COLUMBIA, Md.–(BUSINESS WIRE<\/a>)–GSE Systems, Inc. (\u201cGSE Solutions\u201d, \u201cGSE\u201d, or \u201cthe Company\u201d) (Nasdaq: GVP)<\/b>, a leader in delivering and supporting engineering, compliance, simulation, training and workforce solutions that support decarbonization of the power industry, today announced its financial results for the fourth quarter (\u201cQ4\u201d) and fiscal year ended December 31, 2020.\n<\/p>\n FULL YEAR 2020 OVERVIEW<\/span><\/b><\/p>\n Q4 2020 Overview<\/span><\/b><\/p>\n At December 31, 2020 <\/span><\/b><\/p>\n 1 <\/sup>Refer to the non-GAAP reconciliation tables at the end of this press release for a definition of “EBITDA”, \u201cadjusted EBITDA\u201d and \u201cadjusted net income\u201d.<\/i><\/p>\n \nKyle J. Loudermilk, GSE\u2019s President and Chief Executive Officer, said, \u201cWe concluded 2020 on a very encouraging note, with fourth quarter adjusted EBITDA improving to positive $1.1 million, compared to three straight quarters of negative adjusted EBITDA to start the year amidst the onset of the COVID-19 pandemic. GSE achieved this positive result despite an ongoing lull in industrywide project activity in the fourth quarter due to the COVID-19 pandemic. We noted an uptick in bidding activity at the end of the quarter and were very pleased to be awarded two master service agreements in December with a major U.S. utility for a combined value of $35 million over two years. Work under these agreements will commence in the second quarter of 2021 and ramp up throughout the year. During the quarter, we also continued to build our Software as a Service cloud-based revenue stream, highlighted by a large U.S. oil company\u2019s multi-year subscription to our EnVision On-Demand software simulation and training platform. In 2020, our recurring software revenue totaled $3.9 million, up 34% from $2.9 million in the prior year. This represents significant progress in our efforts to grow our software revenue.\u201d\n<\/p>\n \nMr. Loudermilk continued, \u201cWhile uncertainties related to the pandemic persist, we noted a surge in RFP activity to start 2021 and, depending on our success rate converting bids to wins, we could see a meaningful upswing in business in the second half of the year. We are optimistic about our near- and long-term prospects, especially as a result of the renewed focus on decarbonizing the power sector. Our services are essential to the nuclear industry, which plays a critical role in the decarbonization of energy. We remain focused on growing our businesses organically, executing on an exciting product and solutions roadmap as well as emphasizing cross selling and upselling opportunities.\u201d\n<\/p>\n 2020 FULL YEAR RECAP<\/span><\/b><\/p>\n \nRevenue decreased to $57.6 million in 2020, compared to $83.0 million in 2019, reflecting a decrease in both our Performance Improvement Solutions and Nuclear Industry Training and Consulting segments. The decrease of $(13.0) million in the Company’s Performance Improvement Solutions (“Performance”) segment was driven by several significant projects ending in the prior fiscal year and delays in commencing new contracts remotely due to the COVID-19 pandemic. The decrease of $12.4 million from the Company’s Nuclear Industry Training and Consulting (“NITC”) segment was primarily due to stoppage of existing projects and delays in commencing new contracts due to the COVID-19 pandemic and a reduction in demand for staffing from our major customers.\n<\/p>\n \nGross profit decreased $5.5 to $14.8 million, or 25.7% of revenue in 2020, compared to $20.3 million, or 24.5% of revenue in 2019. Our margin is impacted by our mix of business, but overall profitability of remaining and new smaller projects increased the profit margin.\n<\/p>\n \nOperating loss totaled $(9.5) million in 2020, compared to operating loss of $(7.4) million in 2019.\n<\/p>\n \nNet loss was $(10.5) million, or $(0.52) per diluted share in 2020, compared to net loss of $(12.1) million, or $(0.60) per diluted share, in 2019.\n<\/p>\n \nAdjusted net income1<\/sup> decreased to $3 thousand, or $0.00 per diluted share in 2020, compared to $8.0 million, or $0.39 per diluted share in 2019.\n<\/p>\n \nEarnings before interest, taxes, depreciation and amortization (EBITDA) totaled $(6.9) million in 2020, compared to $(2.2) million in 2019.\n<\/p>\n \nAdjusted EBITDA1 <\/sup>totaled $(0.3) million in 2020, compared to $4.8 million in 2019.\n<\/p>\n \nPerformance new orders totaled $26.2 million in 2020 compared to $27.4 million in 2019. NITC new orders totaled $19.1 million in 2020 compared to $31.7 million in 2019.\n<\/p>\n Q4 2020 RESULTS<\/span><\/b><\/p>\n \nQ4 2020 revenue decreased $4.6 million from $17.3 million in Q4 2019 to $12.7 million in Q4 2020. The year-over-year decrease was driven by a decrease of $1.6 million in the Company’s Performance segment and a decrease of $3.0 million from the Company’s NITC segment.\n<\/p>\n \nThe decrease in the Performance segment’s revenue primarily reflects major projects at the end of 2019 that were completed at the beginning of 2020 and delays in commencing new contracts remotely due to the COVID-19 pandemic.\n<\/p>\n \nThe year-over-year decrease in the NITC segment’s revenue was primarily caused by stoppage of existing projects and delays in commencing new contracts due to the COVID-19 pandemic and lower customer demand for staffing during the year.\n<\/p>\n\n
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