Superior Group of Companies (NASDAQ:SGC) executives highlighted the company’s three-segment structure, capital allocation priorities, and several current-event risks during a 30-minute investor presentation featuring Chairman and CEO Michael Benstock and President and CFO Mike Koempel.
Three business segments and growth narrative
Koempel described Superior as a company with “three attractive, diversified businesses” operating in large end markets: healthcare apparel, branded products, and nearshore contact centers. He emphasized historical organic growth, strong customer retention, and what he called a “solid balance sheet driven by strong operating cash flow,” which supports capital returns including an “uninterrupted dividend since 1977.”
Healthcare apparel: multi-channel approach and market opportunity
Benstock said the healthcare apparel business has been operating for 105 years and is the company’s original business. He described an omni-channel model serving both institutional and retail demand, including sales into laundries that service hospitals (scrubs, patient gowns, lab coats), along with fashion-oriented items sold through retail, digital marketplaces such as Amazon and Walmart, and the company’s direct-to-consumer site.
Benstock identified retail brands including Wink and said Superior is a licensee of Carhartt. He said the institutional brand is Fashion Seal Healthcare and stated that more than two million people wear the company’s healthcare apparel to work every day. He estimated the total addressable market at over $4 billion and said that, while Superior is “one of the top five players,” there remains significant market share available to capture.
Branded products: beyond giveaways and into programs
Benstock characterized branded products as more than trade-show giveaways, describing the segment’s emphasis on curated gifting and customer programs for clients with larger budgets. He listed use cases such as customer incentive programs, uniform programs, conference giveaways, gifts with purchase, and revenue-producing branded merchandise sold through clients’ retail channels.
He said the branded products industry is roughly a $27 billion market and noted that spend tends to come from marketing and HR budgets. Benstock said the industry includes more than 25,000 competing companies and that Superior ranks as the ninth largest according to an industry publication, a position he said the company achieved over the last decade. He also noted the segment includes uniforms, stating that more than five million Americans go to work each day wearing Superior-produced logoed uniforms.
Contact centers: nearshore footprint, AI use, and pipeline conversion
Koempel said the contact center business operates as The Office Gurus, providing inbound and outbound services across nearshore locations in El Salvador, Belize, and the Dominican Republic, plus a small footprint in Florida. He said the unit targets small to mid-sized opportunities and aims to deliver “high-touch service,” supported by processes, analytics, technology, and “the latest AI solutions.”
Koempel described the contact center market as “well over $100 billion in the U.S. alone” and said Superior’s market share is minimal due to its segment focus. He called it the company’s fastest-growing segment, citing a nearly 17% CAGR from 2018, and pointed to a 10% EBITDA margin in 2025 and strong net revenue retention.
Addressing AI, Benstock said the company was an early adopter in contact centers and described multiple applications, including sentiment analysis, agent coaching, behavioral insights, accent reduction, noise cancellation, and expanded quality assurance that can review a large portion of calls. He also said The Office Gurus has become an implementation and maintenance partner for certain AI companies and that the company is being paid for that work. In branded products, he said Superior is using AI for customer presentations, design, product development, engineering, and cost mapping, and is exploring efficiency gains in programming and testing.
Koempel also addressed a 2025 customer loss in contact centers tied to a bankruptcy in the solar industry, saying the business built a record pipeline but saw longer customer decision cycles during 2025. He said the company began to see “green shoots” of pipeline conversion and expects benefits to start in the latter half of Q2, building through the rest of the year.
Capital allocation, balance sheet, and external risks
Koempel said Superior’s capital allocation priorities include:
- Dividends, which the company has paid since 1977
- Share repurchases, including a completed 2024 program and a 2025 program with about $10 million remaining
- Organic investment, with normalized spending of about 1% to 1.5% of revenue
- Mergers and acquisitions aligned with existing segments
On leverage, Koempel said the company targets a leverage ratio in the 2.0x to 2.5x range. He said Superior repurchased $10 million of stock in the past year and still ended with $24 million in cash. He also cited operating cash flow of almost $20 million in 2025, following about $33 million the prior year.
Regarding M&A focus, Koempel said the company is mainly looking at acquisitions in branded products and contact centers, emphasizing an interest in strategic, meaningful transactions rather than multiple small roll-ups. In contact centers, he said Superior is interested in expanding into other geographies to broaden its nearshore service offering.
Benstock discussed tariffs, saying a recent Supreme Court ruling did not, in his view, provide finality because the administration may pursue tariffs through other mechanisms. He said the company is not changing pricing at present and is “waiting it out,” adding that it would lower prices if tariffs went away after having raised prices to cover them. He credited the company’s “redundant supply chain strategy” and sourcing diversification, including company-owned factories in Haiti and sources operating under free trade agreements in Africa.
On geopolitical and shipping concerns tied to the war in Iran, Benstock said the company does not route goods through the Straits of Hormuz. He noted that rising oil prices could eventually increase costs, particularly for oil-based materials such as polyester, but said supply partners may absorb some pressure initially. He also said the company typically holds five to six months of inventory in its uniform businesses, creating a window before price increases may be needed, while promotional product orders are priced individually at the time of order.
Asked about expectations for 2026, Koempel said the outlook is “really focused on revenue growth” and that the company expects revenue growth across all three businesses, while continuing to monitor costs and pursue efficiencies, including those supported by AI.
About Superior Group of Companies (NASDAQ:SGC)
Superior Group of Companies is a global developer and manufacturer of specialty packaging materials, including films, laminations and pressure-sensitive adhesives. Founded in 1969 and headquartered in Santa Fe Springs, California, the company combines advanced printing technologies with materials science expertise to deliver customized packaging solutions for industries such as food and beverage, healthcare, personal care and household products.
Through a network of manufacturing and distribution facilities across North America, Europe and Asia, Superior Group serves both multinational brand owners and regional producers.
