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Note 10 - Operating Segment Information | 6 Months Ended
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Jun. 30, 2023
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] | N OTE 10 – 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, hotel, food service, entertainment, technology, transportation and other industries. The segment currently has sales offices in the United States, Canada, Brazil, the United Kingdom and Colombia, with support services in China and India. Healthcare Apparel segment: Primarily through our signature marketing brands Fashion Seal Healthcare® and Wink™, 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 gowns. This segment sells healthcare service apparel 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, Jamaica, Dominican Republic and the United States (collectively, “TOG”), 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 tables below. The Company evaluates the performance of each operating segment based on several factors of which the primary financial measures are net sales and income before income tax expense. 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 |
As of and For the Three Months Ended June 30, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 79,592 |  |  | $ | 28,072 |  |  | $ | 22,758 |  |  | $ | (1,260 | ) |  | $ | - |  |  | $ | 129,162 |
Cost of goods sold |  |  | 53,952 |  |  |  | 17,653 |  |  |  | 10,554 |  |  |  | (593 | ) |  |  | - |  |  |  | 81,566 |
Gross margin |  |  | 25,640 |  |  |  | 10,419 |  |  |  | 12,204 |  |  |  | (667 | ) |  |  | - |  |  |  | 47,596 |
Selling and administrative expenses |  |  | 20,362 |  |  |  | 9,466 |  |  |  | 9,614 |  |  |  | (667 | ) |  |  | 4,607 |  |  |  | 43,382 |
Other periodic pension cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 214 |  |  |  | 214 |
Interest expense |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,624 |  |  |  | 2,624 |
Income (loss) before income tax expense |  | $ | 5,278 |  |  | $ | 953 |  |  | $ | 2,590 |  |  |  | - |  |  | $ | (7,445 | ) |  | $ | 1,376 |
Depreciation and amortization |  | $ | 1,710 |  |  | $ | 976 |  |  | $ | 662 |  |  | $ | - |  |  | $ | 80 |  |  | $ | 3,428 |
Capital expenditures |  | $ | 736 |  |  | $ | 64 |  |  | $ | 683 |  |  | $ | - |  |  | $ | 46 |  |  | $ | 1,529 |
|  | Branded Products |  |  | Healthcare Apparel |  |  | Contact Centers |  |  | Intersegment Eliminations |  |  | Other |  |  | Total |
As of and For the Three Months Ended June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 102,039 |  |  | $ | 26,288 |  |  | $ | 21,466 |  |  | $ | (1,860 | ) |  | $ | - |  |  | $ | 147,933 |
Cost of goods sold |  |  | 72,954 |  |  |  | 18,904 |  |  |  | 8,692 |  |  |  | (750 | ) |  |  | - |  |  |  | 99,800 |
Gross margin |  |  | 29,085 |  |  |  | 7,384 |  |  |  | 12,774 |  |  |  | (1,110 | ) |  |  | - |  |  |  | 48,133 |
Selling and administrative expenses |  |  | 24,004 |  |  |  | 9,801 |  |  |  | 8,402 |  |  |  | (1,110 | ) |  |  | 4,872 |  |  |  | 45,969 |
Goodwill impairment charge |  |  | 4,135 |  |  |  | 20,323 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 24,458 |
Intangible assets impairment charge |  |  | 5,581 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,581 |
Other periodic pension cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 528 |  |  |  | 528 |
Interest expense |  |  | 63 |  |  |  | 34 |  |  |  | - |  |  |  | - |  |  |  | 486 |  |  |  | 583 |
Income (loss) before income tax expense |  | $ | (4,698 | ) |  | $ | (22,774 | ) |  | $ | 4,372 |  |  | $ | - |  |  | $ | (5,886 | ) |  | $ | (28,986 | )
Depreciation and amortization |  | $ | 1,589 |  |  | $ | 988 |  |  | $ | 549 |  |  | $ | - |  |  | $ | 54 |  |  | $ | 3,180 |
Capital expenditures |  | $ | 1,401 |  |  | $ | 539 |  |  | $ | 840 |  |  | $ | - |  |  | $ | 71 |  |  | $ | 2,851 |
|  | Branded Products |  |  | Healthcare Apparel |  |  | Contact Centers |  |  | Intersegment Eliminations |  |  | Other |  |  | Total |
As of and For the Six Months Ended June 30, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 161,443 |  |  | $ | 56,226 |  |  | $ | 44,814 |  |  | $ | (2,548 | ) |  | $ | - |  |  | $ | 259,935 |
Cost of goods sold |  |  | 109,904 |  |  |  | 35,707 |  |  |  | 20,821 |  |  |  | (1,201 | ) |  |  | - |  |  |  | 165,231 |
Gross margin |  |  | 51,539 |  |  |  | 20,519 |  |  |  | 23,993 |  |  |  | (1,347 | ) |  |  | - |  |  |  | 94,704 |
Selling and administrative expenses |  |  | 40,415 |  |  |  | 18,968 |  |  |  | 19,278 |  |  |  | (1,347 | ) |  |  | 9,447 |  |  |  | 86,761 |
Other periodic pension cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 428 |  |  |  | 428 |
Interest expense |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,194 |  |  |  | 5,194 |
Income (loss) before income tax expense |  | $ | 11,124 |  |  | $ | 1,551 |  |  | $ | 4,715 |  |  | $ | - |  |  | $ | (15,069 | ) |  | $ | 2,321 |
Depreciation and amortization |  | $ | 3,374 |  |  | $ | 1,950 |  |  | $ | 1,330 |  |  | $ | - |  |  | $ | 162 |  |  | $ | 6,816 |
Capital expenditures |  | $ | 2,007 |  |  | $ | 526 |  |  | $ | 1,064 |  |  | $ | - |  |  | $ | 46 |  |  | $ | 3,643 |
|  | Branded Products |  |  | Healthcare Apparel |  |  | Contact Centers |  |  | Intersegment Eliminations |  |  | Other |  |  | Total |
As of and For the Six Months Ended June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 199,122 |  |  | $ | 56,856 |  |  | $ | 39,440 |  |  | $ | (3,903 | ) |  | $ | - |  |  | $ | 291,515 |
Cost of goods sold |  |  | 141,822 |  |  |  | 37,457 |  |  |  | 15,985 |  |  |  | (1,663 | ) |  |  | - |  |  |  | 193,601 |
Gross margin |  |  | 57,300 |  |  |  | 19,399 |  |  |  | 23,455 |  |  |  | (2,240 | ) |  |  | - |  |  |  | 97,914 |
Selling and administrative expenses |  |  | 45,561 |  |  |  | 19,888 |  |  |  | 14,774 |  |  |  | (2,240 | ) |  |  | 10,200 |  |  |  | 88,183 |
Goodwill impairment charge |  |  | 4,135 |  |  |  | 20,323 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 24,458 |
Intangible assets impairment charge |  |  | 5,581 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,581 |
Other periodic pension cost |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,056 |  |  |  | 1,056 |
Interest expense |  |  | 118 |  |  |  | 52 |  |  |  | - |  |  |  | - |  |  |  | 712 |  |  |  | 882 |
Income (loss) before income tax expense |  | $ | 1,905 |  |  | $ | (20,864 | ) |  | $ | 8,681 |  |  | $ | - |  |  | $ | (11,968 | ) |  | $ | (22,246 | )
Depreciation and amortization |  | $ | 2,972 |  |  | $ | 1,969 |  |  | $ | 1,044 |  |  | $ | - |  |  | $ | 118 |  |  | $ | 6,103 |
Capital expenditures |  | $ | 2,944 |  |  | $ | 1,250 |  |  | $ | 2,771 |  |  | $ | - |  |  | $ | 74 |  |  | $ | 7,039 |

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