GP STRATEGIES CORPORATION COLUMBIA, Md., May 2, 2017 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended March 31, 2017.
Overview:
-- Revenue of $122.4 million for first quarter of 2017 compared to $115.8
million for first quarter of 2016
-- Operating income of $6.6 million for first quarter of 2017 compared to
$5.8 million for first quarter of 2016
-- Diluted earnings per share of $0.24 for first quarter of 2017 compared
to $0.23 per share for first quarter of 2016
The Company's revenue increased $6.7 million or 6% during the first quarter of 2017 compared to the same quarter in 2016. The revenue growth was attributable to a 25% increase in the Performance Readiness Solutions segment, due to both acquisitions and organic growth, and a 13% increase in the Sandy Training & Marketing segment due to increased training services for automotive customers. Foreign currency exchange rate declines resulted in a total $3.7 million or 3% decrease in U.S. dollar reported revenue during the first quarter of 2017 across all segments.
Gross profit increased $1.5 million or 8% to $19.4 million or 15.8% of revenue for the first quarter of 2017 compared to $17.9 million or 15.5% of revenue for the first quarter of 2016. Operating income increased 14% to $6.6 million for the first quarter of 2017 from $5.8 million for the first quarter of 2016. Income before income taxes was $6.1 million for the first quarter of 2017 compared to $6.0 million for the first quarter of 2016. Net income was $4.1 million, or $0.24 per share, for the first quarter of 2017 compared to $3.8 million, or $0.23 per share, for the first quarter of 2016.
"GP Strategies reported first quarter 2017 revenue of $122.4 million, which was a record for the Company's first quarter," stated Scott N. Greenberg, Chief Executive Officer. "Organic revenue growth and revenue from recently completed acquisitions more than offset a $3.7 million decline from foreign currency fluctuations. The Performance Readiness Solutions and Sandy Training & Marketing segments both paved the way for the revenue growth. Our pre-tax income for the first quarter included $0.4 million of financial system implementation costs and $0.3 million of legal expenses relating to acquisitions. In the quarter, the Company continued its acquisition strategy with the purchase of McKinney Rogers in February and the acquisition of Emantras, which was completed in April."
Balance Sheet and Cash Flow Highlights
As of March 31, 2017, the Company had cash and cash equivalents of $15.5 million compared to $16.3 million as of December 31, 2016. The Company had $37.0 million of long-term debt outstanding as of March 31, 2017. In addition, the Company had $23.5 million of short-term borrowings outstanding and $71.3 million of available borrowings under its line of credit as of March 31, 2017.
Cash provided by operating activities was $4.1 million for the three months ended March 31, 2017 compared to $8.6 million for the same period in 2016. During the three months ended March 31, 2017 and 2016, the Company repurchased approximately 70,000 and 181,000 shares, respectively, of its common stock in the open market for a total cost of approximately $1.7 million and $4.3 million, respectively. As of March 31, 2017, there was approximately $4.4 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 May 2, 2017. 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 877-256-3282 or 212-231-2933, using conference ID number 21851112. A telephone replay of the call will also be available beginning at 12:00 p.m. on May 2(nd), until 12:00 p.m. on May 16(th). To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21851112. 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 free cash flow (cash flow from operating activities less capital expenditures). The Company believes these non-GAAP financial measures are useful to investors in evaluating the Company's results. These measures 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 these measures 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.
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
March 31,
2017 2016
---- ----
Revenue $122,447 $115,756
Cost of revenue 103,059 97,829
------- ------
Gross profit 19,388 17,927
Selling, general and administrative expenses 12,994 11,970
Gain (loss) on change in fair value of 197 (159)
contingent consideration, net
Operating income 6,591 5,798
Interest expense 438 245
Other income (expense) (75) 454
Income before income tax expense 6,078 6,007
Income tax expense 1,992 2,207
Net income $4,086 $3,800
====== ======
16,741 16,758
Basic weighted average shares outstanding
Diluted weighted average shares outstanding 16,841 16,831
Per common share data:
Basic earnings per share $0.24 $0.23
Diluted earnings per share $0.24 $0.23
Other data:
EBITDA(1) $7,959 $8,017
(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,
2017 2016
---- ----
Revenue by segment:
Learning Solutions $49,746 $49,906
Professional & Technical Services 25,309 25,829
Sandy Training & Marketing 24,601 21,824
Performance Readiness Solutions 22,791 18,197
Total revenue $122,447 $115,756
======== ========
Gross profit by segment:
Learning Solutions $8,756 $9,704
Professional & Technical Services 4,599 3,884
Sandy Training & Marketing 2,876 2,451
Performance Readiness Solutions 3,157 1,888
Total gross profit $19,388 $17,927
======= =======
Supplemental Cash Flow Information:
Net cash provided by operating
activities $4,118 $8,563
Capital expenditures (525) (575)
---- ----
Free cash flow $3,593 $7,988
====== ======
GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation - EBITDA (2)
(In thousands)
(Unaudited)
Quarters ended
March 31,
2017 2016
---- ----
Net income $4,086 $3,800
Interest expense 438 245
Income tax expense 1,992 2,207
Depreciation and amortization 1,443 1,765
EBITDA $7,959 $8,017
====== ======
(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,
2017 2016
---- ----
(Unaudited)
Current assets:
Cash and cash equivalents $15,452 $16,346
Accounts and other receivables 100,273 105,549
Costs and estimated earnings in excess of 47,327 39,318
billings on uncompleted contracts
Prepaid expenses and other current assets 11,529 11,481
------ ------
Total current assets 174,581 172,694
Property, plant and equipment, net 4,558 4,547
Goodwill and other intangible assets, net 139,397 133,597
Other assets 6,006 4,763
----- -----
Total assets $324,542 $315,601
======== ========
Current liabilities:
Short-term borrowings $23,529 $17,694
Current portion of long-term debt 12,000 12,000
Accounts payable and accrued expenses 61,149 64,596
Billings in excess of costs and estimated 21,677 18,545
earnings on uncompleted contracts
Total current liabilities 118,355 112,835
Long-term debt 25,000 28,000
Other noncurrent liabilities 8,903 7,270
----- -----
Total liabilities 152,258 148,105
Total stockholders' equity 172,284 167,496
------- -------
Total liabilities and stockholders' equity $324,542 $315,601
======== ========
© 2017 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 Corporation
