Gross profit in Q3 2012 rose to $5.0 million, or 38.8% of revenue, from $4.6 million, or 36.8% of revenue, in Q3 2011. The improvement in Q3 2012 was the result of the increased revenue generated from GSE EnVision, whose products typically generate a substantially higher gross profit margin than the Company’s normal gross profit margin. In 3Q 2011, the Company had received a $3.0 million change order from SE which increased the overall gross margin on the project and generated an additional $679,000 in gross margin on the project in 3Q 2011.

Operating income for Q3 2012 rose to $1.4 million from operating income of $1.0 million in Q3 2011, driven primarily by higher revenue and gross profit related to GSE EnVision, and maintaining our level of operating expenses on a year over year basis.

Pre-tax income for Q3 2012 rose to $1.3 million from $0.9 million in Q3 2011.

Net income for Q3 2012 was $0.8 million, or $0.04 per basic and diluted share, compared to a net income of $0.9 million, or $0.05 per basic and diluted share.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for Q3 2012 rose to $1.5 million from EBITDA of $1.2 million in Q3 2011.

Backlog at September 30, 2012 was $47.2 million, a decline from $51.3 million at June 30, 2012. At September 30, 2012, approximately $4.1 million of GSE’s backlog was related to the SE project.

GSE’s cash position at September 30, 2012 was $21.3 million, excluding $5.8 million of restricted cash and unrestricted Certificates of Deposit, as compared to cash and equivalents of $12.3 million, excluding $5.8 million of restricted cash at June 30, 2012, and cash and equivalents of $20.3 million, excluding $6.2 million of restricted cash and unrestricted Certificates of Deposit, at December 31, 2011.

SHARE REPURCHASE

Under the provisions of the share repurchase program authorized by GSE’s Board of Directors in March 2011, during the three and nine month periods ended September 30, 2012 GSE acquired 60,700 and 223,087 shares of common stock, respectively, for an aggregate purchase price of $119,000 and $422,000, respectively. Subsequent to the close of the third quarter and through November 13, 2012, GSE purchased an additional 26,905 shares of its common stock for an aggregate purchase price of $49,798.

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