SPAR Group, Inc. (SGRP), a leading supplier of retail merchandising and other marketing services throughout the United States and internationally, announced that the Company expects to record annual revenue of approximately $100 million for the twelve month period ended December 31, 2012. In addition to increase in revenue of $27 million or 36%, compared to 2011 revenue, the company will be surpassing the ever important $100 million annual sales threshold. This important figure is also a measuring stick that tends to allow for investments from larger institutions.
The Company also announced more good news in the form of a $2.8 million contract with a Fortune 500 company that possesses a national retail footprint. Under the contract, SPAR will provide ongoing coverage for the stores' furniture category, including service and assembly in stores, as well as in the customers' homes or offices. During only the first two months of 2013, SPAR has announced new contracts in both its international and domestic business lines as they continue to improve earnings across their entire revenue platform.
The Company is currently trading at a very low valuation based on simple metrics such as; enterprise value/ sales (SPAR is 0.39) and market cap/sales (SPAR is 0.39). Industry comps typically trade at a value of approximately (1.0) for both metrics. If SPAR Group were to trade in-line with its competitors, it would warrant a stock price of approximately $3.75. These results offer a strong value proposition for investors seeking to unlock value of under followed microcap stocks, as well as those interested in emerging growth companies.
Perhaps the most exciting aspect of the company's growth is in its ability to simultaneous grow top line sales, bottom-line earnings, and overall market presence. The Company currently operates in 10 countries representing approximately 50% of the total world population and expects to continue to increase its market footprint throughout 2013. In addition to increased international operations, the Company expects to bolster relationships with global Fortune 500 companies by offering worldwide merchandising and marketing services.
SPAR's ability to continually integrate profitable contracts in underserved territories, while leveraging relationships with Fortune 500 companies has transformed the company into a market leader in the retail merchandising industry.
It appears as if management has finally found its stride and has the company poised for continued success. Based on their recent track record of achievements, I expect the company to continue its growth trajectory and surpass its 2012 revenue figure. I know I will be paying extra attention to their 2012 FYE earnings and remain optimistic for an even better 2013.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.