10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

x Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the fiscal year ended December 31, 2012

¨ Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the transition period from               to

Commission File Number 1-7234

GP STRATEGIES CORPORATION
(Exact name of Registrant as specified in its charter)

Delaware	52-0845774
(State of Incorporation)	(I.R.S. 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:

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of each exchange on which registered:
Common Stock, $.01 par value	New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act:   None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the outstanding shares of the Registrant’s Common Stock, par value $.01 per share, held by non-affiliates as of June 30, 2012 was approximately $272,137,000.

The number of shares outstanding of the registrant’s Common Stock as of February 15, 2013:

Class	Outstanding
Common Stock, par value $.01 per share	19,059,797 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for its 2013 Annual Meeting of Stockholders are incorporated herein by reference into Part III hereof.

Table of Contents

		Page
PART I
Cautionary Statement Regarding Forward-Looking Statements		1
Item 1.	Business	1
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	20
PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Financial Data	24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 8.	Financial Statements and Supplementary Data	46
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	86
Item 9A.	Controls and Procedures	86
Item 9B.	Other Information	86
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	87
Item 11.	Executive Compensation	87
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	87
Item 13.	Certain Relationships and Related Transactions, and Director Independence	88
Item 14.	Principal Accounting Fees and Services	88
PART IV
Item 15.	Exhibits and Financial Statement Schedules	89
Signatures		92

Cautionary Statement Regarding Forward-Looking Statements

This report contains 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, as amended (the “Exchange Act”). The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward looking statements. Forward–looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We use words such as “expects,” “intends,” “believes,” “may,” “will,” “should,” “could,” “anticipates,” “estimates,” “plans” and similar expressions to indicate forward-looking statements, but their absence does not mean a statement is not forward-looking. Because these forward-looking statements are based upon management’s expectations and assumptions and are subject to risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including, but not limited to, those factors set forth under Item 1A - Risk Factors and those other risks and uncertainties detailed in our periodic reports and registration statements filed with the Securities and Exchange Commission (“SEC”). We caution that these risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. We cannot predict these new risk factors, nor can we assess the effect, if any, of the new risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ from those expressed or implied by these forward-looking statements.

If any one or more of these expectations and assumptions proves incorrect, actual results will likely differ materially from those contemplated by the forward-looking statements. Even if all of the foregoing assumptions and expectations prove correct, actual results may still differ materially from those expressed in the forward-looking statements as a result of factors we may not anticipate or that may be beyond our control. While we cannot assess the future impact that any of these differences could have on our business, financial condition, results of operations and cash flows or the market price of shares of our common stock, the differences could be significant. We do not undertake to update any forward-looking statements made by us, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report.

Company Information Available on the Internet

Our internet address is www.gpstrategies.com. We make available free of charge through our internet site, our annual reports on Form 10-K; quarterly reports on Form 10-Q; current reports on Form 8-K; and any amendment to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

PART I

Item 1:         Business

Company Overview

GP Strategies Corporation, which is a New York Stock Exchange (“NYSE”) listed company traded under the symbol GPX, is a global performance improvement solutions provider of training, e-Learning solutions, management consulting and engineering services. References in this report to “GP Strategies,” the “Company,” “we” and “our” are to GP Strategies Corporation and its subsidiaries, collectively.

We are a leading independent provider of customized training solutions focused on performance improvement initiatives for our clients. We also provide consulting, engineering and technical services which enhance our customized training capabilities and diversify our service offerings. We have global execution capabilities and provide services to a large customer base across a broad range of industries in over 45 countries. We serve leading companies in the automotive, steel, oil and gas, power, chemical, electronics and technology, manufacturing, software, financial, retail, healthcare and food and beverage industries, as well as government agencies. We have over four decades of experience in developing solutions to optimize workforce performance by providing services and products to our clients that assist them in successfully integrating their employees, processes and technology.

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Over the last several years, we have focused on building our custom training business through internal growth and the acquisition of complementary businesses. We began executing our acquisition strategy in 2006 and have since completed over 20 acquisitions. The primary objectives of our acquisition strategy are to strengthen our capabilities in specific training and technical service areas, expand our global presence, and increase our customer base and market sector reach. As a result, we’ve added product sales training and leadership training, and strengthened our e-Learning and content development expertise, while also expanding further within Europe and Asia Pacific. Our acquisitions have also expanded our market sector reach, added new customers and enhanced our service offerings through the addition of new complementary services. We acquired four businesses during the year ended December 31, 2012 including: (i) BlessingWhite, a U.S. based provider of leadership development and employee engagement solutions, in October 2012; (ii) Rovsing Dynamics, a provider of vibration condition monitoring hardware and software located in Denmark, in September 2012; (iii) Asentus, an international provider of IT technical training content and live and virtual training event services located primarily in Canada and Europe, in June 2012; and (iv) Information Horizons, a provider of government funded skills training located in the United Kingdom, in May 2012. See Note 2 to the accompanying Consolidated Financial Statements for further details regarding our acquisitions, including the purchase price allocations.

Operating Segments

As of December 31, 2012, we operated through five reportable business segments: (i) Learning Solutions, (ii) Professional & Technical Services, (iii) Sandy Training & Marketing, (iv) Performance Readiness Solutions (formerly RWD), and (v) Energy Services. Our Learning Solutions segment represents an aggregation of two operating groups in accordance with the aggregation criteria in U.S. GAAP, while all of the other reportable segments each represent one operating group. We are organized by operating group primarily based upon the markets served by each group and/or the services performed. Each operating group consists of business units which are focused on providing specific products and services to certain classes of customers or within targeted markets. Marketing and communications, accounting, finance, legal, human resources, information systems and other administrative services are organized at the corporate level. Business development and sales resources are aligned with operating groups to support existing customer accounts and new customer development.

Further information regarding our business segments is discussed below.

Learning Solutions. The Learning Solutions segment delivers training, curriculum design and development, e-Learning services, system hosting, training business process outsourcing and consulting services primarily to large companies in the electronics and semiconductors, healthcare, software, financial and other industries as well as to government agencies. The ability to deliver a wide range of training services on a global basis allows this segment to take over the entire learning function for the client, including their training personnel. The October 2012 acquisition of BlessingWhite added proprietary leadership training content and employee engagement tools and services to this segment’s offerings.

Professional & Technical Services. This segment has over four decades of experience providing training, consulting, engineering and technical services, including lean consulting, emergency preparedness, safety and regulatory compliance, chemical demilitarization and environmental services primarily to large companies in the manufacturing, steel, pharmaceutical and petrochemical industries, federal and state government agencies and large government contractors. This segment also provides services to users of alternative fuels, including designing and constructing liquefied natural gas (LNG), liquid to compressed natural gas (LCNG) and hydrogen fueling stations, as well as supplying fuel and equipment.

Sandy Training & Marketing. The Sandy segment provides custom product sales training and has been a leader in serving manufacturing customers in the U.S. automotive industry for over 30 years. Sandy provides custom product sales training designed to better educate customer sales forces with respect to new vehicle features and designs, in effect rapidly increasing the sales force knowledge base and enabling them to address detailed customer queries. Furthermore, Sandy helps our clients assess their customer relationship marketing strategy, measure performance against competitors and connect with their customers on a one-to-one basis. This segment also provides technical training services to automotive manufacturers as well as customers in other industries.

Performance Readiness Solutions. Formerly named RWD, this segment represents a portion of the consulting business acquired from RWD Technologies, LLC in April 2011. Certain of the other acquired RWD business units are managed within the Professional & Technical Services and Sandy segments discussed above. Performance Readiness Solutions provides human capital management and IT consulting services, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector.

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Energy Services. The Energy Services segment provides engineering services, products and training primarily to electric power utilities. Our proprietary EtaPro^TM Performance and Condition Monitoring System provides a suite of performance and reliability solutions for power generation plants and is installed at over 1,000 power generating units in 34 countries. In addition to providing custom training solutions, this segment provides web-based training through our GPiLearn^TM portal, which offers over 1,300 courses to over 30,000 power plant personnel in the U.S. and in over 40 countries.

Segment Financial Information

For financial information about our business segments and geographic operations and revenue, see Note 12 to the accompanying Consolidated Financial Statements.

Services and Products

Our personnel come from varied backgrounds in the corporate, technical, military and government arenas. They use their professional knowledge to create cost-effective solutions to address modern business and governmental performance challenges. Our training, consulting and engineering services and related product offerings are discussed in more detail below.

Training. We provide custom training services and products to support our customers’ existing operations, as well as the launch of new plants, products, equipment, technologies and processes. Our training services are comprehensive, covering all aspects of an organization's needs, including:

· Content and Curriculum Development. Services include a fundamental analysis of the client’s needs, curriculum design, instructional material development (in hard copy, electronic/software or other format), information technology service support and delivery. Our instructional delivery capabilities include traditional classroom, structured on-the-job training (OJT), just-in-time methods, computer-based, web-based, video-based and the full spectrum of e-Learning technologies.

· E-Learning. Though part of our content development services, our e-Learning capabilities distinguish themselves because we are able to function as a single-source e-Learning solutions provider through our integration services and hosting, the development and provisioning of proprietary content and the aggregation and distribution of third party content. While considered a custom content developer in this arena, we are also the creators of GPiLearn^TM, a packaged, web-based training curriculum designed to equip workers with specialized maintenance, mechanical, operator and technical skills throughout the energy industry (nuclear, hydroelectric, wind farms and other power generating plants) in order to address that industry's growing needs for a skilled and multi-skilled workforce.

· Learning & Training Outsourcing. We offer a wide range of training business process outsourcing (“BPO”) services, including design, delivery and global management of comprehensive learning programs for national and multinational businesses and government organizations. We can deliver our services individually or as a complete, integrated training solution. Solutions include the management of our customers’ training departments, as well as administrative processes, such as tuition assistance program management, vendor management, call center / help desk administration and learning management system (LMS) administration. Our services encompass a wide spectrum of learning engagements ranging from focusing on a single aspect of a learning process to multi-year contracts where we manage the learning infrastructure of our customer. In addition, we automate a large amount of our customers’ tuition reimbursement programs by utilizing our own proprietary software.

· Documentation Development. Training-related documentation products include custom instructor and student training manuals, job aids to support technical skills development and instructional materials suitable for web-based and blended learning solutions.

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· Specialized Training Areas. Our professionals possess diverse skills in multiple industries that enable us to address specialized training needs, including technical training, machine and equipment maintenance training, product sales training and incentive programs, leadership development training, regulatory training, environmental training and homeland security training, to name a few.

Consulting. Our consulting services include training-related consulting services as well as more traditional business management and specialized consulting, including the areas of:

· Lean Enterprise. Our Lean and Six Sigma experts provide high-level lean enterprise consulting services, as well as training in the concept, methods and application of lean enterprise and other quality practices, organizational development and change management.

· Engineering. We provide engineering consulting services to support regulatory and environmental compliance, modification of facilities and processes, plant performance improvement, reliability-centered maintenance practices and plant start-up activities.

· Information Technology. Consulting services include IT consulting and ERP implementation services, system selection consulting, operations continuity assessment, planning, training and procedure development.

· Customer Loyalty. Our Sandy segment provides consultation on customer loyalty programs and supports those services with brand loyalty publications, incentive programs and customer-focused sales training. Sandy develops personalized publications for automotive clients which establish a link between the manufacturer/dealer and each customer.

· Performance Readiness. We offer change-management strategies to help our customer's employees accept, adopt and perform in new ways and be open to change.

· Homeland Security and Emergency Management. We deliver consulting services from physical security assessments to all-hazards emergency planning and preparedness. These services include training, exercises and documentation.

· Maintenance & Reliability. We help manufacturers develop strategies, assessments and leadership alignment tactics for maintenance and reliability programs, as well as provide the training, management systems and documentation that support an enduring culture of waste elimination and variability reduction.

Engineering and Technical Services. Our staff includes civil, mechanical and electrical engineers who are equipped to provide engineering, technical support services, consulting expertise, design capabilities and evaluation services. Our engineering customers typically operate in technically complex industries such as oil and gas, power, chemical, aerospace, transportation and manufacturing industries. Our engineering services support facilities, processes and systems in multiple capacities, including:

· Power Plant Performance. Our Energy Services segment delivers multiple solutions to optimize power plant assets and mitigate risk. We have also developed proprietary products to support the power industry, including our EtaPRO™ software, installed in nearly every electricity-generating power plant in North America, as well as our Virtual Plant^TM and other software applications for the power generation industry.

· Alternative Fueling Station Design and Engineering. We provide engineering design, permitting and construction of alternative fuel stations, including liquefied natural gas (LNG), liquid to compressed natural gas (LCNG) and hydrogen fueling stations for private fleets and public-access stations in the United States. We also provide maintenance services for alternative fueling stations, as well as supply fuel and equipment.

· Technical Support. Services in this area include procedure writing and configuration control for capital intensive facilities, plant start-up assistance, logistics support (e.g., inventory management and control), implementation and engineering assistance for facility or process modifications, facility management for high technology training environments, staff augmentation and help-desk support for standard and customized client desktop applications.

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· Environmental Services. We help public and government manufacturing and processing plants develop strong environmental programs, assess their sites, perform remediation measures, build environmentally sensitive facilities and perform other services in regard to air and water quality, hazardous waste and the stewardship of natural resources.

Competitive Strengths

We believe our key competitive strengths include:

Independent and Single-Source Custom Training Solutions Provider. We believe we are one of the largest independent single-source custom training solutions providers in the markets in which we compete. We provide business process outsourcing solutions spanning the full life-cycle of the training process, including the management of training departments and administrative processes for our customers. We believe that the breadth of our service and product offerings, which encompass fully integrated training business process outsourcing solutions as well as discrete services, allows us to better serve the needs of our clients by providing them with a single-source solution for custom training, consulting and technical and engineering services. We believe that the integration of our services into a single platform, together with our international presence and delivery capabilities, allows our customers to leverage an enterprise-wide solution to address their performance improvement needs in a way that streamlines their internal operations, improves the speed and efficiency at which critical know-how is disseminated on a firm-wide basis, and enables them to achieve their desired performance improvement goals.

Outstanding Reputation in the Industry. We have continued to build an outstanding reputation in the training industry through the delivery of exceptional training solutions and have received numerous awards. In 2012, for the ninth consecutive year, Training Industry, Inc., an industry trade organization, selected us as one of the Top 20 Companies in Training Outsourcing. Also in 2012, Training Industry, Inc. selected us as one of the Top Sales Training Companies for the fifth consecutive year. During 2012, Training Industry, Inc. also selected us as one of the Top 20 IT Training Companies, Top Workforce Development Company, Top 20 Learning Portal Companies and Top 20 Content Development Company. We also won other industry awards including a prestigious “Learning In Practice” award from Chief Learning Officer Magazine and six Brandon Hall Excellence in Learning Awards, and were ranked a Top “Size of Deal” Learning Provider by HRO Today.

Scalable Technology Platform. Our training programs are delivered online, in classroom settings or a combination of both. We have the ability to work with outside information technology (IT) vendors in combination with our own proprietary software in order to deliver a scalable technology platform capable of addressing training needs of various size and commitment, ranging from a one-time project to a multi-year training program.

Legacy Technical Expertise. In the 1960’s, we began providing technical services to the U.S. Navy nuclear submarine program and the nuclear electric-power generation industry, and have since maintained and expanded our reputation for providing technically complex consulting, engineering, and training services. Many of our employees have engineering degrees, technical training or years of relevant technical industry experience. Through repeat projects with industry leaders, such as ExxonMobil, Applied Materials and Pratt & Whitney, we have acquired significant industry experience in providing highly technical consulting services. We believe that our technical expertise allows us to address market opportunities for complex business challenges that require in-depth expertise and certifications typically acquired over several years of specialized training and many years of experience. We also believe that our ability to provide both training-related and business consulting services allows us to gain insight into operations of our customers, understand the challenges they face and develop optimal solutions to meet these challenges. We also believe that the knowledge that we develop while working with our clients provides us with a significant competitive advantage as those clients look to expand the scope of services outsourced to third party service providers.

Well Positioned to Capitalize on the Large Product Sales Training Market. We believe that the introduction of new products with advanced features, combined with the growing amount and accessibility of information available to consumers, requires companies to maintain a highly skilled and technologically current sales force to most effectively capture customer interest and confidence. In-house implementation of product sales training programs can be expensive and time-consuming as these programs typically involve significant levels of face-to-face training, in some cases across a large sales force that can be located around the globe. In addition, product sales training tends to be a continuous process, as the pace of new products and features in many cases requires year-round updating of the sales force. We have what we believe to be one of the industry’s leading product sales training platforms, and are well positioned to benefit from increased training outsourcing as companies look for ways to reduce costs.

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Business Model Supports Visibility of Revenues. We believe the nature of our business, which includes established relationships with our clients, average project durations of one year, as well as many long term contracts with our customers, provides us with a platform from which to drive revenues and gives us visibility into our future performance. We have long-standing relationships with many of our clients, with over 60% of our top 25 clients having used our services for five or more years. Additionally, over 90% of our annual revenue is generated by clients that existed in the prior year. We also had a backlog for services under executed contracts of $221.3 million as of December 31, 2012, most of which we anticipate will be recognized as revenue during 2013.

Highly Qualified and Dedicated Employees and Tenured Management Team. Our most important asset is our people, as their wide-ranging skill set enables us to serve our diverse and expanding global client base. As a result, we are committed to the continued development of our employees. We offer our employees technical, functional, industry, managerial and leadership skill development and training throughout their careers with us. We seek to reinforce our employees’ commitment to our clients, culture and values through a comprehensive performance management system and a career philosophy that rewards both individual performance and teamwork. We also benefit from the skill and experience of our executive management team, who together have in excess of 100 years experience in the training industry and have an average tenure with our company of over 20 years.

Contracts

We currently perform under fixed price (including fixed-fee per transaction), time-and-materials and cost-reimbursable contracts. Our contracts with the U.S. Government have predominantly been cost-reimbursable contracts and fixed price contracts. We are required to comply with Federal Acquisition Regulations and Government Cost Accounting Standards with respect to services provided to the U.S. Government and its agencies. These Regulations and Standards govern the procurement of goods and services by the U.S. Government and the nature of costs that can be charged with respect to such goods and services. All such contracts are subject to audit by a designated government audit agency, which in most cases is the Defense Contract Audit Agency (the “DCAA”). The DCAA has audited our contracts and indirect rates through 2005 without any material disallowances.

The following table illustrates the percentage of our total revenue attributable to each type of contract for the year ended December 31, 2012:

Fixed price (including fixed-fee per transaction)	60	%
Time-and-materials, including fixed rate	33
Cost-reimbursable	7
Total revenue	100	%

Fixed price contracts provide for payment to us of pre-determined amounts as compensation for the delivery of specific products or services, without regard to the actual costs incurred. We bear the risk that increased or unexpected costs required to perform the specified services may reduce our profit or cause us to sustain a loss, but we have the opportunity to derive increased profit if the costs required to perform the specified services are less than expected. Fixed price contracts generally permit the client to terminate the contract on written notice; in the event of such termination we would typically be paid a proportionate amount of the fixed price.

Time-and-materials contracts generally provide for billing of services based upon the hourly billing rates of the employees performing the services and the actual expenses incurred multiplied by a specified mark-up factor up to a certain aggregate dollar amount. Our time-and-materials contracts include certain contracts under which we have agreed to provide training, engineering and technical services at fixed hourly rates. Time-and-materials contracts generally permit the client to control the amount, type and timing of the services to be performed by us and to terminate the contract on written notice. If a contract is terminated, we are typically paid for the services we have provided through the date of termination.

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Cost-reimbursable contracts provide for us to be reimbursed for our actual direct and indirect costs plus a fee. These contracts also are generally subject to termination at the convenience of the client. If a contract is terminated, we are typically reimbursed for our costs through the date of termination, plus the cost of an orderly termination and paid a proportionate amount of the fee.

International

We conduct our business outside of the United States in over 45 countries primarily through our wholly owned subsidiaries located in the United Kingdom, France, Germany, Netherlands, Denmark, Canada, Mexico, Colombia, Singapore, China and India. Through these subsidiaries, we are capable of providing substantially the same services and products as are available to clients in the United States, although modified as appropriate to address the language, business practices and cultural factors unique to each client and country. In combination with our subsidiaries, we are able to coordinate the delivery to multi-national clients of services and products that achieve consistency on a global, enterprise-wide basis. Revenue from operations outside the United States represented approximately 19% of our consolidated revenue for the year ended December 31, 2012 (see Note 12 to the accompanying Consolidated Financial Statements).

Customers

During 2012, we provided services to over 500 customers. Significant customers include multinational automotive manufacturers, such as General Motors Company, Hyundai Motor Company, Jaguar Land Rover, Ford Motor Company and Chrysler Group; governmental agencies, such as the U.S. Department of Defense, U.S. Department of Commerce, U.S. Naval Undersea Warfare Center, Office of Personnel Management and the Skills Funding Agency in the United Kingdom; U.S. Government prime contractors, such as Bechtel National, Inc. and URS Corporation; commercial electric power utilities, such as Eskom, Midwest Generation and Suez Energy; and other large multinational companies, such as Microsoft, CIGNA Corporation, Rockwell Automation, Hewlett Packard Company, Network Appliance, Cisco Systems, Inc., Texas Instruments, Lowe’s Companies, Inc., Bank of America, General Electric, United Technologies Corporation and United States Steel Corporation. During the year ended December 31, 2012, we provided services to 131 customers in the Fortune 500 and 99 customers in the Global Fortune 500.

We have a market concentration of revenue in the automotive sector. Revenue from the automotive industry accounted for approximately 17%, 17% and 18% of our consolidated revenue for the years ended December 31, 2012, 2011 and 2010, respectively. We also have a concentration of revenue from the United States government. For the years ended December 31, 2012, 2011 and 2010, sales to the United States government and its agencies represented approximately 12%, 14% and 22%, respectively, of our consolidated revenue. Revenue was derived from many separate contracts with a variety of government agencies that are regarded by us as separate customers. No single customer accounted for more than 10% of our consolidated revenue in 2012. Accounts receivable from a single automotive customer totaled $9.0 million as of December 31, 2012 and $6.3 million as of December 31, 2011, accounting for approximately 11% and 9% of our total accounts receivable as of those dates, respectively.

Employees

Our principal resource is our personnel. As of December 31, 2012, we had 2,775 employees. We also utilize additional adjunct instructors and consultants as needed. Our future success depends to a significant degree upon our ability to continue to attract, retain and integrate into our operations instructors, engineers, technical personnel and consultants who possess the skills and experience required to meet the needs of our clients.

We utilize a variety of methods to attract and retain personnel. We believe that the compensation and benefits offered to our employees are competitive with the compensation and benefits available from other organizations with which we compete for personnel. In addition, we encourage the professional development of our employees, both internally via GP University (our own internal training resource) and through third parties, and we also offer tuition reimbursement for job-related educational costs. We believe that we have good relations with our employees.

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Competition

We face a highly competitive environment. The principal competitive factors are the experience and capability of service personnel, performance, quality and functionality of products, reputation and price. The training industry is large, highly fragmented and competitive, with low barriers to entry and no single competitor accounting for a significant market share. According to Training Magazine’s 2012 Training Industry Report, U.S. training expenditures totaled $55.8 billion in 2012, including payroll and spending on external products and services. Our competitors include several large publicly traded and privately held companies, vocational and technical training schools, degree-granting colleges and universities, continuing education programs and thousands of small privately held training providers and individuals. In addition, many of our clients maintain internal training departments, which have the resources and ability to provide the same or similar services in-house. Some of our competitors offer services and products at lower prices, and some competitors have significantly greater financial, managerial, technical, marketing and other resources. Moreover, we expect to face additional competition from new entrants into the training and performance improvement market due, in part, to the evolving nature of the market and the relatively low barriers to entry. There can be no assurance that we will be successful against such competition.

Engineering and consulting services such as those that we provide are performed by many of the customers themselves, large architectural and engineering firms that have expanded their range of services beyond design and construction activities, large consulting firms, information technology companies, major suppliers of equipment and individuals and independent service companies similar to us. The engineering and construction markets are highly competitive and require substantial resources and capital investment in equipment, technology and skilled personnel. Many of our competitors for our engineering and technical consulting services have greater financial resources than we do. Competition also places downward pressure on our contract prices and profit margins. We cannot provide any assurance that we will be able to compete successfully, and the failure to do so could adversely affect our business and financial condition.

Marketing

Business development and sales resources are aligned with our operating groups to support existing customer accounts and new customer development. We use attendance at trade shows, presentations of technical papers at industry and trade association conferences, press releases, webinars and workshops given by our personnel to serve an important marketing function. We also carry out selective advertising and do targeted marketing to current and prospective clients. By staying in contact with clients and looking for opportunities to provide further services, we sometimes obtain contract awards or extensions without having to undergo competitive bidding. In other cases, clients ask us to bid competitively. In both cases, we submit proposals to the client for evaluation. The period between submission of a proposal to final award can range from 30 days or less (generally for noncompetitive, short-term contracts), to a year or more (generally for large, competitive multi-year contracts).

Backlog

Our backlog for services under executed contracts and subcontracts was approximately $221.3 million and $203.3 million as of December 31, 2012 and 2011, respectively. We anticipate that most of our backlog as of December 31, 2012 will be recognized as revenue during 2013. However, the rate at which services are performed under certain contracts, and thus the rate at which backlog will be recognized, may be at the discretion of the client and most contracts are, as mentioned above, subject to termination by the client upon written notice.

Environmental Statutes and Regulations

We provide environmental engineering services primarily to the U.S. Army in Maryland, including the development and management of site environmental remediation plans. Our activities in connection with providing environmental engineering services may also subject us to federal, state and local environmental laws and regulations (including, without limitation, the Clean Water Act, the Clean Air Act, Superfund, the Resource Conservation and Recovery Act and the Occupational Safety and Health Act). Although we subcontract most remediation construction activities and all removal and offsite disposal and treatment of hazardous substances, we could still be held liable for clean-up or violations of such laws as an “operator” or otherwise under such federal, state and local environmental laws and regulations with respect to a site where we have provided environmental engineering and support services. We believe, however, that we are in compliance in all material respects with such environmental laws and regulations.

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Item 1A: Risk Factors

The following are some of the factors that we believe could cause our actual results to differ materially from historical results and from the results contemplated by the forward-looking statements contained in this report and other public statements made by us. Additional risks and uncertainties not presently known to us, or that we currently see as immaterial, may also harm our business. Most of these risks are generally beyond our control. If any of the risks or uncertainties described below, or any such additional risks and uncertainties actually occur, our business, results of operations and financial condition could be materially and adversely affected.

Changing economic conditions in the United States, the United Kingdom and the other countries in which we conduct our operations could harm our business, results of operations and financial condition.

Our revenues and profitability are related to general levels of economic activity and employment primarily in the United States and the United Kingdom. As a result, economic recession in both of those countries could harm our business and financial condition. A significant portion of our revenues is derived from Fortune 500 companies and their non-U.S. equivalents, which historically have decreased expenditures for external training during economic downturns. If the economies in which these companies operate are weakened in any future period, these companies may reduce their expenditures on external training, and other products and services supplied by us, which could materially and adversely affect our business, results of operations and financial condition. As we expand our business globally, we might be subject to additional risks associated with economic conditions in the countries into which we enter or in which we expand our operations.

Our revenue and financial condition could be adversely affected by the loss of business from significant customers, including automotive manufacturers, the U.S. Government and other customers.

During the years ended December 31, 2012, 2011 and 2010, revenue from our customers in the automotive industry accounted for approximately 17%, 17% and 18%, respectively, of our consolidated revenue.  Historically, U.S. auto manufacturers have been negatively impacted during times of economic downturns and recession, resulting in significant reductions in vehicle sales requiring the auto manufacturers to cut costs. While the condition of the automotive industry has improved in recent periods, further cost-cutting, a lack of sufficient funding or a decision to cease or reduce contract awards to us, could adversely affect our business and financial condition. In addition, default in payment of accounts receivable from our customers in the automotive industry could cause us to incur substantial losses.

For the years ended December 31, 2012, 2011 and 2010, revenue from the U.S. Government represented approximately 12%, 14% and 22% of our consolidated revenue, respectively. However, the revenue was derived from a number of separate contracts with a variety of government agencies we regard as separate customers. Government contracts are subject to various uncertainties, restrictions and regulations, including oversight audits by government representatives and profit and cost controls.  If we fail to comply with all of the applicable regulations, requirements or laws, our existing contracts with the government could be terminated and our ability to seek future government contracts or subcontracts could be adversely affected.  In addition, the funding of government contracts is subject to Congressional appropriations.  Budget decisions made by the U.S. Government are outside of our control and could result in a reduction or elimination of contract funding. A shift in government spending to other programs in which we are not involved or a reduction in general government spending could have a negative impact on our financial condition. The U.S. Government is under no obligation to maintain funding for or to continue to fund our contracts or subcontracts.

Substantially all of our contracts are subject to termination on written notice and, therefore, our operations are dependent upon our customers’ continued satisfaction with our services and their continued inability or unwillingness to perform those services themselves or to engage other third-parties to deliver such services.

The price of our common stock is highly volatile and could decline regardless of our operating performance.

The market price of our common stock could fluctuate in response to, among other things:

· changes in economic and general market conditions;

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· changes in the outlook and financial condition of certain of our significant customers and industries in which we have a concentration of business;

· changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business;

· changes in accounting standards, policies, guidance or interpretations or principles;

· sales of common stock by our directors, officers and significant stockholders;

· factors affecting securities of companies included in the Russell 3000^R Index, in which our common stock is included;

· our failure to achieve operating results consistent with securities analysts’ projections; and

· the operating and stock price performance of competitors.

These factors might adversely affect the trading price of our common stock and prevent you from selling your common stock at or above the price at which you purchased it. In addition, in recent periods, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including ours and others in our industry. These changes can occur without regard to the operating performance of the affected companies. As a result, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these fluctuations could materially reduce our share price.

A substantial portion of our assets consists of goodwill and intangible assets, which are subject to impairment. We could incur material asset impairment charges in future periods.

As of December 31, 2012, we had goodwill of $102.8 million and other intangible assets of $15.9 million in connection with acquisitions. In accordance with U.S. GAAP, goodwill is reviewed annually for impairment unless circumstances or events indicate that an impairment test should be performed sooner to determine if there has been any impairment to value.  The review for impairment is based on several factors requiring judgment. A decrease in expected cash flows or change in market conditions, among other things, may indicate potential impairment of recorded goodwill. We tested our goodwill at the reporting unit level as of December 31, 2012 and 2011 and there was no indication of impairment.

Our acquisitions in recent years have not involved the acquisition of significant tangible assets and, as a result, a significant portion of the purchase price in each case was allocated to goodwill and other intangible assets. We will continue to test for impairment on an annual basis, coinciding with our fiscal year-end, or on an interim basis if events and circumstances indicate a possible impairment. However, we may incur further material goodwill or other intangible asset impairment charges in the future related to past acquisitions.

Our financial results are subject to quarterly fluctuations, which may result in volatility or declines in our stock price.

We experience, and expect to continue to experience, fluctuations in quarterly operating results. Consequently, you should not deem our results for any particular quarter to be necessarily indicative of future results. Factors that may affect quarterly operating results in the future include:

· the overall level of services and products sold;

· the volume of publications shipped by our Sandy segment each quarter, because revenue and cost of publications contracts are recognized in the quarter during which the publications ship;

· fluctuations in project profitability;

· the gain or loss of material clients;

· the timing, structure and magnitude of acquisitions;

· participant training volume and general levels of outsourcing demand from clients in the industries that we serve;

· the budget and purchasing cycles of our clients, especially of the governments and government agencies that we serve;

· the commencement or completion of client engagements or services and products in a particular quarter;

· currency fluctuations; and

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· the general level of economic activity.

Accordingly, it is difficult for us to forecast our growth and results of operations on a quarterly basis. If we fail to meet expectations of investors or analysts, our stock price may fall rapidly and without notice. Furthermore, the fluctuation of quarterly operating results may render less meaningful period-to-period comparisons of our operating results.

Sagard Capital Partners, L.P. (“Sagard”) may exert influence over us and could delay or deter a change of control or other business combination or otherwise cause us to take actions with which other stockholders may disagree.

As of December 31, 2012, Sagard beneficially owned 3,509,774 shares or 18.4% of our outstanding common stock. In addition, until Sagard owns less than certain specified amounts of common stock or certain other conditions have been met, Sagard is entitled to designate an individual to serve on our board of directors. As a result, Sagard may exert influence over our decision to enter into any corporate transaction or with respect to any transaction that requires the approval of stockholders, regardless of whether other stockholders believe that the transaction is in their own best interests. This could have the effect of delaying, deterring or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders.

We are vulnerable to the cyclical nature of the markets we serve.

The demand for our services and products is dependent upon training and marketing budgets and the existence of projects with training, engineering, procurement, construction or management needs. Although downturns can impact our entire business, the automotive, manufacturing, electronics and semiconductors, construction, alternative fuels and energy industries are examples of sectors that are cyclical in nature and have been affected from time to time by fluctuations in either national or worldwide demand for our services. Industries such as these and many of the others we serve have historically been and might continue to be vulnerable to general downturns and are and might continue to be cyclical in nature. During economic downturns, our clients might demand better terms. In addition, many of our training contracts are subject to modification in the event of certain material changes in the business or demand for our services. Our government clients also might face budget deficits that prohibit them from funding proposed and existing projects. As a result, our past results have varied considerably and could continue to vary depending upon the demand for future projects in the industries that we serve.

We may continue making acquisitions as part of our growth strategy, which subjects us to numerous risks that could have a material adverse effect on our business, financial condition and results of operations.

As part of our growth strategy, we may continue to pursue selective acquisitions of businesses that broaden our service and product offerings, deepen our capabilities and allow us to enter attractive new domestic and international markets. Pursuit of acquisitions exposes us to many risks, including that:

· acquisitions may require significant capital resources and divert management’s attention from our existing business;

· acquisitions may not provide the benefits anticipated;

· acquisitions could subject us to contingent or other liabilities, including liabilities arising from events or conduct predating the acquisition of a business that were not known to us at the time of the acquisition;

· we may incur significantly greater expenditures in integrating an acquired business than had been initially anticipated;

· acquisitions may create unanticipated tax and accounting problems; and

· acquisitions may result in a material weakness in our internal controls if we are not able to successfully establish and implement proper controls and procedures for the acquired business.

Our failure to successfully accomplish future acquisitions or to manage and integrate completed or future acquisitions could have a material adverse effect on our business, financial condition or results of operations. We can provide no assurances that we:

· will identify suitable acquisition candidates;

· can consummate acquisitions on acceptable terms;

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· can successfully compete for acquisition candidates against larger companies with significantly greater resources;

· can successfully integrate any acquired business into our operations or successfully manage the operations of any acquired business; or

· will be able to retain an acquired company’s significant client relationships, goodwill and key personnel or otherwise realize the intended benefits of any acquisition.

In addition, acquisitions might involve our entry into new businesses that might not be as profitable as we expect. We can provide no assurances that our expectations regarding the profitability of future acquisitions will prove to be accurate. Acquisitions might also increase our exposure to the risks inherent in certain markets or industries. For example, Sandy’s business is heavily oriented toward providing product sales training to auto manufacturers in the U.S. and, consequently, this acquisition increased our exposure to the risks of the auto manufacturing industry. 

As a result of completed and possible future acquisitions, our past performance is not indicative of future performance, and investors should not base their expectations as to our future performance on our historical results.

Future acquisitions may require that we incur debt or issue dilutive equity.

Future acquisitions may require us to incur debt, under our existing credit facility or otherwise, or issue equity, resulting in additional leverage or dilution of ownership.

Difficulties in integrating acquired businesses could result in reduced revenues and income.

We might not be able to integrate successfully any business we have acquired or could acquire in the future. The integration of the businesses will be complex and time consuming and will place a significant strain on our management, administrative services personnel and information systems. This strain could disrupt our business. Furthermore, we could be adversely impacted by unknown liabilities of acquired businesses. We could encounter substantial difficulties, costs and delays involved in integrating common accounting, information and communication systems, operating procedures, internal controls and human resources practices, including incompatibility of business cultures and the loss of key employees and customers. Also, depending on the type of acquisition, a key element of our strategy may include retaining management and key personnel of the acquired business to operate the acquired business for us.  Our inability to retain these individuals could materially impair the value of an acquired business. In addition, small businesses acquired by us may have greater difficulty competing for new work as a result of being part of our larger entity. These difficulties could reduce our ability to gain customers or retain existing customers, and could increase operating expenses, resulting in reduced revenues and income and a failure to realize the anticipated benefits of acquisitions.

Our business and financial condition could be adversely affected by government limitations on contractor profitability.

A significant portion of our revenue and profit is derived from contracts with the U.S. Government and subcontracts with prime contractors of the U.S. Government. The U.S. Government places limitations on contractor profitability; therefore, government-related contracts might have lower profit margins than the contracts we enter into with commercial customers.

A negative audit or other actions by the U.S. Government could adversely affect our future operating performance.

As a U.S. Government contractor, we must comply with laws and regulations relating to U.S. Government contracts and are subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities to which companies with solely commercial customers are not subject. We are subject to audit and investigation by the DCAA and other government agencies with respect to our compliance with federal laws, regulations and standards. These audits may occur several years after the period to which the audit relates. The DCAA, in particular, also reviews the adequacy of, and our compliance with, our internal control systems and policies, including our purchasing, property, estimating, compensation and management information systems. Any payments received by us from the U.S. Government for allowable direct and indirect costs are subject to adjustment after audit by government auditors and repayment to the government if the payments exceed allowable costs as defined in the government contracts, which could result in a material adjustment of the payments received by us under such contracts. In addition, any costs found to be improperly allocated to a specific contract will not be reimbursed. If we are found to be in violation of the law, we may be subject to civil or criminal penalties or administrative sanctions, including contract termination, the assessment of penalties and suspension or debarment from doing business with U.S. Government agencies. For example, many of the contracts we perform for the U.S. Government are subject to the Service Contract Act, which requires hourly employees to be paid certain specified wages and benefits. If the Department of Labor determines that we violated the Service Contract Act or its implementing regulations, we could be suspended for a period of time from winning new government contracts or renewals of existing contracts, which could materially and adversely affect our future operating performance.

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Furthermore, our reputation could suffer serious harm if allegations of impropriety were made against us. If we are suspended or prohibited from contracting with the U.S. Government, or any significant U.S. Government agency, if our reputation or relationship with U.S. Government agencies becomes impaired or if the U.S. Government otherwise ceases doing business with us or significantly decreases the amount of business it does with us, it could materially and adversely affect our operating performance and could result in additional expenses and a loss of revenue.

We are a party to fixed price contracts and may enter into similar contracts in the future, which could result in reduced profits or losses if we are not able to accurately estimate or control costs.

A significant portion of our revenue is attributable to contracts entered into on a fixed price basis, which allows us to benefit from cost savings, but we carry the burden of cost overruns.  If our initial estimates are incorrect, or if unanticipated circumstances arise, we could experience cost overruns which would result in reduced profits or even result in losses on these contracts.  Our financial condition is dependent upon our ability to maximize our earnings from our contracts.  Lower earnings or losses caused by cost overruns could have a negative impact on our financial results.

Under time and materials contracts, we are paid for labor at negotiated hourly billing rates and for certain expenses. Under cost-reimbursable contracts, which are subject to a contract ceiling amount, we are reimbursed for allowable costs and paid a fee, which may be fixed or performance based. However, if costs exceed the contract ceiling or are not allowable under the provisions of the contract or applicable regulations, we may not be able to obtain reimbursement for all such costs.

Our inability to successfully estimate and manage costs on each of these contract types may materially and adversely affect our financial condition. Cost overruns also may adversely affect our ability to sustain existing programs and obtain future contract awards.

Our revenues may be adversely affected if we fail to win competitively awarded contracts or to receive renewal or follow-on contracts.

We obtain many of our significant contracts, including U.S. Government contracts, through a competitive bidding process. Competitive bidding presents a number of risks, including, without limitation:

· the need to compete against companies or teams of companies that may have more financial and marketing resources and more experience in bidding on and performing major contracts than we have;

· the need to compete against companies or teams of companies that may be long-term, entrenched incumbents for a particular contract for which we are competing;

· the need to compete to retain existing contracts that have in the past been awarded to us;

· the expense and delay that may arise if our competitors protest or challenge new contract awards;

· the need to submit proposals for scopes of work in advance of the completion of their design, which may result in unforeseen cost overruns;

· the substantial cost and managerial time and effort, including design, development and marketing activities necessary to prepare bids and proposals for contracts that we may not win;

· the need to develop, introduce and implement new and enhanced solutions to our customers’ needs;

· the need to locate and contract with teaming partners and subcontractors; and

· the need to accurately estimate the resources and cost structure that will be required to perform any fixed price contract that we win.

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There are no assurances that we will continue to win competitively awarded contracts or to receive renewal or follow-on contracts. Renewal and follow-on contracts are important because our contracts are for fixed terms. These terms vary from shorter than one year to over five years, particularly for contracts with extension options. The loss of revenues from our failure to win competitively awarded contracts or to obtain renewal or follow-on contracts may be significant because competitively awarded contracts account for a substantial portion of our sales.

Our backlog is subject to reduction and cancellation, which could negatively impact our future revenues or earnings.

Our backlog for services under executed contracts (including subcontracts and purchase orders) was approximately $221.3 million, $203.3 million and $136.1 million as of December 31, 2012, 2011 and 2010, respectively.  There can be no assurance that the revenues projected in our backlog will be realized or, if realized, will result in profits. Further, contract terminations or reductions in the original scope of contracts reflected in our backlog might occur at any time as discussed below in more detail.

Our backlog consists of projects for which we have signed contracts from customers. The rate at which services are performed under contracts, and thus the rate at which backlog will be recognized, may be at the discretion of the client. We cannot predict with certainty when or if backlog will be performed. In addition, even where a project proceeds as scheduled, it is possible that customers could default or otherwise fail to pay amounts owed to us. Material delays, terminations or payment defaults under contracts included in our backlog could have a material adverse effect on our business, results of operations and financial condition.

In addition, most of our contracts are subject to termination by the client upon written notice. Reductions in our backlog due to termination by a customer or for other reasons could materially and adversely affect the revenues and earnings we actually receive from contracts included in our backlog. If we experience terminations of significant contracts or significant scope adjustments to contracts reflected in our backlog, our financial condition, results of operations, and cash flow could be materially and adversely impacted.

We rely on third parties, including subcontractors, suppliers and teaming partners, to perform a portion of the services we must provide to our customers and disputes with or the failure to perform satisfactorily of such a third party could materially and adversely affect our performance and our ability to obtain future business.  

Many of our contracts involve subcontracts or agreements with other companies upon which we rely to perform a portion of the services we must provide to our customers. There is a risk that we may have disputes with our subcontractors, including disputes regarding the quality and timeliness of work performed by the subcontractor, customer concerns about the subcontractor, our failure to extend existing task orders or issue new task orders under a subcontract or our hiring of personnel of a subcontractor. A failure by one or more of our subcontractors to satisfactorily provide, on a timely basis, the agreed upon services may materially and adversely impact our ability to perform our obligations as the prime contractor. Subcontractor performance deficiencies could expose us to liability and have a material adverse effect on our ability to compete for future contracts and orders.

Also, from time to time we have entered, and expect to continue to enter, into joint venture, teaming and other similar arrangements which involve risks and uncertainties. These risks and uncertainties could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture, teaming and other similar arrangements.

We maintain a workforce based upon anticipated staffing needs. If we do not receive future contract awards or if these awards are delayed or reduced in scope or funding, we could incur significant costs.

Our estimates of future staffing requirements depend in part on the timing of new contract awards. We make our estimates in good faith, but our estimates could be inaccurate or change based upon new information. In the case of larger projects, it is particularly difficult to predict whether we will receive a contract award and when the award will be announced.  In some cases the contracts that are awarded require staffing levels that are different, sometimes lower, than the levels anticipated when the work was proposed. The uncertainty of contract award timing and changes in scope or funding can present difficulties in matching our workforce size with our contract needs. If an expected contract award is delayed or not received, or if a contract is awarded for a smaller scope of work than proposed, we could incur significant costs associated with making or failing to make reductions in staff.

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Failure to continue to attract and retain qualified personnel could harm our business.

Our principal resource is our personnel. A significant portion of our revenue is derived from services and products that are delivered by instructors, engineers, technical personnel and consultants. Our consulting, technical training and engineering services require the employment of individuals with specific skills, training, licensure and backgrounds. An inability to hire or maintain employees with the required skills, training, licensure or backgrounds could have a material adverse effect on our ability to provide quality services, to expand the scope of our service offerings or to attract or retain customers or to accept contracts, which could negatively impact our business and financial condition. In order to initiate and develop client relationships and execute our growth strategy, we must continue to hire and maintain qualified salespeople. We must also continue to attract and develop capable management personnel to guide our business and supervise the use of our resources.

Similarly, our U.S. Government contracts require employment of individuals with specified skills, work experience, licensures, security clearances and backgrounds. An inability to hire or maintain employees with the required skills, work experience, licensure, security clearances or backgrounds could have a material adverse effect on our ability to win new contracts or satisfy existing contractual obligations, and could result in additional expenses or possible loss of revenue.

Competition for qualified personnel can be intense. We cannot assure you that qualified personnel will continue to be available to us or will be available to us when our needs arise or on terms favorable to us. Any failure to attract or retain qualified instructors, engineers, technical personnel, consultants, salespeople and managers in sufficient numbers could have a material adverse effect on our business and financial condition.

The loss of our key personnel, including our executive management team, could harm our business.

Our success is largely dependent upon the experience and continued services of our executive management team and our other key personnel. The loss of one or more of our key personnel and a failure to attract, develop or promote suitable replacements for them could materially and adversely affect our business, results of operation or financial condition.

Competition could materially and adversely affect our performance.

The training industry is highly fragmented and competitive, with low barriers to entry and no single competitor accounting for a significant market share. Our competitors include divisions of several large publicly traded and privately held companies, vocational and technical training schools, degree-granting colleges and universities, continuing education programs and thousands of small privately held training providers and individuals. In addition, many of our clients maintain internal training departments, which have the resources and ability to provide the same or similar services in-house. Some of our competitors offer similar services and products at lower prices, and some competitors have significantly greater financial, managerial, technical, marketing and other resources. Moreover, we expect to face additional competition from new entrants into the training and performance improvement market due, in part, to the evolving nature of the market and the relatively low barriers to entry.

The engineering and construction markets in which we compete are also highly competitive. Many of our competitors are niche engineering and construction companies. In some instances, it is necessary for us to partner with those competitors who meet the small business administration’s criteria for a small business in order to win contract awards. This competition places downward pressure on our contract prices and profit margins. Intense competition is expected to continue in our training, engineering and technical services markets, presenting us with significant challenges in our ability to maintain strong growth rates and acceptable profit margins. If we are unable to meet these competitive challenges, we could lose market share to our competitors and experience an overall reduction in our profits.

We cannot provide any assurance that we will be able to compete successfully in the industries or markets in which we compete, and the failure to do so could materially and adversely affect our business, results of operations and financial condition.

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Failure to keep pace with technology and changing market needs could harm our business.

Our future success will depend upon our ability to adapt to changing client needs, to gain expertise in technological advances rapidly and to respond quickly to evolving industry trends and market needs. Many of our clients are demanding that our services be available across the U.S. and worldwide. We cannot assure you that we will be able to expand our operations into all geographic areas into which our multinational clients seek to use our services or that we will be able to attract and retain qualified personnel to provide our services in all such geographic areas. We also cannot assure you that we will be successful in adapting to advances in technology or marketing our services and products in advanced formats. In addition, services and products delivered in the newer formats might not provide comparable training results. Furthermore, subsequent technological advances might render moot any successful expansion of the methods of delivering our services and products. If we are unable to develop new means of delivering our services and products due to capital, personnel, technological or other constraints, our business, results of operations and financial condition could be materially and adversely affected.

We have only a limited ability to protect the intellectual property rights that are important to our success, and we face the risk that our services or products may infringe upon the intellectual property rights of others.

Our future success depends, in part, upon our ability to protect our proprietary methodologies and other intellectual property, including our EtaPRO^TM software. Existing laws of some countries in which we provide or license or intend to provide or license our services or products may offer only limited protection of our intellectual property rights. We rely upon a combination of trade secrets, confidentiality policies, non-disclosure and other contractual arrangements and copyright and trademark laws to protect our intellectual property rights. The steps we take in this regard might not be adequate to prevent or deter infringement or other misappropriation of our intellectual property, and we may not be able to detect unauthorized use or take appropriate and timely steps to enforce our intellectual property rights. Protecting our intellectual property rights might also consume significant management time and resources.

We cannot be sure that our services and products, or the products of others that we offer to our clients, do not infringe on the intellectual property rights of third parties, and we might have infringement claims asserted against us or against our clients. These claims might harm our reputation, result in financial liabilities and prevent us from offering some services or products. We have generally agreed in our contracts to indemnify our clients against expenses or liabilities resulting from claimed infringements of the intellectual property rights of third parties. In some instances, the amount of these indemnities could be greater than the revenues we receive from the client. Any claims or litigation in this area, whether we ultimately win or lose, could be time-consuming and costly, injure our reputation or require us to enter into royalty or licensing arrangements. We might not be able to enter into these royalty or licensing arrangements on acceptable terms. Any limitation on our ability to provide or license a service or product could cause us to lose revenue-generating opportunities and require us to incur additional expenses to develop new or modified solutions for future projects.

Our information technology systems are subject to risks that we cannot control.

Our information technology systems are dependent upon global communications providers, web browsers, telephone systems, and other aspects of the Internet infrastructure that have experienced system failures and electrical outages in the past. Our systems are susceptible to slow access and download times, outages from fire, floods, power loss, telecommunications failures, break-ins, and similar events. Our servers are vulnerable to computer viruses, break-ins, and similar disruptions from unauthorized tampering with our computer systems. The occurrence of any of these events could disrupt or damage our information technology systems and inhibit our internal operations, our ability to provide services to our customers, and the ability of our customers to access our information technology systems. This could result in our loss of customers, loss of revenue or a reduction in demand for our services.

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A breach of our security measures could harm our business, results of operations and financial condition.

Our databases contain confidential data of our clients and our clients’ customers, employees and vendors. A party who is able to circumvent our security measures could misappropriate such confidential information or interrupt our operations. Many of our contracts require us to comply with specific data security requirements. If we are unable to maintain our compliance with these data security requirements or any person, including any of our current or former employees, penetrates our network security or misappropriates sensitive data, we could be subject to significant liabilities to our clients for breaching these data security requirements or other contractual confidentiality provisions. Furthermore, unauthorized disclosure of sensitive or confidential data of our clients or other parties, whether through breach of our computer systems, systems failure or otherwise, could also damage our reputation and cause us to lose existing and potential clients. We may also be subject to civil actions for breaches related to such data or need to expend significant capital and other resources to continue to protect against security breaches or to address any problem they may cause.

Our international sales and operations expose us to various political and economic risks, which could have a material adverse effect on our business, results of operations and financial condition.

Our revenue outside of the U.S. was approximately 19%, 18% and 18% of our total revenue for the years ended December 31, 2012, 2011 and 2010, respectively. We conduct our business primarily in the U.S., Europe (primarily the United Kingdom), Canada, Mexico, Colombia and Singapore, but also in other developed and developing countries, including India and China. We intend to continue to expand our global operations which could involve expanding into countries other than those in which we currently operate. It could also involve expanding into less developed countries, which may have less political, social or economic stability and less developed infrastructure and legal systems. International sales and operations might be subject to a variety of risks, including:

· greater difficulty in staffing and managing foreign operations;

· greater risk of uncollectible accounts;

· longer collection cycles;

· logistical and communications challenges;

· potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws;

· changes in labor conditions, burdens and costs of compliance with a variety of foreign laws;

· political and economic instability;

· increases in duties and taxation;

· exchange rate risks;

· greater difficulty in protecting intellectual property;

· general economic and political conditions in these foreign markets;

· acts of war or terrorism or natural disasters, and limits on the ability of governments to respond to such acts;

· restrictions on the transfer of funds into or out of a particular country; or

· nationalization of foreign assets and other forms of governmental protectionism.

As we expand our business into new countries, we may increase our exposure to the risks discussed above. An adverse development relating to one or more of these risks could affect our relationships with our customers or could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks associated with currency fluctuations, which could have a material adverse effect on our results of operations and financial condition.

Approximately 19% of our revenue for the year ended December 31, 2012 was denominated in foreign currencies, including the British Pound Sterling, the Canadian Dollar and the Euro, and, to a lesser extent, the Mexican Peso, Colombian Peso, the Indian Rupee, the Singapore Dollar, the Chinese Yuan and the Danish Krone. British Pound Sterling-denominated revenue represented approximately 15% of our revenue for the year ended December 31, 2012. As a result, changes in the exchange rates of these foreign currencies to the U.S. Dollar will affect our consolidated U.S. dollar revenue, cost of revenue and operating margins and could result in exchange losses. The impact of future exchange rate fluctuations on our results of operations cannot be accurately predicted.

Business disruptions could adversely affect our future sales, financial condition, reputation or stock price or increase costs and expenses.

Our business, and that of our key suppliers and customers, may be impacted by disruptions including, but not limited to, threats to physical security, information technology attacks or failures, damaging weather or other acts of nature and pandemics or other public health crises. Such disruptions could affect our internal operations or services provided to customers, adversely impacting our sales, financial condition, reputation or stock price or increase our costs and expenses.

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We are subject to potential liabilities which are not covered by our insurance.

We engage in activities in which there are substantial risks of potential liability.  We provide services involving electric power distribution and generation, nuclear power, chemical weapons destruction, petrochemical process training, pipeline operations, volatile fuels such as hydrogen and liquefied natural gas (“LNG”), environmental remediation, engineering design and construction management.  We maintain a consolidated insurance program (including general liability coverage) covering the businesses we currently own.  Claims by or against any covered insured could reduce the amount of available insurance coverage for the other insureds and for other claims. In addition, certain liabilities might not be covered at all, such as deductibles, self-insured retentions, amounts in excess of applicable insurance limits and claims that fall outside the coverage of our policies.

Although we believe that we currently have appropriate insurance coverage, we do not have coverage for all of the risks to which we are subject and we may not be able to obtain appropriate coverage on a cost-effective basis in the future.

Our policies exclude coverage for incidents involving nuclear liability, and we may not be covered by U.S. laws or industry programs providing liability protection for licensees of the Nuclear Regulatory Commission (typically utilities) for damages caused by nuclear incidents; we are not a licensee and few of our contracts with clients have contained provisions waiving or limiting our liability.  Therefore, we could be materially and adversely affected by a nuclear incident. In addition, certain environmental risks, such as liability under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, (“Superfund”), also might not be covered by our insurance. 

Some of our policies, such as our professional liability insurance policy, provide coverage on a “claims-made” basis covering only claims actually made during the policy period then in effect.  To the extent that a risk is not insured within our then-available coverage limits, insured under a low-deductible policy, indemnified against by a third party or limited by an enforceable waiver or limitation of liability, claims could be material and could materially and adversely affect our business, results of operations and financial condition.

We could incur substantial costs as a result of violations of, or liabilities under, environmental laws.

We provide environmental engineering services, including the development and management of site environmental remediation plans. Although we subcontract most remediation construction activities, and in all cases subcontract the removal and off-site disposal and treatment of hazardous substances, we could be subject to liability relating to the environmental services we perform directly or through subcontracts. For example, if we were deemed under federal or state laws, including Superfund, to be an “operator” of sites to which we provide environmental engineering and support services, we could be subject to liability for cleanup costs or violations of applicable environmental laws and regulations at such sites. Any incurrence of any substantial Superfund or other environmental liability could materially and adversely affect our business, results of operations or financial condition by reducing profits, causing us to incur losses related to the cost of resolving such liability or otherwise.

In addition, our environmental engineering services involve professional judgments about the nature of physical and environmental conditions, including the extent to which hazardous substances are present, and about the probable effect of procedures to mitigate or otherwise affect those conditions. If the judgments and the recommendations based upon those judgments are incorrect, we may be liable for resulting damages incurred by our clients.

Our authorized preferred stock and certain provisions in our amended and restated by-laws could make a third party acquisition of us difficult.

Our restated certificate of incorporation, as amended, (“restated certificate”), allows us to issue up to 10,000,000 shares of preferred stock, the rights, preferences, qualifications, limitations and restrictions of which may be fixed by the Board of Directors without any further vote or action by the stockholders. In addition, our amended and restated bylaws provide, among other things, that stockholders seeking to bring business before or to nominate candidates for election as directors at an annual meeting of stockholders must provide us with timely advance written notice of their proposal in a prescribed form. Our amended and restated bylaws also provide that stockholders desiring to call a special meeting for any purpose, must submit to us a request in writing of stockholders representing at least 50% of the combined voting power of all issued and outstanding classes of capital stock and stating the purpose of such meeting. The ability to issue preferred stock and such provisions in our bylaws might have the effect of delaying, discouraging or preventing a change in control that might otherwise be beneficial to stockholders and might materially and adversely affect the market price of our common stock.

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In addition, some provisions of Delaware law, particularly the “business combination” statute in Section 203 of Delaware General Corporation Law, might also discourage, delay or prevent someone from acquiring us or merging with us. As a result of these provisions in our charter documents and Delaware law, the price investors might be willing to pay in the future for shares of our common stock might be limited.

Our restated certificate allows us to redeem or otherwise dispose shares of our common stock owned by a foreign stockholder if certain U.S. Government agencies threaten termination of any of our contracts as a result of such an ownership interest.

The United States Departments of Energy and Defense have policies regarding foreign ownership, control or influence over government contractors who have access to classified information, and might conduct an inquiry as to whether any foreign interest has beneficial ownership of 5% or more of a contractor’s or subcontractor’s voting securities. If either Department determines that an undue risk to the defense and security of the United States exists as a result of foreign ownership, control or influence over a government contractor (including as a result of a potential acquisition), it might, among other things, terminate the contractor’s or subcontractor’s existing contracts. Our restated certificate allows us to redeem or require the prompt disposition of all or any portion of the shares of our common stock owned by a foreign stockholder beneficially owning 5% or more of the outstanding shares of our common stock if either Department threatens termination of any of our contracts as a result of such an ownership interest. These provisions may have the additional effect of delaying, discouraging or preventing a change in control and might materially and adversely affect the market price of our common stock. In connection with the sale of shares of common stock to Sagard in December 2009, we agreed to render these provisions, as well as other anti-takeover measures, inapplicable to Sagard.

Item 1B:        Unresolved Staff Comments

None.

Item 2:           Properties

We do not own any significant real property, but we and our subsidiaries lease an aggregate of approximately 471,000 square feet of primarily office and related space at various locations throughout the United States, the United Kingdom, France, Germany, Netherlands, Denmark, Canada, Mexico, Colombia, India, Singapore and China. We occupy approximately 46,000 square feet in an office complex in Elkridge, Maryland for our corporate headquarters under a lease which expires in 2013, and approximately 60,000 square feet in an office building in Troy, Michigan under a lease which expires in 2018. We anticipate entering into a new lease for corporate headquarters space prior to expiration of the current lease.

We believe that our properties have been well maintained, are suitable and adequate for us to operate at present levels and the productive capacity and extent of utilization of the facilities are appropriate for our existing real estate requirements. Upon expiration of these leases, we do not anticipate any difficulty in obtaining renewals or alternative space.

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Item 3:        Legal Proceedings

On February 22, 2011, the Company was named a defendant in a complaint filed by the State of Tennessee (the “State”) in the Chancery Court for the 20th Judicial District of Tennessee. The complaint alleged that Bryan Oil Company, an executive of Bryan Oil, the Company and a former employee of the Company, violated provisions of the Tennessee Petroleum Underground Storage Tank Act (the "UST Act") in connection with the closure of a waste oil storage tank in 1997. The Complaint sought civil penalties not to exceed $10,000 per day for each violation of the UST Act, post-judgment interest and court costs.  The Company denied the substantive allegations in the complaint and asserted that its actions complied with the UST Act and applicable regulations, that it did not file false information in violation of the law, and that it had valid defenses against the State's allegations. The State also began an administrative action to remove the Company as an approved Corrective Action Contractor (CAC) and issued a ruling that found that the Company had filed false information by incorrectly stating the size of the tank in a report filed in 1997. The Company appealed that ruling to the State UST Board.  In 2012, evaluation and monitoring of the site where the tank had been located confirmed that there is no actionable contamination on the site and that all soil and groundwater analytical results for the chemicals of concern concentration(s) remain below the site-specific clean-up levels. The State approved closure of the site and removal of the monitoring wells and issued a case closure letter dated December 27, 2012.  On or about January 10, 2013, all parties to the state court lawsuit entered into a compromise and settlement agreement resolving all matters in dispute among them, without the admission of any liability or the finding of any fault or violations of any statutes or regulations on the part of the Company or any of the other defendants.  In connection with the settlement, the Company agreed to pay $65,000 to the State. The state court lawsuit was dismissed, with prejudice, and the administrativeruling and appealwere withdrawn, formally concluding both matters.

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PART II

Item 5:        Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock, $0.01 par value, is traded on the New York Stock Exchange. The following table presents our high and low market prices for the last two fiscal years. During the periods presented below, we have not paid any cash dividends.

	2012
Quarter	High		Low
First	$	18.05	$	12.85
Second		18.49		14.58
Third		20.67		16.57
Fourth		21.44		18.26

	2011
Quarter	High		Low
First	$	13.83	$	9.64
Second		14.34		11.50
Third		14.26		9.79
Fourth		13.72		9.16

The number of shareholders of record of our common stock as of February 15, 2013 was 889. Shares of our common stock that are registered in the name of a broker or other nominee are listed as a single shareholder on our record listing, even though they are held for a number of individual shareholders. As such, our actual number of shareholders is higher than the number of shareholders of record.

We have not declared or paid any cash dividends on our common stock during the two most recent fiscal years. We do not anticipate paying cash dividends on our common stock in the foreseeable future and intend to retain future earnings to finance the growth and development of our business.

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Performance Graph

The following graph assumes $100 was invested on December 31, 2007 in GP Strategies Common Stock, and compares the share price performance with the NYSE Market Index and a peer group index which consists of the companies included in Standard Industrial Classification (SIC) 8200, Educational Services. Values are as of December 31 of the specified year assuming that all dividends were reinvested.

Company / Index	Year ended December 31,
Name	2007		2008		2009		2010		2011		2012
GP Strategies Corp.	$	100.00	$	42.35	$	70.70	$	96.15	$	126.57	$	193.90
NYSE Market Index		100.00		60.74		77.92		88.36		84.96		98.55
Peer Group Index		100.00		85.76		91.69		85.63		77.72		47.97

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Issuer Purchases of Equity Securities

The following table provides information about our share repurchase activity for the three months ended December 31, 2012:

						Total number		Approximate
						of shares		dollar value of
	Total number			Average		purchased as		shares that may yet
	of shares			price paid		part of publicly		be purchased under
Month	purchased			per share		announced program (1)		the program
October 1-31, 2012		-		$	-		-	$	3,578,000
November 1-30, 2012		68,160	(2)	$	20.45		29,813	$	2,970,000
December 1-31, 2012		141,549	(2)	$	19.94		96,713	$	1,059,000

(1)	Represents shares repurchased in the open market in connection with our share repurchase program under which we may repurchase shares of our common stock from time to time in the open market subject to prevailing business and market conditions and other factors. There is no expiration date for the repurchase program.
(2)	Includes shares surrendered to satisfy tax withholding obligations on restricted stock units which vested during these periods and shares surrendered to exercise stock options and satisfy the related tax withholding obligations.

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Item 6:         Selected Financial Data

The selected financial data presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our consolidated financial statements and the notes thereto included elsewhere in this report. Our consolidated statement of operations data for the years ended December 31, 2012, 2011, and 2010 and our consolidated balance sheet data as of December 31, 2012 and 2011 have been derived from our audited consolidated financial statements included elsewhere in this report. Our consolidated statement of operations data for the years ended December 31, 2009 and 2008 and our consolidated balance sheet data as of December 31, 2010, 2009, and 2008 have been derived from audited consolidated financial statements which are not presented in this report.

	Years ended December 31,
Statement of Operations Data	2012		2011		2010		2009			2008
	(In thousands, except per share amounts)
Revenue	$	401,572	$	333,167	$	259,926	$	219,240		$	267,893
Gross profit		71,971		56,634		42,690		34,091			40,809
Goodwill and intangible asset impairment loss		—		—		—		10,163			5,508
Interest expense		269		209		236		217			699
Income before income taxes		35,802		28,391		20,852		3,395			14,150
Net income (loss)		22,688		17,860		12,732		(1,190	)		7,837
Diluted earnings (loss) per share		1.18		0.94		0.68		(0.07	)		0.47

	December 31,
Balance Sheet Data	2012		2011		2010		2009		2008
	(In thousands, except per share amounts)
Cash and cash equivalents	$	7,761	$	4,151	$	28,902	$	10,803	$	3,961
Short-term borrowings		—		—		—		—		3,234
Working capital		49,146		35,958		47,322		37,377		22,849
Total assets		244,434		211,576		183,196		156,701		135,840
Long-term debt, including current maturities		—		—		—		—		—
Stockholders’ equity		167,337		143,394		124,787		110,890		92,806

Item 7:            Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2012 which are located in Item 8 of this report.

General Overview

We are a global performance improvement solutions provider of training, e-Learning solutions, management consulting and engineering services that seeks to improve the effectiveness of organizations by providing services and products that are customized to meet the specific needs of clients. Clients include Fortune 500 companies and governmental and other commercial customers in a variety of industries. We believe we are a global leader in performance improvement, with over four decades of experience in providing solutions to optimize workforce performance.

As of December 31, 2012, we operated through five reportable business segments: (i) Learning Solutions, (ii) Professional & Technical Services, (iii) Sandy Training & Marketing, (iv) Performance Readiness Solutions (formerly RWD), and (v) Energy Services. Our Learning Solutions segment represents an aggregation of two operating groups in accordance with the aggregation criteria in U.S. GAAP, while all of the other reportable segments each represent one operating group. We are organized by operating group primarily based upon the markets served by each group and/or the services performed. Each operating group consists of business units which are focused on providing specific products and services to certain classes of customers or within targeted markets. Marketing and communications, accounting, finance, legal, human resources, information systems and other administrative services are organized at the corporate level. Business development and sales resources are aligned with operating groups to support existing customer accounts and new customer development.

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Further information regarding our business segments is discussed below.

Learning Solutions. The Learning Solutions segment delivers training, curriculum design and development, e-Learning services, system hosting, training business process outsourcing and consulting services primarily to large companies in the electronics and semiconductors, healthcare, software, financial and other industries as well as to government agencies. The ability to deliver a wide range of training services on a global basis allows this segment to take over the entire learning function for the client, including their training personnel. The October 2012 acquisition of BlessingWhite added proprietary leadership training content and employee engagement tools and services to this segment’s offerings.

Professional & Technical Services. This segment has over four decades of experience providing training, consulting, engineering and technical services, including lean consulting, emergency preparedness, safety and regulatory compliance, chemical demilitarization and environmental services primarily to large companies in the manufacturing, steel, pharmaceutical and petrochemical industries, federal and state government agencies and large government contractors. This segment also provides services to users of alternative fuels, including designing and constructing liquefied natural gas (LNG), liquid to compressed natural gas (LCNG) and hydrogen fueling stations, as well as supplying fuel and equipment.

Sandy Training & Marketing. The Sandy segment provides custom product sales training and has been a leader in serving manufacturing customers in the U.S. automotive industry for over 30 years. Sandy provides custom product sales training designed to better educate customer sales forces with respect to new vehicle features and designs, in effect rapidly increasing the sales force knowledge base and enabling them to address detailed customer queries. Furthermore, Sandy helps our clients assess their customer relationship marketing strategy, measure performance against competitors and connect with their customers on a one-to-one basis. This segment also provides technical training services to automotive manufacturers as well as customers in other industries.

Performance Readiness Solutions. Formerly named RWD, this segment represents a portion of the consulting business acquired from RWD Technologies, LLC in April 2011. Certain of the other acquired RWD business units are managed within the Professional & Technical Services and Sandy segments discussed above. Performance Readiness Solutions provides human capital management and IT consulting services, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector.

Energy Services. The Energy Services segment provides engineering services, products and training primarily to electric power utilities. Our proprietary EtaPro^TM Performance and Condition Monitoring System provides a suite of performance and reliability solutions for power generation plants and is installed at over 1,000 power generating units in 34 countries. In addition to providing custom training solutions, this segment provides web-based training through our GPiLearn^TM portal, which offers over 1,300 courses to over 30,000 power plant personnel in the U.S. and in over 40 countries.

We discuss our business in more detail in Item 1.Business and the risk factors affecting our business in Item 1A. Risk Factors.

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Business Strategy

We seek to increase shareholder value by pursuing the following strategies:

Continuously enhance our service offerings and capabilities. We believe the demand for learning and development services will continue to increase. In a knowledge based economy, this demand is driven by ever increasing technology, processes, products, and attrition of personnel. The rate and effectiveness of the transfer of knowledge to the workforce of our clients, their partners, and even their customers can positively impact their performance. We plan to meet this demand by continuously expanding our services and capabilities through organic growth initiatives based upon our technical expertise as well as through targeted acquisitions. Our acquisitions in recent years have added product sales training and leadership development to our services offerings, strengthened our e-Learning and custom training content development services in both the commercial and government sectors, and expanded our geographical reach. We believe that the breadth of our service and product offerings allows us to effectively compete for customers by offering a comprehensive solution for custom training, consulting, engineering and technical services. We will continue to focus on increasing our capabilities to drive incremental growth from new, as well as existing, clients.

Develop and maintain strong customer relationships. We plan to preserve and grow our business by cross-selling our services and capabilities across and within our existing client base. We have a successful track record of increasing the scope of our work for a number of our clients, many of whom we estimate currently outsource only a fraction of their training expenditures. We believe that as our clients benefit from the efficient, cost-effective and flexible training solutions and services that we provide, many of them will find it beneficial to increase the scope of training services that they outsource to third party providers. We believe that the strength of our relationships with our existing clients, including the insight and knowledge into their operations that we have developed through these relationships, when combined with the broad range of our service and product offerings, provide us with an advantage when competing for these additional expenditures. We realize that many companies have reduced their external training expenditures due to the economic downturn; however, we will strive to preserve our relationships and increase our proportion of our customers’ total spend.

Leverage BPO capabilities. We have a demonstrated ability to provide training services across a wide spectrum of learning engagements from transactional multi-week assignments focused on a single aspect of a learning process to multi-year contracts where we manage the learning infrastructure of our customer. Integrated BPO engagements typically require us to assume responsibility for the development, delivery and administration of learning functions and are generally carried out under multi-year agreements. We intend to leverage our BPO capabilities to expand the customers and markets we serve.

Maintain our international presence. We believe international markets offer growth opportunities for our services. We intend to leverage our current international presence as well as continue pursuing our strategy of enhancing our international platform by selectively acquiring businesses in targeted geographies and following our current clients into new geographic markets. In our experience, many of our clients are seeking access to these and other attractive international markets and as such we intend to enhance our international capabilities. In order to support their business expansion we are providing employee training solutions across organizations in different countries and different languages, while maintaining quality and consistency in the overall training program. By moving into specific international markets with our existing clients, we are able to not only deepen our relationships with those clients, but are also able to develop expertise in those markets that we can leverage to additional customers. We believe that following this strategy provides us with opportunities to gain access to international markets with established client relationships in those markets.

Continue our disciplined acquisition strategy. We plan to continue to focus on evaluating compelling strategic acquisition targets to enhance our service offerings and delivery capabilities and to expand our geographic footprint. We have followed a disciplined approach to target selection and have been able to acquire complementary businesses at what we believe are attractive valuations. Since 2006, we have acquired over 20 businesses which have expanded our e-Learning capabilities and added complementary services such as product sales training and leadership development. Over half of these businesses are located outside of the United States and have strengthened our international platform, enabling us to meet the needs of our global clients while providing additional client opportunities. We also believe that our current operating structure, which utilizes a centralized infrastructure of corporate services to support our various platforms, enhances our ability to quickly and cost-effectively integrate acquisitions. We look to identify acquisitions to augment our capabilities when we believe acquisitions are the quickest and most efficient way of expanding our platform and service offerings.

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Acquisitions

Below is a summary of the acquisitions we completed during 2012, 2011 and 2010. See Note 2 to the accompanying Consolidated Financial Statements for further details, including the purchase price allocations.

2012 Acquisitions

Information Horizons

Effective May 1, 2012, we entered into an Asset Purchase Agreement with Information Horizons Limited (“Information Horizons”), an independent skills training provider located in the United Kingdom, to acquire its government funded training services business. The purchase price was $0.5 million in cash at closing. Information Horizons is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since May 1, 2012.

Asentus

On June 29, 2012, through our wholly-owned subsidiaries in Canada and Europe, we acquired the business and operations of Asentus Consulting Group Ltd. and Asentus Europe B.V. (collectively, “Asentus”). Asentus is an international provider of IT technical training content, and live and virtual training event services, with offices in Vancouver, Canada, The Netherlands, Germany and France. The total upfront purchase price for both companies was $1.4 million, of which $1.1 million was paid in cash at closing and $0.3 million was paid during the fourth quarter of 2012 subsequent to the finalization of a working capital calculation pursuant to the purchase agreement. In addition, the purchase agreement requires up to an additional $3.7 million of consideration, contingent upon the achievement of certain earnings targets, as defined in the purchase agreement, during two successive twelve-month periods following the closing. Of the total contingent consideration, a maximum of $2.1 million would be payable subsequent to the first twelve-month period following completion of the acquisition and a maximum of $1.6 million would be payable subsequent to the second twelve-month period following completion of the acquisition. The acquired Asentus business is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since July 1, 2012.

Rovsing Dynamics

On September 17, 2012, we entered into an Asset Purchase Agreement with Rovsing Dynamics A/S (“Rovsing”), located in Denmark, a provider of vibration condition monitoring hardware and software, and on that date acquired the business and certain operating assets. The purchase price was approximately $0.7 million in cash paid at closing. The acquired Rovsing business is included in the Energy Services segment and its results of operations have been included in the consolidated financial statements since September 17, 2012.

BlessingWhite

On October 1, 2012, we completed the acquisition of BlessingWhite, a provider of leadership development and employee engagement solutions. The purchase price was $10.8 million in cash at closing and is subject to a working capital adjustment as defined in the purchase agreement. We expect to finalize the working capital adjustment in the first quarter of 2013. BlessingWhite is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since October 1, 2012.

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2011 Acquisitions

Communication Consulting

On February 1, 2011, through our wholly-owned subsidiaries in Hong Kong and Shanghai, we acquired the training business and certain related assets of Cathay/Communication Consulting Limited (“Communication Consulting”), a Hong Kong-based training and consulting company with offices in Shanghai and Beijing, China, and Haryana (New Delhi) in India. Communication Consulting designs and delivers customized training solutions and specializes in the areas of leadership, communication skills, sales and customer service training. The purchase price for the acquired business and assets was $1.5 million in cash. In addition, the purchase agreement requires us to pay up to an additional $0.7 million, which would be payable subsequent to the two twelve-month periods following completion of the acquisition, contingent upon our Shanghai operations achieving specified revenue targets during those periods, as defined in the purchase agreement. During 2012, we paid $0.2 million of contingent consideration with respect to the revenue earned for the first twelve-month period following completion of the acquisition. Communication Consulting is included in the Professional & Technical Services segment and the results of its operations have been included in the consolidated financial statements since February 1, 2011.

Ultra Training Ltd.

On April 1, 2011, we acquired Ultra Training Ltd., an independent skills training provider located in the United Kingdom. We acquired 100% ownership of Ultra Training Ltd. for a purchase price of $3.4 million in cash. Ultra Training Ltd. is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since April 1, 2011.

RWD Technologies

On April 15, 2011, we completed the acquisition of certain assets of the consulting business of RWD Technologies, LLC, a Delaware limited liability company, and certain of its subsidiaries (collectively, “RWD”). RWD is a provider of human capital management and IT consulting services, business transformation and lean process improvement, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, energy, automotive, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector. We paid $28.0 million of cash at closing. The purchase price was subsequently adjusted based on the final determination of the working capital of the acquired business as of the closing date in accordance with the Asset Purchase Agreement. In September 2011, the seller paid us $2.2 million based on the final determination of working capital as of the acquisition date.

A portion of the acquired business is reported as a separate reportable segment named Performance Readiness Solutions, and the other business units are included in the Professional & Technical Services and Sandy segments. The results of RWD’s operations have been included in the consolidated financial statements since April 16, 2011.

The following unaudited pro-forma condensed consolidated results of operations assume that the acquisition of RWD was completed as of January 1 for each of the years below:

	Year ended
	December 31,
	2011		2010
	(In thousands, except per share amounts)
Revenue	$	354,609	$	324,587
Net income		18,605		8,279
Basic earnings per share		0.99		0.44
Diluted earnings per share		0.98		0.44

Beneast Training Ltd.

On August 1, 2011, we acquired the share capital of TK Holdings Ltd and its subsidiary Beneast Training Ltd. (collectively, “Beneast”), an independent skills training provider located in the United Kingdom. We acquired 100% ownership of Beneast for a purchase price of $6.8 million in cash. Beneast is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since August 1, 2011.

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Van Hee

On July 29, 2011, we entered into an Asset Purchase Agreement with Van Hee Transport Limited (“Van Hee”), an independent skills training provider located in the United Kingdom, to acquire a contract to provide government funded training services. The purchase price was $0.8 million in cash at closing and was recorded as an intangible asset which is being amortized over an estimated useful life of three years subsequent to the acquisition date.

2010 Acquisitions

Marton House

On April 1, 2010, we completed the acquisition of Marton House Plc (“Marton House”), a provider of custom e-Learning content development with expertise in leadership and product sales training in the United Kingdom. We acquired 100% ownership of Marton House for a purchase price of $2.8 million in cash. In addition, the purchase agreement requires us to pay up to an additional $3.7 million, of which approximately $1.2 million would be payable subsequent to each of the three twelve-month periods following completion of the acquisition, contingent upon Marton House achieving certain earnings targets during those periods, as defined in the purchase agreement. We paid $1.3 million of contingent consideration in April 2011 with respect to the earnings achieved for the first twelve-month period following completion of the acquisition. No contingent consideration was paid for the second twelve-month period following the completion of the acquisition as the earnings targets were not met for that period. Marton House is included in our Learning Solutions segment and its results of operations have been included in the consolidated financial statements since April 1, 2010.

Bath Consulting

On November 1, 2010, we completed the acquisition of Bath Consulting Group (“Bath Consulting”), a niche leadership and organizational development consulting firm in the United Kingdom. We acquired 100% ownership of Bath Consulting for a purchase price of $1.4 million in cash. In addition, the purchase agreement requires us to pay up to an additional $2.4 million, which would be payable subsequent to each of the three twelve-month periods following completion of the acquisition, contingent upon Bath Consulting achieving certain earnings targets during those periods, as defined in the purchase agreement. We paid $0.4 million of contingent consideration in 2012 with respect to the earnings achieved for the first twelve-month period following completion of the acquisition. We expect to pay $0.7 million of contingent consideration in the first quarter of 2013 with respect to the earnings achieved for the second twelve-month period following completion of the acquisition. Bath Consulting is included in our Learning Solutions segment and its results of operations have been included in the consolidated financial statements since November 1, 2010.

Academy of Training

On December 1, 2010, we completed the acquisition of Academy of Training Ltd. (“AoT”), an independent training provider in the United Kingdom. We acquired 100% ownership of AoT for a purchase price of $1.1 million in cash. In addition, the purchase agreement requires us to pay up to an additional $0.2 million, which would be payable subsequent to the twelve-month period following completion of the acquisition, contingent upon AoT achieving a revenue target during that period, as defined in the purchase agreement. We paid $0.1 million of contingent consideration in 2012 with respect to the twelve-month period following completion of the acquisition. AoT is included in our Learning Solutions segment and its results of operations have been included in the consolidated financial statements since December 1, 2010.

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Results of Operations

Operating Highlights

Year ended December 31, 2012 compared to the year ended December 31, 2011

For the year ended December 31, 2012, we had income before income taxes of $35.8 million compared to $28.4 million for the year ended December 31, 2011. The improved results are primarily due to an increase in operating income of $7.7 million, the components of which are discussed below. Included in operating income for 2011 is a $1.0 million gain on the reversal of a deferred rent liability related to the execution of a new lease for our Troy, Michigan facility during the second quarter of 2011. Also included in operating income is a $0.8 million net loss in 2012 and a $0.5 million net gain in 2011 on the change in estimated fair value of contingent consideration during 2012 related to acquisitions completed, which is discussed further below and in Note 2 to the Consolidated Financial Statements. Net income was $22.7 million, or $1.18 per diluted share, for the year ended December 31, 2012 compared to $17.9 million, or $0.94 per diluted share, for 2011. Included in net income is a $1.6 million income tax benefit during the third quarter of 2012 and a $0.9 million tax benefit during the fourth quarter of 2011 on the reduction of uncertain tax positions relating to periods that are now outside the applicable statute of limitations.

Diluted weighted average shares outstanding were 19.3 million for the year ended December 31, 2012 compared to 19.0 million for the same period in 2011. The increase in shares outstanding is primarily due to the issuance of shares for stock-based compensation and the effect of the increase in our stock price compared to the prior year on the results of the calculation of diluted weighted average shares outstanding.

Revenue

	Years ended December 31,
	2012		2011
	(Dollars in thousands)
Learning Solutions	$	161,455	$	130,392
Professional & Technical Services		87,844		85,285
Sandy Training & Marketing		70,243		54,604
Performance Readiness Solutions		55,794		40,079
Energy Services		26,236		22,807
	$	401,572	$	333,167

Learning Solutions revenue increased $31.1 million or 23.8% during the year ended December 31, 2012 compared to 2011. The increase in revenue is due to the following:

· A $10.7 million increase in our U.S. Learning Solutions organization due to increased e-Learning content development and training BPO services primarily due to new contracts in 2011 and 2012 with clients specializing in financial services and human resource management and expansion of work with existing clients;

· A $12.2 million increase in revenue from our Europe operations, of which approximately $5.4 million is attributable to acquisitions completed in the United Kingdom during 2011 and 2012. The remainder of the revenue increase is comprised of a $4.6 million increase in training and BPO services provided to various existing customers and a $3.0 million increase in government funded skills training during 2012 compared to 2011. These increases were offset by a $0.8 million decrease in U.S. dollar revenue recognized from our operations in Europe due to the change in currency exchange rates during 2012 compared to 2011;

· A $4.5 million increase attributable to the Asentus acquisition completed in June 2012; and

· A $3.7 million increase attributable to the BlessingWhite acquisition completed in October 2012.

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Professional & Technical Services revenue increased $2.6 million or 3% during the year ended December 31, 2012 compared to 2011. The increase in revenue is due to the following:

· A $2.8 million increase relating to construction projects for alternative fueling station facilities;

· A $3.2 million increase in revenue attributable to the acquired RWD business being included for an additional 3.5 months in 2012 as the acquisition was completed on April 15, 2011; and

· A $0.3 million net increase in revenue due to an increase in technical training services for various customers, primarily in the manufacturing, steel and oil & gas industries, which was offset in part by a decline in government training and engineering services.

The revenue increases in this segment were offset by a $2.0 million decrease in technical services for a pharmaceutical customer due to project completions and a $1.7 million decrease in revenue due to the completion of a large lean consulting contract in 2012.

Sandy Training & Marketing revenue increased $15.6 million or 28.6% during the year ended December 31, 2012 compared to 2011. The increase in revenue is due to the following:

· A $1.4 million increase attributable to the automotive business unit acquired from RWD in April 2011 due to there being a full year of results of 2012 compared to 8.5 months in 2011.

· A $5.0 million increase in new vehicle launch events and product sales training services for a large west coast automotive customer during 2012 compared to 2011;

· A $6.6 million net increase in training services for existing U.S. automotive customers;

· A $1.8 million increase due to certain client projects being transferred from the Performance Readiness Group to the Sandy segment at the beginning of 2012; and

· A $0.8 million increase in vehicle publications revenue, as the quantity of publications shipped during 2012 increased compared to 2011. Shipments of publications occur at various times throughout the year and the volume of publications shipped could fluctuate from quarter to quarter. Currently, publications are shipped during the second and fourth quarters of each year. Publications revenue in the Sandy Training & Marketing segment totaled $5.8 million during 2012 compared to $4.9 million during 2011.

Performance Readiness Solutions (formerly RWD) revenue increased $15.7 million or 39.2% during the year ended December 31, 2012 compared to 2011. The majority of the revenue increase, or approximately $16.1 million, is attributable to there being a full year of results in 2012 compared to only 8.5 months of results in 2011 as the acquisition of RWD was completed on April 15, 2011. In addition, as noted above, certain client projects were transferred from this segment to the Sandy segment at the beginning of 2012 which resulted in a $1.8 million revenue decrease in this segment. Excluding these items, there was a net increase in revenue of $1.4 million due to an increase in training services for various customers, partially offset by a decline in ERP implementation revenue due to project completions and a decrease in e-Learning content development services during 2012 compared to 2011.

Energy Services revenue increased $3.4 million or 15% during the year ended December 31, 2012 compared to 2011. The Rovsing acquisition which was completed on September 17, 2012 contributed approximately $1.3 million of revenue during 2012. The remainder of the revenue increase is due to a $1.7 million increase in EtaPro^TM software sales and related services, as well as increases workforce development training for energy customers during 2012 compared to 2011.

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Gross profit

	Years ended December 31,
	2012					2011
			% Revenue					% Revenue
	(Dollars in thousands)
Learning Solutions	$	31,355		19.4	%	$	22,325		17.1	%
Professional & Technical Services		13,194		15.0	%		14,279		16.7	%
Sandy Training & Marketing		10,954		15.6	%		8,116		14.9	%
Peformance Readiness Solutions		7,762		13.9	%		4,662		11.6	%
Energy Services		8,706		33.2	%		7,252		31.8	%
	$	71,971		17.9	%	$	56,634		17.0	%

Learning Solutions gross profit of $31.4 million or 19.4% of revenue for the year ended December 31, 2012 increased by $9.0 million or 40.4% when compared to gross profit of approximately $22.3 million or 17.1% of revenue for the year ended December 31, 2011. Approximately $2.3 million of the increase in gross profit is attributable to the acquisitions we completed in 2011 and 2012. In addition, $4.3 million of the increase in gross profit is attributable to the Europe operations in this segment primarily due to increased revenue and profitability on government funded skills training services in the UK which have higher margins than the other businesses in this segment. The remaining $2.4 million increase in gross profit is due to an increase in profitability in our U.S. e-Learning and BPO organizations due to the revenue growth discussed above.

Professional & Technical Services gross profit of $13.2 million or 15.0% of revenue for the year ended December 31, 2012 decreased by $1.1 million or 7.6% when compared to gross profit of approximately $14.3 million or 16.7% of revenue for the year ended December 31, 2011. Despite the net revenue increase in this segment, gross profit decreased primarily due to a decline in revenue and gross profit on a high margin lean consulting project and reduced profit margins on certain government projects during 2012 compared to 2011.

Sandy Training and Marketing gross profit of $11.0 million or 15.6% of revenue for the year ended December 31, 2012 increased by $2.8 million or 35.0% when compared to gross profit of $8.1 million or 14.9% for the year ended December 31, 2011. The increase in gross profit is primarily due to the revenue increases noted above.

Performance Readiness Solutions (formerly RWD) gross profit of $7.8 million or 13.9% of revenue for the year ended December 31, 2012 increased by $3.1 million or 66.5% when compared to gross profit of $4.7 million or 11.6% of revenue for the year ended December 31, 2011. Approximately $1.8 million of the increase in gross profit is attributable to there being a full year of results in 2012 compared to only 8.5 months of results in 2011. The remainder of the increase in gross profit is primarily due to overhead cost reductions made in early 2012.

Energy Services gross profit of $8.7 million or 33.2% of revenue for the year ended December 31, 2012 increased by $1.5 million or 20.0% when compared to gross profit of $7.3 million or 31.8% of revenue for the year ended December 31, 2011 primarily due to an increase in revenue and profitability on EtaPro^TM and GPiLearn^TM products and services.

Selling, general and administrative expenses

Selling, general and administrative expenses increased $5.3 million or 17.4% from $30.2 million for the year ended December 31, 2011 to $35.5 million for the year ended December 31, 2012. The increase is primarily due to the acquisitions we completed in 2011 and 2012 which resulted in a $2.4 million increase in labor and benefits expense, a $1.1 million increase in intangible asset amortization expense, a $1.2 million net increase in other various costs such as IT infrastructure, software, business insurance and depreciation, and a $0.6 million increase in G&A expenses related to our foreign subsidiaries during 2012 compared to 2011.

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Gain on change in fair value of contingent consideration, net

During the year ended December 31, 2012, we recognized a net loss of $0.8 million compared to a net gain of $0.5 million for the year ended December 31, 2011 on the change in fair value of contingent consideration related to acquisitions. Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC Topic 805”) requires that contingent consideration be recognized at fair value on the acquisition date and re-measured each reporting period with subsequent adjustments recognized in the consolidated statement of operations. We estimate the fair value of contingent consideration liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable; however, there is significant judgment involved. At each reporting date, the contingent consideration obligation will be revalued to estimated fair value and changes in fair value subsequent to the acquisitions will be reflected in operating income or expense in the consolidated statements of operations, and could cause a material impact to, and volatility in, our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. See Note 2 to the Consolidated Financial Statements for a detailed discussion of the acquisitions we have completed and the changes in fair value of contingent consideration during the year ended December 31, 2012.

Interest expense

Interest expense was $0.3 million and $0.2 million for the years ended December 31, 2012 and 2011, respectively.

Other income

Other income decreased $0.3 million from $0.7 million for the year ended December 31, 2011 to $0.4 million for the year ended December 31, 2012 primarily due to increased foreign currency losses during 2012 compared to 2011.

Income taxes

Income tax expense was $13.1 million for the year ended December 31, 2012 compared to $10.5 million for the year ended December 31, 2011. The increase in income tax expense is primarily due to an increase in income before income taxes in 2012 compared to 2011. Our effective income tax rate was 36.6% and 37.1% for the years ended December 31, 2012 and 2011, respectively. During the years ended December 31, 2012 and 2011, we recognized income tax benefits of $1.6 million and $0.9 million, respectively, on the reduction of uncertain tax position liabilities relating to prior tax deductions that are now outside the applicable statute of limitations. Excluding these income tax benefits, our effective income tax rate was 41.1% and 40.2% for the years ended December 31, 2012 and 2011, respectively. The increase in the effective income tax rate is due to losses in certain foreign jurisdictions for which we currently receive no income tax benefit. See Note 9 to the accompanying Consolidated Financial Statements for further information regarding income taxes.

As of December 31, 2012, we had approximately $17.7 million of accumulated undistributed earnings generated by our foreign subsidiaries. No provision has been made for income taxes that would be payable upon the distribution of such earnings since we intend to permanently reinvest these earnings. If these earnings were distributed in the form of dividends or otherwise, the distributions would be subject to U.S. federal income tax at the statutory rate of 35 percent, less foreign tax credits available to offset such distributions, if any. In addition, such distributions may be subject to withholding taxes in the various tax jurisdictions.

Year ended December 31, 2011 compared to the year ended December 31, 2010

For the year ended December 31, 2011, we had income before income taxes of $28.4 million compared to $20.9 million for the year ended December 31, 2010. The improved results are primarily due to an increase in operating income of $7.4 million, the components of which are discussed below. Included in operating income is a $1.0 million gain on the reversal of a deferred rent liability related to the execution of a new lease for our Troy, Michigan facility during the second quarter of 2011 which is discussed in more detail below. Also included in operating income is a $0.5 million net gain on the change in estimated fair value of contingent consideration during 2011 related to acquisitions completed, which is discussed further below and in Note 2 to the Consolidated Financial Statements. Net income was $17.9 million, or $0.94 per diluted share, for the year ended December 31, 2011 compared to $12.7 million, or $0.68 per diluted share, for 2010. Included in net income is a $0.9 million income tax benefit during the fourth quarter of 2011 on the reduction of an uncertain tax position relating to a period that is now outside the applicable statute of limitations.

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Diluted weighted average shares outstanding were 19.0 million for the year ended December 31, 2011 compared to 18.7 million for the same period in 2010. The increase in shares outstanding is primarily due to the issuance of shares for stock-based compensation and the effect of the increase in our stock price compared to the prior year on the results of the calculation of diluted weighted average shares outstanding.

Revenue

	Years ended December 31,
	2011		2010
	(Dollars in thousands)
Learning Solutions	$	130,392	$	118,922
Professional & Technical Services		85,285		70,893
Sandy Training & Marketing		54,604		47,153
Performance Readiness Solutions (formerly RWD)		40,079		—
Energy Services		22,807		22,958
	$	333,167	$	259,926

Learning Solutions revenue increased $11.5 million or 9.6% during the year ended December 31, 2011 compared to 2010. The increase in revenue is due to the following:

· A $14.3 million increase in revenue attributable to acquisitions completed in the United Kingdom, which includes $2.8 million for Bath Consulting acquired in November 2010 and $9.2 million of revenue attributable to the UK government funded vocational skills training providers we acquired in 2010 and 2011;

· A $1.4 million increase in U.S. dollar revenue recognized from our operations in the United Kingdom due to the change in currency exchange rates compared to 2010; and

· A $0.4 million net increase in revenue primarily due to an increase in volume with existing BPO customers, partially offset by a decrease in e-Learning revenue, during the year ended December 31, 2011 compared to 2010.

The above revenue increases were offset by a $4.6 million net decrease in revenue primarily due to a decline in e-Learning development and other training services in the UK.

Professional & Technical Services revenue increased $14.4 million or 20.3% during the year ended December 31, 2011 compared to 2010. The increase in revenue is due to the following:

· A $11.0 million increase in revenue attributable to acquisitions completed during 2011, which includes $9.4 million for the acquired RWD business units which are included in this segment and $1.6 million for the Communication Consulting acquisition in China;

· A $3.5 million net increase in revenue for technical training and lean consulting services primarily for manufacturing customers; and

· A $3.3 million increase in IT services for a pharmaceutical customer.

These revenue increases were offset by the following decreases:

· A $2.0 million net decrease relating to construction projects for liquefied natural gas (LNG) fueling station facilities due to the completion of projects in 2010; and

· A $1.4 million net decrease in revenue from technical services primarily for government clients.

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Sandy Training & Marketing revenue increased $7.5 million or 15.8% during the year ended December 31, 2011 compared to 2010. Approximately $2.8 million of the increase is attributable to the automotive business unit of RWD which is now included in this segment as a result of the acquisition on April 15, 2011. The remainder of the revenue increase is primarily attributable to increased vehicle training programs for existing automotive customers during the year ended December 31, 2011 compared to 2010.

Revenue attributable to the Performance Readiness Solutions (formerly RWD) segment totaled $40.1 million for the year ended December 31, 2011. As noted above, a portion of the business acquired on April 15, 2011 constitutes a separate reportable segment, and certain other business units of RWD are included in the Professional & Technical Services and Sandy segments. Revenue attributable to the RWD acquisition among all segments totaled $52.3 million from April 15, 2011 through December 31, 2011.

Energy Services revenue decreased slightly by $0.2 million or less than 1.0% during the year ended December 31, 2011 compared to 2010 primarily due to a $1.4 million decrease in technical training services, partially offset by a $1.2 million increase in EtaPro^TM software sales and related implementation services.

Gross profit

	Years ended December 31,
	2011					2010
			% Revenue					% Revenue
	(Dollars in thousands)
Learning Solutions	$	22,325		17.1	%	$	20,200		17.0	%
Professional & Technical Services		14,279		16.7	%		9,117		12.9	%
Sandy Training & Marketing		8,116		14.9	%		6,110		13.0	%
Performance Readiness Solutions		4,662		11.6	%		—		—
Energy Services		7,252		31.8	%		7,263		31.6	%
	$	56,634		17.0	%	$	42,690		16.4	%

Learning Solutions gross profit of $22.3 million or 17.1% of revenue for the year ended December 31, 2011 increased by $2.1 million or 10.5% when compared to gross profit of approximately $20.2 million or 17.0% of revenue for the year ended December 31, 2010. The increase in gross profit is primarily attributable to the acquisitions we completed in 2010 and 2011.

Professional & Technical Services gross profit of $14.3 million or 16.7% of revenue for the year ended December 31, 2011 increased by $5.2 million or 56.6% when compared to gross profit of approximately $9.1 million or 12.9% of revenue for the year ended December 31, 2010. Approximately $2.0 million of the increase in gross profit is attributable to the acquisitions completed in 2011. In addition, this segment experienced increases in gross profit and margin primarily due to the revenue increases discussed above, along with improved profit margins on certain fixed price projects during 2011 compared to 2010.

Sandy Training and Marketing gross profit of $8.1 million or 14.9% of revenue for the year ended December 31, 2011 increased by $2.0 million or 32.8% when compared to gross profit of $6.1 million or 13.0% for the year ended December 31, 2010. The increase in gross profit is primarily due to the revenue growth in this segment during the year ended December 31, 2011 compared to 2010. In addition, approximately $0.7 million of the increase in gross profit is attributable to the acquired RWD automotive business unit included in this segment, which has higher gross margins than the existing business units in this segment.

Gross profit attributable to the Performance Readiness Solutions (formerly RWD) segment totaled $4.7 million, or 11.6% of revenue, for the year ended December 31, 2011.

Energy Services gross profit of $7.3 million or 31.8% of revenue for the year ended December 31, 2011 was consistent at $7.3 million or 31.6% of revenue for the year ended December 31, 2010.

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Selling, general and administrative expenses

Selling, general and administrative expenses increased $6.8 million or 28.9% from $23.5 million for the year ended December 31, 2010 to $30.2 million for the year ended December 31, 2011. The increase is primarily due to the acquisitions we completed in 2010 and 2011, which resulted in a $2.3 million increase in labor and benefits expense, a $1.4 million increase in legal expenses and a $1.2 million increase in amortization expense, as well as increases in other various costs, such as IT infrastructure, software, accounting and depreciation, during the year ended December 31, 2011 compared to 2010.

Gain on reversal of deferred rent liability

In June 2011, we terminated a sublease and entered into a new lease directly with the owner of an office building in Troy, Michigan. Prior to entering into the new lease, we had a deferred rent liability on our balance sheet of $1.0 million, which represented the difference between the actual monthly rent owed to date and the rent expense recognized on a straight-line basis for the scheduled rent increases over the term of the original sublease. Upon entering into the new lease, we reversed the deferred rent liability associated with the terminated sublease. As a result, we recognized a net gain of $1.0 million in the consolidated statement of operations during the second quarter ended June 30, 2011.

Gain on change in fair value of contingent consideration, net

During the years ended December 31, 2011 and 2010, we recognized net gains of $0.5 million and $1.3 million, respectively, on the change in fair value of contingent consideration related to acquisitions. Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC Topic 805”) requires that contingent consideration be recognized at fair value on the acquisition date and re-measured each reporting period with subsequent adjustments recognized in the consolidated statement of operations. We estimate the fair value of contingent consideration liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable; however, there is significant judgment involved. At each reporting date, the contingent consideration obligation will be revalued to estimated fair value and changes in fair value subsequent to the acquisitions will be reflected in operating income or expense in the consolidated statements of operations, and could cause a material impact to, and volatility in, our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. See Note 2 to the Consolidated Financial Statements for a detailed discussion of the acquisitions we have completed and the changes in fair value of contingent consideration during the year ended December 31, 2011.

Interest expense

Interest expense was $0.2 million for each of the years ended December 31, 2011 and 2010.

Other income

Other income was $0.7 million and $0.6 million for the years ended December 31, 2011 and 2010, respectively, and consisted primarily of income from a joint venture, interest income and foreign currency gains and losses in both years.

Income taxes

Income tax expense was $10.5 million for the year ended December 31, 2011 compared to $8.1 million for the year ended December 31, 2010. The increase in income tax expense is primarily due to an increase in income before income taxes in 2011 compared to 2010. The effective income tax rate was 37.1% and 38.9% for the years ended December 31, 2011 and 2010, respectively. The decrease in the effective income tax rate is due to the following: (i) a $0.9 million income tax benefit related to the reduction of an uncertain tax position liability during the fourth quarter of 2011 relating to a period that is now outside the applicable statute of limitations, which resulted in a 3.1% decrease in the effective tax rate; and (ii) a decrease in foreign taxes due to a larger portion of our 2011 income being derived from foreign jurisdictions which are taxed at lower rates. These decreases in the effective income tax rate during 2011 were offset by the following items which resulted in a decrease in the effective rate in 2010 but did not recur in 2011: (i) the closure of our Malaysian operations during 2010 for which we recognized a loss on our investment for tax purposes and resulted in a 2.0% decrease in the effective tax rate in 2010; and (ii) the correction of an error in the deferred tax liabilities during 2010 which resulted in a 2.0% decrease in the effective tax rate for 2010. See Note 9 to the accompanying Consolidated Financial Statements for further information regarding income taxes.

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As of December 31, 2011, we had approximately $9.2 million of accumulated undistributed earnings generated by our foreign subsidiaries. No provision has been made for income taxes that would be payable upon the distribution of such earnings since we intend to permanently reinvest these earnings. If these earnings were distributed in the form of dividends or otherwise, the distributions would be subject to U.S. federal income tax at the statutory rate of 35 percent, less foreign tax credits available to offset such distributions, if any. In addition, such distributions may be subject to withholding taxes in the various tax jurisdictions.

Liquidity and Capital Resources

Working Capital

For the year ended December 31, 2012, our working capital increased $13.2 million from $36.0 million at December 31, 2011 to $49.1 million at December 31, 2012. The increase in working capital is primarily due to cash generated from operations during 2012. As of December 31, 2012, we had no long-term debt or short-term borrowings outstanding. We believe that cash generated from operations and borrowings available under our Credit Agreement ($50.0 million of available borrowings as of December 31, 2012) will be sufficient to fund our working capital and other requirements for at least the next twelve months.

As of December 31, 2012, the amount of cash and cash equivalents held outside of the U.S. by foreign subsidiaries was $4.8 million. At the present time, we do not anticipate repatriating these balances to fund domestic operations. We would be required to accrue for and pay taxes in the U.S. in the event we decided to repatriate these funds.

Acquisition-Related Payments

During the year ended December 31, 2012, we used $12.2 million of cash to complete acquisitions (net of cash acquired) and $1.9 million of cash for contingent consideration payments related to previously completed acquisitions. In addition to the upfront purchase prices paid for acquisitions, we may be required to pay the following additional contingent consideration in connection with acquisitions we previously completed (dollars in thousands):

							Recorded
							Liability as of
Acquisition:	2013		2014		Total		Dec. 31, 2012
Milsom	$	302	$	—	$	302	$	302
Marton House		1,293		—		1,293		774
Bath Consulting		724		1,099		1,823		1,464
Communication Consulting		300		—		300		—
Asentus		2,100		1,600		3,700		544
Total	$	4,719	$	2,699	$	7,418	$	3,084

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Significant Customers & Concentration of Credit Risk

We have a market concentration of revenue in the automotive sector. Revenue from the automotive industry accounted for approximately 17%, 17% and 18% of our consolidated revenue for the years ended December 31, 2012, 2011 and 2010, respectively. We also have a concentration of revenue from the United States government. For the years ended December 31, 2012, 2011 and 2010, sales to the United States government and its agencies represented approximately 12%, 14% and 22%, respectively, of our consolidated revenue. Revenue was derived from many separate contracts with a variety of government agencies that are regarded by us as separate customers. No single customer accounted for more than 10% of our consolidated revenue in 2012. Accounts receivable from a single automotive customer totaled $9.0 million as of December 31, 2012 and $6.3 million as of December 31, 2011, accounting for approximately 11% and 9% of our total accounts receivable as of those dates, respectively.

Share Repurchase Program

We have a share repurchase program under which we may repurchase shares of our common stock from time to time in the open market, subject to prevailing business and market conditions and other factors. Repurchases are made at management’s discretion in accordance with applicable federal securities law. The amount and timing of share repurchases depend on a variety of factors, including market conditions and prevailing stock prices. The share repurchase authorization does not obligate us to acquire any specific number of shares in any period, and may be modified, suspended or discontinued at any time at the discretion of our Board of Directors. During the years ended December 31, 2012, 2011 and 2010, we repurchased approximately 180,000, 125,000 and 37,000 shares, respectively, of our common stock in the open market for a total cost of approximately $3.4 million, $1.4 million and $0.3 million, respectively. As of December 31, 2012, there was approximately $1.1 million available for future repurchases under the current buyback program. There is no expiration date for the repurchase program.

Cash Flows

Year ended December 31, 2012 compared to the year ended December 31, 2011

Our cash balance increased $3.6 million from $4.2 million as of December 31, 2011 to $7.8 million as of December 31, 2012. The increase in cash and cash equivalents during the year ended December 31, 2012 resulted from cash provided by operating activities of $25.3 million, cash used in investing activities of $14.7 million, cash used in financing activities of $7.1 million and a $0.2 million positive effect due to exchange rate changes on cash and cash equivalents.

Cash provided by operating activities was $25.3 million for the year ended December 31, 2012 compared to $16.2 million in 2012. The increase in cash provided by operating activities is primarily due to an increase in net income and non-cash add-backs to net income during 2012 compared to 2011.

Cash used in investing activities was $14.7 million for the year ended December 31, 2012 compared to $40.2 million in 2011. The decrease in cash used in investing activities is primarily due to less cash used to complete acquisitions in 2012 compared to 2011 ($12.2 million of cash used for acquisitions, net of cash acquired, during 2012 compared to $36.1 million of cash used for acquisitions during 2011). Cash used for fixed asset additions also decreased by $1.4 million from $4.0 million for the year ended December 31, 2011 to $2.5 million for the year ended December 31, 2012.

Cash used in financing activities was $7.1 million for the year ended December 31, 2012 compared to $0.6 million in 2011. The increase in cash used in financing activities is primarily due to a $2.4 million increase in tax withholding payments during 2012 on behalf of employees for stock-based compensation income in exchange for shares surrendered, a $2.0 million increase in cash used for share repurchases, and a $1.9 million decrease in negative cash book balances during 2012. These decreases in cash were offset by a $1.9 million increase in income tax benefits on stock-based compensation for employee compensation realized on the exercise of stock options and the vesting of restricted stock units during 2012 compared to 2011.

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Year ended December 31, 2011 compared to the year ended December 31, 2010

Our cash balance decreased $24.8 million from $28.9 million as of December 31, 2010 to $4.2 million as of December 31, 2011. The decrease in cash and cash equivalents during the year ended December 31, 2011 resulted from cash provided by operating activities of $16.2 million, cash used in investing activities of $40.2 million, cash used in financing activities of $0.6 million and a $0.1 million negative effect due to exchange rate changes on cash and cash equivalents.

Cash provided by operating activities was $16.2 million for the year ended December 31, 2011 compared to $26.2 million in 2010. The decrease in cash provided by operating activities compared to the prior year is primarily due to unfavorable changes in working capital balances, largely due to an increase in accounts receivables and other current assets attributable to the acquired RWD business. In addition, net cash provided by operating activities includes payments totaling $0.7 million during the year ended December 31, 2011 for the portion of contingent consideration in excess of the estimated fair value as of the acquisition date.

Cash used in investing activities was $40.2 million for the year ended December 31, 2011 compared to $6.7 million in 2010. The increase in cash used in investing activities is primarily due to an increase in cash used for acquisitions, largely due to the use of $25.7 million of cash for the RWD acquisition, $8.4 million of cash used to complete three acquisitions in the UK and $1.5 million of cash used to complete an acquisition in China during 2011. Fixed asset additions increased approximately $2.4 million during the year ended December 31, 2011 compared to 2010 primarily due to increased equipment and IT related purchases as a result of the acquisitions we completed during 2011, as well as equipment and vehicle purchases related to our alternative fuels business.

Cash used in financing activities was $0.6 million for the year ended December 31, 2011 compared to $1.4 million in 2010. The decrease in cash used in financing activities is primarily due to an increase in our negative cash book balance of $1.9 million during 2011 (the negative cash book balance results from outstanding checks which had not cleared the bank at the end of the period in excess of amounts on deposit and are classified as accounts payable in the consolidated balance sheets and presented as a financing activity in the consolidated statements of cash flows). This decrease in cash used was offset by an increase of $1.1 million of cash used for share repurchases in 2011 compared to 2010, and a $0.5 million increase in contingent consideration payments classified as financing activities (the portion of the payment of liability-classified contingent consideration arrangement that is included as part of the initial fair value measurement is classified as a financing activity in the statement of cash flows).

Short-term Borrowings

We have a $50 million Financing and Security Agreement (the “Credit Agreement”) with a bank that expires on October 31, 2014 and is secured by certain of our assets. The Credit Agreement contains a provision to increase the maximum principal amount to $75 million upon lender approval. The maximum interest rate on the Credit Agreement is the daily LIBOR market index rate plus 2.25%. Based upon our financial performance, the interest rate can be reduced. The Credit Agreement contains covenants which require us to maintain a minimum tangible net worth of no less than $30.0 million, a total liabilities to tangible net worth ratio of no more than 3.0 to 1.0, and a cash flow to debt service ratio of no less than 3.0 to 1.0. As of December 31, 2012, our tangible net worth was $48.6 million, our total liabilities to tangible net worth ratio was 1.58 to 1.0 and our cash flow to debt service ratio was 100.0 to 1.0, all of which were in compliance with the Credit Agreement. As of December 31, 2012, there were no borrowings outstanding and $50.0 million of available borrowings under the Credit Agreement.

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Contractual Payment Obligations

We enter into various agreements that result in contractual obligations in connection with our business activities. These obligations primarily relate to operating leases and purchase commitments under non-cancelable contracts for certain products and services. The following table summarizes our total contractual payment obligations as of December 31, 2012 (in thousands):

	Payments due in
			2014–		2016–		After
	2013		2015		2017		2018		Total
Facility lease commitments	$	5,722	$	7,077	$	5,056	$	1,792	$	19,647
Other operating lease commitments		1,056		812		22		—		1,890
Purchase commitments *		2,751		1,499		—		—		4,250
Total	$	9,529	$	9,388	$	5,078	$	1,792	$	25,787

* Excludes purchase orders for goods and services entered into by us in the ordinary course of business, which are non-binding and subject to amendment or termination within a reasonable notification period.

The table above excludes contingent consideration in connection with acquisitions which may be payable to the sellers if the revenue and/or earnings targets set forth in the purchase agreements are achieved (see Note 2 to the Consolidated Financial Statements).

Off-Balance Sheet Commitments

As of December 31, 2012, we had three outstanding letters of credit totaling $0.2 million, two of which expire in 2013 and one which expires in 2018. In addition, we have two outstanding performance bonds totaling $3.2 million relating to construction contracts scheduled to be completed in 2013. We do not have any off-balance sheet financing except for operating leases and letters of credit entered into in the normal course of business.

Management Discussion of Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates.

Certain of our accounting policies require higher degrees of judgment than others in their application. These include revenue recognition, valuation of accounts receivable, stock-based compensation, impairment of intangible assets, including goodwill, valuation of contingent consideration for business acquisitions, and income taxes, which are summarized below. In addition, Note 1 to the accompanying Consolidated Financial Statements includes further discussion of our significant accounting policies.

Revenue Recognition

We provide services under time-and-materials, cost-reimbursable, fixed price and fixed-fee per transaction contracts to both government and commercial customers. Each contract has different terms based on the scope, deliverables and complexity of the engagement, requiring us to make judgments and estimates about recognizing revenue. Revenue is recognized as services are performed.

Under time-and-materials contracts, as well as certain government cost-reimbursable and certain fixed price contracts, the contractual billing schedules are based on the specified level of resources we are obligated to provide. As a result, for these “level-of-effort” contracts, the contractual billing amount for the period is a measure of performance and, therefore, revenue is recognized in that amount.

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Revenue under government fixed price contracts is recognized using the percentage-of-completion method. Under the percentage-of-completion method, management estimates the percentage-of-completion based upon costs incurred as a percentage of the total estimated costs.

For commercial fixed price contracts which typically involve a discrete project, such as development of training content and materials, design of training processes, software implementation, or engineering projects, the contractual billing schedules are not based on the specified level of resources we are obligated to provide. These discrete projects generally do not contain milestones or other reliable measures of performance. As a result, revenue on these arrangements is recognized using a percentage-of-completion method based on the relationship of costs incurred to total estimated costs expected to be incurred over the term of the contract. We believe this methodology is a reasonable measure of proportional performance since performance primarily involves personnel costs and services provided to the customer throughout the course of the projects through regular communications of progress toward completion and other project deliverables. In addition, the customer typically is required to pay us for the proportionate amount of work and cost incurred in the event of contract termination.

When total cost estimates exceed revenues, the estimated losses are recognized immediately. The use of the percentage-of-completion method requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the project, the nature and complexity of the work to be performed, and anticipated changes in estimated salaries and other costs. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. When revisions in estimated contract revenues and costs are determined, such adjustments are recorded in the period in which they are first identified.

For certain commercial fixed-fee per transaction contracts, such as providing training courses, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts.

For certain fixed-fee per transaction and fixed price contracts in which the output of the arrangement is measurable, such as for the shipping of publications and print materials, revenue is recognized when the deliverable is met and the product is delivered based on the output method of performance. The customer is required to pay for the cost incurred in the event of contract termination.

Certain of our fixed price commercial contracts contain revenue arrangements with multiple deliverables. Revenue arrangements with multiple deliverables are evaluated to determine if the deliverables can be divided into more than one unit of accounting. For contracts determined to have more than one unit of accounting, we recognize revenue for each deliverable based on the revenue recognition policies discussed above; that is, we recognize revenue in accordance with work performed and costs incurred, with the fee being allocated proportionately over the service period. Within each multiple deliverable project, there is objective and reliable fair value across all units of the arrangement, as discounts are not offered or applied to one deliverable versus another, and the rates bid across all deliverables are consistent.

As part of our on-going operations to provide services to our customers, incidental expenses, which are commonly referred to as “out-of-pocket” expenses, are billed to customers, either directly as a pass-through cost or indirectly as a cost estimated in proposing on fixed price contracts. Out-of-pocket expenses include expenses such as airfare, mileage, hotel stays, out-of-town meals and telecommunication charges. Our policy provides for these expenses to be recorded as both revenue and direct cost of services.

In connection with our delivery of products, primarily for publications delivered by our Sandy segment, we incur shipping and handling costs which are billed to customers directly as a pass-through cost. Our policy provides for these expenses to be recorded as both revenue and direct cost of revenue.

Valuation of Accounts Receivable

Trade accounts receivable are recorded at invoiced amounts. We evaluate the collectability of trade accounts receivable based on a combination of factors. When aware that a specific customer may be unable to meet its financial obligations to us, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position, we evaluate the need to record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for all other customers based on a variety of factors, including the length of time the receivables are past due, historical collection experience and trends of past due accounts, write-offs and specific identification and review of past due accounts. Actual collections of trade receivables could differ from management’s estimates due to changes in future economic or industry conditions or specific customers’ financial conditions. The allowance for doubtful accounts was $1.8 million at December 31, 2012.

41

Stock-Based Compensation

Pursuant to our stock-based incentive plans, we grant stock options, restricted stock, stock units, and equity to officers, employees, and members of the Board of Directors. We compute compensation expense for all equity-based compensation awards issued to employees using the fair-value measurement method. Determining the appropriate fair value of stock options requires judgment, including estimating stock price volatility and expected life of the award. In addition, determining appropriate forfeiture rates requires judgment, including estimating the number of stock-based compensation awards that are expected to vest.

We recognize compensation expense on a straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We apply a forfeiture estimate to compensation expense recognized for awards that are expected to vest during the requisite service period, and revise that estimate if subsequent information indicates that the actual forfeitures will differ from the estimate. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We do not capitalize any portion of our stock-based compensation. We estimate the fair value of our stock options on the date of grant using the Black-Scholes option pricing model, which requires various assumptions such as expected term, expected stock price volatility and risk-free interest rate. We estimate the expected term of stock options granted taking into consideration historical data related to stock option exercises. We use historical stock price data in order to estimate the expected volatility factor of stock options granted. The risk-free interest rate for the periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Impairment of Intangible Assets, Including Goodwill

We review goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We test goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. Our reporting units are: (i) Learning Solutions, (ii) Europe, (iii) Professional & Technical Services, (iv) Sandy, (v) Performance Readiness Solutions (formerly RWD), and (vi) Energy Services. Our Learning Solutions and Europe reporting units comprise our Learning Solutions reportable segment and all of the other reporting units each represent separate reportable segments.

Our goodwill balances as of December 31, 2012 for each reporting unit were as follows (in thousands):

Reporting Unit
Learning Solutions	$	35,703
Europe		18,496
Professional & Technical Services		29,652
Sandy		653
Performance Readiness Solutions		9,795
Energy Services		8,522
	$	102,821

During the year ended December 31, 2012, we adopted Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount. 

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If it is determined as a result of the qualitative assessment permitted by ASU 2011-08, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step impairment test is required. In the first step, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit’s assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value allocated to goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference.

Under the two-step impairment test, we determine the fair value of our reporting units using both an income approach and a market approach, and weigh both approaches to determine the fair value of each reporting unit. Under the income approach, we perform a discounted cash flow analysis which incorporates management’s cash flow projections over a five-year period and a terminal value is calculated by applying a capitalization rate to terminal year projections based on an estimated long-term growth rate. The five-year projected cash flows and calculated terminal value are discounted using a weighted average cost of capital (“WACC”) which takes into account the costs of debt and equity. The cost of equity is based on the risk-free interest rate, equity risk premium, industry and size equity premiums and any additional market equity risk premiums as deemed appropriate for each reporting unit. To arrive at a fair value for each reporting unit, the terminal value is discounted by the WACC and added to the present value of the estimated cash flows over the discrete five-year period. There are a number of other variables which impact the projected cash flows, such as expected revenue growth and profitability levels, working capital requirements, capital expenditures and related depreciation and amortization. Under the market approach, we perform a comparable public company analysis and apply revenue and earnings multiples from the identified set of companies to the reporting unit’s actual and forecasted financial performance to determine the fair value of each reporting unit. We evaluate the reasonableness of the fair value calculations of our reporting units by reconciling the total of the fair values of all of our reporting units to our total market capitalization, and adjusting for an appropriate control premium.   In addition, we make certain judgments in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

For our annual goodwill impairment test as of December 31, 2012, we performed a qualitative assessment as permitted by ASU 2011-08 for all of our reporting units and determined that it was more likely than not that the fair values of each of our reporting units exceeded their respective carrying values. For our annual goodwill impairment tests as of December 31, 2011 and 2010, we performed step one of the two-step impairment test and determined that the estimated fair value of each of our reporting units exceeded their respective carrying values, indicating the underlying goodwill of each unit was not impaired. Each of our reporting units had a substantial excess of fair value over their respective carrying values as of December 31, 2011 and 2010.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present.

43

Valuation of Contingent Consideration for Business Acquisitions

Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. We believe our estimates and assumptions are reasonable; however, there is significant judgment involved. At each reporting date, the contingent consideration obligation are revalued to estimated fair value and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Income Taxes

We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, assessing tax rates that we expect to apply and determining the years when the temporary differences are expected to affect taxable income requires judgment about the future apportionment of our income among the states in which we operate.

The measurement of deferred taxes often involves an exercise of judgment related to the computation and realization of tax basis. Our deferred tax assets and liabilities reflect our assessment that tax positions taken, and the resulting tax basis, are more likely than not to be sustained if they are audited by taxing authorities. We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. A number of years may elapse before a particular matter, for which we have or have not established an accrual, is audited and finally resolved. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to our income tax expense in the period of a change in facts and circumstances.

In assessing the realizability of our deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets may not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future income during the periods in which temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon these factors, we believe it is more likely than not that we will realize the benefits of our deferred tax assets, net of the valuation allowance. The valuation allowance relates to both foreign and domestic net operating loss carryforwards for which we do not believe the benefits may be realized.

The above matters, and others, involve the exercise of significant judgment. Any changes in our practices or judgments involved in the measurement of deferred tax assets and liabilities could materially impact our financial condition or results of operations.

Accounting Standards Issued and Adopted

We discuss recently issued and adopted accounting standards in Note 1 to the accompanying Consolidated Financial Statements.

44

Item 7A: Quantitative and Qualitative Disclosures about Market Risk

We are exposed to the impact of interest rate, market risks and currency fluctuations. In the normal course of business, we employ internal processes to manage our exposure to interest rate, market risks and currency fluctuations. Our objective in managing our interest rate risk is to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs.

We are exposed to the impact of currency fluctuations because of our international operations. We have not been a party to any exchange rate hedging programs to mitigate the effect of exchange rate fluctuations. Our investment in our foreign subsidiaries and fluctuations in foreign currency have not historically had a material impact on our financial position.

Our revenues and profitability are related to general levels of economic activity and employment, principally in the United States and the United Kingdom. As a result, any significant economic downturn or recession in one or both of those countries could harm our business and financial condition. A significant portion of our revenues is derived from Fortune 500 level companies and their non-U.S. equivalents, which historically have adjusted expenditures for training and other services during economic downturns. If the economies in which these companies operate are weakened in any future period, these companies may reduce their expenditures on training and other services, which could adversely affect our business and financial condition.

45

Item 8: Financial Statements and Supplementary Data

	Page
Financial Statements of GP Strategies Corporation and Subsidiaries:
Reports of Independent Registered Public Accounting Firm	47
Consolidated Balance Sheets – December 31, 2012 and 2011	49
Consolidated Statements of Operations – Years ended December 31, 2012, 2011 and 2010	50
Consolidated Statements of Comprehensive Income – Years ended December 31, 2012, 2011 and 2010	51
Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2012, 2011 and 2010	52
Consolidated Statements of Cash Flows – Years ended December 31, 2012, 2011 and 2010	53
Notes to Consolidated Financial Statements	55

46

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
GP Strategies Corporation:

We have audited the accompanying consolidated balance sheets of GP Strategies Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of GP Strategies Corporation and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), GP Strategies Corporation internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 26, 2013 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Baltimore, Maryland

February 26, 2013

47

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
GP Strategies Corporation:

We have audited GP Strategies Corporation’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). GP Strategies Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting (Item 9A(b)). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, GP Strategies Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of GP Strategies Corporation and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated February 26, 2013, expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Baltimore, Maryland

February 26, 2013

48

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2012 and 2011

(In thousands, except shares and par value per share)

	2012			2011
Assets
Current assets:
Cash and cash equivalents	$	7,761		$	4,151
Accounts and other receivables, less allowance for doubtful accounts of $1,756 in 2012 and $1,015 in 2011		83,597			67,134
Costs and estimated earnings in excess of billings on uncompleted contracts		16,979			15,576
Deferred tax assets		2,031			2,670
Prepaid expenses and other current assets		8,112			6,193
Total current assets		118,480			95,724
Property, plant and equipment, net		5,511			5,562
Goodwill		102,821			93,338
Intangible assets, net		15,872			15,122
Other assets, net		1,750			1,830
	$	244,434		$	211,576
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	47,457		$	42,500
Billings in excess of costs and estimated earnings on uncompleted contracts		21,877			17,266
Total current liabilities		69,334			59,766
Deferred tax liabilities		6,874			5,323
Other noncurrent liabilities		889			3,093
Total liabilities		77,097			68,182
Stockholders’ equity:
Preferred stock, par value $0.01 per share; Authorized 10,000,000 shares; no shares issued		—			—
Common stock, par value $0.01 per share; Authorized 35,000,000 shares; issued 19,175,006 shares in 2012 and 18,822,139 shares in 2011		192			188
Additional paid-in capital		167,495			165,519
Retained earnings (accumulated deficit)		3,955			(18,733	)
Treasury stock, at cost (125,334 shares in 2012 and 26,639 shares in 2011)		(2,494	)		(358	)
Accumulated other comprehensive loss		(1,811	)		(3,222	)
Total stockholders’ equity		167,337			143,394
	$	244,434		$	211,576

See accompanying notes to consolidated financial statements.

49

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

Years ended December 31, 2012, 2011 and 2010

(In thousands, except per share data)

	2012			2011		2010
Revenue	$	401,572		$	333,167	$	259,926
Cost of revenue		329,601			276,533		217,236
Gross profit		71,971			56,634		42,690
Selling, general and administrative expenses		35,500			30,249		23,466
Gain on reversal of deferred rent liability		—			1,041		—
Gain (loss) on change in fair value of contingent consideration, net		(789	)		517		1,313
Operating income		35,682			27,943		20,537
Interest expense		269			209		236
Other income (including interest income of $29 in 2012, $57 in 2011 and $105 in 2010)		389			657		551
Income before income taxes		35,802			28,391		20,852
Income tax expense		13,114			10,531		8,120
Net income	$	22,688		$	17,860	$	12,732
Basic weighted average shares outstanding		18,956			18,766		18,621
Diluted weighted average shares outstanding		19,275			19,010		18,729
Per common share data:
Basic earnings per share	$	1.20		$	0.95	$	0.68
Diluted earnings per share	$	1.18		$	0.94	$	0.68

See accompanying notes to consolidated financial statements.

50

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

Years ended December 31, 2012, 2011 and 2010

(In thousands)

	2012		2011			2010
Net income	$	22,688	$	17,860		$	12,732
Foreign currency translation adjustments		1,411		(995	)		(281	)
Comprehensive income	$	24,099	$	16,865		$	12,451

See accompanying notes to consolidated financial statements.

51

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

Years ended December 31, 2012, 2011 and 2010

(In thousands, except for par value per share)

						Retained						Accumulated
	Common					earnings						other			Total
	stock		Additional			(accumulated			Treasury			comprehensive			stockholders’
	($0.01 par)		paid-in capital			deficit)			stock at cost			loss			equity
Balance at December 31, 2009	$	186	$	161,975		$	(49,325	)	$	—		$	(1,946	)	$	110,890
Net income		—		—			12,732			—			—			12,732
Foreign currency translation adjustments		—		—			—			—			(281	)		(281	)
Repurchases of common stock in the open market		—		—			—			(266	)		—			(266	)
Stock-based compensation expense		—		1,657			—			—			—			1,657
Net issuances of stock pursuant to stock compensation and benefit plans and other		1		(210	)		—			264			—			55
Balance at December 31, 2010	$	187	$	163,422		$	(36,593	)	$	(2	)	$	(2,227	)	$	124,787
Net income		—		—			17,860			—			—			17,860
Foreign currency translation adjustments		—		—			—			—			(995	)		(995	)
Repurchases of common stock in the open market		—		—			—			(1,414	)		—			(1,414	)
Stock-based compensation expense		—		1,899			—			—			—			1,899
Issuance of stock for employer contributions to retirement plan		—		631			—			477			—			1,108
Net issuances of stock pursuant to stock compensation plans and other		1		(433	)		—			581			—			149
Balance at December 31, 2011	$	188	$	165,519		$	(18,733	)	$	(358	)	$	(3,222	)	$	143,394
Net income		—		—			22,688			—			—			22,688
Foreign currency translation adjustments		—		—			—			—			1,411			1,411
Repurchases of common stock in the open market		—		—			—			(3,433	)		—			(3,433	)
Stock-based compensation expense		—		1,780			—			—			—			1,780
Income tax benefit from stock-based compensation		—		2,034			—			—			—			2,034
Shares withheld in exchange for tax withholding payments on stock-based compensation		—		(2,750	)		—			—			—			(2,750	)
Issuance of stock for employer contributions to retirement plan		—		538			—			1,297			—			1,835
Net issuances of stock pursuant to stock compensation plans and other		4		374			—			—			—			378
Balance at December 31, 2012	$	192	$	167,495		$	3,955		$	(2,494	)	$	(1,811	)	$	167,337

See accompanying notes to consolidated financial statements.

52

GP STRATEGIES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2012, 2011 and 2010

(In thousands)

	2012			2011			2010
Cash flows from operating activities:
Net income	$	22,688		$	17,860		$	12,732
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on reversal of deferred rent liability		—			(1,041	)		—
Income tax benefit on reduction of uncertain tax position liabilities		(1,602	)		(891	)		—
Loss (gain) on change in fair value of contingent consideration, net		789			(517	)		(1,313	)
Depreciation and amortization		7,971			6,187			4,230
Non-cash compensation expense		3,615			3,100			2,012
Deferred income taxes		716			147			935
Changes in other operating items, net of acquired amounts:
Accounts and other receivables		(11,262	)		(4,955	)		(13	)
Costs and estimated earnings in excess of billings on uncompleted contracts		(1,256	)		(701	)		(1,771	)
Prepaid expenses and other current assets		(1,227	)		(1,599	)		1,754
Accounts payable and accrued expenses		4,003			(216	)		5,403
Billings in excess of costs and estimated earnings on uncompleted contracts		3,218			168			2,084
Income tax benefit of stock-based compensation		(2,034	)		(131	)		(129	)
Contingent consideration payments in excess of fair value on acquisition date		(602	)		(721	)		—
Other		295			(491	)		266
Net cash provided by operating activities		25,312			16,199			26,190
Cash flows from investing activities:
Additions to property, plant and equipment		(2,536	)		(3,975	)		(1,531	)
Acquisitions, net of cash acquired		(12,184	)		(36,077	)		(5,121	)
Other investing activities		—			(157	)		—
Net cash used in investing activities		(14,720	)		(40,209	)		(6,652	)
Cash flows from financing activities:
Contingent consideration payments		(1,263	)		(1,238	)		(775	)
Change in negative cash book balance		(1,888	)		1,883			5
Repurchases of common stock in the open market		(3,433	)		(1,414	)		(266	)
Income tax benefit from stock-based compensation		2,034			131			129
Tax withholding payments for employee stock-based compensation in exchange for shares surrendered		(2,750	)		(337	)		(361	)
Proceeds from issuance of common stock		284			355			39
Other financing activities		(126	)		(8	)		(141	)
Net cash used in financing activities		(7,142	)		(628	)		(1,370	)

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2012, 2011 and 2010

(In thousands) 

	2012		2011			2010
Effect of exchange rate changes on cash and cash equivalents		160		(113	)		(69	)
Net change in cash and cash equivalents		3,610		(24,751	)		18,099
Cash and cash equivalents at beginning of year		4,151		28,902			10,803
Cash and cash equivalents at end of year	$	7,761	$	4,151		$	28,902
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	104	$	100		$	36
Income taxes	$	12,532	$	10,078		$	5,570

See accompanying notes to consolidated financial statements.

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

(1) Description of Business and Significant Accounting Policies

Business

GP Strategies Corporation is a global performance improvement solutions provider of training, e-Learning solutions, management consulting and engineering services. References in this report to “GP Strategies,” the “Company,” “we” and “our” are to GP Strategies Corporation and its subsidiaries, collectively.

FASB Codification

We follow generally accepted accounting principles (“GAAP”) set by the Financial Accounting Standards Board (“FASB”). References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification,^™ sometimes referred to as ASC.

Basis of Consolidation

The consolidated financial statements include the operations of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Significant Customers & Concentration of Credit Risk

We have a market concentration of revenue in the automotive sector. Revenue from the automotive industry accounted for approximately 17%, 17% and 18% of our consolidated revenue for the years ended December 31, 2012, 2011 and 2010, respectively. We also have a concentration of revenue from the United States government. For the years ended December 31, 2012, 2011 and 2010, sales to the United States government and its agencies represented approximately 12%, 14% and 22%, respectively, of our consolidated revenue. Revenue was derived from many separate contracts with a variety of government agencies that are regarded by us as separate customers. No single customer accounted for more than 10% of our consolidated revenue in 2012. Accounts receivable from a single automotive customer totaled $8,986,000 as of December 31, 2012 and $6,329,000 as of December 31, 2011, accounting for approximately 11% and 9% of our total accounts receivable as of those dates, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term highly liquid investments with original maturities of three months or less. Outstanding checks which have been issued but not presented to the banks for payment in excess of amounts on deposit may create negative book cash balances. We transfer cash on an as-needed basis to fund these items as they clear the bank in subsequent periods. Such negative cash balances are included in accounts payable and accrued expenses and totaled $0 and $1,888,000 as of December 31, 2012 and 2011, respectively. Changes in negative book cash balances from period to period are reported as a financing activity in the consolidated statement of cash flows.

Allowance for Doubtful Accounts Receivable

Trade accounts receivable are recorded at invoiced amounts. We evaluate the collectability of trade accounts receivable based on a combination of factors. When aware that a specific customer may be unable to meet its financial obligations to us, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position, we evaluate the need to record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for all other customers based on a variety of factors, including the length of time the receivables are past due, historical collection experience and trends of past due accounts, write-offs and specific identification and review of past due accounts. Actual collections of trade receivables could differ from management’s estimates due to changes in future economic or industry conditions or specific customers’ financial conditions.

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

Activity in our allowance for doubtful accounts was comprised of the following for the periods indicated:

	Year ended December 31,
	2012			2011			2010
	(In thousands)
Beginning balance	$	1,015		$	701		$	566
Additions		782			601			139
Deductions		(41	)		(287	)		(4	)
Ending balance	$	1,756		$	1,015		$	701

Foreign Currency Translation

The functional currency of our international operations is the respective local currency. The translation of the foreign currency into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted average exchange rates prevailing during the year. The unrealized gains and losses resulting from such translation are included as a component of comprehensive income.

Revenue Recognition

We provide services under time-and-materials, cost-reimbursable, and fixed price (including fixed-fee per transaction) contracts to both government and commercial customers. Each contract has different terms based on the scope, deliverables and complexity of the engagement, requiring us to make judgments and estimates about recognizing revenue. Revenue is recognized as services are performed.

Under time-and-materials contracts, as well as certain government cost-reimbursable and certain fixed price contracts, the contractual billing schedules are based on the specified level of resources we are obligated to provide. As a result, for these “level-of-effort” contracts, the contractual billing amount for the period is a measure of performance and, therefore, revenue is recognized in that amount.

Revenue under government fixed price contracts is recognized using the percentage-of-completion method. Under the percentage-of-completion method, management estimates the percentage-of-completion based upon costs incurred as a percentage of the total estimated costs.

For commercial fixed price contracts which typically involve a discrete project, such as development of training content and materials, design of training processes, software implementation, or engineering projects, the contractual billing schedules are not based on the specified level of resources we are obligated to provide. These discrete projects generally do not contain milestones or other reliable measures of performance. As a result, revenue on these arrangements is recognized using a percentage-of-completion method based on the relationship of costs incurred to total estimated costs expected to be incurred over the term of the contract. We believe this methodology is a reasonable measure of proportional performance since performance primarily involves personnel costs and services provided to the customer throughout the course of the projects through regular communications of progress toward completion and other project deliverables. In addition, the customer typically is required to pay us for the proportionate amount of work and cost incurred in the event of contract termination.

When total cost estimates exceed revenues, the estimated losses are recognized immediately. The use of the percentage-of-completion method requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the project, the nature and complexity of the work to be performed, and anticipated changes in estimated salaries and other costs. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. When revisions in estimated contract revenues and costs are determined, such adjustments are recorded in the period in which they are first identified.

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Notes to Consolidated Financial Statements

For certain commercial fixed-fee per transaction contracts, such as providing training courses, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts.

For certain fixed-fee per transaction and fixed price contracts in which the output of the arrangement is measurable, such as for the shipping of publications and print materials, revenue is recognized when the deliverable is met and the product is delivered based on the output method of performance. The customer is required to pay for the cost incurred in the event of contract termination.

Certain of our fixed price commercial contracts contain revenue arrangements with multiple deliverables. Revenue arrangements with multiple deliverables are evaluated to determine if the deliverables can be divided into more than one unit of accounting. For contracts determined to have more than one unit of accounting, we recognize revenue for each deliverable based on the revenue recognition policies discussed above; that is, we recognize revenue in accordance with work performed and costs incurred, with the fee being allocated proportionately over the service period. Within each multiple deliverable project, there is objective and reliable fair value across all units of the arrangement, as discounts are not offered or applied to one deliverable versus another, and the rates bid across all deliverables are consistent.

As part of our on-going operations to provide services to our customers, incidental expenses, which are commonly referred to as “out-of-pocket” expenses, are billed to customers, either directly as a pass-through cost or indirectly as a cost estimated in proposing on fixed price contracts. Out-of-pocket expenses include expenses such as airfare, mileage, hotel stays, out-of-town meals and telecommunication charges. Our policy provides for these expenses to be recorded as both revenue and direct cost of services.

In connection with the delivery of products, primarily for publications delivered by our Sandy Training & Marketing segment, we incur shipping and handling costs which are billed to customers directly as a pass-through cost. Our policy provides for these expenses to be recorded as both revenue and direct cost of revenue.

Contract Related Assets and Liabilities

Costs and estimated earnings in excess of billings on uncompleted contracts in the accompanying consolidated balance sheets represent unbilled amounts earned and reimbursable under contracts in progress. These amounts become billable according to the contract terms, which usually consider the passage of time, achievement of milestones or completion of the project. Generally, such unbilled amounts will be billed and collected over the next twelve months.

Billings in excess of costs and estimated earnings on uncompleted contracts in the accompanying consolidated balance sheets represent advanced billings to clients on contracts in advance of work performed. Generally, such amounts will be earned and recognized in revenue over the next twelve months.

Comprehensive Income

Comprehensive income consists of net income and foreign currency translation adjustments.

Inventories

Inventories are stated at lower of cost or market. Provision is made to reduce excess and obsolete inventories to their estimated net realizable value.  In assessing the realization of inventories, we make judgments regarding future demand requirements and compare these estimates with current and committed inventory levels.  Inventory requirements may change based on projected customer demand, training curriculum life-cycle changes, longer-or shorter-than-expected usage periods, and other factors that could affect the valuation of our inventories.

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

Property, Plant and Equipment

Property, plant and equipment are carried at cost (or fair value at acquisition date for assets obtained through business combinations). Major additions and improvements are capitalized, while maintenance and repairs which do not extend the lives of the assets are expensed as incurred. Gain or loss on the disposition of property, plant and equipment is recognized in operations when realized.

Depreciation of property, plant and equipment is recognized on a straight-line basis over the following estimated useful lives:

Class of assets	Useful life
Buildings and improvements	5 to 40 years
Machinery, equipment, and furniture and fixtures	3 to 10 years
Leasehold improvements	Shorter of asset life or term of lease

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.

Goodwill and Intangible Assets

Our intangible assets include amounts recognized in connection with acquisitions, including customer relationships, technology, intellectual property and tradenames. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Except for goodwill, we do not have any intangible assets with indefinite useful lives.

Goodwill represents the excess of costs over fair value of assets of businesses acquired. We review our goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We test goodwill at the reporting unit level.

During the year ended December 31, 2012, we adopted Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount. 

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

If it is determined as a result of the qualitative assessment permitted by ASU 2011-08, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step impairment test is required. In the first step, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit’s assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value allocated to goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference.

Under the two-step impairment test, we determine the fair value of our reporting units using both an income approach and a market approach, and weigh both approaches to determine the fair value of each reporting unit. Under the income approach, we perform a discounted cash flow analysis which incorporates management’s cash flow projections over a five-year period and a terminal value is calculated by applying a capitalization rate to terminal year projections based on an estimated long-term growth rate. The five-year projected cash flows and calculated terminal value are discounted using a weighted average cost of capital (“WACC”) which takes into account the costs of debt and equity. The cost of equity is based on the risk-free interest rate, equity risk premium, industry and size equity premiums and any additional market equity risk premiums as deemed appropriate for each reporting unit. To arrive at a fair value for each reporting unit, the terminal value is discounted by the WACC and added to the present value of the estimated cash flows over the discrete five-year period. There are a number of other variables which impact the projected cash flows, such as expected revenue growth and profitability levels, working capital requirements, capital expenditures and related depreciation and amortization. Under the market approach, we perform a comparable public company analysis and apply revenue and earnings multiples from the identified set of companies to the reporting unit’s actual and forecasted financial performance to determine the fair value of each reporting unit. We evaluate the reasonableness of the fair value calculations of our reporting units by reconciling the total of the fair values of all of our reporting units to our total market capitalization, and adjusting for an appropriate control premium.   In addition, we make certain judgments in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

For our annual goodwill impairment test as of December 31, 2012, we performed a qualitative assessment as permitted by ASU 2011-08 for all of our reporting units and determined that it was more likely than not that the fair values of each of our reporting units exceeded their respective carrying values. For our annual goodwill impairment tests as of December 31, 2011 and 2010, we performed step one of the two-step impairment test and determined that the estimated fair values of each of our reporting units exceeded their respective carrying values, indicating the underlying goodwill of each unit was not impaired. Each of our reporting units had a substantial excess of fair value over their respective carrying values as of December 31, 2011 and 2010.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present.

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

Contingent Consideration for Business Acquisitions  

Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Other Assets

Other assets primarily include certain software development and implementation costs, an investment in a joint venture and other assets obtained to fulfill customer related contract obligations. We capitalize the cost of internal-use software in accordance with ASC Topic 350-40, Internal-Use Software. These costs consist of payments made to third parties for software development and implementation and are amortized using the straight-line method over their estimated useful lives, typically three to five years. We account for a 5% interest in a joint venture partnership under the equity method of accounting because significant influence exists due to certain factors, including representation on the partnership’s Management Board and voting rights.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense.

Earnings per Share

Basic earnings per share (“EPS”) are computed by dividing earnings by the weighted average number of common shares outstanding during the periods. Diluted EPS reflects the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Our dilutive common stock equivalent shares consist of stock options and restricted stock units outstanding under our stock-based incentive plans and are computed under the treasury stock method, using the average market price during the period. The following table presents instruments which were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the weighted average dilutive common stock equivalent shares which were included in the computation of diluted EPS:

	2012		2011		2010
	(In thousands)
Non-dilutive instruments		64		115		1,299
Dilutive common stock equivalents		319		244		108

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

Stock-Based Compensation

Pursuant to our stock-based incentive plans which are described more fully in Note 10, we grant stock options, restricted stock, stock units, and equity to officers, employees, and members of the Board of Directors. We compute compensation expense for all equity-based compensation awards issued to employees using the fair-value measurement method. We recognize compensation expense on a straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We apply a forfeiture estimate to compensation expense recognized for awards that are expected to vest during the requisite service period, and revise that estimate if subsequent information indicates that the actual forfeitures will differ from the estimate. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We do not capitalize any portion of our stock-based compensation.

We estimate the fair value of our stock options on the date of grant using the Black-Scholes option pricing model, which requires various assumptions such as expected term, expected stock price volatility and risk-free interest rate. We estimate the expected term of stock options granted taking into consideration historical data related to stock option exercises. We use historical stock price data in order to estimate the expected volatility factor of stock options granted. The risk-free interest rate for the periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate the estimates used, including but not limited to those related to revenue recognition, the allowance for doubtful accounts receivable, impairments of goodwill and other intangible assets, valuation of intangible assets acquired and contingent consideration liabilities assumed in business acquisitions, valuation of stock-based compensation awards and income taxes. Actual results could differ from these estimates.

Fair Value Estimates

ASC Topic 820, Fair Value Measurements and Disclosure (“Topic 820”), defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The guidance within Topic 820 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels as follows:

· Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets;

· Level 2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and

· Level 3 – unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.

The carrying value of financial instruments including cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate estimated market values because of short-term maturities and interest rates that approximate current rates. Our fair value measurements relate to goodwill, intangible assets and contingent consideration recognized in connection with acquisitions and are valued using Level 3 inputs.

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GP STRATEGIES CORPORATION

Notes to Consolidated Financial Statements

Leases

We lease various office space, machinery and equipment under noncancelable operating leases which have minimum lease obligations. Several of the leases contain provisions for rent escalations based primarily on increases in real estate taxes and operating costs incurred by the lessor. Rent expense is recognized in the statement of operations as incurred except for escalating rents, which are expensed on a straight-line basis over the terms of the leases.

Legal Expenses

We are involved, from time to time, in litigation and proceedings arising out of the ordinary course of business. Costs for legal services rendered in the course of these proceedings are charged to expense as they are incurred.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Accounting Standards Adopted

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  The objective of ASU 2011-08 is to simplify how entities, both public and nonpublic, test goodwill for impairment.  These amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount.  The guidance in ASU 2011-08 is effective for annual and interim goodwill assessments performed for fiscal years beginning after December 15, 2011 and early adoption is permitted.  We implemented this accounting standard for our goodwill impairment testing as of December 31, 2012.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"), which requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The current option to present components of other comprehensive income as part of the statement of changes in stockholders' equity will be eliminated. Although the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under existing guidance. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011 and will be applied retrospectively. We adopted ASU 2011-05 in the first quarter of 2012 and have included two separate, but consecutive statements of operations and comprehensive income in this report. The adoption of ASU 2011-05 changed our financial statement presentation of comprehensive income but did not impact our net income, financial position or cash flows.

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Notes to Consolidated Financial Statements

(2) Acquisitions

The following tables summarize the purchase prices and purchase price allocations for the acquisitions completed during the years ended December 31, 2012, 2011 and 2010. A description of the acquired businesses during each year is summarized below each table.

2012 Acquisitions	(Dollars in thousands)
Acquired company	Information Horizons		Asentus		Rovsing Dynamics		Blessing White
Acquisition date	5/1/2012		6/29/2012		9/17/2012		10/1/2012
Cash purchase price	$	531	$	1,417	$	720	$	10,762
Fair value of contingent consideration		—		765		—		—
Estimated working capital adjustment		—		—		—		(769	)
Total purchase price	$	531	$	2,182	$	720	$	9,993
Purchase price allocation:
Cash	$	—	$	396	$	20	$	830
Accounts receivable		—		1,970		—		2,462
Other assets		—		411		898		192
Property, plant and equipment		26		46		5		76
Intangible assets		505		443		775		3,280
Goodwill		—		1,931		340		6,295
Total assets		531		5,197		2,038		13,135
Accounts payable and accrued expenses		—		2,708		428		1,548
Billings in excess of costs and estimated earnings on uncompleted contracts		—		221		890		282
Deferred tax liability		—		86		—		1,312
Total liabilities		—		3,015		1,318		3,142
Net assets acquired	$	531	$	2,182	$	720	$	9,993

Information Horizons

Effective May 1, 2012, we entered into an Asset Purchase Agreement with Information Horizons Limited (“Information Horizons”), an independent skills training provider located in the United Kingdom, to acquire its government funded training services business. The purchase price primarily consisted of a customer-related intangible asset of $505,000 which is being amortized over an estimated useful life of three years subsequent to the acquisition date. Information Horizons is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since May 1, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

Asentus

On June 29, 2012, through our wholly-owned subsidiaries in Canada and Europe, we acquired the business and operations of Asentus Consulting Group Ltd. and Asentus Europe B.V. (collectively, “Asentus”). Asentus is an international provider of IT technical training content, and live and virtual training event services, with offices in Vancouver, Canada, The Netherlands, Germany and France. The total purchase price for both companies was $1,417,000, of which $1,100,000 was paid in cash at closing and $317,000 was paid during the fourth quarter of 2012 subsequent to the finalization of a working capital calculation pursuant to the purchase agreement. In addition, the purchase agreement requires up to an additional $3,700,000 of consideration, contingent upon the achievement of certain earnings targets, as defined in the purchase agreement, during two successive twelve-month periods following the closing. Of the total contingent consideration, a maximum of $2,100,000 would be payable subsequent to the first twelve-month period following completion of the acquisition and a maximum of $1,600,000 would be payable subsequent to the second twelve-month period following completion of the acquisition. We recorded amortizable intangible assets as a result of the acquisition, which included $325,000 of customer-related intangible assets which are being amortized over an estimated useful life of five years and $118,000 of intellectual property which is being amortized over an estimated useful life of three years. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. The acquired Asentus business is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since July 1, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

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Notes to Consolidated Financial Statements

Rovsing Dynamics

On September 17, 2012, we entered into an Asset Purchase Agreement with Rovsing Dynamics A/S (“Rovsing”), located in Denmark, a provider of vibration condition monitoring hardware and software, and on that date acquired the business and certain operating assets. We recorded a technology-related intangible asset of $775,000 related to proprietary software acquired which is being amortized over an estimated useful life of three years subsequent to the acquisition date. We expect that all of the goodwill recorded for financial statement purposes will be deductible for tax purposes. The acquired Rovsing business is included in the Energy Services segment and the results of its operations have been included in the consolidated financial statements since September 17, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

BlessingWhite

On October 1, 2012, we completed the acquisition of BlessingWhite, a provider of leadership development and employee engagement solutions. The total purchase price was $10,762,000 in cash at closing and is subject to a working capital adjustment as defined in the purchase agreement. We expect to finalize the working capital adjustment in the first quarter of 2013. We recorded $3,280,000 of amortizable intangible assets as a result of the acquisition, which includes $1,761,000 of customer-related intangible assets which are being amortized over five years, $1,238,000 of intellectual property related to training course content which is being amortized over five years, $191,000 related to the acquired tradename which is being amortized over two years, and $90,000 related to acquired technology which is being amortized over three years from the acquisition date. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. BlessingWhite is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since October 1, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

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Notes to Consolidated Financial Statements

2011 Acquisitions	(Dollars in thousands)
Acquired company	Communication Consulting		Ultra Training		RWD		Beneast Training
Acquisition date	2/1/2011		4/1/2011		4/15/2011		8/1/2011
Cash purchase price	$	1,505	$	3,420	$	25,760	$	6,771
Fair value of contingent consideration		112		—		—		—
Total purchase price	$	1,617	$	3,420	$	25,760	$	6,771
Purchase price allocation:
Cash	$	—	$	347	$	81	$	2,236
Accounts receivable		—		340		13,667		375
Other assets		—		188		2,261		104
Property, plant and equipment		16		42		573		192
Intangible assets		390		1,412		3,726		2,706
Goodwill		1,211		2,336		13,059		3,790
Total assets		1,617		4,665		33,367		9,403
Accounts payable and accrued expenses		—		878		6,299		1,956
Billings in excess of costs and estimated earnings on uncompleted contracts		—		—		1,308		—
Deferred tax liability		—		367		—		676
Total liabilities		—		1,245		7,607		2,632
Net assets acquired	$	1,617	$	3,420	$	25,760	$	6,771

Communication Consulting

On February 1, 2011, through our wholly-owned subsidiaries in Hong Kong and Shanghai, we acquired the training business and certain related assets of Cathay/Communication Consulting Limited (“Communication Consulting”), a Hong Kong-based training and consulting company with offices in Shanghai and Beijing, China, and Haryana (New Delhi) in India. Communication Consulting designs and delivers customized training solutions and specializes in the areas of leadership, communication skills, sales and customer service training. The purchase price allocation includes $390,000 of intangible assets, which consists of $230,000 for intellectual property and $160,000 for customer-related intangible assets, both of which are being amortized over five years from the acquisition date. We expect that all of the goodwill recorded for financial statement purposes will be deductible for tax purposes. The acquired Communication Consulting business is included in the Professional & Technical Services segment and the results of its operations have been included in the consolidated financial statements since February 1, 2011. The pro-forma impact of the acquisition is not material to our results of operations.

Ultra Training Ltd.

On April 1, 2011, we acquired Ultra Training Ltd., an independent skills training provider located in the United Kingdom. The purchase price allocation includes $1,412,000 of customer-related intangible assets which are being amortized over five years from the acquisition date. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. Ultra Training Ltd. is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since April 1, 2011. The pro-forma impact of the acquisition is not material to our results of operations.

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Notes to Consolidated Financial Statements

RWD Technologies

On April 15, 2011, we completed the acquisition of certain assets of the consulting business of RWD Technologies, LLC, a Delaware limited liability company, and certain of its subsidiaries (collectively, “RWD”). RWD is a provider of human capital management and IT consulting services, business transformation and lean process improvement, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, energy, automotive, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector. We paid $27,980,000 of cash at closing. The purchase price was subsequently adjusted based on the final determination of the working capital of the acquired business as of the closing date in accordance with the Asset Purchase Agreement. In September 2011, the seller paid us $2,220,000 based on the final determination of working capital as of the acquisition date. The purchase price allocation includes $3,726,000 of intangible assets, which consists of $2,935,000 for customer-related intangible assets which are being amortized over 5.9 years and $791,000 related to the acquired tradename which is being amortized over two years from the acquisition date. We expect that all of the goodwill recorded for financial statement purposes will be deductible for tax purposes.

A portion of the acquired business is reported as a separate reportable segment named Performance Readiness Solutions (formerly RWD), and the other business units are included in the Professional & Technical Services and Sandy Training & Marketing segments. The results of RWD’s operations have been included in the consolidated financial statements since April 16, 2011.

The following unaudited pro-forma condensed consolidated results of operations assume that the acquisition of RWD was completed as of January 1 for each of the years below:

	Year ended
	December 31,
	2011		2010
	(In thousands, except per share amounts)
Revenue	$	354,609	$	324,587
Net income		18,605		8,279
Basic earnings per share		0.99		0.44
Diluted earnings per share		0.98		0.44

Beneast Training Ltd.

On August 1, 2011, we acquired the share capital of TK Holdings Ltd and its subsidiary Beneast Training Ltd. (collectively, “Beneast”), an independent skills training provider located in the United Kingdom. The purchase price allocation includes $2,706,000 of customer-related intangible assets which are being amortized over five years from the acquisition date. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. Beneast is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since August 1, 2011. The pro-forma impact of the acquisition is not material to our results of operations.

Van Hee

On July 29, 2011, we entered into an Asset Purchase Agreement with Van Hee Transport Limited (“Van Hee”), an independent skills training provider located in the United Kingdom, to acquire a contract to provide government funded training services. The purchase price was $770,000 in cash at closing and was recorded as an intangible asset which is being amortized over an estimated useful life of three years subsequent to the acquisition date. Van Hee is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since August 1, 2011.

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Notes to Consolidated Financial Statements

2010 Acquisitions	(Dollars in thousands)
Acquired company	Marton House		Bath Consulting		Academy of Training
Acquisition date	4/1/2010		11/1/2010		12/1/2010
Cash purchase price	$	2,752	$	1,353	$	1,119
Fair value of contingent consideration		1,614		939		133
Total purchase price	$	4,366	$	2,292	$	1,252
Purchase price allocation:
Cash	$	5	$	106	$	52
Accounts receivable		1,441		945		380
Other assets		520		102		194
Property, plant and equipment		25		34		73
Customer-related intangible assets		1,044		486		303
Goodwill		3,136		1,518		905
Total assets		6,171		3,191		1,907
Accounts payable and accrued expenses		1,105		763		536
Billings in excess of costs and estimated earnings on uncompleted contracts		408		—		26
Deferred tax liability		292		136		93
Total liabilities		1,805		899		655
Net assets acquired	$	4,366	$	2,292	$	1,252

Marton House

On April 1, 2010, we completed the acquisition of Marton House Plc (“Marton House”), a provider of custom e-Learning content development with expertise in leadership and product sales training in the United Kingdom. Marton House is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since April 1, 2010. None of the goodwill recorded for financial statement purposes is deductible for tax purposes.

Bath Consulting

On November 1, 2010, we completed the acquisition of Bath Consulting Group (“Bath Consulting”), a niche leadership and organizational development consulting firm in the United Kingdom. Bath Consulting is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since November 1, 2010. None of the goodwill recorded for financial statement purposes is deductible for tax purposes.

Academy of Training

On December 1, 2010, we completed the acquisition of Academy of Training Ltd. (“AoT”), an independent training provider in the United Kingdom. AoT is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since December 1, 2010. None of the goodwill recorded for financial statement purposes is deductible for tax purposes.

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Notes to Consolidated Financial Statements

Contingent Consideration

ASC Topic 805 requires that contingent consideration be recognized at fair value on the acquisition date and be re-measured each reporting period with subsequent adjustments recognized in the consolidated statement of operations. We estimate the fair value of contingent consideration liabilities based on financial projections of the acquired companies and estimated probabilities of achievement and discount the liabilities to present value using a weighted-average cost of capital. Contingent consideration is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisitions are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to, and volatility in, our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Below is a summary of the potential contingent consideration we may be required to pay in connection with completed acquisitions as of December 31, 2012 (dollars in thousands):

	Original range
	of potential	As of December 31, 2012
	undiscounted	Maximum contingent consideration due in
Acquisition:	payments	2013		2014			Total
Milsom	$0 - $3,600	$	302	$	—	$	$	302
Marton House	$0 - $3,750		1,293		—			1,293
Bath Consulting	$0 - $2,376		724		1,099			1,823
Communication Consulting	$0 - $700		300		—			300
Asentus	$0 - $3,700		2,100		1,600			3,700
Total		$	4,719	$	2,699	$	$	7,418

Below is a summary of the changes in the recorded amount of contingent consideration liabilities from December 31, 2011 to December 31, 2012 for each acquisition (dollars in thousands):

						Change in
			2012			Fair Value of			Foreign
	Liability as of		Additions			Contingent			Currency		Liability as of
Acquisition:	Dec. 31, 2011		(Payments)			Consideration			Translation		Dec. 31, 2012
Milsom	$	682	$	(437	)	$	44		$	13	$	302
Option Six		800		(800	)		—			—		—
Marton House		311		-			452			11		774
Bath Consulting		1,197		(350	)		557			60		1,464
Academy of Training		49		(78	)		29			—		—
Communication Consulting		239		(200	)		(42	)		3		—
Asentus		—		765			(251	)		30		544
Total	$	3,278	$	(1,100	)	$	789		$	117	$	3,084

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Notes to Consolidated Financial Statements

As of December 31, 2012 and 2011, contingent consideration included in accounts payable and accrued expenses on the consolidated balance totaled $2,540,000 and $2,539,000, respectively. As of December 31, 2012 and 2011, we also had accrued contingent consideration totaling $544,000 and $739,000, respectively, which is included in other long-term liabilities on the consolidated balance sheet and represents the portion of contingent consideration estimated to be payable greater than twelve months from the balance sheet date.

(3) Goodwill & Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reportable business segment for the years ended December 31, 2012 and 2011 were as follows (in thousands):

				Professional						Performance
	Learning			& Technical						Readiness
	Solutions			Services			Sandy			Solutions		Energy		Total
Net book value at January 1, 2011
Goodwill	$	41,115		$	33,620		$	5,508		$	—	$	8,170	$	88,413
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total		39,036			25,790			—			—		8,170		72,996
2011 Activity:
Acquisitions		6,440			3,823			653			9,795		—		20,711
Foreign currency translation		(322	)		45			—			—		—		(277	)
Other		(84	)		(8	)		—			—		—		(92	)
Net book value at December 31, 2011
Goodwill		47,149			37,480			6,161			9,795		8,170		108,755
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total		45,070			29,650			653			9,795		8,170		93,338
2012 Activity:
Acquisitions		8,226			—			—			—		340		8,566
Foreign currency translation		903			10			—			—		12		925
Other		—			(8	)		—			—		—		(8	)
Net book value at December 31, 2012
Goodwill		56,278			37,482			6,161			9,795		8,522		118,238
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total	$	54,199		$	29,652		$	653		$	9,795	$	8,522	$	102,821

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Notes to Consolidated Financial Statements

Intangible Assets Subject to Amortization

Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands):

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
December 31, 2012
Customer relationships	$	22,193	$	(9,064	)	$	13,129
Tradenames		982		(700	)		282
Intellectual property and other		3,686		(1,225	)		2,461
	$	26,861	$	(10,989	)	$	15,872
December 31, 2011
Customer relationships	$	20,286	$	(6,361	)	$	13,925
Tradenames		791		(280	)		511
Contract backlog		374		(367	)		7
Intellectual property and other		1,844		(1,165	)		679
	$	23,295	$	(8,173	)	$	15,122

Amortization expense for intangible assets was $4,598,000, $3,418,000 and $2,256,000, for the years ended December 31, 2012, 2011 and 2010, respectively. Estimated amortization expense for intangible assets included in our consolidated balance sheet as of December 31, 2012 is as follows (in thousands):

Fiscal year ending:
2013	$	4,866
2014		4,440
2015		3,045
2016		2,051
2017		988
Thereafter		482
Total	$	15,872

As of December 31, 2012, our intangible assets with definite lives had a weighted average remaining useful life of 3.9 years. We have no amortizable intangible assets with indefinite useful lives.

(4) Inventories

Our inventories are comprised primarily of the following: (i) raw materials used in the assembly of glovebox portfolios, brochures and accessory kits for automotive manufacturers which are installed in new cars and trucks at the time of vehicle assembly; (ii) component parts used in the implementation of condition monitoring systems for power generation customers; and (iii) training materials, books and related accessories used in the delivery of courses. As of December 31, 2012 and 2011, we had total inventories of $654,000 and $178,000, respectively, which are included in prepaid expenses and other current assets in the consolidated balance sheets.

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Notes to Consolidated Financial Statements

(5) Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):

	December 31,
	2012			2011
Machinery, equipment and vehicles	$	15,043		$	13,602
Furniture and fixtures		2,274			1,884
Leasehold improvements		1,058			928
Buildings		396			379
		18,771			16,793
Accumulated depreciation and amortization		(13,260	)		(11,231	)
	$	5,511		$	5,562

Depreciation expense was $2,636,000, $2,146,000, and $1,577,000, for the years ended December 31, 2012, 2011 and 2010, respectively.

(6) Short-Term Borrowings

We have a $50,000,000 Financing and Security Agreement (the “Credit Agreement”) with a bank that expires on October 31, 2014 and is secured by certain of our assets. The Credit Agreement contains a provision to increase the maximum principal amount to $75,000,000 upon lender approval. The maximum interest rate on the Credit Agreement is the daily LIBOR market index rate plus 2.25%. Based upon our financial performance, the interest rate can be reduced. The Credit Agreement contains covenants with respect to our minimum tangible net worth, total liabilities to tangible net worth ratio and cash flow to debt service ratio. We were in compliance with all loan covenants under the Credit Agreement as of December 31, 2012. As of December 31, 2012, there were no borrowings outstanding and $50,000,000 of available borrowings under the Credit Agreement.

(7) Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following (in thousands):

	December 31,
	2012		2011
Trade accounts payable	$	11,061	$	10,481
Accrued salaries, vacation and benefits		16,463		14,517
Other accrued expenses		17,393		13,075
Accrued contingent consideration		2,540		2,539
Negative cash book balance		—		1,888
	$	47,457	$	42,500

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Notes to Consolidated Financial Statements

(8) Employee Benefit Plan

We offer the GP Retirement Savings Plan (the “Plan”) to our employees. Eligible employees are automatically enrolled unless they elect to not participate in the Plan, and contributions begin as soon as administratively feasible after enrollment. The Plan permits pre-tax contributions to the Plan by participants pursuant to Section 401(k) of the Internal Revenue Code (IRC). We make matching contributions at our discretion. In 2012, 2011 and 2010, we contributed 107,728, 93,472, and 48,440 shares, respectively, of our common stock directly to the Plan with a value of approximately $1,835,000, $1,108,000 and $440,000, respectively. In addition, we contributed cash, net of forfeitures, of $150,000, $334,000 and $160,000 to the Plan for matching contributions for the years ended December 31, 2012, 2011 and 2010, respectively. For the years ended December 31, 2012, 2011 and 2010, we recognized total compensation expense of $2,086,000, $1,520,000 and $601,000, respectively, in the consolidated statements of operations for matching contributions to the Plan.

(9) Income Taxes

The components of income before income taxes and income tax expense for the years ended December 31, 2012, 2011 and 2010 are as follows (in thousands):

	Years ended December 31,
	2012			2011			2010
Income before income taxes:
Domestic	$	27,827		$	21,976		$	17,452
Foreign		7,975			6,415			3,400
Total income before income taxes	$	35,802		$	28,391		$	20,852
Income tax expense:
Current:
Federal	$	7,846		$	6,869		$	4,746
State and local		1,653			1,750			1,111
Foreign		2,899			1,765			1,328
Total current		12,398			10,384			7,185
Deferred:
Federal		856			310			910
State and local		236			48			133
Foreign		(376	)		(211	)		(108	)
Total deferred		716			147			935
Total income tax expense	$	13,114		$	10,531		$	8,120

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Notes to Consolidated Financial Statements

The difference between the expense for income tax expense computed at the statutory rate and the reported amount of income tax expense is as follows:

	December 31,
	2012			2011			2010
Federal income tax rate		35.0	%		35.0	%		35.0	%
State and local taxes net of federal benefit		3.4			4.1			3.8
Foreign taxes		(0.1	)		(1.2	)		2.2
Permanent differences		1.9			2.1			(0.6	)
Valuation allowance adjustments		—			0.1			(0.5	)
Reduction of uncertain tax position liabilities		(4.5	)		(3.1	)		—
Other		0.9			0.1			(1.0	)
Effective tax rate		36.6	%		37.1	%		38.9	%

Uncertain Tax Positions

During the third quarter of 2012, we recognized an income tax benefit of $1,602,000 on the reduction of an uncertain tax position liability relating to a prior tax deduction that is now outside the applicable statute of limitations. The income tax benefit included a $1,418,000 reduction in the uncertain tax position liability and the reversal of $184,000 of accrued interest and penalties. During the fourth quarter of 2011, we recognized an income tax benefit of $891,000 on the reduction of an uncertain tax position liability relating to a period that is outside the applicable statute of limitations. The income tax benefit included an $800,000 reduction in the uncertain tax position liability and the reversal of $91,000 of accrued interest and penalties. Excluding the impact of these income tax benefits in both years, our effective income tax rate was 41.1% and 40.2% for the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, after recording the reduction of the uncertain tax position liability, we had no other uncertain tax positions reflected on our consolidated balance sheet.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2012, 2011 and 2010, we recognized $(160,000), $(6,000) and $93,000, respectively, of interest expense (income) related to these tax positions which is reflected within income tax expense in the consolidated statements of operations. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examination by tax authorities for years prior to 2009, with the exception of the net operating loss generated in 2003 that was utilized on the 2008 and 2009 tax returns.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows (in thousands):

	Years ended December 31,
	2012			2011			2010
Unrecognized tax benefits at beginning of the year	$	1,418		$	2,218		$	2,218
Additions related to current year tax positions		—			—			—
Additions related to prior year tax positions		—			—			—
Settlements		—			—			—
Reductions due to lapse of statute of limitations		(1,418	)		(800	)		—
Unrecognized tax benefits at end of the year	$	—		$	1,418		$	2,218

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Notes to Consolidated Financial Statements

Deferred Income Taxes

The tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities that are included in the net deferred tax assets and liabilities are summarized as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Allowance for doubtful accounts	$	492		$	380
Accrued liabilities		1,131			1,363
Stock-based compensation expense		499			1,174
Net federal, state and foreign operating loss carryforwards		288			465
Deferred tax assets		2,410			3,382
Deferred tax liabilities:
Intangible assets, property and equipment, principally due to difference in depreciation and amortization		6,990			5,709
Net deferred tax liabilities		(4,580	)		(2,327	)
Less valuation allowance		(263	)		(326	)
Net deferred tax liabilities, net of valuation allowance	$	(4,843	)	$	(2,653	)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets may not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon these factors, management believes it is more likely than not that the Company will realize the benefits of deferred tax assets, net of the valuation allowance.

As of December 31, 2012, we had utilized all of our available credit carryovers for Federal tax purposes. In addition, as of December 31, 2012, we had foreign net operating loss carryforwards of $263,000 which expire in 2013 and beyond. There is a valuation allowance of $263,000 against the foreign net operating loss carryforwards due to the uncertainty of future profitability in foreign jurisdictions.

Foreign Income

As of December 31, 2012, we had approximately $17,700,000 of accumulated undistributed earnings generated by our foreign subsidiaries. No provision has been made for income taxes that would be payable upon the distribution of such earnings since we intend to permanently reinvest these earnings. If these earnings were distributed in the form of dividends or otherwise, the distributions would be subject to U.S. federal income tax at the statutory rate of 35 percent, less foreign tax credits available to offset such distributions, if any. In addition, such distributions may be subject to withholding taxes in the various tax jurisdictions.

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Notes to Consolidated Financial Statements

(10) Stock-Based Compensation

Our shareholders approved the 2011 Stock Incentive Plan (the “2011 Plan”) at our Annual Meeting of Shareholders in December 2011. The 2011 Plan replaced the 1973 Non-Qualified Stock Option Plan, as amended, and the 2003 Incentive Stock Plan (the “Prior Plans”). No new awards will be made under the Prior Plans and outstanding awards will remain outstanding under the Prior Plans until settled. Under the 2011 Plan, we may grant awards of non-qualified stock options, incentive stock options, restricted stock, stock units, performance shares, performance units and other incentives payable in cash or in shares of our common stock to officers, employees or members of the Board of Directors. We are authorized to grant an aggregate of 1,355,764 shares under the 2011 Plan. As of December 31, 2012 there were 1,147,780 available shares for issuance of future grants of awards under the 2011 Plan. As of December 31, 2012, there were 583,692 shares representing outstanding awards under the Prior Plans and 252,000 shares representing outstanding awards under the 2011 Plan. We may issue new shares or use shares held in treasury to deliver shares to employees for our equity grants or upon exercise of non-qualified stock options.

The following table summarizes the pre-tax stock-based compensation expense included in reported net income (in thousands):

	Years ended December 31,
	2012		2011		2010
Non-qualified stock options	$	711	$	963	$	794
Restricted stock units		717		650		584
Board of Director stock grants		363		379		279
Total	$	1,791	$	1,992	$	1,657

We recognized a deferred income tax benefit of $571,000, $645,000 and $551,000, respectively, during the years ended December 31, 2012, 2011, and 2010 associated with the compensation expense recognized in our consolidated financial statements. As of December 31, 2012, we had non-qualified stock options and restricted stock units outstanding under these plans as discussed below.

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Notes to Consolidated Financial Statements

Non-Qualified Stock Options

Non-qualified stock options are granted with an exercise price not less than the fair market value of our common stock at the date of grant, vest over a period up to ten years, and expire at various terms up to ten years from the date of grant.

Summarized information for our non-qualified stock options is as follows:

						Weighted
						average
				Weighted		remaining		Aggregate
	Number of			average		contractual		intrinsic
Stock Options	options			exercise price		term		value
Outstanding at December 31, 2011		1,441,370		$	9.93
Granted		54,500			17.57
Exercised		(812,340	)		10.80
Forfeited		(37,100	)		11.74
Expired		(21,730	)		4.65
Outstanding at December 31, 2012		624,700		$	9.54		3.37	$	6,942,000
Stock options expected to vest		610,500		$	9.55		3.37	$	6,774,000
Exercisable at December 31, 2012		188,200		$	8.49		2.90	$	2,288,000

Summarized weighted average information for non-qualified stock options granted to certain key personnel during the years ended December 31, 2012, 2011 and 2010 is as follows:

	2012			2011			2010
Number of options granted		54,500			157,500			500,000
Exercise price	$	17.57		$	13.18		$	7.52
Vesting term		4.5 years			5 years			5 years
Contractual term		5.5 years			6 years			6 years
Grant-date fair value	$	6.80		$	4.63		$	3.15
Black-Scholes assumptions:
Expected term		4.2 years			4.5 years			4.6 years
Expected stock price volatility		48.3	%		39.3	%		47.6	%
Risk-free interest rate		0.61	%		1.82	%		2.15	%
Expected dividend yield		—	%		—	%		—	%

As of December 31, 2012, we had approximately $1,317,000 of unrecognized compensation cost related to the unvested portion of outstanding stock options to be recognized on a straight-line basis over a weighted average remaining service period of approximately 2.9 years.

76

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

We received cash for the exercise price associated with stock options exercised of $284,000, $355,000, and $39,000 during the years ended December 31, 2012, 2011 and 2010, respectively. During the year ended December 31, 2012, we settled 782,980 outstanding stock options held by our employees by issuing 214,624 fully vested shares which represented the fair value of those stock options upon settlement, net of required income tax withholdings. The total intrinsic value realized by participants on stock options exercised and/or settled was $6,544,000, $123,000, and $130,000 during the years ended December 31, 2012, 2011 and 2010, respectively. During the years ended December 31, 2012, 2011 and 2010, we realized income tax benefits of $2,034,000, $131,000 and $129,000, respectively, related to stock option exercises and restricted stock vesting, which are reflected as an increase to additional paid-in capital on the consolidated statements of stockholders’ equity.

Restricted Stock Units

In addition to stock options, we issue restricted stock units to key employees and members of the Board of Directors based on meeting certain service goals. The stock units vest to the recipients at various dates, up to five years, based on fulfilling service requirements. We recognize the value of the market price of the underlying stock on the date of grant to compensation expense over the requisite service period. Upon vesting, the stock units are settled in shares of our common stock. Summarized share information for our restricted stock units is as follows:

				Weighted
	Year ended			average
	December 31,			grant date
	2012			fair value
	(In shares)			(In dollars)
Outstanding and unvested, beginning of period		102,967		$	6.43
Granted		198,500			19.26
Vested		(85,351	)		6.53
Forfeited		(5,124	)		8.74
Outstanding and unvested, end of period		210,992		$	18.40
Restricted stock units expected to vest		197,232		$	18.49

The total intrinsic value realized by participants upon the vesting of restricted stock units was $1,667,000, $1,024,000 and $1,071,000 during the years ended December 31, 2012, 2011 and 2010, respectively. As of December 31, 2012, we had unrecognized compensation cost of $3,326,000 related to the unvested portion of our outstanding restricted stock units to be recognized over a weighted average remaining service period of 4.5 years.

77

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

(11) Common Stock

The holders of common stock are entitled to one vote per share. As of December 31, 2012, there were 19,049,672 shares of common stock issued and outstanding. In addition, as of December 31, 2012, there were 835,692 shares reserved for issuance under outstanding equity compensation awards such as stock options and restricted stock units and an additional 1,147,780 shares available for issuance for future grants of awards under the 2011 Plan.

Stock Repurchase Program

We have a share repurchase program under which we may repurchase shares of our common stock from time to time in the open market, subject to prevailing business and market conditions and other factors. During the years ended December 31, 2012, 2011 and 2010, we repurchased approximately 180,000, 125,000 and 37,000 shares, respectively, of our common stock in the open market for a total cost of approximately $3,433,000, $1,414,000 and $266,000, respectively. As of December 31, 2012, there was approximately $1,059,000 available for future repurchases under the buyback program. There is no expiration date for the repurchase program.

Securities Purchase Agreement

On December 30, 2009, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single accredited investor, Sagard Capital Partners, L.P. (“Sagard”), pursuant to which we sold to Sagard, in a private placement, an aggregate of 2,857,143 shares (the “Shares”) of our common stock, par value $0.01, at a price of $7.00 per share (the “Offering”), for an aggregate purchase price of $20,000,000. The Offering closed on December 30, 2009. The Purchase Agreement prohibits Sagard from acquiring beneficial ownership of more than 23% of our common stock (calculated on a fully diluted basis).

On December 30, 2011, Sagard entered into a Stock Transfer Agreement with Bedford Oak Partners, L.P. (“Bedford Oak”) to privately purchase 350,000 shares of our common stock from Bedford Oak for a purchase price of $12.30 per share, or an aggregate purchase price of $4,305,000.  The transaction closed in January 2012. In addition, Sagard purchased an additional 173,353 and 101,478 shares of our common stock in the open market during the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, Sagard beneficially owned 3,509,774 shares or 18.4% of our outstanding common stock.

Registration Rights Agreement

In connection with the Offering, on December 30, 2009, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Sagard. Pursuant to the Registration Rights Agreement, we agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) no later than September 30, 2010 for purposes of registering the resale of the Shares and any shares of common stock issued pursuant to the preemptive rights under Section 4(l) of the Purchase Agreement (or any shares of common stock issuable upon exercise, conversion or exchange of securities issued pursuant to the preemptive rights). We agreed to use our reasonable best efforts to cause this registration statement to be declared effective by the SEC no later than December 30, 2010. If we failed to meet either of these deadlines, fail to meet filing or effectiveness deadlines with respect to any additional registration statements required by the Registration Rights Agreement, or fail to keep any registration statements continuously effective (with limited exceptions), we will be obligated to pay to the holders of the Shares liquidated damages in the amount of 1% of the purchase price for the Shares per month, up to a maximum of $2,400,000. We also agreed, among other things, to indemnify the selling holders under the registration statements from certain liabilities and to pay all fees and expenses (excluding underwriting discounts and selling commissions and all legal fees of the selling holders in excess of $25,000) incident to our obligations under the Registration Rights Agreement. We filed the registration statement with the SEC on September 27, 2010 and it was declared effective by the SEC on October 8, 2010.

78

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

(12) Business Segments

As of December 31, 2012, we operated through five reportable business segments: (i) Learning Solutions, (ii) Professional & Technical Services, (iii) Sandy Training & Marketing, (iv) Performance Readiness Solutions (formerly RWD), and (v) Energy Services. Our Learning Solutions segment represents an aggregation of two operating groups in accordance with the aggregation criteria in U.S. GAAP, while all of the other reportable segments each represent one operating group. We are organized by operating group primarily based upon the markets served by each group and/or the services performed. Each operating group consists of business units which are focused on providing specific products and services to certain classes of customers or within targeted markets. Marketing and communications, accounting, finance, legal, human resources, information systems and other administrative services are organized at the corporate level. Business development and sales resources are aligned with operating groups to support existing customer accounts and new customer development.

Further information regarding our business segments is discussed below.

Learning Solutions. The Learning Solutions segment delivers training, curriculum design and development, e-Learning services, system hosting, training business process outsourcing and consulting services primarily to large companies in the electronics and semiconductors, healthcare, software, financial and other industries as well as to government agencies. The ability to deliver a wide range of training services on a global basis allows this segment to take over the entire learning function for the client, including their training personnel. The October 2012 acquisition of BlessingWhite added proprietary leadership training content and employee engagement tools and services to this segment’s offerings.

Professional & Technical Services. This segment has over four decades of experience providing training, consulting, engineering and technical services, including lean consulting, emergency preparedness, safety and regulatory compliance, chemical demilitarization and environmental services primarily to large companies in the manufacturing, steel, pharmaceutical and petrochemical industries, federal and state government agencies and large government contractors. This segment also provides services to users of alternative fuels, including designing and constructing liquefied natural gas (LNG), liquid to compressed natural gas (LCNG) and hydrogen fueling stations, as well as supplying fuel and equipment.

Sandy Training & Marketing. The Sandy segment provides custom product sales training and has been a leader in serving manufacturing customers in the U.S. automotive industry for over 30 years. Sandy provides custom product sales training designed to better educate customer sales forces with respect to new vehicle features and designs, in effect rapidly increasing the sales force knowledge base and enabling them to address detailed customer queries. Furthermore, Sandy helps our clients assess their customer relationship marketing strategy, measure performance against competitors and connect with their customers on a one-to-one basis. This segment also provides technical training services to automotive manufacturers as well as customers in other industries.

Performance Readiness Solutions. Formerly named RWD, this segment represents a portion of the consulting business acquired from RWD Technologies, LLC in April 2011. Certain of the other acquired RWD business units are managed within the Professional & Technical Services and Sandy segments discussed above. Performance Readiness Solutions provides human capital management and IT consulting services, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector.

Energy Services. The Energy Services segment provides engineering services, products and training primarily to electric power utilities. Our proprietary EtaPro^TM Performance and Condition Monitoring System provides a suite of performance and reliability solutions for power generation plants and is installed at over 1,000 power generating units in 34 countries. In addition to providing custom training solutions, this segment provides web-based training through our GPiLearn^TM portal, which offers over 1,300 courses to over 30,000 power plant personnel in the U.S. and in over 40 countries.

79

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

We do not allocate the following items to the segments: other income, interest expense, gain (loss) on change in fair value of contingent consideration and income tax expense. Inter-segment revenue is eliminated in consolidation and is not significant.

Prior to the merger of GP Strategies Corporation and General Physics on December 31, 2011, we did not allocate certain corporate selling, general and administrative (SG&A) expenses to our operating segments. After the merger, we began allocating these costs to the operating segments on a consistent basis as other SG&A expenses. As a result, we have reclassified the prior period operating income by segment amounts below to allocate the corporate SG&A expenses that were previously not allocated.

The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income tax expense (in thousands):

	Years ended December 31,
	2012			2011			2010
Revenue:
Learning Solutions	$	161,455		$	130,392		$	118,922
Professional & Technical Services		87,844			85,285			70,893
Sandy Training & Marketing		70,243			54,604			47,153
Performance Readiness Solutions		55,794			40,079			—
Energy Services		26,236			22,807			22,958
	$	401,572		$	333,167		$	259,926
Operating income:
Learning Solutions	$	16,487		$	9,700		$	9,074
Professional & Technical Services		5,717			7,526			3,310
Sandy Training & Marketing		4,897			3,018			1,518
Performance Readiness Solutions		2,548			601			—
Energy Services		6,822			5,540			5,322
Gain on reversal of deferred rent liability		—			1,041			—
Gain (loss) on change in fair value of contingent consideration, net		(789	)		517			1,313
Operating income		35,682			27,943			20,537
Interest expense		(269	)		(209	)		(236	)
Other income		389			657			551
Income before income tax expense	$	35,802		$	28,391		$	20,852

80

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

Additional information relating to our business segments is as follows (in thousands):

	December 31,
	2012		2011
Identifiable assets:
Learning Solutions	$	116,753	$	95,389
Professional & Technical Services		56,160		59,675
Sandy Training & Marketing		24,250		16,819
Performance Readiness Solutions		27,472		25,747
Energy Services		19,799		13,946
Total assets	$	244,434	$	211,576

Corporate and other assets which consist primarily of cash and cash equivalents, other assets, and deferred tax assets and liabilities are allocated to the segments based on their respective percentage of consolidated revenues.

	Years ended December 31,
	2012		2011		2010
Additions to property, plant and equipment:
Learning Solutions	$	1,004	$	1,116	$	380
Professional & Technical Services		299		1,068		336
Sandy Training & Marketing		38		6		9
Performance Readiness Solutions		61		161		—
Energy Services		203		48		31
Corporate and other		931		1,576		775
	$	2,536	$	3,975	$	1,531
Depreciation and amortization:
Learning Solutions	$	3,794	$	2,695	$	1,824
Professional & Technical Services		439		294		327
Sandy Training & Marketing		428		424		478
Performance Readiness Solutions		1,102		871		—
Energy Services		357		353		386
Corporate and other		1,851		1,550		1,215
	$	7,971	$	6,187	$	4,230

Information about our revenue in different geographic regions, which are attributable to our wholly owned subsidiaries located in the United Kingdom, Canada, Netherlands, Denmark, Germany, France, Mexico, Colombia, Singapore, China and India is as follows (in thousands):

	Years ended December 31,
	2012		2011		2010
United States	$	323,867	$	274,010	$	214,194
United Kingdom		61,102		48,151		36,518
Other		16,603		11,006		9,214
	$	401,572	$	333,167	$	259,926

81

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

Information about our total assets in different geographic regions is as follows (in thousands):

	December 31,
	2012		2011
United States	$	188,596	$	165,482
United Kingdom		40,163		39,033
Other		15,675		7,061
	$	244,434	$	211,576

(13) Related Party Transactions

Pursuant to the terms of the Securities Purchase Agreement with Sagard as discussed in Note 11, we agreed to take all corporate and other action necessary to cause one designee of Sagard to be elected or appointed to our Board of Directors, effective as of December 30, 2009, in all cases subject to compliance with relevant NYSE rules and regulations and all other legal and governance requirements regarding service as a director. Accordingly, on December 18, 2009, the Board of Directors unanimously approved resolutions increasing the number of Directors on the Board of Directors from seven to eight and, effective as of the date of the closing of the Offering, elected Daniel Friedberg to serve on the Board of Directors for an initial term commencing as of the date of the closing of the Offering and ending at the next annual meeting of our shareholders.

As discussed in Note 11, Sagard purchased 350,000 shares of our common stock from Bedford Oak in January 2012. Daniel M. Friedberg has been President and CEO of Sagard Capital Partners Management Corporation, the investment manager of Sagard, since its founding in 2005. Harvey P. Eisen, the Chairman of our Board of Directors, is also the Chairman and Managing Member of Bedford Oak Advisors, LLC, the investment manager of Bedford Oak. Except as described above, neither Mr. Friedberg nor Mr. Eisen is a party to any other material arrangements or transactions involving the Company.

82

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

(14) Commitments, Guarantees, and Contingencies

Commitments

Operating Leases

We have various noncancelable leases for real property and machinery and equipment. Such leases expire at various dates with, in some cases, options to extend their terms.

Minimum rentals under long-term operating leases are as follows (in thousands):

	Real		Machinery and
	property		equipment		Total
2013	$	5,722	$	1,056	$	6,778
2014		3,918		574		4,492
2015		3,159		238		3,397
2016		2,752		22		2,774
2017		2,304		—		2,304
Thereafter		1,792		—		1,792
Total	$	19,647	$	1,890	$	21,537

Certain of the leases contain provisions for rent escalation based primarily on increases in a specified Consumer Price Index, real estate taxes and operating costs incurred by the lessor. Rent expense was approximately $6,914,000, $6,615,000 and $5,769,000 for 2012, 2011 and 2010, respectively.

In 2008, we entered into a sublease with Lear Corporation (“Lear”) for approximately 60,000 square feet of space in an office building in Troy, Michigan for a term scheduled to end in March 2015.  Lear filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in 2009 and subsequently obtained court approval to reject both our sublease and the superior lease under which the sublease was made. In May 2010, we filed a complaint in U.S. District Court for the Eastern District of Michigan seeking a declaratory judgment regarding its status as an occupant of the space and its obligation to pay rent.  We sought unsuccessfully to enter into a direct lease with the building owner. The building owner, Osprey-Troy Officentre, LLC (“Osprey”), claimed rights through Lear and threatened legal action if we vacated the building and ceased to pay rent under the sublease.  We believed that the sublease was terminated and that it was a tenant-at-sufferance in the building, no longer bound by the sublease and obligated to pay only the reasonable rental value of the space it occupied.  Osprey asked the Court to deny the relief requested by us and argued that the sublease constituted an assignment by Lear to us of Lear’s lease of the portion of the building occupied by us.  Both parties filed motions for summary judgment. 

In June 2011, prior to a court ruling on this matter, we entered into a new lease directly with Osprey for a term scheduled to end in March 2018, with an option to terminate on or after May 31, 2016 with 180 days prior written notice. Prior to entering into the new lease with Osprey, we had a deferred rent liability on our balance sheet of $1,041,000, which represented the difference between the actual monthly rent owed to date and the rent expense recognized on a straight-line basis for the scheduled rent increases over the term of the original sublease. Upon entering into the new lease with Osprey, we reversed the deferred rent liability associated with the terminated sublease. As a result, we recognized a net gain of $1,041,000 in the consolidated statement of operations during the quarter ended June 30, 2011. This net gain is excluded from rent expense for the year ended December 31, 2011 as disclosed above.

83

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

Other

As of December 31, 2012, we had three outstanding letters of credit totaling $196,000, two of which expire in 2013 and one which expires in 2018. In addition, we have two outstanding performance bonds totaling $3,245,000 relating to construction contracts scheduled to be completed in 2013.

Contingencies

On February 22, 2011, the Company was named a defendant in a complaint filed by the State of Tennessee (the “State”) in the Chancery Court for the 20th Judicial District of Tennessee. The complaint alleged that Bryan Oil Company, an executive of Bryan Oil, the Company and a former employee of the Company, violated provisions of the Tennessee Petroleum Underground Storage Tank Act (the "UST Act") in connection with the closure of a waste oil storage tank in 1997. The Complaint sought civil penalties not to exceed $10,000 per day for each violation of the UST Act, post-judgment interest and court costs.  The Company denied the substantive allegations in the complaint and asserted that its actions complied with the UST Act and applicable regulations, that it did not file false information in violation of the law, and that it had valid defenses against the State's allegations. The State also began an administrative action to remove the Company as an approved Corrective Action Contractor (CAC) and issued a ruling that found that the Company had filed false information by incorrectly stating the size of the tank in a report filed in 1997. The Company appealed that ruling to the State UST Board.  In 2012, evaluation and monitoring of the site where the tank had been located confirmed that there is no actionable contamination on the site and that all soil and groundwater analytical results for the chemicals of concern concentration(s) remain below the site-specific clean-up levels. The State approved closure of the site and removal of the monitoring wells and issued a case closure letter dated December 27, 2012.  On or about January 10, 2013, all parties to the state court lawsuit entered into a compromise and settlement agreement resolving all matters in dispute among them, without the admission of any liability or the finding of any fault or violations of any statutes or regulations on the part of the Company or any of the other defendants. In connection with the settlement, the Company agreed to pay $65,000 to the State. The state court lawsuit was dismissed, with prejudice, and the administrative ruling and appeal were withdrawn, formally concluding both matters.

84

GP STRATEGIES CORPORATION 

Notes to Consolidated Financial Statements

(15) Quarterly Information (unaudited)

Our quarterly financial information has not been audited but, in management’s opinion, includes all adjustments necessary for a fair presentation.

(In thousands)	Three months ended								Year ended
2012	March 31		June 30		September 30		December 31		December 31
Revenue	$	93,605	$	102,311	$	99,671	$	105,985	$	401,572
Gross profit		15,612		19,005		17,929		19,425		71,971
Net income		4,384		5,984		6,183		6,137		22,688
Earnings per share:
Basic	$	0.23	$	0.32	$	0.33	$	0.32	$	1.20
Diluted	$	0.23	$	0.31	$	0.32	$	0.32	$	1.18
2011
Revenue	$	64,293	$	86,034	$	88,948	$	93,892	$	333,167
Gross profit		10,792		14,711		14,865		16,266		56,634
Net income		2,590		4,711		4,619		5,940		17,860
Earnings per share:
Basic	$	0.14	$	0.25	$	0.25	$	0.32	$	0.95
Diluted	$	0.14	$	0.25	$	0.24	$	0.31	$	0.94

The sum of the quarterly earnings per share amounts may not equal the total for the year due to the effects of rounding and dilution as a result of issuing common shares during the year.

85

Item 9:     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A:      Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2012 were effective. 

(b) Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f).  Our internal control processes and procedures are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements in accordance with United States generally accepted accounting principles.  Our internal control over financial reporting includes those policies and procedures that reasonably allow us to record, process, summarize, and report information and financial data within prescribed time periods and in accordance with Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of internal control over financial reporting as of December 31, 2012 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (“COSO Framework”).  Based upon our evaluation, we concluded that our internal control over financial reporting was effective as of December 31, 2012.

Our internal control over financial reporting as of December 31, 2012 has been audited by KPMG LLP, an independent registered public accounting firm, whose report appears in Item 8.

(c) Changes in Internal Control over Financial Reporting

During the year ended December 31, 2012, there has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d—15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

Item 9B: Other Information

None.

86

Part III

Item 10. Directors, Executive Officers and Corporate Governance

The additional information required by this item will be either set forth under the Election of Directors section in the Proxy Statement for the 2013 Annual Meeting of Shareholders and incorporated herein by reference or provided in an amendment to this Form 10-K to be filed no later than April 30, 2013.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of a registered class of our securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”), and to furnish us with such reports. Based solely on a review of copies of such reports for 2012, we believe that during 2012 all reports applicable to our officers, directors and greater than 10% beneficial owners were filed on a timely basis.

Item 11. Executive Compensation

The information required by this item will be either set forth under the Executive Compensation section in the Proxy Statement for the 2013 Annual Meeting of Shareholders and incorporated herein by reference or provided in an amendment to this Form 10-K to be filed no later than April 30, 2013.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The additional information required by this item will be either set forth under the Principal Stockholders and Security Ownership of Directors and Named Executive Officers sections in the Proxy Statement for the 2013 Annual Meeting of Stockholders and incorporated herein by reference or provided in an amendment to this Form 10-K to be filed no later than April 30, 2013.

Equity Compensation Plan information as of December 31, 2012

Plan category:
Equity compensation plans not approved by security holders:
	(a)	Number of securities to be issued upon exercise
			of outstanding options		114,100
	(b)	Weighted average exercise price of outstanding
			options	$	13.18
	(c)	Number of securities remaining available for future
			issuance under equity compensation plans
			(excluding securities reflected in row (a))		-
Equity compensation plans approved by security holders:
	(a)	Number of securities to be issued upon exercise
			of outstanding options		510,600
	(b)	Weighted average exercise price of outstanding
			options	$	8.73
	(c)	Number of securities remaining available for future
			issuance under equity compensation plans		1,147,780

For a description of the material terms of our stock-based compensation plans, see Note 10 to the Consolidated Financial Statements in Item 8 of this report.

87

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item will be either set forth in the Certain Relationships and Related Transactions section of the Proxy Statement for the 2013 Annual Meeting of Shareholders and incorporated herein by reference or provided in an amendment to this Form 10-K to be filed no later than April 30, 2013.

Item 14. Principal Accounting Fees and Services

The information required by this item will be either set forth in the Ratification of Independent Registered Public Accounting Firm section of the Proxy Statement for the 2013 Annual Meeting of Shareholders and incorporated herein by reference or provided in an amendment to this Form 10-K to be filed no later than April 30, 2013.

88

Part IV

Item 15: Exhibits and Financial Statement Schedules

(a) The following documents are filed as a part of this Report:

(1) Financial Statements of GP Strategies Corporation and Subsidiaries (Part II, Item 8):

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets – December 31, 2012 and 2011

Consolidated Statements of Operations – Years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Comprehensive Income – Years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Cash Flows – Years ended December 31, 2012, 2011 and 2010

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:

Other financial statement schedules are omitted because they are not required or applicable, or the required information is shown in the financial statements or notes thereto, or contained in this report.

(3) Exhibits required by Item 601 of Regulation S-K.

Exhibit number

2.1 Agreement and Plan of Merger dated as of October 31, 2011 between GP Strategies Corporation and General Physics Corporation. Incorporated herein by reference to Appendix A of GP Strategies Corporation’s Definitive Proxy Statement filed on November 1, 2011.

2.2 Asset Purchase Agreement dated March 8, 2011, and Amendment No. 1 to Asset Purchase Agreement, by and among General Physics Corporation, General Physics (UK) Ltd., RWD Technologies, LLC, RWD Technologies UK Limited, RWD Technologies Canada, Co. RWD Holdings LLC, RWD Technologies De Colombia, Ltda. and the Equity Owners of the Sellers identified on the signature pages thereto. Incorporated herein by reference to Exhibits 2.1 and 2.2 of GP Strategies Corporation’s Form 8-K filed on April 21, 2011.

2.3 Stock Purchase Agreement dated December 30, 2009 by and among General Physics Corporation and PerformTech, Inc. Incorporated herein by reference to Exhibit 2.1 of GP Strategies Corporation’s Form 8-K filed on January 5, 2010.

2.4 Asset Purchase Agreement, dated as of December 22, 2006, between General Physics Corporation and ADP, Inc. Incorporated herein by reference to Exhibit 2.1 of GP Strategies Corporation’s Form 8-K filed on December 29, 2006.

3.1 Composite of the Restated Certificate of Incorporation of GP Strategies Corporation including all amendments through December 31, 2011. Incorporated herein by reference to Exhibit 3.1 of GP Strategies Corporation’s Form 8-K filed on January 3, 2012.

3.2 GP Strategies Corporation Amended and Restated By-Laws, including all amendments through December 31, 2011. Incorporated herein by reference to Exhibit 3.2 of GP Strategies Corporation’s Form 8-K filed on January 3, 2012.

10.1 Third Amended and Restated Financing and Security Agreement, dated April 30, 2012, by and between GP Strategies Corporation as Borrower and Wells Fargo Bank, National Association, as Lender. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 10-Q for the quarter ended March 31, 2012.

89

10.2 GP Strategies Corporation 2011 Stock Incentive Plan. Incorporated herein by reference to Appendix B of GP Strategies Corporation’s Definitive Proxy Statement filed on November 1, 2011.

10.3 1973 Non-Qualified Stock Option Plan of GP Strategies Corporation, as amended on December 28, 2006. Incorporated by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 10-K for the year ended December 31, 2006.

10.4 GP Strategies Corporation 2003 Incentive Stock Plan. Incorporated herein by reference to Exhibit 4 of GP Strategies Corporation’s Form 10-Q for the quarter ended September 30, 2003.

10.5 Employment Agreement, dated as of July 1, 1999, between GP Strategies Corporation’s and Scott N. Greenberg. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 10-Q for the quarter ended September 30, 1999.

10.6 Amendment, dated January 21, 2005, to Employment Agreement dated as of July 1, 1999 between GP Strategies Corporation and Scott N. Greenberg. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 8-K filed on January 25, 2005.

10.7 Amendment, dated June 20, 2007, to Employment Agreement dated as of July 1, 1999 between GP Strategies Corporation and Scott N. Greenberg. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 8-K filed on June 26, 2007.

10.8 Amendment, dated December 30, 2008, to Employment Agreement by and between GP Strategies Corporation and Scott N. Greenberg dated July 1, 1999. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 8-K filed on January 6, 2009.

10.9 Amendment, dated December 30, 2009, to Employment Agreement by and between GP Strategies Corporation and Scott N. Greenberg dated July 1, 1999. Incorporated herein by reference to Exhibit 10.3 to GP Strategies Corporation’s Form 8-K filed December 31, 2009.

10.10 Amendment, dated December 30, 2011, to Employment Agreement dated as of July 1, 1999 between General Physics Corporation and Douglas E. Sharp. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 8-K filed on January 3, 2012.

10.11 Employment Agreement, dated as of July 1, 1999, between General Physics Corporation and Douglas E. Sharp. Incorporated herein by reference to Exhibit 10.11 of GP Strategies Corporation’s Form 10-K for the year ended December 31, 2003.

10.12 Amendment, dated January 21, 2005, to Employment Agreement dated as of July 1, 1999 between General Physics Corporation and Douglas E. Sharp. Incorporated herein by reference to Exhibit 10.2 of GP Strategies Corporation’s Form 8-K filed on January 25, 2005.

10.13 Amendment, dated June 20, 2007, to Employment Agreement dated as of July 1, 1999 between General Physics Corporation and Douglas E. Sharp. Incorporated herein by reference to Exhibit 10.2 of GP Strategies Corporation’s Form 8-K filed on June 26, 2007.

10.14 Amendment, dated December 30, 2008, to Employment Agreement by and between General Physics Corporation and Douglas Sharp dated July 1, 1999. Incorporated herein by reference to Exhibit 10.2 of GP Strategies Corporation’s Form 8-K filed on January 6, 2009.

10.15 Amendment, dated December 30, 2009, to Employment Agreement by and between General Physics Corporation and Douglas Sharp dated July 1, 1999. Incorporated herein by reference to Exhibit 10.4 to GP Strategies Corporation’s Form 8-K filed December 31, 2009.

10.16 Amendment, dated December 30, 2011, to Employment Agreement dated as of July 1, 1999 between General Physics Corporation and Douglas E. Sharp. Incorporated herein by reference to Exhibit 10.3 of GP Strategies Corporation’s Form 8-K filed on January 3, 2012.

10.17 Form of Employment Agreement between General Physics Corporation and certain of its executive vice presidents. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 8-K filed on October 4, 2007.

90

10.18 Form of Employment Agreement between General Physics Corporation and certain of its senior vice presidents. Incorporated herein by reference to Exhibit 10.4 of GP Strategies Corporation’s Form 10-Q for the quarter ended September 30, 2007.

10.19 Amendment, dated December 30, 2011, to Form of Employment Agreement between General Physics Corporation and certain of its executive officers. Incorporated herein by reference to Exhibit 10.3 of GP Strategies Corporation’s Form 8-K filed on January 3, 2012.

10.20 Form of Non-Qualified Stock Option Agreement between GP Strategies Corporation and certain officers, dated June 26, 2007. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 10-Q for the quarter ended June 30, 2007.

10.21 Form of Stock Unit Agreement between GP Strategies Corporation and certain officers, dated November 7, 2008. Incorporated herein by reference to Exhibit 10.15 of GP Strategies Corporation’s Form 10-K for the year ended December 31, 2008.

10.22 Form of Non-Qualified Stock Option Agreement between GP Strategies Corporation and certain officers, dated January 21, 2010. Incorporated herein by reference to Exhibit 10.23 to GP Strategies Corporation’s Form 10-K for the year ended December 31, 2009.

10.23 Lease Agreement dated as of July 5, 2002 between General Physics Corporation and Riggs Company. Incorporated herein by reference to Exhibit 10.36 to GP Strategies Corporation’s Form 10-K for the year ended December 31, 2002.

10.24 Securities Purchase Agreement, dated as of December 30, 2009, between GP Strategies Corporation and Sagard Capital Partners, L.P. Incorporated herein by reference to Exhibit 10.1 to GP Strategies Corporation’s Form 8-K filed December 31, 2009.

10.25 Amendment, dated December 30, 2011, to Securities Purchase Agreement, dated as of December 30, 2009, between GP Strategies Corporation and Sagard Capital Partners, L.P. Incorporated herein by reference to Exhibit 10.4 of GP Strategies Corporation’s Form 8-K filed on January 3, 2012.

10.26 Registration Rights Agreement, dated as of December 30, 2009, between GP Strategies Corporation and Sagard Capital Partners, L.P. Incorporated herein by reference to Exhibit 10.2 to GP Strategies Corporation’s Form 8-K filed December 31, 2009.

10.27 Code of Ethics Policy. Incorporated herein by reference to Exhibit 14.1 of GP Strategies Corporation’s Form 10-K for the year ended December 31, 2003.

10.28 Form of Indemnification Agreement. Incorporated herein by reference to Exhibit 10.1 of GP Strategies Corporation’s Form 8-K dated December 23, 2005.

21 Subsidiaries of GP Strategies Corporation*

23 Consent of KPMG LLP, Independent Registered Public Accounting Firm*

31.1 Certification of Chief Executive Officer*

31.2 Certification of Chief Financial Officer*

32.1 Certification Pursuant to Section 18 U.S.C. Section 1350*

101 The following materials from GP Strategies Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.*

* Filed herewith.

91

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GP STRATEGIES CORPORATION
Dated: February 26, 2013	By	/s/ Scott N. Greenberg
		Scott N. Greenberg
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signatures	Title	Date
/s/ Scott N. Greenberg
Scott N. Greenberg	Chief Executive Officer (Principal Executive Officer and Director)	February 26, 2013
/s/ Sharon Esposito-Mayer
Sharon Esposito-Mayer	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 26, 2013
/s/ Harvey P. Eisen
Harvey P. Eisen	Chairman of the Board of Directors	February 26, 2013
/s/ Daniel M. Friedberg
Daniel M. Friedberg	Director	February 26, 2013
/s/ Marshall S. Geller
Marshall S. Geller	Director	February 26, 2013
/s/ Sue W. Kelly
Sue W. Kelly	Director	February 26, 2013
/s/ Richard C. Pfenniger, Jr.
Richard C. Pfenniger, Jr.	Director	February 26, 2013
/s/ A. Marvin Strait
A. Marvin Strait	Director	February 26, 2013
/s/ Gene A. Washington
Gene A. Washington	Director	February 26, 2013

92

EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

Name	Jurisdiction of Incorporation	Doing Business As
General Physics (UK) Ltd.	United Kingdom	General Physics

The company has additional subsidiaries, which considered in the aggregate or as a single subsidiary, do not constitute a significant subsidiary pursuant to Rule 1-02(w) of Regulation S-X.

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Board of Directors

GP Strategies Corporation:

We consent to the incorporation by reference in the registration statements (Nos. 333-178892 and 333-123949) on Form S-8 and registration statements (Nos. 333-169603, 333-97531 and 333-110611) on Form S-3 of GP Strategies Corporation of our reports dated February 26, 2013, with respect to the consolidated balance sheets of GP Strategies Corporation and subsidiaries, as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012, and the effectiveness of internal control over financial reporting as of December 31, 2012, which reports appear in the December 31, 2012 annual report on Form 10-K of GP Strategies Corporation.

/s/ KPMG LLP

Baltimore, Maryland

February 26, 2013

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Scott N. Greenberg, certify that:

1. I have reviewed this annual report on Form 10-K of GP Strategies Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2013

/s/ Scott N. Greenberg

Scott N. Greenberg

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Sharon Esposito-Mayer, certify that:

1. I have reviewed this annual report on Form 10-K of GP Strategies Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2013

/s/ Sharon Esposito-Mayer

Sharon Esposito-Mayer

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of GP Strategies Corporation (the “Company”) for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1)         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 26, 2013

/s/ Scott N. Greenberg	/s/ Sharon Esposito-Mayer
Scott N. Greenberg	Sharon Esposito-Mayer
Chief Executive Officer	Executive Vice President and Chief Financial Officer

XML

Acquisitions (Details) (USD $) In Thousands, unless otherwise specified			12 Months Ended		12 Months Ended
	Dec. 31, 2012	Feb. 01, 2011	Dec. 31, 2012 Asentus [Member]	Jun. 29, 2012 Asentus [Member]	Dec. 31, 2012 Communication Consulting [Member]	Dec. 31, 2011 Communication Consulting [Member]	Dec. 31, 2012 Ultra Training [Member]	Dec. 31, 2011 Ultra Training [Member]	Dec. 31, 2012 Rwd Technologies, Llc [Member]	Dec. 31, 2011 Rwd Technologies, Llc [Member]	Dec. 31, 2012 Beneast Training [Member]	Dec. 31, 2011 Beneast Training [Member]	Dec. 31, 2010 Marton House [Member]	Dec. 31, 2010 Bath Consulting [Member]	Dec. 31, 2010 Academy Of Training Ltd [Member]	Dec. 31, 2012 Information Horizons [Member]	Dec. 31, 2012 Rovsing Dynamics [Member]	Dec. 31, 2012 Blessing White [Member]	Oct. 02, 2012 Blessing White [Member]
Acquisition date			Jun. 29, 2012		Feb. 01, 2011	Feb. 01, 2011	Apr. 01, 2012	Apr. 01, 2011	Apr. 15, 2011	Apr. 15, 2011	Aug. 01, 2011	Aug. 01, 2011	Apr. 01, 2010	Nov. 01, 2010	Dec. 01, 2010	May 01, 2012	Sep. 17, 2012	Oct. 01, 2012
Cash purchase price	$ 317		$ 1,417	$ 1,100		$ 1,505		$ 3,420		$ 25,760		$ 6,771	$ 2,752	$ 1,353	$ 1,119	$ 531	$ 720	$ 10,762
Fair value of contingent consideration			765			112		0		0		0	1,614	939	133	0	0	0
Estimated working capital adjustment			0													0	0	(769)
Total purchase price			2,182	1,417		1,617		3,420		25,760		6,771	4,366	2,292	1,252	531	720	9,993	10,762
Purchase price allocation:
Cash			396			0		347		81		2,236	5	106	52	0	20	830
Accounts receivable			1,970			0		340		13,667		375	1,441	945	380	0	0	2,462
Other assets			411			0		188		2,261		104	520	102	194	0	898	192
Property, plant and equipment			46			16		42		573		192	25	34	73	26	5	76
Intangible assets		390	443			390		1,412		3,726		2,706	1,044	486	303	505	775	3,280
Goodwill			1,931			1,211		2,336		13,059		3,790	3,136	1,518	905	0	340	6,295
Total assets			5,197			1,617		4,665		33,367		9,403	6,171	3,191	1,907	531	2,038	13,135
Accounts payable and accrued expenses			2,708			0		878		6,299		1,956	1,105	763	536	0	428	1,548
Billings in excess of costs and estimated earnings on uncompleted contracts			221			0		0		1,308		0	408	0	26	0	890	282
Deferred tax liability			86			0		367		0		676	292	136	93	0	0	1,312
Total liabilities			3,015			0		1,245		7,607		2,632	1,805	899	655	0	1,318	3,142
Net assets acquired			$ 2,182			$ 1,617		$ 3,420		$ 25,760		$ 6,771	$ 4,366	$ 2,292	$ 1,252	$ 531	$ 720	$ 9,993

XML

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income before income taxes:
Domestic	$ 27,827	$ 21,976	$ 17,452
Foreign	7,975	6,415	3,400
Total income before income taxes	35,802	28,391	20,852
Current:
Federal	7,846	6,869	4,746
State and local	1,653	1,750	1,111
Foreign	2,899	1,765	1,328
Total current	12,398	10,384	7,185
Deferred:
Federal	856	310	910
State and local	236	48	133
Foreign	(376)	(211)	(108)
Total deferred	716	147	935
Total income tax expense	$ 13,114	$ 10,531	$ 8,120

XML

Inventories (Details Textual) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Inventory, Net	$ 654,000	$ 178,000

XML

Related Party Transactions (Details Textual) (Sagard [Member])	1 Months Ended
	Jan. 31, 2012
Sagard [Member]
Common Stock Privately Purchased	350,000

XML

Income Taxes (Details 1)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Federal income tax rate	35.00%	35.00%	35.00%
State and local taxes net of federal benefit	3.40%	4.10%	3.80%
Foreign taxes	(0.10%)	(1.20%)	2.20%
Permanent differences	1.90%	2.10%	(0.60%)
Valuation allowance adjustments	0.00%	0.10%	(0.50%)
Reduction of uncertain tax position liabilities	(4.50%)	(3.10%)	0.00%
Other	0.90%	0.10%	(1.00%)
Effective tax rate	36.60%	37.10%	38.90%

XML

Goodwill & Other Intangible Assets (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years 10 months 24 days
Amortization of Intangible Assets	$ 4,598,000	$ 3,418,000	$ 2,256,000

XML

Commitments, Guarantees, and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Minimum rentals under long-term operating leases are as follows (in thousands):

	Real		Machinery and
	property		equipment		Total
2013	$	5,722	$	1,056	$	6,778
2014		3,918		574		4,492
2015		3,159		238		3,397
2016		2,752		22		2,774
2017		2,304		—		2,304
Thereafter		1,792		—		1,792
Total	$	19,647	$	1,890	$	21,537

XML

Quarterly Information (unaudited) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenue	$ 105,985	$ 99,671	$ 102,311	$ 93,605	$ 93,892	$ 88,948	$ 86,034	$ 64,293	$ 401,572	$ 333,167	$ 259,926
Gross profit	19,425	17,929	19,005	15,612	16,266	14,865	14,711	10,792	71,971	56,634	42,690
Net income	$ 6,137	$ 6,183	$ 5,984	$ 4,384	$ 5,940	$ 4,619	$ 4,711	$ 2,590	$ 22,688	$ 17,860	$ 12,732
Earnings per share:
Basic (In Dollar per share)	$ 0.32	$ 0.33	$ 0.32	$ 0.23	$ 0.32	$ 0.25	$ 0.25	$ 0.14	$ 1.20	$ 0.95	$ 0.68
Diluted (In Dollar per share)	$ 0.32	$ 0.32	$ 0.31	$ 0.23	$ 0.31	$ 0.24	$ 0.25	$ 0.14	$ 1.18	$ 0.94	$ 0.68

XML

Income Taxes (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets:
Allowance for doubtful accounts	$ 492	$ 380
Accrued liabilities	1,131	1,363
Stock-based compensation expense	499	1,174
Net federal, state and foreign operating loss carryforwards	288	465
Deferred tax assets	2,410	3,382
Deferred tax liabilities:
Intangible assets, property and equipment, principally due to difference in depreciation and amortization	6,990	5,709
Net deferred tax liabilities	(4,580)	(2,327)
Less valuation allowance	(263)	(326)
Net deferred tax liabilities, net of valuation allowance	$ (4,843)	$ (2,653)

XML

Commitments, Guarantees, and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
2013	$ 6,778
2014	4,492
2015	3,397
2016	2,774
2017	2,304
Thereafter	1,792
Total	21,537
Real Property [Member]
2013	5,722
2014	3,918
2015	3,159
2016	2,752
2017	2,304
Thereafter	1,792
Total	19,647
Machinery and Equipment [Member]
2013	1,056
2014	574
2015	238
2016	22
2017	0
Thereafter	0
Total	$ 1,890

XML

Description of Business and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Activity in our allowance for doubtful accounts was comprised of the following for the periods indicated:

	Year ended December 31,
	2012			2011			2010
	(In thousands)
Beginning balance	$	1,015		$	701		$	566
Additions		782			601			139
Deductions		(41	)		(287	)		(4	)
Ending balance	$	1,756		$	1,015		$	701

Schedule Of Depreciation [Table Text Block]

Depreciation of property, plant and equipment is recognized on a straight-line basis over the following estimated useful lives:

Class of assets	Useful life
Buildings and improvements	5 to 40 years
Machinery, equipment, and furniture and fixtures	3 to 10 years
Leasehold improvements	Shorter of asset life or term of lease

Schedule Of Non-Dilutive Instruments and Dilutive Common Stock Equivalents [Table Text Block]

The following table presents instruments which were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the weighted average dilutive common stock equivalent shares which were included in the computation of diluted EPS:

	2012		2011		2010
	(In thousands)
Non-dilutive instruments		64		115		1,299
Dilutive common stock equivalents		319		244		108

XML

Property, Plant and Equipment (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Depreciation	$ 2,636,000	$ 2,146,000	$ 1,577,000

XML

Acquisitions (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Liability as of Dec. 31, 2011	$ 3,278
2012 Additions (Payments)	(1,100)
Change in Fair Value of Contingent Consideration	789
Foreign Currency Translation	117
Liability as of Dec.31, 2012	3,084
Milsom [Member]
Liability as of Dec. 31, 2011	682
2012 Additions (Payments)	(437)
Change in Fair Value of Contingent Consideration	44
Foreign Currency Translation	13
Liability as of Dec.31, 2012	302
Option Six [Member]
Liability as of Dec. 31, 2011	800
2012 Additions (Payments)	(800)
Change in Fair Value of Contingent Consideration	0
Foreign Currency Translation	0
Liability as of Dec.31, 2012	0
Marton House [Member]
Liability as of Dec. 31, 2011	311
2012 Additions (Payments)	0
Change in Fair Value of Contingent Consideration	452
Foreign Currency Translation	11
Liability as of Dec.31, 2012	774
Bath Consulting [Member]
Liability as of Dec. 31, 2011	1,197
2012 Additions (Payments)	(350)
Change in Fair Value of Contingent Consideration	557
Foreign Currency Translation	60
Liability as of Dec.31, 2012	1,464
Academy Of Training Ltd [Member]
Liability as of Dec. 31, 2011	49
2012 Additions (Payments)	(78)
Change in Fair Value of Contingent Consideration	29
Foreign Currency Translation	0
Liability as of Dec.31, 2012	0
Asentus [Member]
Liability as of Dec. 31, 2011	0
2012 Additions (Payments)	765
Change in Fair Value of Contingent Consideration	(251)
Foreign Currency Translation	30
Liability as of Dec.31, 2012	544
Communication Consulting [Member]
Liability as of Dec. 31, 2011	239
2012 Additions (Payments)	(200)
Change in Fair Value of Contingent Consideration	(42)
Foreign Currency Translation	3
Liability as of Dec.31, 2012	$ 0

XML

Description of Business and Significant Accounting Policies (Details 2) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Non-dilutive instruments	64	115	1,299
Dilutive common stock equivalents	319	244	108

XML

Accounts Payable and Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Trade accounts payable	$ 11,061	$ 10,481
Accrued salaries, vacation and benefits	16,463	14,517
Other accrued expenses	17,393	13,075
Accrued contingent consideration	2,540	2,539
Negative cash book balance	0	1,888
Accounts payable and accrued expenses	$ 47,457	$ 42,500

XML

Business Segments (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Property, Plant and Equipment, Additions	$ 2,536	$ 3,975	$ 1,531
Depreciation and amortization	7,971	6,187	4,230
Learning Solutions [Member]
Property, Plant and Equipment, Additions	1,004	1,116	380
Depreciation and amortization	3,794	2,695	1,824
Professional and Technical Services [Member]
Property, Plant and Equipment, Additions	299	1,068	336
Depreciation and amortization	439	294	327
Sandy Training and Marketing [Member]
Property, Plant and Equipment, Additions	38	6	9
Depreciation and amortization	428	424	478
Energy Services [Member]
Property, Plant and Equipment, Additions	203	48	31
Depreciation and amortization	357	353	386
Corporate and Other [Member]
Property, Plant and Equipment, Additions	931	1,576	775
Depreciation and amortization	1,851	1,550	1,215
Performance Readiness Group [Member]
Property, Plant and Equipment, Additions	61	161	0
Depreciation and amortization	$ 1,102	$ 871	$ 0

XML

Stock-Based Compensation (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Number of options granted	54,500	157,500	500,000
Exercise price	$ 17.57	$ 13.18	$ 7.52
Vesting term	4 years 6 months	5 years	5 years
Contractual term	5 years 6 months	6 years	6 years
Grant-date fair value	$ 6.80	$ 4.63	$ 3.15
Black-Scholes assumptions:
Expected term	4 years 2 months 12 days	4 years 6 months	4 years 7 months 6 days
Expected stock price volatility	48.30%	39.30%	47.60%
Risk-free interest rate	0.61%	1.82%	2.15%
Expected dividend yield	0.00%	0.00%	0.00%

XML

Goodwill & Other Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
2013	$ 4,866
2014	4,440
2015	3,045
2016	2,051
2017	988
Thereafter	482
Total	$ 15,872	$ 15,122

XML

Description of Business and Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Business Description and Accounting Policies [Text Block]

(1) Description of Business and Significant Accounting Policies

Business

GP Strategies Corporation is a global performance improvement solutions provider of training, e-Learning solutions, management consulting and engineering services. References in this report to “GP Strategies,” the “Company,” “we” and “our” are to GP Strategies Corporation and its subsidiaries, collectively.

FASB Codification

We follow generally accepted accounting principles (“GAAP”) set by the Financial Accounting Standards Board (“FASB”). References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification,^™ sometimes referred to as ASC.

Basis of Consolidation

The consolidated financial statements include the operations of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Significant Customers & Concentration of Credit Risk

We have a market concentration of revenue in the automotive sector. Revenue from the automotive industry accounted for approximately 17%, 17% and 18% of our consolidated revenue for the years ended December 31, 2012, 2011 and 2010, respectively. We also have a concentration of revenue from the United States government. For the years ended December 31, 2012, 2011 and 2010, sales to the United States government and its agencies represented approximately 12%, 14% and 22%, respectively, of our consolidated revenue. Revenue was derived from many separate contracts with a variety of government agencies that are regarded by us as separate customers. No single customer accounted for more than 10% of our consolidated revenue in 2012. Accounts receivable from a single automotive customer totaled $8,986,000 as of December 31, 2012 and $6,329,000 as of December 31, 2011, accounting for approximately 11% and 9% of our total accounts receivable as of those dates, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term highly liquid investments with original maturities of three months or less. Outstanding checks which have been issued but not presented to the banks for payment in excess of amounts on deposit may create negative book cash balances. We transfer cash on an as-needed basis to fund these items as they clear the bank in subsequent periods. Such negative cash balances are included in accounts payable and accrued expenses and totaled $0 and $1,888,000 as of December 31, 2012 and 2011, respectively. Changes in negative book cash balances from period to period are reported as a financing activity in the consolidated statement of cash flows.

Allowance for Doubtful Accounts Receivable

Trade accounts receivable are recorded at invoiced amounts. We evaluate the collectability of trade accounts receivable based on a combination of factors. When aware that a specific customer may be unable to meet its financial obligations to us, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position, we evaluate the need to record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for all other customers based on a variety of factors, including the length of time the receivables are past due, historical collection experience and trends of past due accounts, write-offs and specific identification and review of past due accounts. Actual collections of trade receivables could differ from management’s estimates due to changes in future economic or industry conditions or specific customers’ financial conditions.

Activity in our allowance for doubtful accounts was comprised of the following for the periods indicated:

	Year ended December 31,
	2012			2011			2010
	(In thousands)
Beginning balance	$	1,015		$	701		$	566
Additions		782			601			139
Deductions		(41	)		(287	)		(4	)
Ending balance	$	1,756		$	1,015		$	701

Foreign Currency Translation

The functional currency of our international operations is the respective local currency. The translation of the foreign currency into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted average exchange rates prevailing during the year. The unrealized gains and losses resulting from such translation are included as a component of comprehensive income.

Revenue Recognition

We provide services under time-and-materials, cost-reimbursable, and fixed price (including fixed-fee per transaction) contracts to both government and commercial customers. Each contract has different terms based on the scope, deliverables and complexity of the engagement, requiring us to make judgments and estimates about recognizing revenue. Revenue is recognized as services are performed.

Under time-and-materials contracts, as well as certain government cost-reimbursable and certain fixed price contracts, the contractual billing schedules are based on the specified level of resources we are obligated to provide. As a result, for these “level-of-effort” contracts, the contractual billing amount for the period is a measure of performance and, therefore, revenue is recognized in that amount.

Revenue under government fixed price contracts is recognized using the percentage-of-completion method. Under the percentage-of-completion method, management estimates the percentage-of-completion based upon costs incurred as a percentage of the total estimated costs.

For commercial fixed price contracts which typically involve a discrete project, such as development of training content and materials, design of training processes, software implementation, or engineering projects, the contractual billing schedules are not based on the specified level of resources we are obligated to provide. These discrete projects generally do not contain milestones or other reliable measures of performance. As a result, revenue on these arrangements is recognized using a percentage-of-completion method based on the relationship of costs incurred to total estimated costs expected to be incurred over the term of the contract. We believe this methodology is a reasonable measure of proportional performance since performance primarily involves personnel costs and services provided to the customer throughout the course of the projects through regular communications of progress toward completion and other project deliverables. In addition, the customer typically is required to pay us for the proportionate amount of work and cost incurred in the event of contract termination.

When total cost estimates exceed revenues, the estimated losses are recognized immediately. The use of the percentage-of-completion method requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the project, the nature and complexity of the work to be performed, and anticipated changes in estimated salaries and other costs. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. When revisions in estimated contract revenues and costs are determined, such adjustments are recorded in the period in which they are first identified.

For certain commercial fixed-fee per transaction contracts, such as providing training courses, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts.

For certain fixed-fee per transaction and fixed price contracts in which the output of the arrangement is measurable, such as for the shipping of publications and print materials, revenue is recognized when the deliverable is met and the product is delivered based on the output method of performance. The customer is required to pay for the cost incurred in the event of contract termination.

Certain of our fixed price commercial contracts contain revenue arrangements with multiple deliverables. Revenue arrangements with multiple deliverables are evaluated to determine if the deliverables can be divided into more than one unit of accounting. For contracts determined to have more than one unit of accounting, we recognize revenue for each deliverable based on the revenue recognition policies discussed above; that is, we recognize revenue in accordance with work performed and costs incurred, with the fee being allocated proportionately over the service period. Within each multiple deliverable project, there is objective and reliable fair value across all units of the arrangement, as discounts are not offered or applied to one deliverable versus another, and the rates bid across all deliverables are consistent.

As part of our on-going operations to provide services to our customers, incidental expenses, which are commonly referred to as “out-of-pocket” expenses, are billed to customers, either directly as a pass-through cost or indirectly as a cost estimated in proposing on fixed price contracts. Out-of-pocket expenses include expenses such as airfare, mileage, hotel stays, out-of-town meals and telecommunication charges. Our policy provides for these expenses to be recorded as both revenue and direct cost of services.

In connection with the delivery of products, primarily for publications delivered by our Sandy Training & Marketing segment, we incur shipping and handling costs which are billed to customers directly as a pass-through cost. Our policy provides for these expenses to be recorded as both revenue and direct cost of revenue.

Contract Related Assets and Liabilities

Costs and estimated earnings in excess of billings on uncompleted contracts in the accompanying consolidated balance sheets represent unbilled amounts earned and reimbursable under contracts in progress. These amounts become billable according to the contract terms, which usually consider the passage of time, achievement of milestones or completion of the project. Generally, such unbilled amounts will be billed and collected over the next twelve months.

Billings in excess of costs and estimated earnings on uncompleted contracts in the accompanying consolidated balance sheets represent advanced billings to clients on contracts in advance of work performed. Generally, such amounts will be earned and recognized in revenue over the next twelve months.

Comprehensive Income

Comprehensive income consists of net income and foreign currency translation adjustments.

Inventories

Inventories are stated at lower of cost or market. Provision is made to reduce excess and obsolete inventories to their estimated net realizable value.  In assessing the realization of inventories, we make judgments regarding future demand requirements and compare these estimates with current and committed inventory levels.  Inventory requirements may change based on projected customer demand, training curriculum life-cycle changes, longer-or shorter-than-expected usage periods, and other factors that could affect the valuation of our inventories.

Property, Plant and Equipment

Property, plant and equipment are carried at cost (or fair value at acquisition date for assets obtained through business combinations). Major additions and improvements are capitalized, while maintenance and repairs which do not extend the lives of the assets are expensed as incurred. Gain or loss on the disposition of property, plant and equipment is recognized in operations when realized.

Depreciation of property, plant and equipment is recognized on a straight-line basis over the following estimated useful lives:

Class of assets	Useful life
Buildings and improvements	5 to 40 years
Machinery, equipment, and furniture and fixtures	3 to 10 years
Leasehold improvements	Shorter of asset life or term of lease

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.

Goodwill and Intangible Assets

Our intangible assets include amounts recognized in connection with acquisitions, including customer relationships, technology, intellectual property and tradenames. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Except for goodwill, we do not have any intangible assets with indefinite useful lives.

Goodwill represents the excess of costs over fair value of assets of businesses acquired. We review our goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We test goodwill at the reporting unit level.

During the year ended December 31, 2012, we adopted Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount.
 

If it is determined as a result of the qualitative assessment permitted by ASU 2011-08, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step impairment test is required. In the first step, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit’s assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value allocated to goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference.

Under the two-step impairment test, we determine the fair value of our reporting units using both an income approach and a market approach, and weigh both approaches to determine the fair value of each reporting unit. Under the income approach, we perform a discounted cash flow analysis which incorporates management’s cash flow projections over a five-year period and a terminal value is calculated by applying a capitalization rate to terminal year projections based on an estimated long-term growth rate. The five-year projected cash flows and calculated terminal value are discounted using a weighted average cost of capital (“WACC”) which takes into account the costs of debt and equity. The cost of equity is based on the risk-free interest rate, equity risk premium, industry and size equity premiums and any additional market equity risk premiums as deemed appropriate for each reporting unit. To arrive at a fair value for each reporting unit, the terminal value is discounted by the WACC and added to the present value of the estimated cash flows over the discrete five-year period. There are a number of other variables which impact the projected cash flows, such as expected revenue growth and profitability levels, working capital requirements, capital expenditures and related depreciation and amortization. Under the market approach, we perform a comparable public company analysis and apply revenue and earnings multiples from the identified set of companies to the reporting unit’s actual and forecasted financial performance to determine the fair value of each reporting unit. We evaluate the reasonableness of the fair value calculations of our reporting units by reconciling the total of the fair values of all of our reporting units to our total market capitalization, and adjusting for an appropriate control premium.   In addition, we make certain judgments in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

For our annual goodwill impairment test as of December 31, 2012, we performed a qualitative assessment as permitted by ASU 2011-08 for all of our reporting units and determined that it was more likely than not that the fair values of each of our reporting units exceeded their respective carrying values. For our annual goodwill impairment tests as of December 31, 2011 and 2010, we performed step one of the two-step impairment test and determined that the estimated fair values of each of our reporting units exceeded their respective carrying values, indicating the underlying goodwill of each unit was not impaired. Each of our reporting units had a substantial excess of fair value over their respective carrying values as of December 31, 2011 and 2010.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present.
  

Contingent Consideration for Business Acquisitions  

Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Other Assets

Other assets primarily include certain software development and implementation costs, an investment in a joint venture and other assets obtained to fulfill customer related contract obligations. We capitalize the cost of internal-use software in accordance with ASC Topic 350-40, Internal-Use Software. These costs consist of payments made to third parties for software development and implementation and are amortized using the straight-line method over their estimated useful lives, typically three to five years. We account for a 5% interest in a joint venture partnership under the equity method of accounting because significant influence exists due to certain factors, including representation on the partnership’s Management Board and voting rights.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense.

Earnings per Share

Basic earnings per share (“EPS”) are computed by dividing earnings by the weighted average number of common shares outstanding during the periods. Diluted EPS reflects the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Our dilutive common stock equivalent shares consist of stock options and restricted stock units outstanding under our stock-based incentive plans and are computed under the treasury stock method, using the average market price during the period. The following table presents instruments which were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the weighted average dilutive common stock equivalent shares which were included in the computation of diluted EPS:

	2012		2011		2010
	(In thousands)
Non-dilutive instruments		64		115		1,299
Dilutive common stock equivalents		319		244		108

Stock-Based Compensation

Pursuant to our stock-based incentive plans which are described more fully in Note 10, we grant stock options, restricted stock, stock units, and equity to officers, employees, and members of the Board of Directors. We compute compensation expense for all equity-based compensation awards issued to employees using the fair-value measurement method. We recognize compensation expense on a straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We apply a forfeiture estimate to compensation expense recognized for awards that are expected to vest during the requisite service period, and revise that estimate if subsequent information indicates that the actual forfeitures will differ from the estimate. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We do not capitalize any portion of our stock-based compensation.

We estimate the fair value of our stock options on the date of grant using the Black-Scholes option pricing model, which requires various assumptions such as expected term, expected stock price volatility and risk-free interest rate. We estimate the expected term of stock options granted taking into consideration historical data related to stock option exercises. We use historical stock price data in order to estimate the expected volatility factor of stock options granted. The risk-free interest rate for the periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate the estimates used, including but not limited to those related to revenue recognition, the allowance for doubtful accounts receivable, impairments of goodwill and other intangible assets, valuation of intangible assets acquired and contingent consideration liabilities assumed in business acquisitions, valuation of stock-based compensation awards and income taxes. Actual results could differ from these estimates.

Fair Value Estimates

ASC Topic 820, Fair Value Measurements and Disclosure (“Topic 820”), defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The guidance within Topic 820 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels as follows:

· Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets;

· Level 2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and

· Level 3 – unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.

The carrying value of financial instruments including cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate estimated market values because of short-term maturities and interest rates that approximate current rates. Our fair value measurements relate to goodwill, intangible assets and contingent consideration recognized in connection with acquisitions and are valued using Level 3 inputs.
 

Leases

We lease various office space, machinery and equipment under noncancelable operating leases which have minimum lease obligations. Several of the leases contain provisions for rent escalations based primarily on increases in real estate taxes and operating costs incurred by the lessor. Rent expense is recognized in the statement of operations as incurred except for escalating rents, which are expensed on a straight-line basis over the terms of the leases.

Legal Expenses

We are involved, from time to time, in litigation and proceedings arising out of the ordinary course of business. Costs for legal services rendered in the course of these proceedings are charged to expense as they are incurred.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Accounting Standards Adopted

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  The objective of ASU 2011-08 is to simplify how entities, both public and nonpublic, test goodwill for impairment.  These amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount.  The guidance in ASU 2011-08 is effective for annual and interim goodwill assessments performed for fiscal years beginning after December 15, 2011 and early adoption is permitted.  We implemented this accounting standard for our goodwill impairment testing as of December 31, 2012.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"), which requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The current option to present components of other comprehensive income as part of the statement of changes in stockholders' equity will be eliminated. Although the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under existing guidance. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011 and will be applied retrospectively. We adopted ASU 2011-05 in the first quarter of 2012 and have included two separate, but consecutive statements of operations and comprehensive income in this report. The adoption of ASU 2011-05 changed our financial statement presentation of comprehensive income but did not impact our net income, financial position or cash flows.

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Stock-Based Compensation (Details 3) (Restricted Stock Units (Rsus) [Member], USD $)	12 Months Ended
	Dec. 31, 2012
Restricted Stock Units (Rsus) [Member]
Outstanding and unvested, beginning of period	102,967
Granted	198,500
Vested	(85,351)
Forfeited	(5,124)
Outstanding and unvested, end of period	210,992
Restricted stock units expected to vest, shares	197,232
Outstanding and unvested, beginning of period, Weighted average grant date fair value	$ 6.43
Granted, Weighted average grant date fair value	$ 19.26
Vested, Weighted average grant date fair value	$ 6.53
Forfeited, Weighted average grant date fair value	$ 8.74
Outstanding and unvested, end of period, Weighted average grant date fair value	$ 18.40
Restricted stock units expected to vest, Weighted average grant date fair value	$ 18.49

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Acquisitions (Details Textual) (USD $)	0 Months Ended	1 Months Ended														1 Months Ended		1 Months Ended								1 Months Ended			1 Months Ended		1 Months Ended
	Apr. 15, 2011	Oct. 31, 2012	Dec. 31, 2012	Oct. 02, 2012	Dec. 31, 2011	Feb. 01, 2011	May 01, 2012 Information Horizons Limited [Member]	Dec. 31, 2012 Asentus [Member]	Jun. 29, 2012 Asentus [Member]	Jun. 29, 2012 Asentus [Member] Year One [Member]	Dec. 31, 2012 Asentus [Member] Year Two [Member]	Dec. 31, 2012 Rovsing Dynamics [Member]	Dec. 31, 2012 Blessing White [Member]	Oct. 02, 2012 Blessing White [Member]	Apr. 15, 2011 Rwd Technologies [Member]	Aug. 31, 2011 Beneast Training Ltd [Member]	Aug. 01, 2011 Beneast Training Ltd [Member]	Aug. 31, 2011 Van Hee [Member]	Aug. 01, 2011 Van Hee [Member]	Dec. 31, 2012 Performtech [Member]	Dec. 31, 2011 Performtech [Member]	Apr. 15, 2011 Customer Related Intangiable Asset [Member]	Apr. 02, 2011 Customer Related Intangiable Asset [Member]	Feb. 01, 2011 Customer Related Intangiable Asset [Member]	Feb. 01, 2011 Intellectual Property [Member]	Jun. 29, 2012 Intellectual Property [Member] Asentus [Member]	Oct. 02, 2012 Intellectual Property [Member] Blessing White [Member]	Apr. 15, 2011 Acquired Trade Name [Member]	Oct. 31, 2012 Acquired Trade Name [Member] Blessing White [Member]	Oct. 02, 2012 Acquired Trade Name [Member] Blessing White [Member]	Jun. 29, 2012 Software [Member] Asentus [Member]	May 31, 2012 Customer Relationships [Member] Information Horizons Limited [Member]	Jun. 29, 2012 Customer Relationships [Member] Asentus [Member]	Oct. 31, 2012 Customer Relationships [Member] Blessing White [Member]	Oct. 02, 2012 Customer Relationships [Member] Blessing White [Member]
Property, plant and equipment								$ 46,000				$ 5,000	$ 76,000				$ 2,706,000		$ 770,000
Intangible assets						390,000		443,000				775,000	3,280,000		3,726,000							2,935,000	1,412,000	160,000	230,000			791,000
Finite-Lived Intangible Asset, Useful Life	5 years 10 months 24 days	3 years														5 years		3 years								3 years			2 years		3 years	3 years	5 years	5 years
Working Capital																						2,220,000
Goodwill								1,931,000				340,000	6,295,000
Business Acquisition, Contingent Consideration, at Fair Value, Current										1,600,000
Acquisitions			8,566,000	90,000	20,711,000		505,000							3,280,000												118,000	1,238,000			191,000	775,000		325,000		1,761,000
Total purchase price								2,182,000	1,417,000			720,000	9,993,000	10,762,000
Business Acquisition Additional Contingent Consideration										3,700,000
Maximum contingent consideration due Total			7,418,000					3,700,000		3,700,000	2,100,000									2,540,000	2,539,000
Business acquisition contigent consideration, other long term liability			544,000		739,000
Cash purchase price paid at closing			$ 317,000					$ 1,417,000	$ 1,100,000			$ 720,000	$ 10,762,000									$ 27,980,000

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Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2012

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

Accounts payable and accrued expenses consisted of the following (in thousands):

	December 31,
	2012		2011
Trade accounts payable	$	11,061	$	10,481
Accrued salaries, vacation and benefits		16,463		14,517
Other accrued expenses		17,393		13,075
Accrued contingent consideration		2,540		2,539
Negative cash book balance		—		1,888
	$	47,457	$	42,500

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property, plant and equipment consisted of the following (in thousands):

	December 31,
	2012			2011
Machinery, equipment and vehicles	$	15,043		$	13,602
Furniture and fixtures		2,274			1,884
Leasehold improvements		1,058			928
Buildings		396			379
		18,771			16,793
Accumulated depreciation and amortization		(13,260	)		(11,231	)
	$	5,511		$	5,562

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Income Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Unrecognized tax benefits at beginning of the year	$ 1,418	$ 2,218	$ 2,218
Additions related to current year tax positions	0	0	0
Additions related to prior year tax positions	0	0	0
Settlements	0	0	0
Reductions due to lapse of statute of limitations	(1,418)	(800)	0
Unrecognized tax benefits at end of the year	$ 0	$ 1,418	$ 2,218

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Goodwill & Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Oct. 02, 2012
Goodwill	$ 108,755	$ 88,413
Accumulated impairment losses	(15,417)	(15,417)
Total	93,338	72,996
Acquisitions	8,566	20,711	90
Foreign currency translation	925	(277)
Other	(8)	(92)
Goodwill	118,238	108,755
Accumulated impairment losses	(15,417)	(15,417)
Total	102,821	93,338
Learning Solutions [Member]
Goodwill	47,149	41,115
Accumulated impairment losses	(2,079)	(2,079)
Total	45,070	39,036
Acquisitions	8,226	6,440
Foreign currency translation	903	(322)
Other	0	(84)
Goodwill	56,278	47,149
Accumulated impairment losses	(2,079)	(2,079)
Total	54,199	45,070
Professional and Technical Services [Member]
Goodwill	37,480	33,620
Accumulated impairment losses	(7,830)	(7,830)
Total	29,650	25,790
Acquisitions	0	3,823
Foreign currency translation	10	45
Other	(8)	(8)
Goodwill	37,482	37,480
Accumulated impairment losses	(7,830)	(7,830)
Total	29,652	29,650
Sandy Training and Marketing [Member]
Goodwill	6,161	5,508
Accumulated impairment losses	(5,508)	(5,508)
Total	653	0
Acquisitions	0	653
Foreign currency translation	0	0
Other	0	0
Goodwill	6,161	6,161
Accumulated impairment losses	(5,508)	(5,508)
Total	653	653
Energy Services [Member]
Goodwill	8,170	8,170
Accumulated impairment losses	0	0
Total	8,170	8,170
Acquisitions	340	0
Foreign currency translation	12	0
Other	0	0
Goodwill	8,522	8,170
Accumulated impairment losses	0	0
Total	8,522	8,170
Performance Readiness Group [Member]
Goodwill	9,795	0
Accumulated impairment losses	0	0
Total	9,795	0
Acquisitions	0	9,795
Foreign currency translation	0	0
Other	0	0
Goodwill	9,795	9,795
Accumulated impairment losses	0	0
Total	$ 9,795	$ 9,795

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

The components of income before income taxes and income tax expense for the years ended December 31, 2012, 2011 and 2010 are as follows (in thousands):

	Years ended December 31,
	2012			2011			2010
Income before income taxes:
Domestic	$	27,827		$	21,976		$	17,452
Foreign		7,975			6,415			3,400
Total income before income taxes	$	35,802		$	28,391		$	20,852
Income tax expense:
Current:
Federal	$	7,846		$	6,869		$	4,746
State and local		1,653			1,750			1,111
Foreign		2,899			1,765			1,328
Total current		12,398			10,384			7,185
Deferred:
Federal		856			310			910
State and local		236			48			133
Foreign		(376	)		(211	)		(108	)
Total deferred		716			147			935
Total income tax expense	$	13,114		$	10,531		$	8,120

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The difference between the expense for income tax expense computed at the statutory rate and the reported amount of income tax expense is as follows:

	December 31,
	2012			2011			2010
Federal income tax rate		35.0	%		35.0	%		35.0	%
State and local taxes net of federal benefit		3.4			4.1			3.8
Foreign taxes		(0.1	)		(1.2	)		2.2
Permanent differences		1.9			2.1			(0.6	)
Valuation allowance adjustments		—			0.1			(0.5	)
Reduction of uncertain tax position liabilities		(4.5	)		(3.1	)		—
Other		0.9			0.1			(1.0	)
Effective tax rate		36.6	%		37.1	%		38.9	%

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows (in thousands):

	Years ended December 31,
	2012			2011			2010
Unrecognized tax benefits at beginning of the year	$	1,418		$	2,218		$	2,218
Additions related to current year tax positions		—			—			—
Additions related to prior year tax positions		—			—			—
Settlements		—			—			—
Reductions due to lapse of statute of limitations		(1,418	)		(800	)		—
Unrecognized tax benefits at end of the year	$	—		$	1,418		$	2,218

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities that are included in the net deferred tax assets and liabilities are summarized as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Allowance for doubtful accounts	$	492		$	380
Accrued liabilities		1,131			1,363
Stock-based compensation expense		499			1,174
Net federal, state and foreign operating loss carryforwards		288			465
Deferred tax assets		2,410			3,382
Deferred tax liabilities:
Intangible assets, property and equipment, principally due to difference in depreciation and amortization		6,990			5,709
Net deferred tax liabilities		(4,580	)		(2,327	)
Less valuation allowance		(263	)		(326	)
Net deferred tax liabilities, net of valuation allowance	$	(4,843	)	$	(2,653	)

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

The following table summarizes the pre-tax stock-based compensation expense included in reported net income (in thousands):

	Years ended December 31,
	2012		2011		2010
Non-qualified stock options	$	711	$	963	$	794
Restricted stock units		717		650		584
Board of Director stock grants		363		379		279
Total	$	1,791	$	1,992	$	1,657

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Summarized information for our non-qualified stock options is as follows:

						Weighted
						average
				Weighted		remaining		Aggregate
	Number of			average		contractual		intrinsic
Stock Options	options			exercise price		term		value
Outstanding at December 31, 2011		1,441,370		$	9.93
Granted		54,500			17.57
Exercised		(812,340	)		10.80
Forfeited		(37,100	)		11.74
Expired		(21,730	)		4.65
Outstanding at December 31, 2012		624,700		$	9.54		3.37	$	6,942,000
Stock options expected to vest		610,500		$	9.55		3.37	$	6,774,000
Exercisable at December 31, 2012		188,200		$	8.49		2.90	$	2,288,000

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]

Summarized weighted average information for non-qualified stock options granted to certain key personnel during the years ended December 31, 2012, 2011 and 2010 is as follows:

	2012			2011			2010
Number of options granted		54,500			157,500			500,000
Exercise price	$	17.57		$	13.18		$	7.52
Vesting term		4.5 years			5 years			5 years
Contractual term		5.5 years			6 years			6 years
Grant-date fair value	$	6.80		$	4.63		$	3.15
Black-Scholes assumptions:
Expected term		4.2 years			4.5 years			4.6 years
Expected stock price volatility		48.3	%		39.3	%		47.6	%
Risk-free interest rate		0.61	%		1.82	%		2.15	%
Expected dividend yield		—	%		—	%		—	%

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

Summarized share information for our restricted stock units is as follows:

				Weighted
	Year ended			average
	December 31,			grant date
	2012			fair value
	(In shares)			(In dollars)
Outstanding and unvested, beginning of period		102,967		$	6.43
Granted		198,500			19.26
Vested		(85,351	)		6.53
Forfeited		(5,124	)		8.74
Outstanding and unvested, end of period		210,992		$	18.40
Restricted stock units expected to vest		197,232		$	18.49

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net income	$ 22,688	$ 17,860	$ 12,732
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on reversal of deferred rent liability	0	(1,041)	0
Income tax benefit on reduction of uncertain tax position liabilities	(1,602)	(891)	0
Loss (gain) on change in fair value of contingent consideration, net	789	(517)	(1,313)
Depreciation and amortization	7,971	6,187	4,230
Non-cash compensation expense	3,615	3,100	2,012
Deferred income taxes	716	147	935
Changes in other operating items, net of acquired amounts:
Accounts and other receivables	(11,262)	(4,955)	(13)
Costs and estimated earnings in excess of billings on uncompleted contracts	(1,256)	(701)	(1,771)
Prepaid expenses and other current assets	(1,227)	(1,599)	1,754
Accounts payable and accrued expenses	4,003	(216)	5,403
Billings in excess of costs and estimated earnings on uncompleted contracts	3,218	168	2,084
Income tax benefit of stock-based compensation	(2,034)	(131)	(129)
Contingent consideration payments in excess of fair value on acquisition date	(602)	(721)	0
Other	295	(491)	266
Net cash provided by operating activities	25,312	16,199	26,190
Cash flows from investing activities:
Additions to property, plant and equipment	(2,536)	(3,975)	(1,531)
Acquisitions, net of cash acquired	(12,184)	(36,077)	(5,121)
Other investing activities	0	(157)	0
Net cash used in investing activities	(14,720)	(40,209)	(6,652)
Cash flows from financing activities:
Contingent consideration payments	(1,263)	(1,238)	(775)
Change in negative cash book balance	(1,888)	1,883	5
Repurchases of common stock in the open market	(3,433)	(1,414)	(266)
Income tax benefit from stock-based compensation	2,034	131	129
Tax withholding payments for employee stock-based compensation in exchange for shares surrendered	(2,750)	(337)	(361)
Proceeds from issuance of common stock	284	355	39
Other financing activities	(126)	(8)	(141)
Net cash used in financing activities	(7,142)	(628)	(1,370)
Effect of exchange rate changes on cash and cash equivalents	160	(113)	(69)
Net change in cash and cash equivalents	3,610	(24,751)	18,099
Cash and cash equivalents at beginning of year	4,151	28,902	10,803
Cash and cash equivalents at end of year	7,761	4,151	28,902
Cash paid during the year for:
Interest	104	100	36
Income taxes	$ 12,532	$ 10,078	$ 5,570

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Business Segments (Tables)

12 Months Ended

Dec. 31, 2012

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income tax expense (in thousands):

	Years ended December 31,
	2012			2011			2010
Revenue:
Learning Solutions	$	161,455		$	130,392		$	118,922
Professional & Technical Services		87,844			85,285			70,893
Sandy Training & Marketing		70,243			54,604			47,153
Performance Readiness Solutions		55,794			40,079			—
Energy Services		26,236			22,807			22,958
	$	401,572		$	333,167		$	259,926
Operating income:
Learning Solutions	$	16,487		$	9,700		$	9,074
Professional & Technical Services		5,717			7,526			3,310
Sandy Training & Marketing		4,897			3,018			1,518
Performance Readiness Solutions		2,548			601			—
Energy Services		6,822			5,540			5,322
Gain on reversal of deferred rent liability		—			1,041			—
Gain (loss) on change in fair value of contingent consideration, net		(789	)		517			1,313
Operating income		35,682			27,943			20,537
Interest expense		(269	)		(209	)		(236	)
Other income		389			657			551
Income before income tax expense	$	35,802		$	28,391		$	20,852

Additional Information Relating To Business Segments [Table Text Block]

Additional information relating to our business segments is as follows (in thousands):

	December 31,
	2012		2011
Identifiable assets:
Learning Solutions	$	116,753	$	95,389
Professional & Technical Services		56,160		59,675
Sandy Training & Marketing		24,250		16,819
Performance Readiness Solutions		27,472		25,747
Energy Services		19,799		13,946
Total assets	$	244,434	$	211,576

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

Corporate and other assets which consist primarily of cash and cash equivalents, other assets, and deferred tax assets and liabilities are allocated to the segments based on their respective percentage of consolidated revenues.

	Years ended December 31,
	2012		2011		2010
Additions to property, plant and equipment:
Learning Solutions	$	1,004	$	1,116	$	380
Professional & Technical Services		299		1,068		336
Sandy Training & Marketing		38		6		9
Performance Readiness Solutions		61		161		—
Energy Services		203		48		31
Corporate and other		931		1,576		775
	$	2,536	$	3,975	$	1,531
Depreciation and amortization:
Learning Solutions	$	3,794	$	2,695	$	1,824
Professional & Technical Services		439		294		327
Sandy Training & Marketing		428		424		478
Performance Readiness Solutions		1,102		871		—
Energy Services		357		353		386
Corporate and other		1,851		1,550		1,215
	$	7,971	$	6,187	$	4,230

Assets [Member]

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

Information about our total assets in different geographic regions is as follows (in thousands):

	December 31,
	2012		2011
United States	$	188,596	$	165,482
United Kingdom		40,163		39,033
Other		15,675		7,061
	$	244,434	$	211,576

Revenue [Member]

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

Information about our revenue in different geographic regions, which are attributable to our wholly owned subsidiaries located in the United Kingdom, Canada, Netherlands, Denmark, Germany, France, Mexico, Colombia, Singapore, China and India is as follows (in thousands):

	Years ended December 31,
	2012		2011		2010
United States	$	323,867	$	274,010	$	214,194
United Kingdom		61,102		48,151		36,518
Other		16,603		11,006		9,214
	$	401,572	$	333,167	$	259,926

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Acquisitions (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenue	$ 105,985	$ 99,671	$ 102,311	$ 93,605	$ 93,892	$ 88,948	$ 86,034	$ 64,293	$ 401,572	$ 333,167	$ 259,926
Net income	6,137	6,183	5,984	4,384	5,940	4,619	4,711	2,590	22,688	17,860	12,732
Basic earnings per share	$ 0.32	$ 0.33	$ 0.32	$ 0.23	$ 0.32	$ 0.25	$ 0.25	$ 0.14	$ 1.20	$ 0.95	$ 0.68
Diluted earnings per share	$ 0.32	$ 0.32	$ 0.31	$ 0.23	$ 0.31	$ 0.24	$ 0.25	$ 0.14	$ 1.18	$ 0.94	$ 0.68
Rwd Technologies, Llc [Member]
Revenue										354,609	324,587
Net income										$ 18,605	$ 8,279
Basic earnings per share										$ 0.99	$ 0.44
Diluted earnings per share										$ 0.98	$ 0.44

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Employee Benefit Plan (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Defined Contribution Plan Employer Discretionary Contribution Shares	107,728	93,472	48,440
Defined Contribution Plan Employer Discretionary Contribution Shares Value	$ 1,835,000	$ 1,108,000	$ 440,000
Defined Contribution Plan, Employer Discretionary Contribution Amount	150,000	334,000	160,000
Defined Contribution Plan, Cost Recognized	$ 2,086,000	$ 1,520,000	$ 601,000

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Commitments, Guarantees, and Contingencies (Details Textual) (USD $)	3 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2008
Operating Leases, Rent Expense		$ 6,914,000	$ 6,615,000	$ 5,769,000
Operating Lease Area					60,000
Deferred Rent Credit			1,041,000
Net Gain On Lease	1,041,000
Letters of Credit Outstanding, Amount		196,000
Loss Contingency, Damages Sought, Value		10,000
Other Commitment, Due in Next Twelve Months		3,245,000
Loss Contingency, Settlement Agreement, Consideration		$ 65,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Assets
Cash and cash equivalents	$ 7,761	$ 4,151
Accounts and other receivables, less allowance for doubtful accounts of $1,756 in 2012 and $1,015 in 2011	83,597	67,134
Costs and estimated earnings in excess of billings on uncompleted contracts	16,979	15,576
Deferred tax assets	2,031	2,670
Prepaid expenses and other current assets	8,112	6,193
Total current assets	118,480	95,724
Property, plant and equipment, net	5,511	5,562
Goodwill	102,821	93,338
Intangible assets, net	15,872	15,122
Other assets, net	1,750	1,830
Total assets	244,434	211,576
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses	47,457	42,500
Billings in excess of costs and estimated earnings on uncompleted contracts	21,877	17,266
Total current liabilities	69,334	59,766
Deferred tax liabilities	6,874	5,323
Other noncurrent liabilities	889	3,093
Total liabilities	77,097	68,182
Stockholders' equity:
Preferred stock, par value $0.01 per share; Authorized 10,000,000 shares; no shares issued	0	0
Common stock, par value $0.01 per share; Authorized 35,000,000 shares; issued 19,175,006 shares in 2012 and 18,822,139 shares in 2011	192	188
Additional paid-in capital	167,495	165,519
Retained earnings (accumulated deficit)	3,955	(18,733)
Treasury stock, at cost (125,334 shares in 2012 and 26,639 shares in 2011)	(2,494)	(358)
Accumulated other comprehensive loss	(1,811)	(3,222)
Total stockholders' equity	167,337	143,394
Total Liabilities and Stockholders' Equity	$ 244,434	$ 211,576

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Goodwill & Other Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Gross Carrying Amount	$ 26,861	$ 23,295
Accumulated Amortization	(10,989)	(8,173)
Net Carrying Amount	15,872	15,122
Customer relationships [Member]
Gross Carrying Amount	22,193	20,286
Accumulated Amortization	(9,064)	(6,361)
Net Carrying Amount	13,129	13,925
Tradenames [Member]
Gross Carrying Amount	982	791
Accumulated Amortization	(700)	(280)
Net Carrying Amount	282	511
Contract backlog [Member]
Gross Carrying Amount		374
Accumulated Amortization		(367)
Net Carrying Amount		7
Intellectual Property and Other [Member]
Gross Carrying Amount	3,686	1,844
Accumulated Amortization	(1,225)	(1,165)
Net Carrying Amount	$ 2,461	$ 679

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Net income	$ 22,688	$ 17,860	$ 12,732
Foreign currency translation adjustments	1,411	(995)	(281)
Comprehensive income	$ 24,099	$ 16,865	$ 12,451

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Stock-Based Compensation (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Total stock-based compensation	$ 1,791	$ 1,992	$ 1,657
Non-qualified stock options [Member]
Total stock-based compensation	711	963	794
Restricted stock units [Member]
Total stock-based compensation	717	650	584
Board of Directors stock grants [Member]
Total stock-based compensation	$ 363	$ 379	$ 279

XML

Description of Business and Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Beginning balance	$ 1,015	$ 701	$ 566
Additions	782	601	139
Deductions	(41)	(287)	(4)
Ending balance	$ 1,756	$ 1,015	$ 701

XML

Business Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenue	$ 105,985	$ 99,671	$ 102,311	$ 93,605	$ 93,892	$ 88,948	$ 86,034	$ 64,293	$ 401,572	$ 333,167	$ 259,926
Gain on reversal of deferred rent liability									0	1,041	0
Gain (loss) on change in fair value of contingent consideration, net									(789)	517	1,313
Operating income									35,682	27,943	20,537
Interest expense									(269)	(209)	(236)
Other income									389	657	551
Income before income tax expense									35,802	28,391	20,852
Learning Solutions [Member]
Revenue									161,455	130,392	118,922
Operating income									16,487	9,700	9,074
Professional and Technical Services [Member]
Revenue									87,844	85,285	70,893
Operating income									5,717	7,526	3,310
Sandy Training and Marketing [Member]
Revenue									70,243	54,604	47,153
Operating income									4,897	3,018	1,518
Performance Readiness Group [Member]
Revenue									55,794	40,079	0
Operating income									2,548	601	0
Energy Services [Member]
Revenue									26,236	22,807	22,958
Operating income									$ 6,822	$ 5,540	$ 5,322

XML

Commitments, Guarantees, and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

(14) Commitments, Guarantees, and Contingencies

Commitments

Operating Leases

We have various noncancelable leases for real property and machinery and equipment. Such leases expire at various dates with, in some cases, options to extend their terms.

Minimum rentals under long-term operating leases are as follows (in thousands):

	Real		Machinery and
	property		equipment		Total
2013	$	5,722	$	1,056	$	6,778
2014		3,918		574		4,492
2015		3,159		238		3,397
2016		2,752		22		2,774
2017		2,304		—		2,304
Thereafter		1,792		—		1,792
Total	$	19,647	$	1,890	$	21,537

Certain of the leases contain provisions for rent escalation based primarily on increases in a specified Consumer Price Index, real estate taxes and operating costs incurred by the lessor. Rent expense was approximately $6,914,000, $6,615,000 and $5,769,000 for 2012, 2011 and 2010, respectively.

In 2008, we entered into a sublease with Lear Corporation (“Lear”) for approximately 60,000 square feet of space in an office building in Troy, Michigan for a term scheduled to end in March 2015.  Lear filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in 2009 and subsequently obtained court approval to reject both our sublease and the superior lease under which the sublease was made. In May 2010, we filed a complaint in U.S. District Court for the Eastern District of Michigan seeking a declaratory judgment regarding its status as an occupant of the space and its obligation to pay rent.  We sought unsuccessfully to enter into a direct lease with the building owner. The building owner, Osprey-Troy Officentre, LLC (“Osprey”), claimed rights through Lear and threatened legal action if we vacated the building and ceased to pay rent under the sublease.  We believed that the sublease was terminated and that it was a tenant-at-sufferance in the building, no longer bound by the sublease and obligated to pay only the reasonable rental value of the space it occupied.  Osprey asked the Court to deny the relief requested by us and argued that the sublease constituted an assignment by Lear to us of Lear’s lease of the portion of the building occupied by us.  Both parties filed motions for summary judgment. 

In June 2011, prior to a court ruling on this matter, we entered into a new lease directly with Osprey for a term scheduled to end in March 2018, with an option to terminate on or after May 31, 2016 with 180 days prior written notice. Prior to entering into the new lease with Osprey, we had a deferred rent liability on our balance sheet of $1,041,000, which represented the difference between the actual monthly rent owed to date and the rent expense recognized on a straight-line basis for the scheduled rent increases over the term of the original sublease. Upon entering into the new lease with Osprey, we reversed the deferred rent liability associated with the terminated sublease. As a result, we recognized a net gain of $1,041,000 in the consolidated statement of operations during the quarter ended June 30, 2011. This net gain is excluded from rent expense for the year ended December 31, 2011 as disclosed above.

Other

As of December 31, 2012, we had three outstanding letters of credit totaling $196,000, two of which expire in 2013 and one which expires in 2018. In addition, we have two outstanding performance bonds totaling $3,245,000 relating to construction contracts scheduled to be completed in 2013.

Contingencies

On February 22, 2011, the Company was named a defendant in a complaint filed by the State of Tennessee (the “State”) in the Chancery Court for the 20th Judicial District of Tennessee. The complaint alleged that Bryan Oil Company, an executive of Bryan Oil, the Company and a former employee of the Company, violated provisions of the Tennessee Petroleum Underground Storage Tank Act (the "UST Act") in connection with the closure of a waste oil storage tank in 1997. The Complaint sought civil penalties not to exceed $10,000 per day for each violation of the UST Act, post-judgment interest and court costs.  The Company denied the substantive allegations in the complaint and asserted that its actions complied with the UST Act and applicable regulations, that it did not file false information in violation of the law, and that it had valid defenses against the State's allegations. The State also began an administrative action to remove the Company as an approved Corrective Action Contractor (CAC) and issued a ruling that found that the Company had filed false information by incorrectly stating the size of the tank in a report filed in 1997. The Company appealed that ruling to the State UST Board.  In 2012, evaluation and monitoring of the site where the tank had been located confirmed that there is no actionable contamination on the site and that all soil and groundwater analytical results for the chemicals of concern concentration(s) remain below the site-specific clean-up levels. The State approved closure of the site and removal of the monitoring wells and issued a case closure letter dated December 27, 2012.  On or about January 10, 2013, all parties to the state court lawsuit entered into a compromise and settlement agreement resolving all matters in dispute among them, without the admission of any liability or the finding of any fault or violations of any statutes or regulations on the part of the Company or any of the other defendants. In connection with the settlement, the Company agreed to pay $65,000 to the State. The state court lawsuit was dismissed, with prejudice, and the administrative ruling and appeal were withdrawn, formally concluding both matters.

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Description of Business and Significant Accounting Policies (Details 1)	12 Months Ended
	Dec. 31, 2012
Leasehold Improvements [Member]
Property, Plant and Equipment, Estimated Useful Lives	Shorter of asset life or term of lease
Maximum [Member] | Building Improvements [Member]
Property, Plant and Equipment, Useful Life	40 years
Maximum [Member] | Machinery, Equipment, and Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life	10 years
Minimum [Member] | Building Improvements [Member]
Property, Plant and Equipment, Useful Life	5 years
Minimum [Member] | Machinery, Equipment, and Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life	3 years

XML

Description of Business and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Business Combinations Policy [Policy Text Block]

Business

GP Strategies Corporation is a global performance improvement solutions provider of training, e-Learning solutions, management consulting and engineering services. References in this report to “GP Strategies,” the “Company,” “we” and “our” are to GP Strategies Corporation and its subsidiaries, collectively.

Fasb Codification Policy [Policy Text Block]

FASB Codification

We follow generally accepted accounting principles (“GAAP”) set by the Financial Accounting Standards Board (“FASB”). References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification,^™ sometimes referred to as ASC.

Consolidation, Policy [Policy Text Block]

Basis of Consolidation

The consolidated financial statements include the operations of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Significant Customers & Concentration of Credit Risk

We have a market concentration of revenue in the automotive sector. Revenue from the automotive industry accounted for approximately 17%, 17% and 18% of our consolidated revenue for the years ended December 31, 2012, 2011 and 2010, respectively. We also have a concentration of revenue from the United States government. For the years ended December 31, 2012, 2011 and 2010, sales to the United States government and its agencies represented approximately 12%, 14% and 22%, respectively, of our consolidated revenue. Revenue was derived from many separate contracts with a variety of government agencies that are regarded by us as separate customers. No single customer accounted for more than 10% of our consolidated revenue in 2012. Accounts receivable from a single automotive customer totaled $8,986,000 as of December 31, 2012 and $6,329,000 as of December 31, 2011, accounting for approximately 11% and 9% of our total accounts receivable as of those dates, respectively.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term highly liquid investments with original maturities of three months or less. Outstanding checks which have been issued but not presented to the banks for payment in excess of amounts on deposit may create negative book cash balances. We transfer cash on an as-needed basis to fund these items as they clear the bank in subsequent periods.Such negative cash balances are included in accounts payable and accrued expenses and totaled $0 and $1,888,000 as of December 31, 2012 and 2011, respectively. Changes in negative book cash balances from period to period are reported as a financing activity in the consolidated statement of cash flows.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

Allowance for Doubtful Accounts Receivable

Trade accounts receivable are recorded at invoiced amounts. We evaluate the collectability of trade accounts receivable based on a combination of factors. When aware that a specific customer may be unable to meet its financial obligations to us, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position, we evaluate the need to record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for all other customers based on a variety of factors, including the length of time the receivables are past due, historical collection experience and trends of past due accounts, write-offs and specific identification and review of past due accounts. Actual collections of trade receivables could differ from management’s estimates due to changes in future economic or industry conditions or specific customers’ financial conditions.

Activity in our allowance for doubtful accounts was comprised of the following for the periods indicated:

	Year ended December 31,
	2012			2011			2010
	(In thousands)
Beginning balance	$	1,015		$	701		$	566
Additions		782			601			139
Deductions		(41	)		(287	)		(4	)
Ending balance	$	1,756		$	1,015		$	701

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

The functional currency of our international operations is the respective local currency. The translation of the foreign currency into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted average exchange rates prevailing during the year. The unrealized gains and losses resulting from such translation are included as a component of comprehensive income.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

We provide services under time-and-materials, cost-reimbursable, and fixed price (including fixed-fee per transaction) contracts to both government and commercial customers. Each contract has different terms based on the scope, deliverables and complexity of the engagement, requiring us to make judgments and estimates about recognizing revenue. Revenue is recognized as services are performed.

Under time-and-materials contracts, as well as certain government cost-reimbursable and certain fixed price contracts, the contractual billing schedules are based on the specified level of resources we are obligated to provide. As a result, for these “level-of-effort” contracts, the contractual billing amount for the period is a measure of performance and, therefore, revenue is recognized in that amount.

Revenue under government fixed price contracts is recognized using the percentage-of-completion method. Under the percentage-of-completion method, management estimates the percentage-of-completion based upon costs incurred as a percentage of the total estimated costs.

For commercial fixed price contracts which typically involve a discrete project, such as development of training content and materials, design of training processes, software implementation, or engineering projects, the contractual billing schedules are not based on the specified level of resources we are obligated to provide. These discrete projects generally do not contain milestones or other reliable measures of performance. As a result, revenue on these arrangements is recognized using a percentage-of-completion method based on the relationship of costs incurred to total estimated costs expected to be incurred over the term of the contract. We believe this methodology is a reasonable measure of proportional performance since performance primarily involves personnel costs and services provided to the customer throughout the course of the projects through regular communications of progress toward completion and other project deliverables. In addition, the customer typically is required to pay us for the proportionate amount of work and cost incurred in the event of contract termination.

When total cost estimates exceed revenues, the estimated losses are recognized immediately. The use of the percentage-of-completion method requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the project, the nature and complexity of the work to be performed, and anticipated changes in estimated salaries and other costs. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to revision as the contract progresses. When revisions in estimated contract revenues and costs are determined, such adjustments are recorded in the period in which they are first identified.

For certain commercial fixed-fee per transaction contracts, such as providing training courses, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts.

For certain fixed-fee per transaction and fixed price contracts in which the output of the arrangement is measurable, such as for the shipping of publications and print materials, revenue is recognized when the deliverable is met and the product is delivered based on the output method of performance. The customer is required to pay for the cost incurred in the event of contract termination.

Certain of our fixed price commercial contracts contain revenue arrangements with multiple deliverables. Revenue arrangements with multiple deliverables are evaluated to determine if the deliverables can be divided into more than one unit of accounting. For contracts determined to have more than one unit of accounting, we recognize revenue for each deliverable based on the revenue recognition policies discussed above; that is, we recognize revenue in accordance with work performed and costs incurred, with the fee being allocated proportionately over the service period. Within each multiple deliverable project, there is objective and reliable fair value across all units of the arrangement, as discounts are not offered or applied to one deliverable versus another, and the rates bid across all deliverables are consistent.

As part of our on-going operations to provide services to our customers, incidental expenses, which are commonly referred to as “out-of-pocket” expenses, are billed to customers, either directly as a pass-through cost or indirectly as a cost estimated in proposing on fixed price contracts. Out-of-pocket expenses include expenses such as airfare, mileage, hotel stays, out-of-town meals and telecommunication charges. Our policy provides for these expenses to be recorded as both revenue and direct cost of services.

In connection with the delivery of products, primarily for publications delivered by our Sandy Training & Marketing segment, we incur shipping and handling costs which are billed to customers directly as a pass-through cost. Our policy provides for these expenses to be recorded as both revenue and direct cost of revenue.

Contract Related Assets and Liabilities Policy [Policy Text Block]

Contract Related Assets and Liabilities

Costs and estimated earnings in excess of billings on uncompleted contracts in the accompanying consolidated balance sheets represent unbilled amounts earned and reimbursable under contracts in progress. These amounts become billable according to the contract terms, which usually consider the passage of time, achievement of milestones or completion of the project. Generally, such unbilled amounts will be billed and collected over the next twelve months.

Billings in excess of costs and estimated earnings on uncompleted contracts in the accompanying consolidated balance sheets represent advanced billings to clients on contracts in advance of work performed. Generally, such amounts will be earned and recognized in revenue over the next twelve months.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

Comprehensive income consists of net income and foreign currency translation adjustments.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at lower of cost or market. Provision is made to reduce excess and obsolete inventories to their estimated net realizable value.  In assessing the realization of inventories, we make judgments regarding future demand requirements and compare these estimates with current and committed inventory levels.  Inventory requirements may change based on projected customer demand, training curriculum life-cycle changes, longer-or shorter-than-expected usage periods, and other factors that could affect the valuation of our inventories.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment

Property, plant and equipment are carried at cost (or fair value at acquisition date for assets obtained through business combinations). Major additions and improvements are capitalized, while maintenance and repairs which do not extend the lives of the assets are expensed as incurred. Gain or loss on the disposition of property, plant and equipment is recognized in operations when realized.

Depreciation of property, plant and equipment is recognized on a straight-line basis over the following estimated useful lives:

Class of assets	Useful life
Buildings and improvements	5 to 40 years
Machinery, equipment, and furniture and fixtures	3 to 10 years
Leasehold improvements	Shorter of asset life or term of lease

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Intangible Assets

Our intangible assets include amounts recognized in connection with acquisitions, including customer relationships, technology, intellectual property and tradenames. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Except for goodwill, we do not have any intangible assets with indefinite useful lives.

Goodwill represents the excess of costs over fair value of assets of businesses acquired. We review our goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We test goodwill at the reporting unit level.

During the year ended December 31, 2012, we adopted Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount.

If it is determined as a result of the qualitative assessment permitted by ASU 2011-08, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step impairment test is required. In the first step, we compare the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit’s assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value allocated to goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference.

Under the two-step impairment test, we determine the fair value of our reporting units using both an income approach and a market approach, and weigh both approaches to determine the fair value of each reporting unit. Under the income approach, we perform a discounted cash flow analysis which incorporates management’s cash flow projections over a five-year period and a terminal value is calculated by applying a capitalization rate to terminal year projections based on an estimated long-term growth rate. The five-year projected cash flows and calculated terminal value are discounted using a weighted average cost of capital (“WACC”) which takes into account the costs of debt and equity. The cost of equity is based on the risk-free interest rate, equity risk premium, industry and size equity premiums and any additional market equity risk premiums as deemed appropriate for each reporting unit. To arrive at a fair value for each reporting unit, the terminal value is discounted by the WACC and added to the present value of the estimated cash flows over the discrete five-year period. There are a number of other variables which impact the projected cash flows, such as expected revenue growth and profitability levels, working capital requirements, capital expenditures and related depreciation and amortization. Under the market approach, we perform a comparable public company analysis and apply revenue and earnings multiples from the identified set of companies to the reporting unit’s actual and forecasted financial performance to determine the fair value of each reporting unit. We evaluate the reasonableness of the fair value calculations of our reporting units by reconciling the total of the fair values of all of our reporting units to our total market capitalization, and adjusting for an appropriate control premium.   In addition, we make certain judgments in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

For our annual goodwill impairment test as of December 31, 2012, we performed a qualitative assessment as permitted by ASU 2011-08 for all of our reporting units and determined that it was more likely than not that the fair values of each of our reporting units exceeded their respective carrying values. For our annual goodwill impairment tests as of December 31, 2011 and 2010, we performed step one of the two-step impairment test and determined that the estimated fair values of each of our reporting units exceeded their respective carrying values, indicating the underlying goodwill of each unit was not impaired. Each of our reporting units had a substantial excess of fair value over their respective carrying values as of December 31, 2011 and 2010.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present.

Contingent Consideration For Business Acquisitions Policy [Policy Text Block]

Contingent Consideration for Business Acquisitions  

Acquisitions may include contingent consideration payments based on future financial measures of an acquired company. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on financial projections of the acquired companies and estimated probabilities of achievement. At each reporting date, the contingent consideration obligation is revalued to estimated fair value and changes in fair value subsequent to the acquisition are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Other Assets Policy [Policy Text Block]

Other Assets

Other assets primarily include certain software development and implementation costs, an investment in a joint venture and other assets obtained to fulfill customer related contract obligations. We capitalize the cost of internal-use software in accordance with ASC Topic 350-40, Internal-Use Software. These costs consist of payments made to third parties for software development and implementation and are amortized using the straight-line method over their estimated useful lives, typically three to five years. We account for a 5% interest in a joint venture partnership under the equity method of accounting because significant influence exists due to certain factors, including representation on the partnership’s Management Board and voting rights.

Income Tax, Policy [Policy Text Block]

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We establish accruals for uncertain tax positions taken or expected to be taken in a tax return when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Favorable or unfavorable adjustment of the accrual for any particular issue would be recognized as an increase or decrease to income tax expense in the period of a change in facts and circumstances. Interest and penalties related to income taxes are accounted for as income tax expense.

Earnings Per Share, Policy [Policy Text Block]

Earnings per Share

Basic earnings per share (“EPS”) are computed by dividing earnings by the weighted average number of common shares outstanding during the periods. Diluted EPS reflects the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Our dilutive common stock equivalent shares consist of stock options and restricted stock units outstanding under our stock-based incentive plans and are computed under the treasury stock method, using the average market price during the period. The following table presents instruments which were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the weighted average dilutive common stock equivalent shares which were included in the computation of diluted EPS:

	2012		2011		2010
	(In thousands)
Non-dilutive instruments		64		115		1,299
Dilutive common stock equivalents		319		244		108

Share-based Compensation, Option and Incentive Plans, Director Policy [Policy Text Block]

Stock-Based Compensation

Pursuant to our stock-based incentive plans which are described more fully in Note 10, we grant stock options, restricted stock, stock units, and equity to officers, employees, and members of the Board of Directors. We compute compensation expense for all equity-based compensation awards issued to employees using the fair-value measurement method. We recognize compensation expense on a straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. We apply a forfeiture estimate to compensation expense recognized for awards that are expected to vest during the requisite service period, and revise that estimate if subsequent information indicates that the actual forfeitures will differ from the estimate. We recognize the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. We do not capitalize any portion of our stock-based compensation.

We estimate the fair value of our stock options on the date of grant using the Black-Scholes option pricing model,which requires various assumptions such as expected term, expected stock price volatility and risk-free interest rate. We estimate the expected term of stock options granted taking into consideration historical data related to stock option exercises. We use historical stock price data in order to estimate the expected volatility factor of stock options granted. The risk-free interest rate for the periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate the estimates used, including but not limited to those related to revenue recognition, the allowance for doubtful accounts receivable, impairments of goodwill and other intangible assets, valuation of intangible assets acquired and contingent consideration liabilities assumed in business acquisitions, valuation of stock-based compensation awards and income taxes. Actual results could differ from these estimates.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Estimates

ASC Topic 820, Fair Value Measurements and Disclosure (“Topic 820”), defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The guidance within Topic 820 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels as follows:

· Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets;

· Level 2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and

· Level 3 – unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.

The carrying value of financial instruments including cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings approximate estimated market values because of short-term maturities and interest rates that approximate current rates. Our fair value measurements relate to goodwill, intangible assets and contingent consideration recognized in connection with acquisitions and are valued using Level 3 inputs.

Lease, Policy [Policy Text Block]

Leases

We lease various office space, machinery and equipment under noncancelable operating leases which have minimum lease obligations. Several of the leases contain provisions for rent escalations based primarily on increases in real estate taxes and operating costs incurred by the lessor. Rent expense is recognized in the statement of operations as incurred except for escalating rents, which are expensed on a straight-line basis over the terms of the leases.

Legal Costs, Policy [Policy Text Block]

Legal Expenses

We are involved, from time to time, in litigation and proceedings arising out of the ordinary course of business. Costs for legal services rendered in the course of these proceedings are charged to expense as they are incurred.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Standards Adopted

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”).  The objective of ASU 2011-08 is to simplify how entities, both public and nonpublic, test goodwill for impairment.  These amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test.  Previous guidance required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any.  Under the amendments in ASU 2011-08, an entity is not required to perform step one of the goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount.  The guidance in ASU 2011-08 is effective for annual and interim goodwill assessments performed for fiscal years beginning after December 15, 2011 and early adoption is permitted.  We implemented this accounting standard for our goodwill impairment testing as of December 31, 2012.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"), which requires an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The current option to present components of other comprehensive income as part of the statement of changes in stockholders'' equity will be eliminated. Although the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under existing guidance. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011 and will be applied retrospectively. We adopted ASU 2011-05 in the first quarter of 2012 and have included two separate, but consecutive statements of operations and comprehensive income in this report. The adoption of ASU 2011-05 changed our financial statement presentation of comprehensive income but did not impact our net income, financial position or cash flows.

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Business Segments (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenue	$ 105,985	$ 99,671	$ 102,311	$ 93,605	$ 93,892	$ 88,948	$ 86,034	$ 64,293	$ 401,572	$ 333,167	$ 259,926
United States [Member]
Revenue									323,867	274,010	214,194
United Kingdom [Member]
Revenue									61,102	48,151	36,518
Other Regions [Member]
Revenue									$ 16,603	$ 11,006	$ 9,214

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands	Common Stock (0.01 Par) [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2009	$ 186	$ 161,975	$ (49,325)	$ 0	$ (1,946)	$ 110,890
Net income	0	0	12,732	0	0	12,732
Foreign currency translation adjustments	0	0	0	0	(281)	(281)
Repurchases of common stock in the open market	0	0	0	(266)	0	(266)
Stock-based compensation expense	0	1,657	0	0	0	1,657
Net issuances of stock pursuant to stock compensation and benefit plans and other	1	(210)	0	264	0	55
Balance at Dec. 31, 2010	187	163,422	(36,593)	(2)	(2,227)	124,787
Net income	0	0	17,860	0	0	17,860
Foreign currency translation adjustments	0	0	0	0	(995)	(995)
Repurchases of common stock in the open market	0	0	0	(1,414)	0	(1,414)
Stock-based compensation expense	0	1,899	0	0	0	1,899
Issuance of stock for employer contributions to retirement plan	0	631	0	477	0	1,108
Net issuances of stock pursuant to stock compensation and benefit plans and other	1	(433)	0	581	0	149
Balance at Dec. 31, 2011	188	165,519	(18,733)	(358)	(3,222)	143,394
Net income	0	0	22,688	0	0	22,688
Foreign currency translation adjustments	0	0	0	0	1,411	1,411
Repurchases of common stock in the open market	0	0	0	(3,433)	0	(3,433)
Stock-based compensation expense	0	1,780	0	0	0	1,780
Income tax benefit from stock-based compensation	0	2,034	0	0	0	2,034
Shares withheld in exchange for tax withholding payments on stock-based compensation	0	(2,750)	0	0	0	(2,750)
Issuance of stock for employer contributions to retirement plan	0	538	0	1,297	0	1,835
Net issuances of stock pursuant to stock compensation and benefit plans and other	4	374	0	0	0	378
Balance at Dec. 31, 2012	$ 192	$ 167,495	$ 3,955	$ (2,494)	$ (1,811)	$ 167,337

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Consolidated Balance Sheets [Parenthetical] (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Accounts and other receivables, allowance for doubtful accounts (in dollars)	$ 1,756	$ 1,015
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized	35,000,000	35,000,000
Common Stock, Shares, Issued	19,175,006	18,822,139
Treasury Stock, Shares	125,334	26,639

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

(9) Income Taxes

The components of income before income taxes and income tax expense for the years ended December 31, 2012, 2011 and 2010 are as follows (in thousands):

	Years ended December 31,
	2012			2011			2010
Income before income taxes:
Domestic	$	27,827		$	21,976		$	17,452
Foreign		7,975			6,415			3,400
Total income before income taxes	$	35,802		$	28,391		$	20,852
Income tax expense:
Current:
Federal	$	7,846		$	6,869		$	4,746
State and local		1,653			1,750			1,111
Foreign		2,899			1,765			1,328
Total current		12,398			10,384			7,185
Deferred:
Federal		856			310			910
State and local		236			48			133
Foreign		(376	)		(211	)		(108	)
Total deferred		716			147			935
Total income tax expense	$	13,114		$	10,531		$	8,120

The difference between the expense for income tax expense computed at the statutory rate and the reported amount of income tax expense is as follows:

	December 31,
	2012			2011			2010
Federal income tax rate		35.0	%		35.0	%		35.0	%
State and local taxes net of federal benefit		3.4			4.1			3.8
Foreign taxes		(0.1	)		(1.2	)		2.2
Permanent differences		1.9			2.1			(0.6	)
Valuation allowance adjustments		—			0.1			(0.5	)
Reduction of uncertain tax position liabilities		(4.5	)		(3.1	)		—
Other		0.9			0.1			(1.0	)
Effective tax rate		36.6	%		37.1	%		38.9	%

Uncertain Tax Positions

During the third quarter of 2012, we recognized an income tax benefit of $1,602,000 on the reduction of an uncertain tax position liability relating to a prior tax deduction that is now outside the applicable statute of limitations. The income tax benefit included a $1,418,000 reduction in the uncertain tax position liability and the reversal of $184,000 of accrued interest and penalties. During the fourth quarter of 2011, we recognized an income tax benefit of $891,000 on the reduction of an uncertain tax position liability relating to a period that is outside the applicable statute of limitations. The income tax benefit included an $800,000 reduction in the uncertain tax position liability and the reversal of $91,000 of accrued interest and penalties. Excluding the impact of these income tax benefits in both years, our effective income tax rate was 41.1% and 40.2% for the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, after recording the reduction of the uncertain tax position liability, we had no other uncertain tax positions reflected on our consolidated balance sheet.

We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2012, 2011 and 2010, we recognized $(160,000), $(6,000) and $93,000, respectively, of interest expense (income) related to these tax positions which is reflected within income tax expense in the consolidated statements of operations. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examination by tax authorities for years prior to 2009, with the exception of the net operating loss generated in 2003 that was utilized on the 2008 and 2009 tax returns.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, is as follows (in thousands):

	Years ended December 31,
	2012			2011			2010
Unrecognized tax benefits at beginning of the year	$	1,418		$	2,218		$	2,218
Additions related to current year tax positions		—			—			—
Additions related to prior year tax positions		—			—			—
Settlements		—			—			—
Reductions due to lapse of statute of limitations		(1,418	)		(800	)		—
Unrecognized tax benefits at end of the year	$	—		$	1,418		$	2,218

Deferred Income Taxes

The tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities that are included in the net deferred tax assets and liabilities are summarized as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Allowance for doubtful accounts	$	492		$	380
Accrued liabilities		1,131			1,363
Stock-based compensation expense		499			1,174
Net federal, state and foreign operating loss carryforwards		288			465
Deferred tax assets		2,410			3,382
Deferred tax liabilities:
Intangible assets, property and equipment, principally due to difference in depreciation and amortization		6,990			5,709
Net deferred tax liabilities		(4,580	)		(2,327	)
Less valuation allowance		(263	)		(326	)
Net deferred tax liabilities, net of valuation allowance	$	(4,843	)	$	(2,653	)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets may not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon these factors, management believes it is more likely than not that the Company will realize the benefits of deferred tax assets, net of the valuation allowance.

As of December 31, 2012, we had utilized all of our available credit carryovers for Federal tax purposes. In addition, as of December 31, 2012, we had foreign net operating loss carryforwards of $263,000 which expire in 2013 and beyond. There is a valuation allowance of $263,000 against the foreign net operating loss carryforwards due to the uncertainty of future profitability in foreign jurisdictions.

Foreign Income

As of December 31, 2012, we had approximately $17,700,000 of accumulated undistributed earnings generated by our foreign subsidiaries. No provision has been made for income taxes that would be payable upon the distribution of such earnings since we intend to permanently reinvest these earnings. If these earnings were distributed in the form of dividends or otherwise, the distributions would be subject to U.S. federal income tax at the statutory rate of 35 percent, less foreign tax credits available to offset such distributions, if any. In addition, such distributions may be subject to withholding taxes in the various tax jurisdictions.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Feb. 15, 2013	Jun. 30, 2012
Entity Registrant Name	GP STRATEGIES CORP
Entity Central Index Key	0000070415
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	gpx
Entity Common Stock, Shares Outstanding		19,059,797
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012
Entity Well-Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 272,137,000

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Stock-Based Compensation [Text Block]

(10) Stock-Based Compensation

Our shareholders approved the 2011 Stock Incentive Plan (the “2011 Plan”) at our Annual Meeting of Shareholders in December 2011. The 2011 Plan replaced the 1973 Non-Qualified Stock Option Plan, as amended, and the 2003 Incentive Stock Plan (the “Prior Plans”). No new awards will be made under the Prior Plans and outstanding awards will remain outstanding under the Prior Plans until settled. Under the 2011 Plan, we may grant awards of non-qualified stock options, incentive stock options, restricted stock, stock units, performance shares, performance units and other incentives payable in cash or in shares of our common stock to officers, employees or members of the Board of Directors. We are authorized to grant an aggregate of 1,355,764 shares under the 2011 Plan. As of December 31, 2012 there were 1,147,780 available shares for issuance of future grants of awards under the 2011 Plan. As of December 31, 2012, there were 583,692 shares representing outstanding awards under the Prior Plans and 252,000 shares representing outstanding awards under the 2011 Plan. We may issue new shares or use shares held in treasury to deliver shares to employees for our equity grants or upon exercise of non-qualified stock options.

The following table summarizes the pre-tax stock-based compensation expense included in reported net income (in thousands):

	Years ended December 31,
	2012		2011		2010
Non-qualified stock options	$	711	$	963	$	794
Restricted stock units		717		650		584
Board of Director stock grants		363		379		279
Total	$	1,791	$	1,992	$	1,657

We recognized a deferred income tax benefit of $571,000, $645,000 and $551,000, respectively, during the years ended December 31, 2012, 2011, and 2010 associated with the compensation expense recognized in our consolidated financial statements. As of December 31, 2012, we had non-qualified stock options and restricted stock units outstanding under these plans as discussed below.

Non-Qualified Stock Options

Non-qualified stock options are granted with an exercise price not less than the fair market value of our common stock at the date of grant, vest over a period up to ten years, and expire at various terms up to ten years from the date of grant.

Summarized information for our non-qualified stock options is as follows:

						Weighted
						average
				Weighted		remaining		Aggregate
	Number of			average		contractual		intrinsic
Stock Options	options			exercise price		term		value
Outstanding at December 31, 2011		1,441,370		$	9.93
Granted		54,500			17.57
Exercised		(812,340	)		10.80
Forfeited		(37,100	)		11.74
Expired		(21,730	)		4.65
Outstanding at December 31, 2012		624,700		$	9.54		3.37	$	6,942,000
Stock options expected to vest		610,500		$	9.55		3.37	$	6,774,000
Exercisable at December 31, 2012		188,200		$	8.49		2.90	$	2,288,000

Summarized weighted average information for non-qualified stock options granted to certain key personnel during the years ended December 31, 2012, 2011 and 2010 is as follows:

	2012			2011			2010
Number of options granted		54,500			157,500			500,000
Exercise price	$	17.57		$	13.18		$	7.52
Vesting term		4.5 years			5 years			5 years
Contractual term		5.5 years			6 years			6 years
Grant-date fair value	$	6.80		$	4.63		$	3.15
Black-Scholes assumptions:
Expected term		4.2 years			4.5 years			4.6 years
Expected stock price volatility		48.3	%		39.3	%		47.6	%
Risk-free interest rate		0.61	%		1.82	%		2.15	%
Expected dividend yield		—	%		—	%		—	%

As of December 31, 2012, we had approximately $1,317,000 of unrecognized compensation cost related to the unvested portion of outstanding stock options to be recognized on a straight-line basis over a weighted average remaining service period of approximately 2.9 years.

We received cash for the exercise price associated with stock options exercised of $284,000, $355,000, and $39,000 during the years ended December 31, 2012, 2011 and 2010, respectively. During the year ended December 31, 2012, we settled 782,980 outstanding stock options held by our employees by issuing 214,624 fully vested shares which represented the fair value of those stock options upon settlement, net of required income tax withholdings. The total intrinsic value realized by participants on stock options exercised and/or settled was $6,544,000, $123,000, and $130,000 during the years ended December 31, 2012, 2011 and 2010, respectively. During the years ended December 31, 2012, 2011 and 2010, we realized income tax benefits of $2,034,000, $131,000 and $129,000, respectively, related to stock option exercises and restricted stock vesting, which are reflected as an increase to additional paid-in capital on the consolidated statements of stockholders’ equity.

Restricted Stock Units

In addition to stock options, we issue restricted stock units to key employees and members of the Board of Directors based on meeting certain service goals. The stock units vest to the recipients at various dates, up to five years, based on fulfilling service requirements. We recognize the value of the market price of the underlying stock on the date of grant to compensation expense over the requisite service period. Upon vesting, the stock units are settled in shares of our common stock. Summarized share information for our restricted stock units is as follows:

				Weighted
	Year ended			average
	December 31,			grant date
	2012			fair value
	(In shares)			(In dollars)
Outstanding and unvested, beginning of period		102,967		$	6.43
Granted		198,500			19.26
Vested		(85,351	)		6.53
Forfeited		(5,124	)		8.74
Outstanding and unvested, end of period		210,992		$	18.40
Restricted stock units expected to vest		197,232		$	18.49

The total intrinsic value realized by participants upon the vesting of restricted stock units was $1,667,000, $1,024,000 and $1,071,000 during the years ended December 31, 2012, 2011 and 2010, respectively. As of December 31, 2012, we had unrecognized compensation cost of $3,326,000 related to the unvested portion of our outstanding restricted stock units to be recognized over a weighted average remaining service period of 4.5 years.

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenue	$ 401,572	$ 333,167	$ 259,926
Cost of revenue	329,601	276,533	217,236
Gross profit	71,971	56,634	42,690
Selling, general and administrative expenses	35,500	30,249	23,466
Gain on reversal of deferred rent liability	0	1,041	0
Gain (loss) on change in fair value of contingent consideration, net	(789)	517	1,313
Operating income	35,682	27,943	20,537
Interest expense	269	209	236
Other income (including interest income of $29 in 2012, $57 in 2011 and $105 in 2010)	389	657	551
Income before income taxes	35,802	28,391	20,852
Income tax expense	13,114	10,531	8,120
Net income	$ 22,688	$ 17,860	$ 12,732
Basic weighted average shares outstanding (in shares)	18,956	18,766	18,621
Diluted weighted average shares outstanding (in shares)	19,275	19,010	18,729
Per common share data:
Basic earnings per share (in dollars per share)	$ 1.20	$ 0.95	$ 0.68
Diluted earnings per share (in dollars per share)	$ 1.18	$ 0.94	$ 0.68

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Inventories

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

(4) Inventories

Our inventories are comprised primarily of the following: (i) raw materials used in the assembly of glovebox portfolios, brochures and accessory kits for automotive manufacturers which are installed in new cars and trucks at the time of vehicle assembly; (ii) component parts used in the implementation of condition monitoring systems for power generation customers; and (iii) training materials, books and related accessories used in the delivery of courses. As of December 31, 2012 and 2011, we had total inventories of $654,000 and $178,000, respectively, which are included in prepaid expenses and other current assets in the consolidated balance sheets.

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Goodwill & Other Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

(3) Goodwill & Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reportable business segment for the years ended December 31, 2012 and 2011 were as follows (in thousands):

				Professional						Performance
	Learning			& Technical						Readiness
	Solutions			Services			Sandy			Solutions		Energy		Total
Net book value at January 1, 2011
Goodwill	$	41,115		$	33,620		$	5,508		$	—	$	8,170	$	88,413
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total		39,036			25,790			—			—		8,170		72,996
2011 Activity:
Acquisitions		6,440			3,823			653			9,795		—		20,711
Foreign currency translation		(322	)		45			—			—		—		(277	)
Other		(84	)		(8	)		—			—		—		(92	)
Net book value at December 31, 2011
Goodwill		47,149			37,480			6,161			9,795		8,170		108,755
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total		45,070			29,650			653			9,795		8,170		93,338
2012 Activity:
Acquisitions		8,226			—			—			—		340		8,566
Foreign currency translation		903			10			—			—		12		925
Other		—			(8	)		—			—		—		(8	)
Net book value at December 31, 2012
Goodwill		56,278			37,482			6,161			9,795		8,522		118,238
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total	$	54,199		$	29,652		$	653		$	9,795	$	8,522	$	102,821

Intangible Assets Subject to Amortization

Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands):

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
December 31, 2012
Customer relationships	$	22,193	$	(9,064	)	$	13,129
Tradenames		982		(700	)		282
Intellectual property and other		3,686		(1,225	)		2,461
	$	26,861	$	(10,989	)	$	15,872
December 31, 2011
Customer relationships	$	20,286	$	(6,361	)	$	13,925
Tradenames		791		(280	)		511
Contract backlog		374		(367	)		7
Intellectual property and other		1,844		(1,165	)		679
	$	23,295	$	(8,173	)	$	15,122

Amortization expense for intangible assets was $4,598,000, $3,418,000 and $2,256,000, for the years ended December 31, 2012, 2011 and 2010, respectively. Estimated amortization expense for intangible assets included in our consolidated balance sheet as of December 31, 2012 is as follows (in thousands):

Fiscal year ending:
2013	$	4,866
2014		4,440
2015		3,045
2016		2,051
2017		988
Thereafter		482
Total	$	15,872

As of December 31, 2012, our intangible assets with definite lives had a weighted average remaining useful life of 3.9 years. We have no amortizable intangible assets with indefinite useful lives.

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Quarterly Information (unaudited)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

(15) Quarterly Information (unaudited)

Our quarterly financial information has not been audited but, in management’s opinion, includes all adjustments necessary for a fair presentation.

(In thousands)	Three months ended								Year ended
2012	March 31		June 30		September 30		December 31		December 31
Revenue	$	93,605	$	102,311	$	99,671	$	105,985	$	401,572
Gross profit		15,612		19,005		17,929		19,425		71,971
Net income		4,384		5,984		6,183		6,137		22,688
Earnings per share:
Basic	$	0.23	$	0.32	$	0.33	$	0.32	$	1.20
Diluted	$	0.23	$	0.31	$	0.32	$	0.32	$	1.18
2011
Revenue	$	64,293	$	86,034	$	88,948	$	93,892	$	333,167
Gross profit		10,792		14,711		14,865		16,266		56,634
Net income		2,590		4,711		4,619		5,940		17,860
Earnings per share:
Basic	$	0.14	$	0.25	$	0.25	$	0.32	$	0.95
Diluted	$	0.14	$	0.25	$	0.24	$	0.31	$	0.94

The sum of the quarterly earnings per share amounts may not equal the total for the year due to the effects of rounding and dilution as a result of issuing common shares during the year.

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Common Stock

12 Months Ended

Dec. 31, 2012

Stockholders' Equity Note [Abstract]

Stockholders' Equity [Text Block]

(11) Common Stock

The holders of common stock are entitled to one vote per share. As of December 31, 2012, there were 19,049,672 shares of common stock issued and outstanding. In addition, as of December 31, 2012, there were 835,692 shares reserved for issuance under outstanding equity compensation awards such as stock options and restricted stock units and an additional 1,147,780 shares available for issuance for future grants of awards under the 2011 Plan.

Stock Repurchase Program

We have a share repurchase program under which we may repurchase shares of our common stock from time to time in the open market, subject to prevailing business and market conditions and other factors. During the years ended December 31, 2012, 2011 and 2010, we repurchased approximately 180,000, 125,000 and 37,000 shares, respectively, of our common stock in the open market for a total cost of approximately $3,433,000, $1,414,000 and $266,000, respectively. As of December 31, 2012, there was approximately $1,059,000 available for future repurchases under the buyback program. There is no expiration date for the repurchase program.

Securities Purchase Agreement

On December 30, 2009, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single accredited investor, Sagard Capital Partners, L.P. (“Sagard”), pursuant to which we sold to Sagard, in a private placement, an aggregate of 2,857,143 shares (the “Shares”) of our common stock, par value $0.01, at a price of $7.00 per share (the “Offering”), for an aggregate purchase price of $20,000,000. The Offering closed on December 30, 2009. The Purchase Agreement prohibits Sagard from acquiring beneficial ownership of more than 23% of our common stock (calculated on a fully diluted basis).

On December 30, 2011, Sagard entered into a Stock Transfer Agreement with Bedford Oak Partners, L.P. (“Bedford Oak”) to privately purchase 350,000 shares of our common stock from Bedford Oak for a purchase price of $12.30 per share, or an aggregate purchase price of $4,305,000.  The transaction closed in January 2012. In addition, Sagard purchased an additional 173,353 and 101,478 shares of our common stock in the open market during the years ended December 31, 2012 and 2011, respectively. As of December 31, 2012, Sagard beneficially owned 3,509,774 shares or 18.4% of our outstanding common stock.

Registration Rights Agreement

In connection with the Offering, on December 30, 2009, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Sagard. Pursuant to the Registration Rights Agreement, we agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) no later than September 30, 2010 for purposes of registering the resale of the Shares and any shares of common stock issued pursuant to the preemptive rights under Section 4(l) of the Purchase Agreement (or any shares of common stock issuable upon exercise, conversion or exchange of securities issued pursuant to the preemptive rights). We agreed to use our reasonable best efforts to cause this registration statement to be declared effective by the SEC no later than December 30, 2010. If we failed to meet either of these deadlines, fail to meet filing or effectiveness deadlines with respect to any additional registration statements required by the Registration Rights Agreement, or fail to keep any registration statements continuously effective (with limited exceptions), we will be obligated to pay to the holders of the Shares liquidated damages in the amount of 1% of the purchase price for the Shares per month, up to a maximum of $2,400,000. We also agreed, among other things, to indemnify the selling holders under the registration statements from certain liabilities and to pay all fees and expenses (excluding underwriting discounts and selling commissions and all legal fees of the selling holders in excess of $25,000) incident to our obligations under the Registration Rights Agreement. We filed the registration statement with the SEC on September 27, 2010 and it was declared effective by the SEC on October 8, 2010.

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Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2012

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(7) Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following (in thousands):

	December 31,
	2012		2011
Trade accounts payable	$	11,061	$	10,481
Accrued salaries, vacation and benefits		16,463		14,517
Other accrued expenses		17,393		13,075
Accrued contingent consideration		2,540		2,539
Negative cash book balance		—		1,888
	$	47,457	$	42,500

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Stock-Based Compensation (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Granted, Number of options	54,500	157,500	500,000
Exercisable at December 31, 2012, Weighted average exercise price	$ 17.57	$ 13.18	$ 7.52
Non Qualified Stock Option [Member]
Outstanding at December 31, 2011, Number of options	1,441,370
Granted, Number of options	54,500
Exercised, Number of options	(812,340)
Forfeited, Number of options	(37,100)
Expired, Number of options	(21,730)
Outstanding at December 31, 2012, Number of options	624,700
Stock options expected to vest, Number of options	610,500
Exercisable at December 31, 2012, Number of options	188,200
Outstanding at December 31, 2011, Weighted average exercise price	$ 9.93
Granted, Weighted average exercise price	$ 17.57
Exercised, Weighted average exercise price	$ 10.80
Forfeited, Weighted average exercise price	$ 11.74
Expired, Weighted average exercise price	$ 4.65
Outstanding at December 31, 2012, Weighted average exercise price	$ 9.54
Stock options expected to vest, Weighted average exercise price	$ 9.55
Exercisable at December 31, 2012, Weighted average exercise price	$ 8.49
Outstanding at December 31, 2012, Weighted average remaining contractual term	3 years 4 months 13 days
Stock options expected to vest, Weighted average remaining contractual term	3 years 4 months 13 days
Exercisable at December 31, 2012, Weighted average remaining contractual term	2 years 10 months 24 days
Outstanding at December 31, 2012, Aggregate intrinsic value	$ 6,942,000
Stock options expected to vest, Aggregate intrinsic value	6,774,000
Exercisable at December 31, 2012, Aggregate intrinsic value	$ 2,288,000

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

(5) Property, Plant and Equipment

Property, plant and equipment consisted of the following (in thousands):

	December 31,
	2012			2011
Machinery, equipment and vehicles	$	15,043		$	13,602
Furniture and fixtures		2,274			1,884
Leasehold improvements		1,058			928
Buildings		396			379
		18,771			16,793
Accumulated depreciation and amortization		(13,260	)		(11,231	)
	$	5,511		$	5,562

Depreciation expense was $2,636,000, $2,146,000, and $1,577,000, for the years ended December 31, 2012, 2011 and 2010, respectively.

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Short-Term Borrowings

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Short-Term Borrowings [Text Block]

(6) Short-Term Borrowings

We have a $50,000,000 Financing and Security Agreement (the “Credit Agreement”) with a bank that expires on October 31, 2014 and is secured by certain of our assets. The Credit Agreement contains a provision to increase the maximum principal amount to $75,000,000 upon lender approval. The maximum interest rate on the Credit Agreement is the daily LIBOR market index rate plus 2.25%. Based upon our financial performance, the interest rate can be reduced. The Credit Agreement contains covenants with respect to our minimum tangible net worth, total liabilities to tangible net worth ratio and cash flow to debt service ratio. We were in compliance with all loan covenants under the Credit Agreement as of December 31, 2012. As of December 31, 2012, there were no borrowings outstanding and $50,000,000 of available borrowings under the Credit Agreement.

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Compensation and Employee Benefit Plans [Text Block]

(8) Employee Benefit Plan

We offer the GP Retirement Savings Plan (the “Plan”) to our employees. Eligible employees are automatically enrolled unless they elect to not participate in the Plan, and contributions begin as soon as administratively feasible after enrollment. The Plan permits pre-tax contributions to the Plan by participants pursuant to Section 401(k) of the Internal Revenue Code (IRC). We make matching contributions at our discretion. In 2012, 2011 and 2010, we contributed 107,728, 93,472, and 48,440 shares, respectively, of our common stock directly to the Plan with a value of approximately $1,835,000, $1,108,000 and $440,000, respectively. In addition, we contributed cash, net of forfeitures, of $150,000, $334,000 and $160,000 to the Plan for matching contributions for the years ended December 31, 2012, 2011 and 2010, respectively. For the years ended December 31, 2012, 2011 and 2010, we recognized total compensation expense of $2,086,000, $1,520,000 and $601,000, respectively, in the consolidated statements of operations for matching contributions to the Plan.

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Common Stock (Details Textual) (USD $)	12 Months Ended				1 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jan. 31, 2012 Sagard [Member]	Dec. 31, 2012 Sagard [Member]	Dec. 31, 2011 Sagard [Member]	Dec. 31, 2009 Sagard [Member]	Dec. 31, 2012 Two Thousand and Eleven Plan [Member]	Dec. 31, 2012 Equity Compensation Award [Member]
Common Stock, Shares, Outstanding	19,049,672
Common Stock, Capital Shares Reserved for Future Issuance									1,147,780	835,692
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Share Price		$ 12.30						$ 7
Beneficial Ownership Maximum Percentage				23.00%
Common Stock Purchased In Open Market						173,353	101,478
Common Stock Privately Purchased					350,000
Common Stock Purchase Price		$ 4,305,000
Common Stock Beneficial Ownership Number						3,509,774	3,509,774
Common Stock Beneficial Ownership Percentage						18.40%	18.40%
Purchase Price Percentage		1.00%
Liquidated Damages Amount		2,400,000
Shareholders Indemnification Amount		25,000
Stock Repurchased During Period, Shares	180,000	125,000	37,000
Repurchases of common stock in the open market	(3,433,000)	(1,414,000)	(266,000)
Stock Repurchase Available Amount	1,059,000
Shares Sold In Private Placement				2,857,143
Securities Purchasement Agreement Purchase Price				$ 20,000,000

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Business Segments (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Total Assets	$ 244,434	$ 211,576
Learning Solutions [Member]
Total Assets	116,753	95,389
Professional and Technical Services [Member]
Total Assets	56,160	59,675
Sandy Training and Marketing [Member]
Total Assets	24,250	16,819
Energy Services [Member]
Total Assets	19,799	13,946
Performance Readiness Group [Member]
Total Assets	$ 27,472	$ 25,747

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Stock-Based Compensation (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Number Of Stock Options Settled For Fully Vested Shares	782,980
Number Of Shares Issued In Settlement Of Stock Option	214,624
Deferred Income Tax Expense (Benefit)	$ 716,000	$ 147,000	$ 935,000
Unrecognised Compensation Cost	1,317,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	2 years 10 months 24 days
Proceeds from stock option exercises	284,000	355,000	39,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value	6,544,000	123,000	130,000
Adjustments To Additional Paid In Capital, Income Tax Benefit From Share-Based Compensation	2,034,000
Shares Representing Outstanding Award	583,692
Restricted Stock Units (Rsus) [Member]
Unrecognised Compensation Cost	3,326,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	4 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value	1,667,000	1,024,000	1,071,000
Stock Option [Member]
Deferred Income Tax Expense (Benefit)	571,000	645,000	551,000
Adjustments To Additional Paid In Capital, Income Tax Benefit From Share-Based Compensation	$ 2,034,000	$ 131,000	$ 129,000
Two Thousand and Eleven Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,355,764
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	252,000
Common Stock, Capital Shares Reserved for Future Issuance	1,147,780

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Quarterly Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

Our quarterly financial information has not been audited but, in management’s opinion, includes all adjustments necessary for a fair presentation.

(In thousands)	Three months ended								Year ended
2012	March 31		June 30		September 30		December 31		December 31
Revenue	$	93,605	$	102,311	$	99,671	$	105,985	$	401,572
Gross profit		15,612		19,005		17,929		19,425		71,971
Net income		4,384		5,984		6,183		6,137		22,688
Earnings per share:
Basic	$	0.23	$	0.32	$	0.33	$	0.32	$	1.20
Diluted	$	0.23	$	0.31	$	0.32	$	0.32	$	1.18
2011
Revenue	$	64,293	$	86,034	$	88,948	$	93,892	$	333,167
Gross profit		10,792		14,711		14,865		16,266		56,634
Net income		2,590		4,711		4,619		5,940		17,860
Earnings per share:
Basic	$	0.14	$	0.25	$	0.25	$	0.32	$	0.95
Diluted	$	0.14	$	0.25	$	0.24	$	0.31	$	0.94

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Short-Term Borrowings (Details Textual) (Financing and Security Agreement [Member], USD $)	12 Months Ended
	Dec. 31, 2012
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000,000
Line of Credit Facility, Expiration Date 1	Oct. 31, 2014
Line of Credit Facility Provision to Increase Borrowing Capacity	75,000,000
Line of Credit Facility, Current Borrowing Capacity	$ 50,000,000
Maximum [Member]
Line of Credit Facility, Interest Rate Description	LIBOR market index rate plus 2.25%

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

(13) Related Party Transactions

Pursuant to the terms of the Securities Purchase Agreement with Sagard as discussed in Note 11, we agreed to take all corporate and other action necessary to cause one designee of Sagard to be elected or appointed to our Board of Directors, effective as of December 30, 2009, in all cases subject to compliance with relevant NYSE rules and regulations and all other legal and governance requirements regarding service as a director. Accordingly, on December 18, 2009, the Board of Directors unanimously approved resolutions increasing the number of Directors on the Board of Directors from seven to eight and, effective as of the date of the closing of the Offering, elected Daniel Friedberg to serve on the Board of Directors for an initial term commencing as of the date of the closing of the Offering and ending at the next annual meeting of our shareholders.

As discussed in Note 11, Sagard purchased 350,000 shares of our common stock from Bedford Oak in January 2012. Daniel M. Friedberg has been President and CEO of Sagard Capital Partners Management Corporation, the investment manager of Sagard, since its founding in 2005. Harvey P. Eisen, the Chairman of our Board of Directors, is also the Chairman and Managing Member of Bedford Oak Advisors, LLC, the investment manager of Bedford Oak. Except as described above, neither Mr. Friedberg nor Mr. Eisen is a party to any other material arrangements or transactions involving the Company.

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2012

Business Acquisition, Pro Forma Information [Table Text Block]

The following unaudited pro-forma condensed consolidated results of operations assume that the acquisition of RWD was completed as of January 1 for each of the years below:

	Year ended
	December 31,
	2011		2010
	(In thousands, except per share amounts)
Revenue	$	354,609	$	324,587
Net income		18,605		8,279
Basic earnings per share		0.99		0.44
Diluted earnings per share		0.98		0.44

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

Below is a summary of the potential contingent consideration we may be required to pay in connection with completed acquisitions as of December 31, 2012 (dollars in thousands):

	Original range
	of potential	As of December 31, 2012
	undiscounted	Maximum contingent consideration due in
Acquisition:	payments	2013		2014			Total
Milsom	$0 - $3,600	$	302	$	—	$	$	302
Marton House	$0 - $3,750		1,293		—			1,293
Bath Consulting	$0 - $2,376		724		1,099			1,823
Communication Consulting	$0 - $700		300		—			300
Asentus	$0 - $3,700		2,100		1,600			3,700
Total		$	4,719	$	2,699	$	$	7,418

Schedule Of Contingent Consideration Liabilities For Acquisition [Table Text Block]

Below is a summary of the changes in the recorded amount of contingent consideration liabilities from December 31, 2011 to December 31, 2012 for each acquisition (dollars in thousands):

						Change in
			2012			Fair Value of			Foreign
	Liability as of		Additions			Contingent			Currency		Liability as of
Acquisition:	Dec. 31, 2011		(Payments)			Consideration			Translation		Dec. 31, 2012
Milsom	$	682	$	(437	)	$	44		$	13	$	302
Option Six		800		(800	)		—			—		—
Marton House		311		-			452			11		774
Bath Consulting		1,197		(350	)		557			60		1,464
Academy of Training		49		(78	)		29			—		—
Communication Consulting		239		(200	)		(42	)		3		—
Asentus		—		765			(251	)		30		544
Total	$	3,278	$	(1,100	)	$	789		$	117	$	3,084

Two Thousand Eleven Acquisitions [Member]

Schedule of Purchase Price Allocation [Table Text Block]

BlessingWhite is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since October 1, 2012.

2011 Acquisitions	(Dollars in thousands)
Acquired company	Communication Consulting		Ultra Training		RWD		Beneast Training
Acquisition date	2/1/2011		4/1/2011		4/15/2011		8/1/2011
Cash purchase price	$	1,505	$	3,420	$	25,760	$	6,771
Fair value of contingent consideration		112		—		—		—
Total purchase price	$	1,617	$	3,420	$	25,760	$	6,771
Purchase price allocation:
Cash	$	—	$	347	$	81	$	2,236
Accounts receivable		—		340		13,667		375
Other assets		—		188		2,261		104
Property, plant and equipment		16		42		573		192
Intangible assets		390		1,412		3,726		2,706
Goodwill		1,211		2,336		13,059		3,790
Total assets		1,617		4,665		33,367		9,403
Accounts payable and accrued expenses		—		878		6,299		1,956
Billings in excess of costs and estimated earnings on uncompleted contracts		—		—		1,308		—
Deferred tax liability		—		367		—		676
Total liabilities		—		1,245		7,607		2,632
Net assets acquired	$	1,617	$	3,420	$	25,760	$	6,771

Two Thousand Ten Acquisitions [Member]

Schedule of Purchase Price Allocation [Table Text Block]

Van Hee is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since August 1, 2011.

2010 Acquisitions	(Dollars in thousands)
Acquired company	Marton House		Bath Consulting		Academy of Training
Acquisition date	4/1/2010		11/1/2010		12/1/2010
Cash purchase price	$	2,752	$	1,353	$	1,119
Fair value of contingent consideration		1,614		939		133
Total purchase price	$	4,366	$	2,292	$	1,252
Purchase price allocation:
Cash	$	5	$	106	$	52
Accounts receivable		1,441		945		380
Other assets		520		102		194
Property, plant and equipment		25		34		73
Customer-related intangible assets		1,044		486		303
Goodwill		3,136		1,518		905
Total assets		6,171		3,191		1,907
Accounts payable and accrued expenses		1,105		763		536
Billings in excess of costs and estimated earnings on uncompleted contracts		408		—		26
Deferred tax liability		292		136		93
Total liabilities		1,805		899		655
Net assets acquired	$	4,366	$	2,292	$	1,252

Two Thousand Twelve Acquisition [Member]

Schedule of Purchase Price Allocation [Table Text Block]

Acquisitions

The following tables summarize the purchase prices and purchase price allocations for the acquisitions completed during the years ended December 31, 2012, 2011 and 2010. A description of the acquired businesses during each year is summarized below each table.

2012 Acquisitions	(Dollars in thousands)
Acquired company	Information Horizons		Asentus		Rovsing Dynamics		Blessing White
Acquisition date	5/1/2012		6/29/2012		9/17/2012		10/1/2012
Cash purchase price	$	531	$	1,417	$	720	$	10,762
Fair value of contingent consideration		—		765		—		—
Estimated working capital adjustment		—		—		—		(769	)
Total purchase price	$	531	$	2,182	$	720	$	9,993
Purchase price allocation:
Cash	$	—	$	396	$	20	$	830
Accounts receivable		—		1,970		—		2,462
Other assets		—		411		898		192
Property, plant and equipment		26		46		5		76
Intangible assets		505		443		775		3,280
Goodwill		—		1,931		340		6,295
Total assets		531		5,197		2,038		13,135
Accounts payable and accrued expenses		—		2,708		428		1,548
Billings in excess of costs and estimated earnings on uncompleted contracts		—		221		890		282
Deferred tax liability		—		86		—		1,312
Total liabilities		—		3,015		1,318		3,142
Net assets acquired	$	531	$	2,182	$	720	$	9,993

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Property, Plant and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Machinery, equipment and vehicles	$ 15,043	$ 13,602
Furniture and fixtures	2,274	1,884
Leasehold improvements	1,058	928
Buildings	396	379
Property, plant and equipment	18,771	16,793
Accumulated depreciation and amortization	(13,260)	(11,231)
Property, plant and equipment, net	$ 5,511	$ 5,562

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Acquisitions (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Maximum contingent consideration due in 2013	$ 4,719
Maximum contingent consideration due in 2014	2,699
Maximum contingent consideration due Total	7,418
Milsom [Member]
Original range of potential undiscounted payments minimum	0
Original range of potential undiscounted payments maximum	3,600
Maximum contingent consideration due in 2013	302
Maximum contingent consideration due in 2014	0
Maximum contingent consideration due Total	302
Marton House [Member]
Original range of potential undiscounted payments minimum	0
Original range of potential undiscounted payments maximum	3,750
Maximum contingent consideration due in 2013	1,293
Maximum contingent consideration due in 2014	0
Maximum contingent consideration due Total	1,293
Bath Consulting [Member]
Original range of potential undiscounted payments minimum	0
Original range of potential undiscounted payments maximum	2,376
Maximum contingent consideration due in 2013	724
Maximum contingent consideration due in 2014	1,099
Maximum contingent consideration due Total	1,823
Communication Consulting [Member]
Original range of potential undiscounted payments minimum	0
Original range of potential undiscounted payments maximum	700
Maximum contingent consideration due in 2013	300
Maximum contingent consideration due in 2014	0
Maximum contingent consideration due Total	300
Asentus [Member]
Original range of potential undiscounted payments minimum	0
Original range of potential undiscounted payments maximum	3,700
Maximum contingent consideration due in 2013	2,100
Maximum contingent consideration due in 2014	1,600
Maximum contingent consideration due Total	$ 3,700

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Consolidated Statements of Operations [Parenthetical] (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Other income, interest	$ 29	$ 57	$ 105

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Acquisitions

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

(2) Acquisitions

The following tables summarize the purchase prices and purchase price allocations for the acquisitions completed during the years ended December 31, 2012, 2011 and 2010. A description of the acquired businesses during each year is summarized below each table.

2012 Acquisitions	(Dollars in thousands)
Acquired company	Information Horizons		Asentus		Rovsing Dynamics		Blessing White
Acquisition date	5/1/2012		6/29/2012		9/17/2012		10/1/2012
Cash purchase price	$	531	$	1,417	$	720	$	10,762
Fair value of contingent consideration		—		765		—		—
Estimated working capital adjustment		—		—		—		(769	)
Total purchase price	$	531	$	2,182	$	720	$	9,993
Purchase price allocation:
Cash	$	—	$	396	$	20	$	830
Accounts receivable		—		1,970		—		2,462
Other assets		—		411		898		192
Property, plant and equipment		26		46		5		76
Intangible assets		505		443		775		3,280
Goodwill		—		1,931		340		6,295
Total assets		531		5,197		2,038		13,135
Accounts payable and accrued expenses		—		2,708		428		1,548
Billings in excess of costs and estimated earnings on uncompleted contracts		—		221		890		282
Deferred tax liability		—		86		—		1,312
Total liabilities		—		3,015		1,318		3,142
Net assets acquired	$	531	$	2,182	$	720	$	9,993

Information Horizons

Effective May 1, 2012, we entered into an Asset Purchase Agreement with Information Horizons Limited (“Information Horizons”), an independent skills training provider located in the United Kingdom, to acquire its government funded training services business. The purchase price primarily consisted of a customer-related intangible asset of $505,000 which is being amortized over an estimated useful life of three years subsequent to the acquisition date. Information Horizons is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since May 1, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

Asentus

On June 29, 2012, through our wholly-owned subsidiaries in Canada and Europe, we acquired the business and operations of Asentus Consulting Group Ltd. and Asentus Europe B.V. (collectively, “Asentus”). Asentus is an international provider of IT technical training content, and live and virtual training event services, with offices in Vancouver, Canada, The Netherlands, Germany and France. The total purchase price for both companies was $1,417,000, of which $1,100,000 was paid in cash at closing and $317,000 was paid during the fourth quarter of 2012 subsequent to the finalization of a working capital calculation pursuant to the purchase agreement. In addition, the purchase agreement requires up to an additional $3,700,000 of consideration, contingent upon the achievement of certain earnings targets, as defined in the purchase agreement, during two successive twelve-month periods following the closing. Of the total contingent consideration, a maximum of $2,100,000 would be payable subsequent to the first twelve-month period following completion of the acquisition and a maximum of $1,600,000 would be payable subsequent to the second twelve-month period following completion of the acquisition. We recorded amortizable intangible assets as a result of the acquisition, which included $325,000 of customer-related intangible assets which are being amortized over an estimated useful life of five years and $118,000 of intellectual property which is being amortized over an estimated useful life of three years. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. The acquired Asentus business is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since July 1, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

Rovsing Dynamics

On September 17, 2012, we entered into an Asset Purchase Agreement with Rovsing Dynamics A/S (“Rovsing”), located in Denmark, a provider of vibration condition monitoring hardware and software, and on that date acquired the business and certain operating assets. We recorded a technology-related intangible asset of $775,000 related to proprietary software acquired which is being amortized over an estimated useful life of three years subsequent to the acquisition date. We expect that all of the goodwill recorded for financial statement purposes will be deductible for tax purposes. The acquired Rovsing business is included in the Energy Services segment and the results of its operations have been included in the consolidated financial statements since September 17, 2012. The pro-forma impact of the acquisition is not material to our results of operations.

BlessingWhite

On October 1, 2012, we completed the acquisition of BlessingWhite, a provider of leadership development and employee engagement solutions. The total purchase price was $10,762,000 in cash at closing and is subject to a working capital adjustment as defined in the purchase agreement. We expect to finalize the working capital adjustment in the first quarter of 2013. We recorded $3,280,000 of amortizable intangible assets as a result of the acquisition, which includes $1,761,000 of customer-related intangible assets which are being amortized over five years, $1,238,000 of intellectual property related to training course content which is being amortized over five years, $191,000 related to the acquired tradename which is being amortized over two years, and $90,000 related to acquired technology which is being amortized over three years from the acquisition date. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. BlessingWhite is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements since October 1, 2012. The pro-forma impact of the acquisition is not material to our results of operations.
 

2011 Acquisitions	(Dollars in thousands)
Acquired company	Communication Consulting		Ultra Training		RWD		Beneast Training
Acquisition date	2/1/2011		4/1/2011		4/15/2011		8/1/2011
Cash purchase price	$	1,505	$	3,420	$	25,760	$	6,771
Fair value of contingent consideration		112		—		—		—
Total purchase price	$	1,617	$	3,420	$	25,760	$	6,771
Purchase price allocation:
Cash	$	—	$	347	$	81	$	2,236
Accounts receivable		—		340		13,667		375
Other assets		—		188		2,261		104
Property, plant and equipment		16		42		573		192
Intangible assets		390		1,412		3,726		2,706
Goodwill		1,211		2,336		13,059		3,790
Total assets		1,617		4,665		33,367		9,403
Accounts payable and accrued expenses		—		878		6,299		1,956
Billings in excess of costs and estimated earnings on uncompleted contracts		—		—		1,308		—
Deferred tax liability		—		367		—		676
Total liabilities		—		1,245		7,607		2,632
Net assets acquired	$	1,617	$	3,420	$	25,760	$	6,771

Communication Consulting

On February 1, 2011, through our wholly-owned subsidiaries in Hong Kong and Shanghai, we acquired the training business and certain related assets of Cathay/Communication Consulting Limited (“Communication Consulting”), a Hong Kong-based training and consulting company with offices in Shanghai and Beijing, China, and Haryana (New Delhi) in India. Communication Consulting designs and delivers customized training solutions and specializes in the areas of leadership, communication skills, sales and customer service training. The purchase price allocation includes $390,000 of intangible assets, which consists of $230,000 for intellectual property and $160,000 for customer-related intangible assets, both of which are being amortized over five years from the acquisition date. We expect that all of the goodwill recorded for financial statement purposes will be deductible for tax purposes. The acquired Communication Consulting business is included in the Professional & Technical Services segment and the results of its operations have been included in the consolidated financial statements since February 1, 2011. The pro-forma impact of the acquisition is not material to our results of operations.

Ultra Training Ltd.

On April 1, 2011, we acquired Ultra Training Ltd., an independent skills training provider located in the United Kingdom. The purchase price allocation includes $1,412,000 of customer-related intangible assets which are being amortized over five years from the acquisition date. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. Ultra Training Ltd. is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since April 1, 2011. The pro-forma impact of the acquisition is not material to our results of operations.

RWD Technologies

On April 15, 2011, we completed the acquisition of certain assets of the consulting business of RWD Technologies, LLC, a Delaware limited liability company, and certain of its subsidiaries (collectively, “RWD”). RWD is a provider of human capital management and IT consulting services, business transformation and lean process improvement, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, energy, automotive, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector. We paid $27,980,000 of cash at closing. The purchase price was subsequently adjusted based on the final determination of the working capital of the acquired business as of the closing date in accordance with the Asset Purchase Agreement. In September 2011, the seller paid us $2,220,000 based on the final determination of working capital as of the acquisition date. The purchase price allocation includes $3,726,000 of intangible assets, which consists of $2,935,000 for customer-related intangible assets which are being amortized over 5.9 years and $791,000 related to the acquired tradename which is being amortized over two years from the acquisition date. We expect that all of the goodwill recorded for financial statement purposes will be deductible for tax purposes.

A portion of the acquired business is reported as a separate reportable segment named Performance Readiness Solutions (formerly RWD), and the other business units are included in the Professional & Technical Services and Sandy Training & Marketing segments. The results of RWD’s operations have been included in the consolidated financial statements since April 16, 2011.

The following unaudited pro-forma condensed consolidated results of operations assume that the acquisition of RWD was completed as of January 1 for each of the years below:

	Year ended
	December 31,
	2011		2010
	(In thousands, except per share amounts)
Revenue	$	354,609	$	324,587
Net income		18,605		8,279
Basic earnings per share		0.99		0.44
Diluted earnings per share		0.98		0.44

Beneast Training Ltd.

On August 1, 2011, we acquired the share capital of TK Holdings Ltd and its subsidiary Beneast Training Ltd. (collectively, “Beneast”), an independent skills training provider located in the United Kingdom. The purchase price allocation includes $2,706,000 of customer-related intangible assets which are being amortized over five years from the acquisition date. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. Beneast is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since August 1, 2011. The pro-forma impact of the acquisition is not material to our results of operations.

Van Hee

On July 29, 2011, we entered into an Asset Purchase Agreement with Van Hee Transport Limited (“Van Hee”), an independent skills training provider located in the United Kingdom, to acquire a contract to provide government funded training services. The purchase price was $770,000 in cash at closing and was recorded as an intangible asset which is being amortized over an estimated useful life of three years subsequent to the acquisition date. Van Hee is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since August 1, 2011.
 

2010 Acquisitions	(Dollars in thousands)
Acquired company	Marton House		Bath Consulting		Academy of Training
Acquisition date	4/1/2010		11/1/2010		12/1/2010
Cash purchase price	$	2,752	$	1,353	$	1,119
Fair value of contingent consideration		1,614		939		133
Total purchase price	$	4,366	$	2,292	$	1,252
Purchase price allocation:
Cash	$	5	$	106	$	52
Accounts receivable		1,441		945		380
Other assets		520		102		194
Property, plant and equipment		25		34		73
Customer-related intangible assets		1,044		486		303
Goodwill		3,136		1,518		905
Total assets		6,171		3,191		1,907
Accounts payable and accrued expenses		1,105		763		536
Billings in excess of costs and estimated earnings on uncompleted contracts		408		—		26
Deferred tax liability		292		136		93
Total liabilities		1,805		899		655
Net assets acquired	$	4,366	$	2,292	$	1,252

Marton House

On April 1, 2010, we completed the acquisition of Marton House Plc (“Marton House”), a provider of custom e-Learning content development with expertise in leadership and product sales training in the United Kingdom. Marton House is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since April 1, 2010. None of the goodwill recorded for financial statement purposes is deductible for tax purposes.

Bath Consulting

On November 1, 2010, we completed the acquisition of Bath Consulting Group (“Bath Consulting”), a niche leadership and organizational development consulting firm in the United Kingdom. Bath Consulting is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since November 1, 2010. None of the goodwill recorded for financial statement purposes is deductible for tax purposes.

Academy of Training

On December 1, 2010, we completed the acquisition of Academy of Training Ltd. (“AoT”), an independent training provider in the United Kingdom. AoT is included in the Learning Solutions segment and its results of operations have been included in the consolidated financial statements since December 1, 2010. None of the goodwill recorded for financial statement purposes is deductible for tax purposes.

Contingent Consideration

ASC Topic 805 requires that contingent consideration be recognized at fair value on the acquisition date and be re-measured each reporting period with subsequent adjustments recognized in the consolidated statement of operations. We estimate the fair value of contingent consideration liabilities based on financial projections of the acquired companies and estimated probabilities of achievement and discount the liabilities to present value using a weighted-average cost of capital. Contingent consideration is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisitions are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to, and volatility in, our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Below is a summary of the potential contingent consideration we may be required to pay in connection with completed acquisitions as of December 31, 2012 (dollars in thousands):

	Original range
	of potential	As of December 31, 2012
	undiscounted	Maximum contingent consideration due in
Acquisition:	payments	2013		2014			Total
Milsom	$0 - $3,600	$	302	$	—	$	$	302
Marton House	$0 - $3,750		1,293		—			1,293
Bath Consulting	$0 - $2,376		724		1,099			1,823
Communication Consulting	$0 - $700		300		—			300
Asentus	$0 - $3,700		2,100		1,600			3,700
Total		$	4,719	$	2,699	$	$	7,418

Below is a summary of the changes in the recorded amount of contingent consideration liabilities from December 31, 2011 to December 31, 2012 for each acquisition (dollars in thousands):

						Change in
			2012			Fair Value of			Foreign
	Liability as of		Additions			Contingent			Currency		Liability as of
Acquisition:	Dec. 31, 2011		(Payments)			Consideration			Translation		Dec. 31, 2012
Milsom	$	682	$	(437	)	$	44		$	13	$	302
Option Six		800		(800	)		—			—		—
Marton House		311		-			452			11		774
Bath Consulting		1,197		(350	)		557			60		1,464
Academy of Training		49		(78	)		29			—		—
Communication Consulting		239		(200	)		(42	)		3		—
Asentus		—		765			(251	)		30		544
Total	$	3,278	$	(1,100	)	$	789		$	117	$	3,084

As of December 31, 2012 and 2011, contingent consideration included in accounts payable and accrued expenses on the consolidated balance totaled $2,540,000 and $2,539,000, respectively. As of December 31, 2012 and 2011, we also had accrued contingent consideration totaling $544,000 and $739,000, respectively, which is included in other long-term liabilities on the consolidated balance sheet and represents the portion of contingent consideration estimated to be payable greater than twelve months from the balance sheet date.

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Income Taxes (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Sep. 30, 2012
Income tax expense	$ 13,114,000	$ 10,531,000	$ 8,120,000
Liability For Uncertain Tax Positions Current Reduction		800,000		1,418,000
Accrued Interest and Penalties Reduction		91,000		184,000
Effective Income Tax Rate, Continuing Operations	36.60%	37.10%	38.90%
Unrecognized Tax Benefits, Interest on Income Taxes Expense	(160,000)	(6,000)	93,000
Deferred Tax Assets, Operating Loss Carryforwards, Foreign	263,000
Valuation Allowance, Amount	263,000
Undistributed Earnings of Foreign Subsidiaries	17,700,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	$ (1,602,000)	$ (891,000)	$ 0
Effective income tax rate percentage, excluding impact of income tax benefits	41.10%	40.20%
Us Federal Income Tax [Member]
Effective Income Tax Rate, Continuing Operations	35.00%

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Business Segments (Details 4) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Total Assets	$ 244,434	$ 211,576
United States [Member]
Total Assets	188,596	165,482
United Kingdom [Member]
Total Assets	40,163	39,033
Other Regions [Member]
Total Assets	$ 15,675	$ 7,061

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Goodwill & Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

Changes in the carrying amount of goodwill by reportable business segment for the years ended December 31, 2012 and 2011 were as follows (in thousands):

				Professional						Performance
	Learning			& Technical						Readiness
	Solutions			Services			Sandy			Solutions		Energy		Total
Net book value at January 1, 2011
Goodwill	$	41,115		$	33,620		$	5,508		$	—	$	8,170	$	88,413
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total		39,036			25,790			—			—		8,170		72,996
2011 Activity:
Acquisitions		6,440			3,823			653			9,795		—		20,711
Foreign currency translation		(322	)		45			—			—		—		(277	)
Other		(84	)		(8	)		—			—		—		(92	)
Net book value at December 31, 2011
Goodwill		47,149			37,480			6,161			9,795		8,170		108,755
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total		45,070			29,650			653			9,795		8,170		93,338
2012 Activity:
Acquisitions		8,226			—			—			—		340		8,566
Foreign currency translation		903			10			—			—		12		925
Other		—			(8	)		—			—		—		(8	)
Net book value at December 31, 2012
Goodwill		56,278			37,482			6,161			9,795		8,522		118,238
Accumulated impairment losses		(2,079	)		(7,830	)		(5,508	)		—		—		(15,417	)
Total	$	54,199		$	29,652		$	653		$	9,795	$	8,522	$	102,821

Schedule Of Finite Lived Intangible Assets [Table Text Block]

Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands):

	Gross Carrying		Accumulated			Net Carrying
	Amount		Amortization			Amount
December 31, 2012
Customer relationships	$	22,193	$	(9,064	)	$	13,129
Tradenames		982		(700	)		282
Intellectual property and other		3,686		(1,225	)		2,461
	$	26,861	$	(10,989	)	$	15,872
December 31, 2011
Customer relationships	$	20,286	$	(6,361	)	$	13,925
Tradenames		791		(280	)		511
Contract backlog		374		(367	)		7
Intellectual property and other		1,844		(1,165	)		679
	$	23,295	$	(8,173	)	$	15,122

Schedule of Expected Amortization Expense [Table Text Block]

Amortization expense for intangible assets was $4,598,000, $3,418,000 and $2,256,000, for the years ended December 31, 2012, 2011 and 2010, respectively. Estimated amortization expense for intangible assets included in our consolidated balance sheet as of December 31, 2012 is as follows (in thousands):

Fiscal year ending:
2013	$	4,866
2014		4,440
2015		3,045
2016		2,051
2017		988
Thereafter		482
Total	$	15,872

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Description of Business and Significant Accounting Policies (Details Textual) (USD $)	0 Months Ended	1 Months Ended					12 Months Ended
	Apr. 15, 2011	Oct. 31, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Single Automotive Customer [Member]	Dec. 31, 2011 Single Automotive Customer [Member]	Dec. 31, 2012 Accounts Receivable [Member] Single Automotive Customer [Member]	Dec. 31, 2011 Accounts Receivable [Member] Single Automotive Customer [Member]	Dec. 31, 2012 Software Development [Member] Minimum [Member]	Dec. 31, 2012 Software Development [Member] Maximum [Member]	Dec. 31, 2012 Automotive Industry [Member]	Dec. 31, 2011 Automotive Industry [Member]	Dec. 31, 2010 Automotive Industry [Member]	Dec. 31, 2012 United States Government [Member]	Dec. 31, 2011 United States Government [Member]	Dec. 31, 2010 United States Government [Member]
Segment Concentration Risk Percentage											17.00%	17.00%	18.00%	12.00%	14.00%	22.00%
Maximum Concentration Risk Percentage											10.00%
Negative Cash Book Balance			$ 0	$ 1,888,000
Finite-Lived Intangible Asset, Useful Life	5 years 10 months 24 days	3 years							3 years	5 years
Equity Method Investment, Ownership Percentage			5.00%
Accounts Receivable, Net, Current			$ 83,597,000	$ 67,134,000	$ 8,986,000	$ 6,329,000
Concentration Risk, Percentage							11.00%	9.00%

XML

Business Segments

12 Months Ended

Dec. 31, 2012

Business Segments

Segment Reporting Disclosure [Text Block]

(12) Business Segments

As of December 31, 2012, we operated through five reportable business segments: (i) Learning Solutions, (ii) Professional & Technical Services, (iii) Sandy Training & Marketing, (iv) Performance Readiness Solutions (formerly RWD), and (v) Energy Services. Our Learning Solutions segment represents an aggregation of two operating groups in accordance with the aggregation criteria in U.S. GAAP, while all of the other reportable segments each represent one operating group. We are organized by operating group primarily based upon the markets served by each group and/or the services performed. Each operating group consists of business units which are focused on providing specific products and services to certain classes of customers or within targeted markets. Marketing and communications, accounting, finance, legal, human resources, information systems and other administrative services are organized at the corporate level. Business development and sales resources are aligned with operating groups to support existing customer accounts and new customer development.

Further information regarding our business segments is discussed below.

Learning Solutions. The Learning Solutions segment delivers training, curriculum design and development, e-Learning services, system hosting, training business process outsourcing and consulting services primarily to large companies in the electronics and semiconductors, healthcare, software, financial and other industries as well as to government agencies. The ability to deliver a wide range of training services on a global basis allows this segment to take over the entire learning function for the client, including their training personnel. The October 2012 acquisition of BlessingWhite added proprietary leadership training content and employee engagement tools and services to this segment’s offerings.

Professional & Technical Services. This segment has over four decades of experience providing training, consulting, engineering and technical services, including lean consulting, emergency preparedness, safety and regulatory compliance, chemical demilitarization and environmental services primarily to large companies in the manufacturing, steel, pharmaceutical and petrochemical industries, federal and state government agencies and large government contractors. This segment also provides services to users of alternative fuels, including designing and constructing liquefied natural gas (LNG), liquid to compressed natural gas (LCNG) and hydrogen fueling stations, as well as supplying fuel and equipment.

Sandy Training & Marketing. The Sandy segment provides custom product sales training and has been a leader in serving manufacturing customers in the U.S. automotive industry for over 30 years. Sandy provides custom product sales training designed to better educate customer sales forces with respect to new vehicle features and designs, in effect rapidly increasing the sales force knowledge base and enabling them to address detailed customer queries. Furthermore, Sandy helps our clients assess their customer relationship marketing strategy, measure performance against competitors and connect with their customers on a one-to-one basis. This segment also provides technical training services to automotive manufacturers as well as customers in other industries.

Performance Readiness Solutions. Formerly named RWD, this segment represents a portion of the consulting business acquired from RWD Technologies, LLC in April 2011. Certain of the other acquired RWD business units are managed within the Professional & Technical Services and Sandy segments discussed above. Performance Readiness Solutions provides human capital management and IT consulting services, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector.

Energy Services. The Energy Services segment provides engineering services, products and training primarily to electric power utilities. Our proprietary EtaPro^TM Performance and Condition Monitoring System provides a suite of performance and reliability solutions for power generation plants and is installed at over 1,000 power generating units in 34 countries. In addition to providing custom training solutions, this segment provides web-based training through our GPiLearn^TM portal, which offers over 1,300 courses to over 30,000 power plant personnel in the U.S. and in over 40 countries.

We do not allocate the following items to the segments: other income, interest expense, gain (loss) on change in fair value of contingent consideration and income tax expense. Inter-segment revenue is eliminated in consolidation and is not significant.

Prior to the merger of GP Strategies Corporation and General Physics on December 31, 2011, we did not allocate certain corporate selling, general and administrative (SG&A) expenses to our operating segments. After the merger, we began allocating these costs to the operating segments on a consistent basis as other SG&A expenses. As a result, we have reclassified the prior period operating income by segment amounts below to allocate the corporate SG&A expenses that were previously not allocated.

The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income tax expense (in thousands):

	Years ended December 31,
	2012			2011			2010
Revenue:
Learning Solutions	$	161,455		$	130,392		$	118,922
Professional & Technical Services		87,844			85,285			70,893
Sandy Training & Marketing		70,243			54,604			47,153
Performance Readiness Solutions		55,794			40,079			—
Energy Services		26,236			22,807			22,958
	$	401,572		$	333,167		$	259,926
Operating income:
Learning Solutions	$	16,487		$	9,700		$	9,074
Professional & Technical Services		5,717			7,526			3,310
Sandy Training & Marketing		4,897			3,018			1,518
Performance Readiness Solutions		2,548			601			—
Energy Services		6,822			5,540			5,322
Gain on reversal of deferred rent liability		—			1,041			—
Gain (loss) on change in fair value of contingent consideration, net		(789	)		517			1,313
Operating income		35,682			27,943			20,537
Interest expense		(269	)		(209	)		(236	)
Other income		389			657			551
Income before income tax expense	$	35,802		$	28,391		$	20,852

Additional information relating to our business segments is as follows (in thousands):

	December 31,
	2012		2011
Identifiable assets:
Learning Solutions	$	116,753	$	95,389
Professional & Technical Services		56,160		59,675
Sandy Training & Marketing		24,250		16,819
Performance Readiness Solutions		27,472		25,747
Energy Services		19,799		13,946
Total assets	$	244,434	$	211,576

Corporate and other assets which consist primarily of cash and cash equivalents, other assets, and deferred tax assets and liabilities are allocated to the segments based on their respective percentage of consolidated revenues.

	Years ended December 31,
	2012		2011		2010
Additions to property, plant and equipment:
Learning Solutions	$	1,004	$	1,116	$	380
Professional & Technical Services		299		1,068		336
Sandy Training & Marketing		38		6		9
Performance Readiness Solutions		61		161		—
Energy Services		203		48		31
Corporate and other		931		1,576		775
	$	2,536	$	3,975	$	1,531
Depreciation and amortization:
Learning Solutions	$	3,794	$	2,695	$	1,824
Professional & Technical Services		439		294		327
Sandy Training & Marketing		428		424		478
Performance Readiness Solutions		1,102		871		—
Energy Services		357		353		386
Corporate and other		1,851		1,550		1,215
	$	7,971	$	6,187	$	4,230

Information about our revenue in different geographic regions, which are attributable to our wholly owned subsidiaries located in the United Kingdom, Canada, Netherlands, Denmark, Germany, France, Mexico, Colombia, Singapore, China and India is as follows (in thousands):

	Years ended December 31,
	2012		2011		2010
United States	$	323,867	$	274,010	$	214,194
United Kingdom		61,102		48,151		36,518
Other		16,603		11,006		9,214
	$	401,572	$	333,167	$	259,926

 Information about our total assets in different geographic regions is as follows (in thousands):

	December 31,
	2012		2011
United States	$	188,596	$	165,482
United Kingdom		40,163		39,033
Other		15,675		7,061
	$	244,434	$	211,576