Delaware
|
52-0845774
|
(State of Incorporation)
|
(I.R.S. Employer Identification No.)
|
70 Corporate Center
|
|
11000 Broken Land Parkway, Suite 200, Columbia, MD
|
21044
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
|
Name of each exchange on which registered:
|
Common Stock, $.01 par value
|
|
New York Stock Exchange, Inc.
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
Class
|
|
Outstanding
|
Common Stock, par value $.01 per share
|
|
16,592,007 shares
|
|
Page
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Content and Curriculum Development.
Services include a fundamental analysis of the client’s needs, curriculum design, instructional material development (in hard copy, electronic/software or other format), information technology service support and delivery. Our instructional delivery capabilities include traditional classroom, structured on-the-job training (OJT), just-in-time methods, computer-based, web-based, video-based and the full spectrum of digital learning technologies.
|
•
|
Digital Learning.
Though part of our content development services, our digital learning capabilities distinguish themselves because we are able to function as a single-source digital learning solutions provider through our integration services and hosting, the development and provisioning of proprietary content and the aggregation and distribution of third party content. While considered a custom content developer in this arena, we are also the creators of GPiLearn
™
, a packaged, web-based training curriculum designed to equip workers with specialized maintenance, mechanical, operator and technical skills throughout the energy industry (nuclear, fossil, hydroelectric, wind farms and other power generating plants) in order to address that industry's growing needs for a skilled and multi-skilled workforce.
|
•
|
Learning & Training Outsourcing.
We offer a wide range of managed learning services, including design, delivery and global management of comprehensive learning programs for national and multinational businesses and government organizations. We can deliver our services individually or as a complete, integrated training solution. Solutions include the management of our customers’ training departments, as well as administrative processes, such as tuition assistance program management, vendor management, call center/help desk administration and learning management system (LMS) administration. Our services encompass a wide spectrum of learning engagements ranging from focusing on a single aspect of a learning process to multi-year contracts where we manage the learning infrastructure of our customer. In addition, we automate a large amount of our customers’ tuition reimbursement programs by utilizing our own proprietary software.
|
•
|
Documentation Development.
Training-related documentation products include custom instructor and student training manuals, job aids to support technical skills development and instructional materials suitable for web-based and blended learning solutions.
|
•
|
Specialized Training Areas.
Our professionals possess diverse skills in multiple industries that enable us to address specialized training needs, including technical training, machine and equipment maintenance training, product sales training and incentive programs, leadership development training, regulatory training, environmental training and homeland security training, to name a few.
|
•
|
Learning & Development Transformation Consulting.
We work with organizations on their learning and development transformation encompassing strategy development, governance, and execution that aligns with their key performance objectives and business goals.
|
•
|
Organization & Leadership Development.
We recognize that true success occurs when all parts of the organization are aligned and prepared to tackle challenges in a unified manner.We work with organizations to design leadership development programs to serve the strategic and culture shifts their businesses need from their leaders.
|
•
|
Lean Enterprise.
Our Lean and Six Sigma experts provide high-level lean enterprise consulting services, as well as training in the concept, methods and application of lean enterprise and other quality practices, organizational development and change management.
|
•
|
Engineering.
We provide engineering consulting services to support regulatory and environmental compliance, modification of facilities and processes, plant performance improvement, reliability-centered maintenance practices and plant start-up activities.
|
•
|
Information Technology.
Consulting services include IT consulting and platform adoption services, system selection consulting, operations continuity assessment, planning, training and procedure development.
|
•
|
Customer Loyalty.
Our Sandy Training & Marketing segment provides consultation on customer loyalty programs and supports those services with brand loyalty publications, incentive programs and customer-focused sales training. Sandy develops personalized publications for automotive clients which establish a link between the manufacturer/dealer and each customer.
|
•
|
Performance Readiness.
We offer change-management strategies to help our customer's employees accept, adopt and perform in new ways and be open to change.
|
•
|
Homeland Security and Emergency Management.
We deliver consulting services from physical security assessments to all-hazards emergency planning and preparedness. These services include training, exercises and documentation.
|
•
|
Maintenance & Reliability.
We help manufacturers develop strategies, assessments and leadership alignment tactics for maintenance and reliability programs, as well as provide the training, management systems and documentation that support an enduring culture of waste elimination and variability reduction.
|
•
|
Power Plant Performance.
We deliver multiple solutions to optimize power plant assets and mitigate risk. We have also developed proprietary products to support the power industry, including our EtaPRO
TM
software, installed in nearly every electricity-generating power plant in North America, as well as our Virtual Plant
™
and other software applications for the power generation industry.
|
•
|
Alternative Fueling Station Design and Engineering
. We provide engineering design, permitting, fabrication, construction and maintenance of alternative fuel stations, including liquefied natural gas (LNG), liquid to compressed natural gas (LCNG), compressed natural gas (CNG) and hydrogen fueling stations for vehicle fleets and public-access stations in the United States.
|
•
|
Technical Support.
Services in this area include procedure writing and configuration control for capital intensive facilities, plant start-up assistance, logistics support (e.g., inventory management and control), implementation and engineering assistance for facility or process modifications, facility management for high technology training environments, staff augmentation and help-desk support for standard and customized client desktop applications.
|
•
|
Environmental Services.
We provide environmental engineering services, including the development and management of site environmental remediation plans and perform other services in regard to air and water quality, hazardous waste and the stewardship of natural resources.
|
Fixed fee per transaction
|
45
|
%
|
Fixed price
|
22
|
|
Time-and-materials, including fixed rate
|
29
|
|
Cost-reimbursable
|
4
|
|
Total revenue
|
100
|
%
|
•
|
changes in economic and general market conditions;
|
•
|
changes in the outlook and financial condition of certain of our significant customers and industries in which we have a concentration of business;
|
•
|
changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
sales of common stock by our directors, officers and significant stockholders;
|
•
|
factors affecting securities of companies included in the Russell 2000
R
Index, in which our common stock is included;
|
•
|
our failure to achieve operating results consistent with securities analysts’ projections; and
|
•
|
the operating and stock price performance of competitors.
|
•
|
the overall level of services and products sold;
|
•
|
the volume of publications shipped by our Sandy Training & Marketing segment each quarter, because revenue and cost of publications contracts are recognized in the quarter during which the publications ship;
|
•
|
fluctuations in project profitability;
|
•
|
the gain or loss of material clients;
|
•
|
the timing, structure and magnitude of acquisitions;
|
•
|
participant training volume and general levels of outsourcing demand from clients in the industries that we serve;
|
•
|
the budget and purchasing cycles of our clients, especially of the governments and government agencies that we serve;
|
•
|
the commencement or completion of client engagements or services and products in a particular quarter;
|
•
|
currency fluctuations; and
|
•
|
the general level of economic activity.
|
•
|
acquisitions may require significant capital resources and divert management’s attention from our existing business;
|
•
|
acquisitions may not provide the benefits anticipated;
|
•
|
acquisitions could subject us to contingent or other liabilities, including liabilities arising from events or conduct predating the acquisition of a business that were not known to us at the time of the acquisition;
|
•
|
we may incur significantly greater expenditures in integrating an acquired business than had been initially anticipated;
|
•
|
acquisitions may create unanticipated tax and accounting problems; and
|
•
|
acquisitions may result in a material weakness in our internal controls if we are not able to successfully establish and implement proper controls and procedures for the acquired business.
|
•
|
will identify suitable acquisition candidates;
|
•
|
can consummate acquisitions on acceptable terms;
|
•
|
can successfully compete for acquisition candidates against larger companies with significantly greater resources;
|
•
|
can successfully integrate any acquired business into our operations or successfully manage the operations of any acquired business; or
|
•
|
will be able to retain an acquired company’s significant client relationships, goodwill and key personnel or otherwise realize the intended benefits of any acquisition.
|
•
|
the need to compete against companies or teams of companies that may have more financial and marketing resources and more experience in bidding on and performing major contracts than we have;
|
•
|
the need to compete against companies or teams of companies that may be long-term, entrenched incumbents for a particular contract for which we are competing;
|
•
|
the need to compete to retain existing contracts that have in the past been awarded to us;
|
•
|
the expense and delay that may arise if our competitors protest or challenge new contract awards;
|
•
|
the need to submit proposals for scopes of work in advance of the completion of their design, which may result in unforeseen cost overruns;
|
•
|
the substantial cost and managerial time and effort, including design, development and marketing activities necessary to prepare bids and proposals for contracts that we may not win;
|
•
|
the need to develop, introduce and implement new and enhanced solutions to our customers’ needs;
|
•
|
the need to locate and contract with teaming partners and subcontractors; and
|
•
|
the need to accurately estimate the resources and costs that will be required to perform over the term of the contract and any extension periods any fixed price or fixed rate contract that we win.
|
•
|
greater difficulty in staffing and managing foreign operations;
|
•
|
greater risk of uncollectible accounts;
|
•
|
longer collection cycles;
|
•
|
logistical and communications challenges;
|
•
|
potential adverse changes in laws and regulatory practices, including export license requirements, trade barriers, tariffs and tax laws;
|
•
|
changes in labor conditions, burdens and costs of compliance with a variety of foreign laws;
|
•
|
political and economic instability;
|
•
|
increases in duties and taxation;
|
•
|
exchange rate risks;
|
•
|
greater difficulty in protecting intellectual property;
|
•
|
general economic and political conditions in these foreign markets;
|
•
|
acts of war or terrorism or natural disasters, and limits on the ability of governments to respond to such acts;
|
•
|
restrictions on the transfer of funds into or out of a particular country; or
|
•
|
nationalization of foreign assets and other forms of governmental protectionism.
|
|
|
2017
|
||||||
Quarter
|
|
High
|
|
Low
|
||||
First
|
|
$
|
29.65
|
|
|
$
|
22.70
|
|
Second
|
|
28.35
|
|
|
23.00
|
|
||
Third
|
|
31.05
|
|
|
25.95
|
|
||
Fourth
|
|
31.25
|
|
|
22.30
|
|
Company / Index
|
|
Year ended December 31,
|
||||||||||||||||||||||
Name
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
GP Strategies Corp.
|
|
$
|
100.00
|
|
|
$
|
144.26
|
|
|
$
|
164.31
|
|
|
$
|
121.60
|
|
|
$
|
138.50
|
|
|
$
|
112.35
|
|
NYSE Market Index
|
|
100.00
|
|
|
126.28
|
|
|
134.81
|
|
|
129.29
|
|
|
144.73
|
|
|
171.83
|
|
||||||
Peer Group Index
|
|
100.00
|
|
|
161.32
|
|
|
160.79
|
|
|
154.55
|
|
|
205.70
|
|
|
326.44
|
|
|
|
Issuer Purchases of Equity Securities
|
|||||||||||
Month
|
|
Total number
of shares
purchased
(2)
|
|
Average
price paid
per share
|
|
Total number
of shares
purchased as
part of publicly
announced program
(1)
|
|
Approximate
dollar value of
shares that may yet
be purchased under
the program
|
|||||
October 1 - 31, 2017
|
|
137
(2)
|
|
$
|
29.15
|
|
|
—
|
|
|
$
|
3,631,000
|
|
November 1 - 30, 2017
|
|
42,882
(2)
|
|
$
|
24.12
|
|
|
31,500
|
|
|
$
|
12,893,000
|
|
December 1 - 31, 2017
|
|
63,992
(2)
|
|
$
|
23.11
|
|
|
49,426
|
|
|
$
|
11,748,000
|
|
(1)
|
Represents shares repurchased in the open market in connection with our share repurchase program under which we may repurchase shares of our common stock from time to time in the open market subject to prevailing business and market conditions and other factors. There is no expiration date for the repurchase program. In November 2017, the Company's Board of Directors authorized an increase to the share repurchase program of $10 million.
|
(2)
|
Includes shares surrendered to satisfy tax withholding obligations on restricted stock units which vested during these periods and shares surrendered to exercise stock options and satisfy the related tax withholding obligations.
|
|
|
Years ended December 31,
|
||||||||||||||||||
Statement of Operations Data
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Revenue
|
|
$
|
509,208
|
|
|
$
|
490,559
|
|
|
$
|
490,280
|
|
|
$
|
501,867
|
|
|
$
|
436,689
|
|
Gross profit
|
|
82,027
|
|
|
80,157
|
|
|
81,992
|
|
|
89,575
|
|
|
76,265
|
|
|||||
Interest expense
|
|
3,132
|
|
|
1,568
|
|
|
1,381
|
|
|
833
|
|
|
366
|
|
|||||
Income before income taxes
|
|
19,689
|
|
|
30,034
|
|
|
29,623
|
|
|
42,823
|
|
|
38,488
|
|
|||||
Net income
|
|
12,891
|
|
|
20,247
|
|
|
18,789
|
|
|
27,098
|
|
|
23,756
|
|
|||||
Diluted earnings per share
|
|
0.76
|
|
|
1.21
|
|
|
1.09
|
|
|
1.43
|
|
|
1.23
|
|
|
|
December 31,
|
||||||||||||||||||
Balance Sheet Data
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Cash
|
|
$
|
23,612
|
|
|
$
|
16,346
|
|
|
$
|
21,030
|
|
|
$
|
14,541
|
|
|
$
|
5,647
|
|
Short-term borrowings
|
|
37,696
|
|
|
17,694
|
|
|
34,084
|
|
|
20,799
|
|
|
407
|
|
|||||
Working capital
|
|
49,785
|
|
|
59,859
|
|
|
40,322
|
|
|
43,537
|
|
|
58,730
|
|
|||||
Total assets
|
|
365,007
|
|
|
315,601
|
|
|
302,969
|
|
|
305,452
|
|
|
280,156
|
|
|||||
Long-term debt, including current maturities
|
|
28,000
|
|
|
40,000
|
|
|
24,444
|
|
|
37,777
|
|
|
—
|
|
|||||
Stockholders’ equity
|
|
188,054
|
|
|
167,496
|
|
|
158,344
|
|
|
151,725
|
|
|
193,027
|
|
|
|
Years ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(Dollars in thousands)
|
||||||
Learning Solutions
|
|
$
|
214,820
|
|
|
$
|
208,998
|
|
Professional & Technical Services
|
|
101,051
|
|
|
101,907
|
|
||
Sandy Training & Marketing
|
|
101,104
|
|
|
101,768
|
|
||
Performance Readiness Solutions
|
|
92,233
|
|
|
77,886
|
|
||
|
|
$
|
509,208
|
|
|
$
|
490,559
|
|
•
|
a $5.7 million net increase in training content development and managed learning services;
|
•
|
a $0.8 million revenue increase attributable to the Jencal Training acquisition completed on March 1, 2016;
|
•
|
a $1.3 million revenue increase attributable to the Emantras acquisition completed on April 1, 2017; and
|
•
|
a $1.1 million revenue increase attributable to the YouTrain acquisition completed on August 31, 2017; partially offset by
|
•
|
a $3.1 million decrease in revenue due to unfavorable changes in exchange rates.
|
•
|
a $2.1 million decrease in training and technical services for oil and gas clients; and
|
•
|
a $1.0 million decrease in revenue due to unfavorable changes in foreign currency exchange rates; partially offset by
|
•
|
a $1.2 million increase in revenue in alternative fuels design and build projects; and
|
•
|
a $1.0 million net increase in engineering and technical training services.
|
•
|
a $0.2 million decrease in training services for automotive customers;
|
•
|
a $0.2 million decrease in glovebox portfolio revenue; and
|
•
|
a $0.3 million decrease in magazine publications revenue.
|
•
|
a $5.6 million revenue increase attributable to the Maverick acquisition completed on October 1, 2016;
|
•
|
a $5.4 million revenue increase attributable to the McKinney Rogers acquisition completed on February 1, 2017;
|
•
|
a $1.1 million revenue increase attributable to the CLS acquisition completed on August 31, 2017;
|
•
|
a $2.5 million increase in technical training services largely due to a new contract with an aerospace client; and
|
•
|
a $1.1 million increase in platform adoption training services; partially offset by
|
•
|
a $0.9 million decrease primarily in performance consulting services; and
|
•
|
a $0.5 million decrease due to unfavorable changes in foreign currency exchange rates.
|
|
|
Years ended December 31,
|
||||||||||||
|
|
2017
|
|
2016
|
||||||||||
|
|
|
|
% Revenue
|
|
|
|
% Revenue
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
Learning Solutions
|
|
$
|
38,971
|
|
|
18.1
|
%
|
|
$
|
38,954
|
|
|
18.6
|
%
|
Professional & Technical Services
|
|
14,426
|
|
|
14.3
|
%
|
|
15,803
|
|
|
15.5
|
%
|
||
Sandy Training & Marketing
|
|
14,524
|
|
|
14.4
|
%
|
|
14,181
|
|
|
13.9
|
%
|
||
Performance Readiness Solutions
|
|
14,106
|
|
|
15.3
|
%
|
|
11,219
|
|
|
14.4
|
%
|
||
|
|
$
|
82,027
|
|
|
16.1
|
%
|
|
$
|
80,157
|
|
|
16.3
|
%
|
|
|
Years ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(Dollars in thousands)
|
||||||
Learning Solutions
|
|
$
|
208,998
|
|
|
$
|
207,039
|
|
Professional & Technical Services
|
|
101,907
|
|
|
119,092
|
|
||
Sandy Training & Marketing
|
|
101,768
|
|
|
87,567
|
|
||
Performance Readiness Solutions
|
|
77,886
|
|
|
76,582
|
|
||
|
|
$
|
490,559
|
|
|
$
|
490,280
|
|
•
|
a $7.7 million net increase in training content development and managed learning services; and
|
•
|
a $4.6 million revenue increase attributable to the Jencal Training acquisition completed on March 1, 2016; partially offset by
|
•
|
a $10.3 million decrease in revenue due to unfavorable changes in exchange rates.
|
•
|
a $7.8 million decrease in training and technical services for oil and gas clients primarily due to project completions and reductions in the volume of spend by certain existing clients;
|
•
|
a $4.2 million net decrease in training and professional services for energy clients primarily due to project completions;
|
•
|
a $2.5 million net decrease in engineering and technical training services primarily due to project completions and reductions in the volume of spend by certain existing clients; and
|
•
|
a $2.7 million decrease in revenue due to unfavorable changes in foreign currency exchange rates.
|
•
|
a $9.6 million increase in training services for in-dealership and other training programs for automotive customers;
|
•
|
a $5.9 million increase in training services for an automotive client related to a luxury vehicle launch; and
|
•
|
a $0.7 million increase in glovebox portfolio revenue, partially offset by
|
•
|
a $2.0 million decrease in magazine publications revenue due to a reduction in the volume of publications shipped.
|
•
|
a $2.0 million revenue increase attributable to the Maverick acquisition completed on October 1, 2016; and
|
•
|
a $1.9 million increase in technical training services largely due to a new contract with an aerospace client; partially offset by
|
•
|
a $1.1 million decrease in platform adoption training services;
|
•
|
a $0.5 million decrease primarily in leadership development services; and
|
•
|
a $1.0 million decrease due to unfavorable changes in foreign currency exchange rates.
|
|
|
Years ended December 31,
|
||||||||||||
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
% Revenue
|
|
|
|
% Revenue
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||
Learning Solutions
|
|
$
|
38,954
|
|
|
18.6
|
%
|
|
$
|
36,223
|
|
|
17.5
|
%
|
Professional & Technical Services
|
|
15,803
|
|
|
15.5
|
%
|
|
23,621
|
|
|
19.8
|
%
|
||
Sandy Training & Marketing
|
|
14,181
|
|
|
13.9
|
%
|
|
11,321
|
|
|
12.9
|
%
|
||
Performance Readiness Solutions
|
|
11,219
|
|
|
14.4
|
%
|
|
10,827
|
|
|
14.1
|
%
|
||
|
|
$
|
80,157
|
|
|
16.3
|
%
|
|
$
|
81,992
|
|
|
16.7
|
%
|
Acquisition:
|
Original range of potential undiscounted payments
|
|
As of December 31, 2017 Maximum contingent consideration due in
|
|||||||||||
|
|
|
2018
|
2019
|
2020
|
Total
|
||||||||
Maverick
|
$0 - $10,000
|
|
$
|
5,902
|
|
$
|
—
|
|
$
|
—
|
|
$
|
5,902
|
|
McKinney Rogers
|
$0 - $18,000
|
|
4,000
|
|
4,000
|
|
4,000
|
|
12,000
|
|
||||
Emantras
|
|
|
*
|
|
—
|
|
—
|
|
—
|
|
||||
CLS
|
$0 - $2,228
|
|
2,228
|
|
—
|
|
—
|
|
2,228
|
|
||||
|
|
|
$
|
12,130
|
|
$
|
4,000
|
|
$
|
4,000
|
|
$
|
20,130
|
|
|
|
|
|
|
|
|
||||||||
* There is no maximum contingent consideration payable to the seller.
|
|
||||||||||||||||||||
|
|
Payments due in
|
||||||||||||||||||
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After
2023
|
|
Total
|
||||||||||
Long-term debt, including current portion
|
|
$
|
12,000
|
|
|
$
|
16,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,000
|
|
Interest on long-term debt (1)
|
|
792
|
|
|
332
|
|
|
—
|
|
|
—
|
|
|
1,124
|
|
|||||
Facility lease commitments
|
|
8,659
|
|
|
12,667
|
|
|
6,962
|
|
|
6,942
|
|
|
35,230
|
|
|||||
Other operating lease commitments
|
|
994
|
|
|
573
|
|
|
28
|
|
|
—
|
|
|
1,595
|
|
|||||
Purchase commitments (2)
|
|
6,541
|
|
|
5,917
|
|
|
3,759
|
|
|
—
|
|
|
16,217
|
|
|||||
Total
|
|
$
|
28,986
|
|
|
$
|
35,489
|
|
|
$
|
10,749
|
|
|
$
|
6,942
|
|
|
$
|
82,166
|
|
(1)
|
Interest on long-term debt is calculated using the weighted-average interest rate in effect as of December 31, 2017 for all future periods. Interest incurred on borrowings under our revolving credit facility vary based on relative borrowing levels and variable interest rates. As such, we are unable to quantify our future obligations relating to interest on the credit facility.
|
(2)
|
Excludes purchase orders for goods and services entered into by us in the ordinary course of business, which are non-binding and subject to amendment or termination within a reasonable notification period.
|
Reporting Unit
|
|
|
|
Learning Solutions
|
$
|
58,869
|
|
Professional & Technical Services
|
43,043
|
|
|
Sandy Training & Marketing
|
653
|
|
|
Performance Readiness Solutions
|
42,270
|
|
|
|
$
|
144,835
|
|
|
Page
|
|
|
Financial Statements of GP Strategies Corporation and Subsidiaries:
|
|
|
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Balance Sheets – December 31, 2017 and 2016
|
|
|
|
Consolidated Statements of Operations – Years ended December 31, 2017, 2016 and 2015
|
|
|
|
Consolidated Statements of Comprehensive Income – Years ended December 31, 2017, 2016 and 2015
|
|
|
|
Consolidated Statements of Stockholders’ Equity – Years ended December 31, 2017, 2016 and 2015
|
|
|
|
Consolidated Statements of Cash Flows – Years ended December 31, 2017, 2016 and 2015
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash
|
|
$
|
23,612
|
|
|
$
|
16,346
|
|
Accounts and other receivables, less allowance for doubtful accounts of $2,492 in
2017 and $1,091 in 2016
|
|
119,335
|
|
|
105,549
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
42,958
|
|
|
39,318
|
|
||
Prepaid expenses and other current assets
|
|
14,212
|
|
|
11,481
|
|
||
Total current assets
|
|
200,117
|
|
|
172,694
|
|
||
Property, plant and equipment, net
|
|
5,123
|
|
|
4,547
|
|
||
Goodwill
|
|
144,835
|
|
|
127,772
|
|
||
Intangible assets, net
|
|
8,363
|
|
|
5,825
|
|
||
Deferred tax assets
|
|
1,135
|
|
|
1,058
|
|
||
Other assets, net
|
|
5,434
|
|
|
3,705
|
|
||
|
|
$
|
365,007
|
|
|
$
|
315,601
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
||
Short-term borrowings
|
|
$
|
37,696
|
|
|
$
|
17,694
|
|
Current portion of long-term debt
|
|
12,000
|
|
|
12,000
|
|
||
Accounts payable and accrued expenses
|
|
78,280
|
|
|
64,596
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
22,356
|
|
|
18,545
|
|
||
Total current liabilities
|
|
150,332
|
|
|
112,835
|
|
||
Long-term debt
|
|
16,000
|
|
|
28,000
|
|
||
Deferred tax liabilities
|
|
3,186
|
|
|
3,124
|
|
||
Other noncurrent liabilities
|
|
7,435
|
|
|
4,146
|
|
||
Total liabilities
|
|
176,953
|
|
|
148,105
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
|
||
Preferred stock, par value $0.01 per share;
|
|
|
|
|
|
|
||
Authorized 10,000,000 shares; no shares issued
|
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share; Authorized 35,000,000 shares;
issued 17,222,781 shares in 2017 and 2016
|
|
172
|
|
|
172
|
|
||
Additional paid-in capital
|
|
107,256
|
|
|
106,569
|
|
||
Retained earnings
|
|
106,599
|
|
|
93,845
|
|
||
Treasury stock, at cost (474,855 shares in 2017 and 482,194 shares in 2016)
|
|
(11,118
|
)
|
|
(11,628
|
)
|
||
Accumulated other comprehensive loss
|
|
(14,855
|
)
|
|
(21,462
|
)
|
||
Total stockholders’ equity
|
|
188,054
|
|
|
167,496
|
|
||
|
|
$
|
365,007
|
|
|
$
|
315,601
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
509,208
|
|
|
$
|
490,559
|
|
|
$
|
490,280
|
|
Cost of revenue
|
|
427,181
|
|
|
410,402
|
|
|
408,288
|
|
|||
Gross profit
|
|
82,027
|
|
|
80,157
|
|
|
81,992
|
|
|||
Selling, general and administrative expenses
|
|
57,419
|
|
|
48,597
|
|
|
47,748
|
|
|||
Restructuring charges
|
|
3,317
|
|
|
—
|
|
|
1,551
|
|
|||
Gain (loss) on change in fair value of contingent consideration, net
|
|
1,620
|
|
|
(136
|
)
|
|
(371
|
)
|
|||
Operating income
|
|
22,911
|
|
|
31,424
|
|
|
32,322
|
|
|||
Interest expense
|
|
3,132
|
|
|
1,568
|
|
|
1,381
|
|
|||
Other (expense) income (including interest income of $43 in 2017, $94 in 2016 and $149 in 2015)
|
|
(90
|
)
|
|
178
|
|
|
(1,318
|
)
|
|||
Income before income taxes
|
|
19,689
|
|
|
30,034
|
|
|
29,623
|
|
|||
Income tax expense
|
|
6,798
|
|
|
9,787
|
|
|
10,834
|
|
|||
Net income
|
|
$
|
12,891
|
|
|
$
|
20,247
|
|
|
$
|
18,789
|
|
|
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
|
16,748
|
|
|
16,696
|
|
|
17,110
|
|
|||
Diluted weighted average shares outstanding
|
|
16,873
|
|
|
16,791
|
|
|
17,264
|
|
|||
|
|
|
|
|
|
|
||||||
Per common share data:
|
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share
|
|
$
|
0.77
|
|
|
$
|
1.21
|
|
|
$
|
1.10
|
|
Diluted earnings per share
|
|
$
|
0.76
|
|
|
$
|
1.21
|
|
|
$
|
1.09
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
12,891
|
|
|
$
|
20,247
|
|
|
$
|
18,789
|
|
Foreign currency translation adjustments
|
|
6,686
|
|
|
(8,661
|
)
|
|
(5,404
|
)
|
|||
Change in fair value of interest rate cap, net of tax
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of interest rate swap, net of tax
|
|
63
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income
|
|
$
|
19,498
|
|
|
$
|
11,586
|
|
|
$
|
13,385
|
|
|
|
Common
stock
($0.01 par)
|
|
Additional
paid-in capital
|
|
Retained
earnings
|
|
Treasury
stock at cost
|
|
Accumulated
other
comprehensive
loss
|
|
Total
stockholders’
equity
|
||||||||||||
Balance at December 31, 2014
|
|
$
|
171
|
|
|
$
|
104,523
|
|
|
$
|
54,809
|
|
|
$
|
(381
|
)
|
|
$
|
(7,397
|
)
|
|
$
|
151,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
18,789
|
|
|
—
|
|
|
—
|
|
|
18,789
|
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,404
|
)
|
|
(5,404
|
)
|
||||||
Repurchases of common stock in the open market
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,347
|
)
|
|
—
|
|
|
(12,347
|
)
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
3,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,050
|
|
||||||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
835
|
|
||||||
Shares withheld in exchange for tax withholding payments on stock-based compensation
|
|
—
|
|
|
(1,451
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,451
|
)
|
||||||
Issuance of stock for employer contributions to retirement plan
|
|
1
|
|
|
681
|
|
|
—
|
|
|
2,029
|
|
|
—
|
|
|
2,711
|
|
||||||
Net issuances of stock pursuant to stock compensation plans and other
|
|
—
|
|
|
(1,766
|
)
|
|
—
|
|
|
2,202
|
|
|
—
|
|
|
436
|
|
||||||
Balance at December 31, 2015
|
|
$
|
172
|
|
|
$
|
105,872
|
|
|
$
|
73,598
|
|
|
$
|
(8,497
|
)
|
|
$
|
(12,801
|
)
|
|
$
|
158,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
20,247
|
|
|
—
|
|
|
—
|
|
|
20,247
|
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,661
|
)
|
|
(8,661
|
)
|
||||||
Repurchases of common stock in the open market
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,959
|
)
|
|
—
|
|
|
(7,959
|
)
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
3,229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,229
|
|
||||||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
137
|
|
||||||
Shares withheld in exchange for tax withholding payments on stock-based compensation
|
|
—
|
|
|
(771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(771
|
)
|
||||||
Issuance of stock for employer contributions to retirement plan
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
2,742
|
|
|
—
|
|
|
2,708
|
|
||||||
Net issuances of stock pursuant to stock compensation plans and other
|
|
—
|
|
|
(1,864
|
)
|
|
—
|
|
|
2,086
|
|
|
—
|
|
|
222
|
|
||||||
Balance at December 31, 2016
|
|
$
|
172
|
|
|
$
|
106,569
|
|
|
$
|
93,845
|
|
|
$
|
(11,628
|
)
|
|
$
|
(21,462
|
)
|
|
$
|
167,496
|
|
Cumulative effect adjustment of adopting ASU 2016-09
|
|
—
|
|
|
234
|
|
|
(137
|
)
|
|
—
|
|
|
—
|
|
|
97
|
|
||||||
Adjusted balance at December 31, 2016
|
|
172
|
|
|
106,803
|
|
|
93,708
|
|
|
(11,628
|
)
|
|
(21,462
|
)
|
|
167,593
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
12,891
|
|
|
—
|
|
|
—
|
|
|
12,891
|
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,686
|
|
|
6,686
|
|
||||||
Change in fair value of interest rate cap, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
(142
|
)
|
||||||
Change in fair value of interest rate swap, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
63
|
|
||||||
Repurchases of common stock in the open market
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,302
|
)
|
|
—
|
|
|
(4,302
|
)
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
3,589
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,589
|
|
||||||
Shares withheld in exchange for tax withholding payments on stock-based compensation
|
|
—
|
|
|
(1,168
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,168
|
)
|
||||||
Issuance of stock for employer contributions to retirement plan
|
|
—
|
|
|
40
|
|
|
—
|
|
|
2,685
|
|
|
—
|
|
|
2,725
|
|
||||||
Net issuances of stock pursuant to stock compensation plans and other
|
|
—
|
|
|
(2,008
|
)
|
|
—
|
|
|
2,127
|
|
|
—
|
|
|
119
|
|
||||||
Balance at December 31, 2017
|
|
$
|
172
|
|
|
$
|
107,256
|
|
|
$
|
106,599
|
|
|
$
|
(11,118
|
)
|
|
$
|
(14,855
|
)
|
|
$
|
188,054
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
|
12,891
|
|
|
$
|
20,247
|
|
|
$
|
18,789
|
|
|
Adjustments to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|||
(Gain) loss on change in fair value of contingent consideration, net
|
|
(1,620
|
)
|
|
136
|
|
|
371
|
|
|||
Depreciation and amortization
|
|
6,974
|
|
|
6,462
|
|
|
7,865
|
|
|||
Non-cash compensation expense
|
|
6,314
|
|
|
6,015
|
|
|
6,059
|
|
|||
Deferred income taxes
|
|
(313
|
)
|
|
(1,761
|
)
|
|
(1,096
|
)
|
|||
Changes in other operating items, net of acquired amounts:
|
|
|
|
|
|
|
|
|
|
|||
Accounts and other receivables
|
|
(10,977
|
)
|
|
(17,965
|
)
|
|
6,497
|
|
|||
Costs and estimated earnings in excess of billings on uncompleted
contracts
|
|
(1,893
|
)
|
|
4,234
|
|
|
(16,942
|
)
|
|||
Prepaid expenses and other current assets
|
|
(2,297
|
)
|
|
(2,490
|
)
|
|
5,111
|
|
|||
Accounts payable and accrued expenses
|
|
15,392
|
|
|
3,732
|
|
|
3,856
|
|
|||
Billings in excess of costs and estimated earnings on uncompleted
contracts
|
|
2,520
|
|
|
383
|
|
|
(4,663
|
)
|
|||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
(137
|
)
|
|
(835
|
)
|
|||
Contingent consideration payments in excess of fair value on
acquisition date
|
|
(408
|
)
|
|
(539
|
)
|
|
(325
|
)
|
|||
Other
|
|
(323
|
)
|
|
(240
|
)
|
|
867
|
|
|||
Net cash provided by operating activities
|
|
26,260
|
|
|
18,077
|
|
|
25,554
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Additions to property, plant and equipment
|
|
(2,734
|
)
|
|
(1,402
|
)
|
|
(2,357
|
)
|
|||
Acquisitions, net of cash acquired
|
|
(11,111
|
)
|
|
(6,801
|
)
|
|
—
|
|
|||
Investment in joint venture
|
|
—
|
|
|
(1,600
|
)
|
|
—
|
|
|||
Capitalized software development costs
|
|
(1,313
|
)
|
|
(933
|
)
|
|
—
|
|
|||
Other investing activities
|
|
(295
|
)
|
|
14
|
|
|
186
|
|
|||
Net cash used in investing activities
|
|
(15,453
|
)
|
|
(10,722
|
)
|
|
(2,171
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from (repayment of) short-term borrowings
|
|
19,864
|
|
|
(16,127
|
)
|
|
13,285
|
|
|||
Proceeds from long-term debt
|
|
—
|
|
|
40,000
|
|
|
—
|
|
|||
Repayment of long-term debt
|
|
(12,000
|
)
|
|
(24,444
|
)
|
|
(13,333
|
)
|
|||
Contingent consideration payments
|
|
(4,657
|
)
|
|
(2,244
|
)
|
|
(2,284
|
)
|
|||
Change in negative cash book balance
|
|
(2,138
|
)
|
|
1,366
|
|
|
(1,143
|
)
|
|||
Repurchases of common stock
|
|
(3,773
|
)
|
|
(8,747
|
)
|
|
(11,559
|
)
|
|||
Income tax benefit from stock-based compensation
|
|
—
|
|
|
137
|
|
|
835
|
|
|||
Tax withholding payments for employee stock-based compensation in
exchange for shares surrendered
|
|
(1,168
|
)
|
|
(771
|
)
|
|
(1,451
|
)
|
|||
Premium paid on interest rate cap
|
|
(474
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities
|
|
120
|
|
|
48
|
|
|
138
|
|
|||
Net cash used in financing activities
|
|
(4,226
|
)
|
|
(10,782
|
)
|
|
(15,512
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
|
685
|
|
|
(1,257
|
)
|
|
(1,382
|
)
|
|||
Net change in cash
|
|
7,266
|
|
|
(4,684
|
)
|
|
6,489
|
|
|||
Cash at beginning of year
|
|
16,346
|
|
|
21,030
|
|
|
14,541
|
|
|||
Cash at end of year
|
|
$
|
23,612
|
|
|
$
|
16,346
|
|
|
$
|
21,030
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|
|||
Interest
|
|
$
|
1,841
|
|
|
$
|
1,523
|
|
|
$
|
1,383
|
|
Income taxes
|
|
$
|
6,256
|
|
|
$
|
10,604
|
|
|
$
|
8,273
|
|
|
|
|
|
|
|
|
||||||
Non-cash financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Accrued share repurchases
|
|
$
|
529
|
|
|
$
|
—
|
|
|
$
|
788
|
|
Accrued contingent consideration
|
|
$
|
5,613
|
|
|
$
|
5,166
|
|
|
$
|
—
|
|
(1)
|
Description of Business and Significant Accounting Policies
|
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In thousands)
|
||||||||||
Beginning balance
|
|
$
|
1,091
|
|
|
$
|
1,856
|
|
|
$
|
1,947
|
|
Additions
|
|
1,720
|
|
|
368
|
|
|
17
|
|
|||
Deductions
|
|
(319
|
)
|
|
(1,133
|
)
|
|
(108
|
)
|
|||
Ending balance
|
|
$
|
2,492
|
|
|
$
|
1,091
|
|
|
$
|
1,856
|
|
Class of assets
|
|
Useful life
|
Buildings and improvements
|
|
5 to 40 years
|
Machinery, equipment, and furniture and fixtures
|
|
3 to 10 years
|
Leasehold improvements
|
|
Shorter of asset life or term of lease
|
|
|
Year ended December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
|
|
(In thousands)
|
|||||||
Non-dilutive instruments
|
|
13
|
|
|
45
|
|
|
15
|
|
Dilutive common stock equivalents
|
|
125
|
|
|
95
|
|
|
154
|
|
•
|
Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and
|
•
|
Level 3 – unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.
|
(2)
|
Acquisitions
|
Acquired company
|
|
YouTrain
|
|
CLS
|
|
Emantras
|
|
McKinney Rogers
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Acquisition date
|
|
8/31/2017
|
|
|
8/31/2017
|
|
|
4/1/2017
|
|
|
2/1/2017
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash purchase price
|
|
$
|
4,898
|
|
|
$
|
436
|
|
|
$
|
3,191
|
|
|
$
|
3,259
|
|
Fair value of contingent consideration
|
|
—
|
|
|
888
|
|
|
220
|
|
|
4,505
|
|
||||
Working capital adjustment
|
|
180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total purchase price
|
|
$
|
5,078
|
|
|
$
|
1,324
|
|
|
$
|
3,411
|
|
|
$
|
7,764
|
|
|
|
|
|
|
|
|
|
|
||||||||
Purchase price allocation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash
|
|
$
|
673
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable and other assets
|
|
234
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fixed assets
|
|
215
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||
Technology-related intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,704
|
|
||||
Customer-related intangible assets
|
|
1,313
|
|
|
253
|
|
|
818
|
|
|
653
|
|
||||
Marketing-related intangible assets (tradename)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121
|
|
||||
Goodwill
|
|
3,268
|
|
|
1,090
|
|
|
3,156
|
|
|
5,196
|
|
||||
Total assets
|
|
5,703
|
|
|
1,343
|
|
|
4,024
|
|
|
8,674
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued expenses
|
|
348
|
|
|
19
|
|
|
558
|
|
|
44
|
|
||||
Billings in excess of costs and estimated
earnings on uncompleted contracts |
|
28
|
|
|
—
|
|
|
55
|
|
|
866
|
|
||||
Deferred tax liability
|
|
249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
|
625
|
|
|
19
|
|
|
613
|
|
|
910
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net assets acquired
|
|
$
|
5,078
|
|
|
$
|
1,324
|
|
|
$
|
3,411
|
|
|
$
|
7,764
|
|
Cash purchase price
|
|
$
|
4,639
|
|
|
|
Fair value of contingent consideration
|
|
5,166
|
|
|
|
|
Total purchase price
|
|
$
|
9,805
|
|
|
|
|
|
|
|
Amortization
|
||
Purchase price allocation:
|
|
|
|
|
Period
|
|
Fixed assets
|
|
$
|
63
|
|
|
|
Customer-related intangible assets
|
|
1,219
|
|
|
4 years
|
|
Marketing-related intangible assets (tradename)
|
|
124
|
|
|
2 years
|
|
Technology-related intangible assets
|
|
649
|
|
|
3 years
|
|
Goodwill
|
|
8,111
|
|
|
|
|
Total assets
|
|
10,166
|
|
|
|
|
|
|
|
|
|
||
Accrued expenses
|
|
38
|
|
|
|
|
Billings in excess of costs and estimated
earnings on uncompleted contracts |
|
323
|
|
|
|
|
Total liabilities
|
|
361
|
|
|
|
|
|
|
|
|
|
||
Net assets acquired
|
|
$
|
9,805
|
|
|
|
|
|
Liability as of
|
|
2017
Additions
|
|
Change in
Fair Value of
Contingent
|
|
Foreign
Currency
|
|
2017
Payments |
|
Liability as of
|
|||||||||||
Acquisition:
|
|
Dec. 31, 2016
|
|
|
Consideration
|
|
Translation
|
|
|
Dec. 31, 2017
|
|||||||||||||
Maverick
|
|
$
|
5,258
|
|
|
—
|
|
|
819
|
|
|
—
|
|
|
(4,098
|
)
|
|
$
|
1,979
|
|
|||
McKinney Rogers
|
|
—
|
|
|
4,505
|
|
|
(2,037
|
)
|
|
—
|
|
|
(967
|
)
|
|
1,501
|
|
|||||
Emantras
|
|
—
|
|
|
220
|
|
|
(144
|
)
|
|
—
|
|
|
—
|
|
|
76
|
|
|||||
CLS
|
|
—
|
|
|
888
|
|
|
(258
|
)
|
|
39
|
|
|
—
|
|
|
669
|
|
|||||
|
|
$
|
5,258
|
|
|
$
|
5,613
|
|
|
$
|
(1,620
|
)
|
|
$
|
39
|
|
|
(5,065
|
)
|
|
$
|
4,225
|
|
(3)
|
Goodwill & Other Intangible Assets
|
|
|
|
|
Professional
|
|
Sandy
|
|
Performance
|
|
|
||||||||||
|
|
Learning
|
|
& Technical
|
|
Training &
|
|
Readiness
|
|
|
||||||||||
|
|
Solutions
|
|
Services
|
|
Marketing
|
|
Solutions
|
|
Total
|
||||||||||
Net book value at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
January 1, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
$
|
51,901
|
|
|
$
|
51,532
|
|
|
$
|
6,161
|
|
|
$
|
27,798
|
|
|
$
|
137,392
|
|
Accumulated impairment losses
|
|
(2,079
|
)
|
|
(7,830
|
)
|
|
(5,508
|
)
|
|
—
|
|
|
(15,417
|
)
|
|||||
Total
|
|
49,822
|
|
|
43,702
|
|
|
653
|
|
|
27,798
|
|
|
121,975
|
|
|||||
2016 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation
|
|
(2,571
|
)
|
|
(1,338
|
)
|
|
—
|
|
|
(233
|
)
|
|
(4,142
|
)
|
|||||
Net book value at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
51,158
|
|
|
50,194
|
|
|
6,161
|
|
|
35,676
|
|
|
143,189
|
|
|||||
Accumulated impairment losses
|
|
(2,079
|
)
|
|
(7,830
|
)
|
|
(5,508
|
)
|
|
—
|
|
|
(15,417
|
)
|
|||||
Total
|
|
49,079
|
|
|
42,364
|
|
|
653
|
|
|
35,676
|
|
|
127,772
|
|
|||||
2017 Activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Acquisitions
|
|
6,424
|
|
|
—
|
|
|
—
|
|
|
6,286
|
|
|
12,710
|
|
|||||
Foreign currency translation
|
|
3,366
|
|
|
679
|
|
|
—
|
|
|
308
|
|
|
4,353
|
|
|||||
Net book value at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
60,948
|
|
|
50,873
|
|
|
6,161
|
|
|
42,270
|
|
|
160,252
|
|
|||||
Accumulated impairment losses
|
|
(2,079
|
)
|
|
(7,830
|
)
|
|
(5,508
|
)
|
|
—
|
|
|
(15,417
|
)
|
|||||
Total
|
|
$
|
58,869
|
|
|
$
|
43,043
|
|
|
$
|
653
|
|
|
$
|
42,270
|
|
|
$
|
144,835
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
|
|
Gross Carrying
|
|
Accumulated
|
|
Net Carrying
|
||||||
|
|
Amount
|
|
Amortization
|
|
Amount
|
||||||
Customer relationships
|
|
$
|
16,330
|
|
|
$
|
(11,140
|
)
|
|
$
|
5,190
|
|
Intellectual property and other
|
|
4,298
|
|
|
(1,125
|
)
|
|
3,173
|
|
|||
|
|
$
|
20,628
|
|
|
$
|
(12,265
|
)
|
|
$
|
8,363
|
|
|
|
|
|
|
|
|
||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
14,595
|
|
|
$
|
(9,855
|
)
|
|
$
|
4,740
|
|
Intellectual property and other
|
|
2,311
|
|
|
(1,226
|
)
|
|
1,085
|
|
|||
|
|
$
|
16,906
|
|
|
$
|
(11,081
|
)
|
|
$
|
5,825
|
|
(4)
|
Property, Plant and Equipment
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Machinery, equipment and vehicles
|
|
$
|
16,078
|
|
|
$
|
14,810
|
|
Furniture and fixtures
|
|
3,090
|
|
|
3,118
|
|
||
Leasehold improvements
|
|
1,967
|
|
|
1,823
|
|
||
Buildings
|
|
331
|
|
|
302
|
|
||
|
|
21,466
|
|
|
20,053
|
|
||
Accumulated depreciation and amortization
|
|
(16,343
|
)
|
|
(15,506
|
)
|
||
|
|
$
|
5,123
|
|
|
$
|
4,547
|
|
(5)
|
Debt
|
(6)
|
Accounts Payable and Accrued Expenses
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Trade accounts payable
|
|
$
|
24,189
|
|
|
$
|
14,534
|
|
Accrued salaries, vacation and benefits
|
|
22,205
|
|
|
18,049
|
|
||
Other accrued expenses
|
|
26,256
|
|
|
23,379
|
|
||
Accrued contingent consideration
|
|
2,724
|
|
|
3,590
|
|
||
Negative cash book balance
|
|
2,906
|
|
|
5,044
|
|
||
|
|
$
|
78,280
|
|
|
$
|
64,596
|
|
(7)
|
Employee Benefit Plan
|
(8)
|
Income Taxes
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes:
|
|
|
|
|
|
|
|
|
|
|||
Domestic
|
|
$
|
2,901
|
|
|
$
|
13,988
|
|
|
$
|
18,656
|
|
Foreign
|
|
16,788
|
|
|
16,046
|
|
|
10,967
|
|
|||
Total income before income taxes
|
|
$
|
19,689
|
|
|
$
|
30,034
|
|
|
$
|
29,623
|
|
|
|
|
|
|
|
|
||||||
Income tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
|||
Current:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
3,210
|
|
|
$
|
5,511
|
|
|
$
|
6,802
|
|
State and local
|
|
256
|
|
|
1,152
|
|
|
1,418
|
|
|||
Foreign
|
|
3,645
|
|
|
4,885
|
|
|
3,710
|
|
|||
Total current
|
|
7,111
|
|
|
11,548
|
|
|
11,930
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
(241
|
)
|
|
(1,039
|
)
|
|
(198
|
)
|
|||
State and local
|
|
(176
|
)
|
|
56
|
|
|
23
|
|
|||
Foreign
|
|
104
|
|
|
(778
|
)
|
|
(921
|
)
|
|||
Total deferred
|
|
(313
|
)
|
|
(1,761
|
)
|
|
(1,096
|
)
|
|||
Total income tax expense
|
|
$
|
6,798
|
|
|
$
|
9,787
|
|
|
$
|
10,834
|
|
|
|
December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Federal income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local taxes net of federal benefit
|
|
0.2
|
|
|
2.4
|
|
|
3.2
|
|
Domestic production deduction
|
|
(1.1
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
Foreign tax rate differential
|
|
(8.8
|
)
|
|
(5.8
|
)
|
|
(4.3
|
)
|
Permanent differences
|
|
(6.2
|
)
|
|
4.8
|
|
|
2.1
|
|
Other
|
|
(0.9
|
)
|
|
(3.2
|
)
|
|
1.2
|
|
Tax Cuts and Jobs Act of 2017
|
|
16.3
|
|
|
—
|
|
|
—
|
|
Effective tax rate
|
|
34.5
|
%
|
|
32.6
|
%
|
|
36.6
|
%
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
|
$
|
559
|
|
|
$
|
357
|
|
Accrued liabilities and other
|
|
2,173
|
|
|
3,156
|
|
||
Stock-based compensation expense
|
|
599
|
|
|
910
|
|
||
Net federal, state and foreign operating loss carryforwards
|
|
1,432
|
|
|
1,292
|
|
||
Foreign tax credit carryforwards
|
|
—
|
|
|
1,207
|
|
||
Deferred tax assets
|
|
4,763
|
|
|
6,922
|
|
||
Valuation allowance on deferred tax assets
|
|
(1,502
|
)
|
|
(1,320
|
)
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Intangible assets, property and equipment, principally
due to difference in depreciation and amortization
|
|
5,312
|
|
|
7,668
|
|
||
Net deferred tax liabilities
|
|
$
|
(2,051
|
)
|
|
$
|
(2,066
|
)
|
(10)
|
Stock-Based Compensation
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of revenue
|
|
$
|
2,832
|
|
|
$
|
2,545
|
|
|
$
|
2,366
|
|
Selling, general and administrative expenses
|
|
757
|
|
|
684
|
|
|
684
|
|
|||
Total stock-based compensation expense
|
|
$
|
3,589
|
|
|
$
|
3,229
|
|
|
$
|
3,050
|
|
Stock Options
|
|
Number of
options
|
|
Weighted
average
exercise price
|
|
Weighted
average
remaining
contractual
term
|
|
Aggregate
intrinsic
value
|
|||||
Outstanding at December 31, 2016
|
|
67,550
|
|
|
$
|
15.34
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(64,050
|
)
|
|
15.12
|
|
|
|
|
|
|||
Forfeited
|
|
(100
|
)
|
|
19.38
|
|
|
|
|
|
|||
Expired
|
|
(400
|
)
|
|
19.38
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
|
3,000
|
|
|
$
|
19.38
|
|
|
0.77
|
|
$
|
12,000
|
|
Exercisable at December 31, 2017
|
|
3,000
|
|
|
$
|
19.38
|
|
|
0.77
|
|
$
|
12,000
|
|
|
|
Year ended
December 31,
2017
|
|
Weighted
average
grant date
fair value
|
|||
|
|
(In shares)
|
|
(In dollars)
|
|||
Outstanding and unvested, beginning of period
|
|
207,016
|
|
|
$
|
29.85
|
|
Granted
|
|
55,350
|
|
|
24.62
|
|
|
Vested
|
|
(105,915
|
)
|
|
28.15
|
|
|
Forfeited
|
|
(8,217
|
)
|
|
24.84
|
|
|
Outstanding and unvested, end of period
|
|
148,234
|
|
|
$
|
29.39
|
|
|
|
Year ended
December 31,
2017
|
|
Weighted
average
grant date
fair value
|
|||
|
|
(In shares)
|
|
(In dollars)
|
|||
Outstanding and unvested, beginning of period
|
|
124,394
|
|
|
$
|
31.08
|
|
Granted
|
|
104,590
|
|
|
23.65
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(39,916
|
)
|
|
27.74
|
|
|
Outstanding and unvested, end of period
|
|
189,068
|
|
|
$
|
27.68
|
|
(11)
|
Common Stock
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||
Learning Solutions
|
|
$
|
214,820
|
|
|
$
|
208,998
|
|
|
$
|
207,039
|
|
Professional & Technical Services
|
|
101,051
|
|
|
101,907
|
|
|
119,092
|
|
|||
Sandy Training & Marketing
|
|
101,104
|
|
|
101,768
|
|
|
87,567
|
|
|||
Performance Readiness Solutions
|
|
92,233
|
|
|
77,886
|
|
|
76,582
|
|
|||
|
|
$
|
509,208
|
|
|
$
|
490,559
|
|
|
$
|
490,280
|
|
Gross Profit:
|
|
|
|
|
|
|
|
|
|
|||
Learning Solutions
|
|
$
|
38,971
|
|
|
$
|
38,954
|
|
|
$
|
36,223
|
|
Professional & Technical Services
|
|
14,426
|
|
|
15,803
|
|
|
23,621
|
|
|||
Sandy Training & Marketing
|
|
14,524
|
|
|
14,181
|
|
|
11,321
|
|
|||
Performance Readiness Solutions
|
|
14,106
|
|
|
11,219
|
|
|
10,827
|
|
|||
Total gross profit
|
|
82,027
|
|
|
80,157
|
|
|
81,992
|
|
|||
Selling, general and administrative expenses
|
|
57,419
|
|
|
48,597
|
|
|
47,748
|
|
|||
Restructuring charges
|
|
3,317
|
|
|
—
|
|
|
1,551
|
|
|||
Gain (loss) on change in fair value of contingent consideration, net
|
|
1,620
|
|
|
(136
|
)
|
|
(371
|
)
|
|||
Operating income
|
|
22,911
|
|
|
31,424
|
|
|
32,322
|
|
|||
Interest expense
|
|
3,132
|
|
|
1,568
|
|
|
1,381
|
|
|||
Other (expense) income
|
|
(90
|
)
|
|
178
|
|
|
(1,318
|
)
|
|||
Income before income tax expense
|
|
$
|
19,689
|
|
|
$
|
30,034
|
|
|
$
|
29,623
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Identifiable assets:
|
|
|
|
|
|
|
||
Learning Solutions
|
|
$
|
170,093
|
|
|
$
|
147,595
|
|
Professional & Technical Services
|
|
87,014
|
|
|
80,033
|
|
||
Sandy Training & Marketing
|
|
29,957
|
|
|
25,804
|
|
||
Performance Readiness Solutions
|
|
77,943
|
|
|
62,169
|
|
||
Total assets
|
|
$
|
365,007
|
|
|
$
|
315,601
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Additions to property, plant and equipment:
|
|
|
|
|
|
|
|
|
|
|||
Learning Solutions
|
|
$
|
1,174
|
|
|
$
|
548
|
|
|
$
|
768
|
|
Professional & Technical Services
|
|
480
|
|
|
146
|
|
|
269
|
|
|||
Sandy Training & Marketing
|
|
70
|
|
|
13
|
|
|
77
|
|
|||
Performance Readiness Solutions
|
|
73
|
|
|
39
|
|
|
496
|
|
|||
Corporate and other
|
|
937
|
|
|
656
|
|
|
747
|
|
|||
|
|
$
|
2,734
|
|
|
$
|
1,402
|
|
|
$
|
2,357
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|||
Learning Solutions
|
|
$
|
2,225
|
|
|
$
|
2,403
|
|
|
$
|
3,189
|
|
Professional & Technical Services
|
|
749
|
|
|
797
|
|
|
1,152
|
|
|||
Sandy Training & Marketing
|
|
439
|
|
|
429
|
|
|
465
|
|
|||
Performance Readiness Solutions
|
|
2,023
|
|
|
1,530
|
|
|
1,446
|
|
|||
Corporate and other
|
|
1,538
|
|
|
1,303
|
|
|
1,613
|
|
|||
|
|
$
|
6,974
|
|
|
$
|
6,462
|
|
|
$
|
7,865
|
|
(13)
|
Fair Value Measurements
|
•
|
Level 1 – unadjusted quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2 – quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and
|
•
|
Level 3 – unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.
|
|
|
|
|
|
|
Fair Value
|
|
||||||
|
|
|
|
Fair Value
|
|
December 31,
|
|
||||||
Description of Financial Instrument
|
|
Financial Statement Classification
|
|
Hierarchy
|
|
2017
|
|
2016
|
|
||||
Contingent consideration
|
|
Accounts payable and accrued expenses
|
|
Level 3
|
|
$
|
2,724
|
|
|
$
|
3,590
|
|
|
Contingent consideration
|
|
Other noncurrent liabilities
|
|
Level 3
|
|
1,502
|
|
|
1,669
|
|
|
||
Interest rate swap agreement
|
|
Other assets
|
|
Level 2
|
|
88
|
|
|
—
|
|
|
||
Interest rate cap agreement
|
|
Other assets
|
|
Level 2
|
|
285
|
|
|
—
|
|
|
(14)
|
Commitments, Guarantees, and Contingencies
|
Fiscal year ending:
|
|
Real
property
|
|
Machinery and
equipment
|
|
Total
|
||||||
2018
|
|
$
|
8,659
|
|
|
$
|
994
|
|
|
$
|
9,653
|
|
2019
|
|
7,364
|
|
|
464
|
|
|
7,828
|
|
|||
2020
|
|
5,303
|
|
|
109
|
|
|
5,412
|
|
|||
2021
|
|
3,868
|
|
|
23
|
|
|
3,891
|
|
|||
2022
|
|
3,094
|
|
|
5
|
|
|
3,099
|
|
|||
Thereafter
|
|
6,942
|
|
|
—
|
|
|
6,942
|
|
|||
Total
|
|
$
|
35,230
|
|
|
$
|
1,595
|
|
|
$
|
36,825
|
|
(15)
|
Quarterly Information (unaudited)
|
(In thousands)
|
|
Three months ended
|
|
Year ended
|
||||||||||||||||
2017
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
December 31
|
||||||||||
Revenue
|
|
$
|
122,447
|
|
|
$
|
131,161
|
|
|
$
|
124,097
|
|
|
$
|
131,503
|
|
|
509,208
|
|
|
Gross profit
|
|
19,388
|
|
|
22,435
|
|
|
18,646
|
|
|
21,558
|
|
|
82,027
|
|
|||||
Net income
|
|
4,086
|
|
|
5,863
|
|
|
3,281
|
|
(a)
|
(339
|
)
|
(a)
|
12,891
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
0.24
|
|
|
$
|
0.35
|
|
|
$
|
0.20
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.77
|
|
Diluted
|
|
$
|
0.24
|
|
|
$
|
0.35
|
|
|
$
|
0.19
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
|
$
|
115,756
|
|
|
$
|
125,542
|
|
|
$
|
121,978
|
|
|
$
|
127,283
|
|
|
$
|
490,559
|
|
Gross profit
|
|
17,927
|
|
|
20,344
|
|
|
20,004
|
|
|
21,882
|
|
|
80,157
|
|
|||||
Net income
|
|
3,800
|
|
|
4,913
|
|
|
4,802
|
|
|
6,732
|
|
|
20,247
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
0.23
|
|
|
$
|
0.29
|
|
|
$
|
0.29
|
|
|
$
|
0.40
|
|
|
$
|
1.21
|
|
Diluted
|
|
$
|
0.23
|
|
|
$
|
0.29
|
|
|
$
|
0.29
|
|
|
$
|
0.40
|
|
|
$
|
1.21
|
|
Plan category:
|
|
|
|
Equity compensation plans not approved by security holders:
|
|
|
|
(a)
Number of securities to be issued upon exercise of outstanding options
|
—
|
|
|
(b)
Weighted average exercise price of outstanding options
|
$
|
—
|
|
(c)
Number of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in row (a))
|
—
|
|
|
Equity compensation plans approved by security holders:
|
|
|
|
(a)
Number of securities to be issued upon exercise of outstanding options
|
3,000
|
|
|
(b)
Weighted average exercise price of outstanding options
|
$
|
19.38
|
|
(c)
Number of securities remaining available for future issuance under equity
compensation plans
|
605,788
|
|
3.1
|
|
3.2
|
|
10.1
|
|
10.2
|
|
10.3
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19
|
10.20
|
|
10.21
|
|
10.22
|
|
10.23
|
|
10.24
|
|
10.25
|
|
10.26
|
|
10.27
|
|
10.28
|
|
10.29
|
|
10.30
|
|
10.31
|
|
10.32
|
|
10.33
|
|
10.34
|
|
21
|
|
23
|
|
31.1
|
|
31.2
|
|
32.1
|
|
101
|
The following materials from GP Strategies Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Stockholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.*
|
|
|
GP STRATEGIES CORPORATION
|
|
|
|
Dated: March 1, 2018
|
By
|
/s/ Scott N. Greenberg
|
|
|
Scott N. Greenberg
|
|
|
Chief Executive Officer
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Scott N. Greenberg
|
|
|
|
|
Scott N. Greenberg
|
|
Chief Executive Officer (Principal
Executive Officer and Director)
|
|
March 1, 2018
|
|
|
|
|
|
/s/ Michael R. Dugan
|
|
|
|
|
Michael R. Dugan
|
|
Senior Vice President and Chief
Financial Officer (Principal Financial and
Accounting Officer)
|
|
March 1, 2018
|
|
|
|
|
|
/s/ Harvey P. Eisen
|
|
|
|
|
Harvey P. Eisen
|
|
Chairman of the Board of Directors
|
|
March 1, 2018
|
|
|
|
|
|
/s/ Marshall S. Geller
|
|
|
|
|
Marshall S. Geller
|
|
Director
|
|
March 1, 2018
|
|
|
|
|
|
/s/ Steven E. Koonin
|
|
|
|
|
Steven E. Koonin
|
|
Director
|
|
March 1, 2018
|
|
|
|
|
|
/s/ Richard C. Pfenniger, Jr.
|
|
|
|
|
Richard C. Pfenniger, Jr.
|
|
Director
|
|
March 1, 2018
|
|
|
|
|
|
/s/ Samuel D. Robinson
|
|
|
|
|
Samuel D. Robinson
|
|
Director
|
|
March 1, 2018
|
|
|
|
|
|
/s/ A. Marvin Strait
|
|
|
|
|
A. Marvin Strait
|
|
Director
|
|
March 1, 2018
|
1.
|
Separation
.
|
2.
|
Payments by the Company
. Subject to execution, delivery and effectiveness of the release attached as
Exhibit A
to this Agreement (the “
Release
”) and Employee’s continued compliance with this Agreement:
|
3.
|
Other Obligations of the Company
. Subject to execution, delivery and effectiveness of the Release and Employee’s continued compliance with this Agreement:
|
4.
|
Continuing Provisions of the Employment Agreement
. Sections 7, 8 and 20 of the Employment Agreement will continue in effect after the Termination Date.
|
5.
|
Company Property
. Before the Termination Date, Employee shall return to the Company all Company, client and vendor property in Employee’s possession. This includes, but is not limited to, any computer equipment, mobile phones, computer programs and electronic files, any storage media, security cards and keys, and any items developed by Employee and/or obtained by Employee or on Employee’s behalf, directly or indirectly, in connection with Employee’s employment with the Company. However, after removal of any Company information and software, the Company shall transfer ownership to the Employee of the laptop computer, iPhone and cellular telephone number issued to her by the Company.
|
6.
|
Non-Compete
. Through June 30, 2018, Employee shall not compete with or Participate In any other business or organization which competes with the Company with respect to any product or service sold by the Company within the 24 months preceding the Termination Date. The term “Participate In” shall mean: “directly or indirectly, for her own benefit or for, with, or through any other person, firm, or corporation, own (other than the ownership of not more than 1% of the outstanding common stock of a corporation, if, at the time of its acquisition, such stock is listed on a national securities exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter market by a member of a national securities exchange), manage, operate, control, loan money to, or participate in the ownership, management, operation, or control of, or be connected as a director, officer, employee, partner, consultant, agent, independent contractor, or otherwise with, or acquiesce in the use of her name in.”
|
7.
|
Non-Solicitation
. Through December 31, 2018, Employee shall not directly or indirectly solicit or interfere with, encourage to leave the Company, or attempt to entice away from the Company any of its suppliers, customers, or employees or directly or indirectly employ any person who, at any time within 90 days prior to such action, was an employee of the Company.
|
8.
|
Obligations Regarding Section 16 Reporting
. Employee will have all responsibility for Section 16 compliance under the Securities Exchange Act of 1934 until the expiration of her obligations thereunder. The Company will not have any responsibility or liability with respect to any failure to file (or delinquent filing of) a Form 4 or 5, any violation of Section 16(a) of the Securities Exchange Act of 1934 or any short swing profits” under Section 16(b) of that Act. Until
|
9.
|
General Release of Claims
. The Company’s obligations under Section 2 and Section 3 are conditional on Employee’s delivery of a signed copy of the Release no later than December 31, 2017.
|
10.
|
No Disparagement or Encouragement of Claims
. Employee shall not, nor will she cause anyone else to, make any statement or issue any communication that disparages, criticizes or otherwise reflects adversely on or encourages any adverse action against the Company or any other Releasee (as defined in the Release). The Company shall not, nor will it cause anyone else to, make any statement or issue any communication that disparages, criticizes or otherwise reflects adversely on or encourages any adverse action against the Employee. The parties do not intend for this section to prevent any person from testifying truthfully under oath pursuant to lawful court order or subpoena or otherwise responding to or providing disclosures required by law.
|
11.
|
CEO Recommendation
. The Company’s CEO will provide a letter of recommendation for Employee that is reasonably satisfactory to the Company and Employee. A draft of the letter will be provided for the Employee’s review on or before January 31, 2018.
|
12.
|
Remedies and Enforcement
. The Employee acknowledges that a breach on her part of the terms of Section 4, 6 or 7 of this Agreement could cause irreparable damage to the Company and that monetary damages will not provide an adequate remedy to the Company. The Company will be entitled to enforce the terms herein in court and seek any and all remedies available to it in equity and law, including, but not limited to, injunctive relief, without the posting of any bond or other security. The parties agree that the prevailing party in any action related to enforcement of such provisions will be entitled to reimbursement from the non-prevailing party for attorneys’ fees and costs incurred related to such action. It is the intent of the parties that if any of these provisions, or any part thereof, is construed to be illegal, invalid or unenforceable, the same shall not affect the remainder of such covenant or any other covenants. Employee and the Company desire and authorize a court of competent jurisdiction to modify any of these provisions to the extent necessary to make it legal, valid, and enforceable.
|
13.
|
Tax Matters
. Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all amounts that are required or authorized to be withheld, including, but not limited to, federal, state, local and foreign taxes required to be withheld by applicable laws or regulations.
|
14.
|
Miscellaneous
.
|
By:
|
/s/ Scott Greenberg
|
|
/s/ Sharon Esposito-Mayer
|
|
Scott Greenberg
|
|
Sharon Esposito-Mayer
|
|
Chief Executive Officer
|
|
|
1.
|
Employee hereby releases the Company from any and all known or unknown claims, causes of action, liability, and/or damages arising out of or relating to her employment with the Company and/or the termination of that employment, to the greatest extent permitted under applicable law. By signing this Release, Employee is waiving any such claims that she has or may have against the Company, its directors, officers, employees, agents, successors and assigns, and all other related or affiliated persons, companies or entities (“Releasees”). This includes all claims, rights, and/or obligations arising under any federal, state or local laws pertaining to employment, including but not limited to all employment discrimination laws, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Family and Medical Leave Act, the Employee Retirement Income Security Act, the National Labor Relations Act, and any and all other federal, state and local statutes, cases, authorities or laws (including common law) providing a cause of action that may be the subject of a release under applicable law, including but not limited to claims of wrongful termination, retaliation, harassment, discrimination, defamation, intentional infliction of emotional distress, breach of contract, fraud, negligence, and any other contract or tort claims.
THIS IS A GENERAL RELEASE OF CLAIMS.
Nothing in this Release shall be construed to waive any claims or rights that may not be waived as a matter of law.
|
2.
|
Employee and the Company agree that this Release shall not affect the rights and responsibilities of the United States Equal Employment Opportunity Commission (hereinafter “EEOC”) to enforce the ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Employee’s right to file a charge or participate in an investigation or proceeding conducted by the EEOC or any other Fair Employment Practices agency. Employee further agrees that she knowingly and voluntarily waives all rights or claims that arose prior to Employee’s execution of this Release, as well as any right Employee may have to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC or any other Fair Employment Practices agency. This Release does not waive any rights or claims that may arise after the date the waiver is executed. Furthermore, nothing in this Release will affect the ability of either party to enforce rights or entitlements specifically provided for under this Release.
|
3.
|
By signing this Release, Employee acknowledges and agrees that: (a) except for the payments specifically described in Section 2 of the Separation Agreement, Employee is not entitled to any other or further compensation, wages, bonuses, or payments of any kind from the Company; and (b) other than as described in Section 3 of the Separation Agreement and any rights Employee may have under COBRA, Employee has no further right to participate in any Company benefit plan. The Company confirms that nothing in this Release shall in any way change or diminish the Employee’s right to indemnification under Section 20 of her employment agreement.
|
4.
|
Employee represents that Employee (a) has suffered no injuries or occupational diseases arising out of or in connection with Employee’s employment with the Company that have not previously been reported in writing to the Company; (b) has received all leave to which she was entitled, if any, under the Family and Medical Leave Act of 1993 (“FMLA”) and any applicable state or local leave laws; (c) is not aware of any facts or circumstances constituting a violation of the FMLA, and/or the Fair Labor Standards Act or any state or local laws pertaining to the payment of wages; and (d) has not filed any claims, suits, or other actions against the Company prior to the date of Employee’s execution of this Release, and no such actions have been filed on Employee’s behalf.
|
5.
|
This Release, its contents, and all information pertaining to any employment termination discussions and the execution of this Release are to remain confidential, and Employee shall not disclose this Release or its contents to any person, other than Employee’s spouse or significant other, and/or Employee’s legal or tax advisor, unless compelled by legal process or permitted by any applicable whistleblower or similar law.
|
6.
|
Employee acknowledges that Employee (a) has been given 21 days from receipt of this Release to consider Employee’s decision to sign it and (b) understands that she has the right to consult with an attorney before signing this Release. Employee represents that she has done so to the extent that she deemed it necessary or appropriate.
|
7.
|
Employee understands that she may revoke this Release for up to and including 5 business days after she signs this Release and this Release shall not become effective until the 5
th
business day after it has been signed by Employee (the “Effective Date”). Any revocation must be in writing and delivered to Kenneth L. Crawford, General Counsel, GP Strategies Corporation, 70 Corporate Center, 11000 Broken Land Parkway, Suite 200, Columbia, Maryland 21044.
|
|
|
/s/ Sharon Esposito-Mayer
|
|
|
Sharon Esposito-Mayer
|
|
Date:
|
December 28, 2017
|
|
|
|
|
|
GP STRATEGIES CORPORATION
|
|
|
|
|
By:
|
/s/ Scott Greenberg
|
|
|
Scott Greenberg, Chief Executive Officer
|
|
Date:
|
December 21, 2017
|
Name
|
|
Jurisdiction of
Incorporation
|
GP Strategies Argentina S.R.L.
|
|
Argentina
|
GP Strategies Australia Pty Limited
|
|
Australia
|
GP Treinamento Brasil Ltda
|
|
Brazil
|
GP Canada Co.
|
|
Canada
|
GP (Shanghai) Co., Ltd. Beijing Branch
|
|
China
|
GP (Shanghai) Co., Ltd.
|
|
China
|
GP Colombia Ltda
|
|
Colombia
|
Effective People A/S
|
|
Denmark
|
GP Strategies Denmark ApS
|
|
Denmark
|
GP Strategies Egypt, LLC
|
|
Egypt
|
GP Strategies France S.A.R.L.
|
|
France
|
GP Strategies Finland Oy
|
|
Finland
|
GP Strategies Deutschland GmbH
|
|
Germany
|
GP Strategies (Hong Kong) Limited
|
|
Hong Kong
|
GP Strategies Hungary Kft
|
|
Hungary
|
GP Strategies India Pvt. Ltd.
|
|
India
|
GP Strategies Japan G.K.
|
|
Japan
|
GP Strategies Malaysia Sdn. Bhd.
|
|
Malaysia
|
General Physics Corporation Mexico, S.A. de C.V.
|
|
Mexico
|
GP Strategies Netherlands B.V.
|
|
Netherlands
|
GP Strategies Philippines, Inc.
|
|
Philippines
|
GP Strategies Poland sp. z.o.o
|
|
Poland
|
GP Strategies Singapore (Asia) Pte. Ltd.
|
|
Singapore
|
GP Strategies Korea Y.H.
|
|
South Korea
|
GP Strategies Switzerland GmbH
|
|
Switzerland
|
GP Strategies Sweden AB
|
|
Sweden
|
GP Strategies Taiwan Ltd.
|
|
Taiwan
|
GP Strategies Danışmanlık Limited Şirketi
|
|
Turkey
|
GP Strategies Middle East FZ-LLC
|
|
United Arab Emirates
|
General Physics (UK) Ltd.
|
|
United Kingdom
|
GP Strategies Holdings Ltd
|
|
United Kingdom
|
GP Strategies Limited
|
|
United Kingdom
|
GP Strategies Training Ltd.
|
|
United Kingdom
|
YouTrain Limited
|
|
United Kingdom
|
1.
|
I have reviewed this annual
report on Form
10-K of GP Strategies Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this annual
report on Form
10-K of GP Strategies Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|