COLUMBIA, Md., Aug. 9, 2021 /PRNewswire/
-- Global workforce transformation solutions provider GP
Strategies Corporation (NYSE: GPX) today reported financial
results for the quarter ended June 30,
2021.
Highlights
- Revenue of $128.8 million, for
the second quarter of 2021 compared to $106.1 million, for the second quarter of 2020,
or an increase of 21.3%.
- Gross profit of $23.8 million, or
18.5% , for the second quarter of 2021 compared to $15.9 million, or 15.0%, for the second quarter
of 2020
- Net income of $2.5 million for
the second quarter of 2021 compared to a net loss of $0.6 million for the second quarter of 2020
- Earnings per share of $0.14 for
the second quarter of 2021 compared to a net loss per share of
$(0.04) for the second quarter of
2020
- Adjusted earnings per share of $0.33 for the second quarter of 2021 compared to
an adjusted earnings per share of $0.12 for the second quarter of 2020
Revenue
Our revenue increased $22.6
million, or 21.3%, during the second quarter of 2021
compared to the second quarter of 2020. The net increase is
due to a $10.1 million increase in
our North America segment, a $8.2
million increase in our EMEA segment and a $4.4 million increase in our Emerging
Markets segment. Excluding the effects of divestitures, and
foreign currency exchange rate changes, our revenue
increased $21.8 million for the
second quarter of 2021 compared to the second quarter of
2020. Our revenue decreased $2.9
million during the second quarter of 2021 due to a
divested revenue stream resulting from the sale of our IC Axon
Division on October 1, 2020. The
foreign currency exchange rate changes resulted in a $3.7 million increase in U.S.
dollar reported revenue during
the second quarter of 2021.
Operating income
Operating income increased $4.7
million to operating income of $3.7
million for the second quarter of 2021 compared to an
operating loss of $1.0 million for
the second quarter of 2020. The net increase is primarily due to a
$7.9 million increase in gross profit
to $23.8 million, or 18.5%, of
revenue from $15.9 million, or 15.0%,
of revenue primarily due to operating restructuring initiatives
implemented in fiscal year 2020 that resulted in reduced costs and
improved efficiencies. This increase was partially offset by a
$1.3 million increase in general and
administrative expenses, a $0.9
million increase in restructuring charges, a $0.7 million increase in sales and marketing
expenses and a $0.4 million loss on
the sale of a business in the United
Kingdom in the second quarter of 2021.
Net income (loss)
Net income was $2.5 million, or
$0.14 per share, for the second
quarter of 2021 compared to a net loss of $0.6 million, or $(0.04) per share, for the second quarter of
2020. After accounting for special items, which are set forth in
the Non-GAAP Reconciliation - Adjusted EPS below, Adjusted EPS was
$0.33 and $0.12 for the first quarter of 2021 and 2020,
respectively.
Investor Call
As previously announced, on July 15,
2021, GP Strategies entered into a definitive agreement to
be acquired by Learning Technologies Group plc, a public
limited company incorporated in England and Wales. Subject to customary closing
conditions, the transaction is expected to close in the fourth
calendar quarter of 2021.
Due to the pending acquisition, GP Strategies will not host an
earnings conference call with respect to its second
quarter fiscal 2021 financial results.
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 and risks related to the Agreement and
Plan of Merger with Learning Technologies Group plc, a public
limited company incorporated in England and Wales ("LTG"), Learning Technologies
Acquisition Corporation, a Delaware corporation and a direct wholly owned
subsidiary of LTG ("US Holdco"), and Gravity Merger Sub, Inc., a
Delaware corporation and a wholly
owned subsidiary of US Holdco, and the related merger. 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
|
Six Months
Ended
|
|
June 30,
|
June 30,
|
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
$
128,782
|
$
106,144
|
$
243,333
|
$
234,425
|
|
Cost of
revenue
|
104,954
|
90,247
|
198,064
|
200,914
|
|
Gross profit
|
23,828
|
15,897
|
45,269
|
33,511
|
|
General and administrative expenses
|
15,442
|
14,180
|
30,278
|
31,464
|
|
Sales and
marketing expenses
|
2,562
|
1,857
|
5,030
|
3,696
|
|
Restructuring charges
|
1,763
|
855
|
2,462
|
855
|
|
Loss on change
in fair value of contingent consideration
|
—
|
—
|
269
|
—
|
|
Gain (loss) on sale of business
|
(377)
|
—
|
(377)
|
1,064
|
|
Operating income (loss)
|
3,684
|
(995)
|
6,853
|
(1,440)
|
|
Interest expense
|
197
|
607
|
378
|
1,585
|
|
Other expense
|
196
|
189
|
1,019
|
689
|
|
Income (loss)
before income tax expense (benefit)
|
3,291
|
(1,791)
|
5,456
|
(3,714)
|
|
Income tax expense
(benefit)
|
812
|
(1,185)
|
1,253
|
(1,814)
|
|
Net income (loss)
|
$
2,479
|
$
(606)
|
4,203
|
(1,900)
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
17,453
|
17,144
|
17,389
|
17,113
|
|
Diluted weighted average shares outstanding
|
18,321
|
17,207
|
18,237
|
17,162
|
|
|
|
|
|
|
Per common
share data:
|
|
|
|
|
|
Basic earnings (loss) per
share
|
$
0.14
|
$
(0.04)
|
$0.24
|
$
(0.11)
|
|
Diluted earnings (loss) per
share
|
$
0.14
|
$
(0.04)
|
$
0.23
|
$
(0.11)
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
Adjusted EBITDA(1)
|
$
11,100
|
$
5,984
|
$
20,294
|
$
9,408
|
|
Adjusted EPS (1)
|
$
0.33
|
$
0.12
|
$
0.58
|
$
0.09
|
|
(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
|
Six Months
Ended
|
|
June 30,
|
June 30,
|
|
2021
|
2020
|
2021
|
2020
|
|
Revenue by
segment (2):
|
|
|
|
|
|
North America
|
$
82,999
|
$
72,913
|
$
155,328
|
$ 157,849
|
|
Europe Middle East Africa
|
31,831
|
23,680
|
61,804
|
55,578
|
|
Emerging Markets
|
13,952
|
9,551
|
26,201
|
20,998
|
|
Total
revenue
|
$
128,782
|
$ 106,144
|
$
243,333
|
$ 234,425
|
|
|
|
Gross profit by
segment (2):
|
|
|
North America
|
$
16,676
|
$
13,527
|
$
31,169
|
$
26,585
|
|
Europe Middle East Africa
|
4,993
|
1,393
|
10,043
|
5,169
|
|
Emerging Markets
|
2,159
|
977
|
4,057
|
1,757
|
|
Total gross profit
|
$
23,828
|
$
15,897
|
$
45,269
|
$
33,511
|
|
|
Supplemental Cash
Flow Information:
|
|
Net cash
provided by (used in) operating activities
|
$
(3,935)
|
$
22,918
|
$
(3,371)
|
$
32,765
|
|
Capital expenditures
|
(554)
|
(579)
|
(1,009)
|
(1,046)
|
|
Free cash in
(out) flow
|
$
(4,489)
|
$
22,339
|
$
(4,380)
|
$
31,719
|
|
|
|
(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
|
Six Months
Ended
|
|
June 30,
|
June 30,
|
|
2021
|
2020
|
2021
|
2020
|
|
Net income (loss)
|
$
2,479
|
$
(606)
|
$
4,203
|
$
(1,900)
|
|
Interest expense
|
197
|
607
|
378
|
1,585
|
|
Income tax expense
(benefit)
|
812
|
(1,185)
|
1,253
|
(1,814)
|
|
Depreciation and
amortization
|
1,487
|
2,077
|
2,959
|
4,254
|
|
EBITDA
|
4,975
|
893
|
8,793
|
2,125
|
|
Adjustments:
|
|
|
|
|
|
Non-cash stock compensation expense
|
1,620
|
1,536
|
3,287
|
2,792
|
|
Restructuring charges
|
1,763
|
855
|
2,462
|
855
|
|
Severance expense
|
585
|
2,354
|
1,124
|
2,565
|
|
Loss on change
in fair value of contingent consideration
|
—
|
—
|
269
|
—
|
|
Foreign currency transaction losses
|
372
|
346
|
1,621
|
842
|
|
Legal acquisition/divestiture and transaction
|
1,408
|
—
|
2,258
|
1,038
|
|
Impairment of operating
lease right-of-use asset
|
—
|
—
|
103
|
255
|
|
Loss (gain) on
sale of business
|
377
|
—
|
377
|
(1,064)
|
|
Adjusted EBITDA
|
$
11,100
|
$
5,984
|
$
20,294
|
$
9,408
|
|
|
|
(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
|
Six Months
Ended
|
|
June 30,
|
June 30,
|
|
2021
|
2020
|
2021
|
2020
|
|
Diluted earnings (loss) per
share
|
$
0.14
|
$
(0.04)
|
$
0.23
|
$
(0.11)
|
|
Restructuring charges
|
0.07
|
0.04
|
0.10
|
0.04
|
|
Severance expense
|
0.02
|
0.10
|
0.05
|
0.11
|
|
Loss on change
in fair value of contingent consideration
|
—
|
—
|
0.01
|
—
|
|
Foreign currency transaction losses
|
0.02
|
0.01
|
0.07
|
0.03
|
|
Legal acquisition/divestiture and transaction
costs
|
0.06
|
—
|
0.10
|
0.04
|
|
Impairment of operating
lease right-of-use asset
|
—
|
—
|
—
|
0.01
|
|
Settlement of
contingent consideration in shares
|
—
|
0.01
|
—
|
0.01
|
|
Loss (gain) on
sale of business
|
0.02
|
—
|
0.02
|
(0.04)
|
|
Adjusted EPS
|
$
0.33
|
$
0.12
|
$
0.58
|
$
0.09
|
|
|
|
(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)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
|
(Unaudited)
|
|
|
|
Current assets:
|
|
|
|
|
Cash
|
$
15,460
|
|
$
23,076
|
|
Accounts and
other receivables
|
100,494
|
|
110,575
|
|
Unbilled revenue
|
38,254
|
|
28,100
|
|
Prepaid expenses and
other current assets
|
22,537
|
|
15,186
|
|
Assets held for sale
|
40,875
|
|
42,463
|
|
Total current assets
|
217,620
|
|
219,400
|
|
Property, plant
and equipment, net
|
3,880
|
|
4,650
|
|
Operating lease right-of-use assets
|
17,752
|
|
20,862
|
|
Goodwill and intangible assets, net
|
125,124
|
|
126,245
|
|
Other assets
|
9,012
|
|
10,619
|
|
Total assets
|
$
373,388
|
|
$
381,776
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
and accrued expenses
|
$
83,583
|
|
$
91,572
|
|
Current portion
of operating lease liabilities
|
5,382
|
5,523
|
|
Deferred revenue
|
16,511
|
16,509
|
|
Liabilities held
for sale
|
4,823
|
5,868
|
|
Total current
liabilities
|
110,299
|
119,472
|
|
Long-term
debt
|
8,995
|
12,748
|
|
Long-term portion
of operating lease liabilities
|
13,878
|
16,260
|
|
Other liabilities
|
9,386
|
9,950
|
|
Total
liabilities
|
142,558
|
158,430
|
|
Total stockholders' equity
|
230,830
|
223,346
|
|
Total liabilities and stockholders'
equity
|
$
373,388
|
|
$
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
