EX-99 2 ex99_1-f8k051404.txt EX-99.1; PRESS RELEASE 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 ---------------------- March 31, March 31, 2004 2003 -------- -------- Net revenues $ 12,803 $ 18,739 Cost of revenues 8,694 11,251 -------- -------- Gross profit 4,109 7,488 Selling, general and administrative expenses 4,967 4,943 Depreciation and amortization 362 378 -------- -------- Operating (loss) income (1,220) 2,167 Interest expense 34 68 Other expense 1 38 -------- -------- (Loss) income before provision for income taxes (1,255) 2,061 (Benefit) provision for income taxes (465) 783 -------- -------- Net (loss) income $ (790) $ 1,278 ======== ======== Basic/diluted net (loss) income per common share: Net (loss) income $ (0.04) $ 0.07 Weighted average common shares - basic 18,859 18,841 ======== ======== Weighted average common shares - diluted 18,859 19,443 ======== ========
SPAR Group, Inc. Consolidated Balance Sheets (unaudited) (in thousands, except share and per share data) March 31, December 31, 2004 2003 -------- -------- 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 -------- -------- 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 -------- -------- Total assets $ 26,541 $ 27,870 ======== ======== 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 -------- -------- 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) -------- -------- Total stockholders' equity 15,300 16,023 -------- -------- Total liabilities and stockholders' equity $ 26,541 $ 27,870 -------- --------