What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-04 · 285 added, 60 removed, 326 unchanged (51% of the section changed)

4 unchanged sentences

(In thousands, except shares and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

$ 147,836 $ 144,045 $ 288,714 $ 281,142

Costs and expenses:

Cost of goods sold

91,717 88,719 180,261 175,375

Selling and administrative expenses

51,327 52,240 101,695 102,342

Interest expense, net

Income (loss) before income tax expense (benefit)

Income tax expense (benefit)

Net income (loss)

Net income (loss) per share:

981 1,250 1,893 2,495

Tradename impairment charge

2,600 - 2,600 -

146,625 142,209 286,449 280,212

Income before income tax (benefit) expense

1,211 1,836 2,265 930

Income tax (benefit) expense

( 10 ) 285 210 137

$ 1,221 $ 1,551 $ 2,055 $ 793

Net income per share:

$ 0.08 $ 0.10 $ 0.14 $ 0.05

Weighted average shares outstanding during the period:

14,495,144 14,813,984 14,562,081 15,206,819

14,907,818 15,101,942 14,912,832 15,573,692

Other comprehensive income, net of tax:

Defined benefit pension plans

$ 49 $ 8 $ 98 $ 15

Foreign currency translation adjustment

794 1,092 2,087 2,103

Other comprehensive income

843 1,100 2,185 2,118

Comprehensive income

$ 2,064 $ 2,651 $ 4,240 $ 2,911

Cash dividends per common share

$ 0.14 $ 0.14 $ 0.28 $ 0.28

See accompanying Condensed Notes to the Consolidated Financial Statements.

32 unchanged sentences

Current portion of long-term debt

Current portion of acquisition-related contingent liabilities

Total current liabilities

7 unchanged sentences

Other long-term liabilities

10,678 10,211

Total liabilities

215,137 229,026

Commitments and contingencies (Note 6)

Contingencies (Note 6)

Shareholders’ equity:

15 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED March 31, 2026 AND 2025

THREE MONTHS ENDED June 30, 2026 AND 2025

(In thousands, except shares and per share data)

2 unchanged sentences

Shareholders’

Balance, April 1, 2025

16,244,241 $ 15 $ 83,931 $ 114,825 $ ( 4,341 ) $ 194,430

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

76,051 - 99 - - 99

Common shares repurchased and retired

( 402,329 ) - ( 2,024 ) ( 2,124 ) - ( 4,148 )

Share-based compensation expense

- - 1,279 - - 1,279

Cash dividends declared ($ 0.14 per share)

- - - ( 2,235 ) - ( 2,235 )

Comprehensive income (loss):

- - - 1,551 - 1,551

Pensions, net of taxes of $ 2

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

- - - - 1,092 1,092

Balance, June 30, 2025

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

Balance, April 1, 2026

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

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

326,155 - 44 - - 44

Common shares repurchased and retired

( 13,513 ) - ( 40 ) ( 45 ) - ( 85 )

Share-based compensation expense

- - 812 - - 812

Cash dividends declared ($ 0.14 per share)

- - - ( 2,203 ) - ( 2,203 )

Comprehensive income (loss):

- - - 1,221 - 1,221

Pensions, net of taxes of $ 16

- - - - 49 49

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

- - - - 794 794

Balance, June 30, 2026

15,945,623 $ 16 $ 85,673 $ 110,206 $ ( 2,512 ) $ 193,383

SUPERIOR GROUP OF COMPANIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Six MONTHS ENDED June 30, 2026 AND 2025

(In thousands, except shares and per share data)

Comprehensive

Income (Loss),

Shareholders’

Balance, January 1, 2025

11 unchanged sentences

Pensions, net of taxes of $ 5

- - - - 15 15

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

- - - - 2,103 2,103

Balance, March 31, 2025

Balance, June 30, 2025

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

9 unchanged sentences

- - - ( 4,367 ) - ( 4,367 )

Comprehensive income:

Comprehensive income (loss):

- - - 2,055 - 2,055

3 unchanged sentences

- - - - 2,087 2,087

Balance, March 31, 2026

Balance, June 30, 2026

15,945,623 $ 16 $ 85,673 $ 110,206 $ ( 2,512 ) $ 193,383

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

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

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

Depreciation and amortization

2 unchanged sentences

Share-based compensation expense

Tradename impairment charge

Change in fair value of acquisition-related contingent liabilities

6 unchanged sentences

Other long-term liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

10 unchanged sentences

Effect of currency exchange rates on cash

Net decreases in cash and cash equivalents

Net (decreases) increases in cash and cash equivalents

Cash and cash equivalents balance, beginning of period

29 unchanged sentences

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 .

These reclassifications did not have an effect on the Company’s previously reported consolidated results of operations, financial position or cash flows for the quarter ended June 30, 2026 .

Recently Adopted Accounting Pronouncements

1 unchanged sentence

Measurement of Credit Losses for Accounts Receivable and Contract Assets" .

The FASB issued ASU 2025 - 05 to simplify the application of the current expected credit loss (CECL) model to short-term receivables and contract assets under ASC 606.

The FASB issued ASU 2025 - 05 to simplify the application of the current expected credit loss (CECL) model to short-term receivables and contract assets under Topic 606.

The amendments introduce a practical expedient (available to all entities) that allows companies to assume current conditions as of the balance sheet date remain unchanged for the life of the asset, removing the need to incorporate complex macroeconomic forecasts for short-term assets.

37 unchanged sentences

Such costs are recognized as selling and administrative expenses in the Branded Products and Healthcare Apparel segments.

Income and expenses related to corporate functions that are not specifically attributable to an individual reportable segment are presented within Other in the table below.

Income and expenses related to corporate functions that are not specifically attributable to an individual reportable segment are presented within corporate selling and administrative expenses under the segment tables.

Adjusted EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, net, income tax expense, depreciation and amortization expense and impairment charges.

The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences, (iii) asset base (depreciation and amortization) and (iv) impairments.

The Company uses Adjusted EBITDA internally to monitor operating results and to evaluate the performance of its business.

In addition, the compensation committee has used Adjusted EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs.

Adjusted EBITDA is not a measure of financial performance under GAAP.

Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP.

The items excluded to calculate Adjusted EBITDA are significant components in understanding and assessing the Company’s results of operations.

The Company’s Adjusted EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted EBITDA in the same manner.

The chief operating decision maker, who is the Company’s Chief Executive Officer, evaluates the performance of our segments.

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, 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.

Segment Adjusted EBITDA, as reported below for each segment, is our primary measure of segment profitability under U.S.

GAAP ASC 280 “Segment Reporting”.

Amounts included in income before income tax expense and excluded from Segment Adjusted EBITDA include:

interest expense, net, impairments and depreciation and amortization expense.

Total Segment Adjusted EBITDA is a non-GAAP financial measure and is reconciled to its most closely comparable GAAP metric of income before income tax expense (benefit) in the table below.

Please see reconciliations of Adjusted EBITDA and Total Segment Adjusted EBITDA included in the Non-GAAP Financial Measures tables below.

The following tables set forth financial information related to the Company’s operating segments (in thousands):

Branded Products Healthcare Apparel Contact Centers Intersegment Eliminations

For the Three Months Ended March 31, 2026:

Branded Products

Healthcare Apparel

Contact Centers

Intersegment Eliminations

For the Three Months Ended June 30, 2026:

$ 98,390 $ 27,231 $ 23,094 $ ( 879 ) $ 147,836

4 unchanged sentences

26,001 9,946 10,354 ( 470 ) 45,831

Depreciation and amortization

Tradename impairment charge

- 2,600 - - 2,600

Segment EBITDA

Tradename impairment charge

- 2,600 - - 2,600

Branded Products Healthcare Apparel Contact Centers Intersegment Eliminations

For the Three Months Ended March 31, 2025:

Segment depreciation and amortization

1,344 819 649 - 2,812

Segment Adjusted EBITDA

$ 11,215 $ ( 160 ) $ 2,045 $ - $ 13,100

Less corporate selling and administrative expenses

Add back corporate depreciation and amortization

Adjusted EBITDA

Branded Products

Healthcare Apparel

Contact Centers

Intersegment Eliminations

For the Three Months Ended June 30, 2025:

$ 92,647 $ 28,253 $ 23,977 $ ( 832 ) $ 144,045

Cost of goods sold

3 unchanged sentences

25,432 10,078 11,612 ( 319 ) 46,803

Depreciation and amortization

Segment depreciation and amortization

1,395 854 639 - 2,888

Segment EBITDA

Segment Adjusted EBITDA

$ 8,979 $ 792 $ 1,640 $ - $ 11,411

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

Three Months Ended March 31,

Income (loss) before income tax expense

Less corporate selling and administrative expenses

Add back corporate depreciation and amortization

Adjusted EBITDA

Branded Products

Healthcare Apparel

Contact Centers

Intersegment Eliminations

For the Six Months Ended June 30, 2026:

$ 189,259 $ 55,832 $ 45,347 $ ( 1,724 ) $ 288,714

Interest expense

Depreciation and amortization

Segment EBITDA

Cost of goods sold

122,400 36,684 21,983 ( 806 ) 180,261

66,859 19,148 23,364 ( 918 ) 108,453

Selling and administrative expenses

50,747 20,724 19,917 ( 918 ) 90,470

Tradename impairment charge

- 2,600 - - 2,600

Tradename impairment charge

- 2,600 - - 2,600

Segment depreciation and amortization

2,718 1,642 1,237 - 5,597

Segment Adjusted EBITDA

$ 18,830 $ 66 $ 4,684 $ - $ 23,580

Less corporate selling and administrative expenses

Add back corporate depreciation and amortization

Adjusted EBITDA

Branded Products

Healthcare Apparel

Contact Centers

Intersegment Eliminations

For the Six Months Ended June 30, 2025:

$ 179,121 $ 55,516 $ 48,202 $ ( 1,697 ) $ 281,142

Cost of goods sold

118,418 35,367 22,608 ( 1,018 ) 175,375

60,703 20,149 25,594 ( 679 ) 105,767

Selling and administrative expenses

48,852 19,604 22,533 ( 679 ) 90,310

Segment depreciation and amortization

2,875 1,766 1,361 - 6,002

Segment Adjusted EBITDA

$ 14,726 $ 2,311 $ 4,422 $ - $ 21,459

Less corporate selling and administrative expenses

Add back corporate depreciation and amortization

Adjusted EBITDA

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

Three Months Ended June 30,

Six Months Ended June 30,

Income before income tax expense

$ 1,211 $ 1,836 $ 2,265 $ 930

Interest expense, net

981 1,250 1,893 2,495

Corporate selling and administrative expenses

5,496 5,437 11,225 12,032

Segment depreciation and amortization

2,812 2,888 5,597 6,002

Tradename impairment charge

2,600 - 2,600 -

Total Segment Adjusted EBITDA

$ 13,100 $ 11,411 $ 23,580 $ 21,459

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

Three Months Ended June 30,

Six Months Ended June 30,

$ 1,221 $ 1,551 $ 2,055 $ 793

Interest expense, net

981 1,250 1,893 2,495

Income tax (benefit) expense

( 10 ) 285 210 137

Segment depreciation and amortization

2,812 2,888 5,597 6,002

Corporate depreciation and amortization

72 90 145 180

Tradename impairment charge

2,600 - 2,600 -

Adjusted EBITDA

$ 7,676 $ 6,064 $ 12,500 $ 9,607

NOTE 3 – Net Sales:

2 unchanged sentences

The following table provides our revenue from contracts with customers:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Branded Products (1)

$ 98,390 $ 92,647 $ 189,259 $ 179,121

Healthcare Apparel

27,231 28,253 55,832 55,516

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.

22,215 23,145 43,623 46,505

$ 147,836 $ 144,045 $ 288,714 $ 281,142

( 1 ) Sales under bill-and-hold arrangements totaled $ 8.0 million and $ 11.6 million, for the three months ended June 30, 2026 and 2025 , respectively.

Sales under bill-and-hold arrangements totaled $ 17.8 million and $ 19.5 million, for six months ended June 30, 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):

Accounts receivable

Accounts receivable, net

$ 93,948 $ 104,336

Current contract assets

57,134 48,903

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.

Contract assets relate to goods produced without an alternative use for which the Company has an enforceable right to payment but which have not yet been invoiced to the customer, as such the Company applies the right to invoice practical expedient which allows the omission of certain disclosures related to remaining performance obligations.

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, 2026 , $ 9.8 million of revenue was recognized from the contract liabilities balance as of December 31, 2025 .

During the six months ended June 30, 2026 , $ 10.3 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 March 31,

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

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)

$ 1,221 $ 1,551 $ 2,055 $ 793

Weighted average shares outstanding - basic

14,495,144 14,813,984 14,562,081 15,206,819

Dilutive common stock equivalents

412,674 287,958 350,751 366,873

Weighted average shares outstanding - diluted

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.

14,907,818 15,101,942 14,912,832 15,573,692

Net income per share:

$ 0.08 $ 0.10 $ 0.14 $ 0.05

Awards to purchase 535,272 and 689,402 shares of common stock with weighted average exercise prices of $ 15.55 and $ 16.59 per share were outstanding during the three months ended June 30, 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.

Awards to purchase 555,817 and 496,897 shares of common stock with weighted average exercise prices of $ 15.74 and $ 18.91 per share were outstanding during the six months ended June 30, 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:

2 unchanged sentences

Revolving credit facility due August 2027

$ 26,000 $ 35,000

Term loan due August 2027

56,250 59,063

unamortized debt issuance costs

( 285 ) ( 407 )

$ 81,965 $ 93,656

Current portion of long-term debt

Long-term debt less current maturities

$ 74,465 $ 87,093

For the three months ended June 30, 2026 and 2025, interest expense of $ 1.0 million and $ 1.3 million is presented net of interest income of $ 0.2 million and $ 0.2 million, respectively.

For the six months ended June 30, 2026 and 2025, interest expense of $ 1.9 million and $ 2.5 million is presented net of interest income of $ 0.5 million and $ 0.4 million, respectively.

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 4.9 % as of March 31, 2026 .

The weighted average interest rate on our outstanding borrowings under the Credit Facilities was 4.8 % as of June 30, 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 March 31, 2026 , there were no outstanding letters of credit under the revolving credit facility.

As of June 30, 2026 , there were outstanding letters of credit under the revolving credit facility totaling $ 0.1 million.

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

4 unchanged sentences

The Credit Agreement also requires the Company to comply with a fixed charge coverage ratio of at least 1.25 to 1.0 and a net leverage ratio not to exceed 4.0 to 1.0.

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, 2026 , the Company was in compliance with these ratios.

As of June 30, 2026 , the Company was in compliance with these ratios.

NOTE 6 – Contingencies and Geographic Supply Concentrations:

1 unchanged sentence

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 March 31, 2026 was $ 0.9 million.

The estimated fair value of the acquired company's acquisition-related contingent consideration payable as of June 30, 2026 was $ 1.0 million, of which $ 0.6 million is expected to be paid in the second quarter of 2027.

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.

12 unchanged sentences

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.

In February 2026, these agreements were retroactively extended until December 2026 and during the six months ended June 30, 2026, the Company recorded a consolidated duties receivable of $ 2.3 million within other current assets through a reduction of inventory and reversal of cost of goods sold of $ 0.4 million, primarily in its Healthcare Apparel segment of which the majority has been collected.

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.

3 unchanged sentences

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.

The Company's accounting policy is to recognize tariff refunds (as a reduction of cost of goods sold) when the refund is probable and recognize corresponding refunds to customers (as a reduction of net sales) where contractually required or an implicit obligation exists.

As of June 30, 2026, the Company has recorded a $ 4.3 million tariff refund, of which $ 3.1 million has been received in cash and corresponding refunds to customers of $ 2.7 million.

government implemented a new 10.0% tariff under Section 122 of the Trade Act of 1974, effective as of February 24, 2026.

This tariff terminated on July 24, 2026.

government implemented new tariffs generally ranging from 10.0% to 12.5% under Section 301 of the Trade Act of 1974, effective as of July 24, 2026.

NOTE 7 – Inventories:

1 unchanged sentence

Finished goods

$ 74,185 $ 81,097

Work in process

Raw materials

15,306 15,632

$ 90,492 $ 97,474

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 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.

For the three months ended June 30, 2026 , the Company recorded a tax benefit of ($ 0.01 ) million, which represents an effective tax rate benefit of ( 0.8 %).

For the six months ended June 30, 2026 , the Company recorded tax expense of $ 0.2 million, which represents an effective tax rate of 9.3 %.

The income tax expense and the effective tax rate for the three and six months ended June 30, 2026 were primarily impacted by the discrete tax benefit relating to the $ 2.6 million trade name impairment charge, as well as items related to the Company’s share-based compensation and long-term incentive plans.

The rate for both periods was further impacted by the variability in the mix of earnings across the Company’s foreign and domestic operations, which are subject to various statutory tax rates in those jurisdictions.

For the three months ended June 30, 2025, the Company recorded tax expense of $ 0.3 million, which represents an effective tax rate of 15.5 %.

For the six months ended June 30, 2025, the Company recorded tax expense of $ 0.1 million, which represents an effective tax rate of 14.7 %.

The income tax expense and the effective tax rate for the three and six months ended June 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 during the six months ended June 30, 2025.

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

1 unchanged sentence

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 Company has considered the estimated impact of OBBBA on its expected annual effective tax rate as part of its income tax expense for the three and six months ended June 30, 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.

2 unchanged sentences

Balance at the beginning of year

$ 2,964 $ 3,101

Credit loss expense

Write-Off of accounts receivable

( 373 ) ( 2,428 )

Balance at the end of the period

$ 4,256 $ 2,964

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

Salaries, wages, commissions and other compensation

$ 13,402 $ 14,990

Contract liabilities

2 unchanged sentences

Customer deposits

14,779 11,578

Other accrued expenses

Other current liabilities

$ 49,725 $ 53,041

NOTE 10 – Intangible Assets:

Intangible Assets

An indicator of impairment related to CID Resources indefinite lived intangible assets was identified during the second quarter of 2026 for which a quantitative interim impairment test was performed using the relief-from-royalty method and resulted in a trade name impairment totaling $ 2.6 million.

June 30, 2026

December 31, 2025

Finite-Lived Intangible Assets (dollars in thousands)

Weighted Average Life (In years)

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount

Accumulated Amortization

Customer relationships ( 7 - 15 year life)

11.6 $ 53,798 $ ( 36,263 ) $ 53,798 $ ( 34,608 )

Non-compete agreements ( 3 - 7 year life)

5.3 1,778 ( 1,696 ) 1,778 ( 1,662 )

10.0 540 ( 230 ) 509 ( 208 )

2.0 1,030 ( 963 ) 1,030 ( 883 )

Total Finite-Lived Intangible Assets

$ 57,146 $ ( 39,152 ) $ 57,115 $ ( 37,361 )

Indefinite-lived Intangible Assets (dollars in thousands)

Carrying Amount, June 30, 2026

Carrying Amount, December 31, 2025

Branded Products

$ 4,700 $ 4,700

Branded Products

CID Resources (1)

Healthcare Apparel

11,300 13,900

$ 24,900 $ 27,500

Finite-Lived Intangible Assets

$ 17,994 $ 19,754

Total Intangible Assets

$ 42,894 $ 47,254

Includes trade names and trademarks associated with CID Resources and Wink®.

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