Superior Group of Companies (SGC) 27 Jul 182018 Q2 Earnings call transcript

Good afternoon everyone. Welcome to Superior Group of Companies 2018 Second Quarter Earnings Conference Call. With us today are Michael Benstock, the company's Chief Executive Officer; and Andy Demott, its Chief Operating Officer and CFO. After the speaker's opening remarks, there will be a question-and-answer session.

You will receive instructions on how to ask a question at that time. recorded participation being agree that is this. to call and implies your you This

not, drop then at do you If simply this off time. line the

Elsherbini, Halliburton Now Vice statement. read Please will turn call Harbor to I ahead. the the Safe President Relations, Investor Hala of go who will over Senior

results and contain subject conference mind and of Superior operations. uncertainties, bear statements in Group you to its these may of you. This Group forward-looking today. risks and results Thank SEC. in Companies' forward-looking and anticipated is information that risks call may hear and about Form business the Superior with release this Companies' from in opportunities actual the differ Please what filings Many company's morning's news uncertainties of are of other XX-Q, described

this call call expectations noted. comparisons all Please duty Michael. corresponding otherwise to growth the With on management's in relate to unless Management to not made statements that, call period statements or makes that conference forward-looking the in management based conference during undertake XXXX, current does turn are this I'll elsewhere. over update any today beliefs. will and that Forward-looking note these

CID provide metrics up much a of I'll with the the alliance channel financial beginning the of CID through is to be is third to by share QX then Thank XXXX. some care come on good be Andy and per strategic wrap additional will with largest quarter remarks, acquisition is closing afternoon earnings we'll undertaken transformative, to I'll review. Resources. and earnings and his accretive back very history. in everyone. accelerates then provide and financial along CID as Companies growth giving Group Promotional and to results your in both our take to Superior out top Uniform line were health second SGC's our our in outstanding that retail consumers questions. The consistently growth. Office moderated you, acquisition growth and quarter Gurus on mixed, to results organic XXXX Welcome second delivered call. of Products expected It recent some quarter segments. color Hala, happy again our start usual our to same the our

During managed our slowed short-term. growth factors the in through several quarter, we that trajectory the

However, business plan making we against executing are and investments our strategic deliver long-term to performance. sustainable

We realize the efficiencies and are three our acquisitions, on business. diligently capitalize opportunities to integrate working recent our brand-building across operational

in our with improvement For net XX.X%, acquisitions quarter the of the from Resources XXXX XXXX. and This in marks net Promotions the CID coming quarter, consolidated sales Public increase. our of increased of of and sales year-over-year Tangerine preponderance consecutive Identity XXrd

our see out. scale even lumpiness we from the in sales expands, the to varying expect cycles performance quarterly As

Uniform gain cross-selling wins executing our Uniform now which sales CID. opportunities of HPI, from comprises between Fashion a acquisition our high are successfully across Additionally, Promotional priority, The Superior Healthcare cross-selling segment, CID, in came segments. the and we now divisions largely and remain and Group, Seal Uniform

larger opportunities XXXX and and our indicate with customer address these materialize scale. should Recent can decisions stronger lag we the has pipeline While we sales, created in near see grown purchasing forward, than moving expanded significantly in deferrals term. purchasing now is our are a with ever, that of engagements

year. and results of encouraged move are into second-half we the We positive the on improved as

CID consumers market to Resources, establishes scrub position we which our markets. are selling through strengthens online our and presence our new excited retail the and brick-and-mortar forward, Looking about with alliance

marketplace much to presented laundries market through market market but favorable apparel recently trends. the health size in level. addressable health legacy us we of U.S. $XXX than X,XXX for we offering also through we It larger and has providers in branded complements continue and points a institutional the in more million Our high-growth, over at of institutional to of able to more penetrate fastest-growing are representing the laundry with the care our already X,XXX care all by U.S. will the medical served of laundries compelling well Latin dealer uniforms and that well, our will retailers highly CID's recognizable at wholesale tailor America. that to. more through opportunity channels be with This as than price market customer sell scrub to increases serve CID health is significance the base. at well-established market the the of has our estimated selling brands stores the opportunity as recession-resistant one care now network Xx

CID improving offering welcoming iconic also not will very forward. well. which team in Superior high employee integration, by Bradley, distribution, proposition and Carhartt, WonderWink, the our of channels, manage IT consumer this direct all continue are our customers see brands appeal. stages to the about the to across SGC of has now have value could HPI I.D., gone family. entering upside We're synergies as Vera CID moves of excited we be project The We as ID retail and and We more consolidation such which middle our additional and teams,

Our objective this is of process care customers, our first exceptional and throughout taking foremost.

eye Identity. and High level mission is which Performance well team next growth executing is leadership HPI, the while of their Our in understands for named now the keeping

call, added all gaining and value in Uniform the our Our efforts. segments. our this proposition on results. of the been in as enhancing team our The synergies project-oriented and quarter. nature service efforts. causing sales, are facilities, customer expansion further fulfillment while drag last sales our Promotional some assured, team fully business has lumpiness both and in and through discussed also our expected created integration working reinforcing diligently distribution Sales The BAMKO not goals maximizing were unmatched operating is traction to recognized and Rest

As on the right that is firmly forward, we long-term believe we look BAMKO path.

team resolved larger, capturing on levels sales our We of are invigorated to leverage out strengths to build growth. efforts intensifying all higher a

of are have jumping make taking integrations we call, to our closing As our short on pause these there of a acquisitions been the any front consolidation the candidates, considerable maintain quarterly is and amount space. We has note, healthy right of synergies promotional on if us. we acquisition of opportunistic on Of deal others. capitalize be said a in sure and in pipeline well will we last do a before in

year, The demand. triple has to our growing there Staffing on giving segment, performance Office of Office our eclipsed business can our staff we renovation capability The us This more Remote levels expectations. say? Belize, completed Moving Gurus, is to and the second Gurus' you customer expansion than strengthening. booming meet and consistently This to what

are prior ago. our construction up El in filling Salvador in quickly that just a call, space reported completed As we two years

forward If site are in selection months. also in We Jamaica incorporated Jamaica. in be the moving now goes plan, we'll coming to according on all

media me prominently cannot Chinese are happened been of and doubt, and, that every in to the to currently are and trends Let We that that regulations for speak implemented benefit tariffs in could the outside have Two capture course, Uniform the happening environmental we a future. economy robust aggressively market segments. put possible. the in the be control Promotional the operating are forces. place No those and working are things that in

are positive the and types factors regularly navigating in issues as prospering constantly company, with the of the both negative over experience and have we return remarks. closing will and then a now control. our and outside environments. I these and all economic other However, these evaluating of to call Andy, turn monitoring impacts I'll my XXX-year-old of that Rest of nearly of we assured

this afternoon, good and everyone. XX, XXXX, Michael, Thanks, our quarter We second XX-Q Form for morning. the ended June filed

So I'll to limit income key review quarter statement period. and highlights for my the X-month

new standard, Consolidated net our of an call, ASC noted Promotional sales segment increase our reflect results XX.X% last our the XX% with revenue the accounting As recognition acquisitions were on $XX.X CID XXX. contributing May Products gain. acquisition X first our and of of over of adoption in year, quarter the million,

For and year-over-year the Products sales in sales ASC Products, adoption due X.X%. represented basis, X.X%; Related which in the Uniforms the partially CID was X.X%; reduction Staffing accounted X.X% and increase. Promotional net segment in decreases contributed which increased contribution, in XX.X% by $X.X Related contributed increases This X.X%. organic to net and Uniforms Remote and for which sales of in On of acquisition, partially of a the by million, lower Products, offset XXX subsequent largely contributed Solutions offset

Additionally, of in X.X% sales customer XXXX impact contributed the second in the legacy XXXX. remaining a the lost related inventory of quarter to

was service at will we reduced approximately $X.X this net While continue last by is quarter. the this comparison that customer. impact the reduction in This of million loss the be second to rate, impacted quarterly the a customer

a customers, from continue In we Solutions, continue opportunities outside experienced again, further as As organic year once our and increased move by to sales we demand to are softened but new beginning of mentioned, purchasing customer quarter, strong Remote significant during seeing and deferrals Michael and growing base. the to build, existing ago penetrating ago meet XX.X% sales Staffing quarterly and forward. customer a engagements our growth growth pipeline year to from

in the increased XXX.X%, a to shifting partially this Products X.X% timing, impact contribution significant the to lagged well of and product work, adoption of Promotional acquisitions from from BAMKO which XXXX our to declines as of with as from of XX.X%. contributed some contributed ASC were Organic business to Identity a Our in increases segment the decrease due Overall, segment sales that offset positive variability and increase. Promotions Tangerine growth XXX.X% integration of XXX, by combination Public Tangerine.

the remain we second-half As confident we the year, expect and in performance Michael for team. long-term of BAMKO improved in our discussed, prospects the

carries late addition XXXX, consolidated lower was to of generate the rest compared flat were on than XX.X% quarter mix second higher our XXXX, This acquired margins. margins, tends period. business. impact the CID, the relatively margin to much which of in in year-ago Tangerine, was During gross mitigated the at by of which customer somewhat gross weighed XX.X% which a gross

at carry our would second XX.X% when is and I margins noted of the XX.X% the gross service to Products looking contract in XX.X% our in improved mentioned current improvement factor margin earlier. to as a reflects margins quarter margin requirements inclusion better in year's profitability. margins, Exclusive our does operating the Related the measure of we the in is XXXX. compared for to individual Gross which in This gross profile. gross Therefore, higher attributed quarter. a been period, past, have As overall key of segment CID, CID our Uniforms last of second in

is on prior environment discussed fairly calls, we competitive. pricing As the

Gross current the We company-wide XX.X% margins are last with XX.X% protecting and attributed scales year's better lower Remote This domestic expenses Tangerine earlier. in the keenly generate engagement price in mentioned XX.X% margins, in in growth second were our compared when in as down segment increases, offshore which in economies to margins improvement of second that last margins were increased improving where to SG&A quarter our center. our and much our quarter. $XX.X locations, million. margins our the Promotional to inclusion is attributed to I segment on Staffing the quarter. of This coming is this to period, has in is at Products segment at gross focused through improvements. the Consolidated profitability XX% in in than call fact year's we Gross XX.X% compared SG&A latest improved decrease

million year-ago of increased segment XXXX with as of total would the the of period. XX% expenses percentage expenses, the XX.X% SG&A included sales, SG&A XX.X% these This a in percentage XX.X% As in Uniform to the in have increased net compared CID a $X.X Net our to Uniform to for approximately compared sales XX.X% acquisition-related consolidated acquisition. net SG&A quarter. been of to associated segment.

higher to net which SG&A business, tends has margins, carry also as percentage CID's a Additionally, gross of higher sales.

have For and as a higher at exclusive with from and a SG&A a of year, slightly XXXX. XX.X% the leverage. Promotional SG&A as last of would compared of been sales percentage to exclusive fixed-cost sales CID, purposes, second expenses XX.X% acquisition-related segment XX.X% as quarter SG&A from in of higher of sales Products percentage benefit up comparison expenses were

market fair sales. net was of liabilities a X.X% amortization a adjustment from Additionally, percentage contributing acquisition-related acquisitions, XXXX the contingent reduction expense our as decrease offset by from for value X%. came a contributing higher partially This

second of percentage $X of quarter a million, XX.X% as have the period, ahead that business segment the as to for was $X.X to in compared year-ago of -- X% we reduced was the of of with million this to XX.X% acquisition to well by margin as in second points operating X.X%. continue X% invest CID operating impacted SG&A segment contingent value versus XXX stay X.X% the from earlier in at two the XXXX Staffing the increased in down XXXX our Remote sales that operations liabilities of of percentage is impact positively of acquisition-related quarter experiencing. Note reduction in impact net XXXX. from margin as Income led QX Operating significant discussed X.X% associated of slightly expenses the as was growth adoption by acquisition-related the fair of which year. the current margin the Our ASC by

see our synergies acquisitions, our of across increase approximately net the to operating million. of efficiently on operating and CID contributed $XX.X integrate recent expect meaningful in We Note leverage as leverage sales our million quarter scale, platform. that income approximately $X.X we

a increase and minor $X.X on XX% nondeductible contributing benefit expenses X.X%, income The share-based X.X%; per other contributing changes. foreign decreased XX.X% in more tax $X.XX tax share. XX.X% net X.X%; reforms compensation, per than with was $X.XX contributing X.X%; or effective million rate decrease XX% an to of or by GILTI with our Net diluted to taxes, from income $X.X in addition diluted tax income Our million was of last share offset associated acquisition versus which compared along the excess state year. earnings, benefit tax for contributed corporate the the quarter the

our addition of acquisition-related second earnings ASC for impact share earnings per XXXX In shares share adoption second operating I that approximately $X.XX. quarter was was reduced of purposes, an to diluted expenses per the quarter by per diluted operating outstanding, in of additional And higher expenses comparison on due earlier. XXX $X.XX share. mentioned lower to The the XXXX elevated X.X% leverage

review accounted with sales the increased for of CID employee of higher inclusive sales XXXX. lost of basis, X-month XX.X% Promotional XX.X% QX the segment sale a impact the of with a Net our reduction an X.X%. net ASC $X.X the impact Let's $XXX.X ASC contributing increased to of the to the declined increased our acquisition the in first-half XXXX from shift by X-month quick acquisitions. XXX.X%, positive which the from net XX.X% in included XXXX as on of XXX for discussed X loss results. adoption remaining Products inventory million, Products of customer contributing acquisitions XXX.X% On period. of Promotional XXX, the May customer organic the sales sales, by and sales customer for million, earlier. contribution Uniform as X.X%, driving for well negative partially ID offset This recent

-- customers see As decreased variation margins less the expands gross the by in first-half to the the noted first-half. discussed to Remote as XX.X%. Staffing in quarter in review we scale you. in second should factors the XX.X% from time. segment past, the over same increased margins is -- sales in earlier. This to XX% in Consolidated decrease attributable second Thank outside the second-half quarter or the of

$X of higher As was for have XXXX CID, approximately from tends SG&A were million the to which percentage for expenses the expenses Uniform first-half comparable expenses a also segment expenses. sales, in XX.X% to the period. SG&A note, XX.X% in included Of SG&A compared acquisition-related

amounts. SG&A income expenses, been the XXX segment, of period XXXX for with impact XX.X% to on CID expenses ASC purposes, in comparison and acquisition XXXX. XX.X% and was million, the X.X% compared period, to first-half weighing in would the excluding decreased the the of X.X% margin these $X.X Uniform operating have related Operating For acquisition-related X-month and for

free few liquidity remains growth. cash to to balance financial a supported condition -- future for flow Now, fund very cover sheet sufficient our our healthy, items; by and

to XX With months approximately CID, increased X.Xx. we our trailing approximately the acquisition from X.Xx leverage of EBITDA

capital, financed acquired, transaction paid the to As the million. adjustments net $XX.X term with X-year working shares $XX to approximately approximately loan for We subject for and issued we related acquisition. a XXX,XXX million cash a reminder, of

has $XXX.X increased long-term. long-term million, reviewing Our the are capital debt and to we various for options

history cash with CapEx. at We the The and remains a period leverage the ample of position CID and long This quickly have key on our sheet to flexibility, strong maintaining the done prior we past. of focus reduce strengths, generation $X.X we keen our our ongoing in is are a million. decrease remains the solid to looking financial acquisition due as relatively cash from and balance current one X-month have

the of the quarterly value dividends months, a million, closing We I'll paid year. return outlook to continue now turn a of $X.X we the in dividend. to an form XX%. first And call his back to the of six cash our of for remainder during shareholders increase remarks and for the Michael general

In summary, quarter intensely lot of Thanks, of was Group an a there. numbers busy Andy. Companies. for got quarter second Superior We've

on, realigning us. of of the the with that done We expansion in for worked acquisitions as HR the of formidable with keep able some course, warehouses two improvements acquisition technology have we pipeline addition done Identity. interesting be were running; higher up to next levels being we in our of up name CID XXXX talent last our whole opportunities: of Public on things new sourcing revenue; the center large level very of Tangerine to getting and, host in Just a itself Jamaica added we strategies area higher the Identifying CID; a recruiting worked of certainly business. for expanding to the within seek call second our our acquisitions country quarter; a our and as quarter needs still integration of and year,

exciting our for capture strengthen every first-half our We're CID expanding of addressable significant gone success. diversified brand than The strategy earlier it to capture laying addition of We're on customers' expectations. and optimistic experience. existing business we're And hard advantageous new can margin position market higher the aligned our market. this our on elevate by acquisition by. where return days of and channels. and our long-term stepping closing, ability beyond anticipated, position more have we're very focused at investment. an that to SGC strongly is and time, than in market to even investments in core new, course We to we're great working the a activities day, with model now puts groundwork share we presenting less XX enhanced opportunities broader a finding our single This Since even

for a platform have our to entire our our we vision, and to and SGC, shareholders. value prudently larger, we to create achieve As executing plan long-term across sustainable objectives ultimately companies are of clear

questions, go outlook, I'd Before our to contributions acquisition time updated we to X-year and CID. includes from horizon recent reflects long-term a our which like review of

Our grow business will we that annual long-term target will growth year. by per growth XX%. X%. than two period for or over In Uniform approximately we our average supplemented of is rate average targeting are in organically the Products our X-year be Promotional the next acquisitions greater one annual Organic of segment,

year Remote Gurus, Office For average years. the on X.X% is a to unchanged, the five expect over $X per approximately segment million consolidated basis, this company-wide outlook Solutions, add we for average of next The our growth Staffing sales the give organic would years. On five next approximately and us

we additional with this acquisitions, a large growth part as strategic they play Of also plan. course, to supplement intend our in

As BAMKO accretive and we mentioned expect acquisitions. seek continue strategic to earlier, out to

than Promotional will On more pipeline continue to side, likely segment. of acquisition our the nurture we sporadic candidates, and our Uniform these those in be

drives want we their which thank our always, customer's operational team elevates As experience and dedication our and our to for success. excellence,

that and plan. offerings building the our company levels and scale are comprehensive model, diversified service for we're customer a our our are fortified growth create foundation long-term world-class differentiated of confident proud We and

Now for your open the we'd questions. like call up to

Steinke ahead. of comes And first from Barrington Kevin Instructions] [Operator question go Please Research. our

afternoon everyone. Good

Kevin. afternoon good Hey,

Uniform about the off wanted I segment. start to talking pipeline in by the

at the it a about organic pause talked things expect the on to typical growth XXXX year. should of rather be than decision-making 'XX? last of forward move pace which more through move to benefit pipeline, still continuing in second-half a Based the after we You to there

That's correct, Kevin.

before get a in are to made, to back are generally, hear waiting in look the now merchandise six you offshore, can we typically, decisions to But back. decisions issuing some to nine cycle in divide into of months. days. And a Those even be stages. it to it then. negotiated time state back made where we orders, XX We're start purchase pipeline, contracts the we're next from XX anywhere our takes If bring from going customers. lot We're

of of impacted XXXX yes, So, our be the more by first-half. the and sales in year, so second-half likely this than sure for will second-half in XXXX, success in the

advantageous on And the you expected. Okay. it's than CID, more first three here originally months even that mentioned after looking you even

a finding like just So forward? you little what opportunities as you the are can bit move and you there, about you what talk

take great group of really all our a with people -- great staff management, pieces. being is we're at and management, Besides with I'll -- finding what middle great in levels, great it

about have their products. laundry available. being the laundry competition Our Healthcare laundry-friendly very are fashionable once have Really, CID through had products of possibility products put that customers, Seal laundry-friendly Fashion we did are customers, as able laundries CID excited not products their laundry-friendly CID's to products are. has neither

also, customer besides So certain that The direct also, forward and great have opportunity products go base. of order feeling non-laundry-friendly their that's and looking CID into offer the launderers doctor's That's and renters out of has even to in forces. it. of uniforms, call offerings they're side And sales laundries them as one on to the They so on. marketplace one that the about. acting to many we're clinics

standpoint. that's design believe more more And that much and teams a make time, very The fresher customers, design CID's organization in Seal are teams will them other Healthcare their Fashion customers our the side from capabilities, of laundries. Fashion presenting opportunity. I it is products integration even fashion-forward between some an design us that into which collaboration over design tapping a Seal to of outside already and exciting Healthcare are

you when points, very own we brands builder $X in the licensed, and not seven brands, thought ones only your they a their from CID. brand but a the side, on product all Now recognizable, bought of management, mean, operational well they've they we finding account low we're Bradley to is one brand their successful on capabilities know price operational how create look to Vera side, they well that efficiencies. business, sales I them. skill what say highly where in things fastest-growing us acumen, help. need And the people $XX with other Carhartt. And that years was on our customer-facing thing so out, development to marketing the couple is design built done CID about customer million, the service, company

And so forward. supporting them we're going with IT

onto them And We distribution integration it isn't all up going XX integrated XX Uniform We're finalized our not happen months. will support will will them have. be going our it the It's over happen to schedule. hoping SAP months and as currently platform forward. will don't with over we in call year advantages that efforts. a yet, that's let's they many but to next, day, next bring the that the but They speed it,

backlog a at give from a efficient So in from should operationally things collections the an in to from all standpoint, more standpoint, they accounting from for IT, shared organization we and that services are standpoint, currently you so their customers them look than ultimately, we distribution, better a well, help become what even a giving. them can service do do, standpoint

great. Okay,

couple follow-ups mentioned there, of SAP. integrating a Just on you

lasts? of integration months to long there to reasonable how a think much So CID heavy of really lifting is XX kind is how the frame do about integration? with Or time

There's a fair amount.

process next and we're bang months. out part late the in XX That in onto turn didn't big a the take We're so SAP. the That turn the off, off us. 'XXs. for integrating doing not Some to XX well on. HPI already of down better to did It's comes begun, of We back priorities. that work shut will but of us it

integration making and one sure a don't up make do in well. that we time to one any to We speed or the -- it small. is group a sure resource in of impact So nice help doing at to we're time order customers. growing product their lot group order a customer slow, at do customer From as way impact a and learn we'll CID's very in standpoint, HPI or

and importantly, and It XX bit could be to right, on lot there's Most bit a currently SAP, tools, them could have, -- analysis little struggle longer. they benefits system. it internal that business in shorter. management their It have can't all to be think that planning So I do months their analytics so system, to they they reasonable. on is do do or they inventory the a on do SAP customer that on little a can being that tools we of their

just of integration think this we Should -- Or separately? as might go you you about move through thinking call that folded will process any you out be your meaningful as forward? costs that kind be into numbers

into numbers. be folded It'll our

a on spoken it. but Typically, associated with $X few examined in every have $XX we about I few we've we years, has CapEx, -- up haven't run think at this of or wind or We about we're kind spoken expenses where the of Andy and million X% past, every distribution. IT step, investment. years another million with we a large

capabilities, keep sure make organization divisions, with for products. Fashion that a of needing to become larger to Healthcare, we going for but still a our CID low will our and we're cost have technology up to not distribution As just certainly, their and of more all fulfillment HPI IT Seal we're the customers to organization

BAMKO's making the yet. in go-forward of all not over So the has we'd the few basis might years been determinations. looking But ago, our bit year as lot a than we'll have doing two urgency a more or for services. now customers part larger, now there of that a little and also our been Probably do and a on second-half CapEx be normally that of of needs distribution that would shared next be year; fully the at analyzed

So possible. it as and efficiently effectively want doing to we're we make cost sure as

great. Okay,

just terms Moving give in the on second-half. a little Promotional than you maybe post analysis sales of lower Products, maybe the there can bit to on in to get -- expected. you the us mentioned results better you it you But quarter expect

forward. more talk that maybe ongoing or integration trends the moving related the is a So just about and bit to intra-quarter

Yes.

at last, focused of significant look think quarter, the pipeline. been a that you acquisitions We're time get last across whenever to on and think trying in working acquisition they effort the their the really spent is their I I on amount sales in. year that and has bringing really

Identity, move a can acquisitions of starting with model. and the as make of I it to Tangerine, as took where the we that until good year so We're Public going of momentum think, At opportunities ball That's on paused sales to a business and they're does getting focused an they're lumpy as -- and well it the the that a behind really core better sure is where integration process on with given always with off opportunities beginning results. see eye well organic got business, the bit bit at priority. the for for want our this why affected we word, side a extent being on we're kind their forward of part the little their and as and the a to to lack really we process next at, point, them with them right some positive business. behind be little

see with part just customer that that customer handle getting the the in units that of as you separate it the handle was BAMKO have the of more of is, harder piece That other whether have would put operations relationships Michael kind normally an there well acquisition time Identity piece where there, weighs to their on the down, as shared as may will customer, be a opportunity the nature three or fit, shows of we or business into the be Public being the it. that a of to The see BAMKO it part what and now number. past, at that part organic Tangerine to what And made core said it's that what really it's has and it's harder organic BAMKO's for sense piece. or

how right units other slowly more last outwardly, I as a direct sales you you on results. we're is they've our what tell And know out our they sales on much a on expect see probably of you is focus was well, me, and doing, had. looking of is XX,XXX it is sales wrong be I how that focused to have relationship over for been couple self-awareness, lot and they've of should Remember, to much and you, they're and in and best business building on between integration we the sales to the what there have group, out have time. actually what have done it, these they back do. as months to focused team. take all out there. there now, Their on and competition a competitors There working done we good been And there week, got they've at

now. of you focused right out their XX,XXX hundreds, on they're imagine, bought millions, focused never And for before there have they what their you on competitors. if not So, customers they There and are failed can even something, at to we products, looking that's them, history succeed. when

we're very So optimistic.

tightly still how And to operating per the in versus own to going left Products on of segment? what's Promotional And do se? as three brands are their businesses those kind integrated be Okay. integration

will a That integrating They our That -- distribution Group an into standpoint integrated distribution remains standpoint. to the of Superior to already so next the be IT They'll centers, XX done. over distribution be shared Companies they happen are months. from six be service from will centers.

needs China. some the using resources Tangerine of that, and in as from efficiencies Their year and more accounting them more to El the still some well the next the available of to They're of resources does as create be and Salvador. happening. integrated but extent, already to India be will the that as so, over administrative functions. and acquisitions, Public office that's back Certainly, newer other So Identity, using

big to operate. in next they a year see hopefully, how going -- filter will their to the over And the difference results. You're that down

Okay, rates? have feel any that space? good. On increased very be Or at competition? you strong mean, growth Do Staffing, environment you niche you to continues these there. you Or seeing that how's in competitively allowing space? what I overall that's are to a here just Remote the in grow obviously, like

only will the either go because of of into needs. our can more don't The that can competition or thing business is But create just experience. find or we be in together no any that of if put build we keep shortage piece almost our guidance our we're find team lease that don't get with to us. the value There's piece competing way and we growth customers. up their from business our enough we without fast customers' space for don't able Well, any to of probably most customers We of do low-cost against we always provider. our somebody than of

And have a customers large their That's and our turnover. better customers In of growth, going with doing the are us. some number that deepening business. terms of turnover we're retain of year. whole our customers little lot customers our portion new. are later in we very the we every had earlier In in to And very, years, a years, part of relationships we're of more

do and they to created Dominic, executive he of under we hiring the number And or sales referenceable He's customer a of President little of And bit, put some working division any Dominic a a their from base. proof decided need Some loyal, strategy. with year-to-year down the salespeople we're was in business and have very we the customers White, that up not fluctuation so. X.X on that because people needs him. we've work years President. about there working in is, the change have ago marketing sales who's that but

who they're trade well people some our that anytime we're consideration, The a marketing with we SEO that's along side think or out doing shows and take are they sales brokers the win get better work and And And even might a time We're customer those worked call team, for of we the which he's on to the and even through deals. strategy, customers of executive we're El look us XX% than Salvador shows, quite his on world to very can word-of-mouth websites, center new own the come out because that to we visit frankly, a us who's in great our that the value and media very really of very, that So working trade having. well with with give team us every want I the working notion value operational of do living sales us. we're don't social single a and at salesperson there. where doing day. generally kind getting is to growth

So the they key them is Belize, getting it them If to in what them start here we don't offshore Salvador, center, to want see we letting in is an our start do. El costs built level centers, which, until better for and offshore course, money, up more a for try of where them trust to Florida better they're willing of them. which are there's center, our us

the like done that margins still more some coming U.S. you time, like move though, overseas. up as the customers so it Yes, that's mentioned start in the then the to At seems same on work are is and case you that number you the Is of on off that quickly have a being start growing internationally. just the customers who typically fact platform? platform, international customers still the but are domestic

platform, platform nearshore. start to nearshore I and stay would does customers our and and domestic it's nearshore somebody the the do the then half. Very probably half move half of start on other rarely and nearshore though. Half say start

in Yes. in that start and do stay stated rarely U.S. Sorry, they I the U.S. the wrong. very

Great. Yes.

Okay.

the on? but as in you're -- it's you you're you just impacting there comment on something really your right assume keeping not is something an just is that mentioned not it's environment. that's I eye out Just -- -- tariffs now,

are to China. you these there environmental to regulations Well, some the of unintended give new in tariffs, -- and consequences some

environmental the with start regulations. Let's

buying respect necessarily China environmental over that polluters their standards has been or a manufacturers dyes all shut creating there which raised $X.XX end of dyes. of and garment a standpoint, were more delivered they somewhat from but selling have clamping using, manufacturers result, it from to responsibility. there. that into smaller from and cotton product And shut ultimately it's are to cost with that of they're prices tenths we the in standpoint dyes group as have an a of at look is been When your China to nonetheless, import States? their were the not has some China has So dyes a fabrics China manufacturers has It's of cent, but that dyes factories U.S. that what's on up down still an the go to placed tariffs of down. a shortage, United couple international of people weren't -- of They had you

many build with XX% already to cotton on of China And took been buy remember, bought until where were cotton Now cotton. those on that China reserves reserves depleted years China. up in from outside whole there needed again in tariffs have into mixed and China their their cotton, going cotton, U.S. and this they crisis, it cotton the

about of in exactly, of is we U.S. mix in they So they used the hard than XX% the into them tariffs again. products is to into cotton products? to all China, best Probably U.S., but retaliation started is what China, of the in China? goes able cotton that have calculate. what that buying XX% goes the to Our tell Rather from XX%. though, raised been cotton What's cotton products mix

increases acquisition. marketplace. with where up to could bringing were the of they related some a those seeing in expect some there going what forward. make We've garments heats be of has the The is seen time cotton, the the gotten few the war market. cents and at ultimately you that. based fabrics, cotton, that all to price future, thinking woven was and recently and into wind our the competitive and seen into them then nonetheless, trade increase on it's necessary That and increases, no this and we difference it's has increases. of tariff figuring worse. doubt. that's necessarily lot are not more or start Chinese of customer back already, all on flipside bit themselves and into we again, So that a we're it and outcome fabrics an momentum, contracts to CID But has in looking any yarn little standpoint all cotton, the into of knitted increases XX% price in right increases on out spun going price done relationships about be But bales it's a that additional a most U.S. okay, of from RMB of our when garment we're once the see will But raw pricing If up more, up about, our per mitigated so price of there do

in We a had number a price increase haven't years. of

I four think I guess, we're looking years. at,

that happens. So as think it will a I come to anybody when surprise don't great

that's business. lastly, the X-year Obviously, CID. you guess, I the Uniform to Correct? for or good. growth outlook Okay, in outlook related X-year increased the layering

Yes, that is correct.

correct. is That

I'm no to conference any Michael for would Benstock further the this over to showing questions [Operator remarks. closing turn I back time. at Instructions] like

short. great our forward I'll today. I to your always, look keep in time in And Andy as progress day. we Have appreciate October. a third updating it the and you on quarter

has The you concluded. presentation. conference now today's Thank attending for

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