News Releases
GP Strategies Reports Fourth Quarter 2015 Earnings of $0.37 Per Share

COLUMBIA, Md., Feb. 25, 2016 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter and fiscal year ended December 31, 2015.

Overview of Fourth Quarter 2015 Results:

  • Revenue of $126.4 million for fourth quarter of 2015 compared to $125.2 million for fourth quarter of 2014
  • Earnings of $0.37 per share for fourth quarter of 2015, inclusive of $0.02 per share of restructuring charges and litigation settlement costs, compared to $0.43 per share for fourth quarter of 2014
  • Cash flow from operations of $16.0 million for fourth quarter of 2015 compared to $14.3 million for fourth quarter of 2014
  • EBITDA of $11.8 million for the fourth quarter of 2015, inclusive of $0.7 million of restructuring charges, litigation costs and loss on change in fair value of contingent consideration, compared to EBITDA of $13.5 million for fourth quarter of 2014

The Company's revenue increased $1.2 million or 1.0% during the fourth quarter of 2015 compared to the fourth quarter of 2014. Excluding the impact of foreign currency exchange rate changes and the decline in the Company's non-core alternative fuels business, revenue increased 5% during the fourth quarter of 2015.  Foreign currency exchange rate changes contributed to a $2.6 million revenue decline during the fourth quarter of 2015 compared to the same period in 2014. In addition, there was an expected $2.5 million revenue decrease in the Company's non-core alternative fuels business due to project completions in 2014.

Operating income declined $1.5 million to $10.1 million for the fourth quarter of 2015 compared to $11.6 million for the fourth quarter of 2014. The decrease in income is primarily attributable to a decrease in gross profit due to the completion of higher margin projects in 2014 combined with an increase in certain lower margin revenue streams in 2015. Foreign currency exchange rate fluctuations adversely impacted year over year U.S. dollar reported gross profit by $0.5 million during the fourth quarter of 2015. Included in operating income is $0.4 million, or $0.01 per share, of restructuring charges, consisting of severance expense in connection with the previously announced cost savings initiative to better align costs with revenue and improve operating margins. The Company also incurred costs of $0.3 million, or $0.01 per share, related to the settlement of a lawsuit in the fourth quarter of 2015 which are included in selling, general and administrative expenses. Net income was $6.3 million, or $0.37 per diluted share, for the fourth quarter of 2015 compared to $7.4 million, or $0.43 per diluted share, for the fourth quarter of 2014.

The Company reported revenue of $490.3 million for the year ended December 31, 2015, representing a 2.3% decrease over 2014 revenue of $501.9 million.  The net decline is largely attributable to a $30.0 million revenue decrease due to the completion of alternative fuels projects in 2014 and an $11.3 million revenue decrease due to unfavorable changes in foreign currency exchange rates, partially offset by an increase in global training services in 2015. Excluding these items, revenue increased $29.7 million or 6%.  Net income was $18.8 million, or $1.09 per diluted share, for the year ended December 31, 2015 compared to $27.1 million, or $1.43 per diluted share, for the year ended December 31, 2014.

"Our fourth quarter results showed the highest quarterly profitability in 2015 and strong cash flow from operations," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "We achieved overall organic growth despite the continued negative impact of foreign currency fluctuations and lower revenue in our non-core alternative fuels business. Our strong cash flow from operations allowed us to continue our share buyback program. We are also pursuing selective acquisitions that would expand or strengthen our existing lines of business or our geographic footprint, returning to a strategy which has contributed to GP Strategies' growth in prior years."

Balance Sheet and Cash Flow Highlights

As of December 31, 2015, the Company had cash and cash equivalents of $21.0 million compared to $14.5 million as of December 31, 2014. As of December 31, 2015, the Company had long-term debt outstanding of $24.4 million. In addition, the Company had $34.1 million of short-term borrowings outstanding and $29.3 million of available borrowings under its line of credit as of December 31, 2015.

Cash provided by operating activities was $25.6 million for the year ended December 31, 2015 compared to $31.0 million for the year ended December 31, 2014.  During the year ended December 31, 2015, the Company repurchased approximately 477,000 shares of its common stock in the open market for a total cost of approximately $12.3 million. As of December 31, 2015, there was approximately $14.0 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 25, 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 800-669-5017 or 303-223-4394, using conference ID number 21806337. A telephone replay of the call will also be available beginning at 12:00 p.m. on February 25th, until 12:00 p.m. on March 10th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21806337. 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 this non-GAAP financial measure 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 this non-GAAP financial measure 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,







2015

2014

2015

2014






Revenue

$

126,431


$

125,200


$

490,280


$

501,867


Cost of revenue

104,019


101,265


408,288


412,292


Gross profit

22,412


23,935


81,992


89,575


Selling, general and administrative expenses

11,889


12,194


47,748


47,108


Restructuring charges

356



1,551



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

(57)


(121)


(371)


1,392


Operating income

10,110


11,620


32,322


43,859


Interest expense

370


434


1,381


833


Other expense

(177)


(388)


(1,318)


(203)


   Income before income tax expense

9,563


10,798


29,623


42,823


Income tax expense

3,311


3,374


10,834


15,725


Net income

$

6,252


$

7,424


$

18,789


$

27,098







 

Basic weighted average shares outstanding

16,988


17,166


17,110


18,641


Diluted weighted average shares outstanding

17,119


17,336


17,264


18,887


 

Per common share data:





Basic earnings per share

$

0.37


$

0.43


$

1.10


$

1.45


Diluted earnings per share

$

0.37


$

0.43


$

1.09


$

1.43







Other data:





EBITDA(1)

$

11,784


$

13,513


$

38,869


$

53,414















(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,








2015


2014


2015


2014


Revenue by segment:





Learning Solutions

$

52,576


$

54,664


$

207,039


$

198,242


Professional & Technical Services

28,775


33,195


119,092


151,559


Sandy Training & Marketing

25,524


17,330


87,567


67,694


Performance Readiness Solutions

19,556


20,011


76,582


84,372


Total revenue

$

126,431


$

125,200


$

490,280


$

501,867







Gross profit by segment:





Learning Solutions

$

9,681


$

10,547


$

36,223


$

32,761


Professional & Technical Services

5,852


7,251


23,621


33,350


Sandy Training & Marketing

3,448


3,176


11,321


10,903


Performance Readiness Solutions

3,431


2,961


10,827


12,561


Total gross profit

$

22,412


$

23,935


$

81,992


$

89,575







Supplemental Cash Flow Information:





Net cash provided by operating activities

$

16,026


$

14,334


$

25,554


$

30,998


Capital expenditures

(526)


(442)


(2,357)


(2,757)


Free cash flow

$

15,500


$

13,892


$

23,197


$

28,241


 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation – EBITDA (1)

(In thousands)

(Unaudited)





 

Quarter ended

Year ended


December 31,

December 31,








2015


2014


2015


2014


Net income

$

6,252


$

7,424


$

18,789


$

27,098


Interest expense

370


434


1,381


833


Income tax expense (2)

3,311


3,374


10,834


15,725


Depreciation and amortization

1,851


2,281


7,865


9,758


EBITDA

$

11,784


$

13,513


$

38,869


$

53,414















(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.


(2)   Income tax expense includes a $0.3 million benefit in the fourth quarter of 2014 and $0.9 million benefit for the year ended December 31, 2014 resulting from a claim for a deduction under Internal Revenue Code Section 199 for the Domestic Production Deduction on the Company's 2013 U.S. federal income tax return which was not taken in previous years.

 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)











December 31,


December 31,



2015


2014



(Unaudited)



Current assets:





Cash and cash equivalents


$

21,030



$

14,541


Accounts and other receivables


90,912



99,638


   Costs and estimated earnings in excess of
               
billings on uncompleted contracts


46,061



30,211


Prepaid expenses and other current assets


9,173



15,967


Total current assets


167,176



160,357


Property, plant and equipment, net


6,245



7,864


Goodwill and other intangibles, net


128,196



136,292


Other assets


733



939


Total assets


$

302,350



$

305,452







Current liabilities:





Short-term borrowings


$

34,084



$

20,799


Current portion of long-term debt


13,333



13,333


Accounts payable and accrued expenses


61,071



59,018


   Billings in excess of costs and estimated
               
earnings on uncompleted contracts


18,366



23,670


Total current liabilities


126,854



116,820


Long-term debt


11,111



24,444


Other noncurrent liabilities


6,041



12,463


Total liabilities


144,006



153,727


Total stockholders' equity


158,344



151,725


Total liabilities and stockholders' equity


$

302,350



$

305,452


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

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SOURCE GP Strategies

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

Original text