SPAR Group, Inc. Reports Third Quarter Fiscal 2026 Results

(OTCQB:SGRP) SPAR Group, Inc. reported financial results for the periods ended September 30, 2026, highlighting a second consecutive quarter of profitability and improved gross margins. William Linnane, President and Chief Executive Officer, stated that the company returned to profitability for the second consecutive quarter, with positive net income, stronger gross margins year on year, and a 47% increase in Adjusted EBITDA on a year-to-date basis. After quarter-end, SPAR Group signed a three-year services agreement with a national retailer for merchandising, store remodeling, and temporary labor services, beginning in 2027. The company continues to invest in strategic initiatives, including a partnership with ReposiTrak, which has produced positive initial results from their joint Touchless Retail approach. Steven Hennen, Chief Financial Officer, noted that gross margin expanded to 18.9% in Q3 2026, and SG&A expenses declined 39% year-over-year to $5.6 million. SPAR Group reported positive net income for the second consecutive quarter and generated $1.4 million in Adjusted EBITDA in Q3 2026. Third quarter 2026 net revenues were $33.5 million, down 19.0% year-over-year. Gross margin was 18.9% of sales, up from 18.6% in the prior year. Selling, general and administrative expenses were $5.6 million, down 39.0% year-over-year. Net income was $50 thousand, or $0.00 per diluted share, compared to a net loss of ($8.8) million, or ($0.37) per diluted share, in Q3 2025. Non-GAAP adjusted diluted income per common share was $0.01 compared to adjusted diluted loss per share of $(0.17) in the prior year period. Adjusted EBITDA was $1.4 million, compared to $90 thousand in the prior year. For the nine months ended September 30, 2026, net revenues were $101 million, down 11.5% year-over-year. Gross margin was 21.3% of sales, up from 21.1% in the prior year. SG&A expenses declined 19.2% year-over-year to $18.6 million. Net loss for the nine months was ($94) thousand, or ($0.00) per diluted share, compared to a net loss of ($8.3) million, or ($0.35) per diluted share, in the prior year. Non-GAAP adjusted diluted income per share was $0.04 compared to adjusted diluted loss per share of ($0.14) in the prior year period. Adjusted EBITDA for the nine months was $4.3 million, up from $2.9 million in the prior year, a 47.3% increase. As of September 30, 2026, the company had $4.7 million in cash and cash equivalents. Net cash used by operating activities for the nine months ended September 30, 2026, was $7.2 million, attributed to working capital intensity from growth initiatives. The company adjusted its full-year 2026 financial outlook, projecting net revenues in the range of $125 to $130 million, gross margins of 20.0%-22.0%, and SG&A costs (excluding unusual items) of $23.5 to $25.0 million. In 2025, net revenues were $136 million, gross margin was 15.9%, and SG&A costs were $32.2 million. For Q3 2026, U.S. net revenues were $29,522 thousand (88.0% of total), and Canada net revenues were $4,022 thousand (12.0% of total). For the nine months ended September 30, 2026, U.S. net revenues were $89,290 thousand (88.4% of total), and Canada net revenues were $11,678 thousand (11.6% of total).