GP Strategies Reports First Quarter 2013 Financial Results
ELKRIDGE, Md., May 2, 2013 /PRNewswire/ — 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.
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 2(nd), until 12:00 p.m. on May 16(th). 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.
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.
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 247 (40) consideration, net --- 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: EBITDA (1) $9,526 $9,232
(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.
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: $6,466 Learning Solutions (2) $7,171 3,573 Professional & Technical Services (2) 2,684 Sandy Training & Marketing 1,926 1,542 1,575 Performance Readiness Solutions 1,978 2,456 Energy Services (2) 2,422 ----- $15,612 Total gross profit $16,181 ======= Operating income by segment: $3,395 Learning Solutions (2) $3,212 1,593 Professional & Technical Services (2) 1,058 303 Sandy Training & Marketing 629 245 Performance Readiness Solutions 579 1,788 Energy Services (2) 1,614 Gain (loss) on change in fair value of contingent 247 (40) consideration, net --- $7,284 Total operating income $7,339 ====== 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.
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.
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 ======== ========
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SOURCE GP Strategies Corporation