Conference Call Scheduled for today, May 15, 2024 at 4:30pm ET COLUMBIA, Md., May 15, 2024 /PRNewswire/ -- GSE Systems, Inc. ("GSE Solutions", "GSE", or "the Company") (NASDAQ:GVP), a leader in advanced engineering and workforce solutions that support nuclear power and the decarbonization initiatives of the power industry, today announced its financial results for the first quarter ("Q1") ended March 31, 2024. Q1 2024 Highlights   The Company reports revenue in Q1 2024 of $11.3 million, up 3.8% from $10.9 million in Q1 2023 and up 10.5% from $10.2 million in Q4 2023. Engineering revenue reported 26% increase in Q1 2024 to $8.7 million, up from $6.9 million in Q1 2023. Stronger Gross Profit Margin of 28.5% in Q1 2024, up from 22.0% in Q1 2023 and up from 25.5% in Q4 2023. Backlog at March 31, 2024, was $37.7 million, including $32.3 million of Engineering backlog, and $5.4 million of Workforce Solutions backlog. Ended Q1 with cash, cash equivalents and restricted cash of $2.8 million, including restricted cash of $1.5 million. Highlights Subsequent to Quarter-End Management transition - Ravi Khanna appointed President and CEO and Damian DeLongchamp appointed Chief Operating Officer. Awarded $0.8 million order for engineering services for a 24-month fuel cycle extension. Management Commentary "I am pleased to announce the company delivered both strong revenue and improved gross margins in the first quarter of 2024, a testament to the entire GSE team effort to drive efficiencies in how we deliver and execute increased performance of our engineering business lines," commented Ravi Khanna, GSE's recently appointed President and Chief Executive Officer.  "As we continue to see increased momentum in investment in the industry, GSE is well-positioned to add value to energy infrastructure and grid modernization programs, which is setting an optimistic pace for the future." Emmett Pepe, CFO of GSE Systems, added, "Our Engineering segment continues to perform well, with revenue growth over both Q4 2023 and over the year ago quarter. More importantly, the segment delivered gross margin of 33.3% driving our consolidated gross margin of 28.5%, an increase over Q4 2023 and Q1 2023 which were 25.5% and 22.0%, respectively. We expect to continue our strong gross margin as we look to increase revenue in coming quarters." Q1 2024 FINANCIAL RESULTS Orders in Q1 2024 were $14.6 million, a decrease of (24)% compared to $19.1 million in Q1 2023. Orders for Engineering decreased (18)% to $12.1 million in Q1 2024 compared to $14.7 million in Q1 2023. For Workforce Solutions, orders were $2.5 million in Q1 2024, compared to $4.4 million in Q1 2023. Revenue during Q1 2024 was $11.3 million, an increase of 3.8% compared to $10.9 million in Q1 2023 and an increase of 10.5% compared to $10.2 million in Q4 2023. The increase in revenue was primarily due to increased utilization, which helped turn backlog into revenue at a faster pace.  Engineering revenue was $8.7 million in Q1 2024 compared to $6.9 million in Q1 2023, and $7.1 million in Q4 2023. The year over year change was primarily attributable to increased work on Percentage of Completion ("POC") and improved utilization of personnel on T&M projects. Workforce Solutions revenue was $2.6 million in Q1 2024 compared to $3.9 million in Q1 2023, and $3.1 million in Q4 2023. The year over year change is due to fewer contracts serviced.  Gross profit in Q1 2024 was $3.2 million, or 28.5% of revenue. This compared to gross profit of $2.4 million, or 22.0% of revenue in Q1 2023, and $2.6 million, or 25.5% of revenue in Q4 2023. The sequential improvement in gross margin is primarily the result of a change in mix of business shifting to higher margin projects. Operating expenses in Q1 2024 were $4.7 million compared to $5.2 million in Q1 2023. Operating expenses were $4.1 million in Q4 2023. Operating expenses were sequentially elevated primarily due to one-time advisory fees of $0.5 million in Q1 2024. Operating loss was approximately $(1.5) million in Q1 2024, compared $(2.8) million in Q1 2023. Operating loss was $(1.4) million in Q4 2023. Net loss in Q1 2024 was $(2.0) million or $(0.63) per basic and diluted share, compared to $(3.0) million or $(1.29) per basic and diluted share in Q1 2023. Net loss was $(2.3) million or $(0.82) per basic and diluted share in Q4 2023. Adjusted net loss1 totaled $(1.1) million, or $(0.63) per diluted share in Q1 2024, compared to adjusted net loss of $(2.6) million, or $(1.12) per diluted share, in Q1 2023. Adjusted net loss1 totaled $(0.8) million, or $(0.28) per diluted share in Q4 2023. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for Q1 2024 was approximately $(1.2) million, compared to $(2.4) million in Q1 2023. EBITDA for Q4 2023 was approximately $(1.4) million. Adjusted EBITDA1 $(0.4) million in Q1 2024, compared to $(2.2) million in Q1 2023. Adjusted EBITDA1 totaled $(0.1) million in Q4 2023. Backlog at March 31, 2024, was $37.7 million, including $32.3 million of Performance Improvement Solutions backlog, and $5.4 million of Workforce Solutions backlog. 1 Refer to the non-GAAP reconciliation tables at the end of this press release for a definition of "EBITDA", "adjusted EBITDA" and "adjusted net income". CONFERENCE CALL GSE Systems has scheduled a conference call for today, May 15, 2024 at 4:30 p.m. ET (1:30 p.m. PT) to review these results. Interested parties can access the conference call by dialing (833) 974-2453 or (412) 317-5784 or can listen via a live Internet webcast at: https://app.webinar.net/03je93P4Vb5. Access to the link is also available in the Investor Relations section of the Company's website at: https://www.gses.com/about/investors/. A teleconference replay of the call will be available for seven days at (877) 344-7529 or (412) 317-0088, confirmation # 6318445. A webcast replay will be available in the Investor Relations section of the Company's website at https://www.gses.com/about/investors/ for 90 days. ABOUT GSE SOLUTIONS Proven by more than 50 years of experience in the nuclear power industry, GSE knows what it takes to help customers deliver carbon-free electricity safely and reliably. Today, GSE Solutions leverages top talent, expertise, and technology to help energy facilities achieve next-level power plant performance. GSE's advanced Engineering and Workforce Solutions divisions offer highly specialized training, engineering design, program compliance, simulation, and technical staffing that reduce risk and optimize plant operations. With more than 1,100 installations and hundreds of customers in over 50 countries, GSE delivers operational excellence. www.gses.com. FORWARD LOOKING STATEMENTS We make statements in this press release that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. These statements reflect our current expectations concerning future events and results. We use words such as "expect," "intend," "believe," "may," "will," "should," "could," "anticipates," and similar expressions to identify forward-looking statements, but their absence does not mean a statement is not forward-looking. These statements are not guarantees of our future performance and are subject to risks, uncertainties, and other important factors that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties, and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our periodic reports under the forward-looking statements and risk factors sections. We do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Company Contact Investor Contact Ravi Khanna Lytham Partners President and Chief Executive Officer Adam Lowensteiner, Vice President GSE Systems, Inc. (646) 829-9702 (410) 970-7800   GSE SYSTEMS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (in thousands, except share and per share data) Three Months ended March 31, 2024 2023 (unaudited) (unaudited) Revenue $11,283 $10,873    Cost of revenue 8,067 8,478 Gross profit 3,216 2,395 Operating expenses: Selling, general and administrative 4,360 4,788 Research and development 229 181 Depreciation 58 48 Amortization of intangible assets 99 161 Total operating expenses