COLUMBIA, Md., Nov. 14 /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
($82,000), including $126,000 after tax severance costs or ($.02) per diluted
share for the quarter ended September 30, 2002. This compares to a net income
of $601,000 or $.11 per diluted share for the same period in 2001. Revenue
for the three months ended September 30, 2002 was $10.6 million compared to
$13.8 million for the third quarter of 2001.
Year-to-date 2002, the Company reported net income of $473,000 or $.05 per
diluted share. On an adjusted basis this compares to a net income of $568,000
in the first three quarters of 2001 after excluding the one-time, after tax
gain on the sale of the Company's Virtual Plant assets. Operating income for
the nine months ended September 30, 2002 was $873,000 compared to $1.4 million
for the first nine months of 2001.
President and Chief Operating Officer, Jerry Jen, said: "We are starting
to see quality leads come in from the new distribution channels created
earlier this year for our Process Business. Customer acceptance of our D/3
Compact product is increasing, and we expect the new channels to service a new
market segment for the product. Our recently released D/3 Version 11.0, which
focuses on improving our customer's ROI and provides features for improving
plant operating efficiency, will enhance the possibility for customers to
purchase upgrades to their existing systems."
"The Power Business, which reflects broader trends in the energy sector,
continues to experience delays in receipt of orders in the international
markets. Several projected domestic simulation upgrade projects were awarded
to the Company, but the Department of Energy's recent decision to suspend some
activities in Ukraine has had a negative impact on the Company's third
quarter. As a result of the slow down in orders, the Power Business has
further cut expenses. Signs are positive that we will close much of the
delayed business in Q4 and enter 2003 with a healthy backlog of orders," Jen
added.
The Process Automation business revenue was $5.1 million for the third
quarter, versus $8.3 million for the same quarter in 2001. Operating income
was $77,000 for the quarter ended September 30, 2002, versus an operating
income of $1.9 million for the comparable period in 2001. The Company's Power
Simulation business had an operating loss of ($255,000) on revenue of $5.5
million versus an operating loss of ($521,000) on $5.6 million revenue for the
third quarter of 2001. The Power Simulation component of the business had a
positive operating income excluding (i) a one-time charge for severance of
$205,000 and (ii) continued marketing and R&D investment of $121,000 in the
developing business of security and process plant simulation.
"Also, we are uncovering new revenue opportunities for our simulation
technologies. With the general slowdown in the energy markets, we have
directed our simulation technology to provide a unique capability in the area
of plant operation optimization. As we develop this new application, we are
actively looking for the appropriate partners to help bring this capability to
market."
Mr. Jen concluded: "GSE continues to focus on the plant security business,
and is initiating efforts to address the physical needs of the US chemical
industry in addition to the traditional nuclear power market. We expect
continued growth in this business area with the US policy focusing on Homeland
Security."
The GSE Systems third quarter 2002 conference call is being webcast at
CCBN's http://www.companyboardroom.com on Friday November 15, 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.
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,
2002 2001 2002 2001
Contract revenue $10,612 $13,823 $34,017 $38,146
Cost of revenue 7,576 9,469 23,749 27,538
Gross profit 3,036 4,354 10,268 10,608
Operating expenses 3,108 3,200 9,395 9,199
Operating income (loss) (72) 1,154 873 1,409
Other expense, net(A) (61) (250) (106) 2,704
Income (loss) before taxes (133) 904 767 4,113
Provision (benefit) for
income taxes (51) 303 294 1,330
Net income (loss) $(82) $601 $473 $2,783
Basic earnings (loss) per share $(0.02) $0.12 $0.05 $0.54
Weighted average shares
outstanding - Basic 5,869,138 5,206,944 5,861,111 5,197,999
Diluted earnings (loss) per
share $(0.02) $0.11 $0.05 $0.53
Weighted average shares
outstanding - Diluted 6,081,826 5,288,752 6,193,804 5,235,330
(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, 2002 December 31, 2001
Cash and cash equivalents $465 $2,040
Current assets 16,345 19,622
Total assets 32,458 33,674
Current liabilities $15,029 $12,604
Long-term liabilities 2,888 7,218
Stockholders' equity 14,541 13,852
Selected segment information
Three months ended Nine months ended
September 30, September 30,
2002 2001 2002 2001
Revenue:
Process Solutions Business Unit $5,130 $8,268 $18,747 $17,744
Power Systems Business Unit 5,482 5,555 15,270 20,402
$10,612 $13,823 $34,017 $38,146
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, Marilynn Meek,
+1-212-445-8451, or analysts, Susan Garland, +1-212-445-8458,
both of The Financial Relations Board
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