The company’s backlog improved during the third quarter to $38 million as order flow gained in the quarter primarily within the Engineering performance division. There was an improvement from $34 million at the end of Q2 of ’23 and higher than the $32 million level a year ago. Performance Engineering segment backlog was $31.4 million at the end of the of Q3 2023 compared to $26.9 million at the end of Q2 2023. It also improved when compared to the $26.9 million in the same period a year ago. Workforce Solutions division was $6.2 million at the end of the third quarter of ’23 compared to $7.5 million at the end of Q2 of this year, and then that compares to $5.6 million at the end of Q3 of a year ago. Moving our discussion to the company’s balance sheet.
We exited the third quarter with $2 million in cash, which compares to $1.8 million at the end of the second quarter of 2023. The cash levels do not include restricted cash of $1.5 million which is to secure [4 letters] of credit with various customers totaling $1.1 million and $400,000 to secure our corporate credit card program. We continue to make payments on our convertible debt secured with [Lind] and anticipate full repayment by March of 2025. We continue to review on a monthly basis the determination on whether to repay cash stock or a combination of both. And given recent improvements in the business, we’ve been paying in cash in the past 5 months. On October 30, we implemented the reverse stock split and have subsequently traded above the minimum stock price threshold for more than 10 consecutive days.
And as the company previously disclosed in its Form 8-K filed on November 3, the company expected to regain compliance with the NASDAQ listing standards on November 10. The company is now in compliance with all applicable NASDAQ listing standards, and we received a confirmatory letter to that effect from NASDAQ this afternoon. While we are still working in a challenging environment, we continue to examine every expenditure and will reduce costs where we can to preserve our cash position. That said, we have reduced our expenditures by roughly $1 million per quarter as compared to 1 year ago. And I’ll reiterate that while there is always some quarterly shifts of costs, lowering our quarterly expenses to around $3.4 million. We are optimistic that the company can book additional orders in the coming months, which will improve our utilization and result in improved cash flow.
I’ll now turn the conversation back to Kyle.
Kyle Loudermilk: Thank you, Emmett. To summarize, the third quarter demonstrated improvements to the business as we removed additional costs, and we’re able to drive better efficiencies through our engineering division. We’re laser-focused on winning more business where we can, and this has been seen in recent wins we announced during the fourth quarter. We’re cautiously optimistic about the remainder of the year in the longer term. While we’re doing what we can during this continued lull in industry spend, we remain positive that in the longer term that the nuclear industry is undergoing a long-term resurgence for the reasons we outlined on this call. There are 3 key drivers to this such as the future — for the future of the nuclear industry.
One, the need for a stable grid; two, the drive towards energy security and independence; and three, and not least, the decarbonization of the power sector. Given GSE’s unique positioning as a heavily tech-enabled provider of the essential services to the nuclear power industry, we remain optimistic in our opportunity to create substantial long-term value. With that said, Adam, please proceed with the question-and-answer session. Or operator, first, you may wish to open it up to anyone on the call. And if we don’t, Adam, you can ask some questions.
Operator: [Operator Instructions] At this time, we are showing no questions. Would management like to.
Adam Lowensteiner: Dave, it’s Adam Lowensteiner from Lytham Partners. I’ll ask a few questions in the meantime. Kyle, order flow improved nicely in the quarter. Can you discuss the quality of your orders and how your margins are improving as a result?
Kyle Loudermilk: Yes. Good question, Adam. Thank you. Look, the order flow has really improved on the engineering side. We have a great team leading the 3 lines of business: simulation, we have our design and analysis group, and we have our programs and performance. And we’ve seen very solid quarter across the board, including winning new logos, such as the uranium enrichment provider which is a mission-critical program for the United States to produce its own HALEU and light-enriched uranium. And that’s been a great relationship that keeps growing. Likewise, we recently announced these 2 wins in — to be — provide engineering services to 2 significant nuclear power operators in the state of Texas. And again, we feel this is just the momentum is building.
So that order flow has been solid because it’s on the engineering side, that explains our improvement in gross margin. Engineering margin is much higher than the Workforce Solutions side of the house. And so we expect that trend to continue.
Adam Lowensteiner: You’ve had a very good diversification of services provided on the engineering side of the business. This shows some great depth at GSE and as well as the industry. How many more types of these contracts exist? Could potentially every nuclear plant operator have a need for the various service wins that you’ve been awarded recently? .
Kyle Loudermilk: Yes. Another good question, Adam. The fact of the matter is we are aligned to the key drivers as a company. GSE is a purpose-built company that is aligned to the critical drivers that are leading the nuclear plant operators to make investments in extending the lifetime of the plants. And therefore, also applying for lifetime operating license extension. So in extending lifetime of the plants through operating license extensions and investing in their plants to produce more power from those plants over time versus building new nuclear power plants. Those are 2 things that we’re already aligned to as a business. We really took advantage of what we could during COVID to make sure we put in commercial infrastructure throughout new customers and existing customers.
