GP Strategies Reports Second Quarter 2017 Financial Results

7/27/17

Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2017.

Overview:

  • Revenue of $131.2 million for second quarter of 2017, an increase from $125.5 million for second quarter of 2016
  • Operating income of $9.1 million for second quarter of 2017, an increase from $8.2 million for second quarter of 2016
  • Diluted earnings per share of $0.35 for second quarter of 2017, an increase from $0.29 per share for second quarter of 2016
  • Cash flow from operations of $19.8 million for the six months ended June 30, 2017, an increase from $10.0 million for the same period in 2016

The Company's revenue increased $5.6 million or 4% during the second quarter of 2017 compared to the same quarter in 2016. The revenue growth was primarily attributable to a 22% increase in the Performance Readiness Solutions segment, due to both acquisitions and organic growth, as well as organic growth in both the Learning Solutions and Sandy Training & Marketing segments due to increased training services. Foreign currency exchange rate declines resulted in a total $3.2 million or 3% decrease in U.S. dollar reported revenue during the second quarter of 2017.

Gross profit increased $2.1 million or 10% to $22.4 million or 17% of revenue for the second quarter of 2017 compared to $20.3 million or 16% of revenue for the second quarter of 2016. Operating income increased 12% to $9.1 million for the second quarter of 2017 from $8.2 million for the second quarter of 2016. Income before income taxes was $8.5 million for the second quarter of 2017 compared to $8.0 million for the second quarter of 2016. Income tax expense decreased to $2.6 million, or a 31% effective tax rate, for the second quarter of 2017 compared to $3.1 million or a 38% effective tax rate, for the second quarter of 2016. Net income was $5.9 million, or $0.35 per share, for the second quarter of 2017 compared to $4.9 million, or $0.29 per share, for the second quarter of 2016.

"GP Strategies reported second quarter 2017 EBITDA of $10.8 million compared to $10.0 million for the corresponding quarter in 2016" stated Scott N. Greenberg, Chief Executive Officer. "The Company achieved this 7% increase in EBITDA while incurring approximately $1.1 million of financial system implementation costs during the quarter. In addition, all of our operating segments reported increased gross margins during the second quarter of 2017 compared to the same quarter in 2016. The Company accomplished this solid performance despite a $3.2 million decline in U.S. dollar reported revenue from foreign currency fluctuations. GP Strategies continued its acquisition strategy and in April completed the acquisition of Emantras, which is based in India and strengthens our eLearning content development capabilities. We are currently evaluating additional acquisition opportunities."

Balance Sheet and Cash Flow Highlights

As of June 30, 2017, the Company had cash and cash equivalents of $23.7 million compared to $16.3 million as of December 31, 2016. The Company had $34.0 million of long-term debt outstanding as of June 30, 2017. In addition, the Company had $24.5 million of short-term borrowings outstanding and $70.1 million of available borrowings under its line of credit as of June 30, 2017.

Cash provided by operating activities was $19.8 million for the six months ended June 30, 2017 compared to $10.0 million for the same period in 2016. During the six months ended June 30, 2017 and 2016, the Company repurchased approximately 101,000 and 340,000 shares, respectively, of its common stock in the open market for a total cost of approximately $2.4 million and $8.0 million, respectively. As of June 30, 2017, there was approximately $3.6 million available for future repurchases under the buyback program.

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.