COLUMBIA, Md., May 6, 2021
/PRNewswire/ -- Global workforce transformation solutions
provider GP Strategies Corporation (NYSE: GPX) today
reported financial results for the quarter ended March 31,
2021.
Highlights
- Gross profit of $21.4 million, or
18.7% on revenue of $114.6 million,
for the first quarter of 2021 compared to $17.6 million, or 13.7% on revenue of
$128.3 million, for the first quarter
of 2020
- Net income of $1.7 million for
the first quarter of 2021 compared to a net loss of $1.3 million for the first quarter of 2020
- Earnings per share of $0.09 for
the first quarter of 2021 compared to a net loss per share of
$(0.08) for the first quarter of
2020
- Adjusted earnings per share of $0.24 for the first quarter of 2021 compared to
an adjusted loss per share $(0.03)
for the first quarter of 2020
- We had no long term-debt as of March 31,
2021 compared to $12.7 million
as of December 31, 2020
"The first quarter reflects the benefits of our solid execution,
through what was a challenging time for many parts of the economy,
and we begin 2021 from a position of strength with the ability to
capitalize on the opportunities ahead," stated Adam Stedham, Chief Executive Officer and
President of GP Strategies. "Our gross margin percentage, for the
first quarter of 2021, is the strongest for the company in the last
ten years for a first quarter. We believe that the learning
industry has macroeconomic tailwinds that will propel our
growth. We end the first quarter with improving market
conditions, a focused strategy, no debt, significant availability
under our credit facility and a higher margin profile."
Revenue
Our revenue decreased $13.7
million or 10.7% during the first quarter of 2021 compared
to the first quarter of 2020. The net decrease is due to a
$12.6 million decrease in our
North America segment, a
$1.9 million decrease in our EMEA
segment partially offset by a $0.8
million increase in our Emerging Markets segment.
Excluding the effects of COVID-19, divestitures, and foreign
currency exchange rate changes, our revenue decreased $6.7 million for the first quarter of 2021
compared to the first quarter of 2020 primarily due to the timing
of the shipment of publications from the first quarter of 2021 to
the second quarter of 2021. We estimate that the impact of
COVID-19 resulted in at least a $7.0 million decrease in our revenue in the
first quarter of 2021 compared to the first quarter of 2020
primarily due to the postponement of certain training events and
other delays in client projects. In addition, our revenue decreased
$2.8 million during the first quarter
of 2021 due to a divested revenue stream resulting from the sale of
our IC Axon Division on October 1,
2020. Offsetting these decreases, the foreign currency
exchange rate changes resulted in a $2.8
million increase in U.S. dollar reported revenue during the
first quarter of 2021.
Operating income (loss)
Operating income (loss) increased $3.6
million to operating income of $3.2
million for the first quarter of 2021 compared to an
operating loss of $0.4 million for
the first quarter of 2020. The net increase is primarily due
to a $3.8 million increase in gross
profit to $21.4 million, or 18.7% of
revenue from $17.6 million, or 13.7%
of revenue primarily due to operating restructuring initiatives
implemented in fiscal year 2020 that resulted in reduced costs and
improved efficiencies. In addition, general and
administrative expenses decreased $2.4
million. These favorable changes were partially offset
by a $1.1 million gain on the sale of
our Alternative Fuels Division in the first quarter of 2020, a
$0.7 million restructuring charge
incurring in the first quarter of 2021, a $0.6 million increase in sales and marketing
expenses and a $0.3 million loss on
change in fair value of contingent consideration in the first
quarter of 2021.
Net income (loss)
Net income was $1.7 million, or
$0.09 per share, for the first
quarter of 2021 compared to a net loss of $1.3 million, or $(0.08) per share, for the first quarter of 2020.
After accounting for special items, which are set forth in the
Non-GAAP Reconciliation - Adjusted EPS below, Adjusted EPS was
$0.24 and $(0.03) for the first quarter of 2021 and 2020,
respectively.
Investor Call
The Company has scheduled an investor conference call and
webcast for 12:00 p.m. Eastern Time on
Thursday, May 6, 2021. Prepared remarks regarding the
company's financial and operational results will be followed by a
question and answer period with GP Strategies' executive management
team. The conference call may be accessed via webcast at:
https://services.choruscall.com/links/gpx210506.html or by
calling +1 (833) 535-2204 within the US, or + 1 (412) 902-6747
internationally, and requesting the "GP Strategies Call." The
presentation slides broadcast via the webcast will also be
available on the Investors section of GP Strategies' website the
morning of the call. Participants must be logged in via telephone
to submit a question to management during the
call. Participants may optionally pre-register for the webcast
at https://dpregister.com/sreg/10155409/e74d321a8f.
The webcast will be archived on the Investors section of GP
Strategies' website and will remain available for 90 days.
Alternatively, a telephonic replay of the conference call will be
available for one week and may be accessed by dialing +1 (877)
344-7529 in the US, or +1 (412) 317-0088 internationally, and
requesting conference number 10155409.
Presentation of Non-GAAP Information
This press release contains non-GAAP financial measures,
including Adjusted EBITDA (earnings before interest, income taxes,
depreciation and amortization), Adjusted Earnings per Diluted Share
(Adjusted EPS), and free cash flow (cash flow from operating
activities less capital expenditures). The Company believes these
non-GAAP financial measures are useful to investors in evaluating
the Company's results. These measures 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 these measures 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 Adjusted EBITDA and Adjusted EPS to the most comparable U.S.
GAAP equivalents, see the Non-GAAP Reconciliations, along with
related footnotes, below.
About GP Strategies
GP Strategies Corporation (NYSE: GPX) is a global workforce
transformation solutions provider of training, digital learning
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,
automotive, financial services, technology, and other commercial
and government customers.
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, including statements about the anticipated
effects of the COVID-19 pandemic and related events on our business
and results of operations. 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,
including the impact of the COVID-19 pandemic and related events
that are beyond our control. 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)
|
|
|
Three Months
Ended
|
March 31,
|
|
|
|
|
2021
|
2020
|
|
|
|
Revenue
|
$
|
114,551
|
|
$
|
128,281
|
|
Cost of
revenue
|
93,110
|
|
110,667
|
|
Gross
profit
|
21,441
|
|
17,614
|
|
General and
administrative expenses
|
14,836
|
|
17,284
|
|
Sales and marketing
expenses
|
2,468
|
|
1,839
|
|
Restructuring
charges
|
699
|
|
—
|
|
Loss on change in
fair value of contingent consideration
|
269
|
|
—
|
|
Gain on sale of
business
|
—
|
|
1,064
|
|
Operating
income (loss)
|
3,169
|
|
(445)
|
|
Interest
expense
|
181
|
|
978
|
|
Other
expense
|
823
|
|
500
|
|
Income
(loss) before income tax expense (benefit)
|
2,165
|
|
(1,923)
|
|
Income tax expense
(benefit)
|
441
|
|
(629)
|
|
Net
income (loss)
|
$
|
1,724
|
|
$
|
(1,294)
|
|
|
|
|
Basic weighted
average shares outstanding
|
17,325
|
|
17,082
|
|
Diluted weighted
average shares outstanding
|
18,153
|
|
17,117
|
|
Per common share
data:
|
|
|
Basic earnings (loss)
per share
|
$
|
0.10
|
|
$
|
(0.08)
|
|
Diluted earnings
(loss) per share
|
$
|
0.09
|
|
$
|
(0.08)
|
|
|
|
|
Other
data:
|
|
|
Adjusted
EBITDA(1)
|
$
|
9,194
|
|
$
|
3,424
|
|
Adjusted EPS
(1)
|
$
|
0.24
|
|
$
|
(0.03)
|
|
|
|
(1)
|
The terms Adjusted
EBITDA and Adjusted EPS are non-GAAP financial measures that the
Company believes are useful to investors in evaluating its results.
For a reconciliation of these non-GAAP financial measures to the
most comparable U.S. GAAP equivalent, see the Non-GAAP
Reconciliations, along with related footnotes, below.
|
GP STRATEGIES
CORPORATION AND SUBSIDIARIES
|
SUPPLEMENTAL
FINANCIAL INFORMATION
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months
Ended
|
March 31,
|
|
|
|
|
2021
|
2020
|
Revenue by segment
(2):
|
|
|
North
America
|
$
|
72,329
|
|
$
|
84,936
|
|
Europe Middle East
Africa
|
29,973
|
|
31,898
|
|
Emerging
Markets
|
12,249
|
|
11,447
|
|
Total
revenue
|
$
|
114,551
|
|
$
|
128,281
|
|
|
|
|
Gross profit by
segment (2):
|
|
|
North
America
|
$
|
14,493
|
|
$
|
13,058
|
|
Europe Middle East
Africa
|
5,050
|
|
3,776
|
|
Emerging
Markets
|
1,898
|
|
780
|
|
Total gross
profit
|
$
|
21,441
|
|
$
|
17,614
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
Net cash provided by
operating activities
|
$
|
564
|
|
$
|
9,847
|
|
Capital
expenditures
|
(455)
|
|
(467)
|
|
Free cash
flow
|
$
|
109
|
|
$
|
9,380
|
|
|
|
(2)
|
Effective July 1,
2020, we began managing our business under a new organizational
structure on a regional basis through our three geographic markets,
North America, EMEA (Europe Middle East Africa) and Emerging
Markets. Effective January 1, 2021 as a result of change in
management, we transferred one of our businesses from our North
America segment to our EMEA segment. In addition, we
realigned some of our business between our OPS and TPS solutions to
more accurately align with their focus industries. We have
reclassified the segment financial information herein for the prior
year periods to reflect the changes in our segment reporting and
conform to the current year's presentation.
|
GP STRATEGIES
CORPORATION AND SUBSIDIARIES
|
Non-GAAP
Reconciliation – Adjusted EBITDA (3)
|
(In
thousands)
|
(Unaudited)
|
|
Three months
ended
|
March 31,
|
|
|
|
|
2021
|
2020
|
Net income
(loss)
|
$
|
1,724
|
|
$
|
(1,294)
|
|
Interest
expense
|
181
|
|
978
|
|
Income tax expense
(benefit)
|
441
|
|
(629)
|
|
Depreciation and
amortization
|
1,472
|
|
2,177
|
|
EBITDA
|
3,818
|
|
1,232
|
|
Adjustments:
|
|
|
Non-cash stock
compensation expense
|
1,667
|
|
1,256
|
|
Restructuring
charges
|
699
|
|
—
|
|
Severance
expense
|
539
|
|
211
|
|
Loss on change in
fair value of contingent consideration
|
269
|
|
—
|
|
Foreign currency
transaction losses
|
1,249
|
|
496
|
|
Legal
acquisition/divestiture and transaction costs
|
850
|
|
1,038
|
|
Impairment of
operating lease right-of-use asset
|
103
|
|
255
|
|
Gain on sale of
business
|
—
|
|
(1,064)
|
|
Adjusted
EBITDA
|
$
|
9,194
|
|
$
|
3,424
|
|
|
|
(3)
|
Adjusted earnings
before interest, income taxes, depreciation and amortization
(Adjusted 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.
Adjusted EBITDA is calculated by adding back to net income,
interest expense, income tax expense (benefit), depreciation and
amortization, non-cash stock compensation expense, and other
unusual or infrequently occurring items. For the periods presented,
these other items are restructuring charges, severance expense,
loss on change in fair value of contingent consideration, foreign
currency transaction losses, legal acquisition/divestiture and
transaction costs, impairment of operating lease right-of-use
asset, and gain on sale of business. Adjusted EBITDA should not be
considered as a substitute 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 Adjusted
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
|
Non-GAAP
Reconciliation – Adjusted EPS (4)
|
(Unaudited)
|
|
Three months
ended
|
March 31,
|
|
|
|
|
2021
|
2020
|
Diluted earnings
(loss) per share
|
$
|
0.09
|
|
$
|
(0.08)
|
|
Restructuring
charges
|
0.03
|
|
—
|
|
Severance
expense
|
0.02
|
|
0.01
|
|
Loss on change in
fair value of contingent consideration
|
0.01
|
|
—
|
|
Foreign currency
transaction losses
|
0.05
|
|
0.02
|
|
Legal
acquisition/divestiture and transaction costs
|
0.04
|
|
0.04
|
|
Impairment of
operating lease right-of-use asset
|
—
|
|
0.01
|
|
Settlement of
contingent consideration in shares
|
—
|
|
0.01
|
|
Gain on sale of
business
|
—
|
|
(0.04)
|
|
Adjusted
EPS
|
$
|
0.24
|
|
$
|
(0.03)
|
|
|
|
(4)
|
Adjusted Earnings per
Diluted Share ("Adjusted EPS"), which is a non-GAAP financial
measure, is defined as earnings per diluted share excluding the
gain or loss on the change in fair value of acquisition-related
contingent consideration and special charges, such as
restructuring, and other unusual or infrequently occurring items of
income or expense. Management uses Adjusted EPS to assess total
Company operating performance on a consistent basis. We believe
that this non-GAAP financial measure, which excludes the gain on
change in fair value of acquisition-related contingent
consideration and other special charges, when considered together
with our U.S. GAAP financial results, provides management and
investors with an additional understanding of our business
operating results, including underlying
trends.
|
GP STRATEGIES
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2021
|
|
2020
|
|
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
|
$
|
10,758
|
|
|
$
|
23,076
|
|
|
Accounts and other
receivables
|
|
87,230
|
|
|
110,575
|
|
|
Unbilled revenue
|
|
40,990
|
|
|
28,100
|
|
|
Prepaid expenses and
other current assets
|
|
19,504
|
|
|
15,186
|
|
|
Assets held for
sale
|
|
42,339
|
|
|
42,463
|
|
|
Total current
assets
|
|
200,821
|
|
|
219,400
|
|
|
Property, plant and
equipment, net
|
|
4,290
|
|
|
4,650
|
|
|
Operating lease
right-of-use assets
|
|
19,025
|
|
|
20,862
|
|
|
Goodwill and
intangible assets, net
|
|
125,314
|
|
|
126,245
|
|
|
Other
assets
|
|
9,290
|
|
|
10,619
|
|
|
Total
assets
|
|
$
|
358,740
|
|
|
$
|
381,776
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
75,724
|
|
|
$
|
91,572
|
|
|
Current portion of
operating lease liabilities
|
|
5,049
|
|
|
5,523
|
|
|
Deferred
revenue
|
|
19,583
|
|
|
16,509
|
|
|
Liabilities held for
sale
|
|
7,487
|
|
|
5,868
|
|
|
Total current
liabilities
|
|
107,843
|
|
|
119,472
|
|
|
Long-term
debt
|
|
—
|
|
|
12,748
|
|
|
Long-term portion of
operating lease liabilities
|
|
14,615
|
|
|
16,260
|
|
|
Other
liabilities
|
|
9,686
|
|
|
9,950
|
|
|
Total
liabilities
|
|
132,144
|
|
|
158,430
|
|
|
Total stockholders'
equity
|
|
226,596
|
|
|
223,346
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
358,740
|
|
|
$
|
381,776
|
|
|
© 2020 GP Strategies Corporation. All rights reserved. GP
Strategies and GP Strategies with logo design are registered
trademarks of GP Strategies Corporation.
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SOURCE GP Strategies Corporation