Gp Strategies Corp (GPX) 10-Q Quarterly Report November 2020

Global workforce transformation solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended September 30, 2020.

Overview:

•Revenue of $115.6 million for third quarter of 2020 compared to $139.0 million for third quarter of 2019 and compared to $106.1 million for the second quarter of 2020

•Gross profit of $20.7 million, or 17.9% of revenue, for third quarter of 2020 compared to $21.7 million, or 15.6%, for third quarter of 2019 and compared to $15.9 million, or 15.0% of revenue for the second quarter of 2020

•Diluted earnings per share of $0.03 for third quarter of 2020 compared to $0.13 per share for third quarter of 2019 and compared to diluted loss per share of $0.04 for the second quarter of 2020. (Adjusted EPS of $0.24 for the third quarters of 2020 and 2019, respectively, and compared to $0.12 for the second quarter of 2020, after adjusting for special items)

•Cash flow from operations of $12.6 million for third quarter of 2020 compared to $10.9 million for third quarter of 2019 and compared to $22.9 million for the second quarter of 2020

•Reduced long term-debt balance by $39.1 million to $43.8 million as of September 30, 2020 compared to $82.9 million as of December 31, 2019

•Divested IC Axon business on October 1, 2020 for approximately $28.0 million, less an escrow of $1.5 million, that will further reduce our debt during the fourth quarter of 2020

“In a tough environment, we are pleased with our third quarter of 2020 results that demonstrate the Company is effectively managing the business through the macroeconomic disruption caused by the COVID-19 pandemic. During the third quarter the Company delivered a sequential increase in revenue, gross margin, adjusted earnings per share and adjusted EBITDA compared to the second quarter of 2020.” stated Adam Stedham, Chief Executive Officer and President of GP Strategies.

“We successfully reduced our long-term debt and took actions to generate positive cash flow. The Company has reduced its long-term debt by $75.9 million, or 63%, in just 15 months. In addition, the sale of IC Axon further reduced debt in the fourth quarter of 2020. GP Strategies is in a position of strength with the flexibility to capitalize on opportunities as they develop in the marketplace.” concluded Mr. Stedham.

The following information was filed by Gp Strategies Corp (GPX) on Thursday, November 5, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Gp Strategies Corp's 10-Q Quarterly Report:

Financial - Cash Flow Highlight
The anticipated cash needs of our business could change significantly if events, including economic disruptions, arising from the COVID-19 pandemic worsen, or if other economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business.

Financial - Expense Highlight
On May 7, 2020 we entered into an amendment to the Credit Agreement that increases the maximum leverage ratio we are required to maintain from 3.0 to 1.0 to 3.75 to 1.0 for the fiscal quarters ending June 30, 2020, September 30, 2020 and December 31, 2020, and 3.00 to 1.0 for fiscal quarters ending March 31, 2021 and thereafter, and a minimum interest expense coverage ratio of 3.0 to 1.0.
Revenue - Product Highlight
The revenue decrease is primarily due to the following: a $10.3 million decrease due to the cancellation or postponement of training events and other project related work due to COVID-19 shutdowns; 25 a $4.6 million decrease due to divestiture of our alternative fuels division on January 1, 2020 and tuition program management business on October 1, 2019; a $0.9 million net decrease in our OPS practice and a $2.0 million net decrease in our TPS practice primarily due to a the overall macro-economic conditions impacting our shorter term project based work cycle; a $3.1 million net increase in our APS practice primarily due to the start of a multi-year outsourcing contract with a significant automotive client and an increase in our publications revenue; and a $0.1 million decrease in revenue due to changes in foreign currency exchange rates.
Other - Other Highlight
The increase in cash from operations is primarily due to an improvement in cash collections of accounts receivable during the nine months ended September 30, 2020 compared to the same period in 2019.
Financial - Debt
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Financial - Earnings
28 Gross Profit North America...Read more
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EMEA gross profit of $7.5...Read more
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26 General and Administrative Expenses...Read more
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Divestiture Effective October 1, 2020,...Read more
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The Company has taken a...Read more
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M & A - Other
For the nine months ended...Read more
Financial - Expense
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There were $1.2 million of...Read more
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The reorganization was done to...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Gp Strategies Corp provided additional information to their SEC Filing as exhibits

Exhibit 10.1: Material Contract

Exhibit 10.2: Material Contract

Exhibit 10.3: Material Contract

Exhibit 10.4: Material Contract

Exhibit 10.5: Material Contract

Exhibit 10.6: Material Contract

Exhibit 10.7: Material Contract

Exhibit 10.8: Material Contract

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: GPX
CIK: 70415
Form Type: 10-Q Quarterly Report
Accession Number: 0000070415-20-000168
Submitted to the SEC: Fri Nov 06 2020 4:12:08 PM EST
Accepted by the SEC: Fri Nov 06 2020
Period: Wednesday, September 30, 2020
Industry: Educational Services