Superior Group of Companies, Inc. Common Stock Small-Cap Virtual Conference

Thanks, Jim, and good morning, everyone. We appreciate your interest in Superior Group of Companies and the opportunity for us to share highlights about our company. As Jim said, my name's Mike Koempel. I'm the President and CFO of Superior Group of Companies, and joining me is Michael Benstock, our Chairman and CEO. Michael's family started the business over 100 years ago, and Michael's worked in various positions throughout the business for over 45 years, including over 20 years as our CEO. We've got our safe harbor statement, which of course, you can read at your leisure. Moving to the investment highlights of our business. We have compelling reasons to invest in our business. As I mentioned, the business was founded over 100 years ago with three attractive diversified segments.

All of our businesses have demonstrated organic growth and have just a modest share of a very large addressable market. Our segments are highly profitable, including our most profitable segment, which is our Contact Centers segment, again, which we'll touch on later in the presentation. We have a solid balance sheet driven by a history of driving positive cash flow to support strategic investments in return to capital, which includes an uninterrupted dividend since 1977. Before getting into each segment, you can see from a revenue standpoint, last year we had revenues of about $566 million, a significant growth since 2019 of $377 million, with an annual growth rate of 7%. You can see growth across our segments. With that, I'll now turn it over to Michael to start us off with the Healthcare Apparel segment.

Thanks a lot, Mike. As Mike said, we're one of the oldest providers of Healthcare Apparel. That's where we started the company in 1920. Let me cover the channels that we sell into. Anywhere anybody would buy Healthcare Apparel or be wearing Healthcare Apparel, whether they bought it themselves, whether they got theirs through a healthcare laundry system, a hospital provided or their office provided it, specialty stores, distributors. So we're omni-channel, and we're one of the only omni-channel healthcare uniform providers out there. We started a direct-to-consumer channel just a few years ago, and that's growing to be more important as time goes on. Another fun fact, over 2 million people wear our apparel every single day as they go to work in the healthcare marketplace as caregivers. The TAM for this business is over $4 billion. It's huge, and it doesn't change much based on macroeconomics.

It's clear that we're one of the top five players in this business, and of course, as I said, we've been around a long time. Some of the brands you might recognize, Fashion Seal Healthcare is our oldest brand, going back to 1920. Our in-house brand that we curated is called Wink, and that's mostly sold to retail, and Carhartt, an iconic brand, we're a licensee of theirs in the healthcare space. We'll move on now to the next slide. These are some of our customers. Some of them you recognize, most of them you should. You can see how omni-channel we are selling to retailers, selling through Amazon, selling to dialysis centers, and even selling in some department stores as well. As we move off into the second business segment, which is Branded Products. Branded Products is made up of branded merchandise and branded uniforms.

What do they have in common? They all have logos on them. We're one of the largest companies in this space. Depending on what you read, we're either eighth or ninth largest in a space that has over 25,000 competitors. Very meaningful position to be in that top 10. Let's look a little bit at the numbers. This is a $27 billion TAM for this marketplace, and we've climbed from obscurity in the last 10 years, as I said, to be in that top 10. We produce tens of millions of branded products per year. Another fun fact on the uniform side, on the logoed uniform side of the Branded Products business, over 5 million people go to work every day wearing our uniforms. We'll show you a walk down Main Street on the next slide.

These are who we supply uniforms, and to many of them, promotional products as well. Very proud of this customer list, and this is only a very small portion of our customer list. We do employee gifting, we do customer loyalty gifts, we do safety gifts. There's so many different ways that our products get into the hands of the people who are using them or wearing them. Imagine all the ways they might get it. We're there to supply it however they need them. We collaborate with some of the best-known brands in the world, and Mike's going to take you through the final segment, which is our Contact Centers segment.

Thanks, Michael. Contact Centers, as Michael said, is our third business, which we operate under the banner of The Office Gurus. The Office Gurus is a nearshore contact center supporting both inbound and outbound call services on behalf of a number of brands across a variety of industries. As you can see, we operate across three nearshore countries, El Salvador, Belize, Dominican Republic, and a small footprint in Florida. We really focus on the small to medium size opportunities where we provide clients with high touch service as compared to larger engagements, which might have thousands of agents that are largely transactional. We also pride ourselves on bringing consistent processes and leveraging analytics and technology, including a variety of AI solutions, which are all focused on improving our customer's experience for our clients.

Much like the other numbers that Michael had shared, this segment too operates in a significant addressable market, over $120 billion in the U.S. alone. You can see, as I mentioned earlier, this is our highest growth segment. Our sales CAGR is about 17%, and our EBITDA margin 10% with a high net revenue retention. Much like our other segments, the Contact Centers segment serves a variety of businesses, a variety of industries, some of which I'm sure you'll recognize, from supporting legal services to travel and leisure, as well as retail. Our services fit into any industry, and we can provide, again, a variety of services to meet our clients' needs. A quick snapshot, again, from a financial perspective, looking at our revenues over a longer timeframe. Again, we finished last year at $566 million.

We are currently projecting growth this year to our high end of the range of $585 million. But really, when you scan across the page, over time, all of our segments have grown. We've more than doubled the business since 2015 with an annual growth rate of 10%. Really a combination of organic growth across all segments, as well as strategic acquisitions that have taken place from time to time. Lastly, as we focus on our capital allocation priorities, you can see we're focused on continuing to support the dividend, which we know is important to us and our shareholders. We do take advantage of opportunistic share repurchases as another method of returning capital to shareholders. We continue to look for opportunities to invest in organic growth. On an annual basis, we will invest about 1%-1.5% of our sales into the organic growth of our business.

Lastly, mergers and acquisitions. We have had a history of successful acquisitions dating over the last 10 plus years, and we'll continue to evaluate strategic acquisitions as another form of growth in our business. With that, Jim, we'll turn it back to you for any questions.

Yeah, Mike, go ahead. Sure.

Jim, we're really excited about a couple of these strategic hires that we made, and it's really with the focus on continuing to grow that business. We've talked many quarters about the strong pipeline we have in that business, and we want to maintain focus on continuing to grow that pipeline, but equally important, converting that pipeline. One of the hires was another strategic hire to bolster our sales leadership capability to do just that. We've said multiple times, this business grew over the years really without a sales and marketing footprint. This is a continuation of us thoughtfully building a sales capability that we believe will help to continue to drive growth in this business and support that double-digit revenue growth going forward.