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

June 12, 2018

Date of Report (Date of earliest event reported)

GSE SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-14785	52-1868008
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1332 Londontown Blvd.,
Sykesville, Maryland	21784
(Address of principal executive offices)	(Zip Code)

(410) 970-7800

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] 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. [  ]

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Amendment to Certificate of Incorporation

GSE Systems, Inc. (the "Company") amended its Certificate of Incorporation (the "Charter Amendment") to increase the total number of authorized shares of capital stock from 32,000,000 to 62,000,000. As described in Item 5.07 below, the Company's stockholders approved the Charter Amendment at the annual meeting of stockholders held on June 12, 2018 (the "Annual Meeting"). The Charter Amendment became effective upon the filing with the Secretary of State of the State of Delaware on June 13, 2018.

A more detailed summary of the material features of the Charter Amendment is set forth in the Company's definitive proxy statement for the Annual Meeting, filed with the Securities and Exchange Commission on April 30, 2018. The foregoing description is qualified in its entirety by reference to the full text of the Charter Amendment, a copy of which is attached as Exhibit 3.1 hereto and incorporated herein by reference.

Amendment to Bylaws

On June 12, 2018, the board of directors (the "Board") of the Company amended (the "First Amendment") the Company's Third Amended and Restated Bylaws (as amended, the "Bylaws"), changing the size of the Board to not less three (3), nor greater than nine (9) members, with the exact number to be fixed by resolution of the Board. The First Amendment was effective June 12, 2018.

The foregoing description of the First Amendment does not purport to be complete and is qualified its the entirety by reference to the First Amendment filed as Exhibit 3.2 hereto and incorporated herein by reference.

Item 5.07. Submission of Matters to a Vote of Security Holders.

On June 12, 2018, the Company held its annual meeting of stockholders.  At that meeting, the following matters were voted upon and the following reflects the final voting results:

					Broker
	Proposal	For	Withheld		Non-Votes
1)	Election of Directors for a 3-year term expiring 2021
	Suresh Sundaram	12,728,330	359,166		4,357,502
	J. Barnie Beasley	12,751,788	335,708		4,357,502
						Broker
		For	Against	Abstain		Non-Votes
2)	Non-binding resolution to approve Company's named executive officer compensation	12,418,153	635,590	33,753		4,357,502
						Broker
		For	Against	Abstain		Non-Votes
3)	An amendment to the Company's Certificate of Incorporation to increase the total number of authorized shares of capital stock from 32,000,000 to 62,000,000	12,340,709	743,640	3,147		4,357,502
		For	Against	Abstain
4)	Ratify BDO USA, LLP as the Company's independent registered public accounting firm for the year ending December 31, 2018	17,007,734	431,771	5,493

In relation to Proposal 1, each director nominee received more votes for than withheld the nominee's election and was, therefore, elected as a Class II Director.

In relation to Proposal 3, holders of a majority of the issued and outstanding common stock of the Company voted in favor of the amendment to the Company's Certificate of Incorporation and, therefore, the amendment was approved.

Item 7.01.Regulation FD Disclosure.

GSE Systems, Inc. (the "Company") has prepared an updated investor presentation concerning its business that it intends to post on its website, www.gses.com, as well as to use in connection with meetings with investors and other interested parties and in connection with presentations and speeches to various audiences. A copy of the updated investor presentation is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

The information furnished in this Item 7.01, including Exhibit 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Except for historical information contained in the updated investor presentation attached as an exhibit hereto, the investor presentation contains forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the investor presentation regarding these forward-looking statements.

Item 8.01. Other Events.

On June 12, 2018, the Board reviewed and ratified amendments to the charters of the Audit Committee, the Compensation Committee and the Nominating Committee, effective April 4, 2018.  The revised charters for each of the foregoing standing committees have been posted to the Company's website.

Following the Annual Meeting, the Board appointed John D. ("Jack") Fuller as Chairman of the Board. The Board also reconstituted the membership of its Audit Committee, Compensation Committee and Nominating Committee.  As reconstituted, the Audit Committee consists of James H. ("Jim") Stanker (Chair), Jack Fuller and J. Barnie Beasley.  The Compensation Committee consists of Suresh Sundaram (Chair), Jim Stanker and Jack Fuller.  The Nominating Committee consists of J. Barnie Beasley (Chair), Suresh Sundaram and Jack Fuller.

Item 9.01. (d)	Financial Statements and Exhibits.
3.1	Amendment to the Certificate of Incorporation of GSE Systems, Inc.
3.2	First Amendment to the Third Amended and Restated Bylaws of GSE Systems, Inc.
99.1	GSE Systems, Inc. Investor Presentation

S I G N A T U R E

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.

GSE SYSTEMS, INC.
By:	/s/ Daniel W. Pugh
	Daniel W. Pugh
	Secretary, Senior Vice President, General Counsel and Risk Management Officer

Date: June 15, 2018

EX-3.1

Exhibit 3.1

CERTIFICATE OF AMENDMENT OF

CERTIFICATE OF INCORPORATION OF

GSE SYSTEMS, INC.

GSE Systems, Inc. (the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify:

FIRST: That the Board of Directors of the Corporation has duly adopted resolutions setting forth a proposed amendment of the Certificate of Incorporation of the Corporation to increase the number of authorized shares of capital stock and shares of Common Stock of the Corporation, declaring said proposed amendment to be advisable and directing that the proposed amendment be considered at the next annual meeting of the stockholders of the Corporation.

SECOND: That thereafter, a meeting of the stockholders of the Corporation was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment as set forth in this Certificate of Amendment.

THIRD: That the  amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

FOURTH: That upon the effectiveness of this Certificate of Amendment, Section 4.1 of the Certificate of Incorporation is hereby amended by replacing Section 4.1 in its entirety with the following:

Section 4.1.  Total Number of Shares of Capital Stock.  The total number of shares of capital stock of all classes that the Corporation shall have authority to issue is 62,000,000 shares.  The authorized stock is divided into 2,000,000 shares of Preferred Stock, with the par value of $0.01 each (the "Preferred Stock"), and 60,000,000 shares of voting common stock, with the par value of $0.01 each (the "Common Stock").  The Common and/or Preferred Stock of the Company may be issued from time to time without prior approval by the stockholders and for such consideration as may be fixed from time to time by the Board.  The Board may issue such shares of Common and/or Preferred Stock in one or more series, with such voting powers, designations, preferences and rights or qualifications, limitations or restrictions thereof as shall be stated in the resolution or resolutions.

IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to execute this Certificate of Amendment on this 12th day of June, 2018.

By:  /s/ Kyle J. Loudermilk

Name: Kyle J. Loudermilk

Title: CEO and President

EX-3.2

Exhibit 3.2

GSE Systems, Inc.

FIRST AMENDMENT

TO

THIRD AMENDED AND RESTATED BYLAWS

The Bylaws of GSE Systems, Inc. (the "Bylaws"), are hereby amended as follows.

Section 3.1 of the Bylaws is deleted in its entirety and replaced with the following:

"Powers; Number and Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.  The number of directors shall be fixed by resolution of the Board of Directors, provided that the number thereof shall never be less than three (3), nor greater than nine (9).  The Board of Directors may adopt such qualifications, rules and procedures, not inconsistent with the Certificate of Incorporation, these Bylaws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation, provided that no amendment to the Bylaws decreasing the number of directors shall have the effect of shortening the term of any incumbent director and provided that the number of directors shall not be increased by fifty percent (50%) or more in any twelve (12)-month period without the approval by at least sixty-six and two-thirds percent (66 2/3%) of the members of the Board of Directors then in office. Each director shall hold office until his successor is elected and qualified or until his earlier death, removal or resignation pursuant to Section 3.2 hereof."

Except as herein amended, the provisions of the Bylaws shall remain in full force and effect.

EFFECTIVE AS OF: June 12, 2018.

EX-99.1

 Technical Engineering AND STAFFING SERVICES Platform For THE POWER AND PROCESS Industries  INVESTOR PRESENTATIONNASDAQ: GVP 

 FORWARD LOOKING STATEMENTSand non-gaap financial measures  This presentation, our remarks, and answers to questions contain statements 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," "anticipate," 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.This presentation, our remarks, and answers to questions include references to adjusted EBITDA, adjusted net income, and adjusted earnings per share (“adjusted EPS”), which do not adhere to generally accepted accounting principles (“GAAP”). We define EBITDA as earnings before interest, taxes, depreciation and amortization (“EBITDA”). We define Adjusted EBITDA as EBITDA plus adjustments for consulting support for finance restructuring, stock-based compensation expense, restructuring charges, gain/loss from the changes in fair value of contingent consideration, acquisition-related expense, and customer bankruptcy related expense. We define adjusted net income as net income plus adjustments for consulting support for finance restructuring, stock-based compensation expense, restructuring charges, gain/loss from the changes in fair value of contingent consideration, acquisition-related expense, Westinghouse bankruptcy related expense, tax reform impact, and release of valuation allowance. We define adjusted EPS as adjusted net income divided by fully diluted shares of common stock issued and outstanding. EBITDA, Adjusted EBITDA, adjusted net income, and adjusted EPS are reconciled to net income, the most directly comparable GAAP measure, in the financial tables included in the Appendix to this presentation. We believe that this additional information and the reconciliation we provide may be useful to help evaluate our operations. This information supplements our results as reported in accordance with GAAP and should not be viewed in isolation from, or as a substitute for, our GAAP results.With respect to Adjusted EBITDA on a forward-looking basis and as a combined company, a reconciliation of the difference between this non-GAAP expectation and the corresponding GAAP measure (expected net income) is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, adjustments to the provision for income taxes, depreciation of fixed assets, amortization of intangibles, costs related to restructuring actions and interest expense, and certain anticipated cost synergies, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.Unless otherwise indicated, all results of operations and the financial condition of the Company are as of March 31, 2018 and all market data set forth in this presentation is as of June 13, 2018. We undertake no duty to update or revise the information in light of new information, future events or otherwise, although we may do so from time to time as management believes is appropriate. Any such updating may be made through the filing of reports or documents with the Securities and Exchange Commission, through press releases or through other public disclosures.  2 

 Who Is GSE SYSTEMS?   3  We provide technical engineering and highly-skilled personnel to the global power and process industriesPerformance Improvement SegmentWe are a market leader in simulation and engineering programs for the nuclear/fossil power industry We provide computer-based tutorials and simulators to the process industryNuclear Training & Consulting SegmentWe staff nuclear power plants with specialized personnel, primarily in white-collar training and operating roles Our solutions enhance employee and plant performance, reduce risk, increase revenue and lower costs for clients  Ticker | Exchange  GVP | Nasdaq  Headquarters  Maryland  Number of Employees  ~500  Recent price (6/13/18)   $3.10  Shares outstanding  ~20M  Market cap (6/13/18)  ~$62M  Total cash1 (5/11/18)  ~$12M  Total debt1 (5/11/18)  ~$10M  Enterprise value1,2  ~$60M  Revenue1 (LTM)  ~$100M  EV / Revenue1,2  ~0.6x  1 Pro forma True North Consulting acquisition on May 11, 2018 and for the Absolute Consulting acquisition on September 20, 2017 2 Enterprise Value and EV/Revenue are estimates based on the Recent Price, Market Cap, Total Cash and Total Debt amounts as of the dates provided herein and do not represent the Enterprise Value or EV/Revenue as of the date of this presentation.  

 Financial AND Operating Highlights1,2  Revenue (in $M)  Gross Profit (in $M)  Adjusted EPS (Diluted)1  +24% CAGR  +20% CAGR  Adjusted EBITDA (in $M)1  1 Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures; see GAAP to non-GAAP reconciliation in Appendix 2 Absolute Consulting contributed to GSE’s financial results during the last ten days of 3Q 2017 and during 4Q 2017; otherwise the performance of Absolute and True North Consulting are not included  +$10M Improvement  +$0.44 Improvement   4 

 VISION 2020: Acquisition Driven GOALS  Capital Needs: ~$60-100M to create ~$20-30M in EBITDA; majority of capital from debt financing, internal cash generation and cash on hand.    2020Target  Revenue  ~$200-300M  Gross margin  ~25%  R&D (% sales)  ~2%  SG&A (% sales)  ~13-16%  Adj. EBITDA1  ~$20-30M    1 Adjusted EBITDA is a non-GAAP financial measure  5 

 EV/SALES (TTM)1  2-3x  ~1.0x  >5x          EV/EBITDA (TTM)1,2  10-12x  10-12x  >15x          Attractive Valuation relative to PEERS  6      PEERS:  Performance Improvement  Nuclear Training & Consulting  Software  1 Normalized average historical trading multiples for peers2 EBITDA is a non-GAAP financial measure 

 Pro-Forma Revenue – ~$100M (LTM)1      Performance Improvement  Nuclear Training & Consulting  By Segment  By Industry      Nuclear  Fossil      North America  Europe  By Geography      Utilities  Other        By End-User    Asia    Non-Power / Process  1 Pro forma for the Absolute Consulting acquisition on September 20, 2017 and the True North Consulting acquisition on May 11, 2018; LTM as of March 31, 2018  7 

 8  Business Model – How we make Money  ~50%30-40+%Engineering Modeling ServicesFixed price, and time and material contractsPercent complete  ~50%12-15%Technical / High-Value StaffingTime and material contractsAs service is performed billing occurs  <5%80-90%SoftwareSale of perpetual license with recurring MX, or SaaS annual subscriptionLicense upon delivery, ratable recognition over life of MX agreement  Performance Improvement  Nuclear Training & Consulting  Software1  % of Revenue:Gross Margin:Primarily Selling:Business Model:Accounting:  1 Software is a component of GSE’s Performance Improvement segment 

 Investment Highlights  9  Revitalized underlying core business and strong organic growth Powerful acquisition platform in place to consolidate a fragmented industry  Leadership with an “owner/operator” mentality; aligned with shareholders (PRSUs) Track record of building companies through successful M&A transactionsExperience and skill-set to deliver operational improvements  Compelling, Scalable Acquisition Platform  Expertise from 40+ years of serving clients in the power and process sectorsProven and differentiated technology for simulation and training solutionsDifficult-to-replicate technology and base of talented, specialized employees  Aligned, ProvenLeadership  40+ years serving a high-barrier-to-entry market Strong, enduring relationships with blue chip power and process companies  Highly Specialized Platform  Blue Chip Client Base   Landscape targeted for roll-up includes markets with combined size of $4+ billionFavorable industry drivers: recognition of nuclear as a critical source of resilient baseload energy; aging workforce crisis; rising demand for carbon-free electricity   Large Addressable Markets  Cash and equivalents of ~$12M (as of 5/11/18)$10M long-term debt (as of 5/11/18)   Strong Financial Position 

 GSE SENIOR Leadership   10  Kyle Loudermilk – President & CEO20+ years of executive experience at publicly-listed MicroStrategy and AspenTech, and PE-backed Datatel/Ellucian (Thoma Bravo and Hellman & Freidman)Strong track record revitalizing technology companiesBS, MS, Chemical Engineering – Columbia UniversityHarvard University General Management ProgramChris Sorrells – COO20+ years of experience creating growth strategies for companies at the intersection of power/energy/technology12+ years investing experience as private equity professional; highly experienced utilizing M&A to grow platformsSalomon Smith Barney, Banc of America Securities, NGP Energy Technology PartnersBA – Washington & Lee University; M.Acc. – USC; MBA – College of William & MaryEmmett Pepe – CFO, CPA30+ years of experience in finance management across a variety of business sectors Focus on the software and telecommunications industriesExecutive positions at MicroStrategy, BroadSoft, Software AG, and webMethodsBS, Accounting – Penn State UniversityBahram Meyssami – CTO25 years of experience in the software industryFormer positions at Aspen Technology, Datatel, University of MarylandBS, MS, Ph.D Chemical Engineering – University of MarylandPaul Abbott – President, Nuclear Industry Training and Consulting Division 33 years of experience in nuclear training, consulting and operations Principal of Hyperspring since 2007; former senior reactor operator at two different U.S. nuclear facilities Previously served in the U.S. NavyBS, Nuclear Engineering Technology – Excelsior College  August 2015  August 2015  July 2016  December 2015  November 2014   

 Management incentives aligned withShareholders’ interests  11  Executive officers and directors own ~1.2 million shares or ~6.5% of the Company based on 19.6 million shares outstandingMajority of equity compensation received by executives and key employees is structured in performance-restricted stock units (“PRSUs”) with the following vesting thresholds:   GSE share price - 6/13/2018  % of total PRSUs that vest  GSE 30-Day VWAP Threshold1  1VWAP = volume weighted average price of GSE common stock  GSE share price - 8/24/2015      = Vested  = Unvested 

 Strategy to utilize GSE as an Acquisition Platform  12  Core focus: understand the vendor ecosystems in our target markets – look for asymmetrical risk/reward acquisitions  $10-50M30-40%70+Fixed price, and time and material contracts   $10-80M12-15% 100+Time and material contracts   $5-15M 75-85%30+ Sale of perpetual license with recurring MX, or SaaS annual subscription   Performance ImprovementTargets  Nuclear Training & Consulting Targets  SoftwareTargets  Typical Rev. Range:Gross Margin:# of Opportunities:Business Model:  $10-60M30-40% 30+Sale of parts and equipment; time and materials for services   Value Added Components / Services Targets 

 Landscape Targeted for Roll-Up: Markets of SIGNIFICANT Size   Global Market1  US Market1,2  1 Source: Company estimates based on various publicly available resources and proprietary research2 Only includes white collar labor   Global Market1   Global Market1        Performance ImprovementTargets  Nuclear Training & Consulting Targets  SoftwareTargets  Value Added Components / Services Targets  13 

         Date Acquired:  November 2014  September 2017  May 2018  GSE Business Segment  Nuclear Training & Consulting  Nuclear Training & Consulting  Performance Improvement  How Deal Financed  Cash on Hand + Earnout  Cash on Hand  Term Loan  Purchase Price  $3M at Close  $8.75M  $9.75M  Revenue (TTM)1  ~$17M  ~$40M  ~$11M  Adj. EBITDA (TTM)1, 2  ~$1.6M  ~$2M  ~$2.3M  Revenue multiple (TTM)1  ~0.2x + Earnout  ~0.2x  ~0.9x  Adj. EBITDA multiple (TTM)1  ~2.0x + Earnout  ~4.4x  ~4.2x  Value-Creating DEALS Validate GSE’s Acquisition platform   14  1 At time of acquisition 2 Adjusted EBITDA is a non-GAAP financial measure and includes identified synergies at deal close     

 Highly educated, Specializedemployee base (~500)1  15      Performance Improvement  Nuclear Training & Consulting      Nuclear/Fossil  Non-Power / Process  Corporate    Employees ByTechnical Focus  Employees By Industry/Function  1 Pro forma for the Absolute Consulting acquisition on September 20, 2017 and the True North Consulting acquisition on May 11, 2018 

 Representative Blue chip customers   x  16  The trademarks above are the property of the referenced companies; GSE disclaims ownership of such marks. Inclusion of a representative customer herein is not intended to suggest endorsement or recommendation. 

 What is driving MARKET demand?  Growing awareness of the value and resiliency factor of nuclear power as a source of baseload carbon-free energyWidening skills gap and aging workforce—a significant issue in the US power industryIncreasing demand for carbon-free electricity, such as nuclear powerJapan’s restart of nuclear reactors post-FukushimaInitiatives such as “Delivering the Nuclear Promise”   17  1source: NEI, September 20152source: NEI estimates per Power Engineering magazine, February 2015   “Nuclear energy is America’s top source of carbon-free electricity and avoids more than 1/2 billion tons of carbon emissions each year.”1  “39% of the nuclear workforce will be eligible for retirement by 2018, which means the industry must hire 20,000 new workers over the next four years to replace those retiring workers.”2   X 

 Robust Nuclear INDUSTRY Benefits GSE  18  1source: NEI, May 2017 (China excludes Taiwan); 2source: NEI, November 2016 (excludes V.C. Summer 2,3); 3source: World Nuclear Association, August 2017  TODAY  NEAR TERM  LONGER TERM  Global nuclear reactor installed base1: 449     Ongoing fees for maintenance, re-hosting, retuning, model upgrades, training   Nuclear reactors under construction2: 58  New nuclear capacity needed by 2050 to meet Harmony vision3: 1000 GW    New simulator sales +Incremental fees for maintenance, re-hosting, retuning, model upgrades  New simulator sales+Incremental fees for maintenance, re-hosting, retuning, model upgrades    Nuclear Units Under Construction by Country  Operable Nuclear Reactors – Top 10 Countries  Projected New Capacity (GW per Year) Required to Meet Harmony Targets3  GSE’s opportunity: 

 Investment CONCLUSIONS  19  GSE is a technical engineering and staffing services company focused on the power and process industries  Proven simulation and training technology with a highly-specialized employee base  Large addressable markets supported by favorable industry drivers  Enduring relationships with blue-chip clients developed over 40+ years  Strong financial position, including ~$12M cash and $10M long term debt  Strong leadership team aligned with shareholders, driving a new growth plan   Powerful, scalable acquisition platform in place to enhance growth and build shareholder value 

 20  Technical Engineering AND STAFFING SERVICES Platform For THE POWER AND PROCESS Industries  Q&A 

 21  APPENDIX 

 GSE SYSTEMS Financial History1   22  Financial Summary1  Fiscal Year Ended             3 Months Ended    (in $ millions, except shares amounts)  2014  2015  2016  2017     Mar. 31, 2017  Mar. 31, 2018  Revenue  37.5   56.8   53.1   70.9      16.3   22.9   Gross Profit  10.8   12.9   16.3   18.5      4.1   4.9   Gross margin  29%  23%  31%  26%     25%  21%  Operating (loss) income  (7.5)  (4.1)  1.6   0.2      (0.1)  (1.1)  Operating margin  (20%)  (7%)  3%  0%     0%  (5%)  Net (loss) income  (7.3)  (4.7)  1.4   5.4      (0.3)  (1.5)  Diluted EPS  ($0.41)  ($0.26)  $0.08   $0.27      ($0.01)  ($0.08)  Diluted shares  17,887,859  17,892,891  18,512,266  19,605,427     19,094,382  19,514,385  EBITDA2  (6.3)  (3.0)  2.8   1.5      0.0   (0.9)  Adjusted EBITDA2  (4.3)  1.8   5.0   5.7     1.1   0.8   Adjusted net (loss) income2  (5.3)  0.1   3.7   2.7      0.8   0.2   Adjusted EPS - diluted2  ($0.30)  $0.00   $0.20   $0.14      $0.04   $0.01                   Balance Sheet (in $ millions)  Mar. 31, 2018              Cash and cash equivalents  11.8              Current assets  33.8              Total assets  53.1              Current liabilities  22.2              Long-term debt  -              Total stockholders' equity  29.4              In prior years, the Company recognized revenue on multiple element arrangements which included sales of its EnVision software product as delivery occurred on each element except post contract support ("PCS"). PCS revenue was recognized ratably over the PCS term. During the fourth quarter of 2015, management determined that that Company had not established vendor specific objective evidence ("VSOE") of the fair value for any of the elements in multiple element transactions including sales of its EnVision software licenses. Accordingly, the consolidated financial statements have been revised to recognize all revenue on multiple element transactions including EnVision software license sales ratably over the PCS terms on these transactions since VSOE did not exist for any of the non-software elements in these multiple element transactions. The revision to revenue resulted in a decrease to revenue and an increase in operating loss of $587,000 for the year ended December 31, 2014. The revision also had the effect of increasing billings in excess by $1.2 million, decreasing unbilled receivables by $62,000, increasing prepaid expenses and other current assets by $291,000 and increasing the accumulated deficit by $415,000 at December 31, 2014 as a result of the cumulative adjustment for prior periods.   1 Excludes True North for all periods and excludes Absolute Consulting prior to September 20, 20172 Non-GAAP financial measure; see GAAP to non-GAAP reconciliation on following pages 

 GSE SYSTEMS ebitda and Adjusted EBITDA reconciliation (in $ Thousands)1  23  EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles ("GAAP"). Management believes EBITDA and Adjusted EBITDA, in addition to GAAP measures, provide meaningful supplemental information regarding our operational performance. Our management uses EBITDA, Adjusted EBITDA, and other non-GAAP measures to evaluate the performance of our business and make certain operating decisions (e.g., budgeting, planning, employee compensation and resource allocation). This information facilitates management's internal comparisons to our historical operating results as well as to the operating results of our competitors. Since management finds these measures to be useful, we believe that our investors can benefit by evaluating both non-GAAP and GAAP results. Investors should recognize that EBITDA and Adjusted EBITDA might not be comparable to similarly-titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP. A reconciliation of non-GAAP EBITDA and Adjusted EBITDA to the most directly comparable GAAP measure (net income) in accordance with SEC Regulation G follows:  1 Excludes True North for all periods and excludes Absolute Consulting prior to September 20, 2017  Adjusted EBITDA Summary  Fiscal Year Ended           3 Months Ended    (in $ thousands)  2014  2015  2016  2017     Mar. 31, 2017  Mar. 31, 2018  Net (loss) income   (7,329)   (4,705)   1,422    5,384       (266)   (1,496)  Interest income, net   (143)   (88)   (85)   (80)      (27)   (22)  Provision for income taxes   166    471    350    (4,980)      73    259   Depreciation and amortization   990    1,328    1,080    1,146       257    371   EBITDA   (6,316)   (2,994)   2,767    1,470       37    (888)  Gain/loss from the change in fair value of contingent consideration   229    849    (207)   446       254    -   Write-down of capitalized software development costs   -    1,538    -    -       -    -   Restructuring Charges   1,264    1,791    490    778       45    917   Stock-based compensation expense   712    541    1,550    2,472       596    627   Gain/loss on derivative instruments, net   (209)   40    18    (99)      160    156   Consulting support for finance restructuring   -    -    394    -       -    -   Westinghouse bankruptcy related expense   -    -    -    122       -    -   Acquisition-related expense   -    -    -    473       -    -   Adjusted EBITDA   (4,320)   1,765    5,012    5,662       1,092    812  

 Adjusted Net Income and Adjusted EPS reconciliation (In $ Thousands, except share amounts)1  24  Adjusted Net Income and adjusted earnings (loss) per share (“adjusted EPS”) are not measures of financial performance under generally accepted accounting principles (“GAAP”). Management believes adjusted net income and adjusted EPS, in addition to GAAP measures, provide meaningful supplemental information regarding our operational performance. Our management uses Adjusted Net Income and other non-GAAP measures to evaluate the performance of our business and make certain operating decisions (e.g., budgeting, planning, employee compensation and resource allocation). This information facilitates management's internal comparisons to our historical operating results as well as to the operating results of our competitors. Since management finds these measures to be useful, we believe that our investors can benefit by evaluating both non-GAAP and GAAP results. Investors should recognize that Adjusted Net Income and Adjusted EPS might not be comparable to similarly-titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with GAAP. A reconciliation of non-GAAP adjusted net income and adjusted EPS to GAAP net income, the most directly comparable GAAP financial measure, is as follows:  1 Excludes True North for all periods and excludes Absolute Consulting prior to September 20, 2017  Adjusted Net Income (Loss) Summary  Fiscal Year Ended           3 Months Ended    (in $ thousands, except shares amounts)  2014  2015  2016  2017     Mar. 31, 2017  Mar. 31, 2018  Net (loss) income   (7,329)   (4,705)   1,422    5,384       (266)   (1,496)  Gain/loss from the change in fair value of contingent consideration   229    849    (207)   446       254    -   Write-down of capitalized software development costs   -    1,538    -    -       -    -   Restructuring charges   1,264    1,791    490    778       45    917   Stock-based compensation expense   712    541    1,550    2,472       596    627   Gain/loss on derivative instruments, net   (209)   40    18    (99)      160    156   Consulting support for finance restructuring   -    -    394    -       -    -   Westinghouse bankruptcy related expense   -    -    -    122       -    -   Acquisition-related expense   -    -    -    473       -    -   Tax reform impact   -    -    -    2,497       -    -   Release of valuation allowance   -    -    -    (9,382)      -    -   Adjusted net income (loss)   (5,333)   54    3,667    2,691       789    204   Earnings (loss) per share - diluted   (0.41)   (0.26)   0.08    0.27       (0.01)   (0.08)  Adjusted earnings (loss) per share - diluted   (0.30)   0.00    0.20    0.14       0.04    0.01   Weighted average shares outstanding - diluted   17,887,859    17,892,891    18,512,266    19,605,427       19,094,382    19,514,385  

 contacts  25  Kalle Ahl, CFA (212) 836-9614kahl@equityny.comDevin Sullivan(212) 836-9608dsullivan@equityny.com   Kyle Loudermilk, CEO(410) 970-7800kyle.loudermilk@gses.comChris Sorrells, COO(410) 970-7802chris.sorrells@gses.com