XML 23 R8.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Note 1 - Summary of Significant Accounting Policies | 12 Months Ended
--- | ---
Dec. 31, 2018
Notes to Financial Statements |
Significant Accounting Policies [Text Block] | NOTE 1 – Summary of Significant Accounting Policies: a) Business description Superior’s Uniforms and Related Products segment, through its primary signature marketing brands Fashion Seal Healthcare ® , HPI™, and WonderWink ® , manufactures (through third parties or its own facilities) and sells a wide range of uniforms, corporate identity apparel, career apparel and accessories for the hospital and healthcare fields; hotels; fast food and other restaurants; transportation; and the private security, industrial and commercial markets. Superior services its Remote Staffing Solutions segment through multiple The Office Gurus entities, including its subsidiaries in El Salvador, Belize, and the United States (collectively, “TOG”). TOG is a near-shore premium provider of cost effective multilingual telemarketing and total office support solutions. The Promotional Products segment, through the BAMKO, Public Identity and Tangerine brands, services customers that purchase primarily promotional and related products. The segment currently has sales offices in the United States and Brazil with support services in China, Hong Kong and India. b) Basis of presentation The consolidated financial statements include the accounts of Superior Group of Companies, Inc. and its wholly-owned subsidiaries, The Office Gurus, LLC, SUG Holding, 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, 2108, Superior Uniform Group, Inc. changed its name to Superior Group of Companies, Inc. Intercompany items have been eliminated in consolidation. c) Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. d) Revenue recognition and allowance for doubtful accounts The Company recognizes revenue in accordance with ASC 606 effective January 1, 2018. Revenue for our Uniforms and Related Products and Promotional Products segments is recognized when the earnings process is complete, for goods that have no alternative use, and the customer is obligated to purchase the goods under contract termination provisions. Contract termination terms may involve variable consideration clauses such as discounts and rebates. Revenue has been adjusted accordingly for these provisions. Revenue for goods that do have an alternative use for which 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. Revenue from our Remote Staffing segment is recognized as services are delivered. Variable consideration for estimated returns and allowances is recorded based upon historical experience and current allowance programs. Judgments and estimates are used in determining the collectability of accounts receivable and in establishing allowances for doubtful accounts. 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. Changes in estimates are reflected in the period they become known. Charge-offs of accounts receivable are made once all collection efforts have been exhausted. 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. e) Accounts receivable-other The Company purchases raw materials and has them delivered to certain suppliers of the Company. The Company pays for the raw materials and then deducts the cost of these materials from payments to the suppliers at the time the related finished goods are invoiced to the Company by those suppliers. f) Advertising expenses The Company expenses advertising costs as incurred. Advertising costs for of the years ended December 31, 2018, 2017 and 2016, respectively, were $0.7 million, $0.1 million, and $0.1 million. g) Cost of goods sold and shipping and handling fees and costs Cost of goods sold consists primarily of direct costs of acquiring inventory, including cost of merchandise, inbound freight charges, purchasing, receiving and inspection costs, for our Uniforms and Related Products segment and our Promotional Products segment. 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 and totaled $14.0 million, $10.9 million and $10.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. h) 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. i) Property, plant and equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Major renewals and improvements are capitalized, while replacements, maintenance and repairs which do not improve or extend the life of the respective assets are expensed on a current basis. Costs of assets sold or retired and the related accumulated depreciation and amortization are eliminated from accounts and the net gain or loss is reflected in the consolidated statements of comprehensive income within selling and administrative expenses. j) 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;
• | 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 with its goodwill included in the Uniforms and Related Products segment of $22.1 million and $11.9 million 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 that the fair value of the reporting units was more than its carrying value. k) Other intangible assets Other intangible assets consist of customer relationships, non-compete agreements and trade names acquired in previous business acquisitions. The cost, amortization and net value of customer relationships and non-compete agreement as of December 31, 2018 and 2017 were as follows (In thousands):
|  | Customer Relationships |  |  | Weighted Average Life (years) |  |  | Non-Compete Agreement |  |  | Weighted Average Life (years) |  |  | Customer Backlog |  |  | Weighted Average Life (years) |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost |  | $ | 41,530 |  |  |  | 10.8 |  |  | $ | 1,411 |  |  |  | 4.1 |  |  | $ | - |  |  |  | - |
Accumulated amortization |  |  | (7,762 | ) |  |  |  |  |  |  | (326 | ) |  |  |  |  |  |  | - |  |  |  |  |
Net |  | $ | 33,768 |  |  |  |  |  |  | $ | 1,085 |  |  |  |  |  |  | $ | - |  |  |  |  |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost |  | $ | 15,530 |  |  |  | 8.8 |  |  | $ | 5,551 |  |  |  | 5.1 |  |  | $ | 122 |  |  |  | 0.5 |
Accumulated amortization |  |  | (4,782 | ) |  |  |  |  |  |  | (4,619 | ) |  |  |  |  |  |  | (10 | ) |  |  |  |
Net |  | $ | 10,748 |  |  |  |  |  |  | $ | 932 |  |  |  |  |  |  | $ | 112 |  |  |  |  |
Amortization expense for other intangible assets was $3.8 million, $2.4 million and $2.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. Amortization expense for other intangible assets is expected to be $3.8 million in each of the years ending December 31, 2019 through 2022; $3.0 million in 2023; $2.2 million in 2024; and $1.7 million in each of the years 2025 through 2034. As part of the acquisition of HPI in 2013, the Company recorded $4.7 million as the fair value of the acquired trade name in other intangible assets. This asset is considered to have an indefinite life and as such is not being amortized. As part of the acquisition of BAMKO in 2016, the Company recorded $8.9 million as the fair value of the acquired trade name in other intangible assets. This asset is considered to have an indefinite life and as such is not being amortized. As part of the acquisitions of Public Identity and Tangerine in 2017, the Company recorded $0.5 million and $3.2 million, respectively as the fair value of the acquired trade names in other intangible assets. These amounts are considered to have an indefinite life and as such are not being amortized. As part of the acquisition of CID Resources in 2018, the Company recorded $14.2 million as the fair value of the acquired trade name in other intangible assets. This amount is considered to have an indefinite life and as such is not being amortized. l) Depreciation and amortization Plant and equipment are depreciated on the straight-line basis at 2.5% to 5% for buildings, 2.5% to 20% for improvements, 10% to 33.33% for machinery, equipment and fixtures and 20% to 33.33% for transportation equipment. Leasehold improvements are amortized over the terms of the leases inasmuch as such improvements have useful lives of at least the terms of the respective leases. m) Employee benefits Pension plan costs are funded currently based on actuarial estimates, with prior service costs amortized over 20 years. The Company recognizes settlement gains and losses in its consolidated 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. n) Insurance The Company self-insures for certain obligations related to employee health programs. The Company also purchases stop-loss insurance policies to protect it from catastrophic losses. Judgments and estimates are used in determining the potential value associated with 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. o) Taxes on income Income taxes are provided for under the liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The calculation of the Company’s tax liabilities also involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain income tax positions based on estimates of whether, and the extent to which, additional taxes will be required. The Company also reports interest and penalties related to uncertain income tax positions as income taxes. Refer to Note 7. p) Impairment of long-lived assets Long-lived assets, such as property and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. There was no impairment of long-lived assets for the years ended December 31, 2018, 2017, and 2016. q) 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 December 31, 2018, the Company had 3,498,367 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 for all awards granted to employees, 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. r) 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 stock appreciation rights, restricted stock, and performance shares. s) 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). t) 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. u) Risks and concentrations Financial instruments that potentially subject the Company to concentrations of credit risk include cash in banks in excess of federally insured amounts. The Company manages this risk by maintaining all deposits in high quality financial institutions and periodically performing evaluations of the relative credit standing of the financial institutions. When assessing credit risk the Company considers whether the credit risk exists at both the individual and group level. Consideration is given to the activity, region and economic characteristics when assessing if there exists a group concentration risk. At December 31, 2018 and 2017, the Company had no customers with an accounts receivable balance greater than 7.4% of the total accounts receivable. At December 31, 2018 and 2017, the top five accounts receivable customer balances totaled $12.8 million and $14.2 million, respectively, or approximately 20.0% and 28.0% of the respective total accounts receivable balances. The Company’s largest customer for each of the years ended December 31, 2018, 2017, and 2016 had net sales of approximately $20.1 million, $20.6 million and $19.3 million, respectively, or approximately 5.8%, 7.7% and 7.6% of the respective total net sales for the Company. The Company’s five largest customers for the years ended December 31, 2018, 2017 and 2016 had net sales of approximately $47.1 million, $50.7 million and $57.6 million, respectively, or approximately 13.6%, 19.0% and 22.8% of the respective total net sales for the Company. Included in accounts receivable-other on the Company’s consolidated balance sheets at December 31, 2018 and 2017 are receivable balances from a supplier in Haiti totaling $1.6 million and $1.5 million, respectively. In 2018, 2017 and 2016, approximately 24%, 34% and 31%, respectively, of products for our Uniform and Related Products segment were sourced from China. In 2018, 2017 and 2016, approximately 25%, 34% and 32%, respectively, of products for our Uniform and Related Products segment were obtained from suppliers located in Central America and Haiti. In 2018, 2017 and 2016, approximately 28%, 67% and 59%, respectively, of products for our Promotional Products segment were sourced from China. Any inability by the Company to continue to obtain its products from these countries could significantly disrupt the Company’s business. Because the Company manufactures and sources products in various countries, the Company is affected by economic conditions in those countries, including increased duties, possible employee turnover, labor unrest and lack of developed infrastructure. v) Fair value of financial instruments The carrying amounts of cash and cash equivalents, receivables and accounts payable approximated fair value as of December 31, 2018 and 2017, because of the relatively short maturities of these instruments. The carrying amount of the Company’s long-term debt approximated fair value as the rates are adjustable based upon current market conditions. w) 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 materially from those estimates. x ) Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) established Topic 842, Leases, by issuing Accounting Standards Update (“ASU”) No. 2016 - 02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018 - 01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018 - 10, Codification Improvements to Topic 842, Leases; and ASU No. 2018 - 11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The amendments are required to be adopted by the Company on January 1, 2019. A modified retrospective transition approach is required, applying the standard to all leases existing at the date of initial application. The Company elects to use its effective date as its date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company expects to elect the ‘package of practical expedients’, which permits the Company not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company does not expect to elect the use-of hindsight or the practical expedient pertaining to land easement; the latter not being applicable to the Company. The Company expects that this standard will not have a material effect on its financial statements. The Company continues to assess all of the effects of adoption, with the most significant effect relating to the recognition of new ROU assets and lease liabilities on our balance sheet for real estate operating leases. The Company expects to recognize additional operating liabilities ranging from $2.0 million to $4.0 million, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operation leases. In August 2016, the FASB issued ASU 2016 - 15, “Statement of Cash Flows (Topic 230 ): Classification of Certain Cash Receipts and Cash Payments”. The amendment provides guidance on the classification of contingent consideration payments made after a business combination and other cash receipts and payments. The amendments are effective for annual periods beginning after December 15, 2017 and must be applied retrospectively. The Company adopted ASU 2017 - 07 in 2018. As a result, we have reclassified cash payments in excess of the acquisition date fair values from financing activities to operating activities for all periods presented. In March 2017, the FASB issued ASU 2017 - 07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The amendment requires the service cost component be presented in the same line item as compensation costs for the pertinent employees during the period. The other components of net pension cost must be presented outside a subtotal of income from operations, if one is presented. The amendments are effective for annual periods beginning after December 15, 2017 and must be applied retrospectively. The Company adopted ASU 2017 - 07 in the first quarter of 2018. As a result, we have added an additional line item to our consolidated statements of comprehensive income and restated our 2017 results to reflect the change in accounting principle. Service costs are included in selling and administrative expenses and other components of net pension cost are included in other periodic pension costs. In May 2014, FASB issued ASU 2014 - 09, Revenue from Contracts with Customers (Topic 606 ) “ASC 606” that superseded previous revenue recognition guidance, including industry-specific guidance. The core principle of the new guidance is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard provides a five -step analysis of transactions to determine when and how revenue is recognized. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. Additionally, the guidance requires disaggregated disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized. ASC 606 was adopted by the Company on January 1, 2018 using the modified retrospective method. The cumulative effect of applying the new standard was recorded as an adjustment to the opening balance of retained earnings, as further described below. The comparative information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. For our Uniforms and Related Products and Promotional Products segments, our revenue is primarily generated from the sale of finished products to customers as products are shipped and title passes to the customers. For certain contracts with customers, the Company creates an asset with no alternative use to the Company, and the Company has an enforceable right to payment for performance completed to date. For these contracts, we have moved from a point in time model to an over time model in which our measure of progress is finished goods with no alternative use. The new standard has no cash impact and does not affect the economics of our underlying customer contracts. We recorded a net increase in opening retained earnings of $11.2 million as of January 1, 2018 due to the cumulative impact of ASC 606. The impact on revenues for the twelve months ended December 31, 2018 was an increase of $3.5 million as a result of ASC 606.
The opening retained earnings adjustment is as follows (in thousands): |
Net sales |  | $ | 42,880 |
Cost of goods sold |  |  | 27,397 |
Selling and administrative expenses |  |  | 706 |
Income before taxes on income |  |  | 14,777 |
Income tax expense |  |  | 3,532 |
Adjustment to opening retained earnings |  | $ | 11,245 |
Payment of the cumulative tax adjustment will be made over four years as a change in accounting method. The following table disaggregates our net sales by major source (in thousands):
|  | As Reported for |  |  | Balances |  |  |  |  |
|  | Twelve Months |  |  | Without |  |  |  |  |
|  | Ended |  |  | Adoption of |  |  | Effect of Change |
|  | 12/31/2018 |  |  | ASC 606 |  |  | 12/31/2018 |
Uniform and Related Products |  | $ | 238,166 |  |  | $ | 237,095 |  |  | $ | 1,071 |
Remote Staffing Solutions |  |  | 27,272 |  |  |  | 27,272 |  |  |  | - |
Promotional Products |  |  | 80,912 |  |  |  | 78,514 |  |  |  | 2,398 |
|  | $ | 346,350 |  |  | $ | 342,881 |  |  | $ | 3,469 |
Revenue for our Uniforms and Related Products and Promotional Products segments is recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs 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. In accordance with ASC 606 revenue is recorded for goods that the customer is obligated to purchase under the termination terms of the contract which have no alternative use. Contract termination terms may involve variable consideration clauses such as discounts and rebates and revenue has been adjusted accordingly in our ASC 606 adjustment. Revenues from contracts containing termination provisions are recorded at terminal value if applicable and therefore do not represent the selling margins if the sale transaction occurred in the normal course of business. Therefore, revenues recognized under this provision may not reflect the gross margins to be realized for transactions not affected by a contract termination. Revenue from our Remote Staffing segment is recognized as services are delivered and did not generate an ASC 606 adjustment in the twelve month period ended December 31, 2018. The Company does not have any remaining performance obligations as defined under ASC 606 related to revenue recorded for the year ended December 31, 2018. The impact of adoption of ASC 606 on our consolidated balance sheet and statement of comprehensive income as of December 31, 2018 is as follows (in thousands):
|  |  |  |  |  | Balances |  |  |  |  |
|  |  |  |  |  | Without |  |  | Effect of |
|  | As Reported |  |  | Adoption of |  |  | Change |
|  | 12/31/2018 |  |  | ASC 606 |  |  | 12/31/2018 |
Balance Sheet: |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Contract assets |  | $ | 49,236 |  |  | $ | - |  |  | $ | 49,236 |
Inventory |  |  | 67,301 |  |  |  | 95,984 |  |  |  | (28,683 | )
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 24,685 |  |  | $ | 21,981 |  |  | $ | 2,704 |
Other current liabilities |  |  | 14,767 |  |  |  | 12,798 |  |  |  | 1,969 |
Deferred taxes |  |  | 8,475 |  |  |  | 5,589 |  |  |  | 2,886 |
In accordance with ASC 606, the Company has recognized contract assets of $49.2 million as of December 31, 2018 for goods produced without an alternative use for which the Company has an enforceable right to payment but which have not yet been shipped or invoiced to the customer.
|  | As Reported for |  |  | Balances |  |  |  |  |
|  | Twelve Months |  |  | Without |  |  | Effect of |
|  | Ended |  |  | Adoption of |  |  | Change |
|  | 12/31/2018 |  |  | ASC 606 |  |  | 12/31/2018 |
Statement of comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 346,350 |  |  | $ | 342,881 |  |  | $ | 3,469 |
Cost of goods sold |  |  | 224,653 |  |  |  | 221,920 |  |  |  | 2,733 |
Selling and administrative expenses |  |  | 96,710 |  |  |  | 96,758 |  |  |  | (48 | )
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.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration