Delaware
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001-14785
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52-1868008
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(State of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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1332 Londontown Blvd., Sykesville, MD 21784
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||||
(Address of principal executive offices and zip code)
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GSE SYSTEMS, INC.
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Date: November 12, 2015
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/s/ Jeffery G. Hough
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Jeffery G. Hough
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Senior Vice President and Chief Financial Officer
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99.1
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Press release of GSE Systems, Inc. dated November 12, 2015 announcing the financial results for the three and nine month period ended September 30, 2015.
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·
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Revenue increased 91% to $15.0 million from $7.8 million in Q3 2014, reflecting $5.1 million of incremental revenue from Hyperspring, LLC and a $2.1 million increase in Performance Improvement Solutions revenue, a 27% increase over Q3 2014.
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·
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Implemented a company-wide restructuring program that is expected to deliver permanent annual cash savings of nearly $5 million.
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·
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Adjusted EBITDA was $162,000, the Company's first positive quarterly adjusted EBITDA figure since Q4 2013.
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·
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Operating loss totaled $3.4 million, including a write-down of capitalized software development costs totaling $1.5 million and restructuring charges totaling $1.6 million, compared to an operating loss of $1.9 million in Q3 2014, including restructuring charges of $0.3 million.
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·
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Excluding the write-down of capitalized software development costs and restructuring charges, adjusted operating loss was $0.3 million, compared to an adjusted operating loss of $1.7 million in Q3 2014.
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·
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Net loss was $3.6 million, or $0.20 per diluted share, compared to a net loss of $1.9 million, or $0.11 per diluted share, in Q3 2014.
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·
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Total cash and equivalents of $16.4 million, or $0.91 per diluted share, including $3.5 million of restricted cash.
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·
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Working capital of $8.3 million and current ratio of 1.4x.
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·
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$0 long-term debt.
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·
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Backlog of $47.5 million, compared to $48.4 million at December 31, 2014.
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(in thousands)
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Three Months ended September 30,
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Nine Months ended September 30,
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||||||||||||||
Contract Revenue:
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Performance Improvement Solutions
|
$
|
9,903
|
$
|
7,823
|
$
|
26,911
|
$
|
24,823
|
||||||||
Nuclear Industry Training and Consulting
|
5,058
|
-
|
15,678
|
-
|
||||||||||||
Total Contract Revenue
|
$
|
14,961
|
$
|
7,823
|
$
|
42,589
|
$
|
24,823
|
||||||||
(in thousands)
|
Three Months ended
September 30,
|
Nine Months ended
September 30,
|
||||||||||||||||||||||||||||||
Gross Profit:
|
2015
|
%
|
2014
|
%
|
2015
|
%
|
2014
|
%
|
||||||||||||||||||||||||
Performance Improvement Solutions
|
$
|
3,127
|
31.6
|
%
|
$
|
2,455
|
31.4
|
%
|
$
|
8,158
|
30.3
|
%
|
$
|
7,326
|
29.5
|
%
|
||||||||||||||||
Nuclear Industry Training and Consulting
|
676
|
13.4
|
%
|
-
|
-
|
1,782
|
11.4
|
%
|
-
|
-
|
||||||||||||||||||||||
Total
|
3,803
|
25.4
|
%
|
2,455
|
31.4
|
%
|
9,940
|
23.3
|
%
|
7,326
|
29.5
|
|
||||||||||||||||||||
Less: Write-down of Capitalized Software Development Costs
|
1,538
|
10.3
|
%
|
-
|
-
|
1,538
|
3.6
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%
|
-
|
-
|
||||||||||||||||||||||
Consolidated Gross Profit
|
$
|
2,265
|
15.1
|
%
|
$
|
2,455
|
31.4
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%
|
$
|
8,402
|
19.7
|
%
|
$
|
7,326
|
29.5
|
%
|
||||||||||||||||
·
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(877) 407-9753 (Domestic) or
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·
|
(201) 493-6739 (International)
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Company Contact
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The Equity Group Inc.
|
|
Chris Sorrells
|
Devin Sullivan
|
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Interim Chief Operating Officer
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Senior Vice President
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GSE Systems, Inc.
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(212) 836-9608
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(410) 970-7802
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dsullivan@equityny.com
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|
Kalle Ahl, CFA
|
||
Senior Associate
|
||
(212) 836-9614
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||
kahl@equityny.com
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|
(unaudited)
|
(unaudited)
|
||||||||||||||
|
Three Months ended
|
Nine Months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
|
||||||||||||||||
Contract revenue
|
$
|
14,961
|
$
|
7,823
|
$
|
42,589
|
$
|
24,823
|
||||||||
Cost of revenue
|
11,158
|
5,368
|
32,649
|
17,497
|
||||||||||||
Write-down of capitalized software development costs
|
1,538
|
-
|
1,538
|
-
|
||||||||||||
|
||||||||||||||||
Gross profit
|
2,265
|
2,455
|
8,402
|
7,326
|
||||||||||||
|
||||||||||||||||
Selling, general and administrative
|
3,811
|
3,954
|
11,031
|
11,939
|
||||||||||||
Restructuring charges
|
1,600
|
272
|
1,746
|
883
|
||||||||||||
Depreciation
|
119
|
140
|
383
|
413
|
||||||||||||
Amortization of definite-lived intangible assets
|
123
|
36
|
370
|
108
|
||||||||||||
Operating expenses
|
5,653
|
4,402
|
13,530
|
13,343
|
||||||||||||
|
||||||||||||||||
Operating loss
|
(3,388
|
)
|
(1,947
|
)
|
(5,128
|
)
|
(6,017
|
)
|
||||||||
|
||||||||||||||||
Interest income, net
|
19
|
44
|
67
|
103
|
||||||||||||
Gain (loss) on derivative instruments
|
20
|
69
|
(59
|
)
|
178
|
|||||||||||
Other expense, net
|
(156
|
)
|
-
|
(235
|
)
|
(7
|
)
|
|||||||||
|
||||||||||||||||
Loss before income taxes
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(3,505
|
)
|
(1,834
|
)
|
(5,355
|
)
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(5,743
|
)
|
||||||||
|
||||||||||||||||
Provision for income taxes
|
50
|
61
|
211
|
162
|
||||||||||||
|
||||||||||||||||
Net loss
|
$
|
(3,555
|
)
|
$
|
(1,895
|
)
|
$
|
(5,566
|
)
|
$
|
(5,905
|
)
|
||||
|
||||||||||||||||
Basic loss per common share
|
$
|
(0.20
|
)
|
$
|
(0.11
|
)
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$
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(0.31
|
)
|
$
|
(0.33
|
)
|
||||
Diluted loss per common share
|
$
|
(0.20
|
)
|
$
|
(0.11
|
)
|
$
|
(0.31
|
)
|
$
|
(0.33
|
)
|
||||
|
||||||||||||||||
Weighted average shares outstanding - Basic
|
17,894,272
|
17,887,859
|
17,890,020
|
17,887,859
|
||||||||||||
Weighted average shares outstanding - Diluted
|
17,894,272
|
17,887,859
|
17,890,020
|
17,887,859
|
(unaudited)
|
||||||||
|
September 30, 2015
|
December 31, 2014
|
||||||
|
||||||||
Cash and cash equivalents
|
$
|
12,832
|
$
|
13,583
|
||||
Restricted cash – current
|
223
|
613
|
||||||
Current assets
|
27,675
|
31,729
|
||||||
Long-term restricted cash
|
3,305
|
3,591
|
||||||
Total assets
|
40,221
|
45,999
|
||||||
|
||||||||
Current liabilities
|
$
|
19,387
|
$
|
20,273
|
||||
Long-term liabilities
|
2,459
|
1,986
|
||||||
Stockholders' equity
|
18,375
|
23,740
|
|
Three Months ended
|
Nine Months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
|
||||||||||||||||
Net loss
|
$
|
(3,555
|
)
|
$
|
(1,895
|
)
|
$
|
(5,566
|
)
|
$
|
(5,905
|
)
|
||||
Interest income, net
|
(19
|
)
|
(44
|
)
|
(67
|
)
|
(103
|
)
|
||||||||
Provision for income taxes
|
50
|
61
|
211
|
162
|
||||||||||||
Depreciation and amortization
|
242
|
176
|
753
|
521
|
||||||||||||
EBITDA
|
$
|
(3,282
|
)
|
$
|
(1,702
|
)
|
$
|
(4,669
|
)
|
$
|
(5,325
|
)
|
||||
Write-down of capitalized software development costs
|
1,538
|
-
|
1,538
|
-
|
||||||||||||
Loss from the change in fair value of contingent consideration
|
306
|
22
|
739
|
69
|
||||||||||||
Restructuring charges
|
1,600
|
272
|
1,746
|
883
|
||||||||||||
Adjusted EBITDA
|
$
|
162
|
$
|
(1,408
|
)
|
$
|
(646
|
)
|
$
|
(4,373
|
)
|
Three Months ended
|
Nine Months ended
|
||||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||||
2015
|
2014
|
2015
|
2014
|
||||||||||||||||
GAAP operating loss
|
$
|
(3,388
|
)
|
|
$
|
(1,947
|
)
|
|
$
|
(5,128
|
)
|
|
$
|
(6,017
|
)
|
||||
Write-down of capitalized software development costs
|
1,538
|
-
|
1,538
|
-
|
|||||||||||||||
Restructuring charges
|
1,600
|
272
|
1,746
|
883
|
|||||||||||||||
Non-GAAP adjusted operating loss
|
$
|
(250
|
)
|
|
$
|
(1,675
|
)
|
|
$
|
(1,844
|
)
|
|
$
|
(5,134
|
)
|