More than 12 million healthcare professionals in the U.S., and other Healthcare Apparel worn by caregivers and patients. We're one of the largest and oldest providers of Healthcare Apparel in the country. First, we have a synopsis of who wears medical apparel and how they get it. In the interest of time, I'm gonna skip over most of this, but encourage you to spend some time with this if you're unfamiliar with these markets. The first part of our offering is what is referred to as institutional apparel. This is what you would see as a patient when you're in a hospital or other acute settings: scrubs, lab coats, isolation gowns, pajamas, and patient gowns. These garments are laundered generally by the hospital's own laundry or more often by a third party, and that third party is our customer.
The larger component of Healthcare Apparel, though, is the consumer scrub business. The consumer base for this is made up of doctors, nurses, and other healthcare professionals who buy their scrubs through retailers or the many digital retailers, including us, and wear their scrubs home and launder their uniforms themselves. On the consumer portion of the business, we have two very strong brands: Wink, which is an internally developed brand that makes up the largest piece of our revenue. On top of that, we complement that brand with an exclusive license from Carhartt, which we all know is one of the world's most iconic apparel and accessory brands. On the institutional side of Healthcare Apparel, servicing healthcare laundries and distributors, we have one of the oldest and most well-known brands in the industry, Fashion Seal Healthcare.
Fashion Seal was founded over a hundred years ago by my great-grandmother, Rose, and was our first brand ever launched. All of our brands have a very solid reputation for quality, comfort, durability, easy care, and value within their respective markets. Let's look at some of the highlights as we share the high-level metrics of our Healthcare Apparel segment. Although we are one of the top five players in the industry, there's still a ton of market share out there for us to capture in this $4 billion marketplace. And in this segment, while we have a history of strong EBITDA margins, 2020 through 2022 were not as characteristic of those typical margins, with the huge run-up of demand during the early part of the pandemic and the inventory clearing process of write-downs that continued at the back end of that period.
One of the things to note, we now have all the channels of distribution covered. In Q2 of 2023, we launched. We completed a launch of our direct-to-consumer website. Up until last April, our healthcare offering was wholesale only, as we only sold through specialty stores, e-tailers, retailers, laundries, and distributors. But now, we've taken that one last step further to address consumers directly and digitally. You'll be hearing a lot more about that in years to come, as it is, definitely will become a more important part of our omnichannel strategy. And lastly, when you look at our impressive client list, you see that we have the privilege of serving a multitude of highly recognized companies. Our sales reach extends to some of the most prominent and influential healthcare organizations across various industries.
Serves really as a testament to the trust that these companies place in our abilities to deliver exceptional services and products that align with their standards of excellence. Let's jump to our second business segment, which is Branded Products. This segment is one that provides branded merchandise, also known as promotional products, and branded uniforms to some of the largest companies in the world. We build for our clients gifts that are used for employee and customer incentive programs, uniform programs, conference giveaways, gifts with purchase, branded retail revenue-producing merchandise, and pretty much any item in the world that you can think of with a logo on it. That's what we do. Don't think of us as a stress ball company.
Our goal in this segment is actually to help our companies solve true business problems, like improving employee retention, or building deep brand loyalty, or developing a buzz around a product or a service launched. We're incentivizing customers to increase their basket size, and we do this by making beautiful products that people actually wanna keep, and by developing branded retail products that customers will actually pay for, and branded uniforms that employees are actually excited to wear. So what types of products do we make? I think it's best if I gave you an example. We make the uniforms for Taco Bell, but in addition to that, we built out and merchandised the entire online Taco Bell Taco Shop, in which we sell millions of dollars of really fun, iconic items, like the Taco Bell onesie or the Taco Bell Beach Cruiser.
For Dunkin', we design and source a number of retail items, like drinkware, that are sold in their actual stores. For Tesla, we produce their employee uniforms and a ton of really fun items that they use as employee gifts and customer gifts. For large retailers like Walmart, Target, and CVS, we make the uniforms for their employees that they wear each and every day. For gig economy customers, we make the new driver kits for Instacart, DoorDash, and Grubhub. For large tech companies like Microsoft and Amazon, we do $ millions of employee incentive giveaways to help them with their employee retention strategies. So those are just a few of examples to help you get an understanding of how we are really different.
Let's look a little bit into the numbers behind our industry, and most people are surprised to hear that the Branded Products industry sits at around $26 billion. Here's some interesting facts. Our industry has 25,000+ competitors, small and large. It's highly fragmented. We have climbed from obscurity just eight years ago to now being the 8th largest provider. So similar to healthcare, we're a top 10 player in the industry but have so much upside potential in terms of market share to grab. We have demonstrated over the last five years, really strong growth. We have a solid five-year revenue CAGR, and we have a strong EBITDA margin that continues to improve as we move closer to our goal of double-digit EBITDA. Let's touch on our customer list.
As previously mentioned, our company proudly collaborates with some of the largest and most renowned brands across the globe. It's like a walk down Main Street. Look left or right, you'll see all of these our customers. Our ability to penetrate and thrive in such diverse industries showcases that we have an adaptability and expertise in which no sector goes untouched. We have fostered long-standing relationships for decades with many of these brands. It clearly signifies, again, that we consistently deliver exceptional results, ensuring that our customers have true enduring trust in us, and by consistently providing true value by exceeding their expectations. Next up, Mike's gonna take us through our final segment, the Contact Center segment. So I'll let you take it away, Mike.
Thank you, Michael. Contact centers is our third business, which we operate as The Office Gurus. The Office Gurus is a nearshore Contact Center supporting both inbound and outbound call services on behalf of a number of different brands across a variety of businesses. As you can see here, there are a number of compelling reasons companies choose to outsource Contact Center operations. Many years ago, we faced the challenge of finding sufficient back office resources at a reasonable cost in the U.S. in order to support the growth of our business. So we expanded our production office in El Salvador and began to build a nearshore capability to not only meet our internal needs, but also address a growing need for U.S. companies to expand various call center activities.
Outsourcing Contact Center operations enables companies to more quickly scale and gain cost leverage, both in terms of labor and technology. Additionally, customer support is not always a core competency of businesses, and outsource providers can deliver dependable, consistent customer experiences in multiple languages. There are a number of factors that make The Office Gurus the preferred provider. Customers choose The Office Gurus because our clients prefer a nearshore capability that is more culturally aligned with reliable English fluency. By focusing on the small to medium-sized opportunities, we provide our clients with a high-touch service as compared to larger engagements with thousands of agents, largely focused on transactional services. Lastly, we bring consistent processes and leverage analytics and technology, which are all focused on improving customers' experience for our clients.
The Office Gurus operates 10 offices across five nearshore countries, primarily in El Salvador and Belize, followed by Jamaica, the Dominican Republic, and the state of Florida. Our footprint provides various access to various pools of talent to continue to support growth as well as risk mitigation. This is an industry in which quality customer service is of utmost importance, and as you can see on this slide, we've been recognized as a leading provider within the business process industry. Clearly, the current inflationary environment, combined with the overall proliferation of remote work environments, has accelerated many companies' outsource plans, as they have realized that remote workforces are the future, particularly in lower-cost nearshore locations rather than the U.S. A little bit more detail into the cost, into the Contact Centers. We are a leading provider to an underserved market, represented by small and medium-sized businesses.
In fact, we get a lot of our business from customers who are outsourcing for the very first time. Our growth is fueled both by new customers and seat expansion with existing customers. Like our other business segments, this is another large and growing market, which exceeds $100 billion in the U.S. alone. Our market share of the overall market is minimal, because again, we're primarily focused on onboarding clients that are smaller, that often have quickly growing needs. This is our fastest growing business, with a five-year sales CAGR of 26% through 2023, and a very attractive EBITDA margin of 13.6% in 2023, with a customer retention rate of almost 100%.
As you can see on our slide here, our Contact Centers business services a number of brands, ranging from established, well-known brands to up-and-coming businesses. And again, our niche is the small to medium-sized opportunities that could range from as few as 10 seats to over 200 seats. For that reason, our service focuses on higher quality conversational service versus the large transactional-based services. Now, switching to a few financial highlights. As you can see, over the last 10 years, SGC has grown significantly at an annualized growth rate of 14%. Total SGC revenues in 2023 were $543 million, about 3.5x our revenue as compared to 2013.
We expect revenues to continue to grow in 2024 to approximately $567 million, the midpoint of our sales guidance range. SGC revenue has been driven by all three of our business segments. Again, both a combination of organic growth as well as strategic acquisitions in both our Branded Products and Healthcare Apparel segments. Now, quickly turning to our leverage position. As you can see, our leverage position has varied over time, due in part to the timing of investments. Our current leverage position was elevated in late 2022, really driven by investments in working capital and acquisitions at the time. During 2023, we made significant progress toward driving positive free cash flow and reducing both our working capital and our debt.
As a result, our net leverage ratio decreased by more than 50% since 2022, to approximately 1.6x trailing 12-month covenant EBITDA, which is better than our goal of 2x-2.5x EBITDA. Moving to our capital allocation strategy, our priorities are really threefold. One, we recognize the importance of our dividend as a return to our shareholders, and for that reason, we have paid a consistent dividend since 1977. Second, we'll continue to make the necessary capital investments in our business to support growth. Typically, our capital investments range in 1%-1.5% of revenues each year. And lastly, we will consider strategic acquisitions that are highly accretive and complementary to our existing businesses.
Lastly, turning to corporate social responsibility, you can find our latest corporate social responsibility report on our website. Doing the right thing has always been at the core of who we are, and we will continue to support our employees and communities in which we live and work. That concludes our presentation. Again, we appreciate your interest in Superior Group of Companies, and now I'll turn it back over to Jim for any questions. Jim?
Great. Thanks, Mike. So, you know, if we look back at the March quarter, you know, it was really a pretty spectacular quarter for all three businesses. Can you talk about what factors fueled that growth and, you know, what you think the outlook is for the rest of the year?
Sure, Jim, I'd be happy to take that. So I'll step briefly through each segment. In Branded Products, we began to see the trend of improved orders beginning in the Q3 of 2023, as the economic environment began to improve. So in the Q1, again, we saw sales improvement there, really driven by new programs and new business, where we really focus on adding sales reps as well as RFPs to drive new business. And we began to see, you know, continued improvement in that trend, you know, particularly in an increase in orders across our customers. Our guidance for the Branded Products is we expect the business to grow in about the low single-digit range for the year. Next, Healthcare Apparel.
Really, we're seeing the benefit of inventories in Healthcare beginning to rightsize, you know, certainly for our business, but also in the market, which is creating an improved demand environment as compared to what we were seeing in late 2022 and early 2023. And secondly, for our business specifically, we've really made a focus in expanding our digital presence. And that was really, number one, adding what I would call some digital capabilities, both with talent as well as technical capabilities, to really improve our wholesale digital business offering, which we had had historically through businesses like Amazon and Walmart.com, but also through the launch of our direct-to-consumer website, which didn't start until the Q2 of last year.
So the Q1 this year was certainly growth as we were lapping just the launch of that in the Q2 of last year. And so for Healthcare Apparel, in terms of the full year, our guidance is a mid-single-digit increase. And then lastly, our Contact Center segment. The growth really there is just our ability to continue to onboard new customers. You know, as we've said before, there's a lot of organic growth opportunity in that business, where we really feel like we're serving, again, that underserved market of small to medium-sized companies. And so as we continue to onboard new customers, we, you know, we'll continue to drive improved sales and profits.
For that reason, our guidance for Contact Centers, sales guidance is that we'll grow sales in the high single-digit to low-teen for 2024.
Right. And can you talk about the hiring environment right now and, and, specifically the environment outside the U.S. where you operate?
Yes. Yeah, there has been a huge demand for nearshore call centers, particularly over the last two years, which has created more demand than usual in each of the countries where we operate. Unemployment is still high in those countries, though, and the reputation that we've gained in each of the countries that we operate on has been stellar, which makes us really a preferable choice for employees. I would say that we have competition in hiring people because we have a waiting list of people often who are working for them that wanna come work for us, but it has put a little pressure on prices, which we've addressed with price increases to our customers. And also right-sizing the organization as we've kind of grown into our new size.
We've done something that we had not done before. We actually opened up some satellite offices as a result of COVID. We, you know, we're operating in a remote environment, even offshore. And we learned that we could hire people outside the cities that we were in, that there were many people in those cities, outside of the large cities, that were looking for work, that had the English language skills that we needed.
The next natural step to that was we were servicing so many people in some of those communities, that we opened up smaller training centers in those remote locations, where we could swap out people's computers if they were having an issue, where we could do retraining if we needed to, where we could bring those people in for customer visits. So we, we've got the best of all worlds. At this point, we're not having to spend really any money on infrastructure in our call center business, and we can go wherever we want to go within the countries where we already operate.
All right, and, and how about for our Branded Products? Have you been able to add to the sales team for that?
You know, that has had its challenges. You know, it's, we're kind of in a, as we all know, a challenging macro environment. While salespeople would love to come work for us when all the stars are aligned, I think they're feeling right now that, you know, they don't want to take a risk with their book of business in moving it, for the most part. I mean, we're finding salespeople. I'd love to be finding them at a greater clip. Anybody who knows of any out there, send them our way. But, you know, they are very protective of their pieces of business, wherever they may be, even if they're unhappy.
And, b ut, you know, making the move is a question of us getting in front of them and convincing them that we have a better mousetrap. When we do get in front of them, when we do have that opportunity, generally it takes a little bit of time, but we do get them to move over. And so it's. I wish it was as easy as just posting an ad and them all coming over to us. We have proven time and time again that a salesperson working for us can grow their business dramatically more than they can working for their current employer.
All right, and, can you talk about the acquisition pipeline? It's been, I guess, almost two years now since you've done a deal. Is-[crosstalk]
Yeah.
I wouldn't call it a pipe. Two years ago, I would've called it a pipeline. Now, now I'd call it a little pipe.
Okay.
You know, we're not, w e really wanted to focus when we were, you know, went through a little bit of a cash crunch a year and a half ago. Debt leverage ratios were not favorable, and we decided to really concentrate on that. So we put acquisitions on the back burner. Right now we're laser-focused on organic growth. We wanna see our leaders of our business create as much organic opportunity as they possibly can. We still continue to look at acquisitions, but they're gonna have to be really right for us to do an acquisition, I would say over the next six months. Beyond that, our leverage ratios are certainly in order that we have the opportunity to do them. It's just a question of doing it at the right time, where our leaders are not distracted in their pursuit of organic growth.
All right, and switching to Healthcare Apparel, you know, you spent. You did a lot of work last year to reduce the older excess inventory. So, you know, now that that's complete, you know, what are the plans now for new products in that line?
We have rolled out new products already. In this season, which I guess we're in, we rolled out Summer 2024 with a lot of new products, with a great acceptance. I encourage everybody to go out to winkscrubs.com. You'll see some of our new products there. We feel like we are addressing, you know, what the market wants and needs. We've done a lot of focus groups. We've figured out where some of the gaps are from a product standpoint amongst us and all of our competitors, and we feel like we have filled those gaps. We've got a brilliant group of people working on this, and we'll continue to roll out new products all year long now.
Right. And then, with regard to the Contact Centers business, you know, how are you doing recruiting new customers for that business?
The pipeline's good. That's a pipeline, not a pipe. That's a good pipeline of solid opportunities. We're closing a fair amount of business, and we're very, very happy that we're on target to move forward, as we've indicated, to the marketplace where we wanna be.
You know, AI has been a big topic for a lot of names that I, that, the firm covers, a couple that I cover. You know, how does AI impact your Contact Centers business? Is it, is it a risk or is it more of an opportunity?
You know, it's. We're a very high-touch business. Our customers generally are smaller and want us to be much more conversational with their customers. We're doing some upselling as well in a lot of our clients, or we're doing some analytics as well as to whether this is a student we want for a university, or what program they might go to, or this is a client we may want for a law firm, to handle their case. So it's really a lot more intuitive work that we feel AI is prepared to handle. We are using AI with a lot of our clients, just to create some operational efficiency, which does in effect reduce agent count, or billable agent count to a certain extent.
But, the benefits are that we've created, you know, much more loyalty with our customer, and in this, in the process, are trying to get more share of their wallet, which oftentimes is split between us and a number of call centers. In addition to that, we're using AI on the back end, you know, on the non-billable employees that we have on the, you know, who, you know, our customer never sees, but do a lot of work in the background, but we're not able to bill to them. They're not necessarily on the phone with a customer. And, we've managed to reduce headcount substantially by employing some AI technology, and to get us some better results from a business intelligence standpoint.
All right, if we look at 2023, you know, the growth in the back end of the year was significantly better than or the revenue in the back half was better than in the front half because of some of the inventory issues and whatnot. You know, how do you see that shaping up for 2024? Do you think this will be a more even, you know, even year on a quarter-to-quarter basis?
Yeah, John, I would say describe it as more balanced than last year. You know, last year, as you highlighted, we really had a significant portion of our volume and earnings in the third and Q4. A lot of that driven by the fact that our Branded Products segment in Q1, Q2 last year was hit pretty hard just from some of the economic, macroeconomic pullback, which then rebounded. So I'd say this year will be more balanced. I wouldn't say equal or even. I would say, you know, more balanced than than it was last year. A little bit more consistent with historical trends that we've seen, where there's been more of a waiting on third and Q4s historically, but again, not to the extent that it was in 2023.
All right, and you know, assuming that you don't do an acquisition, you talked a little bit about priorities for free cash. Could you see the dividend actually increasing in 2024?
I'll answer that. Likely not.
Okay. All right. So you think the priority will be paying down debt, if assuming that no, no deals are done?
Paying down debt, opening ourselves up to more opportunities from an acquisition standpoint, and reviewing our needs from a CapEx standpoint, yes.
You're investing in infrastructure.
Yeah.[crosstalk]
Yeah.
Jim, it's worth noting, you know, for the group, that obviously last year we pulled back on CapEx, given our focus on cash generation and bringing debt levels down. So we were kind of spent below the norm last year. So we'll spend a little bit, y ou know, we'll spend more this year, just to make up for some things that were deferred. And so that will obviously, you know, be another use of cash.
Got it. Okay. All right, good. All right, well, we are out of time, but thank you both for presenting today. Thank you for taking the meetings, and we hope to hear from you soon.
Thank you.[crosstalk]
All right. Thanks, Jim.
Yeah. Bye-bye.