2014

GP Strategies Reports Record Revenue for the First Quarter of 2014

COLUMBIA, Md., May 1, 2014 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended March 31, 2014.

Overview of First Quarter 2014 Results:

  • Revenue of $117.9 million for first quarter of 2014 compared to $101.4 million for first quarter of 2013, up 16%
  • Gross profit of $18.4 million for first quarter of 2014 compared to $16.2 million for first quarter of 2013, up 13%
  • EBITDA of $9.7 million for first quarter of 2014 compared to $9.5 million for first quarter of 2013
  • Diluted earnings per share of $0.22 for first quarter of 2014 compared to $0.26 for first quarter of 2013

The Company's revenue increased $16.5 million or 16.3% during the first quarter of 2014 compared to the first quarter of 2013. The Company achieved organic revenue growth of 12% during the first quarter due to strong performance by its Learning Solutions, Professional & Technical Services and Energy Services segments due to contracts with new clients and expansion of work with existing clients. Gross profit was $18.4 million, or 15.6% of revenue, for the first quarter of 2014 compared to $16.2 million, or 16.0% of revenue, for the first quarter of 2013. SG&A expense increased $2.5 million or 27.5% during the first quarter of 2014 largely due to increased costs associated with the Company's global expansion to support recent outsourcing contracts. Income before income tax expense was $7.1 million for the first quarter of 2014 compared to $7.5 million for the first quarter of 2013. Net income was $4.3 million, or $0.22 per share, for the first quarter of 2014 compared to $4.9 million, or $0.26 per share, for the first quarter of 2013.  

"In the first quarter of 2014, the Company achieved record revenue of approximately $117.9 million and increased EBITDA compared to the corresponding quarter of 2013," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "The quarterly results include the continued build-out of our infrastructure to support our growing global business, as well as expenses associated with establishing 14 subsidiaries along with local business support in countries in Europe, the Middle East, Asia and Latin America in the last six months, implementation of our accounting system in certain foreign jurisdictions and completion of the acquisition of the Effective-People and Effective-Learning companies. The Company is at a true inflection point and these investments enable us to execute on a global basis, which is becoming a key differentiator of GP Strategies in the training and performance improvement industry. We are starting to see increased global opportunities. These are exciting times for GP Strategies and we look forward to future success."

Balance Sheet and Cash Flow Highlights

As of March 31, 2014, the Company had cash and cash equivalents of $5.2 million compared to $5.6 million as of December 31, 2013. The Company had no long-term debt, $2.8 million of short-term borrowings outstanding and $46.1 million of available borrowings under its revolving line of credit as of March 31, 2014. Cash provided by operating activities was $0.7 million for the quarter ended March 31, 2014 compared to $5.3 million for the same period in 2013. The decrease in cash provided by operating activities was largely due to an increase in unbilled receivables during the first quarter of 2014.

Investor Call

The Company has scheduled an investor conference call for 10:00 a.m. ET on May 1, 2014. 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 800-617-7643 or 303-223-2681, using conference ID number 21715588. A telephone replay of the call will also be available beginning at 12:00 p.m. on May 1st, until 12:00 p.m. on May 15th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21715588.

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 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

(Dollars in thousands, except per share data)

(Unaudited)



Three months ended

March 31,





2014

2013




Revenue

$117,880

$101,373

Cost of revenue

99,525

85,192

Gross profit

18,355

16,181

Selling, general and administrative expenses

11,589

9,089

Gain on change in fair value of contingent 
              consideration, net

 

377

 

247

Operating income

7,143

7,339

Interest expense

205

100

Other income

189

229

Income before income tax expense

7,127

7,468

Income tax expense

2,810

2,543

Net income

$   4,317

$   4,925




Basic weighted average shares outstanding

19,141

19,060

Diluted weighted average shares outstanding

19,422

19,296




Per common share data:



  Basic earnings per share

$     0.23

$     0.26

  Diluted earnings per share

$     0.22

$     0.26




Other data:



        EBITDA (1)

$ 9,740

$ 9,526


(1) The term (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

(Dollars in thousands)

(Unaudited)



Quarters ended

March 31,





2014

2013

Revenue by segment:



Learning Solutions

$  52,967

$  42,734

Professional & Technical Services

19,910

18,015

Sandy Training & Marketing

14,258

14,998

Performance Readiness Solutions

13,009

15,500

Energy Services

17,736

10,126

Total revenue

$117,880

$101,373




Gross profit by segment:



Learning Solutions

$   6,603

$   7,171

Professional & Technical Services

4,114

2,684

Sandy Training & Marketing

1,910

1,926

Performance Readiness Solutions

1,733

1,978

Energy Services

3,995

2,422

Total gross profit

$  18,355

$  16,181



Operating income by segment:

Learning Solutions

$  1,048

$  3,212

Professional & Technical Services

2,361

1,058

Sandy Training & Marketing

577

629

Performance Readiness Solutions

501

579

Energy  Services

2,279

1,614

Gain on change in fair value of contingent 
             consideration, net

 

377

 

247

Total operating income

$ 7,143

$ 7,339


Supplemental Cash Flow Information:

Net cash provided by operating activities

$ 721

$ 5,316

Capital expenditures

(916)

(830)

Free cash flow

$    (195)

$ 4,486


 

 


GP STRATEGIES CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation –EBITDA (2)

(Dollars in thousands)

(Unaudited)



Three months ended

March 31,





2014

2013




Net income

$  4,317

$  4,925

Interest expense

205

100

Income tax expense

2,810

2,543

Depreciation and amortization

2,408

1,958

EBITDA

$  9,740

$  9,526

(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 substitutes 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)








March 31,


December 31,



2014


2013



(Unaudited)



Current assets:






   Cash and cash equivalents


$     5,227


$       5,647


   Accounts and other receivables


95,242


94,662


   Costs and estimated earnings in excess of

billings on uncompleted contracts


 

33,295


 

22,706


   Prepaid expenses and other current assets


14,857


13,523


      Total current assets


148,621


136,538


Property, plant and equipment, net


9,184


9,231


Goodwill and other intangibles, net


130,607


132,116


Other assets


2,116


2,271


      Total assets


$ 290,528


$   280,156








Current liabilities:






Short-term borrowings


$     2,777


$          407


   Accounts payable and accrued expenses


53,796


55,339


   Billings in excess of costs and estimated

earnings on uncompleted contracts    


 

26,618


 

22,062


      Total current liabilities


83,191


77,808


Other noncurrent liabilities


9,514


9,321


      Total liabilities


92,705


87,129


Total stockholders' equity


197,823


193,027


      Total liabilities and stockholders' equity


$ 290,528


$   280,156


 

© 2014 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.

Logo - http://photos.prnewswire.com/prnh/20130502/PH05881LOGO

SOURCE GP Strategies Corporation



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http://www.gpstrategies.com

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