GP Strategies Reports Pretax Income Of $1.6 million For The Year Versus A Pretax Loss of $34.3 million
NEW YORK--March 28, 2002--GP Strategies Corporation , a leader in workforce development and technical and soft skills training, today announced results for the year ended December 31, 2001.
For the year ended December 31, 2001, net sales were $186.6 million, as compared to net sales of $197.5 million for the year ended December 31, 2000. However, net sales for 2000 included net sales from the Company's open enrollment IT business that was closed in September 2000. In 2001, the manufacturing and process group reported net sales of $164.4 million, as compared to net sales of $161.9 million, for the corresponding period in 2000, an increase of 2%.
For the quarter ended December 31, 2001, net sales decreased by $6.2 million to $42.4 million, as compared to net sales of $48.6 million for the quarter ended December 31, 2000. This decrease was primarily attributable to a reduction in revenue from the automotive division of the manufacturing and process group and a decrease in revenue from the information technology group as a result of the downturn in the economy compounded by the effects of September 11, 2001.
For the year ended December 31, 2001, pretax income was $1.6 million, as compared to a pretax loss of $34.3 million for the prior year which included an impairment charge of $19.2 million and a $8.6 million restructuring charge. For the year ended December 31, 2001, the net loss after tax was $.9 million or $.09 per share as compared to a loss of $25.4 million or $2.04 per share.
For the year ended December 31, 2001, the Company had income tax expense of approximately $2.5 million on pretax income of approximately $1.6 million, primarily due to the tax treatment for financial statement purposes of the sale by the Company in the fourth quarter of 2001 of certain shares of Millennium Cell accounted for pursuant to SFAS 115 "Accounting for Certain Investments in Debt and Equity Securities". This item has no impact on the cash position of the Company.
In 2001, the Company had a net gain of $4.3 million primarily in relation to the sale of certain Millennium Cell shares. In addition, the Company recorded a non-cash $2.4 million credit to compensation expense related to a deferred compensation plan. The Company also had restructuring charge reversals of $1.2 million, primarily relating to favorable settlements on certain lease obligations and other contractual obligations. These items were offset by an operating loss from HMS of approximately $3.4 million and a $.3 million write-down on investments, of which $.2 million related to Five Star. In addition, the Company recorded charges of approximately $1.1 million relating to financial consulting services, (of which $.8 million is non-cash) and $.4 million relating to a potential new credit agreement which was not consummated. The Company also incurred in excess of $.5 million of legal fees relating to the Company's litigation against MCI Communications Corporation, Systemhouse and Electronic Data System Corporation, as successor to Systemhouse.
For the quarter ended December 31, 2001, the pretax loss was $.9 million as compared to a pretax loss of $11.7 million for the fourth quarter of 2000. Net loss after income taxes was $2.3 million or $.19 per share as compared to $7.6 million or $.59 per share for the corresponding period in 2000.
Results for the quarter ended December 31, 2001 included a gain on sale on marketable securities of $2.8 million offset by an operating loss from Hydro Med Sciences of approximately $0.8 million, a non-cash charge on a deferred compensation plan of $.7 million, and a charge related to financial consulting services of approximately $0.3 million. In addition, the 2001 quarter reflected an equity loss of $0.5 million relating to the investment in GSE and a write down of $0.2 million relating to the investment in Five Star, $0.4 million relating to a potential new credit agreement which was not consummated and legal fees which were offset by the Company's reversal of restructuring charges.
GP Strategies reduced its debt outstanding under its revolving credit and term loan agreement by $17.2 million to $32.3 million at December 31, 2001 from $49.5 million at December 31, 2000.
About GP Strategies Corporation
GP Strategies, whose principal operating subsidiary is General Physics Corporation, is a NYSE listed company (GPX). General Physics is a workforce development company that improves the effectiveness of organizations by providing training, management systems and engineering services to meet the specific needs of clients. Programs have been developed for service managers and executives, engineers, sales associates, plant operators, the maintenance and purchasing workforces and information technology professionals in the public and private sectors in North and South America, Europe and Asia. Clients include Fortune 500 companies, manufacturing, process and energy industries, and other commercial and government customers. Additional information about General Physics may be found at www.gpworldwide.com.
The company has scheduled an investor conference call for 10:00 a.m. EST today. The dial-in number for the live conference call will be 212-346-6460. A telephone replay of the call will also be available beginning at 12:00 noon on March 28. To listen to the replay, dial 800-633-8284 (858-812-6440 outside the United States) and enter reservation number 20466569.
The forward-looking statements contained herein reflect GP Strategies' management's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of GP Strategies, including, but not limited to those risks and uncertainties detailed in GP Strategies' periodic reports and registration statements filed with the Securities and Exchange Commission.
An unaudited comparative summary of GP Strategies Corporation's consolidated net sales and income (loss) before income taxes and net loss for the quarters and years ended December 31, 2001 and 2000 is as follows (in thousands):
Quarter Ended Year Ended
December 31, December 31,
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2001 2000 2001 2000
-------- -------- -------- --------
Manufacturing & Process $ 37,570 $ 42,480 $164,361 $161,859
Information Technology 2,460 3,476 11,061 24,593
Other 2,407 2,597 11,189 11,015
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Net Sales $ 42,437 $ 48,553 $186,611 $197,467
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Quarter Ended Year Ended
December 31, December 31,
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
Sales $ 42,437 $ 48,553 $186,611 $197,467
Costs of sales 37,876 42,896 164,034 177,678
-------- -------- -------- --------
Gross margin 4,561 5,657 22,577 19,789
Selling, general and
administrative expenses (6,846) (2,089) (21,918) (25,968)
Interest expense (1,067) (1,502) (4,733) (5,616)
Investment and other
income (loss), net (627) 786 496 (1,306)
Loss on Investments (320) (3,400) (320) (3,400)
Asset impairment charge - - - (19,245)
Restructuring reversals
(charges), net 568 (30) 1,174 (8,630)
Gain (loss) on marketable
securities 2,818 (11,137) 4,294 10,111
-------- -------- -------- --------
Income (loss) before
income taxes (913) (11,715) 1,570 (34,265)
Income tax (expense) benefit (1,369) 4,093 (2,515) 8,873
-------- -------- -------- --------
Net loss $ (2,282) $ (7,622) $ (945) $(25,392)
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Net loss per share:
Basic and diluted $ (0.19) $ (0.59) $ (0.09) $ (2.04)
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