News Releases
GP Strategies Reports Fourth Quarter 2016 Earnings of $0.40 Per Share

COLUMBIA, Md., Feb. 28, 2017 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter and fiscal year ended December 31, 2016.

Overview of Fourth Quarter 2016 Results:

  • Revenue of $127.3 million for fourth quarter of 2016 compared to $126.4 million for fourth quarter of 2015
  • Gross profit of $21.9 million for fourth quarter of 2016 compared to $22.4 million for fourth quarter of 2015
  • Earnings of $0.40 per share for fourth quarter of 2016 compared to $0.37 per share for fourth quarter of 2015

The Company's revenue increased $0.9 million or 1% during the fourth quarter of 2016 compared to the fourth quarter of 2015. The Company reported revenue increases in three out of its four segments due to both organic growth and acquisitions. This revenue growth was mostly offset by a continued decline in the Professional & Technical Services segment. In addition, foreign currency exchange rate declines resulted in a $5.4 million decrease in U.S. dollar reported revenue during the fourth quarter of 2016.

Operating income decreased $0.6 million to $9.5 million for the fourth quarter of 2016 from $10.1 million for the fourth quarter of 2015. The decrease was primarily due to a $0.5 million decline in gross profit and a $0.5 million increase in SG&A expenses, partially offset by a $0.4 million decrease in restructuring charges incurred in the fourth quarter of 2015 which did not recur in 2016. SG&A expenses for the fourth quarter of 2016 included $0.3 million of legal expenses related to a recently completed acquisition.

Income before income taxes decreased to $8.4 million for the fourth quarter of 2016 from $9.6 million for the fourth quarter of 2015. Foreign currency exchange rate fluctuations adversely impacted year over year U.S. dollar reported pre-tax income by $0.5 million during the fourth quarter of 2016. In addition, other expense for the fourth quarter of 2016 includes $0.5 million of foreign currency transaction losses. When combined with the translation impact on income, foreign currency rate changes adversely impacted pre-tax income by a total of $1.0 million.

Income tax expense decreased $1.6 million or 48.2% during the fourth quarter of 2016 primarily due to a change in the mix of taxable income from higher taxing jurisdictions to lower taxing jurisdictions. Net income was $6.7 million, or $0.40 per diluted share, for the fourth quarter of 2016 compared to $6.3 million, or $0.37 per diluted share, for the fourth quarter of 2015.

"Fourth quarter 2016 revenue increased despite the $5.4 million impact of foreign currency exchange rate declines," stated Scott N. Greenberg, Chief Executive Officer. "This reflects increased revenue in three of our four operating segments with particularly strong growth in Learning Solutions which  grew revenue to $55.0 million during the fourth quarter of 2016 from $52.6 million in 2015, despite a $3.9 million negative effect of foreign currency. While we have continued to see a year over year downturn in our Professional & Technical Services segment, its revenue has stabilized on a  sequential quarterly basis. In addition, we recently completed the acquisition of McKinney Rogers, giving GP Strategies further inroads to assist clients at the C-suite level execute their business strategies."

Balance Sheet and Cash Flow Highlights

As of December 31, 2016, the Company had cash and cash equivalents of $16.3 million compared to $21.0 million as of December 31, 2015. As of December 31, 2016, the Company had long-term debt outstanding of $40.0 million. In addition, the Company had $17.7 million of short-term borrowings outstanding and $76.6 million of available borrowings under its line of credit as of December 31, 2016.

Cash provided by operating activities was $18.1 million for the year ended December 31, 2016 compared to $25.6 million for the year ended December 31, 2015.  During the year ended December 31, 2016, the Company repurchased approximately 340,000 shares of its common stock in the open market for a total cost of approximately $8.0 million. As of December 31, 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. ET on February 28, 2017. 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 800-926-4420 or 212-231-2911, using conference ID number 21847036. A telephone replay of the call will also be available beginning at 12:00 p.m. on February 28th, until 12:00 p.m. on March 14th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21847036. 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) and free cash flow (cash flow from operating activities less capital expenditures). The Company believes these non-GAAP financial measures are useful to investors in evaluating the Company's results. These measures 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 these measures 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)



Quarter ended

Year ended

December 31,

December 31,







2016

2015

2016

2015






Revenue

$

127,283


$

126,431


$

490,559


$

490,280


Cost of revenue

105,401


104,019


410,402


408,288


Gross profit

21,882


22,412


80,157


81,992


Selling, general and administrative expenses

12,352


11,889


48,597


47,748


Restructuring charges


356



1,551


Loss on change in fair value of

contingent consideration, net

(62)


(57)


(136)


(371)


Operating income

9,468


10,110


31,424


32,322


Interest expense

598


370


1,568


1,381


Other income (expense)

(423)


(177)


178


(1,318)


   Income before income tax expense

8,447


9,563


30,034


29,623


Income tax expense

1,715


3,311


9,787


10,834


Net income

$

6,732


$

6,252


$

20,247


$

18,789







 

Basic weighted average shares outstanding

16,705


16,988


16,696


17,110


Diluted weighted average shares outstanding

16,820


17,119


16,791


17,264


 

Per common share data:





Basic earnings per share

$

0.40


$

0.37


$

1.21


$

1.10


Diluted earnings per share

$

0.40


$

0.37


$

1.21


$

1.09







Other data:





EBITDA(1)

$

10,538


$

11,784


$

38,064


$

38,869















(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)



Quarter ended

Year ended

December 31,

December 31,







2016

2015

2016

2015

Revenue by segment:





Learning Solutions

$

55,007

$

52,576

$

208,998

$

207,039

Professional & Technical Services

24,943

28,775

101,907

119,092

Sandy Training & Marketing

25,958

25,524

101,768

87,567

Performance Readiness Solutions

21,375

19,556

77,886

76,582

Total revenue

$

127,283

$

126,431

$

490,559

$

490,280










Gross profit by segment:





Learning Solutions

$

9,882

$

9,681

$

38,954

$

36,223

Professional & Technical Services

4,217

5,852

15,803

23,621

Sandy Training & Marketing

4,281

3,448

14,181

11,321

Performance Readiness Solutions

3,502

3,431

11,219

10,827

Total gross profit

$

21,882

$

22,412

$

80,157

$

81,992










Supplemental Cash Flow Information:





Net cash provided by operating activities

$

6,179

$

16,026

$

18,077

$

25,554

Capital expenditures

(218)

(526)

(1,402)

(2,357)

Free cash flow

$

5,961

$

15,500

$

16,675

$

23,197

 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation – EBITDA (1)

(In thousands)

(Unaudited)



Quarter ended

Year ended

December 31,

December 31,







2016

2015

2016

2015

Net income

$

6,732

$

6,252

$

20,247

$

18,789

Interest expense

598

370

1,568

1,381

Income tax expense

1,715

3,311

9,787

10,834

Depreciation and amortization

1,493

1,851

6,462

7,865

EBITDA

$

10,538

$

11,784

$

38,064

$

38,869










(1)   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)







December 31,


December 31,



2016


2015



(Unaudited)



Current assets:





Cash and cash equivalents


$

16,346



$

21,030


Accounts and other receivables


105,549



90,912


   Costs and estimated earnings in excess of
               
billings on uncompleted contracts


39,318



46,061


Prepaid expenses and other current assets


11,481



9,173


Total current assets


172,694



167,176


Property, plant and equipment, net


4,547



6,245


Goodwill and other intangibles, net


133,597



128,196


Other assets


4,763



1,352


Total assets


$

315,601



$

302,969







Current liabilities:





Short-term borrowings


$

17,694



$

34,084


Current portion of long-term debt


12,000



13,333


Accounts payable and accrued expenses


64,596



61,071


   Billings in excess of costs and estimated
               
earnings on uncompleted contracts


18,545



18,366


Total current liabilities


112,835



126,854


Long-term debt


28,000



11,111


Other noncurrent liabilities


7,270



6,660


Total liabilities


148,105



144,625


Total stockholders' equity


167,496



158,344


Total liabilities and stockholders' equity


$

315,601



$

302,969


 

 

© 2017 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.

 

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

Original text


AddThis Sharing
SHARES