HOUSTON, Feb. 13 /PRNewswire-First Call/ — Gundle/SLT Environmental, Inc.
(NYSE: GSE) today announced earnings of $550,000, or $.05 per share, for the quarter ended December 31, 2001, compared to a net loss of $600,000, or $.05 per share, for the same period in 2000. Revenues for the fourth quarter of 2001 were $45.5 million, compared to $44.1 million for the fourth quarter of 2000.
For the year ended December 31, 2001, the company recorded net income of $1.4 million, or $.12 per share, compared to $3.6 million, or $.31 per share for the 2000 fiscal year. Weighted average shares for 2001 were 858,000 less than in 2000 due to the company’s repurchase of shares during the year. Revenues for fiscal 2001 were $173.4 million compared to $191.3 million in 2000. Backlog at December 31, 2001 was $32 million, up from $30 million at the end of 2000. The increase in backlog is primarily in the U.S. operation, due to an increase in fourth-quarter orders from the dealer network.
Samir T. Badawi, chairman, president and chief executive officer, said, "We were very pleased with fourth quarter profitability which marked the first profitable year-end quarter for GSE in three years. This was due to an improved gross margin for the three months, which was 17.4% compared to 13.7% last year. We also made improvement in SG&A as a percent of sales, which dropped to 13% in the most recent quarter from 14.5% percent a year ago." Badawi said fourth quarter foreign revenues increased 18%, and U.S. revenues were down 6%.
"Even though we had a strong second half, our results for the year 2001 did not meet our expectations," said Badawi, citing a decline of $18 million, or 9%, in year-to-year revenue. Badawi said the decline consisted of foreign currency valuations, which reduced revenues by $2.5 million; a 5% decline in pounds shipped, which accounted for another $7 million; and a reduced amount of product sold with installation services, which reduced service revenue by approximately $10 million. One customer accounted for about $5 million of the service revenue decline, while the remainder represented a strategic shift to dealer-originated municipal sales to improve profits.
Gross margin for the 12 months was 16.6%, down from 17.0% in 2000, a decline of $3.8 million in gross profit. The decline was due to foreign exchange rates, the reduction in volume, and the start-up of the Kingstree nonwoven business.
"Our balance sheet remains strong," said Badawi. Long-term debt stood at $15.4 million at December 31, 2001 versus $20.7 million at December 31, 2000. Debt to total capitalization was 14.5% at December 31, 2001, compared to 18.8% at the end of 2000. "Our traditionally strong financial position was a key factor in positioning us for 2002 and played a major role in accomplishing the acquisition of Serrot International earlier this month," said Badawi. "The Serrot acquisition is perhaps the single most significant event in GSE’s history. It transforms the company into one with true critical mass and global capability, and enables us to provide the service and efficiencies demanded by a customer base that has changed dramatically in recent years. "In summary, the Serrot acquisition is expected to accomplish the following for GSE: Add approximately $25 million in equity to the balance sheet; almost double the size of our company, from $173 million in revenues to more than $300 million; enable a truly right-sized organization to fully utilize its combined capacity; increase shareholder value, not only from the standpoint of equity, but increased profitability from synergistic savings estimated to be approximately 25 million dollars," said Badawi. GSE announced the completion of the acquisition of Serrot International, Inc. on February 5, 2002.
A former unit of Waste Management, Inc., Serrot is also an international provider of geomembrane liner systems used in landfills, mining and industrial applications. In connection with the acquisition, GSE has entered into a 5-year contract to supply Waste Management with goods and services. Gundle/SLT Environmental, Inc. is a world leader in providing geosynthetic lining solutions, products and services to satisfy the needs of domestic and international public and private companies engaged in waste management, wastewater treatment, mining, aquaculture and other industrial activities.
This press release contains certain forward-looking statements as such term is defined in the Private Securities Litigation Reform Act of 1995. When used in this press release, the words, "believe," "expect," "intend" and words or phrases of similar import, as they relate to GSE or its management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, among other things, competitive market factors, worldwide manufacturing capacity in the industry, general economic conditions around the world, raw material pricing and supply, governmental regulation and supervision, seasonality, distribution networks, and other factors described more fully in GSE’s reports filed with the Securities and Exchange Commission. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those currently believed, expected or intended.
