COLUMBIA, Md., Aug. 8 /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 income of $123,000 or $.01 per diluted share for the quarter
ended June 30, 2002, slightly better than the break-even forecast provided at
the end of the first quarter. This compares to a net income of $468,000 or
$.09 per diluted share for the same period in 2001. Revenue for the three
months ended June 30, 2002 was $12.1 million compared to $11.8 million for the
second quarter of 2001.
Year-to-date 2002, the Company earned a net income of $555,000 or $.07 per
diluted share. On an adjusted basis this compares to a net loss of $44,000 in
the first half of 2001 after excluding the one-time, after tax gain on the
sale of the Company's Virtual Plant assets. Net income in the first half of
2001 was $2.2 million or $.42 per diluted share, and included a $3.3 million
pre-tax gain on the sale of its Virtual Plant business. Operating income for
the six months ended June 30, 2002 was $945,000 compared to $255,000 for the
first six months of 2001.
President and Chief Operating Officer, Jerry Jen, said, "GSE's Process
Automation business continues its strong performance. Our new product
releases and expanded distribution channels are laying a solid foundation for
the future of this business. The Company's Power Simulation business remains
soft however with delays in the receipt of some large international orders.
We expect to receive some of those delayed contract awards in the very near
future, which will help to improve revenues for the balance of the year."
The Process Automation business revenue for the recent quarter rose 66% to
$6.9 million versus $4.1 million for the same quarter in 2001. Operating
income also grew, reaching $733,000 for the quarter ended June 30, 2002,
versus an operating income of $107,000 for the same period in 2001. The
Company's Power Simulation business had an operating loss of $441,000 on
revenue of $5.2 million versus $7.7 million revenue for the second quarter of
2001. Included in the Power Simulation operating results are the Company's
investments in emerging businesses of plant security, real-time engineering
and process simulation, which totaled $187,000 for the second quarter, ended
June 30, 2002.
"We have invested quite heavily in R&D and marketing in the first half of
this year, particularly in our Process Automation business. We expect that
our new product offering and channels to market will enable us to grow our
customer base in a market segment that has not been well served by the
distributed control systems suppliers in the past," stated Mr. Jen.
Mr. Jen concluded, "GSE's plant security business received its first
contract award, and proposal activity has significantly increased in that
business area. We recently announced a teaming arrangement with ManTech
Security Technologies Corporation, Protection Strategies Inc., and MECX to
assist both the nuclear and chemical industries in assessing their security
vulnerabilities and risks. We expect continued growth in this business area."
The GSE Systems Q2 2002 conference call is being webcast at CCBN's
http://www.companyboardroom.com on Friday August 9, 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, 2001 as
filed with the Securities and Exchange Commission.
GSE SYSTEMS, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(In thousands, except share and per share data)
(Unaudited)
CONDENSED STATEMENTS OF INCOME
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
Contract revenue $12,131 $11,845 $23,405 $24,323
Cost of revenue 8,382 8,563 16,173 18,069
Gross profit 3,749 3,282 7,232 6,254
Operating expenses 3,529 2,818 6,287 5,999
Operating income 220 464 945 255
Other income (expense) (A) (20) (111) (45) 2,954
Income before taxes 200 353 900 3,209
Provision (benefit) for income
taxes 77 (115) 345 1,027
Net income $123 $468 $555 $2,182
Basic earnings per share $0.01 $0.09 $0.07 $0.42
Weighted average shares
outstanding - Basic 5,869,138 5,193,527 5,857,030 5,193,527
Diluted earnings per share $0.01 $0.09 $0.07 $0.42
Weighted average shares
outstanding - Diluted 6,285,441 5,252,527 6,259,665 5,221,215
(A) Other income (expense) for six months ended June 30, 2001 includes a
$3.3 million gain on the sale of the Company's VirtualPlant business
technology and assets.
Selected balance sheet data
June 30, December 31,
2002 2001
Cash and cash equivalents $1,041 $2,040
Current assets 16,180 19,622
Total assets 32,428 33,674
Current liabilities $14,328 $12,604
Long-term liabilities 3,408 7,218
Stockholders' equity 14,692 13,852
Selected segment information
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
Revenue:
Process Solutions Business Unit2 $6,916 $4,162 $13,617 $9,476
Power Systems Business Unit 5,215 7,683 9,788 14,847
$12,131 $11,845 $23,405 $24,323
SOURCE GSE Systems, Inc.
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Related links:
http://www.gses.com
CONTACT:
Gill R. Grady, Senior Vice President, of GSE
Systems, +1-410-772-3500; or General, Marilynn Meek,
+1-212-445-8451, or Analyst, Susan Garland, +1-212-445-8458, both
of The Financial Relations Board
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