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].

Core Points - SPAR Group, Inc. received a notification from Nasdaq regarding compliance with its financial reporting obligations, specifically for its Quarterly Report on Form 10-Q for the period ended March 31, 2025 [1][2] - The company has been granted 60 calendar days to submit a plan to regain compliance, with a potential extension until October 13, 2025, if the plan is accepted [2] - SPAR Group is actively working to complete its Fiscal 2025 Form 10-Q to maintain compliance with SEC reporting obligations [3] Company Overview - SPAR Group is a leading provider of merchandising, marketing, and distribution services, with over 50 years of experience in the industry [9] - The company differentiates itself by offering flexible, scalable, and innovative solutions to major brands and retailers [9]

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]