SPAR Group Reports Financial Results for 2003 Year and Fourth Quarter
TARRYTOWN, N.Y., Mar 26, 2004 -- SPAR Group, Inc. (Nasdaq:SGRP) today reported financial results for the year and fourth quarter ended December 31, 2003.
For the full year, SPAR sustained a net loss of $539,000, equal to $0.03 per diluted share, on net revenues of $64.9 million. The company had net income of $5.3 million, or $0.28 per diluted share, on net revenues of $69.6 million for 2002.
SPAR recorded a net loss for the 2003 fourth quarter of $2.1 million, equal to $0.11 per share, on revenues of $12.2 million, compared with net income of $2.5 million, or $0.13 per share, on net revenues of $18.2 million in the corresponding prior-year period.
"The fourth quarter results were not indicative of our business," said Bob Brown, SPAR Group's chairman and chief executive officer. "Almost 50% of the fourth quarter loss was attributable to charges not expected to recur in the future. However, SPAR did experience lower revenue from per unit fee contracts resulting from lower retail sales of some of our larger clients' products. In addition, these revenues were impacted by the loss of a particular client earlier in the year.
"Moving into 2004, the company will focus on improving our core merchandising business. We will continue to invest in technology, the expansion of our international operations, and expansion of our local in-store demonstration business. We are confident that the investments we are making will provide long-term benefits to the company," said Brown.
"We remain focused on enhancing efficiencies. We have implemented and will continue to implement cost reductions throughout the company as appropriate and we are committed to developing and exploring new programs and technology, such as RFID applications at retail, to stimulate revenue growth. The fundamentals of our business remain strong, and we are devoting all our energy to ensuring SPAR is well positioned to be the best merchandising company in the world by using the latest technologies to produce the highest measurable value for our clients at the lowest possible cost," Brown added.
SPAR Group, Inc. is a diversified international 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, in-store demonstrations, technology, and research to manufacturers and retailers covering all product classifications and all classes of trade, including mass market, drug store, and grocery chains throughout the United States and internationally.
Certain statements in this news release are forward-looking, including, but not limited to, benefits to be derived from programs to enhance efficiencies, cost reductions, programs to stimulate revenue growth and the timing of returning the company to profitability. 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, continued technological superiority over its competitors, continued availability of capable, dedicated personnel, continued cost management, the success of its international efforts, success and availability of acquisitions, 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 is 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 Twelve Months
Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
Net revenues $12,155 $18,249 $64,859 $69,612
Cost of revenues 8,561 9,229 42,338 40,331
Gross profit 3,594 9,020 22,521 29,281
Selling, general and
administrative expenses 5,923 4,592 20,967 18,804
Depreciation and amortization 367 499 1,529 1,844
Operating (loss) income (2,696) 3,929 25 8,633
Interest expense 60 132 269 363
Other expense 209 (192) 237 (26)
(Loss) income before provision for
income taxes (2,965) 3,989 (481) 8,296
Provision for income taxes (885) 1,454 58 2,998
Net (loss) income $(2,080) $2,535 $(539) $5,298
Basic/diluted net (loss) income
per common share:
Net (Loss) Income $(0.11) $0.13 $(0.03) $0.28
Weighted average common shares -
basic 18,859 18,816 18,855 18,761
Weighted average common shares -
diluted 18,859 19,237 18,855 19,148
SPAR Group, Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share data)
Dec. 31, Dec. 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $- $-
Accounts receivable, net 13,942 16,458
Prepaid expenses and other current
assets 415 687
Deferred income taxes 1,305 903
Total current assets 15,662 18,048
Property and equipment, net 2,099 1,972
Goodwill 8,749 7,858
Deferred income taxes 434 705
Other assets 926 217
Total assets $27,870 $28,800
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,445 $422
Accrued expenses and other current
liabilities 4,367 5,140
Accrued expense due to affiliates 996 958
Restructuring charges, current 685 1,354
Line of credit, short-term 4,084 -
Due to certain stockholders - 3,951
Total current liabilities 11,577 11,825
Line of credit, long-term - 148
Restructuring charges, long-term - 235
Other long-term debt 270 -
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 -
18,858,972 - December 31, 2003
18,824,527 - December 31, 2002 189 188
Treasury stock (384) (30)
Additional paid-in capital 11,249 10,919
Accumulated other comprehensive
loss (7) -
Retained earnings 4,976 5,515
Total stockholders' equity 16,023 16,592
Total liabilities and stockholders'
equity $27,870 $28,800
Contact:
SPAR Group, Inc.
SPAR Group, Inc.
Charles Cimitile, 914-332-4100
or
PondelWilkinson Inc.
Roger S. Pondel, 323-866-6006
