SYS-CON MEDIA Authors: Jim Kaskade, Yeshim Deniz, Elizabeth White, Greg Ness, Sean Houghton

News Feed Item

GSE Systems Announces 2014 First Quarter Financial Results

GSE Systems, Inc. (“GSE” or “the Company”) (NYSE MKT: GVP), a global energy services solutions provider, today announced financial results for the first quarter (“Q1”) ended March 31, 2014.

Jim Eberle, Chief Executive Officer of GSE, commented, “Our Q1 results reflect that our end markets remain challenging as fossil fuel powered utilities delay their capital expenditures due to the economic and regulatory uncertainties of coal-fired power plants in light of low natural gas prices. Our balance sheet remains strong, and our acquisition initiatives are proceeding in earnest. We remain focused on diversifying our revenue base and solutions portfolio, while operating under the over-arching theme that our long-term market opportunity lies at the intersection of increasing global energy demand and the shortage of qualified energy workers.”

Q1 2014 RESULTS

Q1 2014 revenue declined 29.5% to $8.7 million from $12.4 million in Q1 2013. Revenue from the $36.6 million Slovakia simulator project declined from $2.9 million in Q1 2013 to $0.7 million in Q1 2014. This project was completed in April 2014. In addition, revenue from fossil fuel simulation decreased by $1.2 million in Q1 2014 as compared to Q1 2013 due to the completion of several large projects in 2013 and a continued sluggishness in capital spending by fossil fuel utilities due to the economic and regulatory uncertainties of coal-fired power plants as a result of natural gas prices.

Gross profit in Q1 2014 was $2.2 million, or 25.5% of revenue, as compared to $3.1 million, or 24.9% of revenue, in Q1 2013. Although SG&A expenses in Q1 2014 were consistent with Q1 2013, included in the SG&A expenses were severance costs of $0.3 million in Q1 2014 versus $0.1 million in Q1 2013 and foreign currency transaction losses of $0.2 million in Q1 2014 versus $0.1 million in Q1 2013.

Operating loss for Q1 2014 was $2.1 million compared to an operating loss of $1.3 million in Q1 2013. The increase in operating loss is mainly the result of lower total revenue.

Net loss for Q1 2014 was $2.0 million, or $0.11 per basic and diluted share, compared to a net loss of $1.2 million, or $0.06 per basic and diluted share, in the same period last year.

The EBITDA (Earnings before interest, taxes, depreciation and amortization) loss for Q1 2014 was $1.8 million compared to an EBITDA loss of $0.9 million in Q1 2013.

Backlog at March 31, 2014 was $34.8 million compared to $38.0 million at December 31, 2013.

GSE’s cash position at March 31, 2014 was $20.8 million, excluding $1.0 million of restricted cash, as compared to $15.6 million at December 31, 2013. The $5.2 million improvement was due primarily to the collection of a trade receivable from a Slovakian utility customer in Q1 2014.

CONFERENCE CALL

Management will host a conference call this afternoon at 4:30 pm Eastern Time to discuss Q1 results and other matters.

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=172749

ABOUT GSE SYSTEMS, INC.

GSE Systems, Inc. is a world leader in real-time high-fidelity simulation, providing a wide range of simulation, training and engineering solutions to the energy 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 St. Marys, Georgia; Cary, North Carolina; Chennai, India; Nyköping, Sweden; Stockton-on-Tees, UK; Glasgow, UK; 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.

GSE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
 
  (unaudited)
Three Months ended
March 31,
2014   2013
 
 
Contract revenue $ 8,724 $ 12,383
Cost of revenue   6,500     9,302  
 
Gross profit 2,224 3,081
 
Selling, general and administrative 4,144 4,165
Depreciation 139 153

Amortization of definite-lived intangible assets

  36     52  
Operating expenses   4,319     4,370  
 
Operating loss (2,095 ) (1,289 )
 
 
Interest income, net 31 39
Gain on derivative instruments, net 104 267
Other expense, net   (10 )   (105 )
 
Loss before income taxes (1,970 ) (1,088 )
 
Provision for income taxes   54     67  
 
Net loss $ (2, 024 ) $ (1,155 )
 
 
 
Basic loss per common share $ (0.11 ) $ (0.06 )
Diluted loss per common share $ (0.11 ) $ (0.06 )
 
 
Weighted average shares outstanding - Basic   17,887,859     18,340,554  
Weighted average shares outstanding - Diluted   17,887,859     18,340,554  
GSE SYSTEMS, INC AND SUBSIDIARIES
Selected balance sheet data
   
(unaudited)
March 31, 2014 December 31, 2013
 
Cash and cash equivalents $ 20,756 $ 15,643
Restricted cash - current 11 45
Current assets 39,080 43,944
Long-term restricted cash 1,021 1,021
Total assets 43,969 48,827
 
Current liabilities $ 15,355 $ 17,953
Long-term liabilities 68 487
Stockholders' equity 28,546 30,387

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,
2014 2013
 
Net loss $ (2,024 ) $ (1,155 )
Interest income, net (31 ) (39 )
Provision for income taxes 54 67
Depreciation and amortization   175     205  
EBITDA $ (1,826 ) $ (922 )

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrateg...
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to th...
What do a firewall and a fortress have in common? They are no longer strong enough to protect the valuables housed inside. Like the walls of an old fortress, the cracks in the firewall are allowing the bad guys to slip in - unannounced and unnoticed. By the time these thieves get in, the damage is already done and the network is already compromised. Intellectual property is easily slipped out the back door leaving no trace of forced entry. If we want to reign in on these cybercriminals, it's hig...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...