GP STRATEGIES CORPORATION COLUMBIA, Md., May 5, 2015 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended March 31, 2015.
Overview of First Quarter 2015 Results:
-- Revenue of $115.3 million for first quarter of 2015 compared to $117.9
million for first quarter of 2014
-- Gross profit of $19.1 million, or 16.6% of revenue for first quarter of
2015 compared to $18.4 million, or 15.6% of revenue for first quarter of
2014
-- Diluted earnings per share of $0.24 for first quarter of 2015 compared
to $0.22 per share for first quarter of 2014
The Company's revenue decreased $2.6 million or 2% during the first quarter of 2015 compared to the first quarter of 2014. The decline in revenue is due to a $9.7 million revenue decrease in our alternative fuels business due to the completion of projects in 2014 and a $2.4 million revenue decrease due to unfavorable changes in foreign currency exchange rates during the first quarter of 2015 compared to the same period in 2014. Excluding both of these items, the Company's revenue increased $9.4 million or 8% largely due to growth in the Learning Solutions segment which reported 14% organic revenue growth during the first quarter of 2015.
Operating income was $7.3 million for first quarter of 2015 compared to $7.1 million for first quarter of 2014. Included in operating income is a $0.2 million loss on the change in fair value of contingent consideration during the first quarter of 2015 compared to a $0.4 million gain in the first quarter of 2014. Excluding the net gain (loss) on contingent consideration in both quarters, operating income increased 11% or $0.8 million during the first quarter of 2015 due to improved gross margins. In addition, other expense included $0.5 million of foreign currency transaction losses during the first quarter of 2015. Net income was $4.1 million, or $0.24 per diluted share, for the first quarter of 2015 compared to $4.3 million, or $0.22 per diluted share, for the first quarter of 2014.
"In the first quarter of 2015, the Company continued to report improved results, excluding the expected downturn in its non-core alternative fuels operations," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "Our Learning Solutions segment achieved double-digit organic growth, and overall the Company's gross margins improved, demonstrating that we are seeing a return on our investments in global expansion. In the first quarter, we realigned our operating groups, centralizing our service offerings to better respond to our customers' global needs, and to improve our internal efficiencies to leverage common technologies and practices across the enterprise. We believe our expanded infrastructure and the ability to deliver globally allow us to better support our existing multi-national client base, as well as win new business for our comprehensive service offerings."
Balance Sheet and Cash Flow Highlights
As of March 31, 2015, the Company had cash and cash equivalents of $12.1 million compared to $14.5 million as of December 31, 2014. The Company had $34.4 million of long-term debt outstanding as of March 31, 2015. In addition, the Company had $21.5 million of short-term borrowings outstanding and $42.6 million of available borrowings under its line of credit as of March 31, 2015.
Cash provided by operating activities was $3.2 million for the three months ended March 31, 2015 compared to $0.7 million for the same period in 2014.
Investor Call
The Company has scheduled an investor conference call for 10:00 a.m. EDT on May 5, 2015. 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 800-757-8521 or 212-231-2930, using conference ID number 21767762. A telephone replay of the call will also be available beginning at 12:00 p.m. on May 5(th), until 12:00 p.m. on May 19(th). To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21767762. 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)
Quarters ended
March 31,
---------
2015 2014
---- ----
Revenue $115,253 $117,880
Cost of revenue 96,118 99,525
------ ------
Gross profit 19,135 18,355
Selling, general
and administrative
expenses 11,599 11,589
Gain (loss) on
change in fair
value of (203) 377
contingent consideration, net
Operating income 7,333 7,143
Interest expense 365 205
Other income
(expense) (225) 189
Income before
income tax expense 6,743 7,127
Income tax expense 2,636 2,810
Net income $4,107 $4,317
====== ======
Basic weighted
average shares
outstanding 17,159 19,141
Diluted weighted
average shares
outstanding 17,313 19,422
Per common share data:
Basic earnings per
share $0.24 $0.23
Diluted earnings
per share $0.24 $0.22
Other data:
EBITDA(1) $9,176 $9,740
(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
March 31,
---------
2015 2014
---- ----
Revenue by segment:
Learning Solutions (2) $51,829 $43,739
Professional &
Technical Services (2) 29,897 40,269
Sandy Training &
Marketing 14,729 14,258
Performance Readiness
Solutions (2) 18,798 19,614
Total revenue $115,253 $117,880
======== ========
Gross profit by segment:
Learning Solutions (2) $8,347 $6,369
Professional &
Technical Services (2) 6,413 7,940
Sandy Training &
Marketing 1,976 1,910
Performance Readiness
Solutions (2) 2,399 2,136
Total gross profit $19,135 $18,355
======= =======
Operating income by segment:
Learning Solutions (2) $3,154 $1,825
Professional &
Technical Services (2) 3,799 4,391
Sandy Training &
Marketing 399 577
Performance Readiness
Solutions (2) 184 (27)
Gain (loss) on change
in fair value of (203) 377
contingent consideration, net
Total operating income $7,333 $7,143
====== ======
Supplemental Cash Flow Information:
Net cash provided by
operating activities $3,197 $721
Capital expenditures (600) (916)
---- ----
Free cash flow $2,597 $(195)
====== =====
(2) Effective January 1, 2015, the
Company made changes to its
organizational structure and
transferred the management
responsibility of certain
business units between segments,
which changed the composition of
certain of its operating
segments. The changes primarily
consisted of: (i) the Energy
Services group became part of the
Professional & Technical Services
segment; (ii) certain business
units providing leadership
development offerings were
transferred from the Learning
Solutions segment to the
Performance Readiness Solutions
segment, (iii) a business unit
which predominantly provides
content development services to
U.S. government and commercial
clients transferred from the
Professional & Technical Services
segment to the Performance
Readiness solutions segment; and
(iv) two business units providing
engineering and technical
services in Europe were
transferred from the Learning
Solutions segment to the
Professional & Technical Services
segment. The Company
reclassified the segment
financial information above for
the prior year period to reflect
these changes and conform to the
current year's presentation.
GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation - EBITDA (3)
(In thousands)
(Unaudited)
Quarters ended
March 31,
---------
2015 2014
---- ----
Net income $4,107 $4,317
Interest expense 365 205
Income tax expense 2,636 2,810
Depreciation and
amortization 2,068 2,408
EBITDA $9,176 $9,740
====== ======
(3) 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)
March 31, December 31,
2015 2014
---- ----
(Unaudited)
Current assets:
Cash and cash equivalents $12,135 $14,541
Accounts and other receivables 86,564 99,638
Costs and estimated earnings in excess
of 36,091 30,211
billings on uncompleted contracts
Prepaid expenses and other current
assets 19,782 15,967
------ ------
Total current assets 154,572 160,357
Property, plant and equipment, net 7,447 7,864
Goodwill and other intangibles, net 131,682 136,292
Other assets 954 939
--- ---
Total assets $294,655 $305,452
======== ========
Current liabilities:
Short-term borrowings $21,534 $20,799
Current portion of long-term debt 13,333 13,333
Accounts payable and accrued expenses 56,425 59,018
Billings in excess of costs and
estimated 19,847 23,670
earnings on uncompleted contracts
Total current liabilities 111,139 116,820
Long term debt 21,111 24,444
Other noncurrent liabilities 10,161 12,463
------ ------
Total liabilities 142,411 153,727
Total stockholders' equity 152,244 151,725
------- -------
Total liabilities and stockholders'
equity $294,655 $305,452
======== ========
© 2015 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.
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