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Note 9 - Operating Segment Information
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 9 – 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, Canada, 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, retailers and consumers 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.

 

During the fourth quarter of 2023, our chief operating decision maker began to evaluate the performance of our segments using Segment EBITDA instead of income before income taxes. The Company has modified its presentation of segment performance to be consistent with this change, including prior periods presented for consistent and comparable presentation. Amounts that are included in income before income tax expense and excluded from Segment EBITDA include the following: interest expense and depreciation and amortization 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

 

For the Three Months Ended June 30, 2024:

                        

Net sales

 $81,296  $26,592  $24,832  $(984) $-  $131,736 

Segment EBITDA

  6,724   1,277   3,181   -   (5,623) $5,559 

Supplemental information:

                        

Depreciation and amortization

 $1,567  $956  $753  $-  $92  $3,368 

Capital expenditures

 $322  $554  $413  $-  $10  $1,299 
                         
  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

For the Three Months Ended June 30, 2023:

                        

Net sales

 $79,592  $28,072  $22,758  $(1,260) $-  $129,162 

Segment EBITDA

  6,988   1,929   3,252   -   (4,741)  7,428 

Supplemental information:

                        

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

 

For the Six Months Ended June 30, 2024:

                        

Net sales

 $168,364  $55,829  $48,384  $(1,999) $-  $270,578 

Segment EBITDA

  16,671   3,912   6,127   -   (11,520) $15,190 

Supplemental information:

                        

Depreciation and amortization

 $3,067  $1,893  $1,476  $-  $184  $6,620 

Capital expenditures

 $587  $727  $573  $-  $87  $1,974 
                         
  

Branded Products

  

Healthcare Apparel

  

Contact Centers

  

Intersegment Eliminations

  

Other

  

Total

 

For the Six Months Ended June 30, 2023:

                        

Net sales

 $161,443  $56,226  $44,814  $(2,548) $-  $259,935 

Segment EBITDA

  14,498   3,501   6,045   -   (9,713)  14,331 

Supplemental information:

                        

Depreciation and amortization

 $3,374  $1,950  $1,330  $-  $162  $6,816 

Capital expenditures

 $2,007  $526  $1,064  $-  $46  $3,643 
                         

 

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

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income before income tax expense

 $650  $1,376  $5,242  $2,321 

Interest expense

  1,541   2,624   3,328   5,194 

Depreciation and amortization

  3,368   3,428   6,620   6,816 

Segment EBITDA

 $5,559  $7,428  $15,190  $14,331