SPAR Group, Inc. (NASDAQ: SGRP) (“SPAR”, “SPAR
Group” or the “Company”), a leading global provider of
merchandising, marketing, and distribution services today reported
financial and operating results for the first quarter ended March
31, 2023.
Mike Matacunas, the Company’s President
and Chief Executive Officer, commented, “We are very
pleased with first quarter results, reporting strong growth in
revenues, gross margin and net earnings, as well as Adjusted
EBITDA. Momentum continued from 2022 into first quarter, and we
expanded our merchandising, remodeling, and distribution services
across the platform and especially in the U.S., resulting in
revenue expansion.
“The company continues to explore strategic
alternatives for SPAR with the goal of maximizing shareholder
value. We continue to build a strong balance sheet, expand
revenues, improve gross margins, diversify services, and grow
long-term relationships with blue chip consumer goods and retail
companies. We have nothing to report publicly today regarding the
review of strategic alternatives; however, we are committed to
growing the business, serving our clients and supporting our
employees and joint venture partners,” concluded
Matacunas.
First Quarter 2023 Financial
Results
Net revenues were $64.4 million, comprised of
$48.6 million from Americas (75.5%) and $9.7 million from EMEA
(15.1%), and $6.1 million from APAC (9.4%). Total net revenue
increased by 9.1%, up 12.4% on a constant currency basis, and
Americas revenues increased over the prior year by 13.0%, EMEA
increased by 5.5%, and APAC decreased by 10.5% from the prior year
quarter.
Gross profit was $14.1 million, or 22.0% of
revenues, compared to $11.8 million, or 20.1% of revenues, in the
prior year quarter. This 190-basis point improvement in gross
profit margins was due to a number of planned initiatives, which
included improved contract terms and pricing, system enhancements
and other cost containments.
Selling, general and administrative (SG&A)
expenses were $10.5 million, or 16.2% of revenues (15.7% of
revenues excluding non-recurring costs associated with reviewing
strategic alternatives), compared to $9.3 million, or 15.7% of
revenues, in the prior year quarter. Non-recurring costs associated
with reviewing strategic alternatives were $317 thousand during the
first quarter.
Operating income was $3.2 million, up 52%,
versus operating income of $2.1 million from the prior year
quarter.
Net income attributable to SPAR Group, Inc. was
$866 thousand, or $0.04 per share, compared to net income
attributable to SPAR Group Inc. of $674 thousand, or $0.03 per
share, in the year-ago quarter. Adjusted net income attributable to
SPAR Group, Inc. (1) in the quarter was $1.3 million, or $0.06 per
share, compared to $502 thousand, or $0.02 per share, in the
year-ago quarter.
Consolidated Adjusted EBITDA (1) in the 2023
quarter was $4.2 million, compared to Adjusted EBITDA of $2.4
million in the prior year. Adjusted EBITDA attributable to SPAR
Group, Inc. (1) in the 2023 quarter was $2.9 million, compared to
Adjusted EBITDA of $1.5 million in the prior year.
(1) Adjusted Net income
attributable to SPAR Group, Inc. and Adjusted Diluted earnings per
share attributable to SPAR Group, Inc., and Adjusted EBITDA are
non-GAAP financial measures as defined and reconciled below.
Financial Position as of March 31,
2023
The Company’s total worldwide liquidity at the
end of the first quarter was $15.9 million, with $11.3 million in
cash, cash equivalents and restricted cash and $4.6 million of
unused availability as of March 31, 2023. For the three months
ended March 31, 2023, net cash provided by operating activities was
$2.9 million and was primarily due strong operating results and
working capital changes. The Company ended the quarter with
positive net working capital of $28.1 million at March 31,
2023.
About SPAR Group, Inc.
SPAR Group is a leading 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, we provide specialized
capabilities across more than nine countries. Our unique
combination of scale, merchandising and marketing expertise,
combined with our unwavering commitment to excellence, separate us
from the competition. For more information, please visit the SPAR
Group’s website at http://www.sparinc.com.
Cautionary Note Regarding
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 expected to be filed on or about May 15, 2023. There also
are forward-looking statements contained in SGRP’s Annual Report on
Form 10-K for its fiscal year ended December 31, 2022, as
filed with the SEC on April 17, 2023, and SGRP’s
First Amendment to Annual Report on Form 10-K/A for the year
ended December 31, 2022, as filed with
the SEC on May 1, 2023 (as so amended, the
“Annual Report”), , 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. 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
expressed 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.
Investor Relations
Contact:Three Part Advisors, LLCSandy Martin / Phillip
KupperTel: 214-616-2207 or 817-778-8339
- Financial Statements Follow –
SPAR Group, Inc. and Subsidiaries |
Condensed Consolidated Statements of
Operations |
(unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
64,380 |
|
|
|
$ |
58,994 |
|
|
Related party - cost of revenues |
|
|
1,497 |
|
|
|
|
2,145 |
|
|
Cost of revenues |
|
|
48,745 |
|
|
|
|
45,018 |
|
|
Gross profit |
|
|
14,138 |
|
|
|
|
11,831 |
|
|
Selling, general and administrative expense |
|
|
10,456 |
|
|
|
|
9,254 |
|
|
Depreciation and amortization |
|
|
532 |
|
|
|
|
510 |
|
|
Operating income |
|
|
3,150 |
|
|
|
|
2,067 |
|
|
Interest expense, net |
|
|
390 |
|
|
|
|
149 |
|
|
Other income, net |
|
|
(58 |
) |
|
|
|
(87 |
) |
|
Income before income tax expense |
|
|
2,818 |
|
|
|
|
2,005 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
1,041 |
|
|
|
|
551 |
|
|
Net income |
|
|
1,777 |
|
|
|
|
1,454 |
|
|
Net income attributable to non-controlling interest |
|
|
(911 |
) |
|
|
|
(780 |
) |
|
Net income attributable to SPAR Group, Inc. |
|
$ |
866 |
|
|
|
$ |
674 |
|
|
Basic and diluted income per common share: |
|
$ |
0.04 |
|
|
|
$ |
0.03 |
|
|
Weighted-average common shares outstanding– basic |
|
|
23,114 |
|
|
|
|
21,583 |
|
|
Weighted-average common shares outstanding – diluted |
|
|
23,279 |
|
|
|
|
21,729 |
|
|
|
|
|
|
|
|
|
|
|
SPAR Group, Inc. and Subsidiaries |
Condensed Consolidated Balance Sheets |
(unaudited) |
(In thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,253 |
|
|
|
$ |
9,345 |
|
Accounts receivable, net |
|
|
63,645 |
|
|
|
|
63,714 |
|
Prepaid expenses and other current assets |
|
|
6,821 |
|
|
|
|
7,861 |
|
Total current assets |
|
|
81,719 |
|
|
|
|
80,920 |
|
Property and equipment, net |
|
|
3,201 |
|
|
|
|
3,261 |
|
Operating lease right-of-use assets |
|
|
1,140 |
|
|
|
|
969 |
|
Goodwill |
|
|
1,711 |
|
|
|
|
1,708 |
|
Intangible assets, net |
|
|
1,730 |
|
|
|
|
2,040 |
|
Deferred income taxes, net |
|
|
4,027 |
|
|
|
|
3,766 |
|
Other assets |
|
|
1,816 |
|
|
|
|
1,934 |
|
Total assets |
|
$ |
95,344 |
|
|
|
$ |
94,598 |
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
10,493 |
|
|
|
$ |
10,588 |
|
Accrued expenses and other current liabilities |
|
|
19,026 |
|
|
|
|
20,261 |
|
Due to affiliates |
|
|
2,855 |
|
|
|
|
2,964 |
|
Customer incentives and deposits |
|
|
2,182 |
|
|
|
|
2,399 |
|
Lines of credit and short-term loans |
|
|
18,585 |
|
|
|
|
17,980 |
|
Current portion of operating lease liabilities |
|
|
457 |
|
|
|
|
363 |
|
Total current liabilities |
|
|
53,598 |
|
|
|
|
54,555 |
|
Operating lease liabilities, net of current portion |
|
|
683 |
|
|
|
|
606 |
|
Long-term debt and other liabilities |
|
|
1,204 |
|
|
|
|
1,376 |
|
Total liabilities |
|
|
55,485 |
|
|
|
|
56,537 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
Series A convertible preferred stock, $0.01 par value per share:
2,445,598 shares authorized as of March 31, 2023 and December 31,
2022; no shares issued as of March 31, 2023 and December 31, 2022;
no shares outstanding as of March 31, 2023 and December 31,
2022 |
|
|
- |
|
|
|
|
- |
|
Series B convertible preferred stock, $0.01 par value per share:
2,000,000 shares authorized as of March 31, 2023 and December 31,
2022; 2,000,000 shares issued as of March 31, 2023 and December 31,
2022; 650,000 shares and 854,753 shares outstanding as of March 31,
2023 and December 31, 2022, respectively |
|
|
7 |
|
|
|
|
9 |
|
Common stock, $0.01 par value per share: 47,000,000 shares
authorized as of March 31, 2023 and December 31, 2022; 23,473,611
and 23,059,138 shares issued as of March 31, 2023 and December 31,
2022, respectively; 23,268,126 shares and 22,853,653 shares
outstanding as of March 31, 2023 and December 31, 2022,
respectively |
|
|
233 |
|
|
|
|
229 |
|
Treasury stock, at cost, 205,485 shares and 205,485 shares as of
March 31, 2023 and December 31, 2022, respectively |
|
|
(285 |
) |
|
|
|
(285 |
) |
Additional paid-in capital |
|
|
20,884 |
|
|
|
|
20,708 |
|
Accumulated other comprehensive loss |
|
|
(4,856 |
) |
|
|
|
(4,941 |
) |
Retained earnings |
|
|
7,573 |
|
|
|
|
6,707 |
|
Total stockholders' equity attributable to SPAR Group, Inc. |
|
|
23,556 |
|
|
|
|
22,427 |
|
Non-controlling interest |
|
|
16,303 |
|
|
|
|
15,634 |
|
Total stockholders’ equity |
|
|
39,859 |
|
|
|
|
38,061 |
|
Total liabilities and stockholders’ equity |
|
$ |
95,344 |
|
|
|
$ |
94,598 |
|
|
|
|
|
|
|
|
|
SPAR Group, Inc. and Subsidiaries |
|
Condensed Consolidated Statements of Cash
Flows |
|
(unaudited) |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
2022 |
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,777 |
|
|
|
$ |
1,454 |
|
|
Adjustments to reconcile net income to net cash provided by (used
in) provided by operating activities |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
532 |
|
|
|
|
510 |
|
|
Amortization of operating lease right-of-use assets |
|
|
133 |
|
|
|
|
241 |
|
|
Bad debt expense, net of recoveries |
|
|
(35 |
) |
|
|
|
34 |
|
|
Deferred income tax (benefit) |
|
|
(129 |
) |
|
|
|
- |
|
|
Share-based compensation expense |
|
|
173 |
|
|
|
|
150 |
|
|
Majority stockholders change in control agreement |
|
|
- |
|
|
|
|
(420 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
607 |
|
|
|
|
(5,780 |
) |
|
Prepaid expenses and other current assets |
|
|
1,301 |
|
|
|
|
(1,716 |
) |
|
Accounts payable |
|
|
(325 |
) |
|
|
|
(145 |
) |
|
Operating lease liabilities |
|
|
(133 |
) |
|
|
|
(242 |
) |
|
Accrued expenses, other current liabilities, due to affiliates and
customer incentives and deposits |
|
|
(965 |
) |
|
|
|
2,916 |
|
|
Net cash provided by (used in) operating activities |
|
|
2,936 |
|
|
|
|
(2,998 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(343 |
) |
|
|
|
(478 |
) |
|
Net cash used in investing activities |
|
|
(343 |
) |
|
|
|
(478 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Borrowings under line of credit |
|
|
26,659 |
|
|
|
|
19,271 |
|
|
Repayments under line of credit |
|
|
(26,577 |
) |
|
|
|
(14,446 |
) |
|
Proceeds from term debt |
|
|
445 |
|
|
|
|
- |
|
|
Payments on term debt |
|
|
(124 |
) |
|
|
|
- |
|
|
Payments on capital lease obligations |
|
|
(5 |
) |
|
|
|
- |
|
|
Payments of notes to seller |
|
|
(722 |
) |
|
|
|
- |
|
|
Dividend on noncontrolling interest |
|
|
(304 |
) |
|
|
|
- |
|
|
Net cash provided by (used in) financing activities |
|
|
(628 |
) |
|
|
|
4,825 |
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash |
|
|
(57 |
) |
|
|
|
13,473 |
|
|
Net change in cash, cash equivalents and restricted cash |
|
|
1,908 |
|
|
|
|
14,061 |
|
|
Cash, cash equivalents at beginning of period |
|
|
9,345 |
|
|
|
|
- |
|
|
Cash, cash equivalents at end of period |
|
$ |
11,253 |
|
|
|
$ |
14,061 |
|
|
|
|
|
|
|
|
|
|
|
SPAR Group, Inc. and Subsidiaries |
Segment Information |
(unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net Revenues: |
|
|
|
|
|
|
|
|
Americas |
|
$ |
48,578 |
|
|
|
$ |
42,978 |
|
|
APAC |
|
|
6,100 |
|
|
|
|
6,818 |
|
|
EMEA |
|
|
9,702 |
|
|
|
|
9,198 |
|
|
Total net revenues |
|
$ |
64,380 |
|
|
|
$ |
58,994 |
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
Americas |
|
$ |
2,521 |
|
|
|
$ |
1,780 |
|
|
APAC |
|
|
(192 |
) |
|
|
|
(441 |
) |
|
EMEA |
|
|
821 |
|
|
|
|
728 |
|
|
Total operating income |
|
$ |
3,150 |
|
|
|
$ |
2,067 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial
Measures
Adjusted net income attributable to SPAR Group
and related per share amounts represents net income attributable to
SPAR Group adjusted for the removal of a one-time positive
adjustment. Adjusted EBITDA represents net income before, as
applicable from time to time, (i) interest expense, net, (ii)
provision (benefit) for income taxes, (iii) depreciation and
amortization of long-lived assets, (iv) share based compensation
expense, (v) review of strategic alternatives, (vi) nonrecurring
legal settlement costs and associated legal expenses unrelated to
the Company's core operations. These metrics are supplemental
measures of our operating performance that are neither required by,
nor presented in accordance with, GAAP. These measures have
limitations as analytical tools and should not be considered in
isolation or as an alternative to performance measure derived in
accordance with GAAP as an indicator of our operating performance.
We present Adjusted net income attributable to SPAR Group and per
share amounts, and Adjusted EBITDA because management uses these
measures as key performance indicators, and we believe that
securities analysts, investors and others use these measures to
evaluate companies in our industry. Our calculation of these
measures may not be comparable to similarly named measures reported
by other companies. The following tables present a reconciliation
of net income, the most directly comparable measure calculated in
accordance with GAAP, to these measures for the periods
presented:
SPAR Group, Inc. |
|
Net Income attributable to SPAR Group, Inc.
to |
|
Adjusted Net Income attributable to SPAR Group, Inc.
Reconciliation |
|
Diluted Net Income per common share attributable to SPAR
Group, Inc. to |
|
Adjusted Diluted Net Income per common share attributable
to SPAR Group, Inc. Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
(in thousands) |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net Income attributable to SPAR Group Inc. |
|
$ |
866 |
|
$ |
674 |
|
|
Add-back one-time impact (net of taxes) |
|
|
387 |
|
|
(172 |
) |
|
Adjusted Net income attributable to SPAR Group,
Inc. |
|
$ |
1,253 |
|
$ |
502 |
|
|
|
|
|
|
|
|
|
Diluted Net Income per common share attributable to SPAR
Group, Inc. |
$ |
0.04 |
|
$ |
0.03 |
|
|
Add-back one-time impact (net of taxes) |
|
$ |
0.02 |
|
$ |
(0.01 |
) |
|
Adjusted Diluted Net Income per common share attributable
to SPAR Group, Inc. |
|
|
$ |
0.06 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
SPAR Group, Inc. |
|
Net Income to Consolidated Adjusted EBITDA to |
|
Adjusted EBITDA attributable to SPAR Group, Inc.
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
(in thousands) |
|
|
2023 |
|
|
2022 |
|
|
Consolidated Net Income |
|
$ |
1,777 |
|
$ |
1,454 |
|
|
|
Depreciation and amortization |
|
|
532 |
|
|
510 |
|
|
|
Interest expense |
|
|
390 |
|
|
149 |
|
|
|
Income Tax expense |
|
|
1,041 |
|
|
551 |
|
|
|
Other income |
|
|
(58 |
) |
|
(87 |
) |
|
Consolidated EBITDA |
|
|
3,682 |
|
|
2,577 |
|
|
|
Share based compensation |
|
|
173 |
|
|
150 |
|
|
|
Review of Strategic Alternatives |
|
|
317 |
|
|
- |
|
|
|
Legal Costs / Settlements - non recurring |
|
|
- |
|
|
(368 |
) |
|
Consolidated Adjusted EBITDA |
|
|
4,172 |
|
|
2,359 |
|
|
|
Adjusted EBITDA attributable to non controlling interest |
|
|
(1,276 |
) |
|
(878 |
) |
|
Adjusted EBITDA attributable to SPAR Group,
Inc. |
|
$ |
2,896 |
|
$ |
1,481 |
|
|
Note: We report non‑GAAP financial
measures in addition to, and not as a substitute for, or superior
to, financial measures calculated in accordance with GAAP. See the
section entitled "Statement Regarding Use of Non‑GAAP Financial
Measures" for an explanation of non‑GAAP measures, and the table
entitled "GAAP to Non‑GAAP Reconciliation" for a reconciliation of
GAAP to non‑GAAP measures.
Spar (NASDAQ:SGRP)
過去 株価チャート
から 4 2024 まで 5 2024
Spar (NASDAQ:SGRP)
過去 株価チャート
から 5 2023 まで 5 2024