John V. Moran
Chief Executive Officer


                  GSE Systems Announces Second Quarter Results

Columbia,  Maryland,  August 9, 2005-- GSE Systems,  Inc.  (GSE) (Amex - GVP), a
leading global  provider of real-time  simulation and training  solutions to the
power,  process,  manufacturing and Government sectors,  reported second quarter
2005 results today.  Total  contract  revenue for the three and six months ended
June 30, 2005 was $6.7 million and $13.0 million, respectively. This compares to
$7.6 million and $15.2 million for the comparable periods in 2004, respectively.
The  Company's  net loss was  $556,000 or $.06 per  diluted  share in the second
quarter  2005 and the net loss for the six months  ended June 30,  2005 was $1.6
million or $.18 per diluted share.  This compares with net income of $276,000 or
$.03 per diluted share in the second  quarter 2004 and net income of $340,000 or
$.04 per diluted share in the six months ended June 30, 2004.

As compared to the Company's  first quarter 2005 results,  revenue for the three
months ended June 30, 2005 increased 6.7% and net loss decreased by 46.6%.

The Company's  revenue and profitability in 2005 have been impacted by the lower
volume  of  orders   logged  in  2004  coupled  with  the  delay  of  two  large
international simulator contracts. In addition, the Company's efforts to broaden
its  simulation  business  base  continued  in 2005.  Examples of these  efforts
include the following:

     *    The Company spent  $345,000 in the first half of 2005  developing  its
          military  simulation  business.   In  the  second  quarter  2005,  GSE
          qualified as a prime contractor on the US Navy's Seaport-e procurement
          program  for  all  engineering,   program   management  and  financial
          services.  This allows GSE to bid on a broad range of simulation  task
          orders as they are released by the Navy.  In addition,  the Company is
          in final  negotiations with a provider of command and control software
          that is installed in over 150 Homeland Security  Emergency  Operations
          Centers  (EOC).  GSE's  Real-time  Emergency  Management   Interactive
          Training  System  (REMITS) will be integrated  with their  software to
          simulate  emergency  situations and enable EOC staffs to train without
          requiring human participation in the field.

     *    The Company spent $309,000 in the first six months of 2005  developing
          its new simulator  training center  business.  The business focuses on
          the construction of turn-key simulation training centers in developing
          parts of the world.  GSE would  provide the  simulators as well as the
          training content for these centers.

     *    Revenue from fossil power plant training  simulator projects increased
          39.8%  in the six  months  ended  June  30,  2005 to $1.5  million  as
          compared to the same period in 2004.  The Company spent $70,000 in the
          first six months of 2005 on business development efforts in the fossil
          power area.

Other highlights for the quarter also included the following:  

     -    On June 20, 2005, the Board of Directors of GP Strategies Corporation,
          which  owns  57% of the  Company's  common  stock,  approved  plans to
          spin-off  its  interest  in GSE  through a special  dividend to the GP
          Strategies' stockholders.  The GP Strategies stockholders will receive
          in the spin-off a pro-rata  share of the Company's  common stock based
          on the  number  of shares of GP  Strategies  common  stock and Class B
          stock held on the record date,  which will be  determined  on a future
          date.   The  Company  has  filed  with  the  Securities  and  Exchange
          Commission  a  registration  statement  relating  to the shares of the
          Company  to be  distributed  by GP  Strategies  in the  spin-off.  The
          Company  anticipates that the record date will be set and the spin-off
          will occur  shortly  after such  registration  statement  is  declared
     -    The Company developed an important financial relationship with Dolphin
          Equity Partners.
     -    GSE was  selected  as the  simulator  vendor for the novel  Pebble Bed
          Modular   Nuclear   Reactor   System.   -  The   Company  was  awarded
          approximately  $1  million  in  contracts  in the  Process  Simulation

John V. Moran,  GSE's  Chief  Executive  Officer  said,  "I am pleased  that the
Company's  second quarter 2005 revenue has increased from the first quarter 2005
revenue,  and that second quarter 2005 net loss decreased from the first quarter
2005. Our project margin also improved.  We anticipate these trends to continue.
We are also seeing  positive  signs that our  business  development  efforts are
beginning to pay off."

The Company plans to schedule an investor  conference call after the anticipated
spin-off has been completed.

GSE Systems,  Inc. provides  real-time  simulation and training  solutions.  The
company has over three decades of  experience,  over 250  applications,  and 100
customers in more than 25  countries.  Our  software,  hardware  and  integrated
training solutions leverage proven  technologies to deliver real-world  business
advantages  to  the  energy,  process,   manufacturing  and  government  sectors
worldwide.  GSE  Systems is  headquartered  in  Columbia,  Maryland.  Our global
locations include offices in Georgia, Sweden, Japan and China. Information about
GSE Systems is available via the Internet at

This news release  contains  forward-looking  statements  that involve risks and
uncertainties.  We use words such as "expects",  "intends" and  "anticipates" to
indicate  forward looking  statements.  The actual future results of GSE Systems
may differ materially due to a number of factors,  including but not limited to,
delays  in  introduction  of  products  or  enhancements,  size  and  timing  of
individual  orders,  rapid  technological  changes,  market  acceptance  of  new
products and  competition.  These and other factors are more fully  discussed in
the Company's  annual report on Form 10-K for the year ended  December 31, 2004,
periodic  reports and  registration  statements  filed with the  Securities  and
Exchange Commission.

If any one or more of  these  expectations  and  assumptions  proves  incorrect,
actual  results will likely differ  materially  from those  contemplated  by the
forward-looking  statements.  Even  if  all  of the  foregoing  assumptions  and
expectations  prove  correct,  actual results may still differ  materially  from
those expressed in the forward-looking  statements as a result of factors we may
not  anticipate  or that may be beyond our control.  While we cannot  assess the
future  impact  that  any of  these  differences  could  have  on our  business,
financial condition, results of operations and cash flows or the market price of
shares of our common stock,  the  differences  could be  significant.  We do not
undertake to update any forward-looking statements made by us.


         (in thousands, except per share data)


                                                              Three months ended                Six months ended
                                                                    June 30,                         June 30,
                                                           -----------------------------     ----------------------------
                                                              2005            2004             2005              2004
                                                           -------------- --------------     ------------- --------------

Contract revenue                                            $       6,717    $     7,597       $    13,010    $    15,158
Cost of revenue                                                     5,077          5,760            10,315         11,544
                                                           -------------- --------------     ------------- --------------
Gross profit                                                        1,640          1,837             2,695          3,614

Operating expenses                                                  2,014          1,504             4,092          3,057
                                                           -------------- --------------     ------------- --------------
Operating income (loss)                                             (374)            333           (1,397)            557

Other expense, net                                                  (157)              -             (225)          (143)
                                                           -------------- --------------     ------------- --------------
Income (loss) before provision (benefit) for income taxes           (531)            333           (1,622)            414

Provision (benefit) for income taxes                                   25             57              (24)             74
                                                           -------------- --------------     ------------- --------------
Net income (loss)                                           $       (556)    $       276       $   (1,598)    $       340
                                                           ============== ==============     ============= ==============

Basic earnings (loss) per common share:                     $      (0.06)    $      0.03       $    (0.18)    $      0.04
                                                           ============== ==============     ============= ==============
Weighted average shares outstanding - Basic                     8,999,706      8,949,706         8,998,049      8,949,706
                                                           ============== ==============     ============= ==============
Diluted earnings (loss) per common share                    $      (0.06)    $      0.03       $    (0.18)         $ 0.04
                                                           ============== ==============     ============= ==============
Weighted average shares outstanding - Diluted                   8,999,706      9,013,608         8,998,049      9,015,370
                                                           ============== ==============     ============= ==============


Selected balance sheet data
                                     June 30, 2005            December 31, 2004
                                  -------------------      -------------------------
Cash and cash equivalents          $          249               $        868
Current assets                             10,746                     10,439
Total assets                               14,388                     14,228

Current liabilities                $        7,772               $      7,781
Long-term liabilities                       2,510                        502
Stockholders' equity                        4,106                      5,945