SPAR Group, Inc.

Good morning and welcome to the SPAR Group third quarter 2023 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 touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Sandy Martin, three-part advisor. Please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you joining us for Spar Group, Inc.' 's conference call to review 2023 third quarter results. Joining me on the call today are Spar's Chief Executive Officer, Mike Matacunas, and the company's Chief Financial Officer, Antonio Calistopato. 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. The information recorded on this call speaks only as of today, so please be advised that any time sensitive information may no longer be accurate as of the date of any replay or transcript reading. I would also like to remind you that the statements made today in today's discussion that are not historical fact, including statements, expectations, 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 today's earnings press release 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 reconciliations to the nearest GAAP measures can be found at the end of our earnings release. Spar Group assumes no obligation to update or revise any forward-looking statements publicly. Finally, the earnings press release we issued earlier today is posted on the investor relations section of our website at sparinc.com. And now I would like to turn the call over to the company's CEO, Mike Metakounis. Mike?

Thank you, Sandy, and good morning, everyone. I am pleased to share our third quarter results. At the end of our prepared remarks today, we will open the line for questions from analysts and institutional investors. On a consolidated basis, our third quarter revenue was down 3.6%. Our results reflect growth in our merchandising services, strong progress in distribution services, and the beginning of a recovery in our remodel services. For merchandising, our U.S. merchandising business grew by 27%. Canada merchandising grew by 23%. Mexico by 28%. And Brazil by 10%. We believe there is material incremental opportunity and a growing addressable market as more brands and retailers turn to us for the last product touch and driving consumer experience. We bring both scale and speed. The great strength in our merchandising services business was offset on a consolidated basis by our Asia-Pacific businesses, our smaller joint ventures, and the U.S. remodel business is now beginning to recover in the current quarter after slowing earlier in the year. As a reminder, I shared on prior calls that some of our remodel clients had pushed out or delayed remodel work. We expect this to fully recover over the next 12 months, and we are positioned to take even more share as we look forward. Our distribution business had an exceptionally strong third quarter. We launched this business 24 months ago, and we are building momentum each quarter. While it is on a base of small numbers, it was up 10x in the third quarter over the prior period last year. Our Asia-Pacific business represents 8.4% of our revenue, but declined 21% in the third quarter. EMEA, which is comprised of South Africa, which now makes up 11.7% of our revenue, declined 12%, making our performance in the Americas which is the United States, Canada, Mexico, and Brazil, the cornerstone of our results. Against the lower consolidated revenue, we delivered 4% more margin dollars and an incremental 150 basis points of gross margin percent in the quarter. This is our fourth successive quarter in a row of gross margin percent improvement. For the third quarter, the U.S. merchandising gross margin was up 290 basis points. South Africa, while challenged on revenue, increased gross margin percent by 90 basis points, and Brazil delivered a 230 basis point improvement over the same period last year. I am pleased with our continued progress and profitability and our ability to successfully recruit, retain, and reward great talent to serve our clients. As a note, we are up 140 basis points year-to-date on consolidated gross margin percent. Consolidated EBITDA was approximately $2.1 million against approximately $2.2 million for the same period last year. Within this number, you will note that our attributable adjusted EBITDA is up 21.5% year-on-year for the quarter. In short, our shareholders own a greater percentage of the EBITDA than last year. This is not a single quarter change. Attributable adjusted EBITDA is up 23.8% for the first nine months of the year. Lastly, operating income was 1.5 million, and our consolidated net income was 1.1 million compared to 900,000 for the same period in 2022. I've noted in prior calls that clients had delayed remodel and transformation projects early in the year. We began to see the first signs of recovery in this business in the third quarter. While the U.S. remodel business was still softer than the same period last year, it was up 60% over the second quarter this year. One of the other exciting developments in this market is the growth of of this service in Canada. Our expectations for Canada remodel work in 2023 included growth of over 400% for this part of our business. Again, I expect the remodel and transformation service business to take another nine to 12 months to fully recover, but retailers are all looking for ways to engage the consumer, refreshing the assortments in the store, changing the footprint to enable directly online fulfillment, and exploring alternative checkout solutions. We believe there is great potential in this market, and this will be a sustainable, repeatable business for SPAR. After Antonio covers the detailed financial results, I will come back and share additional thoughts and insights about the business. With that, I will turn the call over to Antonio to review the results.