Superior Uniform Group, parent company of BAMKO, Inc. (asi/131431), announced third-quarter net sales of $65.3 million – translating into 15.2% year-over-year growth for the quarter. BAMKO accounted for approximately 11% of Superior’s net sales increase. The company’s Uniforms and Related Products segment contributed 3.4% of the increase with the rest coming from the company’s Remote Staffing Segment.
It was the 16th consecutive quarter that Superior has recorded a sales increase. Superior’s net income grew to $4.4 million from $4 million in the third quarter of 2015, and income per diluted share increased one cent to 29 cents.
Superior acquired BAMKO in March for a sum of $15.8 million. Acquisition-related expenses have impacted Superior’s 2016 net income by $1.1 million.
In an earnings call, Superior CEO Michael Benstock noted that BAMKO secured two large orders in the first half of the year, and that as BAMKO’s sales expand, the company “will see less lumpiness in their business, which in turn lessons the impact of large orders that may hit one quarter and not repeat the following quarter.”
Benstock also said that Superior is actively pursuing possible distributor acquisitions to fold into BAMKO. He said that Superior has identified over 400 promotional product businesses that meet its initial acquisition criteria: $10-$25 million in sales, good geographic penetration, a strong customer base or product lines that can be leveraged. “Our capital structure regularly supports our goal of making one or two bolt-on acquisitions a year in this area as we identify the right opportunities,” said Benstock, adding that acquisitions will occur in 2017.
For the entirety of 2016, Superior’s net sales have increased 19.6% to $187.9 million. Net income for the first nine months of the year remained flat at $9.7 million while earnings per diluted share declined two cents to 65 cents.
Superior is tracking to grow organic sales by 7% with expectations for a solid fourth quarter. In the earnings call, the company said it believes BAMKO can potentially generate more than 15% annual organic growth.