SPAR Group Announces Financial Results for the Third Quarter 2015
Highlights for the three and nine month periods ended
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Third Quarter 2015 revenue decreased nine percent to
$28.3 million . Adjusting for the impact of foreign currency translation, 3Q15 revenue increased one percent.
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Third Quarter 2015 net loss attributable to
SPAR Group, Inc. was$92,000 , or$0.00 per share, compared to 3Q14 net income of$383,000 , or$0.02 per share. Included in the Q315 net loss was a one-time bad debt reserve charge (net of minority interest) of$128,000 .
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Revenue for the nine months ended
September 30, 2015 decreased three percent to$87 million . Adjusting for the impact of foreign currency translation, revenue for the nine months endedSeptember 30, 2015 increased four percent.
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Net loss attributable to
SPAR Group, Inc. for the nine months endedSeptember 30, 2015 was ($137,000 ), or ($0.01 ) per share, compared to net income of$590,000 , or$0.03 per share for the nine months endedSeptember 30, 2014 . Exclusive of the one-time adjustment inChina , the Company would have posted an income for the nine month period of$35,000 .
Financial Results by Geography (in 000's) | ||||||
Three Months Ended |
% |
Nine Months Ended |
% | |||
Revenue: | 2015 | 2014 | Change | 2015 | 2014 | Change |
International |
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-9% |
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-1% |
Domestic | 10,706 | 11,666 | -8% | 32,783 | 35,265 | -7% |
Total |
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-9% |
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-3% |
Three Months Ended |
Nine Months Ended |
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Net Income: | 2015 | 2014 | 2015 | 2014 | ||
International | $ (131) | $ (7) | $ (372) |
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Domestic | 39 | 390 | 235 | 499 | ||
Total | $ (92) |
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$ (137) |
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Earnings Per Basic and Diluted share: | ||||||
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$ (0.01) |
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"The relative strength of the dollar continues to make comparisons difficult for our international business units and has masked incremental contribution from acquisitive growth in
Margin Profile by Geography | ||||||
Gross Margin: | ||||||
Three Months Ended |
|
Nine Months Ended |
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2015 | 2014 | Change | 2015 | 2014 | Change | |
International | 19.7% | 18.3% | 149 | 19.7% | 19.1% | 57 |
Domestic | 30.3% | 32.4% | (203) | 30.9% | 30.6% | 32 |
Total | 23.8% | 23.6% | 19 | 23.9% | 23.6% | 30 |
Operating Expenses as a % of Sales: | ||||||
Three Months Ended |
|
Nine Months Ended |
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2015 | 2014 | Change | 2015 | 2014 | Change | |
International | 18.8% | 18.3% | 49 | 18.2% | 18.0% | 22 |
Domestic | 29.7% | 27.6% | 216 | 30.0% | 28.2% | 179 |
Total | 23.0% | 21.8% | 114 | 22.6% | 22.0% | 66 |
International gross profit margin for the three months ended
Domestic gross profit margin for the three months ended
While actual operating expenses for the third quarter of 2015 decreased four percent compared to the same period in 2014, (with 7% decrease in international and 1% decrease in domestic business segment expenses), the Company did experience an increase in operating expense margin of 1.2 percentage points.
Balance Sheet as of
As of
Following the issuance of this release, the Company will provide recorded comments that can be accessed on the following website. http://investors.sparinc.com/releases.cfm
About SPAR Group
Forward-Looking Statements
This Press Release contains and the above referenced recorded comments will contain "forward-looking statements" made by
The forward-looking statements made by the Company in this Press Release and the above referenced recorded comments include (without limitation) any expectations, guidance or other information respecting the pursuit or achievement of the Company's five corporate objectives (growth, customer value, employee development, productivity & efficiency, and earnings per share), building upon the Company's strong foundation, leveraging compatible global opportunities, improving on the value we already deliver to customers, our growing client base, continuing balance sheet strength, customer contract expansion, growing revenues and becoming profitable through organic growth and acquisitions, attracting new business that will increase SPAR Group's revenues, improving product mix, continuing to maintain or reduce costs and consummating any transactions. The Company's forward-looking statements also include, in particular and without limitation, those made in the "Management's Discussion and Analysis of Financial Condition, Results of Operations, Liquidity and Capital Resources" in the Quarterly Report, and those made in "Business", "Risk Factors" 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" 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 above referenced recorded comments, the Quarterly Report, 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, 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, expected, estimated or otherwise expected by the Company (collectively, "expectations") and described in the information in the Company's forward-looking and other statements, whether express 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 the Company's Common Stock.
You should 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 this Press Release, the above referenced recorded comments, 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.
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Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income | ||||
(Unaudited) | ||||
(In thousands, except share and per share data) | ||||
Three Months Ended |
Nine Months Ended |
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2015 | 2014 | 2015 | 2014 | |
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Net revenues | ||||
Cost of revenues | 21,555 | 23,703 | 66,206 | 68,733 |
Gross profit | 6,714 | 7,306 | 20,796 | 21,236 |
Selling, general and administrative expenses | 6,014 | 6,329 | 18,289 | 18,522 |
Depreciation and amortization | 471 | 430 | 1,414 | 1,260 |
Operating income | 229 | 547 | 1,093 | 1,454 |
Interest expense | 47 | 44 | 187 | 128 |
Other income, net | (8) | (89) | (68) | (202) |
Income before income tax expense | 190 | 592 | 974 | 1,528 |
Income tax expense | 83 | 21 | 435 | 373 |
Net income | 107 | 571 | 539 | 1,155 |
Net income attributable to non-controlling interest | (199) | (188) | (676) | (565) |
Net (loss) income attributable to |
$ (92) |
|
$ (137) |
|
Basic and diluted income per common share: | $ -- |
|
$ (0.01) |
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Weighted average common shares - basic | 20,556 | 20,584 | 20,562 | 20,585 |
Weighted average common shares - diluted | 20,556 | 21,525 | 20,562 | 21,687 |
Net income |
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Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (663) | (423) | (1,413) | (378) |
Comprehensive (loss) income | (556) | 148 | (874) | 777 |
Comprehensive (loss) attributable to non-controlling interest | (199) | (188) | (676) | (565) |
Comprehensive (loss) income attributable to |
$ (755) | $ (40) | $ (1,550) |
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Consolidated Balance Sheets | ||
(In thousands, except share and per share data) | ||
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2015 | 2014 | |
Assets | (Unaudited) | |
Current assets: | ||
Cash and cash equivalents |
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Accounts receivable, net | 21,306 | 26,245 |
Deferred income taxes | 416 | 464 |
Prepaid expenses and other current assets | 605 | 868 |
Total current assets | 28,537 | 31,959 |
Property and equipment, net | 2,450 | 2,175 |
|
1,800 | 1,800 |
Intangible assets, net | 2,693 | 3,149 |
Deferred income taxes | 5,579 | 5,134 |
Other assets | 522 | 353 |
Total assets |
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Liabilities and equity | ||
Current liabilities: | ||
Accounts payable |
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Accrued expenses and other current liabilities | 6,474 | 8,149 |
Accrued expenses due to affiliates | 705 | 487 |
Deferred income taxes | 1,822 | 1,540 |
Customer deposits | 721 | 659 |
Lines of credit | 884 | 658 |
Total current liabilities | 14,214 | 15,504 |
Long-term debt and other liabilities | 5,138 | 5,855 |
Total liabilities | 19,352 | 21,359 |
Commitments and Contingencies - See Note 9 | ||
Equity: | ||
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Preferred stock, |
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Authorized and available shares- 2,445,598 | ||
Issued and outstanding shares- | ||
None - September 30, 2015 and |
- | - |
Common stock, |
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Authorized shares - 47,000,000 | ||
Issued shares - | ||
20,680,717 - September 30, 2015 and |
207 | 207 |
Outstanding shares - | ||
20,540,922 - |
- | - |
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139,795 shares - September 30, 2015 and 121,663 shares - December 31, 2014 | (198) | (183) |
Additional paid-in capital | 15,755 | 15,519 |
Accumulated other comprehensive loss | (2,969) | (1,556) |
Retained earnings | 4,633 | 4,770 |
Total |
17,428 | 18,757 |
Non-controlling interest | 4,801 | 4,454 |
Total equity | 22,229 | 23,211 |
Total liabilities and equity |
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CONTACT: Company Contact:Source: SPAR GroupJames R. Segreto Chief Financial OfficerSPAR Group, Inc. (914) 332-4100 Investor Contact:Matthew W. Selinger Three Part Advisors (817) 310-8776 mselinger@threepa.com
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