GSE Systems Announces Second Quarter Results.COLUMBIA, Md. -- GSE GSE general somatic efferent system. Systems, Inc. (GSE) (Amex - GVP GVP Genesys Voice Platform GVP General Voters Party (Fiji) GVP Gasoline Vapor Pressure GVP Global Vision for Peace GVP Global Visualization Process ), a leading global provider of real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. simulation and training solutions to the power, process, manufacturing and Government sectors, reported second quarter 2005 results today. Total contract revenue for the three and six months ended June 30, 2005 was $6.7 million and $13.0 million, respectively. This compares to $7.6 million and $15.2 million for the comparable periods in 2004, respectively. The Company's net loss was $556,000 or $.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in the second quarter 2005 and the net loss for the six months ended June 30, 2005 was $1.6 million or $.18 per diluted share. This compares with net income of $276,000 or $.03 per diluted share in the second quarter 2004 and net income of $340,000 or $.04 per diluted share in the six months ended June 30, 2004. As compared to the Company's first quarter 2005 results, revenue for the three months ended June 30, 2005 increased 6.7% and net loss decreased by 46.6%. The Company's revenue and profitability in 2005 have been impacted by the lower volume of orders logged in 2004 coupled with the delay of two large international simulator (1) Software that enables the execution of an application written for a different computer environment. Same as emulator. (2) Software that models the interactions of hypothetical or real-world objects or business processes. contracts. In addition, the Company's efforts to broaden its simulation business base continued in 2005. Examples of these efforts include the following: --The Company spent $345,000 in the first half of 2005 developing its military simulation Military simulations, also known informally as war games, are simulations in which theories of warfare can be tested and refined without the need for actual hostilities. Many professional analysts object to the term wargames business. In the second quarter 2005, GSE qualified as a prime contractor on the US Navy's Seaport-e procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. program for all engineering, program management and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. . This allows GSE to bid on a broad range of simulation task orders as they are released by the Navy. In addition, the Company is in final negotiations with a provider of command and control software that is installed in over 150 Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States Emergency Operations Centers The Emergency Operations Center, or EOC, is a central command and control facility responsible for carrying out the principles of emergency preparedness and emergency management, or disaster management functions at a strategic level in an emergency situation, and ensuring (EOC EOC Emergency Operations Center EOC Equal Opportunities Commission (UK) EOC Educational Opportunity Center EOC End Of Course EOC Epithelial Ovarian Cancer EOC Environment of Care (JCAHO) ). GSE's Real-time Emergency Management Interactive Training System (REMITS) will be integrated with their software to simulate simulate - simulation emergency situations and enable EOC staffs to train without requiring human participation in the field. --The Company spent $309,000 in the first six months of 2005 developing its new simulator training center business. The business focuses on the construction of turn-key simulation training centers in developing parts of the world. GSE would provide the simulators as well as the training content for these centers. --Revenue from fossil power plant training simulator projects increased 39.8% in the six months ended June 30, 2005 to $1.5 million as compared to the same period in 2004. The Company spent $70,000 in the first six months of 2005 on business development efforts in the fossil power area. Other highlights for the quarter also included the following: --On June 20, 2005, the Board of Directors of GP Strategies Corporation, which owns 57% of the Company's common stock, approved plans to spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. its interest in GSE through a special dividend to the GP Strategies' stockholders. The GP Strategies stockholders will receive in the spin-off a pro-rata Pro-rata Used to describe a proportionate allocation. Notes: For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share they own. See also: Dividend share of the Company's common stock based on the number of shares of GP Strategies common stock and Class B stock held on the record date, which will be determined on a future date. The Company has filed with the Securities and Exchange Commission a registration statement relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the shares of the Company to be distributed by GP Strategies in the spin-off. The Company anticipates that the record date will be set and the spin-off will occur shortly after such registration statement is declared effective. --The Company developed an important financial relationship with Dolphin dolphin, fish dolphin, large, swift game fish, Coryphaena hipparus, also called dorado. It is of nearly worldwide distribution in warm waters. Equity Partners. --GSE was selected as the simulator vendor for the novel Pebble Pebble - A polymorphic language. ["A Kernel Language for Abstract Data Types and Modules", R.M. Burstall & B. Lampson, in Semantics of Data Types, LNCS 173, Springer 1984]. Bed Modular Nuclear Reactor nuclear reactor, device for producing controlled release of nuclear energy. Reactors can be used for research or for power production. A research reactor is designed to produce various beams of radiation for experimental application; the heat produced is a waste System. --The Company was awarded approximately $1 million in contracts in the Process Simulation sector. John V. Moran Moran equitable councillor to King Feredach. [Irish Hist.: Brewer Dictionary, 728] See : Justice , GSE's Chief Executive Officer said, "I am pleased that the Company's second quarter 2005 revenue has increased from the first quarter 2005 revenue, and that second quarter 2005 net loss decreased from the first quarter 2005. Our project margin also improved. We anticipate these trends to continue. We are also seeing positive signs that our business development efforts are beginning to pay off." The Company plans to schedule an investor conference call after the anticipated spin-off has been completed. GSE Systems, Inc. provides real-time simulation and training solutions. The company has over three decades of experience, over 250 applications, and 100 customers in more than 25 countries. Our software, hardware and integrated training solutions leverage proven technologies to deliver real-world business advantages to the energy, process, manufacturing and government sectors worldwide. GSE Systems is headquartered in Columbia, Maryland Columbia is a census-designated place and planned community in Howard County, Maryland, United States. It is a suburb of Baltimore, and, to a lesser degree, Washington, DC. It began with the idea that a city could enhance its residents' quality of life. . Our global locations include offices in Georgia, Sweden, Japan and China. Information about GSE Systems is available via the Internet at http://www.gses.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. We use words such as "expects", "intends" and "anticipates" to indicate forward looking statements. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004, periodic reports and registration statements filed with the Securities and Exchange Commission. If any one or more of these expectations and assumptions proves incorrect, actual results will likely differ materially from those contemplated by the forward-looking statements. Even if all of the foregoing assumptions and expectations prove correct, actual results may still differ materially from those expressed in the forward-looking statements as a result of factors we may not anticipate or that may be beyond our control. While we cannot assess the future impact that any of these differences could have on our business, financial condition, results of operations and cash flows or the market price of shares of our common stock, the differences could be significant. We do not undertake to update any forward-looking statements made by us.
GSE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
CONDENSED STATEMENTS OF OPERATIONS
Three months ended Six months ended
June 30, June 30,
----------------------- ----------------------
2005 2004 2005 2004
----------- ---------- ---------- ----------
Contract revenue $ 6,717 $ 7,597 $ 13,010 $ 15,158
Cost of revenue 5,077 5,760 10,315 11,544
---------- ---------- ---------- ----------
Gross profit 1,640 1,837 2,695 3,614
Operating expenses 2,014 1,504 4,092 3,057
---------- ---------- ---------- ----------
Operating income (loss) (374) 333 (1,397) 557
Other expense, net (157) - (225) (143)
---------- ---------- ---------- ----------
Income (loss) before
provision (benefit)
for income taxes (531) 333 (1,622) 414
Provision (benefit) for
income taxes 25 57 (24) 74
---------- ---------- ---------- ----------
Net income (loss) $ (556) $ 276 $ (1,598) $ 340
========== ========== ========== ==========
Basic earnings (loss)
per common share: $ (0.06) $ 0.03 $ (0.18) $ 0.04
========== ========== ========== ==========
Weighted average shares
outstanding - Basic 8,999,706 8,949,706 8,998,049 8,949,706
========== ========== ========== ==========
Diluted earnings (loss)
per common share $ (0.06) $ 0.03 $ (0.18) $ 0.04
========== ========== ========== ==========
Weighted average shares
outstanding - Diluted 8,999,706 9,013,608 8,998,049 9,015,370
========== ========== ========== ==========
Selected balance sheet data
(unaudited)
June 30, 2005 December 31, 2004
--------------- -----------------
Cash and cash equivalents $ 249 $ 868
Current assets 10,746 10,439
Total assets 14,388 14,228
Current liabilities $ 7,772 $ 7,781
Long-term liabilities 2,510 502
Stockholders' equity 4,106 5,945
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