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
Date of Report (Date of earliest event reported): May 15, 2003
GSE Systems, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-26494 52-1868008
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(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification
no.)
9189 Red Branch Road, Columbia, MD 21045
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (410) 772-3500
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(Former name or former address, if changed since last report)
Item 5. Other Events
http://www.gses.com
AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Gill R. Grady Marilynn Meek Susan Garland
Senior Vice President (general info) (analyst info)
410-772-3500 212-445-8451 212-445-8458
FOR IMMEDIATE RELEASE
GSE Systems Announces First Quarter Results
(Power Simulation Returns to Profitability)
Columbia, Maryland, May 15, 2003-- GSE Systems, Inc. (GSE) (AMEX:GVP), a leading
global provider of real-time simulation and process control solutions to the
energy and process industries, reported a net loss of ($518,000) or ($.10) per
diluted share for the quarter ended March 30, 2003. This compares to a net
income of $432,000 or $.06 per diluted share for the same period in 2002.
Revenue for the three months ended March 30, 2003 was $9.3 million compared to
$11.3 million for the first quarter of 2002.
The Company's Power Simulation business reported an 8% increase in revenue and a
positive operating income for the quarter, compared to a loss of $597,000 for
the same period in 2002. These results mark a turnaround in the simulation
business, and include a $42,000 investment in the Company's emerging business of
Plant Security and Process Plant Simulation. Revenue for the first quarter of
2003 was $4.9 million compared to $4.6 million in the first quarter of 2002. The
first quarter 2003 numbers were bolstered by the previously reported receipt of
major simulation projects that had been delayed from 2002. The Power Simulation
business had a backlog of $26.2 million at the end of the first quarter, the
highest in several years. Backlog is expected to grow in the second quarter and
the business is expected to remain profitable.
The Process Automation business reported revenue of $4.3 million for the first
quarter of 2003, compared to $6.7 million for the same quarter in 2002. The
business reported an operating loss of $357,000 compared to an operating income
of $1.25 million for the first quarter of 2002. These results reflect a soft
economy in the key chemical market. The Company expects an increase in orders
and a return to profitability in the second half of the year.
GSE President and Chief Operating Officer, Jerry Jen said, "Our simulation
business is rebounding and we anticipate a strong year. We also expect spending
from our process automation customers to increase as the economy improves. We
look forward to growth from our existing customer base as well as new customers
as our marketing programs and sales channels continue to expand. As a result of
our recently completed facility consolidation and other actions, the management
team is keeping costs in line with revenues."
Mr. Jen concluded: "We will be attending two important trade shows for our
target segments of the security market in June. Proposal activities are
increasing, and we expect to establish a firm foothold in that market in 2003."
The GSE Systems first quarter 2003 conference call is being webcast at CCBN's
www.companyboardroom.com on Friday May 16, at 11:00 am. Contact Gill Grady at
410.772.3501
* * *
GSE Systems, Inc. is a real-time simulation, process control, and automation
company with three decades of experience, over 500 applications, and 200
customers in more than 30 countries. Our software, hardware and integrated
solutions leverage proven technologies to deliver real-world business advantages
to the process and power industries worldwide including specialty chemical, food
and beverage, petroleum refining, pharmaceutical, and fossil and nuclear power
generation. GSE Systems is headquartered in Columbia, Maryland with offices
throughout the United States. Our global locations include offices in Japan and
Sweden. Information about GSE Systems is available via the Internet at
http://www.gses.com.
This news release contains forward-looking statements that involve risks and
uncertainties. The actual future results of GSE Systems may differ materially
due to a number of factors, including but not limited to delays in introduction
of products or enhancements, size and timing of individual orders, rapid
technological changes, market acceptance of new products and competition. These
and other factors are more fully discussed in the Company's annual report on
Form 10-K for the year ended December 31, 2002 as filed with the Securities and
Exchange Commission.
GSE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
CONDENSED STATEMENTS OF OPERATIONS
Three months
ended March 31,
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2003 2002
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Contract revenue $ 9,263 $ 11,274
Cost of revenue 6,905 7,791
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Gross profit 2,358 3,483
Operating expenses 2,752 2,758
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Operating income (loss) (394) 725
Other Expense (87) (25)
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Income (loss) before income taxes (481) 700
Provision for income taxes 37 268
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Net income (loss) $ (518) $ 432
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Basic earnings per common share $ (0.10) $ 0.06
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Wieghted average shares outstanding - Basic 5,869,138 5,844,788
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Diluted earnings per common share $ (0.10) $ 0.06
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Weighted average shares outstanding - Diluted 5,869,138 7,551,581
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Selected balance sheet data
March 31, 2003 December 31, 2002
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Cash and cash equivalents $ 209 $ 1,617
Current assets 15,581 17,202
Total assets 26,595 28,894
Current liabilities $ 15,411 $ 11,166
Long-term liabilities 3,467 9,617
Stockholders' equity 7,717 8,111
Selected segment information
Three months ended
March 31,
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2003 2002
Revenue: -------------- -------------
Process Solutions Business Unit $ 4,331 $ 6,701
Power Systems Business Unit 4,932 4,573
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$ 9,263 $ 11,274
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