UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2008
SPAR Group, Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware |
0-27824 |
33-0 684451 |
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(State or Other Jurisdiction of Incorporation) |
(Commission |
(IRS Employer |
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560 White Plains Road, Suite 210, Tarrytown, New York |
10591 |
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(Address of Principal Executive Offices) |
(Zip Code) |
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Registrant’s telephone number, including area code: (914) 332-4100
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02. |
Results of Operations and Financial Condition. |
(a) On October 30, 2008, SPAR Group, Inc. (the “Registrant”), issued the press release attached to this Current Report on Form 8-K (the “Report”) as Exhibit 99.1 reporting its financial results for the third quarter ended September 30, 2008, which is incorporated herein by reference.
The information in Item 2.02 of this Report, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. It shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
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Item 9.01. |
Financial Statements and Exhibits. |
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(a) |
Exhibits: |
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99.1 |
Press Release of the Registrant dated October 30, 2008. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SPAR GROUP, INC. | ||||||
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Date: |
November 5, 2008 |
By: |
/s/ James R. Segreto |
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James R. Segreto |
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Chief Financial Officer |
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EXHIBIT INDEX
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Exhibit |
Description |
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99.1 |
Press Release of the Registrant dated October 30, 2008.
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CONTACTS: |
James R. Segreto |
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Chief Financial Officer |
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| SPAR Group, Inc | |
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(914) 332-4100 |
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Roger S. Pondel |
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PondelWilkinson Inc. |
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(310) 279-5980 |
SPAR GROUP REPORTS SHARPLY IMPROVED FINANCIAL RESULTS
FOR 2008 THIRD QUARTER, NINE-MONTHS
-- International and Domestic Operations Continue to Contribute to
Improved Performance --
TARRYTOWN, NY—October 30, 2008—SPAR Group, Inc. (NASDAQ:SGRP) today reported improved financial results for the third quarter and nine months ended September 30, 2008.
Net revenues for the third quarter rose 20.2% to $17.3 million from $14.4 million a year ago. Gross profit for the 2008 third quarter increased 29.7% to $5.0 million from $3.9 million for the same quarter in 2007. SPAR Group achieved operating income of $418,000 for the quarter, compared with an operating loss of $1.4 million in the same period last year. The company reported that its net loss for the 2008 three months ended September 30, 2008, declined to $117,000, or $0.01 per share, which included a non-recurring expense concession of $400,000 from an affiliate. In the corresponding quarter last year, the company reported a net loss of $1.7 million, or $0.09 per share. Selling, general and administrative expenses for the 2008 third quarter decreased 13.7% to $4.4 million from $5.1 million a year ago.
(more)
SPAR Group, Inc.
International revenue for SPAR Group’s 2008 third quarter rose 24.0% to $10.8 million from $8.7 million last year. The division posted a net income of $137,000, compared with a net loss of $111,000 for the 2007 third quarter.
Revenue in the U.S. for the 2008 third quarter increased 14.3% to $6.5 million from $5.6 million a year ago. SPAR Group’s U.S. operations reduced its net loss significantly to $254,000 for the 2008 third quarter from a net loss of $1.6 million last year.
“The company’s third quarter performance reflects a combination of new business opportunities and implementation of stringent cost controls throughout the company,” said Gary Raymond, president and chief executive officer. “We are gratified that positive momentum is being achieved in both our international and domestic operations. Our entire team is working diligently, and successfully, to counter the effects of the challenging economic environment and help manufacturers and retailers achieve their sales objectives with SPAR Group’s innovative, technology-driven products and services.”
For the nine months ended September 30, 2008, revenues advanced 26.8% to $53.6 million from $42.3 million last year. Gross profit for the 2008 nine month period increased 21.1% to $15.2 million from $12.5 million a year ago. SPAR Group reported operating income of $982,000 for the 2008 year-to-date period, compared with an operating loss of $3.2 million for the same period in 2007. The company’s net loss for the first nine months of 2008 decreased to $364,000, equal to $0.02 per share, which included $458,000 in non-recurring litigation costs, a non-recurring expense concession of $500,000 from an affiliate, and $170,000 in tax benefits. The company posted a net loss of $4.0 million, or $0.21 per share, for the comparable 2007 period. Selling, general and administrative expenses for the 2008 year-to-date period decreased 11.0% to $13.5 million from $15.2 million a year ago.
International revenue for the nine months ended September 30, 2008, rose 38.3% to $30.9 million from $22.3 million last year. Net income for the international operations was $394,000 for the first nine months of 2008, compared with a net loss of $619,000 in the same period of 2007.
Revenue in the U.S. for the first nine months increased 14.0% to $22.8 million from $20.0 million in the same period a year ago. The U.S. operation reduced its net loss to $758,000 for the 2008 year-to-date period from a net loss of $3.4 million for the first nine months of 2007.
(more)
SPAR Group, Inc.
About SPAR Group
SPAR Group, Inc. is a diversified international marketing services company, providing a broad array of services to help companies improve their sales, operating efficiency and profits at retail worldwide. The company provides in-store merchandising, in-store event staffing, RFID and other technology, as well as research, to manufacturers and retailers covering all product classifications and all classes of trade, including mass market, drug store, convenience store and grocery chains. The company operates throughout the United States and internationally in Japan, Canada, Turkey, South Africa, India, Romania, China, Lithuania, Latvia, Estonia, Australia and New Zealand. For more information, visit SPAR Group’s Web site, www.sparinc.com.
Certain statements in this news release are forward-looking, including, but not limited to, attracting increasing numbers of customers for the company’s products and services and further benefits to be derived from the continued efforts to grow revenues and control costs. 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 Group’s selling and marketing functions, continued customer satisfaction and contract renewal, new product development, continued availability of capable dedicated personnel, continued cost management,the success of its international efforts, success and availability of acquisitions, availability of financing and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information regarding certain of these and other factors that could affect 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.
# # #
(Tables Follow)
(more)
SPAR Group, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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September 30, |
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September 30, |
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Net revenues |
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$ |
17,271 |
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$ |
14,365 |
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$ |
53,635 |
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$ |
42,284 |
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Cost of revenues |
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12,237 |
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10,483 |
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38,440 |
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29,738 |
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Gross profit |
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5,034 |
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3,882 |
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15,195 |
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12,546 |
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Selling, general and administrative expenses |
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4,377 |
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5,074 |
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13,545 |
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15,218 |
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Depreciation and amortization |
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239 |
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180 |
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668 |
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571 |
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Operating income (loss) |
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418 |
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(1,372 |
) |
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982 |
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(3,243 |
) |
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Interest expense |
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92 |
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66 |
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254 |
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247 |
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Other expense |
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301 |
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111 |
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865 |
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149 |
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Income (loss) before provision for income taxes and minority interest |
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25 |
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(1,549 |
) |
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(137 |
) |
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(3,639 |
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Provision for income taxes |
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25 |
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79 |
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4 |
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220 |
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Income (loss) before minority interest |
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— |
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(1,628 |
) |
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(141 |
) |
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(3,859 |
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Minority interest |
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117 |
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119 |
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223 |
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135 |
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Net loss |
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$ |
(117 |
) |
$ |
(1,747 |
) |
$ |
(364 |
) |
$ |
(3,994 |
) |
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Basic/diluted net loss per common share: |
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Net loss – basic/diluted |
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$ |
(0.01 |
) |
$ |
(0.09 |
) |
$ |
(0.02 |
) |
$ |
(0.21 |
) |
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Weighted average common shares – |
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19,138 |
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19,012 |
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19,127 |
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18,973 |
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Note: Certain reclassifications have been made to the prior period financials to conform to the current period presentation.
SPAR Group, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
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September 30, |
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December 31, |
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2008 |
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2007 |
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Assets |
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(unaudited) |
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(audited) |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,897 |
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$ |
1,246 |
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Accounts receivable, net |
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13,968 |
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13,748 |
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Prepaid expenses and other current assets |
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939 |
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975 |
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Total current assets |
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16,804 |
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15,969 |
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Property and equipment, net |
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1,950 |
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1,528 |
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Goodwill |
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798 |
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798 |
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Other assets |
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1,758 |
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1,648 |
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Total assets |
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$ |
21,310 |
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$ |
19,943 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
6,026 |
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$ |
3,631 |
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Accrued expenses and other current liabilities |
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5,429 |
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3,981 |
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Accrued expenses due to affiliates |
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|
997 |
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2,107 |
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Customer deposits |
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414 |
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580 |
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Lines of credit |
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4,731 |
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6,119 |
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Total current liabilities |
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17,597 |
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16,418 |
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Other long-term liabilities |
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|
130 |
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299 |
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Minority interest |
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1,025 |
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|
676 |
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Total liabilities |
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18,752 |
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|
17,393 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $.01 par value: |
|
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Authorized shares – 3,000,000 |
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Issued and outstanding shares – |
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6 |
|
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— |
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Common stock, $.01 par value: |
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|
|
|
|
|
|
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Authorized shares – 47,000,000 |
|
|
|
|
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|
|
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Issued and outstanding shares – |
|
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190 |
|
|
191 |
|
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Treasury stock |
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(1 |
) |
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(1 |
) |
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Additional paid-in capital |
|
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12,692 |
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11,982 |
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Accumulated other comprehensive loss |
|
|
(386 |
) |
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(43 |
) |
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Accumulated deficit |
|
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(9,943 |
) |
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(9,579 |
) |
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Total stockholders’ equity |
|
|
2,558 |
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|
2,550 |
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Total liabilities and stockholders’ equity |
|
$ |
21,310 |
|
$ |
19,943 |
|