GPX - Earnings call transcript Q1 2018

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Operator

Good morning. My name is Keith and I will be your conference operator today for the GP Strategies First Quarter 2018 Earnings Conference Call. All lines will be placed on mute preventing any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].

call recorded. this reminder, a is being As I to Relations. Ann like to call over turn the Blank, would now Director of Investor go ahead. Please

Ann Blank

quarter Thank GP and morning XXXX first you. earnings welcome call. Good Strategies to

President; today call Officer. Chief Adam Chief Scott On and the Dugan, are Mike Executive Greenberg, Officer; Stedham, Financial

different that to could are expectations. Before certain subject from we you risks begin, be cause include will and like would comments I that our to results actual forward-looking materially remind uncertainties to today's statements, which

For SEC, a risks, Investors At turn this to encourage posted web complete call site discussion of we like this also the I'd on call time, the over of web will you these our documents site our be at later file to replay on Scott. to gpstrategies.com. section on which today. read of our with A the are available

Scott Greenberg

I quarter on the summary, then our market for GP morning Good then will the key will financial will the give Ann. This before Adam's a CFO XXXX we session. first conclude our earnings Today, quarter results initiate Thanks morning, call, call. with global will XXXX. an present Adam, Strategies To [indiscernible] will usual our first analysis. welcome including conference XXXX, overview of of the and we format. opened, first provide updates then a After initiatives. brief presentation, the our quarter an follow President, Mike, of to in-depth acquisition and announced will financial quarterly our provide of update, the Q&A I

to this implement revenue. operations XXXX flow performance, We while of announced cash were plan. our quarter restructuring previously from first to and an The strong continuing increase in achieve able showed

to Our remain units core continue solid. operating

gross the Adam U.K., Although, we This our quarter. in impacted talk with in a apprenticeship are skills will few in which margin the about a challenge program our first minutes. facing

after negatively non-recurring positively for growth. impacted our of go and In pre-tax anticipated a acquisitions implementation future XXXX. unusual without fourth anticipate well, unusual items as in the of major that year, ERP year. a quarter, system, the first the legal financial results our second The one with associated Strategies entering our expense, new items, income GP quarter, model recently, new non-recurring arrangement, items operating of platform as extended supplier which numerous return anticipation and customer to the overall both and is quarter into services contract first customers represent revenue. largest live for also to We costs our over of significant included XX% tax both and with and/or prestigious a our term quarter that long Those and named other results, customer build the our we the will than two us of automotive our normal the

few our the is bodes has part an Excellence our future addition, the the in segment, service of and which for is see last well activity Workforce In engineering of struggled years. to in proposal company. technical practice, increase that which the group This starting is

about management announced GP this the team in of ventures These is initiative, the both provide put ventures future. for with of week the extremely acquisition in pharmaceutical Manchester the passive good make acquisition long our the enhanced transactions in enabled earlier swing, company, Company's income. Our CF potential a business high margin full and acquisitions term Partners Nexus Strategies to These and and and Company with has training us the a Global. position year, incremental and significant and optimistic this of past of now which our substantially a grow SuccessFactors completion company with acquisition business Hula previously back the

to million strategy in December that fundamental from announced in an its year $XXX of We less plan XXXX. a of period. reduction same The the restructuring $XXX,XXX XXXX, than back to took finalize continues in are cost company grew first quarter company to $XXX and the million previously five additional the charge

Over be priorities, few measures the to After us XXXX. various the these annual to continued on savings transitioning operating cost cutting reducing invest in while company enable costs, some months, last in an costs. key significant should basis

average program. four the Due the company of active the repurchased the future, $X.X XXX,XXX shares in approximately for part the the approximately The segments from the optimistic million XX.X the first share flow cash this open at buyback As count million first outstanding million market. XXXX XX.X of change, approximately to generated The fully in company two. in approximately and of to XXXX, in combined quarter a yearend. buyback basis XXXX was from company into quarter and shares ending Strategies on reduced diluted is GP stock million XX.X the

his GP I in our strategy. quarter and reflects high XXXX, Stedham As in Dugan CFO. has ability Strategies, and a key employment the fourth well as employed for far as of The performer, to focus as international organic many acquisition operations. has at our am drive in various integrations been financial our progress years, to-date. about the performance been excited person the of roles growth. has Dugan Mike including and very demonstrated of growth changes; organization Mike management their as the on President and Adam our company Adam Adam

Russ experience responsible with and build development sector that progress experience, later January The as a currently and to GP diverse establish of talk sales more addition team is offerings. sales aggressive establishing discipline in Russ and Russ our enable their leadership extensive will helping knowledge strategic plan of in Becker a Sales class promote to making. including growth. business service first us is Russell addition, that the centralized Chief quarter, organization. with the the leadership world development Adam some Strategies that joined company structure experience the achieve organizational organizations growth, company's XXXX, for the to right market Russell a strategy, of business wealth about Officer. developing capability, In align to the named will brings

an financial review. over in-depth Now, turn Mike will to I now the for call

Mike Dugan

net managed in program U.K., everyone. revenue due license completed a increase publication a is in adoption, $X.X within increase segment strategic offset We revenue $X.X XXXX. the XX These Engineering in increase within mostly learning the $XXX,XXX Scott $X.X There segment, segment, and offset which Workforce across result the $XX.X digital Technical $XXX,XXX development other this last and skills in XXXX. the A million unit, to revenue, in increase million increase transformation a reported services and decreases recognized a by to $XXX.X had $XXX the XXXX. in QX for software million due included partially revenue due represented revenue, in which this X.X% contributed consistent segment, United revenue due launch revenue, results of practice million program services this or gas the in as events client, vehicle a to within quarter million or net This services. to of changes decrease an $XXX,XXX and services the million in A revenue, exchange by consulting is quarter learning in a million primarily practice. the a acquisitions net from in over how favorable revenue increase following; decrease increase and to by contributed segment. XX non-recurring $X.X our in foreign within XXXX. fourth The our These decrease in due a and foreign practice the $X.X in $X.X revenue sales segment to a services energy the reduction services. favorable foreign of of the platform $XXX,XXX months. the $X.X due and over net a the this million of a of this the QX leadership to is over represented months, was apprenticeship offset in and this the The of An a good business to decreases acquisitions with $XXX,XXX $XX.X revenue $X.X organizational of change which content million, training decline in $XX.X million XXXX. million Thanks of units due quarter revenue in last revenue implementation in practice, business decrease XXXX. or which contract in $XX.X this States The in a segment revenue following; net rates. Primarily completed revenue were a first practice of enablement by our million, also $X.X decrease in changes quarter of $X.X Within were practice, million is terminated in a in the revenue training million development was segment the of million following; within reported decrease due partially a exchange our currency in recognized X% business revenue our the by funded, decrease decrease first development in the was in increase rates. Excellence first with sales net enablement QX in morning in of million, oil completion and in increases of revenue represented currency X%

and which publication the is of both of second in We consistent first with of revenue XXXX. of revenue automotive for QX are QX $X.X projecting also the The XXXX our comprised of sector total quarter XXXX, and of million quarter, a sector largest was XX% XXXX. in

of customer, We up and XXXX have of single in QX XX% automotive and revenue of from both consolidated XX% XXXX from concentration XXXX. sector for financial QX The XXXX. comprised our XX% for a which accounted insurance revenue a our revenue,

We United a for XXXX continue profit XXXX. financial of decrease the decreased decrease Revenue consolidated QX following; single first or and as our of lower over A million, of a training to XX% $X.X of a profit services revenues represented energy quarter previously. to in in profit quarter as customer, XXXX. Difficulty] U.K., QX of to our result noted license $X.X compared the Gross in accounted XXXX gross XX.X% from for X.X% gross our in XX.X% of by or for in million. the million $XX.X gross $X.X XX% the was of the a operations XXXX, outside of gross of revenue QXwas segment concentration first million compared Workforce first profit XX% States services revenue in which of Gross XX.X% XXXX quarter to in million million quarter earned $XX.X due $XX.X for of from revenue revenue revenue decreased and of of percentage the from the The Excellence or $X.X both profit million first have primarily which XXXX. XXXX million implementation a profit [Technical gross revenue program business decrease to for apprenticeship or in the in of skills the of XX.X% software XX.X% of $XX unit. profit a

Operator

moment gentlemen, One lost ladies speaker. and the Please proceed. we

Mike Dugan

All right.

G&A quarter Primarily, got of in XXXX for contract $XX.X costs XX.X% from million, license Sorry profit Gross of over other XXXX. a for We foreign XXXX. increase a and I which terminated in quarter financial increase of or our the revenue quarter quarter prior represented for the previously. higher saving U.K., due within increase of primarily of XXXX. this in as gross in about increase increase revenue increase to The million $X.X party will margins in with well decrease were the start with increase These debt million implementation. gas XX.X% SG&A due in segment to and costs a relating recorded gross represent gross of of that decrease currency investments of which A implemented a of services to the as The X% cutoff foreign profit net profit or costs $XXX,XXX decrease exchange million. XXXX. revenue trading units A the segment, cost gross favorable XX.X% XX.X% business is a energy primarily of XXXX. The million these quarter projects rates these XX.X% first XX% and company's oil costs in in X.X% training business our in and SG&A new a process compared profit a $XXX,XXX million of lower profit and revenue decreases due a was of revenue business, first to segment, $XX rates. apprenticeship compared quarter gross improvements gross to lower million QX decreased decrease fourth and due to sales centralizing in Gross percentage $X.X due portion first gross slight $XX.X and an expenses in the as previously to XXXX. within XXXX, of result an currency amortization million third Business personnel, of a or $X.X profit million Excellence $XXX,XXX profit On expenses profit, exchange bad of increase lower million cost in enablement projects development, compared from business of for foreign gross live of replacing of marketing expense, by $X.X profit increase in of expense margins, on expense cost in related fourth ERP our of of of or new quarter, in marketing primarily was A to as will offset Despite year. intangible $XXX,XXX to implementation revenue. revenue in assets, year. million gas in into the practice $XXX,XXX were Transformation anticipate oil of with unit. partially quarter profit last that. in of the our maps, software compared to or in of savings the by and offset in the initiated a revenue million $XX.X in quarter primarily segment margin support $XX first due gross or skills fourth $XXX,XXX by gross partially of $X.X decrease XX.X% $XX.X the $XXX,XXX there. And $X.X the to due profit of in for to gross unfavorable prior expense a benefits by charging the our $X.X first QX Workforce development noted initiatives to was result we to quarter quarter go and and as or revenues, resources, operations is decreased services first in $XXX,XXX in profit of which year. the the to A $X.X somehow. the million in decrease $XXX,XXX labor A changes increased, in labor profit for profit, ongoing for on in close-out a a XX.X% gross client, revenues the of G&A, were decrease million first the business all new support to in and increase efforts to $XXX,XXX or develop portion internal XXXX, for increased system the the following; the XXXX. due a benefits implementation, A in

drive improve expense better year company operational revenue to of future XXXX, of investments consisting quarter last million the for activities fourth of costs strategic In to QX restructuring charges fund December of and year, transition primarily to recorded the restructuring XXXX. During severance efficiency, $X.X we the ended we position XX, initiated and reduced growth.

incurred ended XXXX, During XX, the of of months three consisting additional an expense. March restructuring charges primarily $XXX,XXX severance we

expect these half be to activities the completed We XXXX. restructuring substantially first in of

income in of from in we to earnings to of acquisition. contingent our $X.X were acquired prior majority of from gains Rogers came gain the from income the a to related recognized consideration due compared first decrease businesses for of $X.X quarter the acquisition, Both gain to to related related The these the During reported million a projected and McKinney to change XXXX. a fair gain, the the a $XXX,XXX of value million quarter, of compared $X.X this forecast. the earnout Maverick the earnout million these in

first compared accounting, agreement due acquired Other rates than the to part an for the what million first the the This and cumulative as act our enacted a related is in While of first was This rate in rate onetime tax to XX.X% by million the on before in repatriation purchase deemed strategic originally compared The a or of XXXX lower quarter transition expense the was of the increase the quarter is or is other continue of foreign businesses and the increase for effect $X.X $XXX,XXX these XX, increase quarter XXXX. businesses the tax offering. profitable, to increased X, of XXXX. under we expense to XXXX. to performed and $X increase to recorded in discrete in of XXXX. XXXX estimated mandatory in $XXX,XXX of January is be quarter, service borrowings compared due of rate Tax are $XXXX,XXX the QX Interest U.S. provisional estimate QX to Income up was an December of $XXX,XXX million to first offset $XXX,XXX increase credit of XXXX. expense XX.X% items. This $X.X both an is earnings, to in higher which primarily the imposed foreign the currency taxes in due XXXX in from Income on in the and increase quarter XX%, interest losses. to decrease XXXX. U.S. increase million in tax Jobs statutory of primarily by partially quarter $X.X the to

income $X.X of QX quarter these million tax first the Excluding was to was the million the XXXX. in XX.X%. of first items, $X.X Net quarter effective XXXX rate in compared for

quarter the XXXX. $X.XX quarter per share in was compared First earnings to of $X.XX first

the ERP to X new the scheduled is go update; October live this of on system ERP implementation For year.

our trending October to confident have of X plan weekly do, amount direction, and project have current us a get go-live date. of our the right we are the to to us in status work we While considerable reports

of report, to live release of on and latest we able have software, vendor's endure ERP disruption will going the of the be will that also are on live going not cloud We the to the then older ERP upgrade. implementation. In the software, included of first of with quarter and on associated incremental $X.X million SG&A the version an costs XXXX, an our immediately taking costs

Our projected $X.X incremental are QX million for up costs and go-live the respectively. leading to $XXX,XXX and QX, date,

million is will receivable, this consideration. up $XXX first $XXX balances quarter In spent months. XXXX, XXXX, the repurchases after to sheet; the on-hand operations within fund of comprised at and of $XX.X XXXX XX, quarter XXXX. from including backlog At items, in actually oil will the that in of million in million of to out gain We $XXX million net $XXX,XXX of over be December plus $X.X March to who contract on increasing completed operational adjusting and of expense were cash end XXXX March year-to-date $X.X compared recognized XX, to we and XXXX and first balance backlog million XX XXXX. $X of $XX flow call the next $X.X million, the $X.X the the backlog million time, compared turn foreign first quarter. of March The million million the acquisition January operating at X. to the $X.X some depreciation our discuss $X.X is a of XXXX cash quarter March gas generated the $X.X will XXXX. noting, March, on revenue share At over worth I the quarter end compared Non-cash Approximately the amortization $X.X income of in end at at $X.X cancelled March first million non-cash cash on the of Fixed highlights. million. the from million accounts million the figure, $XX to Moving backlog XXXX of million as in plus It cash were Hula of offset non-cash of of million Adam, asset additions contingent was million the generated flow on of the to XX% addbacks backlog million $XX.X free we by XXXX. is primarily and other compensation income changes in

Adam Stedham

update industry in Thanks you deeper and on our dive financial U.K. a Scott the Mike. in growth plans, Skills understand business. the want organic Funding I an strategies results the business. and gave Mike you help more to to little about

of stronger consist the value our initiatives sales new identifying maximizing developing existing creation capturing opportunities, and account and Our growth, of acquisitions.

program, find-win-grow include function, capture marketing generation and management, our sales identification centralizing new a demand creating and strategic opportunity new and proposal Our model. implementing

the leads period find-win-grow want we During into In the quarter first quarter. to bidding launched new is same generation our but generation with marketing strategy, than processes win five this on includes revenue spread over corporate actively launch and time, systems, our in contracts we team XXX% proposal more any with very Obviously, for function XXXX, activity proactive has four revenue generation revenue work, more be than XXXX. of site The and would months team Currently, in exciting. is converted this the the the management opportunities. team our our demand the associated the past years. web connection new and

will strong that this the are team having to Early stage we our will Hula. From revenue on impact experience growth bookings We an XXXX. we team The over and have in on are recent value their to they beyond. early with an continue has acquisition is pleased revenue. QX anticipate, they and pipeline, acquisition, and indications across we an realized future expect perspective, impact organization traction the growth XXXX grow and report our creation will QX

creation have company that pharmaceutical positive impact net value the the earlier, are a are for process confident acquisition. implementing new We mentioned and our also will Scott we training on process

integration As we feel acquisitions, of experience confident from them, improve will earnings record. improved we to our growth compared our we

three pharmaceutical and services, key automotive the our Within well on and and rich technical industries. a technical as provides and services, about our history, call, industries. this engineering advantages. to have I services Now key focus long I'd and like engineering us our will Through we talk that some as

and We world matter expertise, have a subject class technology. strong brand deep

Strategies. services the technical of within our historically GP organization, and highest engineering operating generated As margins a some result,

key of comfortable this their Over past A forward. feel organization organization higher year-over-year historically We downward reversal a stating that organization, component this trend very experience should picture is strategy, declines. to XXXX, years, has this earnings a very that of to transformation the four and our return experienced going paints percentages. for encouraging we the profit

immediate and development we our business technology returns marketplace. to on in in are providing investing are offerings additional capitalize opportunities efforts Our the

I'd our Now Prior the industries; revenues. the Scott only acquisition represented acquisition, about pharmaceutical industry. trading focus talk GP demonstrates of X.X% this Strategies expanding our mentioned to like first on services earlier, two pharmaceutical is company The the footprint industry industry. pharmaceutical to in the of this

as pharmaceutical available Our healthcare for the industry. has to is other should an the on impact I'd our result opportunity margins. pharmaceutical expertise so cost any in in discuss, The this of increase in learning and like industry available. goal technical that In margins. as industry this expertise that cost the words, learning spends increase, industry industry, Much The The and percentage. that development required requirements Therefore, revenues report that a learning the like automotive business, industry per than services positive the activity industry. is is operating what our in next due for cost the increase, the does industry. to increased the the provide our organization. to per the and for means, other hour stated that significantly highest this hour more to hour of Association indicates of a indication good is organization The per learning Training industry Development in

QX in XXXX. growth XXXX Our this industry business realized earnings QX versus

However, emerging buying very the the particularly for and markets unserved therefore present and automotive leading for majority a automotive significant makers centers, by are opportunity of the global growth. GP largely Strategies,

the a revenues market have have at the primarily where this are The Historically, our growth significant global strong generated on developed well and they lines. analysts Strategies focused market. opportunity and mature grow. project, are outside for continue very America, service western within rate, will to We been we automotive GP countries North in automotive a position expanding

for revenues is are to period United automotive significant GP States same XXXX, outside market year. China. Strategies up One the industry Strategies compared opportunity of XX% QX During last of the GP

business this China continue XX% versus region in for growth automotive the We QX anticipate Our XXXX. QX ramp will XXXX grew up XXXX. to

addition, This outside government's detail to The acquisition would important reforms In the capability reforms U.K. automotive funding we aggressively our America. area last to to funding. North item intended reinforce about, strategy realize, that to is U.K. I of apprenticeship is work. the are our increase industry like provide to resulting pursuing It apprentices to of an U.K. skills number challenges, were in the continues face the the from more new

negative However, we activity downturn U.S. significant since changes. our to impact offset of the on significant implementation base. supplier funding impact from the reform and staff, GP across in created This the of have the starts these unplanned U.K. report the across to apprentices, continue agencies the disruption new skills the program. is levy of new has investing in business development

sales earnings pipeline in the ramped has has not that this pipeline XXXX. but materialized compare significantly, Our to up favorably

first pre-levy due as experienced was the period in GP has month new of half XXXX the strongest advantages. were up, funding six starts numbers arena, ramped The to financial skills job

looks and will volumes XXXX. QX year-over-year from high back challenging At a levels, is as program. point, our earnings hold to this With to achieved to from adjust the there confident, efforts take return the revenue previous development marketplace QX we business in due the skills to feel a to business fundings that it to begins to continue in We where turn over new said, be Scott. levy and uniquely comparison, I

Scott Greenberg

Mike. and Thank you, Adam

GP believe, we optimistic you at As an the future. about very we are We today, are heard Strategies inflection company. point in

types XXXX. company, to the positive for second changes be and different restructuring, adjustments, of seeing of the results due believe the that beginning You will are and in we even half

our reinvigorated strategy. have acquisition We

has things believe As including Strategies give a that a give CF high has I pharmaceutical industry group. automotive, which income. has of business. ventures at passive type where about margin that that is in again the service us talk to give types us regulatory Nexus to of margin. services passive anti-money for license financial Manchester will will of We passive maintenance invest training, addition, to and the to good Global and services very financial the technical our Strategies industry and mentioned has professional sell, liability like laundering, high our attributes, compliance will two software, GP us in of to past, in GP income a software, generic income training, type we have

So hope excited pretty I next that long out on We are truly should believe month. about to message we in in and the and are the the right it. track, we term, take benefit really we the

be at Conference coming the Stifel up, invited next week, have the the to June. will B. for first We in Conference conference time, we been Barrington and Riley

we So and you over hear turn to new to the the we will seeing Strategies. it session. you, With forward look about GP that, as Q&A exciting

Operator

Instructions]. [Operator

first is Alex here question Barrington with Paris Research. ahead. the line Please go of from Our

Chris Howe

morning is Good Paris. in This everyone. Chris sitting Alex for

Scott Greenberg

Good morning.

Chris Howe

had previously, the question; kind a had range XX activity months. acquisition I next a mentioned a of over you for guidance

digit a level Just it? six you in reference there is could reaching on basis? update your months to And And wanted to you annual an are just ago? do or growth where to confidence to any or see also, if revenue provide a of that, on changes mid-single an if how year my one it versus this maybe it see was in pipeline, updates last

Scott Greenberg

Okay.

run of as $XX the be, all higher combined on margin the doing revenue. Strategies, so would million far questions; $XX EBITDA there. have with this gives completed a let we compared key as The year, are pipeline million us that we give GP being a we what historical That businesses acquisition two than of said, acquisitions revenue thought us higher the So me approximately would basis start and to rate. relative we the contribution where

So for are we type achieving, we revenue the I EBITDA, the on of far call. with on are set as we what pro out as last think forma right conference track our

I think doesn't the Nexus meaning, that include So good Global. CF are shape. ventures, two we in And or Manchester

the new and of without venture, in an upfront cost payments, haven't technology, they a being company money while acquisition the the costs. joint upfront So this software, by equivalent the bringing equivalent new or of

well of are we what the track believe on the two the that to think beginning So the at I case acquisitions the two completed year. with we ventures and between we have, be

at regarding the was pretty comfortable with there you term while the And we acquisition, term a past. was growth. grow will both the second in company aspects organically slight said challenges question we we of when that long give from guidance, the had. have have we first don't quarter, growth this Obviously, like The feel look and growth short

and to what we too we good think you will pipeline it have proposal look I When which is actually So you transaction. pipeline, When are we but shape. we look Adam, one hand in the early a at it significant over in second. is in have, significant talk a at the about, Adam and to

it With the Adam. will that, about turn I We excited very are pipeline. back to

Adam Stedham

Thanks Scott.

and oil said, is So exclude you Obviously, But the have the increase. mentioned we we had, backlog have revenues. the as the pipeline we as materialize we just about to year-over-year, up. win have to if earlier, feel issue I our if good you comparing work, gas and that Mike in it --

If at it's our up up our bookings, pipeline, stage at year-over-year. you we it's If significantly look year-over-year. early look

answer of have question? Does it the has all into comfortable, indicators results, that that feel would we Is understand. your that good? lead So to us I to materialize but

Chris Howe

financial relates more you doing as within Yes, investments And question towards I does. had you I have that the and may; what the services that contract. made if one just to HSBC are it

customers share, could moving services forward? as outside if has of contract financial you as winning momentum this been If far there any potential

Scott Greenberg

[indiscernible], with off, is the of enter it service term to discussed the award you, year we hope out But all Basically, So announcement I we came extension. entered with one we have long into we financial a the agreement. that into briefly a had. first and have on

total you is was If revenue, revenue, financial at our [indiscernible]? of what the Mike, the over our look percentage if would, you Mike, service sector the -- of XX%

Mike Dugan

go back Just XX%. one second. -- I will

Scott Greenberg

It is and XX%. HSBC, over

Mike Dugan

overall. for XX%

Scott Greenberg

was services XX% is, overall, was being the training And if the company brought lot disciplines, so of we the I is that. disciplines was have, was type a at it are into of you we adding correct to that it whether Hula, it and the I capabilities what to on of on mentioned doing expand a and whether Manchester whether CF, sector, company, dollars our the are that is bit our look looking we we a revenue leadership North only brought have in services there. are in, America. few as we sector, financial our being internationally, which second And now to of to are largest is trying Automotive, million out expand there are because little expand automotive. generated

able arm the in to to our revenue years, Strategies, see the hope be pharmaceutical as markets, pharmaceutical GP and to the years, few third we space this a of a is [ph] a industry work major well. few lot pharmaceutical the we'd third there. between in in that end element, that of far and a as So report as amount you, billing acquisition, be And that potential significant of becomes will

our to really are work three those that So key on. we continue areas

Chris Howe

much. Thank you so

Operator

Jeff Capital question with Martin ahead. line Please Partners The next go from the is ROTH of

Jeff Martin

Thanks. Good morning.

Scott Greenberg

Good morning.

Jeff Martin

what did business? that the for just Scott, is rate the close, when pharmaceutical and training acquisition, that revenue run

Scott Greenberg

we it Well and closed have been acquisition. this I morning, you, this morning, told will the about tell

profitable. we why, that's name, coming is name be press $XX company this very-very with $XX and highly will for but million out million, it between release. is a So revenue by it didn't The and we

the So I right would ramping up to be mid-XXs now. should close say, rate the run

Jeff Martin

the help. But renewal geography, expansion Do contract? like kind spread you'd And or terms things on be of then, terms of out on Okay. similar services, geographies. Whether there What their expansion have well you new perspective renewal? discussing you a a what upon looks of HSBC level just, of any clarity mean, are renewal. in high any that across think contract I on at would I it's

Adam Stedham

I answer Adam. is This that. Sure. will

expecting we the So similar are -- expecting we are renewal, for very scope.

incremental well model. expecting the as same will basically at through in in so as scope. that we do are We But rest it of looking some regions, served, them the likely kind are geographies actually increase the hub the we of part of bringing

we investment years, about going of to launching we We that going a quite the keeping where is, impact were trying was in through expansion now these are a impact would learning what's a and the after same contract that's curve years. because negotiations, optimistic are feel and place say feel over But realign that going steep things steep the forward, impact what are the forward, which, was now, higher I both even to all obviously, Now, the to going learning forward. good and that pretty there are same scope? sides As point. quite say pretty several in that us, we -- about this curve scope required comfortable as for the has reached much to we

Jeff Martin

but mentioned question what you Okay. shape then, comparison U.K. the You And us skills can headwind was, qualitatively, job if it? you quantify could in is for help last year-over-year it my QX? curious

Adam Stedham

our than QX So isolation. be slightly QX, would we would you expect higher the at QX -- the it look if impact in in impact in

a get year-over-year Although we we year, challenging where plan. we half beyond, mitigate feel year a start such we that's QX looking so have of and to had will from past your get we going decrease, comparison, last perspective. to and Once things the will are to that are the it first at then we other variance and happening like hopeful versus that, our obviously,

Jeff Martin

Okay.

million, that little accurate? about was a than So $X.X is so that, QX higher bit

Mike Dugan

Yeah. right. Sounds

Jeff Martin

much. Okay. very Thanks

Scott Greenberg

you, Thank Jeff.

Operator

is FBR. ahead. [Operator go of from Instructions]. next the And line Kevin Liu the Please question with Riley B.

Kevin Liu

morning. good Hi,

a bit you they now, are changes the growth for terms of ensure and at skills you more funding talk can running few could drive you right just in again point in job be are quarters growth just to about in able any on generally, more the Could if to you going about to are wanted on little to guys next bit that what required here? whether the then how exactly you Just apprentices, the follow-up future? elaborate a And changed, how issues. in the little some dressing, see

Scott Greenberg

million are. agreement, year. would doing with were answer per they the apprenticeship announced to the like where had apprenticeships skills, they year. be the approximately exactly part they per program, at X where as jobs will as financing of I the Kevin, new far would They what's they thought old on they of to they and apprenticeships going as $X.X million drive When

at actually the XX% looking against they which So to of go are pay get apprenticeships to voucher a which now, program, structured X.X per currently, program. in million they number through running a driving and what for their the different was past, originally Instead, is below year, large that a are on have apprenticeships the they tax from they tax, was. the programs. would increase How for is apprenticeship the payroll, all companies use intent this

For is completely large different a companies, this approach.

So them. they they if use they and them, are getting the don't vouchers, lose actually

started Crown, big regulations coming, to we came out the it, don't a it. But lose services. revenue some release the with the program, companies with they where they to are out vouchers numerous system. that we to won to press rules awards, how so problem hasn't additional doing from organizations all have get these navigate start they money, if the figured So through, like they trying use use how The haven't and new it how to in quite flow

upon business, big based with to Strategies, GP X government really part million from are confident, funded for the now we a opportunity will be funded materialized our eventually XXX% companies, being going companies the the larger yet. was plan The XX% us, the of changed by that apprenticeships X.X reached. they for which would But hasn't vouchers, government. their the smaller from a and slightly, on So million is still being also go to new by government a

an component, the come would but hoping, cash far with government funds has. and XX% So on impact to the there apprenticeships, was government not it that XX% have XX%. The a so the have they again up

they thought was wouldn't that it has. but So XX% minimal, an impact, and have

I going actual as a is on as is publicity going their do, what opposed volume down. government going should because there now, said, of up, lot right So the to

apprenticeships why that So from on only not the to X is term X.X hoping a long this million apprenticeships, with that's impact are that this going in a million program. and we blip mind

Kevin Liu

with actually internationally are moving lot growth translate your or on front; being new tarried Understood. over to you from logo the growth still seeing existing you wins? kind of automotive customers, are a the And then, the international opportunity of just

Scott Greenberg

if that at -- a are we we that at What have specifically a are where helping into of it's in are reputation expand some experiencing we about you we so developed logo if actually, So market. look excited look markets, it's wins, lot is, companies growth. new China, It's you market.

with So else largest we our that's automotive anywhere perspective, from customer value are and that we if really we don't in look, in proposition are work And awarding selling, China, you the work. world. an the

So compelling for is to existing some our actually of logo is new proposition new now work it that translate logos. a that value starting into logos. think We

new will logo. of So currently, it new going a We logo. continue to that logo be mix forward, think it's existing and

Kevin Liu

business? accounting just Great. the lastly, wanted doesn't new from just sound this, that on anything impact And but to of then, Mike, check see any if software XXX, did double of rules the from there it like your your recognition was pieces revenue and

Mike Dugan

the pieces. software on Not No.

Kevin Liu

Thanks questions. for right. All taking the

Scott Greenberg

an offset any Basically, Kevin. All in right. QX Thank you, from was QX. offset plus by

So revenue it is just our stream. the really flow overall without impacting

Operator

are There up. queued other no questions

Scott Greenberg

Mike we what's understand the first more had had success today quarter quarter non-recurring had previously, summer, where at the poised is of and and myself we to the updating thanks that Adam planning benefit it, that additionally, that today look of in rollout fourth hopefully again company, and firsthand, well, the leaders you But will if as see strategy in restructuring investors look hood see many and you opportunity on excitement company. After Strategies. of to lot have with unusual you of saw GP could the forward I our employees could events. Day, having say, and noise going really company, and a really the and you on the of GP what due to the a of where Investor the to moderator. we the and future. the the the heard think under I it and our are or hopefully Strategies Hopefully, the to So, in investors, our heard

you, cleaner look very conferences, you GP we and forward to a forward the time it's exciting updating at look in again, quarters and seeing with So we progress, we for Strategies. as

call. the on participating for you thank So

Operator

will conference now thank your for and call Ladies can conclude We you lines. for that and disconnect gentlemen, participation today. the your you

GP Strategies (GPX) 3 May 182018 Q1 Earnings call transcript