Global workforce transformation solutions provider GP Strategies Corporation (NYSE: GPX) today reported financial results for the quarter ended December 31, 2020.

Overview:

Income Statement Highlights:

• Revenue of $123.1 million for the fourth quarter of 2020 compared to $115.6 million for the third quarter of 2020 and $155.4 million for the fourth quarter of 2019
• Gross profit of $23.1 million, or 18.8% of revenue for the fourth quarter of 2020 compared to $20.7 million, or 17.9% of revenue for the third quarter of 2020 and $23.3 million, or 15.0% of revenue, for the fourth quarter of 2019
• Diluted earnings per share of $0.47 for the fourth quarter of 2020 compared to $0.03 per share for the third quarter of 2020 and $0.56 per share for the fourth quarter of 2019 (Adjusted EPS of $0.38 for the fourth quarter of 2020 compared to $0.24 per share for the third quarter of 2020 and $0.23 for the fourth quarter of 2019)

Balance Sheet and Cash Flow Highlights:

• Cash and equivalents of $23.1 million at December 31, 2020 compared to $8.2 million at December 31, 2019
• Reduced long term-debt balance by $70.2 million to $12.7 million as of December 31, 2020 compared to $82.9 million as of December 31, 2019
• Cash flow from operations of $13.6 million for the fourth quarter of 2020 compared to $8.8 million for the fourth quarter of 2019
• Cash flow from operations of $59.0 million for the year ended December 31, 2020 compared to $13.4 million for the year ended December 31, 2019

"We are proud of the accomplishments of the Company in 2020," stated Adam Stedham, Chief Executive Officer and President of GP Strategies. "The fourth quarter and full year results of 2020 clearly demonstrate the success of the proactive strategy we implemented early in 2020 to ensure financial stability and achieve strong operating results despite lower revenue due to the impact of the COVID-19 pandemic. In the fourth quarter of 2020, the Company delivered a sequential increase in revenue, gross margin, adjusted earnings per share and adjusted EBITDA compared to both the second and third quarters. Additionally, our success in reducing long-term debt, and increasing cash, place the Company in a strong position to capitalize on opportunities that may arise."

The Company's revenue decline when compared to the quarter and year ended December 31, 2019 is primarily due to circumstances related to the macroeconomic impact of COVID-19, specifically the postponement of certain training events and other delays in client projects. In addition, our revenue for the quarter and year ended December 31, 2020 decreased $6.3 million and $19.3 million respectively, compared to revenue for the fourth quarter and year ended December 31, 2019 as the result of business divestitures. Foreign currency exchange rate changes also resulted in a total $0.5 million decrease in U.S. dollar reported revenue for the year ended December 31, 2020 compared to the year ended December 31, 2019.

The Company had operating income of $12.2 million for the fourth quarter of 2020, a $3.2 million decrease compared to operating income of $15.3 million for the fourth quarter of 2019. The decline in operating income is primarily due to the gain on sale from the Company's Tuition Reimbursement Business that closed in the fourth quarter of 2019 being $7.1 million greater than the gain on sale from the Company's IC Axon Business that closed in the fourth quarter of 2020, a gross profit decrease of $0.2 million, or 1.0%, partially offset by a $4.1 million decrease in general and administrative expenses. For the fourth quarter of 2020, the company incurred severance expense of $1.9 million which is reflected in cost of revenue on the consolidated statement of operations.

Net income was $8.4 million, or $0.47 per share, for the fourth quarter of 2020 compared to net income of $9.5 million, or $0.56 per share, for the fourth quarter of 2019. After accounting for special items, which are set forth in the Non-GAAP Reconciliation - Adjusted EPS below, Adjusted EPS was $0.38 and $0.23 for the fourth quarter of 2020 and 2019, respectively. Net income was $7.1 million, or $0.41 per share, for the year ended December 31, 2020 compared to net income of $15.2 million, or $0.90 per share, for 2019. After accounting for special items, which are set forth in the Non-GAAP Reconciliation - Adjusted EPS below, Adjusted EPS was $0.73 and $0.84 for 2020 and 2019, respectively.

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.