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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
FORM 10-Q
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended March 31, 2005
   
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ______________


Commission File Number 333-118278
 
GUNDLE/SLT ENVIRONMENTAL, INC.
(Exact name of Registrant as specified in its Charter)


Delaware
22-2731074
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)



19103 Gundle Road, Houston, Texas
77073
(Address of principal executive offices)
(Zip Code)

(Registrant's telephone number, including area code)    (281) 443-8564
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant is required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No o
 
Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act.

Yes o  No x
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
  
Outstanding at May 4, 2005
Common stock, par value $.01
  
100

GUNDLE/SLT ENVIRONMENTAL, INC.

INDEX
 

   
PAGE
     
PART I - FINANCIAL INFORMATION
     
 
ITEM 1: Financial Statements
  
     
 
Condensed Consolidated Balance Sheets as of March 31, 2005 (Unaudited) and December 31, 2004
3
     
 
Condensed Consolidated Statements of Income For the Three Months Ended March 31, 2005 and 2004(Unaudited)
4
     
 
Condensed Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2005 and 2004(Unaudited)
5
     
 
Notes to Condensed Consolidated Financial Statements
6
     
 
ITEM 2: Management's Discussion and Analysis of Results of Operations and Financial Condition
21
     
 
ITEM 3: Quantitative and Qualitative Disclosures About Market Risk
29
     
 
ITEM 4: Controls and Procedures
30
     
PART II - OTHER INFORMATION
     
 
ITEM 1: Legal Proceedings
31
 
 
  
 
ITEM 2: Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities
31
 
 
  
 
ITEM 3: Defaults Upon Senior Securities
31
     
 
ITEM 4: Submission of Matters to a Vote of Security Holders
31
     
 
ITEM 5: Other Information
31
     
 
ITEM 6: Exhibits
31
     
 
Certifications
  
 
2
 

GUNDLE/SLT ENVIRONMENTAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
 
   
MARCH 31,
2005
  
DECEMBER 31,
2004
  
   
(UNAUDITED)
      
ASSETS
           
CURRENT ASSETS:
           
CASH AND CASH EQUIVALENTS
  
$
29,101
  
$
23,716
  
ACCOUNTS RECEIVABLE, NET OF ALLOWANCE FOR BAD DEBT OF $5,827 AND $5,865
    
38,763
   
49,823
 
CONTRACTS IN PROGRESS
    
8,233
   
1,885
 
INVENTORY
    
30,456
   
35,737
 
DEFERRED INCOME TAXES
    
3,182
   
3,512
 
PREPAID EXPENSES AND OTHER
    
4,522
   
1,305
 
 
              
TOTAL CURRENT ASSETS
    
114,257
   
115,978
 
               
PROPERTY, PLANT AND EQUIPMENT, NET
    
92,811
   
96,587
 
GOODWILL
    
57,859
   
57,103
 
CUSTOMER LISTS AND OTHER INTANGIBLE ASSETS, NET
    
20,607
   
22,081
 
DEFERRED INCOME TAXES
    
12,146
   
12,180
 
DEFERRED FINANCING COSTS AND OTHER ASSETS, NET
    
13,665
   
14,170
 
               
   
$
311,345
  
$
318,099
  
               
LIABILITIES AND STOCKHOLDER'S EQUITY
              
CURRENT LIABILITIES:
              
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
  
$
41,365
  
$
39,908
  
ADVANCE BILLINGS ON CONTRACTS IN PROGRESS
    
1,154
   
1,472
 
CURRENT PORTION OF LONG-TERM DEBT
    
1,242
   
275
 
DEFERRED INCOME TAXES
    
3
   
3
 
INCOME TAXES PAYABLE
    
619
   
728
 
 
    
   
 
TOTAL CURRENT LIABILITIES
    
44,383
    
42,386
 
 
    
   
 
LONG-TERM DEBT
    
165,057
    
168,329
 
OTHER LIABILITIES
    
3,383
    
1,262
 
DEFERRED TAXES
    
28,078
    
29,406
 
MINORITY INTEREST
    
2,691
    
2,702
 
 
    
   
 
STOCKHOLDER'S EQUITY:
    
   
 
COMMON STOCK, $.01 PAR VALUE, 1,000 SHARES AUTHORIZED, 100 SHARES ISSUED
    
-
    
-
  
ADDITIONAL PAID-IN CAPITAL
    
60,629
    
60,629
 
RETAINED EARNINGS
    
3,445
    
8,304
 
ACCUMULATED OTHER COMPREHENSIVE INCOME
    
3,679
    
5,081
 
 
    
   
 
TOTAL STOCKHOLDER'S EQUITY
    
67,753
    
74,014
 
 
    
   
 
   
$
311,345
  
$
318,099
  
 
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
 
3
 
GUNDLE/SLT ENVIRONMENTAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE DATA)
(UNAUDITED)
 
     
SUCCESSOR
    
PREDECESSOR
  
     
THREE MONTHS ENDED
MARCH 31, 2005
    
THREE MONTHS ENDED
MARCH 31, 2004
  
     
 
    
(RESTATED)
  
SALES AND OPERATING REVENUE
  
$
59,664
  
$
35,649
  
COST OF PRODUCTS & SERVICES
    
52,805
   
31,156
 
 
    
   
 
GROSS PROFIT
    
6,859
   
4,493
 
 
    
   
 
 
    
   
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
8,474
   
7,518
 
EXPENSES RELATED TO CHS ACQUISITION
    
-
    
390
 
 
    
   
 
OPERATING LOSS
    
(1,615
)
  
(3,415
)
 
    
   
 
OTHER (INCOME) EXPENSES:
    
   
 
INTEREST EXPENSE
    
4,693
   
1,519
 
INTEREST INCOME
    
(204
)
  
(137
)
FOREIGN EXCHANGE LOSS
    
21
   
215
 
MINORITY INTEREST
    
(10
)
  
11
 
OTHER (INCOME) EXPENSE, NET
    
50
   
(144
)
 
    
   
 
LOSS BEFORE INCOME TAXES
    
(6,165
)
  
(4,879
)
 
    
   
 
INCOME TAX BENEFIT
    
(1,306
)
  
(2,522
)
 
    
   
 
NET LOSS
  
$
(4,859
)
$
(2,357
)