GP Strategies Reports Third Quarter and Nine Months 2005 Pre-Tax Continuing Operating Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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). ):
Quarter highlights:
-- Operating income for General Physics core business up 27.0% versus
third quarter of 2004
-- Operating income as a percentage of revenue for General Physics
increases from 6.6% in the third quarter of 2004 to 8.5% in the
third quarter of 2005
GP Strategies Corporation (NYSE: GPX) today reported 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 tax expense of $2.3 million for the third quarter of 2005 as compared to $1.1 million for the third quarter of 2004. The significant increase for the quarter was due to improving General Physics' 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. from $2.9 million, or 6.6%, for the quarter ended September September: see month. 30, 2004 to $3.7 million, or 8.5%, for the quarter ended September 30, 2005, as well as reducing other corporate overhead expenses. Included in the third quarter of 2005 was approximately $0.5 million of legal expense primarily related to the Company's legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. against 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. . The Company is currently finalizing the tax accounting treatment for its dividend to its stockholders of GSE GSE general somatic efferent system. Systems. As of September 30, 2005, GP Strategies' operations consist of its core business, General Physics Corporation ("General Physics"). General Physics is 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. As previously announced, GP Strategies completed the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of its 57% ownership interest in GSE Systems, Inc. ("GSE") on September 30, 2005 through a dividend to its stockholders. Stockholders received in the spin-off 0.283075 shares of GSE common stock for each share of GP Strategies common stock or Class B stock held on the record date of September 19, 2005. Subsequent to the spin-off, GP Strategies ceased to have any ownership interest in GSE. The operations of GSE have been removed from the continuing operations presented in the table that follows for the quarter and nine months ended September 30, 2005 and 2004. The results of operations of National Patent Development Corporation ("NPDC NPDC National Plant Data Center (USDA) NPDC Naval Personnel Development Command NPDC New Product Development Center NPDC National Petroleum Development Company NPDC National Parts Distribution Center "), which were spun off on November November: see month. 24, 2004, are also excluded from continuing operations for the quarter and nine months ended September 30, 2004. In the third quarter of 2005, General Physics' revenue decreased slightly by $0.1 million to $44.1 million, as compared to revenue of $44.2 million in the third quarter of 2004. Excluding revenue of approximately $2.2 million from post disaster relief services in the aftermath of the hurricanes in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and during the third quarter of 2004, revenue at General Physics increased by approximately 5.3%. For the nine months ended September 30, 2005, General Physics' revenue increased by $12.5 million or 10.5% to $131.3 million, as compared to revenue of $118.8 million for the nine months ended September 30, 2004. These improvements were due to new contract awards and a broader scope of training and 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 to existing customers. For the nine months ended September 30, 2005, income from continuing operations before income tax expense was $6.6 million as compared to $1.6 million for the nine months ended September 30, 2004. The improvement was primarily due to increased profitability at General Physics and reduced other corporate overhead expenses. "We continue to deliver increased profitability in General Physics and reduced corporate overhead expenses," said Scott N. Greenberg, 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. "Our third quarter results reflect our continued success in improving profitability and the spin-off of GSE Systems will enable management to focus on its core operations." The Company has scheduled an investor conference call for 10:00 a.m. ET on November 8, 2005. 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 888-412-9257. A telephone replay of the call will also be available beginning at 11:00 a.m. on November 8, until 11:59 p.m. on November 15. To listen to the replay, dial 800-642-1687 or 706-645-9291, using conference ID number 2270166. About GP Strategies Corporation GP Strategies, whose core 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. is General Physics, 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, improving the effectiveness of organizations by customizing solutions to meet the specific needs of 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. The 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. contained herein reflect GP Strategies' management's current views with respect to future events and financial performance. We use words such as "expects", "intends" and "anticipates" to indicate forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of GP Strategies, including, but not limited to, our holding company structure, failure to continue to attract and retain personnel, loss of business from significant customers, failure to keep pace with technology, changing economic conditions, competition, our ability to implement procedures that will reduce the likelihood that material weaknesses in our internal controls will occur in the future, and those other risks and uncertainties detailed in GP Strategies' periodic reports and registration statements filed with the Securities and Exchange Commission. If any one or more of these expectations and assumptions proves incorrect, actual results will likely differ materially from those contemplated by the forward-looking statements. Even if all of the foregoing assumptions and expectations prove correct, actual results may still differ materially from those expressed in the forward-looking statements as a result of factors we may not anticipate or that may be beyond our control. While we cannot assess the future impact that any of these differences could have on our business, financial condition, results of operations and cash flows or the market price of shares of our common stock, the differences could be significant. We do not undertake to update any forward-looking statements made by us. TABLE FOLLOWS The following table summarizes the pre-tax continuing operating results of GP Strategies Corporation ("the Company" or "GP Strategies"), and the consolidated pre-tax results of their operations for the three and nine months ended September 30, 2005 and 2004. As previously announced, GP Strategies completed the spin-offs of GSE on September 30, 2005 and NPDC on November 24, 2004. Subsequent to these spin-offs, the Company's operations consist of General Physics Corporation ("General Physics") and the Company ceased to have any ownership interest in GSE and NPDC. The operations of GSE for the quarter and nine months ended September 30, 2005 and 2004 and the operations of NPDC, which included Five Star Products, Inc. and MXL MXL Mexicali, Baja California, Mexico - Rodolfo Sanchez Taboada (Airport Code) MXL Musicmatch Access Layer Industries, Inc., for the quarter and nine months ended September 30, 2004 have been excluded from the results below.
(Unaudited - in thousands, Quarters ended Nine months ended
except per share amounts): September 30, September 30,
-------------------------------------
2005 2004 2005 2004
-------- -------- --------- ---------
Revenue:
General Physics $44,255 $44,322 $131,803 $119,264
Less: Intercompany revenue from
GSE (196) (144) (525) (450)
-------- -------- --------- ---------
Total consolidated revenue $44,059 $44,178 $131,278 $118,814
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Operating income:
General Physics $3,744 $2,947 $10,216 $6,640
Less: Intercompany from GSE (196) (144) (525) (450)
Other corporate overhead
expenses (920) (1,271) (2,087) (3,423)
-------- -------- --------- ---------
Total operating income 2,628 1,532 7,604 2,767
Other income 87 104 141 321
-------- -------- --------- ---------
Income from continuing
operations before interest
expense and income taxes 2,715 1,636 7,745 3,088
Interest expense (387) (490) (1,129) (1,470)
-------- -------- --------- ---------
Income from continuing
operations before income taxes $2,328 $1,146 $6,616 $1,618
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