SPAR Group Jumps 20% After Launching Strategic Review
Merchandising services firm says all options are on the table as its stock price is out of whack with performance
SPAR Group, Inc. (US:SGRP) said Thursday that its board has begun a strategic review of its businesses and will consider all strategic alternatives, including a sale, merger, divestiture, recapitalization, going private, other strategic transactions, or continuing to operate as a public, independent company.
SPAR said it hired Lincoln International LLC as its financial adviser for the review.
SPAR said it has a strong balance sheet, 90% growth in revenue over the last five years and increased profit margins; the company's stock should be higher priced.
"The management team is aligned with the board that the best way to maximize shareholder value is to explore options that will unlock our potential and provide a platform for continued growth and success. Regardless of the process or outcome, the entire SPAR organization will remain committed to the execution of our work, growing our business, serving our clients and supporting our employees and joint venture partners," the company said.
SPAR said the review is open-ended, and there's no guarantee they'll take any action.
Last month SPAR reported $67.8 million in revenue, a one percent gain.
Gross profit was $12.9 million, or 19.1% of revenues, compared to $12.0 million, or 17.9% of revenues, in the prior-year quarter. Gross profit margins increased by 120 basis points due to strength in the Americas (up 260 basis points) and EMEA (up 120 basis points). Although positive total gross profit margin comparisons quarter over quarter, APAC negatively impacted margins (down 750 basis points) due to the prolonged pandemic lockdowns, the company said at the time.
The Americas were strengthened by strong US merchandising business, expansion in resets/remodels in Canada, and solid revenues in EMEA. This revenue strength was primarily offset by the impact of the APAC (China) pandemic lockdowns and pressure from changes in specific labor laws in the Americas (Mexico) in 2021," the company said.
"The total global pipeline is excellent with a significant number of multimillion-dollar opportunities, our global branding initiative is well underway, our pilot programs for crowdsourcing and digital merchandising are bringing new ideas and innovation to the marketplace, and we are capturing more share from our competitors. This is an exciting time for SPAR, and I appreciate how hard all of our associates work every day to create the energy and focus it takes to make a difference for our clients," SPAR's Chief Executive Officer said Thursday.
SPAR Group is a global merchandising and marketing services company.
SPAR shares rose 22% to $1.51 on Thursday.