SPAR Group Reports Sharply Higher First Quarter Results; Net Income Rises 165% on 20% Increase in Revenues
TARRYTOWN, N.Y.--April 23, 2003--SPAR Group, Inc. (Nasdaq:SGRP) today announced strong increases in revenues and income for its first quarter ended March 31, 2003.
Net income for the 2003 three-month period advanced 165% to $1.3 million, equal to $.07 per fully diluted share, from $482,000, or $.03 per fully diluted share, for the comparable prior year period. Net revenues for the 2003 first quarter rose 20% to $19.3 million from $16.0 million a year ago.
The company attributed its positive results primarily to programs implemented last year to enhance the sales and marketing functions of its products and services, as well as to its technological innovations. SPAR Group said results also benefited from related efficiencies of scale and continued attention to cost management.
"The results are particularly gratifying because in the current challenging economic environment, clients recognize that SPAR's unique merchandising expertise can help enhance their sales and profitability," Bob Brown, SPAR Group's chairman and chief executive officer, said. "Increasingly, forward-thinking, bottom-line oriented companies in the retail, as well as manufacturing sectors, are turning to SPAR. They realize that our ability to collect quality information on a real time basis, enables them to act immediately. When you couple that with the ability to deploy people where needed at the retail level, you have a positive, measurable impact on both their sales and market share. We believe the immediate outlook for SPAR Group remains strong and anticipate a solid year ahead," Brown added.
SPAR Group, Inc. is a diversified marketing services company, providing a broad array of productivity enhancing products and services to help Fortune 1000 companies improve their sales, operating efficiency and profits. The company provides in-store merchandising, database and research services to general retail, mass market, drug, and grocery chains, both throughout the United States and internationally.
Certain statements in this news release (including, without limitation, the top line, net income and earnings per share estimates for 2003) are forward-looking and involve a number of risks and uncertainties (both known and unknown). The company's actual results, performance and trends could differ materially from those indicated or implied by such statements as a result of various factors, including (without limitation) the continued strengthening of SPAR's selling and marketing functions, continued customer satisfaction and contract renewal, new product development and marketing, continued technological superiority over its competitors, continued availability of capable dedicated personnel, continued cost management, the success of its international efforts, and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information respecting certain of these and other factors that could effect future results, performance or trends are discussed in SPAR Group's annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings made with the Securities and Exchange Commission from time to time.
SPAR Group, Inc.
Consolidated Statements of Operations
(unaudited)
(In thousands, except per share data)
Three Months Ended
March 31, March 31,
2003 2002
-------- --------
Net revenues $19,322 $16,046
Cost of revenues 11,251 9,751
Gross profit 8,071 6,295
Selling, general, and
administrative expenses 5,526 4,967
Depreciation and amortization 378 417
Operating income 2,167 911
Interest expense 68 48
Other expense 38 82
Income before provision for income taxes 2,061 781
Provision for income taxes 783 299
Net income $1,278 $482
Basic/diluted net income per common share:
Net Income - basic $0.07 $0.03
- diluted $0.07 $0.03
Weighted average common shares - basic 18,841 18,584
Weighted average common shares - diluted 19,443 18,951
SPAR Group, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
March 31, December 31,
2003 2002
--------------------------
ASSETS
Current assets:
Cash and cash equivalents $-- $--
Accounts receivable, net 19,294 17,415
Prepaid expenses and
other current assets 989 783
Deferred income taxes 903 903
Total current assets 21,186 19,101
Property and equipment, net 2,015 1,972
Goodwill 7,858 7,858
Deferred income taxes 705 705
Other assets 333 121
Total assets $32,097 $29,757
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $695 $422
Accrued expenses and other
current liabilities 6,215 6,097
Accrued expense due to affiliates 2,030 958
Restructuring charges, current 773 1,354
Due to certain stockholders 951 3,951
Total current liabilities 10,664 12,782
Line of credit 3,617 148
Restructuring charges, long-term -- 235
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares -- 3,000,000
Issued and outstanding shares - none -- --
Common stock, $.01 par value:
Authorized shares -- 47,000,000
Issued and outstanding shares
- 18,857,475 - March 31, 2003 and
18,824,527 - December 31, 2002 188 188
Treasury Stock (108) (30)
Additional paid-in capital 10,942 10,919
Retained Earnings 6,794 5,515
Total stockholders' equity 17,816 16,592
Total liabilities and
stockholders' equity $32,097 $29,757
Contacts: SPAR Group, Inc.
Charles Cimitile, 914/332-4100
PondelWilkinson MS&L
Roger S. Pondel, 323/866-6060
