SPAR Group (NASDAQ:SGRP), a diversified international merchandising and marketing services company continues to add revenue to its already impressive international platform. The company recently announced that their Japanese subsidiary, SPAR FM Japan, has signed a $2.5 million annual contract with a Fortune 500 consumer goods company while adding an estimated 1,500 store locations throughout Japan. More importantly, the addition of the subsidiary will continue to diversify SPAR Group's vast international revenue mix as they now operate in nearly a dozen international markets.
SPAR Group has established itself as a legitimate growth stock that demands interest from knowledgeable value investors. The Company appears to be well positioned to meet and or exceed its 2012 guidance of $90 million, while steadily increasing earnings and market share. Management has made the usually difficult task of diversifying revenue seem downright routine. Their proven ability to seamlessly add and integrate profitable subsidiaries, while simultaneously expanding its domestic operations; the company seems poised to continue its overall growth trajectory. The bulk of the company's revenue is comprised via Fortune 500 companies such as Wal-Mart (NYSE:WMT), Target Corp. (NYSE:TGT) P&G (NYSE:PG), and Staples (NASDAQ:SPLS).
This emerging growth company has continued to thrive thanks in large part to their syndicated services, including product reordering and replenishment, ensuring the availability of products for distribution, adding new products, designing and implementing store planogram schematics, and in-store displays.
Over the last several quarters management has consistently increased revenue, profitability, market presence and earnings over the last several quarters. In fact, for the nine months ended September 30, 2012 revenue increased 44% to $71.8 million while consolidated net income attributable to SPAR Group, Inc. increased 59% to $1.6 million, or $0.07 per diluted share. Management has also signed new contracts and expanded South African locations that will add a combined $20 million in revenue over next 12 months. These numbers do not take into consideration the fourth quarter, which due to holiday shopping is traditionally the strongest, and should mitigate any risk of a near-term downturn. Lastly, Spar possesses a strong and experienced management team has successfully balanced cost-controls while recording revenue growth.
If the company is able to continue on this path, it would appear that 2013 could be a monumental year for the emerging retail company, with annual revenue potentially reaching the critical $100 million threshold. With so much opportunity available to the company, now may be an ideal time for value investors to seriously evaluate a potential investment.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.