UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 9, 2012
GSE Holding, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-35382 77-0619069
(Commission File Number) (IRS Employer Identification No.)
19103 Gundle Road, Houston, TX 77073
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(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (281) 443-8564
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On May 9, 2012, GSE Holding, Inc. issued a press release providing information regarding earnings for the fiscal quarter ended March 31, 2012. A copy of the press release is attached hereto as Exhibit 99.1.
The information, including Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, except as shall otherwise be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit |
Description | |
99.1 | Press Release of GSE Holding, Inc., dated May 9, 2012 |
SignatureS
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 9, 2012
GSE HOLDING, INC. | ||
/s/ William F. Lacey | ||
By: Title: |
William F. Lacey Executive Vice President and Chief Financial Officer |
GSE Reports Record First Quarter 2012 Sales
- Successful IPO Results in Significant Debt Reduction
- New Products Performing Well
HOUSTON, May 9, 2012 /PRNewswire/ -- GSE Holding, Inc. (the "Company" or "GSE") (NYSE: GSE), a leading global provider of highly engineered geosynthetic containment solutions for environmental protection and confinement applications, today reported its financial results for the Company's first quarter of 2012.
(Logo: http://photos.prnewswire.com/prnh/20120320/MM73437LOGO)
Selected highlights for the first quarter of 2012 compared to the prior year period:
Selected other recent updates post March 31, 2012
Mark Arnold, President & Chief Executive Officer, stated, "We are pleased with our record first quarter performance. Volume was strong in all regions, and we continue to be optimistic about our future. We are already gaining market traction with new products introduced during our global sales and operations meetings held in March. We continue to realize accelerated growth in the mining, fracking and coal ash sectors. Several customer field test projects were constructed during the first quarter of 2012 using our new proprietary drainage system for copper and gold mining. Additionally, our sales in China during the first quarter were substantially up over last year. Also, I wish to thank the investors, employees and advisors that made our IPO a success. I am particularly grateful to our initial investors and welcome our new investors."
First Quarter Summary
Sales for the quarter increased $6.4 million, or 7.2%, to $94.9 million, compared to $88.5 million in the first quarter of 2011. An increase in selling prices contributed $6.8 million, mostly driven by increases in resin costs that were passed on to customers. Additional volume contributed $0.8 million to the Company's increase in sales for the first quarter. Sales were negatively affected $1.2 million due to changes in foreign currency exchange rates, principally the Euro.
Selling, General and Administrative (SG&A) expense for the quarter was $10.9 million compared to $9.3 million in the first quarter of 2011, an increase of $1.6 million. This increase was primarily related to the global expansion of our sales force, public company costs and increased depreciation and other costs related to our global ERP system, partially offset by lower restructuring expense and professional fees.
Adjusted EBITDA for the quarter was $7.0 million compared to $9.8 million in the same prior year period, which was positively impacted by one uniquely large and complex project. No other projects during 2011 had such an impact on quarterly earnings comparisons (see "Reconciliation of Net Loss to EBITDA and Adjusted EBITDA").
Net loss for the quarter was $(1.1) million, adjusted for non-recurring costs associated with our IPO and management fees, or $(0.07) per fully diluted share, compared to $(0.6) million, or $(0.05) per fully diluted share, in the same prior year period (see "Earnings per Share Reconciliation").
Conference Call
GSE will hold a conference call today, May 9, 2012, at 9:30 a.m. Central Time to discuss first quarter operating results. Interested parties should use the following phone numbers: Toll-free: (877) 616-4476; International: (402) 875-4763; Conference ID # 76091302. Approximately two hours after the call concludes, a replay will be available. This audio replay will be available until May 23, 2012. Interested parties should use the following replay phone numbers: Toll-free (855) 859-2056; International: (404) 537-3406; Conference ID # 76091302.
Interested parties may also listen to a simultaneous webcast of the conference call by logging onto GSE's website at http://www.gseworld.com in the Investor Relations section. A replay of the conference call will also be available for approximately 30 days following the call.
Use of Non-GAAP Financial Measures
EBITDA represents net loss before interest expense, income tax expense, depreciation and amortization of intangibles. Adjusted EBITDA represents EBITDA before loss (gain) on foreign currency transactions, restructuring expenses, extraordinary and non-recurring professional fees, stock-based compensation expense, IPO costs, loss (gain) on asset sales and management fees. Adjusted Earnings per Share represents Earnings per Share before IPO costs and IPO related interest expense, and management fees. EBITDA, Adjusted EBITDA and Adjusted Earnings per Share are "non-GAAP financial measures," as defined under the rules of the Securities and Exchange Commission (the "SEC"), and are intended as supplemental measures of the Company's performance that are not required by, or presented in accordance with, GAAP. EBITDA, Adjusted EBITDA and Adjusted Earnings per Share should not be considered as alternatives to net income, income from continuing operations, earnings per share or any other performance measure derived in accordance with GAAP. The presentation of EBITDA, Adjusted EBITDA and Adjusted Earnings per Share should not be construed to imply that future results will be unaffected by unusual or non-recurring items. Management believes these measures are meaningful to investors to enhance their understanding of the Company's financial performance. Management's calculation of these measures may not be comparable to similarly titled measures reported by other companies. A reconciliation of EBITDA and Adjusted EBITDA to net loss, the most comparable GAAP measure, appears in the section of this press release titled "Reconciliation of Net Loss to EBITDA and Adjusted EBITDA." A reconciliation of Adjusted Earnings per Share to Earnings per Share appears in the section of this press release titled "Earnings per Share Reconciliation".
About GSE Holding, Inc.
GSE 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, wastewater, and aquaculture.
GSE has a long history of manufacturing quality geosynthetic lining systems and developing innovative products. The company's principal products are polyethylene-based geomembranes, geonets, geocomposites, geosynthetic clay liners, concrete protection liners and vertical barriers. GSE manufactures products primarily to line or cap hazardous and non-hazardous waste landfills; contain materials generated in certain mining processes; and contain water, liquid waste and industrial products in ponds, tanks, reservoirs, sewers, and canals. Headquartered in Houston, Texas, USA, GSE maintains sales offices throughout the world and manufacturing facilities in the United States, Chile, Germany, Thailand and Egypt.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements give management's current expectations and projections relating to the Company's financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. The forward-looking statements are based on the Company's beliefs, assumptions and expectations of future performance, taking into account the information currently available to management. Important factors that could cause actual results to differ materially from statements included in this press release can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and other documents filed with the SEC. These documents are available in the Investor Relations section of the Company's website at http://www.gseworld.com.
The Company cannot assure you that it will realize the results or developments it expects or anticipates or, even if substantially realized, that they will result in the consequences or affect the Company or its operations in the way it expects. The forward-looking statements included in this press release are made only as of the date hereof. Management undertakes no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Financial Tables
GSE Holding, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)
March 31, 2012 | December 31, 2011 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $10,289 | $9,076 | |
Accounts receivable: | |||
Trade, net of allowance for doubtful accounts of $1,904 and $1,736 | 84,092 | 80,705 | |
Other | 5,236 | 3,054 | |
Inventory, net | 81,948 | 58,109 | |
Deferred income taxes | 696 | 935 | |
Prepaid expenses and other | 9,459 | 5,741 | |
Income taxes receivable | 2,852 | 2,447 | |
Total current assets | 194,572 | 160,067 | |
Property, plant and equipment, net of accumulated depreciation | 59,823 | 57,270 | |
Goodwill | 58,895 | 58,895 | |
Intangible assets, net | 2,455 | 2,727 | |
Deferred income taxes | 2,779 | 2,519 | |
Deferred debt issuance costs | 7,289 | 8,387 | |
Other assets | 258 | 2,561 | |
TOTAL ASSETS | $326,071 | $292,426 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $36,903 | $31,396 | |
Accrued liabilities and other | 31,217 | 26,264 | |
Short-term debt | 6,148 | 2,864 | |
Current portion of long-term debt | 2,662 | 2,709 | |
Income taxes payable | 1,740 | 964 | |
Deferred income taxes | 1,180 | 1,135 | |
Total current liabilities | 79,850 | 65,332 | |
Other liabilities | 1,083 | 1,124 | |
Deferred income taxes | 1,407 | 1,416 | |
Long-term debt, net of current portion | 155,771 | 192,885 | |
Total liabilities | 238,111 | 260,757 | |
Commitments and Contingencies | |||
Stockholders' equity: | |||
Common stock, $.01 par value, 150,000,000 shares authorized, 19,338,454 and 10,809,987 shares issued and outstanding at March 31, 2012 and December 31, 2011 | 193 | 108 | |
Additional paid-in capital | 129,243 | 61,407 | |
Accumulated deficit | (42,222) | (29,456) | |
Accumulated other comprehensive income | 746 | (390) | |
Total stockholders' equity | 87,960 | 31,669 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $326,071 | $292,426 |
GSE Holding, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
| ||||||
2012 | 2011 | |||||
Sales | $94,916 | $88,462 | ||||
Cost of products | 80,834 | 74,008 | ||||
Gross profit | 14,082 | 14,454 | ||||
Selling, general and administrative expenses | 10,925 | 9,343 | ||||
Non-recurring initial public offering related costs | 9,655 | — | ||||
Amortization of intangibles | 300 | 394 | ||||
Operating income (loss) | (6,798) | 4,717 | ||||
Other expenses (income): | ||||||
Interest expense, net of interest income | 5,747 | 4,841 | ||||
Foreign currency transaction (gain) loss | (572) | 1,290 | ||||
Other income, net | (177) | (424) | ||||
Loss from continuing operations before income taxes | (11,796) | (990) | ||||
Income tax provision | 649 | 127 | ||||
Loss from continuing operations | (12,445) | (1,117) | ||||
Income (loss) from discontinued operations, net of income taxes | (321) | 386 | ||||
Net loss | $(12,766) | $(731) | ||||
Other comprehensive income: | ||||||
Foreign currency translation adjustment | 1,136 | 3,113 | ||||
Comprehensive income (loss) | $(11,630) | $2,382 | ||||
Basic and diluted net loss per common share: | ||||||
Continuing operations | $(0.80) | $(0.10) | ||||
Discontinued operations | (0.02) | 0.03 | ||||
$(0.82) | $(0.07) | |||||
Basic and diluted weighted-average common shares outstanding | 15,496 | 10,810 | ||||
Earnings per Share Reconciliation: | ||||||
Basic and diluted net loss per common share | $(0.82) | $(0.07) | ||||
Discontinued operations | 0.02 | (0.03) | ||||
Non-recurring initial public offering related costs | 0.62 | -- | ||||
Initial public offering related interest expense | 0.10 | -- | ||||
Management fees | 0.01 | 0.05 | ||||
Adjusted Earnings per Share | $(0.07) | $(0.05) |
GSE Holding, Inc.
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
(In thousands)
Three Months Ended
| ||||||
2012 | 2011 | |||||
Net loss | $ (12,766) | $ (731) | ||||
(Income) loss from discontinued operations, net of income tax | 321 | (386) | ||||
Interest expense | 5,747 | 4,841 | ||||
Income tax expense | 649 | 127 | ||||
Depreciation and amortization expense | 3,545 | 3,045 | ||||
EBITDA | (2,504) | 6,896 | ||||
Foreign exchange (gain) loss | (572) | 1,290 | ||||
Restructuring expense | 60 | 355 | ||||
Professional fees | 37 | 651 | ||||
Stock-based compensation expense | 4,306 | 75 | ||||
IPO cash bonuses | 2,293 | - | ||||
IPO travel costs | 56 | - | ||||
Management fees | 3,215 | 500 | ||||
Other | 133 | 8 | ||||
Adjusted EBITDA | $7,024 | $ 9,775 |
CONTACT: Cade Kohoutek, Phone: 281-230-6733, Email: ckohoutek@gseworld.com