Superior Group of Companies, Inc. (NASDAQ:SGC), a leading apparel and accessories manufacturer, has announced a new share repurchase plan. The plan, which was disclosed in a recent SEC filing, will see the company buy back up to $4,308,737.04 of its outstanding common stock.
The share repurchase program is set to begin today and will continue until the earlier of November 8, 2024, the date when the repurchase limit is reached, or upon occurrence of another event detailed in the plan. This initiative follows the authorization from the company's Board of Directors on August 9, 2024.
The repurchase transactions will be carried out through an independent broker and will be subject to specific constraints related to price, market, volume, and timing as outlined in the plan. These constraints are in accordance with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, which allows companies to repurchase their own shares at times when they might otherwise be prevented from doing so by securities laws or because of self-imposed trading blackout periods.
The company has stated that the information regarding the repurchase plan provided in the SEC filing is not to be considered "filed" for regulatory purposes and will not be deemed incorporated by reference into any of the company's previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Investors and market watchers will be observing the impact of the repurchase plan on the company's stock performance in the coming weeks. Stock buybacks are often used by companies to return value to shareholders and can indicate confidence by management in the company's financial stability and future performance.
The implementation of the repurchase plan is a strategic financial decision by Superior Group of Companies, which is incorporated in Florida and has a fiscal year-end of December 31. The company, formerly known as Superior Uniform Group (NASDAQ:SGC) Inc., changed its name from Superior Surgical Manufacturing Co Inc. on July 3, 1992.
The information regarding the repurchase plan is based on a press release statement filed with the SEC.
In other recent news, Superior Group of Companies, Inc. has announced a new stock repurchase initiative, authorizing the buyback of up to $10 million of its common stock over the next year. This plan replaces the previous one, which allowed for the repurchase of up to 750,000 shares.
In the company's Q2 2024 financial results, a 2% revenue increase to $132 million was reported, though this fell short of expectations due to market and supply chain disruptions.
Despite these challenges, Superior Group maintains its full-year outlook, projecting revenues between $563 million and $570 million, and earnings per diluted share from $0.73 to $0.79. The company's healthcare apparel segment saw a 5% decrease in revenue, while the branded products and contact centers segments reported increases of 2% and 9%, respectively.
Additionally, Superior Group reported an improved net leverage ratio to 1.7 times trailing 12-month covenant EBITDA, down from 3.7 times the previous year.
The company expects gross margins to remain stable in the high 30s percentage range and is optimistic about a stronger performance in the second half of the year due to seasonality and new customer onboarding in the contact center segment.
These recent developments highlight the company's commitment to strategic investments for expanding its market share and enhancing shareholder value.
InvestingPro Insights
In light of Superior Group of Companies' recent announcement of a new share repurchase plan, current and prospective investors may find additional insights from InvestingPro valuable. According to InvestingPro data, SGC has a market capitalization of approximately $257.82 million and is trading at a P/E ratio of 22.07. With its recent revenue growth reported at 1.22% over the last twelve months as of Q2 2024, the company shows modest top-line expansion.
One notable InvestingPro Tip is that SGC has maintained dividend payments for a remarkable 48 consecutive years, which may be a sign of the company's commitment to shareholder returns. Additionally, the company's valuation implies a strong free cash flow yield, which could suggest that the stock is undervalued relative to its cash-generating ability. This is particularly relevant for investors considering the share repurchase plan, as it may indicate a strategic move by the company to buy back shares at a price that management believes is below intrinsic value.
For those looking to delve deeper into SGC's financial health and future prospects, InvestingPro offers a wealth of additional tips. In fact, there are 12 more tips available on the InvestingPro platform, which provide further analysis and context for investors.
As the company embarks on this share repurchase initiative, these InvestingPro insights may help investors better understand the potential impacts on shareholder value and the company's financial outlook.
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