Note 2 - Operating Segment Information

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 2 – Operating Segment Information:

The Company manages and reports the following segments:

Branded Products segment: Primarily through our signature marketing brands BAMKO® and HPI®, we produce and sell customized merchandising solutions, promotional products and branded uniform programs. Branded products are sold to customers in a wide range of industries, including retail chain, food service, entertainment, technology, transportation and other industries. The segment currently has sales offices in the United States and Brazil, with support services in China and India.

Healthcare Apparel segment: Primarily through our signature marketing brands Fashion Seal Healthcare®, Wink® and CID Resources, we manufacture (through third parties or in our own facilities) and sell a wide range of healthcare apparel, such as scrubs, lab coats, protective apparel and patient apparel. This segment sells its products to healthcare laundries, dealers, distributors and retailers primarily in the United States.

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

Intersegment eliminations include the elimination of revenues and costs from services provided by the Contact Centers segment to the Company’s two other segments. Such costs are recognized as selling and administrative expenses in the Branded Products and Healthcare Apparel segments. Income and expenses related to corporate functions that are not specifically attributable to an individual reportable segment are presented within Other in the table below.

The chief operating decision maker, who is the Company’s Chief Executive Officer, evaluates the performance of our segments. Segment EBITDA is the profitability metric reported to the Company’s CODM for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. Segment EBITDA is calculated as net sales less cost of goods sold and selling and administrative expenses. Segment information for total assets is not presented as this information is not used by the Company’s CODM in measuring segment performance or allocating resources between segments.

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

	Branded Products		Healthcare Apparel		Contact Centers		Intersegment Eliminations			Other			Total
For the Three Months Ended June 30, 2025:
Net sales	$	92,647	$	28,253	$	23,977	$	(832	)	$	-		$	144,045
Cost of goods sold		59,631		18,237		11,364		(513	)		-			88,719
Gross margin		33,016		10,016		12,613		(319	)		-			55,326
Selling and administrative expenses		25,432		10,078		11,612		(319	)		5,437			52,240
Depreciation and amortization		1,395		854		639		-			90			2,978
Segment EBITDA(1)	$	8,979	$	792	$	1,640	$	-		$	(5,347	)	$	6,064
	Branded Products		Healthcare Apparel		Contact Centers		Intersegment Eliminations			Other			Total
For the Three Months Ended June 30, 2024:
Net sales	$	81,296	$	26,592	$	24,832	$	(984	)	$	-		$	131,736
Cost of goods sold		53,170		16,392		11,871		(452	)		-			80,981
Gross margin		28,126		10,200		12,961		(532	)		-			50,755
Selling and administrative expenses		22,969		9,879		10,533		(532	)		5,715			48,564
Depreciation and amortization		1,567		956		753		-			92			3,368
Segment EBITDA(1)	$	6,724	$	1,277	$	3,181	$	-		$	(5,623	)	$	5,559

	Branded Products		Healthcare Apparel		Contact Centers		Intersegment Eliminations			Other			Total
For the Six Months Ended June 30, 2025:
Net sales	$	179,121	$	55,516	$	48,202	$	(1,697	)	$	-		$	281,142
Cost of goods sold		118,418		35,367		22,608		(1,018	)		-			175,375
Gross margin		60,703		20,149		25,594		(679	)		-			105,767
Selling and administrative expenses		48,852		19,604		22,533		(679	)		12,032			102,342
Depreciation and amortization		2,875		1,766		1,361		-			180			6,182
Segment EBITDA(1)	$	14,726	$	2,311	$	4,422	$	-		$	(11,852	)	$	9,607
	Branded Products		Healthcare Apparel		Contact Centers		Intersegment Eliminations			Other			Total
For the Six Months Ended June 30, 2024:
Net sales	$	168,364	$	55,829	$	48,384	$	(1,999	)	$	-		$	270,578
Cost of goods sold		108,497		34,119		22,779		(889	)		-			164,506
Gross margin		59,867		21,710		25,605		(1,110	)		-			106,072
Selling and administrative expenses		46,263		19,691		20,954		(1,110	)		11,704			97,502
Depreciation and amortization		3,067		1,893		1,476		-			184			6,620
Segment EBITDA(1)	$	16,671	$	3,912	$	6,127	$	-		$	(11,520	)	$	15,190

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Income before income tax expense	$	1,836	$	650	$	930	$	5,242
Interest expense		1,250		1,541		2,495		3,328
Depreciation and amortization		2,978		3,368		6,182		6,620
Segment EBITDA	$	6,064	$	5,559	$	9,607	$	15,190