<PAGE>

                                      2002
================================================================================

                                 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 March 31, 2002

    [ ] 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 1-14105
                       __________________________________


                          AVALON HOLDINGS CORPORATION

             (Exact name of registrant as specified in its charter)

                   Ohio                                 34-1863889
      (State or other jurisdiction                   (I.R.S. Employer
    of incorporation or organization)               Identification No.)

     One American Way, Warren, Ohio                     44484-5555
 (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code:  (330) 856-8800

Indicate by a 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
                                               ---     ---

The registrant had 3,185,240 shares of its Class A Common Stock and 618,091
shares of its Class B Common Stock outstanding as of May 8, 2002.

================================================================================
<PAGE>

                  AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

                                     INDEX


<TABLE>
<CAPTION>
                                                                                               Page
                                                                                               ----
<S>                                                                                             <C>
PART I.  FINANCIAL INFORMATION

  Item 1. Financial Statements

  Condensed Consolidated Statements of Operations for
  the Three Months Ended March 31, 2002 and 2001 (Unaudited)...............................        3

  Condensed Consolidated Balance Sheets at March 31,
  2002 (Unaudited) and December 31, 2001...................................................        4

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

  Notes to Condensed Consolidated Financial Statements (Unaudited).........................        6

  Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations..............................................       11


PART II.  OTHER INFORMATION

  Item 1. Legal Proceedings................................................................       16

  Item 2. Changes in Securities and Use of Proceeds........................................       16

  Item 3. Defaults upon Senior Securities..................................................       16

  Item 4. Submission of Matters to a Vote of Security Holders..............................       16

  Item 5. Other Information................................................................       16

  Item 6. Exhibits and Reports on Form 8-K.................................................       16

SIGNATURE..................................................................................       17
</TABLE>

                                       2
<PAGE>

                         PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                             March 31,
                                                 -------------------------------
                                                    2002                2001
                                                 -----------         -----------
<S>                                              <C>                 <C>
Net operating revenues........................      $16,445             $16,762

Cost and expenses:
Cost of operations............................       15,692              15,252
Selling, general and administrative expense...        2,493               2,606
                                                    -------             -------

Loss from operations..........................       (1,740)             (1,096)

Other income:
Interest income...............................           76                 183
Other income, net.............................           33                  71
                                                    -------             -------

Loss before income taxes......................       (1,631)               (842)
Income tax benefit............................           --                (295)
                                                    -------             -------
Net loss......................................      $(1,631)            $  (547)
                                                    =======             =======

Basic net loss per share......................      $  (.43)            $  (.14)
                                                    =======             =======
Weighted average shares outstanding (Note 2)..        3,803               3,803
                                                    =======             =======
</TABLE>



See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                     March 31,           December 31,
                                                                       2002                  2001
                                                                     ---------           -----------
Assets                                                              (Unaudited)
------
<S>                                                                 <C>                  <C>
Current assets:
 Cash and cash equivalents......................................      $  3,346             $ 5,092
 Short-term investments.........................................         1,923               1,939
 Accounts receivable, net.......................................        13,746              14,749
 Deferred income taxes..........................................         1,223               1,223
 Prepaid expenses and other current assets......................         1,950               2,132
                                                                      --------             -------
  Total current assets..........................................        22,188              25,135

Noncurrent investments..........................................         5,940               5,956
Properties and equipment, less accumulated depreciation
 and amortization of $18,110 in 2002 and $17,494 in 2001........        28,129              28,205
Costs in excess of fair market value of net assets of acquired
 businesses, net................................................           538                 538
Other assets, net...............................................           151                 133
                                                                      --------             -------
  Total assets..................................................      $ 56,946             $59,967
                                                                      ========             =======

Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
 Accounts payable...............................................      $  5,767             $ 7,246
 Accrued payroll and other compensation.........................         1,118               1,128
 Accrued income taxes...........................................           203                 216
 Other accrued taxes............................................           236                 424
 Other liabilities and accrued expenses.........................         2,034               1,734
                                                                      --------             -------
  Total current liabilities.....................................         9,358              10,748

Deferred income taxes...........................................           701                 701
Other noncurrent liabilities....................................           120                 120

Shareholders' equity:
 Class A Common Stock, $.01 par value...........................            32                  32
 Class B Common Stock, $.01 par value...........................             6                   6
 Paid-in capital................................................        58,096              58,096
 Accumulated deficit............................................       (11,367)             (9,736)
                                                                      --------             -------
  Total shareholders' equity....................................        46,767              48,398
                                                                      --------             -------
  Total liabilities and shareholders' equity....................      $ 56,946             $59,967
                                                                      ========             =======

</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

AVALON HOLDINGS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

<TABLE>
<CAPTION>

                                                       Three Months Ended
                                                            March 31,
                                                       -------------------
                                                         2002       2001
                                                       -------    --------
<S>                                                    <C>        <C>
Operating activities:
 Net loss..........................................    $(1,631)   $  (547)
 Reconciliation of net loss to cash from operating
  activities:
  Depreciation and amortization....................        723        803
  Deferred income tax benefit......................         --       (295)
  Provision for losses on accounts receivable......        201         28
  Gain on sales of property and equipment..........         (7)       (35)
  Sales of trading investments.....................         --        666
  Changes in operating assets and liabilities:
   Accounts receivable.............................        802      3,065
   Prepaid expenses and other current assets.......        182        302
   Other assets....................................        (18)        --
   Accounts payable................................     (1,479)      (978)
   Accrued payroll and other compensation..........        (10)      (165)
   Accrued income taxes............................        (13)       (14)
   Other accrued taxes.............................       (188)        10
   Other liabilities and accrued expenses..........        300        (58)
                                                       -------    -------
    Net cash (used in) provided by operating
     activities....................................     (1,138)     2,782
                                                       -------    -------

Investing activities:
 Sales of available-for-sales investments..........         --         25
 Capital expenditures..............................       (618)      (344)
 Proceeds from sales of property and equipment.....         10        162
    Net cash used in investing activities..........       (608)      (157)
                                                       -------    -------

(Decrease) increase in cash and cash equivalents...     (1,746)     2,625
Cash and cash equivalents at beginning of year.....      5,092     11,022
                                                       -------    -------
Cash and cash equivalents at end of period.........    $ 3,346    $13,647
                                                       =======    =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

                  AVALON HOLDINGS CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)
                                 March 31, 2002


Note 1.  Basis of Presentation

The unaudited condensed consolidated financial statements of Avalon Holdings
Corporation and subsidiaries (collectively "Avalon") and related notes included
herein have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission.  Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
consistent with such rules and regulations.  The accompanying unaudited
condensed consolidated financial statements and related notes should be read in
conjunction with the consolidated financial statements and related notes
included in Avalon's 2001 Annual Report to Shareholders.

In the opinion of management, these unaudited condensed consolidated financial
statements include all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of the financial position of Avalon as of
March 31, 2002, and the results of operations and cash flows for the interim
periods presented.

The operating results for the interim periods are not necessarily indicative of
the results to be expected for the full year.


Note 2.  Basic Net Income (Loss) Per Share

Basic net income (loss) per share has been computed using the weighted average
number of common shares outstanding during each period, which was 3,803,331.
There were no common equivalent shares outstanding and therefore diluted per
share amounts are equal to basic per share amounts for the first three months of
2002 and 2001.


Note 3.  Investment Securities

Avalon classifies its investment securities into trading, available-for-sale, or
held-to-maturity categories.  Securities are classified as trading when Avalon
has the intent of selling them in the near term.  Trading securities are
reported at fair value on the balance sheet, with the change in fair value
during the period included in earnings.  There were no trading securities at
either March 31, 2002 or December 31, 2001.

Securities are classified as held-to-maturity when Avalon has the ability and
intent to hold the securities to maturity.  Held-to-maturity securities are
reported as either short-term or noncurrent on the balance sheet based upon
contractual maturity date and are stated at amortized cost.  Securities that are
not classified as either trading or held-to-maturity are classified as
available-for-sale and reported at fair value on the balance sheet with the
change in fair value reported as a component of other comprehensive income.
There were no available-for-sale securities at either March 31, 2002 or December
31, 2001.

Avalon held $7,863,000 and $7,895,000 of investment securities classified as
held-to-maturity at March 31, 2002 and December 31, 2001, respectively.  These
securities consist of U.S. Treasury notes and are reported at amortized cost on
the Condensed Consolidated Balance Sheets under the captions "Short-term

                                       6
<PAGE>

investments", for investments due in one year or less and "Noncurrent
investments", for investments which mature after one year.  The details of the
held-to-maturity investments are as follows (in thousands):


<TABLE>
<CAPTION>
                                                                          Held-To-Maturity
                                              -----------------------------------------------------------------------
                                                      At March 31, 2002                    At December 31, 2001
                                              --------------------------------         ------------------------------
                                              Amortized Cost        Fair Value         Amortized Cost      Fair Value
                                              --------------------------------         ------------------------------
<S>                                           <C>                   <C>                <C>                 <C>
U.S. Treasury Notes:
Due in one year or less.....................      $1,923             $1,921                $1,939            $1,942
Due after one year
  through five years........................      $5,940             $5,912                $5,956            $5,969
                                              --------------------------------         ------------------------------
                Total                             $7,863             $7,833                $7,895            $7,911
                                              ================================         ==============================
</TABLE>


Note 4.  Comprehensive Income

Avalon has no item that qualifies as a component of other comprehensive income
as defined in Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income and, therefore, comprehensive income equals net income for
all periods presented.


Note 5.  Legal Matters

In September 1995, certain subsidiaries of Avalon were informed that they had
been identified as potentially responsible parties by the Indiana Department of
Environmental Management with respect to a Fulton County, Indiana hazardous
waste disposal facility which is subject to remedial action under Indiana
Environmental Laws.  Such identification was based upon the subsidiaries having
been involved in the transportation of hazardous substances to the facility.
During the fourth quarter of 1999, Avalon became a party to an Agreed Order and
a Participation Agreement regarding the remediation of a portion of this site.
The Participation Agreement provides for, among other things, the allocation of
all site remediation costs except for approximately $3 million.  Avalon's total
liability for the allocated costs under the Participation Agreement was
approximately $71,000, which Avalon has paid.

The additional unallocated site remediation costs are currently estimated to be
approximately $3 million and Avalon's total accrued liability relating to the
remediation of this portion of the site on an undiscounted basis is $120,000,
which amount is included in the Condensed Consolidated Balance Sheets under the
caption "Other noncurrent liabilities."  The extent of any ultimate liability of
any of Avalon's subsidiaries with respect to these additional costs is unknown.
The measurement of environmental liabilities is inherently difficult and the
possibility remains that technological, regulatory or enforcement developments,
the results of environmental studies or other factors could materially alter
Avalon's expectations at any time.  Currently, however, because of the expected
sharing among responsible and potentially responsible parties, the availability
of legal defenses, and typical settlement results, Avalon currently estimates
that the ultimate liability of this matter will be consistent with the amounts
recorded on Avalon's financial statements.

In the ordinary course of conducting its business, Avalon also becomes involved
in lawsuits, administrative proceedings and governmental investigations,
including those related to environmental matters.  Some of these proceedings may
result in fines, penalties or judgments being assessed against Avalon which,
from time to time, may have an impact on its business and financial condition.
Although the outcome of such lawsuits or other proceedings cannot be predicted
with certainty, Avalon does not believe that any uninsured ultimate liabilities,
fines or penalties resulting from such pending proceedings, individually or in
the aggregate, would have a material adverse effect on it.

                                       7
<PAGE>

Note 6.  Goodwill and Other Intangible Assets

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 142, Goodwill and Intangible
Assets.  Under SFAS 142, goodwill and intangible assets with indefinite lives
will no longer be subject to amortization, but will be tested for impairment
annually and whenever there is an impairment indicator.

In accordance with SFAS 142, Avalon discontinued the amortization of goodwill
and intangible assets with indefinite lives effective January 1, 2002.  Had
goodwill amortization of approximately $10,000 not been recorded in the quarter
ended March 31, 2001, loss from operations would have decreased to $1,086,000;
net loss to $541,000; and net loss per share would have remained unchanged.

By December 31, 2002, Avalon will have completed a transitional fair value based
impairment test of goodwill as of January 1, 2002.  Impairment losses, if any,
resulting from the transitional testing will be recognized in the quarter ended
March 31, 2002 as a cumulative effect of a change in accounting principle.

Note 7.  Business Segment Information

For business segment information, Avalon considered its operating and management
structure and the types of information subject to regular review by its "chief
operating decision maker."  On this basis, Avalon's reportable segments include
transportation services, technical environmental services, waste disposal
brokerage and management services, and golf and related operations.  Avalon
accounts for intersegment net operating revenues as if the transactions were to
third parties.  The segment disclosures are presented on this basis for all
periods presented.

Avalon's primary business segment provides transportation services that include
transportation of hazardous and nonhazardous waste, transportation of general
and bulk commodities, and transportation brokerage and management services.  The
technical environmental services segment provides environmental consulting,
engineering, site assessments, analytical laboratory, remediation services and
operates and manages a captive landfill for an industrial customer.  The waste
disposal brokerage and management services segment provides hazardous and
nonhazardous disposal brokerage and management services.  The golf and related
operations segment includes the operations of a golf course and travel agency.
Avalon does not have significant operations located outside the United States
and, accordingly, geographical segment information is not presented.



The accounting policies of the segments are consistent with those described for
the consolidated financial statements in the summary of significant accounting
policies.  Avalon measures segment profit for

                                       8
<PAGE>

internal reporting purposes as income (loss) before taxes. Business segment
information including the reconciliation of segment income (loss) to
consolidated loss before income taxes is as follows (in thousands):

<TABLE>
<CAPTION>

                                                     Three Months Ended
                                                         March 31,
                                                     ------------------
                                                       2002      2001
                                                     --------   -------
<S>                                                  <C>       <C>
Net operating revenues from:
Transportation services:
 External customers revenues.......................  $ 8,690   $ 7,404
 Intersegment revenues.............................      990     1,201
                                                     -------   -------
 Total transportation services.....................    9,680     8,605
                                                     -------   -------

Technical environmental services:
 External customers revenues.......................    3,709     4,750
 Intersegment revenues.............................        6         4
                                                     -------   -------
 Total technical environmental services............    3,715     4,754
                                                     -------   -------

Waste disposal brokerage and management services:
 External customers revenues.......................    3,957     4,510
 Intersegment revenues.............................       45       187
                                                     -------   -------
 Total waste disposal brokerage and management
  services.........................................    4,002     4,697
                                                     -------   -------

Golf and related operations:
 External customer revenues........................       89        98
 Intersegment revenues.............................       14        37
                                                     -------   -------
 Total golf and related operations.................      103       135
                                                     -------   -------

 Segment operating revenues........................   17,500    18,191
 Intersegment eliminations.........................   (1,055)   (1,429)
                                                     -------   -------
 Total net operating revenues......................  $16,445   $16,762
                                                     -------   -------

Income (loss) before taxes:
 Transportation services...........................  $  (365)  $  (107)
 Technical environmental services..................     (381)      (39)
 Waste disposal brokerage and management
  services.........................................      105       236
 Golf and related operations.......................     (238)     (235)
 Other businesses..................................       --        (3)
                                                     -------   -------
 Segment loss before taxes.........................     (879)     (148)
 Corporate interest income.........................       60       135
 Corporate other income, net.......................        1         4
 General corporate expenses........................     (813)     (833)
                                                     -------   -------
 Loss before taxes.................................  $(1,631)  $  (842)
                                                     -------   -------

</TABLE>

                                       9
<PAGE>

Business Segment Information (continued)

<TABLE>
<CAPTION>

                                                Three Months Ended
                                                      March 31,
                                                -------------------
Interest income:                                  2002       2001
                                                --------   --------
<S>                                             <C>        <C>
 Transportation services..................      $      6   $     20
 Technical environmental services.........             5         12
 Waste disposal brokerage and management
  services................................             4         14
 Golf and related operations..............             1          2
 Corporate................................            60        135
                                                --------   --------
   Total..................................      $     76   $    183
                                                --------   --------

<CAPTION>

                                                March 31,  December 31,
                                                  2002        2001
                                                --------   -----------
<S>                                             <C>        <C>
Identifiable assets:
 Transportation services..................      $ 13,762   $ 13,349
 Technical environmental services.........        11,068     11,365
 Waste disposal brokerage and management
  services................................         4,284      5,143
 Golf and related operations..............        12,601     12,292
 Other businesses.........................            65         66
 Corporate................................        28,842     31,365
                                                --------   --------
   Sub Total..............................        70,622     73,580
 Elimination of intersegment receivables..       (13,676)   (13,613)
                                                --------   --------
   Total..................................      $ 56,946   $ 59,967
                                                ========   ========

</TABLE>

                                       10
<PAGE>

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

The following discussion provides information which management believes is
relevant to an assessment and understanding of the operations and financial
condition of Avalon Holdings Corporation and its Subsidiaries.  As used in this
report, the term "Avalon" means Avalon Holdings Corporation and its wholly owned
subsidiaries, taken as a whole, unless the context indicates otherwise.

Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations which are not historical in nature are
intended to be, and are hereby identified as, `forward looking statements'.
Avalon cautions readers that forward looking statements, including, without
limitation, those relating to Avalon's future business prospects, revenues,
working capital, liquidity, capital needs, interest costs, and income, are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those indicated in the forward looking statements, due to
risks and factors identified herein and from time to time in Avalon's reports
filed with the Securities and Exchange Commission.

Liquidity and Capital Resources
-------------------------------

For the first three months of 2002, Avalon utilized existing cash to fund
capital expenditures and meet operating needs.

Avalon's capital expenditures in 2002, excluding acquisitions, are expected to
be in the range of $2 million to $3 million, which will relate principally to
remodeling the corporate headquarters to include a clubhouse and pro shop for
the Avalon Lakes Golf Club.  During the first three months of 2002, capital
expenditures for Avalon totaled $.6 million which was principally related to the
remodeling of the corporate headquarters.

Working capital was $12.8 million at March 31, 2002 compared with $14.4 million
at December 31, 2001.  The decrease is primarily the result of utilizing cash to
fund capital expenditures and a reduction in accounts receivable as a result of
lower net operating revenues in the first quarter of 2002 compared with the
fourth quarter of 2001.

The decrease in Accounts Payable at March 31, 2002 compared with December 31,
2001 is primarily due to the payment to subcontractors for remediation services
performed for a customer on a single significant 2001 project .  As a result of
this same customer's financial and operational decline in the fourth quarter of
2001 and its subsequent filing for protection from creditors under the
provisions of Chapter 11 of the United States Bankruptcy Code, Avalon's
remediation business has not been paid approximately $2.2 million for work
performed on this project.  The unsuccessful collection of these monies coupled
with Avalon's use of existing cash to satisfy its obligations associated with
the project, has had a negative effect on Avalon's liquidity.

Management believes that cash provided from operations, the availability of
working capital, as well as Avalon's ability to incur indebtedness, will be, for
the foreseeable future, sufficient to meet operating requirements and fund
capital expenditure programs.  Avalon does not currently have a credit facility.

Currently, Avalon is not pursuing potential acquisition candidates but will
continue to consider acquisitions that make economic sense.  While Avalon has
not entered into any pending agreements for acquisitions, it may do so at any
time.  Such potential acquisitions could be financed by existing working

                                       11
<PAGE>

capital, secured or unsecured debt, issuance of common stock, or issuance of a
security with characteristics of both debt and equity, any of which could impact
liquidity in the future.

Results of Operations

Overall performance

Net operating revenues in the first quarter of 2002 decreased to $16.4 million
compared with $16.8 million in the prior year's first quarter.  Cost of
operations increased to $15.7 million in the first quarter of 2002 compared with
$15.3 million in the prior year quarter.  Avalon recorded a net loss of $1.6
million or $.43 per share for the first quarter of 2002 compared with a net loss
of $.5 million or $.14 per share for the first quarter of 2001.

Performance in the First Quarter of 2002 compared with the First Quarter of 2001

Segment performance

Segment performance should be read in conjunction with Note 7 to the Condensed
Consolidated Financial Statements.

Net operating revenues of the transportation services segment increased to $9.7
million in the first quarter of 2002 compared with $8.6 million in the first
quarter of the prior year.  The increase in net operating revenues is primarily
attributable to a significant increase in the level of business of the
transportation brokerage operations and the transportation of municipal solid
waste, partially offset by a decrease in the transportation of hazardous waste
and general commodities.  The increase in transportation brokerage net operating
revenues is primarily related to a single customer requiring transportation
brokerage services and the increase in the transportation of municipal solid
waste is primarily a result of higher volumes of municipal solid waste
transported for a single customer.  The decrease in net operating revenues
relating to the transportation of hazardous waste is primarily a result of a
decline in the volume of hazardous waste transported for certain customers.  The
decrease in the level of transportation services provided has resulted in the
under utilization of many leased power units, thereby increasing costs as a
percentage of net operating revenues.  The transportation services segment
incurred a loss before taxes of $.4 million for the first quarter of 2002
compared with a loss before taxes of $.1 million for the first quarter of 2001.
The increase is primarily a result of reduced operating margins within the
transportation brokerage operations, the significant decrease in the level of
hazardous waste transportation services provided and increased operating costs
in the provision of municipal solid waste transportation services.

Net operating revenues of the technical environmental services segment decreased
to $3.7 million in the first quarter of 2002 compared with $4.8 million in the
first quarter of the prior year.  The decrease in net operating revenues is
primarily the result of a decrease in net operating revenues of the remediation
business and the engineering and consulting business.  The technical
environmental services segment incurred a loss before taxes of $.4 million in
the first quarter of 2002 compared with a loss before taxes of $39,000 in the
first quarter of 2001.  The increased loss is primarily related to the
engineering and consulting business and the remediation business which both
incurred losses before taxes primarily because of decreased net operating
revenues and from recording charges to the provision for losses on accounts
receivable as a result of customer bankruptcies.  Both the remediation services
and the engineering and consulting business recorded income before taxes in the
first quarter of 2001.  Income before taxes of the captive landfill management
business was relatively unchanged from the prior year

                                       12
<PAGE>

quarter as was the analytical laboratory business which incurred substantially
the same loss before taxes in both the first quarter of 2002 and 2001.

Net operating revenues of the waste disposal brokerage and management services
segment decreased to $4 million in the first quarter of 2002 compared with $4.7
million in the first quarter of the prior year.  The decrease in net operating
revenues is primarily the result of a decrease in the level of disposal
brokerage and management services provided.  Income before taxes for the waste
disposal brokerage and management services segment decreased to $.1 million in
the first quarter of 2002 compared with $.2 million in the first quarter of the
prior year primarily as a result of a decline in the level of business.

Avalon's golf and related operations segment consist primarily of the operation
of a golf course and travel agency.    The golf course, which is located in
Warren, Ohio, was closed during the first quarter of 2002 and 2001 due to
seasonality.  Net operating revenues for the golf and related operations segment
were $.1 million for the first three months of 2002 and 2001.  The golf and
related operations segment incurred a loss before taxes of $.2 million in the
first quarter of 2002 and 2001.  The loss before taxes of the golf and related
operations segment is primarily as a result of the ongoing expenses of the golf
course operations while the golf course is closed during the winter.

Interest income

Interest income decreased to $.1 million in the first quarter of 2002 compared
with $.2 million in the first quarter of 2001 primarily due to a decline in the
average amount of cash and cash equivalents during the first quarter of 2002
compared with the prior year quarter.

General corporate expenses

General corporate expenses were $.8 million in both the first quarter of 2002
and 2001.

Net loss

Avalon recorded a net loss of $1.6 million in the first quarter of 2002 compared
with a net loss of $.5 million in the first quarter of the prior year.  Avalon's
overall effective tax rate, including the effect of state income tax provisions,
was 0% in the first quarter of 2002.  The deferred tax benefit arising from the
loss before income taxes was offset by a valuation allowance.  A valuation
allowance is provided when it is more likely than not that deferred tax assets
relating to certain federal and state loss carryforwards will not be realized.
Avalon's overall effective tax rate, including the effect of state income tax
provisions, was 35% in the first quarter of 2001.  The overall effective tax
rate is different than statutory rates primarily due to state income taxes, the
increase in the valuation allowance, and nondeductible expenses.


Trends and Uncertainties

In the ordinary course of conducting its business, Avalon becomes involved in
lawsuits, administrative proceedings and governmental investigations, including
those relating to environmental matters.  Some of these proceedings may result
in fines, penalties or judgments being assessed against Avalon which, from time
to time, may have an impact on its business and financial condition.  Although
the outcome of such lawsuits or other proceedings cannot be predicted with
certainty, Avalon does not believe that any uninsured ultimate liabilities,
fines or penalties resulting from such pending proceedings, individually or in
the aggregate, would have a material adverse effect on it.

                                       13
<PAGE>

The federal government and numerous state and local governmental bodies are
continuing to consider legislation or regulations to either restrict or impede
the disposal and/or transportation of waste.  A significant portion of Avalon's
transportation and disposal brokerage and management revenues is derived from
the disposal or transportation of out-of-state waste.  Any law or regulation
restricting or impeding the transportation of waste or the acceptance of out-of-
state waste for disposal could have a significant negative effect on Avalon.

As is the case with any transportation company, an increase in fuel prices will
subject Avalon's transportation operations to increased operating expenses,
which, in light of competitive market conditions, Avalon may not be able to pass
on to its customers.

Insurance costs, particularly within the transportation industry, have risen
dramatically over the past several months.  An increase in insurance premiums
will subject Avalon's operations to increased operating expenses, which, in
light of competitive market conditions, Avalon may not be able to pass on to its
customers.

Avalon's transportation operations utilize power units which are subject to
long-term leases.  A decrease in the level of transportation services provided
has resulted in the under utilization of many of these power units.  Continuing
under utilization of these power units will adversely impact the future
financial performance of the transportation operations.

Competitive pressures continue to impact the financial performance of Avalon's
transportation services, technical environmental services and waste disposal
brokerage and management services.  A decline in the rates which customers are
willing to pay could adversely impact the future financial performance of
Avalon.

The analytical laboratory business of the technical environmental services
operations has experienced significant operating losses as a result of a decline
in net operating revenues and operational inefficiencies.  As a result, during
the second quarter of 2001, the laboratory operations implemented a reduction
and reorganization of its workforce, however, failure to increase net operating
revenues has continued to adversely impact the financial performance of the
analytical laboratory business because of the fixed nature of many of the costs
associated with the laboratory operations.  Recognizing that the continuing
losses incurred by the analytical laboratory business would adversely impact its
future financial performance, on May 1, 2002, Avalon sold all of the operating
assets of its Export, Pennsylvania analytical laboratory business.  Proceeds
from the sale were approximately $.4 million which equaled the net book value of
the assets that were sold.  As part of the transaction, the purchaser entered
into a lease agreement with Avalon to remain in the Export building.  Avalon
anticipates selling its radio-chemistry laboratory operations to the same
purchaser upon substantially similar terms within the next several months.  In
the interim, continuing losses incurred by the radio-chemistry laboratory will
adversely impact its future financial performance.

Avalon's waste disposal brokerage and management operations obtain and retain
customers by providing services and identifying cost-efficient disposal options
unique to a customer's needs.  Consolidation within the solid waste industry has
resulted in reducing the number of disposal options available to waste
generators and has caused disposal pricing to increase.  Avalon does not believe
that industry pricing changes alone will have a material effect upon its waste
disposal brokerage and management operations.  However, consolidation will have
the effect of reducing the number of competitors offering disposal alternatives
which may adversely impact the future financial performance of Avalon's waste
disposal brokerage and management operations.

                                       14
<PAGE>

A significant portion of Avalon's business is not subject to long-term
contracts.   In light of current economic, regulatory, and competitive
conditions, there can be no assurance that Avalon's current customers will
continue to transact business with Avalon at historical levels.  Failure by
Avalon to retain its current customers or to replace lost business could
adversely impact the future financial performance of Avalon.

Avalon's golf course competes with many public and private courses in the area.
As a result of the significant capital improvements to Avalon's golf course, the
greens fees charged customers to play a round of golf have been increased
substantially.  Although Avalon believes that the capital improvements made to
the golf course justify the increased greens fees and will result in increased
net operating revenues and increased income before taxes, such increases have
not been realized and there can be no assurance as to when such increases will
be attained.

Avalon's golf course is located in Warren, Ohio and is significantly dependent
upon weather conditions during the golf season.  Additionally, all of Avalon's
other operations are somewhat seasonal in nature because a significant portion
of the operations are performed primarily in selected northeastern and
midwestern states.  As a result, Avalon's financial performance is adversely
affected by winter weather conditions.

Market Risk

Avalon does not have significant exposure to changing interest rates.  A 10%
change in interest rates would have an immaterial effect on Avalon's income
before taxes for the next fiscal year.  Avalon currently has no debt outstanding
and invests primarily in U.S. Treasury notes, short-term money market funds and
other short-term obligations.  Avalon does not undertake any specific actions to
cover its exposure to interest rate risk and Avalon is not a party to any
interest rate risk management transactions.

Avalon does not purchase or hold any derivative financial instruments.



                          ============================

                                       15
<PAGE>

                          PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

         Reference is made to "Item 3. Legal Proceedings" in Avalon's Annual
         Report on Form 10-K for the year ended December 31, 2001 for a
         description of legal proceedings.

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         Avalon's Annual Meeting of Shareholders was held on April 29, 2002;
         however, no vote of security holders occurred with respect to any
         matters reportable under this Item 4.


Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits
              None

         (b)  Reports on Form 8-K
              On March 12, 2002, Avalon Holdings Corporation disclosed a charge
              to the provision for losses on accounts receivable for the year
              ended December 31, 2001.

                                       16
<PAGE>

                                   SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                             AVALON HOLDINGS CORPORATION
                             (Registrant)



Date:  May 14, 2002          By:  /s/ Timothy C. Coxson
     -----------------            ----------------------------------
                                  Timothy C. Coxson, Chief Financial Officer and
                                  Treasurer (Principal Financial and Accounting
                                  Officer and Duly Authorized Officer)

                                       17