GSE Systems, Inc. (“GSE” or “the Company”) (NYSE Amex: GVP)
, a global energy services solutions provider, announced financial results for the fourth quarter and year ended December 31, 2011.
Jim Eberle, Chief Executive Officer of GSE, commented, “2011 was an important and eventful year for GSE: we increased revenue, improved our margins significantly, operated profitably, and made notable progress towards diversifying our revenue streams and broadening our portfolio of energy services solutions.
“During 2011, we closed the acquisition of GSE EnVision, introduced a suite of new products, commercialized our 3D Visualization business, made strategic hires, and completed a reorganization designed to focus our energies and provide a firm foundation for growth. In 2011, we were awarded contracts totaling $44.4 million, $16.1 million of which were awarded in Q4 2011. Thus far in Q1 2012, we have announced $8.0 million in new contracts. All of these awards address a variety of energy end markets, including nuclear, fossil, process simulation, 3D Visualization, training, and engineering services. GSE’s business development activities and organic growth initiatives align with our core operating thesis that as energy demand continues to rise, the looming shortage of qualified energy operations professionals – many of whom are at or near retirement age - remains a growing industry concern.”
Mr. Eberle continued, “Our financial position at December 31, 2011 included cash and cash equivalents of $20.3 million, or $1.09 per diluted share, working capital of $30.2 million, and $0 in long-term debt.”
Q4 2011 RESULTS
Q4 2011 revenue was $15.0 million, up 21.7% from $12.3 million in Q4 2010, reflecting a change in scope to an ongoing simulation project and a $0.9 million revenue contribution from GSE EnVision Inc., which was acquired in January 2011.
Gross profit in Q4 2011 rose to $4.5 million, or 30.0% of revenue, from $1.9 million, or 15.7% of revenue, in Q4 2010. A significant portion of the improvement is attributable to the fact that in Q4 2010, the Company had a large negative adjustment due to the above-mentioned change in project scope and no corresponding adjustment in Q4 2011. Additionally, only 3.9% of total Q4 2011 revenue was comprised of lower margin revenue from the Slovak reactor project as compared to 18.9% of total revenue in Q4 2010. Also contributing to the improved Q4 2011 gross margin was revenue from GSE EnVision, whose products typically generate a substantially higher gross profit margin than the Company’s normal gross profit margin.