Hello and welcome to the GSE Solutions Third Quarter 2020 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to, Kalle Ahl with The Equity Group. Please go ahead.

Thank you, Kevin, and good afternoon, everyone. Thank you for joining us today. Before we begin, I would like to remind everyone that statements made during the course of this call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Act of 1934. These statements reflect current expectations concerning future events and results. Words such as expect, intend, believe, may, will, should, could, anticipate and similar expressions are words that are used to identify forward-looking statements, but their absence does not mean a statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks and uncertainties and other important factors that could cause actual performance or achievements to be materially different from those projected. For a full discussion of these risks, uncertainties and factors, you are encouraged to read GSE's documents on file with the Securities and Exchange Commission, including those set forth in periodic reports filed under the Forward-looking Statements and Risk Factors section. GSE does not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. On this call, management may refer to EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS, which are not measures of financial performance under generally accepted accounting principles or GAAP. Management believes that these non-GAAP figures, in addition to other GAAP measures, provide meaningful supplemental information regarding the company's operational performance. Investors should recognize that these non-GAAP figures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to and not as a substitute for or superior to any measure of performance prepared in accordance with GAAP. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures in accordance with SEC Regulation G can be found in the company's earnings release. I'd now like to turn the call over to Mr. Kyle Loudermilk, Chief Executive Officer of GSE Solutions. Kyle, please go ahead.

Thank you, Kalle. I'd like to welcome everyone to GSE's third quarter 2020 financial results conference call. Joining me on today's call is Emmett Pepe, our Chief Financial Officer. Earlier today, we issued a press release covering our third quarter financial results. Hopefully, you've had a chance to review this news release, but if not, a copy can be found on our website at www.gses.com under the News section. In the third quarter, our industry continued faced curtailed bidding activity, delayed contract awards and project pauses due to the COVID-19 pandemic. We recorded third quarter revenue $12.9 million and adjusted EBITDA of negative $600,000 both of which were below respective prior year comparable figures and well below the normalized potential of our business. In this challenging environment, we remain sharply focused on cost containment and debt repayment while staying in front of our customers through a hybrid virtual and in person selling approach positioning us for success when industry activities rebounds. After repaying nearly $10 million of long-term debt during the quarter our cash and equivalents totaled $7.7 million at September 30th providing a sufficient financial flexibility to manage the business. Moreover our business has the capacity to generate strong cash flow and even during this unprecedented first nine months of 2020 we generated positive cash flow with our cash provided by operations totaling $1.6 million while we can't predict with precision or certainty the near-term impact of the pandemic, our long-term outlook is positive. We provide essential high value services to the nuclear power industry which plays a critical role in the global decarbonization of energy. In the United States we anticipate an up churn in nuclear energy under the Biden administration which is determined to combat climate change that includes leveraging the carbon pollution free energy providing by existing sources like nuclear. Part of Biden's ambitious $2 trillion climate plan unveiled in July calls for accelerated development of advanced Small Modular Reactors which are less expensive to build, safer and more efficient than traditional reactors and some of you know, we're supporting our client Nuscale, a leader in SMR technology with simulation technology and engineering services solutions. While both of our segments have been impacted by project delays due to the pandemic, Nuclear Industry Training and Consulting has been hit harder as clients prepared [ph] the hours of their own workforces and reduce staff augmentation engagements to encourage social distancing. NITC also continued to be impacted by a significant project stoppage during the period at a client facility due to COVID-19. Our expectation is that this project will resume in 2021 as this work is essential. Significant staff augmentation bidding opportunities within the nuclear sector remain but buying decisions were possible have been pushed out likely into 2021 due to client caution resulting from the pandemic. In this environment, we're fortunate to have a scalable model in which our NITC employees are already on our payroll [ph], if they're billable. We also have been nimble providing an increasing level of staffing solutions to other industries such as the broader manufacturing sectors where we recently won several new contracts. Additionally, we're engaging with new clients serving other industrial verticals including but not limited to alternative energy, transportation, engineering, land development and information technology. The team also continues to focus on expansion, opportunities in our core energy sectors with our existing customer base as well as pursuing opportunities within the energy support industry such as plant, maintenance and manufacturing. Given the robust long-term demand outlook for staffing and training services to meet the unique needs of the nuclear industry. We continue to make targeted investments in the business to improve our outlook. On this note, in September we were thrilled to announce the appointment of Brian Greene as Vice President of our Nuclear Industry Training and Consulting Business. Brian brings more than 15 years of staffing industry experience including over a decade at System One in the professional staffing space where he developed expertise in the nuclear energy and engineering sectors. Brian's passion already has reenergized the NITC group during these challenging times and we expect many good things to come under his team-oriented leadership style. This quarter we also streamlined the organizational structure of our performance improvement segment placing DP Engineering, True North and GSE's core engineering simulation business all under Don Horn's capable leadership. Don has a remarkable long-term track record delivering value for power clients and we believe his organizational experience will not only deliver cost savings but also further our goal creating a one stop shop for cross selling and upselling a unified suite of engineering solutions to industry. In the third quarter performance improvement orders totaled $9.3 million up sequentially from $7.1 million in the second quarter and compared to $10.7 million in the prior year quarter. Performance orders totaled $21.8 million for the nine months to-date up from $19 million in the same period a year earlier. This is good news and speaks the essential nature of the solutions we provide. We want steady flow of fundamental meat and potato business as we continue to provide essential services to a critical industry in a period of time that is between large full scope simulator projects. I'd also like to call out performance improvement software revenue which is SaaS based and recurring in nature reached $942,000 this quarter up approximately 20% from the prior year period. We believe that the pandemic maybe creating additional opportunities for our EnVision cloud-based software which provides our clients with anytime, anywhere simulation training another tutorial, requiring only internet connectivity in a web browser, clients can leverage this technology in a safe and effective manner for essential training and workforce development. Our total backlog at the end of Q3 stood at $44.6 million consisting of $33.2 million of performance improvement backlog and $11.2 million of NITC backlog. Our backlog remained relatively flat compared to the end of the second quarter of 2020. Amid the pandemic, we feel this is a solid performance yet we're working diligently to add to these levels as we approach 2021. We remain confident about GSE's long-term opportunity given our difficult to replicate assets, specialized employees and innovative technologies. GSE delivers essential services that are critical to our client's operational safety and efficiency. As we've seen before in times of crisis, certain work can only be delayed for so long and for a limited period of time. Moreover we believe, nuclear energy will play a substantial role in our carbon free future. In closing and most importantly, our emphasis today continues to on protecting the health and safety of our employees and clients during the COVID-19 pandemic. We've migrated a meaningful portion of our employee base to remote work setting using collaboration, technologies, tools and best practices. As a result, this has created an opportunity to further optimize our future real estate footprint which we are aggressively pursuing. Our new work environment has fundamentally improved our project delivery approach to customers. We now deliver simulation projects for customers using integrated virtual project teams resulting in higher quality deliverables, lower schedule risk and peer visits to customer sites. This is a win, win. Regardless of the path COVID-19 ultimately takes, our long-term strategy remains intact. We continue to focus on organic growth, streamline our operations, contain costs, maximize cash flow and further strengthen our balance sheet. I'll now turn over the call to Emmett Pepe our CFO, who will review the third quarter financial results. Emmett. Please go ahead.

Thank you, Kyle. Total revenue in Q3, 2020 was $12.9 million compared to $20 million in Q3, 2019 reflecting a $4.2 million decrease in our performance improvement segment revenue and a $2.9 million decrease in our NITC segment revenue. A decrease in performance improvement revenue was driven primarily by COVID-19 related headwinds, our inability to commence certain projects remotely. The decline in NITC revenue was primarily due to COVID-19 related project delays and stoppages and lower staff augmentation needs from customers during the quarter. Gross profit in Q3, 2020 totaled $3.3 million compared to $4.7 million in Q3, 2019. Performance improvement gross profit declined by approximately $1.1 million to $2.5 million. NITC gross profit decreased by approximately $288,000 year-over-year to $837,000. The decreases in gross profit for each segment were in line with our revenue declines. We continue to manage our cost structure during the pandemic to maintain our margin percentages. In fact, our gross profit margin percentages are up in both segments quarter-over-quarter and year-to-date to year-to-date. SG&A expenses totaled $2.9 million in Q3, 2020 versus the comparable figure of $3.5 million in Q3, 2019. The decrease in SG&A expenses were driven by $952,000 cash settlement received from an escrow account for our purchase agreement with Absolute Consulting. Excluding this provision, SG&A expenses remained relatively stable on a year-over-year basis reflecting our emphasis on cost containment. Operating loss equaled approximately $371,000 in Q3, 2020 compared to an operating loss of approximately $365,000 in Q3, 2019. Non-GAAP adjusted EBITDA loss as defined in our earnings release totaled approximately negative $600,000 in Q3, 2020 compared to a positive adjusted EBITDA of $1.4 million in Q3, 2019. During the first nine months of 2020, we paid down $18.5 million of our long-term debt. In August, we successfully amended our credit agreement with Citizens Bank and during Q3, 2020 paid off the term loan used for the acquisitions of DP Engineering and True North Consulting. After the payout for this term note, we believe we have sufficient cash and working capital available to support our ongoing business. We have been prudently managing our balance sheet. At quarter end, our net debt totaled $5.9 million consisting of $13.6 million of debt and $7.7 million of cash. Total debt includes approximately $10 million that we received earlier this year under the Payroll Protection loan Program. We have used these funds for payroll and related cost such as rent utilities and other permitted uses. As of September 30, 2020 we were in full compliance with all requirements in order to apply for forgiveness under the PPP loan. Exclusive of the $10 million PPP loan which we expect to be forgiven, our net cash balance would be $4.2 million. This is a testament to our ability to manage through difficult economic environment generating positive cash flow as we go. I'll now turn the conversation back to Kyle.

Thanks Emmett. Operator, please open the floor for questions.

[Operator Instructions] our first question is coming from Tim Chatard from Meros Investments. Your line is now live.

Just related to gross margins both segments up year-on-year and through the course of the year actually both segments trending quite strong relative to the lower revenue. If you had a recovery in revenue in future quarters, would you expect gross margin to revert back for any reason or are the current levels indicative of what you can keep gross margin or potentially any other color there?

Yes, this is Kyle. I'll take that Tim and Emmett if you have further color or thoughts, feel free to add on. Tim, it's a good question and it really does in the time of the pandemic while it's been challenging to shed some business and see some business delayed. It does shine light on the fact that in or core businesses gross margins could be quite good and that's what we're seeing right now and that's helping us ride out this pandemic. It does show the ability that when business does come flowing back to help us focus on operating lean and mean in keeping that cadence to keep those gross margins as high as possible. With that said, some of these projects that have been delayed, have been lower margin than what you're seeing in our core businesses right now. But there may be an opportunity to - the margins based on altering we found during this pandemic that we alluded to in the call. Emmett, do you have any further color?

Yes, the only thing I would add you kind of touched upon at the end. The mix is always going to come into play and NITC business is lower margin than the performance segment. So depending on the revenue that's generated by segment, that will impact margin and the different customers and projects - the cost point, we believe we have strong margins overall with this business and we're maintaining that as we go through the pandemic.

Okay, you also mentioned I think specifically related to the NITC segment. Industries outside of nuclear that you were pursuing, if I understood that correctly. I didn't catch the industries that you were potentially focused on. But maybe you could I think I caught alternative energy. But there were some others that were listed there, is that a maybe you can flesh that out a little bit and give us some color as to where you might be able to take that business outside of nuclear?

Yes, the ability to provide staffing services is really an opportunity cross vertical and so what we're seeing with the addition of Brian coming and with some of these other investments and sales folks, is that we've been able to crack open and to some other verticals in broader manufacturing. One in particular was automotive, very strong need for engineering talent in the automotive sector with one of the folks that we added over the course of last year. We've seen a nice add in services there as we've alluded in the past, we have seen a temporal add that - for the medical industry in California as they were working through the pandemic as transition to our permanent step up for that instance. But we're really focused on the energy sector particularly nuclear. But we do find where we can be profitable, we do find opportunities in broader manufacturing which has really helped us with infrastructure.

Okay, so that sounds like it's more opportunistic as opposed to a bona fide strategic vector to try to penetrate new industries, is that the right way to think about it?

No not really. We hire these folks that I alluded to and you can see in the past earnings conference calls. Where we really intentionally hire folks beyond nuclear to target [indiscernible] segments, not where we - team success are in the segments that I mentioned. So it's a result of strategic investment where we've been successful, we've continued with that investment and that's where you see the results we discussed. If we're not successful then we cut our losses and make sure that we are ready to bounce, if the market turns.

Okay and I've got a couple more questions. I don't want to dominate the discussion if there's a - if it's best for me to go back in the queue. But what's your guidance there?

Tim, I would say just maybe one or two more questions and then we'll check on the queue.

Yes. You mentioned the concept of simulation work maybe being delivered virtually. I'm curious about that if that's something that it was sort of COVID phenomenon or whether that's been something you've been working on for longer periods of time and what potentially that might do to enhance your business going forward, if delivering a virtual simulation is - would the revenue scope remain the same, would the margin structure changed all? I'm just curious to hear more about that.

Yes, I'll walk you through an example of used cases with a particular customer that's working with us to deliver simulation solution and training solution for their particular utility plan. Traditionally utility sectors very traditional and you know doesn't adopt quickly to change for good reasons, really risk management you're dealing with power plants, as long as they work and operate safely. Not necessarily motivated to change and that's pervasive in how projects are approached. What we've seen during a pandemic while we put the investment and infrastructure in place to deliver this technology and work virtually with customers. This infrastructure has been in place really for some time now because we've made the prudent investments to try to lower the amount of T&E in our projects to use margins and be more efficient, more accurate with customers. So adoption of that, on the customer side hasn't been as rapid as we wanted. But they were moving along and which was a good sign. For what we've seen with the pandemic is there is no travel unless it's absolutely essential and we do have the need to go to client sites and sometimes client come to us. But with the pandemic, there really was an opportunity silver lining was to really leverage this technology, educate the customers that we don't need to travel to you as often, you don't need to travel to us as often. We can work virtually as teams using collaborative technology such as Zoom, such as using - being able to drop files directly at the client servers and vice versa in a secure manner with firewalls and VPNs. And be able to work collaboratively for a broader scope virtually than we have been in the past, that's made us more efficient, more accurate unless wear and tear with travel because we're saving the money on T&E that can induce margins marginally. But we don't see a reduction in the overall budgets for these projects. The work has to get done. We're just doing it more efficiently now and that also explains somewhat of the margin you say, we've been seeing.

Great, I understand. I appreciate it. That's all from me. Thanks.

Okay, thanks very much and good questions. Kevin, any more questions in the queue?

Not at this time, sir. I'll turn the floor back over to you for any further or closing comments.

Great, thanks Kevin. I'd like to thank everyone for joining us. It was a good discussion. We appreciate your time and interest in GSE. Well we won't be on the road for investor conferences in the near term given that pandemic. We remain accessible for one-on-one calls. We've had a number of good calls over these past few months and we certainly look forward to more. So wanted to emphasize that. Please reach out to our IR firm, Kalle Ahl in The Equity Group. If you're interested in scheduling a follow-up call. We'll be delighted to speak with you. Once again, I'd like to thank everybody for joining today's call with us.

Thank you that does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.