GSE Systems Announces 2015 Third Quarter Financial Results
Q3 2015 OVERVIEW
- Revenue increased 91% to $15.0 million from $7.8 million in Q3 2014, reflecting $5.1 million of incremental revenue from Hyperspring, LLC and a $2.1 million increase in Performance Improvement Solutions revenue, a 27% increase over Q3 2014.
- Implemented a company-wide restructuring program that is expected to deliver permanent annual cash savings of nearly $5 million.
- Adjusted EBITDA was $162,000, the Company’s first positive quarterly adjusted EBITDA figure since Q4 2013.
- Operating loss totaled $3.4 million, including a write-down of capitalized software development costs totaling $1.5 million and restructuring charges totaling $1.6 million, compared to an operating loss of $1.9 million in Q3 2014, including restructuring charges of $0.3 million.
- Excluding the write-down of capitalized software development costs and restructuring charges, adjusted operating loss was $0.3 million, compared to an adjusted operating loss of $1.7 million in Q3 2014.
- Net loss was $3.6 million, or $0.20 per diluted share, compared to a net loss of $1.9 million, or $0.11 per diluted share, in Q3 2014.
At September 30, 2015
- Total cash and equivalents of $16.4 million, or $0.91 per diluted share, including $3.5 million of restricted cash.
- Working capital of $8.3 million and current ratio of 1.4x.
- $0 long-term debt.
- Backlog of $47.5 million, compared to $48.4 million at December 31, 2014.
Sykesville, MD – November 12, 2015 – GSE Systems, Inc. (“GSE” or “the Company”) (NYSE MKT: GVP), the global energy industry performance improvement company, today announced financial results for the third quarter (“Q3”) ended September 30, 2015. Results for Q3 2015 include the results of Hyperspring, LLC (“Hyperspring”), which was acquired on November 14, 2014.
Kyle J. Loudermilk, President and Chief Executive Officer of GSE, said, “We have made considerable progress in the first three months since I joined GSE. During Q3 2015, we initiated a comprehensive review of our global operations and implemented a company-wide restructuring program that is expected to deliver permanent annual cash savings of nearly $5 million. With a streamlined cost structure and operating efficiencies in place, we’ve addressed the first step of our strategic plan, and have positioned GSE for a return to profitability in the quarters to come. In Q3 2015, we recorded adjusted EBITDA of $162,000, our first positive quarterly adjusted EBITDA figure since Q4 2013.”
Mr. Loudermilk continued, “Our quarter-end backlog remained strong at $47.5 million, reflecting our team’s commitment to providing high-quality solutions to our blue-chip client base. During the quarter, our Hyperspring subsidiary received a significant three-year contract, with a total value of up to $35 million, for the continuation of nuclear operations support services to a longstanding, valued customer. Since September 1, we have been awarded multiple contracts with an aggregate value of over $4.6 million, covering nuclear, fossil, and oil and gas projects primarily in Asia and North America. I am optimistic about the business opportunities in front of us, not only in our Performance Improvement Solutions and Nuclear Industry Training and Consulting segments, but also in adjacent markets. Under the next phase of our strategic plan, we expect to take actions to reinvigorate the growth of GSE’s businesses, including enhancing our senior leadership team. We also expect to add new elements to our growth platform over time, including initiatives that support a more diversified, recurring revenue base. I am confident that as we continue to successfully execute our strategy, we will increase cash flow, improve GSE’s strong balance sheet, and enhance shareholder value.”
About GSE Systems, Inc.
GSE Systems, Inc. provides professional and technical engineering, staffing services and simulation software to clients in the power and process industries. Our solutions enhance customer safety and performance across training, design & licensing, engineering, and operations and maintenance. The Company has over four decades of experience, more than 1,100 installations, and customers in over 50 countries spanning the globe. GSE Systems is headquartered in Sykesville (Baltimore), Maryland, with offices in Columbia, Maryland, Montrose, Colorado, Navarre, Florida 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.