GSE Systems Announces Fourth Quarter and Full Year 2017 Financial Results
SYKESVILLE, MD – March 15, 2018 – GSE Systems, Inc. (“GSE” or “the Company”) (NYSE American: GVP), a 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 fourth quarter (“Q4”) and full year ended December 31, 2017.
FULL YEAR 2017 OVERVIEW
- Acquired Absolute Consulting on September 20 and streamlined international operations in Q4.
- Revenue expanded 33.5% to $70.9 million from $53.1 million in 2016.
- Gross profit increased 14.1% to $18.5 million from $16.3 million in 2016.
- Net income increased to $5.4 million, or $0.27 per diluted share, compared to $1.4 million, or $0.08 per diluted share, in 2016.
- Adjusted net income1 totaled $2.8 million, or $0.14 per diluted share, compared to adjusted net income of $3.6 million, or $0.20 per diluted share, in 2016.
- Adjusted EBITDA1 rose 15.4% to $5.8 million from $5.0 million in 2016.
- Cash flow from operations totaled $7.7 million, compared to $10.2 million in 2016.
- New orders totaled $55.0 million, compared to $79.5 million in 2016.
Q4 2017 OVERVIEW
- Revenue increased 65.7% to $22.0 million from $13.3 million in Q4 2016, first full quarter post Absolute Consulting acquisition.
- Gross profit rose 8.7% to $5.2 million from $4.8 million in Q4 2016.
- Net income equaled $5.4 million, or $0.27 per diluted share, compared to $1.0 million, or $0.05 per diluted share, in Q4 2016.
- Adjusted net loss totaled $(0.1) million, or $(0.01) per diluted share, compared to adjusted net income of $1.9 million, or $0.10 per diluted share, in Q4 2016.
- Adjusted EBITDA totaled $1.8 million, compared to $2.2 million in Q4 2016.
- New orders rose to $17.9 million from $16.7 million in Q4 2016.
At December 31, 2017
- Cash and equivalents of $20.1 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 $11.6 million and current ratio of 1.5x.
- No outstanding long-term debt.
- Backlog totaled $71.4 million, compared to year-end 2016 backlog of $73.2 million.
1 Refer to the non-GAAP reconciliation tables at the end of this press release for a definition of “adjusted EBTIDA” and “adjusted net income”.
Kyle J. Loudermilk, GSE’s President and Chief Executive Officer, said, “GSE closed a terrific 2017 with a solid fourth quarter, successfully delivering on our commitments to our customers and our shareholders. We efficiently executed on our backlog as well as completed our first full quarter after the Absolute Consulting acquisition, resulting in a year over year revenue increase of 66% for Q4. We finished the year with approximately $20 million in cash, which is a reflection of GSE’s operations and strong cash flow generation, especially after our all-cash acquisition of Absolute Consulting for approximately $9 million. While growing, we kept a keen eye on improving our efficiency, streamlining our operations to ensure we are a lean and agile company. Our strong balance sheet keeps us well positioned to further execute on our strategy of leveraging GSE as an exciting platform for a roll-up of a fractured vendor ecosystem serving the nuclear power industry. We have identified and continue to work towards capitalizing on a number of exciting organic and inorganic growth opportunities. 2017 was a year of accomplishment for GSE, and in 2018, we aim to build on our success to grow revenue and further enhance shareholder value.”
About GSE Systems, Inc.
GSE Systems, Inc. is a leading provider of engineering, expert staffing 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 Maryland, with offices in Alabama, Florida, Colorado, Texas, 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.
Chief Executive Officer
GSE Systems, Inc.
The Equity Group Inc.
Kalle Ahl, CFA