COLUMBIA, Md., March 11,
2021 /PRNewswire/ -- Global workforce transformation solutions
provider GP Strategies Corporation (NYSE: GPX) today
reported financial results for the quarter ended December 31,
2020.
Overview:
Income Statement Highlights:
- Revenue of $123.1 million for the
fourth quarter of 2020 compared to $115.6
million for the third quarter of 2020 and $155.4 million for the fourth quarter of
2019
- Gross profit of $23.1 million, or
18.8% of revenue for the fourth quarter of 2020 compared to
$20.7 million, or 17.9% of revenue
for the third quarter of 2020 and $23.3
million, or 15.0% of revenue, for the fourth quarter of
2019
- Diluted earnings per share of $0.47 for the fourth quarter of 2020 compared to
$0.03 per share for the third quarter
of 2020 and $0.56 per share for the
fourth quarter of 2019 (Adjusted EPS of $0.38 for the fourth quarter of 2020 compared to
$0.24 per share for the third quarter
of 2020 and $0.23 for the fourth
quarter of 2019)
Balance Sheet and Cash Flow Highlights:
- Cash and equivalents of $23.1
million at December 31, 2020 compared to $8.2 million at December 31, 2019
- Reduced long term-debt balance by $70.2 million to $12.7 million as of December 31, 2020
compared to $82.9 million as of
December 31, 2019
- Cash flow from operations of $13.6
million for the fourth quarter of 2020 compared to
$8.8 million for the fourth quarter
of 2019
- Cash flow from operations of $59.0
million for the year ended December 31, 2020 compared
to $13.4 million for the year ended
December 31, 2019
"We are proud of the accomplishments of the Company in 2020,"
stated Adam Stedham, Chief Executive
Officer and President of GP Strategies. "The fourth quarter and
full year results of 2020 clearly demonstrate the success of the
proactive strategy we implemented early in 2020 to ensure financial
stability and achieve strong operating results despite lower
revenue due to the impact of the COVID-19 pandemic. In the
fourth quarter of 2020, the Company delivered a sequential increase
in revenue, gross margin, adjusted earnings per share and adjusted
EBITDA compared to both the second and third quarters.
Additionally, our success in reducing long-term debt, and
increasing cash, place the Company in a strong position to
capitalize on opportunities that may arise."
The Company's revenue decline when compared to the quarter and
year ended December 31, 2019 is
primarily due to circumstances related to the macroeconomic impact
of COVID-19, specifically the postponement of certain training
events and other delays in client projects. In addition, our
revenue for the quarter and year ended December 31, 2020 decreased $6.3 million and $19.3
million respectively, compared to revenue for the fourth
quarter and year ended December 31,
2019 as the result of business divestitures. Foreign
currency exchange rate changes also resulted in a total
$0.5 million decrease in U.S. dollar
reported revenue for the year ended December
31, 2020 compared to the year ended December 31, 2019.
The Company had operating income of $12.2
million for the fourth quarter of 2020, a $3.2 million decrease compared to operating
income of $15.3 million for the
fourth quarter of 2019. The decline in operating income is
primarily due to the gain on sale from the Company's Tuition
Reimbursement Business that closed in the fourth quarter of 2019
being $7.1 million greater than
the gain on sale from the Company's IC Axon Business that closed in
the fourth quarter of 2020, a gross profit decrease of $0.2 million, or 1.0%, partially offset by a
$4.1 million decrease in general and
administrative expenses. For the fourth quarter of 2020, the
company incurred severance expense of $1.9
million which is reflected in cost of revenue on the
consolidated statement of operations.
Net income was $8.4 million, or
$0.47 per share, for the fourth
quarter of 2020 compared to net income of $9.5 million, or $0.56 per share, for the fourth quarter of 2019.
After accounting for special items, which are set forth in the
Non-GAAP Reconciliation - Adjusted EPS below, Adjusted EPS was
$0.38 and $0.23 for the fourth quarter of 2020 and 2019,
respectively. Net income was $7.1
million, or $0.41 per share,
for the year ended December 31, 2020
compared to net income of $15.2
million, or $0.90 per share,
for 2019. After accounting for special items, which are set forth
in the Non-GAAP Reconciliation - Adjusted EPS below, Adjusted EPS
was $0.73 and $0.84 for 2020 and 2019, respectively.
Investor Call
The Company has scheduled an investor conference call and
webcast for 10:00 a.m. Eastern Time on
Thursday, March 11, 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/gpx210311.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/10152663/e33e7cf2b3.
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 10152663.
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)
|
|
|
Quarters
ended
|
Twelve Months
Ended
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
Revenue
|
$
|
123,088
|
|
$
|
155,399
|
|
$
|
473,107
|
|
$
|
583,290
|
|
Cost of
revenue
|
100,002
|
|
132,090
|
|
395,845
|
|
494,077
|
|
Gross
profit
|
23,086
|
|
23,309
|
|
77,262
|
|
89,213
|
|
General and
administrative expenses
|
13,588
|
|
17,723
|
|
62,694
|
|
64,492
|
|
Sales and marketing
expenses
|
1,809
|
|
2,150
|
|
7,190
|
|
7,875
|
|
Restructuring
charges
|
532
|
|
234
|
|
1,387
|
|
1,639
|
|
Gain on change in
fair value of
contingent
consideration, net
|
—
|
|
—
|
|
—
|
|
677
|
|
Gain on sale of
business
|
5,000
|
|
12,126
|
|
6,064
|
|
12,126
|
|
Operating
income
|
12,157
|
|
15,328
|
|
12,055
|
|
28,010
|
|
Interest
expense
|
909
|
|
1,206
|
|
2,934
|
|
6,058
|
|
Other income
(expense)
|
(18)
|
|
145
|
|
(511)
|
|
417
|
|
Income
before income tax expense
|
11,230
|
|
14,267
|
|
8,610
|
|
22,369
|
|
Income tax
expense
|
2,783
|
|
4,772
|
|
1,542
|
|
7,180
|
|
Net
income
|
$
|
8,447
|
|
$
|
9,495
|
|
7,068
|
|
15,189
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
17,206
|
|
16,983
|
|
17,131
|
|
16,827
|
|
Diluted weighted
average shares outstanding
|
17,830
|
|
17,020
|
|
17,415
|
|
16,861
|
|
Per common share
data:
|
|
|
|
|
Basic earnings per
share
|
$
|
0.49
|
|
$
|
0.56
|
|
$
|
0.41
|
|
$
|
0.90
|
|
Diluted earnings per
share
|
$
|
0.47
|
|
$
|
0.56
|
|
$
|
0.41
|
|
$
|
0.90
|
|
|
|
|
|
|
Other
data:
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
|
13,603
|
|
$
|
10,959
|
|
$
|
33,125
|
|
$
|
40,923
|
|
Adjusted EPS
(1)
|
$
|
0.38
|
|
$
|
0.23
|
|
$
|
0.73
|
|
$
|
0.84
|
|
|
|
(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)
|
|
|
Quarters
ended
|
Twelve Months
Ended
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2020
|
2019
|
2020
|
2019
|
Revenue by segment
(2):
|
|
|
|
|
North
America
|
$
|
80,081
|
|
$
|
103,481
|
|
$
|
317,735
|
|
$
|
395,603
|
|
Europe Middle East
Africa
|
28,556
|
|
33,745
|
|
107,203
|
|
125,118
|
|
Emerging
Markets
|
14,451
|
|
18,173
|
|
48,169
|
|
62,569
|
|
Total
revenue
|
$
|
123,088
|
|
$
|
155,399
|
|
$
|
473,107
|
|
$
|
583,290
|
|
Gross profit by
segment (2):
|
|
|
|
|
North
America
|
$
|
16,853
|
|
$
|
15,103
|
|
$
|
59,258
|
|
$
|
64,343
|
|
Europe Middle East
Africa
|
4,002
|
|
4,634
|
|
11,532
|
|
14,916
|
|
Emerging
Markets
|
2,231
|
|
3,572
|
|
6,472
|
|
9,954
|
|
Total gross
profit
|
$
|
23,086
|
|
$
|
23,309
|
|
$
|
77,262
|
|
$
|
89,213
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
13,623
|
|
$
|
8,849
|
|
$
|
58,992
|
|
$
|
13,400
|
|
Capital
expenditures
|
(346)
|
|
(410)
|
|
(1,630)
|
|
(2,315)
|
|
Free cash
flow
|
$
|
13,277
|
|
$
|
8,439
|
|
$
|
57,362
|
|
$
|
11,085
|
|
|
|
(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. 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)
|
|
|
Quarters
ended
|
Twelve Months
Ended
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2020
|
2019
|
2020
|
2019
|
Net income
|
$
|
8,447
|
|
$
|
9,495
|
|
$
|
7,068
|
|
$
|
15,189
|
|
Interest
expense
|
909
|
|
1,206
|
|
2,934
|
|
6,058
|
|
Income tax
expense
|
2,783
|
|
4,772
|
|
1,542
|
|
7,180
|
|
Depreciation and
amortization
|
1,675
|
|
2,490
|
|
7,879
|
|
9,482
|
|
EBITDA
|
13,814
|
|
17,963
|
|
19,423
|
|
37,909
|
|
Adjustments:
|
|
|
|
|
Non-cash stock
compensation expense
|
1,846
|
|
1,656
|
|
6,256
|
|
5,595
|
|
Stock compensation
related to severance
|
—
|
|
—
|
|
1,721
|
|
—
|
|
Restructuring
charges
|
532
|
|
234
|
|
1,387
|
|
1,639
|
|
Severance
expense
|
1,870
|
|
206
|
|
9,372
|
|
2,232
|
|
Change in paid time
off policy
|
—
|
|
—
|
|
(1,894)
|
|
—
|
|
Gain on change in
fair value of contingent consideration, net
|
—
|
|
—
|
|
—
|
|
(677)
|
|
ERP implementation
costs
|
—
|
|
585
|
|
—
|
|
2,188
|
|
Foreign currency
transaction (gains) losses
|
25
|
|
(334)
|
|
747
|
|
718
|
|
Legal
acquisition/divestiture and transaction costs
|
516
|
|
621
|
|
1,922
|
|
1,291
|
|
Impairment of
operating lease right-of-use asset
|
—
|
|
—
|
|
255
|
|
—
|
|
Gain on sale of
business
|
(5,000)
|
|
(12,126)
|
|
(6,064)
|
|
(12,126)
|
|
Loss on settlement
with foreign oil & gas client
|
—
|
|
2,154
|
|
—
|
|
2,154
|
|
Adjusted
EBITDA
|
$
|
13,603
|
|
$
|
10,959
|
|
$
|
33,125
|
|
$
|
40,923
|
|
|
|
(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 stock compensation related to severance,
restructuring charges, severance expense, change in paid time off
policy, gain on change in fair value of contingent consideration,
net, ERP implementation costs, foreign currency transaction (gains)
losses, legal acquisition and transaction costs, impairment of
operating lease right-of-use asset, gain on sale of business and
loss on settlement with foreign oil and gas client. 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)
|
|
|
Quarters
ended
|
Twelve Months
Ended
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2020
|
2019
|
2020
|
2019
|
Diluted earnings per
share
|
$
|
0.47
|
|
$
|
0.56
|
|
$
|
0.41
|
|
$
|
0.90
|
|
Stock compensation
severance expense
|
—
|
|
—
|
|
0.07
|
|
—
|
|
Restructuring
charges
|
0.02
|
|
0.01
|
|
0.06
|
|
0.07
|
|
Severance
expense
|
0.08
|
|
0.01
|
|
0.40
|
|
0.09
|
|
Change in paid time
off policy
|
—
|
|
—
|
|
(0.08)
|
|
—
|
|
Gain on change in
fair value of contingent consideration, net
|
—
|
|
—
|
|
—
|
|
(0.03)
|
|
ERP implementation
costs
|
—
|
|
0.02
|
|
—
|
0.09
|
|
Foreign currency
transaction (gain) losses
|
—
|
|
(0.01)
|
|
0.03
|
|
0.03
|
|
Legal
acquisition/divestiture and transaction costs
|
0.02
|
|
0.02
|
|
0.07
|
|
0.05
|
|
Impairment of
operating lease right-of-use asset
|
—
|
|
—
|
|
0.01
|
|
—
|
|
Settlement of
contingent consideration in shares
|
—
|
|
0.01
|
|
0.02
|
|
0.03
|
|
Gain on sale of
business
|
(0.21)
|
|
(0.48)
|
|
(0.26)
|
|
(0.48)
|
|
Loss on settlement
with foreign oil & gas client
|
—
|
|
0.09
|
|
—
|
|
0.09
|
|
Adjusted
EPS
|
$
|
0.38
|
|
$
|
0.23
|
|
$
|
0.73
|
|
$
|
0.84
|
|
|
|
(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)
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
Cash
|
$
|
23,076
|
|
|
$
|
8,159
|
|
Accounts and other
receivables
|
110,575
|
|
|
131,852
|
|
Unbilled
revenue
|
28,100
|
|
|
57,229
|
|
Prepaid expenses and
other current assets
|
15,186
|
|
|
19,115
|
|
Assets held for
sale
|
42,463
|
|
|
—
|
|
Total current
assets
|
219,400
|
|
|
216,355
|
|
Property, plant and
equipment, net
|
4,650
|
|
|
5,803
|
|
Operating lease
right-of-use assets
|
20,862
|
|
|
27,251
|
|
Goodwill and
intangible assets, net
|
126,245
|
|
|
187,907
|
|
Deferred tax
assets
|
1,425
|
|
|
1,121
|
|
Other
assets
|
9,194
|
|
|
10,465
|
|
Total
assets
|
$
|
381,776
|
|
|
$
|
448,902
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
91,572
|
|
|
$
|
92,332
|
|
Deferred
revenue
|
16,509
|
|
|
23,234
|
|
Current portion of
operating lease liabilities
|
5,523
|
|
|
7,871
|
|
Liabilities held for
sale
|
5,868
|
|
|
—
|
|
Total current
liabilities
|
119,472
|
|
|
123,437
|
|
Long-term
debt
|
12,748
|
|
|
82,870
|
|
Long-term portion of
operating lease liabilities
|
16,260
|
|
|
22,159
|
|
Deferred tax
liabilities
|
4,028
|
|
|
7,439
|
|
Other noncurrent
liabilities
|
5,922
|
|
|
3,083
|
|
Total
liabilities
|
158,430
|
|
|
238,988
|
|
Total stockholders'
equity
|
223,346
|
|
|
209,914
|
|
Total liabilities and
stockholders' equity
|
$
|
381,776
|
|
|
$
|
448,902
|
|
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trademarks of GP Strategies Corporation.
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SOURCE GP Strategies Corporation