10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2013

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from            to           

Commission file number 001-35382

GSE Holding, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	77-0619069
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
19103 Gundle Road, Houston, Texas	77073
(Address of Principal Executive Offices)	(Zip Code)

(281) 443-8564

(Registrant’s telephone number, including area code)

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [x]  No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ] Accelerated filer [x] Non-accelerated filer [  ] Smaller reporting company [  ]

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes [  ]  No [x]

As of August 2, 2013, 20,360,612 shares of the registrant’s common stock were outstanding.

GSE Holding, Inc.

FORM 10-Q

For the Quarter Ended June 30, 2013

TABLE OF CONTENTS

		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012	4
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2013 and 2012	5
	Condensed Consolidated Statements of Cash Flows for six months ended June 30, 2013 and 2012	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II	Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 6.	Exhibits	31
SIGNATURES		32

1

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

The statements we make regarding the following subjects are forward-looking by their nature. These statements include, but are not limited to, statements about our beliefs concerning our capital expenditure requirements and liquidity needs; our beliefs regarding the impact of future regulations; our ability to secure project bids; our expectations regarding future demand for our products; our expectation that sales and total gross profits derived from outside North America will increase; our ability to manufacture our higher-margin proprietary products globally; and our belief in the sufficiency of our cash flows to meet our liquidity needs. The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors, that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, include, but are not limited to, (i) general economic conditions and cyclicality in the markets we serve; (ii) our ability to secure project bids; (iii) increases in prices or disruptions in supply of the raw materials we use; (iv) our ability to develop new applications and markets for our products; (v) unexpected equipment failures or significant damage to our manufacturing facilities; (vi) competition; (vii) our ability to anticipate and effectively manage risks associated with our international operations; (viii) our ability to maintain compliance with debt covenants; (ix) currency exchange rate fluctuations; (x) our ability to retain key executives and other personnel; (xi) extensive and evolving environmental and health and safety regulations; and (xii) other factors described in more detail under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities Exchange Commission (the “SEC”) on March 28, 2013.

All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements as well as other cautionary statements that are made from time to time in our other filings with the SEC and public communications. You should evaluate all forward-looking statements made in this Quarterly Report on Form 10-Q in the context of these risks and uncertainties.

We cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

2

ITEM 1. FINANCIAL STATEMENTS

3

GSE Holding, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

(Unaudited)

	June 30, 2013			December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	12,940		$	18,068
Accounts receivable:
Trade, net of allowance for doubtful accounts of $1,946 and $869, respectively		82,952			96,987
Other		3,344			3,626
Inventory, net		73,382			64,398
Deferred income taxes		1,299			1,111
Prepaid expenses and other		5,209			6,681
Income taxes receivable		1,739			1,538
Total current assets		180,865			192,409
Property, plant and equipment, net		74,618			70,172
Goodwill		34,888			58,895
Other assets		16,715			14,622
TOTAL ASSETS	$	307,086		$	336,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	43,046		$	36,632
Accrued liabilities and other		16,349			23,045
Short-term debt		12,344			985
Current portion of long-term debt		3,112			3,147
Total current liabilities		74,851			63,809
Other liabilities		1,195			1,211
Deferred income taxes		—			1,078
Long-term debt, net of current portion		165,727			167,282
Total liabilities		241,773			233,380
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $.01 par value, 150,000,000 shares authorized, 20,379,350 and 19,846,684 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively		204			198
Additional paid-in capital		131,280			130,617
Accumulated deficit		(64,712	)		(28,372	)
Accumulated other comprehensive income (loss)		(1,459	)		275
Total stockholders’ equity		65,313			102,718
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	307,086		$	336,098

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

4

GSE Holding, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net sales	$	108,201		$	139,168		$	203,335		$	234,085
Cost of Products		94,992			114,958			176,869			195,485
Gross profit		13,209			24,210			26,466			38,600
Selling, general and administrative expenses		13,422			11,814			27,461			22,739
Non-recurring initial public offering related costs		—			—			—			9,655
Amortization of intangibles		395			297			754			598
Impairment of goodwill		26,423			—			26,423			—
Operating income (loss)		(27,031	)		12,099			(28,172	)		5,608
Other expenses (income):
Interest expense, net of interest income		3,686			3,890			7,449			9,637
Loss on extinguishment of debt		—			1,555			—			1,555
Other expense		643			860			982			418
Income (loss) from continuing operations before income taxes		(31,360	)		5,794			(36,603	)		(6,002	)
Income tax provision (benefit)		2,533			2,078			(263	)		2,727
Income (loss) from continuing operations		(33,893	)		3,716			(36,340	)		(8,729	)
Income (loss) from discontinued operations, net of tax		—			80			—			(241	)
Net income (loss).		(33,893	)		3,796			(36,340	)		(8,970	)
Other comprehensive income (loss):
Foreign currency translation adjustment		(232	)		(1,844	)		(1,734	)		(708	)
Comprehensive income (loss)	$	(34,125	)	$	1,952		$	(38,074	)	$	(9,678	)
Basic net income (loss) per common share:
Continuing operations	$	(1.69	)	$	0.19		$	(1.82	)	$	(0.51	)
Discontinued operations		—			0.01			—			(0.01	)
	$	(1.69	)	$	0.20		$	(1.82	)	$	(0.52	)
Diluted net income (loss) per common share:
Continuing operations	$	(1.69	)	$	0.18		$	(1.82	)	$	(0.51	)
Discontinued operations		—			0.01			—			(0.01	)
	$	(1.69	)	$	0.19		$	(1.82	)	$	(0.52	)
Basic weighted-average common shares outstanding		20,067			19,338			19,985			17,230
Diluted weighted-average common shares outstanding		20,067			20,399			19,985			17,230

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

5

GSE Holding, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net loss	$	(36,340	)	$	(8,970	)
Loss from discontinued operations		—			241
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Impairment of goodwill		26,423			—
Depreciation and amortization		8,746			9,315
Loss on extinguishment of debt		—			1,555
Stock-based compensation		433			4,341
Changes in operating assets and liabilities, net of effect of acquisitions:
Decrease (increase) in accounts receivable		15,591			(21,191	)
Increase in inventory		(9,081	)		(14,282	)
Increase in accounts payable		4,022			3,606
All other items, net		(4,838	)		(9,418	)
Net cash provided by (used in) operating activities – continuing operations		4,956			(34,803	)
Net cash used in operating activities – discontinued operations		—			(143	)
Net cash provided by (used in) operating activities		4,956			(34,946	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(10,851	)		(13,206	)
Acquisition of business, net of cash acquired		(9,657	)		—
Net cash used in investing activities		(20,508	)		(13,206	)
Cash flows from financing activities:
Proceeds from lines of credit		61,986			53,673
Repayments of lines of credit		(51,129	)		(51,013	)
Proceeds from long-term debt		—			22,000
Repayments of long-term debt		(1,164	)		(42,073	)
Net proceeds from the exercise of stock options		235			—
Payments for debt issuance costs		(264	)		(1,260	)
Net proceeds from initial public offering		—			65,927
Net cash provided by financing activities – continuing operations		9,664			47,254
Effect of exchange rate changes on cash – continuing operations		760			560
Effect of exchange rate changes on cash – discontinued operations		—			26
Net decrease in cash and cash equivalents		(5,128	)		(312	)
Cash and cash equivalents at beginning of period		18,068			9,076
Cash and cash equivalents at end of period	$	12,940		$	8,764

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

6

GSE Holding, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Nature of Business

Organization and Description of Business —

GSE Holding, Inc., together with its subsidiaries, (the “Company”) is a leading global manufacturer and marketer of highly engineered geosynthetic lining products for environmental protection and confinement applications. These lining products are used in a wide range of infrastructure end markets such as mining, environmental containment, liquid containment (including water infrastructure, agriculture and aquaculture and industrial wastewater treatment applications), coal ash containment and oil and gas. The Company offers a full range of products, including geomembranes, drainage products, geosynthetic clay liners, nonwoven geotextiles, and other specialty products. The Company generates the majority of its sales outside of the United States, including emerging markets in Asia, Latin America, Africa and the Middle East. Its comprehensive product offering and global infrastructure, along with its extensive relationships with customers and end-users, provide it with access to high-growth markets worldwide, visibility into upcoming projects and the flexibility to serve customers regardless of geographic location. The Company manufactures its products at facilities located in the United States, Germany, Thailand, Chile and Egypt.

Effective February 10, 2012, the Company completed its initial public offering (“IPO”) of 7,000,000 shares of common stock.  The Company also granted the underwriters a 30-day option to purchase up to an additional 1,050,000 shares at the IPO price to cover over-allotments, which was exercised. The IPO price was $9.00 per share and the common stock is currently listed on The New York Stock Exchange under the symbol “GSE”.  The Company received proceeds from the IPO, after deducting underwriter’s fees, of approximately $67.4 million.  The Company incurred direct and incremental costs associated with the IPO of approximately $3.8 million. The proceeds from the IPO were used to pay down debt ($51.5 million) and for general working capital purposes.  The Company also incurred and expensed compensation costs of $6.6 million related to IPO bonuses that were paid in cash ($2.3 million) and the issuance of fully vested common stock ($4.3 million) to certain key executives and directors, and $3.0 million related to a management agreement termination fee, which became payable upon the closing of the IPO.

2. Basis of Presentation —

The accompanying condensed consolidated financial statements have been prepared on the same basis as those in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2012. The December 31, 2012 Condensed Consolidated Balance Sheet data was derived from the Company’s year-end audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (‘‘GAAP’’). These condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of such financial statements for the periods indicated. The Company believes that the disclosures herein are adequate to make the information presented not misleading. Operating results for the first six months of 2013 are not necessarily indicative of results to be expected for the year ending December 31, 2013. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2012, and the notes thereto included in the 2012 Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts as well as certain disclosures. The Company’s financial statements include amounts that are based on management’s best estimates and judgments. Actual results could differ from those estimates.

Certain reclassifications were made to the December 31, 2012 and June 30, 2012 consolidated financial statements to conform to the 2013 financial statement presentation.  These reclassifications did not have an impact on previously reported results.

7

3.  Recent Accounting Pronouncements —

The Company qualifies as an emerging growth company under Section 109 of the JOBS Act. An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has chosen to “opt out” of such extended transition period, and as a result, is compliant with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies. Section 108 of the JOBS Act provides that this decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

4.  Goodwill —

In accordance with ASC 350, Intangibles - Goodwill and Other  (“ASC 350”), the Company assesses goodwill and intangible assets with indefinite lives for impairment at the reporting unit level on an annual basis and between annual tests if impairment indicators occur or circumstances change that would more likely than not reduce the fair value below its carrying amount.  The Company’s annual assessment date is October 1.

During the second quarter of 2013, the Company performed an interim assessment of goodwill related to its Europe Africa reporting unit, due to indications that the fair value of this reporting unit may be less than its carrying amount.  Such indications included a continued weakening of economic conditions, under-achievement of previous financial projections and projected continued difficulties in the European market. Based on these indications, an interim impairment test was performed, which resulted in an impairment charge totaling $26.4 million was recorded.

In performing the interim goodwill impairment test, the Company considered three generally accepted approaches for valuing a business: the income, market and cost approaches. Based on the nature of the business, and the current and expected financial performance, it was determined that the market and income approaches were the most appropriate methods for estimating the fair value of the reporting unit. For the income approach the discounted cash flow method was utilized, and considered such factors as sales, depreciation, amortization, capital expenditures, incremental working capital requirements, tax rate and discount rate. Consideration of these factors inherently involves a significant amount of judgment, and significant movements in sales or changes in the underlying assumptions may result in fluctuations of estimated fair value.  For the market approach both the guidelines public company and the comparable transaction methods were used.   The Company considered such factors as appropriate guideline companies, appropriate comparable transactions and control premiums. In determining the fair value of the reporting unit, it was determined that the income approach provided a better indication of value than the market approach. As such, a 65% weighting was assigned to the income approach and a 35% weighting was assigned to the market approach in estimating the value of the reporting unit.

The table below reflects the changes in goodwill by reporting unit during the six months ended June 30, 2013 (in thousands):

	North America			Europe Africa			Asia Pacific		Latin America		Total
Balance at December 31, 2012	$	22,828		$	26,423		$	5,205	$	4,439	$	58,895
Acquisition of SynTec LLC		2,922			—			—		—		2,922
Balance at March 31, 2013		25,750			26,423			5,205		4,439		61,817
Impairment Charge		—			(26,423	)		—		—		(26,423	)
SynTec LLC Purchase Price Adjustment		(506	)		—			—		—		(506	)
Balance at June 30, 2013	$	25,244		$	—		$	5,205	$	4,439	$	34,888

5.  Acquisition of SynTec LLC —

On February 4, 2013, the Company acquired SynTec LLC ("SynTec”), which is now a wholly-owned subsidiary of the Company. Pursuant to the Unit Purchase Agreement dated as of February 4, 2013, the Company acquired all of the outstanding shares of SynTec. The total amount of consideration paid in connection with the acquisition was approximately $9.7 million, and this acquisition was funded with existing cash on hand. The SynTec business is reflected in the North America reporting segment and was acquired by the Company in order to expand its existing market share with additional products, which are complementary to the Company’s existing products.

8

The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the acquisition date (in thousands). The Company incurred approximately $0.7 million of transaction expenses in connection with this acquisition, which are included as a component of selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Accounts receivable	$	2,079
Inventory		1,449
Other current assets		26
Property, plant and equipment		1,335
Identifiable intangible assets		5,121
Goodwill		2,416
Accounts payable and accrued liabilities		(2,769	)
Net assets acquired	$	9,657

The prior purchase price allocation was revised during the three months ended June 30, 2013 in connection with the final working capital settlement of approximately $0.6 million and final appraisal of the machinery and equipment, resulting in a $0.6 million increase in the estimated fair value of the machinery and equipment, and a decrease in the estimated fair values of goodwill ($0.5 million), identifiable intangible assets ($0.5 million) and working capital ($0.2 million). The results of operations for the three months ended March 31, 2013 were not restated as the effect of the revised purchase price allocation was immaterial. As a result of this acquisition, the Company recognized a total of $5.1 million of identifiable intangible assets and $2.4 million of goodwill. The total amount of goodwill is deductible for tax purposes. The results of operations of SynTec are reported in the Company’s condensed consolidated financial statements from the date of the acquisition. SynTec net sales for the three and six months ended June 30, 2013 were approximately $3.4 million and $5.1 million, respectively, and Syntec’s net loss was not material. Pro forma information for the three and six months ended June 30, 2013 and 2012 is not presented as the acquisition was not a material acquisition.

6. Net Income (Loss) per Share

The Company computes basic net income (loss) per share by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued. The dilutive effect of employee stock options is reflected in diluted net loss per share by applying the treasury stock method.

The Company recorded a net loss for the three months ended June 30, 2013 and the six months ended June 30, 2013 and 2012, respectively. Potential common shares are anti-dilutive in periods which the Company records a net loss because they would reduce the respective period’s net loss per share. Anti-dilutive potential common shares are excluded from the calculation of diluted earnings per share. As a result, net diluted loss per share was equal to basic net loss per share in the three months ended June 30, 2013 and the six months ended June 30, 2013 and 2012, respectively. There were approximately 1.2 million and 1.9 million stock options outstanding at June 30, 2013 and 2012, respectively.  Of these, 0.5 million and 1.1 million for June 30, 2013 and 2012, respectively, had exercise prices lower than the average price of Company common shares as of each of those dates. These in-the-money options would have been included in the calculation of diluted earnings per share had the Company not reported a net loss in each of the respective periods. The Company recorded net income during the three months ended June 30, 2012, and included 1.1 million shares related to in-the money options in the diluted weighted-average common shares outstanding for the calculation of diluted net income per share.

7. Inventory –

Inventory consisted of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
Raw materials	$	31,608		$	31,563
Finished goods		40,062			30,849
Supplies		4,749			4,424
Obsolescence and slow moving allowance		(3,037	)		(2,438	)
	$	73,382		$	64,398

9

8. Property, Plant and Equipment –

Property, plant and equipment consisted of the following:

	Estimated useful lives years			June 30, 2013			December 31, 2012
				(in thousands)
Land				$	6,438		$	4,832
Buildings and improvements	7	-	30		32,534			29,515
Machinery and equipment	3	-	10		122,741			117,852
Software			3		8,754			8,400
Furniture and fixtures	3	-	5		816			785
					171,283			161,384
Less – accumulated depreciation and amortization					(96,665	)		(91,212	)
				$	74,618		$	70,172

Depreciation and amortization expense for the three months ended June 30, 2013 and 2012 was $3.5 million and $3.2 million, respectively.  Depreciation and amortization expense for the six months ended June 30, 2013 and 2012 was $6.8 million and $6.5 million, respectively.

9. Intangible Assets –

Intangible assets consisted of the following:

	Estimated useful lives years			June 30, 2013			December 31, 2012
				(in thousands)
Customer lists	5	-	20	$	29,300		$	25,449
Trademarks			5		1,082			—
Non-compete agreements	1	-	10		2,556			2,469
Other			1		363			363
					33,301			28,281
Less accumulated amortization					(27,392	)		(26,732	)
Intangible assets, net				$	5,909		$	1,549

Amortization expense for intangible assets during the three months ended June 30, 2013 and 2012 was $0.4 million and $0.3 million, respectively.  Amortization expense for intangible assets during the six months ended June 30, 2013 and 2012 was $0.8 million and $0.6 million, respectively.

10. Accrued Liabilities and Other –

Accrued liabilities and other consisted of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Customer prepayments	$	446	$	759
Accrued operating expenses		4,476		5,951
Self-insurance reserves		1,598		1,758
Compensation and benefits		2,832		6,786
Accrued interest		2,735		2,522
Taxes, other than income		1,433		2,023
Income taxes payable		483		1,691
Deferred income taxes		739		1,156
Other accrued liabilities		1,607		399
	$	16,349	$	23,045

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11. Long-Term Debt –

Long-term debt consisted of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
First Lien Credit Facility	$	167,162		$	168,177
Capital Lease – Capital Source Bank		2,582			3,156
Other Capital Leases		189			230
Term Loan – German bank secured by equipment, 5.15%, maturing March 2014		245			407
		170,178			171,970
Less – current maturities		(3,112	)		(3,147	)
Unamortized discount on first lien credit facility		(1,339	)		(1,541	)
	$	165,727		$	167,282

First Lien Credit Facility –

The Company has a first lien senior secured credit facility originally in the amount of $170.0 million with General Electric Capital Corporation, Jefferies Finance LLC and the other financial institutions party thereto (as amended from time to time, the “First Lien Credit Facility”), consisting of term loan commitments originally in the amount of $135.0 million (as amended from time to time, the “First Lien Term Loan”) and $35.0 million of revolving loan commitments (as amended from time to time, the “Revolving Credit Facility”).

On April 18, 2012, the First Lien Credit Facility was amended to increase the First Lien Term Loan commitments from $135.0 million to $157.0 million resulting in aggregate capacity of $192.0 million. The Company used the additional borrowing capacity under the First Lien Term Loan to repay in full all outstanding indebtedness under, and to terminate, the Second Lien Term Loan (as defined below) and to pay related fees and expenses.

On September 19, 2012, the Company entered into a fourth amendment to the First Lien Credit Facility, which increased the Capital Expenditure Limitation covenant.  On January 25, 2013, the Company entered into a fifth amendment to the First Lien Credit Agreement to provide more efficient capacity to move funds between foreign entities and clarify or correct certain other technical provisions in the agreement.

Restrictive Covenants.  The First Lien Credit Facility contains various restrictive covenants that include, among other things, restrictions or limitations on the Company’s ability to incur additional indebtedness or issue disqualified capital stock unless certain financial tests are satisfied; pay dividends, redeem subordinated debt or make other restricted payments; make certain loans, investments or acquisitions; issue stock of subsidiaries; grant or permit certain liens on assets; enter into certain transactions with affiliates; merge, consolidate or transfer substantially all of its assets; incur dividend or other payment restrictions affecting certain subsidiaries; transfer or sell assets including, but not limited to, capital stock of subsidiaries; and change the business the Company conducts. For the twelve months ended June 30, 2013 and December 31, 2012, the Company was subject to a Total Leverage Ratio (which is based on a trailing twelve months calculation) not to exceed 5.25 and 5.50:1.00, respectively, and an Interest Coverage Ratio of not less than 2.25:1.00 and 2.15:1.00, respectively.  As of June 30, 2013, the Company was not in compliance with the Total Leverage Ratio covenant necessitating a waiver and sixth amendment to the facility as discussed below. As of June 30, 2013, the Company was in compliance with all other covenants under the First Lien Facility.

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Waiver of Default and Sixth Amendment. On July 30, 2013, the Company entered into a sixth amendment to the First Lien Credit Facility (the “Sixth Amendment”).  Pursuant to the Sixth Amendment, the lenders waived the Company’s default arising as a result of the failure by the Company to be in compliance with the maximum total leverage ratio as of June 30, 2013.  The maximum Total Leverage Ratio for the twelve months ending September 30, 2013, December 31, 2013, and March 31, 2014 was also modified to 6.50:1.00, 6.25:1.00, and 5.17:1.00, respectively.  Beyond March 31, 2014, the maximum Total Leverage Ratios covenants, which become more restrictive, were not changed by the Sixth Amendment. Although the Company can make no assurances, it expects to meet the covenants for each of the twelve months ending September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014, based on the current projections. Accordingly, the debt has been classified as long-term on the consolidated balance sheet.

In addition, commencing on October 31, 2013 and continuing until the Company’s Total Leverage Ratio is less than 5.00:1.00 (the “Required Leveraged Date”), the Total Leverage Ratio as of the last day of any fiscal month that is the first or second fiscal month of a fiscal quarter must not be greater than the Total Leverage Ratio for the most recently completed fiscal quarter.

The Sixth Amendment also increased the margin on the loans by 200 basis points, modified the definition of “EBITDA” to exclude certain expenses from the calculation of EBITDA for purpose of calculating certain debt covenants, and reduced the Company’s borrowing capacity under the revolving credit facility from $35.0 million to approximately $21.5 million, $3.0 million of which may be used for letters of credit. After the Sixth Amendment, the Company has utilized the full capacity under the First Lien Credit Facility, and has $8.0 million available under the New First Lien Revolving Credit Agreement as discussed further below.

In accordance with the Sixth Amendment, the Company must use its best efforts to raise at least $30.0 million of additional unsecured mezzanine indebtedness or other subordinated capital, reasonably acceptable to General Electric Capital Corporation, on or before October 31, 2013.  The first $20.0 million of this mezzanine indebtedness will be applied to pay down the First Lien Credit Facility.  If the Company is not successful in this regard, the margin on the loans will increase by 50 basis points each quarter after October 31, 2013.

The First Lien Credit Facility matures in May 2016. Borrowings under the First Lien Credit Facility incur interest expense that is variable in relation to the London Interbank Offer Rates (“LIBOR”) (and/or Prime) rate. In addition to paying interest on outstanding borrowings under the First Lien Credit Facility, the Company pays a 0.75% per annum commitment fee to the lenders in respect of the unutilized commitments, and letter of credit fees equal to the LIBOR margin on the undrawn amount of all outstanding letters of credit.  As of June 30, 2013, there was $167.2 million outstanding under the First Lien Credit Facility consisting of $154.2 million in term loans and $13.0 million in revolving loans, and the weighted average interest rate on such loans was 7.18%.  The Company had $19.5 million of capacity under the Revolving Credit Facility after taking into account outstanding loan advances and letters of credit.

Guarantees; Security.  The obligations under the First Lien Credit Facility are guaranteed on a senior secured basis by the Company and each of its existing and future wholly-owned domestic subsidiaries, other than GSE International, Inc. and any other excluded subsidiaries. The obligations are secured by a first priority perfected security interest in substantially all of the guarantors’ assets, subject to certain exceptions, permitted liens and permitted encumbrances under the First Lien Credit Facility.

New First Lien Revolving Credit Agreement

On August 8, 2013, the Company entered into a new $8.0 million First Lien Revolving Credit Agreement (the “First Lien Revolving Facility”) with General Electric Capital Corporation (the “Agent”) and the other financial institutions party thereto.

The First Lien Revolving Facility matures on October 31, 2013. Borrowings under the First Lien Revolving Facility incur interest expense that is variable in relation to the London Interbank Offer Rates (“LIBOR”) (and/or Prime) rate.  In addition to paying interest on outstanding borrowings under the First Lien Revolving Facility, the Company pays a 0.75% per annum commitment fee to the lenders in respect of the unutilized commitments, and letter of credit fees equal to the LIBOR margin on the undrawn amount of all outstanding letters of credit.  The other terms of this facility are generally the same as the Company’s First Lien Credit Agreement, as amended.

Second Lien Term Loan –

In 2011, the Company also entered into a 5.5 year, $40.0 million second lien senior secured credit facility consisting of $40.0 million of term loan commitments (the “Second Lien Term Loan”). The Second Lien Term Loan was paid in full on April 18, 2012, and the arrangement was terminated.

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Capital Leases –

On August 17, 2012, the Company entered into an equipment financing arrangement with CapitalSource Bank.  The lease is a three-year lease for equipment cost up to $10.0 million.  As of June 30, 2013, there was $2.6 million outstanding under this lease arrangement, with monthly payments of $0.1 million and an implied interest rate of 7.09%.

During 2012, the Company entered into three other capitalized leases with commercial financial institutions. These leases are for terms of three to four years for equipment cost of $0.3 million with implied interest rates from 5.42% to 8.72%. As of June 30, 2013, there was approximately $0.2 million outstanding under these leases.

Non-Dollar Denominated Credit Facilities –

As of June 30, 2013, the Company had seven credit facilities with several of its international subsidiaries.

The Company has two credit facilities with German banks in the amount of EUR 6.0 million ($7.8 million). These revolving credit facilities bear interest at various market rates, and are used primarily to guarantee the performance of European installation contracts and temporary working capital requirements. As of June 30, 2013, there were no balances outstanding under the lines of credit, EUR 2.1 million ($2.7 million) of bank guarantees and letters of credit outstanding, and EUR 3.9 million ($5.1 million) available under these credit facilities. In addition there was a EUR 0.2 million ($0.3 million) secured term loan with a German bank outstanding as of June 30, 2013, with a maturity date in March 2014.

The Company has three credit facilities with Egyptian banks in the amount of EGP 15.0 million ($2.1 million). These credit facilities bear interest at various market rates and are primarily for cash management purposes. There was EGP 7.8 million ($1.1 million) outstanding under these lines of credit, EGP 5.1 million ($0.7 million) of bank guarantees and letters of credit outstanding, and EGP 2.1 million ($0.3 million) available under these credit facilities as of June 30, 2013.

The Company has a BAHT 350.0 million ($11.3 million) Trade on Demand Financing (accounts receivable) facility with Thai Military Bank Public Company Limited (“TMB”).  This facility bears interest at LIBOR plus1.75%, is unsecured and may be terminated at any time by either TMB or the Company. This facility permits the Company to borrow funds upon presentation of proper documentation of purchase orders or accounts receivable from our customers, in each case with a maximum term not to exceed 180 days. The Company maintains a bank account with TMB, assigns rights to the accounts receivable used for borrowings under this facility, and instructs these customers to remit payments to the bank account with TMB.  TMB may, in its sole discretion, deduct or withhold funds from the Company’s bank account for settlement of any amounts owed by the Company under this facility. There was approximately BAHT 350.0 million ($11.3 million) outstanding and with no amounts available under this facility as of June 30, 2013.

The Company had a BAHT 45.0 million ($1.4 million) revolving credit facility with Export-Import Bank of Thailand (“EXIM”), which had a termination date at the discretion of EXIM or the Company. During the three months ended June 30, 2013, the Company notified EXIM it was electing to terminate this credit facility and, accordingly, EXIM returned the cash deposit security of BAHT 15.0 million ($0.5 million) to the Company.

12. Fair Value of Financial Instruments –

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, GAAP requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used are as follows:

Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables and debt instruments. The carrying values of cash and cash equivalents, trade receivables and trade payables are considered to be representative of their respective fair values due to the short-term nature of these instruments. The carrying amount of the long-term debt of $170.2 million as of June 30, 2013 approximates fair value because the Company’s current borrowing rate does not materially differ from market rates for similar bank borrowings. The long-term debt is classified as a Level 2 item within the fair value hierarchy.

The Company has assets and liabilities measured and recorded at fair value on a non-recurring basis.  These non-financial assets and liabilities include, property, plant and equipment, intangible assets and liabilities acquired in a business combination as well as impairment calculations, when necessary. The fair value of the assets acquired and liabilities assumed in connection with the SynTec acquisition, as discussed in Note 5, were measured at fair value by the Company at the acquisition date. The excess earnings method was used in determining the fair value of customer relationships included in identifiable intangible assets and the relief from royalty method was used in determining the fair value of the trade name / marks included in identifiable intangible assets. The fair value of the property, plant and equipment was determined based on an independent appraisal of a third party. The inputs used by management for the fair value measurements include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3. The goodwill impairment (see Note 4) was primarily based on observable inputs using company specific information and is classified as Level 3.

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13. Stock-Based Compensation –

As of June 30, 2013 there were approximately 1.2 million stock options outstanding with an exercise price range of $0.67 to $11.57 and a weighted average exercise price of $4.92. There were 74,750 and 94,750 options granted during the three and six months ended June 30, 2013, respectively. There were 116,935 and 191,872 shares of restricted stock granted with a three year vesting period during the three and six months ended June 30, 2013, respectively. During the three months ended June 30, 2012, 200,650 stock options were granted. Also during the three months ended June 30, 2012, 57,300 shares of restricted stock were granted with a three year vesting period.

There was $0. 3 million and $0.1 million of stock-based compensation expense related to stock options and restricted stock for the three and six months ended June 30, 2013, respectively, and less than $0.1 million of stock-based compensation expense for the three months ended June 30, 2012.  For the six months ended June 30, 2012, stock-based compensation expense of $4.3 million was recognized related to 478,467 shares of fully vested common stock that was issued to certain key executives and directors in connection with the IPO.

All outstanding stock options are held by employees and former employees of the Company and have an expiration date of 10 years from the date of grant. At June 30, 2013, the average remaining contractual life of options outstanding and exercisable was 3.3 years.

14. Income Taxes –

Income tax expense from continuing operations for the three months ended June 30, 2013 and 2012 was $2.5 million and $2.1 million, respectively.  Income tax expense (benefit) from continuing operations for the six months ended June 30, 2013 and 2012 was ($0.3) million and $2.7 million, respectively. The effective tax rates were (8.1%) and 35.9% for the three months ended June 30, 2013 and 2012, respectively, and 0.7% and (45.4%) for the six months ended June 30, 2013 and 2012 respectively. The difference in the effective tax rate compared with the U.S. federal statutory rate in 2013 is due to the mix of the international jurisdictional rates, nondeductible goodwill impairment and U.S. permanent differences relating to foreign taxes.

15. Commitments and Contingencies –

Warranties

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 accrues a warranty reserve based on estimates for warranty claims. This estimate is based on historical claims history and current business activities and is accrued as a cost of sales in the period such business activity occurs. The table below reflects a summary of activity of the Company’s operations for warranty obligations for the six months ended June 30, 2013 and 2012 (in thousands):

	2013			2012
	(in thousands)
Balance at January 1,	$	1,175		$	2,225
Changes in estimates		(15	)		9
Payments		—			(35	)
Balance at March 31,		1,160			2,199
Changes in estimates		(178	)		(739	)
Payments		—			(42	)
Balance at June 30,	$	982		$	1,418

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 contractor’s 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.

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Bonding – Bank Guarantees –

The Company, in some direct sales and raw material acquisition situations, is required to post performance bonds or bank guarantees as part of the contractual guarantee for its performance. The performance bonds or bank guarantees can be in the full amount of the contracts. To date the Company has not received any claims against any of the posted securities, most of which terminate at the final completion date of the contracts. As of June 30, 2013, the Company had $6.0 million of bonds outstanding and $5.9 million of guarantees and letters of credit issued under its bank lines.

Litigation and Claims –

The Company is a party to various legal actions arising in the ordinary course of our business. These legal actions cover a broad variety of claims spanning the Company’s entire business. The Company believes it is not probable and reasonably estimable that resolution of these legal actions will, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.

16. Related Party Transaction –

Management Agreement with CHS Management IV LP

In connection with the 2004 acquisition of the Company by CHS, the Company and GEO Holdings entered into a management agreement with CHS Management IV LP (“CHS Management”) a limited partnership (1) of which CHS is the general partner and (2) which is the general partner of CHS IV. Pursuant to the management agreement, CHS Management provided certain financial and management consulting services to GEO Holdings and to the Company. In consideration of those services, the Company paid fees to CHS Management in an aggregate annual amount of $2.0 million payable in equal monthly installments. Under the management agreement, the Company paid and expensed $0.2 million during the six months ended June 30, 2012. In connection with the Company’s IPO, the management agreement was terminated and a fee of $3.0 million was paid and expensed during the six months ended June 30, 2012. The amounts paid to CHS are included in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. As of June 30, 2013, there were no amounts payable to CHS under the terminated agreement.

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17. Segment Information –

The Company’s operating and external reporting segments are based on geographic regions, which is consistent with the basis of how management internally reports and evaluates financial information used to make operating decisions. The Company’s reportable segments are North America, Europe Africa, Asia Pacific, Latin America and Middle East.

The following tables present information about the results from continuing operations and assets of the Company’s reportable segments for the periods presented.

	Three months ended June 30, 2013
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	46,275		$	28,832		$	22,002		$	7,278		$	3,814		$	108,201
Intersegment sales		7,660			73			2,454			—			546			10,733
Total segment net sales		53,935			28,905			24,456			7,278			4,360			118,934
Gross profit		8,299			919			2,933			692			366			13,209
Gross margin		17.9	%		3.2	%		13.3	%		9.5	%		13.3	%		12.2	%

	Three months ended June 30, 2012
	N. America			Europe Africa			Asia Pacific			Latin America				Middle East			Total
	(in thousands)
Net sales to external customers	$	60,106		$	41,167		$	24,074			$	11,197		$	2,624		$	139,168
Intersegment sales		8,192			—			2,310				—			1,162			11,664
Total segment net sales		68,298			41,167			26,384				11,197			3,786			150,832
Gross profit		12,831			5,338			3,853				1,839			349			24,210
Gross margin		21.3	%		13.0	%		16.0	%			16.4	%		13.3	%		17.4	%

	Six months ended June 30, 2013
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	87,649		$	51,185		$	38,589		$	18,983		$	6,929		$	203,335
Intersegment sales		14,609			97			6,241			—			1,583			22,530
Total segment net sales		102,258			51,282			44,830			18,983			8,512			225,865
Gross profit		17,245			1,076			5,132			2,203			810			26,466
Gross margin		19.7	%		2.1	%		13.3	%		11.6	%		11.7	%		13.0	%

	Six months ended June 30, 2012
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	96,332		$	67,018		$	42,644		$	23,673		$	4,418		$	234,085
Intersegment sales		18,572			—			5,452			—			2,326			26,350
Total segment net sales		114,904			67,018			48,096			23,673			6,744			260,435
Gross profit		22,062			6,299			7,173			2,598			468			38,600
Gross margin		22.9	%		9.4	%		16.8	%		11.0	%		10.6	%		16.5	%

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The following tables reconcile the segment net sales information presented above to the consolidated financial information.

	Reconciliation to Consolidated Sales
	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
	(in thousands)
Total segment net sales	$	118,934		$	150,832		$	225,865		$	260,435
Intersegment sales		(10,733	)		(11,664	)		(22,530	)		(26,350	)
Consolidated net sales	$	108,201		$	139,168		$	203,335		$	234,085

The following tables present information about assets of the Company’s reportable segments (in thousands):

	N. America		Europe Africa		Asia Pacific		Latin America		Middle East		Total
December 31, 2012	$	229,272	$	62,154	$	66,283	$	38,774	$	16,715	$	413,188
June 30, 2013	$	196,207	$	56,905	$	66,374	$	30,185	$	18,602	$	368.273

	Reconciliation to Consolidated Assets
	June 30, 2013			December 31, 2012
Total segment assets	$	368,273		$	413,188
Intersegment balances		(61,187	)		(77,090	)
Consolidated assets	$	307,086		$	336,098

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

You should read this discussion and analysis together with our unaudited condensed consolidated financial statements and the related notes included in Item 1 of this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC on March 28, 2013. This discussion and analysis contain forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Forward-Looking Statements.”

Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,”  “GSE Holding,” “our business” and “our company” refer to GSE Holding, Inc. and its consolidated subsidiaries as a combined entity.

Overview

We are a leading global provider of sales of highly engineered geosynthetic containment solutions for environmental protection and confinement applications. Our products are used in a wide range of infrastructure end markets such as mining, waste management, liquid containment (including water infrastructure, agriculture and aquaculture), coal ash containment, and shale oil and gas. We are one of the few providers with the full suite of products required to deliver customized solutions for complex projects on a global basis, including geomembranes, drainage products, geosynthetic clay liners (“GCLs”), nonwoven geotextiles, and specialty products. We have a global infrastructure that includes seven manufacturing facilities located in the United States, Germany, Chile, Egypt and Thailand, 18 regional sales offices located in 12 countries and engineers and technical salespeople located on four continents. We generate the majority of our sales outside of North America, including high-growth emerging markets in Asia, Latin America, Africa and the Middle East. Our comprehensive product offering and global infrastructure, along with our extensive relationships with customers and end-users, provide us with access to high-growth markets worldwide and the flexibility to serve customers regardless of geographic location.

Segment Data

We have organized our operations into five principal reporting segments: North America, Europe Africa, Asia Pacific, Latin America and Middle East. We generate a greater proportion of our gross profit, as compared to our sales, in our North America segment, which consists of the United States, Canada and Mexico, because our product mix in this segment is focused on higher-margin products. We expect the percentage of total gross profit derived from outside North America to increase in future periods as we continue to focus on selling these higher-value products in our other segments. We also expect the percentage of sales derived from outside North America to increase in future periods as we continue to expand globally.

The following table presents our net sales and gross profit by segment for the period presented, as well as gross profit as a percentage of net sales from each segment:

	North America			Europe Africa			Asia Pacific			Latin America			Middle East
	(in thousands, except percentages)
Three months ended June 30, 2013
Net sales	$	46,275		$	28,832		$	22,002		$	7,278		$	3,814
Gross profit		8,299			919			2,933			692			366
Gross margin		17.9	%		3.2	%		13.3	%		9.5	%		9.6	%

	North America			Europe Africa			Asia Pacific			Latin America			Middle East
	(in thousands, except percentages)
Six months ended June 30, 2013
Net sales	$	87,649		$	51,185		$	38,589		$	18,983		$	6,929
Gross profit		17,245			1,076			5,132			2,203			810
Gross margin		19.7	%		2.1	%		13.3	%		11.6	%		11.7	%

The following table presents our net sales from each segment, as a percentage of total net sales:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
North America		42.8	%		43.2	%		43.1	%		41.2	%
Europe Africa		26.7			29.6			25.2			28.6
Asia Pacific		20.3			17.3			19.0			18.2
Latin America		6.7			8.0			9.3			10.1
Middle East		3.5			1.9			3.4			1.9
Total		100.0	%		100.0	%		100.0	%		100.0	%

North America

North America net sales decreased $13.8 million, or 23.0%, during the three months ended June 30, 2013 to $46.3 million from $60.1 million during the three months ended June 30, 2012. Net sales decreased $15.4 million  due to lower volumes. Volumes were impacted by increased competitor manufacturing capacity, which led to increased pricing pressure.  North America gross profit decreased $4.5 million, or 35.2%, to $8.3 million during the three months ended June 30, 2013 from $12.8 million in the prior year period due to the decrease in volumes, changes in product mix, and competitive pricing pressure.

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North America net sales decreased $8.7 million, or 9.0%, during the six months ended June 30, 2013 to $87.6 million from $96.3 million in the six months ended June 30, 2012. Lower volumes and changes in product mix were the primary reasons for the decrease in net sales. North America gross profit decreased $4.9 million, or 22.2%, during the six months ended June 30, 2013 to $17.2 million from $22.1 million in the prior year period due to the decrease in volumes, lower margins due to competitive pricing pressure, and changes in product mix.

Europe Africa

The weakening European economy had a negative effect on net sales and gross profit during the three and six months ended June 30, 2013.

Europe Africa net sales decreased $12.4 million, or 30.1%, during the three months ended June 30, 2013 to $28.8 million from $41.2 million in the three months ended June 30, 2012. Net sales decreased $12.8 million due to lower volumes and $2.1 million due to changes in product mix. Europe Africa net sales were positively affected by $1.4 million from changes in foreign currency exchange rates and $1.1 million due to an increase in selling prices. Europe Africa gross profit decreased $4.4 million, or 83.0%, to $0.9 million in the three months ended June 30, 2013 compared to $5.3 million in the three months ended June 30, 2012 primarily due to changes in product mix and lower volume shipped.

Europe Africa net sales decreased $15.8 million, or 23.6%, during the six months ended June 30, 2013 to $51.2 million from $67.0 million in the prior year period. Lower volumes and changes in product mix decreased net sales by $19.1 million. Europe Africa net sales were positively affected by $1.9 million from increased selling prices and $1.4 million due to changes in foreign currency exchange rates. Europe Africa gross profit decreased $5.2 million, or 82.5%, to $1.1 million in the six months ended June 30, 2013 compared to $6.3 million in the six months ended June 30, 2012 primarily due to changes in product mix and decreased volumes.

Asia Pacific

Asia Pacific net sales decreased $2.1 million, or 8.7%, during the three months ended June 30, 2013 to $22.0 million from $24.1 million in the three months ended June 30, 2012. Lower volumes decreased net sales by $3.0 million which was partially offset by changes in product mix and increased selling prices. Asia Pacific gross profit decreased $1.0 million, or 25.6%, during the three months ended June 30, 2013 to $2.9 million from $3.9 million in the prior year period. Gross profit decreased $1.5 million due to increased manufacturing costs and lower volumes partially offset by changes in product mix.

Asia Pacific net sales decreased $4.0 million, or 9.4%, during the six months ended June 30, 2013 to $38.6 million from $42.6 million in the six months ended June 30, 2012. Lower volumes decreased net sales by $6.3 million which was partially offset by increased selling prices and changes in product mix. Asia Pacific gross profit decreased $2.1 million, or 29.2%, during the six months ended June 30, 2013 to $5.1 million from $7.2 million in the prior year period. Gross profit decreased $2.8 million due to increased manufacturing costs and lower volumes, partially offset by changes in in product mix.

Latin America

Latin America net sales decreased $3.9 million, or 34.8%, during the three months ended June 30, 2013 to $7.3 million from $11.2 million in the three months ended June 30, 2012 primarily due to lower volumes. Latin America gross profit decreased $1.1 million, or 61.1%, during the three months ended June 30, 2013 to $0.7 million from $1.8 million in the prior year period primarily due to the lower volumes.

Latin America net sales decreased $4.7 million, or 19.8%, during the six months ended June 30, 2013 to $19.0 million from $23.7 million in the six months ended June 30, 2012 primarily due to lower volumes. Latin America gross profit decreased $0.4 million, or 15.4%, during the six months ended June 30, 2013 to $2.2 million from $2.6 million in the six months ended June 30, 2012 primarily due to lower volumes.

Middle East

Middle East net sales increased $1.2 million, or 46.2% to $3.8 million during the three months ended June 30, 2013 from $2.6 million in the three months ended June 30, 2012 primarily due to an increase in volumes and increases in selling prices. Middle East net sales were negatively affected by $0.6 million from changes in foreign currency exchange rates. Middle East gross profit increased $0.1 million, or 33.3%, to $0.4 million in the three months ended June 30, 2013 from $0.3 million in the three months ended June 30, 2012 primarily due to higher volumes.

Middle East net sales increased $2.5 million, or 56.8% to $6.9 million during the six months ended June 30, 2013 from $4.4 million in the six months ended June 30, 2012 primarily due to an increase in volumes and increases in selling prices. Middle East gross profit increased $0.3 million, or 60.0%, to $0.8 million in the six months ended June 30, 2013 from $0.5 million in the prior year period primarily due to the increase in volumes.

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Key Drivers

The following are the key drivers of our business:

Timing of Projects.  Our financial results are influenced by the timing of projects that are developed and constructed by the end-users of our products in our primary end markets, including mining, waste management and liquid containment.

Mining projects and associated capital expenditures are driven by global commodity supply and demand factors. Our products are used primarily in metal mining, including copper, silver, uranium and gold. Metal mining projects are typically characterized by long lead times and large capital investment by the owners of the projects. In addition, these projects are often located in remote geographies with limited infrastructure, such as power and roads, creating complex logistics management requirements and long supplier lead times.

In our waste management end market, landfill construction and expansion projects are driven by waste volume generation and the need for additional municipal solid waste disposal resources. In developed markets, landfill construction and expansion projects are influenced by economic factors, particularly retail sales and consumer spending, housing starts and commercial and infrastructure construction. In emerging markets, waste management projects are also driven primarily by increased per capita GDP, which is positively correlated with waste generation, as well as by increasing environmental awareness and regulation, as discussed further below.

Finally, projects in our liquid containment end markets, including water management infrastructure, agriculture and aquaculture and industrial wastewater treatment applications, are driven by investment in civil and industrial infrastructure globally. This global spending is influenced by increased urbanization, increased wealth and protein-rich diets in developing economies necessitating higher levels of food production, population growth and other secular and economic factors, in both developed and emerging markets.

Environmental Regulations.  Our business is influenced by international levels of environmental regulation and mandated geosynthetics specifications, which vary across jurisdictions and by end market. For example, China has addressed the need for increased environmentally sound solid waste disposal resources in its twelfth five-year plan, the most recent in a series of economic development initiatives, which mandates the investment of 180 billion Yuan, or approximately $28 billion, in the urban waste disposal sector between 2011 and 2015. Environmental regulations often require the use of geosynthetic products to contain materials and protect groundwater in various types of projects. In emerging markets, waste management and water infrastructure projects are driven by an ongoing increase in environmental awareness and regulation that has developed through the continued urbanization and increased affluence of these economies.

Although environmental regulations may not be as stringent or may not be enforced in emerging markets, we believe these regulations will continue to develop and to be enforced more diligently. In developed markets, existing regulations, which often specify our products, tend to be highly specific and stringently enforced. As a result, regulatory changes in developed markets tend to impact new end markets, such as coal ash containment in the United States.

Seasonality.  Due to the significant amount of our projects in the northern hemisphere (North America and Europe), our operating results are impacted by seasonal weather patterns in these markets. Our sales in the first and fourth quarters of the calendar year have historically been lower than sales in the second and third quarters. This is primarily due to lower activity levels in our primary end markets during the winter months in the northern hemisphere. The impact of this seasonality is partially mitigated by our mining and liquid containment end markets, which are located predominantly in the southern hemisphere.

Resin Cost Volatility.  Resin-based material, derived from crude petroleum and natural gas, accounted for 78.5% and 79.4% of our cost of products for the three and six months ended June 30, 2013, respectively. Our ability to both manage the cost of our resin purchases as well as pass fluctuations in the cost of resin through to our customers is critical to our profitability. Fluctuations in the price of crude oil impact the cost of resin. In addition, planned and unplanned outages in facilities that produce polyethylene and its feedstock materials have historically impacted the cost of resin. In 2010, we implemented successful performance initiatives that focused on reducing the risk of volatility in resin costs on our profitability. We have developed policies, procedures, tools and organizational training procedures to enable better resin cost management and facilitate the efficient pass through of increases in our resin costs to our customers. These initiatives included diversifying our resin sources, hiring a polyethylene expert to lead procurement, implementing pricing tools that account for projected resin pricing, institutionalizing a bid approval process, creating a plant sourcing decision model, and running a large project tracking process. While the significant majority of our products are sold under orders that include 30-day re-pricing provisions at our option, and while we have taken advantage of this option in the past, the policies, processes, tools and organizational training procedures described above allow us to limit the need to re-price projects already under contract. This, in turn, helps us better manage our relationships with our customers. We believe that managing the risks associated with volatility in resin costs is now among our critical and core competencies.

21

Results of Operations

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

	Three Months Ended June 30,					Period over
	2013			2012		Period Change
	(in thousands)
Net sales	$	108,201		$	139,168	$	(30,967	)	(22.3	)%
Cost of products		94,992			114,958		(19,966	)	(17.4	)
Gross profit		13,209			24,210		(11,001	)	(45.4	)
Selling, general and administrative expenses		13,422			11,814		1,608		13.6
Amortization of intangibles		395			297		98		33.0
Impairment of goodwill		26,423			—		26,423		N/A
Operating income		(27,031	)		12,099		(39,130	)	*
Other expenses:
Interest expense, net		3,686			3,890		(204	)	(5.2	)
Loss on extinguishment of debt		—			1,555		(1,555	)	(100.0	)
Other expense, net		643			860		(217	)	(25.2	)
(Loss) income from continuing operations before income taxes		(31,360	)		5,794		(37,154	)	*
Income tax provision		2,533			2,078		455		21.9
Income (loss) from continuing operations	$	(33,893	)	$	3,716	$	(37,609	)	*

* Not meaningful

Net sales

Consolidated net sales decreased $31.0 million, or 22.3%, to $108.2 million for the three months ended June 30, 2013 from $139.2 million for the three months ended June 30, 2012. Consolidated net sales decreased $32.9 million due to lower volumes and $1.8 million for changes in product mix. Net sales were positively affected by approximately $0.8 million from changes in foreign currency exchange rates, principally the Euro.

Cost of Products

Cost of products decreased $20.0 million, or 17.4%, to $95.0 million for the three months ended June 30, 2013 from $115.0 million for the three months ended June 30, 2013. Cost of products decreased $27.0 million due to the lower volumes, which was partially offset by increases in raw material cost, which was passed on to our customers as reflected in the increase in sales prices and changes in foreign currency exchange rates.

Gross Profit

Consolidated gross profit for the three months ended June 30, 2013 decreased $11.0 million, or 45.4%, to $13.2 million compared to $24.2 million in the prior year period due to the factors noted above. Gross profit as a percentage of net sales was 12.2% for the three months ended June 30, 2013 compared with 17.4% for the three months ended June 30, 2012. The decrease in gross profit as a percentage of net sales was due to the weakening European economy and competitive pricing pressure in North America.

Selling, General and Administrative Expenses

SG&A expense for the three months ended June 30, 2013 was $13.4 million compared to $11.8 million for the three months ended June 30, 2012, an increase of $1.6 million. SG&A expense for the three months ended June 30, 2013 increased approximately $1.0 million in costs associated with increased personnel and increased bad debt expense of $0.6 million primarily relating to European customers. SG&A as a percentage of net sales for the three months ended June 30, 2013 was 12.4% compared to 8.5% for the three months ended June 30, 2012.

Goodwill

During the second quarter of 2013, we performed an interim assessment of goodwill related to our Europe Africa reporting unit, due to indications that the fair value of this reporting unit may be less than its carrying amount.  Such indications included a continued weakening of economic conditions, under-achievement of previous financial projections and projected continued difficulties in the European market.  Based on these indications, an interim impairment test was performed, which resulted in an impairment charge totaling $26.4 million was recorded. (See Note 4 “Goodwill” in the Notes to Unaudited Condensed Consolidated Financial Statements).

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Other Expenses (Income)

Interest expense was $3.7 million for the three months ended June 30, 2013 compared to $3.9 million for the three months ended June 30, 2012. The $0.2 million decrease in interest expense in the three months ended June 30, 2013 was due to lower interest rates on higher debt balances outstanding 2013. The weighted average debt balance outstanding was $187.4 million and $176.9 million for the three months ended June 30, 2013 and 2012, respectively, and weighted average effective interest rates were 6.6% and 7.5% for the three months ended June 30, 2013 and 2012, respectively.

Income Tax Expense (benefit)

Income tax expense from continuing operations for the three months ended June 30, 2013 and 2012 was $2.5 million and $2.1 million, respectively. The difference in the effective tax rate compared with the U.S. federal statutory rate in 2013 is due to the mix of the international jurisdictional rates, nondeductible goodwill impairment and U.S. permanent differences relating to foreign taxes.

Adjusted EBITDA

Adjusted EBITDA from continuing operations was $3.9 million during the three months ended June 30, 2013, a decrease of $12.1 million, or 75.6%, from $16.0 million during 2012. The decrease in Adjusted EBITDA was primarily due to a decrease in our gross profit of $11.0 million and an increase in our SG&A expense of $1.6 million.

Adjusted EBITDA represents net income or loss from continuing operations before interest expense, income tax expense, depreciation and amortization of property, plant and equipment and intangibles, foreign currency transaction gains/losses, restructuring expenses, certain professional fees, stock-based compensation expense, management fees paid to CHS, public offering related costs, and impairment of goodwill.   Disclosure in this Quarterly Report on Form 10-Q of Adjusted EBITDA,  which is a “non-GAAP financial measure,” as defined under the rules of the SEC, is intended as a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA should not be considered as an alternative to net income (loss), income (loss) from continuing operations, earnings per share or any other performance measures derived in accordance with GAAP. Our presentation of Adjusted EBITDA should not be construed to imply that our future results will be unaffected by unusual or non-recurring items.

We believe this measure is meaningful to our investors to enhance their understanding of our financial performance. Although Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs, we understand that it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare our performance with the performance of other companies that report Adjusted EBITDA.  Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The following table reconciles net loss from continuing operations to Adjusted EBITDA for the periods presented in this table and elsewhere in this Quarterly Report on Form 10-Q.

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Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2012

	Six Months Ended June 30,						Period over
	2013			2012			Period Change
	(in thousands)
Net sales	$	203,335		$	234,085		$	(30,750	)	(13.1	)%
Cost of products		176,869			195,485			(18,616	)	(9.5	)
Gross profit		26,466			38,600			(12,134	)	(31.4	)
Selling, general and administrative expenses		27,461			22,739			4,722		20.8
Non-recurring initial public offering related costs		—			9,655			(9,655	)	(100.0	)
Amortization of intangibles		754			598			156		26.1
Impairment of goodwill		26,423			—			26,423		N/A
Operating income		(28,172	)		5,608			(33,780	)	*
Other expenses (income):
Interest expense, net		7,449			9,637			(2,188	)	(22.7	)
Loss on extinguishment of debt		—			1,555			(1,555	)	(100.0	)
Other expense, net		982			418			564		134.9
Loss from continuing operations before income taxes		(36,603	)		(6,002	)		(30,601	)	*
Income tax provision (benefit)		(263	)		2,727			(2,990	)	(109.6	)
Loss from continuing operations	$	(36,340	)	$	(8,729	)	$	(27,611	)	*

* Not meaningful

Net sales

Consolidated net sales decreased $30.8 million, or 13.1%, to $203.3 million for the six months ended June 30, 2013 from $234.1 million for the six months ended June 30, 2012. Consolidated net sales decreased $33.7 million due to lower volumes and $0.7 million for changes in product mix.  Net sales were positively affected by approximately $0.5 million from changes in foreign currency exchange rates, principally the Euro.

Cost of Products

Cost of products decreased $18.6 million, or 9.5%, to $176.9 million for the six months ended June 30, 2013 from $195.5 million for the six months ended June 30, 2012 primarily due to the lower volumes.

Gross Profit

Consolidated gross profit for the six months ended June 30, 2013 decreased $12.1 million, or 31.4%, to $26.5 million compared to $38.6 million for the six months ended June 30, 2012 due to the factors noted above.  Gross profit as a percentage of net sales was 13.0% for the six months ended June 30, 2013 compared with 16.5% for the six months ended June 30, 2012. The decrease in gross profit as a percentage of net sales was due to the weakening European economy and competitive pricing pressure in North America.

Selling, General and Administrative Expenses

SG&A expense, excluding non-recurring initial public offering costs, for the six months ended June 30, 2013 was $27.4 million compared to $22.7 million for the six months ended June 30, 2012, an increase of $4.7 million. SG&A expense for the six months ended June 30, 2013 increased approximately $2.1 million in costs associated with increased personnel, increased professional fees of $2.0 million and an increase of approximately $0.5 million in bad debt expense primarily relating to European customers.

Excluding the expenses related to the IPO, SG&A as a percentage of sales for the six months ended June 30, 2013 was 13.5% compared to 9.7% for the six months ended June 30, 2012.

Goodwill

As previously discussed, during the second quarter of 2013,  an impairment charge totaling $26.4 million was recorded relating to our Europe Africa reporting unit.

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Other Expenses (Income)

Interest expense was $7.4 million for the six months ended June 30, 2013 compared to $9.6 million for the six months ended June 30, 2012. The $2.2 million decrease in interest expense in the six months ended June 30, 2013 was primarily due to the write off of $1.1 million of deferred financing costs associated with the $20.0 million prepayment of the Second Lien Term Loan during the 2012 period and lower interest rates on the outstanding debt in 2013. The weighted average debt balance outstanding was $181.2 million and $181.1 million for the six months ended June 30, 2013 and 2012, respectively, and weighted average effective interest rates were 7.1% and 8.1% for the six months ended June 30, 2013 and 2012, respectively.

Income Tax Expense

Income tax (benefit) expense from continuing operations for the six months ended June 30, 2013 and 2012 was $(0.3) million and $2.7 million, respectively. The difference in the effective tax rate compared with the U.S. federal statutory rate is due to the mix of the international jurisdictional rates, nondeductible goodwill impairment and in 2012 the changes in the valuation allowance.

Adjusted EBITDA

Adjusted EBITDA was $7.3 million during the six months ended June 30, 2013, a decrease of $15.8 million, or 68.4%, from $23.1 million during the six months ended June 30, 2012. The decrease in Adjusted EBITDA was primarily due to a decrease in our gross profit of $12.1 million and an increase in our SG&A expense of $4.7 million.

The following table reconciles net income (loss), the most comparable GAAP financial measure, to Adjusted EBITDA for the periods presented:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Net (loss) income	$	(33,893	)	$	3,796		$	(36,340	)	$	(8,970	)
(Income) loss from discontinued operations, net of tax		—			(80	)		—			241
Interest expense, net		3,686			3,890			7,449			9,637
Income tax expense (benefit)		2,533			2,078			(263	)		2,727
Depreciation and amortization expense		3,847			3,522			7,573			7,066
Foreign exchange loss		388			631			759			58
Impairment of goodwill		26,423			—			26,423			—
Loss on extinguishment of debt		—			1,555			—			1,555
Restructuring expense		189			33			189			93
Professional fees		357			559			953			597
Stock-based compensation expense		279			35			433			35
Public offering related costs		—			—			—			9,655
Management fees		—			14			—			229
Other		101			10			109			144
Adjusted EBITDA	$	3,910		$	16,043		$	7,285		$	23,067

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Liquidity and Capital Resources

General

We rely on borrowings under our Amended First Lien Credit Facility (as defined below) and other financing arrangements around the world as our primary source of liquidity. See “Description of Long-Term Indebtedness” for a description of our long-term debt. Our cash flow from operations serves as an additional source of liquidity to the extent available. Our primary liquidity needs are to finance working capital, capital expenditures and debt service. The most significant components of our working capital are cash and cash equivalents, accounts receivable, inventories, accounts payable and other current liabilities.

Although we can make no assurances, we believe that our cash on hand, together with the availability of borrowings under our Senior Secured Credit Facilities and other financing arrangements and cash generated from operations, will be sufficient to meet working capital requirements, anticipated capital expenditures and scheduled interest payments on our indebtedness for more than the next twelve months.

Cash and Cash Equivalents

As of June 30, 2013, we had $12.9 million in cash and cash equivalents.  We maintain cash and cash equivalents at various financial institutions located in the United States, Germany, Thailand, Egypt and Chile. As of June 30, 2013, $2.9 million, or 22%, was held in domestic accounts with various institutions and approximately $10.0 million, or 78%, was held in accounts outside of the United States with various financial institutions.

In general, when an entity in a foreign jurisdiction repatriates cash to the United States, the amount of such cash is treated as a dividend taxable at current U.S. tax rates. We have not historically repatriated the earnings of any of our foreign subsidiaries, and we currently believe our foreign earnings are permanently reinvested. If we were to repatriate earnings from our foreign subsidiaries in the future, we would be subject to U.S. income taxes upon the distribution of cash to us from our non-U.S. subsidiaries. However, our tax attributes may be available to reduce the amount of the additional tax liability. The U.S. tax effects of potential dividends and related foreign tax credits associated with earnings indefinitely reinvested have not been realized pursuant to ASC-740-10, “Income Taxes.”

First Lien Credit Facility

We have a first lien senior secured credit facility originally in the amount of $170.0 million with General Electric Capital Corporation, Jefferies Finance LLC and the other financial institutions party thereto (as amended from time to time, the “First Lien Credit Facility”), consisting of term loan commitments originally in the amount of $135.0 million (as amended from time to time, the “First Lien Term Loan”) and $35.0 million of revolving loan commitments (as amended from time to time, the “Revolving Credit Facility”).

On January 25, 2013, we entered into a fifth amendment to the First Lien Credit Agreement to provide more efficient capacity to move funds between foreign entities and clarify or correct certain other technical provisions in the agreement.

Restrictive Covenants. The First Lien Credit Facility contains various restrictive covenants that include, among other things, restrictions or limitations on our ability to incur additional indebtedness or issue disqualified capital stock unless certain financial tests are satisfied; pay dividends, redeem subordinated debt or make other restricted payments; make certain loans, investments or acquisitions; issue stock of subsidiaries; grant or permit certain liens on assets; enter into certain transactions with affiliates; merge, consolidate or transfer substantially all of its assets; incur dividend or other payment restrictions affecting certain subsidiaries; transfer or sell assets including, but not limited to, capital stock of subsidiaries; and change the business we conduct. For the twelve months ended June 30, 2013 and December 31, 2012, we were subject to a Total Leverage Ratio (which is based on a trailing twelve months calculation) not to exceed 5.25 and 5.50:1.00, respectively, and an Interest Coverage Ratio of not less than 2.25:1.00 and 2.15:1.00, respectively.  As of June 30, 2013, we were not in compliance with the Total Leverage Ratio covenant necessitating a waiver and sixth amendment to the facility as discussed below. As of June 30, 2013, we were in compliance with all other covenants under the First Lien Facility.

Waiver of Default and Sixth Amendment. On July 30, 2013, we entered into a sixth amendment to the First Lien Credit Facility (the “Sixth Amendment”).  Pursuant to the Sixth Amendment, the lenders waived our default arising as a result of the failure by us to be in compliance with the maximum total leverage ratio as of June 30, 2013.  The maximum Total Leverage Ratio for the twelve months ending September 30, 2013, December 31, 2013, and March 31, 2014 was also modified to 6.50:1.00, 6.25:1.00, and 5.17:1.00, respectively.  Beyond March 31, 2014, the maximum Total Leverage Ratios covenants which become more restrictive were not changed by the Sixth Amendment. Although we can make no assurances, we expect to meet the covenants for each of the twelve months ending September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 based on current projections.

In addition, commencing on October 31, 2013 and continuing until our Total Leverage Ratio is less than 5.00:1.00 (the “Required Leveraged Date”), we have agreed that the Total Leverage Ratio as of the last day of any fiscal month that is the first or second fiscal month of a fiscal quarter will not be greater than the Total Leverage Ratio for the most recently completed fiscal quarter.

The Sixth Amendment also increased the margin on the loans by 200 basis points, modified the definition of “EBITDA” to exclude certain expenses from the calculation of EBITDA for purpose of calculating certain debt covenants, and reduced our borrowing capacity under the revolving credit facility from $35.0 million to approximately $21.5 million, $3.0 million of which may be used for letters of credit. After the Sixth Amendment, we have utilized the full capacity under the First Lien Credit Facility, and we have $8.0 million available under the New First Lien Revolving Credit Agreement as discussed further below.

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In accordance with the Sixth Amendment, we must use our best efforts to raise at least $30.0 million of additional unsecured mezzanine indebtedness or other subordinated capital, reasonably acceptable to General Electric Capital Corporation, on or before October 31, 2013.  The first $20.0 million of this mezzanine indebtedness will be applied to pay down the First Lien Credit Facility.  If we are not successful in this regard, the margin on the loans will increase by 50 basis points each quarter after October 31, 2013. We are in the process of engaging an investment banking firm to assist with this process.

The First Lien Credit Facility matures in May 2016. Borrowings under the First Lien Credit Facility incur interest expense that is variable in relation to the London Interbank Offer Rates (“LIBOR”) (and/or Prime) rate. In addition to paying interest on outstanding borrowings under the First Lien Credit Facility, we pay a 0.75% per annum commitment fee to the lenders in respect of the unutilized commitments, and letter of credit fees equal to the LIBOR margin on the undrawn amount of all outstanding letters of credit.  As of June 30, 2013, there was $167.2 million outstanding under the First Lien Credit Facility consisting of $154.2 million in term loans and $13.0 million in revolving loans, and the weighted average interest rate on such loans was 7.18%.  We had $19.5 million of capacity under the Revolving Credit Facility after taking into account outstanding loan advances and letters of credit.

Guarantees; Security.  The obligations under the First Lien Credit Facility are guaranteed on a senior secured basis by us and each of our existing and future wholly-owned domestic subsidiaries, other than GSE International, Inc. and any other excluded subsidiaries. The obligations are secured by a first priority perfected security interest in substantially all of the guarantors’ assets, subject to certain exceptions, permitted liens and permitted encumbrances under the First Lien Credit Facility.

New First Lien Revolving Credit Agreement

On August 8, 2013, we entered into a new $8.0 million First Lien Revolving Credit Agreement (the “First Lien Revolving Facility”) with General Electric Capital Corporation (the “Agent”) and the other financial institutions party thereto.

The First Lien Revolving Facility matures on October 31, 2013. Borrowings under the First Lien Revolving Facility incur interest expense that is variable in relation to the London Interbank Offer Rates (“LIBOR”) (and/or Prime) rate.  In addition to paying interest on outstanding borrowings under the First Lien Revolving Facility, we pay a 0.75% per annum commitment fee to the lenders in respect of the unutilized commitments, and letter of credit fees equal to the LIBOR margin on the undrawn amount of all outstanding letters of credit.  The other terms of this facility are generally the same as our First Lien Credit Agreement, as amended.

Capital Leases –

On August 17, 2012, we entered into an equipment financing arrangement with CapitalSource Bank.  The lease is a three-year lease for equipment cost up to $10.0 million.  As of June 30, 2013, there was $2.6 million outstanding under this lease arrangement, with monthly payments of $0.1 million and an implied interest rate of 7.09%.

During 2012, we entered into three other capitalized leases with commercial financial institutions. These leases are for terms of three to four years for equipment cost of $0.3 million with implied interest rates from 5.42% to 8.72%. As of June 30, 2013, there was approximately $0.2 million outstanding under these leases.

Non-Dollar Denominated Credit Facilities –

As of June 30, 2013, we had seven credit facilities with several of our international subsidiaries.

We have two credit facilities with German banks in the amount of EUR 6.0 million ($7.8 million). These revolving credit facilities bear interest at various market rates and are used primarily to guarantee the performance of European installation contracts and temporary working capital requirements. As of June 30, 2013, there were no balances outstanding under the lines of credit, EUR 2.1 million ($2.7 million) of bank guarantees and letters of credit outstanding, and EUR 3.9 million ($5.1 million) available under these credit facilities. In addition there was a EUR 0.2 million ($0.3 million) term loan with a German bank outstanding as of June 30, 2013, with a maturity date in March 2014.

We have three credit facilities with Egyptian banks in the amount of EGP 15.0 million ($2.1 million). These credit facilities bear interest at various market rates and are primarily for cash management purposes. There was EGP 7.8 million ($1.1 million) outstanding under these lines of credit, EGP 5.1 million ($0.7 million) of bank guarantees and letters of credit outstanding, and EGP 2.1 million ($0.3 million) available under these credit facilities as of June 30, 2013.

27

We have a BAHT 350.0 million ($11.3 million) Trade on Demand Financing (accounts receivable) facility with Thai Military Bank Public Company Limited (“TMB”).  This facility bears interest at LIBOR +1.75%, is unsecured and may be terminated at any time by either TMB or us. This facility permits us to borrow funds upon presentation of proper documentation of purchase orders or accounts receivable from our customers, in each case with a maximum term not to exceed 180 days. We maintain a bank account with TMB, assigns rights to the accounts receivable used for borrowings under this facility, and instructs these customers to remit payments to the bank account with TMB.  TMB may, in its sole discretion, deduct or withhold funds from our bank account for settlement of any amounts owed by us under this facility. There was approximately BAHT 350.0 million ($11.3 million) outstanding and with no amounts available under this facility as of June 30, 2013.

We had a BAHT 45.0 million ($1.4 million) revolving credit facility with Export-Import Bank of Thailand (“EXIM”), which had a termination date at the discretion of EXIM or us. During the three months ended June 30, 2013, we notified EXIM we were electing to terminate this credit facility and, accordingly, EXIM returned the cash deposit security of BAHT 15.0 million ($0.5 million) to us.

Cash Flow Analysis

A summary of operating, investing and financing activities is shown in the following table:

	Six Months Ended June 30,
	2013			2012
	(in thousands)
Net cash provided by (used in) operating activities – continuing operations	$	4,956		$	(34,803	)
Net cash used in investing activities – continuing operations		(20,508	)		(13,206	)
Net cash provided by financing activities – continuing operations		9,664			47,254
Effect of exchange rate changes on cash – continuing operations		760			560

Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities was $5.0 million for the six months ended June 30, 2013 compared to net cash used in operating activities of $34.8 million in the six months ended June 30, 2012. The $39.8 million increase was related primarily to a decrease in accounts receivable and a smaller increase in inventory.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by (used in) investing activities consists primarily of:

·   capital expenditures for growth;

·   capital expenditures for facility maintenance, including machinery and equipment improvements to extend the useful life of the assets; and

·   the acquisition of SynTec.

Net cash used in investing activities during the six months ended June 30, 2013 was $20.5 million compared to $13.2 million during the six months ended June 30, 2012. Capital expenditures during the six months ended June 30, 2013 were $10.9 million, which related to expansion in Asia Pacific and Middle East and construction of our new facility in China.  Net cash used in investing activities during the six months ended June 30, 2013 includes approximately $9.7 million related to the acquisition of SynTec LLC on February 4, 2013. See Item 1, note 3, “Acquisition of SynTec LLC,” to our unaudited condensed consolidated financial statements for information regarding this acquisition.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by (used in) financing activities consists primarily of borrowings and repayments related to our credit facilities and our IPO (in 2012).

Net cash provided by financing activities was $9.7 million during the six months ended June 30, 2013 compared to $47.3 million during the six months ended June 30, 2012. The decrease in net cash provided by financing activities during 2013 was due to the six months ended June 30, 2013 had net proceeds received from our debt of $9.7 million while the six months ended June 30, 2012 had the net proceeds from our IPO during February 2012 of $65.9 million, partially offset by the net repayment of $17.4 million on our debt.

Off-Balance Sheet Arrangements

As of June 30, 2013, we had no off-balance sheet arrangements.

28

Contingencies

We are involved in various legal and administrative proceedings and disputes that arise from time to time in the ordinary course of doing business. Some of these proceedings may result in fines, penalties or judgments being assessed against us, which, from time to time, may adversely affect our financial results. We have considered these proceedings and disputes in determining the necessity of any reserves for losses that are probable and reasonably estimable. Our recorded reserves are based on estimates developed with consideration given to the potential merits of claims or quantification of any performance obligations. In doing so, we take into account our history of claims, the limitations of any insurance coverage, advice from outside counsel, the possible range of outcomes to such claims and obligations and their associated financial impact (if known and reasonably estimable), and management’s strategy with regard to the settlement or defense of such claims and obligations. While the ultimate outcome of those claims, lawsuits or performance obligations cannot be predicted with certainty, we believe, based on our understanding of the facts of these claims and performance obligations, that adequate provisions have been recorded in the accounts where required. In addition, we believe it is not reasonably possible that resolution of these legal actions will, individually or in the aggregate, have a material adverse effect on our financial condition or results of operations. It is possible, however, that charges related to these matters could be significant to our results or cash flows in any single accounting period.

In addition, we provide our customers limited material product warranties. Our limited product warranties are typically five years but occasionally extend up to 20 years. These warranties are generally limited to repair or replacement of defective products or workmanship, often on a prorated basis, up to the dollar amount of the original order. In some foreign orders, we may be required to provide the customer with specified contractual limited warranties as to material quality. Our product warranty liability in many foreign countries is dictated by local laws in addition to the warranty specified in the orders. Failure of our products to operate properly or to meet specifications may increase our costs by requiring additional engineering resources, product replacement or monetary reimbursement to a customer. We have received warranty claims in the past, and we expect to continue to receive them in the future. Warranty claims are not covered by insurance, and substantial warranty claims in any period could have a material adverse effect on our financial condition, results of operations or cash flows as well as on our reputation.

Furthermore, in certain direct sales and raw material acquisition situations, we are required to post performance bonds or bank guarantees as part of the contractual guarantee for performance. The performance bonds or bank guarantees can be in the full amount of the orders. To date we have not received any claims against any of the posted securities, most of which terminate at the final completion date of the orders. As of June 30, 2013, we had $6.0 million of bonds outstanding and $5.9 million of guarantees and letters of credit issued under our bank lines.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies since December 31, 2012.

During the second quarter of 2013, we performed an interim assessment of goodwill related to its Europe Africa reporting unit, due to indications that the fair value of this reporting unit may be less than its carrying amount.  Such indications included weak economic conditions, under-achievement of previous financial projections, and projected continued difficulties in the European market.  Based on these indications, an interim impairment test was performed, which resulted in an impairment charge totaling $26.4 million being recorded.

Goodwill allocated to North America, Asia Pacific and Latin America was approximately $22.8 million, $5.2 million, and $4.5 million, respectively, as of June 30, 2013. As disclosed in our Form 10-K for the year ended December 31, 2012, the fair value of the reporting units exceeded the carrying value by approximately 5%, 124% and 112% for North America, Asia Pacific, and Latin America, respectively, as of October 1, 2012, the date of our last impairment analysis. A key assumption underlying our fair value calculations is the discounted cash flows for each of the reporting units.  Significant changes to the underlying assumptions used in our valuation approach, could lead to changes in the fair value and future impairments of goodwill.

Recently Issued Accounting Pronouncements

We qualify as an emerging growth company under Section 109 of the JOBS Act. An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period, and as a result, is compliant with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies. Section 108 of the JOBS Act provides that this decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

29

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information about market risks as of June 30, 2013 does not differ materially from the information disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC on March 28, 2013.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June30, 2013. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of June 30, 2013 our Interim Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Previously Identified Material Weakness

As previously discussed in Item 9A. “Controls and Procedures” of our 2012 Annual Report on Form 10-K, we reported the following material weakness with our internal control over financial reporting:

·   We did not maintain effective control over the calculation of our income tax provisions as we did not have adequate review procedures in place.

Remediation of Material Weakness

During the six months ended June 30, 2013, we implemented the following additional procedures to address the material weakness in our internal control over financial reporting and the ineffectiveness of our disclosure controls and procedures:

·   We hired an outside public accounting firm to review and assist with the proper accounting and disclosure related to income taxes.

·   We implemented a tax validation process to assist in the management of all tax data.

We are assessing the design and testing the operating effectiveness of the newly implemented controls over the accounting and financial reporting of income taxes as of June 30, 2013. 

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting  (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act)  during the three and six months ended June 30, 2013, respectively, except as described above, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of our business, we have been involved in various disputes and litigation. Although the outcome of any such disputes and litigation cannot be predicted with certainty, we do not believe that there are any pending or threatened actions, suits or proceedings against or affecting us which, if determined adversely to us, would, individually or in the aggregate, have a material adverse effect on our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

There have been no material changes in the status of our risk factors from those described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC on March 28, 2013.

ITEM 6. EXHIBITS

The information called for by this Item is incorporated herein by reference from the Exhibit Index following the signature pages of this Quarterly Report on Form 10-Q.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

Date:  August 9, 2013.

GSE HOLDING, INC.
By:	/s/ DANIEL C. STOREY
	Name:	Daniel C. Storey
	Title:	Vice President, Chief Accounting Officer and
		Corporate Controller
		(Principal Accounting Officer)

32

EXHIBIT INDEX

Exhibit Number	Description
3.1	Second Amended and Restated Certificate of Incorporation of GSE Holding, Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on February 15, 2012)
3.2	Amended and Restated Bylaws of GSE Holding, Inc. (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on February 15, 2012)
10.1*	Amendment No. 2 to Amended and Restated Stockholders Agreement, dated as of July 10, 2013
31.1*	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1**	Interactive Data Files pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012 and (iv) Notes to Unaudited Condensed Consolidated Financial Statements

_________________

* Filed herewith.

** Pursuant to Rule 406T of Regulation S-T, the eXtensible Business Reporting Language information contained in Exhibit 101.1 hereto is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

EX-10.1

Exhibit 10.1

AMENDMENT NO. 2 TO

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

THIS AMENDMENT NO. 2 (this “Amendment”) to the Amended and Restated Stockholders Agreement, dated as of February 15, 2012, as amended by that certain Amendment No. 1 on January 14, 2013 (the “Stockholders Agreement”), by and among GSE Holding, Inc., a Delaware corporation, Code Hennessy & Simmons IV LP, CHS Associates IV and the other stockholders named therein, is made and entered into as of this 10th day of July, 2013. Capitalized terms used herein and not defined shall have the meanings specified in the Stockholders Agreement.

WHEREAS, in accordance with Section 8 of the Stockholders Agreement, the parties hereto wish to amend the Stockholders Agreement as provided herein.

NOW, THEREFORE, in consideration of the terms and conditions contained in this Amendment and other good and valuable consideration, the mutual receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.  Removal of Stockholders.  Each of Mark C. Arnold, Michael G. Evans, Richard E. Goodrich, Robert C. Griffin and Charles A. Sorrentino is hereby released and removed as a party to the Stockholders Agreement and shall cease to be entitled to any rights, or be subject to any obligations, thereunder.

2.  No Other Amendments.  Except as expressly amended hereby, the provisions of the Stockholders Agreement are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Any reference in the Stockholders Agreement to “this Agreement,” “herein,” “hereof,” “hereunder” or words of similar import, and any other document, instrument or agreement that refers to the Stockholders Agreement, shall be deemed to refer to the Stockholders Agreement as amended by this Amendment. This Amendment shall be effective as of the date hereof.

3.  Governing Law.  This Amendment shall be governed and controlled as to validity, enforcement, interpretation, construction, effect and in all other respects by the internal laws of the State of Delaware applicable to contracts made in that State.

4.  WAIVER OF JURY TRIAL.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS COMPLAINT IN CONNECTION WITH ANY ACTION OR OTHER PROCEEDING BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY OR PARTIES HERETO WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH OR RELATED TO THIS AMENDMENT OR ANY PORTION THEREOF, WHETHER BASED UPON CONTRACTUAL, STATUTORY, TORTIOUS OR OTHER THEORIES OF LIABILITY. EACH PARTY REPRESENTS THAT IT HAS CONSULTED WITH COUNSEL REGARDING THE MEANING AND EFFECT OF THE FOREGOING WAIVER OF ITS RIGHT TO A JURY TRIAL.

5.  Counterparts.  This Amendment may be executed in any number of counterparts, and by facsimile, photo or other electronic means, each of which shall be effective only upon delivery and thereafter shall be deemed to be an original, and all of which shall be taken to be one and the same instrument with the same effect as if each of the parties hereto had signed the same signature page.

[Signature Pages Follow]

2

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first written above.

GSE HOLDING, INC.
By:	/s/ Charles A. Sorrentino
Name:	Charles A. Sorrentino
Title:	Interim President & Chief Executive Officer
CODE HENNESSY & SIMMONS IV LP
By:	CHS Management IV LP
Its:	General Partner
By:	CHS Capital LLC
Its:	General Partner
By:	/s/ Marcus J. George
Name:	Marcus J. George
Title:	Partner
CHS ASSOCIATES IV
By:	CHS Capital LLC
Its:	General Partner
By:	/s/ Marcus J. George
Name:	Marcus J. George
Title:	Partner
By:	/s/ Michael G. Evans
Name:	Michael G. Evans

[Signature Page to Amendment No. 2 to Amended and Restated Stockholders Agreement]

By:	/s/ Richard E. Goodrich
Name:	Richard E. Goodrich
By:	/s/ Robert C. Griffin
Name:	Robert C. Griffin
By:	/s/ Charles A. Sorrentino
Name:	Charles A. Sorrentino
By:	/s/ Mark C. Arnold
Name:	Mark C. Arnold

[Signature Page to Amendment No. 2 to Amended and Restated Stockholders Agreement]

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles A. Sorrentino, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of GSE Holding, Inc. for the quarter ended June 30, 2013;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 9, 2013

/s/ Charles A. Sorrentino

Name: Charles A. Sorrentino

Title: President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Michael Kirksey, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of GSE Holding, Inc. for the quarter ended June 30, 2013;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

a) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 9, 2013

/s/ J. Michael Kirksey

Name: J. Michael Kirksey

Title: Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles A. Sorrentino, President and Chief Executive Officer of GSE Holding, Inc. (the “Company”), hereby certify, on the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

1.   The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 9, 2013

/s/ Charles A. Sorrentino

Name: Charles A. Sorrentino

Title: President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Michael Kirksey, Executive Vice President and Chief Financial Officer of GSE Holding, Inc. (the “Company”), hereby certify, on the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

1.   The Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 9, 2013

/s/ J. Michael Kirksey

Name: J. Michael Kirksey

Title: Executive Vice President and Chief Financial Officer

XML

Note 12 - Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

12. Fair Value of Financial Instruments –

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, GAAP requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used are as follows:

Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables and debt instruments. The carrying values of cash and cash equivalents, trade receivables and trade payables are considered to be representative of their respective fair values due to the short-term nature of these instruments. The carrying amount of the long-term debt of $170.2 million as of June 30, 2013 approximates fair value because the Company’s current borrowing rate does not materially differ from market rates for similar bank borrowings. The long-term debt is classified as a Level 2 item within the fair value hierarchy.

The Company has assets and liabilities measured and recorded at fair value on a non-recurring basis.  These non-financial assets and liabilities include, property, plant and equipment, intangible assets and liabilities acquired in a business combination as well as impairment calculations, when necessary. The fair value of the assets acquired and liabilities assumed in connection with the SynTec acquisition, as discussed in Note 5, were measured at fair value by the Company at the acquisition date. The excess earnings method was used in determining the fair value of customer relationships included in identifiable intangible assets and the relief from royalty method was used in determining the fair value of the trade name / marks included in identifiable intangible assets. The fair value of the property, plant and equipment was determined based on an independent appraisal of a third party. The inputs used by management for the fair value measurements include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3. The goodwill impairment (see Note 4) was primarily based on observable inputs using company specific information and is classified as Level 3.

XML

Note 17 - Segment Information (Details) - Net Sales (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting, Revenue Reconciling Item [Line Items]
Net sales	$ 108,201	$ 139,168	$ 203,335	$ 234,085
Operating Segments [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Net sales	118,934	150,832	225,865	260,435
Intersegment Eliminations [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Net sales	$ (10,733)	$ (11,664)	$ (22,530)	$ (26,350)

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net sales	$ 108,201	$ 139,168	$ 203,335	$ 234,085
Cost of Products	94,992	114,958	176,869	195,485
Gross profit	13,209	24,210	26,466	38,600
Selling, general and administrative expenses	13,422	11,814	27,461	22,739
Non-recurring initial public offering related costs				9,655
Amortization of intangibles	395	297	754	598
Impairment of goodwill	26,423		26,423
Operating income (loss)	(27,031)	12,099	(28,172)	5,608
Other expenses (income):
Interest expense, net of interest income	3,686	3,890	7,449	9,637
Loss on extinguishment of debt		1,555		1,555
Other expense	643	860	982	418
Income (loss) from continuing operations before income taxes	(31,360)	5,794	(36,603)	(6,002)
Income tax provision (benefit)	2,533	2,078	(263)	2,727
Income (loss) from continuing operations	(33,893)	3,716	(36,340)	(8,729)
Income (loss) from discontinued operations, net of tax		80		(241)
Net income (loss).	(33,893)	3,796	(36,340)	(8,970)
Foreign currency translation adjustment	(232)	(1,844)	(1,734)	(708)
Comprehensive income (loss)	$ (34,125)	$ 1,952	$ (38,074)	$ (9,678)
Basic net income (loss) per common share:
Continuing operations (in Dollars per share)	$ (1.69)	$ 0.19	$ (1.82)	$ (0.51)
Discontinued operations (in Dollars per share)		$ 0.01		$ (0.01)
(in Dollars per share)	$ (1.69)	$ 0.20	$ (1.82)	$ (0.52)
Diluted net income (loss) per common share:
Continuing operations (in Dollars per share)	$ (1.69)	$ 0.18	$ (1.82)	$ (0.51)
Discontinued operations (in Dollars per share)		$ 0.01		$ (0.01)
(in Dollars per share)	$ (1.69)	$ 0.19	$ (1.82)	$ (0.52)
Basic weighted-average common shares outstanding (in Shares)	20,067	19,338	19,985	17,230
Diluted weighted-average common shares outstanding (in Shares)	20,067	20,399	19,985	17,230

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Note 5 - Acquisition of SynTec LLC

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

5.  Acquisition of SynTec LLC —

On February 4, 2013, the Company acquired SynTec LLC ("SynTec”), which is now a wholly-owned subsidiary of the Company. Pursuant to the Unit Purchase Agreement dated as of February 4, 2013, the Company acquired all of the outstanding shares of SynTec. The total amount of consideration paid in connection with the acquisition was approximately $9.7 million, and this acquisition was funded with existing cash on hand. The SynTec business is reflected in the North America reporting segment and was acquired by the Company in order to expand its existing market share with additional products, which are complementary to the Company’s existing products.

The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the acquisition date (in thousands). The Company incurred approximately $0.7 million of transaction expenses in connection with this acquisition, which are included as a component of selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Accounts receivable	$	2,079
Inventory		1,449
Other current assets		26
Property, plant and equipment		1,335
Identifiable intangible assets		5,121
Goodwill		2,416
Accounts payable and accrued liabilities		(2,769	)
Net assets acquired	$	9,657

The prior purchase price allocation was revised during the three months ended June 30, 2013 in connection with the final working capital settlement of approximately $0.6 million and final appraisal of the machinery and equipment, resulting in a $0.6 million increase in the estimated fair value of the machinery and equipment, and a decrease in the estimated fair values of goodwill ($0.5 million), identifiable intangible assets ($0.5 million) and working capital ($0.2 million). The results of operations for the three months ended March 31, 2013 were not restated as the effect of the revised purchase price allocation was immaterial. As a result of this acquisition, the Company recognized a total of $5.1 million of identifiable intangible assets and $2.4 million of goodwill. The total amount of goodwill is deductible for tax purposes. The results of operations of SynTec are reported in the Company’s condensed consolidated financial statements from the date of the acquisition. SynTec net sales for the three and six months ended June 30, 2013 were approximately $3.4 million and $5.1 million, respectively, and Syntec’s net loss was not material. Pro forma information for the three and six months ended June 30, 2013 and 2012 is not presented as the acquisition was not a material acquisition.

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Note 5 - Acquisition of SynTec LLC (Tables)

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Accounts receivable	$	2,079
Inventory		1,449
Other current assets		26
Property, plant and equipment		1,335
Identifiable intangible assets		5,121
Goodwill		2,416
Accounts payable and accrued liabilities		(2,769	)
Net assets acquired	$	9,657

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Note 13 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

13. Stock-Based Compensation –

As of June 30, 2013 there were approximately 1.2 million stock options outstanding with an exercise price range of $0.67 to $11.57 and a weighted average exercise price of $4.92. There were 74,750 and 94,750 options granted during the three and six months ended June 30, 2013, respectively. There were 116,935 and 191,872 shares of restricted stock granted with a three year vesting period during the three and six months ended June 30, 2013, respectively. During the three months ended June 30, 2012, 200,650 stock options were granted. Also during the three months ended June 30, 2012, 57,300 shares of restricted stock were granted with a three year vesting period.

There was $0. 3 million and $0.1 million of stock-based compensation expense related to stock options and restricted stock for the three and six months ended June 30, 2013, respectively, and less than $0.1 million of stock-based compensation expense for the three months ended June 30, 2012.  For the six months ended June 30, 2012, stock-based compensation expense of $4.3 million was recognized related to 478,467 shares of fully vested common stock that was issued to certain key executives and directors in connection with the IPO.

All outstanding stock options are held by employees and former employees of the Company and have an expiration date of 10 years from the date of grant. At June 30, 2013, the average remaining contractual life of options outstanding and exercisable was 3.3 years.

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Note 14 - Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit) (in Dollars)	$ 2,533	$ 2,078	$ (263)	$ 2,727
Effective Income Tax Rate Reconciliation, Percent	8.10%	35.90%	0.70%	45.40%

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Note 7 - Inventory (Details) - Inventory (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventory [Abstract]
Raw materials	$ 31,608	$ 31,563
Finished goods	40,062	30,849
Supplies	4,749	4,424
Obsolescence and slow moving allowance	(3,037)	(2,438)
	$ 73,382	$ 64,398

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Note 9 - Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Estimated useful lives years			June 30, 2013			December 31, 2012
				(in thousands)
Customer lists	5	-	20	$	29,300		$	25,449
Trademarks			5		1,082			—
Non-compete agreements	1	-	10		2,556			2,469
Other			1		363			363
					33,301			28,281
Less accumulated amortization					(27,392	)		(26,732	)
Intangible assets, net				$	5,909		$	1,549

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Note 8 - Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	Estimated useful lives years			June 30, 2013			December 31, 2012
				(in thousands)
Land				$	6,438		$	4,832
Buildings and improvements	7	-	30		32,534			29,515
Machinery and equipment	3	-	10		122,741			117,852
Software			3		8,754			8,400
Furniture and fixtures	3	-	5		816			785
					171,283			161,384
Less – accumulated depreciation and amortization					(96,665	)		(91,212	)
				$	74,618		$	70,172

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Note 12 - Fair Value of Financial Instruments (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Fair Value Disclosures [Abstract]
Long-term Debt, Fair Value	$ 170.2

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Note 4 - Goodwill (Details) - Goodwill (USD $) In Thousands, unless otherwise specified	2 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended
	Jun. 01, 2013	Jun. 30, 2013	Mar. 31, 2013	Jun. 30, 2013	Feb. 04, 2013	Jun. 30, 2013 North America [Member]	Mar. 31, 2013 North America [Member]	Jun. 30, 2013 Europe Africa [Member]	Dec. 31, 2012 Europe Africa [Member]	Jun. 30, 2013 Asia Pacific [Member]	Mar. 31, 2013 Asia Pacific [Member]	Dec. 31, 2012 Asia Pacific [Member]	Jun. 30, 2013 Latin America [Member]	Mar. 31, 2013 Latin America [Member]	Dec. 31, 2012 Latin America [Member]
Goodwill [Line Items]
Balance	$ 61,817	$ 61,817	$ 58,895	$ 58,895	$ 2,416	$ 25,750	$ 22,828	$ 26,423	$ 26,423	$ 5,205	$ 5,205	$ 5,205	$ 4,439	$ 4,439	$ 4,439
Impairment Charge	(26,400)	(26,423)		(26,423)				(26,423)
SynTec LLC Purchase Price Adjustment		(506)				(506)
Acquisition of SynTec LLC			2,922				2,922
Balance		$ 34,888	$ 61,817	$ 34,888	$ 2,416	$ 25,244	$ 25,750		$ 26,423	$ 5,205	$ 5,205	$ 5,205	$ 4,439	$ 4,439	$ 4,439

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Note 8 - Property, Plant and Equipment (Details) - Property, plant and equipment (USD $) In Thousands, unless otherwise specified							6 Months Ended				6 Months Ended				6 Months Ended			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Land [Member]	Dec. 31, 2012 Land [Member]	Jun. 30, 2013 Building and Building Improvements [Member]	Dec. 31, 2012 Building and Building Improvements [Member]	Jun. 30, 2013 Building and Building Improvements [Member] Minimum [Member]	Jun. 30, 2013 Building and Building Improvements [Member] Maximum [Member]	Jun. 30, 2013 Machinery and Equipment [Member]	Dec. 31, 2012 Machinery and Equipment [Member]	Jun. 30, 2013 Machinery and Equipment [Member] Minimum [Member]	Jun. 30, 2013 Machinery and Equipment [Member] Maximum [Member]	Jun. 30, 2013 Computer Software, Intangible Asset [Member]	Dec. 31, 2012 Computer Software, Intangible Asset [Member]	Jun. 30, 2013 Computer Software, Intangible Asset [Member] Maximum [Member]	Jun. 30, 2013 Furniture and Fixtures [Member]	Dec. 31, 2012 Furniture and Fixtures [Member]	Jun. 30, 2013 Furniture and Fixtures [Member] Minimum [Member]	Jun. 30, 2013 Furniture and Fixtures [Member] Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives years							7	30			3	10			3			3	5
Balance, gross	$ 171,283	$ 161,384	$ 6,438	$ 4,832	$ 32,534	$ 29,515			$ 122,741	$ 117,852			$ 8,754	$ 8,400		$ 816	$ 785
Less – accumulated depreciation and amortization	(96,665)	(91,212)
	$ 74,618	$ 70,172

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Note 15 - Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Limited Warranty Term	20 years
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 6.0
Performance Bonds Outstanding	$ 5.9

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Note 17 - Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three months ended June 30, 2013
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	46,275		$	28,832		$	22,002		$	7,278		$	3,814		$	108,201
Intersegment sales		7,660			73			2,454			—			546			10,733
Total segment net sales		53,935			28,905			24,456			7,278			4,360			118,934
Gross profit		8,299			919			2,933			692			366			13,209
Gross margin		17.9	%		3.2	%		13.3	%		9.5	%		13.3	%		12.2	%

	Three months ended June 30, 2012
	N. America			Europe Africa			Asia Pacific			Latin America				Middle East			Total
	(in thousands)
Net sales to external customers	$	60,106		$	41,167		$	24,074			$	11,197		$	2,624		$	139,168
Intersegment sales		8,192			—			2,310				—			1,162			11,664
Total segment net sales		68,298			41,167			26,384				11,197			3,786			150,832
Gross profit		12,831			5,338			3,853				1,839			349			24,210
Gross margin		21.3	%		13.0	%		16.0	%			16.4	%		13.3	%		17.4	%

	Six months ended June 30, 2013
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	87,649		$	51,185		$	38,589		$	18,983		$	6,929		$	203,335
Intersegment sales		14,609			97			6,241			—			1,583			22,530
Total segment net sales		102,258			51,282			44,830			18,983			8,512			225,865
Gross profit		17,245			1,076			5,132			2,203			810			26,466
Gross margin		19.7	%		2.1	%		13.3	%		11.6	%		11.7	%		13.0	%

	Six months ended June 30, 2012
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	96,332		$	67,018		$	42,644		$	23,673		$	4,418		$	234,085
Intersegment sales		18,572			—			5,452			—			2,326			26,350
Total segment net sales		114,904			67,018			48,096			23,673			6,744			260,435
Gross profit		22,062			6,299			7,173			2,598			468			38,600
Gross margin		22.9	%		9.4	%		16.8	%		11.0	%		10.6	%		16.5	%

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Reconciliation to Consolidated Sales
	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
	(in thousands)
Total segment net sales	$	118,934		$	150,832		$	225,865		$	260,435
Intersegment sales		(10,733	)		(11,664	)		(22,530	)		(26,350	)
Consolidated net sales	$	108,201		$	139,168		$	203,335		$	234,085

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	N. America		Europe Africa		Asia Pacific		Latin America		Middle East		Total
December 31, 2012	$	229,272	$	62,154	$	66,283	$	38,774	$	16,715	$	413,188
June 30, 2013	$	196,207	$	56,905	$	66,374	$	30,185	$	18,602	$	368.273

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	Reconciliation to Consolidated Assets
	June 30, 2013			December 31, 2012
Total segment assets	$	368,273		$	413,188
Intersegment balances		(61,187	)		(77,090	)
Consolidated assets	$	307,086		$	336,098

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Note 10 - Accrued Liabilities and Other (Details) - Accrued liabilities and other (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Accrued liabilities and other [Abstract]
Customer prepayments	$ 446	$ 759
Accrued operating expenses	4,476	5,951
Self-insurance reserves	1,598	1,758
Compensation and benefits	2,832	6,786
Accrued interest	2,735	2,522
Taxes, other than income	1,433	2,023
Income taxes payable	483	1,691
Deferred income taxes	739	1,156
Other accrued liabilities	1,607	399
	$ 16,349	$ 23,045

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Note 7 - Inventory (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	June 30, 2013			December 31, 2012
	(in thousands)
Raw materials	$	31,608		$	31,563
Finished goods		40,062			30,849
Supplies		4,749			4,424
Obsolescence and slow moving allowance		(3,037	)		(2,438	)
	$	73,382		$	64,398

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Note 1 - Nature of Business

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Nature of Operations [Text Block]

1. Nature of Business

Organization and Description of Business —

GSE Holding, Inc., together with its subsidiaries, (the “Company”) is a leading global manufacturer and marketer of highly engineered geosynthetic lining products for environmental protection and confinement applications. These lining products are used in a wide range of infrastructure end markets such as mining, environmental containment, liquid containment (including water infrastructure, agriculture and aquaculture and industrial wastewater treatment applications), coal ash containment and oil and gas. The Company offers a full range of products, including geomembranes, drainage products, geosynthetic clay liners, nonwoven geotextiles, and other specialty products. The Company generates the majority of its sales outside of the United States, including emerging markets in Asia, Latin America, Africa and the Middle East. Its comprehensive product offering and global infrastructure, along with its extensive relationships with customers and end-users, provide it with access to high-growth markets worldwide, visibility into upcoming projects and the flexibility to serve customers regardless of geographic location. The Company manufactures its products at facilities located in the United States, Germany, Thailand, Chile and Egypt.

Effective February 10, 2012, the Company completed its initial public offering (“IPO”) of 7,000,000 shares of common stock.  The Company also granted the underwriters a 30-day option to purchase up to an additional 1,050,000 shares at the IPO price to cover over-allotments, which was exercised. The IPO price was $9.00 per share and the common stock is currently listed on The New York Stock Exchange under the symbol “GSE”.  The Company received proceeds from the IPO, after deducting underwriter’s fees, of approximately $67.4 million.  The Company incurred direct and incremental costs associated with the IPO of approximately $3.8 million. The proceeds from the IPO were used to pay down debt ($51.5 million) and for general working capital purposes.  The Company also incurred and expensed compensation costs of $6.6 million related to IPO bonuses that were paid in cash ($2.3 million) and the issuance of fully vested common stock ($4.3 million) to certain key executives and directors, and $3.0 million related to a management agreement termination fee, which became payable upon the closing of the IPO.

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Note 3 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

3.  Recent Accounting Pronouncements —

The Company qualifies as an emerging growth company under Section 109 of the JOBS Act. An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has chosen to “opt out” of such extended transition period, and as a result, is compliant with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies. Section 108 of the JOBS Act provides that this decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

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Note 6 - Net Income (Loss) per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

6. Net Income (Loss) per Share

The Company computes basic net income (loss) per share by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued. The dilutive effect of employee stock options is reflected in diluted net loss per share by applying the treasury stock method.

The Company recorded a net loss for the three months ended June 30, 2013 and the six months ended June 30, 2013 and 2012, respectively. Potential common shares are anti-dilutive in periods which the Company records a net loss because they would reduce the respective period’s net loss per share. Anti-dilutive potential common shares are excluded from the calculation of diluted earnings per share. As a result, net diluted loss per share was equal to basic net loss per share in the three months ended June 30, 2013 and the six months ended June 30, 2013 and 2012, respectively. There were approximately 1.2 million and 1.9 million stock options outstanding at June 30, 2013 and 2012, respectively.  Of these, 0.5 million and 1.1 million for June 30, 2013 and 2012, respectively, had exercise prices lower than the average price of Company common shares as of each of those dates. These in-the-money options would have been included in the calculation of diluted earnings per share had the Company not reported a net loss in each of the respective periods. The Company recorded net income during the three months ended June 30, 2012, and included 1.1 million shares related to in-the money options in the diluted weighted-average common shares outstanding for the calculation of diluted net income per share.

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Note 4 - Goodwill

6 Months Ended

Jun. 30, 2013

Disclosure Text Block Supplement [Abstract]

Asset Impairment Charges [Text Block]

4.  Goodwill —

In accordance with ASC 350, Intangibles - Goodwill and Other  (“ASC 350”), the Company assesses goodwill and intangible assets with indefinite lives for impairment at the reporting unit level on an annual basis and between annual tests if impairment indicators occur or circumstances change that would more likely than not reduce the fair value below its carrying amount.  The Company’s annual assessment date is October 1.

During the second quarter of 2013, the Company performed an interim assessment of goodwill related to its Europe Africa reporting unit, due to indications that the fair value of this reporting unit may be less than its carrying amount.  Such indications included a continued weakening of economic conditions, under-achievement of previous financial projections and projected continued difficulties in the European market. Based on these indications, an interim impairment test was performed, which resulted in an impairment charge totaling $26.4 million was recorded.

In performing the interim goodwill impairment test, the Company considered three generally accepted approaches for valuing a business: the income, market and cost approaches. Based on the nature of the business, and the current and expected financial performance, it was determined that the market and income approaches were the most appropriate methods for estimating the fair value of the reporting unit. For the income approach the discounted cash flow method was utilized, and considered such factors as sales, depreciation, amortization, capital expenditures, incremental working capital requirements, tax rate and discount rate. Consideration of these factors inherently involves a significant amount of judgment, and significant movements in sales or changes in the underlying assumptions may result in fluctuations of estimated fair value.  For the market approach both the guidelines public company and the comparable transaction methods were used.   The Company considered such factors as appropriate guideline companies, appropriate comparable transactions and control premiums. In determining the fair value of the reporting unit, it was determined that the income approach provided a better indication of value than the market approach. As such, a 65% weighting was assigned to the income approach and a 35% weighting was assigned to the market approach in estimating the value of the reporting unit.

The table below reflects the changes in goodwill by reporting unit during the six months ended June 30, 2013 (in thousands):

	North America			Europe Africa			Asia Pacific		Latin America		Total
Balance at December 31, 2012	$	22,828		$	26,423		$	5,205	$	4,439	$	58,895
Acquisition of SynTec LLC		2,922			—			—		—		2,922
Balance at March 31, 2013		25,750			26,423			5,205		4,439		61,817
Impairment Charge		—			(26,423	)		—		—		(26,423	)
SynTec LLC Purchase Price Adjustment		(506	)		—			—		—		(506	)
Balance at June 30, 2013	$	25,244		$	—		$	5,205	$	4,439	$	34,888

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Note 9 - Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Disclosure Text Block [Abstract]
Amortization of Intangible Assets	$ 395	$ 297	$ 754	$ 598

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Note 10 - Accrued Liabilities and Other (Tables)

6 Months Ended

Jun. 30, 2013

Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

	June 30, 2013		December 31, 2012
	(in thousands)
Customer prepayments	$	446	$	759
Accrued operating expenses		4,476		5,951
Self-insurance reserves		1,598		1,758
Compensation and benefits		2,832		6,786
Accrued interest		2,735		2,522
Taxes, other than income		1,433		2,023
Income taxes payable		483		1,691
Deferred income taxes		739		1,156
Other accrued liabilities		1,607		399
	$	16,349	$	23,045

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Note 1 - Nature of Business (Details) (USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2012	Jun. 30, 2012
Note 1 - Nature of Business (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)	7,000,000
IPO Additional Shares, Period	30 days
IPO Additional Shares Available (in Shares)	1,050,000
IPO Price Per Share (in Dollars per share)	$ 9.00
Proceeds from Issuance Initial Public Offering		$ 65,927,000
Payments of Stock Issuance Costs	3,800,000
Extinguishment of Debt, Amount	51,500,000
Salaries, Wages and Officers' Compensation	6,600,000
IPO Management Agreement Termination Fee	3,000,000	3,000,000
Net of Underwriting Fees [Member]
Note 1 - Nature of Business (Details) [Line Items]
Proceeds from Issuance Initial Public Offering	67,400,000
Paid In Cash [Member]
Note 1 - Nature of Business (Details) [Line Items]
Salaries, Wages and Officers' Compensation	2,300,000
Paid In Fully Vested Common Stock [Member]
Note 1 - Nature of Business (Details) [Line Items]
Salaries, Wages and Officers' Compensation	$ 4,300,000

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Note 6 - Net Income (Loss) per Share (Details) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2013
Note 6 - Net Income (Loss) per Share (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1.9	1.2
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1.1
Exercise Price Lower Than Average Share Price [Member]
Note 6 - Net Income (Loss) per Share (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1.1	0.5

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Note 17 - Segment Information (Details) - Reconciliation to Consolidated Assets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 307,086	$ 336,098
Operating Segments [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	368,273	413,188
Intersegment Eliminations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ (61,187)	$ (77,090)

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Note 15 - Commitments and Contingencies (Details) - Warranty Obligations (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Note 15 - Commitments and Contingencies (Details) - Warranty Obligations [Line Items]
Balance at January 1,	$ 1,175	$ 2,225
Provision / changes in estimates	(15)	9
Payments		(35)
Three Months Ended [Member]
Note 15 - Commitments and Contingencies (Details) - Warranty Obligations [Line Items]
Balance	1,160	2,199
Provision / changes in estimates	(178)	(739)
Payments		(42)
Six Months Ended [Member]
Note 15 - Commitments and Contingencies (Details) - Warranty Obligations [Line Items]
Balance	$ 982	$ 1,418

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Note 11 - Long-Term Debt (Details) - Long-term debt (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Long-term debt	$ 170,178	$ 171,970
Less – current maturities	(3,112)	(3,147)
Unamortized discount on first lien credit facility	(1,339)	(1,541)
	165,727	167,282
First Lien Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt	167,162	168,177
Capital Lease - CapitalSource Bank [Member]
Debt Instrument [Line Items]
Long-term debt	2,582	3,156
Other Capital Leases [Member]
Debt Instrument [Line Items]
Long-term debt	189	230
Term Loan - German Bank [Member]
Debt Instrument [Line Items]
Long-term debt	$ 245	$ 407

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Trade, allowance for doubtful accounts (in Dollars)	$ 1,946	$ 869
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	20,379,350	19,846,684
Common stock, shares outstanding	20,379,350	19,846,684

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Note 9 - Intangible Assets

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

9. Intangible Assets –

Intangible assets consisted of the following:

	Estimated useful lives years			June 30, 2013			December 31, 2012
				(in thousands)
Customer lists	5	-	20	$	29,300		$	25,449
Trademarks			5		1,082			—
Non-compete agreements	1	-	10		2,556			2,469
Other			1		363			363
					33,301			28,281
Less accumulated amortization					(27,392	)		(26,732	)
Intangible assets, net				$	5,909		$	1,549

Amortization expense for intangible assets during the three months ended June 30, 2013 and 2012 was $0.4 million and $0.3 million, respectively.  Amortization expense for intangible assets during the six months ended June 30, 2013 and 2012 was $0.8 million and $0.6 million, respectively.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net loss	$ (36,340)	$ (8,970)
Loss from discontinued operations		241
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Impairment of goodwill	26,423
Depreciation and amortization	8,746	9,315
Loss on extinguishment of debt		1,555
Stock-based compensation	433	4,341
Changes in operating assets and liabilities, net of effect of acquisitions:
Decrease (increase) in accounts receivable	15,591	(21,191)
Increase in inventory	(9,081)	(14,282)
Increase in accounts payable	4,022	3,606
All other items, net	(4,838)	(9,418)
Net cash provided by (used in) operating activities – continuing operations	4,956	(34,803)
Net cash used in operating activities – discontinued operations		(143)
Net cash provided by (used in) operating activities	4,956	(34,946)
Cash flows from investing activities:
Purchase of property, plant and equipment	(10,851)	(13,206)
Acquisition of business, net of cash acquired	(9,657)
Net cash used in investing activities	(20,508)	(13,206)
Cash flows from financing activities:
Proceeds from lines of credit	61,986	53,673
Repayments of lines of credit	(51,129)	(51,013)
Proceeds from long-term debt		22,000
Repayments of long-term debt	(1,164)	(42,073)
Net proceeds from the exercise of stock options	235
Payments for debt issuance costs	(264)	(1,260)
Net proceeds from initial public offering		65,927
Net cash provided by financing activities – continuing operations	9,664	47,254
Effect of exchange rate changes on cash – continuing operations	760	560
Effect of exchange rate changes on cash – discontinued operations		26
Net decrease in cash and cash equivalents	(5,128)	(312)
Cash and cash equivalents at beginning of period	18,068	9,076
Cash and cash equivalents at end of period	$ 12,940	$ 8,764

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 12,940	$ 18,068
Accounts receivable:
Trade, net of allowance for doubtful accounts of $1,946 and $869, respectively	82,952	96,987
Other	3,344	3,626
Inventory, net	73,382	64,398
Deferred income taxes	1,299	1,111
Prepaid expenses and other	5,209	6,681
Income taxes receivable	1,739	1,538
Total current assets	180,865	192,409
Property, plant and equipment, net	74,618	70,172
Goodwill	34,888	58,895
Other assets	16,715	14,622
TOTAL ASSETS	307,086	336,098
Current liabilities:
Accounts payable	43,046	36,632
Accrued liabilities and other	16,349	23,045
Short-term debt	12,344	985
Current portion of long-term debt	3,112	3,147
Total current liabilities	74,851	63,809
Other liabilities	1,195	1,211
Deferred income taxes		1,078
Long-term debt, net of current portion	165,727	167,282
Total liabilities	241,773	233,380
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $.01 par value, 150,000,000 shares authorized, 20,379,350 and 19,846,684 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	204	198
Additional paid-in capital	131,280	130,617
Accumulated deficit	(64,712)	(28,372)
Accumulated other comprehensive income (loss)	(1,459)	275
Total stockholders’ equity	65,313	102,718
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 307,086	$ 336,098

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Note 16 - Related Party Transaction (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2012	Jun. 30, 2013
Related Party Transactions [Abstract]
Related Party Transaction, Amounts of Transaction	$ 2,000,000
Related Party Transaction, Expenses from Transactions with Related Party			200,000
IPO Management Agreement Termination Fee		3,000,000	3,000,000
Due to Related Parties				$ 0

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Note 11 - Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

	June 30, 2013			December 31, 2012
	(in thousands)
First Lien Credit Facility	$	167,162		$	168,177
Capital Lease – Capital Source Bank		2,582			3,156
Other Capital Leases		189			230
Term Loan – German bank secured by equipment, 5.15%, maturing March 2014		245			407
		170,178			171,970
Less – current maturities		(3,112	)		(3,147	)
Unamortized discount on first lien credit facility		(1,339	)		(1,541	)
	$	165,727		$	167,282

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Note 4 - Goodwill (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Text Block Supplement [Abstract]

Schedule of Goodwill [Table Text Block]

	North America			Europe Africa			Asia Pacific		Latin America		Total
Balance at December 31, 2012	$	22,828		$	26,423		$	5,205	$	4,439	$	58,895
Acquisition of SynTec LLC		2,922			—			—		—		2,922
Balance at March 31, 2013		25,750			26,423			5,205		4,439		61,817
Impairment Charge		—			(26,423	)		—		—		(26,423	)
SynTec LLC Purchase Price Adjustment		(506	)		—			—		—		(506	)
Balance at June 30, 2013	$	25,244		$	—		$	5,205	$	4,439	$	34,888

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Note 11 - Long-Term Debt (Details) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended		12 Months Ended							3 Months Ended	12 Months Ended									3 Months Ended			3 Months Ended			1 Months Ended		1 Months Ended	3 Months Ended									3 Months Ended				12 Months Ended
	Oct. 31, 2013	Jun. 30, 2013 USD ($)	Jun. 30, 2013 THB	Jun. 30, 2013 USD ($)	Dec. 31, 2012	Apr. 18, 2012 USD ($)	Apr. 18, 2012 Amended Term Loan Commitment [Member] First Lien Credit Facility [Member] Term Loan Commitments [Member] USD ($)	Jun. 30, 2013 Sixth Amendment [Member] Applied Towards First Lien Credit Facility [Member] Expected Unsecured Mezzanine Debt [Member] USD ($)	Jun. 30, 2013 Sixth Amendment [Member] Letters of Credit [Member] USD ($)	Jun. 30, 2013 Sixth Amendment [Member] Expected Unsecured Mezzanine Debt [Member] USD ($)	Jun. 30, 2013 Sixth Amendment [Member] USD ($)	Mar. 31, 2014 Sixth Amendment [Member]	Sep. 30, 2013 Sixth Amendment [Member]	Dec. 31, 2012 Sixth Amendment [Member]	Jun. 30, 2013 LIBOR [Member] Thai Military Bank Public Company Limited [Member] Non-Dollar Denominated Credit Facilities [Member] USD ($)	Jun. 30, 2013 First Lien Credit Facility [Member] Term Loan Commitments [Member] USD ($)	Apr. 17, 2012 First Lien Credit Facility [Member] Term Loan Commitments [Member] USD ($)	May 27, 2011 First Lien Credit Facility [Member] Term Loan Commitments [Member] USD ($)	Jun. 30, 2013 First Lien Credit Facility [Member] Revolving Loan Commitments [Member] USD ($)	May 27, 2011 First Lien Credit Facility [Member] Revolving Loan Commitments [Member] USD ($)	Mar. 31, 2013 First Lien Credit Facility [Member]	Jun. 30, 2013 First Lien Credit Facility [Member] USD ($)	May 27, 2011 First Lien Credit Facility [Member] USD ($)	Jun. 30, 2013 First Lien Revolving Facility [Member]	Aug. 08, 2013 First Lien Revolving Facility [Member] USD ($)	May 27, 2011 Second Lien Term Loan [Member] Term Loan Commitments [Member] USD ($)	May 31, 2011 Second Lien Term Loan [Member]	May 27, 2011 Second Lien Term Loan [Member] USD ($)	Aug. 31, 2012 Capital Lease - CapitalSource Bank [Member] USD ($)	Jun. 30, 2013 Capital Lease - CapitalSource Bank [Member] USD ($)	Jun. 30, 2013 Other Capital Leases [Member] USD ($)	Dec. 31, 2012 Other Capital Leases [Member] USD ($)	Jun. 30, 2013 German Bank [Member] Non-Dollar Denominated Credit Facilities [Member] USD ($)	Jun. 30, 2013 German Bank [Member] Non-Dollar Denominated Credit Facilities [Member] EUR (€)	Jun. 30, 2013 German Bank 2 [Member] Non-Dollar Denominated Credit Facilities [Member] USD ($)	Jun. 30, 2013 German Bank 2 [Member] Non-Dollar Denominated Credit Facilities [Member] EUR (€)	Jun. 30, 2013 Egyptian Banks [Member] Non-Dollar Denominated Credit Facilities [Member] USD ($)	Jun. 30, 2013 Egyptian Banks [Member] Non-Dollar Denominated Credit Facilities [Member] EGP	Jun. 30, 2013 Thai Military Bank Public Company Limited [Member] Non-Dollar Denominated Credit Facilities [Member] USD ($)	Jun. 30, 2013 Thai Military Bank Public Company Limited [Member] Non-Dollar Denominated Credit Facilities [Member] THB	Jun. 30, 2013 Export-Import Bank of Thailand [Member] Non-Dollar Denominated Credit Facilities [Member] USD ($)	Jun. 30, 2013 Export-Import Bank of Thailand [Member] Non-Dollar Denominated Credit Facilities [Member] THB	Dec. 31, 2012 Minimum [Member] Capital Lease - Commercial Financial Institutions [Member]	Dec. 31, 2012 Minimum [Member] Other Capital Leases [Member]	Dec. 31, 2012 Maximum [Member] Other Capital Leases [Member]
Note 11 - Long-Term Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity						$ 192.0	$ 157.0		$ 3.0		$ 21.5				$ 11.3		$ 135.0	$ 135.0		$ 35.0			$ 170.0		$ 8.0	$ 40.0		$ 40.0	$ 10.0			$ 0.3	$ 7.8	€ 6.0			$ 2.1	15.0		350.0	$ 1.4	45.0
Line of Credit Facility, Covenant Terms																					Restrictive Covenants. The First Lien Credit Facility contains various restrictive covenants that include, among other things, restrictions or limitations on the Company's ability to incur additional indebtedness or issue disqualified capital stock unless certain financial tests are satisfied; pay dividends, redeem subordinated debt or make other restricted payments; make certain loans, investments or acquisitions; issue stock of subsidiaries; grant or permit certain liens on assets; enter into certain transactions with affiliates; merge, consolidate or transfer substantially all of its assets; incur dividend or other payment restrictions affecting certain subsidiaries; transfer or sell assets including, but not limited to, capital stock of subsidiaries; and change the business the Company conducts. For the twelve months ended June 30, 2013 and December 31, 2012, the Company was subject to a Total Leverage Ratio (which is based on a trailing twelve months calculation) not to exceed 5.25 and 5.50:1.00, respectively, and an Interest Coverage Ratio of not less than 2.25:1.00 and 2.15:1.00, respectively.
Total Leverage Ratio	5.00			5.25	5.50							5.17	6.50	6.25
Interest Coverage Ratio				2.25	2.15
Loan Margin											200.00%
Line of Credit Facility, Remaining Borrowing Capacity		8.0		8.0																		19.5											5.1	3.9			1.1	7.8
Debt Instrument, Face Amount								20.0		30.0
Increase in Loan Margin		50.00%	50.00%
Line of Credit Facility, Commitment Fee Percentage		0.75%	0.75%																					0.75%
Line of Credit Facility, Amount Outstanding																154.2			13.0			167.2								2.6	0.2				0.3	0.2			11.3	350.0
Line of Credit Facility, Interest Rate at Period End																						7.18%								7.09%
Line Of Credit Facility Term Length																											5 years 6 months		3 years										180 days	180 days			4 years
Debt Instrument, Periodic Payment																														0.1
Line of Credit Facility, Interest Rate During Period																																												5.42%	8.72%
Credit Facilities, Bank Guarantees Outstanding (in Euro)																																	2.7	2.1			0.7	5.1
Credit Facilities, Bank Guarantees Outstanding																																	2.7	2.1			0.7	5.1
Letters of Credit Outstanding, Amount (in Pounds)																																					0.3	2.1
Letters of Credit Outstanding, Amount																																					0.3	2.1
Debt Instrument, Basis Spread on Variable Rate																																							1.75%	1.75%
Increase (Decrease) in Security Deposits (in Baht)		(0.5)	(15.0)
Increase (Decrease) in Security Deposits		$ (0.5)	(15.0)

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Note 17 - Segment Information (Details) - Assets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	$ 307,086	$ 336,098
Operating Segments [Member] | North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	196,207	229,272
Operating Segments [Member] | Europe Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	56,905	62,154
Operating Segments [Member] | Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	66,374	66,283
Operating Segments [Member] | Latin America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	30,185	38,774
Operating Segments [Member] | Middle East [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	18,602	16,715
Operating Segments [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	$ 368,273	$ 413,188

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Note 8 - Property, Plant and Equipment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Note 8 - Property, Plant and Equipment (Details) [Line Items]
Depreciation, Depletion and Amortization			$ 8,746	$ 9,315
Property, Plant and Equipment [Member]
Note 8 - Property, Plant and Equipment (Details) [Line Items]
Depreciation, Depletion and Amortization	$ 3,500	$ 3,200	$ 6,800	$ 6,500

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Note 5 - Acquisition of SynTec LLC (Details) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended
	Feb. 04, 2013	Jun. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Note 5 - Acquisition of SynTec LLC (Details) [Line Items]
Business Combination, Acquisition Related Costs	$ 700,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	1,335,000
Goodwill	2,416,000	34,888,000	34,888,000	61,817,000	58,895,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets	5,121,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual		3,400,000	5,100,000
SynTec, LLC [Member]
Note 5 - Acquisition of SynTec LLC (Details) [Line Items]
Business Combination, Consideration Transferred	9,700,000
Purchase Price Allocation Adjustments [Member]
Note 5 - Acquisition of SynTec LLC (Details) [Line Items]
Business Combination Recognized Identifiable Assets Acquired And Liabilities AssumedWorking Capital Settlement		600,000	600,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		600,000	600,000
Goodwill		500,000	500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill		500,000	500,000
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Working Capital		$ 200,000	$ 200,000

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Note 5 - Acquisition of SynTec LLC (Details) - Assets Acquired and Liabilities Assumed (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Mar. 31, 2013	Feb. 04, 2013	Dec. 31, 2012
Assets Acquired and Liabilities Assumed [Abstract]
Accounts receivable			$ 2,079
Inventory			1,449
Other current assets			26
Property, plant and equipment			1,335
Identifiable intangible assets			5,121
Goodwill	34,888	61,817	2,416	58,895
Accounts payable and accrued liabilities			(2,769)
Net assets acquired			$ 9,657

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Note 8 - Property, Plant and Equipment

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

8. Property, Plant and Equipment –

Property, plant and equipment consisted of the following:

	Estimated useful lives years			June 30, 2013			December 31, 2012
				(in thousands)
Land				$	6,438		$	4,832
Buildings and improvements	7	-	30		32,534			29,515
Machinery and equipment	3	-	10		122,741			117,852
Software			3		8,754			8,400
Furniture and fixtures	3	-	5		816			785
					171,283			161,384
Less – accumulated depreciation and amortization					(96,665	)		(91,212	)
				$	74,618		$	70,172

Depreciation and amortization expense for the three months ended June 30, 2013 and 2012 was $3.5 million and $3.2 million, respectively.  Depreciation and amortization expense for the six months ended June 30, 2013 and 2012 was $6.8 million and $6.5 million, respectively.

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Note 15 - Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

	2013			2012
	(in thousands)
Balance at January 1,	$	1,175		$	2,225
Changes in estimates		(15	)		9
Payments		—			(35	)
Balance at March 31,		1,160			2,199
Changes in estimates		(178	)		(739	)
Payments		—			(42	)
Balance at June 30,	$	982		$	1,418

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Note 9 - Intangible Assets (Details) - Intangible assets (USD $) In Thousands, unless otherwise specified										6 Months Ended		12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Customer Lists [Member]	Dec. 31, 2012 Customer Lists [Member]	Jun. 30, 2013 Trademarks [Member]	Jun. 30, 2013 Noncompete Agreements [Member]	Dec. 31, 2012 Noncompete Agreements [Member]	Jun. 30, 2013 Other Intangibles [Member]	Dec. 31, 2012 Other Intangibles [Member]	Jun. 30, 2013 Minimum [Member] Customer Lists [Member]	Jun. 30, 2013 Minimum [Member] Noncompete Agreements [Member]	Dec. 31, 2012 Maximum [Member] Customer Lists [Member]	Dec. 31, 2012 Maximum [Member] Trademarks [Member]	Dec. 31, 2012 Maximum [Member] Noncompete Agreements [Member]	Dec. 31, 2012 Maximum [Member] Other Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful lives years										5	1	20	5	10	1
Balance, gross	$ 33,301	$ 28,281	$ 29,300	$ 25,449	$ 1,082	$ 2,556	$ 2,469	$ 363	$ 363
Less accumulated amortization	(27,392)	(26,732)
Intangible assets, net	$ 5,909	$ 1,549

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Note 11 - Long-Term Debt

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Long-term Debt [Text Block]

11. Long-Term Debt –

Long-term debt consisted of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
First Lien Credit Facility	$	167,162		$	168,177
Capital Lease – Capital Source Bank		2,582			3,156
Other Capital Leases		189			230
Term Loan – German bank secured by equipment, 5.15%, maturing March 2014		245			407
		170,178			171,970
Less – current maturities		(3,112	)		(3,147	)
Unamortized discount on first lien credit facility		(1,339	)		(1,541	)
	$	165,727		$	167,282

First Lien Credit Facility –

The Company has a first lien senior secured credit facility originally in the amount of $170.0 million with General Electric Capital Corporation, Jefferies Finance LLC and the other financial institutions party thereto (as amended from time to time, the “First Lien Credit Facility”), consisting of term loan commitments originally in the amount of $135.0 million (as amended from time to time, the “First Lien Term Loan”) and $35.0 million of revolving loan commitments (as amended from time to time, the “Revolving Credit Facility”).

On April 18, 2012, the First Lien Credit Facility was amended to increase the First Lien Term Loan commitments from $135.0 million to $157.0 million resulting in aggregate capacity of $192.0 million. The Company used the additional borrowing capacity under the First Lien Term Loan to repay in full all outstanding indebtedness under, and to terminate, the Second Lien Term Loan (as defined below) and to pay related fees and expenses.

On September 19, 2012, the Company entered into a fourth amendment to the First Lien Credit Facility, which increased the Capital Expenditure Limitation covenant.  On January 25, 2013, the Company entered into a fifth amendment to the First Lien Credit Agreement to provide more efficient capacity to move funds between foreign entities and clarify or correct certain other technical provisions in the agreement.

Restrictive Covenants.  The First Lien Credit Facility contains various restrictive covenants that include, among other things, restrictions or limitations on the Company’s ability to incur additional indebtedness or issue disqualified capital stock unless certain financial tests are satisfied; pay dividends, redeem subordinated debt or make other restricted payments; make certain loans, investments or acquisitions; issue stock of subsidiaries; grant or permit certain liens on assets; enter into certain transactions with affiliates; merge, consolidate or transfer substantially all of its assets; incur dividend or other payment restrictions affecting certain subsidiaries; transfer or sell assets including, but not limited to, capital stock of subsidiaries; and change the business the Company conducts. For the twelve months ended June 30, 2013 and December 31, 2012, the Company was subject to a Total Leverage Ratio (which is based on a trailing twelve months calculation) not to exceed 5.25 and 5.50:1.00, respectively, and an Interest Coverage Ratio of not less than 2.25:1.00 and 2.15:1.00, respectively.  As of June 30, 2013, the Company was not in compliance with the Total Leverage Ratio covenant necessitating a waiver and sixth amendment to the facility as discussed below. As of June 30, 2013, the Company was in compliance with all other covenants under the First Lien Facility.

Waiver of Default and Sixth Amendment. On July 30, 2013, the Company entered into a sixth amendment to the First Lien Credit Facility (the “Sixth Amendment”).  Pursuant to the Sixth Amendment, the lenders waived the Company’s default arising as a result of the failure by the Company to be in compliance with the maximum total leverage ratio as of June 30, 2013.  The maximum Total Leverage Ratio for the twelve months ending September 30, 2013, December 31, 2013, and March 31, 2014 was also modified to 6.50:1.00, 6.25:1.00, and 5.17:1.00, respectively.  Beyond March 31, 2014, the maximum Total Leverage Ratios covenants, which become more restrictive, were not changed by the Sixth Amendment. Although the Company can make no assurances, it expects to meet the covenants for each of the twelve months ending September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014, based on the current projections. Accordingly, the debt has been classified as long-term on the consolidated balance sheet.

In addition, commencing on October 31, 2013 and continuing until the Company’s Total Leverage Ratio is less than 5.00:1.00 (the “Required Leveraged Date”), the Total Leverage Ratio as of the last day of any fiscal month that is the first or second fiscal month of a fiscal quarter must not be greater than the Total Leverage Ratio for the most recently completed fiscal quarter.

The Sixth Amendment also increased the margin on the loans by 200 basis points, modified the definition of “EBITDA” to exclude certain expenses from the calculation of EBITDA for purpose of calculating certain debt covenants, and reduced the Company’s borrowing capacity under the revolving credit facility from $35.0 million to approximately $21.5 million, $3.0 million of which may be used for letters of credit. After the Sixth Amendment, the Company has utilized the full capacity under the First Lien Credit Facility, and has $8.0 million available under the New First Lien Revolving Credit Agreement as discussed further below.

In accordance with the Sixth Amendment, the Company must use its best efforts to raise at least $30.0 million of additional unsecured mezzanine indebtedness or other subordinated capital, reasonably acceptable to General Electric Capital Corporation, on or before October 31, 2013.  The first $20.0 million of this mezzanine indebtedness will be applied to pay down the First Lien Credit Facility.  If the Company is not successful in this regard, the margin on the loans will increase by 50 basis points each quarter after October 31, 2013.

The First Lien Credit Facility matures in May 2016. Borrowings under the First Lien Credit Facility incur interest expense that is variable in relation to the London Interbank Offer Rates (“LIBOR”) (and/or Prime) rate. In addition to paying interest on outstanding borrowings under the First Lien Credit Facility, the Company pays a 0.75% per annum commitment fee to the lenders in respect of the unutilized commitments, and letter of credit fees equal to the LIBOR margin on the undrawn amount of all outstanding letters of credit.  As of June 30, 2013, there was $167.2 million outstanding under the First Lien Credit Facility consisting of $154.2 million in term loans and $13.0 million in revolving loans, and the weighted average interest rate on such loans was 7.18%.  The Company had $19.5 million of capacity under the Revolving Credit Facility after taking into account outstanding loan advances and letters of credit.

Guarantees; Security.  The obligations under the First Lien Credit Facility are guaranteed on a senior secured basis by the Company and each of its existing and future wholly-owned domestic subsidiaries, other than GSE International, Inc. and any other excluded subsidiaries. The obligations are secured by a first priority perfected security interest in substantially all of the guarantors’ assets, subject to certain exceptions, permitted liens and permitted encumbrances under the First Lien Credit Facility.

New First Lien Revolving Credit Agreement

On August 8, 2013, the Company entered into a new $8.0 million First Lien Revolving Credit Agreement (the “First Lien Revolving Facility”) with General Electric Capital Corporation (the “Agent”) and the other financial institutions party thereto.

The First Lien Revolving Facility matures on October 31, 2013. Borrowings under the First Lien Revolving Facility incur interest expense that is variable in relation to the London Interbank Offer Rates (“LIBOR”) (and/or Prime) rate.  In addition to paying interest on outstanding borrowings under the First Lien Revolving Facility, the Company pays a 0.75% per annum commitment fee to the lenders in respect of the unutilized commitments, and letter of credit fees equal to the LIBOR margin on the undrawn amount of all outstanding letters of credit.  The other terms of this facility are generally the same as the Company’s First Lien Credit Agreement, as amended.

Second Lien Term Loan –

In 2011, the Company also entered into a 5.5 year, $40.0 million second lien senior secured credit facility consisting of $40.0 million of term loan commitments (the “Second Lien Term Loan”). The Second Lien Term Loan was paid in full on April 18, 2012, and the arrangement was terminated.

Capital Leases –

On August 17, 2012, the Company entered into an equipment financing arrangement with CapitalSource Bank.  The lease is a three-year lease for equipment cost up to $10.0 million.  As of June 30, 2013, there was $2.6 million outstanding under this lease arrangement, with monthly payments of $0.1 million and an implied interest rate of 7.09%.

During 2012, the Company entered into three other capitalized leases with commercial financial institutions. These leases are for terms of three to four years for equipment cost of $0.3 million with implied interest rates from 5.42% to 8.72%. As of June 30, 2013, there was approximately $0.2 million outstanding under these leases.

Non-Dollar Denominated Credit Facilities –

As of June 30, 2013, the Company had seven credit facilities with several of its international subsidiaries.

The Company has two credit facilities with German banks in the amount of EUR 6.0 million ($7.8 million). These revolving credit facilities bear interest at various market rates, and are used primarily to guarantee the performance of European installation contracts and temporary working capital requirements. As of June 30, 2013, there were no balances outstanding under the lines of credit, EUR 2.1 million ($2.7 million) of bank guarantees and letters of credit outstanding, and EUR 3.9 million ($5.1 million) available under these credit facilities. In addition there was a EUR 0.2 million ($0.3 million) secured term loan with a German bank outstanding as of June 30, 2013, with a maturity date in March 2014.

The Company has three credit facilities with Egyptian banks in the amount of EGP 15.0 million ($2.1 million). These credit facilities bear interest at various market rates and are primarily for cash management purposes. There was EGP 7.8 million ($1.1 million) outstanding under these lines of credit, EGP 5.1 million ($0.7 million) of bank guarantees and letters of credit outstanding, and EGP 2.1 million ($0.3 million) available under these credit facilities as of June 30, 2013.

The Company has a BAHT 350.0 million ($11.3 million) Trade on Demand Financing (accounts receivable) facility with Thai Military Bank Public Company Limited (“TMB”).  This facility bears interest at LIBOR plus1.75%, is unsecured and may be terminated at any time by either TMB or the Company. This facility permits the Company to borrow funds upon presentation of proper documentation of purchase orders or accounts receivable from our customers, in each case with a maximum term not to exceed 180 days. The Company maintains a bank account with TMB, assigns rights to the accounts receivable used for borrowings under this facility, and instructs these customers to remit payments to the bank account with TMB.  TMB may, in its sole discretion, deduct or withhold funds from the Company’s bank account for settlement of any amounts owed by the Company under this facility. There was approximately BAHT 350.0 million ($11.3 million) outstanding and with no amounts available under this facility as of June 30, 2013.

The Company had a BAHT 45.0 million ($1.4 million) revolving credit facility with Export-Import Bank of Thailand (“EXIM”), which had a termination date at the discretion of EXIM or the Company. During the three months ended June 30, 2013, the Company notified EXIM it was electing to terminate this credit facility and, accordingly, EXIM returned the cash deposit security of BAHT 15.0 million ($0.5 million) to the Company.

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Note 7 - Inventory

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

7. Inventory –

Inventory consisted of the following:

	June 30, 2013			December 31, 2012
	(in thousands)
Raw materials	$	31,608		$	31,563
Finished goods		40,062			30,849
Supplies		4,749			4,424
Obsolescence and slow moving allowance		(3,037	)		(2,438	)
	$	73,382		$	64,398

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Note 2 - Basis of Presentation

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

2. Basis of Presentation —

The accompanying condensed consolidated financial statements have been prepared on the same basis as those in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2012. The December 31, 2012 Condensed Consolidated Balance Sheet data was derived from the Company’s year-end audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (‘‘GAAP’’). These condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of such financial statements for the periods indicated. The Company believes that the disclosures herein are adequate to make the information presented not misleading. Operating results for the first six months of 2013 are not necessarily indicative of results to be expected for the year ending December 31, 2013. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2012, and the notes thereto included in the 2012 Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts as well as certain disclosures. The Company’s financial statements include amounts that are based on management’s best estimates and judgments. Actual results could differ from those estimates.

Certain reclassifications were made to the December 31, 2012 and June 30, 2012 consolidated financial statements to conform to the 2013 financial statement presentation.  These reclassifications did not have an impact on previously reported results.

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Note 17 - Segment Information (Details) - Operations and assets of reportable segments (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Net sales to external customers	$ 108,201	$ 139,168	$ 203,335	$ 234,085
Sales	118,934	150,832	225,865	260,435
Gross profit	13,209	24,210	26,466	38,600
Gross margin	12.20%	17.40%	13.00%	16.50%
Intersubsegment Eliminations [Member] | N America [Member]
Segment Reporting Information [Line Items]
Sales	7,660	8,192	14,609	18,572
Intersubsegment Eliminations [Member] | Europe Africa [Member]
Segment Reporting Information [Line Items]
Sales	73		97
Intersubsegment Eliminations [Member] | Asia Pacific [Member]
Segment Reporting Information [Line Items]
Sales	2,454	2,310	6,241	5,452
Intersubsegment Eliminations [Member] | Middle East [Member]
Segment Reporting Information [Line Items]
Sales	546	1,162	1,583	2,326
Intersubsegment Eliminations [Member]
Segment Reporting Information [Line Items]
Sales	10,733	11,664	22,530	26,350
N America [Member]
Segment Reporting Information [Line Items]
Net sales to external customers	46,275	60,106	87,649	96,332
Sales	53,935	68,298	102,258	114,904
Gross profit	8,299	12,831	17,245	22,062
Gross margin	17.90%	21.30%	19.70%	22.90%
Europe Africa [Member]
Segment Reporting Information [Line Items]
Net sales to external customers	28,832	41,167	51,185	67,018
Sales	28,905	41,167	51,282	67,018
Gross profit	919	5,338	1,076	6,299
Gross margin	3.20%	13.00%	2.10%	9.40%
Asia Pacific [Member]
Segment Reporting Information [Line Items]
Net sales to external customers	22,002	24,074	38,589	42,644
Sales	24,456	26,384	44,830	48,096
Gross profit	2,933	3,853	5,132	7,173
Gross margin	13.30%	16.00%	13.30%	16.80%
Latin America [Member]
Segment Reporting Information [Line Items]
Net sales to external customers	7,278	11,197	18,983	23,673
Sales	7,278	11,197	18,983	23,673
Gross profit	692	1,839	2,203	2,598
Gross margin	9.50%	16.40%	11.60%	11.00%
Middle East [Member]
Segment Reporting Information [Line Items]
Net sales to external customers	3,814	2,624	6,929	4,418
Sales	4,360	3,786	8,512	6,744
Gross profit	$ 366	$ 349	$ 810	$ 468
Gross margin	13.30%	13.30%	11.70%	10.60%

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Note 13 - Stock-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Note 13 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1,200,000	1,900,000	1,200,000	1,900,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit (in Dollars per share)	$ 0.67
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in Dollars per share)	$ 11.57
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)	$ 4.92		$ 4.92
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	74,750	200,650	94,750
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	116,935	57,300	191,872
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years
Share-based Compensation (in Dollars)			$ 433	$ 4,341
Stock Options Term	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	3 years 109 days
Restricted Stock [Member]
Note 13 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Stock Options and Restricted Stock [Member]
Note 13 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation (in Dollars)		100	100
Paid In Fully Vested Common Stock [Member]
Note 13 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation (in Dollars)				$ 4,300
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period				478,467

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Note 4 - Goodwill (Details) (USD $) In Thousands, unless otherwise specified	2 Months Ended	3 Months Ended	6 Months Ended
	Jun. 01, 2013	Jun. 30, 2013	Jun. 30, 2013
Note 4 - Goodwill (Details) [Line Items]
Goodwill, Impairment Loss (in Dollars)	$ 26,400	$ 26,423	$ 26,423
Income Approach Valuation Technique [Member]
Note 4 - Goodwill (Details) [Line Items]
Fair Value Weighting	65.00%
Market Approach Valuation Technique [Member]
Note 4 - Goodwill (Details) [Line Items]
Fair Value Weighting	35.00%

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Note 14 - Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

14. Income Taxes –

Income tax expense from continuing operations for the three months ended June 30, 2013 and 2012 was $2.5 million and $2.1 million, respectively.  Income tax expense (benefit) from continuing operations for the six months ended June 30, 2013 and 2012 was ($0.3) million and $2.7 million, respectively. The effective tax rates were (8.1%) and 35.9% for the three months ended June 30, 2013 and 2012, respectively, and 0.7% and (45.4%) for the six months ended June 30, 2013 and 2012 respectively. The difference in the effective tax rate compared with the U.S. federal statutory rate in 2013 is due to the mix of the international jurisdictional rates, nondeductible goodwill impairment and U.S. permanent differences relating to foreign taxes.

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Note 10 - Accrued Liabilities and Other

6 Months Ended

Jun. 30, 2013

Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract]

Other Liabilities Disclosure [Text Block]

10. Accrued Liabilities and Other –

Accrued liabilities and other consisted of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Customer prepayments	$	446	$	759
Accrued operating expenses		4,476		5,951
Self-insurance reserves		1,598		1,758
Compensation and benefits		2,832		6,786
Accrued interest		2,735		2,522
Taxes, other than income		1,433		2,023
Income taxes payable		483		1,691
Deferred income taxes		739		1,156
Other accrued liabilities		1,607		399
	$	16,349	$	23,045

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Note 17 - Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

17. Segment Information –

The Company’s operating and external reporting segments are based on geographic regions, which is consistent with the basis of how management internally reports and evaluates financial information used to make operating decisions. The Company’s reportable segments are North America, Europe Africa, Asia Pacific, Latin America and Middle East.

The following tables present information about the results from continuing operations and assets of the Company’s reportable segments for the periods presented.

	Three months ended June 30, 2013
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	46,275		$	28,832		$	22,002		$	7,278		$	3,814		$	108,201
Intersegment sales		7,660			73			2,454			—			546			10,733
Total segment net sales		53,935			28,905			24,456			7,278			4,360			118,934
Gross profit		8,299			919			2,933			692			366			13,209
Gross margin		17.9	%		3.2	%		13.3	%		9.5	%		13.3	%		12.2	%

	Three months ended June 30, 2012
	N. America			Europe Africa			Asia Pacific			Latin America				Middle East			Total
	(in thousands)
Net sales to external customers	$	60,106		$	41,167		$	24,074			$	11,197		$	2,624		$	139,168
Intersegment sales		8,192			—			2,310				—			1,162			11,664
Total segment net sales		68,298			41,167			26,384				11,197			3,786			150,832
Gross profit		12,831			5,338			3,853				1,839			349			24,210
Gross margin		21.3	%		13.0	%		16.0	%			16.4	%		13.3	%		17.4	%

	Six months ended June 30, 2013
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	87,649		$	51,185		$	38,589		$	18,983		$	6,929		$	203,335
Intersegment sales		14,609			97			6,241			—			1,583			22,530
Total segment net sales		102,258			51,282			44,830			18,983			8,512			225,865
Gross profit		17,245			1,076			5,132			2,203			810			26,466
Gross margin		19.7	%		2.1	%		13.3	%		11.6	%		11.7	%		13.0	%

	Six months ended June 30, 2012
	N. America			Europe Africa			Asia Pacific			Latin America			Middle East			Total
	(in thousands)
Net sales to external customers	$	96,332		$	67,018		$	42,644		$	23,673		$	4,418		$	234,085
Intersegment sales		18,572			—			5,452			—			2,326			26,350
Total segment net sales		114,904			67,018			48,096			23,673			6,744			260,435
Gross profit		22,062			6,299			7,173			2,598			468			38,600
Gross margin		22.9	%		9.4	%		16.8	%		11.0	%		10.6	%		16.5	%

The following tables reconcile the segment net sales information presented above to the consolidated financial information.

	Reconciliation to Consolidated Sales
	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
	(in thousands)
Total segment net sales	$	118,934		$	150,832		$	225,865		$	260,435
Intersegment sales		(10,733	)		(11,664	)		(22,530	)		(26,350	)
Consolidated net sales	$	108,201		$	139,168		$	203,335		$	234,085

The following tables present information about assets of the Company’s reportable segments (in thousands):

	N. America		Europe Africa		Asia Pacific		Latin America		Middle East		Total
December 31, 2012	$	229,272	$	62,154	$	66,283	$	38,774	$	16,715	$	413,188
June 30, 2013	$	196,207	$	56,905	$	66,374	$	30,185	$	18,602	$	368.273

	Reconciliation to Consolidated Assets
	June 30, 2013			December 31, 2012
Total segment assets	$	368,273		$	413,188
Intersegment balances		(61,187	)		(77,090	)
Consolidated assets	$	307,086		$	336,098

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Note 15 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

15. Commitments and Contingencies –

Warranties

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 accrues a warranty reserve based on estimates for warranty claims. This estimate is based on historical claims history and current business activities and is accrued as a cost of sales in the period such business activity occurs. The table below reflects a summary of activity of the Company’s operations for warranty obligations for the six months ended June 30, 2013 and 2012 (in thousands):

	2013			2012
	(in thousands)
Balance at January 1,	$	1,175		$	2,225
Changes in estimates		(15	)		9
Payments		—			(35	)
Balance at March 31,		1,160			2,199
Changes in estimates		(178	)		(739	)
Payments		—			(42	)
Balance at June 30,	$	982		$	1,418

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 contractor’s 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.

Bonding – Bank Guarantees –

The Company, in some direct sales and raw material acquisition situations, is required to post performance bonds or bank guarantees as part of the contractual guarantee for its performance. The performance bonds or bank guarantees can be in the full amount of the contracts. To date the Company has not received any claims against any of the posted securities, most of which terminate at the final completion date of the contracts. As of June 30, 2013, the Company had $6.0 million of bonds outstanding and $5.9 million of guarantees and letters of credit issued under its bank lines.

Litigation and Claims –

The Company is a party to various legal actions arising in the ordinary course of our business. These legal actions cover a broad variety of claims spanning the Company’s entire business. The Company believes it is not probable and reasonably estimable that resolution of these legal actions will, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 02, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	GSE Holding, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		20,360,612
Amendment Flag	false
Entity Central Index Key	0001275712
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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Note 16 - Related Party Transaction

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

16. Related Party Transaction –

Management Agreement with CHS Management IV LP

In connection with the 2004 acquisition of the Company by CHS, the Company and GEO Holdings entered into a management agreement with CHS Management IV LP (“CHS Management”) a limited partnership (1) of which CHS is the general partner and (2) which is the general partner of CHS IV. Pursuant to the management agreement, CHS Management provided certain financial and management consulting services to GEO Holdings and to the Company. In consideration of those services, the Company paid fees to CHS Management in an aggregate annual amount of $2.0 million payable in equal monthly installments. Under the management agreement, the Company paid and expensed $0.2 million during the six months ended June 30, 2012. In connection with the Company’s IPO, the management agreement was terminated and a fee of $3.0 million was paid and expensed during the six months ended June 30, 2012. The amounts paid to CHS are included in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. As of June 30, 2013, there were no amounts payable to CHS under the terminated agreement.