<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
of the
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1998 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 (IRS Employer
incorporation or organization) 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
----- -----
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 November 13, 1998
- - ---------------------------- --------------------------------
Common stock, par value $.01 13,161,547
<PAGE> 2
GUNDLE/SLT ENVIRONMENTAL, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets as of
September 30, 1998 (Unaudited) and
December 31, 1997 3
Consolidated Statements of Income
for the Three and Nine Months Ended
September 30, 1998 and 1997 (Unaudited) 4
Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1998
and 1997 (Unaudited) 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of Results
of Operations and Financial Condition 8
PART II - OTHER INFORMATION 12
PART IV - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K 12
</TABLE>
2
<PAGE> 3
GUNDLE/SLT ENVIRONMENTAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 13,074 $ 24,844
ACCOUNTS RECEIVABLE, NET 57,924 53,606
CONTRACTS IN PROGRESS 5,032 2,189
INVENTORY 18,505 22,000
DEFERRED INCOME TAXES 6,388 6,408
PREPAID EXPENSES AND OTHER 841 913
--------- ---------
TOTAL CURRENT ASSETS 101,764 109,960
PROPERTY, PLANT AND EQUIPMENT, NET 35,441 35,283
EXCESS OF PURCHASE PRICE OVER FAIR VALUE
OF NET ASSETS ACQUIRED, NET 27,273 28,118
OTHER ASSETS 4,409 4,600
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$ 168,887 $ 177,961
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES $ 33,092 $ 39,835
ADVANCE BILLINGS ON CONTRACTS
IN PROGRESS 671 725
CURRENT PORTION OF LONG-TERM DEBT 5,655 5,767
INCOME TAXES PAYABLE 2,940 2,400
DEFERRED INCOME TAXES 830 772
--------- ---------
TOTAL CURRENT LIABILITIES 43,188 49,499
LONG-TERM DEBT 32,297 37,628
DEFERRED INCOME TAXES 3,388 3,297
OTHER LIABILITIES 1,494 1,427
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, 18,092,336 AND 18,087,111 SHARES
ISSUED 181 180
ADDITIONAL PAID-IN CAPITAL 69,398 69,929
RETAINED EARNINGS 48,910 46,350
ACCUMULATED OTHER COMPREHENSIVE INCOME 1,031 1,351
UNEARNED COMPENSATION (245) (1,051)
--------- ---------
119,275 116,759
TREASURY STOCK AT COST, 4,912,589 and 4,807,456 SHARES (30,755) (30,649)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 88,520 86,110
--------- ---------
$ 168,887 $ 177,961
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE> 4
GUNDLE/SLT ENVIRONMENTAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
SALES AND OPERATING REVENUE $ 57,086 $ 66,096 $ 138,041 $ 147,797
COST OF PRODUCTS & SERVICES 45,108 53,825 112,204 121,082
--------- --------- --------- ---------
GROSS PROFIT 11,978 12,271 25,837 26,715
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 6,098 5,955 18,548 18,047
AMORTIZATION OF GOODWILL 348 293 1,035 908
--------- --------- --------- ---------
OPERATING INCOME 5,532 6,023 6,254 7,760
OTHER (INCOME) EXPENSES:
INTEREST EXPENSE 824 1,028 2,649 3,181
INTEREST INCOME (206) (421) (757) (1,453)
OTHER (INCOME) EXPENSE, NET (71) 232 (129) 111
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 4,985 5,184 4,491 5,921
PROVISION FOR INCOME TAXES 2,143 2,174 1,931 2,486
--------- --------- --------- ---------
NET INCOME $ 2,842 $ 3,010 $ 2,560 $ 3,435
========= ========= ========= =========
BASIC AND DILUTED EARNINGS
PER COMMON SHARE $ 0.22 $ 0.19 $ 0.19 $ 0.22
========= ========= ========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 13,218 15,483 13,253 15,637
========= ========= ========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
GUNDLE/SLT ENVIRONMENTAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
----------------------
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 2,560 $ 3,435
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION 5,328 5,219
AMORTIZATION 1,001 1,099
DEFERRED INCOME TAXES (972) (507)
GAIN ON SALE OF ASSETS (35) (254)
INCREASE (DECREASE) IN CASH DUE TO
CHANGES IN ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE (3,461) (10,791)
CONTRACTS IN PROGRESS (2,730) (1,818)
INVENTORY 3,478 1,258
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (7,654) 7,958
ADVANCE BILLINGS ON CONTRACTS IN PROGRESS (94) (380)
INCOME TAXES PAYABLE 1,423 (759)
OTHER (350) 1,110
-------- --------
NET CASH PROVIDED BY (USED IN)OPERATING ACTIVITIES (1,506) 5,570
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT (5,166) (3,234)
PROCEEDS FROM SALE OF EQUIPMENT 215 369
OTHER 0 (123)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (4,951) (2,988)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
REPURCHASE OF COMMON STOCK (106) (14,502)
PROCEEDS FROM THE EXERCISE OF STOCK OPTIONS AND
PURCHASES UNDER THE EMPLOYEE STOCK PURCHASE PLAN 25 486
RETIREMENT OF LONG-TERM DEBT (5,380) (5,735)
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (5,461) (19,751)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 148 (64)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,770) (17,233)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 24,844 43,122
-------- --------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 13,074 $ 25,889
======== ========
CASH PAID FOR INTEREST $ 2,766 $ 3,744
======== ========
CASH PAID FOR INCOME TAXES $ 2,082 $ 4,861
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
GUNDLE/SLT ENVIRONMENTAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation -
General -
The accompanying unaudited, condensed consolidated financial statements
have been prepared by the Registrant ("Gundle/SLT Environmental, Inc." or the
"Company") pursuant to the rules and regulations of the Securities and Exchange
Commission. These condensed consolidated financial statements reflect all normal
recurring adjustments which are, in the opinion of management, necessary for the
fair presentation of such financial statements for the periods indicated.
Certain information relating to the Company's organization and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles has been condensed or omitted in
this Form 10-Q pursuant to Rule 10-01 of Regulation S-X for interim financial
statements required to be filed with the Securities and Exchange Commission.
However, the Company believes that the disclosures herein are adequate to make
the information presented not misleading. The results for the three and nine
months ended September 30, 1998, are not necessarily indicative of future
operating results. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
The accounting policies followed by the Company in preparing interim
consolidated financial statements are similar to those described in the "Notes
to Consolidated Financial Statements" in the Company's Annual Report on Form
10-K for the year ended December 31, 1997.
In 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share. Statement 128 replaces the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. All earnings per share amounts for all periods have been
presented and, where appropriate, restated to conform to the Statement 128
requirements.
The Company occasionally enters into forward contracts and cross
currency swaps in its management of foreign currency exposures. As a matter of
policy, the Company does not speculate in financial markets and therefore, does
not hold these contracts for trading purposes. The Company utilizes what it
considers straightforward instruments to accomplish its objectives.
6
<PAGE> 7
The foreign currency forward contracts are used to hedge specific
transactions. Gains and losses on these contracts are recognized in the same
period as the gains and losses on the underlying position.
The Company is using a cross currency principal and interest rate swap
to effectively convert a portion of its U.S. dollar denominated debt into German
Marks. The objective of this hedging strategy is the management of the foreign
currency exchange risk associated with its net investment in Germany and is
based on the projected foreign currency cash flows from Germany over the next
eight years. The Company's investment in Germany and the foreign currency
portion of its swap are adjusted each period to reflect current foreign exchange
rates with the gains and losses recorded in the equity section of the balance
sheet as comprehensive income. The differential paid or received on the interest
rate component is recognized as an adjustment to interest expense.
Organization -
Gundle/SLT Environmental, Inc., a Delaware corporation, through GSE
Lining Technology, Inc. and the Company's other wholly owned subsidiaries, is
primarily engaged in the manufacture, sale and installation of polyethylene
lining systems.
(2) Inventory -
Inventory is stated at the lower of cost or market. Cost, which
includes material, labor and overhead, is determined by the weighted average
cost method. Inventory consisted of the following (000's):
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
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<S> <C> <C>
Raw materials and supplies $ 4,297 $ 6,812
Finished goods 14,208 15,188
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$18,505 $22,000
======= =======
</TABLE>
(3) Income Taxes -
The Company's provision for income taxes is recorded at the statutory
rates adjusted for the effect of any permanent differences.
(4) Equity -
On January 23, 1997, the Company purchased 2,071,656 shares of its
common stock at a price of $7 per share, for a total cost of $14,502,000. On
December 16, 1997, the Company purchased 2,200,000 shares of its common stock at
a price of $5.40 per share for a total cost of $11,880,000. In September, 1998,
the Company announced a stock repurchase program, which authorizes the
repurchase of up to 1,000,000 shares of its common stock. As of September 30,
1998, the company had repurchased 45,800 shares of common stock at prices
ranging from $2.50 to $3.25 per share under this program. All of these
transactions were funded with the Company's available cash. At September 30,
1998, the Company had 13,179,747 shares outstanding.
7
<PAGE> 8
(5) Comprehensive Income -
On January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
this Statement had no impact on the Company's net income or shareholders'
equity. Statement 130 requires unrealized gains or losses on the Company's
available-for-sale securities and foreign currency translation adjustments to be
included in other comprehensive income. Prior to adoption these amounts were
reported separately in shareholders' equity. Prior year financial statements
have been reclassified, where appropriate, to conform to the requirements of
Statement 130.
During the third quarter of 1998 and 1997, total comprehensive income (losses),
representing foreign currency translation adjustments, amounted to $322,000 and
$(311,000) respectively. For the nine months ended September 30, 1998 and 1997,
total comprehensive income (losses), representing foreign currency translation
adjustments, amounted to $(320,000) and $(1,607,000) respectively.
(6) Derivative Financial Instruments -
Effective October 18, 1996, the Company swapped $10,000,000 in
long-term debt with an annual interest rate of 7.34% for 15,380,000 Deutsche
Mark (DM) denominated long-term debt with an annual interest rate of 6.32%,
effectively hedging a portion of its net investment in Germany. The DM swap
agreement requires the Company to re-exchange 3,076,000 DM for $2,000,000 each
August 1 for the five year period beginning August 1, 2001. The DM swap is
included in long-term debt and is marked to market as the U.S. dollar/DM
exchange rate changes. These adjustments are included as a component of
accumulated other comprehensive income in shareholders' equity. Interest
payments and receipts are semi-annual on February 1 and August 1. The DM
interest payment is also subject to exchange rate fluctuations. Interest expense
is also impacted by these exchange rate fluctuations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Quarter:
For the three months ended September 30, 1998, sales and
operating revenue was $57,086,000 compared with $66,096,000 for the same period
last year. This 14% decrease in sales and operating revenue from last year was
the result of 4% lower units shipped and a 10% lower overall weighted value per
unit. U.S. sales and operating revenue was $31,632,000, 13% lower than for the
same period last year. U.S. volume was 3% lower and overall weighted value per
unit was 10% lower. Foreign sales and operating revenue was $25,454,000 this
quarter, down 15% from last year. Foreign volume was off 6%, primarily in
Southeast Asia and the Middle East, while the overall weighted value per unit
was off 9%.
8
<PAGE> 9
Gross profit for the quarter was $11,978,000, down $293,000, or 2% from
the prior year. As a percentage of sales and operating revenue, gross profit
increased to 21.0% from 18.6%. Both the weighted sales value and cost per unit
declined equally, increasing the gross profit as a percentage.
Selling, general and administrative (SG&A) expenses were $6,098,000
compared with $5,955,000 in the second quarter of 1997.
Interest expense was $204,000 less than last year primarily due to a
decrease in outstanding debt resulting from scheduled repayments.
Interest income was $215,000 less than last year primarily due to lower
amounts of invested cash. The Company used $11,880,000 of it's surplus cash to
repurchase 2,200,000 shares of its common stock in December 1997.
The quarterly expense for income taxes was $2,143,000 compared with
$2,174,000 in the same period last year. The tax expense for both periods was
recorded at the statutory rates adjusted for certain nondeductible expenses.
Year-to-Date:
For the nine months ended September 30, 1998, sales and operating
revenue was $138,041,000 compared with $147,797,000 for the same period last
year. This 7% decrease in sales and operating revenue was primarily due to an 8%
decrease in the overall weighted price per unit that included the impact of
lower US dollar value of Duetsche Mark and Australian dollars amounting to
approximately $1,800,000. This decrease in value was mitigated by a 1% increase
in units shipped. U.S. sales and operating revenue of $71,558,000 decreased by
$2,758,000, or 4% from the same period last year. U.S. volume was 4% higher
while overall weighted value per unit was 7% lower than last year. Foreign sales
and operating revenue was $66,483,000 for the nine months, down $7,000,000, or
9%, from the same period last year on similar volume. The weighted value per
unit was down 9% including the impact of foreign currency mentioned above.
Gross profit for the period was $25,837,000, down $878,000, or 3% from
the prior year. As a percentage of sales, gross profit increased to 18.7% from
18.1%. The 1% increase in unit volume was more than offset by lower gross profit
per unit caused by the average selling price decreasing more than the average
material cost. Even though the average gross profit per unit decreased, due to a
lower selling price, margin as a percentage of the average selling price
increased.
Selling, general and administrative (SG&A) expenses were $18,548,000
compared with $18,047,000 in the first nine months of 1997. Of this difference,
approximately $1,000,000 resulted from contractually required severance paid to
the former President and CEO, who left the company in April offset by a decrease
in the US Dollar value of expenses paid in DM's($100,000), the savings generated
by scaling back of the Singapore operations($350,000) and a reduction in the
costs related to the Restricted Stock Plan($100,000).
9
<PAGE> 10
Interest expense was $532,000 less than last year due to a decrease in
outstanding debt resulting from scheduled repayments.
Interest income was $696,000 less than last year primarily due to lower
amounts of invested cash. The Company used $11,880,000 of surplus cash to
repurchase 2,200,000 shares of it's common stock in December 1997.
The expense for income taxes was $1,931,000 compared with a $2,486,000
in the same period last year. The tax expense for both periods was recorded at
the statutory rates adjusted for certain nondeductible expenses.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998, the Company had working capital of $58,576,000,
including cash and temporary investments of $13,074,000. The Company's cash,
inventory and receivable balances fluctuate from quarter-to-quarter due to the
seasonality of sales. The Company's capital structure consisted of $38,362,000
in debt and $88,520,000 in stockholders' equity as of September 30, 1998.
The Company has a $35,000,000 multi-currency revolving credit facility
(the "Revolver") with Bank of America, formerly NationsBank of Texas, as agent,
that was amended to extend the credit commitment date to September 30, 1999.
Under the terms of the revolving credit agreement, the Company is required to
maintain certain financial ratios and a specific level of consolidated tangible
net worth. At September 30, 1998, there was no balance outstanding on the
Revolver, but $975,000 in letters of credit issued under this facility reduced
the balance available to $34,025,000. The letters of credit issued under this
facility secure self-insurance programs.
The Company believes that its cash balance, cash generated by
operations, and the balance available under the Revolver are adequate to meet
its cash requirements over the next year.
The Company's operations are subject to seasonal fluctuation with the
greatest volume of product deliveries and installations typically occurring in
the summer and fall months. In particular, the Company's operating results are
most impacted in the first quarter as both product deliveries and installations
are at their lowest levels due to the inclement weather experienced in the
Northern Hemisphere.
The Company's foreign subsidiaries routinely accept contracts in
currencies different than their functional currency. The Company recognizes that
such practices are subject to the risk of foreign currency fluctuations not
present in U.S. operations. Foreign exchange gains and losses to date have not
been material to the Company's operations as a whole. The conversion by most
European countries to the European Monetary Union and the Euro currency is not
expected to have a significant effect on the Company's operations.
10
<PAGE> 11
At December 31, 1997, the Company had a U.S. dollar receivable of
$3,666,000 from an Indonesian customer, secured by an irrevocable letter of
credit issued by an Indonesian bank that matured in July, 1998. As of September
30, 1998, the Company has received $3,051,000 from the Indonesian Bank. The
Company believes based on information available at this time, that the remaining
amount due under this letter of credit should be collected.
The Company is in the process of implementing the JDEdwards suite of
systems to replace all U.S. legacy operating systems that are not year 2000
compliant. This implementation will be completed by the end of 1998. The
Company's German operation will spend approximately $200,000 during 1998 and
1999 to purchase and install a new year 2000 compliant operating system. The
operating systems in use at the Company's other foreign operations are year 2000
compliant. The company is in the process of evaluating the year 2000 status of
its major customers and suppliers and has made no determination of the action
necessary if one or more of these fail to be fully year 2000 compliant.
Pricing for the Company's products and services is primarily driven by
worldwide manufacturing capacity in the industry, and raw material costs. The
Company's primary raw material, polyethylene, is occasionally in short supply
and subject to substantial price fluctuation in response to market demand. Any
increase in the industry's worldwide manufacturing capacity, interruption in raw
material supply, or abrupt raw material price increases could have an adverse
effect upon the Company's operations and financial performance. Inflation has
not had a significant impact on the Company's operations.
11
<PAGE> 12
* * *
Forward-looking information:
This Form 10-Q contains certain forward-looking statements as such is
defined in the Private Securities Litigation Reform Act of 1995, and information
relating to the Company and its subsidiaries that are based on beliefs of the
Company's management, as well as assumptions made by and information currently
available to the Company's management. When used in this report, the words,
"anticipate", "believe", "estimate", "expect", "intend" and words of similar
import, as they relate to the Company or its subsidiaries or Company management,
are intended to identify forward-looking statements. Such statements reflect the
current risks, uncertainties and assumptions related to certain factors
including, without limitations, competitive market factors, world-wide
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 herein. 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 described herein as anticipated,
believed, estimated, expected or intended.
PART II - OTHER INFORMATION
Resignation of Director:
Samir T. Badawi, Chairman of the Board of Directors, has assumed the
role of acting President and CEO effective April 27, 1998 following the
resignation of William P. Reid, the former President, CEO and Director. Roger J.
Klatt, former Senior Vice President and Chief Financial Officer since 1994 has
assumed responsibility for day-to-day operations as Executive Vice President and
Chief Financial Officer.
12
<PAGE> 13
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 thereunto duly authorized.
GUNDLE/SLT ENVIRONMENTAL, INC.
DATE November 16, 1998 BY /s/ Roger J. Klatt
------------------- ---------------------------------
ROGER J. KLATT,
EXECUTIVE VICE PRESIDENT &
CHIEF FINANCIAL OFFICER
DATE November 16, 1998 BY /s/ ERNEST C. ENGLISH, JR.
------------------ ---------------------------------
ERNEST C. ENGLISH, JR.,
VICE PRESIDENT &
CORPORATE CONTROLLER
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,168
<SECURITIES> 9,906
<RECEIVABLES> 65,094
<ALLOWANCES> 3,585
<INVENTORY> 18,505
<CURRENT-ASSETS> 101,764
<PP&E> 92,962
<DEPRECIATION> 35,441
<TOTAL-ASSETS> 168,887
<CURRENT-LIABILITIES> 43,188
<BONDS> 32,188
0
0
<COMMON> 181
<OTHER-SE> 88,339
<TOTAL-LIABILITY-AND-EQUITY> 168,887
<SALES> 57,086
<TOTAL-REVENUES> 57,086
<CGS> 45,108
<TOTAL-COSTS> 51,554
<OTHER-EXPENSES> (71)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 824
<INCOME-PRETAX> 4,985
<INCOME-TAX> 2,143
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,842
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
