8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)  August 8, 2007

GP Strategies Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdictionof Incorporation)

1-7234	13-1926739
(Commission File Number)	(IRS Employer Identification No.)
6095 Marshalee Drive, Suite 300, Elkridge, MD	21075
(Address of Principal Executive Offices)	(Zip Code)

(410) 379-3600

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On August 8, 2007, the Company announced its results for the quarter ended June 30, 2007. The earnings release is attached hereto as an exhibit to the 8-K.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release of GP Strategies Corporation dated August 8, 2007 announcing its results for the quarter ended June 30, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GP STRATEGIES CORPORATION
Date: August 8, 2007	/s/ Sharon Esposito-Mayer
	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release of GP Strategies Corporation dated August 8, 2007 announcing its results for the quarter ended June 30, 2007.

EX-99.1

Exhibit 99.1

Contact:

Scott N. Greenberg	Sharon Esposito-Mayer	Ann M. Blank
Chief Executive Officer (410) 379-3640	Chief Financial Officer (410) 379-3636	Investor Relations (410) 379-3725

GP STRATEGIES REPORTS STRONG SECOND QUARTER 2007 RESULTS AND

ANNOUNCES BOARD APPROVAL OF ADDITIONAL SHARE REPURCHASES UNDER

BUYBACK PROGRAM

Elkridge, MD, August 8, 2007 - GP Strategies Corporation (NYSE: GPX), a globalprovider of training and e-Learning solutions, management consulting, and engineeringservices through its operating subsidiary General Physics Corporation, today reported second quarter 2007 results.

Second Quarter 2007 Highlights:

· Revenue of $63.7 million, up $17.9 million or 39% compared to the second quarter of 2006

· Earnings per share of $0.14 per diluted share compared to $0.11 per diluted share for the second quarter of 2006

· EBITDA of $5.4 million, up $1.5 million or 40% compared to the second quarter of 2006

· Board authorized an additional $5 million for share repurchases under buyback program

“I am proud to report the Company had a 34% increase in net income during the second quarter of 2007 compared to the second quarter of 2006,” said Scott N. Greenberg, CEO of GP Strategies. “The Company is well positioned to become a global leader in the custom training and performance improvement industry.”

Second Quarter 2007 Results

Revenue was $63.7 million for the second quarter of 2007 compared to $45.8 million for the second quarter of 2006. The $17.9 million, or 39%, increase in revenue during the second quarter of 2007 is due to the following drivers by business segment:

· Sandy Sales Training & Marketing - this segment contributed an increase of $18.4 million of revenue during the second quarter of 2007 as a result of the acquisition of Sandy Corporation in January 2007. Sandy provides custom sales training and print-based and electronic publications primarily to the automotive industry.

· Manufacturing & BPO - revenue for this segment increased $2.0 million, or 8%, to $28.6 million during the second quarter of 2007 from $26.5 million for the second quarter of 2006. The net increase in revenue is primarily due to net increases in business process outsourcing and technical training services with new and existing customers and an increase from our international operations in the United Kingdom (UK). On June 1, 2007, we completed the acquisition of Smallpeice Enterprises Ltd. (SEL), a technical and management training company in the UK.

· Process, Energy & Government - revenue for this segment decreased $2.5 million, or 13%, to $16.7 million during the second quarter of 2007 from $19.2 million for the second quarter of 2006. The net decrease in revenue is primarily due to the completion of chemical demilitarization projects in 2006 and the conclusion of hurricane recovery services in 2006. These decreases were offset by increases in revenue primarily from engineering and training services provided to customers in the petroleum and refining industry.

During the second quarter of 2007, operating income increased $1.0 million, or 30%, to $4.3 million, compared to $3.3 million in the second quarter of 2006 and is primarily attributable to the following:

· An increase in gross profit of $2.3 million, or 34%, which consisted of a $1.5 million increase in gross profit contributed by the Sandy Sales Training & Marketing segment, a $0.4 million increase in gross profit contributed by the Manufacturing & BPO segment, and a $0.4 million increase in gross profit contributed by the Process, Energy & Government segment (primarily due to significant increases in profitability on contracts with petroleum and refining customers despite the overall decline in revenue for this segment); offset by

· An increase in selling, general and administrative expenses of $1.4 million, or 37%, primarily due to an increase in amortization expense of $0.5 million related to intangible assets recorded in connection with the acquisition of Sandy and an increase in labor, benefits and facilities expense of $0.4 million primarily due to the acquisition of Sandy.

Income before income tax expense was $4.1 million for the second quarter of 2007 compared to $3.1 million for the second quarter of 2006. Net income was $2.3 million, or $0.14 per diluted share, for the second quarter of 2007 compared to $1.7 million, or $0.11 per diluted share, for the second quarter of 2006. The increases in income before income tax expense, net income and earnings per share during the second quarter of 2007 were primarily due to the increases in operating income discussed above, with the results of Sandy’s operations being the primary driver for the increases along with increases in profitability in our other segments.

Six Months ended June 30, 2007 Results

Revenue was $117.2 million for the six months ended June 30, 2007 compared to $89.3 million for the same period in 2006. The $27.9 million, or 31%, increase in revenue consisted of $30.6 million of revenue contributed by the Sandy Sales Training & Marketing segment and a $2.7 million increase in revenue in the Manufacturing & BPO segment, offset by a $5.4 million decrease in revenue in the Process, Energy & Government segment. The primary drivers of the revenue fluctuations for the six months ended June 30, 2007 compared to the same period in 2006 are largely due to the same factors discussed above in the second quarter 2007 results.

During the six months ended June 30, 2007, operating income increased $2.0 million, or 35%, to $7.7 million, compared to $5.7 million for the same period in 2006, and is primarily attributable to the following:

· An increase in gross profit of $4.6 million, or 36%, which consisted of a $3.3 million increase in gross profit contributed by the Sandy Sales Training & Marketing segment, a $0.5 million increase in gross profit in the Manufacturing & BPO segment, and a $0.8 million increase in gross profit contributed by the Process, Energy & Government segment (primarily due to significant increases in profitability on contracts with petroleum and refining customers despite the overall decline in revenue for this segment); offset by

· An increase in selling, general and administrative expenses of $2.6 million, or 37%, primarily due to an increase in amortization expense of $0.9 million related to intangible assets recorded in connection with the acquisition of Sandy, an increase in labor, benefits and facilities expense of $0.7 million due to the acquisition of Sandy, and the effect of a bad debt recovery of $0.4 million in 2006 which reduced SG&A expenses in 2006 and did not recur in 2007.

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Income before income tax expense was $7.6 million for the six months ended June 30, 2007 compared to $5.4 million for the same period in 2006. Net income was $4.4 million, or $0.26 per diluted share, for the six months ended June 30, 2007 compared to $3.1 million, or $0.19 per diluted share, for the same period in 2006. The increases in income before income tax expense, net income and earnings per share during the first half of 2007 were primarily due to the increases in operating income discussed above, with the results of Sandy’s operations being the primary driver for the increases along with increases in profitability in our other segments.

Share Repurchase Program

During the three and six months ended June 30, 2007, we repurchased 37,500 and 145,000 shares, respectively, of our common stock in the open market for approximately $0.4 million and $1.4 million, respectively, in cash. As of June 30, 2007, there was approximately $0.5 million remaining to be used for repurchases under the original $5 million buyback program which was authorized in January 2006. In August 2007, our Board of Directors authorized an additional $5 million of future share repurchases under the buyback program.

Investor Call

The Company has scheduled an investor conference call for 10:00 a.m. ET on August 8, 2007. In addition to prepared remarks from management, there will be a question and answer session on the call. The dial-in number for the live conference call will be 888-633-3324 using conference ID number 11539386. A telephone replay of the call will also be available beginning at 11:00 a.m. on August 8^th, until 11:59 p.m. on August 22^nd. To listen to the replay, dial 800-642-1687 or 706-645-9291, using conference ID number 11539386.

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, 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 these non-GAAP financial measures to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation - EBITDA, along with related footnotes, below.

About GP Strategies Corporation

GP Strategies, whose principal operating subsidiary is General Physics Corporation, is a NYSE listed company (GPX). General Physics (GP) is a global provider of training, e-learning solutions, management consulting, and engineering services. Through its Sandy Corporation division, GP provides custom sales training solutions.GP’s 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 about GP Strategies may be found at www.gpstrategies.com and about General Physics at www.gpworldwide.com.

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Forward-Looking Statements

We make statements in this press release that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. These statements reflect our current expectations concerning future events and results. We use words such as “expect,” “intend,” “believe,” “may,” “will,” “should,” “could,” “anticipates,” and similar expressions to identify forward-looking statements, but their absence does not mean a statement is not forward-looking. 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

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Revenue	$	63,658	$	45,779	$	117,201	$	89,307
Cost of revenue		54,354		38,822		99,855		76,588
Gross profit		9,304		6,957		17,346		12,719
Selling, general and administrative expenses		4,989		3,632		9,608		7,004
Operating income		4,315		3,325		7,738		5,715
Interest expense Other income		387 143		443 180		659 514		857 584
Income before income tax expense		4,071		3,062		7,593		5,442
Income tax expense		1,724		1,317		3,192		2,328
Net income	$	2,347	$	1,745	$	4,401	$	3,114
Other data:
EBITDA (1)	$	5,386	$	3,851	$	10,052	$	7,056
Basic weighted average shares outstanding		16,584		15,550		16,447		15,889
Diluted weighted average shares outstanding		17,180		16,461		17,072		16,795
Per common share data:
Basic earnings per share	$	0.14	$	0.11	$	0.27	$	0.20
Diluted earnings per share	$	0.14	$	0.11	$	0.26	$	0.19

(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.

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30, 2007		December 31, 2006
	(Unaudited)
Current assets:
Cash and cash equivalents	$	1,947	$	8,660
Accounts and other receivables		39,476		26,628
Inventories, net		814		-
Costs and estimated earnings in excess of billings on uncompleted contracts		20,287		11,257
Prepaid expenses and other current assets		8,606		6,411
Total current assets		71,130		52,956
Property, plant and equipment, net		2,413		1,859
Goodwill and other intangibles, net		66,202		57,460
Deferred tax assets		3,611		7,420
Other assets		2,686		1,705
Total assets	$	146,042	$	121,400
Current liabilities:
Short-term borrowings	$	9,102	$	-
Current maturities of long-term debt		90		30
Accounts payable and accrued expenses		31,456		22,903
Billings in excess of costs and estimated earnings on uncompleted contracts		8,190		6,881
Total current liabilities		48,838		29,814
Long-term debt less current maturities		7,872		10,896
Other non-current liabilities		1,055		959
Total liabilities		57,765		41,669
Total stockholders’ equity		88,277		79,731
Total liabilities and stockholders’ equity	$	146,042	$	121,400

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation - EBITDA

(In thousands)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Net income	$	2,347	$	1,745	$	4,401	$	3,114
Interest expense		387		443		659		857
Income tax expense		1,724		1,317		3,192		2,328
Depreciation and amortization		928		346		1,800		757
EBITDA (2)	$	5,386	$	3,851	$	10,052	$	7,056

(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 interest expense, income tax expense, and depreciation and amortization to net income. EBITDA should not be considered a substitute 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.

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