Q4 2021 SPAR Group Inc Earnings Call

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Good day and welcome to the SPAR Group Fourth Quarter and Full Year 2021 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by

Good day and welcome to the spar group fourth quarter and full year 2021 financial results conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Please note this event is being recorded. I would now like to turn the conference over to Sandy Martin, Investor Relations. Please go ahead.

Note. This event is being recorded I would now like to turn the conference over to Sandy Martin Investor Relations. Please go ahead.

Sandy Martin: Thank you, Operator, and good morning, everyone. We appreciate you joining us for the SPAR Group INCs conference call to review 4th quarter and fiscal year results for 2021.

Thank you operator, and good morning, everyone. We appreciate you joining us for the Spar Group, Inc Conference call to review fourth quarter and fiscal year results for 2021.

Sandy Martin: Joining me on the call today are Spar's Chief Executive Officer, Mike Madicunas, and the company's Chief Financial Officer, Fay DeVries.

Joining me on the call today are spars, Chief Executive Officer, Mike Medical units and the company's Chief Financial Officer Fei degrees.

Sandy Martin: 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.sparring.com.

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 and then investors start sparring dot com.

Sandy Martin: information recorded on this call speaks only as of today, March 29, 2022. So please be advised that any time sensitive information may no longer be accurate as of the date of any replay or transcript reading.

Information recorded on this call speaks only as of today March 29, 2022. So please be advised that any time sensitive information may no longer be accurate as of the date of any replay or transcript reading.

Sandy Martin: I would also like to remind you that the statements made in today's discussion that are not historically facts, including statements or expectations or future events or future financial performance or forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

I would also like to remind you that the statements made in today's discussion that are not historically facts, including statements of our 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 law.

1995.

Sandy Martin: 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.

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.

Sandy Martin: Management may also refer to non- GAAP financial measures, and the reconciliations to the nearest GAAP measures can be found at the end of our earnings release.

Management May also refer to non-GAAP financial measures and the reconciliations to the nearest GAAP measures can be found at the end of our earnings release spread.

Sandy Martin: SPAR group assumes no obligation to publicly update or revise any forward-looking state

Spar group assumes no obligation 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 at sparring Dot com.

Sandy Martin: Finally, the Earnings Press release we issued earlier today is posted on the Investor Relations section of our website at sparring.com.

Mike Meicunus: A copy of the release has been included in an 8K submitted to the FCC. And now I would like to turn the call over to the company's CEO , Mike Madicunas. Mike. Thank you, Sam.

A copy of the release has been included in an 8-K submitted to the SEC and now I would like to turn the call over to the company's CEO , Mike Medical units Mike.

Thank you Sandy and good morning, everyone.

Mike: Before I provide the highlights of our fourth quarter performance, I would like to take a moment to note that this is the first earnings call for SPAR in a number of years. As a successful growing business with some of the world's most compelling companies as clients, I made the decision to increase our communication with investors, potential investors, analysts, and others. I believe we have a compelling story to tell with a bright future.

Before I provide the highlights of our fourth quarter performance I would like to take a moment to note that this is the first earnings call for spar and a number of years.

As a successful growing business with some of the world's most compelling companies as clients.

Made the decision to increase our communication with investors potential investors analysts and others I believe we have a compelling story to tell with a bright future.

Mike: Today, I want to welcome our existing investors and provide a quick overview for those new to SPAR. We are not planning to take questions on this initial conference call. However, you can contact us for a follow-up.

Today I want to welcome our existing investors and provide a quick overview for those new to sport. We are not planning to take questions. On this initial conference call. However, you can contact us for a follow up call with.

Mike: With that said, this morning we announced our results for the fourth quarter in full-year fiscal 2021.

With that said this morning, we announced our results for the fourth quarter and full year fiscal 2021 .

Mike: Total revenue for the fourth quarter exceeded $60 million, up 1% from the same period last year. More notably, this represents our fourth quarter in a row exceeding $60 million for the first time in the company's history.

Total revenue for the fourth quarter exceeded $60 million up 1% from the same period last year more notably this represents our fourth quarter in a row exceeding $60 million for the first time in the company's history.

Mike: Our domestic business was the engine of the fourth quarter performance with an increase of 5.3% year over year against our international business that was down 1% for the quarter.

Our domestic business was the engine of the fourth quarter performance with an increase of five 3% year over year against our international business that was down 1% for the quarter.

Mike: Our gross profit was 17.7% of revenue compared to 19.4% in the prior year. This is a reflection of the acceleration of our story model business, one-time travel expense operating items, and labor costs from one of our domestic joint ventures.

Gross profit was 17, 7% of revenue compared to 19, 4% in the prior year. This is a reflection of the acceleration of our store remodel business, one time travel expense operating items and labor cost from one of our domestic joint ventures.

Mike: Operating income is a loss of $3.1 million based on a one-time expense of $4.5 million resulting from the resolution of all outstanding majority stockholders.

Operating income is a loss of $3 1 billion based on a one time expense of $4 5 million, resulting from the resolution of all outstanding majority stockholder claims and the execution of a change in control agreement without this expense our adjusted fourth quarter operating income would have been a positive $1 4 million.

Mike: and the execution of a change in control agreement. Without this expense, our adjusted fourth quarter operating income would have been a positive 1.4 million.

Mike: For those new to SPAR, the fourth quarter is typically our slowest as many of our services are performed in stores to drive sales and margin for our clients. Our merchandisers and brand specialists generally perform less hours around the house.

For those new to spar the fourth quarter is typically our slowest as many of our services are performed in stores to drive sales and margin for our clients, our merchandisers and brand specialists generally perform less hours around the holidays.

Mike: Now I thought it would be helpful to provide a more comprehensive description of what we do every day in terms of our revenue.

Now I thought it would be helpful to provide a more comprehensive description of what we do every day.

Terms of our revenue.

Mike: Today, 77% of SPAR Group's global revenues are derived from category and merchandising product resets for well-known CPG brands as well as prominent global brick and mortar retailers across the world.

Today, 77% of spar group's global revenues are derived from category and merchandising product research for well known CPG brands as well as prominent global brick and mortar retailers across the world.

Mike: Although we did not share current contractual relationships, we have done work in the past for retailers including Walmart, Family Dollar, Dollar General, Bed Bath and Beyond as well as CPG brands and companies like Kraft Heinz, Clorox, JDE, Wreck-it Bankesier and P&G. These are just a few examples of the companies we have worked with which speaks to the importance of our global footprint.

Although we do not share our current contractual relationships, we have done work in the past for retailers, including Walmart family dollar dollar general bed Bath and beyond as well as CPG brands and companies like Kraft Heinz Clorox J D E Reckitt Benckiser and PNG.

These are just a few examples of the companies we have worked with which speaks to the importance of our global footprint and breadth of services.

Mike: We also assist with the teams and technology for new product launches, installation of displays and special promotion.

We also assist with the teams and technology for new product launches installation of displays and special promotions.

Mike: When you see a display of M&Ms in Brazil that is stacked out colorful and compelling, we likely did that.

When you see a display of M. In EMS in Brazil that is stacked out colorful and compelling.

We likely did.

Mike: We frequently perform seasonal store product resets, as well as manage inventories out of stocks and perform inventory compliance audits. When it's time to change the greeting cards after a holiday, it is most likely as far merged

We frequently performed seasonal store product research as well as manage inventories out of stocks and perform inventory compliance audits. When it's time to change the greeting cards after a holiday, but it's most likely as far merchandising.

Mike: Finally, in some key arrangements, we serve as brand agents and provide in-store selling, which is an important marketing service often.

Finally in some key arrangements, we serve as brand agents and provide in store selling which is an important marketing services offering.

Mike: The remaining 23% of our revenues are derived primarily from story modeling services, rightsizing, and furniture assembly services.

The remaining 23% of our revenues are derived primarily from store remodeling services right sizing and furniture Assembly services.

Mike: Our assembly services business continues to be a growing business as a result of the home office shift during COVID when retailers had to get creative with selling and delivery of product. Nationally we have done customer furniture assembly work for staples on the domestic side of the business. If you want an office chair assembled in your home that is likely a spar person ready to help.

Our assembly services business continues to be a growing business as a result of the home office shifts during COVID-19 when retailers had to get creative with selling and delivery of product nationally. We have done customer furniture assembly work for staples on the domestic side of the business.

If you want an office chair assembled in your home.

<unk> spar person ready to help.

Mike: For remodel services, we provide teams of people to help retailers reorganize the store, move fixtures, get the store ready to reopen it more, if it's two in the morning.

For Remodels services, we provide teams of people to help retailers reorganize the store fixtures get the store ready to reopen anymore. If it's two in the morning.

Mike: And you see a team of people moving fixtures full of product from one end of the store to the other. That is far.

And you see a team of people moving fixtures full of product from one end of the store to the other that as far.

Mike: As a growing piece of our business, the pandemic also opened up services around store downsizing or resizing projects.

It's a growing piece of our business depend Emmick also opened up services around store downsizing or resizing projects for example.

Mike: If a retailer's customers were more comfortable with curbside pickup instead of traditional in-store shopping, companies like Best Buy opted to downsize retail selling space and build in-store fulfillment to better serve customers' curbside. In some of these cases,

If a retailer's customers were more comfortable with curbside pickup instead of traditional in store shopping companies like bestbuy opted to downsize retail selling space and build in store fulfillment.

Better serve customers curbside and some of these cases spar helped to make that happen.

Mike: And finally, a growing service for us in the DC and fulfillment center space, where we provide staff augmentation for omni-channel businesses with growing warehouse fulfillment needs. This serves not only a key need for our clients, but also provides top-line opportunity for us during a typically quieter time.

And finally, a growing service for us in the D C and fulfillment center space, where we provide staff augmentation for omnichannel businesses with growing warehouse fulfillment needs. This year, it's not only a key need for our clients. But also provides top line opportunity for us during a typically quieter time of year.

Mike: In short, CPG and retail businesses continue to look for ways to outsource and we are exactly positioned to help. They make great products. We take it from there.

In short CPG and retail businesses continue to look for ways to outsource and we're exactly position now they made great products, we take it from there.

Mike: Outside of our core business in the quarter, I'm pleased to report that we came to an agreement with our two largest shareholders and founders of the business to resolve all outstanding claims and disputes after nearly four years of these issues hanging over the business and creating management challenge. We have this behind.

Outside of our core business in the quarter I'm pleased to report that we came to an agreement with our two largest shareholders and founders of the business to resolve all outstanding claims and disputes after nearly four years at visa issues hanging over the business and creating management challenge we have this behind us.

Mike: The nature of the agreement provides for protection from future claims, improved independent governance of the company, and a reduced board site. Well, I cannot overstate the effort and time required to reach the agreement. I want to thank members of our board now and prior for their efforts in commitment to help get this done.

The nature of the agreement provides for protection from future claims improved independent governance of the company and it reduced sports at well I cannot overstate the effort and time required to reach the agreement I want to thank members of our board now and prior for their efforts and commitment to help get this done.

Mike: I also want to take a minute to comment on our two founders Bob Brown and Bill Bartels and the important role and value they bring to our community.

I also want to take a minute to comment on our two founders, Bob Brown and Billboard gels and the important role in value they bring to our company.

Mike: It is an extraordinary story of two individuals who met when they were 16 years old and can tell tales that now go back 60 years.

It is an extraordinary story of two individuals who bet. When there was 16 years old and can tell tales that now go back 60 years.

Mike: Bob Brown brings unique vision to this industry that is time and again ahead of

Bob Brown brings unique vision to this industry that has time and again, but ahead of its time and Billboard tells brings an extraordinary drive a joy working with people and building partnerships. The combination of our two founders over the years is made what we're doing and about to do possible as the CEO I. Appreciate their continued involvement of the board.

Mike: And Bill Bartels brings an extraordinary drive of joy working with people and building partnerships. The combination of our two founders over the years has made what we're doing and about to do possible.

Mike: As the CEO , I appreciate their continued involvement on the board and willingness to serve. I know that the last few years have been challenging for them as well, and I thank them for working with me to reach and agree.

And willingness to serve I know that the last few years have been challenging for them as well and I. Thank them for working with me to reach an agreement.

Looking forward our business is positioned for increased relevance to our clients sustained growth and improved profitability, we have multiple opportunities to continue growing and improve our business, we're winning more business taking business from our competitors expanding globally striking strategic partnerships, improving our talent and energizing our teams.

Mike: Looking forward, our businesses position for increased relevance to our clients, sustained growth, and approved profitability. We have multiple opportunities to continue growing and approve our business. For winning more business, taking business from our competitors, expanding globally, striking strategic partners,

Mike: improving our talent and energizing our teams across all nine countries.

Across all nine countries in.

Mike: In the fourth quarter, we had a series of global summits to align all of our country leaders around the global vision that differentiates us in positions far for long-term.

In the fourth quarter, we had a series of global summit to align all of our country leaders around the global vision, it differentiates us and positions bar for long term success.

Mike: Additionally, we're keenly focused on increasing profitability in all settings.

Additionally, we're keenly focused on increasing profitability in all segments, we see material opportunity to drive topline performance, but also.

Mike: We see material opportunity to drive top line performance, but also improve gross profit and better manage our cost structure. We're expecting to see the benefit of this in

Improved gross profit and better manage our cost structure.

We're expecting to see the benefit of this in 2022 and beyond.

Mike: Our goal is to be the company that consumer goods and retail has turned to, to drive sales, energize the market, and create excitement for the consumer.

Our goal is to be the company that consumer goods and retail has turned too to drive sales energize the market and create excitement for the consumer our vision is to be the most creative energetic and effective marketing merchandising and distribution services business in the world as measured by the success of our clients and grow through it.

Mike: Our vision is to be the most creative, energizing, and effective marketing, merchandising, and distribution services business in the world, as measured by the success of our clients.

Our people there is much to be done or.

Mike: There is much to be done. Our fourth quarter results combined with our full year 2021 results are just the beginning.

Our fourth quarter results combined with our full year 'twenty 'twenty. One results are just the beginning.

Mike: Now, I will turn the call over to Fay DeVries, our Chief Financial Officer, to review our fourth quarter and full-year financial results, then I will come back with a few closing comments.

Now I will turn the call over to Fay Devries, our Chief Financial Officer to review, our fourth quarter and full year financial results, then I will come back with a few closing comments.

Fay Derees: Thank you, Mike, and good morning, everyone. Fourth quarter of 2021 net revenue, total $60 million, up 1.1% versus a year.

Thank you, Mike and good morning, everyone fourth quarter of 2021 net revenue totaled 60 million up one 1% versus a year ago net revenue in our domestic segment was $20 7 million in the fourth quarter of 2021 a 5.3 parts.

Fay Derees: net revenue in our domestic segment was $20.7 million in the fourth quarter of 2021, a 5.3 percent from the year ago quarter, and the international segment net revenue was $39.3 million in the fourth quarter, down 0.9 percent compared to the prior year's quarter.

Starting from the year ago quarter, and the International segment net revenue was $39 3 million in the fourth quarter down 9% compared to the prior year's quarter. When we talk about the domestic segment. Please note. This only includes the United States and the International segment includes Canada.

Fay Derees: When we talk about the domestic segment, please note this only includes the United States and the international segment includes Canada as well as other countries where we operate fully on and join venture partnerships.

As well as other countries, where we offer a fully owned and joint venture partnership.

Fay Derees: As Mike mentioned earlier, the fourth quarter is the slowest quarter due to the holiday season. However, the domestic segment extended just over 5% due primarily to increase in store remodeling in 2021.

As Mike mentioned earlier, the fourth quarter is our slowest quarter due to the holiday season. However, the domestic segment extended just over 5% due primarily to an increase in store remodels in 2021.

Fay Derees: Growth profits for the fourth quarter aggregated 10.6 million or 17.7 percent of sales compared to 11.5 million or 19.4 percent of sales in the prior year quarter.

Gross profit for the fourth quarter aggregated $10 6 million or 17, 7% of sales compared to 11 5 million or 19, 4% of sales in the prior year quarter the decline in fourth quarter margin compared to the prior year quarter was primarily.

Fay Derees: The decline in fourth quarter margin compared to the prior year quarter was primarily due to one-time field travel expense items, faster growth of the remodeled business and plan, and an increase in labor expense costs related to one of our joint ventures.

Due to a onetime feel travel expense items faster grille of the remodel business than plan and an increase in labor expense cost relating to one of our joint ventures.

Fay Derees: we responded pertently to labor inflation in 2021 by driving operational efficiencies throughout the year, as well as adjusting our rates starting in the first quarter of 2022.

We found that potently to labor inflation in 2021 by driving operational efficiencies throughout the year as well as adjusting our rate starting in the first quarter of 2022.

Fay Derees: Selling general and administrative expenses for the fourth quarter were $8.8 million or 14.6% of revenue in 2021 compared to $8.1 million or 13.6% of revenue in the prior year quarter.

Selling general and administrative expenses for the fourth quarter were $8 8 million or 14, 6% of revenue in 2021 compared to $8 1 million or 13, 6% of revenue in the prior year quarter.

Fay Derees: SG&N expenses for the prior year quarter did not include a full run rate of corporate salaries due to the open executive positions in 2020. The business also had not read back up in fourth quarter of 2020 from the pandemic.

SG&A expenses for the prior year quarter did not include a full run rate of coke in salaries due to the ultimate executive positions in 'twenty 'twenty. The business also had not ramped back up in fourth quarter of 2020 from the pandemic.

Fay Derees: Flood quota results included a 4.5 million, a one-time charge, related to the signed agreement between the company and the two founders and majority shareholders with a change of control arrangement.

Fourth quarter results included a $4 5 million one time charge related to the signed agreement between the company and the two founders and majority shareholder with a change of control arrangements in.

Fay Derees: In the fourth quarter, the company recorded an operating loss of $3.1 million due to the $4.5 million charge just mentioned earlier. Excluding this charge, the company will have reported operating income of $1.4 million compared to $2.9 million in the prior year's fourth quarter. The decrease in the fourth quarter operating income was primarily due to the items mentioned earlier.

In the fourth quarter. The company recorded an operating loss of $3 1 million due to the $4 5 million charged just nation earlier, excluding this charge. The company would have reported operating income of $1 4 million compared to $2 nine mainly in the prior year's fourth quarter.

The decrease in the fourth quarter operating income was primarily due to the items mentioned earlier.

Fay Derees: The fiscal 2021 fourth quarter net loss attributable to Spark Group was $4.4 million down from net income attributable to Spark Group of $2 million in the year-ago quarter.

Fiscal 2021 fourth quarter net loss attributable to spark group was $4 4 million down from net income attributable to spar group are 2 million in the year ago quarter.

Fay Derees: Adjusting net loss attributable to Spark Group was $644,000 compared to a loss of $904,000 in the year-ago quarter. You can find the gap to non-gap reconciliation of management's financial measures for adjusting the income or loss attributable to Spark Group and adjust EBITDA at the end of today's press release.

Adjusted net loss attributable to the spar group was $644000 compared to a loss of $904000 in the year ago quarter. You can find the GAAP to non-GAAP reconciliations are management's financial measures well adjust net income or loss attributable to spark.

And adjusted EBITDA at the end of today's press release.

Fay Derees: Full year 2021 net revenue totaled $250.7 million, an increase of just under 11 percent compared to the fiscal 2020 net revenue of $230.5 million. Our 2021 revenue represents a record high for the company for the fiscal year that ended December 31, 2021.

Full year 2021, net revenue totaled $255 7 million, an increase of just under 11% compared to the fiscal 2020 net revenue of 235 million our 2021 revenue represents a record high for the.

For the fiscal year that ended December 31st 2021.

Fay Derees: Segment revenue comprises $100.3 million from the domestic segment and $155.4 million from the international operation.

Sitting in the revenue comprised 100.3 million falling domestic segment and 155 4 million from the international operations.

Fay Derees: The domestic and international segments increase over the prior year by a strong 8.9 percent and 12.3 percent respectively.

Domestic and international segment increased over the prior year, but a strong eight 9% and 12, 3% respectively.

Fay Derees: Gross profit for this fiscal year was 47.5 million or 18.6% of revenue compared to gross profit for 2020 of 45.2 million or 19.6% of revenue.

Gross profit for the fiscal year was 47 5 million or 18, 6% of revenue compared to gross profit for 2020, or $45 2 million or 19.6% of revenue.

Fay Derees: Although gross profit dollars increase, gross profit as a percentage of sales decline primarily due to U.S. wage inflation and unfavorable service mix throughout the company.

Although gross profit dollars increased gross profit as a percentage of sales declined primarily due to U S wage inflation and a favorable service mix throughout the company.

Fay Derees: Selling general and administrative expenses for the year were $36.8 million or a 14.4% of revenue compared to $33.3 million or 14.5% of revenue in the prior year. The company improved its operating leverage by 10 basis points in fiscal year of 2021 compared to SG&A as a percentage of revenue for fiscal year 2020.

General and administrative expenses for the year were $36 8 million or 14, 4% of revenue compared to $33 3 million or 14.5.

5% of revenue in the prior year the company improved its operating leverage by 10 basis points in fiscal year of 2021 compared to SG&A as a percentage of revenue for fiscal year 2020.

Fay Derees: For fiscal year 2021, the company reported operating income of $4.2 million versus operating income of $9.7 million from the prior year. Excluding the $4.5 million charge for the majority stockholders' change of control agreement, operating income was $8.7 million for the fiscal year in the December 31, 2021.

Well physical year 2021, the company reported operating income of $4 2 million versus operating income of $9 7 million from the prior year, excluding the $4 5 million charge for the majority stockholders change of control agreement operating income was $8 seven.

For the fiscal year ended December 31st 2021.

Fay Derees: Fiscal year of 2021 net income aggregated $2 million compared to $9 million in the prior year. The 2021 net loss attributable to Spark Group was $1.8 million down from net income, so $3.4 million in the 2020 fiscal year.

Fiscal year of 2021, net income aggregated 2 million compared to nine mainly in the prior year. The 2021 net loss attributable to Spark group was $1 8 million stuff on the income of $3 4 million in the 'twenty 'twenty fiscal year.

Fay Derees: The fiscal year of 2021 adjusted net income attributable to SPAR with $2.6 million, favorable compared to $1.7 million in the prior year period.

Fiscal year of 2021, adjusted net income attributable to spar with $2 6 million favorable compared to $1 7 million in the prior year period.

Fay Derees: Full year adjusted EBITDA for 2021 was $11.9 million compared to $13.6 million for the prior year.

Full year adjusted EBITDA for 2021 was 11 9 million compared to 13.6 million for the prior year adjust.

Fay Derees: Adjust the EBITDA attributable to Spark Group for the year with $7 million compared to $8 million in the year-go period. You can find the gap to non-gap reconciliation management's financial measures for adjusting the income or loss, adjusting the income or loss attributable to Spark Group, and adjust the EBITDA at the end of today's press release.

Adjusted EBITDA attributable to spire crew for the year was 7 million compared to eight mainly in the year ago period, you can find the GAAP to non-GAAP reconciliations management's financial measures.

<unk> net income or loss adjusted net income or loss attributable to spark growth and adjusted EBITDA at the end of today's press release.

Fay Derees: Turning now to the Spark Group's financial position, cash flow and balance sheet at the fiscal year end. The company's total worldwide liquidity position at December 31st, 2021 with 20 million, 13 million represented cash and cash equivalence and 7 million included in use availability from the company's global lines of credit.

Turning now to the spar groups financial position cash flow and balance sheet at the physical at year end.

The company's total worldwide liquidity position at December 31st 2021 was 20 million 13 million represent a cash and cash equivalents and 7 million included in youth availability on the company's global lines of credit for.

Fay Derees: For fiscal year 2021, net cash provided by operating activities was $2.6 million and capital expenditures for the year were $1.7 million, which included capitalized software. We believe our strong balance sheet and end-polled clarity provides us the flexibility and resiliency needed to manage through the next phase of growth for our company. With that, I would like to thank all of you for joining me.

For fiscal year 2021 net cash provided by operating activities was $2 6 million in capital expenditures for the year were $1 7 million, which included capitalized software, we believe our strong balance sheet and ample liquidity provide us the flexibility.

And resiliency needed to manage through the next phase of growth for our company.

With that I would like to turn it back to Mike.

Speaker Change: Thank you, Fay. As many of you know, I joined the company in February 2021.

Thank you thing.

As many of you know I joined the company in February 2021.

Speaker Change: My background is more than 30 years of working in stores, retail, professional services, technology, internationally, and as an executive in big companies, small private companies.

My background is more than 30 years of working in stores retail professional services technology internationally and as an executive in big companies small private companies and venture capital acquired companies sold companies built companies from scratch transform fortune 150 companies and driven gross profit and shareholder value.

Speaker Change: Acquired companies, sold companies, built companies from scratch, transformed Fortune 150, companies in driven growth profit and shareholder value. At the core of my experience is my passion for building great organizations.

At the core of my experience is my passion for building great organizations working with clients to innovate explore building ultimately celebrate results with every associate leader partner and shareholder.

Speaker Change: working with clients to innovate, explore, build, and ultimately celebrate results with every associate, leader, partner, and shareholder.

Speaker Change: As far having added extraordinary talent to the leadership team that complements the great talent that preceded me, collaborating with my global partners all over the world to develop a compelling and exciting strategy and setting our table for growth, profitability, and performance in 2022, I could not be more excited about where we are heading.

It's far having added extraordinary talented leadership team that complements the great talent that preceded me collaborating with my global partners all over the world to develop a compelling and exciting strategy and setting our table for growth profitability and performance in 2022, I could not be more excited about where we are headed.

Speaker Change: If you gave me 100 chips to place on a business, I'd push them all on Spark.

If you gave me 100 chips the place on a business I pushed them all lunch bar.

Speaker Change: I'm proud of the highest revenue in the company's history in the last year, but I got up each day committed to more.

Proud of the highest revenue in the company's history in the last year, but I get up each day committed to more.

Speaker Change: With that, I want to thank you for your interest in our company and for listening to our earnings conference call today, and we look forward to providing an update of our progress when we report first quarter results.

With that I want to thank you for your interest in our company and for listening to our earnings conference call today, and we look forward to providing an update of our progress when we report first quarter results.

Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.