GSE Systems Reports 2000 Financial Results

Apr 02, 2001, 01:00 ET from GSE Systems, Inc.

    COLUMBIA, Md., April 2 /PRNewswire/ -- GSE Systems, Inc. (GSE)
 (Amex:   GVP), a leading global provider of real time simulation and process
 control solutions, during the month of March, announced the sale of certain
 assets of its VirtualPlant operation which will result in a restructuring of
 the company in order to focus on its existing core businesses of real time
 simulation and process control.  The financial results for the Year 2000
 reflect a loss of $8.8 million or $1.70 per diluted share for the year ended
 December 31, 2000.  The loss includes the Company's $4.3 million investment in
 VirtualPlant which enabled GSE to become a significant shareholder after the
 sale of VirtualPlant to Avantium International B.V. ("Avantium").  The Process
 business lost a total of $3.6 million for the year, consisting of a
 $2.1 million loss in the first half of the year, and restructuring costs of
 $2.1 million in the second half of the year.  Also included in the
 $8.8 million loss was interest expense of $0.7 million, and an income tax
 expense of $2.5 million.  The total loss of $8.8 million compares to a small
 profit for the prior year.  The fourth quarter results are shown on the
 attached schedule.
     The Power business had income on operations of $2.3 million for the year.
 This business continued to show strong profitable performance for the year
 capturing significant business in the fossil simulation market segment.
 Although the Process business lost money during 2000 including the one-time
 charges, the Process business produced $0.6 million in operating income in the
 second half of the year excluding the restructuring costs.  In the course of
 restructuring its Process business, GSE reduced personnel, outsourced its
 manufacturing and assembly operations and sold its Belgium operations that
 resulted in a significant one-time charge to closeout this business.  We enter
 2001 with both the Power and Process businesses profitable.
     During 2000 the Company continued to develop and invest extensively in its
 VirtualPlant business and marketing strategy that was introduced in 1999.  GSE
 sold its VirtualPlant technology for stock in Avantium increasing its
 ownership to 18% in Avantium.  This enables GSE to share in the future success
 of Avantium as an investor.  Avantium's other investor shareholders include
 Shell International Chemicals, WR Grace, Glaxo SmithKline, Akzo Nobel
 Chemicals and Pfizer as well as the venture capital companies S. R. One, NIB
 Capital and Funds managed by Generics Asset Management.  Also participating
 are three Dutch universities;  Delft University of Technology, Eindhoven
 University of Technology, and the University of Twente.
     "We are optimistic about 2001 as we see opportunities to apply our
 simulation technology to help utilities optimize plant performance in a new
 competitive environment.  We are proud that our latest D/3 software release
 provides our Process customers with a more powerful and flexible system to
 control and optimize their plants." said Jerry Jen, the new President and
 Chief Operating Officer.
     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, and 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 .  The GSE Systems 2000 conference call
 is being webcast at www.streetevents.com on Tuesday April 3, at 11 am.
     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.
     To receive additional information on GSE Systems, Inc., via fax at no
 charge, dial 1-800-PRO-INFO and enter ticker symbol GVP.
 
 
                               GSE Systems, Inc.
                            Selected Financial Data
                (In thousands, except share and per share data)
 
     CONDENSED STATEMENTS OF OPERATIONS
 
                             Three months ended          Twelve months ended
 
                                  December 31,               December 31
                              2000          1999         2000          1999
     Contract revenue      $ 13,597      $ 15,547     $ 55,715      $ 66,699
 
     Cost of revenue         11,362         9,977       40,822        41,629
 
     Gross profit             2,235         5,570       14,893        25,070
 
     Operating expenses       5,365         6,481       19,548        24,326
 
     Operating income
      (loss)                 (3,130)         (911)      (4,655)          744
 
     Other income
      (expense)(A)           (1,204)         (165)      (1,622)         (410)
 
     Income (loss) before
      taxes                  (4,334)       (1,076)      (6,277)          334
 
     Provision for
      income taxes            3,246          (301)       2,537           233
 
     Net income (loss)      $(7,580)        $(775)     $(8,814)         $101
 
     Basic earnings
      (loss) per share       $(1.46)       $(1.16)      $(1.70)        $0.02
 
     Weighted average
      shares outstanding
      - Basic             5,193,527     5,065,688    5,181,972     5,065,688
 
     Diluted earnings
      (loss) per share       $(1.45)      $(0.15)       $(1.70)        $0.02
 
     Weighted average
      shares outstanding
      - Diluted           5,193,527     5,065,688    5,181,972     5,351,474
 
 
     A --  Other income (expense) for the three months and year ended
           December 31, 2000 includes a $1 million loss on the sale of the
           Company's Belgium subsidiary.
 
 
     Selected balance sheet data
 
                                                Dec. 31, 2000    Dec. 31, 1999
 
     Cash and cash equivalents                         $1,465         $2,695
     Current assets                                   $20,368        $25,439
     Total assets                                     $35,949        $43,027
 
 
     Current liabilities                              $14,846        $16,774
     Long-term liabilities                            $12,390         $9,083
     Stockholders' equity                              $8,713        $17,170
 
     Selected segment information
 
                               Three months ended        Twelve months ended
                                     December 31,               December 31,
                               2000          1999         2000          1999
 
     Process Solutions
      Business Unit Revenue  $5,309        $6,523     $ 25,208       $34,638
     Power Systems
      Business Unit Revenue   8,288         9,024       30,507        32,061
                            $13,597       $15,547     $ 55,715       $66,699
 
 
 

SOURCE GSE Systems, Inc.
    COLUMBIA, Md., April 2 /PRNewswire/ -- GSE Systems, Inc. (GSE)
 (Amex:   GVP), a leading global provider of real time simulation and process
 control solutions, during the month of March, announced the sale of certain
 assets of its VirtualPlant operation which will result in a restructuring of
 the company in order to focus on its existing core businesses of real time
 simulation and process control.  The financial results for the Year 2000
 reflect a loss of $8.8 million or $1.70 per diluted share for the year ended
 December 31, 2000.  The loss includes the Company's $4.3 million investment in
 VirtualPlant which enabled GSE to become a significant shareholder after the
 sale of VirtualPlant to Avantium International B.V. ("Avantium").  The Process
 business lost a total of $3.6 million for the year, consisting of a
 $2.1 million loss in the first half of the year, and restructuring costs of
 $2.1 million in the second half of the year.  Also included in the
 $8.8 million loss was interest expense of $0.7 million, and an income tax
 expense of $2.5 million.  The total loss of $8.8 million compares to a small
 profit for the prior year.  The fourth quarter results are shown on the
 attached schedule.
     The Power business had income on operations of $2.3 million for the year.
 This business continued to show strong profitable performance for the year
 capturing significant business in the fossil simulation market segment.
 Although the Process business lost money during 2000 including the one-time
 charges, the Process business produced $0.6 million in operating income in the
 second half of the year excluding the restructuring costs.  In the course of
 restructuring its Process business, GSE reduced personnel, outsourced its
 manufacturing and assembly operations and sold its Belgium operations that
 resulted in a significant one-time charge to closeout this business.  We enter
 2001 with both the Power and Process businesses profitable.
     During 2000 the Company continued to develop and invest extensively in its
 VirtualPlant business and marketing strategy that was introduced in 1999.  GSE
 sold its VirtualPlant technology for stock in Avantium increasing its
 ownership to 18% in Avantium.  This enables GSE to share in the future success
 of Avantium as an investor.  Avantium's other investor shareholders include
 Shell International Chemicals, WR Grace, Glaxo SmithKline, Akzo Nobel
 Chemicals and Pfizer as well as the venture capital companies S. R. One, NIB
 Capital and Funds managed by Generics Asset Management.  Also participating
 are three Dutch universities;  Delft University of Technology, Eindhoven
 University of Technology, and the University of Twente.
     "We are optimistic about 2001 as we see opportunities to apply our
 simulation technology to help utilities optimize plant performance in a new
 competitive environment.  We are proud that our latest D/3 software release
 provides our Process customers with a more powerful and flexible system to
 control and optimize their plants." said Jerry Jen, the new President and
 Chief Operating Officer.
     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, and 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 .  The GSE Systems 2000 conference call
 is being webcast at www.streetevents.com on Tuesday April 3, at 11 am.
     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.
     To receive additional information on GSE Systems, Inc., via fax at no
 charge, dial 1-800-PRO-INFO and enter ticker symbol GVP.
 
 
                               GSE Systems, Inc.
                            Selected Financial Data
                (In thousands, except share and per share data)
 
     CONDENSED STATEMENTS OF OPERATIONS
 
                             Three months ended          Twelve months ended
 
                                  December 31,               December 31
                              2000          1999         2000          1999
     Contract revenue      $ 13,597      $ 15,547     $ 55,715      $ 66,699
 
     Cost of revenue         11,362         9,977       40,822        41,629
 
     Gross profit             2,235         5,570       14,893        25,070
 
     Operating expenses       5,365         6,481       19,548        24,326
 
     Operating income
      (loss)                 (3,130)         (911)      (4,655)          744
 
     Other income
      (expense)(A)           (1,204)         (165)      (1,622)         (410)
 
     Income (loss) before
      taxes                  (4,334)       (1,076)      (6,277)          334
 
     Provision for
      income taxes            3,246          (301)       2,537           233
 
     Net income (loss)      $(7,580)        $(775)     $(8,814)         $101
 
     Basic earnings
      (loss) per share       $(1.46)       $(1.16)      $(1.70)        $0.02
 
     Weighted average
      shares outstanding
      - Basic             5,193,527     5,065,688    5,181,972     5,065,688
 
     Diluted earnings
      (loss) per share       $(1.45)      $(0.15)       $(1.70)        $0.02
 
     Weighted average
      shares outstanding
      - Diluted           5,193,527     5,065,688    5,181,972     5,351,474
 
 
     A --  Other income (expense) for the three months and year ended
           December 31, 2000 includes a $1 million loss on the sale of the
           Company's Belgium subsidiary.
 
 
     Selected balance sheet data
 
                                                Dec. 31, 2000    Dec. 31, 1999
 
     Cash and cash equivalents                         $1,465         $2,695
     Current assets                                   $20,368        $25,439
     Total assets                                     $35,949        $43,027
 
 
     Current liabilities                              $14,846        $16,774
     Long-term liabilities                            $12,390         $9,083
     Stockholders' equity                              $8,713        $17,170
 
     Selected segment information
 
                               Three months ended        Twelve months ended
                                     December 31,               December 31,
                               2000          1999         2000          1999
 
     Process Solutions
      Business Unit Revenue  $5,309        $6,523     $ 25,208       $34,638
     Power Systems
      Business Unit Revenue   8,288         9,024       30,507        32,061
                            $13,597       $15,547     $ 55,715       $66,699
 
 
 SOURCE  GSE Systems, Inc.