What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-05 · 121 added, 92 removed, 142 unchanged (60% of the section changed)

11 unchanged sentences

Our products are sold to customers in a wide range of industries, including retail chain, 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.

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 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.

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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 signature marketing brands, including Fashion Seal Healthcare® and Wink®, will continue to provide opportunities for growth and increased market share.

From a long-term perspective, we expect that demand for our portfolio of brands Wink®, Fashion Seal Healthcare®, its trade name CID Resources and our license of Carhartt Medical, will continue to provide opportunities for growth and increased market share.

Contact Centers

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The nearshore call-center market has grown as businesses look to reduce operating costs while maintaining high-quality customer support.

Nearshore operators are able to provide comparable service to their U.S.

Nearshore operators can provide comparable service to their U.S.

counterparts at a fraction of the price.

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During 2025, higher tariffs and/or new tariffs impacting certain sources of the Company’s materials and production were imposed by the U.S.

Additionally, the U.S.

has 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"), all of which are set to expire on September 30, 2025, if not renewed or extended.

We are monitoring these imposed tariffs, related ongoing negotiations and the status of the trade agreements and preferences involving the U.S.

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"), all expired on September 30, 2025.

If not renewed and/or retroactively extended, 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 are monitoring these imposed tariffs and duties, related ongoing negotiations and the status of the trade agreements and preferences involving the U.S.

government and the countries in which we source and/or manufacture products.

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World events, including the Russia-Ukraine War and the ongoing conflict in the Middle East continue to have negative effects on the global economy.

Civil unrest in countries where we manufacture products, such as Haiti, may result in our facilities incurring damage or destruction that interrupts our manufacturing processes and adversely affects our reputation and our relationships with our customers.

Prolonged or recurring disruptions or instability in the United States and global economies, 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, costs associated with complying with new or amended laws and regulations and mitigating the increased cost of the new tariffs 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.

Civil unrest in countries where we manufacture products, such as 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, 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.

Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

For the Three Months Ended June 30,

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

For the Three Months Ended September 30,

Branded Products

19 unchanged sentences

(1) Please refer to "Non-GAAP Financial Measure" below for a reconciliation of EBITDA to net (loss) income.

The Company generated net income of $1.6 million and $0.6 million during the three months ended June 30, 2025 and 2024, respectively.

The increase in net income during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily due to an increase in net sales and gross margins at our Branded Products segment.

EBITDA was $6.1 million and $5.6 million during the three months ended June 30, 2025 and 2024, respectively.

The EBITDA increase was primarily due to the increase in net sales and gross margins at our Branded Products segment during the three months ended June 30, 2025.

The Company generated net income of $2.7 million and $5.4 million during the three months ended September 30, 2025 and 2024, respectively.

The decrease in net income during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily due to a decrease in net sales and gross margins across all of our reportable segments, partially offset by a decrease in selling and administrative expenses.

EBITDA was $7.5 million and $11.7 million during the three months ended September 30, 2025 and 2024, respectively.

The EBITDA decrease was primarily due to the decrease in net sales and gross margins across all of our reportable segments, partially offset by a decrease in selling and administrative expenses.

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 for the Company increased 9.3%, or $12.3 million, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase was attributable to increases in net sales in our Branded Products and Healthcare Apparel reportable segments.

Branded Products net sales increased 14.0%, or $11.4 million, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase was attributable to $8.0 million in timing of orders delivered, $3.8 million of organic expansion with existing large enterprise accounts including higher tariffs and $3.1 million increase resulting from revenue generated by 3 Point following the acquisition in December 2024.

Healthcare Apparel net sales increased 6.2%, or $1.7 million, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase was primarily due to volume increases within existing customer accounts.

Contact Centers net sales decreased 3.4% or $0.9 million, before intersegment eliminations for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The 3.4% decline versus the year-ago quarter reflects continued macroeconomic headwinds, which continue to contribute to client downsizing and client attrition outpacing new customer acquisitions.

Gross margin rate for the Company was 38.4% for the three months ended June 30, 2025 and 38.5% for the three months ended June 30, 2024.

Gross margin rate for our Branded Products segment was 35.6% for the three months ended June 30, 2025 and 34.6% for the three months ended June 30, 2024.

The increase in the gross margin rate was attributable to customer sales mix for the three months ended June 30, 2025.

Gross margin rate for our Healthcare Apparel segment was 35.5% for the three months ended June 30, 2025 and 38.4% for the three months ended June 30, 2024.

The gross margin rate decreased as compared to the prior year period due to higher cost of goods including the recently enacted higher tariff costs in advance of price increases to our customers.

Gross margin rate for our Contact Centers segment was 52.6% for the three months ended June 30, 2025, up slightly from 52.2% for the three months ended June 30, 2024.

Net sales for the Company decreased 7.5%, or $11.2 million, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The decrease was attributable to decreases in net sales across all of our reportable segments.

Branded Products net sales decreased 8.1%, or $7.5 million, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The decrease was primarily due to $8.0 million in timing of orders delivered in the prior quarter and lower sales volume and pricing from existing customers.

These were partially offset by a $2.9 million increase resulting from revenue generated by 3Point following the acquisition in December 2024.

Healthcare Apparel net sales decreased 4.6%, or $1.5 million, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The decrease was primarily due to volume decreases within existing customer accounts.

Contact Centers net sales decreased 9.5% or $2.4 million, before intersegment eliminations for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The 9.5% decrease versus the year-ago quarter reflects continued macroeconomic headwinds, which continue to contribute to client downsizing and client attrition outpacing new customer acquisitions.

Gross margin rate for the Company was 38.3% for the three months ended September 30, 2025 and 40.4% for the three months ended September 30, 2024.

Gross margin rate for our Branded Products segment was 34.8% for the three months ended September 30, 2025 and 36.2% for the three months ended September 30, 2024.

The decrease in the gross margin rate was attributable to customer sales mix for the three months ended September 30, 2025.

Gross margin rate for our Healthcare Apparel segment was 38.5% for the three months ended September 30, 2025 and 41.8% for the three months ended September 30, 2024.

The gross margin rate decreased as compared to the prior year period due to product cost reductions in the prior year.

Gross margin rate for our Contact Centers segment was 52.9% for the three months ended September 30, 2025 and 54.9% for the three months ended September 30, 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 36.3% for the three months ended June 30, 2025 and 36.9% for the three months ended June 30, 2024.

As a percentage of net sales, selling and administrative expenses for our Branded Products segment was 27.5% for the three months ended June 30, 2025 and 28.3% for the three months ended June 30, 2024.

The rate decrease was primarily related to net sales increases for the three months ended June 30, 2025.

The increase in selling and administrative expenses of $2.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was due to $1.6 million higher employee related costs driven by increased sales and gross margin, an adjustment to credit loss reserves of $0.5 million and increased costs resulting from the acquisition of 3Point in December 2024.

As a percentage of net sales, selling and administrative expenses for our Healthcare Apparel segment was 35.7% for the three months ended June 30, 2025 and 37.2% for the three months ended June 30, 2024.

The rate decrease was primarily related to higher sales in the period ended June 30, 2025.

As a percentage of net sales, selling and administrative expenses for our Contact Centers segment was 48.4% for the three months ended June 30, 2025 and 42.4% for the three months ended June 30, 2024.

The rate increase as compared to the prior year period was primarily driven by an increase in credit loss expense.

Selling and administrative expenses for Other, which represents Corporate costs, decreased primarily due to lower supplemental executive retirement plan expenses.

As a percentage of net sales, total selling and administrative expenses was 35.0% for the three months ended September 30, 2025 and for the three months ended September 30, 2024.

As a percentage of net sales, selling and administrative expenses for our Branded Products segment was 27.6% for the three months ended September 30, 2025 and 26.2% for the three months ended September 30, 2024.

The rate increase was primarily related to expense deleverage from the net sales decrease for the three months ended September 30, 2025.

The decrease in selling and administrative expenses of $0.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was due to lower employee related costs driven by headcount reductions.

As a percentage of net sales, selling and administrative expenses for our Healthcare Apparel segment was 31.0% for the three months ended September 30, 2025 and 34.0% for the three months ended September 30, 2024.

The rate decrease was primarily due to lower employee related costs.

As a percentage of net sales, selling and administrative expenses for our Contact Centers segment was 45.4% for the three months ended September 30, 2025 which improved slightly from 45.9% for the three months ended September 30, 2024.

The rate decreased as compared to the prior year period driven by a prior year increase in credit loss reserve and lower employee related costs in the current period.

Selling and administrative expenses for Other, which represents Corporate costs, decreased primarily due to lower employee related costs.

Interest Expense, Net

Interest expense, net decreased to $1.3 million for the three months ended June 30, 2025 from $1.5 million for three months ended June 30, 2024.

This decrease was due to a lower weighted average interest rate on those borrowings from 6.5% for the three months ended June 30, 2024 to 5.6% for the three months ended June 30, 2025.

Income tax expense increased to $0.3 million for the three months ended June 30, 2025 from $0.1 million for the three months ended June 30, 2024.

The effective tax rate was 15.5% and 7.7% for the three months ended June 30, 2025 and 2024, respectively.

Income tax expense and the effective tax rate for the three months ended June 30, 2025 and June 30, 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.

Interest expense, net decreased to $1.4 million for the three months ended September 30, 2025 from $1.6 million for three months ended September 30, 2024.

This decrease was due to a lower weighted average interest rate on those borrowings from 6.3% for the three months ended September 30, 2024 to 5.4% for the three months ended September 30, 2025.

Income tax expense decreased to $0.4 million for the three months ended September 30, 2025 from $1.2 million for the three months ended September 30, 2024.

The effective tax rate was 13.9% and 17.8% for the three months ended September 30, 2025 and 2024, respectively.

Income tax expense and the effective tax rate for the three months ended September 30, 2025 and September 30, 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 tax rates were further favorably impacted by the performance of the Company’s compensation plans during the three months ended September 30, 2025 and 2024.

The effective tax rate may vary from quarter to quarter 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.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

For the Six Months Ended June 30,

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

For the Nine Months Ended September 30,

Branded Products

19 unchanged sentences

(1) Please refer to "Non-GAAP Financial Measure" below for a reconciliation of EBITDA to net (loss) income.

The Company generated net income of $0.8 million and $4.5 million during the six months ended June 30, 2025 and 2024, respectively.

The decrease in net income during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily due to higher selling and administrative expenses at our Branded Products and Contact Centers segments and lower margins in our Healthcare Apparel segment, partially offset by an increase in gross margin at our Branded Products segment and a decrease in interest expense.

EBITDA was $9.6 million and $15.2 million during the six months ended June 30, 2025 and 2024, respectively.

The EBITDA decrease was primarily due to higher selling and administrative expenses at our Branded Products and Contact Centers segments and lower margins at our Healthcare Apparel segment, partially offset by an increase in gross margin at our Branded Products segment.

The Company generated net income of $3.5 million and $9.9 million during the nine months ended September 30, 2025 and 2024, respectively.

The decrease in net income during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to lower gross margins at all three of our reportable segments, partially offset by a decrease in interest expense.

EBITDA was $17.1 million and $26.8 million during the nine months ended September 30, 2025 and 2024, respectively.

The EBITDA decrease was primarily due to lower gross margins at 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 for the Company increased 3.9% or $10.6 million, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase was attributable to an increase in net sales in our Branded Products reportable segment.

Branded Products net sales increased 6.4%, or $10.8 million, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase was attributable to $8.0 million in timing of orders delivered, $7.8 million of organic expansion with existing large enterprise accounts including higher tariffs and $6.2 million increase resulting from revenue generated by 3 Point following the acquisition in December 2024.

These were partially offset by volume decreases in branded uniform apparel from existing customers.

Healthcare Apparel net sales decreased 0.6% or $0.3 million, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease was primarily due to volume decreases in institutional apparel within existing customer accounts.

Contact Centers net sales decreased 0.4% or $0.2 million, before intersegment eliminations for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The 0.4% decline versus the year-ago period reflects continued macroeconomic headwinds, which continue to contribute to client downsizing and client attrition outpacing new customer acquisitions.

Gross margin rate for the Company was 37.6% for the six months ended June 30, 2025 and 39.2% for the six months ended June 30, 2024.

The gross margin rate decrease was primarily driven by our Healthcare Apparel and Branded Products reportable segments.

Gross margin rate for our Branded Products segment was 33.9% for the six months ended June 30, 2025 and 35.6% for the six months ended June 30, 2024.

Net sales for the Company decreased 0.2% or $0.7 million, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The decrease was attributable to decreases in net sales in our Healthcare Apparel and Contact Centers reportable segments.

Branded Products net sales increased 1.3%, or $3.3 million, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase was due to a $9.1 million increase resulting from revenue generated by 3 Point following the acquisition in December 2024, offset by a decrease within existing large enterprise accounts.

Healthcare Apparel net sales decreased 2.0% or $1.8 million, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The decrease was primarily due to volume decreases within existing customer accounts.

Contact Centers net sales decreased 3.5% or $2.6 million, before intersegment eliminations for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The 3.5% decrease versus the year-ago period reflects continued macroeconomic headwinds, which continue to contribute to client downsizing and client attrition outpacing new customer acquisitions.

Gross margin rate for the Company was 37.9% for the nine months ended September 30, 2025 and 39.6% for the nine months ended September 30, 2024.

The gross margin rate decrease was driven by gross margin rate decreases in all three of our reportable segments.

Gross margin rate for our Branded Products segment was 34.2% for the nine months ended September 30, 2025 and 35.8% for the nine months ended September 30, 2024.

The gross margin rate decreased as compared to the prior year period due to sourcing mix resulting in higher product costs and lower pricing to existing customers.

Gross margin rate for our Healthcare Apparel segment was 36.3% for the six months ended June 30, 2025 and 38.9% for the six months ended June 30, 2024.

The gross margin rate decreased as compared to the prior year period primarily driven by higher cost of goods including the recently enacted higher tariff costs in advance of price increases to our customers.

Gross margin rate for our Contact Centers segment was 53.1% for the six months ended June 30, 2025, up slightly from 52.9% for the six months ended June 30, 2024.

Gross margin rate for our Healthcare Apparel segment was 37.1% for the nine months ended September 30, 2025 and 40.0% for the nine months ended September 30, 2024.

The gross margin rate decreased as compared to the prior year period due to product cost reductions in the prior year and during the current year $0.6 million higher tariff costs in advance of price increases to our customers.

Gross margin rate for our Contact Centers segment was 53.0% for the nine months ended September 30, 2025, down slightly from 53.6% for the nine months ended September 30, 2024.

Selling and Administrative Expenses

As a percentage of net sales, total selling and administrative expenses was 36.4% for the six months ended June 30, 2025 and 36.0% for the six months ended June 30, 2024.

As a percentage of net sales, selling and administrative expenses for our Branded Products segment was relatively flat at 27.3% for the six months ended June 30, 2025 and 27.5% for the six months ended June 30, 2024.

The increase in selling and administrative expenses of $2.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was due to $1.9 million higher employee related costs, driven by increased sales and gross margin, an adjustment to credit loss reserves of $0.5 million and increased costs from 3Point acquired in December 2024.

As a percentage of net sales, selling and administrative expenses for our Healthcare Apparel segment was 35.3% for the six months ended June 30, 2025 and 35.3% for the six months ended June 30, 2024.

As a percentage of net sales, selling and administrative expenses for our Contact Centers segment was 46.7% for the six months ended June 30, 2025 and 43.3% for the six months ended June 30, 2024.

As a percentage of net sales, total selling and administrative expenses was 36.0% for the nine months ended September 30, 2025 and 35.7% for the nine months ended September 30, 2024.

As a percentage of net sales, selling and administrative expenses for our Branded Products segment was 27.4% for the nine months ended September 30, 2025 and 27.0% for the nine months ended September 30, 2024.

The increase in selling and administrative expenses of $1.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was driven by increased sales resulting in higher sales commission expense, an adjustment to credit loss reserves of $0.5 million and increased costs from 3Point acquired in December 2024, offset by lower employee related costs driven by headcount reductions.

As a percentage of net sales, selling and administrative expenses for our Healthcare Apparel segment was 33.8% for the nine months ended September 30, 2025 and 34.8% for the nine months ended September 30, 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 46.3% for the nine months ended September 30, 2025 and 44.2% for the nine months ended September 30, 2024.

The rate increase as compared to the prior year period was primarily driven by an increase in credit loss expense.

Selling and administrative expenses for Other, which represents Corporate costs, increased by $0.3 million, primarily driven by third party professional fees and stock-based compensation expense during the six months ended June 30, 2025.

Selling and administrative expenses for Other, which represents Corporate costs, are consistent with the prior year period.

Interest Expense, Net

Interest expense, net decreased to $2.5 million for the six months ended June 30, 2025 from $3.3 million for six months ended June 30, 2024.

This decrease was due to a lower weighted average interest rate on those borrowings from 6.6% for the six months ended June 30, 2024 to 5.6% for the six months ended June 30, 2025.

Income tax expense decreased to $0.1 million for the six months ended June 30, 2025 from $0.7 million for the six months ended June 30, 2024.

The effective tax rate was 14.7% and 13.9% for the six months ended June 30, 2025 and 2024, respectively.

Income tax expense and the effective tax rate for the six months ended June 30, 2025 and June 30, 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 tax rates were further favorably impacted by the performance of the Company’s compensation plans during the six months ended June 30, 2025 and June 30, 2024.

Interest expense, net decreased to $3.9 million for the nine months ended September 30, 2025 from $4.9 million for nine months ended September 30, 2024.

This decrease was due to a lower weighted average interest rate on those borrowings from 6.5% for the nine months ended September 30, 2024 to 5.4% for the nine months ended September 30, 2025.

Income tax expense decreased to $0.6 million for the nine months ended September 30, 2025 from $1.9 million for the nine months ended September 30, 2024.

The effective tax rate was 14.1% and 16.1% for the nine months ended September 30, 2025 and 2024, respectively.

Income tax expense and the effective tax rate for the nine months ended September 30, 2025 and September 30, 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 tax rates were further favorably impacted by the performance of the Company’s compensation plans during the nine months ended September 30, 2025 and 2024 totaling $1.0 million and $0.5 million respectively.

14 unchanged sentences

Capital expenditures

Capital expenditures were $2.7 million and $2.0 million for the six months ended June 30, 2025 and 2024, respectively.

Capital expenditures were $3.4 million and $2.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Sources of Capital and Liquidity

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 contact centers, offset by cash payments made for raw materials, finished goods, salaries and payroll related benefits, leases and other general corporate expenditures.

For the six months ended June 30, 2025, net cash provided by operating activities was $2.9 million.

Cash collections from customers exceeded aggregate cash payments to vendors, lessors, employees and lenders.

These cash payments included $10.7 million of cash outflows for inventory purchases, up from the prior year primarily due to the timing of purchases.

For the six months ended June 30, 2024, net cash provided by operating activities was $16.3 million.

Net cash provided by operating activities primarily results from cash collected from our segments' customers, offset by cash payments made for raw materials, finished goods, salaries and payroll-related benefits, leases and other general corporate expenditures.

For the nine months ended September 30, 2025, net cash provided by operating activities was $1.3 million.

Cash collections from customers exceeded aggregate cash payments to vendors, lessors and employees.

These cash collections were offset by cash payments including $10.5 million of cash outflows for inventory purchases.

The inventory balance is up from the prior year primarily due to the sales decrease in Healthcare Apparel, as well as, the timing of purchases.

For the nine months ended September 30, 2024, net cash provided by operating activities was $24.5 million.

Cash collections from customers exceeded aggregate cash payments to vendors, lessors, employees and lenders primarily driven by the Company’s collection of receivable balances and increases in cash inflows for inventory.

2 unchanged sentences

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 six months ended June 30, 2025, the Company had $57.0 million in borrowings and $41.0 million in payments on the revolving credit facility.

For the six months ended June 30, 2025, the Company had $2.8 million in payments on the term loan.

For the six months ended June 30, 2024, the Company had $10.0 million in borrowings and $24.0 million in payments on the revolving credit facility.

For the six months ended June 30, 2024, the Company had $1.9 million in payments on the term loan.

For the nine months ended September 30, 2025, the Company had $76.0 million in borrowings and $58.0 million in payments on the revolving credit facility.

For the nine months ended September 30, 2025, the Company had $4.2 million in payments on the term loan.

For the nine months ended September 30, 2024, the Company had $31.0 million in borrowings and $37.0 million in payments on the revolving credit facility.

For the nine months ended September 30, 2024, the Company had $3.3 million in payments on the term loan.

In the future, the Company may continue to use credit facilities and other secured and unsecured borrowings as a source of liquidity.

2 unchanged sentences

Dividends and Share Repurchase Program

During the six months ended June 30, 2025 and 2024, the Company paid cash dividends of $4.5 million and $4.7 million, respectively.

During the nine months ended September 30, 2025 and 2024, the Company paid cash dividends of $6.7 million and $7.0 million, respectively.

The Company anticipates that it will continue to pay dividends in the future as financial conditions permit.

On June 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 previously authorized by the Company’s Board of Directors, which was announced by the Company on March 11, 2025.

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 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 Securities Exchange Act of 1934, as amended.

The Plan allows the Company to repurchase shares up to the Repurchase Limit commencing June 20, 2025 and ending on the earlier of the date on which the Repurchase Limit is reached or other events specified in the Plan.

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.

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See Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2024.

The preparation of our financial statements in conformity with GAAP requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities and disclosures at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

There have been no material changes to the critical accounting estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, except that the critical accounting estimate set forth under, “Annual Impairment Tests” is updated as follows:

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 31 st , and historically was performed during the fourth quarter.

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%;

• Assumed discount rates of 14.5% - 16.5%

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%;

Discount rate of 14.0%

Non-GAAP Financial Measure

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The following table reconciles net income to EBITDA (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Interest expense, net

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Depreciation and amortization

Impairment charge

Cautionary Note Regarding Forward Looking Statements

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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, including those described in the “Risk Factors” section herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 .

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.

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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 2. Management’s Discussion and Analysis