GSE Systems Announces First Quarter 2009 Financial Results

SYKESVILLE, Md.--(Business Wire)--
GSE Systems, Inc. (GSE) (NYSE Amex: GVP), a leading global provider of real-time
simulation and training solutions to the power, process, manufacturing and
Government sectors, reported that revenue for the three months ended March 31,
2009 was $8.1 million, a 15% increase from the revenue reported for the three
months ended March 31, 2008 of $7.1 million.

GSE reported operating income of $531,000 for the first quarter of 2009 as
compared to an operating loss of $174,000 in the first quarter of 2008. Net
income for the three months ended March 31, 2009 was $333,000 or $0.02 per
common share on both a basic and diluted basis as compared to net loss of
$293,000 or $0.02 per common share on both a basic and diluted basis for the
first quarter of 2008.

The Company utilizes derivative instruments, specifically forward foreign
exchange contracts, to manage market risks associated with the fluctuations in
foreign currency exchange rates on foreign-denominated contract receivables. The
Company is required to determine the fair value of its foreign currency
contracts at the end of each quarter, and the change in the fair value is
recorded in net income. The quarterly gains or losses incurred from the changes
in fair value will net out to zero upon the foreign exchange contract
expiration. The use of these derivative instruments is intended to protect the
Company`s customer contract values and margins at the time the contracts are
signed and are not designed to speculate on the direction of any currency, up or
down. Simply put, the derivative instruments are protecting against currency
fluctuations in a way that, regardless of which way a given currency moves, the
ultimate payments from foreign customers will translate to the originally agreed
to amounts.

For the three months ended March 31, 2009, the Company incurred a $13,000 pretax
non-cash gain on the change in fair value of its derivative instruments and the
related mark-to-market adjustment of the related contract receivables.

GSE`s backlog as of March 31, 2009 was approximately $58.0 million compared to
$38.1 million at December 31, 2008. Backlog is defined as the remaining value of
signed contracts and does not include any value for contracts being negotiated
or for contracts that have been signed since March 31, 2009. Therefore, the
backlog of $58.0 million does not include the expected total value of the two
new full scope simulators for a Japanese customer or the expected total value of
the full scope nuclear simulator currently being built for Westinghouse Electric
Company`s Haiyang project in China. Taking into account the expected approximate
values of these projects, implied backlog at March 31, 2009 exceeded $70
million.

"I am pleased to report a solid quarter of improved financial performance versus
the comparable period last year," said John V. Moran, GSE`s Chief Executive
Officer. "Backlog continues to grow, our cost structure and margins are within
expected ranges and our balance sheet remains strong. We continue to maintain a
large pipeline of both near and longer term opportunities and year to date, have
not experienced any material project delays or cancellations as a result of the
global economic conditions. We remain very optimistic about our prospects and
positive growth trends going forward."

GSE Systems, Inc. provides training simulators and educational solutions. The
Company has over three decades of experience, over 349 installations, and 100
customers in more than 40 countries. Our software, hardware and integrated
training solutions leverage proven technologies to deliver real-world business
advantages to the energy, process, manufacturing and government sectors
worldwide. GSE Systems is headquartered in Sykesville, Maryland located in the
western suburbs of Baltimore, Maryland. Our global locations include offices in
St. Marys, Georgia; Atlanta, Georgia; Sweden and China. Information about GSE
Systems is available via the Internet at http://www.gses.com.

GSE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)

(unaudited)
Three Months ended
March 31,
2009 2008

Contract revenue $ 8,128 $ 7,083
Cost of revenue 5,699 5,218

Gross profit 2,429 1,865

Operating expenses 1,898 2,039

Operating income (loss) 531 (174 )

Interest income (expense), net 12 (6 )
Gain on derivative instruments 13 10
Other expense, net (110 ) (64 )

Income (loss) before income taxes 446 (234 )

Provision for income taxes 113 59

Net income (loss) $ 333 $ (293 )

Basic income (loss) per common share $ 0.02 $ (0.02 )
Diluted income (loss) per common share $ 0.02 $ (0.02 )

Weighted average shares outstanding - Basic 15,991,498 15,519,413
Weighted average shares outstanding - Diluted 16,653,042 15,519,413

GSE SYSTEMS, INC. AND SUBSIDIARIES
Selected balance sheet data
(in thousands)

(unaudited)
March 31, 2009 December 31, 2008

Cash and cash equivalents $ 8,709 $ 8,274
Current assets 24,924 23,297
Total assets 31,890 31,015

Current liabilities $ 9,762 $ 9,409
Long-term liabilities 887 906
Stockholders' equity 21,241 20,700

GSE Systems, Inc. (GSE)
John V. Moran
Chief Executive Officer
Phone: 410-970-7801
or
Investor Relations Contact
Feagans Consulting Inc.
Neal Feagans
Phone: 303-449-1184

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