Superior Group of Companies - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 was soft: revenue declined 1.2% year over year to $137.1M and EPS fell to -$0.05, with EBITDA down to $3.5M as gross margin compressed and Branded Products mix skewed toward lower-margin items.
• The company cut FY 2025 revenue guidance to $550–$575M and withdrew EPS guidance due to heightened tariff-related macro uncertainty; management executed ~$13M annualized SG&A cuts starting in April to protect profitability.
• Consensus for Q1 2025 was $139.9M revenue and $0.12 EPS; SGC missed on both metrics (actual $137.1M and -$0.05), driven by margin pressure and slower uniform program rollouts; three covering estimates contributed to consensus*.
• Near-term catalysts: tariff trajectory and pass-through pricing, Q2 demand recovery in Branded Products pipeline, and realization of SG&A savings; potential stock pressure from guidance cut offset by buybacks and dividend continuity.

What Went Well and What Went Wrong

What Went Well

• Branded Products pipeline/booking strength with record opportunities and >90% retention; management expects a “relatively strong” Q2 and continued market share gains as the eighth largest distributor in a fragmented market.
• Contact Centers grew revenue 3% YoY; gross margin held ~flat at 53.6%, supported by new customers and a newly built sales team winning RFPs and building a record pipeline.
• Active capital returns: repurchased ~294k shares for $3.8M and maintained the $0.14 quarterly dividend, underscoring balance sheet flexibility and capital allocation discipline.

What Went Wrong

• Consolidated gross margin rate fell to 36.8% vs 39.8% prior year, with Branded Products GM down (32% vs 36.5%) due to sourcing mix and customer mix; consolidated EBITDA declined to $3.5M vs $9.6M last year.
• Healthcare Apparel revenue declined 7% YoY, with expense deleverage (SG&A 34.9% of sales vs 33.6% last year) and segment EBITDA down to $1.5M from $2.6M.
• Macro/tariff uncertainty slowed customer decision-making; guidance was reduced and EPS outlook withdrawn given sensitivity to tariff developments and uneven visibility.

Transcript

Operator (participant)

Good afternoon, and welcome to the Superior Group of Companies' First Quarter 2025 Conference Call. With us today are Michael Benstock, Chief Executive Officer, and Mike Koempel, Chief Financial Officer. As a reminder, this conference is being recorded. This call may contain forward-looking statements regarding the company's plans, initiatives, and strategies, and the anticipated financial performance of the company, including but not limited to sales and profitability. Such statements are based upon management's current expectations, projections, estimates, and assumptions. Words such as expect, believe, anticipate, think, outlook, hope, and variations of such words and similar expressions identify such forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause future results to differ materially from those suggested by forward-looking statements.

Such risks and uncertainties are further disclosed in the company's periodic filings with the Securities and Exchange Commission, including but not limited to the company's most recent annual report on Form 10-K and the quarterly reports on Form 10-Q. Shareholders, potential investors, and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and caution not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements except as required by law. Now I'll turn the call over to Michael Benstock.

Michael Benstock (CEO)

Thank you, and welcome everyone to today's call. As usual, I'll start with a review of consolidated financial highlights for the first quarter, including a discussion around our three business segments and current market conditions. Mike will then walk us through our financial results in more detail. Then we'd be happy to take your questions. Let's get started. Our customer buying hesitancy persisted through the quarter. On top of the uncertainty around inflation and interest rates, the recently introduced tariffs that have already been revised a few times, in particular the ever-escalating China tariff rate, not only further slowed customer decision-making but has made sourcing of our products somewhat of a challenge. The good news is that SGC has successfully navigated numerous economic challenges in the past, and we enter 2025 in a strong financial position to manage through the current economic uncertainty.

Of course, we have no line of sight to what the next move by our executive branch will be and what counter moves will take place in this tit-for-tat environment. As many of you are aware, for decades we have had a redundant manufacturing and sourcing strategy in place for most of what we produce. This competitive strategy has helped us greatly in the past, no matter the challenging environment. Let me point out, for those of you who are new to our story, that we are not heavily invested in China manufacturing or sourcing our finished products for our healthcare segment or, of course, for our call center segment.

A handful of our customers' products that we support in our call centers will be impacted by high tariffs on China-made products brought into the USA, and that will ultimately impact their businesses, which could have a trickle-down impact to us. It is also true that some of our customers could competitively benefit from high tariffs on products from China or elsewhere. During these challenging times, we have the advantage of leveraging the diversification of our three business segments combined with our multiple sources of supply. We remain focused on what we can control, which you can well imagine is centered on strong cost management. The cost we've recently eliminated from the business that Mike will speak to will support even stronger profitability as demand normalizes.

Taking a look at our consolidated first quarter results, we held revenue nearly flat year-over-year despite the macro headwinds and lapping a 6% increase in the first quarter a year ago. Growth in our contact center business was offset by a slight decline in branded products, our largest segment, and a decline in healthcare apparel. Also, on a consolidated basis, we recorded a first quarter net loss per share of $0.05 relative to earnings per diluted share of $0.24 in the prior year period. The profit decline was primarily the result of lower gross margins from sales mix changes that included fewer orders from higher margin customers. Despite the quarterly net loss, we maintained a strong balance sheet and net leverage position, which allows us to take a strategic long-term approach to capital allocation.

This includes prudently investing in our three attractive businesses while capitalizing on market dislocations to actively repurchase our common shares, which we consider a compelling value. Turning to our business segments and starting with branded products, sales of promotional products grew while branded uniform sales with existing customers were down year-over-year, primarily due to stronger uniform program rollouts in the year-ago quarter. Overall, our pipeline of business opportunities in branded products is setting new records. Our order backlog remains strong, and our customer retention continues to be over 90%. This gives us line of sight to Q2 being a relatively strong quarter. In addition, we continue to recruit new sales reps, win new accounts, and expand wallet share with our existing base.

All these actions will enable us, as we have in every crisis, to gain overall market share as we still control only a very small portion of this attractive market as the eighth largest of more than 25,000 distributors. Turning to healthcare apparel, economic uncertainty is also having an impact, most notably in institutional healthcare apparel and in our brick-and-mortar wholesale-related channel. We're investing and will continue to invest in growing our digital channels, both wholesale and direct-to-consumer, to continue expanding our single-digit market share in this growth industry. We're also spending to drive demand creation for our Wink and our Carhartt licensed brand products, albeit being very strategic while doing so. As for contact centers, while not immune to current macro uncertainty in end markets, this remains our highest margin segment.

We have begun to realize the benefits of our first-ever sales team through successfully participating and winning RFPs, as well as developing a record pipeline. We will continue to test and utilize cutting-edge technology that enhances the customer experience, enables operational efficiency, and serves as a competitive advantage, particularly as we target high-touch, small, and medium-sized enterprises. With that, I'll turn the call over to Mike, who will take us through first quarter results in detail, and then we'll open it up for Q&A. Mike.

Mike Koempel (CFO)

Thank you, Michael. Again, welcome to our call. On a year-over-year basis, our consolidated first quarter revenues were down 1%. Taking this segment by segment, for branded products, revenue was off less than 1%, an improvement over the fourth quarter's 5% decline. Consistent with last quarter, sales of promotional products grew, while branded uniform sales with existing customers were down year-over-year, primarily due to stronger uniform program rollouts in the year-ago quarter, as well as hiring freezes implemented by some of our customers during the first quarter. For healthcare apparel, first quarter revenue was down 7% versus the prior year, reflecting a decline in institutional healthcare apparel. For our contact center business segment, we were able to grow revenue 3% with solid retention and growth of existing customers, as well as adding new customers benefiting from our internal sales force.

Moving on to gross margin, on a consolidated basis, the gross margin rate was 36.8% for the first quarter, nearly flat sequentially and compared to 39.8% the prior year. SG&A was 36.5% of revenues compared to 35.2% the prior year quarter, and consolidated EBITDA came in at $3.5 million versus $9.6 million a year earlier. Let's take a closer look by segment. Our branded products' gross margin was 32% in the first quarter, which compares to 36.5% a year earlier, primarily the result of sourcing mix that led to higher product costs, as well as customer mix that led to lower pricing. SG&A for branded products was up just slightly at 27.1% of revenues, and we generated EBITDA of $5.7 million compared to $9.9 million in the prior year quarter.

Moving on to healthcare apparel, our first quarter gross margin of 37.2% was up sequentially but compares to 39.4% in the prior year period, with both variances reflecting changes in underlying cost of goods. In terms of SG&A for healthcare apparel, it was 34.9% of sales, up from 33.6% a year earlier, reflecting expense deleverage on this quarter's sales. The result was $1.5 million in healthcare apparel EBITDA as compared to $2.6 million in the first quarter of 2024. Lastly, on contact centers, we held gross margin essentially flat year-over-year at 53.6%, and SG&A as a percentage of revenues was 45.1%, up 90 basis points due to an increase in professional fees. The resulting EBITDA of $2.8 million was just slightly below $2.9 million in the year-ago quarter.

Moving further down the income statement, interest expense net was $1.2 million during the first quarter, improved from $1.8 million in the year-ago quarter due to a lower weighted average interest rate. The net loss for the quarter was approximately $800,000 compared to net income of $3.9 million in the first quarter of 2024, resulting in a net loss per share of $0.05 as compared to earnings per diluted share of $0.24 last year. Turning to the balance sheet, we ended the first quarter with $20 million in cash and cash equivalents, up from $19 million to start the year. We have also been actively repurchasing shares under the board's authorization that was recently expanded, as mentioned on our last call.

We consider the repurchases to be a favorable use of cash and completed $3.8 million worth of share buybacks during the first quarter to repurchase approximately 294,000 shares. Overall, we ended March with a net leverage ratio of 2.2x trailing 12-month covenant EBITDA versus 1.7x to start the year. We had anticipated a first quarter increase in net leverage given the back-end wetted nature of our forecast at the beginning of the year and the timing of cash outflows. We remain well within our covenant requirements and continue to maintain significant liquidity to support the growth of our business. Turning to our updated full-year outlook, given the heightened economic uncertainty following the April tariff announcements, we currently expect revenues to be in the range of $550 million-$575 million, suggesting year-over-year growth at the high end of about 2%.

This compares to our prior outlook range of $585million-$595 million. Clearly, the economic uncertainty is resulting in macro volatility that has many companies, including our own clients, delaying decision-making. Therefore, due to the bottom-line sensitivity to tariff and other developments as we move through the year, we are not providing an earnings per share outlook at this time. It is important to reiterate that we have a proven track record of successfully navigating challenging economic times, and the significant improvement that we have driven over the last two years in operating cash flow, working capital, and net leverage places our company in a position of strength relative to many of our competitors.

While we are managing our cash flow and expenses tightly during these uncertain times, including a reduction of approximately $13 million in annualized budgeted expenses, which will begin to impact the second quarter, we also remain laser-focused on driving growth and leveraging our position of strength to gain market share. With that, Operator, Michael and I would be happy to take questions if you could please open the lines.

Operator (participant)

We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Kevin Steinke with Barrington Research. Please go ahead.

Kevin Steinke (Equity Research Analyst)

Thanks. Good afternoon. Wanted to just start out by talking about the pipeline. You mentioned some really strong pipelines in both branded products and contact centers despite the uncertain environment that you're operating in. Maybe just talk about what's going well for you there. It sounds like you're being very aggressive in branded products as you always are, and you can take advantage of some opportunities in this environment. Maybe just love to hear more color on your ability to build a pipeline in those businesses.

Michael Benstock (CEO)

Thanks, Kevin. It's a great question. Let's start with branded products. Branded products came out of all this noise about tariffs really slugging, recruiting heavily, running webinars on how their customers and prospects could better handle the tariffs to the point social media posting all kinds of white papers and positioning themselves as the expert, as they really are the people closest to the ground in China in particular. You have to remember, too, that because over the years we've created this redundant strategy for manufacturing and sourcing, they have moved, even since the first Trump administration, a lot of their production to other countries. There are some products, of course, like electronics and hard goods, double-wall drinkware or stainless steel drinkware that can't be sourced anywhere else but China. People have choices. They don't have to buy those items because they're going to be so expensive.

They can buy apparel and other items, soft goods instead. We certainly have positioned ourselves well for that. I invite anybody who's on the call, we're three, to go out to BAMCO's website. There are three webinars out there that describe what people can do to avoid this. We've gotten a lot of prospects listening to those. Quite frankly, we've even allowed competitors and suppliers and everybody else to listen because we have positioned ourselves as the expert. That has driven a lot of business our way. Like they say, never waste a crisis. As you know from your experience, Kevin, BAMCO doesn't waste a crisis. During COVID, they pivoted greatly. We're pivoting now. BAMCO is looking great. Their bookings are strong. Their pipeline is strong.

There are things in their pipeline that are hanging out a little bit longer than usual, but their pipeline is growing not just because of that. It's also additional opportunities that we wouldn't have had otherwise. Things are happening slower, but they're happening and they're closing. There have been a lot of upside surprises even in the last week or two within their pipeline. I think that's the current condition, which is why we say we're feeling great about Q2. I think we've got a good line of sight to where Q2 is going to be. What we don't know is, while we see the beginning of Q3 being strong, we don't know how the back end of Q3 and Q4 are going to be yet. If typically we're back end weighted, and if that holds true again, we should come out of this better than most.

When you get to the contact centers, we built the sales team. They are bringing in more opportunities. While we expect we've pulled all of our customers, we expect a little bit of falloff here and there later on in the year in particular. If this continues, we also are bringing on customers at a better clip than we have in the past. We're feeling like we're going to come out of this better than most. Unfortunately, we don't know what the next moves are going to be from Washington. We presume that we'll soften our stance as time goes on instead of hardening it. Most of our forecasting takes that into account.

Kevin Steinke (Equity Research Analyst)

All right. That's very helpful color. Appreciate it. And with the reduced revenue guidance, like you said, you feel good about the second quarter. Are you just trying to build some conservatism into the second half, I guess, given the more limited visibility around that traditional ramp-up in the second half?

Michael Benstock (CEO)

I believe we'll still have a ramp-up in the second half. Yes, of course, we're building conservatism in the current environment of not knowing who's going to say what next. We're just trying to be extremely cautious. We're managing our costs within the business on an extremely conservative basis also.

Kevin Steinke (Equity Research Analyst)

Okay. I guess lastly, can you just discuss just from a cost perspective, again, maybe review as things stand now anyway, your exposure from a cost perspective to tariffs and your ability to pass on through price increases if needed?

Michael Benstock (CEO)

It's my business. You got to look at it. We'll pass on increases that we incur to most of our customers. We're permitted to do so either by contract or on a PO-by-PO basis. We're going to try to recoup as much of the tariff as possible through price increases. We believe that we'll have that well under control. Obviously, there may be some timing issues. We're not always allowed every moment to raise, sometimes by contract on a certain date or within a certain amount of notice. You have to keep in mind that we're a replenishment business, and we already have containers coming in that are at the higher tariffs. We've got to be ever aware of that. I think our customers are certainly hearing that from their other vendors. It's not as if it's a surprise to them.

Now, when you get to healthcare apparel, that's the branded products outlook. When you get to healthcare apparel, it's the same. If tariffs exist, we've got to pass them on. In the direct-to-consumer business, we just raise our prices directly to consumers. If it's direct through the wholesale channels, we will raise our prices. If on the institutional side of the business, which is particularly slow right now because they're more in a wait-and-see mode and there's no compelling reason for them to have to move forward quickly, they'll take a much slower approach to this. They'll wait and flesh out and see what happens with the tariffs before they start buying again. They have been impacted somewhat by the institutional side. It has been impacted by some of the pullbacks by the government on funding of research and so on.

Our main products, scrubs in particular, are not generally impacted that much by research, but they are to some extent. It is more lab coats and different other types of protective gear that are impacted by that. In the contact centers, where we have increases, it is going to be in only a few places, really. It is more how our customers are impacted by increases they have on the products that we are supporting in the call center. I feel like we will come out of this okay. Of course, our guidance with respect to the top line is how many of the things cannot we replace?

When you look at pulling our guidance down that far, it really has to do with the items within branded products that can't be sourced elsewhere, which I spoke about earlier, such as electronics and some of the injection-molded plastic items and the stainless steel drinkware. Again, we're taking a conservative approach to this. It could very well be we're able to take all those customers who want those items and get them into other items in other countries that will be less impacted.

Kevin Steinke (Equity Research Analyst)

Okay. Thank you. Appreciate all the insight. Turn it back over.

Operator (participant)

The next question comes from Jim Sidoti with Sidoti & Company. Please go ahead.

Jim Sidoti (Analyst)

Hi, Anthony. Thanks for taking the questions. It seems like customers react pretty quickly when the tariffs are announced. Should deals be made with other countries, including China, how fast do you think customers would react the other way?

Michael Benstock (CEO)

It's an interesting question. I think one of the issues that the entire country is faced with, Jim, is that the analyses we've seen on even if tomorrow Washington said, "Hey, we're kidding," it would take six to nine months from today before we'd see things getting closely back to normal because the supply chain has been so disrupted. Factories in a lot of places have let their workers go. They've run their lines out. They've let them go. They're not taking on any new business. They got to bring them all back. It's kind of like post-Chinese New Year where it takes a month to get everybody back to work and then ramp back up takes another month. Logistically, container ships are all in the wrong places. They're not sitting in China right now. They're elsewhere. They got to reposition them.

They got to get all the containers that on whatever it was called Independence Day or have to be sent to the U.S. That ties up a lot of containers with not enough ships to carry them. We have seen some analyses from pretty smart people that say, "We could be in for some supply chain disruption, not just in our business, in every business that's manufacturing outside the United States and more offshore than nearshore for the next year, year and a half.

Jim Sidoti (Analyst)

Right. You mentioned that you think you can implement about $13 million in cost savings on an annualized basis. Where do you get that? What lines do you think that impacts?

Mike Koempel (CFO)

Hi, Jim. It's Mike. All these cuts would be within our SG&A expense line. It's really looking across all of our segments and a number of different types of expenses where we just find opportunities for us to become more efficient and leaner. We're very comfortable that the cuts that we've taken will not impact our ability to continue to grow the business. Again, as things become more clear and we hopefully get on the other end of these high tariffs, we'll still be in a position to still grow and drive the business. I think largely operational efficiencies, again, across all three of our segments.

Michael Benstock (CEO)

Keep in mind, Jim, I'll jump in that we were staffed to support a $585 million-$595 million business. As we realized that it will be a number less than that, we reduced accordingly. That is really the gist of it.

Jim Sidoti (Analyst)

Okay. And then the last one for me. I know you don't want to get too detailed on guidance, but for the quarter that just ended, you had a gross margin around 37%. Is that a good proxy for the rest of the year?

Mike Koempel (CFO)

Jim, I would say if you look at the first quarter, clearly the branded products margin rate was down to last year and down versus a trend, as I'm sure you know. We would expect under, say, normal circumstances for that margin to rebound as we move throughout the year. Again, putting aside what we're talking about in terms of potential impacts as it relates to China and tariff and whatnot, under normal circumstances, we would expect that to rebound. In the first quarter, we had some sourcing cost mix, some pricing mix with some larger orders year-over-year that created a decrease in the first quarter. We wouldn't anticipate that in the second quarter.

Jim Sidoti (Analyst)

Okay. All right. Thank you.

Operator (participant)

The next question comes from David Marsh with Singular Research. Please go ahead.

David Marsh (Equity Analyst)

Hey, guys. Thank you very much for taking the questions. First, I wanted to ask, just looking at the cash flow statement here and seeing you guys had a pretty big reduction in AP and current liabilities. Is that just a seasonal impact, Mike? Just kind of a typical seasonal trend there?

Mike Koempel (CFO)

It is more of a seasonal impact. In the first quarter, we typically will have larger payments associated with bonus payments for the prior year, payments that we make with some of our benefit plans. Those, again, tend to be more weighted there in the first quarter, which you can see really in both years. We had both first quarters, we had significant declines in those accounts year-over-year.

David Marsh (Equity Analyst)

Gotcha. As that washes out over the course of the year, that will be less of a drag on cash flow and allow you to generate a little bit more operating cash flow throughout the course of the year, right?

Mike Koempel (CFO)

Sure. That would be our expectation.

David Marsh (Equity Analyst)

Right. Okay. Just kind of turning to the P&L side, I guess you were able to hold SG&A pretty steady year-over-year, really. Can you give us a little bit more insight on where you think you might be able to realize some savings there just to help us understand kind of timing and how that would flow through?

Mike Koempel (CFO)

Sure. As we mentioned in the prepared remarks, we executed approximately $13 million in annualized savings. We put those measures in place in the April timeframe. We'll begin to see the benefit of those cuts starting here in the second quarter. There are certain reductions, whether it's contractual or just periods where we need to transition, where some of those savings will materialize a little bit later in the year, but the vast majority will start to benefit the second quarter and again, hold throughout the balance of the year.

David Marsh (Equity Analyst)

Okay. And then just lastly for me, as things get a little bit choppier in the water here, you guys did actually do a small acquisition last quarter, I believe it was. And you're pretty well positioned from a liquidity perspective to perhaps capitalize on some opportunities should they come up. Are you starting to see anything where there are opportunities to make some acquisitions? And what space would you really focus on first and foremost as you evaluate those opportunities?

Michael Benstock (CEO)

First and foremost, right now, we're conserving cash. We don't know what the future is going to bring. So we have put, while we're still talking to potential companies about joining us, we would not right now entertain closing any acquisitions until we have more clarity around what's happening from a tariff standpoint. We believe that there's going to be a very rich field out there of acquisition opportunities. Once this is all done, there are competitors who are really suffering out there who were 100% reliant on China or vendors who were buying suppliers who were buying Chinese product and selling it to them. So we believe we're going to be better positioned than anybody else to take advantage of that. On the call center side, we're still looking for geography of lower cost, and we're doing a lot of exploration there.

Whether we do that through acquisition or wind up doing it on its own, the jury is still out. We're still exploring both those possibilities. Right now, though, from an acquisition standpoint, there would have to be a really compelling reason to do one. I would tell you it would have to be immediately accretive and have to be bought at the right price.

David Marsh (Equity Analyst)

Got it. Got it. All right. Thank you very much, guys, and wish you the best for the balance of the year.

Michael Benstock (CEO)

Thank you.

Operator (participant)

The next question comes from Michael Kupinski with Noble Capital Markets. Please go ahead.

Jacob Mutchler (Equity Research Associate)

Hi. Jacob Mutchler for Michael Kupinski. You already partially addressed this, but would you be able to provide a few more comments on the price elasticity of branded products and how you're thinking about profitability in the segment compared to maybe eating more of those costs and growing market share? Thanks.

Michael Benstock (CEO)

Yeah. Let's start with the branded products business. The preponderance of their business is branded merchandise as opposed to branded uniforms. And branded merchandise is basically on an order-by-order basis. So we're pricing in the tariff. Somebody wants product from China, and we do have customers who actually still want product from China, even with the 145% tariffs. We're happy to serve them. Somebody who wants, as I said, other products, will have to go to another country. All of our confirmations of purchase orders and all of our correspondence with customers allows us to build in tariffs as they happen. Even if there are orders on the water and tariffs change, we can put a tariff price on that order. We expect to recoup most of that. I would say the lion's share of that with our clients.

On the uniform side, we have the same language in most of our contracts. We started changing them during the first Trump administration. Most of our contracts that are not evergreen contracts have that language in it. We are going back to customers and saying, "We're raising your prices for the products that come from China. At the same time, we're trying to move your products to other places." Most of our products are not made in China, but the ones that are, we will attempt to move. Almost without exception, unless it is a very specialized product on the apparel side, we should be able to move it out. As I said earlier, there could be timing issues of when we raise prices versus when we are actually able or when we want to raise price versus when we are actually able to do it.

We should be fine on this. I think it's very elastic, the answer to your question. I think our customers are not surprised when we're coming back to them and saying, "Look, there's a tariff on this. You want it. By contract, you have to take it. By PO, you have to take it already. If you don't want that, let's go find you something somewhere that suits your budget." It may be a lower-priced item with still a high tariff on it, so they wind up paying the same thing. I think there's a ton of flexibility there.

Jacob Mutchler (Equity Research Associate)

Gotcha. Thanks. All my other questions have been addressed. Thanks for your time.

Michael Benstock (CEO)

Thank you.

Operator (participant)

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

Michael Benstock (CEO)

Thank you, operator. We appreciate everyone being on the call. I want to thank our loyal customers and our dedicated employees for their tremendous efforts. As shareholders, you can rest assured we're making the most of current macro conditions while keeping our eye on the prize, which is a compelling long-term outlook for each of our three attractive businesses. We'll keep you updated as we move through the year. Please do not hesitate to reach out with any additional questions. Thanks again for your interest in SGC, and enjoy the evening.

Operator (participant)

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