Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Nov. 11, 2015 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | GSE SYSTEMS INC | ||
Entity Central Index Key | 944,480 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 27,315,219 | ||
Entity Common Stock, Shares Outstanding | 17,897,859 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 12,832 | $ 13,583 |
Restricted cash | 223 | 613 |
Contract receivables, net | 12,240 | 15,830 |
Prepaid expenses and other current assets | 2,380 | 1,703 |
Total current assets | 27,675 | 31,729 |
Equipment, software and leasehold improvements | 7,039 | 7,055 |
Accumulated depreciation | 5,387 | 5,229 |
Equipment, software and leasehold improvements, net | 1,652 | 1,826 |
Software development costs, net | 996 | 1,414 |
Goodwill | 5,612 | 5,612 |
Intangible assets, net | 903 | 1,279 |
Long-term restricted cash | 3,305 | 3,591 |
Other assets | 78 | 548 |
Total assets | 40,221 | 45,999 |
Current liabilities: | ||
Line of credit | 0 | 339 |
Accounts payable | 2,015 | 2,330 |
Accrued expenses | 1,944 | 1,554 |
Accrued compensation and payroll taxes | 3,707 | 2,595 |
Billings in excess of revenue earned | 7,062 | 8,684 |
Accrued warranty | 1,614 | 1,456 |
Current contingent consideration | 2,601 | 2,842 |
Other current liabilities | 444 | 473 |
Total current liabilities | 19,387 | 20,273 |
Contingent consideration | 2,221 | 1,948 |
Other liabilities | 238 | 38 |
Total liabilities | 21,846 | 22,259 |
Stockholder's equity: | ||
Preferred stock $.01 par value, 2,000,000 shares authorized, shares issued and outstanding none in 2015 and 2014 | 0 | 0 |
Common stock $.01 par value, 30,000,000 shares authorized, 19,496,770 shares issued and 17,897,859 shares outstanding in 2015, 19,486,770 shares issued and 17,887,859 shares outstanding in 2014 | 195 | 195 |
Additional paid-in capital | 73,324 | 72,917 |
Accumulated deficit | (50,708) | (45,142) |
Accumulated other comprehensive loss | (1,437) | (1,231) |
Treasury stock at cost, 1,598,911 shares in 2015 and 2014 | 2,999 | 2,999 |
Total stockholders' equity | 18,375 | 23,740 |
Total liabilities and stockholders' equity | $ 40,221 | $ 45,999 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Stockholder's equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 19,496,770 | 19,486,770 |
Treasury stock, shares acquired (in shares) | 1,598,911 | 1,598,911 |
Common Stock, Shares, Outstanding | 17,897,859 | 17,887,859 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Operations (Unaudited) | ||||
Contract revenue | $ 14,961,000 | $ 7,823,000 | $ 42,589,000 | $ 24,823,000 |
Cost of revenue | 11,158,000 | 5,368,000 | 32,649,000 | 17,497,000 |
Write-down of capitalized software development costs | (1,538,000) | 0 | (1,538,000) | 0 |
Gross profit | 2,265,000 | 2,455,000 | 8,402,000 | 7,326,000 |
Operating expenses: | ||||
Selling, general and administrative | 3,811,000 | 3,954,000 | 11,031,000 | 11,939,000 |
Restructuring charges | 1,600,000 | 272,000 | 1,746,000 | 883,000 |
Depreciation | 119,000 | 140,000 | 383,000 | 413,000 |
Amortization of definite-lived intangible assets | 123,000 | 36,000 | 370,000 | 108,000 |
Total operating expenses | 5,653,000 | 4,402,000 | 13,530,000 | 13,343,000 |
Operating loss | (3,388,000) | (1,947,000) | (5,128,000) | (6,017,000) |
Interest income, net | 19,000 | 44,000 | 67,000 | 103,000 |
(Gain) loss on derivative instruments, net | 20,000 | 69,000 | (59,000) | 178,000 |
Other expense, net | (156,000) | 0 | (235,000) | (7,000) |
Loss before income taxes | (3,505,000) | (1,834,000) | (5,355,000) | (5,743,000) |
Provision for income taxes | 50,000 | 61,000 | 211,000 | 162,000 |
Net loss | $ (3,555,000) | $ (1,895,000) | $ (5,566,000) | $ (5,905,000) |
Basic loss per common share | $ (0.20) | $ (0.11) | $ (0.31) | $ (0.33) |
Diluted loss per common share | $ (0.20) | $ (0.11) | $ (0.31) | $ (0.33) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (3,555) | $ (1,895) | $ (5,566) | $ (5,905) |
Foreign currency translation adjustment, net of tax | (76) | (261) | (206) | (362) |
Comprehensive loss | $ (3,631) | $ (2,156) | $ (5,772) | $ (6,267) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock | Total |
Balance at Dec. 31, 2014 | $ 195 | $ 72,917 | $ (45,142) | $ (1,231) | $ (2,999) | $ 23,740 |
Balance (in shares) at Dec. 31, 2014 | 19,486,770 | (1,598,911) | 17,887,859 | |||
Stock-based compensation expense | 392 | $ 392 | ||||
Common stock issued for services provided (in shares) | 10,000 | |||||
Common stock issued for services provided | 15 | 15 | ||||
Foreign currency translation adjustment, net of tax | (206) | (206) | ||||
Net loss | (5,566) | (5,566) | ||||
Balance at Sep. 30, 2015 | $ 195 | $ 73,324 | $ (50,708) | $ (1,437) | $ (2,999) | $ 18,375 |
Balance (in shares) at Sep. 30, 2015 | 19,496,770 | (1,598,911) | 17,897,859 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (5,566,000) | $ (5,905,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Write-down of capitalized software development costs | (1,538,000) | 0 |
Depreciation | 383,000 | 413,000 |
Amortization of definite-lived intangible assets | 370,000 | 108,000 |
Capitalized software amortization | (291,000) | (173,000) |
Gain on change in fair value of contingent consideration, net | 739,000 | 69,000 |
Stock-based compensation expense | 407,000 | 514,000 |
Equity loss on investments | (233,000) | (38,000) |
(Gain) loss on derivative instruments, net | (59,000) | 178,000 |
Changes in assets and liabilities: | ||
Contract receivables | (3,580,000) | (11,928,000) |
Prepaid expenses and other assets | 409,000 | (419,000) |
Accounts payable, accrued compensation and accrued expenses | 1,262,000 | (2,292,000) |
Billings in excess of revenue earned | (1,618,000) | 792,000 |
Accrued warranty reserves | 158,000 | (349,000) |
Other liabilities | (120,000) | (575,000) |
Net cash provided by operating activities | 1,307,000 | 5,155,000 |
Cash flows from investing activities: | ||
Capital expenditures | 217,000 | 240,000 |
Capitalized Software Development Costs | 1,411,000 | 590,000 |
Restrictions of cash as collateral under letters of credit | 1,148,000 | 3,159,000 |
Releases of cash as collateral under letters of credit | 1,824,000 | 34,000 |
Net cash used in investing activities | (952,000) | (3,955,000) |
Cash flows from financing activities: | ||
Payments on line of credit | (339,000) | 0 |
Payments of the liability-classified contingent consideration arrangements | 500,000 | 500,000 |
Net cash used in financing activities | (839,000) | (500,000) |
Effect of exchange rate changes on cash | (267,000) | (315,000) |
Net increase (decrease) in cash and cash equivalents | (751,000) | 385,000 |
Cash and cash equivalents at beginning of year | 13,583,000 | 15,643,000 |
Cash and cash equivalents at end of period | $ 12,832,000 | $ 16,028,000 |
Basis of Presentation and Reven
Basis of Presentation and Revenue Recognition | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Revenue Recognition [Abstract] | |
Basis of Presentation and Revenue Recognition | 1. Basis of Presentation and Revenue Recognition Basis of Presentation The consolidated interim financial statements included herein have been prepared by GSE Systems, Inc. (the "Company" or "GSE") without independent audit. In the opinion of the Company's management, all adjustments and reclassifications of a normal and recurring nature necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted. The results of operations for interim periods are not necessarily an indication of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 19, 2015. Certain reclassifications have been made to prior period amounts to conform to the current presentation. The Company has two reportable segments as follows: · Performance Improvement Solutions Our Performance Improvement Solutions business segment encompasses all of the solution-oriented technologies and services traditionally associated with GSE which focus on both our client's people and their plants and operations. This segment includes various simulation, training and engineering products and services delivered across the breadth of industries we serve. Our simulation solutions include platforms ranging from (1) the non-specific plant systems of our EnVision product line used to teach fundamental processes to newly hired employees, to (2) custom plant-specific simulators used to train plant operators, to (3) engineering-grade simulation solutions used to help clients verify and validate control systems prior to new plant construction or modification of existing plants, to (4) engineering-grade simulation solutions used for human factors engineering. Training applications include turnkey and custom training services to make training more effective. Our engineering services include plant design, automation and control systems design, functional safety and compliance analysis, and engineering consultations. · Nuclear Industry Training and Consulting (formerly our "Staff Augmentation" segment) Nuclear Industry Training and Consulting services provide specialized workforce solutions primarily to the nuclear industry. These employees work at our clients' facilities under client direction. Examples of these highly skilled positions are primarily senior reactor operations instructors, procedure writers, work management specialists, planners and training material developers. This business is managed through our Hyperspring, LLC subsidiary. Hyperspring has been providing these services since 2005. Financial information about the two business segments is provided in Note 15 of the accompanying Consolidated Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. The Company's most significant estimates relate to revenue recognition on long-term contracts, product warranties, capitalization of software development costs, valuation of goodwill and intangible assets acquired, valuation of contingent consideration issued in business acquisitions, and the recoverability of deferred tax assets. Actual results could differ from these estimates and those differences could be material. Revenue Recognition on Long-Term Contracts The Company recognizes revenue through (1) fixed price contracts on the sale of uniquely designed systems containing hardware, software and other material and (2) time and material contracts primarily for Nuclear Industry Training and Consulting support and service agreements. In accordance with ASC 605-35, Construction-Type and Production-Type Contracts, our Performance Improvement Solutions segment accounts for revenue under fixed-price contracts using the percentage-of-completion method. This methodology recognizes revenue and earnings as work progresses on the contract and is based on an estimate of the revenue and earnings earned to date, less amounts recognized in prior periods. The Company bases its estimate of the degree of completion of the contract by reviewing the relationship of costs incurred to date to the expected total costs that will be incurred on the project. Estimated contract earnings are reviewed and revised periodically as the work progresses, and the cumulative effect of any change in estimate is recognized in the period in which the change is identified. Estimated losses are charged against earnings in the period such losses are identified. The Company recognizes revenue arising from contract claims either as income or as an offset against a potential loss only when the amount of the claim can be estimated reliably and realization is probable and there is a legal basis of the claim. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to the Company's revenue recognition as a significant change in the estimates can cause the Company's revenue and related margins to change significantly from the amounts estimated in the early stages of the project. As the Company recognizes revenue under the percentage-of-completion method, it provides an accrual for estimated future warranty costs based on historical and projected claims experience. The Company's long-term contracts generally provide for a one-year warranty on parts, labor and any bug fixes as it relates to software embedded in the systems. The Company's system design contracts do not normally provide for "post customer support service" (PCS) in terms of software upgrades, software enhancements or telephone support. In order to obtain PCS, the customers normally must purchase a separate contract. Such PCS arrangements are generally for a one-year period renewable annually and include customer support, unspecified software upgrades, and maintenance releases. The Company recognizes revenue from these contracts ratably over the life of the agreements. Revenue from the sale of software licenses which do not require significant modifications or customization for the Company's modeling tools are recognized when the license agreement is signed, the license fee is fixed and determinable, delivery has occurred, and collection is considered probable. We evaluate our contracts for multiple deliverables under ASC 605- 25 Revenue Recognition-Multiple Element Arrangements The Company recognizes revenue under time and materials contracts primarily from Nuclear Industry Training and Consulting and certain consulting agreements. Revenue on time and materials contracts is recognized as services are rendered and performed. Under a typical time-and-materials billing arrangement, customers are billed on a regularly scheduled basis, such as biweekly or monthly. At the end of each accounting period, revenue is estimated and accrued for services performed since the last billing cycle. These unbilled amounts are billed the following month. For the three and nine months ended September 30, 2015 and 2014, the following customers provided more than 10% of the Company's consolidated revenue: Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 Tennessee Valley Authority 14.3 % 0.0 % 17.9 % 0.0 % Public Service Enterprise Group Inc. 11.3 % 0.6 % 10.6 % 0.6 % |
Recent Accounting Pronouncement
Recent Accounting Pronouncements Not Yet Adopted | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncements Not Yet Adopted [Abstract] | |
Recent Accounting Pronouncements Not Yet Adopted [Text Block] | 2. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers |
Basic and Diluted Loss Per Comm
Basic and Diluted Loss Per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Basic and Diluted Loss Per Common Share [Abstract] | |
Basic and Diluted Loss Per Common Share | 3. Basic and Diluted Loss per Common Share Basic loss per share is based on the weighted average number of outstanding common shares for the period. Diluted loss per share adjusts the weighted average shares outstanding for the potential dilution that could occur if stock options were exercised into common stock. The number of common shares and common share equivalents used in the determination of basic and diluted loss per share were as follows: (in thousands, except for share amounts) Three Months ended Nine Months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net loss $ (3,555 ) $ (1,895 ) $ (5,566 ) $ (5,905 ) Denominator: Weighted-average shares outstanding for basic earnings per share 17,894,272 17,887,859 17,890,020 17,887,859 Effect of dilutive securities: Employee stock options - - - - Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 17,894,272 17,887,859 17,890,020 17,887,859 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 2,513,321 2,736,703 2,548,401 2,730,558 |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2015 | |
Acquisition [Abstract] | |
Acquisition | 4. Acquisition Hyperspring, LLC On November 14, 2014, (the "Closing Date") the Company, through its operating subsidiary, GSE Power Systems, Inc. (now GSE Performance Solutions, Inc. "GSE Performance"), acquired Hyperspring, LLC ("Hyperspring") pursuant to a Membership Interests Purchase Agreement ("Purchase Agreement") with the sellers of Hyperspring ("Sellers"). Hyperspring, headquartered in Huntsville, Alabama, specializes in training and development, plant operations support services, and Nuclear Industry Training and Consulting, primarily in the United States nuclear industry. Hyperspring operates as a wholly-owned subsidiary of GSE Performance Solutions, Inc. The purchase price allocation included customer relationship intangible assets valued at $779,000 which are being amortized over seven years. GSE Performance paid the Sellers an aggregate of $3.0 million in cash at the closing date. Per the Purchase Agreement, a $1.2 million payment was due to the former Hyperspring members if Hyperspring were successful in renewing its contract with the Tennessee Valley Authority ("TVA") for a two year period for substantially the same scope as was currently being provided and with substantially the same economics. On September 24, 2015, TVA executed a three-year renewal contract with Hyperspring; accordingly the Company paid the $1.2 million payment to the former Hyperspring members in October 2015. In addition, GSE may be required, pursuant to the terms of the Purchase Agreement, to pay the Sellers up to an additional $7.2 million if Hyperspring attains certain EBITDA (earnings before interest, taxes, depreciation and amortization) targets for the three-year period ending November 13, 2017. Accordingly, the total cash paid to the former Hyperspring The following table summarizes the purchase price and purchase price allocation for the acquisition of Hyperspring, LLC, acquired on November 14, 2014. (in thousands) Cash purchase price $ 3,000 Fair value of contingent consideration 3,953 Total purchase price $ 6,953 Purchase price allocation: Cash $ 152 Contract receivables 1,719 Prepaid expenses and other current assets 23 Property and equipment, net 12 Intangible assets 779 Goodwill 5,612 Total assets 8,297 Line of credit 749 Accounts payable, accrued expenses, and other liabilities 586 Billings in excess of revenue earned 9 Total liabilities 1,344 Net assets acquired $ 6,953 Pro forma results. (in thousands except per share data) (unaudited) Three Months ended Nine Months ended September 30, September 30, Pro forma financial information including the acquisition of Hyperspring 2015 2014 2015 2014 Revenue $ 14,961 $ 12,307 $ 42,589 $ 37,930 Operating loss (3,195 ) (1,785 ) (4,701 ) (5,848 ) Net loss (3,363 ) (1,697 ) (5,140 ) (5,749 ) Loss per common share — basic $ (0.19 ) $ (0.09 ) $ (0.29 ) $ (0.32 ) Loss per common share — diluted $ (0.19 ) $ (0.09 ) $ (0.29 ) $ (0.32 ) IntelliQlik LLC In conjunction with the Hyperspring acquisition, GSE Performance invested $250,000 for a 50% interest in IntelliQlik, LLC ("IntelliQlik"). IntelliQlik is developing a software platform for online learning and learning management for the energy market and is jointly owned by GSE Performance and a former Hyperspring member. GSE Performance was obligated to contribute an additional $250,000 should IntelliQlik attain certain development milestones by September 30, 2015. Based on a review of the software platform as of September 30, 2015, GSE concluded that the required development milestones had not been met and did not contribute the additional $250,000 investment. The Company wrote-off the remaining $126,000 balance of its IntelliQlik investment in the third quarter 2015. The loss was recorded under other expense, net. Contingent Consideration Accounting Standards Codification 805, Business Combinations As of September 30, 2015 and December 31, 2014, current contingent consideration totaled $2.6 million and $2.8 million, respectively. As of September 30, 2015 and December 31, 2014, we also had accrued contingent consideration totaling $2.2 million and $1.9 million, respectively, which represents the portion of contingent consideration estimated to be payable greater than twelve months from the balance sheet date. During the three and nine months ended September 30, 2015 the Company made payments of $182,000 and $500,000, respectively, to the former EnVision shareholders in accordance with the purchase agreements. For the nine months ended September 30, 2015, the Company did not make any payments to the former owners of Hyperspring. Refer to the Subsequent Event (in thousands) September 30, December 31, 2015 2014 Hyperspring, LLC $ 2,601 $ 2,152 IntelliQlik, LLC - 213 EnVision Systems, Inc. - 477 Current contingent consideration $ 2,601 $ 2,842 Hyperspring, LLC $ 2,221 $ 1,948 Contingent consideration $ 2,221 $ 1,948 |
Contract Receivables
Contract Receivables | 9 Months Ended |
Sep. 30, 2015 | |
Contract Receivables [Abstract] | |
Contract Receivables | 5. Contract Receivables Contract receivables represent balances due from a broad base of both domestic and international customers. All contract receivables are considered to be collectible within twelve months. Recoverable costs and accrued profit not billed represent costs incurred and associated profit accrued on contracts that will become billable upon future milestones or completion of contracts. The components of contract receivables are as follows: (in thousands) September 30, December 31, 2015 2014 Billed receivables $ 7,473 $ 10,792 Recoverable costs and accrued profit not billed 4,769 5,060 Allowance for doubtful accounts (2 ) (22 ) Total contract receivables, net $ 12,240 $ 15,830 Recoverable costs and accrued profit not billed totaled $4.8 million and $5.1 million as of September 30, 2015 and December 31, 2014, respectively. During October 2015, the Company invoiced $1.9 million of the unbilled amounts. The following customers accounted for more than 10% of the Company's consolidated contract receivables as of September 30, 2015 and December 31, 2014, respectively: September 30, 2015 December 31, 2014 China Nuclear Power Engineering Company 14.7 % 3.9 % State Nuclear Power Automation System Engineering Co. 0.4 % 10.2 % |
Software Development Costs
Software Development Costs | 9 Months Ended |
Sep. 30, 2015 | |
Software Development Costs [Abstract] | |
Software Development Costs | 6. Software Development Costs Certain computer software development costs are capitalized in the accompanying consolidated balance sheets. Capitalization of computer software development costs begins upon the establishment of technological feasibility. Capitalization ceases and amortization of capitalized costs begins when the software product is commercially available for general release to customers. Amortization of capitalized computer software development costs is included in cost of revenue and is determined using the straight-line method over the remaining estimated economic life of the product, typically three years. On an annual basis, and more frequently as conditions indicate, the Company assesses the recovery of the unamortized software development costs by estimating the net undiscounted cash flows expected to be generated by the sale of the product. If the undiscounted cash flows are not sufficient to recover the unamortized software costs the Company will write-down the investment to its estimated fair value based on future undiscounted cash flows. The excess of any unamortized software development costs over the related net realizable value is written down and charged to cost of revenue. During the third quarter of 2015, the Company's new CEO conducted a review of the Company's organizational and cost structure and software development plans. Based upon this review, GSE decided to terminate the Enterprise Data Management ("EDM") development program. As a result, GSE believes that the full value of the capitalized software development costs relating to EDM are no longer recoverable. As of September 30, 2015, GSE recorded a $1.5 million write-down of software development costs which was the full capitalized balance of its EDM development projects. Software development costs capitalized were $473,000 and $1.4 million for the three and nine months ended September 30, 2015, respectively, and $241,000 and $590,000 for the three and nine months ended September 30, 2014, respectively. Total amortization expense was $96,000 and $291,000 for the three and nine months ended September 30, 2015, respectively, and $78,000 and $173,000 for the three and nine months ended September 30, 2014, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Goodwill We review goodwill for impairment annually as of November 30 and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We test goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. generally accepted accounting principles. After the acquisition of Hyperspring, LLC ("Hyperspring") on November 14, 2014, our reporting units are: (i) Performance Improvement Solutions and (ii) Nuclear Industry Training and Consulting. At September 30, 2015 and December 31, 2014, the $5.6 million of goodwill balance was related to the Hyperspring acquisition and is assigned to our Nuclear Industry Training and Consulting segment. Accounting Standards Update ("ASU") 2011-08, Testing Goodwill for Impairment Intangible Assets Subject to Amortization The Company's intangible assets include amounts recognized in connection with business acquisitions, including customer relationships, contract backlog and technology. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets, except for contract backlog and contractual customer relationships which are recognized in proportion to the related projected revenue streams. The Company reviews specific definite-lived intangibles for impairment when events occur that may impact their value in accordance with the respective accounting guidance for long-lived assets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 8. Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures The levels of the fair value hierarchy established by ASC 820 are: Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. Level 3: inputs are unobservable and reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company considers the recorded value of certain of its financial assets and liabilities, which consist primarily of accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities at September 30, 2015 and December 31, 2014 based upon the short-term nature of the assets and liabilities. The following table presents assets and liabilities measured at fair value at September 30, 2015: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Money market funds $ 12,129 $ - $ - $ 12,129 Foreign exchange contracts - 124 - 124 Total assets $ 12,129 $ 124 $ - $ 12,253 Foreign exchange contracts $ - $ (107 ) $ - $ (107 ) Total liabilities $ - $ (107 ) $ - $ (107 ) The following table presents assets and liabilities measured at fair value at December 31, 2014: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Money market funds $ 11,661 $ - $ - $ 11,661 Foreign exchange contracts - 92 - 92 Total assets $ 11,661 $ 92 $ - $ 11,753 Foreign exchange contracts $ - $ (24 ) $ - $ (24 ) Total liabilities $ - $ (24 ) $ - $ (24 ) |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments [Abstract] | |
Derivative Instruments | 9. Derivative Instruments The Company utilizes forward foreign currency exchange contracts to manage market risks associated with the fluctuations in foreign currency exchange rates. It is the Company's policy to use such derivative financial instruments to protect against market risk arising in the normal course of business in order to reduce the impact of these exposures. The Company minimizes credit exposure by limiting counterparties to nationally recognized financial institutions. As of September 30, 2015, the Company had foreign exchange contracts outstanding of approximately 2.6 million Euro, 0.6 million Pounds Sterling, 0.5 million Australian Dollars, and 12.5 million Japanese Yen at fixed rates. The contracts expire on various dates through December 2016. At December 31, 2014, the Company had contracts outstanding of approximately 1.4 million Euro, 0.3 million Pounds Sterling, 0.8 million Australian Dollars, and 0.5 million Malaysian Ringgits at fixed rates. The Company has not designated any of the foreign exchange contracts outstanding as hedges and has recorded the estimated fair value of the contracts in the consolidated balance sheets as follows: September 30, December 31, (in thousands) 2015 2014 Asset derivatives Prepaid expenses and other current assets $ 121 $ 71 Other assets 3 21 124 92 Liability derivatives Other current liabilities (15 ) (23 ) Other liabilities (92 ) (1 ) (107 ) (24 ) Net fair value $ 17 $ 68 The changes in the fair value of the foreign exchange contracts are included in net gain (loss) on derivative instruments in the consolidated statements of operations. The foreign currency denominated contract receivables, billings in excess of revenue earned and subcontractor accruals that are related to the outstanding foreign exchange contracts are remeasured at the end of each period into the functional currency using the current exchange rate at the end of the period. The gain or loss resulting from such remeasurement is also included in net gain (loss) on derivative instruments in the consolidated statements of operations. For the three and nine months ended September 30, 2015 and 2014, the Company recognized a net gain (loss) on its derivative instruments as outlined below: Three Months ended September 30, Nine Months ended September 30, (in thousands) 2015 2014 2015 2014 Foreign exchange contracts- change in fair value $ 34 $ 58 $ (53 ) $ 312 Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals (14 ) 11 (6 ) (134 ) Gain (loss) on derivative instruments, net $ 20 $ 69 $ (59 ) $ 178 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation The Company recognizes compensation expense for all equity-based compensation awards issued to employees, directors and non-employees that are expected to vest. Compensation cost is based on the fair value of awards as of the grant date. The Company recognized $136,000 and $175,000 of stock-based compensation expense for the three months ended September 30, 2015 and 2014, respectively, under the fair value method and recognized $407,000 and $514,000 of stock-based compensation expense for the nine months ended September 30, 2015 and 2014, respectively. In the third quarter 2015, the Company granted 975,000 Restricted Stock Unit's with an aggregate fair value of $673,500. The RSUs vest upon the achievement of specific performance measures. The fair value of the RSUs is expensed ratably over the requisite service period, which ranges between one and five years. The Company granted 10,000 and 60,000 stock options for the three and nine months ended September 30, 2015, respectively. The fair value of the options granted for the three and nine months ended September 30, 2015 was $8,000 and $48,000, respectively. The Company granted 0 and 60,000 stock options for the three and nine months ended September 30, 2014, respectively. The fair value of the granted options at the grant date was $56,000. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 11. Long-Term Debt At September 30, 2015 and December 31, 2014, the Company had no long-term debt. Lines of Credit Susquehanna Bank At September 30, 2015, the Company had a Master Loan and Security Agreement and Revolving Credit Note with Susquehanna Bank ("Susquehanna"). The Company and its subsidiary, GSE Performance Solutions, Inc., were jointly and severally liable as co-borrowers. The Loan Agreement provides a $7.5 million revolving line of credit for the purpose of (i) issuing stand-by letters of credit and (ii) providing working capital. Working capital advances bear interest at a rate equal to the Wall Street Journal Prime Rate of Interest, floating with a floor of 4 1/2%. The agreement expires on June 30, 2016. As collateral for the Company's obligations, the Company granted a first lien and security interest in all of the assets of the Company, including but not limited to, accounts receivable, proceeds and products, intangibles, trademarks, patents, intellectual property, machinery and equipment. On September 9, 2014, the Company signed a Third Comprehensive Amendment to the Master Loan and Security Agreement. According to the Third Amendment, the Company is to maintain a segregated cash collateral account at Susquehanna Bank equal to the greater of (i) $3.0 million or (ii) the aggregate principal amounts of all Loans outstanding under the Revolving Credit Facility (including any issued and outstanding letters of credit, working capital advances, and negative foreign exchange positions) as security for the Company's obligations. Under this Amendment, Susquehanna Bank shall have complete and unconditional control over the cash collateral account. On September 30, 2014, Susquehanna Bank collateralized the outstanding letters of credit issued under the line of credit. At September 30, 2015 and December 31, 2014, the cash collateral account totaled $3.6 million and $4.2 million, respectively. The balances were classified as restricted cash on the balance sheet. The credit agreements contain certain restrictive covenants regarding future acquisitions and incurrence of debt. On July 31, 2015, the Company signed a Fifth Comprehensive Amendment to the Master Loan and Security Agreement in which the Company's financial covenants were reduced from four to two, and the covenant targets were adjusted. As of Covenant September 30, 2015 Minimum tangible capital base Must Exceed $10.5 million $10.9 million Quick ratio Must Exceed 1.00 : 1.00 1.43 : 1.00 As of September 30, 2015, the Company was in compliance with its financial covenants as defined above. IberiaBank At September 30, 2015, Hyperspring, LLC has a $1.0 million working capital line of credit with IberiaBank for a one year period. Under the executed promissory note, interest is payable monthly at the rate of 1.00 percentage points over the prime rate of interest as published in the money rate section of the Wall Street Journal resulting in an effective interest rate of 4.25%. The line is secured by all accounts of Hyperspring and guaranteed by GSE Systems, Inc. The line of credit expires on July 6, 2016. At September 30, 2015, the Company had no outstanding amounts under the line of credit. Letters of Credit and Bonds As of September 30, 2015, the Company has thirteen standby letters of credit and one surety bond totaling $3.6 million which represent advance payment and performance bonds on twelve contracts. The Company has deposited the full value of thirteen standby letters of credit in escrow accounts, amounting to $3.6 million, which have been restricted in that the Company does not have access to these funds until the related letters of credit have expired. The cash has been recorded on the Company's balance sheet at September 30, 2015 as restricted cash. |
Product Warranty
Product Warranty | 9 Months Ended |
Sep. 30, 2015 | |
Product Warranty [Abstract] | |
Product Warranty | 12. Product Warranty As the Company recognizes revenue under the percentage-of-completion method, it provides an accrual for estimated future warranty costs based on historical experience and projected claims. The activity in the warranty account is as follows: (in thousands) Balance at December 31, 2014 $ 1,456 Warranty provision 514 Warranty claims (312 ) Currency adjustment (44 ) Balance at September 30, 2015 $ 1,614 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 13. Income Taxes The Company files in the United States federal jurisdiction and in several state and foreign jurisdictions. Because of the net operating loss carryforwards, the Company is subject to U.S. federal and state income tax examinations from years 1997 forward and is subject to foreign tax examinations by tax authorities for years 2007 and forward. Open tax years related to state and foreign jurisdictions remain subject to examination but are not considered material to our financial position, results of operations or cash flows. An uncertain tax position taken or expected to be taken in a tax return is recognized in the financial statements when it is more likely than not (i.e., a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties related to income taxes are accounted for as income tax expense. The Company has appropriately accounted for its uncertain tax positions. In 2014, the Company paid income taxes in the UK and India and expects to do so again in 2015. The Company has a full valuation allowance on its U.S., Swedish, and Chinese net deferred tax assets at September 30, 2015. |
Preferred Stock Rights
Preferred Stock Rights | 9 Months Ended |
Sep. 30, 2015 | |
Preferred Stock Rights [Abstract] | |
Preferred Stock Rights [Text Block] | 14. Preferred Stock Rights On March 21, 2011, the Board of Directors of the Company declared a dividend, payable to holders of record as of the close of business on April 1, 2011, of one preferred stock purchase right (a "Right") for each outstanding share of common stock, par value $0.01 per share, of the Company (the "Common Stock"). In addition, the Company will issue one Right with each new share of Common Stock issued. In connection therewith, on March 21, 2011, the Company entered into a Stockholder Protection Rights Agreement (as amended from time to time, the Rights Agreement) with Continental Stock Transfer & Trust Company, as Rights Agent, which has a term of three years, unless amended by the Board of Directors in accordance with the terms of the Rights Agreement. On March 21, 2014, the Rights Agreement was amended to extend the term an additional two years. The Rights Agreement will now expire on March 21, 2016. The Rights trade with and are inseparable from the Common Stock and are not evidenced by separate certificates unless they become exercisable. Each Right entitles its holder to purchase from the Company one-hundredth of a share of participating preferred stock having economic and voting terms similar to the Common Stock at an exercise price of $8.00 per Right, subject to adjustment in accordance with the terms of the Rights Agreement, once the Rights become exercisable. Under the Rights Agreement, the Rights become exercisable if any person or group acquires 20% or more of the Common Stock or, in the case of any person or group that owned 20% or more of the Common Stock as of March 21, 2011, upon the acquisition of any additional shares by such person or group. The Company, its subsidiaries, employee benefit plans of the Company or any of its subsidiaries and any entity holding Common Stock for or pursuant to the terms of any such plan are accepted. Upon exercise of the Right in accordance with the Rights Agreement, the holder would be able to purchase a number of shares of Common Stock from the Company having an aggregate market price (as defined in the Rights Agreement) equal to twice the then-current exercise price for an amount in cash equal to the then-current exercise price. In addition, the Company may, in certain circumstances and pursuant to the terms of the Rights Agreement, exchange the Rights for one share of Common Stock or an equivalent security for each Right or, alternatively, redeem the Rights for $0.001 per Right. The Rights will not prevent a takeover of our Company, but may cause substantial dilution to a person that acquires 20% or more of the Company's Common Stock. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Segment Information | 15. Segment Information The Company has two reportable business segments. The Performance Improvement Solutions business segment provides simulation, training and engineering products and services delivered across the breadth of industries we serve. Solutions include simulation for both training and engineering applications. Example training applications include turnkey and custom training services, while engineering services include plant design verification and validation. We provide these services across all our market segments. Contracts typically range from ten months to three years. The Nuclear Industry Training and Consulting services segment provides specialized workforce solutions primarily to the U.S. nuclear industry, working at our clients' facilities. This business is managed through our Hyperspring, LLC subsidiary. Hyperspring has been providing these services since 2005. The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated loss before income tax expense: (in thousands) Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 Contract revenue: Performance Improvement Solutions $ 9,903 $ 7,823 $ 26,911 $ 24,823 Nuclear Industry Training and Consulting 5,058 - 15,678 - $ 14,961 $ 7,823 $ 42,589 $ 24,823 Operating income (loss): Performance Improvement Solutions $ (3,604 ) $ (1,905 ) $ (5,493 ) $ (5,948 ) Nuclear Industry Training and Consulting 442 - 1,104 - Loss on change in fair value of contingent consideration, net (226 ) (42 ) (739 ) (69 ) Operating loss $ (3,388 ) $ (1,947 ) $ (5,128 ) $ (6,017 ) Interest income, net 19 44 67 103 Gain (loss) on derivative instruments, net 20 69 (59 ) 178 Other expense, net (156 ) - (235 ) (7 ) Loss before income taxes $ (3,505 ) $ (1,834 ) $ (5,355 ) $ (5,743 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 16. Subsequent Events Per the Hyperspring LLC Purchase Agreement, a $1.2 million payment was due to the former Hyperspring members if Hyperspring were successful in renewing its contract with the Tennessee Valley Authority ("TVA") for at least a two year period for substantially the same scope as was being provided at the acquisition date and with substantially the same economics. On September 24, 2015, TVA executed a three-year renewal contract with Hyperspring; accordingly, the Company paid the $1.2 million payment to the former Hyperspring members in October 2015. |
Basis of Presentation and Rev24
Basis of Presentation and Revenue Recognition (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Revenue Recognition [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated interim financial statements included herein have been prepared by GSE Systems, Inc. (the "Company" or "GSE") without independent audit. In the opinion of the Company's management, all adjustments and reclassifications of a normal and recurring nature necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted. The results of operations for interim periods are not necessarily an indication of the results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 19, 2015. Certain reclassifications have been made to prior period amounts to conform to the current presentation. The Company has two reportable segments as follows: · Performance Improvement Solutions Our Performance Improvement Solutions business segment encompasses all of the solution-oriented technologies and services traditionally associated with GSE which focus on both our client's people and their plants and operations. This segment includes various simulation, training and engineering products and services delivered across the breadth of industries we serve. Our simulation solutions include platforms ranging from (1) the non-specific plant systems of our EnVision product line used to teach fundamental processes to newly hired employees, to (2) custom plant-specific simulators used to train plant operators, to (3) engineering-grade simulation solutions used to help clients verify and validate control systems prior to new plant construction or modification of existing plants, to (4) engineering-grade simulation solutions used for human factors engineering. Training applications include turnkey and custom training services to make training more effective. Our engineering services include plant design, automation and control systems design, functional safety and compliance analysis, and engineering consultations. · Nuclear Industry Training and Consulting (formerly our "Staff Augmentation" segment) Nuclear Industry Training and Consulting services provide specialized workforce solutions primarily to the nuclear industry. These employees work at our clients' facilities under client direction. Examples of these highly skilled positions are primarily senior reactor operations instructors, procedure writers, work management specialists, planners and training material developers. This business is managed through our Hyperspring, LLC subsidiary. Hyperspring has been providing these services since 2005. Financial information about the two business segments is provided in Note 15 of the accompanying Consolidated Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. The Company's most significant estimates relate to revenue recognition on long-term contracts, product warranties, capitalization of software development costs, valuation of goodwill and intangible assets acquired, valuation of contingent consideration issued in business acquisitions, and the recoverability of deferred tax assets. Actual results could differ from these estimates and those differences could be material. |
Revenue Recognition | Revenue Recognition on Long-Term Contracts The Company recognizes revenue through (1) fixed price contracts on the sale of uniquely designed systems containing hardware, software and other material and (2) time and material contracts primarily for Nuclear Industry Training and Consulting support and service agreements. In accordance with ASC 605-35, Construction-Type and Production-Type Contracts, our Performance Improvement Solutions segment accounts for revenue under fixed-price contracts using the percentage-of-completion method. This methodology recognizes revenue and earnings as work progresses on the contract and is based on an estimate of the revenue and earnings earned to date, less amounts recognized in prior periods. The Company bases its estimate of the degree of completion of the contract by reviewing the relationship of costs incurred to date to the expected total costs that will be incurred on the project. Estimated contract earnings are reviewed and revised periodically as the work progresses, and the cumulative effect of any change in estimate is recognized in the period in which the change is identified. Estimated losses are charged against earnings in the period such losses are identified. The Company recognizes revenue arising from contract claims either as income or as an offset against a potential loss only when the amount of the claim can be estimated reliably and realization is probable and there is a legal basis of the claim. Uncertainties inherent in the performance of contracts include labor availability and productivity, material costs, change order scope and pricing, software modification and customer acceptance issues. The reliability of these cost estimates is critical to the Company's revenue recognition as a significant change in the estimates can cause the Company's revenue and related margins to change significantly from the amounts estimated in the early stages of the project. As the Company recognizes revenue under the percentage-of-completion method, it provides an accrual for estimated future warranty costs based on historical and projected claims experience. The Company's long-term contracts generally provide for a one-year warranty on parts, labor and any bug fixes as it relates to software embedded in the systems. The Company's system design contracts do not normally provide for "post customer support service" (PCS) in terms of software upgrades, software enhancements or telephone support. In order to obtain PCS, the customers normally must purchase a separate contract. Such PCS arrangements are generally for a one-year period renewable annually and include customer support, unspecified software upgrades, and maintenance releases. The Company recognizes revenue from these contracts ratably over the life of the agreements. Revenue from the sale of software licenses which do not require significant modifications or customization for the Company's modeling tools are recognized when the license agreement is signed, the license fee is fixed and determinable, delivery has occurred, and collection is considered probable. We evaluate our contracts for multiple deliverables under ASC 605- 25 Revenue Recognition-Multiple Element Arrangements The Company recognizes revenue under time and materials contracts primarily from Nuclear Industry Training and Consulting and certain consulting agreements. Revenue on time and materials contracts is recognized as services are rendered and performed. Under a typical time-and-materials billing arrangement, customers are billed on a regularly scheduled basis, such as biweekly or monthly. At the end of each accounting period, revenue is estimated and accrued for services performed since the last billing cycle. These unbilled amounts are billed the following month. |
Recent Accounting Pronounceme25
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncements Not Yet Adopted [Abstract] | |
New accounting standards | 2. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers |
Basis of Presentation and Rev26
Basis of Presentation and Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Revenue Recognition [Abstract] | |
Percentage of revenue by major customers | For the three and nine months ended September 30, 2015 and 2014, the following customers provided more than 10% of the Company's consolidated revenue: Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 Tennessee Valley Authority 14.3 % 0.0 % 17.9 % 0.0 % Public Service Enterprise Group Inc. 11.3 % 0.6 % 10.6 % 0.6 % |
Basic and Diluted Loss Per Co27
Basic and Diluted Loss Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Basic and Diluted Loss Per Common Share [Abstract] | |
Number of common shares and common share equivalents used in the determination of basic and diluted income (loss) per share | The number of common shares and common share equivalents used in the determination of basic and diluted loss per share were as follows: (in thousands, except for share amounts) Three Months ended Nine Months ended September 30, September 30, 2015 2014 2015 2014 Numerator: Net loss $ (3,555 ) $ (1,895 ) $ (5,566 ) $ (5,905 ) Denominator: Weighted-average shares outstanding for basic earnings per share 17,894,272 17,887,859 17,890,020 17,887,859 Effect of dilutive securities: Employee stock options - - - - Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 17,894,272 17,887,859 17,890,020 17,887,859 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 2,513,321 2,736,703 2,548,401 2,730,558 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the purchase price and purchase price allocation for the acquisition of Hyperspring, LLC, acquired on November 14, 2014. (in thousands) Cash purchase price $ 3,000 Fair value of contingent consideration 3,953 Total purchase price $ 6,953 Purchase price allocation: Cash $ 152 Contract receivables 1,719 Prepaid expenses and other current assets 23 Property and equipment, net 12 Intangible assets 779 Goodwill 5,612 Total assets 8,297 Line of credit 749 Accounts payable, accrued expenses, and other liabilities 586 Billings in excess of revenue earned 9 Total liabilities 1,344 Net assets acquired $ 6,953 |
Schedule of Pro Forma Results | Pro forma results. (in thousands except per share data) (unaudited) Three Months ended Nine Months ended September 30, September 30, Pro forma financial information including the acquisition of Hyperspring 2015 2014 2015 2014 Revenue $ 14,961 $ 12,307 $ 42,589 $ 37,930 Operating loss (3,195 ) (1,785 ) (4,701 ) (5,848 ) Net loss (3,363 ) (1,697 ) (5,140 ) (5,749 ) Loss per common share — basic $ (0.19 ) $ (0.09 ) $ (0.29 ) $ (0.32 ) Loss per common share — diluted $ (0.19 ) $ (0.09 ) $ (0.29 ) $ (0.32 ) |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | As of September 30, 2015 and December 31, 2014, current contingent consideration totaled $2.6 million and $2.8 million, respectively. As of September 30, 2015 and December 31, 2014, we also had accrued contingent consideration totaling $2.2 million and $1.9 million, respectively, which represents the portion of contingent consideration estimated to be payable greater than twelve months from the balance sheet date. During the three and nine months ended September 30, 2015 the Company made payments of $182,000 and $500,000, respectively, to the former EnVision shareholders in accordance with the purchase agreements. For the nine months ended September 30, 2015, the Company did not make any payments to the former owners of Hyperspring. Refer to the Subsequent Event (in thousands) September 30, December 31, 2015 2014 Hyperspring, LLC $ 2,601 $ 2,152 IntelliQlik, LLC - 213 EnVision Systems, Inc. - 477 Current contingent consideration $ 2,601 $ 2,842 Hyperspring, LLC $ 2,221 $ 1,948 Contingent consideration $ 2,221 $ 1,948 |
Contract Receivables (Tables)
Contract Receivables (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Contract Receivables [Abstract] | |
Components of contract receivables | The components of contract receivables are as follows: (in thousands) September 30, December 31, 2015 2014 Billed receivables $ 7,473 $ 10,792 Recoverable costs and accrued profit not billed 4,769 5,060 Allowance for doubtful accounts (2 ) (22 ) Total contract receivables, net $ 12,240 $ 15,830 |
Concentration Risk [Line Items] | |
Contract receivable by major customers | The following customers accounted for more than 10% of the Company's consolidated contract receivables as of September 30, 2015 and December 31, 2014, respectively: September 30, 2015 December 31, 2014 China Nuclear Power Engineering Company 14.7 % 3.9 % State Nuclear Power Automation System Engineering Co. 0.4 % 10.2 % |
Fair Value of Financial Instr30
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments [Abstract] | |
Assets and liabilities measured at fair value | The following table presents assets and liabilities measured at fair value at September 30, 2015: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Money market funds $ 12,129 $ - $ - $ 12,129 Foreign exchange contracts - 124 - 124 Total assets $ 12,129 $ 124 $ - $ 12,253 Foreign exchange contracts $ - $ (107 ) $ - $ (107 ) Total liabilities $ - $ (107 ) $ - $ (107 ) The following table presents assets and liabilities measured at fair value at December 31, 2014: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) (Level 1) (Level 2) (Level 3) Total Money market funds $ 11,661 $ - $ - $ 11,661 Foreign exchange contracts - 92 - 92 Total assets $ 11,661 $ 92 $ - $ 11,753 Foreign exchange contracts $ - $ (24 ) $ - $ (24 ) Total liabilities $ - $ (24 ) $ - $ (24 ) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments [Abstract] | |
Estimated fair value of the contracts in the consolidated balance sheets | The Company has not designated any of the foreign exchange contracts outstanding as hedges and has recorded the estimated fair value of the contracts in the consolidated balance sheets as follows: September 30, December 31, (in thousands) 2015 2014 Asset derivatives Prepaid expenses and other current assets $ 121 $ 71 Other assets 3 21 124 92 Liability derivatives Other current liabilities (15 ) (23 ) Other liabilities (92 ) (1 ) (107 ) (24 ) Net fair value $ 17 $ 68 |
Derivative Instruments, Gain (Loss) [Table Text Block] | For the three and nine months ended September 30, 2015 and 2014, the Company recognized a net gain (loss) on its derivative instruments as outlined below: Three Months ended September 30, Nine Months ended September 30, (in thousands) 2015 2014 2015 2014 Foreign exchange contracts- change in fair value $ 34 $ 58 $ (53 ) $ 312 Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals (14 ) 11 (6 ) (134 ) Gain (loss) on derivative instruments, net $ 20 $ 69 $ (59 ) $ 178 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Long-Term Debt [Abstract] | |
Susquehanna Bank Loan Agreement debt covenants | The credit agreements contain certain restrictive covenants regarding future acquisitions and incurrence of debt. On July 31, 2015, the Company signed a Fifth Comprehensive Amendment to the Master Loan and Security Agreement in which the Company's financial covenants were reduced from four to two, and the covenant targets were adjusted. As of Covenant September 30, 2015 Minimum tangible capital base Must Exceed $10.5 million $10.9 million Quick ratio Must Exceed 1.00 : 1.00 1.43 : 1.00 As of September 30, 2015, the Company was in compliance with its financial covenants as defined above. |
Product Warranty (Tables)
Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Product Warranty [Abstract] | |
Activities in the product warranty accounts | As the Company recognizes revenue under the percentage-of-completion method, it provides an accrual for estimated future warranty costs based on historical experience and projected claims. The activity in the warranty account is as follows: (in thousands) Balance at December 31, 2014 $ 1,456 Warranty provision 514 Warranty claims (312 ) Currency adjustment (44 ) Balance at September 30, 2015 $ 1,614 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated loss before income tax expense: (in thousands) Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 Contract revenue: Performance Improvement Solutions $ 9,903 $ 7,823 $ 26,911 $ 24,823 Nuclear Industry Training and Consulting 5,058 - 15,678 - $ 14,961 $ 7,823 $ 42,589 $ 24,823 Operating income (loss): Performance Improvement Solutions $ (3,604 ) $ (1,905 ) $ (5,493 ) $ (5,948 ) Nuclear Industry Training and Consulting 442 - 1,104 - Loss on change in fair value of contingent consideration, net (226 ) (42 ) (739 ) (69 ) Operating loss $ (3,388 ) $ (1,947 ) $ (5,128 ) $ (6,017 ) Interest income, net 19 44 67 103 Gain (loss) on derivative instruments, net 20 69 (59 ) 178 Other expense, net (156 ) - (235 ) (7 ) Loss before income taxes $ (3,505 ) $ (1,834 ) $ (5,355 ) $ (5,743 ) |
Basis of Presentation and Rev35
Basis of Presentation and Revenue Recognition (Details) - Segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basis of Presentation and Revenue Recognition [Abstract] | ||||
Number of reportable segment | 2 | |||
Term of warranty (in years) | 1 year | |||
Period of post customer support service (PCS) (in years) | 1 year | |||
Revenue [Member] | ||||
Revenue by major customers [Abstract] | ||||
Concentration Risk, Benchmark Description | the following customers provided more than 10% of the Company’s consolidated revenue | |||
Revenue [Member] | Tennessee Valley Authority [Member] | ||||
Revenue by major customers [Abstract] | ||||
Percentage of revenue contributed by major customers (in hundredths) | 14.30% | 0.00% | 17.90% | 0.00% |
Revenue [Member] | Public Service Enterprise Group Inc. [Member] | ||||
Revenue by major customers [Abstract] | ||||
Percentage of revenue contributed by major customers (in hundredths) | 11.30% | 0.60% | 10.60% | 0.60% |
Basic and Diluted Loss Per Co36
Basic and Diluted Loss Per Common Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Net loss | $ (3,555) | $ (1,895) | $ (5,566) | $ (5,905) |
Denominator: | ||||
Weighted-average shares outstanding for basic earnings per share (in shares) | 17,894,272 | 17,887,859 | 17,890,020 | 17,887,859 |
Effect of dilutive securities: | ||||
Employee stock options (in shares) | 0 | 0 | 0 | 0 |
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares) | 17,894,272 | 17,887,859 | 17,890,020 | 17,887,859 |
Shares related to dilutive securities excluded because inclusion would be anti-dilutive (in shares) | 2,513,321 | 2,736,703 | 2,548,401 | 2,730,558 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 14, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Goodwill | $ 5,612 | $ 5,612 | $ 5,612 | |||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Revenue | 14,961 | $ 12,307 | 42,589 | $ 37,930 | ||
Operating loss | (3,195) | (1,785) | (4,701) | (5,848) | ||
Net loss | $ (3,363) | $ (1,697) | $ (5,140) | $ (5,749) | ||
Loss per common share - basic | $ (0.19) | $ (0.09) | $ (0.29) | $ (0.32) | ||
Loss per common share - diluted | $ (0.19) | $ (0.09) | $ (0.29) | $ (0.32) | ||
Hyperspring, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Name of Acquired Entity | Hyperspring, LLC | |||||
Business Acquisition, Effective Date of Acquisition | Nov. 14, 2014 | |||||
Percentage of ownership interest acquired (in hundredths) | 100.00% | |||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 11,400 | |||||
Cash purchase price | 3,000 | |||||
Fair value of contingent consideration | 3,953 | |||||
Total purchase price | 6,953 | |||||
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Cash | 152 | |||||
Contract receivables | 1,719 | |||||
Prepaid expenses and other current assets | 23 | |||||
Property, plant and equipment, net | 12 | |||||
Intangible assets | 779 | |||||
Goodwill | 5,612 | |||||
Total assets | 8,297 | |||||
Line of credit | 749 | |||||
Accounts payable, accrued expenses and other liabilities | 586 | |||||
Billings in excess of revenue earned | 9 | |||||
Total liabilities | 1,344 | |||||
Net assets acquired | 6,953 | |||||
Hyperspring, LLC [Member] | EBITDA Target [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 7,200 | |||||
Business Combination, Contingent Consideration Arrangements, Description | certain EBITDA (earnings before interest, taxes, depreciation and amortization) targets | |||||
Business Acquisition Contingent Consideration Agreement | for the three-year period ending November 13, 2017 | |||||
Hyperspring, LLC [Member] | Tennessee Valley Authority Renewal Target [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 1,200 | |||||
Business Combination, Contingent Consideration Arrangements, Description | if Hyperspring were successful in renewing its contract with the Tennessee Valley Authority ("TVA") for a two year period for substantially the same scope as was currently being provided and with substantially the same economics. | |||||
Hyperspring, LLC [Member] | Contractual Customer Relationships [Member] | ||||||
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Intangible assets | $ 779 | |||||
Hyperspring, LLC [Member] | Contractual Customer Relationships [Member] | Maximum [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | |||||
Hyperspring, LLC [Member] | Customer Relationships [Member] | ||||||
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Intangible assets | $ 0 | |||||
Hyperspring, LLC [Member] | Developed Technology [Member] | ||||||
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Intangible assets | 0 | |||||
Hyperspring, LLC [Member] | In Process Research and Development [Member] | ||||||
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Intangible assets | 0 | |||||
Hyperspring, LLC [Member] | Domain Names and Other Marketing Related [Member] | ||||||
Business Combinations Purchase Price Allocation [Abstract] | ||||||
Intangible assets | $ 0 | |||||
IntelliQlik, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Name of Acquired Entity | IntelliQlik, LLC | |||||
Business Acquisition, Effective Date of Acquisition | Nov. 14, 2014 | |||||
Percentage of ownership interest acquired (in hundredths) | 50.00% | |||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 250 | |||||
Payments to Acquire Equity Method Investments | $ 250 | |||||
Equity Method Investment, Other than Temporary Impairment | $ 126 |
Acquisition, Contingent Conside
Acquisition, Contingent Consideration by Acquisition (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Other Current Liabilities [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent Consideration, Liability | $ 2,601 | $ 2,842 |
Other non current liabilities [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent Consideration, Liability | 2,221 | 1,948 |
Hyperspring, LLC [Member] | Other Current Liabilities [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent Consideration, Liability | 2,601 | 2,152 |
Hyperspring, LLC [Member] | Other non current liabilities [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent Consideration, Liability | 2,221 | 1,948 |
IntelliQlik, LLC [Member] | Other Current Liabilities [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent Consideration, Liability | 0 | 213 |
EnVision Systems, Inc. [Member] | Other Current Liabilities [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent Consideration, Liability | $ 0 | $ 477 |
Contract Receivables (Details)
Contract Receivables (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Contract Receivables [Abstract] | |||
Maximum term of contract receivables (in months) | 12 months | ||
Components of contract receivables [Abstract] | |||
Billed receivables | $ 7,473 | $ 10,792 | |
Recoverable costs and accrued profit not billed | 4,769 | 5,060 | |
Allowance for doubtful accounts | 2 | 22 | |
Total contract receivables, net | $ 12,240 | $ 15,830 | |
Unbilled Contract Receivables Billed during October 2015 | $ 1,900 | ||
State Nuclear Power Automation System Engineering Co. [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of contract receivables accounted by major customers (in hundredths) | 0.40% | 10.20% | |
China Nuclear Power Engineering Company [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of contract receivables accounted by major customers (in hundredths) | 14.70% | 3.90% |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Software Development Costs [Abstract] | ||||
Total capitalized software development cost | $ 473,000 | $ 241,000 | $ 1,411,000 | $ 590,000 |
Capitalized software amortization | (96,000) | (78,000) | (291,000) | (173,000) |
Write-down of capitalized software development costs | (1,538,000) | 0 | (1,538,000) | 0 |
Capitalized Computer Software, Period Increase (Decrease), Total | $ (1,161,000) | $ 163,000 | $ (418,000) | $ 417,000 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Net book value at December 31, 2014 | $ 5,612 |
Goodwill impairment loss | 0 |
Foreign currency translation | 0 |
Goodwill, Period Increase (Decrease), Total | 0 |
Net book value at September 30, 2015 | $ 5,612 |
Fair Value of Financial Instr42
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets and liabilities measured at fair value [Abstract] | ||
Money market fund | $ 12,129 | $ 11,661 |
Foreign exchange contracts - Assets | 124 | 92 |
Total assets | 12,253 | 11,753 |
Foreign exchange contracts - Liabilities | 107 | 24 |
Total liabilities | 107 | 24 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets and liabilities measured at fair value [Abstract] | ||
Money market fund | 12,129 | 11,661 |
Foreign exchange contracts - Assets | 0 | 0 |
Total assets | 12,129 | 11,661 |
Foreign exchange contracts - Liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets and liabilities measured at fair value [Abstract] | ||
Money market fund | 0 | 0 |
Foreign exchange contracts - Assets | 124 | 92 |
Total assets | 124 | 92 |
Foreign exchange contracts - Liabilities | 107 | 24 |
Total liabilities | 107 | 24 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets and liabilities measured at fair value [Abstract] | ||
Money market fund | 0 | 0 |
Foreign exchange contracts - Assets | 0 | 0 |
Total assets | 0 | 0 |
Foreign exchange contracts - Liabilities | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Derivative Instruments, Foreign
Derivative Instruments, Foreign Exchange Contracts (Details) - Foreign Exchange Contract [Member] € in Millions, ¥ in Millions, £ in Millions, MYR in Millions, AUD in Millions | 9 Months Ended | |||||||
Sep. 30, 2015JPY (¥) | Sep. 30, 2015GBP (£) | Sep. 30, 2015AUD | Sep. 30, 2015EUR (€) | Dec. 31, 2014MYR | Dec. 31, 2014GBP (£) | Dec. 31, 2014AUD | Dec. 31, 2014EUR (€) | |
Derivative [Line Items] | ||||||||
Derivative, Maturity Date | Dec. 1, 2016 | |||||||
Japan, Yen | ||||||||
Derivative [Line Items] | ||||||||
Foreign exchange contract outstanding | ¥ | ¥ 12.5 | |||||||
United Kingdom, Pounds | ||||||||
Derivative [Line Items] | ||||||||
Foreign exchange contract outstanding | £ 0.6 | £ 0.3 | ||||||
Euro Member Countries, Euro | ||||||||
Derivative [Line Items] | ||||||||
Foreign exchange contract outstanding | € | € 2.6 | € 1.4 | ||||||
Australia, Dollars | ||||||||
Derivative [Line Items] | ||||||||
Foreign exchange contract outstanding | AUD | AUD 0.5 | AUD 0.8 | ||||||
Malaysia, Ringgits | ||||||||
Derivative [Line Items] | ||||||||
Foreign exchange contract outstanding | MYR | MYR 0.5 |
Derivative Instruments, Fair Va
Derivative Instruments, Fair Values Derivatives, Balance Sheet Location (Details) - Foreign Exchange Contract [Member] - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | $ 124 | $ 92 |
Liability derivatives | 107 | 24 |
Net fair value | 17 | 68 |
Other Current Assets [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | 121 | 71 |
Other Noncurrent Assets [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Asset derivatives | 3 | 21 |
Other Current Liabilities [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Liability derivatives | 15 | 23 |
Other Noncurrent Liabilities [Member] | ||
Estimated fair value of the contracts in the consolidated balance sheets [Abstract] | ||
Liability derivatives | $ 92 | $ 1 |
Derivative Instruments, Gain (L
Derivative Instruments, Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign exchange contracts- change in fair value | $ 34 | $ 58 | $ (53) | $ 312 |
Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals | (14) | 11 | (6) | (134) |
(Gain) loss on derivative instruments, net | $ 20 | $ 69 | $ (59) | $ 178 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock-Based Compensation [Abstract] | ||||
Pre-tax share based compensation expense | $ 136,000 | $ 175,000 | $ 407,000 | $ 514,000 |
Shares granted under stock options (in shares) | 10,000 | 0 | 60,000 | 60,000 |
Fair value of shares granted under stock option plan | $ 8,000 | $ 0 | $ 48,000 | $ 56,000 |
Granted Restricted Stock Units | 975,000 | 0 | 975,000 | 0 |
Aggregate Fair Value for RSUs | $ 673,500 | $ 0 | $ 673,500 | $ 0 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)Right | Dec. 31, 2014USD ($) | |
Performance Bond Abstract | ||
Number of Standby Letters of Credit | Right | 13 | |
Number of Surety Bonds | Right | 1 | |
Letter of Credit and Surety Bonds | $ 3,600 | |
Number of Performance and Bid Bonds issued in relation to contracts | Right | 12 | |
Number of stand by letters of credit deposited in escrow accounts | Right | 13 | |
Restricted cash and investments | $ 3,600 | $ 4,200 |
Susquehanna Bank [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Principal amount of the line of credit | $ 7,500 | |
Line of Credit Facility, Affiliated Borrower | GSE Systems, Inc. and GSE Performance Solutions, Inc. | |
Line of Credit Facility, Interest Rate Description | Working capital advances bear interest at a rate equal to the Wall Street Journal Prime Rate of Interest, floating with a floor of 4 1/2% | |
Line of credit facility term | 2 years | |
Expiration date of credit agreement | Jun. 30, 2016 | |
Minimum Cash Balance Requirement | $ 3,000 | |
Susquehanna Bank [Member] | Revolving Credit Facility [Member] | Minimum tangible capital base [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Covenant Terms | Must Exceed $10.5 million | |
Line of Credit Facility, Covenant Compliance | $10.9 million | |
Susquehanna Bank [Member] | Revolving Credit Facility [Member] | Quick Ratio [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Covenant Terms | Must Exceed 1.00 : 1.00 | |
Line of Credit Facility, Covenant Compliance | 1.43 : 1.00 | |
IberiaBank [Member] | Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Principal amount of the line of credit | $ 1,000 | |
Line of Credit Facility, Affiliated Borrower | Hyperspring, LLC | |
Line of Credit Facility, Interest Rate Description | interest is payable monthly at the rate of 1.00 percentage points over the prime rate of interest as published in the money rate section of the Wall Street Journal | |
Line of Credit Facility, Interest Rate During Period | 4.25% | |
Line of Credit Facility, Collateral | The line is secured by all accounts of Hyperspring and guaranteed by GSE Systems, Inc. | |
Line of credit facility term | 1 year | |
Expiration date of credit agreement | Jul. 6, 2016 | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | $ 339 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Activities in product warranty account [Abstract] | ||
Balance at December 31, 2014 | $ 1,456 | |
Warranty provision | 514 | |
Warranty claims | 312 | |
Currency adjustment | (44) | |
Standard Product Warranty Accrual, Period Increase (Decrease), Total | 158 | $ (349) |
Balance at September 30, 2015 | $ 1,614 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
Minimum probability of uncertain tax position to be recognized (in hundredths) | 50.00% |
Minimum percentage of tax position realized upon ultimate settlement (in hundredths) | 50.00% |
Preferred Stock Rights (Details
Preferred Stock Rights (Details) | 9 Months Ended | ||
Sep. 30, 2015$ / shares | Dec. 31, 2014$ / shares | Mar. 21, 2011sharesRight$ / shares | |
Preferred Stock Rights | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred Stock Rights Agreement [Member] | |||
Preferred Stock Rights | |||
Date on which dividends payable was declared by Board of Directors | Mar. 21, 2011 | ||
Number of preferred stock purchase right declared for each outstanding common stock (per right) | Right | 1 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Number of rights issued with each issuance of common stock (per right) | Right | 1 | ||
Term of stockholder protection rights agreement | 3 years | ||
Rights Agreement Amendment Date | Mar. 21, 2014 | ||
Term of the Rights Agreement extension | 2 years | ||
Rights Agreement Expiration Date | Mar. 21, 2016 | ||
Fraction of participating preferred stock that can be exercised as a result of right | shares | 0.01 | ||
Exercise price of right (in dollars per share) | $ 8 | ||
Minimum percentage of common stock owned for right to become exercisable (in hundredths) | 20.00% | ||
Redemption price per right (in dollars per share) | 0.001 | ||
Number of common stock exchange for rights (in shares) | shares | 1 | ||
Percentage of common stock acquired to cause substantial dilution (in hundredths) | 20.00% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Segment | Sep. 30, 2014USD ($) | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||||
Number of reportable business segments | Segment | 2 | |||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Revenues | $ 14,961 | $ 7,823 | $ 42,589 | $ 24,823 |
Operating income (loss) | (3,388) | (1,947) | (5,128) | (6,017) |
Gain on change in fair value of contingent consideration, net | 226 | 42 | 739 | 69 |
Interest income, net | 19 | 44 | 67 | 103 |
(Gain) loss on derivative instruments, net | 20 | 69 | (59) | 178 |
Other expense, net | (156) | 0 | (235) | (7) |
Loss before income taxes | (3,505) | (1,834) | $ (5,355) | (5,743) |
Performance Improvement Solutions [Member] | ||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | ||||
Contract range, minimum | 10 months | |||
Contract range, maximum | 3 years | |||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Revenues | 9,903 | 7,823 | $ 26,911 | 24,823 |
Operating income (loss) | (3,604) | (1,905) | (5,493) | (5,948) |
Nuclear Industry Training and Consulting [Member] | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Revenues | 5,058 | 0 | 15,678 | 0 |
Operating income (loss) | $ 442 | $ 0 | $ 1,104 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Subsequent Event [Line Items] | ||
Earnout Payment | $ 500 | $ 500 |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Subsequent Event, Date | Oct. 6, 2015 | |
Subsequent Event, Description | Per the Hyperspring LLC Purchase Agreement, a $1.2 million payment was due to the former Hyperspring members if Hyperspring were successful in renewing its contract with the Tennessee Valley Authority ("TVA") for at least a two year period for substantially the same scope as was being provided at the acquisition date and with substantially the same economics. On September 24, 2015, TVA executed a three-year renewal contract with Hyperspring; accordingly, the Company paid the $1.2 million payment to the former Hyperspring members in October 2015. | |
Earnout Payment | $ 1,200 |