BAMKO (asi/131431) increased sales and gross margin during the second quarter of 2022, but recorded a net loss, according to a financial report released after markets closed on Monday, Aug. 8.

For the three-month period ended June 30, the Los Angeles-headquartered Top 40 promotional products distributor generated total global revenue of $102 million, a 29% improvement over the same timeframe the prior year. Gross margin was $29.1 million, a year-over-year rise of about $5 million.

Meanwhile, net loss before taxes on income registered nearly $4.7 million. The loss came despite the rise in sales as selling, general and administrative expenses were up, primarily as a result of one-time charges related to goodwill and trade name impairments, inventory write-downs tied to personal protective equipment, and higher amortization expenses from acquisitions of other distributors that BAMKO has made.

Notably, BAMKO’s parent firm, Superior Group of Companies (SGC), reorganized its business into three segments, with the segment being headed by BAMKO now called the Branded Products Division. As part of this, company leaders made moves to centralize branding and go-to-market strategies under the BAMKO name and discontinue use of other business names. That effort contributed to BAMKO’s net loss, as it resulted in a $5.6 million impairment charge of indefinite-lived trade names.

Superior Group CEO Michael Benstock noted that the realignment into three business segments will, among other things, give the company the ability to better “capitalize on synergies across all branded product offerings.”

SGC’s other business divisions are healthcare apparel and contact centers. Across its entire business (all segments), SGC increased sales 13.1% year over year in Q2 to $147.9 million.

The company’s overall net loss of $26.7 million, or -$1.70 per diluted share, came as it faced one-time non-cash after-tax charges of $28 million and $4.5 million.

“Overall, while we were pleased with our revenue growth this quarter, we recognize the ever-evolving macro environment and emerging challenges of rising interest rates and historic levels of inflation,” Benstock said. “As a result, we are taking a disciplined and prudent approach to cash management and have begun to implement cost initiatives of at least $8 million in annualized savings, while still maintaining our focus on consistent sales growth.”

Based on reported 2021 North American promo products revenue of $215.8 million, BAMKO ranked 11^th on Counselor’s most recent list of the 40 largest distributors in the industry. The firm has been busy making acquisitions of late, acquiring dis­tributor Sutter’s Mill Specialties (asi/340210) in December and following that up with the purchase of Guardian Products (asi/215500), a $23 million distributor, in May. The moves facilitate a strategic effort to gain greater sales in the automotive dealership niche.