SPAR Group Reports Financial Results for 2008 Fourth Quarter and Full Year


TARRYTOWN, N.Y., March 6, 2009 (GLOBE NEWSWIRE) -- SPAR Group, Inc. (Nasdaq:SGRP) today reported significant increases in net revenues and net income for the year ended December 31, 2008 compared with 2007, although results for the 2008 fourth quarter were below the prior year period.

For the 2008 fourth quarter, the company recorded net income of $467,000, equal to $0.02 per diluted share, which included an expense concession of $400,000 from an affiliate compared with net income of $1.5 million, or $0.08 per diluted share, for the same period in 2007. Net revenues were $16.0 million, compared with $18.4 million for the 2007 fourth quarter.

Operating income for the fourth quarter ended December 31, 2008 was $487,000, compared with $1.4 million in the corresponding period last year. Selling, general and administrative expenses for the 2008 fourth quarter were reduced to $5.0 million from $5.1 million a year ago.

Revenue in the U.S. for SPAR Group's 2008 fourth quarter was $8.0 million, compared with $9.4 million a year ago. U.S. operations reported net income of $973,000 for the 2008 fourth quarter, compared with $1.8 million for the same period last year.

International revenue for quarter ended December 31, 2008 was $8.0 million, compared with $9.0 million for the same quarter last year. The net loss in 2008 for the international division increased to $506,000 from a net loss of $359,000 last year, primarily due to additional tax expense resulting from a change in tax filing status in Japan.

For the year ended December 31, 2008, the company reported improvements in all areas. Revenues advanced 14.7% to $69.6 million from $60.7 million for the prior year. SPAR Group recorded net income of $102,000 for 2008, or $0.01 per share, which included $458,000 in non-recurring litigation costs, an expense concession of $900,000 from its affiliates, and $170,000 in tax benefits compared with a net loss of $2.5 million, or $0.13 per share, for 2007. Operating income for 2008 improved to $1.5 million, compared with an operating loss of $2.0 million in 2007. Selling, general and administrative expenses for 2008 were reduced 9.5% to $18.5 million from $20.5 million a year ago.

For the year ended December 31, 2008, revenue in the U.S. advanced 4.7% to $30.8 million from $29.4 million in 2007. The company posted net income of $215,000 from its U.S. operations for 2008, compared with a net loss of $1.5 million for 2007.

International revenues for the full 2008 year increased 24.0% to $38.8 million from $31.3 million for 2007. The international division posted 2008 net loss of $113,000, down sharply from a net loss of $979,000 last year.

"The improved results for the full year 2008 were attributable to continued growth in revenue and profitability over the prior year losses from both the U.S. and International operations," said Gary Raymond, president and chief executive officer. "Results for the year also benefitted from new business opportunities and continued close attention to cost controls throughout the company.

"The effects of the economic downturn were exacerbated for SPAR Group, as with many organizations, in the fourth quarter," Raymond said. "As our team works diligently to weather the current challenges, we believe our innovative, technology-driven products and services are needed more than ever today, and we are working closely with manufacturer and retailer customers to help them achieve their sales objectives on a cost effective basis."

About SPAR Group

SPAR Group, Inc. is a diversified international marketing services company, providing a broad array of services to help companies improve their sales, operating efficiency and profits at retail worldwide. The company provides in-store merchandising, in-store event staffing, RFID and other technology, as well as research, to manufacturers and retailers covering all product classifications and all classes of trade, including mass market, drug store, convenience store and grocery chains. The company operates throughout the United States and internationally in Japan, Canada, Turkey, South Africa, India, Romania, China, Lithuania, Latvia, Estonia, Australia and New Zealand. For more information, visit SPAR Group's Web site, www.sparinc.com.

Certain statements in this news release are forward-looking, and the company's actual results, performance and trends could differ materially from those indicated or implied by such statements as a result of various factors, including (without limitation), the continued strengthening of SPAR Group's selling and marketing functions, continued customer satisfaction and contract renewal, new product development, continued availability of capable dedicated personnel, continued cost management, the success of its international efforts, success and availability of acquisitions, availability of financing and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information regarding certain of these and other factors that could affect future results, performance or trends are discussed in SPAR Group's annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings made with the Securities and Exchange Commission from time to time.



                          SPAR Group, Inc.
                Consolidated Statements of Operations
                             (unaudited)
                (in thousands, except per share data)

                                Three Months Ended  Twelve Months Ended
                                ------------------  -------------------
                                Dec. 31,  Dec. 31,  Dec. 31,  Dec. 31,
                                  2008      2007      2008      2007
                                ------------------  ------------------

 Net revenues                   $ 15,976  $ 18,432  $ 69,611  $ 60,716
 Cost of revenues                 10,248    11,730    48,688    41,468
                                ------------------  ------------------
 Gross profit                      5,728     6,702    20,923    19,248

 Selling, general and
  administrative expenses          4,971     5,126    18,514    20,466

 Depreciation and amortization       270       197       939       768
                                ------------------  ------------------
 Operating income (loss)             487     1,379     1,470    (1,986)

 Interest expense                     74        68       328       315
 Other (income) expense             (194)       12       671        39
                                ------------------  ------------------
 Income (loss) before provision
  (benefit) for income
  taxes and minority interests       607     1,299       471    (2,340)

 Provision (benefit) for income
  taxes                              527       (63)      532       157
                                ------------------  ------------------
 Income (loss) before minority
  interest                            80     1,362       (61)   (2,497)

 Minority interest (income)
  expense                           (387)      (88)     (163)       47
                                ------------------  ------------------
 Net income (loss)              $    467  $  1,450  $    102  $ (2,544)
                                ==================  ==================

 Basic/diluted net income (loss)
  per common share:

 Net income (loss) -
  basic/diluted                 $   0.02  $   0.08  $   0.01  $  (0.13)
                                ==================  ==================

 Weighted average common shares
  - basic                         19,139    19,089    19,130    19,011
                                ==================  ==================

 Weighted average common shares
  - diluted                       19,179    19,298    19,315    19,011
                                ==================  ==================


                          SPAR Group, Inc.
                     Consolidated Balance Sheets
                             (unaudited)
           (in thousands, except share and per share data)

                                            December 31,  December 31,
                                                2008          2007
                                            --------------------------
 Assets
 Current assets:
  Cash and cash equivalents                 $     1,782   $     1,246
  Accounts receivable, net                       13,110        13,748
  Prepaid expenses and other current assets       1,446           975
                                            --------------------------
 Total current assets                            16,338        15,969

 Property and equipment, net                      1,804         1,528
 Goodwill                                           798           798
 Other assets                                     1,806         1,648
                                            --------------------------
 Total assets                               $    20,746   $    19,943
                                            ==========================

 Liabilities and stockholders' equity
 Current liabilities:
  Accounts payable                          $     4,589   $     3,631
  Accrued expenses and other current
   liabilities                                    4,911         3,981
  Accrued expense due to affiliates               1,398         2,107
  Customer deposits                                 582           580
  Lines of credit                                 5,494         6,119
                                            --------------------------
 Total current liabilities                       16,974        16,418


 Minority interest and other long-term
  liabilities                                       593           975
                                            --------------------------
 Total liabilities                               17,567        17,393

 Commitments and contingencies

 Stockholders' equity:
  Preferred stock, $.01 par value:
   Authorized shares-3,000,000
   Issued and outstanding shares-554,402              6            --
  Common stock, $.01 par value:
   Authorized shares-47,000,000
   Issued and outstanding shares-
    19,139,365 - December 31, 2008
    19,089,177 - December 31, 2007                  190           191
  Treasury stock                                     (1)           (1)
  Additional paid-in capital                     12,822        11,982
  Accumulated other comprehensive loss             (361)          (43)
  Accumulated deficit                            (9,477)       (9,579)
                                            --------------------------
 Total stockholders' equity                       3,179         2,550
                                            --------------------------
 Total liabilities and stockholders' equity $    20,746   $    19,943
                                            ==========================


            

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