GPX - Earnings call transcript Q3 2019

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Operator

Good morning, and welcome to the GP Strategies Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Ann Blank, Vice President of Investor Relations. Please go ahead.

Ann Blank

Thank you. welcome Strategies and Earnings Quarter everyone, Call. morning, to Third GP XXXX Good

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

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

of we which encourage file a posted be slides you Investors website. our for read webcast these that website XX complete section For section on also SEC, discussion our at on presented The replay Investors being with page call. the are today risks, today's the quarterly the website gpstrategies.com. are will are the of available available of on documents days our our of on to following of A this releases earnings

over At the turn this CEO, call our I'd Greenberg. like time, to Scott to

Scott Greenberg

XXXX our Good Ann. you, Thank Quarter morning, Call. welcome to third earnings and Conference

Today, we to which format, WebEx quarterly include our a will presentation. will use continue

Q&A President, then initiatives analysis, global I third GP then this our of opportunities. find of your the After will analysis brief call, To CFO, for on provide initiate useful the results a with Adam's session. the our in on financial organic you'll provide informative I updates our overview key concluding and presentation, Adam, the will present Mike focus a revenue Hopefully, a with will summary growth Dugan, strategies. summary, give will a quarter;

of GP third XXXX. Strategies before announced morning, results quarter opened, This the market the for

our to of million increase sheet. in have both increase significant XXXX, in progress business and in a the In adjusted addition realizing both quarter strengthening revenue efforts and development to a our in balance made we third XX% $XX.X EBITDA XX%

$XXX.X compared generated of debt operating June of to XX, million XXXX, million after XXXX. quarter, $XX.X net as $XX.X million cash September was position, our company cash, as of to of for and flow subtracting reduced The

I'm our $XXX.X – million addition was In sorry, reduction to.

debt. company program further XX months has revenue to sold had company addition million. net October In attribute cash revenue its considered an is its annual the these The service businesses, recurring which used XXX companies that of reduce approximately We approximately the proceeds positive our XX% of management A XXXX, over XXX Global tuition company million $XX is basis. net currently of for clients. have as our $X.X of to trailing on

I by said, making increasing in global our that footprint. we turn the share call to over leveraging are inroads positive will both new winning wallet With now customers being and Adam.

Adam Stedham

Scott. you, an almost and we to the of I'd fourth we're halfway have XXXX. Thank like the point, business. quarter by of through providing At into this XXXX start visibility overview

minute strategy X% a growth Day, Now leveraging raise cash have of take is growth year this, accretive do overall that elaborate now during driving and mid-single-digit it organic flow acquisitions. year, may deliver say as our And our expect I as make our on per to optimism. questions, like to I'd organic discussed in last growth well by free I key some We XXXX. generation as we Investor to to realize additional to

client in what we of X% believe XXXX, currency businesses decrease we XXXX. of XXXX, has acquired for onetime be our divested as multiyear approximately that growth as outsourcing GP revenue single revenue and was well of first results foreign organic the Excluding impact from a in delivered the revenue with months the were Strategies – impacted our largest by to but what in client nine

with year-to-date baseline settled impact than a with XXXX. agreement. level this of anticipate has XX% a in XXXX do this it lower and client. this into from decrease in ultimately agreement We the resulted client currency, revenue in decrease This, a with in The prior was not our renewed has combined year-over-year

Now client level, will be other success our at more areas development visible. in business in stabilizes that once this

So looking forward, XXXX. we do believe we're for growth on track in

you details to about sales our like some with processes. and I'd Now development business share more

is backlog pipeline creation the is $XXX management, in increase the and third compared is Through second have than development represents first we months the XXXX. generation The which a open first business then XX% to of stage XXXX, nine stage of process. pipeline the revenue greater million stage sales over opportunities,

a pipeline during $XXX closed increase opportunities We've XXXX. of new is XX% versus year-on-year XXXX, million this from which

In current $XXX of backlog of history backlog the is the addition to company. the growth, the in pipeline million the highest

the shift compared segments like the Engineering to for our segment practice. review up year. same third the to which both Workforce & includes the Managed Technical at in first last results the to and quarter. practice So segment, And now services conversation The Learning quarter looking a our the Service bit X.X% was revenue I'd the in period Excellence

QX Engineering revenue due was our business completions doing alternative in the versus the Puerto XXXX, Technical practice to work primarily and recovery in Rico. services Now & project down X.X% fuels we're Service in

new project and last for up. ramping in progressing announced the this is practice large But aerospace well a our we on call, contract sector. This

this as our in during the contract to other practice expect organic XXXX. well We drive as year-on-year opportunities growth

versus outsourcing shown announced The wins. has of up multiyear in Our X.X%. reflects Managed contract growth Learning ramp increasing revenue increase XXXX Services XXXX, strong the previously the practice QX

UK year-on-year In on believe constant is XXXX. skills growth we continued addition, this that and for in delivered a growth at the quarter of to for track compared business business job XXXX, the currency XX%

in outsourcing the consider evaluating greater training that main is to Services factor So Managed when marketplace. activity Learning seeing we're the

to grown discuss opposed Learning is excess Managed I but outlook, have important to the years. when practice. in of our more XXXX this this as I'll in discuss trend opportunities Services previous XXXX Our and

the organizational our transformation now enablement the like practice. So practice and includes shift to the sales I'd conversation to segment, development that business

due to of were publication increases organic automotive by mailing primarily last compared offset the XX% training. delivered up due growth by in contribution to revenue and publication's of a segment to in third sales a the XX%, shift in of that the quarter some practice TTi magazine During enablement These XXXX, year. was decline of timing revenue sales this increases driven

business Going business forward, improved automotive the forma generate the margins, our for to and continues line the expectations, rest revenue gross of pro XXXX. exceed to services with acquisition our in we TTi expect

turning down the organizational was Now in and QX of to development year-over-year. practice. year-to-date XXXX, Revenue is versus roughly XXXX revenue flat our X%

XX.X% streams. higher-margin $X.X result of and focusing and certain However, and the the partially revenue has increased of parts by margins of gross decline year-to-date profit improved to profitability This discontinuing XX.X% improvement from business a gross is strategy had our year-over-year. revenue on our million

the Find, will Grow that Win, throughout drive model our this we earnings as revenue practice, we're complete rollout in sales in addition, confident growth of and XXXX. In this strategy

outlook discuss the for forward. GP Strategies to Next, going I'd like overall

of During XXXX, first were that bulk this but multiple the to the half did the financial ramped won QX. the back in through the year, XXXX until not company of half contribution contracts of up the have begin

XXXX, into multiyear expect across year. forward contribute of from revenues to all the quarters we awards the four those Looking

revenue or translate multiyear by significant for As $XX closer contracts of proposal we into value. dollar managed get for opportunities already larger, year, been The and contract it the particularly combined will in to We're of a per believe actively be time, alone contracts. last outsourcing activity services to seven we're opportunities increase for larger revenue other in company. this are and encouraged million increase one year-end, for request similar pursuing to one selected million this these we've equal At contracts year. experiencing

for pursuing. we're opportunities, currently So pipeline several large We onetime company. believe the projects multiyear in addition long-term that are strong growth full and drive there to that this these will

Now of base. our our calls, discussed wallet on goal of expanding we previous existing share within customer

annual we've prioritized clients for activities XXXX. for our account execute We strategic we this forward. will and XX from to will of be on this key client key analyzed And group These continue approximately and clients X/X revenue. Growth metric report track part key this GP a strategy. of within that XX moving for account planning Strategies XXXX,

of client XXXX. Currently, automotive double-digit versus these to strategy, target single-digit in this at we area high an expect and XXXX business continues XXXX. the us, deliver, this area growth In to of industry growth least, focus we high-value within with for to XX key of in expect conjunction group be clients see

multi business. industry I incremental to both earlier, mentioned a in driver expect the be and multibillion-dollar the growth of that automotive year, clients contract wins, the We key XX

we beyond as near business this XXXX, the overall, end driving and we're So and value. confident that XXXX of grow shareholder in long-term will

financials to call now to in more turn review So I'd company's the detail. like Mike to over the

Mike Dugan

year. is morning, XX.X% of million presentation. the Thanks, reported of profit million, from Slide reported everyone. QX of $XXX of million with $XXX.X Starting X up on revenue gross and in QX good last $XX.X Adam, revenue revenue QX We or the which and

by practice development QX net a up MLS $X.X the of X.X% also of the disaster decrease, million, the from revenue decline to a training development recently this announced these outsourcing is break due for million, primarily net offsetting MLS million XXXX. practice $X.X million our Excellence a million decline experienced alternative increase the QX revenue segment, a our To in $X.X was by $XX.X a product decrease in segment in a Workforce million wins revenue recovery services to net primarily and due of The the contract increases, $X.X services from the out reported line. and new contributed Within increase or $X.X revenue, business and a services in primarily which skills increase vocational million to projects million revenue in Partially UK contracts. reported training content due decline and fuels $X.X a energy government. There content ETS to in due $X.X provided segment.

currency this reported QX Business changes from revenue the QX The million exchange is XXXX. of segment due reported there $XX.X or revenue million, million in foreign was XX.X% revenue in $X.X a which Within to rates. decrease up transformation Services of $XX.X in segment,

Global due training contributed segment, and the sales completed largely vehicle sales an in due revenue the related million, net Europe events which training million acquisitions, $XX.X practice enablement primarily in to were automotive XXXX TTi of in to TTi to increase a services, and increase launch $XX.X in a increase the new million $X.X increase and services. a Within technical

in the timing of fall shipment Partially $X.X a due decline to revenue the million of these publication. offsetting publication was XXXX increases

quarter there quarter of The this And rates. decrease foreign organizational with exchange third XXXX. a within the consistent segment, XXXX currency to for was $X.X changes revenue due in third revenue development million in practice was of

last in $X.X in being The XXXX, QX less XXXX This publication of in a publication enablement fall of practice to QX. million, revenue top the sales $X.X in million in QX shipped was decline entire portion year. versus which fall pub shipped the of year was recorded in the QX due revenue this was than the

be to million million XXXX are of of XXXX. compared to QX $X.X $X.X We revenue publication projecting in QX in

we Gross reported of million, In QX of quarter, severance QX of up year. profit XX.X% or gross gross terms reported $X.X $XX.X margin, of in profit, the of from last XXXX. versus profit gross QX million $XX.X million which in $X in excluding XX.X% XX.X% million of was the is

gross XX.X% or increases Excellence Excellence to The an XXXX. of revenue the profit of in noted. increase which the in $X.X Workforce compared X.X% segment revenue, for primary the The million $XX.X million Workforce the revenue are $XX.X increase or profit gross is driver segment gross reported of QX XX.X% or previously of million QX of of of profit

compared of Services $X.X million or of for revenue, $X.X profit of of of the million XX.X% $X.X The QX million business to revenue reported QX or increase of XXXX. XX.X% is segment which gross XX.X% or Transformation an profit gross

Gross practice and by acquisition OD TTi gross gross were contributed margins improved our segment primarily to profit the profit this in the increases due in

our to upon million are and profit. running revenue X, $XX.X or severance, at year-to-date the Gross the excluding revenue last XX.X% margins, touch company. highlights up year. year-to-date year-to-date and versus on some Moving Year-to-date Slide XX.X% To was XX.X%. XXXX for improving gross

the further business, forward in Looking percent. see with improvement the TTi with gross of we to margin rest being bring XXXX, gross margins our areas the focus of one should line to in

growth is organic at X.X%. Year-to-date

is growth last Day the Investor rate of yet X.X%. the that XXXX this a to at trend the revenue organic quarter, at our each of the has for so been rate the targeted year we over growth prior negative growth announced not has the slipped quarter. While organic increase rate seen has positive year-to-date XXXX increase of XXXX year-to-date X% from trend and improving a quarter Each organic year, positive

As achieving pipeline backlog we to strong support organic trend to continue proposal would forward, our the our move look contract and growth targeted towards rate.

business impact of the QX, help recently been projections, revenue it divested. the tuition divestiture was $X.X QX with the million this Finally, revenue calibrate projected to announced on business not roughly had in of our to contribute

acquisition; $X SG&A million in due our amortization the expenses to financial expenses primary a to are XX.X% expense QX million included The drivers labor a capitalized internal in are XX. in XXXX, million G&A, were administrative increase General from costs of of and are: Moving in including connection million up TTi or in but $X on with G&A system increase XXXX. XXXX. from implementation Slide QX $XX.X the that, on in $X.X

was funds. delays There bureaucratic to AR project million committed on FEMA along increase with related Rico with FEMA, payment is Maria $X.X to and through to Puerto release related past other funded the expense, GP, also FEMA-backed in This to Rico is a project bad debt Puerto recovery similar delay in due recovery the in Hurricane to every a services due experiencing efforts. a disaster within majority of supplier

expect under reserve payment contract a of the once removed, we've policy, past our under is full this AR. portion bureaucratic we for taken reserve this logjam While a due

Lastly, there $X.X a million increase expenses. other G&A in was

Sales investment the in account sales of development who the marketing management XXXX. business primarily some inside expenses reported centralization previously up due cost of QX $X.X team, our in in were revenue were million to and of in quarter-over-quarter, and personnel,

$X.X the restructuring related Interest TTi other in reorganization which up credit higher to the business, integration our We've we licensing with million is improvement due charges XXXX in to year-to-date associated initiatives. on divested under primarily a Other which in due XX. expense with incurred million a and in XXXX. the to facility. the P&L with $X.X $X.X for year-to-date, $X.X to royalty connection quarter on savings of for disposal million on $X.X of a interest a income Moving loss the compared gain rates is had and $X the quarter, product borrowings million Slide prior had to related on cost items QX of million associated million

the year-end due As reported projecting note, rate accounting instead tax license gross royalty a for to XX%, profit. are accounting with income effective a business, year-to-date we divested XX%. The rate and associated tax rules was the was other income the of in of

$X.XX the EBITDA versus $X.XX to EPS Slide million summary XX. reported of $X.X and was on $X.XX. Adjusted the QX QX last million of year for Moving QX for for for of QX income on We $X.X quarter net was earnings million EPS adjusted last for versus of year. $XX.X and

sheet $XXX.X million of year December from revenue which of on cash $XX.X million Moving to Operating flow was down of highlights. Unbilled and cash Slide XX Debt of QX for is the and end the million million. XXXX improvement was from $X.X is some of at and balance $X.X QX was for QX from XXXX. an QX XXXX. $XX.X million $XX.X million, net

recent us. area new the I'm our pleased with the report With are on delay This $X.X be impact behind of system this where now AR is associated of XXXX. up system that million in is financial December new in showing sheet. surge balance last from the to up financial the the is able to billings billings,

at net During on of number. our our and billings QX, with for the generated will recent is proceeds surge of the continued million operations, we sale the stands that to from debt cash. ensuring $XX.X business September down of X, from which an converts be as in cash update November focused from tuition $XX.X the And cash million,

million, $XX.X to on at compared of XXXX $XXX.X to Backlog QX or million which XX. of backlog was backlog of up million XXXX. the of is QX Turning $XXX.X Page as XX%

million is up $XX.X of Excluding QX XXXX. over XX.X% or of backlog $XX.X the our million, backlog TTi

out some point of beyond with funded increase during the XX backlog performance quarter this of would period relates to in that I contracts a months.

stated note, include which typically still does that With funding projects contracts backlog that as that XX only not calls, term, our each on to amount, multiyear expect being months. be backlog go important year, do the we've are we recognized revenue of the as XX or approximately months. prior that also funded XX% definitized will It's beyond within said, long next in

I'll concludes the financial back turn call Scott. to This the update. now

Scott Greenberg

We revenue strategic three, organic initiatives: Thank you, Adam. completing one, our implementation. growth; our Mike entered ERP balance and two, with sheet; three strengthening XXXX

and these has made today, As adjustments. significant forward pro GP trademark In to of been that initiatives to XXXX. return progress all you've past. a without heard we've on look the key statements to clean forma an Strategies all the improved the in we hope XXXX, pristine And

With it Q&A to turn the you. I'll that, session. Thank over

Operator

question First Roth from Instructions] [Operator Jeff Martin, Partners. Capital comes

Jeff Martin

to correctly, that item. clarify. all the was guess that margin but severance this just $X cost – the I gross in caught in the I The And quarter, sales did wanted that, was thought right? of I XX.X%, that I million is excluding

Mike Dugan

Yes, that's correct.

Jeff Martin

kind Okay. there that margin for brought going And is quarter? level a is normal that of number that the forward? Or up some fluctuation

Mike Dugan

When you the say severance level, normal or gross profit? just normal

Jeff Martin

think in The margin I something people are keying on? That's level.

Scott Greenberg

Yes.

are I a within think we improved profit bandwidth expecting margins. that gross

know I we margins but improved if the exact don't gross XXXX. So are level, this expecting in is

Jeff Martin

you And where on what can to along initiative specific be, far margin you to? those improvement's expect bought you where then to How it get you a be is on you the in currently? are it maybe as could TTi, Okay. if Where big It? them margin well. you getting margins And was there when think

Scott Greenberg

on margin now, margin right we thought And gross gave XX%. bought could the right now, profit is we approximately first do. when we what TTi, EBITDA guidance So some we our –

almost to like large venture like to per which us talk a or talk type with to range. in is is approximately the though, in we're will where we will put I on that, investing a to one it's about of XX%, company get goal to thing XX% quarter Our The currently. it a and major joint working program initiative automobile to addition are $XXX,XXX would

Jeff Martin

XX something initiative. kind that this approach to a underlying the that has Is come about new of And strategy? year? on then Okay. that And is Is what strategy? your client key this

Adam Stedham

a So expansion it's strategy. historical of an

success refinement. business to said, operating this year, of for increase we're us of is XX we a to wallet. through is little articulate and our to into our subgroup this, wallet. Going have a measure gone meaningful expanded XX looked the share we key a that to we've of that increasing looking a goal and bit that at of allows What We've rationalize share as clients. at The

So number, XX this an we're report on record us helps business plus to we're to share strategy. report and growth key wallet, that we'll able our as it, understanding track of and that, able give able of guide to our increases be our development it of investors

Jeff Martin

could maybe And on is XXXX for how skills acceleration a market, that's see provide then the to an And Okay. give growth you update outlook you there? Are of the what sense of job there? us expecting and trending?

Adam Stedham

acceleration to the We to we that expect growth, been continue see of don't at to expect year. same this grow it see an but growing it's rate to

quarter-versus-quarter, we're and that in breakover a the past now we're So point positive situation.

We this be next beyond forward expect And at that. going to point, positive throughout quarter-versus-quarter year.

Scott Greenberg

we And add that, and company, training their changed one the is funding model this the provider the when type of of service. co-pay, to Jeff, skills thing to XXX% small were required

company system, and XX% XX% With company. now the approximately small the large changes we're in voucher

these GP of become model really our customer. a that provider companies to strategies to type services pivoted the typical really of we've So are

Operator

Our comes Paris, Alex next Barrington Research. from question

Chris Howe

This for is Alex. in Chris sitting Howe

previous customer up First, question large the on just on your or comments for automotive TTi. the following

customer should quarter. a that's is would require And just Can large with are investment you the this it you the mentioned this similar per required be specific? comment where the Or in firm You there another investment? pipeline, automotive customer, line? time on

Scott Greenberg

about very we're off, the we automotive sector. start to where are So in excited

it's you XX% at look of revenue. overall If approximately our Strategies GP business today,

where TTi of manufacturers global a has We in are GP entity as just and the now training had GP us sales has these been inroads Strategies Strategies technical well. currently of XX training, gives ability the which the with companies on and of not dealing services largest historically the basis, to but deliver lot world combined but a automobile

doing, end entered I into we would unique supplier this we'll a customer more a customer this the elsewhere. really top program what fourth top granularity is is believe this that be – quarter, who unique we're At seeing into a of you to but be one it of actually and the program is shouldn't Strategies. GP to XX give

Adam Stedham

has significant They're our feel supplier there's increase largest that second with them. and we automotive an opportunity

strategy. what's that's So driving the

Chris Howe

appreciate this That's on just growth we're towards. the that to rate And moving great. X% I color. moving organic

some on won basis, you're you gets to automotive segment large the customer, comment already organic rate? a different of the specifically, on more aerospace. shared what you organic You growth that the kind contract beyond you a level in projections drivers on what segment-level addition growth in Can insights seeing you towards are that that just Or you've mentioned expecting perhaps basis?

Adam Stedham

So things the to you go through mentioned.

in for So mentioned. that primarily heavily QX, in we This year, weighted $X you more contribute contract aerospace less QX. revenue, than the QX, contract expect towards example, will million that

that be Next $X of million revenue. north year, in contract should same

there in Services have perspective Learning QX, That from contracts to QX our ramp-up growth that run Managed that. those baseline versus and look on On you contract, Learning of Managed on have contracts just a into you QX continue the baseline. year right and is top next that, Services a same year. if So in QX the a to contributed of going certain at your at

into year independent elevated baseline year next of generation. at an sales deals QX So level. versus contracts of revenue in a from perspective, and this those That's QX, that pipeline of any put QX will of materialize versus of comparison whether QX the year our year, us

is, sales win long it cycles. on a short important that cycles the we of introduced We cycles, revenue the a for – and while sales call concept previous them, sales point takes up. The ramp long to we an and to

our year year. success growth of half new we in process year. On that, those the the year, as during has it next versus revenue support the the half this up, So the contribute sales next of top of in in wins this revenue then have now first growth to would sales ramped QX that of should second

So the growth materialize. we that's how will anticipate organic

Chris Howe

That's that increase think your of how me to another cycle And about should sales short very you're backlog, helpful. backlog long? it question. terms versus we seeing, led the The in

Adam Stedham

as period it of increase seen of execute quarters. customers outlook material time, given have that, little against, a you – we indicator indication would Mike couple a way generate give more some a say, – doesn't although over bit that direct a a improved from which view I we jobs coming backlog not little revenue funded is backlog in and incoming have we revenues shift the So backlog, mentioned we year. that have of It's business in overall. a backlog projects that, than in general, an have on of of then to any and definitely improved the

Operator

[Operator Our Riley comes B. next Zach from question FBR. from Cummins Instructions]

Zach Cummins

right the partnership of the base? around sale to the services tuition that a with their detail opportunity announced customer Horizons, more sort now? within to to I'm interested a really Is get with strategic question there Horizons trying business management any the you on sell on bright little your had quick overlap you more of just potential customer so Bright just I have them.

Adam Stedham

one drove That's this of significant there's potential overlap. customer the of partnership. things that spirit really So the actually,

purchased and been you tuition has at training historically, within those our if the resources. together, work business look you department human business, look our you at by at our tuition If and three Bright Horizons, combine if benefits look

we've And department into success training we've had we've doing been And – then the some resources. within at human cross-sold that.

us, With multiples than to work more business that us. said, tuition more does Horizons benefits Bright multiples

large you their human of just these the if penetration their our at significantly broader because inside customers, departments it's deeper size the look So firm. of penetration than resources and of of

– So customer for base into forum their had they just to their cross-sell us the that recently. I attended ability customer

to introductions for to all is, come that they're training Likewise, these get of in. for we with cross-selling departments, of into these have the So the training departments. able relationships human as them benefit resource we're looking side

there All well. to job of is as that last Horizons Bright said, addition UK UK in business in skills between synergy is, our the and piece business that the potential

optimistic do go-to-market each – to with we So are a strategy. in we cross-selling and other of work this about partnering strategy

Zach Cummins

And really year-over-year Adam, a mentioned decline of Understood. larger XX% this the expectations outsourcing around this detail. we that That's more of helpful kind provide decline this you detail potentially with you forward? or year little there customers year. a that go reverse should as one and your that was Can moderate

Adam Stedham

Sure, sure.

So our two Both major in renew They the renewal up if comprised to XX% as we our Strategies with largest those total contracts go revenue XXXX, a company. over GP point of same for year. of was outsourcing customers. emphasis came back for a in of

going forward locked the go our did to substantial of in critical those to base a to renewals. we and was along that mentioned with it win revenue strategy So We Scott win year-versus-year of earlier. both XXXX renewals a renewals in

said, those in rebaseline one which customer, largest services. that of the some customers, of With a our new contract was involves XXXX

down went in services those So contract. the new

large pound. that percentage generated financial of a In revenues addition, services in customer are the for

contributed has and downturn. that thirdly, pressures to that cost we of partnering then to particular So with. deal customer is that constraints pound the some are experiencing now right with the them And devaluing cost

All in of has that decline to contributed this year. year-versus-year the

enable Now had relationship long-term at them to savings this cost with customer, through a we've with partnering XXXX, helping successful looking us.

XXXX. them help strategy negative with our XXXX, pound year, in in because with savings meet to of occur, this cost the we targets had impact as us believe it's the have by engaging better the same anticipating a to engaging although speed the downturn we not them their savings been that which way at well And as

not XXXX. XXXX experienced versus that of XXXX, All in combines a versus anticipating to together in way XXXX we're currently decline the say, we

Zach Cummins

deals? that Adam, talk have opportunities Understood. then, the end feeling discussing a point Can contracts? And about these you And coming the helpful opportunities as be at were of potential when these here your you're positioning in potential of getting the you well year. should large That's the both up those lot on context. to we decision as how multiyear you kind onetime about of

Adam Stedham

good. bidding number pursuing year, saw two ramp and XXXX, see have over We the opportunity now, Right sheer feel on we of down. at ramp XXXX, that that if the earlier, is, we during available were had be as Last good we're I in we year. that. XXXX, we just deals were up deals One QX our of feel challenges would selling one a annual for one look This number up the of that gone XXXX, was of year, reasons. a our that. cycles, budget mentioned So $XX we season you of million

We that a size be the not number second the encouraged would to deals of say million have deals we're pursuing those, It's that of we're we win the the to we'll that by year. and $X a now the but bid have over opportunity opportunity on.

even Previously, if if for rate, a number us. of deals, challenging limited a very there it success high we was it makes had

of that, earnings a year. So And successes as lot did having in of improvement last to in will QX the as our an year, hoping year, win at our well QX in last did same we that of rate happened increased number of we're the an call beginning of this we from year. announced translate that our experience deals improvement we QX as

our anticipate we would would updates our on rates. on pipeline this be success and decisions give you would We we able much to call of have earnings next

Zach Cummins

Scott, just helpful. final Great. one That's And question. then,

program to management bright tuition your of sale Horizons. the With

the cash sort that provide sheet. you So you're further of million into the context ratio get any strengthen in leverage year-end? Can targeting by balance you $XX that to

Scott Greenberg

and leverage historically, much Well, a two potentially we feel not more getting comfortable ratio X.X. year-end, but to with below

year-end. to GP. going be at historic to predict the we're that's where hard So It's

As net of November position today, has discussed Mike the at end improved. the cash

to we gave we where insight some you So are.

in big a the were right that's in where second from the step So direction quarter. we

on. we'll But right So we're continue track. we're I really, to comfortable feel starting think, on and the

Operator

our Greenberg to turn remarks. concludes This back session. over closing conference for question-and-answer any like I'd Scott to the

Scott Greenberg

we'll far the you a today. participating year-end the you, of simple Hopefully, Thank give QX. both made you and amount It's really from that for and on so a in saw was moderator. when thank significant you our update closing QX progress results. in we close And call, presentations we our

you very much. thank So

Operator

attending for has now you Thank Conference today's presentation. concluded.

You now may disconnect.

GP Strategies (GPX) 9 Nov 192019 Q3 Earnings call transcript