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GSE Systems Announces Fourth Quarter And Full Year 2018 Financial Results

Mar 14, 2019 | 2019, News

Columbia, MD – March 14, 2019 – GSE Systems, Inc. (“GSE” or “the Company”) (Nasdaq: GVP), a leading provider of engineering, expert staffing, and simulation software to clients in the power and process industries, today announced its financial results for the fourth quarter (“Q4”) and fiscal year ended December 31, 2018.


  • Acquired True North Consulting LLC, on May 11, 2018.
  • Revenue expanded 30.1% to $92.2 million, from $70.9 million in 2017.
  • Gross profit increased 24.7% to $23.1 million from $18.5 million in 2017.
  • Operating income increased 5% to $1.4 million from $0.2 million in 2017.
  • Net loss of $(0.4) million, or $(0.02) per diluted share, compared to net income of $6.6 million1,2, or $0.33 per diluted share, in 2017.
  • Adjusted net income3 grew 55.0% to $4.7 million, or $0.24 per diluted share, from $3.0 million, or $0.15 per diluted share, in 2017.
  • Adjusted EBITDA3 rose 31.6% to $7.4 million from $5.7 million in 2017.
  • Cash flow used in operations totaled $(3.5) million, compared to cash flow provided by operations of $7.3 million1  in 2017.
  • New orders totaled $86.3 million, compared to $55.0 million in 2017.
  • After the fiscal year ended December 31, 2018, the Company acquired DP Engineering on February 15, 2019. GSE and DP Engineering are currently working to resolve an ongoing customer issue, diversify the DP Engineering customer base and integrate the business on to the GSE platform.


  • Revenue increased 3.9% to $22.9 million from $22.0 million in Q4 2017.
  • Gross profit rose 24.9% to $6.5 million from $5.2 million in Q4 2017.
  • Operating income increased 1,079.5% to $1.8 million from $0.2 million in Q4 in 2017.
  • Net income equaled $0.7 million, or $0.03 per diluted share, compared to $6.6 million, or $0.33 per diluted share, in Q4 2017.
  • Adjusted net income increased approximately five fold to$1.1 million, or $0.05 per diluted share, compared to adjusted net income of$0.2 million, or $0.01 per diluted share, in Q4 2017.
  • Adjusted EBITDA rose 7% to$2.8 million from $1.9 million in Q4 2017.
  • New orders equaled$17.7 million compared to$17.9 million in Q4 2017.

At December 31, 2018

  • Cash, cash equivalents and restricted cash totaled $12.1 million.
  • Working capital totaled $12.7 million and current ratio equaled 1.6x.
  • Total debt equaled $8.5 million.
  • Backlog totaled $68.7

1 Refer to the tax benefit of $(6.6) million that the Company recorded in Q4 2017.  As a result, the Company released a net $8.1 million valuation allowance against the deferred tax assets related to the U.S. entities, and a charge of $1.4 million for provision for uncertain tax positions. As a result, for 2017, the Company reflected a tax benefit of $(6.2) million.

2 During the quarter ended June 30, 2018, the Company identified an immaterial error of $1.2 million, or $0.06 per share, in the December 31, 2017 financial statements related to the release of the valuation allowance against deferred tax assets attributable to windfall tax benefits. The financial statements for the year ended December 31, 2017 reflect the correct comparative data.

3 Refer to the non-GAAP reconciliation tables at the end of this press release for a definition of “EBITDA”, “adjusted EBTIDA” and “adjusted net income”.

Kyle J. Loudermilk, GSE’s President and Chief Executive Officer, said, “Our adjusted EBITDA in the fourth quarter of 2018 grew by 46.7% year-over-year to $2.8 million, one of the best quarterly outcomes in our history, while GSE’s full year 2018 adjusted EBITDA rose 31.6% year-over-year to $7.4 million, also one of the best annual outcomes in more than two decades.  Full year 2018 adjusted net income increased 55.0% to $4.7 million, or $0.24 per diluted share.  These strong financial results reflect our ongoing commitment to providing clients with best-in-class engineering and expert staffing solutions, as well as meaningful contributions from the highly-complementary acquisitions of Absolute Consulting in September 2017 and True North Consulting in May 2018.  During the year, we won a range of impressive new business orders globally and maintained a solid backlog despite the wind down of our very large full scope simulator project in the US.  We are very pleased with this sales performance because it supports the validity of our strategy to consolidate the fragmented ecosystem of vendors serving the nuclear power industry. With the strategic acquisition of DP Engineering in February 2019, we have added an outstanding team of professionals with a broad range of engineering capabilities for nuclear power, including a core competency in engineering design modifications implemented during regularly scheduled nuclear plant outages.  We aim to build on our success to date and further enhance GSE’s platform during the remainder of 2019, focusing on the additional value we can create for our clients and shareholders.”

Download this release: Earnings Release FY 2018 Final

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

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.

Company Contact
Kyle Loudermilk
Chief Executive Officer
GSE Systems, Inc.
(410) 970-7800

The Equity Group Inc.
Kalle Ahl, CFA
(212) 836-9614

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