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): November 10, 2003
SPAR Group, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-27824 33-0684451
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
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580 White Plains Road, Tarrytown, New York 10591
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (914) 332-4100
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(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits:
99.1 Press Release of the Registrant dated November 10, 2003.
Item 12. Results of Operations and Financial Condition.
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On November 10, 2003, 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 three months ended September 30,
2003, which is incorporated herein by reference.
The information in this Report, including the exhibit, 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.
SIGNATURES
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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.
Date: November 13, 2003 By: /s/ CHARLIE CIMITILE
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Charlie Cimitile
Chief Financial Officer
EXHIBIT INDEX
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Exhibit
Number Description
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99.1 Press Release of the Registrant dated November 10, 2003.
EXHIBIT 99.1
CONTACTS: Charles Cimitile
Chief Financial Officer
SPAR Group, Inc.
(914) 332-4100
Roger S. Pondel
PondelWilkinson MS&L
(323) 866-6060
SPAR GROUP REPORTS THIRD QUARTER, NINE-MONTHS RESULTS
TARRYTOWN, NY -- NOVEMBER 10, 2003 -- SPAR Group, Inc. (NASDAQ:SGRP)
today reported financial results for the third quarter and nine months ended
September 30, 2003.
The company sustained a net loss for the quarter of $345,000, equal to
$0.02 per share, compared with net income of $1.2 million, or $0.06 per share, a
year ago. Net revenue for the 2003 third quarter amounted to $16.6 million vs.
$17.8 million last year.
Net income for the 2003 year-to-date period was $1.5 million, equal to
$0.08 per share, compared with $2.8 million, or $0.15 per share, for the first
nine months of 2002. Net revenue rose to $52.7 million from $51.4 million last
year.
"A lower level of sales reflecting an increasingly competitive
environment had a disproportionate impact on earnings for the third quarter,"
said Bob Brown, SPAR Group's chairman and chief executive officer. "Higher
selling, general and administrative expenses, along with increased field costs,
also affected the quarter.
"While we are currently implementing cost reductions throughout the
company, we will continue to invest in systems, technology and a number of
growth programs that we believe will enhance returns over the long term," Brown
said. "Domestically, we plan to expand our merchandising services through
development of new products as well as the development of attractive sales and
marketing programs. We also plan to expand our in-store demonstration business
through both acquisition and organic growth. Internationally, we will focus on
acquisitions, as well as joint ventures in various countries.
(more)
SPAR Group, Inc.
2
"SPAR's merchandising expertise has proven to enhance our customers'
sales and profitability," Brown said. "We believe SPAR is well positioned to
attract new customers and increase business with our existing customer base.
While the investments we are currently making may have a short term negative
impact on operating results, and not all of the cost reductions will have an
immediate impact, we believe the actions we are taking now will improve SPAR's
profitability in the future."
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, in-store demonstration, 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 are forward-looking, including, but not
limited to, benefits to be derived from cost reductions, new products, sales and
marketing programs and international expansion. 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 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)
SPAR Group, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
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September 30, September 30, September 30, September 30,
2003 2002 2003 2002
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Net revenues $ 16,615 $ 17,775 $ 52,704 $ 51,363
Cost of revenues 11,380 10,760 33,777 31,102
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Gross profit 5,235 7,015 18,927 20,261
Selling, general and administrative expenses 5,334 4,571 15,044 14,212
Depreciation and amortization 385 467 1,162 1,345
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Operating (loss) income (484) 1,977 2,721 4,704
Interest expense 69 144 209 231
Other expense - 32 28 166
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(Loss) income before provision for income taxes (553) 1,801 2,484 4,307
(Benefit) provision for income taxes (208) 588 943 1,544
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Net (loss) income $ (345) $ 1,213 $ 1,541 $ 2,763
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Net (loss) income per common share:
Basic $ (0.02) $ 0.06 $ 0.08 $ 0.15
Diluted $ (0.02) $ 0.06 $ 0.08 $ 0.14
Weighted average common shares - basic 18,859 18,696 18,853 18,700
=================================== =================================
Weighted average common shares - diluted 18,859 19,103 19,508 19,118
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SPAR Group, Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share data)
September 30, December 31,
2003 2002
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ASSETS
Current assets:
Cash and cash equivalents $ - $ -
Accounts receivable, net 15,002 16,458
Prepaid expenses and other current assets 1,055 783
Deferred income taxes 707 903
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Total current assets 16,764 18,144
Property and equipment, net 2,166 1,972
Goodwill 8,157 7,858
Deferred income taxes 648 705
Other assets 664 121
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Total assets $ 28,399 $ 28,800
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,219 $ 422
Accrued expenses and other current liabilities 2,700 5,140
Accrued expense due to affiliates 1,628 958
Restructuring charges, current 772 1,354
Line of credit, short-term 4,673 -
Due to certain stockholders - 3,951
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Total current liabilities 10,992 11,825
Line of credit, long-term - 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 -
18,858,972 - September 30, 2003
18,824,527 - December 31, 2002 189 188
Treasury stock (710) (30)
Additional paid-in capital 10,872 10,919
Retained earnings 7,056 5,515
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Total stockholders' equity 17,407 16,592
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Total liabilities and stockholders' equity $ 28,399 $ 28,800
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