SYKESVILLE, Md.--(BUSINESS WIRE)--GSE Systems, Inc. (NYSE MKT: GVP), the world leader in real-time high-fidelity simulation systems and training solutions to the power and process industries, today announced financial results for the second quarter (“Q2”) ended June 30, 2016.
Kyle J. Loudermilk, GSE’s President and Chief Executive Officer, said, “We are pleased to report GSE’s fourth consecutive quarter of positive adjusted EBITDA. In Q2 2016, GSE recorded significantly higher gross margins and lower operating expenses, reflecting our continuing efforts to reduce costs and focus on project profitability. We have reduced annualized operating expenses by more than $4 million since I joined GSE approximately one year ago. We also have continued to invest in resources for growth, hiring key leadership positions in the areas of technology, finance and operations. On that note, we are pleased to announce that Chris Sorrells, who has played an instrumental role in GSE’s operational turnaround, has agreed to assume the COO role on a permanent basis. Furthermore, we strengthened our financial and accounting leadership with the appointment of Emmett Pepe as our new CFO and Jim Stanker as a new member of our Board or Directors and Audit Committee. With the benefit of an enhanced leadership team and streamlined operations, we are now firmly focused on implementing our strategy to revitalize GSE’s growth.”
Q2 2016 RESULTS
Q2 2016 revenue decreased 9% to $12.4 million from $13.7 million in Q2 2015, reflecting a 1% increase in Performance Improvement Solutions revenue and a 25% decrease in Nuclear Industry Training and Consulting revenue due to a strategic shift in sales focus to higher margin assignments.
Performance Improvement Solutions gross profit for Q2 2016 increased 27% to $2.9 million, or 35% gross margin, from $2.3 million, or 28% gross margin, in Q2 2015. Nuclear Industry Training and Consulting gross profit for Q2 2016 increased 10% to approximately $649,000, or 16% gross margin, from approximately $590,000, or 11% gross margin, in Q2 2015.
Selling, general & administrative expenses in Q2 2016 decreased 27% to $2.9 million, or 23% of revenue, from $4.0 million, or 29% of revenue, in Q2 2015.
Operating income for Q2 2016 was $0.2 million compared to an operating loss of $1.4 million in Q2 2015.
Net income for Q2 2016 was $0.1 million, or $0.01 per basic and diluted share, compared to a net loss of $1.5 million, or $(0.08) per basic and diluted share, in Q2 2015.
Q2 2016 adjusted net income, excluding the impact of restructuring charges, loss from the change in fair value of contingent consideration and stock-based compensation expense, increased to $0.9 million, or $0.05 per basic and diluted share, from an adjusted net loss of $0.8 million, or $(0.05) per basic and diluted share, in Q2 2015.
EBITDA (Earnings before interest, taxes, depreciation and amortization) for Q2 2016 was $0.4 million compared to an EBITDA loss of $1.2 million in Q2 2015.
Adjusted EBITDA, which excludes the impact of restructuring charges, loss from the change in fair value of contingent consideration and stock-based compensation expense, increased to $1.1 million in Q2 2016 from an adjusted EBITDA loss of approximately $0.5 million in Q2 2015.
Backlog at June 30, 2016, increased 48% to $71.1 million from $47.9 million at December 31, 2015. Backlog at June 30, 2016, included $64.7 million of Performance Improvement Solutions backlog and $6.4 million of Nuclear Industry Training and Consulting backlog.
GSE’s cash position at June 30, 2016, was $14.3 million, including $3.4 million of restricted cash, as compared to $14.6 million, including $3.6 million of restricted cash, at December 31, 2015.
ABOUT GSE SYSTEMS, INC.
GSE Systems, Inc. is a world leader in real-time high-fidelity simulation, providing a wide range of simulation, training and engineering solutions to the power and process industries. Its comprehensive and modular solutions help customers achieve performance excellence in design, training and operations. GSE’s products and services are tailored to meet specific client requirements such as scope, budget and timeline. The Company has over four decades of experience, more than 1,100 installations, and hundreds of customers in over 50 countries spanning the globe. GSE Systems is headquartered in Sykesville (Baltimore), Maryland, with offices in St. Marys, Georgia; Huntsville, Alabama; Chennai, India; Nyköping, Sweden; Stockton-on-Tees, UK; and Beijing, China. Information about GSE Systems is available atwww.gses.com.
