GP Strategies Reports Third Quarter 2009 Financial Results

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ELKRIDGE, Md.--(Business Wire)--
GP Strategies Corporation (NYSE:GPX), a globalprovider of training, e-Learning
solutions, management consulting, engineering and technicalservices through its
principal operating subsidiary General Physics Corporation, today reported
financial results for the third quarter ended September 30, 2009.

Revenue for the third quarter of 2009 was $54.1 million compared to $66.0
million for the third quarter of 2008 and $53.8 million for the second quarter
of 2009. Gross profit was $8.9 million, or 16.4% of revenue, for the third
quarter of 2009 compared to $10.1 million, or 15.3% of revenue, for the same
period in 2008. Operating income was $3.7 million for the third quarter of 2009
compared to $5.0 million for the third quarter of 2008, and consistent with
second quarter 2009 operating income of $3.7 million. EBITDA for the third
quarter of 2009 was $4.5 million compared to $6.0 million for the third quarter
of 2008. Net income was $2.0 million for the third quarter of 2009, or $0.13 per
diluted share, compared to net income of $2.9 million for the third quarter of
2008, or $0.18 per diluted share.

"I am pleased with our strong performance in the third quarter, which allowed us
to continue investing in strategic initiatives, open a new office in Bellevue,
Washington to support our expanding work in the global software industry and
continue our global acquisition program with Milsom Industrial Designs,"
commented Scott N. Greenberg, Chief Executive Officer of GP Strategies. "Our
EBITDA and gross profit in the quarter clearly demonstrate that we have
substantially mitigated the effects of the economic downturn. We believe that
our business model gives us the flexibility to capitalize on opportunities as
they arise, as demonstrated by recent wins in the software, technology and
pharmaceutical sectors, and to provide award-winning services, which were
recognized recently by an award to us from Chief Learning Officer magazine and
to our customer from American Society of Training & Development. GP Strategies
is positioned to capture new customers, continue to fund organic growth and
execute on strategic acquisitions to enhance shareholder value. We are building
a strong platform and are very excited about our future."

Balance Sheet and Cash Flow Highlights

As of September 30, 2009, the Company had cash and cash equivalents of $4.1
million compared to $4.0 million as of December 31, 2008. The Company had $1.3
million of short-term borrowings outstanding and $21.5 million of available
borrowings under its revolving credit facility as of September 30, 2009. Cash
provided by operating activities was $10.1 million for the nine months ended
September 30, 2009. As of October 30, 2009, the Company had approximately $7.9
million of cash and cash equivalents and no borrowings outstanding under its
revolving credit facility.

Investor Call

The Company has scheduled an investor conference call for 10:00 a.m. ET on
November 5, 2009. In addition to prepared remarks from management, there will be
a question and answer session on the call. The dial-in numbers for the live
conference call are 888-633-3324 or 973-935-8549, using conference ID number
39248256. A telephone replay of the call will also be available beginning at
11:00 a.m. on November 5th and will remain available through midnight on
November 19th. To listen to the replay, dial 800-642-1687 or 706-645-9291, using
conference ID number 39248256. A replay will also be available on GP Strategies`
website shortly after the conclusion of the call.

Presentation of Non-GAAP Information

This press release contains non-GAAP financial measures, including Adjusted
EBITDA (earnings before interest, income taxes, depreciation and amortization)
and Free Cash Flow. The Company believes these non-GAAP financial measures are
useful to investors in evaluating the Company`s results. These measures should
be considered in addition to, and not as a replacement for, or superior to,
either net income, as an indicator of the Company`s operating performance, or
cash flow, as a measure of the Company`s liquidity. In addition, because
Adjusted EBITDA and Free Cash Flow may not be calculated identically by all
companies, the presentation here may not be comparable to other similarly titled
measures of other companies. For a reconciliation of these non-GAAP financial
measures to the most comparable GAAP equivalent, see the Non-GAAP
reconciliations, along with related footnotes, below.

About GP Strategies Corporation

GP Strategies, whose principal operating subsidiary is General Physics
Corporation (GP), is a NYSE-listed company (GPX). GP is a global performance
improvement solutions provider of sales and technical training, e-Learning
solutions, management consulting and engineering services. GP`s solutions
improve the effectiveness of organizations by delivering innovative and superior
training, consulting and business improvement services, customized to meet the
specific needs of its clients. Clients include Fortune 500 companies,
manufacturing, process and energy industries, and other commercial and
government customers. Additional information may be found at
www.gpworldwide.com.

Forward-Looking Statements

We make statements in this press release that are considered forward-looking
statements within the meaning of the Securities Exchange Act of 1934. These
statements are not guarantees of our future performance and are subject to
risks, uncertainties and other important factors that could cause our actual
performance or achievements to be materially different from those we project.
For a full discussion of these risks, uncertainties and factors, we encourage
you to read our documents on file with the Securities and Exchange Commission,
including those set forth in our periodic reports under the forward-looking
statements and risk factors sections. Except as required by law, we do not
intend to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

TABLES FOLLOW

GP STRATEGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Quarters ended Nine months ended
September 30, September 30,

2009 2008 2009 2008

Revenue $ 54,099 $ 65,968 $ 161,447 $ 204,913
Cost of revenue (1) 45,211 55,884 136,335 173,730
Gross profit 8,888 10,084 25,112 31,183
Selling, general and administrative expenses (1) 5,223 5,101 15,266 16,161
Goodwill and intangible asset impairment loss - - 10,163 -
Operating income (loss) 3,665 4,983 (317 ) 15,022
Interest expense 52 138 157 621
Other income 107 207 319 610
Income (loss) before income tax expense 3,720 5,052 (155 ) 15,011
Income tax expense 1,737 2,116 3,022 6,243
Net income (loss) $ 1,983 $ 2,936 $ (3,177 ) $ 8,768

Basic weighted average shares outstanding 15,725 16,559 15,854 16,629
Diluted weighted average shares outstanding 15,842 16,662 15,911 16,783

Per common share data:
Basic earnings (loss) per share $ 0.13 $ 0.18 $ (0.20 ) $ 0.53
Diluted earnings (loss) per share $ 0.13 $ 0.18 $ (0.20 ) $ 0.52

Other data:
Adjusted EBITDA (2) $ 4,547 $ 6,002 $ 12,502 $ 18,101

(1) Effective January 1, 2009, the Company changed the classification of certain
information technology (IT) infrastructure costs on the consolidated statement of
operations from cost of revenue to selling, general and administrative expenses. The
statements of operations for the three and nine months ended September 30, 2008 have
been reclassified to conform with the presentation for 2009. The reclassification
resulted in a decrease of $473,000 and $1,483,000 in cost of revenue and a
corresponding increase in selling, general and administrative expenses for the three
and nine months ended September 30, 2008, respectively.

(2) The term Adjusted EBITDA (earnings before interest, income taxes, depreciation and
amortization) is a non-GAAP financial measure that the Company believes is useful to
investors in evaluating its results. For a reconciliation of this non-GAAP financial
measure to the most comparable GAAP equivalent, see the Non-GAAP Reconciliation -
Adjusted EBITDA, along with related footnotes, below.

GP STRATEGIES CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousand)
(Unaudited)

Quarters ended Nine months ended
September 30, September 30,

2009 2008 2009 2008
Revenue by segment:
Manufacturing & BPO $ 24,856 $ 29,122 $ 68,733 $ 90,616
Process & Government 13,315 13,754 41,281 42,335
Energy 5,344 6,066 16,893 16,001
Sandy Training & Marketing 10,584 17,026 34,540 55,961
Total revenue $ 54,099 $ 65,968 $ 161,447 $ 204,913

Gross profit by segment:
Manufacturing & BPO $ 3,777 $ 4,794 $ 9,805 $ 13,534
Process & Government 1,833 2,077 5,876 7,218
Energy 1,590 1,853 4,549 4,448
Sandy Training & Marketing 1,688 1,360 4,882 5,983
Total gross profit $ 8,888 $ 10,084 $ 25,112 $ 31,183

Operating income by segment:
Manufacturing & BPO (3) $ 1,621 $ 2,644 $ (6,188 ) $ 7,173
Process & Government 735 1,050 2,448 4,279
Energy 1,151 1,573 3,144 3,545
Sandy Training & Marketing 739 23 1,725 1,763
Corporate and other costs (581 ) (307 ) (1,446 ) (1,738 )
Total operating income $ 3,665 $ 4,983 $ (317 ) $ 15,022

Supplemental Cash Flow Information:
Net cash provided by operating activities $ 5,305 $ 9,081 $ 10,146 $ 17,313
Capital expenditures (257 ) (110 ) (613 ) (1,861 )
Free cash flow $ 5,048 $ 8,971 $ 9,533 $ 15,452

(3) The operating loss for the Manufacturing & BPO segment for the nine months ended September 30, 2009 includes a $10,163,000 goodwill and intangible asset impairment loss recognized during the second quarter of 2009.

GP STRATEGIES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

September 30, December 31,
2009 2008
(Unaudited)
Current assets:
Cash and cash equivalents $ 4,143 $ 3,961
Accounts and other receivables 37,367 42,471
Inventories, net 529 537
Costs and estimated earnings in excess of billings on uncompleted contracts 11,067 8,036
Prepaid expenses and other current assets 5,901 7,277
Total current assets 59,007 62,282
Property, plant and equipment, net 2,914 2,970
Goodwill and other intangibles, net 60,616 67,013
Other assets 4,731 3,575
Total assets $ 127,268 $ 135,840

Current liabilities:
Short-term borrowings $ 1,273 $ 3,234
Accounts payable and accrued expenses 20,668 25,977
Billings in excess of costs and estimated earnings on uncompleted contracts 10,153 10,222
Total current liabilities 32,094 39,433
Other noncurrent liabilities 5,726 3,601
Total liabilities 37,820 43,034
Total stockholders` equity 89,448 92,806
Total liabilities and stockholders` equity $ 127,268 $ 135,840

Non-GAAP Reconciliation - Adjusted EBITDA
(In thousands)
(Unaudited)

Quarters ended Nine months ended
September 30, September 30,

2009 2008 2009 2008
Net income (loss) $ 1,983 $ 2,936 $ (3,177 ) $ 8,768
Interest expense 52 138 157 621
Income tax expense 1,737 2,116 3,022 6,243
Depreciation and amortization 775 812 2,337 2,469
Goodwill and intangible asset impairment loss - - 10,163 -
Adjusted EBITDA (4) $ 4,547 $ 6,002 $ 12,502 $ 18,101

(4) Adjusted earnings before interest, income taxes, depreciation and amortization
(Adjusted EBITDA) is a widely used non-GAAP financial measure of operating
performance. It is presented as supplemental information that the Company believes is
useful to investors to evaluate its results because it excludes certain items that
are not directly related to the Company`s core operating performance. Adjusted EBITDA
is calculated by adding back net interest expense, income tax expense, depreciation
and amortization, non-cash stock-based compensation expense and goodwill and
intangible asset impairment loss to net income. Adjusted EBITDA should not be
considered as substitutes either for net income, as an indicator of the Company`s
operating performance, or for cash flow, as a measure of the Company`s liquidity. In
addition, because Adjusted EBITDA may not be calculated identically by all companies,
the presentation here may not be comparable to other similarly titled measures of
other companies.

GP Strategies Corporation
Scott N. Greenberg
Chief Executive Officer
410-379-3640
or
Sharon Esposito-Mayer
Chief Financial Officer
410-379-3636
or
Ann M. Blank
Investor Relations
410-379-3725

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