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SPAR Group, Inc. Reports Second Quarter 2025 Results

1. SGRP reported $38.6 million in Q2 revenues, up 13.5% sequentially. 2. Gross margins increased to 23.5%, marking a notable improvement. 3. Future business pipeline exceeds $200 million, indicating growth potential. 4. Net income reached $0.00 per share, improving from a previous loss. 5. Company liquidity stands at over $15 million, maintaining financial stability.

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FAQ

Why Bullish?

The strong revenue growth and improved margins could lead to higher investor confidence, comparably observed during previous profitable quarters.

How important is it?

The article highlights improved financial metrics and opportunities, indicating positive developments relevant to SGRP’s stock performance.

Why Short Term?

Immediate interest from investors may increase due to rising revenues and margins, influencing stock price in the near term.

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SPARCARRTGTWMT
Strengthening quarterly sales, up 13.5% from first quarter, with stronger gross margins of 23.5% after 2024 divestitures of previously consolidated international JVs August 14, 2025 08:00 ET  | Source: SPAR Group, Inc. AUBURN HILLS, Mich., Aug. 14, 2025 (GLOBE NEWSWIRE) -- SPAR Group, Inc. (NASDAQ: SGRP) (“SPAR,” “SPAR Group” or the “Company”), a leading provider of merchandising, marketing, and distribution services, today reported financial and operating results for the three and six months ended June 30, 2025. Mike Matacunas, the Company’s President and Chief Executive Officer, commented, “Although the year-over-year comparisons of the consolidated financials remain complicated by the divestitures in the prior year, our second quarter revenues of $38.6 million for the continuing U.S. and Canada businesses were strong. U.S. and Canada revenues were up 5%1 compared to the prior year quarter and increased sequentially by 13.5% compared to the first quarter’s revenues. Notably, the U.S. and Canada gross profit dollars of $9.1 million and margins of 23.5% increased for the second quarter from the first quarter and the year-ago quarter.  We continue to build on the largest pipeline of opportunity in SPAR’s history for the U.S. and Canada business, with more than $200 million of future business to win. I am excited about the future of SPAR Group. “We are well-positioned with a solid balance sheet and available liquidity of over $15 million. Finally, I want to thank the employees of SPAR and our Board who have worked hard and partnered with me as we set new milestones in this next phase of growth,” said Matacunas. Second Quarter 2025 Highlights Net revenues were $38.6 million, up 13.5% sequentially from the first quarter. Sales declines from the prior year reflect the exit of joint ventures in Mexico, China, Japan, and India.  Consolidated Gross Margin was 23.5% of sales, compared favorably to 21.4% of sales in the first quarter and 20.6% of sales in the prior year period.Net income (loss) attributable to SPAR Group, Inc. was essentially break-even, or $0.00 per diluted share, compared to a loss of ($3.9) million, or ($0.16) per diluted share in the prior year quarter. The prior year’s second quarter includes a $1.4 million non-cash loss on sale.Adjusted EBITDA attributable to SPAR Group, Inc. was $1.3 million, or 3.4% of sales, compared to the prior year quarter of $1.4 million, or 3.2% of sales. 1 Refer to the Geographic Data table in the Segment footnote of the Company’s Form 10-Q for the second quarter of 2025. First Half 2025 Highlights Net revenues were $72.7 million.Consolidated Gross Margin was 22.5% of sales, compared to 20.1% of sales in the prior year period.Net income attributable to SPAR Group, Inc. was $0.5 million, or $0.02 per diluted share, compared to $2.7 million, or $0.12 per diluted share, in the first six months of fiscal 2025. The 2024 half-year includes a $5.7 million non-cash gain on sale.Adjusted EBITDA attributable to SPAR Group, Inc. was $2.8 million, or 3.9% of sales, compared to the prior year first half of $3.8 million, or 4.1% of sales. Financial Position as of June 30, 2025 The Company’s total liquidity at the end of the quarter was $15.1 million, with $13.9 million in cash and cash equivalents and $1.2 million of unused availability as of June 30, 2025.  For the six months ending June 30, 2025, net cash used by operating activities was $11.9 million. The Company ended the period with net working capital of $15.9 million on June 30, 2025. About SPAR Group, Inc. SPAR Group is a leading merchandising and marketing services company in North America, providing a broad range of services to retailers, manufacturers, and distributors. With more than 50 years of experience, merchandising across the United States and Canada, an average of 30,000+ store visits a week and long-term relationships with leading manufacturers and retail businesses, we provide specialized capabilities across North America. Our unique combination of scale, merchandising, and marketing expertise, combined with our unwavering commitment to excellence, separates us from the competition. For more information, please visit the SPAR Group’s website at http://www.sparinc.com. Cautionary Note Regarding Forward-Looking Statements This Press Release contains, and the above referenced recorded comments, will contain “forward-looking statements” within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, made by, or respecting, SPAR Group, Inc. (“SGRP”) and its subsidiaries (together with SGRP, “SPAR”, “SPAR Group” or the “Company”), filed in an Annual Report on Form 10-K/A by SGRP with the Securities and Exchange Commission (the “SEC”)  for its fiscal year ended December 31, 2024, and SGRP’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and statements as and when filed with the SEC (including the Quarterly Report, the Annual Report and the Proxy Statement, the Information Statement, the Second Special Meeting Proxy/Information Statement, each a “SEC Report”). “Forward-looking statements” are defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable federal and state securities laws, rules and regulations, as amended (together with the Securities Act and Exchange Act, the “Securities Laws”). The forward-looking statements made by the Company in this Press Release may include (without limitation) any expectations, guidance or other information respecting the pursuit or achievement of the Company’s corporate strategic objectives. The Company’s forward-looking statements also include, in particular and without limitation, those made in “Business”, “Risk Factors”, “Legal Proceedings”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report. You can identify forward-looking statements in such information by the Company’s use of terms such as “may”, “will”, “expect”, “intend”, “believe”, “estimate”, “anticipate”, “continue”, “plan”, “project” or similar words or variations or negatives of those words. You should carefully consider (and not place undue reliance on) the Company’s forward-looking statements, risk factors and the other risks, cautions and information made, contained or noted in or incorporated by reference into this Press Release, the Annual Report, the Proxy Statement and the other applicable SEC Reports that could cause the Company’s actual performance or condition (including its assets, business, clients, capital, cash flow, credit, expenses, financial condition, income, liabilities, liquidity, locations, marketing, operations, performance, prospects, sales, strategies, taxation or other achievement, results, risks, trends or condition) to differ materially from the performance or condition planned, intended, anticipated, estimated or otherwise expected by the Company (collectively, “expectations”) and described in the information in the Company’s forward-looking and other statements, whether expressed or implied. Although the Company believes them to be reasonable, those expectations involve known and unknown risks, uncertainties, and other unpredictable factors (many of which are beyond the Company’s control) that could cause those expectations to fail to occur or be realized or such actual performance or condition to be materially and adversely different from the Company’s expectations. In addition, new risks and uncertainties arise from time to time, and it is impossible for the Company to predict these matters or how they may arise or affect the Company. Accordingly, the Company cannot assure you that its expectations will be achieved in whole or in part, that the Company has identified all potential risks, or that the Company can successfully avoid or mitigate such risks in whole or in part, any of which could be significant and materially adverse to the Company and the value of your investment in SGRP’s Common Stock. You should also carefully review the risk factors described in the Annual Report (See Item 1A – Risk Factors) and any other risks, cautions or information made, contained or noted in or incorporated by reference into the Annual Report, the Proxy Statement or other applicable SEC Report. All forward-looking and other statements or information attributable to the Company or persons acting on its behalf are expressly subject to and qualified by all such risk factors and other risks, cautions and information. The Company does not intend or promise, and the Company expressly disclaims any obligation, to publicly update or revise any forward-looking statements, risk factors or other risks, cautions or information (in whole or in part), whether as a result of new information, risks or uncertainties, future events or recognition or otherwise, except as and to the extent required by applicable law. Media Contact: Investor Relations Contact:Ronald Margulis Sandy MartinRAM Communications Three Part Advisors908-272-3930 214-616-2207ron@rampr.com smartin@threepa.com    - Financial Statements Follow – SPAR Group, Inc. and SubsidiariesCondensed Consolidated Statements of Income(unaudited)(In thousands, except per share data)             Three Months Ended Six Months Ended  June 30 June 30  20252024 20252024           Net revenues $38,629 $43,402  $72,671 $92,799 Field Management  3,106  2,460   5,440  4,701 Direct Expenses  26,461  31,978   50,893  69,422 Gross profit  9,062  8,964   16,338  18,676 Selling, general and administrative expense  7,934  8,068   13,807  15,773 (Gain) loss on sale of business  -  1,411   -  (5,746) Depreciation and amortization  413  451   780  926 Operating income (loss)  715  (966)   1,751  7,723 Interest expense  589  590   1,058  1,066 Other expense (income), net  7  (296)   (2)  (288) Income (loss) before income tax expense  119  (1,260)   695  6,945 Income tax expense  120  934   234  2,327 Income (loss) from continuing operations  (1)  (2,194)   461  4,618            Discontinued Operations          Income from discontinued operations  -  552   -  1,381 Loss on disposal of business  -  (1,188)   -  (1,188) Income tax expense  -  (613)   -  (1,074) Net loss from discontinued operations  -  (1,249)   -  (881)            Net income (loss)  (1)  (3,443)   461  3,737 Net income attributable to non-controlling interest  -  (448)   -  (1,002) Net income (loss) attributable to SPAR Group, Inc. $(1) $(3,891)  $461 $2,735 Basic earnings (loss) per common share attributable to SPAR Group, Inc. from continuing operations $- $(0.12)  $0.02 $0.15 Diluted earnings (loss) per common share attributable to SPAR Group, Inc. from continuing operations $- $(0.11)  $0.02 $0.16 Basic loss per common share attributable to SPAR Group, Inc. from discontinued operations $- $(0.05)  $- $(0.04) Diluted loss per common share attributable to SPAR Group, Inc. from discontinued operations $- $(0.05)  $- $(0.04) Basic earnings (loss) per common share attributable to SPAR Group, Inc. $- $(0.17)  $0.02 $0.11 Diluted earnings (loss) per common share attributable to SPAR Group, Inc. $- $(0.16)  $0.02 $0.12 Weighted-average common shares outstanding– basic  23,470  23,786   23,460  23,670 Weighted-average common shares outstanding – diluted  23,499  24,010   23,532  23,873             SPAR Group, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(unaudited)(In thousands, except share and per share data)                   June 30,December 31,   20252024       Assets:       Current assets:       Cash and cash equivalents $13,929 $18,221 Accounts receivable, net  44,370  24,766 Prepaid expenses and other current assets  2,259  3,009 Total current assets  60,558  45,996 Property and equipment, net  2,965  2,015 Operating lease right-of-use assets  477  630 Goodwill  856  856 Intangible assets, net  775  841 Deferred income taxes  4,095  4,259 Other assets  1,834  1,834 Total assets $71,560 $56,431 Liabilities and equity       Current liabilities:       Accounts payable $10,632 $8,767 Accrued expenses and other current liabilities  7,016  3,533 Due to affiliates  -  - Customer incentives and deposits  1,589  892 Lines of credit and short-term loans  24,701  16,082 Current portion of long-term debt  500  500 Current portion of operating lease liabilities  180  276 Total current liabilities  44,618  30,050 Operating lease liabilities, net of current portion  297  353 Long-term debt  1,753  1,722 Total liabilities  46,668  32,125 Commitments and contingencies       Stockholders' equity:       Total stockholders’ equity  24,892  24,306 Total liabilities and stockholders’ equity $71,560 $56,431          SPAR Group, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(unaudited)(In thousands)           Six Months Ended  June 30  20252024Cash flows from operating activities:     Net income $461 $3,737 Adjustments to reconcile net income to net cash provided by operating activities     Depreciation and amortization  811  926 Amortization of operating lease right-of-use assets  174  310 Provision for expected credit losses  -  89 Deferred income tax expense  204  1,349 Gain on sale of business  -  (5,746) Share-based compensation expense  54  256 Changes in operating assets and liabilities:     Accounts receivable, net  (19,012)  (6,199) Prepaid expenses and other current assets  754  171 Change in deferred taxes due to deconsolidation  -  2,307 Accounts payable  1,859  2,493 Operating lease liabilities  (272)  (310) Accrued expenses, other current liabilities, due to affiliates and customer incentives and deposits  3,067  1,213 Net cash (used in) provided by operating activities of continuing operations  (11,900)  596 Net cash used in operating activities of discontinued operations  -  (426) Net cash (used in) provided by operating activities  (11,900)  170       Cash flows from investing activities     Purchases of property and equipment  (959)  (771) Proceeds from the sale of joint ventures  -  7,982 Net cash provided by (used in) investing activities of continuing operations  (959)  7,211 Net cash provided by investing activities of discontinued operations  -  3,751 Net cash (used in) provided by investing activities  (959)  10,962       Cash flows from financing activities     Borrowings under line of credit  69,136  69,117 Repayments under line of credit  (60,589)  (64,044) Proceeds from term debt  -  26 Repurchases of common stock  -  (1,800) Payments of notes to seller  -  (1,843) Payments to acquire noncontrolling interests  -  (250) Net cash provided by financing activities of continuing operations  8,547  1,206 Net cash used in financing activities of discontinued operations  -  (1,315) Net cash (used in) provided by financing activities  8,547  (109)       Effect of foreign exchange rate changes on cash  20  (48) Net change in cash, cash equivalents and restricted cash  (4,292)  10,976 Cash, cash equivalents at beginning of period  18,221  10,719 Cash, cash equivalents at end of period $13,929 $21,695        Reconciliation of GAAP to Non-GAAP Financial Measures Non-GAAP net income attributable to SPAR Group and related per share amounts represents net income attributable to SPAR Group adjusted for the removal of a one-time positive adjustment. Adjusted EBITDA represents net income before, as applicable from time to time, (i) depreciation and amortization of long-lived assets, (ii) interest expense (iii) income tax expense, (iv) Board of Directors incremental compensation expense, (v) restructuring, (vi) impairment, (vii) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations, (viii) and special items as determined by management. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted net income attributable to SPAR Group and per share amounts, and Adjusted EBITDA because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. Our calculation of these measures may not be comparable to similarly named measures reported by other companies. The following tables present a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to these measures for the periods presented:              SPAR Group, Inc. Net Income (Loss) attributable to SPAR Group, Inc. tonon-GAAP Net Income (Loss) attributable to SPAR Group, Inc. ReconciliationDiluted earnings per share attributable to SPAR Group, Inc. tonon-GAAP Diluted earnings per share attributable to SPAR Group, Inc. Reconciliation(In thousands)                            Three Months Ended Six Months Ended  June 30 June 30  2025 2024 2025 2024 Net income (loss) attributable to SPAR Group Inc. $(1) $(3,891) $461 $2,735 Adjustments to Consolidated EBITDA (net of taxes)*  146   1,473   220  (3,820)Adjusted net income (loss) attributable to SPAR Group, Inc. $145  $(2,418) $681 $(1,085)             Diluted income (loss) per common share attributable to SPAR Group, Inc. $-  $(0.16) $0.02 $0.12 Adjustments to consolidated EBITDA per share (net of taxes)  0.01   0.06   0.01  (0.17)Adjusted diluted income (loss) per common share attributable to SPAR Group, Inc. $0.01  $(0.10) $0.03 $(0.05)             * 2025 Q2 Adjustments to Consolidated EBITDA include $144K for review of strategic initiatives, $14K of legal costs, and $27K of stock based compensation. 2024 Q2 Adjustments to Consolidated EBITDA include $325K for review of strategic alternatives, $1,411K in loss on sale of businesses and $128K for stock based compensation. All of these are tax effected at 21% to compute the after tax value presented here.                         SPAR Group, Inc.Net Income (Loss) to Consolidated Adjusted EBITDA to Adjusted EBITDA attributable to SPAR Group, Inc. Reconciliation(In thousands)             Three Months Ended Six Months Ended  June 30 June 30  2025  2024  2025 2024 Consolidated net income (loss) $(1) $(2,194) $461  $4,618 Depreciation and amortization  413   451   780   926 Interest expense  589   590   1,058   1,066 Income tax expense  120   934   234   2,327 Other expense (income), net  7   (296)  (2)  (288)EBITDA of discontinued operations  -   556   -   1,475 Consolidated EBITDA  1,128   41   2,531   10,124 Review of strategic alternatives  144   325   210   655 Legal costs  14   -   14   - Gain (loss) on sale of business  -   1,411   -   (5,746)Share-based compensation  27   128   54   256 Consolidated Adjusted EBITDA  1,313   1,905   2,809   5,289 Adjusted EBITDA attributable to non controlling interest  -   (525)  -   (1,443)Adjusted EBITDA attributable to SPAR Group, Inc. $1,313  $1,380  $2,809  $3,846             Source: SPAR Group, Inc.

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