<PAGE> 1
FORM lO-Q
-----------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-5869-1
SUPERIOR UNIFORM GROUP, INC.
Incorporated - Florida Employer Identification No.
11-1385670
10099 Seminole Boulevard
Post Office Box 4002
Seminole, Florida 33775-0002
Telephone No.: 813-397-9611
Formerly Superior Surgical Mfg. Co., Inc.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
As of the date of this report, the registrant had 7,897,452 shares of
common stock outstanding.
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PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
SUPERIOR UNIFORM GROUP, INC.
(Formerly Superior Surgical Mfg. Co., Inc.)
CONDENSED CONSOLIDATED SUMMARY OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended June 30,
----------------------------------
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Net sales $ 38,704,155 $ 37,518,173
------------ ------------
Costs and expenses:
Cost of goods sold 25,633,498 24,956,939
Selling and administrative expenses 8,948,720 8,543,667
Business process re-engineering costs 1,055,171 --
Interest expense 242,275 298,965
------------ ------------
35,879,664 33,799,571
------------ ------------
Earnings before taxes on income 2,824,491 3,718,602
Taxes on income 1,020,000 1,395,000
------------ ------------
Net earnings $ 1,804,491 $ 2,323,602
============ ============
Weighted average number of shares out-
standing during the period (Basic) 7,892,173 Shs. 7,992,148 Shs.
(Diluted) 8,005,644 Shs. 8,020,928 Shs.
Basic earnings per common share $ 0.23 $ 0.29
============ ============
Diluted earnings per common share $ 0.23 $ 0.29
============ ============
Cash dividends declared per common
share $ 0.125 $ 0.11
============ ============
<CAPTION>
Six Months Ended June 30,
----------------------------------
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Net sales $ 76,136,662 $ 71,031,804
------------ ------------
Costs and expenses:
Cost of goods sold 50,424,783 47,200,634
Selling and administrative expenses 17,851,359 16,588,949
Business process re-engineering costs 2,150,083 --
Interest expense 434,825 603,563
------------ ------------
70,861,050 64,393,146
------------ ------------
Earnings before taxes on income 5,275,612 6,638,658
Taxes on income 1,910,000 2,490,000
------------ ------------
Net earnings $ 3,365,612 $ 4,148,658
============ ============
Weighted average number of shares out-
standing during the period (Basic) 7,881,636 Shs. 8,023,353 Shs.
(Diluted) 8,002,485 Shs. 8,068,430 Shs.
Basic earnings per common share $ 0.43 $ 0.52
============ ============
Diluted earnings per common share $ 0.42 $ 0.51
============ ============
Cash dividends declared per common
share $ 0.25 $ 0.22
============ ============
</TABLE>
The results of the six months ended June 30, 1998 are not necessarily indicative
of results to be expected for the full year ending December 31, 1998.
See accompanying notes to summarized interim financial statements.
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SUPERIOR UNIFORM GROUP, INC.
(Formerly Superior Surgical Mfg. Co., Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
June 30,
1998 December 31,
(Unaudited) 1997
------------ ------------
(1)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 641,087 $ 8,889,948
Accounts receivable and other current assets 29,079,270 26,722,727
Inventories* 49,605,036 42,523,009
------------ ------------
TOTAL CURRENT ASSETS 79,325,393 78,135,684
PROPERTY, PLANT AND EQUIPMENT, NET 26,638,895 26,772,477
EXCESS OF COST OVER FAIR VALUE OF
ASSETS ACQUIRED 2,827,075 813,626
OTHER ASSETS 2,973,230 2,633,068
------------ ------------
$111,764,593 $108,354,855
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 10,484,328 $ 6,806,955
Other current liabilities 5,643,733 5,297,452
Current portion of long-term debt 2,266,667 2,266,667
------------ ------------
TOTAL CURRENT LIABILITIES 18,394,728 14,371,074
LONG-TERM DEBT 12,333,333 13,466,666
DEFERRED INCOME TAXES 2,435,000 2,400,000
SHAREHOLDERS' EQUITY 78,601,532 78,117,115
------------ ------------
$111,764,593 $108,354,855
============ ============
* Inventories consist of the following:
<CAPTION>
June 30,
1998 December 31,
(Unaudited) 1997
------------ ------------
<S> <C> <C>
Finished goods $ 30,760,118 $ 25,835,299
Work in process 5,580,530 4,627,273
Raw materials 13,264,388 12,060,437
------------ ------------
$ 49,605,036 $ 42,523,009
============ ============
</TABLE>
(1) The balance sheet as of December 31, 1997 has been taken from the audited
financial statement as of that date and has been condensed.
See accompanying notes to summarized interim financial statements.
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SUPERIOR UNIFORM GROUP, INC.
(Formerly Superior Surgical Mfg. Co., Inc.)
CONSOLIDATED SUMMARY OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------------
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 3,365,612 $ 4,148,658
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 2,175,187 2,176,500
Deferred income taxes 35,000 240,000
Changes in assets and liabilities:
Accounts receivable and other current
assets (2,356,543) (2,224,886)
Inventories (7,082,027) 142,563
Accounts payable 3,677,373 670,798
Other current liabilities 346,281 (150,458)
------------ ------------
Net cash flows provided from operating
activities 160,883 5,003,175
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net additions to property, plant and equipment (1,987,593) (739,323)
Goodwill acquired (2,067,461)
Other assets (340,162) (186,361)
------------ ------------
Net cash (used) in investing activities (4,395,216) (925,684)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Reduction in long-term debt (1,133,333) (1,133,333)
Declaration of cash dividends (1,965,401) (1,763,290)
Proceeds received on exercised stock options 864,907 235,013
Common stock reacquired and retired (1,780,701) (1,181,000)
------------ ------------
Net cash (used) in financing activities (4,014,528) (3,842,610)
------------ ------------
Net increase (decrease) in cash and
cash equivalents (8,248,861) 234,881
Cash and cash equivalents balance,
beginning of period 8,889,948 4,718,632
------------ ------------
Cash and cash equivalents balance,
end of period $ 641,087 $ 4,953,513
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest paid $ 565,207 $ 650,406
============ ============
Income taxes paid $ 3,080,458 $ 2,198,334
============ ============
</TABLE>
See accompanying notes to summarized interim financial statements.
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SUPERIOR UNIFORM GROUP, INC.
(Formerly Superior Surgical Mfg. Co., Inc.)
NOTES TO SUMMARIZED INTERIM FINANCIAL STATEMENTS
Note 1 - Summary of Significant Interim Accounting Policies:
a) Recognition of costs and expenses
Costs and expenses other than product costs are charged to income in interim
periods as incurred, or allocated among interim periods based on an estimate of
time expired, benefit received or activity associated with the periods.
Procedures adopted for assigning specific cost and expense items to an interim
period are consistent with the basis followed by the registrant in reporting
results of operations at annual reporting dates. However, when a specific cost
or expense item charged to expense for annual reporting purposes benefits more
than one interim period, the cost or expense item is allocated to the interim
periods.
b) Inventories
Inventories at interim dates are determined by using both perpetual records and
gross profit calculations.
c) Accounting for income taxes
The provision for income taxes is calculated by using the effective tax rate
anticipated for the full year.
d) Earnings per share
The Company adopted the provisions of the Financial Accounting Standards Board
Opinion No. 128, "Earnings Per Share," ("FAS 128"), during the fourth quarter of
1997, as required. Historical basic per share data under FAS 128 is based on the
weighted average number of shares outstanding. Historical diluted per share data
under FAS 128 is reconciled by adding to weighted average shares outstanding the
dilutive impact of the exercise of outstanding stock options. Dilutive potential
common shares for the three month periods ended June 30, 1998 and 1997 were
113,471 and 28,780, respectively. Dilutive potential common shares for the six
month periods ended June 30, 1998 and 1997 were 120,849 and 45,077,
respectively.
e) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
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f) Comprehensive Income
The Company adopted the provisions of FAS 130, "Reporting Comprehensive Income"
in the first quarter of 1998. FAS No. 130 requires disclosures of comprehensive
income including per-share amounts in addition to the existing income statement.
Comprehensive income is defined as the change in equity during a period, from
transactions and other events, excluding changes resulting from investments by
owners (e.g., supplemental stock offering) and distributions to owners (e.g.,
dividends). As of June 30, 1998, there are no items requiring separate
disclosure in accordance with this statement.
g) Operating Segments
The Company adopted the provisions of FAS No. 131 "Disclosures about Segments of
an Enterprise and Related Information." in the first quarter of 1998. FAS No.
131 requires disclosures of certain information about operating segments and
about products and services, geographic areas in which the Company operates, and
their major customers. The Company has evaluated the effect of this new standard
and has determined that currently they operate in one segment, as defined in
this statement.
Note 2 - Acquisition:
Effective January 2, 1998, the Company acquired the net assets of J & L Group,
Inc. ("J&L"), a manufacturer of embroidered sportswear, with revenues for the
year ended December 1997 of approximately $6,700,000.
Note 3 - Business Process Re-Engineering:
The condensed summaries of operations for the three and six month periods ended
June 30, 1998 include pre-tax charges (in compliance with an Emerging Issues
Task Force Consensus issued November 20, 1997) in the amounts of $1,055,171and
$2,150,083, respectively, as part of the Company's 1998 commitment to business
process re-engineering activities (integrated SAP systems). The Company expects
that for the balance of 1998 additional re-engineering process charges will be
incurred as the project is concluded. The total pre-tax charge for such matters
is expected to approximate $3,500,000 - $4,000,000 and will be substantially
completed by the end of 1998. The actual charges may differ from the amount
estimated based upon changes in the cost of hardware, software and
implementation.
The interim information contained above is not certified or audited; it reflects
all adjustments (consisting of normal recurring accruals) which are, in the
opinion of management, necessary to a fair statement of the operating results
for the periods presented, stated on a basis consistent with that of the audited
financial statements.
The financial information included in this form has been reviewed by Deloitte &
Touche LLP, independent certified public accountants; such review was made in
accordance with established professional standards and procedures for such a
review.
All financial information has been prepared in accordance with the accounting
principles or practices reflected in the financial statements for the year ended
December 31, 1997, filed with the Securities and Exchange Commission. Reference
is hereby made to registrant's Financial Statements for 1997, heretofore filed
with registrant's Form 10-K.
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[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Board of Directors of
Superior Uniform Group, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of
Superior Uniform Group, Inc. (the "Company") as of June 30, 1998, the condensed
consolidated summaries of operations for the six months and three months ended
June 30, 1998 and 1997, and the condensed consolidated summaries of cash flows
for the six months ended June 30, 1998 and 1997. This condensed financial
information is the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed financial information for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Superior Uniform Group, Inc. as of
December 31, 1997; and the related consolidated statements of earnings,
shareholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated February 19, 1998, we expressed an unqualified
opinion on those financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of December 31, 1997
is fairly stated, in all material respects, in relation to the balance sheet
from which it has been derived.
/s/ DELOITTE & TOUCHE LLP
July 24, 1998
Page 7
(DELOITTE TOUCHE TOHMATSU INTERNATIONAL LOGO)
<PAGE> 8
ITEM 2. Management's Discussion And Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Net sales of the registrant increased by approximately 12% in the first quarter
of 1998 compared to the first quarter of 1997. For the second quarter of 1998
compared to the second quarter of 1997, sales increased by approximately 3% due
to new customers and new uniform programs. Accordingly, for the six months ended
June 30, 1998, sales were approximately 7% more than the six months ended June
30, 1997.
Cost of goods sold approximated 33.8% for the six months ended June 30, 1998
compared to 33.5% for the six months ended June 30, 1997.
Selling and administrative expenses, as a percentage of sales, were
approximately 23.4% for the first six months of 1998 and 1997.
Interest expense of $434,825 for the six month period ended June 30, 1998
decreased 28% from $603,563 for the similar period ended June 30, 1997 due to
scheduled repayments of debt.
Net earnings decreased 22% to $1,804,491 for the three months ended June 30,
1998 as compared to net earnings of $2,323,602 for the same period in 1997. Net
earnings for the six months ended June 30, 1998 decreased 19% to $3,365,612 as
compared to net earnings of $4,148,658 for the same period in 1997. Included in
our earnings for the three and six months ended June 30, 1998 are pre-tax
charges (in accordance with an Emerging Issues Task Force Consensus issued
November 20, 1997) in the amounts of $1,055,171 and $2,150,083, respectively, as
part of our 1998 commitment to business process re-engineering activities
(integrated SAP systems). On a net of tax basis, these charges approximate $.08
and $.17 per share (diluted) for the three and six months ended June 30, 1998,
respectively. The Company expects that for the balance of 1998 additional
re-engineering process charges will be incurred as we conclude our project. The
total pre-tax charge for such matters is expected to approximate between
$3,500,000 and $4,000,000 and will be substantially completed by the end of
1998. The actual charges may differ from the amount estimated based upon changes
in the cost of hardware, software and implementation.
Accounts receivable and other current assets increased 9% from $26,722,727 on
December 31, 1997 to $29,079,270 as of June 30, 1998.
Inventories as of June 30, 1998 increased 17% to $49,605,036 from $42,523,009 on
December 31, 1997 due to unusually low inventory levels at December 31, 1997 and
to meet expected increases in sales.
Accounts payable increased 54% from $6,806,955 on December 31, 1997 to
$10,484,328 on June 30, 1998 primarily due to increases in purchases of
inventories.
The registrant's current portion of long-term debt of $2,266,667 and long-term
debt of $12,333,333 for June 30, 1998 is $1,133,333 less than it was at December
31, 1997, due to scheduled repayments of debt.
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LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $8,248,861 from $8,889,948 on December
31, 1997 to $641,087 as of June 30, 1998. The change is primarily a result of
increased inventory levels and expenditures related to the business
re-engineering process. Additionally, as of June 30, 1998, under its existing
revolving Credit Agreement, the registrant had $10,000,000 available to it. The
registrant has operated without hindrance or restraint with its present working
capital, as income generated from operations and outside sources of credit, both
trade and institutional, have been more than adequate.
In the foreseeable future, the registrant will continue its ongoing capital
expenditure program designed to maintain and improve its facilities. The
registrant at all times evaluates its capital expenditure program in light of
prevailing economic conditions. The registrant believes that its cash flow from
operating activities together with other capital resources and funds from credit
sources are adequate to meet all of its funding requirements for the foreseeable
future.
This quarterly report contains certain forward-looking statements that involve a
number of risks and uncertainties. Among the factors that could cause actual
results to differ materially are the following general economic conditions in
the areas of the United States in which the Company's customers are located;
changes in the healthcare, resort and commercial industries where uniforms and
service apparel are worn; the impact of competition; and the availability of
manufacturing materials.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults Upon Senior Securities
Inapplicable.
ITEM 4. Submission of matters to a vote of security-holders
The Annual Meeting of Shareholders was held on May 8, 1998. Of the
7,852,052 shares outstanding and entitled to vote at the meeting, 7,332,197
shares were present at the meeting, in person or by proxy. At the meeting the
shareholders:
a) Voted for the nomination of all proposed Directors being, Messrs. G.M.
Benstock, A.D. Schwartz, M. Benstock, S. Schechter, P. Benstock, M. Gaetan,
PhD, and S. Kirschner. The votes on all directors nominated were as
follows:
<TABLE>
<CAPTION>
NOMINEE VOTES FOR: VOTES WITHHELD:
------- ---------- ---------------
<S> <C> <C>
Gerald M. Benstock 7,296,297 35,900
Saul Schechter 7,296,297 35,900
Alan D. Schwartz 7,296,697 35,500
Michael Benstock 7,296,697 35,500
Peter Benstock 7,296,697 35,500
Manuel Gaetan 7,278,097 54,100
Sidney Kirschner 7,277,697 54,500
</TABLE>
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b) Approved the merger of the Company into its wholly-owned subsidiary,
Superior Uniform Group, Inc., a Florida corporation for the purpose of
changing the state of incorporation of the Company from New York to
Florida with 6,258,364 votes for the motion; 522,700 votes against and
7,000 votes abstaining.
c) Approved the change of the name of the Company to "Superior Uniform
Group, Inc." with 7,313,620 votes for the motion; 13,149 votes against
and 5,428 votes abstaining.
d) Ratified the appointment of Deloitte & Touche LLP, independent
certified public accountants, as auditors for the Company's financial
statements for the year ending December 31, 1998 with 7,314,534 votes
for the motion, 11,370 votes against and 6,293 votes abstaining.
ITEM 5. Other Information
Notice of Shareholder Proposal Deadline Date Under New Proxy Rule 14a-4 for the
1999 Annual Meeting
The Company hereby notifies all shareholders that February 10, 1999
(the "Deadline") is the date after which notice of a shareholder sponsored
proposal for consideration at the Company's 1999 annual meeting of shareholders
(other than in respect of a nominee for election to the Board of Directors)
submitted outside the processes of Rule 14a-8 under the Securities Exchange Act
of 1934, as amended (i.e., a proposal to be presented at the next annual meeting
of shareholders but not submitted for inclusion in the Company's proxy
statement) will be considered untimely under the new proxy Rule 14a-4(c)(1)
issued by the Securities and Exchange Commission. Under Rule 14a-4(c)(1), if a
proponent fails to notify the Company by the Deadline, then the management
proxies will be permitted to use their discretionary voting authority if such
proposal is raised at the annual meeting, without any discussion of the matter
in the proxy statement.
ITEM 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
a) Exhibits
<S> <C>
3.1 Amended and Restated Articles of Incorporation of Superior Uniform Group, Inc.
3.2 By-Laws of Superior Uniform Group, Inc.
15 Letter re: Unaudited Interim Financial Information.
27 Financial Data Schedule for Six Months ended June 30, 1998. (For SEC use only.)
</TABLE>
b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 4, 1998 SUPERIOR UNIFORM GROUP, INC.
By /s/ Gerald M. Benstock
----------------------------------------------
Gerald M. Benstock
Chairman and Chief Executive Officer
By /s/ Andrew D. Demott, Jr.
----------------------------------------------
Andrew D. Demott, Jr.
Vice President, Chief Financial Officer
and Treasurer (Principal Accounting Officer)
Page 10
<PAGE> 1
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SUPERIOR UNIFORM GROUP, INC.
Superior Uniform Group, Inc., a corporation organized and existing
under the General Corporation Law of the State of Florida (the "Corporation"),
does hereby certify:
I. The Corporation, pursuant to the provisions of Section 607.1007 of
the Florida Business Corporation Act (the "Act"), hereby adopts these Amended
and Restated Articles of Incorporation (the "Restated Articles"), which
accurately restate and integrate the original Articles of Incorporation of the
Corporation filed on May 27, 1997 and all amendments thereto.
II. The Restated Articles do not contain amendments requiring
shareholder approval, pursuant to Section 607.1005 of the Act, as the
Corporation has yet to issue any of its shares. The Restated Articles, and all
amendments contained herein, were duly and unanimously approved and adopted by
the directors of the Corporation on February 6, 1998, pursuant to Section
607.1005 of the Act.
III. The original Articles of Incorporation and all amendments and
supplements thereto are hereby superseded by the Restated Articles, which are
as follows:
1. NAME. The name of the corporation is Superior
Uniform Group, Inc. (the "Corporation").
2. CORPORATE ADDRESS AND REGISTERED OFFICE AND AGENT. The
principal office of the Corporation is located at 10099 Seminole Boulevard,
Seminole, Florida, 33772. The address of the Corporation's registered office in
the State of Florida is 10099 Seminole Boulevard, Seminole, Florida, 33772. The
name of its registered agent at such address is Michael Benstock.
3. PURPOSE. The nature of the business and the purpose for
which the Corporation is formed are to engage in any lawful act or activity for
which a corporation may be organized under the Act.
4. AUTHORIZED SHARES. The total number of shares of all
classes of capital stock which the Corporation shall have the authority to
issue is fifty million, three hundred thousand (50,300,000) shares, consisting
of (i) fifty million (50,000,000) shares of common stock, $.001 value per share
(the "Common Stock"), and (ii) three hundred thousand (300,000) shares of
preferred stock, $.001 value per share (the "Preferred Stock"). The
designation, powers, preferences and relative participating, optional or other
special rights and the qualifications, limitations and restrictions thereof in
respect of each class of capital stock of the Corporation are as follows:
-1-
<PAGE> 2
A. PREFERRED STOCK. Subject to the limitation
that, if the stated dividends and amounts payable on liquidation are not paid
in full, all the preferred shares shall participate ratably in the payment of
dividends including accumulations, if any, in accordance with the sum which
would be payable on such shares if all dividends were declared and paid in full,
and in any distribution of assets, other than by way of dividends, in
accordance with the sums which would be payable on distribution if all sums
payable were discharged in full, the designations, relative rights, preferences
and limitations of each series of the preferred shares shall be fixed from time
to time by the Board of Directors of the Corporation. Without limiting the
generality of the foregoing, the Board of Directors shall have the power (a) to
fix the number of shares to be included in any series, (b) to fix the
distinctive designation of any particular series, (c) to fix the dividend rate
payable per annum in respect of any series and whether such dividend shall be
cumulative or noncumulative, (d) to fix the amounts per share which any series
shall be entitled to receive in case of the redemption thereof in case of the
voluntary liquidation, distribution or sale of assets, dissolution or
winding-up of the Corporation, (e) to fix the right, if any, of the holders of
any series of preferred shares to convert the same into any other class of
shares and the terms and conditions of such conversion, (f) to fix the terms of
the sinking fund or purchase account, if any, to be provided for any series, and
(g) to fix the voting rights, if any.
B. COMMON STOCK. Each common share shall be
entitled to one vote per share. The common stock shall be subject to such prior
and superior rights of the holders of the preferred shares of each series as the
Board of Directors may fix as hereinbefore provided.
5. NAME AND MAILING ADDRESS OF INCORPORATOR. The name and
mailing address of the incorporator is James C. Rowe, 100 2nd Avenue South,
Suite 400N, St. Petersburg, Florida 33701.
6. MISCELLANEOUS.
A. SHAREHOLDERS' MEETINGS. Unless otherwise
prescribed by law, special meetings of the shareholders, for any purpose or
purposes, may be called by the Chairman of the Board of Directors, by the
President, or by the Board of Directors, and shall be called by the President or
the Secretary at the request in writing of a majority of the Directors.
B. BYLAWS. Provided they are not inconsistent
with the law or this Certificate of Incorporation, the Bylaws of the Corporation
may contain provisions relating to the business of the Corporation, transfer of
its shares, declaration and payment of dividends, nomination of directors,
meetings of shareholders and directors and any other matters relating to the
business and affairs of the Corporation. The Board of Directors from time to
time, may adopt, amend, repeal or supplement the Bylaws; provided, nevertheless,
that the shareholders may, at a meeting, amend or repeal any Bylaw so adopted by
the affirmative vote of a majority of the shares issued and outstanding and
entitled to vote thereon; and provided further that the Board of Directors shall
take no action in conflict with any Bylaw so adopted by the shareholders.
C. PREEMPTIVE RIGHTS. No holder of shares of
the Corporation of
-2-
<PAGE> 3
any class, now or hereafter authorized, shall have any preferential or
preemptive right to subscribe for, purchase or receive any shares of the
Corporation of any class, now or hereafter authorized, or any options or
warrants for such shares, or any rights to subscribe to or purchase such
shares, or any securities convertible into or exchangeable for such shares,
which may at any time be issued, sold, or offered for sale by the Corporation.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
as of this 17th day of April, 1998.
SUPERIOR UNIFORM GROUP, INC.
/s/ Gerald M. Benstock
----------------------------------
Gerald M. Benstock,
Chairman of the Board
and Chief Executive Officer
-3-
<PAGE> 1
Exhibit 3.2
BYLAWS
OF
SUPERIOR UNIFORM GROUP, INC.
ARTICLE I: OFFICES:
Section 1:
The office of the Corporation shall be located in the County of Pinellas, State
of Florida.
Section 2:
The Corporation may also have offices and places of business at such other
places within or without the State of Florida as the Board of Directors may,
from time to time, determine, or the business of the Corporation may require.
ARTICLE II: MEETINGS OF SHAREHOLDERS:
Section 1:
The annual meeting of the shareholders for the election of directors, and all
special meetings of shareholders for that or any other purpose, may be held at
such time and place within or without the State of Florida as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof. At
least ten (10) days written notice shall be given to all shareholders in
advance of any meeting of shareholders.
Section 2:
The annual meeting of shareholders shall be held in each year upon such date as
may be determined by the Board of Directors; at such meeting, the shareholders
shall elect a Board of Directors, and transact such other business as may
properly be brought before the meeting. The Board shall also determine the
place where the shareholders' meeting shall be held.
Section 3:
Special meetings of the shareholders for any purpose or purposes, unless
otherwise prescribed by statute or by the Articles of Incorporation, may be
called by the Chairman of the Board, by the President, or by the Board of
Directors, and shall be called by the President or the Secretary at the request
in writing of a majority of the Directors. Such request shall state the purpose
or purposes of the proposed meeting.
<PAGE> 2
Section 4:
Except as otherwise provided by the Articles of Incorporation, the holders of a
majority of the shares of the Corporation issued and outstanding and entitled
to vote thereon, present in person or by proxy, shall be necessary to and shall
constitute a quorum for the transaction of business at all meetings of the
shareholders.
ARTICLE III: DIRECTORS:
Section 1:
The number of directors which shall constitute the entire Board of Directors
shall be not less than three nor more than eight as the Board of Directors may,
by resolution adopted by a majority of the entire Board, from time to time
determine. Directors need not be shareholders of the Corporation. Directors
shall be elected at the annual meeting of the shareholders, except as provided
in Section 3 of this Article III, and each director shall be elected to serve
until his successor shall have been elected and shall have qualified.
Section 2:
Any director may resign at any time. The shareholders entitled to vote for the
election of directors may remove a director with cause.
Section 3:
If any vacancies occur in the Board of Directors, for any reason whatsoever, or
if any new directorships are created, all of the directors then in office,
although less than a quorum, may by majority vote, choose a successor or
successors or fill the newly created directorship, and the directors so chosen
shall hold office until the next annual meeting of the shareholders and until
their successors shall have been duly elected and qualified, unless sooner
displaced; provided, however, that if in the event of any such vacancy the
directors remaining in office shall be unable by majority vote to fill such
vacancy within thirty days of the occurrence thereof, the Chairman or the
President may call a special meeting of the shareholders, at which such vacancy
shall be filled.
ARTICLE IV. MEETINGS OF THE BOARD:
Section 1:
The Board of Directors of the Corporation may hold meetings, both regular and
special, either within or without the State of Florida.
-2-
<PAGE> 3
Section 2:
Regular meetings of the Board of Directors shall be held without notice
immediately following the annual meeting of shareholders, and may be held
without notice at such time and at such place as shall, from time to time, be
determined by the Board.
Section 3:
Special meetings of the Board of Directors may be called by the Chairman of the
Board or by the President on two days notice to each director, either
personally or by mail or by telegram; special meetings shall be called by the
Chairman of the Board or the President in like manner and on like notice on the
written request of two directors.
Section 4:
At all meetings of the Board of Directors, a majority of the entire Board shall
be necessary to and constitute a quorum for the transaction of business, and
the vote of a majority of the directors present at the time of the vote, if a
quorum is present, shall be the act of the Board of Directors except as may be
otherwise specifically provided by law or the Articles of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time until a
quorum shall be present. Notice of such adjournment shall be given to any
directors who are not present and, unless announced at the meeting, to the
other directors.
Section 5:
Any action required or permitted to be taken by the Board of Directors may be
taken without a meeting provided all members of the Board of Directors consent
in writing to the adoption of a resolution authorizing such action, and further
provided such resolution and written consents of the directors thereto shall be
filed with the minutes of the Board of Directors.
ARTICLE IV-A: EXECUTIVE AND OTHER COMMITTEES
Section 1: How Constituted and the Powers thereof:
The Board of Directors by the vote of a majority of the entire Board, may
designate three or more directors to constitute an Executive Committee, who
shall serve during the pleasure of the Board of Directors. Except as otherwise
provided by law, by these Bylaws, or by resolution adopted by a majority of the
whole Board of Directors, the Executive Committee shall possess and may
exercise during the intervals between the meetings of the directors, all of the
powers of the Board of Directors in the management of the business, affairs and
property of the Corporation, including, without limitation, the power to cause
the seal of the Corporation to be affixed to all papers that may require it,
other than the powers enumerated in Sec. 607.0825 of the Florida Business
Corporation Act.
-3-
<PAGE> 4
Section 2: Organization, etc.:
The Executive Committee may choose its own Chairman and its Secretary and may
adopt rules for its procedure. The Committee shall keep a record of its acts
and proceedings and report the same from time to time to the Board of
Directors.
Section 3: Meetings:
Meetings of the Executive Committee may be called by the Chairman of the
Committee, and shall be called by him at the request of any member of the
Committee; if there shall be no chairman, meetings may be called by any member
of the Committee. Notice of each meeting of the Committee shall be sent to each
member of the Committee by mail at least two days before the meeting is to be
held, or if given by the Chairman, may be given personally or by telegraph or
telephone at least one day before the day on which the meeting is to be held.
Notice of any meeting may be waived before, at or after the meeting, and shall
be deemed waived if the director attends the meeting without protesting prior
thereto or at its commencement, the lack of notice to him.
Section 4: Quorum and Manner of Acting:
A majority of the Executive Committee shall constitute a quorum for the
transaction of business, and the act of a majority of those present at the
meeting at which a quorum is present shall be the act of the Executive
Committee.
Section 5: Removal:
Any member of the Executive Committee may be removed, with or without cause, at
any time, by the Board of Directors.
Section 6: Vacancies:
Any vacancy in the Executive Committee shall be filled by the Board of
Directors.
Section 7: Other Committees:
The Board of Directors may, by resolution, provide for such other standing or
special committee as it deems desirable, and discontinue the same at pleasure.
Each Committee shall have such powers and perform such duties, not inconsistent
with law, as may be assigned to it by the Board of Directors.
Section 8:
Any action required or permitted to be taken by the Executive Committee may be
taken without a meeting provided all members of said Committee consent in
writing to the adoption of a resolution authorizing such action, and further
provided such resolution and written consents of the members of said Committee
thereto be filed with the minutes of the Executive Committee.
-4-
<PAGE> 5
ARTICLE V:
Section 1:
The executive officers of the Corporation shall be:
a. Chairman of the Board
b. Chief Executive Officer
c. One or more Presidents
d. One or more Vice Presidents
e. Secretary (and Assistant Secretary,
if designated by the Board of Directors)
f. Treasurer
Section 2:
All officers, as between themselves and the Corporation, shall have such
authority and perform such duties in the management of the Corporation as may
be provided in these Bylaws or, to the extent not so provided, by the Board of
Directors. The Board of Directors may also provide for the appointment of such
associate or assistant officers as the Board of Directors determines
appropriate or proper for the management of the Corporation and all such
associate or assistant officers, so appointed, shall have the authority and
responsibility as designated by the Board of Directors or, so long as not in
conflict, the Chief Executive Officer of the Corporation if such duties and
responsibilities have not otherwise been provided in the Bylaws of the
Corporation.
Section 3:
The Chairman of the Board of Directors shall preside at all meetings of the
Shareholders and Directors of the Corporation. The Chairman shall oversee all
directives and policies of the Board of Directors and shall supervise the
performance and authority of the Chief Executive Officer of the Corporation.
The Chairman shall further act for the Board in the absence of the directives
from the Board of Directors or its Executive Committee. The Chairman shall have
such other powers and duties as may, from time to time, be assigned to him by
the Board of Directors. The Chairman of the Board of Directors shall be
selected from among the Directors of the Corporation from time to time serving.
Section 4:
The Chief Executive Officer of the Corporation shall have primary, general and
active management and control of the business and affairs of the Corporation,
subject only to the direction of the Board of Directors, its Chairman and the
Shareholders. The Chief Executive Officer shall see that all orders and
resolutions of the Board of Directors, its Chairman and the Shareholders are
carried into effect. The Chief Executive Officer of the Corporation may also be
the Chairman of the Board of Directors or a President of the Corporation. The
Chief Executive Officer shall preside at all meetings of Shareholders and
Directors in the absence of the Chairman of the Board.
-5-
<PAGE> 6
Section 5:
The Corporation may have one or more Presidents and, if more than one, the
duties and responsibilities of each President shall be as designated by the
Chief Executive Officer of the Corporation subject, nevertheless, to the
directives of the Board of Directors. A President shall have general and active
management and control of the business and affairs of the Corporation in the
areas designated by the Board of Directors and, if not in conflict therewith,
by the Chief Executive Officer of the Corporation but shall be subject to
direction by the Chief Executive Officer of the Corporation. A President shall
have such power and authority as necessary to carry out the duties and
responsibilities so assigned. In the event of the absence of the Chairman of
the Board who may then also be the Chief Executive Officer of the Corporation,
a President shall preside at all meetings of Shareholders and Directors.
Subject to contrary direction from the Board or the Chief Executive Officer, a
President shall have the power and authority to fulfill the duties and
responsibilities of any other President in the absence of such other President.
Section 6:
The Vice President or Vice Presidents, if there be more than one, may be
assigned to specific areas, fields or divisions of the Corporation as may be
determined from time to time by the Board of Directors or, in the absence of
such determination, by the Chief Executive Officer of the Corporation or the
appropriate President if so authorized by the Chief Executive Officer. All such
Vice Presidents shall generally assist the Chief Executive Officer of the
Corporation and the President or Presidents of the Corporation and shall
perform such other duties and responsibilities as shall be prescribed by the
Board of Directors and, if not inconsistent therewith, by the Chief Executive
Officer of the Corporation or any President.
Section 7:
The Secretary (and in his absence any Assistant Secretary) shall attend all
meetings of the Board of Directors and all meetings of the Shareholders,
recording all votes and the minutes of all proceedings in a book to be kept for
that purpose. He shall give or cause to be given timely notice of all meetings
of the Shareholders and Board of Directors for which a notice is required by
law, the Articles of Incorporation or the Bylaws of this Corporation. He shall
also perform such other duties as may be prescribed by the Board of Directors
(or its Chairman) and, to the extent not in conflict therewith, by the Chief
Executive Officer of the Corporation under whose supervision the Secretary
shall act. The Secretary shall have custody of the seal of the Corporation and
shall have the responsibility to affix the seal of the Corporation to all
documents as authorized or directed by the Board of Directors and, in the
absence of such direction, by the Chief Executive Officer of the Corporation.
Section 8:
The Treasurer shall have the care and custody of corporate funds and other
valuable effects and assets of the Corporation, shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation,
and shall deposit all monies in the name and to the credit of the
-6-
<PAGE> 7
Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors or, so long as not in conflict therewith, by
the Chief Executive Officer of the Corporation, taking proper vouchers for such
disbursements, and shall render to the Board of Directors at regular or special
meetings of the Board, or whenever they require it, or to the Audit Committee
of the Board of Directors, an account of all transactions of the Corporation
and of the financial condition of the Corporation. If required by the Board of
Directors, the Treasurer shall give the Corporation a bond satisfactory to the
Corporation but at the expense of the Corporation. The Treasurer shall further
provide such reports or information regarding the condition of the Corporation,
its assets and its liabilities, as may be required, subject to direction by the
Chief Executive Officer, by all operating officers of the Corporation.
Section 9:
The Board of Directors may, at its discretion, from time to time designate the
Chairman of the Board of Directors, the Chief Executive Officer, one or more
Presidents or any Vice President as the Chief Operating Officer of the
Corporation who shall report to such officer, and perform such duties and
responsibilities, as may also be designated by the Board of Directors.
ARTICLE V-A: SHARES AND THEIR TRANSFER:
Section 1: Issue of Certificates of Stock:
The Board of Directors shall provide for the issue and transfer of the
certificates of stock of the Corporation and prescribe the form of such
certificates. Every owner of shares of the Corporation shall be entitled to a
certificate of stock, which shall be under the seal of the Corporation (which
seal may be a facsimile, engraved or printed), specifying the number of shares
owned by him, and which certificate shall be signed by the President or a Vice
President, or by the Chairman of the Board of Directors, and by the Secretary
or an Assistant Secretary or the Treasurer of the Corporation. Said signatures
may, wherever permitted by law, be facsimile, engraved or printed. In case any
officer or officers who shall have signed, or who facsimile signatures shall
have been used on any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death, resignation
or otherwise, before such certificate or certificates shall have been delivered
by the Corporation, such certificate or certificates may nevertheless be issued
and delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers of the Corporation.
Section 2: Transfer Agents and Registrars:
The Board of Directors shall have power to appoint a Transfer Agent and/or
Registrar of its stock; to prescribe their respective duties; and to require
the countersignature of such Transfer Agent and/or Registrar upon stock
certificates. The duties of the Transfer Agent and Registrar may be combined.
-7-
<PAGE> 8
Section 3: Transfer of Shares:
The shares of the Corporation shall be transferable only upon its books and by
the holders thereof in person or by their duly authorized attorneys or legal
representatives, and upon such transfer the old certificates shall be
surrendered to the Corporation by the delivery thereof to the person in charge
of the stock and transfer books and ledgers or to such other person as the
Board of Directors may designate for such purpose, and new certificates shall
thereupon be issued.
Section 4: Addresses of Shareholders:
Every shareholder shall furnish the Transfer Agent, or in the absence of a
Transfer Agent, the Registrar, or in the absence of a Transfer Agent and a
Registrar, the Secretary, with an address at or to which notices of meetings
and all other notices may be served upon or mailed to him, and in default
thereof, notices may be addressed to him at the office of the Corporation.
Section 5: Record Date:
The Board of Directors may fix a date not exceeding 50 days and not less than
10 days prior to the date of any meetings of shareholders or prior to the last
day on which the consent or dissent of shareholders may be effectively
expressed for any purpose without a meeting as the time as of which
shareholders entitled to notice of and to vote at such meeting or whose consent
or dissent is required or may be expressed for any purpose, as the case may be,
shall be determined, and all persons who were holders of record of voting
shares at such time and no others shall be entitled to notice of and to vote at
such meeting or to express their consent or dissent, as the case may be.
The Board of Directors shall also have power to fix a date not exceeding 50
days preceding the date fixed for the payment of any dividend or the making of
any distribution or for the allotment of any evidence of right or interest, or
for any other purpose, as a record time for the determination of the
shareholders entitled to receive any such dividend, distribution, right or
interest, or to participate in any such other action, and in such case only
shareholders of record at the time so fixed shall be entitled to receive such
dividend, distribution right or interest or to participate in such other
action.
Section 6: Lost and Destroyed Certificates:
The Board of Directors may direct a new certificate or certificates of stock to
be issued in the place of any certificate or certificates theretofore issued
and alleged to have been lost or destroyed, but the Board of Directors, when
authorizing such issue of a new certificate or certificates, may in its
discretion require the owner of the shares represented by the certificate so
lost or destroyed or his legal representative to furnish proof by affidavit or
otherwise to the satisfaction of the Board of Directors of the ownership of the
shares represented by such certificate alleged to have been lost or destroyed
and the facts which tend to prove its loss or destruction. The Board of
Directors may also require such person to execute and deliver to the
Corporation a bond, with or without sureties, in such sum as the Board of
Directors may direct, indemnifying the Corporation, its Transfer Agents and
Registrars, if any, against any claim that may be made against them, or any of
them, by reason of the issue of such certificate. The Board of Directors,
however, may in its discretion, refuse to
-8-
<PAGE> 9
issue any such new certificate, except pursuant to court order. The Board may
adopt such other and further requirements or procedures for the replacement of
lost or destroyed certificates as it deems advisable, and may delegate to the
Corporation's Transfer Agent such duties and responsibilities in connection
with such replacement procedures as it deems advisable.
ARTICLE VI: GENERAL PROVISIONS:
Section 1:
All checks or demands for money and notes or other instruments evidencing
indebtedness or obligations of the Corporation shall be signed by such officer
or officers or such other person or persons as the Board of Directors may, from
time to time, designate.
Section 2:
The fiscal year of the Corporation shall begin on January first and end on
December thirty-first.
Section 3:
The Board of Directors shall have power to amend, supplement, repeal or adopt
Bylaws at any regular or special meeting of the Board. However, any Bylaw
adopted by the Board may be amended or repealed by the affirmative vote, at a
meeting, of a majority of the shares issued and outstanding and entitled to
vote thereon, and the Board of Directors shall take no action in conflict with
any Bylaw so adopted by the shareholders.
-9-
<PAGE> 1
EXHIBIT 15
[DELOITTE & TOUCHE LLP LETTERHEAD]
LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
To the Board of Directors of
Superior Uniform Group, Inc.:
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Superior Uniform Group, Inc. for the periods ended June 30, 1998
and 1997, as indicated in our report dated July 24, 1998; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998, is
incorporated by reference in Registration Statement No. 2-85796 on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
July 24, 1998
Page 11
(DELOITTE TOUCHE TOHMATSU INTERNATIONAL LOGO)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE COMPANY'S FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 641,087
<SECURITIES> 0
<RECEIVABLES> 29,079,270
<ALLOWANCES> 0
<INVENTORY> 49,605,036
<CURRENT-ASSETS> 79,325,393
<PP&E> 26,638,895
<DEPRECIATION> 0
<TOTAL-ASSETS> 111,764,593
<CURRENT-LIABILITIES> 18,394,728
<BONDS> 12,333,333
0
0
<COMMON> 8,002,485
<OTHER-SE> 79,757,832
<TOTAL-LIABILITY-AND-EQUITY> 111,764,593
<SALES> 76,136,662
<TOTAL-REVENUES> 0
<CGS> 50,424,783
<TOTAL-COSTS> 70,861,050
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 434,825
<INCOME-PRETAX> 5,275,612
<INCOME-TAX> 1,910,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,365,612
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.42
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