Superior Group of Companies (SGC), a leading provider of uniform and promotional products, reported a solid performance in the first quarter of 2024. The company saw a 6% increase in consolidated revenues, reaching $139 million, and a significant 40% growth in EBITDA to $9.6 million. The improved financial metrics were accompanied by robust gross margins, particularly in the Healthcare Apparel and Branded Products segments. With an enhanced financial position, characterized by reduced net debt and an improved net leverage ratio, the company's leadership expressed confidence in the ongoing market conditions and their strategic execution. As a result, the outlook for the full year 2024 has been raised, with revenue projections now set between $563 million and $570 million, and earnings per diluted share anticipated to be in the range of $0.73 to $0.79.
Key Takeaways
- Superior Group of Companies reported a 6% rise in Q1 consolidated revenues to $139 million.
- EBITDA surged by 40% to $9.6 million, with notable gross margin improvements.
- The financial position strengthened with reduced net debt and better leverage ratios.
- The company raised its 2024 revenue outlook to $563-$570 million and EPS to $0.73-$0.79.
- Focus remains on organic growth, with a cautious but open stance on future acquisitions.
Company Outlook
- Superior Group of Companies has increased its 2024 revenue forecast.
- Expectations for earnings per diluted share have been raised.
- Management is optimistic about market conditions and the company's execution of strategies.
Bearish Highlights
- The company acknowledges economic uncertainties, including higher interest rates and upcoming elections that may impact the market.
Bullish Highlights
- Strong gross margin performance is expected to be sustained.
- Positive client spending trends in the Branded Products market.
- The company sees opportunities to take more market share in a competitive healthcare business landscape.
Misses
- There were no specific financial misses reported in the earnings call.
Q&A Highlights
- Management discussed price increases in call centers and their contribution to future improvements.
- Inventory levels have been right-sized, with a focus on improving inventory turns.
- The company achieved a 40% year-over-year reduction in debt, now at $84 million.
- Capital allocation strategies, including the potential for dividends or M&A, will be evaluated by the Board.
In the first quarter of 2024, Superior Group of Companies executed on its commitment to financial discipline by reducing its net debt to $84 million, marking a 40% decrease from the previous year. This debt reduction, along with the right-sizing of inventory, which saw a $30 million reduction, signifies the company's strategic approach to balancing its books and optimizing operations. The company has also signaled a shift in its capital expenditure, anticipating an uptick as part of its balanced earnings strategy throughout the year.
The earnings call revealed that Superior Group of Companies is not actively pursuing acquisitions at the moment, focusing instead on organic growth. Nonetheless, the company maintains the capacity for future acquisitions, suggesting a strategic openness to expansion when the time is right.
Despite the potential headwinds from macroeconomic factors such as higher interest rates and political events, the company has observed encouraging signs from clients in the Branded Products market. With a small share in a $24 billion market, Superior Group of Companies is poised to capture additional market share from competitors.
Investors and interested parties can access further details on the company's performance and strategic initiatives through the latest investor presentation available on Superior Group of Companies' updated website.
InvestingPro Insights
Superior Group of Companies (SGC) has demonstrated a robust financial performance in the first quarter of 2024, which is further reflected in several key metrics and insights from InvestingPro. With a market capitalization of $278.21M and a revenue of $543.3M for the last twelve months as of Q4 2023, the company's size and earnings power are evident. The adjusted P/E ratio stands at 31.72, indicating a valuation that investors might find appealing when considering the company's earnings potential.
One of the InvestingPro Tips highlights SGC's strong shareholder return, with the company maintaining dividend payments for 48 consecutive years and raising its dividend for the last three. This consistent shareholder remuneration is underscored by a dividend yield of 3.36% as of the last recorded date, showcasing the company's commitment to returning value to its investors.
Another notable InvestingPro Tip points out that SGC is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of just 0.25 as of the last twelve months ending Q4 2023. This suggests that the company's earnings growth may not be fully reflected in its current share price, presenting a potential opportunity for value investors.
Investors seeking more insights and analysis can find additional InvestingPro Tips for SGC at https://www.investing.com/pro/SGC. There are 11 more tips available, which can be accessed with a special offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Superior Uniform (SGC) Q1 2024:
Operator: Good afternoon, everyone. Welcome to the Superior Group of Companies First Quarter 2024 Conference Call. With us today are Michael Benstock, Chief Executive Officer, and Mike Koempel, Chief Financial Officer. As a reminder, this conference call 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 the 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 others readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements contained herein, except as required by law. And now, I'll turn the call over to Mr. Michael Benstock. Please go ahead.
Michael Benstock: Thank you, operator, and welcome everyone to our Q1 call. I'll begin with our first quarter highlights, including our revenue and profitability growth and our improving financial position. I'll then walk us through each of our three business segments discussing the recent improvement in market conditions and our strategies to maintain our momentum throughout 2024. I'll then hand the call over to Mike for additional detail on quarterly results and our more favorable outlook for 2024. At the end of the call, we'll be happy to take your questions. We had a strong start to 2024 with year-over-year improvements across the entire business. For the first quarter, we generated consolidated revenues of $139 million, reflecting a 6% year-over-year increase. Our EBITDA climbed 40% over the prior year quarter to $9.6 million. We generated $0.24 of diluted EPS, up sharply from $0.06 a year ago. On top of the improved operating results, we enhanced our financial position by generating solid operating cash flow that enabled us to further reduce our net debt and improve our net leverage ratio. This enhanced financial flexibility, ensures we can continue to make prudent investments to further grow our business organically, while also capitalizing on any market dislocations that could produce attractive M&A opportunities. Turning to market conditions. I'm pleased to say that so far in 2024, we've seen continued improvement in the end markets we serve. Our clients are generally increasing their spending. For now, we remain cautiously optimistic on the durability of underlying demand in each segment. But even more important for our shareholders to understand is the reality that we operate in huge markets and have a very small but growing share. Our success will be determined by remaining laser focused on new customer acquisition and our continued strong customer retention. To accomplish our goals, we're also investing in people and technology, in our very attractive businesses. We are optimistic about the markets in which we operate, confident in our own ability to execute, and therefore excited about the future. Let's have a look at how each of our businesses performed during the quarter. Starting with Healthcare Apparel, we grew top line revenues by 4% year-over-year and EBITDA grew by 68%, mainly driven by improved gross margins. Demand strength has improved since last year and opportunities continue to be uncovered. As I've outlined on recent calls. Last year, we kicked off rebranding efforts under the Wink trademark and are now entering year two of our direct-to-consumer efforts. Simultaneously, last year's launch of our B2B website is adding efficiency to the wholesale process, while we further fortify our relationships with other digital channels. All-in-all, we are seeing improved market conditions to Healthcare Apparel. This is a large, resilient and rapidly expanding addressable market and we're looking to grow our market share well beyond the more than 2 million caregivers who already wear our brands to work every day. Next up is our Branded Products segment, which generated 6% revenue growth during the first quarter as compared to the year ago quarter, along with 32% year-over-year growth in EBITDA, driven by continued gross margin improvement. The demand environment has been improving, continuing the positive trajectory we first noticed last summer. Our key to success for Branded Products emphasizes strong customer retention, growing our share of wallet, driving greater RFP activity and increasing our sales rep recruiting. This is a $24 billion and growing market and we intend to continue expanding our market share currently at less than 2%. Rounding out our business segment discussion, Contact Centers grew revenue 7% over the prior year quarter and EBITDA up 5% from last year. As we’ve indicated on prior calls, we’re now beginning to anniversary the higher labor and talent costs that have been with us since early 2023, along with our move over the past year to raise prices, which should bring stronger margins going forward. Demand drivers remain solid and our pipeline of new business remains strong. Our focus is on increasing seats with existing customers, continuing to build our pipeline of new customers and leveraging the very latest technology to enhance efficiency. With that, I’m going to hand the call over to Mike for a closer look at our first quarter performance along with our stronger outlook for 2024. Mike, go ahead.
Mike Koempel: Thank you, Michael. We generated solid first quarter results with quarterly revenue of $139 million, up 6% versus the year ago quarter. All three of our business segments grew with Branded Products up 6% to $87 million, Healthcare Apparel up 4% to $29 million, and Contact Centers up 7% to $24 million. This was profitable growth as well, with our consolidated growth margin up 380 basis points over the prior year, reaching nearly 40%. All three of our segments demonstrated improved gross margins versus the prior year quarter, particularly our Branded Products and Healthcare Apparel segments. Branded Products was up 480 basis points, continuing the trend of year-over-year margin rate improvement and reflecting favorable pricing and lower supply chain costs. Healthcare Apparel was up 350 basis points, primarily driven by lower costs, including improved manufacturing efficiencies in our Haiti facilities, improved market conditions and higher margin sales from our direct-to-consumer channel that launched in the second quarter of last year. Our first quarter SG&A was $49 million, flat sequentially from the fourth quarter, but up from $43 million a year earlier. As a percent of sales relative to the year earlier quarter, SG&A was up about 2 percentage points to 35%. This was primarily driven by increased employee related costs, an increased charge to recognize the fair value on written put options and lapping the benefit of a reduction in acquisition contingent liabilities from the first quarter of last year. In terms of EBITDA, we generated $9.6 million during the first quarter, 40% above the prior year’s $6.9 million. All three of our businesses contributed to this strong EBITDA performance, with Branded Products up 32% to $9.9 million, Healthcare Apparel up 68% to $2.6 million and Contact Centers up 5% to $2.9 million, despite the higher labor costs we’ve yet to fully anniversary. Our interest expense for the first quarter was $1.8 million, which improved by $800,000 from the year ago quarter, driven by our efforts to significantly reduce debt over the past year. Our first quarter net income was $3.9 million or $0.24 per diluted share, not only up slightly on a sequential basis, but up significantly from $900,000 or $0.06 per diluted share in the year ago quarter. The improved result was driven by the increased sales and gross margin rate improvement across all of our segments. Shifting to the balance sheet. We’ve continued to make improvements with cash and cash equivalents of $22 million, up from $20 million in the fourth quarter and debt outstanding lower by an additional $4 million during the quarter following the significant reduction in 2023. Additionally, we generated approximately $9 million of operating cash flow during the quarter, on top of significant operating cash flow generation last year. Based on lower debt outstanding combined with improved profitability, our net leverage ratio ended the quarter at 1.6x trailing 12 months covenant EBITDA, a substantial improvement from 3.8x a year ago. Turning to our updated full year 2024 outlook. We remain cautiously optimistic on the demand environment, continuing to slowly improve and on our own ability to push pricing when possible. We’re raising and tightening our 2024 revenue range to $563 million to $570 million versus the prior range provided in March of $558 million to $568 million and up from 2023 revenues of $543 million. In addition, we’re raising and tightening our full year earnings per diluted share outlook to a new range of $0.73 to $0.79, which reflects our updated sales guidance and better than expected gross margin performance, partially offset by incremental stock compensation expense from the May issuance of performance-based stock awards. Our updated outlook is up significantly from the prior range of $0.61 to $0.68 and reflects meaningful improvement over 2023’s $0.54, despite the estimated incremental non-cash stock compensation expense of $0.04. From a quarterly progression standpoint, we expect a more balanced performance throughout the year as compared to 2023’s heavily back end weighted results. With that operator, Michael and I would be happy to take questions if you could please open the lines.
Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Jim Sidoti with Sidoti & Company. Please go ahead.
Jim Sidoti: Hi. Good morning. Good afternoon. Thanks for taking the questions. I hope everyone’s well there. You had growth in all three businesses, but the one that really sets me was Branded Products. Was that more attributable to better pricing or better volume? Or can you give us some sense on how pricing affected that?
Michael Benstock: It’s a mix, certainly pricing effective, but we’re still in a pretty competitive environment. So it’s not just we don’t have freedom to price to the extent we’d love to, but it’s definitely a mix of new customers as we’ve added on more salespeople, which you know, has been one of our goals, they brought new customers to us as well. So it’s really – it’s a good mix. I wouldn’t say that we’ve been able to from quarter-to-quarter raise prices substantially. We – last year, on some of the ad-hoc business we did, which we do on a regular basis, we are able to price those appropriately for the opportunity. But a lot of our businesses, contract business too that gave us no opportunity to raise prices. So that was all new business or more business from existing customers.
Mike Koempel: And I think, Jim, also there’s still some favorable mix as well, both from a product as well as customer standpoint, where in addition to some pricing, we’re also seeing again favorability from a cost standpoint, some of which we started to realize in the back half of last year.
Jim Sidoti: Okay. And how about for the call centers? Have you been able to hang on – hold the price increases that you put through there?
Michael Benstock: Yes. We did put through the price increases. We spoke about that I think on last February’s calls and we implemented price increases, which were primarily effective beginning in the second quarter of last year. So we’re starting to anniversary some of those costs going forward and we should see some improvement accordingly. But yes, whatever little bit of pushback we have, we certainly were to explain through the inflationary environment. We were in from a labor standpoint, as well as the fact that our metrics were getting stronger and stronger with some of the technology we were employing, which actually helped bring down their costs overall.
Jim Sidoti: Okay. And then, the balance sheet has made a lot of progress over the past 12 months. Your leverage ratio well under 2x. It has been a little while since you’ve done a deal. How active are you on that front and are there a lot of opportunities out there right now?
Michael Benstock: There’s a lot of opportunities. We are very open to look at them. We haven’t found anything that excites us very much yet. We had – we’re really focused on organic growth right now and trying not to distract ourselves from what we believe is a pretty ripe environment in each of the markets that we serve. Whenever we get into these tough economic environment whereas the macro environment has been for the last year or so, with a lot of uncertainty, our competition tends to get weaker and we tend to get more aggressive. So we’re behaving very aggressively in the market to try to accelerate our organic growth and not be distracted by acquisitions. But there will be acquisitions in the future. We certainly have the horsepower to do it and the dry powder to do it, but we’re just going to wait until we find the right ones. There’s plenty of them out there in each of our verticals.
Jim Sidoti: And it really was a stellar quarter in terms of sales, in terms of EPS and free cash flow. You said the year would be more even this year, but are there – I would imagine that you’re not going to have four quarters like this. Are you anticipating a pickup in CapEx spending or any other – anything else that would affect the rest of the year?
Mike Koempel: From a CapEx standpoint, we would expect to pick up in CapEx, Jim. I mean, if you look at the quarter, we had low capital spending for the quarter. We still expect to spend more this year than we did last year. We consciously pulled back last year. So you’ll see a pickup on that just based on the timing of projects here, Q2 from the second quarter through the balance of the year. In terms of the cadence for the year, if you look back to last year, 75% of our earnings were in Q3 and Q4. So I think what we’re saying is we’ll be more balanced than we were last year, but there’ll still be some seasonality, if you will, that we’ve seen in some of our businesses in future quarters.
Michael Benstock: Yes. I think also – I’m going to jump in and just say we’re in an election year and weird things happen sometimes in the quarters prior to an election. It’s a major distraction for a lot of people, a lot of companies and uncertainty. And as this election gets more heated, it’s probably going to be a little bit more distracting than most elections, I would imagine. And so we’re couching the year a little bit and being certain that we’re putting out guidance that we feel very comfortable in being able to hit. So it’s going to be a good year. I’m glad we smoothed it out a little bit where we don’t have – we’re not going to have that step as Mike said, 75% our earnings happen in the second half of the year. It’s more likely to be a lot more balanced.
Jim Sidoti: Okay. All right. Thank you.
Operator: The next question is from Kevin Steinke with Barrington Research. Please go ahead.
Kevin Steinke: Good afternoon and congratulations on the strong start to the year. Just wondering what has trended maybe a little bit better than expected thus far in the year that enabled you to increase the guidance just one quarter into 2024.
Mike Koempel: Sure. I think, Kevin, you’ve seen in previous quarters, we’ve grown margin. Our margin rate has improved, improved in the third quarter, again, the fourth quarter. So I think getting another quarter of margin growth where we’re really seeing that growth across all three of our segments has been obviously a real positive for us. Seeing some momentum in the healthcare side of our business, both in terms of sales growth again, as well as seeing margin benefits. So we’re seeing the benefit of cleaner inventories. As I mentioned in our prepared remarks, starting to see some margin benefit from our direct-to-consumer businesses that’s starting to grow. So I think we’re seeing continued signs of momentum that obviously translated into strong results in the first quarter, which we believe will lead to stronger results for the year.
Michael Benstock: Yes. And since Mike didn’t mention Contact Centers, Contact Centers had some tough comps for the quarter and didn’t quite grow as we had expected. But part of that, it was a timing issue. I think you’re going to see greater growth from our Contact Center business going forward. Already in second quarter, we know that our growth is going to be better than what we were able to show in first quarter. So we’re optimistic about that business as well. And getting back to the cadence we’ve spoken about of high teens to low – I’m sorry, high single digit to low teen growth and high teens EBITDA margin.
Kevin Steinke: Okay, great. And you spoke there to the continued strength in gross margin and the improvement in gross margin really stood out in both Branded Products and Healthcare Apparel. And it sounds, would you say like there’s some sustainability to these gross margin levels going forward? Or I think I asked a similar question last quarter, but how are you thinking about that for the remainder of this year?
Mike Koempel: The remainder of the year, we expect margins to still reflect improvement over last year, like not necessarily to the level of the first quarter, but I would say, Kevin, as you’re looking at the balance of the year, again, we would expect to continue to reflect margin rate improvement in driving the business.
Kevin Steinke: Okay, great. And on the SG&A side, you mentioned, I think a couple items that increased SG&A in the first quarter, and you talked in the earnings release about some investments. So, is this a reasonable run rate for SG&A for the remainder of the year, or how are you thinking about that over the next few quarters?
Mike Koempel: Overall, Kevin, I would say, it's a reasonable proxy. We have made investments – continue to make investments in talent. And also, obviously, as the business improves, we're recognizing additional expenses as it relates to just associate payroll and whatnot. So, some of those will be consistent. The things we called out, for example, in the fair value put option that we had an adjustment to this quarter, that obviously wouldn't repeat itself. So there could be a little bit of variability quarter-to-quarter, but I'd say it's a good proxy for the balance of the year.
Kevin Steinke: Okay. And you mentioned starting to lap some of the higher labor costs in Contact Centers and perhaps increasing price there. What's your ability to increase price or plans to increase price over the course of the year in that business?
Michael Benstock: I think it'll be less frenetic than it was last year. We're not in a position to really have to raise prices dramatically to get where we want to go. We've done some small price increases already this year, but we'll continue to do them as necessary, and contracts allow us to do so and where we can't gain efficiencies in some other way to create more bottom line for that business.
Kevin Steinke: Okay, thank you for taking the questions. I’ll turn it back over.
Michael Benstock: Thanks Kevin.
Operator: The next question is from David Marsh with Singular Research. Please go ahead.
David Marsh: Hey, guys. Congratulations. Really a fantastic quarter.
Michael Benstock: Thank you.
Mike Koempel: Thanks Dave.
Michael Benstock: We're feeling good about it.
David Marsh: Yes, I would be too. It's great print here. Following up on kind of some of the earlier questions, I mean, this 40% gross margin is, I was just looking back the last few years. I don't think you guys have ever been this high. I mean, is this – it sounded like – in terms of your response to the last call, maybe feel like that could come back in a little bit. But it sounds like you also may feel like you could stay in pretty close to that range. Maybe you could just provide a little bit more color there.
Michael Benstock: Yes. If you remember on an earlier call, I don't quite recall when it was last year. We spoke about the fact we had shed some customers who were very, very low gross margin and were no longer accretive, and that's helped us a great deal, focus on the customers that are profitable and the margin improvement. I mean, it's been kind of a buyer's market out there with the pullback from most American companies from Asia. Asian factories are dying for work. They're all underutilized. So the pricing has been very good in our own factories in Haiti. We've seen great efficiency gains and really operating them in a much – I would say, a much more profitable manner to the company with less variances and so on to standard costs. So, all-in-all, I mean, it's all come together. We've got a good pricing environment with our customers. We've got a good costing environment with our vendors, and our own factories are doing very well. And that's allowing us to invest in a lot of talent in the business. And that talent obviously is to even create more efficiency within the business. So we're feeling good about where our margins are at. Slight pullback, it could go either way. I wouldn't necessarily bank on it pulling back. It could just as easily be even a little bit higher, not much, than it currently is.
David Marsh: That's a great color. Really helpful. Yes. The other thing I think that you guys should definitely be commended for is, the inventory reduction you guys have been able to achieve in the last 12 months looks like about $30 million, 24% reduction. I know last year you guys had talked about feeling as though the inventory was a little bit above where you want it to be. Would you say that you're kind of where you want it to be now? Or do you think you could still perhaps whittle a little more away on that?
Mike Koempel: Yes. Dave, last year we talked about setting the goal for ourselves by the end of the fiscal year to right-size inventories. And as you said, we made significant progress. And so we – by the end of 2023, we were able to achieve our goal of getting inventories more in line. As we look forward, as we're looking to fuel the business, I see us making certain investments in inventory to support sales. So going, I'd say, a little bit more on the offense in some cases as opposed to pulling back on inventory. But we feel good about where we are. And I think we'll be focusing on inventory turns going forward and obviously going forward, keeping that in line with the demand curve. So, again, as we look ahead and look at the trend of the business, we'll make investments – and continue to make investments in inventory. But again, overall feel good about the position we're in.
Michael Benstock: It's also – I'm just going to add a couple of lines to that. There's – particularly in the healthcare side of our business, which carries a lot of our inventory and most of our pain last year was in working really hard to reduce that. But there's an awful lot of turmoil in that business right now. Positive to us, the competitive landscape is getting smaller. We've had major competitors file bankruptcy. We've had turnover of CEOs in multiple businesses that compete with us and that are really just still trying to figure out what they're going to do. I think there's an opportunity for us to take greater market share. And so, we're going to respond to that as necessary on this timely basis as we can. And that could include not only being aggressive from a sales standpoint, but having to support a slightly higher level of inventory than we're currently supporting.
Mike Koempel: And Dave, I'll just add one more thing. And that would be, again, this would apply to the healthcare business. I think, as we move forward, the mix of the inventory is better as well. So we're introducing new product into our offering from our new design team. So, we're excited about not just the fact that the inventory is leaner, but also that the mix is with newly developed product entering the market.
David Marsh: Got it. Got it. That's helpful. Just one last question. Again, just on the balance sheet, because I think that it really deserves a lot of call-out and a lot of opportunity for some fanfare, if you will. You guys achieved a 40% year-over-year debt reduction from pre-elevated levels down to $84 million. As you go forward and you generate free cash flow, can you talk about priorities for cash flow? Will it be continued debt reduction, perhaps revisiting of the dividend maybe for an increase, or perhaps maybe share versus or something of that nature?
Mike Koempel: Yes. Dave, we'll certainly continue to, I'd say, in a way, chip away at the debt. You can see in the first quarter, we reduced our revolver by another $3 million. So as we generate additional free cash flow, we'll continue to pay some debt – some portions of that debt down as we move forward. In terms of the other ideas you mentioned, whether that's the dividend or previous question was around M&A, those, of course, are all things that we discuss with our Board, and we'll continue to evaluate the merit of other uses of those cash as we move forward as part of our capital allocation strategy.
David Marsh: Great, that’s all for me. Thanks very much, guys.
Operator: The next question is a follow-up from Kevin Steinke with Barrington Research. Please go ahead.
Kevin Steinke: Thank you. Yes. Just one follow-up. I wanted to ask about just the improving market conditions you referenced, and specifically in Branded Products. Certainly, still some macroeconomic uncertainty out there around interest rates, et cetera, but this may be kind of the overall tone you're hearing from your customers, and maybe they're just becoming more comfortable operating in this sort of environment.
Michael Benstock: Yes. We're seeing some pretty positive signs and increased spend with our clients and our prospects. There's still quite a bit of uncertainty due to higher interest rates, upcoming elections. Clients continue to be somewhat apprehensive, Kevin, about fully opening up their budgets due to the economic and political uncertainty, but let's put what you said in the past. None of this is really an excuse for not growing our sales. This is a huge market, a $24 billion market that we have a very, very small share in. And so, we have loads of market share to take from our competition and who we believe is not generally as well positioned as we are to do so. So, we can't use customer sentiment or economics as an excuse for not growing our business. It might grow at a slower pace than it would in a robust economy, but it's going to grow because we're going to continue to take market share.
Kevin Steinke: Okay. Thank you. That's helpful commentary. Appreciate it.
Operator: 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: Thank you, operator. We very much appreciate everybody being with us today. 2024 is off to a strong start. Our entire team, as you can well hear in our voices, is energized about the opportunities ahead. We look forward to meeting with investors at the many upcoming conferences that we'll be doing, and we'll keep you posted on our progress as we move through the year. As a reminder, you can find our latest investor presentation, which was just completed, on our very updated website, also just completed. Stay safe. Please don't hesitate to reach out with any further questions, and thank you, as always, for your interest in SGC.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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