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SPAR Group, Inc. Reports First Quarter 2025 Results

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SPAR Group (NASDAQ: SGRP) reported its Q1 2025 financial results, marking its first quarter without international joint ventures. The company achieved $34.0 million in net revenues with a 21.4% gross margin, up from 19.7% year-over-year. Net income from continuing operations was $0.5 million ($0.02 per share), compared to $6.6 million in Q1 2024, which included a $7.2 million non-cash gain.

The company's U.S. and Canada business saw 6% topline growth and improved operating margins. SPAR maintains a strong pipeline exceeding $200 million in potential future business. The company reported total liquidity of $23.4 million, including $17.9 million in cash and $5.5 million in unused availability. Notable events include the termination of the Highwire Capital merger agreement due to funding issues.

SPAR Group (NASDAQ: SGRP) ha comunicato i risultati finanziari del primo trimestre 2025, segnando il primo trimestre senza joint venture internazionali. L'azienda ha registrato $34,0 milioni di ricavi netti con un margine lordo del 21,4%, in aumento rispetto al 19,7% dell'anno precedente. L'utile netto dalle operazioni continuative è stato di $0,5 milioni ($0,02 per azione), rispetto ai $6,6 milioni del primo trimestre 2024, che includevano una plusvalenza non monetaria di $7,2 milioni.

Il business negli Stati Uniti e in Canada ha registrato una crescita del fatturato del 6% e un miglioramento dei margini operativi. SPAR mantiene un solido portafoglio ordini con potenziali affari futuri superiori a $200 milioni. L'azienda ha riportato una liquidità totale di $23,4 milioni, di cui $17,9 milioni in contanti e $5,5 milioni di disponibilità non utilizzata. Tra gli eventi significativi, la risoluzione dell'accordo di fusione con Highwire Capital a causa di problemi di finanziamento.

SPAR Group (NASDAQ: SGRP) informó sus resultados financieros del primer trimestre de 2025, marcando su primer trimestre sin joint ventures internacionales. La compañía alcanzó $34.0 millones en ingresos netos con un margen bruto del 21.4%, superior al 19.7% interanual. El ingreso neto de operaciones continuas fue de $0.5 millones ($0.02 por acción), comparado con $6.6 millones en el primer trimestre de 2024, que incluía una ganancia no monetaria de $7.2 millones.

El negocio en EE.UU. y Canadá experimentó un crecimiento del 6% en ingresos y una mejora en los márgenes operativos. SPAR mantiene una sólida cartera con más de $200 millones en posibles negocios futuros. La compañía reportó una liquidez total de $23.4 millones, incluyendo $17.9 millones en efectivo y $5.5 millones en disponibilidad no utilizada. Entre los eventos destacados está la terminación del acuerdo de fusión con Highwire Capital debido a problemas de financiamiento.

SPAR Group (NASDAQ: SGRP)� 2025� 1분기 재무 실적� 발표했으�, 이번 분기� 국제 합작 투자가 없는 � 분기입니�. 회사� 순매� 3,400� 달러21.4%� 총이익률� 기록했으�, 이는 전년 동기 19.7%에서 상승� 수치입니�. 계속 영업에서� 순이익은 50� 달러(주당 0.02달러)�, 2024� 1분기� 660� 달러(비현� 이익 720� 달러 포함)왶 비교됩니�.

미국� 캐나� 사업부� 매출 6% 성장� 운영 마진 개선� 보였습니�. SPAR� 2� 달러 이상� 잠재� 미래 사업 기회� 보유하고 있습니다. 회사� � 유동� 2,340� 달러� 보고했으�, � � 현금 1,790� 달러왶 미사� 가능액 550� 달러가 포함되어 있습니다. 주요 사건으로� 자금 문제� 인해 Highwire Capital과의 합병 계약 해지가 있습니다.

SPAR Group (NASDAQ : SGRP) a publié ses résultats financiers du premier trimestre 2025, marquant son premier trimestre sans coentreprises internationales. La société a réalisé 34,0 millions de dollars de revenus nets avec une marge brute de 21,4%, en hausse par rapport à 19,7% l'année précédente. Le bénéfice net des activités poursuivies s'est élevé à 0,5 million de dollars (0,02 dollar par action), contre 6,6 millions de dollars au premier trimestre 2024, qui comprenait un gain non monétaire de 7,2 millions de dollars.

Les activités aux États-Unis et au Canada ont connu une croissance du chiffre d'affaires de 6% et une amélioration des marges opérationnelles. SPAR dispose d'un solide portefeuille avec un potentiel d'affaires futures dépassant 200 millions de dollars. La société a déclaré une liquidité totale de 23,4 millions de dollars, comprenant 17,9 millions de dollars en liquidités et 5,5 millions de dollars de lignes de crédit non utilisées. Parmi les événements notables figure la résiliation de l'accord de fusion avec Highwire Capital en raison de problèmes de financement.

SPAR Group (NASDAQ: SGRP) meldete seine Finanzergebnisse für das erste Quartal 2025 und verzeichnete damit das erste Quartal ohne internationale Joint Ventures. Das Unternehmen erzielte 34,0 Millionen US-Dollar Nettoumsatz bei einer Bruttomarge von 21,4%, gegenüber 19,7% im Vorjahreszeitraum. Der Nettogewinn aus fortgeführten Geschäftsbereichen betrug 0,5 Millionen US-Dollar (0,02 US-Dollar je Aktie), verglichen mit 6,6 Millionen US-Dollar im ersten Quartal 2024, das einen nicht zahlungswirksamen Gewinn von 7,2 Millionen US-Dollar enthielt.

Das Geschäft in den USA und Kanada verzeichnete ein Umsatzwachstum von 6% und verbesserte operative Margen. SPAR verfügt über eine starke Pipeline mit einem Potenzial von über 200 Millionen US-Dollar für zukünftige Geschäfte. Das Unternehmen meldete eine Gesamtl liquidität von 23,4 Millionen US-Dollar, darunter 17,9 Millionen US-Dollar in bar und 5,5 Millionen US-Dollar ungenutzte Verfügbarkeit. Zu den bemerkenswerten Ereignissen zählt die Beendigung der Fusionsvereinbarung mit Highwire Capital aufgrund von Finanzierungsproblemen.

Positive
  • None.
Negative
  • Net income decreased significantly to $0.5M from $6.6M year-over-year
  • Merger agreement with Highwire Capital terminated due to funding failure
  • Delayed 10-K and 10-Q filings
  • Negative operating cash flow of $4.0 million for the quarter
  • Adjusted EBITDA declined to $1.5M (4.4% of sales) from $2.5M (5.0% of sales)

Insights

SPAR's Q1 shows solid domestic growth and operational improvements, offset by merger failure and filing delays.

SPAR Group delivered $34.0 million in revenue for Q1 2025, achieving 6% topline growth in their US and Canada operations following the divestiture of all international joint ventures. The company posted $0.5 million in net income from continuing operations ($0.02 EPS), a notable decrease from the $0.26 EPS in Q1 2024, though last year's results included a $7.2 million non-cash gain on sale.

The company's gross margin improved to 21.4% compared to 19.7% in the year-ago period, demonstrating better operational efficiency. However, Adjusted EBITDA margins declined to 4.4% from 5.0% last year.

Two significant developments overshadowed these results. First, the planned merger with Highwire Capital fell through due to financing issues, and management is now pursuing termination fees. Second, the company acknowledged delayed SEC filings, with the 10-K filing delay attributed to anticipated privatization and the subsequent 10-Q delay being a cascading effect.

Liquidity remains solid with $23.4 million total worldwide liquidity, including $17.9 million in cash and $5.5 million in unused credit availability. Working capital stood at $15.7 million. However, operating cash flow was negative at -$4.0 million for the quarter, a potential concern that wasn't addressed in management commentary.

Management highlighted a pipeline of over $200 million in potential future business opportunities, signaling confidence in their refocused North American strategy despite the setback with the terminated merger. The emphasis on upcoming announcements suggests management is attempting to redirect investor attention toward future growth prospects rather than dwelling on the failed transaction.

Strong Initial Quarter Without International Joint Ventures

AUBURN HILLS, Mich., July 17, 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 months ended March 31, 2025.

Mike Matacunas, the Company’s President and Chief Executive Officer, commented, “This is the first quarter we are reporting without any international joint ventures. Our U.S. and Canada business achieved 6% topline growth, improved operating margins, and reduced SG&A, resulting in $0.5 million net income from continuing operations or $0.02 EPS. In addition, through our focus on the U.S. and Canada, we have the largest pipeline of opportunity in SPAR’s history, with more than $200 million of future business to win. I remain bullish on our future and plans.

“Outside of our solid performance, there are two other items that merit comment. The first is the termination of the merger agreement with Highwire Capital due to their inability to produce the funds to close. As a shareholder, I was disappointed in this outcome and proud of the potential value created for our shareholders in the deal. Our Board remains committed to pursuing the termination fee from Highwire Capital or something of greater value for our shareholders.

“The second item is our delayed filings. Our 10-K filing was late because we expected to be private and the 10-Q that we are filing today is late because one follows the other. We will be current once this is filed with all filings and our shareholders should be enthusiastic about our performance.

“Lastly, we are now positioned to make some really exciting announcements over the next six months, and our second quarter performance looks good. I want to thank the employees of SPAR and our Board who have positioned the company for the next phase of success. Now that we have reset our footing, I am excited about our future,� said Matacunas.

First Quarter 2025 Highlights

  • Net revenues were $34.0 million.
  • Consolidated Gross Margin was 21.4% of sales, compared to 19.7% of sales in the prior year period.
  • Net income attributable to SPAR Group, Inc. from continuing operations was $0.5 million, or $0.02 per diluted share, compared to $6.6 million, or $0.26 per diluted share in the prior year quarter. The2024 first quarter includes a $7.2 million non-cash gain on sale and other smaller non-recurring or non-cash items.
  • Adjusted EBITDA attributable to SPAR Group, Inc. was $1.5 million, or 4.4% of sales, compared to the prior quarter of $2.5 million, or 5.0% of sales.

Financial Position as of March 31, 2025

The Company’s total worldwide liquidity at the end of the quarter was $23.4 million, with $17.9 million in cash and cash equivalents and $5.5 million of unused availability as of March 31, 2025. For the three months ended March 31, 2025, net cash used by operating activities was $4.0 million. The Company ended the quarter with net working capital of $15.7Dz on March 31, 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, separate us from the competition. For more information, please visit the SPAR Group’s website at .

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 theSecurities and Exchange Commission(the “SEC�) for its fiscal year endedDecember 31, 2024, and SGRP’sQuarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and statements as and when filed with theSEC(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 MargulisSandy Martin
RAM CommunicationsThree Part Advisors
908-272-3930214-616-2207
[email protected][email protected]


- Financial Statements Follow �


SPAR Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited)
(In thousands, except per share amounts)
Three Months Ended
March 31
20252024
Net revenues$34,041$49,396
Field Management2,3342,240
Direct Expenses24,43237,444
Cost of Revenues26,76639,684
Gross profit7,2759,712
Selling, general and administrative expense5,8727,723
(Gain) on sale of business-(7,157)
Depreciation and amortization367475
Operating income1,0368,671
Interest expense469475
Other expense (income), net(9)7
Income before income tax expense5768,189
Income tax expense1141,393
Income from continuing operations4626,796
Discontinued Operations-
Income from discontinued operations-846
Income tax expense-(461)
Net income from discontinued operations-385
Net income4627,181
Net income attributable to non-controlling interest-(554)
Net income attributable to SPAR Group, Inc.$462$6,627
Basic earnings per common share attributable to SPAR Group, Inc. from continuing operations$0.020.26
Diluted earnings per common share attributable to SPAR Group, Inc. from continuing operations$0.02$0.26
Basic earnings per common share attributable to SPAR Group, Inc. from discontinued operations$-$0.02
Diluted earnings (loss) per common share attributable to SPAR Group, Inc. from discontinued operations$-$0.02
Basic income per common share attributable to SPAR Group, Inc.$0.02$0.28
Diluted income per common share attributable to SPAR Group, Inc.$0.02$0.28
Weighted-average common shares outstanding� basic23,45023,817
Weighted-average common shares outstanding � diluted23,55224,013



SPAR Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
(In thousands, except share and per share data)
March 31December 31,
20252024
Assets:
Current assets:
Cash and cash equivalents$17,942$18,221
Accounts receivable, net38,21924,766
Prepaid expenses and other current assets2,9013,009
Total current assets59,06245,996
Property and equipment, net2,9102,015
Operating lease right-of-use assets537630
Goodwill856856
Intangible assets, net808841
Deferred income taxes4,1574,259
Other assets1,8341,834
Total assets$70,164$56,431
Liabilities and equity
Current liabilities:
Accounts payable$13,790$8,767
Accrued expenses and other current liabilities5,8653,533
Customer incentives and deposits2,655892
Lines of credit and short-term loans20,37316,082
Current portion of long-term debt500500
Current portion of operating lease liabilities219276
Total current liabilities43,40230,050
Operating lease liabilities, net of current portion318353
Long-term debt1,7381,722
Total liabilities45,45832,125
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value per share: 47,000,000 shares
authorized as of March 31, 2025 and December 31, 2024;
23,449,701 shares issued and outstanding as of March 31, 2025
and December 31, 2024, respectively
234234
Treasury stock, at cost, 1,205,485 shares as of March 31, 2025 and as of December 31, 2024(2,075)(2,075)
Additional paid-in capital19,91319,886
Accumulated other comprehensive loss(1,287)(1,198)
Retained earnings7,9217,459
Total stockholders' equity attributable to SPAR Group, Inc.24,70624,306
Total liabilities and stockholders� equity$70,164$56,431



SPAR Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
Three Months Ended
March 31
20252024
Cash flows from operating activities:
Net income$462$7,181
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization382475
Amortization of operating lease assets92176
Provision for expected credit losses-61
Deferred income tax expense1021,088
Share-based compensation expense27128
Gain on sale of business-(7,157)
Changes in operating assets and liabilities, net of business disposals:
Accounts receivable(11,929)(6,288)
Prepaid expenses and other assets108(283)
Accounts payable5,0712,105
Operating lease liabilities(185)(176)
Accrued expenses, other current liabilities and customer incentives and deposits1,8264,610
Net cash (used in) provided by operating activities of continuing operations(4,044)1,920
Net cash used in operating activities of discontinued operations-(1,305)
Net cash (used in) provided by operating activities(4,044)615
Cash flows from investing activities:
Cash transferred in sale of business-(446)
Purchases of property and equipment and capitalized software(525)(431)
Net cash used in investing activities of continuing operations(525)(877)
Net cash used in investing activities of discontinued operations-(1)
Net cash used in investing activities(525)(878)
Cash flows from financing activities:
Borrowings under line of credit31,55325,780
Repayments under lines of credit(27,263)(23,657)
Payments on term debt-(1,503)
Payments of notes to seller-(1,120)
Net cash provided by financing activities of continuing operations4,290(500)
Net cash used in financing activities of discontinued operations-6,844
Net cash provided by financing activities4,2906,344
Effect of foreign exchange rate changes on cash-(171)
Net increase (decrease) in cash and cash equivalents(279)5,910
Cash and cash equivalents at beginning of year18,22110,719
Cash and cash equivalents at end of year17,94216,629
Less cash and cash equivalents of discontinued operations-11,203
Cash and cash equivalents of continuing operations$17,942$5,426


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 attributable to SPAR Group, Inc. to
Adjusted Net income attributable to SPAR Group, Inc. Reconciliation
Diluted income per common share attributable to SPAR Group, Inc. to
Adjusted Diluted income per common share attributable to SPAR Group, Inc. Reconciliation
(In thousands)
Three Months Ended
March 31
20252024
Net Income attributable to SPAR Group Inc.$462$6,627
Adjustments to Consolidated EBITDA (net of taxes)*73(5,292)
Adjusted Net income attributable to SPAR Group, Inc.$535$1,335
Diluted income per common share attributable to SPAR Group, Inc.$0.02$0.28
Adjustments to Consolidated EBITDA per share (net of taxes)-(0.22)
Adjusted Diluted income per common share attributable to SPAR Group, Inc.$0.02$0.06
* 2025 Adjustments to Consolidated EBITDA include $66K for review of strategic initiatives and $27K for stock based compensation. 2024 Adjustments to Consolidated EBITDA include $330K for review of strategic initiatives, $(7,157)K gain on sale, and $128K of stock based compensation.



SPAR Group, Inc.
Net Income to Consolidated Adjusted EBITDA to Adjusted EBITDA attributable to SPAR Group, Inc.
Reconciliation
(In thousands)
Three Months Ended
March 31
20252024
Consolidated net income from continuing operations$462$6,796
Depreciation and amortization from continuing operations367475
Interest expense from continuing operations469475
Income tax expense from continuing operations1141,393
Other expense (income) from continuing operations(9)7
EBITDA of Discontinued Operations-937
Consolidated EBITDA1,40310,083
Review of Strategic Alternatives66330
Gain on Sale of Business-(7,157)
Share Based Compensation27128
Consolidated Adjusted EBITDA1,4963,384
Adjusted EBITDA attributable to non controlling interest-(918)
Adjusted EBITDA attributable to SPAR Group, Inc.$1,496$2,466


Source: SPAR Group, Inc.


FAQ

What were SPAR Group's (SGRP) Q1 2025 earnings results?

SPAR Group reported net revenues of $34.0 million, net income of $0.5 million ($0.02 per share), and Adjusted EBITDA of $1.5 million (4.4% of sales) in Q1 2025.

Why did SPAR Group's merger with Highwire Capital fall through?

The merger agreement was terminated due to Highwire Capital's inability to produce the necessary funds to close the deal. SPAR's Board is pursuing the termination fee or greater value for shareholders.

What is SPAR Group's current financial position as of March 31, 2025?

SPAR Group had total liquidity of $23.4 million, including $17.9 million in cash and $5.5 million in unused availability, with net working capital of $15.7 million.

How did SPAR Group's U.S. and Canada business perform in Q1 2025?

The U.S. and Canada business achieved 6% topline growth with improved operating margins and reduced SG&A expenses.

What is SPAR Group's business pipeline outlook?

SPAR Group reports having their largest pipeline of opportunity in company history, with over $200 million of future business potential to win.

Why were SPAR Group's regulatory filings delayed in 2025?

The 10-K filing was delayed due to expectations of going private through the Highwire merger, and the Q1 10-Q filing was consequently delayed as it follows the annual report.
Spar Group Inc

NASDAQ:SGRP

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22.28M
10.31M
68.15%
13.4%
0.42%
Specialty Business Services
Services-business Services, Nec
United States
AUBURN HILLS