GP STRATEGIES CORPORATION 
By ELKRIDGE, Md., May 2, 2013 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended March 31, 2013.
Overview of First Quarter 2013 Results:
-- Revenue of $101.4 million for first quarter of 2013 compared to $93.6
million for first quarter of 2012
-- Diluted earnings per share of $0.26 for first quarter of 2013 compared
to $0.23 per share for first quarter of 2012
-- EBITDA of $9.5 million for first quarter of 2013 compared to $9.2
million for first quarter of 2012
The Company's revenue increased $7.8 million or 8.3% during the first quarter of 2013 compared to the first quarter of 2012. The revenue growth is primarily attributable to acquisitions completed during 2012. The Company also reported overall organic growth during the quarter, with notable performance by the Sandy and Performance Readiness Solutions segments which achieved double-digit organic revenue growth in the quarter, offset by revenue declines in the Professional & Technical Services segment due to project completions. Gross profit was $16.2 million, or 16.0% of revenue, for the first quarter of 2013 compared to $15.6 million, or 16.7% of revenue, for the first quarter of 2012. The decline in gross margin is largely due to a $0.9 million increase in medical benefits expense due to higher than usual claims under our self-insured employee medical plan during the first quarter of 2013. Income before income tax expense was $7.5 million for the first quarter of 2013 compared to $7.3 million for the first quarter of 2012. Net income was $4.9 million, or $0.26 per share, for the first quarter of 2013 compared to $4.4 million, or $0.23 per share, for the first quarter of 2012. Net income for the first quarter of 2013 includes a $0.4 million non-recurring income tax benefit.
"GP Strategies continued to show overall improvement of its results in the first quarter of 2013," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "We have developed a unique platform in the training industry through the combination of our organic operations supplemented by strategic acquisitions. In the first quarter, the Company increased its business development efforts to support larger outsourcing opportunities and invested in its proprietary software technology at a greater level than in the past. We are optimistic that these investments will translate into growth in future quarters."
Balance Sheet and Cash Flow Highlights
As of March 31, 2013, the Company had cash and cash equivalents of $11.0 million compared to $7.8 million as of December 31, 2012. The Company had no short-term borrowings or long-term debt outstanding as of March 31, 2013. Cash provided by operating activities was $5.3 million for the quarter ended March 31, 2013 compared to $7.0 million for the same period in 2012.
Investor Call
The Company has scheduled an investor conference call for 10:00 a.m. ET on May 2, 2013. 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 800-754-1336 or 212-231-2932, using conference ID number 21656158. 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 21656158.
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,
---------
2013 2012
---- ----
Revenue $101,373 $93,605
Cost of revenue 85,192 77,993
------ ------
Gross profit 16,181 15,612
Selling, general and administrative
expenses 9,089 8,288
Gain (loss) on change in fair value
of contingent 247 (40)
consideration, net
---
Operating income 7,339 7,284
Interest expense 100 40
Other income 229 90
---
Income before income tax expense 7,468 7,334
Income tax expense 2,543 2,950
----- -----
Net income $4,925 $4,384
====== ======
Basic weighted average shares
outstanding 19,060 18,830
Diluted weighted average shares
outstanding 19,296 19,188
Per common share data:
Basic earnings per share $0.26 $0.23
Diluted earnings per share $0.26 $0.23
Other data:
EBITDA (1) $9,526 $9,232
(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,
---------
2013 2012
---- ----
Revenue by segment:
Learning Solutions (2) $42,734 $35,037
Professional & Technical Services (2) 18,015 22,265
Sandy Training & Marketing 14,998 13,322
Performance Readiness Solutions 15,500 13,831
Energy Services (2) 10,126 9,150
------ -----
Total revenue $101,373 $93,605
======== =======
Gross profit by segment:
$6,466
Learning Solutions (2) $7,171
3,573
Professional & Technical Services (2) 2,684
Sandy Training & Marketing 1,926 1,542
1,575
Performance Readiness Solutions 1,978
2,456
Energy Services (2) 2,422
-----
$15,612
Total gross profit $16,181
=======
Operating income by segment:
$3,395
Learning Solutions (2) $3,212
1,593
Professional & Technical Services (2) 1,058
303
Sandy Training & Marketing 629
245
Performance Readiness Solutions 579
1,788
Energy Services (2) 1,614
Gain (loss) on change in fair value of
contingent 247 (40)
consideration, net
---
$7,284
Total operating income $7,339
======
Supplemental Cash Flow Information:
Net cash provided by operating activities $5,316 $6,963
Capital expenditures (830) (925)
---- ----
Free cash flow $4,486 $6,038
====== ======
(2) Effective January 1, 2013, we made
changes to our organizational
structure to transfer the
management responsibility of
certain business units between
segments, which resulted in a
change in the composition of
certain of our operating
segments. The changes primarily
consisted of: (i) the alternative
fuels business unit transferred
from Professional & Technical
Services to Energy Services; (ii)
a business unit which
predominantly provides content
development services to U.S.
government and commercial clients
transferred from Learning
Solutions to Professional &
Technical Services; and (iii) our
foreign operations in India and
China and a portion of our
Canadian operations transferred
from Professional & Technical
Services to Learning Solutions.
The segment financial information
above has been reclassified for
all prior periods to reflect
these changes and conform to the
current quarter's presentation.
GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation -EBITDA (3)
(Dollars in thousands)
(Unaudited)
Three months
ended
March 31,
---------
2013 2012
---- ----
Net income $4,925 $4,384
Interest expense 100 40
Income tax expense 2,543 2,950
Depreciation and amortization 1,958 1,858
EBITDA $9,526 $9,232
====== ======
(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 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,
2013 2012
---- ----
(Unaudited)
Current assets:
Cash and cash equivalents $11,047 $7,761
Accounts and other receivables 70,887 83,597
Costs and estimated earnings in excess of
billings on uncompleted contracts 20,866 16,979
Prepaid expenses and other current assets 10,330 10,143
------ ------
Total current assets 113,130 118,480
Property, plant and equipment, net 5,640 5,511
Goodwill and other intangibles, net 116,176 118,693
Other assets 1,526 1,750
----- -----
Total assets $236,472 $244,434
======== ========
Current liabilities:
Accounts payable and accrued expenses $40,329 $47,457
Billings in excess of costs and estimated
earnings on uncompleted contracts 18,107 21,877
------ ------
Total current liabilities 58,436 69,334
Other noncurrent liabilities 7,173 7,763
----- -----
Total liabilities 65,609 77,097
Total stockholders' equity 170,863 167,337
------- -------
Total liabilities and stockholders' equity $236,472 $244,434
======== ========
© 2013 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
