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Note 2 - Operating Segment Information
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 2 – 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 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 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 table below.

 

The chief operating decision maker, who is the Company’s Chief Executive Officer, evaluates the performance of our segments. Segment EBITDA is the profitability metric reported to the Company’s CODM for purposes of making decisions about allocation of resources to, and assessing performance of, each reportable segment. Segment EBITDA is calculated as net sales less cost of goods sold and selling and administrative expenses. Segment information for total assets is not presented as this information is not used by the Company’s CODM in measuring segment performance or allocating resources between segments.

 

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 Year Ended December 31, 2024:

                        

Net sales

 $353,314  $119,191  $96,949  $(3,778) $-  $565,676 

Cost of goods sold

  228,591   73,445   44,742   (1,680)  -   345,098 

Gross margin

  124,723   45,746   52,207   (2,098)  -   220,578 

Selling and administrative expenses

  94,384   41,149   42,999   (2,098)  23,492   199,926 

Depreciation and amortization

  5,948   3,892   2,968   -   377   13,185 

Intangible assets impairment charge

  -   260   -   -   -   260 

Segment EBITDA

 $36,287  $8,749  $12,176  $-  $(23,115) $34,097 
                         
  Branded Products  Healthcare Apparel  Contact Centers  Intersegment Eliminations  Other  Total 

For the Year Ended December 31, 2023:

                        

Net sales

 $342,680  $113,878  $91,500  $(4,756) $-  $543,302 

Cost of goods sold

  228,053   71,597   42,352   (2,247)  -   339,755 

Gross margin

  114,627   42,281   49,148   (2,509)  -   203,547 

Selling and administrative expenses

  88,225   38,209   39,682   (2,509)  20,453   184,060 

Depreciation and amortization

  6,744   3,925   2,942   -   384   13,995 

Segment EBITDA

 $33,146  $7,997  $12,408  $-  $(20,069) $33,482 

 

The following table reconciles total Segment EBITDA to income before income tax expense:

 

  

Years Ended December 31,

 
  

2024

  

2023

 

Income before income tax expense

 $14,294  $9,769 

Interest expense

  6,358   9,718 

Depreciation and amortization

  13,185   13,995 

Intangible assets impairment charge

  260   - 

Segment EBITDA

 $34,097  $33,482