Superior Group of Companies (SGC) Singular Research Autumn Equinox 2024 summary

Business overview and segment highlights

• Operates in three segments: healthcare apparel, branded products, and contact centers, each in large, fragmented, and growing markets.

• Healthcare apparel serves both institutional and consumer markets, with strong brands like Wink and Carhartt, and a $4B+ addressable market.

• Branded products segment provides uniforms and promotional items for major brands, with high customer retention and a $24B industry size.

• Contact center segment, The Office Gurus, is the fastest-growing and highest-margin business, focused on nearshore services for SMBs.

• All segments demonstrate high customer retention and long-standing relationships with leading brands.

Financial performance and growth

• Achieved $543M in 2023 revenue, up from $346M in 2017, with a 9% annual growth rate.

• Ten-year annualized growth rate of 14%, with 2024 revenue expected to reach $567M.

• Growth driven by both organic expansion and strategic acquisitions, especially in branded products and healthcare apparel.

• Net leverage ratio improved to 1.7x EBITDA by Q2 2023, exceeding internal targets.

• Consistent dividend payments since 1977, with periodic increases and a recent $10M share repurchase authorization.

Operational updates and strategic initiatives

• Launched direct-to-consumer healthcare apparel website in Q2 2023, expanding omni-channel reach.

• Addressed Q2 2023 supply chain delays by adjusting operations, expecting sales to normalize in H2 2023 and reiterating full-year guidance.

• Capital investments typically 1-1.5% of revenue, with larger investments every 4-5 years for automation and efficiency.

• M&A focus remains on branded products and contact centers, with ongoing evaluation of targets for capabilities, customers, and synergies.

• Corporate social responsibility initiatives are ongoing, with reporting available online.