1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 24, 1998
GSE SYSTEMS, INC.
(Exact name of issuer as specified in charter)
Delaware 0-26494 52-1868008
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
9189 Red Branch Road
Columbia, Maryland 21045
(Address of principal executive offices)
(410) 772-3500
(Registrant's telephone number, including area code)
<PAGE>
4
Item 5. Other Events
On September 21, 1998, Valmet Automation, Inc. ("Valmet") and GSE Systems,
Inc. (the "Company") issued a press release in respect of entering into a letter
of intent for the sale of the Company's Oil and Gas Business Unit to Valmet, the
text of which is set forth in Exhibit 99.1 hereto (the "Press Release") and
incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Text of Press Release, dated September 21, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 24, 1998 GSE SYSTEMS, INC.
/S/ Christopher M. Carnavos
Christopher M. Carnavos
President
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C> <C> <C> <C> <C> <C>
Exhibit No. Description Sequential Page No.
99.1 Text of Press Release, dated 5 September 21, 1998,
issued by the Company.
</TABLE>
<PAGE>
Exhibit 99.1
For Immediate Release
6
<PAGE>
VALMET SIGNS LETTER OF INTENT TO ACQUIRE GSE OIL & GAS BUSINESS UNIT
Proposed Acquisition Would Expand Valmet's Capabilities in Oil & Gas Market
Columbia, Maryland, September 21, 1998 - Valmet Automation (USA), Inc. and
GSE Systems, Inc. (Nasdaq National Market: GSES), today announced the signing of
a letter of intent for Valmet to purchase substantially all of the assets of
GSE's Columbia-based Oil & Gas Business Unit, including the S/3 SCADA software
product. The proposed acquisition is subject to the execution of a definitive
purchase agreement, which is anticipated to be completed in October. Terms of
the agreement were not disclosed. The addition of GSE's business would increase
Valmet's presence on the East Coast, as well as provide additional capability to
offer integrated SCADA and advanced applications to the Oil & Gas pipeline
industry. The proposed acquisition would also allow Valmet to offer its full
range of supervisory control and information systems, applications and
consulting services to an increased client base. "Acquiring GSE's Oil & Gas
Business Unit is consistent with Valmet's commitment to provide high performing
people and leading products to the markets it serves," said Dave Jardine, Chief
Executive, SAGE Systems Division of Valmet Automation. "GSE's strengths in SCADA
and advanced applications perfectly complement Valmet's industry-leading
solutions." "We believe that this proposed transaction follows our previously
announced initiative to refocus our company back to building a strong core
business of controls and simulation," said Chris Carnavos, President of GSE
Systems. "Our Process and Power Business Units remain strong performers while
our Oil & Gas Business Unit, with excellent technology and people, will be more
effective with the market leader such as Valmet." GSE expects to record a charge
against earnings in connection with the sale during the third quarter of 1998.
GSE Systems, Inc. develops and delivers business and technology solutions by
applying process control, data acquisition and simulation software, systems and
services to the energy, process and manufacturing industries worldwide. The
company's products are used in over 700 applications, representing over 250
customers in 30 countries in the following industries: specialty chemical, food
and beverage, petroleum refining, oil and gas, pharmaceutical, fossil and
nuclear power generation, metals and water treatment. GSE Systems is
headquartered in Columbia, Maryland with offices in Georgia, Louisiana, Texas,
Arizona, Pennsylvania, North and South Carolina, and its global locations
include offices in Belgium, Japan, Korea, Singapore, Sweden and Taiwan.
Information about GSE Systems is available via the Internet's World Wide Web at
http: www.gses.com. With major centers in Calgary, Canada and Houston, Texas and
regional offices in Pennsylvania and California, Valmet Automation's SAGE
Systems Division delivers supervisory control and information management systems
and real time IT services and solutions to the oil and gas pipeline, water,
waste water and electric utility industries worldwide. The company's spearhead
product OASyS, has vaulted Valmet's installed base to more than 500 customers in
over 35 countries. Global offices in Bordeaux, St. Petersburg, Helsinki, Beijing
and Hong Kong support an increasing international customer base. Information
about Valmet Automation, SAGE Systems Division can be found at
www.valmet-oasys.com. This press release contains forward-looking statements
that involve a number of risks and uncertainties, including statements regarding
the expected consummation of a transaction involving substantially all of the
assets of GSE's Oil & Gas Business Unit and the future benefits Valmet
Automation and GSE Systems expect to derive as a result of such transaction.
There are a number of factors that could cause actual results to differ
materially from those indicated. Such factors include, without limitation, the
possibility that Valmet and GSE may be unable to agree on terms for a definitive
agreement, that such terms may be different than those currently anticipated,
the satisfaction of various customary closing conditions, and Valmet's success
in integrating GSE's Oil & Gas Business Unit into its own operations.
<PAGE>
Exhibit 99.1
For further information about GSE Systems and the factors affecting its
results, refer to the Company's annual report on Form 10-K for the year ended
December 31, 1997 and other reports as filed with the Securities and Exchange
Commission.
