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)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
¨
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
GPX
|
NYSE (New York Stock Exchange)
|
Class
|
|
Outstanding
|
|
Common Stock, par value $.01 per share
|
|
16,722,458
|
|
|
|
Page
|
|
|
|
Part I.
|
Financial Information
|
|
|
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
|
|
|
|
||
|
|
|
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||
|
|
|
|
||
|
|
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|
||
|
|
|
|
||
|
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||
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|
Item 2.
|
||
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Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Part II.
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
March 31, 2019 (Unaudited)
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash
|
$
|
8,427
|
|
|
$
|
13,417
|
|
Accounts and other receivables, less allowance for doubtful accounts of $2,073 in 2019 and $2,034 in 2018
|
101,170
|
|
|
107,673
|
|
||
Unbilled revenue
|
83,350
|
|
|
80,764
|
|
||
Prepaid expenses and other current assets
|
25,454
|
|
|
19,048
|
|
||
Total current assets
|
218,401
|
|
|
220,902
|
|
||
Property, plant and equipment
|
25,444
|
|
|
24,580
|
|
||
Accumulated depreciation
|
(19,613
|
)
|
|
(18,721
|
)
|
||
Property, plant and equipment, net
|
5,831
|
|
|
5,859
|
|
||
Operating lease right-of-use assets
|
29,273
|
|
|
—
|
|
||
Goodwill
|
177,288
|
|
|
176,124
|
|
||
Intangible assets, net
|
19,888
|
|
|
20,933
|
|
||
Other assets
|
10,784
|
|
|
10,920
|
|
||
|
$
|
461,465
|
|
|
$
|
434,738
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
92,156
|
|
|
$
|
93,254
|
|
Deferred revenue
|
18,100
|
|
|
23,704
|
|
||
Current portion of operating lease liabilities
|
9,402
|
|
|
—
|
|
||
Total current liabilities
|
119,658
|
|
|
116,958
|
|
||
Long-term debt
|
116,607
|
|
|
116,500
|
|
||
Long-term portion of operating lease liabilities
|
23,653
|
|
|
—
|
|
||
Other noncurrent liabilities
|
11,833
|
|
|
14,711
|
|
||
Total liabilities
|
271,751
|
|
|
248,169
|
|
||
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock, par value $0.01 per share
|
172
|
|
|
172
|
|
||
Additional paid-in capital
|
104,909
|
|
|
105,850
|
|
||
Retained earnings
|
116,373
|
|
|
116,039
|
|
||
Treasury stock at cost
|
(11,763
|
)
|
|
(13,802
|
)
|
||
Accumulated other comprehensive loss
|
(19,977
|
)
|
|
(21,690
|
)
|
||
Total stockholders’ equity
|
189,714
|
|
|
186,569
|
|
||
|
$
|
461,465
|
|
|
$
|
434,738
|
|
|
Three Months Ended
March 31, |
|
||||||
|
2019
|
|
2018
|
|
||||
Revenue
|
$
|
139,473
|
|
|
$
|
125,032
|
|
|
Cost of revenue
|
118,195
|
|
|
107,353
|
|
|
||
Gross profit
|
21,278
|
|
|
17,679
|
|
|
||
General and administrative expenses
|
16,127
|
|
|
13,859
|
|
|
||
Sales and marketing expenses
|
1,989
|
|
|
725
|
|
|
||
Restructuring charges
|
1,119
|
|
|
435
|
|
|
||
Gain on change in fair value of contingent consideration, net
|
50
|
|
|
2,552
|
|
|
||
Operating income
|
2,093
|
|
|
5,212
|
|
|
||
Interest expense
|
1,598
|
|
|
686
|
|
|
||
Other expense
|
14
|
|
|
164
|
|
|
||
Income before income tax expense
|
481
|
|
|
4,362
|
|
|
||
Income tax expense
|
147
|
|
|
1,730
|
|
|
||
Net income
|
$
|
334
|
|
|
$
|
2,632
|
|
|
|
|
|
|
|
||||
Basic weighted average shares outstanding
|
16,672
|
|
|
16,619
|
|
|
||
Diluted weighted average shares outstanding
|
16,703
|
|
|
16,713
|
|
|
||
|
|
|
|
|
||||
Per common share data:
|
|
|
|
|
|
|
||
Basic earnings per share
|
$
|
0.02
|
|
|
$
|
0.16
|
|
|
Diluted earnings per share
|
$
|
0.02
|
|
|
$
|
0.16
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
334
|
|
|
$
|
2,632
|
|
Foreign currency translation adjustments
|
1,713
|
|
|
2,432
|
|
||
Change in fair value of interest rate cap, net of tax
|
—
|
|
|
148
|
|
||
Change in fair value of interest rate swap, net of tax
|
—
|
|
|
55
|
|
||
Comprehensive income
|
$
|
2,047
|
|
|
$
|
5,267
|
|
|
Common
stock |
|
Additional
paid-in capital |
|
Retained
earnings |
|
Treasury
stock at cost |
|
Accumulated
other comprehensive loss |
|
Total
stockholders’ equity |
||||||||||||
Balance at December 31, 2018
|
$
|
172
|
|
|
$
|
105,850
|
|
|
$
|
116,039
|
|
|
$
|
(13,802
|
)
|
|
$
|
(21,690
|
)
|
|
$
|
186,569
|
|
Net income
|
—
|
|
|
—
|
|
|
334
|
|
|
—
|
|
|
—
|
|
|
334
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,713
|
|
|
1,713
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
354
|
|
||||||
Issuance of stock for employer contributions to retirement plan
|
—
|
|
|
(421
|
)
|
|
—
|
|
|
1,156
|
|
|
—
|
|
|
735
|
|
||||||
Net issuances of stock pursuant to stock compensation plans and other
|
—
|
|
|
(874
|
)
|
|
—
|
|
|
883
|
|
|
—
|
|
|
9
|
|
||||||
Balance at March 31, 2019
|
$
|
172
|
|
|
$
|
104,909
|
|
|
$
|
116,373
|
|
|
$
|
(11,763
|
)
|
|
$
|
(19,977
|
)
|
|
$
|
189,714
|
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Treasury
stock
at cost
|
|
Accumulated
other
comprehensive
loss
|
|
Total
stockholders’
equity
|
||||||||||||
Balance at December 31, 2017
|
$
|
172
|
|
|
$
|
107,256
|
|
|
$
|
106,599
|
|
|
$
|
(11,118
|
)
|
|
$
|
(14,855
|
)
|
|
$
|
188,054
|
|
Cumulative effect adjustment of adopting ASU 2014-09
|
—
|
|
|
—
|
|
|
(396
|
)
|
|
—
|
|
|
—
|
|
|
(396
|
)
|
||||||
Adjusted balance at December 31, 2017
|
172
|
|
|
107,256
|
|
|
106,203
|
|
|
(11,118
|
)
|
|
(14,855
|
)
|
|
187,658
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
2,632
|
|
|
—
|
|
|
—
|
|
|
2,632
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,432
|
|
|
2,432
|
|
||||||
Change in fair value of interest rate cap, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|
148
|
|
||||||
Change in fair value of interest rate swap, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
55
|
|
||||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,261
|
)
|
|
—
|
|
|
(7,261
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
698
|
|
||||||
Issuance of stock for employer contributions to retirement plan
|
—
|
|
|
4
|
|
|
—
|
|
|
707
|
|
|
—
|
|
|
711
|
|
||||||
Net issuances of stock pursuant to stock compensation plans and other
|
—
|
|
|
(589
|
)
|
|
—
|
|
|
538
|
|
|
—
|
|
|
(51
|
)
|
||||||
Balance at March 31, 2018
|
$
|
172
|
|
|
$
|
107,369
|
|
|
$
|
108,835
|
|
|
$
|
(17,134
|
)
|
|
$
|
(12,220
|
)
|
|
$
|
187,022
|
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
334
|
|
|
$
|
2,632
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Gain on change in fair value of contingent consideration, net
|
(50
|
)
|
|
(2,552
|
)
|
||
Depreciation and amortization
|
2,341
|
|
|
1,842
|
|
||
Deferred income taxes
|
(102
|
)
|
|
(108
|
)
|
||
Non-cash compensation expense
|
1,089
|
|
|
1,409
|
|
||
Changes in other operating items:
|
|
|
|
|
|
||
Accounts and other receivables
|
6,104
|
|
|
12,817
|
|
||
Unbilled revenue
|
(2,553
|
)
|
|
227
|
|
||
Prepaid expenses and other current assets
|
(5,600
|
)
|
|
(6,024
|
)
|
||
Accounts payable and accrued expenses
|
498
|
|
|
1,643
|
|
||
Deferred revenue
|
(5,589
|
)
|
|
(2,485
|
)
|
||
Other
|
923
|
|
|
5
|
|
||
Net cash (used in) provided by operating activities
|
(2,605
|
)
|
|
9,406
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(542
|
)
|
|
(370
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(10,000
|
)
|
||
Other investing activities
|
(226
|
)
|
|
(834
|
)
|
||
Net cash used in investing activities
|
(768
|
)
|
|
(11,204
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from short-term borrowings
|
—
|
|
|
6,022
|
|
||
Proceeds from long-term debt
|
33,038
|
|
|
—
|
|
||
Repayment of long-term debt
|
(33,000
|
)
|
|
(3,000
|
)
|
||
Change in negative cash book balance
|
(701
|
)
|
|
(261
|
)
|
||
Repurchases of common stock in the open market
|
—
|
|
|
(7,790
|
)
|
||
Other financing activities
|
(27
|
)
|
|
(50
|
)
|
||
Net cash used in financing activities
|
(690
|
)
|
|
(5,079
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(927
|
)
|
|
210
|
|
||
Net decrease in cash
|
(4,990
|
)
|
|
(6,667
|
)
|
||
Cash at beginning of period
|
13,417
|
|
|
23,612
|
|
||
Cash at end of period
|
$
|
8,427
|
|
|
$
|
16,945
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
1,552
|
|
|
$
|
624
|
|
Cash paid during the period for income taxes
|
816
|
|
|
1,460
|
|
(1)
|
Basis of Presentation
|
(2)
|
Recent Accounting Standards
|
(3)
|
Revenue
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
Workforce
Excellence
|
|
Business Transformation Services
|
|
Consolidated
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Revenue by type of service:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Managed learning services
|
$
|
51,818
|
|
|
$
|
51,777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,818
|
|
|
$
|
51,777
|
|
Engineering & technical services
|
27,632
|
|
|
24,669
|
|
|
—
|
|
|
—
|
|
|
27,632
|
|
|
24,669
|
|
||||||
Sales enablement
|
—
|
|
|
—
|
|
|
37,164
|
|
|
23,850
|
|
|
37,164
|
|
|
23,850
|
|
||||||
Organizational development
|
—
|
|
|
—
|
|
|
22,859
|
|
|
24,736
|
|
|
22,859
|
|
|
24,736
|
|
||||||
|
$
|
79,450
|
|
|
$
|
76,446
|
|
|
$
|
60,023
|
|
|
$
|
48,586
|
|
|
$
|
139,473
|
|
|
$
|
125,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue by geographic region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
54,685
|
|
|
$
|
48,700
|
|
|
$
|
45,982
|
|
|
$
|
40,921
|
|
|
$
|
100,667
|
|
|
$
|
89,621
|
|
Europe Middle East Africa
|
22,229
|
|
|
24,634
|
|
|
11,683
|
|
|
9,244
|
|
|
33,912
|
|
|
33,878
|
|
||||||
Asia Pacific
|
6,142
|
|
|
7,287
|
|
|
5,134
|
|
|
72
|
|
|
11,276
|
|
|
7,359
|
|
||||||
Eliminations
|
(3,606
|
)
|
|
(4,175
|
)
|
|
(2,776
|
)
|
|
(1,651
|
)
|
|
(6,382
|
)
|
|
(5,826
|
)
|
||||||
|
$
|
79,450
|
|
|
$
|
76,446
|
|
|
$
|
60,023
|
|
|
$
|
48,586
|
|
|
$
|
139,473
|
|
|
$
|
125,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue by client market sector:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Automotive
|
$
|
1,693
|
|
|
$
|
2,914
|
|
|
$
|
36,081
|
|
|
$
|
24,246
|
|
|
$
|
37,774
|
|
|
$
|
27,160
|
|
Financial & Insurance
|
18,627
|
|
|
22,116
|
|
|
2,494
|
|
|
3,067
|
|
|
21,121
|
|
|
25,183
|
|
||||||
Manufacturing
|
7,978
|
|
|
9,176
|
|
|
6,310
|
|
|
4,112
|
|
|
14,288
|
|
|
13,288
|
|
||||||
Energy / Oil & Gas
|
11,375
|
|
|
7,794
|
|
|
1,183
|
|
|
1,330
|
|
|
12,558
|
|
|
9,124
|
|
||||||
U.S. Government
|
9,616
|
|
|
6,518
|
|
|
1,908
|
|
|
2,322
|
|
|
11,524
|
|
|
8,840
|
|
||||||
U.K. Government
|
4,055
|
|
|
5,486
|
|
|
—
|
|
|
—
|
|
|
4,055
|
|
|
5,486
|
|
||||||
Information & Communication
|
3,461
|
|
|
3,621
|
|
|
2,304
|
|
|
2,053
|
|
|
5,765
|
|
|
5,674
|
|
||||||
Aerospace
|
6,452
|
|
|
7,804
|
|
|
1,161
|
|
|
679
|
|
|
7,613
|
|
|
8,483
|
|
||||||
Electronics Semiconductor
|
4,122
|
|
|
3,683
|
|
|
254
|
|
|
51
|
|
|
4,376
|
|
|
3,734
|
|
||||||
Life Sciences
|
4,712
|
|
|
1,874
|
|
|
2,115
|
|
|
2,684
|
|
|
6,827
|
|
|
4,558
|
|
||||||
Other
|
7,359
|
|
|
5,460
|
|
|
6,213
|
|
|
8,042
|
|
|
13,572
|
|
|
13,502
|
|
||||||
|
$
|
79,450
|
|
|
$
|
76,446
|
|
|
$
|
60,023
|
|
|
$
|
48,586
|
|
|
$
|
139,473
|
|
|
$
|
125,032
|
|
(4)
|
Significant Customers & Concentration of Credit Risk
|
(5)
|
Earnings Per Share
|
|
Three Months Ended
March 31, |
|
||||
|
2019
|
|
2018
|
|
||
|
(In thousands)
|
|||||
Non-dilutive instruments
|
51
|
|
|
7
|
|
|
|
|
|
|
|
||
Dilutive common stock equivalents
|
31
|
|
|
94
|
|
|
(6)
|
Acquisitions
|
Acquisition:
|
Original range of potential undiscounted payments
|
|
As of March 31, 2019 Maximum contingent consideration due in
|
||||||||
|
|
|
2019
|
2020
|
Total
|
||||||
IC Axon
|
$0 - $3,500
|
|
$
|
3,500
|
|
$
|
—
|
|
$
|
3,500
|
|
McKinney Rogers
|
$0 - $18,000
|
|
—
|
|
4,000
|
|
4,000
|
|
|||
|
|
|
$
|
3,500
|
|
$
|
4,000
|
|
$
|
7,500
|
|
|
|
|
|
|
|
|
Liability as of
December 31,
|
|
|
|
|
|
Change in
Fair Value of
Contingent
|
|
Foreign
Currency
|
|
Liability as of
March 31,
|
||||||||||||
Acquisition:
|
2018
|
|
Additions
|
|
Payments
|
|
Consideration
|
|
Translation
|
|
2019
|
||||||||||||
IC Axon
|
$
|
594
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
580
|
|
McKinney Rogers
|
83
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
47
|
|
||||||
Total
|
$
|
677
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(50
|
)
|
|
$
|
—
|
|
|
$
|
627
|
|
(7)
|
Intangible Assets
|
|
Workforce Excellence
|
|
Business Transformation Services
|
|
Total
|
||||||
Balance as of December 31, 2018
|
$
|
123,918
|
|
|
$
|
52,206
|
|
|
$
|
176,124
|
|
Purchase accounting adjustment
|
—
|
|
|
25
|
|
|
25
|
|
|||
Foreign currency translation
|
1,147
|
|
|
(8
|
)
|
|
1,139
|
|
|||
Balance as of March 31, 2019
|
$
|
125,065
|
|
|
$
|
52,223
|
|
|
$
|
177,288
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
March 31, 2019
|
|
|
|||||||||
Customer relationships
|
$
|
22,114
|
|
|
$
|
(4,806
|
)
|
|
$
|
17,308
|
|
Intellectual property and other
|
4,946
|
|
|
(2,366
|
)
|
|
2,580
|
|
|||
|
$
|
27,060
|
|
|
$
|
(7,172
|
)
|
|
$
|
19,888
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
$
|
26,524
|
|
|
$
|
(8,547
|
)
|
|
$
|
17,977
|
|
Intellectual property and other
|
4,936
|
|
|
(1,980
|
)
|
|
2,956
|
|
|||
|
$
|
31,460
|
|
|
$
|
(10,527
|
)
|
|
$
|
20,933
|
|
(8)
|
Stock-Based Compensation
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Restricted stock units
|
257
|
|
|
630
|
|
||
Board of Directors and other stock grants
|
97
|
|
|
68
|
|
||
Total stock-based compensation expense
|
$
|
354
|
|
|
$
|
698
|
|
(9)
|
Debt
|
(10)
|
Income Taxes
|
(11)
|
Stockholders’ Equity
|
(12)
|
Restructuring
|
|
|
Employee Severance and Related Benefits
|
|
Excess Facilities and Other Costs
|
|
Total
|
||||||
Liability as of December 31, 2018
|
|
$
|
1,266
|
|
|
$
|
591
|
|
|
$
|
1,857
|
|
Additional restructuring charges
|
|
1,119
|
|
|
—
|
|
|
1,119
|
|
|||
Payments
|
|
(1,238
|
)
|
|
(68
|
)
|
|
(1,306
|
)
|
|||
Liability as of March 31, 2019
|
|
$
|
1,147
|
|
|
$
|
523
|
|
|
$
|
1,670
|
|
(13)
|
Leases
|
|
Three Months Ended March 31, 2019
|
||
Operating lease cost
|
$
|
2,457
|
|
Short-term lease cost
|
353
|
|
|
Total lease costs
|
$
|
2,810
|
|
|
Three Months Ended March 31, 2019
|
||
Operating lease right-of-use assets
|
$
|
29,273
|
|
|
|
||
Current portion of operating lease liabilities
|
$
|
9,402
|
|
Non-current portion of operating lease liabilities
|
23,653
|
|
|
Total operating lease liabilities
|
$
|
33,055
|
|
|
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
2,416
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
467
|
|
|
|
||
Weighted-average remaining lease term for operating leases (years)
|
5.6 years
|
|
|
|
|
||
Weighted-average discount rate for operating leases
|
4.77
|
%
|
Year ended December 31,
|
|
|
||
2019 (excluding the three months ended March 31, 2019)
|
|
$
|
7,469
|
|
2020
|
|
7,845
|
|
|
2021
|
|
5,608
|
|
|
2022
|
|
4,513
|
|
|
2023
|
|
3,950
|
|
|
Thereafter
|
|
8,809
|
|
|
Total future lease payments
|
|
38,194
|
|
|
Less: imputed interest
|
|
(5,139
|
)
|
|
Present value of future lease payments
|
|
33,055
|
|
|
Less: current portion of lease liabilities
|
|
(9,402
|
)
|
|
Long-term lease liabilities
|
|
$
|
23,653
|
|
Year ended December 31,
|
|
|
||
2019
|
|
$
|
10,646
|
|
2020
|
|
7,833
|
|
|
2021
|
|
5,520
|
|
|
2022
|
|
4,528
|
|
|
2023
|
|
3,898
|
|
|
Thereafter
|
|
8,671
|
|
|
Total
|
|
$
|
41,096
|
|
(14)
|
Business Segments
|
•
|
Managed Learning Services
- this practice focuses on creating value for our customers by delivering a suite of talent management and learning design, development, operational and support services that can be delivered as large scale outsourcing arrangements, managed services contracts and project-based service engagements. The Managed Learning Services offerings include strategic learning and development consulting services, digital learning content design and development solutions and a suite of managed learning operations services, including: managed facilitation and delivery,
|
•
|
Engineering & Technical Services
- this practice focuses on capital intensive, inherently hazardous and/or highly complex technical services in support of both U.S. government and global commercial industries. Our products and services include design, development and delivery of technical work-based learning, CapEx (plant launch) initiatives, engineering design and construction management, fabrication, and management services, operational excellence consulting, chemical demilitarization services, homeland security services, emergency management support services along with all forms of technical documentation. We deliver world-class asset management and performance improvement consulting to a host of industries. Our proprietary EtaPRO® Performance and Condition Monitoring System provides a suite of real-time digital solutions for hundreds of facilities and is installed in power-generating units around the world. We also provide thousands of technical courses in a web-based off the shelf delivery format through our GPiLEARN+™ portal.
|
•
|
Sales Enablement
- this practice provides custom product sales training and service technical training, primarily to automotive manufacturers, designed to better educate the customer salesforces as well as the service technicians with respect to new product features and designs, in effect rapidly increasing the salesforce and technicians knowledge base and enabling them to address retail customer needs. Furthermore, this segment helps our clients assess their customer relationship marketing strategy and connect with their customers on a one-to-one basis, including custom print and digital publications. We have been a custom product sales and service technical training provider and leader in serving manufacturing customers in the U.S. automotive industry for over 40 years.
|
•
|
Organizational Development
- this practice works with organizations to design and execute an integrated people performance system. This translates to helping organizations set strategy, carry that strategy through every level of the organization and ensure that their people have the right skills, knowledge, tools, processes and technology to enable the transformation and achieve business results. Solutions include strategy, leadership, employee engagement and culture consulting, enterprise technology implementation and adoption solutions, and organization design and business performance consulting.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Revenue:
|
|
|
|
||||
Workforce Excellence
|
$
|
79,450
|
|
|
$
|
76,446
|
|
Business Transformation Services
|
60,023
|
|
|
48,586
|
|
||
|
$
|
139,473
|
|
|
$
|
125,032
|
|
Gross profit:
|
|
|
|
|
|
||
Workforce Excellence
|
$
|
13,409
|
|
|
$
|
11,355
|
|
Business Transformation Services
|
7,869
|
|
|
6,324
|
|
||
Total gross profit
|
21,278
|
|
|
17,679
|
|
||
General and administrative expenses
|
16,127
|
|
|
13,859
|
|
||
Sales and marketing expenses
|
1,989
|
|
|
725
|
|
||
Restructuring charges
|
1,119
|
|
|
435
|
|
||
Gain on change in fair value of contingent consideration, net
|
50
|
|
|
2,552
|
|
||
Operating income
|
2,093
|
|
|
5,212
|
|
||
Interest expense
|
1,598
|
|
|
686
|
|
||
Other expense
|
14
|
|
|
164
|
|
||
Income before income tax expense
|
$
|
481
|
|
|
$
|
4,362
|
|
•
|
Managed Learning Services
- this practice focuses on creating value for our customers by delivering a suite of talent management and learning design, development, operational and support services that can be delivered as large scale outsourcing arrangements, managed services contracts and project-based service engagements. The Managed Learning Services offerings include strategic learning and development consulting services, digital learning content design and development solutions and a suite of managed learning operations services, including: managed facilitation and delivery, managed training administration and logistics, help desk support, tuition reimbursement management services, event management and vendor management.
|
•
|
Engineering & Technical Services
- this practice focuses on capital intensive, inherently hazardous and/or highly complex technical services in support of both U.S. government and global commercial industries. Our products and services include design, development and delivery of technical work-based learning, CapEx (plant launch) initiatives, engineering design and construction management, fabrication, and management services, operational excellence consulting, chemical demilitarization services, homeland security services, emergency management support services along with all forms of technical documentation. We deliver world-class asset management and performance improvement consulting to a host of industries. Our proprietary EtaPRO® Performance and Condition Monitoring
|
•
|
Sales Enablement
- this practice provides custom product sales training and service technical training, primarily to automotive manufacturers, designed to better educate the customer salesforces as well as the service technicians with respect to new product features and designs, in effect rapidly increasing the salesforce and technicians knowledge base and enabling them to address retail customer needs. Furthermore, this segment helps our clients assess their customer relationship marketing strategy and connect with their customers on a one-to-one basis, including custom print and digital publications. We have been a custom product sales and service technical training provider and leader in serving manufacturing customers in the U.S. automotive industry for over 40 years.
|
•
|
Organizational Development
- this practice works with organizations to design and execute an integrated people performance system. This translates to helping organizations set strategy, carry that strategy through every level of the organization and ensure that their people have the right skills, knowledge, tools, processes and technology to enable the transformation and achieve business results. Solutions include strategy, leadership, employee engagement and culture consulting, enterprise technology implementation and adoption solutions, and organization design and business performance consulting.
|
(Dollars in thousands)
|
Three months ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Workforce Excellence
|
$
|
79,450
|
|
|
$
|
76,446
|
|
Business Transformation Services
|
60,023
|
|
|
48,586
|
|
||
|
$
|
139,473
|
|
|
$
|
125,032
|
|
•
|
a $3.4 million net increase in revenue in our Engineering & Technical Services practice primarily due to a $0.7 million increase in disaster relief services, a $1.3 million increase in chemical demilitarization training services for a U.S. government client, a $0.9 million increase in alternative fuels projects, and a net increase of $0.5 million in various other revenue streams; and
|
•
|
a $1.8 million net increase in revenue in our Managed Learning Services practice primarily due to the following:
|
◦
|
a $3.5 million increase in revenue from the IC Axon business acquired on May 1, 2018; partially offset by
|
◦
|
a $1.1 million decrease in vocational skills training services provided to the UK government; and
|
◦
|
a $0.6 million net decrease in revenue for managed learning and training content development services.
|
•
|
a $13.3 million net increase in our Sales Enablement practice primarily due to the TTi Global and TTi Europe acquisitions in 2018 which contributed $12.7 million of revenue in the first quarter of 2019, partially offset by the following decreases:
|
•
|
a $1.2 million net decrease in our Organizational Development practice primarily due to a decline in platform adoption services; and
|
•
|
a $0.7 million net decrease in revenue due to changes in foreign currency exchange rates.
|
(Dollars in thousands)
|
Three months ended
|
||||||||||||
|
March 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
|
|
% Revenue
|
|
|
|
% Revenue
|
||||||
Workforce Excellence
|
$
|
13,409
|
|
|
16.9
|
%
|
|
$
|
11,355
|
|
|
14.9
|
%
|
Business Transformation Services
|
7,869
|
|
|
13.1
|
%
|
|
6,324
|
|
|
13.0
|
%
|
||
|
$
|
21,278
|
|
|
15.3
|
%
|
|
$
|
17,679
|
|
|
14.1
|
%
|
•
|
a $1.3 million increase in gross profit in our Engineering & Technical Services practice primarily due to an increase in revenue; and
|
•
|
a $0.8 million net increase in gross profit in our Managed Learning Services practice primarily due to increase in revenue, partially offset by a $0.8 million decline in vocational skill training services provided to the UK government as a result of the lower revenue noted above.
|
Acquisition:
|
Original range of potential undiscounted payments
|
|
As of March 31, 2019 Maximum contingent consideration due in
|
||||||||
|
|
|
2019
|
2020
|
Total
|
||||||
IC Axon
|
$0 - $3,500
|
|
$
|
3,500
|
|
$
|
—
|
|
$
|
3,500
|
|
McKinney Rogers
|
$0 - $18,000
|
|
—
|
|
4,000
|
|
4,000
|
|
|||
|
|
|
$
|
3,500
|
|
$
|
4,000
|
|
$
|
7,500
|
|
|
|
|
|
|
|
|
|
Issuer Purchases of Equity Securities
|
|||||||||||||
|
|
Total number
of shares purchased
|
|
|
Average
price paid per share
|
|
Total number
of shares
purchased as
part of publicly announced program
|
|
Approximate
dollar value of
shares that may yet
be purchased under the program
(1)
|
||||||
Month
|
|
|
|
|
|
||||||||||
January 1 - 31, 2019
|
|
521
|
|
(2)
|
|
$
|
12.73
|
|
|
—
|
|
|
$
|
3,755,000
|
|
February 1 - 28, 2019
|
|
—
|
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
3,755,000
|
|
March 1 - 31, 2019
|
|
—
|
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
3,755,000
|
|
(1)
|
We have a 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.
|
(2)
|
Includes shares surrendered by employees to satisfy minimum tax withholding obligations on restricted stock units which vested during the first quarter of 2019.
|
Item 6.
|
Exhibits
|
10.1
|
31.1
|
31.2
|
32.1
|
101
|
The following materials from GP Strategies Corporation’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2019
, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Stockholders' Equity, (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.*
|
*Filed herewith.
|
|
GP STRATEGIES CORPORATION
|
|
|
May 10, 2019
|
/s/ Scott N. Greenberg
|
|
Scott N. Greenberg
|
|
Chief Executive Officer
|
|
|
May 10, 2019
|
/s/ Michael R. Dugan
|
|
Michael R. Dugan
|
|
Executive Vice President and Chief Financial Officer
|
EXECUTED
as a deed, and delivered when dated, by
GP STRATEGIES HOLDINGS LIMITED
acting by a Director, (
name
)…………………………………… in the presence of:
|
)
)
)
)
)
|
(
signed
)……………………………………
Director
|
Witness
|
|
|
EXECUTED
as a deed, and delivered when dated, by
GP STRATEGIES LIMITED
acting by a Director, (
name
)…………………………………… in the presence of:
|
)
)
)
)
)
|
(
signed
)……………………………………
Director
|
Witness
|
|
|
EXECUTED
as a deed, and delivered when dated, by
GP STRATEGIES TRAINING LIMITED
acting by a Director, (
name
)…………………………………… in the presence of:
|
)
)
)
)
)
|
(
signed
)……………………………………
Director
|
Witness
|
|
|
Loan Party
|
Creditor
|
Debtor
|
Type
|
Amount
|
||
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies India Pvt. Ltd.
|
Intercompany Note
|
|
$2,000,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies Argentina S.R.L
|
Intercompany Note
|
|
$300,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Canada Co.
|
Intercompany Note
|
|
$1,000,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies Denmark ApS
|
Intercompany Note
|
|
$12,000,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies Ltd.
|
Intercompany Note
|
|
$12,000,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
General Physics
(UK) Ltd |
Intercompany Note
|
|
$22,500,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies
(Malaysia) SDN BHD |
Intercompany Note
|
|
$50,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
General Physics
Corporation Mexico, S.A. de C.V. |
Intercompany Note
|
|
$1,500,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies Singapore (Asia) Pte. Ltd
|
Intercompany Note
|
|
$2,000,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies
Taiwan Ltd. |
Intercompany Note
|
|
$60,000
|
|
GP Strategies Corporation
|
GP Strategies Corporation
|
GP Strategies
Egypt, LLC |
Intercompany Note
|
|
$200,000
|
|
General Physics (UK) Ltd
|
General Physics
(UK) Ltd |
GP Strategies Holdings Ltd.
|
Intercompany Note
|
|
£2,000,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies Denmark ApS
|
Intercompany Note
|
|
£5,500,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies
Sweden AB |
Intercompany Note
|
|
£100,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies
Egypt, LLC |
Intercompany Note
|
|
£400,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies
(Hong Kong) Limited |
Intercompany Note
|
|
£400,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies Hungary Kft.
|
Intercompany Note
|
|
£100,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies Middle East FZ-LLC
|
Intercompany Note
|
|
£1,000,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies
Danismanlik Limited Sirketi |
Intercompany Note
|
|
£500,000
|
|
GP Strategies Holdings Limited
|
GP Strategies Holdings Limited
|
GP Strategies
Finland Oy |
Capital Loan
Agreement
|
|
€14,135
|
|
GP Strategies Training Limited
|
GP Strategies Training Limited
|
Effective People A/S
|
Intercompany Note
|
|
£750,000
|
|
1.
|
I have reviewed this quarterly
report on Form
10-Q 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;
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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.
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Date: May 10, 2019
|
|
/s/ Scott N. Greenberg
|
Scott N. Greenberg
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly
report on Form
10-Q 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.
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Date: May 10, 2019
|
|
/s/ Michael R. Dugan
|
Michael R. Dugan
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 10, 2019
|
|
|
|
|
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/s/ Scott N. Greenberg
|
|
/s/ Michael R. Dugan
|
Scott N. Greenberg
|
|
Michael R. Dugan
|
Chief Executive Officer
|
|
Executive Vice President and Chief Financial Officer
|