GP Strategies Reports Fourth Quarter and Fiscal Year 2006 Results.ELKRIDGE, Md. -- GP Strategies Corporation (NYSE NYSE See: New York Stock Exchange : GPX GPX - Early system on UNIVAC II. Listed in CACM 2(5):16 (May 1959). ), a global provider of training, e-Learning (Electronic-LEARNING) An umbrella term for providing computer instruction (courseware) online over the public Internet, private distance learning networks or inhouse via an intranet. See CBT. solutions, management consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business service industry - an industry that provides services rather than tangible objects , and engineering services through its principal operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. General Physics Corporation, today reported strong fourth quarter and fiscal year 2006 results. Highlights: Fourth Quarter 2006 * Revenue of $45.4 million for fourth quarter of 2006, up $1.1 million or 2.6% compared to fourth quarter of 2005, and up $1.4 million or 3.1% from the third quarter of 2006 * Gross profit of $6.9 million for the fourth quarter of 2006, up $0.5 million or 8.5% compared to fourth quarter of 2005 * Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $3.5 million for the fourth quarter of 2006, up $0.2 million or 4.7% compared to the fourth quarter of 2005, and up $0.4 million or 13.7% compared to the third quarter of 2006 * Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become excluding non-recurring items of $4.1 million for fourth quarter of 2006, up $0.3 million or 8.2% compared to fourth quarter of 2005 Fiscal Year 2006 * Revenue of $178.8 million for 2006, up $3.2 million or 1.8% compared to 2005 * Operating income of $12.3 million for 2006, up $1.4 million or 12.3% compared to 2005 * Adjusted EBITDA excluding non-recurring items of $14.8 million for 2006, up $2.1 million or 17.0% compared to 2005 "GP Strategies' operating income of $3.5 million for the fourth quarter of 2006 was the Company's strongest operating performance in recent history," said Scott N. Greenberg Green·berg , Joseph Harold Born 1915. American linguist. His influential works include Languages of Africa (1966) and Language Universals (1966). Noun 1. , CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of GP Strategies. "During 2006, we broadened our scope of work with customers. We achieved these improvements despite the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. of our government business. This performance continues to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our business model and our improving position within the training outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. marketplace." Mr. Greenberg continued, "the acquisition of Sandy Corporation which was completed in January 2007 will enhance our existing service offerings by adding custom product sales training to our offering mix. Sandy has an exceptional reputation for providing dealership product sales training solutions to manufacturers in the U.S. automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. , a market Sandy has served for over 30 years. We will support the needs of Sandy's current customers and intend to support the expansion of Sandy's offerings worldwide and offer Sandy's unique innovative solutions to our existing clients. This acquisition is consistent with our strategy of being a full-service provider of custom learning solutions to Fortune 500 and other commercial and government customers." Fourth Quarter Results During the fourth quarter of 2006, revenue increased $1.1 million, or 2.6%, to $45.4 million from $44.3 million in the fourth quarter of 2005. The increase in revenue is largely due to a net increase in revenue of $3.1 million in our Manufacturing & BPO BPO Business Process Outsourcing BPO Benevolent & Protective Order (of Elks of the USA) BPO Benzoyl Peroxide BPO Business Process Optimization BPO Broker Price Opinions BPO Buffalo Philharmonic Orchestra segment, primarily due to the expansion of business process outsourcing Business process outsourcing (BPO) is the contracting of a specific business task, such as payroll, to a third-party service provider. Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain its position in services with new and existing customers and an increase in revenue from our operations in the United Kingdom, primarily resulting from an acquisition during the first quarter of 2006. The increase in revenue for this business segment was offset by a net decrease in revenue of $2.0 million in our Process, Energy & Government segment, primarily due to a reduction in funding during 2006 for our government contract supporting the Domestic Preparedness pre·par·ed·ness n. The state of being prepared, especially military readiness for combat. Noun 1. preparedness - the state of having been made ready or prepared for use or action (especially military action); "putting them Equipment Technical Assistance Program (DPETAP DPETAP Domestic Preparedness Equipment Technical Assistance Program ). During the fourth quarter of 2006, operating income increased $0.2 million, to $3.5 million from $3.3 million in the fourth quarter of 2005. The increase in operating income is attributable to an increase in gross profit of $0.5 million, which consisted of an increase in gross profit of $1.0 million in our Manufacturing & BPO segment, offset by a decrease in gross profit of $0.5 million in our Process, Energy & Government segment primarily due to the revenue fluctuations discussed above. The increase in operating income was offset by an increase in selling, general and administrative expenses of $0.4 million during the fourth quarter of 2006 compared to the fourth quarter of 2005, primarily due to an increase in compensation expense. During the fourth quarter of 2006, income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before income taxes decreased $5.2 million to $3.4 million, compared to $8.6 million for the fourth quarter of 2005. The decrease is primarily due to a gain on the EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement of $5.6 million in the fourth quarter of 2005 which did not recur in 2006. Excluding this non-recurring item, income from continuing operations before income taxes increased $0.3 million during the fourth quarter of 2006 compared to the fourth quarter of 2005, primarily due to the increase in operating income discussed above. Fiscal Year 2006 Results During the year ended December 31, 2006, revenue increased $3.2 million, or 1.8%, to $178.8 million, as compared to revenue of $175.6 million for the year ended December 31, 2005. The increase in revenue is largely due to a net increase in revenue of $11.7 million in our Manufacturing & BPO segment, primarily due to the expansion of business process outsourcing services with new and existing customers, an increase in revenue from our operations in the United Kingdom as discussed above, and an increase in other technical services including lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. . The increase in revenue for this business segment was offset by a net decrease in revenue of $8.5 million in our Process, Energy & Government segment primarily due to a reduction in funding during 2006 for the DPETAP government contract discussed above. During the year ended December 31, 2006, operating income increased $1.4 million to $12.3 million from $11.0 million for the year ended December 31, 2005. The improvement is primarily attributable to an increase in gross profit of $1.6 million, which consisted of an increase in gross profit of $4.6 million in our Manufacturing & BPO segment, offset by a decrease in gross profit of $3.0 million in our Process, Energy & Government segment primarily due to the revenue fluctuations discussed above. This increase in operating income was offset by an increase in selling, general and administrative expenses of $0.2 million in 2006 compared to 2005 primarily due to an increase in compensation expense. During the year ended December 31, 2006, income from continuing operations before income taxes decreased $3.5 million to $11.7 million, compared to $15.2 million for the year ended December 31, 2005. The decrease is primarily due to a gain on the EDS litigation settlement of $5.6 million in 2005 which did not recur in 2006. Excluding this non-recurring item, income from continuing operations before income taxes increased $2.0 million during 2006 compared to 2005, primarily due to the increase in operating income discussed above, as well as an increase in other income of $0.7 million in 2006 compared to 2005, primarily due to income from a joint venture. Investor Call The Company has scheduled an investor conference call for 10:00 a.m. ET on March 12, 2007. In addition to prepared remarks from management, there will be a question and answer session on the call. The dial-in number for the live conference call will be 888-633-3324 using conference ID number 1508897. A telephone replay of the call will also be available beginning at 1:00 p.m. on March 12th, until 11:59 p.m. on March 26th. To listen to the replay, dial 800-642-1687 or 706-645-9291, using conference ID number 1508897. Presentation of Non-GAAP Information This press release contains non-GAAP financial measures, including adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) excluding non-recurring items. The Company believes this non-GAAP financial measure is useful to investors in evaluating the Company's results. This measure 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 adjusted EBITDA excluding non-recurring items 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). equivalent, see the Non-GAAP Reconciliation - Adjusted EBITDA Excluding Non-Recurring Items, along with related footnotes, below. About GP Strategies Corporation GP Strategies, whose principal operating subsidiary is General Physics Corporation, is a NYSE listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → (GPX). General Physics is a global provider of training, e-Learning solutions, management consulting, and engineering services. Through its Sandy Corporation division, GP provides custom sales training solutions. GP's 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 about GP Strategies may be found at www.gpstrategies.com and about General Physics at www.gpworldwide.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. We make statements in this press release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. 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. 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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