---

FORM lO-Q

SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549

|(Mark One)                                                                                             
|-------------------------------------------------------------------------------------------------------
|                                                                                                       
|x                                                                                                      
|                                                                                                       
|For the quarter ended March 31, 2003                                                                   
|                                                                                                       
|OR                                                                                                     
|                                                                                                       
|o                                                                                                      
|                                                                                                       
|Commission file number 1-5869-1                                                                        
|                                                                                                       
|SUPERIOR UNIFORM GROUP, INC.                                                                           
|                                                                                                       
|Incorporated - Florida                                                                                 
|                                                                                                       
|                                                                                                       
|10055 Seminole Boulevard Post Office Box 4002 Seminole, Florida 33775-0002 Telephone No.:  727-397-9611
|                                                                                                       

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 o
|----- | ----

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)

|Yes o | No x
|----- | ----

As of May 1, 2003 the registrant had 7,137,887 common shares outstanding, which is the registrants only class of common stock.

---



---

PART I - FINANCIAL INFORMATION

|ITEM 1. | Financial Statements
|------- | --------------------

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY CONDENSED
CONSOLIDATED SUMMARY OF OPERATIONS (Unaudited )

|                                                                                                 |  | Three Months Ended March 31, |           
|------------------------------------------------------------------------------------------------ |  | ---------------------------- | ----------
|                                                                                                 |  |                              |           
|                                                                                                 |  | 2003                         |           
|                                                                                                 |  |                              |           
|Net sales                                                                                        |  | $                            | 30,954,947
|                                                                                                 |  |                              |           
|Costs and expenses:                                                                              |  |                              |           
|Cost of goods sold                                                                               |  |                              | 20,015,455
|Selling and administrative expenses                                                              |  |                              | 9,802,665 
|Interest expense                                                                                 |  |                              | 170,641   
|                                                                                                 |  |                              |           
|                                                                                                 |  |                              | 29,988,761
|                                                                                                 |  |                              |           
|Earnings before taxes on income and cumulative effect of change in accounting principle          |  |                              | 966,186   
|Taxes on income                                                                                  |  |                              | 340,000   
|                                                                                                 |  |                              |           
|Earnings before cumulative effect of change in accounting principle                              |  |                              | 626,186   
|Cumulative effect of change in accounting principle, net of tax benefit of $2,560,000            |  |                              |          
|                                                                                                 |  |                              |           
|Net earnings (loss)                                                                              |  | $                            | 626,186   
|                                                                                                 |  |                              |           
|Weighted average number of shares out-standing during the period     (Basic)                     |  |                              | 7,150,767 
|(Diluted)                                                                                        |  |                              | 7,257,680 
|Basic net earnings per common share before cumulative effect of change in accounting principle   |  | $                            | 0.09      
|Cumulative effect of change in accounting principle, net of tax                                  |  |                              |          
|                                                                                                 |  |                              |           
|Basic net earnings (loss) per common share                                                       |  | $                            | 0.09      
|                                                                                                 |  |                              |           
|Diluted net earnings per common share before cumulative effect of change in accounting principle |  | $                            | 0.09      
|Cumulative effect of change in accounting principle, net of tax                                  |  |                              |          
|                                                                                                 |  |                              |           
|Diluted net earnings (loss) per common share                                                     |  | $                            | 0.09      
|                                                                                                 |  |                              |           
|Dividends per common share                                                                       |  | $                            | 0.135     
|                                                                                                 |  |                              |           

The results of the three months ended March 31, 2003 are not necessarily indicative of results
to be expected for the full year ending December 31, 2003.

See accompanying notes to condensed consolidated interim financial statements.

2



---

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS

|                                             |  | March 31, 2003 |            | December 31, 2002 (1 ) |  
|-------------------------------------------- |  | -------------- | ---------- | ---------------------- | -
|                                             |  |                |            |                        |  
|                                             |  | (Unaudited)    |            |                        |  
|ASSETS                                       |  |                |            |                        |  
|CURRENT ASSETS:                              |  |                |            |                        |  
|Cash and cash equivalents                    |  | $              | 8,379,346  |                        | $
|Accounts receivable and other current assets |  |                | 22,329,554 |                        |  
|Inventories*                                 |  |                | 42,518,137 |                        |  
|                                             |  |                |            |                        |  
|TOTAL CURRENT ASSETS                         |  |                | 73,227,037 |                        |  
|                                             |  |                |            |                        |  
|PROPERTY, PLANT AND EQUIPMENT, net           |  |                | 19,302,414 |                        |  
|GOODWILL                                     |  |                | 741,929    |                        |  
|OTHER ASSETS                                 |  |                | 5,421,273  |                        |  
|DEFERRED INCOME TAXES                        |  |                | 20,000     |                        |  
|                                             |  |                |            |                        |  
|                                             |  | $              | 98,712,653 |                        | $
|                                             |  |                |            |                        |  
|LIABILITIES AND SHAREHOLDERS EQUITY         |  |                |            |                        |  
|CURRENT LIABILITIES:                         |  |                |            |                        |  
|Accounts payable                             |  | $              | 4,192,836  |                        | $
|Other current liabilities                    |  |                | 6,437,085  |                        |  
|Current portion of long-term debt            |  |                | 1,122,999  |                        |  
|                                             |  |                |            |                        |  
|TOTAL CURRENT LIABILITIES                    |  |                | 11,752,920 |                        |  
|                                             |  |                |            |                        |  
|LONG-TERM DEBT                               |  |                | 7,157,204  |                        |  
|DEFERRED INCOME TAXES                        |  |                |           |                        |  
|SHAREHOLDERS EQUITY                         |  |                | 79,802,529 |                        |  
|                                             |  |                |            |                        |  
|                                             |  | $              | 98,712,653 |                        | $
|                                             |  |                |            |                        |  

*     Inventories consist of the following:

|                |  | March 31, 2003 |            | December 31, 2002 |  
|--------------- |  | -------------- | ---------- | ----------------- | -
|                |  |                |            |                   |  
|                |  | (Unaudited)    |            |                   |  
|Finished goods  |  | $              | 34,600,800 |                   | $
|Work in process |  |                | 1,866,672  |                   |  
|Raw materials   |  |                | 6,050,665  |                   |  
|                |  |                |            |                   |  
|                |  | $              | 42,518,137 |                   | $
|                |  |                |            |                   |  

|(1) | The balance sheet as of December 31, 2002 has been derived from the audited balance sheet as of that date and has been condensed.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to condensed consolidated interim financial statements.

3



---

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED SUMMARY OF CASH FLOWS (Unaudited)

|                                                                                                                                               |  | Three Months Ended March 31, |           
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----------
|                                                                                                                                               |  |                              |           
|                                                                                                                                               |  | 2003                         |           
|                                                                                                                                               |  |                              |           
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                           |  |                              |           
|Earnings before cumulative effect of change in accounting principle                                                                            |  | $                            | 626,186   
|Adjustments to reconcile net earnings before cumulative effect of change in accounting principle to net cash
provided by operating activities: |  |                              |           
|Depreciation and amortization                                                                                                                  |  |                              | 916,552   
|Provision for bad debts                                                                                                                        |  |                              | 45,000    
|Deferred income tax benefit                                                                                                                    |  |                              | (170,000  
|Changes in assets and liabilities:                                                                                                             |  |                              |           
|Accounts receivable                                                                                                                            |  |                              | 1,059,336 
|Inventories                                                                                                                                    |  |                              | 137,797   
|Prepaid expenses and other current assets                                                                                                      |  |                              | 249,651   
|Accounts payable                                                                                                                               |  |                              | (999,157  
|Other current liabilities                                                                                                                      |  |                              | 642,663   
|                                                                                                                                               |  |                              |           
|Net cash flows provided from operating activities                                                                                              |  |                              | 2,508,028 
|                                                                                                                                               |  |                              |           
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                           |  |                              |           
|Additions to property, plant and equipment                                                                                                     |  |                              | (242,433  
|Disposals of property, plant and equipment                                                                                                     |  |                              | 82,631    
|Other assets                                                                                                                                   |  |                              | (205,608  
|                                                                                                                                               |  |                              |           
|Net cash used in investing activities                                                                                                          |  |                              | (365,410  
|                                                                                                                                               |  |                              |           
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                           |  |                              |           
|Repayment of long-term debt                                                                                                                    |  |                              | (268,945  
|Payment of cash dividends                                                                                                                      |  |                              | (966,480  
|Proceeds received on exercised stock options                                                                                                   |  |                              | 367,184   
|Common stock reacquired and retired                                                                                                            |  |                              | (365,750  
|                                                                                                                                               |  |                              |           
|Net cash used in financing activities                                                                                                          |  |                              | (1,233,991
|                                                                                                                                               |  |                              |           
|Net increase (decrease) in cash and cash equivalents                                                                                           |  |                              | 908,627   
|Cash and cash equivalents balance, beginning of year                                                                                           |  |                              | 7,470,719 
|                                                                                                                                               |  |                              |           
|Cash and cash equivalents balance, end of period                                                                                               |  | $                            | 8,379,346 
|                                                                                                                                               |  |                              |           

See accompanying notes to condensed consolidated interim financial statements.

4



---

SUPERIOR UNIFORM GROUP, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2003 AND
2002

(Unaudited)

NOTE 1  Summary of Significant Interim Accounting Policies:

a)     Basis of presentation

The condensed consolidated
interim financial statements include the accounts of Superior Uniform Group, Inc. and its wholly-owned subsidiary, Fashion Seal Corporation.  Intercompany items have been eliminated in consolidation. The accompanying unaudited interim financial
statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations.  These condensed financial statements should be read in conjunction with the audited financial statements and
notes thereto included in the Companys Report on Form 10-K for the year ended December 31, 2002, and filed with the Securities and Exchange Commission.  The interim financial information contained herein is not certified or audited; it
reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the operating results for the periods presented, stated on a basis consistent with that of the audited
financial statements.  The unaudited financial information included in this report has been reviewed by Deloitte & Touche LLP, independent certified public accountants, and their review report thereon accompanies this filing; such review
was made in accordance with established professional standards and procedures for such a review. The results of operations for any interim period are not necessarily indicative of results to be expected for the full year.

b)     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.

c)     Inventories

Inventories at interim dates are
determined by using both perpetual records and gross profit calculations.

d)     Accounting for income taxes

The provision for
income taxes is calculated by using the effective tax rate anticipated for the full year.

e)     Earnings per share

Historical basic per share data
is based on the weighted average number of shares outstanding. Historical diluted per share data is reconciled by adding to weighted average shares outstanding the dilutive impact of the exercise of outstanding stock options.

5



---

|                                                                                               |  | Three Months Ended March 31, |          
|---------------------------------------------------------------------------------------------- |  | ---------------------------- | ---------
|                                                                                               |  |                              |          
|                                                                                               |  | 2003                         |          
|                                                                                               |  |                              |          
|Earnings (loss) used in the computation of basic and diluted earnings (loss) per common share: |  |                              |          
|Earnings before cumulative effect of change in accounting principle                            |  | $                            | 626,186  
|Cumulative effect of change in accounting principle, net of tax                                |  |                              |         
|                                                                                               |  |                              |          
|Net earnings (loss)                                                                            |  | $                            | 626,186  
|                                                                                               |  |                              |          
|Weighted average shares outstanding                                                            |  |                              | 7,150,767
|Common stock equivalents                                                                       |  |                              | 106,913  
|                                                                                               |  |                              |          
|Total weighted average shares outstanding                                                      |  |                              | 7,257,680
|                                                                                               |  |                              |          
|Earnings (loss) per common share:                                                              |  |                              |          
|Basic earnings before cumulative effect of change in accounting principle                      |  | $                            | 0.09     
|Cumulative effect of change in accounting principle, net of tax                                |  |                              |         
|                                                                                               |  |                              |          
|Net earnings (loss)                                                                            |  | $                            | 0.09     
|                                                                                               |  |                              |          
|Diluted earnings before cumulative effect of change in accounting principle                    |  | $                            | 0.09     
|Cumulative effect of change in accounting principle, net of tax                                |  |                              |         
|                                                                                               |  |                              |          
|Net earnings (loss)                                                                            |  | $                            | 0.09     
|                                                                                               |  |                              |          

f)     Use of Estimates

The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of  America 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.

g)     Comprehensive Income (Loss)

Total comprehensive
income (loss) represents the change in equity during a period, from sources other than transactions with shareholders and, as such, includes net earnings.  For the Company, the only other component of total comprehensive income (loss) is the
change in the fair value of derivatives accounted for as cash flow hedges.

|                                                                  |  | Three Months Ended March 31, |        
|----------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                  |  |                              |        
|                                                                  |  | 2003                         |        
|                                                                  |  |                              |        
|Net earnings (loss)                                               |  | $                            | 626,186
|Other comprehensive income:                                       |  |                              |        
|Net unrealized gain during the period related to cash flow hedges |  |                              | 31,000 
|                                                                  |  |                              |        
|Comprehensive income (loss):                                      |  | $                            | 657,186
|                                                                  |  |                              |        

h)     Operating Segments

FAS No. 131 Disclosures
about Segments of an Enterprise and Related Information 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 standard and has determined that currently it operates in one segment, as defined in this statement.

i)     Derivative Financial Instruments

The Company has
only limited involvement with derivative financial instruments.  The Company has one interest rate swap agreement to hedge against the potential impact on earnings from increases in market interest rates of a variable rate term loan. Under the
interest rate swap agreement, the Company receives or makes payments on a monthly basis, based on the differential between a specified interest rate and one month LIBOR.  A term loan of $8,280,203 is designated as a hedged item for interest
rate swaps at March 31, 2003.

This interest rate swap is accounted for as a cash flow hedge in accordance with FAS 133 and FAS 138 which were implemented as of the beginning of the 2001 fiscal
year.  As of the report date, all swaps met effectiveness tests, and as such no gains or losses were included in net income during the quarter related to hedge ineffectiveness and there was no income adjustment related to any portion

6



---

excluded from the assessment of hedge effectiveness.  A gain of $31,000 was included in other comprehensive income  for the three months ended March 31, 2003. 
A gain of $120,000 was included in other comprehensive income for the comparable period in 2002. The original term of the contract is ten years.

j)     Reclassifications

Certain reclassifications to the
2002 financial information have been made to conform to the 2003 presentation.

NOTE 2  New Accounting Standards:

In December 2002, the
Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 148 (FAS) No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. This Statement amends FAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends
the disclosures in both annual and interim financial statements regarding the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company continues to apply Accounting Principles
Board Opinion No. 25 for the method used to account for stock-based employee compensation arrangements, where applicable, but has adopted the disclosure requirements of SFAS 148 beginning with its first quarter ending March 31, 2003. The Company
estimated the fair value of options utilizing the Black-Scholes option pricing model.

The following table illustrates the effect on net earnings and earnings per common share as if the fair value
based method had been applied to all awards in each period.

|                                                                                                                                            |  | Three Months Ended March 31, |        
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                                                                                            |  |                              |        
|                                                                                                                                            |  | 2003                         |        
|                                                                                                                                            |  |                              |        
|Net earnings (loss), as reported                                                                                                            |  | $                            | 626,186
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                              | 260,234
|                                                                                                                                            |  |                              |        
|Pro forma net earnings (loss)                                                                                                               |  | $                            | 365,952
|                                                                                                                                            |  |                              |        
|Net earnings (loss) per common share:                                                                                                       |  |                              |        
|Basic  as reported                                                                                                                         |  | $                            | 0.09   
|                                                                                                                                            |  |                              |        
|Basic  pro forma                                                                                                                           |  | $                            | 0.05   
|                                                                                                                                            |  |                              |        
|Diluted  as reported                                                                                                                       |  | $                            | 0.09   
|                                                                                                                                            |  |                              |        
|Diluted  pro forma                                                                                                                         |  | $                            | 0.05   
|                                                                                                                                            |  |                              |        

On April 30, 2002, the FASB issued FAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections which updates, clarifies and simplifies existing accounting pronouncements. The rescission of FASB Statement No. 4 eliminates the requirement to report all gains and
losses resulting from the early extinguishments of debt as extraordinary items. Statement 145 is effective for all transactions occurring after May 15, 2002, with earlier application encouraged. The Company adopted this Statement to be effective
during the quarter ended March 31, 2003.  As a result, the Company has reclassified an extraordinary loss on early extinguishment of debt of  $292,000 to selling and administrative expenses and the related tax benefit of $105,000 to taxes
on income in the accompanying 2002 statement of earnings.

NOTE 3  Goodwill and Other Intangible Assets:

In June 2001, the FASB issued FAS
No. 141, Business Combinations, which eliminates the pooling method of accounting for all business combinations initiated after June 30, 2001 and addresses the initial recognition and measurement of goodwill and other intangible assets
acquired in a business combination. The Company has adopted this accounting standard.

Effective January 1, 2002, the Company adopted FAS No. 142, Goodwill and Other Intangible Assets,
which addresses the financial accounting and reporting standards for the acquisition of intangible assets outside of a business combination and for goodwill and other intangible assets subsequent to their acquisition. This accounting standard
requires that goodwill be separately disclosed from other intangible assets in the statement of financial position, and no longer be amortized but tested for impairment on a periodic basis.

In accordance with FAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, the Company has historically evaluated goodwill for impairment by comparing the entity
level balance of goodwill to projected

7



---

undiscounted cash flows, which did not result in an indicated impairment. FAS No. 142 requires that goodwill be tested for impairment at the reporting unit level upon adoption
and at least annually thereafter or more frequently, if indicators of impairment arise, utilizing a two-step methodology. The initial step requires the Company to determine the fair value of each reporting unit and compare it to the carrying value,
including goodwill, of such unit. The Company determined the fair value of each reporting unit by using a combination of present value and multiple of earnings valuation techniques and compared it to the reporting units carrying values. If the
fair value exceeds the carrying value, no impairment loss would be recognized. However, if the carrying value of the reporting unit exceeds its fair value, the goodwill of this unit may be impaired. The amount, if any, of the impairment would then
be measured in the second step. The Company completed the first step during the second quarter that indicated that goodwill recorded in the Empire and Sope Creek divisions was impaired as of January 1, 2002. Due to the potential impairment, the
Company then completed step two of the test to measure the amount of the impairment. Based on that analysis, a transitional impairment loss of $7,065,000 ($4,505,000 after tax), or $0.64 per diluted share after tax, was recognized as the cumulative
effect of a change in accounting principle.  In accordance with SFAS No. 142, this impairment loss was recorded retroactive to January 1, 2002.

NOTE 4 - Long-Term Debt:

|                                                                                                             |  | March 31, 2003 |           | December 31, 2002 |  
|------------------------------------------------------------------------------------------------------------ |  | -------------- | --------- | ----------------- | -
|                                                                                                             |  |                |           |                   |  
|Note payable to Wachovia, pursuant to revolving credit agreement, maturing March 26, 2004                    |  | $              |          |                   | $
|6.75% term loan payable to Wachovia, with monthly payments of principal and interest, maturing April 1, 2009 |  |                | 8,280,203 |                   |  
|                                                                                                             |  |                |           |                   |  
|                                                                                                             |  |                | 8,280,203 |                   |  
|Less payments due within one year included in current liabilities                                            |  |                | 1,122,999 |                   |  
|                                                                                                             |  |                |           |                   |  
|                                                                                                             |  | $              | 7,157,204 |                   | $
|                                                                                                             |  |                |           |                   |  

On March 26, 1999, the Company entered into a 3-year credit agreement with Wachovia Bank that
made available to the Company up to $15,000,000 on a revolving credit basis. Interest is payable at LIBOR plus 0.60% based upon the one-month LIBOR rate for U.S. dollar based borrowings (1.9% at March 31, 2003).  The Company pays an annual
commitment fee of 0.15% on the average unused portion of the commitment.  The available balance under the credit agreement is reduced by outstanding letters of credit. As of  March 31, 2003, approximately $1,167,000 was outstanding under
letters of credit.  On March 27, 2001, the Company entered into an agreement with Wachovia Bank to extend the maturity of the revolving credit agreement.  The revolving credit agreement matures on March 26, 2004.  At the option of the
Company, any outstanding balance on the agreement at that date will convert to a one-year term loan.  The remaining terms of the original revolving credit agreement remain unchanged. The Company also entered into a $12,000,000 10-year term loan
on March 26, 1999 with the same bank. The term loan is an amortizing loan, with monthly payments of principal and interest, maturing on April 1, 2009. The term loan carries a variable interest rate of LIBOR plus 0.80% based upon the one-month LIBOR
rate for U.S. dollar based borrowings. Concurrent with the execution of the term loan agreement, the Company entered into an interest rate swap with the bank under which the Company receives a variable rate of interest on a notional amount equal to
the outstanding balance of the term loan from the bank and the Company pays a fixed rate of 6.75% on a notional amount equal to the outstanding balance of the term loan to the bank.

The credit
agreement and the term loans with Wachovia contain restrictive provisions concerning debt to net worth ratios, other borrowings, capital expenditures, rental commitments, tangible net worth ($67,992,000 at March 31, 2003); working capital ratio
(2.5:1), fixed charges coverage ratio (2.5:1), stock repurchases and payment of dividends. At March 31, 2003, under the most restrictive terms of the debt agreements, retained earnings of approximately $11,942,000 were available for declaration of
dividends. The Company is in full compliance with all terms, conditions and covenants of the various credit agreements.

NOTE 5  Contingencies:

The Company is involved in various legal actions and claims arising from the normal course of business.  In the opinion of management, the ultimate outcome of these matters will not have a material impact on the
Companys results of operations, cash flows, or financial position.

8



---

INDEPENDENT ACCOUNTANTS REPORT

Board of Directors Superior Uniform Group, Inc. Seminole,
Florida

We have reviewed the accompanying condensed consolidated balance sheet of Superior Uniform Group, Inc. and subsidiary (the Company) as of March 31, 2003 and the related
condensed consolidated summaries of operations and cash flows for the three-month periods ended March 31, 2003 and 2002.  These financial statements are 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 in accordance with auditing standards generally accepted in the United States of
America, 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 such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Superior Uniform Group, Inc. as of December 31, 2002, 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 26, 2003, we expressed an unqualified opinion on those consolidated
financial statements.  In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2002 is fairly stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.

As discussed in Note 2 to the condensed consolidated financial statements, during the quarter ended March 31, 2003, the Company changed its method of
reporting on early extinguishment of debt to conform to Statement of Financial Accounting Standards No. 145.

|/s/ DELOITTE& TOUCHE LLP      | 
|----------------------------- | 
|                              | 
|Certified Public Accountants  | 
|                              | 
|Tampa, Florida April 24, 2003 | 

9



---

|ITEM 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Certain
matters discussed in this Form 10-Q are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can
generally be identified as such because the context of the statement will include words such as we believe, anticipate,expect or words of similar import. Similarly, statements that describe our future plans,
objectives, strategies or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include,
but are not limited, to 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; the availability of manufacturing materials, and other factors described in the Companys filings with the Securities and Exchange Commission. Shareholders, potential investors and other 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 forward-looking statements made herein are only made as of the date of
this Form 10-Q and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Critical Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements included in the Companys filing on Form 10-K for the year ended December 31, 2002. Our discussion and
analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of the
financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate the
estimates that we have made. These estimates are based upon our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Our actual results may differ from these estimates under different
assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition and Allowance for Doubtful Accounts

The Company recognizes revenue in the period in which the product is shipped. Judgments and estimates are used in
determining the collectability of accounts receivable. The Company analyzes specific accounts receivable and historical bad debt experience, customer credit worthiness, current economic trends and the age of outstanding balances when evaluating the
adequacy of the allowance for doubtful accounts. Management judgments and estimates are used in connection with establishing the allowance in any accounting period. Changes in estimates are reflected in the period they become known. If the financial
condition of the Companys customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Material differences may result in the amount and timing of bad debt expense
recognition for any given period if management makes different judgments or utilizes different estimates.

Inventories

Inventories are stated
at the lower of cost or market value. Judgments and estimates are used in determining the likelihood that new goods on hand can be sold to customers. Historical inventory usage and current revenue trends are considered in estimating both excess and
obsolete inventories. If actual product demand and market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Insurance

The Company self-insures for certain obligations related to health and workers compensation programs. The Company also purchases stop-loss insurance policies to protect it from catastrophic losses.
Judgments and estimates are used in determining the potential value associated with reported claims and for losses that have occurred, but have not been reported. The Companys estimates consider historical claim experience and other factors.
The Companys liabilities are based on estimates, and, while the Company believes that the accrual for loss is adequate, the ultimate liability may be in excess of or less than the amounts recorded. Changes in claim experience, the
Companys ability to settle claims or other estimates and judgments used by management could have a material impact on the amount and timing of expense for any period.

Results of
Operations

Net sales decreased from $33,648,226 for the three months ended March 31, 2002 to $30,954,947 for the three months ended March 31, 2003 as demand has remained sluggish in the
current economic environment.

Cost of goods sold, as a percentage of sales, approximated 64.7% and 65.7%, respectively, for the three months ended March 31, 2003 and 2002.  The reduction in
the current quarter is attributable to the increase in the amount of goods being sourced outside of the United States.

10



---

Selling and administrative expenses, as a percentage of sales, was approximately 31.7% for the first three months of 2003 as compared to 31.4% for the first three months of
2002.  The increase as a percentage of sales is primarily attributed to the reduction in sales volume that more than offset the reductions in selling and administrative expenses in the current quarter. Additionally, selling and administrative
expense in 2002 first quarter included approximately $360,000 relative to the Companys review of a potential acquisition that we are no longer pursuing and approximately $292,000 in costs associated with the prepayment of the Companys
borrowings with MassMutual.

Interest expense of $170,641 for the three-month period ended March 31, 2003 decreased 42.1% from $294,804 for the similar period ended March 31, 2002.  This
decrease is attributed to lower outstanding borrowings in the current period.

Earnings before cumulative effect of change in accounting principle increased 48.6% to $626,186 for the three months
ended March 31, 2003 as compared to earnings before cumulative effect of change in accounting principle of $421,491 for the same period ended March 31, 2002.

Accounts receivable and other current
assets decreased 5.7% from $23,683,541 on December 31, 2002 to $22,329,554  as of March 31, 2003 due primarily to the reduction in sales.

Inventories as of March 31, 2003 decreased  0.3%
to $42,518,137 from $42,655,934 on December 31, 2002.

Accounts payable decreased 19.2% from $5,191,993 on December 31, 2002 to $4,192,836 on March 31, 2003 due primarily to the timing of raw
material purchases within the two periods.

Liquidity and Capital Resources

Cash and cash equivalents increased by $908,627 from
$7,470,719 on December 31, 2002 to $8,379,346 as of March 31, 2003. Additionally, total borrowings under long-term debt agreements decreased by $268,945 from $8,549,148 on December 31, 2002 to $8,280,203 on March 31, 2003. The Company 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. At March 31, 2003, our principal sources of liquidity
consisted of cash and available borrowings under our revolving credit facility and term loan with Wachovia.

In the foreseeable future, the Company will continue its ongoing capital expenditure
program designed to maintain and improve its facilities.  The Company at all times evaluates its capital expenditure program in light of prevailing economic conditions.

Cash flows used in
financing activities totaled $1,233,991 for the three months ended March 31, 2003. During the three months ended March 31, 2003 and 2002, respectively, the Company paid cash dividends of $966,480 and $949,440.  During the three months ended
March 31, 2003, the Company reacquired and retired 35,000 shares of the Companys Common Stock for $365,750.  The Company did not reacquire any shares of its Common Stock in the prior year quarter. The Company anticipates that it will
continue to pay dividends and that it will reacquire and retire additional shares of its common stock in the future as financial conditions permit.

The Company believes that its cash flow from
operating activities together with other capital resources and funds from credit sources will be adequate to meet all of its funding requirements for the remainder of the year and for the foreseeable future.

|ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

The Company is exposed to market risk from
changes in interest rates, which may adversely affect its results of operations and financial condition.  The Company seeks to minimize the risks from these interest rates when considered appropriate, through the limited use of derivative
financial instruments.  The Companys policy is to not use financial instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments.  The Company has debt obligations with variable
interest rates tied to LIBOR which are described in Liquidity and Capital Resources as well as Note 1 of the Notes to Consolidated Financial Statements.  The Company estimates that a hypothetical increase in interest rates of 1%
would have resulted in no change in the Companys interest expense for the quarter ended March 31, 2003.

The Company has only limited involvement with derivative financial instruments. 
The Company has one interest rate swap agreement to hedge against the potential impact on earnings from increases in market interest rates of a variable rate term loan. Under the interest rate swap agreement, the Company receives or makes payments
on a monthly basis, based on the differential between a specified interest rate and one month LIBOR.  A term loan of $8,280,203 is designated as a hedged item for interest rate swaps at March 31, 2003. This interest rate swap is accounted for
as a cash flow hedge in accordance with FAS 133 and FAS 138 which were implemented as of the beginning of the 2001 fiscal year.  As of the report date, all swaps met effectiveness tests, and as such no gains or losses were included in net
income during the quarter related to hedge ineffectiveness and there was no income adjustment related to any portion

11



---

excluded from the assessment of hedge effectiveness.  A gain of $31,000 was included in other comprehensive income  for the three months ended March 31, 2003.  A
gain of $120,000 was included in other comprehensive income for the comparable period in 2002. The original term of the contract is ten years.

The Company is also exposed to changes in prevailing
market interest rates affecting the return on its investments but does not consider this interest rate market risk exposure to be material to its financial condition or results of operations.  The Company invests primarily in highly liquid debt
instruments with strong credit ratings and short-term (less than three months) maturities.

|ITEM 4. | Controls and Procedures
|------- | -----------------------

(a) Evaluation of Disclosure Controls and Procedures. The Chief Executive Officer, Gerald M. Benstock, and the Chief Financial
Officer, Andrew D. Demott, Jr., evaluated the effectiveness of Superiors disclosure controls and procedures as of a date within 90 days of the filing of this report (the Evaluation Date), and concluded that, as of the Evaluation
Date, Superiors disclosure controls and procedures were effective to ensure that information Superior is required to disclose in its filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the Commissions rules and forms, and to ensure that information required to be disclosed by Superior in the reports that it files under the Exchange Act is accumulated
and communicated to Superiors management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes to Internal Controls and Procedures for Financial Reporting.There were no significant changes to Superiors
internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date.

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
|        |                                                    
|        | None.                                              
|        |                                                    
|ITEM 5. | Other Information                                  
|        |                                                    
|        | Inapplicable.                                      
|        |                                                    
|ITEM 6. | Exhibits and Reports on Form 8-K                   
|        |                                                    
|        | a)                                                 
|        |                                                    
|        |                                                    
|        |                                                    
|        |                                                    
|        |                                                    
|        | b)                                                 
|        |                                                    
|        |                                                    

12



---

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:   May 13, 2003 | SUPERIOR UNIFORM GROUP, INC.
|-------------------- | ----------------------------
|                     |                             
|                     | By                          
|                     |                             
|                     |                             
|                     |                             
|                     |                             
|                     | By                          
|                     |                             
|                     |                             

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER REQUIRED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

|I, Gerald M. Benstock, certify that:                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                        
|1.        I have reviewed this quarterly report on
Form 10-Q of Superior Uniform Group, Inc.;                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                        
|2.        Based on my knowledge, this quarterly
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this quarterly report;
|                                                                                                                                                                                                                                                                                                                                        
|3.        Based on my knowledge, the financial
statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|                                                                                                                                                                                                                                                                                                                                        
|4.        The registrants other certifying
officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                     
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        
|5.        The registrants other certifying
officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):                                                                                
|                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                        

13



---

|                                                                                                                                                                                                                                                                                                                                                                                                    | b)          any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrants internal controls; and
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                   
|6.        The registrants other certifying
officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and material weaknesses.

|Dated:  May 13, 2003 | By | /s/ GERALDM. BENSTOCK                      |  | 
|-------------------- | -- | ------------------------------------------ |  | 
|                     |    |                                            |  | 
|                     |    | Gerald M. Benstock Chief Executive Officer |  | 

|I, Andrew D. Demott, Jr., certify that:                                                                                                                                                                                                                                                                                                                                                            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                   
|1.        I have reviewed this quarterly report on
Form 10-Q of Superior Uniform Group, Inc.;                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                   
|2.        Based on my knowledge, this quarterly
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this quarterly report;                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                   
|3.        Based on my knowledge, the financial
statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
quarterly report;                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                   
|4.        The registrants other certifying
officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|5.        The registrants other certifying
officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                   
|6.        The registrants other certifying
officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and material weaknesses.

|Dated:  May 13, 2003 | By | /s/ ANDREW D. DEMOTT, JR.                     |  | 
|-------------------- | -- | --------------------------------------------- |  | 
|                     |    |                                               |  | 
|                     |    | Andrew D. Demott, Jr. Chief Financial Officer |  | 

14