SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
AMENDMENT NO. 1
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the second quarterly period ended July 2, 1999
Commission file number: 0-27824
SPAR GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 33-0684451
State of Incorporation IRS Employer Identification No.
19900 MacArthur Blvd., Suite 900, Irvine, CA 92612
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (949) 476-2200
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: [ X ] Yes
On July 30, 1999 there were 18,153,270 shares of Common Stock outstanding.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
OPERATING EXPENSES
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The following table sets forth the operating expenses as a percentage of net
revenues for the periods indicated:
This table was referred to, but omitted in originally filed document
<TABLE>
<CAPTION>
Quarter Ended
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July 3, 1998 July 2, 1999
---------------- --------------- Change
(amount in millions) Amount % Amount % %
------- ------- ------- ------ --------
<S> <C> <C> <C> <C> <C>
Field service costs $ 28.2 83.2% $ 19.6 92.5% (30.5)%
Selling expenses 2.1 6.2 1.1 5.2 (47.5)
General & Administrative expenses 3.4 10.0 2.7 12.7 (20.6)
Depreciation & amortiation 0.3 0.9 0.3 1.4 (0.0)
------- ------- ------- ------ --------
Total Operating Expenses $ 34.0 100.3% $ 23.7 111.8% (30.30)%
======= ======= ======= ====== ========
</TABLE>
For the second quarter of 1999, field service costs decreased $8.6 million, or
30.5%, to $19.6 million, as compared to $28.2 million in the second quarter of
1998. Field service costs are comprised principally of field labor and related
costs and overhead expenses required to provide services to both shared and
dedicated service clients.
As a percentage of net revenues, field service costs in the second quarter of
1999 increased to 92.5% from 83.2% in the same period last year. The increase
in field service costs as a percentage of net revenues in the second quarter of
1999 was due primarily to the fixed cost component of field service costs.
However, total field service costs decreased by $8.6 million due to both
declining net revenues and more efficient variable field deployment.
For the quarter ended July 2, 1999, selling expenses decreased $1.0 million, or
47.6%, to $1.1 million compared to $2.1 million in the same period last year.
This decrease in costs was a result of a reduction in salaries and related
expenses resulting from a reduction in personnel. As a percentage of net
revenues, selling expenses decreased to 5.2% in the second quarter of 1999,
compared to 6.2% in the second quarter of 1998.
General and administrative expenses decreased 20.6% in the second quarter of
1999 to $2.7 million, compared to $3.4 million in the same period of 1998. The
decrease in general and administrative costs was due primarily to incentive
liabilities recorded in the first two quarters of 1998 and salary and wage staff
reductions during the quarter ended July 2, 1999. This decrease was partially
offset by a charge for pre-merger transaction costs of $0.9 million.
OTHER INCOME
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Interest income decreased in the second quarter of 1999, as compared to the
second quarter of 1998, due to lower cash balances available for investment in
1999.
Interest expense increased in the second quarter of 1999 due to borrowing on the
bank revolving line of credit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIA MERCHANDISING SERVICES, INC.
(Registrant)
By: /s/ Cathy L. Wood
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Cathy L. Wood
Executive Vice President and
Chief Financial Officer
By: /s/ David J. Faulds
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David J. Faulds
Vice President
Corporate Controller
Dated: September 24, 1999
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