GP STRATEGIES CORPORATION COLUMBIA, Md., July 31, 2014 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2014.
Second Quarter 2014 Highlights:
-- Revenue of $134.9 million for second quarter of 2014 compared to $104.9
million for second quarter of 2013, up 29%
-- Operating income of $13.8 million for second quarter of 2014 compared to
$8.6 million for second quarter of 2013, up 61%
-- Diluted earnings per share of $0.42 for second quarter of 2014 compared
to $0.27 per share for second quarter of 2013
-- EBITDA of $16.4 million, or 12% of revenue, for second quarter of 2014
compared to $10.6 million, or 10% of revenue, for second quarter of 2013
The Company's revenue increased $30.0 million or 28.6% during the second quarter of 2014 compared to the second quarter of 2013. The Company achieved organic revenue growth of 24% during the second quarter. All of the Company's operating segments reported revenue growth for the quarter, with the largest increases achieved by the Learning Solutions and Energy Services segments. Gross profit increased 34.6% during the quarter to $24.8 million, or 18.4% of revenue, for the second quarter of 2014 from $18.4 million, or 17.5% of revenue, for the second quarter of 2013. SG&A expense increased $1.6 million or 16.0% during the second quarter of 2014 largely due to increased costs associated with the Company's global expansion to support recent outsourcing contracts. Income before income tax expense was $13.8 million for the second quarter of 2014 compared to $8.6 million for the second quarter of 2013. Net income was $8.1 million, or $0.42 per share, for the second quarter of 2014 compared to $5.2 million, or $0.27 per share, for the second quarter of 2013.
"In the second quarter of 2014, GP Strategies achieved both record revenue and EBITDA," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "All of the Company's segments showed organic revenue growth for the quarter. The Company achieved these record results while continuing to invest in building out its infrastructure to support its growing global business. We are pleased with the Company's execution and progress."
Balance Sheet and Cash Flow Highlights
As of June 30, 2014, the Company had cash and cash equivalents of $6.0 million compared to $5.6 million as of December 31, 2013. The Company had no long-term debt outstanding as of June 30, 2014 and had $17.8 million of short-term borrowings under its $50 million line of credit as of June 30, 2014. Cash used in operating activities was $1.9 million for the six months ended June 30, 2014 compared to $5.5 million of cash provided by operating activities for the same period in 2013. The decrease in cash from operations was largely due to an increase in accounts receivable and unbilled receivables during the first half of 2014 compared to the same period in 2013. In addition, the Company used $10.0 million during the second quarter of 2014 and $11.0 million during the six months ended June 30, 2014 to complete acquisitions and pay contingent consideration obligations related to previously completed acquisitions.
Investor Call
The Company has scheduled an investor conference call for 10:00 a.m. EDT on July 31, 2014. 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 855-258-3671 or 804-681-3894, using conference ID number 21728636. A telephone replay of the call will also be available beginning at 12:00 p.m. on July 31(st), until 12:00 p.m. on August 14(th). To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21728636. 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 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.
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
(In thousands, except per share data)
(Unaudited)
Quarters ended Six months ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Revenue $134,918 $104,899 $252,798 $206,272
Cost of
revenue 110,151 86,504 209,676 171,696
------- ------ ------- -------
Gross profit 24,767 18,395 43,122 34,576
Selling,
general and
administrative
expenses 11,462 9,880 23,051 18,969
Gain on change in fair value of
contingent consideration, net
481 45 858 292
--- --- --- ---
Operating
income 13,786 8,560 20,929 15,899
Interest
expense 77 66 282 166
Other income 68 93 257 322
--- --- --- ---
Income before
income tax
expense 13,777 8,587 20,904 16,055
Income tax
expense 5,664 3,340 8,474 5,883
----- ----- ----- -----
Net income $8,113 $5,247 $12,430 $10,172
====== ====== ======= =======
Basic weighted
average
shares
outstanding 19,144 19,082 19,142 19,071
Diluted
weighted
average
shares
outstanding 19,415 19,334 19,418 19,315
Per common share data:
Basic earnings
per share $0.42 $0.27 $0.65 $0.53
Diluted
earnings per
share $0.42 $0.27 $0.64 $0.53
Other data:
EBITDA (1) $16,397 $10,645 $26,137 $20,171
(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,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Revenue by segment:
Learning
Solutions $61,970 $45,185 $114,937 $87,919
Professional &
Technical
Services 18,789 17,048 38,699 35,063
Sandy Training &
Marketing 20,223 20,134 34,481 35,132
Performance
Readiness
Solutions 14,130 12,954 27,139 28,454
Energy Services 19,806 9,578 37,542 19,704
------ ----- ------ ------
Total revenue $134,918 $104,899 $252,798 $206,272
======== ======== ======== ========
Gross profit by segment:
Learning
Solutions $8,857 $8,198 $15,460 $15,369
Professional &
Technical
Services 3,320 3,281 7,434 5,965
Sandy Training &
Marketing 3,298 2,936 5,208 4,862
Performance
Readiness
Solutions 2,322 1,512 4,055 3,490
Energy Services 6,970 2,468 10,965 4,890
----- ----- ------ -----
Total gross
profit $24,767 $18,395 $43,122 $34,576
======= ======= ======= =======
Operating income by segment:
Learning
Solutions $3,263 $3,554 $4,311 $6,766
Professional &
Technical
Services 1,640 1,747 4,001 2,805
Sandy Training &
Marketing 1,604 1,193 2,181 1,822
Performance
Readiness
Solutions 1,098 316 1,599 895
Energy Services 5,700 1,705 7,979 3,319
Gain on change in fair value of
contingent consideration, net
481 45 858 292
--- --- --- ---
Total operating
income $13,786 $8,560 $20,929 $15,899
======= ====== ======= =======
Supplemental Cash Flow Information:
Net cash
provided by
(used in)
operating
activities $(2,638) $163 $(1,917) $5,479
Capital
expenditures (528) (1,331) (1,444) (2,161)
---- ------ ------ ------
Free cash flow $(3,166) $(1,168) $(3,361) $3,318
======= ======= ======= ======
GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation - EBITDA (2)
(In thousands)
(Unaudited)
Quarters ended Six months ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Net income $8,113 $5,247 $12,430 $10,172
Interest expense 77 66 282 166
Income tax expense 5,664 3,340 8,474 5,883
Depreciation and amortization 2,543 1,992 4,951 3,950
EBITDA $16,397 $10,645 $26,137 $20,171
======= ======= ======= =======
(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, and 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,
2014 2013
---- ----
(Unaudited)
Current assets:
Cash and cash equivalents $6,026 $5,647
Accounts and other
receivables 112,807 94,662
Costs and estimated
earnings in excess of
billings on uncompleted
contracts
34,657 22,706
Prepaid expenses and other
current assets 13,659 13,523
------ ------
Total current assets 167,149 136,538
Property, plant and
equipment, net 8,865 9,231
Goodwill and other
intangibles, net 144,088 132,116
Other assets 1,727 2,271
----- -----
Total assets $321,829 $280,156
======== ========
Current liabilities:
Short-term borrowings $17,771 $407
Accounts payable and
accrued expenses 60,975 55,339
Billings in excess of
costs and estimated
earnings on uncompleted
contracts
23,315 22,062
------ ------
Total current liabilities 102,061 77,808
Other noncurrent
liabilities 12,080 9,321
------ -----
Total liabilities 114,141 87,129
Total stockholders' equity 207,688 193,027
------- -------
Total liabilities and
stockholders' equity $321,829 $280,156
======== ========
(C) 2014 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are
trademarks of GP Strategies Corporation.
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