GP STRATEGIES CORPORATION 
By COLUMBIA, Md., Feb. 25, 2014 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter and fiscal year ended December 31, 2013.
Overview of Fourth Quarter 2013 Results:
-- Revenue of $117.2 million for fourth quarter of 2013, up $11.2 million
or 11% compared to $106.0 million for fourth quarter of 2012
-- Operating income of $12.1 million for fourth quarter of 2013, up $1.9
million or 19% compared to $10.2 million for fourth quarter of 2012
-- EBITDA of $14.7 million, up $2.3 million or 18% for fourth quarter of
2013 compared to $12.4 million for fourth quarter of 2012
The Company's revenue increased 11% or $11.2 million during the fourth quarter of 2013 compared to the fourth quarter of 2012. The revenue growth is primarily attributable to organic growth in the Learning Solutions and Energy Services segments and businesses acquired in 2013. Operating income increased 19% or $1.9 million during the fourth quarter of 2013 and included a $1.2 million gain on the change in fair value of contingent consideration related to previously completed acquisitions. Income before income taxes was $12.2 million for the fourth quarter of 2013 compared to $10.3 million for the fourth quarter of 2012. Net income was $7.4 million, or $0.38 per diluted share, for the fourth quarter of 2013 compared to $6.1 million, or $0.32 per diluted share, for the fourth quarter of 2012.
The Company recognized revenue of $436.7 million for the year ended December 31, 2013, representing a 9% increase over 2012 revenue of $401.6 million. Operating income increased $2.7 million or 7% in 2013 to $38.4 million for the year ended December 31, 2013. Net income was $23.8 million, or $1.23 per diluted share, for the year ended December 31, 2013 compared to $22.7 million, or $1.18 per diluted share, for the year ended December 31, 2012.
"I am extremely pleased to report another solid quarter," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "We achieved record revenues for both the three months and fiscal year ended December 31, 2013. These strong financial results were accomplished while expanding infrastructure to enable the Company to continue on its path of growth and international expansion. Our results also include costs associated with implementing the global contract with HSBC, under which local service agreements were signed in September. Our goal continues to be to further establish GP Strategies' brand in the highly fragmented training industry."
Balance Sheet and Cash Flow Highlights
As of December 31, 2013, the Company had cash and cash equivalents of $5.6 million compared to $7.8 million as of December 31, 2012. The Company had no long-term debt, $0.4 of million short-term borrowings outstanding and $48.9 million of available borrowings under its line of credit as of December 31, 2013. Cash provided by operating activities was $16.3 million for the year ended December 31, 2013 compared to $25.3 million for the year ended December 31, 2012. During the quarter and year ended December 31, 2013, the Company repurchased 29,000 and 67,000 shares, respectively, of its common stock in the open market for approximately $0.8 million and $1.7 million, respectively, in cash.
Investor Call
The Company has scheduled an investor conference call for 10:00 a.m. ET on February 25, 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 21709020. A telephone replay of the call will also be available beginning at 12:00 p.m. on February 25(th), until 12:00 p.m. on March 11(th). To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21709020.
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
(In thousands, except per share data)
(Unaudited)
Quarter ended Year ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
Revenue $117,220 $105,985 $436,689 $401,572
Cost of revenue 95,592 86,560 360,424 329,601
------ ------ ------- -------
Gross profit 21,628 19,425 76,265 71,971
Selling, general
and
administrative
expenses 10,764 9,280 39,589 35,500
Gain (loss) on change in fair value of
contingent
consideration,
net 1,249 74 1,676 (789)
Operating income 12,113 10,219 38,352 35,682
Interest expense 110 94 366 269
Other income 176 127 502 389
Income before
income taxes 12,179 10,252 38,488 35,802
Income tax
expense 4,738 4,115 14,732 13,114
----- ----- ------ ------
Net income $7,441 $6,137 $23,756 $22,688
====== ====== ======= =======
Basic weighted
average shares
outstanding 19,144 19,083 19,103 18,956
Diluted weighted
average shares
outstanding 19,416 19,333 19,362 19,275
Per common share data:
Basic earnings
per share $0.39 $0.32 $1.24 $1.20
Diluted earnings
per share $0.38 $0.32 $1.23 $1.18
Other data:
EBITDA (1) $14,651 $12,397 $47,471 $44,042
(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)
Quarter ended Year ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
Revenue by segment:
Learning
Solutions $52,676 $45,670 $189,899 $158,118
Professional &
Technical
Services 18,357 18,834 72,577 82,447
Sandy Training
& Marketing 18,638 19,160 70,699 70,243
Performance
Readiness
Solutions 12,391 12,984 53,882 55,794
Energy Services 15,158 9,337 49,632 34,970
------ ----- ------ ------
Total revenue $117,220 $105,985 $436,689 $401,572
======== ====== ======== ========
Gross profit by segment:
Learning
Solutions $9,542 $8,787 $33,540 $30,065
Professional &
Technical
Services 3,126 3,303 12,320 14,279
Sandy Training
& Marketing 3,453 3,172 10,748 10,954
Performance
Readiness
Solutions 1,994 1,724 7,515 7,762
Energy Services 3,513 2,439 12,142 8,911
----- ----- ------ -----
Total gross
profit $21,628 $19,425 $76,265 $71,971
======= ======= ======= =======
Operating income by segment:
Learning
Solutions $4,324 $4,586 $15,210 $15,927
Professional &
Technical
Services 1,475 1,659 5,810 6,868
Sandy Training
& Marketing 1,875 1,611 4,672 4,897
Performance
Readiness
Solutions 886 541 2,688 2,548
Energy Services 2,304 1,748 8,296 6,231
Gain (loss) on change in fair
value of
contingent
consideration,
net 1,249 74 1,676 (789)
----- --- ----- ----
Total operating
income $12,113 $10,219 $38,352 $35,682
======= ======= ======= =======
Supplemental Cash Flow
Information:
Net cash
provided by
operating
activities $6,004 $8,312 $16,253 $25,312
Capital
expenditures (2,106) (381) (6,714) (2,536)
------ ---- ------ ------
Free cash flow $3,898 $7,931 $9,539 $22,776
====== ====== ====== =======
GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation - EBITDA (2)
(In thousands)
(Unaudited)
Quarter ended Year ended
December 31, December 31,
------------ ------------
2013 2012 2013 2012
---- ---- ---- ----
Net income (3) $7,441 $6,137 $23,756 $22,688
Interest expense 110 94 366 269
Income tax expense 4,738 4,115 14,732 13,114
Depreciation and
amortization 2,362 2,051 8,617 7,971
EBITDA $14,651 $12,397 $47,471 $44,042
======= ======= ======= =====
(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 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.
(3) Net income includes the
following infrequently
occurring or acquisition-
related amounts:
· Income
tax
benefits
of
$1,602,000
in the
third
quarter
of 2012
on the
reductions
of
uncertain
tax
position
liabilities.
· Net
gains of
$1,249,000
and
$1,676,000,
on the
change in
fair
value of
contingent
consideration
for the
fourth
quarter
and year
ended
December
31, 2013,
respectively,
compared
to a net
gain of
$74,000
and a net
loss of
$789,000
(for
which no
income
tax
benefit
was
recognized)
for the
fourth
quarter
and year
ended
December
31, 2012,
respectively.
GP STRATEGIES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December 31,
2013 2012
---- ----
Current assets:
Cash and cash equivalents $5,647 $7,761
Accounts and other
receivables 94,662 83,597
Costs and estimated
earnings in excess of
billings on uncompleted
contracts 22,706 16,979
Prepaid expenses and other
current assets 13,523 10,143
------ ------
Total current assets 136,538 118,480
Property, plant and
equipment, net 9,231 5,511
Goodwill and other
intangibles, net 132,116 118,693
Other assets 2,271 1,750
----- -----
Total assets $280,156 $244,434
======== ========
Current liabilities:
Short-term borrowings $407 $ --
Accounts payable and
accrued expenses 55,339 47,457
Billings in excess of
costs and estimated
earnings on uncompleted
contracts 22,062 21,877
------ ------
Total current liabilities 77,808 69,334
Other noncurrent
liabilities 9,321 7,763
----- -----
Total liabilities 87,129 77,097
Total stockholders' equity 193,027 167,337
------- -------
Total liabilities and
stockholders' equity $280,156 $244,434
======== ========
© 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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SOURCE GP Strategies Corporation
