COLUMBIA, Md., July 28, 2016 /PRNewswire/ — Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2016.
Overview:
- Revenue of $125.5 million for second quarter of 2016 compared to $125.7 million for second quarter of 2015
- Gross profit of $20.3 million, or 16.2% of revenue, for second quarter of 2016 (which includes $0.5 million of severance costs) compared to $20.1 million, or 16.0% of revenue, for second quarter of 2015
- Diluted earnings per share of $0.29 for second quarter of 2016 compared to $0.27 per share for second quarter of 2015
- Cash flow from operations of $10.0 million for first half of 2016 compared to $3.1 million for first half of 2015
While the Company’s reported revenue was flat in the second quarter of 2016 compared to the second quarter of 2015, it achieved 9% revenue growth in its Sandy Training & Marketing segment and 4% revenue growth in its Learning Solutions segment during the second quarter due to an increase in training services with new and existing customers. The growth in those segments was offset by a continued downturn in the Professional & Technical Services segment and a $1.9 million decline in U.S. dollar reported revenue due to changes in foreign currency exchange rates.
Operating income increased to $8.2 million for the second quarter of 2016 from $8.0 million for the second quarter of 2015. Operating income for the second quarter of 2016 included $0.5 million, or $0.02 per share, of severance costs related to continued cost cutting measures. Income before income taxes was $8.0 million for the second quarter of 2016 compared to $7.4 million for the second quarter of 2015. Net income was $4.9 million, or $0.29 per share, for the second quarter of 2016 compared to $4.7 million, or $0.27 per share, for the second quarter of 2015.
"The second quarter of 2016 showed improved operating results compared to last year, despite the continued softness in the Professional & Technical Services segment," stated Scott N. Greenberg, Chief Executive Officer. "Increased gross profit in the Learning Solutions segment, combined with both revenue and gross profit increases in the Sandy Training & Marketing segment, were the highlights of the quarter. In addition, we are seeing more opportunities being generated from our global initiatives. We have also resumed our acquisition strategy and are currently evaluating several opportunities. The continued development of our global platform positions GP Strategies as a leader in the global training and performance improvement industry."
Balance Sheet and Cash Flow Highlights
As of June 30, 2016, the Company had cash and cash equivalents of $14.9 million compared to $21.0 million as of December 31, 2015. The Company had $17.8 million of long-term debt outstanding as of June 30, 2016. In addition, the Company had $42.5 million of short-term borrowings outstanding and $20.0 million of available borrowings under its line of credit as of June 30, 2016.
Cash provided by operating activities was $10.0 million for the six months ended June 30, 2016 compared to $3.1 million for the same period in 2015. During the six months ended June 30, 2016 and 2015, the Company repurchased approximately 340,000 and 33,000 shares, respectively, of its common stock in the open market for a total cost of approximately $8.0 million and $1.1 million, respectively. As of June 30, 2016, there was approximately $6.1 million available for future repurchases under the buyback program.
Investor Call
The Company has scheduled an investor conference call for 10:00 a.m. EDT on July 28, 2016. 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 800-771-6759 or 212-231-2931, using conference ID number 21815530. A telephone replay of the call will also be available beginning at 12:00 p.m. on July 28th, until 12:00 p.m. on August 11th. To listen to the replay, dial 800-633-8284 or 402-977-9140, using conference ID number 21815530. 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 (NYSE: GPX) is a global performance improvement solutions provider of sales and technical 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, |
|||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||
Revenue |
$ |
125,542 |
$ |
125,665 |
$ |
241,298 |
$ |
240,918 |
||||
Cost of revenue |
105,198 |
105,589 |
203,027 |
201,707 |
||||||||
Gross profit |
20,344 |
20,076 |
38,271 |
39,211 |
||||||||
Selling, general and administrative expenses |
12,279 |
12,007 |
24,249 |
23,606 |
||||||||
Gain (loss) on change in fair value of contingent consideration, net |
88 |
(55) |
(71) |
(258) |
||||||||
Operating income |
8,153 |
8,014 |
13,951 |
15,347 |
||||||||
Interest expense |
359 |
306 |
604 |
671 |
||||||||
Other income (expense) |
175 |
(310) |
629 |
(535) |
||||||||
Income before income tax expense |
7,969 |
7,398 |
13,976 |
14,141 |
||||||||
Income tax expense |
3,056 |
2,684 |
5,263 |
5,320 |
||||||||
Net income |
$ |
4,913 |
$ |
4,714 |
$ |
8,713 |
$ |
8,821 |
||||
Basic weighted average shares outstanding |
16,677 |
17,178 |
16,718 |
17,169 |
||||||||
Diluted weighted average shares outstanding |
16,768 |
17,354 |
16,799 |
17,334 |
||||||||
Per common share data: |
||||||||||||
Basic earnings per share |
$ |
0.29 |
$ |
0.27 |
$ |
0.52 |
$ |
0.51 |
||||
Diluted earnings per share |
$ |
0.29 |
$ |
0.27 |
$ |
0.52 |
$ |
0.51 |
||||
Other data: |
||||||||||||
EBITDA(1) |
$ |
10,038 |
$ |
9,688 |
$ |
18,055 |
$ |
18,864 |
||||
(1) The term EBITDA (earnings before interest, income taxes, depreciation and amortization) is a non- |
GP STRATEGIES CORPORATION AND SUBSIDIARIES |
||||||||||||
SUPPLEMENTAL FINANCIAL INFORMATION |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Quarters ended |
Six months ended |
|||||||||||
June 30, |
June 30, |
|||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||
Revenue by segment: |
||||||||||||
Learning Solutions |
$ |
52,706 |
$ |
50,755 |
$ |
102,612 |
$ |
102,584 |
||||
Professional & Technical Services |
26,024 |
30,066 |
51,853 |
59,963 |
||||||||
Sandy Training & Marketing |
27,374 |
25,199 |
49,198 |
39,928 |
||||||||
Performance Readiness Solutions |
19,438 |
19,645 |
37,635 |
38,443 |
||||||||
Total revenue |
$ |
125,542 |
$ |
125,665 |
$ |
241,298 |
$ |
240,918 |
||||
Gross profit by segment: |
||||||||||||
Learning Solutions |
$ |
9,572 |
$ |
8,387 |
$ |
19,276 |
$ |
16,734 |
||||
Professional & Technical Services |
4,106 |
5,829 |
7,990 |
12,242 |
||||||||
Sandy Training & Marketing |
3,830 |
3,427 |
6,281 |
5,403 |
||||||||
Performance Readiness Solutions |
2,836 |
2,433 |
4,724 |
4,832 |
||||||||
Total gross profit |
$ |
20,344 |
$ |
20,076 |
$ |
38,271 |
$ |
39,211 |
||||
Supplemental Cash Flow Information: |
||||||||||||
Net cash provided by operating activities |
$ |
1,419 |
$ |
3,197 |
$ |
9,982 |
3,125 |
|||||
Capital expenditures |
(347) |
(600) |
(922) |
(1,350) |
||||||||
Free cash flow |
$ |
1,072 |
$ |
2,597 |
$ |
9,060 |
1,775 |
GP STRATEGIES CORPORATION AND SUBSIDIARIES |
||||||||||||
Non-GAAP Reconciliation – EBITDA (2) |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Quarters ended |
Six months ended |
|||||||||||
June 30, |
June 30, |
|||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||
Net income |
$ |
4,913 |
$ |
4,714 |
$ |
8,713 |
$ |
8,821 |
||||
Interest expense |
359 |
306 |
604 |
671 |
||||||||
Income tax expense |
3,056 |
2,684 |
5,263 |
5,320 |
||||||||
Depreciation and amortization |
1,710 |
1,984 |
3,475 |
4,052 |
||||||||
EBITDA |
$ |
10,038 |
$ |
9,688 |
$ |
18,055 |
$ |
18,864 |
||||
(2) Earnings before interest, income taxes, depreciation and amortization (EBITDA) is a widely used non- |
GP STRATEGIES CORPORATION AND SUBSIDIARIES |
|||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||
(Dollars in thousands) |
|||||||||
June 30, |
December 31, |
||||||||
2016 |
2015 |
||||||||
(Unaudited) |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
14,860 |
$ |
21,030 |
|||||
Accounts and other receivables |
88,803 |
90,912 |
|||||||
Costs and estimated earnings in excess of |
45,621 |
46,061 |
|||||||
Prepaid expenses and other current assets |
10,163 |
9,173 |
|||||||
Total current assets |
159,447 |
167,176 |
|||||||
Property, plant and equipment, net |
5,401 |
6,245 |
|||||||
Goodwill and other intangible assets, net |
128,109 |
128,196 |
|||||||
Other assets |
2,913 |
733 |
|||||||
Total assets |
$ |
295,870 |
$ |
302,350 |
|||||
Current liabilities: |
|||||||||
Short-term borrowings |
$ |
42,482 |
$ |
34,084 |
|||||
Current portion of long-term debt |
13,333 |
13,333 |
|||||||
Accounts payable and accrued expenses |
55,444 |
61,071 |
|||||||
Billings in excess of costs and estimated |
15,901 |
18,366 |
|||||||
Total current liabilities |
127,160 |
126,854 |
|||||||
Long-term debt |
4,444 |
11,111 |
|||||||
Other noncurrent liabilities |
6,368 |
6,041 |
|||||||
Total liabilities |
137,972 |
144,006 |
|||||||
Total stockholders’ equity |
157,898 |
158,344 |
|||||||
Total liabilities and stockholders’ equity |
$ |
295,870 |
$ |
302,350 |
© 2016 GP Strategies Corporation. All rights reserved. GP Strategies and the GP Strategies logo design are trademarks of GP Strategies Corporation.
Logo – http://photos.prnewswire.com/prnh/20130502/PH05881LOGO
SOURCE GP Strategies Corporation