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Note 10 - Operating Segment Information
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 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