Superior Group of Companies, Inc.

Good afternoon, everyone. Welcome to Superior Group of Company's first quarter 2022 conference call. With us today are Michael Benstock, the company's chief executive officer, and Andy DeMott, which is its chief operating officer and chief financial officer. After the speaker's remarks, there will be a Q&A session. This call is being recorded, and your participation implies that you agree to this. If you don't, then simply drop off the line. Now, I will turn the call over to Jeff Elliott, Partner and Senior Managing Director of the Three-Part Advisors, who will read the Safe Harbor Statement. Please go ahead.

Thank you, Joe. This conference call may contain forward-looking statements about superior group of companies within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934, the Private Securities Reform Act of 1995, and all rules and regulations issued thereunder. Such statements are based upon management's current expectations, projections, estimates, and assumptions. Words such as will, expect, believe, anticipate, think, outlook, hope, and variations of such words. And similar expressions identify such forward-looking statements, which include statements on the impact of COVID-19 on the company's business, including inventory, supply chain manufacturing, manufacturing capacity at the company's own and contract manufacturing facilities, service capacity, and customer demand. Forward-looking statements involve known and unknown risks and certainties that may cause future results to differ materially from those suggested by the forward-looking statements. Such risks and uncertainties include but are not limited to the following. The effect of the COVID-19 crisis on the U.S. and global markets our business, operations, customers, suppliers, and employees, general economic conditions in the areas of the United States in which the company's customers are located, changes in the markets where uniforms are worn, where promotional products are sold, and where call center services are used, the impact of competition, the company's ability to successfully integrate operations following consummation of acquisitions, and the availability of manufacturing materials. as well as risk uncertainties disclosed in the company's periodic filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the year ended December 31st, 2021, the quarterly report on Form 10-Q for the quarter ended March 31st, 2022, and the eight case filed recently. Shareholders, potential investors, and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements contained herein to conform to actual results or changes in the company's expectations, whether as a result of new information, future events, or otherwise, except as required by law. Please note that all growth comparisons that management makes today will relate to the corresponding period in 2021 and less noted. With that, I'd like to turn the call over to Michael.

Thank you, Jeff. Good afternoon, everyone. Thanks again for joining us for our Q1 2022 earnings call. Today, I will share performance highlights and touch on the current macro environment. After that, Andy will provide an operational financial update. Chief Strategy Officer Phil Cousett and Jake Himmelstein, Banco's president, will participate in the Q&A session following the prepared remarks. Superior Group of Companies is growing in all core businesses and remains focused on executing against our long-term strategic roadmap. Our team has shown resilience in the face of a variety of macro headwinds, which continue to challenge businesses around the world. I would like to acknowledge some recent company achievements and milestones. On May 2nd, we announced the acquisition of Guardian Products, a promotional products distributor focused on the automotive space, which is a natural extension of BAMCO's December 2021 acquisition of Sutter's Mill. Guardian expands our already dominant presence in the automotive market and brings a superb culture and talent to the BAMCO team. We expect Guardian to be immediately accretive to the bottom line. Following a sense of beta testing, our state-of-the-art robotic system in the Eudora, Arkansas distribution facility is finally slated to go live in the next couple of weeks. This is a significant achievement, and I appreciate everyone who contributed over the past years to bring our new upgraded robotics online. Significant savings will be realized as a result of our $12 million investment in this project. Sales synergies realized through the combination of our branded uniforms and branded merchandise sales force and marketing efforts are driving further accelerated integration of these businesses which we will also discuss in more detail later. Our organization is growing and has been executing against initiatives to expand and fortify our team for the future. We anticipate sharing some exciting talent announcements in the coming weeks. Now I am going to review segment highlights Please note that the first quarter 2022 will conclude the unusual year-over-year comparisons related to critical PPE sourcing that the company executed during the height of the pandemic. We'll start to see normalized comparisons in Q2 2022. I will begin with our uniform segment. Our uniform sales during the first quarter increased 5.6% compared to first quarter 2021, excluding PPE sales, and decreased 11.8%, including PPE. Our strong inventory position ensures customers' needs are met during continued supply chain uncertainty. We are seeing our supply chain get healthier by the day with improving fill rates and improving capability to fully capitalize on replenishment opportunities quickly. Through strategic adjustments in our buying behavior, we are mitigating risk and improving reliability to customers, Current favorable inventory stocking positions for both Fashion Seal Healthcare Institutional Healthcare Apparel and Wonder Wing Fashion Healthcare Scrubs by CID puts us on strong footing to service existing and new customers. Higher fill rates are anticipated going forward, which should also lead to more replenishment orders. Coming into 2022, we saw some softness in the first quarter as CID's retailer customers were enjoying the benefit of their consumers having received 2021 stimulus checks that did not reoccur in 2022. That coupled with higher than expected inflation resulted in a more cautious consumer pressuring retailer spending. Some regions posted strong pockets of growth as a result of sales territory realignment and reorganizations done in 2021. We expect to have a strong second half for fiscal 2022, fueled by growth with new product introductions for WonderWink and also including an upcoming product launch with our licensed partner Carhartt. Most importantly, as we begin Q2, we are well aligned to ensure confidence in our ability to service our customers at even better than pre-pandemic levels. International expansion, particularly to Europe and Latin America, remains a key strategic element in the company's long-term growth strategy. The European business is off to a strong start, led by the Director of Sales for Europe, who joined the team last September. We are conducting additional market research to enhance our understanding of the various countries, consumers, and opportunities. Our distribution center in Poland is busy and contributing to reduced delivery times and shipping costs for our Middle Eastern and European customers. Overall, our healthcare team is performing well and demonstrating resilience while facing challenges due to COVID over the past 18 months. We continue to execute against our omnichannel sales strategy, penetrating new international markets, trading group sales, specialty sales, and e-commerce. Business channel optimization remains key, and we are working to increase profitability, optimize content for an improved brand experience, and more deeply evaluate third-party partners. We expect our uniform segment sales to continue to grow. driven both by our healthcare apparel offerings and the significant opportunities being uncovered by our combined branded uniforms and branded merchandise sales force. The integration of our HPI and BAMFCO sales and marketing forces in the third quarter of 2021 continues to yield significant synergies and opportunities. The team recorded multiple meaningful wins that will benefit results later in 2022. Our uniform pipeline is stronger than it has been in many years, and we are now accelerating the combination of additional services within these divisions, which will ultimately result in resegmentation. The branded uniforms and branded merchandise divisions will be aligned into one segment, and healthcare apparel will become its own business segment. Both will still have the benefit of some shared services. We expect this resegmentation to be complete in the second quarter. Core promotional product sales grew by 38.3% in the first quarter of 2022 compared to 2021, excluding PPE sales, and grew by 11.1% year-over-year, including PPE sales. BAMFCO recorded another milestone, posting the highest quarterly net sales of core promotional products in the company's history during Q1. BAMFCO's differentiated offering, serving some of the world's largest companies, continues to gain recognition and market penetration. The Office Gurus, our remote staffing solution segment, continues to grow at a rapid clip, posting a net sales increase for first quarter 2022 of approximately 40% when compared to Q1 2021. TOG's excellent reputation for customer service continues to drive strong demand from new and existing clients. Point in fact, new agents are rapidly joining our team with a total of 367 billable agents added across El Salvador, Belize, and Jamaica in the first quarter, reaching our six month hiring goal early. We experienced elevated absenteeism across our locations early in Q1, which has now subsided as Omicron variants adversely impacted communities around the world, including the regions where we service our customers from. Currently, agents working remotely still account for approximately 70% of our TOG workforce. On another positive note for TOG, Our new center in the Dominican Republic is anticipated to begin operations later this year, fortifying our ability to meet customer demand for the next 18 months to two years. Adaptability and resilience are key to success, especially in the current operating environment. Through strategic planning wholly focused on long-term results, SGC has been able to navigate complex macro challenges while simultaneously growing all core businesses. Our direct factory relationship when sourcing raw materials and finished products is a key differentiator over our competitors. We are purposely long in inventorying raw materials, further mitigating risks impacting the bottom line, including inflation, logistics, and freight costs and supply chain challenges. Now I will turn the call over to Andy to discuss the operational and financial highlights in more detail. Andy?