SPAR Group Reports Second Quarter Results
SPAR Group Reports Second Quarter Results
Aug 02, 2002
SPAR Group Reports Second Quarter Results
Income From Continuing Operations Up 52 Percent for Quarter
TARRYTOWN, N.Y., Aug. 2, 2002 -- SPAR Group, Inc. (Nasdaq:SGRP) today announced results for its second quarter ended June 30, 2002, reflecting strength of the company's core marketing services business.Income from continuing operations for the second quarter climbed 52 percent to $1.07 million, or $0.06 per diluted share, from $703,000, or $0.04 per diluted share, a year earlier. Net income for the second quarter was $1.07 million, or $0.06 per diluted share, compared with $319,000, or $0.02 per diluted share, last year. Revenues for the quarter were $17.5 million compared with $16.1 million a year ago. Results in the second quarter of 2001 included a loss from discontinued operations of $384,000.
For the six months ended June 30, 2002, income from continuing operations increased 45 percent to $1.6 million, or $0.08 per diluted share, from $1.1 million, or $0.06 per diluted share, in the same period a year ago. Net income for the six months increased to $1.6 million, or $0.08 per diluted share, from $996,000, or $0.05 per diluted share, last year. Revenues for the first half of 2002 were $33.6 million compared with $31.0 million in the comparable 2001 period.
"SPAR merchandising services measurably improve our clients' sales and profits. We believe that the revenue growth for the first half was primarily due to clients increasing their use of our merchandising services as they realize these benefits," said Bob Brown, SPAR Group's chairman and chief executive officer. "The improved second quarter results also reflect our continued management of operating expenses and the company's balance sheet," Brown added.
Based upon the current business environment, Brown indicated he remains optimistic regarding the company's previous estimate of achieving $0.28 per diluted share from continuing operations for 2002.
SPAR Group, Inc., a diversified marketing services company, provides a broad array of productivity-enhancing products and services to help Fortune 1000 companies improve their sales, operating efficiency and profits. SPAR is organized into three operating divisions. The Merchandising Division provides in-store merchandising, database and research services to general retail, mass market, drug and grocery chains. The Technology Division offers a series of Internet-based productivity improvement applications designed to help clients increase operating efficiencies and train employees in remote locations. SPAR's International Division, through a joint venture with a large Japanese wholesaler, provides in-store merchandising services to the Japanese market.
Certain statements in this news release are forward looking and involve a number of risks and uncertainties. The company's actual results could differ materially from those indicated by such statements as a result of various factors, including the continued building of sales momentum, the success of marketing its Internet application software products and other factors discussed in SPAR Group's Form 10-K, Form 10-Q and other filings made with the SEC from time to time.
SPAR Group, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
---- ---- ---- ----
Net revenues $ 17,542 $ 16,091 $ 33,588 $ 31,032
Cost of revenues 10,591 9,860 20,342 18,608
------------------- -------------------
Gross profit 6,951 6,231 13,246 12,424
Selling, general and
administrative expenses 4,675 4,210 9,642 8,986
Depreciation and amortization 460 680 877 1,310
------------------- -------------------
Operating income 1,816 1,341 2,727 2,128
Interest expense 38 172 86 326
Other expense 52 0 134 0
------------------- -------------------
Income before provision
for income taxes 1,726 1,169 2,507 1,802
Provision for income taxes 657 466 956 732
------------------- -------------------
Income from continuing
operations 1,069 703 1,551 1,070
Loss from discontinued
operations, net 0 (384) 0 (74)
------------------- -------------------
Net Income $ 1,069 $ 319 $ 1,551 $ 996
=================== ===================
Basic/diluted net income
(loss) per common share:
Income from continuing
operations $ 0.06 $ 0.04 $ 0.08 $ 0.06
Loss from discontinued
operations, net 0.00 (0.02) 0.00 (0.01)
Net Income $ 0.06 $ 0.02 $ 0.08 $ 0.05
=================== ===================
Weighted average common
shares - basic 18,593 18,272 18,592 18,272
=================== ===================
Weighted average common
shares - diluted 19,021 18,336 19,021 18,329
=================== ===================
SPAR Group, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except per share data)
June 30, December 31,
2002 2001
-------------------------
Assets
Current Assets:
Cash and cash equivalents $ -- $ --
Accounts receivable, net 21,084 21,144
Prepaid expenses and other current assets 446 440
Deferred income taxes 3,241 3,241
-------------------------
Total current assets 24,771 24,825
Property and equipment, net 1,926 2,644
Goodwill and other intangibles, net 8,357 8,357
Deferred income taxes 389 389
Other assets 374 110
Net long-term assets from
discontinued operations 0 4,830
-------------------------
Total assets $ 35,817 $ 41,155
=========================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 747 $ 440
Accrued expenses and other
current liabilities 7,013 5,868
Restructuring and other charges,
current 1,426 1,597
Due to certain stockholders 2,455 2,655
Current portion of long-term debt 0 57
Net current liabilities
discontinued operations 0 5,732
-------------------------
Total current liabilities 11,641 16,349
Line of credit and long-term liabilities,
net of current portion 9,100 11,287
Long-term debt due to certain stockholders 2,000 2,000
Restructure and other charges, long-term 578 585
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 -
18,600,628 - June 30, 2002, and
18,585,615 - December 31, 2001 186 186
Additional paid-in capital 10,544 10,531
Retained Earnings 1,768 217
-------------------------
Total stockholders' equity 12,498 10,934
-------------------------
Total liabilities and stockholders' equity $ 35,817 $ 41,155
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Contacts: SPAR Group Inc., Tarrytown Charles Cimitile 914/332-4100 PondelWilkinson MS&L, Los Angeles Gary S. Maier 323/866-6060