SYKESVILLE, Md. –
GSE Systems, Inc. (GSE or the Company) (NYSE American: GVP), the
world leader in real-time high-fidelity simulation systems and provider
of training/consulting solutions to the power and process industries,
today announced that as part of its ongoing efforts to streamline and
optimize global operations, the Company will be consolidating
engineering services and R&D activities to Maryland and ceasing an
unprofitable non-core business in the UK. As a result, the Company will
close its offices in Nyköping, Sweden; Chennai, India; and
Stockton-on-Tees, UK. These actions are designed to improve Company
productivity by eliminating duplicate employee functions and increasing
GSE’s focus on its core business, improving efficiency and maintaining
the full range of engineering capabilities while reducing costs and
organizational complexity. At this time, the Company does not anticipate
additional office closures.
GSE will eliminate approximately 40 positions due to these changes,
primarily in Europe and India, and will undertake other cost-savings
measures both across the enterprise and focused on the Company’s
services organization. As a result of these efforts, GSE expects to
record a restructuring charge of approximately $2.5 million in the
fourth quarter of 2017. Severance expenses and other costs, including
facility closure costs, accounting and legal fees, will total
approximately $1.0 million. The remaining non-cash portion of $1.5
million is a result of the write down of GSE’s 2010 acquisition of TAS
Engineering, offset by gains related to Sweden and India entity
closures. The restructuring should reduce revenue by approximately $1.5
million and reduce expenses by $2.5 million. The annual savings of
approximately $1.0 million is primarily the result of winding up TAS
Engineering operations, an unprofitable business outside of the
Company’s core market, nuclear power. The Company anticipates recouping
its one-time cash restructuring costs within approximately one year.
Kyle Loudermilk, GSE’s President and Chief Executive Officer, said, “We
have made the strategic decision to implement a restructuring program
for certain assets in Europe and India to position the company for
enhanced long-term profitability and the next phase of our growth. By
streamlining our global operations, we become a leaner, more agile
business with less complexity, allowing us to better serve our customers
as well as dedicate more time to executing our stated M&A goals. A more
centralized staff will greatly enhance interactivity and innovation as
we advance client solutions, and do so at a lower cost in a more
effective manner. These actions are the appropriate steps for us at this
stage of our company’s growth trajectory, and should directly benefit
our customers, our shareholders and our employees on the whole.”
ABOUT GSE SYSTEMS, INC.
GSE Systems, Inc. is a world leader in real-time high-fidelity
simulation, providing a wide range of simulation, training, consulting,
and engineering 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 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 Navarre, Florida 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.
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Company
GSE Systems, Inc.
Chris Sorrells, 410-970-7802
Chief
Operating Officer
or
The Equity Group Inc.
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