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): November 12, 2004
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 8.1 Other Events
http://www.gses.com
AT THE COMPANY
John V. Moran
Chief Executive Officer
FOR IMMEDIATE RELEASE
GSE Systems Announces Third Quarter Results and Contract Awards
Columbia, Maryland, November 12, 2004-- GSE Systems, Inc. (GSE) (AMEX:GVP), a
leading global provider of real-time simulation and training solutions to the
energy, process, manufacturing and government sectors, reported third quarter
results today. Total contract revenue for the quarter ended September 30, 2004
totaled $7.3 million, which was 19.6% higher than the $6.1 million total revenue
for the quarter ended September 30, 2003. Revenue for the nine months ended
September 30, 2004 was $22.5 million versus $16.7 million in the same period of
2003, a 35.0% increase.
In the third quarter 2004, the Company made adjustments to the estimated costs
to complete several of its long-terms contracts which resulted in a net
reduction of the project-to-date revenue and gross profit recognized on the
projects of approximately $288,000. This resulted in a loss from continuing
operations of $197,000 or ($0.02) per diluted share for the quarter ended
September 30, 2004. This compares to a loss from continuing operations of
$313,000 or ($0.06) per diluted share in the comparable quarter in 2003. For the
nine months ended September 30, 2004, the Company had income from continuing
operations of $143,000 or $.02 per diluted share as compared to a loss from
continuing operations of $1.0 million or ($.20) per diluted share.
The Company recently received contracts to build three fossil power plant
simulators through Emerson Electric. Other recent major modification and upgrade
contracts are for utilities such as Constellation Energy, American Electric
Power and Dominion Nuclear. In addition, the Company sold over $700,000 in
licenses for its simulation technology to both domestic and international
customers. The total value of the contracts received during the third quarter
and October 2004 exceeds $5 million.
John V. Moran, GSE's Chief Executive Officer said "Despite the cost adjustment
on a few long term contracts, there were several positive signs from the third
quarter results. Revenue continues to be strong, we continue to operate debt
free and we continue to build our new business pipeline."
The Company has scheduled an investor conference call for 11:30 A.M. EDT on
Wednesday, November 17th. The dial-in number for the live conference call will
be #800-223-9488 or 785-832-1523 and the Conference ID is GSE. A telephone
replay of the call will be available 1 hour after the conclusion of the
conference call on November 17th until November 20th at 11:59 PM (EDT). To
listen to the replay, dial #800-839-8389. A question and answer session will be
held at the conclusion of the presentation. Participants can email questions at
any time during the presentation to gsecall@gses.com.
* * *
GSE Systems, Inc. provides real-time simulation and training solutions. The
company has over three decades of experience, over 250 applications, and 100
customers in more than 25 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. Our global
locations include offices in Sweden, Japan and China. 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. We use words such as "expects", "intends" and "anticipates" to
indicate forward looking statements. 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, 2003,
periodic reports and registration statements filed with the Securities and
Exchange Commission.
If any one or more of these expectations and assumptions proves incorrect,
actual results will likely differ materially from those contemplated by the
forward-looking statements. Even if all of the foregoing assumptions and
expectations prove correct, actual results may still differ materially from
those expressed in the forward-looking statements as a result of factors we may
not anticipate or that may be beyond our control. While we cannot assess the
future impact that any of these differences could have on our business,
financial condition, results of operations and cash flows or the market price of
shares of our common stock, the differences could be significant. We do not
undertake to update any forward-looking statements made by us.
GSE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
CONDENSED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
September 30, September 30,
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2004 2003 2004 2003
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Contract revenue $ 7,340 $ 6,139 $ 22,498 $ 16,660
Cost of revenue 5,835 4,654 17,379 12,980
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Gross profit 1,505 1,485 5,119 3,680
Operating expenses 1,760 1,683 4,817 4,435
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Operating income (loss) (255) (198) 302 (755)
Other income (expense), net 14 (115) (129) (268)
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Income (loss) from continuing operations before income taxes (241) (313) 173 (1,023)
Provision (benefit) for income taxes (44) - 30 22
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Income (loss) from continuing operations (197) (313) 143 (1,045)
Loss from discontinued operations - (121) - (1,039)
Income (loss) on sale of discontinued operations 60 (262) 60 (262)
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Net income (loss) $ (137) $ (696) $ 203 $ (2,346)
========= =========== ======== ==========
Basic earnings (loss) per common share:
Continuing operations $ (0.02) $ (0.06) $ 0.02 $ (0.20)
Discontinued operations - (0.07) - (0.23)
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$ (0.02) $ (0.13) $ 0.02 $ (0.43)
========== ========== ========= ===========
Weighted average shares outstanding - Basic 8,949,706 6,019,138 8,949,706 5,974,083
========== ========== ========== ===========
Diluted earnings (loss) per common share
Continuing operations $ (0.02) $ (0.06) $ 0.02 $ (0.20)
Discontinued operations - (0.07) - (0.23)
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$ (0.02) $ (0.13) $ 0.02 $ (0.43)
========== =========== ========= ===========
Weighted average shares outstanding - Diluted 8,949,706 6,019,138 8,993,473 5,974,083
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Selected balance sheet data
(Unaudited)
September 30, 2004 December 31, 2003
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Cash and cash equivalents $ 1,025 $ 1,388
Current assets 11,629 12,953
Total assets 15,051 16,536
Current liabilities $ 8,511 $ 10,416
Long-term liabilities 661 441
Stockholders' equity 5,879 5,679