SPAR Group, Inc.

Good morning and welcome to the SPAR Group second quarter 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Philip Cooper with three-part advisors. Please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the SPAR Group's conference call to review second quarter results for 2022. Joining me on the call today are SPAR's Chief Executive Officer, Mike Matakounis, and the company's chief financial officer, Faye DeVries. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section at investors.sparinc.com. Information recorded on this call speaks only as of today, August 16th, 2022. So please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript readings. I would also like to remind you that the statements made in today's discussion that are not historical facts including statements or expectations or future events or future financial performance are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements by their nature are uncertain and outside of the company's control. Actual results may differ materially from those expressed or implied. Please refer to the earnings press release that was issued today for our disclosures on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP financial measures, and a reconciliation to the nearest GAAP measures can be found at the end of our earnings release. SPAR Groups assumes no obligations to publicly update or revise any forward-looking statements. Finally, the earnings press release we issued earlier today is posted on the investor relations section of our website, sparinc.com. A copy of the release has also been included in an 8K submitted to the SEC. And now, I would like to turn the call over to the company's CEO, Mike Matacunas. Mike?

Thank you, Philip, and good morning, everyone. I am pleased to share our second quarter results. and comment on a number of exciting achievements and work that is underway at SPAR. At the end of our prepared remarks today, we will open the line for questions from analysts and institutional investors. We filed our second quarter 10-Q yesterday and this morning distributed our earnings press release. Total revenue for the second quarter was $68 million. This reflects a 1% increase year over year. As a reminder, we'll report in three segments, America's, EMEA and Asia Pacific or APAC. I will comment on each one individually. Our Americas segment reported a record revenue of $53.3 million, an increase of 3.9%. Within this segment, the United States division grew by 16% and delivered a record $31.6 million in revenue. Our core merchandising services business grew by 27% in the second quarter with the addition of new clients. Our resets and remodels business in the United States has increased our client portfolio by 30% year-over-year and is now operating in multiple countries. Our Brazil joint venture revenue grew by 25% in the second quarter as we won new business and expanded client agreements. In addition, we measure the satisfaction of our clients in Brazil, and all of them continue to have excellent scores demonstrating the value of our services and relationships. Our EMEA segment, representing our joint venture in South Africa, delivered revenue of $9.1 million, an increase of 7.2% over the prior year. We have won new clients, renewed large multi-year agreements, and increased EMEA net income by 211%. Our Asia Pacific segment revenue was $5.4 million. This was a decline of approximately $2 million, or 27% in our APAC segment. $1.6 million of this was due to the 60-day pandemic lockdown in China. While the top-line impact was relatively minor, we carried expenses during the lockdown per the government mandate. Perhaps another way to look at the second quarter revenue for us is without the lockdown in China and our cycling of the labor law change in Mexico that we noted in 2021, revenue would have grown by more than 10%. With a strong revenue performance, let's turn our attention to gross margins. Our second quarter gross margin grew to a solid 19.1% compared to 17.9% last year. This reflects 120 basis point improvement on a consolidated basis. Our America segment, which represents 79% of the total business in the second quarter, improved gross margin by 260 basis points. This is the result of our continued focus on pricing, merchandiser productivity, and internal leverage. Our EMEA segment reported 120 basis point improvement in gross margins while continuing to grow. I've communicated over the last few quarters that we are focused on gross profit. I am pleased with the results to date. I believe there is more opportunity to improve margins, and we will continue our pursuit of this. Relative to the net income, we reported a net income of $1.15 million. This is an increase of 123% over the prior year. The improvement is both a result of our improved profitability and the increase in in attributable net income to our wholly owned business. In total, our business is growing, our gross margins have improved, our consolidated net income is up, and our pipeline is strong. After Faye covers the detailed financial results for second half of 2022, I will come back and share key strategic wins and then speak about my view on our opportunity pipeline and progress. With that, I will turn the call over to Faye DeVries, our Chief Financial Officer, to review our results. Faye?