Good afternoon and welcome to GSE Systems Third Quarter Fiscal Year 2021 Financial Results Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I'd now like to turn the call over to Mr. Adam Lowensteiner, Vice President of Lytham Partners. Please go ahead.

Thank you, Nick and good afternoon, everyone. Thank you all for joining us today to review the financial results for GSE Systems for the third quarter ended September 30, 2021. With us on the call representing the company today are Kyle Loudermilk, President and CEO of GSE Systems; and Emmett Pepe, Chief Financial Officer of GSE Systems. 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 than 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, 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. With that, I'd like to now turn the call over to Mr. Kyle Loudermilk, President and Chief Executive Officer of GSE Solutions. Kyle, please proceed.

Thank you, Adam. I'd like to welcome everyone to GSE's third quarter 2021 financial results conference call. Earlier today, we issued a press release detailing our 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. To lay out the agenda for today's call, I plan on opening my remarks with an overall discussion on the industry, then drill down into commentary on the quarter's highlights and the status of each of our divisions, including our engineering segment, also known as Performance Improvement Solutions; Workforce Solutions, also known as Nuclear Industry Training and Consulting, or NITC; and our Software as a Service-based software solutions business. And then Pepe will then give a recap of the financial results and we will then open the call to any questions at the end and we do hope to have questions. First, let me start by giving a macro overview of the industries we serve, particularly nuclear. So let's begin by highlighting the very positive industry trends that are now unfolding for the nuclear industry. And as a result, providing what should be significant tailwinds for our business at GSE. This past August, the American Nuclear Society held it's utility working conference in Marco Island, Florida. It's the largest conference of the year for our industry. If there's any underlying message that came out of the conference, it was that nuclear is gaining serious traction. Specifically speaking, the positivity emanating from the conference was from the recognition that nuclear produces zero carbon power which is essential to a carbon-free future and the fact that Congress at that time was advancing the bipartisan infrastructure bill which contains provisions to advance the goals of achieving a zero carbon grid by 2035. Since then, just today, moments before this call, we understand that the bill has become well with President Biden signing the bill, formally kicking off the move for the United States moving towards a zero carbon grid by 2035. Nuclear's role as a result in our power mix will become ever more essential as a result of this. The trend is not limited to the United States. We are seeing several countries around the world embrace nuclear energy as an integral part of their plans to decarbonize the power sector while ensuring a stable grid and energy independence. In the past several months, we've seen countries including Canada, the United Kingdom, Poland, the Bulgaria, to name a few, formerly announce steps by which they will move to adopt more nuclear power generation moving forward, particularly leveraging the small modular reactor technologies that exist for new builds. A bit more in the Bipartisan Infrastructure and Jobs Bill that was recently signed into law. If one reviews the proposed infrastructure spending, there's a lot of dollars allocated towards strengthening the U.S. grid and making sure it can remain resilient and stable while also focusing on the implementation of more renewable and carbon-free energy production to decarbonize our grid by 2035, keeping in mind the longer-term goal is achieving a net zero economy by 2050. In the bill, the mention of nuclear is quite prominent from supporting the operations of the existing nuclear fleet to advancing the next generation of nuclear power plants. For obvious reasons, this is very exciting news for our industry and as a result, very positive news for GSE moving forward. On nuclear power, the legislative package targets aging power plants as well as yet-to-be-built small modular reactors. It sets aside $6 billion for the Department of Energy to spend on nuclear facilities that are under threat of being shut down due to economic factors. It also sets aside $6 billion in funding for micro reactors, small modular reactors and advanced nuclear reactors. It is obvious that the goal of the bill is to incentivize states and utilities to retain and invest in nuclear power. This investment is a critical factor in creating a robust and resilient carbon-free power grid. Another key point in the bill is the recognition of the value of zero carbon power produced by nuclear through implementing what are known as zero emission credits, or ZECs. This is a key win for the nuclear industry as for the first time, there is a federal level economic credit allocated to the production of nuclear power, much as wind and solar received federal credits. This creates a large economic setup to invest in the continuance of nuclear power generation from the existing fleet, allowing utilities to invest in these plants to extend the operable lifetimes of the plants and produce more power from those plants over time through capital investment. GSE is geared towards serving a nuclear fleet to produce power safely, extend operating lifetimes and produce more power through capital investment and these are just a few reasons why the American Jobs Law is great news for us. As I briefly mentioned earlier, this good news for nuclear extends well beyond the United States. While the global press towards carbon-free economies has been years in the making, we are now gaining serious momentum to meet certain decarbonization goals by 2035 and beyond. That said, over the past few years, the world is waking up to the fact that renewable energy sources of wind and solar while zero carbon are highly inconsistent, therefore, unreliable energy sources in and of themselves. As a result, countries around the world have scrambled to secure legacy energy sources like natural gas, oil and even coal, most notably in Germany and China, to make sure that citizens can heat their homes in the colder weather and keep the lights on and keep the economy moving forward. The recent energy crisis is driving recognition among countries that the answer to the equation of how to decarbonize, while simultaneously being energy independent, absolutely must include nuclear. This solution is not a secret anymore as seen in recent price stream surprises in uranium which has climbed over 40% in recent months. One of the new technologies that's going to help solve many of the challenges I just alluded to and that GSE is heavily involved in and has been for quite some time, are small modular reactors, also known as SMRs. SMRs are gaining lots of momentum all over the world. GSE has been involved in providing supporting software and simulation software and services for SMRs over 10 years through a partnership that we have with NuScale, one of the leading developers of SMRs. NuScale is majority owned by Fluor, a public company that is providing engineering, procurement and construction services for more than 100 years. Our software solutions and simulation technologies are required in advance of SMRs being deployed or commissioned for design licensing, running necessary tests, simulation, operating scenarios and for training future employees who will operate and engineer these plants. These efforts continue to gain steam as reported a few weeks ago when NuScale announced it has installed a new simulation laboratory at the Center for Advanced Engineering Studies -- excuse me, the Center for Advanced Energy Studies in Idaho Falls, Idaho, situated approximately 50 miles east from where our NuScale first commercial SMR is expected to be built at Idaho national laboratory. Several of GSE software offerings are being used in these NuScale simulation laboratories. This is the second of three facilities that will be built for the purpose of developing and training operators and the broader workforce for the next generation of nuclear SMR facilities. The first facility is at NuScale's headquarters in Corvallis, Oregon and the third facility is planned to be built at Texas A&M in the near future. It is news items like this one with NuScale which are important for investors to understand and remember as SMR start to gain momentum and be procured our technologies and offerings are extremely important and necessary early in the process and throughout the process. After all, NuScale has been a customer of GSE for approximately 10 years already and we've only just begun to see planning for new SMR plants. Also, as coal generation facilities are taken offline, there are plans to potentially repurpose these sites as SMR locations. We're already seeing this occur in coal mining states like Montana and Wyoming with planning studies underway. The state governments for each state there are embracing decarbonization and quickly pivoting into repurposing older coal power plant sites into SMR sites. It is a relatively straightforward transition as the current sites are already brownfield sites are often near a water source as a heat sink and have grid connections and utility lines on site. These are all key elements which are difficult to obtain and costly to replace or replicate if starting from a greenfield site. Additionally, retired coal plants typically have a workforce that is ready to pivot to a new power generation plant. The focus on nuclear is not limited to simply converting fossil fuel power sites to nuclear powered sites. Nuclear power in and of itself is becoming a valuable source of carbon-free 24/7 steady power for essential applications such as data centers which require significant amounts of uninterrupted power. In a fascinating development, Energy Harbor Corp, an energy company in Akron, Ohio, announced this past July that it will provide nuclear power to Standard Power's new bitcoin blockchain mining center. More recently, Talen Energy announced, it is developing a cryptocurrency mining facility and data center in it's nuclear power plant, Berwick, Pennsylvania, as bitcoin miners look for carbon-free energy source. It is no surprise that these announcements came on the heels of Elon Musk opining on the high energy use of the bitcoin, suggesting that nuclear should be a viable option to keep these emerging technologies online and operate at net-zero carbon emissions. We had a press release earlier today about our work with Talen in advancing this capability. It's very exciting and it's happening today. Providing carbon-free nuclear power to critical data centers, whether for cryptocurrency purposes or other critical data applications, will only become more essential for large tech companies to claim they have zero carbon data centers. Data centers need 24/7 high reliability power and nuclear is really the only game in town for providing 24/7 high-reliability carbon-free power. It's exciting to see this trend getting hold in the street and move forward. Similar positive statements for nuclear can be found on the international front. Just north of the U.S. border, Canada has been very vocal with regards to becoming carbon free and that the path to get there will require significant investment in nuclear power. Canada has been taking aggressive steps embracing SMRs and investing in nuclear to meet decarbonization goals. GSE benefited from this directly in the quarter when we were awarded a $1.6 million contract to upgrade the simulators at two Canadian nuclear power plants. This contract focused on upgrading clients the latest emulator technology and we are also engaged in projects to help this customer enhance their energy production efficiency, effectively producing more zero carbon power from existing facilities. These are recent examples of how Canada's investment in nuclear directly benefited GSE. More broadly, GE Hitachi Nuclear Energy has made recent news regarding Canada by entering into an agreement with BWXT Canada to help with engineering and procurement to support the design, manufacturing and commercialization of an SMR at Ontario Power Generation's Darlington nuclear generation station. In Japan, the new Prime Minister recently announced his plans to get a nuclear back up and running to meet decarbonization goals as well as ensure that the country has a consistent and affordable means of power, especially in a digital environment, whereby citizens are using or relying on more connected devices. This is also a very significant national security priority for Japan as energy security for the country becomes an existential concern. In the United Kingdom, where they have recently had energy -- acute energy reliability and availability issues, they announced that they too are aggressively pursuing nuclear power options. While the U.K. has been slow to chart a path forward for nuclear, the recent significant rise in natural gas prices combined with a much slower-than-planned wind power being generated has motivated government officials to engage in talks about renewing new nuclear options as there are many new technologies like SMRs that can be safely implemented. The financial time seasonally reported that several U.K. ministers are on board to put "nuclear power at the heart of Britain's strategy to reach net zero carbon emissions by 2050." Spearheading SMRs in the U.K. as well as Royce Group which publicly announced last week that it has raised over $600 million to fund the next generation of low-cost, low-carbon nuclear power technology. Rolls Royce has partnered with Exelon Generation Limited to develop SMRs initially in the U.K. and then will open for export to customers worldwide. Another example of progress is Poland which has recently made news regards to pursuing SMRs. Given the country's geography and political profile, Poland has expressed their desire to be energy independent and are recognized that that can be accomplished via the use in part of SMRs while at the same time producing carbon-free power from broader sources. In September, NuScale signed a deal to explore the deployment of an SMR at a coal repurposing solution -- as a coal repurposing solution for existing coal-fired power plants. as the U.S. has at Montana and Wyoming. This came off the heels of GE and Cameco entering an MOU with a few other parties to evaluate the potential of the uranium fuel supply chain from Canada to service the potential fleet of SMRs in Poland. In all, according to Polish government's energy strategy, Poland plans to construct six nuclear power units. In 2033, Poland should launch a reactor, generating some 1 to 1.6 gigawatts of power. Subsequent reactors would be constructed every two to three years according to this plan until the targets of six units is achieved. Also of note, Romania has recently entered into an agreement with NuScale to evaluate the implementation of an SMR site in the country. In France, one of the earliest countries to use nuclear energy extensively, has announced plans to invest heavily into innovation, including the building of SMRs which among other technologies will be needed to meet aggressive green energy plans by 2030. In addition to announcing the importance of being carbon neutral, the President of France noted that investing in these new technologies is a must to ensure the country incontinence energy independence. One more important industry piece of news that I'd like to share came out of Finland which announced that it was going to produce -- proposed to the EU that nuclear power finally officially be included as a sustainable energy source which it is. So it is quickly becoming apparent that you can meet zero carbon emissions and have a stable grid with energy independence. Nuclear must be included and it will, in fact, become a more critical part of our power mix as we move to zero carbon. The news that I just shared and additional news but I don't have time to note here, makes me feel extremely confident about the future opportunities for GSE and it's unique offerings which are at the forefront of making these nuclear power generation technologies and plants operate and run safely and efficiently. Now, let's dive into some of the key events GSE experienced in the third quarter which was our strongest reported since the onset of the pandemic. It's good news. So some key events. In Q3, market overdue dynamics and new orders. Overall, the third quarter produced solid results and demonstrated that our business has stabilized with sequential and year-over-year improvements in revenue in new orders. The quarter also highlighted efficient management of the business and our balance sheet which saw net cash increase by $10.6 million as the PPP loan has been forgiven during the third quarter. While new orders were not yet at pre-COVID levels, we are very pleased to be trending in the right direction with the third quarter producing higher new orders sequentially from Q2 and year-over-year from last year's Q3. While we continue to see some impact from the pandemic still linger, the third quarter results show that our customers are starting to emerge from the pandemic and we continue to make strides within each of our divisions. This demonstrates we are a highly diversified enterprise and able to be in a stronger position when our customers finally are ready to catch up on all the work that was delayed as a result of the pandemic. As I mentioned, we announced at the end of this quarter a contract win for advanced simulator technology upgrades and engineering services valued at $1.6 million. This was a great win for GSE, our largest in this regards in almost two years as it shows the value of our simulation technology and how customers rely upon us to deliver the latest technologies to enable them to operate their facilities in the most efficient and safe manner possible. This customer, who is based in Canada, was looking to upgrade the simulators at two nuclear plants which already were using GSE technologies by upgrading the simulation environment and utilizing our latest software. The customer will have state-of-the-art plant simulators and leverage these simulators to understand plant operations, how to optimize those operations most effectively as well as create sophisticated training experiences around real events and operating conditions. In addition to the upgrades, the customer will work with GSE engineers to incorporate plant-specific design information for new balance of plant models which shows the breadth of services we can offer our clients and that they have come to rely upon our services as well. Another win we announced very early in the third quarter with a new order for a simulation solution for a global energy utility based in Saudi Arabia. This order was valued at over $1 million and highlights the potential for additional opportunities with a large global operator. This order was for a complete simulator solution for Combined Cycle Gas Turbine, or CCGT plant, as it is important to note that this customer is committed to accelerating the transition towards net zero carbon by 2045 and beyond. The utility selected GSE as a simulation partner in order to boost the commitment to modernize and optimize operations while significantly enhancing their training capabilities in simulation systems. Two key catalysts, the new first stable grid and decarbonization of the power sector remains strong and are only going to gain momentum as we see moving forward and have recently accelerated due to high power costs from energy shortages and global initiatives more broadly as well as the U.S. Jobs Act which was signed into law today. Now, let's review a bit into each operating segment. For engineering performance, also known as Performance Improvement Solutions. Our engineering performance saw revenue increase 7% sequentially from the second quarter and up slightly by 2% compared to the year ago period. Orders have improved significantly during the third quarter, nearly doubling to $11.2 million when compared sequentially to Q2. When compared to the third quarter a year ago, orders increased by 21%. These increases are attributable to the two contract wins I referred to in my comments earlier by key orders. Looking further into the Engineering Performance division, our True North Consulting and DP Engineering units performed well compared to the third quarter a year ago as more customers are starting to invest in the essential services that we provide to the industry. Our core GSE performance operations which is comprised of sales and upgrades of simulator solutions for nuclear and natural adjacencies, performed stronger on a sequential basis. While the division is still in the midst of recovering from the pandemic, we are seeing customers start to put more work out to bid and inquire specifically of our unique solutions. There has been a large uptick in the opportunity pipeline as a result of this increased activity. In part because of this, we have reason to be confident industry is starting to emerge from the pandemic-related slowdown in spend and we do expect additional business within this division over the longer term as a result. Our pipeline opportunities overall for this segment has clearly improved. So our focus is working diligently with our customers and potential customers to convert these bids into orders as experienced during the quarter with new key orders received. Moving on to our cloud-based Software-as-a-Service solutions. As I've mentioned in the past, while this is technically categorized under our Engineering performance division, it is a very exciting and unique component to our business and one which I believe warrants its own conversation. Revenue from our software solutions was $0.8 million for the third quarter compared to $0.8 million for the second quarter. Most of this revenue is comprised of SaaS-based revenue, subscription revenue which is recurring in nature, while the remainder was for onetime licenses and annual maintenance associated with those license. While year-date software revenue was roughly flat compared to the prior year, it is very important to note that the mix of the software license revenue has shifted meaningfully in that the software revenue this year is primarily SaaS-based which increased by 42% year-over-year. Why is this important? It's important because it's an indicator of long-term growth and success for this business as SaaS revenue is recurring and highly sticky in nature with automatic annual adjustments to account for inflation plus margins to the company. We continue to be excited about these high-value, high-margin software solutions which have demonstrated the potential for continued above-average growth rates while bringing strong predictability to the software license business. I'm extremely pleased with the progress this division has built for GSE. Currently, it represents about 6% of total revenues and we are focused on growing from those levels in our overall revenue mix. Aside from the recurring nature software provides, it also provides very high gross margins, typically 80% to 90% for GSE. GSE recognizes this revenue on a ratable basis for software quarterly over the lifetime of contracts. For perpetual license sales which are necessary in certain instances, we recognize this revenue upfront and associated maintenance ratably over each year for which maintenance is current. We're making a significant push to convert our perpetual license to our licenses with customers and deliver that via cloud-based solutions. We have been successful in converting several of our clients, these cloud-based license revenue agreements and are in discussions with several more to keep moving forward. We're also selling net new SaaS revenue which is fantastic. We're happy with our growth in this area and look forward to continuing the transformation to make this segment a larger part of our business. We're positive about this part of the business that could be an interesting diamond in the rock. I would be remiss if I didn't mention movement in the sector at a high level, especially recently with Aspen Technology and Emerson, whereby Emerson will acquire Aspen and then merged their software units into a new company also called Aspen. The combined industrial software company will comprise Emerson's grid modernization technology into the graphical simulation software and Aspen Tech offerings to mining, manufacturing, petrochemicals, pharmaceuticals and refining. More importantly, the valuation of the deal was proposed at a whopping 15x revenue, showing the demand and strength of software businesses to the power industry. This highlights the potential value of GSE software business as there is strong demand from our customers to help them improve their performance of their assets. The Workforce Solutions -- moving to Workforce Solutions. Sales were up 29% year-over-year and 10% sequentially. Good news. Orders of $3.5 million which compared to $5 million sequentially from the second quarter, an increase from $1.6 million over the last year's third quarter which was a low level as we're still doing with certain order cancellations at that time stemming from the pandemic. The increases really demonstrate how our customers are now feeling more comfortable with having workers on-prem and committed to making sure their facilities receive required upgrades and maintenance and services. While the third quarter orders were lower, we are confident that the division has turned a corner and prepare to gear up as the customers start coming back to the marketplace. To summarize, I'm extremely proud of our team at GSE and the results produced in the third quarter. We're able to demonstrate the turnaround of the business to produce positive cash flow. We're seeing signs of the industry improving and do believe that investors will need to be a little patient to see the industry further loosen the pandemic-related constraints on spending which we have confidence will happen bar any unforeseen events. In the meantime, the company has been rightsized and the diversified business model we've built over the past few years has proven resilient and we believe it has positioned the company to broadly benefit from the macro trends that bode very well for GSE's future. We are an essential part of the power industry ecosystem and our clients rely on us to keep their assets up and running while creating a highly efficient and safe environment. The strong reputation we have in the industry and the relationships we maintain with our customers and the value-added engineering workforce and software technology we provide the industry should position us well to beat up the competition as more business flows into the ecosystem for nuclear and the broader zero carbon power generation sector. As the industry continues to develop a resilient grid that will enhance the goals of decarbonization, GSE is at the forefront of providing such solutions and wanting to partner with the power industry to achieve these goals. With that said, I'll now turn the call over to Emmett Pepe, GSE's CFO, who will review the third quarter financial results. Emmett, please proceed.

Thank you, Kyle. With the numbers highlighted in detail in the press release, let me focus my comments on a few areas and provide added color where I can. Kyle highlighted a few of our key new orders in Q3 which led to our highest consolidated quarterly total since Q1 of 2020. Engineering performance led the charge with their highest quarterly total in nearly three years. Revenue during the third quarter of 2021 was $14.7 million, an increase of 8.6% compared to $13.5 million in the second quarter of 2021 and an increase of 13.7% from the $12.9 million reported in the third quarter of 2020. This is the highest quarterly revenue total since Q1 of 2020, pre pandemic. The sequential improvements in revenues were driven by sequential increases in the company's engineering performance and Workforce Solutions segments. Year-over-year increase of $1.8 million is due to continued improvement in emerging from the pandemic which continues to affect the power industry but as seen in the third quarter results, starting to gradually improve as customers start to reengage in site upgrades and maintenance. Engineering performance revenues were $7.4 million in the third quarter of 2021 compared to $6.9 million in the second quarter of 2021 and $7.3 million in the year ago third quarter. Sequential change was largely due to improvements in our True North and DP Engineering subsidiaries. The year-over-year change was primarily due to lower orders on the simulation part of the business but offset with improvements in our specialized engineering and consulting services. Workforce Solutions revenue increased approximately 10% to $7.3 million in the third quarter, up from $6.7 million in the second quarter of 2021 and increased 29% when compared to the $5.7 million in the year ago third quarter. The sequential and year-over-year improvements were due to continued growth of new customers gained in 2021. Q3 2021 was the highest quarterly total since Q1 of 2020. The year-over-year change is primarily due to an overall increase in activity due to the subsiding of the COVID-19 pandemic. Gross profit in the quarter -- third quarter of 2021 was $3.2 million or approximately 21.7% of revenue. This compared to gross profit of $3.3 million or 25.7% of revenue in the third quarter of 2020 and $2.7 million or 20% of revenue in the second quarter of 2021. Gross margin was affected by a project mix as our Workforce Solutions segment contributed a larger portion of revenue than in the prior year. Operating expenses which excludes restructuring and impairment charges and amortization expenses in the third quarter of 2021, were $3.4 million compared to $3.7 million in the second quarter of 2021. And operating expenses, excluding restructuring and legal settlement costs was $4 million in the year ago third quarter. We continue to closely monitor our operating expenses and expect them to be in line with the past three quarters going forward. Net income in the third quarter of 2021 was $11.4 million or $0.55 per basic and diluted share compared to a loss of $700,000 or $0.03 per basic and diluted share in Q3 of 2020. Net income was $3.2 million or $0.16 per basic and diluted share in the second quarter of 2021 which included a $5.1 million other income recorded for the employee retention credit. The positive income in the third quarter stems from the recording of the forgiveness of the PPP loan as well as $2.1 million of other income recorded for the employee retention credit. Adjusted net loss totaled $0.2 million or $0.01 per diluted share in the third quarter of '21 compared to $600,000 or $0.03 per diluted share in the second quarter of 2021 compared with an adjusted loss of $1 million or $0.05 per diluted share in the third quarter of 2020. Adjusted EBITDA which was positive at $100,000 for the third quarter of 2021, an improvement from a loss of $400,000 in the second quarter of 2021. The loss was $600,000 in the third quarter of 2020. Our adjusted net income and EBITDA figures have improved each quarter sequentially in 2021 as we strengthen our business post-pandemic. As of September 30, 2021, backlog was $37.5 million, with $31.5 million attributed to performance engineering and $6 million to Workforce Solutions. These levels in the backlog show stability in our existing contracts and our improvement in orders highlights the movement forward on some newer contracts that are anticipated to come online in the coming quarters. As we have stabilized the business, the balance sheet has benefited and should continue to demonstrate additional stability and improvement in the coming quarters. We exited the quarter with $4 million in cash and $2.1 million remaining on our credit facility which was lowered by $250,000 in the third quarter. Our working capital increased by $1.6 million from the prior quarter. Net cash also increased to $2 million from $1.5 million in the second quarter. In addition, $4.3 million of ERC refunds is expected to be received in future periods and is reflected as a current asset on our balance sheet. As mentioned on the last earnings call, approximately $10 million that we received last year under the Paycheck Protection program has been forgiven by the SBA has now been reflected in the third quarter results. As the loan has now been forgiven, any related interest incurred under this loan was subsequently also forgiven. As the business has been rightsized and our operating expenses have been tightly managed, we believe we have positioned ourselves for stability in the coming periods. I'll now turn the conversation back to Kyle.

Okay. Thank you, Emmett. To summarize, looking forward to the longer term, we see an interesting dynamic unfold on a global basis on two major fronts that we believe will act as strong tailwinds for the services that GSE provides. One is the focus on decarbonization but the other is the recent rise in electricity prices cost from a shortage in energy sources. We believe that as energy prices continue to rise due to lack of supply, the desire for countries and companies to see cleaner but also consistent means of energy sources have put a large focus on nuclear as seen in recent price increases in uranium and from the news in the press about nuclear. It is our belief that as a result of these issues and as they persist, the realization and implementation of SMRs are being put to the top of the list and the timeline of them becoming a reality has probably been moved up as a result. Now before we open the call for questions, I'd like to conclude that we believe that the company has stabilized and that we continue to work on several projects as we wait for the industry to resume upgrades and maintenance of their facilities and workforce. Bidding in recent months has definitely improved. We know that many of our customers who pushed bids during the pandemic are coming back to the table and a need for upgrade services. While the timing on this business is still hard to pinpoint, we do believe that GSE is well positioned to win our fair share of opportunities and with a leaner cost structure. We're very happy with the quarter which we think demonstrates significant progress. Given our very unique situation as a heavily tech-enabled provider but essential services to the decarbonization of the power sector and nuclear power industry, we remain very confident in our ability to create substantial long-term value. With that said, operator, please open the floor for questions.

Operator, can you please instruct for prompting to ask questions, please?

[Operator Instructions] First question comes from Don Argus of Argus Capital [ph]. Please go ahead, sir.

Yes, thank you. With lot of the opportunities globally all over the world seem to be emerging, could you talk about your capabilities outside the U.S.? It seems like you do work in a lot of markets. Can you do work anywhere? And then what is the sales process? And performing your work, you have to have people in those markets? Or is it done virtually?

Yes. Yes, Don, great question. This is Kyle. Thanks for asking that. Look, we deliver projects globally, especially on our simulation solutions capabilities. And we deliver those globally and we do so out of the United States. So we have projects that have either recent or ongoing in the United Kingdom, Slovakia to Ukraine, obviously, onboarding and surrounding Poland. So we're well positioned for that market, well positioned for the U.K. Prior to Fukushima, Japan was roughly 30% of our business and we continue to do business in Japan. They upgrade their licenses regularly into that market and we're well poised to serve that market as they grow. And we -- so net-net, we are a global company. We provide certain technologies globally out of the United States. Where we need to project talent globally, we do so. And so this momentum of advancing nuclear globally as well as SMRs into key segments, we're very well positioned to serve that market and do so out of the United States. And that is very much the norm for our business since it's inception 50 years ago.

Okay. The other one I had was on the Talen Energy project. Are the services you're providing there, the projects seem to be a little different than normal the services from your current suite of services? Or is it different?

Yes. Look, I think the nature -- so let's be specific. It's our engineering group that is providing the engineering services for that project. Our press release that we wrote with Talen was intentionally very specific about what we're doing to highlight the very unique solution we're providing to them which is albeit very many of the specialty engineering services associated with connecting these high voltage lines directly from the nuclear power plant through switchyards to that -- those data centers on complex that data center campus. We call that a behind-the-meter solution and this is going to become more of the norm that we're seeing for industry. The major utilities across the board are very interested in investing in data centers, having long-term energy contracts with them at premiums to spot market prices simply because they're providing carbon-free power that's highly reliable, very clean, 24/7. And we're really excited by that project because we could take those capabilities and apply them throughout the industry. They're very emerging but is going to be a very significant spend and exciting dynamic for data centers because look, all these companies that host systems in these data centers, large tech companies, bitcoin mining, blockchain capabilities, they want to claim that they're carbon free. And one of the few ways they can do that as we've seen with this Talen project is by leveraging the value of nuclear power.

Thank you. And congratulations on the progress in the quarter.

Yes, thanks. We're through [ph]. Thank you.

Thank you. The next question comes from Shai Dordatsky [ph], a private investor. Please go ahead.

Hi, good afternoon. Do you hear me?

We can hear you, Shai [ph]. How are you doing?

Great. Thank you. First of all, thank you for hosting the call. It's great to have such above-standard transparency. So I just want to recognize that you are very shareholder friendly and it's appreciated. So thank you for that. And the question would be, I'd love to learn more about the industry at large. Is there a dynamic where nobody got fired for buying not to in culture? So as you win contracts, it makes it easier to win more? Is that how the industry takes to operate?

I think, generally speaking, the answer is, yes, Shai. I think specifically, the more we can get the good news out, not only about wins but specifically what we do, you would have seen really over the last six months, a number of press releases from us highlighting the very specifics of our wins and want to be very transparent not only to the investment community but also to the market about what we're doing. And the most recent example is this data center power linkage project that we announced this morning, very specific but it has large applicability across the industry as we invest. Likewise, I think it was in August we spoke about how our DBR and thermal performance monitoring system really for an Arizona public utility operator has demonstrated significant value in allowing that operator to understand just how much power they are producing and putting on the grid to get paid for it. And that's like finding millions of dollars of lost change in the couch. So, we can now point to these things as part of our sales efforts. I think the quarter also shows we're successfully cross-selling and upselling and that's only gaining momentum. And that explains a lot of why being as transparent as we are but also with the level of specifics that aren't, typically the norm for press releases and that's very much helpful to us in marketing capabilities more broadly.

And I think that dovetails to my second question that in an 8-K with the SEC on May 19, you noted there were $4 million of software revenues with a 34% annual growth rate. When thinking out over a 5-year, 10-year time horizon, what would you suggest might be a sustainable rate of growth for the software per segment?

Yes, it's a great question, Shai. As you'll see in the earnings call today and that release and prior, we're very bullish on the sector. And to the extent we can invest, it's clearly modest given our resources. But our technology team, led by Bahram Meyssami as well as our engineering team led by Don Horn and his team, working together have created these tremendous value-added solutions and we've converted what has been out there from legacy on-prem which are growing scale for clients into evergreen Software-as-a-Service solutions wherever we could provide as well as creating net new solutions like we demonstrated with that August press release. So look, we're investing in it because it's high margin. It's clearly grown quite significantly and we expect that growth to continue. We obviously don't project features around specifics but this year, we're going to grow x percent next year or likewise. But we're just at the beginning of what we feel is going to be a long-term broker for this company. Had it done so 20 years ago, you can just imagine what the size of that license revenue line of business would be like but it really began six years ago deliberately as part of our turnaround thesis with the company. And we're just now beginning to see the fruits of that labor. Yes. So congrats to Bahram Meyssami and his team and to Don Horn, as they build this business out through innovative new solutions.

And then, just to keep my own expectations properly grounded; could you talk about rate limiting factors in terms of how large the total size could be very long term? What the glass ceiling might be or just the sense of where the -- where there tends to be to get it must slow down?

Well, look, if you look at our past investor decks from a couple of years back, we put very much out there what the existing served available marketers for Engineering Services, Workforce Solutions and for Technology Solutions in the nuclear power industry and adjacent sectors. And they were each over $1 billion at one point, if I recall correctly. So that's a served market. What the glass ceiling is, that's the minimum floor. So we want to grow within that. We obviously embarked on our growth thesis early as we turn around the company through inorganic growth. What you've seen, particularly in the software, this has been purely organic growth and highly high margin, highly profitable growth for the investment we put into it. We expect that to continue but from the served market, this is between Engineering Services, Workforce Solutions, technology, this is in the United States, well north of $2 billion, you can look at this investor decks. And while there was a slowdown through the coronavirus, nevertheless, the software service is accelerating in growth during the coronavirus and pandemic. So look, we're very bullish but we're also very realistic. So we're not here to show a hockey stick, to project a hockey stick. We're going to execute on the business and as we do be fully transparent what the results are and where we're headed.

And early in the call, you brought up the AspenTech and Emerson headline which is quite interesting. I actually have in front of me the July 30, 2015 press release when you were appointed CEO. And in the second paragraph, there's language that your previous positions at Aspen included VP of Design and Simulation business unit. You serve as Lead [indiscernible] development at AspenTech. So I'm curious to what degree do you think your experience with AspenTech possibly influence your vision for GSE? And to what degree there are analogs that could be studied in case studies. How far should I read into this parallel, if at all?

Well, look, it's a great question. That was a very formative part of my career which I took forward into microstrategy, Datatel, where Bahram Meyssami joined me from AspenTech. That growth journey had a very significant sale of that business all through organic prices revenue growth, back to MicroStrategy and then here. So we've delivered look, so what does that experience for me, both AspenTech and subscale MicroStrategy to call. It shows that the market for industrial applying software to solve industrial problems is a very significant market when it applies to very clear value added. What is the business problem to solve? How much is the words going to cost me to deliver it? We are doing that now at GSE and we learned that way back in the day at AspenTech applied that there, applied that and the team there is obviously doing an amazing job and have this great transaction and it's exciting to see that because they're continuing to move forward with the business. Great liquidity of that. New focus, new investment. Bahram Meyssami and I worked together at AspenTech. We're here and we also work together at Datatel. I'm very fortunate to be with him for a third tour of duty here at AspenTech and of course -- or excuse me, at the GSE. So the experience from AspenTech and Datatel clearly applies here. And we also have a Board member, Suresh Sundaram, who's really a storied career at AspenTech. So, we're honored to have had that experience and through the totality of our career supply that to GSE and then we're seeing the benefits of that today. I don't know if that has another question or not but this is a deliberate part of our strategy. And we're seeing that pay off and you see that valuation of the Emerson-AspenTech deal and just imagine us applying that to our small line of business. You get a sense of just how valuable this could be.

And the last question on my side. You brought up the small modular reactor or SMR and the NuScale relationship for 10 years. Could you and whatever degree it's appropriate, unpack unit economics? So how does growth in SMR translate to revenue at GSE? Is it per unit? Is it -- what's the metrics? And how is it sort of translate?

Yes. We don't -- obviously, we'll -- we don't make a level of transparency about specific contracts with specific customers but in general, we'll just say, how do we license our software. We license it either by user or by site, by application, by module. It's very standard in the industry. It's licensed to the extent. It could be SaaS-oriented. It SaaS with annual increases and renewals rather usually geared towards 5% or CPI plus 3.5%. So when you see CPI down pushing 5.5%, you get a sense that these ratchets get above 8%. It's very meaningful to our business. We continue to invest in the software, so that it's sticky and where the software upgrades, et cetera and security patches. So clients are highly mitigated to keep that evergreen. And then the other security applications that may be on-premise. Nuclear maybe another client -- some nuclear clients, they don't want things connected to the Internet. So it's hard to keep that connected through a SaaS paradigm but then that's when we have annual maintenance and that's paid regularly. So again, all the latest capabilities are available to the client as well as security pass to the centre.

And again, I don't know if you're able to comment but what would be some assumptions when it become material? Is there a percent of market share or number of units where this begins to really show up in the financials?

Well, I'll just say, Shai, when we started, this was a de minimis part of our business. Historically, our company had delivered IP to customers in order -- as the embedded cost of a project in order to win projects and that was upside down, particularly in 21st century. So here we are changing that paradigm. It was long overdue. We've done that and it's grown to what I'd call a material part of our business, 6%. And it's highly profitable. And so if we keep that going, you can project that on your own models that but it is quite meaningful.

Okay, thank you so much. I appreciate your time. Thank you.

Yes, man. No, thank you, Shai [ph]. We really appreciate it.

[Operator Instructions] At this time, we have no further questions. Now I'd like to turn the call back over to Mr. Kyle Loudermilk for closing remarks. Please go ahead.

Okay. Well, look, I'd like to thank everybody for joining our call. We appreciate your time and interest in GSE. We feel we have really good news to share today and we've done that as well as sharing with you the broader macro trends which are a flight regarding decarbonization, SMR advancement and our positioning for that. That's why we're very excited. We'll also be presenting at the Lytham Partners Winter 2021 Investor Conference, December 14, 16. So we do hope to focus on this call and certainly more. Please attend that and we look forward to speaking with many of you at that time. If you have any questions, don't hesitate to reach out to Adam, who's on this call for Lytham Partners and we'd be happy we'll schedule a follow-up call. And again, thank you, again, everyone. Have a great evening and thank you for joining us.

Thank you for attending today's presentation. You may now disconnect.