Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this "Quarterly Report") contains "forward-looking statements" within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, made by, or respecting, SPAR Group, Inc. ("SGRP" or the "Corporation",) and its subsidiaries (SGRP together with its subsidiaries may be referred to as "SPAR Group" or the "Company"). There also are forward-looking statements contained in: (a) SGRP's 2025 Annual Report on Form 10-K for the year ended December 31, 2025 the ("2025 Annual Report"), which was filed with the Securities and Exchange Commission the ("SEC") on March 31, 2026; (b) the Company's Proxy Statement on Schedule DEF 14A for its 2026 Annual Stockholders Meeting, the ("2026 Proxy Statement"), which was filed with the SEC on April 30, 2026; and (c) SGRP's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and statements as and when filed with the SEC (including this Quarterly Report, the 2025 Annual Report, and the 2026 Proxy Statement, each a "SEC Report"). "Forward-looking statements" are defined in Section 27A of the Securities Act of 1933, as amended the ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended the ("Exchange Act"), and other applicable federal and state securities laws, rules and regulations, as amended (together with the Securities Act and Exchange Act, the "Securities Laws").

Readers can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Words such as "may," "will," "expect," "intend," "believe," "estimate," "anticipate," "continue," "plan," "project," or the negative of these terms or other similar expressions also identify forward-looking statements. Forward-looking statements made by the Company's in this Quarterly Report and the Annual Report may include (without limitation): risks, uncertainties, cautions, circumstances and other factors ("Risks"). Those Risks include (without limitation): the Company's continued ability to access its credit facilities; the costs and effects of changing the Company's principal independent registered accounting firm; potential or continued revenue growth, gross margin expansion, and continued favorable shift in service mix from remodeling toward merchandising services; continued and new long-standing relationships with retailers, distributors and makers of consumer goods; successful results from merchandising partnerships and relationships with other companies; borrowing, repaying or guarantying the Company's recent unsecured loans or paying interest thereon; the departure in 2025 of various of the Company'sexecutives previously reported and the agreements made with them; the impact of the Company's strategic review process or any resulting action or inaction; the impact of selling certain of the Company's subsidiaries; the impact of adding new directors or new finance team members; the potential negative effects of any stock repurchase and/or payment; the Company's cash flow or financial condition; plans, intentions, expectations, guidance or other information respecting the pursuit or achievement of the Company's corporate objectives; and or any resulting impact on revenues, earnings, cash or financial condition resulting from our related to any such Risk. The Company's forward-looking statements also include (without limitation) statements made (as applicable) in this Quarterly Report and in the 2025 Annual Report in "Business", "Risk Factors", "Cybersecurity", "Legal Proceedings", "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities", "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Controls and Procedures", "Directors, Executive Officers and Corporate Governance", "Executive Compensation", "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters", and "Certain Relationships and Related Transactions, and Director Independence".

You should carefully review and consider the Company'sforward-looking statements (including all Risks and other cautions and uncertainties) and other information made, contained, noted or referenced in or incorporated by reference into this Quarterly Report, but you should not place undue reliance on any of them. The results, actions, levels of activity, performance, achievements or condition of the Company (including its assets, business, clients, capital, cash flow, credit, expenses, financial condition, income, indebtedness, legal costs, liabilities, liquidity, locations, marketing, operations, performance, prospects, sales, strategies, taxation, vendors, or other achievement, results, risks, trends or condition) and other events and circumstances planned, intended, anticipated, estimated or otherwise expected by the Company (collectively, "Expectations"), and our forward-looking statements (including all Risks) and other information reflect the Company'scurrent views about future events and circumstances. Although the Company believes those Expectations and views are reasonable, the results, actions, levels of activity, performance, achievements or condition of the Company or other events and circumstances may differ materially from our Expectations and views, and they cannot be assured or guaranteed by the Company, since they are subject to Risks and other assumptions, changes in circumstances and unpredictable events (many of which are beyond the Company'scontrol). In addition, new Risks arise from time to time, and it is impossible for the Company to predict these matters or how they may arise or affect the Company. Accordingly, the Company cannot assure you that its Expectations will be achieved in whole or in part, that it has identified all potential Risks, or that it can successfully avoid or mitigate such Risks in whole or in part, any of which could be significant and materially adverse to the Company and the value of your investment in the Company'scommon stock.

These forward-looking statements reflect the Company'sExpectations, views, Risks and assumptions only as of the date hereof, and the Company does not intend, assume any obligation, or promise to publicly update or revise any forward-looking statements (including any Risks or Expectations) or other information (in whole or in part), whether as a result of new information, new or worsening Risks or uncertainties, changed circumstances, future events, recognition, or otherwise.

SPAR Group, Inc. and Subsidiaries

Overview of Our Business

SPAR Group is a leading merchandising and brand marketing services company, providing a broad range of sales enhancing services to retailers across most classes of trade and consumer goods manufacturers, distributors, and retailers in the United States ("U.S.") and Canada. The Company's goal is to be the most creative, energizing and effective retail services company that drives sales, margins and operating efficiency for clients.

As of September 30, 2026, the Company operated in the U.S. and Canada.

With more than 50 years of experience and a diverse network of merchandising associates, the Company continues to grow its relationships with some of the world's leading businesses. The combination of resource scale, deep expertise, advanced technology and unwavering commitment to excellence, separates the Company from the competition.

The Company is dedicated to delivering a spectrum of specialized services tailored to enhance retail operations and profitability. Our team collaborates closely with clients to identify their primary goals, ensuring the execution of strategies that boost sales and profit margins. With a focus on merchandising and brand marketing, our associates deploy a variety of programs aimed at maximizing product sell-through to consumers. These initiatives range from launching new products and setting up promotional displays to assembling fixtures and ensuring consistent stock availability, thus facilitating efficient reordering processes. Furthermore, we extend our expertise to sales enhancement and customer service improvement. As the retail landscape evolves, our team is adept at undertaking comprehensive store renovations and preparing new locations for their grand openings, ensuring they meet the modern consumer's expectations. Additionally, our distribution associates play a pivotal role in retail and consumer goods distribution centers, preparing these facilities for operation, optimizing system functionality, managing product logistics, and providing essential staffing solutions to meet our clients' needs effectively.

The Company's business is led and operated from its headquarters in Charlotte, North Carolina, with local leadership and offices in the U.S. and Canada.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA is a non-GAAP measure of our operating performance and should not be considered as an alternative to net income as a measure of financial performance or any other performance measure derived in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). "EBITDA" is defined as net income before (i) depreciation and amortization, (ii) interest expense, net, and (iii) income tax expense. "Adjusted EBITDA" is defined as net income (loss) before (i) depreciation and amortization of long-lived assets, (ii) interest expense (iii) income tax expense, (iv) restructuring expenses, (v) impairment, (vi) nonrecurring legal settlement costs and associated legal expenses unrelated to the Company's core operations, (vii) special items as determined by management, and (viii) review of strategic alternatives, which includes primarily legal, consulting, and investment bank fees. This metric is a supplemental measure of our operating performance that is neither required by, nor presented in accordance with, U.S. GAAP.

We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in our presentation of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in future periods, and any such modification may be material. In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

Our management believes Adjusted EBITDA is helpful in highlighting trends in our core operating performance compared to other measures, which can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. We also use Adjusted EBITDA to supplement U.S. GAAP measures of performance in the evaluation of the effectiveness of our business strategies and to make budgeting decisions.

Adjusted EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations include:

●

Adjusted EBITDA does not reflect our cash expenditure or future requirements for capital expenditures or contractual commitments;

●

Adjusted EBITDA does not reflect changes in our cash requirements for our working capital needs;

●

Adjusted EBITDA does not reflect the interest expense and the cash requirements necessary to service interest or principal payments on our debt;

●

Adjusted EBITDA does not reflect cash requirements for replacement of assets that are being depreciated and amortized;

●

Adjusted EBITDA does not reflect non-cash compensation, which is a key element of our overall long-term compensation;

●

Adjusted EBITDA does not reflect the impact of certain cash charges or cash receipts resulting from matters we do not find indicative of our ongoing operations; and

●

Other companies in our industry may calculate Adjusted EBITDA differently than we do.

The following is a reconciliation of our net income (loss) to Adjusted EBITDA for the periods presented:

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2026				2025				2026				2025
Net income (loss)		$	50			$	(8,764	)		$	(94	)		$	(8,303	)
Add back:
Depreciation and amortization			423				404				1,266				1,185
Interest expense, net			686				663				1,827				1,721
Provision for income taxes			(292	)			1,719				(152	)			1,953
Subtotal of add backs to net income (loss)			817				2,786				2,941				4,859
EBITDA		$	867			$	(5,978	)		$	2,847			$	(3,444	)
Adjustments:
Share based compensation			-				84				-				138
Restructuring costs and severance			67				4,018				312				4,018
Other one time (income)/expense			(74	)			1,966				266				2,188
Legal costs/settlements - non-recurring			527				-				846				-
Total adjustments			520				6,068				1,424				6,344
			-				-				-				-
Adjusted EBITDA		$	1,387			$	90			$	4,271			$	2,900

RESULTS OF OPERATIONS

The following table sets forth selected financial data and data as a percentage of net revenues for the periods indicated:

For the three months ended September 30, 2026, compared to the three months ended September 30, 2025

		Three Months Ended September 30,
(dollars in thousands)		2026				2025				$ Change				% Change
Net revenue		$	33,544			$	41,416			$	(7,872	)			(19.0	%)
Cost of revenue			27,215				33,726				(6,511	)			(19.3	%)
Gross profit			6,329				7,690				(1,361	)			(17.7	%)
Operating expenses:
Selling, general and administrative expense			5,607				9,187				(3,580	)			(39.0	%)
Restructuring costs and severance			67				4,018				(3,951	)			NM
Depreciation and amortization			423				404				19				4.7	%
Total operating expenses			6,097				13,609				(7,512	)			(55.2	%)
Operating income (loss)			232				(5,919	)			6,151				(103.9	%)
Interest expense, net			686				663				23				3.5	%
Other (income) expense, net			(212	)			463				(675	)			(145.8	%)
Loss before income tax expense			(242	)			(7,045	)			6,803				NM
Provision for income taxes			(292	)			1,719				(2,011	)			(117.0	%)
Net income (loss)		$	50			$	(8,764	)		$	8,814				NM
Percent of net revenue:
Gross profit			18.9	%			18.6	%
Selling, general and administrative expense			16.7	%			22.2	%
Restructuring costs and severance			0.2	%			9.7	%
Depreciation and amortization			1.3	%			1.0	%
Total operating expenses			18.2	%			32.9	%

Net Revenue

Net revenue for three months ended, September 30, 2026 were $33.5 million, compared to $41.4 million for the three months ended September 30, 2025, a decrease of $7.9 million, or 19.0%. Net revenue decreased during the quarter primarily due to lower volume within the remodel business, which reflect reduced hourly volumes as certain clients transition to work in-house. These declines were partially offset by revenue generated from new client relationships established during the quarter in both remodel and merchandising.

U.S. net revenue totaled $29.5 million and $38.2 million for the three months ended September 30, 2026 and 2025, respectively. The decrease of $8.7 million or 22.8% was driven by decreases during the quarter primarily due to lower volume within the remodel business, which reflect reduced hourly volumes as certain clients transition to work in-house. These declines were partially offset by revenue generated from new client relationships established during the quarter in both remodel and merchandising.

Canada net revenue totaled $4.0 million and $3.2 million for the three months ended September 30, 2026 and 2025, respectively. The increase of $0.8 million or 25.0% was driven by the specialized resources business which increased primarily due to expanded scope of work for a large client.

Cost of Revenue

The Company's cost of revenue consists of its in-store labor and field management wages, related benefits, travel and other direct labor-related expenses and was 81.2% of net revenue for the three months ended September 30, 2026 compared to 81.4% of net revenue for the three months ended September 30, 2025.

Cost of revenue for the three months ended September 30, 2026 were $27.2 million, compared to $33.7 million for the three months ended September 30, 2025. The decrease was in line with the reduction of revenue and driven by the mix of services in the U.S. partially offset by a reduction in field management expense.

U.S. cost of revenue totaled $24.0 million and $31.1 million for the three months ended September 30, 2026 and 2025, respectively. The decrease of $7.1 million was in line with the reduction of revenue and driven by the mix of services in the U.S. partially offset by a reduction in field management expense.

Canada cost of revenue totaled $3.2 million and $2.6 million for the three months ended September 30, 2026 and 2025, respectively. The increase of $0.6 million during the quarter was driven by the specialized resources business which increased primarily due to expanded scope of work for a large client.

Selling, General and Administrative Expense ("SG&A")

SG&A includes the Company's corporate overhead, project management, information technology, executive compensation, human resources, legal and accounting expense. SG&A expense was approximately $5.6 million, or 16.7% of net revenue, and approximately $9.2 million, or 22.2% of net revenue for the three months ended September 30, 2026 and 2025, respectively. The decrease in SG&A was primarily due to cost savings measures implemented during the quarter.

U.S. SG&A expense totaled $4.6 million and $8.6 million for the three months ended September 30, 2026 and 2025, respectively. The decrease of $4.0 million was primarily driven by lower compensation costs and lower consulting expense.

Canada SG&A expense totaled $1.0 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively. The increase was primarily attributable to changes in the allocation of expense between the U.S. and Canadian operations.

Restructuring Costs and Severance

Restructuring costs and severance primarily consist of expense related to the reorganization of the Company's executive team, workforce cost reduction initiatives, and the relocation of the Company's headquarters to Charlotte, NC. For the three months ended September 30, 2026 and 2025, the Company recognized $0.07 million and $4.0 million, respectively, which included severance and other costs associated with these initiatives.

Depreciation and Amortization

For the three months ended September 30, 2026 and 2025, depreciation and amortization was approximately $0.4 million and $0.4 million, respectively.

Interest Expense, Net

For the three months ended September 30, 2026 and 2025, interest expense, net was approximately $0.7 million and $0.7 million, respectively.

Other (Income) Expense, Net

For the three months ended September 30, 2026 and 2025, other (income) expense, net was immaterial.

Provision for Income Taxes

For the three months ended September 30, 2026 income tax benefit was $0.3 million, with an effective rate of 120.7%, compared to expense of $1.7 million with an effective rate of (24.4%) for the three months ended September 30, 2025.

For the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025

		Nine Months Ended September 30,
(dollars in thousands)		2026			2025			$ Change		% Change
Net revenue	$	100,968		$	114,087		$	(13,119	)	(11.5	%)
Cost of revenue		79,418			90,059			(10,641	)	(11.8	%)
Gross profit		21,550			24,028			(2,478	)	(10.3	%)
Operating expenses:
Selling, general and administrative expense		18,573			22,994			(4,421	)	(19.2	%)
Restructuring costs and severance		312			4,018			(3,706	)	NM
Depreciation and amortization		1,266			1,185			81		6.8	%
Total operating expenses		20,151			28,197			(8,046	)	(28.5	%)
Operating income (loss)		1,399			(4,169	)		5,568		(133.6	%)
Interest expense, net		1,827			1,721			106		6.2	%
Other (income) expense, net		(182	)		460			(642	)	NM
Loss before tax expense		(246	)		(6,350	)		6,104		NM
Provision for income taxes		(152	)		1,953			(2,105	)	(107.8	%)
Net loss	$	(94	)	$	(8,303	)	$	8,209		NM
Percent of net revenue:
Gross profit		21.3	%		21.1	%
Selling, general and administrative expense		18.4	%		20.2	%
Restructuring costs and severance		0.3	%		3.5	%
Depreciation and amortization		1.3	%		1.0	%
Total operating expenses		20.0	%		24.7	%

Net Revenue

Net revenue for nine months ended September 30, 2026 were $101.0 million, compared to $114.1 million for the nine months ended September 30, 2025, a decrease of $13.1 million, or 11.5%. Net revenue decreased primarily due to lower volume within the remodel business, reflecting changes in client project activity and reduced hourly volumes as certain clients transitioned to work in-house. These declines were partially offset by revenue generated from new client relationships established during the year in both remodel and merchandising businesses.

U.S. net revenue totaled $89.3 million and $104.3 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease of $15.0 million or 14.4% was primarily driven due to lower volume within the remodel business, reflecting changes in client project activity and reduced hourly volumes as certain clients transitioned to work in-house. These declines were partially offset by revenue generated from new client relationships established during the year in both remodel and merchandising.

Canada net revenue totaled $11.7 million and $9.8 million for the nine months ended September 30, 2026 and 2025, respectively. The increase of $1.9 million or 19.4% was driven by the specialized resources business which increased primarily due to expanded scope of work for a large client.

Cost of Revenue

The Company's cost of revenue consists of its in-store labor and field management wages, related benefits, travel and other direct labor-related expenses and was 78.6% of net revenue for the nine months ended September 30, 2026 compared to 79.0% of net revenue for the nine months ended September 30, 2025.

Cost of revenue for the nine months ended September 30, 2026 were $79.4 million, compared to $90.1 million for the nine months ended September 30, 2025. The decrease was in line with the reduction of revenue and driven by the mix of services in the U.S. partially offset by a reduction in field management expense.

U.S. cost of revenue totaled $70.4 million and $82.9 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease of $12.5 million was in line with the reduction of revenue and driven by the mix of services in the U.S. partially offset by a reduction in field management expense.

Canada cost of revenue totaled $9.0 million and $7.2 million for the nine months ended September 30, 2026 and 2025, respectively. The increase of $1.8 million during the quarter was primarily driven by the specialized resources business which expanded the scope of work for a large client, carrying a lower margin profile.

Selling, General and Administrative Expense

SG&A includes the Company's corporate overhead, project management, information technology, executive compensation, human resources, legal and accounting expense. SG&A expense was approximately $18.6 million, or 18.4% of net revenue, and approximately $23.0 million, or 20.2% of net revenue for the nine months ended September 30, 2026 and 2025, respectively. The decrease in SG&A was primarily due to cost savings measures implemented during the year.

U.S. SG&A expense totaled $16.5 million and $20.7 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease was primarily driven by cost savings measures implemented during the year which included lower compensation costs and lower consulting expense.

Canada SG&A expense totaled $2.1 million and $2.3 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease was driven by lower compensation costs which was offset with changes in the allocation of expense between the U.S. and Canadian operations.

Restructuring Costs and Severance

Restructuring costs and severance primarily consist of expense related to the reorganization of the Company's executive team, workforce cost reduction initiatives, and the relocation of the Company's headquarters to Charlotte, NC. For the nine months ended September 30, 2026 and 2025, the Company recognized expense of $0.3 million and $4.0 million, respectively, which included severance and other costs associated with these initiatives.

Depreciation and Amortization

For the nine months ended September 30, 2026 and 2025, depreciation and amortization was approximately $1.3 million and $1.2 million, respectively.

Interest Expense, Net

For the nine months ended September 30, 2026 and 2025, interest expense, net was approximately $1.8 million and $1.7 million, respectively.

Other (Income) Expense, Net

For the nine months ended September 30, 2026 and 2025, other (income) expense, net was immaterial.

Provision for Income Taxes

For the nine months ended September 30, 2026 income tax benefit was $0.2 million with an effective rate of 61.8%, compared to expense of $2.0 million with an effective rate of (30.8%) for the nine months ended September 30, 2025.

Critical Accounting Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and related notes thereto. However, we believe we have used reasonable estimates and assumptions in preparing the unaudited condensed consolidated financial statements. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

The significant accounting policies and estimates used in preparation of the unaudited condensed consolidated financial statements are described in the Critical Accounting Estimates section of the MD&A in the 2025 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 31, 2026.

Liquidity and Capital Resources

Funding Requirements

Our principal sources of liquidity at September 30, 2026, consisted of approximately $4.7 million of cash, approximately $35.8 million of accounts receivable and approximately $6.7 million available under our credit facilities. However, under the terms of our credit facilities, substantially all collections of our accounts receivable are remitted directly to our lenders, which limits our ability to use those collections to fund our operations. As a result, the Company's ability to fund its operations is dependent on its continued ability to access funds under its credit facilities.

Cash from operations could be affected by various risks and uncertainties, including, but not limited to risks detailed in the section titled "Risk Factors" included elsewhere in our 2025 Annual Report and included in this Quarterly Report. The Company believes that conditioned on the Company's continued ability to access its existing credit facilities (for which the Company closed on a two year extension from its lender in October 2025), projected results of operations, vendor payment requirements and other potential financing that may be available to the Company, sources of available cash should be manageable and sufficient to support ongoing working capital and capital expenditure requirements over the next 12 months; however, no assurances can be given. The Company's material cash requirements over this period consist principally of scheduled principal and interest payments under the Company's existing loan agreements, including its credit facilities and amounts due to PC Group, and working capital needs. However, and delay in the collection of receivables due from any of the Company's major clients, a significant reduction in business from such clients, a negative economic downturn, or any restrictions on the availability of cash from the Company's existing credit facilities, will have an adverse effect on the Company's business, cash resources, and ongoing ability to fund operations, and such effect may be material.

The Company is a party to various domestic and international credit facilities. These various domestic and international credit facilities require compliance with their respective financial covenants. See Note 3 to the Company's unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Cash Flows for the nine months ended September 30, 2026 and 2025

Net cash used in operating activities was $7.2 million compared to $16.0 million used in operating activities for the nine months ended September 30, 2026 and 2025, respectively. The change was primarily due to the decrease in accounts receivable which correlates to the decrease in revenue period over period and improved collection of outstanding customer balances and the increase of accrued expenses for payroll at the end of the period, offset by the decrease in accounts payable.

Net cash used in investing activities was approximately $1.2 million compared to $1.5 million used in investing activities for the nine months ended September 30, 2026 and 2025, respectively.

Net cash provided by financing activities was approximately $9.9 million compared to $7.5 million provided by financing activities for the nine months ended September 30, 2026 and 2025, respectively. This was principally due to proceeds received from PC Group under the terms of an unsecured promissory note in the principal amount of $4.0 million, which was offset by the paydown of amounts due to Mr. Justus in the amount of $1.35 million and changes in borrowings under the Company's line of credit.

Reflecting the impact of foreign exchange rate changes on the activity above resulted in a decrease in cash and cash equivalents for the nine months ended September 30, 2026 and 2025 of approximately $22 thousand and increase of $13 thousand, respectively.