Columbia, MD – July 31, 2018 – Global performance improvement solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended June 30, 2018.


  • Revenue of $133.7 million for second quarter of 2018 compared to $131.2 million for second quarter of 2017
  • Gross profit of $22.6 million for second quarter of 2018 compared to 22.4 million for second quarter of 2017
  • Diluted earnings per share of $0.22 for second quarter of 2018 compared to $0.35 per share for second quarter of 2017 (includes restructuring charges of $0.11 per share in the second quarter of 2018)

“In the second quarter of 2018, GP Strategies had higher revenue and gross profit compared to the second quarter of 2017,” stated Scott N. Greenberg, Chief Executive Officer of GP Strategies. “We achieved these results with a strong contribution from our engineering and technical services practice which reported revenue growth of 11% or $3.0 million in the second quarter. We are pleased with the traction we are seeing as a result of our investment in business development efforts and the centralization of our sales organization. Our revenue and gross profit increase in the quarter was offset by a decline in UK job skills training services due to the previously discussed funding changes by the UK government for their apprenticeship programs. We are however adapting to these changes and have added new apprenticeship programs to our portfolio and expect that in 2019, our revenues in that business should return to levels more comparable to prior years. In addition, we are excited about the previously announced acquisition of IC Axon which is part of our long term strategy of growing revenues in the life sciences and pharmaceutical industry to become a major vertical of the Company.”

The Company’s revenue increased $2.5 million or 2% during the second quarter of 2018 compared to the same quarter in 2017. The revenue growth was primarily attributable to a $4.2 million or 5.6% increase in the Workforce Excellence segment, partially offset by a $1.7 million or 3.1% decline in the Business Transformation Services segment. Gross profit was $22.6 million, or 16.9% of revenue, second quarter of 2018 compared to $22.4 million, or 17.1% of revenue, in the second quarter of 2017.

Operating income decreased $3.4 million to $5.7 million for the second quarter of 2018 from $9.1 million for the second quarter of 2017. The decrease in operating income is primarily due to the following: (i)  a $1.3 million increase in G&A expenses primarily due to an increase in bad debt expense and increased legal fees related to acquisitions; (ii) a $0.6 million increase in sales and marketing expense due to investment in business development; and (iii) $2.5 million, or $0.11 per share, of restructuring charges during the second quarter of 2018 in connection with the Company’s restructuring plan initiated in the fourth quarter of 2017. The restructuring charges consisted of facility consolidation charges totaling $1.3 million and severance of $1.2 million. The decreases in operating income were offset by a $1.0 million increase in the gain on change in fair value of contingent consideration for previously completed acquisitions.

Interest expense decreased to negative $0.2 million for the second quarter of 2018 compared to $0.5 million for the second quarter of 2017 primarily due to a $1.0 million reversal of an interest accrual related to contingent interest associated with unremitted value-added tax (VAT) from prior year client billings which was favorably settled during the second quarter of 2018. Other expense increased $0.9 million during the second quarter of 2018 primarily due to an increase in foreign currency losses.

Income tax expense was $1.3 million, or a 27.1% effective tax rate, for the second quarter of 2018 compared to $2.6 million, or a 30.7% effective tax rate, for the second quarter of 2017. The decrease in the effective income tax rate in 2018 compared to 2017 is primarily due to a decrease in the U.S. statutory tax rate from 35% to 21% under the Tax Cuts and Jobs Act that was enacted on December 22, 2017.

Net income was $3.6 million, or $0.22 per share, for the second quarter of 2018 compared to $5.9 million, or $0.35 per share, for the second quarter of 2017. Excluding special items during the quarter, adjusted earnings were $0.34 per share for the second quarter of 2018 compared to $0.41 per share for the second quarter of 2017.

Balance Sheet and Cash Flow Highlights

As of June 30, 2018, the Company had cash of $14.1 million compared to $23.6 million as of December 31, 2017. The Company had $40.0 million of long-term debt outstanding as of June 30, 2018.  In addition, the Company had $61.8 million of short-term borrowings outstanding and $33.0 million of available borrowings under its line of credit as of June 30, 2018.

Cash provided by operating activities was $7.1 million for the six months ended June 30, 2018 compared to $19.8 million for the same period in 2017. During the six months ended June 30, 2018 and 2017, the Company repurchased approximately 313,000 and 101,000 shares, respectively, of its common stock in the open market for a total cost of approximately $7.3 million and $2.4 million, respectively. As of June 30, 2018, there was approximately $4.5 million available for future repurchases under the buyback program.

Investor Call

The Company has scheduled an investor conference call and webcast for 10:00 a.m. Eastern Time on July 31, 2018. 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: or by calling +1 (866) 777-2509 within the US, or +1 (412) 317-5413 internationally, and requesting the “GP Strategies Conference.” 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

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 10122498.

Presentation of Non-GAAP Information

This press release contains non-GAAP financial measures, including EBITDA (earnings before interest, income taxes, depreciation and amortization), 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  these non-GAAP financial measures to the most comparable GAAP equivalents, see the Non-GAAP Reconciliations, along with related footnotes, below.

About GP Strategies

GP Strategies Corporation (NYSE: GPX) is a global performance improvement solutions provider of sales and technical 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, manufacturing, process and energy industries, and other commercial and government customers.  Additional information may be found at