8-K

UNITED STATES

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) December 27, 2017

GSE SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-14785	52-1868008
(State of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)
1332 Londontown Blvd., Sykesville, MD 21784
(Address of principal executive offices and zip code)

(410) 970-7800

Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation or the registrant under any of the following provisions (see General Instructions A.2 below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d - 2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e - 4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Form 8-K

Item 2.05 Costs Associated with Exit or Disposal Activities.

On December 27, 2017, the board of directors of GSE Systems, Inc. (GSE or the Company) approved an international restructuring plan to streamline and optimize the Company's global operations and the Company issued a press release announcing the same.  Beginning in December 2017, GSE will consolidate its engineering services and R&D activities to Maryland and cease an unprofitable non-core business in the U.K.  As a result, the Company will be closing its offices in Nyköping, Sweden; Chennai, India; and Stockton-on-Tees, UK.  These actions are designed to improve Company productivity by eliminating duplicate employee functions and increasing GSE's focus on its core business, improving efficiency and maintaining the full range of engineering capabilities while reducing costs and organizational complexity.  The Company expects to realize annual savings of approximately $1.0 million upon completion of the restructuring plan.  The total cost of the plan is expected to be approximately $2.5 million and will be incurred during the fourth quarter of 2017.  Cash costs of approximately $1.0 million are related to severance expenses and other costs, including facility closure costs and accounting and legal fees.  The remaining $1.5 million of non-cash costs is a result of the write-down of GSE's 2010 acquisition of TAS Engineering.  The Company anticipates recouping its one-time cash restructuring costs within approximately one year.

Item 9.01 Financial Statements and Exhibits.

Exhibit	Description
99.1	Press release dated December 27, 2017

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.

Date:  December 27, 2017	GSE SYSTEMS, INC.
	/s/ Emmett Pepe
	Emmett Pepe
	Chief Financial Officer

EX-99.1

FOR IMMEDIATE RELEASE

GSE Systems, Inc. Announces Steps to Streamline Global Operations

Sykesville, MD – December 27, 2017 - GSE Systems, Inc. (GSE or the Company) (NYSE American: GVP), the world leader in real-time high-fidelity simulation systems and provider of training/consulting solutions to the power and process industries, today announced that as part of its ongoing efforts to streamline and optimize global operations, the Company will be consolidating engineering services and R&D activities to Maryland and ceasing an unprofitable non-core business in the UK.  As a result, the Company will close its offices in Nyköping, Sweden; Chennai, India; and Stockton-on-Tees, UK.  These actions are designed to improve Company productivity by eliminating duplicate employee functions and increasing GSE's focus on its core business, improving efficiency and maintaining the full range of engineering capabilities while reducing costs and organizational complexity.  At this time, the Company does not anticipate additional office closures.

GSE will eliminate approximately 40 positions due to these changes, primarily in Europe and India, and will undertake other cost-savings measures both across the enterprise and focused on the Company's services organization.  As a result of these efforts, GSE expects to record a restructuring charge of approximately $2.5 million in the fourth quarter of 2017.  Severance expenses and other costs, including facility closure costs, accounting and legal fees, will total approximately $1.0 million. The remaining non-cash portion of $1.5 million is a result of the write down of GSE's 2010 acquisition of TAS Engineering, offset by gains related to Sweden and India entity closures.  The restructuring should reduce revenue by approximately $1.5 million and reduce expenses by $2.5 million.  The annual savings of approximately $1.0 million is primarily the result of winding up TAS Engineering operations, an unprofitable business outside of the Company's core market, nuclear power.  The Company anticipates recouping its one-time cash restructuring costs within approximately one year.

Kyle Loudermilk, GSE's President and Chief Executive Officer, said, "We have made the strategic decision to implement a restructuring program for certain assets in Europe and India to position the company for enhanced long-term profitability and the next phase of our growth. By streamlining our global operations, we become a leaner, more agile business with less complexity, allowing us to better serve our customers as well as dedicate more time to executing our stated M&A goals.  A more centralized staff will greatly enhance interactivity and innovation as we advance client solutions, and do so at a lower cost in a more effective manner.  These actions are the appropriate steps for us at this stage of our company's growth trajectory, and should directly benefit our customers, our shareholders and our employees on the whole."

ABOUT GSE SYSTEMS, INC.

GSE Systems, Inc. is a world leader in real-time high-fidelity simulation, providing a wide range of simulation, training, consulting, and engineering solutions to the power and process industries. Its comprehensive and modular solutions help customers achieve performance excellence in design, training and operations.  GSE's products and services are tailored to meet specific client requirements such as scope, budget and timeline. The Company has over four decades of experience, more than 1,100 installations, and hundreds of customers in over 50 countries spanning the globe. GSE Systems is headquartered in Sykesville (Baltimore), Maryland, with offices in Navarre, Florida and Beijing, China.  Information about GSE Systems is available at www.gses.com.

FORWARD LOOKING STATEMENTS

We make statements in this press release that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. These statements reflect our current expectations concerning future events and results. We use words such as "expect," "intend," "believe," "may," "will," "should," "could," "anticipates," and similar expressions to identify forward-looking statements, but their absence does not mean a statement is not forward-looking.  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. We do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Company Contact	The Equity Group Inc.
Chris Sorrells	Kalle Ahl, CFA
Chief Operating Officer	(212) 836-9614
GSE Systems, Inc.	kahl@equityny.com
(410) 970-7802
	Devin Sullivan
	(212) 836-9608
	dsullivan@equityny.com