EX-99.1 2 v343514_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

NEWS RELEASE

 

GP Strategies Reports First Quarter 2013 Financial Results

 

Elkridge, MD. May 2, 2013. Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended March 31, 2013.

 

Overview of First Quarter 2013 Results:

 

·Revenue of $101.4 million for first quarter of 2013 compared to $93.6 million for first quarter of 2012
·Diluted earnings per share of $0.26 for first quarter of 2013 compared to $0.23 per share for first quarter of 2012
·EBITDA of $9.5 million for first quarter of 2013 compared to $9.2 million for first quarter of 2012

 

The Company’s revenue increased $7.8 million or 8.3% during the first quarter of 2013 compared to the first quarter of 2012. The revenue growth is primarily attributable to acquisitions completed during 2012. The Company also reported overall organic growth during the quarter, with notable performance by the Sandy and Performance Readiness Solutions segments which achieved double-digit organic revenue growth in the quarter, offset by revenue declines in the Professional & Technical Services segment due to project completions. Gross profit was $16.2 million, or 16.0% of revenue, for the first quarter of 2013 compared to $15.6 million, or 16.7% of revenue, for the first quarter of 2012. The decline in gross margin is largely due to a $0.9 million increase in medical benefits expense due to higher than usual claims under our self-insured employee medical plan during the first quarter of 2013. Income before income tax expense was $7.5 million for the first quarter of 2013 compared to $7.3 million for the first quarter of 2012. Net income was $4.9 million, or $0.26 per share, for the first quarter of 2013 compared to $4.4 million, or $0.23 per share, for the first quarter of 2012. Net income for the first quarter of 2013 includes a $0.4 million non-recurring income tax benefit.

 

“GP Strategies continued to show overall improvement of its results in the first quarter of 2013,” commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. “We have developed a unique platform in the training industry through the combination of our organic operations supplemented by strategic acquisitions. In the first quarter, the Company increased its business development efforts to support larger outsourcing opportunities and invested in its proprietary software technology at a greater level than in the past. We are optimistic that these investments will translate into growth in future quarters.”

 

 
 

 

Balance Sheet and Cash Flow Highlights

 

As of March 31, 2013, the Company had cash and cash equivalents of $11.0 million compared to $7.8 million as of December 31, 2012. The Company had no short-term borrowings or long-term debt outstanding as of March 31, 2013. Cash provided by operating activities was $5.3 million for the quarter ended March 31, 2013 compared to $7.0 million for the same period in 2012.

 

Investor Call

 

The Company has scheduled an investor conference call for 10:00 a.m. ET on May 2, 2013. In addition to prepared remarks from management, there will be a question and answer session on the call. The dial-in numbers for the live conference call are 800-754-1336 or 212-231-2932, using conference ID number 21656158. A telephone replay of the call will also be available beginning at 12:00 p.m. on May 2nd, until 12:00 p.m. on May 16th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21656158.

 

Presentation of Non-GAAP Information

 

This press release contains non-GAAP financial measures, including EBITDA (earnings before interest, income taxes, depreciation and amortization). The Company believes this non-GAAP financial measure is useful to investors in evaluating the Company’s results. This measure should be considered in addition to, and not as a replacement for, or superior to, either net income, as an indicator of the Company’s operating performance, or cash flow, as a measure of the Company’s liquidity. In addition, because EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. For a reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation – EBITDA, along with related footnotes, below.

 

About GP Strategies

 

GP Strategies Corporation (NYSE: GPX) is a global performance improvement solutions provider of training, eLearning solutions, management consulting and engineering services. GP Strategies’ solutions improve the effectiveness of organizations by delivering innovative and superior training, consulting and business improvement services, customized to meet the specific needs of its clients. Clients include Fortune 500 companies, manufacturing, process and energy industries, and other commercial and government customers. Additional information may be found at www.gpstrategies.com.

 

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Forward-Looking Statements

 

We make statements in this press release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our periodic reports under the forward-looking statements and risk factors sections. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

TABLES FOLLOW

 

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)

 

   Three months ended 
   March 31, 
   2013   2012 
         
Revenue  $101,373   $93,605 
Cost of revenue   85,192    77,993 
Gross profit   16,181    15,612 
Selling, general and administrative expenses   9,089    8,288 
Gain (loss) on change in fair value of contingent consideration, net   247    (40)
Operating income   7,339    7,284 
Interest expense   100    40 
Other income   229    90 
Income before income tax expense   7,468    7,334 
Income tax expense   2,543    2,950 
Net income  $4,925   $4,384 
           
Basic weighted average shares outstanding   19,060    18,830 
Diluted weighted average shares outstanding   19,296    19,188 
           
Per common share data:          
Basic earnings per share  $0.26   $0.23 
Diluted earnings per share  $0.26   $0.23 
           
Other data:  $9,526   $9,232 
EBITDA (1)          

 

(1)The term (earnings before interest, income taxes, depreciation and amortization) is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results. For a reconciliation of this non-GAAP financial measure to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation – EBITDA, along with related footnotes, below.

 

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(Dollars in thousands)

(Unaudited)

 

   Quarters ended 
   March 31, 
   2013   2012 
Revenue by segment:          
Learning Solutions (2)  $42,734   $35,037 
Professional & Technical Services (2)   18,015    22,265 
Sandy Training & Marketing   14,998    13,322 
Performance Readiness Solutions   15,500    13,831 
Energy Services (2)   10,126    9,150 
Total revenue  $101,373   $93,605 
Gross profit by segment:          
Learning Solutions (2)  $7,171   $6,466 
Professional & Technical Services (2)   2,684    3,573 
Sandy Training & Marketing   1,926    1,542 
Performance Readiness Solutions   1,978    1,575 
Energy Services (2)   2,422    2,456 
Total gross profit  $16,181   $15,612 
Operating income by segment:          
Learning Solutions (2)   $3,212   $3,395 
Professional & Technical Services (2)   1,058    1,593 
Sandy Training & Marketing   629    303 
Performance Readiness Solutions   579    245 
Energy  Services (2)   1,614    1,788 
Gain (loss) on change in fair value of contingent consideration, net   247    (40)
Total operating income  $7,339   $7,284 
Supplemental Cash Flow Information:          
Net cash provided by operating activities  $5,316   $6,963 
Capital expenditures   (830)   (925)
Free cash flow  $4,486   $6,038 

 

(2)Effective January 1, 2013, we made changes to our organizational structure to transfer the management responsibility of certain business units between segments, which resulted in a change in the composition of certain of our operating segments. The changes primarily consisted of: (i) the alternative fuels business unit transferred from Professional & Technical Services to Energy Services; (ii) a business unit which predominantly provides content development services to U.S. government and commercial clients transferred from Learning Solutions to Professional & Technical Services; and (iii) our foreign operations in India and China and a portion of our Canadian operations transferred from Professional & Technical Services to Learning Solutions. The segment financial information above has been reclassified for all prior periods to reflect these changes and conform to the current quarter’s presentation.

 

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation –EBITDA (3)

(Dollars in thousands)

(Unaudited)

 

   Three months ended 
   March 31, 
   2013   2012 
         
Net income  $4,925   $4,384 
Interest expense   100    40 
Income tax expense   2,543    2,950 
Depreciation and amortization   1,958    1,858 
EBITDA  $9,526   $9,232 

 

(3)Earnings before interest, income taxes, depreciation and amortization (EBITDA) is a widely used non-GAAP financial measure of operating performance. It is presented as supplemental information that the Company believes is useful to investors to evaluate its results because it excludes certain items that are not directly related to the Company’s core operating performance. EBITDA is calculated by adding back to net income interest expense, income tax expense, depreciation and amortization. EBITDA should not be considered as substitutes either for net income, as an indicator of the Company’s operating performance, or for cash flow, as a measure of the Company’s liquidity. In addition, because EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.

 

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GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

   March 31,   December 31, 
   2013   2012 
   (Unaudited)     
Current assets:          
Cash and cash equivalents  $11,047   $7,761 
Accounts and other receivables   70,887    83,597 
Costs and estimated earnings in excess of billings on uncompleted contracts   20,866    16,979 
Prepaid expenses and other current assets   10,330    10,143 
Total current assets   113,130    118,480 
Property, plant and equipment, net   5,640    5,511 
Goodwill and other intangibles, net   116,176    118,693 
Other assets   1,526    1,750 
Total assets  $236,472   $244,434 
           
Current liabilities:          
Accounts payable and accrued expenses  $40,329   $47,457 
Billings in excess of costs and estimated earnings on uncompleted contracts   18,107    21,877 
Total current liabilities   58,436    69,334 
Other noncurrent liabilities   7,173    7,763 
Total liabilities   65,609    77,097 
Total stockholders’ equity   170,863    167,337 
Total liabilities and stockholders’ equity  $236,472   $244,434 

 

© 2013 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.

 

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

 

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