Exhibit 99
FOR IMMEDIATE RELEASE
Contact:
Jerome I. Feldman Scott N. Greenberg
Chairman & CEO President & CFO
(914) 249-9750 (914) 249-9729
GP Strategies Reports THIRD QUARTER INCOME
Revenue for GP Strategies' ongoing core business, General Physics increases
to $44.2 million for the Quarter ended September 30, 2004 as compared to $33.3
million for the Quarter Ended September 30, 2003, an increase of 37%
General Physics' income before interest and income tax increases to $3.0
million for the Quarter Ended September
30, 2004 as compared to $2.2 for the Quarter ended June 30, 2004
New York, November 12, 2004 - GP Strategies Corporation (NYSE: GPX), a global
provider of training, e-Learning solutions, management consulting, engineering
and simulation services, today announced results for the quarter and nine months
ended September 30, 2004.
General Physics' net sales increased by $11.9 million in the third quarter of
2004 to $44.2 million, as compared to net sales for the third quarter of 2003 of
$32.3 million, an increase of approximately 37%. The Company recognized
approximately $2 million in revenue in the third quarter of 2004 as a result of
the Company's post disaster relief services in the aftermath of the hurricanes
in Florida.
For the quarter ended September 30, 2004, net sales at GP Strategies increased
by $46.1 million to $80.3 million, as compared to net sales of $34.2 million for
the quarter ended September 30, 2003. This increase is primarily attributable to
the $11.9 million net sales increase at General Physics and due to the
consolidation of $34.0 million of net sales of Five Star and GSE as a result of
the Company's increased ownership in October 2003 of the outstanding common
stock of Five Star and GSE. Prior to October 2003, the Company accounted for its
investments in Five Star and GSE using the equity method.
For the quarter ended September 30, 2004, income before income tax expense and
minority interest was $.9 million as compared to a loss of $2.6 million for the
quarter ended September 30, 2003. The improvement was primarily due to increased
profitability at General Physics, reduced corporate expenses due to an executive
compensation bonus of $1 million in the quarter ended September 30, 2003 and a
$.5 million loss due to a write down of an investment in the quarter ended
September 30,
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2003. Diluted net income (loss) per common share was $0.02 for the quarter ended
September 30, 2004 as compared with $(0.16) for the quarter ended September 30,
2003.
For the nine months ended September 30, 2004, net sales increased by $122.4
million to $228.8 million, as compared to net sales of $106.4 million for the
nine months ended September 30, 2003. This increase in net sales is primarily
attributable to the increase of revenue at General Physics, and to the
consolidation of the results of operations of Five Star and GSE. Net sales of
Five Star and GSE for the nine months ended September 30, 2004, aggregated
$103.5 million.
General Physics' net sales increased by $18.6 million for the nine months ended
September 30, 2004 to $118.8 million, as compared to net sales of $100.2 million
for the first nine months of 2003 or an increase of approximately 18.6%.
For the nine months ended September 30, 2004, income before income tax expense
and minority interest was $2.8 million as compared to a loss of $5.8 million for
the nine months ended September 30, 2003. The improvement was primarily due to
increased profitability at General Physics; reduced corporate expenses due to
executive compensation bonuses of $2 million in the nine months ended September
30, 2003; and increased pre-tax income as a result of the consolidation of Five
Star and GSE. Diluted net income (loss) per common share was $0.05 for the nine
month ended September 30, 2004 as compared with $(0.38) for the nine months
ended September 30, 2003.
As previously announced, the Company will spin-off certain non-core assets to
National Patent Development Corporation. Following the spin-off on November 24,
2004 the Company's results will include only the results of General Physics and
GSE Systems.
The Company has scheduled an investor conference call for 10:00 A.M. EDT on
November 12. The dial-in number for the live conference call will be
800-894-5910 (785-424-1052 outside the United States) and the Conference ID is
GP. A telephone replay of the call will also be available beginning at 1:00 p.m.
on November 12. To listen to the replay, dial 888-566-0193 (402-351-0791 outside
the United States).
A question and answer session will be held at the conclusion of the
presentation. Participants can email questions at any time during the
presentation to gpcall@gpworldwide.com.
About GP Strategies Corporation
GP Strategies, whose principal operating subsidiaries are General Physics, and
GSE Systems, is a NYSE listed company (GPX). General Physics and GSE Systems are
global providers of training, e-Learning solutions, management consulting,
engineering and simulation services, improving the effectiveness of
organizations by customizing solutions to meet the specific needs of clients.
Clients include Fortune 500 companies, manufacturing, process and energy
industries, and other commercial and government customers. Additional
information about GP Strategies may be found at www.gpstrategies.com and about
General Physics at www.gpworldwide.com.
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The forward-looking statements contained herein reflect GP Strategies'
management's current views with respect to future events and financial
performance. We use words such as "expects", "intends" and "anticipates" to
indicate forward-looking statements. 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, our inability to generate funds by selling any
assets that are included in the proposed spin-off, failure to continue to
attract and retain personnel, loss of business from significant customers,
failure to keep pace with technology, changing economic conditions, competition,
and those other risks and uncertainties detailed in GP Strategies' periodic
reports and registration statements filed with the Securities and Exchange
Commission.
If any one or more of these expectations and assumptions proves incorrect,
actual results will likely differ materially from those contemplated by the
forward-looking statements. Even if all of the foregoing assumptions and
expectations prove correct, actual results may still differ materially from
those expressed in the forward-looking statements as a result of factors we may
not anticipate or that may be beyond our control. While we cannot assess the
future impact that any of these differences could have on our business,
financial condition, results of operations and cash flows or the market price of
shares of our common stock, the differences could be significant. We do not
undertake to update any forward-looking statements made by us.
TABLES FOLLOW
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The following tables summarize the net sales and results of operations of GP
Strategies Corporation for the quarters and nine months ended September 30, 2004
and 2003 (Unaudited - in thousands):
Quarter Ended Nine Months Ended
September 30, September 30,
----------------------------- -------------------------------
-------------- -------------- -------------- ----------------
2004(1) 2003 2004 (1) 2003
------- ---- -------- ----
General Physics $44,178 $32,313 $118,814 $100,170
GSE Systems 7,340 - 22,498 -
Home Improvement Distribution (2) (3) 26,678 - 80,971 -
Optical Plastics (3) 2,061 1,914 6,493 6,182
--------- --------- ----------- ---------
Net sales $80,257 $34,227 $228,776 $106,352
======= ======= ======== ========
Net sales $80,257 $ 34,227 $228,776 $106,352
Cost of sales 68,313 29,614 194,660 93,598
-------- -------- -------- -------
Gross margin 11,944 4,613 34,116 12,754
Selling, general & administrative expenses (10,409) (6,562) (29,468) (17,566)
---------- --------- ---------- -------
Operating income (loss) 1,535 (1,949) 4,648 (4,812)
Interest expense (797) (1,471) (2,550) (2,659)
Investment and other income 167 (562) 290 100
Valuation adjustment of liability for warrants 1,162 1,162
Gains on marketable securities, net 186 381 398
------- --------- ---------- --------
Income (loss) before income taxes
and minority interest 905 (2,634) 2,769 (5,811)
Income tax expense (489) (213) (1,467) (605)
--------- --------- ------------ --------
Income (loss) before minority interests 416 (2,847) 1,302 (6,416)
Minority interests 13 - (349) -
-------- ------------ ---------- -----------
Net income (loss) $ 429 $(2,847) $ 953 $ (6,416)
========= =======- ========= =========
Net income (loss) per weighted
average common share
Basic and diluted $ 0.02 $ (0.16) $ 0.05 $ (0.38)
========== ========- ========= ========-
1) Net sales and results of operations for the quarter and nine months
ended September 30, 2004 includes the consolidation of Five Star and
GSE Systems as a result of the Company's increased ownership of the
outstanding common stock of Five Star and GSE Systems in October 2003.
Net sales of Five Star and GSE Systems for the quarter and nine months
ended September 30, 2004 aggregated $34.0 million and $103.5 million,
respectively.
2) Net sales of Five Star.
3) Home Improvement Distribution and Optical Plastics are non-core
businesses that will be spun-off to National Patent Development
Corporation effective November 10, 2004.
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