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GSE Systems Announces 2012 First Quarter Financial Results

Stocks in this article: GVP

NEW CONTRACTS

GSE also announced that it has received more than $5.0 million of new orders subsequent to Q1 2012 . The largest of these orders was generated by GSE’s wholly-owned subsidiary, GSE EnVision LLC. Under a multi-year agreement, GSE EnVision will provide simulation and computer-based learning modules to assist the subsidiary of a global energy services company in core fundamental operations training for control room operators, instrumentation and maintenance technicians, and process engineers in multiple refinery and ethylene plants, as well as engineering centers. Other contracts included work extensions on existing projects, including additional work on two small modular reactor simulators.

Mr. Eberle, “These new awards are indicative of our continuing focus on business development. GSE EnVision’s robust library of generic refining models, comprehensive tutorials, and a learning management system complements GSE’s customized, high-fidelity simulation and training systems. GSE EnVision’s products provide introductory training on fundamental systems and equipment common across the electric generation, oil & gas refining, and chemical industries, which allow users to establish a working knowledge of process fundamentals, plant operations, and interaction. With this knowledge, energy professionals are better prepared to utilize the full-scope, real-time simulators provided by GSE. We will continue to introduce GSE EnVision’s products in our established power markets, and pursue additional sales opportunities in new and existing customer channels.”

SHARE REPURCHASE

Under the provisions of the share repurchase program authorized by GSE’s Board of Directors in March 2011, during the three months ended March 31, 2012, GSE repurchased 162,387 shares of common stock for an aggregate purchase price of $0.3 million.

CONFERENCE CALL

Management will host a conference call this afternoon at 4:30 pm Eastern Time to discuss the results. Interested parties may participate in the call by dialing:

  • (877) 407-9753 (Domestic) or
  • (201) 493-6739 (International)

The conference call will also be accessible via the following link: http://www.investorcalendar.com/IC/CEPage.asp?ID=168243

ABOUT GSE SYSTEMS, INC .

GSE Systems, Inc. provides a wide range of simulation and training solutions to the global energy (nuclear and non-nuclear) industry, and is the world leader in nuclear simulation. The Company has over four decades of experience, more than 1,000 installations, and hundreds of customers in over 50 countries spanning the globe. Our software, hardware and integrated training solutions leverage proven technologies to deliver real-world business advantages to the energy, process, manufacturing and government sectors worldwide. GSE Systems is headquartered in Sykesville (Baltimore), Maryland, with offices in St. Marys, Georgia; Tarrytown, New York; Madison, New Jersey; Cary, North Carolina; Chennai, India; Nyköping, Sweden; Stockton-on-Tees, UK; Glasgow, Scotland; and Beijing, China. Information about GSE Systems is available via the Internet at http://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.

 
GSE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
   
(unaudited)
Three Months ended
March 31,
2012 2011
 
 
Contract revenue $ 13,389 $ 12,322
Cost of revenue   9,470   8,847  
 
Gross profit 3,919 3,475
 
Selling, general and administrative 3,486 3,420
Depreciation 137 125
Amortization of definite-lived intangible assets   78   217  
Operating expenses   3,701   3,762  
 
Operating income (loss) 218 (287 )
 
 
Interest income, net 51 33
Gain on derivative instruments, net 400 588
Other income, net   86   65  
 
Income before income taxes 755 399
 
Provision (benefit) for income taxes   225   (614 )
 
Net income $ 530 $ 1,013  
 
 
 
Basic income per common share $ 0.03 $ 0.05  
Diluted income per common share $ 0.03 $ 0.05  
 
 
Weighted average shares outstanding - Basic   18,395,585   19,210,954  
 
Weighted average shares outstanding - Diluted   18,468,818   19,498,353  
 
 
GSE SYSTEMS, INC AND SUBSIDIARIES
Selected balance sheet data  
(in thousands)   (unaudited)
March 31, 2012

December 31, 2011

 
Cash and cash equivalents $ 17,185 $ 20,326
Restricted cash - current 3,241 3,505
Current assets 47,092 47,920
Long-term restricted cash 858 897
Total assets $ 58,728 58,815
 
Current liabilities 17,283 $ 17,680
Long-term liabilities 1,789 2,352
Stockholders' equity $ 39,656 38,783
 

EBITDA Reconciliation

EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”). Management believes EBITDA, in addition to operating profit, net income and other GAAP measures, is useful to investors to evaluate the Company’s results because it excludes certain items that are not directly related to the Company’s core operating performance. Investors should recognize that EBITDA might not be comparable to similarly-titled measures of other companies. This measure 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 EBITDA to the most directly comparable GAAP measure in accordance with SEC Regulation G follows:

   
Three Months ended
March 31,
2012 2011
 
Net income $ 530 $ 1,013
Interest income, net (51 ) (33 )
Provision (benefit) for income taxes 225 (614 )
Depreciation and amortization   215     342  
EBITDA $ 919   $ 708  




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