What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-04 compared with 2025-11-03 · 93 added, 216 removed, 293 unchanged (51% of the section changed)

4 unchanged sentences

(In thousands, except shares and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

$ 138,467 $ 149,690 $ 419,609 $ 420,268

Three Months Ended March 31,

Costs and expenses:

Cost of goods sold

85,389 89,144 260,764 253,650

Selling and administrative expenses

48,513 52,404 150,855 149,906

Interest expense, net

1,378 1,569 3,873 4,897

135,280 143,117 415,492 408,453

Income before income tax expense

3,187 6,573 4,117 11,815

Income tax expense

443 1,170 580 1,900

$ 2,744 $ 5,403 $ 3,537 $ 9,915

Net income per share:

$ 0.19 $ 0.34 $ 0.24 $ 0.62

$ 0.18 $ 0.33 $ 0.23 $ 0.60

Income (loss) before income tax expense (benefit)

Income tax expense (benefit)

Net income (loss)

Net income (loss) per share:

Weighted average shares outstanding during the period:

14,738,863 16,107,549 15,050,834 16,118,885

15,119,050 16,543,990 15,422,144 16,588,914

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Defined benefit pension plans

$ 7 $ 23 $ 22 $ 68

Foreign currency translation adjustment

( 47 ) 530 2,056 ( 1,201 )

Other comprehensive income (loss)

( 40 ) 553 2,078 ( 1,133 )

Other comprehensive income

Comprehensive income

$ 2,704 $ 5,956 $ 5,615 $ 8,782

Cash dividends per common share

$ 0.14 $ 0.14 $ 0.42 $ 0.42

See accompanying Condensed Notes to the Consolidated Financial Statements.

3 unchanged sentences

(In thousands, except shares and par value data)

September 30,

Current assets:

27 unchanged sentences

Current portion of long-term debt

Current portion of acquisition-related contingent liabilities

Total current liabilities

27 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED September 30, 2025 AND 2024

(In thousands, except shares and per share data)

Comprehensive

Income (Loss),

Shareholders’

Balance, July 1, 2024

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

Issuance of common stock under stock incentive plans and related tax effect

3,092 - 42 - - 42

Common shares repurchased and retired

( 463,707 ) - ( 2,227 ) ( 4,120 ) - ( 6,347 )

Share-based compensation expense

- - 1,285 - - 1,285

Cash dividends declared ($ 0.14 per share)

- - - ( 2,337 ) - ( 2,337 )

Comprehensive income (loss):

- - - 5,403 - 5,403

Pensions, net of taxes of $ 8

- - - - 23 23

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

- - - - 530 530

Balance, September 30, 2024

16,331,962 $ 16 $ 81,859 $ 121,052 $ ( 3,418 ) $ 199,509

Balance, July 1, 2025

15,917,963 $ 15 $ 83,285 $ 112,017 $ ( 3,241 ) $ 192,076

Issuance of common stock under stock incentive plans and related tax effect

54,035 - ( 99 ) - - ( 99 )

Common shares repurchased and retired

( 3,206 ) - - ( 2 ) - ( 2 )

Share-based compensation expense

- - 1,355 - - 1,355

Cash dividends declared ($ 0.14 per share)

- - - ( 2,198 ) - ( 2,198 )

Comprehensive income (loss):

- - - 2,744 - 2,744

Pensions, net of taxes of $ 2

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

- - - - ( 47 ) ( 47 )

Balance, September 30, 2025

15,968,792 $ 15 $ 84,541 $ 112,561 $ ( 3,281 ) $ 193,836

SUPERIOR GROUP OF COMPANIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY

nine MONTHS ENDED September 30, 2025 AND 2024

THREE MONTHS ENDED March 31, 2026 AND 2025

(In thousands, except shares and per share data)

10 unchanged sentences

- - 1,283 - - 1,283

Written put options

- - 2,407 - - 2,407

Cash dividends declared ($ 0.14 per share)

3 unchanged sentences

Pensions, net of taxes of $ 2

- - - - 68 68

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

- - - - 1,011 1,011

Balance, September 30, 2024

Balance, March 31, 2025

16,244,241 $ 15 $ 83,930 $ 114,825 $ ( 4,341 ) $ 194,429

9 unchanged sentences

- - - ( 2,164 ) - ( 2,164 )

Comprehensive income (loss):

Comprehensive income:

- - - 834 - 834

3 unchanged sentences

- - - - 1,293 1,293

Balance, September 30, 2025

Balance, March 31, 2026

15,632,981 $ 16 $ 84,857 $ 111,233 $ ( 3,355 ) $ 192,751

4 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

4 unchanged sentences

Non-cash operating lease expense

Changes in assets and liabilities, net of acquisition of a business:

Changes in assets and liabilities:

Accounts receivable

2 unchanged sentences

Accounts payable and other current liabilities

Payment of acquisition-related contingent liabilities

Other long-term liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

5 unchanged sentences

Payments of term loan

Payment of cash dividends

Payment of acquisition-related contingent liabilities

Proceeds received on exercise of stock options and payments for shares withheld for taxes

Payments of cash dividends

Shares withheld for taxes net of proceeds received on exercise of stock options

Common shares repurchased and retired

Net cash used in financing activities

Net cash (used in) provided by financing activities

Effect of currency exchange rates on cash

28 unchanged sentences

The Company refers to the 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.

Change in Accounting Policy

The Company historically evaluated goodwill and indefinite-lived intangible assets for impairment during the fourth quarter or when an indicator of impairment existed.

During the third quarter of 2025, the Company voluntarily changed its date of the annual goodwill impairment assessment for all of its reporting units as well as its indefinite-lived intangible assets to August 31 st .

Historically the annual test was performed during the fourth quarter.

The Company changed the date to provide timelier information for planning and forecasting purposes and provide additional time to complete the required impairment testing.

The change did not represent a material change to the Company’s method of applying the accounting principle and was not retrospectively applied because the Company did not carry a goodwill balance in 2024 prior to the fourth quarter of 2024.

No impairments were identified during the third quarter 2025 annual goodwill and indefinite-lived intangible impairment tests.

Reclassifications

The accompanying financial statements for the prior year period contain certain reclassifications.

Reclassifications impact items within our statements of comprehensive income, our statements of shareholders' equity, our statements of cash flows and Note 7 Inventories.

These reclassifications did not have an effect on the Company’s consolidated results of operations, financial position or cash flows for the quarter ended September 30, 2025 .

Recently Issued Accounting Pronouncements Not Yet Adopted

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

The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold.

Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid.

Early adoption is permitted for annual financial statements that have not yet been issued.

The amendments should be applied on a prospective basis although retrospective application is permitted.

The Company will adopt the required disclosures in its annual financial statements as of December 31, 2025.

The adoption of this guidance will not affect the Company’s consolidated results of operations, financial position or cash flows.

In November 2024, the FASB issued ASU 2024 - 03, “ Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses “.

The ASU requires the disclosure of additional information about specific categories of costs and expenses in the notes to the consolidated financial statements.

This guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

This ASU will likely result in additional disclosures.

We are currently evaluating the provisions of this ASU.

Reclassifications impact items within our statements of cash flows.

These reclassifications did not have an effect on the Company’s consolidated results of operations, financial position or cash flows for the quarter ended March 31, 2026 .

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU 2025 - 05, "Financial Instruments - Credit Losses (Topic 326 ):

4 unchanged sentences

The amendments are effective for annual periods beginning after December 15, 2025 ( interim periods included), with prospective application and early adoption permitted.

We adopted the amendments of ASU 2025 - 05 on January 1, 2026.

The adoption of this guidance did not affect the Company’s consolidated results of operations, financial position or cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024 - 03, “ Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses." The ASU requires the disclosure of additional information about specific categories of costs and expenses in the notes to the consolidated financial statements.

This guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

This ASU will likely result in additional disclosures.

We are currently evaluating the provisions of this ASU.

In September 2025, the FASB issued ASU 2025 - 06, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software." This ASU removes all references to prescriptive and sequential software development stages (referred to as "project stages") and instead requires an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended.

Additional updates include changes to accounting for website development costs and certain disclosure requirements.

This ASU will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

This ASU permits an entity to apply the new guidance using either a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption, or a retrospective transition approach.

The Company is currently assessing the impact that adopting this ASU may have on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025 - 11, "Interim Reporting (Topic 270 ):

Narrow-Scope Improvements." The ASU clarifies interim disclosure requirements and the applicability of Topic 270.

The objective of the amendments is to provide further clarity about the current interim disclosure requirements.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Adoption of this ASU can be applied either on a prospective or a retrospective approach.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU may have on its consolidated financial statements.

NOTE 2 – Operating Segment Information :

8 unchanged sentences

Contact Centers:

Through multiple The Office Gurus® entities, including our subsidiaries in El Salvador, Belize, Dominican Republic, the United States and Jamaica until its closure on June 15, 2025, we provide outsourced, nearshore business process outsourcing, contact and call-center support services to North American customers.

Through multiple The Office Gurus® entities, including our subsidiaries in El Salvador, Belize, Dominican Republic and the United States and in Jamaica until its closure on June 15, 2025, we provide outsourced, nearshore business process outsourcing, contact and call-center support services to North American customers.

Intersegment eliminations include the elimination of revenues and costs from services provided by the Contact Centers segment to the Company’s two other segments.

3 unchanged sentences

Segment EBITDA is the profitability metric reported to the Company’s CODM for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment.

Segment EBITDA is calculated as net sales less cost of goods sold and selling and administrative expenses.

Segment EBITDA is calculated as net sales less cost of goods sold and selling and administrative expenses, and depreciation and amortization.

Segment information for total assets is not presented as this information is not used by the Company’s CODM in measuring segment performance or allocating resources between segments.

1 unchanged sentence

Branded Products Healthcare Apparel Contact Centers Intersegment Eliminations

For the Three Months Ended September 30, 2025:

$ 85,095 $ 31,520 $ 22,664 $ ( 812 ) $ - $ 138,467

Cost of goods sold

55,466 19,394 10,669 ( 140 ) - 85,389

29,629 12,126 11,995 ( 672 ) - 53,078

Selling and administrative expenses

23,501 9,779 10,283 ( 672 ) 5,622 48,513

Depreciation and amortization

1,396 832 661 - 86 2,975

Segment EBITDA

$ 7,524 $ 3,179 $ 2,373 $ - $ ( 5,536 ) $ 7,540

Branded Products Healthcare Apparel Contact Centers Intersegment Eliminations

For the Three Months Ended September 30, 2024:

$ 92,547 $ 33,025 $ 25,038 $ ( 920 ) $ - $ 149,690

Cost of goods sold

59,037 19,216 11,296 ( 405 ) - 89,144

33,510 13,809 13,742 ( 515 ) - 60,546

Selling and administrative expenses

24,223 11,240 11,482 ( 515 ) 5,974 52,404

Impairment charge

- 260 - - - 260

Depreciation and amortization

1,446 944 770 - 92 3,252

Segment EBITDA

$ 10,733 $ 3,773 $ 3,030 $ - $ ( 5,882 ) $ 11,654

Branded Products Healthcare Apparel Contact Centers Intersegment Eliminations

For the Nine Months Ended September 30, 2025:

For the Three Months Ended March 31, 2026:

$ 90,869 $ 28,601 $ 22,253 $ ( 845 ) $ - $ 140,878

9 unchanged sentences

Branded Products Healthcare Apparel Contact Centers Intersegment Eliminations

For the Nine Months Ended September 30, 2024:

For the Three Months Ended March 31, 2025:

$ 86,474 $ 27,263 $ 24,225 $ ( 865 ) $ - $ 137,097

4 unchanged sentences

23,420 9,526 10,921 ( 360 ) 6,595 50,102

Impairment charge

- 260 - - - 260

Depreciation and amortization

3 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

Income before income tax expense

Three Months Ended March 31,

Income (loss) before income tax expense

$ 1,054 $ ( 906 )

Interest expense

1,378 1,569 3,873 4,897

Depreciation and amortization

2,975 3,252 9,157 9,872

Impairment charge

Segment EBITDA

1 unchanged sentence

NOTE 3 – Net Sales:

For our Branded Products and Healthcare Apparel segments, revenue is primarily generated from the sale of finished products to customers.

Revenues for our Branded Products and Healthcare Apparel segments are recognized when the performance obligations under the contract terms are satisfied.

For certain contracts with customers in which the Company has an enforceable right to payment for goods with no alternative use, revenue is recognized over time upon receipt of finished goods into inventory.

Revenue for goods that do have an alternative use or that the customer is not obligated to purchase under the terms of a contract is generally recognized when the goods are transferred to the customer.

The Company includes shipping and handling fees billable to customers in net sales.

Shipping and handling activities that occur after the transfer of promised goods are accrued as control is transferred to the customer rather than being treated as a separate performance obligation.

For our Contact Centers segment, revenue is generated from providing our customers with contact center services.

Revenue for our Contact Centers segment is recognized as services are delivered.

Revenue is measured at the amount of consideration we expect to receive in exchange for the goods or services.

Variable consideration for estimated returns, allowances and other price variances is recorded based upon historical experience and current allowance programs.

Contract terms may involve variable consideration clauses such as sales discounts and customer rebates, and revenue is adjusted accordingly for these provisions.

Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The promised amount of consideration in a contract is not adjusted for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised good or service to a customer and when the customer pays for that product or service will be one year or less.

Sales taxes are excluded from the measurement of a performance obligation’s transaction price.

Sales commissions are expensed as incurred when we expect that the amortization period of such costs will be one year or less.

For further information regarding our net sales disaggregated by reportable segment see Note 2.

The Company recognizes revenue when the customer takes control of the inventory, either upon shipment or when the material is made available for pick up.

If the customer is deemed to take control of the inventory prior to pick up, the Company recognizes the revenue as a bill-and-hold transaction in accordance with Topic 606.

Sales under bill-and-hold arrangements totaled $ 10.6 million and $ 10.5 million, for the three months ended September 30, 2025 and 2024 , respectively.

Sales under bill-and-hold arrangements totaled $ 30.1 million and $ 24.1 million, for the nine months ended September 30, 2025 and 2024 , respectively.

The Company generates revenue by producing and manufacturing (through third parties or in its own facilities) and selling a wide range of promotional products and branded uniforms through its Branded Products segment and healthcare apparel and accessories through its Healthcare Apparel segment.

It also generates revenue by providing outsourced, nearshore and onshore business process outsourcing, contact and call-center support services to North American customers in our Contact Centers segment.

The following table provides our revenue from contracts with customers:

Three Months Ended March 31,

Branded Products(1)

Healthcare Apparel

Contact Centers

( 1 ) Sales under bill-and-hold arrangements totaled $ 9.8 million and $ 7.9 million, for the three months ended March 31, 2026 and 2025 , respectively.

Contract Assets and Contract Liabilities

The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers (in thousands):

September 30,

Accounts receivable

4 unchanged sentences

Contract liabilities are included in other current liabilities in our balance sheets.

During the nine months ended September 30, 2025 , $ 2.6 million of revenue was recognized from the contract liabilities balance as of December 31, 2024 .

During the three months ended March 31, 2026 , $ 9.8 million of revenue was recognized from the contract liabilities balance as of December 31, 2025 .

NOTE 4 – 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 September 30,

Nine Months Ended September 30,

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

Three Months Ended March 31,

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

Weighted average shares outstanding - basic

1 unchanged sentence

Weighted average shares outstanding - diluted

Net income per share:

Awards to purchase 654,495 and 309,778 shares of common stock with weighted average exercise prices of $ 16.52 and $ 21.44 per share were outstanding during the three months ended September 30, 2025 and 2024 , 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 549,430 and 335,071 shares of common stock with weighted average exercise prices of $ 18.11 and $ 21.40 per share were outstanding during the nine months ended September 30, 2025 and 2024 , 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.

Net income (loss) per share:

Diluted weighted average shares outstanding excludes shares of common stock of 445,786 for the three months ended March 31, 2025, as their inclusion would have been antidilutive given the Company's net loss.

Awards to purchase 576,363 and 304,392 shares of common stock with weighted average exercise prices of $ 15.93 and $ 21.23 per share, respectively, were outstanding during the three months ended March 31, 2026 and 2025 , 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.

NOTE 5 – Long-Term Debt:

Debt consisted of the following (in thousands):

September 30,

Credit Facilities:

Revolving credit facility due August 2027

$ 40,000 $ 22,000

Term loan due August 2027

60,469 64,688

unamortized debt issuance costs

( 469 ) ( 653 )

$ 100,000 $ 86,035

Current portion of long-term debt

Long-term debt less current maturities

$ 93,906 $ 80,410

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 5.4 % as of September 30, 2025 .

The weighted average interest rate on our outstanding borrowings under the Credit Facilities was 4.9 % as of March 31, 2026 .

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 September 30, 2025 , there were no outstanding letters of credit under the revolving credit facility.

As of March 31, 2026 , there were no outstanding letters of credit under the revolving credit facility.

Contractual principal payments for the term loan, which does not contain pre-payment penalties, are as follows:

remainder of 2025 - $ 1.4 million;

2026 - $ 6.6 million;

and 2027 - $ 52.5 million.

remainder of 2026 - $ 5.2 million and 2027 - $ 52.5 million.

The Credit Facilities are secured by substantially all of the operating assets of the Company, and the Company’s obligations under the Credit Facilities are guaranteed by all of its domestic subsidiaries.

3 unchanged sentences

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 September 30, 2025 , the Company was in compliance with these ratios.

As of March 31, 2026 , the Company was in compliance with these ratios.

NOTE 6 – Contingencies and Geographic Supply Concentrations:

Contingencies

The purchase price to acquire substantially all of the assets of Guardian Products, Inc.

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

In the third quarter of 2025 the final contingent consideration payment was made totaling $ 1.0 million for the measurement period ended in April 2025.

The purchase price to acquire substantially all of the assets of 3Point in December 2024 included contingent consideration based on varying levels of the acquired company’s EBITDA in each measurement period through December 2027.

The estimated fair value of the acquired company's acquisition-related contingent consideration payable as of September 30, 2025 was $ 1.4 million, of which $ 0.9 million is expected to be paid in the second quarter of 2026.

The estimated fair value of the acquired company's acquisition-related contingent consideration payable as of March 31, 2026 was $ 0.9 million.

The total payments related to this contingent consideration payable is capped at $ 0.9 million per year and $ 2.6 million over the three -year measurement period.

The Company will continue to evaluate the acquired company's liability for remeasurement at the end of each reporting period and any changes will be recorded in the Company’s statements of comprehensive income.

The carrying amount of the liability may fluctuate significantly and actual amounts paid may be different from the estimated value of the liability.

The Company is involved in various legal actions and claims arising from the normal course of business.

5 unchanged sentences

Haiti, China, Madagascar, Vietnam, Pakistan, Bangladesh, and the United States.

Additionally, we generally source or manufacture apparel in parts of the world that may be affected by economic uncertainty, political unrest, labor disputes, health emergencies, natural disasters or the imposition of duties, tariffs or other import regulations by the United States.

Additionally, we generally source or manufacture apparel in parts of the world that may be affected by economic uncertainty, oil price shocks, political unrest, labor disputes, health emergencies, natural disasters or the imposition of duties, tariffs or other import regulations by the United States.

The Branded Products segment also relies on the supply of other types of finished products including hard goods such as drinkware and injection molded plastics along with raw materials that are principally sourced from China, either directly or indirectly.

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

We continue to monitor these imposed tariffs and duties and the ongoing negotiations between the U.S.

government and the countries in which we manufacture, as well as evaluate sourcing alternatives.

The geography from which we source materials and products is affected by duties and tariffs.

During 2025, the U.S.

government imposed higher tariffs and/or new tariffs which impacted certain sources of the Company’s materials and production.

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), expired on September 30, 2025.

In February 2026, these agreements were retroactively extended until December 2026 and the process to receive the refund of duties paid in the interim period between expiration and grant of retroactivity commenced during the first quarter of 2026.

The Company recorded a consolidated duties receivable within other current assets for $ 2.3 million through a reduction of inventory and reversal of cost of goods sold of $ 0.4 million, primarily in our Healthcare Apparel segment during the three months ended March 31, 2026.

Additionally in February 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, effectively invalidating the tariffs imposed via that method.

These IEEPA tariffs stopped being collected on February 24, 2026.

The Supreme Court’s ruling left open the questions of whether, how, and when payors of the tariffs might receive refunds;

subsequently, the U.S.

government created a system through which refunds of certain entries could be processed.

A new 10% tariff has been implemented under Section 122 of the Trade Act of 1974, effective as of February 24, 2026.

Although the United States Supreme Court ruling invalidated the tariffs, as of March 31, 2026, the Company has not recorded a tariff refund receivable due to the uncertainty of the amount and collection of a refund.

NOTE 7 – Inventories:

Inventories consisted of the following amounts (in thousands):

September 30,

Finished goods

1 unchanged sentence

Raw materials

( 1 ) Certain raw materials were reclassified to finished goods in the current period and the December 31, 2024 balances were adjusted to the current period presentation.

NOTE 8 – 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 September 30, 2025 , the Company recorded tax expense of $ 0.4 million, which represents an effective tax rate of 13.9 %.

For the nine months ended September 30, 2025 , the Company recorded tax expense of $ 0.6 million, which represents an effective tax rate of 14.1 %.

The income tax expense and the effective tax rate for the three and nine months ended September 30, 2025 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 rate was further favorably impacted by the performance of the Company’s compensation plans in both the three and nine months ended September 30, 2025, totaling $ 0.3 million and $ 1.0 million, respectively.

For the three months ended September 30, 2024, the Company recorded a provision for income taxes of $ 1.2 million, which represents an effective tax rate of 17.8 %.

For the nine months ended September 30, 2024, the Company recorded a provision for income taxes of $ 1.9 million, which represents an effective tax rate of 16.1 %.

The income tax provision and the effective tax rate for the three and nine months ended September 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.

For the three months ended March 31, 2026 , the Company recorded tax expense of $ 0.2 million, which represents an effective tax rate of 20.9 %.

The income tax expense and the effective tax rate for the three months ended March 31, 2026 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 rate was further impacted by discrete items related to the Company’s share-based compensation and long-term incentive plans during the current quarter.

For the three months ended March 31, 2025 , the Company recorded a benefit for income taxes of $ 0.1 million, which represents an effective tax rate of 16.3 %.

The income tax benefit and the effective tax rate for the three months ended March 31, 2025 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.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted.

The OBBBA includes significant changes to the domestic and international tax provisions, such as modifications to the global tax framework, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company has considered the impact of OBBBA on its annual effective tax rate.

These changes did not have a significant impact on the annual effective tax rate in the quarter ended September 30, 2025 .

The Company is currently evaluating the future impacts of OBBBA on its consolidated financial statements.

The OBBBA included significant changes to the domestic and international tax provisions, such as modifications to the global tax framework, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, and the restoration of favorable tax treatment for certain business provisions.

The legislation had multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company has considered the estimated impact of OBBBA on its expected annual effective tax rate as part of its income tax expense for the quarter ending March 31, 2026.

The impacts include the increased unfavorable Net Controlled Foreign Corporation Tested Income (“NCTI”), formerly Global Intangible Low-Taxed Income (“GILTI”), taking effect in 2026.

NOTE 9 – Other Information :

The activity in the allowance for doubtful accounts receivable was as follows (in thousands):

September 30,

Balance at the beginning of year

Credit loss (reversal) expense

Credit loss expense

Write-Off of accounts receivable

1 unchanged sentence

Other current liabilities consisted of the following (in thousands):

September 30,

Salaries, wages, commissions and other compensation

$ 14,551 $ 18,544

Contract liabilities

4 unchanged sentences

Other current liabilities

$ 42,902 $ 44,367

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