GP Strategies Reports Record Second Quarter 2014 Financial Results

PR Newswire

COLUMBIA, Md., July 31, 2014 /PRNewswire/ -- Global performance improvement solutions provider GP Strategies Corporation (GPX) today reported financial results for the quarter ended June 30, 2014.

Second Quarter 2014 Highlights:

  • Revenue of $134.9 million for second quarter of 2014 compared to $104.9 million for second quarter of 2013, up 29%
  • Operating income of $13.8 million for second quarter of 2014 compared to $8.6 million for second quarter of 2013, up 61%
  • Diluted earnings per share of $0.42 for second quarter of 2014 compared to $0.27 per share for second quarter of 2013
  • EBITDA of $16.4 million, or 12% of revenue, for second quarter of 2014 compared to $10.6 million, or 10% of revenue, for second quarter of 2013

The Company's revenue increased $30.0 million or 28.6% during the second quarter of 2014 compared to the second quarter of 2013. The Company achieved organic revenue growth of 24% during the second quarter. All of the Company's operating segments reported revenue growth for the quarter, with the largest increases achieved by the Learning Solutions and Energy Services segments. Gross profit increased 34.6% during the quarter to $24.8 million, or 18.4% of revenue, for the second quarter of 2014 from $18.4 million, or 17.5% of revenue, for the second quarter of 2013. SG&A expense increased $1.6 million or 16.0% during the second quarter of 2014 largely due to increased costs associated with the Company's global expansion to support recent outsourcing contracts. Income before income tax expense was $13.8 million for the second quarter of 2014 compared to $8.6 million for the second quarter of 2013. Net income was $8.1 million, or $0.42 per share, for the second quarter of 2014 compared to $5.2 million, or $0.27 per share, for the second quarter of 2013.  

"In the second quarter of 2014, GP Strategies achieved both record revenue and EBITDA," commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "All of the Company's segments showed organic revenue growth for the quarter. The Company achieved these record results while continuing to invest in building out its infrastructure to support its growing global business. We are pleased with the Company's execution and progress."

Balance Sheet and Cash Flow Highlights

As of June 30, 2014, the Company had cash and cash equivalents of $6.0 million compared to $5.6 million as of December 31, 2013. The Company had no long-term debt outstanding as of June 30, 2014 and had $17.8 million of short-term borrowings under its $50 million line of credit as of June 30, 2014. Cash used in operating activities was $1.9 million for the six months ended June 30, 2014 compared to $5.5 million of cash provided by operating activities for the same period in 2013. The decrease in cash from operations was largely due to an increase in accounts receivable and unbilled receivables during the first half of 2014 compared to the same period in 2013. In addition, the Company used $10.0 million during the second quarter of 2014 and $11.0 million during the six months ended June 30, 2014 to complete acquisitions and pay contingent consideration obligations related to previously completed acquisitions.

Investor Call

The Company has scheduled an investor conference call for 10:00 a.m. EDT on July 31, 2014. In addition to prepared remarks from management, there will be a question and answer session on the call. The dial-in numbers for the live conference call are 855-258-3671 or 804-681-3894, using conference ID number 21728636. A telephone replay of the call will also be available beginning at 12:00 p.m. on July 31st, until 12:00 p.m. on August 14th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21728636. A replay will also be available on GP Strategies' website shortly after the conclusion of the call.

Presentation of Non-GAAP Information

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

About GP Strategies

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

Forward-Looking Statements

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

 


TABLES FOLLOW




GP STRATEGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)



Quarters ended

Six months ended


June 30,

June 30,







2014

2013

2014

2013






Revenue

$134,918

$104,899

$252,798

$206,272

Cost of revenue

110,151

86,504

209,676

171,696

   Gross profit

24,767

18,395

43,122

34,576

Selling, general and administrative expenses                     

11,462

9,880

23,051

18,969

Gain on change in fair value of 
  contingent consideration, net

 

481

 

45

 

858

 

292

   Operating income

13,786

8,560

20,929

15,899

Interest expense

77

66

282

166

Other income

68

93

257

322

   Income before income tax expense

13,777

8,587

20,904

16,055

Income tax expense

5,664

3,340

8,474

5,883

   Net income

$   8,113

$   5,247

$  12,430

$  10,172






 

Basic weighted average shares outstanding

 

19,144

 

19,082

 

19,142

 

19,071

Diluted weighted average shares outstanding

19,415

19,334

19,418

19,315

 

Per common share data:





  Basic earnings per share

$    0.42

$    0.27

$     0.65

$     0.53

  Diluted earnings per share

$    0.42

$    0.27

$     0.64

$     0.53






Other data:

  EBITDA (1)

$   16,397

 

$   10,645

 

$   26,137

 

$   20,171





(1)

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

 

 


GP STRATEGIES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands)
(Unaudited)



Quarters ended

Six months ended


June 30,

June 30,







2014

2013

2014

2013

Revenue by segment:





Learning Solutions

$  61,970

$  45,185

$114,937

$  87,919

Professional & Technical Services

18,789

17,048

38,699

35,063

Sandy Training & Marketing

20,223

20,134

34,481

35,132

Performance Readiness Solutions

14,130

12,954

27,139

28,454

Energy Services

19,806

9,578

37,542

19,704

Total revenue

$134,918

$104,899

$252,798

$206,272






Gross profit by segment:





Learning Solutions

$  8,857

$  8,198

$  15,460

$  15,369

Professional & Technical Services

3,320

3,281

7,434

5,965

Sandy Training & Marketing

3,298

2,936

5,208

4,862

Performance Readiness Solutions

2,322

1,512

4,055

3,490

Energy Services

6,970

2,468

10,965

4,890

Total gross profit

$  24,767

$  18,395

$ 43,122

$ 34,576






Operating income by segment:





Learning Solutions

$  3,263

$  3,554

$  4,311

$  6,766

Professional & Technical Services

1,640

1,747

4,001

2,805

Sandy Training & Marketing

1,604

1,193

2,181

1,822

Performance Readiness Solutions

1,098

316

1,599

895

Energy Services

5,700

1,705

7,979

3,319

Gain on change in fair value of
      contingent consideration, net

 

481

 

45

 

858

 

292

Total operating income

$  13,786

$  8,560

$  20,929

$  15,899






Supplemental Cash Flow Information:





Net cash provided by (used in) operating activities

$  (2,638)

$       163

$  (1,917)

$   5,479

Capital expenditures

(528)

(1,331)

(1,444)

(2,161)

Free cash flow

$  (3,166)

$  (1,168)

$  (3,361)

$   3,318

 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliation – EBITDA (2)
(In thousands)
(Unaudited)



Quarters ended

Six months ended


June 30,

June 30,







2014

2013

2014

2013

Net income

$  8,113

$  5,247

$ 12,430

$ 10,172

Interest expense

77

66

282

166

Income tax expense

5,664

3,340

8,474

5,883

Depreciation and amortization                                            

2,543

1,992

4,951

3,950

EBITDA

$  16,397

$  10,645

$ 26,137

$ 20,171







(2)

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

 

 

GP STRATEGIES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)






June 30,


December 31,





2014


2013





(Unaudited)



Current assets:







   Cash and cash equivalents




$       6,026


$        5,647

   Accounts and other receivables




112,807


94,662

   Costs and estimated earnings in excess of
         billings on uncompleted contracts




 

34,657


 

22,706

   Prepaid expenses and other current assets




13,659


13,523

      Total current assets




167,149


136,538

Property, plant and equipment, net




8,865


9,231

Goodwill and other intangibles, net




144,088


132,116

Other assets




1,727


2,271

      Total assets




$   321,829


$   280,156








Current liabilities:







Short-term borrowings




$     17,771


$          407

   Accounts payable and accrued expenses




60,975


55,339

   Billings in excess of costs and estimated
         earnings on uncompleted contracts    




 

23,315


 

22,062

      Total current liabilities




102,061


77,808

Other noncurrent liabilities




12,080


9,321

      Total liabilities




114,141


87,129

Total stockholders' equity




207,688


193,027

      Total liabilities and stockholders' equity




$ 321,829


$   280,156




© 2014 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.

 

View photo

.
GP Strategies Corporation logo

Logo - http://photos.prnewswire.com/prnh/20130502/PH05881LOGO

View Comments (0)