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): May 14, 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 May 14, 2004.
Item 12. Results of Operations and Financial Condition.
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On May 14, 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 first quarter ended March 31, 2004,
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
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: May 14, 2004 By: /s/ Charles Cimitile
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Charles Cimitile
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release of the Registrant dated May 14, 2004.
EXHIBIT 99.1
NEWS RELEASE
CONTACTS: Charles Cimitile
Chief Financial Officer
SPAR Group, Inc.
(914) 332-4100
Roger S. Pondel
PondelWilkinson Inc.
(323) 866-6006
SPAR GROUP REPORTS FINANCIAL RESULTS FOR 2004 FIRST QUARTER
TARRYTOWN, NY -- May 14, 2004 -- SPAR Group, Inc. (NASDAQ:SGRP) today
reported financial results for the first quarter ended March 31, 2004.
For the 2004 period, SPAR incurred a net loss of $790,000, equal to
$0.04 per share, on net revenues of $12.8 million, compared with net income of
$1.3 million, or $0.07 per diluted share, on net revenues of $18.7 million in
the first quarter of 2003.
"First quarter financial results showed improvement over the preceding
quarter," said Robert G. Brown, SPAR Group's chairman and chief executive
officer. "However, the company's performance as compared with the prior year's
first quarter was impacted by the completion of a major project last year that
did not recur this year and the loss of two key clients.
"We continue to build for the future and believe that our acquisitions
of product demonstration companies earlier this year and last year, our
recruitment of former executives of National MegaForce, our recently announced
joint venture in India and other international efforts will pay handsome
dividends over time," Brown said. "In addition, we continue to make excellent
progress enhancing efficiencies and implementing our cost reduction program,
which we anticipate will continue for the balance of this year."
"Our entire company is fully committed to returning SPAR to sustained
profitability," Brown said. "Although the investments we are making today in
product demos, local merchandising, international expansion and technology,
including RFID, are currently contributing to our short-term losses, we believe
these investments will help move the company forward and have a long-term
positive impact on our results."
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 the company's acquisition of in-store
demonstration companies, recruitment, India joint venture, other international
efforts, and programs to enhance efficiencies, reduce costs and stimulate
revenue growth. 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
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March 31, March 31,
2004 2003
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Net revenues $ 12,803 $ 18,739
Cost of revenues 8,694 11,251
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Gross profit 4,109 7,488
Selling, general and administrative expenses 4,967 4,943
Depreciation and amortization 362 378
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Operating (loss) income (1,220) 2,167
Interest expense 34 68
Other expense 1 38
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(Loss) income before provision for income taxes (1,255) 2,061
(Benefit) provision for income taxes (465) 783
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Net (loss) income $ (790) $ 1,278
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Basic/diluted net (loss) income per common share:
Net (loss) income $ (0.04) $ 0.07
Weighted average common shares - basic 18,859 18,841
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Weighted average common shares - diluted 18,859 19,443
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SPAR Group, Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share data)
March 31, December 31,
2004 2003
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ASSETS
Current assets:
Cash and cash equivalents $ - $ -
Accounts receivable, net 11,401 13,942
Prepaid expenses and other current assets 964 415
Deferred income taxes 1,873 1,305
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Total current assets 14,238 15,662
Property and equipment, net 2,038 2,099
Goodwill 9,201 8,749
Deferred income taxes 434 434
Other assets 630 926
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Total assets $ 26,541 $ 27,870
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,596 $ 1,445
Accrued expenses and other current liabilities 2,220 4,367
Accrued expense due to affiliates 1,576 996
Restructuring charges, current 685 685
Line of credit, short-term 3,889 4,084
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Total current liabilities $ 10,966 $ 11,577
Other long-term liabilities 275 270
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 - March 31, 2004 and
December 31, 2003 189 189
Additional paid-in capital 11,175 11,249
Accumulated other comprehensive loss (8) (7)
Retained earnings 4,186 4,976
Treasury stock (242) (384)
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Total stockholders' equity 15,300 16,023
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Total liabilities and stockholders' equity $ 26,541 $ 27,870
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