GSE Systems Announces Third Quarter 2017 Financial Results
SYKESVILLE, MD – November 14, 2017– GSE Systems, Inc. (“GSE” or “the Company”) (NYSE American: GVP), the world leader in real-time high-fidelity simulation systems and training/consulting solutions to the power and process industries, today announced financial results for the third quarter (Q3) ended September 30, 2017.
Q3 2017 OVERVIEW
- Acquired Absolute Consulting on September 20, adding approximately $40 million in LTM revenue.
- Revenue increased 6.8% to $15.4 million from $14.4 million in Q3 2016.
- Gross profit rose 5.7% to $4.2 million from $4.0 million in Q3 2016.
- Net loss totaled ($0.6) million, or ($0.03) per diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, in Q3 2016.
- Adjusted net income1 increased 65.3% to $0.6 million, or $0.03 per diluted share, from $0.4 million, or $0.02 per diluted share, in Q3 2016.
- Adjusted EBITDA increased 31.0% to $0.9 million from $0.7 million in Q3 2016.
- New orders totaled $9.2 million in Q3 2017.
- Cash flow provided by operations was $0.3 million compared to $2.8 million in Q3 2016.
1 Refer to the non-GAAP reconciliation tables at the end of this press release for a definition of “adjusted EBITDA” and “adjusted net income”.
At September 30, 2017
- Cash and equivalents of $16.5 million, including $1.0 million of restricted cash, compared to $22.9 million, including $1.1 million of restricted cash, at December 31, 2016.
- Working capital of $11.0 million and current ratio of 1.4x.
- No outstanding long-term debt.
- Backlog totaled $76.4 million, compared to $73.2 million at December 31, 2016.
Kyle J. Loudermilk, GSE’s President and Chief Executive Officer, said, “In Q3 2017, GSE delivered year-over-year growth in revenue, adjusted net income and adjusted EBITDA. We completed our acquisition of Absolute Consulting, significantly enhancing GSE’s position as the ‘go to’ provider of consulting solutions to the power industry, with a particular focus on nuclear power. Our combination with Absolute makes us a company of scale, with trailing twelve-month revenue of approximately $100 million. It is also a significant proof point of our thesis that GSE is a terrific platform for consolidating a fragmented vendor ecosystem for nuclear power. Absolute Consulting will begin to contribute meaningfully to our consolidated results in the fourth quarter. Our backlog remains strong, reflecting our focus on organic business initiatives and operational execution. We ended the quarter with approximately $16.5 million of cash and no debt. I am delighted with our progress so far in 2017, and with a robust and active M&A pipeline, we look forward to scaling GSE further.”
About GSE Systems, Inc.
GSE Systems, Inc. is a leading provider of professional and technical engineering, staffing services, and simulation software to clients in the power and process industries. GSE’s products and services are tailored to help customers achieve performance excellence in design, training, compliance, and operations. 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 Columbia, Maryland, Navarre, Florida, Montrose, Colorado, and Beijing, China. Information about GSE Systems is available at www.gses.com.
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.