SYKESVILLE, Md. –
GSE Systems, Inc. (“GSE” or “the Company”) (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 fourth quarter (“Q4”) ended December 31, 2015.

Kyle J. Loudermilk, GSE’s President and Chief Executive Officer, said,
“We concluded 2015 on a very strong note, recording GSE’s first quarter
of positive operating income and net earnings since the third quarter of
2012. Our Q4 2015 financial results directly reflect our team’s efforts
to reduce costs, improve business processes and enhance productivity
levels across the entire company. We have made significant progress
executing our turnaround plan, yet still have more to do to create a
best in class technology enabled software and service company focused on
primarily the global nuclear power industry.”

Mr. Loudermilk continued, “Now that we have an appropriate, streamlined
cost structure in place, and have staffed most of our critical senior
leadership positions, our focus turns to the next phase of our strategic
plan: reinvigorating GSE’s growth. As we move forward, we are optimistic
that we will continue to add critical hires where needed to affect our
growth, including growing our backlog. I remain optimistic about the
business opportunities in front of us, not only in our existing
businesses, but also in adjacent markets. In 2016 we expect to provide
additional details on new elements of our growth strategy, including
initiatives that support a more diversified, recurring revenue base. I
am confident that as we continue to successfully execute our strategy,
we will increase cash flow, improve GSE’s strong balance sheet, grow our
backlog, and enhance shareholder value.”

Q4 2015 RESULTS

Certain prior year amounts for the fourth quarter and full year 2014, as
presented in this press release, reflect revisions to adjust revenue
recognition related to software, maintenance, and services contracts,
which were deemed to be immaterial to both prior and current periods for
our EnVision products. Please refer to Note 2 Summary of Significant
Accounting Policies in the Company’s Form 10-K to be filed by March 30,
2016, for a full discussion of these revisions.

Q4 2015 revenue increased by 12% to $14.2 million from $12.7 million in
Q4 2014, reflecting $1.8 million of incremental Nuclear Industry
Training and Consulting revenue, slightly offset by a 3% decrease in
Performance Improvement Solutions revenue.

Performance Improvement Solutions orders totaled $9.3 million in Q4 2015
compared to $10.8 million in Q4 2014. Nuclear Industry Training and
Consulting orders totaled $4.6 million in Q4 2015 compared to $2.3
million in Q4 2014.

Q4 2015 gross profit grew by 29% to $4.5 million, or 31.4% of revenue,
from $3.5 million, or 27.3% or revenue, in Q4 2014.

Performance Improvement Solutions gross profit for Q4 2015 was $3.8
million, or 37.8% gross margin, up from $3.2 million, or 31.0% gross
margin, in Q4 2014. Nuclear Industry Training and Consulting gross
profit for Q4 2015 was $0.6 million, or 15.3% gross margin, up from $0.2
million, or 9.8% gross margin, in Q4 2014 driven by a focus on winning
higher margin projects.

Selling, general & administrative expenses in Q4 2015 decreased by 27%
to $3.2 million, or 22.4% of revenue, from $4.4 million, or 34.4% of
revenue, in Q4 2014. The year-over-year improvement in SG&A expense
reflected improvements in the Company’s business processes, cost
reductions, and enhanced productivity levels.

Operating income for Q4 2015 was $1.0 million compared to an operating
loss of $1.5 million in Q4 2014.

Net income for Q4 2015 was $0.9 million, or $0.05 per basic and diluted
share, compared to a net loss of $1.4 million, or $(0.08) per basic and
diluted share, in Q4 2014.

EBITDA (Earnings before interest, taxes, depreciation and amortization)
for Q4 2015 was $1.3 million compared to an EBITDA loss of $1.2 million
in Q4 2014.

Adjusted EBITDA, which excludes loss from the change in fair value of
contingent consideration, and restructuring charges, totaled $1.5
million in Q4 2015 compared to an adjusted EBITDA loss of $0.7 million
in Q4 2014.

Backlog at December 31, 2015 was $47.9 million, compared to $49.7
million at December 31, 2014. Backlog at December 31, 2015 included
$41.9 million of Performance Improvement Solutions backlog and $6.0
million of Hyperspring backlog.

GSE’s cash position at December 31, 2015 was $11.1 million, excluding
$3.6 million of restricted cash, as compared to $13.6 million, excluding
$4.2 million of restricted cash, at December 31, 2014. The decline in
cash at December 31, 2015 from December 31, 2014 is primarily due to:
(i) the payment of $0.5 million and $1.2 million in contingent
consideration for the acquisitions of EnVision Systems, Inc. and
Hyperspring LLC, respectively, (ii) $1.9 million of capital expenditures
and capitalized software development, and (iii) $0.3 million to pay down
the outstanding balance of Hyperspring’s line of credit, partially
offset by approximately $0.7 million in releases of cash as collateral
under letters of credit, and approximately $1.0 million generated by
changes in various working capital items.

CONFERENCE CALL

Management will host a conference call today at 4:30 pm Eastern Time to
discuss Q4 results and other matters.

Interested parties may participate in the call by dialing:

• (877) 407-9753 (Domestic) or
• (201) 493-6739 (International)

The conference call will also be accessible via the following link: http://www.investorcalendar.com/IC/CEPage.asp?ID=174676

For those who cannot listen to the live broadcast, an online webcast
replay will be available through June 15, 2016 at www.gses.com
or via the following link: http://www.investorcalendar.com/IC/CEPage.asp?ID=174676

ABOUT GSE SYSTEMS, INC.

GSE Systems, Inc. is the world leader in real-time high-fidelity
simulation and training 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 approximately 300
employees, 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; Chennai, India; Nyköping,
Sweden; Stockton-on-Tees, UK; and Beijing, China. Information about GSE
Systems is available at 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.

EBITDA and Adjusted EBITDA Reconciliation (in thousands)

EBITDA and Adjusted EBITDA are not measures of financial performance
under generally accepted accounting principles (“GAAP”). Management
believes EBITDA and Adjusted EBITDA, in addition to operating profit,
net income and other GAAP measures, are useful to investors to evaluate
the Company’s results because it excludes certain items that are not
directly related to the Company’s core operating performance that may,
or could, have a disproportionate positive or negative impact on our
results for any particular period. Investors should recognize that
EBITDA and Adjusted EBITDA might not be comparable to similarly-titled
measures of other companies. This measure should be considered in
addition to, and not as a substitute for or superior to, any measure of
performance prepared in accordance with GAAP. A reconciliation of EBITDA
and Adjusted EBITDA to the most directly comparable GAAP measure in
accordance with SEC Regulation G follows:

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GSE Systems, Inc.
Chris Sorrells, 410-970-7802
Interim
Chief Operating Officer
or
The Equity Group Inc.
Devin
Sullivan, 212-836-9608
Senior Vice President
dsullivan@equityny.com
or
Kalle
Ahl, CFA, 212-836-9614
Senior Associate
kahl@equityny.com