COLUMBIA, Md., Nov. 14 /PRNewswire/ -- 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 today a net
income of $601,000 or $0.11 per diluted share for its third quarter ended
September 30, 2001, compared to a net loss of $869,000 or $0.17 per diluted
share for the same period in 2000. Revenue for the three months ended
September 30, 2001 was $13.8 million, compared to $13.7 million for the same
period in 2000.
For the first nine months of 2001, the Company reported a net income of
$2.8 million or $0.53 per diluted share, compared to a net loss of
$1.2 million or $0.24 per diluted share for the same period last year.
Jerry Jen, President and Chief Operating Officer, said: "We are very
pleased with the turn around that has been achieved in our Process Controls
business unit. New orders rose 63% for our third quarter over the same
quarter last year, while new orders were up 12% over last year's first nine
months.
"The Process Controls business revenue for the recent quarter was
$8.3 million, compared to $6.7 million for the same quarter last year. Net
operating income was $1.9, compared to a loss of $1.5 million for the third
quarter of 2000. The loss in 2000 included losses associated with GSE's
VirtualPlant operation, which was sold to Avantium International B.V. in March
2001.
"GSE's Power Simulation business had a loss of $521,000 on revenues of
$5.6 million for the third quarter, compared to an operating profit of
$303,000 on revenues of $7.0 million for the same period in 2000. Over half
of this year's loss was due to the delay in several major contract awards. We
expect to receive the delayed orders in the fourth quarter of 2001. The
balance of the loss was associated with our investment to improve our SimSuite
Pro technology for the process simulation market. We consolidated all of
GSE's simulation technology in the Power Simulation business unit in the
second quarter in order to provide better technical coordination and
advancement among all simulation technologies."
"We have continued to invest in our Process Simulation product, and will
be releasing a new version in December 2001 with significant improvements to
our product. We already have a few orders in the pipeline for this new
version, which will be delivered during the first quarter of 2002." Jen added.
"We also continue to invest in product development and marketing
activities for both business units. Our focus for the power industry is in
anticipation of growth driven by increasing energy needs both domestically and
worldwide. We have expanded our marketing channels through the recently
announced alliances with General Physics and Powergen. We are also looking to
leverage the technology we have for plant access control and intrusion
detection in light of recent security concerns at nuclear plants and other
sensitive locations. We have implemented our software at various nuclear
power plants in the US, and see applications at other facilities. Our system
is the command and control center that ties together card readers, retinal
scanners, closed circuit TV and other field devices used for intrusion
detection and personnel access control."
"For the process industry, our product focus is centering on a new market
segment, which requires a system with the high-end performance of our D/3 DCS
and the lower cost and speed of the PLC market. We are also seeking alliances
for the process business to broaden our market reach. We expect positive
results in the fourth quarter for both the Power Simulation and Process
Control business," Jen concluded.
New orders for the Company for the nine months ended September 30, 2001,
were $33 million up 12% from the same period last year.
The GSE Systems Q3 2001 conference call is being webcast at
http://www.streetevents.com on Thursday, November 15, at 11:00 am.
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. 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 .
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.
GSE Systems, Inc.
Selected Financial Data
(In thousands, except share and per share data)
CONDENSED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
Contract revenue $13,823 $13,694 $38,146 $42,119
Cost of revenue 9,469 10,022 27,538 29,460
Gross profit 4,354 3,672 10,608 12,659
Operating expenses 3,200 4,921 9,199 14,188
Operating income (loss) 1,154 (1,249) 1,409 (1,529)
Other income (expense)(A) (250) (120) 2,704 (418)
Income before taxes 904 (1,369) 4,113 (1,947)
Provision for income taxes 303 (500) 1,330 (710)
Net income $601 $(869) $2,783 $(1,237)
Basic earnings per share $0.12 $(0.17) $0.54 $(0.24)
Weighted average shares
outstanding - Basic 5,206,944 5,193,527 5,197,999 5,190,198
Diluted earnings per share $0.11 $(0.17) $0.53 $(0.24)
Weighted average shares
outstanding - Diluted 5,288,752 5,193,527 5,232,330 5,190,198
(A) - Other income (expense) for the nine months ended September 30, 2001
includes a $3.3 million gain on the sale of the Company's VirtualPlant
business technology and assets.
Selected balance sheet data
September 30, December 31,
2001 2000
Cash and cash equivalents $977 $1,465
Current assets 23,938 20,368
Total assets 41,803 35,949
Current liabilities $16,076 $14,846
Long-term liabilities 14,198 12,390
Stockholders' equity 11,529 8,713
Selected segment information
Three months ended Nine months ended
September 30, September 30,
2001 2000 2001 2000
Revenue:
Process Solutions Business Unit (B) $8,268 $6,694 $17,744 $19,899
Power Systems Business Unit 5,555 7,000 20,402 22,220
$13,823 $13,694 $38,146 $42,119
(B) - The Company sold its Belgian business in November 2000 and its
VirtualPlant business in March 2001. Whereas the Process segment revenue
for the three months ended September 30, 2001 included no revenue from
these divested businesses, the Process revenue for the three months ended
September 30, 2000 included revenue of $1.5 million. For the nine months
ended September 30, 2001 and 2000, Process revenue included $507,000 and
$6.6 million, respectively, for these two divested businesses. The
Process 2000 revenue also includes $2.9 million from a software-license
sold to Avantium International B.V.
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, +1-212-445-8458,
both of FRB Weber Shandwick
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