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 June 30, 2003
| ¨ | 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 1-9307
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) | |
(281) 443-8564
(Registrant’s telephone number, including area code)
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 ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the close of the latest practicable date.
| Class |
Outstanding at July 21, 2003 | |
| Common stock, par value $.01 |
11,515,907 |
GUNDLE/SLT ENVIRONMENTAL, INC.
INDEX
| PAGE | ||||
| PART I - FINANCIAL INFORMATION |
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| ITEM 1: Financial Statements |
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| Condensed Consolidated Balance Sheets as of June 30, 2003 (Unaudited) and December 31, 2002 |
3 | |||
| 4 | ||||
| Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2003 and 2002 (Unaudited) |
5 | |||
| 6 | ||||
| ITEM 2: |
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| Management’s Discussion and Analysis of Results of Operations and Financial Condition |
11 | |||
| ITEM 3: |
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| 17 | ||||
| ITEM 4: |
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| 17 | ||||
| PART II - OTHER INFORMATION |
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| ITEM 4: Submission of Matters to a vote |
17 | |||
| ITEM 6: Exhibits and Reports on Form 8-K |
18 | |||
| 20 | ||||
2
GUNDLE/SLT ENVIRONMENTAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
| JUNE 30 2003 |
DECEMBER 31, 2002 |
|||||||
| (UNAUDITED) | ||||||||
| ASSETS |
||||||||
| CURRENT ASSETS: |
||||||||
| CASH AND CASH EQUIVALENTS |
$ | 15,483 | $ | 42,264 | ||||
| ACCOUNTS RECEIVABLE, NET |
65,364 | 55,715 | ||||||
| CONTRACTS IN PROGRESS |
8,102 | 2,043 | ||||||
| INVENTORY |
32,077 | 27,352 | ||||||
| DEFERRED INCOME TAXES |
8,109 | 9,366 | ||||||
| PREPAID EXPENSES AND OTHER |
6,580 | 5,260 | ||||||
| TOTAL CURRENT ASSETS |
135,715 | 142,000 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET |
33,988 | 33,011 | ||||||
| EXCESS OF PURCHASE PRICE OVER FAIR VALUE OF NET ASSETS ACQUIRED, NET |
23,937 | 22,529 | ||||||
| DEFERRED INCOME TAXES |
1,403 | 545 | ||||||
| RESTRICTED CASH |
14,731 | 0 | ||||||
| OTHER ASSETS |
2,073 | 4,225 | ||||||
| $ | 211,847 | $ | 202,310 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES: |
||||||||
| ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
$ | 45,100 | $ | 37,920 | ||||
| ADVANCE BILLINGS ON CONTRACTS IN PROGRESS |
4,345 | 5,173 | ||||||
| SHORT-TERM DEBT |
667 | 0 | ||||||
| CURRENT PORTION OF LONG-TERM DEBT |
4,693 | 4,690 | ||||||
| INCOME TAXES PAYABLE |
573 | 1,952 | ||||||
| TOTAL CURRENT LIABILITIES |
55,378 | 49,735 | ||||||
| LONG-TERM DEBT |
14,321 | 16,912 | ||||||
| DEFERRED INCOME TAXES |
67 | 252 | ||||||
| OTHER LIABILITIES |
1,682 | 1,366 | ||||||
| MINORITY INTEREST |
1,142 | 1,614 | ||||||
| STOCKHOLDERS’ EQUITY: |
||||||||
| PREFERRED STOCK, $1.00 PAR VALUE, 1,000,000 SHARES AUTHORIZED, NO SHARES ISSUED OR OUTSTANDING |
— | — | ||||||
| COMMON STOCK, $.01 PAR VALUE, 30,000,000 SHARES AUTHORIZED, 18,582,168 AND 18,437,156 SHARES ISSUED |
186 | 184 | ||||||
| ADDITIONAL PAID-IN CAPITAL |
72,018 | 70,763 | ||||||
| RETAINED EARNINGS |
104,140 | 99,149 | ||||||
| ACCUMULATED OTHER COMPREHENSIVE INCOME |
91 | (487 | ) | |||||
| 176,435 | 169,609 | |||||||
| TREASURY STOCK AT COST, 7,066,261 and 7,066,261 SHARES |
(37,178 | ) | (37,178 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY |
139,257 | 132,431 | ||||||
| $ | 211,847 | $ | 202,310 | |||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
GUNDLE/SLT ENVIRONMENTAL, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE DATA)
(UNAUDITED)
| THREE MONTHS ENDED JUNE 30 |
SIX MONTHS ENDED JUNE 30 |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| SALES AND OPERATING REVENUE |
$ | 86,881 | $ | 81,932 | $ | 126,000 | $ | 120,662 | ||||||||
| COST OF PRODUCTS & SERVICES |
67,290 | 62,448 | 101,559 | 95,057 | ||||||||||||
| GROSS PROFIT |
19,591 | 19,484 | 24,441 | 25,605 | ||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
7,075 | 7,834 | 14,716 | 15,193 | ||||||||||||
| COSTS RELATED TO THE SERROT ACQUISITION |
17 | 1,096 | 90 | 2,006 | ||||||||||||
| OPERATING INCOME |
12,499 | 10,554 | 9,635 | 8,406 | ||||||||||||
| OTHER (INCOME) EXPENSES: |
||||||||||||||||
| INTEREST EXPENSE |
714 | 780 | 1,358 | 1,433 | ||||||||||||
| INTEREST INCOME |
(149 | ) | (63 | ) | (251 | ) | (134 | ) | ||||||||
| OTHER (INCOME) EXPENSE, NET |
(284 | ) | 268 | (997 | ) | 285 | ||||||||||
| LOSS ON EXTINQUISHMENT OF DEBT |
0 | 0 | 0 | 1,278 | ||||||||||||
| MINORITY INTEREST |
116 | 291 | 66 | 286 | ||||||||||||
| INCOME BEFORE INCOME TAXES |
12,102 | 9,278 | 9,459 | 5,258 | ||||||||||||
| INCOME TAX PROVISION |
4,236 | 3,896 | 3,310 | 2,209 | ||||||||||||
| NET INCOME BEFORE EXTRAORDINARY ITEM |
7,866 | 5,382 | 6,149 | 3,049 | ||||||||||||
| EXTRAORDINARY GAIN (LOSS) - SERROT ACQUISITION |
0 | (328 | ) | 0 | 24,299 | |||||||||||
| NET INCOME |
$ | 7,866 | $ | 5,054 | $ | 6,149 | $ | 27,348 | ||||||||
| BASIC EARNINGS (LOSS) PER SHARE |
||||||||||||||||
| NET INCOME BEFORE EXTRAORDINARY ITEM |
0.68 | 0.48 | 0.54 | 0.27 | ||||||||||||
| EXTRAORDINARY ITEM |
0.00 | (0.03 | ) | 0.00 | 2.19 | |||||||||||
| NET INCOME PER SHARE |
$ | 0.68 | $ | 0.45 | $ | 0.54 | $ | 2.46 | ||||||||
| DILUTED EARNINGS (LOSS) PER SHARE |
||||||||||||||||
| NET INCOME BEFORE EXTRAORDINARY ITEM |
0.65 | 0.46 | 0.51 | 0.27 | ||||||||||||
| EXTRAORDINARY ITEM |
0.00 | (0.03 | ) | 0.00 | 2.11 | |||||||||||
| NET INCOME PER SHARE |
$ | 0.65 | $ | 0.43 | $ | 0.51 | $ | 2.38 | ||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
||||||||||||||||
| BASIC |
11,500 | 11,157 | 11,462 | 11,108 | ||||||||||||
| DILUTED |
12,081 | 11,639 | 12,000 | 11,505 | ||||||||||||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
GUNDLE/SLT ENVIRONMENTAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
| SIX MONTHS ENDED JUNE 30 |
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| 2003 |
2002 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| NET INCOME |
$ | 6,149 | $ | 27,348 | ||||
| ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: |
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| DEPRECIATION |
4,434 | 3,779 | ||||||
| AMORTIZATION |
340 | 355 | ||||||
| DEFERRED INCOME TAXES |
236 | 3,280 | ||||||
| MINORITY INTEREST |
66 | 286 | ||||||
| GAIN ON SALE OF ASSETS |
(584 | ) | (15 | ) | ||||
| GAIN ON PURCHASE OF SERROT |
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