such as BDA, Inc., HALO Branded Solutions, Inc., Staples, Inc., Cimpress PLC, HH Global Group Limited, Lands’ End, Inc. and Workwear Outfitters, LLC.
Major competitors for our Healthcare Apparel segment include companies such as Medline Industries, Inc., Careismatic Brands, Barco Uniforms, Inc., FIGS, Inc., Encompass Medical and Standard Textile Co., Inc.
Major competitors for our Contact Centers segment include companies such as TaskUs, Inc., Transparent BPO, Concentrix + Webhelp, Focus Services LLC, Ubiquity, CCI and RDI.
We also compete with a multitude of foreign, regional and local competitors that vary by market. If our existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower our prices, which would adversely affect our operating results. Similarly, if customers or potential customers perceive the products or services offered by our existing or future competitors to be of higher quality than ours or part of a broader product mix, our revenues may decline, which would adversely affect our operating results.
Global, national or regional economic slowdowns, high unemployment levels, fewer jobs, changes in tax laws or cost increases might have an adverse effect on our operating results.
Many of our products are used by workers and, as a result, our business prospects are dependent upon levels of employment and overall economic conditions on a global, national and regional level, among other factors. Our revenues are impacted by our customers’ opening and closing of locations and reductions and increases in headcount, including from voluntary turnover and increased automation. If we are unable to offset these effects, such as through the addition of new customers or the expansion of relationships with existing customers through a broader mix of product and service offerings, our revenue growth rates will be negatively impacted. Likewise, increases in tax rates or other changes in tax laws or other regulations can negatively affect our profitability.
While we do not believe that our exposure is greater than that of our competitors, we could be adversely affected by increases in the prices of fabric, natural gas, gasoline, wages, employee benefits, insurance costs and other components of product cost unless we can recover such increases through proportional increases in the prices for our products and services. Competitive and general economic conditions might limit our ability and that of our competitors to increase prices to cover any increases in our product cost.
The branded uniforms, healthcare apparel and promotional products industries are subject to pricing pressures that may cause us to lower the prices we charge for our products and adversely affect our financial performance.
Many of our competitors also source their product requirements from developing countries to achieve a lower cost operating environment, possibly with lower costs than our offshore facilities, and those manufacturers may use these cost savings to reduce prices. Some of our competitors have more purchasing power than we do, which may enable them to obtain products at lower costs. To remain competitive, we may adjust our prices and margins from time-to-time in response to these industry-wide pricing pressures.
Additionally, increased customer demands for allowances, incentives and other forms of economic support could reduce our margins and affect our profitability.
Our financial performance will be negatively affected by these pricing pressures if we are forced to reduce our prices and we cannot reduce our product costs proportionally or if our product costs increase and we cannot increase our prices proportionally.
Our results of operations could be adversely affected by economic and political conditions globally and the effects of these conditions on our customers’ businesses and levels of business activity.
Economic and political events in recent years have altered the landscape in which we and other U.S. companies operate in a variety of ways. Inflation and interest rates remain high despite recent abatements.
World events, such as the Russian invasion of Ukraine and the resulting economic sanctions, have impacted the global economy, including by exacerbating inflationary and other pressures. In addition, the joint U.S.-Israeli strikes on Iran in February 2026, as well as other conflicts in the Middle East, could lead to higher oil prices, create supply imbalances in the global markets for oil and natural gas, and have other adverse effects on the global economy. Both of these crises have potentially far-reaching impacts on energy and food markets and global trade.
Conflicts in the Middle East, prolonged inflationary conditions, supply imbalances of oil and natural gas, high and/or increased interest rates, additional sanctions or retaliatory measures related to the Russia-Ukraine crisis or the U.S.-Israeli - Iran crisis, or other situations, could further negatively affect U.S. and international commerce and exacerbate or prolong the period of high energy prices. At this time, the extent and duration of these economic and political events and their effects on the economy and the Company are impossible to predict, but the impact on the Company’s business could be material.
Our manufacturing facilities and warehouses in Haiti are at risk of damage or disruption from civil unrest and other occurrences.
Our Healthcare Apparel segment relies on our manufacturing facilities and warehouses in Haiti for the manufacturing and storage of finished goods. Our manufacturing facilities and warehouses may be damaged or our ability to use or access them may be disrupted as a result of civil unrest or other occurrences in Haiti. Such events may interfere with our manufacturing processes, information systems, telecommunication services, and product delivery for sustained periods and may also make it difficult or impossible for employees to reach our business locations. Damage or destruction that interrupts our manufacturing facilities could adversely affect our reputation, our relationships with our customers, our leadership team’s ability to administer and supervise our business, and/or cause us to incur substantial additional expenditures to repair or replace damaged equipment or facilities or commence production at alternate locations. While we currently have commercial liability insurance, our insurance coverage may not be sufficient. Prolonged disruption of our manufacturing processes in Haiti also may entitle some of our customers to amend or terminate their contracts with us. Worsening conditions in Haiti may also result in the displacement of native Haitians looking for refuge in neighboring Dominican Republic, which may result in the closure of roads and port access which may limit or restrict our normal and recurring business in Haiti. Any of the above factors may adversely affect our business, results of operations and financial condition.
Changes to trade agreements, regulations, tariffs, duties, quotas or other restrictions caused by the changing U.S. and geopolitical environments or otherwise, may materially harm our business, results of operations, financial position and/or cash flows. such as by increasing our costs and/or limiting the amount of products that we can import.
Our operations are subject to various international trade agreements, regulations and preferences, such as the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR), Caribbean Basin Trade Partnership Act (CBTPA), Haitian Hemispheric Opportunity through Partnership Encouragement Act, as amended (HOPE), the Food Conservation and Energy Act of 2008 (HOPE II), the Haiti Economic Lift Program of 2010 (HELP), the African Growth and Opportunity Act (AGOA), the Middle East Free Trade Area Initiative (MEFTA) and the activities and regulations of the World Trade Organization (WTO). Generally, these trade agreements, regulations and preferences benefit our business, but trade agreements and regulations can also impose requirements that have a material adverse effect on our business, revenue and results of operations, such as limiting the countries from which we can purchase raw materials, limiting the products that qualify as duty free, and setting quotas, duties and/or tariffs on products that may be imported into the United States from a particular country.
To the extent trade agreements benefit our business, we can give no assurances that these benefits will continue to the same extent or at all. The African Growth and Opportunity Act (AGOA), Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE) and Haiti Economic Lift Program of 2010 (HELP) expired on September 30, 2025 and in February 2026 were retroactively extended until December 31, 2026. If these or other agreements and/or preferences with respect to countries in which we operate are not renewed and/or extended, if these or other agreements and/or preferences are changed, or if limits or restrictions under such agreements or regulations are expanded, the cost of continuing to do business in these countries could materially and adversely impact our results of operations, financial position and cash flows.
In addition, beginning in the second quarter of 2025, significant new and expanded tariffs, reciprocal tariffs and other trade restrictions were imposed by the United States, with selective tariff exemptions, impacting global trade. We purchase or manufacture our products largely in Haiti, China, Madagascar, Vietnam, Pakistan and Bangladesh. The introduction, expansion or continuation of U.S. tariffs on countries from which we source and/or manufacture products, such as China and Vietnam, could have a material adverse impact on our results of operations, financial position and cash flows. In response, in part, to tariffs levied on products imported from China we have shifted some production, and may seek to shift additional production, out of China, which may result in additional costs and disruption to our operations.
Furthermore, certain inbound products in our Branded Products and Healthcare Apparel segments are subject to tariffs assessed on the manufactured cost of goods at the time of import. As a result, we have increased our prices for certain products and may be required to raise those prices further, or raise our prices on other products, which may result in the loss of customers and harm our operating performance.
More generally, if the imposition of or change in tariffs, duties, quotas, regulations or other restrictions, or if the expiration or change of trade agreements or preferences, involving the United States and countries in which our products are manufactured or into which they are imported, increases our costs, and we are unable to share the cost increases with our suppliers or third-party manufacturers or pass along the remaining cost increases to our customers, our results of operations, financial position and/or cash flows may be materially adversely affected. As a result, we may decide to move sourcing and/or manufacturing from the affected countries to countries with more favorable cost structures, which such a move may result in material costs and disrupt our operations.
The apparel industry, including branded uniforms and healthcare, is subject to changing fashion trends and if we misjudge consumer preferences, the image of one or more of our brands may suffer and the demand for our products may decrease.
The apparel industry, including branded uniforms and healthcare, is subject to shifting customer demands and evolving fashion trends and our success is also dependent upon our ability to anticipate and promptly respond to these changes. Failure to anticipate, identify or promptly react to changing trends or styles may result in decreased demand for our products, as well as excess inventories and markdowns, which could result in inventory write-downs or write-offs which may have a material adverse effect on our business, results of operations and financial condition. In addition, if we misjudge consumer preferences, our brand image may be impaired. We believe our products are, in general, less subject to fashion trends compared to many other apparel manufacturers because the majority of what we manufacture and sell are branded uniforms, scrubs and other accessories.
Our Contact Centers business is dependent on the trend toward outsourcing.
Our Contact Centers business and growth within that segment depend in large part on the industry trend toward outsourced customer contact management services. There can be no assurance that this trend will continue, as organizations may elect to perform such services themselves. A significant change in this trend could have a material adverse effect on our business, financial condition and results of operations. We also compete with companies that utilize emerging technologies and assets, such as artificial intelligence and chatbots. These competitors may offer products and services that may, among other things, provide automated alternatives to the services that we provide in the marketplace or otherwise change the way that contact centers engage so as to make our outsourced customer contract management solution less attractive to existing and potential customers or less profitable. We may face increased competition from these competitors as they mature and expand their capabilities.
Risks Relating to Our Indebtedness and Retirement Plan Obligations
Our indebtedness may limit cash flow available to invest in the ongoing needs of our business.
As of December 31, 2025, our total consolidated indebtedness was $93.7 million. Our outstanding indebtedness may have negative consequences on our business, such as requiring us to dedicate a sizable portion of our cash flow from operations to the payment of debt service, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, dividends, stock buybacks and other general corporate purposes, and increasing our vulnerability to adverse economic or industry conditions.
Our credit agreement contains restrictions that limit our flexibility in operating our business.
Our senior secured credit agreement contains various covenants that limit our ability to engage in specified types of transactions. These covenants limit our and our restricted subsidiaries’ ability to, among other things:
• incur additional indebtedness or issue certain preferred shares;
• pay dividends on, repurchase or make distributions in respect of our capital stock, or make other restricted payments;
• make certain investments;
• sell certain assets;
• acquire other businesses;
• create liens;
• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and
• enter into certain transactions with our affiliates.
Substantially all of the operating assets of the Company are pledged as collateral under our credit agreement. Our credit agreement requires compliance with certain financial ratios and covenants and satisfaction of specified financial tests. Failure to meet any financial ratios, covenants or financial tests could result in an event of default under our credit agreement. If an event of default occurs, our lenders could increase our borrowing costs, restrict our ability to obtain additional borrowings under our line of credit, accelerate all amounts outstanding or enforce its interest against collateral pledged under the credit agreement.
We have significant obligations under our unfunded supplemental executive retirement plan, and our available cash flow may be adversely affected in the event that payments become due under it.
The Company is the sponsor of an unfunded supplemental executive retirement plan (“SERP”). In the event that payments become due under the SERP, we will have to use cash flow from operations or other sources to fund our obligations. As of December 31, 2025, we had $15.4 million in unfunded obligations related to the SERP.
Risks Relating to Our Common Stock
Certain existing shareholders have significant control.
At December 31, 2025, our executive officers and directors, and certain of their family members collectively owned approximately 29.6% of our outstanding common stock. As a result, our executive officers and directors, and certain of their family members, have significant influence over the election of our Board of Directors (the "Board" or "Board of Directors"), the approval or disapproval of any other matters requiring shareholder approval, and the affairs and policies of our company.
Our share price may change significantly, and our shareholders may not be able to resell shares of our common stock at or above the price they paid or at all, and they could lose all or part of their investment as a result.
The trading price of our common stock, as reported on the Nasdaq Stock Market, fluctuates due to a number of factors such as those listed in “Risks Relating to Our Business” which may include, but not be limited to, the following, some of which are beyond our control:
• quarterly variations in our results of operations;
• results of operations that vary from the expectations of securities analysts and investors;
• results of operations that vary from those of our competitors;
• changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
• announcements by us, our competitors or our vendors of significant contracts, acquisitions, divestitures, joint marketing relationships, joint ventures or capital commitments;
• announcements by third parties of significant claims or proceedings against us; and
• general domestic and international economic conditions.
Furthermore, the stock market has experienced volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance.
In the past, following periods of market volatility, shareholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
There can be no assurance that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.
Payment of cash dividends on our common stock is subject to our compliance with applicable law and depends on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, business prospects and other factors that our Board may deem relevant. Our credit agreement contains, and the terms of any future indebtedness we incur may contain, limitations on our ability to pay dividends. Although we have paid cash dividends in the past, there can be no assurance that we will continue to pay any dividend in the future.
General Risk Factors
We are subject to periodic litigation in both domestic and international jurisdictions that may adversely affect our financial position and results of operations.
From time-to-time we may be involved in legal or regulatory actions regarding product liability, employment practices, intellectual property infringement, bankruptcies, telemarketing compliance, consumer protections and other litigation or enforcement matters. These proceedings may be in jurisdictions with reputations for aggressive application of laws and procedures against corporate defendants.
We are impacted by trends in litigation, including class-action allegations brought under various consumer protection and employment laws. Due to the inherent uncertainties of litigation in both domestic and foreign jurisdictions, we cannot accurately predict the ultimate outcome of any such proceedings. These proceedings could cause us to incur costs and may require us to devote resources to defend against these claims and could ultimately result in a loss or other remedies, such as product recalls, which could adversely affect our financial position and results of operations.
Volatility in the global financial markets could adversely affect results.
In the past, global financial markets have experienced extreme disruption, including, among other things, volatility in securities prices, diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. There might be further changes or volatility, which could lead to challenges in our business and negatively impact our financial results. Any future tightening of credit in financial markets could adversely affect the ability of our customers and suppliers to obtain financing for significant purchases and operations and could result in a decrease in orders and spending for our products and services. We are unable to predict the likely duration and severity of any disruption in financial markets and adverse economic conditions and the effects they may have on our business and financial condition.
Furthermore, increased inflation could have an adverse impact on our operating and general and administrative expenses. Please see “Risks Related to Our Industries - Our results of operations could be adversely affected by economic and political conditions globally and the effects of these conditions on our customers’ businesses and levels of business activity” above for a description of recent inflationary pressure. During inflationary periods, these costs could increase at a rate higher than our ability to offset them via customer-facing pricing adjustments, alternative supply sources or other measures. Inflation could also have an adverse effect on consumer spending, which could adversely impact demand for our products and services. If our operating and other expenses increase faster than anticipated due to inflation, our financial condition, results of operations and cash flow could be materially adversely affected.
Inability to attract and retain key management or other personnel could adversely impact our business and financial condition.
Our success is largely dependent on the skills, experience and efforts of our senior management and other key personnel. If, for any reason, one or more senior executive or key personnel was not to remain active in our company, or if we were unable to attract and retain senior management or key personnel or our costs to do so increased significantly, our results of operations could be adversely affected.
If we are unable to accurately predict our future tax liabilities, become subject to increased levels of taxation or our tax contingencies are unfavorably resolved, our results of operations and financial condition could be adversely affected.
Changes in tax laws or regulations in the jurisdictions in which we do business, including the United States, or changes in how the tax laws are interpreted, could impact our effective tax rate, restrict our ability to repatriate undistributed offshore earnings, or impose new restrictions, costs or prohibitions on our current practices and reduce our net income and adversely affect our cash flows. For example, recent tax legislation and regulation, including provisions of the 2025 One Big Beautiful Bill Act (“OBBBA”) and potential increases in taxes, make significant changes to the U.S. tax regime and could materially impact how our earnings are taxed.
We are also subject to tax audits in the United States and other jurisdictions and our tax positions may be challenged by tax authorities. Although we believe that our current tax provisions are reasonable and appropriate, there can be no assurance that these items will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposures. Any increase in the amount of taxation incurred as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition.
We may identify a material weakness in internal control in the future, which could result in us not preventing or detecting on a timely basis a material misstatement of the Company’s financial statements.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
If any material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, or our disclosure controls and procedures are determined to be ineffective, we may not be able to prevent or identify irregularities or ensure the fair and accurate presentation of our financial statements included in our periodic reports filed with the U.S. Securities and Exchange Commission. Additionally, the occurrence of, or failure to remediate, a material weakness and any future material weaknesses in our internal control over financial reporting or determination that our disclosure controls and procedures are ineffective may have other consequences that could materially and adversely affect our business, including an adverse impact on the market price of our common stock, potential actions or investigations by the U.S. Securities and Exchange Commission or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation.
We have recognized, and may recognize in the future, impairment charges, which could materially adversely affect our financial condition and results of operations.
We assess our intangible assets, long-lived assets and goodwill for impairment when required by generally accepted accounting principles in the United States (“GAAP”). These accounting principles require that we record an impairment charge if circumstances indicate that the asset carrying values exceed their estimated fair values.
The estimated fair value of our intangible assets and long-lived assets is impacted by general economic conditions in the locations in which we operate. Deterioration in these general economic conditions may result in:
• declining revenue, which can lead to excess capacity and declining operating cash flow;
• reductions in management’s estimates for future revenue and operating cash flow growth;
• increases in borrowing rates and other deterioration in factors that impact our weighted average cost of capital; and
• deteriorating real estate values.
If our assessment of intangible assets, long-lived assets or goodwill indicates an impairment of the carrying value for which we recognize an impairment charge, this may adversely affect our financial condition and results of operations, potentially materially so.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We recognize the increasing volume and sophistication of cyber threats and take our responsibility to protect the information and systems under our purview seriously. We consider cybersecurity threat risks alongside other Company risks as part of our overall risk assessment process. Our cybersecurity processes aim to provide a comprehensive approach to assess, identify, manage, mitigate, and respond to cybersecurity threats.
Our internal professionals collaborate with external subject matter specialists, as necessary. All third parties engaged for such matters are subjected to scrutiny to ensure they satisfy our security standards. We periodically review our third‑party engagements to ensure that the providers maintain the necessary levels of protection and competency, as well as to oversee and identify potential cybersecurity risks and/or threats from such engagements.
In addition, our cybersecurity program operates within a continuous‑improvement model intended to ensure long‑term effectiveness and resiliency. This includes periodic internal reviews and assessments of our controls, follow‑up on corrective actions, incorporation of lessons learned from incidents, and evaluation of emerging threats and technologies. These activities support ongoing enhancements to our processes and help ensure that our cybersecurity capabilities evolve alongside changes in our operating environment and the broader threat landscape.
Cybersecurity Governance
Item 2. Properties
The following table describes the material facilities we owned or leased as of December 31, 2025:
| Location |
Status |
Square Feet |
Uses |
|||
| St. Petersburg, Florida |
Leased |
8,193 | Corporate Office, Branded Products, Healthcare Apparel and Contact Centers |
|||
| Belmopan, Belize |
Leased |
25,970 | Contact Centers |
|||
| Coppell, Texas |
Leased |
114,105 | Healthcare Apparel |
|||
| Eudora, Arkansas |
Leased |
260,000 | Branded Products and Healthcare Apparel |
|||
| Kingston, Jamaica |
Leased |
4,500 | Contact Centers |
|||
| La Libertad, El Salvador |
Owned |
52,591 | Contact Centers |
|||
| Lake Providence, Louisiana |
Leased |
215,000 | Branded Products and Healthcare Apparel |
|||
| Lexington, Mississippi |
Owned |
40,000 | Healthcare Apparel |
|||
| Oak Grove, Louisiana |
Leased |
68,330 | Branded Products |
|||
| Ouanaminthe, Haiti |
Leased |
120,000 | Branded Products and Healthcare Apparel |
|||
| Peachtree Corners, Georgia |
Leased |
23,400 | Branded Products |
|||
| Phoenix, Arizona |
Leased |
116,850 | Branded Products |
|||
| Romeoville, Illinois |
Leased |
28,290 | Branded Products |
|||
| San Ignacio, Belize |
Owned |
11,732 | Contact Centers |
|||
| San Salvador, El Salvador |
Leased |
17,776 | Contact Centers |
|||
| Santiago, Dominican Republic |
Leased |
7,400 | Contact Centers |
|||
| Tigard, Oregon |
Leased |
11,197 | Branded Products |
The Company has an ongoing program designed to maintain and improve its facilities. The Company’s properties have adequate productive capacity to meet the Company’s present needs as well as those of the foreseeable future.
Item 3. Legal Proceedings
We are a party to certain lawsuits in the ordinary course of business. We do not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The principal market on which Superior’s common shares are traded is the Nasdaq Stock Market under the symbol “SGC.”
We declared aggregate cash dividends of $0.56 per share during the fiscal year ended December 31, 2025, which were paid in the first, second, third and fourth quarters of 2025.
We intend to pay regular quarterly distributions to our holders of common shares, the amount of which may change from time to time; however, there can be no assurances that we will in fact pay such distributions on a regular basis. Future distributions will be declared and paid at the discretion of our Board of Directors, and will depend upon cash generated by operating activities, our financial condition, capital requirements, and such other factors as our Board of Directors deem relevant.
Under our credit agreement, if an event of default exists, we may not make distributions to our shareholders. The Company is in full compliance with all terms, conditions and covenants of such agreement.
On February 28, 2026, we had 109 shareholders of record.
Information regarding the Company’s equity compensation plans is incorporated by reference to the information set forth in Item 12 of Part III of this Form 10-K under the section entitled “Equity Compensation Plan Information.”
Issuer Purchases of Equity Securities
The table below sets forth information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock during the three months ended December 31, 2025.
| Period |
Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased (1) as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||
| October 1, 2025 to October 31, 2025 |
- | $ | - | - | ||||||||||||
| November 1, 2025 to November 30, 2025 |
167,806 | 9.15 | 167,806 | |||||||||||||
| December 1, 2025 to December 31, 2025 |
67,980 | 9.93 | 67,980 | |||||||||||||
| Total |
235,786 | 9.37 | 235,786 | $10,105,255 | ||||||||||||
| (1) | For the three months ended December 31, 2025 there were no shares tendered by employees in connection with the exercise of stock options under the Company's shareholder-approved 2022 Equity Incentive and Awards Plan. |
| (2) | On September 19, 2025, the Company entered into a 10b5-1 trading plan (the “Plan”) for the purpose of repurchasing up to a specified number of shares of the Company’s outstanding common stock (the “Repurchase Limit”) in accordance with the $17.5 million share repurchase program ("Program") previously authorized by the Company’s Board of Directors, which was announced by the Company on March 11, 2025. The Plan is intended to comply with Rule 10b5-1(c) under the Exchange Act, as amended. The Plan allows the Company to repurchase shares up to the Repurchase Limit commencing September 20, 2025 and ending on the earlier of the date on which the Repurchase Limit is reached or other events specified in the Plan. Repurchases of common stock under the Plan will be administered through an independent broker and are subject to certain price, market, volume and timing constraints specified in the Plan. |
Unregistered Sales of Equity Securities
None.
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our Financial Statements, which present our results of operations for the years ended December 31, 2025 and 2024, as well as our financial positions at December 31, 2025 and 2024, contained elsewhere in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Special Note Regarding Forward Looking Statements” and “Risk Factors” sections of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Additionally, we use a non-GAAP financial measure to evaluate our results of operations. For important information regarding the use of such non-GAAP financial measure, including reconciliations to the most comparable GAAP measure, see the section titled “Non-GAAP Financial Measure” below.
Business Outlook
Superior is comprised of three reportable business segments: (1) Branded Products, (2) Healthcare Apparel and (3) Contact Centers.
Branded Products
In our Branded Products segment, we produce and sell customized merchandising solutions, promotional products and branded uniform programs to our customers. As a strategic branding partner, we offer our customers customized branding solutions and strategies that generate favorable brand impressions, bolster customer retention and enhance employee engagement. Our products are sold to customers in a wide range of industries, including retail, hotel, food service, entertainment, technology, transportation and other industries. Sales volumes in this segment are impacted by a number of factors, including marketing programs of our customers and turnover of our customers’ employees, often times driven by the opening and closing of locations. From a long-term perspective, we believe that synergies within this segment will create opportunities to cross-sell products to new and existing customers.
Healthcare Apparel
In our Healthcare Apparel segment, we manufacture (through third parties or in our own facilities) and sell a wide range of healthcare apparel, such as scrubs, lab coats, protective apparel and patient gowns. We sell our brands of healthcare service apparel to healthcare laundries, dealers, distributors and retailers primarily in the United States. From a long-term perspective, we expect that demand for our portfolio of brands Wink® and Fashion Seal Healthcare®, our trade name CID Resources and our license of Carhartt Medical, will continue to provide opportunities for growth and increased market share.
Contact Centers
In our Contact Centers segment (also known as The Office Gurus), which operates in El Salvador, Belize, Dominican Republic, the United States and Jamaica until its closure on June 15, 2025, we provide outsourced, nearshore and onshore business process outsourcing, contact and call-center support services to North American customers. These services are also provided internally to the Company’s other two operating segments. The Office Gurus has become an award-winning business process outsourcer offering inbound and outbound voice, email, text, chat and social media support. The nearshore call-center market specifically has grown as businesses look to reduce operating costs while maintaining high-quality customer support. Nearshore operators can provide comparable service to their U.S. counterparts at a fraction of the price. With an environment and career path designed to attract and maintain top talent across all sites, we believe The Office Gurus is positioned well to continue growing this business.
Global Economic and Political Conditions
During 2025, the U.S. government imposed higher tariffs and/or new tariffs which impacted certain sources of the Company’s materials and production. Additionally, the U.S.'s trade agreements and/or preferences with certain countries in Africa, through the African Growth and Opportunity Act (AGOA), and with Haiti, through the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE) and the Haiti Economic Lift Program of 2010 (HELP), expired on September 30, 2025. In February 2026, these agreements were retroactively extended until December 2026. The process and timing for receiving a refund of duties paid in the interim period between expiration and when retroactivity was granted has yet to be determined. If not renewed and/or extended after December 2026, the cost of continuing to do business in these countries likely will negatively impact our results of operations and financial position, or result in us moving sourcing and manufacturing from these countries to countries with more favorable cost structures. We will continue to monitor the status of the trade agreements and preferences involving the U.S. government and the countries in which we source and/or manufacture products. See Item 8, “NOTE 7 – Contingencies and Geographic Supply Concentrations,” and "Item 1A — Risk Factors — Recently imposed tariffs may have a material adverse impact on our business."
On February 20, 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, effectively invalidating the tariffs imposed via that method. These IEEPA tariffs stopped being collected at 12:00 a.m. on February 24, 2026. The Supreme Court’s ruling left open the questions of whether, how, and when payors of the tariffs might receive refunds. A determination of these, and other questions, could take a significant amount of time to resolve. Soon after the Supreme Court’s decision, President Trump announced his intention to impose tariffs using different legal bases. Already, a new 10% tariff has been implemented under Section 122 of the Trade Act of 1974, effective as of February 24, 2026. The Supreme Court’s ruling and President Trump’s response add new uncertainty to global trade, including the Company’s exposure to tariffs.
It is uncertain how inflation and interest rates will be impacted in 2026 by the imposition of tariffs and other trade-related actions or inactions. World events, such as the Russia-Ukraine War, the joint U.S-Israeli strikes on Iran in February 2026 and other conflicts in the Middle East, continue to negatively affect the global economy. Additionally, civil unrest in countries where we manufacture products, like Haiti, may result in our facilities incurring damage or destruction and could interrupt our manufacturing processes and adversely affect our reputation and our relationships with our customers.
Prolonged or recurring disruptions or instability in the United States and global political and economic environment, and how the world reacts to those disruptions or instability, could have long-term impacts on our business. These business impacts could negatively affect us in a number of ways, including, but not limited to, reduced demand for our core products and services, declines in our revenue and profitability, increased costs related to higher oil and natural gas prices and/or supply imbalances in the oil and natural gas markets, costs associated with complying with new or amended laws and regulations and mitigating the increased cost of the new tariffs and duties affecting our business, declines in our stock price, reduced availability and less favorable terms of future borrowings, negative impacts on the valuation of our pension obligations, reduced credit-worthiness of our customers, and potential impairment of the carrying value of indefinite-lived intangible assets and goodwill.
The Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
Operations
The following table provides highlights of our financial performance (in thousands, except percentages):
| For the Years Ended December 31, |
||||||||||||||||
| 2025 |
2024 |
$ Change |
% Change |
|||||||||||||
| Net sales: |
||||||||||||||||
| Branded Products |
$ | 361,134 | $ | 353,314 | $ | 7,820 | 2.2 | % | ||||||||
| Healthcare Apparel |
115,866 | 119,191 | (3,325 | ) | (2.8 | %) | ||||||||||
| Contact Centers |
92,520 | 96,949 | (4,429 | ) | (4.6 | %) | ||||||||||
| Net intersegment eliminations |
(3,336 | ) | (3,778 | ) | 442 | (11.7 | %) | |||||||||
| Consolidated net sales |
566,184 | 565,676 | 508 | 0.1 | % | |||||||||||
| Gross margin: |
||||||||||||||||
| Branded Products |
123,712 | 124,723 | (1,011 | ) | (0.8 | %) | ||||||||||
| Healthcare Apparel |
41,962 | 45,746 | (3,784 | ) | (8.3 | %) | ||||||||||
| Contact Centers |
48,980 | 52,207 | (3,227 | ) | (6.2 | %) | ||||||||||
| Net intersegment eliminations |
(1,790 | ) | (2,098 | ) | 308 | (14.7 | %) | |||||||||
| Consolidated gross margin |
212,864 | 220,578 | (7,714 | ) | (3.5 | %) | ||||||||||
| Selling and administrative expenses: |
||||||||||||||||
| Branded Products |
96,067 | 94,384 | 1,683 | 1.8 | % | |||||||||||
| Healthcare Apparel |
39,550 | 41,149 | (1,599 | ) | (3.9 | %) | ||||||||||
| Contact Centers |
42,385 | 42,999 | (614 | ) | (1.4 | %) | ||||||||||
| Intersegment Eliminations |
(1,790 | ) | (2,098 | ) | 308 | (14.7 | %) | |||||||||
| Other |
23,263 | 23,492 | (229 | ) | (1.0 | %) | ||||||||||
| Consolidated selling and administrative expenses |
199,475 | 199,926 | (451 | ) | (0.2 | %) | ||||||||||
| Interest expense |
5,143 | 6,358 | (1,215 | ) | (19.1 | %) | ||||||||||
| Income before income tax expense |
8,246 | 14,294 | (6,048 | ) | (42.3 | %) | ||||||||||
| Income tax expense |
1,246 | 2,290 | (1,044 | ) | (45.6 | %) | ||||||||||
| Net income |
7,000 | 12,004 | (5,004 | ) | (41.7 | %) | ||||||||||
| EBITDA(1) |
$ | 25,744 | $ | 34,097 | $ | (8,353 | ) | (24.5 | %) | |||||||
(1) Please refer to "Non-GAAP Financial Measure" below for a reconciliation of EBITDA to net income.
Net Income
The Company generated net income of $7.0 million during the year ended December 31, 2025 and net income of $12.0 million during the year ended December 31, 2024. The decrease in net income during the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to decreases in gross margins in all three of our reportable segments, partially offset by a decrease in interest expense.
EBITDA
EBITDA was $25.7 million and $34.1 million during the years ended December 31, 2025 and 2024, respectively. EBITDA for the year ended December 31, 2025 compared to the year ended December 31, 2024 decreased primarily due to lower gross margins in all three of our reportable segments. For a reconciliation of EBITDA to net income, its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “Non-GAAP Financial Measure” below.
Net Sales
Net sales for the Company increased 0.1% or $0.5 million, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily attributable to a net sales increase in our Branded Products reportable segment.
Branded Products net sales increased 2.2%, or $7.8 million, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to an additional $11.0 million in net sales attributable to 3 Point branding company we acquired in December 2024. This increase was partially offset by a net volume decrease within existing large enterprise accounts.
Healthcare Apparel net sales decreased 2.8%, or $3.3 million, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in net sales was primarily due to volume decreases within existing customer accounts.
Contact Centers net sales decreased 4.6% or $4.4 million before intersegment eliminations and 4.3% or $4.0 million after intersegment eliminations for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in net sales versus the year-ago period reflects continued macroeconomic headwinds, which continue to contribute to client downsizing and customer attrition outpacing new customer acquisitions.
Gross Margin
Gross margin is defined as net sales less cost of goods sold. Cost of goods sold consists primarily of direct costs of acquiring inventory, including cost of merchandise, inbound freight charges, purchasing costs, and inspection costs for our Branded Products and Healthcare Apparel segments. Cost of goods sold for our Contact Centers segment includes salaries and payroll related benefits for agents. The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with out-bound freight are recorded in cost of goods sold. The cost of occupancy and operating the Company’s distribution centers are included in selling and administrative expenses. Gross margin rate is defined as gross margin divided by net sales.
Gross margin rate for the Company was 37.6% for the year ended December 31, 2025 down from 39.0% for the year ended December 31, 2024. The rate decrease was primarily due to decreases in gross margins in all three of our reportable segments.
Gross margin rate for our Branded Products segment was 34.3% for the year ended December 31, 2025 and 35.3% for the year ended December 31, 2024. The gross margin rate decreased as compared to the prior year period due to higher product costs.
Gross margin rate for our Healthcare Apparel segment was 36.2% for the year ended December 31, 2025 and 38.4% for the year ended December 31, 2024. The gross margin rate decreased as compared to 2024, primarily due to higher product costs in 2025 and unfavorable sales product mix.
Gross margin rate for our Contact Centers segment was 52.9% for the year ended December 31, 2025 and 53.8% for the year ended December 31, 2024. The decrease in the gross margin rate was attributable to higher agent costs and unfavorable margin mix associated with the closure of our Jamaica contact center.
Selling and Administrative Expenses
As a percentage of net sales, total selling and administrative expenses was 35.2% for the year ended December 31, 2025, mostly flat compared to 35.3% for the year ended December 31, 2024.
As a percentage of net sales, selling and administrative expenses for our Branded Products segment was 26.6% for the year ended December 31, 2025 and 26.7% for the year ended December 31, 2024. The rate remained flat year over year as cost increases kept pace with increases in net sales.
As a percentage of net sales, selling and administrative expenses for our Healthcare Apparel segment was 34.1% for the year ended December 31, 2025 and 34.5% for the year ended December 31, 2024. The rate decrease as compared to the prior year period was primarily driven by a decrease in depreciation expense and lower employee related costs.
As a percentage of net sales, selling and administrative expenses for our Contact Centers segment was 45.8% for the year ended December 31, 2025 and 44.4% for the year ended December 31, 2024. The rate increase as compared to the prior year period was primarily driven by an increase in credit loss expense. Overall selling and administrative expenses were down in line with the decrease in sales and the exit of Jamaica.
Selling and administrative expenses for our "Other" segment, which represents unallocated corporate costs, decreased by $0.2 million, primarily driven by decreases in employee related costs.
Interest Expense
Interest expense decreased to $5.1 million for the year ended December 31, 2025 from $6.4 million for the year ended December 31, 2024. This decrease was due to a lower weighted average interest rate on those borrowings from 5.5% for the year ended December 31, 2024 to 5.1% for the year ended December 31, 2025.
Income Taxes
Income tax expense decreased to $1.2 million for the year ended December 31, 2025 from $2.3 million for the year ended December 31, 2024. The effective tax rate was 15.1% and 16.0% for the year ended December 31, 2025 and 2024, respectively. Income tax expense and the effective tax rate for the year ended December 31, 2025 and 2024 were primarily impacted by the variability in the mix of earnings across the Company’s foreign and domestic operations, subject to various statutory tax rates in those jurisdictions. The effective tax rate may vary from year to year due to discrete, unusual or non-recurring items, the resolution of income tax audits, changes in tax laws, the tax impact from employee share-based payments, or other items.
Liquidity and Capital Resources
Liquidity Analysis
Short-Term Liquidity
For the next twelve months, our primary capital requirements are for capital to maintain our operations, meet contractual obligations, primarily consisting of our revolving credit facility and term loan (collectively, our "Credit Facilities") and operating leases, and fund capital expenditures, dividends, stock repurchases, any potential merger and acquisition activity and other general corporate purposes. Management believes that the combination of our current cash level, cash flows provided by operating activities and availability under the revolving credit facilities will be sufficient to satisfy the above requirements for the next twelve months.
Long-Term Liquidity
Beyond the next twelve months, our principal demand for funds will be for maintenance of our core business, to satisfy long-term contractual obligations, stock repurchases, any potential merger and acquisition activity and the Company’s ongoing capital expenditure program designed to improve the effectiveness and capabilities of its facilities and technology. The Company at all times evaluates its capital expenditure program in light of prevailing economic conditions. The Company's material contractual obligations include outstanding debt, long-term pension liability, operating leases and non-qualified deferred compensation plan liabilities in Other Long-Term Liabilities. For additional details related to the Company’s long-term contractual obligations for long-term debt see Note 5, for contractual obligations for leases see Note 14 and for contractual obligations for acquisition-related contingent liabilities see Note 7. Management currently believes that the combination of our current cash level, cash flows provided by operating activities and availability under the revolving credit facility will be sufficient to satisfy the above requirements. Please refer to Notes 5 and 15 to our Consolidated Financial Statements located in Item 8 of this Annual Report on Form 10-K for our contractual obligations, including schedules of future minimum payments.
Cash Requirements
Working Capital Needs
The Company carries inventories of both raw materials and finished products, the practice of which requires substantial working capital, which we believe to be common in the industry. The Company also requires working capital to invest in new product lines and technologies.
Capital expenditures
Capital expenditures were $3.9 million and $4.4 million for the years ended December 31, 2025 and 2024, respectively.
Debt Service Obligations
In 2025 and 2024, we paid interest of $5.7 million and $5.9 million, respectively. The cost of borrowing decreased in 2025, with the weighted average interest rate on outstanding borrowings under our Credit Facilities of 5.1% at December 31, 2025 compared to 5.5% at December 31, 2024. As of December 31, 2025, the Company had undrawn capacity of $90.0 million under the revolving credit facility.
Sources of Capital and Liquidity
Cash on Hand
As of December 31, 2025, we had $23.7 million of cash on our balance sheet, of which $16.2 million of cash was held at foreign subsidiaries. Excess cash of $8.4 million from foreign operations may generally be transferred to operations in the U.S.
Cash Flows from Operations
Net cash provided by operating activities primarily results from cash collected from customers for our promotional products, branded uniforms, healthcare apparel and accessories, offset by cash payments made for raw materials, salaries and payroll related benefits, leases and other general corporate expenditures.
In 2025, net cash provided by operating activities was $19.7 million. Cash collections from customers exceeded aggregate cash payments to vendors, lessors, employees and lenders. Collections are down from the prior year primarily related to timing of order delivery at year end.
In 2024, net cash provided by operating activities was $33.4 million. Cash collections from customers exceeded aggregate cash payments to vendors, lessors, employees and lenders primarily driven by the Company’s efforts to reduce outstanding receivable balances.
Credit Facilities and Debt Activity
The Company’s primary source of liquidity has been its net income and the use of its Credit Facilities. The Company has access to a revolving credit facility with a maximum principal amount of $125.0 million and a term loan in the original aggregate principal amount of $75.0 million and the ability to request incremental revolving credit or term loan facilities in an aggregate amount of up to an additional $75.0 million, subject to obtaining additional lender commitments and satisfying certain other conditions.
For the year ended December 31, 2025, the Company had $7.4 million of net debt borrowings, consisting of $82.0 million in payments on the revolving credit facility and $5.6 million of payments in the term loan. For the year ended December 31, 2024, the Company had $7.7 million in net debt payments, consisting of $50.0 million in payments on the revolving credit facility and $4.7 million in payments on the term loan. For the years ended December 31, 2025 and 2024, the Company had borrowings of $95.0 million and $47.0 million on the revolving credit facility, respectively. Both the debt payments and borrowings during 2025 and 2024 primarily related to the utilization of our revolving credit facility in the normal course of business.
In the future, the Company may continue to use its Credit Facilities and other secured and unsecured borrowings as a source of liquidity. Additionally, the cost of the Company’s future sources of liquidity may differ from the costs of the Company’s sources of liquidity to date.
Please refer to Note 5 to our Consolidated Financial Statements located in Item 8 of Part II of this Annual Report on Form 10-K for additional details on our outstanding long-term debt.
Dividends and Share Repurchase Program
During the years ended December 31, 2025 and 2024, the Company paid cash dividends of $8.9 million and $9.3 million, respectively. The Company anticipates that it will continue to pay dividends in the future as financial conditions permit.
On September 19, 2025, the Company entered into a 10b5-1 trading plan (the “Plan”) for the purpose of repurchasing up to a specified number of shares of the Company’s outstanding common stock (the “Repurchase Limit”) in accordance with the $17.5 million share repurchase program ("Program") previously authorized by the Company’s Board of Directors, which was announced by the Company on March 11, 2025. The Plan is intended to comply with Rule 10b5-1(c) under the Exchange Act. The Plan allows the Company to repurchase shares up to the Repurchase Limit commencing September 20, 2025 and ending on the earlier of the date on which the Repurchase Limit is reached or other events specified in the Plan. Repurchases of common stock under the Plan will be administered through an independent broker and are subject to certain price, market, volume and timing constraints specified in the Plan. The approximate dollar value of shares that may still be purchased under the Program is $10.1 million as of December 31, 2025. The Program may be modified, suspended or terminated at any time, without prior notice. Shares repurchased may be reissued later in connection with employee benefit plans and other general corporate purposes. Shares purchased under the Program are constructively retired and returned to unissued status. See Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Non-GAAP Financial Measure
EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, income tax expense, depreciation and amortization expense and impairment charges. The Company believes EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences and (iii) asset base (depreciation and amortization). The Company uses EBITDA internally to monitor operating results and to evaluate the performance of its business. In addition, the compensation committee has used EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs.
EBITDA is not a measure of financial performance under GAAP. EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate EBITDA are significant components in understanding and assessing the Company’s results of operations. The presentation of the Company’s EBITDA may change from time to time, including as a result of changed business conditions, new accounting pronouncements or otherwise. If the presentation changes, the Company undertakes to disclose any change between periods and the reasons underlying that change. The Company’s EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner.
The following table reconciles net income to EBITDA (in thousands):
| Years Ended December 31, |
||||||||
| 2025 |
2024 |
|||||||
| Net income |
$ | 7,000 | $ | 12,004 | ||||
| Interest expense |
5,143 | 6,358 | ||||||
| Income tax expense, net |
1,246 | 2,290 | ||||||
| Depreciation and amortization |
12,355 | 13,185 | ||||||
| Intangible assets impairment charge |
- | 260 | ||||||
| EBITDA |
$ | 25,744 | $ | 34,097 | ||||
Critical Accounting Estimates
Our discussion and analysis of financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. Our accounting policies are more fully described in Note 1 to the Financial Statements included in this Form 10-K. The preparation of the financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate the estimates that we have made. These estimates are based upon our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions.
Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We believe that the following critical accounting policies and estimates have a higher degree of inherent uncertainty and require our most significant judgments.
Revenue Recognition
Revenue is measured at the amount of consideration we expect to receive in exchange for the goods or services. Variable consideration is recorded based upon historical experience. Contract termination terms may involve variable consideration clauses such as sales discounts and customer rebates, and revenue is adjusted accordingly for these provisions. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
Inventories
The Company at all times carries inventories of both raw materials and finished products. Inventories are stated at the lower of cost or net realizable value. Judgments and estimates are used in determining the likelihood that goods on hand can be sold to customers. Historical inventory usage, current revenue trends and market conditions are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, inventory write-downs may be required, which may be material. An additional write-down in value of 5% of inventories would result in additional expense of approximately $5.0 million.
Annual Impairment Tests:
The Company performs its goodwill and indefinite-lived intangible impairment tests annually or more frequently as events or changes in circumstances warrant. The timing of the annual impairment tests was changed to August 31st, and historically was performed during the fourth quarter. Please see Note 1 – Description of Business, Basis of Presentation and Summary of Accounting Policies – Change in Accounting Policy, which disclosure is incorporated herein by reference.
Indefinite-lived Intangible Assets:
As of August 31, 2025, the Company performed its annual impairment test for its indefinite-lived trade name intangible assets which did not result in an impairment. We conducted a quantitative assessment using the relief-from-royalty method, which we believe to be an acceptable methodology due to its common use by valuation specialists in determining the fair value of intangible assets. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these assets. The assumptions that have the most significant effect on the fair value calculations are the royalty rates, projected revenue growth rates, discount rates, and terminal values. Each royalty rate is determined based on the profitability of the trade name to which it relates.
In determining the fair value of our trade name indefinite lived intangible assets as of August 31, 2025, we used the following key assumptions:
• Royalty rates of 0.75% - 3.0%;
• A tax rate of 27.0%;
• A long-term growth rate of 3.0%; and
• Assumed discount rates of 14.5% - 16.5%
Goodwill:
The discounted cash flow approach that we use for valuing goodwill as part of our impairment testing approach involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. Terminal values are also estimated and discounted to their present value. Assessing the recoverability of goodwill requires us to make estimates and assumptions about sales, operating margins, growth rates and discount rates based on our forecasts, business plans, economic projections, anticipated future cash flows and marketplace data.
We performed our annual impairment test as of August 31, 2025, which did not result in any goodwill impairment. In determining the fair value of our reporting unit, we used the following assumptions:
| • |
Expected cash flows underlying our business plans for the initial five-year period were based on a detailed, multi-year forecast performed by our BAMKO reporting unit; |
| • |
Long-term growth rate of 3.0%; and |
| • |
Discount rate of 14.0% |
No impairments were identified during the third quarter 2025 annual goodwill and indefinite-lived intangible impairment tests. During the third quarter of 2024, the Company performed an interim impairment test on certain of its indefinite-lived trade name intangible assets within the Healthcare segment which resulted in an immaterial impairment of $0.3 million. We conducted a quantitative assessment using the relief-from-royalty method, which we believe to be an acceptable methodology due to its common use by valuation specialists in determining the fair value of intangible assets. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these assets. The assumptions that have the most significant effect on the fair value calculations are the royalty rates, projected revenue growth rates, discount rates, and terminal values. Each royalty rate is determined based on the profitability of the trade name to which it relates.
Q4 Impairment Test
The Company identified an indicator of impairment related to the CID Resources indefinite-lived intangible asset of the Healthcare Apparel segment. A quantitative interim impairment test was performed using the relief-from-royalty method which resulted in no impairment. The assumptions used to determine the fair value of our trade name indefinite lived intangible assets as of December 31, 2025 were consistent with the annual test as of August 31, 2025, discussed above.
Income Taxes
The Company is required to estimate and record income taxes payable for federal, state and foreign jurisdictions in which the Company operates. This process involves estimating actual current tax expense and assessing temporary differences resulting from differing accounting treatment between tax and book that result in deferred tax assets and liabilities. In addition, accruals are also estimated for federal and state tax matters for which deductibility is subject to interpretation.
Deferred income taxes are provided on undistributed earnings of foreign subsidiaries in the period in which the Company determines it no longer intends to permanently reinvest such earnings outside the United States. The Company expects to permanently reinvest the earnings from its wholly-owned Brazilian and UK subsidiaries, and accordingly, has not provided deferred taxes on the subsidiaries’ undistributed net earnings or basis differences. The Company believes that the tax liability that would be incurred upon repatriation of the earnings from its Brazilian and UK subsidiaries is immaterial at December 31, 2025.
Reserves are also estimated for uncertain tax positions that are currently unresolved. The Company routinely monitors the potential impact of such situations and believes that it is properly reserved. For the year ended December 31, 2025, there was no significant change in total unrecognized tax benefits. As of December 31, 2025, we had an accrued liability of $0.9 million for unrecognized tax benefits. We recognize interest and penalties associated with the unrecognized tax benefit as part of the income tax provision and include accrued interest and penalties with the related reserve in other long-term liabilities in our consolidated balance sheets.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Risk
We are subject to market risk exposure related to changes in interest rates on our debt. Interest on our Credit Facilities is based upon the secured overnight financing rate (“SOFR”). As SOFR is a relatively new reference rate with a limited history, there may or may not be more volatility than with other reference rates such as LIBOR, which may result in increased borrowing costs for the Company. A hypothetical increase in the SOFR of 100 basis points as of January 1, 2025 would have resulted in approximately $0.9 million in additional pre-tax interest expense for the year ended December 31, 2025. For further information regarding our debt instruments, see Note 5 to the Financial Statements.
Foreign Currency Exchange Risk
Sales to customers outside of the United States are subject to fluctuations in foreign currency exchange rates, which may negatively impact gross margin realized on our sales. Less than 5% of our sales contracts are denominated in foreign currencies. We cannot predict the effect of exchange rate fluctuations on our operating results. In certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with our sales and expenses denominated in foreign currency. As of December 31, 2025, we had no foreign currency exchange hedging contracts. There can be no assurance that our strategies will adequately protect our operating results from the effect of exchange rate fluctuations.
Financial results of our foreign subsidiaries in the Branded Products segment are denominated in their local currencies, which include the Hong Kong dollar, the Chinese renminbi, the British pound, the Indian rupee, the Brazilian real, Colombian peso and the Canadian dollar. These operations may also have net assets and liabilities not denominated in their functional currency, which exposes us to changes in foreign currency exchange rates that impact income. Excluding intercompany payables and receivables considered to be long-term investments, changes in exchange rates for assets and liabilities not denominated in their functional currency are reported as foreign currency transaction gains (losses) within selling and administrative expenses in our statements of comprehensive income. During the years ended December 31, 2025 and 2024 foreign currency transaction gains (losses) were not significant. We also have exposure to foreign currency exchange risk from the translation of foreign subsidiaries from the local currency into the U.S. dollar. Comprehensive income (loss) during the years ended December 31, 2025 and 2024, included a foreign currency translation adjustment gain of $1.6 million and a foreign currency translation adjustment loss of $3.4 million, respectively.
Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
| Page |
| Report of Independent Registered Public Accounting Firm (PCAOB ID | 36 |
| Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024 | 39 |
| Consolidated Balance Sheets as of December 31, 2025 and 2024 | 40 |
| Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024 | 41 |
| Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 | 42 |
| Notes to the Consolidated Financial Statements: | |
| Note 1 - Description of Business, Basis of Presentation and Summary of Accounting Policies | 43 |
| Note 2 - Operating Segment Information | 51 |
| Note 3 - Net Sales | 53 |
| Note 4 - Net Income Per Share | 54 |
| Note 5 - Long-Term Debt | 55 |
| Note 6 - Acquisitions | 56 |
| Note 7 - Contingencies | 56 |
| Note 8 - Inventories | 57 |
| Note 9 - Intangible Assets and Goodwill | 58 |
| Note 10 - Property, Plant and Equipment, Net | 59 |
| Note 11 - Income Tax Expense | 60 |
| Note 12 - Share-Based Compensation | 64 |
| Note 13 - Stock Repurchase Plan | 67 |
| Note 14 - Leases | 68 |
| Note 15 - Benefit Plans | 69 |
| Note 16 - Other Information | 70 |
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Superior Group of Companies, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Superior Group of Companies, Inc. (a Florida corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 3, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indefinite-lived Intangible Assets – CID Resources Trade name
As described further in Note 9 to the financial statements, the Company has an indefinite-lived intangible asset related to the CID Resources trade name of approximately $13.9 million. This indefinite-lived intangible asset is reviewed at least quarterly by the Company for indicators of impairment. The Company considers historical and projected financial performance as well as industry information. We identified the quantitative fair value assessments of the CID Resources trade name as a critical audit matter.
The principal consideration for our determination that the impairment assessments of this indefinite-lived intangible asset are a critical audit matter is that the impairment assessments require the Company to utilize subjective assumptions to estimate the discounted cash flows attributable to the CID Resources trade name, such as royalty rate and discount rate. This estimation process required a high degree of auditor judgement and an increased extent of effort.
Our audit procedures related to the CID Resources trade name included the following, among others.
| • | We obtained an understanding, evaluated the design and tested the operating effectiveness of key controls relating to management’s quantitative impairment assessment process including review of assumptions used in the model and the completeness and accuracy of forecasted information. |
| • | We reviewed revenue forecasts prepared by management that were utilized in the model and performed sensitivity analyses on those forecasts. |
| • | We utilized a valuation specialist to assess the appropriateness of the model utilized and underlying assumptions including the royalty rate and discount rate. |
/s/
We have served as the Company's auditor since 2022.
March 3, 2026
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Superior Group of Companies, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Superior Group of Companies, Inc. (a Florida corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated March 3, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Tampa, Florida
March 3, 2026
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||||||||
| (In thousands, except shares and per share data) |
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | $ | ||||||
| Costs and expenses: | ||||||||
| Cost of goods sold | ||||||||
| Selling and administrative expenses | ||||||||
| Interest expense | ||||||||
| Income before income tax expense | ||||||||
| Income tax expense, net | ||||||||
| Net income | $ | $ | ||||||
| Net income per share: | ||||||||
| Basic | $ | $ | ||||||
| Diluted | $ | $ | ||||||
| Weighted average shares outstanding during the period: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Other comprehensive income (loss), net of tax | ||||||||
| Defined benefit pension plans | $ | ( | ) | $ | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Other comprehensive income (loss) | ( | ) | ||||||
| Comprehensive income | $ | $ | ||||||
| Cash dividends per common share | $ | $ | ||||||
| See accompanying Notes to the Consolidated Financial Statements. |
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (In thousands, except share and par value data) |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Contract assets | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Deferred tax asset | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Other current liabilities | ||||||||
| Current portion of long-term debt | ||||||||
| Current portion of acquisition-related contingent liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term debt | ||||||||
| Long-term pension liability | ||||||||
| Long-term acquisition-related contingent liabilities | ||||||||
| Long-term operating lease liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 7) | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, $.001 par value - authorized 300,000 shares (none issued) | ||||||||
| Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding - 15,730,615 and 16,484,921 shares, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss, net of tax | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
| See accompanying Notes to the Consolidated Financial Statements. |
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
||||||||||||
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY |
||||||||||||
| (In thousands, except shares and per share data) |
| Accumulated | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||
| Additional | Comprehensive | Total | ||||||||||||||||||||||
| Common | Common | Paid-In | Retained | (Loss) Income, | Shareholders’ | |||||||||||||||||||
| Shares | Stock | Capital | Earnings | net of tax | Equity | |||||||||||||||||||
| Balance, January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Issuance of common stock under stock incentive plans and related tax effect | ( | ) | ||||||||||||||||||||||
| Common shares repurchased and retired including shares withheld for taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Share-based compensation expense | - | |||||||||||||||||||||||
| Written put options | - | |||||||||||||||||||||||
| Cash dividends declared ($0.56 per share) | - | ( | ) | ( | ) | |||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| Pensions, net of taxes of $100 | - | |||||||||||||||||||||||
| Change in currency translation adjustment, net of taxes of $0 | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Issuance of common stock under stock incentive plans and related tax effect | ||||||||||||||||||||||||
| Common shares repurchased and retired including shares withheld for taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Share-based compensation expense | - | |||||||||||||||||||||||
| Cash dividends declared ($0.56 per share) | - | ( | ) | ( | ) | |||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| Pensions, net of taxes of $322 | - | ( | ) | ( | ) | |||||||||||||||||||
| Change in currency translation adjustment, net of taxes of $0 | - | |||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
See accompanying Notes to the Consolidated Financial Statements.
| SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Inventory write-downs | ||||||||
| Credit loss expense | ||||||||
| Share-based compensation expense | ||||||||
| Deferred income tax benefit | ( | ) | ( | ) | ||||
| Change in fair value of acquisition-related contingent liabilities | ||||||||
| Non-cash operating lease expense | ||||||||
| Change in fair value of written put options | ||||||||
| Other, net | ||||||||
| Changes in assets and liabilities, net of acquisition of businesses: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Contract assets | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Other assets | ( | ) | ( | ) | ||||
| Accounts payable and other current liabilities | ( | ) | ||||||
| Payment of acquisition-related contingent liabilities | ( | ) | ( | ) | ||||
| Long-term pension liability | ||||||||
| Other long-term liabilities | ||||||||
| Net cash provided by operating activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Additions to property, plant and equipment | ( | ) | ( | ) | ||||
| Acquisition of business | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Borrowings under revolving lines of credit | ||||||||
| Payments under revolving lines of credit | ( | ) | ( | ) | ||||
| Payment of term loan | ( | ) | ( | ) | ||||
| Payment of cash dividends | ( | ) | ( | ) | ||||
| Payment of acquisition-related contingent liabilities | ( | ) | ( | ) | ||||
| Proceeds received on exercise of stock options | ||||||||
| Shares withheld for taxes | ( | ) | ( | ) | ||||
| Common shares repurchased and retired | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of currency exchange rates on cash | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents balance, beginning of year | ||||||||
| Cash and cash equivalents balance, end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid (refunded), net | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| See accompanying Notes to the Consolidated Financial Statements. |
Superior Group of Companies, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
NOTE 1 – Description of Business, Basis of Presentation and Summary of Accounting Policies:
Description of business
Superior Group of Companies, Inc. (together with its subsidiaries, “the Company,” “Superior,” “we,” “our,” or “us”) was organized in 1920 and was incorporated in 1922 as a New York company under the name Superior Surgical Mfg. Co., Inc. In 1998, the Company changed its name to Superior Uniform Group, Inc. and redomiciled to Florida. Effective on May 3, 2018, Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc.
Superior’s Branded Products segment, primarily through its signature marketing brands BAMKO® and HPI®, produces and sells customized merchandising solutions, promotional products and branded uniform programs. Branded products are manufactured through third parties or in Superior’s own facilities, and are sold to customers in a wide range of industries, including retail chain, food service, entertainment, technology, transportation and other industries. The segment currently has sales offices or operations in the United States, Canada and Brazil, with support services in China and India.
Superior’s Healthcare Apparel segment, primarily through its portfolio of brands Wink®, Fashion Seal Healthcare®, its trade name CID Resources and our license of Carhartt Medical, manufactures (through third parties or in its own facilities) and sells a wide range of healthcare apparel, such as scrubs, lab coats, protective apparel and patient apparel. This segment sells its products to healthcare laundries, dealers, distributors, retailers and consumers primarily in the United States.
Superior’s Contact Centers segment, through multiple The Office Gurus® entities, including subsidiaries in El Salvador, Belize, Dominican Republic, the United States and in Jamaica until its closure on June 15, 2025, provides outsourced, nearshore business process outsourcing, contact and call-center support services to North American customers.
Basis of presentation
The accompanying consolidated financial statements of Superior included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) (“U.S.” or “United States”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company refers to the consolidated financial statements collectively as “financial statements,” and individually as “statements of comprehensive income,” “balance sheets,” “statements of shareholders’ equity,” and “statements of cash flows” herein.
Change in Accounting Policy
The Company historically evaluated goodwill and indefinite-lived intangible assets for impairment during the fourth quarter or when an indicator of impairment existed. During the third quarter of 2025, the Company voluntarily changed its date of the annual goodwill impairment assessment for all of its reporting units as well as its indefinite-lived intangible assets to August 31. The Company changed the date to provide timelier information for planning and forecasting purposes and provide additional time to complete the required impairment testing. The change did not represent a material change to the Company’s method of applying the accounting principle and was not retrospectively applied because the Company did not carry a goodwill balance until the fourth quarter of 2024.
Reclassifications
The accompanying financial statements for the prior year period contain certain reclassifications. Reclassifications impact items within our statements of comprehensive income, our statements of shareholders' equity, our statements of cash flows and Note 8 Inventories. These reclassifications did not have an effect on the Company’s consolidated results of operations, financial position or cash flows for the year ended December 31, 2025.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses, as well as the disclosures of contingent assets and liabilities. Because of the inherent uncertainties in this process, actual future results could differ from those expected at the reporting date.
Cash and cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.
Revenue recognition
Revenue from contracts with customers is recognized using a five-step model consisting of the following: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. Performance obligations are satisfied when the Company transfers control of a good or service to a customer, which can occur over time or at a point in time. The amount of revenue recognized is based on the consideration to which the Company expects to be entitled to in exchange for those goods or services, including the expected value of variable consideration.
The Company records contract assets when revenue is recognized but has not yet invoiced the customer. This occurs when costs are incurred for the production of goods with customers for which we recognize revenue over time but the associated revenues have not been billed to the customer. Contract liabilities are recorded for arrangements where the Company has billed the customer but has not shipped the goods and the transaction does not meet the criteria for bill and hold revenue recognition.
The Company also has bill and hold arrangements with certain customers. For these arrangements, control over the product is transferred when the product is ready for physical transfer to the customer, as we have a present right to payment, the customer can direct the use of the product (i.e., request shipment to its facility), and legal title has passed to the customer. Revenue is recognized at the time the product is produced and we have transferred control to the customer. Control transfers either upon shipment or when the material is made available for pick up. If the customer is deemed to take control of the inventory prior to pick up, the Company recognizes the revenue as a bill-and-hold transaction in accordance with Topic 606.
For our Branded Products and Healthcare Apparel segments, revenue is primarily generated from the sale of finished products to customers. Revenues for our Branded Products and Healthcare Apparel segments are recognized when the performance obligations under the contract terms are satisfied. For certain contracts with customers in which the Company has an enforceable right to payment for goods with no alternative use, revenue is recognized over time upon receipt of finished goods into inventory. Revenue for goods that do have an alternative use or that the customer is not obligated to purchase under the terms of a contract is generally recognized when the goods are transferred to the customer. The Company includes shipping and handling fees billable to customers in net sales. Shipping and handling activities that occur after the transfer of promised goods are accrued as control is transferred to the customer rather than being treated as a separate performance obligation.
For our Contact Centers segment, revenue is generated from providing our customers with contact center services. Revenue for our Contact Centers segment is recognized as services are delivered.
Revenue is measured at the amount of consideration we expect to receive in exchange for the goods or services. Variable consideration for estimated returns, allowances and other price variances is recorded based upon historical experience and current allowance programs. Contract terms may involve variable consideration clauses such as sales discounts and customer rebates, and revenue is adjusted accordingly for these provisions. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The promised amount of consideration in a contract is not adjusted for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that product or service will be one year or less. Sales taxes are excluded from the measurement of a performance obligation’s transaction price. Sales commissions are expensed as incurred when we expect that the amortization period of such costs will be one year or less.
Accounts receivable and allowance for doubtful accounts
Judgments and estimates are used in determining the collectability of accounts receivable and in establishing allowances for doubtful accounts. The Company analyzes specific accounts receivable and historical bad debt experience, customer credit worthiness, current economic trends and the age of outstanding balances when evaluating the adequacy of the allowance for doubtful accounts. Changes in estimates are reflected in the period they become known. Charge-offs of accounts receivable are made once all collection efforts have been exhausted. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
Cost of goods sold and shipping and handling fees and costs
Cost of goods sold for our Branded Products segment and our Healthcare Apparel segment consist primarily of direct costs of acquiring inventory, including cost of merchandise, inbound freight charges, purchasing, receiving costs, inspection costs and tariffs and duties. Cost of goods sold for our Contact Centers segment includes salaries and payroll related benefits for agents. The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with out-bound freight are recorded in cost of goods sold. The cost of occupancy and operating the Company’s distribution centers are included in selling and administrative expenses.
Inventories
Inventories are stated at the lower of cost (first-in, first-out method or average cost) or net realizable value. Judgments and estimates are used in determining the likelihood that goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation. Major renewals and improvements are capitalized, while replacements, maintenance and repairs which do not improve or extend the life of the respective assets are expensed in the period incurred. Costs of assets sold or retired and the related accumulated depreciation are eliminated from the Company's accounts and the net gain or loss is reflected in the statements of comprehensive income within selling and administrative expenses.
Property, plant and equipment is recorded at cost and depreciated using the straight-line method over its estimated useful life as follows:
| Buildings (in years) | | |
| Improvements (in years) | | |
| Machinery, equipment and fixtures (in years) | |
Leasehold improvements are depreciated over the terms of the leases to the extent that such improvements have useful lives of at least the terms of the respective leases.
Leases
The Company primarily leases factories, warehouses, call centers, office space and equipment for various terms under long-term, non-cancelable operating lease agreements. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term and a lease liability represents the Company’s obligation to make lease payments arising from the lease. The Company’s leases generally have expected lease terms of one to eight years. In the normal course of business, it is expected that the Company’s leases will be renewed or replaced by leases on other properties. Options to renew lease terms are included in determining the right-of-use asset and lease liability when it is reasonably certain that the Company will exercise that option. Certain of the lease agreements include rental payments adjusted periodically for inflation and generally require the Company to pay real estate taxes, insurance, and repairs. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. The Company elected the short-term lease exception guidance under ASC 842.
Impairment of long-lived assets
Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value.
Goodwill and Indefinite-lived intangible assets
The Company has made acquisitions in prior years that include both goodwill and indefinite-lived intangible assets. Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill and indefinite-lived intangible assets such as trade names are not amortized but are subject to an annual impairment test in the third quarter based on their estimated fair value. We test more frequently if there are indicators of impairment, or whenever such circumstances suggest that the carrying value of goodwill or trade names may not be recoverable. Examples of such events and circumstances that the Company would consider include the following:
| • | macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, or other developments in equity and credit markets; |
| • | industry and market considerations such as a deterioration in the environment in which the Company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the Company’s products or services, or a regulatory or political development; |
| • | cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows; |
| • | overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods; and |
| • | other relevant entity-specific events such as changes in management, key personnel, strategy, or customers. |
An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the impairment test is unnecessary.
Contingent Consideration
Contingent consideration relating to consideration transferred in exchange for an acquired business is recognized at its estimated fair value at the acquisition date. The contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. Recognition of any changes in fair value are included in selling and administrative expenses in our statements of comprehensive income.
SERP
The Company is the sponsor of an unfunded supplemental executive retirement plan (“SERP”) which includes one active participant. In calculating our obligations and related expense, we make various assumptions and estimates, after consulting with outside actuaries and advisors. The annual determination of expense involves calculating the estimated total benefits ultimately payable to plan participants. Significant assumptions related to the calculation of our obligations include the discount rates used to calculate the present value of benefit obligations to be paid in the future. We review these assumptions annually based upon currently available information, including information provided by our actuaries.
Insurance
The Company self-insures for certain obligations related to employee health programs. The Company also purchases stop-loss insurance policies to protect it from catastrophic losses. Judgments and estimates are used in determining the potential value associated with reported claims and for losses that have occurred, but have not been reported. The Company’s estimates consider historical claim experience and other factors. The Company’s liabilities are based on estimates, and, while the Company believes that the accrual for loss is adequate, the ultimate liability may be in excess of or less than the amounts recorded. Changes in claim experience, the Company’s ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period.
Taxes on income
Income taxes are provided for under the asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The calculation of the Company’s tax liabilities also involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain income tax positions based on estimates of whether, and the extent to which, additional taxes will be required. The Company also accrues interest and penalties related to uncertain income tax positions as income taxes.
Share-based compensation
The Company awards share-based compensation as an incentive for employees to contribute to the Company’s long-term success. The Company grants options, stock-settled stock appreciation rights, restricted stock and performance shares. The Company recognizes share-based compensation expense for all awards granted to employees, which is based on the fair value of the award on the date of grant. Determining the appropriate fair value model and calculating the fair value of stock compensation awards requires the input of certain highly complex and subjective assumptions, including the expected life of the stock compensation awards and the Company’s common stock price volatility, risk free interest rate and dividend rate. The assumptions used in calculating the fair value of stock compensation awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company deems it necessary to use different assumptions, stock compensation expense could be materially different from what has been recorded in the current period. Forfeitures of share-based compensation awards are recognized as they occur.
Other comprehensive income (loss)
Comprehensive income (loss) includes net income and all other changes in equity during a period except those resulting from investments by or distributions to shareholders. Other comprehensive income (loss) consists of defined benefit pension plan activities and foreign currency translation adjustments. The related tax effects of these items are recorded in income tax expense within the statements of comprehensive income, upon reclassification from accumulated other comprehensive income (loss), net of tax.
Foreign Currency Translations and Transactions
Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current rate of exchange on the last day of the reporting period. Changes in the carrying values of these assets and liabilities attributable to fluctuations in spot rates are recognized in net foreign currency translation adjustment, a component of accumulated other comprehensive income (loss), net of tax. Monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency are remeasured from the applicable currency to the reporting entity’s functional currency. Gains or losses resulting from transactions denominated in other currencies are recognized in net income each period. The majority of the Company’s transactions are settled in U.S. dollars.
Risks and concentrations
Financial instruments that potentially subject the Company to concentrations of credit risk include cash in banks in excess of federally insured amounts. The Company manages this risk by maintaining all deposits in high quality financial institutions and periodically performing evaluations of the relative credit standing of the financial institutions. When assessing credit risk, the Company considers whether the credit risk exists at both the individual and group level. Consideration is given to the activity, region and economic characteristics when assessing if there exists a group concentration risk. At December 31, 2025 and 2024, the Company had no customer with an accounts receivable balance greater than 10% of total accounts receivable.
Principal raw materials used to manufacture the Company’s finished goods include cotton, polyester, spandex, cotton-synthetic, poly-synthetic blends, textiles, plastic, glass, fabric and metal. The majority of such fabrics are sourced in China, either directly by us or our suppliers. If we are unable to continue to obtain our raw materials and finished products from China or if our suppliers are unable to source raw materials from China, it could significantly disrupt our business. Further, the Company and the Company’s suppliers generally source or manufacture finished goods in parts of the world that may be affected by economic uncertainty, political unrest, logistical challenges (such as port strikes and embargos), foreign currency fluctuations, labor disputes, health emergencies, natural disasters or the imposition of duties, tariffs or other import regulations by the United States, any of which could result in additional cost or limit our supply of necessary goods and raw materials.
Written Put Options
During the second quarter of 2022, the Company entered into written put options with a former employee that, if exercised by the former employee, required the Company to repurchase up to
Fair value of financial instruments
The carrying amounts of cash and cash equivalents, receivables and accounts payable approximated fair value as of December 31, 2025 and 2024, because of the relatively short maturities of these instruments. The carrying amount of the Company’s long-term debt approximated fair value as the rates are adjustable based upon current market conditions.
Recent Accounting Pronouncements
We consider the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not listed below were assessed and determined to be not applicable.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures". The ASU requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker ("CODM"). The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We have adopted the disclosure requirements of ASU 2023-07 in our consolidated financial statements as of and for the year ended December 31, 2024. The adoption of the ASU only impacted our disclosures, which are on a retrospective basis, with no impacts on our results of operations, cash flows or financial condition. The Company’s adoption of this standard did not have a material impact on its financial statements. See Note 2 for further details.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740)—Improvements to Income Tax Disclosures". The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company prospectively adopted the required disclosures in its annual financial statements as of December 31, 2025. The adoption of this guidance did not affect the Company’s consolidated results of operations, financial position or cash flows. See Note 11 for further details.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses“. The ASU requires the disclosure of additional information about specific categories of costs and expenses in the notes to the consolidated financial statements. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. This ASU will likely result in additional disclosures. We are currently evaluating the provisions of this ASU.
In July 2025, the FASB issued ASU 2025-05, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets". The FASB issued ASU 2025-05 to simplify the application of the current expected credit loss (CECL) model to short-term receivables and contract assets under ASC 606. The amendments introduce a practical expedient (available to all entities) that allows companies to assume current conditions as of the balance sheet date remain unchanged for the life of the asset, removing the need to incorporate complex macroeconomic forecasts for short-term assets. The scope includes current accounts receivable and contract assets arising from Topic 606, including those acquired in business combinations. The amendments are effective for annual periods beginning after December 15, 2025 (interim periods included), with prospective application and early adoption permitted. We are currently evaluating the provisions of this ASU.
In September 2025, the FASB issued ASU 2025-06, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." This ASU removes all references to prescriptive and sequential software development stages (referred to as "project stages") and instead requires an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. Additional updates include changes to accounting for website development costs and certain disclosure requirements. This ASU will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. This ASU permits an entity to apply the new guidance using either a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption, or a retrospective transition approach. The Company is currently assessing the impact that adopting this ASU may have on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements." The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied either on a prospective or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of this ASU may have on its consolidated financial statements.
NOTE 2 – Operating Segment Information:
The Company manages and reports the following segments:
Branded Products segment: Primarily through our signature marketing brands BAMKO® and HPI®, we produce and sell customized merchandising solutions, promotional products and branded uniform programs. Branded products are sold to customers in a wide range of industries, including retail, hotel, food service, entertainment, technology, transportation and other industries. The segment currently has sales offices in the United States and Brazil, with support services in China and India.
Healthcare Apparel segment: Primarily through our portfolio of brands Wink® and Fashion Seal Healthcare®, its trade name CID Resources and our license of Carhartt Medical, we manufacture (through third parties or in our own facilities) and sell a wide range of healthcare apparel, such as scrubs, lab coats, protective apparel and patient apparel. This segment sells its products to healthcare laundries, dealers, distributors and retailers primarily in the United States.
Contact Centers: Through multiple The Office Gurus® entities, including our subsidiaries in El Salvador, Belize, Dominican Republic, the United States and Jamaica until its closure on June 15, 2025, we provide outsourced, nearshore and onshore business process outsourcing, contact and call-center support services to North American customers.
Intersegment eliminations include the elimination of revenues and costs from services provided by the Contact Centers segment to the Company’s two other segments. Such costs are recognized as selling and administrative expenses in the Branded Products and Healthcare Apparel segments. Income and expenses related to corporate functions that are not specifically attributable to an individual reportable segment are presented within Other in the table below.
The chief operating decision maker, who is the Company’s Chief Executive Officer, evaluates the performance of our segments. Segment EBITDA is the profitability metric reported to the Company’s CODM for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. Segment EBITDA is calculated as net sales less cost of goods sold and selling and administrative expenses. Segment information for total assets is not presented as this information is not used by the Company’s CODM in measuring segment performance or allocating resources between segments.
The following tables set forth financial information related to the Company’s operating segments (in thousands):
| Branded Products | Healthcare Apparel | Contact Centers | Intersegment Eliminations | Other | Total | |||||||||||||||||||
| For the Year Ended December 31, 2025: | ||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||
| Cost of goods sold | ( | ) | ||||||||||||||||||||||
| Gross margin | ( | ) | ||||||||||||||||||||||
| Selling and administrative expenses | ( | ) | ||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||
| Segment EBITDA | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||
| Branded Products | Healthcare Apparel | Contact Centers | Intersegment Eliminations | Other | Total | |||||||||||||||||||
| For the Year Ended December 31, 2024: | ||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||
| Cost of goods sold | ( | ) | ||||||||||||||||||||||
| Gross margin | ( | ) | ||||||||||||||||||||||
| Selling and administrative expenses | ( | ) | ||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||
| Intangible assets impairment charge | ||||||||||||||||||||||||
| Segment EBITDA | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||
The following table reconciles total Segment EBITDA to income before income tax expense:
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Income before income tax expense | $ | $ | ||||||
| Interest expense | ||||||||
| Depreciation and amortization | ||||||||
| Intangible assets impairment charge | ||||||||
| Segment EBITDA | $ | $ | ||||||
NOTE 3 – Net Sales:
The Company generates revenue by producing and manufacturing (through third parties or in its own facilities) and selling a wide range of promotional products and branded uniforms in its Branded Products segment and healthcare apparel and accessories in its Healthcare Apparel segment. It also generates revenue by providing outsourced, nearshore and onshore business process outsourcing, contact and call-center support services to North American customers in our Contact Centers segment. See Note 1 for descriptive information about the Company’s performance obligations and revenue recognition accounting policies.
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues from contracts with customers: | ||||||||
| Branded Products(1) | $ | $ | ||||||
| Healthcare Apparel | ||||||||
| Contact Centers | ||||||||
| Total | $ | $ | ||||||
(1) Sales under bill-and-hold arrangements included $
Contract Assets and Contract Liabilities
The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers (in thousands):
| December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Accounts receivable | $ | $ | $ | |||||||||
| Current contract assets | ||||||||||||
| Current contract liabilities | ||||||||||||
Contract assets relate to goods produced without an alternative use for which the Company has an enforceable right to payment but which has not yet been invoiced to the customer. Contract liabilities relate to payments received in advance of the Company completing its performance under a contract. Contract liabilities are included in other current liabilities in our balance sheets. The contract liability balance as of December 31, 2024 was recognized into revenue during the twelve-months ended December 31, 2025.
| NOTE 4 – Net Income Per Share: |
The Company’s basic net income per share is computed based on the weighted average number of shares of common stock outstanding for the period. Diluted net income per share includes the effect of the Company’s outstanding stock options, stock appreciation rights, unvested shares of restricted stock and unvested performance shares, if the inclusion of these items is dilutive.
The following table presents a reconciliation of basic and diluted net income per share for the years ended December 31, 2025 and 2024 (net income is presented in thousands):
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income (in thousands) | $ | $ | ||||||
| Weighted average shares outstanding - basic | ||||||||
| Dilutive common stock equivalents | ||||||||
| Weighted average shares outstanding - diluted | ||||||||
| Net income per share: | ||||||||
| Basic | $ | $ | ||||||
| Diluted | $ | $ | ||||||
Awards to purchase
NOTE 5 – Long-Term Debt:
Debt consisted of the following (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Credit Facilities: | ||||||||
| Revolving credit facility due August 2027 | $ | $ | ||||||
| Term loan due August 2027 | ||||||||
| Less: unamortized debt issuance costs | ( | ) | ( | ) | ||||
| Total debt | $ | $ | ||||||
| Less: | ||||||||
| Current portion of long-term debt | ||||||||
| Long-term debt | $ | $ | ||||||
On August 23, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, the domestic subsidiaries of the Company, as guarantors, the lenders party thereto (the “Lenders”), and PNC Bank, National Association, as administrative agent for the Lenders (the “Administrative Agent”), pursuant to which the Lenders are providing the Company senior secured credit facilities maturing in August 2027 consisting of a revolving credit facility in the aggregate maximum principal amount of $
Obligations outstanding under the Credit Facilities accrue interest at a variable rate equal to the secured overnight financing rate (“SOFR”) plus an adjustment between
Contractual principal payments for the term loan are as follows: 2026 - $
The Credit Facilities are secured by substantially all of the operating assets of the Company, and the Company’s obligations under the Credit Facilities are guaranteed by all of its domestic subsidiaries. The Company’s obligations under the Credit Facilities are subject to acceleration upon the occurrence of an event of default as defined in the Credit Agreement. The Credit Agreement contains customary events of default and negative covenants, including but not limited to those governing indebtedness, liens, fundamental changes, investments, restricted payments (including dividends and related distributions), liquidations, mergers, consolidations or acquisitions, affiliate transactions and sales of assets or subsidiaries. The Credit Agreement also requires the Company to comply with a fixed charge coverage ratio of at least
Debt Maturity Schedule
Contractual maturities of the Credit Facilities (excluding interest to be accrued thereon) at December 31, 2025 are as follows (in thousands):
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total debt | $ |
NOTE 6 – Acquisitions:
On December 4, 2024, the Company, through BAMKO, acquired substantially all of the assets of Cormark Inc. doing business as 3Point Brand Management ("3Point" or "acquired company"), for a total purchase price of $
NOTE 7 – Commitments and Contingencies:
The purchase price to acquire substantially all of the assets of Guardian Products, Inc. (“Guardian”) in May 2022 included contingent consideration based on varying levels of Guardian’s EBITDA in each measurement period through April 2025. In the third quarter of 2025 the final contingent consideration payment was made totaling $
The purchase price to acquire substantially all of the assets of 3Point in December 2024 included contingent consideration based on varying levels of the acquired company’s EBITDA in each measurement period through December 2027. The estimated fair value of the acquired company's acquisition-related contingent consideration payable as of December 31, 2025 was $
The Company is involved in various legal actions and claims arising from the normal course of business. The ultimate outcome of these matters is not expected to have a material impact on the Company’s results of operations, cash flows, or financial position.
Geographic Concentrations in the Available Supply of Materials and Product
The principal fabrics used in the manufacture of finished apparel goods for Superior’s Branded Products and Healthcare Apparel segments are cotton, polyester, spandex, cotton-synthetic and poly-synthetic blends. The majority of such fabrics are sourced, directly or indirectly, from China.
The Company does not have a concentration of suppliers of finished apparel in any single country or region of the world, however, it does contract to manufacture or source the majority of its apparel in the following countries: Haiti, China, Madagascar, Vietnam, Pakistan, Bangladesh, and the United States. Additionally, we generally source or manufacture apparel in parts of the world that may be affected by economic uncertainty, political unrest, labor disputes, health emergencies, natural disasters or the imposition of duties, tariffs or other import regulations by the United States.
The Branded Products segment also relies on the supply of other types of finished products including hard goods such as drinkware and injection molded plastics along with raw materials that are principally sourced from China, either directly or indirectly.
The geography from which we source materials and products is affected by duties and tariffs. During 2025, the U.S. government imposed higher tariffs and/or new tariffs which impacted certain sources of the Company’s materials and production. Additionally, the U.S.'s trade agreements and/or preferences with certain countries in Africa, through the African Growth and Opportunity Act (AGOA), and with Haiti, through the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE) and the Haiti Economic Lift Program of 2010 (HELP), expired on September 30, 2025. In February 2026, these agreements were retroactively extended until December 2026. The process and timing for receiving a refund of duties paid in the interim period between expiration and when retroactivity was granted has yet to be determined.
Additionally in February 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, effectively invalidating the tariffs imposed via that method. These IEEPA tariffs stopped being collected at 12:00 a.m. on February 24, 2026. The Supreme Court’s ruling left open the questions of whether, how, and when payors of the tariffs might receive refunds. A determination of these, and other questions, could take a significant amount of time to resolve. Soon after the Supreme Court’s decision, President Trump announced his intention to impose tariffs using different legal bases. Already, a new 10% tariff has been implemented under Section 122 of the Trade Act of 1974, effective as of February 24, 2026. The Supreme Court’s ruling and President Trump’s response add new uncertainty to global trade, including the Company’s exposure to tariffs.
| NOTE 8 - Inventories: |
Inventories consisted of the following amounts (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Finished goods(1) | $ | $ | ||||||
| Work in process | ||||||||
| Raw materials | ||||||||
| Inventories | $ | $ | ||||||
| NOTE 9 - Intangible Assets and Goodwill: |
Intangible Assets
The carrying amounts of indefinite-lived trade names are summarized as follows (dollars in thousands):
| Indefinite-lived Intangible Assets | Segment | Carrying Amount, | Carrying Amount, | |||||||||
| Trade names: | ||||||||||||
| HPI | Branded Products | $ | $ | |||||||||
| BAMKO | Branded Products | |||||||||||
| CID Resources(1) | Healthcare Apparel | |||||||||||
| Total | $ | $ | ||||||||||
| (1) | Includes trade names and trademarks associated with CID Resources and Wink®. |
As described in Note 1, the Company performed its annual impairment test for indefinite-lived intangible assets in the third quarter, which did not result in a trade name impairment. An indicator of impairment related to the CID Resources indefinite lived intangible assets was identified during the fourth quarter of 2025 for which a quantitative interim impairment test was performed and which did not result in a trade name impairment. A quantitative impairment test was performed in the third quarter of 2024 which resulted in a $
Intangible assets as of December 31, 2025 and December 31, 2024 are summarized as follows (dollars in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||
| Item | Weighted Average Life (In years) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||
| Definite-lived intangible assets: | ||||||||||||||||||||
| Customer relationships (7-15 year life) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||
| Non-compete agreements (3-7 year life) | ( | ) | ( | ) | ||||||||||||||||
| Trademarks | ( | ) | ( | ) | ||||||||||||||||
| Trade names | ( | ) | ( | ) | ||||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||
As part of the acquisition disclosed in Note 6, total intangible assets recorded to the Branded Products segment were valued at $
Amortization expense for intangible assets for the years ended December 31, 2025 and 2024 was $
Estimated future intangible amortization expense is as follows (in thousands):
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
Goodwill
As described in Note 6, the Company acquired $
| NOTE 10 - Property, Plant and Equipment, Net: |
Property, plant and equipment, net, consisted of the following (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Land | $ | $ | ||||||
| Buildings, improvements and leaseholds | ||||||||
| Machinery, equipment and fixtures | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
Depreciation expense was $
NOTE 11 – Income Tax Expense:
The components of income before income tax expense are as follows (in thousands):
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Domestic | $ | ( | ) | $ | ( | ) | ||
| Foreign | ||||||||
| Income before income tax expense | $ | $ | ||||||
Aggregate income tax provision consists of the following (in thousands):
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State and local | ||||||||
| Foreign | ||||||||
| Deferred Taxes: | ||||||||
| Deferred tax benefit | ( | ) | ( | ) | ||||
| Income tax expense | $ | $ | ||||||
The significant components of the deferred income tax asset are as follows (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred income tax assets: | ||||||||
| Pension accruals | $ | $ | ||||||
| Operating reserves and other accruals | ||||||||
| Book carrying value in excess of tax basis of intangibles | ||||||||
| Capitalized research expenses | ||||||||
| Disallowed interest | ||||||||
| Deferred income tax liabilities: | ||||||||
| Book carrying value in excess of tax basis of property | ( | ) | ( | ) | ||||
| Deferred expenses | ( | ) | ( | ) | ||||
| Net deferred income tax asset | $ | $ | ||||||
The current year difference between the total statutory Federal income tax rate and the actual effective income tax rate post implementation of ASU 2023-09 is accounted for as follows:
| Years Ended December 31, 2025 | ||||||||
| Amount | Percent | |||||||
| US Federal Statutory Income Tax Rate: | $ | % | ||||||
| Domestic Tax Effects(1) | ||||||||
| Federal Tax Credits | ||||||||
| General Business Credits | ( | ) | ( | %) | ||||
| Federal Nontaxable or Nondeductible Items | ||||||||
| Stock Based Compensation | % | |||||||
| Qualified Benefit Plans | ( | ) | ( | %) | ||||
| Other | % | |||||||
| Effect of cross-border tax laws | ||||||||
| GILTI Effects | % | |||||||
| Domestic State and local income taxes, net of federal effect | % | |||||||
| Changes in unrecognized tax benefits | % | |||||||
| Foreign Tax Effects: | ||||||||
| Brazil | ||||||||
| Statutory Income Tax Rate Differential | % | |||||||
| Belize | ||||||||
| Statutory Income Tax Rate Differential | ( | ) | ( | %) | ||||
| El Salvador | ||||||||
| Statutory Income Tax Rate Differential | ( | ) | ( | %) | ||||
| Haiti | ||||||||
| Statutory Income Tax Rate Differential | ( | ) | ( | %) | ||||
| Other Foreign Jurisdictions | % | |||||||
| Changes in valuation allowances | % | |||||||
| Other Reconciling Items | ( | ) | ( | %) | ||||
| Effective income tax rate | $ | % | ||||||
(1) State taxes in Arkansas, California and Arizona made up the majority (greater than 50%) of the tax effect in this category.
The prior year difference between the total statutory Federal income tax rate and the actual effective income tax rate pre-implementation of ASU 2023-09 is accounted for as follows:
| Year Ended December 31, 2024 | ||||
| Statutory federal income tax rate | % | |||
| State and local income taxes, net of federal income tax benefit | % | |||
| Rate impacts due to foreign operations | ( | %) | ||
| Compensation related | % | |||
| General business credits | ( | %) | ||
| Other | % | |||
| Effective income tax rate | % | |||
The effective tax rate is the result of a variety of factors, and is primarily dependent on our jurisdictional mix of earnings across the Company’s domestic and foreign operations as well as applicable statutory tax rates and unrealized gains and losses associated with share-based compensation.
The Tax Cuts and Jobs Act of 2017 (“TCJA”) included certain provisions that continue to affect our income taxes, which, among other things, include interest deduction limitations and global intangible low taxed income regulations (“GILTI”).
The 2025 reduction of overall interest expense along with the Company’s level of domestic income resulted in a current year interest expense deduction. The Company utilized a portion of its disallowed interest deferred tax asset, resulting in a favorable interest expense deduction. The remaining deferred tax assets associated with the disallowed interest expense have an indefinite life and do not expire. Management believes these deferred tax assets are more likely than not to be realized and therefore no valuation allowance has been recorded.
The TCJA imposed a U.S. tax on GILTI that is earned by certain foreign affiliates owned by a U.S. shareholder. The computation of GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. In accordance with guidance issued by FASB, the Company made a policy election to treat future taxes related to GILTI as a current period expense in the reporting period in which the tax is incurred. Deferred income taxes are provided on undistributed earnings of foreign subsidiaries in the period in which the Company determines it no longer intends to permanently reinvest such earnings outside the United States. The Company expects to permanently reinvest the earnings from its wholly-owned Brazilian and UK subsidiaries, and accordingly, has not provided deferred taxes on the subsidiaries’ undistributed net earnings or basis differences. The Company believes that the tax liability that would be incurred upon repatriation of the earnings from its Brazilian and UK subsidiaries is immaterial at December 31, 2025.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA included significant changes to the domestic and international tax provisions, such as modifications to the global tax framework, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, and the restoration of favorable tax treatment for certain business provisions. The legislation had multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not result in any material adjustments to our total income tax provision for the year ended December 31, 2025, and we have adjusted our deferred tax balances to reflect the impacts of the OBBBA enactment. Given the complexity of tax laws, related regulations and interpretations, our current estimates may require revision as additional information becomes available regarding the application of the OBBBA provisions. We are closely monitoring the applicability of OBBBA provisions to the taxability of global earnings and the overall impact that it may have on the company’s financial and tax results as these provisions come into effect through 2027.
Only tax positions that meet the more-likely-than-not recognition threshold are recognized in the financial statements. As of December 31, 2025 and 2024, we had $
Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands):
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance at the beginning of year | $ | $ | ||||||
| Additions for tax positions of prior years | ||||||||
| Reductions due to lapse of statute of limitations | ( | ) | ( | ) | ||||
| Balance at the end of year | $ | $ | ||||||
We recognize interest and penalties associated with the unrecognized tax benefit as part of the income tax provision and include accrued interest and penalties with the related reserve in other long-term liabilities in our consolidated balance sheets. During the years ended December 31, 2025 and 2024 there was no significant reduction to the liability for interest and penalties due to any lapses in statute of limitations. At December 31, 2025 and 2024, we had $
The Company evaluates all domestic and foreign audit issues and believes that it is reasonably possible that total gross unrecognized tax benefits will not significantly change within the next 12 months.
As a global organization, we file a U.S. federal income tax return as well as income tax returns in various states, and in non U.S. jurisdictions. As of December 31, 2025, the statute of limitations for the U.S. federal tax years 2021 through 2024 remain open to examination. For U.S. state and local jurisdictions tax years 2019 through 2024 are open to examination. We are also subject to examination in various foreign jurisdictions for tax years 2019 through 2024.
The Company is both a domestic and foreign income tax payer. The amount of cash income taxes paid net of refunds received are as follows (in thousands):
| Year Ended December 31, 2025 | ||||
| US Federal: | $ | |||
| US State and Local: | ||||
| Michigan | ||||
| New Jersey | ||||
| Pennsylvania | ||||
| Other | ||||
| Total Domestic | ||||
| Foreign: | ||||
| Brazil | ||||
| Other | ||||
| Total Foreign | ||||
| Total net cash taxes paid | $ | |||
NOTE 12 – Share-Based Compensation:
In May 2013, the shareholders of the Company approved the 2013 Incentive Stock and Awards Plan (the “2013 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, performance shares and other stock based compensation. In May 2022, the shareholders of the Company approved the 2022 Equity Incentive and Awards Plan (the “2022 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, performance shares and other stock based compensation. A total of
Share-based compensation is recorded in selling and administrative expense in the statements of comprehensive income. The following table details the share-based compensation expense by type of award and the total related tax benefit for the periods presented (in thousands):
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Stock options and SARs | $ | $ | ||||||
| Restricted stock | ||||||||
| Performance shares | ||||||||
| Total share-based compensation expense | $ | $ | ||||||
| Related income tax benefit | $ | $ | ||||||
Stock Options and Stock Appreciation Rights (“SARs”)
The Company grants stock options and stock-settled SARs to employees that allow them to purchase shares of the Company’s common stock. Stock options are also granted to outside members of the Board of Directors of the Company. The Company determines the fair value of stock options and SARs at the date of grant using the Black-Scholes valuation model. Assumptions regarding volatility, risk-free interest rate, expected term and dividend yield are required for the Black-Scholes model. The risk-free interest rate is based on the yield of a U.S. treasury bond with a similar maturity to the award’s expected life. The expected life for awards granted is based on the historical exercise patterns experienced by the Company when the award is made. The determination of expected stock price volatility for awards is based on historical Superior common stock prices over a period commensurate with the expected life. The dividend yield assumption is based on the history and expectation of the Company’s dividend payouts. There were no stock options or SARs granted in 2025.
The following table summarizes significant assumptions utilized to determine the fair value of stock options and SARs:
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Stock Options: | ||||||||
| Risk free interest rate | - | 4.3% - 4.5% | ||||||
| Expected award life (years) | - | |||||||
| Expected volatility | - | 45.7% - 56.7% | ||||||
| Expected dividend yield | - | 2.8% - 4.1% | ||||||
| Weighted average fair value per share at grant date | - | $ | ||||||
| SARs: | ||||||||
| Risk free interest rate | - | 4.3 | % | |||||
| Expected award life (years) | - | |||||||
| Expected volatility | - | 45.7 | % | |||||
| Expected dividend yield | - | 4.1 | % | |||||
| Weighted average fair value per share at grant date | - | $ | ||||||
All stock options and SARs granted prior to August 3, 2018 vested immediately when granted. Awards issued thereafter vest between one and three years after the grant date. Employee awards expire five years after the grant date, and those issued to directors expire ten years after the grant date. The Company issues new shares upon the exercise of stock options and SARs. Stock options and SARs granted in tandem with stock options are subject to accelerated vesting under certain circumstances as outlined in the 2013 and 2022 Plans, as applicable.
A summary of stock option transactions during the year ended December 31, 2025 follows:
| Weighted Average | Aggregate | |||||||||||||||
| No. of | Weighted Average | Remaining Life | Intrinsic Value | |||||||||||||
| Shares | Exercise Price | (in years) | (in thousands) | |||||||||||||
| Outstanding, January 1, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Lapsed or cancelled | (139,611) | |||||||||||||||
| Outstanding, December 31, 2025 | ||||||||||||||||
| Exercisable, December 31, 2025 | ||||||||||||||||
Intrinsic value is the difference between the market value of our common stock and the exercise price of each stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price. Options exercised during the years ended December 31, 2025 and 2024 had intrinsic values of $
A summary of stock-settled SARs transactions during the year ended December 31, 2025 follows:
| Weighted Average | Aggregate | |||||||||||||||
| No. of | Weighted Average | Remaining Life | Intrinsic Value | |||||||||||||
| Shares | Exercise Price | (in years) | (in thousands) | |||||||||||||
| Outstanding, January 1, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Lapsed or cancelled | ( | ) | ||||||||||||||
| Outstanding, December 31, 2025 | ||||||||||||||||
| Exercisable, December 31, 2025 |
SARs exercised during the years ended December 31, 2025 and 2024 had intrinsic values of $
Restricted Stock
The Company has granted shares of restricted stock to directors and certain employees, which vest at a specified future date, generally after three years, over five years or when certain conditions are met. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 and 2022 Plans, as applicable. Expense for each of these grants is based on the fair value at the date of the grant and is being recognized on a straight-line basis over the respective service period.
A summary of restricted stock transactions during the year ended December 31, 2025 follows:
| Weighted Average | ||||||||
| No. of | Grant Date | |||||||
| Shares | Fair Value | |||||||
| Outstanding, January 1, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Outstanding, December 31, 2025 | ||||||||
The table above includes
As of December 31, 2025, the Company had $
Performance Shares
The Company has granted performance shares, which either contain only service-based vesting conditions or service-based and performance-based vesting conditions. The service-based awards vest after the service period is met, which is generally three to five years. Expense for these grants is based on the fair value on the date of the grant and is being recognized on a straight-line basis over the respective service period. The performance-based awards generally vest after five years if the performance and service targets are met. The Company evaluates the performance conditions associated with these grants each reporting period to determine the expected number of shares to be issued. Expenses for grants of performance shares are recognized on a straight-line basis over the respective service period based on the grant date fair value and expected number of shares to be issued. The awards are subject to accelerated vesting on a pro rata basis under certain circumstances as outlined in the 2013 and 2022 Plans, except in those circumstances in which award agreements or change in control agreements specify full vesting.
On May 1, 2024, the Compensation Committee approved the Company entering into a grant of
A summary of performance share transactions during the year ended December 31, 2025 follows:
| Weighted Average | ||||||||
| No. of | Grant Date | |||||||
| Shares | Fair Value | |||||||
| Outstanding, January 1, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Outstanding, December 31, 2025 | ||||||||
As of December 31, 2025, the Company had $
NOTE 13 – Stock Repurchase Plan:
On March 7, 2025, the Board of Directors approved a stock repurchase plan which authorizes the Company to repurchase up to an additional $
On September 19, 2025, the Company entered into a 10b5-1 trading plan (the “Plan”) for the purpose of repurchasing up to a specified number of shares of the Company’s outstanding common stock (the “Repurchase Limit”) in accordance with the $
For the twelve-months ended December 31, 2025,
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease expense | $ | $ | ||||||
| Short-term lease expense | ||||||||
| Total lease expense | $ | $ | ||||||
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating cash flows – cash paid for operating lease liabilities | $ | $ | ||||||
| Non-cash – Operating lease right-of-use assets obtained in exchange for new lease liabilities | $ | $ | ||||||
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Weighted-average remaining lease term (in years) | ||||||||
| Weighted average discount rate | % | % | ||||||
| Operating Leases | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less imputed interest | ||||
| Present value of lease liabilities | $ |
| ||
| Discount Rate | Long Term Rate of Return | Salary Scale | ||||||||||
| 2024 | % | N/A | % | |||||||||
| 2025 | % | N/A | % | |||||||||
| Years | Payments | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031-2035 | ||||
NOTE 16 – Other Information:
| The activity in the allowance for doubtful accounts receivable was as follows (in thousands): |
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance at the beginning of year | $ | $ | ||||||
| Credit loss expense | ||||||||
| Write-Off of Accounts Receivable | ( | ) | ( | ) | ||||
| Balance at the end of year | $ | $ | ||||||
| The activity in the reserve for sales returns and allowances was as follows (in thousands): |
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance at the beginning of year | $ | $ | ||||||
| Provision for returns and allowances | ||||||||
| Actual returns and allowances paid to customers | ( | ) | ( | ) | ||||
| Balance at the end of year | $ | $ | ||||||
Other current liabilities consisted of the following (in thousands)
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Salaries, wages, commissions and other compensation | $ | $ | ||||||
| Contract liabilities | ||||||||
| Accrued rebates | ||||||||
| Current operating lease liabilities | ||||||||
| Customer deposits | ||||||||
| Other accrued expenses | ||||||||
| Other current liabilities | $ | $ | ||||||
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company conducted an evaluation, under supervision and with the participation of the Company’s principal executive officer, Michael Benstock, and the Company’s principal financial officer, Michael Koempel, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to ensure that information the Company is required to disclose in its filings with the SEC under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:
| • |
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; and |
| • |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
| • |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.
The Company’s independent registered public accounting firm, Grant Thornton LLP, has issued a report on the effectiveness of the Company’s internal control over financial reporting, which appears in Part II, Item 8 of this Form 10-K.
| Item 9B. | Other Information |
During the quarter ended December 31, 2025, no director or officer adopted or terminated a contract, instruction or written plan disclosable under Item 408(a) of Regulation S-K.
On February 26, 2026, the Company entered into an amendment (the “Amendment”) with Michael Koempel to the employment agreement, dated as of February 13, 2024, by and between the Company and Mr. Koempel, in order to (i) reflect his title as President and Chief Financial Officer of the Company and (ii) to increase his base salary to $665,625 beginning on January 1, 2026.
The foregoing description of the Amendment is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the text of such document, which is attached hereto as Exhibit 10.31.1 and incorporated by reference herein. Except as described herein, all other terms of Mr. Koempel’s existing employment agreement with the Company and other compensatory arrangements, as described in the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2024, and in the Company’s definitive proxy statement for its 2025 Annual Meeting of Shareholders filed with the SEC on March 27, 2025, remain in full force and effect.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
PART III
| Item 10. | Directors, Executive Officers and Corporate Governance |
The information required by this Item is incorporated herein by reference to the Company’s definitive proxy statement to be filed in connection with its 2026 Annual Meeting of Shareholders.
| Item 11. | Executive Compensation |
The information required by this Item is incorporated herein by reference to the Company’s definitive proxy statement to be filed in connection with its 2026 Annual Meeting of Shareholders.
| Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
| Equity Compensation Plan Information |
| The following table provides information about our common stock that may be issued upon the exercise of options, warrants, rights and restricted stock under all our existing equity compensation plans as of December 31, 2025: |
| Plan category |
(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights |
(b) Weighted-average exercise price of outstanding options, warrants and rights |
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
| Equity compensation plans approved by security holders |
783,685 | $ | 14.99 | 640,781 | ||||||||
| Equity compensation plans not approved by security holders |
- | - | - | |||||||||
| Total |
783,685 | 640,781 | ||||||||||
All other information required by this Item is incorporated herein by reference to the Company’s definitive proxy statement to be filed in connection with its 2026 Annual Meeting of Shareholders.
| Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
The information required by this Item is incorporated herein by reference to the Company’s definitive proxy statement to be filed in connection with its 2026 Annual Meeting of Shareholders.
| Item 14. |
Principal Accountant Fees and Services |
The information required by this Item is incorporated herein by reference to the Company’s definitive proxy statement to be filed in connection with its 2026 Annual Meeting of Shareholders.
PART IV
| Item 15. |
Exhibits and Financial Statement Schedules |
||||
| (a)(1) |
Financial Statements. The following financial statements of Superior Group of Companies, Inc. are included in Part II, Item 8: |
||||
| Report of Independent Registered Public Accounting Firm |
|||||
| Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024 |
|||||
| Consolidated Balance Sheets as of December 31, 2025 and 2024 |
|||||
| Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024 |
|||||
| Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 |
|||||
| Notes to the Consolidated Financial Statements |
|||||
| (a)(2) |
Financial Statement Schedules. |
||||
|
|
All schedules are omitted because they are not applicable, or not required, or because the required information is included in the consolidated financial statements or notes thereto. |
||||
| (a)(3) |
Exhibits. |
||||
| See Exhibit Index |
|||||
SUPERIOR GROUP OF COMPANIES, INC.
EXHIBIT INDEX
| Exhibit No. |
Description |
| 3.1 | Amended and Restated Articles of Incorporation of Superior Group of Companies, Inc., as amended on May 3, 2018, filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 3.2 |
Amended and Restated Bylaws of the Registrant, filed as Exhibit 3.2 to the Form 8-K filed on May 4, 2018 and incorporated herein by reference. |
| 4.1 | Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, filed as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020 and incorporated herein by reference. |
| 4.2 | Form of Common Stock Certificate of Registrant, filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-249760) on October 30, 2020 and incorporated herein by reference. |
| 4.3 | Registration Rights Agreement, filed as Exhibit 4.9 to the Registrant’s Registration Statement on Form S-3 (File No. 333-249760) on October 30, 2020 and incorporated herein by reference. |
| 10.1† |
Form of Director/Officer Indemnification Agreement filed as Exhibit 10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and incorporated herein by reference. |
| 10.2 |
1994 Superior Surgical Mfg. Co., Inc. Supplemental Pension Plan as amended and restated on July 30, 2013, filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on August 2, 2013 and incorporated herein by reference. |
| 10.3 |
1994 Superior Surgical Mfg. Co., Inc. Supplemental Pension Plan as amended and restated on November 7, 2008, filed as Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference. |
| 10.4† |
Severance Protection Agreement with Michael Benstock, dated November 23, 2005, filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on November 28, 2005 and incorporated herein by reference. |
| 10.5† |
2013 Incentive Stock and Awards Plan of the Registrant filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 7, 2013, and incorporated herein by reference. |
| 10.6† |
Form of Incentive Stock Option Agreement With Vesting Provisions, filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on May 7, 2013 and incorporated herein by reference. |
| 10.7† |
Form of Stock Appreciation Rights Agreement, filed as Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed on May 7, 2013 and incorporated herein by reference. |
| 10.8† |
Form of Non-Qualified Stock Option Grant For Outside Directors, filed as Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed on May 7, 2013 and incorporated herein by reference. |
| 10.9† |
Form of Incentive Stock Option Agreement With Vesting Provisions, filed as Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed on May 7, 2013 and incorporated herein by reference. |
| 10.10† | Form of Restricted Stock Agreement, filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on February 13, 2014 and incorporated herein by reference. |
| 10.11† | Form of Performance Share Agreement, filed as Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference. |
| 10.12† | Form of Stock Appreciation Rights Agreement, filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 and incorporated herein by reference. |
| 10.13† |
Superior Uniform Group, Inc. Deferred Compensation Plan, filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on August 2, 2013 and incorporated herein by reference. |
| 10.14† |
Superior Uniform Group, Inc. Trust Agreement, filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on August 2, 2013 and incorporated herein by reference. |
| 10.15†,# |
Employment Agreement, effective July 1, 2021, between The Office Gurus, LLC and Dominic Leide, filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.16†,# | Amendment, dated November 4, 2024, to Employment Agreement between The Office Gurus, LLC and Dominic Leide, filed as Exhibit 10.18.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.17†,# | Change in Control Agreement, made as of July 8, 2021, between Superior Group of Companies, Inc. and Jordan Alpert, filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.18†,# | Retention Agreement, made as of July 8, 2021, between Superior Group of Companies, Inc. and Jordan Alpert, filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.19†,# | Amended and Restated Performance Share Award, dated July 1, 2021, granted to Dominic Leide, filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.20† | Restricted Stock Award, dated July 8, 2021, granted to Jordan Alpert, filed as Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.21†,# | Performance Share Award, dated July 1, 2021, granted to Jake Himelstein, filed as Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.22† | Restricted Stock Award, dated July 1, 2021, granted to Jake Himelstein, filed as Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.23†,# | Employment Agreement, effective July 1, 2021, between BAMKO, LLC and Jake Himelstein, filed as Exhibit 10.11 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference. |
| 10.23.1†, # | Amendment, dated November 4, 2024, to Employment Agreement between BAMKO, LLC and Jake Himelstein filed as Exhibit 10.27.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.24† | Superior Group of Companies, Inc. 2022 Equity Incentive and Awards Plan, incorporated by reference to Annex A to the Registrant’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on March 31, 2022. |
| 10.25† | Form of Incentive Stock Option Agreement, filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference. |
| 10.26† | Form of Non-Qualified Stock Option Grant For Outside Directors, filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference. |
| 10.27† | Form of Restricted Stock Agreement, filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference. |
| 10.28† | Form of Performance Share Agreement, filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference. |
| 10.29† | Form of Stock Appreciation Rights Agreement, filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference. |
| 10.30 | Credit Agreement, dated as of August 23, 2022, among Superior Group of Companies, Inc., the Guarantors party thereto, the Lenders party thereto, and PNC Bank, National Association, as administrative agent for the Lenders filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 24, 2022, and incorporated herein by reference. |
| 10.30.1 | First Amendment to Credit Agreement, dated May 4, 2023, filed as Exhibit 10.1 to Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and incorporated herein by reference. |
| 10.30.2 | Second Amendment to Credit Agreement, dated March 7, 2025, filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K and filed on March 11, 2025 and incorporated herein by reference. |
| 10.31† | Employment Agreement, effective February 13, 2024, between Superior Group of Companies, Inc. and Michael Koempel, filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 15, 2024, and incorporated herein by reference. |
| 10.31.1*,†,# |
Amendment, effective February 26, 2026, to Employment Agreement between Superior Group of Companies, Inc. and Michael Koempel. |
| 10.32† | Performance Share Award, dated May 6, 2024, granted to Michael Benstock, filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference. |
| 10.33† | Performance Share Award, dated May 6, 2024, granted to Michael Koempel, filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference. |
| 10.34† | Restricted Stock Award, dated November 4, 2024, granted to Dominic Leide, filed as Exhibit 10.38 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.35† | Restricted Stock Award, dated November 4, 2024, granted to Jake Himelstein, filed as Exhibit 10.39 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.36†, # | Employment Agreement, effective May 13, 2022, between Superior Group of Companies, Inc. and Catherine Beldotti Donlan, filed as Exhibit 10.40 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.36.1†,# | Amendment, dated February 15, 2024, to Employment Agreement between Superior Group of Companies, Inc. and Catherine Beldotti Donlan, filed as Exhibit 10.40.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.37†,# | Performance Share Award, dated February 15, 2024, granted to Catherine Beldotti Donlan, filed as Exhibit 10.41 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 10.38† | Employment Letter, dated February 13, 2024, between Superior Group of Companies, Inc. and Jordan Alpert, filed as Exhibit 10.42 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2024 and incorporated herein by reference. |
| 19.1 | Superior Group of Companies, Inc. Insider Trading Policy. |
| 21.1* | Subsidiaries of the Registrant. |
| 23.1* |
Consent of Independent Registered Public Accounting Firm - Grant Thornton LLP |
| 24.1* |
Power of Attorney (included on the signature page hereto) |
| 31.1* | Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2* |
Certification of President & Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1** |
Written Statement of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. |
| 32.2** |
Written Statement of President & Chief Financial Officer pursuant to 18 U.S.C. Section 1350. |
| 97.1† | Superior Group of Companies, Inc. Clawback Policy |
| 101.INS+ |
Inline XBRL Instance Document. |
| 101.SCH+ |
Inline XBRL Taxonomy Extension Schema. |
| 101.CAL+ |
Inline XBRL Taxonomy Extension Calculation Linkbase. |
| 101.DEF+ |
Inline XBRL Taxonomy Extension Definition Linkbase. |
| 101.LAB+ |
Inline XBRL Taxonomy Extension Label Linkbase. |
| 101.PRE+ |
Inline XBRL Taxonomy Extension Presentation Linkbase. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
† Management contracts and compensatory plans and arrangements.
# Portions omitted in accordance with Item 601(b) of Regulation S-K.
* Filed herewith
** Furnished herewith
+ Submitted electronically with this Annual Report.
| Item 16. |
Form 10-K Summary |
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SUPERIOR GROUP OF COMPANIES, INC. | ||
| By: | /s/ Michael Benstock | |
| Michael Benstock | ||
| Chief Executive Officer (Principal Executive Officer) |
DATE: March 3, 2026
POWER OF ATTORNEY
BY THESE PRESENTS, each person whose signature appears below constitutes and appoints each of Michael Benstock, Michael Koempel and Jordan M. Alpert his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his or her substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| /s/ Michael Benstock | |||
| Michael Benstock, March 3, 2026 | |||
| Chief Executive Officer and Director | |||
| (Principal Executive Officer) | |||
| /s/ Michael Koempel | /s/ Loreen Spencer | ||
| Michael Koempel, March 3, 2026 | Loreen Spencer, March 3, 2026 | ||
| President & Chief Financial Officer | (Director) | ||
| (Principal Financial and Accounting Officer) | |||
| /s/ Andrew D. Demott, Jr | /s/ Susan Lattmann | ||
| Andrew D. Demott, Jr., March 3, 2026 | Susan Lattman, March 3, 2026 | ||
| (Director) | (Director) | ||
| /s/ Paul Mellini | /s/ Venita Fields | ||
| Paul Mellini, March 3, 2026 | Venita Fields, March 3, 2026 | ||
| (Director) | (Director) | ||
| /s/ Todd Siegel | |||
| Todd Siegel, March 3, 2026 | |||
| (Director) |
FAQ
How did Superior Group of Companies (SGC) perform financially in 2025?
What were Superior Group of Companies’ 2025 segment sales by business line?
How much did Superior Group of Companies return to shareholders in 2025?
What key risks does Superior Group of Companies (SGC) highlight in its 2025 10-K?
How leveraged is Superior Group of Companies as of December 31, 2025?
What is Superior Group of Companies’ workforce size and geographic footprint?
Did Superior Group of Companies repurchase shares under a 10b5-1 plan in 2025?
