GP Strategies Reports Record Revenue of $102 Million for Second Quarter of 2012

News provided by

GP Strategies

Aug 02, 2012, 08:00 ET

ELKRIDGE, Md., Aug. 2, 2012 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2012.

Overview of Second Quarter 2012 Results:

  • Revenue of $102.3 million for second quarter of 2012 compared to $86.0 million for second quarter of 2011
  • Operating income of $9.9 million for second quarter of 2012 compared to $7.8 million for second quarter of 2011
  • Diluted earnings per share of $0.31 for second quarter of 2012 compared to $0.25 per share for second quarter of 2011
  • EBITDA of $12.0 million for second quarter of 2012 compared to $9.6 million for second quarter of 2011

The Company's revenue increased 19% or $16.3 million during the second quarter of 2012 compared to the second quarter of 2011.  Revenue grew organically by 14% or $11.9 million during the second quarter. All of the Company's operating segments achieved organic growth during the quarter, and the Sandy Training & Marketing and Learning Solutions segments achieved double-digit growth during the quarter. The improved results were driven by increased training services for both new and existing customers across a variety of industries, with the largest increases in the automotive and financial services sectors. Operating income increased 27% to $9.9 million for the second quarter of 2012 from $7.8 million for the second quarter of 2011. Net income was $6.0 million for the second quarter of 2012 compared to $4.7 million for the second quarter of 2011. The second quarter 2011 results included a $1.0 million non-recurring gain on the reversal of a deferred rent liability, which resulted in $0.03 per share for both the three and six months ended June 30, 2011 after being tax effected.   

"I am pleased to report that GP Strategies' strong financial performance continued into the second quarter of 2012," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "Our revenue growth of 19% consisted of 14% organic growth combined with strong performance from our 2011 acquisitions. The revenue growth was complemented by improved margins, including EBITDA of 12% of revenue. We will continue to look for opportunities to deploy operating cash flow in our acquisition strategy, which we believe will further enhance our platform of services, products and global delivery capabilities."

Balance Sheet and Cash Flow Highlights

As of June 30, 2012, the Company had cash and cash equivalents of $7.5 million compared to $4.2 million as of December 31, 2011. The Company had no long-term debt outstanding as of June 30, 2012 and had $2.0 million of short-term borrowings under its $50 million line of credit as of June 30, 2012. Cash provided by operating activities was $4.4 million for the six months ended June 30, 2012 compared to $4.8 million for the same period in 2011.

Investor Call

The Company has scheduled an investor conference call for 10:00 a.m. ET on August 2, 2012. 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 800-931-6429 or 212-231-2937, using conference ID number 21600922. A telephone replay of the call will also be available beginning at 12:00 p.m. on August 2nd, until 12:00 p.m. on August 16th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21600922.

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)

Quarters ended

Six months ended

June 30,

June 30,




2012

2011

2012

2011



Revenue

$102,311

$  86,034

$195,916

$ 150,327

Cost of revenue

83,306

71,323

161,299

124,824

  Gross profit

19,005

14,711

34,617

25,503

Selling, general and administrative expenses

9,042

7,863

17,330

14,611

Gain on reversal of deferred rent liability

-

1,041

-

1,041

Gain (loss) on change in fair value of

contingent consideration, net

(31)

(43)

(71)

203

Operating income

9,932

7,846

17,216

12,136

Interest expense

60

65

100

98

Other income

100

160

190

341

   Income before income tax expense

9,972

7,941

17,306

12,379

Income tax expense

3,988

3,230

6,938

5,078

   Net income

$   5,984

$   4,711

$  10,368

$   7,301



Basic weighted average shares outstanding

18,898

18,776

18,864

18,750

Diluted weighted average shares outstanding

19,250

19,049

19,219

18,971

Per common share data:



  Basic earnings per share

$    0.32

$    0.25

$     0.55

$     0.39

  Diluted earnings per share

$    0.31

$    0.25

$     0.54

$     0.38

Other data:

  EBITDA (1)

$   11,980

$   9,554

$   21,212

$   15,091

(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,




2012

2011

2012

2011

Revenue by segment:



Learning Solutions

$  37,535

$  31,438

$  73,439

$  61,433

Professional & Technical Services

22,503

21,980

46,953

39,241

Sandy Training & Marketing

20,883

15,002

34,205

26,138

RWD

15,297

12,012

29,128

12,012

Energy Services

6,093

5,602

12,191

11,503

Total revenue

$  102,311

$  86,034

$ 195,916

$150,327

Gross profit by segment:



Learning Solutions

$  7,218

$  5,071

$  14,063

$  9,923

Professional & Technical Services

3,638

3,710

7,207

6,350

Sandy Training & Marketing

3,652

2,213

5,194

3,801

RWD

2,592

1,894

4,167

1,894

Energy Services

1,905

1,823

3,986

3,535

Total gross profit

$  19,005

$  14,711

$ 34,617

$ 25,503

Operating income by segment:



Learning Solutions

$  3,792

$  1,981

$  7,338

$  3,649

Professional & Technical Services

1,627

2,008

3,188

2,931

Sandy Training & Marketing

1,905

861

2,208

1,161

RWD

1,206

582

1,451

582

Energy Services

1,433

1,416

3,102

2,569

Gain on reversal of deferred rent liability

-

1,041

-

1,041

Gain (loss) on change in fair value of

contingent consideration, net

(31)

(43)

(71)

203

Total operating income

$  9,932

$  7,846

$  17,216

$  12,136

Supplemental Cash Flow Information:



Net cash provided by (used in) operating activities

$  (2,559)

$  2,418

$   4,404

$   4,794

Capital expenditures

(542)

(773)

(1,467)

(1,531)

Free cash flow

$  (3,101)

$  1,645

$   2,937

$   3,263

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation – EBITDA (2)
(In thousands)
(Unaudited)

Quarters ended

Six months ended

June 30,

June 30,




2012

2011

2012

2011

Net income

$  5,984

$  4,711

$ 10,368

$   7,301

Interest expense

60

65

100

98

Income tax expense

3,988

3,230

6,938

5,078

Depreciation and amortization

1,948

1,548

3,806

2,614

EBITDA

$  11,980

$  9,554

$ 21,212

$ 15,091

(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)





June 30,

December 31,

2012

2011

(Unaudited)

Current assets:




   Cash and cash equivalents

$     7,499

$       4,151

   Accounts and other receivables

70,805

67,134

   Costs and estimated earnings in excess of

billings on uncompleted contracts

24,537

15,576

   Prepaid expenses and other current assets

10,157

8,863

      Total current assets

112,998

95,724

Property, plant and equipment, net

5,788

5,562

Goodwill and other intangibles, net

109,597

108,460

Other assets

1,819

1,830

      Total assets

$ 230,202

$   211,576






Current liabilities:




   Short-term borrowings

$   1,988

$              --

Accounts payable and accrued expenses

47,348

42,500

   Billings in excess of costs and estimated

earnings on uncompleted contracts    


16,404

17,266

      Total current liabilities

65,740

59,766

Other noncurrent liabilities

9,038

8,416

      Total liabilities

74,778

68,182

Total stockholders' equity

155,424

143,394

      Total liabilities and stockholders' equity

$ 230,202

$   211,576

© 2012 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