News Releases
GP Strategies Reports Second Quarter 2016 Financial Results

COLUMBIA, Md., July 28, 2016 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2016.

Overview:

  • Revenue of $125.5 million for second quarter of 2016 compared to $125.7 million for second quarter of 2015
  • Gross profit of $20.3 million, or 16.2% of revenue, for second quarter of 2016 (which includes $0.5 million of severance costs) compared to $20.1 million, or 16.0% of revenue, for second quarter of 2015
  • Diluted earnings per share of $0.29 for second quarter of 2016 compared to $0.27 per share for second quarter of 2015
  • Cash flow from operations of $10.0 million for first half of 2016 compared to $3.1 million for first half of 2015

While the Company's reported revenue was flat in the second quarter of 2016 compared to the second quarter of 2015, it achieved 9% revenue growth in its Sandy Training & Marketing segment and 4% revenue growth in its Learning Solutions segment during the second quarter due to an increase in training services with new and existing customers. The growth in those segments was offset by a continued downturn in the Professional & Technical Services segment and a $1.9 million decline in U.S. dollar reported revenue due to changes in foreign currency exchange rates.

Operating income increased to $8.2 million for the second quarter of 2016 from $8.0 million for the second quarter of 2015. Operating income for the second quarter of 2016 included $0.5 million, or $0.02 per share, of severance costs related to continued cost cutting measures. Income before income taxes was $8.0 million for the second quarter of 2016 compared to $7.4 million for the second quarter of 2015. Net income was $4.9 million, or $0.29 per share, for the second quarter of 2016 compared to $4.7 million, or $0.27 per share, for the second quarter of 2015.

"The second quarter of 2016 showed improved operating results compared to last year, despite the continued softness in the Professional & Technical Services segment," stated Scott N. Greenberg, Chief Executive Officer. "Increased gross profit in the Learning Solutions segment, combined with both revenue and gross profit increases in the Sandy Training & Marketing segment, were the highlights of the quarter.  In addition, we are seeing more opportunities being generated from our global initiatives. We have also resumed our acquisition strategy and are currently evaluating  several opportunities. The continued development of our global platform positions GP Strategies as a leader in the global training and performance improvement industry."

Balance Sheet and Cash Flow Highlights

As of June 30, 2016, the Company had cash and cash equivalents of $14.9 million compared to $21.0 million as of December 31, 2015. The Company had $17.8 million of long-term debt outstanding as of June 30, 2016.  In addition, the Company had $42.5 million of short-term borrowings outstanding and $20.0 million of available borrowings under its line of credit as of June 30, 2016. 

Cash provided by operating activities was $10.0 million for the six months ended June 30, 2016 compared to $3.1 million for the same period in 2015. During the six months ended June 30, 2016 and 2015, the Company repurchased approximately 340,000 and 33,000 shares, respectively, of its common stock in the open market for a total cost of approximately $8.0 million and $1.1 million, respectively. As of June 30, 2016, there was approximately $6.1 million available for future repurchases under the buyback program.

Investor Call

The Company has scheduled an investor conference call for 10:00 a.m. EDT on July 28, 2016. In addition to prepared remarks from management, there will be a question and answer session on the call. The dial-in numbers for the live conference call are 800-771-6759 or 212-231-2931, using conference ID number 21815530. A telephone replay of the call will also be available beginning at 12:00 p.m. on July 28th, until 12:00 p.m. on August 11th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21815530. A replay will also be available on GP Strategies' website shortly after the conclusion of the call.

Presentation of Non-GAAP Information

This press release contains non-GAAP financial measures, including EBITDA (earnings before interest, income taxes, depreciation and amortization). The Company believes that EBITDA is useful to investors in evaluating the Company's results. This measure should be considered in addition to, and not as a replacement for, or superior to, either net income, as an indicator of the Company's operating performance, or cash flow, as a measure of the Company's liquidity. In addition, because EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. For a reconciliation of EBITDA to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation – EBITDA, along with related footnotes, below.

About GP Strategies

GP Strategies Corporation (NYSE: GPX) is a global performance improvement solutions provider of sales and technical training, eLearning solutions, management consulting and engineering services. GP Strategies' solutions improve the effectiveness of organizations by delivering innovative and superior training, consulting and business improvement services, customized to meet the specific needs of its clients. Clients include Fortune 500 companies, manufacturing, process and energy industries, and other commercial and government customers.  Additional information may be found at www.gpstrategies.com.

Forward-Looking Statements

We make statements in this press release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our periodic reports under the forward-looking statements and risk factors sections. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

TABLES FOLLOW

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)



Quarters ended

Six months ended

June 30,

June 30,







2016

2015

2016

2015






Revenue

$

125,542


$

125,665


$

241,298


$

240,918


Cost of revenue

105,198


105,589


203,027


201,707


Gross profit

20,344


20,076


38,271


39,211


Selling, general and administrative expenses

12,279


12,007


24,249


23,606


Gain (loss) on change in fair value of contingent consideration, net

88


(55)


(71)


(258)


Operating income

8,153


8,014


13,951


15,347


Interest expense

359


306


604


671


Other income (expense)

175


(310)


629


(535)


   Income before income tax expense

7,969


7,398


13,976


14,141


Income tax expense

3,056


2,684


5,263


5,320


Net income

$

4,913


$

4,714


$

8,713


$

8,821







 

Basic weighted average shares outstanding

16,677


17,178


16,718


17,169


Diluted weighted average shares outstanding

16,768


17,354


16,799


17,334


 

Per common share data:





Basic earnings per share

$

0.29


$

0.27


$

0.52


$

0.51


Diluted earnings per share

$

0.29


$

0.27


$

0.52


$

0.51







Other data:





EBITDA(1)

$

10,038


$

9,688


$

18,055


$

18,864



(1) The term EBITDA (earnings before interest, income taxes, depreciation and amortization) is a non-
GAAP financial measure that the Company believes is useful to investors in evaluating its results. For a
reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent, see
the Non-GAAP Reconciliation – EBITDA, along with related footnotes, below.

 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(In thousands)

(Unaudited)



Quarters ended

Six months ended

June 30,

June 30,







2016

2015

2016

2015

Revenue by segment:





Learning Solutions

$

52,706


$

50,755


$

102,612


$

102,584


Professional & Technical Services

26,024


30,066


51,853


59,963


Sandy Training & Marketing

27,374


25,199


49,198


39,928


Performance Readiness Solutions

19,438


19,645


37,635


38,443


Total revenue

$

125,542


$

125,665


$

241,298


$

240,918







Gross profit by segment:





Learning Solutions

$

9,572


$

8,387


$

19,276


$

16,734


Professional & Technical Services

4,106


5,829


7,990


12,242


Sandy Training & Marketing

3,830


3,427


6,281


5,403


Performance Readiness Solutions

2,836


2,433


4,724


4,832


Total gross profit

$

20,344


$

20,076


$

38,271


$

39,211







Supplemental Cash Flow Information:





Net cash provided by operating activities

$

1,419


$

3,197


$

9,982



 

3,125

Capital expenditures

(347)


(600)


(922)



(1,350)

Free cash flow

$

1,072


$

2,597


$

9,060



1,775

 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation – EBITDA (2)

(In thousands)

(Unaudited)



 

Quarters ended

Six months ended

June 30,

June 30,


2016


2015


2016


2015


Net income

$

4,913


$

4,714


$

8,713


$

8,821


Interest expense

359


306


604


671


Income tax expense

3,056


2,684


5,263


5,320


Depreciation and amortization

1,710


1,984


3,475


4,052


EBITDA

$

10,038


$

9,688


$

18,055


$

18,864



(2) Earnings before interest, income taxes, depreciation and amortization (EBITDA) is a widely used non-
GAAP financial measure of operating performance. It is presented as supplemental information that the
Company believes is useful to investors to evaluate its results because it excludes certain items that are
not directly related to the Company's core operating performance. EBITDA is calculated by adding back
to net income interest expense, income tax expense, depreciation and amortization. EBITDA should not
be considered as a substitute either for net income, as an indicator of the Company's operating
performance, or for cash flow, as a measure of the Company's liquidity. In addition, because EBITDA
may not be calculated identically by all companies, the presentation here may not be comparable to other
similarly titled measures of other companies.



 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)









June 30,


December 31,



2016


2015



(Unaudited)



Current assets:






Cash and cash equivalents


$

14,860



$

21,030



Accounts and other receivables


88,803



90,912



   Costs and estimated earnings in excess of
          billings on uncompleted contracts


45,621



46,061



Prepaid expenses and other current assets


10,163



9,173



Total current assets


159,447



167,176



Property, plant and equipment, net


5,401



6,245



Goodwill and other intangible assets, net


128,109



128,196



Other assets


2,913



733



Total assets


$

295,870



$

302,350









Current liabilities:






Short-term borrowings


$

42,482



$

34,084



 Current portion of long-term debt


13,333



13,333



Accounts payable and accrued expenses


55,444



61,071



   Billings in excess of costs and estimated
          
earnings on uncompleted contracts


15,901



18,366



Total current liabilities


127,160



126,854



Long-term debt


4,444



11,111



Other noncurrent liabilities


6,368



6,041



Total liabilities


137,972



144,006



Total stockholders' equity


157,898



158,344



Total liabilities and stockholders' equity


$

295,870



$

302,350



 

© 2016 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.

GP Strategies Corporation logo.

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SOURCE GP Strategies Corporation

For further information: Scott N. Greenberg, Chief Executive Officer, 443-367-9640; Sharon Esposito-Mayer, Chief Financial Officer, 443-367-9636; Ann M. Blank, Investor Relations, 443-367-9925

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