AUBURN HILLS, Mich., May 28, 2025 (GLOBE NEWSWIRE) -- SPAR Group, Inc. (NASDAQ: SGRP) (“SGRP”, “SPAR Group” or the “Company”), a provider of merchandising, marketing and distribution services announced two Nasdaq notifications today. On May 21, 2025, SGRP received a notification letter from Nasdaq stating that SPAR Group is in compliance with regard to its Annual Report on Form 10-K filed on May 16th. On May 22, 2025, Nasdaq notified SGRP that it did not timely file its Quarterly Report on Form 10-Q for the ...

Business Operations and Strategy - As of December 31, 2024, SPAR Group has exited operations in Mexico, Brazil, South Africa, China, Japan, and India, now focusing solely on the United States and Canada [25]. - The company aims to grow its core business, introduce or acquire new services, and invest in technology to achieve top-line growth and expanded margins [34]. - SPAR Group operates through three divisions: Americas, Asia Pacific (APAC), and Europe, Middle East and Africa (EMEA), with a strategic exit from all international joint ventures [38]. - The company provides six principal types of services, including Merchandising and Marketing, Category Management and Setup, and Fulfillment and Distribution [41]. - SPAR Group's strategy includes testing new ideas and services, particularly in digital, e-commerce, and AI, to meet evolving market demands [36]. - The company continues to evaluate its business model in light of changing client requirements and regulatory environments [56]. - The Company’s business model depends on the continued outsourcing of merchandising and marketing services, which may be impacted by retailers choosing to perform these services internally [74]. Financial Performance - Consolidated net revenues for the year ended December 31, 2024, were $196.8 million, a decrease of $65.9 million or 25.1% compared to $262.7 million in 2023, primarily due to the sale of all international joint ventures [148]. - The Americas net revenues decreased by $26.5 million or 13.0% to $177.2 million in 2024, impacted by the sale of the Brazilian joint venture, although there was an 11% revenue growth in the United States and 15% in Canada [149]. - Asia-Pacific net revenues fell by $13.2 million or 53.9% to $11.3 million in 2024, due to the exit of all joint ventures in the region [150]. - EMEA net revenues decreased by $26.3 million or 76.1% to $8.3 million in 2024, attributed to the exit of the South African joint venture [151]. - Selling, general and administrative expenses were approximately $37.3 million or 18.9% of net revenue in 2024, compared to $43.7 million or 16.6% in 2023, including $5.5 million related to strategic alternatives and joint venture sales [156]. - Consolidated Adjusted EBITDA for 2024 was $6.65 million, down from $12.97 million in 2023, with Adjusted EBITDA attributable to SPAR Group, Inc. at $5.62 million compared to $9.94 million in 2023 [145]. - The company's interest expense increased to $2.2 million in 2024 from $1.9 million in 2023, due to higher debt balances [161]. - Net income attributable to SPAR Group, Inc. was a loss of $3.2 million in 2024, compared to a profit of $3.9 million in 2023 [146]. - The Company reported a net cash used in operating activities of $(0.7) million for the year ended December 31, 2024, compared to net cash provided by operating activities of $6.8 million for 2023, primarily due to the sale of Brazil & South Africa [180]. Internal Controls and Compliance - The Company identified material weaknesses in its internal controls as of December 31, 2024, which resulted in errors in revenue, expense, and account reconciliations [94]. - Management identified two material weaknesses in internal control over financial reporting as of December 31, 2024, affecting the accuracy of revenue, expense, and account reconciliations [202]. - The company is focused on designing and implementing effective internal control measures to improve financial reporting reliability [205]. - Management's evaluation concluded that disclosure controls and procedures were not effective due to material weaknesses [199]. - The company is actively developing a remediation plan to address identified material weaknesses in its internal controls, but the timeline for completion is uncertain [95]. Market and Competitive Landscape - The merchandising and marketing services industry is expected to continue growing, driven by the need for retailers to enhance physical store relevance amid increasing digital competition [31]. - The marketing services industry is highly competitive, with the Company focusing on breadth and quality of client services as key competitive factors [58]. - The Company faces risks from potential economic downturns that could significantly reduce revenues, particularly from key clients in retail and manufacturing [70]. Shareholder and Stock Information - The Majority Stockholders beneficially own approximately 46.6% of the SGRP Common Stock, which could influence corporate governance and decision-making [101]. - The market price of SGRP Common Stock fluctuated from $0.95 to $3.12 per share during the year ended December 31, 2024, indicating significant volatility [89]. - The Company repurchased 1,000,000 shares under the 2024 Stock Repurchase Program on May 3, 2024, following the completion of the 2022 program [90]. - The company has never declared or paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future [128]. Human Resources and Executive Management - The Company employed approximately 3,425 individuals as of December 31, 2024, including 249 full-time and 730 part-time employees in the Americas Division [55]. - The company’s business performance is closely tied to the experience and retention of key executives, which is critical for long-term success [99]. - Phantom Stock Unit Grants were issued to key executives, including Antonio Calisto Pato and William Linnane, effective April 3, 2023 [221]. - A Change of Control Severance Agreement was established with Antonio Calisto Pato on February 28, 2023, enhancing executive retention strategies [222]. Technology and Innovation - SPAR Group's technology, SPARView, is designed to optimize merchandising and marketing services, providing clients with detailed insights and enhancing operational efficiency [37]. - The Company incurred costs of $1.0 million for the maintenance and development of its global technology systems in both 2024 and 2023 [54]. - The company implemented a new ERP system effective January 1, 2025, aimed at improving internal controls and reducing manual adjustments [205]. Risk Management - The Company is at risk of liquidity constraints due to potential violations of covenants in its credit facilities, which could adversely affect its financial condition [96]. - The Company relies on third-party vendors for telecommunication services, which poses risks related to service disruptions and cybersecurity breaches [87]. - The company carries insurance to protect against potential losses from cybersecurity incidents, but coverage may not be sufficient [114]. - The company did not encounter any material cybersecurity incidents during the fiscal year 2024, nor did it incur notable expenses as a result [115].

Company Performance - SPAR Group, Inc. ended the recent trading session at $1.06, showing a +0.95% change from the previous day's closing price, outperforming the S&P 500 which gained 0.73% [1] - The company's stock has decreased by 4.55% over the past month, underperforming the Business Services sector's gain of 9.41% and the S&P 500's gain of 9.07% [1] Earnings Expectations - The upcoming earnings release for SPAR Group, Inc. is anticipated to report an EPS of $0.03, representing a 50% decline compared to the same quarter of the previous year [2] Analyst Estimates - Recent changes to analyst estimates for SPAR Group, Inc. are important for investors, as positive revisions indicate optimism about the company's business and profitability [3] - The Zacks Rank system, which reflects these estimate changes, provides a rating model for actionable insights [4] Zacks Rank and Valuation - SPAR Group, Inc. currently holds a Zacks Rank of 3 (Hold), with no changes in the Zacks Consensus EPS estimate over the past month [5] - The company is trading at a Forward P/E ratio of 8.75, which is a discount compared to the industry average Forward P/E of 18.11 [6] Industry Context - The Business - Services industry, part of the Business Services sector, has a Zacks Industry Rank of 48, placing it in the top 20% of over 250 industries [6] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - SPAR Group, Inc. has received a notification from Nasdaq regarding its failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and is working to regain compliance [1][2][3] Group 1 - The notification from Nasdaq does not have an immediate effect on the listing or trading of SPAR Group's shares [2] - SPAR Group has been given 60 calendar days to submit a plan to regain compliance, with a potential extension until October 13, 2025, if the plan is accepted [2] - The company is actively working to complete its Fiscal Year 2024 10-K and expects to maintain compliance with SEC reporting obligations thereafter [3] Group 2 - SPAR Group is a leading merchandising and marketing services company with over 50 years of experience, providing a wide range of services to retailers, manufacturers, and distributors [8]

Core Viewpoint - SPAR Group, Inc. announced it will not timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, due to the need for additional time to finalize its consolidated financial statements [1][2]. Group 1: Filing Delay - The delay in filing the Annual Report is attributed to the extended closing of a merger transaction and the conversion to a new ERP system [3]. - The company is working with its independent registered accounting firm to complete the audit procedures necessary for the report [3]. Group 2: Future Reporting - SPAR Group plans to file the Annual Report as soon as the year-end audit work is completed, but it is currently not in a position to meet the 15-calendar-day extension period provided by the Form 12b-25 filing [2][3]. - The company expects to file its definitive Proxy Statement regarding the 2025 Annual Meeting of Stockholders on or about April 30, 2025 [4]. Group 3: Company Overview - SPAR Group is a leading merchandising and marketing services company with over 50 years of experience, providing a wide range of services to retailers, manufacturers, and distributors [9]. - The company differentiates itself by offering flexible, scalable, and innovative solutions to some of the world's leading brands and retailers [9].

Company Performance - SPAR Group, Inc. closed at $1.20, with a daily increase of +1.69%, underperforming the S&P 500's gain of 9.52% [1] - Over the past month, SPAR Group's shares have decreased by 13.04%, which is slightly better than the Business Services sector's loss of 12.29% and the S&P 500's loss of 13.47% [1] Earnings Expectations - Analysts expect SPAR Group to report earnings of $0.03 per share, indicating a year-over-year decline of 50% [2] Analyst Forecasts - Recent revisions to analyst forecasts for SPAR Group are important, as they reflect near-term business trends and analyst sentiment regarding the company's profitability [3] Valuation Metrics - SPAR Group is currently trading at a Forward P/E ratio of 9.83, which is a discount compared to the industry's average Forward P/E of 14.51 [6] Industry Ranking - The Business Services industry, which includes SPAR Group, holds a Zacks Industry Rank of 92, placing it in the top 38% of over 250 industries [6][7]

Company Overview - Highwire Capital is a middle-market investment firm focused on transforming businesses by integrating innovative technologies with traditional operating models [3] - SPAR Group, Inc. is an innovative services company that provides comprehensive merchandising, marketing, and distribution solutions to retailers and brands, emphasizing resources and analytics to enhance brand experiences [4] Acquisition Details - Highwire Capital intends to close the proposed acquisition of SPAR Group, which was approved by SPAR Group's stockholders in a special meeting on October 25, 2024 [2] - The acquisition is structured as an all-cash transaction under the Agreement and Plan of Merger dated August 30, 2024 [2] Commitment and Future Outlook - Highwire Capital has extended its lender's commitment letter and is actively working with all parties to finalize the acquisition process, aiming to deliver value to SPAR shareholders [3] - The company expresses excitement about the future of SPAR and looks forward to a successful close of the transaction [3]

Core Viewpoint - SPAR Group, Inc. has experienced a significant decline in stock performance, with a notable decrease in earnings projections for the upcoming quarter, indicating potential challenges ahead for the company [1][2]. Group 1: Stock Performance - SPAR Group, Inc. closed at $1.49, reflecting a -1.32% change from the previous day, underperforming compared to the S&P 500's loss of 1.22% [1]. - Over the past month, SPAR Group's shares have decreased by 24.12%, contrasting with the Business Services sector's slight gain of 0.01% and the S&P 500's loss of 2.31% [1]. Group 2: Earnings Projections - The upcoming earnings report for SPAR Group is projected to show earnings per share (EPS) of $0.02, which represents an 81.82% decrease from the same quarter last year [2]. Group 3: Analyst Estimates and Ratings - Recent adjustments to analyst estimates for SPAR Group are being monitored, as these revisions reflect short-term business trends and can indicate analysts' outlook on the company's health and profitability [3]. - The Zacks Rank system, which evaluates estimate changes, currently ranks SPAR Group at 3 (Hold), with the consensus EPS projection remaining unchanged over the past 30 days [5]. Group 4: Valuation Metrics - SPAR Group is trading at a Forward P/E ratio of 12.58, which is below the industry average Forward P/E of 16.48, suggesting a valuation discount [6]. - The Business Services industry, to which SPAR Group belongs, holds a Zacks Industry Rank of 162, placing it in the bottom 36% of over 250 industries [6]. Group 5: Industry Performance - The Zacks Industry Rank measures the strength of individual industry groups, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7].

Core Insights - SPAR Group, Inc. (SGRP) has been trending on Zacks.com, indicating potential interest in its stock performance [1] - The company's earnings projections are crucial for determining its stock's fair value, which is based on the present value of future earnings [2][4] Earnings Estimates - The consensus earnings estimate for the next fiscal year is $0.12, reflecting a significant decrease of -73.9% compared to the previous year [5] - For the current quarter, the expected earnings are $0.02 per share, indicating a decline of -81.8% from the same quarter last year [13] - The consensus sales estimate for the current quarter is $39 million, representing a year-over-year change of -40.1% [16] Revenue Performance - SPAR Group reported revenues of $37.79 million in the last quarter, which is a year-over-year decline of -43.9% [17] - The revenue estimates for the current and next fiscal years are $207 million and $172 million, indicating changes of -21.2% and -16.9%, respectively [16] Analyst Ratings and Market Performance - SPAR Group has a Zacks Rank of 3, suggesting it may perform in line with the broader market in the near term [11][14] - Over the last four quarters, the company surpassed consensus EPS estimates twice and revenue estimates three times [8] Valuation Metrics - SPAR Group is graded A in terms of valuation, indicating it is trading at a discount compared to its peers [10] - The analysis of valuation multiples such as price-to-earnings (P/E) and price-to-sales (P/S) is essential for assessing whether the stock is fairly valued [18] Conclusion on Growth Potential - Revenue growth is critical for sustaining earnings growth, as a company cannot maintain long-term earnings growth without increasing revenues [20]

Core Points - SPAR Group's stockholders approved the merger with Highwire Capital on October 25, 2024, with a merger consideration of $2.50 per share [1][2] - The merger is an all-cash transaction, and the agreement was established on August 30, 2024 [2] - SPAR Group's management expresses commitment to completing the transaction and delivering value to shareholders [3] Company Overview - SPAR Group, Inc. provides merchandising, marketing, and distribution services, focusing on improving brand experiences and transforming retail spaces [5] - Highwire Capital aims to transform middle-market businesses by integrating innovative technologies with traditional operating models, driving efficiency and fostering industry advancements [4]