What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 213 added, 61 removed, 370 unchanged (43% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except shares and per share data)

Three Months Ended June 30,

Costs and expenses:

Cost of goods sold

Selling and administrative expenses

Other periodic pension costs

Interest expense

Income before income tax expense

Income tax expense

Net income per share:

Weighted average shares outstanding during the period:

Other comprehensive income (loss), net of tax:

Recognition of net losses included in net periodic pension costs

Foreign currency translation adjustment

Other comprehensive income (loss)

Comprehensive income (loss)

Cash dividends per common share

See accompanying Notes to the Condensed Consolidated Financial Statements.

SUPERIOR GROUP OF COMPANIES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except shares and per share data)

Three Months Ended March 31,

Six Months Ended June 30,

Costs and expenses:

23 unchanged sentences

92,628 103,494

Accounts receivable - other

93,031 98,067

54 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED March 31, 2024 AND 2023

THREE MONTHS ENDED June 30, 2024 AND 2023

(In thousands, except shares and per share data)

2 unchanged sentences

Shareholders’

Balance, April 1, 2023

16,498,312 $ 16 $ 73,730 $ 121,572 $ ( 2,663 ) $ 192,655

Common shares issued upon exercise of options and SARs, net

1,000 - 8 - - 8

Share-based compensation expense

- - 1,340 - - 1,340

Cash dividends declared ($ 0.14 per share)

- - - ( 2,295 ) - ( 2,295 )

Comprehensive income:

- - - 1,213 - 1,213

Pensions, net of taxes of $ 14

- - - - 41 41

Change in currency translation adjustment, net of taxes of $ 0

- - - - 277 277

Balance, June 30, 2023

16,499,312 $ 16 $ 75,078 $ 120,490 $ ( 2,345 ) $ 193,239

Balance, April 1, 2024

16,743,723 $ 16 $ 79,602 $ 123,946 $ ( 2,743 ) $ 200,821

Common shares issued upon exercise of options and SARs, net

60,035 - 740 ( 113 ) - 627

Restricted shares issued, net of forfeitures

( 11,181 ) - - - - -

Share-based compensation expense

- 605 - - 605

Written put options

- - 1,812 - - 1,812

Cash dividends declared ($ 0.14 per share)

- - - ( 2,327 ) - ( 2,327 )

Comprehensive income (loss):

- - - 600 - 600

Pensions, net of taxes of $ 8

- - - - 23 23

Change in currency translation adjustment, net of taxes of $ 0

- - - - ( 1,251 ) ( 1,251 )

Balance, June 30, 2024

16,792,577 $ 16 $ 82,759 $ 122,106 $ ( 3,971 ) $ 200,910

See accompanying Notes to the Condensed Consolidated Financial Statements.

SUPERIOR GROUP OF COMPANIES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SIX MONTHS ENDED June 30, 2024 AND 2023

(In thousands, except shares and per share data)

Comprehensive

Income (Loss),

Shareholders’

Balance, January 1, 2023

14 unchanged sentences

- - - - 584 584

Balance, March 31, 2023

Balance, June 30, 2023

16,499,312 $ 16 $ 75,078 $ 120,490 $ ( 2,345 ) $ 193,239

19 unchanged sentences

- - - - ( 1,732 ) ( 1,732 )

Balance, March 31, 2024

Balance, June 30, 2024

16,792,577 $ 16 $ 82,759 $ 122,106 $ ( 3,971 ) $ 200,910

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

Change in fair value of written put options

Changes in assets and liabilities, net of acquisition of businesses:

Changes in assets and liabilities:

Accounts receivable

Accounts receivable - other

Contract assets

10 unchanged sentences

Repayment of debt

Debt issuance costs

Payment of cash dividends

3 unchanged sentences

Effect of currency exchange rates on cash

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents balance, beginning of period

14 unchanged sentences

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 in the United States, Canada, Brazil, with support services in China and India.

The segment currently has sales offices in the United States, Canada, and Brazil, with support services in China and India.

Superior’s Healthcare Apparel segment, primarily through its signature marketing brands Fashion Seal Healthcare®, Wink® and CID Resources, 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.

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The results of operations for any interim period are not necessarily indicative of results to be expected for the full year.

The Company refers to the condensed 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.

The Company refers to the condensed consolidated financial statements collectively as “financial statements,” and individually as “statements of comprehensive income (loss),” “balance sheets,” “statements of shareholders’ equity,” and “statements of cash flows” herein.

Reclassifications

The accompanying financial statements for the previous year contain certain reclassifications.

Reclassifications only impact items within Note 9 and have no effect on previously reported results of operations.

Reclassifications impact the reporting of accounts receivable-other within the condensed consolidated balance sheets and statements of cash flows and items as described within Note 9 .

These reclassifications have no effect on previously reported results of operations.

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, requires the Company to repurchase up to 207,970 shares of its common stock at fair market value (as defined in the agreement), subject to certain limitations.

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 207,970 shares of its common stock at fair market value (as defined in the agreement), subject to certain limitations.

The original fair value of the written put options upon entering into the agreement was $ 3.6 million.

The written put options were liabilities under ASC 480, “ Distinguishing Liabilities from Equity ” because the options embody obligations to repurchase the Company’s shares by paying cash.

As of December 31, 2023, the fair value of the written put options were $ 1.8 million.

The fair value of the written put options was based directly on the Company’s stock price and included in other current liabilities in our balance sheets.

The written put options expire after twenty-four months and contain certain quarterly maximums.

During the three months ended March 31, 2024 , a total of 37,524 written put options expired unexercised resulting in a $ 0.6 million reduction in other current liabilities with an offset to additional paid-in capital.

The written put options are liabilities under ASC 480, “ Distinguishing Liabilities from Equity ” because the options embody obligations to repurchase the Company’s shares by paying cash.

As of March 31, 2024 and December 31, 2023, the fair value of the written put options was $ 1.6 million and $ 1.8 million, respectively.

The fair value of the written put options is based directly on the Company’s stock price and included in other current liabilities in our balance sheets.

We recognized an unrealized loss of $ 0.4 million and an unrealized gain of $ 0.4 million on written put options during the three months ended March 31, 2024 and 2023, respectively.

Unrealized gains and losses from changes in the fair value of the written put options are included within selling and administrative expenses in our statements of comprehensive income.

At March 31, 2024 , the Company’s remaining repurchase obligation under the written put options comprised 95,400 shares of its common stock.

During the six months ended June 30, 2024 , the remaining unexpired options of 132,924 expired resulting in a $ 2.4 million reduction in other current liabilities with an offset to additional paid-in capital.

We recognized unrealized losses of $ 0.3 million on written put options during each of the three months ended June 30, 2024 and 2023.

We recognized an unrealized loss of $ 0.7 million and an unrealized gain of $ 0.1 million on written put options during the six months ended June 30, 2024 and 2023, respectively.

Unrealized gains and losses from changes in the fair value of the written put options were included within selling and administrative expenses in our statements of comprehensive income.

Recent Accounting Pronouncements

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Early adoption is permitted.

The adoption of this guidance will not affect the Company’s consolidated results of operations, financial position or cash flows and the Company is currently evaluating the effect the guidance will have on its disclosures.

We will adopt the disclosure requirements of ASU 2023 - 07 in our December 31, 2024 annual financial statements.

The adoption of the ASU will only impact our disclosures, which will be made on a retrospective basis, with no impacts on our results of operations, cash flows or financial condition.

The Company’s adoption of this standard is not expected to have a material impact on its financial statements.

In December 2023, the FASB issued ASU 2023 - 09, "Income Taxes (Topic 740 ) — Improvements to Income Tax Disclosures" .

8 unchanged sentences

Finished goods

$ 68,890 $ 72,370

Work in process

Raw materials

22,818 25,026

$ 93,031 $ 98,067

NOTE 3 – Long-Term Debt:

2 unchanged sentences

Revolving credit facility due August 2027

$ 11,000 $ 25,000

Term loan due August 2027

67,500 69,375

78,500 94,375

Payments due within one year included in current liabilities

1 unchanged sentence

Long-term debt less current maturities

$ 72,100 $ 88,789

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 $ 125.0 million and a term loan in the original aggregate principal amount of $ 75.0 million (collectively, the “Credit Facilities”), 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.

Obligations outstanding under the Credit Facilities accrue interest at a variable rate equal to the secured overnight financing rate ("SOFR") plus an adjustment between 0.10 % and 0.25 % (depending on the applicable interest period) plus a margin between 1.0 % and 2.0 % (depending on the Company’s net leverage ratio).

The weighted average interest rate on our outstanding borrowings under the Credit Facilities was 6.6 % as of March 31, 2024 .

The weighted average interest rate on our outstanding borrowings under the Credit Facilities was 6.4 % as of June 30, 2024 .

During the term of the revolving credit facility, the Company will pay a commitment fee on the unused portion of the revolving credit facility equal to between 0.125 % and 0.250 % (depending on the Company’s net leverage ratio).

The available balance under the revolving credit facility is reduced by outstanding letters of credit.

As of March 31, 2024 , there were no outstanding letters of credit under the revolving credit facility.

As of June 30, 2024 , there were no outstanding letters of credit under the revolving credit facility.

Contractual principal payments for the term loan are as follows:

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The Company’s net leverage ratio (as defined in the Credit Agreement) is generally calculated as the ratio of (a) indebtedness minus unrestricted cash to (b) consolidated EBITDA for the four most recently ended fiscal quarters.

As of March 31, 2024 , the Company was in compliance with these ratios.

As of June 30, 2024 , the Company was in compliance with these ratios.

NOTE 4 – Net Sales:

18 unchanged sentences

Accounts receivable

$ 92,628 $ 103,494

Current contract assets

53,027 48,715

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.

A portion of the amounts included in contract assets on December 31, 2023 were transferred to accounts receivable during the three months ended March 31, 2024 .

The majority of the amounts included in contract assets on December 31, 2023 were transferred to accounts receivable during the six months ended June 30, 2024 .

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.

During the three months ended March 31, 2024 , $ 2.0 million of revenue was recognized from the contract liabilities balance as of December 31, 2023 .

During the six months ended June 30, 2024 , $ 4.0 million of revenue was recognized from the contract liabilities balance as of December 31, 2023 .

NOTE 5 – Contingencies:

4 unchanged sentences

(“Guardian”) in May 2022 included contingent consideration based on varying levels of Guardian’s EBITDA in each measurement period through April 2025.

The estimated fair value of Guardian acquisition-related contingent consideration payable as of March 31, 2024 was $ 1.6 million, of which $ 0.9 million is expected to be paid in the third quarter of 2024.

The estimated fair value of Guardian acquisition-related contingent consideration payable as of June 30, 2024 was $ 1.7 million, of which $ 1.0 million is expected to be paid in the third quarter of 2024.

The total estimated undiscounted remaining payment related to this contingent consideration payable is between $ 1.9 million and $ 2.0 million.

6 unchanged sentences

The following table details the share-based compensation expense by type of award for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options and SARs

$ 227 $ 390 $ 495 $ 699

Restricted stock

314 767 968 1,357

Performance shares

64 183 157 364

Total share-based compensation expense

$ 605 $ 1,340 $ 1,620 $ 2,420

Stock Options and Stock Appreciation Rights (“SARs”)

6 unchanged sentences

Stock options, as well as SARs granted in tandem with stock options, are subject to accelerated vesting under certain circumstances as outlined in the 2013 Incentive Stock and Awards Plan (the “2013 Plan”) or 2022 Equity Incentive and Awards Plan (the “2022 Plan”), as applicable.

A summary of stock option transactions during the three months ended March 31, 2024 follows:

Weighted Average

A summary of stock option transactions during the six months ended June 30, 2024 follows:

Weighted Average Aggregate

Weighted Average

4 unchanged sentences

Outstanding, January 1, 2024

953,176 $ 14.73 2.80 $ 1,718

183,800 14.38

( 119,303 ) 10.66

Lapsed or cancelled

Outstanding, March 31, 2024

Exercisable, March 31, 2024

( 174,478 ) 16.26

Outstanding, June 30, 2024

843,195 14.91 3.42 4,169

Exercisable, June 30, 2024

341,940 18.57 2.27 896

The weighted average grant date fair value of stock options granted was $ 4.27 per share.

As of March 31, 2024 , the Company had $ 1.2 million in unrecognized compensation cost related to nonvested stock options to be recognized over the remaining weighted average vesting period of 1.4 years.

A summary of stock-settled SARs transactions during the three months ended March 31, 2024 follows:

Weighted Average

As of June 30, 2024 , the Company had $ 1.1 million in unrecognized compensation cost related to nonvested stock options to be recognized over the remaining weighted average vesting period of 1.2 years.

A summary of stock-settled SARs transactions during the six months ended June 30, 2024 follows:

Weighted Average Aggregate

Weighted Average

4 unchanged sentences

Outstanding, January 1, 2024

292,508 $ 14.35 2.07 $ 506

( 17,920 ) 8.48

Lapsed or cancelled

Outstanding, March 31, 2024

Exercisable, March 31, 2024

( 70,020 ) 18.95

Outstanding, June 30, 2024

283,696 13.44 2.49 1,649

Exercisable, June 30, 2024

149,492 13.96 0.97 837

The weighted average grant date fair value of SARs granted was $ 3.80 per share.

As of March 31, 2024 , the Company had $ 0.4 million in unrecognized compensation cost related to nonvested SARs to be recognized over the remaining weighted average vesting period of 1.5 years.

As of June 30, 2024 , the Company had $ 0.3 million in unrecognized compensation cost related to nonvested SARs to be recognized over the remaining weighted average vesting period of 1.3 years.

Restricted Stock

2 unchanged sentences

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 three months ended March 31, 2024 follows:

A summary of restricted stock transactions during the six months ended June 30, 2024 follows:

Weighted Average

Outstanding, January 1, 2024

Outstanding, March 31, 2024

As of March 31, 2024 , the Company had $ 4.8 million of unrecognized compensation cost related to nonvested restricted stock grants expected to be recognized over the remaining weighted average vesting period of 1.8 years.

428,366 $ 18.14

138,652 14.84

( 47,608 ) 23.75

( 34,029 ) 19.75

Outstanding, June 30, 2024

485,381 16.53

As of June 30, 2024 , the Company had $ 4.2 million of unrecognized compensation cost related to nonvested restricted stock grants expected to be recognized over the remaining weighted average vesting period of 1.8 years.

Performance Shares

6 unchanged sentences

The awards are subject to accelerated vesting on a pro rata basis under certain circumstances as outlined in the 2013 Plan or 2022 Plan, as applicable, except in those circumstances in which award agreements or change in control agreements specify full vesting.

A summary of performance share transactions during the three months ended March 31, 2024 follows:

On May 1, 2024, the Compensation Committee approved the Company entering into a grant of 125,000 and 75,000 performance shares to Michael Benstock, Chief Executive Officer and Michael Koempel, Chief Financial Officer, respectively, under the 2022 Equity Incentive and Awards Plan.

The performance shares agreements were executed on May 6, 2024.

Each performance share represents a contingent right to receive one share of common stock.

The performance shares will vest if, in each case and during a four -year performance period beginning on January 1, 2024, subject to additional requirements, the average closing price of the Company’s common stock over a rolling thirty ( 30 ) day period equals or exceeds 115 %, 130 %, and 150 % of the closing share price on May 10, 2024 and the executive is still employed by the Company twelve ( 12 ) months after the applicable stock price condition has been satisfied.

The fair value and derived service periods of the shares were determined based on a Monte Carlo valuation model, which includes estimates of the Company’s stock price volatility.

Expense for these grants is being recognized on a straight-line basis over each tranche’s derived service period.

A summary of performance share transactions during the six months ended June 30, 2024 follows:

Weighted Average

Outstanding, January 1, 2024

Outstanding, March 31, 2024

As of March 31, 2024 , the Company had $ 1.0 million of unrecognized compensation cost related to nonvested performance share grants expected to be recognized over the remaining weighted average service period of 2.4 years.

283,521 $ 18.13

200,000 14.73

( 14,068 ) 17.77

( 92,439 ) 19.97

Outstanding, June 30, 2024

377,014 15.89

As of June 30, 2024 , the Company had $ 3.1 million of unrecognized compensation cost related to nonvested performance share grants expected to be recognized over the remaining weighted average service period of 1.8 years.

NOTE 7 – Income Taxes:

4 unchanged sentences

The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax environment changes.

For the three months ended March 31, 2024 , the Company recorded a provision for income taxes of $ 0.7 million, which represents an effective tax rate of 14.8 %.

The income tax provision and the effective tax rate for the three months ended March 31, 2024 was 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 as well as the windfall benefits associated with the stock option exercises in the quarter.

For the three months ended March 31, 2023 , the Company recorded a provision for income taxes of $ 0.1 million, which represents an effective tax rate of 6.0 %.

The income tax provision and the effective tax rate for the three months ended March 31, 2023 was 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 as well as the favorable impact of discrete non-taxable gains on the Company’s written put option and income generated on the Company’s SERP life insurance contracts totaling $ 0.4 million and $ 0.2 million respectively.

For the three months ended June 30, 2024 , the Company recorded a provision for income taxes of $ 0.1 million, which represents an effective tax rate of 7.7 %.

For the six months ended June 30, 2024 , the Company recorded a provision for income taxes of $ 0.7 million, which represents an effective tax rate of 13.9 %.

The income tax provision and the effective tax rate for the three and six months ended June 30, 2024 was 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 tax rate was further favorably impacted by the windfall benefits associated with stock option exercises during the six months ended June 30, 2024, totaling $ 0.5 million.

For the three months ended June 30, 2023 , the Company recorded a provision for income taxes of $ 0.2 million, which represents an effective tax rate of 11.8 %.

For the six months ended June 30, 2023 , the Company recorded a provision for income taxes of $ 0.2 million, which represents an effective tax rate of 9.5 %.

The income tax provision and the effective tax rate for the three and six months ended June 30, 2023 was 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.

NOTE 8 – Net Income Per Share:

2 unchanged sentences

The following table presents a reconciliation of basic and diluted net income per share for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net income used in the computation of basic and diluted net income per share (in thousands)

$ 600 $ 1,213 $ 4,512 $ 2,101

Weighted average shares outstanding - basic

16,221,073 15,987,007 16,124,553 15,935,001

Dilutive common stock equivalents

548,224 137,809 486,822 186,572

Weighted average shares outstanding - diluted

16,769,297 16,124,816 16,611,375 16,121,573

Net income per share:

Awards to purchase 400,075 and 1,008,972 shares of common stock with weighted average exercise prices of $ 20.86 and $ 17.03 per share were outstanding during the three months ended March 31, 2024 and 2023 , respectively, but were not included in the computation of diluted net income per share because the awards’ exercise prices were greater than the average market price of the common shares.

$ 0.04 $ 0.08 $ 0.28 $ 0.13

$ 0.04 $ 0.08 $ 0.27 $ 0.13

Awards to purchase 295,361 and 1,268,882 shares of common stock with weighted average exercise prices of $ 21.90 and $ 15.19 per share were outstanding during the three months ended June 30, 2024 and 2023 , respectively, but were not included in the computation of diluted net income per share because the awards’ exercise prices were greater than the average market price of the common shares.

Awards to purchase 347,718 and 1,138,927 shares of common stock with weighted average exercise prices of $ 21.38 and $ 16.11 per share were outstanding during the six months ended June 30, 2024 and 2023 , respectively, but were not included in the computation of diluted net income per share because the awards’ exercise prices were greater than the average market price of the common shares.

N OTE 9 – Operating Segment Information :

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Branded products 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 in the United States, Canada, Brazil, with support services in China and India.

The segment currently has sales offices in the United States, Canada, and Brazil, with support services in China and India.

Healthcare Apparel segment:

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Intersegment Eliminations

As of and For the Three Months Ended March 31, 2024:

For the Three Months Ended June 30, 2024:

$ 81,296 $ 26,592 $ 24,832 $ ( 984 ) $ - $ 131,736

Segment EBITDA

6,724 1,277 3,181 - ( 5,623 ) $ 5,559

Supplemental information:

Depreciation and amortization

$ 1,567 $ 956 $ 753 $ - $ 92 $ 3,368

Capital expenditures

$ 322 $ 554 $ 413 $ - $ 10 $ 1,299

Branded Products

2 unchanged sentences

Intersegment Eliminations

As of and For the Three Months Ended March 31, 2023:

For the Three Months Ended June 30, 2023:

$ 79,592 $ 28,072 $ 22,758 $ ( 1,260 ) $ - $ 129,162

Segment EBITDA

6,988 1,929 3,252 - ( 4,741 ) 7,428

Supplemental information:

Depreciation and amortization

$ 1,710 $ 976 $ 662 $ - $ 80 $ 3,428

Capital expenditures

$ 736 $ 64 $ 683 $ - $ 46 $ 1,529

Branded Products

Healthcare Apparel

Contact Centers

Intersegment Eliminations

For the Six Months Ended June 30, 2024:

$ 168,364 $ 55,829 $ 48,384 $ ( 1,999 ) $ - $ 270,578

Segment EBITDA

16,671 3,912 6,127 - ( 11,520 ) $ 15,190

Supplemental information:

Depreciation and amortization

$ 3,067 $ 1,893 $ 1,476 $ - $ 184 $ 6,620

Capital expenditures

$ 587 $ 727 $ 573 $ - $ 87 $ 1,974

Branded Products

Healthcare Apparel

Contact Centers

Intersegment Eliminations

For the Six Months Ended June 30, 2023:

$ 161,443 $ 56,226 $ 44,814 $ ( 2,548 ) $ - $ 259,935

Segment EBITDA

14,498 3,501 6,045 - ( 9,713 ) 14,331

Supplemental information:

Depreciation and amortization

$ 3,374 $ 1,950 $ 1,330 $ - $ 162 $ 6,816

Capital expenditures

$ 2,007 $ 526 $ 1,064 $ - $ 46 $ 3,643

The following table reconciles income before income tax expense to Segment EBITDA (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Income before income tax expense

$ 650 $ 1,376 $ 5,242 $ 2,321

Interest expense

1,541 2,624 3,328 5,194

Depreciation and amortization

3,368 3,428 6,620 6,816

Segment EBITDA

NOTE 10 – Subsequent Events :

On May 1, 2024, the Compensation Committee approved the Company entering into a grant of 125,000 and 75,000 performance shares to Michael Benstock and Michael Koempel, respectively, under the 2022 Equity Incentive and Awards Plan.

The performance shares agreements were executed on May 6, 2024.

Each performance share represents a contingent right to receive one share of common stock.

The performance shares will vest if, in each case and during a four -year performance period beginning on January 1, 2024, subject to additional requirements, the average closing price of the Company’s common stock over a rolling thirty ( 30 ) day period equals or exceeds the closing share price on May 10, 2024 by 115 %, 130 %, and 150 % and the executive is still employed by the Company twelve ( 12 ) months after the applicable stock price condition has been satisfied.

Koempel’s agreement provides protection for termination without Cause and for resignation for Good Reason during the period after the per share price has been satisfied.

The fair value of the shares, yet to be determined, will be amortized across the performance period based on a Monte Carlo valuation model.

$ 5,559 $ 7,428 $ 15,190 $ 14,331

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements