Gse Systems (GVP) 10-Q 15 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	6 Months Ended
	Jun. 30, 2016	Aug. 12, 2016
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	$ 39,883,030
Entity Common Stock, Shares Outstanding		18,131,817
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 10,903	$ 11,084
Restricted cash	1,658	1,771
Contract receivables, net	14,538	13,053
Prepaid expenses and other current assets	3,009	2,506
Total current assets	30,108	28,414
Equipment, software and leasehold improvements	6,912	7,003
Accumulated depreciation	5,529	5,407
Equipment, software and leasehold improvements, net	1,383	1,596
Software development costs, net	1,147	1,145
Goodwill	5,612	5,612
Intangible assets, net	611	775
Long-term restricted cash	1,735	1,779
Other assets	88	50
Total assets	40,684	39,371
Current liabilities:
Accounts payable	1,654	1,238
Accrued expenses	1,576	1,723
Accrued compensation	2,720	2,431
Billings in excess of revenue earned	10,093	9,229
Accrued warranty	1,418	1,614
Current contingent consideration	1,297	2,647
Other current liabilities	681	826
Total current liabilities	19,439	19,708
Contingent consideration	1,169	1,085
Other liabilities	776	210
Total liabilities	21,384	21,003
Stockholder's equity:
Preferred stock $.01 par value, 2,000,000 shares authorized, shares issued and outstanding none in 2016 and 2015	0	0
Common stock $.01 par value, 30,000,000 shares authorized, 19,694,530 shares issued and 18,095,619 shares outstanding in 2016, 19,510,770 shares issued and 17,911,859 shares outstanding in 2015	197	195
Additional paid-in capital	74,264	73,481
Accumulated deficit	(50,600)	(50,849)
Accumulated other comprehensive loss	(1,562)	(1,460)
Treasury stock at cost, 1,598,911 shares in 2016 and 2015	2,999	2,999
Total stockholders' equity	19,300	18,368
Total liabilities and stockholders' equity	$ 40,684	$ 39,371

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Jun. 30, 2015
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)	19,694,530	19,510,770
Treasury stock, shares acquired (in shares)	1,598,911	1,598,911
Common Stock, Shares, Outstanding	18,095,619	17,911,859

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements of Operations (Unaudited)
Contract revenue	$ 12,415	$ 13,654	$ 25,391	$ 27,667
Cost of revenue	8,855	10,767	18,207	21,486
Gross profit	3,560	2,887	7,184	6,181
Operating expenses:
Selling, general and administrative	2,881	3,951	5,992	7,220
Restructuring charges	277	48	402	145
Depreciation	102	135	202	264
Amortization of definite-lived intangible assets	73	124	146	247
Total operating expenses	3,333	4,258	6,742	7,876
Operating income (loss)	227	(1,371)	442	(1,695)
Interest income, net	13	21	40	48
Loss on derivative instruments, net	(17)	(31)	(135)	(79)
Other (expense) income, net	(4)	(41)	98	(80)
Income (loss) before income taxes	219	(1,422)	445	(1,806)
Provision for income taxes	108	73	196	161
Net income (loss)	$ 111	$ (1,495)	$ 249	$ (1,967)
Basic earnings (loss) per common share	$ 0.01	$ (0.08)	$ 0.01	$ (0.11)
Diluted earnings (loss) per common share	$ 0.01	$ (0.08)	$ 0.01	$ (0.11)

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ 111	$ (1,495)	$ 249	$ (1,967)
Foreign currency translation adjustment	(151)	106	(102)	(130)
Comprehensive income (loss)	$ (40)	$ (1,389)	$ 147	$ (2,097)

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Treasury Stock	Total
Balance at Dec. 31, 2015	$ 195	$ 73,481	$ (50,849)	$ (1,460)	$ (2,999)	$ 18,368
Balance (in shares) at Dec. 31, 2015	19,510,770				(1,598,911)
Stock-based compensation expense		488				488
Common stock issued for services provided (in shares)	0
Common stock issued for options exercised (in shares)	162,921
Common stock issued for RSUs vested (in shares)	20,839
Common stock issued for options exercised	$ 2	295				297
Common stock issued for services provided		0				0
Common stock issued for RSUs vested		0				0
Foreign currency translation adjustment, net of tax				(102)		(102)
Net income (loss)			249			249
Balance at Jun. 30, 2016	$ 197	$ 74,264	$ (50,600)	$ (1,562)	$ (2,999)	$ 19,300
Balance (in shares) at Jun. 30, 2016	19,694,530				(1,598,911)	18,095,619

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income (loss)	$ 249	$ (1,967)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	202	264
Amortization of definite-lived intangible assets	146	247
Capitalized software amortization	(185)	(195)
Gain on change in fair value of contingent consideration, net	155	433
Stock-based compensation expense	488	271
Equity loss on investments	0	(78)
Loss on derivative instruments, net	(135)	(79)
Deferred income taxes	72	0
Gain on sales of equipment, software, and leasehold improvements	(1)	0
Changes in assets and liabilities:
Contract receivables, net	1,547	76
Prepaid expenses and other assets	650	411
Accounts payable, accrued compensation and accrued expenses	652	(392)
Billings in excess of revenue earned	877	(541)
Accrued warranty reserves	(34)	117
Other liabilities	117	103
Net cash provided by (used in) operating activities	1,046	(1,600)
Cash flows from investing activities:
Proceeds from sale of equipment, software, and leasehold improvements	31	0
Capital expenditures	35	195
Capitalized Software Development Costs	186	938
Restrictions of cash as collateral under letters of credit	4	1,156
Releases of cash as collateral under letters of credit	185	837
Net cash used in investing activities	(9)	(1,452)
Cash flows from financing activities:
Payments on line of credit	0	(339)
Proceeds from issuance of common stock	297	0
Payments of the liability-classified contingent consideration arrangements	1,421	318
Net cash used in financing activities	(1,124)	(657)
Effect of exchange rate changes on cash	(94)	(119)
Net increase (decrease) in cash and cash equivalents	(181)	(3,828)
Cash and cash equivalents at beginning of year	11,084	13,583
Cash and cash equivalents at end of period	$ 10,903	$ 9,755

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation and Revenue Recognition	1. Summary of Significant Accounting Policies Basis of Presentation The consolidated interim financial statements included herein have been prepared by GSE Systems, Inc. (the "Company," "GSE," "we," "us," or "our") 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, 2015 filed with the Securities and Exchange Commission on March 25, 2016. 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 (approximately 68% of revenue) The Company's Performance Improvement Solutions segment primarily encompasses next generation power plant and process high-fidelity simulation solutions, as well as engineering solutions. This segment includes various simulation products, engineering services, and operation training systems delivered across the industries the Company serves: primarily nuclear and fossil fuel power generation, and the process industries. Simulation solutions include the following: (1) simulation software and services, including operator training systems, for the nuclear power industry, (2) simulation software and services, including operator training systems, for the fossil power industry, and (3) simulation software and services for the process industries used to teach fundamental industry processes and control systems to newly hired employees and for ongoing workforce development and training. · Nuclear Industry Training and Consulting (approximately 32% of revenue) Nuclear Industry Training and Consulting provides highly specialized and skilled nuclear operations instructors and other consultants to the nuclear power industry. These employees work at clients' facilities under client direction. Examples of these highly skilled positions are senior reactor operations instructors, procedure writers, work management specialists, planners, and training material developers. This business is managed through the Company's Hyperspring subsidiary. The business model, management focus, margins, and other factors clearly separate this business line from the rest of the GSE product and service portfolio. Hyperspring has been providing these services since 2005. Financial information about the two business segments is provided in Note 14 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 The Company has (1) fixed price contracts for the sale of uniquely designed/customized systems containing hardware and software, (2) fixed price contracts for the sale of software licenses which may include post-contract support ("PCS") and other elements such as installation and training, and (3) time and material contracts for support and service agreements. In accordance with Accounting Standards Codification ("ASC") 605-35 , "Construction-Type and Production-Type Contracts", 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 customized software embedded in the systems. The Company evaluates customized system contracts for multiple deliverables under ASC 605-25, "Revenue Recognition-Multiple Element Arrangements" The Company also provides stand-alone PCS contracts. 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 without other elements in the contract and 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. The Company utilizes written contracts as a means to establish the terms and conditions by which products support and services are sold to customers. Delivery is considered to have occurred when title and risk of loss have been transferred to the customer, which generally occurs after a license key has been delivered electronically to the customer. The Company also recognizes revenue from the sale of software licenses with multiple deliverables. These software license sales are evaluated under ASC 985-605, " Software Revenue Recognition" The Company recognizes revenue under time and materials contracts primarily from the Nuclear Industry Training and Consulting segment and certain cost-reimbursable contracts. Revenue on time and material 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. Any unbilled amounts are typically billed the following month. Under cost-reimbursable contracts, which are subject to a contract ceiling amount, the Company is reimbursed for allowable costs and paid a fee, which may be fixed or performance based. However, if costs exceed the contract ceiling or are not allowable under the provisions of the contract or applicable regulations, the Company may not be able to obtain reimbursement for all such costs. Revisions Historically, the Company recognized revenue on multiple element arrangements which included sales of its EnVision software product as delivery occurred on each element except PCS. PCS revenue was recognized ratably over the PCS term. During the fourth quarter of 2015, management determined that the Company had not established VSOE of the fair value for any of the elements in multiple element transactions including sales of its EnVision software licenses. Accordingly, the consolidated financial statements were revised to recognize all revenue on multiple element transactions including EnVision software license sales ratably over the PCS terms on these transactions since VSOE did not exist for any of the non-software elements in these multiple element transactions. The revision resulted in an increase to revenue of $22,000, an increase to cost of revenue of $50,000, and an increase in operating loss of $28,000 for the three months ended June 30, 2015. The revision resulted in an increase to revenue of $39,000, a decrease to cost of revenue of $5,000, and a decrease in operating loss of $44,000 for the six months ended June 30, 2015. Certain prior year amounts have also been revised in the consolidated statements of cash flows to reflect the corrections to net loss and changes in billings in excess of revenue earned, prepaid expenses and other assets. The revision had no impact on cash provided by operations or the net decrease in cash and cash equivalents. The Company assessed the materiality of these misstatements on prior periods' consolidated financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality Accounting Changes and Error Corrections "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" GSE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three months ended June 30, 2015 Six months ended June 30, 2015 As Reported Adjustment As Revised As Reported Adjustment As Revised Revenue $ 13,632 $ 22 $ 13,654 $ 27,628 $ 39 $ 27,667 Cost of revenue 10,717 50 10,767 21,491 (5 ) 21,486 Gross profit 2,915 (28 ) 2,887 6,137 44 6,181 Operating (loss) income (1,343 ) (28 ) (1,371 ) (1,739 ) 44 (1,695 ) (Loss) income before income taxes (1,394 ) (28 ) (1,422 ) (1,850 ) 44 (1,806 ) Net loss $ (1,467 ) $ (28 ) $ (1,495 ) $ (2,011 ) $ 44 $ (1,967 ) Basic loss per common share $ (0.08 ) $ - $ (0.08 ) $ (0.11 ) $ - $ (0.11 ) Diluted loss per common share $ (0.08 ) $ - $ (0.08 ) $ (0.11 ) $ - $ (0.11 ) GSE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Three months ended June 30, 2015 Six months ended June 30, 2015 As Reported Adjustment As Revised As Reported Adjustment As Revised Net loss $ (1,467 ) $ (28 ) $ (1,495 ) $ (2,011 ) $ 44 $ (1,967 ) Comprehensive loss $ (1,361 ) $ (28 ) $ (1,389 ) $ (2,141 ) $ 44 $ (2,097 ) GSE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Six months ended June 30, 2015 As Reported Adjustment As Revised Cash flows from operating activities: Net (loss) income $ (2,011 ) $ 44 $ (1,967 ) Changes in assets and liabilities: Contract receivables, net (138 ) 62 (76 ) Prepaid expenses and other assets (406 ) (5 ) (411 ) Billings in excess of revenue earned (440 ) (101 ) (541 ) Net cash provided by operating activities $ (1,600 ) $ - $ (1,600 ) Net decrease in cash and cash equivalents $ (3,828 ) $ - $ (3,828 )

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2016
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements Not Yet Adopted [Text Block]	2. Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-17, " Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes". Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, " Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation: Topic 718: Improvements to Employee Share Based Accounting"

Basic and Diluted Earnings (Los

Basic and Diluted Earnings (Loss) Per Common Share	6 Months Ended
	Jun. 30, 2016
Basic and Diluted Earnings (Loss) Per Common Share [Abstract]
Basic and Diluted Loss Per Common Share	3. Basic and Diluted Earnings (Loss) per Common Share Basic earnings (loss) per share is based on the weighted average number of outstanding common shares for the period. Diluted earnings (loss) per share adjusts the weighted average shares outstanding for the potential dilution that could occur if stock options or other common stock equivalents were exercised into common stock. The number of common shares and common share equivalents used in the determination of basic and diluted earnings (loss) per share were as follows: (in thousands, except for share amounts) Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Numerator: Net income (loss) $ 111 $ (1,495 ) $ 249 $ (1,967 ) Denominator: Weighted-average shares outstanding for basic earnings per share 18,010,949 17,887,859 17,956,622 17,887,859 Effect of dilutive securities: Employee stock options 251,464 - 237,417 - Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 18,262,413 17,887,859 18,194,039 17,887,859 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 738,789 2,513,321 745,415 2,580,942

Contingent Consideration

Contingent Consideration	6 Months Ended
	Jun. 30, 2016
Contingent Consideration [Abstract]
Contingencies Disclosure [Text Block]	4. Contingent Consideration ASC 805, " Business Combinations", As of June 30, 2016, and December 31, 2015, contingent consideration included in other current liabilities on the consolidated balance sheet totaled $1.3 million and $2.6 million, respectively. As of June 30, 2016, and December 31, 2015, the Company also had accrued contingent consideration totaling $1.2 million and $1.1 million, respectively, which is included in other liabilities on the consolidated balance sheet and represents the portion of contingent consideration estimated to be payable greater than twelve months from the balance sheet date. During the three and six months ended June 30, 2016, the Company made no payments and a payment of $1.4 million, respectively, related to the liability-classified contingent consideration arrangements. During the three and six months ended June 30, 2015, the Company made no payments and a payment of $318,000, respectively, related to the liability-classified contingent consideration arrangements.

Contract Receivables

Contract Receivables	6 Months Ended
	Jun. 30, 2016
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. Unbilled receivables 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) June 30, December 31, 2016 2015 Billed receivables $ 9,878 $ 9,831 Unbilled receivables 4,681 3,325 Allowance for doubtful accounts (21 ) (103 ) Total contract receivables, net $ 14,538 $ 13,053 Unbilled receivables totaled $4.7 million and $3.3 million as of June 30, 2016, and December 31, 2015, respectively. During July 2016, the Company invoiced $1.5 million of the unbilled amounts related to June 30, 2016. As of both June 30, 2016, and December 31, 2015, the Company did not have any customers that accounted for more than 10% of the Company's consolidated contract receivables.

Software Development Costs

Software Development Costs	6 Months Ended
	Jun. 30, 2016
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. Software development costs capitalized were $55,000 and $186,000 for the three and six months ended June 30, 2016, respectively, and $432,000 and $938,000 for the three and six months ended June 30, 2015, respectively. Total amortization expense was $104,000 and $185,000 for the three and six months ended June 30, 2016, respectively, and $105,000 and $195,000 for the three and six months ended June 30, 2015, respectively.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets [Abstract]
Goodwill and Intangible Assets	7. Goodwill and Intangible Assets Goodwill The Company reviews goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company tests 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. GAAP. The Company's reporting units are: (i) Performance Improvement Solutions and (ii) Nuclear Industry Training and Consulting. As of June 30, 2016, and December 31, 2015, the $5.6 million of goodwill balance originated from the Hyperspring acquisition in 2014 and is assigned to the Nuclear Industry Training and Consulting segment. No events or circumstances occurred during the current reporting period that would indicate impairment of goodwill. Intangible Assets Subject to Amortization The Company's intangible assets include amounts recognized in connection with business acquisitions, including contractual 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 intangible assets 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	6 Months Ended
	Jun. 30, 2016
Fair Value of Financial Instruments [Abstract]
Fair Value of Financial Instruments	8. Fair Value of Financial Instruments ASC 820, " Fair Value Measurement" 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 June 30, 2016, and December 31, 2015, based upon the short-term nature of the assets and liabilities. The following table presents assets and liabilities measured at fair value at June 30, 2016: 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 $ 9,626 $ - $ - $ 9,626 Foreign exchange contracts - 23 - 23 Total assets $ 9,626 $ 23 $ - $ 9,649 Foreign exchange contracts $ - $ (136 ) $ - $ (136 ) Contingent consideration liability - - (2,466 ) (2,466 ) Total liabilities $ - $ (136 ) $ (2,466 ) $ (2,602 ) The following table presents assets and liabilities measured at fair value at December 31, 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 $ 8,979 $ - $ - $ 8,979 Foreign exchange contracts - 121 - 121 Total assets $ 8,979 $ 121 $ - $ 9,100 Foreign exchange contracts $ - $ (57 ) $ - $ (57 ) Contingent consideration liability - - (3,732 ) (3,732 ) Total liabilities $ - $ (57 ) $ (3,732 ) $ (3,789 ) The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the six months ended June 30, 2016: (in thousands) Contingent consideration: Beginning balance at December 31, 2015 $ 3,732 Payments made on contingent liabilities (1,421 ) Change in fair value 155 Ending balance $ 2,466

Derivative Instruments

Derivative Instruments	6 Months Ended
	Jun. 30, 2016
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 June 30, 2016, the Company had foreign exchange contracts outstanding of approximately 24.4 million Japanese Yen, 1.6 million Euro, 0.9 million Australian Dollars, 0.5 million Canadian Dollars, and 0.2 million Pounds Sterling at fixed rates. The contracts expire on various dates through June 2017. At December 31, 2015, the Company had contracts outstanding of approximately 2.1 million Euro, 1.3 million Canadian Dollars, 0.5 million Pounds Sterling, and 0.4 million Australian Dollars 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: June 30, December 31, (in thousands) 2016 2015 Asset derivatives Prepaid expenses and other current assets $ 23 $ 115 Other assets - 6 23 121 Liability derivatives Other current liabilities (136 ) (57 ) (136 ) (57 ) Net fair value $ (113 ) $ 64 The changes in the fair value of the foreign exchange contracts are included in loss on derivative instruments, net 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 loss on derivative instruments, net in the consolidated statements of operations. For the three and six months ended June 30, 2016 and June 30, 2015, the Company recognized a net gain (loss) on its derivative instruments as outlined below: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Foreign exchange contracts-change in fair value $ 6 $ (86 ) $ (177 ) $ (86 ) Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals (23 ) 55 42 7 Loss on derivative instruments, net $ (17 ) $ (31 ) $ (135 ) $ (79 )

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2016
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 $241,000 and $137,000 of stock-based compensation expense for the three months ended June 30, 2016 and June 30, 2015, respectively, under the fair value method and recognized $488,000 and $271,000 of stock-based compensation expense for the six months ended June 30, 2016 and June 30, 2015, respectively. In the six months ended June 30, 2016, the Company granted 160,000 performance-based restricted stock units ("RSUs") with an aggregate fair value of $282,000. There were no new performance based RSU grants in the three months ended June 30, 2016. 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. In the three and six months ended June 30, 2016, the Company granted 5,000 and 134,824 time-based RSUs with an aggregate fair value of $13,350 and $299,350, respectively. The RSUs will vest quarterly over the next twelve quarters. The fair value of the RSUs is expensed ratably over the requisite service period, which ranges between one and five years. The Company granted no new options and 40,000 stock options for the three and six months ended June 30, 2016, respectively. The fair value of the options granted for the six months ended June 30, 2016, was $46,000. The Company granted no new options and 50,000 stock options for the three and six months ended June 30, 2015, respectively. The fair value of the granted options at the grant date was $40,000.

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2016
Long-Term Debt [Abstract]
Long-Term Debt	11. Long-Term Debt At June 30, 2016, and December 31, 2015, the Company had no long-term debt. Lines of Credit BB&T Bank At June 30, 2016, the Company had a Master Loan and Security Agreement (the "Loan Agreement") and Revolving Credit Note with BB&T Bank. 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 4.5%. The agreement would have expired on June 30, 2016, but on June 17, 2016, the Company and BB&T Bank amended the Loan Agreement to extend the expiration date until September 30, 2016. All other terms and conditions remained the same. 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, contract receivables, intangible assets, equipment, software and leasehold improvements. The Company is to maintain a segregated cash collateral account at BB&T 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, BB&T Bank has complete and unconditional control over the cash collateral account. At June 30, 2016, and December 31, 2015, the cash collateral account totaled $3.4 million and $3.5 million, respectively. The balances were classified as restricted cash on the consolidated balance sheets. The Loan Agreement contains certain restrictive covenants regarding future acquisitions and incurrence of debt. In addition, the Loan Agreement contains financial covenants with respect to the Company's minimum tangible capital base and quick ratio. As of Covenant June 30, 2016 Minimum tangible capital base Must exceed $10.5 million $11.9 million Quick ratio Must exceed 1.00 : 1.00 1.55 : 1.00 As of June 30, 2016, the Company was in compliance with its financial covenants as defined above. IberiaBank At June 30, 2016, Hyperspring, LLC has a $1.0 million working capital line of credit with IberiaBank. Under the this line of credit, interest is payable monthly at the rate of 1.00 percentage point 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 expired on July 6, 2016, and the Company is in the process of extending the line. At June 30, 2016, the Company had no outstanding amounts under the line of credit. Letters of Credit and Bonds As of June 30, 2016, the Company has nine standby letters of credit totaling $3.4 million which represent advance payment and performance bonds on eight contracts. The Company has deposited the full value of nine standby letters of credit in escrow accounts, amounting to $3.4 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 consolidated balance sheets at June 30, 2016, as restricted cash, $1.7 million categorized as current restricted cash and $1.7 million categorized as long-term restricted cash.

Product Warranty

Product Warranty	6 Months Ended
	Jun. 30, 2016
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 portion of the warranty provision expected to be incurred within 12 months is classified as current within accrued warranty ($1.4 million), while the remaining amount is classified as long-term within other liabilities ($158,000). The activity related to the warranty accrual is as follows: (in thousands) Balance at December 31, 2015 $ 1,614 Warranty provision 286 Warranty claims (321 ) Currency adjustment (3 ) Balance at June 30, 2016 $ 1,576

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Taxes [Abstract]
Income Taxes	13. Income Taxes The Company's income tax expense amounts for the six months ended June 30, 2016, and June 30, 2015, differed from the expected income tax amounts computed by applying the federal corporate income tax rate of 35% to income before income taxes for the periods as shown in the table below. (in thousands) Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Provision for income taxes $ 108 $ 73 $ 196 $ 161 Effective tax rate 49.3 % (5.1 )% 44.0 % (8.9 )% The Company's increase in effective tax rate for 2016 as compared to 2015 resulted mainly from a reduction in pre-tax loss in the U.S. The Company's income tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. Tax expense in both years is comprised mainly of foreign income tax expense, Alternative Minimum Tax, state taxes, and deferred tax expense relating to the tax amortization of goodwill. Because of its net operating loss carryforwards, the Company is subject to U.S. federal and state income tax examinations from the year 1997 forward. The Company is subject to foreign tax examinations by tax authorities for years 2010 forward for Sweden, 2012 forward for China, and 2014 forward for both India and the UK. An uncertain tax position taken or expected to be taken in a tax return is recognized in the consolidated financial statements when it is more likely than not ( i.e. The Company recognizes deferred tax assets to the extent that it is believed that these assets are more likely than not to be realized. The Company has evaluated all positive and negative evidence and determined that it will continue to assess a full valuation allowance on its U.S., Swedish, and Chinese net deferred assets as of June 30, 2016. The Company has determined that it is more likely than not that it will realize the benefits of its deferred taxes in the UK and India. In 2015, the Company paid income taxes in the UK and India and expects to do so again in 2016.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2016
Segment Information [Abstract]
Segment Information	14. Segment Information The Company has two reportable business segments. The Performance Improvement Solutions business segment provides simulation, training products, and engineering products and services delivered across the breadth of industries the Company serves. Solutions include simulation for both training and engineering applications. Engineering services include plant design verification and validation. The Company provides these services across all of its market segments. Contracts typically range from six months to three years. The Nuclear Industry Training and Consulting business segment provides specialized workforce solutions primarily to the U.S. nuclear industry, working at client facilities. This business is managed through the Company's Hyperspring 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 income (loss) before income tax expense: (in thousands) Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Revenue: Performance Improvement Solutions $ 8,323 $ 8,213 $ 17,166 $ 17,046 Nuclear Industry Training and Consulting 4,092 5,441 8,225 10,621 $ 12,415 $ 13,654 $ 25,391 $ 27,667 Operating income (loss): Performance Improvement Solutions $ (432 ) $ (1,220 ) $ (474 ) $ (1,924 ) Nuclear Industry Training and Consulting 883 362 1,071 662 Gain on change in fair value of contingent consideration, net (224 ) (513 ) (155 ) (433 ) Operating income (loss) $ 227 $ (1,371 ) $ 442 $ (1,695 ) Interest income, net 13 21 40 48 Loss on derivative instruments, net (17 ) (31 ) (135 ) (79 ) Other (expense) income, net (4 ) (41 ) 98 (80 ) Income (loss) before income taxes $ 219 $ (1,422 ) $ 445 $ (1,806 )

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies Disclosure [Text Block]	15. Commitments and Contingencies The Company has contingent liabilities that, in management's judgment, are not probable of assertion. If such unasserted contingent liabilities were to be asserted, or become probable of assertion, the Company may be required to record significant expenses and liabilities in the period in which these liabilities are asserted or become probable of assertion.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The consolidated interim financial statements included herein have been prepared by GSE Systems, Inc. (the "Company," "GSE," "we," "us," or "our") 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, 2015 filed with the Securities and Exchange Commission on March 25, 2016. 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 (approximately 68% of revenue) The Company's Performance Improvement Solutions segment primarily encompasses next generation power plant and process high-fidelity simulation solutions, as well as engineering solutions. This segment includes various simulation products, engineering services, and operation training systems delivered across the industries the Company serves: primarily nuclear and fossil fuel power generation, and the process industries. Simulation solutions include the following: (1) simulation software and services, including operator training systems, for the nuclear power industry, (2) simulation software and services, including operator training systems, for the fossil power industry, and (3) simulation software and services for the process industries used to teach fundamental industry processes and control systems to newly hired employees and for ongoing workforce development and training. · Nuclear Industry Training and Consulting (approximately 32% of revenue) Nuclear Industry Training and Consulting provides highly specialized and skilled nuclear operations instructors and other consultants to the nuclear power industry. These employees work at clients' facilities under client direction. Examples of these highly skilled positions are senior reactor operations instructors, procedure writers, work management specialists, planners, and training material developers. This business is managed through the Company's Hyperspring subsidiary. The business model, management focus, margins, and other factors clearly separate this business line from the rest of the GSE product and service portfolio. Hyperspring has been providing these services since 2005. Financial information about the two business segments is provided in Note 14 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 The Company has (1) fixed price contracts for the sale of uniquely designed/customized systems containing hardware and software, (2) fixed price contracts for the sale of software licenses which may include post-contract support ("PCS") and other elements such as installation and training, and (3) time and material contracts for support and service agreements. In accordance with Accounting Standards Codification ("ASC") 605-35 , "Construction-Type and Production-Type Contracts", 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 customized software embedded in the systems. The Company evaluates customized system contracts for multiple deliverables under ASC 605-25, "Revenue Recognition-Multiple Element Arrangements" The Company also provides stand-alone PCS contracts. 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 without other elements in the contract and 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. The Company utilizes written contracts as a means to establish the terms and conditions by which products support and services are sold to customers. Delivery is considered to have occurred when title and risk of loss have been transferred to the customer, which generally occurs after a license key has been delivered electronically to the customer. The Company also recognizes revenue from the sale of software licenses with multiple deliverables. These software license sales are evaluated under ASC 985-605, " Software Revenue Recognition" The Company recognizes revenue under time and materials contracts primarily from the Nuclear Industry Training and Consulting segment and certain cost-reimbursable contracts. Revenue on time and material 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. Any unbilled amounts are typically billed the following month. Under cost-reimbursable contracts, which are subject to a contract ceiling amount, the Company is reimbursed for allowable costs and paid a fee, which may be fixed or performance based. However, if costs exceed the contract ceiling or are not allowable under the provisions of the contract or applicable regulations, the Company may not be able to obtain reimbursement for all such costs.

Recent Accounting Pronounceme24

Recent Accounting Pronouncements (Policies)	6 Months Ended
	Jun. 30, 2016
Recent Accounting Pronouncements [Abstract]
New accounting standards	2. Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-17, " Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes". Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, " Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation: Topic 718: Improvements to Employee Share Based Accounting"

Summary of Significant Accoun25

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2016
Summary of Significant Accounting Policies [Abstract]
Revisions [Table Text Block]	The Company assessed the materiality of these misstatements on prior periods' consolidated financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality Accounting Changes and Error Corrections "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" GSE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three months ended June 30, 2015 Six months ended June 30, 2015 As Reported Adjustment As Revised As Reported Adjustment As Revised Revenue $ 13,632 $ 22 $ 13,654 $ 27,628 $ 39 $ 27,667 Cost of revenue 10,717 50 10,767 21,491 (5 ) 21,486 Gross profit 2,915 (28 ) 2,887 6,137 44 6,181 Operating (loss) income (1,343 ) (28 ) (1,371 ) (1,739 ) 44 (1,695 ) (Loss) income before income taxes (1,394 ) (28 ) (1,422 ) (1,850 ) 44 (1,806 ) Net loss $ (1,467 ) $ (28 ) $ (1,495 ) $ (2,011 ) $ 44 $ (1,967 ) Basic loss per common share $ (0.08 ) $ - $ (0.08 ) $ (0.11 ) $ - $ (0.11 ) Diluted loss per common share $ (0.08 ) $ - $ (0.08 ) $ (0.11 ) $ - $ (0.11 ) GSE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Three months ended June 30, 2015 Six months ended June 30, 2015 As Reported Adjustment As Revised As Reported Adjustment As Revised Net loss $ (1,467 ) $ (28 ) $ (1,495 ) $ (2,011 ) $ 44 $ (1,967 ) Comprehensive loss $ (1,361 ) $ (28 ) $ (1,389 ) $ (2,141 ) $ 44 $ (2,097 ) GSE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Six months ended June 30, 2015 As Reported Adjustment As Revised Cash flows from operating activities: Net (loss) income $ (2,011 ) $ 44 $ (1,967 ) Changes in assets and liabilities: Contract receivables, net (138 ) 62 (76 ) Prepaid expenses and other assets (406 ) (5 ) (411 ) Billings in excess of revenue earned (440 ) (101 ) (541 ) Net cash provided by operating activities $ (1,600 ) $ - $ (1,600 ) Net decrease in cash and cash equivalents $ (3,828 ) $ - $ (3,828 )

Basic and Diluted Earnings (L26

Basic and Diluted Earnings (Loss) Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2016
Basic and Diluted Earnings (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 earnings (loss) per share were as follows: (in thousands, except for share amounts) Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Numerator: Net income (loss) $ 111 $ (1,495 ) $ 249 $ (1,967 ) Denominator: Weighted-average shares outstanding for basic earnings per share 18,010,949 17,887,859 17,956,622 17,887,859 Effect of dilutive securities: Employee stock options 251,464 - 237,417 - Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 18,262,413 17,887,859 18,194,039 17,887,859 Shares related to dilutive securities excluded because inclusion would be anti-dilutive 738,789 2,513,321 745,415 2,580,942

Contract Receivables (Tables)

Contract Receivables (Tables)	6 Months Ended
	Jun. 30, 2016
Contract Receivables [Abstract]
Components of contract receivables	The components of contract receivables are as follows: (in thousands) June 30, December 31, 2016 2015 Billed receivables $ 9,878 $ 9,831 Unbilled receivables 4,681 3,325 Allowance for doubtful accounts (21 ) (103 ) Total contract receivables, net $ 14,538 $ 13,053

Fair Value of Financial Instr28

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2016
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 June 30, 2016: 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 $ 9,626 $ - $ - $ 9,626 Foreign exchange contracts - 23 - 23 Total assets $ 9,626 $ 23 $ - $ 9,649 Foreign exchange contracts $ - $ (136 ) $ - $ (136 ) Contingent consideration liability - - (2,466 ) (2,466 ) Total liabilities $ - $ (136 ) $ (2,466 ) $ (2,602 ) The following table presents assets and liabilities measured at fair value at December 31, 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 $ 8,979 $ - $ - $ 8,979 Foreign exchange contracts - 121 - 121 Total assets $ 8,979 $ 121 $ - $ 9,100 Foreign exchange contracts $ - $ (57 ) $ - $ (57 ) Contingent consideration liability - - (3,732 ) (3,732 ) Total liabilities $ - $ (57 ) $ (3,732 ) $ (3,789 ) The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the six months ended June 30, 2016: (in thousands) Contingent consideration: Beginning balance at December 31, 2015 $ 3,732 Payments made on contingent liabilities (1,421 ) Change in fair value 155 Ending balance $ 2,466

Derivative Instruments (Tables)

Derivative Instruments (Tables)	6 Months Ended
	Jun. 30, 2016
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: June 30, December 31, (in thousands) 2016 2015 Asset derivatives Prepaid expenses and other current assets $ 23 $ 115 Other assets - 6 23 121 Liability derivatives Other current liabilities (136 ) (57 ) (136 ) (57 ) Net fair value $ (113 ) $ 64
Derivative Instruments, Gain (Loss) [Table Text Block]	For the three and six months ended June 30, 2016 and June 30, 2015, the Company recognized a net gain (loss) on its derivative instruments as outlined below: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Foreign exchange contracts-change in fair value $ 6 $ (86 ) $ (177 ) $ (86 ) Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals (23 ) 55 42 7 Loss on derivative instruments, net $ (17 ) $ (31 ) $ (135 ) $ (79 )

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Long-Term Debt [Abstract]
Susquehanna Bank Loan Agreement debt covenants	The Loan Agreement contains certain restrictive covenants regarding future acquisitions and incurrence of debt. In addition, the Loan Agreement contains financial covenants with respect to the Company's minimum tangible capital base and quick ratio. As of Covenant June 30, 2016 Minimum tangible capital base Must exceed $10.5 million $11.9 million Quick ratio Must exceed 1.00 : 1.00 1.55 : 1.00 As of June 30, 2016, the Company was in compliance with its financial covenants as defined above.

Product Warranty (Tables)

Product Warranty (Tables)	6 Months Ended
	Jun. 30, 2016
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 portion of the warranty provision expected to be incurred within 12 months is classified as current within accrued warranty ($1.4 million), while the remaining amount is classified as long-term within other liabilities ($158,000). The activity related to the warranty accrual is as follows: (in thousands) Balance at December 31, 2015 $ 1,614 Warranty provision 286 Warranty claims (321 ) Currency adjustment (3 ) Balance at June 30, 2016 $ 1,576

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2016
Income Taxes [Abstract]
Income Taxes [Table Text Block]	The Company's income tax expense amounts for the six months ended June 30, 2016, and June 30, 2015, differed from the expected income tax amounts computed by applying the federal corporate income tax rate of 35% to income before income taxes for the periods as shown in the table below. (in thousands) Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Provision for income taxes $ 108 $ 73 $ 196 $ 161 Effective tax rate 49.3 % (5.1 )% 44.0 % (8.9 )%

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2016
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 income (loss) before income tax expense: (in thousands) Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Revenue: Performance Improvement Solutions $ 8,323 $ 8,213 $ 17,166 $ 17,046 Nuclear Industry Training and Consulting 4,092 5,441 8,225 10,621 $ 12,415 $ 13,654 $ 25,391 $ 27,667 Operating income (loss): Performance Improvement Solutions $ (432 ) $ (1,220 ) $ (474 ) $ (1,924 ) Nuclear Industry Training and Consulting 883 362 1,071 662 Gain on change in fair value of contingent consideration, net (224 ) (513 ) (155 ) (433 ) Operating income (loss) $ 227 $ (1,371 ) $ 442 $ (1,695 ) Interest income, net 13 21 40 48 Loss on derivative instruments, net (17 ) (31 ) (135 ) (79 ) Other (expense) income, net (4 ) (41 ) 98 (80 ) Income (loss) before income taxes $ 219 $ (1,422 ) $ 445 $ (1,806 )

Summary of Significant Accoun34

Summary of Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2016Segment
Summary of Significant Accounting Policies [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

Summary of Significant Accoun35

Summary of Significant Accounting Policies, Revisions (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
CONSOLIDATED STATEMENTS OF OPERATIONS
Contract revenue	$ 12,415	$ 13,654	$ 25,391	$ 27,667
Cost of revenue	8,855	10,767	18,207	21,486
Gross profit	3,560	2,887	7,184	6,181
Operating loss	227	(1,371)	442	(1,695)
Income (loss) before income taxes	219	(1,422)	445	(1,806)
Net loss	$ 111	$ (1,495)	$ 249	$ (1,967)
Basic earnings (loss) per common share	$ 0.01	$ (0.08)	$ 0.01	$ (0.11)
Diluted earnings (loss) per common share	$ 0.01	$ (0.08)	$ 0.01	$ (0.11)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)	$ 111	$ (1,495)	$ 249	$ (1,967)
Comprehensive loss	(40)	(1,389)	147	(2,097)
Cash flows from operating activities
Net income (loss)	$ 111	(1,495)	249	(1,967)
Changes in assets and liabilities:
Contract receivables, net			1,547	76
Prepaid expenses and other assets			650	411
Billings in excess of revenue earned			877	(541)
Net cash provided by operating activities			1,046	(1,600)
Net decrease in cash and cash equivalents			(181)	(3,828)
Accumulated Deficit [Member]
CONSOLIDATED STATEMENTS OF OPERATIONS
Net loss			249
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)			249
Cash flows from operating activities
Net income (loss)			$ 249
Scenario, Previously Reported [Member]
CONSOLIDATED STATEMENTS OF OPERATIONS
Contract revenue		13,632		27,628
Cost of revenue		10,717		21,491
Gross profit		2,915		6,137
Operating loss		(1,343)		(1,739)
Income (loss) before income taxes		(1,394)		(1,850)
Net loss		$ (1,467)		$ (2,011)
Basic earnings (loss) per common share		$ (0.08)		$ (0.11)
Diluted earnings (loss) per common share		$ (0.08)		$ (0.11)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)		$ (1,467)		$ (2,011)
Comprehensive loss		(1,361)		(2,141)
Cash flows from operating activities
Net income (loss)		(1,467)		(2,011)
Changes in assets and liabilities:
Contract receivables, net				138
Prepaid expenses and other assets				406
Billings in excess of revenue earned				(440)
Net cash provided by operating activities				(1,600)
Net decrease in cash and cash equivalents				(3,828)
Restatement Adjustment [Member]
CONSOLIDATED STATEMENTS OF OPERATIONS
Contract revenue		22		39
Cost of revenue		50		(5)
Gross profit		(28)		44
Operating loss		(28)		44
Income (loss) before income taxes		(28)		44
Net loss		$ (28)		$ 44
Basic earnings (loss) per common share		$ 0		$ 0
Diluted earnings (loss) per common share		$ 0		$ 0
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)		$ (28)		$ 44
Comprehensive loss				44
Cash flows from operating activities
Net income (loss)		$ (28)		44
Changes in assets and liabilities:
Contract receivables, net				(62)
Prepaid expenses and other assets				5
Billings in excess of revenue earned				(101)
Net cash provided by operating activities				0
Net decrease in cash and cash equivalents				$ 0

Basic and Diluted Earnings (L36

Basic and Diluted Earnings (Loss) Per Common Share (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net income (loss)	$ 111	$ (1,495)	$ 249	$ (1,967)
Denominator:
Weighted-average shares outstanding for basic earnings per share (in shares)	18,010,949	17,887,859	17,956,622	17,887,859
Effect of dilutive securities:
Employee stock options (in shares)	251,464	0	237,417	0
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares)	18,262,413	17,887,859	18,194,039	17,887,859
Shares related to dilutive securities excluded because inclusion would be anti-dilutive (in shares)	738,789	2,513,321	745,415	2,580,942

Contingent Consideration (Detai

Contingent Consideration (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Business Acquisition, Contingent Consideration [Line Items]
Payments of the liability-classified contingent consideration arrangements	$ 0	$ 0	$ 1,421	$ 318
Other Current Liabilities [Member]
Business Acquisition, Contingent Consideration [Line Items]
Contingent Consideration, Liability	1,297		1,297		$ 2,647
Other non current liabilities [Member]
Business Acquisition, Contingent Consideration [Line Items]
Contingent Consideration, Liability	$ 1,169		$ 1,169		$ 1,085

Contract Receivables (Details)

Contract Receivables (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Apr. 30, 2016	Jun. 30, 2016	Jun. 30, 2015
Contract Receivables [Abstract]
Maximum term of contract receivables (in months)		12 months
Components of contract receivables [Abstract]
Billed receivables		$ 9,878	$ 9,831
Unbilled receivables		4,681	3,325
Allowance for doubtful accounts		21	103
Total contract receivables, net		$ 14,538	$ 13,053
Unbilled Contract Receivables Billed during July 2016	$ 1,500

Software Development Costs (Det

Software Development Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Software Development Costs [Abstract]
Total capitalized software development cost	$ 55	$ 432	$ 186	$ 938
Capitalized software amortization	(104)	(105)	(185)	(195)
Capitalized Computer Software, Period Increase (Decrease), Total	$ (49)	$ 327	$ 1	$ 743

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Goodwill [Roll Forward]
Net book value at December 31, 2015	$ 5,612
Goodwill impairment loss	0
Foreign currency translation	0
Goodwill, Period Increase (Decrease), Total	0
Net book value at March 31, 2016	$ 5,612

Fair Value of Financial Instr41

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Assets and liabilities measured at fair value [Abstract]
Money market fund	$ 9,626	$ 8,979
Foreign exchange contracts - Assets	23	121
Total assets	9,649	9,100
Foreign exchange contracts - Liabilities	136	57
Contingent consideration liability	2,466	3,732
Total liabilities	2,602	3,789
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance at December 31, 2015	3,732
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements	1,421
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings	(155)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease), Total	(1,266)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance	2,466
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets and liabilities measured at fair value [Abstract]
Money market fund	9,626	8,979
Foreign exchange contracts - Assets	0	0
Total assets	9,626	8,979
Foreign exchange contracts - Liabilities	0	0
Contingent consideration liability	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	23	121
Total assets	23	121
Foreign exchange contracts - Liabilities	136	57
Contingent consideration liability	0	0
Total liabilities	136	57
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
Contingent consideration liability	2,466	3,732
Total liabilities	$ 2,466	$ 3,732

Derivative Instruments, Foreign

Derivative Instruments, Foreign Exchange Contracts (Details) - Foreign Exchange Contract [Member] € in Millions, ¥ in Millions, £ in Millions, MYR in Millions, CAD in Millions, AUD in Millions	6 Months Ended
	Jun. 30, 2016AUD	Jun. 30, 2016EUR (€)	Jun. 30, 2016GBP (£)	Jun. 30, 2016CAD	Jun. 30, 2016JPY (¥)	Dec. 31, 2015MYR	Dec. 31, 2015AUD	Dec. 31, 2015EUR (€)	Dec. 31, 2015GBP (£)	Dec. 31, 2015CAD
Derivative [Line Items]
Derivative, Maturity Date	Jun. 1, 2017
Canada, Dollars
Derivative [Line Items]
Foreign exchange contract outstanding | CAD				CAD 0.5						CAD 1.3
Japan, Yen
Derivative [Line Items]
Foreign exchange contract outstanding | ¥					¥ 24.4
United Kingdom, Pounds
Derivative [Line Items]
Foreign exchange contract outstanding | £			£ 0.2						£ 0.5
Euro Member Countries, Euro
Derivative [Line Items]
Foreign exchange contract outstanding | €		€ 1.6						€ 2.1
Australia, Dollars
Derivative [Line Items]
Foreign exchange contract outstanding | AUD	AUD 0.9						AUD 0.4
Malaysia, Ringgits
Derivative [Line Items]
Foreign exchange contract outstanding | MYR						MYR 0

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	Jun. 30, 2016	Jun. 30, 2015
Estimated fair value of the contracts in the consolidated balance sheets [Abstract]
Asset derivatives	$ 23	$ 121
Liability derivatives	136	57
Net fair value	(113)	64
Other Current Assets [Member]
Estimated fair value of the contracts in the consolidated balance sheets [Abstract]
Asset derivatives	23	115
Other Noncurrent Assets [Member]
Estimated fair value of the contracts in the consolidated balance sheets [Abstract]
Asset derivatives	0	6
Other Current Liabilities [Member]
Estimated fair value of the contracts in the consolidated balance sheets [Abstract]
Liability derivatives	136	57
Other Noncurrent Liabilities [Member]
Estimated fair value of the contracts in the consolidated balance sheets [Abstract]
Liability derivatives	$ 0	$ 0

Derivative Instruments, Gain (L

Derivative Instruments, Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts- change in fair value	$ 6	$ (86)	$ (177)	$ (86)
Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals	(23)	55	42	7
Loss on derivative instruments, net	$ (17)	$ (31)	$ (135)	$ (79)

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stock-Based Compensation [Abstract]
Pre-tax share based compensation expense	$ 241,000	$ 137,000	$ 488,000	$ 271,000
Shares granted under stock options (in shares)	0	0	40,000	50,000
Fair value of shares granted under stock option plan	$ 0	$ 0	$ 46,000	$ 40,000
Granted performance-based RSUs	0	0	160,000	0
Aggregate fair value for performance-based RSUs	$ 282,000	$ 0	$ 282,000	$ 0
Granted time-based RSUs	5,000	0	134,824	0
Aggregate fair value for time-based RSUs	$ 13,350	$ 0	$ 299,350	$ 0

Long-Term Debt (Details)

Long-Term Debt (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)Right	Jun. 30, 2015USD ($)	Dec. 31, 2014USD ($)
Performance Bond Abstract
Number of Standby Letters of Credit | Right	9
Number of Surety Bonds | Right	0
Letter of Credit and Surety Bonds	$ 3,400
Number of Performance and Bid Bonds issued in relation to contracts | Right	8
Number of stand by letters of credit deposited in escrow accounts | Right	9
Restricted cash and investments	$ 3,400		$ 3,500
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 point 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	$ 0
BB&T 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 4.5%
Line of credit facility term	2 years
Expiration date of credit agreement	Jun. 30, 2016
Minimum Cash Balance Requirement	$ 3,000
BB&T 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	$11.9 million
BB&T 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	1.55 : 1.00

Product Warranty (Details)

Product Warranty (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Activities in product warranty account [Abstract]
Balance at December 31, 2015	$ 1,614
Warranty provision	286
Warranty claims	321
Currency adjustment	(3)
Standard Product Warranty Accrual, Period Increase (Decrease), Total	(38)
Balance at March 31, 2016	1,576
Accrued Warranty, Current	1,418
Accrued Warranty, Noncurrent	$ 158

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 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%
Provision for income taxes	$ 108	$ 73	$ 196	$ 161
Effective tax rate (in hundredths)	49.30%	(5.10%)	44.00%	(8.90%)

Segment Information (Details)

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)Segment	Jun. 30, 2015USD ($)
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of reportable business segments | Segment			2
Segment Reporting Information, Profit (Loss) [Abstract]
Revenues	$ 12,415	$ 13,654	$ 25,391	$ 27,667
Operating loss	227	(1,371)	442	(1,695)
Gain on change in fair value of contingent consideration, net	224	513	155	433
Interest income, net	13	21	40	48
Loss on derivative instruments, net	(17)	(31)	(135)	(79)
Other (expense) income, net	(4)	(41)	98	(80)
Income (loss) before income taxes	219	(1,422)	$ 445	(1,806)
Performance Improvement Solutions [Member]
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Contract range, minimum			6 months
Contract range, maximum			3 years
Segment Reporting Information, Profit (Loss) [Abstract]
Revenues	8,323	8,213	$ 17,166	17,046
Operating loss	(432)	(1,220)	(474)	(1,924)
Nuclear Industry Training and Consulting [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Revenues	4,092	5,441	8,225	10,621
Operating loss	$ 883	$ 362	$ 1,071	$ 662