SPAR (US:SGRP)2022-08-16 17:22Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $68 million, reflecting a 1% increase year-over-year [8] - Net income was reported at $1.15 million, an increase of 123% compared to the prior year [15][22] - Gross margin improved to 19.1% from 17.9% in the previous year, representing a 120 basis point increase [13][20] Business Line Data and Key Metrics Changes - Americas segment revenue reached a record $53.3 million, up 3.9%, with the U.S. division growing by 16% [9][19] - EMEA segment revenue was $9.1 million, an increase of 7.2% year-over-year, with net income up by 211% [11][19] - APAC segment revenue declined by 27% to $5.4 million, primarily due to a 60-day pandemic lockdown in China [12][20] Market Data and Key Metrics Changes - The Americas segment accounted for 79% of total business, with significant growth in merchandising services [13] - EMEA showed strong organic growth of 7.2%, while APAC faced challenges due to pandemic-related lockdowns [20] - The overall consolidated revenues increased by just 0.9% due to the weakness in the APAC segment [19] Company Strategy and Development Direction - The company is focusing on margin improvement and has developed a pipeline that is twice as large as last year [33] - SPAR is expanding its services and leveraging advanced analytics to enhance client offerings [34][40] - The company aims to disrupt traditional models in the industry by providing innovative solutions and insights [39][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the economic challenges such as rising inflation and interest rates but sees these as opportunities for SPAR [41][42] - The company is well-positioned to hire faster and execute efficiently, leveraging strong relationships with major clients [42][43] - The pipeline is valued at over $100 million, with significant new business closed in Q2 [43][44] Other Important Information - The company authorized a share buyback program of 500,000 shares, with 74,000 shares repurchased to date [30] - Total worldwide liquidity at the end of Q2 was $16 million, with a strong balance sheet [29] Q&A Session Summary Question: About the labor law change in Mexico - The law requires that if work done in a store is the same as other work, it must be done in-house, impacting SPAR's operations [46] Question: Rise in accounts receivable - Accounts receivable increased due to longer payment terms in China, exacerbated by pandemic-related work stoppages [47][49] Question: Impact of inflation and labor costs - SPAR has not been negatively impacted by rising wages due to competitive pay and focus on profitable segments [52][53] Question: Company exposure to investors - SPAR is engaging research firms for more coverage and has been presenting at various conferences to increase visibility [54] Question: Guidance on future revenues and earnings - The company is not providing guidance at this time [56]