Gundle/SLT Environmental, Inc. Announces 2001 First Quarter Results

Apr 25, 2001, 01:00 ET from Gundle/SLT Environmental, Inc.

    HOUSTON, April 25 /PRNewswire Interactive News Release/ -- Gundle/SLT
 Environmental, Inc. (NYSE:   GSE) today announced a net loss of $2.8 million, or
 25 cents per share, for the quarter ended March 31, 2001, compared with a net
 loss of $1.9 million, or 15 cents per share, for the first quarter of 2000.
 Revenues for the first quarter of 2001 were $23.5 million compared with
 $29.9 million for the first quarter of last year.
     "This is traditionally a loss quarter because of the seasonal nature of
 our business.  While weather-related delays in the U.S. had a negative effect
 on orders, the reduced capital expenditures of major waste management
 companies had the most impact on our quarter," said Samir Badawi, chairman,
 president and chief executive officer.  Badawi said first quarter orders
 decreased 27% from the same period last year, with the U.S. experiencing a
 33% decline, and foreign experiencing a 15% decline.  Orders from major waste
 management companies, down 27%, accounted for the largest part of the decline.
     The dollar value of GSE's backlog at March 31, 2001 was $54.1 million
 compared with $80.1 million at March 31, 2000.  Backlog was down in both U.S.
 and foreign markets.
     GSE recorded gross profit of $2.1 million, or 8.8% of sales, down 45% from
 gross profit of $3.7 million in the first quarter last year.  "Decreased
 volume was the primary cause of lower gross margins," said Badawi.  "Shipments
 were down 16%, and we had an increase of $1.0 million in unabsorbed production
 and installation costs, again due to lower sales volumes in the U.S.  Gross
 profit in the first quarter was also impacted by $300,000 in start-up costs at
 our nonwoven facility in South Carolina."
     In addition to reduced production and installation costs, selling, general
 and administrative expenses were slightly lower in the most recent quarter
 before the impact of expansion programs in Thailand, and Kingstree, South
 Carolina.  Interest expense decreased by $200,000 from the same period last
 year due to lower debt and to the capitalization of $100,000 in interest for
 the Kingstree expansion.  Badawi said GSE would continue to control and reduce
 its operating costs.
     "One of the bright spots in our quarter was the start-up of our nonwoven
 line on time and within budget.  The facility will begin initial shipments of
 geotextiles this month for internal use in our geocomposite lining products.
 Shortly, we will begin serving other nonwoven markets and achieve the
 strategic diversity we seek," said Badawi.
     Badawi added that in an independent study of competitor volumes for 2000,
 it was concluded that the lining market declined by about 10% from the 1999
 levels both in the U.S. and worldwide.  "We now believe that the U.S. market
 will decrease again in 2001 based on budget reductions at major waste
 management companies.  The projected revenue for the coming quarter and the
 year will be down by about 5% to 10% from last year," said Badawi.
 "Consequently, GSE's net profit for the coming quarter and the year may be
 reduced by about 50%.  Meanwhile, we are continuing to reduce our expenses and
 to manage the spread between raw material costs and our product selling
 prices, and we plan to make further overhead reductions to be well positioned
 in that regard as we enter 2002."
 
     Gundle/SLT Environmental, Inc. headquartered in Houston, is a global
 manufacturer and marketer of geosynthetic lining solutions, products and
 services used in the containment and management of solids, liquids and gases
 for organizations engaged in waste management, mining, water and wastewater
 treatment, and aquaculture.  GSE has also diversified its product line to
 include geosynthetic textiles, and premium nonwoven fabrics that are sold in a
 variety of markets.
     The statements regarding future financial performance and results and the
 other statements which are not historical facts contained in this release are
 forward-looking statements that involve risks and uncertainties, including,
 but not limited to, market factors, the worldwide manufacturing capacity in
 the industry, raw material pricing and supply, and other factors detailed in
 the company's Securities and Exchange Commission filings.
 
 
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
                             (in thousands except per share data)
 
                                                      QUARTER ENDED
                                                        MARCH 31,
                                                 2001              2000
 
            Sales                              $23,544           $29,881
            Cost of Sales                       21,476            26,139
 
            Gross Profit                         2,068             3,742
                 % of Sales                        8.8 %            12.5 %
 
            Selling, General and
                 Administrative Expenses         6,273             6,200
            Amortization of Goodwill               332               341
 
            Operating Income (Loss)             (4,537)           (2,799)
 
            Interest Expense                       359               611
            Interest Income                       (158)             (278)
            Other (Income) Expense                  60               110
 
            Income (Loss) Before Income Tax     (4,798)           (3,242)
            Provision for Income Tax            (2,015)           (1,361)
 
            Net Income (Loss)                  ($2,783)          ($1,881)
 
            Earnings (Loss) Per Common Share    ($0.25)           ($0.15)
 
            Weighted Average Common
                 Shares Outstanding             11,050            12,633
 
 
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                     (in thousands)
                                       (unaudited)
 
                                                     MARCH 31,         DEC. 31,
                         ASSETS                        2001              2000
 
          Current Assets:
              Cash and Cash Equivalents              $14,268           $11,270
              Accounts Receivable, Net                28,873            50,607
              Contracts in Progress                    2,467             2,525
              Inventory                               27,214            17,830
              Other Current Assets                     6,738             6,150
                   Total Current Assets               79,560            88,382
 
          Property, Plant and Equipment, Net          35,916            32,689
          Excess of Purchase Price Over
           Fair Value of Assets Acquired, Net         23,143            23,638
          Other Assets                                 3,680             3,854
 
                                                    $142,299          $148,563
 
              LIABILITIES AND STOCKHOLDERS'
                         EQUITY
 
          Current Liabilities:
              Accounts Payable and Accrued
               Liabilities                           $28,149           $27,592
              Advance Billings on Contracts            1,526             1,722
              Current Portion of Long-term Debt        5,328             5,341
              Short-term Debt                          1,654               534
              Income Taxes Payable                    (2,055)            1,005
              Other Current Liabilities                  640               239
                   Total Current Liabilities          35,242            36,433
 
          Long-term Debt                              20,558            20,655
          Other Liabilities                            1,861             2,167
          Stockholders' Equity                        84,638            89,308
 
                                                    $142,299          $148,563
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X83425653
 
 

SOURCE Gundle/SLT Environmental, Inc.
    HOUSTON, April 25 /PRNewswire Interactive News Release/ -- Gundle/SLT
 Environmental, Inc. (NYSE:   GSE) today announced a net loss of $2.8 million, or
 25 cents per share, for the quarter ended March 31, 2001, compared with a net
 loss of $1.9 million, or 15 cents per share, for the first quarter of 2000.
 Revenues for the first quarter of 2001 were $23.5 million compared with
 $29.9 million for the first quarter of last year.
     "This is traditionally a loss quarter because of the seasonal nature of
 our business.  While weather-related delays in the U.S. had a negative effect
 on orders, the reduced capital expenditures of major waste management
 companies had the most impact on our quarter," said Samir Badawi, chairman,
 president and chief executive officer.  Badawi said first quarter orders
 decreased 27% from the same period last year, with the U.S. experiencing a
 33% decline, and foreign experiencing a 15% decline.  Orders from major waste
 management companies, down 27%, accounted for the largest part of the decline.
     The dollar value of GSE's backlog at March 31, 2001 was $54.1 million
 compared with $80.1 million at March 31, 2000.  Backlog was down in both U.S.
 and foreign markets.
     GSE recorded gross profit of $2.1 million, or 8.8% of sales, down 45% from
 gross profit of $3.7 million in the first quarter last year.  "Decreased
 volume was the primary cause of lower gross margins," said Badawi.  "Shipments
 were down 16%, and we had an increase of $1.0 million in unabsorbed production
 and installation costs, again due to lower sales volumes in the U.S.  Gross
 profit in the first quarter was also impacted by $300,000 in start-up costs at
 our nonwoven facility in South Carolina."
     In addition to reduced production and installation costs, selling, general
 and administrative expenses were slightly lower in the most recent quarter
 before the impact of expansion programs in Thailand, and Kingstree, South
 Carolina.  Interest expense decreased by $200,000 from the same period last
 year due to lower debt and to the capitalization of $100,000 in interest for
 the Kingstree expansion.  Badawi said GSE would continue to control and reduce
 its operating costs.
     "One of the bright spots in our quarter was the start-up of our nonwoven
 line on time and within budget.  The facility will begin initial shipments of
 geotextiles this month for internal use in our geocomposite lining products.
 Shortly, we will begin serving other nonwoven markets and achieve the
 strategic diversity we seek," said Badawi.
     Badawi added that in an independent study of competitor volumes for 2000,
 it was concluded that the lining market declined by about 10% from the 1999
 levels both in the U.S. and worldwide.  "We now believe that the U.S. market
 will decrease again in 2001 based on budget reductions at major waste
 management companies.  The projected revenue for the coming quarter and the
 year will be down by about 5% to 10% from last year," said Badawi.
 "Consequently, GSE's net profit for the coming quarter and the year may be
 reduced by about 50%.  Meanwhile, we are continuing to reduce our expenses and
 to manage the spread between raw material costs and our product selling
 prices, and we plan to make further overhead reductions to be well positioned
 in that regard as we enter 2002."
 
     Gundle/SLT Environmental, Inc. headquartered in Houston, is a global
 manufacturer and marketer of geosynthetic lining solutions, products and
 services used in the containment and management of solids, liquids and gases
 for organizations engaged in waste management, mining, water and wastewater
 treatment, and aquaculture.  GSE has also diversified its product line to
 include geosynthetic textiles, and premium nonwoven fabrics that are sold in a
 variety of markets.
     The statements regarding future financial performance and results and the
 other statements which are not historical facts contained in this release are
 forward-looking statements that involve risks and uncertainties, including,
 but not limited to, market factors, the worldwide manufacturing capacity in
 the industry, raw material pricing and supply, and other factors detailed in
 the company's Securities and Exchange Commission filings.
 
 
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
                             (in thousands except per share data)
 
                                                      QUARTER ENDED
                                                        MARCH 31,
                                                 2001              2000
 
            Sales                              $23,544           $29,881
            Cost of Sales                       21,476            26,139
 
            Gross Profit                         2,068             3,742
                 % of Sales                        8.8 %            12.5 %
 
            Selling, General and
                 Administrative Expenses         6,273             6,200
            Amortization of Goodwill               332               341
 
            Operating Income (Loss)             (4,537)           (2,799)
 
            Interest Expense                       359               611
            Interest Income                       (158)             (278)
            Other (Income) Expense                  60               110
 
            Income (Loss) Before Income Tax     (4,798)           (3,242)
            Provision for Income Tax            (2,015)           (1,361)
 
            Net Income (Loss)                  ($2,783)          ($1,881)
 
            Earnings (Loss) Per Common Share    ($0.25)           ($0.15)
 
            Weighted Average Common
                 Shares Outstanding             11,050            12,633
 
 
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                     (in thousands)
                                       (unaudited)
 
                                                     MARCH 31,         DEC. 31,
                         ASSETS                        2001              2000
 
          Current Assets:
              Cash and Cash Equivalents              $14,268           $11,270
              Accounts Receivable, Net                28,873            50,607
              Contracts in Progress                    2,467             2,525
              Inventory                               27,214            17,830
              Other Current Assets                     6,738             6,150
                   Total Current Assets               79,560            88,382
 
          Property, Plant and Equipment, Net          35,916            32,689
          Excess of Purchase Price Over
           Fair Value of Assets Acquired, Net         23,143            23,638
          Other Assets                                 3,680             3,854
 
                                                    $142,299          $148,563
 
              LIABILITIES AND STOCKHOLDERS'
                         EQUITY
 
          Current Liabilities:
              Accounts Payable and Accrued
               Liabilities                           $28,149           $27,592
              Advance Billings on Contracts            1,526             1,722
              Current Portion of Long-term Debt        5,328             5,341
              Short-term Debt                          1,654               534
              Income Taxes Payable                    (2,055)            1,005
              Other Current Liabilities                  640               239
                   Total Current Liabilities          35,242            36,433
 
          Long-term Debt                              20,558            20,655
          Other Liabilities                            1,861             2,167
          Stockholders' Equity                        84,638            89,308
 
                                                    $142,299          $148,563
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X83425653
 
 SOURCE  Gundle/SLT Environmental, Inc.