GP STRATEGIES CORPORATION COLUMBIA, Md., April 28, 2016 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended March 31, 2016.
Overview:
-- Revenue of $115.8 million for first quarter of 2016 compared to $115.3
million for first quarter of 2015
-- Diluted earnings per share of $0.23 for first quarter of 2016 compared
to $0.24 per share for first quarter of 2015
-- Cash flow from operations of $8.6 million for first quarter of 2016
compared to $3.2 million for first quarter of 2015
-- Strong backlog of $254 million as of March 31, 2016 compared to $251
million as of March 31, 2015
The Company's revenue increased $0.5 million during the first quarter of 2016 compared to the first quarter of 2015. The net revenue increase is primarily attributable to a $7.1 million, or 48%, increase in the Sandy Training & Marketing segment due to new contracts with automotive customers, offset by a $4.1 million, or 14%, decline in the Professional & Technical Services segment which experienced a downturn during the first quarter due to project completions which were not replaced by awards anticipated to occur in the first quarter. In addition, changes in foreign currency exchange rates had a $1.9 million negative effect on U.S. dollar reported revenue during the first quarter of 2016 compared to the first quarter of 2015.
Operating income declined $1.5 million to $5.8 million for the first quarter of 2016 from $7.3 million for the first quarter of 2015 largely due to revenue and gross profit decreases in the Professional & Technical Services segment. Income before income taxes was $6.0 million for the first quarter of 2016 compared to $6.7 million for the first quarter of 2015. Net income was $3.8 million, or $0.23 per share, for the first quarter of 2016 compared to $4.1 million, or $0.24 per share, for the first quarter of 2015.
"While first quarter revenue increased slightly from last year, the downturn in the Professional & Technical Services group negatively impacted our overall results and we will take steps to improve its profitability," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "We experienced an unexpected drop in new contract awards, primarily from clients in the oil and gas industry. We hope to see those contracts awarded later in 2016. Our global initiatives and automotive offerings are gaining momentum, and we feel confident that second quarter revenue will be stronger than first quarter. Our global capabilities resulted in new awards in the quarter which increased our backlog. We also resumed our acquisition strategy, which we expect will contribute positively to our future results. Our global platform is a key differentiator for GP Strategies and we remain optimistic as we are starting to see increased activity and awards."
Balance Sheet and Cash Flow Highlights
As of March 31, 2016, the Company had cash and cash equivalents of $16.5 million compared to $21.0 million as of December 31, 2015. The Company had $21.1 million of long-term debt outstanding as of March 31, 2016. In addition, the Company had $33.1 million of short-term borrowings outstanding and $29.4 million of available borrowings under its line of credit as of March 31, 2016.
Cash provided by operating activities was $8.6 million for the three months ended March 31, 2016 compared to $3.2 million for the same period in 2015. During the three months ended March 31, 2016 and 2015, the Company repurchased approximately 181,000 and 10,000 shares, respectively, of its common stock in the open market for a total cost of approximately $4.3 million and $0.4 million, respectively. As of March 31, 2016, there was approximately $9.7 million available for future repurchases under the buyback program.
Investor Call
The Company has scheduled an investor conference call for 10:00 a.m. EDT on April 28, 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 800-748-8543 or 212-231-2931, using conference ID number 21810430. A telephone replay of the call will also be available beginning at 12:00 p.m. on April 28(th), until 12:00 p.m. on May 12(th). To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21810430. 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 backlog. The Company believes that EBITDA 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 EBITDA to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation - EBITDA, along with related footnotes, below. The Company calculates backlog as the total value of executed contracts (including subcontracts and purchase orders) minus the revenue recognized under those contracts through the backlog date. Although the conversion of backlog to revenue is subject to risks and uncertainties, the Company believes that backlog is a useful indicator regarding the future revenue of the Company from existing contracts. However, there is no standard system for compiling and calculating backlog, so our backlog may not be comparable with backlog measures reported by other companies. There is no GAAP financial measure comparable to backlog, therefore, a quantitative reconciliation of backlog is not provided.
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,
---------
2016 2015
---- ----
Revenue $115,756 $115,253
Cost of revenue 97,829 96,118
------ ------
Gross profit 17,927 19,135
Selling, general and administrative
expenses 11,970 11,599
Loss on change in fair value of (159) (203)
contingent consideration, net
Operating income 5,798 7,333
Interest expense 245 365
Other income (expense) 454 (225)
Income before income tax expense 6,007 6,743
Income tax expense 2,207 2,636
Net income $3,800 $4,107
====== ======
Basic weighted average shares
outstanding 16,758 17,159
Diluted weighted average shares
outstanding 16,831 17,313
Per common share data:
Basic earnings per share $0.23 $0.24
Diluted earnings per share $0.23 $0.24
Other data:
EBITDA(1) $8,017 $9,176
(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,
---------
2016 2015
---- ----
Revenue by segment:
Learning Solutions $49,906 $51,829
Professional &
Technical Services 25,829 29,897
Sandy Training &
Marketing 21,824 14,729
Performance Readiness
Solutions 18,197 18,798
Total revenue $115,756 $115,253
======== ========
Gross profit by segment:
Learning Solutions $9,704 $8,347
Professional &
Technical Services 3,884 6,413
Sandy Training &
Marketing 2,451 1,976
Performance Readiness
Solutions 1,888 2,399
Total gross profit $17,927 $19,135
======= =======
Supplemental Cash Flow Information:
Net cash provided by
operating activities $8,563 $3,197
Capital expenditures (575) (600)
---- ----
Free cash flow $7,988 $2,597
====== ======
GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation - EBITDA (2)
(In thousands)
(Unaudited)
Quarters ended
March 31,
---------
2016 2015
---- ----
Net income $3,800 $4,107
Interest expense 245 365
Income tax expense 2,207 2,636
Depreciation and amortization 1,765 2,068
EBITDA $8,017 $9,176
====== ======
(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 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,
2016 2015
---- ----
(Unaudited)
Current assets:
Cash and cash
equivalents $16,470 $21,030
Accounts and other
receivables 86,483 90,912
Costs and
estimated
earnings in
excess of 41,953 46,061
billings on uncompleted contracts
Prepaid expenses
and other current
assets 11,963 9,173
------ -----
Total current
assets 156,869 167,176
Property, plant
and equipment,
net 5,960 6,245
Goodwill and other
intangibles, net 130,866 128,196
Other assets 822 733
--- ---
Total assets $294,517 $302,350
======== ========
Current liabilities:
Short-term
borrowings $33,092 $34,084
Current portion of
long-term debt 13,333 13,333
Accounts payable
and accrued
expenses 57,057 61,071
Billings in excess
of costs and
estimated 17,950 18,366
earnings on uncompleted contracts
---
Total current
liabilities 121,432 126,854
Long term debt 7,778 11,111
Other noncurrent
liabilities 6,356 6,041
----- -----
Total liabilities 135,566 144,006
Total
stockholders'
equity 158,951 158,344
------- -------
Total liabilities
and stockholders'
equity $294,517 $302,350
======== ========
© 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
