COLUMBIA, Md., May 9 /PRNewswire-FirstCall/ -- GSE Systems, Inc. (GSE)
(Amex: GVP), a leading global provider of real-time simulation and process
control solutions for the energy and process industries, announces better than
anticipated performance in the first quarter of 2002, fueled by the continued
healthy performance of its Process Automation business. Operating income was
$725,000 for the first quarter of 2002 versus a loss of $209,000 in the first
quarter of 2001 despite slightly lower revenue. Revenues for the three months
ending March 31, 2002 and 2001 were $11.3 million and $12.5 million
respectively. Last year's first quarter revenues included $500,000 for the
now divested VirtualPlant business. Net income was $432,000 or $0.06 per
diluted share, versus net income of $1.7 million and $0.33 per share in 2001.
The Company noted that net income figures in 2001 included a $2.0 million
after tax gain on the sale of its VirtualPlant business.
Process Automation business revenues (excluding the divested VirtualPlant
business) grew 40% year to year, reaching $6.7 million in the first quarter of
2002. Operating income was $1.25 million in the first quarter 2002, up from
$43,000 a year ago. The Company attributes the continued strong performance
to customer recognition of the benefits of GSE's newer technology.
The Company's Power Simulation business had revenues of $4.6 million
versus $7.2 million for the same period in 2001. Operating income was a loss
of $597,000 for the quarter versus an income of $557,000 in the first quarter
of 2001. The Power business continues to encounter a slowdown in receipt of
orders. Several of the delayed orders were received in the first quarter and
the Company is converting that backlog to revenue.
GSE's President and Chief Operating Officer, Mr. Jerry Jen, stated: "We
closed several process orders at the end of the first quarter which helped us
beat our break-even forecast. We expect continued good performance from this
group as we introduce our latest state-of-the-art controller hardware during
the second quarter. We are closely watching the power business and have
already taken actions to reduce costs. We are getting a lot of attention with
our plant access control and intrusion detection system, and expect to start
receiving awards in the later part of the second quarter. As we stated during
our last investor conference call, we have ramped-up our marketing and R&D
efforts. We expect to see the benefits later in the year, and expect the
second quarter income to be slightly over break-even on level revenue. For
the year, we still expect revenues to be in the range of $50-$52 million, with
fully diluted earnings per-share between $0.25 and $0.28."
GSE Systems, Inc. is a real-time simulation, process control, and
automation company with three decades of experience, over 500 applications,
and 200 customers in more than 30 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 with offices throughout the United States. Our global
locations include offices in Japan and Sweden. 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. 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, 2001 as
filed with the Securities and Exchange Commission.
GSE Systems, Inc.
Selected Financial Data
(In thousands, except share and per share data)
CONDENSED STATEMENTS OF OPERATIONS
Three months ended
March 31,
2002 2001
Contract revenue $11,274 $12,478
Cost of revenue 7,791 9,506
Gross profit 3,483 2,972
Operating expenses 2,758 3,181
Operating income (loss) 725 (209)
Other income (expense)(A) (25) 3,065
Income before taxes 700 2,856
Provision for income taxes 268 1,142
Net income $432 $1,714
Basic earnings per share $0.06 $0.33
Weighted average shares
outstanding - Basic 5,844,788 5,193,527
Diluted earnings per share $0.06 $0.33
Weighted average shares
outstanding - Diluted 7,551,581 5,201,387
(A) Other income (expense) for the three months ended March 31, 2001
includes a $3.3 million pre-tax gain on the sale of the Company's
VirtualPlant business technology and assets.
Selected balance sheet data
March 31, 2002 December 31, 2001
Cash and cash equivalents $1,270 $2,040
Current assets 18,361 19,622
Total assets 32,462 33,674
Current liabilities $16,079 $12,604
Long-term liabilities 1,921 7,218
Stockholders' equity 14,462 13,852
Selected segment information
Three months ended
March 31,
2002 2001
Revenue:
Process Solutions Business Unit $6,701 $5,314
Power Systems Business Unit 4,573 7,164
$11,274 $12,478
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., +1-410-772-3500, general info, Marilynn Meek,
+1-212-445-8451, or analyst info, Susan Garland, +1-212-445-8458,
both of FRB Weber Shandwick
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