Superior Group of Companies (SGC) risk factors, FY2025 10-K

Risks Relating to Our Business and Operations

1. 01Shortages of sourced goods or raw materials from suppliers, interruptions in our manufacturing, and local conditions in the countries in which we operate could adversely affect our results of operations
2. 02Our success depends upon the continued protection of our trade names, trademarks and other intellectual property rights and we may be forced to incur substantial costs to maintain, defend, protect and enforce our intellectual property rights
3. 03Our customers may cancel or decrease the quantity of their orders, which could negatively impact our operating results
4. 04If we experience problems with our distribution systems, our ability to meet customer expectations, manage inventory and complete sales may be harmed
5. 05If we are unable to accurately forecast customer demand, manage our inventory and plan for future expenses, our results of operations could be adversely affected20% rewritten
6. 06We pursue acquisitions from time-to-time to expand our business, which may pose risks to our business
7. 07Unanticipated issues related to integration may result in additional expense and disruption to our operations, and may require a disproportionate amount of our management’s attention, any of which could negatively impact our ability to achieve anticipated benefits, such as revenue and cost synergies
8. 08The failure to identify suitable acquisitions, discover liabilities associated with such businesses in the diligence process, successfully integrate these acquired businesses, or successfully manage our expanding operations, could adversely affect our business, results of operations or financial condition22% rewritten
9. 09If our information technology systems suffer interruptions or failures, including as a result of cyber-attacks, our business operations could be disrupted and our reputation, results of operations and/or financial condition could suffer
10. 10Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business
11. 11Our business may be impacted by unforeseen or catastrophic events, including the emergence of pandemics or other widespread health emergencies, extreme weather events or other natural disasters, terrorist attacks, and other unpredicted events
12. 12We are subject to international, federal, national, regional, state, local and other laws and regulations, and failure to comply with them may expose us to potential liability
13. 13Our business may be impacted by the non-performance of manufacturers to whom we made advance payments
14. 14Implementation of technology initiatives could disrupt our operations in the near term and fail to provide the anticipated benefits
15. 15Failure to preserve positive labor relationships with our employees could adversely affect our results of operations

Risks Relating to Our Industries

1. 16Increases in the price of finished goods, raw materials and labor used to manufacture our products could materially increase our costs and decrease our profitability
2. 17Major competitors for our Branded Products segment include companies such as BDA, Inc., HALO Branded Solutions, Inc., Staples, Inc., Cimpress PLC, HH Global Group Limited, Lands’ End, Inc. and Workwear Outfitters, LLC
3. 18Major competitors for our Contact Centers segment include companies such as TaskUs, Inc., Transparent BPO, Concentrix + Webhelp, Focus Services LLC, Ubiquity, CCI and RDI
4. 19Global, national or regional economic slowdowns, high unemployment levels, fewer jobs, changes in tax laws or cost increases might have an adverse effect on our operating results
5. 20The branded uniforms, healthcare apparel and promotional products industries are subject to pricing pressures that may cause us to lower the prices we charge for our products and adversely affect our financial performance
6. 21Additionally, increased customer demands for allowances, incentives and other forms of economic support could reduce our margins and affect our profitability
7. 22Our results of operations could be adversely affected by economic and political conditions globally and the effects of these conditions on our customers’ businesses and levels of business activity39% rewritten
8. 23Our manufacturing facilities and warehouses in Haiti are at risk of damage or disruption from civil unrest and other occurrences58% rewritten
9. 24The apparel industry, including branded uniforms and healthcare, is subject to changing fashion trends and if we misjudge consumer preferences, the image of one or more of our brands may suffer and the demand for our products may decrease
10. 25Our Contact Centers business is dependent on the trend toward outsourcing

Risks Relating to Our Indebtedness and Retirement Plan Obligations

1. 26Our indebtedness may limit cash flow available to invest in the ongoing needs of our business27% rewritten
2. 27Our credit agreement contains restrictions that limit our flexibility in operating our business
3. 28We have significant obligations under our unfunded supplemental executive retirement plan, and our available cash flow may be adversely affected in the event that payments become due under it30% rewritten

Risks Relating to Our Common Stock

1. 29Certain existing shareholders have significant control33% rewritten
2. 30Our share price may change significantly, and our shareholders may not be able to resell shares of our common stock at or above the price they paid or at all, and they could lose all or part of their investment as a result
3. 31There can be no assurance that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock
4. 32We are subject to periodic litigation in both domestic and international jurisdictions that may adversely affect our financial position and results of operations
5. 33Volatility in the global financial markets could adversely affect results
6. 34Inability to attract and retain key management or other personnel could adversely impact our business and financial condition
7. 35If we are unable to accurately predict our future tax liabilities, become subject to increased levels of taxation or our tax contingencies are unfavorably resolved, our results of operations and financial condition could be adversely affected34% rewritten
8. 36A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis26% rewritten
9. 37We have recognized, and may recognize in the future, impairment charges, which could materially adversely affect our financial condition and results of operations45% rewritten