Superior Uniform at Noble Capital Markets: Strategic Growth and Optimism

On Wednesday, 08 October 2025, Superior Uniform Group Inc (NASDAQ:SGC) presented at the Noble Capital Markets Emerging Growth Virtual Investor Conference, outlining its strategic direction amidst a challenging macroeconomic environment. The company, led by CEO Michael Benstock and CFO Michael W. Koempel, emphasized its diversified business model and commitment to shareholder returns. While addressing challenges such as tariffs, the company remains optimistic about growth prospects across its segments, including Healthcare Apparel, Branded Products, and Contact Centers.

Key Takeaways

• Superior Uniform reported $566 million in revenue for 2024, with an annual growth rate of 8%.
• The company maintains a strong dividend history since 1977, with a current yield of 6%.
• AI integration in contact centers is enhancing performance and reducing costs.
• Strategic acquisitions are planned to expand branded products and contact center segments.
• The company aims to manage costs and improve margins across all segments.

Financial Results

• Total revenues for 2024 were $566 million, up from $196 million in 2014, reflecting an 11% annualized growth rate.
• Superior Uniform has consistently paid dividends since 1977, with a current yield of approximately 6%.
• The company executed $7 million in share repurchases this year, with a total authorization of $17.5 million.
• A leverage ratio target of 2 to 2.5 times EBITDA is maintained for strategic financial management.

Operational Updates

• Healthcare Apparel: Over 2 million individuals wear Superior Uniform’s healthcare apparel daily, in a market valued at over $4 billion.
• Branded Products: The segment, within the top 10 largest U.S. branded distributors, reported 14% revenue growth in Q2.
• Contact Centers: The Office Gurus, operating in multiple locations, achieved a 22% sales growth over five years, with a 12.6% EBITDA margin in 2024.
• AI Deployment: AI is utilized in over 35 contact center accounts, enhancing agent performance and customer satisfaction.

Future Outlook

• The company is exploring offshore expansions for its contact center business, potentially through acquisitions.
• Margin growth is targeted across all segments by reducing costs and boosting sales capabilities.
• Strategic acquisitions are being considered in the branded products and contact center sectors to enter new geographies or business lines.

Q&A Highlights

• Tariffs: Superior Uniform has mitigated tariff impacts through manufacturing diversification and pricing strategies.
• Customer Sentiment: While improving post-April 2025, some uncertainty persists due to economic and political factors.
• AI Technology: The company is evaluating opportunities to install AI technology for non-BPO businesses.
• Capital Allocation: Priorities include supporting dividends, organic business investment, and strategic acquisitions.

Readers are encouraged to refer to the full transcript for a detailed understanding of Superior Uniform Group’s strategic plans and financial performance.

Full transcript - Noble Capital Markets Emerging Growth Virtual Investor Conference:

Michael, Analyst, Noble: Covered by Noble, and we have an outperform rating with a $16 price target. I will also add that the company offers a compelling dividend, providing an attractive total return vehicle. I would also mention that they are off of a very strong second quarter, have really good momentum, yet the stock hasn’t really performed as well as I had expected. I think it’s an attractive entry point here. All of the research on Superior Group of Companies is available on channelcheck.com. With us today are Michael Benstock, the Chairman and CEO, and Michael W. Koempel. He is now the new President and CFO. While he’s been promoted to President, we congratulate Michael. With that, let me turn it over to Mike. Thank you, Mike.

Michael W. Koempel, President and CFO, Superior Group of Companies: Thank you, Michael. Good afternoon, everyone. We appreciate your time and interest in Superior Group of Companies and are very excited to share the highlights of Superior Group of Companies. As Michael said, my name is Michael W. Koempel. I am President and CFO of SGC. Joining me is Michael Benstock, our Chairman and CEO. Michael’s family started the business over 100 years ago, and Michael has worked in various positions throughout the business for over 46 years, including 22 years as our CEO. Here is our safe harbor statement, which you can read at your leisure. We believe Superior Group of Companies is a compelling investment for several reasons. We have three attractive, diversified businesses which operate in large, profitable growth industries.

The industries in which we participate are highly fragmented, with ample opportunity for organic growth, given our still modest share of the market, which is further enabled by our very strong customer retention across all of our segments. All of our segments have a history of growth and profitability, with our contact center business representing our highest margin and fastest growing business. Lastly, we have a solid balance sheet driven by strong operating cash flow, with consistently paid dividends since 1977. We have a share repurchase authorization in place. Here is a quick overview of our revenue growth over the last few years by segment, which, as you can see, resulted in an average annual growth rate of 8%. You can see across each of our segments, we’ve again demonstrated growth across all three of our business segments.

With that said, I’ll now turn it over to Michael to go a little bit deeper into each of our business segments. Michael.

Michael Benstock, Chairman and CEO, Superior Group of Companies: Hey, thanks, Mike, and welcome, everybody. Glad you could join us. To give you a little insight to our company, we’re one of the largest and oldest providers of healthcare apparel in the country, focusing on consumers as well as healthcare institutions. First, on the consumer portion of the business, we have two very strong brands: Wink, which is an internally developed brand that makes up the largest piece of our revenue. We complement that brand with an exclusive license from Carhartt, which we all know is one of the world’s most iconic apparel and accessory brands. On the institutional side of healthcare apparel, servicing healthcare laundries and distributors, we have one of the oldest and most well-known brands in the industry: Fashion Seal Healthcare. This was founded over 100 years ago by my great-grandmother, Rose Benstock.

More than 2 million people wear our healthcare apparel to work every single day. With an estimated TAM of over $4 billion, it’s clear that although we are one of the top five players in the industry, there’s still a ton of market share for us to capture. We also have all channels of distribution covered. Our healthcare offering is available via wholesale, through specialty stores, e-tailers, retailers, laundries, and distributors. Starting a couple of years ago, we’ve taken it a step further to address consumers directly through our direct-to-consumer channel. Our customer list includes some of the most prominent, influential healthcare organizations across various industries. We’re proud to collaborate with leaders of the retail sector, as well as esteemed healthcare laundries, servicing healthcare providers on a truly formidable scale. Let’s jump to our second business segment, which is branded products.

This segment provides branded merchandise, also known as promotional products, and logoed uniforms to some of the largest companies in the world. We build for our clients gifts that are used for employee and customer incentive programs, uniform programs, conference giveaways, gifts with purchase, branded retail revenue-producing merchandise, and pretty much any item in the world that you can think of with a logo on it. Let’s look a little bit more into the numbers behind our industry. Most people are surprised to hear that the branded products industry sits at approximately $26 billion in annual revenue. Some interesting facts. Our industry has over 25,000 companies in the U.S. as competitors, small and large, and is highly fragmented. We have climbed from obscurity in nine years to now being within the top 10 largest branded distributors in the U.S. We produce tens of millions of branded products per year.

Another interesting fact is that over 5 million Americans go to work every day wearing uniforms made by HPI, which is part of this segment. Our company proudly collaborates with some of the largest and most renowned brands across the globe. This is like a walk down Main Street for most of us. We’ve achieved high customer retention among these companies, which clearly signifies that we consistently deliver exceptional results and exceed their expectations. Next up, Mike will take us through our final segment, the contact center segment. Mike.

Michael W. Koempel, President and CFO, Superior Group of Companies: Thanks, Michael. Contact centers are our third business, which we operate as The Office Gurus. The Office Gurus is a group of nearshore contact centers supporting both inbound and outbound call services on behalf of a number of brands across a variety of industries. We operate across three nearshore countries: El Salvador, Belize, and the Dominican Republic, as well as in the state of Florida. By focusing on the small to medium-sized opportunities, we provide our clients with high-touch service as compared to larger engagements with thousands of agents that are largely focused on transactional services. We also bring consistent processes and leverage analytics and technology, all of which are focused on improving customer experience for our clients. This is another large and growing market, which you can see exceeds over $100 billion in the U.S. alone.

As you can see, our market share of the overall market is minimal because we’re primarily focusing on onboarding clients that are smaller, that often have quickly growing needs. As I mentioned before, this is our fastest growing business, with a five-year growth rate of 22% in sales through 2024, and a very attractive EBITDA margin of 12.6% in 2024, with a strong net revenue retention. Like our other segments, you can see on our slide our contact center business services a number of brands, ranging from established, well-known brands to up-and-coming businesses. Now, I’ll briefly switch gears for a quick financial overlook. As you can see here, over the last 10 years, Superior Group of Companies has grown significantly at an annualized growth rate of 11%. Total SGC revenues in 2024 were $566 million, as compared to $196 million in 2014.

SGC revenue growth has been driven by all three of our business segments: a combination of organic growth combined with strategic acquisitions in both our branded products and healthcare apparel segments. Looking at our capital allocation strategy, it’s really focused on four priorities. First, we recognize the importance of our dividend as a return to our shareholders. For that reason, we’ve consistently paid a dividend since 1977, and at certain points in time, have raised the dividend rate. Second, we take advantage of opportunistic share repurchases with our current authorized plan. Third, we continue to make the necessary capital investments in our business to support growth, typically in the range of 1% to 1.5% of revenues. Lastly, enabled by our strong financial position, in a disciplined manner, we will consider strategic acquisitions that are highly accretive and complementary to our existing businesses. That concludes our presentation.

I do want to note that you can find an expanded investor presentation on our website for additional information on our three business segments. With that, I’ll turn it over to you, Michael, for any questions that you might have.

Michael Benstock, Chairman and CEO, Superior Group of Companies: Thank you, Mike, and obviously a very compelling presentation. I just wanted to kind of follow up on a couple of questions here. Obviously, you’re in three attractive businesses, and I was wondering if you can just kind of give us a sense of the macro environment and how that has shaped demand over the past year, and what type of conditions you would typically need to see each of those businesses start to really hit their groove, particularly in the light of the fact that we’re starting to see some Fed rate action on lowering rates and so forth. If you can kind of give us a sense of what you’re seeing. Yeah. I’ll take that. Each of the businesses is different, and even our customer base is so diversified that you see differences between the different types of customers that we have.

Overall, start with our largest segment, our branded products segment. Post-election, even maybe a month or so before the election, we saw things starting to slow down. A lot of uncertainty about what was going to happen politically. A lot of eyes were on the election and not focused necessarily on purchasing gifts and for employees and for customers. We expected once the election was over, that would abate, and everybody take themselves off a pause and start buying again. We know they had the budgets to do it, but we didn’t see the kind of activity that we expected right away. There was a lot of talk about tariffs and a lot of talk about uncertainty. Up through probably the beginning of April, which we all know what happened then, things were pretty slow. Things started getting back on track after that, and are since on track.

We came out of the second quarter looking pretty good. There was, I think, a sort of pent-up demand that we’re able to benefit by. Also, I think a lot of people pulled some of their purchases forward into the second quarter because they were concerned about the tariffs. It’s been this up and down. If you’d asked me a couple of weeks ago about tariffs, I would have said, "Oh, well, I think we’re done with that noise." We had situated ourselves with our diversified manufacturing base everywhere. It really wasn’t going to impact very much. We were able to raise prices in most instances. There’s been noise. We thought we were done with tariffs, but there’s been some noise in the last couple of weeks, particularly that hit the furniture industry and hit the heavy truck manufacturing, even when we thought everything was done.

Who knows what our administration is going to do next? I think we’re pretty well protected. I think we’re in holiday season. We’re coming up soon, and employees will get holiday gifts. I think everybody, if we could see in the macro environment an interest rate cut this year, some visibility to there being some cuts next year, things really, I think, would heat up for that business and help us greatly. I’m not disappointed with how we did in the second quarter. I think, Mike, correct me if I’m wrong, we’re up 14% in revenue. That’s a nice jump. Sometimes we’re comparing ourselves in a prior year against a rollout that happened, but in the second quarter, we weren’t. It was a good quarter for us. In the healthcare apparel business, that business is steady. I don’t think that the market has slowed down purchasing necessarily.

I think nurses still need uniforms. They’re still taking a portion of their paychecks and buying uniforms. That’s on the digital side, on the direct-to-consumer side, or when we’re selling through Amazon or other people. On the institutional side, which is a very cautious side of that business, when I say the institutional side, these are the laundries that we’re selling to, the Cintas and the UniFirst, and the different distributors that are out there. They’re acting more cautiously. They’re acting more cautiously with their spend, with their capital spend, as well as resupplying themselves with uniforms. There’s been some consolidation within healthcare. Ultimately, that will be helpful. While that’s going on, that creates a certain amount of uncertainty around how much they should be buying at any given time of the particular uniforms or renting from the laundries at the particular time.

If you look overall at the reports that have been produced for the institutional laundry market, you’ll see that the market looks very healthy. We’re feeling good about that in the future as well. The contact center business, there’s a huge demand for nearshore contact center services. Our pipelines are as full as they’ve ever been. We have more business at the end stage of a pipeline than we’ve ever had. Businesses waiting to close when people get some certainty around what’s going to happen. We are putting on new accounts at a pretty good rate and are seeing visibility to getting back to higher growth in that business in the near future. We’ve said it before, we are looking for an offshore presence. Right now, we’re nearshore primarily. We’re looking for a lower-cost offshore situation for ourselves, preferably an acquisition.

We feel like once we’ve done that, we’ll be able to springboard our sales to even greater levels. All the businesses are healthy right now, and they’re all operating in this crazy macro environment. It’s been a couple of years of a crazy macro environment. It would be nice not to have any noise out there for a while and get back to worrying about our day-to-day business. Thanks, Michael, for that color. Obviously, it sounds like you have still some favorable momentum with you. I was just wondering if you could just talk a little bit following up on those comments about the customer sentiment and how that’s trending, especially for your branded products business. Is there more certainty today compared to the beginning of 2025? Do you think that tariffs are still causing some customers to rethink purchasing decisions right now? It very well could be.

I think it’s better, but I do think that there are people who are still worried about where we are politically, where we are economically, where we are in the whole on the world stage that are just, and that impacts their business in some way. They pulled some levers back on purchasing. I think there’s still some out there. It’s not what it was in February and March for sure, but I still think there’s some uncertainty. Look, even I said to an investor earlier today, even we’re being very intentional in our spend and obviously to produce a good result for our shareholders, but more intentional even than normal. I think everybody is being a little bit more intentional. It will eventually open up.

When it does, when we get back to a normalized economy, you’ll see a lot of spending on customers because you still got to spend to keep them and your loyal customers. You’ll see more spending on the employee side too when the labor market heats up and there’s more turnover, which right now we believe turnover is very, very low in businesses. That’s what we’ve seen in all the reports. The Department of Labor, although they didn’t come out this month with a report for obvious reasons, we see the ADP reports and some other reports that guide us that way. Gotcha. I know that AI is all the buzz, you know, as the potential disruptor and so forth. How is the use of AI, especially in your contact center business, serving to differentiate the company versus the competition?

Is it a real selling point when signing up new customers, or is AI more about enhancing your own internal efficiencies? It’s been both for us. I mean, we’re excited about AI. We were early adopters, and we put together an AI team in, I don’t know, five years ago in all of our businesses who actually work with each other, by the way, because some things are applicable from one business to another. We were early adopters. You know, I’m telling the story backwards, how I usually tell it, but we’ve deployed AI to over 35 accounts right now. AI sits on every conversation. What does AI do? AI listens to the conversation, coaches the agent when it hears sentiment that it feels like the agent’s not getting, will tell the agent what they can say to change that sentiment.

It listens to the entire call and scores it as it’s being done, and at the end of the call, gives the agent feedback as to what he could have done, he or she could have done differently. That person wraps it all up for them. At the end of the day, they have a score. The old way of doing that was that you had one person who listened to 5% of the calls for an account and manually scored, had to listen to the call and manually score it. Obviously, you know, from a back-office standpoint, we’ve been able to reduce headcount greatly. Now, being that we’ve successfully put AI into 35 different accounts, by the way, we also have accent smoothing and translation technology, all kinds of stuff. That technology is just getting so good.

What we’re seeing is it’s helping our agents’ interaction with our customer’s customer. They’re getting higher scores, they’re getting better reviews, they’re getting more sales as a result. Our customers are the beneficiary of this so far. You know, in some cases, we charge for it. In some cases, it’s just the cost of doing business. We feel like we’re very competent. We’re competent to the point where one of the two, actually, the AI companies that we’ve worked with, who we use their technology, and we’re the only ones in the BPO world using their technologies, want us to be an installer of their technology for non-BPO businesses because obviously, we wouldn’t help our competition with this. That will be a new line of business for us going forward. We put together a really competent team.

That’s the thing we hear about AI in all the, even the largest companies. They tell us and task us to help them that they’re struggling with it because they have so many different levels of approval that they have to go through. It’s just we’re a lean machine, and we just get stuff done, and we get it done right by really smart people. It sounds like you’re developing very skilled employees. That’s for sure. It’s wonderful. It’s been a great aid for us, and our customers love it. Yeah. Mike, I was wanting to bring you in the conversation. Can you bring us up to date on the balance sheet? Obviously, you have a pretty strong balance sheet there. You’ve accomplished a lot during your time as CFO.

I was just wondering if you can give us your thoughts on the proper leverage ratio and what your top priorities are for deploying cash over the next year.

Michael W. Koempel, President and CFO, Superior Group of Companies: Sure. As we said before, we want to operate the business in a leverage ratio in the range of 2–2.5x EBITDA. Now, recognizing there can be some cyclical earnings to our year or perhaps an investment from time to time that could go below or temporarily above that range, that’s really what I would call the sweet spot where we want to operate the business. We feel like that gives us the flexibility to do things such as share buybacks when we feel that’s opportunistic. It also helps us weather challenging times. I think one of the advantages we had earlier this year, despite the headwinds of tariff, I believe our financial position was a competitive advantage relative to our competition. We feel that’s really important to maintain. It really starts there, Mike, with having a strong net leverage ratio.

Then it really goes back to the capital allocation priorities I just outlined earlier in the presentation. Of course, we want to support the dividend, and we want to invest as needed organically in the business. Also, as Michael mentioned, with our contact center segment, we want to look for strategic acquisitions that could really be step function changes in our branded products and contact center segments that can really help spur growth. I think having a good financial position and keeping our eyes on the balance sheet enables us with those opportunities and to have the right amount of flexibility.

Michael Benstock, Chairman and CEO, Superior Group of Companies: I know that the company has been really good about returning capital to shareholders and stock buybacks and dividends. I was just wondering if you can remind us where you are in your stock repurchase and what you have remaining on your stock repurchase.

Michael W. Koempel, President and CFO, Superior Group of Companies: Sure. We currently have an approval plan from the board of up to $17.5 million. This year, we spent about $7 million in total. That was a combination of completing our prior plan and spending within our existing plan. We have plenty of capacity remaining in our $17.5 million approval. We remain active in the market. We will buy from time to time based on a number of factors that we’re constantly looking at, being mindful of other needs within the business and our desire to maintain an appropriate leverage position for the company.

Michael Benstock, Chairman and CEO, Superior Group of Companies: Yes. At current levels, the dividend yield, the annualized dividend yield, is about 6%. That’s pretty compelling. I know that you’ve been asked this before, but how do you think strategically about the businesses you’re in? I know that I think it’s really important for investors to kind of unpack this company because it might seem complex to a few. If you really unpack this company, there’s just a lot of opportunities here to really grow this business. I was just wondering, as you look at this company, and there’s not a lot of synergies, although the diversification is really a nice benefit, are you open to shedding segments if the price was right? On the flip side, might you ever look to grow the company further via acquisition? In what specific areas would you like to grow?

I think Mike said area growth, we really think has the most opportunities in our branded products business. With 25,000 competitors, it’s for sure more than half of our business today. It’s the portion that has a market cap that really, or a market that really is exciting to us. We think we’re very good in that market as well. We think we’re one of the best players in that market. We can be bigger. From an acquisition standpoint, that’s attractive. On the call center side, what could be attractive to us is getting us into a new line of business or into a new geography, a less expensive geography. It might be South Africa, it might be the Philippines, it could be a number of places. We’re not big on the medical side or the financial services side of doing call center work.

If we were able to find somebody and that was their expertise and they were in the right geography, and of course, there’s a whole bunch of other criteria they would have to meet, we would be excited about it. As far as shedding businesses, we’ve done it in the past. It’s been a while. I think the last time we shed a business was 2008, just in time for a recession. Timing is everything. Timing on shedding a business is everything. It’s when are valuations best? When are people going to be able to borrow correctly to have it make sense to them to buy it? When are we going to get the best bang for our buck?

When will that, you know, when will it be large enough that it will make a huge difference to the rest of our business or to our shareholders with the capital that we’d receive from that? Mike, you want to answer it? Did I miss anything there? No, you got it covered. I want to talk a little bit, the last question, and I think we have time for here. Talk a little bit about margins. The second quarter was actually a lot better in margins than I would have expected, especially, you know, we talked a little bit about tariffs, and I know you’re probably tired of talking about that. I was really surprised at how well you mitigated the tariffs.

Given the success of taking cost out of the business over the past year, I was wondering, how do you think about margin potential in each of your businesses? To say that, you know, just kind of looking at it from the perspective of, do you think that each one of those businesses has the opportunity to improve margins, you know, kind of going forward?

Michael W. Koempel, President and CFO, Superior Group of Companies: The short answer is yes. As you referenced earlier in the year, we did execute some cost reductions. Quite frankly, as any business evolves, things that perhaps were important before aren’t as important. I think that was helpful for us to eliminate cost that isn’t maybe as relevant as it used to be or driving the business. At the same time, I think as we’ve talked before, we’ve made investments in really increasing our selling capability where we think there’s really the opportunity to drive sales. I think between reducing, taking some cost out of the business, also making some investments in the selling capability that we think will enable us to grow the top line, the combination of those really across all three segments, because everything that I just mentioned applies to all three of our segments, gives us the opportunity for margin growth as we move forward.

Michael Benstock, Chairman and CEO, Superior Group of Companies: That’s great. I think that’s all we have time for. I want to thank you for participating in the conference. I really encourage the investors on the call today to take a look at this company. It may seem a little complex, but really, once you unpack the story here, I think each one of their businesses has a very compelling growth opportunity. We just heard that each one of those business segments has improved margin opportunity. I think it has a very compelling total return opportunity, given the very compelling annualized dividend yield. Get to know this company and take a look at our research reports. You can find that on channelcheck.com. Thank you.

Michael W. Koempel, President and CFO, Superior Group of Companies: Thank you.

Michael Benstock, Chairman and CEO, Superior Group of Companies: Take care.

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