Superior Group of Companies (SGC) 31 Jul 192019 Q2 Earnings call transcript

Good afternoon, everyone. Welcome to the Superior Group of Companies’ 2019 Second Quarter Earnings Conference Call. With us today are Michael Benstock, the Company's Chief Executive Officer; Andy Demott, its Chief Operating Officer; and Michael Attinella, Chief Financial Officer and Treasurer. After the speakers’ opening remarks there will be a question-and-answer session. This call is being recorded, and your participation implies that you agree to this.

simply the then time. at don't, you drop line off this If

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

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

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

I'll that, the With to call Michael. turn over

review. operational results. you, initiatives performance remarks on Thank good Thank XXXX everyone. for will improvement integration us environment. Andy and market financial and our update to our QX our our and focus an afternoon, joining on strategic against on highlights, review remarks progress you direction Hala, My brief progress's give will our

second quarter and efforts, positive strategies with performance realigned our of integration gains see process are We ongoing signs investments. business encouraged our pleased operational and to from early sales

BAMKO from staffing segment. Office a and led growth Gurus, our XX.X% sales net quarter, Promotional increased The the For XX% by steady by gain segment our Products remote solutions in second

were Results total Uniform slightly segment lower. mixed and for in came our

those as and we from activity, for acquisitions coming from new for earnings servicing. for growth customer operating are future we sources, pressure largely expected, were impacted well to higher respond increased expenses by as several as invest As already RFP

at look segment higher performance level. a at Let's

Group Overall, starting Our new work growing our our sales is wins. are spot. strategy we at ID these employee to shift business and business Uniform securing few our opportunities turn to hold business, into opportunities, wins sweet hard in pipeline is in with potential with HPI, our new take a

are grow accelerate strategies Additional forthcoming and pipeline our further. to even

CID Shifting structure being that and sales months now marketing to last from healthcare. quarter. Note only benefited second full acquisition on stronger a two our of and a momentum. recapture with to quarter year's versus division we operational The track is of is fortified

strategy, efforts deliver to expertise our end, as and of the taken we accelerate uniforms more Fashion while the that healthcare fashion-oriented part division marketplace. under has product healthcare to a of CID's To design development leadership integration Seal stronger Healthcare role founders

a our much as here should to competitive strengthen near exciting us to future. enhanced things intended this We perspective progress give further more technology efficiently. the operational efficiencies and as continued from our operate in happening All position allow is well customers have some with development product experience enhancements a that and

we higher Products, continued their coupled improvement from performance, operating to sales are Promotional closely Looking doubled. with force pleased sales at more nearly have a see we volumes in

with of for business, to optimize most we the to opportunities. ways on any progression of part continue profitability the As natural look focus accretive a

that when necessary forgoing We also unfavorably our business impacts are profitability.

to us long the improve line bottom run. Ultimately, this results strategy in enables

expect sales The a But finish to double-digit though you Office solid Gurus lighter should strong historical our mentioned, at delivered came I growth growth, to see a our than year. As rate trends. in

of have a growth expected needs, very support significant in customer We pipeline. service to robust made investments existing additional ahead capacity and stay

that location the optimize sales we acquisition We our the call a we visited on pause call was had how strategies pleased have a while about and our we've of just operational in competency in ago. advance year which all recently initiatives, I as center, to center CapEx second elevated Belize opened see past, Belmopan. note, Of I our soft efficiencies, and significantly said placed our we matured investments. execute

on minimize we effects As impact to past, opportunities of we've to tariffs. are continue acquisition broaden mentioned to network any should arise. cautionary order the tariffs continue keep in pause sourcing a trade by we to market the our environment measures macro a additional they the mitigate From negative finger compelling in consider taking to and potential ready the perspective, of

of their suppliers discipline We And supply has in pricing maintaining raising various chain competitive parts the are environment. fact. pricing in cost are in what increasingly become an

at in the profitable demand Customer To on approach do to our our all coming sales are processes exposure. and we long-term that to capture to business opportunities, core and shared G&A growth. summarize, is model most growth systems in people, the fortify always, retain This to minimize as had for done and We levels. to extend marketing can right to our for unprecedented our capabilities in prospects. services lower pricing investing our platform and capitalize investments are our in we technology enhance reflected future

I over remarks to my the and with Andy, call turn then closing return after Mike now the financial provides will I'll overview.

our My integration today everyone. afternoon, and for good and Michael, quarter. operational will highlights on comments key you, the Thank focus

a at our look performance. take Let's segment

a of comprised Seal Our and sales HPI, net Healthcare Group, CID, delivered Uniform Uniform Superior gain. segment, Fashion

the acquisition, of As Michael May second a XXXX. acquired quarter benefit X, mentioned, which of CID we full quarter the results included

with at operational efforts materialize are Fashion taking to integration Seal Our oversight. Healthcare beginning CID

Capitalizing in reevaluate planned our to overwhelmingly their our This and void us larger product and fashion-oriented be and response. fashion requirements innovation our on caused has timing scope initial expectations. harsh design will [indiscernible] a even laundry as of with the expertise, right introduced launch functional we the positive health we fashion This first laundry-friendly June this than laundry withstand expect to of system. the to care market a scrub fill with scrub

care and health divisions this product uniform among anticipate market our year. this for sales strategies We're developing delivery collaborative later

year slow in this opportunities beginning a As with ramp such, sales more years. significantly we future anticipate sale

we CID new tracking of are went management XXXX. warehouse on SAP live on with controls, QX end X our better completion inventory well to the July provide expected and visibility its by system integration and

second in is to progressing Our schedule September. we also complete the hired up are progressing production have anticipation skilled in and Haiti building ramping to of onboarding profitability, In near-shore be already managers on expect and we factory with their quickly improve

costs ramp-up expect in XXXX. of these the will in facility this higher Haiti the third experience quarter first with costs do increases quarter associated operating to We through beginning with facility. of new We the associated our the see

to in XXXX. We're momentum closely excited we half benefits of flowing Haiti more well fulfillment with CID's beginning more supply in inventory improved as to the second this building We also the expect with capabilities as to rapid begin as seeing cost working management. up create chain capital align through set and

well employee uniform intentionally also in HPI at tracking but ERP The pace. through our slower business ID is implementation an

are As more operational half we from quarter, we customers than of mentioned SAP. moving and are to their last already taking realizing approach, customer-by-customer efficiencies we a

Move should implementation be next the in six substantially completed months.

$X.X over have domestic reduction and implemented the be we related on second small will integration severance have process the accrued recently a part quarter As months, one million. staggered customer-facing we These eliminated the the workforce. positions costs basis our a into in of entity, six approximately in next of

utilizing India. eliminated existing our We our Rica Costa web team in group have by development web in development

realize million-plus an to benefit from on We $X actions. expect these a basis savings annual

non-health is responding We are good of uniform of level to the mentioned, more and RFP we are an range in capture both becomes mid-tier market. good health feel as on this integration, it improvement businesses. we organizational our for opportunities. able to are making as the care new we Michael and nimble activity HPI's progress position And deals strengthening Overall, related and care the more in about increased competitive

Promotional our segment. to Turning Products

are quarter said, growth, BAMKO organic performance. nice in Michael of operating our we strong reported seeing improvement As sales a and

very We also optimizing our on focused profitability sign we are and across existing our customers customers. as new on

with Our meet profile. margin that those our to engage goal customers is

group still book of are who our expanding mode, business. a can on on profitable we high-level sales Additionally, hiring execute associates our of

sales we capacity BAMKO's that element of performance should synergies our our strategy working expect capacity very performed while the are facility quarter pleased ERP we we with the to as through small segments. XX.X% with a move the business at across improvement the Gurus realizing team. least The permanent needs next engagement years. location, The active couple new six balance to implementation Jamaica of of well that completed are of the is with and in our We move Overall, incubator year. during sales space plan through to another accommodate the is next recently from growth. online and in for continue the months, Cross-selling Office

meet to demand. investing past, strong As we and is in discussed to the growth service customer TOG anticipated

for both positioned are the long-term year and targets well meet our We goal. to expected our

I'll the turn highlights. over Now the financial for Mike call to

Products acquisition you, Andy. my XX-Q the Staffing Thank increase Net I'll contributing our Solutions and XXXX, contributing for sales our the segment, filed X.X%; segment exclusive X.X%; June segment review CID, CID so income X.X%; with we Uniform an limit to of sheet X%. decrease Promotional quarter our XX, second for XX% our in of the million key $XX.X balance in and Remote Products a Related adding second morning, highlights. quarter This Form statement increased to ended contributing and

benefit compared to XXXX long-term QX net strategic XXXX Uniforms in the in CID. due growth. our acquisition sales and one-month from imperatives Overall, performed drive Products Uniform X.X% of Related to of to place increased with well segment sustainable, largely

were to mix XX.X%. compared in up quarter to XXXX net at XXXX. The X.X% in and XX.X% XXXX XX.X% second Office BAMKO's our The of the sales up and approximately our were of Gurus Office quarter BAMKO Sales sales XXXX. second sales both of contributed Gurus XX.X%, the contributed quarters to in same

in was periods, point came the margin Promotional segment. to rates And was margin gross existing new second XX.X% lower-margin primarily while in very for year quarter compared XX competitive segment volume of basis and between XX.X% Products change higher Consolidated ago. the business. our remained Uniform our pricing for business This constant a from

higher expenses As CID's costs, mix, all selling reduction and in relating pXweb, other were our at with XX.X% selling result support segments, CID the These and from to associated expense integration of uniform acquisition business a the percentage ago. growth shutdown compared increases within severance a expenses force SCG, and businesses. including XX.X% of of consolidated sales amortization net business to changes administrative several and at intangibles in to sales, year items, HPI model administrative to increased in investments costs

costs we period, of long-term company. also lump No employees during the losses approximately retirement payments the quarter of incurred During recognized making similar XXXX. $XXX,XXX, of sum of the the result settlement were to pension two second

and X.X% X.X% income result, in decreased operating were $X.X the X.X% As quarter to a to for million, operating compared XXXX. margins

acquisition CID the to the a increase million in the from interest resulting costs in compared contributed to $XXX,XXX year-ago. period Interest $X.X to expense

Our XX.X% rate effective tax partially foreign-sourced costs in acquisition rate for decrease to primarily the benefit offset and which provision from a year-ago. income. the GILTI quarter came the compared nondeductible XX.X% were in a the reduced period, prior for by in change was The

was $X.XX severance income sales $X.X to but to made in investments the share million for Earnings higher segments. the by $X.X costs during position the net gross or margins, business year-ago settlement benefited us Overall, within offset period million growth $X.XX or diluted charges, per pension were and compared quarters. lower by

the balance sheet. to turning Now

a cash During posting in $X.X the reducing million to million. capital cash and or XXXX XX, reduction the X.X% June ended $X.X successful $X.X in increased been million inventory six the during We've therein. the months invested period, equivalents

approximately XX period greater than million initiative. which six-month those six June expenditures were modernization the related largest our in capital during invested projects, of incurred XXXX. June XX, Capital during the the warehouse $X Arkansas XXX% months ended we During ending to

expenditures year. expect We million capital of our end to by the $XX approximate the

Our XX, projects. since fund principally $X.X increased to capital outstanding by these million borrowings used December

declared For last $X.XX a dividend. tax of which we year's dividends, of the three second and quarter X.X% represents consecutive per quarters share, with quarter was dividend second over of the consistent last paid over XXXX, increase an

of remainder the general Michael to for call year. a turn closing now outlook and for I’ll his the the back remarks

Mike. Thanks,

demonstrated diversity our while operating of agility infrastructure the capitalized exceptional to This value. our deliver the shareholder significant preparing long-term the We and and capture on performance quarter, of synergies we again team. our business business to model

customer will to future. we're the solutions enterprise, every operations as in day enhanced dividends deliver our Our work our help our impact of prospects experience strengthening automation to the transformative through on manage our and rightsize we company, the streamline brands. unlock growth and And our elevate value the customers elevate their pay brand-building

our achieve work We year second optimistic of objectives. remain the to about the long-term as half growth we

our of work contributions we commitment. team for As all continued appreciate always, hard them SGC their members the and thank and

call open With questions. that, the for to your like we'd

Kevin the question ahead. begin question-and-answer comes Barrington will first Steinke And Instructions] our We Research. from go of [Operator Please session. now

afternoon, Good everyone.

Good afternoon.

this quite that growth as second expected in in enumerated the future, I picture, going at both and efficiencies. benefits you XXXX investments bigger of So of in kind are look a quarter on to the few specifically in operational and terms yield

Just trying see out severance much get for the are, various a versus at called weighing is that your some sense, look all those – XXXX to potential margin. your you also much longer expense how you what you how margins business, quarter as investments in in on

yes, start just So will out maybe I that. with

this is Kevin, Mike. Yes,

been operating of from don't investing the particularly we're gross areas see respect in. investments growth a about. standpoint, impact that a that there margin standpoint, an has From standpoint, initiatives from lot the to margin the we talking So with a impact margin in of net we're

invested – was of the both our capabilities expansion and Now we of as with estate expansion footprint. costs and mentioned invested during have real rentals in in our have and associated in we in the personnel TOG, remarks, and

from center and of call rise standpoint, associated with – We a within our with operating that to we to have business. margins that gives costs respect certainly reductions margins additional have vacancies our operating our seats that

that salespersons expansion costs sales the side, said, of have about, is BAMKO growth in respect talked highly in That growth process to continue that invest and a additional and there. our commissionable to as personnel area, also pay. most as are cost though, Michael the respect we On of costs our variabilized of to lot with we typically on that with base

last the areas, invest the of adding increase are standpoint with In year other course personnel we but that from an associated see we're the during So don't we haven't anniversaried this costs of year. in to people business, in some on most operating past – margin on variable that as that continued BAMKO much side, not do pay have the programs. been because

here instance, year. some wasn't our of added resources For we last look programs as our here were year, I that within last people we at team, human executive some

All on basis. in to go-forward ability areas of our to investing grow improve a these we're

that look has there far impact margin we aggregate, we really and as as we Now the overall those it as margins, that have included way those in in in the that with with looked far costs costs at and impact. haven't a as on is quantified associated associated – at impact our an what costs, but – in operating been the

we – in Group. to on those the we Now of respect We of that about in-force Uniform benefits we at with the reduction did though, anticipate and a both go-forward in and here with HPI respect U.S. the costs $X Superior to costs pXweb with basis, in associated that excess million. what do talked did

substantial to we're we out that investments are plan go-forward and the basis significant get that the them So making benefits of on a and today

gained just ourselves already second, small to But the efficiencies efficiencies size integrations the right bringing lot are and are making divisions of able created technology, do efficiencies. the for best there's of more reduction accordingly. we've investments of and we're and yet this work even from from things a together plenty to create still the together of together be having is jump in we I'll that to Kevin, a A on, And Michael.

as this think long with I been – So always enough is us, – see. ongoing so it's not to

years, right we ourselves. of of couple Every size kind

Sometimes, it's up.

down. it's Sometimes,

and ramping different now, growth. And about BAMKO to of sometimes, ahead kind think just I it's you of growth. for our levels of Mike explained Right TOG their

rates and it's working likely happen and distribution Fashion SID from mean well than happen likely also to that to ahead They say with still with I growing Healthcare time, with will are there that efficiencies CID But to doing are were greatly doing they That Seal working a have it. been we before. at quite of for they is and they're together, some and that. gain increased They've standpoint. together. HPI

The associated for costs lower as interest factory significant investment well inventories in to gross new having lower produce lower with CID improvement going Haiti on we're it. some the inventories in as and is margin making

I us. quarter that there's I transformational lot think projects one-time. a many the had ahead in so said So of And never going on last we've at

going a accused I should we're – if over it's maybe these lot have of anything, of to we But out guess spread years.

doing do It's And we some We're of a to it, It year most are the be an light of for light. us us wishing not a probably it us. a will lot But is from on had it what we're puts time the It's at of train. behind and of the is. seeing pressure glad because organization. is this And glad end it it. oncoming tunnel. we're really the we're now, right the

few improve we've be which some had there about a now, of the there been warehouse only right couple the sometime extra have months a so can Perhaps, that because payback more in waited won't behind we us. We've Arkansas talk yet to and of future. warehouse, delays the opportunities financial

week that the all was But give are in we that, the something, the the two people conversions to transformational are SAP things us tell everything factory hard and you the – CID, got we to I the week to system weekend working talking efficiencies that intended which other last about, at WMS give Haiti, is us. and really and really those there prior to and

going other And write No, going it now? down big else. of everything for going the see see month think we you're But as these costs to so see and it to from you're to sure. very some Are you I improvements. a some off road

various based the mirror talked with cetera. positive about about going of it of you these your the more the as if operational starting cetera, the of right way the think to thinking et of benefit timing like and and and benefits projects XXXX, Fashion these Healthcare good in coming just I'm pretty and up of well It integrations up sales way seems project the the It et for the Haiti see facility, a terms you like comments seems, from be light all that seems I about it. tunnel, at Yes. end start That’s XXXX together, ramping is you're really helpful. the SAP pipeline CID this, – plus And efficiency this as on Seal all projects way the to the to things you'd that's the to there. momentum set on going think

I'd customer be But very I we're by that right this – these the way at disappointed think November. to with one That January, wanted It some it. be October, things so about if done wrong, very, carry people very yes, Kevin. of you HPI. February. impacting we not talked about are doing at But carefully to is we a project time carries us may into think

our It how's really. to going HPI? impact So we're mean shouldn't I that pipeline. still building

really SAP. close actually from you to Selling to the And sell in nothing process having you long how happening is around know business, do time time you the a this quite what's the has lot. with been

So cycle. it's long a

doing the with stress of able different necessary. the be be back bring that I with I things this impacting So year. in All In many having you at organization air our can we together expectation these guess you should from so time, at behind respect. all. fresh all And be of projects. disagree it's tell all us. not breath will a to will been involved us have we'll one XXXX, transformational take but not don't good I itself

if expenses out the Okay. That’s having in those don't you’ve past. impact specifically out I And the a Yes. quarter, you in which ever called called margin sounds great. RFP know as

perhaps an have, out of good that indication going it may that's You kind just at jumped of a sales pipeline but me on.

can if that, the And so that you expand maybe RFP are seeing. activity on you

as than is ever Sure. been ever RFP been. – activity high it's it's as higher

there's life. expenses, of sales more There's expenses fact associated travel As just that. more a you do with sample RFPs, It's expenses. more

you item And our as I so has been in to where past. be point is a more but will separate it not it continue disclose it's it we'd financials, the it yet than in to to be. a And tell can willing

So going to change. what isn't direction that in for hope isn't in time. be change some right as you're to seeing quite respect. headed And We to I the seem going now we amount opposed Xx amount huge, that's are have ones. need after of do Well, Xx we smaller only the five the one of going it. opportunity, travel, the to resources big you'll

starting of you're closed you've Right. signs of kinds And those said deals. to mid-tier or you see some

effort, to you're see sounds So that some like. from starting it fruits

the you'll see true. or go we rollout, that's of very ago, deal case, that's the to going large think this have deal back rollout, lost, different, won five of I about speak And years if initial we That's an impact. you of less large more whatever. deals would four things have one we or there's a very will impact. Even an on an Yes, plus less smaller the

it. about be we'll mean to see future you'll we're more with talking not how speak holistically about respect account. happening about certainly it's we'll know when the I rising. but to our an in numbers So – much specifically doing that we And

about the Good. talked guess I there. you side, Okay. continued investments Promotional Products on

there some bringing to sales how to also line And with getting to the you on Just a new on your trying growth strategy in are business business in I organic Products? sales is they're hire to that want much it new they to have, more but make and get add people hiring correctly, just your understand much going maybe how to – just drive sure – you continuing pipeline? already already Promotional of do sense people

based three One identify additional the of Yes. business Kevin, is salespeople. you investment on factors. of a side yes, so lot our in the BAMKO can

that we BAMKO the business. during the sales doubled hired – staff our So largely comments mentioned sales their is that the force And in we we in commissioned.

been in a standpoint high of with have able you Promotional plan we've books professionals expansion area lot it's not performance. and us. – why sales we with them, Products. numbers brought paying to from are fixed-cost such organic They in a benefits of a brought capitalize seasoned people is model why that's highly That growth – place business was really There see business. the for respect to in nice of you're It's BAMKO's very business force and The that commissionable. we

is integration that The BAMKO three. some the we've associated activities those has three other of operations however, know, that integrated BAMKO, undertaken. – back think area in we've the businesses invested as I BAMKO. you separate with We've office within in there's

that course that’s months we've an And the also of made during year. investment six the this – actually the of first

And the some as of – there was a end year well. last tail in

there that associated well we expansion have So in have primarily market. BAMKO sales in that investments to force been with that as related the is of the

bringing can't are of from their bring product that's our ad merchandise. And they're on, ignore, There's you book that's are catalogs, the which people what Promotional who traditional XX,XXX hiring who competitors them. another specialty off-the-shelf factor the That's selling in bringing – business, more being here that they're Products as from them business, business. with BAMKO line you is is that's logo-ed, with generally lower-margin and

other It's will selling positions. in that they their business, profits. previous But is of profitable. customized more of their as now. customized support in the good people basis. as a that margins as higher want put BAMKO never goal using that higher do to on, Our and we transition being the come, too, for that to profitable them sure of more that what to business, them, countries come And we will we which China become them of with can fluid we on them not can product in some as operating more these is book their gives book And – do product, before customized business and they've had gross and bring

may very Products – I interesting. that Or That’s margin at Okay. all that I was the the in Promotional have missed mean gross was in comments. just quarter? factor the in is a mix?

it I we now. – good But we explaining didn't wasn't Yes, done explained sure hope just haven't it. well – – yes. I job I That a probably

Okay. That’s helpful.

did how the Promotional what I What backlog seeing were you're about bookings overall in Okay. mean quarter? in – there? the trend Products,

Yes.

Kevin, it years. well as the sales I force place in the I efforts tied really over seeing BAMKO remains Products, very the last you and as – at think look increased to strong. in that say anything, Promotional several to as mean backlog has the put we're

very the in So that business backlog remains strong.

been Our bookings have big.

Thanks quarters, nearly weren't. three previous from on every the to the in But about be. be the say spoken salespeople, that put had probably if with transparent we're quarter this. for has prior about we've should that quarters and of life that I it serious last it been I've would continuing on more salespeople, As this And be upticks at fact should be call. a should so additional about in future least reporting something year. it didn't we the before more for about anything We question. many surprised

was Yes, it's customer anything business in pricing, a for of intensified competition a lot price of for if – Uniform new lot know demand also don't in or seen the meaningful change I segment. in new industry I pricing? there's in sort overall it's regard of existing we should be have just called just on out Sure. lower if thinking but and Or comment of competitive, that always terms it you know some about condition? there. an

meaningful. It's No.

mentioned as of seeing it the tariffs, are And as with – increases. prices mentioned result are a and pressure I been I've think front our or our a who customers it, amazing. of customers of what's with wage Mike customers, I think in people higher minimum time I result Andy is competitive it, mentioned spending

Everything dynamic multi-billion customer a And I'm having lot to going is has is seeing even by companies, The these their we market. X% who's in own for want pay actually more. or who mandates larger employees ones having up. to costs XX% mentioned the – dollar We're we or pay and keep them They're account multi, more have all them. costs health by the a insurance a of cut going a up. is cut to particularly to XX%.

their cut Good to kind power to the by – and do? they don't to seen did of give some us. them to costs They I've irrational people vendors room But asking We If cases from what if go purchasing we go your so said – and more make out said, can all no, give luck. their of decreases them. on XX% kind give behavior they you vendors can't up, you're want you in And have "We program. other XX%." to our that case, We RFP. in to

RFPs RFP there. them, just if will we'll good about hand, feel environment Again, on fine. a out be not customers. enough it on behavior And I'm a the share prevail situation, right our of that's that And because it there's prevail. one we we we in complaining confident that unique is just an there out maybe But now of

the matter fact the competitors' that a too. my – is of customers, that's But behavior is

And so than customers to front opportunity a having having the – we've I'm more ever been in of. in actually of we're be front

So this. I let's say like it going keep

you on mean Right. you you what if be just you? do going like haven't certain really just to in maybe that? can I your Or guess to work I don't said, seen not but…? you profitable enough, offset bid Or it margins, have it's

– of kind it's right? stuff Well, flows Yes. downstream,

Yes.

– doing among the vendors thing So same our we're with vendors.

getting, a within little we're So percent. couple pressure a

are so about this everywhere. would because on what everywhere. it's vendors the and thing having speak probably we are And hearing I who it's imagine speaking same our And we're happening traded publicly to are

about the – you in with more be – mean larger laundry mean I I what of the opportunity. reception that does or even you significant you're does Is thought? forward? launch the launch that it doing optimistic sound the might fashion-friendly do than through terms for we that that what terms opportunity optimistic CID. Right, really just what it in think going okay. product about you're And of first already

up we delayed the gear was, give what saw is than thought. more have be. that months cautious we It interest this initial rollout successful customers. of the humbled were larger. a rollout disappointed a It we once then to Yes. – few time rollout us to thought It's significant where don't basically And what just we a so we bit have because have us made perhaps we the being too little us we would it in

few to working this And I since We've May last not been news. actually of year. that's mean, project A – but, months us. going kill is good on

a make very really to So of October, big months isn't which beyond the difference. was this, going rollout a few initial

the really was The favorable very we every this more year reception XXXX. to the the be marketplace should grow. time Even so product. fabulous. out in impact for right expect It's as We of goes got on it

development, mean, ability Okay, you direct to of direction CID off then like it since like of – of in product business, operational the focus product terms the some development on the retail taking sounds I that you're of CID's you're great. them. load And

of that, more see benefits of So trending to the of see retail kind all Is on of growth start of how in business? the that again, when side you development XXXX the efforts those we side? product

stronger, even founders development I to of has quicker think lot that the as time aligned product now gotten their who business, people, and strong. And are the they've more product bigger with wonderful broader, the choices. a had sales development it's the be issues, focus on market, issues. Seal of But on operational has to Fashion Healthcare, to clear been

key able And spending taken are founders of Healthcare those see with Group nearly and the results to people some the those. time manage and Superior along development. responsibilities We been of going fantastic on Uniform at CID Fashion who've positions elevated to their should product of XXX% key have to strategically Now people from forward. Seal all be

lot at not point. XXXX even set and in this more impacts well impact year. and more pretty an a impact we of next beyond But favorable is see XXXX. so year, this to and we year expect There's do you'll This can

the a are in marketplace. We difference making

story telling their customers before was in better telling a the years them are tell year. bought a to certainly the we one CID than last last than today in we've been able We and better

that's now, have organization that. poised have from I from great behind eight that to of do. think There their better gained from months some organization warehouse And doubt esprit they're just obviously, really a about they make different-looking months going now, spoke momentum in for be there. and no standpoint things want there to it's are organization, that and be whatever And We've that's be fixed curtain ready their system. And to WMS do hard six going next think culture to very that to a their them I the an Andy a put to de working the level. for corps I itself,

All right. Great.

Just a couple of numbers questions here.

You didn't revenue did XXX call meaningful? out, ASC it in the that was Or… but of have any sort on quarter impact

Yes.

impact. So the small for it had quarter, a

impact a there of the a the six for have year, it quarter though, continued the that quarter. – between – the negative impact, did significant the months for it For wasn't for half

$X Okay. quarter? in in of start or see that XXXX actions million from the you cost the benefits took, we the I fourth second the should And guess, half, then of to that

million nothing is that Andy bleed in reduction annualized They Yes. be number. as benefit. an – the that Small kind And course $X related the were of those by months. be million the mentioned, – going The bled to $X we're out folks impact, six force. a over full next will amount. any one-half-year There impacted of will but to the impact small a not

About half impact severance quarter. about so you'll the of already, out done the been of was in third that of except the for that’s half that paid see

the expenses was the in quarter. the severance in But already second

third half fourth see you'll benefit that of of So mostly quarter. in the quarter,

are down paying have Okay. you thoughts loan. the would any you reducing balance? that on principal know flow? if I mean you your there debt could, you if year. want restriction And even million $XX just lastly, the term every for what to? had I if cash had Or contractual then you that the wanted payments to excess you you faster Is

there's paying down on for Well, no restrictions it early. us

than in ourselves in down early are getting agreement. the pay however, down early, to continue we terms to to We continuing down that make this pay it have of can early, extent year, based make that to for of we with it to talking positioned to investments during course planning certainly that priority. that we're on make can that, – investments the pay a the we do, the rather we're advance of about the We And CapEx growth. ability given and respect that investments other other

contractually, reduced year I anticipate to payments. that anticipate this during don't simply us ability So the have on function course debt that I don't of payments priorities the a making to with the as of any we it to although advanced get – respect doing we're

we what which I what we're be we debt respect standpoint. a in to doing in have year, pay-down advance from as remarks, this doing paying $XX we're the So do CapEx anticipate do million of with will of – mentioned

Go back on Kevin's question.

let make Kevin, me So the respect comment with to a XXX.

So a of sales. XXX we $X.X total quarter impact have did this million in

before excess XXX have in sales impact $X.X of were So with uniform million. XXX of that we the did

Okay.

uniforms? $X.X million all was So that in primarily or

Primarily.

That’s it All And okay. right. negative, was helpful.

Okay. Well, I had. always. update as the all for That’s thanks

Okay.

[Operator our conference Instructions] for back I to over Michael to remarks. any This like turn concludes the question-and-answer Benstock session. would closing

We you. today. time in of look forward And a day. Have appreciate quarter XXXX Thank updating on great you course, we third all to your results October. our

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

disconnect. now may You