GSE Systems, Inc., a NYSE American company trading under the symbol GVP, is
a world leader in real-time high-fidelity simulation and provides a wide range
of simulation, consulting, training, and engineering solutions to the global
power and process industries. We provide customers with simulation, engineering
and plant services that help clients reduce risks associated with operating
their plants, increase revenue through improved plant and employee performance,
and lower costs through improved operational efficiency. In addition, we provide
professional services that systematically help clients fill key vacancies in
the organization on a short-term basis, primarily in procedures, engineering,
technical support, and training focused on regulatory compliance and certification
in the nuclear power industry. Our operations also include interactive computer-based
tutorials and simulation software for the refining, chemical, and petrochemical
industries, through our wholly-owned subsidiary GSE Performance Solutions, Inc.
We execute projects globally with approximately 388 employees operating from
offices in the U.S. and China and at client sites. While the majority of revenue
comes from the nuclear power market, we also serve the fossil, refining, chemical,
and petrochemical markets.
GSE Systems was formed on March 30, 1994 to consolidate the simulation and related
businesses of General Physics International Engineering & Simulation, S3
Technologies, and EuroSim. The Company completed its Initial Public Offering
in 1995.
On November 14, 2014, we acquired Hyperspring, LLC. Hyperspring is a nuclear
industry training and consulting firm that primarily provides highly skilled,
high-value professionals to fill training and consulting positions on a contract
basis for nuclear power plant operators. Hyperspring professionals provide training,
operations and maintenance support including: generic fundamentals exams (GFES),
accreditation training visit (ATV) preparation, senior reactor operator (SRO)
certification, procedure development, work management, tagging/labeling, outage
execution, planning/scheduling, corrective action, self-assessments and equipment
reliability. Customers include TVA, Entergy, Southern Company, PSEG Nuclear
LLC and NRG Energy Inc.
On September 20, 2017, we acquired Absolute Consulting, Inc. (Absolute). Absolute
is a provider of technical consulting and staffing solutions to the global nuclear
power industry and employs approximately 160 professionals with expertise in
procedures writing, engineering, technical support, project management, training,
project controls, and corrective actions. This acquisition brings a natural
adjacency to GSE, fits well with our growth strategy, and benefits our customers
from expanded capabilities and offerings.
We believe a critical ongoing challenge facing the industries we serve is access
to, and continued development of, a highly trained and efficient workforce.
This challenge manifests primarily in two ways: the increasing pace at which
industry knowledge and experience are lost as a significant percentage of the
existing experienced workforce reaches retirement age; and the fact that as
new power plants come on-line, there is an increased demand for more workers
to staff and operate those plants.
In the United States, the energy industry is expected to lose a large percentage
of its workforce within the next few years as baby boomers retire on the traditional
schedule. For example, Power Engineering reports the power sector will need
more than 100,000 skilled workers by the end of 2018 to replace retiring baby
boomers. Electric, Light, and Power reports 72% of energy employers currently
struggle to find quality candidates, and fill open positions. The National Electrical
Contractors Association reports 7,000 electricians join the field each year,
while 10,000 retire. Finally, the Nuclear Energy Institute estimates that 39%
of the nuclear workforce will be eligible to retire in 2018. As the nuclear
industry expands its fleet and strains to maintain the high standards of training
the existing workforce, existing plant simulator systems, which provide a critical
environment for training services, are often operating 24 hours a day. With
workers retiring and the need to backfill as well as expand the workforce for
new units, certain operators are exploring the opportunity to de-bottleneck
their existing simulator capabilities through the creation of dual reference
simulators. Other workforce shortages and/or short term spike in demand for
specialist skills that we offer similarly are positive development for our business.
According to the US Energy & Employment Report released in January 2017,
the employment in the traditional energy and energy efficiency sectors increased
by 55% in 2016, adding 300,000 net new jobs. The Nuclear Energy Institute projects
20,000 new position will be needed in the nuclear industry over the next 5 years.
Globally, as more people increase their standard of living, their demand for
power will increase, which in turn will require the on-going construction of
power plants to meet this surging demand. Developing a skilled labor force to
operate these plants and keeping their skills current and their certifications
in compliance with regulatory requirements is a key challenge facing the global
power industry.
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