COLUMBIA, Md., Aug. 14, 2024 /PRNewswire/ -- GSE Systems, Inc. ("GSE Solutions", "GSE", or "the Company") (Nasdaq: GVP), a leader in advanced engineering and workforce solutions that support the future of clean energy production and decarbonization initiatives of the nuclear power industry, today announced financial results for the second quarter ("Q2") ended June 30, 2024. Q2 2024 and Recent Highlights Improved gross profit growth driven by Engineering segment, with a 14% increase over Q1 of 2024 and Q2 of 2023. Achieved positive Adjusted EBITDA for the first half of 2024, due to continued strong performance from our Engineering segment and diligent operating expense management. Backlog at June 30, 2024, was $34.7 million, including $30.4 million of Engineering backlog, and $4.3 million of Workforce Solutions backlog. Ended Q2 with cash, cash equivalents and restricted cash of $2.7 million, including restricted cash of $1.5 million. Subsequent to Q2 end, GSE entered into definitive merger agreement to be acquired by Pelican Energy Partners. Management Commentary Ravi Khanna, President & Chief Executive Officer of GSE, commented, "I am pleased with the second quarter results, which showed the execution of our strategic plan of improved utilization, which resulted in improved gross profit margin and continued diligence on expense controls. This combination led the company to report positive adjusted EBITDA of $0.6 million during the quarter. While the company is operating at an efficient level, order flow in the quarter was a bit softer, which reflects that the industry continues to recover at a cautious pace. We continue to see potential order flow at a respectable level, but also are experiencing continued timing issues, as projects are consistently getting pushed to the right. Considering where we are in the current cycle, the company has entered into a definitive agreement with Pelican Energy Partners and believes it to be highly beneficial  for GSE shareholders, customers and employees. I will miss communicating with shareholders as we move forward with Pelican to navigate and provide value to the nuclear power industry." Q2 2024 FINANCIAL RESULTS Revenue during Q2 2024 was $11.7 million an increase of $0.4 million compared to $11.3 million in Q1 2024, and revenue was $12.4 million in Q2 2023. The sequential improvement in revenues was primarily driven by our Design & Analysis business due to additional training and consulting work for new customers, offset by a sequential decrease in Workforce Solutions. The year-over-year decrease of $0.7 million was primarily due to the Workforce Solutions segment which saw a  reduction of staffing needs from  major customers. Engineering revenue was $9.3 million in Q2 2024 compared to $8.7 million in Q1 2024, and $9.0 million in Q2 2023. The increase in revenue was primarily attributable to our Design & Analysis business due to additional training & consulting work for new customers. Workforce Solutions revenue was $2.4 million in Q2 2024 compared to $2.6 million in Q1 2024, and $3.3 million in Q2 2023. The sequential and year-over-year decreases are mainly due to the reduction in workforce requirements. Gross profit in Q2 2024 was $3.7 million, or 31.3% of revenue. This compared to gross profit of $3.2 million, or 26.0% of revenue in Q2 2023, and $3.2 million, or 28.5% of revenue in Q1 2024. The increase in gross margin was primarily related to the Engineering segment's revenue growth as well as the increased project efficiency which produced higher margins in the quarter. Operating expenses in Q2 2024 were $3.4 million compared to $4.0 million in Q2 2023. Operating expenses were $4.7 million in Q1 2024. Operating expenses were lower due to an improved corporate cost structure. The Company continues to maintain tight expense controls despite inflationary pressures.   Operating income (loss) was approximately $0.3 million in Q2 2024, compared $(0.8) million in Q2 2023. Operating loss was $(1.5) million in Q1 2024. Net loss in Q2 2024 was $(0.9) million or $(0.26) per basic and diluted share, compared to net loss of $(1.5) million or $(0.62) per basic and diluted share in Q2 2023. Net loss was $(2.0) million or $(0.63) per basic and diluted share in Q1 2024. Adjusted net income1 totaled $0.1 million, or $0.02 per diluted share in Q2 2024, compared to adjusted net loss of $(1.3) million, or $(0.53) per diluted share, in Q2 2023. Adjusted net loss1 totaled $(1.1) million, or $(0.35) per diluted share in Q1 2024. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for Q2 2024 was approximately $(0.3) million, compared to $(0.4) million in Q2 2023. EBITDA for Q1 2024 was approximately $(1.2) million. Adjusted EBITDA1 totaled $0.6 million in Q2 2024, compared to $(0.4) million in Q2 2023. Adjusted EBITDA1 totaled $(0.4) million in Q1 2024. Backlog at June 30, 2024, was $34.7 million, including $30.4 million of Engineering backlog, and $4.3 million of Workforce Solutions. 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 Due to the impending transaction with Pelican, GSE Systems will not be conducting a conference call. 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 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 Six Months ended June 30, June 30, 2024 2023 2024 2023 (unaudited) (unaudited) (unaudited) (unaudited) Revenue $11,725 $12,387 $23,008 $23,260    Cost of revenue 8,051 9,172 16,118 17,650 Gross profit 3,674 3,215 6,890 5,610 Selling, general and administrative 3,070 3,653 7,430 8,441 Research and development 118 154 347 335 Restructuring charges 64 - 64 - Depreciation 50 53 108 101 Amortization of definite-lived intangible assets 83 131 182 292 Total operating expenses 3,385 3,991 8,131 9,169 Operating income (loss) 289 (776) (1,241) (3,559) Interest expense, net (258) (767) (717) (1,053) Change in fair value of derivative instruments, net (736) 171