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GSE Systems, Inc. (“GSE” or “the Company”) (NYSE MKT: GVP), a global energy services solutions provider, announced financial results for the first quarter ended March 31, 2012.
Jim Eberle, Chief Executive Officer of GSE, commented, “In Q1 2012, we successfully built upon the themes that made 2011 a historic year for GSE. We generated improvements in revenue, gross margin, and operating income over Q1 2011, diversified our revenue streams and broadened our portfolio of energy services solutions, and maintained a strong financial position. We are very pleased with the progress of our business development efforts, which contributed to a $5.0 million increase to our backlog at March 31, 2012 from December 31, 2011. During Q1 2012, were awarded contracts totaling $17.8 million that address diverse end markets, such as nuclear, fossil, process simulation, engineering, and training, and serve global geographies, including China.”
Mr. Eberle continued, “Each of our business development activities and 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.”
Q1 2012 RESULTS
Q1 2012 revenue was $13.4 million, up 8.7% from $12.3 million in Q1 2011, due primarily to higher fossil simulation revenue.
Gross profit in Q1 2012 rose to $3.9 million, or 29.3 % of revenue, from $3.5 million, or 28.2% of revenue, in Q1 2011, due to a combination of factors. Revenue related to the full scope simulator and digital control system order from a Slovak utility, which has an overall lower gross profit percentage than GSE’s normal gross profit percentage, declined to $1.1 million, or 8.0% of total revenue in Q1 2012, from $1.7 million, or 14.2% of revenue, in Q1 2011. Also contributing to the improved Q1 2012 gross profit percentage was higher revenue from the Company’s fossil simulation business.
Operating income for Q1 2012 improved to $0.2 million from an operating loss of $0.3 million in Q1 2011. The improvement primarily reflects higher revenues and gross profit percentage in Q1 2012, and a decline in amortization expense related to the acquisitions of TAS Engineering Consultants in 2010 and EnVision Systems in 2011.