SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2003
GP Strategies Corporation
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-7234 13-1926739
--------------------------------- --------------- -----------------
(State or other Jurisdiction (Commission (I.R.S. Employer
of Incorporation File Number) Identification No.)
777 Westchester Avenue, White Plains, NY 10604
---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 249-9700
N/A
-------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 12. Results of Operations and Financial Condition.
-------
On March 31, 2003, the Company announced its results for the quarter and
year ended December 31, 2002. The earnings release for the annual and quarterly
periods is attached hereto as an exhibit to the 8-K.
Item 7. Financial Statements and Exhibits.
------
(c) Exhibits
99.1 Earnings release dated March 31, 2003 for the
quarter and year ended December 31, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GP Strategies Corporation
Date: March 31, 2003 BY:
-------------------------------
Scott N. Greenberg
President
( BW)(NY-GP-STRATEGIES)(GPX) GP Strategies Reports Fourth Quarter and
Year End Results and Receipt of Favorable Tax Ruling from the IRS for
Tax Free Spin-off
Business Editors
NEW YORK--(BUSINESS WIRE)--March 31, 2003--
Revolving Credit Debt Reduced by $11.3 Million Since December 2001
GP Strategies Corporation (NYSE: GPX), a global provider of
training, e-Learning solutions, management consulting and engineering
services, today announced results for the quarter and year ended
December 31, 2002.
For the quarter ended December 31, 2002, net sales decreased by
only $.5 million to $36.1 million, as compared to net sales of $36.6
million for the quarter ended September 30, 2002, primarily due to
fewer workdays as a result of holidays in the fourth quarter. Net
sales for the quarter ended December 31, 2002 were $36.1 million as
compared to $42.4 million for the quarter ended December 31, 2001.
For the year ended December 31, 2002, net sales were $152.2
million, as compared to net sales of $186.6 million for the year ended
December 31, 2001. The Company believes that the decline in net sales
was attributable to the continued downturn in the economy which caused
a reduction in net sales from its advanced manufacturing, automotive
and e-Learning customers. However, the decrease in net sales was
partially offset by increased net sales from the Company's Homeland
Defense services and initiatives.
For the quarter ended December 31, 2002, net loss was $1.6 million
or $.10 loss per share as compared to a net loss of $2.3 million or
$.19 loss per share for the fourth quarter of 2001.
Results for the quarter ended December 31, 2002 included a gain on
the sale of marketable securities of $0.6 million offset by investment
and other (loss) income of $1.4 million relating to non-cash equity
losses on the Company's investment in GSE of $1.3 million and equity
losses on other investments. In addition, the Company recorded $.3
million of expenses relating to its tax free spin off, $.3 million
relating to severance expenses, and $.1 million relating to the
Company's recent move of its offices to White Plains, New York.
Jerome I. Feldman, Chairman and CEO, stated, "2002 has been a very
difficult year. The continued downturn in the economy has had a
substantial impact on our customer base. However, despite the current
economic environment, the Company has taken proactive steps to
position itself for the future, including significant cost reductions
and continued debt reduction, which we anticipate will yield results
when the economy improves."
Although net sales decreased in 2002, the Company has made
significant progress in achieving its long-term objectives. The
Company has reduced its debt outstanding under its revolving credit
agreement by approximately 32% to approximately $22.0 million at
December 31, 2002 from approximately $32.3 million at December 31,
2001. The Company has also reduced future annual operating expenses by
over $7 million due to actions taken in the third and fourth quarter
in 2002 in order to improve long-term profitability. In addition, the
Company received a favorable tax ruling from the IRS for the tax-free
spin-off.
Most importantly, the Company has received contracts from new
clients who the Company believes have the potential to become
significant long-term customers. Recent contract awards include
Agilent Technologies, Eli Lilly and Company, IBM and United
Technologies. In addition, the Company has over 20 years of experience
in the area of Homeland Defense and the efforts and initiatives of its
multi-disciplinary team are beginning to yield positive results.
On March 21, 2003, the Company received a favorable tax ruling
from the IRS for the tax-free spin-off of certain of its non-core
assets, including MXL Industries, Inc., into a separate corporation to
be named National Patent Development Corporation. Each holder of the
Company's common stock would receive one share of common stock of
National Patent for each share of Company's common stock held. The
spin-off is still subject to the consent of the Company's lenders and
certain SEC filings.
The Company was not in compliance with certain financial covenants
of its revolving credit agreement based upon the Company's final
results for the quarter ended December 31, 2002. The Company and its
lead bank have agreed to a waiver of compliance of such covenants as
of December 31, 2002, and an amendment which will also contain certain
covenant modifications for future periods. The waiver and amendment
are subject to final documentation.
For the year ended December 31, 2002, net loss was $5.2 million or
$.34 loss per share as compared to a net loss of $0.9 million or $.09
loss per share for the year ended December 31, 2001.
For the year ended December 31, 2002, the Company had a net gain
of $2.3 million from the sale of Millennium Cell shares. In addition,
the Company recorded a credit of $1.2 million to compensation expense
related to a deferred compensation plan. These items were offset by
severance and related expenses of $2.3 million and investment and
other (loss) income of $2.2 million primarily from non-cash equity
losses related to the Company's investment in HMS of $1.4 million and
GSE of $1.2 million and other equity investments. The Company also
recorded charges of approximately $0.7 million relating to financial
and consulting fees and $0.8 million of legal fees relating to the
Company's ongoing litigation against MCI Communications, Systemhouse
and Electronic Data System Corporation, as successor to Systemhouse.
About GP Strategies Corporation
GP Strategies, whose principal operating subsidiary is General
Physics Corporation, is a NYSE listed company (GPX). General Physics
is a global provider of training, e-Learning solutions, management
consulting and engineering 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 Company has scheduled an investor conference call for 3:00
p.m. EST on March 31. The dial-in number for the live conference call
will be 888-423-3280 (612-332-0226 Outside the United States). A
telephone replay of the call will also be available beginning at 6:30
p.m. on March 31. To listen to the replay, dial 800-475-6701
(320-365-3844 outside the United States) and enter access code 680331.
The forward-looking statements contained herein reflect GP Strategies'
management's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements, all of which
are difficult to predict and many of which are beyond the control of
GP Strategies, including, but not limited to, the risk that GP
Strategies will not receive a waiver of compliance with certain
financial covenants from its lenders and those risks and uncertainties
detailed in GP Strategies' periodic reports and registration
statements filed with the Securities and Exchange Commission.
An unaudited comparative summary of GP Strategies Corporation's
consolidated net sales and loss before income taxes and net loss for
the quarters and years ended December 31, 2002 and 2001 is as follows
(in thousands):
Quarter Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Manufacturing & Process $32,146 $37,570 $134,255 $164,361
Information Technology 1,698 2,460 7,982 11,061
Other 2,305 2,407 9,996 11,189
Net Sales $36,149 $42,437 $152,233 $186,611
Quarter Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Sales $36,149 $42,437 $152,233 $186,611
Costs of sales 32,463 37,876 134,768 164,034
Gross margin 3,686 4,561 17,465 22,577
Selling, general and
administrative expenses (5,006) (6,846) (21,210) (21,918)
Interest expense (687) (1,067) (2,770) (4,733)
Investment and other (loss)
income, and
loss on Investments,net (1,445) (947) (2,167) 176
Gains on marketable securities 590 2,818 2,267 4,294
Restructuring reversal 5 568 368 1,174
Loss before income taxes (2,857) (913) (6,047) 1,570
Income tax benefit (expense) 1,248 (1,369) 819 (2,515)
Net loss $(1,609) $(2,282) $ (5,228) $ (945)
Net loss per share:
Basic and diluted $ (0.10) $ (0.19) $ (0.34) $ (0.09)
CONTACT: GP Strategies
Jerome I. Feldman, 914/249-9750
or Scott N. Greenberg, 914/249-9729