SPAR (US:SGRP)2025-11-14 21:10Financial Performance - Net revenues for Q3 2025 were $41.416 million, a 9% increase from $37.788 million in Q3 2024[6] - Gross profit for the nine months ended September 30, 2025, was $24.028 million, down 11% from $27.110 million in the same period of 2024[6] - Operating loss for Q3 2025 was $(5.919) million, compared to an operating loss of $(1.530) million in Q3 2024[6] - Net loss attributable to SPAR Group, Inc. for Q3 2025 was $(8.764) million, compared to a net income of $0.270 million in Q3 2024[6] - For the nine months ended September 30, 2025, SPAR Group reported a net loss of $8,303,000 compared to a net income of $3,468,000 for the same period in 2024[14] - Total net revenue for the three months ended September 30, 2025, was $41.4 million, a 9.4% increase from $37.8 million in the same period of 2024[76] - The company reported a net loss attributable to SPAR Group, Inc. of $8.764 million for the three months ended September 30, 2025, compared to a net loss of $182,000 in the same period of 2024[80] Assets and Liabilities - Total current assets increased to $51.900 million as of September 30, 2025, from $45.996 million as of December 31, 2024[8] - Total liabilities rose to $45.076 million as of September 30, 2025, compared to $32.125 million as of December 31, 2024[8] - Cash and cash equivalents decreased to $8.206 million as of September 30, 2025, from $18.221 million as of December 31, 2024[8] - Total stockholders' equity decreased to $16.589 million as of September 30, 2025, from $24.306 million as of December 31, 2024[8] - Long-lived assets increased from $4.479 million as of December 31, 2024, to $6.269 million as of September 30, 2025[75] Cash Flow and Operating Activities - Cash used in operating activities for the nine months ended September 30, 2025 was $15,962,000, significantly higher than $730,000 used in the same period of 2024[14] - Cash and cash equivalents at the end of the period on September 30, 2025, were $8,206,000, down from $19,652,000 at the end of September 2024[14] - The company reported a decrease in cash paid for interest, which was $1,553,000 in 2025 compared to $1,640,000 in 2024[14] Restructuring and Costs - The company reported restructuring costs and severance of $4.018 million for Q3 2025, with no such costs reported in Q3 2024[6] - The Company recognized restructuring and severance costs of $4.0 million for both the three and nine months ended September 30, 2025, related to executive team reorganization and headquarters relocation[39] Credit and Financing - Borrowings under the line of credit for the nine months ended September 30, 2025, amounted to $111,018,000, compared to $103,184,000 in 2024[14] - The net cash provided by financing activities for the nine months ended September 30, 2025, was $7,468,000, compared to $210,000 in 2024[14] - The Company has a secured revolving credit facility with North Mill Capital, increasing the US Revolving Credit Facility to $28.0 million and the Canada Revolving Credit Facility to CDN $2.0 million as of February 1, 2023[43] - The NM Credit Facility has been extended to October 10, 2027, ensuring liquidity needs are met in the near term[44] - As of September 30, 2025, the aggregate outstanding loan balance was approximately $23.8 million, with a 9.15% interest rate[46] - The Company is required to maintain a positive trailing EBITDA and comply with various financial covenants under the NM Credit Facility[47] Shareholder Activities - The 2024 Stock Repurchase Program allows for the repurchase of up to 2.5 million shares, with 1 million shares repurchased at $1.80 per share[55] - The Company recognized share-based compensation expense related to stock options of $2.237 million for the nine months ended September 30, 2025[57] - The Company recognized compensation expense of $699,635 related to Phantom Stock Awards for the nine months ended September 30, 2025[61] Discontinued Operations - The Company reported net revenues from discontinued operations of $33.2 million for the nine months ended September 30, 2024, with a loss from discontinued operations, net of tax, of $881,000[38] - The Company’s net revenues from discontinued operations for the nine months ended September 30, 2024, were $33.185 million, with a loss from discontinued operations of $881,000[38] Tax and Valuation - As of September 30, 2025, the Company recorded a valuation allowance of $1.9 million against its deferred tax assets, resulting in a carrying value of $1.9 million[23] - The Company’s gross deferred tax assets were approximately $4.3 million as of December 31, 2024, primarily related to net operating loss carryforwards and R&D tax credits[22] - The Company will implement ASU No. 2023-09 for the fiscal year ending December 31, 2025, which requires specific categories of income tax disclosures[26] Other Financial Metrics - The Company experienced a decrease in accounts receivable by $16,368,000 for the nine months ended September 30, 2025, compared to a decrease of $2,276,000 in 2024[14] - The allowance for credit losses decreased to $238,000 as of September 30, 2025, from $411,000 as of December 31, 2024, indicating improved credit quality[29] - The Company’s gross accounts receivable increased to $41.6 million as of September 30, 2025, compared to $25.2 million as of December 31, 2024, representing a 65% increase[29]