<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 ______________

                                   Form 10-K

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2000

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES ACT OF 1934

                         Commission File Number 1-9307

                         Gundle/SLT Environmental, Inc.
             (Exact name of registrant as specified in its charter)

            DELAWARE
(State or other Jurisdiction of                          22-2731074
 Incorporation or Organization)            (I.R.S. Employer 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

          Securities registered pursuant to Section 12(b) of the Act:

                                                    Name of Each Exchange on
    Title of Each Class                                 Which Registered
----------------------------                    ------------------------------
Common Stock, $.01 Par Value                         New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

                                     NONE.

  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 was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  No [ ].

  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

  Based upon the February 21, 2001 New York Stock Exchange Closing price of
$2.90 per share the aggregate market value of the voting stock held by non-
affiliates of the Registrant was approximately $32,026,617. All share amounts
included herein have been restated to reflect all previous stock splits.

  The number of shares outstanding of the issuer's common stock, $.01 par value,
as of February 21, 2001, was 11,043,661 shares.

  The Registrant's proxy statement to be filed in connection with the
Registrant's 2001 Annual Meeting of Stockholders is incorporated by reference
into Part III of this report.

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                                       1
<PAGE>

                          2000 FORM 10-K ANNUAL REPORT

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
                                    PART I

<S>         <C>                                                            <C>
Item 1.     Description of Business....................................      3
Item 2.     Properties.................................................     10
Item 3.     Legal Proceedings..........................................     11
Item 4.     Submission of Matters to a Vote of Security Holders........     11

                                    PART II

Item 5      Market for the Registrant's Common Equity and Related
            Stockholder Matters........................................     12
Item 6.     Selected Financial Data....................................     12
Item 7.     Management's Discussion and Analysis of Results of
            Operations and Financial Condition.........................     13
Item 7A.    Quantitative and Qualitative Disclosure about Market Risk..     16
Item 8.     Consolidated Financial Statements and Supplementary Data...     17
Item 9.     Changes in and Disagreements With Accountants on Accounting
            and Financial Disclosure...................................     35

                                   PART III

Item 10.    Directors and Executive Officers of the Registrant.........     35
Item 11.    Executive Compensation.....................................     35
Item 12.    Security Ownership of Certain Beneficial Owners and
            Management.................................................     35
Item 13.    Certain Relationships and Related Transactions.............     35

                                    PART IV

Item 14.    Exhibits, Financial Statement Schedules and Reports on
            Form 8-K...................................................     35
</TABLE>

                                       2
<PAGE>

                               2000 ANNUAL REPORT
                                    FORM 10K

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

  Gundle/SLT Environmental, Inc. (the "Company" or "GSE") is the world leader
in the manufacture and installation of geosynthetic lining products and services
for environmental protection and other uses.  It is a Delaware corporation
headquartered in Houston, Texas.

  The Company manufactures, sells, and installs flexible geomembrane liners,
geonets, geosynthetic clay liners, concrete protection liners, and geocomposite
products made from specially formulated polyethylene resins. Its fabrication
department offers a variety of specialty products, such as manholes, sumps, pipe
penetration boots, floats, floating covers, and vertical membrane barrier wall
panels.  All of these products are sold and installed on a worldwide basis,
typically as part of geosynthetic containment systems. The Company's products
and other related geosynthetic products are used in containment systems for the
prevention of groundwater contamination, and for the confinement of water,
industrial liquids and solids.

  The Company's products are installed by independent third parties and by the
Company's full-time field personnel, who are organized into close-knit
construction crews.  Crewmembers are extensively trained in hot wedge and
extrusion welding techniques.  Using the latest equipment, these crews install
liners in the field to make one continuous, seamless containment system.  The
use of an extensive weld-seam quality assurance testing program, combined with
our manufacturing quality control program and high quality resin, enables the
Company to offer what it believes are the highest quality products and services.

NEW U.S. FACILITY

  The Company, in August 2000, announced the expansion of its manufacturing
business into nonwoven geotextiles and fabrics.  In mid-August, construction
began on a new 156,000 square foot manufacturing plant located in Kingstree,
Williamsburg County, South Carolina.  The needlepunched nonwoven manufacturing
line purchased by the Company is state-of-the-art technology with a capacity of
approximately 16 million pounds.  Construction and manufacturing startup are
scheduled for completion and commencement in April 2001.

COMPANY PRODUCTS

  The Company's principal products-flexible liners-are manufactured from
specially formulated polyethylene resins with chemical additives designed to
resist weathering, ultraviolet degradation and chemical exposure for extended
time in exposed applications.  Either customers or third-party engineering firms
design the containment and confinement systems into which the Company's products
are installed.  These systems may include other Company manufactured products
consisting of drainage nets, geocomposites, geosynthetic clay liners, vertical
barrier walls, specialty concrete protection liners, and other companies'
products.  Marketing efforts for its products are carried on through a worldwide
distribution organization made up of internal sales, independent dealers,
agents, and distributors.

                                       3
<PAGE>

  The Company's primary product is a smooth-finish, high density polyethylene-
HDPE-liner. The sale and installation of this product in 2000, 1999, and 1998
accounted for approximately 57%, 54%, and 56%, of total sales.  Its HDPE liner
products come in thickness ranges from 20 to 240 mil (one mil equals 1/1000th of
an inch), and seamless widths up to 34.5 feet.  Liner width dictates how many
seams are required during installation, and seaming represents the major
technical difficulty for liner installers. The fewer the number of seams, the
less labor involved, and the less testing required.

  The Company manufactures very flexible polyethylene (VFPE) sheet products (GSE
UltraFlex(R)) from low-density resin.  VFPE products are finding greater use in
landfill caps, mining heap leach pads, and floating covers where greater
flexibility is desired.  Both VFPE and HDPE products are available with
texturing for use on sloping terrain, or where a high friction angle is
required.

  Demand is increasing for products made using the Company's co-extrusion
manufacturing capability.  This manufacturing process produces products with
different layers made of various resin densities that become molecularly
integrated such that they cannot delaminate or separate.  One of the major
products created using this process is GSE White(R), the Company's patented
white-surface (reflective) product for use in landfills and waste containment
applications.  By reflecting radiant heat, the reflective surface reduces the
expansion and contraction (wrinkling and bridging) of the liner during
installation.  Its reflective nature protects subgrade soils from drying out and
cracking (desiccation).  Under identical exposure conditions, white-surfaced
liners recorded temperatures as much as 50% lower than standard black surface
liner.  The white-surface greatly improves detection of installation damage by
revealing scoring and abrasions as black marks exposed against the white
surface.

  Using this same co-extrusion technology, the Company received a patent for GSE
Conductive(R), its electrically conductive liner.  This product incorporates a
conductive layer that allows for spark testing of 100% of the surface once the
liner is installed.  The unique ability to electric spark test the entire
surface eliminates the need for flooding the containment system with water for
leak detection, which can be expensive and time consuming.  This product is
finding greater use in waste containment lagoons and landfill sump applications.

  The Company offers different specifications of drainage net (GSE HyperNet(R))
consisting of two sets of HDPE strands intertwined to form a channel along which
fluid is conveyed for drainage. This net can be bonded with geotextiles on one
or both sides to form GSE FabriNet(R) and GSE FabriCap, the Company's
geocomposite products.  These products are used as drainage media for primary
leachate collection where the soil is placed directly on top of the drainage
layer. GSE FabriCap products are specifically designed for landfill capping
project applications requiring a load bearing drainage net. The Company has just
acquired a license to sell a drainage net and a geocomposite manufactured using
three strands of HDPE. These new products will be offered as GSE Triplanar net
and composite for use in landfill cell expansions where higher load bearing
characteristics are required, and in landfill capping projects where higher flow
rate characteristics are needed.

     Another product manufactured and offered by the Company is its patented
geosynthetic clay liner (Gundseal(R)) that combines HDPE liners with highly
expansive sodium bentonite clay.  The sodium bentonite clay is adhered directly
to the liner, and has demonstrated its primary function of sealing small
punctures accidentally made in the overlaying liner.  When hydrated, the
bentonite material is itself a highly impermeable liner taking the place of up
to three feet of compacted clay ordinarily required as a subgrade layer.

  GSE Studliner(R), is fabricated in the Company's facility located in Rechlin,
Germany.  This product is finding extensive use in tunnels, corrosive
containment applications, and  protecting concrete piping, pilings, and
foundations.  The Company fabricates products made from this material for many
types of civil engineering applications.

  The Company also offers a wide variety of specially fabricated products, such
as manholes, sumps, pipe penetration boots, floating booms, and vertical
membrane barrier wall panels.  Its product lines include portable secondary
containment pads, temporary or daily landfill covers, and self-installed pond
and pit liners.

                                       4
<PAGE>

  The Company offers third-party products under non-exclusive agreements, such
as geogrids, HDPE piping, and geotextiles.  Polypropylene products are
manufactured and sold by the Company's subsidiary in the United Kingdom, in
addition to products manufactured from polyethylene.

  The Company considers quality control and testing as critical to the
successful operation of its manufacturing and installation business.  At its in-
house laboratories, it conducts various quality control tests, as well as other
sophisticated physical and chemical property tests.  On-site testing of its
manufactured products is conducted continuously during the manufacturing
process.  Our laboratories monitor the quality of incoming raw materials, and
perform routine tests on all finished products. Certifications as to the quality
and test results are routinely furnished to customers as part of the quality
assurance program.

     The Company believes that its products made from HDPE and VFPE resins offer
several critically important physical advantages over other resin liner
products.  Those advantages include: chemical resistance to various acids,
alkalis, aromatic solvents and oils; puncture resistance and tendency to stretch
rather than tear under certain pressures; and relative impermeability.  These
characteristics are the reason that the Company's products represent a major
portion of the geosynthetic liner market, particularly in solid waste
applications.

     The Company will offer nonwoven products manufactured at its South Carolina
facility as a component of the composite drainage materials and roll goods
offered by the Company.  In addition, the Company will use capacity of the
manufacturing line to open new markets for the Company.

SERVICES

  The Company often provides its customers with installation services. Trained
field personnel travel to the customers' job sites and install products.
Company trained crews are available in the United States, the United Kingdom,
central Europe and Australia.  Inside the United States, a network of carefully
selected independent dealers also provides installation services.  Outside the
United States, in addition to the Company's installation capabilities, a network
of qualified distributors and subcontractors provide installation services.
Upon request from a customer using third-party installers, the Company may
furnish a technical supervisor to monitor installation activities and provide
quality assurance.

  Sheeting products are field-joined using hot wedge or extrusion welders.  The
computer controlled, self-propelled wedge welding equipment creates a dual track
seam resulting in a homogeneous bond created between the sheets.  The presence
of an unwelded channel between the dual seams allows trained technicians to
perform 100% non-destructive quality control testing of the welds.  The
extrusion welding equipment extrudes hot resin through the dual head of the
welder resulting in an integration of the hot resin with the sheet liner.  These
two forms of seam formation are considered superior to other methods of bonding,
including gluing.  The strength and adequacy of seam welds are tested by some
combination of the following test methods: (1) cutting samples from the liner
and destructively testing the weld seams; (2) pressure testing the air channel
created during the wedge welding process; (3) performing vacuum testing for air
tightness of the extrusion welds; and (4) electric spark testing of the
conductive liner.

RESEARCH AND DEVELOPMENT

  The Company's research and development efforts focus on new products, new
quality control procedures, and more efficient manufacturing and installation
techniques.  Expenditures in 2000 were $1,350,000, compared to $1,616,000 in
1999 and $1,845,000 in 1998.

                                       5
<PAGE>

RAW MATERIALS

  The Company's high-grade polyethylene resins are purchased from at least two
primary suppliers at each manufacturing location. These resins arrive ready for
screening tests already formulated with Company designated stabilizers and
antioxidants.  The Company consistently works with its suppliers to ensure
supply, pricing stability, quality and new product development. Occasionally,
resins are in short supply and subject to substantial price fluctuations.  The
Company has not encountered any significant difficulty to date in obtaining
resins in sufficient quantities at all of its facilities to support its
worldwide demands for its products.  Any significant interruption in resin
supplies or abrupt increase in prices could have a material adverse impact on
the Company's operations.

APPLICATIONS

  This table describes the principal applications of the Company's Products for
the past three years based on the sales and operating revenues for each
application.

                          SALES BY MARKET APPLICATION
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                     ----------------------------------------------------
                                                         2000    %          1999    %          1998    %
                                                     --------   ---     --------   ---     --------   ---
<S>                                                  <C>        <C>     <C>        <C>     <C>        <C>
Solid Waste Containment.....................         $130,917    69%    $116,075    65%    $117,323    65
Mining......................................           19,896    10       17,371    10       18,341    10
Hazardous Waste Containment.................            5,629     3       11,042     6       13,891     8
Liquid Containment..........................           23,820    12       21,765    12       16,650     9
Other Applications..........................           11,058     6       12,316     7       13,350     8
                                                     --------   ---     --------   ---     --------   ---
Total Sales and Operating Revenue...........         $191,320   100%    $178,569   100%    $179,555   100%
                                                     ========   ===     ========   ===     ========   ===
</TABLE>


  Solid Waste Containment.  This application includes liners for new landfills,
and new cells within existing landfills designed for the disposal or storage of
non-hazardous wastes.  Included within this definition are products used to
cover (cap) lined and unlined landfills.  Capping is required to prevent
rainwater from creating excessive leachate generation, which may then seep into
groundwater in unlined landfills.  A secondary benefit derived from capping is
the collection of methane gas produced as waste decays.

  Mining. The mining industry uses our products for the containment and
confinement of chemicals used in mining gold, copper, and phosphate.  These
minerals are dissolved or "leached" from the ore by chemical solutions that are
circulated through the ore-bearing crushed rock deposited on top of the liner
pad.  The pad serves as the collection and drainage system for the mineral-
bearing solution.  Leaching is a lower cost recovery technique permitting the
extraction of minerals from low-grade ore that previously was not processed.
The Company's products are also used to contain spent ore, tailings and chemical
solutions after the leaching process. Gypsum, a by-product of the phosphate
mining industry, is required to be stored on liners because of its acidic
nature.

  Hazardous Waste Containment. Synthetic liners are extensively used to contain
both solid and liquid hazardous waste and substances with the use of liners in
these applications mandated in the U.S. by the Hazardous and Solid Waste
Amendments of 1984.

  Liquid Containment. The Company's products are used in a wide range of liquid
containment applications including aquaculture ponds, tank linings, irrigation
canals, storm water runoff containment, organic waste from pig and cattle
feedlot operations and potable water reservoirs.

  Other Applications. The Company's products are used in various other
applications involving secondary containment and liquid confinement.  These
applications are tunnel waterproofing, protection of concrete products from
corrosive chemicals and odor control through the use of floating covers.  A
growing application is the use of its products to promote anaerobic digestion of
organic wastes and the capture of the resulting methane gas.

                                       6
<PAGE>

MARKETING AND SALES

  Marketing is a worldwide effort conducted by sales personnel located in the
United States, France, Germany, the United Kingdom, Italy, the Netherlands,
Thailand, Australia, Egypt, and the United Arab Emirates.  The Company's multi-
tiered sales efforts are focused on engineers, general contractors, facility
owners, state and federal regulators and government officials who are
responsible for product specifications and the design and awarding of contracts.
A strong network of independent commercial agents, dealers and distributors
throughout the world work closely with the Company's sales staff.

  Advertisements of the Company's products appear regularly in specialized
trade publications and on the Company's worldwide web site (www.gseworld.com).
The Company participates in trade shows, conducts industry seminars and makes
presentations to governmental administrators.  Efforts are ongoing to inform
engineers and regulators of the benefits to be derived from using our GSE White,
GSE Conductive and GundSeal products.

  The Company sells its products in a very competitive market place.
Substantial quantities of its products are sold through the competitive bidding
process, whether in the United States or in foreign countries.  The Company bids
either directly to the general contractor or owner, or through one of the
Company's independent distributors or dealers.  The customers' bid proposals
establish the design and performance criteria for the products.  The Company
negotiates the remainder of the contract terms where possible.  In most cases,
the Company agrees to indemnify the site owner, general contractor and others
for certain damages resulting from the negligence of the Company and its
employees.  The Company often is required to post bid and performance bonds or
bank guarantees.  In all cases, the Company provides its customers with limited
material warranties on its products, and limited installation warranties for its
workmanship.  These limited warranties may last up to 20 years, but are
generally limited to repair or replacement of defective liners or workmanship on
a prorated basis up to the dollar amount of the original contract.

  In some foreign contracts, the Company may be required to provide the customer
with specified contractual limited warranties as to material quality.  The
Company's product warranty liability in many foreign countries is dictated by
local laws in addition to the warranty specified in the contracts.  Several of
our foreign subsidiaries sell products and installation services under
competitively bid construction contracts.

  The enactment of numerous environmental laws with corresponding regulations
has enhanced the market for the Company's products. In the United States, the
Resource Conservation and Recovery Act of 1976, as amended (RCRA); Subtitle C-
Hazardous Waste Management; and Subtitle D-State or Regional Solid Waste Plans
provide the legal framework for the storage, treatment and disposal of hazardous
and non-hazardous wastes.  Of particular importance to the Company has been the
impact of Subtitle D that regulates the disposal of municipal solid waste (MSW)
at roughly 2,300 U.S. landfills.  State regulations adopted under this title
impose strict compliance standards with regard to groundwater protection, which
is exactly what the Company's products are designed to provide.

  Subtitle D regulations specify the use of a composite liner system consisting
of highly impermeable clay and a geomembrane liner.  The liner must be at least
30 mils thick.  The United States Environmental Protection Agency (EPA) took
another step in its efforts to protect groundwater when it published a
presumptive remedy requiring the use of a "liner cap" in closed MSW landfills.
This liner cap is designed to prevent groundwater contamination and assist in
the containment of subterranean liquid waste plumes.  The Company's products
have been installed in both applications in landfills located throughout the
United States.

     In 1980 the Comprehensive Environmental Response, Compensation and
Liability Act (Superfund) became law.  This law was in response to the dangers
of abandoned or uncontrolled hazardous waste sites.  Our products are used in
the cleanup work undertaken by owners, operators and waste generators that have
been compelled by the EPA or a state environmental protection agency to clean up
these sites.

                                       7
<PAGE>

  RCRA was amended in 1984 by the Hazardous and Solid Waste Amendments of 1984.
These amendments require all new hazardous waste landfills to use geosynthetic
lining systems composed of two or more liners with leachate collection and
drainage systems above and between the liners. These same amendments require
surface impoundments or ponds used in the containment of certain hazardous
liquids to be double lined.  The EPA also established procedures for testing
weld seams joining sections of liners.  The Company believes that since 1984,
its products have been the most widely used in these applications.

  Recently, EPA published regulations covering gypsum waste management generated
as a by-product of phosphate mining.  Gypsum waste must now be stored on
synthetic lined containment systems.  The EPA and the state agencies have also
adopted regulations controlling the handling and storage of hazardous
substances, specifically petroleum products and other chemicals contained in
tanks and lagoons.  The Company's products are designed and used to directly
address these applications.

  Similar environmental laws and regulations exist in other countries,
particularly in the European Community, Japan and the Americas.  As the world's
populations increase and industrial development continues, the demand for
enforcement of existing laws and the adoption of new laws to protect valuable
natural resources will increase.  The focus of current law is on those projects
involving intensive water use and activities that have an impact on groundwater
quality.  These activities include agricultural irrigation, animal feedlots and
compounds, aquaculture facilities, industrial storm water runoff containment
areas, canals, mining leach pads and tunnels.

CUSTOMERS

  The primary customers for the Company's products are domestic and
international, municipal and private companies engaged in waste management,
mining, water and wastewater treatment, aquaculture and other industrial
activities, including the engineering and civil works construction companies
serving these customers.  Within the last three years, the Company has sold more
than 2 billion square feet of products to customers in more than 70 countries.
The Company is a full service organization that strives to provide its customers
with a single source of geomembrane liners, related products and services for
environmental protection and other uses.

  During the years 2000,1999, and 1998, no single customer accounted for more
than 10% of the Company's net sales.  In those same years, 55%, 53%, and 52% of
the Company's net sales were to customers in the United States.  The Company
believes that the loss of any one customer would not have a material adverse
effect on the Company's financial position or results of operations.

BACKLOG

  As of December 31, 2000, the Company's backlog was $29.9 million compared to
$44.4 million at December 31, 1999.  The Company anticipates that the majority
of the value of construction contracts and customer purchase orders included in
backlog at December 31, 2000 will be completed or filled prior to the end of
2001, subject to weather and other construction related delays. Contracts and
commitments for products and services are occasionally varied, modified, or
cancelled by mutual consent.

SEASONALITY AND OTHER BUSINESS CONDITIONS

  The greatest volume of product deliveries and installations typically occur
during the summer and fall, which results in seasonal fluctuations of revenue.
Often, scheduled deliveries are subject to delays at the customers' request to
correspond with customers' annual budgetary and permitting cycles.  The Company
uses its manufacturing capacity at its various locations in an attempt to
mitigate the seasonal fluctuation on its manufacturing, delivery, and
installation schedules. (See Supplementary Data.)

                                       8
<PAGE>

COMPETITION

  The Company believes that there are approximately 30 companies engaged in the
production of various synthetic geomembrane liners worldwide.  These companies
offer the wide range of products identified in the section on Company Products.
The Company's competition is not limited to those companies that manufacture
polyethylene liners, but encompasses companies offering PVC, Hypalon, and EPDM
geomembranes.  At least 12 of the companies manufacturing HDPE liners compete
directly with the Company in the United States.

     The principal resin types used in the products sold by the Company are
high-density polyethylene and very flexible polyethylene.  In addition to HDPE
and VFPE products manufactured by its primary competitors, the Company's
products compete directly with flexible membrane liners manufactured from other
forms of resins.  Other resins are: polyvinyl chloride (PVC), ethylene propylene
diene terpolymer (EPDM), scrim-reinforced chlorosulphonated polyethylene
(Hypalon), and polypropylene.

  The Company encounters competition in its other product lines in the United
States with three companies competing in the sale and installation of
geosynthetic clay liners.  In the geonet market, six companies offer products
that directly compete with the Company's geonet product line.

  Competition is based on the performance of the lining systems, installation
capacity and pricing. As a full service company that manufactures, sells and
installs a full range of geosynthetic products, the Company believes that it
maintains its position within the market because of the quality and performance
of its products and installation services.  The combining of its financial
strength with its full service program enables the Company to remain
competitive.  Pricing remains very competitive with over-capacity in the
industry driving margins downward.  Two of the larger competitors in the United
States merged in late 1999, and relocated a substantial amount of their
manufacturing capacity to Europe and South America in 2000.  The impact of that
merger in the marketplace will be more fully understood in the year 2001.  One
new competitor commenced production of HDPE liner in Taiwan in 1999.  The
appearance of new competitors in a slow growth market demonstrates a lack of
barriers to entry into this market.

  Competition in the nonwoven fabric industry is very competitive with
numerous competitors furnishing products for use in agriculture, automotive,
electrical, building, civil engineering, medical/surgical, hygiene, furniture
and bedding. While the Company can consume up to three-quarters of its nonwoven
manufacturing line's capacity for internal demand for its lining business, it
will use its capacity first for development of new nonwoven markets.  The
balance of the line's capacity will be used to support the lining business.

EMPLOYEES

  The Company had a total of 901 employees as of December 31, 2000, with 627
employed in the United States.  During peak construction periods, the Company's
workforce increases in all locations.  In the off-season construction period,
the Company maintains a nucleus of experienced employees somewhat below the peak
season staffing levels.  Some of the Company's full-time employees in foreign
locations are unionized, but the Company has never experienced a strike or
lockout.  The Company believes its employee relations are satisfactory.

  The Company is firmly committed to a policy of Equal Employment Opportunity
and administers its personnel policies and conducts its employment practices in
a manner which treats each employee and applicant for employment on the basis of
merit, experience and other work-related criteria without regard to race, color,
religion, sex, national origin, ancestry, age, disability or any other protected
class under relevant state and federal laws.

                                       9
<PAGE>

PATENTS AND PROPRIETARY INFORMATION

  The Company has received patents from the U.S. Patent and Trademark Office for
its GSE White, GSE Conductive and GSE CurtainWall products, as well as its
FrictionFlex texturing process. Certain of these patents are either registered
or in the process of being registered in select foreign countries.  It has
registered its new trademark and logo ("GSE") with the same patent office and is
in the process of registering this trademark in select foreign countries.  The
Company has other patents, license-to-use patents (such as GundSeal), and
pending applications.  Although in the aggregate GSE's patents are important in
the operation of its businesses, the loss, by expiration or otherwise, of any
one patent or group of patents would not materially effect its business.

ITEM 2. PROPERTIES

  The Company manufactures its products in seven locations around the world.
Six of these operations use flat sheet extrusion and round die extrusion
manufacturing technologies to produce products.  There are eleven extrusion
lines for producing liner products, and three for the production of drainage net
products.  The seventh operation located in South Carolina uses a needlepunched
nonwoven textile manufacturing line.

UNITED STATES

  GSE Lining Technology, Inc. conducts U.S. operations at the Company's
headquarters located on a 21.5-acre tract of Company-owned land in an industrial
park in Houston, Texas.  This location has 31,400 square feet of office space in
two buildings, housing administrative, sales, and installation functions.  Here
the Company has two large manufacturing facilities servicing the U.S. and
foreign markets.  One manufacturing facility is a 67,000 square foot building of
metal skin over steel frame construction that contains seven blown film round
die extrusion lines, and one geocomposite line.  Fabrication is housed in a
12,000 square foot facility.

  The second manufacturing facility in Houston occupies 16.9 acres of Company-
owned land with 3,300 square feet of office space, and two buildings with a
total of 83,000 square feet for manufacturing operations.  The manufacturing
buildings house a flat cast sheet-extrusion line, as well as a
geonet/geocomposite line and a texturing line. The flat sheet extruder is
considered the most precise method in the industry for manufacturing certain mil
thickness of sheeting.

  Another manufacturing facility is on a 55 acres tract of Company owned land in
an industrial park in Kingstree, South Carolina.  This location has 5,400 square
feet of office space and 156,000 square feet for manufacturing and warehousing
operations.  The building of metal skin over sheet frame construction contains
one needlepunched nonwoven manufacturing line with room for expansion to two
lines.  The Company conducts business at this location under the name GSE
Nonwoven Technology Company, a division of GSE Lining Technology, Inc.

  The Company's patented GundSeal products are manufactured on one production
line housed in a Company-owned 16,000 square foot building located in Spearfish,
South Dakota. The plant is located near the sources for clay (bentonite).

GERMANY

  GSE Lining Technology GmbH headquartered in Hamburg, Germany, manages the
Company's European operations.  Its manufacturing facility is located in
Rechlin, Germany, on 8.2 acres owned by the Company.  From this location, the
Company supplies its customers with products manufactured on a flat cast
extrusion line and two texturing lines.  Operating at the same facility is a
fabrication department involved in fabricating products from the Company's
Studliner sheeting.  The Company's staff in Hamburg can help its customers in 21
languages.

                                       10
<PAGE>

UNITED KINGDOM

  The Company's operations in the United Kingdom are carried out by its
subsidiary, GSE Lining Technology Ltd., operating at a .75 acre leased facility
in Soham, England, just north of London.  This location has 2,500 square feet of
office space and 10,652 square feet of manufacturing facilities.  Its products
are manufactured on a round die extrusion line located on this site and one
texturing line.  The Company's administrative, sales, and installation service
personnel are housed at this location.  This facility manufacturers both
polyethylene and polypropylene geomembrane products.

EGYPT

  The Company owns a 50% interest in two joint ventures, Hyma/GSE Manufacturing
Co. and Hyma/GSE Lining Technology Co., a manufacturing company and a trading
company.  The manufacturing operations are located on a 1.1 acre leased site
outside of Cairo. Located on this site are two buildings totaling 34,262 square
feet that house a flat sheet extrusion line.  The trading company operates out
of a small leased facility in Nasr City, Cairo, and its staff sells products
manufactured by the Hyma/GSE Manufacturing Co., the Company, and other
subsidiaries of the Company.

THAILAND

  GSE Lining Technology Company Ltd. headquartered in Bangkok, Thailand, manages
the Company's Thailand operations out of a leased facility.  Its manufacturing
facility is located in Rayong, Thailand, on 8,000 square meters leased by the
Company.  From this location, the Company supplies its customers with products
manufactured on a round die extrusion owned by the Company.

OTHER

  The Company's sales efforts in the United Arab Emirates, Oman, Bahrain, Qatar,
Kuwait and Yemen are conducted by GSE Gulf FZE located in leased warehouse and
sales facilities in the Jebel Ali Free Trade Zone in Dubai.  This joint-venture
company warehouses select quantities of products in the duty free trade zone.

  The Company's sales and installation operations in Australia are carried out
by GSE Lining Technology Pty Ltd. operating out of leased offices located in
Moorebank, New South Wales.  It offers the full range of Company geomembranes
and related products, coupled with installation service for customers located
throughout the South Pacific Rim.

ITEM 3. LEGAL PROCEEDINGS.

  For information about various legal proceedings involving the Company, see
Note 17 of the Notes to Consolidated Financial Statements.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.

                                       11
<PAGE>

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS.

  The common stock of the Company trades on the New York Stock Exchange under
the symbol GSE.  The following table shows the quarterly range of high and low
sale prices for the stock through December 31, 2000.

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31,
                                                                                     -------------------------------------
                                                                                            2000                1999
                                                                                     -----------------   -----------------
                                                                                       High      Low      High       Low
                                                                                     -------   -------   -------   -------
<S>                                                                                  <C>       <C>       <C>       <C>
First Quarter................................................................          3 7/8   2 15/16    4 7/16    2  3/4
Second Quarter...............................................................          4       2  3/4     4  1/4    3 1/8
Third Quarter................................................................          4 1/16  3          4 15/16   3
Fourth Quarter...............................................................          3 1/2   1 15/16    4  1/2    2 15/16
</TABLE>

  The approximate number of record holders of the Company's common stock at
February 15, 2001, was 295. Management estimates that the aggregate number of
beneficial holders exceeds 2,000.

  The Company does not currently intend to declare or pay dividends on its
Common Stock and expects to retain funds generated by operations for the
development and growth of the Company's business. The Company's future dividend
policy will be determined by the Company's Board of Directors on the basis of
various factors, including among other things, the Company's financial
condition, cash flows from operations, the level of its capital expenditures,
its future business prospects, the requirements of Delaware law and any
restrictions imposed by the Company's credit facilities.

ITEM 6. SELECTED FINANCIAL DATA.
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                         Year Ended December 31,
                                                                       --------------------------------------------------------
                                                                          2000        1999        1998        1997        1996
                                                                       --------    --------    --------    --------    --------
<S>                                                                    <C>         <C>         <C>         <C>         <C>
INCOME STATEMENT DATA:
 Sales and operating revenue...................................        $191,320    $178,569    $179,555    $199,318    $209,372
  Gross profit.................................................          32,579      35,921      34,928      36,101      49,871
  Operating income.............................................           6,792       9,904       8,918      10,613      22,562
  Interest expense, net........................................           1,354       1,716       2,357       2,191       3,230
  Income before income taxes...................................           5,965       8,461       6,932       7,846      20,080
  Net income...................................................           3,638       4,907       4,020       4,550      11,646
  Basic and diluted earnings per common share..................             .31         .38         .30         .29         .67
BALANCE SHEET DATA:
  Working capital..............................................        $ 51,949    $ 60,715    $ 59,569    $ 60,461    $ 86,585
  Total assets.................................................         148,563     161,697     169,320     177,961     204,046
  Total debt...................................................          26,530      31,360      37,414      43,395      49,740
  Stockholders' equity.........................................          89,308      93,271      89,793      86,110     109,513
</TABLE>

                                       12
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

  This Form 10-K contains certain forward-looking statements as such term is
defined in the Private Securities Litigation Reform Act of 1995, and information
relating to the Company and its subsidiaries that are based on the 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 or
phrases 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,
worldwide 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.


RESULTS OF OPERATIONS

Year Ended December 31, 2000, Versus Year Ended December 31, 1999

  The Company's net sales and operating revenue of $191,320,000 increased
$12,751,000, or more than 7%, in 2000 from the $178,569,000 reported in 1999. A
change in the US dollar value of the Company's foreign entity functional
currencies reduced year 2000 sales and operating revenue by $7,100,000. Units
shipped increased 2% in 2000 from 1999. Sales to the North American market were
$106,717,000 in 2000 compared with $96,551,000 in 1999. The increased revenue
came from price increases and favorable product mix of third-party products, as
units shipped of GSE products were down 2% from 1999. Sales and operating
revenue in foreign markets were $84,603,000 in 2000 compared with $82,018,000 in
1999. When compared to 1999 foreign sales were $7,100,000 lower in the year 2000
because of drops in the dollar value of local functional currencies. Sales of
GSE's products, in units, were up 5% in foreign markets.

  Gross profit was $32,579,000 in 2000 compared to $35,921,000 in 1999. A change
in US dollar value of the Company's foreign entity functional currencies reduced
year 2000 gross profit by $800,000. Gross profit margin dropped to 17% of sales
in 2000 from 20% of sales in 1999. US gross profit margin was down two
percentage points and foreign gross profit margin was down five percentage
points. This decrease in gross profit margin of three percentage points was
primarily due to competitive pressure not allowing for timely selling price
increases following cost increases in the Company's raw material, polyethylene
resin. Selling prices averaged 7% higher in year 2000 than in 1999.

  Selling, general and administrative expenses of $24,445,000 were $204,000
lower in 2000 than in 1999.  Expenses were down in the Company's foreign
operating units by $329,000. This decrease was the net of lower foreign exchange
rates lowering costs by $1,000,000 offset by the added costs of operating in
Thailand in 2000.  A small increase in the U.S. resulted from establishing a
nonwoven business in Kingstree, SC.

  Interest expense was $644,000 lower in 2000 than in 1999. This reduction was
the result of a lower level of average debt outstanding. A major portion of this
reduction came from the Company's repayment of $5,000,000 of its 11.17% interest
rate debt.

  The Company recorded Other Income of $466,000 in 2000 compared with Other
Income of $289,000 in 1999. In 2000 there was an increase of approximately
$77,000 in foreign exchange gains. Other income also benefited from a refund of
state taxes.

                                       13
<PAGE>

  The Company's provision for income taxes was $2,327,000 in 2000 compared with
$3,554,000 in 1999. The tax provision in both years was provided at statutory
rates adjusted for permanent differences. The effective rate for 2000 was 39%
compared to 42% in 1999. This reduction was heavily influenced by the Company's
tax holiday in Thailand.

Year Ended December 31, 1999, Versus Year Ended December 31, 1998

  The Company's net sales and operating revenue of $178,569,000 decreased
$986,000, or less than 1%, in 1999 from the $179,555,000 reported in 1998. The
decrease was primarily the result of changes in the US dollar value of foreign
entities functional currencies that caused 1999 sales to decrease 3% compared to
1998. Product prices were about the same in 1999 as 1998. 1999's net sales and
operating revenue were enhanced by 48% of the revenue stream from products sold
with added value installation services vs. 46% in 1998.  Sales to the North
American market were $96,551,000 in 1999 compared with $94,900,000 in 1998.
North American unit sales and unit prices were up 1% from 1998. Sales to foreign
markets were $82,018,000 in 1999 compared with $84,655,000 in 1998. Decreases in
foreign exchange rates caused $2,100,000 of the drop.  Sales, in units, in
foreign markets were down 2% from 1998.

  Gross profit was $35,921,000 in 1999 compared to $34,928,000 in 1998. This 3%
increase of $993,000 was primarily caused by improved margins as units shipped
were down 1%. Gross profit margin improved to 20% of sales in 1999 from 19% of
sales in 1998. While 1999 selling prices of products were virtually the same as
1998's, lower resin cost and improved installation service margins caused
improvements in the gross margin.

  Selling, general and administrative expenses of $24,649,000 were $18,000
higher in 1999 than in 1998. 1998 expenses included approximately $1,000,000
severance paid to the former President and CEO. Excluding this one-time expense,
selling, general and administrative expenses would have been up by $1,000,000.
Expenses were down in the Company's foreign operating units by almost $300,000
caused primarily by the change in foreign exchange rates. The increase came from
the U.S. operations and was primarily related to amortization of the cost of the
Company's new ERP system.

  Interest expense was $657,000 lower in 1999 than in 1998. This reduction was
the result of a lower level of average debt outstanding. During 1999 the company
repaid $5,000,000 of its 11.17% interest rate debt and reduced   debt in Germany
by $924,000.

  Foreign exchange losses of $16,000 were recorded in 1999 compared with foreign
exchange gains of $209,000 in 1998. Last year's gains were primarily the result
of the improved value of the German Deutsche Mark. These gains and losses result
from the Company's foreign operating units entering into sales and purchases in
currencies other than their functional currency.

  The Company recorded Other Income of $289,000 in 1999 compared with Other
Income of $162,000 in 1998. In 1999 there was a decrease of approximately
$211,000 in income from the Company's Egyptian joint ventures compared to 1998.

  The Company's provision for income taxes was $3,554,000 in 1999 compared with
$2,912,000 in 1998. The tax provision in both years was provided at statutory
rates adjusted for permanent differences.

LIQUIDITY AND CAPITAL RESOURCES

  At December 31, 2000, the Company had working capital of $51,949,000 of which
$11,270,000 was cash and cash equivalents. 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 $26,530,000 in debt and
$89,308,000 in stockholders' equity at December 31, 2000.

                                       14
<PAGE>

  The Company has a $25,000,000 multi-currency revolving credit facility (the
"Revolver") with Bank of America as agent bank. The Revolver, as amended,
matures on September 30, 2002, and bears interest, at the Company's option, at
the bank's prime rate or LIBOR plus an applicable margin based on the ratio of
funded debt to total capitalization. An annual commitment fee of up to 3/8% is
payable on any unused portion of the facility. Under the terms of the revolving
line of credit agreement, the Company is required to maintain certain financial
ratios and a specific level of consolidated tangible net worth. At December 31,
2000, and December 31, 1999, there was no balance outstanding on the Revolver.
However, at December 31, 2000, letters of credit issued under this facility
totaled $975,000 thereby reducing the balance available to $24,025,000 (see Note
8 of the Notes to Consolidated Financial Statements). The letters of credit
issued under this facility secure performance of installation projects and self-
insurance programs.

  The Company has credit facilities with two German banks to support its
European cash management and bank guarantee requirements in the amount of DM
11,000,000. These revolving credit facilities are secured by property and plant
in Germany, which also secures an installment loan and matures in September,
2002, and bears interest at various market rates. These credit facilities are
used primarily to guarantee the performance of European installation contracts.
At December 31, 2000, the Company had DM 4,105,000 available under these credit
facilities with DM 1,109,000 used for working capital and DM 5,786,000 of bank
guarantees outstanding.

  The Company has committed to invest approximately $8,000,000 for the purchase
of equipment and the construction of facilities for its new nonwoven operation
in South Carolina.  On August 1, 2001, the Company will make a $5,000,000
principal payment on its 7.34% Notes. The Company believes that its cash
balance, cash generated by operations and the balance available under the
Revolver are adequate to meet any foreseeable cash requirements during 2001.

  The Company currently purchases its raw material (polyethylene resins) from at
least two suppliers at each location. Polyethylene resins are occasionally in
short supply and are subject to substantial price fluctuation in response to
market demand. The Company has not encountered any significant difficulty to
date in obtaining raw materials in sufficient quantities to support its
operations at current or expected near-term future levels. However, any
disruption in raw material supply or abrupt increases in raw material prices
could have an adverse effect upon the Company's operations.

  The Company's lining 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.

                                       15
<PAGE>

ITEM 7 A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

  The Company's exposure to interest rate market risk is limited to credit
facilities that bear interest at the floating rates.  As of December 31, 2000,
there was $534,000 outstanding under the Revolvers.  A change in interest rates
would have no material impact on the Company's earnings.

  In connection with sales and installation contracts outside of the United
States, principally Europe and Australia, the Company may enter into sales or
installation contracts that are denominated in currencies different than the
subsidiary's functional currency. The Company recognizes that its international
operations are subject to the risk of foreign currency fluctuations not present
in domestic operations. Currency losses to date have not been material to the
Company's operations as a whole. The Company's German operation primarily take
place within the European Union(EU). The exchange rates within the EU are fixed
in relation to the Euro, the currency of the EU.  The Euro structure eliminates
the currency fluctuations among members of the EU and should eliminate a great
deal of the currency risks associated with sales by the Company's German
operation.

  The Company routinely enters into fixed price contracts with commencement of
performance dates spread throughout the year. Due to the nature of the
construction business into which our products are sold, the Company has limited
contractual means of passing through resin price increases. The Company believes
that it successfully manages this risk by:

  a)  setting expiration dates on bids,
  b)  negotiating delays in announced resin price increases,
  c)  carrying inventory to meet expected demand and
  d)  planning and staying informed on economic factors influencing resin
      prices.

  The Company does not enter into purchase contracts for the future delivery of
raw materials.

                                       16
<PAGE>

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
Gundle/SLT Environmental, Inc.

  We have audited the accompanying consolidated balance sheets of Gundle/SLT
Environmental, Inc. and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 2000. Our audits
also included the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

  We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

  In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Gundle/SLT
Environmental, Inc. and subsidiaries at December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

                                                   ERNST & YOUNG LLP

Houston, Texas
January 26, 2001

                                       17
<PAGE>

                         GUNDLE/SLT ENVIRONMENTAL, INC.

                          CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                                 December 31,
                                                                                         --------------------------
                                                                                           2000              1999
                                                                                         --------          --------
<S>                                                                                      <C>               <C>
Current assets:
  Cash and cash equivalents.....................................................         $ 11,270          $ 16,873
  Accounts receivable:
     Trade, net.................................................................           49,288            54,010
     Other......................................................................            1,319               938
  Contracts in progress.........................................................            2,525             2,508
  Inventory.....................................................................           17,830            19,733
  Deferred income taxes.........................................................            5,373             4,948
  Prepaid expenses and other....................................................              777               804
                                                                                         --------          --------
          Total current assets..................................................           88,382            99,814
Property, plant and equipment, net..............................................           32,689            30,881
Excess of purchase price over fair value of net assets acquired, net............           23,638            25,217
Other assets....................................................................            3,854             5,785
                                                                                         --------          --------
                                                                                         $148,563          $161,697
                                                                                         ========          ========
                                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities......................................         $ 27,592          $ 29,073
  Advance billings on contracts in progress.....................................            1,722             2,360
  Current portion of long-term debt.............................................            5,341             5,343
  Short-term debt...............................................................              534                --
  Income taxes payable..........................................................            1,005             2,323
  Deferred income taxes.........................................................              239                --
                                                                                         --------          --------
          Total current liabilities.............................................           36,433            39,099
Deferred income taxes...........................................................              747             1,858
Long-term debt..................................................................           20,655            26,017
Other liabilities...............................................................            1,420             1,452
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, 18,103,695 and
     18,096,211 shares issued...................................................              181               181
  Additional paid-in capital....................................................           69,364            69,358
  Retained earnings.............................................................           58,915            55,277
  Accumulated other comprehensive income........................................           (2,048)              627
                                                                                         --------          --------
                                                                                          126,412           125,443
  Treasury stock at cost, 7,040,562 shares and 5,327,581 shares.................          (37,104)          (32,172)
                                                                                         --------          --------
          Total stockholders' equity............................................           89,308            93,271
                                                                                         --------          --------
                                                                                         $148,563          $161,697
                                                                                         ========          ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       18
<PAGE>

                         GUNDLE/SLT ENVIRONMENTAL, INC.

                       CONSOLIDATED STATEMENTS OF INCOME
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                               Year Ended December 31,
                                                                   ------------------------------------------------
                                                                     2000                1999                1998
                                                                   --------            --------            --------
<S>                                                                <C>                 <C>                 <C>
Sales and operating revenue.............................           $191,320            $178,569            $179,555
Cost of products and services...........................            158,741             142,648             144,627
                                                                   --------            --------            --------
Gross profit............................................             32,579              35,921              34,928
Selling, general and administrative expenses............             24,445              24,649              24,631
Amortization of goodwill................................              1,342               1,368               1,379
                                                                   --------            --------            --------
Operating income........................................              6,792               9,904               8,918
Other expenses:
  Interest expense......................................              2,114               2,758               3,415
  Interest income.......................................               (760)             (1,042)             (1,058)
  Foreign exchange (gain) loss..........................                (61)                 16                (209)
  Other (income) expense, net...........................               (466)               (289)               (162)
                                                                   --------            --------            --------
Income before income taxes..............................              5,965               8,461               6,932
Provision for income taxes..............................              2,327               3,554               2,912
                                                                   --------            --------            --------
Net income..............................................           $  3,638            $  4,907            $  4,020
                                                                   ========            ========            ========
Basic and diluted earnings per common share.............            $  0.31            $   0.38            $   0.30
                                                                   ========            ========            ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       19
<PAGE>

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                            Accumulated
                                       Common Stock    Additional              Other                    Treasury Stock
                                    -----------------   Paid-in  Retained  Comprehensive   Unearned     ---------------
                                      Shares   Amount   Capital  Earnings     Income     Compensation   Shares   Amount     Total
                                    ---------  ------   -------  --------  ------------- ------------   ------  -------    -------
<S>                                   <C>        <C>   <C>       <C>          <C>        <C>           <C>     <C>         <C>
BALANCE AT DECEMBER 31, 1997          18,087     $180  $69,929   $46,350      $ 1,351      $(1,051)      4,807   $(30,649)  $86,110
  Net income........................      --       --       --     4,020           --           --          --         --     4,020
  Cumulative translation adjustment       --       --       --        --         (519)          --          --         --      (519)
                                                                                                                            -------
        Comprehensive Income...           --       --       --        --           --           --          --         --     3,501
                                                                                                                            -------
  Restricted stock grant............      --       --     (580)       --           --          921          93         --       341
  Purchases under the  Employee
    Stock Purchase Plan.............       5        1       25                                  --          --         --        26
  Treasury stock purchases                                                         --                       65       (185)     (185)
                                     -------     ----  -------   -------      -------       ------       -----   --------   -------
BALANCE AT DECEMBER 31, 1998          18,092      181   69,374    50,370          832         (130)      4,965    (30,834)   89,793
  Net income........................      --       --       --     4,907           --           --          --         --     4,907
  Cumulative translation
    adjustment......................      --       --       --        --         (205)          --          --         --      (205)
                                                                                                                            -------
        Comprehensive Income...           --       --       --        --           --           --          --         --     4,702
                                                                                                                            -------
  Restricted stock grant............      --       --      (30)       --           --          130          34         --       100
  Purchases under the Employee
    Stock Purchase Plan.............       4       --       14        --           --           --          --         --        14
  Treasury stock purchases..........      --       --       --        --           --           --         329     (1,338)   (1,338)
                                      ------   ------  -------   -------      -------      -------       -----   --------   -------
BALANCE AT DECEMBER 31, 1999........  18,096      181   69,358    55,277          627           --       5,328    (32,172)   93,271
  Net income........................      --       --       --     3,638           --           --          --         --     3,638
  Gain from swap(see note 2)........      --       --       --        --       (1,750)          --          --         --    (1,750)
  Cumulative translation
    adjustment......................      --       --       --        --         (925)          --          --         --      (925)
                                                                                                                            -------
        Comprehensive Income...           --       --       --        --           --           --          --         --       963
                                                                                                                            -------
  Restricted stock grant............      --       --      (19)       --           --           --          35         --       (19)
  Purchases under the Employee
    Stock Purchase Plan.............       8       --       25        --           --           --          --         --        25
  Treasury stock purchases..........      --       --       --        --           --           --       1,678     (4,932)   (4,932)
                                      ------   ------  -------   -------      -------      -------       -----   --------   -------
BALANCE AT DECEMBER 31, 2000........  18,104     $181  $68,364   $58,915      $(2,048)     $    --       7,041   $(37,104)  $89,308
                                      ======   ======  =======   =======      =======      =======       =====   ========   =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       20
<PAGE>

                         GUNDLE/SLT ENVIRONMENTAL, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                                 ---------------------------------
                                                                                    2000        1999        1998
                                                                                 --------    --------     -------
<S>                                                                              <C>         <C>          <C>
Cash flows from operating activities:
  Net income...........................................................          $  3,638    $  4,907     $ 4,020
  Adjustments to reconcile net income to cash provided
     by (used in) operating activities:
     Depreciation......................................................             7,955       8,186       7,289
     Amortization of goodwill..........................................             1,342       1,368       1,379
     Amortization of debt issuance costs...............................                83          90          58
     Amortization of unearned compensation.............................                --          39         (34)
     Deferred income taxes.............................................            (1,311)       (369)       (581)
     Gain on sale of assets............................................              (138)       (111)         12
     Equity in affiliates and other....................................              (492)       (274)       (600)
     Increase (decrease) in cash due to changes in assets and
       liabilities:
       Accounts receivable, net........................................             2,671      (9,677)      7,807
       Costs and estimated earnings in excess of billings on
          contracts in progress........................................              (189)       (768)        415
       Inventory.......................................................             1,682      (1,502)      3,497
       Prepaid expenses and other, net.................................             1,316         (66)        190
       Accounts payable and accrued liabilities........................            (1,043)     (1,597)     (7,487)
       Advance billings on contracts in progress.......................              (644)        544       1,109
       Income taxes payable............................................            (1,187)       (797)        198
                                                                                 --------    --------     -------
          Net cash (used in) provided by operating activities..........            13,683         (27)     17,272
                                                                                 --------    --------     -------
Cash flows from investing activities:
  Additions to property, plant and equipment...........................           (10,083)     (5,286)     (6,674)
  Proceeds from the sale of equipment..................................               143         264         289
          Net cash  used for investing activities......................            (9,940)     (5,022)     (6,385)
                                                                                 --------    --------     -------
Cash flows from financing activities:
  Repayments of long-term debt.........................................            (5,248)     (5,863)     (5,991)
  Proceeds of short-term debt..........................................               534          --          --
  Proceeds from the exercise of stock options and purchases
     under the employee stock purchase plan............................                25          14          25
  Repurchase of common stock...........................................            (4,932)     (1,338)       (185)
                                                                                 --------    --------     -------
          Net cash used by  financing activities.......................            (9,621)     (7,187)     (6,151)
Effect of exchange rate changes on cash................................               275        (290)       (181)
                                                                                 --------    --------     -------
Net increase (decrease) in cash and cash equivalents...................            (5,603)    (12,526)      4,555
Cash and cash equivalents at beginning of year.........................            16,873      29,399      24,844
                                                                                 --------    --------     -------
Cash and cash equivalents at end of year...............................          $ 11,270    $ 16,873     $29,399
                                                                                 ========    ========     =======
Cash paid for interest.................................................          $  2,390    $  2,934     $ 3,654
                                                                                 ========    ========     =======
Cash paid for income taxes.............................................          $  4,795    $  4,478     $ 3,090
                                                                                 ========    ========     =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       21
<PAGE>

                         GUNDLE/SLT ENVIRONMENTAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION --

 Organization --

  Gundle/SLT Environmental, Inc. (the "Company"), a Delaware corporation, was
incorporated in August 1986, and through its wholly owned subsidiaries is
primarily engaged in the manufacture, sale and installation of polyethylene
lining systems.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --

 Consolidation --

  The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. Investments in partially owned
entities in which ownership ranges from 20 to 50 percent are accounted for using
the equity method. All material intercompany balances and transactions have been
eliminated.

 Cash Equivalents --

  The Company considers all highly liquid short-term investments with an
original maturity of three months or less to be cash equivalents.

 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.

 Property, plant and equipment --

  Costs of additions and major improvements are capitalized, whereas maintenance
and repairs which do not improve or extend the life of the asset are charged to
expense as incurred. When items are retired or otherwise disposed of, income is
charged or credited for the difference between net book value and proceeds
realized thereon. Interest costs incurred in construction of assets are
capitalized and depreciated over the useful life of the asset. Depreciation is
computed using the straight-line method, based on the estimated useful lives of
the assets. Total repairs and maintenance expense during 2000, 1999 and 1998 was
$3,022,000, $2,577,000 and $2,676,000, respectively.

 Excess of purchase price over fair value of net assets acquired --

  The excess of the aggregate price paid by the Company in the acquisition of
businesses, accounted for as a purchase, over the fair market value of the net
assets acquired is amortized on a straight-line basis over periods not exceeding
40 years. The carrying value of the excess of purchase price over fair value of
net assets acquired is reviewed if the facts and circumstances suggest that it
may be impaired. If this review indicates that the carrying value will not be
recoverable, determined based on the undiscounted cash flows of the entity
acquired over the remaining amortization period, it is reduced to the discounted
cash flow value. As of December 31, 2000 and 1999, accumulated amortization was
$15,091,000 and $13,878,000, respectively.

                                       22
<PAGE>

 Revenue and cost recognition --

  The Company recognizes revenue upon shipment of product to the customer except
when work is being performed under an installation contract. Revenues from
installation contracts are recognized on the percentage-of-completion method
measured by the percentage of costs incurred to total estimated costs for each
contract.

  Cost of sales includes all direct material and labor costs, and indirect costs
such as indirect labor, depreciation, insurance, supplies, tools and repairs.

  Provisions for the total estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions, estimated profitability and final contract settlements may result in
revisions to costs and income and are recognized in the period in which the
revisions are determined.

  Selling, general and administrative costs are charged to expense as incurred.

 Deferred costs --

  Debt issuance costs are capitalized and amortized using the effective interest
rate method over the period the related debt is anticipated to be outstanding.

 Warranty Costs --

  The Company's products are sold and installed with specified limited
warranties as to material quality and workmanship and may extend up to 20 years.
Provision for warranty costs are made based on the Company's claims experience.
The reserve for these costs is included in the self-insurance reserve (see Note
7).

 Income taxes --

  The Company follows the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are determined based on
differences between the financial statements and income tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.

 Foreign currency translation --

  Results of operations for foreign subsidiaries with functional currencies
other than the U.S. dollar are translated using average exchange rates during
the year. Assets and liabilities of these foreign subsidiaries are translated
using the exchange rates in effect at the balance sheet date and the resulting
translation adjustments are recognized as a separate component of stockholders'
equity. Gains and losses arising from foreign currency transactions are
recognized in income as incurred.

  In connection with contracts performed outside of the United States, the
Company routinely bids fixed-price contracts denominated in currencies different
than the functional currency of the applicable subsidiary performing the work.
The Company recognizes that such bidding practices, in the context of
international operations, are subject to the risk of foreign currency
fluctuations not present in domestic operations. Losses related to these
contracts are included in cost of sales and have not been significant.

 Foreign exchange contracts --

  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.

                                       23
<PAGE>

  The Company was using a cross currency principal and interest rate swap to
effectively convert a portion of its U.S. dollar denominated debt into Deutsche
Marks. The objective of this hedging strategy was the management of the foreign
currency exchange risk associated with its net investment in Germany and was
based on the projected foreign currency cash flows from Germany over the ten-
year life of the contract. The Company's investment in Germany and the foreign
currency portion of its swap were adjusted each period to reflect current
foreign exchange rates with the gains and losses recorded in the equity section
of the balance sheet. The differential paid or received on the interest rate
component was recognized as an adjustment to interest expense.

  On April 7, 2000, the Company terminated the above derivative financial
instrument. The Company received $2,100,000 as the termination value of this
instrument.  The purpose of the initial transaction was to hedge a portion of
the Company's net investment in Germany, which has since been reduced by more
than the face amount of the instrument.

  The Company has elected to treat the portion of the termination value related
to the interest swap as deferred interest income to be amortized over the
remaining term of the hedge, consistent with pretermination treatment.  The
after-tax portion related to the investment component will remain in other
comprehensive income until the Company's net investment in Germany is less than
zero. The full termination value is subject to income taxes in the current
period.

 Stock options --

  The Company follows Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" and related interpretations in accounting for
stock options. See Note 11 for disclosures required by Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation".

 Use of estimates --

  The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

 Supplier/sources of supply --

  The Company currently purchases its raw material (polyethylene resins) from at
least two suppliers at each location. Polyethylene resins are occasionally in
short supply and are subject to substantial price fluctuation in response to
market demand. The Company has not encountered any significant difficulty to
date in obtaining raw materials in sufficient quantities to support its
operations at current or expected near-term future levels. However, any
disruption in raw material supply or abrupt increases in raw material prices
could have an adverse effect upon the Company's operations.

 Reclassifications --

  The accompanying consolidated financial statements for 1998 and 1999 contain
certain reclassifications to conform with the presentation used in 2000.

 Accounting Changes --

  In June 1998, the Financial Accounting Standards Board issued Statement No.
133, Accounting for Derivative Financial Instruments and Hedging Activities.
Statement 133 requires that all derivatives be recognized as assets and
liabilities and measured at fair value. The accounting for changes in the fair
value of a derivative depends on the intended use of the derivative and the
resulting designation.  Statement 133 is effective for fiscal years beginning
after June 15, 2000 and early adoption is permitted. Because of the Company's
minimal use of derivatives, the adoption of Statement 133 on January 1, 2001
will not have a significant effect on net income or the financial position of
the Company.

                                       24
<PAGE>

(3) TRADE RECEIVABLES --

  Trade receivables consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                  2000        1999
                                                                -------     -------
                                                                  (in thousands)
<S>                                                             <C>         <C>
Direct sales...........................................         $25,798     $29,810
Contracts:
  Completed............................................          18,667      17,165
  In progress..........................................           8,062       9,304
  Retainage............................................           1,676       2,985
                                                                -------     -------
                                                                 54,203      59,264
Allowance for doubtful accounts........................          (4,915)     (5,254)
                                                                -------     -------
                                                                $49,288     $54,010
                                                                =======     =======
</TABLE>

(4) ACCOUNTING FOR INSTALLATION CONTRACTS --

  The following summarizes installation contracts in progress at December 31:

<TABLE>
<CAPTION>
                                                                                             2000        1999
                                                                                           -------     -------
                                                                                             (in thousands)
<S>                                                                                        <C>         <C>
Costs incurred on contracts in progress...........................................         $50,341     $40,970
Estimated earnings, net of losses.................................................           8,913       6,719
                                                                                           -------     -------
                                                                                            59,254      47,689
  Less -- billings to date........................................................          58,451      47,541
                                                                                           -------     -------
                                                                                           $   803     $   148
                                                                                           =======     =======
Included in the accompanying balance sheet under the following
  captions:
  Contracts in progress...........................................................         $ 2,525     $ 2,508
  Advance billings................................................................          (1,722)     (2,360)
                                                                                           -------     -------
                                                                                           $   803     $   148
                                                                                           =======     =======
</TABLE>

(5) INVENTORY --

  Inventory consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                      2000        1999
                                                                    -------     -------
                                                                      (in thousands)
<S>                                                                 <C>         <C>
Raw materials and supplies..................................        $ 5,875     $ 7,101
Finished goods..............................................         11,955      12,632
                                                                    -------     -------
                                                                    $17,830     $19,733
                                                                    =======     =======
</TABLE>


(6) PROPERTY, PLANT AND EQUIPMENT --

  Property, plant and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                             Useful lives     2000        1999
                                                             ------------   --------    --------
                                                                Years         (in thousands)
                                                             ------------
<S>                                                          <C>            <C>          <C>
Land...................................................                       $  3,146    $  3,005
Buildings and improvements.............................          10-15          16,932      14,506
Machinery and equipment................................           3-12          71,261      66,280
Furniture and fixtures.................................            3-5             823         846
                                                                              --------    --------
                                                                                92,162      84,637
Less -- accumulated depreciation.......................                        (59,473)    (53,756)
                                                                              --------    --------
                                                                              $ 32,689    $ 30,881
                                                                              ========    ========
</TABLE>

                                       25
<PAGE>

(7) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --

  Accounts payable and accrued liabilities consisted of the following at
December 31:

<TABLE>
<CAPTION>
                                                     2000        1999
                                                   -------     -------
                                                     (in thousands)
<S>                                           <C>             <C>
Trade accounts payable.....................        $13,196     $14,031
Self-insurance reserves....................          3,256       3,086
Compensation and benefits..................          4,630       2,698
Accrued construction costs.................            241         233
Taxes, other than income...................          1,086       1,310
Other accrued liabilities..................          5,183       7,715
                                                   -------     -------
                                                   $27,592     $29,073
                                                   =======     =======
</TABLE>

(8) LONG-TERM DEBT --

  Long-term debt consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                                                               2000        1999
                                                                                             -------     -------
                                                                                               (in thousands)
<S>                                                                                          <C>         <C>
Revolving line of credit payable to banks, interest due quarterly...................         $    --     $    --
11.17% Notes due June 15, 2000, with interest payable quarterly
  at 11.17%.........................................................................              --       5,000
7.34% Notes due August 1, 2005, with required annual principal
  payments of $5,000,000 beginning August 1, 2001, interest
  payable semi-annually at 7.34%....................................................          25,000      25,000
8% Promissory Note due December 31, 2004, with required annual
  principal and interest payments of $206,000 on December 31........................             682         822
Installment loans, denominated in Deutsche Marks, due September,
  2002, with required semi-annual principal and interest
  payments, interest rates ranging from 7.5% to 8.0%, secured by
  property and plant................................................................             314         538
                                                                                             -------     -------
                                                                                              25,996      31,360
  Less -- current maturities........................................................          (5,341)     (5,343)
                                                                                             -------     -------
                                                                                             $20,655     $26,017
                                                                                             =======     =======
</TABLE>

  The Company entered into a $25,000,000 multi-currency revolving credit
facility (the "Revolver") with Bank of America, N.A.(formerly NationsBank of
Texas, N.A.) as agent, on July 27, 1995. The Revolver as amended, matures on
September 30, 2002, and bears 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 of funded debt to total capitalization. An annual commitment fee of up to
3/8% is payable on any unused portion of the facility. Under the terms of the
revolving line of credit agreement, the Company is required to maintain certain
financial ratios and a specific level of consolidated tangible net worth. As of
December 31, 2000, there was no balance outstanding under the Revolver. However,
letters of credit issued under this facility totaled $975,000 reducing the
balance available to $24,025,000. The letters of credit primarily secure
performance of self-insurance programs.

  The Company has credit facilities with two German banks to support its
European cash management and bank guarantee requirements in the amount of DM
11,000,000. These revolving credit facilities are secured by property and plant
in Germany which also secures an installment loan that matures in September,
2002, and bears interest at various market rates. These credit facilities are
used primarily to guarantee the performance of German installation contracts. At
December 31, 2000, the Company had DM 4,105,000 available under these credit
facilities with DM 1,109,000 used for working capital and DM 5,786,000 of bank
guarantees outstanding.

  On July 27, 1995, the Company entered into note agreements (the "7.34% Notes")
with two lenders, in the aggregate amount of $25,000,000, which mature on August
1, 2005. The 7.34% Notes, which are unsecured, require semiannual interest
payments at a rate of 7.34% that began February 1, 1996, and annual principal
payments of $5,000,000 beginning August 1, 2001. The terms of the 7.34% Notes
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 unless certain other criteria are met. The 7.34%
Notes also require the Company to maintain certain financial ratios and a
specified level of consolidated net worth.

                                       26
<PAGE>

  Summarized below are the maturities of long-term debt of the Company during
the next five years and thereafter (in thousands).

<TABLE>
<CAPTION>

Year Ending
December 31,
------------
<S>                                                                                                          <C>
2001......................................................................................................      5,341
2002......................................................................................................      5,288
2003......................................................................................................      5,177
2004......................................................................................................      5,191
2005......................................................................................................      5,000
Thereafter................................................................................................         --
                                                                                                              -------
                                                                                                              $25,996
                                                                                                              =======
</TABLE>

(9) FINANCIAL INSTRUMENTS --

Fair value of financial instruments --

  The Company's financial instruments consist primarily of cash and cash
equivalents, trade receivables, trade payables and debt instruments. The book
values of cash and cash equivalents, trade receivables and trade payables and
floating-rate debt instruments are considered to be representative of their
respective fair values. The Company had $25,996,000 and $31,360,000 of fixed-
rate debt instruments at December 31, 2000 and 1999, with fair values of
approximately $25,936,000 and $31,438,000, respectively. The fair value of long-
term debt was estimated based on quoted market prices for these or similar
issues or on the current rates offered to the Company for debt of the same
remaining maturities. The difference between the fair value and the carrying
value represents the theoretical net discount or premium the Company would
receive or have to pay to retire all debt at such date.

(10)  PER SHARE INFORMATION --

  The following table sets forth the weighted average shares for the computation
of basic and diluted earnings per share (in thousands):

<TABLE>
<CAPTION>
                                                                                                         Year Ended December 31,
                                                                                                        ------------------------
                                                                                                          2000     1999     1998
                                                                                                        ------   ------   ------
<S>                                                                                                     <C>      <C>      <C>
Weighted average common shares outstanding....................................................          11,903   12,931   13,208
Dilutive securities -- stock options..........................................................              --       --       --
                                                                                                        ------   ------   ------
Weighted average common shares outstanding assuming full dilution.............................          11,903   12,931   13,208
                                                                                                        ======   ======   ======
</TABLE>

(11)  STOCKHOLDERS' 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 December 31, 2000, stockholders' equity included
1,354,657 shares repurchased under the plan at an aggregate cost of $4,279,813.

  On June 5, 2000 the Company repurchased a block of 717,800 shares directly
from an institutional holder at a cost of $2,174,938.

  The Company's board of directors adopted a qualified employee stock purchase
plan on October 16, 1991, effective January 1, 1992. The plan authorizes the
issuance of up to 100,000 shares of common stock for purchase by participating
employees at a 15% discount from the market price through January 2001. As of
December 31, 2000 and 1999, 46,670 and 39,186 shares, respectively, had been
issued under this plan.

                                       27
<PAGE>

  In 1986, the Company's board of directors adopted an employee stock option
plan (the "1986 Employee Plan"). This Plan, as amended, permitted up to 850,000
stock options to be granted. The plan permitted the grant of both "incentive"
and "non-qualified" stock options to employees of the Company. Each option is
exercisable for a period of up to ten years after it is granted. Unless the
terms of the option specify otherwise, options may be exercised in respect of
33-1/3%, 66-2/3% and 100% of the shares covered, upon the third, fourth and
fifth anniversaries of the date of grant. The option price cannot be less than
the fair market value of the shares on the date the option is granted. Any
options available for grant under this plan are now a part of the 1995 Incentive
Stock Plan.

  During 1988, the Company's board of directors adopted a director stock option
plan (the "1988 Director Plan"), which permits the grant of up to 75,000 "non-
qualified" stock options to non-employee directors. The terms of this plan are
substantially the same as those of the 1986 Employee Plan. This Plan was
terminated in December 1995 and subsequently replaced by the 1996 Non-Qualified
Stock Option Plan for Non-Employee Directors.

  In 1995, the Company's board of directors adopted the 1995 Incentive Stock
Plan (the "1995 Employee Plan"). The 1995 Employee Plan as subsequently amended
and restated, permits the grant of up to 1,750,000 stock options less any
options exercised or outstanding under the 1986 Employee Plan through March 25,
2001. The 1995 Employee Plan provides for the grant of (i) non-qualified stock
options, (ii) incentive stock options, (iii) shares of restricted stock, (iv)
shares of phantom stock, and (v) stock bonuses (collectively, "Incentive
Awards"). In addition, the 1995 Employee Plan permits the grant of cash bonuses
payable when a participant is required to recognize income for federal income
tax purposes in connection with the vesting of shares of restricted stock or the
grant of a stock bonus. Key employees, including officers (whether or not they
are directors), of the Company and its subsidiaries are eligible to participate
in the 1995 Employee Plan. Each non-qualified stock option issued under the 1995
Employee Plan is granted for a period up to seven years after it is granted and
may be exercised in respect of 50% and 100% of the shares covered upon the first
and second anniversaries of the date of grant. The option price cannot be less
than the fair market value of the shares on the date the option is granted.

  During 1996, the Company's board of directors adopted the 1996 Non-Qualified
Stock Option Plan for Non-Employee Directors (the "1996 Director Plan"). The
1996 Director Plan authorizes an aggregate of 100,000 shares, of non-qualified
stock options to be issued to non-employee directors. The 1996 Director Plan
provides for the automatic annual grant to each non-employee director of a five
year option to purchase 2,000 shares of common stock at an exercise price equal
to the market price on the date of grant. The options will be granted
immediately following each annual meeting of stockholders, with each option to
vest and become exercisable in its entirety one year from the date of grant.
This Plan replaces the 1988 Director Plan.

The stock option activity under each plan is set forth below:

<TABLE>
<CAPTION>
                                 1986 Employee Plan             1988 Director Plan            1995 Employee Plan
                             --------------------------     --------------------------   --------------------------
                              Shares        Option          Shares         Option         Shares         Option
                               Under         Price           Under          Price          Under          Price
                              Option       Per Share        Option        Per Share       Option        Per Share
                             -------    ---------------    --------    ---------------  ---------    --------------
<S>                          <C>        <C>                 <C>        <C>              <C>          <C>
OUTSTANDING AT
 DECEMBER 31, 1997.......    184,150    $5.25 to $15.63      60,000    $6.25 to $16.17    680,450    $4.88 to $9.00
   Granted...............                                                                 291,500    $4.00 to $5.31
   Exercised.............
   Cancelled.............    (32,700)   $5.25 to $13.38     (15,000)   $6.25 to $16.17    (12,500)   $5.25 to $6.50
                             -------    ---------------     -------    ---------------  ---------    --------------
OUTSTANDING AT
 DECEMBER 31, 1998.......    151,450    $5.25 to $15.63      45,000    $6.25 to $11.63    959,450    $4.00 to $9.00

   Granted...............                                                                 416,000    $3.75 to $3.75
   Exercised.............
   Cancelled.............    (56,000)   $5.25 to $15.63                                  (429,500)   $4.00 to $6.50
                             -------    ---------------                                   -------    --------------
OUTSTANDING AT
 DECEMBER 31, 1999.......     95,450    $5.25 to $11.13      45,000    $6.25 to $11.63    945,950    $3.75 to $9.00

   Granted...............                                                                 421,500    $2.32 to $3.56
   Exercised.............
   Cancelled.............    (17,400)    $8.25 to $8.25     (30,000)   $8.25 to $16.17   (141,750)   $3.75 to $6.50
                             -------     --------------     -------    ---------------
OUTSTANDING AT
 DECEMBER 31, 2000.......     78,050    $5.25 to $11.13      15,000     $6.25 to $7.00  1,225,700    $2.32 to $9.00
                             =======    ===============     =======    ===============  =========    ==============
Options Exercisable......     78,050    $5.25 to $11.13      15,000     $6.25 to $7.00    411,200    $4.00 to $9.00
                             =======    ===============     =======    ===============  =========    ==============
Options Available
   for Future Grants.....          0                              0                       234,654
                             =======                        =======                     =========
</TABLE>

<TABLE>
<CAPTION>
                                            1996 DIRECTOR PLAN
                                        -------------------------
                                         Shares        Option
                                          Under         Price
                                         Option       Per Share
                                        -------    --------------
<S>                                     <C>        <C>
OUTSTANDING AT
 DECEMBER 31, 1997.......                24,000    $4.88 to $7.00
   Granted...............                16,000    $5.63 to $5.81
   Exercised.............
   Cancelled.............

OUTSTANDING AT
 DECEMBER 31, 1998.......                40,000    $4.88 to $7.00

   Granted...............                12,000    $3.81 to $3.81
   Exercised.............
   Cancelled.............

OUTSTANDING AT
 DECEMBER 31, 1999.......                52,000    $3.81 to $7.00
                                         ------    --------------
   Granted...............                12,000    $2.88 to $2.88
   Exercised.............
   Cancelled.............               (16,000)   $3.81 to $7.00

OUTSTANDING AT
 DECEMBER 31, 2000.......                48,000    $2.88 to $7.00
                                        =======    ==============
Options Exercisable......                48,000    $2.88 to $7.00
                                        =======    ==============
Options Available
   for Future Grants.....                52,000
                                        =======
</TABLE>

                                       28
<PAGE>

  Substantially all outstanding options were priced between $2.32 and $11.13 per
share at December 31, 2000. The weighted average of the remaining contractual
life for the outstanding options at December 31, 2000, was 5.4 years. The
weighted average price of options outstanding during 2000, 1999 and 1998 was
$5.24, $6.38 and $5.69, respectively.

  The Company applies APB Opinion 25 and related Interpretations in accounting
for its stock-based compensation plans. Accordingly, no compensation expense has
been recognized for its 1996 Director Plan and unrestricted stock options from
the 1995 Employee Plan.

  Pro forma information regarding net income and earnings per share is required
by FASB Statement No. 123, "Accounting for Stock-Based Compensation". Statement
123 also requires that the information be determined as if the Company has
accounted for its employee stock options granted subsequent to December 31,
1994, under the fair value method of that Statement. The fair value for these
options was estimated at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions for 2000, 1999 and 1998,
respectively: risk-free interest rates of 5.3%, 6.5% and 4.7%; a dividend yield
of 0%; volatility factors of the expected market price of the Company's common
stock of 49%, 60% and 40% and a weighted-average expected life of the option of
5 to 7 years.

  The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

  For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows (in thousands except for earnings per share
information):

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                                 --------------------------
                                                                   2000      1999      1998
                                                                 ------    ------    ------
<S>                                                              <C>       <C>       <C>
Net income
  As reported.........................................           $3,638    $4,907    $4,020
  Pro forma...........................................            3,143     4,649     3,569
Basic and diluted earnings per share
  As reported.........................................              .31       .38       .30
  Pro forma...........................................              .26       .36       .27
</TABLE>

  The estimated fair value of stock options issued in 2000 and 1999 was
$495,000 and $258,000, respectively.

(12)  Income taxes --

  Domestic and foreign income before income taxes were as follows:

<TABLE>
<CAPTION>
                                                               Year Ended December 31,
                                                            ---------------------------
                                                             2000       1999      1998
                                                            ------     ------    ------
                                                                   (in thousands)
<S>                                                         <C>        <C>       <C>
Domestic.........................................           $5,793     $4,107    $4,796
Foreign..........................................              172      4,354     2,136
                                                            ------     ------    ------
          Total..................................           $5,965     $8,461    $6,932
                                                            ======     ======    ======
</TABLE>

                                       29
<PAGE>

  The provision (benefit) for income taxes consisted of the following:

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                                     -----------------------------
                                                                        2000       1999       1998
                                                                     -------     ------     ------
                                                                              (in thousands)
<S>                                                                  <C>         <C>        <C>
Current expense:
  U.S.
     Federal...............................................          $ 2,368     $2,025     $1,720
     State.................................................              246        181        139
                                                                     -------     ------     ------
          Total U.S........................................            2,614      2,206      1,859
  Foreign..................................................              977      2,214      1,411
                                                                     -------     ------     ------
          Total current....................................            3,591      4,420      3,270
Deferred expense (benefit):
  U.S.
     Federal...............................................             (452)      (356)       (57)
     State.................................................              (38)      (138)        (1)
                                                                     -------     ------     ------
          Total U.S........................................             (490)      (494)       (58)
  Foreign..................................................             (774)      (372)      (300)
                                                                     -------     ------     ------
          Total deferred...................................           (1,264)      (866)      (358)
                                                                     -------     ------     ------
          Total provision for income taxes.................          $ 2,327     $3,554     $2,912
                                                                     =======     ======     ======
</TABLE>

  A reconciliation between the provision for income taxes and income taxes
computed by applying the statutory rate is as follows:

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                         -----------------------------
                                                                           2000       1999       1998
                                                                         ------     ------     ------
                                                                                 (in thousands)
<S>                                                                      <C>        <C>        <C>
Tax provision (benefit) at statutory rate......................          $2,028     $2,877     $2,357
Add (deduct):
  Amortization of goodwill.....................................             368        388        451
  Meals and entertainment disallowance.........................             365        350        387
  Foreign Sales Corporation benefit............................            (360)      (170)      (204)
  Taxable differential for foreign subsidiaries................             107        243        139
  State income taxes...........................................             137         98         91
  Other, net...................................................            (318)      (232)      (309)
                                                                         ------     ------     ------
                                                                         $2,327     $3,554     $2,912
                                                                         ======     ======     ======
</TABLE>

  The tax effects of temporary differences that gave rise to the deferred tax
assets and liabilities were as follows at December 31:

<TABLE>
<CAPTION>
                                                               2000       1999
                                                              ------     ------
                                                               (in thousands)
<S>                                                           <C>            <C>
Deferred tax assets:
  Accrued expenses....................................        $4,046     $4,778
  Loss carryforward...................................           915         --
  Foreign currency hedge..............................           713         --
  Other...............................................           456        255
                                                              ------     ------
                                                               6,130      5,033
                                                              ------     ------
Deferred tax liabilities:
  Excess of tax depreciation over book depreciation...         1,478      1,943
  Long-term contracts.................................           265         --
  Other...............................................            --         --
                                                              ------     ------
                                                               1,743      1,943
                                                              ------     ------
          Total deferred tax asset....................        $4,387     $3,090
                                                              ======     ======
</TABLE>

  Undistributed earnings of the Company's foreign subsidiaries amounted to
approximately $4,964,000 at December 31, 2000.  Provision for U.S. federal and
state income taxes not has been provided for earnings considered to be
indefinitely reinvested. Upon distribution of those earnings in the form of
dividends or otherwise, the Company would be subject to both U.S. income taxes
(subject to an adjustment for foreign tax credits) and withholding taxes payable
to the various foreign countries. Determination of the amount of unrecognized
deferred U.S. income tax liability is not practicable because of the
complexities associated with its hypothetical calculation.

                                       30
<PAGE>

(13) EMPLOYEE BENEFIT PLANS --

  The Company has a defined contribution employee benefit plan under which
substantially all U.S. employees are eligible to participate. The Company
matches a portion of the employees' contributions. The Company contributed
$477,000, $472,000 and $441,000 to the plan during the years ended December 31,
2000, 1999 and 1998, respectively. Under the terms of the plan, contributions to
the plan may be discontinued at any time.

(14) PENSION PLAN --

  The Company's German subsidiary has an unfunded pension plan providing
benefits to three former employees. The plan provides fixed minimum pension
payments at retirement age. There are no assets held in outside funds.

  The Company has adopted FAS 87, "Employers' Accounting for Pensions"; however,
to the extent pension costs under German law exceed amounts computed under FAS
87, those additional amounts are recorded by the Company. Pension expense for
the years ended December 31, 2000, 1999, and 1998 was $24,000, $84,000 and
$132,000 respectively. The actuarial present value of accumulated benefits was
$1,014,000 and $1,302,000 as of December 31, 2000 and December 31, 1999,
respectively. The projected benefit obligation for service rendered to date, net
of unrecognized prior service cost, was $1,014,000 and $1,302,000 as of December
31, 2000 and 1999, respectively.

  The computation assumed a discount rate on benefit obligations of 7%, annual
salary increases of 2% and annual benefit increases of 2% for 2000 and 1999.

(15) CONCENTRATION OF CREDIT RISK --

  Accounts receivable, as financial instruments, could potentially subject the
Company to concentrations of credit risk. The Company continuously evaluates the
creditworthiness of its customers and may require customers to provide letters
of credit to guarantee payments. During 2000, 1999 and 1998, no single customer
accounted for 10% or greater of total net sales.

(16) Research and development costs --

  Research and development costs are charged to expense as incurred. The amounts
of research and development and quality control expenditures during the years
ended December 31, 2000, 1999 and 1998 were $1,350,000, $1,616,000 and
$1,845,000 respectively.

(17) Commitments and contingencies --

 Product warranties and insurance coverage --

  The Company's products are sold and installed with specified limited
warranties as to material quality and workmanship. These limited warranties may
last for up to 20 years, but are generally limited to repair or replacement by
the Company of the defective liner or the dollar amount of the contract
involved, on a prorated basis. The Company may also indemnify the site owner or
general contractor for other damages resulting from negligence of the Company's
employees. The Company often is required to post bid and performance bonds or
bank guarantees covering the full amount of an installation contract.

                                       31
<PAGE>

  Although the Company is not exposed to the type of potential liability that
might arise from being in the business of handling, transporting or storing
hazardous waste or materials, the Company could be susceptible to liability for
environmental damage or personal injury resulting from defects in the Company's
products or negligence by Company employees in the installation of its lining
systems. Such liability could be substantial because of the potential that
hazardous or other waste materials might leak out of their containment system
into the environment. The Company maintains liability insurance, which includes
contractors pollution liability coverage in amounts which it believes to be
prudent. However, there is no assurance that this coverage will remain available
to the Company. While the Company's claims experience to date may not be a
meaningful measure of its potential exposure for product liability, the Company
has experienced no material losses from defects in products and installations.

 Litigation and claims --

  The Company is involved in litigation arising in the ordinary course of
business, which in the opinion of management, will not have a material adverse
effect on the Company's financial position or results of operations.

 Operating Leases --

  The Company leases certain equipment through operating lease arrangements of
varying terms. Annual rental expense under the terms of non-cancelable operating
leases is less than 1% of consolidated revenues.

(18) SEGMENT INFORMATION --

  The Company operates exclusively in the geosynthetic liner market.
Substantially all sales and operating revenues result from the sale and
installation of the Company's manufactured products. These products are
manufactured and sold in various locations throughout the world using similar
raw materials (polyethylene resin), production processes (flat or round die
extrusion) and distribution channels (product and installation sales made
directly to customers or through representatives of the Company).

  Statement of Financial Accounting Standards No. 131, Disclosures about
Segments of an Enterprise and Related Information allows the aggregation of an
enterprise's segments if they are similar. The Company operates in different
geographic areas, however, the Company has reviewed the aggregation criteria and
determined that the Company operates as one segment based on the high degree of
similarity of the following aspects of the Company's operations:

  - nature of the products and services,
  - raw materials and production processes used,
  - customers and markets served,
  - methods used to distribute products and services,
  - effects of regulatory influences on the market, and the economic
    characteristics of the products and services in different geographical
    areas.

                                       32
<PAGE>

<TABLE>
<CAPTION>
                                                                                                               Years Ended
                                                                                                     ------------------------------
                                                                                                       2000       1999       1998
                                                                                                     --------    -------    -------
<S>                                                                                                  <C>         <C>        <C>
Sales to unaffiliated customers (based on the geographic location of the customer):
  United States................................................................................      $105,659    $94,767    $92,934
  Europe.......................................................................................        49,007     51,256     49,195
  Latin & South America........................................................................        16,095      8,923     15,300
  Far East/Pacific Rim.........................................................................        14,278     13,496     13,309
  Other........................................................................................         6,281     10,127      8,817

Only sales to one country, the United States, accounted for more than 10% of total sales.
Sales into other countries, accounting for less than 10% of total sales, have been aggregated
into geographic regions for this presentation.

Long lived assets (principally property, plant and equipment):
  United States................................................................................        22,365     23,368     25,481
  Germany......................................................................................         3,764      4,729      6,532
  Thailand.....................................................................................         4,100         --         --
  Other........................................................................................         5,263      5,319      5,393

Only long-lived assets in the United States, Germany and Thailand accounted for more than 10%
 of total long-lived assets.
</TABLE>



                         GUNDLE/SLT ENVIRONMENTAL, INC.

                               SUPPLEMENTARY DATA

Consolidated quarterly financial data (Unaudited) --

   Unaudited quarterly information for fiscal 2000 and 1999 is as follows (in
thousands, except per share amounts):

<TABLE>

                                                               2000                                          1999
                                           ------------------------------------------    ------------------------------------------
                                                            Quarter                                       Quarter
                                           ------------------------------------------    ------------------------------------------
                                            First       Second     Third      Fourth      First       Second     Third      Fourth
                                           --------    --------   --------   --------    --------    --------   --------   --------
<S>                                        <C>         <C>        <C>        <C>         <C>         <C>        <C>        <C>
Net sales...............................    $29,881     $57,388    $59,982    $44,069     $22,448     $52,069    $61,389    $42,663
Gross profit............................      3,742      11,766     11,018      6,053       2,886      12,166     14,296      6,573
Income (loss) before income taxes.......     (3,241)      5,388      4,800       (982)     (4,151)      5,152      7,944       (484)
Net income (loss).......................     (1,880)      3,125      2,993       (600)     (2,408)      2,989      4,607       (281)
Basic and diluted earnings (loss) per
  Common share..........................       (.16)        .26        .26       (.05)       (.18)        .23        .36       (.02)
</TABLE>

  The above data should be read in conjunction with the consolidated financial
                         statements and notes thereto.

                                       33
<PAGE>

                                                                     SCHEDULE II

                         GUNDLE/SLT ENVIRONMENTAL, INC.

                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  Balance at   Additions                Balance
                                                                                  Beginning     Charged                 at End
                                  Description                                      of Year     to Expense   Writeoffs   of Year
                                  -----------                                     ----------   ----------   ---------   -------
<S>                                                                               <C>          <C>          <C>         <C>
December 31, 1998
  Allowance for doubtful accounts..............................................       $4,347       $1,394      $  785    $4,955
                                                                                      ======       ======      ======    ======
December 31, 1999
  Allowance for doubtful accounts..............................................       $4,955       $1,195      $  896    $5,254
                                                                                      ======       ======      ======    ======
December 31, 2000
  Allowance for doubtful accounts..............................................       $5,254       $  791      $1,130    $4,915
                                                                                      ======       ======      ======    ======
</TABLE>

                                       34
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

  Not applicable.

                                    PART III

  Part III (Items 10 through 13) is omitted since the Company expects to file
with the Securities and Exchange Commission within 120 days following December
31, 2000, definitive proxy materials pursuant to Regulation 14A under the
Securities Exchange Act of 1934 involving the annual election of directors and
certain other matters. If for any reason such a statement is not so filed, this
Report will be appropriately amended.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

  (a)(1) Financial statements (see financial statements at pages 14-32)

  (a)(2) Supplementary data (see page 33)

  (a)(3) Financial schedule (see page 34)

   Schedule II -- Valuation and Qualifying Accounts

  Schedules not listed above are omitted since the information required to be
submitted has been included in the financial statements or the notes thereto, or
the schedules are not required.

  (a)(3) Exhibits:

<TABLE>
<CAPTION>
Exhibit
   No.
-------
<S>         <C>
 2-A        -- Plan Agreement of Merger dated March 28, 1995, between the
               Company and SLT Environmental, Inc. (Exhibit A to Registrant's
               Preliminary Proxy Statement filed on May 4, 1995, is incorporated
               herein by reference).
 3-A        -- Articles of Incorporation as amended (Exhibits 3.1, 3.2 and 3.3
               to Registrant's Registration Statement No. 33-9809 are
               incorporated herein by reference).
 3-B        -- Bylaws (Exhibit 3.4 to Registrant's Registration Statement No.
               33-9809 is incorporated herein by reference).
 4-E        -- Credit Agreement dated as of July 27, 1995, between the Company,
               the financial institutions named therein and NationsBank of
               Texas, N.A., as agent (incorporated by reference to Exhibit 1.6
               to Registrant's Current Report on Form 8-K filed on August 9,
               1995).
 4-F        -- Note Agreements dated as of June 15, 1995, between Gundle
               Environmental Systems, Inc. and certain institutions covering
               the Senior Notes due August 1, 2005 (incorporated by reference to
               Exhibits 1.3 and 1.4 to Registrant's Current Report on Form 8-K
               filed August 9, 1995).
10-B        -- Registrant's 1986 stock option plan (Exhibit 10.11 to
               Registrant's Registration Statement No. 33-44306 is incorporated
               herein by reference).
10-G        -- Registrant's 1995 Amended and Restated Incentive Stock Plan.
               (Incorporated by reference to 4.1 of the Registrant's
               Registration Statement number 333-01759).

</TABLE>

                                       35
<PAGE>

10-I        -- Employment Agreement dated March 10, 1997, between Roger J. Klatt
               and the Company. (Incorporated by reference to Exhibit of the
               same Number in Registrant's 1997 Annual Report on Form 10-K).
10-J        -- Registrant's 1996 Nonqualified Stock Option Plan for Non-Employee
               Directors (Exhibit 4.1 to Registrant's Report on Form S-8 No.
               333-23299 is incorporated herein by reference).
10-L        -- Amendment dated June 4, 1998, to the Employment Agreement dated
               March 10, 1997, between Roger J. Klatt and the Company.
               (Incorporated by reference to Exhibit of the same Number in
               Registrant's 1998 Annual Report on Form 10-K).
11          -- Computation of per share earnings (see financial statements at
               page 26).
21          -- Subsidiaries.
23          -- Consent of Independent Auditors--Ernst & Young LLP.

   (b) Reports on Form 8-K--None.

   (c) Exhibits (see Item (a)(3), above).

   (d) Additional financial statements (see Items (a)(1) and (a)(2) above).


                                      36
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) 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, on the 1st day of March,
2001.

                                            GUNDLE/SLT ENVIRONMENTAL, INC.

                                            By /s/ SAMIR T. BADAWI
                                              -------------------------------
                                                Samir T. Badawi, President

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated on the 1st day of March, 2001.

<TABLE>
<CAPTION>

           SIGNATURE                             TITLE
           ---------                             -----
<S>                                          <C>
    /s/ SAMIR T. BADAWI                      Director and Principal Executive
-------------------------------               Officer
        Samir T. Badawi

    /s/ ROGER J. KLATT                       Principal Financial and Accounting
-------------------------------               Officer
        Roger J. Klatt

    /s/ SAMIR T. BADAWI                      Director and Chairman of the Board
-------------------------------
        Samir T. Badawi

    /s/ JAMES R. BURKE                       Director
-------------------------------
        James R. Burke

    /s/ BRUCE CUMMINGS                       Director
-------------------------------
        Bruce Cummings

    /s/ JAMES R. GIBBS                       Director
-------------------------------
        James R. Gibbs

  /s/ T. WILLIAM PORTER                      Director
-------------------------------
      T. William Porter

  /s/ EDWARD T. SHEEHAN                      Director
-------------------------------
      Edward T. Sheehan
</TABLE>


                                      37


<PAGE>

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
Exhibit
   No.
-------
<S>         <C>
 2-A        -- Plan Agreement of Merger dated March 28, 1995, between the
               Company and SLT Environmental, Inc. (Exhibit A to Registrant's
               Preliminary Proxy Statement filed on May 4, 1995, is incorporated
               herein by reference).
 3-A        -- Articles of Incorporation as amended (Exhibits 3.1, 3.2 and 3.3
               to Registrant's Registration Statement No. 33-9809 are
               incorporated herein by reference).
 3-B        -- Bylaws (Exhibit 3.4 to Registrant's Registration Statement No.
               33-9809 is incorporated herein by reference).
 4-E        -- Credit Agreement dated as of July 27, 1995, between the Company,
               the financial institutions named therein and NationsBank of
               Texas, N.A., as agent (incorporated by reference to Exhibit 1.6
               to Registrant's Current Report on Form 8-K filed on August 9,
               1995).
 4-F        -- Note Agreements dated as of June 15, 1995, between Gundle
               Environmental Systems, Inc. and certain institutions covering
               the Senior Notes due August 1, 2005 (incorporated by reference to
               Exhibits 1.3 and 1.4 to Registrant's Current Report on Form 8-K
               filed August 9, 1995).
10-B        -- Registrant's 1986 stock option plan (Exhibit 10.11 to
               Registrant's Registration Statement No. 33-44306 is incorporated
               herein by reference).
10-G        -- Registrant's 1995 Amended and Restated Incentive Stock Plan.
               (Incorporated by reference to 4.1 of the Registrant's
               Registration Statement number 333-01759).
10-I        -- Employment Agreement dated March 10, 1997, between Roger J. Klatt
               and the Company (incorporated by reference to Exhibit of the
               same number in Registrant's 1997 Annual Report on Form 10-K).
10-J        -- Registrant's 1996 Nonqualified Stock Option Plan for Non-Employee
               Directors (Exhibit 4.1 to Registrant's Report on Form S-8 No.
               333-23299 is incorporated herein by reference).
10-L        -- Amendment dated June 4, 1998, to the Employment Agreement dated
               March 10, 1997, between Roger J. Klatt and the Company.
               (incorporated by reference to Exhibit of the same Number in
               Registrant's 1998 Annual Report on Form 10-K).
11          -- Computation of per share earnings (see financial statements at
               page 26).
21          -- Subsidiaries.
23          -- Consent of Independent Auditors--Ernst & Young LLP.
</TABLE>

                                       38