<PAGE>

                                   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     March 31, 2002     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 April 25, 2002
----------------------------   ----------------------------------
Common stock, par value $.01              11,092,661
<PAGE>

                        GUNDLE/SLT ENVIRONMENTAL, INC.

                                     INDEX

<TABLE>
<CAPTION>
                                                                    PAGE
<S>                                                                 <C>
PART I - FINANCIAL INFORMATION

         Condensed Consolidated Balance Sheets as of
         March 31, 2002 (Unaudited) and
         December 31, 2001                                            3

         Consolidated Statements of Income
         For the Three Months Ended March 31, 2002
         and 2001 (Unaudited)                                         4

         Consolidated Statements of Cash Flows
         For the Three Months Ended March 31, 2002
         and 2001 (Unaudited)                                         5

         Notes to Condensed Consolidated Financial
         Statements                                                   6

         Management's Discussion and Analysis of Results
         of Operations and Financial Condition                        9


PART II - OTHER INFORMATION                                          14
</TABLE>

                                       2
<PAGE>

                        GUNDLE/SLT ENVIRONMENTAL, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   (AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                              MARCH 31           DECEMBER 31,
                                                                2002                 2001
                                                             ----------          ------------
                                                             (UNAUDITED)
<S>                                                          <C>                 <C>
ASSETS
CURRENT ASSETS:
  CASH AND CASH EQUIVALENTS                                  $   13,391          $   16,163
  ACCOUNTS RECEIVABLE, NET                                       56,372              45,418
  CONTRACTS IN PROGRESS                                           3,861               1,977
  INVENTORY                                                      27,002              17,151
  DEFERRED INCOME TAXES                                          11,424               3,479
  PREPAID EXPENSES AND OTHER                                      6,045               1,609
                                                             ----------          ----------
        TOTAL CURRENT ASSETS                                    118,095              85,797

PROPERTY, PLANT AND EQUIPMENT, NET                               31,540              33,355
EXCESS OF PURCHASE PRICE OVER FAIR VALUE
  OF NET ASSETS ACQUIRED, NET                                    22,154              22,205
DEFERRED INCOME TAXES                                             9,604                  -
OTHER ASSETS                                                      6,939               3,727
                                                             ----------          ----------

                                                             $  188,332          $  145,084
                                                             ==========          ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                   $   41,751          $   26,351
  ADVANCE BILLINGS ON CONTRACTS
   IN PROGRESS                                                    2,809               1,139
  SHORT-TERM DEBT                                                   186               5,154
  CURRENT PORTION OF LONG-TERM DEBT                               3,814               5,268
  DEFERRED INCOME TAXES                                             178                   -
  INCOME TAXES PAYABLE                                                -                 391
                                                             ----------          ----------

        TOTAL CURRENT LIABILITIES                                48,738              38,303

LONG-TERM DEBT                                                   21,335              15,379
DEFERRED INCOME TAXES                                             3,876               1,145
OTHER LIABILITIES                                                 1,034                 350
MINORITY INTEREST                                                 1,512                   -

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, 18,158,923 AND 18,109,923 SHARES
    ISSUED                                                          182                 181
  ADDITIONAL PAID-IN CAPITAL                                     94,197              69,380
  RETAINED EARNINGS                                              57,962              60,293
  ACCUMULATED OTHER COMPREHENSIVE INCOME                         (3,326)             (2,769)
                                                             ----------          ----------
                                                                149,015             127,085
  TREASURY STOCK AT COST, 7,066,262 and 7,066,262 SHARES        (37,178)            (37,178)
                                                             ----------          ----------

        TOTAL STOCKHOLDERS' EQUITY                              111,837              89,907
                                                             ----------          ----------

                                                             $  188,332          $  145,084
                                                             ==========          ==========
</TABLE>

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
               THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>

                        GUNDLE/SLT ENVIRONMENTAL, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
             (AMOUNTS IN THOUSANDS EXCEPT EARNINGS PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED
                                                         MARCH 31
                                                 -------------------------
                                                   2002            2001
                                                 ---------       ---------
<S>                                              <C>             <C>
SALES AND OPERATING REVENUE                      $  38,730       $  23,544
COST OF PRODUCTS & SERVICES                         32,609          21,476
                                                 ---------       ---------

GROSS PROFIT                                         6,121           2,068

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                            7,359           6,273
AMORTIZATION OF GOODWILL                                -              332
NONRECURRING CHARGES                                   910              -
                                                 ---------       ---------

OPERATING INCOME                                    (2,148)         (4,537)

OTHER (INCOME) EXPENSES:
  INTEREST EXPENSE                                     545             359
  INTEREST INCOME                                      (72)           (158)
  OTHER EXPENSE, NET                                   122              60

INCOME(LOSS) BEFORE INCOME TAXES                    (2,743)         (4,798)

PROVISION FOR INCOME TAX BENEFIT                    (1,152)         (2,015)
                                                 ---------       ---------

LOSS BEFORE EXTRORDINARY ITEMS                      (1,591)          (2,783)

EXTRAORDINARY GAIN - SERROT ACQUISITION             24,627              -
EXTRAORDINARY LOSS - EXTINQUISHMENT OF DEBT           (741)             -
                                                 ---------       ---------

NET INCOME(LOSS)                                 $  22,295       $  (2,783)
                                                 =========       =========

BASIC AND DILUTED EARNINGS(LOSS) PER SHARE
   LOSS BEFORE EXTRAORDINARY ITEMS                   (0.14)         (0.25)
   EXTRAORDINARY ITEMS                                2.16             -
                                                 ---------       ---------

NET INCOME(LOSS) PER SHARE                       $    2.02       $  (0.25)
                                                 =========       =========

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                               11,050         11,050
                                                 =========       =========
</TABLE>

                THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
              THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>

                        GUNDLE/SLT ENVIRONMENTAL, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                             MARCH 31
                                                                       ----------------------
                                                                         2002         2001
                                                                       ---------    ---------
<S>                                                                    <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  NET LOSS                                                             $  (2,332)   $  (2,784)
  ADJUSTMENTS TO RECONCILE NET LOSS TO CASH
    PROVIDED BY (USED IN) OPERATING ACTIVITIES:
    DEPRECIATION                                                           2,059        1,940
    AMORTIZATION                                                             183          337
    DEFERRED INCOME TAXES                                                     11          218
    GAIN ON SALE OF ASSETS                                                   (35)         (32)
    RECOGNITION OF GAIN ON HEDGE                                            (290)         (57)
    INCREASE (DECREASE) IN CASH DUE TO
      CHANGES IN ASSETS AND LIABILITIES:
      ACCOUNTS RECEIVABLE                                                 19,403       20,868
      CONTRACTS IN PROGRESS                                                 (690)         (66)
      INVENTORY                                                           (3,382)     (10,075)
      ACCOUNTS PAYABLE AND ACCRUED LIABILITIES                            (9,592)       1,137
      ADVANCE BILLINGS ON CONTRACTS IN PROGRESS                              991         (177)
      INCOME TAXES PAYABLE                                                (2,857)      (2,385)
      OTHER                                                                 (974)      (1,029)
                                                                       ---------    ---------

      NET CASH PROVIDED BY(USED IN)OPERATING ACTIVITIES                    2,495        7,895
                                                                       ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:

  ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT                                (445)      (5,641)
  PROCEEDS FROM SALE OF EQUIPMENT                                            108           95
  PAYMENTS FOR THE ACQUISITION OF A BUSINESS, NET OF
   CASH ACQUIRED                                                          (2,724)          -
  OTHER                                                                      145           -
                                                                       ---------    ---------

      NET CASH USED IN INVESTING ACTIVITIES                               (2,916)      (5,546)
                                                                       ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  REPURCHASE OF COMMON STOCK                                                   -          (74)
  PROCEEDS FROM THE EXERCISE OF STOCK OPTIONS AND
   PURCHASES UNDER THE EMPLOYEE STOCK PURCHASE PLAN                           191          17
  PROCEEDS FROM LONG-TERM DEBT                                           (25,338)          -
  RETIREMENT OF LONG-TERM DEBT                                           (20,835)          -
  FINANCING FEES                                                          (1,994)          -
  NET CHANGE IN SHORT-TERM DEBT                                           (4,968)       1,101
                                                                       ---------    ---------

      NET CASH PROVIDED BY(USED IN) FINANCING ACTIVITIES                  (2,268)       1,044
                                                                       ---------    ---------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                      (83)        (395)
                                                                       ---------    ---------
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS                       (2,772)       2,998
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD                      16,163       11,270
                                                                       ---------    ---------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD                         $  13,391    $  14,268
                                                                       =========    =========
</TABLE>

                THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
              THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       5
<PAGE>

                        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 accounting principles generally accepted in the United States 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 months ended March 31, 2002, 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, 2001.

         The accounting policies followed by the Company in preparing interim
condensed 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, 2001.

         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.

         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.

Organization -

         Gundle/SLT  Environmental,  Inc., a Delaware corporation, through GSE
Lining Technology, Inc. and the Company's other operating subsidiaries, is
primarily engaged in the manufacture, sale and installation of geosynthetic
lining systems.

                                       6
<PAGE>

(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,
which approximates the first in, first out cost method. Inventory consisted of
the following (000's):

<TABLE>
<CAPTION>
                                       March 31,           December 31,
                                         2002                  2001
                                     -------------        --------------
<S>                                  <C>                  <C>
Raw materials and supplies              $ 5,625              $ 4,625
Finished goods                           21,377               12,526
                                        -------              -------

                                        $27,002              $17,151
                                        =======              =======
</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. The Company has a
tax holiday in Thailand through 2003 and a 50% reduced tax rate for 2004 through
2008.


(4)  Equity -


     On September 18, 1998, the Company's board of directors adopted a stock
repurchase plan under which the Company was authorized to repurchase up to
1,000,000 shares of its outstanding common stock in open market transactions
depending on market conditions. This amount was increased to 3,000,000 as of
December 31, 2000. As of March 31, 2002, stockholders' equity included 1,380,357
shares repurchased under this program. All of these transactions were funded
with the Company's available cash. At March 31, 2002, the Company had 11,092,661
shares outstanding.


(5)  Comprehensive Income -

     During the first quarter of 2002 and 2001, other comprehensive income
(losses), representing foreign currency translation adjustments, amounted to
$(527,000) and $(1,831,000), respectively.

                                       7
<PAGE>

(6)  Goodwill amortization -

     In June 2001, the Financial Accounting Standards Board issued SFAS No.
142, "Goodwill and Other Intangible Assets", effective for years beginning after
December 15, 2001. Under the new rules, goodwill will no longer be amortized but
will be subject to annual impairment tests in accordance with the statements. If
GSE had not amortized goodwill in the first quarter of 2001 the following pro
forma results would have occurred:

<TABLE>
<CAPTION>
                              Three months ended
                              -------------------
                                 March 31, 2001
                                 --------------
<S>                           <C>
Net Loss                             ($2,512)
Basic Loss Per Share                  ($ .22)
</TABLE>

     The Company is in the process of testing for impairment and anticipates
completion in the second quarter. The Company believes that the results of the
test will not have a signigficant effect on the value of Goodwill or Other
Intangible Assets.

(7)  Business Combination

     On February 4, 2002, the Company completed the purchase of all the
outstanding stock of Serrot International, Inc. (SII) from Waste Management
Holdings, Inc. (WMI). The acquisition cost was $17.5 million, including after
tax purchase, financing and transition costs of $6.0 million. The Company
recorded the transaction using the purchase method of accounting resulting in
the recognition of $24.6 million of negative goodwill representing the excess
fair value of the assets acquired over the purchase price after its allocation
to SII's long-lived assets net of their associated tax benefits. The negative
goodwill was recognized as an extraordinary gain for the three months ended
March 31, 2002. The purchase price is subject to adjustment the measurement of
working capital as of the closing date, and accordingly, the purchase price is
not final and is subject to change. Management believes such adjustments, if
any, will not be material.

     In conjunction with the purchase, the Company established a liability
of $6 million for estimated severance and other costs associated with the
involuntary termination of SII employees and the closing of a SII plant. Through
March 31, 2002, approximately $2 million of these costs were paid. The Company
anticipates approximately $5.2 million of these costs will be paid by the end of
2002.

     Unaudited pro forma combined operating results of the Company and SII
assuming the merger was completed as of January 1, 2002 and 2001, respectively,
are summarized as follows:

<TABLE>
<CAPTION>
                                  Three months ended March 31,
                                  ----------------------------
                                    2002                2001
                                    ----                ----
<S>                               <C>                 <C>
Sales & Operating Revenue           $47,413           $46,722
Net Loss                            ($2,421)          ($4,556)
Basic Loss Per Share                 ($ .22)           ($ .41)
Diluted Loss Per Share               ($ .21)           ($ .41)
</TABLE>

                                       8
<PAGE>

     The pro forma information includes adjustments for changes to interest
costs related to new financing obtained in conjunction with the acquisition, and
decreased depreciation expense of acquired property and equipment as a result of
the allocation of negative goodwill to long-lived assets. The pro forma
information excludes an extraordinary gain of $24.6 million resulting from
excess negative goodwill. The pro forma information is not necessarily
indicative of the results of operations had the transaction been effected on the
assumed date or the results of operations for any future periods.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
-------  -----------------------------------------------------------------
         FINANCIAL CONDITION
         -------------------

RESULTS OF OPERATIONS
---------------------

Quarter:

     For the three months ended March 31, 2002, sales and operating revenue was
$38,730,000 compared with $23,544,000 for the same period last year. U.S. sales
and operating revenue was $14,766,000, 84% higher than for the same period last
year. Foreign sales and operating revenue was $24,064,000, 54% higher than last
year. Foreign units shipped were up 37%. The primary reason for the increased
sales and operating revenue and unit shipments was the completion, on February
4, 2002, of the acquisition of Serrot International, Inc.(SII). Foreign currency
translation reduced 2002 foreign sales and operating revenue by $381,000.

     Gross profit for the quarter was $6,121,000, or 196% higher than the prior
year at $2,068,000. Gross Profit was increased by the additional units shipped
and installed in the U.S. primarily resulted from the acquisition of SII. Gross
profit margin, as a percentage of sales and operating revenue, increased to
15.8% from 8.8% last year. Margin as a percentage of sales and operating revenue
improved primarily due to increases in the utilization of GSE's manufacturing
and installation assets..

     Selling, general and administrative (SG&A) expenses were $7,359,000
compared with $6,605,000 in the first quarter of 2001, an 11% increase. Most of
this increase was associated with the new Non-U.S. operations acquired from SII.
Virtually all of SII's U.S. SG&A cost was eliminated.

     Interest expense was $186,000 higher than last year primarily due to an
increase in the interest rate resulting from the refinancing of our long term
debt to accomplish the acquisition of SII.

     Other (income)/expense was $62,000 higher than last year primarily due
to an increase in amortization of debt issuance expenses related to GSE's new
debt.

                                       9
<PAGE>

     The quarterly benefit for income taxes was $1,152,000 compared with
$2,015,000 in the same period last year. The tax provision for both periods was
recorded at the statutory rates adjusted for certain permanent differences on a
year-to-date basis.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     Sources of Liquidity

     The Company's primary sources of liquidity in the first quarter of 2002
were internally generated cash from operations, its credit line and a
refinancing of its long term notes. Primary uses of cash were capital
expenditures and the acquisition of SII. Cash used by operations in the first
quarter was $1,462,000. Capital expenditures totaled $445,000. Payments for the
acquisition of SII, net of cash acquired, was $2,724,000, As of March 31, 2002
the Company had working capital $76,935,000 of which $13,391,000 was cash and
cash equivalent investments. The Company's capital structure consisted of
$25,335,000 in debt and $111,937,000 in stockholders' equity at March 31, 2002.

     At March 31, 2002, the Company had credit facilities with two German banks
in the amount of EUR 5,625,000. These revolving credit facilities are secured by
property and plant in Germany, which also secures an installment loan. These
facilities mature in September, 2002, and bear interest at various market rates.
These credit facilities are used primarily to guarantee the performance of
European installation contracts and temporary working capital requirements. At
March 31, 2002, the Company had EUR 2,785,000 available under these credit
facilities with EUR 2,627,000 of bank guarantees outstanding and EUR 213,000 of
current borrowings.

     In January 2002, the Company arranged an additional EUR 2,550,000 credit
line with a German bank to increase the amount available to guarantee the
performance of German installation contracts and temporary working capital
requirements. This facility bears interest at market rates and is supported by a
corporate guarantee.

     On February 4, 2002, the Company entered into a note agreement with a
lender in the amount of $25,000,000. This 3-year term facility is secured by the
Company's Houston, TX and Kingstree, SC, real properties and all of the
Company's equipment at these locations. The promissory note requires monthly
payments of approximately $520,000 including interest at the rate of 9.22% and
matures on February 5, 2005 with a balloon payment equal to the unpaid principal
balance plus accrued and unpaid interest. The terms of the note place various
restrictions on the Company's ability to pay dividends or make certain other
payments, incur additional debt, consolidate or merge into another corporation
or sell assets and make capital expenditures. The note also requires the Company
to maintain certain financial ratios and specified levels of consolidated net
worth.

                                       10
<PAGE>

     On February 4, 2002, the Company entered into a 3-year credit agreement
with Bank of America, N.A., as agent, to borrow up to $55,000,000 on a revolving
basis. The amount of borrowings allowed under the credit agreement is determined
by the amount of eligible receivable and inventory amounts that make up the
borrowing base. Loans made pursuant to the credit agreement bear interest, at
the Company's option, at the bank's prime rate or the reserve adjusted LIBOR
plus an applicable margin based on the ratio, from time-to-time, of the
Company's EBITDA (as defined in the credit agreement) to certain "fixed
charges", including principal paid on funded debts, cash interest expense,
dividends, stock repurchases and certain other distributions made, cash amount
of taxes paid and net capital expenditures made from time-to-time. The
applicable margin for prime rate loans may vary between 0% and .25% per annum,
and the applicable margin for LIBOR based loans may vary between 2% and 2.75%
per annum. Fees will be payable from time-to-time with respect to letters of
credit issued pursuant to the credit agreement at a rate equal to the margin
payable with respect to LIBOR based revolving loans. An annual commitment fee of
3/8% is payable on any unused portion of the facility. The terms of the credit
agreement place various restrictions on the Company's ability to pay dividends
or make certain other payments, incur additional debt, consolidate or merge into
another corporation or sell assets and to make capital expenditures. The credit
agreement also requires the Company to maintain certain financial ratios and
specified levels of consolidated net worth. As of March 31, 2002, the Company
had no borrowings outstanding under this facility. On March 31, 2002, the
Company's available borrowing base under the line of credit was approximately
$25,000,000 of which the Company could have borrowed approximately $13,000,000.

     On February 4, 2002, the Company issued $25,000,000 of long term notes and
arranged a line of credit of up to $55,000,000. On February 4, 2002, the Company
paid in full $20,000,000 of 7.34% long term debt and $15,165,400 (subject to
adjustment upon the final determination of Serrot's working capital at the
closing date) for the purchase of all of the outstanding stock of SII. Based on
the final closing balance sheet submitted by the Company, GSE expects to receive
$3,957,000 from Waste Management, Inc. as a reduction of the purchase price. The
Company also paid approximately $4,000,000 of closing costs related to the
acquisition. To complete the acquisition the Company used $8,700,000 of its cash
and borrowed $5,500,000 under its line of credit.

     The Company estimates it will cost $9,000,000 for severance, and relocating
personnel, inventory and equipment during fiscal year 2002 related to the
acquisition, of which approximately $2,900,000 occurred in the first quarter.
The acquisition added approximately $24,600,000 in equity to the balance sheet.
Management believes significant savings will result from plant consolidations,
sales and marketing consolidations, and administrative cost savings on a
combined basis.

                                       11
<PAGE>

     The Company expects to rely upon internally generated cash flow and its
line of credit to maintain liquidity in the foreseeable future, as cash flow
from operations is expected to be positive and adequate to fulfill cash
requirements in 2002 and 2003. The Company will use its line of credit for
seasonal working capital requirements and to maintain liquidity for short term
imbalances. The Company's operating results and liquidity are reduced 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.

     Our long term obligations  consist  primarily of the $24,306,000 of
long term notes and are payable over the next three years.

  Other

     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.

     Pricing for the Company's products and services is primarily driven by
worldwide manufacturing capacity in the industry, and by 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 electricity 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.

     The Company's second quarter sales and operating revenue is expected to
double when compared to last year producing gross profit of approximately
$18,000,000.

                                       12
<PAGE>

Critical Accounting Policies and Estimates

     The Company's discussion and analysis of financial condition and results
of operations are based upon the Company's consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses and related disclosure of
contingent assets and liabilities. On an on-going basis, management evaluates
estimates, including those related to bad debts, materials and supplies
obsolescence, investments, intangible assets and goodwill income taxes,
financing operations, workers' insurance, pensions and other post-retirement and
employment benefits and contingent liabilities. Estimates are based on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from the
estimates estimate used in preparing the consolidated financial statements
contained herein.

     The Company believes the following are its most critical accounting
policies. These policies require significant judgmental estimates used in the
preparation of its consolidated financial statements, based on historical
experience and assumptions related to certain factors including competitive
market factors, worldwide manufacturing capacity in the industry, general
economic conditions around the world and governmental regulation and
supervision.

     Allowance for doubtful accounts - The Company closely monitors its
customer's accounts on a regular basis, including an analysis of past due
accounts. The Company provides for potential doubtful accounts as a percentage
of sales and operating revenues based on historical experience and past due
accounts.

     Warranty Reserve - The Company's products carry specified limited
warranties as to quality and workmanship. The Company established a reserve for
potential warranty claims based on history of claims experience.

     Revenue recognition and job loss accrual - Revenues from installation
contracts are recognized on the percentage-of-completion method measured by the
percentage of costs incurred to total estimated cost for each contract The
Company's installation projects are reviewed for profitability on a monthly
basis. When it has been determined that a project will generate a loss for the
Company, the Company estimates that loss and books a reserve for the total
expected loss on the job.

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<PAGE>

     Goodwill impairment - The Company reviews the carrying value of goodwill
when facts and circumstances suggest an other than temporary decline in the
recorded value. Effective January 2002, the Company adopted Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangibles. As a
result of the statement the Company will no longer amortize goodwill but will
perform an initial test of impairment and then assess goodwill for impairment at
least annually thereafter.


                                     * * *

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

     GSE filed two reports on Form 8-K during the quarter ended March 31, 2002.
One report on Form 8-K, dated January 23, 2002, reported that GSE had entered
into an agreement to acquire the stock of Serrot International, Inc. The other
report on Form 8-K , dated February 14, 2002, reported the completion of the
Serrot acquisition, the related financial statements of the business acquired
and the pro forma financial information of GSE reflecting the Serrot
acquisition.

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SIGNATURE

     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  April 25, 2002                        BY   /s/ Roger J. Klatt
     --------------------                      ----------------------------
                                            ROGER J. KLATT,
                                            EXECUTIVE VICE PRESIDENT &
                                            CHIEF FINANCIAL OFFICER

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