COLUMBIA, Md., April 2 /PRNewswire/ -- GSE Systems, Inc. (GSE)
(Amex: GVP), a leading global provider of real time simulation and process
control solutions, during the month of March, announced the sale of certain
assets of its VirtualPlant operation which will result in a restructuring of
the company in order to focus on its existing core businesses of real time
simulation and process control. The financial results for the Year 2000
reflect a loss of $8.8 million or $1.70 per diluted share for the year ended
December 31, 2000. The loss includes the Company's $4.3 million investment in
VirtualPlant which enabled GSE to become a significant shareholder after the
sale of VirtualPlant to Avantium International B.V. ("Avantium"). The Process
business lost a total of $3.6 million for the year, consisting of a
$2.1 million loss in the first half of the year, and restructuring costs of
$2.1 million in the second half of the year. Also included in the
$8.8 million loss was interest expense of $0.7 million, and an income tax
expense of $2.5 million. The total loss of $8.8 million compares to a small
profit for the prior year. The fourth quarter results are shown on the
attached schedule.
The Power business had income on operations of $2.3 million for the year.
This business continued to show strong profitable performance for the year
capturing significant business in the fossil simulation market segment.
Although the Process business lost money during 2000 including the one-time
charges, the Process business produced $0.6 million in operating income in the
second half of the year excluding the restructuring costs. In the course of
restructuring its Process business, GSE reduced personnel, outsourced its
manufacturing and assembly operations and sold its Belgium operations that
resulted in a significant one-time charge to closeout this business. We enter
2001 with both the Power and Process businesses profitable.
During 2000 the Company continued to develop and invest extensively in its
VirtualPlant business and marketing strategy that was introduced in 1999. GSE
sold its VirtualPlant technology for stock in Avantium increasing its
ownership to 18% in Avantium. This enables GSE to share in the future success
of Avantium as an investor. Avantium's other investor shareholders include
Shell International Chemicals, WR Grace, Glaxo SmithKline, Akzo Nobel
Chemicals and Pfizer as well as the venture capital companies S. R. One, NIB
Capital and Funds managed by Generics Asset Management. Also participating
are three Dutch universities; Delft University of Technology, Eindhoven
University of Technology, and the University of Twente.
"We are optimistic about 2001 as we see opportunities to apply our
simulation technology to help utilities optimize plant performance in a new
competitive environment. We are proud that our latest D/3 software release
provides our Process customers with a more powerful and flexible system to
control and optimize their plants." said Jerry Jen, the new President and
Chief Operating Officer.
GSE Systems, Inc. develops and delivers business and technology solutions
by applying process control, simulation software, systems and services to the
energy, process and manufacturing industries worldwide. The Company's
products are used in the following industries: specialty chemical, food and
beverage, petroleum refining, pharmaceutical, and fossil and nuclear power
generation. GSE Systems is headquartered in Columbia, Maryland with offices
in Alabama, Georgia, Louisiana, Maryland, North and South Carolina,
Pennsylvania, and Texas, and its global locations include offices in Japan,
and Sweden. Information about GSE Systems is available via the Internet's
World Wide Web at http://www.gses.com . The GSE Systems 2000 conference call
is being webcast at http://www.streetevents.com on Tuesday April 3, at 11 am.
This news release contains forward-looking statements that involve risks
and uncertainties. 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, 2000 as
filed with the Securities and Exchange Commission.
To receive additional information on GSE Systems, Inc., via fax at no
charge, dial 1-800-PRO-INFO and enter ticker symbol GVP.
GSE Systems, Inc.
Selected Financial Data
(In thousands, except share and per share data)
CONDENSED STATEMENTS OF OPERATIONS
Three months ended Twelve months ended
December 31, December 31
2000 1999 2000 1999
Contract revenue $ 13,597 $ 15,547 $ 55,715 $ 66,699
Cost of revenue 11,362 9,977 40,822 41,629
Gross profit 2,235 5,570 14,893 25,070
Operating expenses 5,365 6,481 19,548 24,326
Operating income
(loss) (3,130) (911) (4,655) 744
Other income
(expense)(A) (1,204) (165) (1,622) (410)
Income (loss) before
taxes (4,334) (1,076) (6,277) 334
Provision for
income taxes 3,246 (301) 2,537 233
Net income (loss) $(7,580) $(775) $(8,814) $101
Basic earnings
(loss) per share $(1.46) $(1.16) $(1.70) $0.02
Weighted average
shares outstanding
- Basic 5,193,527 5,065,688 5,181,972 5,065,688
Diluted earnings
(loss) per share $(1.45) $(0.15) $(1.70) $0.02
Weighted average
shares outstanding
- Diluted 5,193,527 5,065,688 5,181,972 5,351,474
A -- Other income (expense) for the three months and year ended
December 31, 2000 includes a $1 million loss on the sale of the
Company's Belgium subsidiary.
Selected balance sheet data
Dec. 31, 2000 Dec. 31, 1999
Cash and cash equivalents $1,465 $2,695
Current assets $20,368 $25,439
Total assets $35,949 $43,027
Current liabilities $14,846 $16,774
Long-term liabilities $12,390 $9,083
Stockholders' equity $8,713 $17,170
Selected segment information
Three months ended Twelve months ended
December 31, December 31,
2000 1999 2000 1999
Process Solutions
Business Unit Revenue $5,309 $6,523 $ 25,208 $34,638
Power Systems
Business Unit Revenue 8,288 9,024 30,507 32,061
$13,597 $15,547 $ 55,715 $66,699
SOURCE GSE Systems, Inc.
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Related links:
http://www.gses.com
CONTACT:
Gill R. Grady, Senior Vice President of GSE
Systems, Inc., 410-772-3500, or General info, Maura Gedid, or
Analyst info, Susan Garland, both of The Financial Relations
Board BSMG Worldwide, 212-661-8030
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