10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

X	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to __________

Commission file number: 001-05869

Exact name of registrant as specified in its charter:

SUPERIOR GROUP OF COMPANIES, INC.

State or other jurisdiction of incorporation or organization:	I.R.S. Employer Identification No.:
Florida	11-1385670

Address of principal executive offices:

10055 Seminole Boulevard

Seminole, Florida 33772-2539

Registrant's telephone number, including area code:

727-397-9611

Former name, former address and former fiscal year, if changed since last report: ___________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]	No [_]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X]	No [_]
Indicate by check mark whether the registrant is a large accelerated filer,  an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  [_]			Accelerated filer  [X]
Non-accelerated filer    [_]		(Do not check if a smaller reporting company)	Smaller Reporting Company  [X]
			Emerging Growth Company  [  ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [_]	No [X]
As of April 23, 2019, the registrant had 15,244,692 shares of common stock outstanding, which is the registrant's only class of common stock.

 PART I - FINANCIAL INFORMATION

ITEM 1.   Financial Statements

 SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED MARCH 31,

(Unaudited)

(In thousands, except shares and per share data)

	2019			2018
Net sales	$	86,552		$	73,087
Costs and expenses:
Cost of goods sold		56,284			48,212
Selling and administrative expenses		25,863			21,182
Other periodic pension costs		259			96
Interest expense		1,170			277
		83,576			69,767
Income before taxes on income		2,976			3,320
Income tax expense		600			870
Net income	$	2,376		$	2,450
Weighted average number of shares outstanding during the period
(Basic)		14,927,341			14,821,659
(Diluted)		15,262,654			15,457,629
Per Share Data:
Basic
Net income	$	0.16		$	0.17
Diluted
Net income	$	0.16		$	0.16
Other comprehensive income, net of tax:
Defined benefit pension plans:
Recognition of net losses included in net periodic pension costs		247			216
Loss (gain) on cash flow hedging activities		(5	)		140
Foreign currency translation adjustment		(28	)		52
Other comprehensive income		214			408
Comprehensive income	$	2,590		$	2,858
Cash dividends per common share	$	0.1000		$	0.0950

See accompanying notes to consolidated interim financial statements.

2

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value data)

	March 31,
	2019			December 31,
	(Unaudited)			2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,824		$	5,362
Accounts receivable, less allowance for doubtful accounts of $2,004 and $2,042, respectively		63,610			64,017
Accounts receivable - other		1,431			1,744
Inventories*		65,753			67,301
Contract assets		47,359			49,236
Prepaid expenses and other current assets		11,488			9,552
TOTAL CURRENT ASSETS		196,465			197,212
PROPERTY, PLANT AND EQUIPMENT, NET		29,388			28,769
OPERATING LEASE RIGHT-OF-USE ASSETS		4,581			-
OTHER INTANGIBLE ASSETS, NET		65,389			66,312
GOODWILL		33,955			33,961
OTHER ASSETS		9,796			8,832
	$	339,574		$	335,086
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	24,802		$	24,685
Other current liabilities		15,703			14,767
Current portion of long-term debt		15,286			6,000
Current portion of acquisition-related contingent liabilities		941			941
TOTAL CURRENT LIABILITIES		56,732			46,393
LONG-TERM DEBT		101,931			111,522
LONG-TERM PENSION LIABILITY		8,643			8,705
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES		5,622			5,422
OPERATING LEASE LIABILITIES		2,866			-
DEFERRED TAX LIABILITY		7,365			8,475
OTHER LONG-TERM LIABILITIES		4,690			3,648
COMMITMENTS AND CONTINGENCIES (NOTE 5)
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value - authorized 300,000 shares (none issued)		-			-
Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding - 15,229,775 and 15,202,387, respectively.		15			15
Additional paid-in capital		56,536			55,859
Retained earnings		102,945			103,032
Accumulated other comprehensive income (loss), net of tax:
Pensions		(7,426	)		(7,673	)
Cash flow hedges		108			113
Foreign currency translation adjustment		(453	)		(425	)
TOTAL SHAREHOLDERS' EQUITY		151,725			150,921
	$	339,574		$	335,086

* Inventories consist of the following:

	March 31,
	2019		December 31,
	(Unaudited)		2018
Finished goods	$	56,552	$	58,196
Work in process		527		650
Raw materials		8,674		8,455
	$	65,753	$	67,301

See accompanying notes to consolidated interim financial statements.

3

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

THREE MONTHS ENDED MARCH 31, 

(In thousands, except shares and per share data)

												Accumulated
												Other
						Additional						Comprehensive			Total
	Common			Common		Paid-In			Retained			(Loss) Income,			Shareholders’
	Shares			Stock		Capital			Earnings			net of tax			Equity
Balance, January 1, 2018		15,081,947		$	15	$	49,103		$	83,129		$	(7,279	)	$	124,968
ASC 606 adjustment to opening retained earnings										11,245						11,245
Common shares issued upon exercise of options, net		33,045					383			(126	)					257
Restricted shares issued		24,908														-
Common shares issued upon exercise of Stock Appreciation Rights (SARs)		3,428														-
Share-based compensation expense							1,052									1,052
Tax withheld on exercise of Stock Appreciation Rights (SARs)							(17	)								(17	)
Tax benefit from vesting of acquisition related restricted stock							105									105
Cash dividends declared ($.095 per share)										(1,402	)					(1,402	)
Comprehensive Income (Loss):
Net earnings										2,450						2,450
Net change during the period related to:
Cash flow hedges, net of taxes of $45													140			140
Pensions, net of taxes of $68													216			216
Change in currency translation adjustment, net of taxes of $9													52			52
Comprehensive Income:																2,858
Balance, March 31, 2018		15,143,328			15	$	50,626		$	95,296		$	(6,871	)	$	139,066
Balance, January 1, 2019		15,202,387		$	15	$	55,859		$	103,032		$	(7,985	)	$	150,921
Common shares issued upon exercise of options		44,161					369			(159	)					210
Restricted shares issued		38,829														-
Share-based compensation expense							481									481
Tax benefit from vesting of acquisition related restricted stock							30									30
Cash dividends declared ($ .10 per share)										(1,515	)					(1,515	)
Common stock reacquired and retired		(55,602	)				(203	)		(789	)					(992	)
Comprehensive Income (Loss):
Net earnings										2,376						2,376
Net change during the period related to:
Cash flow hedges, net of taxes of $1													(5	)		(5	)
Pensions, net of taxes of $78													247			247
Change in currency translation adjustment, net of taxes of $5													(28	)		(28	)
Comprehensive Income:																2,590
Balance, March 31, 2019		15,229,775		$	15	$	56,536		$	102,945		$	(7,771	)	$	151,725

See accompanying notes to consolidated interim financial statements.

4

SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,

(Unaudited)

(In thousands)

	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,376		$	2,450
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		2,060			1,626
Provision for bad debts - accounts receivable		138			157
Share-based compensation expense		481			1,052
Deferred income tax benefit (provision)		(1,182	)		162
Gain on sale of property, plant and equipment		(3	)		-
Change in fair value of acquisition-related contingent liabilities		201			209
Changes in assets and liabilities:
Accounts receivable - trade		309			2,147
Accounts receivable - other		312			(259	)
Contract assets		1,876			(3,780	)
Inventories		1,522			3,742
Prepaid expenses and other current assets		(2,197	)		27
Other assets		(1,503	)		(1,564	)
Accounts payable and other current liabilities		(12	)		(7,132	)
Long-term pension liability		262			97
Other long-term liabilities		1,099			450
Net cash provided by (used in) operating activities		5,739			(616	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(1,723	)		(1,055	)
Proceeds from disposals of property, plant and equipment		3			-
Net cash used in investing activities		(1,720	)		(1,055	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt		54,856			31,657
Repayment of long-term debt		(55,161	)		(24,642	)
Payment of cash dividends		(1,515	)		(1,402	)
Payment of acquisition-related contingent liability		-			(2,000	)
Proceeds received on exercise of stock options		210			257
Tax benefit from vesting of acquisition-related restricted stock		30			105
Tax withholding on exercise of stock rights		-			(17	)
Common stock reaquired and retired		(992	)		-
Net cash (used in) provided by financing activities		(2,572	)		3,958
Effect of currency exchange rates on cash		15			25
Net increase in cash and cash equivalents		1,462			2,312
Cash and cash equivalents balance, beginning of year		5,362			8,130
Cash and cash equivalents balance, end of period	$	6,824		$	10,442

See accompanying notes to consolidated interim financial statements.

5

Superior Group of Companies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – Summary of Significant Interim Accounting Policies:

a) Basis of presentation

The consolidated interim financial statements include the accounts of Superior Group of Companies, Inc. and its wholly-owned subsidiaries, The Office Gurus, LLC, SUG Holding, Superior Group Holdings, Inc., Fashion Seal Corporation, BAMKO, LLC and CID Resources, Inc.; The Office Gurus, Ltda, de C.V., The Office Masters, Ltda., de C.V. and The Office Gurus, Ltd., each a subsidiary of Fashion Seal Corporation and SUG Holding; and Power Three Web, Ltda. and Superior Sourcing, each a wholly-owned subsidiary of SUG Holding; BAMKO Importação, Exportação e Comércio de Brindes Ltda., a subsidiary of BAMKO, LLC and SUG Holding; Guangzhou Ben Gao Trading Limited, Worldwide Sourcing Solutions Limited, and BAMKO UK, Limited, each a direct or indirect subsidiary of BAMKO, LLC; and BAMKO India Private Limited, a 99%-owned subsidiary of BAMKO, LLC.  All of these entities are referred to collectively as “the Company”, “Superior”, “we”, “our”, or “us”. Effective May 3, 2018, Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc.  Intercompany items have been eliminated in consolidation.  The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and filed with the Securities and Exchange Commission.  The interim financial information contained herein is not certified or audited; it reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the operating results for the periods presented, stated on a basis consistent with that of the audited financial statements.  The results of operations for any interim period are not necessarily indicative of results to be expected for the full year.

b) Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.

c) Revenue recognition

Effective January, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively ASC 606) using the modified retrospective method to all contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1 2018 are presented under ASC 606 while comparative information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company recorded a net change in beginning retained earnings of $11.2 million as of January 1, 2018 due to the cumulative effect of adopting ASC 606.

Revenue for our Uniforms and Related Products and Promotional Products segments is recognized when the earnings process is complete. For certain contracts with customers in which the Company has an enforceable right to payment for goods with no alternative use we have moved from a point in time model to an over time model in which we recognize revenue upon receipt of finished goods into inventory. Contract termination terms may involve variable consideration clauses such as discounts and rebates, and revenue has been adjusted accordingly for these provisions. Revenue for goods that do have an alternative use and/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. Revenue is measured as the amount of consideration we expect to receive in exchange for the goods. Sales taxes, sales discounts and customer rebates are also excluded from revenue. The new standard has no cash impact and does not affect the economics of our underlying customer contracts.

Compared to the respective prior year quarter, the impact of adoption of ASC 606 was a $1.8 million reduction in revenues for the three months ended March 31, 2019, and a $3.8 million increase in revenues for the three months ended March 31, 2018. 

6

The impact of adoption of ASC 606 on our consolidated balance sheet and statement of comprehensive income as of March 31, 2019 is as follows (in thousands):

Balance Sheet
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Assets:
Contract assets	$	47,359	$	-	$	47,359
Inventory		65,753		93,512		(27,759	)
Liabilities:
Accounts payable	$	24,802	$	22,008	$	2,794
Other current liabilites		15,703		12,811		2,892
Deferred tax liability		7,365		5,441		1,924

In accordance with ASC 606, the Company has recognized contract assets of $47.3 million as of March 31, 2019 for 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. 

Statement of Comprehensive Income
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Net sales	$	86,552	$	88,346	$	(1,794	)
Cost of goods sold		56,284		57,117		(833	)
Selling and administrative expenses		25,863		25,822		41

The cost of goods sold associated with our ASC 606 adjustment include the cost of the garments, alterations (if applicable) and shipping costs. Selling and administrative expenses consist of sales commissions.

Revenue from our Remote Staffing segment is recognized as services are delivered.

d) Amortization of other intangible assets

The Company amortizes identifiable intangible assets on a straight line basis over their expected useful lives. Amortization expense for other intangible assets was $1.0 million and $0.8 million for the three-month periods ended March 31, 2019 and 2018, respectively.

e) Cost of goods sold and shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with out-bound freight are generally recorded in cost of goods sold. Other shipping and handling costs such as labor and overhead are included in selling and administrative expenses and totaled $3.4 million and $2.7 million for the three-month periods ended March 31, 2019 and 2018, respectively.

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f) Inventories

Inventories are stated at the lower of cost (first-in, first-out method or average cost) or net realizable value. Judgments and estimates are used in determining the likelihood that goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

g) Accounting for income taxes

The provision for income taxes is calculated by using the effective tax rate anticipated for the full year.

h) Employee benefit plan settlements

The Company recognizes settlement gains and losses in its financial statements when the cost of all settlements in a year is greater than the sum of the service cost and interest cost components of net periodic pension cost for the plan for the year.

i) Earnings per share

Historical basic per share data is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options, stock-settled appreciation rights, restricted stock, and performance shares.

j) Derivative financial instruments

The Company uses certain financial derivatives to mitigate its exposure to volatility in interest rates and foreign currency. The Company records derivatives on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships. On the date a derivative contract is entered into, the Company may elect to designate the derivative as a fair value hedge, a cash flow hedge, or the hedge of a net investment in a foreign operation. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative that is used in the hedging transaction is highly effective. For those instruments that are designated as a cash flow hedge and meet certain documentary and analytical requirements to qualify for hedge accounting treatment, changes in the fair value for the effective portion are reported in other comprehensive income (“OCI”), net of related income tax effects, and are reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, or management determines that designation of the derivative as a hedging instrument is no longer appropriate. In situations in which the Company does not elect hedge accounting or hedge accounting is discontinued and the derivative is retained, the Company carries or continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value through earnings.

The nature of the Company’s business activities involves the management of various financial and market risks, including those related to changes in interest rates and foreign currency. The Company does not enter into derivative instruments for speculative purposes. The Company manages market and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree of risk that may be undertaken, and by entering into transactions with high-quality counterparties.           

Effective March 3, 2017, in order to reduce the interest rate risk on its future debt, the Company entered into an interest rate swap agreement that was designed to effectively convert or hedge the variable interest rate on a portion of its future borrowings to achieve a net fixed rate beginning March 1, 2018 with a notional amount of $18.0 million. On May 2, 2018, in conjunction with the Amended and Restated Credit Agreement, the original swap was modified (“amended swap”) to achieve a net fixed rate of 3.05% per annum effective May 1, 2018 and the remaining notional amount was $17.5 million. As a result of the change, the Company has discontinued hedge accounting for the original swap and has elected not to designate the amended swap. Changes to the fair value of the amended swap are recorded as interest expense. 

k) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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l) Comprehensive income

Other comprehensive income (loss) is defined as the change in equity during a period, from transactions and other events, excluding changes resulting from investments by owners (e.g., supplemental stock offering) and distributions to owners (e.g., dividends). Components of comprehensive income include changes in foreign currency translation adjustments (net of tax), pension plan adjustments (net of tax), and changes in the fair value of cash flow hedges (net of tax).

m) Operating segments

The Financial Accounting Standards Board (“FASB”) establishes standards for the way that public companies report information about operating segments in annual financial statements and establishes standards for related disclosures about product and services, geographic areas and major customers. The Company has reviewed the standard and determined that it has three reportable segments, Uniforms and Related Products, Remote Staffing Solutions and Promotional Products.

n) Share-based compensation

The Company awards share-based compensation as an incentive for employees to contribute to the Company’s long-term success. The Company grants options, stock-settled stock appreciation rights, restricted stock, and performance shares. At March 31, 2019, the Company had 3,308,588 shares of common stock available for grant of awards of share-based compensation under its 2013 Incentive Stock and Awards Plan.

The Company recognizes share-based compensation expense, either at the date of grant or over a subsequent vesting period, which is based on the fair value of the award on the date of grant. Determining the appropriate fair value model and calculating the fair value of stock compensation awards requires the input of certain highly complex and subjective assumptions, including the expected life of the stock compensation awards and the Company’s common stock price volatility, risk free interest rate and dividend rate. The assumptions used in calculating the fair value of stock compensation awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company deems it necessary to use different assumptions, stock compensation expense could be materially different from what has been recorded in the current period.

o) Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) and July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Targeted Improvements (collectively “Topic 842”). Topic 842 establishes a new lease model, referred to as the right-of-use (ROU) model that brings substantially all leases on the balance sheet. This standard requires lessees to recognize leased assets (ROU Assets) and lease liabilities on the balance sheet and disclose key information about the leasing arrangements in their financial statements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted Topic 842 effective January 1, 2019 using the modified retrospective transition approach that allows a reporting entity to use the effective date as its date of initial application and not restate the comparative periods in the period of adoption when transitioning to the new standard. Consequently, the requisite financial information and disclosures under the new standard are excluded for dates and periods prior to January 1, 2019. In addition, the Company elected to use a number of optional simplification and practical expedients (reliefs) permitted under the transition guidance within the new standard, including allowing the Company to combine fixed lease and non-lease components, apply the short-term lease exception to all leases of one year or less, and utilize the ‘package of practical expedients’, which permits the Company to not reassess prior accounting conclusions with respect to lease identification, lease classification and initial direct costs under Topic 842. The Company did not elect the use-of hindsight or the practical expedient pertaining to land easement; the latter not being applicable to the Company. Adoption of this new standard resulted in the recognition of $4.1 million of operating lease obligation liabilities ($1 million in other current liabilities and $3.1 million in operating lease liability) which represents the present value of the remaining lease payments of $4.6 million, discounted using the Company’s lease discount rate of 5.74% and $4.9 million of operating lease right-of-use assets, which represents the lease liability of $4.1 million adjusted for prepaid rent to $0.8 million that was previously presented within current prepaid expense and other current assets and other assets on the accompanying condensed consolidated balance sheet prior to adoption. Refer to Note 10 for the impact to the financial statements as of March 31, 2019.

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In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on the consolidated condensed financial statements.

In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows entities to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) on items within accumulated other comprehensive income to retained earnings and requires additional related disclosures. This standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, however, early adoption is permitted. The Company’s adoption of this standard on January 1, 2019 did not have a material impact on its consolidated financial statements.

No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the consolidated financial statements of Superior Group of Companies, Inc. and Subsidiaries.

NOTE 2 - Long-Term Debt:
	March 31,		December 31,
(In thousands)	2019		2018
Note payable to BB&T, pursuant to revolving credit agreement, maturing May 2023	$	24,126	$	1,193
Term loan payable to BB&T maturing January 22, 2026		63,452		-
Term loan payable to BB&T maturing February 26, 2024		30,000		31,500
Term loan payable to BB&T maturing May 2020		-		85,000
	$	117,578	$	117,693
Less:
Payments due within one year included in current liabilities		15,286		6,000
Debt issuance costs		361		171
Long-term debt less current maturities	$	101,931	$	111,522

Effective February 28, 2017, the Company entered into a 7-year credit agreement with BB&T (the “Credit Agreement”) that provided a revolving credit facility of $35 million which was to terminate on February 25, 2022, and provided a term loan of $42 million, which matures on February 26, 2024. Both loans were based upon the one-month LIBOR rate for U.S. dollar based borrowings. Interest was payable for each loan at LIBOR (rounded up to the next 1/100^th of 1%) plus 0.75%. The Company pays a commitment fee of 0.10% per annum on the average unused portion of the commitment under the credit facility.

Effective May 2, 2018, and concurrently with the closing of the CID Resources acquisition, the Company entered into an Amended and Restated Credit Agreement, dated as of May 2, 2018 (the “Amended and Restated Credit Agreement”), with BB&T pursuant to which the Company’s existing revolving credit facility was increased from $35 million to $75 million and which provided an additional term loan in the principal amount of $85 million. No principal payments were due on the $85 million term loan prior to its maturity. The term of the revolving credit facility was extended until May 2023 and the $85 million term loan was to mature in May 2020. The Company’s existing term loan with the original principal amount of $42 million remains outstanding with a maturity date of February 2024 and with the same amortization schedule. The scheduled amortization for the $42 million term loan is as follows: 2019 through 2023 - $6.0 million per year; and 2024 - $1.5 million.

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Obligations outstanding under the revolving credit facility and the $42 million term loan generally have a variable interest rate of one-month LIBOR plus 0.68% (3.17% at March 31, 2019). The available balance under the revolving credit facility is reduced by outstanding letters of credit. As of March 31, 2019, there were no outstanding letters of credit. The term loans do not contain pre-payment penalties.

On January 22, 2019, the Company entered into a First Amendment to the Amended and Restated Credit Agreement pursuant to which the existing $85 million term loan was restructured. The Company used $20 million borrowed under its existing revolving credit facility to reduce the principal amount to $65 million. The maturity date on the loan was extended to January 22, 2026 and the interest rate was lowered to a variable interest rate of LIBOR plus 0.85% (3.34% at March 31, 2019). The scheduled amortization for the $65 million term loan is as follows: 2019 - $8.5 million, 2020 through 2025 - $9.3 million per year; and 2026 - $0.8 million. The revolving credit facility, $42 million term loan and $65 million term loan are collectively referred to as the “Credit Facilities”.

The Amended and Restated Credit Agreement, as amended, contains customary events of default and negative covenants, including but not limited to those governing indebtedness, liens, fundamental changes, investments, restricted payments, and sales of assets. The Amended and Restated Credit Agreement, as amended, also requires the Company to maintain a fixed charge coverage ratio of at least 1.25:1 and a funded debt to EBITDA ratio not to exceed 4.0:1. As of March 31, 2019, the Company was in compliance with these ratios. The Credit Facilities are secured by substantially all of the operating assets of the Company as collateral, and the Company’s obligations under the Credit Facilities are guaranteed by all of its domestic subsidiaries. The Company’s obligations under the Credit Facilities are subject to acceleration upon the occurrence of an event of default as defined in the Amended and Restated Credit Agreement, as amended.

Effective March 3, 2017, in order to reduce the interest rate risk on its future debt, the Company entered into an interest rate swap agreement (“original swap”) with BB&T that was designed to effectively convert or hedge the variable interest rate on a portion of its future borrowings to achieve a net fixed rate of 3.12% per annum, beginning March 1, 2018 with a notional amount of $18.0 million. The notional amount of the interest rate swap is reduced by $0.3 million per month beginning April 1, 2018 through February 26, 2024. Under the terms of the interest rate swap, the Company will receive variable interest rate payments and make fixed interest rate payments on an amount equal to the notional amount at that time. Changes in the fair value of the interest rate swap designated as the hedging instrument that effectively offset the variability of cash flows associated with the variable rate, long-term debt obligation were recorded in OCI, net of related income tax effects. On May 2, 2018, in conjunction with the Amended and Restated Credit Agreement, the original swap was modified (“amended swap”) to achieve a net fixed rate of 3.05% per annum effective May 1, 2018 and the remaining notional amount was $17.5 million. There were no other changes to the original swap. As a result of the change, the Company has discontinued hedge accounting for the original swap and has elected not to designate the amended swap. As of May 2, 2018, the fair value of the original swap was $0.1 million and is being amortized as interest expense over the remaining life of the amended swap. Changes to the fair value of the amended swap are recorded as interest expense. As of March 31 2019, the negative fair value of the amended swap was $0.1 million and was included in other current liabilities. 

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NOTE 3 – Periodic Pension Expense:

The following table details the net periodic pension expense under the Company's  plans for the three-month periods ended March 31:

(In thousands)

	2019			2018
Service cost - benefits earned during the period	$	29		$	27
Interest cost on projected benefit obligation		271			242
Expected return on plan assets		(337	)		(429	)
Recognized actuarial loss		325			283
Net periodic pension cost	$	288		$	123

The service cost component is included in selling and administrative expenses and the other components are included in other periodic pension costs in our consolidated statements of comprehensive income.

Effective June 30, 2013, the Company no longer accrues additional benefits for future service or for future increases in compensation levels for the Company’s primary defined benefit pension plan.

Effective December 31, 2014, the Company no longer accrues additional benefits for future service for the Company’s hourly defined benefit plan.

There were $0.1 million in contributions made to the Company’s defined benefit plans during the three-month periods ended March 31, 2019 and 2018, respectively.

NOTE 4 - Supplemental Cash Flow Information:

Cash paid for income taxes was $0.2 million and $0.4 million, respectively, for the three-month periods ended March 31, 2019 and 2018. Cash paid for interest was $1.0 million and $0.2 million, respectively for the three-month periods ended March 31, 2019 and 2018.

During the three months ended March 31, 2019 and 2018, respectively, the Company received 11,183 and 5,863 shares of its common stock as payment of the exercise price in the exercise of stock options for 27,172 and 20,234 shares.

As a result of the adoption of ASC 606 the following amounts were recorded on January 1, 2018: $43.3 million in contract assets, a reduction in inventory of $24.9 million, an increase in accounts payable of $2.6 million, an increase in other current liabilities of $1.1 million, and an increase in deferred tax liabilities of $3.5 million.

As a result of the adoption of ASC 842 the following amounts were recorded on January 1, 2019: a $4.9 million operating lease right-of-use asset; a decrease in prepaid expenses and other current assets of $0.1 million; a reduction in other assets of $0.7 million; an increase in other current liabilities of $1.0 million; and an operating lease liability of $3.1 million.

NOTE 5 – Contingencies: 

The Company is involved in various legal actions and claims arising from the normal course of business. In the opinion of management, the ultimate outcome of these matters will not have a material impact on the Company’s results of operations, cash flows, or financial position.

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NOTE 6 – Share-Based Compensation:

In 2003, the stockholders of the Company approved the 2003 Incentive Stock and Awards Plan (the “2003 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights (“SARS”), restricted stock, performance shares and other stock based compensation. This plan expired in May of 2013, at which time, the stockholders of the Company approved the 2013 Incentive Stock and Awards Plan (the “2013 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, SARS, restricted stock, performance shares and other stock based compensation. A total of 5,000,000 shares of common stock (subject to adjustment for expirations and cancellations of options outstanding from the 2003 Plan subsequent to its termination) have been reserved for issuance under the 2013 Plan. All options and SARS under both plans have been or will be granted with exercise prices at least equal to the fair market value of the shares on the date of grant. At March 31, 2019, the Company had 3,308,588 shares of common stock available for grant of share-based compensation under the 2013 Plan.

Share-based compensation is recorded in selling and administrative expense in the consolidated statements of comprehensive income. The following table details the share-based compensation expense by type of award and the total related tax benefit for the periods presented:

	Three Months Ended March 31,
	(In thousands)
	2019		2018
Stock options and SARS	$	73	$	823
Restricted stock		188		124
Performance shares		220		105
Total share-based compensation expense	$	481	$	1,052
Related income tax benefit	$	58	$	111

Stock options and SARS

The Company grants stock options and stock settled SARS to employees that allow them to purchase shares of the Company’s common stock. Options are also granted to outside members of the Board of Directors of the Company. The Company determines the fair value of stock options and SARS at the date of grant using the Black-Scholes valuation model.

All options and SARS vest immediately at the date of grant or after a two-year period. Awards generally expire five years after the date of grant with the exception of options granted to outside directors, which expire ten years after the date of grant. The Company issues new shares upon the exercise of stock options and SARS.

A summary of stock option transactions during the three months ended March 31, 2019 follows:

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2018		676,846		$	15.70
Granted		128,259			17.77
Exercised		(55,344	)		7.41
Lapsed		-			-
Cancelled		(17,016	)		19.62
Outstanding March 31, 2019		732,745		$	16.60

At March 31, 2019, 568,498 options outstanding, all of which were fully vested and exercisable and 164,247 nonvested options, had an aggregate intrinsic value of $1.4 million. The weighted-average remaining contractual term was 40 months.

Options exercised during the three-month periods ended March 31, 2019 and 2018 had intrinsic values of $0.6 million and $0.6 million, respectively.

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The weighted average fair values of the Company’s 128,259 and 87,385 options granted during the three-month periods ended March 31, 2019 and 2018 was $3.97 and $6.06, respectively. As of March 31, 2019, the Company had $0.6 million in unrecognized compensation related to nonvested grants to be recognized over the remaining weighted average vesting period of 1.6 years.

During the three-month periods ended March 31, 2019 and 2018, respectively, the Company received $0.2 million and $0.3 million in cash from stock option exercises. Additionally, during the three-month period ended March 31, 2019 and 2018, respectively, the Company received 11,183 and 5,863 shares of its common stock as payment of the exercise price in the exercise of stock options for 27,172 and 20,234 shares. The tax benefit recognized for exercises during the three-month period ended March 31, 2018 was $0.1 million. There were no tax benefits recognized for exercises during the three-month period ended March 31, 2019.

The following table summarizes information about stock options outstanding as of March 31, 2019:

					Weighted Average
Range of					Remaining	Weighted Average
Exercise Price			Shares		Contractual Life (Years)	Exercise Price
$  3.82	-	$  5.88		89,000	2.36	$	5.33
$  7.96	-	$10.38		42,000	3.50	$	8.76
$16.35	-	$18.86		464,474	3.24	$	17.57
$21.63	-	$24.28		137,271	4.10	$	23.03
$  3.82	-	$24.28		732,745	3.31	$	16.60

A summary of stock-settled SARS transactions during the three months ended March 31, 2019 follows:

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2018		182,894		$	18.99
Granted		42,841			17.77
Exercised		-			-
Lapsed		-			-
Cancelled		(3,134	)		21.97
Outstanding March 31, 2019		222,601		$	18.71

At March 31, 2019, 180,633 SARS outstanding, all of which were fully vested and exercisable and 41,968 nonvested options, had an aggregate intrinsic value of $0.1 million. The weighted-average remaining contractual term was 34 months.

The weighted average fair values of the Company’s 42,841 and 48,515 SARS granted during each of the three-month periods ended March 31, 2019 and 2018 was $3.97 and $6.06, respectively. As of March 31, 2019, the Company had $0.2 million in unrecognized compensation related to nonvested grants to be recognized over the remaining weighted average vesting period of 1.8 years.

There were 12,125 SARS exercised during the three-month period ended March 31, 2018. SARS exercised during the three-month period ended March 31, 2018 had an intrinsic value of $0.1 million. The tax benefit recognized for this exercise during the three-month period ended March 31, 2018 was $0.1 million. There were no SARS exercised during the three-month period ended March 31, 2019.

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The following table summarizes information about SARS outstanding as of March 31, 2019:

					Weighted Average
Range of					Remaining		Weighted Average
Exercise Price			Shares		Contractual Life (Years)		Exercise Price
$16.35	-	$18.66		176,347		2.54	$	17.43
$23.59	-	$23.59		46,254		3.83	$	23.59
$16.35	-	$23.59		222,601		2.81	$	18.71

Options and SARS have never been repriced by the Company in any year.

The following table summarizes significant assumptions utilized to determine the fair value of options and SARS.

Three months ended
March 31,	SARS		Options
Exercise price
2019	$	17.77	$	17.77
2018	$	23.59	$	23.59
Market price
2019	$	17.77	$	17.77
2018	$	23.59	$	23.59
Risk free interest rate1
2019		2.4%		2.4%
2018		2.6%		2.6%
Expected award life (years)2
2019		3		3
2018		3		3
Expected volatility3
2019		34.8%		34.8%
2018		38.1%		38.1%
Expected dividend yield4
2019		2.3%		2.3%
2018		1.6%		1.6%

¹The risk-free interest rate is based on the yield of a U.S. treasury bond with a similar maturity as the expected life of the awards.

²The expected life in years for awards granted was based on the historical exercise patterns experienced by the Company when the award is made.

³The determination of expected stock price volatility for awards granted in each of the periods ending March 31, 2019 and 2018 were based on historical Superior common stock prices over a period commensurate with the expected life.

⁴The dividend yield assumption is based on the history and expectation of the Company’s dividend payouts.

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Restricted Stock

The Company has granted restricted stock to directors and certain employees under the terms of the 2013 Plan which vest at a specified future date, generally after three years, or when certain conditions are met. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 Plan. Expense for each of these grants is based on the fair value at the date of the grant and is being recognized on a straight-line basis over the respective service period. As of March 31, 2019, the Company had $1.5 million of unrecognized compensation cost related to nonvested grants expected to be recognized over the weighted average service period of 1.83 years.

A summary of restricted stock transactions during the three months ended March 31, 2019 follows:

			Weighted Average
	No. of		Grant Date
	Shares		Fair Value
Outstanding December 31, 2018		92,032	$	19.46
Granted		38,829		17.77
Vested		-		-
Forfeited		-		-
Outstanding March 31, 2019		130,861	$	18.96

Performance Shares

In the quarter ended March 31, 2019, the Compensation Committee of the Board of Directors approved grants of performance shares under the terms of the 2013 Plan. Under the terms of the grants, certain employees received service-based or service-based and performance-based shares. The service-based awards vest after the service period is met, which is generally three to five years. Expense for these grants is based on the fair value on the date of the grant and is being recognized on a straight-line basis over the respective service period. The performance-based shares generally vest after five years if the performance and service targets are met. The Company evaluates the performance conditions associated with these grants each reporting period to determine the expected number of shares to be issued. Based upon this evaluation, expected expenses for these grants are based on the fair value on the date of the grant are being recognized on a straight-line basis over the respective service period. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 Plan. As of March 31, 2019, the Company had $2.7 million of unrecognized compensation cost related to nonvested grants expected to be recognized over the weighted average service period of 2.6 years.

A summary of performance share transactions during the three months ended March 31, 2019 follows:

				Weighted Average
	No. of			Grant Date
	Shares			Fair Value
Outstanding December 31, 2018		194,378		$	20.08
Granted		14,068			17.77
Vested		-			-
Forfeited		(1,000	)		17.75
Outstanding March 31, 2019		207,446		$	19.93

NOTE 7 – Income Taxes:

The Company calculates its interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, the Company makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date income or loss. The tax expense or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.

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In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the attainment of beginning-of-the-year deferred taxes in future years is recognized in the interim period in which the change occurs.

The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year and permanent and temporary differences. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

For the three months ended March 31, 2019, the Company recorded a provision for income taxes of $0.6 million, which represents an effective tax rates of 20.2%. For the three months ended March 31, 2018, the Company recorded a provision for income taxes of $0.9 million, which represents an effective tax rates of 26.2%. The decrease in the effective tax rates is primarily due to the expected annual increase in excludable foreign income, and an expected annual reduction in non-deductible compensation.

The difference between the total statutory Federal income tax rate and the actual effective income tax rate is accounted for as follows:

	Three Months Ended March 31,
	2019			2018
Statutory Federal income tax rate		21.0	%		21.0	%
State and local income taxes, net of Federal income tax benefit		3.0	%		3.6	%
Current year untaxed foreign income		(7.6	%)		(6.5	%)
Foreign taxes		2.3	%		4.6	%
GILTI tax		1.8	%		3.0	%
Compensation related		0.6	%		1.1	%
Federal tax credits		(0.5	%)		(0.6	%)
Other		(0.4	%)		0.0	%
Effective income tax rate		20.2	%		26.2	%

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NOTE 8 – Earnings Per Share:

Historical basic per share data is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options, stock appreciation rights, unvested shares of restricted stock and performance shares.

	Three Months Ended March 31,
	2019		2018
Net earnings used in the computation of basic and diluted earnings per share (in thousands)	$	2,376	$	2,450
Weighted average shares outstanding - basic		14,927,341		14,821,659
Common stock equivalents		335,313		635,970
Weighted average shares outstanding - diluted		15,262,654		15,457,629
Per Share Data:
Basic
Net earnings	$	0.16	$	0.17
Diluted
Net earnings	$	0.16	$	0.16

Awards to purchase approximately 341,995 shares of common stock with a weighted average exercise price of $20.99 per share were outstanding during the three-month period ending March 31, 2019, but were not included in the computation of diluted EPS because the awards’ exercise prices were greater than the average market price of the common shares.

There were no awards to purchase shares of common stock outstanding during the three-month period ending March 31, 2018 excluded from the computation of diluted EPS because the award’s exercise prices were greater than the average market price of the common shares.

NOTE 9 – Operating Segment Information:

The Company classifies its businesses into three operating segments based on the types of products and services provided. The Uniforms and Related Products segment consists of the sale of uniforms and related items. The Remote Staffing Solutions segment consists of sales of staffing solutions. The Promotional Products segment consists of sales to customers of promotional products and other branded merchandise.

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The Company evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment net sales and income before taxes on income. The accounting policies of the operating segments are the same as those described in Note 1 entitled Summary of Significant Interim Accounting Policies. Amounts for corporate expenses are included in the totals for the Uniforms and Related Products segment. Information related to the operations of the Company's operating segments is set forth below.

(In thousands)
	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products		Intersegment Eliminations			Total
As of and For the Three Months Ended
March 31, 2019
Net sales	$	58,679	$	8,599	$	20,359	$	(1,085	)	$	86,552
Gross margin	$	20,318	$	5,039	$	5,626	$	(715	)	$	30,268
Selling and administrative expenses		18,177		3,119		5,282		(715	)		25,863
Other periodic pension cost		259		-		-		-			259
Interest expense		878		-		292		-			1,170
Income before taxes on income	$	1,004	$	1,920	$	52	$	-		$	2,976
Depreciation and amortization	$	1,488	$	256	$	316	$	-		$	2,060
Capital expenditures	$	1,158	$	409	$	156	$	-		$	1,723
Total assets	$	268,227	$	31,794	$	62,698	$	(23,145	)	$	339,574

	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products			Intersegment Eliminations			Total
As of and For the Three Months Ended
March 31, 2018
Net sales	$	48,125	$	7,299	$	18,676		$	(1,013	)	$	73,087
Gross margin	$	16,536	$	4,161	$	4,849		$	(671	)	$	24,875
Selling and administrative expenses		14,140		2,512		5,201			(671	)		21,182
Other periodic pension cost		96		-		-			-			96
Interest expense		60		-		217			-			277
Income (loss) before taxes on income	$	2,240	$	1,649	$	(569	)	$	-		$	3,320
Depreciation and amortization	$	1,065	$	237	$	324		$	-		$	1,626
Capital expenditures	$	685	$	265	$	105		$	-		$	1,055
Total assets	$	216,536	$	24,296	$	57,080		$	(62,833	)	$	235,079

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NOTE 10 – Leases

The Company leases several of its operating and office facilities including warehouses, call centers, office space and equipment for various terms under long-term, non-cancelable operating lease agreements. These leases generally have expected lease terms at adoption of one to eight years. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. Certain of the lease agreements include rental payments adjusted periodically for inflation and generally require the Company to pay real estate taxes, insurance, and repairs. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. The Company subleases certain office space to third parties. As of March 31, 2019 the Company had recognized $3.9 million of operating lease obligation ($1 million in other current liabilities and $2.9 million in operating lease liabilities) which represents the present value of the remaining lease payment of $4.3 million discounted using the Company’s lease discount rate of 5.74%; and, $4.6 million of operating right-of-use assets, which represents the lease liability of $3.9 million adjusted for the prepaid rent of $0.7 million that was previously presented within prepaid expenses and other current assets and other assets on the accompanying condensed consolidated balance sheet prior to the adoption. The depreciable-life of right-of-use assets is generally limited by the expected lease term.

Information about the Company’s total lease cost, cash flows, weighted-average remaining lease terms, discount rate assumptions and other quantitative information for operating leases are as follows (dollars in thousands):

	March 31,
	2019
Lease costs:
Operating lease costs	$	325
Short-term lease costs		108
Total lease costs, included in SG&A		433
Operating cash-flows from operating leases	$	292
Weighted-average remaining lease term (in years)		3
Weighted average discount rate - operating leases		5.74	%

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SUPERIOR GROUP OF COMPANIES, INC. AND SUBSIDIARIES

(In thousands, except lease term and discount rate)

Maturities of lease liabilities as of March 31 were as follows:
	Operating
	Leases
2019 (nine months)	$	890
2020		1,130
2021		797
2022		784
2023		634
Thereafter		108
Total lease payments	$	4,343
Less imputed interest		476
Total	$	3,867

NOTE 11 – Acquisition of Businesses:

CID Resources

On May 2, 2018, the Company acquired CID Resources, Inc., a Delaware corporation (“CID”), which manufactures medical uniforms, lab coats, and layers, and sells its products to specialty uniform retailers, ecommerce medical uniform retailers, and other retailers.

The purchase price in the acquisition consisted of the following: (a) approximately $84.4 million in cash, subject to adjustment for cash on hand, indebtedness, unpaid Seller expenses and working capital (excluding cash), in each case as of the closing date, and (b) the issuance of 150,094 shares of the Company’s common stock to an equityholder of CID. The working capital adjustment was based on the difference between working capital as of the closing date and a target amount of approximately $39.5 million.

Fair Value of Consideration Transferred

A summary of the purchase price is as follows (in thousands):
Cash consideration at closing	$	84,430
Superior common stock issued		3,763
Cash and working capital adjustment		2,521
Total Consideration	$	90,714

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the tangible and intangible assets and liabilities of CID based on their estimated fair values as of May 2, 2018. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

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The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and liabilities of CID based on their estimated fair values as of the effective date of the transaction.

The assets and liabilities of CID shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determination may be different than those shown below.

The following is our preliminary assignment of the aggregate consideration (in thousands):

Cash	$	1,360
Accounts receivable		9,657
Prepaid expenses and other current assets		1,248
Inventories		30,692
Property, plant and equipment		1,134
Contract assets		2,535
Identifiable intangible assets		41,020
Goodwill		17,968
Total assets	$	105,614
Accounts payable		4,472
Deferred tax liability		9,461
Other current liabilities		967
Total liabilities	$	14,900

The Company recorded $41.0 million in identifiable intangibles at fair value, consisting of $26.0 million in acquired customer relationships, $0.8 million for a non-compete agreement and $14.2 million for the brand name.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed. This goodwill will not be deductible for tax purposes.

The intangible assets associated with the customer relationships are being amortized for fifteen years beginning on May 2, 2018 and the non-compete agreement is being amortized for five years. The trade name is considered an indefinite-life asset and as such is not being amortized.

The Company recognized amortization expense on these acquired intangible assets of $0.5 million for the three-month period ended March 31, 2019.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the three months ended March 31, 2018, net sales would have increased approximately $19.2 million. Net income would have increased $2.0 million in 2018, or $0.13 per share.

BAMKO

On March 8, 2016, the Company closed on the acquisition of substantially all of the assets of BAMKO, Inc. The transaction had an effective date of March 1, 2016. The purchase price for the asset acquisition consisted of approximately $15.2 million in cash, net of cash acquired, the issuance of approximately 324,000 restricted shares of Superior’s common stock that vests over a five-year period, potential future payment of approximately $5.5 million in additional contingent consideration through 2021, and the assumption of certain liabilities of BAMKO, Inc.  The transaction also included the acquisition of BAMKO, Inc.’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India.

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The estimated fair value for acquisition-related contingent consideration payable was $4.1 million as of March 31, 2019. The current portion of $0.9 million shall be paid in the second quarter of 2019. The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company’s consolidated statement of comprehensive income. Based on the acquisition date fair values, we have recorded $11.4 million in identifiable intangibles, consisting of $2.1 million in acquired customer relationships, $0.4 million in non-compete agreements from the former owners of BAMKO, Inc., and $8.9 million for the acquired trade name. The intangible assets associated with the customer relationships are being amortized for seven years beginning on March 1, 2016 and the non-compete agreements are being amortized for five years and ten months. The trade name is considered an indefinite-life asset and as such will not be amortized.

Public Identity

On August 21, 2017, BAMKO acquired substantially all of the assets and assumed certain liabilities of PublicIdentity, Inc. (“Public Identity”) of Los Angeles, CA. Public Identity is a promotional products and branded merchandise agency that provides innovative, high quality merchandise and promotional products to corporate clients and universities across the country.

The purchase price for the acquisition consisted of $0.8 million in cash, the issuance of approximately 54,000 restricted shares of Superior’s common stock and future payments of approximately $0.4 million in additional consideration through 2020. The majority of the shares issued vest over a three-year period. The fair value of the consideration transferred is approximately $2.3 million. Based up on their acquisition date fair values, we have assigned approximately $1.7 million to identifiable intangible assets and approximately $0.6 million to goodwill.

Tangerine Promotions

On November 30, 2017, BAMKO acquired substantially all of the assets of Tangerine Promotions, Ltd and Tangerine Promotions West, Inc (collectively “Tangerine”). The transaction had an effective date of December 1, 2017. Tangerine is a promotional products and branded merchandise agency that serves many well-known brands. The company is one of the leading providers of Point-of-Purchase (POP) and Point-of-Sale (POS) merchandise in the country. The purchase price for the asset acquisition consisted of approximately $7.2 million in cash, subject to adjustment, the issuance of approximately 83,000 restricted shares of Superior’s common stock that vests over a four-year period, the potential future payments of approximately $3.2 million in additional contingent consideration through 2021, and the assumption of certain liabilities.

Fair Value of Consideration Transferred

A Summary of the purchase price is as follows (in thousands):
Cash consideration at closing	$	7,222
Restricted shares of Superior common stock issued		1,657
Contingent consideration		3,209
Total Considerations	$	12,088

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of December 1, 2017. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of the effective date of the transaction.

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The following is our assignment of the aggregate consideration (in thousands):

Accounts receivable	$	5,051
Prepaid expenses and other current assets		969
Property, plant and equipment		131
Identifiable intangible assets		6,495
Goodwill		4,169
Total assets	$	16,815
Accounts payables		3,374
Other current liabilities		1,353
Total liabilities	$	4,727

The Company recorded $6.5 million in identifiable intangibles at fair value, consisting of $3.1 million in acquired customer relationships, $0.2 million in non-compete agreements from the former owners of Tangerine, and $3.2 million for the acquired trade name.

The estimated fair value for acquisition-related contingent consideration payable is $2.5 million as of March 31, 2019. The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company’s consolidated statement of comprehensive income.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed.

The intangible assets associated with the customer relationships will be amortized for seven years beginning on December 1, 2017 and the non-compete agreement will be amortized for seven years. The trade name is considered an indefinite-life asset and as such will not be amortized.

The Company recognized amortization expense on these acquired intangible assets of $0.1 million for the three months ended March 31, 2019, and 2018.

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain matters discussed in this Form 10-Q are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by use of the words “may”, “will”, “should”, “could”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “project”, “potential”, or “plan” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements in this Quarterly Report on Form 10-Q may include, without limitation: (1) projections of revenue, income, and other items relating to our financial position and results of operations, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations, and (4) statements of expected industry and general economic trends. Such forward-looking statements are subject to certain risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include, but are not limited to, the following: the impact of competition; general economic conditions, including employment levels, in the areas of the United States in which the Company’s customers are located; changes in the healthcare, industrial, commercial, leisure and public safety industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, successfully integrate any acquired businesses, successfully manage our expanding operations, or discover liabilities associated with such business during the diligence process; the price and availability of cotton and other manufacturing materials; attracting and retaining senior management and key personnel and other factors described in the Company’s filings with the Securities and Exchange Commission, including those described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. 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. The forward-looking statements made herein are only made as of the date of this Form 10-Q and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.

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Critical Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and updated on this Form 10-Q in Note 1 for recently adopted accounting standards. Our management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate the estimates that we have made. These estimates are based upon our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting estimates are those that we believe require our most significant judgments about the effect of matters that are inherently uncertain. A discussion of our critical accounting estimates, the underlying judgments and uncertainties used to make them and the likelihood that materially different estimates would be reported under different conditions or using different assumptions is as follows:

Allowance for Losses on Accounts Receivable

Judgments and estimates are used in determining the collectability of accounts receivable. The Company analyzes specific accounts receivable and historical bad debt experience, customer credit worthiness, current economic trends and the age of outstanding balances when evaluating the adequacy of the allowance for doubtful accounts. Management judgments and estimates are used in connection with establishing the allowance in any accounting period. Changes in estimates are reflected in the period they become known. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. An additional impairment in value of one percent of net accounts receivable would require an increase in the allowance for doubtful accounts and would result in additional expense of approximately $0.6 million. This amount is included in trade accounts receivable on the consolidated balance sheet.

Inventories

Superior’s Uniforms and Related Products segment markets itself to its customers as a “stock house”. Therefore, Superior at all times carries substantial inventories of raw materials (principally piece goods) and finished garments. Inventories are stated at the lower of cost or net realizable value. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required, which may be material.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. The Company tests goodwill for impairment annually as of December 31st and/or when an event occurs or circumstances change such that it is more likely than not that impairment may exist. Examples of such events and circumstances that the Company would consider include the following:

• macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, or other developments in equity and credit markets;

• industry and market considerations such as a deterioration in the environment in which the Company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the Company's products or services, or a regulatory or political development;

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• cost factors such as increases in raw materials, labor, or other costs that have a negative effect on earnings and cash flows;

• overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods;

• other relevant entity-specific events such as changes in management, key personnel, strategy, or customers.

Goodwill is tested at a level of reporting referred to as the “reporting unit." The Company's reporting units are defined as each of its three reporting segments. As of March 31, 2019, goodwill of $22.1 million was included in the Uniforms and Related Products segment and $11.9 million was included in the Promotional Products segment.

An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the impairment test is unnecessary. The Company completed its testing of goodwill as of December 31, 2018 and determined that the fair value of the reporting units was more than its carrying value.

Insurance

The Company self-insures for certain obligations related to health insurance programs. The Company also purchases stop-loss insurance policies to protect itself from catastrophic losses. Judgments and estimates are used in determining the potential value associated with both reported claims and for losses that have occurred, but have not been reported. The Company's estimates consider historical claim experience and other factors. The Company's liabilities are based on estimates, and, while the Company believes that the accrual for loss is adequate, the ultimate liability may be in excess of or less than the amounts recorded. Changes in claim experience, the Company's ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period.

Pensions 

The Company is the sponsor of two noncontributory qualified defined benefit pension plans, providing for normal retirement at age 65, covering all eligible employees (as defined). Periodic benefit payments on retirement are determined based on a fixed amount applied to service or determined as a percentage of earnings prior to retirement. The Company is also the sponsor of an unfunded supplemental executive retirement plan (SERP) in which several of its employees are participants. Pension plan assets for retirement benefits consist primarily of fixed income securities and common stock equities. Effective June 30, 2013, the Company no longer accrues additional benefits for future service or for future increases in compensation levels for the Company’s primary defined benefit pension plan.

The Company’s pension obligations are determined using estimates including those related to discount rates and asset values. The discount rates used for the Company’s pension plans were determined based on the Citigroup Pension Yield Curve.  This rate was selected as the best estimate of the rate at which the benefit obligations could be effectively settled on the measurement date taking into account the nature and duration of the benefit obligations of the plans using high-quality fixed-income investments currently available (rated AA or better) and expected to be available during the period to maturity of the benefits. The 8% expected return on plan assets was determined based on historical long-term investment returns as well as future expectations given target investment asset allocations and current economic conditions.

Income Taxes

The Company is required to estimate and record income taxes payable for federal, state and foreign jurisdictions in which the Company operates. This process involves estimating actual current tax expense and assessing temporary differences resulting from differing accounting treatment between tax and book that result in deferred tax assets and liabilities. In addition, accruals are also estimated for federal and state tax matters for which deductibility is subject to interpretation. Taxes payable and the related deferred tax differences may be impacted by changes to tax laws, changes in tax rates and changes in taxable profits and losses.

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Reserves are also estimated for uncertain tax positions that are currently unresolved. The Company routinely monitors the potential impact of such situations and believes that it is properly reserved. For the three-month periods ended March 31, 2019 and March 31, 2018, total unrecognized tax benefits increased $0.1 million and $0, respectively. As of March 31, 2019, we had an accrued liability of $0.6 million for unrecognized tax benefits. We accrue interest and penalties related to unrecognized tax benefits in income tax expense, and the related liability is included in other long-term liabilities on the accompanying consolidated balance sheet.

Share-based Compensation

The Company recognizes expense for all share-based payments to employees, including grants of employee stock options, in the financial statements based on their fair values. Share-based compensation expense that was recorded in the three-month periods ended March 31, 2019 and 2018 includes the compensation expense for the share-based payments granted in those periods. In the Company’s share-based compensation strategy we utilize a combination of stock options and stock appreciation rights (“SARS”) that either fully vest on the date of grant or vest over time, and restricted stock and performance shares that vest over time or if performance targets are met. The fair value of the options and SARS granted is recognized as expense on the date of grant or over the service period. The Company used the Black-Scholes-Merton valuation model to value any share-based compensation. Option valuation methods, including Black-Scholes-Merton, require the input of highly complex and subjective assumptions including the risk free interest rate, dividend rate, expected term and common stock price volatility rate. The Company determines the assumptions to be used based upon current economic conditions. While different assumptions may result in materially different stock compensation expenses, changing any one of the individual assumptions by 10% would not have a material impact on the recorded expense. Expense for unvested shares of restricted stock and performance shares is recognized over the required service period.

Recent Acquisitions

On August 21, 2017, the Company, through BAMKO, acquired substantially all of the assets of PublicIdentity, Inc. (“Public Identity”). Public Identity is a promotional products and branded merchandise agency that provides promotional products and branded merchandise to corporate clients and universities. The purchase price consisted of $0.8 million in cash, the issuance of approximately 54,000 restricted shares of Superior’s common stock and future payments of approximately $0.4 million in additional consideration through 2020. The majority of the shares issued vest over a three-year period.

On November 30, 2017, BAMKO closed on the acquisition of substantially all of the assets of Tangerine Promotions, Ltd. and Tangerine Promotions West, Inc. (collectively “Tangerine”). The transaction had an effective date of December 1, 2017. Tangerine is a promotional products and branded merchandise agency that serves many well-known brands. The company is one of the leading providers of Point-of-Purchase (POP) and Point-of-Sale (POS) merchandise in the country. The purchase price for the asset acquisition consisted of approximately $7.2 million in cash, subject to adjustment, the issuance of approximately 83,000 restricted shares of Superior’s common stock that vests over a four-year period, the potential future payments of approximately $3.2 million in additional contingent consideration through 2021, and the assumption of certain liabilities of Tangerine.

On May 2, 2018, the Company acquired CID Resources, Inc., a Delaware corporation (“CID”) that manufactures uniforms, lab coats, and layers, and sells its products to specialty uniform retailers, ecommerce medical uniform retailers, and other retailers. The purchase price in the acquisition consisted of the following: (a) approximately $84.4 million in cash, subject to adjustment for cash on hand, indebtedness, unpaid seller expenses and working capital (excluding cash), in each case as of the closing date, and (b) the issuance of 150,094 shares of the Company’s common stock to an equityholder of CID. The working capital adjustment was based on the difference between working capital as of the closing date and a target amount of approximately $39.5 million.

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Business Outlook

Superior is comprised of three reportable business segments: (1) Uniforms and Related Products, (2) Remote Staffing Solutions, and (3) Promotional Products.

Uniforms and Related Products

Historically, we have manufactured and sold a wide range of uniforms, career apparel and accessories, which comprises our Uniforms and Related Products segment. Our primary products are provided to workers employed by our customers and, as a result, our business prospects are dependent upon levels of employment and overall economic conditions, among other factors. Our revenues are impacted by our customers’ opening and closing of locations and reductions and increases in headcount. Additionally, voluntary employee turnover at our customers can have a significant impact on our business. The current economic environment in the United States is continuing to see moderate improvement in the employment environment and voluntary employee turnover has been increasing.  We also continue to see an increase in the demand for employees in the healthcare sector and our acquisition of CID provides us with a market to sell Fashion Seal Healthcare apparel to retail stores and into the digital marketplace. These factors are expected to have positive impacts on our prospects for growth in net sales in 2019.

We have continued our efforts to increase penetration of the health care market. We have been and continue to pursue acquisitions to increase our market share in the Uniforms and Related Products segment.

Remote Staffing Solutions

This business segment, which operates in El Salvador, Belize, Jamaica, and the United States, was initially started to provide remote staffing services for the Company at a lower cost structure in order to improve our own operating results. It has in fact enabled us to reduce our operating expenses in our Uniforms and Related Products segment and to more effectively service our customers’ needs in that segment. We began selling remote staffing services to other companies at the end of 2009. We have grown this business from approximately $1 million in net sales to outside customers in 2010 to approximately $27.3 million in net sales to outside customers in 2018. We have spent significant effort over the last several years improving the depth of our management infrastructure and expanding our facilities in this segment to support significant growth. Net sales to outside customers increased by approximately 17.8% for the three months ended March 31, 2019 compared to the same period last year.

Promotional Products

We have been involved in the sale of promotional products, on a limited basis, to our Uniforms and Related Products customers for over a decade. However, we lacked the scale and expertise needed to be a recognized name in this market prior to our acquisition of substantially all of the assets of BAMKO effective March 1, 2016. BAMKO has been operating in the promotional products industry for more than 16 years and we believe that BAMKO’s strong back office and support systems located in India, China and Hong Kong, as well as their “direct to factory” sourcing operations provide us with a competitive advantage. We believe that BAMKO has well developed systems and processes that can serve as a platform for additional acquisitions that we expect to complete in this highly fragmented market. We completed two additional acquisitions in this segment in late 2017. We believe promotional products are a synergistic fit with our uniform business.

Operations

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Net Sales	Three Months Ended March 31,
	(in thousands)
	2019			2018			% Change
Uniforms and Related Products	$	58,679		$	48,125			21.9	%
Remote Staffing Solutions		8,599			7,299			17.8
Promotional Products		20,359			18,676			9.0
Net intersegment eliminations		(1,085	)		(1,013	)		7.1
Consolidated Net Sales	$	86,552		$	73,087			18.4	%

Net Sales

Net sales for the Company increased 18.4% from $73.1 million for the three months ended March 31, 2018 to $86.6 million for the three months ended March 31, 2019. The principal components of this aggregate increase in net sales were as follows: (1) the effect of the acquisition of CID on May 2, 2018 (contributing 22.0%), (2) a decrease in the net sales of our Uniform and Related Products segment exclusive of CID (contributing 7.6%, of which 6.4% represented the effect of differences in timing of revenues recognized under ASC 606 between periods), (3) an increase in the net sales for our Promotional Products segment (contributing 2.3%), and (4) an increase in net sales for our Remote Staffing Solutions segment (contributing 1.7%). 

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Uniforms and Related Products net sales increased 21.9%, or $10.5 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The increase is primarily due to the CID acquisition, partially offset by a negative $4.8 million effect of differences in the timing of revenues recognized due to ASC 606 between periods. Shipments by our Uniform and Related Products business without the effect of CID, decreased from $45.1 million to $44.1 million comparing the quarter ended March 31, 2019, with the prior year quarter. For a reconciliation of our Uniform and Related Products sales see “-Shipments (Non-GAAP Financial Measure)”.

Remote Staffing Solutions net sales increased 17.8% before intersegment eliminations and 19.5% after intersegment eliminations for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. These increases are attributed to continued market penetration in 2019, with respect to both new and existing customers.

Promotional Products net sales increased 9.0% for the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The increase is primarily due to higher international and domestic sales in 2019.

Cost of Goods Sold

Cost of goods sold consists primarily of direct costs of acquiring inventory, including cost of merchandise, inbound freight charges, purchasing costs, and inspection costs for our Uniforms and Related Products and Promotional Products segments. Cost of goods sold for our Remote Staffing Solutions segment includes salaries and payroll related benefits for agents. The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with out-bound freight are generally recorded in cost of goods sold. Other shipping and handling costs are included in selling and administrative expenses.

As a percentage of net sales, cost of goods sold for our Uniforms and Related Products segment was 65.4% for the three months ended March 31, 2019 and 65.6% for the three months ended March 31, 2018. The change is generally the result of changes in customer and product mix, and higher freight costs. Also, affecting change are the results of CID, which tends to have higher gross margins than our other uniform businesses. Exclusive of the results from CID, our Uniform Segment would have had cost of goods sold as a percentage of net sales of 67.4% for the three months ended March 31, 2019.

As a percentage of net sales, cost of goods sold for our Remote Staffing Solutions segment was 41.4% for the three months ended March 31, 2019 and 43.0% for the three months ended March 31, 2018. The percentage decrease is driven by higher sales in 2019 and lower payroll related costs.

As a percentage of net sales, cost of goods sold for our Promotional Products segment was 72.4% for the three months ended March 31, 2019 and 74.0% for the three months ended March 31, 2018. The decrease is primarily the result of mix of products and customers, with sales to lower margin contract clients representing a smaller percentage of our overall sales in three months ended March 31, 2019.

Selling and Administrative Expenses

As a percentage of net sales, selling and administrative expenses for our Uniforms and Related Products segment approximated 31% for the three months ended March 31, 2019 and 29.4% for the three months ended March 31, 2018. The increase is due to the CID acquisition in May 2018.

As a percentage of net sales, selling and administrative expenses for our Remote Staffing Solutions segment approximated 36.3% for the three months periods ended March 31, 2019 and 34.4% for the three months ended March 31, 2018. The increase is primarily attributed to higher payroll expense.

As a percentage of net sales, selling and administrative expenses for our Promotional Products segment were 25.9% for the three months ended March 31, 2019 and 27.8% for the three months ended March 31, 2018. The decrease is primarily related to lower administrative costs resulting from integration of the segment’s subsidiaries combined with higher net sales.

Interest Expense

Interest expense increased to $1.2 million for the three months ended March 31, 2019 from $0.3 million for the three months ended March 31, 2018. This increase is the result of the Company entering in to the Amended and Restated Credit Agreement on May 2, 2018 as a part of the acquisition of CID. See Note 2 in Item 1 of this Form 10-Q.

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Income Taxes

The effective income tax rate was 20.2% and 26.2% in the three months ended March 31, 2019 and 2018, respectively. The 6.0% decrease in the effective tax rate is attributed primarily to the reduction in foreign taxes (3.4%), the reduction of the GILTI tax (1.2%), changes to executive compensation limits (0.9%), a decrease in the excess tax benefit associated with share based compensation (0.4%), a decrease in state income taxes (0.6%), and other decreases (0.3%).

The effective tax rate may vary from quarter to quarter due to unusual or infrequently occurring items, the resolution of income tax audits, changes in tax laws, the tax impact from employee share-based payments, taxes incurred in connection to the territorial style tax system, or other items.

Liquidity and Capital Resources

Balance Sheet

Accounts receivable - trade decreased 0.6% from $64.0 million on December 31, 2018 to $63.6 million on March 31, 2019.

Inventories were $67.3 million on December 31, 2018 and $65.8 million as of March 31, 2019. The decrease is primarily related to the relative timing of shipments to customers and receipt of finished goods from suppliers.

Contract assets were $49.2 million on December 31, 2018 and $47.4 million on March 31, 2019. The decrease is related to a reduction in the receipts of inventory subject to ASC 606, revenue recognition, primarily in the uniform segment.

Deferred tax liability decreased from $8.5 million on December 31, 2018 to $7.4 million on March 31, 2019. As a result of the company adopting ASC 606, and the subsequent change in accounting method for tax purposes, an increased tax liability of $3.6 million was incurred. As it is permissible to pay this increased liability over a four year period, in 2019 $0.9 million was reclassified from deferred to current to reflect the current amount to be paid.

Other assets increased 10.9% from $8.8 million on December 31, 2018 to $9.8 million on March 31, 2019. The $1.0 million increase is primarily due to $1.2 million higher asset balances in our Non-Qualified Deferred Compensation Plan.

Long-term debt decreased 8.6% from $111.5 million on December 31, 2018 to $102 million on March 31, 2019. The decrease is primarily due to the reclassification of scheduled repayments on the Amended and Restated Credit Agreement, as amended, from long term to current liabilities as a result of its restructuring on January 22, 2019.

Cash Flows

Cash and cash equivalents increased by $1.4 million from $5.4 million on December 31, 2018 to $6.8 million as of March 31, 2019. During the three months ended March 31, 2019, the Company provided cash of $5.7 million from operating activities, used cash of $1.7 million for investing activities to fund capital expenditures; and used cash of $2.6 million in financing activities, principally in the payment of dividends ($1.5 million) and to reacquire the Company’s common stock ($1.0 million).

In the foreseeable future, the Company expects to continue its ongoing capital expenditure program designed to improve the effectiveness and expand the capabilities of its facilities, and update its technology and infrastructure to support its growth. The Company at all times evaluates its capital expenditure program in light of prevailing economic conditions.

During the three months ended March 31, 2019 and 2018, the Company paid cash dividends of $1.5 million and $1.4 million, respectively.

Credit Agreements (See Note 2 of Item 1 of this Form 10Q)

Effective May 2, 2018, and concurrently with the closing of the CID Resources acquisition, the Company entered into an Amended and Restated Credit Agreement, dated May 2, 2018 (the “Amended and Restated Credit Agreement”), with BB&T pursuant to which the Company’s existing revolving credit facility was increased from $35 million to $75 million which provided an additional term loan in the principal amount of $85 million. No principal payments were due on the $85 million term loan prior to its maturity. The term of the revolving credit facility was extended until May 2023 and the $85 million term loan was to mature in May 2020. The Company’s existing term loan with the original principal amount of $42 million matures on February 2024. The scheduled amortization for the $42 million term loan is as follows: 2018 through 2023 - $6.0 million per year; and 2024 - $1.5 million.

On January 22, 2019, the Company entered into a First Amendment to the Amended and Restated Credit Agreement pursuant to which the existing $85 million term loan was restructured. The Company used $20 million borrowed under its existing revolving credit facility to reduce the principal amount to $65 million. The maturity date on the loan was extended to January 22, 2026 The scheduled amortization for the $65 million term loan is as follows: 2019 - $8.5 million, 2020 through 2025 - $9.3 million per year; and 2026 - $0.8 million. The revolving credit facility, $42 million term loan and $65 million term loan are collectively referred to as the “Credit Facilities”.

Obligations outstanding under the revolving credit facility and $42 million term loan have a variable interest rate of one-month LIBOR plus 0.68% (3.17% at March 31, 2019). Obligations outstanding under the $65 million term loan has a variable interest rate of one-month LIBOR plus 0.85% (3.34% at March 31, 2019). The available balance under the revolving credit facility is reduced by outstanding letters of credit. As of March 31, 2019, there were no outstanding letters of credit. The term loans do not contain pre-payment penalties.

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The Amended and Restated Credit Agreement, as amended, contains customary events of default and negative covenants, including but not limited to those governing indebtedness, liens, fundamental changes, investments, restricted payments, and sales of assets. The Amended and Restated Credit Agreement, as amended, also requires the Company to maintain a fixed charge coverage ratio of at least 1.25:1 and a funded debt to EBITDA ratio not to exceed 4.0:1. As of March 31, 2019, the Company was in compliance with these ratios. The Credit Facilities are secured by substantially all of the operating assets of the Company as collateral, and the Company’s obligations under the Credit Facilities are guaranteed by all of its domestic subsidiaries. The Company’s obligations under the Credit Facilities are subject to acceleration upon the occurrence of an event of default as defined in the Amended and Restated Credit Agreement, as amended.

Shipments (Non-GAAP Financial Measure)

In this management’s discussion and analysis, we use a supplemental measure of our performance, which is derived from our financial information, but which is not presented in our financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). This non-GAAP financial measure is “shipments”, and represents a primary metric by which our management evaluates customer demand.

We define shipments as net sales excluding, if applicable, sales recorded with respect to contracts with customers in which there is an enforceable right to the payment for goods with no alternative use in advance of the transfer of these goods to our customers. As recognized in accordance with ASC 606, net sales generated from such contracts are recorded as of the time at which we receive the goods from our suppliers rather than at the time we transfer them to our customers. For customers to which we sell goods that have an alternative use, or customers with whom we do not have an enforceable right to payment with no alternative use, shipments and net sales are identical performance measures.

We believe that sales recorded under ASC 606 are affected by changes in the Company’s purchasing patterns that may not be directly aligned with customer demand. Therefore, we believe that shipments, as a supplemental performance measure, tracks customer demand more closely.

Shipments is not a measure determined in accordance with GAAP, and should not be considered in isolation or as a substitute for sales determined in accordance with GAAP. Shipments is used as a measurement of customer demand and we believe it to be a helpful measure for those evaluating performance of a company operating in the uniform and promotional products businesses. However, there are limitations to the use of this non-GAAP financial measure. Our non-GAAP financial measure may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

RECONCILIATION OF UNIFORM AND RELATED PRODUCTS SEGMENT GAAP SALES TO SHIPMENTS (without CID) 

	Three months ended March 31,
	2019			2018
Uniform and Related Product net sales, as reported	$	58,679		$	48,125
Less: CID sales		(16,135	)		-
Uniform and Related Product net sales without CID		42,544			48,125
Less: Recognition of revenue for finished goods with no alternative use for Uniform and Related Product net sales without CID		1,594			(3,000	)
Uniform and Related Product shipments without CID	$	44,138		$	45,125

Off-Balance Sheet Arrangements

The Company does not engage in any off-balance sheet financing arrangements. In particular, the Company does not have any interest in variable interest entities, which include special purpose entities and structured finance entities.

ITEM 3.          Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

We are subject to market risk exposure related to changes in interest rates on our debt. Interest on our Credit Facilities are based upon the one-month LIBOR rate. In order to reduce the interest rate risk on our debt, the Company entered into an interest rate swap agreement on a portion of its borrowings. A hypothetical increase in the LIBOR rate of 100 basis points as of January 1, 2019 would have resulted in approximately $0.3 million in additional pre-tax interest expense for the three months ended March 31, 2019. See Note 2.

Foreign Currency Exchange Risk

Sales to clients outside of the United States are subject to fluctuations in foreign currency exchange rates.  Approximately 1% of our sales are outside of the United States. As the prices at which we sell our products are not routinely adjusted for exchange rate changes, the gross profit on our orders may be negatively affected.  We cannot predict the effect of exchange rate fluctuations on our operating results.  In certain cases, we may enter into foreign currency cash flow hedges to reduce the variability of cash flows associated with our sales and expenses denominated in foreign currency.  As of March 31, 2019, we have no foreign currency exchange hedging contracts. See Note 1(j).   There can be no assurance that our strategies will adequately protect our operating results from the effect of exchange rate fluctuations.

Financial results of our foreign subsidiaries in the Promotional Products segment are denominated in their local currencies which include the Hong Kong dollar, the Chinese renminbi, the British pound, the Indian rupee, and the Brazilian real. Changes in exchange rates for intercompany payables and receivables not considered to be long-term are reported as transaction gains (losses) in our consolidated statements of comprehensive income. During the three months ended March 31, 2019, transaction losses were not significant.

31

ITEM 4.          Controls and Procedures

Disclosure Controls and Procedures

The Company conducted an evaluation, under supervision and with the participation of the Company’s principal executive officer, Michael Benstock, and the Company’s principal financial officer, Michael Attinella, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to ensure that information the Company is required to disclose in its filings with the SEC under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no other changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.     Legal Proceedings

None.

ITEM 1A.     Risk Factors

We are exposed to certain risks and uncertainties that could have a material adverse impact on our business, financial condition and operating results. There have been no material changes to the Risk Factors described in Part I, Item 1A-Risk Factors in our annual report on Form 10-K for the year ended December 31, 2018.

ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the quarter ended March 31, 2019, that were not previously reported in a current report on Form 8-K.

32

The table below sets forth the information with respect to purchases made by or on behalf of Superior Group of Companies, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our shares of common stock during the three months ended March 31, 2019.

	(a) Total Number of Shares	(b) Average Price	(c) Total Number of Shares Purchased as Part of Publicly Announced	(d) Maximum Number of Shares that May Yet Be Purchased Under the
Period	Purchased	Paid per Share	Plans or Programs	Plans or Programs (1)
Month #1
(January 1, 2019 to	36,385	$18.12	36,385	-
January 31, 2019)
Month #2
(February 1, 2019 to	10,700	$17.91	10,700	-
February 28, 2019)
Month #3
(March 1, 2019 to	8,517	$16.18	8,517	-
March 31, 2019)
TOTAL	55,602	$17.77	55,602	2,614

(1)     On August 1, 2008, the Company’s Board of Directors approved an increase to the outstanding authorization to allow for the repurchase of 1,000,000 shares of the Company’s outstanding common stock. There is no expiration date or other restriction governing the period over which the Company can make share repurchases under the program. All such purchases were open market transactions.

Under our Amended and Restated Credit Agreement, as amended, with Branch Banking and Trust Company, if an event of default exists, we may not make distributions to our shareholders.  The Company is in full compliance with all terms, conditions and covenants of such agreement.

ITEM 3.     Defaults upon Senior Securities

Not applicable.

ITEM 4.     Mine Safety Disclosures

Not applicable.

ITEM 5.     Other Information

None.

ITEM 6.     Exhibits

See Exhibit Index

33

EXHIBIT INDEX

Exhibit
No.	Description
31.1	Certification by the Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer (Principal Financial Officer and Accounting Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification by the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS+	XBRL Instance
101.SCH+	XBRL Taxonomy Extension Schema
101.CAL+	XBRL Taxonomy Extension Calculation
101.DEF+	XBRL Taxonomy Extension Definition
101.LAB+	XBRL Taxonomy Extension Labels
101.PRE+	XBRL Taxonomy Extension Presentation

*This written statement is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for the purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

+Submitted electronically with this Report.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: April 25, 2019	SUPERIOR GROUP OF COMPANIES, INC.
		By	/s/ Michael Benstock
			Michael Benstock
			Chief Executive Officer
			(Principal Executive Officer)
Date: April 25, 2019
		By	/s/ Michael Attinella
			Michael Attinella
			Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

35

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Michael Benstock, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Superior Group of Companies, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 25, 2019

/s/ Michael Benstock

Michael Benstock

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Michael Attinella, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Superior Group of Companies, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 25, 2019

/s/ Michael Attinella

Michael Attinella

Chief Financial Officer and Treasurer

(Principal Financial and Principal Accounting Officer)

EX-32

EXHIBIT 32

Written Statement of the Chief Executive Officer and the Chief Financial Officer

Pursuant to 18 U.S.C. §1350

Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Superior Group of Companies, Inc. (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Benstock               

Michael Benstock

Chief Executive Officer

(Principal Executive Officer)

Date: April 25, 2019

/s/ Michael Attinella               

Michael Attinella

Chief Financial Officer and Treasurer

(Principal Financial Officer & Principal Accounting Officer)

Date: April 25, 2019

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 23, 2019
Document Information [Line Items]
Entity Registrant Name	SUPERIOR GROUP OF COMPANIES, INC.
Entity Central Index Key	0000095574
Trading Symbol	sgc
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		15,244,692
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net sales	$ 86,552	$ 73,087
Costs and expenses:
Cost of goods sold	56,284	48,212
Selling and administrative expenses	25,863	21,182
Other periodic pension costs	259	96
Interest expense	1,170	277
	83,576	69,767
Income before taxes on income	2,976	3,320
Income tax expense	600	870
Net income	$ 2,376	$ 2,450
Weighted average number of shares outstanding during the period
(Basic) (in shares)	14,927,341	14,821,659
(Diluted) (in shares)	15,262,654	15,457,629
Basic
Net income, Basic (in dollars per share)	$ 0.16	$ 0.17
Diluted
Net income, Diluted (in dollars per share)	$ 0.16	$ 0.16
Other comprehensive income, net of tax:
Recognition of net losses included in net periodic pension costs	$ 247	$ 216
Loss (gain) on cash flow hedging activities	(5)	140
Foreign currency translation adjustment	(28)	52
Other comprehensive income	214	408
Comprehensive income	$ 2,590	$ 2,858
Cash dividends per common share (in dollars per share)	$ 0.10	$ 0.095

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents		$ 6,824	$ 5,362
Accounts receivable, less allowance for doubtful accounts of $2,004 and $2,042, respectively		63,610	64,017
Accounts receivable - other		1,431	1,744
Inventory, Net, Total	[1]	65,753	67,301
Contract assets		47,359	49,236
Prepaid expenses and other current assets		11,488	9,552
TOTAL CURRENT ASSETS		196,465	197,212
PROPERTY, PLANT AND EQUIPMENT, NET		29,388	28,769
OPERATING LEASE RIGHT-OF-USE ASSETS		4,581
OTHER INTANGIBLE ASSETS, NET		65,389	66,312
GOODWILL		33,955	33,961
OTHER ASSETS		9,796	8,832
		339,574	335,086
CURRENT LIABILITIES:
Accounts payable		24,802	24,685
Other current liabilites		15,703	14,767
Current portion of long-term debt		15,286	6,000
Current portion of acquisition-related contingent liabilities		941	941
TOTAL CURRENT LIABILITIES		56,732	46,393
LONG-TERM DEBT		101,931	111,522
LONG-TERM PENSION LIABILITY		8,643	8,705
LONG-TERM ACQUISITION-RELATED CONTINGENT LIABILITIES		5,622	5,422
OPERATING LEASE LIABILITIES		2,866
DEFERRED TAX LIABILITY		7,365	8,475
OTHER LONG-TERM LIABILITIES		4,690	3,648
COMMITMENTS AND CONTINGENCIES (NOTE 5)
SHAREHOLDERS' EQUITY:
Preferred stock, $.001 par value - authorized 300,000 shares (none issued)
Common stock, $.001 par value - authorized 50,000,000 shares, issued and outstanding - 15,229,775 and 15,202,387, respectively.		15	15
Additional paid-in capital		56,536	55,859
Retained earnings		102,945	103,032
Accumulated other comprehensive income (loss), net of tax:
Pensions		(7,426)	(7,673)
Cash flow hedges		108	113
Foreign currency translation adjustment		(453)	(425)
TOTAL SHAREHOLDERS' EQUITY		151,725	150,921
		$ 339,574	$ 335,086

[1] Inventories consist of the following: March 31, 2019 December 31, (Unaudited) 2018 Finished goods $ 56,552 $ 58,196 Work in process 527 650 Raw materials 8,674 8,455 $ 65,753 $ 67,301

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts receivable, allowance for doubtful accounts	$ 2,004	$ 2,042
Finished goods	56,552	58,196
Work in process	527	650
Raw materials	$ 8,674	$ 8,455
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	300,000	300,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	15,229,775	15,202,387
Common stock, shares outstanding (in shares)	15,229,775	15,202,387

XML

Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2017	15,081,947
Balance at Dec. 31, 2017	$ 15	$ 49,103	$ 83,129	$ (7,279)	$ 124,968
ASC 606 adjustment to opening retained earnings			11,245		11,245
Common shares issued upon exercise of options, net (in shares)	33,045
Common shares issued upon exercise of options, net		383	(126)		257
Restricted shares issued (in shares)	24,908
Restricted shares issued
Common shares issued upon exercise of Stock Appreciation Rights (SARs) (in shares)	3,428
Share-based compensation expense		1,052			1,052
Tax withheld on exercise of Stock Appreciation Rights (SARs)		(17)			(17)
Tax benefit from vesting of acquisition related restricted stock		105			105
Cash dividends declared			(1,402)		(1,402)
Net income			2,450		2,450
Cash flow hedges, net of taxes				140	140
Pensions, net of taxes				216	216
Change in currency translation adjustment, net of taxes				52	52
Comprehensive Income:					2,858
Balance (in shares) at Mar. 31, 2018	15,143,328
Balance at Mar. 31, 2018	$ 15	50,626	95,296	(6,871)	$ 139,066
Balance (in shares) at Dec. 31, 2018	15,202,387				15,202,387
Balance at Dec. 31, 2018	$ 15	55,859	103,032	(7,985)	$ 150,921
Common shares issued upon exercise of options, net (in shares)	44,161				55,344
Common shares issued upon exercise of options, net		369	(159)		$ 210
Restricted shares issued (in shares)	38,829
Restricted shares issued
Share-based compensation expense		481			481
Tax benefit from vesting of acquisition related restricted stock		30			30
Cash dividends declared			(1,515)		(1,515)
Net income			2,376		2,376
Cash flow hedges, net of taxes				(5)	(5)
Pensions, net of taxes				247	247
Change in currency translation adjustment, net of taxes				(28)	(28)
Comprehensive Income:					2,590
Common stock reacquired and retired (in shares)	(55,602)
Common stock reacquired and retired		(203)	(789)		$ (992)
Balance (in shares) at Mar. 31, 2019	15,229,775				15,229,775
Balance at Mar. 31, 2019	$ 15	$ 56,536	$ 102,945	$ (7,771)	$ 151,725

XML

Consolidated Statements of Shareholders' Equity (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Retained Earnings [Member]
Cash dividends declared, per share (in dollars per share)	$ (0.10)	$ (0.095)
AOCI Attributable to Parent [Member]
Cash flow hedges, tax		$ 45
Pensions, taxes		68
Cash flow hedges, tax	$ 1
Pensions, taxes	78
Change in currency translation adjustment, taxes	$ 5	$ 9

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 2,376	$ 2,450
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	2,060	1,626
Provision for bad debts - accounts receivable	138	157
Share-based compensation expense	481	1,052
Deferred income tax benefit (provision)	(1,182)	162
Gain on sale of property, plant and equipment	(3)
Change in fair value of acquisition-related contingent liabilities	201	209
Changes in assets and liabilities:
Accounts receivable - trade	309	2,147
Accounts receivable - other	312	(259)
Contract assets	1,876	(3,780)
Inventories	1,522	3,742
Prepaid expenses and other current assets	(2,197)	27
Other assets	(1,503)	(1,564)
Accounts payable and other current liabilities	(12)	(7,132)
Long-term pension liability	262	97
Other long-term liabilities	1,099	450
Net cash provided by (used in) operating activities	5,739	(616)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(1,723)	(1,055)
Proceeds from disposals of property, plant and equipment	3
Net cash used in investing activities	(1,720)	(1,055)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt	54,856	31,657
Repayment of long-term debt	(55,161)	(24,642)
Payment of cash dividends	(1,515)	(1,402)
Payment of acquisition-related contingent liability		(2,000)
Proceeds received on exercise of stock options	210	257
Tax benefit from vesting of acquisition-related restricted stock	30	105
Tax withholding on exercise of stock rights		(17)
Common stock reaquired and retired	(992)
Net cash (used in) provided by financing activities	(2,572)	3,958
Effect of currency exchange rates on cash	15	25
Net increase in cash and cash equivalents	1,462	2,312
Cash and cash equivalents balance, beginning of year	5,362	8,130
Cash and cash equivalents balance, end of period	$ 6,824	$ 10,442

XML

Note 1 - Summary of Significant Interim Accounting Policies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

1

– Summary of Significant Interim Accounting Policies:

a) Basis of presentation

The consolidated interim financial statements include the accounts of Superior Group of Companies, Inc. and its wholly-owned subsidiaries, The Office Gurus, LLC, SUG Holding, Superior Group Holdings, Inc., Fashion Seal Corporation, BAMKO, LLC and CID Resources, Inc.; The Office Gurus, Ltda, de C.V., The Office Masters, Ltda., de C.V. and The Office Gurus, Ltd., each a subsidiary of Fashion Seal Corporation and SUG Holding; and Power Three Web, Ltda. and Superior Sourcing, each a wholly-owned subsidiary of SUG Holding; BAMKO Importação, Exportação e Comércio de Brindes Ltda., a subsidiary of BAMKO, LLC and SUG Holding; Guangzhou Ben Gao Trading Limited, Worldwide Sourcing Solutions Limited, and BAMKO UK, Limited,each a direct or indirect subsidiary of BAMKO, LLC; and BAMKO India Private Limited, a

99%

-owned subsidiary of BAMKO, LLC.  All of these entities are referred to collectively as “the Company”, “Superior”, “we”, “our”, or “us”. Effective

May 3, 2018,

Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc.  Intercompany items have been eliminated in consolidation.  The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form

10

-K for the year ended

December 31, 2018,

and filed with the Securities and Exchange Commission.  The interim financial information contained herein is

not

certified or audited; it reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the operating results for the periods presented, stated on a basis consistent with that of the audited financial statements.  The results of operations for any interim period are

not

necessarily indicative of results to be expected for the full year.

b) Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of

three

months or less at the time of purchase to be cash equivalents.

c) Revenue recognition

Effective

January, 2018,

the Company adopted ASU

2014

-

09

Revenue from Contracts with Customers

and all subsequent amendments to the ASU (collectively ASC

606

) using the modified retrospective method to all contracts

not

completed as of

January 1, 2018.

Results for reporting periods beginning after

January 1 2018

are presented under ASC

606

while comparative information for prior periods has

not

been restated and continues to be reported under the accounting standards in effect for those periods. The Company recorded a net change in beginning retained earnings of

$11.2

million as of

January 1, 2018

due to the cumulative effect of adopting ASC

606.

Revenue for our Uniforms and Related Products and Promotional Products segments is recognized when the earnings process is complete. For certain contracts with customers in which the Company has an enforceable right to payment for goods with

no

alternative use we have moved from a point in time model to an over time model in which we recognize revenue upon receipt of finished goods into inventory. Contract termination terms

may

involve variable consideration clauses such as discounts and rebates, and revenue has been adjusted accordingly for these provisions. Revenue for goods that do have an alternative use and/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. Revenue is measured as the amount of consideration we expect to receive in exchange for the goods. Sales taxes, sales discounts and customer rebates are also excluded from revenue. The new standard has

no

cash impact and does

not

affect the economics of our underlying customer contracts.

Compared to the respective prior year quarter, the impact of adoption of ASC

606

was a

$1.8

million reduction in revenues for the

three

months ended

March 31, 2019,

and a

$3.8

million increase in revenues for the

three

months ended

March 31, 2018. 

The impact of adoption of ASC

606

on our consolidated balance sheet and statement of comprehensive income as of

March 31, 2019

is as follows (in thousands):

Balance Sheet
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Assets:
Contract assets	$	47,359	$	-	$	47,359
Inventory		65,753		93,512		(27,759	)
Liabilities:
Accounts payable	$	24,802	$	22,008	$	2,794
Other current liabilites		15,703		12,811		2,892
Deferred tax liability		7,365		5,441		1,924

In accordance with ASC

606,

the Company has recognized contract assets of

$47.3

million as of

March 31, 2019

for 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. 

Statement of Comprehensive Income
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Net sales	$	86,552	$	88,346	$	(1,794	)
Cost of goods sold		56,284		57,117		(833	)
Selling and administrative expenses		25,863		25,822		41

The cost of goods sold associated with our ASC

606

adjustment include the cost of the garments, alterations (if applicable) and shipping costs. Selling and administrative expenses consist of sales commissions.

Revenue from our Remote Staffing segment is recognized as services are delivered.

d) Amortization of other intangible assets

The Company amortizes identifiable intangible assets on a straight line basis over their expected useful lives. Amortization expense for other intangible assets was

$1.0

million and

$0.8

million for the

three

-month periods ended

March 31, 2019

and

2018,

respectively.

e) Cost of goods sold and shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with out-bound freight are generally recorded in cost of goods sold. Other shipping and handling costs such as labor and overhead are included in selling andadministrative expensesand totaled

$3.4

million and

$2.7

million for the

three

-month periods ended

March 31, 2019

and

2018,

respectively.

f) Inventories

Inventories are stated at the lower of cost (

first

-in,

first

-out method or average cost) or net realizable value. Judgments and estimates are used in determining the likelihood that goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs

may

be required.

g) Accounting for income taxes

The provision for income taxes is calculated by using the effective tax rate anticipated for the full year.

h) Employee benefit plan settlements

The Company recognizes settlement gains and losses in its financial statements when the cost of all settlements in a year is greater than the sum of the service cost and interest cost components of net periodic pension cost for the plan for the year.

i) Earnings per share

Historical basic per share data is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options, stock-settled appreciation rights, restricted stock, and performance shares.

j) Derivative financial instruments

The Company uses certain financial derivatives to mitigate its exposure to volatility in interest rates and foreign currency. The Company records derivatives on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships. On the date a derivative contract is entered into, the Company

may

elect to designate the derivative as a fair value hedge, a cash flow hedge, or the hedge of a net investment in a foreign operation. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative that is used in the hedging transaction is highly effective. For those instruments that are designated as a cash flow hedge and meet certain documentary and analytical requirements to qualify for hedge accounting treatment, changes in the fair value for the effective portion are reported in other comprehensive income (“OCI”), net of related income tax effects, and are reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. The Company discontinues hedge accounting prospectively when it is determined that the derivative is

no

longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, or management determines that designation of the derivative as a hedging instrument is

no

longer appropriate. In situations in which the Company does

not

elect hedge accounting or hedge accounting is discontinued and the derivative is retained, the Company carries or continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value through earnings.

The nature of the Company’s business activities involves the management of various financial and market risks, including those related to changes in interest rates and foreign currency. The Company does

not

enter into derivative instruments for speculative purposes. The Company manages market and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree of risk that

may

be undertaken, and by entering into transactions with high-quality counterparties.           

Effective

March 3, 2017,

in order to reduce the interest rate risk on its future debt, the Company entered into an interest rate swap agreement that was designed to effectively convert or hedge the variable interest rate on a portion of its future borrowings to achieve a net fixed rate beginning

March 1, 2018

with a notional amount of

$18.0

million. On

May 2, 2018,

in conjunction with the Amended and Restated Credit Agreement, the original swap was modified (“amended swap”) to achieve a net fixed rate of

3.05%

per annum effective

May 1, 2018

and the remaining notional amount was

$17.5

million. As a result of the change, the Company has discontinued hedge accounting for the original swap and has elected

not

to designate the amended swap. Changes to the fair value of the amended swap are recorded as interest expense. 

k) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

l) Comprehensive income

Other comprehensive income (loss) is defined as the change in equity during a period, from transactions and other events, excluding changes resulting from investments by owners (e.g., supplemental stock offering) and distributions to owners (e.g., dividends). Components of comprehensive income include changes in foreign currency translation adjustments (net of tax), pension plan adjustments (net of tax), and changes in the fair value of cash flow hedges (net of tax).

m) Operating segments

The Financial Accounting Standards Board (“FASB”) establishes standards for the way that public companies report information about operating segments in annual financial statements and establishes standards for related disclosures about product and services, geographic areas and major customers. The Company has reviewed the standard and determined that it has

three

reportable segments, Uniforms and Related Products, Remote Staffing Solutions and Promotional Products.

n) Share-based compensation

The Company awards share-based compensation as an incentive for employees to contribute to the Company’s long-term success. The Company grants options, stock-settled stock appreciation rights, restricted stock, and performance shares. At

March 31, 2019,

the Company had

3,308,588

shares of common stock available for grant of awards of share-based compensation under its

2013

Incentive Stock and Awards Plan.

The Company recognizes share-based compensation expense, either at the date of grant or over a subsequent vesting period, which is based on the fair value of the award on the date of grant. Determining the appropriate fair value model and calculating the fair value of stock compensation awards requires the input of certain highly complex and subjective assumptions, including the expected life of the stock compensation awards and the Company’s common stock price volatility, risk free interest rate and dividend rate. The assumptions used in calculating the fair value of stock compensation awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company deems it necessary to use different assumptions, stock compensation expense could be materially different from what has been recorded in the current period.

o) Recently Adopted Accounting Pronouncements

In

February 2016,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2016

-

02,

Lea

s

es (Topic

842

)

and

July 2018,

the FASB issued ASU

No.

2018

-

10,

Codification Improvements to Topic

842,

Leases

and ASU

No.

2018

-

11,

Targeted Improvements

(collectively “Topic

842”

). Topic

842

establishes a new lease model, referred to as the right-of-use (ROU) model that brings substantially all leases on the balance sheet. This standard requires lessees to recognize leased assets (ROU Assets) and lease liabilities on the balance sheet and disclose key information about the leasing arrangements in their financial statements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted Topic

842

effective

January 1, 2019

using the modified retrospective transition approach that allows a reporting entity to use the effective date as its date of initial application and

not

restate the comparative periods in the period of adoption when transitioning to the new standard. Consequently, the requisite financial information and disclosures under the new standard are excluded for dates and periods prior to

January 1, 2019.

In addition, the Company elected to use a number of optional simplification and practical expedients (reliefs) permitted under the transition guidance within the new standard, including allowing the Company to combine fixed lease and non-lease components, apply the short-term lease exception to all leases of

one

year or less, and utilize the ‘package of practical expedients’, which permits the Company to

not

reassess prior accounting conclusions with respect to lease identification, lease classification and initial direct costs under Topic

842.

The Company did

not

elect the use-of hindsight or the practical expedient pertaining to land easement; the latter

not

being applicable to the Company. Adoption of this new standard resulted in the recognition of

$4.1

million of operating lease obligation liabilities (

$1

million in other current liabilities and

$3.1

million in operating lease liability) which represents the present value of the remaining lease payments of

$4.6

 million, discounted using the Company’s lease discount rate of

5.74%

and

$4.9

million of operating lease right-of-use assets, which represents the lease liability of

$4.1

million adjusted for prepaid rent to

$0.8

million that was previously presented within current prepaid expense and other current assets and other assets on the accompanying condensed consolidated balance sheet prior to adoption. Refer to Note

10

for the impact to the financial statements as of

March 31, 2019.

In

January 2017,

the FASB issued ASU

2017

-

04,

“Simplifying the Test for Goodwill Impairment.” ASU

2017

-

04

eliminates the

two

-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after

December 15, 2019.

The adoption of this standard is

not

expected to have a material impact on the consolidated condensed financial statements.

In

February 2018,

the FASB issued ASU

2018

-

02,

"Income Statement - Reporting Comprehensive Income (Topic

220

): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU

2018

-

02

allows entities to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) on items within accumulated other comprehensive income to retained earnings and requires additional related disclosures. This standard is effective for fiscal years beginning after

December 15, 2018

and interim periods within those fiscal years, however, early adoption is permitted. The Company’s adoption of this standard on

January 1, 2019

did

not

have a material impact on its consolidated financial statements.

No

other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the consolidated financial statements of Superior Group of Companies, Inc. and Subsidiaries.

XML

Note 2 - Long-term Debt

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Long-term Debt [Text Block]

NOTE 2 - Long-Term Debt:
	March 31,		December 31,
(In thousands)	2019		2018
Note payable to BB&T, pursuant to revolving credit agreement, maturing May 2023	$	24,126	$	1,193
Term loan payable to BB&T maturing January 22, 2026		63,452		-
Term loan payable to BB&T maturing February 26, 2024		30,000		31,500
Term loan payable to BB&T maturing May 2020		-		85,000
	$	117,578	$	117,693
Less:
Payments due within one year included in current liabilities		15,286		6,000
Debt issuance costs		361		171
Long-term debt less current maturities	$	101,931	$	111,522

Effective

February 28, 2017,

the Company entered into a

7

-year credit agreement with BB&T (the “Credit Agreement”) that provided a revolving credit facility of

$35

million which was to terminate on

February 25, 2022,

and provided a term loan of

$42

million, which matures on

February 26, 2024.

Both loans were based upon the

one

-month LIBOR rate for U.S. dollar based borrowings. Interest was payable for each loan at LIBOR (rounded up to the next

1/100

th

of

1%

) plus

0.75%.

The Company pays a commitment fee of

0.10%

per annum on the average unused portion of the commitment under the credit facility.

Effective

May 2, 2018,

and concurrently with the closing of the CID Resources acquisition, the Company entered into an Amended and Restated Credit Agreement, dated as of

May 2, 2018 (

the “Amended and Restated Credit Agreement”), with BB&T pursuant to which the Company’s existing revolving credit facility was increased from

$35

million to

$75

million and which provided an additional term loan in the principal amount of

$85

million.

No

principal payments were due on the

$85

million term loan prior to its maturity. The term of the revolving credit facility was extended until

May 2023

and the

$85

million term loan was to mature in

May 2020.

The Company’s existing term loan with the original principal amount of

$42

million remains outstanding with a maturity date of

February 2024

and with the same amortization schedule. The scheduled amortization for the

$42

million term loan is as follows:

2019

through

2023

-

$6.0

million per year; and

2024

-

$1.5

million.

Obligations outstanding under the revolving credit facility and the

$42

million term loan generally have a variable interest rate of

one

-month LIBOR plus

0.68%

(

3.17%

at

March 31, 2019). 

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

March 31, 2019,

there were

no

outstanding letters of credit. The term loans do

not

contain pre-payment penalties.

On

January 22, 2019,

the Company entered into a First Amendment to the Amended and Restated Credit Agreement pursuant to which the existing

$85

million term loan was restructured. The Company used

$20

million borrowed under its existing revolving credit facility to reduce the principal amount to

$65

million. The maturity date on the loan was extended to

January 22, 2026

and the interest rate was lowered to a variable interest rate of LIBOR plus

0.85%

(

3.34%

at

March 31, 2019). 

The scheduled amortization for the

$65

million term loan is as follows: 

2019

-

$8.5

million,

2020

through

2025

-

$9.3

million per year; and

2026

-

$0.8

million. The revolving credit facility,

$42

million term loan and

$65

million term loan are collectively referred to as the “Credit Facilities”.

The Amended and Restated Credit Agreement, as amended, contains customary events of default and negative covenants, including but

not

limited to those governing indebtedness, liens, fundamental changes, investments, restricted payments, and sales of assets. The Amended and Restated Credit Agreement, as amended, also requires the Company to maintain a fixed charge coverage ratio of at least

1.25:1

and a funded debt to EBITDA ratio

not

to exceed

4.0:1.

 As of

March 31, 2019,

the Company was in compliance with these ratios. The Credit Facilities are secured by substantially all of the operating assets of the Company as collateral, and the Company’s obligations under the Credit Facilities are guaranteed by all of its domestic subsidiaries. The Company’s obligations under the Credit Facilities are subject to acceleration upon the occurrence of an event of default as defined in the Amended and Restated Credit Agreement, as amended.

Effective

March 3, 2017,

in order to reduce the interest rate risk on its future debt, the Company entered into an interest rate swap agreement (“original swap”) with BB&T that was designed to effectively convert or hedge the variable interest rate on a portion of its future borrowings to achieve a net fixed rate of

3.12%

per annum, beginning

March 1, 2018

with a notional amount of

$18.0

million. The notional amount of the interest rate swap is reduced by

$0.3

million per month beginning

April 1, 2018

through

February 26, 2024. 

Under the terms of the interest rate swap, the Company will receive variable interest rate payments and make fixed interest rate payments on an amount equal to the notional amount at that time. Changes in the fair value of the interest rate swap designated as the hedging instrument that effectively offset the variability of cash flows associated with the variable rate, long-term debt obligation were recorded in OCI, net of related income tax effects. On

May 2, 2018,

in conjunction with the Amended and Restated Credit Agreement, the original swap was modified (“amended swap”) to achieve a net fixed rate of

3.05%

per annum effective

May 1, 2018

and the remaining notional amount was

$17.5

million. There were

no

other changes to the original swap. As a result of the change, the Company has discontinued hedge accounting for the original swap and has elected

not

to designate the amended swap. As of

May 2, 2018,

the fair value of the original swap was

$0.1

million and is being amortized as interest expense over the remaining life of the amended swap. Changes to the fair value of the amended swap are recorded as interest expense. As of

March 31 2019,

the negative fair value of the amended swap was

$0.1

million and was included in other current liabilities. 

XML

Note 3 - Periodic Pension Expense

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

N

OTE

3

– Periodic Pension Expense:

The following table details the net periodic pension expense under the Company's  plans for the

three

-month periods ended

March 31:

(In thousands)

	2019			2018
Service cost - benefits earned during the period	$	29		$	27
Interest cost on projected benefit obligation		271			242
Expected return on plan assets		(337	)		(429	)
Recognized actuarial loss		325			283
Net periodic pension cost	$	288		$	123

The service cost component is included in selling and administrative expenses and the other components are included in other periodic pension costs in our consolidated statements of comprehensive income.

Effective

June 30, 2013,

the Company

no

longer accrues additional benefits for future service or for future increases in compensation levels for the Company’s primary defined benefit pension plan.

Effective

December 31, 2014,

the Company

no

longer accrues additional benefits for future service for the Company’s hourly defined benefit plan.

There were

$0.1

million in contributions made to the Company’s defined benefit plans during the

three

-month periods ended

March 31, 2019

and

2018,

respectively.

XML

Note 4 - Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

NOTE

4

- Sup

plemental Cash Flow Information

:

Cash paid for income taxes was

$0.2

million and

$0.4

million, respectively, for the

three

-month periods ended

March 31, 2019

and

2018.

Cash paid for interest was

$1.0

million and

$0.2

million, respectively for the

three

-month periods ended

March 31, 2019

and

2018.

During the

three

months ended

March 31, 2019

and

2018,

respectively, the Company received

11,183

and

5,863

shares of its common stock as payment of the exercise price in the exercise of stock options for

27,172

and

20,234

shares.

As a result of the adoption of ASC

606

the following amounts were recorded on

January 1, 2018:

$43.3

million in contract assets, a reduction in inventory of

$24.9

million, an increase in accounts payable of

$2.6

million, an increase in other current liabilities of

$1.1

million, and an increase in deferred tax liabilities of

$3.5

million.

As a result of the adoption of ASC

842

the following amounts were recorded on

January 1, 2019:

a

$4.9

million operating lease right-of-use asset; a decrease in prepaid expenses and other current assets of

$0.1

million; a reduction in other assets of

$0.7

million; an increase in other current liabilities of

$1.0

million; and an operating lease liability of

$3.1

million.

XML

Note 5 - Contingencies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

5

– Contingencies:

The Company is involved in various legal actions and claims arising from the normal course of business. In the opinion of management, the ultimate outcome of these matters will

not

have a material impact on the Company’s results of operations, cash flows, or financial position.

XML

Note 6 - Share-based Compensation

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE

6

– Share-Based Compensation

:

In

2003,

the stockholders of the Company approved the

2003

Incentive Stock and Awards Plan (the

“2003

Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights (“SARS”), restricted stock, performance shares and other stock based compensation. This plan expired in

May

of

2013,

at which time, the stockholders of the Company approved the

2013

Incentive Stock and Awards Plan (the

“2013

Plan”), authorizing the granting of incentive stock options, non-qualified stock options, SARS, restricted stock, performance shares and other stock based compensation. A total of

5,000,000

shares of common stock (subject to adjustment for expirations and cancellations of options outstanding from the

2003

Plan subsequent to its termination) have been reserved for issuance under the

2013

Plan. All options and SARS under both plans have been or will be granted with exercise prices at least equal to the fair market value of the shares on the date of grant. At

March 31, 2019,

the Company had

3,308,588

shares of common stock available for grant of share-based compensation under the

2013

Plan.

Share-based compensation is recorded in selling and administrative expense in the consolidated statements of comprehensive income. The following table details the share-based compensation expense by type of award and the total related tax benefit for the periods presented:

	Three Months Ended March 31,
	(In thousands)
	2019		2018
Stock options and SARS	$	73	$	823
Restricted stock		188		124
Performance shares		220		105
Total share-based compensation expense	$	481	$	1,052
Related income tax benefit	$	58	$	111

Stock options and SARS

The Company grants stock options and stock settled SARS to employees that allow them to purchase shares of the Company’s common stock. Options are also granted to outside members of the Board of Directors of the Company. The Company determines the fair value of stock options and SARS at the date of grant using the Black-Scholes valuation model.

All options and SARS vest immediately at the date of grant or after a

two

-year period. Awards generally expire

five

years after the date of grant with the exception of options granted to outside directors, which expire

ten

years after the date of grant. The Company issues new shares upon the exercise of stock options and SARS.

A summary of stock option transactions during the

three

months ended

March 31, 2019

follows:

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2018		676,846		$	15.70
Granted		128,259			17.77
Exercised		(55,344	)		7.41
Lapsed		-			-
Cancelled		(17,016	)		19.62
Outstanding March 31, 2019		732,745		$	16.60

At

March 31, 2019,

568,498

options outstanding, all of which were fully vested and exercisable and

164,247

nonvested options, had an aggregate intrinsic value of

$1.4

million. The weighted-average remaining contractual term was

40

months.

Options exercised during the

three

-month periods ended

March 31, 2019

and

2018

had intrinsic values of

$0.6

million and

$0.6

million, respectively.

The weighted average fair values of the Company’s

128,259

and

87,385

options granted during the

three

-month periods ended

March 31, 2019

and

2018

was

$3.97

and

$6.06,

respectively. As of

March 31, 2019,

the Company had

$0.6

million in unrecognized compensation related to nonvested grants to be recognized over the remaining weighted average vesting period of

1.6

years.

During the

three

-month periods ended

March 31, 2019

and

2018,

respectively, the Company received

$0.2

million and

$0.3

million in cash from stock option exercises. Additionally, during the

three

-month period ended

March 31, 2019

and

2018,

respectively, the Company received

11,183

and

5,863

shares of its common stock as payment of the exercise price in the exercise of stock options for

27,172

and

20,234

shares. The tax benefit recognized for exercises during the

three

-month period ended

March 31, 2018

was

$0.1

million. There were

no

tax benefits recognized for exercises during the

three

-month period ended

March 31, 2019.

The following table summarizes information about stock options outstanding as of

March 31, 2019:

					Weighted Average
Range of					Remaining	Weighted Average
Exercise Price			Shares		Contractual Life (Years)	Exercise Price
$  3.82	-	$  5.88		89,000	2.36	$	5.33
$  7.96	-	$10.38		42,000	3.50	$	8.76
$16.35	-	$18.86		464,474	3.24	$	17.57
$21.63	-	$24.28		137,271	4.10	$	23.03
$  3.82	-	$24.28		732,745	3.31	$	16.60

A summary of stock-settled SARS transactions during the

three

months ended

March 31, 2019

follows:

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2018		182,894		$	18.99
Granted		42,841			17.77
Exercised		-			-
Lapsed		-			-
Cancelled		(3,134	)		21.97
Outstanding March 31, 2019		222,601		$	18.71

At

March 31, 2019,

180,633

SARS outstanding, all of which were fully vested and exercisable and

41,968

nonvested options, had an aggregate intrinsic value of

$0.1

million. The weighted-average remaining contractual term was

34

months.

The weighted average fair values of the Company’s

42,841

and

48,515

SARS granted during each of the

three

-month periods ended

March 31, 2019

and

2018

was

$3.97

and

$6.06,

respectively. As of

March 31, 2019,

the Company had

$0.2

million in unrecognized compensation related to nonvested grants to be recognized over the remaining weighted average vesting period of

1.8

years.

There were

12,125

SARS exercised during the

three

-month period ended

March 31, 2018.

SARS exercised during the

three

-month period ended

March 31, 2018

had an intrinsic value of

$0.1

million. The tax benefit recognized for this exercise during the

three

-month period ended

March 31, 2018

was

$0.1

million. There were

no

SARS exercised during the

three

-month period ended

March 31, 2019.

The following table summarizes information about SARS outstanding as of

March 31, 2019:

					Weighted Average
Range of					Remaining		Weighted Average
Exercise Price			Shares		Contractual Life (Years)		Exercise Price
$16.35	-	$18.66		176,347		2.54	$	17.43
$23.59	-	$23.59		46,254		3.83	$	23.59
$16.35	-	$23.59		222,601		2.81	$	18.71

Options and SARS have never been repriced by the Company in any year.

The following table summarizes significant assumptions utilized to determine the fair value of options and SARS.

Three months ended
March 31,	SARS		Options
Exercise price
2019	$	17.77	$	17.77
2018	$	23.59	$	23.59
Market price
2019	$	17.77	$	17.77
2018	$	23.59	$	23.59
Risk free interest rate 1
2019		2.4%		2.4%
2018		2.6%		2.6%
Expected award life (years) 2
2019		3		3
2018		3		3
Expected volatility 3
2019		34.8%		34.8%
2018		38.1%		38.1%
Expected dividend yield 4
2019		2.3%		2.3%
2018		1.6%		1.6%

1

The risk-free interest rate is based on the yield of a U.S. treasury bond with a similar maturity as the expected life of the awards.

2

The expected life in years for awards granted was based on the historical exercise patterns experienced by the Company when the award is made.

3

The determination of expected stock price volatility for awards granted in each of the periods ending

March 31, 2019

and

2018

were based on historical Superior common stock prices over a period commensurate with the expected life.

4

The dividend yield assumption is based on the history and expectation of the Company’s dividend payouts.

Restricted Stock

The Company has granted restricted stock to directors and certain employees under the terms of the

2013

Plan which vest at a specified future date, generally after

three

years, or when certain conditions are met. The shares are subject to accelerated vesting under certain circumstances as outlined in the

2013

Plan. Expense for each of these grants is based on the fair value at the date of the grant and is being recognized on a straight-line basis over the respective service period. As of

March 31, 2019,

the Company had

$1.5

million of unrecognized compensation cost related to nonvested grants expected to be recognized over the weighted average service period of

1.83

years.

A summary of restricted stock transactions during the

three

months ended

March 31, 2019

follows:

			Weighted Average
	No. of		Grant Date
	Shares		Fair Value
Outstanding December 31, 2018		92,032	$	19.46
Granted		38,829		17.77
Vested		-		-
Forfeited		-		-
Outstanding March 31, 2019		130,861	$	18.96

Performance Shares

In the quarter ended

March 31, 2019,

the Compensation Committee of the Board of Directors approved grants of performance shares under the terms of the

2013

Plan. Under the terms of the grants, certain employees received service-based or service-based and performance-based shares. The service-based awards vest after the service period is met, which is generally

three

to

five

years. Expense for these grants is based on the fair value on the date of the grant and is being recognized on a straight-line basis over the respective service period. The performance-based shares generally vest after

five

years if the performance and service targets are met. The Company evaluates the performance conditions associated with these grants each reporting period to determine the expected number of shares to be issued. Based upon this evaluation, expected expenses for these grants are based on the fair value on the date of the grant are being recognized on a straight-line basis over the respective service period. The shares are subject to accelerated vesting under certain circumstances as outlined in the

2013

Plan. As of

March 31, 2019,

the Company had

$2.7

million of unrecognized compensation cost related to nonvested grants expected to be recognized over the weighted average service period of

2.6

years.

A summary of performance share transactions during the

three

months ended

March 31, 2019

follows:

				Weighted Average
	No. of			Grant Date
	Shares			Fair Value
Outstanding December 31, 2018		194,378		$	20.08
Granted		14,068			17.77
Vested		-			-
Forfeited		(1,000	)		17.75
Outstanding March 31, 2019		207,446		$	19.93

XML

Note 7 - Income Taxes

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

7

–

Income Taxes:

The Company calculates its interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, the Company makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date income or loss. The tax expense or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.

In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the attainment of beginning-of-the-year deferred taxes in future years is recognized in the interim period in which the change occurs.

The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but

not

limited to, the expected operating income for the year and permanent and temporary differences. The accounting estimates used to compute the provision for income taxes

may

change as new events occur, more experience is acquired, additional information is obtained or the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

For the

three

months ended

March 31, 2019,

the Company recorded a provision for income taxes of

$0.6

million, which represents an effective tax rates of

20.2%.

For the

three

months ended

March 31, 2018,

the Company recorded a provision for income taxes of

$0.9

million, which represents an effective tax rates of

26.2%.

The decrease in the effective tax rates is primarily due to the expected annual increase in excludable foreign income, and an expected annual reduction in non-deductible compensation.

The difference between the total statutory Federal income tax rate and the actual effective income tax rate is accounted for as follows:

	Three Months Ended March 31,
	2019			2018
Statutory Federal income tax rate		21.0	%		21.0	%
State and local income taxes, net of Federal income tax benefit		3.0	%		3.6	%
Current year untaxed foreign income		(7.6	%)		(6.5	%)
Foreign taxes		2.3	%		4.6	%
GILTI tax		1.8	%		3.0	%
Compensation related		0.6	%		1.1	%
Federal tax credits		(0.5	%)		(0.6	%)
Other		(0.4	%)		0.0	%
Effective income tax rate		20.2	%		26.2	%

XML

Note 8 - Earnings Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

8

– Earnings Per Share:

Historical basic per share data is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options, stock appreciation rights, unvested shares of restricted stock and performance shares.

	Three Months Ended March 31,
	2019		2018
Net earnings used in the computation of basic and diluted earnings per share (in thousands)	$	2,376	$	2,450
Weighted average shares outstanding - basic		14,927,341		14,821,659
Common stock equivalents		335,313		635,970
Weighted average shares outstanding - diluted		15,262,654		15,457,629
Per Share Data:
Basic
Net earnings	$	0.16	$	0.17
Diluted
Net earnings	$	0.16	$	0.16

Awards to purchase approximately

341,995

shares of common stock with a weighted average exercise price of

$20.99

per share were outstanding during the

three

-month period ending

March 31, 2019,

but were

not

included in the computation of diluted EPS because the awards’ exercise prices were greater than the average market price of the common shares.

There were

no

awards to purchase shares of common stock outstanding during the

three

-month period ending

March 31, 2018

excluded from the computation of diluted EPS because the award’s exercise prices were greater than the average market price of the common shares.

XML

Note 9 - Operating Segment Information

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

N

OTE

9

–

Operating Segment Information

:

The Company classifies its businesses into

three

operating segments based on the types of products and services provided. The Uniforms and Related Products segment consists of the sale of uniforms and related items. The Remote Staffing Solutions segment consists of sales of staffing solutions. The Promotional Products segment consists of sales to customers of promotional products and other branded merchandise.

The Company evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment net sales and income before taxes on income. The accounting policies of the operating segments are the same as those described in Note 

1

entitled Summary of Significant Interim Accounting Policies. Amounts for corporate expenses are included in the totals for the Uniforms and Related Products segment. Information related to the operations of the Company's operating segments is set forth below.

(In thousands)
	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products		Intersegment Eliminations			Total
As of and For the Three Months Ended
March 31, 2019
Net sales	$	58,679	$	8,599	$	20,359	$	(1,085	)	$	86,552
Gross margin	$	20,318	$	5,039	$	5,626	$	(715	)	$	30,268
Selling and administrative expenses		18,177		3,119		5,282		(715	)		25,863
Other periodic pension cost		259		-		-		-			259
Interest expense		878		-		292		-			1,170
Income before taxes on income	$	1,004	$	1,920	$	52	$	-		$	2,976
Depreciation and amortization	$	1,488	$	256	$	316	$	-		$	2,060
Capital expenditures	$	1,158	$	409	$	156	$	-		$	1,723
Total assets	$	268,227	$	31,794	$	62,698	$	(23,145	)	$	339,574

	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products			Intersegment Eliminations			Total
As of and For the Three Months Ended
March 31, 2018
Net sales	$	48,125	$	7,299	$	18,676		$	(1,013	)	$	73,087
Gross margin	$	16,536	$	4,161	$	4,849		$	(671	)	$	24,875
Selling and administrative expenses		14,140		2,512		5,201			(671	)		21,182
Other periodic pension cost		96		-		-			-			96
Interest expense		60		-		217			-			277
Income (loss) before taxes on income	$	2,240	$	1,649	$	(569	)	$	-		$	3,320
Depreciation and amortization	$	1,065	$	237	$	324		$	-		$	1,626
Capital expenditures	$	685	$	265	$	105		$	-		$	1,055
Total assets	$	216,536	$	24,296	$	57,080		$	(62,833	)	$	235,079

XML

Note 10 - Leases

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE

10

– Leases

The Company leases several of its operating and office facilities including warehouses, call centers, office space and equipment for various terms under long-term, non-cancelable operating lease agreements. These leases generally have expected lease terms at adoption of

one

to

eight

years. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. Certain of the lease agreements include rental payments adjusted periodically for inflation and generally require the Company to pay real estate taxes, insurance, and repairs. The Company’s lease agreements generally do

not

contain any material residual value guarantees or material restrictive covenants. The Company subleases certain office space to

third

parties. As of

March 31, 2019

the Company had recognized

$3.9

million of operating lease obligation (

$1

million in other current liabilities and

$2.9

million in operating lease liabilities) which represents the present value of the remaining lease payment of

$4.3

million discounted using the Company’s lease discount rate of

5.74%;

and,

$4.6

million of operating right-of-use assets, which represents the lease liability of

$3.9

million adjusted for the prepaid rent of

$0.7

million that was previously presented within prepaid expenses and other current assets and other assets on the accompanying condensed consolidated balance sheet prior to the adoption. The depreciable-life of right-of-use assets is generally limited by the expected lease term.

Information about the Company’s total lease cost, cash flows, weighted-average remaining lease terms, discount rate assumptions and other quantitative information for operating leases are as follows (dollars in thousands):

	March 31,
	2019
Lease costs:
Operating lease costs	$	325
Short-term lease costs		108
Total lease costs, included in SG&A		433
Operating cash-flows from operating leases	$	292
Weighted-average remaining lease term (in years)		3
Weighted average discount rate - operating leases		5.74	%

Maturities of lease liabilities as of March 31 were as follows:
	Operating
	Leases
2019 (nine months)	$	890
2020		1,130
2021		797
2022		784
2023		634
Thereafter		108
Total lease payments	$	4,343
Less imputed interest		476
Total	$	3,867

XML

Note 11 - Acquisition of Businesses

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Business Combination Disclosure [Text Block]

NOTE

1

1

– Acquisition of Business

es

:

CID Resources

On

May 2, 2018,

the Company acquired CID Resources, Inc., a Delaware corporation (“CID”), which manufactures medical uniforms, lab coats, and layers, and sells its products to specialty uniform retailers, ecommerce medical uniform retailers, and other retailers.

The purchase price in the acquisition consisted of the following: (a) approximately

$84.4

million in cash, subject to adjustment for cash on hand, indebtedness, unpaid Seller expenses and working capital (excluding cash), in each case as of the closing date, and (b) the issuance of

150,094

shares of the Company’s common stock to an equityholder of CID. The working capital adjustment was based on the difference between working capital as of the closing date and a target amount of approximately

$39.5

million.

Fair Value of Consideration Transferred

A summary of the purchase price is as follows (in thousands):
Cash consideration at closing	$	84,430
Superior common stock issued		3,763
Cash and working capital adjustment		2,521
Total Consideration	$	90,714

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the tangible and intangible assets and liabilities of CID based on their estimated fair values as of

May 2, 2018.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and liabilities of CID based on their estimated fair values as of the effective date of the transaction.

The assets and liabilities of CID shown below are based on our preliminary estimates of their acquisition date fair values. Our final fair value determination

may

be different than those shown below.

The following is our preliminary assignment of the aggregate consideration (in thousands):

Cash	$	1,360
Accounts receivable		9,657
Prepaid expenses and other current assets		1,248
Inventories		30,692
Property, plant and equipment		1,134
Contract assets		2,535
Identifiable intangible assets		41,020
Goodwill		17,968
Total assets	$	105,614
Accounts payable		4,472
Deferred tax liability		9,461
Other current liabilities		967
Total liabilities	$	14,900

The Company recorded

$41.0

million in identifiable intangibles at fair value, consisting of

$26.0

million in acquired customer relationships,

$0.8

million for a non-compete agreement and

$14.2

million for the brand name.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed. This goodwill will

not

be deductible for tax purposes.

The intangible assets associated with the customer relationships are being amortized for

fifteen

years beginning on

May 2, 2018

and the non-compete agreement is being amortized for

five

years. The trade name is considered an indefinite-life asset and as such is

not

being amortized.

The Company recognized amortization expense on these acquired intangible assets of

$0.5

million for the

three

-month period ended

March 31, 2019.

On a pro forma basis as if the results of this acquisition had been included in our consolidated results for the

three

months ended

March 31, 2018,

net sales would have increased approximately

$19.2

million. Net income would have increased

$2.0

million in

2018,

or

$0.13

per share.

BAMKO

On

March 8, 2016,

the Company closed on the acquisition of substantially all of the assets of BAMKO, Inc. The transaction had an effective date of

March 1, 2016.

The purchase price for the asset acquisition consisted of approximately

$15.2

million in cash, net of cash acquired, the issuance of approximately

324,000

restricted shares of Superior’s common stock that vests over a

five

-year period, potential future payment of approximately

$5.5

million in additional contingent consideration through

2021,

and the assumption of certain liabilities of BAMKO, Inc.  The transaction also included the acquisition of BAMKO, Inc.’s subsidiaries in Hong Kong, China, Brazil and England as well as an affiliate in India.

The estimated fair value for acquisition-related contingent consideration payable was

$4.1

million as of

March 31, 2019.

The current portion of

$0.9

million shall be paid in the

second

quarter of

2019.

 The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company’s consolidated statement of comprehensive income. Based on the acquisition date fair values, we have recorded

$11.4

million in identifiable intangibles, consisting of

$2.1

million in acquired customer relationships,

$0.4

million in non-compete agreements from the former owners of BAMKO, Inc., and

$8.9

million for the acquired trade name. The intangible assets associated with the customer relationships are being amortized for

seven

years beginning on

March 1, 2016

and the non-compete agreements are being amortized for

five

years and

ten

months. The trade name is considered an indefinite-life asset and as such will

not

be amortized.

Public Identity

On

August 21, 2017,

BAMKO acquired substantially all of the assets and assumed certain liabilities of PublicIdentity, Inc. (“Public Identity”) of Los Angeles, CA. Public Identity is a promotional products and branded merchandise agency that provides innovative, high quality merchandise and promotional products to corporate clients and universities across the country.

The purchase price for the acquisition consisted of

$0.8

million in cash, the issuance of approximately

54,000

restricted shares of Superior’s common stock and future payments of approximately

$0.4

million in additional consideration through

2020.

The majority of the shares issued vest over a

three

-year period. The fair value of the consideration transferred is approximately

$2.3

million. Based up on their acquisition date fair values, we have assigned approximately

$1.7

million to identifiable intangible assets and approximately

$0.6

million to goodwill.

Tangerine Promotions

On

November 30, 2017,

BAMKO acquired substantially all of the assets of Tangerine Promotions, Ltd and Tangerine Promotions West, Inc (collectively “Tangerine”). The transaction had an effective date of

December 1, 2017.

Tangerine is a promotional products and branded merchandise agency that serves many well-known brands. The company is

one

of the leading providers of Point-of-Purchase (POP) and Point-of-Sale (POS) merchandise in the country. The purchase price for the asset acquisition consisted of approximately

$7.2

million in cash, subject to adjustment, the issuance of approximately

83,000

restricted shares of Superior’s common stock that vests over a

four

-year period, the potential future payments of approximately

$3.2

million in additional contingent consideration through

2021,

and the assumption of certain liabilities.

Fair Value of Consideration Transferred

A Summary of the purchase price is as follows (in thousands):
Cash consideration at closing	$	7,222
Restricted shares of Superior common stock issued		1,657
Contingent consideration		3,209
Total Considerations	$	12,088

Assets Acquired and Liabilities Assumed

The total purchase price was allocated to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of

December 1, 2017.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was allocated to goodwill.

The following table presents the allocation of the total fair value of consideration transferred, as shown above, to the acquired tangible and intangible assets and assumed liabilities of Tangerine based on their estimated fair values as of the effective date of the transaction.

The following is our assignment of the aggregate consideration (in thousands):

Accounts receivable	$	5,051
Prepaid expenses and other current assets		969
Property, plant and equipment		131
Identifiable intangible assets		6,495
Goodwill		4,169
Total assets	$	16,815
Accounts payables		3,374
Other current liabilities		1,353
Total liabilities	$	4,727

The Company recorded

$6.5

million in identifiable intangibles at fair value, consisting of

$3.1

million in acquired customer relationships,

$0.2

million in non-compete agreements from the former owners of Tangerine, and

$3.2

million for the acquired trade name.

The estimated fair value for acquisition-related contingent consideration payable is

$2.5

million as of

March 31, 2019.

The Company will continue to evaluate this liability for remeasurement at the end of each reporting period and any change will be recorded in the Company’s consolidated statement of comprehensive income.

Goodwill was calculated as the difference between the fair value of the consideration and the values assigned to the assets acquired and liabilities assumed.

The intangible assets associated with the customer relationships will be amortized for

seven

years beginning on

December 1, 2017

and the non-compete agreement will be amortized for

seven

years. The trade name is considered an indefinite-life asset and as such will

not

be amortized.

The Company recognized amortization expense on these acquired intangible assets of

$0.1

million for the

three

months ended

March 31, 2019,

and

2018.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

a) Basis of presentation

The consolidated interim financial statements include the accounts of Superior Group of Companies, Inc. and its wholly-owned subsidiaries, The Office Gurus, LLC, SUG Holding, Superior Group Holdings, Inc., Fashion Seal Corporation, BAMKO, LLC and CID Resources, Inc.; The Office Gurus, Ltda, de C.V., The Office Masters, Ltda., de C.V. and The Office Gurus, Ltd., each a subsidiary of Fashion Seal Corporation and SUG Holding; and Power Three Web, Ltda. and Superior Sourcing, each a wholly-owned subsidiary of SUG Holding; BAMKO Importação, Exportação e Comércio de Brindes Ltda., a subsidiary of BAMKO, LLC and SUG Holding; Guangzhou Ben Gao Trading Limited, Worldwide Sourcing Solutions Limited, and BAMKO UK, Limited,each a direct or indirect subsidiary of BAMKO, LLC; and BAMKO India Private Limited, a

99%

-owned subsidiary of BAMKO, LLC.  All of these entities are referred to collectively as “the Company”, “Superior”, “we”, “our”, or “us”. Effective

May 3, 2018,

Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc.  Intercompany items have been eliminated in consolidation.  The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form

10

-K for the year ended

December 31, 2018,

and filed with the Securities and Exchange Commission.  The interim financial information contained herein is

not

certified or audited; it reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the operating results for the periods presented, stated on a basis consistent with that of the audited financial statements.  The results of operations for any interim period are

not

necessarily indicative of results to be expected for the full year.

Cash and Cash Equivalents, Policy [Policy Text Block]

b) Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of

three

months or less at the time of purchase to be cash equivalents.

Revenue Recognition, Policy [Policy Text Block]

c) Revenue recognition

Effective

January, 2018,

the Company adopted ASU

2014

-

09

Revenue from Contracts with Customers

and all subsequent amendments to the ASU (collectively ASC

606

) using the modified retrospective method to all contracts

not

completed as of

January 1, 2018.

Results for reporting periods beginning after

January 1 2018

are presented under ASC

606

while comparative information for prior periods has

not

been restated and continues to be reported under the accounting standards in effect for those periods. The Company recorded a net change in beginning retained earnings of

$11.2

million as of

January 1, 2018

due to the cumulative effect of adopting ASC

606.

Revenue for our Uniforms and Related Products and Promotional Products segments is recognized when the earnings process is complete. For certain contracts with customers in which the Company has an enforceable right to payment for goods with

no

alternative use we have moved from a point in time model to an over time model in which we recognize revenue upon receipt of finished goods into inventory. Contract termination terms

may

involve variable consideration clauses such as discounts and rebates, and revenue has been adjusted accordingly for these provisions. Revenue for goods that do have an alternative use and/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. Revenue is measured as the amount of consideration we expect to receive in exchange for the goods. Sales taxes, sales discounts and customer rebates are also excluded from revenue. The new standard has

no

cash impact and does

not

affect the economics of our underlying customer contracts.

Compared to the respective prior year quarter, the impact of adoption of ASC

606

was a

$1.8

million reduction in revenues for the

three

months ended

March 31, 2019,

and a

$3.8

million increase in revenues for the

three

months ended

March 31, 2018. 

The impact of adoption of ASC

606

on our consolidated balance sheet and statement of comprehensive income as of

March 31, 2019

is as follows (in thousands):

Balance Sheet
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Assets:
Contract assets	$	47,359	$	-	$	47,359
Inventory		65,753		93,512		(27,759	)
Liabilities:
Accounts payable	$	24,802	$	22,008	$	2,794
Other current liabilites		15,703		12,811		2,892
Deferred tax liability		7,365		5,441		1,924

In accordance with ASC

606,

the Company has recognized contract assets of

$47.3

million as of

March 31, 2019

for 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. 

Statement of Comprehensive Income
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Net sales	$	86,552	$	88,346	$	(1,794	)
Cost of goods sold		56,284		57,117		(833	)
Selling and administrative expenses		25,863		25,822		41

The cost of goods sold associated with our ASC

606

adjustment include the cost of the garments, alterations (if applicable) and shipping costs. Selling and administrative expenses consist of sales commissions.

Revenue from our Remote Staffing segment is recognized as services are delivered.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

d) Amortization of other intangible assets

The Company amortizes identifiable intangible assets on a straight line basis over their expected useful lives. Amortization expense for other intangible assets was

$1.0

million and

$0.8

million for the

three

-month periods ended

March 31, 2019

and

2018,

respectively.

Cost Of Goods Sold And Shipping And Handling Fees And Costs, Policy [Policy Text Block]

e) Cost of goods sold and shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with out-bound freight are generally recorded in cost of goods sold. Other shipping and handling costs such as labor and overhead are included in selling andadministrative expensesand totaled

$3.4

million and

$2.7

million for the

three

-month periods ended

March 31, 2019

and

2018,

respectively.

Inventory, Policy [Policy Text Block]

f) Inventories

Inventories are stated at the lower of cost (

first

-in,

first

-out method or average cost) or net realizable value. Judgments and estimates are used in determining the likelihood that goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs

may

be required.

Income Tax, Policy [Policy Text Block]

g) Accounting for income taxes

The provision for income taxes is calculated by using the effective tax rate anticipated for the full year.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

h) Employee benefit plan settlements

The Company recognizes settlement gains and losses in its financial statements when the cost of all settlements in a year is greater than the sum of the service cost and interest cost components of net periodic pension cost for the plan for the year.

Earnings Per Share, Policy [Policy Text Block]

i) Earnings per share

Historical basic per share data is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options, stock-settled appreciation rights, restricted stock, and performance shares.

Derivatives, Policy [Policy Text Block]

j) Derivative financial instruments

The Company uses certain financial derivatives to mitigate its exposure to volatility in interest rates and foreign currency. The Company records derivatives on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships. On the date a derivative contract is entered into, the Company

may

elect to designate the derivative as a fair value hedge, a cash flow hedge, or the hedge of a net investment in a foreign operation. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative that is used in the hedging transaction is highly effective. For those instruments that are designated as a cash flow hedge and meet certain documentary and analytical requirements to qualify for hedge accounting treatment, changes in the fair value for the effective portion are reported in other comprehensive income (“OCI”), net of related income tax effects, and are reclassified to the income statement when the effects of the item being hedged are recognized in the income statement. The Company discontinues hedge accounting prospectively when it is determined that the derivative is

no

longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, or management determines that designation of the derivative as a hedging instrument is

no

longer appropriate. In situations in which the Company does

not

elect hedge accounting or hedge accounting is discontinued and the derivative is retained, the Company carries or continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value through earnings.

The nature of the Company’s business activities involves the management of various financial and market risks, including those related to changes in interest rates and foreign currency. The Company does

not

enter into derivative instruments for speculative purposes. The Company manages market and credit risks associated with its derivative instruments by establishing and monitoring limits as to the types and degree of risk that

may

be undertaken, and by entering into transactions with high-quality counterparties.           

Effective

March 3, 2017,

in order to reduce the interest rate risk on its future debt, the Company entered into an interest rate swap agreement that was designed to effectively convert or hedge the variable interest rate on a portion of its future borrowings to achieve a net fixed rate beginning

March 1, 2018

with a notional amount of

$18.0

million. On

May 2, 2018,

in conjunction with the Amended and Restated Credit Agreement, the original swap was modified (“amended swap”) to achieve a net fixed rate of

3.05%

per annum effective

May 1, 2018

and the remaining notional amount was

$17.5

million. As a result of the change, the Company has discontinued hedge accounting for the original swap and has elected

not

to designate the amended swap. Changes to the fair value of the amended swap are recorded as interest expense. 

Use of Estimates, Policy [Policy Text Block]

k) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive Income, Policy [Policy Text Block]

l) Comprehensive income

Other comprehensive income (loss) is defined as the change in equity during a period, from transactions and other events, excluding changes resulting from investments by owners (e.g., supplemental stock offering) and distributions to owners (e.g., dividends). Components of comprehensive income include changes in foreign currency translation adjustments (net of tax), pension plan adjustments (net of tax), and changes in the fair value of cash flow hedges (net of tax).

Segment Reporting, Policy [Policy Text Block]

m) Operating segments

The Financial Accounting Standards Board (“FASB”) establishes standards for the way that public companies report information about operating segments in annual financial statements and establishes standards for related disclosures about product and services, geographic areas and major customers. The Company has reviewed the standard and determined that it has

three

reportable segments, Uniforms and Related Products, Remote Staffing Solutions and Promotional Products.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

n) Share-based compensation

The Company awards share-based compensation as an incentive for employees to contribute to the Company’s long-term success. The Company grants options, stock-settled stock appreciation rights, restricted stock, and performance shares. At

March 31, 2019,

the Company had

3,308,588

shares of common stock available for grant of awards of share-based compensation under its

2013

Incentive Stock and Awards Plan.

The Company recognizes share-based compensation expense, either at the date of grant or over a subsequent vesting period, which is based on the fair value of the award on the date of grant. Determining the appropriate fair value model and calculating the fair value of stock compensation awards requires the input of certain highly complex and subjective assumptions, including the expected life of the stock compensation awards and the Company’s common stock price volatility, risk free interest rate and dividend rate. The assumptions used in calculating the fair value of stock compensation awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company deems it necessary to use different assumptions, stock compensation expense could be materially different from what has been recorded in the current period.

New Accounting Pronouncements, Policy [Policy Text Block]

o) Recently Adopted Accounting Pronouncements

In

February 2016,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2016

-

02,

Lea

s

es (Topic

842

)

and

July 2018,

the FASB issued ASU

No.

2018

-

10,

Codification Improvements to Topic

842,

Leases

and ASU

No.

2018

-

11,

Targeted Improvements

(collectively “Topic

842”

). Topic

842

establishes a new lease model, referred to as the right-of-use (ROU) model that brings substantially all leases on the balance sheet. This standard requires lessees to recognize leased assets (ROU Assets) and lease liabilities on the balance sheet and disclose key information about the leasing arrangements in their financial statements. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The Company adopted Topic

842

effective

January 1, 2019

using the modified retrospective transition approach that allows a reporting entity to use the effective date as its date of initial application and

not

restate the comparative periods in the period of adoption when transitioning to the new standard. Consequently, the requisite financial information and disclosures under the new standard are excluded for dates and periods prior to

January 1, 2019.

In addition, the Company elected to use a number of optional simplification and practical expedients (reliefs) permitted under the transition guidance within the new standard, including allowing the Company to combine fixed lease and non-lease components, apply the short-term lease exception to all leases of

one

year or less, and utilize the ‘package of practical expedients’, which permits the Company to

not

reassess prior accounting conclusions with respect to lease identification, lease classification and initial direct costs under Topic

842.

The Company did

not

elect the use-of hindsight or the practical expedient pertaining to land easement; the latter

not

being applicable to the Company. Adoption of this new standard resulted in the recognition of

$4.1

million of operating lease obligation liabilities (

$1

million in other current liabilities and

$3.1

million in operating lease liability) which represents the present value of the remaining lease payments of

$4.6

 million, discounted using the Company’s lease discount rate of

5.74%

and

$4.9

million of operating lease right-of-use assets, which represents the lease liability of

$4.1

million adjusted for prepaid rent to

$0.8

million that was previously presented within current prepaid expense and other current assets and other assets on the accompanying condensed consolidated balance sheet prior to adoption. Refer to Note

10

for the impact to the financial statements as of

March 31, 2019.

In

January 2017,

the FASB issued ASU

2017

-

04,

“Simplifying the Test for Goodwill Impairment.” ASU

2017

-

04

eliminates the

two

-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after

December 15, 2019.

The adoption of this standard is

not

expected to have a material impact on the consolidated condensed financial statements.

In

February 2018,

the FASB issued ASU

2018

-

02,

"Income Statement - Reporting Comprehensive Income (Topic

220

): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU

2018

-

02

allows entities to elect to reclassify the income tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) on items within accumulated other comprehensive income to retained earnings and requires additional related disclosures. This standard is effective for fiscal years beginning after

December 15, 2018

and interim periods within those fiscal years, however, early adoption is permitted. The Company’s adoption of this standard on

January 1, 2019

did

not

have a material impact on its consolidated financial statements.

No

other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the consolidated financial statements of Superior Group of Companies, Inc. and Subsidiaries.

XML

Note 1 - Summary of Significant Interim Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Consolidated Balance Sheet, Impact of New Standard [Table Text Block]

Balance Sheet
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Assets:
Contract assets	$	47,359	$	-	$	47,359
Inventory		65,753		93,512		(27,759	)
Liabilities:
Accounts payable	$	24,802	$	22,008	$	2,794
Other current liabilites		15,703		12,811		2,892
Deferred tax liability		7,365		5,441		1,924

Statement of Comprehensive Income, Impact of New Standard [Table Text Block]

Statement of Comprehensive Income
	As Reported		Balances Without Adoption of		Effect of Change
	3/31/2019		ASC 606		3/31/2019
Net sales	$	86,552	$	88,346	$	(1,794	)
Cost of goods sold		56,284		57,117		(833	)
Selling and administrative expenses		25,863		25,822		41

XML

Note 2 - Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

NOTE 2 - Long-Term Debt:
	March 31,		December 31,
(In thousands)	2019		2018
Note payable to BB&T, pursuant to revolving credit agreement, maturing May 2023	$	24,126	$	1,193
Term loan payable to BB&T maturing January 22, 2026		63,452		-
Term loan payable to BB&T maturing February 26, 2024		30,000		31,500
Term loan payable to BB&T maturing May 2020		-		85,000
	$	117,578	$	117,693
Less:
Payments due within one year included in current liabilities		15,286		6,000
Debt issuance costs		361		171
Long-term debt less current maturities	$	101,931	$	111,522

XML

Note 3 - Periodic Pension Expense (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	2019			2018
Service cost - benefits earned during the period	$	29		$	27
Interest cost on projected benefit obligation		271			242
Expected return on plan assets		(337	)		(429	)
Recognized actuarial loss		325			283
Net periodic pension cost	$	288		$	123

XML

Note 6 - Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended March 31,
	(In thousands)
	2019		2018
Stock options and SARS	$	73	$	823
Restricted stock		188		124
Performance shares		220		105
Total share-based compensation expense	$	481	$	1,052
Related income tax benefit	$	58	$	111

Share-based Compensation, Stock Options, Activity [Table Text Block]

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2018		676,846		$	15.70
Granted		128,259			17.77
Exercised		(55,344	)		7.41
Lapsed		-			-
Cancelled		(17,016	)		19.62
Outstanding March 31, 2019		732,745		$	16.60

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

					Weighted Average
Range of					Remaining	Weighted Average
Exercise Price			Shares		Contractual Life (Years)	Exercise Price
$  3.82	-	$  5.88		89,000	2.36	$	5.33
$  7.96	-	$10.38		42,000	3.50	$	8.76
$16.35	-	$18.86		464,474	3.24	$	17.57
$21.63	-	$24.28		137,271	4.10	$	23.03
$  3.82	-	$24.28		732,745	3.31	$	16.60

Schedule of Share-based Compensation, Stock Appreciation Rights Award Activity [Table Text Block]

	No. of			Weighted Average
	Shares			Exercise Price
Outstanding December 31, 2018		182,894		$	18.99
Granted		42,841			17.77
Exercised		-			-
Lapsed		-			-
Cancelled		(3,134	)		21.97
Outstanding March 31, 2019		222,601		$	18.71

Share-based Compensation, Activity [Table Text Block]

					Weighted Average
Range of					Remaining		Weighted Average
Exercise Price			Shares		Contractual Life (Years)		Exercise Price
$16.35	-	$18.66		176,347		2.54	$	17.43
$23.59	-	$23.59		46,254		3.83	$	23.59
$16.35	-	$23.59		222,601		2.81	$	18.71

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Three months ended
March 31,	SARS		Options
Exercise price
2019	$	17.77	$	17.77
2018	$	23.59	$	23.59
Market price
2019	$	17.77	$	17.77
2018	$	23.59	$	23.59
Risk free interest rate 1
2019		2.4%		2.4%
2018		2.6%		2.6%
Expected award life (years) 2
2019		3		3
2018		3		3
Expected volatility 3
2019		34.8%		34.8%
2018		38.1%		38.1%
Expected dividend yield 4
2019		2.3%		2.3%
2018		1.6%		1.6%

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

			Weighted Average
	No. of		Grant Date
	Shares		Fair Value
Outstanding December 31, 2018		92,032	$	19.46
Granted		38,829		17.77
Vested		-		-
Forfeited		-		-
Outstanding March 31, 2019		130,861	$	18.96

Schedule of Nonvested Performance-based Units Activity [Table Text Block]

				Weighted Average
	No. of			Grant Date
	Shares			Fair Value
Outstanding December 31, 2018		194,378		$	20.08
Granted		14,068			17.77
Vested		-			-
Forfeited		(1,000	)		17.75
Outstanding March 31, 2019		207,446		$	19.93

XML

Note 7 - Income Taxes (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended March 31,
	2019			2018
Statutory Federal income tax rate		21.0	%		21.0	%
State and local income taxes, net of Federal income tax benefit		3.0	%		3.6	%
Current year untaxed foreign income		(7.6	%)		(6.5	%)
Foreign taxes		2.3	%		4.6	%
GILTI tax		1.8	%		3.0	%
Compensation related		0.6	%		1.1	%
Federal tax credits		(0.5	%)		(0.6	%)
Other		(0.4	%)		0.0	%
Effective income tax rate		20.2	%		26.2	%

XML

Note 8 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended March 31,
	2019		2018
Net earnings used in the computation of basic and diluted earnings per share (in thousands)	$	2,376	$	2,450
Weighted average shares outstanding - basic		14,927,341		14,821,659
Common stock equivalents		335,313		635,970
Weighted average shares outstanding - diluted		15,262,654		15,457,629
Per Share Data:
Basic
Net earnings	$	0.16	$	0.17
Diluted
Net earnings	$	0.16	$	0.16

XML

Note 9 - Operating Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

(In thousands)
	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products		Intersegment Eliminations			Total
As of and For the Three Months Ended
March 31, 2019
Net sales	$	58,679	$	8,599	$	20,359	$	(1,085	)	$	86,552
Gross margin	$	20,318	$	5,039	$	5,626	$	(715	)	$	30,268
Selling and administrative expenses		18,177		3,119		5,282		(715	)		25,863
Other periodic pension cost		259		-		-		-			259
Interest expense		878		-		292		-			1,170
Income before taxes on income	$	1,004	$	1,920	$	52	$	-		$	2,976
Depreciation and amortization	$	1,488	$	256	$	316	$	-		$	2,060
Capital expenditures	$	1,158	$	409	$	156	$	-		$	1,723
Total assets	$	268,227	$	31,794	$	62,698	$	(23,145	)	$	339,574

	Uniforms and Related Products		Remote Staffing Solutions		Promotional Products			Intersegment Eliminations			Total
As of and For the Three Months Ended
March 31, 2018
Net sales	$	48,125	$	7,299	$	18,676		$	(1,013	)	$	73,087
Gross margin	$	16,536	$	4,161	$	4,849		$	(671	)	$	24,875
Selling and administrative expenses		14,140		2,512		5,201			(671	)		21,182
Other periodic pension cost		96		-		-			-			96
Interest expense		60		-		217			-			277
Income (loss) before taxes on income	$	2,240	$	1,649	$	(569	)	$	-		$	3,320
Depreciation and amortization	$	1,065	$	237	$	324		$	-		$	1,626
Capital expenditures	$	685	$	265	$	105		$	-		$	1,055
Total assets	$	216,536	$	24,296	$	57,080		$	(62,833	)	$	235,079

XML

Note 10 - Leases (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Lease, Cost [Table Text Block]

	March 31,
	2019
Lease costs:
Operating lease costs	$	325
Short-term lease costs		108
Total lease costs, included in SG&A		433
Operating cash-flows from operating leases	$	292
Weighted-average remaining lease term (in years)		3
Weighted average discount rate - operating leases		5.74	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Maturities of lease liabilities as of March 31 were as follows:
	Operating
	Leases
2019 (nine months)	$	890
2020		1,130
2021		797
2022		784
2023		634
Thereafter		108
Total lease payments	$	4,343
Less imputed interest		476
Total	$	3,867

XML

Note 11 - Acquisition of Businesses (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

A summary of the purchase price is as follows (in thousands):
Cash consideration at closing	$	84,430
Superior common stock issued		3,763
Cash and working capital adjustment		2,521
Total Consideration	$	90,714

A Summary of the purchase price is as follows (in thousands):
Cash consideration at closing	$	7,222
Restricted shares of Superior common stock issued		1,657
Contingent consideration		3,209
Total Considerations	$	12,088

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Cash	$	1,360
Accounts receivable		9,657
Prepaid expenses and other current assets		1,248
Inventories		30,692
Property, plant and equipment		1,134
Contract assets		2,535
Identifiable intangible assets		41,020
Goodwill		17,968
Total assets	$	105,614
Accounts payable		4,472
Deferred tax liability		9,461
Other current liabilities		967
Total liabilities	$	14,900

Accounts receivable	$	5,051
Prepaid expenses and other current assets		969
Property, plant and equipment		131
Identifiable intangible assets		6,495
Goodwill		4,169
Total assets	$	16,815
Accounts payables		3,374
Other current liabilities		1,353
Total liabilities	$	4,727

XML

Note 1 - Summary of Significant Interim Accounting Policies (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2019 USD ($) shares	Mar. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	May 02, 2018 USD ($)	May 01, 2018 USD ($)	Mar. 01, 2018 USD ($)	Jan. 01, 2018 USD ($)
Revenue from Contract with Customer, Excluding Assessed Tax, Total	$ 86,552	$ 73,087
Contract with Customer, Asset, Net, Current, Total	47,359				$ 49,236
Amortization of Intangible Assets, Total	1,000	800
Selling, General and Administrative Expense, Total	$ 25,863	21,182
Number of Reportable Segments	3
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | shares	3,308,588
Operating Lease, Liability, Total	$ 3,867
Operating Lease, Liability, Current	1,000
Operating Lease, Liability, Noncurrent	2,866
Lessee, Operating Lease, Liability, Payments, Due, Total	$ 4,343
Operating Lease, Weighted Average Discount Rate, Percent	5.74%
Operating Lease, Right-of-Use Asset	$ 4,581
Interest Rate Swap [Member]
Derivative, Notional Amount	18,000						$ 17,500	$ 18,000
Derivative, Swaption Interest Rate							3.05%
Interest Rate Swap [Member] | Other Current Liabilities [Member]
Derivative, Notional Amount						$ 17,500
Shipping and Handling [Member]
Selling, General and Administrative Expense, Total	3,400		$ 2,700
Accounting Standards Update 2014-09 [Member]
Operating Lease, Right-of-Use Asset				$ 4,900
Prepaid Rent				(800)
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]
Revenue from Contract with Customer, Excluding Assessed Tax, Total	(1,794)	$ 3,800
Contract with Customer, Asset, Net, Current, Total	47,359
Selling, General and Administrative Expense, Total	$ 41
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption									$ 11,200
Accounting Standards Update 2016-02 [Member]
Operating Lease, Liability, Total				4,100
Operating Lease, Liability, Noncurrent				3,100
Lessee, Operating Lease, Liability, Payments, Due, Total				$ 4,600
Operating Lease, Weighted Average Discount Rate, Percent				5.74%
Operating Lease, Right-of-Use Asset				$ 4,900
Accounting Standards Update 2016-02 [Member] | Other Current Liabilities [Member]
Operating Lease, Liability, Current				$ 1,000
BAMKO [Member]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	99.00%

XML

Note 1 - Summary of Significant Accounting Policies - Impact of New Standard on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018	Jan. 01, 2018
Contract assets		$ 47,359	$ 49,236
Inventory	[1]	65,753	67,301
Accounts payable		24,802	24,685
Other current liabilites		15,703	14,767
Deferred tax liability		7,365	$ 8,475
Accounting Standards Update 2014-09 [Member]
Inventory				$ (24,900)
Other current liabilites				$ 1,100
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Contract assets
Inventory		93,512
Accounts payable		22,008
Other current liabilites		12,811
Deferred tax liability		5,441
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Contract assets		47,359
Inventory		(27,759)
Accounts payable		2,794
Other current liabilites		2,892
Deferred tax liability		$ 1,924

[1] Inventories consist of the following: March 31, 2019 December 31, (Unaudited) 2018 Finished goods $ 56,552 $ 58,196 Work in process 527 650 Raw materials 8,674 8,455 $ 65,753 $ 67,301

XML

Note 1 - Summary of Significant Accounting Policies - Impact of New Standard on Statement of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net sales	$ 86,552	$ 73,087
Cost of goods sold	56,284	48,212
Selling and administrative expenses	25,863	21,182
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Net sales	88,346
Cost of goods sold	57,117
Selling and administrative expenses	25,822
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Net sales	(1,794)	$ 3,800
Cost of goods sold	(833)
Selling and administrative expenses	$ 41

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Note 2 - Long-term Debt (Details Textual) $ in Thousands				3 Months Ended
	Jan. 22, 2019 USD ($)	May 02, 2018 USD ($)	Feb. 28, 2017 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	May 01, 2018 USD ($)	Mar. 01, 2018 USD ($)	Dec. 31, 2017 USD ($)
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year				$ 6,000
Long Term Debt Maturities Repayments of Principal in Year Six				1,500
Repayments of Long-term Debt, Total				55,161	$ 24,642
Long-term Debt, Gross				117,578			$ 117,693
Long-term Debt, Maturities, Repayments of Principal in Year Two				6,000
Derivative, Fixed Interest Rate									3.12%
Stockholders' Equity Attributable to Parent, Ending Balance				151,725	$ 139,066		$ 150,921			$ 124,968
Long-term Debt, Maturities, Repayments of Principal in Year Three				6,000
Long-term Debt, Maturities, Repayments of Principal in Year Four				6,000
Long-term Debt, Maturities, Repayments of Principal in Year Five				6,000
Interest Rate Swap [Member]
Derivative, Notional Amount				18,000				$ 17,500	$ 18,000
Derivative, Notional Amount, Monthly Reduction Amount									$ 300
Derivative, Swaption Interest Rate								3.05%
Interest Rate Swap [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance						$ 100
Interest Rate Swap [Member] | Other Current Liabilities [Member]
Derivative, Notional Amount		$ 17,500
Derivative Liability, Total		100
Credit Agreement [Member] | Term Loan 2 [Member]
Debt Instrument, Face Amount		85,000
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year				8,500
Long Term Debt Maturities Repayments of Principal in Year Six				$ 9,300
Debt Instrument, Interest Rate, Effective Percentage				3.34%
Repayments of Long-term Debt, Total	$ 20,000
Long-term Debt, Gross	$ 65,000
Long-term Debt, Maturities, Repayments of Principal in Year Two				$ 9,300
Long Term Debt Maturities Repayments of Principal in Year Eight				800
Long-term Debt, Maturities, Repayments of Principal in Year Three				9,300
Long-term Debt, Maturities, Repayments of Principal in Year Four				9,300
Long-term Debt, Maturities, Repayments of Principal in Year Five				9,300
Long Term Debt Maturities Repayments of Principal in Year Seven				$ 9,300
Credit Agreement [Member] | Term Loan [Member]
Debt Instrument, Face Amount		$ 42,000
Debt Instrument, Interest Rate, Effective Percentage				3.17%
Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Term Loan 2 [Member]
Debt Instrument, Basis Spread on Variable Rate	0.85%
Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Term Loan [Member]
Debt Instrument, Basis Spread on Variable Rate		0.68%
Amended and Restated Credit Agreement [Member]
Fixed Charge Coverage Ratio	1.25
EBITA Ratio	4
Revolving Credit Facility [Member] | Credit Agreement [Member] | Fifth Third Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity								$ 35,000
Revolving Credit Facility [Member] | Credit Agreement [Member] | BB&T [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 75,000
Add on Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate			0.75%
Amended Credit Agreement [Member] | Term Loan [Member]
Debt Instrument, Face Amount			$ 42,000
Amended Credit Agreement [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Expiration Period			7 years
Line of Credit Facility, Maximum Borrowing Capacity			$ 35,000
Line of Credit Facility, Commitment Fee Percentage			0.10%
Letters of Credit Outstanding, Amount				$ 0

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Note 2 - Long-term Debt - Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Long-term Debt, Gross	$ 117,578	$ 117,693
Payments due within one year included in current liabilities	15,286	6,000
Debt issuance costs	361	171
Long-term debt less current maturities	101,931	111,522
Note Payable Maturing May 2023 [Member] | BB&T [Member]
Long-term Debt, Gross	24,126	1,193
Term Loan Maturing January 22, 2026 [Member] | BB&T [Member]
Long-term Debt, Gross	63,452
Term Loan Maturing February 26, 2024 [Member] | BB&T [Member]
Long-term Debt, Gross	30,000	31,500
Term Loan Maturing May 2020 [Member] | BB&T [Member]
Long-term Debt, Gross		$ 85,000

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Note 3 - Periodic Pension Expense (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Payment for Pension Benefits	$ 0.1	$ 0.1

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Note 3 - Periodic Pension Expense - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Service cost - benefits earned during the period	$ 29	$ 27
Interest cost on projected benefit obligation	271	242
Expected return on plan assets	(337)	(429)
Recognized actuarial loss	325	283
Net periodic pension cost	$ 288	$ 123

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Note 4 - Supplemental Cash Flow Information (Details Textual) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018
Income Taxes Paid		$ 200	$ 400
Interest Paid, Excluding Capitalized Interest, Operating Activities		$ 1,000	$ 200
Company Stock Received in Lieu of Cash Stock Options Exercised		11,183	5,863
Stock Issued During Period, Shares, New Issues		27,172	20,234
Inventory, Net, Total	[1]	$ 65,753			$ 67,301
Other Liabilities, Current, Total		15,703			14,767
Operating Lease, Right-of-Use Asset		4,581
Prepaid Expense and Other Assets, Current		11,488			9,552
Other Assets, Noncurrent, Total		9,796			8,832
Operating Lease, Liability, Noncurrent		$ 2,866
Accounting Standards Update 2014-09 [Member]
Contract with Customer, Asset, Net, Total						$ 43,300
Inventory, Net, Total						(24,900)
Accounts Payable, Total						2,600
Other Liabilities, Current, Total						1,100
Deferred Tax Liabilities, Net, Total						$ 3,500
Operating Lease, Right-of-Use Asset				$ 4,900
Accounting Standards Update 2016-02 [Member]
Other Liabilities, Current, Total				1,000
Operating Lease, Right-of-Use Asset				4,900
Prepaid Expense and Other Assets, Current				(100)
Other Assets, Noncurrent, Total				(700)
Operating Lease, Liability, Noncurrent				$ 3,100

[1] Inventories consist of the following: March 31, 2019 December 31, (Unaudited) 2018 Finished goods $ 56,552 $ 58,196 Work in process 527 650 Raw materials 8,674 8,455 $ 65,753 $ 67,301

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Note 6 - Share-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	5,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	3,308,588
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	568,498
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Ending Balance	164,247
Share-based Compensation Arrangement by Share-based Payment Award Options Vested and Expected to Vest Exercisable Intrinsic Value	$ 1,400
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	3 years 120 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 600	$ 600
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	128,259	87,385
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 3.97	$ 6.06
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 600
Proceeds from Stock Options Exercised	$ 210	$ 257
Stock Issued During Period, Shares, New Issues	27,172	20,234
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options	$ 0	$ 100
Common Stock [Member]
Shares Received from Stock Options Exercised	11,183	5,863
Stock Issued During Period, Shares, New Issues	27,172	20,234
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 219 days
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	2 years 300 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 292 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested and Exercisable, Number	180,633
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	41,968
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding	$ 100
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted	42,841	48,515
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 3.97	$ 6.06
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 200
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised	0	12,125
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested		$ 100
Employee Service Share-based Compensation, Tax Benefit from Exercise of Equity Instruments Other than Options		$ 100
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 302 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	130,861		92,032
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 17.77
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 1,500
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Performance Shares [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 219 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	207,446		194,378
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 17.77
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total	$ 2,700
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Performance Shares [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Performance Shares [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years

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Note 6 - Share-based Compensation - Shared-based Compensation Expense and the Related Tax Benefit (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based compensation expense	$ 481	$ 1,052
Related income tax benefit	58	111
Stock Options and SARs [Member]
Share-based compensation expense	73	823
Restricted Stock [Member]
Share-based compensation expense	188	124
Performance Shares [Member]
Share-based compensation expense	$ 220	$ 105

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Note 6 - Share-based Compensation - Stock Option Transactions (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Outstanding Options (in shares)	676,846
Outstanding options (in dollars per share)	$ 15.70
Granted (in shares)	128,259	87,385
Granted (in dollars per share)	$ 17.77
Exercised (in shares)	(55,344)
Exercised (in dollars per share)	$ 7.41
Lapsed (in shares)
Lapsed (in dollars per share)
Cancelled (in shares)	(17,016)
Cancelled (in dollars per share)	$ 19.62
Outstanding Options (in shares)	732,745
Outstanding Options (in dollars per share)	$ 16.60

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Note 6 - Share-based Compensation - Stock Options Outstanding (Details)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Lower range of exercise prices on options (in dollars per share)	$ 3.82
Upper range of exercise prices on options (in dollars per share)	$ 24.28
Options outstanding (in shares) | shares	732,745
Weighted average remaining contractual life on options (Year)	3 years 113 days
Weighted average exercise price on options (in dollars per share)	$ 16.60
Exercise Price Range 1 [Member]
Lower range of exercise prices on options (in dollars per share)	3.82
Upper range of exercise prices on options (in dollars per share)	$ 5.88
Options outstanding (in shares) | shares	89,000
Weighted average remaining contractual life on options (Year)	2 years 131 days
Weighted average exercise price on options (in dollars per share)	$ 5.33
Exercise Price Range 2 [Member]
Lower range of exercise prices on options (in dollars per share)	7.96
Upper range of exercise prices on options (in dollars per share)	$ 10.38
Options outstanding (in shares) | shares	42,000
Weighted average remaining contractual life on options (Year)	3 years 182 days
Weighted average exercise price on options (in dollars per share)	$ 8.76
Exercise Price Range 3 [Member]
Lower range of exercise prices on options (in dollars per share)	16.35
Upper range of exercise prices on options (in dollars per share)	$ 18.86
Options outstanding (in shares) | shares	464,474
Weighted average remaining contractual life on options (Year)	3 years 87 days
Weighted average exercise price on options (in dollars per share)	$ 17.57
Exercise Price Range 4 [Member]
Lower range of exercise prices on options (in dollars per share)	21.63
Upper range of exercise prices on options (in dollars per share)	$ 24.28
Options outstanding (in shares) | shares	137,271
Weighted average remaining contractual life on options (Year)	4 years 36 days
Weighted average exercise price on options (in dollars per share)	$ 23.03

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Note 6 - Share-based Compensation - Stock-settled Stock Appreciation Rights Transactions (Details) - Stock Appreciation Rights (SARs) [Member] - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Outstanding SARS (in shares)	182,894
Outstanding SARS, weighted average exercise price (in dollars per share)	$ 18.99
Granted (in shares)	42,841	48,515
Granted SARS, weighted average exercise price (in dollars per share)	$ 17.77
Cancelled (in shares)	(3,134)
Cancelled SARS, weighted average exercise price (in dollars per share)	$ 21.97
Outstanding SARS (in shares)	222,601
Outstanding SARS, weighted average exercise price (in dollars per share)	$ 18.71

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Note 6 - Share-based Compensation - Stock Appreciation Rights Outstanding (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Lower range of exercise prices on options (in dollars per share)	$ 3.82
Upper range of exercise prices on options (in dollars per share)	24.28
Stock Appreciation Rights (SARs) [Member]
Lower range of exercise prices on options (in dollars per share)	16.35
Upper range of exercise prices on options (in dollars per share)	$ 23.59
Shares (in shares)	222,601	182,894
Weighted average remaining contratual life (Year)	2 years 295 days
Weighted average exercise price (in dollars per share)	$ 18.71	$ 18.99
Exercise Price Range 1 [Member]
Lower range of exercise prices on options (in dollars per share)	3.82
Upper range of exercise prices on options (in dollars per share)	5.88
Exercise Price Range 1 [Member] | Stock Appreciation Rights (SARs) [Member]
Lower range of exercise prices on options (in dollars per share)	16.35
Upper range of exercise prices on options (in dollars per share)	$ 18.66
Shares (in shares)	176,347
Weighted average remaining contratual life (Year)	2 years 197 days
Weighted average exercise price (in dollars per share)	$ 17.43
Exercise Price Range 2 [Member]
Lower range of exercise prices on options (in dollars per share)	7.96
Upper range of exercise prices on options (in dollars per share)	10.38
Exercise Price Range 2 [Member] | Stock Appreciation Rights (SARs) [Member]
Lower range of exercise prices on options (in dollars per share)	23.59
Upper range of exercise prices on options (in dollars per share)	$ 23.59
Shares (in shares)	46,254
Weighted average remaining contratual life (Year)	3 years 302 days
Weighted average exercise price (in dollars per share)	$ 23.59

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Note 6 - Share-based Compensation - Summary of Significant Assumptions for Share-based Compensation Awards (Details) - $ / shares		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Stock Appreciation Rights (SARs) [Member]
Exercise price (in dollars per share)		$ 17.77	$ 23.59
Market price (in dollars per share)		$ 17.77	$ 23.59
Risk free interest rate	[1]	2.40%	2.60%
Expected award life (Year)	[2]	3 years	3 years
Expected volatility	[3]	34.80%	38.10%
Expected dividend yield	[4]	2.30%	1.60%
Employee Stock Option [Member] | Minimum [Member]
Exercise price (in dollars per share)		$ 17.77	$ 23.59
Market price (in dollars per share)		$ 17.77	$ 23.59
Risk free interest rate	[1]	2.40%	2.60%
Expected award life (Year)	[2]	3 years	3 years
Expected volatility	[3]	34.80%	38.10%
Expected dividend yield	[4]	2.30%	1.60%

[1] The risk-free interest rate is based on the yield of a U.S. treasury bond with a similar maturity as the expected life of the awards.

[2] The expected life in years for awards granted was based on the historical exercise patterns experienced by the Company when the award is made.

[3] The determination of expected stock price volatility for awards granted in each of the periods ending March 31, 2019 and 2018 were based on historical Superior common stock prices over a period commensurate with the expected life.

[4] The dividend yield assumption is based on the history and expectation of the Company’s dividend payouts.

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Note 6 - Share-based Compensation - Restricted Stock Transactions (Details) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Outstanding restricted stock (in shares) | shares	92,032
Outstanding restricted stock (in dollars per share) | $ / shares	$ 19.46
Granted restricted stock (in shares) | shares	38,829
Granted restricted stock (in dollars per share) | $ / shares	$ 17.77
Vested restricted stock (in shares) | shares
Vested restricted stock (in dollars per share) | $ / shares
Forfeited restricted stock (in shares) | shares
Forfeited restricted stock (in dollars per share) | $ / shares
Outstanding restricted stock (in shares) | shares	130,861
Outstanding restricted stock (in dollars per share) | $ / shares	$ 18.96

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Note 6 - Share-based Compensation - Performance Share Transactions (Details) - Performance Shares [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Outstanding restricted stock (in shares) | shares	194,378
Outstanding restricted stock (in dollars per share) | $ / shares	$ 20.08
Granted restricted stock (in shares) | shares	14,068
Granted restricted stock (in dollars per share) | $ / shares	$ 17.77
Vested (in shares) | shares	0
Vested restricted stock (in dollars per share) | $ / shares	$ 0
Forfeited restricted stock (in shares) | shares	(1,000)
Forfeited restricted stock (in dollars per share) | $ / shares	$ 17.75
Outstanding restricted stock (in shares) | shares	207,446
Outstanding restricted stock (in dollars per share) | $ / shares	$ 19.93

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Note 7 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Expense (Benefit), Total	$ 600	$ 870
Effective Income Tax Rate Reconciliation, Percent, Total	20.20%	26.20%

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Note 7 - Income Taxes - Income Tax Rate Reconciliation (Details)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statutory Federal income tax rate	21.00%	21.00%
State and local income taxes, net of Federal income tax benefit	3.00%	3.60%
Current year untaxed foreign income	(7.60%)	(6.50%)
Foreign taxes	2.30%	4.60%
GILTI tax	1.80%	3.00%
Compensation related	0.60%	1.10%
Federal tax credits	(0.50%)	(0.60%)
Other	(0.40%)	0.00%
Effective income tax rate	20.20%	26.20%

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Note 8 - Earnings Per Share (Details Textual) - Stock Compensation Plan [Member] - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	341,995	0
Antidilutive Securities Excluded from Computation of Earnings Per Share, Weight Average Exercise Price	$ 20.99

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Note 8 - Earnings Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net earnings used in the computation of basic and diluted earnings per share (in thousands)	$ 2,376	$ 2,450
Weighted average shares outstanding - basic (in shares)	14,927,341	14,821,659
Common stock equivalents (in shares)	335,313	635,970
(Diluted) (in shares)	15,262,654	15,457,629
Net earnings (in dollars per share)	$ 0.16	$ 0.17
Net earnings (in dollars per share)	$ 0.16	$ 0.16

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Note 9 - Operating Segment Information (Details Textual)	3 Months Ended
	Mar. 31, 2019
Number of Operating Segments	3

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Note 9 - Operating Segment Information - Information Related to the Operations of the Company's Operating Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Revenue from Contract with Customer, Excluding Assessed Tax, Total	$ 86,552	$ 73,087
Gross margin	30,268	24,875
Selling, General and Administrative Expense, Total	25,863	21,182
Other periodic pension cost	259	96
Interest expense	1,170	277
Income before taxes on income	2,976	3,320
Depreciation and amortization	2,060	1,626
Capital expenditures	1,723	1,055
Total assets	339,574	235,079	$ 335,086
Intersegment Eliminations [Member]
Revenue from Contract with Customer, Excluding Assessed Tax, Total	(1,085)	(1,013)
Gross margin	(715)	(671)
Selling, General and Administrative Expense, Total	(715)	(671)
Other periodic pension cost
Interest expense
Income before taxes on income
Depreciation and amortization
Capital expenditures
Total assets	(23,145)	(62,833)
Uniforms and Related Products [Member] | Operating Segments [Member]
Revenue from Contract with Customer, Excluding Assessed Tax, Total	58,679	48,125
Gross margin	20,318	16,536
Selling, General and Administrative Expense, Total	18,177	14,140
Other periodic pension cost	259	96
Interest expense	878	60
Income before taxes on income	1,004	2,240
Depreciation and amortization	1,488	1,065
Capital expenditures	1,158	685
Total assets	268,227	216,536
Remote Staffing Solutions [Member] | Operating Segments [Member]
Revenue from Contract with Customer, Excluding Assessed Tax, Total	8,599	7,299
Gross margin	5,039	4,161
Selling, General and Administrative Expense, Total	3,119	2,512
Other periodic pension cost
Interest expense
Income before taxes on income	1,920	1,649
Depreciation and amortization	256	237
Capital expenditures	409	265
Total assets	31,794	24,296
Promotional Products [Member] | Operating Segments [Member]
Revenue from Contract with Customer, Excluding Assessed Tax, Total	20,359	18,676
Gross margin	5,626	4,849
Selling, General and Administrative Expense, Total	5,282	5,201
Other periodic pension cost
Interest expense	292	217
Income before taxes on income	52	(569)
Depreciation and amortization	316	324
Capital expenditures	156	105
Total assets	$ 62,698	$ 57,080

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Note 10 - Leases (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Operating Lease, Liability, Total	$ 3,867
Operating Lease, Liability, Current	1,000
Operating Lease, Liability, Noncurrent	2,866
Lessee, Operating Lease, Liability, Payments, Due, Total	$ 4,343
Operating Lease, Weighted Average Discount Rate, Percent	5.74%
Operating Lease, Right-of-Use Asset	$ 4,581
Operating Lease Right of Use Assets [Member]
Prepaid Rent	$ 700
Minimum [Member]
Lessee, Operating Lease, Term of Contract	1 year
Maximum [Member]
Lessee, Operating Lease, Term of Contract	8 years

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Note 10 - Leases - Lease Cost (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Operating lease costs	$ 325
Short-term lease costs	108
Total lease costs, included in SG&A	433
Operating cash-flows from operating leases	$ 292
Weighted-average remaining lease term (in years) (Year)	3 years
Weighted average discount rate - operating leases	5.74%

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Note 10 - Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
2019 (nine months)	$ 890
2020	1,130
2021	797
2022	784
2023	634
Thereafter	108
Total lease payments	4,343
Less imputed interest	476
Total	$ 3,867

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Note 11 - Acquisition of Businesses (Details Textual) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended
	May 02, 2018	Dec. 01, 2017	Aug. 21, 2017	Mar. 08, 2016	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Amortization of Intangible Assets, Total					$ 1,000	$ 800
Business Combination, Contingent Consideration, Liability, Current					941		$ 941
Goodwill, Ending Balance					33,955		$ 33,961
CID Resources [Member]
Payments to Acquire Businesses, Gross	$ 84,430
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	150,094
Working Capital Target Amount	$ 39,500
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	41,020
Business Combination, Consideration Transferred, Total	90,714
Goodwill, Ending Balance	17,968
CID Resources [Member] | Trade Names [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	14,200
CID Resources [Member] | Customer Relationships [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 26,000
Finite-Lived Intangible Asset, Useful Life	15 years
CID Resources [Member] | Noncompete Agreements [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 800
Finite-Lived Intangible Asset, Useful Life	5 years
BAMKO [Member]
Payments to Acquire Businesses, Gross				$ 15,200
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares				324,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total				$ 11,400
Amortization of Intangible Assets, Total					500
Business Acquisition, Pro Forma Revenue						19,200
Business Acquisition, Pro Forma Net Income (Loss)						$ 2,000
Business Acquisition, Pro Forma Earnings Per Share, Basic						$ 0.13
Business Acquisition, Equity Interested Issued, Vesting Period				5 years
Business Combination, Liabilities Arising From Contingencies, Earn Out Liability, Before Discount				$ 5,500
Business Combination, Contingent Consideration, Liability, Total					4,100
Business Combination, Contingent Consideration, Liability, Current					900
Business Combination, Consideration Transferred, Total				12,088
BAMKO [Member] | Trade Names [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total				8,900
BAMKO [Member] | Customer Relationships [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total				2,100
BAMKO [Member] | Noncompete Agreements [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total				$ 400
Public Identity [Member]
Payments to Acquire Businesses, Gross			$ 800
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares			54,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total			$ 1,700
Business Acquisition, Equity Interested Issued, Vesting Period			3 years
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High			$ 400
Business Combination, Consideration Transferred, Total			2,300
Goodwill, Ending Balance			$ 600
Tangerine [Member]
Payments to Acquire Businesses, Gross		$ 7,200
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares		83,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total		$ 6,495
Amortization of Intangible Assets, Total					100
Business Acquisition, Equity Interested Issued, Vesting Period		4 years
Business Combination, Liabilities Arising From Contingencies, Earn Out Liability, Before Discount		$ 3,200
Business Combination, Contingent Consideration, Liability, Total					$ 2,500
Goodwill, Ending Balance		4,169
Tangerine [Member] | Trade Names [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total		3,200
Tangerine [Member] | Customer Relationships [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total		$ 3,100
Finite-Lived Intangible Asset, Useful Life		7 years
Tangerine [Member] | Noncompete Agreements [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total		$ 200
Finite-Lived Intangible Asset, Useful Life		7 years

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Note 11 - Acquisition of Businesses - Purchase Price (Details) - USD ($) $ in Thousands	May 02, 2018	Mar. 08, 2016
CID Resources [Member]
Payments to Acquire Businesses, Gross	$ 84,430
Superior common stock issued	3,763
Cash and working capital adjustment	2,521
Business Combination, Consideration Transferred, Total	$ 90,714
BAMKO [Member]
Payments to Acquire Businesses, Gross		$ 15,200
Superior common stock issued		1,657
Business Combination, Consideration Transferred, Total		12,088
Cash consideration at closing		7,222
Contingent consideration		$ 3,209

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Note 11 - Acquisition of Businesses - Aggregate Consideration (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	May 02, 2018	Dec. 01, 2017
Goodwill, Ending Balance	$ 33,955	$ 33,961
CID Resources [Member]
Cash			$ 1,360
Accounts receivable			9,657
Prepaid expenses and other current assets			1,248
Inventories			30,692
Property, plant and equipment			1,134
Contract assets			2,535
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total			41,020
Goodwill, Ending Balance			17,968
Total assets			105,614
Accounts payable			4,472
Deferred tax liability			9,461
Other current liabilities			967
Total liabilities			$ 14,900
Tangerine [Member]
Accounts receivable				$ 5,051
Prepaid expenses and other current assets				969
Property, plant and equipment				131
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total				6,495
Goodwill, Ending Balance				4,169
Total assets				16,815
Accounts payable				3,374
Other current liabilities				1,353
Total liabilities				$ 4,727