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Note 9 - Operating Segment Information
 9 Months Ended
Sep. 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 September 30, 2024:

                                                

Net sales

   $ 92,547     $ 33,025     $ 25,038     $ (920 )   $ -     $ 149,690  

Segment EBITDA

     10,733       3,773       3,030       -       (5,882 )   $ 11,654  

Supplemental information:

                                                

Depreciation and amortization

   $ 1,446     $ 944     $ 770     $ -     $ 92     $ 3,252  

Capital expenditures

   $ 127     $ 259     $ 551     $ -     $ -     $ 937  
                                                 
   

Branded Products

    

Healthcare Apparel

    

Contact Centers

    

Intersegment Eliminations

    

Other

    

Total

  

For the Three Months Ended September 30, 2023:

                                                

Net sales

   $ 83,512     $ 29,649     $ 24,121     $ (1,156 )   $ -     $ 136,126  

Segment EBITDA

     6,958       3,055       4,053       -       (4,813 )     9,253  

Supplemental information:

                                                

Depreciation and amortization

   $ 1,452     $ 1,064     $ 880     $ -     $ 119     $ 3,515  

Capital expenditures

   $ 86     $ 115     $ 157     $ -     $ 22     $ 380  

 

   

Branded Products

    

Healthcare Apparel

    

Contact Centers

    

Intersegment Eliminations

    

Other

    

Total

  

For the Nine Months Ended September 30, 2024:

                                                

Net sales

   $ 260,911     $ 88,854     $ 73,422     $ (2,919 )   $ -     $ 420,268  

Segment EBITDA

     27,404       7,685       9,157       -       (17,402 )   $ 26,844  

Supplemental information:

                                                

Depreciation and amortization

   $ 4,513     $ 2,837     $ 2,246     $ -     $ 276     $ 9,872  

Capital expenditures

   $ 714     $ 986     $ 1,124     $ -     $ 87     $ 2,911  
                                                 
   

Branded Products

    

Healthcare Apparel

    

Contact Centers

    

Intersegment Eliminations

    

Other

    

Total

  

For the Nine Months Ended September 30, 2023:

                                                

Net sales

   $ 244,955     $ 85,875     $ 68,935     $ (3,704 )   $ -     $ 396,061  

Segment EBITDA

     21,456       6,556       10,098       -       (14,526 )     23,584  

Supplemental information:

                                                

Depreciation and amortization

   $ 4,826     $ 3,014     $ 2,210     $ -     $ 281     $ 10,331  

Capital expenditures

   $ 2,093     $ 641     $ 1,221     $ -     $ 68     $ 4,023  

 

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

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  

Income before income tax expense

   $ 6,573     $ 3,274     $ 11,815     $ 5,595  

Interest expense

     1,569       2,464       4,897       7,658  

Depreciation and amortization

     3,252       3,515       9,872       10,331  

Impairment charge

     260       -       260       -  

Segment EBITDA

   $ 11,654     $ 9,253     $ 26,844     $ 23,584