UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): March 26, 2004
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.)
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 March 26, 2004.
Item 12. Results of Operations and Financial Condition.
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On March 26, 2004, 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 fiscal year and fourth quarter ended
December 31, 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: March 26, 2004 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 March 26, 2004.
EXHIBIT 99.1 SPAR GROUP REPORTS FINANCIAL RESULTS FOR 2003 YEAR AND FOURTH QUARTER TARRYTOWN, N.Y.--(BUSINESS WIRE)--March 26, 2004--SPAR Group, Inc. (Nasdaq:SGRP - - News) 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. Charles Cimitile, 914-332-4100 or PondelWilkinson Inc. Roger S. Pondel, 323-866-6006