In a release issued under the same headline on Tuesday, November
16th by SPAR Group, Inc. (NASDAQ: SGRP), please note that in
the operating income table, the total change was incorrectly listed
as 99.9%, the proper value should be 19.9%. The corrected
release follows:
SPAR Group, Inc. (NASDAQ: SGRP), a leading
global provider of merchandising and marketing services, today
reported financial results for its third quarter
ended September 30, 2021.
“With another quarter of double-digit revenue
growth, we are building momentum. I am pleased with the progress we
are making and the response from our clients, some of the most
exciting companies in the world. Despite the continued labor market
pressures and slow pace of economic recovery in select
international markets, we are driving top and bottom line results,”
stated Mike Matacunas, President and Chief Executive Officer. “I
continue to be bullish on our future and appreciative of the work
and passion our people demonstrate every day that makes a
difference for our clients. We are uniquely positioned in the
market and the future is bright.”
Third Quarter Results
Consolidated net revenue was $67.4 million,
compared to $58.9 million in the prior year’s third quarter.
Domestic net revenue was $28.7 million, a 6.1% increase from the
prior year, while international net revenue increased by 21.7%.
Gross Profit was $12.6 million compared to $12.0
million during the third quarter a year ago. Gross margin decreased
to 18.7% versus 20.4% in the prior year’s quarter. The primary
factors driving the decrease in gross margin were related to
continued labor cost pressures globally.
Selling, General and Administrative expenses were
14.0% of revenue versus 13.8% during the prior year’s third
quarter.
Operating Income decreased 19.9% to $2.7 million
compared to $3.3 million in the prior year’s third quarter, and
operating margin was 4.0% compared to 5.7% in the prior year’s
third quarter.
Net Income attributable to SPAR Group increased by
3.1% to $1.2 million compared to the prior year’s third quarter.
Earnings per diluted share was $0.06, compared to $0.05 in the
prior year’s quarter.
Balance Sheet as of September 30,
2021
At September 30, 2021, cash and cash equivalents
totaled $15.3 million. Working capital was $25.4 million and
current ratio was 1.5 to 1. Total current assets and total assets
were $79.9 million and $97.7 million, respectively. Total
liabilities were $56.5 million and total equity was $41.2 million
at September 30, 2021.
Financial Results by Geography (in 000's,
except per share data)
|
Three Months
Ended September 30, |
% |
|
|
Nine Months Ended September 30, |
% |
|
Revenue: |
|
2021 |
|
|
2020 |
|
Change |
|
|
|
2021 |
|
|
2020 |
|
Change |
|
International |
$ |
38,727 |
|
$ |
31,824 |
|
21.7 |
% |
|
$ |
116,073 |
|
$ |
98,704 |
|
17.6 |
% |
Domestic |
|
28,696 |
|
|
27,041 |
|
6.1 |
% |
|
|
79,623 |
|
|
72,453 |
|
9.9 |
% |
Total |
$ |
67,423 |
|
$ |
58,865 |
|
14.5 |
% |
|
$ |
195,696 |
|
$ |
171,157 |
|
14.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
% |
|
|
Nine Months
Ended September 30, |
% |
|
Operating Income: |
|
2021 |
|
|
2020 |
|
Change |
|
|
|
2021 |
|
|
2020 |
|
Change |
|
International |
$ |
1,590 |
|
$ |
2,042 |
|
(22.1 |
%) |
|
$ |
5,106 |
|
$ |
4,859 |
|
5.1 |
% |
Domestic |
|
1,085 |
|
|
1,299 |
|
(16.5 |
%) |
|
|
2,176 |
|
|
1,924 |
|
13.1 |
% |
Total |
$ |
2,675 |
|
$ |
3,341 |
|
(19.9 |
%) |
|
$ |
7,282 |
|
$ |
6,783 |
|
7.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
Three Months
Ended September 30, |
|
|
|
Nine Months
Ended September 30, |
|
|
(loss): |
|
2021 |
|
|
2020 |
|
Change |
|
|
|
2021 |
|
|
2020 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
$ |
419 |
|
$ |
738 |
|
(43.2 |
%) |
|
$ |
1,304 |
|
$ |
1,365 |
|
(4.5 |
%) |
Domestic |
|
761 |
|
|
406 |
|
87.4 |
% |
|
|
1,307 |
|
|
(28 |
) |
4,767.9 |
% |
Total |
$ |
1,180 |
|
$ |
1,144 |
|
3.1 |
% |
|
$ |
2,611 |
|
$ |
1,337 |
|
95.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Basic and Diluted Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.06 |
|
$ |
0.05 |
|
|
|
|
$ |
0.12 |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About SPAR Group
SPAR Group is a global merchandising and marketing
services company, providing a broad range of services to retailers,
manufacturers and distributors around the world. With more than 50
years of experience, 25,000+ merchandising specialists around the
world, an average of 200,000+ store visits a week and long-term
relationships with some of the world’s leading manufacturers and
retail businesses.
For more information, please visit the SPAR
Group's website at http://www.sparinc.com.
Forward-Looking Statements
This Press Release contains, and the above
referenced recorded comments, will contain "forward-looking
statements" within the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, made by, or
respecting, SPAR Group, Inc. ("SGRP") and its
subsidiaries (together with SGRP, “SPAR”, "SPAR Group" or the
"Company"), filed in a Current Report on Form 10-Q by SGRP with
the Securities and Exchange Commission (the "SEC") on
November 15, 2021. There also are forward-looking statements
contained in SGRP's Annual Report on Form 10-K for its fiscal
year ended December 31, 2020, as filed with
the SEC on March 31, 2021, and SGRP's First
Amendment to Annual Report on Form 10-K/A for the year
ended December 31, 2020, as filed with
the SEC on April 29, 2021 (as so amended, the
"Annual Report"), in SGRP's amended definitive Proxy Statement
respecting its Annual Meeting of Stockholders held on August 12,
2021, which SGRP filed with the SEC on July 20, 2021 (the
"Proxy Statement"), and the SGRP's Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and other reports and statements
as and when filed with the SEC (including the Quarterly
Report, the Annual Report and the Proxy Statement, the Information
Statement, the Second Special Meeting Proxy/Information Statement,
each a "SEC Report"). "Forward-looking statements" are defined in
Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and other applicable
federal and state securities laws, rules and regulations, as
amended (together with the Securities Act and Exchange Act, the
"Securities Laws").
The forward-looking statements made by the Company
in this Press Release may include (without limitation) any
expectations, guidance or other information respecting the pursuit
or achievement of the Company's corporate strategic objectives,
building upon the Company's momentum and strong foundation,
leveraging compatible opportunities, growing the Company’s client
base, products and market position, and continuing to strengthen
the Company’s balance sheet, revenues and profitability. The
Company's forward-looking statements also include, in particular
and without limitation, those made in "Business", "Risk Factors",
"Legal Proceedings", and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Annual
Report. You can identify forward-looking statements in such
information by the Company's use of terms such as "may", "will",
"expect", "intend", "believe", "estimate", "anticipate",
"continue", "plan", "project" or similar words or variations or
negatives of those words.
You should carefully consider (and not place undue
reliance on) the Company's forward-looking statements, risk factors
and the other risks, cautions and information made, contained or
noted in or incorporated by reference into this Press Release, the
Annual Report, the Proxy Statement and the other applicable SEC
Reports that could cause the Company's actual performance or
condition (including its assets, business, clients, capital, cash
flow, credit, expenses, financial condition, income, liabilities,
liquidity, locations, marketing, operations, performance,
prospects, sales, strategies, taxation or other achievement,
results, risks, trends or condition) to differ materially from the
performance or condition planned, intended, anticipated, estimated
or otherwise expected by the Company (collectively, "expectations")
and described in the information in the Company's forward-looking
and other statements, whether express or implied. Although the
Company believes them to be reasonable, those expectations involve
known and unknown risks, uncertainties and other unpredictable
factors (many of which are beyond the Company's control) that could
cause those expectations to fail to occur or be realized or such
actual performance or condition to be materially and adversely
different from the Company's expectations. In addition, new risks
and uncertainties arise from time to time, and it is impossible for
the Company to predict these matters or how they may arise or
affect the Company. Accordingly, the Company cannot assure you that
its expectations will be achieved in whole or in part, that the
Company has identified all potential risks, or that the Company can
successfully avoid or mitigate such risks in whole or in part, any
of which could be significant and materially adverse to the Company
and the value of your investment in SGRP's Common Stock.
You should also carefully review the risk factors
described in the Annual Report (See Item 1A – Risk Factors) and any
other risks, cautions or information made, contained or noted in or
incorporated by reference into the Annual Report, the Proxy
Statement or other applicable SEC Report. All forward-looking and
other statements or information attributable to the Company or
persons acting on its behalf are expressly subject to and qualified
by all such risk factors and other risks, cautions and
information.
The Company does not intend or promise, and the
Company expressly disclaims any obligation, to publicly update or
revise any forward-looking statements, risk factors or other risks,
cautions or information (in whole or in part), whether as a result
of new information, risks or uncertainties, future events or
recognition or otherwise, except as and to the extent required by
applicable law.
Contact: Dave
Mossberg (817) 310-0051
SPAR Group, Inc. and
Subsidiaries Consolidated Statements of Income and
Comprehensive Income (loss) (In thousands, except share
and per share data) (Unaudited)
|
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues |
|
$ |
67,423 |
|
|
$ |
58,865 |
|
|
$ |
195,696 |
|
|
$ |
171,157 |
|
Cost of
revenues |
|
|
54,813 |
|
|
|
46,849 |
|
|
|
158,821 |
|
|
|
137,478 |
|
Gross
profit |
|
|
12,610 |
|
|
|
12,016 |
|
|
|
36,875 |
|
|
|
33,679 |
|
Selling,
general and administrative expense |
|
|
9,426 |
|
|
|
8,145 |
|
|
|
28,020 |
|
|
|
25,287 |
|
Depreciation
and amortization |
|
|
509 |
|
|
|
530 |
|
|
|
1,573 |
|
|
|
1,609 |
|
Operating
income |
|
|
2,675 |
|
|
|
3,341 |
|
|
|
7,282 |
|
|
|
6,783 |
|
Interest
expense |
|
|
124 |
|
|
|
169 |
|
|
|
402 |
|
|
|
482 |
|
Other
(income), net |
|
|
(137) |
|
|
|
(143 |
) |
|
|
(208) |
|
|
|
(201 |
) |
Income
before income tax expense |
|
|
2,688 |
|
|
|
3,315 |
|
|
|
7,088 |
|
|
|
6,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
|
549 |
|
|
|
870 |
|
|
|
2,036 |
|
|
|
1,830 |
|
Net
income |
|
|
2,139 |
|
|
|
2,445 |
|
|
|
5,052 |
|
|
|
4,672 |
|
Net (income)
attributable to non-controlling interest |
|
|
(959 |
) |
|
|
(1,301 |
) |
|
|
(2,441 |
) |
|
|
(3,335 |
) |
Net income
attributable to SPAR Group, Inc. |
|
$ |
1,180 |
|
|
$ |
1,144 |
|
|
$ |
2,611 |
|
|
$ |
1,337 |
|
Basic and
diluted income per common share: |
|
$ |
0.06 |
|
|
$ |
0.05 |
|
|
$ |
0.12 |
|
|
$ |
0.06 |
|
Weighted
average common shares – basic |
|
|
21,295 |
|
|
|
21,110 |
|
|
|
21,248 |
|
|
|
21,108 |
|
Weighted
average common shares – diluted |
|
|
21,589 |
|
|
|
21,147 |
|
|
|
21,592 |
|
|
|
21,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
2,139 |
|
|
$ |
2,445 |
|
|
$ |
5,052 |
|
|
$ |
4,672 |
|
Other
comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments |
|
$ |
(1,352 |
) |
|
|
71 |
|
|
|
(2,696 |
) |
|
|
(3,908 |
) |
Comprehensive income |
|
|
787 |
|
|
|
2,516 |
|
|
|
2,356 |
|
|
|
764 |
|
Comprehensive loss (income) attributable to non-controlling
interest |
|
|
(311) |
|
|
|
(1,326 |
) |
|
|
(423 |
) |
|
|
(871 |
) |
Comprehensive income (loss) attributable to SPAR Group, Inc. |
|
$ |
476 |
|
|
$ |
1,190 |
|
|
$ |
1,933 |
|
|
$ |
(107 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPAR Group, Inc. and
Subsidiaries Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|
September
30, |
|
|
December
31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(Unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,300 |
|
|
$ |
15,972 |
|
Accounts receivable, net |
|
|
59,234 |
|
|
|
46,914 |
|
Prepaid expenses and other current assets |
|
|
5,320 |
|
|
|
3,631 |
|
Total
current assets |
|
|
79,854 |
|
|
|
66,517 |
|
Property and
equipment, net |
|
|
3,043 |
|
|
|
2,795 |
|
Operating
lease right-of-use assets |
|
|
2,114 |
|
|
|
2,900 |
|
Goodwill |
|
|
4,168 |
|
|
|
3,760 |
|
Intangible
assets, net |
|
|
2,430 |
|
|
|
2,255 |
|
Deferred
income taxes |
|
|
4,162 |
|
|
|
4,201 |
|
Other
assets |
|
|
1,940 |
|
|
|
1,601 |
|
Total
assets |
|
$ |
97,711 |
|
|
$ |
84,029 |
|
Liabilities and equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
10,156 |
|
|
$ |
7,859 |
|
Accrued expenses and other current liabilities |
|
|
22,369 |
|
|
|
18,745 |
|
Due to affiliates |
|
|
3,716 |
|
|
|
3,775 |
|
Customer incentives and deposits |
|
|
3,306 |
|
|
|
1,799 |
|
Lines of credit and short-term loans |
|
|
13,828 |
|
|
|
9,329 |
|
Current portion of operating lease liabilities |
|
|
1,048 |
|
|
|
1,398 |
|
Total
current liabilities |
|
|
54,423 |
|
|
|
42,905 |
|
Operating
lease liabilities, less current portion |
|
|
1,066 |
|
|
|
1,502 |
|
Long-term
debt and other liabilities |
|
|
1,000 |
|
|
|
1,000 |
|
Total
liabilities |
|
|
56,489 |
|
|
|
45,407 |
|
Commitments
and contingencies – See Note 8 |
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
SPAR Group,
Inc. equity |
|
|
|
|
|
|
|
|
Preferred
stock, $.01 par value: Authorized and available shares– 2,445,598
Issued and outstanding shares – None – Balance at September 30,
2021 and December 31, 2020 |
|
|
- |
|
|
|
- |
|
Common
stock, $.01 par value: Authorized shares – 47,000,000 Issued shares
– 21,320,414 – Balance at September 30, 2021, and 21,122,312 –
December 31, 2020 |
|
|
213 |
|
|
|
211 |
|
Treasury
stock, at cost – 54,329 shares – Balance at September 30, 2021, and
1,697 shares – December 31, 2020 |
|
|
(104 |
) |
|
|
(2 |
) |
Additional
paid-in capital |
|
|
17,025 |
|
|
|
16,645 |
|
Accumulated
other comprehensive loss |
|
|
(4,591 |
) |
|
|
(3,913 |
) |
Retained
earnings |
|
|
11,829 |
|
|
|
9,218 |
|
Total SPAR
Group, Inc. equity |
|
|
24,372 |
|
|
|
22,159 |
|
Non-controlling interest |
|
|
16,850 |
|
|
|
16,463 |
|
Total
equity |
|
|
41,222 |
|
|
|
38,622 |
|
Total
liabilities and equity |
|
$ |
97,711 |
|
|
$ |
84,029 |
|
|
|
|
|
|
|
|
|
|
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