(Power Simulation Returns to Profitability)
COLUMBIA, Md., May 15 /PRNewswire-FirstCall/ -- GSE Systems, Inc. (GSE)
(Amex: GVP), a leading global provider of real-time simulation and process
control solutions to the energy and process industries, reported a net loss of
($518,000) or ($.10) per diluted share for the quarter ended March 30, 2003.
This compares to a net income of $432,000 or $.06 per diluted share for the
same period in 2002. Revenue for the three months ended March 30, 2003 was
$9.3 million compared to $11.3 million for the first quarter of 2002.
The Company's Power Simulation business reported an 8% increase in revenue
and a positive operating income for the quarter, compared to a loss of
$597,000 for the same period in 2002. These results mark a turnaround in the
simulation business, and include a $42,000 investment in the Company's
emerging business of Plant Security and Process Plant Simulation. Revenue for
the first quarter of 2003 was $4.9 million compared to $4.6 million in the
first quarter of 2002. The first quarter 2003 numbers were bolstered by the
previously reported receipt of major simulation projects that had been delayed
from 2002. The Power Simulation business had a backlog of $26.2 million at
the end of the first quarter, the highest in several years. Backlog is
expected to grow in the second quarter and the business is expected to remain
profitable.
The Process Automation business reported revenue of $4.3 million for the
first quarter of 2003, compared to $6.7 million for the same quarter in 2002.
The business reported an operating loss of $357,000 compared to an operating
income of $1.25 million for the first quarter of 2002. These results reflect
a soft economy in the key chemical market. The Company expects an increase in
orders and a return to profitability in the second half of the year.
GSE President and Chief Operating Officer, Jerry Jen said, "Our simulation
business is rebounding and we anticipate a strong year. We also expect
spending from our process automation customers to increase as the economy
improves. We look forward to growth from our existing customer base as well
as new customers as our marketing programs and sales channels continue to
expand. As a result of our recently completed facility consolidation and
other actions, the management team is keeping costs in line with revenues."
Mr. Jen concluded: "We will be attending two important trade shows for our
target segments of the security market in June. Proposal activities are
increasing, and we expect to establish a firm foothold in that market in
2003."
The GSE Systems first quarter 2003 conference call is being webcast at
CCBN's http://www.companyboardroom.com on Friday May 16, at 11:00 am.
Contact Gill Grady at 410.772.3501
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, 2002 as
filed with the Securities and Exchange Commission.
GSE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
CONDENSED STATEMENTS OF OPERATIONS
Three months
ended March 31,
2003 2002
Contract revenue $9,263 $11,274
Cost of revenue 6,905 7,791
Gross profit 2,358 3,483
Operating expenses 2,752 2,758
Operating income (loss) (394) 725
Other Expense (87) (25)
Income (loss) before income taxes (481) 700
Provision for income taxes 37 268
Net income (loss) $(518) $432
Basic earnings per common share $(0.10) $0.06
Weighted average shares outstanding -
Basic 5,869,138 5,844,788
Diluted earnings per common share $(0.10) $0.06
Weighted average shares outstanding -
Diluted 5,869,138 7,551,581
Selected balance sheet data
March 31, 2003 December 31, 2002
Cash and cash equivalents $209 $1,617
Current assets 15,581 17,202
Total assets 26,595 28,894
Current liabilities $15,411 $11,166
Long-term liabilities 3,467 9,617
Stockholders' equity 7,717 8,111
Selected segment information
Three months ended
March 31,
2003 2002
Revenue:
Process Solutions Business Unit $4,331 $6,701
Power Systems Business Unit 4,932 4,573
$9,263 $11,274
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; or general info, Marilynn Meek,
+1-212-445-8451, or analyst info, Susan Garland, both of FRB
Weber Shandwick, +1-212-445-8458
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