SPAR Group, Inc. (SGRP) closed the most recent trading day at $1.03, moving -1.91% from the previous trading session. This change lagged the S&P 500's 0.8% gain on the day. Meanwhile, the Dow experienced a rise of 0.94%, and the technology-dominated Nasdaq saw an increase of 0.97%. Prior to today's trading, shares of the company had gained 1.45% outpaced the Business Services sector's loss of 0.89% and lagged the S&P 500's gain of 5.12%.Analysts and investors alike will be keeping a close eye on the perform ...

Core Viewpoint - The SPAR Group's recent Annual Shareholders' Meeting raised significant concerns regarding the governance practices of its Board of Directors, particularly the re-election process and the continued service of directors who were not re-elected by shareholders [1][6]. Governance and Board Composition - At the 2025 Shareholder Meeting, three out of seven nominees for the Board were not re-elected, including two members of the Governance Committee responsible for nominating directors [1][5]. - The Bylaws stipulate that directors must submit a written irrevocable resignation to be eligible for re-election, which raises questions about the governance standards when directors not re-elected continue to serve [1][4]. - The Board's composition was reduced to five directors from January 1, 2024, to December 31, 2024, following the non-re-election of three directors, and there was no annual shareholder meeting in 2024, limiting shareholder input [4][6]. Voting Results - The voting results for the directors not re-elected were as follows: - Linda Houston: 8,041,083 votes For; 9,714,561 votes Against - John Bode: 8,023,093 votes For; 9,747,031 votes Against - Michael R. Matacunas: 7,282,163 votes For; 10,473,481 votes Against [2]. Governance Committee Concerns - The Governance Committee, which includes two directors who were not re-elected, is responsible for vetting and recommending new nominees, raising concerns about conflicts of interest [5][6]. - There are substantive reasons to believe that the Board may not be adhering to good governance practices by allowing non-re-elected directors to remain in their positions while having the authority to nominate their successors [6].

Company Performance - SPAR Group, Inc. closed at $1.08, with a daily increase of 1.89%, outperforming the S&P 500's gain of 0.38% [1] - Over the past month, the stock has risen by 1.92%, which is below the Business Services sector's gain of 3.09% and the S&P 500's gain of 6.6% [1] Earnings Report - The upcoming earnings report is projected to show earnings of $0.03 per share, reflecting a year-over-year decline of 50% [2] - For the annual period, the Zacks Consensus Estimates anticipate earnings of $0.12 per share and revenue of $0 million, indicating no change from the previous year [2] Analyst Estimates - Recent adjustments to analyst estimates for SPAR Group, Inc. are important as they reflect short-term business dynamics [3] - Positive changes in estimates suggest a favorable outlook on the company's health and profitability [3] Valuation Metrics - SPAR Group, Inc. has a Forward P/E ratio of 8.83, which is a discount compared to the industry average Forward P/E of 19.94 [6] - The Business Services industry, which includes SPAR Group, has a Zacks Industry Rank of 66, placing it in the top 27% of over 250 industries [6] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with 1 stocks averaging an annual return of +25% since 1988 [5] - Currently, SPAR Group, Inc. holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - Robert G. Brown, a founder and significant shareholder of SPAR Group, Inc., has responded to the company's press release, emphasizing the need for the Board to address the decline in stock price and consider his recommendations for improving shareholder value [1][3][4]. Company Response and Stock Performance - The SPAR June 11 Release did not explain the stock price drop from $2.97 on June 3, 2024, to $1.02 on May 29, 2025, nor did it outline a strategy to increase the stock price [3][4]. - Mr. Brown holds 6,469,683 shares of common stock in SPAR Group, indicating his vested interest in the company's performance [1]. Recommendations by Mr. Brown - Mr. Brown proposed five key actions for the Board's consideration: 1. A buyback of 6,000,000 shares [6]. 2. A quarterly dividend of $0.02 per share [6]. 3. A review of the Company's Amended and Restated Bylaws to ensure alignment with shareholder interests [6]. 4. An evaluation of Board compensation, suggesting that a portion be tied to share price performance [6]. 5. A review of management compensation to ensure it is aligned with delivering shareholder value [6]. Board's Response to Recommendations - The SPAR June 11 Release did not address Mr. Brown's recommendations, which he believes are crucial for the benefit of all shareholders [4][7]. - Mr. Brown criticized the company's response for focusing on personal attacks rather than addressing substantive issues [7]. Call for Transparency - Mr. Brown urged the Board to be transparent and communicate its position on his recommendations to shareholders [8].

Core Viewpoint - SPAR Group, Inc. is responding to false claims made by Robert G. Brown, a former chairman, regarding the company's board and management, asserting that his demands are self-serving and not in the interest of all shareholders [1][2][3]. Group 1: Background on Robert G. Brown - Robert G. Brown, who founded SPAR in 1967, has a history of disrupting the board for personal gain, leading to the resignation of independent directors and multiple CEOs [4]. - Brown's recent demands include $15 million in cash, $900,000 annually in consulting fees, and a long-term service agreement with his defunct business, which the board views as solely benefiting him [3][4]. Group 2: Board's Position and Actions - The board emphasizes that Brown has significant influence, holding two dedicated seats on the board and the ability to remove a director to gain further control [6][7]. - The board has stated that it is in compliance with its by-laws and has not improperly refused other candidates for director nominations [10]. Group 3: Financial and Legal Context - Brown is currently in violation of Section 16(b) of the Securities Exchange Act of 1934, and the company has demanded he return profits from short-swing trades [5]. - The company reported a loss in 2024 due to accounting treatment related to a joint venture sale, but asserts that its balance sheet remains strong [10]. Group 4: Shareholder Engagement and Recommendations - The board encourages shareholders to support the proposed Stock Compensation Plan, which aims to align executive compensation with performance [9]. - The company has set June 12, 2025, as the date for the annual meeting of stockholders and continues to welcome nominations that comply with its by-laws [10][12].

Core Viewpoint - Robert G. Brown, a founder of SPAR Group, Inc., announces his voting plans for the upcoming annual meeting of shareholders on June 12, 2025, expressing concerns over the company's management decisions and governance issues [1][4]. Financial Performance - The company's common stock price decreased from $2.97 on June 3, 2024, to $1.02 on May 29, 2025 [6]. - Revenue dropped by 25.1% from $262.747 million in 2023 to $196.814 million in 2024 [6]. - The company reported a net loss of $4.412 million in 2024, down from a profit of $5.742 million in 2023 [12]. Governance Issues - The company failed to hold an annual shareholder meeting in 2024 and did not file an annual report on Form 10-K in a timely manner for the fiscal year of 2024, risking delisting from NASDAQ [6][11]. - The Board approved nearly $1 million in cash compensation for its members for the fiscal year 2025 [6]. - The bylaws were amended in 2022, making them less favorable to shareholders and not compliant with best practices recommended by Glass-Lewis and ISS [6][13]. Board Composition and Elections - Mr. Brown plans to vote against the election of certain board members, including the Chairperson of the Compensation Committee and the Chairman of the Audit Committee, while supporting the election of two new candidates [11][12]. - The current Board has restricted the inclusion of alternative candidates for election, limiting shareholder choice [6][11]. Proposals for Improvement - Mr. Brown advocates for a share buyback of 6 million shares and a quarterly dividend of $0.02 per share [11]. - He calls for a review of the Board's compensation structure to align it more closely with shareholder value [11]. - A review of the amended bylaws is also proposed to ensure they serve the best interests of shareholders [11].

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]