GSE Holding, Inc., a leading global provider of highly engineered geosynthetic containment solutions for environmental protection and confinement applications, reported its financial results for the Company's third quarter of 2013.

Selected financial results for the third quarter of 2013:

- Net sales of $118.0 million vs. $121.2 million in 3Q 2012

- Gross margin of 11.6% vs. 17.4% in 3Q 2012

- Adjusted EBITDA of $7.5 million vs. $12.6 million in 3Q 2012

- GAAP Net Loss of $35.8 million or ($1.77) per diluted share vs. net income of $5.2 million or $0.26 per diluted share in 3Q 2012

-A non-cash charge of $25.2 million was recorded relative to a goodwill impairment for the North American business as well as a $6.6 million non-cash tax charge to establish a reserve for the valuation of U.S. deferred tax assets

Third Quarter Summary

Total net sales for the third quarter were $118.0 million, compared to $121.2 million for the prior year period. Gross profit was $13.7 million in the third quarter of 2013 compared to $21.0 million in the prior year period, resulting in gross margin for the third quarter of 2013 declining to 11.6% from 17.4% in the prior year period.

Selling, general and administrative ("SG&A") expenses for the third quarter of 2013 as reported include non-recurring restructuring charges and professional fees and non-cash stock-based compensation expense.  Excluding these non-recurring expenses and non-cash charges, SG&A expenses for the third quarter of 2013 were $9.9 million compared to $12.6 million in second quarter of 2013 and $11.8 million for the third quarter of 2012.

During the third quarter of 2013, the Company performed an interim assessment of goodwill due to identification of impairment indicators.  Such indicators included continued weak gross margins, under-achievement of previous financial projections as well as a lower stock price. 

Based on this assessment, a non-cash impairment charge totaling $25.2 million was recorded related to the Company's North America reporting unit.  In addition, the Company assessed the realizability of its U.S. deferred tax assets and concluded a non-cash valuation allowance of $6.6 million was necessary in the third quarter.

GAAP net loss for the quarter was $35.8 million, or ($1.77) per diluted share, compared to net income of $5.2 million, or $0.27 per diluted share in the prior year period.  Adjusted EBITDA was $7.5 million compared to $12.6 million in the prior year period.