Superior Uniform Group, Inc. reports loss in the operating results of 2008
Earnings from continuing operations for the year and for the fourth quarter ended December 31, 2008 include a non-cash goodwill impairment loss of $1,617,411.
Superior Uniform Group, Inc., manufacturer of uniforms, image apparel and accessories, announced its fourth quarter and year-end operating results for 2008.
The Company announced that for the year ended December 31, 2008, net sales increased 2.7% to $123,745,201, compared to 2007 net sales of $120,457,891. Earnings from continuing operations were $2,290,333 or $.35 per share (diluted) compared to $3,695,831 or $.55 per share (diluted) reported for the year ended December 31, 2007. Earnings from continuing operations for the year and for the fourth quarter ended December 31, 2008 include a non-cash goodwill impairment loss of $1,617,411.
Net of the related tax benefit, the goodwill impairment loss amounted to approximately ($.20) per share (diluted). The goodwill impairment loss was identified in connection with the Company’s annual fourth quarter impairment test and reflects year-end market conditions. The impairment loss will not result in any cash expenditures and will not affect the company’s cash position, liquidity position or availability under its credit facilities. After recognizing this impairment loss, the Company has no remaining goodwill on its consolidated balance sheet as of December 31, 2008.
Loss from discontinued operations for the year ended December 31, 2008 was $156,560 or $.02 per share (diluted) compared to $1,146,503 or $.17 per share (diluted) for the year ended December 31, 2007.
Net earnings for the year ended December 31, 2008 were $2,133,773 or $.33 per share (diluted) compared to $2,549,328 or $.38 per share (diluted) reported for the year ended December 31, 2007.
Loss from continuing operations for the fourth quarter ended December 31, 2008, including the impact of the $1,617,411 goodwill impairment loss discussed above, was $(820,065) or $(.13) per share (diluted) compared to earnings of $1,294,671 or $.19 per share (diluted) reported for the fourth quarter ended December 31, 2007. Loss from discontinued operations for the fourth quarter ended December 31, 2008 was $1,950 or $.0 per share (diluted) compared to $747,353 or $.11 per share (diluted) for the fourth quarter ended December 31, 2007. Net loss for the fourth quarter ended December 31, 2008 was $(822,015) or $(.13) per share (diluted) compared to net earnings of $547,318 or $.08 per share (diluted) reported for the fourth quarter ended December 31, 2007.
Michael Benstock, Chief Executive Officer, commented: “We are pleased to report that in spite of an intense economic downturn and resultant competitive pressures we were able to sustain profitability levels (prior to goodwill impairment loss) in line with our prior year. As the year progressed, the impact of the unprecedented downward spiral of the economy became more and more pronounced as our customers reduced their workforces, experienced lower turnover and held the line on their purchasing of uniforms. Some orders were deferred or cancelled, resulting in a fourth quarter which was considerably below our budgets and erased much of the sales gains from the stellar performance of the first three quarters of the year. Notwithstanding this, we still were able to record a sales gain of nearly 3% for the year and respectable earnings.
“Fiscal year 2009 is expected to be a very challenging year for everyone running a business. What seems particularity encouraging for Superior Uniform Group and Our Signature Brands® is the much higher level of activity with potential new customers since the middle part of 2008. Our Customer Relationship Management and Marketing processes, as well as improved sales training programs that were deployed during 2008 are resulting in a heightened ability for us to showcase our designs, products and capabilities to new prospective customers. Market penetration will be a key focus of our sales efforts in 2009.
“Right-sizing our business continually based on the realities of the national economic crisis is a priority. We were fortunate to have invested in moving many of our administrative functions to El Salvador during the two years prior to the current downturn. This has allowed us to maintain very high levels of customer service at much lower operating costs to support the efforts of our associates nationwide. As a result of our success in transitioning many of Superior’s administrative functions to El Salvador, we have started a new business unit called The Office Gurus® in El Salvador that will concentrate on selling call center/contact center functions to other companies looking to similarly reduce operating costs. We believe that we have a unique business model to offer other companies and in so doing we will be able to provide additional revenue sources to Superior. We will also be able to reduce our own costs further by sharing administrative overheads with those customers.
“Additionally, we have repurchased approximately 617,000 shares of our common stock in the current year. We remain committed to repurchasing additional shares as we believe the market continues to undervalue our shares. We have approximately 575,000 shares remaining on the current repurchase authorization.”
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