Exhibit 99.1
(GP STRATEGIES LOGO)
FOR IMMEDIATE RELEASE
Contact:
Scott N. Greenberg
Chief Executive Officer
(410)379-3640
GP STRATEGIES REPORTS FIRST QUARTER RESULTS
QUARTER HIGHLIGHTS:
- Quarterly Operating Income for General Physics core business up 97%
versus prior year period
- Quarterly Revenue for General Physics core business up 24% versus
prior year period
NEW YORK, MAY 10, 2005 - GP STRATEGIES CORPORATION (NYSE: GPX), a global
provider of training, e-Learning solutions, management consulting, engineering
and simulation services, today announced results for the first quarter ended
March 31, 2005.
GP Strategies' operations consist of General Physics Corporation ("General
Physics"), a wholly-owned subsidiary and GSE Systems, Inc. ("GSE"), a
majority-owned subsidiary. As previously announced, GP Strategies completed the
spin-off of National Patent Development Corporation ("NPDC") on November 24,
2004. Subsequent to the spin-off, GP Strategies ceased to have any ownership
interest in NPDC, and the operations of NPDC, which include Five Star Products,
Inc and MXL Industries, Inc., have been reclassified to discontinued operations
for the quarter ended March 31, 2004.
In the first quarter of 2005, revenue at GP Strategies increased by $7.2 million
to $49.9 million, as compared to revenue of $42.7 million in the first quarter
of 2004. This increase is primarily attributable to higher revenue at General
Physics, partially offset by a decline in revenue at GSE Systems.
In the first quarter of 2005, General Physics' revenue increased by $8.4 million
or 24% to $43.7 million, as compared to revenue of $35.3 million in the first
quarter of 2004. General Physics' revenue for the fourth quarter ended December
31, 2004 was approximately $42.8 million excluding approximately $3.0 million of
revenue generated from disaster relief services in the aftermath of the Florida
hurricanes.
For the quarter ended March 31, 2005, income from continuing operations was $0.5
million as compared to breakeven for the quarter ended March 31, 2004. The
improvement was primarily due to increased profitability at General Physics and
reduced corporate expenses offset by losses incurred at GSE Systems. Diluted
income from continuing operations per common share was $0.02 for the quarter
ended March 31, 2005 as compared to ($0.00) for the quarter ended March 31,
2004. Operating profit before the loss of GSE Systems increased from
approximately $0.6 million to approximately $2.2 million or an increase of $1.6
million.
"We continue to deliver solid performance in General Physics," said Scott N.
Greenberg, CEO of GP Strategies. "Our first quarter results show progress in
adding and expanding customer relationships while maintaining a clear focus on
our core business."
Page No. 2
The Company is actively considering alternatives with respect to its investment
in GSE Systems.
The Company has scheduled an investor conference call for 10:00 a.m. ET on May
10, 2005. In addition to prepared remarks from management, there will be a
question and answer session on the call. The dial-in number for the live
conference call will be 888-412-9257. A telephone replay of the call will also
be available beginning at 1:00 p.m. on May 10, until 11:59 p.m. on May 17. To
listen to the replay, dial 800-642-1687 or 706-645-9291, using conference ID
number 6169456.
ABOUT GP STRATEGIES CORPORATION
GP Strategies, whose operating subsidiaries are General Physics, and GSE, is a
NYSE listed company (GPX). General Physics and GSE 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.
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 were included in the recently completed NPDC spin-off, the ability
of GSE to secure additional financing, our holding company structure, failure to
continue to attract and retain personnel, loss of business from significant
customers, failure to keep pace with technology, changing economic conditions,
competition, our ability to implement procedures that will reduce the likelihood
that material weaknesses in our internal controls will occur in the future, 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
Page No. 3
The following table summarizes the revenue of GP Strategies Corporation, by
reporting segment, and the consolidated results of their operations for the
quarters ended March 31, 2005 and 2004. As previously announced, GP Strategies
Corporation ("the Company" or "GP Strategies") completed the spin-off of
National Patent Development Corporation ("NPDC") on November 24, 2004.
Subsequent to the spin - off, the Company's operations consist of General
Physics Corporation ("General Physics") and GSE Systems, Inc. ("GSE") a
majority-owned subsidiary and the Company ceased to have ownership interest in
NPDC. The operations of NPDC, which included Five Star Products, Inc and MXL
Industries, Inc., have been reclassified to discontinued operations for the
quarter ended March 31, 2004.
(Unaudited - in thousands): Quarters ended
March 31,
-------------------------
2005 2004
--------- ---------
REVENUE:
General Physics $ 43,727 $ 35,309
GSE 6,126 7,411
-------- --------
$ 49,853 $ 42,720
======== ========
OPERATING PROFIT:
General Physics $ 2,976 $ 1,507
Public Company and other general expenses (414) (1,035)
Litigation expense (200) --
Deferred compensation plan (191) 167
-------- --------
Operating profit before GSE 2,171 639
GSE (1,043) 172
-------- --------
Total Operating Profit 1,128 811
======== ========
Interest expense (380) (633)
Other income 194 138
-------- --------
Income from continuing operations
before income taxes and minority interest 942 316
Income tax expense(1) (851) (273)
-------- --------
Income before minority interest 91 43
Minority interest 377 (27)
-------- --------
Income from continuing operations 468 16
Income from discontinued operations,
net of income tax expense -- 115
-------- --------
Net income $ 468 $ 131
======== ========
Per common share data:
Basic
Income from continuing operations $ .03 $ .00
Income from discontinued operations -- .01
Net income $ .03 $ .01
Diluted
Income from continuing operations $ .02 $ .00
Income from discontinued operations -- .01
Net income $ .02 $ .01
- -------------------
(1) GSE is not consolidated for federal tax purposes, so the Company derives no
tax benefit from their first quarter 2005 loss.
Page No. 4
The following table summarizes the condensed consolidated balance sheet data of
GP Strategies Corporation, as of March 31, 2005 and December 31, 2004.
(Unaudited - in thousands):
MARCH 31, December 31
2005 2004
--------- -----------
Current assets:
Cash and cash equivalents $ 5,489 $ 2,417
Cash held in escrow from arbitration -- 13,798
Accounts and other receivables 25,846 31,114
Costs and estimated earnings in excess of billings on uncompleted contracts 19,023 16,834
Prepaid expenses and other current assets 7,276 5,828
-------- --------
Total current assets 57,634 69,991
Property, plant and equipment, net 2,744 2,673
Goodwill and other intangibles 63,286 63,404
Other assets 19,758 19,967
-------- --------
Total assets $143,422 $156,035
======== ========
Current liabilities:
Current maturities of long-term debt $ 94 $ 100
Short-term borrowings 700 6,068
Accounts payable and accrued expenses 26,178 33,219
Billings in excess of costs and estimated earnings on uncompleted contracts 8,754 10,003
-------- --------
Total current liabilities 35,726 49,390
Long-term debt less current maturities 11,029 10,951
Other non-current liabilities 1,727 1,739
-------- --------
Total liabilities 48,482 62,080
Minority interest 1,958 2,335
Total stockholders equity 92,982 91,620
-------- --------
Total liabilities and stockholders' equity $143,422 $156,035
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