COLUMBIA, Md. — Aug. 9, 2021 — Global workforce transformation solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2021.
- 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
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 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.
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.